DLJ MORTGAGE ACCEPTANCE CORP
424B5, 2000-09-29
ASSET-BACKED SECURITIES
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<PAGE>

           PROSPECTUS SUPPLEMENT (TO PROSPECTUS DATED MARCH 2, 2000)


                         DLJ MORTGAGE ACCEPTANCE CORP.
                                   DEPOSITOR


                          DLJ ABS TRUST SERIES 2000-3

               MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2000-3

                                 $204,598,000
                                 (APPROXIMATE)

YOU SHOULD CAREFULLY REVIEW THE INFORMATION IN "RISK FACTORS" ON PAGE S-7 IN
THIS PROSPECTUS SUPPLEMENT AND PAGE 3 IN THE PROSPECTUS.


This prospectus supplement may be used to offer and sell the certificates only
if accompanied by the prospectus.


THE TRUST WILL ISSUE:


 o  Three classes of senior Class A Certificates

 o  One class of senior interest-only Class A-IO Certificates

 o  One class of senior residual Class R Certificates.

 o  Four classes of subordinate certificates, which provide enhancement for the
    senior certificates and each class of subordinate certificates, if any, with
    a higher payment priority.

 o  One class of certificates that receives the prepayment premiums on the
    mortgage loans.

THE CERTIFICATES:

 o  Represent ownership interests in a trust, whose assets are primarily a pool
    of fixed and adjustable rate, first lien residential mortgage loans that
    were generally originated in accordance with underwriting guidelines that
    are not as strict as Fannie Mae and Freddie Mac guidelines.


 o  Represent obligations of the trust only and do not represent an interest in
    or obligation of the depositor, the servicers, the special servicer, the
    sellers, the trustee or any of their affiliates or any other entity.


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


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 loans 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 certificates, and the investors in the subordinate
    certificates in particular.


Credit enhancement for the offered certificates will be provided by excess
interest, overcollateralization and subordination.


Donaldson, Lufkin & Jenrette Securities Corporation, as underwriter, will buy
the offered certificates from DLJ Mortgage Acceptance Corp., the depositor, at
a price equal to approximately 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 multiple 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.


Delivery of the offered certificates, other than the Class R Certificates, will
be made in book-entry form through the facilities of The Depository Trust
Company, Clearstream, Luxembourg and the Euroclear System on or after September
28, 2000.


                         DONALDSON, LUFKIN & JENRETTE
                               September 27, 2000
<PAGE>

                               TABLE OF CONTENTS



<TABLE>
<CAPTION>
                                                 PAGE
                                                -----
<S>                                             <C>
           PROSPECTUS SUPPLEMENT
---------------------------------------------
Summary Information .........................    S-3
Risk Factors ................................    S-7
Important Notice About Information
   Presented in this Prospectus
   Supplement and the Prospectus ............   S-14
The Mortgage Pool ...........................   S-14
The Sellers .................................   S-24
Servicing of Mortgage Loans .................   S-25
Description of the Certificates .............   S-30
Yield, Prepayment and Maturity
   Considerations ...........................   S-41
Use of Proceeds .............................   S-49
Material Federal Income Tax
   Consequences .............................   S-49
ERISA Considerations ........................   S-52
Legal Investment Considerations .............   S-54
Method of Distribution ......................   S-54
Legal Matters ...............................   S-54
Ratings .....................................   S-55
Annex I Global Clearance, Settlement
   And Tax Documentation Procedures .........    I-1
</TABLE>



<PAGE>
<TABLE>
<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.


MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 2000-3



<TABLE>
<CAPTION>
                                                           INITIAL RATING
                                                                 OF
                   APPROXIMATE           PASS-              CERTIFICATES
                  INITIAL CLASS         THROUGH      ---------------------------   DESIGNATIONS
                    PRINCIPAL            RATE           S&P     FITCH   MOODY'S         AND
      CLASS          BALANCE          (PER ANNUM)     RATING   RATING    RATING      FEATURES
--------------- ----------------- ------------------ -------- -------- --------- ----------------
 <S>              <C>                 <C>             <C>      <C>       <C>      <C>
  OFFERED
  CERTIFICATES
       A-1         $72,862,000         6.93 %(1)        AAA      AAA      Aaa         Senior
       A-2         $80,000,000         6.96 %(1)        AAA      AAA      Aaa         Senior
       A-3         $19,000,000         7.49 %(1)        AAA      AAA      Aaa         Senior
       A-IO                 (2)        0.35 %           AAA      AAA      Aaa      Sr./Interest
                                                                                       Only
       M-1         $17,902,500         7.27 %(1)        AA       AA       N/A       Subordinate
       M-2         $ 7,672,500         7.67 %(1)         A        A       N/A       Subordinate
        B          $ 7,161,000         8.87 %(1)       BBB--    BBB--     N/A       Subordinate
        R          $        50         6.93 %(1)        AAA      AAA      N/A     Senior/Residual
       NON-
     OFFERED
  CERTIFICATES
                                                                                     Prepayment
        P          $         0         0.000%           N/A      N/A      N/A        Penalties
        X          $         0         0.000%           N/A      N/A      N/A       Subordinate
</TABLE>

----------------------
(1)   Pass-through rate applicable to the first distribution date. After the
      first distribution date, interest will accrue on the Class A-1, Class
      A-2, Class A-3, Class M-1, Class M-2, Class B and Class R Certificates
      based upon one-month LIBOR plus a specified certificate margin, subject
      to a cap, as described in this prospectus supplement under "Description
      of the Certificates--Distributions of Interest."

(2)   The Class A-IO Certificates are interest only certificates, will have no
      principal balance and will accrue interest on their notional amount. The
      initial Class A-IO notional amount will be approximately $204,598,975.


The offered certificates, other than the Class R Certificates, will be
book-entry certificates. The Class R Certificates will be physical
certificates.


The certificates are subject to a variance of no more than 5% prior to their
issuance.


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.


SELLERS

PNC Mortgage Securities Corp. (referred to in this prospectus supplement as
PNC) and DLJ Mortgage Capital, Inc. (referred to in this prospectus supplement
as DLJMC) are sellers of all of the mortgage loans.


SERVICERS

Calmco Servicing L.P. (referred to in this prospectus supplement as Calmco),
Old Kent Mortgage Company (referred to in this prospectus supplement as Old
Kent) and PNC will initially service 60.48%, 3.62% and 35.90% (by principal
balance as of the cut-off date), respectively, of the mortgage loans.


SPECIAL SERVICER

 o  Calmco Servicing L.P.


TRUSTEE

 o  Wells Fargo Bank Minnesota, N.A.


CUT-OFF DATE

 o  September 1, 2000.


CLOSING DATE

 o  September 28, 2000.


DETERMINATION DATE

 o  A day not later than the 10th day preceding each distribution date.


DISTRIBUTION DATE

 o  Distributions on the certificates will be made on the 25th day of each
    month or, if the 25th day is not a business day, the next business day,
    commencing in October 2000.


                                      S-3
<PAGE>

RECORD DATE

 o  The business day immediately preceding each distribution date.


MORTGAGE POOL

On September 28, 2000, the trust will acquire a pool of mortgage loans which
will be secured by mortgages, deeds of trust, or other security instruments,
all of which are referred to in this prospectus supplement as mortgages.

As of the cut-off date, the mortgage pool consists of approximately 1,331
mortgage loans with an aggregate principal balance of approximately
$204,598,975.

The mortgage loans include conventional, adjustable- and fixed-rate, fully
amortizing and balloon, first lien residential mortgage loans, all of which
have original terms to stated maturity of up to 30 years.

The mortgage loans were generally originated or acquired in accordance with
underwriting guidelines that are less strict than Fannie Mae and Freddie Mac
guidelines. As a result, such mortgage loans are likely to experience higher
rates of delinquency, foreclosure and bankruptcy than mortgage loans
underwritten in accordance with higher standards.

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


INTEREST DISTRIBUTIONS

Interest distributions received on any distribution date represent interest
accrued on the certificates during the period commencing on the immediately
preceding distribution date (or the closing date, in the case of the first
distribution date) and ending on the day immediately preceding the related
distribution date.

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.

PRINCIPAL DISTRIBUTIONS

The amount of principal distributable on the certificates on any distribution
date will be determined by:

 o  funds actually received or advanced on the mortgage loans that are
    available to make principal distributions on the certificates; and

 o  the amount of excess interest available to pay principal on the
    certificates as described below.

Funds actually received or advanced on the mortgage loans will consist of
expected monthly scheduled payments, unexpected payments resulting from
prepayments by mortgagors or liquidations of defaulted mortgage loans, and
advances made by a servicer.

The manner of distributing principal among the classes of certificates will
differ, as described in this prospectus supplement, depending upon whether a
distribution date occurs before the distribution date in October 2003 or on or
after that date, and depending upon the delinquency performance of the mortgage
loans.

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


PREPAYMENT PREMIUMS ON THE MORTGAGE LOANS

The prepayment premiums received by the servicers from collections on the
mortgage loans will not be available for distributions of principal or interest
due on the offered certificates.


CREDIT ENHANCEMENT

Credit enhancement for the offered certificates includes overcollateralization
and subordination features to reduce delays in distributions and losses on some
classes of certificates in varying degrees.

Overcollateralization.  The mortgage loans bear interest each month in an
amount that in the aggregate is expected to exceed the amount needed to pay
monthly interest on the offered certificates and certain trust expenses.
Beginning on the second distribution date, this excess interest will be applied
to pay principal on the offered certificates in order to create and


                                      S-4
<PAGE>

maintain the required level of overcollateralization. The overcollateralization
will be available to absorb losses on the mortgage loans. The required level of
overcollateralization may increase or decrease over time. We cannot assure you
that sufficient interest will be generated by the mortgage loans to create and
maintain the required level of overcollateralization.

We refer you to "Risk Factors--Potential Inadequacy of Credit Enhancement" and
"Description of the Certificates--Credit Enhancement--Overcollateralization" in
this prospectus supplement for more detail.

Subordination. There are two types of subordination in this transaction:

 o  The senior certificates will have a payment priority over the subordinate
    certificates. Each class of subordinate certificates will be subordinate
    to each other class of subordinate certificates with a higher payment
    priority.

 o  Losses that are realized when the unpaid principal balance on a mortgage
    loan and accrued but unpaid interest on such mortgage loan exceeds the
    proceeds recovered upon liquidation will first reduce the available excess
    interest and then reduce the overcollateralization amount. If there is no
    overcollateralization at that time, losses on the mortgage loans will be
    allocated to the subordinate certificates, in the reverse order of their
    priority of payment, until the principal amount of the subordinate
    certificates is reduced to zero. If the applicable subordination is
    insufficient to absorb losses, then holders of the senior certificates
    will incur losses and may never receive all of their principal
    distributions.

We refer you to "Description of the Certificates--Credit Enhancement--
Subordination" and "--Application of Realized Losses" in this prospectus
supplement for more detail.


OPTIONAL TERMINATION OF THE TRUST

If the aggregate principal balance of the mortgage loans declines below 10% of
the aggregate principal balance of the mortgage loans as of the cut-off date,
then Calmco may purchase all of the mortgage loans and the related properties
in the trust. If Calmco purchases all of the mortgage loans, you will receive a
final distribution and then the trust will be terminated.

If Calmco does not exercise its option to purchase the mortgage loans as
described above when it is first entitled to do so, the pass-through rates of
the offered certificates, other than the Class A-3, Class A-IO and Class R
certificates, will be increased as described in this prospectus supplement.

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


ADVANCES

If the servicer of a mortgage loan reasonably believes that cash advances can
be recovered from a delinquent mortgagor or other collections on that mortgage
loan, then the servicer will make cash advances to the trust to cover
delinquent mortgage loan payments. In the event that a balloon loan is not paid
in full on its maturity date, the applicable servicer will also be obligated to
make advances with respect to the assumed monthly payments that would have been
due on such balloon loan based upon the original amortization schedule for the
loan, unless the servicer determines that the advance would not be recoverable.
In no event will a servicer be obligated to advance the balloon payment due on
any balloon loan. 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 of the Mortgage Loans--Advances from Servicers" in
this prospectus supplement for more detail.


FEDERAL INCOME TAX CONSEQUENCES

For federal income tax purposes, the trust will be treated as multiple REMICs.
All classes of offered certificates, other than the Class R Certificates, will
represent regular interests in a REMIC. The Class R Certificates will represent
ownership of the residual interests in the REMICs.


                                      S-5
<PAGE>

ERISA CONSIDERATIONS

It is expected that the Class A-1, Class A-2, Class A-3 and Class A-IO
Certificates may be purchased by a pension or other employee benefit plan
subject to the Employee Retirement Income Security Act of 1974 or Section 4975
of the Internal Revenue Code of 1986, so long as certain conditions are met. A
fiduciary of an employee benefit plan must determine that the purchase of a
certificate is consistent with its fiduciary duties under applicable law and
does not result in a nonexempt prohibited transaction under applicable law.
Sales of the subordinate certificates offered hereby and the Class 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 M-1, Class M-2 or Class B Certificate, you will be deemed to
represent that you comply with these restrictions.

LEGAL INVESTMENT

The offered certificates, other than the Class M-2 and Class B Certificates,
will be "mortgage related securities" for purposes of the Secondary Mortgage
Market Enhancement Act of 1984.

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-6
<PAGE>

                                  RISK FACTORS

     THIS PROSPECTUS SUPPLEMENT TOGETHER WITH THE PROSPECTUS DESCRIBES THE
MATERIAL RISK FACTORS RELATED TO YOUR SECURITIES. THE SECURITIES 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.

YOU MAY HAVE TO HOLD YOUR               The underwriter intends to make a
CERTIFICATES TO MATURITY                secondary market for the offered
IF THEIR MARKETABILITY IS               certificates, but is not obligated to do
LIMITED                                 so. There is currently no secondary
                                        market for the offered certificates. The
                                        underwriter 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 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          The rate of principal distributions and
WILL VARY DEPENDING ON THE RATE         yield to maturity on your certificates
OF PREPAYMENTS                          will be directly related to the rate of
                                        principal payments on the mortgage
                                        loans. Mortgagors 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; and

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

                                        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
                                        fixed-rate mortgage loans, the
                                        prepayment rate on those mortgage loans
                                        should increase. In addition, if
                                        mortgage rates decline, prepayments on
                                        the adjustable-rate mortgage loans may
                                        increase due to the availability of
                                        fixed rate mortgage loans at lower
                                        mortgage rates. On the other


                                      S-7
<PAGE>

                                        hand, if currently offered mortgage
                                        rates rise above the mortgage rates on
                                        the fixed-rate and adjustable-rate
                                        mortgage loans, the prepayment rate
                                        should decrease.

                                        Approximately 50.70% of the mortgage
                                        loans by principal balance as of
                                        September 1, 2000 impose a penalty for
                                        certain early full or partial
                                        prepayments of a mortgage loan.
                                        Generally, the prepayment penalty is
                                        imposed if a prepayment is made by a
                                        mortgagor during a specified period
                                        occurring during the first one to five
                                        years after origination and the amount
                                        of such prepayment in any twelve-month
                                        period is in excess of 20% of the
                                        original principal balance of such
                                        mortgage loan. Such prepayment penalties
                                        may discourage mortgagors 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 not be available for
                                        payment of the offered certificates.

                                        Approximately 44.25% of the mortgage
                                        loans by principal balance as of
                                        September 1, 2000 have fixed interest
                                        rates for two, three or five years and
                                        then adjust. These mortgage loans may
                                        have higher prepayments as they approach
                                        their first adjustment dates because the
                                        mortgagors may want to avoid periodic
                                        changes to their monthly payments.

                                        Each seller may be required to purchase
                                        mortgage loans sold by it from the trust
                                        in the event certain breaches of
                                        representations and warranties have not
                                        been cured. In addition, the holder of
                                        the Class X Certificates has the option
                                        to purchase mortgage loans from the
                                        trust that become ninety days or more
                                        delinquent. These purchases will have
                                        the same effect on the holders of the
                                        offered certificates as a prepayment of
                                        the mortgage loans.

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

                                        o    The Class A-IO Certificates receive
                                             only payments of interest and are
                                             especially sensitive to variations
                                             in the rate of prepayments. If you
                                             purchase a Class A-IO Certificate
                                             and 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.



                                      S-8
<PAGE>

                                        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.

THE VALUE OF YOUR CERTIFICATES MAY BE   If the performance of the mortgage loans
REDUCED IF LOSSES ARE HIGHER THAN       is substantially worse than assumed by
EXPECTED                                the rating agencies, the ratings of any
                                        class of certificates may be lowered in
                                        the future. This would probably reduce
                                        the value of those certificates. None of
                                        the depositor, any seller, any 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.

UNDERWRITING GUIDELINES AND POTENTIAL   The mortgage loans were originated or
DELINQUENCIES                           acquired generally in accordance with
                                        the underwriting guidelines described in
                                        this prospectus supplement. The
                                        underwriting standards typically differ
                                        from, and, with respect to a substantial
                                        number of mortgage loans, are generally
                                        less stringent than, the underwriting
                                        standards established by Fannie Mae or
                                        Freddie Mac. In addition, several of the
                                        mortgage loans were made to mortgagors
                                        with imperfect credit histories, ranging
                                        from minor delinquencies to bankruptcy,
                                        or mortgagors with relatively high
                                        ratios of monthly mortgage payments to
                                        income or relatively high ratios of
                                        total monthly credit payments to income.

                                        Consequently, the mortgage loans may
                                        experience rates of delinquency,
                                        foreclosure and bankruptcy that are
                                        higher, and that may be substantially
                                        higher, than those experienced by
                                        mortgage loans underwritten in
                                        accordance with higher standards.

                                        Changes in the values of mortgaged
                                        properties related to the mortgage loans
                                        may have a greater effect on the
                                        delinquency, foreclosure, bankruptcy and
                                        loss experience of the mortgage loans in
                                        the trust than on mortgage loans
                                        originated under stricter guidelines. We
                                        cannot assure you that the values of the
                                        mortgaged properties have remained or
                                        will remain at levels in effect on the
                                        dates of origination of the related
                                        mortgage loans.


                                      S-9
<PAGE>

POTENTIAL INADEQUACY OF CREDIT          The subordination and
ENHANCEMENT                             overcollateralization 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.

                                        OVERCOLLATERALIZATION


                                        In order to create
                                        overcollateralization, it will be
                                        necessary that the mortgage loans
                                        generate more interest than is needed to
                                        pay interest on the certificates and the
                                        fees and expenses of the trust. We
                                        expect that the mortgage loans will
                                        generate more interest than is needed to
                                        pay those amounts, at least during
                                        certain periods, because the weighted
                                        average mortgage rate on the mortgage
                                        loans is higher than the weighted
                                        average pass-through rate on the
                                        certificates. We cannot assure you,
                                        however, that enough excess interest
                                        will be generated to reach the
                                        overcollateralization level required by
                                        the rating agencies. The following
                                        factors will affect the amount of excess
                                        interest that the mortgage loans will
                                        generate:


                                        o    Prepayments. Each time a mortgage
                                             loan is prepaid, total excess
                                             interest after the date of
                                             prepayment will be reduced because
                                             that mortgage loan will no longer
                                             be outstanding and generating
                                             interest. Prepayment of a
                                             disproportionately high number of
                                             high mortgage rate mortgage loans
                                             would have a greater adverse effect
                                             on future excess interest.


                                        o    Defaults. The rate of defaults on
                                             the mortgage loans may turn out to
                                             be higher than expected. Defaulted
                                             mortgage loans may be liquidated,
                                             and liquidated mortgage loans will
                                             no longer be outstanding and
                                             generating interest.


                                        o    Level of One-Month LIBOR. If
                                             one-month LIBOR increases, more
                                             money will be needed to distribute
                                             interest to the certificateholders,
                                             so less money will be available as
                                             excess interest.


                                        SUBORDINATION


                                        If the applicable subordination is
                                        insufficient to absorb losses, then
                                        certificateholders will likely incur
                                        losses and may never receive all of
                                        their principal payments.


RISKS OF HOLDING SUBORDINATE            The protections afforded the senior
CERTIFICATES                            certificates in this transaction create
                                        risks for the subordinate certificates.
                                        Prior to any purchase of subordinate
                                        certificates, consider the following
                                        factors that may adversely impact your
                                        yield:


                                      S-10
<PAGE>

                                        o    Because the subordinate
                                             certificates receive interest and
                                             principal distributions after the
                                             senior certificates receive such
                                             distributions, there is a greater
                                             likelihood that the subordinate
                                             certificates will not receive the
                                             distributions to which they are
                                             entitled on any distribution date.

                                        o    If a servicer determines not to
                                             advance a delinquent payment on a
                                             mortgage loan because such amount
                                             is not recoverable from a
                                             mortgagor, there may be a shortfall
                                             in distributions on the
                                             certificates which will impact the
                                             subordinate certificates.

                                        o    The subordinate certificates are
                                             not expected to receive principal
                                             distributions until, at the
                                             earliest, the distribution date
                                             occurring in October 2003.

                                        o    Losses resulting from the
                                             liquidation of defaulted mortgage
                                             loans will first reduce excess
                                             interest and then reduce the level
                                             of overcollateralization. If there
                                             is no overcollateralization, losses
                                             will be allocated to the
                                             subordinate certificates in reverse
                                             order of their priority of payment.
                                             A loss allocation results in a
                                             reduction of a certificate balance
                                             without a corresponding
                                             distribution of cash to the holder.
                                             A lower certificate balance will
                                             result in less interest accruing on
                                             the certificate.

                                        o    The earlier in the transaction that
                                             a loss on a mortgage loan occurs,
                                             the greater the impact on the
                                             yield.

                                        The risks described above for the
                                        subordinate certificates will affect the
                                        Class B Certificates most severely, then
                                        the Class M-2 Certificates and then the
                                        Class M-1 Certificates.

CONSEQUENCES OF OWNING BOOK-ENTRY       Limit on Liquidity of Certificates.
CERTIFICATES                            Issuance of the offered 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 certain depositories,
                                        participating organizations, indirect
                                        participants and certain banks, your
                                        ability to transfer or pledge a
                                        book-entry certificate to persons or
                                        entities that are not affiliated with
                                        these organizations 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 a
                                        depository 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-11
<PAGE>

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

MORTGAGE LOAN RATES MAY LIMIT           One-month LIBOR, the index used to
PASS-THROUGH RATES ON THE               calculate the pass-through rates of the
CERTIFICATES                            offered certificates, other than the
                                        Class A-IO Certificates, may increase or
                                        decrease at different times and in
                                        different amounts than the indices
                                        applicable to the adjustable-rate
                                        mortgage loans included in the trust.

                                        In addition, because the mortgage rates
                                        on the adjustable-rate mortgage loans
                                        adjust at different times and in
                                        different amounts, and because the
                                        mortgage rates on the remaining mortgage
                                        loans are fixed, if the pass-through
                                        rates of the offered certificates, other
                                        than the Class A-IO Certificates, were
                                        not capped as described in this
                                        prospectus supplement under "Description
                                        of the Certificates--Distributions of
                                        Interest," there may be times when those
                                        rates would exceed the weighted average
                                        mortgage rate on the mortgage loans
                                        (after deduction of fees). If that
                                        happens, the caps will have the effect
                                        of reducing the pass-through rates on
                                        those certificates, at least
                                        temporarily. The difference will be paid
                                        to you on future distribution dates only
                                        if there is enough cashflow generated
                                        from excess interest on the mortgage
                                        loans pursuant to the priorities set
                                        forth herein. See "Description of the
                                        Certificates--Distributions of Interest"
                                        and "--Credit Enhancement--
                                        Overcollateralization" in this
                                        prospectus supplement.


INCREASED RISK OF LOSS AS A             Approximately 15.93% of the mortgage
RESULT OF BALLOON LOANS                 loans 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 related 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 collateral for such loan
                                        is insufficient and the other forms of
                                        credit enhancement are insufficient or
                                        unavailable to cover the loss.




                                      S-12
<PAGE>

INCREASED RISK OF LOSS AS A RESULT      Approximately 38.54% of the mortgage
OF GEOGRAPHIC CONCENTRATION             loans by principal balance as of
                                        September 1, 2000, are secured by
                                        mortgaged 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
                                        uninsurable hazards, such as
                                        earthquakes, brush fires, floods,
                                        mudslides and other natural disasters.
                                        If these occur, the rates of
                                        delinquency, foreclosure, bankruptcy and
                                        loss on the mortgage loans may increase.

THERE IS A RISK THAT THERE MAY          Substantial delays could be encountered
BE A DELAY IN RECEIPT OF LIQUIDATION    in connection with the liquidation of
PROCEEDS AND LIQUIDATION PROCEEDS MAY   defaulted mortgage loans. Further,
BE LESS THAN THE MORTGAGE LOAN BALANCE  liquidation expenses such as legal fees,
                                        real estate taxes and maintenance and
                                        preservation expenses will reduce the
                                        portion of liquidation proceeds payable
                                        to you. If a mortgaged property fails to
                                        provide adequate security for the
                                        mortgage loan and the available credit
                                        enhancement is insufficient to cover the
                                        loss, you will incur a loss on your
                                        investment.

THERE ARE RISKS RELATING TO             The mortgage loans may become delinquent
ALTERNATIVES TO FORECLOSURE             after the closing date. A servicer may
                                        either foreclose on a delinquent
                                        mortgage loan or, under certain
                                        circumstances, work out an agreement
                                        with the related mortgagor, which may
                                        involve waiving or modifying any term of
                                        the mortgage loan. If a servicer extends
                                        the payment period or accepts a lesser
                                        amount than stated in the mortgage note
                                        in satisfaction of the mortgage note,
                                        your yield may be reduced.

CALMCO SERVICING L.P. ONLY              Calmco Servicing L.P. only began to
RECENTLY BEGAN TO PRIMARY               primary service mortgage loans in the
SERVICE MORTGAGE LOANS                  second quarter of 2000. Because of
                                        Calmco Servicing L.P.'s relative lack of
                                        experience in the primary servicing of
                                        mortgage loans, the foreclosure,
                                        delinquency and loss experience of the
                                        mortgage loans may be higher than if the
                                        mortgage loans were serviced by a
                                        primary servicer with more experience.





                                      S-13
<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.


                               THE MORTGAGE POOL

     The depositor will establish the DLJ ABS Trust Series 2000-3 on the
closing date, under a pooling and servicing agreement among the depositor, the
sellers, the servicers, the special servicer and the trustee, dated as of the
cut-off date. On the closing date, the depositor will deposit into the trust a
pool of mortgage loans that, in the aggregate, will constitute a mortgage pool,
secured by first liens on one- to four-family residential properties with terms
to maturity of not more than thirty 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 MORTGAGE LOANS

     The depositor will acquire approximately 1,105 mortgage loans with an
aggregate Stated Principal Balance as of the cut-off date of approximately
$131,151,208 from DLJMC pursuant to a mortgage loan purchase agreement. These
mortgage loans were previously purchased by DLJMC in secondary market
transactions from various mortgage loans originators.

     The depositor will acquire approximately 226 mortgage loans with an
aggregate Stated Principal Balance as of the cut-off date of approximately
$73,447,767 directly or indirectly through an affiliate from PNC pursuant to a
mortgage loan purchase agreement.

     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, each seller will make
representations and warranties relating to the characteristics of the mortgage
loans sold by it, as further described in the prospectus under "Loan
Underwriting Procedures and Standards--Representations and Warranties." The
mortgage loan representations and warranties will be made by each seller as of
the closing date, except for no more than approximately 10.26% of the mortgage
loans, by principal balance of such mortgage loans, as of a date no earlier
than September 23, 1999. 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 in that mortgage loan, the related 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
     (less the servicing fee rate if the seller is also the servicer) 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.

     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


                                      S-14
<PAGE>

substitute mortgage loans with deficient documentation or that are otherwise
defective. Each seller is selling the mortgage loans without recourse and will
have no obligation for the mortgage loans in its capacity as seller other than
the cure, repurchase or substitution obligations described above. The
obligations of each servicer are 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, some of the
mortgage loans may be removed from 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 to be included in the mortgage pool 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.

     The mortgage loans to be included in the mortgage pool consist of
approximately 1,331 conventional, adjustable- and fixed-rate, fully amortizing
and balloon, first lien residential mortgage loans with original terms to
maturity ranging from 6 to 30 years, having an aggregate Stated Principal
Balance as of the cut-off date of approximately $204,598,975. The mortgage
loans provide for the amortization of the amount financed over a series of
substantially equal monthly payments, except for approximately 15.93% of the
mortgage loans, which are balloon loans and require a disproportionate
principal payment at their respective stated maturities. Substantially all of
the mortgage loans provide for payments due on the first day of each month.
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 50.70% of the mortgage loans provide for payment by the
mortgagor of a prepayment penalty in connection with certain full or partial
prepayments of principal. Generally, each such mortgage loan provides for
payment of a prepayment penalty in connection with certain voluntary, full or
partial prepayments made within the period of time specified in the related
mortgage note, ranging from one to five years from the date of origination of
such mortgage loan. The amount of the applicable prepayment penalty, to the
extent permitted under applicable state law, is as provided in the related
mortgage note; generally, such amount is equal to six months' interest on any
amounts prepaid during any 12-month period in excess of 20% of the original
principal balance of the related mortgage loan or a specified percentage of the
amounts prepaid. Any such prepayment penalties will not be available for
payment of the offered certificates.

     The mortgage loans to be included in the mortgage pool were originated or
acquired by a seller in the normal course of its business and in accordance
with the underwriting criteria specified in this prospectus supplement.

     Less than 2.50% of the mortgage loans will be delinquent more than 30 days
as of the cut-off date.

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

     The LTV ratio of a mortgage loan at any given time is a fraction,
expressed as a percentage, the numerator of which is the principal balance of
the related mortgage loan at the date of determination 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 LTV ratios might not be a reliable indicator of the rates of
delinquencies, foreclosures and losses that could occur on those mortgage
loans.


                                      S-15
<PAGE>

     All of the mortgage loans as of the cut-off date had a LTV ratio at
origination of 100% or less. Approximately 12.20% of the mortgage loans were
originated with LTV ratios of greater than 80% and will be covered by a primary
mortgage insurance policy issued by a mortgage insurance company acceptable to
Fannie Mae or Freddie Mac, or any nationally recognized statistical rating
organization. This primary mortgage insurance policy will not be required for
any of these mortgage loans after the date that the related LTV ratio is 80% or
less or, based on a new appraisal, the principal balance of that mortgage loan
represents 80% or less of the new appraised value or as otherwise provided by
law. Approximately 15.35% of the mortgage loans were originated with LTV ratios
of greater than 80% and will not be covered by a primary mortgage insurance
policy. See "--Underwriting Standards" in this prospectus supplement.

     Approximately 54.89% of the mortgage loans have fixed interest rates and
are referred to in this prospectus supplement as the fixed-rate mortgage loans.
Approximately 45.11% of the mortgage loans have interest rates that adjust in
accordance with an index, as described below under "--The Adjustable Rate
Mortgage Loans" and "--The Indices." These mortgage loans are referred to in
this prospectus supplement as the adjustable-rate mortgage loans. Interest on
both the fixed-rate mortgage loans and the adjustable-rate mortgage loans
accrues on the basis of a 360-day year consisting of twelve 30-day months.


THE ADJUSTABLE-RATE MORTGAGE LOANS

     Approximately 99.72% of the adjustable-rate mortgage loans provide for
semi-annual adjustment of the related mortgage rate based on the Six-Month
LIBOR Index (as described below under "--The Indices") and approximately 0.28%
of the adjustable-rate mortgage loans provide for annual adjustment of the
related mortgage rate based on the One-Year CMT Index (as described below under
"--The Indices"), as specified in the related mortgage note, and for
corresponding adjustments to the monthly payment due thereon, in each case on
each adjustment date applicable thereto. However, the first such adjustment for
approximately 57.02%, 38.30% and 2.77% of the adjustable-rate mortgage loans
will occur after an initial period of two, three or five years, respectively,
following origination. On each adjustment date for each adjustable-rate
mortgage loan, the mortgage rate thereon will be adjusted to equal the sum,
rounded generally to the next highest or nearest multiple of 0.125%, of the
index (as described below) and a fixed percentage amount, referred to in this
prospectus supplement as a gross margin. The mortgage rate on each
adjustable-rate mortgage loan will not increase or decrease by more than a
specified percentage, referred to herein as an initial rate cap, on the first
adjustment date for such mortgage loan. In addition, the mortgage rate will not
increase or decrease by more than a specified percentage, referred to herein as
a periodic rate cap, on each subsequent adjustment date. Each mortgage rate on
each adjustable-rate mortgage loan will not exceed a specified maximum mortgage
rate, referred to as the maximum mortgage rate, over the life of such mortgage
loan or be less than a specified minimum mortgage rate, referred to as the
minimum mortgage rate, over the life of such mortgage loan.

     Effective with the first monthly payment due on each adjustable-rate
mortgage loan after each related adjustment date, the monthly payment amount
will be adjusted to an amount that will fully amortize the outstanding
principal balance of the related mortgage loan over its remaining term, and pay
interest at the mortgage rate as so adjusted.


THE INDICES

     The index applicable to the determination of the mortgage rates for
approximately 99.72% of the adjustable-rate mortgage loans will be the average
of the interbank offered rates for six-month United States dollar deposits in
the London market, calculated as provided in the related mortgage note (the
"Six-Month LIBOR Index") and as most recently available either (1) as of the
first business day a specified period of time prior to such adjustment date,
(2) as of the first business day of the month preceding the month of such
adjustment date or (3) the last business day of the second month preceding the
month in which such adjustment date occurs, as specified in the related
mortgage note. Approximately 0.28% of the adjustable-rate mortgage loans adjust
their mortgage rates on the basis of the "One-Year


                                      S-16
<PAGE>

CMT Index" calculated based upon yields on actively traded issues of U.S.
Treasury securities adjusted to a constant maturity of one year. The Six-Month
LIBOR Index and the One-Year CMT Index are sometimes referred to in this
prospectus supplement individually as an index and collectively as the indices.



     The following information shows in tabular format some information, as of
the cut-off date, about the mortgage loans. Except for rates of interest,
percentages, which are approximate, are based on the Stated Principal Balance
of the mortgage loans as of the cut-off date and have been rounded in order to
total 100%.


                                      S-17
<PAGE>

                                 MORTGAGE LOANS


<TABLE>
<CAPTION>
                               MORTGAGE LOANS
                      ORIGINAL LOAN-TO-VALUE RATIOS(1)
----------------------------------------------------------------------------
                                                AGGREGATE
         ORIGINAL             NUMBER OF         PRINCIPAL         PERCENT OF
       LOAN-TO-VALUE           MORTGAGE          BALANCE           MORTGAGE
         RATIOS(%)              LOANS          OUTSTANDING          LOANS
--------------------------   -----------   -------------------   -----------
<S>                            <C>        <C>                      <C>
 0.001 - 60.000 ..........        145      $ 17,237,454.64            8.42%
60.001 - 65.000 ..........        125        16,889,701.12            8.26
65.001 - 70.000 ..........        138        15,862,232.74            7.75
70.001 - 75.000 ..........        208        31,970,385.35           15.63
75.001 - 80.000 ..........        353        66,270,510.32           32.39
80.001 - 85.000 ..........        103        14,099,219.56            6.89
85.001 - 90.000 ..........        174        31,888,520.90           15.59
90.001 - 95.000 ..........         57         7,215,940.01            3.53
95.001 - 100.000 .........         28         3,165,010.66            1.55
                                -----      ---------------          ------
  Total: .................      1,331      $204,598,975.30          100.00%
                                =====      ===============          ======
</TABLE>

----------------------
(1)   As of the cut-off date, the weighted average original LTV ratio of the
      mortgage loans is expected to be approximately 76.82%.



<TABLE>
<CAPTION>
                               MORTGAGE LOANS
                 EFFECTIVE ORIGINAL LOAN-TO-VALUE RATIOS(1)
----------------------------------------------------------------------------
         EFFECTIVE                              AGGREGATE
         ORIGINAL             NUMBER OF         PRINCIPAL         PERCENT OF
       LOAN-TO-VALUE           MORTGAGE          BALANCE           MORTGAGE
         RATIOS(%)              LOANS          OUTSTANDING          LOANS
--------------------------   -----------   -------------------   -----------
<S>                            <C>        <C>                      <C>
 0.001 - 60.000 ..........        147      $ 17,395,461.68            8.50%
60.001 - 65.000 ..........        138        21,296,085.91           10.41
65.001 - 70.000 ..........        229        35,152,471.80           17.18
70.001 - 75.000 ..........        212        33,530,470.25           16.39
75.001 - 80.000 ..........        352        65,808,523.18           32.16
80.001 - 85.000 ..........         95        11,859,666.38            5.80
85.001 - 90.000 ..........        118        15,224,457.63            7.44
90.001 - 95.000 ..........         14         1,629,964.20            0.80
95.001 - 100.000 .........         26         2,701,874.27            1.32
                                -----      ---------------          ------
  Total: .................      1,331      $204,598,975.30          100.00%
                                =====      ===============          ======
</TABLE>

----------------------
(1)   As of the cut-off date, the weighted average effective original LTV ratio
      of the mortgage loans is expected to be approximately 73.90%. The
      effective LTV ratio of any mortgage loan is equal to the LTV ratio of
      such mortgage loan minus the product of such LTV ratio and the primary
      mortgage insurance coverage percentage, if any, for such mortgage loan.



<TABLE>
<CAPTION>
                                 MORTGAGE LOANS
                                CREDIT SCORES(1)
--------------------------------------------------------------------------------
                                                     AGGREGATE
                                   NUMBER OF         PRINCIPAL        PERCENT OF
            RANGE OF                MORTGAGE          BALANCE          MORTGAGE
         CREDIT SCORES               LOANS          OUTSTANDING         LOANS
-------------------------------   -----------   ------------------   -----------
<S>                                 <C>        <C>                     <C>
Zero or not available .........         56      $  5,128,384.16           2.51%
426 - 450 .....................          1           141,583.65           0.07
451 - 475 .....................          4           158,049.18           0.08
476 - 500 .....................         22         1,733,007.81           0.85
501 - 525 .....................        136        11,966,462.72           5.85
526 - 550 .....................        213        20,572,878.69          10.06
551 - 575 .....................        212        23,460,291.46          11.47
576 - 600 .....................        150        19,059,842.57           9.32
601 - 625 .....................        136        20,158,488.53           9.85
626 - 650 .....................        120        24,270,504.83          11.86
651 - 675 .....................         94        25,242,968.45          12.34
676 - 700 .....................         73        19,437,590.55           9.50
701 - 725 .....................         49        14,978,189.29           7.32
726 - 750 .....................         35        11,598,571.43           5.67
751 - 775 .....................         15         3,461,720.19           1.69
776 - 800 .....................         13         2,891,815.04           1.41
801 - 825 .....................          2           338,626.75           0.17
                                     -----      ---------------         ------
  Total: ......................      1,331      $204,598,975.30         100.00%
                                     =====      ===============         ======
</TABLE>

----------------------
(1)   As of the cut-off date, the weighted average credit score of the mortgage
      loans is expected to be approximately 627.


<TABLE>
<CAPTION>
                                  MORTGAGE LOANS
                    CURRENT MORTGAGE LOAN PRINCIPAL BALANCES(1)
-----------------------------------------------------------------------------------
                                                       AGGREGATE
             CURRENT                 NUMBER OF         PRINCIPAL         PERCENT OF
          MORTGAGE LOAN               MORTGAGE          BALANCE           MORTGAGE
      PRINCIPAL BALANCES($)            LOANS          OUTSTANDING          LOANS
---------------------------------   -----------   -------------------   -----------
<S>                                 <C>          <C>                      <C>
      0.01 - 100,000.00 .........        685      $ 39,038,195.07           19.08%
100,000.01 - 200,000.00 .........        303        42,106,453.10           20.58
200,000.01 - 300,000.00 .........        159        41,546,156.86           20.31
300,000.01 - 400,000.00 .........        103        35,717,594.58           17.46
400,000.01 - 500,000.00 .........         41        18,522,149.29            9.05
500,000.01 - 600,000.00 .........         19        10,346,176.85            5.06
600,000.01 - 700,000.00 .........          7         4,530,567.79            2.21
700,000.01 - 800,000.00 .........          7         5,227,126.24            2.55
800,000.01 - 900,000.00 .........          1           898,080.45            0.44
900,000.01+ .....................          6         6,666,475.07            3.26
                                       -----      ---------------          ------
  Total: ........................      1,331      $204,598,975.30          100.00%
                                       =====      ===============          ======
</TABLE>

----------------------
(1)   As of the cut-off date, the average current principal balance of the
      mortgage loans is expected to be approximately $153,718.24.




<TABLE>
<CAPTION>
                                  MORTGAGE LOANS
                   ORIGINAL MORTGAGE LOAN PRINCIPAL BALANCES(1)
-----------------------------------------------------------------------------------
                                                       AGGREGATE
             ORIGINAL                NUMBER OF         PRINCIPAL         PERCENT OF
          MORTGAGE LOAN               MORTGAGE          BALANCE           MORTGAGE
      PRINCIPAL BALANCES($)            LOANS          OUTSTANDING          LOANS
---------------------------------   -----------   -------------------   -----------
<S>                                   <C>        <C>                      <C>
      0.01 - 100,000.00 .........        685      $ 39,038,195.07           19.08%
100,000.01 - 200,000.00 .........        303        42,106,453.10           20.58
200,000.01 - 300,000.00 .........        158        41,251,666.59           20.16
300,000.01 - 400,000.00 .........        104        36,012,084.85           17.60
400,000.01 - 500,000.00 .........         41        18,522,149.29            9.05
500,000.01 - 600,000.00 .........         19        10,346,176.85            5.06
600,000.01 - 700,000.00 .........          7         4,530,567.79            2.21
700,000.01 - 800,000.00 .........          7         5,227,126.24            2.55
800,000.01 - 900,000.00 .........          1           898,080.45            0.44
900,000.01+ .....................          6         6,666,475.07            3.26
                                       -----      ---------------          ------
  Total: ........................      1,331      $204,598,975.30          100.00%
                                       =====      ===============          ======
</TABLE>

----------------------
(1)   As of the cut-off date, the average original principal balance of the
      mortgage loans is expected to be approximately $154,150.40.




<TABLE>
<CAPTION>
                              MORTGAGE LOANS
                             MORTGAGE RATES(1)
---------------------------------------------------------------------------
                                               AGGREGATE
                             NUMBER OF         PRINCIPAL         PERCENT OF
                              MORTGAGE          BALANCE           MORTGAGE
    MORTGAGE RATES(%)          LOANS          OUTSTANDING          LOANS
-------------------------   -----------   -------------------   -----------
<S>                           <C>        <C>                      <C>
 6.001 - 6.500 ..........          1      $    116,299.03            0.06%
 7.001 - 7.500 ..........          3           337,477.75            0.16
 7.501 - 8.000 ..........          5         1,148,836.59            0.56
 8.001 - 8.500 ..........         25         4,855,208.15            2.37
 8.501 - 9.000 ..........         61        12,163,166.19            5.94
 9.001 - 9.500 ..........         93        24,061,805.30           11.76
 9.501 - 10.000 .........        226        57,715,095.38           28.21
10.001 - 10.500 .........        150        31,394,085.38           15.34
10.501 - 11.000 .........        188        25,571,896.09           12.50
11.001 - 11.500 .........        123        13,467,251.99            6.58
11.501 - 12.000 .........        119        10,166,142.37            4.97
12.001 - 12.500 .........         88         6,406,547.58            3.13
12.501 - 13.000 .........         97         6,738,720.72            3.29
13.001 - 13.500 .........         48         3,398,402.19            1.66
13.501 - 14.000 .........         46         3,423,701.52            1.67
14.001 - 14.500 .........         32         2,055,012.81            1.00
14.501 - 15.000 .........         12           806,294.91            0.39
15.001 - 15.500 .........         13           746,281.51            0.36
15.501 - 16.000 .........          1            26,749.84            0.01
                               -----      ----------------         ------
  Total: ................      1,331      $204,598,975.30          100.00%
                               =====      ================         ======
</TABLE>

----------------------
(1)   As of the cut-off date, the average mortgage rate of the mortgage loans
      is expected to be approximately 10.44% per annum.


                                      S-18
<PAGE>


<TABLE>
<CAPTION>
                                 MORTGAGE LOANS
                               OCCUPANCY TYPES(1)
--------------------------------------------------------------------------------
                                                    AGGREGATE
                                  NUMBER OF         PRINCIPAL         PERCENT OF
                                   MORTGAGE          BALANCE           MORTGAGE
        OCCUPANCY TYPES             LOANS          OUTSTANDING          LOANS
------------------------------   -----------   -------------------   -----------
<S>                                <C>        <C>                      <C>
Investment/Non-owner .........        156      $ 17,639,414.40            8.62%
Primary ......................      1,165       184,071,708.72           89.97
Second Home ..................         10         2,887,852.18            1.41
                                    -----      ---------------          ------
  Total: .....................      1,331      $204,598,975.30          100.00%
                                    =====      ===============          ======
</TABLE>

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




<TABLE>
<CAPTION>
                           MORTGAGE LOANS
                    ORIGINAL TERM TO MATURITY(1)
---------------------------------------------------------------------
                                         AGGREGATE
                       NUMBER OF         PRINCIPAL         PERCENT OF
  ORIGINAL TERM TO      MORTGAGE          BALANCE           MORTGAGE
 MATURITY (MONTHS)       LOANS          OUTSTANDING          LOANS
-------------------   -----------   -------------------   -----------
<S>                     <C>        <C>                      <C>
  1 - 180 .........        194      $ 35,275,555.80           17.24%
181 - 240 .........          8           365,042.68            0.18
301 - 360 .........      1,129       168,958,376.82           82.58
                         -----      ---------------          ------
  Total: ..........      1,331      $204,598,975.30          100.00%
                         =====      ===============          ======
</TABLE>

----------------------
(1)   As of the cut-off date, the weighted average original term to maturity of
      the mortgage loans is expected to be approximately 329 months.




<TABLE>
<CAPTION>
                           MORTGAGE LOANS
                    REMAINING TERM TO MATURITY(1)
---------------------------------------------------------------------
                                         AGGREGATE
                       NUMBER OF         PRINCIPAL         PERCENT OF
 REMAINING TERM TO      MORTGAGE          BALANCE           MORTGAGE
 MATURITY (MONTHS)       LOANS          OUTSTANDING          LOANS
-------------------   -----------   -------------------   -----------
<S>                     <C>        <C>                      <C>
  1 - 180 .........        194      $ 35,275,555.80           17.24%
181 - 240 .........          8           365,042.68            0.18
301 - 360 .........      1,129       168,958,376.82           82.58
                         -----      ---------------          ------
  Total: ..........      1,331      $204,598,975.30          100.00%
                         =====      ===============          ======
</TABLE>

----------------------
(1)   As of the cut-off date, the weighted average remaining term to maturity
      of the mortgage loans is expected to be approximately 324 months.


<TABLE>
<CAPTION>
                                MORTGAGE LOANS
                 STATE DISTRIBUTION OF MORTGAGED PROPERTIES(1)
-------------------------------------------------------------------------------
                                                    AGGREGATE
                                  NUMBER OF         PRINCIPAL        PERCENT OF
                                   MORTGAGE          BALANCE          MORTGAGE
             STATE                  LOANS          OUTSTANDING         LOANS
------------------------------   -----------   ------------------   -----------
<S>                                <C>        <C>                     <C>
Arizona ......................         37      $  6,519,243.96           3.19%
Arkansas .....................          2           109,587.48           0.05
California ...................        279        78,853,598.52          38.54
Colorado .....................         43         6,018,538.87           2.94
Connecticut ..................         19         3,409,749.25           1.67
District of Columbia .........          6           698,578.76           0.34
Florida ......................        120        11,014,941.72           5.38
Georgia ......................         33         5,400,620.37           2.64
Hawaii .......................          8         1,507,240.37           0.74
Idaho ........................          2           236,286.48           0.12
Illinois .....................         57         7,505,000.50           3.67
Indiana ......................         30         1,642,617.56           0.8
Iowa .........................         10           575,947.18           0.28
Kansas .......................          6           250,845.15           0.12
Kentucky .....................         11           760,331.98           0.37
Louisiana ....................         17         1,097,187.04           0.54
Maine ........................          2           143,591.05           0.07
Maryland .....................         20         2,758,759.80           1.35
Massachusetts ................         24         3,637,894.42           1.78
Michigan .....................         61         3,815,745.17           1.86
Minnesota ....................         17         1,478,136.61           0.72
Mississippi ..................          7           674,216.93           0.33
Missouri .....................         26         1,796,406.08           0.88
Montana ......................          2           174,956.18           0.09
Nebraska .....................         10           486,450.87           0.24
Nevada .......................         17         2,795,856.92           1.37
New Hampshire ................          3           309,778.45           0.15
New Jersey ...................         35         6,770,707.90           3.31
New Mexico ...................          9         1,068,726.38           0.52
New York .....................         57        11,645,945.93           5.69
North Carolina ...............         19         2,175,124.59           1.06
North Dakota .................          1            28,971.45           0.01
Ohio .........................         55         4,038,039.17           1.97
Oklahoma .....................         14           741,348.14           0.36
Oregon .......................         16         3,050,410.82           1.49
Pennsylvania .................         40         4,813,635.86           2.35
Rhode Island .................          2           193,991.58           0.09
South Carolina ...............         13           664,688.92           0.32
South Dakota .................          1            63,867.09           0.03
Tennessee ....................         18         1,509,936.17           0.74
Texas ........................         74         7,445,509.13           3.64
Utah .........................         28         5,963,354.78           2.91
Vermont ......................          1            46,433.94           0.02
Virginia .....................         21         3,115,605.53           1.52
Washington ...................         43         6,083,203.34           2.97
West Virginia ................          1            43,905.99           0.02
Wisconsin ....................         13         1,394,543.04           0.68
Wyoming ......................          1            68,917.88           0.03
                                    -----      ---------------         ------
  Total: .....................      1,331      $204,598,975.30         100.00%
                                    =====      ===============         ======
</TABLE>

----------------------
(1)   As of the cut-off date, no more than approximately 0.88% of the mortgage
      loans will be secured by mortgaged properties located in any one postal
      zip code area.




<TABLE>
<CAPTION>
                                MORTGAGE LOANS
                           PURPOSE OF MORTGAGE LOANS
-------------------------------------------------------------------------------
                                                   AGGREGATE
                                 NUMBER OF         PRINCIPAL         PERCENT OF
                                  MORTGAGE          BALANCE           MORTGAGE
         LOAN PURPOSE              LOANS          OUTSTANDING          LOANS
-----------------------------   -----------   -------------------   -----------
<S>                               <C>        <C>                      <C>
Purchase ....................        570      $ 98,069,223.18           47.93%
Cash-out Refinance ..........        541        73,454,122.52           35.90
Rate/Term Refinance .........        220        33,075,629.60           16.17
                                   -----      ---------------          ------
  Total: ....................      1,331      $204,598,975.30          100.00%
                                   =====      ===============          ======
</TABLE>

                                      S-19
<PAGE>


<TABLE>
<CAPTION>
                                  MORTGAGE LOANS
                         TYPES OF MORTGAGED PROPERTIES(1)
-----------------------------------------------------------------------------------
                                                       AGGREGATE
                                     NUMBER OF         PRINCIPAL         PERCENT OF
                                      MORTGAGE          BALANCE           MORTGAGE
          PROPERTY TYPE                LOANS          OUTSTANDING          LOANS
---------------------------------   -----------   -------------------   -----------
<S>                                   <C>        <C>                      <C>
2-4 Family ......................         90      $ 15,860,452.31            7.75%
Condominium .....................         69        11,217,324.84            5.48
PUD .............................         68        18,765,450.35            9.17
Mfg. Housing ....................         12           784,339.04            0.38
Other ...........................         10           492,235.31            0.24
Single Family Residence .........      1,082       157,479,173.45           76.97
                                       -----      ---------------          ------
  Total: ........................      1,331      $204,598,975.30          100.00%
                                       =====      ===============          ======
</TABLE>


<TABLE>
<CAPTION>
                               MORTGAGE LOANS
                DOCUMENTATION PROGRAMS FOR MORTGAGE LOANS(1)
-----------------------------------------------------------------------------
                                                 AGGREGATE
                               NUMBER OF         PRINCIPAL         PERCENT OF
                                MORTGAGE          BALANCE           MORTGAGE
     DOCUMENTATION TYPE          LOANS          OUTSTANDING          LOANS
---------------------------   -----------   -------------------   -----------
<S>                             <C>        <C>                      <C>
Full Documentation ........        712      $ 82,980,397.84           40.56%
Reduced Documentation .....        274        75,414,674.87           36.86
No Documentation ..........        345        46,203,902.59           22.58
                                 -----      ---------------          ------
  Total: ..................      1,331      $204,598,975.30          100.00%
                                 =====      ===============          ======
</TABLE>


<TABLE>
<CAPTION>
                             MORTGAGE LOANS
                            GROSS MARGINS(1)
-------------------------------------------------------------------------
                                              AGGREGATE
                            NUMBER OF         PRINCIPAL        PERCENT OF
     RANGE OF GROSS          MORTGAGE          BALANCE          MORTGAGE
       MARGINS(%)             LOANS          OUTSTANDING         LOANS
------------------------   -----------   ------------------   -----------
<S>                           <C>       <C>                     <C>
2.501 - 3.000 ..........         1       $   116,299.03            0.13%
3.001 - 3.500 ..........         1           145,784.50            0.16
3.501 - 4.000 ..........         8           998,478.04            1.08
4.001 - 4.500 ..........        22         3,150,111.80            3.41
4.501 - 5.000 ..........        75         9,225,746.69           10.00
5.001 - 5.500 ..........       136        17,247,900.66           18.69
5.501 - 6.000 ..........       182        23,032,831.04           24.95
6.001 - 6.500 ..........       117        14,611,954.76           15.83
6.501 - 7.000 ..........       110        11,275,706.51           12.22
7.001 - 7.500 ..........        66         6,536,824.19            7.08
7.501 - 8.000 ..........        27         2,398,185.43            2.60
8.001 - 8.500 ..........        16         1,489,903.11            1.61
8.501 - 9.000 ..........        21         2,040,478.59            2.21
9.501 - 10.000 .........         1            29,928.86            0.03
                               ---       --------------          ------
  Total: ...............       783       $92,300,133.21          100.00%
                               ===       ==============          ======
</TABLE>

----------------------
(1)   For adjustable-rate mortgage loans only. As of the cut-off date, the
      weighted average gross margin of the adjustable rate mortgage loans is
      expected to be approximately 6.00% per annum.




<TABLE>
<CAPTION>
                             MORTGAGE LOANS
                          TYPES OF INDICES(1)
------------------------------------------------------------------------
                                             AGGREGATE
                           NUMBER OF         PRINCIPAL        PERCENT OF
                            MORTGAGE          BALANCE          MORTGAGE
     TYPE OF INDEX           LOANS          OUTSTANDING         LOANS
-----------------------   -----------   ------------------   -----------
<S>                          <C>       <C>                     <C>
1 Year CMT ............         3       $   256,739.17            0.28%
6 Month LIBOR .........       780        92,043,394.04           99.72
                              ---       --------------          ------
  Total: ..............       783       $92,300,133.21          100.00%
                              ===       ==============          ======
</TABLE>

----------------------
(1)   For adjustable-rate mortgage loans only.


<TABLE>
<CAPTION>
                              MORTGAGE LOANS
                        MAXIMUM MORTGAGE RATES(1)
--------------------------------------------------------------------------
                                               AGGREGATE
                             NUMBER OF         PRINCIPAL        PERCENT OF
     RANGE OF MAXIMUM         MORTGAGE          BALANCE          MORTGAGE
    MORTGAGE RATES(%)          LOANS          OUTSTANDING         LOANS
-------------------------   -----------   ------------------   -----------
<S>                            <C>       <C>                     <C>
12.001 - 12.500 .........         2       $   262,083.53            0.28%
13.001 - 13.500 .........         1           109,241.05            0.12
13.501 - 14.000 .........         2           613,463.51            0.66
14.001 - 14.500 .........        14         2,365,660.85            2.56
14.501 - 15.000 .........        41         6,243,480.09            6.76
15.001 - 15.500 .........        54         9,881,586.81           10.71
15.501 - 16.000 .........        94        13,977,339.72           15.14
16.001 - 16.500 .........        48         7,600,973.82            8.24
16.501 - 17.000 .........       118        13,543,834.29           14.67
17.001 - 17.500 .........        97         9,533,524.03           10.33
17.501 - 18.000 .........        92         9,263,285.16           10.04
18.001 - 18.500 .........        67         6,267,861.81            6.79
18.501 - 19.000 .........        63         5,405,763.42            5.86
19.001 - 19.500 .........        31         2,277,991.26            2.47
19.501 - 20.000 .........        32         2,679,146.26            2.90
20.001+ .................        27         2,274,897.60            2.46
                                ---       --------------          ------
  Total: ................       783       $92,300,133.21          100.00%
                                ===       ==============          ======
</TABLE>

----------------------
(1)   For adjustable rate mortgage loans only. As of the cut-off date, the
      weighted average maximum mortgage rate of the adjustable rate mortgage
      loans is expected to be approximately 16.82% per annum.




<TABLE>
<CAPTION>
                              MORTGAGE LOANS
                        MINIMUM MORTGAGE RATES(1)
--------------------------------------------------------------------------
                                               AGGREGATE
                             NUMBER OF         PRINCIPAL        PERCENT OF
     MINIMUM MORTGAGE         MORTGAGE          BALANCE          MORTGAGE
         RATES(%)              LOANS          OUTSTANDING         LOANS
-------------------------   -----------   ------------------   -----------
<S>                            <C>         <C>                   <C>
 4.501 -  5.000 .........         1         $   299,093.31         0.32%
 5.001 -  5.500 .........        17           3,499,551.67         3.79
 5.501 -  6.000 .........        12           2,671,845.00         2.89
 6.001 -  6.500 .........         5             804,791.92         0.87
 6.501 -  7.000 .........         3             459,900.61         0.50
 7.001 -  7.500 .........         2             187,859.19         0.20
 7.501 -  8.000 .........         2             612,572.65         0.66
 8.001 -  8.500 .........        17           3,130,606.31         3.39
 8.501 -  9.000 .........        39           6,562,445.80         7.11
 9.001 -  9.500 .........        48           8,664,540.26         9.39
 9.501 - 10.000 .........       110          14,730,086.15        15.96
10.001 - 10.500 .........        62           8,544,881.23         9.26
10.501 - 11.000 .........       104          11,705,564.15        12.68
11.001 - 11.500 .........        87           7,904,748.44         8.56
11.501 - 12.000 .........        88           7,252,412.92         7.86
12.001 - 12.500 .........        64           5,207,198.11         5.64
12.501 - 13.000 .........        53           4,646,273.16         5.03
13.001 - 13.500 .........        20           1,662,296.57         1.80
13.501 - 14.000 .........        26           1,994,794.00         2.16
14.001 - 14.500 .........        14           1,252,825.92         1.36
14.501 - 15.000 .........         7             394,810.57         0.43
15.001 - 15.500 .........         2             111,035.27         0.12
                                ---         --------------       ------
  Total: ................       783         $92,300,133.21       100.00%
                                ===         ==============       ======
</TABLE>

----------------------
(1)   For adjustable-rate mortgage loans only. As of the cut-off date, the
      weighted average minimum mortgage rate of the adjustable-rate mortgage
      loans is expected to be approximately 10.25% per annum.






                                      S-20
<PAGE>


<TABLE>
<CAPTION>
                                MORTGAGE LOANS
                       MONTHS TO NEXT RATE ADJUSTMENT(1)
-------------------------------------------------------------------------------
                                                    AGGREGATE
       NUMBER OF MONTHS           NUMBER OF         PRINCIPAL        PERCENT OF
            TO NEXT                MORTGAGE          BALANCE          MORTGAGE
        ADJUSTMENT DATE             LOANS          OUTSTANDING         LOANS
------------------------------   -----------   ------------------   -----------
<S>                                 <C>         <C>                  <C>
55 ...........................        11         $ 2,552,099.86         2.77%
33 ...........................        10             906,428.12         0.98
32 ...........................       124          12,773,637.39        13.84
31 ...........................       134          12,676,596.13        13.73
30 ...........................        59           5,067,612.32         5.49
29 ...........................        24           2,666,615.26         2.89
28 ...........................         7             527,765.56         0.57
27 ...........................         3             148,982.18         0.16
26 ...........................         2             345,962.07         0.37
25 ...........................         1             116,424.71         0.13
22 ...........................         2             365,797.52         0.40
21 ...........................        38           5,517,612.77         5.98
20 ...........................       115          14,938,133.90        16.18
19 ...........................       110          15,049,366.90        16.30
18 ...........................        55           6,953,677.55         7.53
17 ...........................        21           2,638,506.37         2.86
16 ...........................        12           1,458,022.28         1.58
15 ...........................         3             556,168.33         0.60
14 ...........................         3             481,396.09         0.52
13 ...........................        10           1,074,729.83         1.16
                                     ---         --------------       ------
Less than or equal to 12 .....        39           5,484,598.07         5.94
                                     ---         --------------       ------
  Total: .....................       783         $92,300,133.21       100.00%
                                     ===         ==============       ======
</TABLE>

----------------------
(1)   For adjustable-rate mortgage loans only. As of the cut-off date, the
      weighted average months to next adjustment date of the adjustable-rate
      mortgage loans is expected to be approximately 24 months.



<TABLE>
<CAPTION>
                           MORTGAGE LOANS
                       PERIODIC RATE CAPS(1)
--------------------------------------------------------------------
                                        AGGREGATE
                      NUMBER OF         PRINCIPAL         PERCENT OF
   PERIODIC RATE       MORTGAGE          BALANCE           MORTGAGE
      CAPS(%)           LOANS          OUTSTANDING          LOANS
------------------   -----------   -------------------   -----------
<S>                     <C>         <C>                   <C>
1.0 ..............       649         $72,329,045.89         78.36%
1.5 ..............       131          19,714,348.15          21.36
2.0 ..............         3             256,739.17           0.28
                         ---         --------------        ------
  Total: .........       783         $92,300,133.21        100.00%
                         ===         ==============        ======
</TABLE>

----------------------
(1)   For adjustable-rate mortgage loans only. As of the cut-off date, the
      weighted average periodic rate cap of the adjustable-rate mortgage loans
      is expected to be approximately 1.11%.




<TABLE>
<CAPTION>
                              MORTGAGE LOANS
                       FIRST PERIODIC RATE CAPS(1)
--------------------------------------------------------------------------
                                               AGGREGATE
                             NUMBER OF         PRINCIPAL        PERCENT OF
                              MORTGAGE          BALANCE          MORTGAGE
 FIRST PERIODIC RATE CAP       LOANS          OUTSTANDING         LOANS
-------------------------   -----------   ------------------   -----------
<S>                            <C>       <C>                     <C>
1.0 .....................        10       $ 1,395,698.85            1.51%
1.5 .....................        65         7,390,965.13            8.01
2.0 .....................         5           366,559.37            0.40
3.0 .....................       668        75,825,351.57           82.15
5.0 .....................        35         7,321,558.29            7.93
                                ---       --------------          ------
  Total: ................       783       $92,300,133.21          100.00%
                                ===       ==============          ======
</TABLE>

----------------------
(1)   For adjustable-rate mortgage loans only. As of the cut-off date, the
      weighted average initial rate cap of the adjustable-rate mortgage loans
      is expected to be approximately 3.00%.


                                      S-21
<PAGE>

UNDERWRITING STANDARDS


     The mortgage loans have either been originated by a seller or purchased by
a seller from various banks, savings and loan associations, mortgage bankers
(which may or may not be affiliated with a 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 Federal Housing Authority or
partially guaranteed by the Veterans Administration or which do not qualify for
sale to Fannie Mae or Freddie Mac). The underwriting standards applicable to
the mortgage loans typically differ from, and, with respect to a substantial
number of mortgage loans, are generally less stringent than, the underwriting
standards established by Fannie Mae or Freddie Mac primarily with respect to
original principal balances, loan-to-value ratios, mortgagor income, mortgagor
credit history, mortgagor employment history, required documentation, interest
rates, mortgagor occupancy of the mortgaged property and/or property types. To
the extent the programs reflect underwriting standards different from these of
Fannie Mae and Freddie Mac, 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 mortgagor. In
general, the depositor has not re-underwritten any mortgage loan. In general,
the sellers have not re-underwritten any mortgage loan that was purchased by
that seller rather than originated by it.

     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, such mortgagor will have furnished information
(which may be supplied solely in such application) 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 mortgagors 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 verifications
(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 and
other expenses related to the mortgaged property (such as property taxes,
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 other fixed obligations 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 loan-to-value ratio 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 "reduced
documentation," "no ratio" or "no documentation" programs which require less
documentation and verification than do traditional "full documentation"
programs. Generally, under a "reduced documentation" program, either no
verification of a mortgagor's stated income and/or employment is undertaken by
the originator or no verification of a mortgagor's assets is undertaken by the
originator. Under a "no ratio" program, certain mortgagors with acceptable
payment histories will not be required to provide any information regarding
income and no other investigation regarding the mortgagor's income will be
undertaken. Under a "no documentation" program, no verification of a
mortgagor's income or assets is undertaken by the originator.


                                      S-22
<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
Fannie Mae and/or Freddie Mac. Appraisers may be staff appraisers employed by
the originator or independent appraisers selected in accordance with
pre-established appraisal procedure guidelines established by or acceptable to
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.

     Under the underwriting standards, various risk categories are used to
grade the likelihood that the mortgagor will satisfy the repayment conditions
of the mortgage loan. These categories establish the maximum permitted
loan-to-value ratio and loan amount, given the occupancy status of the
mortgaged property and the mortgagor's credit history and debt-to-income ratio.
In general, higher credit risk mortgage loans are graded in categories that
permit higher debt-to-income ratios and more (or more recent) major derogatory
credit items such as outstanding judgments or prior bankruptcies; however, the
underwriting standards establish lower maximum loan-to-value ratios and lower
maximum loan amounts for loans graded in such categories.

     A substantial portion of the mortgage loans were classified in relatively
low (i.e., relatively higher risk) credit categories. The incidence of
delinquency, default and bankruptcy with respect to such mortgage loans is
expected to be greater than if such mortgage loans had been classified in
relatively higher categories.


ASSIGNMENT OF THE MORTGAGE LOANS

     Pursuant to the pooling and servicing agreement, on the closing date, the
depositor 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
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
related 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 or its custodian 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 related seller.

     The trustee or its custodian will review each mortgage file within 90 days
of the closing date or promptly after the trustee's or its custodian's receipt
of any document permitted to be delivered after such date and if any document
in a mortgage file is found to be missing or defective in a material respect
and the applicable seller does not cure such defect within 90 days of notice
thereof from the trustee or its custodian or within such longer period not to
exceed 720 days after such date in the case of missing


                                      S-23
<PAGE>

documents not returned from the public recording office, such seller will be
obligated to repurchase the related mortgage loan from the trust fund. Rather
than repurchase the mortgage loan as provided above, such 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 either 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:

    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 on the related distribution date),

    o have a mortgage rate not lower than, and not more than 1% per annum higher
      than, that of the deleted mortgage loan and with respect to the
      adjustable-rate mortgage loans, have a maximum mortgage rate and minimum
      mortgage rate not less than the respective rates for the deleted mortgage
      loan, have the same index as the deleted mortgage loan and a gross margin
      equal to or greater than the deleted mortgage loan,

    o have a LTV 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 SELLERS

     The information set forth in this section contains a brief description of
the sellers of the mortgage loans. The primary obligation of a seller under the
pooling and servicing agreement is to repurchase a related mortgage loan in the
event of a breach of a representation and warranty or if the related mortgage
loan file is defective.

     The following information has been provided by DLJMC and PNC, as
applicable, and none of the depositor, the underwriter, the servicers or the
trustee make any representations or warranties as to the accuracy or
completeness of such information.


DLJ MORTGAGE CAPITAL, INC.

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


PNC MORTGAGE SECURITIES CORP.

     PNC Mortgage Securities Corp. ("PNC"), a Delaware corporation, is a
wholly-owned indirect subsidiary of The PNC Financial Services Group, Inc., a
diversified financial services company. PNC was organized for the purpose of
providing mortgage lending institutions, including affiliated institutions,
with greater financing and lending flexibility, by purchasing mortgage loans
from such institutions and issuing mortgage-backed securities. PNC's principal
executive officers are located at 75 North Fairway Drive, Vernon Hills,
Illinois, 60061, and its telephone number is (847) 549-6500.


                                      S-24
<PAGE>

                          SERVICING OF MORTGAGE LOANS

GENERAL

     Under the pooling and servicing agreement, Calmco will act as servicer of
approximately 60.48% of the mortgage loans, Old Kent will act as servicer of
approximately 3.62% of the mortgage loans and PNC will act as servicer of
approximately 35.90% of the mortgage loans, in each case by principal balance
as of September 1, 2000. However, Calmco, in its capacity as special servicer
under the pooling and servicing agreement, may elect to act as servicer of any
mortgage loan which becomes 90 days or more delinquent. Upon the transfer of
the servicing of any such delinquent mortgage loan to Calmco, the prior
servicer of any such mortgage loan, other than Calmco, will have no servicing
obligations with respect to that delinquent mortgage loan. All references
herein to servicer include Calmco in its capacity as special servicer under the
pooling and servicing agreement, unless otherwise indicated.

     Each servicer will be responsible for servicing the mortgage loans
serviced by it 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 servicers will have any servicing obligations with respect to the
mortgage loans not serviced by it.

     Each 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, each 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
payable to the related servicer. Funds credited to a collection account may be
invested for the benefit and at the risk of the related 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 related servicer.

     The pooling and servicing agreement prohibits the resignation of a
servicer, including the special servicer, except upon (a) appointment of a
successor servicer or special servicer (which may be with respect to all or a
portion of the specially serviced mortgage loans), as applicable 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, or (b) a determination that its duties thereunder are no longer
permitted under applicable law as evidenced by an opinion of counsel. No such
resignation will be effective until a successor servicer or special servicer,
as applicable, has assumed such servicing obligations in the manner provided in
the pooling and servicing agreement.

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

     All references to "Master Servicer" in the prospectus should be read to be
references to the servicers described in this prospectus supplement.

CALMCO SERVICING L.P.

     Calmco Servicing L.P. ("Calmco"), a Delaware limited partnership, is a
subsidiary of the underwriter and an affiliate of the depositor. The principal
executive offices of Calmco are located at 9600 Great Hills Trail, Suite 200-W,
Austin, Texas 78759.

     Calmco was established in July 1998, as successor in interest to Calmco
Inc., a Delaware corporation established in December 1995 as a subsidiary of
the underwriter and an affiliate of the depositor to perform default servicing
for approximately 30,000 subprime residential mortgage loans. Calmco currently
acts through its general partner, Calmco GP LLC, a Delaware limited liability
company, which owns a 1.3% interest in Calmco.


                                      S-25
<PAGE>

     Calmco currently is an approved servicer for Fannie Mae, Freddie Mac and
the Department of Housing and Urban Development (both Title I and Title II
loans) and the Veterans Administration. Calmco is also approved as a servicer
by S&P and Fitch. In addition, Calmco is rated "Above Average" by S&P and
"RSS2" (full approval with noted strengths) by Fitch for special servicing and
rated "RPS2" (full approval with noted strengths) by Fitch for primary subprime
servicing. Calmco maintains all material licenses throughout the United States
for state regulated third party collections and servicing.


     As of June 30, 2000 Calmco had a net worth of approximately $2.4 million
and currently has approximately $564 million worth of assets under management.


     Calmco began to primary service mortgage loans in the second quarter of
2000. Consequently, Calmco does not yet have any meaningful information
egarding delinquency and loss experience with respect to mortgage loans for
which it acts as primary servicer.


                                      S-26
<PAGE>

PNC'S DELINQUENCY, LOSS AND FORECLOSURE EXPERIENCE

     The following table sets forth certain information, as reported to PNC by
its various servicers, concerning recent delinquency, loss and foreclosure
experience on mortgage loans included in various mortgage pools underlying all
series of PNC's mortgage pass-through certificates with respect to which one or
more classes of certificates were publicly offered.

     There can be no assurance that the delinquency, loss and foreclosure
experience set forth in the following table (which includes mortgage loans with
various terms to stated maturity and a variety of payment characteristics, such
as balloon loans and buydown loans) will be representative of the results that
may be experienced with respect to the mortgage loans included in the trust and
serviced by PNC. Delinquencies, losses and foreclosures generally are expected
to occur more frequently after the first full year of the life of a mortgage
loan. Accordingly, because a large number of mortgage loans included in the
mortgage pools underlying PNC's mortgage pass-through certificates have been
recently originated, the current level of delinquencies, losses and
foreclosures may not be representative of the levels that may be experienced
over the lives of those mortgage loans.



<TABLE>
<CAPTION>
                                           AT OR FOR THE                   AT OR FOR THE                  AT OR FOR THE
                                            YEAR ENDED                      YEAR ENDED                   SIX MONTHS ENDED
                                         DECEMBER 31, 1998               DECEMBER 31, 1999                JUNE 30, 2000
                                   -----------------------------   -----------------------------   ----------------------------
                                                    BY DOLLAR                       BY DOLLAR                       BY DOLLAR
                                                    AMOUNT OF                       AMOUNT OF                       AMOUNT OF
                                    BY NO. OF         LOANS         BY NO. OF         LOANS         BY NO. OF         LOANS
                                      LOANS       (IN MILLIONS)       LOANS       (IN MILLIONS)       LOANS       (IN MILLIONS)
                                   -----------   ---------------   -----------   ---------------   -----------   --------------
<S>                                <C>           <C>               <C>           <C>               <C>           <C>
Total Rated Mortgage
 Pass-Through Certificate
 Portfolio .....................     74,769        $ 16,647.8        105,213       $ 21,983.8        104,901      $ 22,044.0
Average Balance(1) .............     47,628          10,998.8         94,255         20,234.2        104,721        21,967.3
Period of Delinquency(2)
   31 to 59 days ...............      2,178             488.8          2,068            362.7          2,015           351.9
   60 to 89 days ...............        173              35.5            322             52.1            343            58.8
   90 days or more .............        108              23.1            261             44.2            302            52.7
                                     ------        ----------        -------       ----------        -------      ----------
Total Delinquent Loans .........      2,459        $    547.3          2,651       $    459.0          2,660           463.4
Delinquency Rate ...............       3.29%             3.29%          2.52%            2.09%          2.54%           2.10%
Foreclosures(3) ................        217        $     43.3            340       $     68.1            513      $     87.4
Foreclosure Ratio(4) ...........       0.29%             0.26%          0.32%            0.31%          0.49%           0.40%
Covered Losses(5) ..............                   $      8.6                      $      2.8                     $      1.4
Applied Losses(6) ..............                   $      0.6                      $      0.7                     $      0.8
</TABLE>

----------
(1)   Average Balance for the period indicated is based on end of month
      balances divided by the number of months in the period indicated.

(2)   The indicated periods of delinquency are based on the number of days past
      due, based on a 30-day month. No mortgage loan is considered delinquent
      for the purpose of this table until one month has passed after the
      related due date. A mortgage loan is no longer considered delinquent once
      foreclosure proceedings have begun.

(3)   Includes mortgage loans for which foreclosure proceedings had been
      instituted or with respect to which the related property had been
      acquired as of the dates indicated.

(4)   Foreclosures as a percentage of total mortgage loans at the end of each
      period.

(5)   Covered Losses are Gross Losses (as defined below) realized during the
      period indicated that were covered by credit enhancements obtained or
      established for one or more pools of mortgage loans, exclusive of any
      insurance (such as primary mortgage insurance or ordinary hazard
      insurance) that was available for specific mortgage loans or mortgaged
      properties. "Gross Losses" are the sum for each mortgage loan liquidated
      during the applicable period of the difference between (a) the sum of the
      outstanding principal balance plus accrued interest, plus all liquidation
      expenses related to the mortgage loan and (b) all amounts received in
      connection with the liquidation of the related mortgaged property,
      including insurance (such as primary mortgage insurance or ordinary
      hazard insurance) available solely for the mortgage loan or the related
      mortgaged property.

(6)   Applied Losses are Covered Losses that were applied against the
      outstanding principal balance of the mortgage pass-through certificates
      during the period indicated.


SERVICING COMPENSATION AND PAYMENT OF EXPENSES

     The servicing fees are payable out of the interest payments on each
mortgage loan. The servicing fees will vary from mortgage loan to mortgage
loan. The weighted average servicing fee rate for the mortgage


                                      S-27
<PAGE>

loans is 0.572% per annum. The weighted average servicing fee payable to Calmco
with respect to the mortgage loans will be approximately 0.563% per annum of
the aggregate stated principal balance of the mortgage loans serviced by it;
the weighted average servicing fee payable to Old Kent with respect to the
mortgage loans will be approximately 0.500% per annum of the aggregate stated
principal balance of the mortgage loans serviced by it and the weighted average
serciving fee payable to PNC with respect to the mortgage loans will be
approximately 0.593% per annum of the aggregate stated principal balance of the
mortgage loans serviced by it. Upon any servicing transfer of a delinquent
mortgage loan to Calmco, Calmco will be entitled to receive the servicing fee
with respect to that mortgage loan. No additional servicing compensation will
be paid to Calmco in connection with its special servicing functions. The
servicers are 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 related
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 related servicer will also be entitled to receive late
payment fees, assumption fees and other similar charges, other than prepayment
premiums. Each servicer will be entitled to receive all reinvestment income
earned on amounts on deposit in the related Collection Account.

     The net mortgage rate of a mortgage loan is the mortgage rate of that
mortgage loan minus the servicing fee rate of that mortgage loan. 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 LOAN

     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.

     Each servicer is obligated to remit to the trust on the day before each
distribution date an amount, referred to in this prospectus supplement as
Compensating Interest, equal to the lesser of:

    o any shortfall for the previous month in interest collections resulting
      from the timing of principal prepayments in full on the mortgage loans
      serviced by it made from the fifteenth day of the calendar month preceding
      such distribution date to the last day of such month; and

    o the sum of:

          o  a portion of the applicable monthly servicing fee payable to such
             servicer equal to 0.04%, with respect to approximately 12.22% of
             the mortgage loans serviced by PNC and 0.05% per annum, with
             respect to the remaining mortgage loans serviced by PNC and 0.05%
             per annum with respect to the mortgage loans serviced by Calmco
             and Old Kent, in each case, of the aggregate stated principal
             balance of the mortgage loans serviced by it;

          o  any reinvestment income realized by such servicer relating to
             prepayments in full on the mortgage loans serviced by it made
             during the period commencing on the fifteenth day of the month
             preceding the month in which the related distribution date occurs
             (or, in the case of the first distribution date, beginning on the
             cut-off date) and ending on the fourteenth day of the month in
             which the distribution date occurs; and

          o  interest payments on such prepayments in full received during the
             period of the first day through the fourteenth day of the month
             of such distribution date.

     Any remaining shortfall in interest collections resulting from partial
principal prepayments and the timing of principal prepayments in full, to the
extent not covered by excess interest collections, may result in a shortfall in
interest distributions on the certificates.


                                      S-28
<PAGE>

ADVANCES FROM SERVICERS


     Subject to the limitations described below and only with respect to those
mortgage loans serviced by it, each servicer will be required to advance, prior
to each distribution date, from its own funds or amounts received for the
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.


     In the event that a balloon loan is not paid in full on its maturity date,
the applicable servicer will also be obligated to make advances with respect to
the assumed monthly payments that would have been due on such balloon loan
based upon the original amortization schedule for the loan, unless the servicer
determines that the advance would not be recoverable. In no event will a
servicer be obligated to advance the balloon payment due on any balloon loan.


     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. Each servicer is obligated to make advances for delinquent
payments of principal of or interest on each mortgage loan serviced by it 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
related 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 any 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 any servicer is terminated as a result of the occurrence of an event
of default, the trustee, in its capacity as successor servicer, or such other
successor servicer will be obligated to make that advance, in accordance with
the terms of the pooling and servicing agreement. In addition to the events of
default described in the prospectus, with respect to Calmco, an event of
default under the pooling and servicing agreement will occur and be continuing
if cumulative losses or delinquency levels of the mortgage loans serviced by
such servicer exceed the levels set forth in 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 holder of the Class X Certificates may, at its option, purchase from
the trust any mortgage loan which is delinquent 90 days or more. That purchase
shall be at a price equal to 100% of the 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 and any unreimbursed servicer advances.


                                      S-29
<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 Mortgage Pass-Through Certificates, Series 2000-3 will consist of the
Class A-1, Class A-2, Class A-3, Class A-IO and Class R Certificates, which are
collectively referred to as the senior certificates, the Class M-1, Class M-2,
Class B and Class X Certificates, which are collectively referred to as the
subordinate certificates, and the Class P Certificates. Only the senior
certificates and the Class M-1, Class M-2 and Class B Certificates, which are
collectively referred to as the offered certificates, are offered by this
prospectus supplement. The classes of offered certificates will have the
respective initial Class Principal Balances or initial notional amount, subject
to the permitted variance, and pass-through rates described on page S-3 of this
prospectus supplement.

     The Class X Certificates will be issued without a principal amount or
interest rate, and will be entitled only to such amounts as are described
herein. The Class P Certificates will be issued without a principal amount or
interest rate, and will be entitled to all prepayment premiums received on the
mortgage loans.

     Distributions on the certificates will be made on the 25th day of each
month or, if such 25th day is not a business day, on the next succeeding
business day, commencing in October 2000, to the persons in whose names those
certificates are registered as of the related record date. The record date for
any distribution date is the business day immediately preceding the applicable
distribution date so long as the certificates remain in book-entry form and,
otherwise, the last business day of the calendar month immediately preceding
the applicable 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 certificates with an aggregate
initial certificate balance or notional 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 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.


BOOK-ENTRY CERTIFICATES

     The offered certificates, other than the Class R Certificates, will be
book-entry certificates. The book-entry certificates 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 in the United States, or
Clearstream, Luxembourg or the Euroclear System, referred to as Euroclear, in
Europe, if they are participants of these systems, or indirectly through
organizations which are participants in these systems. Clearstream, Luxembourg
and Euroclear will hold omnibus positions on behalf of their participants
through customers' securities accounts in Clearstream, Luxembourg's and
Euroclear's names on the books of their respective depositaries which in turn
will hold positions in customers' securities accounts in the depositaries'
names on the books of DTC. Citibank, N.A., referred to as Citibank, will act as
depositary for Clearstream, Luxembourg and The Chase Manhattan Bank, referred
to as Chase, will act as depositary for Euroclear. Collectively these entities
are referred to as the European depositaries.

     Investors in the DTC registered 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


                                      S-30
<PAGE>

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 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 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.


GLOSSARY OF TERMS

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

     ACCRUAL PERIOD--For any class of offered certificates, other than the
Class A-IO Certificates, and any distribution date, the period commencing on
the immediately preceding distribution date (or the closing date, in the case
of the first Accrual Period) and ending on the day immediately preceding the
related distribution date. For the Class A-IO Certificates and any distribution
date, the calendar month immediately preceding the related distribution date.

     AGGREGATE LOAN BALANCE--As of any distribution date will be equal to the
aggregate of the Stated Principal Balances of the mortgage loans as of the last
day of the prior month (and reduced by principal prepayments in full made
during the related Prepayment Period).

     BASIS RISK SHORTFALL--For any class of offered certificates, other than
the Class A-IO Certificates, and any distribution date, the sum of


                                      S-31
<PAGE>

   (1)   the excess, if any, of the related Current Interest calculated on the
         basis of the lesser of (x) one-month LIBOR plus the applicable
         certificate margin and (y) the Maximum Interest Rate over the related
         Current Interest for the applicable distribution date,

   (2)   any Basis Risk Shortfall remaining unpaid from prior distribution
         dates, and

   (3)   30 days interest on the amount in clause (2) calculated on the basis
         of the lesser of (x) one-month LIBOR plus the applicable certificate
         margin and (y) the Maximum Interest Rate.

     B PRINCIPAL PAYMENT AMOUNT--For any distribution date on or after the
Stepdown Date and as long as a Trigger Event has not occurred with respect to
such distribution date, will be the amount, if any, by which (x) the sum of (i)
the Class Principal Balance of the senior certificates and the aggregate Class
Principal Balances of the Class M-1 and Class M-2 Certificates, in each case,
after giving effect to payments on such distribution date and (ii) the Class
Principal Balance of the Class B Certificates immediately prior to such
distribution date exceeds (y) the lesser of (A) the product of (i)
approximately 95.5% and (ii) the Aggregate Loan Balance for such distribution
date and (B) the amount, if any, by which (i) the Aggregate Loan Balance for
such distribution date exceeds (ii) 0.50% of the Aggregate Loan Balance as of
the cut-off date.

     CARRYFORWARD INTEREST--For any class of offered certificates and
distribution date, the sum of (1) the amount, if any, by which (x) the sum of
(A) Current Interest for such class for the immediately preceding distribution
date and (B) any unpaid Carryforward Interest from previous distribution dates
exceeds (y) the amount paid in respect of interest on such class on such
immediately preceding distribution date, and (2) interest on such amount for
the related Accrual Period at the applicable pass-through rate.

     CLASS A-IO NOTIONAL AMOUNT--For any distribution date will equal the
aggregate of the Stated Principal Balances of the mortgage loans as of the
first day of the related Collection Period.

     CLASS PRINCIPAL BALANCE--For any class of certificates, other than the
Class A-IO Certificates, as of any date of determination, an amount equal to
the initial principal balance of that class, reduced by the aggregate of the
following amounts allocable to that class:

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

   o in the case of any class of subordinate certificates, any reductions to
     the Class Principal Balance thereof due to Realized Losses, as described
     below under "--Credit Enhancement--Application of Realized Losses."

     COLLECTION PERIOD--For any distribution date is the period from the second
day of the month immediately preceding such distribution date to and including
the first day of the month of that distribution date.

     CURRENT INTEREST--For any class of offered certificates and distribution
date, the amount of interest accruing at the applicable pass-through rate on
the related Class Principal Balance or the Class A-IO Notional Amount, as
applicable, during the related Accrual Period.

     DEFERRED AMOUNT--For any class of subordinate certificates and
distribution date, will equal the amount by which (x) the aggregate of the
Applied Loss Amounts previously applied in reduction of the Class Principal
Balance thereof exceeds (y) the aggregate of amounts previously paid in
reimbursement thereof.

     DELINQUENCY RATE--For any month will be, generally, the fraction,
expressed as a percentage, the numerator of which is the aggregate outstanding
principal balance of all mortgage loans 60 or more days delinquent (including
all foreclosures and REO Properties) as of the close of business on the last
day of such month, and the denominator of which is the Aggregate Loan Balance
as of the close of business on the last day of such month.

     INTEREST REMITTANCE AMOUNT--For any distribution date will equal the sum
of (1) all interest collected (other than Payaheads) or advanced in respect of
Scheduled Payments on the mortgage loans


                                      S-32
<PAGE>

during the related Collection Period, the interest portion of Payaheads
previously received and intended for application in the related Collection
Period and the interest portion of all prepayments received on the mortgage
loans during the related Prepayment Period, less (x) the Servicing Fees with
respect to such mortgage loans and (y) unreimbursed Advances and other amounts
due to a Servicer or the Trustee with respect to such mortgage loans, to the
extent allocable to interest, (2) all Compensating Interest paid by each
Servicer with respect to the mortgage loans with respect to the related
Collection Period, (3) the portion of any Substitution Amount or purchase price
paid with respect to such mortgage loans during the related Collection Period
allocable to interest and (4) all Net Liquidation Proceeds and any other
recoveries (net of unreimbursed Advances, servicing advances and expenses, to
the extent allocable to interest, and unpaid Servicing Fees) collected with
respect to the mortgage loans during the related Collection Period, to the
extent allocable to interest.

     INTEREST SHORTFALL--For any distribution date is equal to the aggregate
shortfall, if any, in collections of interest (adjusted to the related net
mortgage rate) on mortgage loans resulting from (a) principal prepayments in
full and in part received during the related Prepayment Period and (b) interest
payments on certain of the mortgage loans being limited pursuant to the
provisions of the Soldiers' and Sailors' Civil Relief Act of 1940.

     MAXIMUM INTEREST RATE--For any class of offered certificates, other than
the Class A-IO Certificates, and any distribution date will be an annual rate
equal to the weighted average of the maximum mortgage rates of the adjustable
rate mortgage loans and the mortgage rates of the fixed rate mortgage loans
less the sum of the weighted average servicing fee rate, the trustee fee rate
and the Class A-IO pass-through rate.

     M-1 PRINCIPAL PAYMENT AMOUNT--For any distribution date on or after the
Stepdown Date and as long as a Trigger Event has not occurred with respect to
such distribution date, will be the amount, if any, by which (x) the sum of (i)
the Class Principal Balance of the senior certificates after giving effect to
payments on such distribution date and (ii) the Class Principal Balance of the
Class M-1 Certificates immediately prior to such distribution date exceeds (y)
the lesser of (A) the product of (i) approximately 81.0% and (ii) the Aggregate
Loan Balance for such distribution date and (B) the amount, if any, by which
(i) the Aggregate Loan Balance for such distribution date exceeds (ii) 0.50% of
the Aggregate Loan Balance as of the cut-off date.

     M-2 PRINCIPAL PAYMENT AMOUNT--For any distribution date on or after the
Stepdown Date and as long as a Trigger Event has not occurred with respect to
such distribution date, will be the amount, if any, by which (x) the sum of (i)
the Class Principal Balance of the senior certificates and the Class Principal
Balance of the Class M-1 Certificates, in each case, after giving effect to
payments on such distribution date and (ii) the Class Principal Balance of the
Class M-2 Certificates immediately prior to such distribution date exceeds (y)
the lesser of (A) the product of (i) approximately 88.5% and (ii) the Aggregate
Loan Balance for such distribution date and (B) the amount, if any, by which
(i) the Aggregate Loan Balance for such distribution date exceeds (ii) 0.50% of
the Aggregate Loan Balance as of the cut-off date.

     MONTHLY EXCESS CASHFLOW--For any distribution date, an amount equal to the
sum of the Monthly Excess Interest and Overcollateralization Release Amount, if
any, for such date.

     NET FUNDS CAP--For any distribution date, will be the annual rate equal to
(a) a fraction, expressed as a percentage, the numerator of which is the
product of (1) the Optimal Interest Remittance Amount for such date and (2) 12,
and the denominator of which is the Aggregate Loan Balance for the immediately
preceding distribution date, multiplied by (b) a fraction, the numerator of
which is 30 and the denominator of which is the actual number of days in the
immediately preceding accrual period.

     NET LIQUIDATION PROCEEDS--All amounts, net of (1) unreimbursed, reasonable
out-of-pocket expenses and (2) unreimbursed Advances, received and retained in
connection with the liquidation of defaulted mortgage loans, through insurance
or condemnation proceeds, by foreclosure or otherwise, together with any net
proceeds received on a monthly basis with respect to any properties acquired on
behalf of the certificateholders by foreclosure or deed in lieu of foreclosure.



                                      S-33
<PAGE>

     OPTIMAL INTEREST REMITTANCE AMOUNT--For any distribution date will be
equal to the excess of (i) the product of (1) (x) the weighted average of the
mortgage rates of the mortgage loans as of the first day of the related
Collection Period less the weighted average servicing fee rate, the trustee fee
rate (as set forth in the pooling and servicing agreement) and the pass-through
rate of the Class A-IO Certificates divided by (y) 12 and (2) the Aggregate
Loan Balance for the immediately preceding distribution date, over (ii) any
expenses that reduce the Interest Remittance Amount that did not arise as a
result of a default or delinquency of the mortgage loans.

     OVERCOLLATERALIZATION AMOUNT--For any distribution date will be equal to
the amount, if any, by which (x) the Aggregate Loan Balance for such
distribution date exceeds (y) the aggregate Class Principal Balance of the
offered certificates after giving effect to payments on such distribution date.


     OVERCOLLATERALIZATION DEFICIENCY--For any distribution date will be equal
to the amount, if any, by which (x) the Targeted Overcollateralization Amount
for such distribution date exceeds (y) the Overcollateralization Amount for
such distribution date, calculated for this purpose after giving effect to the
reduction on such distribution date of the aggregate Class Principal Balance of
the Certificates resulting from the payment of the Principal Payment Amount on
such distribution date, but prior to allocation of any Applied Loss Amount on
such distribution date.

     OVERCOLLATERALIZATION RELEASE AMOUNT--For any distribution date will be
equal to the lesser of (x) the Principal Remittance Amount for such
distribution date and (y) the amount, if any, by which (1) the
Overcollateralization Amount for such date, calculated for this purpose on the
basis of the assumption that 100% of the aggregate of the Principal Remittance
Amount for such date is applied on such date in reduction of the aggregate of
the Class Principal Balances of the Certificates, exceeds (2) the Targeted
Overcollateralization Amount for such date.

     PAYAHEAD--Any Scheduled Payment intended by the related mortgagor to be
applied in a Collection Period subsequent to the Collection Period in which
such payment was received.

     PREPAYMENT PERIOD--For any distribution date and principal prepayment in
full received on a mortgage loan, the period from the fifteenth day of the
prior calendar month (or in the case of the first distribution date, from the
cut-off date) through the fourteenth day of the month of that distribution
date. For any distribution date and partial principal prepayment received on a
mortgage loan, the calendar month preceding that distribution date.

     PRINCIPAL PAYMENT AMOUNT--For any distribution date will be equal to the
Principal Remittance Amount for such date minus the Overcollateralization
Release Amount, if any, for such date.

     PRINCIPAL REMITTANCE AMOUNT--For any distribution date will be equal to
the sum of (1) all principal collected (other than Payaheads) or advanced in
respect of Scheduled Payments on the mortgage loans during the related
Collection Period (less unreimbursed Advances, servicing advances and other
amounts due to each Servicer and the Trustee with respect to the mortgage
loans, to the extent allocable to principal) and the principal portion of
Payaheads previously received and intended for application in the related
Collection Period, (2) all principal prepayments received during the related
Prepayment Period, (3) the outstanding principal balance of each mortgage loan
that was repurchased by a Seller, Calmco or the Class X Certificateholder
during the related Collection Period, (4) the portion of any Substitution
Amount paid with respect to any replaced mortgage loans during the related
Collection Period allocable to principal and (5) all Net Liquidation Proceeds
and any other recoveries (net of unreimbursed Advances, servicing advances and
other expenses, to the extent allocable to principal) collected with respect to
the mortgage loans during the related Collection Period, to the extent
allocable to principal.

     ROLLING THREE MONTH DELINQUENCY RATE--For any distribution date will be
the fraction, expressed as a percentage, equal to the average of the
Delinquency Rates for each of the three (or one and two, in the case of the
first and second distribution dates) immediately preceding months.

     SCHEDULED PAYMENT--For any mortgage loan, the monthly scheduled payment of
interest and principal, as determined in accordance with the provisions of the
related mortgage note.


                                      S-34
<PAGE>

     SENIOR ENHANCEMENT PERCENTAGE--For any distribution date will be the
fraction, expressed as a percentage, the numerator of which is the sum of the
aggregate Class Principal Balance of the Class M-1, Class M-2 and Class B
Certificates and the Overcollateralization Amount (which, for purposes of this
definition only, shall not be less than zero), in each case after giving effect
to payments on such distribution date (assuming no Trigger Event has occurred),
and the denominator of which is the Aggregate Loan Balance for such
distribution date.


     SENIOR PRINCIPAL PAYMENT AMOUNT--For any distribution date on or after the
Stepdown Date and as long as a Trigger Event has not occurred with respect to
such distribution date, will be the amount, if any, by which (x) the Class
Principal Balance of the senior certificates immediately prior to such
distribution date exceeds (y) the lesser of (A) the product of (i)
approximately 63.5% and (ii) the Aggregate Loan Balance for such distribution
date and (B) the amount, if any, by which (i) the Aggregate Loan Balance for
such distribution date exceeds (ii) 0.50% of the Aggregate Loan Balance as of
the cut-off date.


     STATED PRINCIPAL BALANCE--For any mortgage loan as of any date of
determination will be generally equal to its outstanding principal balance as
of the cut-off date, after giving effect to Scheduled Payments due on or before
such date, whether or not received, reduced by (i) the principal portion of all
Scheduled Payments due on or before the Due Date in the Collection Period
immediately preceding such date of determination, whether or not received, and
(ii) all amounts allocable to unscheduled principal payments received on or
before the last day of the Collection Period immediately preceding such date of
determination.


     STEPDOWN DATE--The date occurring on the later of (x) the distribution
date in October 2003 and (y) the first distribution date on which the Senior
Enhancement Percentage (calculated for this purpose after giving effect to
payments or other recoveries in respect of the mortgage loans during the
related Collection Period but before giving effect to payments on the
Certificates on such distribution date) is greater than or equal to
approximately 36.5%.


     SUBSTITUTION AMOUNT--The amount, if any, by which the Stated Principal
Balance of a mortgage loan required to be removed from the trust due to a
breach of a representation and warranty or defective documentation exceeds the
Stated Principal Balance of the related substitute mortgage loan, plus unpaid
interest accrued thereon.


     TARGETED OVERCOLLATERALIZATION AMOUNT--For any distribution date prior to
the Stepdown Date, 2.25% of the Aggregate Loan Balance as of the cut-off date;
with respect to any distribution date on or after the Stepdown Date and with
respect to which a Trigger Event has not occurred, the greater of (a) 4.50% of
the Aggregate Loan Balance for such distribution date, or (b) 0.50% of the
Aggregate Loan Balance as of the cut-off date; with respect to any distribution
date on or after the Stepdown Date with respect to which a Trigger Event has
occurred and is continuing, the Targeted Overcollateralization Amount for the
distribution date immediately preceding such distribution date.


     TRIGGER EVENT--A Trigger Event will occur for any distribution date if the
Rolling Three Month Delinquency Rate as of the last day of the related
Collection Period equals or exceeds 45% of the Senior Enhancement Percentage
for such distribution date


DISTRIBUTIONS OF INTEREST


     The pass-through rate for each class of offered certificates, other than
the Class A-IO Certificates, for each distribution date is a per annum rate
equal to the lesser of (i) the sum of the one-month LIBOR for that distribution
date plus the related certificate margin and (ii) the Net Funds Cap. The
pass-through rate for the Class A-IO Certificates for each distribution date is
equal to 0.35% per annum. If Calmco does not exercise its option to purchase
the mortgage loans when it is first entitled to do so, as described herein
under "--Optional Termination" herein, then with respect to that distribution
date and each succeeding distribution date, the certificate margin will
increase for the Class A-1, Class A-2, Class M-1, Class M-2 and Class B
Certificates.


                                      S-35
<PAGE>

     The certificate margins for the offered certificates are as follows:




<TABLE>
<CAPTION>
                     CERTIFICATE MARGIN
                  -------------------------
CLASS                 (1)           (2)
---------------   -----------   -----------
<S>               <C>           <C>
  A-1 .........       0.310%        0.620%
  A-2 .........       0.340%        0.680%
  A-3 .........       0.870%        0.870%
  M-1 .........       0.650%        0.975%
  M-2 .........       1.050%        1.550%
  B ...........       2.250%        2.750%
  R ...........       0.310%        0.310%
</TABLE>

----------
(1)   Prior to the optional termination date.

(2)   On or after the optional termination date.

     The amount of interest payable on each distribution date in respect of
each class of offered certificates will equal the sum of (1) Current Interest
for such class on such date and (2) any Carryforward Interest for such class
and date. Interest will accrue on each class of offered certificates, other
than the Class A-IO Certificates, on the basis of a 360-day year and the actual
number of days elapsed in each Accrual Period. Interest will accrue on the
Class A-IO Certificates on the basis of a 360-day year and twelve 30-day
months.

     With respect to each distribution date, to the extent that a Basis Risk
Shortfall exists for any class of offered certificates, such class will be
entitled to the amount of such Basis Risk Shortfall in accordance with the
priority of payments described herein under "--Credit Enhancement--
Overcollateralization." Such class will be entitled to receive the amount of any
Basis Risk Shortfall from Monthly Excess Cashflow treated as paid from and to
the extent of funds on deposit in a reserve fund (the "Basis Risk Reserve
Fund"). The source of funds on deposit in the Basis Risk Reserve Fund will be
limited to an initial deposit of $5,000 and amounts that would otherwise be paid
on the Class X Certificates.

     On each distribution date, the Interest Remittance Amount for such date
will be paid in the following order of priority:

   (1)   to the Trustee, the Trustee fee for such distribution date;

   (2)   to the Senior Certificates, pro rata, Current Interest and any
         Carryforward Interest for each such class and such distribution date;

   (3)   to the Class M-1 Certificates, Current Interest and any Carryforward
         Interest for such class and such distribution date;

   (4)   to the Class M-2 Certificates, Current Interest and any Carryforward
         Interest for such class and such distribution date;

   (5)   to the Class B Certificates, Current Interest and any Carryforward
         Interest for such class and such distribution date; and

   (6)   for application as part of Monthly Excess Cashflow for such
         distribution date, as described under "--Credit Enhancement--
         Overcollateralization" below, any such Interest Remittance Amount
         remaining after application pursuant to clauses (1) through (5) above
         (such amount, "Monthly Excess Interest" for such distribution date.


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 Accrual
Period. Telerate Page 3750 means the display designated as page 3750 on the
Bridge Telerate, or any other


                                      S-36
<PAGE>

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 after consultation with
Calmco, the rate will be the reference bank rate. The reference bank rate will
be determined on the basis of the rates at which deposits in U.S. Dollars are
offered by the reference banks, which shall be three major banks that are
engaged in transactions in the London interbank market, selected by the trustee
after consultation with Calmco, 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
offered 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 after consultation
with Calmco, as of 11:00 A.M., New York City time, on such date for 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 offered
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.


DISTRIBUTIONS OF PRINCIPAL

     Distributions of principal on the Class A-1, Class A-2, Class A-3 and
Class R Certificates will be made primarily from the Principal Payment Amount,
to the extent of available funds, as described below. Distributions of
principal on the Class M-1, Class M-2 and Class B Certificates will be made
primarily from the Principal Payment Amount after distributions of principal
have been made on the Senior Certificates.

     The Principal Payment Amount will be paid on each distribution date as
follows:

   I.  On each distribution date (a) prior to the Stepdown Date or (b) with
       respect to which a Trigger Event has occurred, the Principal Payment
       Amount will be paid in the following order of priority:

     (i)   sequentially, first to the Class R Certificates, until the Class
           Principal Balance thereof is reduced to zero and then to the Class
           A-1, Class A-2 and Class A-3 Certificates, pro rata, until the Class
           Principal Balance of each such Class has been reduced to zero;

     (ii)  to the Class M-1 Certificates, until the Class Principal Balance of
           such Class has been reduced to zero;

     (iii) to the Class M-2 Certificates, until the Class Principal Balance of
           such Class has been reduced to zero;

     (iv)  to the Class B Certificates, until the Class Principal Balance of
           such Class has been reduced to zero; and

     (v)   for application as part of Monthly Excess Cashflow for such
           distribution date, as described under "--Credit
           Enhancement--Overcollateralization" below, any such Principal
           Payment Amount remaining after application pursuant to clauses (i)
           through (iv) above.

   II. On each distribution date (a) on or after the Stepdown Date and (b)
       with respect to which a Trigger Event has not occurred, the Principal
       Payment Amount for such date will be paid in the following order of
       priority:

     (i)   to the Class A-1, Class A-2 and Class A-3 Certificates, the Senior
           Principal Payment Amount for such distribution date, pro rata, until
           the Class Principal Balance of each such Class has been reduced to
           zero;


                                      S-37
<PAGE>

     (ii)  to the Class M-1 Certificates, the M-1 Principal Payment Amount for
           such distribution date, until the Class Principal Balance of such
           Class has been reduced to zero;

     (iii) to the Class M-2 Certificates, the M-2 Principal Payment Amount for
           such distribution date, until the Class Principal Balance of such
           Class has been reduced to zero;

     (iv)  to the Class B Certificates, the B Principal Payment Amount for
           such distribution date, until the Class Principal Balance of such
           Class has been reduced to zero; and

     (v)   for application as part of Monthly Excess Cashflow for such
           distribution date, as described under "--Credit
           Enhancement--Overcollateralization" below, any such Principal
           Payment Amount remaining after application pursuant to clauses (i)
           through (iv) above.


CREDIT ENHANCEMENT

     Credit enhancement for the offered certificates consists of the
subordination of the subordinate certificates, the priority of application of
Realized Losses and overcollateralization, in each case as described herein.

     SUBORDINATION. The rights of holders of the subordinate certificates to
receive payments with respect to the mortgage loans will be subordinated to
such rights of holders of each class of offered certificates having a higher
priority of payment, as described under "--Distributions of Interest" and
"--Distributions of Principal." This subordination is intended to enhance the
likelihood of regular receipt by holders of offered certificates having a
higher priority of payment of the full amount of interest and principal
distributable thereon, and to afford such certificateholders limited protection
against Realized Losses incurred with respect to the mortgage loans.

     The limited protection afforded to holders of classes of certificates with
a higher priority of payment by means of the subordination of certain classes
of certificates having a lower priority of payment will be accomplished by the
preferential right of holders of such classes of certificates with a higher
priority of payment to receive distributions of interest and principal on any
distribution date prior to classes with a lower priority of payment.

     APPLICATION OF REALIZED LOSSES. If a mortgage loan becomes a Liquidated
Mortgage Loan, the related Net Liquidation Proceeds, to the extent allocable to
principal, may be less than the outstanding principal balance of such mortgage
loan. The amount of such insufficiency is a "Realized Loss." Realized Losses on
mortgage loans will have the effect of reducing amounts payable in respect of
the Class X Certificates (both through the application of Monthly Excess
Interest to fund such deficiency and through a reduction in the
Overcollateralization Amount for the related distribution date). A "Liquidated
Mortgage Loan" is, in general, a defaulted mortgage loan as to which the
applicable Servicer has determined that all amounts that it expects to recover
in respect of such mortgage loan have been recovered (exclusive of any
possibility of a deficiency judgment).

     If on any distribution date, after giving effect to all Realized Losses
incurred with respect to mortgage loans during the Collection Period for such
distribution date and payments of principal on such distribution date, the
aggregate Class Principal Balance of the Certificates exceeds the Aggregate
Loan Balance for such distribution date (such excess, an "Applied Loss
Amount"), such amount will be allocated in reduction of the Class Principal
Balance of first, the Class B Certificates, until the Class Principal Balance
thereof has been reduced to zero; second, the Class M-2 Certificates, until the
Class Principal Balance thereof has been reduced to zero; and third, the Class
M-1 Certificates, until the Class Principal Balance thereof has been reduced to
zero. The Class Principal Balance of the Class A-1, Class A-2 and Class A-3
Certificates will not be reduced by allocation of Applied Loss Amounts.

     Holders of subordinate certificates will not receive any payments in
respect of Applied Loss Amounts, except to the extent of available Monthly
Excess Cashflow as described below.

     OVERCOLLATERALIZATION. The weighted average net mortgage rates of the
mortgage loans is generally expected to be higher than the weighted average of
the pass-through rates of the Certificates, thus generating certain excess
interest collections. Monthly Excess Interest will be available on each


                                      S-38
<PAGE>

distribution date, except for the first distribution date, in reduction of the
aggregate Class Principal Balance of the Certificates. Such application of
interest collections as payments of principal will cause the aggregate Class
Principal Balance of the Certificates to amortize more rapidly than the
Aggregate Loan Balance, thus creating and maintaining overcollateralization.
However, Realized Losses will reduce overcollateralization, and could result in
an Overcollateralization Deficiency.

     In addition, on and after the Stepdown Date, to the extent that a Trigger
Event has not occurred and the Overcollateralization Amount exceeds the
Targeted Overcollateralization Amount, a portion of the Principal Remittance
Amount will not be applied in reduction of the aggregate Class Principal
Balance of the Certificates, but will instead, be applied as described below.

     On each distribution date, the Monthly Excess Cashflow will be distributed
in the following order of priority:

   (1)   (A) except for the first distribution date, until the aggregate Class
         Principal Balance of the offered certificates, other than the Class
         A-IO Certificates, equals the Aggregate Loan Balance for such
         distribution date minus the Targeted Overcollateralization Amount for
         such date, on each distribution date (a) prior to the Stepdown Date or
         (b) with respect to which a Trigger Event has occurred, to the extent
         of Monthly Excess Interest for such distribution date, to the offered
         certificates, in the following order of priority:

         (a)   sequentially, first to the Class R and then to the Class A-1,
               Class A-2 and Class A-3 Certificates, pro rata, until the Class
               Principal Balance of each such Class has been reduced to zero;

         (b)   to the Class M-1 Certificates, until the Class Principal Balance
               of such Class has been reduced to zero;

         (c)   to the Class M-2 Certificates, until the Class Principal Balance
               of such Class has been reduced to zero; and

         (d)   to the Class B Certificates, until the Class Principal Balance of
               such Class has been reduced to zero;

         (B) on each distribution date on or after the Stepdown Date and with
         respect to which a Trigger Event has not occurred, to fund any
         principal distributions required to be made on such distribution date
         set forth above in subclause II under "--Distributions of Principal",
         after giving effect to the distribution of the Principal Payment Amount
         for such date, in accordance with the priorities set forth therein.

   (2)   to the Class M-1 Certificates, any Deferred Amount for such class;

   (3)   to the Class M-2 Certificates, any Deferred Amount for such class;

   (4)   to the Class B Certificates, any Deferred Amount for such class;

   (5)   to each of the Class A-1, Class A-2 and Class A-3 Certificates, pro
         rata, any applicable Basis Risk Shortfall for each such class;

   (6)   to the Class M-1 Certificates, any applicable Basis Risk Shortfall
         for such class;

   (7)   to the Class M-2 Certificates, any applicable Basis Risk Shortfall
         for such class;

   (8)   to the Class B Certificates, any applicable Basis Risk Shortfall for
         such class;

   (9)   to the Basis Risk Reserve Fund, any amounts required pursuant to the
         pooling and servicing agreement to be deposited therein;

   (10)  to the Class X Certificates, the amount distributable thereon
         pursuant to the pooling and servicing agreement; and

   (11)  to the Class R Certificate, any remaining amount.


                                      S-39
<PAGE>

FINAL SCHEDULED DISTRIBUTION DATE


     The Final Scheduled Distribution Date for the offered certificates is the
distribution date in August 2030 which is the distribution date one month after
the latest maturing mortgage loan. As to each Class, the actual final
distribution date may be earlier or later, and could be substantially earlier,
than such Class's Final Scheduled Distribution Date.


OPTIONAL TERMINATION


     On any distribution date on or after which the Aggregate Loan Balance is
less than or equal to 10% of the Aggregate Loan Balance as of the cut-off date,
Calmco will (subject to the terms of the pooling and servicing agreement) have
the option to purchase the mortgage loans, any REO Property and any other
related property remaining in the Trust Fund for a price equal to the sum of
(i) 100% of the aggregate outstanding principal balance of the mortgage loans
plus accrued interest thereon at the applicable Mortgage Rate to the date of
purchase, (ii) the fair market value of all other property of the Trust Fund,
and (iii) any unreimbursed Advances and Servicing Fees and other amounts
payable to the servicers and the Trustee. If such option is exercised, the
Trust Fund will be terminated effecting an early retirement of the
certificates. 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.


THE TRUSTEE


     Wells Fargo Bank Minnesota, N.A. will be the trustee under the pooling and
servicing agreement. The depositor, the servicers 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 for certificate transfer purposes at Wells Fargo
Center, Sixth Street and Marquette Avenue, Minneapolis, Minnesota 55479-0113,
Attention: Corporate Trust Services--DLJ ABS Series 2000-3 or at other
addresses as the trustee may designate from time to time.


     The Trustee may make available each month, to any interested party, the
monthly statement to certificateholders via the trustee's website and its
fax-on-demand service. The trustee's website will initially be located at
www.ctslink.com. The trustee's fax-on-demand service may be accessed by calling
(301) 815-6610.


RESTRICTIONS ON TRANSFER OF THE CLASS R CERTIFICATES


     The Class R 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 R
Certificates, in addition to other classes of certificates, may not be acquired
by a Plan or with assets of such a Plan unless certain conditions are met. See
"ERISA Considerations" in this prospectus supplement. Each Class R Certificate
will contain a legend describing the foregoing restrictions.


                                      S-40
<PAGE>

                 YIELD, PREPAYMENT AND MATURITY CONSIDERATIONS

GENERAL

     The yields to maturity (or to early termination) on the offered
certificates will be affected by the rate of principal payments (including
prepayments, which may include amounts received by virtue of purchase,
condemnation, insurance or foreclosure) on the mortgage loans. Such yields will
also be affected by the extent to which mortgage loans bearing higher mortgage
rates prepay at a more rapid rate than mortgage loans with lower mortgage
rates, the amount and timing of mortgagor delinquencies and defaults resulting
in Realized Losses, the application of Monthly Excess Cashflow, the purchase
price for the offered certificates and other factors.

     Principal prepayments may be influenced by a variety of economic,
geographic, demographic, social, tax, legal and other factors. In general, if
prevailing interest rates fall below the interest rates on the mortgage loans,
the mortgage loans are likely to be subject to higher prepayments than if
prevailing rates remain at or above the interest rates on the mortgage loans.
Conversely, if prevailing interest rates rise above the interest rates on the
mortgage loans, the rate of prepayment would be expected to decrease. Other
factors affecting prepayment of the mortgage loans include such factors as
changes in mortgagors' housing needs, job transfers, unemployment, mortgagors'
equity in the mortgaged properties, changes in the value of the mortgaged
properties, mortgage market interest rates and servicing decisions. The
mortgage loans generally have due-on-sale clauses. The enforcement of a
due-on-sale clause will generally have the same effect as a prepayment on a
mortgage loan.

     Approximately 50.70% of the mortgage loans by principal balance as of
September 1, 2000, are subject to prepayment premiums during intervals ranging
from one to five years following origination, as described under "The Mortgage
Pool-- General" herein. Such prepayment premiums may have the effect of
reducing the amount or the likelihood of prepayment of such mortgage loans
during such intervals.

     The rate of principal payments on the mortgage loans will also be affected
by the amortization schedules of the mortgage loans, the rate and timing of
prepayments thereon by the mortgagors, liquidations of defaulted mortgage
loans, repurchases of mortgage loans due to certain breaches of representations
and warranties or defective documentation. The timing of changes in the rate of
prepayments, liquidations and purchases of the related mortgage loans may, and
the timing of Realized Losses, will significantly affect the yield to an
investor, even if the average rate of principal payments experienced over time
is consistent with an investor's expectation. Because the rate and timing of
principal payments on the mortgage loans will depend on future events and on a
variety of factors, no assurance can be given as to such rate or the timing of
principal payments on the offered certificates. In general, the earlier a
prepayment of principal of the related mortgage loans, the greater the effect
on an investor's yield. The effect on an investor's yield of principal payments
occurring at a rate higher (or lower) than the rate anticipated by the investor
during the period immediately following the issuance of the certificates may
not be offset by a subsequent like decrease (or increase) in the rate of
principal payments.

     From time to time, areas of the United States may be affected by flooding,
severe storms, landslides, wildfires or other natural disasters. Under the
pooling and servicing agreement, the related seller will represent and warrant
that as of the closing date, each mortgaged property was free of material
damage. In the event of an uncured breach of such representation and warranty
that materially and adversely affects the interests of the certificateholders,
the related seller will be required to repurchase the affected mortgage loan or
substitute another mortgage loan therefor. If any damage caused by flooding,
storms, wildfires, or landslides (or other cause) occurs after the closing
date, the related seller will not have any such obligation. In addition, the
standard hazard policies covering the mortgaged properties generally do not
cover damage caused by flooding and landslides, and flood or landslide
insurance may not have been obtained with respect to such mortgaged properties.
As a consequence, Realized Losses could result. To the extent that the
insurance proceeds received with respect to any damaged mortgage properties are
not applied to the restoration thereof, such proceeds will be used to prepay
the related mortgage loans in whole or in part. Any repurchases or repayments
of the mortgage loans may reduce the weighted average lives of the offered
certificates and will reduce the yields on such certificates to the extent they
are purchased at a premium.


                                      S-41
<PAGE>

     Prepayments, liquidations and purchases of the mortgage loans will result
in payments to holders of the related certificates of principal amounts that
would otherwise be paid over the remaining terms of such mortgage loans. The
rate of defaults on the mortgage loans will also affect the rate and timing of
principal payments on the mortgage loans. In general, defaults on the mortgage
loans are expected to occur with greater frequency in their early years.

     The yields to investors in the offered certificates will be affected by
the exercise by Calmco of its right to purchase the mortgage loans, as
described under "Description of the Certificates--Optional Termination" herein,
or its failure to exercise such right.

     If the purchaser of a certificate offered at a discount from its initial
principal amount calculates its anticipated yield to maturity (or early
termination) based on an assumed rate of payment of principal that is faster
than that actually experienced on the related mortgage loans, the actual yield
may be lower than that so calculated. Conversely, if the purchaser of a
certificate offered at a premium calculates its anticipated yield based on an
assumed rate of payment of principal that is slower than that actually
experienced on the related mortgage loans, the actual yield may be lower than
that so calculated.

     The pass-through rates applicable to the offered certificates, other than
the Class A-IO Certificates, will be affected by the level of one-month LIBOR
from time to time, and by the mortgage rates of the mortgage loans from time to
time as described under "Risk Factors--Mortgage Loan Rates May Limit
Pass-Through Rates on the Certificates."


PRINCIPAL PREPAYMENTS AND COMPENSATING INTEREST

     When a mortgagor prepays a mortgage loan in full between Due Dates, the
mortgagor pays interest on the amount prepaid only to the date of prepayment
instead of for the entire month. Also, when a prepayment in part is made on a
mortgage loan together with the Scheduled Payment for a month on or after the
related Due Date, the principal balance of the mortgage loan is reduced by the
amount of the prepayment in part as of that Due Date, but the principal is not
paid to the certificateholders until the distribution date in the next month;
therefore, one month of interest shortfall accrues on the amount of such
principal prepayment in part.

     To reduce the adverse effect on certificateholders from the deficiency in
interest payable as a result of a prepayment in full on a mortgage loan between
its Due Dates, each servicer will pay Compensating Interest to the limited
extent and in the manner described under "Servicing of Mortgage Loans--
Adjustment to Servicing Fee in Connection with Prepaid Mortgage Loans."

     To the extent that the amount allocated to pay Compensating Interest is
insufficient to cover the deficiency in interest payable as a result of the
timing of a principal prepayment in full, or to the extent that there is an
interest deficiency from a prepayment in part on a mortgage loan, such
remaining deficiency will be covered by excess interest collections. If excess
interest collections are insufficient, each class of certificates will be
allocated such shortfall, to the extent of interest due, beginning with the
most subordinate class of certificates then outstanding.


OVERCOLLATERALIZATION

     The yields of the offered certificates, other than the Class A-IO
Certificates, will be affected by the application of Monthly Excess Cashflow as
described herein and by the amount of overcollateralization. The amount of
Monthly Excess Cashflow will be affected by the delinquency, default and
prepayment experience of the mortgage loans. There can be no assurance as to
the rate at which overcollateralization will be created, or whether such
overcollateralization will be maintained at the levels described herein.


SUBORDINATION

     The senior certificates are senior to the subordinate certificates, the
Class M-1 Certificates are senior to the Class M-2, Class B and Class X
Certificates, the Class M-2 Certificates are senior to the Class B and Class X
Certificates and the Class B Certificates are senior to the Class X
Certificates. As a result, a class of certificates with a higher payment
priority will have a preferential right to receive amounts in respect


                                      S-42
<PAGE>

of interest and principal (other than the Class A-IO Certificates, which do not
receive principal) on any distribution date prior to any class with a lower
payment priority. In addition, Applied Loss Amounts will be allocated among the
Class M-1, Class M-2 and Class B Certificates in reverse order of priority of
payment. As a result, the yields of the subordinate certificates will be more
sensitive, in varying degrees, to delinquencies and losses on the mortgage
loans than the yields of the senior certificates and classes of subordinate
certificates which have a relatively higher priority of payment.


THE PASS-THROUGH RATES

     The pass-through rate for each class of offered certificates, other than
the Class A-IO Certificates, is subject to the Net Funds Cap. The Net Funds Cap
on any distribution date is determined, in part, by reference to the weighted
average net mortgage rate of the mortgage loans. If mortgage loans bearing
higher mortgage rates were to prepay at rates faster than mortgage loans with
lower mortgage rates, the Net Funds Cap would be lower than otherwise would be
the case. Thus, the effective pass-through rates on the offered certificates
will be dependent on the prepayment experience on the mortgage loans.

     Although the holders of the offered certificates, other than the Class
A-IO Certificates, will be entitled to receive the related Basis Risk Shortfall
to the extent funds are available for that purpose as described and in the
priority set forth in this prospectus supplement, there is no assurance that
sufficient funds will be available. The ratings on the offered certificates do
not address the likelihood of payment of any Basis Risk Shortfall.


WEIGHTED AVERAGE LIFE

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

     Prepayments of mortgage loans commonly are measured relative to a
prepayment standard or model. The two prepayment models used in this prospectus
supplement represent an assumed rate of prepayment each month relative to the
then outstanding principal balance of a pool of mortgage loans. For the
adjustable rate mortgage loans, a 100% prepayment assumption assumes prepayment
rates of 6% per annum of the then outstanding principal balance of such
mortgage loans in the first month of the life of the mortgage loans and
increasing by 22/17% per annum in each month thereafter until the eighteenth
month. Beginning in the eighteenth month and in each month thereafter during
the life of the mortgage loan, 100% of the prepayment assumption assumes a
constant prepayment rate of 28% per annum. For the fixed rate mortgage loans, a
100% prepayment assumption assumes prepayment rates of 4% per annum of the then
outstanding principal balance of such mortgage loans in the first month of the
life of the mortgage loans and increasing by 16/11% per annum in each month
thereafter until the twelfth month. Beginning in the twelfth month and in each
month thereafter during the life of the mortgage loan, 100% of the prepayment
assumption assumes a constant prepayment rate of 20% per annum. The prepayment
assumption does not purport to be a historical description of prepayment
experience or a prediction of the anticipated rate of prepayment of any pool of
mortgage loans, including the mortgage loans.

     The tables on pages S-47 and S-48 were prepared based on the following
assumptions among other things (collectively, the "Modeling Assumptions"):

    o the initial Class Principal Balances of the offered certificates are as
      set forth on page S-3 of this prospectus supplement and the pass-through
      rates of each class of offered certificates are as described herein;

    o with respect to each mortgage loan, each Scheduled Payment of principal
      and interest is timely received on the first day of each month commencing
      in October 2000;

    o principal prepayments are received in full on the last day of each month
      commencing in September 2000 and there are no Interest Shortfalls;


                                      S-43
<PAGE>

    o there are no defaults or delinquencies on the mortgage loans;


    o distribution dates occur on the 25th day of each month, commencing in
      October 2000;


    o there are no purchases or substitutions of the mortgage loans;


    o the mortgage rate of each adjustable-rate mortgage loan is adjusted on
      the next applicable adjustment date to equal the value of the Index set
      forth below plus the related gross margin, subject to any initial rate cap
      or periodic rate cap;


    o the mortgage rates of the adjustable-rate mortgage loans adjust either
      semi-annually based on Six-Month LIBOR or annually based on the One-Year
      CMT Index as described at "The Mortgage Pool--The Indices";


    o the value of Six-Month LIBOR is 6.75%, the value of One-Year CMT is
      6.08% and the value of one-month LIBOR is 6.62%;


    o the certificates are issued on September 28, 2000;


    o no prepayment premiums have been collected on the mortgage loans;


    o the rate at which the trustee fee is calculated is 0.003% per annum on
      the aggregate outstanding class principal balance of the certificates; and


    o the mortgage loans were aggregated into assumed mortgage loans having
      the following characteristics:


                                      S-44
<PAGE>

                     ASSUMED MORTGAGE LOAN CHARACTERISTICS






<TABLE>
<CAPTION>
                      GROSS        NET        ORIGINAL       REMAINING    REMAINING
     CURRENT         COUPON       COUPON    AMORTIZATION   AMORTIZATION    BALLOON
   BALANCE ($)         (%)         (%)          TERM           TERM          TERM     MARGIN (%)
----------------- ------------ ----------- -------------- -------------- ----------- ------------
<S>               <C>          <C>         <C>            <C>            <C>         <C>
      256,739.17      10.1704      9.6704  360            356                 --         5.0161
   21,563,614.79      10.4252      9.9252  359            356                 --         5.8791
   23,733,413.52      10.4700      9.9700  358            353                 --         6.0243
    7,179,144.74       9.9660      9.4660  360            347                 --         6.0993
      155,801.62      10.0440      9.5440  180            176                 --         5.6789
   15,981,786.76      10.7359     10.2359  360            356                 --         6.1546
   17,834,730.90      11.2391     10.7391  358            353                 --         6.0964
    1,263,828.11       9.9977      9.4977  359            349                 --         5.8857
      274,371.56      11.0442     10.5442  180            175                 --         5.5433
    2,552,099.86       9.1995      8.6995  357            352                 --         5.3666
    1,504,602.16       9.6429      9.1429  347            341                 --         5.7626
   26,146,938.50      10.3242      9.7632  360            356                 --            --
   50,988,161.99      10.4001      9.8034  359            353                 --            --
    2,563,269.38      11.7409     11.2293  184            177                 --            --
   32,600,472.24      10.1383      9.3893  358            354                176            --



<CAPTION>
                              RATE      MONTHS
   MAXIMUM      MINIMUM      CHANGE    TO RATE   PERIODIC    INITIAL
   RATE (%)     RATE (%)    FREQUENCY   CHANGE   RATE CAP   RATE CAP       INDEX
------------ ------------ ----------- --------- ---------- ---------- --------------
  <S>          <C>            <C>        <C>     <C>        <C>       <C>
   16.1704      10.1704        12          8      2.0000     2.0000      1 Year CMT
   16.8717      10.3593         6         20      1.1577     2.7798    6 Month LIBOR
   16.5603       9.8182         6         18      1.0315     3.2130    6 Month LIBOR
   16.0827       9.7708         6         12      1.0332     2.8335    6 Month LIBOR
   16.0440      10.0440         6         20      1.0000     3.0000    6 Month LIBOR
   17.2579      10.7360         6         32      1.2518     2.9628    6 Month LIBOR
   17.3855      11.2320         6         30      1.0750     2.9800    6 Month LIBOR
   16.0898       9.9977         6         26      1.0000     2.9112    6 Month LIBOR
   17.0442      11.0442         6         31      1.0000     3.0000    6 Month LIBOR
   15.1995       5.3666         6         55      1.0000     5.0000    6 Month LIBOR
   15.6897       9.5460         6          1      1.0718     1.3420    6 Month LIBOR
       --           --         --         --         --         --           --
       --           --         --         --         --         --           --
       --           --         --         --         --         --           --
       --           --         --         --         --         --           --
</TABLE>



                                      S-45
<PAGE>

     The actual characteristics and the performance of the mortgage loans will
differ from the assumptions used in constructing the tables set forth below,
which are hypothetical in nature and are provided only to give a general sense
of how the principal cash flows might behave under varying prepayment
scenarios. For example, it is not expected that the mortgage loans will prepay
at a constant rate until maturity, that all of the mortgage loans will prepay
at the same rate or that there will be no defaults or delinquencies on the
mortgage loans. Moreover, the diverse remaining terms to maturity of the
mortgage loans could produce slower or faster principal payments than indicated
in the tables at the various percentages of the prepayment assumption
specified, even if the weighted average remaining term to maturity of the
mortgage loans is as assumed. Any difference between such assumptions and the
actual characteristics and performance of the mortgage loans, or actual
prepayment or loss experience, will cause the percentages of initial Class
Principal Balances outstanding over time and the weighted average lives of the
offered certificates, other than the Class A-IO Certificates, to differ (which
difference could be material) from the corresponding information in the tables
for each indicated percentage of the prepayment assumption.


     Subject to the foregoing discussion and assumptions, the following tables
indicate the weighted average lives of the offered certificates, other than the
Class A-IO Certificates, and set forth the percentages of the initial Class
Principal Balances of the offered certificates, other than the Class A-IO
Certificates, that would be outstanding after each of the distribution dates
shown at various percentages of the prepayment assumption.


     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.


                                      S-46
<PAGE>

            PERCENT OF INITIAL CLASS PRINCIPAL BALANCES OUTSTANDING




<TABLE>
<CAPTION>
                              CLASS A-1, CLASS A-2 AND CLASS A-3                        CLASS M-1
                                    PREPAYMENT ASSUMPTION                         PREPAYMENT ASSUMPTION
                         -------------------------------------------- ---------------------------------------------
                            50%      75%     100%     125%     150%      50%       75%     100%     125%     150%
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 .........     86       81       75       70       64       100      100      100      100      100
September 2002 .........     73       62       52       42       33       100      100      100      100      100
September 2003 .........     61       47       34       23       14       100      100      100      100      100
September 2004 .........     51       36       27       20       14       100       94       72       54       47
September 2005 .........     42       29       21       14       10       100       77       55       38       26
September 2006 .........     35       24       16       10        6*       93       63       42       27       17*
September 2007 .........     31       20       12        7*       4*       82       52       32       19*      11*
September 2008 .........     27       16        9        5*       3*       72       43       25       14*       8*
September 2009 .........     24       13        7*       4*       2*       62       35       19*      10*       5*
September 2010 .........     21       11        5*       3*       1*       54       29       14*       7*       1*
September 2011 .........     18        9        4*       2*       1*       47       23       11*       5*       0
September 2012 .........     16        7*       3*       1*       0        41       19*       9*       2*       0
September 2013 .........     14        6*       2*       1*       0        36       16*       7*       0        0
September 2014 .........     12        5*       2*       1*       0        31       13*       5*       0        0
September 2015 .........      8        3*       1*       0        0        21        8*       0        0        0
September 2016 .........      7*       2*       1*       0        0        18*       6*       0        0        0
September 2017 .........      6*       2*       0        0        0        16*       5*       0        0        0
September 2018 .........      5*       2*       0        0        0        13*       3*       0        0        0
September 2019 .........      4*       1*       0        0        0        11*       1*       0        0        0
September 2020 .........      4*       1*       0        0        0         9*       0        0        0        0
September 2021 .........      3*       1*       0        0        0         8*       0        0        0        0
September 2022 .........      2*       0        0        0        0         6*       0        0        0        0
September 2023 .........      2*       0        0        0        0         5*       0        0        0        0
September 2024 .........      2*       0        0        0        0         3*       0        0        0        0
September 2025 .........      1*       0        0        0        0         1*       0        0        0        0
September 2026 .........      1*       0        0        0        0         0        0        0        0        0
September 2027 .........      0        0        0        0        0         0        0        0        0        0
Weighted Average
 Life to Maturity
 (in years)** ..........    6.1      4.3      3.3      2.6      2.1      11.9      8.4      6.4      5.3      4.7
Weighted Average
 Life to Call (in
 years)** ..............    5.7      4.0      3.0      2.4      1.9      10.9      7.8      5.8      4.8      4.3
</TABLE>

----------
*     Indicates a number that would be equal to zero assuming the optional
      purchase of the mortgage loans described herein is exercised by Calmco.

**    Determined as specified under "--Weighted Average Life" herein.


                                      S-47
<PAGE>

            PERCENT OF INITIAL CLASS PRINCIPAL BALANCES OUTSTANDING




<TABLE>
<CAPTION>
                                           CLASS M-2                                      CLASS B
                                     PREPAYMENT ASSUMPTION                         PREPAYMENT ASSUMPTION
                         --------------------------------------------- ---------------------------------------------
                            50%       75%     100%     125%     150%      50%       75%     100%     125%     150%
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 .........     100      100      100      100      100       100      100      100      100      100
September 2002 .........     100      100      100      100      100       100      100      100      100      100
September 2003 .........     100      100      100      100      100       100      100      100      100      100
September 2004 .........     100       94       72       54       39       100       94       72       54       39
September 2005 .........     100       77       55       38       26       100       77       55       38       26
September 2006 .........      93       63       42       27       17*       93       63       42       27       14*
September 2007 .........      82       52       32       19*      11*       82       52       32       17*       4*
September 2008 .........      72       43       25       14*       6*       72       43       25        8*       0
September 2009 .........      62       35       19*      10*       0        62       35       17*       2*       0
September 2010 .........      54       29       14*       5*       0        54       29        9*       0        0
September 2011 .........      47       23       11*       0        0        47       23        4*       0        0
September 2012 .........      41       19*       8*       0        0        41       17*       0        0        0
September 2013 .........      36       16*       3*       0        0        36       11*       0        0        0
September 2014 .........      31       13*       0        0        0        31        6*       0        0        0
September 2015 .........      21        7*       0        0        0        21        0        0        0        0
September 2016 .........      18*       3*       0        0        0        16*       0        0        0        0
September 2017 .........      16*       0        0        0        0        11*       0        0        0        0
September 2018 .........      13*       0        0        0        0         7*       0        0        0        0
September 2019 .........      11*       0        0        0        0         4*       0        0        0        0
September 2020 .........       9*       0        0        0        0         1*       0        0        0        0
September 2021 .........       6*       0        0        0        0         0        0        0        0        0
September 2022 .........       3*       0        0        0        0         0        0        0        0        0
September 2023 .........       0        0        0        0        0         0        0        0        0        0
September 2024 .........       0        0        0        0        0         0        0        0        0        0
September 2025 .........       0        0        0        0        0         0        0        0        0        0
September 2026 .........       0        0        0        0        0         0        0        0        0        0
September 2027 .........       0        0        0        0        0         0        0        0        0        0
Weighted Average
 Life to Maturity
 (in years)** ..........    11.7      8.3      6.3      5.1      4.4      11.3      8.0      6.0      4.9      4.2
Weighted Average
 Life to Call (in
 years)** ..............    10.9      7.8      5.8      4.7      4.1      10.9      7.7      5.8      4.7      4.0
</TABLE>

----------
*     Indicates a number that would be equal to zero assuming the optional
      purchase of the mortgage loans described herein is exercised by Calmco.

**    Determined as specified under "--Weighted Average Life" herein.


SENSITIVITY OF THE CLASS A-IO CERTIFICATES

     AS INDICATED IN THE TABLE BELOW, THE YIELD TO INVESTORS ON THE CLASS A-IO
CERTIFICATES WILL BE SENSITIVE TO THE RATE OF PRINCIPAL PAYMENTS (INCLUDING
PREPAYMENTS) OF THE MORTGAGE LOANS. THE MORTGAGE LOANS GENERALLY CAN BE PREPAID
AT ANY TIME. ON THE BASIS OF THE ASSUMPTIONS DESCRIBED BELOW, THE YIELD TO
MATURITY ON THE CLASS A-IO CERTIFICATES WOULD BE APPROXIMATELY 0% IF
PREPAYMENTS WERE TO OCCUR AT APPROXIMATELY 163% OF THE APPLICABLE PREPAYMENT
ASSUMPTION (ASSUMING OPTIONAL TERMINATION IS NOT EXERCISED). IF THE ACTUAL
PREPAYMENT RATE OF THE MORTGAGE LOANS WERE TO EXCEED THE APPLICABLE LEVEL FOR
AS LITTLE AS ONE MONTH WHILE EQUALING SUCH LEVEL FOR THE REMAINING MONTHS, THE
INVESTORS IN THE CLASS A-IO CERTIFICATES WOULD NOT FULLY RECOUP THEIR INITIAL
INVESTMENTS.


                                      S-48
<PAGE>

     The information set forth in the following table has been prepared on the
basis of the Modeling Assumptions (which assume no Realized Losses), and on the
assumption that the purchase price (expressed as a percentage of initial Class
A-IO Notional Amount) of the Class A-IO Certificates is as follows:




<TABLE>
<CAPTION>
CLASS OF CERTIFICATES         PRICE*
-------------------------   ----------
<S>                         <C>
    Class A-IO ..........       0.80%
</TABLE>

----------
* The price does not include accrued interest. Accrued interest has been added
to such price in calculating the yields set forth in the table below.



           SENSITIVITY OF THE CLASS A-IO CERTIFICATES TO PREPAYMENTS
                                (PRE-TAX YIELDS)




<TABLE>
<CAPTION>
                                                                      PREPAYMENT ASSUMPTION
                                               --------------------------------------------------------------------
CLASS A-IO                                         50%           75%           100%          125%          150%
--------------------------------------------   -----------   -----------   -----------   -----------   ------------
<S>                                            <C>           <C>           <C>           <C>           <C>
Optional Termination Not Exercised .........       32.44%        25.60%        18.59%        11.39%         3.99%
Optional Termination Exercised .............       32.39%        25.35%        17.59%         8.97%        (0.39)%
</TABLE>

     It is highly unlikely that all of the mortgage loans will have the
characteristics assumed or that the mortgage loans 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 yields on the Class
A-IO Certificates are 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 A-IO Certificates or as to the yield on the Class A-IO
Certificates. Investors must make their own decisions as to the appropriate
prepayment assumptions to be used in deciding whether to purchase the Class
A-IO Certificates.


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.


                                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

     Brown & Wood LLP, 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 offered certificates.

     Assuming compliance with all provisions of the pooling and servicing
agreement, for federal income tax purposes, the trust will be treated as two
separate REMICs. The assets of the lower tier REMIC will consist of the
mortgage loans (other than the right to prepayment penalties) and all other
property in the trust (other than the Basis Risk Reserve Fund) and the lower
tier REMIC will issue several classes of


                                      S-49
<PAGE>

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 R Certificates will represent the
beneficial ownership of the residual interest in each REMIC.

     Each class of offered certificates and the Class X Certificates will
represent beneficial ownership of regular interests issued by the upper tier
REMIC. In addition, each class of offered certificates, other than Class A-IO
Certificate, will represent a beneficial interest in the right to receive
payments from the Basis Risk Reserve Fund to the extent that it is entitled to
accruals of interest in excess of the weighted average of the net mortgage
rates of the mortgage loans.

     In addition, for federal income tax purposes, the Basis Risk Reserve Fund
is an "outside reserve fund" that is beneficially owned by the holders of the
Class X Certificates. The rights of the holders of the offered certificates,
other than Class A-IO Certificates, to receive payments from the Basis Risk
Reserve Fund represent, for federal income tax purposes, contractual rights
that are separate from their regular interests within the meaning of Treasury
regulations Section 1.860G-2(i).


TAXATION OF REGULAR INTERESTS

     The following discussion assumes that the right of the offered
certificates to receive payments from the Basis Risk Reserve Fund will be
treated as an interest rate cap agreement rather than as a partnership for
federal income tax purposes. Prospective investors in the offered certificates
should consult their tax advisors regarding their appropriate tax treatment. A
holder of an offered certificate will be treated for federal income tax
purposes as owning a regular interest in the upper tier REMIC. The offered
certificates, other than Class A-IO Certificates, will also represent
beneficial ownership of an interest in a limited recourse interest rate cap
contract (the "Cap Contract"). A certificateholder of an offered certificate,
other than Class A-IO Certificates, must allocate its purchase price for such
certificate between two components--the REMIC regular interest component and
the Cap Contract component (the value of which should be nominal). For
information reporting purposes, the trustee will assume that, with respect to
any offered certificate, other than Class A-IO Certificates, the Cap Contract
component will have only nominal value relative to the value of the regular
interest component. The IRS could, however, argue that the Cap Contract
component has a greater than de minimus value, and if that argument were to be
sustained, the regular interest component could be viewed as having been issued
with original issue discount ("OID") (which could cause the total amount of
discount to exceed a statutorily defined de minimus amount). See "Certain
Material Federal Income Tax Considerations" in the Prospectus.

     Upon the sale, exchange, or other disposition of an offered certificate,
other than Class A-IO Certificates, the certificateholder must allocate the
amount realized between the two components of the offered certificate based on
the relative fair market values of those components at the time of sale.
Assuming that an offered certificate, other than Class A-IO Certificates, is
held as a "capital asset" within the meaning of section 1221 of the Code, with
respect to the offered certificate gain or loss on the disposition of an
interest in the Cap Contract component should be capital gain or loss, and,
gain or loss on the disposition of the regular interest component should,
subject to the limitation described below, be capital gain or loss. Gain
attributable to the regular interest component of an offered certificate will
be treated as ordinary income, however, to the extent such gain does not exceed
the excess, if any, of (i) the amount that would have been includible in the
certificateholder's gross income with respect to the regular interest component
had income thereon accrued at a rate equal to 10% of the applicable federal
rate as defined in section 1274(d) of the Code determined as of the date of
purchase of such certificate over (ii) the amount actually included in such
certificateholder's income.

     Interest on a regular interest must be included in income by a
certificateholder under the accrual method of accounting, regardless of the
certificateholder's regular method of accounting. In addition, a regular
interest could be considered to have been issued with OID. See "Material
Federal Income Tax Consequences" in the Prospectus. The prepayment assumption
that will be used in determining the accrual of any OID, market discount, or
bond premium, if any, will be a rate equal to 100% of the prepayment
assumption. No representation is made that the mortgage loans will prepay at
such a rate or at any other rate. OID must be included in income as it accrues
on a constant yield method, regardless of whether the certificateholder
receives currently the cash attributable to such OID.


                                      S-50
<PAGE>

THE BASIS RISK RESERVE FUND

     As indicated above, a portion of the purchase price paid by a
certificateholder to acquire an offered certificate, other than Class A-IO
Certificates, will be attributable to the Cap Contract component of such
certificate. The portion of the overall purchase price attributable to the Cap
Contract must be amortized over the life of any such certificate, taking into
account the declining balance of the related regular interest component.
Treasury regulations concerning notional principal contracts provide
alternative methods for amortizing the purchase price of any interest rate cap
contract. Under one method -- the level yield constant interest method -- the
price paid for an interest rate cap is amortized over the life of the cap as
though it were the principal amount of a loan bearing interest at a reasonable
rate. Certificateholders are urged to consult their tax advisors concerning the
methods that can be employed to amortize the portion of the purchase price paid
for the Cap Contract component of an offered certificate, other than Class A-IO
Certificates.

     Any payments made to a holder of an offered certificate, other than Class
A-IO Certificates, from the Basis Risk Reserve Fund will be treated as periodic
payments on an interest rate cap contract. To the extent the sum of such
periodic payments for any year exceed that year's amortized cost of the Cap
Contract component, such excess is ordinary income. If for any year the amount
of that year's amortized cost exceeds the sum of the periodic payments, such
excess is allowable as an ordinary deduction.

     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 holders of any regular certificates are treated as holding those
certificates at a premium, those holders should consult their tax advisors
regarding the election to amortize bond premium and the method to be employed.


STATUS OF THE OFFERED CERTIFICATES

     As is described more fully under "Material Federal Income Tax
Consequences" in the prospectus, the offered certificates, exclusive of any
rights to receive monies from the Basis Risk Reserve Fund, 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, exclusive of any rights to receive monies from the Basis Risk
Reserve Fund, 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, exclusive of any rights to receive monies
from the Basis Risk Reserve Fund, will represent qualifying assets under
Section 860G(a)(3) if acquired by a REMIC within the prescribed time periods of
the Internal Revenue Code.

     The holders of the residual certificates must include the taxable income
of the REMIC in their federal taxable income. The resulting tax liability of
the holders may exceed cash distributions to those holders during various
periods. All or a portion of the taxable income from a residual certificate
recognized by a holder may be treated as "excess inclusion" income, which, with
limited exceptions, is subject to U.S. federal income tax.

     The Small Business Job Protection Act of 1996 has eliminated the special
rule permitting Section 593 institutions, or thrift institutions, to use net
operating losses and other allowable deductions to offset their excess
inclusion income from REMIC residual certificates that have "significant value"
within the meaning of the REMIC regulations, effective for taxable years
beginning after December 31, 1995, except for residual certificates
continuously held by a thrift institution since November 1, 1995.

     In addition, the Small Business Job Protection Act of 1996 provides three
rules for determining the effect on excess inclusions on the alternative
minimum taxable income of a residual holder. First, alternative minimum taxable
income for that residual holder is determined without regard to the special
rule that taxable income cannot be less than excess inclusions. Second, a
residual holder's alternative minimum taxable income for a tax year cannot be
less than the excess inclusions for the year. Third, the


                                      S-51
<PAGE>

amount of any alternative minimum tax net operating loss deductions must be
computed without regard to any excess inclusions. These rules are effective for
tax years beginning after December 31, 1986, unless a residual holder elects to
have those rules apply only to tax years beginning after August 20, 1996.

     Furthermore, the Small Business Job Protection Act of 1996, as part of the
repeal of the bad debt reserve method for thrift institutions, repealed the
application of Section 593(d) of the Internal Revenue Code to any taxable year
beginning after December 31, 1995.

     Also, purchasers of a residual certificate should consider carefully the
tax consequences of an investment in residual certificates discussed in the
prospectus and should consult their own tax advisors for those consequences.
See "Material Federal Income Tax Consequences--Taxation of Owners of REMIC
Residual Certificates" in the prospectus. Specifically, prospective holders of
residual certificates should consult their tax advisors regarding whether, at
the time of acquisition, a residual certificate will be treated as a
"noneconomic" residual interest, a "non-significant value" residual interest
and a "tax avoidance potential" residual interest. See "Material Federal Income
Tax Consequences--Taxation of Owners of REMIC Residual
Certificates--Noneconomic REMIC Residual Certificates," "Material Federal
Income Tax Consequences--Taxation of Owners of REMIC Residual
Certificates--Mark-to-Market Rules," "--Excess Inclusions" and "--Foreign
Investors in REMIC Certificates" in the prospectus. Additionally, for
information regarding prohibited transactions and treatment of Realized Losses,
see "Material Federal Income Tax Consequences--Taxation of Owners of REMIC
Residual Certificates--Prohibited Transactions and Other Possible REMIC Taxes"
and "--Taxation of Owners of REMIC Regular Certificates--Realized Losses" 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 with respect 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 has granted an individual administrative
exemption to the underwriter (the "Exemption") from some of the prohibited
transaction rules of ERISA and the related excise tax provisions of Section
4975 of the Internal Revenue Code for the initial purchase, the holding and the
subsequent resale by plans of certificates in pass-through trusts that consist
of particular


                                      S-52
<PAGE>

receivables, loans and other obligations that meet the conditions and
requirements of the Exemption. Assuming that the general conditions of the
Exemption are met, the Exemption applies to certificates that qualify for the
Exemption and that represent unsubordinated fractional undivided interests in a
trust comprised of mortgage loans like the mortgage loans in the trust.

     For a general description of the Exemption and the conditions that must be
satisfied for the Exemption to apply, see "ERISA Considerations" in the
prospectus.

     It is expected that the Exemption will apply to the acquisition and
holding by plans of the Class A-1, Class A-2, Class A-3 and Class A-IO
Certificates and that all conditions of the Exemption other than those within
the control of the investors will be met. In addition, as of the date hereof,
there is no single mortgagor that is the obligor on five percent of the
mortgage loans included in the trust by aggregate unamortized principal balance
of the assets of the trust.

     Insurance companies contemplating the investment of general account assets
in the certificates should consult with their legal advisors with respect to
the applicability of Section 401(c) of ERISA, as described under "ERISA
Considerations" in the prospectus. The U.S. Department of Labor issued final
regulations under Section 401(c) which were published in the Federal Register
on January 5, 2000, but these final regulations are generally not applicable
until July 5, 2001.

     BECAUSE THE CHARACTERISTICS OF THE CLASS M-1, CLASS M-2, CLASS B AND CLASS
R CERTIFICATES WILL NOT MEET THE REQUIREMENTS OF PTCE 83-1, AS DESCRIBED IN THE
PROSPECTUS, OR THE EXEMPTION, 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 M-1, CLASS M-2, CLASS B AND CLASS R CERTIFICATES WILL NOT BE REGISTERED
BY THE TRUSTEE UNLESS THE TRUSTEE RECEIVES THE FOLLOWING:

   o A REPRESENTATION FROM THE TRANSFEREE OF THE CERTIFICATE, ACCEPTABLE TO
     AND IN FORM AND SUBSTANCE SATISFACTORY TO THE TRUSTEE, TO THE EFFECT THAT
     THE 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 SUCH A PLAN OR ARRANGEMENT
     NOR USING THE ASSETS OF SUCH A PLAN OR ARRANGEMENT TO EFFECT THAT
     TRANSFER;

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

     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-53
<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.


                        LEGAL INVESTMENT CONSIDERATIONS


     The offered certificates, other than the Class M-2 and Class B
Certificates, will constitute "mortgage related securities" for purposes of the
Secondary Mortgage Market Enhancement Act of 1984.


     There may be restrictions on the ability of certain investors, including
depository institutions, either to purchase the offered certificates or to
purchase offered certificates representing more than a specified percentage of
the investor's assets. Investors should consult their own legal advisors in
determining whether and to what extent the offered certificates constitute
legal investments for such investors. See "Legal Investment" in the prospectus.



                             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 approximately 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.


                                 LEGAL MATTERS


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


                                      S-54
<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"), Moody's Investors Service, Inc.
("Moody's") and Fitch, Inc. ("Fitch," and together with S&P and Moody's, the
"Rating Agencies") as indicated:


<TABLE>
<CAPTION>
                           RATING AGENCY
                    ---------------------------
       CLASS          S&P     MOODY'S     FITCH
   --------------   ------   ---------   ------
  <S>                <C>       <C>        <C>
   A-1 ..........     AAA       Aaa        AAA
   A-1 ..........     AAA       Aaa        AAA
   A-3 ..........     AAA       Aaa        AAA
   A-IO .........     AAA       Aaa        AAA
   R ............     AAA       N/A        AAA
   M-1 ..........      AA       N/A         AA
   M-2 ..........       A       N/A          A
   B ............     BBB-      N/A        BBB-

</TABLE>

     A securities rating addresses the likelihood of the receipt by a
certificateholder of distributions on the mortgage loans. The rating takes into
consideration the characteristics of the mortgage loans and the structural,
legal and tax aspects associated with the certificates. The ratings on the
offered certificates do not, however, constitute statements regarding the
likelihood or frequency of prepayments on the mortgage loans, the payment of
any Basis Risk Shortfall or the possibility that a holder of an offered
certificate might realize a lower than anticipated yield.


     The depositor has not engaged any rating agency other than the Rating
Agencies to provide ratings on the offered certificates. However, there can be
no assurance as to whether any other rating agency will rate the offered
certificates, or, if it does, what rating would be assigned by any such other
rating agency. Any rating on the offered certificates by another rating agency,
if assigned at all, may be lower than the ratings assigned to the offered
certificates by the Rating Agencies.


     A security rating is not a recommendation to buy, sell or hold securities
and may be subject to revision or withdrawal at any time by the assigning
rating organization. Each security rating should be evaluated independently of
any other security rating. In the event that the ratings initially assigned to
any of the offered certificates by the Rating Agencies are subsequently lowered
for any reason, no person or entity is obligated to provide any additional
support or credit enhancement with respect to such offered certificates.


                                      S-55
<PAGE>


























                      [THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>

                                    ANNEX I
         GLOBAL CLEARANCE, SETTLEMENT AND TAX DOCUMENTATION PROCEDURES

     Except in certain limited circumstances, the offered certificates will be
offered globally (the "Global Securities") and will be available only in
book-entry form. Investors in the Global Securities may hold such Global
Securities through any of The Depository Trust Company ("DTC"), Clearstream,
Luxembourg or Euroclear. The Global Securities will be tradable as home market
instruments in both the European and U.S. domestic markets. Initial settlement
and all secondary trades will settle in same-day funds.

     Secondary market trading between investors holding Global Securities
through Clearstream, Luxembourg and Euroclear will be conducted in the ordinary
way in accordance with their normal rules and operating procedures and in
accordance with conventional eurobond practice (i.e., seven calendar day
settlement).

     Secondary market trading between investors holding Global Securities
through DTC will be conducted according to the rules and procedures applicable
to U.S. corporate debt obligations.

     Secondary cross-market trading between Clearstream, Luxembourg or
Euroclear and DTC Participants holding Certificates will be effected on a
delivery-against-payment basis through the respective Depositaries of
Clearstream, Luxembourg and Euroclear (in such capacity) and as DTC
Participants.

     Non-U.S. holders (as described below) of Global Securities will be subject
to U.S. withholding taxes unless such holders meet certain requirements and
deliver appropriate U.S. tax documents to the securities clearing organizations
or their participants.


INITIAL SETTLEMENT

     All Global Securities will be held in book-entry form by DTC in the name
of Cede & Co. as nominee of DTC. Investors' interests in the Global Securities
will be represented through financial institutions acting on their behalf as
direct and indirect Participants in DTC. As a result, Clearstream, Luxembourg
and Euroclear will hold positions on behalf of their participants through their
respective Depositaries, which in turn will hold such positions in accounts as
DTC Participants.

     Investors electing to hold their Global Securities through DTC will follow
the settlement practices applicable to conventional eurobonds, except that
there will be no temporary global security and no "lock-up" or restricted
period. Investor securities custody accounts will be credited with their
holdings against payment in same-day funds on the settlement date.

     Investors electing to hold their Global Securities through Clearstream,
Luxembourg or Euroclear accounts will follow the settlement procedures
applicable to conventional eurobonds, except that there will be no temporary
global security and no "lock-up" or restricted period. Global Securities will
be credited to the securities custody accounts on the settlement date against
payment in same-day funds.


SECONDARY MARKET TRADING

     Since the purchaser determines the place of delivery, it is important to
establish at the time of the trade where both the purchaser's and seller's
accounts are located to ensure that settlement can be made on the desired value
date.

     Trading between DTC Participants. Secondary market trading between DTC
Participants will be settled using the procedures applicable to prior mortgage
loan asset backed certificates issues in same-day funds.

     Trading between Clearstream, Luxembourg and/or Euroclear
Participants. Secondary market trading between Clearstream, Luxembourg
Participants or Euroclear Participants will be settled using the procedures
applicable to conventional eurobonds in same-day funds.

     Trading between DTC seller and Clearstream, Luxembourg or Euroclear
purchaser. When Global Securities are to be transferred from the account of a
DTC Participant to the account of a Clearstream,


                                      I-1
<PAGE>

Luxembourg Participant or a Euroclear Participant, the purchaser will send
instructions to Clearstream, Luxembourg or Euroclear through a Clearstream,
Luxembourg Participant or Euroclear Participant at least one business day prior
to settlement. Clearstream, Luxembourg or Euroclear will instruct the
respective Depositary, as the case may be, to receive the Global Securities
against payment. Payment will include interest accrued on the Global Securities
from and including the last coupon payment date to and excluding the settlement
date, on the basis of the actual number of days in such interest period and a
year assumed to consist of 360 days. For transactions settling on the 31st of
the month, payment will include interest accrued to and excluding the first day
of the following month. Payment will then be made by the respective Depositary
of the DTC Participant's account against delivery of the Global Securities.
After settlement has been completed, the Global Securities will be system and
by the clearing system, in accordance with its usual procedures, to the
Clearstream, Luxembourg Participant's or Euroclear Participant's account. The
securities credit will appear the next day (European time) and the cash debt
will be back-valued to, and the interest on the Global Securities will accrue
from, the value date (which would be the preceding day when settlement occurred
in New York). If settlement is not completed on the intended value date (i.e.,
the trade fails), the Clearstream, Luxembourg or Euroclear cash debt will be
valued instead as of the actual settlement date.

     Clearstream, Luxembourg Participants and Euroclear Participants will need
to make available to the respective clearing systems the funds necessary to
process same-day funds settlement. The most direct means of doing so is to
preposition funds for settlement, either from cash on hand or existing lines of
credit, as they would for any settlement occurring within Clearstream,
Luxembourg or Euroclear. Under this approach, they may take on credit exposure
to Clearstream, Luxembourg or Euroclear until the Global Securities are
credited to their accounts one day later.

     As an alternative, if Clearstream, Luxembourg or Euroclear has extended a
line of credit to them, Clearstream, Luxembourg Participants or Euroclear
Participants can elect not to preposition funds and allow that credit line to
be drawn upon the finance settlement. Under this procedure, Clearstream,
Luxembourg Participants or Euroclear Participants purchasing Global Securities
would incur overdraft charges for one day, assuming they cleared the overdraft
when the Global Securities were credited to their accounts. However, interest
on the Global Securities would accrue from the value date. Therefore, in many
cases the investment income on the Global Securities earned during that one-day
period may substantially reduce or offset the amount of such overdraft charges,
although this result will depend on each Clearstream, Luxembourg Participant's
or Euroclear Participant's particular cost of funds.

     Since the settlement is taking place during New York business hours, DTC
Participants can employ their usual procedures for sending Global Securities to
the respective European Depositary for the benefit of Clearstream, Luxembourg
Participants or Euroclear Participants. The sale proceeds will be available to
the DTC seller on the settlement date. Thus, to the DTC Participants a
cross-market transaction will settle no differently than a trade between two
DTC Participants.

     Trading between Clearstream, Luxembourg or Euroclear Seller and DTC
Purchaser. Due to time zone differences in their favor, Clearstream, Luxembourg
Participants and Euroclear Participants may employ their customary procedures
for transactions in which Global Securities are to be transferred by the
respective clearing system, through the respective Depositary, to a DTC
Participant. The seller will send instructions to Clearstream, Luxembourg or
Euroclear through a Clearstream, Luxembourg Participant or Euroclear
Participant at least one business day prior to settlement. In these cases
Clearstream, Luxembourg or Euroclear will instruct the respective Depositary,
as appropriate, to deliver the Global Securities to the DTC Participant's
account against payment. Payment will include interest accrued on the Global
Securities from and including the last coupon payment to and excluding the
settlement date on the basis of the actual number of days in such interest
period and a year assumed to consist of 360 days. For transactions settling on
the 31st of the month, payment will include interest accrued to and excluding
the first day of the following month. The payment will then be reflected in the
account of the Clearstream, Luxembourg Participant or Euroclear Participant the
following day, and receipt of the cash proceeds in the Clearstream, Luxembourg
Participant's or Euroclear Participant's account would be back-valued to the
value date (which would be the preceding day, when settlement occurred in New
York). Should the Clearstream, Luxembourg Participant or Euroclear Participant
have


                                      I-2
<PAGE>

a line of credit with its respective clearing system and elect to be in debt in
anticipation of receipt of the sale proceeds in its account, the back-valuation
will extinguish any overdraft incurred over that one-day period. If settlement
is not completed on the intended value date (i.e., the trade fails), receipt of
the cash proceeds in the Clearstream, Luxembourg Participant's or Euroclear
Participant's account would instead be valued as of the actual settlement date.


     Finally, day traders that use Clearstream, Luxembourg or Euroclear and
that purchase Global Securities from DTC Participants for delivery to
Clearstream, Luxembourg Participants or Euroclear Participants should note that
these trades would automatically fail on the sale side unless affirmative
action were taken. At least three techniques should be readily available to
eliminate this potential problem:

   (a)        borrowing through Clearstream, Luxembourg or Euroclear for one
              day (until the purchase side of the day trade is reflected in
              their Clearstream, Luxembourg or Euroclear accounts) in
              accordance with the clearing system's customary procedures;

   (b)        borrowing the Global Securities in the U.S. from a DTC
              Participant no later than one day prior to settlement, which
              would give the Global Securities sufficient time to be reflected
              in their Clearstream, Luxembourg or Euroclear account in order to
              settle the sale side of the trade; or

   (c)        staggering the value dates for the buy and sell sides of the
              trade so that the value date for the purchase from the DTC
              Participant is at least one day prior to the value date for the
              sale to the Clearstream, Luxembourg Participant or Euroclear
              Participant.


CERTAIN U.S. FEDERAL INCOME TAX DOCUMENTATION REQUIREMENTS

     A beneficial owner of Global Securities holding securities through
Clearstream, Luxembourg or Euroclear (or through DTC if the holder has an
address outside the U.S.) will be subject to the 30% U.S. withholding tax that
generally applies to payments of interest (including original issue discount)
on registered debt issued by U.S. Persons, unless (i) each clearing system,
bank or other financial institution that holds customers' securities in the
ordinary course of its trade or business in the chain of intermediaries between
such beneficial owner and the U.S. entity required to withhold tax complies
with applicable certification requirements and (ii) such beneficial owner takes
one of the following steps to obtain an exemption or reduced tax rate:

     Exemption for non-U.S. Persons (Form W-8 or Form W-8BEN). Beneficial
owners of Global Securities that are non-U.S. Persons can obtain a complete
exemption from the withholding tax by filing a signed Form W-8 (Certificate of
Foreign Status) or Form W-8BEN (Certificate of Foreign Status of Beneficial
Owner for United States tax withholding). If the information shown on Form W-8
changes, a new Form W-8 must be filed within 30 days of such change. After
December 31, 2000, only Form W-8BEN will be acceptable.

     Exemption for non-U.S. Persons with effectively connected income (Form
4224 or Form W-8ECI). A non-U.S. Person, including a non-U.S. corporation or
bank with a U.S. branch, for which the interest income is effectively connected
with its conduct of a trade or business in the United States, can obtain an
exemption from the withholding tax by filing Form 4224 (Exemption from
Withholding of Tax on Income Effectively Connected with the Conduct of a Trade
or Business in the United States) or Form W-8ECI (Certificate of Foreign
Persons Claim of Exemption from Withholding on Income Effectively Connected
with the Conduct of a Trade or Business in the United States).

     Exemption or reduced rate for non-U.S. Persons resident in treaty
countries (Form 1001 or Form W-8BEN). Non-U.S. Persons that are Certificate
Owners residing in a country that has a tax treaty with the United States can
obtain an exemption or reduced tax rate (depending on the treaty terms) by
filing Form 1001 (Ownership, Exemption or Reduced Rate Certificate) or Form
W-8BEN (Certificate of Foreign Status of Beneficial Owners for United States
Tax Withholding). If the treaty provides only for a reduced rate, withholding
tax will be imposed at that rate unless the filer alternatively files Form W-8.
Form 1001 may be filed by the Certificate Owners or his agent. After December
31, 2000, only Form W-8BEN will be acceptable.


                                      I-3
<PAGE>

     Exemption for U.S. Persons (Form W-9). U.S. Persons can obtain a complete
exemption from the withholding tax by filing Form W-9 (Payer's Request for
Taxpayer Identification Number and Certification).


     U.S. Federal Income Tax Reporting Procedure. The Certificate Owner of a
Global Security or, in the case of a Form 1001 or a Form 4224 filer, his agent,
files by submitting the appropriate form to the person through whom it holds
(the clearing agency, in the case of persons holding directly on the books of
the clearing agency). Form W-8, Form 4224 and Form 1001 are effective until
December 31, 2000. Form W-8BEN and Form W-8ECI are effective until the third
succeeding calendar year from the date the form is signed.


     The term "U.S. Person" means (i) a citizen or resident of the United
States, (ii) a corporation, partnership or other entity treated as a
corporation or partnership for United States federal income tax purposes
organized in or under the laws of the United States or any state thereof or the
District of Columbia or (iii) an estate the income of which is includible in
gross income for United States tax purposes, regardless of its source, or (iv)
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 authority to control all substantial decisions of the trust. This
summary does not deal with all aspects of U.S. Federal income tax withholding
that may be relevant to foreign holders of the Global Securities. Investors are
advised to consult their own tax advisors for specific tax advice concerning
their holding and disposing of the Global Securities.


                                      I-4
<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."

















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<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


                                       32
<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.


                                       44
<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."


                                       54
<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


                                       55
<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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      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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                            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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<PAGE>

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


                                       71
<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.


                                       72
<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


                                       73
<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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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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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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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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<PAGE>

                   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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<PAGE>

 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


                                       83
<PAGE>

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:


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<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


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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,


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<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


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<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


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<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


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<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


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<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:


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<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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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


                                      102
<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


                                      104
<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.


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     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.


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<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


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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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                                   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.


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<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,


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<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.

















                                      114

<PAGE>

                          DLJ MORTGAGE ACCEPTANCE CORP.
                                    DEPOSITOR




                           DLJ ABS TRUST SERIES 2000-3
                       MORTGAGE PASS-THROUGH CERTIFICATES,


                                  SERIES 2000-3

                                  $204,598,000

                                  (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 2000-3 MORTGAGE PASS-THROUGH CERTIFICATES IN ANY
STATE WHERE THE OFFER IS NOT PERMITTED.


WE DO NOT CLAIM THAT THE INFORMATION IN THIS PROSPECTUS SUPPLEMENT AND
PROSPECTUS 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 2000-3 MORTGAGE PASS-THROUGH CERTIFICATES AND FOR
THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS. IN ADDITION, ALL DEALERS SELLING THE
SERIES 2000-3 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 27, 2000


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