DLJ MORTGAGE ACCEPTANCE CORP
424B5, 2000-10-03
ASSET-BACKED SECURITIES
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<PAGE>

                                               Filed Pursuant to Rule 424(b)(5)
                                               Registration File No.: 333-75921


            PROSPECTUS SUPPLEMENT (TO PROSPECTUS DATED MARCH 2, 2000)
                          DLJ MORTGAGE ACCEPTANCE CORP.
                                    DEPOSITOR
             DLJ MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2000-S4
                                  $209,581,228
                                  (APPROXIMATE)
                                 [WILSHIRE LOGO]




THE TRUST WILL ISSUE:

o    Five classes of senior Class A Certificates, two of which are interest-only
     classes.

o    One class of senior principal-only Class I-P Certificates.

o    Three classes of senior interest-only Class X Certificates.

o    Two classes of interest only Class XB Certificates.

o    Three classes of senior residual Class A-R Certificates.

o    Two classes of Class B Certificates.

o    One class of Class A-S Certificates.

THE CERTIFICATES:

o    Represent ownership interests in a trust, whose assets consist of three
     groups of fixed rate, second lien residential mortgage loans.

o    Represent obligations of the trust only and do not represent an interest in
     or obligation of DLJ Mortgage Acceptance Corp., DLJ Mortgage Capital, Inc.,
     Wilshire Credit Corporation or GreenPoint Mortgage Funding, Inc. or any of
     their affiliates.

o    Offered to the public are listed under the heading "Offered Certificates"
     in the table on page S-3.

CREDIT ENHANCEMENT:

o    An irrevocable Certificate Insurance Policy which will guaranty timely
     payment of interest and ultimate payment of principal on the Class II-A-1,
     Class II-A-2, Class III-A-1 and Class III-A-2 Certificates.

o    A mortgage pool insurance policy which will cover a limited amount of
     credit losses on the mortgage loans.

o    Subordination provided by the Class B Certificates to the senior
     certificates and to some of the Class B Certificates and the Class XB
     Certificates by other Class B Certificates and Class XB Certificates.

o    The Class A-S Certificates will cover a limited amount of losses resulting
     from special hazards and mortgagor bankruptcies.

RISKS:

o    The yield to investors on each class of certificates will be sensitive to
     the rate and timing of principal payments on the mortgage assets in the
     related group, which may vary over time.

o    Net interest shortfalls from prepayments on mortgage loans and losses from
     liquidations of defaulted mortgage loans will adversely affect the yield to
     investors in the related certificates, and the investors in the subordinate
     certificates in particular.

o    The yield on the Class II-A-2, Class III-A-2, Class X-I, Class X-II, Class
     X-III, Class XB-1 and Class XB-2 Certificates are extremely sensitive to
     the rate and timing of principal prepayments on the mortgage loans in the
     related group, as discussed in "Risk Factors" in this prospectus
     supplement.

Donaldson, Lufkin & Jenrette Securities Corporation, as underwriter, will buy
the offered certificates from DLJ Mortgage Acceptance Corp. at a price equal to
100% of their face value. The depositor will pay the expenses related to the
issuance of the certificates from these proceeds. The underwriter will sell the
offered certificates purchased by it from time to time in negotiated
transactions at varying prices determined at the time of sale.

The trust will make three REMIC elections for federal income tax purposes.

NEITHER THE SEC NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED
THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS
IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.

                         DONALDSON, LUFKIN & JENRETTE

                               September 28, 2000
<PAGE>

                               TABLE OF CONTENTS


<TABLE>
<CAPTION>
                                                    PAGE
                                                   -----
<S>                                                <C>
                        PROSPECTUS SUPPLEMENT
Summary Information ............................    S-3
Risk Factors ...................................    S-8
Important Notice About Information
   Presented in this Prospectus
   Supplement and the Prospectus ...............   S-16
The Mortgage Loans .............................   S-16
The Seller .....................................   S-28
Servicing of Mortgage Loans ....................   S-28
The Servicer ...................................   S-29
Description of the Certificates ................   S-33
Subrogation of the Certificate Insurer .........   S-34
Glossary of Terms ..............................   S-35
Yield, Prepayment and Maturity
   Considerations ..............................   S-54
Credit Enhancement .............................   S-67
The Certificate Insurance Policy ...............   S-67
Mortgage Pool Insurance Policy .................   S-71
The Mortgage Pool Insurance Company ............   S-73
Use of Proceeds ................................   S-73
Material Federal Income Tax
   Consequences ................................   S-73
ERISA Considerations ...........................   S-76
Method of Distribution .........................   S-78
Legal Matters ..................................   S-78
Ratings ........................................   S-79
Experts ........................................   S-80

<CAPTION>
                                               PAGE
                                              -----
<S>                                           <C>
                       PROSPECTUS
Risk Factors ..............................     3
Important Notice About Information
   Presented in This Prospectus and the
   Accompanying Prospectus Supplement .....     7
Description of the Securities .............     8
Yield, Prepayment and Maturity
   Consideration ..........................    14
The Trust Funds ...........................    19
Loan Underwriting Procedures and
   Standards ..............................    31
Servicing of Loans ........................    36
Credit Support ............................    47
Description of Mortgage and Other
   Insurance ..............................    50
The Agreements ............................    56
Legal Aspects of Loans ....................    69
Material Federal Income Tax
   Considerations .........................    82
State and Other Tax Consequences ..........   100
ERISA Considerations ......................   100
Legal Investment ..........................   106
Legal Matters .............................   108
The Depositor .............................   108
Use of Proceeds ...........................   108
Plan of Distribution ......................   108
Glossary ..................................   110
</TABLE>


                                      S-2
<PAGE>

                              SUMMARY INFORMATION

     THIS SUMMARY HIGHLIGHTS SELECTED INFORMATION FROM THIS PROSPECTUS
SUPPLEMENT AND DOES NOT CONTAIN ALL OF THE INFORMATION NECESSARY TO MAKE YOUR
INVESTMENT DECISION. PLEASE READ THIS ENTIRE PROSPECTUS SUPPLEMENT AND THE
ACCOMPANYING PROSPECTUS CAREFULLY FOR ADDITIONAL INFORMATION ABOUT THE OFFERED
CERTIFICATES.

DLJ MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 2000-S4



<TABLE>
<CAPTION>
                                       PASS-         INITIAL RATING OF
               INITIAL CLASS          THROUGH          CERTIFICATES          DESIGNATION
                 PRINCIPAL             RATE             S&P     FITCH            AND
    CLASS         BALANCE           (PER ANNUM)       RATING   RATING         FEATURES            FORM
------------- --------------- ---------------------- -------- -------- ---------------------- -----------
<S>           <C>             <C>                    <C>      <C>      <C>                    <C>
OFFERED
CERTIFICATES
     I-A-1    $92,058,319     8.28%                     AAA      AAA           Senior          Book-Entry
      X-I               0     8.28%(1)                  AAA      AAA           Senior/         Book-Entry
                                                                            Interest Only
      I-P     $   544,399     0.00%(2)                  AAA      AAA           Senior/         Book-Entry
                                                                           Principal Only
    II-A-1      57,301,561    Adjustable(3)             AAA      AAA       Senior/Floater      Book-Entry
    II-A-2               0    Adjustable(1)(3)          AAA      AAA       Senior/Inverse      Book-Entry
                                                                              Floater/
                                                                            Interest Only
      X-II               0    0.16%(1)                  AAA      AAA    Senior/Interest Only   Book-Entry
    III-A-1     38,506,827    Adjustable(3)             AAA      AAA       Senior/Floater      Book-Entry
    III-A-2         0         Adjustable(1)(3)          AAA      AAA       Senior/Inverse      Book-Entry
                                                                              Floater/
                                                                            Interest Only
     X-III              0     0.18%(1)                  AAA      AAA           Senior/         Book-Entry
                                                                            Interest Only
     A-R-1    $       100         (5)                   AAA      AAA           Senior           Physical
     A-R-2    $       100         (5)                   AAA      AAA           Senior           Physical
     A-R-3    $       100         (5)                   AAA      AAA           Senior           Physical
      B-1     $12,701,891         (4)                   AA       AA          Subordinate       Book-Entry
      XB-1              0     1.54%(1)                  AA       AA         Subordinate/       Book-Entry
                                                                            Interest Only
      B-2     $ 8,467,931         (4)                    A        A          Subordinate       Book-Entry
      XB-2              0     1.04%(1)                   A        A         Subordinate/       Book-Entry
                                                                            Interest Only
NON-OFFERED
CERTIFICATES
      A-S     $ 2,116,984         (4)                   N/A      N/A         Subordinate        Physical
                                                                             for Special
                                                                             Hazard and
                                                                             Bankruptcy
</TABLE>

----------------------
(1)  These certificates are interest only certificates, will have no principal
     balance and will accrue interest on their related notional amount. The
     initial Class X-I, Class II-A-2, Class X-II, Class III-A-2, Class X-III,
     Class XB-1 and Class XB-2 initial notional amount will be approximately
     $14,379,750, $57,301,561, $57,301,561, $38,506,827, $38,506,827,
     $12,701,891 and $8,467,931, respectively. We refer you to "Description of
     the Certificates--Distributions of Interest" in this prospectus supplement.

(2)  The Class I-P Certificates will not receive any distributions of interest.

(3)  The Class II-A-1, Class II-A-2, Class III-A-1 and Class III-A-2
     Certificates are adjustable rate and will receive interest pursuant to
     formulas based on LIBOR and subject to an available funds cap. We refer you
     to "Description of the Certificates--Distributions of Interest" in this
     prospectus supplement.

(4)  The initial pass-through rate with respect to the Class B-1, Class B-2 and
     Class A-S Certificates will be approximately 8.25%, 8.75% and 9.79%
     respectively per annum and will vary after the first distribution date. We
     refer you to "Description of the Certificates-- Distributions of Interest"
     in this prospectus supplement.

(5)  The initial pass-through rate with respect to the Class A-R-1, Class A-R-2
     and Class A-R-3 Certificates will be approximately 9.86% respectively per
     annum and will vary after the first distribution date. We refer you to
     "Description of the Certificates-- Distributions of Interest" in this
     prospectus supplement.

The initial class principal balances of the certificates are subject to a
variance of no more than 5% prior to their issuance.


RELATIONSHIP BETWEEN GROUPS AND OFFERED
CERTIFICATES

Each of the certificates, other than the Class A-S Certificates, Class B
Certificates and Class XB Certificates, generally will receive distributions
based on principal and interest collected on the mortgage assets in the
corresponding group. The Class I-A-1, Class X-I and Class I-P Certificates
correspond to Group I, the Class II-A-1, Class II-A-2, Class X-II and Class A-R
Certificates correspond to Group II, and the Class III-A-1, Class III-A-2 and
Class X-III Certificates correspond to Group III.

DEPOSITOR

o    DLJ Mortgage Acceptance Corp.

o    The Depositor maintains its principal office at 277 Park Avenue, 9th Floor,
     New York, New York 10172. Its telephone number is (212) 892-3000.


                                      S-3
<PAGE>

SELLER

o    DLJ Mortgage Capital, Inc. is selling the mortgage loans to the depositor.

SERVICER

o    Wilshire Credit Corporation

TRUSTEE

o    The Chase Manhattan Bank

CERTIFICATE INSURER

o    MBIA Insurance Corporation

CUT-OFF DATE

o    September 1, 2000.

CLOSING DATE

o    September 29, 2000.

DETERMINATION DATE

o    The 15th day of each month or if that day is not a business day, the next
     business day.

DISTRIBUTION DATE

o    The 25th day of each month or if the 25th day is not a business day, the
     next business day. The first distribution date will be October 25, 2000.

RECORD DATE

o    The last business day of the month preceding the month of a distribution
     date.

MORTGAGE LOANS

The mortgage pool consists of 100% fixed rate, second lien mortgage loans with
an aggregate principal balance as of September 1, 2000 of approximately
$211,698,223. All of the mortgage loans are secured by residential properties
or shares of cooperative apartments and each is set to mature within 20 years
of the date it was originated.

The mortgage pool consists of the following three loan groups:



<TABLE>
<CAPTION>
                                     APPROXIMATE
                                      PRINCIPAL         MAXIMUM
                                    BALANCE AS OF      MONTHS TO
                      NUMBER OF      SEPTEMBER 1,    MATURITY FROM
    LOAN GROUP     MORTGAGE LOANS        2000       ORIGINATION DATE
----------------- ---------------- --------------- -----------------
<S>               <C>              <C>             <C>
 Loan Group I          3,207       $104,048,006           240
 Loan Group II           915       $ 64,384,117           180
 Loan Group III          693       $ 43,266,099           180
</TABLE>


<TABLE>
<S>                                               <C>
 Loan Group I:
   Weighted average remaining term to stated
      maturity ................................   176
   Weighted average mortgage rate .............   11.23%
   Weighted average net mortgage rate .........   9.52%
 Loan Group II
   Weighted average remaining term to stated
      maturity ................................   177
   Weighted average mortgage rate .............   11.35%
   Weighted average net mortgage rate .........   9.86%
 Loan Group III
   Weighted average remaining term to stated
      maturity ................................   176
   Weighted average mortgage rate .............   12.46%
   Weighted average net mortgage rate .........   10.22%
</TABLE>

We refer you to "The Mortgage Loans" in this prospectus supplement for more
detail.

PRIORITY OF DISTRIBUTIONS

Funds available from monthly payments net of the expense fees, other amounts
received on the mortgage loans in each group, together with any amounts
received from the mortgage pool insurance policy and, with respect to the Class
II-A-1, Class II-A-2, Class III-A-1 and Class III-A-2 Certificates, any amounts
received from the Certificate Insurance Policy on any distribution date will be
distributed to the holders of the certificates related to that group in the
following order:

o    from monthly payments and other amounts on the Group I mortgage loans, to
     principal of the Class I-P Certificates, in the manner described in this
     prospectus supplement under "Description of the Certificates--Distributions
     of Principal;"

o    to the payment of the premium due the certificate insurer, with respect to
     the Class II-A-1, Class II-A-2, Class III-A-1 and Class III-A-2
     Certificates;


                                      S-4
<PAGE>

o    first to interest and then to principal in limited amounts on the Class A-S
     Certificates;

o    to interest on the related interest-bearing senior certificates;

o    to principal of the related Class A and Class A-R Certificates;

o    to reimburse the certificate insurer for amounts due under the insurance
     agreement;

o    from monthly payments and other amounts on the group I mortgage loans, to
     any deferred amounts payable on the Class I-P Certificates; and

o    from monthly payments and other amounts on the mortgage loans from all
     groups, first to interest on the Class B-1 Certificates, second to interest
     on the XB-1 Class Certificates, third to principal on the Class B-1
     Certificates, fourth to interest on the Class B-2 Certificates, fifth to
     interest on the Class XB-2 Certificates and sixth to principal on the Class
     B-2 Certificates.

We refer you to "Description of the Certificates--Priority of Distributions
Among Certificates" in this prospectus supplement for more detail.

INTEREST DISTRIBUTIONS

Interest accrues on the interest-bearing certificates during the related
interest accrual period for each class of certificates.

On each distribution date, you will be entitled to the following:

o    interest at the pass-through rate that accrued during the related accrual
     period; and

o    interest due on a prior distribution date that was not paid.

Your interest entitlement may be reduced as a result of prepayments on the
mortgage loans in the related group and various types of losses on the mortgage
loans that are not covered by the credit enhancement.

The Class I-P Certificates do not receive interest distributions.

PRINCIPAL DISTRIBUTIONS

Principal distributions are payable on each distribution date. The priority and
amount of principal distributions varies from class to class. Shortfalls in
available funds may result in a class receiving less than what it is due unless
such shortfall is offset by the credit enhancement for that class. The
calculation of the amount a class is entitled to receive on each distribution
date is described in this prospectus supplement under "Description of the
Certificates--Distributions of Principal."

The Class II-A-2, Class III-A-2, Class X and Class XB Certificates do not
receive principal distributions.

CROSS-COLLATERALIZATION

In certain limited circumstances, principal and interest collected from one or
more of Group I, Group II or Group III may be used to pay principal or
interest, or both, to the senior certificates unrelated to that loan group. We
refer you to "Description of the Certificates-- Cross-Collateralization" in
this prospectus supplement.

CREDIT ENHANCEMENT

THE MORTGAGE POOL INSURANCE POLICY

A single mortgage pool insurance policy will provide first loss coverage for
credit losses and limited fraud losses on the mortgage loans in all three
groups up to 10.00% of the aggregate principal balance of the mortgage loans,
as of September 1, 2000. The mortgage pool insurance policy will not cover
losses allocated to special hazards or mortgagor bankruptcy and will be further
limited as described in the prospectus supplement.

We refer you to "The Mortgage Pool Insurer" and the "Mortgage Pool Insurance
Policy" in this Prospectus Supplement.

SUBORDINATION

1.   The senior certificates will receive distributions of interest and
     principal prior to distributions of interest and principal to the Class B
     Certificates. Also, on each distribution date, distributions will occur in
     the following order of priority, first, interest to the Class B-1
     Certificates, second, interest to the Class XB-1 Certificates, third,


                                      S-5
<PAGE>

     principal to the Class B-1 Certificates, fourth, interest to the Class B-2
     Certificates, fifth, interest to the Class XB-2 Certificates and sixth,
     principal to the Class B-2 Certificates.

2.   Losses resulting from the liquidation of defaulted mortgage loans not
     otherwise offset by the mortgage pool insurance policy, from all three
     groups (other than losses allocable to special hazard or mortgagor
     bankruptcy) will be allocated first to the Class B Certificates and Class
     XB Certificates as described in this prospectus supplement and then to the
     Class A Certificates and the Class A-S Component on a pro rata basis.

3.   Losses allocable to special hazards and mortgagor bankruptcy loss from all
     three groups will be allocated to the Class A-S Certificates to the extent
     of the coverage that they provide, until their class balance has been
     reduced to zero.

We refer you to "Description of the Certificates-- Priority of Distributions
Among Certificates" and "--Allocation of Losses" in this prospectus supplement
for more detail.

THE CERTIFICATE INSURANCE POLICY

The Certificate Insurance Policy will guarantee the timely payment of interest
and the ultimate payment of principal on the Class II-A-1, Class II-A-2, Class
III-A-1 and Class III-A-2 Certificates to the extent described in this
Prospectus Supplement. The Certificate Insurance Policy will not cover some
types of interest shortfalls. If the Certificate Insurer were unable to pay
under the Certificate Insurance Policy, these Certificates could be subject to
losses that were otherwise covered by the Certificate Insurance Policy.

We refer you to "The Certificate Insurer" and "The Certificate Insurance
Policy" in this Prospectus Supplement for more detail.

OPTIONAL TERMINATION OF THE TRUST

If the aggregate principal balance of the mortgage assets declines below 5% of
the total pool principal balance as of the cut-off date, then the depositor may
purchase all of the mortgage assets and the related properties in the trust. If
the depositor purchases all of the mortgage assets, you will receive a final
distribution and then the trust will be terminated.

We refer you to "Description of the Certificates --Optional Termination" in
this prospectus supplement for more detail.

ADVANCES

If the servicer of the mortgage loans reasonably believes that cash advances
can be recovered from a delinquent mortgagor or other collections on the
mortgage loan, then the servicer will make cash advances to cover the
delinquent mortgage loan payments. Advances are intended to maintain a regular
flow of scheduled interest and principal payments on the certificates, and not
to guarantee or insure against losses.

We refer you to "Servicing--Advances from the Servicer" in this prospectus
supplement for more detail.

FEDERAL INCOME TAX CONSEQUENCES

For federal income tax purposes, the trust will be treated as three REMICs. All
classes of certificates, other than the Class A-R-1 Certificates, Class A-R-2
Certificates and Class A-R-3 Certificates, will represent regular interests in
a REMIC. Each Class A-R Certificate will represent ownership of the residual
interests in a REMIC.

ERISA CONSIDERATIONS

The senior certificates, other than the Class A-R Certificates, may be eligible
for purchase by persons investing assets of employee benefit plans or
individual retirement accounts subject to important considerations. Sales of
the subordinate certificates and Class A-R Certificates to these plans or
retirement accounts are prohibited, except as permitted under "ERISA
Considerations" in this prospectus supplement. If you invest in a Class B-1,
Class XB-1, Class B-2 or Class XB-2 Certificate, you will be deemed to
represent that you comply with these restrictions.


                                      S-6
<PAGE>

LEGAL INVESTMENT

The certificates will not be mortgage related securities for purposes of the
Secondary Mortgage Market Enhancement Act of 1984. You should consult your
legal advisor in determining whether and to what extent the certificates are
legal investments for you.

RATINGS

The trust will not issue the offered certificates unless they have been
assigned the ratings designated on page S-3.

A rating is not a recommendation to buy, sell or hold securities and may be
subject to revision or withdrawal at any time by either rating agency.


                                      S-7
<PAGE>

                                  RISK FACTORS

     THIS PROSPECTUS SUPPLEMENT TOGETHER WITH THE PROSPECTUS DESCRIBES THE
MATERIAL RISK FACTORS RELATED TO YOUR CERTIFICATES. THE CERTIFICATES OFFERED
UNDER THIS PROSPECTUS SUPPLEMENT ARE COMPLEX SECURITIES. YOU SHOULD POSSESS,
EITHER ALONE OR TOGETHER WITH AN INVESTMENT ADVISOR, THE EXPERTISE NECESSARY TO
EVALUATE THE INFORMATION CONTAINED IN THIS PROSPECTUS SUPPLEMENT IN THE CONTEXT
OF YOUR FINANCIAL SITUATION AND TOLERANCE FOR RISK.

     For purposes of this section, references to related mortgage loans mean the
Group I mortgage loans with respect to the Group I certificates, the Group II
mortgage loans with respect to the Group II certificates and the Group III
mortgage loans with respect to the Group III certificates.

<TABLE>
<CAPTION>

<S>                                              <C>
INCREASED RISK OF LOSS AS A RESULT OF            All of the mortgage loans are secured by second liens on
SECOND LIEN MORTGAGE LOANS                       the related mortgaged property. If a mortgagor on a mortgage
                                                 loan secured by a second lien defaults, the trust's rights to
                                                 proceeds on the liquidation of the related mortgaged property
                                                 are subordinate to the rights of the holder of the first lien
                                                 on the related mortgaged property. There may not be enough
                                                 proceeds to pay both the first lien and the second lien. If
                                                 the net proceeds from a mortgaged property available after
                                                 satisfaction of the first lien fails to provide adequate
                                                 security for the mortgage loan, you will incur a loss on your
                                                 investment if the available credit enhancement is
                                                 insufficient to cover the loss.

                                                 When it is uneconomical to foreclose on a mortgaged property
                                                 or engage in other loss mitigation procedures, the servicer
                                                 may write off the entire outstanding balance of the home loan
                                                 as a bad debt. These are risks particularly applicable to
                                                 home loans secured by second liens that have high combined
                                                 loan-to-value ratios or have small balances relative to the
                                                 total indebtedness of the borrower because it is more likely
                                                 that the servicer would determine foreclosure to be
                                                 uneconomical for those types of home loans than for first
                                                 lien mortgage loans with low loan-to-value ratios.

INCREASED RISK OF LOSS AS A RESULT OF            Approximately 38.45%, 58.05% and 66.02% of the Group I,
BALLOON LOANS                                    Group II and Group III mortgage loans respectively by
                                                 principal balance as of September 1, 2000 are balloon loans.
                                                 Balloon loans pose a special payment risk because the
                                                 mortgagor must pay, and the servicer is NOT obligated to
                                                 advance, a lump sum payment of principal at the end of the
                                                 loan term. If the mortgagor is unable to pay the lump sum or
                                                 refinance such amount, you may suffer a loss if the net
                                                 proceeds from the collateral for such loan available after
                                                 satisfaction of the first lien is insufficient and the other
                                                 forms of credit enhancement are insufficient or unavailable
                                                 to cover the loss.


INCREASED RISK OF LOSS AS A RESULT OF            Approximately 49.38% of the Group I  mortgage loans by
GEOGRAPHIC CONCENTRATION                         principal balance as of September 1, 2000, approximately
                                                 83.85% of the Group II mortgage loans, by principal balance
                                                 as of September 1, 2000, and approximately 71.55% of the
                                                 Group III mortgage loans by principal


                                      S-8
<PAGE>

                                                 balance as of September 1, 2000 are secured by properties
                                                 located in California. If the California residential real
                                                 estate market should experience an overall decline in
                                                 property values after the dates of origination of the
                                                 mortgage loans, the rates of delinquency, foreclosure,
                                                 bankruptcy and loss on the mortgage loans may increase, as
                                                 compared to those rates in a stable or improving real estate
                                                 market. Also, California is more susceptible to various types
                                                 of hazards, such as earthquakes, brush fires, floods,
                                                 mudslides and other natural disasters that are not insured by
                                                 required hazard insurance. If these occur, the rates of
                                                 delinquency, foreclosure, bankruptcy and loss on the mortgage
                                                 loans may increase.

THE VALUE OF YOUR CERTIFICATE MAY BE             If the performance of the mortgage loans is substantially
REDUCED IF LOSSES ARE HIGHER THAN                worse than assumed by the rating agencies, the ratings of
EXPECTED                                         any class of related certificates may be lowered in the
                                                 future. This would probably reduce the value of those
                                                 certificates.

POTENTIAL INADEQUACY OF CREDIT                   The Class II-A-1, Class II-A-2, Class III-A-1 and Class
ENHANCEMENT                                      III-A-2 Certificates are insured by a certificate insurance
                                                 policy. None of the other classes of certificates are insured
                                                 under such policy.

                                                 The mortgage pool insurance policy, subordination and
                                                 cross-collateralization features described in this prospectus
                                                 supplement are intended to enhance the likelihood that
                                                 certificateholders of the classes of certificates with a
                                                 higher payment priority will receive regular payments of
                                                 interest and principal, but such credit enhancements are
                                                 limited in nature and may be insufficient to cover all losses
                                                 on the mortgage loans.

                                                 None of the depositor, the seller, the trustee, the servicer
                                                 or any other entity will have any obligation to supplement
                                                 any credit enhancement, or to take any other action to
                                                 maintain any rating of the certificates. Consequently, if
                                                 payments on the mortgage loans are insufficient to make all
                                                 payments required on the certificates, then you may incur a
                                                 loss on your investment.


LOSS MITIGATION PRACTICES MAY INCREASE           The servicer may use a wide variety of practices to limit
YOUR RISK.                                       losses on defaulted home loans, including writing off part of
                                                 the debt, reducing future payments, and deferring the
                                                 collection of past due payments.


YOU MAY HAVE TO HOLD YOUR CERTIFICATES           The underwriter intends to make a secondary market for the
TO MATURITY IF THEIR MARKETABILITY IS            offered certificates, but is not obligated to do so. There
LIMITED                                          is currently no secondary market for the offered
                                                 certificates. We cannot give you any assurance that a
                                                 secondary market will develop or, if it develops, that it
                                                 will continue. Consequently, you may not be able to sell your
                                                 offered certificates readily or at prices that will enable
                                                 you to realize your desired yield. The market values of the


                                      S-9
<PAGE>

                                                 offered certificates are likely to fluctuate; these
                                                 fluctuations may be significant and could result in
                                                 significant losses to you.

                                                 The secondary markets for mortgage backed securities have
                                                 experienced periods of illiquidity and can be expected to do
                                                 so in the future. Illiquidity means you may not be able to
                                                 find a buyer to buy your securities readily or at prices that
                                                 will enable you to realize a desired yield. Illiquidity can
                                                 have a severely adverse effect on the prices of securities
                                                 that are especially sensitive to prepayment, credit or
                                                 interest rate risk, or that have been structured to meet the
                                                 investment requirements of limited categories of investors.


THE YIELD ON YOUR CERTIFICATES WILL VARY         The rate of principal distributions and yield to maturity on
DEPENDING ON THE RATE OF PREPAYMENTS             your certificates will be directly related to the rate of
                                                 principal payments on the mortgage loans in the related
                                                 group. A mortgagor may prepay a mortgage loan at any time.
                                                 The rate of principal payments on the mortgage loans will be
                                                 affected by, among other factors, the following:

                                                 o  the amortization schedules of the mortgage loans;

                                                 o  the rate of prepayments by mortgagors, including
                                                    prepayments resulting from refinancing;

                                                 o  liquidations of defaulted mortgage loans;

                                                 o  prepayments and defaults in the related senior liens;

                                                 o  the availability of similar or alternative mortgage
                                                    products; and

                                                 o  repurchases of mortgage loans as a result of defective
                                                    documentation and breaches of representations and
                                                    warranties.

                                                 Approximately 6.44%, 0.98% and 4.82% of the Group I, Group II
                                                 and Group III mortgage loans, respectively, by principal
                                                 balance as of September 1, 2000, impose a penalty for early
                                                 full or partial prepayments of a mortgage loan if such
                                                 prepayments are made by the mortgagor during a specified
                                                 period occurring during the first one to five years after
                                                 origination and the amount of such prepayments in any
                                                 twelve-month period are in excess of 20% of the original
                                                 principal balance of such mortgage loan. Such prepayment
                                                 penalties may discourage borrowers from prepaying their
                                                 mortgage loans during the penalty period and, accordingly,
                                                 affect the rate of prepayment of such mortgage loans even in
                                                 a declining interest rate environment. Any such prepayment
                                                 penalties will be paid to the servicer and will not, in any
                                                 circumstances, be available for payment of the certificates.


                                      S-10
<PAGE>

                                                 The rate of principal payments on pools of mortgage loans is
                                                 influenced by a variety of economic, geographic, social and
                                                 other factors. For example, if currently offered mortgage
                                                 rates fall below the mortgage rates on the mortgage loans,
                                                 the prepayment rate should increase. On the other hand, if
                                                 currently offered mortgage rates rise above the mortgage
                                                 rates on the mortgage loans, the prepayment rate should
                                                 decrease.

                                                 The rate of principal distributions on your certificates will
                                                 also be affected by any optional termination of the trust.


IF THE RATE OF PREPAYMENTS ON THE                We cannot predict the rate at which mortgagors will repay
MORTGAGE LOANS IS DIFFERENT THAN                 their mortgage loans. Please consider the following:
EXPECTED, YOUR YIELD MAY BE                      o   If you are purchasing a certificate at a discount, your
CONSIDERABLY LOWER THAN ANTICIPATED                  yield may be lower than expected if principal payments on
                                                     the related mortgage loans occur at a slower rate than
                                                     you expected.

                                                 o   If you are purchasing a certificate at a premium, your
                                                     yield may be lower than expected if principal payments on
                                                     the related mortgage loans occur at a faster rate than
                                                     you expected.

                                                 o   Certificates that receive only payments of interest are
                                                     especially sensitive to variations in the rate of
                                                     prepayments. If the rate of prepayments is faster than
                                                     you expected, your yield will be lower than expected and
                                                     you may not fully recoup your initial investment.

                                                 o   Certificates that receive only payments of principal are
                                                     especially sensitive to variations in the rate of
                                                     prepayments. If the rate of prepayments is faster than
                                                     you expected, your yield will be lower than expected and
                                                     you may not fully recoup your initial investment.

                                                 o   The earlier a payment of principal occurs, the greater
                                                     the impact on your yield. For example, if you purchase a
                                                     certificate at a premium, although the average rate of
                                                     principal payments is consistent with your expectations,
                                                     if the rate of principal payments occurs initially at a
                                                     rate higher than expected, which would adversely impact
                                                     your yield, a subsequent reduction in the rate of
                                                     principal payments will not offset any adverse yield
                                                     effect.

                                                 We refer you to "Yield, Prepayment and Maturity
                                                 Considerations" in this prospectus supplement for more
                                                 detail.


RAPID PREPAYMENTS ON THE GROUP I                 The Class X-I Certificates receive only distributions of
MORTGAGE LOANS WILL REDUCE THE YIELD ON          interest. Payments to the holders of the Class X-I
THE CLASS X-I CERTIFICATES                       Certificates are based on the principal balance of the Group
                                                 I mortgage loans. You should fully consider the risks
                                                 associated with an investment in the Class X-I Certificates.
                                                 If the Group I mortgage loans prepay faster


                                      S-11
<PAGE>

                                                 than expected or if the Trust is terminated earlier than
                                                 expected, you may not fully recover your initial investment.

                                                 If you invest in Class X-I Certificates, you should be aware
                                                 that the Class X-I Certificates receive only distributions of
                                                 interest on Group I mortgage loans with Net Mortgage Rates
                                                 higher than 8.28% and mortgage loans with higher mortgage
                                                 rates are more likely to be prepaid than mortgage loans with
                                                 lower mortgage rates. If the mortgage loans that have high
                                                 net mortgage rates are prepaid at a rate faster than you
                                                 assumed at the time of purchase, your yield may be adversely
                                                 affected. You should fully consider the risk that a rapid
                                                 rate of prepayments on the mortgage loans that have high net
                                                 mortgage rates could result in your failure to fully recover
                                                 your investments.

                                                 Therefore, the yield on the Class X-I Certificates will be
                                                 extremely sensitive to the rate and timing of principal
                                                 prepayments and defaults on the related mortgage loans that
                                                 have net mortgage rates higher than 8.28%.

                                                 We refer you to "Yield, Prepayment and Maturity
                                                 Considerations" in this prospectus supplement for more
                                                 detail.


RAPID PREPAYMENTS ON THE MORTGAGE                The Class XB Certificates receive only distributions of
LOANS WILL REDUCE THE YIELD ON THE CLASS         interest. Payments to the holders of the Class XB-1
XB CERTIFICATES                                  Certificates and the Class XB-2 Certificates are based on the
                                                 class principal balance of the Class B-1 Certificates and
                                                 Class B-2 Certificates, respectively. You should fully
                                                 consider the risks associated with an investment in the Class
                                                 XB Certificates. In addition the Class XB Certificates are
                                                 subordinated in right of payment as described in this
                                                 prospectus supplement.

                                                 We refer you to "Yield, Prepayment and Maturity
                                                 Considerations" in this prospectus supplement for more
                                                 detail.


YIELD ON THE CLASS I-P CERTIFICATES ARE          The Class I-P Certificates will receive a portion of the
EXTREMELY SENSITIVE TO THE RATE AND              principal payments only on the Group I mortgage loans
TIMING OF PREPAYMENTS                            that have net mortgage rates lower than 8.28% per annum.

                                                 Therefore, the yield on the Class I-P Certificates are
                                                 extremely sensitive to the rate and timing of principal
                                                 prepayments and defaults on the Group I mortgage loans that
                                                 have net mortgage rates lower than that indicated above.

                                                 If you invest in the Class I-P Certificates, you should be
                                                 aware that mortgage loans with lower mortgage rates are less
                                                 likely to be prepaid than mortgage loans with higher mortgage
                                                 rates. If prepayments of principal on the mortgage loans that
                                                 have low net mortgage rates occur at a rate slower than you
                                                 assumed at the time of purchase, your yield may be less than
                                                 expected.


                                      S-12
<PAGE>

                                                 If you invest in the Class I-P Certificates, you should be
                                                 aware that mortgage loans with lower mortgage rates are less
                                                 likely to be prepaid than mortgage loans with higher mortgage
                                                 rates. If prepayments of principal on the mortgage loans that
                                                 have low net mortgage rates occur at a rate slower than you
                                                 assumed at the time of purchase, your yield may be less than
                                                 expected.

                                                 We refer you to "Yield, Prepayment and Maturity
                                                 Considerations" in this prospectus supplement for more
                                                 detail.


RAPID PREPAYMENTS ON THE GROUP II                The Class II-A-2 Certificates and Class X-II Certificates
MORTGAGE LOANS WILL REDUCE THE YIELD ON          receive only distributions of interest. Payments to the
THE CLASS II-A-2 CERTIFICATES AND CLASS          holders of the Class  II-A-2 Certificates and Class X-II
X-II CERTIFICATES                                Certificates are based on the principal balance of the Group
                                                 II mortgage loans. You should fully consider the risks
                                                 associated with an investment in the Class II-A-2
                                                 Certificates and Class X-II Certificates. If the Group II
                                                 mortgage loans prepay faster than expected or if the Trust is
                                                 terminated earlier than expected, you may not fully recover
                                                 your initial investment.

                                                 We refer you to "Yield, Prepayment and Maturity
                                                 Considerations" in this prospectus supplement for more
                                                 detail.


RAPID PREPAYMENTS ON THE GROUP III               The Class III-A-2 Certificates and Class X-III Certificates
MORTGAGE LOANS WILL REDUCE THE YIELD ON          receive only distributions of interest. Payments to the
THE CLASS III-A-2 CERTIFICATES AND CLASS         holders of the Class III-A-2 Certificates and Class X-III
X-III CERTIFICATES                               Certificates are based on the principal balance of the Group
                                                 III mortgage loans. You should fully consider the risks
                                                 associated with an investment in the Class III-A-2
                                                 Certificates and Class X-III Certificates. If the Group III
                                                 mortgage loans prepay faster than expected or if the Trust is
                                                 terminated earlier than expected, you may not fully recover
                                                 your initial investment.

                                                 We refer you to "Yield, Prepayment and Maturity
                                                 Considerations" in this prospectus supplement for more
                                                 detail.


YIELD ON THE CLASS II-A-1, CLASS II-A-2,         The Class II-A-1, Class II-A-2, Class III-A-1 and Class
CLASS III-A-1 AND CLASS III-A-2 ARE              III-A-2 Certificates will accrue interest at an adjusting rate
SENSITIVE TO ONE-MONTH LIBOR                     determined separately for each such class and distribution
                                                 date according to one-month LIBOR and will be subject to an
                                                 available funds cap in the manner described in this
                                                 prospectus supplement under "Description of the
                                                 Certificates--Determination of LIBOR." The interest rate on
                                                 the Class II-A-2 Certificates and Class III-A-2 Certificates
                                                 will vary inversely with one-month LIBOR and will be subject
                                                 to an available funds cap. Therefore, the yield to investors
                                                 on the Class II-A-1 Certificates, Class II-A-2 Certificates,
                                                 Class III-A-1 Certificates and III-A-2 Certificates will be
                                                 sensitive to fluctuations of the index.


                                      S-13
<PAGE>

                                                 We refer you to "Yield, Prepayment and Maturity
                                                 Considerations" in this prospectus supplement for more
                                                 detail.


RISKS OF HOLDING CLASS B CERTIFICATES            Before purchasing Class B Certificates, you should consider
                                                 the following factors that may negatively impact your yield.

                                                 The Class B Certificates are not entitled to a proportionate
                                                 share of principal payments on the mortgage loans until the
                                                 beginning of the fifth year after the closing date.

                                                 Losses resulting from the liquidation of defaulted mortgage
                                                 loans in all three mortgage loan groups not offset by the
                                                 mortgage pool insurance policy and which are not bankruptcy
                                                 losses and special hazard losses, will be allocated first to
                                                 the Class B Certificates, and then to the related Class A
                                                 Certificates and Class A-S Component on a pro-rata basis.

                                                 A loss allocation results in a reduction in a class balance
                                                 without a corresponding distribution of cash to the holder.
                                                 Also, the lower class balance will result in less interest
                                                 accruing on the certificate.

                                                 o   The earlier in the transaction that a loss on a mortgage
                                                     loan is applied, the greater the reduction in yield.

                                                 o   These risks are more severe for the Class B Certificates.

                                                 We refer you to "Description of the Certificates" and "Yield,
                                                 Prepayment and Maturity Considerations" in this prospectus
                                                 supplement for more detail.


CONSEQUENCES OF OWNING BOOK-ENTRY                Limit on Liquidity of Certificates. Issuance of the offered
CERTIFICATES                                     certificates in book-entry form may reduce the liquidity of
                                                 such certificates in the secondary trading market since
                                                 investors may be unwilling to purchase certificates for which
                                                 they cannot obtain physical certificates.

                                                 Limit on Ability to Transfer or Pledge. Since transactions in
                                                 the book-entry certificates can be effected only through DTC,
                                                 participating organizations, indirect participants and
                                                 certain banks, your ability to transfer or pledge a
                                                 book-entry certificate to persons or entities that do not
                                                 participate in the DTC system or otherwise to take actions in
                                                 respect of such certificates, may be limited due to lack of a
                                                 physical certificate representing the book-entry
                                                 certificates.

                                                 Delays in Distributions. You may experience some delay in the
                                                 receipt of distributions on the book-entry certificates since
                                                 the distributions will be forwarded by the trustee to DTC for
                                                 DTC to credit the accounts of its participants which will
                                                 thereafter credit them to your account either directly or
                                                 indirectly through indirect participants, as applicable.


                                      S-14
<PAGE>

                                                 We refer you to "Description of the Certificates--DTC
                                                 Registered Certificates" in this prospectus supplement for
                                                 more detail.


SERVICING TRANSFER COULD CAUSE HIGHER            The mortgage loans are currently being serviced by various
DELINQUENCIES                                    servicers as described in "Servicing of the Mortgage Loans"
                                                 in this prospectus supplement. It is anticipated that on or
                                                 about November 1, 2000, the servicing function will be
                                                 transferred to Wilshire Credit Corporation. Servicing
                                                 transfers can result in an increase in delinquencies on the
                                                 transferred loans.

</TABLE>


                                      S-15
<PAGE>

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

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

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

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

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

     For purposes of this prospectus supplement, references to related mortgage
loans means, with respect to the Group I certificates, the Group I mortgage
loans, with respect to the Group II certificates, the Group II mortgage loans,
and with respect to the Group III certificates, the Group III mortgage loans.

                              THE MORTGAGE LOANS

     The depositor will establish a trust for Series 2000-S4 on the closing
date, under a pooling and servicing agreement among the depositor, the seller,
servicer and the trustee, dated as of the cut-off date. On the closing date,
the depositor will deposit the mortgage loans into the trust. The mortgage
loans consist of a pool of fixed rate second lien mortgage loans secured by
residential properties with terms to maturity of not more than fifteen years.

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

     The depositor will acquire all the mortgage loans with an aggregate Stated
Principal Balance as of the cut-off date of approximately $211,698,223 from DLJ
Mortgage Capital, Inc. ("DLJ MORTGAGE CAPITAL") pursuant to a mortgage loan
purchase agreement. These mortgage loans were previously purchased by DLJ
Mortgage Capital in secondary market transactions from various underlying
sellers. GreenPoint Mortgage Funding, Inc. sold and will be the interim
sub-servicer with respect to 82.09% of the mortgage loans by principal balance.
All of the mortgage loans are being sub-serviced by various subservicers, each
pursuant to a separate interim sub-servicing agreement which will be assigned
to Wilshire Credit Corporation on the closing date. As of the closing date
Wilshire Credit Corporation will be responsible for servicing the mortgage
loans under the pooling and servicing agreement and will have entered into a
commitment to purchase the servicing rights from DLJ Mortgage Capital. The
purchase and transfer of servicing will occur after the closing date and will
result in the termination of the interim sub-servicing agreements. The Group I
mortgage loans, Group II mortgage loans and Group III mortgage loans each have
an aggregate stated principal balance as of the cut off date of approximately
$104,048,006, $64,384,117 and $43,266,099.

     Under the pooling and servicing agreement, the depositor will assign the
mortgage loans to the trustee for the benefit of the holders of the
certificates.

     Under the pooling and servicing agreement, the depositor will assign
representations and warranties relating to the characteristics of the mortgage
loans as of the cut-off date, as further described in the prospectus under
"Loan Underwriting Procedures and Standards--Representations and Warranties".
In the event of a breach of any representation or warranty relating to a
mortgage loan that materially and adversely affects the interests of the
certificateholders without regard to the Certificate Insurance Policy in that
mortgage loan, the seller will be obligated to do one of the following:

     o   cure that breach,

     o   repurchase that mortgage loan at an amount equal to the sum of the
         unpaid principal balance of the mortgage loan on the date of
         repurchase, and accrued interest on that mortgage loan at the
         applicable mortgage rate from the date through which interest was last
         paid by the mortgagor to the date of repurchase, or

     o   substitute a replacement mortgage loan for that mortgage loan.


                                      S-16
<PAGE>

     However, this substitution is permitted only within two years of the
closing date and may not be made unless an opinion of counsel is provided to
the effect that the substitution will not disqualify any REMIC, or result in a
prohibited transaction under the Internal Revenue Code. The depositor will make
no representations or warranties for the mortgage loans and will have no
obligation to repurchase or substitute mortgage loans with deficient
documentation or that are otherwise defective. The seller is selling the
mortgage loans without recourse and will have no obligations for the mortgage
loans in its capacity as seller other than the cure, repurchase or substitution
obligations described above. The obligations of the servicer is limited to its
contractual servicing obligations under the pooling and servicing agreement.

     Information relating to the mortgage loans to be included in the mortgage
pool is presented in this section. Prior to the closing date, mortgage loans
may be removed from the mortgage loans to be included in the mortgage pool and
other mortgage loans may be substituted for those mortgage loans. The depositor
believes that the information in this prospectus supplement relating to the
mortgage loans to be included in the mortgage pool as presently constituted is
representative of the characteristics of the mortgage loans as it will be
constituted at the closing date, although some characteristics of the mortgage
loans in the mortgage pool may vary. Information presented below expressed as a
percentage, other than rates of interest, are approximate percentages based on
the Stated Principal Balances of the mortgage loans as of the cut-off date,
unless otherwise indicated.

     As of the cut-off date, the aggregate Stated Principal Balance of the
mortgage loans is expected to be approximately $211,698,223. The mortgage loans
provide for the amortization of the amount financed over a series of
substantially equal monthly payments except the mortgagor must pay a lump sum
payment at the end of the term of the mortgage loan with respect to the balloon
loans. Substantially all of the mortgage loans provide for payments due on the
first day of each month. The mortgage loans to be included in the mortgage pool
were acquired by the seller in the normal course of its business and in
accordance with the underwriting criteria specified in this prospectus
supplement. At origination, the mortgage loans had stated terms to maturity
which ranged from 5 to 20 years. Scheduled monthly payments made by the
mortgagors on the mortgage loans either earlier or later than the scheduled due
dates will not affect the amortization schedule or the relative application of
those payments to principal and interest. Approximately 6.44%, 0.98% and 4.82%
of the Group I mortgage loans, Group II mortgage loans and Group III mortgage
loans, respectively, by principal balance as of the cut-off date, are subject
to a prepayment penalty. Generally, if a mortgagor prepays more than 20% of the
original loan amount in any 12 month period, the mortgagor must pay a penalty
equal to the lesser of (a) six month's interest on the amount prepaid over 20%
and (b) the amount authorized by law. All prepayment penalties will be paid to
the servicer and will not be available to make payments on the certificates.

     As of the cut-off date, the Group I mortgage loans will have the
characteristics indicated in the following table:

<TABLE>
<CAPTION>
                                           NUMBER OF
                      AGGREGATE STATED     MORTGAGE      EARLIEST PAYMENT     LATEST STATED     EARLIEST STATED
   DESIGNATION       PRINCIPAL BALANCE       LOANS             DATE           MATURITY DATE      MATURITY DATE
   -----------       -----------------       -----             ----           -------------      -------------
<S>                 <C>                   <C>          <C>                   <C>               <C>
Group I .........    $ 104,048,006.67     3,207        September 1, 1998     April 1, 2020     December 6, 2004
</TABLE>

     As of the cut-off date, the Group II mortgage loans will have the
characteristics indicated in the following table:


<TABLE>
<CAPTION>
                                            NUMBER OF
                       AGGREGATE STATED     MORTGAGE      EARLIEST PAYMENT      LATEST STATED     EARLIEST STATED
    DESIGNATION       PRINCIPAL BALANCE       LOANS             DATE            MATURITY DATE      MATURITY DATE
    -----------       -----------------       -----             ----            -------------      -------------
<S>                  <C>                   <C>          <C>                   <C>                <C>
Group II .........     $ 64,384,117.02     915          September 1, 1999     August 1, 2015     May 15, 2010
</TABLE>


                                      S-17
<PAGE>

     As of the cut-off date, the Group III mortgage loans will have the
characteristics indicated in the following table:




<TABLE>
<CAPTION>
                                        NUMBER OF
                   AGGREGATE STATED     MORTGAGE     EARLIEST PAYMENT     LATEST STATED     EARLIEST STATED
  DESIGNATION     PRINCIPAL BALANCE       LOANS            DATE           MATURITY DATE      MATURITY DATE
  -----------     -----------------       -----            ----           -------------      -------------
<S>              <C>                   <C>          <C>                  <C>               <C>
Group III.....     $ 43,266,099.89     693          February 1, 1999     July 1, 2015      October 1, 2009
</TABLE>

     No mortgage loan will be delinquent as of the cut-off date.

     Approximately 38.45%, 58.05% and 66.02% of the Group I, Group II and Group
III mortgage loans, respectively, by principal balance as of the cut-off date,
are balloon loans.

     Approximately 0.28% of the Group I mortgage loans, by principal balance as
of the cut-off date, are secured by properties in Puerto Rico.

     No mortgage loan is subject to a buydown agreement. None of these mortgage
loans provides for deferred interest or negative amortization.

     The CLTV ratio of a mortgage loan at any given time is a fraction,
expressed as a percentage, the numerator of which is the sum of the principal
balance of the related mortgage loan at the date of determination and the
principal balance of the related first lien as of either (i) the date of
origination of that mortgage loan or (ii) the date of origination of the
related first lien and the denominator of which is (a) in the case of a
purchase, the lesser of the selling price of the mortgaged property and its
appraised value determined in an appraisal obtained by the originator at
origination of such mortgage loan, or (b) in the case of a refinance, the
appraised value of the mortgaged property at the time of such refinance. No
assurance can be given that the value of any mortgaged property has remained or
will remain at the level that existed on the appraisal or sales date. If
residential real estate values overall or in a particular geographic area
decline, the CLTV ratios might not be a reliable indicator of the rates of
delinquencies, foreclosures and losses that could occur on those mortgage
loans.

     All of the mortgage loans had a CLTV ratio at origination of 100% or less.
See "Underwriting Standards" in this prospectus supplement.


                                      S-18
<PAGE>

     The Group I mortgage loans are expected to have the following
characteristics as of the cut-off date. Except for rates of interest,
percentages, which are approximate, are stated by principal balance of the
mortgage loans in each group as of the cut-off date and have been rounded in
order to total 100%.

                            GROUP I MORTGAGE LOANS

<TABLE>
<CAPTION>
                ORIGINAL COMBINED LOAN-TO-VALUE RATIOS(1)
--------------------------------------------------------------------------
                              NUMBER          AGGREGATE         PERCENT OF
    ORIGINAL COMBINED           OF            PRINCIPAL          GROUP I
      LOAN-TO-VALUE          MORTGAGE          BALANCE           MORTGAGE
        RATIOS(%)              LOANS         OUTSTANDING          LOANS
--------------------------------------------------------------------------
<S>                         <C>          <C>                   <C>
 0.001 - 10.000 .........          1     $     25,188.59            0.02%
10.001 - 20.000 .........          6          106,037.64            0.10
20.001 - 30.000 .........         10          403,614.90            0.39
30.001 - 40.000 .........         10          319,513.46            0.31
40.001 - 50.000 .........         36        1,229,159.29            1.18
50.001 - 60.000 .........         70        2,622,464.43            2.52
60.001 - 70.000 .........        172        6,979,647.81            6.71
70.001 - 80.000 .........        453       17,740,913.95           17.05
80.001 - 90.000 .........      1,170       33,339,540.25           32.04
90.001 - 100.00 .........      1,279       41,281,926.35           39.68
                               -----     ----------------         ------
  Totals ................      3,207     $104,048,006.67          100.00%
                               =====     ================         ======
</TABLE>

----------------------
(1)   The weighted average original CLTV ratio of the Group I mortgage loans is
      expected to be approximately 86.36%.


<TABLE>
<CAPTION>
                    CURRENT MORTGAGE LOAN PRINCIPAL BALANCE(1)
------------------------------------------------------------------------------
                                      NUMBER          AGGREGATE     PERCENT OF
         CURRENT MORTGAGE               OF            PRINCIPAL      GROUP I
          LOAN PRINCIPAL             MORTGAGE          BALANCE       MORTGAGE
           BALANCES($)                 LOANS         OUTSTANDING      LOANS
------------------------------------------------------------------------------
<S>                                 <C>          <C>               <C>
      0.01 -  10,000.00 .........        107     $    987,081.40        0.95%
 10,000.01 -  20,000.00 .........        655       10,544,348.16       10.13
 20,000.01 -  30,000.00 .........        982       24,787,037.31       23.82
 30,000.01 -  40,000.00 .........        667       23,756,054.39       22.83
 40,000.01 -  50,000.00 .........        482       22,324,708.45       21.46
 50,000.01 -  60,000.00 .........        117        6,587,246.16        6.33
 60,000.01 -  70,000.00 .........         81        5,265,552.06        5.06
 70,000.01 -  80,000.00 .........         59        4,454,708.65        4.28
 80,000.01 -  90,000.00 .........         26        2,211,298.62        2.13
 90,000.01 - 100,000.00 .........         24        2,354,612.85        2.26
100,000.01 - 110,000.00 .........          5          533,060.58        0.51
110,000.01 - 120,000.00 .........          1          118,603.69        0.11
120,000.01 - 130,000.00 .........          1          123,694.35        0.12
                                         ---     ----------------     ------
  Total: ........................      3,207     $104,048,006.67      100.00%
                                       =====     ================     ======
</TABLE>

----------------------
(1)   As of the cut-off date, the average current Group I mortgage loan
      principal balance is expected to be approximately $32,444.


<TABLE>
<CAPTION>
                            MORTGAGE RATES(1)
--------------------------------------------------------------------------
                              NUMBER          AGGREGATE
                                OF            PRINCIPAL         PERCENT OF
                             MORTGAGE          BALANCE           MORTGAGE
    MORTGAGE RATES(%)          LOANS         OUTSTANDING          LOANS
--------------------------------------------------------------------------
<S>                         <C>          <C>                   <C>
 8.001 -  8.500 .........          2     $     46,737.28            0.04%
 8.501 -  9.000 .........         91        3,051,997.03            2.93
 9.001 -  9.500 .........        120        3,699,890.78            3.56
 9.501 - 10.000 .........        363       12,218,877.96           11.74
10.001 - 10.500 .........        431       14,795,825.11           14.22
10.501 - 11.000 .........        535       18,195,875.38           17.49
11.001 - 11.500 .........        425       14,512,448.59           13.95
11.501 - 12.000 .........        407       13,208,067.08           12.69
12.001 - 12.500 .........        301        9,146,140.48            8.79
12.501 - 13.000 .........        284        8,620,733.84            8.29
13.001 - 13.500 .........         10          225,800.35            0.22
13.501 - 14.000 .........        150        4,074,426.63            3.92
14.001 - 14.500 .........         47        1,173,283.83            1.13
14.501 - 15.000 .........         32          915,707.71            0.88
15.001 - 15.500 .........          5           80,105.29            0.08
15.501 - 16.000 .........          4           82,089.33            0.08
                                 ---     ----------------         ------
  Total: ................      3,207     $104,048,006.67          100.00%
                               =====     ================         ======
</TABLE>

----------------------
(1)   As of the cut-off date, the weighted average current Group I mortgage
      rate of the mortgage loans is expected to be approximately 11.229% per
      annum.


<TABLE>
<CAPTION>
                            OCCUPANCY TYPES(1)
---------------------------------------------------------------------------
                                NUMBER          AGGREGATE        PERCENT OF
                                  OF            PRINCIPAL         GROUP I
                               MORTGAGE          BALANCE          MORTGAGE
      OCCUPANCY TYPES            LOANS         OUTSTANDING         LOANS
---------------------------------------------------------------------------
<S>                           <C>          <C>                  <C>
Investment / Non-Owner.....        253     $  6,734,509.05           6.47%
Primary ...................      2,928       96,675,310.25          92.91
Second Home ...............         26          638,187.37           0.61
                                 -----     ----------------        ------
  Total: ..................      3,207     $104,048,006.67         100.00%
                                 =====     ================        ======
</TABLE>

----------------------
(1)   Based on representations of the related mortgagors at the time of
      origination.


<TABLE>
<CAPTION>
             ORIGINAL TERMS OF THE MORTGAGE LOANS(1)
------------------------------------------------------------------
                       NUMBER          AGGREGATE        PERCENT OF
                         OF            PRINCIPAL         GROUP I
   LOAN TERM (IN      MORTGAGE          BALANCE          MORTGAGE
      MONTHS)           LOANS         OUTSTANDING         LOANS
------------------------------------------------------------------
<S>                  <C>          <C>                  <C>
60 ...............          7     $    151,672.72           0.15%
72 ...............          1           33,937.74           0.03
84 ...............          3           72,356.28           0.07
120 ..............         45        1,288,155.57           1.24
144 ..............          2           74,961.52           0.07
180 ..............      3,148      102,402,074.81          98.42
240 ..............          1           24,848.03           0.02
                        -----     ----------------        ------
  Total: .........      3,207     $104,048,006.67         100.00%
                        =====     ================        ======
</TABLE>

----------------------
(1)   As of the cut-off date, the weighted average remaining term to maturity
      of the Group I mortgage loans is expected to be approximately 176 months.


<TABLE>
<CAPTION>
               STATE DISTRIBUTIONS OF MORTGAGED PROPERTIES(1)
-----------------------------------------------------------------------------
                                   NUMBER         AGGREGATE        PERCENT OF
                                     OF           PRINCIPAL         GROUP I
                                  MORTGAGE         BALANCE          MORTGAGE
             STATE                  LOANS        OUTSTANDING         LOANS
-----------------------------------------------------------------------------
<S>                              <C>          <C>                 <C>
Alabama ......................          1     $   11,031.66           0.01%
Alaska .......................          2         54,235.02           0.05
Arizona ......................         47      1,378,471.31           1.32
Arkansas .....................          3        138,596.63           0.13
California ...................      1,457     51,375,650.13          49.38
Colorado .....................         95      3,222,013.21           3.10
Connecticut ..................         22        700,097.01           0.67
Delaware .....................          6        211,070.78           0.20
District of Columbia .........          4        161,449.47           0.16
Florida ......................        146      3,599,877.24           3.46
Georgia ......................         61      1,580,912.48           1.52
Hawaii .......................          4        158,361.98           0.15
Idaho ........................         28        798,986.08           0.77
Illinois .....................         42      1,554,299.63           1.49
Indiana ......................         13        398,483.75           0.38
Iowa .........................         18        595,167.33           0.57
Kansas .......................         32      1,045,671.96           1.00
Kentucky .....................          6        220,121.49           0.21
Louisiana ....................          2         65,512.59           0.06
Maine ........................          6        204,448.37           0.20
Maryland .....................         66      1,811,279.18           1.74
Massachusetts ................         84      2,850,080.69           2.74
Michigan .....................         20        576,375.38           0.55
Minnesota ....................         15        500,120.45           0.48
Mississippi ..................          2         43,708.68           0.04
Missouri .....................         39        964,144.47           0.93
Montana ......................         16        522,820.34           0.50
Nebraska .....................         10        365,090.10           0.35
Nevada .......................         52      1,234,678.08           1.19
New Hampshire ................         13        346,508.82           0.33
New Jersey ...................         31      1,200,441.12           1.15
New Mexico ...................         25        700,873.54           0.67
New York .....................         76      3,119,446.15           3.00
North Carolina ...............         35      1,016,523.46           0.98
Ohio .........................         26        680,195.29           0.65
Oklahoma .....................          5        111,995.26           0.11
Oregon .......................        155      4,670,052.01           4.49
</TABLE>

                                      S-19
<PAGE>


<TABLE>
<CAPTION>
             STATE DISTRIBUTIONS OF MORTGAGED PROPERTIES(1)
------------------------------------------------------------------------
                             NUMBER          AGGREGATE        PERCENT OF
                               OF            PRINCIPAL         GROUP I
                            MORTGAGE          BALANCE          MORTGAGE
          STATE               LOANS         OUTSTANDING         LOANS
------------------------------------------------------------------------
<S>                        <C>          <C>                  <C>
Pennsylvania ...........         61     $  1,664,291.87           1.60%
Puerto Rico ............         13          295,267.84           0.28
Rhode Island ...........          8          254,331.04           0.24
South Carolina .........         12          335,054.47           0.32
South Dakota ...........          2           56,976.88           0.05
Tennessee ..............          8          160,693.64           0.15
Texas ..................         17          380,096.62           0.37
Utah ...................         87        2,365,869.43           2.27
Vermont ................          1           32,952.26           0.03
Virginia ...............         82        2,236,706.58           2.15
Washington .............        237        7,655,799.30           7.36
West Virginia ..........          4           63,825.01           0.06
Wisconsin ..............          5          206,019.02           0.20
Wyoming ................          5          151,331.57           0.15
                                ---     ----------------        ------
  Total: ...............      3,207     $104,048,006.67         100.00%
                              =====     ================        ======
</TABLE>

(1)   No more than approximately 0.61% of the Group I mortgage loans will be
      secured by mortgaged properties located in any one postal zip code area


<TABLE>
<CAPTION>
                       PURPOSE OF MORTGAGE LOANS
-----------------------------------------------------------------------
                           NUMBER          AGGREGATE         PERCENT OF
                             OF            PRINCIPAL          GROUP I
                          MORTGAGE          BALANCE           MORTGAGE
     LOAN PURPOSE           LOANS         OUTSTANDING          LOANS
-----------------------------------------------------------------------
<S>                      <C>          <C>                   <C>
Other ................          8     $    170,841.24            0.16%
Purchase .............        984       22,874,500.24           21.98
REFI Cashout .........      2,134       78,716,077.49           75.65
REFI R/T .............         81        2,286,587.70            2.20
                            -----     ----------------         ------
  Total: .............      3,207     $104,048,006.67          100.00%
                            =====     ================         ======
</TABLE>


<TABLE>
<CAPTION>
                DOCUMENTATION PROGRAMS FOR MORTGAGE LOANS
-------------------------------------------------------------------------
                             NUMBER          AGGREGATE         PERCENT OF
                               OF            PRINCIPAL          GROUP I
                            MORTGAGE          BALANCE           MORTGAGE
     TYPE OF PROGRAM          LOANS         OUTSTANDING          LOANS
-------------------------------------------------------------------------
<S>                        <C>          <C>                   <C>
Full ...................      1,815     $ 60,616,548.81           58.26%
No Ratio ...............         77        3,087,262.71            2.97
Alternative ............        168        4,887,438.05            4.70
No Docs (NINA) .........         94        2,319,378.24            2.23
Reduced ................      1,053       33,137,378.86           31.85
                              -----     ----------------         ------
Total: .................      3,207     $104,048,006.67          100.00%
                              =====     ================         ======
</TABLE>


<TABLE>
<CAPTION>
                          TYPES OF MORTGAGED PROPERTIES
------------------------------------------------------------------------------
                                      NUMBER          AGGREGATE     PERCENT OF
                                        OF            PRINCIPAL      GROUP I
                                     MORTGAGE          BALANCE       MORTGAGE
          PROPERTY TYPE                LOANS         OUTSTANDING      LOANS
------------------------------------------------------------------------------
<S>                                 <C>          <C>               <C>
2-4 Family ......................        149        4,564,649.48        4.39%
Condo ...........................        273        7,763,055.05        7.46
Mfg.Housing .....................          4           80,948.80        0.08
PUD .............................        393       12,609,230.64       12.12
Single Family Residence .........      2,386       79,006,167.60       75.93
Townhouse/Rowhouse ..............          2           23,955.10        0.02
                                       -----     ----------------     ------
Total: ..........................      3,207     $104,048,006.67      100.00%
                                       =====     ================     ======
</TABLE>


                                      S-20
<PAGE>

     The Group II mortgage loans are expected to have the following
characteristics as of the cut-off date. Except for rates of interest,
percentages, which are approximate, are stated by principal balance of the
mortgage loans in each group as of the cut-off date and have been rounded in
order to total 100%.

                            GROUP II MORTGAGE LOANS

<TABLE>
<CAPTION>
                ORIGINAL COMBINED LOAN-TO-VALUE RATIOS(1)
-------------------------------------------------------------------------
                              NUMBER          AGGREGATE        PERCENT OF
    ORIGINAL COMBINED           OF            PRINCIPAL         GROUP II
      LOAN-TO-VALUE          MORTGAGE          BALANCE          MORTGAGE
        RATIOS(%)              LOANS         OUTSTANDING         LOANS
-------------------------------------------------------------------------
<S>                         <C>          <C>                  <C>
20.001 - 30.000 .........         2      $   399,553.78            0.62%
30.001 - 40.000 .........         2          296,675.07            0.46
40.001 - 50.000 .........         8        1,275,730.02            1.98
50.001 - 60.000 .........        21        2,144,957.01            3.33
60.001 - 70.000 .........        56        7,123,513.25           11.06
70.001 - 80.000 .........       173       19,056,630.67           29.60
80.001 - 90.000 .........       338       19,787,526.71           30.73
90.001 - 100.00 .........       315       14,299,530.51           22.21
                                ---      ---------------         ------
    Total: ..............       915      $64,384,117.02          100.00%
                                ===      ===============         ======
</TABLE>

----------------------
(1)   The weighted average original CLTV ratio of the Group II mortgage loans
      is expected to be approximately 81.51%.


<TABLE>
<CAPTION>
                   CURRENT MORTGAGE LOAN PRINCIPAL BALANCE(1)
------------------------------------------------------------------------------
                                      NUMBER          AGGREGATE     PERCENT OF
         CURRENT MORTGAGE               OF            PRINCIPAL      GROUP II
          LOAN PRINCIPAL             MORTGAGE          BALANCE       MORTGAGE
           BALANCES($)                 LOANS         OUTSTANDING      LOANS
------------------------------------------------------------------------------
<S>                                 <C>          <C>               <C>
      0.01 -  10,000.00 .........        21      $   202,506.29         0.31%
 10,000.01 -  20,000.00 .........       102        1,503,924.62         2.34
 20,000.01 -  30,000.00 .........       118        2,970,025.57         4.61
 30,000.01 -  40,000.00 .........        81        2,890,583.30         4.49
 40,000.01 -  50,000.00 .........        58        2,645,781.16         4.11
 50,000.01 -  60,000.00 .........        90        5,052,541.48         7.85
 60,000.01 -  70,000.00 .........        87        5,705,220.87         8.86
 70,000.01 -  80,000.00 .........        77        5,844,342.35         9.08
 80,000.01 -  90,000.00 .........        41        3,505,314.36         5.44
 90,000.01 - 100,000.00 .........       107       10,467,390.62        16.26
100,000.01 - 110,000.00 .........        13        1,381,044.21         2.15
110,000.01 - 120,000.00 .........        18        2,104,455.53         3.27
120,000.01 - 130,000.00 .........        12        1,510,953.93         2.35
130,000.01 - 140,000.00 .........        10        1,346,456.50         2.09
140,000.01 - 150,000.00 .........        14        2,044,902.82         3.18
150,000.01 - 160,000.00 .........         6          929,414.83         1.44
160,000.01 - 170,000.00 .........         6          992,019.62         1.54
170,000.01 - 180,000.00 .........         5          871,208.70         1.35
180,000.01 - 190,000.00 .........         8        1,481,253.34         2.30
190,000.01 - 200,000.00 .........        16        3,175,121.63         4.93
200,000.01 - 210,000.00 .........         1          209,514.84         0.33
210,000.01 - 220,000.00 .........         2          435,065.00         0.68
220,000.01 - 230,000.00 .........         2          454,622.20         0.71
240,000.01 - 250,000.00 .........         5        1,237,670.81         1.92
270,000.01 - 280,000.00 .........         1          277,531.31         0.43
290,000.01 - 300,000.00 .........         2          599,342.91         0.93
300,000.01 - 310,000.00 .........         1          307,066.42         0.48
310,000.01 - 320,000.00 .........         1          312,189.10         0.48
330,000.01 - 340,000.00 .........         1          339,521.50         0.53
340,000.01 - 350,000.00 .........         4        1,397,561.59         2.17
370,000.01 - 380,000.00 .........         1          374,319.03         0.58
390,000.01 - 400,000.00 .........         2          790,780.46         1.23
490,000.01 - 500,000.00 .........         1          493,411.22         0.77
530,000.01 - 540,000.00 .........         1          531,058.90         0.82
                                        ---      ---------------      ------
    Total: ......................       915      $64,384,117.02       100.00%
                                        ===      ===============      ======
</TABLE>

----------------------
(1)   As of the cut-off date, the average current Group II mortgage loan
      principal balance is expected to be approximately $70,365.


<TABLE>
<CAPTION>
                            MORTGAGE RATES(1)
-------------------------------------------------------------------------
                              NUMBER          AGGREGATE        PERCENT OF
                                OF            PRINCIPAL         GROUP II
                             MORTGAGE          BALANCE          MORTGAGE
    MORTGAGE RATES(%)          LOANS         OUTSTANDING         LOANS
-------------------------------------------------------------------------
<S>                         <C>          <C>                  <C>
 8.501 -  9.000 .........        35      $ 2,870,878.46            4.46%
 9.001 -  9.500 .........        31        2,529,596.91            3.93
 9.501 - 10.000 .........        16        1,488,128.63            2.31
10.001 - 10.500 .........        88        9,564,892.89           14.86
10.501 - 11.000 .........       135       14,727,438.66           22.87
11.001 - 11.500 .........       127       12,110,732.01           18.81
11.501 - 12.000 .........        71        4,845,096.18            7.53
12.001 - 12.500 .........        38        3,320,289.48            5.16
12.501 - 13.000 .........        19        1,674,761.90            2.60
13.001 - 13.500 .........       256        7,663,071.57           11.90
13.501 - 14.000 .........        95        3,139,668.34            4.88
14.001 - 14.500 .........         4          449,561.99            0.70
                                ---      ---------------         ------
    Total: ..............       915      $64,384,117.02          100.00%
                                ===      ===============         ======
</TABLE>

----------------------
(1)   As of the cut-off date, the weighted average credit current Group II
      mortgage rate of the mortgage loans is expected to be approximately
      11.348% per annum.


<TABLE>
<CAPTION>
                              OCCUPANCY TYPES(1)
-------------------------------------------------------------------------------
                                    NUMBER          AGGREGATE        PERCENT OF
                                      OF            PRINCIPAL         GROUP II
                                   MORTGAGE          BALANCE          MORTGAGE
        OCCUPANCY TYPES              LOANS         OUTSTANDING         LOANS
-------------------------------------------------------------------------------
<S>                               <C>          <C>                  <C>
Investment/ Non-Owner .........       109      $ 4,287,596.88            6.66%
Primary .......................       795       59,600,066.30           92.57
Second Home ...................        11          496,453.84            0.77
                                      ---      ---------------         ------
    Total: ....................       915      $64,384,117.02          100.00%
                                      ===      ===============         ======
</TABLE>

----------------------
(1)   Based on representations of the related mortgagors at the time of
      origination.



<TABLE>
<CAPTION>
               ORIGINAL TERMS OF THE MORTGAGE LOANS(1)
---------------------------------------------------------------------
                            NUMBER         AGGREGATE       PERCENT OF
                              OF           PRINCIPAL        GROUP II
                           MORTGAGE         BALANCE         MORTGAGE
 LOAN TERM (IN MONTHS)       LOANS        OUTSTANDING        LOANS
---------------------------------------------------------------------
<S>                       <C>          <C>                <C>
120 ...................         4      $   187,915.20           0.29%
180 ...................       911       64,196,201.82          99.71
                              ---      --------------         ------
    Total: ............       915      $64,384,117.02         100.00%
                              ===      ==============         ======
</TABLE>

----------------------
(1)   As of the cut-off date, the weighted average remaining term to maturity
      of the Group II mortgage loans is expected to be approximately 177
      months.

                                      S-21
<PAGE>


<TABLE>
<CAPTION>
               STATE DISTRIBUTIONS OF MORTGAGED PROPERTIES(1)
-----------------------------------------------------------------------------
                                   NUMBER         AGGREGATE        PERCENT OF
                                     OF           PRINCIPAL         GROUP II
                                  MORTGAGE         BALANCE          MORTGAGE
             STATE                  LOANS        OUTSTANDING         LOANS
-----------------------------------------------------------------------------
<S>                              <C>          <C>                 <C>
Alabama ......................         1      $    62,986.48           0.10%
Alaska .......................         1           12,291.69           0.02
Arizona ......................         5          134,377.24           0.21
California ...................       645       53,983,329.20          83.85
Colorado .....................        14          528,362.50           0.82
Connecticut ..................         2           65,191.16           0.10
District of Columbia .........         2           76,463.59           0.12
Florida ......................        26          717,020.84           1.11
Georgia ......................        15          482,343.84           0.75
Idaho ........................         5          151,947.53           0.24
Illinois .....................         2           35,642.70           0.06
Indiana ......................         1           31,037.88           0.05
Kansas .......................         2           44,401.48           0.07
Kentucky .....................         1           15,093.42           0.02
Maryland .....................        12          383,680.36           0.60
Massachusetts ................        20        1,117,052.05           1.73
Missouri .....................         1           49,916.86           0.08
Montana ......................         2           34,243.71           0.05
Nebraska .....................         1           58,472.23           0.09
Nevada .......................        11          343,945.01           0.53
New Hampshire ................         1           13,857.03           0.02
New Jersey ...................         7          208,119.70           0.32
New Mexico ...................         1           51,658.26           0.08
New York .....................         6          270,464.81           0.42
North Carolina ...............         3          183,848.00           0.29
Oregon .......................        36        1,394,794.66           2.17
Pennsylvania .................         6          214,958.56           0.33
South Carolina ...............         2          160,520.33           0.25
Utah .........................        15          820,605.92           1.27
Virginia .....................        17          471,442.61           0.73
Washington ...................        51        2,216,412.76           3.44
West Virginia ................         1           49,634.61           0.08
                                     ---      ---------------        ------
    Total: ...................       915      $64,384,117.02         100.00%
                                     ===      ===============        ======
</TABLE>

----------------------
(1)   No more than approximately 1.61% of the Group II mortgage loans
      will be secured by mortgaged properties located in any one postal
      zip code area.
<TABLE>
<CAPTION>
                       PURPOSE OF MORTGAGE LOANS
-----------------------------------------------------------------------
                           NUMBER          AGGREGATE         PERCENT OF
                             OF            PRINCIPAL          GROUP II
                          MORTGAGE          BALANCE           MORTGAGE
     LOAN PURPOSE           LOANS         OUTSTANDING          LOANS
-----------------------------------------------------------------------
<S>                      <C>          <C>                   <C>
Purchase .............       327      $14,374,836.49            22.33%
REFI Cashout .........       562       48,697,306.96            75.64
REFI R/T .............        26        1,311,973.57             2.04
                             ---      ---------------          ------
    Total: ...........       915      $64,384,117.02           100.00%
                             ===      ===============          ======
</TABLE>


<TABLE>
<CAPTION>
                DOCUMENTATION PROGRAMS FOR MORTGAGE LOANS
-------------------------------------------------------------------------
                             NUMBER          AGGREGATE         PERCENT OF
                               OF            PRINCIPAL          GROUP II
                            MORTGAGE          BALANCE           MORTGAGE
     TYPE OF PROGRAM          LOANS         OUTSTANDING          LOANS
-------------------------------------------------------------------------
<S>                        <C>          <C>                   <C>
Full ...................       391      $29,474,629.59            45.78%
No Ratio ...............        29        1,898,651.18             2.95
Alternative ............         4           86,396.38             0.13
No Docs (Nina) .........        25        1,061,380.88             1.65
Reduced ................       466       31,863,058.99            49.49
                               ---      ---------------          ------
    Total: .............       915      $64,384,117.02           100.00%
                               ===      ===============          ======
</TABLE>








<TABLE>
<CAPTION>
                          TYPES OF MORTGAGED PROPERTIES
------------------------------------------------------------------------------
                                      NUMBER          AGGREGATE     PERCENT OF
                                        OF            PRINCIPAL      GROUP II
                                     MORTGAGE          BALANCE       MORTGAGE
          PROPERTY TYPE                LOANS         OUTSTANDING      LOANS
------------------------------------------------------------------------------
<S>                                 <C>          <C>               <C>
2-4 Family ......................        68      $ 3,857,488.44         5.99%
Condo ...........................        63        3,241,894.94         5.04
PUD .............................       157       12,177,664.77        18.91
Single Family Residence .........       627       45,107,068.87        70.06
                                        ---      ---------------      ------
    Total: ......................       915      $64,384,117.02       100.00%
                                        ===      ===============      ======
</TABLE>

                                      S-22
<PAGE>

     The Group III mortgage loans are expected to have the following
characteristics as of the cut-off date. Except for rates of interest,
percentages, which are approximate, are stated by principal balance of the
mortgage loans in each group as of the cut-off date and have been rounded in
order to total 100%.


                           GROUP III MORTGAGE LOANS

<TABLE>
<CAPTION>
                 ORIGINAL COMBINED LOAN-TO-VALUE RATIOS(1)
---------------------------------------------------------------------------
                                                AGGREGATE        PERCENT OF
     ORIGINAL COMBINED        NUMBER OF         PRINCIPAL        GROUP III
       LOAN-TO-VALUE           MORTGAGE          BALANCE          MORTGAGE
         RATIOS(%)              LOANS          OUTSTANDING         LOANS
---------------------------------------------------------------------------
<S>                          <C>           <C>                  <C>
40.001 -  50.000 .........         1       $   249,867.74            0.58%
50.001 -  60.000 .........         6           862,183.39            1.99
60.001 -  70.000 .........        11         1,159,623.28            2.68
70.001 -  80.000 .........        37         2,923,105.98            6.76
80.001 -  90.000 .........       360        20,754,648.57           47.97
90.001 - 100.000 .........       278        17,316,670.93           40.02
                                 ---       ---------------         ------
    Total: ...............       693       $43,266,099.89          100.00%
                                 ===       ===============         ======
</TABLE>

----------------------
(1)   The weighted average original CLTV ratio of the Group III mortgage loans
      is expected to be approximately 89.22%.

<TABLE>
<CAPTION>
                    CURRENT MORTGAGE LOAN PRINCIPAL BALANCE(1)
-------------------------------------------------------------------------------
                                                       AGGREGATE     PERCENT OF
         CURRENT MORTGAGE            NUMBER OF         PRINCIPAL     GROUP III
          LOAN PRINCIPAL              MORTGAGE          BALANCE       MORTGAGE
           BALANCES($)                 LOANS          OUTSTANDING      LOANS
-------------------------------------------------------------------------------
<S>                                 <C>           <C>               <C>
      0.01 -  10,000.00 .........         4       $    38,109.02         0.09%
 10,000.01 -  20,000.00 .........        43           674,047.30         1.56
 20,000.01 -  30,000.00 .........        77         1,986,601.51         4.59
 30,000.01 -  40,000.00 .........       116         4,073,490.36         9.41
 40,000.01 -  50,000.00 .........       123         5,706,536.24        13.19
 50,000.01 -  60,000.00 .........        65         3,651,200.06         8.44
 60,000.01 -  70,000.00 .........        57         3,742,170.87         8.65
 70,000.01 -  80,000.00 .........        49         3,695,034.60         8.54
 80,000.01 -  90,000.00 .........        30         2,573,094.49         5.95
 90,000.01 - 100,000.00 .........        44         4,295,882.78         9.93
100,000.01 - 110,000.00 .........        14         1,473,674.28         3.41
110,000.01 - 120,000.00 .........        10         1,148,408.87         2.65
120,000.01 - 130,000.00 .........        12         1,509,325.89         3.49
130,000.01 - 140,000.00 .........        12         1,626,795.61         3.76
140,000.01 - 150,000.00 .........         9         1,322,843.66         3.06
150,000.01 - 160,000.00 .........         1           154,726.70         0.36
160,000.01 - 170,000.00 .........         3           497,550.70         1.15
170,000.01 - 180,000.00 .........         5           872,992.41         2.02
180,000.01 - 190,000.00 .........         3           567,420.40         1.31
190,000.01 - 200,000.00 .........         6         1,189,850.24         2.75
200,000.01 - 210,000.00 .........         1           200,099.84         0.46
210,000.01 - 220,000.00 .........         1           212,531.49         0.49
220,000.01 - 230,000.00 .........         2           455,403.01         1.05
240,000.01 - 250,000.00 .........         3           744,502.24         1.72
270,000.01 - 280,000.00 .........         1           273,510.44         0.63
280,000.01 - 290,000.00 .........         1           285,765.39         0.66
290,000.01 - 300,000.00 .........         1           294,531.49         0.68
                                        ---       ---------------      ------
    Total: ......................       693       $43,266,099.89       100.00%
                                        ===       ===============      ======
</TABLE>

----------------------
(1)   As of the cut-off date, the average current Group III mortgage loan
      principal balance is expected to be approximately $62,433.


<TABLE>
<CAPTION>
                            MORTGAGE RATES(1)
--------------------------------------------------------------------------
                                               AGGREGATE        PERCENT OF
                             NUMBER OF         PRINCIPAL        GROUP III
                              MORTGAGE          BALANCE          MORTGAGE
    MORTGAGE RATES(%)          LOANS          OUTSTANDING         LOANS
--------------------------------------------------------------------------
<S>                         <C>           <C>                  <C>
11.001 - 11.500 .........        53       $ 3,940,129.34            9.11%
11.501 - 12.000 .........       191        13,035,756.79           30.13
12.001 - 12.500 .........       159        10,097,937.33           23.34
12.501 - 13.000 .........       125         7,309,320.89           16.89
13.001 - 13.500 .........        71         3,707,692.00            8.57
13.501 - 14.000 .........        58         3,300,199.60            7.63
14.001 - 14.500 .........        18         1,137,193.06            2.63
14.501 - 15.000 .........        15           677,136.86            1.57
15.001 - 15.500 .........         1            12,189.33            0.03
15.501 - 16.000 .........         2            48,544.69            0.11
                                ---       ---------------         ------
    Total: ..............       693       $43,266,099.89          100.00%
                                ===       ===============         ======
</TABLE>

----------------------
(1)   As of the cut-off date, the weighted average current Group III mortgage
      rate of the mortgage loans is expected to be approximately 12.457% per
      annum.


<TABLE>
<CAPTION>
                              OCCUPANCY TYPES(1)
-------------------------------------------------------------------------------
                                                    AGGREGATE        PERCENT OF
                                  NUMBER OF         PRINCIPAL        GROUP III
                                   MORTGAGE          BALANCE          MORTGAGE
        OCCUPANCY TYPES             LOANS          OUTSTANDING         LOANS
-------------------------------------------------------------------------------
<S>                              <C>           <C>                  <C>
Investment/Non-Owner .........        70       $ 3,321,651.44            7.68%
Primary ......................       610        39,442,020.08           91.16
Second Home ..................        13           502,428.37            1.16
                                     ---       ---------------         ------
    Total: ...................       693       $43,266,099.89          100.00%
                                     ===       ===============         ======
</TABLE>

----------------------
(1)   Based on representations of the related mortgagors at the time of
      origination.


<TABLE>
<CAPTION>
              ORIGINAL TERMS OF THE MORTGAGE LOANS(1)
--------------------------------------------------------------------
                                         AGGREGATE        PERCENT OF
                        NUMBER OF        PRINCIPAL        GROUP III
      LOAN TERM          MORTGAGE         BALANCE          MORTGAGE
     (IN MONTHS)          LOANS         OUTSTANDING         LOANS
--------------------------------------------------------------------
<S>                    <C>           <C>                 <C>
120 ................         1       $    16,282.19           0.04%
180 ................       692        43,249,817.70          99.96
                           ---       ---------------        ------
    Total: .........       693       $43,266,099.89         100.00%
                           ===       ===============        ======
</TABLE>

----------------------
(1)   As of the cut-off date, the weighted average remaining term to maturity
      of the Group III mortgage loans is expected to be approximately 176
      months.


                                      S-23
<PAGE>


<TABLE>
<CAPTION>
                STATE DISTRIBUTIONS OF MORTGAGED PROPERTIES(1)
-------------------------------------------------------------------------------
                                                    AGGREGATE        PERCENT OF
                                  NUMBER OF         PRINCIPAL        GROUP III
                                   MORTGAGE          BALANCE          MORTGAGE
             STATE                  LOANS          OUTSTANDING         LOANS
-------------------------------------------------------------------------------
<S>                              <C>           <C>                  <C>
Arizona ......................        17       $   766,853.35            1.77%
Arkansas .....................         1            61,741.57            0.14
California ...................       444        30,956,369.85           71.55
Colorado .....................        11           691,914.11            1.60
Connecticut ..................         4           339,029.57            0.78
District of Columbia .........         2           104,782.48            0.24
Florida ......................        33           968,986.08            2.24
Georgia ......................        18           753,018.57            1.74
Hawaii .......................         1            24,868.94            0.06
Idaho ........................         5           249,678.36            0.58
Illinois .....................         7           355,981.80            0.82
Indiana ......................         1            19,873.27            0.05
Maryland .....................         3           107,204.05            0.25
Massachusetts ................        19           937,115.88            2.17
Michigan .....................        14           365,120.70            0.84
Minnesota ....................         2            37,827.78            0.09
Montana ......................         4           268,470.18            0.62
Nevada .......................         7           307,876.56            0.71
New Hampshire ................         1           133,451.90            0.31
New Jersey ...................         3           199,721.61            0.46
New Mexico ...................         1            12,717.05            0.03
New York .....................        10           863,362.94            2.00
North Carolina ...............         3           126,979.27            0.29
Oregon .......................        19         1,063,149.64            2.46
Pennsylvania .................         3           129,814.81            0.30
Texas ........................         2           125,216.99            0.29
Utah .........................        11           430,820.21            1.00
Virginia .....................        16         1,022,375.89            2.36
Washington ...................        31         1,841,776.48            4.26
                                     ---       ---------------         ------
    Total: ...................       693       $43,266,099.89          100.00%
                                     ===       ===============         ======
</TABLE>

----------------------
(1)   No more than approximately 1.17% of the Group III mortgage loans will be
      secured by mortgaged properties located in any one postal zip code area.

<TABLE>
<CAPTION>
                       PURPOSE OF MORTGAGE LOANS
------------------------------------------------------------------------
                                            AGGREGATE         PERCENT OF
                          NUMBER OF         PRINCIPAL         GROUP III
                           MORTGAGE          BALANCE           MORTGAGE
     LOAN PURPOSE           LOANS          OUTSTANDING          LOANS
------------------------------------------------------------------------
<S>                      <C>           <C>                   <C>
Purchase .............       306       $15,724,494.49            36.34%
REFI Cashout .........       364        26,705,103.07            61.72
REFI R/T .............        23           836,502.33             1.93
                             ---       ---------------          ------
    Total: ...........       693       $43,266,099.89           100.00%
                             ===       ===============          ======
</TABLE>


<TABLE>
<CAPTION>
                DOCUMENTATION PROGRAMS FOR MORTGAGE LOANS
--------------------------------------------------------------------------
                                              AGGREGATE         PERCENT OF
                            NUMBER OF         PRINCIPAL         GROUP III
                             MORTGAGE          BALANCE           MORTGAGE
     TYPE OF PROGRAM          LOANS          OUTSTANDING          LOANS
------------------------   -----------   -------------------   -----------
<S>                        <C>           <C>                   <C>
Full ...................       276       $16,280,163.70            37.63%
No Ratio ...............        23         1,770,164.15             4.09
No Docs (Nina) .........        45         1,606,220.38             3.71
Reduced ................       349        23,609,551.66            54.57
                               ---       ---------------          ------
    Total: .............       693       $43,266,099.89           100.00%
                               ===       ===============          ======
</TABLE>


<TABLE>
<CAPTION>
                        TYPES OF MORTGAGED PROPERTIES
------------------------------------------------------------------------------
                                                   AGGREGATE        PERCENT OF
                                 NUMBER OF         PRINCIPAL        GROUP III
                                  MORTGAGE          BALANCE          MORTGAGE
        PROPERTY TYPES             LOANS          OUTSTANDING         LOANS
------------------------------------------------------------------------------
<S>                             <C>           <C>                  <C>
2-4 Family ..................        68       $ 4,084,796.34            9.44%
Condo .......................        34         1,797,268.68            4.15
PUD .........................       129         8,575,329.81           19.82
Single Family Residence .....       462        28,808,705.06           66.58
                                    ---       ---------------         ------
    Total: ..................       693       $43,266,099.89        100.00%
                                    ===       ===============         ======
</TABLE>

                                      S-24
<PAGE>

UNDERWRITING STANDARDS

     The mortgage loans have been purchased by the seller from various banks,
savings and loan associations, mortgage bankers (which may or may not be
affiliated with the seller) and other mortgage loan originators, and were
originated generally in accordance with the underwriting criteria described
herein.

     All of the mortgage loans are "conventional non-conforming mortgage loans"
(i.e., loans which are not insured by the FHA or partially guaranteed by the VA
or which do not qualify for sale to FNMA or FHLMC).

     The underwriting standards applicable to the mortgage loans typically
differ from, and may be generally less stringent than, the underwriting
standards established by FNMA or FHLMC primarily with respect to original
principal balances, loan-to-value ratios, borrower income, required
documentation, interest rates, borrower occupancy of the mortgaged property
and/or property types. To the extent the programs reflect underwriting standards
different from those of FNMA and FHLMC, the performance of the mortgage loans
thereunder may reflect higher delinquency rates and/or credit losses. In
addition, certain exceptions to the underwriting standards described herein are
made in the event that compensating factors are demonstrated by a prospective
borrower. Neither the depositor nor any affiliate has re-underwritten any
mortgage loan. In addition, neither the seller nor any of its affiliates has
re-underwritten any loan.

     Generally, each mortgagor will have been required to complete an
application designed to provide to the original lender pertinent credit
information concerning the mortgagor. As part of the description of the
mortgagor's financial condition, the mortgagor will have furnished information
with respect to its assets, liabilities, income (except as described below),
credit history, employment history and personal information, and furnished an
authorization to apply for a credit report which summarizes the mortgagor's
credit history with local merchants and lenders and any record of bankruptcy.
The mortgagor may also have been required to authorize verifications of
deposits at financial institutions where the mortgagor had demand or savings
accounts. In the case of investment properties and two- to four-unit dwellings,
income derived from the mortgaged property may have been considered for
underwriting purposes, in addition to the income of the mortgagor from other
sources. With respect to mortgaged property consisting of vacation or second
homes, no income derived from the property generally will have been considered
for underwriting purposes. In the case of certain borrowers with acceptable
payment histories, no income will be required to be stated (or verified) in
connection with the loan application.

     Based on the data provided in the application and certain verification (if
required), a determination is made by the original lender that the mortgagor's
monthly income (if required to be stated) will be sufficient to enable the
mortgagor to meet its monthly obligations on the mortgage loan, debt service on
the related first lien and other expenses related to the property such as
property taxes, utility costs, standard hazard insurance and other fixed
obligations other than housing expenses. Generally, scheduled payments on a
mortgage loan during the first year of its term plus taxes and insurance and
all scheduled payments on obligations that extend beyond ten months equal no
more than a specified percentage of the prospective mortgagor's gross income.
The percentage applied varies on a case by case basis depending on a number of
underwriting criteria, including the CLTV of the mortgage loan. The originator
may also consider the amount of liquid assets available to the mortgagor after
origination.

     Certain of the mortgage loans have been originated under alternative
documentation, reduced documentation, no stated income, no documentation or no
ratio programs which require less documentation and verification than do
traditional full documentation programs. An alternative documentation program
has fewer documentation requirements than a full documentation program.
Generally, under a reduced documentation program, no verification of a
mortgagor's stated income is undertaken by the originator. Under a no stated
income program or a no ratio program, certain borrowers with acceptable payment
histories will not be required to provide any information regarding income and
no other investigation regarding the borrower's income will be undertaken.
Under a no documentation program, no verification of a mortgagor's income or
assets is undertaken by the originator. The underwriting for such mortgage
loans may be based primarily or entirely on an appraisal of the mortgaged
property and the CLTV at origination.


                                      S-25
<PAGE>

     The adequacy of the mortgaged property as security for repayment of the
related mortgage loan will generally have been determined by an appraisal in
accordance with pre-established appraisal procedure guidelines for appraisals
established by or acceptable to the originator. All appraisals conform to the
Uniform Standards of Professional Appraisal Practice adopted by the Appraisal
Standards Board of the Appraisal Foundation and must be on forms acceptable to
FNMA and/or FHLMC. Appraisers may be staff appraisers employed by the
originator or independent appraisers selected in accordance with
pre-established appraisal procedure guidelines established by the originator.
The appraisal procedure guidelines generally will have required the appraiser
or an agent on its behalf to personally inspect the property and to verify
whether the property was in good condition and that construction, if new, had
been substantially completed. The appraisal generally will have been based upon
a market data analysis of recent sales of comparable properties and, when
deemed applicable, an analysis based on income generated from the property or a
replacement cost analysis based on the current cost of constructing or
purchasing a similar property.

GREENPOINT UNDERWRITING STANDARDS

     A portion of the mortgage loans in the Trust Fund equaling 82.09% of the
mortgage loans by principal balance as of the cut-off date (the "Greenpoint
Loans"), will have been originated or purchased by the Greenpoint, either
directly or through affiliates, from mortgage loan brokers or originated by its
retail division. The Greenpoint Loans have been originated in accordance with
the following underwriting criteria.

     Underwriting standards are applied by or on behalf of a lender to evaluate
the borrower's credit standing and repayment ability, and the value and
adequacy of the mortgaged property as collateral. In general, a prospective
borrower applying for a mortgage loan is required to fill out a detailed
application designed to provide to the underwriting officer pertinent credit
information. As part of the description of the borrower's financial condition,
the borrower generally is required to provide a current list of assets and
liabilities and a statement of income and expenses, as well as an authorization
to acquire a credit report which summarizes the borrower's credit history with
local merchants and lenders and any record of bankruptcy or other public
records. In most cases, an employment verification is obtained from an
independent source (typically the borrower's employer) which verification
reports the length of employment with that organization, the current salary,
and whether it is expected that the borrower will continue such employment in
the future. If a prospective borrower is self-employed, the borrower may be
required to submit copies of signed tax returns. The borrower may also be
required to authorize verification of deposits at financial institutions where
the borrower has demand or savings accounts.

     In determining the adequacy of the mortgaged property as collateral, an
appraisal is made of each property considered for financing. The appraiser is
required to inspect the property and verify that it is in good condition and
that construction, if new, has been completed. With respect to single family
loans, the appraisal is based on the market value of comparable homes, the
estimated rental income (if considered applicable by the appraiser) and the
cost of replacing the home. With respect to a loan on a two- to four-unit
property, the appraisal must specify whether an income analysis, a market
analysis or a cost analysis, was used. An appraisal employing the income
approach to value analyzes a two- to four-unit project's cash flow, expenses,
capitalization and other operational information in determining the property's
value. The market approach to value focuses its analysis on the prices paid for
the purchase of similar properties in the two- to four-unit project's area,
with adjustments made for variations between these other properties and the
multifamily project being appraised. The cost approach calls for the appraiser
to make an estimate of land value and then determine the current cost of
reproducing the building less any accrued depreciation. In any case, the value
of the property being financed, as indicated by the appraisal, must be such
that it currently supports, and is anticipated to support in the future, the
outstanding loan balance. Appraisals in accordance with Greenpoint's
underwriting standards shall be made on a full or drive-by basis. Greenpoint
may order discretionary reviews at any time to ensure the value of the
properties.

     In the case of single family loans, once all applicable employment, credit
and property information is received, a determination generally is made as to
whether the prospective borrower has sufficient


                                      S-26
<PAGE>

monthly income available (a) to meet the borrower's monthly obligations on the
proposed mortgage loan (determined on the basis of the monthly payments due in
the year of origination) and other expenses related to the mortgaged property
(such as property taxes and hazard insurance) and (b) to meet monthly housing
expenses and other financial obligations and monthly living expenses. The
underwriting standards applied by Greenpoint may be varied in appropriate cases
where factors such as low loan-to-value ratios or other favorable credit exist.
However, maximum combined loan-to-value ratios and maximum loan amounts are
limited by credit score and total debt-to-income ratios.

     Greenpoint requires title insurance or coverage under a standard mortgage
lien guaranty agreement for lenders for all mortgage loans. Fire and extended
hazard insurance and flood insurance, when applicable, are also required.

     A lender may originate mortgage loans under a reduced documentation
program. These reduced documentation programs include an "EZ Documentation"
program, a "No Employment/Income Documentation" program and a "No Ratio
Documentation" program. A reduced documentation program is designed to
streamline the loan approval process and thereby improve the lender's
competitive position among other loan originators. Under a reduced
documentation program, relatively more emphasis is placed on credit score and
property underwritng than on certain credit underwriting documentation
concerning income and employment verification is waived.

ASSIGNMENT OF THE MORTGAGE LOANS

     Pursuant to the pooling and servicing agreement, the depositor on the
closing date will sell, transfer, assign, set over and otherwise convey without
recourse to the trustee in trust for the benefit of the certificateholders all
right, title and interest of the depositor in and to each mortgage loan and all
right, title and interest of the depositor in and to all other assets included
in the trust fund, including all principal and interest received on or with
respect to such mortgage loans, exclusive of principal and interest due on or
prior to the cut-off date.

     In connection with such transfer and assignment, the depositor will
deliver or cause to be delivered to the trustee, or a custodian for the
trustee, a mortgage file for each mortgage loan which will consist of, among
other things, the original promissory note, or mortgage note, and any
modification or amendment thereto endorsed in blank without recourse, except
that the depositor may deliver or cause to be delivered a lost note affidavit
in lieu of any original mortgage note that has been lost, the original
instrument creating a first lien on the related mortgaged property, or the
mortgage, with evidence of recording indicated thereon, an assignment in
recordable form of the mortgage, the title policy with respect to the related
mortgaged property and, if applicable, all recorded intervening assignments of
the mortgage and any riders or modifications to such mortgage note and mortgage
except for any such document not returned from the public recording office,
which will be delivered to the trustee as soon as the same is available to the
depositor. Assignments of the mortgage loans to the trustee or its nominee will
be recorded in the appropriate public office for real property records, except
in states where, in the opinion of counsel, such recording is not required to
protect the trustee's interest in the mortgage loan against the claim of any
subsequent transferee or any successor to or creditor of the depositor or the
seller.

     The trustee will review each mortgage file within 90 days of the closing
date or promptly after the trustee's receipt of any document permitted to be
delivered after the closing date and if any document in a mortgage file is
found to be missing or defective in a material respect and the seller or other
entity specified in the pooling and servicing agreement does not cure such
defect within 90 days of notice thereof from the trustee or within such longer
period not to exceed 720 days after the closing date in the case of missing
documents not returned from the public recording office, the seller will be
obligated to repurchase the related mortgage loan from the trust fund. Rather
than repurchase the mortgage loan as provided above, the seller may remove such
mortgage loan, a deleted mortgage loan, from the trust fund and substitute in
its place another mortgage loan, a replacement mortgage loan; however, such
substitution is permitted only within two years of the closing date and may not
be made unless an opinion of counsel is provided to the effect that such
substitution will not disqualify the REMIC or result in a prohibited
transaction tax under the Code. Any replacement mortgage loan generally will,
on the date of substitution, among other characteristics set forth in the
pooling and servicing agreement:


                                      S-27
<PAGE>

     o   have a principal balance, after deduction of all scheduled payments due
         in the month of substitution, not in excess of, and not more than 10%
         less than, the Stated Principal Balance of the deleted mortgage loan
         (the amount of any shortfall to be deposited by the related seller and
         held for distribution to the certificateholders),

     o   have a mortgage rate not lower than, and not more than 1% per annum
         higher than, that of the deleted mortgage loan,

     o   have a CLTV not higher than that of the deleted mortgage loan,

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

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

     This cure, repurchase or substitution obligation constitutes the sole
remedy available to certificateholders or the trustee for omission of, or a
material defect in, a mortgage loan document.

                                  THE SELLER

     The following information has been provided by DLJ Mortgage Capital, Inc.,
and none of the depositor the underwriter or the certificate insurer make any
representations or warranties as to the accuracy or completeness of such
information.

DLJ MORTGAGE CAPITAL, INC.

     DLJ Mortgage Capital, Inc. ("DLJ MORTGAGE CAPITAL"), a Delaware
corporation, is a subsidiary of the underwriter and an affiliate of the
depositor. The principal executive offices of DLJ Mortgage Capital are located
at 277 Park Avenue, New York, New York 10172.

                          SERVICING OF MORTGAGE LOANS

GENERAL

     As of the closing date Wilshire Credit Corporation will have entered into
a commitment to purchase the servicing rights from DLJ Mortgage Capital. The
purchase and transfer of servicing will occur after the closing date and is
intended to result in establishing Wilshire Credit Corporation as the sole
servicer under the pooling and servicing agreement.

     As of the closing date, Wilshire Credit Corporation will be designated as
the servicer pursuant to the pooling and servicing agreement. The mortgage
loans will be sub-serviced by various interim sub-servicers until the transfer
of servicing to the servicer is completed. With respect to 82.09% of the
mortgage loans by principal balance as of the cut-off date, GreenPoint Mortgage
Funding, Inc. will act as the interim subservicer.

     The servicer will be primarily responsible for servicing the mortgage
loans under the terms of the pooling and servicing agreement, employing that
degree of skill and care which it employs in servicing mortgage loans
comparable to those mortgage loans serviced by it for itself or others. None of
the interim sub-servicers will have any servicing obligations with respect to
the mortgage loans not serviced by it.

     The servicer will make reasonable efforts to collect or cause to be
collected all payments called for under the terms and provisions of the
mortgage loans serviced by it and, to the extent those procedures are
consistent with the pooling and servicing agreement, will follow collection
procedures as are followed for mortgage loans comparable to the mortgage loans
in the trust in the local areas where each mortgaged property is located. Under
the pooling and servicing agreement, the servicer will establish and maintain,
or cause to be established and maintained, one or more collection accounts,
into which deposits will be made on a daily basis of payments and collections
on the mortgage loans serviced by it, net of the related servicing compensation
and prepayment penalties payable to it. Funds credited to a collection account


                                      S-28
<PAGE>

may be invested for the benefit and at the risk of the servicer in permitted
investments, as described in the pooling and servicing agreement, that are
scheduled to mature on or prior to the business day preceding the next
distribution date. If permitted by the pooling and servicing agreement, a
collection account may be a commingled account with other similar accounts
maintained by the servicer.

     The pooling and servicing agreement prohibits the resignation of the
servicer, except upon (a) appointment of a successor servicer and receipt by
the trustee of a letter from each rating agency that such a resignation and
appointment will not result in a downgrading of the rating of any of the
certificates (determined without regard to the Certificate Insurance Policy),
or (b) a determination that its duties thereunder are no longer permitted under
applicable law. No such resignation will be effective until a successor
servicer has assumed such servicing obligations in the manner provided in the
pooling and servicing agreement.

     Under the pooling and servicing agreement, the servicer may contract with
subservicers to perform some or all of its servicing duties. Regardless of its
servicing arrangement, the servicer will remain liable for its servicing duties
and obligations under the pooling and servicing agreement as if the servicer
alone were servicing the mortgage loans.

                                 THE SERVICERS

WILSHIRE CREDIT CORPORATION

     Wilshire Credit Corporation ("WILSHIRE CREDIT") will be responsible for
servicing the mortgage loans. These responsibilities will include the receipt
of funds, the reconciliation of servicing activity with respect to the mortgage
loans, investor reporting, remittances to the Trustee to accommodate
distributions to certificateholders, management and liquidation of mortgaged
properties acquired by foreclosure or deed in lieu of foreclosure, notices and
other responsibilities as detailed in the pooling and servicing agreement.
Wilshire Credit's principal executive offices are located at 1776 S.W. Madison
Street, Portland, Oregon 97205. The telephone number of such offices is (503)
223-5600.

     The servicer, Wilshire Credit, a Nevada corporation, is a subsidiary of
Wilshire Financial Services Group Inc. ("WFSG"). The predecessor to Wilshire
Credit was formed in November 1996 to conduct the loan servicing business of
WFSG and currently services WFSG's portfolio as well as portfolios for
unaffiliated third parties.

     Wilshire Credit is primarily engaged in the specialty loan servicing and
resolution business. At June 30, 1999, Wilshire Credit was servicing
approximately $2 billion aggregate principal amount of loans and charge off
assets. At June 30, 2000, Wilshire Credit had approximately 200 employees.

     Delinquency and Foreclosure Statistics. No information is provided herein
with respect to Wilshire Credit's mortgage loan servicing portfolio. Wilshire
Credit's servicing portfolio was acquired from, and originated by, a variety of
institutions. Wilshire Credit does not believe that the information regarding
the delinquency, loss and foreclosure experience of Wilshire Credit's servicing
portfolio is likely to be a meaningful indicator of the delinquency, loss and
foreclosure experience of the mortgage loans. For example, the delinquency and
loss experience of Wilshire Credit's servicing portfolio may include (i) loans
and financial assets acquired from entities other than those by which the
mortgage loans were originated, (ii) loans and financial assets from the same
or different entities originated pursuant to different underwriting standards
and (iii) loans and financial assets having a geographic distribution that
varies from the geographic distribution of the mortgage loans. In addition,
Wilshire Credit's consolidated servicing portfolio includes loans with a
variety of payment and other characteristics that may not correspond to those
of the mortgage loans.

GREENPOINT MORTGAGE FUNDING, INC.

     GreenPoint Mortgage Funding, Inc. ("GREENPOINT"), a New York corporation,
is a wholly-owned subsidiary of GreenPoint Financial Corp., a national
specialty housing finance company. GreenPoint is engaged in the mortgage
banking business, which consists of the origination, acquisition, sale and


                                      S-29
<PAGE>

servicing of residential mortgage loans secured primarily by one to four-unit
family residences, and the purchase and sale of mortgage servicing rights.
GreenPoint originates loans through a nationwide network of production
branches. Loans are originated primarily through GreenPoint's wholesale
division, through a network of independent mortgage loan brokers approved by
GreenPoint, and also through its retail lending division and correspondent
lending division.

     GreenPoint's present business operations were formed through the transfer
to GreenPoint effective October 1, 1999 of the assets and liabilities of
Headlands Mortgage Company. Simultaneously with this transfer, GreenPoint
Mortgage Corp., a subsidiary of GreenPoint Financial specializing in
non-conforming, no documentation loans, was merged into GreenPoint. All of the
mortgage operations of GreenPoint Financial are now conducted through
GreenPoint.

     GreenPoint's executive offices are located at 1100 Larkspur Landing
Circle, Suite 101, Larkspur, CA 94939.

GREENPOINT'S DELINQUENCY AND FORECLOSURE EXPERIENCE

     In connection with the consolidation of GreenPoint Financial Corp.'s
mortgage operations, the servicing operations formerly maintained by Headlands
Mortgage Company at its servicing center in Santa Rosa, California are being
transferred to the servicing center formerly maintained by GreenPoint Mortgage
Corp. in Columbus, Georgia. This transfer was completed during the first
quarter of 2000 and all of the servicer's servicing operations are presently
located in Columbus. The servicer will continue to use the servicing procedures
described herein and in the accompanying prospectus to service the mortgage
loans; however, the personnel who service the mortgage loans at the Columbus
facility will principally be former GreenPoint Mortgage Corp. employees rather
than former Headlands Mortgage Company employees.

     Mortgage loan servicing includes:

     o   collecting payments from borrowers and remitting those funds to
         investors,

     o   accounting for all mortgage loan principal and interest,

     o   reporting to investors,

     o   holding custodial funds for payment of mortgage and mortgage related
         expenses such as taxes and insurance,

     o   advancing funds to cover delinquent payments,

     o   inspecting foreclosures and property disposition in the event of
         unremedied defaults, and

     o   otherwise administering the mortgages.


                                      S-30
<PAGE>

                     GREENPOINT MORTGAGE FUNDING, INC.'S*
                         SECOND LIEN MORTGAGE PORTFOLIO
                     DELINQUENCY AND FORECLOSURE EXPERIENCE


<TABLE>
<CAPTION>
                                    DECEMBER 31, 1998          DECEMBER 31, 1999           AUGUST 31, 2000
                                 ------------------------   ------------------------   -----------------------
                                                PERCENT                    PERCENT                    PERCENT
                                                   OF                         OF                        OF
                                   NUMBER      SERVICING      NUMBER      SERVICING      NUMBER      SERVICING
                                  OF LOANS     PORTFOLIO     OF LOANS     PORTFOLIO     OF LOANS     PORTFOLIO
                                 ----------   -----------   ----------   -----------   ----------   ----------
<S>                              <C>          <C>           <C>          <C>           <C>          <C>
Total Number** ...............     1,051          100.0%      7,115          100.0%      4,780         100.0%
                                   =====          =====       =====          =====       =====         =====
Period of Delinquency
 30-59 .......................        16            1.5%        171            2.4%        134           2.8%
 60-89 .......................         1            0.1%         40            0.6%         37           0.8%
 90 days or more .............         2            0.2%         19            0.3%         44           0.9%
                                   -----          -----       -----          -----       -----         -----
Total Delinquencies (excluding
 Foreclosures) ...............        19            1.8%        230            3.2%        215           4.5%
                                   =====          =====       =====          =====       =====         =====
Foreclosures Pending .........         5            0.5%         33            0.5%         37           0.8%
</TABLE>

----------
*     The table includes Headlands Mortgage Company experience prior to its
      merger with GreenPoint.

**    Figures do not include loans held in any of GreenPoint's warehouse
      facilities.

SERVICING COMPENSATION AND PAYMENT OF EXPENSES

     The Expense Fees for the mortgage loans are payable out of the interest
payments on each mortgage loan. The Expense Fees will vary from mortgage loan
to mortgage loan. The rate at which the Expense Fees accrue is expected to
range from 1.485% to 2.235% per annum of the outstanding principal balance of
each mortgage loan. As of the cut-off date, the weighted average rate at which
the Expense Fees accrue is expected to equal approximately 1.747%. The Expense
Fees consist of the servicing fee, fees payable to the trustee for its
activities as trustee under the pooling and servicing agreement and, for
certain mortgage loans, fees for mortgage insurance. The servicing fee payable
to the servicer will range from 0.50% to 1.25% per annum, with a weighted
average of approximately 0.762% per annum, in each case of the outstanding
principal balance of each mortgage loan. The servicer is obligated to pay some
ongoing expenses associated with the trust and incurred by the servicer in
connection with its responsibilities under the pooling and servicing agreement
and those amounts will be paid by the servicer, out of its servicing fee. The
amount of the servicing fee is subject to adjustment for prepaid mortgage
loans, as described in this prospectus supplement under "--Adjustment to
Servicing Fee in Connection with Prepaid Mortgage Loans". The servicer will
also be entitled to receive late payment fees, prepayment penalty fees,
assumption fees and other similar charges. The servicer will also be entitled
to receive all reinvestment income earned on amounts on deposit in the related
Collection Account.

     The net rate of a mortgage loan is the mortgage rate of that mortgage loan
minus the rate at which the Expense Fees accrue. The mortgage rate of a
mortgage loan is the rate at which interest accrues on that mortgage loan in
accordance with the terms of the related mortgage note.

ADJUSTMENT TO SERVICING FEE IN CONNECTION WITH PREPAID MORTGAGE LOANS

     When a principal prepayment in full is made on a mortgage loan, the
mortgagor is charged interest only for the period from the due date of the
immediately preceding monthly payment up to the date of that prepayment,
instead of for a full month. In most cases, partial principal prepayments are
applied as of the day of receipt, with a resulting reduction in interest
payable for the month during which the partial principal prepayment is made.

     The servicer is obligated to remit to the trust on the day before each
distribution date with respect to each mortgage loan serviced by it an amount
equal to the lesser of:


                                      S-31
<PAGE>

     o   any shortfall for the previous month in interest collections resulting
         from the timing of principal prepayments in full and partial principal
         prepayments on the mortgage loans made during the calendar month
         preceding such distribution date, and

     o   up to 0.25% per annum of the servicing fee the servicer is entitled to
         receive from the trust on the related distribution date.

     Any remaining shortfall in interest collections resulting from partial
principal prepayments and the timing of the principal prepayments in full will
be allocated pro rata to the Certificates according to the amount of interest
to which each class of the certificates would otherwise be entitled in
reduction thereof.

     You may refer to "Description of the Certificates--Distributions of
Interest" in this prospectus supplement for more detail.

ADVANCES FROM THE SERVICER

     Subject to the limitations described below the servicer will be required
to advance, prior to each distribution date, from its own funds or amounts
received for the related mortgage loans that are not required to be distributed
on that distribution date, an amount equal to the following:

     o   the aggregate of payments of principal of and interest on the mortgage
         loans, net of the servicing fee, which were due on the previous due
         date and which were delinquent on the determination date for that
         distribution date.

     Advances are intended to maintain a regular flow of scheduled interest and
principal payments on the certificates rather than to guarantee or insure
against losses. The servicer is obligated to make advances for delinquent
payments of principal of or interest on each mortgage loan to the extent that
those advances are, in its reasonable judgment, recoverable from future
payments and collections or insurance payments or proceeds of liquidation of
the related mortgage loan. Subject to the foregoing, advances will be made
through the liquidation of the related mortgaged property. If the servicer
determines on any determination date to make an advance, that advance will be
included with the distribution to certificateholders on the related
distribution date. Any failure by the servicer to make an advance as required
under the pooling and servicing agreement will constitute an event of default
under the pooling and servicing agreement subject to a specified grace period.
If the servicer is terminated as a result of the occurrence of an event of
default, the trustee or the successor servicer will be obligated to make that
advance, in accordance with the terms of the pooling and servicing agreement.
For a discussion of other events of default under the pooling and servicing
agreement and the rights of the trustee in the case of any event of default,
see "The Agreements--Event of Default and Rights in the Case of Events of
Default" in the prospectus.

OPTIONAL PURCHASE OF DEFAULTED LOANS

     The Seller may, at its option, purchase from the trust any mortgage loan
serviced by it which is delinquent 91 days or more. That purchase shall be at a
price equal to 100% of the Stated Principal Balance of that mortgage loan plus
accrued interest on that mortgage loan at the applicable mortgage rate from the
date through which interest was last paid by the related mortgagor to the first
day of the month in which that amount is to be distributed.

LOSS MITIGATION ADVISOR

     In connection with the Mortgage Pool Insurance Policy obtained by the
depositor, The Murrayhill Company, a Colorado corporation (the "Loss Mitigation
Advisor"), will act as the certificateholders' representative in advising the
servicer regarding certain delinquent and defaulted mortgage loans and in
monitoring and reporting to the depositor and the Certificate Insurer on the
performance of such mortgage loans. The Loss Mitigation Advisor will rely upon
mortgage loan data that is provided to it by the servicer in performing its
advisory and monitoring functions.

     The Loss Mitigation Advisor will be entitled to receive a Loss Mitigation
Advisor's Fee until the termination of the Trust Fund or until its removal by a
vote of at least 662/3% of the certificateholders. Such fee will be paid from
the Trust Fund in accordance with the pooling and servicing agreement.


                                      S-32
<PAGE>

                        DESCRIPTION OF THE CERTIFICATES

GENERAL

     The certificates will be issued under the pooling and servicing agreement.
Described below in this section are summaries of the specific terms and
provisions under which the certificates will be issued. The following summaries
do not purport to be complete and additional information is provided in the
provisions of the pooling and servicing agreement.

     The DLJ Mortgage Pass-Through Certificates, Series 2000-S4 will consist of
the Class I-A-1, Class X-I, Class I-P, Class II-A-1, Class II-A-2, Class X-II,
Class III-A-1, Class III-A-2, Class X-III, Class A-R-1, Class A-R-2 and the
Class A-R-3 Certificates, which are collectively referred to as the senior
certificates, and the Class B-1, Class XB-1, Class B-2 and Class XB-2
Certificates, which are collectively referred to as the subordinate
certificates. The senior certificates and the Subordinate Certificates, which
are collectively referred to as the offered certificates, are offered by this
prospectus supplement. The Class I-A-1, Class II-A-1, Class II-A-2, Class
III-A-1 and Class III-A-2 Certificates are collectively referred to as the
Class A Certificates. The Class X-I, Class X-II and Class X-III Certificates
are collectively referred to as the Class X Certificates. The Class A-R-1,
Class A-R-2 and Class A-R-3 Certificates are collectively referred to herein as
the Class A-R Certificates. The Class B-1 Certificates and the Class B-2
Certificates are collectively referred to herein as the Class B Certificates
and the Class XB-1 Certificates and Class XB-2 Certificates are collectively
referred to herein as the Class XB Certificates. The classes of offered
certificates will have the respective initial Class Principal Balances or
initial notional amounts, subject to the permitted variance, and pass-through
rates listed or described on page S-3 of this prospectus supplement. In
addition, the trust will issue the Class A-S Certificates.

     The Class X-I, Class II-A-2, Class X-II, Class III-A-2, Class X-III, Class
XB-1 and Class XB-2 Certificates do not have a principal balance and are not
entitled to any distributions in respect of principal of the mortgage loans.
The Class I-P Certificates will not be entitled to receive any distributions of
interest.

     The Class I-A-1 Certificates will evidence in the aggregate an initial
beneficial ownership interest of approximately 88.48% in the Group I mortgage
loans, as of the closing date. The Class II-A-1 Certificates will evidence in
the aggregate an initial beneficial ownership interest of approximately 89.00%
in the Group II mortgage loans, as of the closing date. The Class III-A-1
Certificates will evidence in the aggregate an initial beneficial ownership
interest of approximately 89.00% in the Group III mortgage loans, as of the
closing date. The Class B-1, Class B-2 and Class A-S Certificates, as of the
closing date, represent an initial beneficial ownership interest of
approximately 6.00%, 4.00% and 1.00%, respectively, in the mortgage loans.

     The senior certificates, other than the Class A-R Certificates, will be
available only in book-entry form through the facilities of DTC. The Class A-R
Certificates will be issued in fully registered certificated form. Each Class
A-R Certificates will be issued as a single certificate with a dollar
denomination of $100.

DTC REGISTERED CERTIFICATES

     Each class available in book-entry form will be issued in one or more
certificates which equal the aggregate initial Class Principal Balance of each
of those classes of certificates and which will be held by a nominee of DTC,
and are collectively referred to as the DTC registered certificates. Beneficial
interests in the DTC registered certificates will be held indirectly by
investors through the book-entry facilities of DTC, as described in this
prospectus supplement. Investors in the DTC registered certificates, other than
the Class X-I, Class II-A-2, Class X-II, Class III-A-2 and Class X-III
Certificates, may hold those beneficial interests in these certificates in
minimum denominations representing an original principal amount of $25,000 and
multiples of $1 in excess of that amount. Investors in the Class X-I, Class
II-A-2, Class X-II, Class III-A-2 and Class X-III Certificates may hold those
beneficial interests in the DTC registered certificates in minimum
denominations representing an original notional amount of not less than
$100,000 and multiples of $1 in excess of that amount. The depositor has been
informed by DTC that its nominee will be Cede & Co. Accordingly, Cede & Co. is
expected to be the holder of record of the


                                      S-33
<PAGE>

DTC registered certificates. No person acquiring a DTC registered certificate
will be entitled to receive a physical certificate representing that
certificate, a definitive certificate, except as described in the third
paragraph below.

     Unless and until definitive certificates are issued, it is anticipated
that the only "certificateholder" of the DTC registered certificates will be
Cede & Co., as nominee of DTC. Beneficial owners of the DTC registered
certificates will not be certificateholders, as that term is used in the
pooling and servicing agreement. Beneficial owners are only permitted to
exercise the rights of certificateholders indirectly through participants and
DTC. Monthly and annual reports on the trust provided to Cede & Co., as nominee
of DTC, may be made available to beneficial owners on request, in accordance
with the rules, regulations and procedures creating and affecting DTC, and to
the participants to whose DTC accounts the DTC registered certificates of those
beneficial owners are credited.

     For a description of the procedures applicable to the DTC registered
certificates, see "Description of the Securities--Book-Entry Registration" in
the prospectus.

     Definitive certificates will be issued to beneficial owners of DTC
registered certificates, or their nominees, rather than to DTC, only if:

     o   DTC or the depositor advises the trustee in writing that the depository
         is no longer willing, qualified or able to discharge properly its
         responsibilities as nominee and depository for the DTC registered
         certificates and the depositor or the trustee is unable to locate a
         qualified successor;

     o   the depositor, at its sole option, in writing, elects to terminate the
         book-entry system through DTC; or

     o   after the occurrence of an event of default, beneficial owners of any
         class of DTC registered certificates representing not less than 51% of
         the related aggregate Class Principal Balance advise the trustee and
         DTC through the participants in writing that the continuation of a
         book-entry system through DTC, or a successor thereto, is no longer in
         the best interests of the beneficial owners.

     In the case of any of the events described in the immediately preceding
paragraph, the trustee will be required to notify all beneficial owners of the
occurrence of that event and the availability of definitive certificates. At
the time of surrender by DTC of the global certificate or certificates
representing the DTC registered certificates and receipt from DTC of
instructions for re-registration, the trustee will issue the definitive
certificates. After that, the trustee will recognize the holders of those
definitive certificates as certificateholders under the pooling and servicing
agreement.

     According to DTC, the information above for DTC has been provided for
informational purposes only and is not intended to serve as a representation,
warranty or contract modification of any kind.

VOTING RIGHTS

     Voting rights of the trust will be allocated 1% to each of the Class
II-A-2 Certificates and Class III-A-2 Certificates, and each Class of Class X
Certificates with the balance allocated among the other classes of certificates
based on their respective Class Principal Balances.

                    SUBROGATION OF THE CERTIFICATE INSURER

     The Certificate Insurer shall be subrogated to the rights of each holder
of an Insured Certificate to receive payments on those Insured Certificates to
the extent of any payment by the Certificate Insurer under the Certificate
Insurance Policy. Pursuant to the pooling and servicing agreement, so long as
an event of default has not occurred or is continuing under the Certificate
Insurance Policy, the Certificate Insurer will be entitled to exercise the
voting, consent, directing and other control rights of the holders of the
Insured Certificates without the consent of such holders, and the holders of
the Insured Certificates may exercise such rights only with the prior written
consent of the Certificate Insurer.


                                      S-34
<PAGE>

                               GLOSSARY OF TERMS

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

     ADJUSTED WEIGHTED AVERAGE NET MORTGAGE RATE--For any distribution date the
weighted average of the Net Mortgage Rates of the Group I mortgage loans,
provided, however, each mortgage loan with a mortgage rate less than 8.28%
shall be treated as having a mortgage rate of 8.28%. For purposes of
calculating this rate, the principal balance of each Class I-P Mortgage Loan
will equal the product of its principal balance multiplied by the difference
between 1 and the Class I-P Fraction for that mortgage loan.

     This example is intended to demonstrate the calculation of the Adjusted
Weighted Average Net Mortgage Rate of two sample loans.


<TABLE>
<CAPTION>
                                          PRINCIPAL     NET MORTGAGE
                                           BALANCE          RATE
                                         -----------   -------------
<S>                                      <C>           <C>
  Assumptions: loan 1 ................    $100,000          8.00%
               loan 2 ................    $100,000          9.00%
</TABLE>

     Loan 1 will be characterized as a Class I-P Mortgage Loan since its Net
Mortgage Rate is less than 8.28%. Thus for purposes of calculating the Adjusted
Weighted Average Net Mortgage Rate, loan 1 will be treated as having a Net
Mortgage Rate of 8.28% applied to a principal balance calculated as follows:

   $100,000 x (1 - ((8.28%-8.00%) / 8.28%)) = $96,618.36

     Calculation of Adjusted Weighted Average Net Mortgage Rate:

   (($96,618.36 x 8.28%) + ($100,000 \x 9.00%))/($96,618.36 + $100,000) = 8.65%

     AVAILABLE FUNDS--For any distribution date and each of the Group I, Group
II and Group III mortgage loans, the sum of the following amounts determined
separately for each mortgage loan group:

     (a) all scheduled installments of interest, net of the related Expense
         Fees, and principal due on the due date in the month in which that
         distribution date occurs and received prior to the related
         determination date on the related mortgage loans, together with any
         advances for the related mortgage loans;

     (b) all insurance proceeds (to the extent not applied to restoration of the
         mortgage property or released to the mortgagor in accordance with the
         servicer's standard servicing procedures) and liquidation proceeds
         received during the month preceding the month of that distribution date
         on the related mortgage loans, in each case net of unreimbursed
         expenses incurred by the servicer in connection with a liquidation or
         foreclosure and unreimbursed advances, if any;

     (c) all partial and full prepayments received during the applicable
         Prepayment Period on the related mortgage loans, exclusive of
         prepayment penalties and premiums;

     (d) amounts received for that distribution date in respect of the
         substitution of a related mortgage loan, the purchase of a related
         deleted mortgage loan, or a repurchase of a related mortgage loan by
         the seller or the servicer as of that distribution date;

     (e) any amounts payable as Compensating Interest by a servicer on that
         distribution date on the related mortgage loans;

     (f) all proceeds due under the Mortgage Pool Insurance Policy; and

     (g) minus, in the case of clauses (a) through (d) above and without
         duplication, the amounts to which a servicer is entitled under the
         pooling and servicing agreement, including accrued and unpaid servicing
         fees, unreimbursed advances and certain expenses.


                                      S-35
<PAGE>

provided, that the Available Funds for each loan group will be subject to
increase or decrease to reflect any Class A-S Crossover Amount, and to conform
to the provisions described below under "--Cross-Collateralization."

     BANKRUPTCY LOSSES--A Realized Loss incurred on a mortgage loan
attributable to a Deficient Valuation or a Debt Service Reduction each as
defined below. As used herein, a "DEFICIENT VALUATION" is a bankruptcy
proceeding whereby the bankruptcy court may establish the value of the
mortgaged property at an amount less than the then outstanding principal
balance of the mortgage loan secured by such mortgaged property or may reduce
the outstanding principal balance of a mortgage loan. In the case of a
reduction in the value of the related mortgaged property, the amount of the
secured debt could be reduced to such value, and the holder of such mortgage
loan thus would become an unsecured creditor to the extent the outstanding
principal balance of such mortgage loan exceeds the value so assigned to the
mortgaged property by the bankruptcy court. In addition, certain other
modifications of the terms of a mortgage loan can result from a bankruptcy
proceeding, including the reduction (a "Debt Service Reduction") of the amount
of the monthly payment on the related mortgage loan.

     CLASS A-S COMPONENT--As to each loan group, the portion of the Class
Principal Balance of the Class A-S Certificates initially totaling $2,116,984
allocated to that loan group. The initial principal balance of the Class A-S
Component related to loan group I, loan group II and loan group III, is
$1,040,481, $643,842 and $432,661, respectively.

     CLASS A-S COMPONENT PRINCIPAL DISTRIBUTION AMOUNT--As to each loan group,
for any distribution date, an amount equal to the Class A-S Principal
Distribution Amount times a fraction, the numerator of which is the Component
Principal Balance of the Class A-S Component related to that loan group
immediately prior to that distribution date, as reduced to reflect any Special
Hazard Losses or Bankruptcy Losses allocated to that Class A-S Component on
that distribution date, and the denominator of which is the sum of the
Component Principal Balances of the Class A-S Components immediately prior to
that distribution date, as reduced to reflect any Special Hazard Losses or
Bankruptcy Losses allocated to the Class A-S Certificates on that distribution
date.

     CLASS A-S CROSSOVER AMOUNT--For any distribution date, the lesser of:

         (A) the sum of (1) the total amount of Special Hazard Losses or
     Bankruptcy Losses on loans in a loan group (the "loss group") for which the
     Class A-S Component has been reduced to zero, that were allocated on such
     distribution date in whole or in part to a Class A-S Component related to a
     loan group (each, a "crossover group") other than the loss group, plus (2)
     the total of any amounts described in (A)(1) for any prior distribution
     dates for which payments described in this paragraph have not previously
     been made in full, and

         (B) the aggregate of the following amounts calculated separately for
     each crossover group: (1) the Subordinate Percentage for the crossover
     group, plus a percentage equivalent to the Component Principal Balance of
     the Class A-S Component related to the crossover group divided by the
     aggregate Stated Principal Balance of all of the mortgage loans in that
     loan group (excluding, in the case of loan group I, the applicable Class
     I-P Fraction of the Stated Principal Balance of the Class I-P Mortgage
     Loans), times (2) the aggregate of the Principal Payment Amount and the
     Principal Prepayment Amount (exclusive of the portions attributable to the
     Class I-P Principal Distribution Amount) and the Liquidation Amount for
     that distribution date with respect to the crossover group.

On each distribution date, the Class A-S Crossover Amount will be subtracted
from the amount distributable as principal on the Class A Certificates related
to the crossover group or groups, and will be added to the amounts
distributable as principal on the Class A Certificates related to the loss
group; provided that if the losses described in (A) (1) above were allocated to
two Class A-S Components, then the Class A-S Crossover Amount will be
subtracted on a pro rata basis from the amounts distributable as principal on
the Class A Certificates related to the two crossover groups, allocated in
proportion to the respective amounts of the losses so allocated to each of
those Class A-S Components.

     CLASS A-S PRINCIPAL DISTRIBUTION AMOUNT--For any distribution date and the
Class A-S Certificates, the amount, if any, necessary to be distributed as
principal on the Class A-S Certificates in the aggregate


                                      S-36
<PAGE>

in order to reduce the sum of the Component Principal Balances of the Class A-S
Components to the Target Class A-S Balance, as described below under
"--Subordination and Allocation of Losses", after giving effect to any
reduction of the Component Principal Balances of the Class A-S Components on
that distribution date to reflect any Special Hazard Losses or Bankruptcy
Losses allocated to the Class A-S Certificates on that distribution date.

     CLASS I-P DEFERRED AMOUNT--The Class I-P Fraction of any Realized Loss on
a Class I-P Mortgage Loan, other than an Excess Loss, allocated to the Class
I-P Certificates and not previously reimbursed. A payment made in respect of
the Class I-P Deferred Amount shall not reduce the Class Principal Balance of
the Class I-P Certificates.

     CLASS I-P FRACTION--For any Class I-P Mortgage Loan, a fraction, the
numerator of which is 8.28% minus the Net Mortgage Rate on that Class I-P
Mortgage Loan and the denominator of which is 8.28%.

     CLASS I-P MORTGAGE LOAN--Any Group I mortgage loan with a Net Mortgage
Rate of less than 8.28% per annum.

     CLASS I-P PRINCIPAL DISTRIBUTION AMOUNT--For each distribution date, a
portion of the Available Funds for the Group I mortgage loans attributable to
principal received on or in respect of a Class I-P Mortgage Loan, equal to the
amount of principal so attributable multiplied by the applicable Class I-P
Fraction plus, prior to the Credit Support Depletion Date and to the extent of
any amounts otherwise available to be paid as principal to the Class B
Certificates, the Class I-P Deferred Amount on such date.

     CLASS PRINCIPAL BALANCE--For any certificate, not including the Class A-S
Certificates, as of any date of determination, an amount equal to the initial
principal balance of that certificate, reduced by the aggregate of the
following amounts allocable to the certificates:

     o   all amounts previously distributed to holders of certificates of that
         class as payments of principal;

     o   the amount of Realized Losses allocated to that class; and

     o   in the case of any Class B Certificate any amounts allocated to that
         class in reduction of its Class Principal Balance for payment of Class
         I-P Deferred Amounts or if the aggregate Class Principal Balance of the
         certificates exceeds the aggregate Stated Principal Balance of the
         mortgage loans, as described below under "--Allocation of Losses".

     COMPENSATING INTEREST--On any distribution date, an amount to be paid by
the servicer for that distribution date equal to the lesser of any shortfall in
interest collections resulting from the timing of principal prepayments in full
and partial principal prepayments made during the related Prepayment Period on
such mortgage loans up to 0.25% per annum of the servicing fee otherwise
payable to the servicer on such mortgage loans in the related group in
connection with that distribution date.

     COMPONENT PRINCIPAL BALANCE--For each Class A-S Component as of any date
of determination, an amount equal to the initial principal balance of that
component, reduced by the aggregate of the following amounts allocable to that
component:

     o   all amounts previously distributed on that component as payments of
         principal;

     o   the amount of the Special Hazard Losses and Bankruptcy Losses,
         including Excess Losses, allocated to that component;

     o   the amount of all other Realized Losses allocated to that component
         after the Credit Support Depletion Date; and

     o   any amounts allocated to that component in reduction of its Component
         Principal Balance for payment of Class I-P Deferred Amounts in respect
         of Special Hazard Losses or Bankruptcy Losses on the Group I Loans.

     CREDIT SUPPORT DEPLETION DATE is the first Distribution Date on which the
aggregate Class Principal Balance of the Class B Certificates has been or will
be reduced to zero.


                                      S-37
<PAGE>

     EXCESS LOSSES--Special Hazard Losses incurred on the mortgage loans in
excess of the Special Hazard Loss Coverage Amount; Bankruptcy Losses incurred
on mortgage loans in excess of the Bankruptcy Loss Coverage Amount; and Fraud
Losses incurred on mortgage loans in excess of the coverage for those losses
provided in the Mortgage Pool Insurance Policy.

     EXPENSE FEE--For each distribution date and determined separately for each
loan group, the sum of the related servicing fee, the trustee's fees, the Loss
Mitigation Advisor's fee and the premium due the Mortgage Pool Insurance
Company, which shall equal with respect to loan group I, loan group II, and
loan group III, is approximately 1.706%, 1.485% and 2.235%, respectively.

     FRAUD LOSSES--A Realized Loss incurred on a mortgage loan as to which
there was fraud in the origination of the mortgage loan.

     INSURANCE AGREEMENT--The insurance agreement dated as of September 1, 2000
among the Certificate Insurer, the servicer, the seller, the depositor and the
trustee.

     INTEREST ACCRUAL PERIOD--For each distribution date for each
interest-bearing class of certificates, other than the Class II-A-1, Class
II-A-2, Class III-A-1 and Class III-A-2 Certificates, is the calendar month
preceding the month of that distribution date. With respect to the Class
II-A-1, Class II-A-2, Class III-A-1 and Class III-A-2 Certificates, the
Interest Accrual Period is the one-month period commencing on the 25th day of
the month preceding the month in which such distribution date occurs and ending
on the 24th day of the month in which such Distribution Date occurs.

     LIQUIDATION PRINCIPAL--For any distribution date and the mortgage loans,
the principal portion of liquidation proceeds, including any proceeds under the
Mortgage Pool Insurance Policy, received for each mortgage loan in such group
which became a liquidated mortgage loan, but not in excess of the principal
balance of that liquidated mortgage loan, during the calendar month preceding
the month of the distribution date, exclusive of the portion of the Liquidation
Principal attributable to the Class I-P Principal Distribution Amount.

     NET INTEREST SHORTFALL--

     For any distribution date and each loan group the sum of:

     o   the amount of interest which would otherwise have been received for a
         mortgage loan that was the subject of (x) a Relief Act Reduction or (y)
         a Special Hazard Loss, Fraud Loss or Bankruptcy Loss, after the
         exhaustion of the respective amounts of coverage provided by the Class
         B Certificates, Class A-S Certificates and Mortgage Pool Insurance
         Policy for those types of losses; and

     o   any related Net Prepayment Interest Shortfalls.

     NET MORTGAGE RATE--As to each mortgage loan, the mortgage rate of that
mortgage loan with respect to the mortgage loan in each group, minus the sum of
the servicing fee, trustee's fee and premium payable to the Mortgage Pool
Insurance Policy, provided however, with respect to the Group II mortgage loans
and Group III mortgage loans the Net Mortgage Rate shall also be net of the
premium payable to the Certificate Insurer.

     NET PREPAYMENT INTEREST SHORTFALL--For any distribution date and each loan
group, the amount by which the aggregate of Prepayment Interest Shortfalls for
such group during the related Prepayment Period exceeds the available
Compensating Interest for that period.

     PREPAYMENT INTEREST SHORTFALL--The amount by which interest paid by a
borrower in connection with a prepayment of principal on a mortgage loan is
less than one month's interest at the related mortgage rate, net of the related
servicing fee, on the Stated Principal Balance of that mortgage loan.

     PREPAYMENT PERIOD--For any distribution date the calendar month preceding
that distribution date.

     PRINCIPAL PAYMENT AMOUNT--For any distribution date the sum of the
following amounts determined separately for each loan group:

     o   scheduled principal payments on the related mortgage loans due on the
         related due date;


                                      S-38
<PAGE>

     o   the principal portion of repurchase proceeds received for any related
         mortgage loan which was repurchased as permitted or required by the
         pooling and servicing agreement during the calendar month preceding the
         month of the distribution date; and

     o   any other unscheduled payments of principal which were received on the
         related mortgage loans during the preceding calendar month, other than
         principal payments in full, partial principal prepayments or
         Liquidation Principal.

     PRINCIPAL PREPAYMENT AMOUNT--For any distribution date and each group of
mortgage loans, the sum of all partial prepayments or prepayments in full which
were received during the related Prepayment Period for that group.

     REALIZED LOSS--With respect to a liquidated mortgage loan, the amount by
which the remaining unpaid principal balance of the mortgage loan exceeds the
amount of liquidation proceeds, including any proceeds under the Mortgage Pool
Insurance Policy, applied to the principal balance of the related mortgage
loan.

     RELIEF ACT REDUCTION--A reduction in the amount of the monthly interest
payment on a mortgage loan under the Soldiers' and Sailors' Civil Relief Act of
1940.

     SENIOR LIQUIDATION AMOUNT--For any distribution date and each loan group,
for each mortgage loan which became a liquidated mortgage loan during the
calendar month preceding the month of the distribution date, the lesser of the
Senior Percentage of the Stated Principal Balance of that mortgage loan,
exclusive of the Class I-P Fraction related to that Group I mortgage loan, if
applicable, and the Senior Prepayment Percentage of the Liquidation Principal
for that mortgage loan.

     SENIOR PERCENTAGE--For any distribution date and each loan group, the
percentage equivalent of a fraction, the numerator of which is the aggregate
Class Principal Balance of the related senior certificates plus the Component
Principal Balance of the related Class A-S Component, other than the Class I-P
Certificates, with respect to the Group I mortgage loans, immediately prior to
that date and the denominator of which is the aggregate Stated Principal
Balance of the related mortgage loans, less the Class Principal Balance of the
Class I-P Certificates with respect to the Group I mortgage loans, in each case
immediately prior to the distribution date.

     SENIOR PREPAYMENT PERCENTAGE--On any distribution date occurring during
the five years beginning on the first distribution date, 100%. Thereafter, the
related Senior Prepayment Percentage will, except as described below, be
subject to gradual reduction as described in the following paragraph. This
disproportionate allocation of unscheduled payments in respect of principal
will have the effect of accelerating the amortization of the senior
certificates while, in the absence of Realized Losses, increasing the interest
in the aggregate Stated Principal Balance evidenced by the Class B
Certificates. Increasing the interest of the Class B Certificates relative to
that of the senior certificates is intended to preserve the availability of the
subordination provided by such subordinate certificates.

     The Senior Prepayment Percentage for the senior certificates and any
distribution date occurring on or after the fifth anniversary of the first
distribution date will be as follows:

     o   for any distribution date in the first year thereafter, the related
         Senior Percentage plus 70% of the Subordinate Percentage for that
         distribution date;

     o   for any distribution date in the second year thereafter, the related
         Senior Percentage plus 60% of the Subordinate Percentage for that
         distribution date;

     o   for any distribution date in the third year thereafter, the related
         Senior Percentage plus 40% of the Subordinate Percentage for that
         distribution date; and

     o   for any distribution date thereafter, the related Senior Percentage
         plus 20% of the Subordinate Percentage.

If for any of the foregoing distribution dates the related Senior Percentage
exceeds the initial Senior Percentage, the Senior Prepayment Percentage for
that distribution date will once again equal 100%.


                                      S-39
<PAGE>

     Notwithstanding the foregoing, with respect to any distribution occurring
during the five years beginning on the first distribution date, the related
Senior Percentage for purposes of calculating the Senior Principal Distribution
Amount shall equal 100%.

     In spite of the foregoing, no decrease in the reduction to the Senior
Prepayment Percentage as described above will occur if, as of the first
distribution date as to which that decrease applies the outstanding principal
balance of the mortgage loans, delinquent 60 days or more averaged over the
preceding six month period, as a percentage of the aggregate Class Principal
Balance of the Class B Certificates as of that distribution date plus the
amount of coverage under the Mortgage Pool Insurance Policy is equal to or
greater than 50% or cumulative Realized Losses for the mortgage loans exceed:

     o   for the distribution date on the fifth anniversary of the first
         distribution date, 30% of the aggregate Class Principal Balance of the
         Class B Certificate plus the amount of coverage under the Mortgage Pool
         Insurance Policy as of the closing date;

     o   for the distribution date on the sixth anniversary of the first
         distribution date, 35% of the aggregate Class Principal Balance of the
         Class B Certificate plus the amount of coverage under the Mortgage Pool
         Insurance Policy as of the closing date;

     o   for the distribution date on the seventh anniversary of the first
         distribution date, 40% of the aggregate Class Principal Balance of the
         Class B Certificate plus the amount of coverage under the Mortgage Pool
         Insurance Policy as of the closing date;

     o   for the distribution date on the eighth anniversary of the first
         distribution date, 45% of the aggregate Class Principal Balance of the
         Class B Certificate plus the amount of coverage under the Mortgage Pool
         Insurance Policy as of the closing date; and

     o   for the distribution date on the ninth anniversary of the first
         distribution date, 50% of the aggregate Class Principal Balance of the
         Class B Certificate plus the amount of coverage under the Mortgage Pool
         Insurance Policy as of the closing date.

However, any such reduction not permitted on the first distribution date as to
which any decrease applies will be permitted on any subsequent distribution
date on which these criteria are satisfied.

     If on any distribution date the allocation to the class of senior
certificates then entitled to distributions of principal payments in full and
partial principal prepayments and other amounts in the percentage required
above would reduce the outstanding Class Principal Balance of that class below
zero, the distribution to that class of certificates of the Senior Prepayment
Percentage of those amounts for that distribution date will be limited to the
percentage necessary to reduce the related Class Principal Balance to zero.

     SENIOR PRINCIPAL DISTRIBUTION AMOUNT--For any distribution date and each
loan group, the sum of:

     o   the Senior Prepayment Percentage of the Principal Payment Amount,
         exclusive of the portion of the Principal Payment Amount attributable
         to the Class I-P Principal Distribution Amount with respect to the
         Group I mortgage loans;

     o   the Senior Prepayment Percentage of the Principal Prepayment Amount,
         exclusive of the portion of the Principal Prepayment Amount
         attributable to the Class I-P Principal Distribution Amount; and

     o   the Senior Liquidation Amount.

     SPECIAL HAZARD LOSSES--A Realized Loss incurred on a mortgage loan, to the
extent that the loss was attributable to direct physical damage to a mortgaged
property other than any loss of a type covered by a hazard insurance policy or
a flood insurance policy, if applicable; and any shortfall in insurance
proceeds for partial damage due to the application of the co-insurance clauses
contained in hazard insurance policies.

     STATED PRINCIPAL BALANCE--As to any mortgage loan and due date, the unpaid
principal balance of that mortgage loan as of that due date, as specified in
the amortization schedule at the time relating to that


                                      S-40
<PAGE>

mortgage loan and due date before any adjustment to the amortization schedule
by reason of any moratorium or similar waiver or grace period, after giving
effect to any previous partial principal prepayments and liquidation proceeds
received and to the payment of principal due on that due date and irrespective
of any delinquency in payment by the related mortgagor.

     SUBORDINATE LIQUIDATION AMOUNT--For any distribution date and each
mortgage loan group, the excess, if any, of the aggregate Liquidation Principal
of all mortgage loans in that group which became liquidated mortgage loans
during the calendar month preceding the month of that distribution date over
the Senior Liquidation Amount for that mortgage loan group and distribution
date.

     SUBORDINATE PERCENTAGE--For any distribution date and each mortgage loan
group, the difference between 100% and the Senior Percentage for that
distribution date.

     SUBORDINATE PREPAYMENT PERCENTAGE--For any distribution date and each loan
group, the difference between 100% and the Senior Prepayment Percentage for
that distribution date.

     SUBORDINATE PRINCIPAL DISTRIBUTION AMOUNT--For any distribution date and
the Class B Certificates, the sum of the following amounts for each loan group:


     o   the Subordinate Prepayment Percentage of the Principal Payment Amount,
         exclusive of the portion of that Principal Payment Amount attributable
         to the Class I-P Principal Distribution Amount with respect to Group I
         mortgage loans;

     o   the Subordinate Prepayment Percentage of the Principal Prepayment
         Amount, exclusive of the portion of that Principal Prepayment Amount
         attributable to the Class I-P Principal Distribution Amount; and

     o   the Subordinate Liquidation Amount;

less the sum of any Class I-P Deferred Amounts required to be paid to the Class
I-P Certificates on that distribution date.

     Any reduction to the Subordinate Principal Distribution Amount shall first
offset the Principal Payment Amounts, second the Subordinate Liquidation
Amounts and then the Principal Prepayment Amounts.

PAYMENTS ON MORTGAGE LOANS; ACCOUNTS

     On or prior to the closing date, the trustee will establish a Certificate
Account, which shall be maintained with the trustee in trust for the benefit of
the certificateholders. On the business day prior to each distribution date, as
specified in the pooling and servicing agreement, each servicer will withdraw
from its Collection Account the portion of the Available Funds for the related
group mortgage loans on deposit in the respective Collection Account for that
distribution date and will deposit those amounts in the Certificate Account.
See "The Trust Funds--Collection Account and Certificate Account" in the
prospectus.

DISTRIBUTIONS

     Distributions on the certificates will be made by the trustee on the 25th
day of each month, or, if such 25th day is not a business day, the first
business day thereafter, commencing in October 2000, to the persons in whose
names those certificates are registered at the close of business on the last
business day of the month preceding the month of that distribution date.

     Distributions on each distribution date will be made by check mailed to
the address of the person entitled to those distributions as it appears on the
applicable certificate register. In the case of a certificateholder who holds
100% of a class of certificates or who holds a Class II-A-2, Class III-A-2,
Class X or Class XB Certificates or who holds certificates with an aggregate
initial certificate balance of $1,000,000 or more and who has so notified the
trustee in writing in accordance with the pooling and servicing agreement,
distributions on each distribution date will be made by wire transfer in
immediately available funds to the account of that certificateholder at a bank
or other depository institution having


                                      S-41
<PAGE>

appropriate wire transfer facilities. The final distribution in retirement of
the certificates will be made only on presentment and surrender of those
certificates at the corporate trust office of the trustee.

PRIORITY OF DISTRIBUTIONS

     Distributions will in general be made to the extent of the Available Funds
including any amounts from the Mortgage Pool Insurance Policy for the related
group in the order and priority as follows:


     (I)    with respect to the Group I Certificates, before the Credit Support
            Depletion Date, to the extent of the Available Funds for Group I for
            that distribution date:

            o   first, to the Class I-P Certificates, the Class I-P Fraction of
                all principal received on or in respect of each Class I-P
                Mortgage Loan;

            o   second, to the Class I-P Certificates, to the extent of amounts
                which otherwise would have been available to pay the Class A-S
                Component Principal Distribution Amount on the Class A-S
                Component related to loan group I on that Distribution Date,
                principal in an amount equal to any Class I-P Deferred Amounts
                that were attributable to a Special Hazard Loss or a Bankruptcy
                Loss that was not an Excess Loss; provided, however, that any
                amounts so distributed will not cause a further reduction in the
                Class I-P Principal Balance;

            o   third, to the Class A-S Certificates, accrued and unpaid
                interest at the applicable component interest rate on the Class
                A-S Component related to loan group I;

            o   fourth, to the Class A-S Certificates, the Class A-S Component
                Principal Distribution Amount related to loan group I, as
                reduced by any amounts paid to the Class I-P Certificates under
                the immediately preceding clause second;

            o   fifth, to the Class I-A-1 Certificates and Class X-1
                Certificates, accrued and unpaid interest at their respective
                pass-through rate on their Class Principal Balance Amount and
                Class Notional Amount, respectively; and

            o   sixth, to the Class I-A-1 Certificates, principal as described
                in "--Distributions of Principal--Senior Principal Distribution
                Amount" in this prospectus supplement;


     (II)   with respect to the Group II Certificates, before the Credit Support
            Depletion Date, to the extent of the Available Funds including any
            amounts from the Mortgage Pool Insurance Policy and with respect to
            the Class II-A-1 Certificates and Class II-A-2 Certificates, as
            applicable, any Insured Payment for that Distribution Date:

            o   first, to the Certificate Insurer, any premium due with respect
                to the Certificate Insurance Policy for such Distribution Date;

            o   second, to the Class I-P Certificates, to the extent of amounts
                which otherwise would have been available to pay the Class A-S
                Component Principal Distribution Amount on the Class A-S
                Component related to loan group II on that Distribution Date,
                principal in an amount equal to any Class I-P Deferred Amounts
                that were attributable to a Special Hazard Loss or a Bankruptcy
                Loss that was not an Excess Loss, that were not covered by
                amounts otherwise payable on the Class A-S Component related to
                loan group I and that remain undistributed; provided however,
                that any amounts so distributed will not cause a further
                reduction in the Class I-P Principal Balance;

            o   third, to the Class A-S Certificates, accrued and unpaid
                interest at the applicable component interest rate on the Class
                A-S Component related to loan group II;

            o   fourth, to the Class A-S Certificates, the Class A-S Component
                Principal Distribution Amount related to loan group II as
                reduced by any amounts paid to the Class I-P Certificates under
                the immediately preceding clause second;


                                      S-42
<PAGE>

            o   fifth, to the Class II-A-1, Class II-A-2, Class X-II, Class
                A-R-1, Class A-R-2 and Class A-R-3 Certificates, accrued and
                unpaid interest at their respective pass-through rates on their
                respective Class Principal Balances or Class Notional Amount, as
                applicable, as described in "--Distributions of Interest" in
                this prospectus supplement;

            o   sixth, to the Class II-A-1, Class A-R-1, Class A-R-2 and Class
                A-R-3 Certificates, principal as described in "--Distributions
                of Principal--Senior Principal Distribution Amount" in this
                prospectus supplement; and

            o   seventh, to the Certificate Insurer, any reimbursement for
                amounts paid under the Certificate Insurance Policy and any
                other amounts due to the Certificate Insurer pursuant to the
                Insurance Agreement, together with interest thereon at the rate
                set forth in the Insurance Agreement;

     (III)  with respect to the Group III Certificates, before the Credit
            Support Depletion Date, to the extent of the Available Funds
            including any amounts from the Mortgage Pool Insurance Policy and
            with respect to the Class III-A-1 and Class III-A-2 Certificates, as
            applicable, the amount of any Insured Payment for that Distribution
            Date:

            o   first, to the Certificate Insurer, any premium due with respect
                to the Certificate Insurance Policy for such distribution date;

            o   second, to the Class I-P Certificates, to the extent of amounts
                which otherwise would be available to pay the Class A-S
                Component Principal Distribution Amount on the Class A-S
                Component related to loan group III on that Distribution Date,
                principal in an amount equal to any Class I-P Deferred Amounts
                that were attributable to a Special Hazard Loss or a Bankruptcy
                Loss that was not an Excess Loss, that were not covered by
                amounts otherwise payable on the Class A-S Components related to
                loan group I and loan group II and that remain undistributed;
                provided, however, that any amounts so distributed will not
                cause a further reduction in the Class I-P Principal Balance;

            o   third, to the Class A-S Certificates, accrued and unpaid
                interest at the applicable component interest rate on the Class
                A-S Component related to loan group III;

            o   fourth, to the Class A-S Certificates, the Class A-S Component
                Principal Distribution Amount related to loan group III, as
                reduced by any amounts paid to the Class I-P Certificates under
                the immediately preceding clause second;

            o   fifth, to the Class III-A-1, Class III-A-2 and Class X-III
                Certificates, accrued and unpaid interest at their respective
                pass-through rate on their respective Class Principal Balance
                and Class Notional Amount respectively, as described in
                "--Distribution of Interest" in this prospectus supplement;

            o   sixth, to the Class III-A-1 Certificates, principal as described
                in "--Distributions of Principal--Senior Principal Distribution
                Amount" in this prospectus supplement; and

            o   seventh, to the Certificate Insurer, any reimbursement for
                amounts paid under the Certificate Insurance Policy and any
                other amounts due to the Certificate Insurer pursuant to the
                Insurance Agreement, together with interest thereon at the rate
                set forth in the Insurance Agreement; and

     (IV)   with respect to the Class I-P, Class B and Class XB Certificates,
            before the Credit Support Depletion Date, to the extent of the
            Available Funds for loan group I, loan group II and loan group III,
            subject to the payment of the Group I, Group II and Group III
            Certificates and the Certificate Insurer as described above in
            paragraph (I), (II) and (III), and further subject to any payments
            to the Group I, Group II and Group III Senior Certificates and the
            Certificate Insurer as described in this prospectus supplement under
            "--Cross-Collateralization":


                                      S-43
<PAGE>

            o   first, to the Class I-P Certificates, to the extent of amounts
                which otherwise would have been available to pay the Subordinate
                Principal Distribution Amount on that Distribution Date,
                principal in an amount equal to any Class I-P Deferred Amounts
                that were attributable to a Special Hazard Loss, a Bankruptcy
                Loss or a Fraud Loss; provided, however, that any amounts
                distributed in respect of losses pursuant to this paragraph will
                not cause a further reduction in the Class I-P Principal
                Balance;

            o   second, to the Class B-1 Certificates, accrued and unpaid
                interest at the related pass-through rate on the Class B-1
                Principal Balance;

            o   third to the Class XB-1 Certificates, accrued and unpaid
                interest at the related pass-through rate on the Class XB-1
                Notional Amount;

            o   fourth, to the Class B-1 Certificates, their pro rata share of
                the Subordinate Principal Distribution Amount;

            o   fifth, to the Class B-2 Certificates, accrued and unpaid
                interest at the related pass-through rate on the Class B-2
                Principal Balance;

            o   sixth, to the Class XB-2 Certificates, accrued and unpaid
                interest at the related pass-through rate on the Class XB-2
                Notional Amount;

            o   seventh, to the Class B-2 Certificates, their pro rata share of
                the Subordinate Principal Distribution Amount; and

            o   eighth, to each Class of the Class B Certificates in order of
                seniority, up to the amount of unreimbursed realized losses
                previously allocated to that class, if any; provided, however,
                that any amounts distributed pursuant to this paragraph will not
                cause a further reduction in the Class Principal Balances of any
                of the Class B Certificates.

     Following the Credit Support Depletion Date, distributions of Available
Funds for each loan group will be made on a pro rata basis among the related
Class A Certificates and Class A-S Component.

     Distributions to the Senior Group I, Group II and Group III Certificates
will be based primarily on payments received or advanced with respect to the
group I, group II and group III loans, respectively, except in the limited
circumstances described in this prospectus supplement under
"--Cross-Collateralization." Distributions to the Class A-S and Class B
Certificates will be based on payments received or advanced with respect to all
of the mortgage loans.

DETERMINATION OF LIBOR

     With respect to each distribution date, one-month LIBOR will equal the
interbank offered rate for one-month United States dollar deposits in the
London market as quoted on Telerate Page 3750 as of 11:00 A.M., London time, on
the second LIBOR business day prior to the first day of the related Interest
Accrual Period. Telerate Page 3750 means the display designated as page 3750 on
the Bridge Telerate, or any other page as may replace page 3750 on that service
for the purpose of displaying London interbank offered rates of major banks. If
the rate does not appear on the page, or any other page as may replace that
page on that service, or if the service is no longer offered, or any other
service for displaying LIBOR or comparable rates as may be selected by the
trustee, the rate will be the reference bank rate. The reference bank rate will
be determined on the basis of the rates at which deposits in U.S. Dollars are
offered by the reference banks, which shall be three major banks that are
engaged in transactions in the London interbank market, selected by the
trustee, as of 11:00 A.M., London time, on the day that is two LIBOR business
days prior to the immediately preceding distribution date to prime banks in the
London interbank market for a period of one month in amounts approximately
equal to the aggregate Class Principal Balance of the related certificates. The
trustee will request the principal London office of each of the reference banks
to provide a quotation of its rate. If at least two quotations are provided,
the rate will be the arithmetic mean of the quotations. If on the related date
fewer than two quotations are provided as requested, the rate will be the
arithmetic mean of the rates quoted by one or more major banks in New York
City, selected by the trustee, as of 11:00 A.M., New York City time, on such
date for


                                      S-44
<PAGE>

loans in U.S. Dollars to leading European banks for a period of one month in
amounts approximately equal to the aggregate Class Principal Balance of the
related certificates. If no quotations can be obtained, the rate will be LIBOR
for the prior distribution date. LIBOR business day means any day other than a
Saturday or a Sunday or a day on which banking institutions in the State of New
York or in the city of London, England are required or authorized by law to be
closed. LIBOR for the initial distribution date will equal 6.63%.

DISTRIBUTIONS OF INTEREST

     With respect to each class of certificates entitled to interest, interest
will be passed through monthly on each distribution date, beginning in October
2000. For each distribution date, an amount of interest will accrue on each
class of certificates entitled to interest, generally equal to 1/12th of the
applicable Pass-Through Rate for that class multiplied by the related Class
Principal Balance or Class Notional Amount, as applicable. Interest to be
distributed on the certificates on any distribution date will consist of
accrued and unpaid interest as of previous distribution dates and interest
accrued during the related Interest Accrual Period. All distributions of
interest for each class of certificates will generally be made only to the
extent of the Available Funds for the related loan group or loan groups as
described under "--Priority of Distributions" in this prospectus supplement.

     The Pass-Through Rates for the offered certificates entitled to interest
are listed in the table on page S-4 of this prospectus supplement and in
"Description of the Certificates--Distributions of Interest" in this prospectus
supplement.

     The Class I-P Certificates will not be entitled to receive any
distributions of interest.

     The Class X-I, Class II-A-2, Class X-II, Class III-A-2, Class X-III, Class
XB-1 and Class XB-2 Certificates will accrue interest on the applicable Class
Notional Amount.

     The "CLASS II-A-2 NOTIONAL AMOUNT" with respect to any distribution date
will equal the Class Principal Balance of the Class II-A-1 Certificates.

     The "CLASS III-A-2 NOTIONAL AMOUNT" with respect to any distribution date
will equal the Class Principal Balance of the Class III-A-1 Certificates.

     The "CLASS X-I NOTIONAL AMOUNT" with respect to any distribution date will
equal the product of, (i)  a fraction expressed as a percentage, the numerator
of which is equal to the Adjusted Weighted Average Net Mortgage Rate minus
8.28%, the denominator of which is equal to 8.28% and (ii) the Class Principal
Balance of the Class I-A-1 Certificates.

     The "CLASS X-II PASS-THROUGH RATE" with respect to any distribution date
is 0.16% per annum.

     The "CLASS X-III PASS-THROUGH RATE" with respect to any distribution date
is 0.18% per annum.

     The "CLASS X-II NOTIONAL AMOUNT" with respect to any distribution date
will equal the Class Principal Balance of Class II-A-1 Certificates.

     The "CLASS X-III NOTIONAL AMOUNT" with respect to any distribution date
will equal the Class Principal Balance of Class III-A-1 Certificates.

     The "CLASS XB-1 NOTIONAL AMOUNT" with respect to any distribution date
will equal the Class Principal Balance of the Class B-1 Certificates.

     The "CLASS XB-2 NOTIONAL AMOUNT" with respect to any distribution date
will equal the Class Principal Balance of Class B-2 Certificates.

     The "CLASS II-A-1 PASS-THROUGH RATE" with respect to the initial Interest
Accrual Period is 7.23% per annum, and as to any Interest Accrual Period
thereafter, will be a per annum rate equal to LIBOR plus 0.60% (subject to a
maximum rate equal to the weighted average of the Net Mortgage Rates for the
Group II mortgage loans minus the Class X-II Pass-Through Rate and a minimum
rate of 0.60% per annum).

     The "CLASS II-A-2 PASS-THROUGH RATE" with respect to the initial Interest
Accrual Period is approximately 2.43% per annum, and as to any Interest Accrual
Period thereafter, will be a per annum


                                      S-45
<PAGE>

rate equal to the weighted average of the Net Mortgage Rates for the Group II
mortgage loans minus the sum of LIBOR and 0.76% (subject to a maximum rate of
equal to the weighted average of the Net Mortgage Rates for the Group II
mortgage loans minus the sum of the Class II-A-1 Pass-Through Rate and the
Class X-II Pass-Through Rate and a minimum rate of 0.00% per annum).

     The "CLASS III-A-1 PASS-THROUGH RATE" with respect to the initial Interest
Accrual Period is 7.73% per annum, and as to any Interest Accrual Period
thereafter, will be a per annum rate equal to LIBOR plus 1.10% (subject to a
maximum rate equal to the weighted average of Net Mortgage Rates of the Group
III mortgage loans minus the Class X-III Pass-Through Rate and a minimum rate
of 1.10% per annum).

     The "CLASS III-A-2 PASS-THROUGH RATE" with respect to the initial Interest
Accrual Period is approximately 2.27% per annum, and as to any Interest Accrual
Period thereafter, will be a per annum rate equal to the weighted average of
the Net Mortgage Rates of the Group III mortgage loans minus the sum of LIBOR
and 1.10% (subject to a maximum rate equal to the weighted average of the Net
Mortgage Rates of the Group III mortgage loans minus the sum of  the Class
III-A-1 Pass-Through Rate and the Class X-III Pass-Through Rate and a minimum
rate of 0.00% per annum).

     The "CLASS X-I PASS-THROUGH RATE" with respect to any distribution date
will equal 8.28%.

     The "CLASS A-R PASS-THROUGH RATE" with respect to any distribution date,
and the Class A-R-1, Class A-R-2 and Class A-R-3 Certificates, will equal the
Group II Certificate Interest Rate.

     The "CLASS B-1 PASS-THROUGH RATE" with respect to any distribution date,
will equal, (A) the quotient expressed as a percentage of (a) the sum of (i)
the product of (x) the Adjusted Weighted Average Net Mortgage Rate and (y) the
Subordinate Component Balance (as defined under "--Cross-Collateralization" in
this prospectus supplement) for loan group I immediately before that
distribution date, (ii) the product of (x) the Group II Certificate Interest
Rate (as defined below) and (y) the Subordinate Component Balance for loan
group II immediately before that distribution date, and (iii) the product of
(x) Group III Certificate Interest Rate (as defined below) and (y) the
Subordinate Component Balance for loan group III immediately before that
Distribution Date, divided by (b) the sum of the Subordinate Component Balances
for loan group I, loan group II and loan group III immediately before that
Distribution Date minus (B) the Class XB-1 Pass-Through Rate. The initial Class
B-1 Pass-Through Rate will be approximately 8.25% per annum.

     The "CLASS B-2 PASS-THROUGH RATE" with respect to any distribution date,
will equal, (A) the quotient expressed as a percentage of (a) the sum of (i)
the product of (x) the Adjusted Weighted Average Net Mortgage Rate and (y) the
Subordinate Component Balance (as defined under "--Cross-Collateralization" in
this prospectus supplement) for loan group I immediately before that
distribution date, (ii) the product of (x) the Group II Certificate Interest
Rate and (y) the Subordinate Component Balance for loan group II immediately
before that distribution date, and (iii) the product of (x) Group III
Certificate Interest Rate (as defined below) and (y) the Subordinate Component
Balance for Group III immediately before that distribution date, divided by (b)
the sum of the Subordinate Component Balances for loan group I, loan group II
and loan group III immediately before that Distribution Date minus (B) the
Class XB-2 Pass-Through Rate. The initial Class B-2 Pass-Through Rate will be
approximately 8.75% per annum.

     Class A-S Components. For each Class A-S Component, the component interest
rate used to calculate interest distributions on the Class A-S Certificates
will be as follows: as to loan group I, the Adjusted Weighted Average Net
Mortgage Rate; as to loan group II, the Group II Certificate Interest Rate; and
as to loan group Ill, the Group III Certificate Interest Rate. The pass-through
rate on the Class A-S Certificates will be the weighted average of these
component interest rates, initially approximately 9.79% per annum.

     The "GROUP II CERTIFICATE INTEREST RATE" for any Distribution Date will
equal the weighted average (by principal balance) of the related Net Mortgage
Rate (however for the purpose of this calculation the Net Mortgage Rate shall
not be reduced by the premium payable to the Certificate Insurer) on the Group
II Mortgage Loans as of the second preceding due date (or with respect to the
initial distribution date, as of the cut-off date). The initial Group II
Certificate Interest Rate will be approximately 9.86% per annum.


                                      S-46
<PAGE>

     The "GROUP III CERTIFICATE INTEREST RATE" for any distribution date will
equal the weighted average (by principal balance) of the related Net Mortgage
Rate (however for the purpose of this calculation the Net Mortgage Rate shall
not be reduced by the premium payable to the Certificate Insurer) on the Group
III Mortgage Loans as of the second preceding due date (or with respect to the
initial distribution date, as of the cut-off date). The initial Group III
Certificate Interest Rate will be approximately 10.22% per annum.

     The interest entitlement described above for each interest-bearing class
of Group I certificates will be reduced by Net Interest Shortfalls experienced
by the Group I mortgage loans for that distribution date. Net Interest
Shortfalls on any distribution date will be allocated pro rata among all such
classes of Group I certificates, as well as the related Class A-S Components
and a portion of the Class B Certificates allocable to that loan group, based
on the amount of interest each of those classes of certificates would otherwise
be entitled to receive on that distribution date before taking into account any
reduction in the amounts resulting from Net Interest Shortfalls.

     The interest entitlement described above for each interest-bearing class
of Group II certificates will be reduced by Net Interest Shortfalls experienced
by the Group II mortgage loans for that distribution date. Net Interest
Shortfalls on any distribution date will be allocated pro rata among all such
classes of Group II certificates, as well as the related Class A-S Components
and a portion of the Class B Certificates allocable to that loan group, based
on the amount of interest each of those classes of certificates would otherwise
be entitled to receive on that distribution date before taking into account any
reduction in the amounts resulting from Net Interest Shortfalls.

     The interest entitlement described above for each interest-bearing class
of Group III certificates will be reduced by Net Interest Shortfalls
experienced by the Group III mortgage loans for that distribution date. Net
Interest Shortfalls on any distribution date will be allocated pro rata among
all such classes of Group III certificates, as well as the related Class A-S
Components and a portion of the Class B Certificates allocable to that loan
group, based on the amount of interest each of those classes of certificates
would otherwise be entitled to receive on that distribution date before taking
into account any reduction in the amounts resulting from Net Interest
Shortfalls.

     Accrued interest to be distributed on any distribution date will be
calculated, in the case of each interest-bearing class of certificates, on the
basis of the related Class Principal Balance or notional amount, as applicable,
immediately prior to that distribution date. Interest will be calculated and
payable on the basis of a 360-day year divided into twelve 30-day months with
respect to all the certificates.

CROSS-COLLATERALIZATION

     Cross-Collateralization Due to Rapid Prepayments in One Loan Group.

     On each Distribution Date before the occurrence of the Credit Support
Depletion Date, but after the date on which one or more of the Class Principal
Balance of the Class I-A-1 Certificates, the Class II-A-1 Certificates or the
Class III-A-1 Certificates has been reduced to zero, all principal received or
advanced with respect to the mortgage loans in the loan group or groups
relating to the Class A Certificates that have been paid in full will be paid
as principal (after distributions of principal to the Class I-P Certificates,
if applicable, and to the related Class A-S Component) to the remaining Class A
Certificates of the other certificate group or groups pro rata and to the
Certificate Insurer rather than to the Class B Certificates (such principal and
any amounts due to the Certificate Insurer to be distributed in the same
priority as those Class A Certificates and the Certificate Insurer would
receive other distributions of principal); provided, however, that if there are
two certificate groups with outstanding Class A Certificates and if applicable,
amounts due to the Certificate Insurer, then such principal will be distributed
between those two certificate groups pro rata and any amounts due to the
Certificate Insurer according to the aggregate Class Principal Balance of the
Class A Certificates of those two certificate groups and amounts due to the
Certificate Insurer; provided, further, that principal will not be distributed
as described in this paragraph if on that Distribution Date (a) the Loss
Coverage Percentage (as defined below) for that Distribution Date is greater
than or equal to 200% of the Loss Coverage Percentage as of the Closing Date
and (b) the outstanding principal balance of the mortgage loans in each of loan
group I, loan group II and loan group


                                      S-47
<PAGE>

III delinquent 60 days or more averaged over the last six months, as a
percentage of the related Subordinate Component Balance (as defined below plus
a pro rata portion of the amount of coverage available under the Mortgage Pool
Insurance Policy (allocated in proportion to the respective Subordinate
Component Balances)), is less than 50%.

     The "LOSS COVERAGE PERCENTAGE" as of any date of determination will equal
the aggregate Class Principal Balance of the Class B Certificates plus the
amount of coverage available under the Mortgage Pool Insurance Policy divided
by the then outstanding aggregate Stated Principal Balance (as defined below)
of the group I, group II and group III loans.

     The "SUBORDINATE COMPONENT BALANCE" for loan group I, loan group II or
loan group III as of any date of determination will equal the then outstanding
aggregate Stated Principal Balance of the mortgage loans in that loan group
(less, with respect to loan group I, the applicable Class I-P Fraction of the
Stated Principal Balance of any Class I-P Mortgage Loan) minus the then
outstanding aggregate Class Principal Balance of the related Class A
Certificates and the Component Principal Balance of the related Class A-S
Component.

     Cross-Collateralization Due to Disproportionate Realized Losses in One Loan
     Group.

     Realized losses on the group I, group II and group III loans are allocated
generally to the Class B Certificates and not just to the portion of the Class
B Certificates representing an interest in the loan group that incurred the
loss. Therefore, if realized losses in any loan group that are allocated to the
Class B Certificates exceed the Subordinate Component Balance for that loan
group, the principal balance of the mortgage loans in that loan group will be
less than the principal balance of the related Senior Certificates. That is,
the amount of collateral in that loan group will be less than the amount of
certificates being supported by that collateral and, therefore, that loan group
is undercollateralized. In such a situation, payments on the mortgage loans in
the other loan groups may be used to pay interest and then principal to the
Senior Certificates related to the undercollateralized loan group to the extent
described below. It is also possible that the principal balance of the mortgage
loans in two of these three loan groups will be less than the principal balance
of the related Senior Certificates; in such a situation, payments on the
mortgage loans in the other loan group may be used to pay interest and then
principal to the Senior Certificates related to both undercollateralized loan
groups to the extent described below.

     If, on any Distribution Date, the Class Principal Balance of the Class
I-A-1 Certificates, the Class II-A-1 Certificates or the Class III-A-1
Certificates, together with the Component Principal Balance of the related
Class A-S Component is greater than the aggregate Stated Principal Balance of
the mortgage loans in the related loan group (less with respect to loan Group
I, the applicable Class I-P Fraction of the Stated Principal Balance of any
Class I-P Mortgage Loan) and provided that the Class A Certificates in that
loan group have not been reduced to zero (any such loan group, an
"UNDERCOLLATERALIZED GROUP" and each other loan group that is not an
Undercollateralized Group, an "OVERCOLLATERALIZED GROUP"), then the priority of
distributions described in this prospectus supplement under "--Priority of
Distributions" will be altered.

     On any such Distribution Date, the Available Funds for the
Overcollateralized Group or Groups, to the extent remaining following
distributions of interest and principal to the related Senior Certificates and
any amounts due the Certificate Insurer pursuant to paragraphs (I), (II) or
(III), as applicable (or if after the Credit Support Depletion Date, pursuant
to the paragraph immediately following paragraph (IV)) under "--Priority of
Distributions" in this prospectus supplement, will be paid in the following
priority: (1) first, such amount, up to an amount for each Undercollateralized
Group (the "TOTAL TRANSFER AMOUNT") equal to the sum of the Interest Transfer
Amount and the Principal Transfer Amount for each such Undercollateralized
Group, pro rata according to the Total Transfer Amount for each
Undercollateralized Group, will be distributed first to the Class A
Certificates related to each such Undercollateralized Group in payment of
accrued but unpaid interest, if any, second to the Class A Certificates related
to each such Undercollateralized Group as principal, in the same order and
priority as they would receive other distributions of principal; and third to
any amounts due the Certificate Insurer and (2) second, any remaining amount
will be distributed pursuant to paragraph (IV) under "--Priority of
Distributions" herein.


                                      S-48
<PAGE>

     On each Distribution Date, the "INTEREST TRANSFER AMOUNT" for each
Undercollateralized Group will equal one month's interest on the applicable
Principal Transfer Amount at the Adjusted Weighted Average Net Mortgage Rate if
the Undercollateralized Group is loan group I, at the Group II Certificate
Interest Rate if the Undercollateralized Group is loan group II and at the
Group III Certificate Interest Rate if the Undercollateralized Group is loan
group III, plus any shortfall of interest remaining unpaid on the Senior
Certificates of the Undercollateralized Group from prior Distribution Dates
plus any amounts due to the Certificate Insurer.

     On each Distribution Date, the "PRINCIPAL TRANSFER AMOUNT" for each
Undercollateralized Group will equal the excess, if any, of the aggregate Class
Principal Balance of the Class A Certificates related to that
Undercollateralized Group together with the Component Principal Balance of the
related Class A-S Component over the aggregate Stated Principal Balance of the
mortgage loans in that loan group (less with respect to loan group I, the
applicable Class I-P Fraction of the Stated Principal Balance of any Class I-P
Mortgage Loan).

     In the event that the certificate interest rate associated with an
Undercollateralized Group is greater than the certificate interest rate
associated with an Overcollateralized Group that will pay interest to the
Senior Certificates related to the Undercollateralized Group plus any amounts
due to the Certificate Insurer, this payment may cause a shortfall in the
amount of principal and interest otherwise distributable to the Class B
Certificates. In addition, after the aggregate principal balance of the Class B
Certificates has been reduced to zero, this may cause a shortfall of principal
that would be allocated to the Class A Certificates of the Undercollateralized
Group.


DISTRIBUTIONS OF PRINCIPAL

     On each distribution date, certificateholders of each certificate group
will be entitled to receive principal distributions from the related Available
Funds to the extent and in the priority described in this prospectus
supplement. See "--Priority of Distributions" in this prospectus supplement.
The Group I, Group II and Group III Certificates will receive principal
collected from the Group I, Group II and Group III mortgage loans,
respectively, except in the limited circumstances described in this prospectus
supplement under "--Cross-Collateralization." The Class A-S Certificates and
the Class B Certificates will receive principal collected from all three loan
groups.

     Senior Principal Distribution Amount. On each distribution date for each
loan group, to the extent of the related Available Funds for that distribution
date, up to the amount of the related Senior Principal Distribution Amount less
the related Class A-S Component Principal Distribution Amount for that
distribution date, but subject to increase or decrease to reflect any Class A-S
Crossover Amount and to conform to the provisions described below under
"--Cross-Collateralization," will be distributed as principal to the related
classes of senior certificates in the following order of priority:

     (I)    with respect to Group I, to the Class I-A-1 Certificates, until the
            Class Principal Balance of that class has been reduced to zero;

     (II)   with respect to Group II,

            o   first, concurrently on a pro rata basis to the Class A-R-1,
                Class A-R-2 and Class A-R-3 Certificate until those Class
                Principal Balances have been reduced to zero;

            o   second, to the Class II-A-1 Certificates, until the Class
                Principal Balance of that class has been reduced to zero; and

     (III)  with respect to Group III, to the Class III-A-1 Certificates, until
            the Class Principal Balance of that class has been reduced to zero.

     Notwithstanding the foregoing, on each distribution date on and after the
Credit Support Depletion Date, the Senior Principal Distribution Amount for
each group will be distributed, concurrently, as principal of the classes of
related senior certificates (other than the Class I-P Certificates) pro rata,
in accordance with their respective Class Principal Balances immediately prior
to such distribution date.


                                      S-49
<PAGE>

     Class I-P Principal Distribution Amount. On each distribution date, the
Class I-P Certificates will receive the Class I-P Principal Distribution Amount
for that distribution date, from the Available Funds of loan group I. The Class
I-P Principal Distribution Amount will be paid in the priority set forth above
under "--Priority of Distributions Among Certificates."

     Subordinate Principal Distribution Amount. On each distribution date, an
amount, up to the amount of the Subordinate Principal Distribution Amount for
that distribution date, will be distributed as principal to the Class B
Certificates. On each Distribution Date, each class of the Class B Certificates
will be entitled to receive its pro rata (by Class Principal Balance) share of
the Subordinate Principal Distribution Amount, to the extent of the Available
Funds for Group I, Group II and Group III remaining after distributions of
interest and principal to the Group I, Group II and Group III senior
certificates and Class A-S Certificates (including any distributions of
interest and principal to those senior certificates as described under
"--Cross-Collateralization" in this prospectus supplement) and with respect to
the Class B-2 Certificates, that distributions of interest and principal to the
Class B-1 Certificates has been made. See "--Priority of Distributions" in this
prospectus supplement.

     The rights of the holders of the Class B Certificates to receive
distributions of interest and principal are subordinated to the rights of the
holders of the Group I, Group II and Group III senior certificates and the
Class A-S Certificates to receive all distributions of interest and principal
to which they are entitled and to the rights of the Certificate Insurer to
receive amounts due to it. See "--Subordination and Allocation of Losses" in
this prospectus supplement.


SUBORDINATION AND ALLOCATION OF LOSSES

 Class A-S Certificates

     The Class A-S Certificates will be subordinate to the Senior Certificates
and the Class B Certificates, but solely with respect to Special Hazard Losses
and Bankruptcy Losses that are not Excess Losses. No other element of credit
enhancement relating to the certificates will provide coverage with respect to
these types of losses.

     The subordination provided by the Class A-S Certificates is intended to
provide holders of senior certificates and the Class B certificates protection
against Special Hazard Losses and Bankruptcy Losses in an amount which will be
reduced, from time to time, to an amount equal on any distribution date to the
sum of:

A)  the "Special Hazard Loss Coverage Amount," which is the lesser of:

     (a) the greatest of:

         o  1% of the aggregate of the principal balances of the mortgage loans,


         o  twice the principal balance of the largest mortgage loan, and

         o  the aggregate principal balance of the mortgage loans secured by
            mortgaged properties located in the single California postal zip
            code area having the highest aggregate principal balance of any such
            zip code area, and

     (b) the Special Hazard Loss Coverage Amount from the immediately preceding
         distribution date, less the amount, if any, of Special Hazard Losses
         allocated to the Class A-S Certificates since the immediately preceding
         distribution date.

B)  the "Bankruptcy Loss Coverage Amount," which is the lesser of:

     (a) $100,000, subject to a reduction as set forth in the pooling and
         servicing agreement, and

     (b) the Bankruptcy Loss Coverage Amount from the immediately preceding
         distribution date, less the amount, if any, of Bankruptcy Losses
         allocated to the Class A-S Certificates since the immediately preceding
         distribution date.

The sum of (A) and B) above on any Distribution Date, after application of any
Special Hazard Losses and Bankruptcy Losses for such Distribution Date, is
referred to in the "Target Class A-S Balance".


                                      S-50
<PAGE>

All principal balances for the purpose of this definition will be calculated as
of the first day of the month preceding that distribution date after giving
effect to scheduled installments of principal and interest on the mortgage
loans then due, whether or not paid.

  Class B Certificates

     The Class B Certificates will be subordinate in right of payment to and
provide credit support to the Senior Certificates and the Class A-S
Certificates, to the extent described in this prospectus supplement. The Class
B Certificates will be subordinate to the Senior Certificates and the Class A-S
Certificates, with respect to Realized Losses that (i) are not Fraud Losses,
and (ii) are not Special Hazard Losses or Bankruptcy Losses. As defined in this
prospectus supplement, Realized Losses do not include losses that are covered
by the Mortgage Pool Insurance Policy. The support provided by the Class B
Certificates is intended to enhance the likelihood of regular receipt by the
senior certificates and the Class A-S Certificate of the full amount of the
monthly distributions of interest and principal to which they are entitled and
to afford the senior certificates and the Class A-S Certificate protection
against certain losses. The protection afforded to the senior certificates and
the Class A-S Certificates by the Class B Certificates will be accomplished by
the preferential right on each distribution date of the senior certificates and
the Class A-S Certificate to receive distributions of interest and principal to
which they are entitled before distributions of interest and principal to the
Class B Certificates and by the allocation of losses of the types covered by
the Class B Certificates to those Certificates prior to any allocation of
losses to the senior certificates or the Class A-S Certificates.

     In addition, the Class XB-2 Certificates will be subordinate in right of
payment to and provide credit support to the Class B-2, Class XB-1 and Class
B-1 Certificates with respect to the portion of Realized Losses allocable to
interest. The Class B-2 Certificates will be subordinate in right of payment to
and provide credit support to the Class XB-1 Certificates and Class B-1
Certificates. The Class XB-1 Certificates will be subordinate in right of
payment to and provide credit support to the Class B-1 Certificates with
respect to the portion of Realized Losses allocable to interest. The protection
afforded the Class B Certificates and Class XB Certificates by certain of the
other Class B Certificates and Class XB Certificates will be similarly
accomplished by the preferential right of those certificates to receive
distributions of interest and principal before distributions of interest and
principal to the other certificates.

  Special Rules for Losses on Class I-P Mortgage Loans

     On each distribution date, the applicable Class I-P Fraction of any
Realized Loss on a Class I-P Mortgage Loan will be allocated to the Class I-P
Certificates until the Class Principal Balance of that class is reduced to
zero. If the Realized Loss was a Special Hazard Loss or a Bankruptcy Loss that
was not an Excess Loss, then, to the extent that funds are available on that
distribution date or any future distribution date from amounts that would
otherwise be allocable to the Class A-S Principal Distribution Amount for
distribution on the Class A-S Certificates, a Class I-P Deferred Amount will be
paid on the Class I-P Certificates prior to distributions on the Class A-S
Certificates. If the Realized Loss was not a Special Hazard Loss, a Bankruptcy
Loss or a Fraud Loss and the Class B Certificates remain outstanding, then, to
the extent that funds are available on that distribution date or any future
distribution date from amounts that would otherwise be allocable to the
Subordinate Principal Distribution Amount for distribution on the Class B
Certificates, a Class I-P Deferred Amount will be paid on the Class I-P
Certificates prior to distributions on the Class B Certificates. See
"--Priority of Distributions" in this prospectus supplement. Any distribution
relating to unpaid Class I-P Deferred Amounts will not further reduce the Class
Principal Balance of the Class I-P Certificates. The Class I-P Deferred Amounts
will not bear interest. For Class I-P Deferred Amounts that are attributable to
a Special Hazard Loss or a Bankruptcy Loss, the Class Principal Balance of the
Class A-S Certificates will be reduced by the amount of any payments in respect
of those Class I-P Deferred Amounts. After the Class Principal Balance of the
Class A-S Certificates is reduced to zero, no new Class I-P Deferred Amounts
will be created for these types of losses. For Class I-P Deferred Amounts that
are attributable to a Realized Loss that was not a Special Hazard Loss, a
Bankruptcy Loss or a Fraud Loss, the Class Principal Balance of the class of
Class B Certificates then outstanding with the highest numerical class
designation will be reduced by the


                                      S-51
<PAGE>

amount of any payments in respect of those Class I-P Deferred Amounts. After
the Credit Support Depletion Date, no new Class I-P Deferred Amounts will be
created for these types of losses.

  Loss Allocation Procedures

     On each distribution date, any Realized Loss other than any Special Hazard
Loss, Bankruptcy Loss or Fraud Loss incurred on a mortgage loan, and other than
the Class I-P Fraction of the Realized Loss if a Class I-P Mortgage Loan, will
be allocated in the following order:

     o   first, to the Class B-2 Certificates, until the Class Principal Balance
         of that class of certificates has been reduced to zero;

     o   second, to the Class B-1 Certificates, until the Class Principal
         Balance of that class of certificates has been reduced to zero; and

     o   third, to the Class A Certificates and the Class A-S Component related
         to the loan group of the loan for which the Realized Loss occurred, pro
         rata, based on their respective Class Principal Balances or Component
         Principal Balance, until their Class Principal Balances or Component
         Principal Balance have been reduced to zero.

     On each distribution date, any Special Hazard Loss or Bankruptcy Loss that
was not an Excess Loss, other than the Class I-P Fraction of the Realized Loss
if a Class I-P Mortgage Loan, will be allocated in the following order:

     o   first, to Class A-S Component related to the loan group of the loan for
         which the Realized Loss occurred, until its Component Principal Balance
         has been reduced to zero;

     o   second, to the other Class A-S Components, in proportion to their
         respective Component Principal Balances, until their Component
         Principal Balances have been reduced to zero; and

     o   third, to the Class A Certificates related to that loan group and to
         the Class B Certificates, pro rata, based on their respective Class
         Principal Balances or Component Principal Balance. For this purpose,
         the pro rata share allocable to any class of Class B Certificates will
         be proportionate to the Class Principal Balance of that class times a
         fraction, the numerator of which is the Subordinate Principal Balance
         for the related loan group, and the denominator of which the aggregate
         of the Subordinate Principal Components.

     On each distribution date, any Excess Losses, other than the Class I-P
Fraction of the Realized Loss if a Class I-P Mortgage Loan, will be allocated
to the Class A Certificates and Class A-S Component related to that loan group
and to the Class B Certificates, pro rata, based on their respective Class
Principal Balances or Component Principal Balance. For this purpose, the pro
rata share allocable to any class of Class B Certificates will be proportionate
to the Class Principal Balance of that class times a fraction, the numerator of
which is the Subordinate Principal Balance for the related loan group, and the
denominator of which the aggregate of the Subordinate Principal Components.

     With respect to any Realized Loss or portion of a Realized Loss that is
allocated to the Class A Certificates under the provisions described in this
section, (I) if such a loss occurs in an Overcollateralized Group and there is
a single Undercollateralized Group, the senior certificates related to the
Undercollateralized Group will receive a portion of the loss (equal to a
fraction, the numerator of which is the Subordinate Component Balance of the
Overcollateralized Group that suffered the loss and the denominator of which is
the aggregate Stated Principal Balance of the mortgage loans in that
Overcollateralized Group less the applicable Class I-P Fraction of the Stated
Principal Balance of any Class I-P Mortgage Loan in that Overcollateralized
Group) and the remainder will be allocated to the senior certificates related
to the loan group that suffered the loss; and (II) if such a loss occurs in an
Overcollateralized Group and there are two Undercollateralized Groups, the
senior certificates related to each Undercollateralized Group will receive a
portion of the loss (equal to the same fraction as above, multiplied by a
second fraction, the numerator of which is that Undercollateralized Group's
Principal Transfer Amount and the denominator of which is the sum of each
Undercollateralized Group's Principal Transfer Amount) and the remainder will
be allocated to the senior certificates related to the loan group that suffered
the loss.


                                      S-52
<PAGE>

     On each Distribution Date, if the aggregate Class Principal Balance of all
outstanding certificates exceeds the aggregate Stated Principal Balance of the
mortgage loans (after giving effect to distributions of principal and the
allocation of all losses to the certificates on that Distribution Date), that
excess will be deemed a principal loss and will be allocated to the most junior
class of Class B Certificates then outstanding.

     Investors in the senior certificates should be aware that because the
Class B Certificates represent interests in all three loan groups, the Class
Principal Balances of the Class B Certificates could be reduced to zero as a
result of a disproportionate amount of losses on the mortgage loans in one or
more of the loan groups. Therefore, the allocation to the Class B Certificates
of losses on the mortgage loans in other loan groups will increase the
likelihood that future losses may be allocated to the senior certificates.
Moreover, after the Credit Support Depletion Date, a portion of losses in a
loan group that is overcollateralized will be allocated to the senior
certificates relating to loan groups that are undercollateralized.

     Investors in the senior certificates should be aware that the applicable
coverage for Special Hazard Losses, Fraud Losses and Bankruptcy Losses cover
mortgage loans in all three loan groups. Therefore, in the event mortgage loans
in one or more of these loan groups suffer a high level of such losses, it will
reduce the available coverage for the senior certificates in the other loan
groups and may cause senior certificates relating to the other loan groups to
suffer losses in the event mortgage loans in any loan group suffer such losses
after the available coverage has been exhausted.

THE TRUSTEE

     The Chase Manhattan Bank will be the trustee under the pooling and
servicing agreement. The depositor and the servicer may maintain other banking
relationships in the ordinary course of business with the trustee and its
affiliates. Offered certificates may be surrendered at the corporate trust
office of the trustee located at Fiduciary Services, 450 West 33rd Street, 14th
Floor, New York, New York 10001-2697, Attention: Capital Markets Fiduciary
Services Administration: DLJ 2000-S4 or at other addresses as the trustee may
designate from time to time.

OPTIONAL TERMINATION

     The depositor will have the right to repurchase all remaining mortgage
loans and REO Properties and effect early retirement of the certificates,
subject to the sum of the aggregate Stated Principal Balance of those mortgage
loans and the appraised value of the REO Properties at the time of repurchase
being less than 5% of the sum of the aggregate Stated Principal Balance of the
mortgage loans as of the cut-off date. In the event the depositor exercises
that option, the purchase price distributed for each certificate will be 100%
of its then outstanding principal balance plus any Class I-P Deferred Amounts
in the case of the Class I-P Certificates, if any, and, in the case of an
interest-bearing certificate, any unpaid accrued interest on that Class
Principal Balance or notional amount, as applicable, at the applicable
pass-through rate, subject to reduction as provided in the pooling and
servicing agreement if the purchase price is based in part on the appraised
value of any REO Properties and that appraised value is less than the Stated
Principal Balance of the related mortgage loans. All amounts due to the
Certificate Insurer shall also be paid as part of any such purchase and
distributed to the Certificate Insurer. Distributions on the certificates
relating to any optional termination will first be paid to the senior
certificates and then to the subordinate certificates. The proceeds from that
distribution may not be sufficient to distribute the full amount to which each
class of certificates is entitled.

RESTRICTIONS ON TRANSFER OF THE CLASS A-R CERTIFICATES

     The Class A-R-1 Certificates, Class A-R-2 Certificates and Class A-R-3
Certificates will be subject to the restrictions on transfer described in the
prospectus under "Material Federal Income Tax Consequences--REMICs--Taxation of
Owners of REMIC Residual Certificates--Tax and Restrictions on Transfers of
REMIC Residual Certificates to Specific Organizations." The pooling and
servicing agreement provides that the Class A-R Certificates, in addition to
other classes of certificates, may not be acquired by a Plan or with assets of
such a Plan. See "ERISA Considerations" in this prospectus supplement. Each
Class A-R Certificate will contain a legend describing the foregoing
restrictions.


                                      S-53
<PAGE>

                 YIELD, PREPAYMENT AND MATURITY CONSIDERATIONS

     The effective yields to the holders of the interest-bearing certificates
will be lower than the yields otherwise produced by the applicable rate at
which interest is passed through to the holders and the purchase price of these
certificates because monthly distributions will not be payable to the holders
of the certificates until the 25th day or, if the 25th day is not a business
day, the following business day, of the month following the month in which
interest accrues on the mortgage loans without any additional distribution of
interest or earnings on the certificates relating to that delay.

     Delinquencies on the mortgage loans which are not advanced by or on behalf
of a servicer because amounts, if advanced, would be nonrecoverable, will
adversely affect the yield on the related certificates. Because of the priority
of distributions, shortfalls resulting from delinquencies not so advanced will
be borne first by the Class B Certificates and Class XB Certificates with
respect to interest in the reverse order of their numerical class designations,
and then by the related senior certificates. If, as a result of those
shortfalls, the aggregate of the Class Principal Balances of the related
certificates exceeds the aggregate Stated Principal Balances of the related
mortgage loans, the Class Principal Balance of the subordinate certificates
then outstanding with the highest numerical class designation will be reduced
by the amount of that excess.

     The likelihood that mortgage loans will become delinquent and the rate of
any subsequent foreclosures may be affected by a number of factors related to
the mortgagor's personal circumstances, including unemployment or change in
employment, or, in the case of self-employed mortgagors relying on commission
income, fluctuations in income, marital separation, a mortgagor's equity in the
related mortgaged property and the forms of the related first lien. In
addition, delinquency and foreclosure experience may be sensitive to adverse
economic conditions, either nationally or regionally, may exhibit seasonal
variations and may be influenced by the level of interest rates as they affect
real estate sales activity. Regional economic conditions, including declining
real estate values, may particularly affect delinquency and foreclosure
experience on the mortgage loans to the extent that the related mortgaged
properties are concentrated in one or more geographic areas.

     Net Interest Shortfalls will adversely affect the yields on the offered
certificates to which they relate. In addition, Excess Losses on the mortgage
loans will be borne by all classes of certificates on a pro rata basis.
Moreover, since the Subordinate Principal Distribution Amount for the Class B
Certificates for each distribution date will be reduced by the amount of any
distributions on that distribution date relating to Class I-P Deferred Amounts,
the amount distributable as principal on each of those distribution dates to
each class of Class B Certificates will be less than it otherwise would be in
the absence of those Class I-P Deferred Amounts. As a result, the yields on the
certificates will depend on the rate and timing of Realized Losses, including
Excess Losses. Excess Losses could occur at a time when one or more classes of
Class B Certificates are still outstanding and otherwise available to absorb
other types of Realized Losses. See "Description of the
Certificates--Allocation of Losses" in this prospectus supplement.

PREPAYMENT CONSIDERATIONS AND RISKS

     Distributions to the Group I certificates relate to payments on the Group
I mortgage loans. Distributions to the Group II certificates relate to payments
on the Group II mortgage loans. Distribution on the Group III Certificates
relate to the Group III mortgage loans. The rate of principal payments on the
Group I certificates, the aggregate amount of distributions on the Group I
certificates and the yields to maturity of the Group I certificates will be
related to the timing and amount of principal distributions on the Group I
mortgage loans. The rate of principal payments on the Group II certificates,
the aggregate amount of distributions on these certificates and the yields to
maturity of these certificates will be related to the rate and timing of
payments of principal on the Group II mortgage loans. The rate of principal
payments on the Group III certificates, the aggregate amount of distributions
on these certificates and the yields to maturity of these certificates will be
related to the rate and timing of payments of principal on the Group III
mortgage loans. The rate of principal payments on mortgage loans will be
affected by the amortization schedules of the mortgage loans and by the rate of
principal prepayments, including for this purpose prepayments resulting from
refinancing, liquidations of the mortgage loans due to defaults, casualties,
condemnations and repurchases by the seller. The mortgage loans may be prepaid
by the


                                      S-54
<PAGE>

mortgagors at any time but, in the case of approximately 6.44%, 0.98% and 4.82%
of the Group I mortgage loans, Group II mortgage loans and Group III mortgage
loans, respectively, the loans impose penalties for certain prepayments during
a specified period occurring during the first one to five years after
origination. Due to such prepayment penalties on certain of the mortgage loans,
the rate of prepayment may be slower than otherwise would be the case,
particularly in a declining interest rate environment. The mortgage loans are
subject to "due-on-sale" provisions. However, the servicer may choose not to
accelerate a mortgage loan on the conveyance of the related mortgaged property
if the servicer would make a similar decision for a comparable mortgage loan
held for its own account. See "The Mortgage Loans" in this prospectus
supplement.

     Prepayments, liquidations and purchases of the mortgage loans, including
any optional purchase by the servicer of a defaulted mortgage loan as described
in this prospectus supplement, will result in distributions on the related
offered certificates of principal amounts which would otherwise be distributed
over the remaining terms of the mortgage loans. Since the rate of payment of
principal on the mortgage loans will depend on future events and a variety of
other factors, no assurance can be given as to that rate or the rate of
principal prepayments. The extent to which the yield to maturity of a class of
offered certificates may vary from the anticipated yield will depend on the
degree to which that offered certificate is purchased at a discount or premium,
and the degree to which the timing of payments on that offered certificate is
sensitive to prepayments, liquidations and purchases of the related mortgage
loans. Further, an investor should consider the risk that, in the case of the
Class I-P Certificates and any other offered certificate purchased at a
discount, a slower than anticipated rate of principal payments, including
prepayments, on the related mortgage loans could result in an actual yield to
that investor that is lower than the anticipated yield. In the case of the
Class X-I, Class II-A-2, Class X-II, Class III-A-2, Class X-III, Class XB-1 and
Class XB-2 Certificates and any other offered certificate purchased at a
premium, a faster than anticipated rate of principal payments on the related
mortgage loans could result in an actual yield to that investor that is lower
than the anticipated yield. Investors in the Class X-I, Class II-A-2, Class
X-II, Class III-A-2, Class X-III, Class XB-1 and Class XB-2 Certificates should
carefully consider the risk that a rapid rate of principal prepayments on the
Premium Rate Mortgage Loans could result in the failure of those investors to
recover their initial investments.

RATE OF PAYMENTS

     The rate of principal payments, including prepayments, on pools of
mortgage loans may vary significantly over time and may be influenced by a
variety of economic, geographic, social and other factors, including changes in
mortgagors' housing needs, job transfers, unemployment, mortgagors' net equity
in the mortgaged properties and servicing decisions, including the decision
whether or not to exercise its rights under any "due-on-sale" clause. In
general, if prevailing interest rates were to fall significantly below the
mortgage rates on the mortgage loans, the mortgage loans could be subject to
higher prepayment rates than if prevailing interest rates were to remain at or
above the mortgage rates on the mortgage loans. On the other hand, if
prevailing interest rates were to rise significantly, the rate of prepayments
on the mortgage loans would, in most cases, be expected to decrease. No
assurances can be given as to the rate of prepayments on the mortgage loans.

     As described in this prospectus supplement under "Description of the
Certificates--Distributions of Principal," the Senior Prepayment Percentage of
the Principal Prepayment Amount (exclusive of the portion attributable to the
Class I-P Principal Distribution Amount) will be initially distributed to the
related senior certificates (other than the Class I-P Certificates). This may
result in all, or a disproportionate percentage of those principal prepayments
being distributed to holders of the senior certificates and none, or less than
their pro rata share, of those principal prepayments being distributed to
holders of the Class B Certificates during the periods of time described in the
definition of Senior Prepayment Percentage.

     The timing of changes in the rate of prepayments on the mortgage loans may
significantly affect an investor's actual yield to maturity, even if the
average rate of principal payments is consistent with an investor's
expectation. In general, the earlier a prepayment of principal on the mortgage
loans, the greater the effect on an investor's yield to maturity. The effect on
an investor's yield as a result of principal


                                      S-55
<PAGE>

payments occurring at a rate higher (or lower) than the rate anticipated by the
investor during the period immediately following the issuance of the offered
certificates may not be offset by a subsequent like decrease (or increase) in
the rate of principal payments.

STRUCTURING ASSUMPTIONS

     Unless otherwise specified, the information in the tables in this
prospectus supplement has been prepared on the basis of the following assumed
characteristics of the mortgage loans and the following additional assumptions:


    o the mortgage loans have the following assumed characteristics:




<TABLE>
<CAPTION>
                                                                                   AMORTIZED         ORIGINAL
                      UNPAID                                                    REMAINING TERM       TERM TO
                     PRINCIPAL                               NET MORTGAGE         TO MATURITY        MATURITY      BALLOON
GROUP                 BALANCE           MORTGAGE RATE            RATE             (IN MONTHS)      (IN MONTHS)     PAYMENT
-------------   ------------------   ------------------   ------------------   ----------------   -------------   --------
<S>             <C>                  <C>                  <C>                  <C>                <C>             <C>
I ...........    $  1,266,016.46         9.4662036884%        7.9812036884%    354                357             177
                 $  7,967,283.80         9.2467117127%        7.7617117127%    175                178
                 $ 38,737,144.65        11.5215084567%        9.7753464281%    353                356             177
                 $ 56,077,555.67        11.3488959434%        9.6342267411%    174                177
II ..........    $ 37,376,863.42        11.4768915272%        9.9918915272%    352                355             177
                 $ 27,007,251.43        11.1692642062%        9.6842642062%    175                178
III .........    $ 28,562,249.34        12.4209365441%       10.1859365441%    353                356             177
                 $ 14,703,848.68        12.5281277998%       10.2931277998%    175                179
</TABLE>

     o   all the mortgage loans in each loan group prepay at the specified
         percentage of the prepayment assumption described in the following
         paragraph,

     o   no defaults in the payment by the mortgagor of principal of and
         interest on the mortgage loans are experienced,

     o   the provisions relating to Class A-S Carryover Amounts and the
         provisions described in "Description of the
         Certificates--Cross-Collateralization" are disregarded,

     o   scheduled payments on the mortgage loans are received on the first day
         of each month commencing in the calendar month following the closing
         date and are computed prior to giving effect to prepayments received on
         the last day of the prior month,

     o   prepayments are allocated as described in this prospectus supplement
         without giving effect to loss and delinquency tests,

     o   there are no Net Interest Shortfalls and prepayments represent
         prepayments in full of the mortgage loans and are received on the last
         day of each month, commencing in the calendar month of the closing
         date,

     o   the scheduled monthly payment for each mortgage loan has been
         calculated based on the assumed mortgage loan characteristics described
         in the table above so that the mortgage loans will amortize in amounts
         sufficient to repay the principal balances of those assumed mortgage
         loans by its respective amortized remaining term to maturity,

     o   the initial Class Principal Balance or notional amount, as applicable,
         of each class of certificates is as listed under "Summary Information"
         in this prospectus supplement,

     o   interest accrues on each interest-bearing class of certificates at the
         applicable interest rate listed or described under "Summary
         Information" in this prospectus supplement,

     o   distributions are received on the 25th day, in the case of the
         certificates, of each month commencing in the calendar month following
         the assumed closing date,

     o   the Special Hazard Loss Coverage Amount is at all times calculated
         solely by reference to the first bullet point under clause (a) of its
         definition,


                                      S-56
<PAGE>

     o   the closing date of the sale of the offered certificates is September
         28, 2000,

     o   none of the sellers or the underlying seller, as applicable, are
         required to repurchase or substitute for any mortgage loan, and

     o   the Class A-S Certificates pay to a Class Principal Balance equal to 1%
         of the mortgage loans.

While it is assumed that each mortgage loan prepays at the specified percentage
of the prepayment assumption, this is not likely to be the case. Moreover,
discrepancies will exist between the characteristics of the actual mortgage
loans and characteristics of the mortgage loans assumed in preparing the tables
in this prospectus supplement.

     Prepayments of mortgage loans commonly are measured relative to a
prepayment standard or model. The prepayment model used in this prospectus
supplement the ("Basic Prepayment Assumption" or "BPA") represents an assumed
rate of prepayment each month relative to the then outstanding principal
balance of a pool of mortgage loans. For the Group I certificates and Group III
certificates, a 100% prepayment assumption assumes (i) a per annum prepayment
rate of 6% of the then outstanding principal balance of the Group I mortgage
loans and Group III mortgage loans in the first month of the life of the
mortgage loans, (ii) an additional 14/11% per annum in each month thereafter
through the eleventh month and (iii) a constant prepayment rate of 20% per
annum beginning in the twelfth month and in each month thereafter during the
life of the mortgage loans. For the Group II certificates, a 100% prepayment
assumption assumes (i) a per annum prepayment rate of 6% of the then
outstanding principal balance of the Group II mortgage loans in the first month
of the life of the mortgage loans, (ii) an additional 24/11% per annum in each
month thereafter through the eleventh month and (iii) a constant prepayment
rate of 30% per annum beginning in the twelfth month and in each month
thereafter during the life of the mortgage loans.

     The sensitivity tables below indicate the sensitivity of the pre-tax
corporate bond equivalent yields to maturity of particular classes of
certificates to various percentages of the prepayment assumption. The yields
listed in the tables were calculated by determining the monthly discount rates
that, when applied to the assumed stream of cash flows to be paid on the
applicable class of certificates, would cause the discounted present value of
that assumed stream of cash flows to equal the assumed purchase price of those
classes and converting those monthly rates to corporate bond equivalent rates.
Those calculations do not take into account variations that may occur in the
interest rates at which investors may be able to reinvest funds received by
them as distributions on particular classes of certificates and consequently do
not purport to reflect the return on any investment in that class of
certificates when those reinvestment rates are considered.

SENSITIVITY OF THE CLASS II-A-2 AND CLASS III-A-2 CERTIFICATES

     The yield to investors on the Class II-A-2 Certificates and Class III-A-2
Certificates will be sensitive, to fluctuations in the level of LIBOR. The
Pass-Through Rates on the Inverse Floater Certificates will vary inversely with
LIBOR. The Pass-Through Rates on the Class II-A-2 Certificates and Class
III-A-2 Certificates are subject to maximum and minimum Pass-Through Rates, and
are therefore subject to limitation despite changes in LIBOR in certain
circumstances. Changes in the level of LIBOR may not correlate with changes in
prevailing mortgage interest rates or changes in other indices. It is possible
that lower prevailing mortgage interest rates, which might be expected to
result in faster prepayments, could occur concurrently with an increased level
of LIBOR. Investors in the Class II-A-2 Certificates and Class III-A-2
Certificates should also fully consider the effect on the yields on such
Certificates of changes in the level of LIBOR.

     To illustrate the significance of changes in the level of LIBOR and
prepayments on the yield to maturity on the Class II-A-2 Certificates and Class
III-A-2 Certificates, the following tables indicate the approximate pre-tax
yields to maturity on a corporate bond equivalent basis under the different
constant percentages of BPA and varying levels of LIBOR indicated. Because the
rate of distribution of principal on the certificates will be related to the
actual amortization (including prepayments) of the Group II mortgage loans,
with respect to the Class II-A-2 Certificates and the Group III mortgage loans
with respect to the Class III-A-2 Certificates which will include mortgage
loans that have remaining terms to


                                      S-57
<PAGE>

maturity shorter or longer than assumed and mortgage rates higher or lower than
assumed, the pre-tax yields to maturity on the Class II-A-2 Certificates and
Class III-A-2 Certificates are likely to differ from those shown in the
following tables, even if all the related mortgage loans prepay at constant
percentages of BPA and the level of LIBOR, the weighted average remaining term
to maturity and the weighted average mortgage rate of the related mortgage
loans are as assumed. Any differences between such assumptions and the actual
characteristics and performance of the related mortgage loans and of the
certificates may result in yields being different from those shown in such
tables. Discrepancies between assumed and actual characteristics and
performance underscore the hypothetical nature of the tables, which are
provided only to give a general sense of the sensitivity of yields in varying
prepayment scenarios and different levels of LIBOR. In addition, it is highly
unlikely that the related mortgage loans will prepay at a constant level of BPA
until maturity, that all of the related mortgage loans will prepay at the same
rate, or that the level of LIBOR will remain constant. The timing of changes in
the rate of prepayments may significantly affect the actual yield to maturity
to an investor, even if the average rate of principal prepayments is consistent
with an investor's expectation. In general, the earlier the payment of
principal of the related mortgage loans, the greater the effect on an
investor's yield to maturity. As a result, the effect on an investor's yield of
principal prepayments occurring at a rate higher (or lower) than the rate
anticipated by the investor during the period immediately following the
issuance of the certificates will not be equally offset by a subsequent like
reduction (or increase) in the rate of principal prepayments.


     The tables set forth below are based on the structuring assumptions
(including the assumptions regarding the characteristics and performance of the
related mortgage loans and the certificates, which may differ from the actual
characteristics and performance thereof), and assuming further that (i) on each
LIBOR rate adjustment date, LIBOR will be at the level shown, (ii) the
aggregate purchase prices of the Class II-A-2 Certificates and Class III-A-2
Certificates expressed as a percentage of the related initial notional amount
are 2.75% and 2.75%, respectively, not including accrued interest, accrued
interest has been added to that price in calculating the yield shown in the
table below, and (iii) the initial Pass-Through Rates on the Class II-A-2
Certificates and Class III-A-2 Certificates are set forth in "Description of
the Certificates--Interest Distributions" in this prospectus supplement. There
can be no assurance that the related mortgage loans will have the assumed
characteristics, will prepay at any of the rates shown in the tables or at any
other particular rate, that the pre-tax yield to maturity on the Class II-A-2
Certificates and Class III-A-2 Certificates will correspond to any of the
pre-tax yields to maturity shown herein, that the level of LIBOR will
correspond to the levels shown in the table or that the aggregate purchase
price of the Class II-A-2 Certificates and Class III-A-2 Certificates will be
as assumed. In addition to any other factors an investor may deem material,
each investor must make its own decision as to the appropriate prepayment
assumption to be used and the appropriate levels of LIBOR to be assumed in
deciding whether or not to purchase Class II-A-2 Certificates and Class III-A-2
Certificates.


                SENSITIVITY OF PRE-TAX YIELD TO MATURITY OF THE
               CLASS II-A-2 CERTIFICATES TO PREPAYMENTS AND LIBOR

<TABLE>
<CAPTION>
                                               PERCENTAGE OF BPA
                   -------------------------------------------------------------------------
      LIBOR             0%             50%           100%           150%            200%
----------------   ------------   ------------   ------------   ------------   -------------
<S>                <C>            <C>            <C>            <C>            <C>
4.630% .........       209.04%       184.27%        156.86%        125.68%          89.66%
5.630% .........       154.42%       131.44%        105.62%         75.63%          40.87%
6.630% .........       103.95%        82.59%         57.73%         28.10%        (  5.90)%
7.630% .........        57.47%        37.46%         11.92%        (18.90)%       ( 52.67)%
8.630% .........        13.05%       ( 5.54)%       (38.90)%       (74.33)%       (107.90)%
</TABLE>

                                      S-58
<PAGE>

                SENSITIVITY OF PRE-TAX YIELD TO MATURITY OF THE
              CLASS III-A-2 CERTIFICATES TO PREPAYMENTS AND LIBOR


<TABLE>
<CAPTION>
                                              PERCENTAGE OF BPA
                   ------------------------------------------------------------------------
      LIBOR             0%             50%           100%           150%           200%
----------------   ------------   ------------   ------------   ------------   ------------
<S>                <C>            <C>            <C>            <C>            <C>
4.630% .........       199.65%       182.71%        164.64%        145.12%        123.69%
5.630% .........       145.87%       130.35%        113.64%         95.31%         74.86%
6.630% .........        96.21%        81.98%         66.40%         48.68%         28.52%
7.630% .........        50.38%        37.34%         22.45%          3.59%        (17.65)%
8.630% .........         3.51%       ( 7.94)%       (22.45)%       (51.11)%       (76.92)%
</TABLE>

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

     Notwithstanding the assumed prepayment rates reflected in the preceding
tables, it is highly unlikely that the mortgage loans will be prepaid according
to one particular pattern. For this reason, and because the timing of cash
flows is critical to determining yields, the pre-tax yield to maturity on the
Class II-A-2 Certificates and Class III-A-2 Certificates is likely to differ
from those shown in the tables, even if all of the related mortgage loans
prepay at the indicated constant percentages of BPA over any given time period
or over the entire life of the Certificates.

     There can be no assurance that the related mortgage loans will prepay at
any particular rate or that the yield on the Class II-A-2 Certificates and
Class III-A-2 Certificates will conform to the yields described herein.
Moreover, the various remaining terms to maturity and mortgage rates of the
related mortgage loans could produce slower or faster principal distributions
than indicated in the preceding tables at the various constant percentages of
BPA specified, even if the weighted average remaining term to maturity and
weighted average mortgage rate of the related mortgage loans are as assumed.
Investors are urged to make their investment decisions based on their
determinations as to anticipated rates of prepayment under a variety of
scenarios. Investors in the Class II-A-2 Certificates and Class III-A-2
Certificates should fully consider the risk that a rapid rate of prepayments on
the related mortgage loans could result in the failure of such investors to
fully recover their investments.

SENSITIVITY OF THE CLASS X-I CERTIFICATES

     AS INDICATED IN THE TABLE BELOW, THE YIELDS TO INVESTORS ON THE CLASS X-I
CERTIFICATES WILL BE SENSITIVE TO THE RATE OF PRINCIPAL PAYMENTS, INCLUDING
PREPAYMENTS, OF THE GROUP I MORTGAGE LOANS WITH HIGH NET MORTGAGE RATES. THE
MORTGAGE LOANS, IN MOST CASES, CAN BE PREPAID AT ANY TIME. ON THE BASIS OF THE
ASSUMPTIONS DESCRIBED BELOW, THE YIELD TO MATURITY ON THE CLASS X-I
CERTIFICATES WOULD BE APPROXIMATELY 0% IF PREPAYMENTS WERE TO OCCUR AT A
CONSTANT RATE OF APPROXIMATELY 176% OF THE PREPAYMENT ASSUMPTION FOR THE GROUP
I MORTGAGE LOANS. IF THE ACTUAL PREPAYMENT RATE OF THE MORTGAGE LOANS WERE TO
EXCEED THE APPLICABLE LEVEL FOR AS LITTLE AS ONE MONTH WHILE EQUALING THAT
LEVEL FOR THE REMAINING MONTHS, THE INVESTORS IN THE CLASS CERTIFICATES WOULD
NOT FULLY RECOUP THEIR INITIAL INVESTMENTS.

     As described above under "Description of the Certificates--Distribution of
Interest," the interest due on the Class Certificates in effect from time to
time is calculated by reference to the Net Mortgage Rates of certain Group I
mortgage loans. Mortgage loans with higher mortgage rates tend to prepay at
higher rates than mortgage loans with relatively lower mortgage rates in
response to a given change in market interest rates. As a result, the related
mortgage loans may prepay at higher rates, reducing the pass-through rate and
notional amount of the Class X-I Certificates.


                                      S-59
<PAGE>

     The information shown in the following table has been prepared on the
basis of the structuring assumptions which assume no Realized Losses, and on
the assumption that the purchase price of the Class Certificates, expressed as
a percentage of initial notional amount is 14.75%, not including accrued
interest. However, accrued interest has been added to that price in calculating
the yields shown in the table below.


            SENSITIVITY OF THE CLASS X-I CERTIFICATES TO PREPAYMENTS
                          (PRE-TAX YIELD TO MATURITY)


<TABLE>
<CAPTION>
                           PERCENTAGE OF BPA
      0%            50%           100%          150%           200%
-------------   -----------   -----------   -----------   -------------
<S>             <C>           <C>           <C>           <C>
  57.35%        44.15%        29.19%        10.86%        (9.72)%
</TABLE>

     It is highly unlikely that all of the mortgage loans of a specific group
will have the characteristics assumed or that the mortgage loans of a specific
group will prepay at any constant rate until maturity or that all of the
mortgage loans of a specific group will prepay at the same rate or time. As a
result of these factors, the pre-tax yield on the Class X-I Certificates is
likely to differ from those shown in the table above, even if all of the
related Group I mortgage loans prepay at the indicated percentages of the
applicable prepayment assumption. No representation is made as to the actual
rate of principal payments on the mortgage loans for any period or over the
lives of the Class X-I Certificates or as to the yield on the Class X-I
Certificates. Investors must make their own decisions as to the appropriate
prepayment assumptions to be used in deciding whether to purchase the Class X-I
Certificates.

SENSITIVITY OF THE CLASS X-II CERTIFICATES

     AS INDICATED IN THE TABLE BELOW, THE YIELDS TO INVESTORS ON THE CLASS X-II
CERTIFICATES WILL BE SENSITIVE TO THE RATE OF PRINCIPAL PAYMENTS, INCLUDING
PREPAYMENTS, OF THE GROUP II MORTGAGE LOANS. THE MORTGAGE LOANS, IN MOST CASES,
CAN BE PREPAID AT ANY TIME. ON THE BASIS OF THE ASSUMPTIONS DESCRIBED BELOW,
THE YIELD TO MATURITY ON THE CLASS CERTIFICATES WOULD BE APPROXIMATELY 0% IF
PREPAYMENTS WERE TO OCCUR AT A CONSTANT RATE OF APPROXIMATELY 136% OF THE
PREPAYMENT ASSUMPTION FOR THE GROUP II MORTGAGE LOANS. IF THE ACTUAL PREPAYMENT
RATE OF THE MORTGAGE LOANS WERE TO EXCEED THE APPLICABLE LEVEL FOR AS LITTLE AS
ONE MONTH WHILE EQUALING THAT LEVEL FOR THE REMAINING MONTHS, THE INVESTORS IN
THE CLASS CERTIFICATES WOULD NOT FULLY RECOUP THEIR INITIAL INVESTMENTS.

     The information shown in the following table has been prepared on the
basis of the structuring assumptions which assume no Realized Losses, and on
the assumption that the purchase price of the Class X-II Certificates,
expressed as a percentage of initial notional amount is 0.250%, not including
accrued interest. However, accrued interest has been added to that price in
calculating the yields shown in the table below.


           SENSITIVITY OF THE CLASS X-II CERTIFICATES TO PREPAYMENTS
                          (PRE-TAX YIELD TO MATURITY)

<TABLE>
<CAPTION>
                            PERCENTAGE OF BPA
      0%            50%           100%           150%            200%
-------------   -----------   -----------   -------------   --------------
<S>             <C>           <C>           <C>             <C>
  67.25%        46.95%        21.84%        (8.55)%         (42.37)%
</TABLE>

     It is highly unlikely that all of the mortgage loans of a specific group
will have the characteristics assumed or that the mortgage loans of a specific
group will prepay at any constant rate until maturity or that all of the
mortgage loans of a specific group will prepay at the same rate or time. As a
result of these factors, the pre-tax yield on the Class X-II Certificates is
likely to differ from those shown in the table above, even if all of the Group
II mortgage loans prepay at the indicated percentages of the applicable
prepayment assumption. No representation is made as to the actual rate of
principal payments on the mortgage loans for any period or over the lives of
the Class X-II Certificates or as to the yield on the Class X-II Certificates.
Investors must make their own decisions as to the appropriate prepayment
assumptions to be used in deciding whether to purchase the Class X-II
Certificates.


                                      S-60
<PAGE>

SENSITIVITY OF THE CLASS X-III CERTIFICATES

     AS INDICATED IN THE TABLE BELOW, THE YIELDS TO INVESTORS ON THE CLASS
X-III CERTIFICATES WILL BE SENSITIVE TO THE RATE OF PRINCIPAL PAYMENTS,
INCLUDING PREPAYMENTS, OF THE GROUP III MORTGAGE LOANS. THE MORTGAGE LOANS, IN
MOST CASES, CAN BE PREPAID AT ANY TIME. ON THE BASIS OF THE ASSUMPTIONS
DESCRIBED BELOW, THE YIELD TO MATURITY ON THE CLASS X-III CERTIFICATES WOULD BE
APPROXIMATELY 0% IF PREPAYMENTS WERE TO OCCUR AT A CONSTANT RATE OF
APPROXIMATELY 155% OF THE PREPAYMENT ASSUMPTION FOR THE GROUP III MORTGAGE
LOANS. IF THE ACTUAL PREPAYMENT RATE OF THE MORTGAGE LOANS WERE TO EXCEED THE
APPLICABLE LEVEL FOR AS LITTLE AS ONE MONTH WHILE EQUALING THAT LEVEL FOR THE
REMAINING MONTHS, THE INVESTORS IN THE CLASS X-III CERTIFICATES WOULD NOT FULLY
RECOUP THEIR INITIAL INVESTMENTS.

     The information shown in the following table has been prepared on the
basis of the structuring assumptions which assume no Realized Losses, and on
the assumption that the purchase price of the Class X-III Certificates,
expressed as a percentage of initial notional amount is 0.375%, not including
interest. However, accrued interest has been added to that price in calculating
the yields shown in the table below.


           SENSITIVITY OF THE CLASS X-III CERTIFICATES TO PREPAYMENTS
                          (PRE-TAX YIELD TO MATURITY)

<TABLE>
<CAPTION>
                           PERCENTAGE OF BPA
      0%            50%           100%         150%           200%
-------------   -----------   -----------   ----------   --------------
<S>             <C>           <C>           <C>          <C>
  49.22%        36.20%        21.30%        2.32%        (19.01)%
</TABLE>

     It is highly unlikely that all of the mortgage loans of a specific group
will have the characteristics assumed or that the mortgage loans of a specific
group will prepay at any constant rate until maturity or that all of the
mortgage loans of a specific group will prepay at the same rate or time. As a
result of these factors, the pre-tax yield on the Class X-III Certificates is
likely to differ from those shown in the table above, even if all of the Group
III Mortgage Loans prepay at the indicated percentages of the applicable
prepayment assumption. No representation is made as to the actual rate of
principal payments on the mortgage loans for any period or over the lives of
the Class X-III Certificates or as to the yield on the Class X-III
Certificates. Investors must make their own decisions as to the appropriate
prepayment assumptions to be used in deciding whether to purchase the Class
X-III Certificates.

SENSITIVITY OF THE CLASS XB-1 CERTIFICATES

     AS INDICATED IN THE TABLE BELOW, THE YIELDS TO INVESTORS ON THE CLASS XB-1
CERTIFICATES WILL BE SENSITIVE TO THE RATE OF PRINCIPAL PAYMENTS, INCLUDING
PREPAYMENTS. THE MORTGAGE LOANS, IN MOST CASES, CAN BE PREPAID AT ANY TIME. ON
THE BASIS OF THE ASSUMPTIONS DESCRIBED BELOW, THE YIELD TO MATURITY ON THE
CLASS XB-1 CERTIFICATES WOULD BE APPROXIMATELY 0% IF PREPAYMENTS WERE TO OCCUR
AT A CONSTANT RATE OF APPROXIMATELY 495% OF THE PREPAYMENT ASSUMPTION FOR THE
MORTGAGE LOANS. IF THE ACTUAL PREPAYMENT RATE OF THE MORTGAGE LOANS WERE TO
EXCEED THE APPLICABLE LEVEL FOR AS LITTLE AS ONE MONTH WHILE EQUALING THAT
LEVEL FOR THE REMAINING MONTHS, THE INVESTORS IN THE CLASS XB-1 CERTIFICATES
WOULD NOT FULLY RECOUP THEIR INITIAL INVESTMENTS.

     The information shown in the following table has been prepared on the
basis of the structuring assumptions which assume no Realized Losses, and on
the assumption that the purchase price of the Class XB-1 Certificates,
expressed as a percentage of initial notional amount is 1.375%, not including
interest. However, accrued interest has been added to that price in calculating
the yields shown in the table below.

           SENSITIVITY OF THE CLASS XB-1 CERTIFICATES TO PREPAYMENTS
                          (PRE-TAX YIELD TO MATURITY)


<TABLE>
<CAPTION>
                            PERCENTAGE OF BPA
      0%              50%           100%           150%           200%
--------------   ------------   ------------   ------------   ------------
<S>              <C>            <C>            <C>            <C>
  129.58%        129.54%        129.49%        129.15%        127.63%
</TABLE>

     It is highly unlikely that all of the mortgage loans of a specific group
will have the characteristics assumed or that the mortgage loans of a specific
group will prepay at any constant rate until maturity or


                                      S-61
<PAGE>

that all of the mortgage loans of a specific group will prepay at the same rate
or time. As a result of these factors, the pre-tax yield on the Class XB-1
Certificates is likely to differ from those shown in the table above, even if
all of the mortgage loans prepay at the indicated percentages of the applicable
prepayment assumption. No representation is made as to the actual rate of
principal payments on the mortgage loans for any period or over the lives of
the Class XB-1 Certificates or as to the yield on the Class XB-1 Certificates.
Investors must make their own decisions as to the appropriate prepayment
assumptions to be used in deciding whether to purchase the Class XB-1
Certificates.

SENSITIVITY OF THE CLASS XB-2 CERTIFICATES

     AS INDICATED IN THE TABLE BELOW, THE YIELDS TO INVESTORS ON THE CLASS XB-2
CERTIFICATES WILL BE SENSITIVE TO THE RATE OF PRINCIPAL PAYMENTS, INCLUDING
PREPAYMENTS. THE MORTGAGE LOANS, IN MOST CASES, CAN BE PREPAID AT ANY TIME. ON
THE BASIS OF THE ASSUMPTIONS DESCRIBED BELOW, THE YIELD TO MATURITY ON THE
CLASS XB-2 CERTIFICATES WOULD BE APPROXIMATELY 0% IF PREPAYMENTS WERE TO OCCUR
AT A CONSTANT RATE OF APPROXIMATELY 477% OF THE PREPAYMENT ASSUMPTION FOR THE
MORTGAGE LOANS. IF THE ACTUAL PREPAYMENT RATE OF THE MORTGAGE LOANS WERE TO
EXCEED THE APPLICABLE LEVEL FOR AS LITTLE AS ONE MONTH WHILE EQUALING THAT
LEVEL FOR THE REMAINING MONTHS, THE INVESTORS IN THE CLASS XB-2 CERTIFICATES
WOULD NOT FULLY RECOUP THEIR INITIAL INVESTMENTS.

     The information shown in the following table has been prepared on the
basis of the structuring assumptions which assume no Realized Losses, and on
the assumption that the purchase price of the Class XB-2 Certificates,
expressed as a percentage of initial notional amount is 1.125%, not including
accrued interest. However, accrued interest has been added to that price in
calculating the yields shown in the table below.

           SENSITIVITY OF THE CLASS XB-2 CERTIFICATES TO PREPAYMENTS
                          (PRE-TAX YIELD TO MATURITY)

<TABLE>
<CAPTION>
                            PERCENTAGE OF BPA
      0%              50%           100%           150%           200%
--------------   ------------   ------------   ------------   ------------
<S>              <C>            <C>            <C>            <C>
  104.43%        104.34%        104.24%        103.68%        101.58%
</TABLE>

     It is highly unlikely that all of the mortgage loans of a specific group
will have the characteristics assumed or that the mortgage loans of a specific
group will prepay at any constant rate until maturity or that all of the
mortgage loans of a specific group will prepay at the same rate or time. As a
result of these factors, the pre-tax yield on the Class XB-2 Certificates is
likely to differ from those shown in the table above, even if all of the
mortgage loans that have prepayment penalties prepay at the indicated
percentages of the applicable prepayment assumption. No representation is made
as to the actual rate of principal payments on the mortgage loans for any
period or over the lives of the Class XB-2 Certificates or as to the yield on
the Class XB-2 Certificates. Investors must make their own decisions as to the
appropriate prepayment assumptions to be used in deciding whether to purchase
the Class XB-2 Certificates.

SENSITIVITY OF THE CLASS I-P CERTIFICATES

     THE CLASS I-P CERTIFICATES WILL BE "PRINCIPAL ONLY" CERTIFICATES AND WILL
NOT BEAR INTEREST. AS INDICATED IN THE TABLE BELOW, A LOW RATE OF PRINCIPAL
PAYMENTS, INCLUDING PREPAYMENTS, OF THE CLASS I-P MORTGAGE LOANS WILL HAVE A
NEGATIVE EFFECT ON THE YIELD TO INVESTORS IN THE CLASS I-P CERTIFICATES.

     As described above under "Description of the Certificates--Distributions
of Principal," the Class I-P Principal Distribution Amount for the Class I-P
Certificates is calculated by reference to the principal payments, including
prepayments, on the Class I-P Mortgage Loans. The Class I-P Mortgage Loans will
have lower Net Mortgage Rates, and lower mortgage rates, than the other
mortgage loans. Mortgage loans with higher mortgage rates tend to prepay at
higher rates than mortgage loans with relatively lower mortgage rates in
response to a given reduction in market interest rates. As a result, the Class
I-P Mortgage Loans may prepay at lower rates, reducing the rate of payment of
principal and the resulting yield of the Class I-P Certificates.


                                      S-62
<PAGE>

     The information shown in the following table has been prepared on the
basis of the structuring assumptions and on the assumption that the aggregate
purchase price of the Class I-P Certificates, expressed as a percentage of
initial Class Principal Balance, is 60.25%.


            SENSITIVITY OF THE CLASS IP CERTIFICATES TO PREPAYMENTS
                          (PRE-TAX YIELD TO MATURITY)


<TABLE>
<CAPTION>
                         PERCENTAGE OF BPA
     0%            50%           100%          150%          200%
------------   -----------   -----------   -----------   -----------
<S>            <C>           <C>           <C>           <C>
  5.85%        10.58%        16.92%        24.34%        32.62%
</TABLE>

     It is highly unlikely that all of the mortgage loans of a specific group
will have the characteristics assumed or that the mortgage loans of a specific
group will prepay at any constant rate until maturity or that all of the
mortgage loans will prepay at the same rate or time. As a result of these
factors, the pre-tax yield on the Class I-P Certificates is likely to differ
from those shown in the table above, even if all of the Class I-P Mortgage
Loans prepay at the indicated percentages of the prepayment assumption for the
Group I mortgage loans. No representation is made as to the actual rate of
principal payments on the Class I-P Mortgage Loans for any period or over the
life of the certificates or as to the yield on the Class I-P Certificates.
Investors must make their own decisions as to the appropriate prepayment
assumptions to be used in deciding whether to purchase a class of Class I-P
Certificates.

WEIGHTED AVERAGE LIVES OF THE OFFERED CERTIFICATES

     The weighted average life of any class of certificates is determined by:

     o   multiplying the amount of the reduction, if any, of the Class Principal
         Balance of that Class on each distribution date by the number of years
         from the date of issuance to that distribution date,

     o   summing the results and

     o   dividing the sum by the aggregate amount of the reductions in Class
         Principal Balance of that class referred to in the first clause.

     For a discussion of the factors which may influence the rate of payments,
including prepayments, of the mortgage loans, see "--Prepayment Considerations
and Risks" in this prospectus supplement and "Yield, Prepayment and Maturity
Considerations" in the prospectus.

     In general, the weighted average lives of the offered certificates will be
shortened if the level of prepayments of principal of the related mortgage
loans increases. However, the weighted average lives of the offered
certificates will depend on a variety of other factors, including the timing of
changes in that rate of principal payments and the priority sequence of
distributions of principal of the classes of certificates. See "Description of
the Certificates--Distribution of Principal" in this prospectus supplement.

     The interaction of the foregoing factors may have different effects on
various classes of offered certificates and the effects on any class may vary
at different times during the life of that class. Accordingly, no assurance can
be given as to the weighted average life of any class of offered certificates.
Further, to the extent the prices of the offered certificates represent
discounts or premiums to their respective original Class Principal Balances,
variability in the weighted average lives of those classes of offered
certificates will result in variability in the related yields to maturity. For
an example of how the weighted average lives of the classes of offered
certificates may be affected at various percentages of the prepayment
assumption, see "--Decrement Tables" in the following paragraph.

DECREMENT TABLES

     The following tables indicate the percentages of the initial Class
Principal Balances of the classes of offered certificates that would be
outstanding after each of the dates shown at various percentages of the
applicable prepayment assumption and the corresponding weighted average lives
of those classes. The tables have been prepared on the basis of the structuring
assumptions. It is not likely that all of the


                                      S-63
<PAGE>

mortgage loans will have the characteristics assumed, that all of the mortgage
loans will prepay at the percentages of the prepayment assumption specified in
the tables or at any constant rate or that all of the mortgage loans will
prepay at the same rate. Moreover, the diverse remaining terms to maturity of
the mortgage loans could produce slower or faster principal distributions than
indicated in the tables at the specified percentages of the prepayment
assumption, even if the weighted average remaining term to maturity of the
mortgage loans is consistent with the remaining terms to maturity of the
mortgage loan specified in the structuring assumptions.


            PERCENT OF INITIAL CLASS PRINCIPAL BALANCES OUTSTANDING

<TABLE>
<CAPTION>
                                             CLASS I-A-1                                      CLASS II-A-1
                                    PREPAYMENT ASSUMPTION OF BPA                      PREPAYMENT ASSUMPTION OF BPA
                          ------------------------------------------------- -------------------------------------------------
                              0%       50%       100%      150%      200%       0%       50%       100%      150%      200%
DISTRIBUTION DATE         --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
<S>                       <C>       <C>       <C>       <C>       <C>       <C>       <C>       <C>       <C>       <C>
Initial .................     100%      100%      100%      100%      100%      100%      100%      100%      100%      100%
September 2001 ..........      98        89        80        71        62        98        85        72        59        45
September 2002 ..........      95        77        60        45        32        97        70        46        27        11
September 2003 ..........      93        66        44        27        14        94        56        28         9         0
September 2004 ..........      90        56        32        15         3        92        45        16         0         0
September 2005 ..........      86        47        22         6         0        90        35         7         0         0
September 2006 ..........      82        40        15         2         0        87        28         3         0         0
September 2007 ..........      78        33        10         0         0        84        22         0         0         0
September 2008 ..........      74        28         7         0         0        81        17         0         0         0
September 2009 ..........      69        23         5         0         0        77        14         0         0         0
September 2010 ..........      64        19         3         0         0        73        11         0         0         0
September 2011 ..........      58        15         2         0         0        68         8         0         0         0
September 2012 ..........      51        12         1         0         0        63         6         0         0         0
September 2013 ..........      44         9         1         0         0        58         5         0         0         0
September 2014 ..........      36         7         *         0         0        51         3         0         0         0
September 2015 ..........       0         0         0         0         0         0         0         0         0         0
 Weighted Average Life
   (in years)** .........   10.76      5.76      3.36      2.18      1.62     11.76      4.58      2.25      1.48      1.08
</TABLE>

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

**    Determined as specified under "--Weighted Average Lives of the Offered
      Certificates" herein.


                                      S-64
<PAGE>

            PERCENT OF INITIAL CLASS PRINCIPAL BALANCES OUTSTANDING



<TABLE>
<CAPTION>
                                         CLASS III-A-1                                CLASS B-1 AND CLASS B-2
                                 PREPAYMENT ASSUMPTION OF BPA                      PREPAYMENT ASSUMPTION OF BPA
                       ------------------------------------------------- -------------------------------------------------
                           0%       50%       100%      150%      200%       0%       50%       100%      150%      200%
DISTRIBUTION DATE      --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
<S>                    <C>       <C>       <C>       <C>       <C>       <C>       <C>       <C>       <C>       <C>
Initial ..............     100%      100%      100%      100%      100%      100%      100%      100%      100%      100%
September 2001 .......      99        90        81        71        62       100       100       100       100       100
September 2002 .......      97        78        61        46        32       100       100       100       100       100
September 2003 .......      96        68        46        28        14       100       100       100       100        93
September 2004 .......      94        59        34        16         4       100       100       100        99        79
September 2005 .......      92        51        24         7         0       100       100       100        86        57
September 2006 .......      90        44        17         3         0        99        95        92        71        32
September 2007 .......      87        38        12         *         0        98        90        81        55        18
September 2008 .......      84        32         9         0         0        95        81        65        36        10
September 2009 .......      81        28         6         0         0        91        70        50        24         6
September 2010 .......      78        24         5         0         0        87        61        38        15         3
September 2011 .......      74        20         3         0         0        82        52        29        10         2
September 2012 .......      70        17         2         0         0        76        44        22         6         1
September 2013 .......      65        14         2         0         0        69        36        16         4         1
September 2014 .......      59        11         1         0         0        62        29        12         2         *
September 2015 .......       0         0         0         0         0         0         0         0         0         0
 Weighted Average Life
   (in years)** ......   12.31      6.30      3.55      2.24      1.64     13.22     11.16      9.58      7.59      5.58
</TABLE>

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

**    Determined as specified under "--Weighted Average Lives of the Offered
      Certificates" herein.


            PERCENT OF INITIAL CLASS PRINCIPAL BALANCES OUTSTANDING



<TABLE>
<CAPTION>
                                                              CLASS A-R-1, CLASS A-R-2 AND
                                                                       CLASS A-R-3
                                                              PREPAYMENT ASSUMPTION OF BPA
                                                ---------------------------------------------------------
                                                    0%         50%         100%        150%        200%
DISTRIBUTION DATE                               ---------   ---------   ---------   ---------   ---------
<S>                                             <C>         <C>         <C>         <C>         <C>
Initial .....................................       100%        100%        100%        100%        100%
September 2001 ..............................         0           0           0           0           0
September 2002 ..............................         0           0           0           0           0
September 2003 ..............................         0           0           0           0           0
September 2004 ..............................         0           0           0           0           0
September 2005 ..............................         0           0           0           0           0
September 2006 ..............................         0           0           0           0           0
September 2007 ..............................         0           0           0           0           0
September 2008 ..............................         0           0           0           0           0
September 2009 ..............................         0           0           0           0           0
September 2010 ..............................         0           0           0           0           0
September 2011 ..............................         0           0           0           0           0
September 2012 ..............................         0           0           0           0           0
September 2013 ..............................         0           0           0           0           0
September 2014 ..............................         0           0           0           0           0
September 2015 ..............................         0           0           0           0           0
 Weighted Average Life (in years)** .........      0.08        0.08        0.08        0.08        0.08
</TABLE>

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

**    Determined as specified under "--Weighted Average Lives of the Offered
      Certificates" herein.


                                      S-65
<PAGE>

LAST SCHEDULED DISTRIBUTION DATE

     The last scheduled distribution date for each class of certificates is the
distribution date in June 2020, which is the distribution date that is two
months after the scheduled maturity date for the latest maturing mortgage loan.

     Since the rate of distributions in reduction of the Class Principal
Balance or notional amount of each class of offered certificates will depend on
the rate of payment, including prepayments, of the mortgage loans, the Class
Principal Balance of that class could be reduced to zero significantly earlier
or later than the last scheduled distribution date. The rate of payments on the
mortgage loans will depend on their particular characteristics, as well as on
prevailing interest rates from time to time and other economic factors, and no
assurance can be given as to the actual payment experience of the mortgage
loans. See "--Prepayment Considerations and Risks" and "--Weighted Average
Lives of the Offered Certificates" in this prospectus supplement and "Yield,
Prepayment and Maturity Considerations" in the prospectus.

THE SUBORDINATE CERTIFICATES

     The weighted average lives of, and the yields to maturity on the Class B-1
Certificates and Class XB-1 Certificates and to a greater extent, the Class B-2
Certificate and Class XB-2 Certificates to the rate and timing of mortgagor
defaults and the severity of ensuing losses on the mortgage loans. If the
actual rate and severity of losses on the mortgage loans are higher than those
assumed by a holder of a Class B Certificate, the actual yield to maturity of
that certificate may be lower than the yield expected by that holder based on
that assumption. The timing of losses on the mortgage loans in a group will
also affect an investor's actual yield to maturity, even if the rate of
defaults and severity of losses over the life of the mortgage loans are
consistent with an investor's expectations. Usually, the earlier a loss occurs,
the greater the effect on an investor's yield to maturity. Realized Losses on
the mortgage loans will reduce the Class Principal Balance and Class Notional
Amounts of a class of Class B Certificates and Class XB Certificates,
respectively to the extent of any losses allocated to that class, as described
under "Description of the Certificates--Allocation of Losses," without the
receipt of cash attributable to that reduction. In addition, shortfalls in cash
available for distributions on the Class B Certificates will result in a
reduction in the Class Principal Balance of the class of Class B-2 Certificates
until the Class Principal Balance of that certificate is reduced to zero and
then on the Class B-1 Certificates after giving effect to all distributions and
allocations of losses, as described in this prospectus supplement under
"Description of the Certificates--Allocation of Losses." As a result of those
reductions, less interest will accrue on that class or classes of Class B
Certificates and Class XB Certificates than otherwise would be the case. The
yield to maturity of the Class B Certificates and Class XB Certificates will
also be affected by the disproportionate allocation of the Principal Prepayment
Amounts to the senior certificates, Net Interest Shortfalls and other cash
shortfalls in Available Funds and distributions of funds to the holders of the
Class I-P Certificates otherwise available for distributions on the Class B
Certificates and Class XB Certificates to the extent of reimbursement for the
Class I-P Deferred Amounts. See "Description of the Certificates--Allocation of
Losses" in this prospectus supplement.

ADDITIONAL INFORMATION

     The depositor intends to file additional yield tables and other
computational materials for one or more classes of offered certificates with
the SEC, in a report on Form 8-K. Those tables and materials were prepared by
the underwriter at the request of particular prospective investors, based on
assumptions provided by, and satisfying the special requirements of, those
prospective investors. Those tables and assumptions may be based on assumptions
that differ from the structuring assumptions. Accordingly, those tables and
other materials may not be relevant to or appropriate for investors other than
those specifically requesting them.


                                      S-66
<PAGE>

                              CREDIT ENHANCEMENT

INSURANCE

 General

     Each Mortgage Loan is the subject of insurance coverage provided by the
mortgage pool insurance policy as further described below. Furthermore, as
described herein, the Insured Certificates will be unconditionally and
irrevocably guaranteed as to the payment of principal and interest equal to the
Insured Payment on each distribution date pursuant to the terms of the
Certificate Insurance Policy.

     Because the mortgage pool insurance policy will cover the mortgage loans
in all three of the loan groups, claims paid from Mortgage Pool Insurance
Policy respecting the mortgage loans in one loan group will reduce the amount
of coverage available thereunder with respect to the mortgage loans in the
other loan group covered thereby. If the rate of insured losses in a particular
loan group is disproportionately greater than the rate of such losses with
respect to the other loan group, the coverage available under the mortgage pool
insurance policy described herein for such other loan group may be reduced
below that which might otherwise have been provided if each loan group were
covered by a separate insurance policy. The depositor has no reason to believe
that the percentage rate of losses for any loan group will be materially higher
or lower than such percentage rate for the other loan group. However, because
the rate of losses on each loan group cannot be predicted, no assurance can be
given that disproportionately higher claims and loss rates on a particular loan
group will not adversely affect the amount of coverage available under the
mortgage pool insurance policy in respect of the other loan group covered
thereby.

     The amount of coverage under the Mortgage Pool Insurance Policy is limited
in amount and payment thereunder is subject to certain conditions and
limitations. In the event any insurer of a Mortgage Pool Insurance Policy fails
to pay a claim required to be paid under an Mortgage Pool Insurance Policy or
losses on the mortgage loans in any loan group occur that are not covered by
the Mortgage Pool Insurance Policy or losses occur in amounts exceeding such
coverage, losses on the mortgage loans ("Uninsured Losses") will be allocated
among the holders of the class or classes of certificates relating to the
corresponding loan group, as described herein.

                        THE CERTIFICATE INSURANCE POLICY

     The following information has been supplied by MBIA Insurance Corporation
(the "Certificate Insurer") for inclusion in this prospectus supplement. The
Certificate Insurer does not accept any responsibility for the accuracy or
completeness of this prospectus supplement or any information or disclosure
contained herein, or omitted herefrom, other than with respect to the accuracy
of the information regarding the Certificate Insurance Policy and the
Certificate Insurer set forth under the heading "The Certificate Insurance
Policy" herein. Additionally, the Certificate Insurer makes no representation
regarding the offered certificates or the advisability of investing in the
offered certificates.

     The Certificate Insurer, in consideration of the payment of a premium and
subject to the terms of the Certificate Insurance Policy (the "Certificate
Insurance Policy") with respect to the Class II-A-1, Class II-A-2, Class
III-A-1 and Class III-A-2 Certificates (the "Insured Certificates"), thereby
unconditionally and irrevocably guarantees to any holder of an Insured
Certificate that an amount equal to each full and complete Insured Payment will
be received from the Certificate Insurer by the trustee or its successors, as
trustee for the holders of the Insured Certificates, on behalf of the holders,
for distribution by the trustee to each holder of an Insured Certificate of
that holder's proportionate share of the Insured Payment.

     The Certificate Insurer's obligations under the Certificate Insurance
Policy, with respect to a particular Insured Payment, will be discharged to the
extent funds equal to the applicable Insured Payment are received by the
trustee, whether or not those funds are properly applied by the trustee.
Insured Payments will be made only at the time set forth in the Certificate
Insurance Policy, and no accelerated Insured Payments will be made regardless
of any acceleration of the Insured Certificates,


                                      S-67
<PAGE>

unless the acceleration is at the sole option of the Certificate Insurer. THE
CERTIFICATE INSURANCE POLICY DOES NOT PROVIDE CREDIT ENHANCEMENT FOR ANY CLASS
OF CERTIFICATES OTHER THAN THE CLASS II-A-1, CLASS II-A-2, CLASS III-A-1 AND
CLASS III-A-2 CERTIFICATES.

     Notwithstanding the foregoing paragraph, the Certificate Insurance Policy
does not cover shortfalls, if any, attributable to the liability of the trust,
the REMICs or the trustee for withholding taxes, if any (including interest and
penalties in respect of any liability for withholding taxes).

     The Certificate Insurer will pay any Insured Payment that is a Preference
Amount on the business day following receipt on a business day by the
Certificate Insurer's fiscal agent of the following:

     o   a certified copy of the order requiring the return of a preference
         payment;

     o   an opinion of counsel satisfactory to the Certificate Insurer that the
         order is final and not subject to appeal;

     o   an assignment in a form that is reasonably required by the Certificate
         Insurer, irrevocably assigning to the Certificate Insurer all rights
         and claims of the holder of the Insured Certificate relating to or
         arising under the Insured Certificates against the debtor which made
         the preference payment or otherwise with respect to the preference
         payment; and

     o   appropriate instruments to effect the appointment of the Certificate
         Insurer as agent for the holder of the Insured Certificate in any legal
         proceeding related to the preference payment, which instruments are in
         a form satisfactory to the Certificate Insurer;

provided, that if these documents are received after 12:00 p.m., New York time,
on that business day, they will be deemed to be received on the following
business day. Payments by the Certificate Insurer will be disbursed to the
receiver or trustee in bankruptcy named in the final order of the court
exercising jurisdiction on behalf of the holder of the Insured Certificate and
not to any holder of an Insured Certificate directly unless the holder of an
Insured Certificate has returned principal or interest paid on the Insured
Certificates to the receiver or trustee in bankruptcy, in which case that
payment will be disbursed to the holder of an Insured Certificate.

     The Certificate Insurer will pay any other amount payable under the
Certificate Insurance Policy no later than 12:00 p.m., New York time, on the
later of the distribution date on which the related Deficiency Amount is due or
the second business day following receipt in New York, New York on a business
day by State Street Bank and Trust Company, N.A., as fiscal agent for the
Certificate Insurer or any successor fiscal agent appointed by the Certificate
Insurer of a notice from the trustee specifying the Insured Payment which is
due and owing on the applicable distribution date, provided that if the notice
is received after 12:00 p.m., New York time, on that business day, it will be
deemed to be received on the following business day. If any notice received by
the Certificate Insurer's fiscal agent is not in proper form or is otherwise
insufficient for the purpose of making a claim under the Certificate Insurance
Policy, it will be deemed not to have been received by the Certificate
Insurer's fiscal agent for purposes of this paragraph, and the Certificate
Insurer or the fiscal agent, as the case may be, will promptly so advise the
trustee and the trustee may submit an amended notice.

     Insured Payments due under the Certificate Insurance Policy, unless
otherwise stated therein, will be disbursed by the Certificate Insurer's fiscal
agent to the trustee, on behalf of the holders of the Insured Certificate, by
wire transfer of immediately available funds in the amount of the Insured
Payment less, in respect of Insured Payments related to Preference Amounts, any
amount held by the trustee for the payment of the Insured Payment and legally
available therefor.

     The fiscal agent is the agent of the Certificate Insurer only and the
fiscal agent will in no event be liable to the holders of the Insured
Certificates for any acts of the fiscal agent or any failure of the Certificate
Insurer to deposit or cause to be deposited sufficient funds to make payments
due under the Certificate Insurance Policy.

     Subject to the terms of the pooling and servicing agreement, the
Certificate Insurer will be subrogated to the rights of each holder of the
Insured Certificates to receive payments under the Insured Certificates to the
extent of any payment by the Certificate Insurer under the Certificate
Insurance Policy.


                                      S-68
<PAGE>

     As used in the Certificate Insurance Policy, the following terms shall
have the following meanings:

     "Deficiency Amount" means, (i) with respect to any distribution date, the
amount, if any, by which the Available Funds for the related loan group is less
than (A) the current interest allocable to the related Insured Certificates,
minus (B) the pro rata portion of any Net Interest Shortfalls allocable to the
related Insured Certificates based on the current interest due on such
distribution date, and (ii) to the extent unpaid on the Last Scheduled
Distribution Date, after taking into account all distributions to be made on
the related Insured Certificates for such distribution date, any remaining
Class Principal Balance of the related Insured Certificates.

     "Insured Payment" means (i) as of any distribution date, any Deficiency
Amount and (ii) any Preference Amount.

     "Preference Amount" means any amount previously paid to a holder of an
Insured Certificate on the Insured Certificates that is recoverable and sought
to be recovered as a voidable preference by a trustee in bankruptcy pursuant to
the United States Bankruptcy Code (11 U.S.C.), as amended from time to time, in
accordance with a final non-appealable order of a court having competent
jurisdiction.

     Capitalized terms used in the Certificate Insurance Policy and not
otherwise defined in the Certificate Insurance Policy shall have the respective
meanings set forth in the pooling and servicing agreement as of the date of
execution of the Certificate Insurance Policy, without giving effect to any
subsequent amendment or modification to the pooling and servicing agreement
unless such amendment or modification has been approved in writing by the
Certificate Insurer.

     The Certificate Insurance Policy is not cancelable for any reason. The
premium on the Certificate Insurance Policy is not refundable for any reason
including payment, or provision being made for payment, prior to maturity of
the Insured Certificates.

     The Certificate Insurance Policy is being issued under and pursuant to,
and will be construed under, the laws of the State of New York, without giving
effect to the conflict of laws principles thereof.

     The insurance provided by the Certificate Insurance Policy is not covered
by the Property/Casualty Insurance Security Fund specified in Article 76 of the
New York Insurance Law.

     A form of the Certificate Insurance Policy is attached to this prospectus
supplement as Annex I.

     THE CERTIFICATE INSURER. The Certificate Insurer is the principal
operating subsidiary of MBIA Inc., a New York Stock Exchange listed company.
MBIA Inc. is not obligated to pay the debts of or claims against the
Certificate Insurer. The Certificate Insurer is domiciled in the State of New
York and licensed to do business in and is subject to regulation under the laws
of all 50 states, the District of Columbia, the Commonwealth of Puerto Rico,
the Commonwealth of the Northern Mariana Islands, the Virgin Islands of the
United States and the Territory of Guam. The Certificate Insurer has two
European branches, one in the Republic of France and the other in the Kingdom
of Spain. New York has laws prescribing minimum capital requirements, limiting
classes and concentrations of investments and requiring the approval of policy
rates and forms. State laws also regulate the amount of both the aggregate and
individual risks that may be insured, the payment of dividends by the
Certificate Insurer, changes in control and transactions among affiliates.
Additionally, the Certificate Insurer is required to maintain contingency
reserves on its liabilities in specified amounts and for specified periods of
time.

     FINANCIAL INFORMATION ABOUT THE CERTIFICATE INSURER. The consolidated
financial statements of the Certificate Insurer, a wholly owned subsidiary of
MBIA Inc., and its subsidiaries as of December 31, 1999 and December 31, 1998
and for each of the three years in the period ended December 31, 1999, prepared
in accordance with generally accepted accounting principles, included in the
Annual Report on Form 10-K of MBIA Inc. for the year ended December 31, 1999,
and the consolidated financial statements of the Certificate Insurer and its
subsidiaries as of June 30, 2000 and for the six months ended June 30, 2000 and
June 30, 1999 included in the Quarterly Report on Form 10-Q of MBIA Inc. for
the period ended June 30, 2000, are hereby incorporated by reference into this
prospectus supplement and shall be deemed to be a part hereof. Any statement
contained in a document incorporated by reference herein shall be modified or
superseded for purposes of this prospectus supplement to the extent that a
statement


                                      S-69
<PAGE>

contained herein or in any other subsequently filed document which also is
incorporated by reference herein modifies or supersedes that statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this prospectus supplement.

     All financial statements of the Certificate Insurer and its subsidiaries
included in documents filed by MBIA Inc. pursuant to Section 13(a), 13(c), 14
or 15(d) of the Securities Exchange Act of 1934, as amended, subsequent to the
date of this prospectus supplement and prior to the termination of the offering
of the offered certificates shall be deemed to be incorporated by reference
into this prospectus supplement and to be a part hereof from the respective
dates of filing those documents.

     The tables below present selected financial information of the Certificate
Insurer determined in accordance with statutory accounting practices prescribed
or permitted by insurance regulatory authorities and generally accepted
accounting principles:

<TABLE>
<CAPTION>
                                   STATUTORY ACCOUNTING PRACTICES
                                 ----------------------------------
                                  DECEMBER 31, 1999   JUNE 30, 2000
                                 ------------------- --------------
                                      (AUDITED)        (UNAUDITED)
                                           (IN MILLIONS)
<S>                              <C>                 <C>
   Admitted Assets .............        $7,045           $7,349
   Liabilities .................         4,632            4,880
   Capital and Surplus .........         2,413            2,469

<CAPTION>
                                    GENERALLY ACCEPTED ACCOUNTING
                                              PRINCIPLES
                                  ----------------------------------
                                   DECEMBER 31, 1999   JUNE 30, 2000
                                  ------------------- --------------
                                       (AUDITED)        (UNAUDITED)
                                            (IN MILLIONS)
<S>                               <C>                 <C>
   Assets .......................        $7,446           $7,858
   Liabilities ..................         3,218            3,384
   Shareholder's Equity .........         4,228            4,474
</TABLE>

     WHERE YOU CAN OBTAIN ADDITIONAL INFORMATION ABOUT THE CERTIFICATE
INSURER. Copies of the financial statements of the Certificate Insurer
incorporated by reference herein and copies of the Certificate Insurer's 1999
year-end audited financial statements prepared in accordance with statutory
accounting practices are available, without charge, from the Certificate
Insurer. The address of the Certificate Insurer is 113 King Street, Armonk, New
York 10504. The telephone number of the Certificate Insurer is (914) 273-4545.

FINANCIAL STRENGTH RATINGS OF THE CERTIFICATE INSURER.

     Moody's Investors Service, Inc. rates the financial strength of the
Certificate Insurer "Aaa."

     Standard & Poor's Ratings Services, a division of The McGraw-Hill
Companies, Inc. rates the financial strength of the Certificate Insurer "AAA."

     Fitch rates the financial strength of the Certificate Insurer "AAA."

     Each rating of the Certificate Insurer should be evaluated independently.
The ratings reflect each respective rating agency's current assessment of the
creditworthiness of the Certificate Insurer and its ability to pay claims on
its policies of insurance. Any further explanation as to the significance of
the above ratings may be obtained only from the applicable rating agency.

     The above ratings are not recommendations to buy, sell or hold the Insured
Certificates, and the ratings may be subject to revision or withdrawal at any
time by the rating agencies. Any downward revision or withdrawal of any of the
above ratings may have an adverse effect on the market price of the Insured
Certificates. The Certificate Insurer does not guaranty the market price of the
Insured Certificates nor does it guaranty that the ratings on the Insured
Certificates will not be revised or withdrawn.


                                      S-70
<PAGE>

                        MORTGAGE POOL INSURANCE POLICY

     The trustee will obtain a mortgage pool insurance policy (the "Mortgage
Pool Insurance Policy") to cover losses (subject to the limitations described
herein) by reason of default of the mortgagor. The Mortgage Pool Insurance
Policy will be issued by Radian. Subject to the limitations described herein,
the Mortgage Pool Insurance Policy will be available to cover losses by reason
of defaults in payment on all mortgage loans in all three loan groups, and will
be in an initial amount equal to approximately 10.00% of the aggregate
principal balance of the mortgage loans in all loan groups as of the cut-off
date. The trustee will pay the premiums for the Mortgage Pool Insurance Policy
in accordance with the terms of the pooling and servicing agreement. The
servicer will present claims and provide certain notices thereunder, on behalf
of itself, the trustee, the certificateholders and the Certificate Insurer.
Subject to certain limitations set forth in the pooling and servicing
agreement, the servicer is required to use its best efforts to maintain the
Mortgage Pool Insurance Policy during the term of the pooling and servicing
agreement, unless coverage thereunder has been exhausted through the payment of
claims.

     The following summary describes certain provisions of the Mortgage Pool
Insurance Policy. The summary does not purport to be complete and is subject
to, and qualified in its entirety by reference to, the provisions of the
Mortgage Pool Insurance Policy.

     The Mortgage Pool Insurance Policy is not a blanket policy against loss,
since claims thereunder may only be made respecting particular defaulted
Mortgage Loans and only upon satisfaction of certain conditions precedent
described below. The original amount of coverage under the Mortgage Pool
Insurance Policy will be reduced over the life of the certificates by the
aggregate dollar amount of claims paid.

     The claim amount will be an amount equal to the lesser of: (x) the sum of
110% of the unpaid principal balance, as such balance has been reduced in any
insolvency proceeding, due under the mortgage loan as of the date of default
without capitalization of delinquent interest, penalties or advances or (y) the
sum of 100% of the unpaid principal balance, as such balance has been reduced
in any insolvency proceeding, due under the mortgage loan as of the date of
default, plus the amount of the accumulated delinquent interest computed to the
date of claim payment at the Mortgage Loan rate of interest, plus foreclosure
costs, including court costs and reasonable attorneys' fees, paid by the
trustee. When a loss becomes payable, Radian will pay the trustee within 60
days after the servicer has filed a claim in accordance with the Mortgage Pool
Insurance Policy.

     The servicer must file a claim within 30 days after the mortgage loan
becomes six months in Default or within a 30 day period after Radian has
elected to accelerate filing of a claim. At the trustee's option, the servicer
may file a claim at any time after the mortgage loan becomes four months in
Default. If the servicer fails to file a claim within the applicable time, such
failure will be deemed to have been an election by the servicer to waive any
right to any benefit under Mortgage Pool Insurance Policy with respect to such
mortgage loan. Default means the failure by a borrower (x) to pay when due a
scheduled periodic payment due under the terms of a mortgage loan, or (y) to
pay all amounts due on acceleration of the mortgage loan by the trustee after
breach by the borrower of a due-on-sale provision in the mortgage loan,
granting the trustee the right to accelerate the Mortgage Loan upon transfer of
title to, or an interest in, the property, or (z) to pay when due a scheduled
periodic payment under a first mortgage loan. A Mortgage Loan is deemed to be
in Default for that month as of the close of business on the installment due
date for which a scheduled periodic payment has not been made or as of the
close of business on the due date stated in the notice of acceleration given
pursuant to the due-on-sale provision in the Mortgage Loan or the installment
due date for which a scheduled periodic payment has not been made under a first
mortgage loan. The mortgage loan will be considered to remain in Default until
filing of a claim so long as such scheduled periodic payment has not been made
or violation of the due-on-sale clause continues. For example, a mortgage loan
is "four months in Default" if the monthly installments due on January 1
through April 1 remain unpaid as of the close of business on April 1 or if a
basis for acceleration exists for a continuous period of four months.

     Radian will not be liable for any claim described below provided that such
condition must have materially contributed to the Default resulting in such
claim or materially increased the amount of the


                                      S-71
<PAGE>

loss; provided further, that if the amount by which the loss increased as a
result of such condition can be reasonably determined, the claim will not be
excluded but the loss will be reduced to the extent of such amount: (a) any
claim resulting from a Default of one month or more existing as of the first
day of the month in which the closing date occurs which has not been cured or
occurring after cancellation of the Mortgage Pool Insurance Policy, (b) any
claim where there was negligence by the trustee, the servicer or any other
person with respect to the mortgage loan, (c) any claim occurring when, at time
of Default or thereafter, the servicer is not the Servicer on the closing date
or is not approved in writing by Radian; (d) any claim where, at any time after
the closing date, physical damage to a property (other than reasonable wear and
tear) occurs or manifests itself; provided that this exclusion will apply only
if such physical damage occurred or manifests itself prior to the claim and was
the primary cause of the claim; (e) any claim, if the mortgage, deed of trust
or other similar instrument executed by the borrower and trustee does not
provide the trustee with a first or second mortgage; (f) any claim, if the
first mortgage loan allows for future advances and such advances are actually
made, after the date the mortgage loan was consummated; (g) any claim involving
or arising out of any breach by the trustee of its obligations under, or its
failure to comply with the terms of, the Mortgage Pool Insurance Policy or of
its obligations as imposed by operation of law; (h) any claim if, under
applicable law, the borrower did successfully assert or may have successfully
asserted any defense against the trustee so as to release in whole or in part
the borrower's obligation to repay the mortgage loan, provided, however, that
this exclusion will only apply to the extent and amount of such release; and
(i) any claim if the trustee does not provide or cause to be provided Radian
with the mortgage loan file upon Radian's request therefor.

     The Mortgage Pool Insurance Policy will not provide coverage against
hazard losses. The hazard insurance policies covering the Mortgage Loans
typically exclude from coverage physical damage resulting from a number of
causes and, even when the damage is covered, may afford recoveries which are
significantly less than full replacement or restoration cost relating to such
damages. Further, there is no coverage in respect of Special Hazard Losses or
Bankruptcy Losses under the mortgage pool insurance policy.

     Subject to the limitations described below, Radian has agreed to waive its
right to deny a claim or rescind coverage under the Mortgage Pool Insurance
Policy for losses where the coverage provided by such Mortgage Pool Insurance
Policy was induced by fraud, dishonesty or misrepresentation in connection with
the origination of the related mortgage loan, ("Fraud Losses"). Radian's Fraud
Loss waiver will have no force and effect to the extent that aggregate payments
by Radian in respect of Fraud Losses exceed (x) during the first year after the
cut-off date, an amount equal to 3.0% of the aggregate principal balance of all
of the Mortgage Loans covered by such policy minus Radian's actual Fraud Loss
payments since the cut-off date, (y) during the period from the first
anniversary of the cut-off date through the second anniversary of the cut-off
date, an amount equal to the lesser of (i) 2.0% of the aggregate principal
balance of all of the mortgage loans outstanding and (ii) the amount determined
in (x) as of the end of the first year after the cut-off date, minus Radian's
actual Fraud Loss payments since the first anniversary of the cut-off date, (z)
during the period from the second anniversary of the cut-off date through the
fifth anniversary of the cut-off date, an amount equal to the lesser of (i)
1.0% of the aggregate principal balance of all of the mortgage loans
outstanding, and (ii) the amount determined in (y) as of the end of second year
after the cut-off date minus Radian's actual Fraud Loss payments since the
second anniversary of the cut-off date. Any Fraud Losses in excess of the
applicable limitations or any Fraud Losses occurring more than five years after
the cut-off date will not be covered by the Mortgage Pool Insurance Policy will
be borne by the related class of certificates.

     If the Mortgage Pool Insurance Policy is canceled or terminated for any
reason other than the exhaustion of the coverage thereunder, or in the event
that the claims-paying ability rating of Radian is reduced to below investment
grade, the servicer will use its best efforts to obtain a comparable policy
from an insurer that is acceptable to S&P, Moody's, Fitch and the Certificate
Insurer. Such replacement policy will be required to provide coverage in an
amount equal to the then remaining coverage amount of the Mortgage Pool
Insurance Policy; provided, however, that if the premium cost of the
replacement policy exceeds the premium cost of the Mortgage Pool Insurance
Policy, the coverage amount of the replacement policy will be reduced so that
the premium cost therefor will not exceed 100% of the premium cost of the
Mortgage Pool Insurance Policy.


                                      S-72
<PAGE>

     In addition, the pooling and servicing agreement provides that at any time
the servicer may substitute a surety bond, letter of credit, another mortgage
guaranty pool insurance policy or other form of credit enhancement for the
Mortgage Pool Insurance Policy (or any substitute therefor) to the extent
permitted by S&P, Moody's, Fitch and the Certificate Insurer, so long as such
substitution does not adversely affect the ratings described under "Ratings"
herein without regard to the Certificate Insurance Policy. The Mortgage Pool
Insurance Policy will not be available to cover reductions in interest
collections resulting from the application of the Soldiers' and Sailors' Civil
Relief Act of 1940, as amended (the "Relief Act"). See "Certain Legal Aspects
of Loans--Anti-Deficiency Legislation and --Other Limitations on Lenders" in
the Prospectus.

                      THE MORTGAGE POOL INSURANCE COMPANY

     Radian Insurance Inc. ("Radian Insurance") is a Pennsylvania domiciled and
licensed insurer and a wholly-owned subsidiary of Radian Guaranty Inc. ("Radian
Guaranty"). Radian Guaranty is a wholly-owned subsidiary of Radian Group Inc.,
an insurance holding company listed on the New York Stock Exchange. For further
information regarding Radian Insurance investors are directed to the audited
statutory financial statements for the year ended December 31, 1999 on file
with the Pennsylvania Department of Insurance.

     The financial strength of Radian Insurance has been rated "AA" by Standard
& Poor's and "Aa3" by Moody's Investors Service. The rating agency issuing the
rating can withdraw or change its rating at any time.

     The information set forth under "The Mortgage Pool Insurance Company" in
the prospectus supplement has been provided by Radian Insurance. Neither the
depositor, the underwriter, the servicer, the trustee, the Certificate Insurer
nor any of their respective affiliates makes any representation as to the
accuracy or completeness of such information.

                                USE OF PROCEEDS

     The depositor will apply the net proceeds of the sale of the offered
certificates against the purchase price of the mortgage loans.

                   MATERIAL FEDERAL INCOME TAX CONSEQUENCES

     Thacher Proffitt & Wood, counsel to the depositor, has filed with the
depositor's registration statement one or more opinions stating that the
discussion in this section, along with the discussion in the prospectus under
"Material Federal Income Tax Consequences," represents counsel's opinion as to
the material federal income tax consequences of investing in the certificates.

     Assuming compliance with all provisions of the pooling and servicing
agreement, for federal income tax purposes, the trust will be treated as three
separate REMICs. The assets of the lower tier REMIC will consist of the
mortgage loans, and all other property in the trust and the lower tier REMIC
will issue several classes of uncertificated regular interests to the middle
tier REMIC. The middle tier REMIC will issue several classes of uncertificated
regular interests to the upper tier REMIC. The upper tier REMIC will issue the
regular certificates, which will be designated as the regular interests in the
upper tier REMIC. The Class A-R-1 Certificates will represent the beneficial
ownership of the residual interest in the lower tier REMIC, the Class A-R-2
Certificates will represent the beneficial ownership of the residual interest
in the middle tier REMIC and the Class A-R-3 Certificates will represent the
beneficial ownership of the residual interest in the upper tier REMIC. See
"Description of the Certificates--REMIC Structure" in this prospectus
supplement. The regular certificates will be treated as debt instruments issued
by the upper tier REMIC for federal income tax purposes. Income on the regular
certificates must be reported under an accrual method of accounting.

     The Class I-P Certificates will be treated for federal income tax purposes
as having been issued with an amount of original issue discount, or OID, equal
to the difference between their principal balance and their issue price.
Although the tax treatment is not entirely certain, Class X-1, Class II-A-2,
Class X-II,


                                      S-73
<PAGE>

Class III-A-2, Class X-III, Class XB-1 and Class XB-2 Certificates will be
treated as having been issued with OID for federal income tax purposes equal to
the excess of all expected payments of interest on those certificates over
their issue price. Although unclear, a holder of a Class X-1, Class II-A-2,
Class X-II, Class III-A-2, Class X-III, Class XB-1 or Class XB-2 Certificates
may be entitled to deduct a loss to the extent that its remaining basis exceeds
the maximum amount of future payments to which that certificateholder would be
entitled if there were no further prepayments of the mortgage loans. The
remaining classes of regular certificates, depending on their respective issue
prices, as described in the prospectus under "Material Federal Income Tax
Consequences," may be treated as having been issued with OID for federal income
tax purposes. For purposes of determining the amount and rate of accrual of OID
and market discount, the trust intends to assume that there will be prepayments
on the mortgage loans at 100% of the applicable prepayment assumption. No
representation is made as to whether the mortgage loans will prepay at the
foregoing rate or any other rate. See "Yield, Prepayment and Maturity
Considerations" in this prospectus supplement and "Material Federal Income Tax
Consequences" in the prospectus. Computing accruals of OID in the manner
described in the prospectus may, depending on the actual rate of prepayments
during the accrual period, result in the accrual of negative amounts of OID on
the certificates issued with OID in an accrual period. Holders will be entitled
to offset negative accruals of OID only against future OID accrual on those
certificates.

     The IRS has issued regulations under Sections 1271 to 1275 of the Internal
Revenue Code, addressing the treatment of debt instruments issued with OID.
Purchasers of the regular certificates should be aware that the OID regulations
and Section 1272(a)(6) of the Internal Revenue Code do not adequately address
particular issues relevant to, or are not applicable to, securities such as the
regular certificates.

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

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

     Some of the classes of offered certificates may be treated for federal
income tax purposes as having been issued at premium. Whether any holder of one
of those classes of certificates will be treated as holding a certificate with
amortizable bond premium will depend on the certificateholder's purchase price
and the distributions remaining to be made on the certificate at the time of
its acquisition by the certificateholder. Holders of those classes of
certificates should consult their tax advisors regarding the possibility of
making an election to amortize such premium.

     As is described more fully under "Material Federal Income Tax
Consequences" in the prospectus, the offered certificates will represent
qualifying assets under Sections 856(c)(4)(A) and 7701(a)(19)(C) of the
Internal Revenue Code, and net interest income attributable to the offered
certificates will be "interest on obligations secured by mortgages on real
property" within the meaning of Section 856(c)(3)(B) of the Internal Revenue
Code, to the extent the assets of the trust are assets described in these
sections. The regular certificates will represent qualifying assets under
Section 860G(a)(3) if acquired by a REMIC within the prescribed time periods of
the Internal Revenue Code.

SPECIAL TAX CONSIDERATIONS APPLICABLE TO RESIDUAL CERTIFICATES

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

     o   the requirement that any transferee of a Class A-R Certificate provide
         an affidavit representing that the transferee:


                                      S-74
<PAGE>

         o   is not a disqualified organization;

         o   is not acquiring the Class A-R Certificate on behalf of a
             disqualified organization; and

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

     o   a provision that any transfer of a Class A-R Certificate to a
         disqualified organization shall be null and void; and

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

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

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

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

     An individual, trust or estate that holds, whether directly or indirectly
through pass-through entities, a Class A-R Certificate, may have significant
additional gross income with respect to, but may be limited on the
deductibility of, servicing and trustee's fees and other administrative
expenses properly allocable to the REMIC in computing the certificateholder's
regular tax liability and will not be able to deduct those fees or expenses to
any extent in computing the certificateholder's alternative minimum tax
liability. See "Material Federal Income Tax Consequences--REMICs--Taxation of
Owners of REMIC Residual Certificates--Possible Pass-Through of Miscellaneous
Itemized Deductions" in the prospectus.


                                      S-75
<PAGE>

     Purchasers of the Class A-R Certificates are strongly advised to consult
their tax advisors as to the economic and tax consequences of investment in the
Class A-R Certificates.

     For further information regarding the federal income tax consequences of
investing in the Class A-R Certificates, see "Material Federal Income Tax
Consequences--REMICs--Taxation of Owners of REMIC Residual Certificates" in the
prospectus.

                              ERISA CONSIDERATIONS

     Any plan fiduciary which proposes to cause an employee benefit plan
subject to ERISA and/or to Section 4975 of the Internal Revenue Code to acquire
any of the offered certificates should consult with its counsel about the
potential consequences under ERISA, and/or the Internal Revenue Code, of the
plan's acquisition and ownership of those certificates. See "ERISA
Considerations" in the prospectus. Section 406 of ERISA and Section 4975 of the
Internal Revenue Code prohibit parties in interest relating to an employee
benefit plan subject to ERISA and/or to Section 4975 of the Internal Revenue
Code from engaging in specific transactions involving that plan and its assets
unless a statutory, regulatory or administrative exemption applies to the
transaction. Section 4975 of the Internal Revenue Code imposes various excise
taxes on prohibited transactions involving plans and other arrangements,
including, but not limited to, individual retirement accounts, described under
that Section. ERISA authorizes the imposition of civil penalties for prohibited
transactions involving plans not subject to the requirements of Section 4975 of
the Internal Revenue Code.

     Some employee benefit plans, including governmental plans and some church
plans, are not subject to ERISA's requirements. Accordingly, assets of those
plans may be invested in the offered certificates without regard to the ERISA
considerations described in this prospectus supplement and in the prospectus,
subject to the provisions of other applicable federal and state law. Any of
these plans that are qualified and exempt from taxation under Sections 401(a)
and 501(a) of the Internal Revenue Code may nonetheless be subject to the
prohibited transaction rules described in Section 503 of the Internal Revenue
Code.

     Except as noted above, investments by plans are subject to ERISA's general
fiduciary requirements, including the requirement of investment prudence and
diversification and the requirement that a plan's investments be made in
accordance with the documents governing the plan. A fiduciary that decides to
invest the assets of a plan in the offered certificates should consider, among
other factors, the extreme sensitivity of the investment to the rate of
principal payments, including prepayments, on the mortgage loans.

     The U.S. Department of Labor ("DOL") has issued an individual
administrative exemption (the "Exemption"), as described under "ERISA
Considerations" in the prospectus, to the underwriter. The Exemption as
currently in effect generally exempts from the application of certain of the
prohibited transaction provisions of Section 406 of ERISA, and the excise taxes
imposed on such prohibited transactions by Section 4975(a) and (b) of the Code
and Section 502(i) of ERISA, transactions relating to the purchase, sale and
holding of pass-through certificates underwritten by the Underwriter such as
the Group I, Group II and Group III senior certificates, other than the Class
A-R Certificates, and the servicing and operation of asset pools such as the
mortgage pools, provided that the conditions of the Exemption are satisfied.
The purchase of the Group I, Group II and Group III senior certificates, other
than the Class A-R Certificates, by, on behalf of or with the plan assets of
any plan may qualify for exemptive relief under the Exemption as currently in
effect. However, the Exemption contains a number of conditions which must be
met for the Exemption to apply (as described in the prospectus), including the
requirement that any such plan must be an "accredited investor" as defined in
Rule 501(a)(1) of Regulation D of the Securities and Exchange Commission under
the Securities Act of 1933, as amended. A fiduciary of a plan contemplating
purchasing a Group I, Group II or Group III senior certificate, other than the
Class A-R Certificate, must make its own determination that the conditions set
forth in the Exemption will be satisfied with respect to such certificates.

     BECAUSE THE CHARACTERISTICS OF THE CLASS B-1, CLASS XB-1, CLASS B-2, CLASS
XB-2 AND CLASS A-R CERTIFICATES WILL NOT MEET THE REQUIREMENTS OF PTCE 83-1, AS
DESCRIBED IN THE PROSPECTUS, OR THE


                                      S-76
<PAGE>

EXEMPTION (AS CURRENTLY IN EFFECT), AND MAY NOT MEET THE REQUIREMENTS OF ANY
OTHER ISSUED EXEMPTION UNDER ERISA, THE PURCHASE AND HOLDING OF THESE
CERTIFICATES BY A PLAN OR BY INDIVIDUAL RETIREMENT ACCOUNTS OR OTHER PLANS
SUBJECT TO SECTION 4975 OF THE INTERNAL REVENUE CODE MAY RESULT IN PROHIBITED
TRANSACTIONS OR THE IMPOSITION OF EXCISE TAXES OR CIVIL PENALTIES.
CONSEQUENTLY, TRANSFERS OF THE CLASS B-1, CLASS XB-1, CLASS B-2, CLASS XB-2 AND
CLASS A-R CERTIFICATES WILL NOT BE REGISTERED BY THE TRUSTEE UNLESS THE TRUSTEE
RECEIVES THE FOLLOWING:

     o   A REPRESENTATION FROM THE TRANSFEREE OF THAT CERTIFICATE, ACCEPTABLE TO
         AND IN FORM AND SUBSTANCE SATISFACTORY TO THE TRUSTEE, TO THE EFFECT
         THAT TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO SECTION 406
         OF ERISA OR A PLAN OR ARRANGEMENT SUBJECT TO SECTION 4975 OF THE
         INTERNAL REVENUE CODE, NOR A PERSON ACTING ON BEHALF OF THAT PLAN OR
         ARRANGEMENT NOR USING THE ASSETS OF THAT PLAN OR ARRANGEMENT TO EFFECT
         THAT TRANSFER;

     o   IF THE PURCHASER IS AN INSURANCE COMPANY, IN THE CASE OF THE CLASS B-1,
         CLASS B-2, CLASS XB-1 AND CLASS XB-2 CERTIFICATES, A REPRESENTATION
         THAT THE PURCHASER IS AN INSURANCE COMPANY WHICH IS PURCHASING THOSE
         CERTIFICATES WITH FUNDS CONTAINED IN AN "INSURANCE COMPANY GENERAL
         ACCOUNT," AS THAT TERM IS DEFINED IN SECTION V(E) OF PROHIBITED
         TRANSACTION CLASS EXEMPTION 95-60, OR PTCE 95-60, AND THAT THE PURCHASE
         AND HOLDING OF THOSE CERTIFICATES ARE COVERED UNDER SECTIONS I AND III
         OF PTCE 95-60, OR

     o   AN OPINION OF COUNSEL SATISFACTORY TO THE TRUSTEE THAT THE PURCHASE OR
         HOLDING OF THAT CERTIFICATE BY A PLAN, ANY PERSON ACTING ON BEHALF OF A
         PLAN OR USING PLAN'S ASSETS, WILL NOT RESULT IN THE ASSETS OF THE TRUST
         BEING DEEMED TO BE "PLAN ASSETS" AND SUBJECT TO THE PROHIBITED
         TRANSACTION REQUIREMENTS OF ERISA AND THE INTERNAL REVENUE CODE AND
         WILL NOT SUBJECT THE TRUSTEE OR THE SERVICER TO ANY OBLIGATION IN
         ADDITION TO THOSE UNDERTAKEN IN THE POOLING AND SERVICING AGREEMENT.

THE REPRESENTATION AS DESCRIBED ABOVE SHALL BE DEEMED TO HAVE BEEN MADE TO THE
TRUSTEE BY THE TRANSFEREE'S ACCEPTANCE OF A CLASS B-1, CLASS XB-1, CLASS B-2 OR
CLASS XB-2 CERTIFICATE, OR BY ANY BENEFICIAL OWNER WHO PURCHASES AN INTEREST IN
THOSE CERTIFICATES REGISTERED IN BOOK-ENTRY FORM. IN THE EVENT THAT THE
REPRESENTATION IS VIOLATED, OR ANY ATTEMPT TO TRANSFER TO A PLAN OR PERSON
ACTING ON BEHALF OF A PLAN OR USING THAT PLAN'S ASSETS IS ATTEMPTED WITHOUT THE
OPINION OF COUNSEL, THE ATTEMPTED TRANSFER OR ACQUISITION SHALL BE VOID AND OF
NO EFFECT.

     The DOL has proposed certain amendments to the Exemption which, if
published in final form as proposed, would permit the Class B-1, Class B-2,
Class XB-1 and Class XB-2 Certificates to be purchased and held by or on behalf
of, or with plan assets of, a plan if those certificates are rated "BBB--" or
better at the time of purchase. See Department of Labor Exemption Application
No. D-10809, 65 Fed. Reg. 51454 (August 23, 2000). The Exemption amendments
will not apply until they are finalized by the Department of Labor and
published in final form in the Federal Register, but the proposed effective
date is August 23, 2000. Accordingly, the Class B-1, Class B-2, Class XB-1 and
Class XB-2 Certificates may be purchased and held by or on behalf of, or with
plan assets of, any plan without regard to the restrictions set forth in the
preceding paragraph, if:

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

     o   such certificates are rated "BBB--" or better at the time of purchase;
         and

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

There can be no assurance that the Exemption amendments will be published in
final form on any future date or that the final conditions will not be more
restrictive that those proposed. The Trustee, the Depositor, the Seller and the
Servicer will have no obligation to notify any person if or when the Exemption
amendments are published in final form.

     Prospective plan investors should consult with their legal advisors
concerning the impact of ERISA and the Internal Revenue Code, the applicability
of the Exemption, and the potential consequences in their specific
circumstances, prior to making an investment in the offered certificates.
Moreover, each plan


                                      S-77
<PAGE>

fiduciary should determine whether under the general fiduciary standards of
investment prudence and diversification, an investment in the offered
certificates is appropriate for the plan, taking into account the overall
investment policy of the plan and the composition of the plan's investment
portfolio.

                            METHOD OF DISTRIBUTION


     Subject to the terms and conditions described in the underwriting
agreement between the depositor and Donaldson, Lufkin & Jenrette Securities
Corporation, an affiliate of the depositor, the depositor has agreed to sell to
the underwriter, and the underwriter has agreed to purchase from the depositor,
the offered certificates.

     The underwriting agreement provides that the obligation of the underwriter
to pay for and accept delivery of the offered certificates is subject to, among
other things, the receipt of various legal opinions and to the conditions,
among others, that no stop order suspending the effectiveness of the
depositor's registration statement shall be in effect, and that no proceedings
for that purpose shall be pending before or threatened by the SEC.


     The distribution of the offered certificates by the underwriter will be
effected from time to time in one or more negotiated transactions, or
otherwise, at varying prices to be determined, in each case, at the time of
sale. The proceeds to the depositor from the sale of the offered certificates
will be 100% of the initial aggregate Class Principal Balance of the offered
certificates, plus accrued interest, before deducting expenses payable by the
depositor. The underwriter may effect those transactions by selling its
certificates to or through dealers, and those dealers may receive compensation
in the form of underwriting discounts, concessions or commissions from the
underwriter for whom they act as agent. In connection with the sale of the
offered certificates, the underwriter may be deemed to have received
compensation from the depositor in the form of an underwriting discount. The
underwriter and any dealers that participate with the underwriter in the
distribution of the offered certificates may be deemed to be underwriters and
any profit on the resale of the offered certificates positioned by them may be
deemed to be underwriting discounts and commissions under the Securities Act of
1933, as amended.

     The underwriting agreement provides that the depositor will indemnify the
underwriter, and under limited circumstances, the underwriter will indemnify
the depositor, against various civil liabilities under the Securities Act of
1933, as amended, or contribute to payments required to be made for the
indemnification.

     There can be no assurance that a secondary market for the offered
certificates will develop or, if it does develop, that it will continue or will
provide investors with a sufficient level of liquidity. The primary source of
information available to investors concerning the offered certificates will be
monthly statements discussed in the prospectus under "The Agreements--Reports
to Securityholders," which will include information as to the outstanding
principal balance of the offered certificates and the status of the applicable
form of credit enhancement. There can be no assurance that any additional
information regarding the offered certificates will be available through any
other source.

     On August 30, 2000, Credit Suisse First Boston Corporation tentatively
agreed to acquire the parent of the depositor and the underwriter, Donaldson,
Lufkin & Jenrette Inc.

                                 LEGAL MATTERS

     The validity of the certificates, including material federal income tax
consequences and certain ERISA considerations relating to the certificates,
will be passed on for the depositor by Thacher Proffitt & Wood, New York, New
York. Thacher Proffitt & Wood, New York, New York, will pass on specific legal
matters on behalf of the underwriter.


                                      S-78
<PAGE>

                                    RATINGS

     It is a condition of the issuance of the offered certificates that they
receive ratings from Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc. ("S&P") and Fitch, Inc. ("FITCH") as indicated:


<TABLE>
<CAPTION>
                                             RATING AGENCY
                                             --------------
                CLASS                         S&P     FITCH
                --------------------------   -----   ------
                <S>                          <C>     <C>
                  I-A-1 ..................    AAA      AAA
                  X-1 ....................    AAA      AAA
                  I-P ....................    AAA      AAA
                  II-A-1 .................    AAA      AAA
                  II-A-2 .................    AAA      AAA
                  X-II ...................    AAA      AAA
                  III-A-1 ................    AAA      AAA
                  III-A-2 ................    AAA      AAA
                  X-III ..................    AAA      AAA
                  A-R-1 ..................    AAA      AAA
                  A-R-2 ..................    AAA      AAA
                  A-R-3 ..................    AAA      AAA
                  B-1 ....................     AA      AA
                  XB-1 ...................     AA      AA
                  B-2 ....................     A        A
                  XB-2 ...................     A        A
</TABLE>

     The ratings assigned by Fitch to mortgage pass-through certificates
address the likelihood of the receipt by certificateholders of all
distributions to which they are entitled under the transaction structure.
Fitch's ratings reflect its analysis of the riskiness of the mortgage loans and
its analysis of the structure of the transaction as described in the operative
documents. Fitch's ratings do not address the effect on the certificates" yield
attributable to prepayments or recoveries on the underlying mortgage loans. The
rating assigned by Fitch to the Class I-P Certificates only addresses the
return of its Class Principal Balance. The rating assigned by Fitch to the
Class A-R Certificates only addresses the return of its Class Principal Balance
and interest on that class at its stated pass-through rate.

     The ratings assigned by S&P to mortgage pass-through certificates address
the likelihood of the receipt of all distributions on the mortgage loans by the
related certificateholders under the agreements that those certificates are
issued. S&P's ratings take into consideration the credit quality of the related
mortgage pool, including any credit support providers, structural and legal
aspects associated with those certificates, and the extent to which the payment
stream on that mortgage pool is adequate to make payments required by those
certificates. S&P's ratings on those certificates do not, however, constitute a
statement regarding frequency of prepayments on the related mortgage loans.

     The ratings of the rating agencies do not address the possibility that, as
a result of principal prepayments, certificateholders may receive a lower than
anticipated yield. Further, the ratings on the Class X-1, Class II-A-2, Class
X-II, Class III-A-2, Class X-III, Class XB-1 and Class XB-2 Certificates do not
address whether investors will recoup their initial investment. In addition,
the ratings on the Class II-A-1, Class II-A-2, Class III-A-1 and Class III-A-2
Certificates are without regard to the Certificate Insurance Policy.

     The ratings assigned to the offered certificates should be evaluated
independently from similar ratings on other types of securities. A rating is
not a recommendation to buy, sell or hold securities and may be subject to
revision or withdrawal at any time by the rating agencies.

     The depositor has not requested a rating of the offered certificates by
any rating agency other than the S&P and Fitch. There can be no assurance,
however, as to whether any other rating agency will rate


                                      S-79
<PAGE>

the offered certificates or, if it does, what rating would be assigned by that
other rating agency. The rating assigned by that other rating agency to the
offered certificates could be lower than the respective ratings assigned by the
rating agencies.

                                    EXPERTS

     The consolidated balance sheets of MBIA Insurance Corporation and
Subsidiaries as of December 31, 1999 and December 31, 1998 and the related
consolidated statements of income, changes in shareholder's equity, and cash
flows for each of the three years in the period ended December 31, 1999,
incorporated by reference in this prospectus supplement have been incorporated
in this prospectus supplement in reliance on the report of Pricewaterhouse
Coopers LLP, independent accountants, given on the authority of that firm as
experts in accounting and auditing


                                      S-80
<PAGE>

                                    ANNEX I
                 FORM OF CERTIFICATE GUARANTY INSURANCE POLICY

OBLIGATIONS:  DLJ Mortgage Acceptance Corp                 POLICY NUMBER: 33246
              DLJ Mortgage Pass-Through Certificates, Series 2000-S4
              $57,301,561 Class II-A-1 Certificates,
              $38,506,827 Class III-A-1 Certificates,
              Class II-A-2 Certificates and Class III-A-2 Certificates

     MBIA Insurance Corporation (the "Insurer"), in consideration of the
payment of the premium and subject to the terms of this Certificate Guaranty
Insurance Policy (this "Policy"), hereby unconditionally and irrevocably
guarantees to any Owner that an amount equal to each full and complete Insured
Payment will be received from the Insurer by The Chase Manhattan Bank, or its
successors, as trustee for the Owners (the "Trustee"), on behalf of the Owners,
for distribution by the Trustee to each Owner of each Owner's proportionate
share of the Insured Payment. The Insurer's obligations hereunder with respect
to a particular Insured Payment shall be discharged to the extent funds equal
to the applicable Insured Payment are received by the Trustee, whether or not
such funds are properly applied by the Trustee. Insured Payments shall be made
only at the time set forth in this Policy, and no accelerated Insured Payments
shall be made regardless of any acceleration of the Obligations, unless such
acceleration is at the sole option of the Insurer. This Policy does not provide
credit enhancement for any Class of Certificates other than the Class II-A-1,
Class II-A-2, Class III-A-1 and Class III-A-2 Certificates.

     Notwithstanding the foregoing paragraph, this Policy does not cover
shortfalls, if any, attributable to the liability of the Trust, the REMICs or
the Trustee for withholding taxes, if any (including interest and penalties in
respect of any such liability).

     The Insurer will pay any Insured Payment that is a Preference Amount on
the Business Day following receipt on a Business Day by the Fiscal Agent (as
described below) of (a) a certified copy of the order requiring the return of a
preference payment, (b) an opinion of counsel satisfactory to the Insurer that
such order is final and not subject to appeal, (c) an assignment in such form
as is reasonably required by the Insurer, irrevocably assigning to the Insurer
all rights and claims of the Owner relating to or arising under the Obligations
against the debtor which made such preference payment or otherwise with respect
to such preference payment and (d) appropriate instruments to effect the
appointment of the Insurer as agent for such Owner in any legal proceeding
related to such preference payment, such instruments being in a form
satisfactory to the Insurer, provided that if such documents are received after
12:00 noon, New York City time, on such Business Day, they will be deemed to be
received on the following Business Day. Such payments shall be disbursed to the
receiver or trustee in bankruptcy named in the final order of the court
exercising jurisdiction on behalf of the Owner and not to any Owner directly
unless such Owner has returned principal or interest paid on the Obligations to
such receiver or trustee in bankruptcy, in which case such payment shall be
disbursed to such Owner.

     The Insurer will pay any other amount payable hereunder no later than
12:00 noon, New York City time, on the later of the Distribution Date on which
the related Deficiency Amount is due or the second Business Day following
receipt in New York, New York on a Business Day by State Street Bank and Trust
Company, N.A., as Fiscal Agent for the Insurer, or any successor fiscal agent
appointed by the Insurer (the "Fiscal Agent"), of a Notice (as described
below), provided that if such Notice is received after 12:00 noon, New York
City time, on such Business Day, it will be deemed to be received on the
following Business Day. If any such Notice received by the Fiscal Agent is not
in proper form or is otherwise insufficient for the purpose of making claim
hereunder, it shall be deemed not to have been received by the Fiscal Agent for
purposes of this paragraph, and the Insurer or the Fiscal Agent, as the case
may be, shall promptly so advise the Trustee and the Trustee may submit an
amended Notice.

     Insured Payments due hereunder, unless otherwise stated herein, will be
disbursed by the Fiscal Agent to the Trustee on behalf of the Owners by wire
transfer of immediately available funds in the amount of the Insured Payment
less, in respect of Insured Payments related to Preference Amounts, any amount
held by the Trustee for the payment of such Insured Payment and legally
available therefor.


                                      I-1
<PAGE>

     The Fiscal Agent is the agent of the Insurer only, and the Fiscal Agent
shall in no event be liable to Owners for any acts of the Fiscal Agent or any
failure of the Insurer to deposit, or cause to be deposited, sufficient funds
to make payments due under this Policy.

     Subject to the terms of the Agreement, the Insurer will be subrogated to
the rights of each Owner to receive payments under the Obligations to the
extent of any payment by the Insurer under this Policy.

     As used herein, the following terms shall have the following meanings:

     "AGREEMENT" means the Pooling and Servicing Agreement dated as of
September 1, 2000 among Wilshire Credit Corporation as Servicer, DLJ Mortgage
Capital Inc., as Seller, DLJ Mortgage Acceptance Corp., as Depositor, and the
Trustee, as trustee, without regard to any amendment or supplement thereto,
unless such amendment or supplement has been approved in writing by the
Insurer.

     "BUSINESS DAY" means any day other than (a) a Saturday or a Sunday (b) a
day on which the Insurer is closed or (c) a day on which banking institutions
in New York City or in the city in which the Corporate Trust Office of the
Trustee under the Agreement is located are authorized or obligated by law or
executive order to close.

     "DEFICIENCY AMOUNT" means, (i) with respect to any Distribution Date, the
amount, if any, by which the Available Funds for the related loan group is less
than (A) the current interest allocable to the related Obligations, minus (B)
the pro rata portion of any Net Interest Shortfalls allocable to the related
Obligations based on the current interest due on such Distribution Date and
(ii) to the extent unpaid on the Last Scheduled Distribution Date, after taking
into account all distributions to be made on the related Obligations for such
Distribution Date, any remaining Class Principal Balance of the Obligations.

     "INSURED PAYMENT" means (i) as of any Distribution Date, any Deficiency
Amount and (ii) any Preference Amount.

     "NOTICE" means the telephonic or telegraphic notice, promptly confirmed in
writing by facsimile substantially in the form of Exhibit A attached hereto,
the original of which is subsequently delivered by registered or certified
mail, from the Trustee specifying the Insured Payment which shall be due and
owing on the applicable Distribution Date.

     "OWNER" means each Certificateholder (as defined in the Agreement) who, on
the applicable Distribution Date, is entitled under the terms of the applicable
Obligation to payment thereunder.

     "PREFERENCE AMOUNT" means any amount previously distributed to an Owner on
the Obligations that is recoverable and sought to be recovered as a voidable
preference by a trustee in bankruptcy pursuant to the United States Bankruptcy
Code (11 U.S.C.), as amended from time to time, in accordance with a final
nonappealable order of a court having competent jurisdiction.

     Capitalized terms used herein and not otherwise defined herein shall have
the respective meanings set forth in the Agreement as of the date of execution
of this Policy, without giving effect to any subsequent amendment to or
modification of the Agreement unless such amendment or modification has been
approved in writing by the Insurer.

     Any notice hereunder or service of process on the Fiscal Agent may be made
at the address listed below for the Fiscal Agent or such other address as the
Insurer shall specify in writing to the Trustee.

     The notice address of the Fiscal Agent is 15th Floor, 61 Broadway, New
York, New York 10006, Attention: Municipal Registrar and Paying Agency, or such
other address as the Fiscal Agent shall specify to the Trustee in writing.

     THIS POLICY IS BEING ISSUED UNDER AND PURSUANT TO, AND SHALL BE CONSTRUED
UNDER, THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICT
OF LAWS PRINCIPLES THEREOF.

     The insurance provided by this Policy is not covered by the
Property/Casualty Insurance Security Fund specified in Article 76 of the New
York Insurance Law.


                                      I-2
<PAGE>

     This Policy is not cancelable for any reason. The premium on this Policy
is not refundable for any reason, including payment, or provision being made
for payment, prior to maturity of the Obligations.

     IN WITNESS WHEREOF, the Insurer has caused this Policy to be executed and
attested this 29th day of September, 2000.


                                  MBIA INSURANCE CORPORATION


                                 By:
                                    --------------------------------
                                    President



                                 Attest:


                                 By:
                                    --------------------------------
                                    Assistant Secretary









                                      I-3
<PAGE>











                     [THIS PAGE INTENTIONALLY LEFT BLANK.]












<PAGE>

                                   EXHIBIT A


                       TO CERTIFICATE GUARANTY INSURANCE
                             POLICY NUMBER: 33246

                       NOTICE UNDER CERTIFICATE GUARANTY
                        INSURANCE POLICY NUMBER: 33246

State Street Bank and Trust Company, N.A., as Fiscal Agent
 for MBIA Insurance Corporation
15th Floor
61 Broadway
New York, NY 10006
Attention: Municipal Registrar and
 Paying Agency

MBIA Insurance Corporation
113 King Street
Armonk, NY 10504

     The undersigned, a duly authorized officer of [NAME OF TRUSTEE], as
trustee (the "Trustee"), hereby certifies to State Street Bank and Trust
Company, N.A. (the "Fiscal Agent") and MBIA Insurance Corporation (the
"Insurer"), with reference to Certificate Guaranty Insurance Policy Number:
33246 (the "Policy") issued by the Insurer in respect of the DLJ Mortgage
Acceptance Corp. DLJ Mortgage Pass-Through Certificates, Series 2000-S4
$57,301,561 Class II-A-1 Certificates, $38,506,827 Class III-A-1 Certificates,
Class II-A-2 Certificates and Class III-A-2 Certificates] (the "Obligations"),
that:

   (a)        the Trustee is the trustee under the Pooling and Servicing
              Agreement dated as of September 1, 2000 among Wilshire Credit
              Corporation as servicer, DLJ Mortgage Capital, Inc. as seller,
              DLJ Mortgage Acceptance Corp., as Depositor and the Trustee, as
              trustee for the Owners;

   (b)        the amount due under clause (i) of the definition of Deficiency
              Amount for the Distribution Date occurring on [    ] (the
              "Applicable Distribution Date") is $[   ];

   (c)        the amount due under clause (ii) of the definition of Deficiency
              Amount for the Applicable Distribution Date is $[   ];

   (d)        the sum of the amounts listed in paragraphs (b) and (c) above is
              $[   ] (the "Deficiency Amount");

   (e)        the amount of previously distributed payments on the Obligations
              that is recoverable and sought to be recovered as a voidable
              preference by a trustee in bankruptcy pursuant to the Bankruptcy
              Code in accordance with a final nonappealable order of a court
              having competent jurisdiction is $[   ] (the "Preference
              Amount");

   (f)        the total Insured Payment due is $[   ], which amount equals the
              sum of the Deficiency Amount and the Preference Amount;

   (g)        the Trustee is making a claim under and pursuant to the terms of
              the Policy for the dollar amount of the Insured Payment set forth
              in (d) above to be applied to the payment of the Deficiency
              Amount for the Applicable Distribution Date in accordance with
              the Agreement and for the dollar amount of the Insured Payment
              set forth in (e) above to be applied to the payment of any
              Preference Amount; and

   (h)        the Trustee directs that payment of the Insured Payment be made
              to the following account by bank wire transfer of federal or
              other immediately available funds in accordance with the terms of
              the Policy: [TRUSTEE'S ACCOUNT NUMBER].

     Any capitalized term used in this Notice and not otherwise defined herein
shall have the meaning assigned thereto in the Policy.


                                      A-1
<PAGE>

Any Person Who Knowingly And With Intent To Defraud Any Insurance Company Or
Other Person Files An Application For Insurance Or Statement Of Claim
Containing Any Materially False Information, Or Conceals For The Purpose Of
Misleading, Information Concerning Any Fact Material Thereto, Commits A
Fraudulent Insurance Act, Which Is A Crime, And Shall Also Be Subject To A
Civil Penalty Not To Exceed Five Thousand Dollars And The Stated Value Of The
Claim For Each Such Violation.

     IN WITNESS WHEREOF, the Trustee has executed and delivered this Notice
under the Policy as of the [  ] day of [    ], [  ].


                               [NAME OF TRUSTEE], as Trustee


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

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




                                      A-2
<PAGE>
P R O S P E C T U S




                         DLJ MORTGAGE ACCEPTANCE CORP.


                                   DEPOSITOR



                       MORTGAGE PASS-THROUGH CERTIFICATES
                             MORTGAGE-BACKED NOTES


You should carefully consider the Risk Factors beginning on Page 3 in this
prospectus.

THIS PROSPECTUS TOGETHER WITH THE ACCOMPANYING PROSPECTUS SUPPLEMENT WILL
CONSTITUTE THE FULL PROSPECTUS.

THE DEPOSITOR MAY PERIODICALLY ESTABLISH TRUSTS TO ISSUE SECURITIES IN SERIES
BACKED BY MORTGAGE COLLATERAL.


EACH TRUST WILL CONSIST PRIMARILY OF:


     o  One or more pools of mortgage loans secured by residential properties,
        loans secured by manufactured homes, or participation interests in those
        loans.

     o  Agency mortgage-backed securities.

     o  Private mortgage-backed securities.

     THE SECURITIES IN A SERIES:

     o  Will consist of certificates or notes representing interests in, or
        indebtedness of, a trust and will be paid only from the assets of that
        trust.

     o  May include multiple classes of securities with differing payment terms
        and priorities.

     o  Will have the benefit of credit enhancement.


The securities may be offered to the public through several different methods.
Donaldson, Lufkin & Jenrette Securities Corporation, an affiliate of DLJ
Mortgage Acceptance Corp., may act as agent or underwriter in connection with
the sale of those securities. This prospectus and the accompanying prospectus
supplement may be used by Donaldson, Lufkin & Jenrette Securities Corporation
in secondary market transactions in connection with the offer and sale of any
securities. Donaldson, Lufkin & Jenrette Securities Corporation may act as
principal or agent in those transactions and those sales will be made at
prevailing market prices or otherwise.


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



                                 March 2, 2000
<PAGE>

                               TABLE OF CONTENTS




<TABLE>
<CAPTION>
                                                               PAGE
                                                            ---------
<S>                                                         <C>
RISK FACTORS ............................................        3
IMPORTANT NOTICE ABOUT
   INFORMATION PRESENTED IN THIS
   PROSPECTUS AND THE
   ACCOMPANYING PROSPECTUS
   SUPPLEMENT ...........................................        7
DESCRIPTION OF THE SECURITIES ...........................        8
      General ...........................................        8
      Distributions on the Securities ...................        8
      Categories of Classes of Securities ...............       10
      Funding Account ...................................       12
      Optional Termination ..............................       13
      Book-Entry Registration ...........................       13
YIELD, PREPAYMENT AND MATURITY
   CONSIDERATIONS .......................................       14
      Payment Delays ....................................       14
      Principal Prepayments .............................       14
      Timing of Reduction of Principal Balance ..........       14
      Interest or Principal Only Securities .............       15
      Funding Account ...................................       15
      Final Scheduled Distribution Date .................       15
      Prepayments and Weighted Average Life .............       15
      Other Factors Affecting Weighted Average
        Life ............................................       16
THE TRUST FUNDS .........................................       19
      Private Mortgage-Backed Securities ................       20
      The Agency Securities .............................       22
      The Mortgage Loans ................................       24
      The Manufactured Home Loans .......................       29
      Collection Account and Certificate
        Account .........................................       30
      Other Funds or Accounts ...........................       31
LOAN UNDERWRITING PROCEDURES
   AND STANDARDS ........................................       31
      Underwriting Standards ............................       31
      Loss Experience ...................................       34
      Representations and Warranties ....................       34
SERVICING OF LOANS ......................................       36
      General ...........................................       36
      Collection Procedures; Escrow Accounts.............       37
      Deposits to and Withdrawals from the
        Collection Account ..............................       37
      Servicing Accounts ................................       39
      Buy-Down Loans, GPM Loans and Other
        Subsidized Loans ................................       39
      Advances ..........................................       40
      Maintenance of Insurance Policies and
        Other Servicing Procedures ......................       40
      Presentation of Claims; Realization On
        Defaulted Loans .................................       43
      Enforcement of Due-On-Sale Clauses ................       44
      Servicing Compensation and Payment of
        Expenses ........................................       44
      Evidence as to Compliance .........................       45
      Matters Regarding the Master Servicer and
        the Depositor ...................................       45
CREDIT SUPPORT ..........................................       47
      General ...........................................       47
      Subordinate Securities; Subordination
        Reserve Fund ....................................       47
      Overcollateralization .............................       48
      Cross-Support Features ............................       49
      Insurance .........................................       49


</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                                               PAGE
                                                            ---------
<S>                                                         <C>
      Letter of Credit ..................................       49
      Financial Guarantee Insurance .....................       50
      Reserve Funds .....................................       50
DESCRIPTION OF MORTGAGE AND
   OTHER INSURANCE ......................................       50
      Mortgage Insurance on the Loans ...................       51
      Hazard Insurance on the Loans .....................       54
      Bankruptcy Bond ...................................       55
      Repurchase Bond ...................................       56
THE AGREEMENTS ..........................................       56
      Assignment of Mortgage Assets .....................       56
      Repurchase and Substitution of Loans ..............       59
      Reports to Securityholders ........................       60
      Investment of Funds ...............................       61
      Event of Default and Rights in the Case of
        Events of Default ...............................       62
      The Owner Trustee .................................       64
      The Trustee .......................................       64
      Duties of the Trustee .............................       65
      Resignation of Trustee ............................       65
      Certificate Account ...............................       65
      Expense Reserve Fund ..............................       66
      Amendment of Agreements ...........................       66
      Voting Rights .....................................       67
      REMIC Administrator ...............................       67
      Termination .......................................       67
LEGAL ASPECTS OF LOANS ..................................       69
      Cooperative Loans .................................       69
      Tax Aspects of Cooperative Ownership ..............       71
      Foreclosure on Mortgage Loans .....................       71
      Realizing On Cooperative Loan Security ............       73
      Rights of Redemption ..............................       74
      Anti-Deficiency Legislation and Other
        Limitations on Lenders ..........................       74
      Leasehold Considerations ..........................       76
      Soldiers' and Sailors' Civil Relief Act ...........       77
      Junior Mortgages; Rights of Senior
        Mortgagees ......................................       77
      Due-on-sale Clauses in Mortgage Loans .............       78
      Enforceability of Prepayment and Late
        Payment Fees ....................................       79
      Equitable Limitations on Remedies .................       79
      Applicability of Usury Laws .......................       79
      Adjustable Interest Rate Loans ....................       80
      Environmental Legislation .........................       80
      Forfeitures in Drug and RICO
        Proceedings .....................................       81
      Negative Amortization Loans .......................       81
MATERIAL FEDERAL INCOME TAX
   CONSEQUENCES .........................................       82
      General ...........................................       82
      REMICs ............................................       82
      Notes .............................................       99
STATE AND OTHER TAX
   CONSEQUENCES .........................................      100
ERISA CONSIDERATIONS ....................................      100
LEGAL INVESTMENT ........................................      106
LEGAL MATTERS ...........................................      108
THE DEPOSITOR ...........................................      108
USE OF PROCEEDS .........................................      108
PLAN OF DISTRIBUTION ....................................      108
GLOSSARY ................................................      110
</TABLE>

                                       2
<PAGE>

                                 RISK FACTORS

     THE PROSPECTUS AND RELATED PROSPECTUS SUPPLEMENT WILL DESCRIBE THE
MATERIAL RISK FACTORS RELATED TO YOUR SECURITIES. THE SECURITIES OFFERED UNDER
THIS PROSPECTUS AND THE RELATED PROSPECTUS SUPPLEMENT ARE COMPLEX SECURITIES.
YOU SHOULD POSSESS, EITHER ALONE OR TOGETHER WITH AN INVESTMENT ADVISOR, THE
EXPERTISE NECESSARY TO EVALUATE THE INFORMATION CONTAINED IN THIS PROSPECTUS
AND THE PROSPECTUS SUPPLEMENT IN THE CONTEXT OF YOUR FINANCIAL SITUATION AND
TOLERANCE FOR RISK.


THERE IS NO SOURCE OF PAYMENTS  When you buy a security, you will not own an
FOR YOUR SECURITIES OTHER THAN  interest in or a debt obligation of DLJ Mortgage
PAYMENTS ON THE MORTGAGE        Acceptance Corp., the master servicer or any of
LOANS IN THE TRUST AND ANY      their affiliates. You will own an interest in
CREDIT ENHANCEMENT              the trust in the case of a series of
                                certificates, or you will be entitled to
                                proceeds from the trust established in the case
                                of a series of notes. Your payments come only
                                from assets in the trust. Therefore, the
                                mortgagors' payments on the mortgage loans
                                included in the trust (and any credit
                                enhancements) will be the sole source of
                                payments to you. If those amounts are
                                insufficient to make required payments of
                                interest or principal to you, there is no other
                                source of payments. Moreover, no governmental
                                agency either guarantees or insures payments on
                                the securities or any of the mortgage loans.

YOU BEAR THE RISK OF MORTGAGOR  Because your securities are backed by the
DEFAULTS; SOME KINDS OF         mortgage loans, your investment may be
MORTGAGE LOANS MAY BE           affected by a decline in real estate values
ESPECIALLY PRONE TO             and changes in individual mortgagor's financial
DEFAULTS                        conditions. You should be aware that the value
                                of the mortgaged properties may decline. If the
                                outstanding balance of a mortgage loan and any
                                secondary financing on the underlying property
                                is greater than the value of the property, there
                                is an increased risk of delinquency, foreclosure
                                and losses. To the extent your securities are
                                not covered by credit enhancements, you will
                                bear all of the risks resulting from defaults by
                                mortgagors. In addition, several types of
                                mortgage loans which have higher than average
                                rates of default or loss may be included in the
                                trust that issues your certificate or note. The
                                following types of loans may be included:

                                o mortgage loans that are subject to "negative
                                  amortization". The principal balances of these
                                  loans may be increased to amounts greater than
                                  the value of the underlying property. This
                                  increases the likelihood of default;

                                o mortgage loans that do not fully amortize over
                                  their terms to maturity which are sometimes
                                  referred to as balloon loans. Balloon loans
                                  involve a greater degree of risk because the
                                  ability of a mortgagor to make this final
                                  payment typically depends on the ability to
                                  refinance the loan or sell the related
                                  mortgaged property;

                                o adjustable rate mortgage loans and other
                                  mortgage loans that provide for escalating or
                                  variable payments by the mortgagor. The
                                  mortgagor may have qualified for those loans
                                  based on an income level sufficient to make
                                  the initial payments only. As the payments
                                  increase, the likelihood of default will
                                  increase;


                                       3
<PAGE>

                                o loans secured by second or more junior liens.
                                  The cost of foreclosure on these loans
                                  compared to the potential foreclosure
                                  proceeds, after repaying all senior liens, may
                                  cause these loans to be effectively unsecured;
                                  and

                                o mortgage loans that are concentrated in one or
                                  more regions, States or zip code areas of the
                                  United States. Those geographic units may
                                  experience weak economic conditions and
                                  housing markets. This may cause higher rates
                                  of loss and delinquency. See "The Mortgage
                                  Pool" in the prospectus supplement to see if
                                  any of these or other types of special risk
                                  loans are included in the mortgage pool
                                  applicable to your securities.


CREDIT ENHANCEMENTS MAY BE     The prospectus supplement related to your
LIMITED OR REDUCED AND         securities may specify that credit enhancements
THIS MAY CAUSE YOUR            will provide some protection to cover various
SECURITIES TO BEAR MORE RISK   losses on the underlying mortgage loans. The
OF MORTGAGOR DEFAULTS          forms of credit enhancement include (but are not
                               limited to) the following: subordination of one
                               or more classes of securities to other classes of
                               securities in the same series evidencing
                               beneficial ownership in the same pool of
                               collateral or different pools; having assets in
                               the trust with a greater amount of aggregate
                               principal balance than the aggregate principal
                               balance of the securities in a series; an
                               insurance policy on a particular class of
                               securities; a letter of credit; a mortgage pool
                               insurance policy; a reserve fund; or any
                               combination of the above. See "Credit Support" in
                               this prospectus. See also "Credit Enhancement" in
                               the prospectus supplement in order to see what
                               forms of credit enhancements apply to your
                               securities.

                               Regardless of the form of credit enhancement, an
                               investor should be aware that:

                               o  The amount of coverage is usually limited;

                               o  The amount of coverage will usually be
                                  reduced over time according to a schedule or
                                  formula;

                               o  The particular form of credit enhancements
                                  may provide coverage only to some types of
                                  losses on the mortgage loans, and not to
                                  other types of losses;

                               The particular form of credit enhancements may
                               provide coverage only to some certificates or
                               notes and not other securities of the same
                               series; and if the applicable rating agencies
                               believe that the rating on the securities will
                               not be adversely affected, some types of credit
                               enhancements may be reduced or terminated.

THE RATINGS OF YOUR SECURITIES Any class of securities issued under this
MAY BE LOWERED OR WITHDRAWN,   prospectus and the accompanying prospectus
AND DO NOT TAKE INTO ACCOUNT   supplement will be rated in one of the four
RISK OTHER THAN CREDIT RISKS   highest rating categories of at least one
WHICH YOU WILL BEAR            nationally recognized rating agency. A rating
                               is based on the adequacy of the value of the
                               trust assets and any credit enhancement for that
                               class, and reflects the rating agency's
                               assessment of how likely it is that holders of
                               the class of securities will receive the
                               payments to which they are entitled. A rating
                               does not constitute an


                                       4
<PAGE>

                               assessment of how likely it is that principal
                               prepayments on the underlying loans will be
                               made, the degree to which the rate of
                               prepayments might differ from that originally
                               anticipated, or the likelihood that the
                               securities will be redeemed early. A rating is
                               not a recommendation to purchase, hold, or sell
                               securities because it does not address the
                               market price of the securities or the
                               suitability of the securities for any particular
                               investor.

                               A rating may not remain in effect for any given
                               period of time and the rating agency could lower
                               or withdraw the rating entirely in the future.
                               For example, the rating agency could lower or
                               withdraw its rating due to:

                               o a decrease in the adequacy of the value of the
                                 trust assets or any related credit enhancement,
                                 an adverse change in the financial or other
                                 condition of a credit enhancement provider, or

                               o a change in the rating of the credit
                                 enhancement provider's long-term debt.

                               The amount, type, and nature of credit
                               enhancement established for a class of
                               securities will be determined on the basis of
                               criteria established by each rating agency
                               rating classes of the securities. These criteria
                               are sometimes based on an actuarial analysis of
                               the behavior of similar loans in a larger group.
                               That analysis is often the basis on which each
                               rating agency determines the amount of credit
                               enhancement required for a class. The historical
                               data supporting any actuarial analysis may not
                               accurately reflect future experience, and the
                               data derived from a large pool of similar loans
                               may not accurately predict the delinquency,
                               foreclosure, or loss experience of any a
                               particular pool of mortgage loans.

YOUR YIELD MAY BE REDUCED      DLJ Mortgage Acceptance Corp., the master
DUE TO THE OPTIONAL            servicer or another entity may elect to
REDEMPTION OF THE              repurchase all of the assets of the trust if the
SECURITIES OR THE OPTIONAL     aggregate outstanding principal balance of those
REPURCHASE OF UNDERLYING       assets is less than a percentage of their
MORTGAGE LOANS                 initial outstanding principal amount specified
                               in the prospectus supplement. This kind of event
                               will subject the trust related to your
                               securities to early retirement and would affect
                               the average life and yield of each class of
                               securities in those series. See "Yield,
                               Prepayment and Maturity Considerations" in this
                               prospectus and in the accompanying prospectus
                               supplement.

THE YIELD, MARKET PRICE,       A trust may include one or more financial
RATING AND LIQUIDITY OF YOUR   instruments including interest rate or other swap
SECURITIES MAY BE REDUCED IF   agreements and interest rate cap or floor
THE PROVIDER OF ANY FINANCIAL  agreements. These financial instruments provide
INSTRUMENT DEFAULTS OR IS      protection against some types of risks or provide
DOWNGRADED                     specific cashflow characteristics for one or
                               more classes of a series. The protection or
                               benefit to be provided by any specific financial
                               instrument will be dependent on, among other
                               things, the credit strength of the provider of
                               that financial instrument. If that provider were
                               to be unable or unwilling to perform its
                               obligations under the financial instrument, the
                               securityholders of the


                                       5
<PAGE>

                               applicable class or classes would bear that
                               credit risk. This could cause a material adverse
                               effect on the yield to maturity, the rating or
                               the market price and liquidity for that class.
                               For example, suppose a financial instrument is
                               designed to cover the risk that the interest
                               rates on the mortgage assets that adjust based
                               on one index will be less than the interest rate
                               payable on the securities based on another
                               index. If that financial instrument does not
                               perform, then the investors will bear basis
                               risk, or the risk that their yield will be
                               reduced if the first index declines relative to
                               the second. Even if the provider of a financial
                               instrument performs its obligations under that
                               financial instrument, a withdrawal or reduction
                               in a credit rating assigned to that provider may
                               adversely affect the rating or the market price
                               and liquidity of the applicable class or classes
                               of securities.





















                                       6
<PAGE>

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


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

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

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

     IF THE TERMS OF A PARTICULAR SERIES OF SECURITIES VARY BETWEEN THIS
PROSPECTUS AND THE ACCOMPANYING PROSPECTUS SUPPLEMENT, YOU SHOULD RELY ON THE
INFORMATION IN THE PROSPECTUS SUPPLEMENT.

     You should rely only on the information provided in this prospectus and
the accompanying prospectus supplement, including the information incorporated
by reference. We have not authorized anyone to provide you with different
information. We are not offering the securities in any state where the offer is
not permitted.

     We include cross-references in this prospectus and the accompanying
prospectus supplement to captions in these materials where you can find further
related discussions. The following Table of Contents and the Table of Contents
included in the accompanying prospectus supplement provide the pages on which
these captions are located.

     You can find a listing of definitions for capitalized terms used in this
prospectus under the caption "Glossary" beginning on page 102.











                                       7
<PAGE>

                         DESCRIPTION OF THE SECURITIES


GENERAL

     The securities will be issued in one or more series. Each series of
certificates will be issued under separate pooling and servicing agreements
among the depositor, the master servicer and the trustee for the related series
identified in the related prospectus supplement. Each series of notes will be
issued under separate indentures between the related issuer and the trustee for
the related series identified in the related prospectus supplement. The trust
for each series of notes will be created under an owner trust agreement between
the depositor and the owner trustee. The following summaries describe
provisions common to each series. The summaries do not purport to be complete,
but together with the related prospectus supplement they describe the material
provisions of the agreements relating to each series.

     Each series will consist of one or more classes of securities, one or more
of which may consist of accrual securities, floating rate securities, interest
only securities or principal only securities. A series may also include one or
more classes of subordinate securities. A class of subordinate securities will
be offered by this prospectus and by the related prospectus supplement, as
specified, only if rated by a rating agency in at least its fourth highest
applicable rating category. If stated in the related prospectus supplement, the
mortgage assets in a trust may be divided into multiple groups of individual
mortgage assets, or asset groups, which share similar characteristics. These
mortgage assets are aggregated into separate groups and the securities of each
separate class will evidence beneficial ownership of, or be secured by, each
corresponding asset group.

     The securities for each series will be issued in fully registered form, in
the minimum original principal amount, notional amount or percentage interest
specified in the related prospectus supplement. The transfer of the securities
may be registered, and the securities may be exchanged, without the payment of
any service charge payable in connection with the registration of transfer or
exchange. However, the trustee may require payment of a sum sufficient to cover
any tax or governmental charge that may be imposed in connection with any
transfer or exchange of securities. If stated in the related prospectus
supplement, one or more classes of a series may be available in book-entry form
only.


DISTRIBUTIONS ON THE SECURITIES

     Commencing on the date specified in the related prospectus supplement,
distributions of principal and interest on the securities will be made on each
distribution date to the extent of the Available Distribution Amount as
described in the related prospectus supplement.

     Distributions of interest on securities which receive interest will be
made periodically at the intervals and at the security interest rate specified
or, for floating rate securities, determined in the manner described in the
related prospectus supplement. Interest on the securities will, be calculated
as described in the related prospectus supplement.

     Distributions of principal of and interest on securities of a series will
be made by check mailed to securityholders of that series registered on the
close of business on the record date specified in the related prospectus
supplement at their addresses appearing on the security register. However,
distributions may be made by wire transfer in the circumstances described in
the related prospectus supplement, and the final distribution in retirement of
a security will be made only on presentation and surrender of that security at
the corporate trust office of the trustee for that series or another office of
the trustee as specified in the prospectus supplement. If specified in the
related prospectus supplement, the securities of a series or some classes of a
series may be available only in book-entry form. See "Book-Entry Registration"
in this prospectus.

     For information regarding reports to be furnished to securityholders
concerning a distribution, see "The Agreements--Reports to Securityholders."

     Single Class Series. For a series other than a multiple class series,
distributions on the securities on each distribution date will, in most cases,
be allocated to each security entitled to those distributions on the basis of
the undivided percentage interest evidenced by that security in the trust or on
the basis of


                                       8
<PAGE>

their outstanding principal amounts or notional amounts. If the mortgage assets
for a series have adjustable or variable interest or pass-through rates, then
the security interest rate of the related securities may also vary, due to
changes in those rates and due to prepayments on loans comprising or underlying
the related mortgage assets. If the mortgage assets for a series have fixed
interest or pass-through rates, then the security interest rate on the related
securities may be fixed, or may vary, to the extent prepayments cause changes
in the weighted average interest rate or pass-through rate of the mortgage
assets. If the mortgage assets have lifetime or periodic adjustment caps on
their respective pass-through rates, then the security interest rate on the
related securities may also reflect those caps.

     Multiple Class Series. Each security of a multiple class series will have
a principal amount or a notional amount and a specified security interest rate,
which may be zero. Interest distributions on a multiple class series will be
made on each security entitled to an interest distribution on each distribution
date at the security interest rate specified or. For floating rate securities,
interest distributions will be determined as described in the related
prospectus supplement, to the extent funds are available in the Certificate
Account, subject to any subordination of the rights of any subordinate
securities to receive current distributions. See "Subordinate Securities" and
"Credit Support" in this prospectus.

     Interest on all securities of a multiple class series currently entitled
to receive interest will be distributed on the distribution date specified in
the related prospectus supplement, to the extent funds are available in the
Certificate Account, subject to any subordination of the rights of any
subordinate class to receive current distributions. See "Subordinate
Securities" and "Credit Support" in this prospectus. Distributions of interest
on a class of accrual securities will commence only after the related Accrual
Termination Date. On each distribution date prior to and including the Accrual
Termination Date, interest on the class of accrual securities will accrue and
the amount of interest accrued on that distribution date will be added to the
principal balance of that class on the related distribution date. On each
distribution date after the Accrual Termination Date, interest distributions
will be made on classes of accrual securities on the basis of the current
principal balance of that class.

     The securities of a multiple class series may include one or more classes
of floating rate securities. The security interest rate of a floating rate
security will be a variable or adjustable rate, subject to a maximum floating
rate, a minimum floating rate, or both. For each class of floating rate
securities, the related prospectus supplement will describe the initial
floating rate or the method of determining it, the interest accrual period, and
the formula, index, or other method by which the floating rate will be
determined.

     A series may include one or more classes of interest only securities,
principal only securities, or both. Payments received from the mortgage assets
will be allocated on the basis of the interest of each class in the principal
component of the distributions, the interest component of the distributions, or
both. Those distributions will be further allocated on a pro rata basis among
the securities within each class.

     In the case of a multiple class series, the timing, sequential order,
priority of payment or amount of distributions of principal, and any schedule
or formula or other provisions applicable to any of those determinations for
each class of securities shall be as described in the related prospectus
supplement. A multiple class series may contain two or more classes of
securities as to which distributions of principal or interest or both on any
class may be made on the occurrence of specified events, in accordance with a
schedule or formula, including planned amortization classes and targeted
amortization classes, or on the basis of collections from designated portions
of the trust.

     Subordinate Securities. One or more classes of a series may consist of
subordinate securities. Subordinate securities may be included in a series to
provide credit support as described in this prospectus under "Credit Support"
in lieu of or in addition to other forms of credit support. The extent of
subordination of a class of subordinate securities may be limited as described
in the related prospectus supplement. See "Credit Support." If the mortgage
assets are divided into separate asset groups with separate classes of
securities, credit support may be provided by a cross-support feature which
requires that distributions be made to senior securities evidencing beneficial
ownership of one asset group prior to making distributions on subordinate
securities evidencing a beneficial ownership interest in another asset group
within the trust. Subordinate securities will not be offered by this prospectus
or by the related


                                       9
<PAGE>

prospectus supplement unless they are rated in one of the four highest rating
categories by at least one rating agency. As to any series of notes, the equity
certificates, insofar as they represent the beneficial ownership interest in
the issuer, will be subordinate to the related notes.


CATEGORIES OF CLASSES OF SECURITIES


     In general, classes of pass-through securities fall into different
categories. The following chart identifies and describes some typical
categories. The prospectus supplement for a series of securities may identify
the classes which comprise the series by reference to the following categories.





<TABLE>
<CAPTION>
                                                                 DESCRIPTION
          CATEGORIES OF CLASSES                                PRINCIPAL TYPES
-----------------------------------------   -----------------------------------------------------
<S>                                         <C>
Accretion directed ......................   A class that receives principal payments from the
                                            accreted interest from specified accrual classes.
                                            An accretion directed class also may receive
                                            principal payments from principal paid on the
                                            underlying mortgage assets or other assets of the
                                            trust fund for the related series.

Component securities ....................   A class consisting of "components." The
                                            components of a class of component securities
                                            may have different principal and interest payment
                                            characteristics but together constitute a single
                                            class. Each component of a class of component
                                            securities may be identified as falling into one or
                                            more of the categories in this chart.

Notional amount securities ..............   A class having no principal balance and bearing
                                            interest on the related notional amount. The
                                            notional amount is used for purposes of the
                                            determination of interest distributions.

Planned principal class or PACs .........   A class that is designed to receive principal
                                            payments using a predetermined principal balance
                                            schedule derived by assuming two constant
                                            prepayment rates for the underlying mortgage
                                            assets. These two rates are the endpoints for the
                                            "structuring range" for the planned principal class.
                                            The planned principal classes in any series of
                                            securities may be subdivided into different
                                            categories, for example, primary planned principal
                                            classes, secondary planned principal classes and
                                            so forth, having different effective structuring
                                            ranges and different principal payment priorities.
                                            The structuring range for the secondary planned
                                            principal class of a series of securities will be
                                            narrower than that for the primary planned
                                            principal class of the series.
</TABLE>

                                       10
<PAGE>


<TABLE>
<CAPTION>
                                                                     DESCRIPTION
            CATEGORIES OF CLASSES                                  PRINCIPAL TYPES
--------------------------------------------   -------------------------------------------------------
<S>                                            <C>
Scheduled principal class ..................   A class that is designed to receive principal
                                               payments using a predetermined principal balance
                                               but is not designated as a planned principal class
                                               or targeted principal class. In many cases, the
                                               schedule is derived by assuming two constant
                                               prepayment rates for the underlying mortgage
                                               assets. These two rates are the endpoints for the
                                               "structuring range" for the scheduled principal
                                               class.

Sequential pay .............................   Classes that receive principal payments in a
                                               prescribed sequence, that do not have
                                               predetermined principal balance schedules and
                                               that under all circumstances receive payments of
                                               principal continuously from the first distribution
                                               date on which they receive principal payments
                                               before or after all other classes in the same series
                                               of securities may be identified as a sequential pay
                                               class.

Strip ......................................   A class that receives a constant proportion, or
                                               "strip," of the principal payments on the
                                               underlying mortgage assets or other assets of the
                                               trust fund.

Support class (also sometimes referred to as   A class that receives principal payments on any
 "companion classes") ......................   distribution date only if scheduled payments have
                                               been made on specified planned principal classes,
                                               targeted principal classes or scheduled principal
                                               classes.

Targeted principal class or TACs ...........   A class that is designed to receive principal
                                               payments using a predetermined principal balance
                                               schedule derived by assuming a single constant
                                               prepayment rate for the underlying mortgage
                                               assets.

                                                                   INTEREST TYPES
                                               -------------------------------------------------------
Lockout ....................................   A senior class that does not receive principal
                                               payments for a specific period of time.

Fixed rate .................................   A class with an interest rate that is fixed
                                               throughout the life of the class.

Floating rate ..............................   A class with an interest rate that resets periodically
                                               based on a designated index and that varies
                                               inversely with changes in the index.

Inverse floating rate ......................   A class with an interest rate that resets periodically
                                               based on a designated index that varies directly
                                               with changes in the index.
</TABLE>

                                       11
<PAGE>


<TABLE>
<CAPTION>
                                                   DESCRIPTION
  CATEGORIES OF CLASSES                          PRINCIPAL TYPES
-------------------------   --------------------------------------------------------
<S>                         <C>
Variable rate ...........   A class with an interest rate that resets periodically
                            and is calculated by reference to the rate or rates
                            of interest applicable to specified assets or
                            instruments, for example, the mortgage rates borne
                            by the underlying mortgage loans.

Interest only ...........   A class that receives some or all of the interest
                            payments made on the underlying mortgage assets
                            or other assets of the trust fund and little or no
                            principal. Interest only classes have either a
                            nominal principal balance or a notional amount.
                            A nominal principal balance represents actual
                            principal that will be paid on the class. It is
                            referred to as nominal since it is extremely small
                            compared to other classes. A notional amount is
                            the amount used as a reference to calculate the
                            amount of interest due on an interest only class
                            that is not entitled to any distributions of principal.

Principal only ..........   A class that does not bear interest and is entitled
                            to receive only distributions of principal.

Partial accrual .........   A class that accretes a portion of the amount of
                            accrued interest on it, which amount will be added
                            to the principal balance of the class on each
                            applicable distribution date, with the remainder
                            of the accrued interest to be distributed currently
                            as interest on the class. The accretion may continue
                            until a specified event has occurred or until the
                            partial accrual class is retired.

Accrual .................   A class that accretes the amount of accrued
                            interest otherwise distributable on the class, which
                            amount will be added as principal to the principal
                            balance of the class on each applicable distribution
                            date. The accretion may continue until some
                            specified event has occurred or until the accrual
                            class is retired.
</TABLE>

FUNDING ACCOUNT

     The related agreement may provide for the transfer by the seller of
additional loans to the related trust after the closing date. The additional
loans will be required to conform to the requirements described in the related
prospectus supplement. As specified in the related prospectus supplement, the
transfer may be funded by the establishment of a Funding Account. If a Funding
Account is established, all or a portion of the proceeds of the sale of one or
more classes of securities of the related series or a portion of collections on
the loans of principal will be deposited in that account to be released as
additional loans are transferred. In most cases, all amounts deposited in a
Funding Account will be required to be invested in eligible investments, as
described under "The Agreements--Investment of Funds" in this prospectus. The
amount held in those eligible investments shall at no time exceed 25% of the
aggregate outstanding principal balance of the securities. The related
agreement or other agreement providing for the transfer of additional loans
will provide that all those transfers must be made within 3 months after the
closing date. Amounts set aside to fund those transfers, whether in a Funding
Account or otherwise, and not so applied within the required period of time
will be deemed to be principal prepayments and applied in the manner described
in that prospectus supplement. A Funding Account can affect the application of
the requirements under ERISA. See "ERISA Considerations."


                                       12
<PAGE>

OPTIONAL TERMINATION

     The depositor, the master servicer, or another entity designated in the
related prospectus supplement may have the option to cause an early termination
of a trust. This would be effected by repurchasing all of the mortgage assets
from that trust on or after a date specified in the related prospectus
supplement, or on or after that time as the aggregate outstanding principal
amount of the mortgage assets is less than their initial aggregate principal
amount times a percentage, not greater than 25%, stated in the related
prospectus supplement. The repurchase price will be at least equal to the
entire unpaid principal balance, plus accrued and unpaid interest, of the
securities that are the subject of that optional termination. In the case of a
trust for which a REMIC election or elections have been made, the trustee shall
receive a satisfactory opinion of counsel that the repurchase price will not
jeopardize the REMIC status of the REMIC or REMICs, and that the optional
termination will be conducted so as to constitute a "qualified liquidation"
under Section 860F of the Internal Revenue Code of 1986, as amended, or the
Internal Revenue Code. See "The Agreements--Termination."

     In addition to the optional repurchase of the property in the related
trust, a holder of the Call Class may have the right, solely at its discretion,
to terminate the related trust and by that termination effect early retirement
of the certificates of the series, on any distribution date after the 12th
distribution date following the date of initial issuance of the related series
of certificates and until the date when the optional termination rights of the
master servicer and the depositor become exercisable. The Call Class will not
be offered under the prospectus supplement. That call will be of the entire
trust at one time; multiple calls as to any series of certificates will not be
permitted. In the case of a call, the holders of the certificates will be paid
a price equal to the Call Price. To exercise the call, the Call Class
certificateholder must remit to the related trustee for distribution to the
certificateholders, funds equal to the Call Price. If those funds are not
deposited with the related trustee, the certificates of that series will remain
outstanding. In addition, in the case of a trust for which a REMIC election or
elections have been made, this termination will be effected in a manner
consistent with applicable Federal income tax regulations and its status as a
REMIC. In connection with a call by the Call Class certificateholder, the final
payment to the certificateholders will be made on surrender of the related
certificates to the trustee. Once the certificates have been surrendered and
paid in full, there will not be any further liability to certificateholders.

     In the event of an optional termination as described in the preceding two
paragraphs, the trust and the securityholders will have no continuing liability
as sellers of assets of the trust fund.


BOOK-ENTRY REGISTRATION

     The securities may be issued in book-entry form in the minimum
denominations specified in the prospectus supplement and integral multiples of
those minimum denominations. Each class will be represented by a single
security registered in the name of the nominee of The Depository Trust Company,
or DTC, a limited-purpose trust company organized under the laws of the State
of New York. In most cases, a securityowner will be entitled to receive a
security issued in fully registered, certificated form, or definitive security,
representing that person's interest in the securities only if the book-entry
system for the securities is discontinued, as described in the fifth paragraph
below. Unless and until definitive securities are issued, it is anticipated
that the only securityholder of the securities will be Cede & Co., as nominee
of DTC. Securityowners will not be registered securityholders or registered
holders under the related agreement. Securityowners will only be permitted to
exercise the rights of securityholders indirectly through DTC participants. For
each series of certificates or notes, securityowners and securityholders will
be referred to as certificateowners and certificateholders or noteowners and
noteholders, respectively.

     DTC was created to hold securities for its participants and facilitate the
clearance and settlement of securities transactions between participants
through electronic book-entry changes in accounts of its participants.
Participants include securities brokers and dealers, banks, trust companies and
clearing corporations and may include other organizations. Indirect access to
the DTC system also is available to indirect participants, entities that clear
through or maintain a custodial relationship with a participant.


                                       13
<PAGE>

     Securityowners that are not participants or indirect participants but
desire to purchase, sell or otherwise transfer ownership of securities may do
so only though participants and indirect participants. Because DTC can only act
on behalf of participants and indirect participants, the ability of a
securityowner to pledge that owner's security to persons or entities that do
not participate in the DTC system, or otherwise take actions relating to that
security, may be limited. In addition, under a book-entry format,
securityowners may experience some delay in their receipt of principal and
interest distributions on the securities since those distributions will be
forwarded to DTC and DTC will then forward those distributions to its
participants which in turn will forward them to indirect participants or
securityowners.

     Under DTC rules, DTC participants may make book-entry transfers among
participants through DTC facilities for the securities. DTC, as registered
holder, is required to receive and transmit principal and interest
distributions and distributions on the securities. Participants and indirect
participants with which securityowners have accounts for securities similarly
are required to make book-entry transfers and receive and transmit those
distributions on behalf of their respective securityowners. Accordingly,
although securityowners will not possess certificates or notes, the DTC rules
provide a mechanism by which securityowners will receive distributions and will
be able to transfer their interests.

     The depositor understands that DTC will take any action permitted to be
taken by a securityholder under the related agreement only at the direction of
one or more participants to whose account with DTC the securities are credited.
Additionally, the depositor understands that DTC will take those actions for
holders of a specified interest in the certificates or notes or holders having
a specified voting interest only at the direction of and on behalf of
participants whose holdings represent that specified interest or voting
interest. DTC may take conflicting actions as to other holders of securities to
the extent that those actions are taken on behalf of participants whose
holdings represent that specified interest or voting interest.

     DTC may discontinue providing its services as securities depository for
the securities at any time by giving reasonable notice to the depositor or the
trustee. Under those circumstances, in the event that a successor securities
depository is not obtained, definitive securities will be printed and
delivered. In addition, the depositor may at its option elect to discontinue
use of the book-entry system through DTC. In that event, too, definitive
securities will be printed and delivered.


                 YIELD, PREPAYMENT AND MATURITY CONSIDERATIONS


PAYMENT DELAYS

     For any series, a period of time will elapse between receipt of payments
or distributions on the mortgage assets and the distribution date on which
those payments or distributions are passed through to securityholders. This
delay will effectively reduce the yield that would otherwise be obtained if
payments or distributions were distributed on or near the date of receipt. The
related prospectus supplement may describe an example of the timing of receipts
and the distribution of those receipts to securityholders.


PRINCIPAL PREPAYMENTS

     For a series for which the mortgage assets consist of loans or
participation interests in those loans, when a loan prepays in full, the
borrower will in most cases be required to pay interest on the amount of
prepayment only to the prepayment date. In addition, the prepayment may not be
required to be passed through to securityholders until the month following
receipt. The effect of these provisions is to reduce the aggregate amount of
interest which would otherwise be available for distributions on the
securities, thus effectively reducing the yield that would be obtained if
interest continued to accrue on the loan until the date on which the principal
prepayment was scheduled to be paid. To the extent specified in the related
prospectus supplement, this effect on yield may be mitigated by, among other
things, an adjustment to the servicing fee otherwise payable to the master
servicer or servicer for those prepaid loans. See "Servicing of Loans--Advances
and Limitations."


TIMING OF REDUCTION OF PRINCIPAL BALANCE

     A multiple class series may provide that, for purposes of calculating
interest distributions, the principal amount of the securities is deemed
reduced as of a date prior to the distribution date on which


                                       14
<PAGE>

principal on those securities is actually distributed. Consequently, the amount
of interest accrued during any Interest Accrual Period will be less than the
amount that would have accrued on the actual principal balance of the security
outstanding. The effect of those provisions is to produce a lower yield on the
securities than would be obtained if interest were to accrue on the securities
on the actual unpaid principal amount of those securities to each distribution
date. The related prospectus supplement will specify the time at which the
principal amounts of the securities are determined or are deemed to reduce for
purposes of calculating interest distributions on securities of a multiple
class series.


INTEREST OR PRINCIPAL ONLY SECURITIES

     A lower rate of principal prepayments than anticipated will negatively
affect the yield to investors in principal only securities, and a higher rate
of principal prepayments than anticipated will negatively affect the yield to
investors in interest only securities. The prospectus supplement for a series
including those securities will include a table showing the effect of various
levels of prepayment on yields on those securities. The tables will be intended
to illustrate the sensitivity of yields to various prepayment rates and will
not be intended to predict, or provide information which will enable investors
to predict, yields or prepayment rates.


FUNDING ACCOUNT

     If the applicable agreement for a series of securities provides for a
Funding Account or other means of funding the transfer of additional loans to
the related trust, as described under "Description of the Securities--Funding
Account" in this prospectus, and the trust is unable to acquire those
additional loans within any applicable time limit, the amounts set aside for
that purpose may be applied as principal payments on one or more classes of
securities of that series. See "Risk Factors--Yield, Prepayment and Maturity."


FINAL SCHEDULED DISTRIBUTION DATE

     The final scheduled distribution date of each class of any series other
than a multiple class series will be the distribution date following the latest
stated maturity of any mortgage asset in the related trust. The final scheduled
distribution date of each class of any multiple class series, if specified in
the related prospectus supplement, will be the date, calculated on the basis of
the assumptions applicable to the related series, on which the aggregate
principal balance of that class will be reduced to zero. Since prepayments on
the loans underlying or comprising the mortgage assets will be used to make
distributions in reduction of the outstanding principal amount of the
securities, it is likely that the actual maturity of any class will occur
earlier, and may occur substantially earlier, than its final scheduled
distribution date.


PREPAYMENTS AND WEIGHTED AVERAGE LIFE

     Weighted average life refers to the average amount of time that will
elapse from the date of issue of a security until each dollar of the principal
of that security will be repaid to the investor. The weighted average life of
the securities of a series will be influenced by the rate at which principal on
the loans comprising or underlying the mortgage assets for those securities is
paid, which may be in the form of scheduled amortization or prepayments. For
this purpose, prepayments include those prepayments made in whole or in part,
and liquidations due to default.

     The rate of principal prepayments on pools of housing loans is influenced
by a variety of economic, demographic, geographic, legal, tax, social and other
factors. The rate of prepayments of conventional housing loans has fluctuated
significantly in recent years. In most cases, however, if prevailing mortgage
market interest rates fall significantly below the interest rates on the loans
comprising or underlying the mortgage assets for a series, those loans are
likely to prepay at rates higher than if prevailing interest rates remain at or
above the interest rates borne by those loans. In this regard, it should be
noted that the loans comprising or underlying the mortgage assets of a series
may have different interest rates, and the stated pass-through or interest rate
of some of the mortgage assets or the security interest rate on the securities
may be a number of percentage points less than interest rates on those loans.
In addition, the weighted


                                       15
<PAGE>

average life of the securities may be affected by the varying maturities of the
loans comprising or underlying the mortgage assets. If any loans comprising or
underlying the mortgage assets for a series have actual terms-to-stated
maturity of less than those assumed in calculating the final scheduled
distribution date of the related securities, one or more class of the series
may be fully paid prior to its final scheduled distribution date, even in the
absence of prepayments and a reinvestment return higher than assumed.

     Prepayments on loans are commonly measured relative to a prepayment
standard or model, such as the CPR prepayment model or the SPA prepayment
model. CPR represents a constant assumed rate of prepayment each month relative
to the then outstanding principal balance of a pool of loans for the life of
those loans. SPA represents an assumed rate of prepayment each month relative
to the then outstanding principal balance of a pool of loans. A prepayment
assumption of 100% of SPA assumes prepayment rates of 0.2% per annum of the
then outstanding principal balance of those loans in the first month of the
life of the loans and an additional 0.2% per annum in each month after that
month until the thirtieth month. Beginning in the thirtieth month and in each
month after that month during the life of the loans, 100% of SPA assumes a
constant prepayment rate of 6% per annum.

     Neither CPR or SPA nor any other prepayment model or assumption purports
to be an historical description of prepayment experience or a prediction of the
anticipated rate of prepayment of any pool of loans, including the loans
underlying or comprising the mortgage assets. Thus, it is likely that
prepayment of any loans comprising or underlying the mortgage assets for any
series will not conform to any level of CPR or SPA.

     The prospectus supplement for each multiple class series may describe the
prepayment standard or model used to prepare the illustrative tables showing
the weighted average life of each class of that series under a given set of
prepayment assumptions. The related prospectus supplement may also describe the
percentage of the initial principal balance of each class of that series that
would be outstanding on specified distribution dates for that series based on
the assumptions stated in that prospectus supplement, including assumptions
that prepayments on the loans comprising or underlying the related mortgage
assets are made at rates corresponding to various percentages of CPR, SPA or at
other rates specified in that prospectus supplement. The tables and assumptions
are intended to illustrate the sensitivity of weighted average life of the
securities to various prepayment rates. They will not be intended to predict or
to provide information which will enable investors to predict the actual
weighted average life of the securities or prepayment rates of the loans
comprising or underlying the related mortgage assets.


OTHER FACTORS AFFECTING WEIGHTED AVERAGE LIFE

     Type of Loan. Some types of loans may experience a rate of principal
prepayments which is different from the principal prepayment rate for
conventional fixed rate loans or from other adjustable rate loans. These
include:

     Additional Collateral Loans,

     ARM loans,

     Balloon Loans,

     Bi-Weekly Loans,

     GEM Loans,

     GPM Loans, or

     Buy-Down Loans

     In the case of negatively amortizing ARM loans, if interest rates rise
without a simultaneous increase in the related scheduled payment, deferred
interest and negative amortization may result. However, borrowers may pay
amounts in addition to their scheduled payments in order to avoid that negative
amortization and to increase tax deductible interest payments. To the extent
that any of those mortgage loans negatively amortize over their respective
terms, future interest accruals are computed on the higher


                                       16
<PAGE>

outstanding principal balance of that mortgage loan and a smaller portion of
the scheduled payment is applied to principal than would be required to
amortize the unpaid principal over its remaining term. Accordingly, the
weighted average life of those loans will increase. During a period of
declining interest rates, the portion of each scheduled payment in excess of
the scheduled interest and principal due will be applied to reduce the
outstanding principal balance of the related loan, resulting in accelerated
amortization of that negatively amortizing ARM loan. This acceleration in
amortization of the principal balance of any negatively amortizing ARM loan
will shorten the weighted average life of that mortgage loan. The application
of partial prepayments to reduce the outstanding principal balance of a
negatively amortizing ARM loan will tend to reduce the weighted average life of
the mortgage loan and will adversely affect the yield to holders who purchased
their securities at a premium, if any, and holders of an interest only class.

     If the loans comprising or underlying the mortgage assets for a series
include ARM loans that permit the borrower to convert to a long-term fixed
interest rate loan if specified in the related prospectus supplement, some
entity may be obligated to repurchase any loan so converted. This conversion
and repurchase would reduce the average weighted life of the securities of the
related series.

     Because of the payment terms of Balloon Loans, there is a risk that those
mortgage loans, including Additional Collateral Loans, that require Balloon
Payments may default at maturity, or that the maturity of those mortgage loans
may be extended in connection with a workout. Based on the amortization
schedule of those mortgage loans, the Balloon Payment is expected to be the
entire or a substantial amount of the original principal balance. Payment of
the Balloon Payment will usually depend on the mortgagor's ability to obtain
refinancing of those mortgage loans, to sell the mortgaged property prior to
the maturity of the Balloon Loan or to otherwise have sufficient funds to pay
that Balloon Payment. The ability to obtain refinancing will depend on a number
of factors prevailing at the time refinancing or sale is required, including,
without limitation:

     real estate values,

     the mortgagor's financial situation,

     prevailing mortgage market interest rates,

     the mortgagor's equity in the related mortgaged property,

     tax laws and

     prevailing general economic conditions.

In most cases, none of the depositor, the master servicer, or any of their
affiliates will be obligated to refinance or repurchase any mortgage loan or to
sell the mortgaged property.

     A GEM Loan provides for scheduled annual increases in the borrower's
scheduled payment. Because the additional portion of the scheduled payment is
applied to reduce the unpaid principal balance of the GEM Loan, the stated
maturity of a GEM Loan will be significantly shorter than the 25 to 30 year
term used as the basis for calculating the installments of principal and
interest applicable until the first adjustment date.

     The prepayment experience for manufactured home loans will, in most cases,
not correspond to the prepayment experience on other types of housing loans.

     Foreclosures and Payment Plans. The number of foreclosures and the
principal amount of the loans which are foreclosed in relation to the number of
loans which are repaid in accordance with their terms will affect the weighted
average life of the loans and that of the related series of securities.
Servicing decisions made relating to the loans, including the use of payment
plans prior to a demand for acceleration and the restructuring of loans in
bankruptcy proceedings, may also have an impact on the payment patterns of
particular loans. In particular, the return to holders of securities who
purchased their securities at a premium, if any, and the yield on an interest
only class may be adversely affected by servicing policies and decisions
relating to foreclosures.


                                       17
<PAGE>

     Due on Sale Clauses. The acceleration of prepayment as a result of various
transfers of the mortgaged property securing a loan is another factor affecting
prepayment rates. Most types of mortgage loans may include "due-on-sale"
clauses. In most cases, the servicer of loans constituting or underlying the
mortgage assets for a series will be required, to the extent it knows of any
conveyance or prospective conveyance of the related residence by any borrower,
to enforce any applicable "due-on-sale" clause in the manner it enforces those
clauses on other similar loans in its portfolio. FHA loans and VA loans are not
permitted to contain "due-on-sale" clauses and are freely assumable by
qualified persons. However, as homeowners move or default on their housing
loans, the mortgaged property is usually sold and the loans prepaid, even
though, by their terms, the loans are not "due-on-sale" and could have been
assumed by new buyers.


     Optional Termination. The entity specified in the related prospectus
supplement may cause an early termination of the related trust by its
repurchase of the remaining mortgage assets in that trust. See "Description of
the Securities--Optional Termination."

















                                       18
<PAGE>

                                THE TRUST FUNDS

     The trust for each series will be held by the trustee for the benefit of
the related securityholders. Each trust will consist of:

    o the mortgage assets;

    o amounts held from time to time in the Collection Account and the
      Certificate Account established for that series;

    o mortgaged property;

    o any reserve fund for that series, if specified in the related prospectus
      supplement;

    o the subservicing agreements, if any, relating to loans in the trust;

    o any primary mortgage insurance policies relating to loans in the trust;

    o any pool insurance policy, any special hazard insurance policy, any
      bankruptcy bond or other credit support relating to the series;

    o eligible investment of funds held in any Eligible Account of the trust,
      or any guaranteed investment contract for the investment of those funds;
      and

    o any other instrument or agreement relating to the trust and described in
      the related prospectus supplement, which may include an interest rate
      swap agreement or an interest rate cap agreement or similar agreement
      issued by a bank, insurance company or savings and loan association;

Some of the items listed above may be held outside of the trust. The value of
any guaranteed investment contract held by a trust will not exceed 10% of the
total assets of the trust.

     Any Retained Interests which are received on a private mortgage-backed
security or loan comprising the mortgage assets for a series will not be
included in the trust for that series. Instead, that Retained Interest will be
retained by or payable to the originator, servicer or seller of that private
mortgage-backed security or loan, free and clear of the interest of
securityholders under the related agreement.

     Mortgage assets in the trust for a series may consist of any combination
of the following to the extent and as specified in the related prospectus
supplement:

    o private mortgage-backed securities;

    o mortgage loans or participation interests in those mortgage loans and
      manufactured home loans or participation interests in those manufactured
      home loans; or

    o Agency Securities.

As of the closing date, no more than 5% of the loans or securities, as
applicable, relative to the aggregate asset pool balance, will deviate from the
characteristics of the loans or securities as described in the prospectus
supplement. Loans which comprise the mortgage assets will be purchased by the
depositor directly or through an affiliate in the open market or in privately
negotiated transactions from the seller. Some of the loans may have been
originated by an affiliate of the depositor. Participation interests in loans
may be purchased by the depositor, or an affiliate, under a participation
agreement. See "The Agreements--Assignment of Mortgage Assets."

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

     Each trust will be established under either a pooling and servicing
agreement, or an owner trust agreement, that limits the activities of the trust
to those necessary or incidental to the securities. Each


                                       19
<PAGE>

trust will issue only one series of securities, and will not be authorized to
incur other obligations. As a result of the limited purpose and activities of
each trust, the possibility that any trust will be involved in a bankruptcy
proceeding is remote. At the time that each series of securities is issued, the
issuer will deliver an opinion of counsel, acceptable to the rating agencies
rating the series, addressing the effect on the trust of the bankruptcy of the
depositor, or of the transferor of the trust's assets to the depositor. That
opinion will state that in the event of that bankruptcy, the assets of the
trust would not be treated as property of the depositor or the transferor and
therefore would not be subject to an automatic stay in those bankruptcy
proceedings.


PRIVATE MORTGAGE-BACKED SECURITIES

    General. Private mortgage-backed securities may consist of:

    o mortgage pass-through certificates, evidencing an undivided interest in
      a pool of loans;

    o collateralized mortgage obligations secured by loans; or

    o pass-through certificates representing beneficial interests in Agency
      Securities.

Private mortgage-backed securities will have been issued under a private
mortgage-backed securities agreement, or PMBS agreement. The seller/servicer of
the underlying loans will have entered into the PMBS agreement with the private
mortgage-backed securities trustee, or PMBS trustee. The PMBS trustee or its
agent, or a custodian, will possess the loans underlying that private
mortgage-backed security. Loans underlying a private mortgage-backed security
will be serviced by the PMBS servicer directly or by one or more subservicers
who may be subject to the supervision of the PMBS servicer. The PMBS servicer
will be a Fannie Mae- or Freddie Mac-approved servicer and, if FHA loans
underlie the private mortgage-backed securities, approved by HUD as a FHA
mortgagee.

     The private mortgage-backed securities issuer, or PMBS issuer, will be a
financial institution or other entity engaged in the business of mortgage
lending, a public agency or instrumentality of a state, local or federal
government, or a limited purpose corporation organized for the purpose of,
among other things, establishing trusts and acquiring and selling housing loans
to those trusts, and selling beneficial interests in those trusts. In some
cases, the PMBS issuer may be the depositor or an affiliate of the depositor.
The obligations of the PMBS issuer will, in most case, be limited to various
representations and warranties relating to the assets conveyed by it to the
related trust. In most cases, the PMBS issuer will not have guaranteed any of
the assets conveyed to the related trust or any of the private mortgage-backed
securities issued under the PMBS agreement. Additionally, although the loans
underlying the private mortgage-backed securities may be guaranteed by an
agency or instrumentality of the United States, the private mortgage-backed
securities themselves will not be so guaranteed.

     Distributions of principal and interest will be made on the private
mortgage-backed securities on the dates specified in the related prospectus
supplement. The private mortgage-backed securities may be entitled to receive
nominal or no principal distributions or nominal or no interest distributions.
Principal and interest distributions will be made on the private
mortgage-backed securities by the PMBS trustee or the PMBS servicer. The PMBS
issuer or the PMBS servicer may have the right to repurchase assets underlying
the private mortgage-backed securities after a specified date or under other
circumstances specified in the related prospectus supplement.

     Underlying Loans. The loans underlying the private mortgage-backed
securities may consist of:

    o fixed rate, level payment, fully amortizing loans or Additional
      Collateral Loans,

    o GEM Loans,

    o GPM Loans,

    o Balloon Loans,

    o Buy-Down Loans,

    o Bi-Weekly Loans,


                                       20
<PAGE>

    o ARM loans, or

    o loans having other special payment features.

Loans may be secured by single family property which is property consisting of
one- to four-family attached or detached residential housing including
Cooperative Dwellings, manufactured homes, or, in the case of Cooperative
Loans, by an assignment of the proprietary lease or occupancy agreement
relating to a Cooperative Dwelling and the shares issued by the related
cooperative. The following criteria apply to most loans:

    o no loan will have had a Loan-to-Value Ratio, or LTV ratio, at
      origination in excess of 95%, each mortgage loan secured by single family
      property and having a LTV ratio in excess of 80% at origination will be
      covered by a primary mortgage insurance policy,

    o each loan will have had an original term to stated maturity of not less
      than 10 years and not more than 40 years,

    o no loan that was more than 30 days delinquent as to the payment of
      principal or interest will have been eligible for inclusion in the assets
      under the related PMBS agreement,

    o each loan, other than a Cooperative Loan, will be required to be covered
      by a standard hazard insurance policy which may be a blanket policy, and

    o each loan, other than a Cooperative Loan or a loan secured by a
      manufactured home, will be covered by a title insurance policy.

     Credit Support Relating to Private Mortgage-Backed Securities. Credit
support in the form of reserve funds, subordination of other private mortgage
certificates issued under the PMBS agreement, overcollateralization, letters of
credit, insurance policies or other types of credit support may be provided for
the loans underlying the private mortgage-backed securities or for the private
mortgage-backed securities themselves. The type, characteristics and amount of
credit support, if any, will be a function of various characteristics of the
loans and other factors and will have been established for the private
mortgage-backed securities on the basis of requirements of the rating agencies
which initially assigned a rating to the private mortgage-backed securities.

     Additional Information. The prospectus supplement for a series for which
the trust includes private mortgage-backed securities will specify:

    o the aggregate approximate principal amount and type of the private
      mortgage-backed securities to be included in the trust;

    o various characteristics of the loans which comprise the underlying
      assets for the private mortgage-backed securities including:

      o  the payment features of those loans, i.e., whether they are fixed
         rate or adjustable rate and whether they provide for fixed level
         payments or other payment features;

      o  the approximate aggregate principal balance, if known, of underlying
         loans insured or guaranteed by a governmental entity;

      o  the servicing fee or range of servicing fees for the loans; and

      o  the minimum and maximum stated maturities of the underlying loans at
         origination;

    o the maximum original term-to-stated maturity of the private
      mortgage-backed securities;

    o the weighted average term-to-stated maturity of the private
      mortgage-backed securities;

    o the note interest rate, pass-through or certificate rate or ranges of
      those rates for the private mortgage-backed securities;

    o the weighted average note interest rate, pass-through or certificate
      rate of the private mortgage-backed securities;

                                       21
<PAGE>

    o the PMBS issuer, the PMBS servicer, if other than the PMBS issuer, and
      the PMBS trustee for those private mortgage-backed securities;

    o various characteristics of credit support, if any, such as reserve
      funds, insurance policies, letters of credit or guarantees relating to
      the loans underlying the private mortgage-backed securities or to the
      private mortgage-backed securities themselves;

    o the terms on which the underlying loans for those private
      mortgage-backed securities may, or are required to, be purchased prior to
      their stated maturity or the stated maturity of the private
      mortgage-backed securities; and

    o the terms on which loans may be substituted for those originally
      underlying the private mortgage-backed securities.


THE AGENCY SECURITIES

     All of the Agency Securities will be registered in the name of the trustee
or its nominee or, in the case of Agency Securities issued only in book-entry
form, a financial intermediary, which may be the trustee, that is a member of
the Federal Reserve System or of a clearing corporation on the books of which
the security is held. Each Agency Security will evidence an interest in a pool
of mortgage loans and/or cooperative loans and/or in principal distributions
and interest distributions on those loans. All of the Agency Securities in a
trust will be issued or guaranteed by the United States or a United States
government-sponsored agency.

     The descriptions of GNMA, Freddie Mac and Fannie Mae Certificates that are
presented in the remaining paragraphs of this subsection are descriptions of
certificates representing proportionate interests in a pool of mortgage loans
and in the payments of principal and interest on those loans. GNMA, Freddie Mac
or Fannie Mae may also issue mortgage-backed securities representing a right to
receive distributions of interest only or principal only or disproportionate
distributions of principal or interest or to receive distributions of principal
and/or interest prior or subsequent to distributions on other certificates
representing interests in the same pool of mortgage loans. In addition, any of
those issuers may issue certificates representing interests in mortgage loans
having characteristics that are different from the types of mortgage loans
described under "The Mortgage Loans" in this prospectus. The terms of any of
those certificates to be included in a trust and of the underlying mortgage
loans will be described in the related prospectus supplement, and the
descriptions that follow are subject to modification as appropriate to reflect
the terms of any of those certificates that are actually included in a trust.

     GNMA. The Government National Mortgage Association, or GNMA, is a
wholly-owned corporate instrumentality of the United States within the United
States Department of Housing and Urban Development, or HUD. Section 306(g) of
Title III of the National Housing Act of 1934, as amended, or the Housing Act,
authorizes GNMA to guarantee the timely payment of the principal of and
interest on certificates representing interests in a pool of mortgages either:

    o insured by the Federal Housing Administration, or the FHA, under the
      Housing Act or under Title V of the Housing Act of 1949, or

    o partially guaranteed by the VA under the Servicemen's Readjustment Act
      of 1944, as amended, or under Chapter 37 of Title 38, United States Code.


     Section 306(g) of the Housing Act provides that "the full faith and credit
of the United States is pledged to the payment of all amounts which may be
required to be paid under any guarantee under this subsection." In order to
meet its obligations under that guarantee, GNMA may, under Section 306(d) of
the Housing Act, borrow from the United States Treasury an amount that is at
any time sufficient to enable GNMA to perform its obligations under its
guarantee. See "Additional Information" for the availability of further
information regarding GNMA and GNMA certificates.

     GNMA Certificates. In most cases, each GNMA certificate relating to a
series, which may be a "GNMA I Certificate" or a "GNMA II Certificate" as
referred to by GNMA, will be a "fully modified pass-through" mortgage-backed
certificate issued and serviced by a mortgage banking company or other


                                       22
<PAGE>

financial concern approved by GNMA, except for any stripped mortgage-backed
securities guaranteed by GNMA or any REMIC securities issued by GNMA. The
characteristics of any GNMA certificates included in the trust for a series of
certificates will be described in the related prospectus supplement.

     Freddie Mac. The Federal Home Loan Mortgage Corporation, or Freddie Mac,
is a corporate instrumentality of the United States created under Title III of
the Emergency Home Finance Act of 1970, as amended, or the FHLMC Act. Freddie
Mac was established primarily for the purpose of increasing the availability of
mortgage credit for the financing of needed housing. The principal activity of
Freddie Mac currently consists of purchasing first-lien, conventional,
residential mortgage loans or participation interests in those mortgage loans
and reselling the mortgage loans so purchased in the form of guaranteed
mortgage securities, primarily Freddie Mac certificates. In 1981, Freddie Mac
initiated its Home Mortgage Guaranty Program under which it purchases mortgage
loans from sellers with Freddie Mac certificates representing interests in the
mortgage loans so purchased. All mortgage loans purchased by Freddie Mac must
meet various standards presented in the FHLMC Act. Freddie Mac is confined to
purchasing, so far as practicable, mortgage loans that it deems to be of that
quality and type as to meet most of the purchase standards imposed by private
institutional mortgage investors. See "Additional Information" for the
availability of further information regarding Freddie Mac and Freddie Mac
certificates. Neither the United States nor any agency of the United States is
obligated to finance Freddie Mac's operations or to assist Freddie Mac in any
other manner.

     Freddie Mac Certificates. In most cases, each Freddie Mac certificate
relating to a series will represent an undivided interest in a pool of mortgage
loans that typically consists of conventional loans, but may include FHA loans
and VA loans, purchased by Freddie Mac, except for any stripped mortgage-backed
securities issued by Freddie Mac. That pool will consist of mortgage loans:

    o substantially all of which are secured by one- to four-family
      residential properties or

    o if specified in the related prospectus supplement, are secured by five
      or more family residential properties.

     The characteristics of any Freddie Mac certificates included in the trust
for a series of certificates will be described in the related prospectus
supplement.

     Fannie Mae. The Federal National Mortgage Association, or Fannie Mae, is a
federally chartered and privately owned corporation organized and existing
under the Federal National Mortgage Association Charter Act (12 U.S.C.
Section  1716 et seq.). It is the nation's largest supplier of residential
mortgage funds. Fannie Mae was originally established in 1938 as a United
States government agency to provide supplemental liquidity to the mortgage
market and was transformed into a stockholder-owned and privately managed
corporation by legislation enacted in 1968. Fannie Mae provides funds to the
mortgage market primarily by purchasing home mortgage loans from local lenders,
replenishing their funds for additional lending. See "Additional Information"
for the availability of further information regarding Fannie Mae and Fannie Mae
certificates. Although the Secretary of the Treasury of the United States has
authority to lend Fannie Mae up to $2.25 billion outstanding at any time,
neither the United States nor any agency of the United States is obligated to
finance Fannie Mae's operations or to assist Fannie Mae in any other manner.

     Fannie Mae Certificates. In most cases, each Fannie Mae certificate
relating to a series will represent a fractional undivided interest in a pool
of mortgage loans formed by Fannie Mae, except for any stripped mortgage-backed
securities issued by Fannie Mae. Mortgage loans underlying Fannie Mae
certificates will consist of:

    o fixed, variable or adjustable rate conventional mortgage loans or

    o fixed-rate FHA loans or VA loans.

     Those mortgage loans may be secured by either one- to four-family or
multi-family residential properties. The characteristics of any Fannie Mae
certificates included in the trust for a series of certificates will be
described in the related prospectus supplement.


                                       23
<PAGE>

THE MORTGAGE LOANS

     The trust for a series may consist of mortgage loans or participation
interests in those mortgage loans. The mortgage loans may have been originated
by mortgage lenders which are Fannie Mae- or Freddie Mac-approved
seller/servicers or by their wholly-owned subsidiaries, and, in the case of FHA
loans, approved by HUD as an FHA mortgagee. Some of the mortgage loans may have
been originated by an affiliate of the depositor. The mortgage loans may
include FHA loans which are fixed rate housing loans secured by the FHA, or VA
loans which are housing loans partially guaranteed by the Department of Veteran
Affairs, or the VA, or conventional loans which are not insured or guaranteed
by the FHA or the VA. The mortgage loans:

    o may have fixed interest rates or adjustable interest rates and may
      provide for fixed level payments, or

    o may be:

      o   Additional Collateral Loans,

      o   GPM Loans,

      o   GEM Loans,

      o   Balloon Loans,

      o   Buy-Down Loans,

      o   Bi-Weekly Loans, or

      o   mortgage loans with other payment characteristics as described under
          "The Mortgage Loans" in this prospectus or in the related prospectus
          supplement.

ARM loans may have a feature which permits the borrower to convert the rate on
those ARM loans to a long-term fixed rate. The mortgage loans may be secured by
mortgages or deeds of trust or other similar security instruments creating a
first lien or a junior lien on mortgaged property. The mortgage loans may also
include Cooperative Loans evidenced by promissory notes secured by a lien on
the shares issued by private, non-profit, cooperative housing corporations and
on the related proprietary leases or occupancy agreements granting exclusive
rights to occupy specific Cooperative Dwellings. The mortgage loans may also
include condominium loans secured by a mortgage on a condominium unit together
with that condominium unit's appurtenant interest in the common elements.

    The mortgaged properties may include single family property including:

    o detached individual dwellings,

    o individual condominiums,

    o townhouses,

    o duplexes,

    o row houses,

    o individual units in planned unit developments and

    o other attached dwelling units.

Each single family property will be located on land owned in fee simple by the
borrower or on land leased by the borrower. The fee interest in any leased land
will be subject to the lien securing the related mortgage loan. Attached
dwellings may include owner-occupied structures where each borrower owns the
land on which the unit is built, with the remaining adjacent land owned in
common or dwelling units subject to a proprietary lease or occupancy agreement
in a cooperatively owned apartment building. The proprietary lease or occupancy
agreement securing a Cooperative Loan is in most cases subordinate to any
blanket mortgage on the related cooperative apartment building and/or on the
underlying land.


                                       24
<PAGE>

Additionally, in the case of a Cooperative Loan, the proprietary lease or
occupancy agreement is subject to termination and the cooperative shares are
subject to cancellation by the cooperative if the tenant-stockholder fails to
pay maintenance or other obligations or charges owed by that tenant-stockholder.
See "Legal Aspects of Loans."

     If stated in the related prospectus supplement, some of the mortgage pools
may contain mortgage loans secured by junior liens, and the related senior
liens may not be included in the mortgage pool. The primary risk to holders of
mortgage loans secured by junior liens is the possibility that adequate funds
will not be received in connection with a foreclosure of the related senior
liens to satisfy fully both the senior liens and the mortgage loan. In the
event that a holder of a senior lien forecloses on a mortgaged property, the
proceeds of the foreclosure or similar sale will be applied:

    o first to the payment of court costs and fees in connection with the
      foreclosure,

    o second to real estate taxes,

    o third in satisfaction of all principal, interest, prepayment or
      acceleration penalties, if any, and

    o fourth, any other sums due and owing to the holder of the senior liens.

The claims of the holders of the senior liens will be satisfied in full out of
proceeds of the liquidation of the mortgage loan, if those proceeds are
sufficient, before the trust as holder of the junior lien receives any payments
on the mortgage loan. If the master servicer were to foreclose on any mortgage
loan, it would do so subject to any related senior liens. In order for the debt
related to the mortgage loan to be paid in full at that sale, a bidder at the
foreclosure sale of that mortgage loan would have to bid an amount sufficient
to pay off all sums due under the mortgage loan and the senior liens or
purchase the mortgaged property subject to the senior liens. In the event that
those proceeds from a foreclosure or similar sale of the related mortgaged
property are insufficient to satisfy all senior liens and the mortgage loan in
the aggregate, the trust, as the holder of the junior lien, and, accordingly,
holders of one or more classes of the securities bear the risk of delay in
distributions while a deficiency judgment against the borrower is obtained and
the risk of loss if the deficiency judgment is not collected. Moreover,
deficiency judgments may not be available in some jurisdictions. In addition, a
junior mortgagee may not foreclose on the property securing a junior mortgage
unless it forecloses subject to the senior mortgages.

     Liquidation expenses for defaulted junior mortgage loans do not vary
directly with the outstanding principal balance of the loan at the time of
default. Therefore, assuming that the master servicer took the same steps in
realizing on a defaulted junior mortgage loan having a small remaining
principal balance as it would in the case of a defaulted junior mortgage loan
having a large remaining principal balance, the amount realized after expenses
of liquidation would be smaller as a percentage of the outstanding principal
balance of the small junior mortgage loan than would be the case with the
defaulted junior mortgage loan having a large remaining principal balance.
Because the average outstanding principal balance of the mortgage loans is
smaller relative to the size of the average outstanding principal balance of
the loans in a typical pool of first priority mortgage loans, liquidation
proceeds may also be smaller as a percentage of the principal balance of a
mortgage loan than would be the case in a typical pool of first priority
mortgage loans.

     If specified in the related prospectus supplement, a trust will contain
Additional Collateral Loans. In most cases, the security agreements and other
similar security instruments related to the Additional Collateral for the loans
in a trust will, in the case of Additional Collateral consisting of personal
property, create first liens on that personal property, and, in the case of
Additional Collateral consisting of real estate, create first or junior liens
on that Additional Collateral. Additional Collateral, or the liens on that
Additional Collateral in favor of the related Additional Collateral Loans, may
be greater or less in value than the principal balances of those Additional
Collateral Loans, the appraised values of the underlying mortgaged properties
or the differences, if any, between those principal balances and those
appraised values.

     The requirements that Additional Collateral be maintained may be
terminated in the case of the reduction of the LTV Ratios or principal balances
of the related Additional Collateral Loans to pre-determined amounts. In most
cases, appraised value means:


                                       25
<PAGE>

    o For mortgaged property securing a single family property, the lesser of:


      o  the appraised value determined in an appraisal obtained at
         origination of the related mortgage loan, if any, or, if the related
         mortgaged property has been appraised subsequent to origination, the
         value determined in that subsequent appraisal, and

      o  the sales price for the related mortgaged property, except in
         circumstances in which there has been a subsequent appraisal;

    o For refinanced, modified or converted mortgaged property, the lesser of:


      o  the appraised value of the related mortgaged property determined at
         origination or in an appraisal, if any, obtained at the time of
         refinancing, modification or conversion, and

      o  the sales price of the related mortgaged property or, if the mortgage
         loan is not a rate and term refinance mortgage loan and if the
         mortgaged property was owned for a relatively short period of time
         prior to refinancing, modification or conversion, the sum of the sales
         price of the related mortgaged property plus the added value of any
         improvements; and

    o For mortgaged property securing a manufactured home loan, the least of
      the sale price, the appraised value, and the National Automobile Dealer's
      Association book value plus prepaid taxes and hazard insurance premiums.

Additional Collateral, including any related third-party guarantees, may be
provided either in addition to or in lieu of primary mortgage insurance
policies for the Additional Collateral Loans in a trust, as specified in the
related prospectus supplement. Guarantees supporting Additional Collateral
Loans may be guarantees of payment or guarantees of collectability and may be
full guarantees or limited guarantees. If a trust includes Additional
Collateral Loans, the related prospectus supplement will specify the nature and
extent of that Additional Collateral Loans and of the related Additional
Collateral. If specified in that prospectus supplement, the trustee, on behalf
of the related securityholders, will have only the right to receive various
proceeds from the disposition of that Additional Collateral consisting of
personal property and the liens on that personal property will not be assigned
to the trustee. No assurance can be given as to the amount of proceeds, if any,
that might be realized from the disposition of the Additional Collateral for
any of the Additional Collateral Loans. See "Legal Aspects of Loans--
Anti-Deficiency Legislation and Other Limitations on Lenders" in this
prospectus.

     Additional Collateral Loans may include:

    o DLJdirect ACCOUNT POWER (Trade Mark)  loans, under which the Additional
      Collateral consists of eligible securities held in a DLJdirect account
      and pledged by the mortgagor to secure the mortgage loan, or

    o DLJdirect FAMILY POWER (Trade Mark)  loans, under which the Additional
      Collateral consists of eligible securities held in a DLJdirect account
      and pledged by a family member of the mortgagor to secure the family
      members guaranty of the mortgage loan.

     Additional Collateral Loans may also include Nest Egg Mortgage Loans
(Service Mark). Those mortgage loans are interest-only mortgage loans for an
initial period specified in the related prospectus supplement. If the related
mortgagor pledges an eligible life insurance policy as Additional Collateral
after that initial period, the mortgagor will continue to make interest-only
payments on the mortgage loan until the final scheduled payment on that mortgage
loan, as described in the prospectus supplement.

     The percentage of mortgage loans which are owner-occupied will be
disclosed in the related prospectus supplement. In most cases, the sole basis
for a representation that a given percentage of the mortgage loans are secured
by single family property that is owner-occupied will be either:

    o the making of a representation by the mortgagor at origination of the
      mortgage loan either that the underlying mortgaged property will be used
      by the borrower for a period of at least six months every year or that
      the borrower intends to use the mortgaged property as a primary
      residence, or


                                       26
<PAGE>

    o a finding that the address of the underlying mortgaged property is the
      borrower's mailing address as reflected in the servicer's records.

     To the extent specified in the related prospectus supplement, the
mortgaged properties may include non-owner occupied investment properties and
vacation and second homes. Mortgage loans secured by investment properties may
also be secured by an assignment of leases and rents and operating or other
cash flow guarantees relating to the loans to the extent specified in the
related prospectus supplement.

     The characteristics of the mortgage loans comprising or underlying the
mortgage assets for a series may vary to the extent that credit support is
provided in levels satisfactory to the rating agency which assigns a rating to
a series of securities. In most cases, the following selection criteria shall
apply for the mortgage loans comprising the mortgage assets:

    o no mortgage loan will have had a LTV ratio at origination in excess of
      95%;

    o no mortgage loan that is a conventional loan secured by a single family
      property may have a LTV ratio in excess of 80%, unless covered by a
      primary mortgage insurance policy as described in this prospectus;

    o each mortgage loan must have an original term to maturity of not less
      than 10 years and not more than 40 years;

    o no mortgage loan may be included which, as of the cut-off date, is more
      than 30 days delinquent as to payment of principal or interest; and

    o no mortgage loan, other than a Cooperative Loan, may be included unless
      a title insurance policy and a standard hazard insurance policy, which
      may be a blanket policy, is in effect for the mortgaged property securing
      that mortgage loan.

     Each mortgage loan will be selected by the depositor for inclusion in a
trust from among those purchased by the depositor, either directly or through
its affiliates, from a seller or sellers. The related prospectus supplement
will specify the extent of mortgage loans so acquired. Other mortgage loans
available for purchase by the depositor may have characteristics which would
make them eligible for inclusion in a trust but were not selected for inclusion
in that trust.

     The mortgage loans to be included in a trust will, in most cases, be
acquired by the depositor under a Designated Seller Transaction. Those
securities may be sold in whole or in part to seller in exchange for the
related mortgage loans, or may be offered under any of the other methods
described in this prospectus under "Plan of Distribution." The related
prospectus supplement for a trust composed of mortgage loans acquired by the
depositor under a Designated Seller Transaction will in most cases include
information, provided by the related seller, about the seller, the mortgage
loans and the underwriting standards applicable to the mortgage loans. Neither
the depositor nor any of its affiliates, other than the seller, if applicable,
will make any representation or warranty as to that mortgage loan, or any
representation as to the accuracy or completeness of that information provided
by the seller and no assurances are made as to that seller's financial
strength, stability or wherewithal to honor its repurchase obligations for
breaches of representations and warranties or otherwise honor its obligations.

     The depositor will not require that a standard hazard or flood insurance
policy be maintained for any Cooperative Loan. In most cases, the cooperative
itself is responsible for maintenance of hazard insurance for the property
owned by the cooperative and the tenant-stockholders of that cooperative do not
maintain individual hazard insurance policies. To the extent, however, a
cooperative and the related borrower on a Cooperative Note do not maintain that
insurance or do not maintain adequate coverage or any insurance proceeds are
not applied to the restoration of the damaged property, damage to that
borrower's Cooperative Dwelling or that cooperative's building could
significantly reduce the value of the collateral securing that Cooperative
Note.

     The initial LTV ratio of any mortgage loan represents the ratio of the
principal amount of the mortgage loan at origination, plus in the case of a
mortgage loan secured by a junior lien, the principal amount of the related
senior lien, to the appraised value of that mortgaged property.


                                       27
<PAGE>

     In most cases, for Buy-Down Loans, during the Buy-Down Period when the
borrower is not obligated to pay the full scheduled payment otherwise due on
that loan, each of the Buy-Down Loans will provide for scheduled payments based
on the Buy-Down Mortgage Rate that will not have been more than 3% below the
mortgage rate at origination, and for annual increases in the Buy-Down Mortgage
Rate during the Buy-Down Period that will not exceed 1%. The Buy-Down Period
will not exceed three years. The Buy-Down Amounts that may be contributed by
the servicer of the related Buy-Down Loan is limited to 6% of the appraised
value of the related mortgaged property. This limitation does not apply to
contributions from immediate relatives or the employer of the mortgagor. The
borrower under each Buy-Down Loan will have been qualified at a mortgage rate
which is not more than 3% per annum below the current mortgage rate at
origination. Accordingly, the repayment of a Buy-Down Loan is dependent on the
ability of the borrower to make larger scheduled payments after the Buy-Down
Amounts have been depleted and, for some Buy-Down Loans, while those Buy-Down
Amounts are being depleted.

     In most cases, the Bi-Weekly Loans will consist of fixed-rate, bi-weekly
payment, conventional, fully-amortizing mortgage loans payable on every other
Friday during the term of that loan and secured by first mortgages on one-to
four-family residential properties.

     In most cases, adjustable rate mortgage loans, or ARM loans, will provide
for a fixed initial mortgage rate for either the first six or twelve scheduled
payments. After that period, the mortgage rate is subject to periodic
adjustment based, subject to the applicable limitations, on changes in the
relevant index described in the applicable prospectus supplement, to a rate
equal to the index plus the gross margin, which is a fixed percentage spread
over the index established contractually for each ARM loan, at the time of its
origination. An ARM loan may be convertible into a fixed-rate mortgage loan. To
the extent specified in the related prospectus supplement, any ARM loan so
converted may be subject to repurchase by the seller, the servicer or the
master servicer.

     ARM loans have features that can cause payment increases that some
borrowers may find difficult to make. However, each of the ARM loans provides
that its mortgage rate may not be adjusted to a rate above the applicable
maximum mortgage rate or below the applicable minimum mortgage rate, if any,
for that ARM loan. In addition, some of the ARM loans provide for Periodic Rate
Caps. Some ARM loans are payable in self-amortizing payments of principal and
interest. Negatively amortizing ARM loans instead provide for limitations on
changes in the scheduled payment on those ARM loans to protect borrowers from
payment increases due to rising interest rates. Those limitations can result in
scheduled payments which are greater or less than the amount necessary to
amortize a negatively amortizing ARM loan by its original maturity at the
mortgage rate in effect during any particular adjustment period. In the event
that the scheduled payment is not sufficient to pay the interest accruing on a
negatively amortizing ARM loan, then the deferred interest is added to the
principal balance of that ARM loan causing the negative amortization of that
ARM loan, and will be repaid through future scheduled payments. If specified in
the related prospectus supplement, negatively amortizing ARM loans may provide
for the extension of their original stated maturity to accommodate changes in
their mortgage rate. The relevant prospectus supplement will specify whether
the ARM loans comprising or underlying the mortgage assets are negatively
amortizing ARM loans.

     If applicable, the prospectus supplement for each series will specify the
index to be used for any mortgage loans underlying that series.

     The related prospectus supplement for each series will provide information
for the mortgage loans as of the cut-off date, including, among other things:

    o the aggregate outstanding principal balance of the mortgage loans;

    o the weighted average mortgage rate on the mortgage loans, and, in the
      case of ARM loans, the weighted average of the current mortgage rates and
      the maximum mortgage rates, if any;

    o the average outstanding principal balance of the mortgage loans;

    o the weighted average remaining term-to-stated maturity of the mortgage
      loans and the range of remaining terms-to-stated maturity;


                                       28
<PAGE>

    o the range of LTV ratios of the mortgage loans;

    o the relative percentage, by outstanding principal balance as of the
      cut-off date, of mortgage loans that are Additional Collateral Loans, ARM
      loans, Balloon Loans, Buy-Down Loans, GEM Loans, GPM Loans, Cooperative
      Loans, conventional loans, Bi-Weekly Loans, FHA loans and VA loans;

    o the percentage of mortgage loans, by outstanding principal balance as of
      the cut-off date, that are covered by primary mortgage insurance
      policies;

    o any pool insurance policy, special hazard insurance policy or bankruptcy
      bond or other credit support relating to the mortgage loans;

    o the geographic distribution of the mortgaged properties securing the
      mortgage loans;

    o the percentage of mortgage loans, by principal balance as of the cut-off
      date, that are secured by single family property, Cooperative Dwellings,
      investment property and vacation or second homes; and

    o for mortgage loans secured by a junior lien, the amount of the related
      senior liens.

The related prospectus supplement will also specify any other limitations on
the types or characteristics of mortgage loans which may comprise or underlie
the mortgage assets for a series.

     If information of the nature described in the preceding paragraph for the
mortgage loans is not known to the depositor at the time the securities are
initially offered, more general information of the nature described in that
paragraph will be provided in the prospectus supplement. The final specific
information will be presented in a Current Report on Form 8-K to be available
to investors on the date of issuance of the related series and to be filed,
together with the related pooling and servicing agreement, for each series of
certificates, or the related servicing agreement, owner trust agreement and
indenture, for each series of notes, with the Securities and Exchange
Commission, or the Commission, within 15 days after the initial issuance of
those securities.

THE MANUFACTURED HOME LOANS

     Manufactured home loans comprising or underlying the mortgage assets for a
series of securities will consist of manufactured housing conditional sales
contracts and installment loan agreements originated by a manufactured housing
dealer in the ordinary course of business and purchased by the depositor. Each
manufactured home loan will have been originated by a bank or savings
institution which is a Fannie Mae- or Freddie Mac-approved seller/servicer or
by any financial institution approved for insurance by the Secretary of Housing
and Urban Development under Section 2 of the National Housing Act. Mortgage
loans, including an interest in that mortgage loan, or manufactured home loans,
including an interest in that manufactured home, that are conveyed to the trust
for a series is referred to throughout this prospectus as the "loans."

     The manufactured home loans may be conventional loans, FHA loans or VA
loans. Each manufactured home loan will be secured by a manufactured home. In
most cases, the manufactured home loans will be fully amortizing and will bear
interest at a fixed interest rate.

     The manufactured homes securing the manufactured home loans, in most
cases, consist of manufactured homes within the meaning of 42 United States
Code, Section 5402(6), which defines a "manufactured home" as "a structure,
transportable in one or more sections, which in the traveling mode, is eight
body feet or more in width or forty body feet or more in length, or, when
erected on site, is three hundred twenty or more square feet, and which is
built on a permanent chassis and designed to be used as a dwelling with or
without a permanent foundation when connected to the required utilities, and
includes the plumbing, heating, air-conditioning, and electrical systems
contained therein; except that such term shall include any structure which
meets all the requirements of this paragraph except the size requirements and
as to which the manufacturer voluntarily files a certification required by the
Secretary of Housing and Urban Development and complies with the standards
established under this chapter." In addition, the following restrictions, in
most cases, apply for manufactured home loans comprising or underlying the
mortgage assets for a series:


                                       29
<PAGE>

    o no manufactured home loan will have had a LTV ratio at origination in
      excess of 95%;

    o each manufactured home loan must have an original term to maturity of
      not less than three years and not more than 25 years;

    o no manufactured home loan may be more than 30 days delinquent as to
      payment of principal or interest as of the cut-off date; and

    o each manufactured home loan must have, as of the cut-off date, a
      standard hazard insurance policy, which may be a blanket policy, in
      effect for that manufactured home loan.

     The initial LTV ratio of any manufactured home loan represents the ratio
of the principal amount of the manufactured home loan at origination to the
appraised value of that manufactured home. For underwriting of manufactured
home loans, see "Loan Underwriting Procedures and Standards." For servicing of
manufactured home loans, see "Servicing of Loans."

     The related prospectus supplement for each series will provide information
for the manufactured home loans comprising the mortgage assets as of the
cut-off date, including, among other things:

    o the aggregate outstanding principal balance of the manufactured home
      loans comprising or underlying the mortgage assets;

    o the weighted average interest rate on the manufactured home loans;

    o the average outstanding principal balance of the manufactured home
      loans;

    o the weighted average remaining scheduled term to maturity of the
      manufactured home loans and the range of remaining scheduled terms to
      maturity;

    o the range of LTV ratios of the manufactured home loans;

    o the relative percentages, by principal balance as of the cut-off date,
      of manufactured home loans that were made on new manufactured homes and
      on used manufactured homes;

    o any pool insurance policy, special hazard insurance policy or bankruptcy
      bond or other credit support relating to the manufactured home loans; and


    o the distribution by state of manufactured homes securing the loans.

The related prospectus supplement will also specify any other limitations on
the types or characteristics of manufactured home loans which may be included
in the mortgage assets for a series.

     If information of the nature specified in the preceding paragraph for the
manufactured home loans is not known to the depositor at the time the
securities are initially offered, more general information of the nature
described in that paragraph will be provided in the prospectus supplement. The
final specific information will be presented in a Current Report on Form 8-K to
be available to investors on the date of issuance of the related series and to
be filed with the Commission within 15 days after the initial issuance of those
securities.


COLLECTION ACCOUNT AND CERTIFICATE ACCOUNT

     In most cases, a separate Collection Account for each series will be
established by the master servicer in the name of the trustee for deposit of:

    o all distributions received on the mortgage assets for that series,

    o all Advances, other than Advances deposited into the Certificate
      Account,

    o the amount of cash to be initially deposited in that Collection Account,
      if any,

    o reinvestment income on those funds and other amounts required to be
      deposited in that Collection Account under the related pooling and
      servicing agreement or the related servicing agreement and indenture.


                                       30
<PAGE>

Any reinvestment income or other gain from investments of funds in the
Collection Account will usually be credited to that Collection Account, and any
loss resulting from those investments will be charged to that Collection
Account. That reinvestment income may, however, be payable to the master
servicer or to a servicer as additional servicing compensation. See "Servicing
of Loans" and "The Agreements--Investment of Funds." In this case, that
reinvestment income would not be included in calculation of the Available
Distribution Amount. See "Description of the Securities--Distributions on the
Securities."

     Funds on deposit in the Collection Account will be available for deposit
into the Certificate Account for various payments provided for in the related
pooling and servicing agreement or the related servicing agreement and
indenture. In most cases, amounts in the Collection Account constituting
reinvestment income which is payable to the master servicer as additional
servicing compensation will not be included in determining amounts to be
remitted to the trustee for deposit into the Certificate Account. In addition,
amounts in the Collection Account for the reimbursement of advances or
expenses, amounts relating to any Servicing Fee, Retained Interest, and amounts
to be deposited into any reserve fund will not be included in determining
amounts to be remitted to the trustee for deposit into the Certificate Account.


     A separate Certificate Account will be established by the trustee or by
the master servicer, in either case in the name of the trustee for the benefit
of the securityholders. All funds received from the master servicer and all
required withdrawals from any reserve funds and any draws on any financial
guarantee insurance for that series will be deposited into that Certificate
Account, pending distribution to the securityholders. Any reinvestment income
or other gain from investments of funds in the Certificate Account will usually
be credited to the Certificate Account and any loss resulting from those
investments will be charged to that Certificate Account. That reinvestment
income, may, however, be payable to the master servicer or the trustee as
additional servicing compensation. On each distribution date, all funds on
deposit in the Certificate Account, subject to permitted withdrawals by the
trustee as described in the related agreement, will be available for remittance
to the securityholders. If it is specified in the related prospectus supplement
that the Certificate Account will be maintained by the master servicer in the
name of the trustee, then, prior to each distribution date, funds in the
Certificate Account will be transferred to a separate account established by
and in the name of the trustee from which the funds on deposit in that
Collection Account will, subject to permitted withdrawals by the trustee as
specified in the related agreement, be available for remittance to the
securityholders. See also "The Agreements--Certificate Account" in this
prospectus.


OTHER FUNDS OR ACCOUNTS

     A trust may include other funds and accounts or a security interest in
various funds and accounts for the purpose of, among other things, paying
administrative fees and expenses of the trust and accumulating funds pending
their distribution. In some cases, funds may be established with the trustee
for Buy-Down Loans, GPM Loans, or other loans having special payment features
included in the trust in addition to or in lieu of those similar funds to be
held by the servicer. See "Servicing of Loans--Buy-Down Loans, GPM Loans and
Other Subsidized Loans." If private mortgage-backed securities are backed by
GPM Loans and the value of a multiple class series is determined on the basis
of the scheduled maximum principal balance of the GPM Loans, a GPM Fund will be
established which will be similar to that which would be established if GPM
Loans constituted the mortgage assets. See "Servicing of Loans-- Buy-Down
Loans, GPM Loans and Other Subsidized Loans" in this prospectus. Other similar
accounts may be established as specified in the related prospectus supplement.


                  LOAN UNDERWRITING PROCEDURES AND STANDARDS


UNDERWRITING STANDARDS

     The depositor expects that all loans comprising the mortgage assets for a
series will have been originated in accordance with the underwriting procedures
and standards described in this prospectus, as supplemented by the related
prospectus supplement.

     Sellers of the loans may include banks, savings and loan associations,
mortgage bankers, investment banking firms, the Resolution Trust Corporation,
or RTC, the Federal Deposit Insurance Corporation, or


                                       31
<PAGE>

the FDIC, and others. These sellers will make representations and warranties
concerning compliance with those underwriting procedures and standards.
Additionally, all or a sample of the loans comprising mortgage assets for a
series may be reviewed by or on behalf of the depositor to determine compliance
with those underwriting standards and procedures and compliance with other
requirements for inclusion in the trust.

    Mortgage loans will have been originated by:

    o a savings and loan association,

    o savings bank,

    o commercial bank,

    o credit union,

    o insurance company, or

    o similar institution which is supervised and examined by a federal or
      state authority or by a mortgagee approved by the Secretary of Housing
      and Urban Development under Sections 203 and 211 of the National Housing
      Act.

Manufactured home loans may have been originated by those institutions or by a
financial institution approved for insurance by the Secretary of Housing and
Urban Development under Section 2 of the National Housing Act. The originator
of a loan will have applied underwriting procedures intended to evaluate the
borrower's credit standing and repayment ability and the value and adequacy of
the related property as collateral. FHA loans and VA loans will have been
originated in compliance with the underwriting policies of FHA and VA,
respectively.

     Each borrower will have been required to complete an application designed
to provide to the original lender pertinent credit information about the
borrower. As part of the description of the borrower's financial condition, the
borrower will have furnished information relating to its assets, liabilities,
income, credit history, employment history and personal information. The
borrower will have also furnished an authorization to apply for a credit report
which summarizes the borrower's credit history with local merchants and lenders
and any record of bankruptcy. If the borrower was self-employed, the borrower
will have been required to submit copies of recent tax returns. The borrower
may also have been required to authorize verifications of deposits at financial
institutions where the borrower had demand or savings accounts. Various
considerations may cause an originator of loans to depart from these
guidelines. For example, when two individuals co-sign the loan documents, the
incomes and expenses of both individuals may be included in the computation.

     The adequacy of the property financed by the related loan as security for
repayment of that loan will in most cases have been determined by appraisal in
accordance with pre-established appraisal procedure guidelines for appraisals
established by or acceptable to the originator. Appraisers may be staff
appraisers employed by the loan originator or independent appraisers selected
in accordance with pre-established guidelines established by the loan
originator. The appraisal procedure guidelines will have required that the
appraiser or an agent on its behalf personally inspect the property and verify
that it was in good condition and that construction, if new, had been
completed. The appraisal will have been based on a market data analysis of
recent sales of comparable properties and, when deemed applicable, a
replacement cost analysis based on the current cost of constructing or
purchasing a similar property.

     The value of the property being financed, as indicated by the appraisal,
must currently support, and is anticipated to support in the future, the
outstanding loan balance. In most cases, appraisals are required to conform to
the Uniform Standards of Professional Appraisal Practice and the Financial
Institutions Reform, Recovery and Enforcement Act of 1989, or FIRREA, and must
be on forms acceptable to the Fannie Mae and/or Freddie Mac.

     Based on the data provided, various verifications and the appraisal, a
determination will have been made by the original lender that the borrower's
monthly income would be sufficient to enable the borrower to meet its monthly
obligations on the loan and other expenses related to the property. These


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<PAGE>

expenses include property taxes, utility costs, standard hazard and primary
mortgage insurance and, if applicable, maintenance fees and other levies
assessed by a Cooperative, and other fixed obligations other than housing
expenses. The originating lender's guidelines for loans secured by single
family property in most cases will specify that scheduled payments plus taxes
and insurance and all scheduled payments extending beyond one year, including
those mentioned above and other fixed obligations, such as car payments, would
equal no more than specified percentages of the prospective borrower's gross
income. In most cases, these guidelines will be applied only to the payments to
be made during the first year of the loan.

     For FHA loans and VA loans, traditional underwriting guidelines used by
the FHA and the VA, as the case may be, which were in effect at the time of
origination of each loan will in most cases have been applied. For manufactured
home loans that are conventional loans, the related prospectus supplement will
specify:

    o the required minimum downpayment,

    o the maximum amount of purchase price eligible for financing,

    o the maximum original principal amount that may be financed, and

    o the limitations on ratios of borrower's scheduled payment to gross
      monthly income and monthly income net of other fixed payment obligations.


     For mortgaged property consisting of vacation or second homes, no income
derived from the property will have been considered for underwriting purposes.

     Other types of loans that may be included in the mortgage assets for a
series are recently developed and may involve additional uncertainties not
present in traditional types of loans. For example, Balloon Loans, Buy-Down
Loans, GEM Loans and GPM Loans provide for escalating or variable payments by
the borrower. These types of loans are underwritten on the basis of a judgment
that the borrower will have the ability to make larger scheduled payments in
subsequent years. ARM loans may involve similar assessments.

     To the extent specified in the related prospectus supplement, the
depositor may purchase loans, or participation interests in those loans, for
inclusion in a trust that are underwritten under standards and procedures which
vary from and are less stringent than those described in this prospectus. For
instance, loans may be underwritten under a "limited documentation program," if
specified in the prospectus supplement. For those loans, minimal investigation
into the borrowers' credit history and income profile is undertaken by the
originator and those loans may be underwritten primarily on the basis of an
appraisal of the mortgaged property and LTV ratio on origination. Thus, if the
LTV ratio is less than a percentage specified in the related prospectus
supplement, the originator may forego other aspects of the review relating to
monthly income, and traditional ratios of monthly or total expenses to gross
income may not be applied.

     In addition, mortgage loans may have been originated in connection with a
governmental program under which underwriting standards were significantly less
stringent and designed to promote home ownership or the availability of
affordable residential rental property in spite of higher risks of default and
losses. The related prospectus supplement describes the underwriting standards
applicable to those mortgage loans.

     The underwriting standards applied by the loan originator require that the
underwriting officers be satisfied that the value of the property being
financed, as indicated by an appraisal, currently supports and is anticipated
to support in the future the outstanding loan balance, and provides sufficient
value to mitigate the effects of adverse shifts in real estate values. Some
states where the mortgaged properties may be located have "antideficiency" laws
requiring that lenders providing credit on single family property look solely
to the property for repayment in the event of foreclosure. See "Legal Aspects
of Loans" in this prospectus.

     For the underwriting standards applicable to any mortgage loans, those
underwriting standards, in most cases, include a set of specific criteria under
which the underwriting evaluation is made. However,


                                       33
<PAGE>

the application of those underwriting standards does not imply that each
specific criterion was satisfied individually. Rather, a mortgage loan will be
considered to be originated in accordance with a given set of underwriting
standards if, based on an overall qualitative evaluation, the loan is in
substantial compliance with those underwriting standards. For example, a
mortgage loan may be considered to comply with a set of underwriting standards,
even if one or more specific criteria included in those underwriting standards
were not satisfied, if other factors compensated for the criteria that were not
satisfied or if the mortgage loan is considered to be in substantial compliance
with the underwriting standards.


LOSS EXPERIENCE

     The general appreciation of real estate values experienced in the past has
been a factor in limiting the general loss experience on conventional loans.
However, there can be no assurance that the past pattern of appreciation in
value of the real property securing the conventional loans will continue.
Further, there is no assurance that appreciation of real estate values will
limit loss experiences on non-traditional housing such as manufactured homes or
Cooperative Dwellings. Similarly, no assurance can be given that the value of
the mortgaged property, including Cooperative Dwellings, securing a loan has
remained or will remain at the level existing on the date of origination of
that loan. If the residential real estate market should experience an overall
decline in property values such that the outstanding balances of the loans and
any secondary financing on the mortgaged properties securing those loans become
equal to or greater than the value of that mortgaged properties, then the
actual rates of delinquencies, foreclosures and losses could be higher than
those now experienced in the mortgage lending industry. In addition, the value
of property securing Cooperative Loans and the delinquency rates for
Cooperative Loans, could be adversely affected if the current favorable tax
treatment of cooperative tenant stockholders were to become less favorable. See
"Legal Aspects of Loans" in this prospectus.

     No assurance can be given that values of manufactured homes have or will
remain at the levels existing on the dates of origination of the related loan.
Manufactured homes are less likely to experience appreciation in value and more
likely to experience depreciation in value over time than other types of
mortgaged property. Additionally, delinquency, loss and foreclosure experience
on manufactured home loans may be adversely affected to a greater degree by
regional and local economic conditions than more traditional mortgaged
property.

     To the extent that losses resulting from delinquencies, losses and
foreclosures or repossession of mortgaged property for loans included in the
mortgage assets for a series of securities are not covered by the methods of
credit support or the insurance policies described in this prospectus or in the
related prospectus supplement, those losses will be borne by holders of the
securities of that series. Even where credit support covers all losses
resulting from delinquency and foreclosure or repossession, the effect of
foreclosures and repossessions may be to increase prepayment experience on the
mortgage assets, thus reducing average weighted life and affecting yield to
maturity. See "Yield, Prepayment and Maturity Considerations."


REPRESENTATIONS AND WARRANTS

     The seller, or other party as described in the related prospectus
supplement, will represent and warrant to the depositor and the trustee
regarding the mortgage loans comprising the mortgage assets in a trust, on
delivery of the mortgage loans to the trustee under a trust, among other
things, that:

    o any required hazard and primary mortgage insurance policies were
      effective at the origination of that mortgage loan, and that policy
      remained in effect on the date of purchase of that mortgage loan from the
      seller by or on behalf of the depositor;

    o either (A) a title insurance policy insuring, subject only to
      permissible title insurance exceptions, the lien status of the mortgage
      was effective at the origination of that mortgage loan and that policy
      remained in effect on the date of purchase of the mortgage loan from the
      seller by or on


                                       34
<PAGE>

      behalf of the depositor or (B) if the mortgaged property securing that
      mortgage loan is located in an area where those policies are often not
      available, there is in the related mortgage file an attorney's
      certificate of title indicating, subject to those permissible exceptions
      stated in that certificate, the first lien status of the mortgage;

    o the seller has good title to the mortgage loan and the mortgage loan was
      subject to no offsets, defenses or counterclaims except as may be
      provided under the Relief Act and except to the extent that any buydown
      agreement exists for a Buy-Down Loan;

    o there are no mechanics' liens or claims for work, labor or material
      affecting the related mortgaged property which are, or may be a lien
      prior to, or equal with, the lien of the related mortgage, subject only
      to permissible title insurance exceptions;

    o the related mortgaged property is free from material damage and at least
      in adequate repair;

    o there are no delinquent tax or assessment liens against the related
      mortgaged property;

    o that mortgage loan is not more than 30 days' delinquent as to any
      scheduled payment of and/or interest;

    o if a primary mortgage insurance policy is required for that mortgage
      loan, that mortgage loan is the subject of that policy; and

    o that mortgage loan was made in compliance with, and is enforceable
      under, all applicable local, state and federal laws in all material
      respects.

     If the mortgage loans include Cooperative Loans, no representations or
warranties concerning title insurance or hazard insurance will be given. In
addition, if the mortgage loans include condominium loans, no representation
regarding hazard insurance will be given. In most cases, the Cooperative or
condominium association itself is responsible for the maintenance of hazard
insurance for property owned by the Cooperative and the condominium association
is responsible for maintaining standard hazard insurance, insuring the entire
condominium building including each individual condominium unit, and the
borrowers of that Cooperative or condominium do not maintain separate hazard
insurance on their individual Cooperative Dwellings or condominium units. See
"Servicing of Loans--Maintenance of Insurance Policies and Other Servicing
Procedures" in this prospectus. For a Cooperative Loan, the seller, or other
party as described in the related prospectus supplement, will represent and
warrant that (a) the security interest created by the cooperative security
agreements is a valid first lien on the collateral securing the Cooperative
Loan, subject to the right of the related Cooperative to cancel shares and
terminate the proprietary lease for unpaid assessments, and (b) the related
Cooperative Dwelling is free of material damage and in good repair.

     For each manufactured home loan, the seller, or other party as described
in the related prospectus supplement, will represent and warrant, among other
things that:

    o immediately prior to the transfer and assignment of the manufactured
      home loans to the trustee, the seller had good title to, and was the sole
      owner of, each manufactured home loan;

    o as of the date of the transfer and assignment, the manufactured home
      loans are subject to no offsets, defenses or counterclaims;

    o each manufactured home loan at the time it was made complied in all
      material respects with applicable state and federal laws, including
      usury, equal credit opportunity and truth-in-lending or similar
      disclosure laws;

    o as of the date of the transfer and assignment, each manufactured home
      loan constitutes a valid first lien on the related manufactured home and
      that manufactured home is free of material damage and is in good repair;

    o as of the date of the representation and warranty, no manufactured home
      loan is more than 30 days delinquent and there are no delinquent tax or
      assessment liens against the related manufactured home; and


                                       35
<PAGE>

    o for each manufactured home loan, any required hazard insurance policy
      was effective at the origination of each manufactured home loan and
      remained in effect on the date of the transfer and assignment of the
      manufactured home loan from the depositor and that all premiums due on
      that insurance have been paid in full.

     In the case of the discovery of the breach of any representation or
warranty made by the master servicer concerning a loan that materially and
adversely affects the interest of the securityholder in that loan, the seller,
or other party as described in the prospectus supplement, will be obligated to
cure that breach in all material respects, repurchase that loan from the
trustee, or deliver a qualified substitute mortgage loan as described under
"The Agreements--Assignment of Mortgage Assets" in this prospectus. See "Risk
Factors--Limited Obligations and Assets of the Depositor" in this prospectus.
If the seller or other party fails to cure or repurchase, another party may be
required to cure or repurchase as described in the prospectus supplement. The
PMBS trustee, in the case of private mortgage-backed securities, or the
trustee, as applicable, will be required to enforce this obligation following
the practices it would employ in its good faith business judgment were it the
owner of that loan. The master servicer may be obligated to enforce those
obligations rather than the trustee or PMBS trustee.


                              SERVICING OF LOANS


GENERAL

     Customary servicing functions for loans constituting the mortgage assets
in the trust will be provided by the master servicer directly or through one or
more servicers subject to supervision by the master servicer. If the master
servicer is not directly servicing the loans, then the master servicer will:

    o administer and supervise the performance by the servicers of their
      servicing responsibilities under their subservicing agreements with the
      master servicer;

    o maintain any standard or special hazard insurance policy, primary
      mortgage insurance bankruptcy bond or pool insurance policy required for
      the related loans; and

    o advance funds as described under "Advances" in this prospectus.

If the master servicer services the loans through servicers as its agents, the
master servicer will be ultimately responsible for the performance of all
servicing activities, including those performed by the servicers, regardless of
its delegation of various responsibilities to that servicer.

     The master servicer will be a party to the pooling and servicing agreement
or servicing agreement for any series for which loans comprise the mortgage
assets and may be a party to a participation agreement executed for any
participation securities which constitute the mortgage assets. The master
servicer may be an affiliate of the depositor. The master servicer and each
servicer will usually be required to be a Fannie Mae- or Freddie Mac-approved
seller/servicer and, in the case of FHA loans, approved by HUD as an FHA
mortgagee.

     The master servicer will be paid the Servicing Fee for the performance of
its services and duties under each pooling and servicing agreement or servicing
agreement as specified in the related prospectus supplement. Each servicer, if
any, will be entitled to receive a portion of the Servicing Fee. In addition,
the master servicer or servicer may be entitled to retain late charges,
assumption fees and similar charges to the extent collected from mortgagors. If
a servicer is terminated by the master servicer, the servicing function of the
servicer will be either transferred to a substitute servicer or performed by
the master servicer. The master servicer will be entitled to retain the portion
of the Servicing Fee paid to the servicer under a terminated subservicing
agreement if the master servicer elects to perform those servicing functions
itself.

     The master servicer, at its election, may pay itself the Servicing Fee for
a series for each mortgage loan either by:

    o withholding the Servicing Fee from any scheduled payment of interest
      prior to the deposit of that payment in the Collection Account for that
      series,


                                       36
<PAGE>

    o withdrawing the Servicing Fee from the Collection Account after the
      entire scheduled payment has been deposited in the Collection Account, or


    o requesting that the trustee pay the Servicing Fee out of amounts in the
      Certificate Account.


COLLECTION PROCEDURES; ESCROW ACCOUNTS

     The master servicer will make reasonable efforts to collect all payments
required to be made under the mortgage loans and will, consistent with the
related pooling and servicing agreement or servicing agreement for a series and
any applicable insurance policies and other forms of credit support, and follow
the collection procedures as it follows for comparable loans held in its own
portfolio. Consistent with the preceding sentence, the master servicer may, in
its discretion:

    o waive any assumption fee, late payment charge, or other charge in
      connection with a loan and

    o arrange with a mortgagor a schedule for the liquidation of delinquencies
      by extending the due dates for scheduled payments on that loan. However,
      the master servicer shall first determine that the waiver or extension
      will not impair the coverage of any related insurance policy or
      materially and adversely affect the lien of the related mortgage or the
      lien on any related Additional Collateral.

In addition, if a material default occurs or a payment default is reasonably
foreseeable, the master servicer will be permitted, subject to any specific
limitations required by the related pooling and servicing agreement or
servicing agreement and described in the related prospectus supplement, to
modify, waive or amend any term of that mortgage loan, including deferring
payments, extending the stated maturity date or otherwise adjusting the payment
schedule. This modification, waiver or amendment will be permitted only if it
(1) is reasonably likely to produce a greater recovery for that mortgage loan
on a present value basis than would liquidation and (2) will not adversely
affect the coverage under any applicable instrument of credit enhancement.

     In most cases, the master servicer, to the extent permitted by law, will
establish and maintain Escrow Accounts in which payments by borrowers to pay
taxes, assessments, mortgage and hazard insurance premiums, and other
comparable items that are required to be paid to the mortgagee will be
deposited. Mortgage loans and manufactured home loans may not require those
payments under the loan related documents, in which case the master servicer
would not be required to establish any Escrow Account for those loans.
Withdrawals from the Escrow Accounts are to be made:

    o to effect timely payment of taxes, assessments, mortgage and hazard
      insurance,

    o to refund to borrowers amounts determined to be overages,

    o to pay interest to borrowers on balances in the Escrow Account to the
      extent required by law,

    o to repair or otherwise protect the property securing the related loan
      and to clear and terminate that Escrow Account.

The master servicer will be responsible for the administration of the Escrow
Accounts and, in most cases, will make advances to that account when a
deficiency exists in that account.


DEPOSITS TO AND WITHDRAWALS FROM THE COLLECTION ACCOUNT

     In most cases, the Collection Account will be an Eligible Account and the
funds held in that account may be invested, pending remittance to the trustee,
in eligible investments. The master servicer will usually be entitled to
receive as additional compensation any interest or other income earned on funds
in the Collection Account.

     In most cases, the master servicer will deposit into the Collection
Account for each series on the business day after the closing date any amounts
representing scheduled payments due after the related cut-off date but received
by the master servicer on or before the related cut-off date. After the cut-off
date, the master servicer will deposit into the Collection Account after the
date of receipt of those


                                       37
<PAGE>

scheduled payments, the following payments and collections received or made by
it, other than payments representing principal of and interest on the related
loans due on or before that cut-off date:

    o All payments on account of principal, including prepayments, on those
      loans;

    o All payments on account of interest on those loans net of any portion of
      that payment retained by the related servicer, including the master
      servicer, if any, as servicing compensation on the loans in accordance
      with the related pooling and servicing agreement or servicing agreement;

    o All Insurance Proceeds and all amounts received by the master servicer
      in connection with the liquidation of defaulted loans or property
      acquired relating to those defaulted loans, whether through foreclosure
      sale or otherwise. This includes all payments in connection with those
      loans received from the mortgagor, other than Liquidation Proceeds,
      exclusive of proceeds to be applied to the restoration or repair of the
      mortgaged property or released to the mortgagor in accordance with the
      master servicer's normal servicing procedures, net of Liquidation
      Expenses;

    o Any Buydown Funds, and, if applicable, investment earnings on the
      Buydown Funds required to be paid as described in this prospectus;

    o All proceeds of any mortgage loan in that trust purchased, or, in the
      case of a substitution, other amounts representing a principal
      adjustment, by the master servicer, the seller or any other person under
      the terms of the related pooling and servicing agreement or servicing
      agreement;

    o All amounts required to be deposited in that trust in connection with
      any losses on eligible investments under the related pooling and
      servicing agreement or servicing agreement; and

    o All other amounts required to be deposited in that trust under the
      related pooling and servicing agreement or servicing agreement.

     The master servicer is permitted, from time to time, to make withdrawals
from the Collection Account for various purposes, as specified in the related
pooling and servicing agreement or servicing agreement, which, in most cases,
will include the following, except as otherwise provided in that agreement:

    o to make deposits to the Certificate Account in the amounts and in the
      manner provided in the pooling and servicing agreement or servicing
      agreement;

    o to reimburse itself for Advances, including amounts advanced for taxes,
      insurance premiums or similar expenses as to any mortgaged property, out
      of late payments or collections on the related mortgage loan for which
      those Advances were made;

    o to pay to itself unpaid Servicing Fees, out of payments or collections
      of interest on each mortgage loan;

    o to pay to itself as additional servicing compensation any investment
      income on funds deposited in the Collection Account, and, if so provided
      in the related pooling and servicing agreement or servicing agreement,
      any profits realized on disposition of a mortgaged property acquired by
      deed in lieu of foreclosure or otherwise allowed under the related
      pooling and servicing agreement or servicing agreement;

    o to pay to itself or the seller all amounts received on to each mortgage
      loan purchased, repurchased or removed under the terms of the related
      pooling and servicing agreement or servicing agreement and not required
      to be distributed as of the date on which the related purchase price is
      determined;

    o to reimburse itself for any Advance previously made which the master
      servicer has determined to not be ultimately recoverable from Liquidation
      Proceeds, Insurance Proceeds or otherwise, subject, in the case of a
      series with senior securities and subordinate securities, to limitations
      described in the related pooling and servicing agreement or servicing
      agreement as described in the related prospectus supplement;


                                       38
<PAGE>

    o to reimburse itself, the trustee or the depositor for other expenses
      incurred for which it, the trustee or the depositor is entitled to
      reimbursement or against which it, the trustee or the depositor is
      indemnified under the related pooling and servicing agreement or the
      related servicing agreement and indenture;

    o to make any other withdrawals permitted by the related pooling and
      servicing agreement or servicing agreement and described in the related
      prospectus supplement; and

    o to clear the Collection Account of amounts relating to the corresponding
      loans in connection with the termination of the trust under the pooling
      and servicing agreement or servicing agreement.


SERVICING ACCOUNTS

     In those cases where a servicer is servicing a mortgage loan, the servicer
will usually establish and maintain a Servicing Account that will be an
Eligible Account and which is otherwise acceptable to the master servicer. The
servicer is required to deposit into the Servicing Account all proceeds of
mortgage loans received by the servicer, less its servicing compensation and
any reimbursed expenses and advances, to the extent permitted by the
subservicing agreement. On the date specified in the related prospectus
supplement, the servicer will remit to the master servicer all funds held in
the Servicing Account for each mortgage loan, after deducting from that
remittance an amount equal to the servicing compensation and unreimbursed
expenses and advances to which it is then entitled under the related
subservicing agreement, to the extent not previously paid to or retained by it.
In addition on each of those dates the servicer will be required to remit to
the master servicer any amount required to be advanced under the related
subservicing agreement, and the servicer will also be required to remit to the
master servicer, within one business day of receipt, the proceeds of any
principal Prepayments and all Insurance Proceeds and Liquidation Proceeds.


BUY-DOWN LOANS, GPM LOANS AND OTHER SUBSIDIZED LOANS

     For each Buy-Down Loan, if any, included in a trust the master servicer
will deposit all Buy-Down Amounts in a Buy-Down Fund. The amount of that
deposit, together with investment earnings on that deposit at the rate
specified in the related prospectus supplement, will provide sufficient funds
to support the payments on that Buy-Down Loan on a level debt service basis.
The master servicer will not be obligated to add to the Buy-Down Account should
amounts in that account and investment earnings prove insufficient to maintain
the scheduled level of payments on the Buy-Down Loans, in which event
distributions to the securityholders may be affected. A Buy-Down Fund, in most
cases, will not be included in or deemed to be a part of the trust.

     The terms of some of the loans may provide for the contribution of subsidy
funds by the seller of the related mortgaged property or by another entity. The
master servicer will deposit the subsidy funds in a Subsidy Fund for that loan.
In most cases, the terms of the loan will provide for the contribution of the
entire undiscounted amount of subsidy amounts necessary to maintain the
scheduled level of payments due during the early years of that loan. Neither
the master servicer, any servicer nor the depositor will be obligated to add to
that Subsidy Fund any of its own funds. The Subsidy Fund, in most cases, will
not be included in or deemed to be a part of the trust.

     If the depositor values any GPM Loans deposited into the trust for a
multiple class series on the basis of that GPM Loan's scheduled maximum
principal balance, the master servicer will deposit in a GPM Fund complying
with the requirements described above for the Collection Account an amount
which, together with anticipated reinvestment income on that amount, will be
sufficient to cover the amount by which payments of principal and interest on
those GPM Loans assumed in calculating payments due on the securities of that
multiple class series exceed the scheduled payments on those GPM Loans. The
trustee will withdraw amounts from the GPM Fund for a series on a prepayment of
those GPM Loan as necessary and apply those amounts to the payment of principal
and interest on the securities of that series. Neither the depositor, the
master servicer nor any servicer will be obligated to supplement the GPM Fund
should amounts in that account and investment earnings on those amounts prove
insufficient to maintain the scheduled level of payments, in which event,
distributions to the securityholders may be affected. The GPM Fund, in most
cases, will not be included in or deemed to be part of the trust.


                                       39
<PAGE>

     For any other type of loan which provides for payments other than on the
basis of level payments, an account may be established as described in the
related prospectus supplement on terms similar to those relating to the
Buy-Down Fund, Subsidiary Fund or the GPM Fund.


ADVANCES

     General. The related prospectus supplement will describe when the master
servicer or servicer will make an Advance for delinquent payments of principal
of and interest on a loan. In most cases, neither the master servicer nor any
servicer will be obligated to make Advances. That obligation to make Advances
may be limited in amount, may be limited to advances received from the
servicers, if any, or may not be activated until a particular portion of a
specified reserve fund is depleted. If the master servicer is obligated to make
Advances, a surety bond or other credit support may be provided for that
obligation as described in the related prospectus supplement. Advances are
intended to provide liquidity and not to guarantee or insure against losses.
Accordingly, any funds advanced are recoverable by the servicer or the master
servicer, as the case may be, out of amounts received on particular loans which
represent late recoveries of principal or interest, proceeds of insurance
polices or Liquidation Proceeds for which that Advance was made. If an Advance
is made and subsequently determined to be nonrecoverable from late collections,
proceeds of insurance polices or Liquidation Proceeds from the related loan,
the servicer or master servicer will be entitled to reimbursement from other
funds in the Certificate Account, Collection Account or Servicing Account.
Recovery also may be from a specified reserve fund as applicable, to the extent
specified in the related prospectus supplement. For any multiple class series,
so long as the related subordinate securities remain outstanding, those
Advances may also be reimbursable in most cases out of amounts otherwise
distributable to holders of the subordinate securities, if any.

     Advances in Connection With Prepaid Loans. In addition, when a borrower
makes a principal prepayment in full between due dates on the related loan, the
borrower will usually be required to pay interest on the principal amount
prepaid only to the date of that prepayment. In order that one or more classes
of the securityholders of a series will not be adversely affected by any
resulting shortfall in interest, the master servicer may be obligated to
advance moneys as needed to cover a full scheduled payment of interest on the
related loan, less any related Servicing Fees. That principal prepayment,
together with a full scheduled payment of interest on that prepayment to the
extent of the adjustment or advance, will be distributed to securityholders on
the related distribution date. If the amount necessary to include a full
scheduled payment of interest as described in the second preceding sentence
exceeds the amount which the master servicer is obligated to advance, as
applicable, a shortfall may occur as a result of a prepayment in full. See
"Yield, Prepayment and Maturity Considerations."


MAINTENANCE OF INSURANCE POLICIES AND OTHER SERVICING PROCEDURES

     Standard Hazard Insurance; Flood Insurance. Except as otherwise specified
in the related prospectus supplement, the master servicer will be required to
maintain or to cause the borrower on each loan to maintain or will use its best
reasonable efforts to cause each servicer of a loan to maintain a standard
hazard insurance policy providing coverage of the standard form of fire
insurance with extended coverage for some other hazards as is customary in the
state in which the property securing the related loan is located. See
"Description of Mortgage and Other Insurance" in this prospectus. In most
cases, coverage will be in an amount at least equal to the greater of (1) the
amount necessary to avoid the enforcement of any co-insurance clause contained
in the policy or (2) the outstanding principal balance of the related loan.

     The master servicer will also maintain on REO Property that secured a
defaulted loan and that has been acquired on foreclosure, deed in lieu of
foreclosure, or repossession, a standard hazard insurance policy in an amount
that is at least equal to the maximum insurable value of that REO Property. No
earthquake or other additional insurance will be required of any borrower or
will be maintained on REO Property acquired for a defaulted loan, other than
under those applicable laws and regulations as shall at any time be in force
and shall require for additional insurance. When, at the time of origination of
a loan or at any time during the term of the loan the master servicer or the
related servicer determines that the


                                       40
<PAGE>

related mortgaged property is located in an area identified on a Flood Hazard
Boundary Map or Flood Insurance Rate Map issued by the Flood Emergency
Management Agency as having special flood hazards and flood insurance has been
made available, the borrower will cause to be maintained a flood insurance
policy meeting the requirements of the current guidelines of the Federal
Insurance Administration with an acceptable insurance carrier, in an amount
representing coverage not less than the lesser of:

    o the outstanding principal balance of the loan or

    o the maximum amount of insurance which is available under the National
      Flood Insurance Act of 1968, the Flood Disaster Protection Act of 1983 or
      the National Flood Insurance Reform Act of 1994, as amended.

The pooling and servicing agreement or servicing agreement will obligate the
mortgagor to obtain and maintain all requisite flood insurance coverage at the
mortgagor's cost and expense, and on the mortgagor's failure to do so,
authorizes the master servicer or servicer to obtain and maintain that coverage
at the mortgagor's cost and expense and to seek reimbursement for that cost and
expense from the mortgagor.

     Any amounts collected by the master servicer or the servicer, as the case
may be, under those policies of insurance, other than amounts to be applied to
the restoration or repair of the mortgaged property, released to the borrower
in accordance with normal servicing procedures or used to reimburse the master
servicer for amounts to which it is entitled to reimbursement, will be
deposited in the Collection Account. In the event that the master servicer
obtains and maintains a blanket policy insuring against hazard losses on all of
the loans, written by an insurer then acceptable to each rating agency which
assigns a rating to that series, it will conclusively be deemed to have
satisfied its obligations to cause to be maintained a standard hazard insurance
policy for each loan or related REO Property. This blanket policy may contain a
deductible clause, in which case the master servicer will, in the event that
there has been a loss that would have been covered by that policy absent that
deductible clause, deposit in the Collection Account the amount not otherwise
payable under the blanket policy because of the application of that deductible
clause.

     The depositor will not require that a standard hazard or flood insurance
policy be maintained on the Cooperative Dwelling relating to any Cooperative
Loan. In most cases, the Cooperative itself is responsible for maintenance of
hazard insurance for the property owned by the cooperative and the
tenant-stockholders of that cooperative do not maintain individual hazard
insurance policies. To the extent, however, that a Cooperative and the related
borrower on a Cooperative Loan do not maintain that insurance or do not
maintain adequate coverage or any insurance proceeds are not applied to the
restoration of damaged property, any damage to that borrower's Cooperative
Dwelling or that Cooperative's building could significantly reduce the value of
the collateral securing that Cooperative Loan to the extent not covered by
other credit support. Similarly, the depositor will not require that a standard
hazard or flood insurance policy be maintained on a condominium unit relating
to any condominium loan. In most cases, the condominium association is
responsible for maintenance of hazard insurance insuring the entire condominium
building, including each individual condominium unit, and the owner(s) of an
individual condominium unit do not maintain separate hazard insurance policies.
To the extent, however, that a condominium association and the related borrower
on a condominium loan do not maintain that insurance or do not maintain
adequate coverage or any insurance proceeds are not applied to the restoration
of damaged property, any damage to that borrower's condominium unit or the
related condominium building could significantly reduce the value of the
collateral securing that condominium loan to the extent not covered by other
credit support.

     Special Hazard Insurance Policy. If, and to the extent specified in the
related prospectus supplement, the master servicer will maintain a special
hazard insurance policy, in the amount specified in the related prospectus
supplement, in full force and effect for the loans. In most cases, the special
hazard insurance policy will provide for a fixed premium rate based on the
declining aggregate outstanding principal balance of the loans. The master
servicer will agree to pay the premium for any special hazard insurance policy
on a timely basis. If the special hazard insurance policy is canceled or
terminated for any reason other than the exhaustion of total policy coverage,
the master servicer will


                                       41
<PAGE>

exercise its best reasonable efforts to obtain from another insurer a
replacement policy comparable to the special hazard insurance policy with a
total coverage which is equal to the then existing coverage of the terminated
special hazard insurance policy. However, if the cost of that replacement
policy is greater than the cost of the terminated special hazard insurance
policy, the amount of coverage under the replacement policy will, in most
cases, be reduced to a level so that the applicable premium does not exceed
150% of the cost of the special hazard insurance policy that was replaced. Any
amounts collected by the master servicer under the special hazard insurance
policy in the nature of insurance proceeds will be deposited in the Collection
Account, net of amounts to be used to repair, restore or replace the related
property securing the loan or to reimburse the master servicer or a servicer
for related amounts owed to it. Some characteristics of the special hazard
insurance policy are described under "Description of Mortgage and Other
Insurance--Hazard Insurance on the Loans."

     Primary Mortgage Insurance. To the extent described in the related
prospectus supplement, the master servicer will be required to use its best
reasonable efforts to keep, or to cause each servicer to keep, in full force
and effect, a primary mortgage insurance policy for each conventional loan
secured by single family property for which that coverage is required for as
long as the related mortgagor is obligated to maintain that primary mortgage
insurance under the terms of the related loan. The master servicer will not
cancel or refuse to renew that primary mortgage insurance policy in effect at
the date of the initial issuance of the securities that is required to be kept
in force unless a replacement primary mortgage insurance policy for that
cancelled or nonrenewed policy is maintained with a Qualified Insurer.

     Primary insurance policies will be required for manufactured home loans
only to the extent described in the related prospectus supplement. If primary
mortgage insurance is to be maintained for manufactured home loans, the master
servicer will be required to maintain that insurance as described above. For
further information regarding the extent of coverage under a primary mortgage
insurance policy, see "Description of Mortgage and Other Insurance--Mortgage
Insurance on the Loans."

     FHA Insurance and VA Guarantees. To the extent specified in the related
prospectus supplement, all or a portion of the loans may be insured by the FHA
or guaranteed by the VA. The master servicer will be required to take steps
that are reasonably necessary to keep that insurance and guarantees in full
force and effect. See "Description of Mortgage and Other Insurance--Mortgage
Insurance on the Loans."

     Pool Insurance Policy. The master servicer may be obligated to use its
best reasonable efforts to maintain a pool insurance policy for the loans in
the amount and with the coverage described in the related prospectus
supplement. In most cases, the pool insurance policy will provide for a fixed
premium rate on the declining aggregate outstanding principal balance of the
loans. The master servicer will be obligated to pay the premiums for that pool
insurance policy on a timely basis.

     The prospectus supplement will identify the pool insurer for the related
series of securities. If the pool insurer ceases to be a Qualified Insurer
because it is not approved as an insurer by Freddie Mac or Fannie Mae or
because its claims-paying ability is no longer rated in the category required
by the related prospectus supplement, the master servicer will be obligated to
review, no less often than monthly, the financial condition of the pool insurer
to determine whether recoveries under the pool insurance policy are jeopardized
by reason of the financial condition of the pool insurer. If the master
servicer determines that recoveries may be so jeopardized or if the pool
insurer ceases to be qualified under applicable law to transact a mortgage
guaranty insurance business, the master servicer will exercise its best
reasonable efforts to obtain from another Qualified Insurer a comparable
replacement pool insurance policy with a total coverage equal to the then
outstanding coverage of the pool insurance policy to be replaced. However, if
the premium rate on the replacement policy is greater than that of the existing
pool insurance policy, then the coverage of the replacement policy will, in
most cases, be reduced to a level so that its premium rate does not exceed 150%
of the premium rate on the pool insurance policy to be replaced. Payments made
under a pool insurance policy will be deposited into the Collection Account,
net of expenses of the master servicer or any related unreimbursed Advances or
unpaid Servicing Fee. Typical terms of the pool insurance policy are described
under "Description of Mortgage and Other Insurance-- Mortgage Insurance on the
Loans."


                                       42
<PAGE>

     Bankruptcy Bond. The master servicer may be obligated to use its best
reasonable efforts to obtain and after those efforts maintain a bankruptcy bond
or similar insurance or guaranty in full force and effect throughout the term
of the related agreement, unless coverage under that bankruptcy bond has been
exhausted through payment of claims. The master servicer may be required to pay
from its servicing compensation the premiums for the bankruptcy bond on a
timely basis. Coverage under the bankruptcy bond may be cancelled or reduced by
the master servicer at any time, provided that the cancellation or reduction
does not adversely affect the then current rating of the related series of
securities. See "Description of Mortgage and Other Insurance--Bankruptcy Bond"
in this prospectus.


PRESENTATION OF CLAIMS; REALIZATION ON DEFAULTED LOANS

     The master servicer, on behalf of the trustee and the securityholders,
will be required to present or cause to be presented, claims for any standard
hazard insurance policy, pool insurance policy, special hazard insurance
policy, bankruptcy bond, or primary mortgage insurance policy, and to the FHA
and the VA, if applicable relating to any FHA insurance or VA guarantee
respecting defaulted mortgage loans.

     The master servicer will use its reasonable best efforts to foreclose on,
repossess or otherwise comparably convert the ownership of the real properties
securing the related loans as come into and continue in default and as to which
no satisfactory arrangements can be made for collection of delinquent payments.
In connection with the foreclosure or other conversion, the master servicer
will follow those practices and procedures as it deems necessary or advisable
and as are normal and usual in its servicing activities for comparable loans
serviced by it. However, the master servicer will not be required to expend its
own funds in connection with any foreclosure or towards the restoration of the
property unless it determines:

    o that restoration or foreclosure will increase the Liquidation Proceeds
      of the related mortgage loan available to the securityholders after
      reimbursement to itself for those expenses, and

    o that those expenses will be recoverable by it either through Liquidation
      Proceeds or the proceeds of insurance.

In spite of anything to the contrary in this prospectus, in the case of a trust
for which a REMIC election or elections have been made, the master servicer
shall not liquidate any collateral acquired through foreclosure later than two
years after the acquisition of that collateral, unless a longer period of time
is necessary for the orderly liquidation of the collateral and the master
servicer has obtained from the Internal Revenue Service, or IRS, an extension
of the two year period within which it would otherwise be required to liquidate
the collateral. While the holder of mortgaged property acquired through
foreclosure can often maximize its recovery by providing financing to a new
purchaser, the trust will have no ability to do so and neither the master
servicer nor any servicer will be required to do so.

     For a mortgage loan in default, the master servicer may pursue foreclosure
or similar remedies concurrently with pursuing any remedy for a breach of a
representation and warranty. However, the master servicer is not required to
continue to pursue both of those remedies if it determines that one remedy is
more likely to result in a greater recovery. If that mortgage loan is an
Additional Collateral Loan, the master servicer, or the related servicer, if
the lien on the Additional Collateral for that Additional Collateral Loan is
not assigned to the trustee on behalf of the securityholders, may proceed
against the related mortgaged property or the related Additional Collateral
first or may proceed against both concurrently, as permitted by applicable law
and the terms under which that Additional Collateral is held, including any
third-party guarantee. On the first to occur of final liquidation, by
foreclosure or otherwise, and a repurchase or substitution under a breach of a
representation and warranty, that mortgage loan will be removed from the
related trust if it has not been removed previously.

     If any property securing a defaulted loan is damaged and proceeds, if any,
from the related standard hazard insurance policy or the applicable special
hazard insurance policy, if any, are insufficient to restore the damaged
property to a condition sufficient to permit recovery under any pool insurance
policy or any primary mortgage insurance policy, FHA insurance, or VA
guarantee, neither the master servicer nor any servicer will be required to
expend its own funds to restore the damaged property unless it determines:


                                       43
<PAGE>

    o that restoration will increase the Liquidation Proceeds of the loan
      after reimbursement of the expenses incurred by that servicer or the
      master servicer, and

    o that those expenses will be recoverable by it through proceeds of the
      sale of the property or proceeds of the related pool insurance policy or
      any related primary mortgage insurance policy, FHA insurance, or VA
      guarantee.

     As to collateral securing a Cooperative Loan, any prospective purchaser
will, in most cases, have to obtain the approval of the board of directors of
the relevant cooperative before purchasing the shares and acquiring rights
under the proprietary lease or occupancy agreement securing that Cooperative
Loan. See "Legal Aspects of Loans--Realizing On Cooperative Loan Security" in
this prospectus. This approval is usually based on the purchaser's income and
net worth and numerous other factors. Although the Cooperative's approval is
unlikely to be unreasonably withheld or delayed, the necessity of acquiring
that approval could limit the number of potential purchasers for those shares
and otherwise limit the trust's ability to sell and realize the value of those
shares.

     For a defaulted manufactured home loan, the value of the related
manufactured home can be expected to be less on resale than a new manufactured
home. To the extent equity does not cushion the loss in market value, and that
loss is not covered by other credit support, a loss may be experienced by the
trust.


ENFORCEMENT OF DUE-ON-SALE CLAUSES

     In most cases, for a series, when any mortgaged property is about to be
conveyed by the borrower, the master servicer will, to the extent it has
knowledge of that prospective conveyance and prior to the time of the
consummation of that conveyance, exercise the trustee's right to accelerate the
maturity of that loan under the applicable "due-on-sale" clause, if any, unless
the master servicer reasonably believes that the clause is not enforceable
under applicable law or if the enforcement of that clause would result in loss
of coverage under any primary mortgage insurance policy. If those conditions
are not met or the master servicer reasonably believes that enforcement of a
due-on-sale clause will not be enforceable, the master servicer is authorized
to accept from or enter into a substitution or assumption agreement, on behalf
of the trustee, with the person to whom that property has been or is about to
be conveyed. Under this agreement, that person becomes liable under the loan
and under which the original borrower is released from liability and that
person is substituted as the borrower and becomes liable under the loan. Any
fee collected in connection with an assumption will be retained by the master
servicer as additional servicing compensation. The terms of a loan may not be
changed in connection with a substitution or assumption.


SERVICING COMPENSATION AND PAYMENT OF EXPENSES

     The master servicer or any servicer will be entitled to a servicing fee in
an amount to be determined as specified in the related prospectus supplement.
The servicing fee may be fixed or variable, as specified in the related
prospectus supplement. In most cases, the master servicer or any servicer will
be entitled to additional servicing compensation in the form of assumption
fees, late payment charges, or excess proceeds following disposition of
property in connection with defaulted loans and as otherwise specified in this
prospectus.

     In most cases, the master servicer will pay the fees of the servicers, if
any, and various expenses incurred in connection with the servicing of the
loans, including, without limitation:

    o the payment of the fees and expenses of the trustee and independent
      accountants,

    o payment of insurance policy premiums and the cost of credit support, if
      any, and

    o payment of expenses incurred in enforcing the obligations of servicers
      and sellers and in the preparation of reports to securityholders.

Some of these expenses may be reimbursable under the terms of the related
agreement from Liquidation Proceeds and the proceeds of insurance policies and,
in the case of enforcement of the obligations of servicers and sellers, from
any recoveries in excess of amounts due on the related loans or from specific
recoveries of costs.


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<PAGE>

     The master servicer will be entitled to reimbursement for various expenses
incurred by it in connection with the liquidation of defaulted loans. The
related trust will suffer no loss by reason of those expenses to the extent
claims are paid under related insurance policies or from the Liquidation
Proceeds. If claims are either not made or paid under the applicable insurance
policies or if coverage under those insurance policies has been exhausted, the
related trust will suffer a loss to the extent that Liquidation Proceeds, after
reimbursement of the master servicer's expenses, are less than the outstanding
principal balance of and unpaid interest on the related loan which would be
distributable to securityholders. In addition, the master servicer will be
entitled to reimbursement of expenditures incurred by it in connection with the
restoration of property securing a defaulted loan, that right of reimbursement
being prior to the rights of the securityholders to receive any related
proceeds of insurance policies, Liquidation Proceeds or amounts derived from
other forms of credit support. The master servicer is also entitled to
reimbursement from the Collection Account and the Certificate Account for
Advances.

     In most cases, the rights of the master servicer to receive funds from the
Collection Account or the Certificate Account for a series, whether as the
Servicing Fee or other compensation, or for the reimbursement of Advances,
expenses or otherwise, are not subordinate to the rights of securityholders of
that series.


EVIDENCE AS TO COMPLIANCE

     In most cases, each pooling and servicing agreement and each servicing
agreement will provide for delivery, on or before a specified date in each
year, to the trustee of an annual statement signed by an officer of the master
servicer to the effect that the master servicer has complied in all material
respects with the minimum servicing standards specified in the Uniform Single
Attestation Program for Mortgage Bankers and has fulfilled in all material
respects its obligations under the related agreement throughout the preceding
year. If there has been material noncompliance with those servicing standards
or a material default in the fulfillment of any obligation, that statement
shall include a description of that noncompliance or specify that known
default, as the case may be, and the nature and status of the default. The
statement may be provided as a single form making the required statements as to
more than one agreement.

     In most cases, each pooling and servicing agreement and each servicing
agreement will also provide that on or before a specified date in each year,
beginning the first date that is at least a specified number of months after
the cut-off date, a firm of independent public accountants will furnish a
report to the depositor and the trustee stating the opinion of that firm. The
opinion will state that on the basis of an examination by that firm conducted
substantially in accordance with standards established by the American
Institute of Certified Public Accountants, the assertion by management of the
master servicer regarding the master servicer's compliance with the minimum
servicing standards specified in the Uniform Single Attestation Program for
Mortgage Bankers during the preceding year is fairly stated in all material
respects, subject to those exceptions and other qualifications that, in the
opinion of that firm, those accounting standards require it to report. In
rendering its statement that firm may rely, as to the matters relating to the
direct servicing of mortgage loans by servicers, on comparable statements for
examinations conducted by independent public accountants substantially in
accordance with standards established by the American Institute of Certified
Public Accountants, rendered within one year of that statement, for those
servicers which also have been the subject of that examination.


MATTERS REGARDING THE MASTER SERVICER AND THE DEPOSITOR

     The master servicer for each series will be identified in the related
prospectus supplement. The master servicer may be an affiliate of the depositor
and may have other business relationships with the depositor and its
affiliates.

     In most cases, the master servicer may not resign from its obligations and
duties under the related pooling and servicing agreement or servicing agreement
except on its determination that its duties under that agreement are no longer
permissible under applicable law or except in connection with a permitted
transfer of servicing. This resignation will become effective until the trustee
or a successor master servicer has assumed the master servicer's obligations
and duties under the related agreement.


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<PAGE>

     In the event of an Event of Default under the related pooling and
servicing agreement or servicing agreement, the master servicer may be replaced
by the trustee or a successor master servicer. See "The Agreements--Rights in
the Case of Events of Default" in this prospectus.

     In most cases, the master servicer has the right, with the consent of the
trustee, which consent shall not be unreasonably withheld, to assign its rights
and delegate its duties and obligations under the pooling and servicing
agreement or servicing agreement for each series; provided that the purchaser
or transferee accepting that assignment or delegation:

    o is qualified to sell loans to and service mortgage loans for Fannie Mae
      or Freddie Mac;

    o has a net worth of not less than $10,000,000;

    o is acceptable to each rating agency for purposes of maintaining its
      then-current ratings of the securities;

    o is reasonably acceptable to the trustee; and

    o executes and delivers to the depositor and the trustee an agreement, in
      form and substance reasonably satisfactory to the trustee, which contains
      an assumption by that purchaser or transferee of the due and punctual
      performance and performed or observed by the master servicer under the
      related pooling and servicing agreement or servicing agreement from and
      after the date of that agreement.

     To the extent that the master servicer transfers its obligations to a
wholly-owned subsidiary or affiliate, that subsidiary or affiliate need not
satisfy the criteria described above. However, in that instance the assigning
master servicer will remain liable for the servicing obligations under the
related agreement. Any entity into which the master servicer is merged or
consolidated or any successor corporation resulting from any merger, conversion
or consolidation will succeed to the master servicer's obligations under the
related agreement, provided that the successor or surviving entity meets the
requirements for a successor master servicer described in the preceding
paragraph.

     Each pooling and servicing agreement and each servicing agreement will
also provide that neither the master servicer, the depositor, nor any director,
officer, employee or agent of the master servicer or the depositor, will be
under any liability to the related trust or the securityholders for any action
taken or for failing to take any action in good faith under the related
agreement or for errors in judgment. However, neither the master servicer, the
depositor, nor any other person will be protected against any breach of
warranty or representations made by that party under the related agreement or
the failure to perform its obligations in compliance with any standard of care
described in the related agreement or liability which would otherwise be
imposed by reason of willful misfeasance, bad faith or negligence in the
performance of their duties or by reason of reckless disregard of their
obligations and duties under that agreement. Each pooling and servicing
agreement and each servicing agreement will further provide that the master
servicer, the depositor and any director, officer, employee or agent of the
master servicer or the depositor is entitled to indemnification from the
related trust and will be held harmless against any loss, liability or expense
incurred in connection with any legal action relating to the related agreement
or the securities, other than any loss, liability or expense incurred by reason
of willful misfeasance, bad faith or negligence in the performance of duties
under that agreement or by reason of reckless disregard of obligations and
duties under that agreement. In addition, the related agreement provides that
neither the master servicer nor the depositor is under any obligation to appear
in, prosecute or defend any legal action which is not incidental to its
servicing responsibilities under the related agreement which, in its opinion,
may involve it in any expense or liability. The master servicer or the
depositor may, in its discretion, undertake that action which it may deem
necessary or desirable for the related agreement and the rights and duties of
the parties to that agreement and the interests of the securityholders under
that agreement. In that event, the legal expenses and costs of that action and
any liability resulting from that action will be expenses, costs, and
liabilities of the trust and the master servicer or the depositor will be
entitled to be reimbursed for those expenses, costs and liabilities out of the
Collection Account, or the Certificate Account, if applicable.


                                       46
<PAGE>

                                CREDIT SUPPORT


GENERAL

     For any series, credit support may be provided for one or more classes of
that series or the related mortgage assets. Credit support may be in the form
of the following:

      o  a letter of credit;

      o  the subordination of one or more classes of the securities of that
         series;

      o  subordination created through overcollateralization;

      o  the establishment of one or more reserve funds;

      o  use of a pool insurance policy, bankruptcy bond, repurchase bond or
         special hazard insurance policy;

      o  financial guarantee insurance;

      o  the use of cross-support features; or

      o  another method of credit support described in the related prospectus
         supplement, or any combination of the foregoing, in any case, in the
         amounts and having the terms and conditions as are acceptable to each
         rating agency which assigns a rating to the securities of the related
         series.

Credit support may also be provided in the form of an insurance policy covering
the risk of collection and adequacy of any Additional Collateral provided in
connection with any Additional Collateral Loan, subject to the limitations
described in that insurance policy.

     In most cases, for a series, the credit support will not provide
protection against all risks of loss and will not guarantee repayment of the
entire principal balance of the securities and interest on those securities at
the security interest rate. If losses occur which exceed the amount covered by
credit support or which are not covered by credit support, those losses will be
borne by the securityholders. If credit support is provided for a series, the
related prospectus supplement will include a description of:

      o  the amount payable under that credit support,

      o  any conditions to payment under that credit support not otherwise
         described in this prospectus,

      o  the conditions under which the amount payable under that credit support
         may be reduced and under which that credit support may be terminated or
         replaced, and

      o  the material provisions of any agreement relating to that credit
         support.

Additionally, the related prospectus supplement will provide some information
on the issuer of any third-party credit support, including:

      o  a brief description of its principal business activities,

      o  its principal place of business, place of incorporation and the
         jurisdiction under which it is chartered or licensed to do business,

      o  if applicable, the identity of regulatory agencies which exercise
         primary jurisdiction over the conduct of its business, and

      o  its total assets, and its stockholders' or policyholders' surplus, if
         applicable, as of the date specified in the prospectus supplement.


SUBORDINATE SECURITIES; SUBORDINATION RESERVE FUND

     In some issuances, one or more classes of a series may be subordinate
securities. The rights of the subordinate securityholders to receive
distributions of principal and interest from the Certificate Account on any
distribution date may be subordinated to the rights of the senior
securityholders to the extent of


                                       47
<PAGE>

the then applicable Subordinated Amount as defined in the related prospectus
supplement. The Subordinated Amount will decrease whenever amounts otherwise
payable to the Subordinate securityholders are paid to the senior
securityholders, including amounts withdrawn from the Subordination Reserve
Fund, if any, and paid to the senior securityholders. The Subordinated Amount
will usually increase whenever there is distributed to the subordinate
securityholders amounts for which subordination payments have previously been
paid to the senior securityholders, which will occur when subordination
payments for delinquencies and some other deficiencies have been recovered.

     A series may include a class of subordinate securities entitled to receive
cash flows remaining after distributions made to all other classes. That right
will effectively be subordinate to the rights of other securityholders, but
will not be limited to the Subordinated Amount. The subordination of a class
may apply only in the event of some types of losses not covered by insurance
policies or other credit support, such as losses arising from damage to
property securing a loan not covered by standard hazard insurance policies,
losses resulting from the bankruptcy of a borrower and application of some
provisions of the federal bankruptcy code, 11 United States Code 101 et seq.,
and regulations promulgated under the federal bankruptcy code, or the
Bankruptcy Code, or losses resulting from the denial of insurance coverage due
to fraud or misrepresentation in connection with the origination of a loan.

     In some cases, for any series which includes one or more classes of
subordinate securities, a Subordination Reserve Fund may be established. The
Subordination Reserve Fund, if any, will be funded with cash, a letter of
credit, a demand note or Eligible Reserve Fund Investments, or by the retention
of amounts of principal or interest otherwise payable to holders of subordinate
securities, or both, as specified in the related prospectus supplement. In most
cases, the Subordination Reserve Fund will not be a part of the trust. If the
Subordination Reserve Fund is not a part of the trust, the trustee will have a
security interest in that Subordination Reserve Fund on behalf of the senior
securityholders. Moneys will be withdrawn from the Subordination Reserve Fund
to make distributions of principal of or interest on senior securities under
the circumstances described in the related prospectus supplement.

     Moneys deposited in any Subordination Reserve Fund will be invested in
Eligible Reserve Fund Investments. Any reinvestment income or other gain from
those investments will usually be credited to the Subordination Reserve Fund
for that series, and any loss resulting from those investments will be charged
to that Subordination Reserve Fund. Amounts in any Subordination Reserve Fund
in excess of the required reserve fund balance may be periodically released to
the subordinate securityholders under the conditions and to the extent
specified in the related prospectus supplement. Additional information
concerning any Subordination Reserve Fund will be described in the related
prospectus supplement, including the amount of any initial deposit to that
Subordination Reserve Fund, the required reserve fund balance to be maintained
in the Subordination Reserve Fund, the purposes for which funds in the
Subordination Reserve Fund may be applied to make distributions to senior
securityholders and the employment of reinvestment earnings on amounts in the
Subordination Reserve Fund, if any.


OVERCOLLATERALIZATION

     Subordination may be provided by one or more classes of senior securities
through overcollateralization; i.e., by having a greater amount of aggregate
principal balance of the mortgage assets for a series than the aggregate
principal balance of the securities of that series. That subordination may
exist on the closing date or may be effected through the allocation of interest
payments on the loans to reduce the principal balances of some classes of
securities.

     In a series with overcollateralization, the allocation of losses to the
securities is handled through the priority of payment process, first by
interest that otherwise would pay down principal on the securities, and then
those losses would be allocated to the senior securities only if the principal
balance of the mortgage loans was reduced to less than the principal balance of
the senior securities. The level of overcollateralization required under the
provisions of the related pooling and servicing agreement or indenture will be
subject to various tests based primarily on the loss and delinquency experience
of the related mortgage assets, and will be raised and lowered accordingly.


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<PAGE>

CROSS-SUPPORT FEATURES

     If the mortgage assets for a series are divided into separate asset
groups, the beneficial ownership of which is evidenced by a separate class or
classes of a series, credit support may be provided by a cross-support feature
which requires that distributions be made on senior securities evidencing the
beneficial ownership of one asset group prior to distributions on subordinate
securities evidencing the beneficial ownership interest in another asset group
within the trust. The related prospectus supplement for a series which includes
a cross-support feature will describe the manner and conditions for applying
that cross-support feature. As to any trust that includes a cross-support
feature, only assets of the trust will be used to provide cross-support, and
cross-support will be provided only to securities issued by the trust. A trust
will not provide a cross-support feature that benefits securities issued by any
other trust, and a trust will not receive cross-support from any other trust.


INSURANCE

     Credit support for a series may be provided by various forms of insurance
policies, subject to limits on the aggregate dollar amount of claims that will
be payable under each insurance policy, for all loans comprising or underlying
the mortgage assets for a series, or those loans that have specified
characteristics. Those insurance policies include primary mortgage insurance
and standard hazard insurance and may, if specified in the related prospectus
supplement, include:

      o  a pool insurance policy covering losses in amounts in excess of
         coverage of any primary insurance policy,

      o  a special hazard insurance policy covering risks not covered by
         standard hazard insurance policies,

      o  a bankruptcy bond covering a number of losses resulting from the
         bankruptcy of a borrower and application of various provisions of the
         Bankruptcy Code,

      o  a repurchase bond covering the repurchase of a loan for which mortgage
         insurance or hazard insurance coverage has been denied due to
         misrepresentations in connection with the organization of the related
         loan,

      o  or other insurance covering other risks associated with the particular
         type of loan. See "Description of Mortgage and Other Insurance."

Copies of the actual pool insurance policy, special hazard insurance policy,
bankruptcy bond or repurchase bond, if any, relating to the loans comprising
the mortgage assets for a series will be filed with the Commission as an
exhibit to a Current Report on Form 8-K to be filed within 15 days of issuance
of the securities of the related series.


LETTER OF CREDIT

     The letter of credit, if any, for a series of securities will be issued by
the letter of credit bank specified in the related prospectus supplement. Under
the letter of credit, the letter of credit bank will be obligated to honor
drawings under the letter of credit in an aggregate fixed dollar amount, net of
unreimbursed payments under that letter of credit, equal to the percentage
specified in the related prospectus supplement of the aggregate principal
balance of the loans on the related cut-off date or of one or more classes of
securities. The letter of credit may permit drawings in the event of losses not
covered by insurance policies or other credit support, such as losses arising
from damage not covered by standard hazard insurance policies, losses resulting
from the bankruptcy of a borrower and the application of various provisions of
the Bankruptcy Code, or losses resulting from denial of insurance coverage due
to misrepresentations in connection with the origination of a loan. The amount
available under the letter of credit will, in all cases, be reduced to the
extent of the unreimbursed payments under that letter of credit. The
obligations of the letter of credit bank under the letter of credit for each
series of securities will expire at the earlier of the date specified in the
related prospectus supplement or the termination of the trust. See "Description
of the Securities--Optional Termination" and "The Agreements--Termination." A


                                       49
<PAGE>

copy of the letter of credit for a series, if any, will be filed with the
Commission as an exhibit to a Current Report on Form 8-K to be filed within 15
days of issuance of the securities of the related series.


FINANCIAL GUARANTEE INSURANCE

     Financial guarantee insurance, if any, for a series of securities will be
provided by one or more insurance companies. That financial guarantee insurance
will guarantee, for one or more classes of securities of the related series,
timely distributions of interest and full distributions of principal on the
basis of a schedule of principal distributions described in or determined in
the manner specified in the related prospectus supplement. The financial
guarantee insurance may also guarantee against any payment made to a
securityholder which is subsequently recovered as a "voidable preference"
payment under the Bankruptcy Code. A copy of the financial guarantee insurance
for a series, if any, will be filed with the Commission as an exhibit to a
Current Report on Form 8-K to be filed with the Commission within 15 days of
issuance of the securities of the related series.


RESERVE FUNDS

     One or more reserve funds may be established for a series, in which cash,
a letter of credit, Eligible Reserve Fund Investments, a demand note or a
combination of the foregoing, in the amounts, if any, so specified in the
related prospectus supplement will be deposited. The reserve funds for a series
may also be funded over time by depositing in those reserve funds a specified
amount of the distributions received on the related mortgage assets as
specified in the related prospectus supplement.

     Amounts on deposit in any reserve fund for a series, together with the
reinvestment income on those deposits, will be applied by the trustee for the
purposes, in the manner, and to the extent specified in the related prospectus
supplement. A reserve fund may be provided to increase the likelihood of timely
payments of principal of and interest on the securities, if required as a
condition to the rating of that series by each rating agency rating that
series. Reserve funds may be established to provide limited protection, in an
amount satisfactory to each rating agency which assigns a rating to the
securities, against various types of losses not covered by insurance policies
or other credit support, such as losses arising from damage not covered by
standard hazard insurance policies, losses resulting from the bankruptcy of a
borrower and the application of various provisions of the Bankruptcy Code or
losses resulting from denial of insurance coverage due to fraud or
misrepresentation in connection with the origination of a loan. Following each
distribution date amounts in that reserve fund in excess of any required
reserve fund balance may be released from the reserve fund under the conditions
and to the extent specified in the related prospectus supplement and will not
be available for further application by the trustee.

     Moneys deposited in any reserve funds will be invested in Eligible Reserve
Fund Investments. Any reinvestment income or other gain from those investments
will usually be credited to the related reserve fund for that series, and any
loss resulting from those investments will be charged to that reserve fund.
However, that income may be payable to the master servicer or a servicer as
additional servicing compensation. See "Servicing of Loans" and "The
Agreements--Investment of Funds." In most cases, the reserve fund, if any, for
a series will not be a part of the trust.

     Additional information concerning any reserve fund will be provided in the
related prospectus supplement, including the initial balance of that reserve
fund, the required reserve fund balance to be maintained, the purposes for
which funds in the reserve fund may be applied to make distributions to
securityholders and use of investment earnings from the reserve fund, if any.


                  DESCRIPTION OF MORTGAGE AND OTHER INSURANCE

     The following descriptions of primary mortgage insurance policies, pool
insurance policies, special hazard insurance policies, standard hazard
insurance policies, bankruptcy bonds, repurchase bonds and other insurance and
the respective coverages under those insurances are general descriptions only
and do not purport to be complete.


                                       50
<PAGE>

MORTGAGE INSURANCE ON THE LOANS

     In most cases, all mortgage loans that are conventional loans secured by
single family property and which had initial LTV ratios of greater than 80%
will be covered by primary mortgage insurance policies providing coverage on
the amount of each of those mortgage loans in excess of 75% of the original
appraised value of the related mortgaged property and remaining in force until
the principal balance of that mortgage loan is reduced to 80% of that original
appraised value.

     In some cases, a pool insurance policy will be obtained to cover any loss,
subject to limitations described in this prospectus, occurring as a result of
default by the borrowers to the extent not covered by any primary mortgage
insurance policy, FHA insurance or VA guarantee. See "Pool Insurance Policy" in
this prospectus. Neither the primary mortgage insurance policies nor any pool
insurance policy will insure against losses sustained in the event of a
personal bankruptcy of the borrower under a mortgage loan. See "Legal Aspects
of Loans" in this prospectus. Those losses will be covered to the extent
described in the related prospectus supplement by the bankruptcy bond or other
credit support, if any.

     To the extent that the primary mortgage insurance policies do not cover
all losses on a defaulted or foreclosed mortgage loan, and to the extent those
losses are not covered by the pool insurance policy or other credit support for
that series, those losses, if any, would affect payments to securityholders. In
addition, the pool insurance policy and primary mortgage insurance policies do
not provide coverage against hazard losses. See "Hazard Insurance on the Loans"
in this prospectus. Other hazard risks will not be insured and the occurrence
of those hazards could adversely affect payments to the securityholders.

     Primary Mortgage Insurance. While the terms and conditions of the primary
mortgage insurance policies issued by one primary insurer will differ from
those in primary mortgage insurance policies issued by other primary insurers,
each primary mortgage insurance policy, in most cases, will pay either:

      o  the insured percentage of the loss on the related mortgaged property;

      o  the entire amount of that loss, after receipt by the primary insurer of
         good and merchantable title to, and possession of, the mortgaged
         property; or

      o  at the option of the primary insurer under various primary mortgage
         insurance policies, the sum of the delinquent monthly payments plus any
         advances made by the insured, both to the date of the claim payment
         and, after that date, monthly payments in the amount that would have
         become due under the mortgage loan if it had not been discharged plus
         any advances made by the insured until the earlier of the date the
         mortgage loan would have been discharged in full if the default had not
         occurred or an approved sale.

The amount of the loss as calculated under a primary mortgage insurance policy
covering a mortgage loan will in most cases consist of the unpaid principal
amount of that mortgage loan and accrued and unpaid interest on that mortgage
loan and reimbursement of various expenses, less:

      o  rents or other payments collected or received by the insured, other
         than the proceeds of hazard insurance, that are derived from the
         related mortgaged property,

      o  hazard insurance proceeds in excess of the amount required to restore
         that mortgaged property and which have not been applied to the payment
         of the mortgage loan,

      o  amounts expended but not approved by the primary insurer,

      o  claim payments previously made on that mortgage loan, and

      o  unpaid premiums and other amounts.

     As conditions precedent to the filing or payment of a claim under a
primary mortgage insurance policy, in the event of default by the mortgagor,
the insured will typically be required, among other things, to:

      o  advance or discharge hazard insurance premiums and, as necessary and
         approved in advance by the primary insurer, real estate taxes,
         protection and preservation expenses and foreclosure and related costs;


                                       51
<PAGE>

      o  in the event of any physical loss or damage to the mortgaged property,
         have the mortgaged property restored to at least its condition at the
         effective date of the primary mortgage insurance policy, ordinary wear
         and tear excepted; and

      o  tender to the primary insurer good and merchantable title to, and
         possession of, the mortgaged property.

     The pooling and servicing agreement or servicing agreement for a series,
in most cases, will require that the master servicer or servicer maintain, or
cause to be maintained, coverage under a primary mortgage insurance policy to
the extent this coverage was in place on the cut-off date. In the event that
the depositor gains knowledge that, as of the closing date, a mortgage loan had
a LTV Ratio at origination in excess of 80% and was not the subject of a
primary mortgage insurance policy, was not included in any exception to that
standard disclosed in the related prospectus supplement, and that the mortgage
loan has a then current LTV Ratio in excess of 80%, then the master servicer or
the servicer is required to use its reasonable efforts to obtain and maintain a
primary mortgage insurance policy to the extent that this kind of policy is
obtainable at a reasonable price.

     Any primary mortgage insurance or primary credit insurance policies
relating to loans secured by manufactured homes will be described in the
related prospectus supplement.

     FHA Insurance and VA Guarantees. The Housing Act authorizes various FHA
mortgage insurance programs. Some of the mortgage loans may be insured under
either Section 203(b), Section 234 or Section 235 of the Housing Act. Under
Section 203(b), FHA insures mortgage loans of up to 30 years' duration for the
purchase of one- to four-family dwelling units. Mortgage loans for the purchase
of condominium units are insured by FHA under Section 234. Loans insured under
these programs must bear interest at a rate not exceeding the maximum rate in
effect at the time the loan is made, as established by HUD, and may not exceed
specified percentages of the lesser of the appraised value of the property and
the sales price, less seller paid closing costs for the property, up to
specified maximums. In addition, FHA imposes initial investment minimums and
other requirements on mortgage loans insured under the Section 203(b) and
Section 234 programs.

     Under Section 235, assistance payments are paid by HUD to the mortgagee on
behalf of eligible mortgagors for as long as the mortgagors continue to be
eligible for the payments. To be eligible, a mortgagor must be part of a
family, have income within the limits prescribed by HUD at the time of initial
occupancy, occupy the property and meet requirements for recertification at
least annually.

     The regulations governing these programs provide that insurance benefits
are payable either on foreclosure, or other acquisition of possession, and
conveyance of the mortgaged premises to HUD or on assignment of the defaulted
mortgage loan to HUD. The FHA insurance that may be provided under these
programs on the conveyance of the home to HUD is equal to 100% of the
outstanding principal balance of the mortgage loan, plus accrued interest, and
additional costs and expenses. When entitlement to insurance benefits results
from assignment of the mortgage loan to HUD, the insurance payment is computed
as of the date of the assignment and includes the unpaid principal amount of
the mortgage loan plus mortgage interest accrued and unpaid to the assignment
date.

     When entitlement to insurance benefits results from foreclosure, or other
acquisition of possession, and conveyance, the insurance payment is equal to
the unpaid principal amount of the mortgage loan, adjusted to reimburse the
mortgagee for tax, insurance and similar payments made by it and to deduct
amounts received or retained by the mortgagee after default, plus reimbursement
not to exceed two-thirds of the mortgagee's foreclosure costs. Any FHA
insurance relating to loans underlying a series of securities will be described
in the related prospectus supplement.

     The Servicemen's Readjustment Act of 1944, as amended, permits a veteran,
or in some instances, his or her spouse, to obtain a mortgage loan guaranty by
the VA covering mortgage financing of the purchase of a one-to four-family
dwelling unit to be occupied as the veteran's home at an interest rate not
exceeding the maximum rate in effect at the time the loan is made, as
established by HUD. The program has no limit on the amount of a mortgage loan,
requires no down payment from the purchaser and permits the guaranty of
mortgage loans with terms, limited by the estimated economic life of the
property, up to 30


                                       52
<PAGE>

years. The maximum guaranty that may be issued by the VA under this program is
50% of the original principal amount of the mortgage loan up to a dollar limit
established by the VA. The liability on the guaranty is reduced or increased on
a pro rata basis with any reduction or increase in the amount of indebtedness,
but in no event will the amount payable on the guaranty exceed the amount of
the original guaranty. In spite of the dollar and percentage limitations of the
guaranty, a mortgagee will ordinarily suffer a monetary loss only when the
difference between the unsatisfied indebtedness and the proceeds of a
foreclosure sale of mortgaged premises is greater than the original guaranty as
adjusted. The VA may, at its option, and without regard to the guaranty, make
full payment to a mortgagee of the unsatisfied indebtedness on a mortgage on
its assignment to the VA.

     Since there is no limit imposed by the VA on the principal amount of a
VA-guaranteed mortgage loan but there is a limit on the amount of the VA
guaranty, additional coverage under a primary mortgage insurance policy may be
required by the depositor for VA loans in excess of specified amounts. The
amount of that additional coverage will be specified in the related prospectus
supplement. Any VA guaranty relating to loans underlying a series of securities
will be described in the related prospectus supplement.

     Pool Insurance Policy. The master servicer may be required to maintain the
pool insurance policy and to present or cause the servicers, if any, to present
claims under that policy on behalf of the trustee and the securityholders. See
"Servicing of Loans -- Maintenance of Insurance Policies and Other Servicing
Procedures." Although the terms and conditions of pool insurance policies vary
to some degree, the following describes material aspects of those policies. The
related prospectus supplement will describe any provisions of a pool insurance
policy which are materially different from those described in this prospectus.

     The responsibilities of the master servicer, the amount of claim for
benefits, the conditions precedent to the filing or payment of a claim, the
policy provisions and the payment of claims under a pool insurance policy are
similar to those described above for primary mortgage insurance policies,
subject to the aggregate limit on the amount of coverage. It may also be a
condition precedent to the payment of any claim under the pool insurance policy
that the insured maintain a primary mortgage insurance policy that is
acceptable to the pool insurer on all mortgage loans in the related trust that
have LTV ratios at the time of origination in excess of 80% and that a claim
under that primary mortgage insurance policy has been submitted and settled.
FHA insurance and VA guarantees will be deemed to be acceptable primary
insurance policies under the pool insurance policy. Assuming satisfaction of
these conditions, the pool insurer will pay to the insured the amount of the
loss which, in most cases, will be:

      o  the amount of the unpaid principal balance of the defaulted mortgage
         loan immediately prior to the sale of the mortgaged property,

      o  the amount of the accumulated unpaid interest on that mortgage loan to
         the date of claim settlement at the contractual rate of interest, and

      o  advances made by the insured as described above less a number of
         specified payments.

     An approved sale is:

      o  a sale of the mortgaged property acquired by the insured because of a
         default by the borrower to which the pool insurer has given prior
         approval,

      o  a foreclosure or trustee's sale of the mortgaged property at a price
         exceeding the maximum amount specified by the pool insurer,

      o  the acquisition of the mortgaged property under the primary mortgage
         insurance policy by the mortgage insurer, or

      o  the acquisition of the mortgaged property by the pool insurer.

     As a condition precedent to the payment of any loss, the insured must
provide the pool insurer with good and merchantable title to the mortgaged
property. If any mortgaged property securing a defaulted mortgage loan is
damaged and the proceeds, if any, from the related standard hazard insurance
policy or


                                       53
<PAGE>

the applicable special hazard insurance policy, if any, are insufficient to
restore the damaged mortgaged property to a condition sufficient to permit
recovery under the pool insurance policy, the master servicer will not be
required to expend its own funds to restore the damaged property unless it
determines that the restoration will increase the proceeds to the
securityholders on liquidation of the mortgage loan after reimbursement of the
master servicer for its expenses, and that these expenses will be recoverable
by it through liquidation proceeds or insurance proceeds.

     The original amount of coverage under the pool insurance policy will be
reduced over the life of the securities by the aggregate net dollar amount of
claims paid less the aggregate net dollar amount realized by the pool insurer
on disposition of all foreclosed mortgaged properties covered by that policy.
The amount of claims paid includes expenses incurred by the master servicer as
well as accrued interest at the applicable interest rate on delinquent mortgage
loans to the date of payment of the claim. See "Legal Aspects of Loans" in this
prospectus. Accordingly, if aggregate net claims paid under a pool insurance
policy reach the original policy limit, coverage under the pool insurance
policy will lapse and any further losses will be borne by the trust, and thus
will affect adversely payments on the securities. In addition, the exhaustion
of coverage under any pool insurance policy may affect the master servicer's or
servicer's willingness or obligation to make Advances. If the master servicer
or a servicer determines that an Advance relating to a delinquent loan would
not be recoverable from the proceeds of the liquidation of that loan or
otherwise, it will not be obligated to make an advance for that delinquency
since the Advance would not be ultimately recoverable by it. See "Servicing of
Loans--Advances."

     Mortgage Insurance for Manufactured Home Loans. A manufactured home loan
may be an FHA loan or a VA loan. Any primary mortgage or similar insurance and
any pool insurance policy relating to manufactured home loans will be described
in the related prospectus supplement.


HAZARD INSURANCE ON THE LOANS

     Standard Hazard Insurance Policies for Mortgage Loans. The terms of the
mortgage loans require each mortgagor to maintain a hazard insurance policy
covering the related mortgaged property and providing for coverage at least
equal to that of the standard form of fire insurance policy with extended
coverage customary in the state in which the property is located. That
coverage, in most case, will be in an amount equal to the lesser of the
principal balance of that mortgage loan or 100% of the insurable value of the
improvements securing the mortgage loan. The pooling and servicing agreement or
servicing agreement will provide that the master servicer or servicer shall
cause those hazard policies to be maintained or shall obtain a blanket policy
insuring against losses on the mortgage loans. The ability of the master
servicer or servicer to ensure that hazard insurance proceeds are appropriately
applied may be dependent on its being named as an additional insured under any
hazard insurance policy and under any flood insurance policy referred to in the
next paragraph and under "Special Hazard Insurance Policy" and "Other
Hazard-Related Insurance; Liability Insurance," or on the extent to which
information in this regard is furnished to the master servicer or the servicer
by mortgagors.

     In most cases, the standard form of fire and extended coverage policy
covers physical damage to or destruction of the improvements on the property by
fire, lightning, explosion, smoke, windstorm, hail, riot, strike and civil
commotion, subject to the conditions and exclusions specified in each policy.
The policies relating to the mortgage loans will be underwritten by different
insurers under different state laws in accordance with different applicable
state forms and therefore will not contain identical terms and conditions, the
basic terms of those terms and conditions are dictated by respective state
laws. Those policies typically do not cover any physical damage resulting from
the following: war, revolution, governmental actions, floods and other
water-related causes, earth movement including earthquakes, landslides and
mudflows, nuclear reactions, wet or dry rot, vermin, rodents, insects or
domestic animals, theft and, in other cases, vandalism. The foregoing list is
merely indicative of some kinds of uninsured risks and is not intended to be
all-inclusive. Where the improvements securing a mortgage loan are located in a
federally designated flood area at the time of origination of that mortgage
loan, the pooling and servicing agreement or servicing agreement, in most
cases, requires the master servicer or servicer to cause to be maintained for
that mortgage loan serviced, flood insurance as described under "Servicing of
Loans--Maintenance of Insurance Policies and Other Servicing Procedures."


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<PAGE>

     Standard Hazard Insurance Policies for Manufactured Home Loans. The terms
of the pooling and servicing agreement or servicing agreement will require the
servicer or the master servicer, as applicable, to cause to be maintained for
each manufactured home loan one or more standard hazard insurance policies
which provide, at a minimum, the same coverage as a standard form fire and
extended coverage insurance policy that is customary for manufactured housing,
issued by a company authorized to issue those policies in the state in which
the manufactured home is located, and in an amount which is not less than the
maximum insurable value of that manufactured home or the principal balance due
from the mortgagor on the related manufactured home loan, whichever is less.
That coverage may be provided by one or more blanket insurance policies
covering losses on the manufactured home loans resulting from the absence or
insufficiency of individual standard hazard insurance policies. If a
manufactured home's location was, at the time of origination of the related
manufactured home loan, within a federally designated flood area, the servicer
or the master servicer also will be required to maintain flood insurance.

     If the servicer or the master servicer repossesses a manufactured home on
behalf of the trustee, the servicer or the master servicer will either maintain
at its expense hazard insurance for that manufactured home or indemnify the
trustee against any damage to that manufactured home prior to resale or other
disposition.

     Special Hazard Insurance Policy. Although the terms of those policies vary
to some degree, a special hazard insurance policy typically provides that,
where there has been damage to property securing a defaulted or foreclosed
loan, title to which has been acquired by the insured, and to the extent that
damage is not covered by the standard hazard insurance policy or any flood
insurance policy, if applicable, required to be maintained for that property,
or in connection with partial loss resulting from the application of the
coinsurance clause in a standard hazard insurance policy, the special hazard
insurer will pay. The amount of this payment is the lesser of (a) the cost of
repair or replacement of that property or (b) on transfer of the property to
the special hazard insurer, the unpaid principal balance of that loan at the
time of acquisition of that property by foreclosure or deed in lieu of
foreclosure, plus accrued interest to the date of claim settlement and expenses
incurred by the master servicer or the servicer for that property. If the
unpaid principal balance plus accrued interest and various expenses is paid by
the special hazard insurer, the amount of further coverage under the special
hazard insurance policy will be reduced by that amount less any net proceeds
from the sale of the property. Any amount paid as the cost of repair of the
property will reduce coverage by that amount. Special hazard insurance policies
typically do not cover losses occasioned by war, civil insurrection, various
governmental actions, errors in design, faulty workmanship or materials, except
under specific circumstances, nuclear reaction, flood if the mortgaged property
is in a federally designated flood area, chemical contamination and other
risks.

     Restoration of the property with the proceeds described under (a) in the
preceding paragraph is expected to satisfy the condition under the pool
insurance policy that the property be restored before a claim that the pool
insurance policy may be validly presented for the defaulted loan secured by
that property. The payment described under (b) in the preceding paragraph will
render unnecessary presentation of a claim relating to that loan under the pool
insurance policy. Therefore, so long as the pool insurance policy remains in
effect, the payment by the special hazard insurer of the cost of repair or of
the unpaid principal balance of the related loan plus accrued interest and
expenses will not affect the total insurance proceeds paid to holders of the
securities, but will affect the relative amounts of coverage remaining under
the special hazard insurance policy and pool insurance policy.


BANKRUPTCY BOND

     In the event of a bankruptcy of a borrower, the bankruptcy court may
establish the value of the property securing the related loan, and, if
specified in the related prospectus supplement, any related Additional
Collateral, at an amount less than the then outstanding principal balance of
that loan. The amount of the secured debt could be reduced to that value, and
the holder of that loan thus would become an unsecured creditor to the extent
the outstanding principal balance of that loan exceeds the value so assigned to
the property, and any related Additional Collateral, by the bankruptcy court.
In addition, other modifications of the terms of a loan can result from a
bankruptcy proceeding. See "Legal Aspects of Loans" in this prospectus. If so
provided in the related prospectus supplement, the master servicer will


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<PAGE>

obtain a bankruptcy bond or similar insurance contract for proceedings relating
to borrowers under the Bankruptcy Code. The bankruptcy bond will cover some
losses resulting from a reduction by a bankruptcy court of scheduled payments
of principal of and interest on a loan or a reduction by that court of the
principal amount of a loan and will cover some unpaid interest on the amount of
that principal reduction from the date of the filing of a bankruptcy petition.

     The bankruptcy bond will provide coverage in the aggregate amount
specified in the related prospectus supplement for all loans in the trust
secured by single unit primary residences. In most cases, that amount will be
reduced by payments made under that bankruptcy bond relating to those loans.


REPURCHASE BOND

     The seller, the depositor or the master servicer may be obligated to
repurchase any loan, up to an aggregate dollar amount specified in the related
prospectus supplement, for which insurance coverage is denied due to
dishonesty, misrepresentation or fraud in connection with the origination or
sale of that loan. That obligation may be secured by a surety bond guaranteeing
payment of the amount to be paid by the seller, the depositor or the master
servicer.


                                THE AGREEMENTS

     The following summaries describe specific provisions of the agreements.
The summaries do not purport to be complete and are subject to, and qualified
in their entirety by reference to, the provisions of the related agreements.
Where particular provisions or terms used in the related agreements are
referred to, those provisions or terms are as specified in the related
agreements.


ASSIGNMENT OF MORTGAGE ASSETS

     General. The depositor will transfer, convey and assign to the trustee all
right, title and interest of the depositor in the mortgage assets and other
property to be included in the trust for a series. That assignment will include
all principal and interest due on or for the mortgage assets after the cut-off
date specified in the related prospectus supplement, except for any Retained
Interests. The trustee will, concurrently with that assignment, execute and
deliver the securities.

     Assignment of Private Mortgage-Backed Securities. The depositor will cause
private mortgage-backed securities to be registered in the name of the trustee,
or its nominee or correspondent. The trustee, or its agent or correspondent,
will have possession of any certificated private mortgage-backed securities. In
most cases, the trustee will not be in possession of or be assignee of record
of any underlying assets for a private mortgage-backed security. See "The Trust
Funds--Private Mortgage-Backed Securities" in this prospectus. Each private
mortgage-backed security will be identified in the mortgage certificate
schedule appearing as an exhibit to the related agreement, which will specify
the original principal amount, outstanding principal balance as of the cut-off
date, annual pass-through rate or interest rate and maturity date for each
private mortgage-backed security conveyed to the trustee. In the related
agreement, the depositor will represent and warrant to the trustee regarding
the private mortgage-backed securities:

      o  that the information contained in the mortgage certificate schedule is
         true and correct in all material respects;

      o  that, immediately prior to the conveyance of the private
         mortgage-backed securities, the depositor had good title thereto, and
         was the sole owner of those private mortgage-backed securities, subject
         to any Retained Interests;

      o  that there has been no other sale by it of that private mortgage-backed
         securities; and

      o  that there is no existing lien, charge, security interest or other
         encumbrance, other than any Retained Interest, on those private
         mortgage-backed securities.

     Assignment of Agency Securities. The depositor will transfer, convey and
assign to the trustee, or its nominee or correspondent, all right, title and
interest of the depositor in the Agency Securities and other property to be
included in the trust for a series. That assignment will include all principal
and interest due


                                       56
<PAGE>

on or for the Agency Securities after the cut-off date specified in the related
prospectus supplement, except for any Retained Interest. The depositor will
cause the Agency Securities to be registered in the name of the trustee, or its
nominee or correspondent, and the trustee will concurrently authenticate and
deliver the securities. Each Agency Security will be identified in a schedule
appearing as an exhibit to the related agreement, which will specify as to each
Agency Security the original principal amount and outstanding principal balance
as of the cut-off date and the annual pass-through rate or interest rate for
each Agency Security conveyed to the trustee.

     Assignment of Mortgage Loans. In addition, the depositor will deliver or
cause to be delivered to the trustee, or, as specified in the related
prospectus supplement, the custodian:

    o  the mortgage note for each mortgage loan endorsed without recourse to
      the order of the trustee or in blank;

    o  the original mortgage with evidence of recording indicated on that
      mortgage note, except for any mortgage not returned from the public
      recording office, in which case a copy of that mortgage will be
      delivered, together with a certificate that the original of that mortgage
      was delivered to the recording office; and

    o  an assignment of the mortgage in recordable form and, if applicable,
      any riders or modifications to the mortgage note and mortgage, together
      with other documents as described in the related agreement.

The trustee, or, in some cases, the custodian, will hold those documents in
trust for the benefit of the securityholders.

     In most cases, the depositor will, at the time of delivery of the
securities, cause assignments to the trustee of the mortgage loans to be
recorded in the appropriate public office for real property records, except in
states where, in the opinion of counsel acceptable to the trustee, that
recording is not required to protect the trustee's interest in the mortgage
loan. As promptly as possible, the depositor will cause that assignments to be
so recorded, in which event, the related agreement may require the depositor to
repurchase from the trustee any mortgage loan required to be recorded but not
recorded within that time, at the price described above for repurchase by
reason of defective documentation. In most cases, the enforcement of the
repurchase obligation would constitute the sole remedy available to the
securityholders or the trustee for the failure of a mortgage loan to be
recorded.

     For any mortgage loans which are Cooperative Loans, the depositor will
cause to be delivered to the trustee, its agent, or a custodian:

      o  the related original cooperative note endorsed to the order of the
         trustee,

      o  the original security agreement, the proprietary lease or occupancy
         agreement,

      o  the recognition agreement,

      o  an executed financing agreement,

      o  and the relevant stock certificate and related blank stock powers.

The depositor will file in the appropriate office an assignment and a financing
statement evidencing the trustee's security interest in each Cooperative Loan.

     Each mortgage loan will be identified in the mortgage loan schedule
appearing as an exhibit to the related agreement. That mortgage loan schedule
will specify, among other things, for each mortgage loan:

      o  the original principal amount and unpaid principal balance as of the
         cut-off date;

      o  the current interest rate;

      o  the current scheduled payment of principal and interest; the maturity
         date of the related mortgage note;

      o  if the mortgage loan is an ARM loan, the minimum mortgage rate, the
         maximum mortgage rate, if any, and the Periodic Rate Cap; and


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<PAGE>

      o  whether the mortgage loan is an Additional Collateral Loan, a Balloon
         Loan, a Cooperative Loan, a GPM Loan, a GEM Loan, a Buy-Down Loan or a
         mortgage loan with other than fixed scheduled payments and level
         amortization.

     Assignment of Manufactured Home Loans. The depositor will cause any
manufactured home loans included in the mortgage assets for a series of
securities to be assigned to the trustee, together with principal and interest
due on or for the manufactured home loans after the cut-off date specified in
the related prospectus supplement. Each manufactured home loan will be
identified in the loan schedule appearing as an exhibit to the related
agreement. That loan schedule will specify, for each manufactured home loan,
among other things:

      o  the original principal balance and the outstanding principal balance as
         of the close of business on the cut-off date;

      o  the interest rate;

      o  the current scheduled payment of principal and interest; and

      o  the maturity date of the manufactured home loan.

     In addition, for each manufactured home loan, the depositor will deliver
or cause to be delivered to the trustee, or, as specified in the related
prospectus supplement, the custodian, the original manufactured home loan and
copies of documents and instruments related to each manufactured home loan and
the security interest in the manufactured home securing each manufactured home
loan. To give notice of the right, title and interest of the securityholders to
the manufactured home loans, the depositor will cause a UCC-1 financing
statement to be filed identifying the trustee as the secured party and
identifying all manufactured home loans as collateral. In most cases, the
manufactured home loans will not be stamped or otherwise marked to reflect
their assignment from the depositor to the trustee. Therefore, if a subsequent
purchaser were able to take physical possession of the manufactured home loans
without notice of that assignment, the interest of the securityholders in the
manufactured home loans could be defeated. See "Legal Aspects of
Loans--Manufactured Home Loans."

     The seller, or other party as described in the related prospectus
supplement, will provide limited representations and warranties to the
depositor and the trustee concerning the manufactured home loans. Those
representations and warranties will include:

      o  that the information contained in the loan schedule provides an
         accurate listing of the manufactured home loans and that the
         information about those manufactured home loans listed in that loan
         schedule is true and correct in all material respects at the date or
         dates when that information is furnished;

      o  that, immediately prior to the conveyance of the manufactured home
         loans, the depositor had good title to, and was sole owner of, those
         manufactured home loans, subject to any Retained Interests;

      o  that there has been no other sale by it of those manufactured home
         loans and that the manufactured home loan is not subject to any lien,
         charge, security interest or other encumbrance;

      o  if the master servicer will not directly service the manufactured home
         loans, each subservicing agreement entered into with a servicer for
         manufactured home loans comprising the mortgage assets has been
         assigned and conveyed to the trustee and is not subject to any offset,
         counterclaim, encumbrance or other charge; and

      o  the depositor has obtained from each of the master servicer, the
         servicer, the originator of the manufactured home loans or other entity
         that is the seller of the related manufactured home loan
         representations and warranties relating to some information about the
         origination of and current status of the manufactured home loans, and
         has no knowledge of any fact which would cause it to believe that those
         representations and warranties are inaccurate in any material respect.
         See "Loan Underwriting Procedures and Standards" in this prospectus.


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<PAGE>

     Assignment of Participation Securities. The depositor will cause any
securities which evidence a participation interest in a loan, obtained under a
participation agreement to be assigned to the trustee by delivering to the
trustee the participation security, which will be reregistered in the name of
the trustee. In most cases, the trustee will not be in possession of or be
assignee of record for the loans represented by the participation security.
Each participation security will be identified in a participation security
schedule which will specify the original principal balance, outstanding
principal balance as of the cut-off date, pass-through rate and maturity date
for each participation security. In the related agreement, the depositor will
represent and warrant to the trustee regarding the participation security:

      o  that the information contained in the participation security schedule
         is true and correct in all material respects;

      o  that, immediately prior to the conveyance of the participation
         securities, the depositor had good title to and was sole owner of the
         participation security;

      o  that there has been no other sale by it of the participation security;
         and

      o  that the participation security is not subject to any existing lien,
         charge, security interest or other encumbrance, other than any Retained
         Interests.


REPURCHASE AND SUBSTITUTION OF LOANS

     In most cases, if any document in the loan file delivered by the depositor
to the trustee, or custodian on behalf of the trustee, is found by the trustee
within 90 days of the execution of the related agreement, or promptly after the
trustee's receipt of any document permitted to be delivered after the closing
date, to be defective in any material respect and the related servicer or
seller does not cure that defect within 60 days from the date the master
servicer was notified of the defect by the trustee, or within another period
specified in the related prospectus supplement, the related servicer or seller
if, and to the extent it is obligated to do so under the related servicing
agreement or mortgage loan sale agreement will, not later than 90 days or
within another period specified in the related prospectus supplement, from the
date the seller or the master servicer was notified of the defect by the
depositor, the master servicer or the trustee, repurchase the related mortgage
loan or any property acquired relating to that repurchase from the trustee. The
price to repurchase the related mortgage loan or property is equal to the
outstanding principal balance of that mortgage loan, or, in the case of a
foreclosed mortgage loan, the outstanding principal balance of that mortgage
loan immediately prior to foreclosure, plus accrued and unpaid interest to the
date of the next scheduled payment on that mortgage loan at the related
mortgage rate.

     In most cases, the master servicer may, rather than repurchase the loan as
described above, remove the loan from the trust and substitute in its place one
or more other loans provided, however, that:

      o  for a trust for which no REMIC election is made, that substitution must
         be effected within 120 days of the date of initial issuance of the
         securities, and

      o  for a trust for which a REMIC election or elections are made, the
         trustee must have received a satisfactory opinion of counsel that the
         substitution will not result in a prohibited transactions tax under the
         Internal Revenue Code or cause the trust to lose its status as a REMIC,
         or in the case of a trust consisting of two or more REMICs, that the
         substitution will not cause that REMIC to lose its status as a REMIC.

     In most cases, any qualified substitute mortgage loan will have on the
date of substitution:

      o  an outstanding principal balance, after deduction of all scheduled
         payments due in the month of substitution, not in excess of the
         outstanding principal balance of the deleted loan, the amount of any
         shortfall to be deposited to the Certificate Account in the month of
         substitution for distribution to securityholders;

      o  an interest rate not lower than and not more than 1% of the interest
         rate of the deleted loan;

      o  have a LTV Ratio at the time of substitution no higher than that of the
         deleted loan at the time of substitution;


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<PAGE>

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

      o  comply with all of the representations and warranties specified in the
         related agreement as of the date of substitution. The related agreement
         may include additional requirements relating to ARM loans or other
         specific types of mortgage loans, or additional provisions relating to
         meeting the foregoing requirements on an aggregate basis where a number
         of substitutions occur contemporaneously.

     In most cases, the above-described cure, repurchase or substitution
obligations constitute the sole remedies available to the securityholders or
the trustee for a material defect in a loan document.

     In most cases, the seller, or other party as described in the related
prospectus supplement, will make representations and warranties about loans
which comprise the mortgage assets for a series. See "Loan Underwriting
Procedures and Standards--Representations and Warranties" in this prospectus.
If the related seller, or other party, cannot cure a breach of those
representations and warranties in all material respects within 60 days after
notification by the master servicer, the depositor or the trustee of that
breach, and if the breach is of a nature that materially and adversely affects
interest of the securityholders in that loan, the seller is obligated to cure,
substitute or repurchase the affected mortgage loan if those seller is required
to do so under the applicable agreement.


REPORTS TO SECURITYHOLDERS

     The master servicer will prepare and will forward or will provide to the
trustee for forwarding to each securityholder on each distribution date, or as
soon after that distribution date as is practicable, a statement providing, to
the extent applicable to any series as specified in the related agreement,
among other things:

      o  as applicable, either (A) the amount of the distribution allocable to
         principal on the mortgage assets, separately identifying the aggregate
         amount of any principal prepayments included in that distribution and
         the amount, if any, advanced by the master servicer or by a servicer or
         (B) the amount of the principal distribution in reduction of stated
         principal amount of each class and the aggregate unpaid principal
         amount of each class following that distribution;

      o  as applicable, either (A) the amount of the distribution allocable to
         interest on the mortgage assets and the amount, if any, advanced by the
         master servicer or a servicer or (B) the amount of the interest
         distribution;

      o  the amount of servicing compensation for the mortgage assets paid
         during the Due Period commencing on the due date to which that
         distribution relates and the amount of servicing compensation during
         that period attributable to penalties and fees;

      o  for accrual securities, prior to the Accrual Termination Date in
         addition to the information specified in (B) of the first clause above
         of this paragraph, the amount of interest accrued on those securities
         during the related Interest Accrual Period and added to the principal
         balance of those securities;

      o  in the case of floating rate securities, the floating rate applicable
         to the distribution being made;

      o  if applicable, the number and aggregate principal balances of loans (A)
         delinquent for 31 to 60 days, (B) delinquent for 61 days to 90 days and
         (C) delinquent 91 days or more, as of the close of business on the
         determination date to which that distribution relates;

      o  if applicable, the book value of any REO Property acquired on behalf of
         securityholders through foreclosure, grant of a deed in lieu of
         foreclosure or repossession as of the close of business on the last
         business day of the calendar month preceding the distribution date to
         which that distribution relates;

      o  if applicable, the amount of coverage under any pool insurance policy
         as of the close of business on the applicable distribution date;


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<PAGE>

      o  if applicable, the amount of coverage under any special hazard
         insurance policy as of the close of business on the applicable
         distribution date;

      o  if applicable, the amount of coverage under any bankruptcy bond as of
         the close of business on the applicable distribution date;

      o  in the case of any other credit support described in the related
         prospectus supplement, the amount of coverage of that credit support as
         of the close of business on the applicable distribution date;

      o  in the case of any series which includes a subordinate class, the
         Subordinated Amount, if any, determined as of the related determination
         date and if the distribution to the senior securityholders is less than
         their required distribution, the amount of the shortfall;

      o  the amount of any withdrawal from any applicable reserve fund included
         in amounts actually distributed to securityholders and the remaining
         balance of each reserve fund including any Subordination Reserve Fund,
         if any, on that distribution date, after giving effect to distributions
         made on that date; and

      o  any other information as specified in the related agreement.

     In addition, within a reasonable period of time after the end of each
calendar year the master servicer, in most cases, will furnish to each
securityholder of record at any time during that calendar year a report
summarizing the items provided to securityholders as specified in the related
agreement to enable securityholders to prepare their tax returns including,
without limitation, the amount of original issue discount accrued on the
securities, if applicable. Information in the distribution date and annual
reports provided to the securityholders will not have been examined and
reported on by an independent public accountant. However, the master servicer
will provide to the trustee a report by independent public accountants
concerning the master servicer's servicing of the loans. See "Servicing of
Loans--Evidence as to Compliance" in this prospectus.

INVESTMENT OF FUNDS

     The Certificate Account, Collection Account or Custodial Account, if any,
and any other funds and accounts for a series that may be invested by the
trustee or by the master servicer or by the servicer, if any, can be invested
only in eligible investments acceptable to each rating agency rating that
series, which may include, without limitation:

      o  direct obligations of, or obligations fully guaranteed as to principal
         and interest by, the United States or any agency or instrumentality of
         the United States, provided that those obligations are backed by the
         full faith and credit of the United States;

      o  commercial paper, having original maturities of not more than nine
         months, of any corporation incorporated under the laws of the United
         States or any state of the United States or the District of Columbia
         which on the date of acquisition has been rated by each rating agency
         in its highest short-term rating, or the lower category as will not
         result in the downgrading or withdrawal of the ratings then assigned to
         the securities by each rating agency;

      o  certificates of deposit, demand or time deposits, federal funds or
         bankers' acceptances issued by any bank or trust company incorporated
         under the laws of the United States or of any state of the United
         States or the District of Columbia. The short-term commercial paper of
         that bank or trust company, or in the case of the principal depository
         institution in a depository institution holding company, the long-term
         unsecured debt obligations of that holding company, at the date of
         acquisition must have been rated by each rating agency in its highest
         short-term rating;

      o  money market funds or mutual funds organized under the Investment
         Company Act of 1940 rated in the highest rating category by each rating
         agency;

      o  repurchase obligation, the collateral of which is held by a third party
         or the trustee, for any security described in the first clause above of
         this paragraph provided that the long-term unsecured obligations of the
         party agreeing to repurchase those obligations are at the time rated by
         each rating agency in one of its two highest long-term rating
         categories; and


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<PAGE>

      o  those other investments which do not adversely affect the rating on the
         securities of that series as confirmed in writing by each rating
         agency.

     Funds held in a reserve fund or Subordinated Reserve Fund may be invested
in eligible reserve fund investments which may include eligible investments,
mortgage loans, mortgage pass-through or participation securities,
mortgage-backed bonds or notes or other investments to the extent specified in
the related prospectus supplement.

     Eligible investments or eligible reserve fund investments for a series
will include only obligations or securities that mature on or before the date
on which the amounts in the Collection Account are required to be remitted to
the trustee and amounts in the Certificate Account, any reserve fund or the
Subordinated Reserve Fund for that series are required or may be anticipated to
be required to be applied for the benefit of securityholders of that series.

     Unless provided in the related prospectus supplement, the reinvestment
income from the Subordination Reserve Fund, other reserve fund, Servicer
Account, Collection Account or the Certificate Account will be property of the
trustee, the master servicer or a servicer and not available for distributions
to securityholders. See "Servicing of Loans" in this prospectus.


EVENT OF DEFAULT AND RIGHTS IN THE CASE OF EVENTS OF DEFAULT

     Pooling and Servicing Agreement and Servicing Agreement. Events of default
under the pooling and servicing agreement or servicing agreement for each
series of certificates or notes, respectively, in most cases, include:

      o  any failure by the master servicer to remit to the trustee for
         distribution to the securityholders, or distribution to holders of the
         equity certificates for a series of notes, of that series any required
         payment which continues unremedied for five business days, or one
         business day for other required payments, after the giving of written
         notice of that failure, requiring the same to be remedied, to the
         master servicer by the trustee or the depositor for each series of
         certificates or by the trustee or the issuer for each series of notes,
         or to the master servicer, the depositor and the trustee for each
         series of certificates or to the master servicer, the issuer and the
         trustee for each series of notes by the related holders of securities
         of that series evidencing at least 25% of Voting Rights of the
         securities for the series;

      o  any failure by the master servicer duly to observe or perform in any
         material respect any other of its covenants or agreements in the
         related pooling and servicing agreement or servicing agreement which
         continues unremedied for 30 days after the giving of written notice of
         that failure:

         o  to the master servicer by the trustee or the depositor for each
            series of certificates or by the trustee or the issuer for each
            series of notes,

         o  to the master servicer, the depositor and the trustee for each
            series of certificates, or

         o  to the master servicer, the issuer and the trustee for each series
            of notes by the holders of securities of that series evidencing at
            least 25% of the Voting Rights of the securities; and

      o  events of insolvency, readjustment of debt, marshaling of assets and
         liabilities or similar proceedings and actions by the master servicer
         indicating its insolvency, reorganization or inability to pay its
         obligations.

     In most cases, so long as an event of default remains unremedied under the
pooling and servicing agreement or servicing agreement for a series, the
trustee for that series or holders of the related securities evidencing at
least 51% of the aggregate outstanding principal amount of the securities for
that series, the first 51% who provide that notice, or the depositor may
terminate all of the rights and obligations of the master servicer as servicer
under the pooling and servicing agreement or servicing agreement and in and to
the mortgage loans, other than its right as a securityholder or as holder of
the equity certificates for a series of notes under the pooling and servicing
agreement or servicing agreement, as applicable, which rights the master
servicer will retain under all circumstances. The trustee will then succeed to
all the


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<PAGE>

responsibilities, duties and liabilities of the master servicer under the
pooling and servicing agreement or servicing agreement. The trustee will also
be entitled to reasonable servicing compensation not to exceed the applicable
servicing fee, together with other servicing compensation in the form of
assumption fees, late payment charges or otherwise as provided in the related
pooling and servicing agreement or servicing agreement. In most cases, in the
event that the trustee would be obligated to succeed the master servicer but is
unwilling so to act, it may appoint, or if it is unable so to act, it shall
appoint, or petition a court of competent jurisdiction for the appointment of,
a Fannie Mae- or Freddie Mac-approved mortgage servicing institution with a net
worth of at least $10,000,000 or other amount as specified in the related
prospectus supplement to act as a successor to the master servicer under the
related pooling and servicing agreement or servicing agreement. Pending that
appointment, the trustee is obligated to act in that capacity.

     No securityholder of a series, solely by virtue of that holder's status as
a securityholder, will have any right under the pooling and servicing agreement
or servicing agreement for that series to institute any proceeding for the
related pooling and servicing agreement or servicing agreement, unless:

      o  that holder previously has given to the trustee for that series written
         notice of default,

      o  the holders of securities evidencing at least 25% of the aggregate
         outstanding principal amount of the securities for that series have
         made written request to the trustee to institute that proceeding in its
         own name as trustee under that agreement, and

      o  the holders of securities evidencing at least 25% of the aggregate
         outstanding principal amount of the securities for that series have
         offered to the trustee reasonable indemnity, and the trustee for 60
         days has neglected or refused to institute that proceeding.

     Indenture. In most cases, an event of default under the indenture will
include:

      o  a default for five days or more, or other period of time described in
         the related prospectus supplement, in the payment of any principal of
         or interest on any note or equity certificates of that series;

      o  failure to perform any other covenant of the issuer in the indenture
         which continues for a period of 30 days after notice of that covenant
         is given in accordance with the procedures described in the related
         prospectus supplement;

      o  any representation or warranty made by the issuer in the indenture or
         in any certificate or other writing delivered for or in connection with
         that representation or warranty or affecting that series having been
         incorrect in a material respect as of the time made, and the breach is
         not cured within 30 days after notice of that breach is given in
         accordance with the procedures described in the related prospectus
         supplement;

      o  events of bankruptcy, insolvency, receivership or liquidation of the
         issuer; or

      o  any other event of default provided for notes of that series.

     If an event of default for the notes of any series at the time outstanding
occurs and is continuing, the trustee or the holders of a majority of the then
aggregate outstanding amount of the notes of that series may declare the
principal amount of all the notes of that series to be due and payable
immediately. If the notes of that series are accrual securities, the trustee or
the holders of that majority may declare that portion of the principal amount
as may be specified in the terms of that series, as provided in the related
prospectus supplement, to be due and payable. That declaration may, under
various circumstances, be rescinded and annulled by the holders of a majority
in aggregate outstanding amount of the related notes.

     If following an event of default for any series of notes, the notes of
that series have been declared to be due and payable, the trustee may, in its
discretion, despite that acceleration, elect to maintain possession of the
collateral securing the notes of that series and to continue to apply payments
on that collateral as if there had been no declaration of acceleration if that
collateral continues to provide sufficient funds for the payment of principal
of and interest on the notes of that series as they would have become due if
there had not been that declaration. In addition, the trustee may not sell or
otherwise liquidate the collateral securing the notes of a series following an
event of default, unless:


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<PAGE>

      o  the holders of 100% of the then aggregate outstanding amount of the
         notes of that series consent to that sale,

      o  the proceeds of that sale or liquidation are sufficient to pay in full
         the principal of and accrued interest, due and unpaid, on the
         outstanding notes of that series at the date of that sale, or

      o  the trustee determines that the collateral would not be sufficient on
         an ongoing basis to make all payments on those notes as those payments
         would have become due if those notes had not been declared due and
         payable, and the trustee obtains the consent of the holders of 66 2/3%
         of the then aggregate outstanding amount of the notes of that series.

     In the event that the trustee liquidates the collateral in connection with
an event of default, the indenture provides that the trustee will have a prior
lien on the proceeds of liquidation for unpaid fees and expenses. As a result,
on the occurrence of that event of default, the amount available for payments
to the noteholders would be less than would otherwise be the case. However, the
trustee may not institute a proceeding for the enforcement of its lien except
in connection with a proceeding for the enforcement of the lien of the
indenture for the benefit of the noteholders after the occurrence of that event
of default.

     In the event the principal of the notes of a series is declared due and
payable, as described in the second preceding paragraph, the holders of those
notes issued at a discount from par may be entitled to receive no more than an
amount equal to the unpaid principal amount of those notes less the amount of
that discount that is unamortized.

     No noteholder or holder of an equity certificate of a series, solely by
virtue of that holder's status as a noteholder or holder of an equity
certificate, will have any right under an owner trust agreement or indenture
for that series to institute any proceeding for that agreement unless that
holder previously has given to the trustee for that series written notice of
default and unless the holders of notes or equity certificates of any class
evidencing at least 25% of the aggregate percentage interests constituting that
class have made written request on the trustee to institute that proceeding in
its own name as trustee under that series and have offered to the trustee
reasonable indemnity, and the trustee for 60 days has neglected or refused to
institute for that proceeding.

     Under the terms of the indenture, if an event of default occurs and is
continuing, senior securityholders may be entitled to exercise specified rights
of the holders of the securities, without the consent of subordinate
securityholders, and the subordinate securityholders may exercise those rights
only with the prior consent of the senior securityholders.


THE OWNER TRUSTEE

     The identity of the commercial bank, national banking association, banking
corporation, savings and loan association or trust company named as the owner
trustee for each series of notes will be provided in the related prospectus
supplement. The entity serving as owner trustee may have normal banking
relationships with the depositor or the master servicer.


THE TRUSTEE

     The identity of the commercial bank, national banking association, banking
corporation, savings and loan association or trust company named as the trustee
for each series of securities will be provided in the related prospectus
supplement. The entity serving as trustee may have normal banking relationships
with the depositor or the master servicer. In addition, for the purpose of
meeting the legal requirements of various local jurisdictions, the trustee will
have the power to appoint co-trustees or separate trustees of all or any part
of the trust relating to a series of securities. In the event of that
appointment, all rights, powers, duties and obligations conferred or imposed on
the trustee by the pooling and servicing agreement or indenture relating to
that series will be conferred or imposed on the trustee and that separate
trustee or co-trustee jointly, or, in any jurisdiction in which the trustee
shall be incompetent or unqualified to perform various acts, singly on that
separate trustee or co-trustee who shall exercise and perform those rights,
powers, duties and obligations solely at the direction of the trustee. The
trustee may also appoint agents to perform any of the responsibilities of the
trustee. Those agents shall have any or


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<PAGE>

all of the rights, powers, duties and obligations of the trustee conferred on
them by that appointment. However, the trustee shall continue to be responsible
for its duties and obligations under the related agreement.


DUTIES OF THE TRUSTEE

     The trustee makes no representations as to the validity or sufficiency of
any related agreement, the securities or of any mortgage asset or related
documents. If no event of default as described in the applicable agreement has
occurred, the trustee is required to perform only those duties specifically
required of it under that agreement. On receipt of the various certificates,
statements, reports or other instruments required to be furnished to it, the
trustee is required to examine them to determine whether they are in the form
required by the related agreement. However, the trustee will not be responsible
for the accuracy or content of those documents furnished by it or the
securityholders to the master servicer under the related agreement.

     The trustee may be held liable for its own grossly negligent action or
failure to act, or for its own willful misconduct; provided, however, that the
trustee will not be personally liable for any action taken, suffered or omitted
to be taken by it in good faith in accordance with the direction of the
securityholders in an event of default. See "Event of Default and Rights in the
Case of Events of Default." in this prospectus. The trustee is not required to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties under the related agreement, or in the
exercise of any of its rights or powers, if it has reasonable grounds for
believing that repayment of those funds or adequate indemnity against that risk
or liability is not reasonably assured to it.


RESIGNATION OF TRUSTEE

     The trustee may resign, by written notice to the depositor, the master
servicer and to all securityholders; provided, that the resignation shall not
be effective until a successor trustee is appointed. If no successor trustee
has been appointed and has accepted the appointment within 60 days after giving
that notice of resignation, the resigning trustee may petition any court of
competent jurisdiction for appointment of a successor trustee. The resigning
trustee shall not resign and be discharged until the time that the successor
trustee is approved by each rating agency. The trustee may also be removed at
any time:

      o  by the depositor, if the trustee ceases to be eligible to continue as
         trustee under the related pooling and servicing agreement or indenture;

      o  if the trustee becomes insolvent;

      o  if a tax is imposed or threatened for the trust by any state in which
         the trustee or the trust held by the trustee under the related
         agreement is located; or

      o  by the holders of securities evidencing at least 51% of the aggregate
         outstanding principal amount of the securities in the trust on notice
         to the trustee and to the depositor.

Any resignation or removal of the trustee and appointment of a successor
trustee will not become effective until acceptance of the appointment by the
successor trustee.


CERTIFICATE ACCOUNT

     The trustee will establish a Certificate Account in its name as trustee
for the securityholders, or if it is so specified in the related prospectus
supplement, the Certificate Account may be established by the master servicer
in the name of the trustee. The Certificate Account will, in most cases, be an
Eligible Account, and the funds held in that account may be invested, pending
disbursement to securityholders of the related series, under the terms of the
related pooling and servicing agreement or the related servicing agreement and
indenture, in eligible investments. The master servicer or the trustee will
usually be entitled to receive, as additional compensation, any interest or
other income earned on funds in the Certificate Account. There will be
deposited into the Certificate Account monthly all funds received from the
master servicer and required withdrawals from any reserve funds. In most cases,
the trustee is permitted from time to time:


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<PAGE>

      o  to make withdrawals from the Certificate Account for each series to
         remove amounts deposited in that account in error,

      o  to pay to itself or the master servicer any reinvestment income on
         funds held in the Certificate Account to the extent it is entitled,

      o  to remit to the master servicer its Servicing Fee, assumption or
         substitution fees, late payment charges and other mortgagor charges,
         reimbursement of Advances and expenses,

      o  to make deposits to any reserve fund,

      o  to make regular distributions to the securityholders,

      o  to clear and terminate the Certificate Account, and

      o  to make other withdrawals as required or permitted by the related
         agreements.


EXPENSE RESERVE FUND

     If specified in the prospectus supplement relating to a series, the
depositor may deposit on the related closing date in an Expense Reserve Fund
cash or eligible investments which will be available to pay anticipated fees
and expenses of the trustee or other agents. The Expense Reserve Fund for a
series may also be funded over time through the deposit in the Expense Reserve
Fund of all or a portion of cash flow, to the extent described in the related
prospectus supplement. The Expense Reserve Fund, if any, will not be part of
the trust held for the benefit of the holders. Amounts on deposit in any
Expense Reserve Fund will be invested in one or more eligible investments.


AMENDMENT OF AGREEMENTS

     The pooling and servicing agreement for each series of certificates may be
amended by the depositor, the master servicer, and the trustee for that series,
without notice to or consent of the certificateholders:

      o  to cure any ambiguity;

      o  to correct or supplement any provision in that pooling and servicing
         agreement which may be defective or inconsistent with any other
         provision in that pooling and servicing agreement;

      o  to make any other provisions regarding matters or questions arising
         under that pooling and servicing agreement which are not inconsistent
         with any other provisions of that pooling and servicing agreement; or

      o  to comply with any requirements imposed by the Internal Revenue Code.

Any of these amendments, other than for the reason described in the last clause
of this paragraph, must not adversely affect in any material respect the
interests of any certificateholders of that series.

     In most cases, the pooling and servicing agreement for each series of
certificates may also be amended by the trustee, the master servicer and the
depositor for that series with the consent of the holders possessing not less
than 66 2/3% of the aggregate outstanding principal amount of the certificates
of each class of that series affected by that amendment, for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of that pooling and servicing agreement or modifying in any manner
the rights of certificateholders of that series. That amendment may not:

      o  reduce the amount or delay the timing of payments on any certificate
         without the consent of the holder of that certificate;

      o  adversely affect the REMIC status, if a REMIC election or elections
         have been made, for the related trust of a series; or

      o  reduce the aforesaid percentage of aggregate outstanding principal
         amount of certificates of each class, the holders of which are required
         to consent to that amendment without the consent of the holders of 100%
         of the aggregate outstanding principal amount of each class of
         certificates affected by that amendment.


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<PAGE>

     In spite of the foregoing, if a REMIC election or elections have been made
for the related trust, the trustee will not be entitled to consent to any
amendment to a pooling and servicing agreement without having first received an
opinion of counsel to the effect that the amendment or the exercise of any
power granted to the master servicer, the depositor or the trustee in
accordance with the amendment will not result in the imposition of a tax on the
related trust or any related REMIC or cause that trust or that REMIC to fail to
qualify as a REMIC.

     In most cases, the servicing agreement or indenture for each series of
notes may be amended by the parties to that agreement without the consent of
any of the noteholders covered by that agreement:

      o  to cure any ambiguity;

      o  to correct, modify or supplement any provision in that agreement which
         may be defective or inconsistent with any other provision in that
         agreement; or

      o  to make any other provisions regarding matters or questions arising
         under the agreement which are not inconsistent with the provisions of
         that agreement, provided that this action will not adversely affect in
         any material respect the interests of any noteholder covered by the
         agreement.

     In most cases, the servicing agreement or indenture for each series of
notes may also be amended by the parties to that agreement with the consent of
the holders evidencing not less than 66 2/3% of the aggregate outstanding
principal amount of the notes of each class of that series affected by that
agreement, for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of that agreement or modifying in
any manner the rights of noteholders of that series. That the amendment may
not:

      o  reduce the amount of or delay the timing of, payments received on any
         note without the consent of the holder of that note;

      o  adversely affect in any material respect the interests of the holders
         of any class of notes in a manner other than as described in the
         preceding clause, without the consent of the holders of notes of that
         class evidencing not less than 66 2/3% of the aggregate outstanding
         principal amount of the notes of each class of that series affected by
         that amendment; or

      o  reduce the aforesaid percentage of aggregate outstanding principal
         amount of notes of each class, the holders of which are required to
         consent to that amendment without the consent of the holders of 100% of
         the aggregate outstanding principal amount of each class of notes
         affected by that amendment.


VOTING RIGHTS

     The related prospectus supplement will describe the method of determining
allocation of voting rights for a series, if other than as described in this
prospectus. If specified in the related prospectus supplement, a provider of
credit enhancement may be entitled to specified voting rights of the
securityholders.


REMIC ADMINISTRATOR

     For any multiple class series of certificates as to which a REMIC election
is made, preparation of reports and other administrative duties relating to the
trust may be performed by a REMIC Administrator, who may be an affiliate of the
depositor.


TERMINATION

     The obligations created by the related agreements for a series will
terminate on the distribution to securityholders of all amounts distributable
to them under those agreements after:

      o  the later of the final payment or other liquidation of the last
         mortgage loan remaining in the trust for that series or the disposition
         of all property acquired on foreclosure or deed in lieu of foreclosure
         of any mortgage loan, or


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<PAGE>

      o  the repurchase by the master servicer or the depositor, or other party
         as specified in the prospectus supplement, from the trustee for that
         series of all mortgage loans at that time subject to the related
         agreements and all property acquired in connection with any mortgage
         loan.


     The exercise of that right will effect early retirement of the securities
of that series, but the right to so purchase is subject to the aggregate
principal balances of the mortgage loans at the time of repurchase being less
than a fixed percentage, to be provided in the related prospectus supplement,
of the cut-off date aggregate principal balance. In no event, however, will the
trust created by the related agreements continue beyond the expiration of 21
years from the death of the last survivor of persons identified in those
agreements. For each series, the master servicer or the trustee, as applicable,
will give written notice of termination of the related agreements to each
securityholder, and the final distribution will be made only on surrender and
cancellation of the securities at an office or agency specified in the notice
of termination. See "Description of the Securities--Optional Termination" in
this prospectus.



















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<PAGE>

                            LEGAL ASPECTS OF LOANS

     The following discussion contains summaries of various legal aspects of
housing loans which are general in nature. Because these legal aspects are
governed by applicable state law, which laws may differ substantially from
state to state, the summaries do not purport to be complete nor to reflect the
law of any particular state, nor to encompass the laws of all states in which
the properties securing the housing loans are situated. The summaries are
qualified in their entirety by reference to the applicable federal and state
laws governing the loans.

     The mortgage loans, other than Cooperative Loans, comprising or underlying
the mortgage assets for a series will be secured by either mortgages or deeds
of trust, or deeds to secure debt, depending on the prevailing practice in the
state in which the property subject to a mortgage loan is located and may have
first, second or third priority. Manufactured housing contracts evidence both
the obligation of the obligor to repay the loan evidenced by those manufactured
housing contracts and grant a security interest in the related manufactured
homes to secure repayment of that loan. However, as manufactured homes have
become larger and often have been attached to their sites without any apparent
intention by the borrowers to move them, courts in many states have held that
manufactured homes may, under various circumstances become subject to real
estate title and recording laws. See "--Manufactured Home Loans" in this
section of the prospectus. In some states, the filing of a mortgage, deed of
trust or deed to secure debt creates a lien or title interest on the real
property encumbered by the mortgage, deed of trust or deed to secure debt.
However, in other states, the mortgage or deed of trust conveys legal title to
the property to the mortgagee or to a trustee for the benefit of the mortgagee
subject to a condition subsequent, that is, the payment of the indebtedness
secured by that mortgage or deed of trust, respectively. The lien created by
the mortgage or deed of trust is not prior to the lien for real estate taxes
and assessments and other charges imposed under governmental police powers.
Priority for those instruments depends on their terms and in some cases the
term of separate subordination or intercreditor agreements, the knowledge of
the parties to the mortgage and, in most cases, on the order of recording with
the applicable state, county or municipal office. There are two parties to a
mortgage, the mortgagor, who is the borrower/  homeowner or the land trustee,
as described in the next sentence, and the mortgagee, who is the lender. Under
the mortgage instrument, the mortgagor delivers to the mortgagee a note or bond
and the mortgage. In a number of states, three parties may be involved in a
mortgage financing when title to the property is held by a land trustee who is
the land trustee under a land trust agreement of which the borrower is the
beneficiary; at origination of a mortgage loan, the land trustee, as fee owner
of the property, executes the mortgage and the borrower executes:

      o  a separate undertaking to make payments on the mortgage note, and

      o  an assignment of leases and rents. Although a deed of trust is similar
         to a mortgage, a deed of trust has three parties: the trustor, who is
         the borrower/homeowner, the beneficiary, who is the lender, and a
         third-party grantee called the trustee.

     Under a deed of trust, the borrower grants the property, irrevocably until
the debt is paid, in trust, often with a power of sale, to the trustee to
secure payment of the obligation. A deed to secure debt typically has two
parties, under which the borrower, or grantor, conveys title to the real
property to the grantee, or lender, often with a power of sale, until the debt
is repaid. The trustee's authority under a deed of trust, the grantee's
authority under a deed to secure debt and the mortgagee's authority under a
mortgage are governed by the law of the state in which the real property is
located, the express provisions of the deed of trust, mortgage, or the deed to
secure debt, and, in a number of deed of trust transactions, the directions of
the beneficiary.


COOPERATIVE LOANS

     If specified in the prospectus supplement relating to a series of
securities, the mortgage loans may include Cooperative Loans. Each Cooperative
Note evidencing a Cooperative Loan will be secured by a security interest in
shares issued by the related Cooperative and in the related proprietary lease
or occupancy agreement granting exclusive rights to occupy a specific dwelling
unit in the Cooperative's building. The security agreement will create a lien
on, or grant a security interest in, the Cooperative


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<PAGE>

shares and proprietary leases or occupancy agreements, the priority of which
will depend on, among other things, the terms of the particular security
agreement as well as the order of recordation and/or filing of the agreement,
or the filing of the financing statements related to that agreement, in the
appropriate recording office or the taking of possession of the Cooperative
shares, depending on the law of the state in which the Cooperative is located.
That lien or security interest is not, in most cases, prior to liens in favor
of the cooperative corporation for unpaid assessments or common charges. That
lien or security interest is not prior to the lien for real estate taxes and
assessments and other charges imposed under governmental police powers.

     All Cooperative buildings relating to the Cooperative Loans are usually
located in the State of New York. In most cases, each Cooperative owns in fee
or has a leasehold interest in all the real property and owns in fee or leases
the building and all separate dwelling units in that Cooperative. The
Cooperative is directly responsible for property management and, in most cases,
payment of real estate taxes, other governmental impositions and hazard and
liability insurance. If there is an underlying mortgage(s) on the Cooperative's
building or underlying land, as is usually the case, or an underlying lease of
the land, as is the case in some instances, the Cooperative, as mortgagor or
lessee, as the case may be, is also responsible for fulfilling those mortgage
or rental obligations. An underlying mortgage loan is ordinarily obtained by
the Cooperative in connection with either the construction or purchase of the
Cooperative's building or the obtaining of capital by the Cooperative. The
interest of the occupant under proprietary leases or occupancy agreements as to
which that Cooperative is the landlord is in most cases subordinate to the
interest of the holder of an underlying mortgage and to the interest of the
holder of a land lease. If the Cooperative is unable to meet the payment
obligations:

      o  arising under an underlying mortgage, the mortgagee holding an
         underlying mortgage could foreclose on that mortgage and terminate all
         subordinate proprietary leases and occupancy agreements, or

      o  arising under its land lease, the holder of the landlord's interest
         under the land lease could terminate it and all subordinate proprietary
         leases and occupancy agreements.

     In addition, an underlying mortgage on a Cooperative may provide financing
in the form of a mortgage that does not fully amortize, with a significant
portion of principal being due in one final payment at maturity. The inability
of the Cooperative to refinance a mortgage and its consequent inability to make
that final payment could lead to foreclosure by the mortgagee. Similarly, a
land lease has an expiration date and the inability of the Cooperative to
extend its term or, in the alternative, to purchase the land, could lead to
termination of the Cooperative's interest in the property and termination of
all proprietary leases and occupancy agreements. In either event, a foreclosure
by the holder of an underlying mortgage or the termination of the underlying
lease could eliminate or significantly diminish the value of any collateral
held by the lender who financed the purchase by an individual tenant-stockholder
of Cooperative shares or, in the case of the mortgage loans, the collateral
securing the Cooperative Loans.

     Each Cooperative is owned by shareholders, referred to as
tenant-stockholders, who, through ownership of stock or shares in the
Cooperative, receive proprietary leases or occupancy agreements which confer
exclusive rights to occupy specific dwellings. In most cases, a
tenant-stockholder of a Cooperative must make a monthly rental payment to the
Cooperative under the proprietary lease, which rental payment represents that
tenant-stockholder's pro rata share of the Cooperative's payments for its
underlying mortgage, real property taxes, maintenance expenses and other
capital or ordinary expenses. An ownership interest in a Cooperative and
accompanying occupancy rights may be financed through a Cooperative Loan
evidenced by a Cooperative Note and secured by an assignment of and a security
interest in the occupancy agreement or proprietary lease and a security
interest in the related Cooperative shares. In most cases, the lender takes
possession of the share certificate and a counterpart of the proprietary lease
or occupancy agreement and a financing statement covering the proprietary lease
or occupancy agreement and the Cooperative shares is filed in the appropriate
state and local offices to perfect the lender's interest in its collateral.
Subject to the limitations discussed under "Realizing on Cooperative Loan
Security", on default of the tenant-stockholder, the lender may sue for
judgment on the


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Cooperative Note, dispose of the collateral at a public or private sale or
otherwise proceed against the collateral or tenant-stockholder as an individual
as provided in the security agreement covering the assignment of the
proprietary lease or occupancy agreement and the pledge of Cooperative shares.
See "--Realizing on Cooperative Loan Security" in this section of the
prospectus.


TAX ASPECTS OF COOPERATIVE OWNERSHIP

     In general, a "tenant-stockholder", as defined in Section 216(b)(2) of the
Internal Revenue Code, of a corporation that qualifies as a "cooperative
housing corporation" within the meaning of Section 216(b)(1) of the Internal
Revenue Code is allowed a deduction for amounts paid or accrued within his
taxable year to the corporation representing his proportionate share of
specific interest expenses and specific real estate taxes allowable as a
deduction under Section 216(a) of the Internal Revenue Code to the corporation
under Sections 163 and 164 of the Internal Revenue Code. In order for a
corporation to qualify under Section 216(b)(1) of the Internal Revenue Code for
its taxable year in which those items are allowable as a deduction to the
corporation, that section requires, among other things, that at least 80% of
the gross income of the corporation be derived from its tenant-stockholders. By
virtue of this requirement, the status of a corporation for purposes of Section
216(b)(1) of the Internal Revenue Code must be determined on a year-to-year
basis. Consequently, there can be no assurance that Cooperatives relating to
the Cooperative Loans will qualify under that section for any particular year.
In the event that this Cooperative fails to qualify for one or more years, the
value of the collateral securing any related Cooperative Loans could be
significantly impaired because no deduction would be allowable to
tenant-stockholders under Section 216(a) of the Internal Revenue Code for those
years. In view of the significance of the tax benefits accorded
tenant-stockholders of a corporation that qualifies under Section 216(b)(1) of
the Internal Revenue Code, the likelihood that this failure would be permitted
to continue over a period of years appears remote.


FORECLOSURE ON MORTGAGE LOANS

     Although a deed of trust or a deed to secure debt may also be foreclosed
by judicial action, foreclosure of a deed of trust or a deed to secure debt, in
most cases, is accomplished by a non-judicial trustee's or grantee's, as
applicable, sale under a specific provision in the deed of trust or deed to
secure debt which authorizes the trustee or grantee, as applicable, to sell the
property in the case of any default by the borrower under the terms of the note
or deed of trust or deed to secure debt. In addition to any notice requirements
contained in a deed of trust or a deed to secure debt, in some states, prior to
a sale the trustee, or grantee, as applicable, must record a notice of default
and send a copy to the borrower-trustor and to any person who has recorded a
request for a copy of notice of default and notice of sale. In addition, in
some states, prior to that sale, the trustee or grantee, as applicable, must
provide notice to any other individual having an interest of record in the real
property, including any junior lienholders. The trustor, borrower, or any
person having a junior encumbrance on the real estate, may, during a
reinstatement period, cure the default by paying the entire amount in arrears
plus the costs and expenses incurred in enforcing the obligation. In most
cases, state law controls the amount of foreclosure expenses and costs,
including attorney's fees, which may be recovered by a lender. If the deed of
trust or deed to secure debt is not reinstated within a specified period, a
notice of sale must be posted in a public place and, in most states, published
for a specific period of time in one or more newspapers in a specified manner
prior to the date of trustee's sale. In addition, some state laws require that
a copy of the notice of sale be posted on the property, recorded and sent to
all parties having an interest of record in the real property.

     An action to foreclose a mortgage is an action to recover the mortgage
debt by enforcing the mortgagee's rights under the mortgage. It is regulated by
statutes and rules and subject throughout to the court's equitable powers. In
most cases, a mortgagor is bound by the terms of the mortgage note and the
mortgage as made and cannot be relieved from his default if the mortgagee has
exercised his rights in a commercially reasonable manner. However, since a
foreclosure action historically was equitable in nature, the court may exercise
equitable powers to relieve a mortgagor of a default and deny the mortgagee
foreclosure on proof that either the mortgagor's default was neither willful
nor in bad faith or the


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<PAGE>

mortgagee's action established a waiver, fraud, bad faith, or oppressive or
unconscionable conduct such as to warrant a court of equity to refuse
affirmative relief to the mortgagee. Under various circumstances a court of
equity may relieve the mortgagor from an entirely technical default where that
default was not willful.

     Foreclosure of a mortgage, in most cases, is accomplished by judicial
action. The action is usually initiated by the service of legal pleadings on
all parties having an interest of record in the real property. Delays in
completion of the foreclosure may occasionally result from difficulties in
locating and serving necessary parties, including borrowers located outside the
jurisdiction in which the mortgaged property is located. If the mortgagee's
right to foreclose is contested, the legal proceedings necessary to resolve the
issue can be time-consuming. A foreclosure action is subject to most of the
delays and expenses of other lawsuits if defenses or counterclaims are
interposed, sometimes requiring up to several years to complete. Similarly, a
suit against the debtor on the mortgage note may take several years and, in
most cases, is a remedy alternative to foreclosure, the mortgagee being
precluded from pursuing both at the same time.

     In the case of foreclosure under a mortgage, a deed of trust, or a deed to
secure debt, the sale by the referee or other designated officer or by the
trustee or grantee, as applicable, is in most cases a public sale. However,
because of the difficulty potential third party purchasers at the sale have in
determining the exact status of title and because the physical condition of the
property may have deteriorated during the foreclosure proceedings, it is
uncommon for a third party to purchase the property at a foreclosure sale.
Rather, it is common for the lender to purchase the property from the trustee
or referee, or grantee, as applicable, for a credit bid less than or equal to
the unpaid principal amount of the mortgage or deed of trust plus accrued and
unpaid interest and the expenses of foreclosure, in which event the mortgagor's
debt will be extinguished unless the lender purchases the property for a lesser
amount in order to preserve its right against a borrower to seek a deficiency
judgment in states where that judgment is available. In the same states, there
is a statutory minimum purchase price which the lender may offer for the
property and, in most cases, state law controls the amount of foreclosure costs
and expenses, including attorneys' fees, which may be recovered by a lender.
After that purchase, subject to the right of the borrower in some states to
remain in possession during the redemption period, the lender will assume the
burdens of ownership, including obtaining casualty insurance, paying taxes and
making those repairs at its own expense as are necessary to render the property
suitable for sale. The lender will commonly obtain the services of a real
estate broker and pay the broker's commission in connection with the sale of
the property. Depending on market conditions, the ultimate proceeds of the sale
of the property may not equal the lender's investment in the property and, in
some states, the lender may be entitled to a deficiency judgment. In some
cases, a deficiency judgment may be pursued in lieu of foreclosure. Any loss
may be reduced by the receipt of any mortgage guaranty insurance proceeds.

     A junior mortgagee may not foreclose on the property securing a junior
mortgage unless it forecloses subject to the senior mortgages, in which case it
must either pay the entire amount due on the senior mortgages to the senior
mortgagees prior to or at the time of the foreclosure sale or undertake the
obligation to make payments on the senior mortgages in the event the mortgagor
is in default under those senior mortgages, in either event adding the amounts
expended to the balance due on the junior loan, and may be subrogated to the
rights of the senior mortgagees. In addition, in the event that the foreclosure
by a junior mortgagee triggers the enforcement of a "due-on-sale" clause in a
senior mortgage, the junior mortgagee may be required to pay the full amount of
the senior mortgages to the senior mortgagees. Accordingly, for those mortgage
loans which are junior mortgage loans, if the lender purchases the property,
the lender's title will be subject to all senior liens and claims and various
governmental liens. The proceeds received by the referee or trustee from the
sale are applied first to the costs, fees and expenses of sale and then in
satisfaction of the indebtedness secured by the mortgage or deed of trust under
which the sale was conducted. Any remaining proceeds are often payable to the
holders of junior mortgages or deeds of trust and other liens and claims in
order of their priority, whether or not the borrower is in default. Any
additional proceeds are often payable to the mortgagor or trustor. The payment
of the proceeds to the holders of junior mortgages may occur in the foreclosure
action of the senior mortgagee or may require the institution of separate legal
proceedings.


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<PAGE>

     The proceeds received by the referee or trustee from the sale are applied
first to the costs, fees and expenses of sale and then in satisfaction of the
indebtedness secured by the mortgage or deed of trust under which the sale was
conducted. Any remaining proceeds are, in most cases, payable to the holders of
junior mortgages or deeds of trust and other liens and claims in order of their
priority, whether or not the borrower is in default. Any additional proceeds
are usually payable to the mortgagor or trustor. The payment of the proceeds to
the holders of junior mortgages may occur in the foreclosure action of the
senior mortgagee or may require the institution of separate legal proceedings.

     The purposes of a foreclosure action are to enable the mortgagee to
realize on its security and to bar the mortgagor, and all persons who have an
interest in the property which is subordinate to the foreclosing mortgagee,
from their "equity of redemption." The doctrine of equity of redemption
provides that, until the property covered by a mortgage has been sold in
accordance with a properly conducted foreclosure and foreclosure sale, those
having an interest which is subordinate to that of the foreclosing mortgagee
have an equity of redemption and may redeem the property by paying the entire
debt with interest. In addition, in some states, when a foreclosure action has
been commenced, the redeeming party must pay various costs of that action.
Those having an equity of redemption must be made parties and duly summoned to
the foreclosure action in order for their equity of redemption to be barred.


REALIZING ON COOPERATIVE LOAN SECURITY

     The Cooperative shares owned by the tenant-stockholder, together with the
rights of the tenant-stockholder under the proprietary lease or occupancy
agreement, are pledged to the lender and, in almost all cases, subject to
restrictions on transfer as described in the Cooperative's certificate of
incorporation and by-laws, as well as in the proprietary lease or occupancy
agreement. The proprietary lease or occupancy agreement, even while pledged,
may be cancelled by the Cooperative for failure by the tenant-stockholder to
pay rent or other obligations or charges owed by that tenant-stockholder,
including mechanics' liens against the Cooperative's building incurred by that
tenant-stockholder. In most cases, rent and other obligations and charges
arising under a proprietary lease or occupancy agreement which are owed to the
Cooperative are made liens on the shares to which the proprietary lease or
occupancy agreement relates. In addition, the proprietary lease or occupancy
agreement often permits the Cooperative to terminate that lease or agreement in
the event the borrower defaults in the performance of covenants under that
lease or agreement. Typically, the lender and the Cooperative enter into a
recognition agreement which, together with any lender protection provisions
contained in the proprietary lease or occupancy agreement, establishes the
rights and obligations of both parties in the event of a default by the
tenant-stockholder on its obligations under the proprietary lease or occupancy
agreement. A default by the tenant-stockholder under the proprietary lease or
occupancy agreement will usually constitute a default under the security
agreement between the lender and the tenant-stockholder.

     The recognition agreement, in most cases, provides that, in the event that
the tenant-stockholder has defaulted under the proprietary lease or occupancy
agreement, the Cooperative will take no action to terminate that lease or
agreement until the lender has been provided with notice of and an opportunity
to cure the default. The recognition agreement typically provides that if the
proprietary lease or occupancy agreement is terminated, the Cooperative will
recognize the lender's lien against proceeds from a sale of the shares and the
proprietary lease or occupancy agreement allocated to the dwelling, subject,
however, to the Cooperative's right to sums due under that proprietary lease or
occupancy agreement or which have become liens on the shares relating to the
proprietary lease or occupancy agreement. The total amount owed to the
Cooperative by the tenant-stockholder, which the lender, in most cases, cannot
restrict and does not monitor, could reduce the amount realized on the sale of
the collateral below the outstanding principal balance of the Cooperative Loan
and accrued and unpaid interest on that Cooperative Loan.

     Recognition agreements, in most cases, also provide that in the event the
lender succeeds to the tenant-shareholder's shares and proprietary lease or
occupancy agreement as the result of realizing on its collateral for a
Cooperative Loan, the lender must obtain the approval or consent of the board
of directors of the Cooperative as required by the proprietary lease before
transferring the Cooperative shares and/or assigning the proprietary lease.
That approval or consent is usually based on the prospective purchaser's


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<PAGE>

income and net worth, among other factors, and may significantly reduce the
number of potential purchasers, which could limit the ability of the lender to
sell and realize on the value of the collateral. In most cases, the lender is
not limited in any rights it may have to dispossess the tenant-stockholder.

     Because of the nature of Cooperative Loans, lenders do not require either
the tenant-stockholder, that is, the borrower or the Cooperative to obtain
title insurance of any type. Consequently, the existence of any prior liens or
other imperfections of title affecting the Cooperative's building or real
estate also may adversely affect the marketability of the shares allocated to
the cooperative dwelling unit in the event of foreclosure.

     A foreclosure on the Cooperative shares is accomplished by public sale in
accordance with the provisions of Article 9 of the Uniform Commercial Code, or
UCC, and the security agreement relating to those shares. Article 9 of the UCC
requires that a sale be conducted in a "commercially reasonable" manner.
Whether a sale has been conducted in a "commercially reasonable" manner will
depend on the facts in each case. In determining commercial reasonableness, a
court will look to the notice given the debtor and the method, manner, time,
place and terms of the sale and the sale price. In most cases, a sale conducted
according to the usual practice of banks selling similar collateral in the same
area will be considered reasonably conducted.

     Article 9 of the UCC provides that the proceeds of the sale will be
applied first to pay the costs and expenses of the sale and then to satisfy the
indebtedness secured by the lender's security interest. The recognition
agreement, however, in most cases, provides that the lender's right to
reimbursement is subject to the right of the Cooperative corporation to receive
sums due under the proprietary lease or occupancy agreement. If there are
proceeds remaining, the lender must account to the tenant-stockholder for the
surplus. However, if a portion of the indebtedness remains unpaid, the
tenant-stockholder is usually responsible for the deficiency. See
"--Anti-Deficiency Legislation and Other Limitations on Lenders" in this
section of the prospectus.


RIGHTS OF REDEMPTION

     In some states, after sale under a deed of trust or a deed to secure debt
or foreclosure of a mortgage, the borrower and foreclosed junior lienors or
other parties are given a statutory period, usually ranging from six months to
two years, in which to redeem the property from the foreclosure sale. The right
of redemption should be distinguished from the equity of redemption, which is a
non-statutory right that must be exercised prior to the foreclosure sale. In
some states, redemption may occur only on payment of the entire principal
balance of the loan, accrued interest and expenses of foreclosure. In other
states, redemption may be authorized if the former borrower pays only a portion
of the sums due. The effect of a statutory right of redemption is to diminish
the ability of the lender to sell the foreclosed property. The right of
redemption would defeat the title of any purchaser from the lender subsequent
to foreclosure or sale under a deed of trust or a deed to secure debt.
Consequently, the practical effect of a right of redemption is to force the
lender to retain the property and pay the expenses of ownership until the
redemption period has run. In some states, there is no right to redeem property
after a trustee's sale under a deed of trust.


ANTI-DEFICIENCY LEGISLATION AND OTHER LIMITATIONS ON LENDERS

     Various states have imposed statutory prohibitions which limit the
remedies of a beneficiary under a deed of trust or a mortgagee under a mortgage
or a grantee under a deed to secure debt. In some states, including California,
statutes limit the right of the beneficiary, mortgagee or grantee to obtain a
deficiency judgment against the borrower following foreclosure or sale under a
deed of trust. A deficiency judgment is a personal judgment against the former
borrower equal in most cases to the difference between the net amount realized
on the public sale of the real property and the amount due to the lender. In
the case of a mortgage loan secured by a property owned by a trust where the
mortgage note is executed on behalf of the trust, a deficiency judgment against
the trust following foreclosure or sale under a deed of trust or deed to secure
debt, even if obtainable under applicable law, may be of little value to the
beneficiary, grantee or mortgagee, if there are no trust assets against which
that deficiency judgment may be executed.


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<PAGE>

Some state statutes require the beneficiary, grantee or mortgagee to exhaust
the security afforded under a deed of trust, deed to secure debt or mortgage by
foreclosure in an attempt to satisfy the full debt before bringing a personal
action against the borrower. In other states, the lender has the option of
bringing a personal action against the borrower on the debt without first
exhausting that security. However in some of these states, the lender,
following judgment on that personal action, may be deemed to have elected a
remedy and may be precluded from exercising remedies for the security.
Consequently, the practical effect of the election requirement, in those states
permitting that election, is that lenders will usually proceed against the
security first rather than bringing a personal action against the borrower.
Finally, in other states, statutory provisions limit any deficiency judgment
against the former borrower following a foreclosure to the excess of the
outstanding debt over the fair market value of the property at the time of the
public sale. The purpose of these statutes is usually to prevent a beneficiary,
grantee, or a mortgagee from obtaining a large deficiency judgment against the
former borrower as a result of low or no bids at the judicial sale. Various
state laws also place a limitation on the mortgagee for late payment charges.

     For mortgage loans secured by collateral in addition to the related
mortgaged properties, realization on the additional collateral may be governed
by the UCC in effect under the law of the state applicable thereto. Some courts
have interpreted the UCC to prohibit or limit a deficiency award in a number of
circumstances, including those in which the disposition of the collateral was
not conducted in a commercially reasonable manner. In some states, the UCC does
not apply to liens on additional collateral consisting of various types of
personal property, including, for example, bank accounts and, to some extent,
insurance policies and annuities. Realization on that additional collateral
will be governed by state laws applicable to that additional collateral rather
than by the UCC, and the availability of deficiency awards under those state
laws may be limited. Whether realization on any Additional Collateral is
governed by the UCC or by other state laws, the ability of secured parties to
realize on the additional collateral may be limited by statutory prohibitions
that limit remedies for the related mortgage loans. Those prohibitions may
affect secured parties either independently or in conjunction with statutory
requirements that secured parties proceed against the related mortgaged
properties first or against both of those mortgaged properties and the
additional collateral concurrently. Some state statutes require secured parties
to exhaust the security afforded by the mortgaged properties through
foreclosure before attempting to realize on the related additional collateral,
including any third-party guarantees. Other state statutes require secured
parties to foreclose on mortgaged properties and additional collateral
concurrently. In states where statutes limit the rights of secured parties to
obtain deficiency judgments against borrowers or guarantors following
foreclosure on the related mortgaged properties and where secured parties
either are required or elect to proceed against those mortgaged properties
before proceeding against the related additional collateral, limitations on the
amounts of deficiency judgments may reduce the amounts that may be realized by
the secured parties on the disposition of that additional collateral. Further,
in some states where secured parties may choose whether to proceed against the
related mortgaged properties or additional collateral first or against both
concurrently, the secured parties, following a proceeding against one, may be
deemed to have elected a remedy and may be precluded from exercising remedies
for the other. Consequently, the practical effect of the election requirement,
in those states permitting that election, is that secured parties will usually
proceed against both concurrently or against the mortgaged properties first if
prohibited from proceeding against both by state law.

     For Cooperative Loans. In most cases, lenders realize on cooperative
shares and the accompanying proprietary lease given to secure a Cooperative
Loan under Article 9 of the UCC. Some courts have interpreted section 9-504 of
the UCC to prohibit a deficiency award unless the creditor establishes that the
sale of the collateral, which, in the case of a Cooperative Loan, would be the
shares of the Cooperative and the related proprietary lease or occupancy
agreement, was conducted in a commercially reasonable manner.

     Federal Bankruptcy and Other Laws Affecting Creditor's Rights. In addition
to laws limiting or prohibiting deficiency judgments, numerous other federal
and state statutory provisions, including the federal bankruptcy laws, the
Relief Act, and state laws affording relief to debtors, may interfere with or
affect the ability of the secured lender to realize on collateral and/or
enforce a deficiency judgment. For example, under the federal bankruptcy law,
all actions against the debtor, the debtor's property and any


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<PAGE>

co-debtor are automatically stayed on the filing of a bankruptcy petition.
Moreover, a court with federal bankruptcy jurisdiction may permit a debtor
through its Chapter 11 or Chapter 13 under the Bankruptcy Code rehabilitative
plan to cure a monetary default of a loan on a debtor's residence by paying
arrearages within a reasonable time period and reinstating the original loan
payment schedule even though the lender accelerated the mortgage loan and final
judgment of foreclosure had been entered in state court, provided no sale of
the residence had yet occurred, prior to the filing of the debtor's petition.
Some courts with federal bankruptcy jurisdiction have approved plans, based on
the particular facts of the reorganization case, that effected the curing of a
mortgage loan default by permitting the borrower to pay arrearages over a
number of years.

     Courts with federal bankruptcy jurisdiction have also indicated that the
terms of a mortgage loan secured by property which is not the principal
residence of the debtor may be modified. These courts have allowed
modifications that include reducing the amount of each monthly payment,
changing the rate of interest, altering the repayment schedule, forgiving all
or a portion of the debt and reducing the lender's security interest to the
value of the residence, thus leaving the lender a general unsecured creditor
for the difference between the value of the residence and the outstanding
balance of the loan. Federal bankruptcy law and limited case law indicate that
the foregoing modifications could not be applied to the terms of a loan secured
by property that is the principal residence of the debtor. In all cases, the
secured creditor is entitled to the value of its security plus post-petition
interest, attorney's fees and costs to the extent the value of the security
exceeds the debt. Therefore, for any Additional Collateral Loan secured by
property of the debtor in addition to the debtor's principal residence, courts
with federal bankruptcy jurisdiction may reduce the amount of each monthly
payment, change the rate of interest, alter the repayment schedule, forgive all
or a portion of the debt, reduce the lender's security interest to the value of
the collateral and otherwise subject that mortgage loan to the cramdown
provisions of Chapter 13.

     In a Chapter 11 case under the Bankruptcy Code, the lender is precluded
from foreclosing without authorization from the bankruptcy court. The lender's
lien may be transferred to other collateral and/or be limited in amount to the
value of the lender's interest in the collateral as of the date of the
bankruptcy. The loan term may be extended, the interest rate may be adjusted to
market rates and the priority of the loan may be subordinated to bankruptcy
court-approved financing. The bankruptcy court can, in effect, invalidate
due-on-sale clauses through confirmed Chapter 11 plans of reorganization.

     The Bankruptcy Code provides priority to tax liens over the lender's
security. This may delay or interfere with the enforcement of rights relating
to a defaulted loan. In addition, substantive requirements are imposed on
lenders in connection with the origination and the servicing of mortgage loans
by numerous federal and some state consumer protection laws. The laws include
the federal Truth-in-Lending Act, Real Estate Settlement Procedures Act, Equal
Credit Opportunity Act, Fair Credit Billing Act, Fair Credit Reporting Act and
related statutes and regulations. These federal laws impose specific statutory
liabilities on lenders who originate loans and who fail to comply with the
provisions of the law. In some cases, this liability may affect assignees of
the loans. For mortgage loans secured by collateral in addition to the related
mortgaged properties, those tax liens may in some circumstances provide
priority over the lien on that additional collateral.

     Some of the mortgage loans known as high cost loans may be subject to
special rules, disclosure requirements and other provisions that were added to
the federal Truth-in-Lending Act by the Homeownership and Equity Protection Act
of 1994, if those mortgage loans were originated on or after October 1, 1995,
are not mortgage loans made to finance the purchase of the mortgaged property
and have interest rates or origination costs in excess of prescribed levels.
Purchasers or assignees of any high cost loan could be liable for all claims
and subject to all defenses arising under those provisions that the borrower
could assert against the originator of that high cost loan. Remedies available
to the borrower include monetary penalties, as well as rescission rights if the
appropriate disclosures were not given as required. See "Loan Underwriting
Procedures and Standards--Representations and Warranties."


LEASEHOLD CONSIDERATIONS

     Mortgage loans may contain leasehold mortgages which are each secured by a
lien on the related mortgagor's leasehold interest in the related mortgaged
property. Mortgage loans secured by a lien on the


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<PAGE>

borrower's leasehold interest under a ground lease are subject to various risks
not associated with mortgage loans secured by a lien on the fee estate of the
borrower. The most significant of these risks is that if the borrower's
leasehold were to be terminated, for example, as a result of a lease default or
the bankruptcy of the ground lessor or the borrower/ground lessee. The
leasehold mortgagee would be left without its security. IN THE CASE OF EACH
MORTGAGE LOAN SECURED BY A LIEN ON THE RELATED MORTGAGOR'S LEASEHOLD INTEREST
UNDER A GROUND LEASE, THAT GROUND LEASE CONTAINS PROVISIONS PROTECTIVE OF THE
LEASEHOLD MORTGAGEE. THESE PROVISIONS INCLUDE A PROVISION THAT REQUIRES THE
GROUND LESSOR TO GIVE THE LEASEHOLD MORTGAGEE NOTICES OF LESSEE DEFAULTS AND AN
OPPORTUNITY TO CURE THEM, A PROVISION THAT PERMITS THE LEASEHOLD ESTATE TO BE
ASSIGNED TO THE LEASEHOLD MORTGAGEE OR THE PURCHASER AT A FORECLOSURE SALE AND
AFTER THAT ASSIGNMENT TO BE ASSIGNED BY THE LEASEHOLD MORTGAGEE OR THAT
PURCHASER AT A FORECLOSURE SALE TO ANY FINANCIALLY RESPONSIBLE THIRD PARTY THAT
EXECUTES AN AGREEMENT OBLIGATING ITSELF TO COMPLY WITH THE TERMS AND CONDITIONS
OF THE GROUND LEASE AND A PROVISION THAT GIVES THE LEASEHOLD MORTGAGEE THE
RIGHT TO ENTER INTO A NEW GROUND LEASE WITH THE GROUND LESSOR ON THE SAME TERMS
AND CONDITIONS AS THE OLD GROUND LEASE ON ANY TERMINATION OF THE OLD GROUND
LEASE.


SOLDIERS' AND SAILORS' CIVIL RELIEF ACT

     Under the terms of the Soldiers' and Sailors' Civil Relief Act of 1940, as
amended, or Relief Act, a mortgagor who enters military service after the
origination of that mortgagor's mortgage loan, including a mortgagor who was in
reserve status and is called to active duty after origination of the mortgage
loan, may not be charged interest, including fees and charges, above an annual
rate of 6% during the period of that mortgagor's active duty status, unless a
court orders otherwise on application of the lender. The Relief Act applies to
mortgagors who are members of the Air Force, Army, Marines, Navy, National
Guard, Reserves, Coast Guard, and officers of the U.S. Public Health Service
assigned to duty with the military. Because the Relief Act applies to
mortgagors who enter military service, including reservists who are called to
active duty, after origination of the related mortgage loan, no information can
be provided as to the number of loans that may be affected by the Relief Act.
Application of the Relief Act would adversely affect, for an indeterminate
period of time, the ability of the master servicer to collect full amounts of
interest on some of the mortgage loans. Any shortfall in interest collections
resulting from the application of the Relief Act or similar legislation or
regulations, which would not be recoverable from the related mortgage loans,
would result in a reduction of the amounts distributable to the holders of the
related certificates, and would not be covered by Advances and may not be
covered by the applicable form of credit enhancement provided in connection
with the related series of certificates. In addition, the Relief Act imposes
limitations that would impair the ability of the master servicer to foreclose
on an affected mortgage loan during the mortgagor's period of active duty
status, and, under some circumstances, during an additional three month period
after that period of active duty status. Thus, in the event that the Relief Act
or similar legislation or regulations applies to any mortgage loan which goes
into default, there may be delays in payment and losses on the related
certificates in connection with those certificates. Any other interest
shortfalls, deferrals or forgiveness of payments on the mortgage loans
resulting from similar legislation or regulations may result in delays in
payments or losses to securityholders of the related series.


JUNIOR MORTGAGES; RIGHTS OF SENIOR MORTGAGEES

     Some of the mortgage loans may be secured by junior mortgages, deeds of
trust or deeds to secure debt, which are junior to senior mortgages, deeds of
trust or deeds to secure debt which are not part of the trust. The rights of
the securityholders, as the holders of a junior mortgage, are subordinate to
those of the mortgagee under the senior mortgage, including the prior rights of
the senior mortgagee to receive hazard insurance and condemnation proceeds and
to cause the property securing the mortgage loan to be sold on default of the
mortgagor, which may extinguish the junior mortgagee's lien unless the junior
mortgagee asserts its subordinate interest in the property in foreclosure
litigation and, in some cases, either reinstates or satisfies the defaulted
senior loan or loans. A junior mortgagee may satisfy a defaulted senior loan in
full or, in some states, may cure that default and bring the senior loan
current, and as a result, reinstating the senior loan, in either event usually
adding the amounts expended to the balance due on the junior loan. In most
states, absent a provision in the mortgage or deed of trust, no notice of
default


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is required to be given to a junior mortgagee. Where applicable law or the
terms of the senior mortgage or deed of trust do not require notice of default
to the junior mortgagee, the lack of that notice may prevent the junior
mortgagee from exercising any right to reinstate the loan which applicable law
may provide.

     The standard form of the mortgage or deed of trust used by most
institutional lenders confers on the mortgagee the right both to receive all
proceeds collected under any hazard insurance policy and all awards made in
connection with condemnation proceedings, and to apply those proceeds and
awards to any indebtedness secured by the mortgage or deed of trust, in the
order as the mortgagee may determine. Thus, in the event improvements on the
property are damaged or destroyed by fire or other casualty, or in the event
the property is taken by condemnation, the mortgagee or beneficiary under the
underlying senior mortgages will have the prior right to collect any insurance
proceeds payable under a hazard insurance policy and any award of damages in
connection with the condemnation and to apply the same to the indebtedness
secured by the senior mortgages. Proceeds in excess of the amount of senior
mortgage indebtedness, in most cases, may be applied to the indebtedness of
junior mortgages in the order of their priority.

     Another provision sometimes found in the form of the mortgage or deed of
trust used by institutional lenders obligates the mortgagor to pay before
delinquency all taxes and assessments on the property and, when due, all
encumbrances, charges and liens on the property which are prior to the mortgage
or deed of trust, to provide and maintain fire insurance on the property, to
maintain and repair the property and not to commit or permit any waste of that
property, and to appear in and defend any action or proceeding purporting to
affect the property or the rights of the mortgagee under the mortgage. In the
case of a failure of the mortgagor to perform any of these obligations, the
mortgagee or beneficiary is given the right under some mortgages or deeds of
trust to perform the obligation itself, at its election, with the mortgagor
agreeing to reimburse the mortgagee for any sums expended by the mortgagee on
behalf of the mortgagor. All sums so expended by a senior mortgagee become part
of the indebtedness secured by the senior mortgage.

     When the mortgagor encumbers mortgaged property with one or more junior
liens, the senior lender is subjected to additional risk. First, the mortgagor
may have difficulty servicing and repaying multiple loans. In addition, if the
junior loan permits recourse to the mortgagor, as junior loans often do, and
the senior loan does not, a mortgagor may be more likely to repay sums due on
the junior loan than those on the senior loan. Second, acts of the senior
lender that prejudice the junior lender or impair the junior lender's security
may create a superior equity in favor of the junior lender. For example, if the
mortgagor and the senior lender agree to an increase in the principal amount of
or the interest rate payable on the senior loan, the senior lender may lose its
priority to the extent an existing junior lender is harmed or the mortgagor is
additionally burdened. Third, if the mortgagor defaults on the senior loan
and/or any junior loan or loans, the existence of junior loans and actions
taken by junior lenders can impair the security available to the senior lender
and can interfere with or delay the taking of action by the senior lender.
Moreover, the bankruptcy of a junior lender may operate to stay foreclosure or
similar proceeds by the senior lender.


DUE-ON-SALE CLAUSES IN MORTGAGE LOANS

     In most cases, the loans contain due-on-sale clauses. These clauses permit
the lender to accelerate the maturity of the loan if the borrower sells,
transfers or conveys the property without the prior consent of mortgagee. The
enforceability of these clauses has been the subject of legislation or
litigation in many states, and in some cases the enforceability of these
clauses has been limited or denied. However, the Garn-St Germain Depository
Institutions Act of 1982, or Garn-St Germain Act, preempts state
constitutional, statutory and case law that prohibit the enforcement of
due-on-sale clauses and permits lenders to enforce these clauses in accordance
with their terms, subject to some limited exceptions. The Garn-St Germain Act
does "encourage" lenders to permit assumption of loans at the original rate of
interest or at some other rate less than the average of the original rate and
the market rate.

     The Garn-St Germain Act also provides nine specific instances in which a
mortgage lender covered by the Garn-St Germain Act may not exercise a
due-on-sale clause, in spite of the fact that a transfer of


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the property may have occurred. These include intra-family transfers, various
transfers by operation of law, leases of fewer than three years and the
creation of a junior encumbrance. Regulations promulgated under the Garn-St
Germain Act also prohibit the imposition of a prepayment penalty on the
acceleration of a loan under a due-on-sale clause.

     The inability to enforce a due-on-sale clause may result in a mortgage
loan bearing an interest rate below the current market rate being assumed by a
new home buyer rather than being paid off, which may have an impact on the
average life of the mortgage loans and the number of mortgage loans which may
be outstanding until maturity.


ENFORCEABILITY OF PREPAYMENT AND LATE PAYMENT FEES

     Forms of notes, mortgages and deeds of trust used by lenders may contain
provisions obligating the borrower to pay a late charge if payments are not
timely made, and in some circumstances may provide for prepayment fees or
penalties if the obligation is paid prior to maturity. In addition to
limitations imposed by FHA Regulations for contacts partially insured by the
FHA under Title I, in some states, there are or may be specific limitations on
the late charges that a lender may collect from a borrower for delinquent
payments. In some states, there are or may be specific limitations on the late
charges which a lender may collect from a borrower for delinquent payments.
Some states also limit the amounts that a lender may collect from a borrower as
an additional charge if the loan is prepaid. Late charges and prepayment fees
are typically retained by servicers as additional servicing compensation. In
addition, the enforceability of provisions that provide for prepayment fees or
penalties on an involuntary prepayment is unclear under the laws of many
states. Most conventional single-family mortgage loans may be prepaid in full
or in part without penalty. The regulations of the Federal Home Loan Bank
Board, as succeeded by the Office of Thrift Supervision, or OTS, prohibit the
imposition of a prepayment penalty or equivalent fee for or in connection with
the acceleration of a loan by exercise of a due-on-sale clause. A mortgagee to
whom a prepayment in full has been tendered may be compelled to give either a
release of the mortgage or an instrument assigning the existing mortgage. The
absence of a restraint on prepayment, particularly for mortgage loans having
higher mortgage rates, may increase the likelihood of refinancing or other
early retirements of the mortgage loans.


EQUITABLE LIMITATIONS ON REMEDIES

     In connection with lenders' attempts to realize on their security, courts
have invoked general equitable principles. In most cases, the equitable
principles are designed to relieve the borrower from the legal effect of his
defaults under the loan documents. Examples of judicial remedies that have been
fashioned include judicial requirements that the lender undertake affirmative
and expensive actions to determine the causes for the borrower's default and
the likelihood that the borrower will be able to reinstate the loan. In some
cases, courts have substituted their judgment for the lender's judgment and
have required that lenders reinstate loans or recast payment schedules in order
to accommodate borrowers who are suffering from temporary financial disability.
In other cases, courts have limited the right of a lender to realize on his
security if the default under the security agreement is not monetary, such as
the borrower's failure to adequately maintain the property or the borrower's
execution of secondary financing affecting the property. Finally, some courts
have been faced with the issue of whether or not federal or state
constitutional provisions reflecting due process concerns for adequate notice
require that borrowers under security agreements receive notices in addition to
the statutorily-prescribed minimums. For the most part, these cases have upheld
the notice provisions as being reasonable or have found that, in cases
involving the sale by a trustee under a deed of trust or by a mortgagee under a
mortgage having a power of sale, there is insufficient state action to afford
constitutional protections to the borrower.


APPLICABILITY OF USURY LAWS

     Title V of the Depository Institutions Deregulation and Monetary Control
Act of 1980, enacted in March 1980 , or Title V, provides that state usury
limitations shall not apply to some types of residential first mortgage loans
originated by some lenders after March 31, 1980. Similar federal statutes were
in effect for mortgage loans made during the first three months of 1980. The
OTS, as successor to the Federal


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Home Loan Bank Board, is authorized to issue rules and regulations and to
publish interpretations governing implementation of Title V. Title V authorizes
any state to impose interest rate limits by adopting, before April 1, 1983, a
law, or constitutional provision, which expressly rejects an application of the
federal law. In addition, even where Title V is not so rejected, any state is
authorized by the law to adopt a provision limiting discount points or other
charges on mortgage loans covered by Title V. Some states have taken action to
reimpose interest rate limits or to limit discount points or other charges.

     Usury limits apply to junior mortgage loans in many states.


ADJUSTABLE INTEREST RATE LOANS

     Alternative mortgage instruments, including adjustable rate mortgage loans
and adjustable rate cooperative loans, and early ownership mortgage loans,
originated by non-federally chartered lenders have historically been subjected
to a variety of restrictions. Those restrictions differed from state to state,
resulting in difficulties in determining whether a particular alternative
mortgage instrument originated by a state-chartered lender complied with
applicable law. These difficulties were alleviated substantially as a result of
the enactment of Title VIII of the Garn-St Germain Act, or Title VIII. Title
VIII provides that, regardless of any state law to the contrary,
state-chartered banks may originate "alternative mortgage instruments",
including ARM loans, in accordance with regulations promulgated by the
Comptroller of the Currency for origination of alternative mortgage instruments
by national banks. State chartered credit unions may originate alternative
mortgage instruments in accordance with regulations promulgated by the National
Credit Union Administration, or NCUA, for origination of alternative mortgage
instruments by federal credit unions and all other non-federally chartered
housing creditors, including state-chartered savings and loan associations.
State-chartered savings banks and mortgage banking companies may originate
alternative mortgage instruments in accordance with the regulations promulgated
by the Federal Home Loan Bank Board, as succeeded by the OTS, for origination
of alternative mortgage instruments by federal savings and loan associations.
Title VIII provides that any state may reject applicability of the provisions
of Title VIII by adopting, prior to October 15, 1985, a law or constitutional
provision expressly rejecting the applicability of those provisions. Some
states have taken this action.


ENVIRONMENTAL LEGISLATION

     Under Comprehensive Environmental Response, Compensation and Liability Act
of 1980, or CERCLA, and under state law in some states, a lender or secured
creditor may become liable in some circumstances for the costs of cleaning up
hazardous substances regardless of whether it has contaminated the property.
CERCLA imposes strict, as well as joint and several liability on several
classes of potentially responsible parties, including current owners and
operators of the property who did not cause or contribute to the contamination.
Furthermore, liability under CERCLA is not limited to the original or
unamortized principal balance of a loan or to the value of the property
securing a loan.

     The Asset Conservation, Lender Liability and Deposit Insurance Act of
1996, or Conservation Act amended, among other things, the provisions of CERCLA
for lender liability and the secured creditor exemption. The Conservation Act
offers substantial protection to lenders by defining the activities in which a
lender can engage and still have the benefit of the secured creditor exemption.
In order for a lender to be deemed to have participated in the management of a
mortgaged property, the lender must actually participate in the operational
affairs of the mortgaged property. The Conservation Act provides that merely
having the capacity to influence, or unexercised right to control operations
does not constitute participation in management. A lender will lose the
protection of the secured creditor exemption only if it exercises
decision-making control over the borrower's environmental compliance and
hazardous substance handling and disposal practices, or assumes day-to-day
management of substantially all of the operational functions of the mortgaged
property. The Conservation Act also provides that a lender will continue to
have the benefit of the secured creditor exemption even if it forecloses on a
mortgaged property, purchases it at a foreclosure sale or accepts a
deed-in-lieu of foreclosure provided that the lender seeks to sell the
mortgaged property at the earliest practicable commercially reasonable time on
commercially reasonable terms.


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     In addition to CERCLA, other federal and state laws in some circumstances
may also impose liability on a secured party for a mortgaged property on which
contaminants other than CERCLA hazardous substances are present, including
petroleum, agricultural chemicals, asbestos, radon, and lead-based paint. In
all such circumstances, such cleanup costs may be substantial. It is possible
that those cleanup costs could become a liability of a Trust and reduce the
amounts otherwise distributable to the holders of the related series of
certificates. Some federal statutes and some states by statute impose an
Environmental Lien. All subsequent liens on that property, in most cases, are
subordinated to the Environmental Lien and, in some states, even prior recorded
liens are subordinated to Environmental Liens. In the latter states, the
security interest of the trustee in a related parcel of real property that is
subject to the Environmental Lien could be adversely affected.

     Traditionally, many residential mortgage lenders have not taken steps to
evaluate whether contaminants are present on any mortgaged property prior to
the origination of the mortgage loan or prior to foreclosure or accepting a
deed-in-lieu of foreclosure. Accordingly, the depositor has not made and will
not make those evaluations prior to the origination of the secured loans.
Neither the depositor nor any replacement servicer will be required by any
agreement to undertake those evaluations prior to foreclosure or accepting a
deed-in-lieu of foreclosure. The depositor does not make any representations or
warranties or assume any liability for the absence or effect of contaminants on
any related real property or any casualty resulting from the presence or effect
of contaminants. However, the depositor will not be obligated to foreclose on
related real property or accept a deed-in-lieu of foreclosure if it knows or
reasonably believes that there are material contaminated conditions on that
property. A failure so to foreclose may reduce the amounts otherwise available
to securityholders of the related series.


FORFEITURES IN DRUG AND RICO PROCEEDINGS

     Federal law provides that property owned by persons convicted of
drug-related crimes or of criminal violations of the Racketeer Influenced and
Corrupt Organizations, or RICO, statute can be seized by the government if the
property was used in, or purchased with the proceeds of, those crimes. Under
procedures contained in the Comprehensive Crime Control Act of 1984, Crime
Control Act, the government may seize the property even before conviction. The
government must publish notice of the forfeiture proceeding and may give notice
to all parties "known to have an alleged interest in the property," including
the holders of mortgage loans.

     A lender may avoid forfeiture of its interest in the property if it
establishes that:

      o  its mortgage was executed and recorded before the commission of the
         crime on which the forfeiture is based, or

      o  the lender was, at the time of the execution of the mortgage,
         "reasonably without cause to believe" that the property was used in, or
         purchased with the proceeds of, illegal drug or RICO activities.


NEGATIVE AMORTIZATION LOANS

     A recent case decided by the United States Court of Appeals, First
Circuit, held that state restrictions on the compounding of interest are not
preempted by the provisions of the Depository Institutions Deregulation and
Monetary Control Act of 1980, or DIDMC, and as a result, remanded to the United
States District Court for the District of New Hampshire for further proceedings
to determine whether a mortgage loan that provided for negative amortization
violated New Hampshire's requirement that first mortgage loans provide for
computation of interest on a simple interest basis. The holding was limited to
the effect of DIDMC on state laws regarding the compounding of interest and the
court did not address the applicability of the Alternative Mortgage Transaction
Parity Act of 1982, which authorizes a lender to make residential mortgage
loans that provide for negative amortization. As a result, the enforceability
of compound interest on mortgage loans that provide for negative amortization
is unclear. The First Circuit's decision is binding authority only on Federal
District Courts in Maine, New Hampshire, Massachusetts, Rhode Island and Puerto
Rico.


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                   MATERIAL FEDERAL INCOME TAX CONSEQUENCES


GENERAL

     The following is a general discussion of the anticipated material federal
income tax consequences of the purchase, ownership and disposition of the
certificates and notes offered under this prospectus where Thacher Proffitt &
Wood, Brown & Wood LLP or Stroock & Stroock & Lavan LLP is identified in the
applicable prospectus supplement as counsel to the depositor. This discussion
is directed solely to securityholders that hold the securities as capital
assets within the meaning of Section 1221 of the Internal Revenue Code, and
does not purport to discuss all federal income tax consequences that may be
applicable to particular categories of investors, such as banks, insurance
companies and foreign investors, some of which may be subject to special rules.
Further, the authorities on which this discussion, and the opinion referred to
under "REMICs--Classification of REMICs", are based are subject to change or
differing interpretations, which could apply retroactively. Taxpayers and
preparers of tax returns, including those filed by any REMIC or other issuer,
should be aware that under applicable Treasury regulations a provider of advice
on specific issues of law is not considered an income tax return preparer
unless the advice:

    o is given for events that have occurred at the time the advice is
      rendered and is not given for the consequences of contemplated actions,
      and

    o is directly relevant to the determination of an entry on a tax return.

     Accordingly, taxpayers should consult their own tax advisors and tax
return preparers regarding the preparation of any item on a tax return, even
where the anticipated tax treatment has been discussed in this prospectus. In
addition to the federal income tax consequences described in this prospectus,
potential investors should consider the state and local tax consequences, if
any, of the purchase, ownership and disposition of the securities. See "State
and Other Tax Consequences." Securityholders are advised to consult their own
tax advisors concerning the federal, state, local or other tax consequences to
them of the purchase, ownership and disposition of the certificates offered
under this prospectus.

     The following discussion addresses securities of two general types:

    o REMIC certificates representing interests in a trust that the Trustee
      will elect to have treated as a "real estate mortgage investment
      conduit", or REMIC, under Sections 860A through 860G of the Internal
      Revenue Code, or the REMIC Provisions, and

    o notes representing indebtedness of the issuer for federal income tax
      purposes.

     The prospectus supplement for each series of securities will indicate
which of the foregoing treatments will apply to that series.


REMICS

     In most cases, as to each series of certificates, the trustee will
covenant to elect to treat the trust, or a portion of that trust, as one or
more REMICs. The prospectus supplement for each series of certificates will
identify all certificates representing "regular interests" and the "residual
interest" in that REMIC. If a REMIC election or elections will not be made for
a trust or some assets of a trust, the federal income tax consequences of the
purchase, ownership and disposition of the related certificates will be
described in the related prospectus supplement if those certificates are
offered by that prospectus supplement.

     The following discussion is based in part on the rules governing original
issue discount that are presented in Sections 1271-1273 and 1275 of the
Internal Revenue Code and in the Treasury regulations issued under those
sections, or the OID Regulations, and in part on the REMIC Provisions and the
Treasury regulations issued under the REMIC Provisions, which together are
referred to as the REMIC Regulations. The OID Regulations do not adequately
address all issues relevant to, and in some instances provide that they are not
applicable to, securities such as the certificates.


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 Classification of REMICs

     At the time of the issuance of each series of REMIC certificates, counsel
to the depositor will deliver its opinion to the effect that, assuming
compliance with all provisions of the related pooling and servicing agreement,
the related trust, or each applicable portion of that trust, will qualify as a
REMIC and the REMIC certificates offered under that REMIC will be considered to
evidence ownership of regular interests or residual interests in that REMIC
within the meaning of the REMIC Provisions.

     If an entity electing to be treated as a REMIC fails to comply with one or
more of the ongoing requirements of the Internal Revenue Code for that status
during any taxable year, the Internal Revenue Code provides that the entity
will not be treated as a REMIC for that year and after that year. In that
event, the entity may be taxable as a corporation under Treasury regulations,
and the related REMIC certificates may not be accorded the status or given the
tax treatment described under "--Characterization of Investments in REMIC
Certificates." Although the Internal Revenue Code authorizes the Treasury
Department to provide relief in the event of an inadvertent termination of
REMIC status, no regulations have been issued implementing this provision. That
relief, moreover, may be accompanied by sanctions, such as the imposition of a
corporate tax on all or a portion of the trust's income for the period in which
the requirements for that status are not satisfied. The pooling and servicing
agreement for each REMIC will include provisions designed to maintain the
trust's status as a REMIC under the REMIC Provisions.


 Characterization of Investments in REMIC Certificates

     In most cases, the REMIC certificates will be "real estate assets" within
the meaning of Section 856(c)(4)(A) of the Internal Revenue Code and assets
described in Section 7701(a)(19)(C) of the Internal Revenue Code in the same
proportion that the assets of the REMIC underlying those certificates would be
so treated. Moreover, if 95% or more of the assets of the REMIC qualify for any
of the foregoing treatments at all times during a calendar year, the REMIC
certificates will qualify for the corresponding status in their entirety for
that calendar year. Interest, including original issue discount, on the REMIC
regular certificates and income allocated to the REMIC residual certificates
will be interest described in Section 856(c)(3)(B) of the Internal Revenue Code
to the extent that those certificates are treated as "real estate assets"
within the meaning of Section 856(c)(4)(A) of the Internal Revenue Code. The
determination as to the percentage of the REMIC's assets that constitute assets
described in the foregoing sections of the Internal Revenue Code will be made
for each calendar quarter based on the average adjusted basis of each category
of the assets held by the REMIC during that calendar quarter. The REMIC will
report those determinations to certificateholders in the manner and at the
times required by applicable Treasury regulations. In addition, the REMIC
regular certificates will be "qualified mortgages" within the meaning of
Section 860G(a)(3) of the Internal Revenue Code if transferred to a REMIC on
that REMIC's startup day in exchange for regular or residual interests in that
REMIC.

     The assets of the REMIC will include, in addition to loans, payments on
loans, including temporary investments of those proceeds, held pending
distribution on the REMIC certificates and may include property acquired by
foreclosure held pending sale, a nd amounts in reserve accounts. It is unclear
whether property acquired by foreclosure held pending sale, or amounts in
reserve accounts would be considered to be part of the loans, or whether those
assets, to the extent not invested in assets described in the foregoing
sections, otherwise would receive the same treatment as the loans for purposes
of the foregoing sections. In addition, in some instances loans, including
Additional Collateral Loans, may not be treated entirely as assets described in
the foregoing sections. If the assets of a REMIC include Additional Collateral
Loans, the non-real property collateral, while itself not an asset of the
REMIC, could cause the loans not to qualify for one or more of those
characterizations. If so, the related prospectus supplement will describe the
loans, including Additional Collateral Loans, that may not be so treated. The
REMIC regulations do provide, however, that payments on loans held pending
distribution are considered part of the loans for purposes of Section
856(c)(4)(A) of the Internal Revenue Code.


 Tiered REMIC Structures

     For some series of REMIC certificates, two or more separate elections may
be made to treat designated portions of the related trust as REMICs for federal
income tax purposes. At the time of the


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issuance of that series of REMIC certificates, counsel to the depositor will
deliver its opinion to the effect that, assuming compliance with all provisions
of the related pooling and servicing agreement, the tiered REMICs will each
qualify as a REMIC and the REMIC certificates issued by the tiered REMICs will
be considered to evidence ownership of REMIC regular interests or REMIC
residual interests in the related REMIC within the meaning of the REMIC
Provisions.

     Solely for purposes of determining whether the REMIC certificates will be
"real estate assets" within the meaning of Section 856(c)(4)(A) of the Internal
Revenue Code, and "loans secured by an interest in real property" under Section
7701(a)(19)(C) of the Internal Revenue Code, and whether the income on those
certificates is interest described in Section 856(c)(3)(B) of the Internal
Revenue Code, the tiered REMICs will be treated as one REMIC.


  TAXATION OF OWNERS OF REMIC REGULAR CERTIFICATES


  General

     Except as otherwise stated in this discussion, REMIC regular certificates
will be treated for federal income tax purposes as debt instruments issued by
the REMIC and not as ownership interests in the REMIC or its assets. Moreover,
holders of REMIC regular certificates that otherwise report income under a cash
method of accounting will be required to report income for REMIC regular
certificates under an accrual method.


  Original Issue Discount

     Some REMIC regular certificates may be issued with "original issue
discount" within the meaning of Section 1273(a) of the Internal Revenue Code.
Any holders of REMIC regular certificates issued with original issue discount,
in most cases, will be required to include original issue discount in income as
it accrues, in accordance with the "constant yield" method described in this
section, in advance of the receipt of the cash attributable to that income. In
addition, Section 1272(a)(6) of the Internal Revenue Code provides special
rules applicable to REMIC regular certificates and some other debt instruments
issued with original issue discount. Regulations have not been issued under
that section.

     The Internal Revenue Code requires that a reasonable prepayment assumption
be used for loans held by, or loans underlying mortgage assets held by, a REMIC
in computing the accrual of original issue discount on REMIC regular
certificates issued by that REMIC, and that adjustments be made in the amount
and rate of accrual of that discount to reflect differences between the actual
prepayment rate and the prepayment assumption. The prepayment assumption is to
be determined in a manner prescribed in Treasury regulations; as noted above,
those regulations have not been issued. The Committee Report accompanying the
Tax Reform Act of 1986 indicates that the regulations will provide that the
prepayment assumption used for a REMIC regular certificate must be the same as
that used in pricing the initial offering of that REMIC regular certificate.
The prepayment assumption used in reporting original issue discount for each
series of REMIC regular certificates will be consistent with this standard and
will be disclosed in the related prospectus supplement. However, neither the
depositor, any master servicer nor the trustee will make any representation
that the loans will in fact prepay at a rate conforming to the prepayment
assumption or at any other rate.

     The original issue discount, if any, on a REMIC regular certificate will
be the excess of its stated redemption price at maturity over its issue price.
The issue price of a particular class of REMIC regular certificates will be the
first cash price at which a substantial amount of REMIC regular certificates of
that class is sold, excluding sales to bond houses, brokers and underwriters.
If less than a substantial amount of a particular class of REMIC regular
certificates is sold for cash on or prior to the closing date, the issue price
for that class will be the fair market value of that class on the closing date.
Under the OID Regulations, the stated redemption price of a REMIC regular
certificate is equal to the total of all payments to be made on that
certificate other than "qualified stated interest." "Qualified stated interest"
is interest that is unconditionally payable at least annually, during the
entire term of the instrument, at a single fixed rate, at a "qualified floating
rate," an "objective rate," a combination of a single fixed rate and


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<PAGE>

one or more "qualified floating rates" or one "qualified inverse floating
rate," or a combination of "qualified floating rates" that does not operate in
a manner that accelerates or defers interest payments on that REMIC regular
certificate.


     In the case of REMIC regular certificates bearing adjustable interest
rates, the determination of the total amount of original issue discount and the
timing of the inclusion that amount will vary according to the characteristics
of that REMIC regular certificates. If the original issue discount rules apply
to those certificates, the related prospectus supplement will describe the
manner in which those rules will be applied to those certificates in preparing
information returns to the certificateholders and the IRS.


     In addition, if the accrued interest to be paid on the first distribution
date is computed for a period that begins prior to the closing date, a portion
of the purchase price paid for a REMIC regular certificate will reflect that
accrued interest. In those cases, information returns provided to the
certificateholders and the IRS will be based on the position that the portion
of the purchase price paid for the interest accrued for periods prior to the
closing date is treated as part of the overall cost of that REMIC regular
certificate, and not as a separate asset the cost of which is recovered
entirely out of interest received on the next distribution date, and that the
portion of the interest paid on the first distribution date in excess of
interest accrued for a number of days corresponding to the number of days from
the closing date to the first distribution date should be included in the
stated redemption price of that REMIC regular certificate. However, the OID
Regulations state that all or some portion of that accrued interest may be
treated as a separate asset the cost of which is recovered entirely out of
interest paid on the first distribution date. It is unclear how an election to
do so would be made under the OID Regulations and whether that election could
be made unilaterally by a certificateholder.


     In spite of the general definition of original issue discount, original
issue discount on a REMIC regular certificate will be considered to be de
minimis if it is less than 0.25% of the stated redemption price of the REMIC
regular certificate multiplied by its weighted average life. For this purpose,
the weighted average life of the REMIC regular certificate is computed as the
sum of the amounts determined, as to each payment included in the stated
redemption price of that REMIC regular certificate, by multiplying:


      o  the number of complete years, rounding down for partial years, from the
         issue date until that payment is expected to be made, presumably taking
         into account the prepayment assumption, by


      o  a fraction, the numerator of which is the amount of payment, and the
         denominator of which is the stated redemption price at maturity of that
         REMIC regular certificate.


Under the OID Regulations, original issue discount of only a de minimis amount,
other than de minimis original issue discount attributable to a so-called
"teaser" interest rate or an initial interest holiday, will be included in
income as each payment of stated principal is made, based on the product of the
total amount of that de minimis original issue discount and a fraction, the
numerator of which is the amount of that principal payment and the denominator
of which is the outstanding stated principal amount of the REMIC regular
certificate. The OID Regulations also would permit a certificateholder to elect
to accrue de minimis original issue discount into income currently based on a
constant yield method. See "Taxation of Owners of REMIC Regular
Certificates--Market Discount" for a description of that election under the OID
Regulations.


     Example. A REMIC regular certificate was issued with a de minimis amount
of original issue discount. A REMIC regular certificate with a stated
redemption price at maturity of $100,000 was issued for $99,261.62 on the
closing date. Unless the holder of the REMIC regular certificate makes the
election described below in "Taxation of Owners of REMIC Regular
Certificates--Market Discount," the holder will include the de minimis original
issue discount amount of $738.38 ($100,000.00--$99,621.62) into income on a pro
rata basis as principal payments on the REMIC regular certificate are received
or, if earlier, on disposition of the REMIC regular certificate. If, for
example, the holder were to receive a stated principal payment of $10,000
during a taxable year, the holder would include $73.84 in income as shown by
the following computation:


                                       85
<PAGE>


<TABLE>
<S>                                                                  <C>            <C>  <C>
   Amount of Principal Payment Received ...........................    $  10,000    =    10%
                                                                       ---------
   Outstanding Stated Principal Amount ............................    $ 100,000
                                                                       $ 738.38
   De Minimis Original Issue Discount Amount ......................          x10%
                                                                       ---------
   Portion of De Minimis Original Issue Discount Amount Included in
     Income .......................................................    $  73.84
                                                                       =========
</TABLE>

     If original issue discount on a REMIC regular certificate is in excess of
a de minimis amount, the holder of that certificate must include in ordinary
gross income the sum of the "daily portions" of original issue discount for
each day during its taxable year on which it held that REMIC regular
certificate, including the purchase date but excluding the disposition date. In
the case of an original holder of a REMIC regular certificate, the daily
portions of original issue discount will be determined as follows.

     In most cases, as to each "accrual period," each period that ends on a
date that corresponds to a distribution date and begins on the first day
following the immediately preceding accrual period, or in the case of that
first period, that period begins on the closing date, a calculation will be
made of the portion of the original issue discount that accrued during that
accrual period. The portion of original issue discount that accrues in any
accrual period will equal the excess, if any, of

      o  the sum of (A) the present value, as of the end of the accrual period,
         of all of the distributions remaining to be made on the REMIC regular
         certificate, if any, in future periods and (B) the distributions made
         on that REMIC regular certificate during the accrual period of amounts
         included in the stated redemption price, over

      o  the adjusted issue price of that REMIC regular certificate at the
         beginning of the accrual period.

The present value of the remaining distributions referred to in the preceding
sentence will be calculated:

      o  assuming that distributions on the REMIC regular certificate will be
         received in future periods based on the loans being prepaid at a rate
         equal to the prepayment assumption, and in the case of mortgage assets
         other than loans, that distributions will be made with for each
         mortgage asset in accordance with the prepayment assumption, if any,
         described in the participation agreement or other organizational
         document under which that mortgage asset was issued, and

      o  using a discount rate equal to the original yield to maturity of the
         certificate.

For these purposes, the original yield to maturity of the certificate will be
calculated based on its issue price and assuming that distributions on the
certificate will be made in all accrual periods based on the loans being
prepaid at a rate equal to the prepayment assumption, and in the case of
mortgage assets other than loans, that distributions will be made for each
mortgage asset in accordance with the participation agreement or other
organizational document under which that mortgage asset was issued. The
adjusted issue price of a REMIC regular certificate at the beginning of any
accrual period will equal the issue price of that certificate, increased by the
aggregate amount of original issue discount that accrued for that certificate
in prior accrual periods, and reduced by the amount of any distributions made
on that REMIC regular certificate in prior accrual periods of amounts included
in the stated redemption price. The original issue discount accruing during any
accrual period, computed as described above, will be allocated ratably to each
day during the accrual period to determine the daily portion of original issue
discount for that day.

     A subsequent purchaser of a REMIC regular certificate that purchases that
certificate at a cost, excluding any portion of that cost attributable to
accrued qualified stated interest, less than its remaining stated redemption
price will also be required to include in gross income the daily portions of
any original issue discount for that certificate. However, that daily portion
will be reduced, if that cost is in excess of the REMIC regular certificate's
"adjusted issue price," in proportion to the ratio that excess bears to the
aggregate original issue discount remaining to be accrued on that REMIC regular
certificate. The adjusted issue price of a REMIC regular certificate on any
given day equals:


                                       86
<PAGE>

      o  the adjusted issue price, or, in the case of the first accrual period,
         the issue price, of that certificate at the beginning of the accrual
         period which includes that day, plus


      o  the daily portions of original issue discount for all days during that
         accrual period prior to that day, minus


      o  any payments of amounts included in the stated redemption price made
         during that accrual period prior to that day for that certificate.


  Market Discount


     A certificateholder that purchases a REMIC regular certificate at a market
discount, that is, in the case of a REMIC regular certificate issued without
original issue discount, at a purchase price less than its remaining stated
principal amount, or in the case of a REMIC regular certificate issued with
original issue discount, at a purchase price less than its adjusted issue price
will recognize gain on receipt of each distribution representing stated
redemption price. In particular, under Section 1276 of the Internal Revenue
Code, that certificateholder in most cases will be required to allocate the
portion of that distribution representing stated redemption price first to
accrued market discount not previously included in income, and to recognize
ordinary income to that extent. A certificateholder may elect to include market
discount in income currently as it accrues rather than including it on a
deferred basis in accordance with the foregoing. If made, that election will
apply to all market discount bonds acquired by that certificateholder on or
after the first day of the first taxable year to which that election applies.
In addition, the OID Regulations permit a certificateholder to elect to accrue
all interest, discount, including de minimis market or original issue discount,
and premium in income as interest, based on a constant yield method. If that
election were made for a REMIC regular certificate with market discount, the
certificateholder would be deemed to have made an election to include currently
market discount in income for all other debt instruments having market discount
that the certificateholder acquires during the taxable year of the election or
after that year. Similarly, a certificateholder that made this election for a
certificate that is acquired at a premium would be deemed to have made an
election to amortize bond premium for all debt instruments having amortizable
bond premium that the certificateholder owns or acquires. See "Taxation of
Owners of REMIC Regular Certificates--Premium." Each of these elections to
accrue interest, discount and premium for a REMIC regular certificate on a
constant yield method or as interest may not be revoked without the consent of
the IRS.


     However, market discount for a REMIC regular certificate will be
considered to be de minimis for purposes of Section 1276 of the Internal
Revenue Code if that market discount is less than 0.25% of the remaining stated
redemption price of that REMIC regular certificate multiplied by the number of
complete years to maturity remaining after the date of its purchase. In
interpreting a similar rule for original issue discount on obligations payable
in installments, the OID Regulations refer to the weighted average maturity of
obligations, and it is likely that the same rule will be applied for market
discount, presumably taking into account the prepayment assumption. If market
discount is treated as de minimis under this rule, it appears that the market
discount would be treated in a manner similar to original issue discount of a
de minimis amount. See "Taxation of Owners of REMIC Regular
Certificates--Original Issue Discount." That treatment may result in market
discount being included in income at a slower rate than market discount would
be required to be included in income using the method described in the
preceding paragraph.


     Section 1276(b)(3) of the Internal Revenue Code specifically authorizes
the Treasury Department to issue regulations providing for the method for
accruing market discount on debt instruments, the principal of which is payable
in more than one installment. Until regulations are issued by the Treasury
Department various rules described in the Committee Report should apply. The
Committee Report indicates that in each accrual period market discount on REMIC
regular certificates accrues, at the certificateholder's option:


      o  on the basis of a constant yield method,


                                       87
<PAGE>

      o  in the case of a REMIC regular certificate issued without original
         issue discount, in an amount that bears the same ratio to the total
         remaining market discount as the stated interest paid in the accrual
         period bears to the total amount of stated interest remaining to be
         paid on the REMIC regular certificate as of the beginning of the
         accrual period, or

      o  in the case of a REMIC regular certificate issued with original issue
         discount, in an amount that bears the same ratio to the total remaining
         market discount as the original issue discount accrued in the accrual
         period bears to the total original issue discount remaining on the
         REMIC regular certificate at the beginning of the accrual period.

Moreover, the prepayment assumption used in calculating the accrual of original
issue discount is also used in calculating the accrual of market discount.
Because the regulations referred to in this paragraph have not been issued, it
is not possible to predict what effect that regulations might have on the tax
treatment of a REMIC regular certificate purchased at a discount in the
secondary market.

     To the extent that REMIC regular certificates provide for monthly or other
periodic distributions throughout their term, the effect of these rules may be
to require market discount to be includible in income at a rate that is not
significantly slower than the rate at which that market discount would accrue
if it were original issue discount. Moreover, in any event a holder of a REMIC
regular certificate in most cases will be required to treat a portion of any
gain on the sale or exchange of that certificate as ordinary income to the
extent of the market discount accrued to the date of disposition under one of
the foregoing methods, less any accrued market discount previously reported as
ordinary income.

     Further, under Section 1277 of the Internal Revenue Code a holder of a
REMIC regular certificate may be required to defer a portion of its interest
deductions for the taxable year attributable to any indebtedness incurred or
continued to purchase or carry a REMIC regular certificate purchased with
market discount. For these purposes, the de minimis rule referred to above
applies. That deferred interest expense would not exceed the market discount
that accrues during that taxable year and is, in general, allowed as a
deduction not later than the year in which that market discount is includible
in income. If that holder elects to include market discount in income currently
as it accrues on all market discount instruments acquired by the holder in that
taxable year or thereafter, the interest deferral rule described above will not
apply.

  Premium

     A REMIC regular certificate purchased at a cost, excluding any portion of
that cost attributable to accrued qualified stated interest, greater than its
remaining stated redemption price will be considered to be purchased at a
premium. The holder of that REMIC regular certificate may elect under Section
171 of the Internal Revenue Code to amortize that premium under the constant
yield method over the life of the certificate. If made, that election will
apply to all debt instruments having amortizable bond premium that the holder
owns or subsequently acquires. Amortizable premium will be treated as an offset
to interest income on the related debt instrument rather than as a separate
interest deduction. By analogy to bond premium regulations, any allocable
premium in excess of the interest income may be deductible to the extent of
prior accruals of interest. The OID Regulations also permit certificateholders
to elect to include all interest, discount and premium in income based on a
constant yield method, further treating that certificateholder as having made
the election to amortize premium. See "Taxation of Owners of REMIC Regular
Certificates--Market Discount." The Committee Report states that the same rules
that apply to accrual of market discount will also apply in amortizing bond
premium under Section 171 of the Internal Revenue Code. Those rules presumably
will require use of a prepayment assumption in accruing market discount or
premium for REMIC regular certificates without regard to whether those
certificates have original issue discount.

  Realized Losses

     Under Section 166 of the Internal Revenue Code, both corporate holders of
the REMIC regular certificates and noncorporate holders of the REMIC regular
certificates that acquire those certificates in connection with a trade or
business should be allowed to deduct, as ordinary losses, any losses sustained
during a taxable year in which their certificates become wholly or partially
worthless as the result of one


                                       88
<PAGE>

or more realized losses on the loans. However, it appears that a noncorporate
holder that does not acquire a REMIC regular certificate in connection with a
trade or business will not be entitled to deduct a loss under Section 166 of
the Internal Revenue Code until that holder's certificate becomes wholly
worthless, that is, until its outstanding principal balance has been reduced to
zero, and that the loss will be characterized as a short-term capital loss.

     Each holder of a REMIC regular certificate will be required to accrue
interest and original issue discount for that certificate, without giving
effect to any reductions in distributions attributable to defaults or
delinquencies on the loans until it can be established that the reduction
ultimately will not be recoverable. As a result, the amount of taxable income
reported in any period by the holder of a REMIC regular certificate could
exceed the amount of economic income actually realized by the holder in that
period. Although the holder of a REMIC regular certificate eventually will
recognize a loss or reduction in income attributable to previously accrued and
included income that as the result of a realized loss ultimately will not be
realized, the law is unclear regarding the timing and character of that loss or
reduction in income.


TAXATION OF OWNERS OF REMIC RESIDUAL CERTIFICATES


General

     Although a REMIC is a separate entity for federal income tax purposes, a
REMIC, in most cases, is not subject to entity-level taxation, except with
regard to prohibited transactions and other transactions. See "--Prohibited
Transactions and Other Possible REMIC Taxes." Rather, the taxable income or net
loss of a REMIC is, in most cases, taken into account by the holder of the
REMIC residual certificates. Accordingly, the REMIC residual certificates will
be subject to tax rules that differ significantly from those that would apply
if the REMIC residual certificates were treated for federal income tax purposes
as direct ownership interests in the loans or as debt instruments issued by the
REMIC.

     A holder of a REMIC residual certificate, in most cases, will be required
to report its daily portion of the taxable income or, subject to the
limitations noted in this discussion, the net loss of the REMIC for each day
during a calendar quarter that the holder owned that REMIC residual
certificate. In most cases, for this purpose, the taxable income or net loss of
the REMIC will be allocated to each day in the calendar quarter ratably using a
"30 days per month/90 days per quarter/360 days per year." The daily amounts so
allocated will then be allocated among the REMIC residual certificateholders in
proportion to their respective ownership interests on that day. Any amount
included in the gross income of or allowed as a loss to any REMIC residual
certificateholder by virtue of this paragraph will be treated as ordinary
income or loss. The taxable income of the REMIC will be determined under the
rules described under "Taxable Income of the REMIC" and will be taxable to the
REMIC residual certificateholders without regard to the timing or amount of
cash distributions by the REMIC. Ordinary income derived from REMIC residual
certificates will be "portfolio income" for purposes of the taxation of
taxpayers subject to limitations under Section 469 of the Internal Revenue Code
on the deductibility of "passive activity losses."

     A holder of a REMIC residual certificate that purchased that certificate
from a prior holder also will be required to report on its federal income tax
return amounts representing its daily share of the taxable income, or net loss,
of the REMIC for each day that it holds that certificate. Those daily amounts,
in most cases, will equal the amounts of taxable income or net loss determined
as described above. The Committee Report indicates that modifications of the
general rules may be made, by regulations or otherwise, to reduce, or increase
the income of a REMIC residual certificateholder that purchased that
certificate from a prior holder of that certificate at a price greater than, or
less than, the adjusted basis, as defined under "Basis Rules, Net Losses and
Distributions," that REMIC residual certificate would have had in the hands of
an original holder of that certificate. The REMIC Regulations, however, do not
provide for those modifications.

     Any payments received by a holder of a REMIC residual certificate in
connection with the acquisition of that REMIC residual certificate will be
taken into account in determining the income of that


                                       89
<PAGE>

holder for federal income tax purposes. Although it appears likely that this
payment would be includible in income immediately on its receipt, the IRS might
assert that this payment should be included in income over time according to an
amortization schedule or according to some other method. Because of the
uncertainty concerning the treatment of those payments, holders of REMIC
residual certificates should consult their tax advisors concerning the
treatment of those payments for income tax purposes.

     The amount of income REMIC residual certificateholders will be required to
report, or the tax liability associated with that income, may exceed the amount
of cash distributions received from the REMIC for the corresponding period.
Consequently, REMIC residual certificateholders should have other sources of
funds sufficient to pay any federal income taxes due as a result of their
ownership of REMIC residual certificates or unrelated deductions against which
income may be offset, subject to the rules relating to "excess inclusions" and
"noneconomic" residual interests discussed under "--Excess Inclusions" and
"--Noneconomic REMIC Residual Certificates." The fact that the tax liability
associated with the income allocated to REMIC residual certificateholders may
exceed the cash distributions received by those REMIC residual
certificateholders for the corresponding period may significantly adversely
affect those REMIC residual certificateholders' after-tax rate of return. That
disparity between income and distributions may not be offset by corresponding
losses or reductions of income attributable to the REMIC residual
certificateholder until subsequent tax years and, then, may not be completely
offset due to changes in the Internal Revenue Code, tax rates or character of
the income or loss.

  Taxable Income of the REMIC

     The taxable income of the REMIC will equal the income from the loans and
other assets of the REMIC plus any cancellation of indebtedness income due to
the allocation of realized losses to REMIC regular certificates, less the
deductions allowed to the REMIC for interest, including original issue discount
and reduced by amortization of any premium on issuance, on the REMIC regular
certificates, and any other class of REMIC certificates constituting regular
interests in the REMIC not offered by this prospectus, amortization of any
premium on the loans, bad debt losses for the loans and, except as described
below, servicing, administrative and other expenses.

     For purposes of determining its taxable income, the REMIC will have an
initial aggregate basis in its assets equal to the sum of the issue prices of
all REMIC certificates, or, if a class of REMIC certificates is not sold
initially, their fair market values. The issue price of any REMIC certificates
offered by this prospectus will be determined in the manner described above
under "--Taxation of Owners of REMIC Regular Certificates--Original Issue
Discount." The issue price of a REMIC certificate received in exchange for an
interest in the loans or other property will equal the fair market value of
those interests in the loans or other property. Accordingly, if one or more
classes of REMIC certificates are retained initially rather than sold, the
trustee may be required to estimate the fair market value of those interests in
order to determine the basis of the REMIC in the loans and other property held
by the REMIC.

     Subject to possible application of the de minimis rules, the method of
accrual by the REMIC of original issue discount income and market discount
income for loans that it holds will be equivalent to the method for accruing
original issue discount income for holders of REMIC regular certificates, that
is, under the constant yield method taking into account the prepayment
assumption. However, a REMIC that acquires loans at a market discount must
include that market discount in income currently as it accrues, on a constant
yield basis. See "--Taxation of Owners of REMIC Regular Certificates" in this
section of the prospectus, which describes a method for accruing that discount
income that is analogous to that required to be used by a REMIC as to loans
with market discount that it holds.

     A loan will be deemed to have been acquired with discount, or premium, to
the extent that the REMIC's basis in that loan, determined as described above,
is less than, or greater than, its stated redemption price. That discount will
be includible in the income of the REMIC as it accrues, in advance of receipt
of the cash attributable to that income, under a method similar to the method
described above for accruing original issue discount on the REMIC regular
certificates. It is anticipated that each REMIC will elect under Section 171 of
the Internal Revenue Code to amortize any premium on the loans. Premium on any
loan to which that election applies may be amortized under a constant yield
method,


                                       90
<PAGE>

presumably taking into account the prepayment assumption. Further, that
election would not apply to any loan originated on or before September 27,
1985. Instead, premium on that loan should be allocated among the principal
payments on that loan and be deductible by the REMIC as those payments become
due or on the prepayment of that loan.

     A REMIC will be allowed deductions for interest, including original issue
discount, on the REMIC regular certificates, which includes any other class of
REMIC certificates constituting "regular interests' in the REMIC not offered by
this prospectus, equal to the deductions that would be allowed if the REMIC
regular certificates, which includes any other class of REMIC certificates
constituting "regular interests' in the REMIC not offered by this prospectus,
were indebtedness of the REMIC. Original issue discount will be considered to
accrue for this purpose as described above under "--Taxation of Owners of REMIC
Regular Certificates--Original Issue Discount," except that the de minimis rule
and the adjustments for subsequent holders of REMIC regular certificates, which
includes any other class of REMIC certificates constituting "regular interests'
in the REMIC not offered by this prospectus, described in that Section will not
apply.

     If a class of REMIC regular certificates is issued at an issue premium,
the net amount of interest deductions that are allowed the REMIC in each
taxable year relating to the REMIC regular certificates of that class will be
reduced by an amount equal to the portion of the issue premium that is
considered to be amortized or repaid in that year. Although the matter is not
entirely certain, it is likely that issue premium would be amortized under a
constant yield method in a manner analogous to the method of accruing original
issue discount described above under "--Taxation of Owners of REMIC Regular
Certificates--Original Issue Discount."

     As a general rule, the taxable income of a REMIC will be determined in the
same manner as if the REMIC were an individual having the calendar year as its
taxable year and using the accrual method of accounting. However, no item of
income, gain, loss or deduction allocable to a prohibited transaction will be
taken into account. See "--Prohibited Transactions and Other Possible REMIC
Taxes" below. Further, the limitation on miscellaneous itemized deductions
imposed on individuals by Section 67 of the Internal Revenue Code, which allows
those deductions only to the extent they exceed in the aggregate two percent of
the taxpayer's adjusted gross income, will not be applied at the REMIC level so
that the REMIC will be allowed deductions for servicing, administrative and
other non-interest expenses in determining its taxable income. All those
expenses will be allocated as a separate item to the holders of REMIC residual
certificates, subject to the limitation of Section 67 of the Internal Revenue
Code. See "--Possible Pass-Through of Miscellaneous Itemized Deductions." If
the deductions allowed to the REMIC exceed its gross income for a calendar
quarter, that excess will be the net loss for the REMIC for that calendar
quarter.

  Basis Rules, Net Losses and Distributions

     The adjusted basis of a REMIC residual certificate will be equal to the
amount paid for that certificate, increased by amounts included in the income
of the REMIC residual certificateholder and decreased, but not below zero, by
distributions made, and by net losses allocated, to that REMIC residual
certificateholder.

     A REMIC residual certificateholder is not allowed to take into account any
net loss for any calendar quarter to the extent that net loss exceeds that
REMIC residual certificateholder's adjusted basis in its REMIC residual
certificate as of the close of that calendar quarter, determined without regard
to that net loss. Any loss that is not currently deductible by reason of this
limitation may be carried forward indefinitely to future calendar quarters and,
subject to the same limitation, may be used only to offset income from the
REMIC residual certificate. The ability of REMIC residual certificateholders to
deduct net losses may be subject to additional limitations under the Internal
Revenue Code, as to which REMIC residual certificateholders should consult
their tax advisors.

     Any distribution on a REMIC residual certificate will be treated as a
non-taxable return of capital to the extent it does not exceed the holder's
adjusted basis in that certificate. To the extent a distribution on a REMIC
residual certificate exceeds that adjusted basis, it will be treated as gain
from the sale of that


                                       91
<PAGE>

certificate. Holders of REMIC residual certificates may be entitled to
distributions early in the term of the related REMIC under circumstances in
which their bases in that REMIC residual certificates will not be sufficiently
large that those distributions will be treated as nontaxable returns of
capital. Their bases in those REMIC residual certificates will initially equal
the amount paid for those REMIC residual certificates and will be increased by
their allocable shares of the taxable income of the REMIC. However, those bases
increases may not occur until the end of the calendar quarter, or perhaps the
end of the calendar year, for which that REMIC taxable income is allocated to
the REMIC residual certificateholders. To the extent that REMIC residual
certificateholders' initial bases are less than the distributions to that REMIC
residual certificateholders, and increases in those initial bases either occur
after those distributions or, together with their initial bases, are less than
the amount of those distributions, gain will be recognized to those REMIC
residual certificateholders on those distributions and will be treated as gain
from the sale of their REMIC residual certificates.

     The effect of these rules is that a REMIC residual certificateholder may
not amortize its basis in a REMIC residual certificate, but may only recover
its basis through distributions, through the deduction of any net losses of the
REMIC or on the sale of its REMIC residual certificate. See "--Sales of REMIC
Certificates," in this section of the prospectus. For a discussion of possible
modifications of these rules that may require adjustments to income of a holder
of a REMIC residual certificate other than an original holder in order to
reflect any difference between the cost of that REMIC residual certificate to
that REMIC residual certificateholder and the adjusted basis that REMIC
residual certificate would have had in the hands of an original holder, see
"--Taxation of Owners of REMIC Residual Certificates-- General."

  Excess Inclusions

     Any "excess inclusions" for a REMIC residual certificate will be subject
to federal income tax in all events.

     In general, the "excess inclusions" for a REMIC residual certificate for
any calendar quarter will be the excess, if any, of:

      o  the daily portions of REMIC taxable income allocable to that REMIC
         residual certificate, over

      o  the sum of the "daily accruals", as defined below, for each day during
         that quarter that the REMIC residual certificate was held by the REMIC
         residual certificateholder.

The daily accruals of a REMIC residual certificateholder will be determined by
allocating to each day during a calendar quarter its ratable portion of the
product of the "adjusted issue price" of the REMIC residual certificate at the
beginning of the calendar quarter and 120% of the "long-term Federal rate" in
effect on the closing date. For this purpose, the adjusted issue price of a
REMIC residual certificate as of the beginning of any calendar quarter will be
equal to the issue price of the REMIC residual certificate, increased by the
sum of the daily accruals for all prior quarters and decreased, but not below
zero, by any distributions made for that REMIC residual certificate before the
beginning of that quarter. The issue price of a REMIC residual certificate is
the initial offering price to the public, excluding bond houses and brokers, at
which a substantial amount of the REMIC residual certificates were sold. The
"long-term Federal rate" is an average of current yields on Treasury securities
with a remaining term of greater than nine years, computed and published
monthly by the IRS.

     For REMIC residual certificateholders, an excess inclusion:

      o  will not be permitted to be offset by deductions, losses or loss
         carryovers from other activities,

      o  will be treated as "unrelated business taxable income" to an otherwise
         tax-exempt organization, and

      o  will not be eligible for any rate reduction or exemption under any
         applicable tax treaty for the 30% United States withholding tax imposed
         on distributions to REMIC residual certificateholders that are foreign
         investors. See, however, "--Foreign Investors in REMIC Certificates,"
         in this section of the prospectus.


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<PAGE>

     Provisions governing the relationship between excess inclusions and the
alternative minimum tax provide that:

      o  the alternative minimum taxable income of the taxpayer is based on the
         taxpayer's regular taxable income computed without regard to the rule
         that taxable income cannot be less than the amount of excess
         inclusions,

      o  the alternative minimum taxable of a taxpayer for a taxable year cannot
         be less than the amount of excess inclusions for that year, and

      o  the amount of any alternative minimum tax net operating loss is
         computed without regard to any excess inclusions.

     Under Treasury regulations yet to be issued, in the case of any REMIC
residual certificates held by a real estate investment trust, the aggregate
excess inclusions for those certificates, reduced, but not below zero, by the
real estate investment trust taxable income, within the meaning of Section
857(b)(2) of the Internal Revenue Code, excluding any net capital gain, will be
allocated among the shareholders of that trust in proportion to the dividends
received by those shareholders from that trust. Any amount so allocated will be
treated as an excess inclusion for a REMIC residual certificate as if held
directly by that shareholder. A similar rule will apply for regulated
investment companies, common trust funds and various cooperatives.

  Noneconomic REMIC Residual Certificates

     Under the REMIC Regulations, transfers of "noneconomic" REMIC residual
certificates will be disregarded for all federal income tax purposes if "a
significant purpose of the transfer was to enable the transferor to impede the
assessment or collection of tax." If that transfer is disregarded, the
purported transferor will continue to remain liable for any taxes due for the
income on that "noneconomic" REMIC residual certificate. The REMIC Regulations
provide that a REMIC residual certificate is noneconomic unless, based on the
prepayment assumption and on any required or permitted clean up calls or
required qualified liquidation provided for in the REMIC's organizational
documents:

      o  the present value of the expected future distributions, discounted
         using the "applicable Federal rate" for obligations whose term ends on
         the close of the last quarter in which excess inclusions are expected
         to accrue for the REMIC residual certificate, which rate is computed
         and published monthly by the IRS, on the REMIC residual certificate
         equals at least the present value of the expected tax on the
         anticipated excess inclusions, and

      o  the transferor reasonably expects that for each anticipated excess
         inclusion the transferee will receive distributions for the REMIC
         residual certificate at or after the time the taxes accrue on the
         anticipated excess inclusions in an amount sufficient to satisfy the
         accrued taxes.

Accordingly, all transfers of REMIC residual certificates that may constitute
noneconomic residual interests will be subject to various restrictions under
the terms of the related pooling and servicing agreement that are intended to
reduce the possibility of that transfer being disregarded. Those restrictions
will require each party to a transfer to provide an affidavit that no purpose
of that transfer is to impede the assessment or collection of tax, including
various representations as to the financial condition of the prospective
transferee, as to which the transferor will also be required to make a
reasonable investigation to determine that transferee's historic payments of
its debts and ability to continue to pay its debts as they come due in the
future. Prior to purchasing a REMIC residual certificate, prospective
purchasers should consider the possibility that a purported transfer of that
REMIC residual certificate by that purchaser to another purchaser at some
future date might be disregarded in accordance with the above-described rules,
which would result in the retention of tax liability by that purchaser.

     The related prospectus supplement will disclose whether offered REMIC
residual certificates may be considered "noneconomic" residual interests under
the REMIC regulations. However, any disclosure that a REMIC residual
certificate will not be considered "noneconomic" will be based on various
assumptions, and the depositor will make no representation that a REMIC
residual certificate will not be considered


                                       93
<PAGE>

"noneconomic" for purposes of the above-described rules. See "--Foreign
Investors In REMIC Certificates--REMIC Residual Certificates" below for
additional restrictions applicable to transfers of various REMIC residual
certificates to foreign persons.

  Mark-to-Market Rules

     On December 24, 1996, the IRS released Mark-to-Market Regulations relating
to the requirement that a securities dealer mark to market securities held for
sale to customers. This mark-to-market requirement applies to all securities
owned by a dealer, except to the extent that the dealer has specifically
identified a security as held for investment. The Mark-to-Market Regulations
provide that for purposes of this mark-to-market requirement, any REMIC
residual certificate acquired after January 4, 1995 will not be treated as a
security and therefore in most cases may not be marked to market.

  Possible Pass-Through of Miscellaneous Itemized Deductions

     Fees and expenses of a REMIC in most cases will be allocated to the
holders of the related REMIC residual certificates. The applicable Treasury
regulations indicate, however, that in the case of a REMIC that is similar to a
single class grantor trust, all or a portion of those fees and expenses should
be allocated to the holders of the related REMIC regular certificates. In most
cases, those fees and expenses will be allocated to holders of the related
REMIC residual certificates in their entirety and not to the holders of the
related REMIC regular certificates.

     For REMIC residual certificates or REMIC regular certificates the holders
of which receive an allocation of fees and expenses in accordance with the
preceding discussion, if any holder that certificate is an individual, estate
or trust, or a "pass-through entity" beneficially owned by one or more
individuals, estates or trusts:

      o  an amount equal to that individual's, estate's or trust's share of
         those fees and expenses will be added to the gross income of that
         holder, and

      o  that individual's, estate's or trust's share of those fees and expenses
         will be treated as a miscellaneous itemized deduction allowable subject
         to the limitation of Section 67 of the Internal Revenue Code, which
         permits those deductions only to the extent they exceed in the
         aggregate two percent of a taxpayer's adjusted gross income.

For taxable years beginning after December 31, 1997, in the case of a
partnership that has 100 or more partners and elects to be treated as an
"electing large partnership," 70 percent of that partnership's miscellaneous
itemized deductions will be disallowed, although the remaining deductions will,
in most cases, be allowed at the partnership level and will not be subject to
the 2 percent floor that would otherwise be applicable to individual partners.
In addition, Section 68 of the Internal Revenue Code provides that the amount
of itemized deductions otherwise allowable for an individual whose adjusted
gross income exceeds a specified amount will be reduced by the lesser of:

      o  3% of the excess of the individual's adjusted gross income over that
         amount or

      o  80% of the amount of itemized deductions otherwise allowable for the
         taxable year.

The amount of additional taxable income reportable by holders of those
certificates that are subject to the limitations of either Section 67 or
Section 68 of the Internal Revenue Code may be substantial. Furthermore, in
determining the alternative minimum taxable income of that holder of a REMIC
certificate that is an individual, estate or trust, or a "pass-through entity"
beneficially owned by one or more individuals, estates or trusts, no deduction
will be allowed for that holder's allocable portion of servicing fees and other
miscellaneous itemized deductions of the REMIC, even though an amount equal to
the amount of those fees and other deductions will be included in that holder's
gross income. Accordingly, those REMIC certificates may not be appropriate
investments for individuals, estates or trusts, or pass-through entities
beneficially owned by one or more individuals, estates or trusts. Those
prospective investors should carefully consult with their own tax advisors
prior to making an investment in those certificates.


                                       94
<PAGE>

  Sales of REMIC Certificates

     If a REMIC regular certificate is sold, the selling certificateholder will
recognize gain or loss equal to the difference between the amount realized on
the sale and its adjusted basis in the REMIC regular certificate. The adjusted
basis of a REMIC regular certificate, in most cases, will equal the cost of
that REMIC regular certificate to that certificateholder, increased by income
reported by that certificateholder for that REMIC regular certificate,
including original issue discount and market discount income, and reduced, but
not below zero, by distributions on that REMIC regular certificate received by
that certificateholder and by any amortized premium. The adjusted basis of a
REMIC residual certificate will be determined as described under "--Taxation of
Owners of REMIC Residual Certificates--Basis Rules, Net Losses and
Distributions." Except as provided in the following five paragraphs, the gain
or loss described will be capital gain or loss provided that REMIC regular
certificate is held as a capital asset, which in most cases is property held
for investment, within the meaning of Section 1221 of the Internal Revenue
Code.

     Gain from the sale of a REMIC regular certificate that might otherwise be
capital gain will be treated as ordinary income to the extent that gain does
not exceed the excess, if any, of:

      o  the amount that would have been includible in the seller's income for
         that REMIC regular certificate assuming that income had accrued on that
         REMIC regular certificate at a rate equal to 110% of the "applicable
         Federal rate", in most cases, a rate based on an average of current
         yields on Treasury securities having a maturity comparable to that of
         the certificate based on the application of the prepayment assumption
         to that certificate, which rate is computed and published monthly by
         the IRS, determined as of the date of purchase of that certificate,
         over

      o  the amount of ordinary income actually includible in the seller's
         income prior to that sale.

In addition, gain recognized on the sale of a REMIC regular certificate by a
seller who purchased that certificate at a market discount will be taxable as
ordinary income in an amount not exceeding the portion of that discount that
accrued during the period that REMIC certificate was held by that holder,
reduced by any market discount included in income under the rules described
above under "--Taxation of Owners of REMIC Regular Certificates--Market
Discount and--Premium."

     REMIC regular certificates will be "evidences of indebtedness" within the
meaning of Section 582(c)(1) of the Internal Revenue Code, so that gain or loss
recognized from the sale of a REMIC regular certificate by a bank or thrift
institution to which that section applies will be ordinary income or loss.

     A portion of any gain from the sale of a REMIC regular certificate that
might otherwise be capital gain may be treated as ordinary income to the extent
that the certificate is held as part of a "conversion transaction" within the
meaning of Section 1258 of the Internal Revenue Code. A conversion transaction,
in most cases, is one in which the taxpayer has taken two or more positions in
the same or similar property that reduce or eliminate market risk, if
substantially all of the taxpayer's return is attributable to the time value of
the taxpayer's net investment in that transaction. The amount of gain so
realized in a conversion transaction that is recharacterized as ordinary
income, in most cases, will not exceed the amount of interest that would have
accrued on the taxpayer's net investment at 120% of the appropriate "applicable
Federal rate", which rate is computed and published monthly by the IRS, at the
time the taxpayer enters into the conversion transaction, subject to
appropriate reduction for prior inclusion of interest and other ordinary income
items from the transaction.

     Finally, a taxpayer may elect to have net capital gain taxed at ordinary
income rates rather than capital gains rates in order to include that net
capital gain in total net investment income for the taxable year, for purposes
of the rule that limits the deduction of interest on indebtedness incurred to
purchase or carry property held for investment to a taxpayer's net investment
income.

     Except as may be provided in Treasury regulations yet to be issued, if the
seller of a REMIC residual certificate reacquires a REMIC residual certificate,
or acquires any other residual interest in a REMIC or any similar interest in a
"taxable mortgage pool", as defined in Section 7701(i) of the Internal Revenue
Code, during the period beginning six months before, and ending six months
after, the date of that sale,


                                       95
<PAGE>

the sale will be subject to the "wash sale" rules of Section 1091 of the
Internal Revenue Code. In that event, any loss realized by the REMIC residual
certificateholder on the sale will not be deductible, but instead will be added
to that REMIC residual certificateholder's adjusted basis in the newly acquired
asset.

  Prohibited Transactions and Other Possible REMIC Taxes

     The Internal Revenue Code imposes a Prohibited Transaction Tax. In
general, subject to specified exceptions, a prohibited transaction means the
disposition of a loan, the receipt of income from a source other than a loan or
some other permitted investments, the receipt of compensation for services, or
gain from the disposition of an asset purchased with the payments on the loans
for temporary investment pending distribution on the REMIC certificates. It is
not anticipated that any REMIC will engage in any prohibited transactions in
which it would recognize a material amount of net income.

     In addition, contributions to a REMIC made after the day on which the
REMIC issues all of its interests could result in the imposition of a
Contributions Tax. Each pooling and servicing agreement will include provisions
designed to prevent the acceptance of any contributions that would be subject
to that tax.

     REMICs also are subject to federal income tax at the highest corporate
rate on "net income from foreclosure property," determined by reference to the
rules applicable to real estate investment trusts. "Net income from foreclosure
property," in most cases, means gain from the sale of a foreclosure property
that is inventory property and gross income from foreclosure property other
than qualifying rents and other qualifying income for a real estate investment
trust. In most cases, it is not anticipated that any REMIC will recognize "net
income from foreclosure property" subject to federal income tax.

     In most cases, to the extent permitted by then applicable laws, any
prohibited transactions tax, Contributions Tax, tax on "net income from
foreclosure property" or state or local income or franchise tax that may be
imposed on the REMIC will be borne by the related master servicer or trustee,
in either case out of its own funds, provided that the master servicer or the
trustee, as the case may be, has sufficient assets to do so, and provided
further that any of those taxes arises out of a breach of the master servicer's
or the trustee's obligations, as the case may be, under the related pooling and
servicing agreement and relating to compliance with applicable laws and
regulations. That tax not borne by the master servicer or the trustee will be
charged against the related trust, resulting in a reduction in amounts payable
to holders of the related REMIC certificates.

     Tax and Restrictions on Transfers of REMIC Residual Certificates to
Specific Organizations.

     If a REMIC residual certificate is transferred to a "disqualified
organization" as defined below, a tax would be imposed in an amount, determined
under the REMIC Regulations, equal to the product of:

      o  the present value, which is discounted using the "applicable Federal
         rate" for obligations whose term ends on the close of the last quarter
         in which excess inclusions are expected to accrue for the REMIC
         residual certificate, which rate is computed and published monthly by
         the IRS, of the total anticipated excess inclusions for that REMIC
         residual certificate for periods after the transfer and

      o  the highest marginal federal income tax rate applicable to
         corporations.


The anticipated excess inclusions must be determined as of the date that the
REMIC residual certificate is transferred and must be based on events that have
occurred up to the time of that transfer, the prepayment assumption and any
required or permitted clean up calls or required qualified liquidation provided
for in the REMIC's organizational documents. That tax would be, in most cases,
imposed on the transferor of the REMIC residual certificate, except that where
that transfer is through an agent for a disqualified organization, the tax
would instead be imposed on that agent. However, a transferor of a REMIC
residual certificate would in no event be liable for that tax for a transfer if
the transferee furnishes to the transferor an affidavit that the transferee is
not a disqualified organization, and, as of the time of the transfer, the
transferor did not have actual knowledge that the affidavit was false.
Moreover, an entity will not qualify as a REMIC unless there are reasonable
arrangements designed to ensure that:


                                       96
<PAGE>

      o  residual interests in that entity are not held by disqualified
         organizations and

      o  information necessary for the application of the tax described in this
         prospectus will be made available.

Restrictions on the transfer of REMIC residual certificates and other
provisions that are intended to meet this requirement will be included in the
related pooling and servicing agreement, and will be discussed more fully in
any prospectus supplement relating to the offering of any REMIC residual
certificate.

     In addition, if a "pass-through entity", as defined below, includes in
income excess inclusions for a REMIC residual certificate and a disqualified
organization is the record holder of an interest in that entity, then a tax
will be imposed on that entity equal to the product of:

      o  the amount of excess inclusions on the REMIC residual certificate that
         are allocable to the interest in the pass-through entity held by that
         disqualified organization and

      o  the highest marginal federal income tax rate imposed on corporations.

A pass-through entity will not be subject to this tax for any period, however,
if each record holder of an interest in that pass-through entity furnishes to
that pass-through entity:

      o  that holder's social security number and a statement under penalty of
         perjury that the social security number is that of the record holder or

      o  a statement under penalty of perjury that the record holder is not a
         disqualified organization.

For taxable years beginning after December 31, 1997, in spite of the preceding
two sentences, in the case of a REMIC residual certificate held by an "electing
large partnership," all interests in that partnership shall be treated as held
by disqualified organizations, without regard to whether the record holders of
the partnership furnish statements described in the preceding sentence, and the
amount that would be subject to tax under the second preceding sentence is
excluded from the gross income of the partnership, in lieu of a deduction in
the amount of that tax, in most cases, allowed to pass-through entities.

     For these purposes, a "disqualified organization" means:

      o  the United States, any State or political subdivision of the United
         States, any foreign government, any international organization, or any
         agency or instrumentality of the foregoing, not including
         instrumentalities described in Section 168(h)(2)(D) of the Internal
         Revenue Code or the Federal Home Loan Mortgage Corporation,

      o  any organization, other than a cooperative described in Section 521 of
         the Internal Revenue Code, that is exempt from federal income tax,
         unless it is subject to the tax imposed by Section 511 of the Internal
         Revenue Code, or

      o  any organization described in Section 1381(a)(2)(C) of the Internal
         Revenue Code.

For these purposes, a "pass-through entity" means any regulated investment
company, real estate investment trust, trust, partnership or other entities
described in Section 860E(e)(6) of the Internal Revenue Code. In addition, a
person holding an interest in a pass-through entity as a nominee for another
person will, for that interest, be treated as a pass-through entity.

  Termination and Liquidation

     A REMIC will terminate immediately after the distribution date following
receipt by the REMIC of the final payment relating of the loans or on a sale of
the REMIC's assets following the adoption by the REMIC of a plan of complete
liquidation. The last distribution on a REMIC regular certificate will be
treated as a payment in retirement of a debt instrument. In the case of a REMIC
residual certificate, if the last distribution on that REMIC residual
certificate is less than the REMIC Residual certificateholder's adjusted basis
in that certificate, that REMIC residual certificateholder should , but may
not, be treated as realizing a loss equal to the amount of that difference, and
that loss may be treated as a capital loss. If the REMIC adopts a plan of
complete liquidation, within the meaning of Section 860F(a)(4)(A)(i) of the
Internal Revenue Code, which may be accomplished by designating in the REMIC's
final tax return


                                       97
<PAGE>

a date on which that adoption is deemed to occur, and sells all of its assets,
other than cash, within a 90-day period beginning on that date, the REMIC will
not be subjected to any "prohibited transactions taxes" solely on account of
that qualified liquidation, provided that the REMIC credits or distributes in
liquidation all of the sale proceeds plus its cash, other than the amounts
retained to meet claims, to holders of regular and residual certificates within
the 90-day period.

  Reporting and Other Administrative Matters

     Solely for purposes of the administrative provisions of the Internal
Revenue Code, the REMIC will be treated as a partnership and REMIC residual
certificateholders will be treated as partners. In most cases, the trustee will
file REMIC federal income tax returns on behalf of the REMIC, will hold at
least a nominal amount of REMIC residual certificates, and will be designated
as and will act as the "tax matters person" for the REMIC in all respects.

     The trustee, as the tax matters person or as agent for the tax matters
person, subject to various notice requirements and various restrictions and
limitations, in most cases will have the authority to act on behalf of the
REMIC and the REMIC residual certificateholders in connection with the
administrative and judicial review of items of income, deduction, gain or loss
of the REMIC, as well as the REMIC's classification. REMIC residual
certificateholders will, in most cases, be required to report that REMIC items
consistently with their treatment on the related REMIC's tax return and may in
some circumstances be bound by a settlement agreement between the trustee, as
the tax matters person or as agent for the tax matters person, and the IRS
concerning that REMIC item. Adjustments made to the REMIC tax return may
require a REMIC residual certificateholder to make corresponding adjustments on
its return, and an audit of the REMIC's tax return, or the adjustments
resulting from that audit, could result in an audit of a REMIC residual
certificateholder's return. Any person that holds a REMIC residual certificate
as a nominee for another person may be required to furnish to the related
REMIC, in a manner to be provided in Treasury regulations, with the name and
address of that person and other information.

     Reporting of interest income, including any original issue discount, for
REMIC regular certificates is required annually, and may be required more
frequently under Treasury regulations. These information reports in most cases
are required to be sent to various trusts and individual holders of REMIC
regular interests and the IRS; holders of REMIC regular certificates that are
corporations, trusts described in Sections 664(c) and 4947(a)(1) of the
Internal Revenue Code, securities dealers and other non-individuals will be
provided interest and original issue discount income information and the
information provided in the following paragraph on request in accordance with
the requirements of the applicable regulations. The information must be
provided by the later of 30 days after the end of the quarter for which the
information was requested, or two weeks after the receipt of the request. The
REMIC must also comply with rules requiring a REMIC regular certificate issued
with original issue discount to disclose on its face the amount of original
issue discount and the issue date among other things, and requiring that
information to be reported to the IRS. Reporting for the REMIC residual
certificates, including income, excess inclusions, investment expenses and
relevant information regarding qualification of the REMIC's assets, will be
made as required under the Treasury regulations, in most cases on a quarterly
basis.

     As applicable, the REMIC regular certificate information reports will
include a statement of the adjusted issue price of the REMIC regular
certificate at the beginning of each accrual period. In addition, the reports
will include information required by regulations for computing the accrual of
any market discount. Because exact computation of the accrual of market
discount on a constant yield method would require information relating to the
holder's purchase price that the REMIC may not have, those regulations only
require that information pertaining to the appropriate proportionate method of
accruing market discount be provided. See "--Taxation of Owners of REMIC
Regular Certificates--Market Discount."

     The responsibility for complying with the foregoing reporting rules will
be borne by the trustee.

  Backup Withholding as to REMIC Certificates

     Payments of interest and principal, as well as payments of proceeds from
the sale of REMIC certificates, may be subject to the "backup withholding tax"
under Section 3406 of the Internal Revenue


                                       98
<PAGE>

Code at a rate of 31% if recipients of those payments fail to furnish to the
payor various information, including their taxpayer identification numbers, or
otherwise fail to establish an exemption from that tax. Final Withholding
Regulations, which are, in most cases, effective for payments made after
December 31, 2000, consolidate and modify the current certification
requirements and means by which a holder may claim exemption from United States
federal income tax withholding and provide presumptions regarding the status of
holders when payments to the holders cannot be reliably associated with
appropriate documentation provided to the payor. All holders should consult
their tax advisors regarding the application of the Final Withholding
Regulations. Any amounts deducted and withheld from a distribution to a
recipient would be allowed as a credit against that recipient's federal income
tax. Furthermore, penalties may be imposed by the IRS on a recipient of
payments that is required to supply information but that does not do so in the
proper manner.

  Foreign Investors in REMIC Certificates

     A REMIC Regular certificateholder that is not a United States person, as
defined below, and is not subject to federal income tax as a result of any
direct or indirect connection to the United States in addition to its ownership
of a REMIC regular certificate will not, in most cases, be subject to United
States federal income or withholding tax relating to a distribution on a REMIC
regular certificate, provided that the holder complies to the extent necessary
with various identification requirements. These requirements include delivery
of a statement, signed by the certificateholder under penalties of perjury,
certifying that the certificateholder is not a United States person and
providing the name and address of that certificateholder. The Final Withholding
Regulations consolidate and modify the current certification requirements and
means by which a non-United States person may claim exemption from United
States federal income tax withholding. All holders that are non-United States
persons should consult their tax advisors regarding the application of the
Final Withholding Regulations, which are effective for payments made after
December 31, 2000. For these purposes, United States person means a citizen or
resident of the United States, a corporation or partnership or entity treated
as a partnership or corporation for United States Federal income tax purposes
created or organized in, or under the laws of, the United States, any state of
the United States or the District of Columbia except, in the case of a
partnership, to the extent provided in regulations, an estate whose income is
subject to United States federal income tax regardless of its source, or a
trust if a court within the United States is able to exercise primary
supervision over the administration of the trust and one or more United States
persons have the authority to control all substantial decisions of the trust.
To the extent prescribed in regulations by the Secretary of the Treasury, which
regulations have not yet been issued, a trust which was in existence on August
20, 1996, other than a trust treated as owned by the grantor under subpart E of
part I of subchapter J of chapter 1 of the Internal Revenue Code, and which was
treated as a United States person on August 19, 1996, may elect to continue to
be treated as a United States person regardless of the previous sentence. It is
possible that the IRS may assert that the foregoing tax exemption should not
apply for a REMIC regular certificate held by a REMIC Residual
certificateholder that owns directly or indirectly a 10% or greater interest in
the related REMIC residual certificates. If the holder does not qualify for
exemption, distributions of interest, including distributions of accrued
original issue discount, to that holder may be subject to a tax rate of 30%,
subject to reduction under any applicable tax treaty.

     In addition, the foregoing rules will not apply to exempt a United States
shareholder of a controlled foreign corporation from taxation on that United
States shareholder's allocable portion of the interest income received by that
controlled foreign corporation.

     Further, it appears that a REMIC regular certificate would not be included
in the estate of a non-resident alien individual and would not be subject to
United States estate taxes. However, certificateholders who are non-resident
alien individuals should consult their tax advisors concerning this question.
In most cases, transfers of REMIC residual certificates to investors that are
not United States persons will be prohibited under the related pooling and
servicing agreement.

NOTES

     On or prior to the date of the related prospectus supplement for the
proposed issuance of each series of notes, counsel to the depositor will
deliver its opinion to the effect that, assuming compliance with all provisions
of the indenture, owner trust agreement and related documents and on issuance
of the notes, for federal income tax purposes:


                                       99
<PAGE>

      o  the notes will be treated as indebtedness and

      o  the issuer, as created under the terms and conditions of the owner
         trust agreement, will not be characterized as an association, or
         publicly traded partnership, taxable as a corporation or as a taxable
         mortgage pool.

  Status as Real Property Loans

     Notes held by a domestic building and loan association will not constitute
"loans . . . secured by an interest in real property" within the meaning of
Internal Revenue Code section 7701(a)(19)(C)(v); and (ii) notes held by a real
estate investment trust will not constitute "real estate assets" within the
meaning of Internal Revenue Code section 856(c)(4)(A) and interest on notes
will not be considered "interest on obligations secured by mortgages on real
property" within the meaning of Internal Revenue Code section 856(c)(3)(B).

  Taxation of Noteholders

     Notes in most cases will be subject to the same rules of taxation as REMIC
regular certificates issued by a REMIC, as described above, except that:

      o  income reportable on the notes is not required to be reported under the
         accrual method unless the holder otherwise uses the accrual method and

      o  the special rule treating a portion of the gain on sale or exchange of
         a REMIC regular certificate as ordinary income is inapplicable to the
         notes. See "--REMICs--Taxation of Owners of REMIC Regular Certificates"
         and "--Sales of REMIC Certificates."


                       STATE AND OTHER TAX CONSEQUENCES

     In addition to the federal income tax consequences described in "Material
Federal Income Tax Consequences," potential investors should consider the state
and local tax consequences of the acquisition, ownership, and disposition of
the securities offered under this prospectus. State tax law may differ
substantially from the corresponding federal tax law, and this discussion does
not purport to describe any aspect of the tax laws of any state or other
jurisdiction. Therefore, prospective investors should consult their own tax
advisors as to the various tax consequences of investments in the securities
offered under this prospectus.


                             ERISA CONSIDERATIONS

     The Employee Retirement Income Security Act of 1974, as amended, or ERISA,
imposes fiduciary and prohibited transaction restrictions on employee pension
and welfare benefit plans subject to ERISA, or ERISA plans. Section 4975 of the
Internal Revenue Code imposes similar prohibited transaction restrictions on
qualified retirement plans described in Section 401(a) of the Internal Revenue
Code and on individual retirement accounts, or IRAs, described in Section 408
of the Internal Revenue Code (these qualified plans and IRAs, together with
ERISA Plans, are referred to in this section as Plans).

     Some employee benefit plans, such as governmental plans as defined in
Section 3(32) of ERISA, and, if no election has been made under Section 410(d)
of the Internal Revenue Code, church plans as defined in Section 3(33) of
ERISA, are not subject to the ERISA requirements discussed in this prospectus.
Accordingly, assets of those plans may be invested in securities without regard
to the ERISA considerations described below, subject to the provisions of
applicable federal and state law. Any plan that is a qualified retirement plan
and exempt from taxation under Sections 401(a) and 501(a) of the Internal
Revenue Code, however, is subject to the prohibited transaction rules presented
in Section 503 of the Internal Revenue Code.

     In addition to imposing general fiduciary requirements, including those of
investment prudence and diversification and the requirement that a Plan's
investment be made in accordance with the documents governing the Plan, Section
406 of ERISA and Section 4975 of the Internal Revenue Code prohibit a broad
range of transactions involving parties in interest, unless a statutory,
regulatory or administrative


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<PAGE>

exemption is available. Parties in interest that participate in a prohibited
transaction may be subject to a penalty, or an excise tax, imposed under
Section 502(i) of ERISA or Section 4975 of the Internal Revenue Code, unless a
statutory, regulatory or administrative exemption is available.

     ERISA Plan Asset Regulations. Transactions involving a trust that issues
securities offered under this prospectus might be deemed to constitute
prohibited transactions under ERISA and the Internal Revenue Code for a Plan
that purchases the securities, if the underlying mortgage assets and other
assets included in the trust are deemed to be assets of the Plan. The U.S.
Department of Labor, or DOL, has promulgated ERISA Plan Asset Regulations
defining the term "Plan Assets" for purposes of applying the general fiduciary
responsibility provisions of ERISA and the prohibited transaction provisions of
ERISA and the Internal Revenue Code. Under the ERISA Plan Asset Regulations, in
most cases, when a Plan acquires an "equity interest" in another entity, such
as the trust, the underlying assets of that entity may be considered to be
ERISA plan assets unless exceptions apply. In addition to several exceptions
not applicable to an entity like the trust, a Plan's Assets will not include an
undivided interest in each asset of an entity in which that Plan makes an
equity investment if benefit plan investors, that is, ERISA plans and employee
benefit plans not subject to ERISA, do not own, in the aggregate, 25% or more
in value of any class of equity securities issued by the entity. Neither ERISA
plans nor persons investing ERISA plan assets should acquire or hold securities
in reliance on the availability of any exception under the ERISA Plan Asset
Regulations. The ERISA Plan Asset Regulations provide that the term "equity
interest" means any interest in an entity other than an instrument which is
treated as indebtedness under applicable local law and which has no
"substantial equity features." Under the ERISA Plan Asset Regulations, ERISA
plan assets will be deemed to include an interest in the instrument evidencing
the equity interest of a Plan, such as a certificate or a note with
"substantial equity features," and, because of the factual nature of some of
the rules presented in the ERISA Plan Asset Regulations, ERISA plan assets may
be deemed to include an interest in the underlying assets of the entity in
which a Plan acquires an interest, such as the trust. Without regard to whether
the notes are characterized as equity interests, the purchase, sale and holding
of notes by or on behalf of a Plan could be considered to give rise to a
prohibited transaction if the issuer, the applicable trustee or any of their
respective affiliates is or becomes a party in interest for that Plan.

     Any person who has discretionary authority or control respecting the
management or disposition of ERISA plan assets, and any person who provides
investment advice for such assets for a fee, is a fiduciary of the investing
Plan. If the mortgage assets and other assets included in a trust constitute
ERISA plan assets, then any party exercising management or discretionary
control regarding those assets, such as the master servicer, any servicer, any
sub-servicer, the trustee, the obligor under any credit enhancement mechanism,
or some affiliates of those entities may be deemed to be a Plan "fiduciary" and
thus subject to the fiduciary responsibility provisions and prohibited
transaction provisions of ERISA and the Internal Revenue Code for the investing
Plan. In addition, if the mortgage assets and other assets included in a trust
constitute ERISA plan assets, the purchase of certificates by a Plan, as well
as the operation of the trust, may constitute or involve a prohibited
transaction under ERISA or the Internal Revenue Code.

     The ERISA Plan Asset Regulations provide that where a Plan acquires a
"guaranteed governmental mortgage pool certificate," the Plan's assets include
that certificate but do not solely by reason of the Plan's holdings of that
certificate include any of the mortgages underlying that certificate. The ERISA
Plan Asset Regulations include in the definition of a "guaranteed governmental
mortgage pool certificate" Freddie Mac Certificates, GNMA Certificates and
Fannie Mae Certificates. Accordingly, even if those Agency Securities included
in a trust were deemed to be assets of Plan investors, the mortgages underlying
those Agency Securities would not be treated as assets of those ERISA plans.
Private mortgage-backed securities are not "guaranteed governmental mortgage
pool certificates" within the meaning of the ERISA Plan Asset Regulations.
Potential Plan investors should consult their counsel and review the ERISA
discussion in this prospectus and in the related prospectus supplement before
purchasing those certificates.

     Prohibited Transaction Exemption. The DOL has granted to DLJ Prohibited
Transaction Exemption 90-83, or the Exemption, which in most cases exempts from
the application of the prohibited transaction provisions of Section 406 of
ERISA, and the excise taxes imposed on those prohibited


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<PAGE>

transactions under Section 4975(a) and (b) of the Internal Revenue Code,
transactions relating to the servicing and operation of mortgage pools and the
purchase, sale, holding and disposition of mortgage pass-through securities
underwritten by an underwriter, provided that conditions listed in the
Exemption are satisfied. For purposes of this Exemption, the term "underwriter"
includes (a) DLJ, (b) any person directly or indirectly, through one or more
intermediaries, controlling, controlled by or under common control with DLJ and
(c) any member of the underwriting syndicate or selling group of which a person
described in (a) or (b) is a manager or co-manager for a class of securities.
"Securities" potentially covered by the Exemption would include certificates,
notes that are treated as "equity interests" under the ERISA Plan Asset
Regulations, and interests issued by a trust that elects to be treated as a
REMIC or FASIT.

     The Exemption provides six general conditions which must be satisfied for
a transaction involving the purchase, sale and holding of securities to be
eligible for exemptive relief under the Exemption. First, the acquisition of
securities by a Plan or with ERISA plan assets must be on terms that are at
least as favorable to the Plan as they would be in an arm's-length transaction
with an unrelated party. Second, the Exemption only applies to securities
evidencing rights and interests that are not subordinated to the rights and
interests evidenced by the other securities of the same trust. Third, the
securities at the time of acquisition by or with ERISA plan assets must be
rated in one of the three highest generic rating categories by Standard and
Poor's, a Division of the McGraw-Hill Companies, Inc., Moody's Investors
Service, Inc., Duff & Phelps Credit Rating Company or Fitch IBCA, Inc., or,
together, the Rating Agencies. Fourth, the trustee cannot be an affiliate of
any other member of the Restricted Group, as defined below. Fifth, the sum of
all payments made to and retained by the underwriters must represent not more
than reasonable compensation for underwriting the securities; the sum of all
payments made to and retained by the depositor under the assignment of the
assets to the related trust must represent not more than the fair market value
of those obligations, and the sum of all payments made to and retained by the
master servicer, any servicer and any subservicer must represent not more than
reasonable compensation for that person's services under the related agreement
and reimbursement of that person's reasonable expenses in connection therewith.
Sixth, the Exemption requires that the investing Plan be an accredited investor
as defined in Rule 501(a)(1) of Regulation D of the Securities and Exchange
Commission under the Securities Act of 1933, as amended.

     The Restricted Group consists of the depositor, the related seller, any
underwriter, the trustee, the servicer, any obligor with respect to contracts
including the trust constituting more than five percent of the aggregate
unamortized principal balance of the assets in the trust, or any affiliate of
these parties.

     The Exemption also requires that a trust meet the following requirements:

      (1) The trust must consist solely of assets of a type that have been
         included in other investment pools;

      (2) Securities in those other investment pools must have been rated in one
         of the three highest categories of one of the Rating Agencies for at
         least one year prior to the Plan's acquisition of securities; and

      (3) Securities in those other investment pools must have been purchased by
         investors other than ERISA plans for at least one year prior to any
         Plan's acquisition of securities.

     A fiduciary of any Plan or other investor of ERISA plan assets
contemplating purchasing a certificate or note must make its own determination
that the general conditions described above will be satisfied for that
certificate or note.

     If the general conditions of the Exemption are satisfied, the Exemption
may provide an exemption from the restrictions imposed by Sections 406(a) and
407 of ERISA (as well as the excise taxes imposed by Sections 4975(a) and (b)
of the Internal Revenue Code by reason of Sections 4975(c)(1)(A) through (D) of
the Internal Revenue Code) in connection with the direct or indirect sale,
exchange, transfer, holding, acquisition or disposition in the secondary market
of securities by ERISA plans or with ERISA plan assets. However, no exemption
is provided from the restrictions of Sections 406(a)(1)(E) and 406(a)(2) of
ERISA in connection with the direct or indirect sale, exchange, transfer,
holding, acquisition


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<PAGE>

or disposition of a certificate or note by a Plan or with ERISA plan assets of
an "Excluded Plan", as defined below, by any person who has discretionary
authority or renders investment advice for ERISA plan assets of that Excluded
Plan. For purposes of the securities, an Excluded Plan is a Plan sponsored by
any member of the Restricted Group.

     If specific conditions of the Exemption are also satisfied, the Exemption
may provide an exemption from the restrictions imposed by Sections 406(b)(1)
and (b)(2) of ERISA and the taxes imposed by Section 4975(c)(1)(E) of the
Internal Revenue Code in connection with:

      o  the direct or indirect sale, exchange or transfer of securities in the
         initial issuance of securities between the Company or an underwriter
         and a Plan when the person who has discretionary authority or renders
         investment advice for the investment of the relevant ERISA plan assets
         in the securities is (a) a mortgagor as to 5% or less of the fair
         market value of the assets of the related trust or (b) an affiliate of
         that person,

      o  the direct or indirect acquisition or disposition of securities in the
         secondary market by a Plan or an entity investing ERISA plan assets,
         and

      o  the holding of securities by a Plan or an entity investing ERISA plan
         assets.

     Further, if specific conditions of the Exemption are satisfied, the
Exemption may provide an exemption from the restrictions imposed by Sections
406(a), 406(b) and 407(a) of ERISA, and the taxes imposed by Sections 4975(a)
and (b) of the Internal Revenue Code by reason of Section 4975(c) of the
Internal Revenue Code for transactions in connection with the servicing,
management and operation of the trusts. The depositor expects that the specific
conditions of the Exemption required for this purpose will be satisfied for the
securities so that the Exemption would provide an exemption from the
restrictions imposed by Sections 406(a) and (b) and 407(a) of ERISA, as well as
the excise taxes imposed by Sections 4975(a) and (b) of the Internal Revenue
Code by reason of Section 4975(c) of the Internal Revenue Code, for
transactions in connection with the servicing, management and operation of the
trusts, provided that the general conditions of the Exemption are satisfied.

     The Exemption also may provide an exemption from the restrictions imposed
by Sections 406(a) and 407(a) of ERISA, and the taxes imposed by Section
4975(a) and (b) of the Internal Revenue Code by reason of Sections
4975(c)(1)(A) through (D) of the Internal Revenue Code if those restrictions
would otherwise apply merely because a person is deemed to be a party in
interest for an investing Plan (or the investing entity holding ERISA plan
assets) by virtue of providing services to the Plan (or by virtue of having
specified relationships to that person) solely as a result of the ownership of
securities by a Plan or the investment of ERISA plan assets in securities.

     On July 21, 1997, the DOL amended the Exemption to extend exemptive relief
to various mortgage-backed and asset-backed securities transactions using
Funding Accounts for trusts issuing pass-through certificates. For the
securities, the amendment in most cases allows mortgage loans supporting
payments to securityholders, and having a value equal to no more than 25% of
the total principal amount of the securities being offered by a trust (the
Pre-Funding Limit), to be transferred to that trust within a 90-day or
three-month period following the closing date (the Pre-Funding Period) instead
of requiring that all those mortgage loans be either identified or transferred
on or before the closing date. In general, the relief applies to the purchase,
sale and holding of securities which otherwise qualify for the Exemption,
provided that the following general conditions are met:

      o  the ratio of the amount allocated to the pre-funding account to the
         total principal amount of the certificates being offered (the
         Pre-Funding Limit) must be less than or equal to 25%;

      o  all obligations transferred after the closing date (the subsequent
         mortgage loans) must meet the same terms and conditions for eligibility
         as the original mortgage loans used to create the trust, which terms
         and conditions have been approved by one of the exemption rating
         agencies;

      o  the transfer of those subsequent mortgage loans to the trust during the
         Pre-Funding Period must not result in the securities to be covered by
         the Exemption receiving a lower credit rating from a Rating Agency on
         termination of the Pre-Funding Period than the rating that was obtained
         at the time of the initial issuance of the securities by the trust;


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<PAGE>

      o  solely as a result of the use of pre-funding, the weighted average
         annual percentage interest rate, or Average Interest Rate, for all of
         the mortgage loans and subsequent mortgage loans in the trust at the
         end of the Pre-Funding Period must not be more than 100 basis points
         lower than the Average Interest Rate for the mortgage loans which were
         transferred to the trust on the closing date;

      o  in order to ensure that the characteristics of the subsequent mortgage
         loans are substantially similar to those of the original mortgage
         loans:

         o  the characteristics of the subsequent mortgage loans must be
            monitored by an insurer or other credit support provider which is
            independent of the depositor; or

         o  an independent accountant retained by the depositor must provide the
            depositor with a letter, with copies provided to the exemption
            rating agency rating the securities, the underwriter and the
            trustee, stating whether or not the characteristics of the
            subsequent mortgage loans conform to the characteristics described
            in the prospectus or prospectus supplement and/or agreement. In
            preparing that letter, the independent accountant must use the same
            type of procedures as were applicable to the mortgage loans which
            were transferred to the trust as of the closing date;

      o  the Pre-Funding Period must end no later than three months or 90 days
         after the closing date or earlier in various circumstances if the
         Funding Accounts falls below the minimum level specified in the
         agreement or an event of default occurs;

      o  amounts transferred to any Funding Accounts and/or capitalized interest
         accounts used in connection with the pre-funding may be invested only
         in permitted investments;

         o  the prospectus or prospectus supplement must describe any
            pre-funding account and/or capitalized interest account used in
            connection with the Funding Account, the duration of the Pre-Funding
            Period; the percentage and/or dollar amount of the Pre-Funding Limit
            for the trust; and that the amounts remaining in the funding account
            at the end of the Pre-Funding Period will be remitted to
            certificateholders as repayments of principal;

         o  the trustee, or any agent with which the trustee contracts to
            provide trust services, must be a substantial financial institution
            or trust company experienced in trust activities and familiar with
            its duties, responsibilities and liabilities as a fiduciary under
            ERISA. The trustee, as legal owner of the trust, must enforce all
            the rights created in favor of securityholders of the trust,
            including employee benefit plans subject to ERISA.

     Before purchasing a certificate or note, a fiduciary of a Plan or other
investor of ERISA plan assets should itself confirm:

      o  that the securities constitute "certificates" for purposes of the
         Exemption and

      o  that the specific and general conditions provided in the Exemption and
         the other requirements provided in the Exemption would be satisfied.

In addition to making its own determination as to the availability of the
exemptive relief provided in the Exemption, the fiduciary or other Plan
investor should consider its general fiduciary obligations under ERISA in
determining whether to purchase any securities by or with ERISA plan assets.

     Any fiduciary or other Plan investor which proposes to purchase securities
on behalf of or with ERISA plan assets should consult with its counsel
concerning the potential applicability of ERISA and the Internal Revenue Code
to that investment and the availability of the Exemption or any other
prohibited transaction exemption in connection with that purchase. In
particular, in connection with a contemplated purchase of securities
representing a beneficial ownership interest in a pool of single-family
residential first mortgage loans, that fiduciary or other Plan investor should
consider the potential availability of the Exemption or Prohibited Transaction
Class exemption (PTCE) 83-1, or PTCE 83-1, for various transactions involving
mortgage pool investment trusts. However, PTCE 83-1 does not provide exemptive
relief for securities evidencing interests in trusts which include Cooperative
Loans and may not provide exemptive relief for securities having particular
cash-flow characteristics that may be issued by a


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<PAGE>

trust. In addition, that fiduciary or other Plan investor should consider the
availability of PTCE 96-23, regarding transactions effected by "in-house asset
managers", PTCE 95-60, regarding investments by insurance company general
accounts, PTCE 90-1, regarding investments by insurance company pooled separate
accounts, PTCE 91-38, regarding investments by bank collective investment
funds, and PTCE 84-14, regarding transactions effected by "qualified
professional asset managers." The prospectus supplement for a series of
securities may contain additional information regarding the application of the
Exemption, PTCE 83-1, or any other exemption, for the securities offered by
that prospectus supplement. There can be no assurance that any of these
exemptions will apply for any particular Plan's or other Plan investor's
investment in the securities or, even if an exemption were deemed to apply,
that any exemption would apply to all prohibited transactions that may occur in
connection with that investment.

     In addition to any exemption that may be available under PTCE 95-60 for
the purchase and holding of the securities by an insurance company general
account, the Small Business Job Protection Act of 1996 added a new Section
401(c) to ERISA, which provides some exemptive relief from the provisions of
Part 4 of Title I of ERISA and Section 4975 of the Internal Revenue Code,
including the prohibited transaction restrictions imposed by ERISA and the
related excise taxes imposed by the Internal Revenue Code, for transactions
involving an insurance company general account. Under Section 401(c) of ERISA,
the DOL published Proposed 401(c) Regulations on December 22, 1997, however the
required final regulations have not been issued as of the date of this
prospectus. The Proposed 401(c) Regulations provide guidance for the purpose of
determining, in cases where insurance policies supported by an insurer's
general account are issued to or for the benefit of a Plan on or before
December 31, 1998, which general account assets constitute ERISA plan assets.
Section 401(c) of ERISA provides that, until the date which is 18 months after
the Proposed 401(c) Regulations become final, no person shall be subject to
liability under Part 4 of Title I of ERISA and Section 4975 of the Internal
Revenue Code on the basis of a claim that the assets of an insurance company
general account constitute ERISA plan assets, unless:

      o  as otherwise provided by the Secretary of Labor in the Proposed 401(c)
         Regulations to prevent avoidance of the regulations, or

      o  an action is brought by the Secretary of Labor for breaches of
         fiduciary duty which would also constitute a violation of federal or
         state criminal law. Any assets of an insurance company general account
         which support insurance policies issued to a Plan after December 31,
         1998 or issued to ERISA plans on or before December 31, 1998 for which
         the insurance company does not comply with the Proposed 401(c)
         Regulations may be treated as ERISA plan assets.

In addition, because Section 401(c) does not relate to insurance company
separate accounts, separate account assets are still treated as ERISA plan
assets of any Plan invested in that separate account. Insurance companies
contemplating the investment of general account assets in the securities should
consult with their legal counsel about the applicability of Section 401(c) of
ERISA, including the general account's ability to continue to hold the
securities after the date which is 18 months after the date the Proposed 401(c)
Regulations become final.

     Representations from ERISA Plans Investing in Securities. The exemptive
relief afforded by the Exemption, or any similar exemption that might be
available, will not apply to the purchase, sale or holding of some securities,
such as subordinate securities or any securities which are not rated in one of
the three highest generic rating categories by the exemption rating agencies.
Therefore, transfers of any securities which would cause the assets of the
trust to be deemed ERISA plan assets the purchase, holding or transfer of which
would not be covered by the Exemption or PTCE 83-1, to a Plan, to a trustee or
other person acting on behalf of any Plan, or to any other person investing
ERISA plan assets to effect that acquisition will not be registered by the
trustee unless the transferee provides the depositor, the trustee and the
master servicer with an opinion of counsel satisfactory to the depositor, the
trustee and the master servicer. This opinion will not be at the expense of the
depositor, the trustee or the master servicer, and it will state that the
purchase of those securities by or on behalf of that Plan is permissible under
applicable law, will not constitute or result in any non-exempt prohibited
transaction under ERISA or Section 4975 of the Internal Revenue Code and will
not subject the depositor, the trustee or the master servicer to any obligation
in addition to those undertaken in the related agreement.


                                      105
<PAGE>

     In lieu of that opinion of counsel, the transferee may provide a
certification substantially to the effect that the purchase of securities by or
on behalf of that Plan is permissible under applicable law, will not constitute
or result in any non-exempt prohibited transaction under ERISA or Section 4975
of the Internal Revenue Code and will not subject the depositor, the trustee or
the master servicer to any obligation in addition to those undertaken in the
agreement and that the following statements are correct:

      o  the transferee is an insurance company;

      o  the source of funds used to purchase that securities is an "insurance
         company general account" (as that term is defined in PTCE 95-60);

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

      o  there is no Plan for which the amount of that general account's
         reserves and liabilities for contracts held by or on behalf of that
         Plan and all other ERISA plans maintained by the same employer, or any
         "affiliate" of that employer, as defined in PTCE 95-60, or by the same
         employee organization exceed 10% of the total of all reserves and
         liabilities of that general account, as determined under PTCE 95-60, as
         of the date of the acquisition of those securities.

     An opinion of counsel or certification will not be required for the
purchase of securities registered through DTC. Any purchaser of a security
registered through DTC will be deemed to have represented by that purchase that
either (a) the purchaser is not a Plan and is not purchasing those securities
on behalf of, or with ERISA plan assets of, any Plan or (b) the purchase of
those securities by or on behalf of, or with ERISA plan assets of, any Plan is
permissible under applicable law, will not result in any non-exempt prohibited
transaction under ERISA or Section 4975 of the Internal Revenue Code and will
not subject the depositor, the trustee or the master servicer to any obligation
in addition to those undertaken in the related agreement.

     Tax Exempt Investors. A Tax Exempt Investor nonetheless will be subject to
federal income taxation to the extent that its income is "unrelated business
taxable income," or UBTI, within the meaning of Section 512 of the Internal
Revenue Code. All "excess inclusions" of a REMIC allocated to a REMIC residual
certificate held by a Tax-Exempt Investor will be considered UBTI and thus will
be subject to federal income tax. See "Material Federal Income Tax
Consequences--Taxation of Owners of REMIC Residual Certificates--Excess
Inclusions."

     Consultation With Counsel. Any fiduciary of a Plan or other Plan investor
that proposes to acquire or hold securities on behalf of a Plan or with ERISA
plan assets should consult with its counsel about the potential applicability
of the fiduciary responsibility provisions of ERISA and the prohibited
transaction provisions of ERISA and the Internal Revenue Code to the proposed
investment and the availability of the Exemption, PTCE 83-1 or any other
prohibited transaction exemption.


                               LEGAL INVESTMENT

     Each class of securities offered by this prospectus and by the related
prospectus supplement will be rated at the date of issuance in one of the four
highest rating categories by at least one rating agency. In most cases,
securities of any series will constitute "mortgage related securities" for
purposes of the Secondary Mortgage Market Enhancement Act of 1984, or SMMEA, so
long as they are rated by a rating agency in one of its two highest categories
and, as such, will be legal investments for persons, trusts, corporations,
partnerships, associations, business trusts and business entities. This group
includes, but is not limited to, state-chartered savings banks, commercial
banks, savings and loan associations and insurance companies, as well as
trustees and state government employee retirement systems, created under or
existing under the laws of the United States or of any State, including the
District of Columbia and Puerto Rico, whose authorized investments are subject
to State regulation to the same extent that, under applicable law, obligations
issued by or guaranteed as to principal and interest by the United States or
any agency or instrumentality of the United States constitute legal investments
for those entities. Any class of securities that represents an interest in a
trust that includes junior mortgage loans will not constitute "mortgage related
securities" for purposes of SMMEA.


                                      106
<PAGE>

     Under SMMEA, if a State enacted legislation prior to October 4, 1991
specifically limiting the legal investment authority of those entities in
relation to "mortgage related securities," the securities will constitute legal
investments for entities subject to that legislation only to the extent
provided in that legislation. Some States have enacted legislation which
overrides the preemption provisions of SMMEA. SMMEA provides, however, that in
no event will the enactment of that legislation affect the validity of any
contractual commitment to purchase, hold or invest in "mortgage related
securities," or require the sale or other disposition of those securities so
long as that contractual commitment was made or those securities acquired prior
to the enactment of that legislation.

     SMMEA also amended the legal investment authority of federally chartered
depository institutions as follows: federal savings and loan associations and
federal savings banks may invest in, sell or otherwise deal with
mortgage-related securities without limitations as to the percentage of their
assets represented by those mortgage-related securities, federal credit unions
may invest in mortgage-related securities, and national banks may purchase
mortgage-related securities for their own account without regard to the
limitations applicable to investment securities provided in 12 U.S.C. 24
(Seventh), subject in each case to the regulations as the applicable federal
regulatory authority may prescribe.

     On April 23, 1998, the Federal Financial Institutions Examination Council
issued the 1998 Policy Statement applicable to all depository institutions,
providing guidelines for investments in "high-risk mortgage securities." The
1998 Policy Statement was adopted by the Federal Reserve Board, the Office of
the Comptroller of the Currency, the FDIC, the NCUA and the OTS with an
effective date of May 26, 1998. The 1998 Policy Statement rescinded a 1992
policy statement that had required, prior to purchase, a depository institution
to determine whether a mortgage derivative product that it was considering
acquiring was high-risk, and, if so, required that the proposed acquisition
would reduce the institution's overall interest rate risk. The 1998 Policy
Statement eliminates constraints on investing in "high-risk" mortgage
derivative products and substitutes broader guidelines for evaluating and
monitoring investment risk.

     The OTS has issued Thrift Bulletin 13a, entitled "Management of Interest
Rate Risk, Investment Securities, and Derivatives Activities," or TB 13a, which
is effective as of December 1, 1998 and applies to thrift institutions
regulated by the OTS. One of the primary purposes of TB 13a is to require
thrift institutions, prior to taking any investment position to conduct:

     a pre-purchase portfolio sensitivity analysis for any "significant
     transaction" involving securities or financial derivatives, and

     a pre-purchase price sensitivity analysis of any "complex security" or
   financial derivative.

For the purposes of TB 13a, "complex security" includes, among other things,
any collateralized mortgage obligation or REMIC security, other than any "plain
vanilla" mortgage pass-through security, that is, securities that are part of a
single class of securities in the related pool that are non-callable and do not
have any special features. One or more classes of certificates offered by this
prospectus and by the related prospectus supplement may be viewed as "complex
securities". The OTS recommends that while a thrift institution should conduct
its own in-house pre-acquisition analysis, it may rely on an analysis conducted
by an independent third-party as long as management understands the analysis
and its key assumptions. Further, TB 13a recommends that the use of "complex
securities with high price sensitivity" be limited to transactions and
strategies that lower a thrift institution's portfolio interest rate risk. TB
13a warns that investment in complex securities by thrift institutions that do
not have adequate risk measurement, monitoring and control systems may be
viewed by OTS examiners as an unsafe and unsound practice.

     Some classes of securities offered by this prospectus, including any class
that is not rated in one of the two highest categories by at least one rating
agency, will not constitute "mortgage related securities" for purposes of
SMMEA. Those classes of securities will be identified in the related prospectus
supplement. Prospective investors in those classes of securities, in
particular, should consider the matters discussed in the following paragraph.

     There may be other restrictions on the ability of some investors either to
purchase various classes of securities or to purchase any class of securities
representing more than a specified percentage of the


                                      107
<PAGE>

investors' assets. The depositor will make no representations as to the proper
characterization of any class of securities for legal investment or other
purposes, or as to the ability of particular investors to purchase any class of
securities under applicable legal investment restrictions. These uncertainties
may adversely affect the liquidity of any class of securities. Accordingly, all
investors whose investment activities are subject to legal investment laws and
regulations, regulatory capital requirements or review by regulatory
authorities should consult with their own legal advisors in determining whether
and to what extent the securities of any class constitute legal investments
under SMMEA or are subject to investment, capital or other restrictions, and,
if applicable, whether SMMEA has been overridden in any jurisdiction applicable
to that investor.


                                 LEGAL MATTERS

     Some specific legal matters in connection with the securities offered by
this prospectus will be passed on for the depositor and for the underwriters by
Thacher Proffitt & Wood, New York, New York, Brown & Wood LLP, New York, New
York or Stroock & Stroock & Lavan LLP, New York, New York.


                                 THE DEPOSITOR

     The depositor was incorporated in the State of Delaware on April 14, 1988
and is a wholly-owned subsidiary of Donaldson, Lufkin & Jenrette Inc., a
Delaware corporation. The principal executive offices of the depositor are
located at 277 Park Avenue, 9th Floor, New York, New York 10172. Its telephone
number is (212) 892-3000.

     The depositor was organized, among other things, for the purposes of
establishing trusts, selling beneficial interests in those trusts and acquiring
and selling mortgage assets to those trusts. The depositor has one class of
common stock, all of which is owned by Donaldson, Lufkin & Jenrette Inc.

     Neither the depositor, its parent nor any of the depositor"s affiliates
will ensure or guarantee distributions on the securities of any series.

     As described in this prospectus, the only obligations of the depositor
will be under various representations and warranties relating the mortgage
assets. See "Loan Underwriting Standards-- Representations and Warranties" and
"The Agreements--Assignment of Mortgage Assets" in this prospectus. The
depositor will have no ongoing servicing responsibilities or other
responsibilities for any Mortgage Asset. The depositor does not have nor is it
expected in the future to have any significant assets with which to meet any
obligations for any trust. If the depositor were required to repurchase or
substitute a loan, its only source of funds to make the required payment would
be funds obtained from the seller of that loan, or if applicable, the master
servicer or, the servicer. See "Risk Factors" in this prospectus.


                                USE OF PROCEEDS

     The depositor will apply all or substantially all of the net proceeds from
the sale of each series offered by this prospectus and by the related
prospectus supplement to purchase the mortgage assets, to repay indebtedness
which has been incurred to obtain funds to acquire the mortgage assets, to
establish the reserve funds, if any, for the series and to pay costs of
structuring, guaranteeing and issuing the securities. In some cases, securities
may be exchanged by the depositor for mortgage assets. The depositor expects
that it will make additional sales of securities similar to the securities from
time to time, but the timing and amount of those additional offerings will be
dependent on a number of factors, including the volume of mortgage loans
purchased by the depositor, prevailing interest rates, availability of funds
and general market conditions.


                             PLAN OF DISTRIBUTION

     The securities offered by this prospectus and by the related prospectus
supplements will be offered in series may be sold directly by the depositor or
may be offered through the underwriters through one or more of the methods
described below. The prospectus supplement prepared for each series will
describe the method of offering being utilized for that series and will state
the net proceeds to the depositor from that sale.


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<PAGE>

     The depositor intends that securities will be offered through the
following methods from time to time and that offerings may be made concurrently
through more than one of these methods or that an offering of a particular
series of securities may be made through a combination of two or more of these
methods. The methods are as follows:


      o  by negotiated firm commitment or best efforts underwriting and public
         re-offering by the underwriters;


      o  by placements by the depositor with institutional investors through
         dealers; and


      o  by direct placements by the depositor with institutional investors.


     In addition, if specified in the related prospectus supplement, a series
of securities may be offered in whole or in part in exchange for the loans, and
other assets, if applicable, that would comprise the trust for those
securities.


     If underwriters are used in a sale of any securities, other than in
connection with an underwriting on a best efforts basis, those securities will
be acquired by the underwriters for their own account and may be resold from
time to time in one or more transactions, including negotiated transactions, at
fixed public offering prices or at varying prices to be determined at the time
of sale or at the time of commitment therefor. The managing underwriter or
underwriters related to the offer and sale of a particular series of securities
will be named on the cover of the prospectus supplement relating to that series
and the members of the underwriting syndicate, if any, will be named in that
prospectus supplement.


     In connection with the sale of the securities, the underwriters may
receive compensation from the depositor or from purchasers of the securities in
the form of discounts, concessions or commissions. Underwriters and dealers
participating in the distribution of the securities may be deemed to be
underwriters in connection with those securities, and any discounts or
commissions received by them from the depositor and any profit on the resale of
securities by them may be deemed to be underwriting discounts and commissions
under the Securities Act of 1933, as amended.


     It is anticipated that the underwriting agreement pertaining to the sale
of any series of securities will provide that the obligations of the
underwriters will be subject to various conditions precedent, that the
underwriters will be obligated to purchase those securities if any are
purchased, other than in connection with an underwriting on a best efforts
basis, and that, in limited circumstances, the depositor will indemnify the
several underwriters and the underwriters will indemnify the depositor against
civil liabilities, including liabilities under the Securities Act of 1933, as
amended, or will contribute to payments required to be made in connection with
those civil liabilities.


     The prospectus supplement for any series offered by placements through
dealers will contain information regarding the nature of that offering and any
agreements to be entered into between the depositor and purchasers of
securities of that series.


     This prospectus, together with the related prospectus supplement, may be
used by Donaldson, Lufkin & Jenrette Securities Corporation, an affiliate of
the depositor, in connection with offers and sales related to market making
transactions in the securities in which Donaldson, Lufkin & Jenrette acts as
principal or agent. Sales in such transactions will be made at prices related
to prevailing prices at the time of sale.


     The depositor anticipates that the securities offered by this prospectus
will be sold primarily to institutional investors or sophisticated
non-institutional investors. Purchasers of securities, including dealers, may,
depending on the facts and circumstances of those purchases, be deemed to be
"underwriters" within the meaning of the Securities Act of 1933, as amended, in
connection with reoffers and sales by them of securities. Holders of securities
should consult with their legal advisors in this regard prior to that reoffer
or sale.


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<PAGE>

                                   GLOSSARY

     1998 POLICY STATEMENT--The revised supervisory statement setting for the
guidelines for investments in "high risk mortgage securities". The 1998 Policy
Statement was adopted by the Federal Reserve Board, the Office of the
Comptroller of the Currency, the FDIC, the NCUA and the OTS with an effective
date of May 26, 1998.

     401(C) REGULATIONS--The unissued final regulations, for proposed
regulations of the DOL published on December 22, 1997, Section 401(c) of ERISA.


     ACCRUAL TERMINATION DATE--For a class of accrual securities, the
distribution date on which all securities of the related series with final
scheduled distribution dates earlier than that of that class of accrual
securities have been fully paid, or another date or period as may be specified
in the related prospectus supplement.

     ADDITIONAL COLLATERAL--Marketable securities, insurance policies,
annuities, certificates of deposit, cash, accounts or other personal property
and, in the case of Additional Collateral owned by any guarantor, may consist
of real estate.

     ADDITIONAL COLLATERAL LOAN--A mortgage loan that, in addition to being
secured by the related mortgaged property, is secured by other collateral owned
by the related mortgagors or are supported by third-party guarantees secured by
collateral owned by the related guarantors.

     ADVANCE--A cash advance by the master servicer or a servicer for
delinquent payments of principal of and interest on a loan, and for the other
purposes specified in this prospectus and in the related prospectus supplement.


     AGENCY SECURITIES--Mortgage-backed securities issued or guaranteed by
GNMA, Fannie Mae, Freddie Mac or other government agencies or
government-sponsored agencies.

     AVAILABLE DISTRIBUTION AMOUNT--The amount in the Certificate Account,
including amounts deposited in that account from any reserve fund or other fund
or account, eligible for distribution to securityholders on a distribution
date.

     BALLOON LOAN--A mortgage loan with payments similar to a conventional
loan, calculated on the basis of an assumed amortization term, but providing
for a Balloon Payment of all outstanding principal and interest to be made at
the end of a specified term that is shorter than that assumed amortization
term.

     BALLOON PAYMENT--The payment of all outstanding principal and interest
made at the end of the term of a Balloon Loan.

     BI-WEEKLY LOAN--A mortgage loan which provides for payments of principal
and interest by the borrower once every two weeks.

     BUY-DOWN FUND--A custodial account, established by the master servicer or
the servicer for a Buy-Down Loan, that meets the requirements described in this
prospectus.

     BUY-DOWN LOAN--A level payment mortgage loan for which funds have been
provided by a person other than the mortgagor to reduce the mortgagor's
scheduled payment during the early years of that mortgage loan.

     BUY-DOWN PERIOD--The period in which the borrower is not obligated to pay
the full scheduled payment otherwise due on a Buy-Down Loan.

     BUY-DOWN MORTGAGE RATE--For any Buy-Down Loan, the hypothetical reduced
interest rate on which scheduled payments are based.

     BUY-DOWN AMOUNTS--For any Buy-Down Loan, the maximum amount of funds that
may be contributed by the Servicer of that Buy-Down Loan.

     CALL CERTIFICATE--Any Certificate evidencing an interest in a Call Class.

     CALL CLASS--A class of certificates under which the holder will have the
right, at its sole discretion, to terminate the related trust resulting in
early retirement of the certificates of the series.


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<PAGE>

     CALL PRICE--In the case of a call as to a Call Class, a price equal to
100% of the principal balance of the related certificates as of the day of that
purchase plus accrued interest at the applicable pass-through rate.

     CERTIFICATE ACCOUNT--For a series, the account established in the name of
the trustee for the deposit of remittances received from the master servicer
relating to the mortgage assets in a trust.

     COLLECTION ACCOUNT--For a series, the account established in the name of
the master servicer for the deposit by the master servicer of payments received
from the mortgage assets in a trust, or from the servicers, if any.

     CONTRIBUTIONS TAX--The imposition of a tax on the REMIC equal to 100% of
the value of the contributed property. Each pooling and servicing agreement
will include provisions designed to prevent the acceptance of any contributions
that would be subject to the tax.

     COOPERATIVE--A corporation owned by tenant-stockholders who, through the
ownership of stock, shares or membership certificates in the corporation,
receive proprietary leases or occupancy agreements which confer exclusive
rights to occupy specific units.

     COOPERATIVE DWELLING--An individual housing unit in a building owned by a
cooperative.

     COOPERATIVE LOAN--A housing loan made for a Cooperative Dwelling and
secured by an assignment by the borrower/tenant-stockholder, of a security
interest in shares issued by the applicable Cooperative.

     DESIGNATED SELLER TRANSACTION--A series of securities where the mortgage
loans included in the trust are delivered either directly or indirectly to the
depositor by one or more unaffiliated sellers identified in the related
prospectus supplement.

   DISQUALIFIED PERSONS--For these purposes means:

      o  the United States, any State or political subdivision of the United
         States or any State, any foreign government, any international
         organization, or any agency or instrumentality of the foregoing, but
         would not include instrumentalities described in Section 168(h)(2)(D)
         of the Internal Revenue Code or Freddie Mac,

      o  any organization, other than a cooperative described in Section 521 of
         the Internal Revenue Code, that is exempt from federal income tax,
         unless it is subject to the tax imposed by Section 511 of the Internal
         Revenue Code,

      o  any organization described in Section 1381(a)(2)(C) of the Internal
         Revenue Code,

      o  an "electing large partnership," as described in Section 775 of the
         Code, or

      o  any other person so designated by the trustee based on an opinion of
         counsel that the holding of an ownership interest in a REMIC
         certificate by that person may cause the related trust or any person
         having an ownership interest in the REMIC certificate, other than that
         person, to incur a liability for any federal tax imposed under the Code
         that would not otherwise be imposed but for the transfer of an
         ownership interest in a REMIC certificate to that person.

   ELIBIBLE ACCOUNT--An account maintained with a federal or state chartered
        depository institution:

      o  the short-term obligations of which are rated by each rating agency in
         its highest rating at the time of any deposit in that account,

      o  insured by the FDIC to the limits established by that Corporation, the
         uninsured deposits in which account are otherwise secured in a way
         that, as evidenced by an opinion of counsel delivered to the trustee
         prior to the establishment of that account, the holders of the
         securities will have a claim as to the funds in that account and a
         perfected first priority security interest against any collateral
         securing those funds that is superior to claims of any other depositors
         or general creditors of the depository institution with which that
         account is maintained a trust account or accounts maintained with a
         federal or state chartered depository institution or trust company with
         trust powers acting in its fiduciary capacity, or


                                      111
<PAGE>

      o  an account or accounts of a depository institution acceptable to the
         rating agencies.

Eligible Accounts may bear interest.

     ENVIRONMENTAL LIEN--A lien imposed by federal or state statute, for any
cleanup costs incurred by a state on the property that is the subject of the
cleanup costs.

     ESCROW ACCOUNT--An account, established and maintained by the master
servicer or the servicer for a loan, into which payments by borrowers to pay
taxes, assessments, mortgage and hazard insurance premium and other comparable
items that are required to be paid to the mortgagee are deposited.

     FUNDING ACCOUNT --An account established for the purpose of purchasing
additional loans.

     GEM LOAN--A fixed rate, fully amortizing mortgage loan providing for
monthly payments based on a 10-to 30-year amortization schedule, with further
provisions for scheduled annual payment increases for a number of years with
the full amount of those increases being applied to principal, and with further
provision for level payments thereafter.

     GPM FUND--A trust account established by the master servicer or the
servicer of a GPM Loan into which funds sufficient to cover the amount by which
payments of principal and interest on that GPM Loan assumed in calculating
payments due on the securities of the related multiple class series exceed
scheduled payments on that GPM Loan.

   GPM LOAN--A mortgage loan providing for graduated payments, having an
        amortization schedule:

      o  requiring the mortgagor's monthly installments of principal and
         interest to increase at a predetermined rate annually for a
         predetermined period of time after which the monthly installments
         became fixed for the remainder of the mortgage term,

      o  providing for deferred payment of a portion of the interest due monthly
         during that period of time, and

      o  providing for recoupment of the interest deferred through negative
         amortization whereby the difference between the scheduled payment of
         interest on the mortgage note and the amount of interest actually
         accrued is added monthly to the outstanding principal balance of the
         mortgage note.

     INSURANCE PROCEEDS--Amounts paid by the insurer under any of the insurance
policies covering any loan or mortgaged property.

     INTEREST ACCRUAL PERIOD--The period specified in the related prospectus
supplement for a multiple class series, during which interest accrues on the
securities or a class of securities of that series for any distribution date.

     LIQUIDATION EXPENSES--Expenses incurred by the master servicer, or the
related servicer, in connection with the liquidation of any defaulted mortgage
loan and not recovered under a primary mortgage insurance policy.

     LIQUIDATED MORTGAGE LOAN--A defaulted mortgage loan as to which the master
servicer has determined that all amounts which it expects to recover from or on
account of that mortgage loan, whether from Insurance Proceeds, Liquidation
Proceeds or otherwise have been recovered.

     LIQUIDATION PROCEEDS--Amounts received by the master servicer or servicer
in connection with the liquidation of a mortgage, net of liquidation expenses.

     MARK-TO-MARKET REGULATIONS--The final regulations of the IRS, released on
December 24, 1996, relating to the requirement that a securities dealer mark to
market securities held for sale to customers.

     PARTIES IN INTEREST--For a Plan, persons who have specified relationships
to the Plans, either 'Parties in Interest' within the meaning of ERISA or
Disqualified Persons within the meaning of the Internal Revenue Code.

     PERIODIC RATE CAP--For any ARM loan, the maximum amount by which mortgage
rate of that ARM loan may adjust for any single adjustment period.


                                      112
<PAGE>

     PRE-FUNDING PERIOD--For the securities, the period in which supporting
payments of the related mortgage loans, having a value equal to no more than
25% of the total principal amount of those securities, to be transferred to the
related trust instead of requiring that the related mortgage loans be either
identified or transferred on or before the Closing Date, which period will be
no longer than 90 days or three months following the Closing Date.

     PRE-FUNDING LIMIT--For the securities, the ratio of the amount allocated
to the Funding Account to the total principal amount of the securities, which
must be less than or equal to 25%.

     QUALIFIED INSURER--A mortgage guarantee or insurance company duly
qualified as a mortgage guarantee or insurance company under the laws of the
states in which the mortgaged properties are located, duly authorized and
licensed in those states to transact the applicable insurance business and to
write the insurance provided.

     REO PROPERTY--Real property which secured a defaulted loan which has been
acquired on foreclosure, deed in lieu of foreclosure or repossession.

     RETAINED INTEREST--For a mortgage asset, the amount or percentage
specified in the related prospectus supplement which is not sold by the
depositor or seller of the mortgage asset and, therefore, is not included in
the trust for the related series.

     RESTRICTED GROUP--The group consisting of any underwriter, the master
servicer, any servicer, any subservicer, the trustee and any obligor for assets
of a trust constituting more than 5% of the aggregate unamortized principal
balance of the assets in the trust as of the date of initial issuance of the
securities.

     SERVICER ACCOUNT--An account established by a servicer, other than the
master servicer, who is directly servicing loans, into which that servicer will
be required to deposit all receipts received by it relating to the mortgage
assets serviced by that servicer.

     SERVICING FEE--The amount paid to the master servicer on a given
distribution date, in most cases, determined on a loan-by-loan basis, and
calculated at a specified per annum rate.

     SUBORDINATED AMOUNT--The amount, if any, specified in the related
prospectus supplement for a series with a class of subordinate securities, that
the subordinate securities are subordinated to the senior securities of the
same series.

     SUBORDINATION RESERVE FUND--The subordination reserve fund, if any, for a
series with a class of subordinate securities, established under the related
pooling and servicing agreement or indenture.

     SUBSEQUENT MORTGAGE LOAN--Additional mortgage loans transferred to the
related trust after the closing date.

     SUBSIDY FUND--For any loan, a custodial account, which may be
interest-bearing, complying with the requirements applicable to a Collection
Account in which the master servicer will deposit subsidy funds.

     TAX-EXEMPT INVESTOR--Tax-qualified retirement plans described in Section
401(a) of the Internal Revenue Code and on individual retirement accounts
described in Section 408 of the Internal Revenue Code.

     TAX FAVORED PLANS--An ERISA plan that is exempt from federal income
taxation under Section 501 of the Internal Revenue Code.

     UNITED STATES PERSON--"United States person" means a citizen or resident
of the United States, a corporation, partnership or other entity created or
organized in, or under the laws of, the United States, any state of the United
States or the District of Columbia, except, in the case of a partnership, to
the extent provided in regulations, or an estate whose income is subject to
United States federal income tax regardless of its source, or a trust if a
court within the United States is able to exercise primary supervision over the
administration of the trust and one or more United States persons have the
authority to control all substantial decisions of the trust. To the extent
prescribed in regulations by the Secretary of the Treasury, which regulations
have not yet been issued, a trust which was in existence on August 20, 1996,


                                      113
<PAGE>

other than a trust treated as owned by the grantor under subpart E of part I of
subchapter J of chapter 1 of the Code, and which was treated as a United States
person on August 19, 1996, may elect to continue to be treated as a United
States person regardless of the previous sentence.


     The information in this prospectus is not complete and may be changed. We
may not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an
offer to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.


     You should carefully consider the Risk Factors beginning on Page 3 in this
prospectus.


     This prospectus together with the accompanying prospectus supplement will
constitute the full prospectus.

















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<PAGE>

                          DLJ MORTGAGE ACCEPTANCE CORP.
                                    DEPOSITOR



                     DLJ MORTGAGE PASS-THROUGH CERTIFICATES,
                                 SERIES 2000-S4
                                  $209,581,228
                                  (APPROXIMATE)




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

                             PROSPECTUS SUPPLEMENT

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

                          DONALDSON, LUFKIN & JENRETTE


You should rely only on the information contained or incorporated by reference
in this prospectus supplement and the accompanying prospectus. We have not
authorized anyone to provide you with different information.

We are not offering the Series 2000-S4 DLJ Mortgage Pass-Through Certificates in
any state where the offer is not permitted.

We do not claim that the information in this prospectus supplement is accurate
as of any date other than the dates stated on the respective covers.

Dealers will deliver a prospectus supplement and prospectus when acting as
underwriters of the Series 2000-S4 DLJ Mortgage Pass-Through Certificates and
for their unsold allotments or subscriptions. In addition, all dealers selling
the Series 2000-S4 DLJ Mortgage Pass-Through Certificates will be required to
deliver a prospectus supplement and prospectus for ninety days following the
date of this prospectus supplement.



                               September 28, 2000



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