CWMBS INC
424B5, 2000-08-28
ASSET-BACKED SECURITIES
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<PAGE>


                                                  Filed Pursuant to Rule 424B5
                                                  File No. 333-72655


PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED MAY 17, 1999)


                                 $294,862,616
                                 (APPROXIMATE)


                                  CWMBS, INC.
                                   DEPOSITOR


                               [GRAPHIC OMITTED]


                          SELLER AND MASTER SERVICER


                 RESIDENTIAL ASSET SECURITIZATION TRUST 2000-A6
                                    ISSUER
          DISTRIBUTIONS PAYABLE MONTHLY, BEGINNING SEPTEMBER 25, 2000

                               ---------------

The following classes of certificates are being offered pursuant to this
prospectus supplement and the accompanying prospectus:


<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------
                 INITIAL CLASS                                    INITIAL CLASS
                  CERTIFICATE      PASS-THROUGH                    CERTIFICATE     PASS-THROUGH
                    BALANCE            RATE                          BALANCE           RATE
------------------------------------------------------------------------------------------------
<S>             <C>               <C>              <C>           <C>              <C>
 Class CB-1     $121,567,000          8.00%          Class X        Notional       Variable
------------------------------------------------------------------------------------------------
 Class NB-1     $118,684,000          8.00%          Class PO       $251,516         N/A
------------------------------------------------------------------------------------------------
 Class NB-2     $21,190,000           8.00%          Class B-1     $8,286,000       8.00%
------------------------------------------------------------------------------------------------
 Class NB-3     $15,542,000           8.00%          Class B-2     $5,877,000       8.00%
------------------------------------------------------------------------------------------------
 Class A-R          $100              8.00%          Class B-3     $3,465,000       8.00%
------------------------------------------------------------------------------------------------
</TABLE>

------------------
CONSIDER CAREFULLY    The Class PO Certificates are principal only
THE RISK FACTORS      certificates, and the Class X Certificates are interest
BEGINNING ON PAGE     only notional amount certificates. The pass-through rate
S-7 IN THIS           for the Class X Certificates is calculated as described
PROSPECTUS            under "Description of the Certificates--Interest."
SUPPLEMENT AND ON
PAGE 5 IN THE         The assets of the trust will consist primarily of a pool
PROSPECTUS            consisting of two loan groups of 30-year conventional
------------------    fixed-rate mortgage loans secured by first liens on one-
                      to four-family residential properties.

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

CREDIT SUISSE FIRST BOSTON CORPORATION WILL OFFER THE CERTIFICATES LISTED
ABOVE, OTHER THAN THE CLASS PO AND CLASS X CERTIFICATES, TO THE PUBLIC AT
VARYING PRICES TO BE DETERMINED AT THE TIME OF SALE. THE PROCEEDS TO THE
DEPOSITOR FROM THE SALE OF THESE CERTIFICATES ARE EXPECTED TO BE APPROXIMATELY
98.57% OF THE PRINCIPAL BALANCE OF THE OFFERED CERTIFICATES (OTHER THAN THE
CLASS PO AND CLASS X CERTIFICATES) PLUS ACCRUED INTEREST, BEFORE DEDUCTING
EXPENSES. THE CLASS PO AND CLASS X CERTIFICATES WILL NOT BE PURCHASED BY CREDIT
SUISSE FIRST BOSTON CORPORATION. THEY WILL BE TRANSFERRED TO THE SELLER (OR AN
AFFILIATE) ON OR ABOUT AUGUST 28, 2000 AS PARTIAL CONSIDERATION FOR THE SALE OF
THE MORTGAGE LOANS TO THE DEPOSITOR. SEE "METHOD OF DISTRIBUTION."


                           CREDIT SUISSE FIRST BOSTON
August 24, 2000
<PAGE>

                               TABLE OF CONTENTS



<TABLE>
<CAPTION>
          PROSPECTUS SUPPLEMENT
          ---------------------
                                            PAGE
                                            ----
<S>                                         <C>
Summary .................................   S-3
Risk Factors ............................   S-7
The Mortgage Pool .......................   S-12
Servicing of Mortgage Loans .............   S-28
Description of the Certificates .........   S-32
Yield, Prepayment and Maturity
   Considerations .......................   S-47
Credit Enhancement ......................   S-57
Use of Proceeds .........................   S-58
Material Federal Income Tax
   Consequences .........................   S-58
ERISA Considerations ....................   S-60
Method of Distribution ..................   S-61
Legal Matters ...........................   S-62
Ratings..................................   S-62

       PROSPECTUS
       ----------
                                            PAGE
                                            ----
Important Notice About
   Information in This Prospectus
   and Each Accompanying
   Prospectus Supplement ................    4
Risk Factors ............................    5
The Trust Fund ..........................   14
Use of Proceeds .........................   24
The Depositor ...........................   24
Mortgage Loan Program ...................   25
Description of the Certificates .........   27
Credit Enhancement ......................   40
Yield and Prepayment
   Considerations .......................   44
The Pooling and Servicing
   Agreement ............................   45
Certain Legal Aspects of the
   Mortgage Loans .......................   59
Material Federal Income Tax
   Consequences .........................   66
State Tax Considerations ................   89
ERISA Considerations ....................   89
Legal Investment ........................   93
Method of Distribution ..................   94
Legal Matters ...........................   95
Financial Information ...................   95
Rating ..................................   95
Index to Defined Terms ..................   96
</TABLE>

                                      S-2
<PAGE>

                                    SUMMARY

o    THIS SUMMARY HIGHLIGHTS SELECTED INFORMATION FROM THIS DOCUMENT AND DOES
     NOT CONTAIN ALL OF THE INFORMATION THAT YOU NEED TO CONSIDER IN MAKING YOUR
     INVESTMENT DECISION. TO UNDERSTAND ALL OF THE TERMS OF AN OFFERING OF THE
     CERTIFICATES, READ CAREFULLY THIS ENTIRE DOCUMENT AND THE ACCOMPANYING
     PROSPECTUS.


                              OFFERED CERTIFICATES

Residential Asset Securitization Trust 2000-A6 will issue thirteen classes of
certificates, ten of which are being offered by this prospectus supplement and
the accompanying prospectus. The assets of the trust that will support both the
offered certificates and other classes of certificates will consist of a pool
of mortgage loans with a principal balance of approximately $301,342,065 as of
August 1, 2000. The mortgage loans will consist primarily of 30-year
conventional fixed-rate mortgage loans secured by first liens on one-to
four-family residential properties.

The mortgage pool consists of two loan groups. Loan group 1 consists of
mortgage loans with an aggregate principal balance of approximately
$132,145,095 as of August 1, 2000. Loan group 2 consists of mortgage loans with
an aggregate principal balance of approximately $169,196,970 as of August 1,
2000.

The certificates will not be offered unless they are assigned the ratings
indicated in the chart below by Fitch, Inc. ("Fitch") and by Standard & Poor's,
a division of The McGraw-Hill Companies, Inc. ("S&P"). The following chart
lists certain characteristics of the classes of the offered certificates:


<TABLE>
<CAPTION>
               FITCH       S&P
   CLASS       RATING     RATING        TYPE
   -----       ------     ------        ----
<S>            <C>        <C>        <C>
Class CB-1        AAA       AAA      Senior
Class NB-1        AAA       AAA      Senior
Class NB-2        AAA       AAA      Senior
Class NB-3        AAA       AAA      Senior/NAS
Class X           AAA       AAA      Senior/Notional Amount/
                                     Interest Only
Class PO          AAA       AAA      Senior/Principal Only
Class A-R         AAA       AAA      Senior/Residual
Class B-1         AA         *       Subordinate
Class B-2          A         *       Subordinate
Class B-3         BBB        *       Subordinate
</TABLE>

----------------------
*     S&P was not asked to rate these certificates.


A rating is not a recommendation to buy, sell or hold securities. These ratings
may be lowered or withdrawn at any time by either of the rating agencies.

See "Description of the Certificates-- General" and "--Book-Entry
Certificates," "Ratings" and "The Mortgage Pool" in this prospectus supplement
and "The Trust Fund--The Mortgage Loans--General" in the prospectus.

CUT-OFF DATE

August 1, 2000


CLOSING DATE

On or about August 28, 2000

                                      S-3
<PAGE>

DEPOSITOR

CWMBS, Inc. is a limited purpose finance subsidiary of Countrywide Credit
Industries, Inc. Its address is 4500 Park Granada, Calabasas, California 91302,
and its telephone number is (818) 225-3300.


SELLER AND MASTER SERVICER

IndyMac Bank, F.S.B.


TRUSTEE

The Bank of New York


DISTRIBUTION DATES

We will make distributions on the 25th day of each month. If the 25th day of a
month is not a business day, then we will make distributions the next business
day. The first distribution is scheduled for September 25, 2000.


INTEREST PAYMENTS

Interest will accrue at the rate specified on the cover page or described in
this prospectus supplement on each interest bearing class of certificates on
the basis of a 360-day year divided into twelve 30-day months. Interest will
accrue on each interest bearing class of certificates during the calendar month
before the month of the distribution date.

See "Description of the Certificates--Interest" in this prospectus supplement.

When a borrower makes a full or partial prepayment on a mortgage loan, the
amount of interest which the borrower is required to pay may be less than the
amount of interest certificateholders would otherwise be entitled to receive
with respect to the mortgage loan. The master servicer is required to reduce its
servicing compensation to offset this shortfall but the reduction for any
distribution date is limited to an amount equal to the product of one-twelfth
of 0.125% times the pool balance as of the first day of the prior month. If the
aggregate amount of interest shortfalls resulting from prepayments exceeds the
amount of the reduction in the master servicer's servicing compensation, the
interest entitlement for each class of certificates will be reduced
proportionately by the amount of this excess.

See "Servicing of the Mortgage Loans--Servicing Compensation and Payment of
Expenses" and "--Adjustments to Servicing Compensation in Connection with
Certain Prepaid Mortgage Loans" in this prospectus supplement.


PRINCIPAL PAYMENTS

Principal will be paid on each class of certificates entitled to receive
payments of principal on the 25th day of each month as described in this
prospectus supplement beginning at page S-37.

See "Description of the Certificates-- Principal" in this prospectus
supplement.


OPTIONAL TERMINATION

The master servicer may purchase all of the remaining assets of the trust after
the principal balance of the mortgage loans and real estate owned by the trust
declines below 10% of the principal balance of the mortgage loans on August 1,
2000.

See "Description of the Certificates-- Optional Termination" in this prospectus
supplement.


                                      S-4
<PAGE>

PRIORITY OF DISTRIBUTIONS

On each distribution date available funds from each of loan group 1 and loan
group 2 will be applied in the following order of priority:

(1)   to interest on the interest bearing classes and components of the senior
      certificates relating to that loan group;

(2)   to principal of the classes and components of the senior certificates
      relating to that loan group in the manner, order and priority described
      under "Description of the Certificates--Principal";

(3)   to any deferred amounts payable on the Class PO component relating to
      that loan group, as described under "Description of the Certificates--
      Principal"; and

(4)   from remaining available funds from both loan groups, to interest on and
      then principal of each class of subordinated certificates, in order of
      their numerical class designations, beginning with the Class B-1
      Certificates, as described under "Description of the Certificates--
      Principal."

ADVANCES

The master servicer will make cash advances with respect to delinquent payments
of principal and interest on the mortgage loans to the extent the master
servicer reasonably believes that the cash advances can be repaid from future
payments on the mortgage loans. These cash advances are only intended to
maintain a regular flow of scheduled interest and principal payments on the
certificates and are not intended to guarantee or insure against losses.

See "Servicing of Mortgage Loans--Advances" in this prospectus supplement


                               CREDIT ENHANCEMENT

The issuance of senior certificates and subordinated certificates by the trust
is designed to increase the likelihood that senior certificateholders will
receive regular payments of interest and principal.


SUBORDINATION

The senior certificates will have a payment priority over the certificates that
are designated as subordinated certificates. Within the classes of subordinated
certificates offered by this prospectus supplement, the Class B-1 Certificates
will have a payment priority over the Class B-2 and B-3 Certificates, and the
Class B-2 Certificates will have a payment priority over the Class B-3
Certificates. The Class B-4, Class B-5, and Class B-6 Certificates, which are
not being offered to the public, are also subordinated to all of the other
certificates, in that order, with the Class B-6 Certificates having the lowest
priority of payment.

Subordination is designed to provide the holders of certificates with a higher
payment priority with protection against most losses realized when the
remaining unpaid principal balance on a mortgage loan exceeds the amount of
proceeds recovered upon the liquidation of that mortgage loan. In general, this
loss protection is accomplished by allocating the realized losses among the
subordinated certificates, beginning with the subordinated certificates with
the lowest payment priority before realized losses are allocated to the senior
certificates. However, special hazard


                                      S-5
<PAGE>

losses, bankruptcy losses, and fraud losses realized on the mortgage loans in a
loan group in excess of the amounts set forth in this prospectus supplement are
allocated both to the related senior certificates (other than the Class X and
Class PO Certificates) and to the subordinated certificates in the manner
specified in this prospectus supplement under "Description of the
Certificates--Allocation of Losses."

See "Description of the Certificates-- Allocation of Losses" and "Credit
Enhancement--Subordination" in this prospectus supplement.


                                  TAX STATUS

The trust will elect to be treated, for federal income tax purposes, as a real
estate mortgage investment conduit. The classes of certificates, other than the
Class A-R Certificates, will constitute regular interests in the REMIC. The
Class A-R Certificates will represent the sole class of residual interests in
the REMIC.

See "Material Federal Income Tax Consequences" in this prospectus supplement
and in the prospectus.


                              ERISA CONSIDERATIONS

The senior certificates (other than the Class PO, Class X and Class A-R
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, or by an entity investing the assets of
an employee benefit plan, so long as certain conditions are met.

See "ERISA Considerations" in this prospectus supplement and in the prospectus.


                                LEGAL INVESTMENT


The senior certificates and the Class B-1 Certificates will be mortgage related
securities for purposes of the Secondary Mortgage Market Enhancement Act of
1984 as long as they are rated in one of the two highest rating categories by
at least one nationally recognized statistical rating organization. The Class
B-2 and Class B-3 Certificates will not be rated in one of the two highest
rating categories by a nationally recognized statistical rating organization,
and therefore, will not be mortgage related securities for purposes of that
Act.


See "Legal Investment" in this prospectus supplement and in the prospectus.



                                       S-6
<PAGE>

                                 RISK FACTORS

 o  THE FOLLOWING INFORMATION, WHICH YOU SHOULD CAREFULLY CONSIDER, IDENTIFIES
    SIGNIFICANT SOURCES OF RISK ASSOCIATED WITH AN INVESTMENT IN THE
    CERTIFICATES. YOU SHOULD ALSO CAREFULLY CONSIDER THE INFORMATION UNDER
    "RISK FACTORS" BEGINNING ON PAGE 5 IN THE PROSPECTUS.



<TABLE>
<S>                             <C>
YOUR YIELD WILL BE AFFECTED     Borrowers may, at their option, prepay their
 BY HOW BORROWERS REPAY         mortgage loans in whole or in part at any time. We
 THEIR MORTGAGE LOANS           cannot predict the rate at which borrowers will
                                repay their mortgage loans. A prepayment of a
                                mortgage loan, however, will usually result in a
                                prepayment on the certificates.

                                The rate and timing of prepayment of mortgage
                                loans will affect the yields to maturity and weighted
                                average lives of the certificates. Any reinvestment
                                risks from faster or slower prepayments of
                                mortgage loans will be borne entirely by the
                                holders of the certificates.

                                o       If you purchase principal only
                                        certificates or you purchase your
                                        certificates at a discount and principal
                                        is repaid slower than you anticipate,
                                        then your yield may be lower than you
                                        anticipate.

                                o       If you purchase interest only
                                        certificates or you purchase your
                                        certificates at a premium and principal
                                        is repaid faster than you anticipate,
                                        then your yield may be lower than you
                                        anticipate.

                                o       If you purchase interest only
                                        certificates and principal is repaid
                                        faster than you anticipate, you may lose
                                        your initial investment.

                                o       Approximately 25.36% of the mortgage
                                        loans by cut-off date pool principal
                                        balance require the mortgagor to pay a
                                        penalty if the mortgagor prepays the
                                        mortgage loan during periods ranging
                                        from one year to five years after the
                                        mortgage loan was originated. A
                                        prepayment penalty may discourage a
                                        mortgagor from prepaying the mortgage
                                        loan during the applicable period.
                                        Prepayment penalties will not be
                                        available for distribution to the
                                        certificateholders.

                                See "Yield, Prepayment and Maturity
                                Considerations" for a description of factors that may
                                influence the rate and timing of prepayments on the
                                mortgage loans.
</TABLE>

                                      S-7
<PAGE>


<TABLE>
<S>                              <C>
YOUR YIELD WILL BE AFFECTED     The timing of principal payments on the certificates
 BY HOW DISTRIBUTIONS ARE       will be affected by a number of factors, including:
 ALLOCATED TO THE
 CERTIFICATES

                                o       the extent of prepayments on the
                                        mortgage loans,

                                o       how payments of principal are allocated
                                        among the classes of certificates as
                                        specified on page S-37,

                                o       whether the master servicer exercises
                                        its right, in its sole discretion, to
                                        terminate the trust fund,

                                o       the rate and timing of payment defaults
                                        and losses on the mortgage loans, and

                                o       repurchases of mortgage loans for
                                        material breaches of representations and
                                        warranties.

                                Since distributions on the certificates are
                                dependent upon the payments on the mortgage
                                loans, we cannot guarantee the amount of any
                                particular payment or the amount of time that
                                will elapse before the trust is terminated.

                                See "Description of the Certificates--Principal," and
                                "--Optional Termination" for a description of the
                                manner in which principal will be paid to the
                                certificates. See "The Mortgage Pool--
                                Representations by Seller; Repurchases, etc." for
                                more information regarding the repurchase of
                                mortgage loans.

CREDIT ENHANCEMENT              The certificates are not insured by any financial
 MAY NOT BE SUFFICIENT TO       guaranty insurance policy. The subordination
 PROTECT SENIOR CERTIFICATES    features are intended to enhance the likelihood
 FROM LOSSES                    that senior certificateholders will receive regular
                                payments of interest and principal.

                                SUBORDINATION. Credit enhancement will be
                                provided for the certificates, first, by the right of
                                the holders of certificates to receive payments of
                                principal before the classes subordinated to them
                                and, second, by the allocation of realized losses to
                                subordinated classes in the inverse order of their
                                subordination. This form of credit enhancement
                                uses collections on the mortgage loans otherwise
                                payable to holders of subordinated classes to pay
                                interest or principal due on more senior classes.
                                Collections otherwise payable to subordinated
                                classes comprise the sole source of funds from
                                which this type of credit enhancement is provided.
</TABLE>

                                      S-8
<PAGE>


<TABLE>
<S>                         <C>
                            Except as described below, realized losses from
                            either loan group are allocated to the subordinated
                            certificates in the reverse order of their priority of
                            payment, beginning with the subordinated
                            certificates with the lowest payment priority, until
                            the principal amount of that class has been reduced
                            to zero. Accordingly, if the aggregate principal
                            balance of each subordinated class were to be
                            reduced to zero, delinquencies and defaults on the
                            mortgage loans would reduce the amount of funds
                            available for monthly distributions to holders of the
                            senior certificates. Furthermore, the subordinated
                            classes of certificates will provide only limited
                            protection against some categories of losses such as
                            special hazard losses, bankruptcy losses and fraud
                            losses in excess of the amounts specified in this
                            prospectus supplement. Once those amounts have
                            been exceeded, holders of the senior certificates
                            will bear their proportionate share of any losses
                            realized (a) prior to the date on which the principal
                            balances of the subordinated classes of certificates
                            have been reduced to zero, on the mortgage loans
                            of the related loan group and (b) on and after the
                            date on which the principal balances of the
                            subordinated classes of certificates have been
                            reduced to zero, on all of the mortgage loans. You
                            should note that it is possible that a
                            disproportionate amount of coverage for these
                            types of losses may be used by one loan group
                            which could make the certificates related to the
                            other loan group more likely to suffer a loss.
                            Among the subordinated certificates the Class B-1
                            Certificates are the least subordinated, that is, they
                            have the highest payment priority. Then come the
                            Class B-2, Class B-3, Class B-4, Class B-5 and Class
                            B-6 Certificates, in that order.

                            See "Credit Enhancement--Subordination."

CERTIFICATES MAY NOT BE     The offered certificates may not be an appropriate
 APPROPRIATE FOR SOME       investment for investors who do not have sufficient
 INVESTORS                  resources or expertise to evaluate the particular
                            characteristics of each applicable class of offered
                            certificates. This may be the case because, among
                            other things:

                            o     The yield to maturity of offered certificates
                                  purchased at a price other than par will be
                                  sensitive to the uncertain rate and timing of
                                  principal prepayments on the mortgage loans;
</TABLE>

                                      S-9
<PAGE>


<TABLE>
<S>                              <C>

                                o       The rate of principal distributions on
                                        and the weighted average lives of the
                                        offered certificates will be sensitive
                                        to the uncertain rate and timing of
                                        principal prepayments on the mortgage
                                        loans and the priority of principal
                                        distributions among the classes of
                                        certificates. Accordingly, the offered
                                        certificates may be an inappropriate
                                        investment if you require a distribution
                                        of a particular amount of principal on a
                                        specific date or an otherwise
                                        predictable stream of distributions;

                                o       You may not be able to reinvest
                                        distributions on an offered certificate
                                        (which, in general, are expected to be
                                        greater during periods of relatively low
                                        interest rates) at a rate at least as
                                        high as the pass-through rate applicable
                                        to your certificate; or

                                o       A secondary market for the offered
                                        certificates may not develop or provide
                                        certificateholders with liquidity of
                                        investment.

GEOGRAPHIC CONCENTRATION        Approximately 35.22% of the mortgage loans
 INCREASES RISK THAT            expected to be in the trust on the cut-off date are
 CERTIFICATE YIELDS COULD BE    secured by property in California and
 IMPAIRED                       approximately 16.33% of the mortgage loans
                                expected to be in the trust on the cut-off date are
                                secured by property in New York. Property in
                                California may be more susceptible than homes
                                located in other parts of the country to some types
                                of uninsurable hazards, such as earthquakes, floods,
                                mudslides and other natural disasters. In addition,

                                o       Economic conditions in California or New
                                        York (which may or may not affect real
                                        property values) may affect the ability
                                        of borrowers to repay their loans on
                                        time;

                                o       Declines in the California or New York
                                        residential real estate market may
                                        reduce the values of properties located
                                        in California or New York, which would
                                        result in an increase in the
                                        loan-to-value ratios; and

                                o       Any increase in the market value of
                                        properties located in California or New
                                        York would reduce the loan-to-value
                                        ratios and could, therefore, make
                                        alternative sources of financing
                                        available to the borrowers at lower
                                        interest rates, which could result in an
                                        increased rate of prepayment of the
                                        mortgage loans.
</TABLE>

                                      S-10
<PAGE>


<TABLE>
<S>                         <C>
YOU MAY HAVE DIFFICULTY     No market for any of the certificates will exist
 RESELLING CERTIFICATES     before they are issued. The underwriter intends to
                            make a secondary market in the classes of
                            certificates purchased by it, but has no obligation to
                            do so. We cannot assure you that a secondary
                            market will develop or, if it develops, that it will
                            continue. Consequently, you may not be able to sell
                            your certificates readily or at prices that will enable
                            you to realize your desired yield. The market
                            values of the 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 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.

                            See "Risk Factors--Ability to Resell Certificates
                            May Be Limited" in the prospectus.
</TABLE>

SOME OF THE STATEMENTS CONTAINED IN OR INCORPORATED BY REFERENCE IN THIS
PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS CONSIST OF
FORWARD-LOOKING STATEMENTS RELATING TO FUTURE ECONOMIC PERFORMANCE OR
PROJECTIONS AND OTHER FINANCIAL ITEMS. THESE STATEMENTS CAN BE IDENTIFIED BY
THE USE OF FORWARD-LOOKING WORDS SUCH AS "MAY," "WILL," "SHOULD," "EXPECTS,"
"BELIEVES," "ANTICIPATES," "ESTIMATES," OR OTHER COMPARABLE WORDS.
FORWARD-LOOKING STATEMENTS ARE SUBJECT TO A VARIETY OF RISKS AND UNCERTAINTIES
THAT COULD CAUSE ACTUAL RESULTS TO DIFFER FROM THE PROJECTED RESULTS. THOSE
RISKS AND UNCERTAINTIES INCLUDE, AMONG OTHERS, GENERAL ECONOMIC AND BUSINESS
CONDITIONS, REGULATORY INITIATIVES AND COMPLIANCE WITH GOVERNMENTAL
REGULATIONS, CUSTOMER PREFERENCES AND VARIOUS OTHER MATTERS, MANY OF WHICH ARE
BEYOND OUR CONTROL. BECAUSE WE CANNOT PREDICT THE FUTURE, WHAT ACTUALLY HAPPENS
MAY BE VERY DIFFERENT FROM WHAT WE PREDICT IN OUR FORWARD-LOOKING STATEMENTS.


                                      S-11
<PAGE>

                               THE MORTGAGE POOL


GENERAL

     The depositor, CWMBS, Inc., will purchase the mortgage loans in the
mortgage pool from IndyMac Bank, F.S.B. ("IndyMac Bank") pursuant to a pooling
and servicing agreement dated as of the cut-off date among IndyMac Bank, as
seller and master servicer, the depositor, and The Bank of New York, as
trustee, and will cause the mortgage loans to be assigned to the trustee for
the benefit of holders of the certificates.

     Under the pooling and servicing agreement, the seller will make
representations, warranties and covenants to the depositor relating to, among
other things, the due execution and enforceability of the pooling and servicing
agreement and certain characteristics of the mortgage loans and, subject to the
limitations described below under "--Assignment of Mortgage Loans" and
"--Representations by Seller; Repurchases, etc.," the seller will be obligated
to repurchase or substitute a similar mortgage loan for any mortgage loan as to
which there exists deficient documentation or as to which there has been an
uncured breach of any representation or warranty relating to the
characteristics of the mortgage loans that materially and adversely affects the
interests of the certificateholders in that mortgage loan. The seller will
represent and warrant to the depositor in the pooling and servicing agreement
that the mortgage loans were selected from among the outstanding one- to
four-family mortgage loans in the seller's portfolio as to which the
representations and warranties set forth in the pooling and servicing agreement
can be made and that the selection was not made in a manner intended to affect
the interests of the certificateholders adversely. See "Mortgage Loan
Program--Representations by Sellers; Repurchases, etc." in the prospectus.
Under the pooling and servicing agreement, the depositor will assign all its
right, title and interest in and to those representations, warranties and
covenants (including the seller's repurchase obligation) to the trustee for the
benefit of the certificateholders. The depositor will make no representations
or warranties with respect to the mortgage loans and will have no obligation to
repurchase or substitute mortgage loans with deficient documentation or which
are otherwise defective. IndyMac Bank is selling the mortgage loans without
recourse and will have no obligation with respect to the certificates in its
capacity as seller other than the repurchase or substitution obligations
described above. The obligations of IndyMac Bank as master servicer with
respect to the certificates are limited to the master servicer's contractual
servicing obligations under the pooling and servicing agreement.

     Information with respect to the mortgage loans expected to be included in
the mortgage pool is set forth under this heading. Before the closing date,
mortgage loans may be removed from the mortgage pool and other mortgage loans
may be substituted for them. The depositor believes that the information set
forth in this prospectus supplement with respect to the mortgage pool as
presently constituted is representative of the characteristics of the mortgage
pool as it will be constituted at the closing date, but some characteristics of
the mortgage loans in the mortgage pool may vary. Unless otherwise indicated,
information presented in this prospectus supplement 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.

     As of the cut-off date, the aggregate of the Stated Principal Balances of
the mortgage loans is expected to be approximately $301,342,065, which is
referred to as the cut-off date pool principal balance. The mortgage pool has
been divided into two groups of mortgage loans (each is referred to as a loan
group)--loan group 1, which has a cut-off date principal balance of
approximately $132,145,095, and loan group 2, which has a cut-off date
principal balance of approximately $169,196,970. The mortgage loans in loan
group 1 had principal balances at origination which do not exceed the maximum
loan amount eligible for sale to Fannie Mae and Freddie Mac. The mortgage loans
in loan group 2 had principal balances at origination which may exceed the
maximum loan amount eligible for sale to Fannie Mae and Freddie Mac. The
mortgage loans provide for the amortization of the amount financed over a
series of substantially equal monthly payments. All of the mortgage loans
provide for payments due on the first day of each month (the "Due Date"). At
origination, approximately 99.13% of the mortgage loans by cut-off date
principal balance had stated


                                      S-12
<PAGE>

terms to maturity of 30 years. Scheduled monthly payments made by the
mortgagors on the mortgage loans (referred to as scheduled payments) either
earlier or later than their scheduled Due Dates will not affect the
amortization schedule or the relative application of the payments to principal
and interest. Except for 400 mortgage loans representing approximately 36.33%
of the mortgage loans in loan group 1 and 67 mortgage loans representing 16.75%
of the mortgage loans in loan group 2, in each case by cut-off date principal
balance of the related loan group, the mortgagors may prepay their mortgage
loans at any time without penalty. Any prepayment penalties received will not
be distributed to certificateholders.

     Each mortgage loan in loan group 1 was originated on or after February 1,
1999 and each mortgage loan in loan group 2 was originated on or after April 1,
1998.

     The latest stated maturity date of any mortgage loan in loan group 1 is
September 1, 2030, and the earliest stated maturity date of any mortgage loan
in loan group 1 is July 1, 2020. The latest stated maturity date of any
mortgage loan in loan group 2 is September 1, 2030, and the earliest stated
maturity date of any mortgage loan in loan group 2 is August 1, 2020.

     As of the cut-off date, no mortgage loan was delinquent more than 30 days.


     Three mortgage loans are subject to a buydown agreement. No mortgage loan
provides for deferred interest or negative amortization.

     No mortgage loan has a Loan-to-Value Ratio at origination of more than
approximately 98.58%. Each of the mortgage loans with a Loan-to-Value Ratio at
origination of greater than 80% will be covered by a primary mortgage guaranty
insurance policy issued by a mortgage insurance company acceptable to Fannie
Mae or Freddie Mac. The policy provides coverage of a portion of the original
principal balance of each of these mortgage loans equal to a specified
percentage times the sum of the remaining principal balance of the related
mortgage loan, the accrued interest on it and the related foreclosure expenses.
With respect to 44 mortgage loans in loan group 1 and 14 mortgage loans in loan
group 2, the lender (rather than the borrower) acquired the primary mortgage
guaranty insurance and charged the related borrower an interest premium. After
the date on which the Loan-to-Value Ratio of a mortgage loan is 80% or less,
either because of principal payments on the mortgage loan or because of a new
appraisal of the mortgaged property, no primary mortgage guaranty insurance
policy will be required on that mortgage loan. See "--Underwriting Standards."

     The "Loan-to-Value 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

   o in the case of a purchase, the lesser of the selling price of the
     mortgaged property or its appraised value at the time of sale, or

   o in the case of a refinance, the appraised value of the mortgaged property
     at the time of the 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 generally or in a particular geographic
area decline, the Loan-to-Value Ratios might not be a reliable indicator of the
rates of delinquencies, foreclosures and losses that could occur with respect
to the mortgage loans.

     "FICO Credit Scores" are obtained by many mortgage lenders in connection
with mortgage loan applications to help assess a borrower's credit-worthiness.
FICO Credit Scores are generated by models developed by a third party which
analyze data on consumers in order to establish patterns which are believed to
be indicative of the borrower's probability of default. The FICO Credit Score
is based on a borrower's historical credit data, including, among other things,
payment history, delinquencies on accounts, levels of outstanding indebtedness,
length of credit history, types of credit, and bankruptcy experience. FICO
Credit Scores range from approximately 250 to approximately 900, with higher
scores indicating an individual with a more favorable credit history compared
to an individual with a lower score. However, a FICO Credit Score purports only
to be a measurement of


                                      S-13
<PAGE>

the relative degree of risk a borrower represents to a lender, i.e., that a
borrower with a higher score is statistically expected to be less likely to
default in payment than a borrower with a lower score. In addition, it should
be noted that FICO Credit Scores were developed to indicate a level of default
probability over a two-year period which does not correspond to the life of a
mortgage loan. Furthermore, FICO Credit Scores were not developed specifically
for use in connection with mortgage loans, but for consumer loans in general.
Therefore, a FICO Credit Score does not take into consideration the effect of
mortgage loan characteristics (which may differ from consumer loan
characteristics) on the probability of repayment by the borrower. There can be
no assurance that a FICO Credit Score will be an accurate predictor of the
likely risk or quality of the related mortgage loan.


     The following information sets forth in tabular format information, as of
the cut-off date, as to the mortgage loans in each loan group. Other than with
respect to rates of interest, percentages (approximate) are stated by Stated
Principal Balance of the mortgage loans in the related loan group as of the
cut-off date and have been rounded in order to total 100%.


                                      S-14
<PAGE>

                                 LOAN GROUP 1

                               MORTGAGE RATES(1)



<TABLE>
<CAPTION>
                                           AGGREGATE
                           NUMBER OF       PRINCIPAL
                            MORTGAGE        BALANCE         PERCENT OF
   MORTGAGE RATES (%)        LOANS        OUTSTANDING      LOAN GROUP 1
   ------------------        -----        -----------      ------------
<S>                       <C>           <C>               <C>
 8.001- 8.250 .........          8       $  1,009,147           0.76%
 8.251- 8.500 .........         59          7,964,872           6.03
 8.501- 8.750 .........         76         11,103,221           8.40
 8.751- 9.000 .........        138         19,532,255          14.78
 9.001- 9.250 .........        137         17,462,004          13.21
 9.251- 9.500 .........        174         23,510,464          17.80
 9.501- 9.750 .........        142         17,501,972          13.24
 9.751-10.000 .........        119         13,753,508          10.41
10.001-10.250 .........         57          5,947,045           4.50
10.251-10.500 .........         47          5,725,789           4.33
10.501-10.750 .........         25          2,509,022           1.90
10.751-11.000 .........         20          1,829,417           1.38
11.001-11.250 .........         10            966,495           0.73
11.251-11.500 .........         12          1,045,961           0.79
11.501-11.750 .........          7            891,850           0.67
11.751-12.000 .........         12          1,199,262           0.91
12.001-12.250 .........          1             60,000           0.05
12.251-12.500 .........          1             72,900           0.06
12.751-13.00 ..........          1             59,911           0.05
                               ---       ------------         ------
   Total ..............      1,046       $132,145,095         100.00%
                             =====       ============         ======
</TABLE>

----------
(1)   The lender acquired mortgage insurance mortgage loans in loan group 1 are
      shown in the preceding table at mortgage rates inclusive of the interest
      premium charged by the related lenders. As of the cut-off date, the
      weighted average mortgage rate of the mortgage loans in loan group 1
      without adjusting for the interest premium is expected to be
      approximately 9.481% per annum. If the mortgage rates for the lender
      acquired mortgage insurance loans are shown net of the interest premium
      charged by the related lenders, the weighted average mortgage rate of the
      mortgage loans in loan group 1 is expected to be approximately 9.467% per
      annum.


                                      S-15
<PAGE>

                  CURRENT MORTGAGE LOAN PRINCIPAL BALANCES(1)

<TABLE>
<CAPTION>
                                               AGGREGATE
                               NUMBER OF       PRINCIPAL
 RANGE OF CURRENT MORTGAGE      MORTGAGE        BALANCE         PERCENT OF
  LOAN PRINCIPAL BALANCES        LOANS        OUTSTANDING      LOAN GROUP 1
  -----------------------        -----        -----------      ------------
<S>                           <C>           <C>               <C>
$      0-$ 50,000 .........         87       $  3,470,782           2.63%
$ 50,001-$100,000 .........        338         25,568,217          19.35
$100,001-$150,000 .........        293         36,389,255          27.53
$150,001-$200,000 .........        170         29,266,746          22.15
$200,001-$250,000 .........        124         27,706,232          20.97
$250,001-$300,000 .........         24          6,545,694           4.95
$300,001-$350,000 .........          9          2,842,669           2.15
$350,001-$400,000 .........          1            355,500           0.27
                                 -----       ------------         ------
   Total ..................      1,046       $132,145,095         100.00%
                                 =====       ============         ======
</TABLE>

----------
(1)   As of the cut-off date, the average current mortgage loan principal
      balance of the mortgage loans in loan group 1 is expected to be
      approximately $126,334.


                   DOCUMENTATION PROGRAMS FOR MORTGAGE LOANS

<TABLE>
<CAPTION>
                                              AGGREGATE
                              NUMBER OF       PRINCIPAL
                               MORTGAGE        BALANCE         PERCENT OF
      TYPE OF PROGRAM           LOANS        OUTSTANDING      LOAN GROUP 1
      ---------------           -----        -----------      ------------
<S>                          <C>           <C>               <C>
Full/Alternative .........        493       $ 58,677,731          44.41%
No Ratio .................        100         13,503,241          10.22
Reduced Doc ..............        305         41,960,245          31.75
No Doc ...................        148         18,003,878          13.62
                                -----       ------------         ------
   Total .................      1,046       $132,145,095         100.00%
                                =====       ============         ======
</TABLE>

                       ORIGINAL LOAN-TO-VALUE RATIOS(1)

<TABLE>
<CAPTION>
                                            AGGREGATE
                            NUMBER OF       PRINCIPAL
 ORIGINAL LOAN-TO-VALUE      MORTGAGE        BALANCE         PERCENT OF
       RATIOS (%)             LOANS        OUTSTANDING      LOAN GROUP 1
       ----------             -----        -----------      ------------
<S>                        <C>           <C>               <C>
 Up to 60.00 ...........         34       $  3,572,416           2.70%
60.01- 65.00 ...........         21          2,308,744           1.75
65.01- 70.00 ...........         39          4,129,184           3.12
70.01- 75.00 ...........         69          8,283,520           6.27
75.01- 80.00 ...........        251         32,178,262          24.35
80.01- 85.00 ...........         57          8,166,358           6.18
85.01- 90.00 ...........        378         47,704,120          36.10
90.01- 95.00 ...........        164         21,616,453          16.36
95.01-100.00 ...........         33          4,186,038           3.17
                              -----       ------------         ------
   Total ...............      1,046       $132,145,095         100.00%
                              =====       ============         ======
</TABLE>

----------
(1)   The weighted average original Loan-to-Value Ratio of the mortgage loans
      in loan group 1 is expected to be approximately 84.85%.


                                      S-16
<PAGE>

                          MORTGAGORS' CREDIT SCORES(1)

<TABLE>
<CAPTION>
                                                AGGREGATE
                                NUMBER OF       PRINCIPAL
                                 MORTGAGE        BALANCE         PERCENT OF
        CREDIT SCORES             LOANS        OUTSTANDING      LOAN GROUP 1
        -------------             -----        -----------      ------------
<S>                            <C>           <C>               <C>
600.01-625.00 ..............         64       $  8,529,075           6.45%
625.01-650.00 ..............        316         38,732,703          29.31
650.01-675.00 ..............        255         33,128,635          25.07
675.01-700.00 ..............        181         23,136,469          17.51
700.01-725.00 ..............        107         14,033,194          10.62
725.01-750.00 ..............         62          7,363,801           5.57
750.01-775.00 ..............         42          4,967,459           3.76
775.01-800.00 ..............         15          1,886,343           1.43
800.01-825.00 ..............          3            304,329           0.23
No Score Available .........          1             63,087           0.05
                                  -----       ------------         ------
   Total ...................      1,046       $132,145,095         100.00%
                                  =====       ============         ======
</TABLE>

----------
(1)   The weighted average credit score (where available) of the mortgage loans
      in loan group 1 is expected to be approximately 673.


                 STATE DISTRIBUTION OF MORTGAGED PROPERTIES(1)

<TABLE>
<CAPTION>
                                           AGGREGATE
                           NUMBER OF       PRINCIPAL
                            MORTGAGE        BALANCE         PERCENT OF
         STATE               LOANS        OUTSTANDING      LOAN GROUP 1
         -----               -----        -----------      ------------
<S>                       <C>           <C>               <C>
Arizona ...............         28       $  2,996,118           2.27%
California ............        180         28,206,540          21.35
Colorado ..............         36          4,907,216           3.71
Connecticut ...........         28          3,655,894           2.77
Florida ...............         89          9,358,195           7.08
Massachusetts .........         38          6,290,202           4.76
Michgan ...............         32          2,653,726           2.01
Minnesota .............         23          2,773,443           2.10
New Jersey ............         55          7,662,978           5.80
New York ..............        143         21,501,847          16.27
Texas .................         49          5,148,574           3.90
Utah ..................         22          2,844,329           2.15
Other (1) .............        323         34,146,033          25.83
                             -----       ------------         ------
   Total ..............      1,046       $132,145,095         100.00%
                             =====       ============         ======
</TABLE>

(1)   Other includes 33 other states and the District of Columbia with under 2%
      concentrations individually. No more than approximately 0.52% of the
      mortgage loans in loan group 1 will be secured by Mortgaged Properties
      located in any one postal zip code area.


                                      S-17
<PAGE>

                           PURPOSE OF MORTGAGE LOANS

<TABLE>
<CAPTION>
                                                      AGGREGATE
                                      NUMBER OF       PRINCIPAL
                                       MORTGAGE        BALANCE         PERCENT OF
           LOAN PURPOSE                 LOANS        OUTSTANDING      LOAN GROUP 1
           ------------                 -----        -----------      ------------
<S>                                  <C>           <C>               <C>
Purchase .........................        644       $ 81,177,226          61.43%
Refinance (Rate or Term) .........        110         13,841,459          10.47
Refinance (cash-out) .............        292         37,126,410          28.10
                                        -----       ------------         ------
   Total .........................      1,046       $132,145,095         100.00%
                                        =====       ============         ======
</TABLE>

                         TYPES OF MORTGAGED PROPERTIES

<TABLE>
<CAPTION>
                                                            AGGREGATE
                                            NUMBER OF       PRINCIPAL
                                             MORTGAGE        BALANCE         PERCENT OF
              PROPERTY TYPE                   LOANS        OUTSTANDING      LOAN GROUP 1
              -------------                   -----        -----------      ------------
<S>                                        <C>           <C>               <C>
Single Family ..........................        603       $ 73,958,608          55.98%
Planned Unit Development (PUD) .........         55          7,428,784           5.62
Low-Rise Condo .........................         49          4,521,524           3.42
2-4 Units ..............................        282         41,155,460          31.14
Co-op ..................................         31          1,954,807           1.48
Townhomes ..............................         16          1,905,446           1.44
Highrise Condo .........................         10          1,220,466           0.92
                                              -----       ------------         ------
   Total ...............................      1,046       $132,145,095         100.00%
                                              =====       ============         ======
</TABLE>

                              OCCUPANCY TYPES(1)

<TABLE>
<CAPTION>
                                          AGGREGATE
                          NUMBER OF       PRINCIPAL
                           MORTGAGE        BALANCE         PERCENT OF
    OCCUPANCY TYPE          LOANS        OUTSTANDING      LOAN GROUP 1
    --------------          -----        -----------      ------------
<S>                      <C>           <C>               <C>
Primary Home .........        724       $ 99,429,396          75.24%
Second Home ..........         15          1,738,187           1.32
Investor .............        307         30,977,512          23.44
                            -----       ------------         ------
   Total .............      1,046       $132,145,095         100.00%
                            =====       ============         ======
</TABLE>

----------
(1)   Based upon representations of the related Mortgagors at the time of
      origination.


                         ORIGINAL TERMS TO MATURITY(1)

<TABLE>
<CAPTION>
                                       AGGREGATE
                       NUMBER OF       PRINCIPAL
  ORIGINAL TERM TO      MORTGAGE        BALANCE         PERCENT OF
 MATURITY (MONTHS)       LOANS        OUTSTANDING      LOAN GROUP 1
 -----------------       -----        -----------      ------------
<S>                   <C>           <C>               <C>
240 ...............         11       $    994,308           0.75%
360 ...............      1,035        131,150,787          99.25
                         -----       ------------         ------
   Total ..........      1,046       $132,145,095         100.00%
                         =====       ============         ======
</TABLE>

----------
(1)   As of the cut-off date, the weighted average remaining term to maturity
      of the mortgage loans in loan group 1 is expected to be approximately 359
      months.


                                      S-18
<PAGE>

                                 LOAN GROUP 2
                               MORTGAGE RATES(1)

<TABLE>
<CAPTION>
                                           AGGREGATE
                           NUMBER OF       PRINCIPAL
                            MORTGAGE        BALANCE         PERCENT OF
   MORTGAGE RATES (%)        LOANS        OUTSTANDING      LOAN GROUP 2
   ------------------        -----        -----------      ------------
<S>                       <C>           <C>               <C>
 7.751- 8.000 .........         7        $  4,424,878           2.62%
 8.001- 8.250 .........         7           2,636,299           1.56
 8.251- 8.500 .........        28          10,747,055           6.35
 8.501- 8.750 .........        30          11,491,588           6.79
 8.751- 9.000 .........        64          23,780,056          14.05
 9.001- 9.250 .........        72          27,907,031          16.49
 9.251- 9.500 .........        72          29,064,694          17.19
 9.501- 9.750 .........        61          26,943,416          15.92
 9.751-10.000 .........        31          12,483,029           7.38
10.001-10.250 .........        12           4,546,658           2.69
10.251-10.500 .........        11           4,204,139           2.48
10.501-10.750 .........         3             984,148           0.58
10.751-11.000 .........         8           2,624,724           1.55
11.001-11.250 .........         6           2,500,367           1.48
11.251-11.500 .........         3           1,420,790           0.84
11.501-11.750 .........         6           2,518,868           1.49
11.751-12.000 .........         2             919,230           0.54
                              ---        ------------         ------
   Total ..............       423        $169,196,970         100.00%
                              ===        ============         ======
</TABLE>

----------
(1)   The lender acquired mortgage insurance mortgage loans in loan group 2 are
      shown in the preceding table at mortgage rates inclusive of the interest
      premium charged by the related lenders. As of the cut-off date, the
      weighted average mortgage rate of the mortgage loans in loan group 2
      without adjusting for the interest premium is expected to be
      approximately 9.398% per annum. If the mortgage rates for the lender
      acquired mortgage insurance loans are shown net of the interest premium
      charged by the related lenders, the weighted average mortgage rate of the
      mortgage loans in loan group 2 is expected to be approximately 9.386% per
      annum.


                                      S-19
<PAGE>

                  CURRENT MORTGAGE LOAN PRINCIPAL BALANCES(1)


<TABLE>
<CAPTION>
                                               AGGREGATE
                                 NUMBER OF     PRINCIPAL
   RANGE OF CURRENT MORTGAGE      MORTGAGE      BALANCE       PERCENT OF
    LOAN PRINCIPAL BALANCES        LOANS      OUTSTANDING    LOAN GROUP 2
    -----------------------        -----      -----------    ------------
<S>                             <C>         <C>             <C>
$  250,001-$  300,000 .........     122      $ 33,613,453        19.86%
$  300,001-$  350,000 .........      97        31,486,706        18.61
$  350,001-$  400,000 .........      73        27,391,322        16.19
$  400,001-$  450,000 .........      39        16,681,691         9.86
$  450,001-$  500,000 .........      30        14,472,243         8.55
$  500,001-$  550,000 .........      10         5,283,809         3.12
$  550,001-$  600,000 .........      10         5,820,730         3.44
$  600,001-$  650,000 .........      15         9,456,228         5.59
$  650,001-$  700,000 .........       5         3,420,527         2.02
$  700,001-$  750,000 .........       5         3,686,928         2.18
$  750,001-$  800,000 .........       2         1,569,160         0.93
$  800,001-$  850,000 .........       2         1,651,632         0.98
$  850,001-$  900,000 .........       4         3,486,429         2.06
$  950,001-$1,000,000 .........       4         3,969,344         2.35
$1,050,001-$1,100,000..........       2         2,155,000         1.27
$1,400,001-$1,450,000..........       1         1,433,018         0.85
$1,500,000+ ...................       2         3,618,750         2.14
                                    ---      ------------       ------
 Total ........................     423      $169,196,970       100.00%
                                    ===      ============       ======
</TABLE>

----------
(1)   As of the cut-off date, the average current mortgage loan principal
      balance of the mortgage loans in loan group 2 is expected to be
      approximately $399,993.


                   DOCUMENTATION PROGRAMS FOR MORTGAGE LOANS

<TABLE>
<CAPTION>
                                          AGGREGATE
                            NUMBER OF     PRINCIPAL
                             MORTGAGE      BALANCE       PERCENT OF
      TYPE OF PROGRAM         LOANS      OUTSTANDING    LOAN GROUP 2
      ---------------         -----      -----------    ------------
<S>                        <C>         <C>             <C>
Full/Alternative .........     103      $ 39,670,530        23.45%
No Ratio .................      55        22,774,820        13.46
Reduced Doc ..............     195        81,140,246        47.95
No Doc ...................      70        25,611,374        15.14
                               ---      ------------       ------
 Total ...................     423      $169,196,970       100.00%
                               ===      ============       ======
</TABLE>


                                      S-20
<PAGE>

                       ORIGINAL LOAN-TO-VALUE RATIOS(1)




<TABLE>
<CAPTION>
                                        AGGREGATE
                          NUMBER OF     PRINCIPAL
 ORIGINAL LOAN-TO-VALUE    MORTGAGE      BALANCE       PERCENT OF
       RATIOS (%)           LOANS      OUTSTANDING    LOAN GROUP 2
       ----------           -----      -----------    ------------
<S>                      <C>         <C>             <C>
Up to 60.00 ............      24      $ 11,282,610         6.67%
60.01-65.00 ............      20        13,899,259         8.21
65.01-70.00 ............      41        18,533,130        10.95
70.01-75.00 ............      53        22,898,976        13.53
75.01-80.00 ............     167        63,702,404        37.66
80.01-85.00 ............      12         4,229,093         2.50
85.01-90.00 ............      86        28,488,727        16.84
90.01-95.00 ............      20         6,162,771         3.64
                             ---      ------------       ------
 Total .................     423      $169,196,970       100.00%
                             ===      ============       ======
</TABLE>

----------
(1)   The weighted average original Loan-to-Value Ratio of the mortgage loans
      in loan group 2 is expected to be approximately 76.91%.


                          MORTGAGORS' CREDIT SCORES(1)

<TABLE>
<CAPTION>
                                           AGGREGATE
                           NUMBER OF       PRINCIPAL
                            MORTGAGE        BALANCE         PERCENT OF
     CREDIT SCORES           LOANS        OUTSTANDING      LOAN GROUP 2
     -------------           -----        -----------      ------------
<S>                       <C>           <C>               <C>
600.01-625.00 .........        14        $  4,895,743           2.89%
625.01-650.00 .........        93          37,661,780          22.26
650.01-675.00 .........       109          41,237,306          24.37
675.01-700.00 .........       102          42,615,060          25.19
700.01-725.00 .........        43          18,453,043          10.91
725.01-750.00 .........        30          11,549,869           6.83
750.01-775.00 .........        25          10,230,951           6.05
775.01-800.00 .........         6           2,278,218           1.35
800.01-825.00 .........         1             275,000           0.16
                              ---        ------------         ------
   Total ..............       423        $169,196,970         100.00%
                              ===        ============         ======
</TABLE>

----------
(1)   The weighted average credit score of the mortgage loans in loan group 2
      is expected to be approximately 681.


                                      S-21
<PAGE>

                 STATE DISTRIBUTION OF MORTGAGED PROPERTIES(1)

<TABLE>
<CAPTION>
                                       AGGREGATE
                         NUMBER OF     PRINCIPAL
                          MORTGAGE      BALANCE       PERCENT OF
         STATE             LOANS      OUTSTANDING    LOAN GROUP 2
         -----             -----      -----------    ------------
<S>                     <C>         <C>             <C>
California ............     184      $ 77,934,412        46.06%
Colorado ..............      11         3,779,834         2.23
Georgia ...............      15         6,402,713         3.78
Massachusetts .........      10         3,433,924         2.03
New Jersey ............      30        10,960,178         6.48
New York ..............      71        27,711,650        16.38
Texas .................      18         7,934,001         4.69
Other (1) .............      84        31,040,258        18.35
                            ---      ------------       ------
 Total ................     423      $169,196,970       100.00%
                            ===      ============       ======
</TABLE>

----------
(1)   Other includes 23 other states and the District of Columbia with under 2%
      concentrations individually. No more than approximately 1.26% of the
      mortgage loans in loan group 2 will be secured by Mortgaged Properties
      located in any one postal zip code area.


                           PURPOSE OF MORTGAGE LOANS

<TABLE>
<CAPTION>
                                                  AGGREGATE
                                    NUMBER OF     PRINCIPAL
                                     MORTGAGE      BALANCE       PERCENT OF
           LOAN PURPOSE               LOANS      OUTSTANDING    LOAN GROUP 2
           ------------               -----      -----------    ------------
<S>                                <C>         <C>             <C>
Purchase .........................     274      $104,098,276        61.53%
Refinance (Rate or Term) .........      47        23,789,382        14.06
Refinance (cash-out) .............     102        41,309,312        24.41
                                       ---      ------------       ------
 Total ...........................     423      $169,196,970       100.00%
                                       ===      ============       ======
</TABLE>

                         TYPES OF MORTGAGED PROPERTIES




<TABLE>
<CAPTION>
                                                        AGGREGATE
                                          NUMBER OF     PRINCIPAL
                                           MORTGAGE      BALANCE       PERCENT OF
              PROPERTY TYPE                 LOANS      OUTSTANDING    LOAN GROUP 2
              -------------                 -----      -----------    ------------
<S>                                      <C>         <C>             <C>
Single Family ..........................     320      $127,504,722        75.35%
Planned Unit Development (PUD) .........      64        25,615,088        15.14
Low-Rise Condo .........................       8         2,462,039         1.46
2-4 Units ..............................      19         9,742,906         5.76
Co-op ..................................       1           271,765         0.16
Townhouse ..............................       3         1,177,262         0.70
Highrise Condo .........................       8         2,423,188         1.43
                                             ---      ------------       ------
 Total .................................     423      $169,196,970       100.00%
                                             ===      ============       ======
</TABLE>

                                      S-22
<PAGE>

                              OCCUPANCY TYPES(1)




<TABLE>
<CAPTION>
                                      AGGREGATE
                        NUMBER OF     PRINCIPAL
                         MORTGAGE      BALANCE       PERCENT OF
    OCCUPANCY TYPE        LOANS      OUTSTANDING    LOAN GROUP 2
    ------------------    -----      -----------    ------------
<S>                    <C>         <C>             <C>
Primary Home .........     388      $156,230,721        92.34%
Second Home ..........       9         3,455,156         2.04
Investor .............      26         9,511,093         5.62
                           ---      ------------       ------
 Total ...............     423      $169,196,970       100.00%
                           ===      ============       ======
</TABLE>

----------
(1)   Based upon representations of the related Mortgagors at the time of
      origination.


                         ORIGINAL TERMS TO MATURITY(1)




<TABLE>
<CAPTION>
                                   AGGREGATE
                     NUMBER OF     PRINCIPAL
  ORIGINAL TERM TO    MORTGAGE      BALANCE       PERCENT OF
 MATURITY (MONTHS)     LOANS      OUTSTANDING    LOAN GROUP 2
 -----------------     -----      -----------    ------------
<S>                 <C>         <C>             <C>
240 ...............       2      $    980,000         0.58%
349 ...............       1           299,830         0.18
359 ...............       1           342,000         0.20
360 ...............     419       167,575,140        99.04
                        ---      ------------       ------
 Total ............     423      $169,196,970       100.00%
                        ===      ============       ======
</TABLE>

----------
(1)   As of the cut-off date, the weighted average remaining term to maturity
      of the mortgage loans in loan group 2 is expected to be approximately 359
      months.


ASSIGNMENT OF THE MORTGAGE LOANS

     Pursuant to the pooling and servicing agreement, the depositor on the
closing date will sell, transfer, assign, set over and otherwise convey without
recourse to the trustee in trust for the benefit of the certificateholders all
right, title and interest of the depositor in and to each mortgage loan and all
right, title and interest in and to all other assets included in Residential
Asset Securitization Trust 2000-A6, including all principal and interest
received on or with respect to the mortgage loans, exclusive of any principal
and interest due on or before the cut-off date.

     In connection with such transfer and assignment, the depositor will
deliver or cause to be delivered to the trustee, or a custodian for the
trustee, the mortgage file, which contains among other things, the original
mortgage note (and any modification or amendment to it) 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 mortgage creating a first lien on the related mortgaged
property 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 the mortgage note and mortgage
(except for any documents not returned from the public recording office, which
will be delivered to the trustee as soon as the same is available to the
depositor). With respect to up to 30% of the mortgage loans, the depositor may
deliver all or a portion of each related mortgage file to the trustee not later
than five business days after the closing date. 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 such as California
where, in the opinion of counsel, recording is not required to protect the
trustee's interest in the mortgage loan against the claim of any subsequent
transferee or any successor to or creditor of the depositor or the seller.


                                      S-23
<PAGE>

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

   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 seller in the certificate
     account and held for distribution to the certificateholders on the related
     Distribution Date (a "Substitution Adjustment Amount")),

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

   o have a Loan-to-Value Ratio 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.


UNDERWRITING PROCESS

     IndyMac Bank operates a conduit program established by IndyMac, Inc. (the
entity whose assets were transferred to IndyMac Bank as described herein under
"Servicing of the Mortgage Loans--The Master Servicer") in April 1993 to
purchase conventional conforming and non-conforming mortgage loans on one-to
four-family residential properties. Conventional mortgage loans are loans that
are not insured by the FHA or partially guaranteed by the VA. Conforming
mortgage loans are loans that qualify for sale to Fannie Mae and Freddie Mac,
whereas non-conforming mortgage loans are loans that do not so qualify. While
IndyMac Bank engages in a limited amount of second lien lending, most of the
mortgage loans it purchases are secured by first liens on the related mortgaged
properties.

     Non-conforming loans purchased by IndyMac Bank pursuant to its
underwriting programs typically differ from conforming loans primarily with
respect to loan-to-value ratios, borrower income, required documentation,
interest rates, borrower occupancy of the mortgaged property and/or property
types. To the extent that these programs reflect underwriting standards
different from those of Fannie Mae, Freddie Mac and Ginnie Mae, the performance
of loans made pursuant to these different underwriting standards may reflect
higher delinquency rates and/or credit losses.

     IndyMac Bank purchases mortgage loans from, or provides funding for
mortgage loans originated by, banks, savings and loan associations, mortgage
bankers (which may or may not be affiliated with IndyMac Bank) and mortgage
brokers (each is referred to as a loan originator). Each loan originator must
be an approved HUD mortgagee in good standing or a seller/servicer in good
standing and approved by either Fannie Mae or Freddie Mac. IndyMac Bank
approves individual institutions as eligible loan originators after an
evaluation of criteria that include the loan originator's mortgage


                                      S-24
<PAGE>

origination experience and financial stability. In addition to purchasing
mortgage loans from (or providing funding to) loan originators, IndyMac Bank
also engages in the direct origination of mortgage loans.

     IndyMac Bank currently operates two mortgage loan purchase programs as
part of its conduit operations:

     1. Prior Approval Program. Under this program, IndyMac Bank performs a
full credit review and analysis of each mortgage loan to be purchased to ensure
compliance with its underwriting guidelines. Only after IndyMac Bank issues an
approval notice to a loan originator is a mortgage loan eligible for purchase
pursuant to this program. The majority of mortgage loans currently being
purchased by IndyMac Bank are originated under the Prior Approval Program.

     2. Preferred Delegated Underwriting Program. Under this program, loan
originators which meet certain eligibility requirements are allowed to
underwrite mortgage loans for purchase without the need for either prior pool
insurance approval or prior IndyMac Bank approval. The eligibility requirements
for participation in the Preferred Delegated Underwriting Program vary based on
the net worth of the loan originators with more stringent requirements imposed
on loan originators with a lower net worth. Under the Preferred Delegated
Underwriting Program, each eligible loan originator is required to underwrite
mortgage loans in compliance with IndyMac Bank's underwriting guidelines, as
the underwriting guidelines may have been modified pursuant to commitments
negotiated with that loan originator. A greater percentage of mortgage loans
purchased pursuant to this program are selected for post-purchase quality
control review than for the other two programs. Notwithstanding the loan
originator's status as an eligible loan originator, some types of mortgage
loans are required to receive an approval notice prior to purchase.

     All mortgage loans purchased by IndyMac Bank must meet credit, appraisal
and underwriting standards acceptable to IndyMac Bank. These underwriting
standards, including any negotiated modifications to them, are applied to
evaluate the prospective borrower's credit standing and repayment ability and
the value and adequacy of the mortgaged property as collateral. These standards
are applied in accordance with applicable federal and state laws and
regulations. Exceptions to these underwriting standards are permitted where
compensating factors are present or in the context of negotiated bulk
purchases. In addition, the requirements of a mortgage pool insurer may differ
from these underwriting standards as a result of which mortgage loans certified
by such mortgage pool insurer may not comply with these underwriting standards.


     In the process of underwriting mortgage loans, IndyMac Bank generally uses
its "electronic Mortgage Information and Transaction System" (or "e-MITS"), a
proprietary, internet-based, point-of-sale automated underwriting and
risk-based pricing system to underwrite and price the mortgage loans. This
system uses proprietary credit and risk analysis information generated from
statistical analysis of IndyMac Bank's historical database of over 300,000
loans to determine the economic levels at which a given loan should be
approved. The system also incorporates information from models provided by
credit rating agencies. e-MITS analyzes over forty data elements relating to
the mortgagor and the mortgaged property before rendering an approval and a
risk-based price. As with IndyMac Bank's traditional underwriting process, this
approval is subject to full and complete data verification. Loans approved by
e-MITS generally comply with IndyMac Bank's underwriting guidelines. However,
as is the case with loans that are not underwritten through e-MITS, exceptions
to standard underwriting guidelines are permitted where compensating factors
are present or in the context of negotiated bulk purchases.

     IndyMac Bank's underwriting standards for purchase money or rate/term
refinance loans secured by primary residences generally allow Loan-to-Value
Ratios at origination of up to 95% for mortgage loans with original principal
balances of up to $400,000, up to 90% for mortgage loans with original
principal balances of up to $650,000, up to 85% for mortgage loans with
original principal balances of up to $750,000 and up to 80% for mortgage loans
with original principal balances of up to $1,500,000. IndyMac Bank also
acquires mortgage loans with principal balances up to $3,000,000 if the
mortgage loan is secured by the borrower's primary residence. The Loan-to-Value
Ratio for mortgage loans with


                                      S-25
<PAGE>

principal balances up to $3,000,000 generally may not exceed 80%. For cash-out
refinance loans, the maximum Loan-to-Value Ratio generally is 95%, and the
maximum "cash out" amount permitted is based in part on the Loan-to-Value Ratio
of the related mortgage loan. IndyMac Bank generally does not purchase cash-out
refinance mortgage loans with original principal balances in excess of
$3,000,000.

     IndyMac Bank's underwriting standards for mortgage loans secured by
investor properties generally allow Loan-to-Value Ratios at origination of up
to 95% for mortgage loans with original principal balances up to $300,000.
IndyMac Bank's underwriting standards permit mortgage loans secured by investor
properties to have higher original principal balances if they have lower
Loan-to-Value Ratios at origination.

     For each mortgage loan with a Loan-to-Value Ratio at origination exceeding
80%, IndyMac Bank generally requires a primary mortgage guarantee insurance
policy that conforms to the guidelines of Fannie May and Freddie Mac. After the
date on which the Loan-to-Value Ratio of a mortgage loan is 80% or less, either
because of principal payments on the mortgage loan or because of a new
appraisal of the mortgaged property, no primary mortgage guaranty insurance
policy will be required on that mortgage loan.

     All of the insurers which have issued primary mortgage guaranty insurance
policies with respect to the mortgage loans meet Fannie Mae's or Freddie Mac's
standards or are acceptable to the Rating Agencies. In some circumstances,
however, IndyMac Bank does not require primary mortgage guaranty insurance on
mortgage loans with principal balances up to $500,000 that have Loan-to-Value
Ratios greater than 80% but less than or equal to 95%. All residences except
cooperatives and certain high-rise condominium dwellings are eligible for this
program. Each qualifying mortgage loan will be made at an interest rate that is
higher than the rate would be if the Loan-to-Value Ratio was 80% or less or if
primary mortgage guaranty insurance was obtained. Under those circumstances,
the certificateholders will not have the benefit of primary mortgage guaranty
insurance coverage.

     In determining whether a prospective borrower has sufficient monthly
income available (1) to meet the borrower's monthly obligation on the proposed
mortgage loan and (2) to meet monthly housing expenses and other financial
obligations including the borrower's monthly obligations on the proposed
mortgage loan, IndyMac Bank generally considers the ratio of these amounts to
the proposed borrower's acceptable stable monthly gross income. These ratios
vary depending on a number of underwriting criteria, including Loan-to-Value
Ratios, and are determined on a loan-by-loan basis.

     IndyMac Bank purchases loans which have been originated under one of four
documentation programs: the Full/Alternate Documentation Program, the Reduced
Documentation Program, the No Ratio Program and the No Doc Program.

     Under the Full/Alternate Documentation Program, the prospective borrower's
employment, income and assets are verified through written or telephonic
communications. All loans may be submitted under the Full/Alternate
Documentation Program. The Full/Alternate Documentation Program also provides
for alternative methods of employment verification generally using W-2 forms or
pay stubs.

     Under the Reduced Documentation Program and the No Ratio Program, more
emphasis is placed on the prospective borrower's credit score and on the value
and adequacy of the mortgaged property as collateral and other assets of the
prospective borrower than on income underwriting. The Reduced Documentation
Program requires prospective borrowers to provide information regarding their
assets and income. Information regarding assets is verified through written
communications. Information regarding income is not verified. The No Ratio
Program requires prospective borrowers to provide information regarding their
assets, which is then verified through written communications. The No Ratio
Program does not require prospective borrowers to provide information regarding
their income.


                                      S-26
<PAGE>

     Under the No Doc Program, emphasis is placed on the credit score of the
prospective borrower and on the value and adequacy of the mortgaged property as
collateral, rather than on the income and the assets of the prospective
borrower. Prospective borrowers are not required to provide information
regarding their assets or income under the No Doc Program. Mortgage loans
underwritten under each of the Reduced Documentation Program, the No Ratio
Program and the No Doc Program are generally limited to borrowers with credit
histories that demonstrate an established ability to repay indebtedness in a
timely fashion.


REPRESENTATIONS BY SELLER; REPURCHASES, ETC.


     In the event of a breach of any representation or warranty in respect of a
mortgage loan that materially and adversely affects the interests of the
certificateholders, the seller will be obligated, in accordance with the
pooling and servicing agreement, to cure that breach, to repurchase the
mortgage loan at the purchase price or to substitute a qualified mortgage loan
for the mortgage loan. See "Mortgage Loan Program--Representations by Sellers;
Repurchases" in the prospectus. If, however, the substance of such breach
constitutes fraud in the origination of such mortgage loan and the seller, at
the time of such origination and on the Closing Date, had no actual knowledge
of the fraud, the seller shall have no obligation to cure such breach or to
repurchase or substitute for the mortgage loan.


                                      S-27
<PAGE>

                          SERVICING OF MORTGAGE LOANS


THE MASTER SERVICER

     IndyMac Bank will act as master servicer. The principal executive offices
of the master servicer are located at 155 North Lake Avenue, Pasadena,
California 91101. IndyMac Bank is a wholly-owned subsidiary of IndyMac
Intermediate Holdings, Inc., which is a wholly-owned subsidiary of IndyMac
Bancorp, Inc.

     Effective July 1, 2000, IndyMac Mortgage Holdings, Inc. ("Holdings")
acquired SGV Bancorp, the holding company of First Federal Savings and Loan
Association of San Gabriel Valley ("First Federal"). In connection with that
acquisition, IndyMac, Inc., the wholly-owned mortgage banking subsidiary of
Holdings, was merged with and into SGV Bancorp and SGV Bancorp contributed
substantially all of its assets and liabilities (including the servicing
platform and all of the related servicing operations of the former IndyMac,
Inc., together with substantially all of its personnel) to First Federal. Also
in connection with the acquisition, Holdings changed its name to IndyMac
Bancorp, Inc.; SGV Bancorp changed its name to IndyMac Intermediate Holdings,
Inc. and First Federal changed its name to IndyMac Bank, F.S.B.

     The master servicer will be responsible for servicing the mortgage loans
in accordance with the terms set forth in the pooling and servicing agreement
employing the same degree of skill and care which it employs in servicing other
mortgage loans comparable to the mortgage loans serviced by the master servicer
for itself or others. The master servicer may perform its servicing obligations
under the pooling and servicing agreement through one or more subservicers
selected by the master servicer. Notwithstanding any subservicing arrangement,
the master servicer will remain liable for its servicing duties and obligations
under the pooling and servicing agreement as if the master servicer alone were
servicing the mortgage loans.

     During the first half of 1998, the former IndyMac, Inc. acquired the
assets of a servicing platform (i.e., servicing business operations but not
mortgage loans) from First of America Loan Services, Inc. in order to provide
IndyMac, Inc. with direct servicing capabilities with respect to mortgage
loans. Prior to that time, IndyMac, Inc. had master servicing capabilities but
no direct servicing capabilities. In connection with the acquisition of SGV
Bancorp, the servicing platform of First of America Loan Services, Inc. was
contributed to IndyMac Bank. As of the closing date, it is expected that
IndyMac Bank will directly service approximately 99.60% of the mortgage loans
in loan group 1 and 100% of the mortgage loans in loan group 2 (by principal
balance as of the cut-off date). With respect to the other mortgage loans in
the mortgage pool, as of the closing date, it is expected that IndyMac Bank
will perform its servicing obligations under the pooling and servicing
agreement through one or more subservicers.

     If the servicing of any mortgage loan were to be transferred from a
subservicer to IndyMac Bank, or if any other servicing transfer were to occur,
there may be an increase in delinquencies and defaults due to misapplied or
lost payments, data input errors, system incompatibilities or otherwise.
Although any increase in delinquencies is expected to be temporary, there can
be no assurance as to the duration or severity of any disruption in servicing
the applicable mortgage loans as a result of any servicing transfer.


FORECLOSURE, DELINQUENCY AND LOSS EXPERIENCE

     IndyMac, Inc. commenced master servicing conventional mortgage loans
during April 1993 and commenced servicing conventional mortgage loans during
August 1998. In connection with the acquisition of SGV Bancorp, the master
servicing and servicing operations of the former IndyMac, Inc. were contributed
to IndyMac Bank, resulting in IndyMac Bank performing the master servicing and
servicing operations previously performed by IndyMac, Inc.

     The delinquency, foreclosure and loss percentages set forth in the tables
below may be affected by the size and relative lack of seasoning of the master
servicing and servicing portfolio.


                                      S-28
<PAGE>

Delinquencies, foreclosures and losses generally are expected to occur more
frequently after the first full year of the life of mortgage loans.
Accordingly, because a large number of mortgage loans serviced by the master
servicer have been recently originated, the current level of delinquencies,
foreclosures and losses may not be representative of the levels which may be
experienced over the lives of such mortgage loans. If the volume of IndyMac
Bank's new loan originations and acquisitions does not continue to grow at the
rate experienced in recent years, the levels of delinquencies, foreclosures and
losses as percentages of the portfolio could rise significantly above the rates
indicated in the tables.

     In addition, because IndyMac Bank only recently began directly servicing
mortgage loans, the foreclosure, delinquency and loss experience set forth
below may not be indicative of IndyMac Bank's foreclosure, delinquency and loss
experience for future periods. Accordingly, the information presented in the
tables below (which includes mortgage loans with underwriting, payment and
other characteristics which differ from those of the Mortgage Loans) should not
be considered as a basis for assessing the likelihood, amount or severity of
delinquency or losses on the Mortgage Loans, and no assurances can be given
that the foreclosure, delinquency and loss experience presented in these tables
will be indicative of such experience on the Mortgage Loans in the future.

     The following table summarizes the delinquency and foreclosure experience,
respectively, as of December 31, 1997, December 31, 1998, December 31, 1999 and
June 30, 2000 on approximately $12.3 billion, $16.9 billion, $13.8 billion and
$16.0 billion, respectively, in outstanding principal balance of conventional
mortgage loans master serviced or serviced by IndyMac Bank (does not include
loans that were part of First Federal's portfolio prior to its acquisition by
IndyMac Bancorp):




<TABLE>
<CAPTION>
                                                                    AS OF DECEMBER 31,              AS OF
                                                            -----------------------------------    JUNE 30,
                                                               1997         1998        1999         2000
                                                               ----         ----        ----         ----
<S>                                                          <C>         <C>          <C>         <C>
Total Number of Conventional Mortgage Loans in Portfolio      80,572      112,207      94,137      107,767
Delinquent Mortgage Loans and Pending Foreclosures at
 Period End(1):
   30-59 days .........................................         2.40%        2.74%       2.48%        2.11%
   60-89 days .........................................         0.54%        0.65%       0.47%        0.50%
   90 days or more (excluding pending foreclosures) ...         0.95%        0.73%       0.55%        0.31%
                                                              ------      -------      ------      -------
    Total Delinquencies ...............................         3.89%        4.12%       3.50%        2.92%
                                                              ======      =======      ======      =======
Foreclosures pending ..................................         0.56%        0.64%       1.20%        1.48%
                                                              ------      -------      ------      -------
    Total delinquencies and foreclosures pending ......         4.45%        4.76%       4.70%        4.40%
                                                              ======      =======      ======      =======
</TABLE>

----------
(1)   As a percentage of the total number of loans master serviced.

     The following table summarizes the loss experience on the dates indicated
of all mortgage loans originated or acquired by IndyMac Bank (other than
subprime mortgage loans), serviced or master serviced by the master servicer
and securitized by the depositor (does not include loans that were part of
First Federal's portfolio prior to its acquisition by IndyMac Bancorp):




<TABLE>
<CAPTION>
                                                             CUMULATIVE STATED
                                       CUMULATIVE NET      AMOUNT OF SECURITIES       LOSS
                                     LOSSES (MILLIONS)       ISSUED (MILLIONS)      RATIO(1)
                                     -----------------       -----------------      --------
<S>                                 <C>                   <C>                      <C>
As of December 31, 1997 .........         $ 18.03              $ 15,925.04            0.11%
As of December 31, 1998 .........         $ 39.98              $ 23,890.80            0.17%
As of December 31, 1999 .........         $ 51.05              $ 26,719.61            0.19%
As of June 30, 2000 .............         $ 57.48              $ 27,771.85            0.21%
</TABLE>

----------
(1)   Loss Ratio represents cumulative net losses as a percentage of the
      aggregate amount of securities issued.


                                      S-29
<PAGE>

     Historically, a variety of factors, including the appreciation of real
estate values, has limited the master servicer's loss and delinquency
experience on its portfolio of serviced mortgage loans. There can be no
assurance that factors beyond the master servicer's control, such as national
or local economic conditions or downturns in the real estate markets of its
lending areas, will not result in increased rates of delinquencies and
foreclosure losses in the future. For example, a general deterioration of the
real estate market in regions where the mortgaged properties are located may
result in increases in delinquencies of loans secured by real estate, slower
absorption rates of real estate into the market and lower sales prices for real
estate. A general weakening of the economy may result in decreases in the
financial strength of borrowers and decreases in the value of collateral
serving as collateral for loans. If the real estate market and economy continue
to decline, the master servicer may experience an increase in delinquencies on
the loans it services and higher net losses on liquidated loans.


SERVICING COMPENSATION AND PAYMENT OF EXPENSES

     The expense fees with respect to each loan group in the mortgage pool are
payable out of the interest payments on each mortgage loan. The expense fees
will vary from mortgage loan to mortgage loan. The rate at which the expense
fees accrue (referred to as the expense fee rate) is expected to range from
0.300% to 0.880% per annum of the Stated Principal Balance of each mortgage
loan. As of the cut-off date, the weighted average expense fee rate is expected
to equal approximately 0.313%. The expense fees consist of (a) master servicing
compensation in the amount of 0.041% per annum of the Stated Principal Balance
of each Mortgage Loan, (b) servicing compensation that is expected to range
from 0.250% to 0.830% per annum of the Stated Principal Balance of each
Mortgage Loan and (c) fees payable to the trustee in respect of its activities
as trustee under the pooling and servicing agreement. In cases where a mortgage
loan is being directly serviced by the master servicer, the master servicer
will be entitled to the master servicing fee and the servicing fee. In cases
where a mortgage loan is being directly serviced by a subservicer, the
subservicer will be entitled to the servicing fee and the master servicer will
only be entitled to the master servicing fee. The master servicer is obligated
to pay certain ongoing expenses associated with the trust fund and incurred by
the master servicer in connection with its responsibilities under the pooling
and servicing agreement and those amounts will be paid by the master servicer
out of its fee. The amount of the master servicer's servicing compensation is
subject to adjustment with respect to prepaid mortgage loans, as described
herein under "--Adjustment to Servicing Compensation in Connection with Certain
Prepaid Mortgage Loans." The master servicer will also be entitled to receive
late payment fees, prepayment penalties, assumption fees and other similar
charges. The master servicer will be entitled to receive all reinvestment
income earned on amounts on deposit in the certificate account and the
distribution account. The adjusted net mortgage rate of a mortgage loan is the
mortgage loan's mortgage rate (net of the interest premium charged by the
related lenders for any lender acquired primary mortgage insurance) minus the
related expense fee rate.


ADJUSTMENT TO SERVICING COMPENSATION IN CONNECTION WITH CERTAIN PREPAID
   MORTGAGE LOANS

     When a borrower prepays a mortgage loan between Due Dates, the borrower is
required to pay interest on the amount prepaid only to the date of prepayment
and not thereafter. Similarly, if the master servicer purchases a mortgage loan
as described under "--Certain Modifications and Refinancings," the trust fund
is entitled to the interest paid by the borrower only to the date of purchase.
Principal prepayments by borrowers received during a calendar month will be
distributed to certificateholders on the distribution date in the month
following the month of receipt. To offset any interest shortfall to
certificateholders as a result of any prepayments, the master servicer will be
required to reduce its servicing compensation, but the reduction for any
Distribution Date will be limited to an amount equal to the product of

      o  0.125% multiplied by

      o  one-twelfth multiplied by

      o  the pool balance as of the first day of the prior month.

                                      S-30
<PAGE>

     If shortfalls in interest as a result of prepayments in any month exceed
the reduction in the amount of the servicing compensation for such month, the
amount of interest available to be distributed to certificateholders will be
reduced by the amount of the excess.


ADVANCES

     Except as described below, the master servicer will be required to advance
prior to each Distribution Date, from its own funds or amounts received with
respect to the mortgage loans that do not constitute Available Funds for this
Distribution Date, an amount (referred to as an "advance") equal to

    o  all of the payments of principal and interest on the mortgage loans due
       but delinquent as of the "Determination Date" (which will be the 18th of
       the month or, if the 18th is not a business day, the next business day
       after the 18th of the month)

     minus

    o  the total of

    o  the master servicing fee for the related period and

    o  the applicable servicing fee for the related period

     plus

    o  an amount equivalent to interest on each mortgage loan as to which the
       related mortgaged property has been acquired by the trust fund (through
       foreclosure or deed-in-lieu of foreclosure).

     Advances are intended to maintain a regular flow of scheduled interest and
principal payments on the certificates rather than to guarantee or insure
against losses. The master servicer is obligated to make advances with respect
to delinquent payments of principal of or interest on each mortgage loan only
to the extent that such advances made on that mortgage loan are, in its
reasonable judgment, recoverable from future payments and collections or
insurance payments or proceeds of liquidation of the related mortgage loan. If
the master servicer determines on any Determination Date to make an advance,
that advance will be included with the distribution to certificateholders on
the related Distribution Date. Any failure by the master servicer to make a
deposit in the certificate account as required under the pooling and servicing
agreement, including any failure to make an advance, will constitute an event
of default under the pooling and servicing agreement if such failure remains
unremedied for five days after written notice thereof. If the master servicer
is terminated as a result of the occurrence of an event of default, the trustee
or the successor master servicer will be obligated to make any required
advance, in accordance with the terms of the pooling and servicing agreement.


CERTAIN MODIFICATIONS AND REFINANCINGS

     The master servicer may modify any mortgage loan upon the request of the
related mortgagor, provided that the master servicer purchases the mortgage
loan from the trust fund immediately following the modification. Any
modification of a mortgage loan may not be made unless the modification
includes a change in the interest rate on the related mortgage loan to
approximately a prevailing market rate. Any purchase of a mortgage loan subject
to a modification will be for a price equal to 100% of the Stated Principal
Balance of that mortgage loan, plus accrued and unpaid interest on the mortgage
loan up to the date of purchase at the applicable adjusted net mortgage rate,
net of any unreimbursed advances of principal and interest on the mortgage loan
made by the master servicer. The master servicer will deposit the purchase
price in the certificate account within one business day of the purchase of
that mortgage loan. Purchases of mortgage loans may occur when prevailing
interest rates are below the interest rates on the mortgage loans and
mortgagors request modifications as an alternative to refinancings. The master
servicer will indemnify the trust fund against liability for any prohibited
transactions taxes and any related interest, additions or penalties imposed on
the REMIC as a result of any modification or purchase.


                                      S-31
<PAGE>

DEFAULT MANAGEMENT SERVICES

     In connection with the servicing of defaulted mortgage loans, the master
servicer may perform certain default management and other similar services
(including, but not limited to, appraisal services) and may act as a broker in
the sale of mortgaged properties related to those mortgage loans. The master
servicer will be entitled to reasonable compensation for providing those
services.


SPECIAL SERVICING AGREEMENTS

     The pooling and servicing agreement may permit the master servicer to
enter into a special servicing agreement with an unaffiliated holder of one or
more classes of subordinated certificates or of a class of securities
representing interests in one or more classes of subordinated certificates.
Pursuant to such an agreement, that certificateholder may instruct the master
servicer to commence or delay foreclosure proceedings with respect to
delinquent mortgage loans. A commencement or delay of foreclosure proceedings
at that certificateholder's direction will be taken by the master servicer only
after that certificateholder deposits a specified amount of cash with the
master servicer. The deposited cash will be available for distribution to
certificateholders if liquidation proceeds are less than they otherwise may
have been had the master servicer acted pursuant to its normal servicing
procedures.


                        DESCRIPTION OF THE CERTIFICATES


GENERAL

     The certificates will be issued pursuant to the pooling and servicing
agreement. The following summaries of the material terms pursuant to which the
certificates will be issued do not purport to be complete and are subject to,
and are qualified in their entirety by reference to, the provisions of the
pooling and servicing agreement. When particular provisions or terms used in
the pooling and servicing agreement are referred to, the actual provisions
(including definitions of terms) are incorporated by reference. The
certificates represent obligations of the trust only and do not represent an
interest in or obligation of CWMBS, Inc., IndyMac Bank, F.S.B. or any of their
affiliates.

     The Mortgage Pass-Through Certificates, Series 2000-F will consist of the
Class CB-1, Class NB-1, Class NB-2, Class NB-3, Class PO, Class X and Class A-R
Certificates, all of which are referred to as senior certificates, and the
Class B-1, Class B-2, Class B-3, Class B-4, Class B-5 and Class B-6
Certificates, all of which are referred to as subordinated certificates. Only
the classes of certificates listed on the cover page are offered by this
prospectus supplement. The Class B-4, Class B-5 and Class B-6 Certificates are
not offered by this prospectus supplement. Their Class Certificate Balances are
expected to be approximately $2,863,000, $1,055,000 and $2,561,449,
respectively. The classes of offered certificates will have the respective
initial Class Certificate Balances or initial Notional Amounts and pass-through
rates set forth on the cover page or described in this prospectus supplement
under "--Interest" below. The pass-through rate for each of the Class B-4,
Class B-5 and Class B-6 Certificates will be 8.00%. The initial Class
Certificate Balances may vary in the aggregate by plus or minus 5%.

     The "Class Certificate Balance" of any class of certificates as of any
Distribution Date is the initial Class Certificate Balance of the class reduced
by the sum of

    o  all amounts previously distributed to holders of certificates of the
       class as payments of principal,

    o  the amount of Realized Losses (including Excess Losses) allocated to the
       class and

    o  in the case of any class of subordinated certificates, any amounts
       allocated to the class in reduction of its Class Certificate Balance in
       respect of payments of Class PO Deferred Amounts, as described under
       "--Allocation of Losses."

     In addition, the Class Certificate Balance of the class of subordinated
certificates then outstanding with the highest numerical class designation will
be reduced if and to the extent that the aggregate of


                                      S-32
<PAGE>

the Class Certificate Balances of all classes of certificates, following all
distributions and the allocation of Realized Losses on a Distribution Date,
exceeds the pool principal balance as of the Due Date occurring in the month of
the Distribution Date. The classes of notional amount certificates do not have
principal balances and are not entitled to any distributions in respect of
principal of the mortgage loans.

     The senior certificates will have an initial aggregate principal balance
of approximately $277,234,616 and will evidence in the aggregate an initial
beneficial ownership interest of approximately 92.00% in the trust fund. The
Class B-1, Class B-2, Class B-3, Class B-4, Class B-5 and Class B-6
Certificates will each evidence in the aggregate an initial beneficial
ownership interest of approximately 2.75%, 1.95%, 1.15%, 0.95%, 0.35% and
0.85%, respectively, in the trust fund.

     The Class PO, Class X, Class A-R, Class B-4, Class B-5 and Class B-6
Certificates will be issued in fully registered certificated form. All of the
remaining classes of certificates will be represented by book-entry
certificates. The book-entry certificates will be issuable in book-entry form
only. The Class A-R Certificates will be issued as a single certificate in a
denomination of $100.


SENIOR CERTIFICATE GROUPS

     The Class CB-1 Certificates and the Class CB-PO and Class CB-X Components
are sometimes referred to herein as the "group 1 senior certificates," and the
Class A-R, Class NB-1, Class NB-2 and Class NB-3 Certificates and the Class
NB-PO and Class NB-X Components are sometimes referred to herein as the "group
2 senior certificates." The group 1 senior certificates and the group 2 senior
certificates are each sometimes referred to as a "senior certificate group" and
relate to loan group 1 and loan group 2, respectively.


COMPONENT CLASSES

     1. Class PO Certificates. Solely for purposes of calculating distributions
and allocating losses, the Class PO Certificates will be made up of multiple
components having the designations and initial component balances set forth
below:


<TABLE>
<CAPTION>
                                       INITIAL COMPONENT
DESIGNATION                                 BALANCE
-----------                                 -------
<S>                                   <C>
      Class CB-PO Component .........      $  6,307
      Class NB-PO Component .........      $245,209
</TABLE>

     The component balance with respect to any component as of any Distribution
Date is the initial component balance thereof on the closing date, reduced by
all amounts applied and losses allocated in reduction of the principal balance
of such component on previous Distribution Dates.

     The Class Certificate Balance of the Class PO Certificates will be equal
to the aggregate of the component balances of the related components described
above. The components comprising a class of component certificates will not be
separately transferable from such class of certificates. As used in this
prospectus supplement, Class PO Component shall mean the Class CB-PO Component
or the Class NB-PO Component, as applicable.

     2. Class X Certificates. Solely for purposes of calculating distributions
and allocating losses, the Class X Certificates will be made up of the Class
CB-X Component and the Class NB-X Component. The component notional amount of
each of the Class CB-X and Class NB-X Components for any Distribution Date will
be equal to the aggregate of the Stated Principal Balances of the Non-Discount
mortgage loans in the related loan group with respect to such Distribution
Date. The initial component notional amount of each of the Class CB-X and Class
NB-X Components will be equal to the aggregate of the Stated Principal Balances
of the Non-Discount mortgage loans in the related loan group as of the cut-off
date and is expected to be approximately $131,135,948 and $161,544,518,
respectively. The Notional Amount of the Class X Certificates for any
Distribution Date will be equal to the sum of the component notional amounts of
the Class CB-X and Class NB-X Components for such Distribution Date. The
initial Notional Amount of the Class X Certificates is expected to be


                                      S-33
<PAGE>

approximately $292,680,466. The components comprising a class of component
certificates will not be separately transferable from such class of
certificates. As used in this prospectus supplement, Class X Component shall
mean the Class CB-X Component or the Class NB-X Component, as applicable.


BOOK-ENTRY CERTIFICATES

     The offered certificates (other than the Class PO, Class X and Class A-R
Certificates) will be issued as book-entry certificates. Each class of
book-entry certificates will be issued as one or more certificates which equal
the aggregate initial Class Certificate Balance of each class of certificates
and which will be held by a depository, initially a nominee of The Depository
Trust Company ("DTC"). Beneficial interests in the book-entry certificates will
be held indirectly by investors through the book-entry facilities of the
depository, as described in this prospectus supplement. Investors may hold the
beneficial interests in the book-entry certificates in minimum denominations
representing an original principal amount or original notional amount of
$25,000 and integral multiples of $1,000 in excess thereof. One investor of
each class of book-entry certificates may hold a beneficial interest in that
class that is not an integral multiple of $1,000. The depositor has been
informed by the depository that its nominee will be CEDE & Co. Accordingly,
CEDE is expected to be the holder of record of the book-entry certificates.
Except as described in the prospectus under "Description of the Certificates--
Book-Entry Certificates," no beneficial owner acquiring a book-entry
certificate will be entitled to receive a physical certificate representing the
certificate.

     Unless and until definitive certificates are issued, it is anticipated
that the only certificateholder of the book-entry certificates will be CEDE, as
nominee of the depository. Beneficial owners of the book-entry 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 financial intermediaries and
the depository. Monthly and annual reports on the trust fund provided to CEDE,
as nominee of the depository, may be made available to beneficial owners upon
request, in accordance with the rules, regulations and procedures creating and
affecting the depository, and to the financial intermediaries to whose
depository accounts the book-entry certificates of the beneficial owners are
credited.

     For a description of the procedures generally applicable to the book-entry
certificates, see "Description of the Certificates--Book-Entry Certificates" in
the prospectus.

     Although DTC has agreed to the foregoing procedures in order to facilitate
transfers of certificates among participants of DTC, they are under no
obligation to perform or continue to perform such procedures and such
procedures may be discontinued at any time.


PAYMENTS ON MORTGAGE LOANS; ACCOUNTS

     On or before the closing date, the master servicer will establish an
account (the "Distribution Account"), which will be maintained with the trustee
in trust for the benefit of the certificateholders. On or before the business
day immediately preceding each Distribution Date, the master servicer will
withdraw from the certificate account the amount of Available Funds for each
loan group and will deposit the Available Funds in the Distribution Account.
Funds credited to the certificate account or the Distribution Account may be
invested for the benefit and at the risk of the master servicer in Permitted
Investments, as defined in the pooling and servicing agreement, that are
scheduled to mature on or before the business day preceding the next
Distribution Date.


DISTRIBUTIONS

     Distributions on the certificates will be made by the trustee on the 25th
day of each month or, if that day is not a business day, on the first business
day thereafter, commencing in September 2000 (each, a "Distribution Date"), to
the persons in whose names the certificates are registered at the close of
business on the last business day of the month preceding the month of the
Distribution Date.

     Distributions on each Distribution Date will be made by check mailed to
the address of the person entitled to it as it appears on the applicable
certificate register or, in the case of a


                                      S-34
<PAGE>

certificateholder who holds 100% of a class of certificates or who holds
certificates with an aggregate initial certificate balance of $1,000,000 or
more or who holds a notional amount certificate and who has so notified the
trustee in writing in accordance with the pooling and servicing agreement, by
wire transfer in immediately available funds to the account of the
certificateholder at a bank or other depository institution having appropriate
wire transfer facilities; provided, however, that the final distribution in
retirement of the certificates will be made only upon presentment and surrender
of the certificates at the Corporate Trust Office of the trustee.


PRIORITY OF DISTRIBUTIONS AMONG CERTIFICATES

     As more fully described herein, on each Distribution Date distributions on
the group 1 senior certificates and the group 2 senior certificates will be,
except as provided below, based on the Available Funds of the related loan
group for such Distribution Date, and distributions on the subordinated
certificates will be based on any remaining Available Funds of both loan groups
for such Distribution Date, in each case after giving effect to distributions
on all classes of senior certificates and payments in respect of Class PO
Deferred Amounts, and will be made in the following order of priority:

    o  to interest on each interest bearing class and component of senior
       certificates relating to each loan group;

    o  to principal on the classes or components of senior certificates
       relating to each loan group then entitled to receive distributions of
       principal, in the order and subject to the priorities set forth under
       "Description of the Certificates--Principal," in each case in an
       aggregate amount up to the maximum amount of principal to be distributed
       on the classes on the Distribution Date;

    o  to any Class PO Deferred Amounts with respect to the applicable Class
       PO Component, but only from amounts that would otherwise be distributed
       on the Distribution Date as principal of the subordinated certificates;
       and

    o  to interest on and then principal of each class of subordinated
       certificates, in the order of their numerical class designations,
       beginning with the Class B-1 Certificates, in each case subject to the
       limitations set forth under "Description of the Certificates--Principal."


     Notwithstanding the foregoing, if on any Distribution Date Available Funds
for a loan group are insufficient to make distributions of interest and
principal with respect to the related senior certificate group and payments in
respect of the Class PO Deferred Amounts (the "supported distributions"),
Available Funds from the other loan group after giving effect to all
distributions on the senior certificate group related to such other loan group
and payments in respect of the Class PO Deferred Amounts and before making any
distributions on the subordinated certificates, will be available to make the
supported distributions. Such amounts will be applied in the order and priority
and subject to the limitations described above.

     "Available Funds" for any Distribution Date and the mortgage loans in a
loan group will equal the sum of:

    o  all scheduled installments of interest (net of the related expense fees
       for that loan group) and principal due on the Due Date in the month in
       which the Distribution Date occurs and received before the related
       Determination Date, together with any advances with respect to them;

    o  all proceeds of any primary mortgage guaranty insurance policies and
       any other insurance policies with respect to the mortgage loans in that
       loan group, to the extent the proceeds are not applied to the restoration
       of the related mortgaged property or released to the mortgagor in
       accordance with the master servicer's normal servicing procedures and all
       other cash amounts received and retained in connection with the
       liquidation of defaulted mortgage loans


                                      S-35
<PAGE>

       in that loan group, by foreclosure or otherwise during the calendar month
       preceding the month of the Distribution Date (in each case, net of
       unreimbursed expenses incurred in connection with a liquidation or
       foreclosure and unreimbursed advances, if any);

    o  all partial or full prepayments with respect to mortgage loans in that
       loan group received during the related Prepayment Period; and

    o  amounts received with respect to the Distribution Date as the
       Substitution Adjustment Amount or purchase price in respect of a deleted
       mortgage loan or a mortgage loan in that loan group repurchased by the
       seller or the master servicer as of the Distribution Date, reduced by
       amounts in reimbursement for advances previously made and other amounts
       as to which the master servicer is entitled to be reimbursed from the
       certificate account pursuant to the pooling and servicing agreement.

INTEREST

     The classes of offered certificates will have the respective pass-through
rates set forth on the cover page of this prospectus supplement or described
below.

     The pass-through rate for each component of the Class X Certificates will
be equal to the excess of (a) the weighted average of the adjusted net mortgage
rates of the Non-Discount mortgage loans in the related loan group over (b)
8.00%. The pass-through rates for the Class CB-X and Class NB-X Components for
the first Distribution Date are expected to be approximately 1.18% per annum
and 1.15% per annum, respectively. The pass-through rate for the Class X
Certificates will be equal to the weighted average of the pass-through rates
for the Class CB-X and Class NB-X Components. The pass-through rate for the
Class X Certificates for the first Distribution Date is expected to be
approximately 1.16% per annum.

     The Adjusted Net Mortgage Rate for each Mortgage Loan is the Mortgage Rate
thereof (net of the interest premium charged by the related lenders with
respect to the Lender PMI Mortgage Loans) less the Expense Fee Rate for such
Mortgage Loan.

     On each Distribution Date, to the extent of funds available therefor, each
interest bearing class of certificates will be entitled to receive an amount
allocable to interest for the related interest accrual period. This interest
distribution amount for any interest bearing class or component will be equal
to the sum of (a) interest at the applicable pass-through rate on the related
Class Certificate Balance or Notional Amount, as applicable, and (b) the sum of
the amounts, if any, by which the amount described in clause (a) above on each
prior Distribution Date exceeded the amount actually distributed as interest on
the prior Distribution Dates and not subsequently distributed (which are called
unpaid interest amounts). The interest distribution amount for the Class X
Certificates for any Distribution Date will be equal to the sum of the interest
distribution amounts for each of the Class CB-X and Class NB-X Components for
such Distribution Date. The Class PO Certificates are Principal Only
Certificates and will not bear interest.

     With respect to each Distribution Date for all of the interest bearing
certificates, the interest accrual period will be the calendar month preceding
the month of the Distribution Date.

     The interest entitlement described above for each class of certificates
for any Distribution Date will be reduced by the amount of "Net Interest
Shortfalls" experienced by (a) the related loan group, with respect to the
senior certificates (other than the Class PO Certificates) and (b) both loan
groups, with respect to the subordinated certificates. With respect to any
Distribution Date and loan group, the "Net Interest Shortfall" is equal to

    o  any net prepayment interest shortfalls for that loan group and
       Distribution Date and

    o  the amount of interest that would otherwise have been received with
       respect to any mortgage loan in that loan group that was the subject of a
       Relief Act Reduction or a Special Hazard Loss, Fraud Loss, Debt Service
       Reduction or Deficient Valuation, after the exhaustion of the respective
       amounts of coverage provided by the subordinated certificates for those
       types of losses.


                                      S-36
<PAGE>

     Net Interest Shortfalls for a loan group on any Distribution Date will be
allocated pro rata among all interest-bearing class or classes or components of
the related senior certificates and all classes of the subordinated
certificates entitled to receive distributions of interest on such Distribution
Date, based on the amount of interest each such class of certificates would
otherwise be entitled to receive (or, in the case of the subordinated
certificates, deemed to be entitled to receive, as described more fully below)
on such Distribution Date before taking into account any reduction in such
amounts from such Net Interest Shortfalls.

     For purposes of allocating Net Interest Shortfalls for a loan group to the
subordinated certificates on any Distribution Date, the amount of interest each
class of subordinated certificates would otherwise deemed to be entitled to
receive from Available Funds for that loan group on the Distribution Date will
be equal to an amount of interest at the pass-through rate on a balance equal
to that class' pro rata share (based on the respective Class Certificate
Balances) of the Subordinated Percentage for that Distribution Date relating to
that loan group of the aggregate of the applicable Non-PO Percentage of the
Stated Principal Balance of each mortgage loan in such loan group as of the Due
Date occurring in the month of that Distribution Date; provided, however, on
any Distribution Date after the Senior Termination Date for a senior
certificate group, Net Interest Shortfalls for the related loan group will be
allocated to the classes of subordinated certificates based on the amount of
interest each such class of subordinated certificates would otherwise be
entitled to receive on that Distribution Date.

     A "Relief Act Reduction" is a reduction in the amount of the monthly
interest payment on a mortgage loan pursuant to the Soldiers' and Sailors'
Civil Relief Act of 1940. See "Legal Aspects of the Mortgage Loans--Soldiers'
and Sailors' Civil Relief Act" in the prospectus. With respect to any
Distribution Date, the net prepayment interest shortfall for a loan group is
the amount by which the aggregate of prepayment interest shortfalls experienced
by the mortgage loans in that loan group during the calendar month preceding
the month of the Distribution Date exceeds the aggregate amount payable on the
Distribution Date by the master servicer as described under "Servicing of
Mortgage Loans--Adjustment to Servicing Compensation in Connection with Prepaid
Mortgage Loans." A prepayment interest shortfall is the amount by which
interest paid by a borrower in connection with a prepayment of principal on a
mortgage loan is less than one month's interest at the related mortgage rate on
the Stated Principal Balance of the mortgage loan.

     Interest will be calculated and payable on the basis of a 360-day year
divided into twelve 30-day months.

     If on a particular Distribution Date, Available Funds for a loan group in
the certificate account applied in the order described above under "--Priority
of Distributions Among Certificates" are not sufficient to make a full
distribution of the interest entitlement on the certificates in that loan
group, interest will be distributed on each class of certificates of equal
priority based on the amount of interest it would otherwise have been entitled
to receive in the absence of the shortfall. Any unpaid interest amount will be
carried forward and added to the amount holders of each class of certificates
will be entitled to receive on the next Distribution Date. A shortfall could
occur, for example, if losses realized on the mortgage loans in that loan group
were exceptionally high or were concentrated in a particular month. Any unpaid
interest amount so carried forward will not bear interest.


PRINCIPAL

     General. All payments and other amounts received in respect of principal
of the mortgage loans in a loan group will be allocated between the related
Class PO Component, on the one hand, and the related senior certificates (other
than the related Class X and Class PO Components) and the subordinated
certificates, on the other hand, in each case based on the applicable PO
Percentage and the applicable Non-PO Percentage, respectively, of those
amounts.

     The Non-PO Percentage with respect to any mortgage loan with a net
mortgage rate less than 8.00% (each a "Discount mortgage loan") will be equal
to the adjusted net mortgage rate divided by 8.00%. The Non-PO Percentage with
respect to any mortgage loan with an adjusted net mortgage rate


                                      S-37
<PAGE>

equal to or greater than 8.00% (each a "Non-Discount mortgage loan") will be
100%. The PO Percentage with respect to any Discount mortgage loan will be
equal to (8.00% minus the adjusted net mortgage rate) divided by 8.00%. The PO
Percentage with respect to any Non-Discount mortgage loan will be 0%.

     Non-PO Formula Principal Amount. On each Distribution Date, the Non-PO
Formula Principal Amount for each loan group will be distributed as principal
with respect to the related senior certificate group (other than the applicable
Class X and Class PO Components) in an amount up to the related Senior
Principal Distribution Amount for such loan group and as principal of the
subordinated certificates, as a portion of the Subordinated Principal
Distribution Amount.

     The "Non-PO Formula Principal Amount" for any Distribution Date and loan
group will equal the sum of the applicable Non-PO Percentage of

     (a)  all monthly payments of principal due on each mortgage loan in that
          loan group on the related Due Date,

     (b)  the principal portion of the purchase price of each mortgage loan in
          that loan group that was repurchased by the seller or another person
          pursuant to the pooling and servicing agreement as of the Distribution
          Date,

     (c)  the Substitution Adjustment Amount in connection with any deleted
          mortgage loan in that loan group received with respect to the
          Distribution Date,


     (d)  any insurance proceeds or liquidation proceeds allocable to recoveries
          of principal of mortgage loans in that loan group that are not yet
          Liquidated mortgage loans received during the calendar month preceding
          the month of the Distribution Date,


     (e)  with respect to each mortgage loan in that loan group that became a
          Liquidated mortgage loan during the calendar month preceding the month
          of the Distribution Date, the amount of the liquidation proceeds
          allocable to principal received with respect to the mortgage loan and


     (f)  all partial and full principal prepayments by borrowers on the
          mortgage loans in that loan group received during the related
          Prepayment Period.

     Senior Principal Distribution Amount. On each Distribution Date before the
Senior Credit Support Depletion Date, the related Non-PO Formula Principal
Amount, up to the amount of the related Senior Principal Distribution Amount
for the Distribution Date, will be distributed as principal of the following
classes of senior certificates, in the following order of priority:


     o  with respect to loan group 1, to the Class CB-1 Certificates, until its
        Class Certificate Balance is reduced to zero; and


     o  with respect to loan group 2, in the following order of priority:


     (1)  to the Class NB-3 Certificates, the Priority Amount, until its Class
          Certificate Balance is reduced to zero;

     (2)  to the Class A-R Certificates, until its Class Certificate Balance is
          reduced to zero;

     (3)  sequentially, to the Class NB-1 and Class NB-2 Certificates, in that
          order, until their respective Class Certificate Balances are reduced
          to zero; and

     (4)  to the Class NB-3 Certificates, without regard to the Priority Amount,
          until its Class Certificate Balance is reduced to zero.

     The capitalized terms used herein shall have the following meanings:

     "Priority Amount" for any Distribution Date will equal the product of (A)
the Senior Principal Distribution Amount for loan group 2, (B) the Shift
Percentage and (C) the Priority Percentage.


                                      S-38
<PAGE>

     "Priority Percentage" for any Distribution Date will equal a fraction, the
numerator of which is the Class Certificate Balance of the Class NB-3
Certificates on such Distribution Date and the denominator of which is equal to
the aggregate Class Certificate Balances of the group 2 senior certificates
(other than the Class NB-PO Component), on such Distribution Date.

     "Shift Percentage" for any Distribution Date occurring during the five
years beginning on the first Distribution Date will equal 0%. Thereafter, the
Shift Percentage for any Distribution Date occurring on or after the fifth
anniversary of the first Distribution Date will be as follows: for any
Distribution Date in the first year thereafter, 30%; for any Distribution Date
in the second year thereafter, 40%; for any Distribution Date in the third year
thereafter, 60%; for any Distribution Date in the fourth year thereafter, 80%;
and for any Distribution Date thereafter, 100%.

     Notwithstanding the payment priorities listed above, on each Distribution
Date on and after the Senior Credit Support Depletion Date, the Non-PO Formula
Principal Amount for each loan group will be distributed, concurrently as
principal to the classes of senior certificates in the related senior
certificate group (other than the related Class X and Class PO Components), pro
rata, in accordance with their respective Class Certificate Balances
immediately before the Distribution Date.

     The Senior Credit Support Depletion Date is the date on which the Class
Certificate Balance of each class of subordinated certificates has been reduced
to zero.

     "Prepayment Period" means the calendar month preceding the month of the
applicable Distribution Date.

     The "Senior Principal Distribution Amount" for any Distribution Date and
loan group will equal the sum of

    o  the related Senior Percentage of the applicable Non-PO Percentage of
       all amounts described in clauses (a) through (d) of the definition of
       "Non-PO Formula Principal Amount" for that loan group and that
       Distribution Date,

    o  for each mortgage loan in that loan group that became a Liquidated
       mortgage loan during the calendar month preceding the month of the
       Distribution Date, the lesser of

        o  the related Senior Percentage of the applicable Non-PO Percentage of
           the Stated Principal Balance of the mortgage loan and

        o  either

           o  the related Senior Prepayment Percentage of the applicable Non-PO
              Percentage of the amount of the liquidation proceeds allocable to
              principal received on the mortgage loan or

           o  if an Excess Loss was sustained on the Liquidated mortgage loan
              during the preceding calendar month, the related Senior
              Percentage of the applicable Non-PO Percentage of the amount of
              the liquidation proceeds allocable to principal received on the
              mortgage loan, and

    o  the related Senior Prepayment Percentage of the applicable Non-PO
       Percentage of the amounts described in clause (f) of the definition of
       "Non-PO Formula Principal Amount" for the Distribution Date;

provided, however, that if a Bankruptcy Loss that is an Excess Loss is
sustained on a mortgage loan in that loan group that is not a Liquidated
mortgage loan, such Senior Principal Distribution Amount will be reduced on the
related Distribution Date by the related Senior Percentage of the applicable
Non-PO Percentage of the principal portion of the Bankruptcy Loss; provided,
further, however, that on any Distribution Date after a Senior Termination
Date, the Senior Principal Distribution Amount for the remaining senior
certificate group will be calculated pursuant to the above formula based on all
the mortgage loans in the mortgage pool, as opposed to the mortgage loans in
the related loan group.


                                      S-39
<PAGE>

     "Stated Principal Balance" means for any mortgage loan and Due Date, the
unpaid principal balance of the mortgage loan as of the Due Date, as specified
in its amortization schedule at the time (before any adjustment to the
amortization schedule for any moratorium or similar waiver or grace period),
after giving effect to any previous partial prepayments and liquidation
proceeds received and to the payment of principal due on the Due Date and
irrespective of any delinquency in payment by the related mortgagor. The pool
principal balance with respect to any Distribution Date equals the aggregate of
the Stated Principal Balances of the mortgage loans outstanding on the Due Date
in the month preceding the month of the Distribution Date.

     The "Senior Percentage" for any senior certificate group and Distribution
Date is the percentage equivalent of a fraction the numerator of which is the
aggregate of the Class Certificate Balances of each class of senior
certificates of such senior certificate group (other than the applicable Class
PO Component) immediately before the Distribution Date and the denominator of
which is the aggregate of the applicable Non-PO Percentage of the Stated
Principal Balance of each mortgage loan in the related loan group; provided,
however, that on any Distribution Date after a Senior Termination Date, the
Senior Percentage of the remaining senior certificate group is the percentage
equivalent of a fraction, the numerator of which is the aggregate of the Class
Certificate Balances of each class of senior certificates (other than the
applicable Class PO Component) of such remaining senior certificate group
immediately prior to such date and the denominator of which is the aggregate of
the class certificate balances of all classes of certificates (other than the
Class PO Certificates) immediately prior to such date. For any Distribution
Date on and prior to a Senior Termination Date, the Subordinated Percentage for
the portion of the subordinated certificates relating to a loan group will be
calculated as the difference between 100% and the Senior Percentage of the
senior certificate group relating to that loan group on such Distribution Date.
After a Senior Termination Date, the Subordinated Percentage will represent the
entire interest of the subordinated certificates in the mortgage pool and will
be calculated as the difference between 100% and the Senior Percentage for such
Distribution Date.

     The Senior Prepayment Percentage of a senior certificate group for any
Distribution Date occurring during the five years beginning on the first
Distribution Date will equal 100%. Thereafter, each Senior Prepayment
Percentage will be subject to gradual reduction as described in the following
paragraph. This disproportionate allocation of unscheduled payments of
principal will have the effect of accelerating the amortization of the senior
certificates (other than the Class PO Certificates) which receive these
unscheduled payments of principal while, in the absence of Realized Losses,
increasing the interest in the pool principal balance of the applicable loan
group evidenced by the subordinated certificates. Increasing the respective
interest of the subordinated certificates relative to that of the senior
certificates is intended to preserve the availability of the subordination
provided by the subordinated certificates. The Subordinated Prepayment
Percentage for a loan group as of any Distribution Date will be calculated as
the difference between 100% and the related Senior Prepayment Percentage.

     The Senior Prepayment Percentage of a senior certificate group for any
Distribution Date occurring on or after the fifth anniversary of the first
Distribution Date will be as follows: for any Distribution Date in the first
year thereafter, the related Senior Percentage plus 70% of the related
Subordinated Percentage for the Distribution Date; for any Distribution Date in
the second year thereafter, the related Senior Percentage plus 60% of the
related Subordinated Percentage for the Distribution Date; for any Distribution
Date in the third year thereafter, the related Senior Percentage plus 40% of
the related Subordinated Percentage for the Distribution Date; for any
Distribution Date in the fourth year thereafter, the Senior Percentage for that
loan group plus 20% of the related Subordinated Percentage for the Distribution
Date; and for any Distribution Date thereafter, the related Senior Percentage
for the Distribution Date (unless on any Distribution Date the Senior
Percentage of a senior certificate group exceeds the initial Senior Percentage
of such senior certificate group, in which case such Senior Prepayment
Percentage for the Distribution Date will once again equal 100%).


                                      S-40
<PAGE>

     Notwithstanding the foregoing, no decrease in the Senior Prepayment
Percentage for either loan group will occur unless both of the step down
conditions listed below are satisfied with respect to each loan group:

    o  the outstanding principal balance of all mortgage loans in a loan group
       delinquent 60 days or more (averaged over the preceding six month
       period), as a percentage of (a) if such date is on or prior to a Senior
       Termination Date, the Subordinated Percentage for such loan group of the
       aggregate of the applicable Non-PO Percentage of the aggregate Stated
       Principal Balances of the mortgage loans in that loan group, or (b) if
       such date is after a Senior Termination Date, the aggregate Class
       Certificate Balance of the subordinated certificates, does not equal or
       exceed 50%, and

    o  cumulative Realized Losses on the mortgage loans in each loan group do
       not exceed

       o  for the Distribution Date on the fifth anniversary of the first
          Distribution Date, 30% of (i) if such date is on or prior to a Senior
          Termination Date, the Subordinated Percentage for that loan group of
          the aggregate of the applicable Non-PO Percentage of the Stated
          Principal Balances of the mortgage loans in that loan group, in each
          case as of the cut-off date or (ii) if such date is after a Senior
          Termination Date, the aggregate of the principal balances of the
          subordinated certificates as of the cut-off date (in either case the
          "original subordinate principal balance"),

       o  for the Distribution Date on the sixth anniversary of the first
          Distribution Date, 35% of the original subordinate principal balance,

       o  for the Distribution Date on the seventh anniversary of the first
          Distribution Date, 40% of the original subordinate principal balance,

       o  for the Distribution Date on the eighth anniversary of the first
          Distribution Date, 45% of the original subordinate principal balance,
          and

       o  for the Distribution Date on the ninth anniversary of the first
          Distribution Date, 50% of the original subordinate principal balance.

     The Senior Termination Date for a senior certificate group is the date on
which the aggregate Class Certificate Balance, as applicable, of the senior
certificates of such senior certificate group (other than the applicable Class
PO Component) is reduced to zero.

     If on any Distribution Date the allocation to the class or classes of
senior certificates (other than the applicable Class PO Component) then
entitled to distributions of principal of full and partial principal
prepayments and other amounts in the percentage required above would reduce the
outstanding Class Certificate Balance of the class or classes below zero, the
distribution to the class or classes of certificates of the related Senior
Prepayment Percentage of those amounts for the Distribution Date will be
limited to the percentage necessary to reduce the related Class Certificate
Balance(s) to zero.

     Subordinated Principal Distribution Amount. On each Distribution Date and
with respect to both loan groups, to the extent of Available Funds therefor,
the Non-PO Formula Principal Amount for each loan group, up to the amount of
the Subordinated Principal Distribution Amount for each loan group for the
Distribution Date, will be distributed as principal of the subordinated
certificates. Except as provided in the next paragraph, each class of
subordinated certificates will be entitled to receive its pro rata share of the
Subordinated Principal Distribution Amount from both loan groups (based on its
respective Class Certificate Balance), in each case to the extent of the amount
available from Available Funds from both loan groups for distribution of
principal. Distributions of principal of the subordinated certificates will be
made sequentially to the classes of subordinated certificates in the order of
their numerical class designations, beginning with the Class B-1 Certificates,
until their respective Class Certificate Balances are reduced to zero.

     With respect to each class of subordinated certificates, if on any
Distribution Date the sum of the related Class Subordination Percentages of the
class and all classes of subordinated certificates which


                                      S-41
<PAGE>

have higher numerical class designations than the class (the "Applicable Credit
Support Percentage") is less than the Applicable Credit Support Percentage for
the class on the date of issuance of the certificates (the "Original Applicable
Credit Support Percentage"), no distribution of partial principal prepayments
and principal prepayments in full from either loan group will be made to any of
those classes (the "Restricted Classes") and the amount of partial principal
prepayments and principal prepayments in full otherwise distributable to the
Restricted Classes will be allocated among the remaining classes of
subordinated certificates, pro rata, based upon their respective Class
Certificate Balances, and distributed in the sequential order described above.

     The Class Subordination Percentage with respect to any Distribution Date
and each class of subordinated certificates, will equal the fraction (expressed
as a percentage) the numerator of which is the Class Certificate Balance of the
class of subordinated certificates immediately before the Distribution Date and
the denominator of which is the aggregate of the Class Certificate Balances of
all classes of certificates immediately before the Distribution Date.

     The approximate Original Applicable Credit Support Percentages for the
subordinated certificates on the date of issuance of the certificates are
expected to be as follows:



<TABLE>
<S>                     <C>
  Class B-1 .........       8.00%
  Class B-2 .........       5.25%
  Class B-3 .........       3.30%
  Class B-4 .........       2.15%
  Class B-5 .........       1.20%
  Class B-6 .........       0.85%
</TABLE>

     The Subordinated Principal Distribution Amount for any loan group and
Distribution Date will equal

     o  the sum of

        o  the related Subordinated Percentage for that loan group of the
           applicable Non-PO Percentage of all amounts described in clauses (a)
           through (d) of the definition of "Non-PO Formula Principal Amount"
           for the Distribution Date,

        o  for each mortgage loan in that loan group that became a Liquidated
           mortgage loan during the calendar month preceding the month of the
           Distribution Date, the applicable Non-PO Percentage of the portion
           of the liquidation proceeds allocable to principal received on the
           mortgage loan, after application of the amounts pursuant to the
           second bulleted item of the definition of Senior Principal
           Distribution Amount up to the related Subordinated Percentage of the
           applicable Non-PO Percentage of the Stated Principal Balance of the
           mortgage loan and

        o  the related Subordinated Prepayment Percentage for that loan group
           of the applicable Non-PO Percentage of the amounts described in
           clause (f) of the definition of "Non-PO Formula Principal Amount"
           for the Distribution Date

     o  reduced by the amount of any payments in respect of related Class PO
        Deferred Amounts on the related Distribution Date.

     On any Distribution Date after a Senior Termination Date, the Subordinated
Principal Distribution Amount will not be calculated by loan group but will
equal the amount calculated pursuant to the formula set forth above based on
the applicable Subordinated Percentage or Subordinated Prepayment Percentage,
as applicable, for the subordinated certificates for such Distribution Date
with respect to all of the mortgage loans in the mortgage pool as opposed to
the mortgage loans in the related loan group.

     Residual Certificates. The Class A-R Certificates will remain outstanding
for so long as the trust fund shall exist, whether or not they are receiving
current distributions of principal or interest. In addition to distributions of
interest and principal as described above, on each Distribution Date, the


                                      S-42
<PAGE>

holders of the Class A-R Certificates will be entitled to receive any Available
Funds for either loan group remaining after payment of interest and principal
on the senior certificates and Class PO Deferred Amounts on the Class PO
Certificates and interest and principal on the subordinated certificates, as
described above. It is not anticipated that there will be any significant
amounts remaining for that distribution.

     Class PO Principal Distribution Amount. On each Distribution Date,
distributions of principal of each Class PO Component will be made in an amount
equal to the lesser of (x) the PO Formula Principal Amount for that
Distribution Date and the related loan group and (y) the product of

    o  Available Funds for that loan group remaining after distribution of
       interest on the senior certificates in the related senior certificate
       group and

    o  a fraction, the numerator of which is the related PO Formula Principal
       Amount and the denominator of which is the sum of the related PO Formula
       Principal Amount and the related Senior Principal Distribution Amount.

     If the Class PO Principal Distribution Amount on a Distribution Date is
calculated as provided in clause (y) above, principal distributions to holders
of the related senior certificates (other than the applicable Class PO
Component) will be in an amount equal to the product of Available Funds for
that loan group remaining after distribution of interest on the related senior
certificates and a fraction, the numerator of which is the related Senior
Principal Distribution Amount and the denominator of which is the sum of that
Senior Principal Distribution Amount and the related PO Formula Principal
Amount.

     The PO Formula Principal Amount for any Distribution Date, loan group and
related Class PO Component will equal the sum of the applicable PO Percentage
of

    o  all monthly payments of principal due on each mortgage loan in that
       loan group on the related Due Date,

    o  the principal portion of the purchase price of each mortgage loan in
       that loan group that was repurchased by the seller or another person
       pursuant to the pooling and servicing agreement as of the Distribution
       Date,

    o  the Substitution Adjustment Amount in connection with any deleted
       mortgage loan in that loan group received for the Distribution Date,

    o  any insurance proceeds or liquidation proceeds allocable to recoveries
       of principal of mortgage loans in that loan group that are not yet
       Liquidated mortgage loans received during the calendar month preceding
       the month of the Distribution Date,

    o  for each mortgage loan in that loan group that became a Liquidated
       mortgage loan during the calendar month preceding the month of the
       Distribution Date, the amount of liquidation proceeds allocable to
       principal received on the mortgage loan and

    o  all partial and full principal prepayments by borrowers on the mortgage
       loans in that loan group received during the related Prepayment Period;

provided, however, that if a Bankruptcy Loss that is an Excess Loss is
sustained on a Discount mortgage loan that is not a Liquidated mortgage loan,
the related PO Formula Principal Amount will be reduced on the related
Distribution Date by the applicable PO Percentage of the principal portion of
the Bankruptcy Loss.


ALLOCATION OF LOSSES

     On each Distribution Date, the applicable PO Percentage of any Realized
Loss, including any Excess Loss, on a Discount mortgage loan in a loan group
will be allocated to the related Class PO Component until its component balance
is reduced to zero. The amount of any Realized Loss, other than an Excess Loss,
allocated on or before the Senior Credit Support Depletion Date will be treated
as a Class PO Deferred Amount. To the extent funds are available on the
Distribution Date or on any


                                      S-43
<PAGE>

future Distribution Date from amounts that would otherwise be allocable from
Available Funds of both loan groups to the Subordinated Principal Distribution
Amount, Class PO Deferred Amounts will be paid on the related Class PO
Component before distributions of principal on the subordinated certificates.
Any distribution of Available Funds in a loan group in respect of unpaid Class
PO Deferred Amounts will not further reduce the component balance of the
related Class PO Component. The Class PO Deferred Amounts will not bear
interest. The Class Certificate Balance of the class of subordinated
certificates then outstanding with the highest numerical class designation will
be reduced by the amount of any payments in respect of Class PO Deferred
Amounts. After the Senior Credit Support Depletion Date, no new Class PO
Deferred Amounts will be created.

     On each Distribution Date, the applicable Non-PO Percentage of any
Realized Loss, other than any Excess Loss, will be allocated first to the
subordinated certificates, in the reverse order of their numerical class
designations (beginning with the class of subordinated certificates then
outstanding with the highest numerical class designation), in each case until
the Class Certificate Balance of the respective class of certificates has been
reduced to zero, and then to the senior certificates of the related senior
certificate group (other than the Class X and Class PO Certificates) pro rata,
based upon their respective Class Certificate Balances .

     On each Distribution Date, the applicable Non-PO Percentage of Excess
Losses on the mortgage loans in a loan group will be allocated pro rata among
the classes of senior certificates of the related senior certificate group,
(other than the related Class X and Class PO Components) based upon their
respective Class Certificate Balances, and the subordinated certificates, based
upon their pro rata share of the Subordinated Percentage relating to such loan
group of the aggregate of the applicable Non-PO Percentage of the Stated
Principal Balance of each mortgage loan in that loan group as of the Due Date
occurring in the month of such Distribution Date; provided, however, on any
Distribution Date after a Senior Termination Date for a senior certificate
group, such Excess Losses on the mortgage loans in the related loan group will
be allocated to the subordinated certificates based upon their respective Class
Certificate Balances; provided further, however, on any Distribution Date on
and after the Senior Credit Support Depletion Date, the Non-PO Percentage of
any Excess Loss will be allocated pro rata among the classes of senior
certificates (other than the Class X and Class PO Certificates), based on their
respective class certificate balances immediately prior to such Distribution
Date.

     In general, a "Realized Loss" means, for a Liquidated mortgage loan, the
amount by which the remaining unpaid principal balance of the mortgage loan
exceeds the amount of liquidation proceeds applied to the principal balance of
the related mortgage loan. "Excess Losses" are Special Hazard Losses in excess
of the Special Hazard Loss Coverage Amount, Bankruptcy Losses in excess of the
Bankruptcy Loss Coverage Amount and Fraud Losses in excess of the Fraud Loss
Coverage Amount. "Bankruptcy Losses" are losses that are incurred as a result
of Debt Service Reductions and Deficient Valuations. "Special Hazard Losses"
are Realized Losses in respect of Special Hazard mortgage loans. "Fraud Losses"
are losses sustained on a Liquidated mortgage loan by reason of a default
arising from fraud, dishonesty or misrepresentation. See "Credit
Enhancement--Subordination of Certain Classes."

     A "Liquidated mortgage loan" is a defaulted mortgage loan as to which the
master servicer has determined that all recoverable liquidation and insurance
proceeds have been received. A "Special Hazard mortgage loan" is a Liquidated
mortgage loan as to which the ability to recover the full amount due thereunder
was substantially impaired by a hazard not insured against under a standard
hazard insurance policy of the type described in the prospectus under "Credit
Enhancement--Special Hazard Insurance Policies." See "Credit
Enhancement--Subordination of Certain Classes."


STRUCTURING ASSUMPTIONS

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

      o  loan group 1 consists of two mortgage loans with the following
         characteristics:

                                      S-44
<PAGE>


<TABLE>
<CAPTION>
                                                                 ORIGINAL TERM    REMAINING TERM
                                              ADJUSTED NET        TO MATURITY       TO MATURITY       LOAN AGE
 PRINCIPAL BALANCE       MORTGAGE RATE        MORTGAGE RATE       (IN MONTHS)       (IN MONTHS)      (IN MONTHS)
 -----------------       -------------        -------------       -----------       -----------      -----------
<S>                   <C>                  <C>                  <C>              <C>                <C>
  $  1,009,147.45         8.2500000000%        7.9500000000%    360              360                0
  $131,135,947.63         9.4907626220%        9.1765029245%    359              359                0
</TABLE>

      o  loan group 2 consists of two mortgage loans with the following
characteristics:


<TABLE>
<CAPTION>
                                                                 ORIGINAL TERM     REMAINING TERM
                                              ADJUSTED NET        TO MATURITY       TO MATURITY       LOAN AGE
 PRINCIPAL BALANCE       MORTGAGE RATE        MORTGAGE RATE       (IN MONTHS)       (IN MONTHS)      (IN MONTHS)
 -----------------       -------------        -------------       -----------       -----------      -----------
<S>                   <C>                  <C>                  <C>               <C>               <C>
  $  7,652,451.53         8.0784654062%        7.7436546662%    360               360               0
  $161,544,518.11         9.4603751326%        9.1495763642%    359               359               0
</TABLE>

    o  the mortgage loans prepay at the specified constant percentages of the
       applicable prepayment assumption,

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

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

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

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

    o  the scheduled monthly payment for each mortgage loan has been
       calculated such that each mortgage loan will amortize in amounts
       sufficient to repay the current balance of the mortgage loan by its
       respective remaining term to maturity,

    o  the initial Class Certificate Balance or Notional Amount, as
       applicable, of each class of certificates is as set forth on the cover
       page hereof or under "Description of the Certificates,"

    o  interest accrues on each interest bearing class of certificates at the
       applicable pass-through rate set forth or described on the cover page
       hereof and as described in this prospectus supplement,

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

    o  the closing date of the sale of the certificates is August 31, 2000,

    o  the seller is not required to repurchase or substitute for any mortgage
       loan,

    o  the master servicer does not exercise the option to repurchase the
       mortgage loans described under "--Optional Purchase of Defaulted Loans"
       and "--Optional Termination" and

    o  no class of certificates becomes a Restricted Class.

     While it is assumed that each of the mortgage loans prepays at the
specified constant percentages of the prepayment assumption, this is not likely
to be the case. Moreover, discrepancies may exist between the characteristics
of the actual mortgage loans which will be delivered to the trustee and
characteristics of the mortgage loans used in preparing the tables.

     Prepayments of mortgage loans commonly are measured relative to a
prepayment standard or model. The model used in this prospectus supplement
represents an assumed rate of prepayment each


                                      S-45
<PAGE>

month of the then outstanding principal balance of a pool of new mortgage
loans. A 100% prepayment assumption assumes a CPR of 6.0% per annum of the then
outstanding principal balance of such mortgage loans in the first month of the
life of the mortgage loans and an additional 1.272727% (precisely (14/11)%) per
annum in the second through eleventh months. Beginning in the twelfth month and
in each month thereafter during the life of the mortgage loans, a 100%
prepayment assumption assumes a CPR of 20% per annum each month. As used
herein, a 50% prepayment assumption assumes prepayment rates equal to 50% of
the prepayment assumption. Correspondingly, a 200% prepayment assumption
assumes prepayment rates equal to 200% of the prepayment assumption, and so
forth.


OPTIONAL PURCHASE OF DEFAULTED LOANS

     The master servicer may, at its option, purchase from the trust fund any
mortgage loan which is delinquent in payment by 91 days or more. Any purchase
shall be at a price equal to 100% of the Stated Principal Balance of the
mortgage loan plus accrued interest on it at the applicable mortgage rate from
the date through which interest was last paid by the related mortgagor or
advanced (and not reimbursed) to the first day of the month in which the amount
is to be distributed.


OPTIONAL TERMINATION

     The master servicer will have the right to repurchase all remaining
mortgage loans and foreclosed or otherwise repossessed properties in the
mortgage pool and thereby effect early retirement of the certificates, subject
to the pool principal balance of the mortgage loans and foreclosed or otherwise
repossessed properties at the time of repurchase being less than 10% of the
cut-off date pool principal balance. If the master servicer exercises the
option, the purchase price distributed with respect to each certificate will be
100% of its then outstanding principal balance plus any Class PO Deferred
Amounts in the case of the Class PO Certificates and, in the case of an
interest bearing certificate, any unpaid accrued interest thereon at the
applicable pass-through rate, in each case subject to reduction as provided in
the pooling and servicing agreement if the purchase price is based in part on
the appraised value of any foreclosed or otherwise repossessed properties and
the appraised value is less than the Stated Principal Balance of the related
mortgage loans. Distributions on the certificates in respect of any optional
termination will first be paid to the senior certificates and then to the
subordinated certificates. The proceeds from any optional termination
distribution may not be sufficient to distribute the full amount to which each
class of certificates is entitled if the purchase price is based in part on the
appraised value of any foreclosed or otherwise repossessed property and the
appraised value is less than the Stated Principal Balance of the related
mortgage loan.


THE TRUSTEE

     The Bank of New York will be the trustee under the pooling and servicing
agreement. The depositor and the master servicer may maintain other banking
relationships in the ordinary course of business with The Bank of New York.
Offered certificates may be surrendered at the Corporate Trust Office of the
trustee located at 101 Barclay Street, 12E, New York, New York 10286,
Attention: Corporate Trust Administration or at any other address the trustee
designates from time to time.


RESTRICTIONS ON TRANSFER OF THE CLASS A-R CERTIFICATES

     The Class A-R Certificates will be subject to the restrictions on transfer
described in the prospectus under "Material Federal Income Tax
Consequences--REMIC Certificates--Tax-Related Restrictions on Transfers of
Residual Certificates--Disqualified Organizations," "--Noneconomic Residual
Interests" and "--Foreign Investors." The pooling and servicing agreement
provides that the Class A-R Certificates (in addition to other ERISA restricted
classes of certificates) may not be acquired by an ERISA Plan. See "ERISA
Considerations." Each Class A-R Certificate will contain a legend describing
the foregoing restrictions.


                                      S-46
<PAGE>

                 YIELD, PREPAYMENT AND MATURITY CONSIDERATIONS

GENERAL

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

     Delinquencies on the mortgage loans which are not advanced by or on behalf
of the master servicer (because amounts, if advanced, would be nonrecoverable),
will adversely affect the yield on the certificates. Because of the priority of
distributions, shortfalls resulting from delinquencies not so advanced will be
borne first by the subordinated certificates, in the reverse order of their
numerical class designations, and then by the senior certificates of the senior
certificate group to which the shortfall relates. If, as a result of the
shortfalls, the aggregate of the Class Certificate Balances of all classes of
certificates exceeds the pool principal balance, the Class Certificate Balance
of the class of subordinated certificates then outstanding with the highest
numerical class designation will be reduced by the amount of the excess.

     Net Interest Shortfalls will adversely affect the yields on the classes of
offered certificates.  In addition, although all losses initially will be borne
by the subordinated certificates, in the reverse order of their numerical class
designations (either directly or through distributions in respect of Class PO
Deferred Amounts on the Class PO Certificates), Excess Losses on the mortgage
loans in a loan group will be borne by all classes of certificates (other than
the Class X Certificates) of the related senior certificate group and the
subordinated certificates in the manner set forth in this prospectus supplement
under "Description of the Certificates--Allocation of Losses." Moreover, since
the Subordinated Principal Distribution Amount for each Distribution Date will
be reduced by the amount of any distributions on the Distribution Date in
respect of Class PO Deferred Amounts, the amount distributable as principal on
each Distribution Date to each class of subordinated certificates then entitled
to a distribution of principal will be less than it otherwise would be in the
absence of the Class PO Deferred Amounts. As a result, the yields on the
offered certificates will depend on the rate and timing of Realized Losses,
including Excess Losses. Excess Losses could occur at a time when one or more
classes of subordinated certificates are still outstanding and otherwise
available to absorb other types of Realized Losses.


PREPAYMENT CONSIDERATIONS AND RISKS

     The rate of principal payments on the offered certificates, the aggregate
amount of distributions on the offered certificates and the yield to maturity
of the offered certificates will be related to the rate and timing of payments
of principal on the mortgage loans in the related loan group, with respect to
the Class CB-1, Class NB-1, Class NB-2, Class NB-3 and Class A-R Certificates,
and all of the mortgage loans with respect to all other classes of
certificates. The rate of principal payments on the mortgage loans will in turn
be affected by the amortization schedules of the mortgage loans and by the rate
of principal prepayments, including for this purpose prepayments resulting from
refinancing, liquidations of the mortgage loans due to defaults, casualties,
condemnations and repurchases by the seller or master servicer. Except for 400
mortgage loans in loan group 1 and 67 mortgage loans in loan group 2, each of
which has a prepayment penalty if the related mortgagor prepays such mortgage
loan during a period ranging from one year to five years after origination, the
mortgage loans may be prepaid by the mortgagors at any time without a
prepayment penalty. Because certain of the mortgage loans contain prepayment
penalties, the rate of principal prepayments may be less than the rate of
principal payments for mortgage loans that did not have prepayment penalties.
The mortgage loans are subject to the "due-on-sale" provisions included
therein. However, the master servicer may choose not to accelerate a mortgage
loan upon the conveyance of the related mortgaged property if the master
servicer would make a similar decision with respect to a comparable mortgage
loan held for its own account. See "The Mortgage Pool."


                                      S-47
<PAGE>

     Prepayments, liquidations and purchases of the mortgage loans in a loan
group will result in distributions on the offered certificates related to that
loan group of principal amounts which would otherwise be distributed over the
remaining terms of the mortgage loans. This includes any optional purchase by
the master servicer of defaulted mortgage loans and any optional repurchase of
the remaining mortgage loans in connection with the termination of the trust
fund, in each case as described in this prospectus supplement. Since the rate
of payment of principal of the mortgage loans will depend on future events and
a variety of factors, no assurance can be given as to the rate of payment of
principal of the mortgage loans or the rate of principal prepayments. The
extent to which the yield to maturity of a class of offered certificates may
vary from the anticipated yield will depend upon the degree to which the
offered certificate is purchased at a discount or premium, and the degree to
which the timing of payments thereon is sensitive to prepayments, liquidations
and purchases of the mortgage loans in that loan group. Further, an investor
should consider the risk that, in the case of the principal only certificates
and any other offered certificate purchased at a discount, a slower than
anticipated rate of principal payments (including prepayments) on the mortgage
loans in that loan group could result in an actual yield to the investor that
is lower than the anticipated yield and, in the case of the interest only
certificates and any other offered certificate purchased at a premium, a faster
than anticipated rate of principal payments on the mortgage loans in that loan
group could result in an actual yield to the investor that is lower than the
anticipated yield. Investors in the interest only certificates should carefully
consider the risk that a rapid rate of principal payments on the mortgage loans
could result in the failure of the investors to recover their initial
investments.

     The rate of principal payments (including prepayments) on pools of
mortgage loans may vary significantly over time and may be influenced by a
variety of economic, geographic, social and other factors, including changes in
mortgagors' housing needs, job transfers, unemployment, mortgagors' net equity
in the mortgaged properties, servicing decisions, as well as the
characteristics of the mortgage loans included in the mortgage pool as
described under "The Mortgage Pool--General" and "--Underwriting Process." In
general, if prevailing interest rates were to fall significantly below the
mortgage rates on the mortgage loans, the mortgage loans could be subject to
higher prepayment rates than if prevailing interest rates were to remain at or
above the mortgage rates on the mortgage loans. Conversely, if prevailing
interest rates were to rise significantly, the rate of prepayments on the
mortgage loans would generally be expected to decrease. No assurances can be
given as to the rate of prepayments on the mortgage loans in stable or changing
interest rate environments. Furthermore, with respect to up to 30% of the
mortgage loans, the depositor may deliver all or a portion of each related
mortgage file to the trustee not later than five business days after the
closing date. Should the seller fail to deliver all or a portion of any
mortgage files to the depositor or other designee of the depositor or, at the
depositor's direction, to the trustee, within that period, the seller will be
required to use its best efforts to deliver a Substitute mortgage loan for the
related delayed delivery mortgage loan or repurchase the related delayed
delivery mortgage loan. Any repurchases pursuant to this provision would also
have the effect of accelerating the rate of prepayments on the mortgage loans.

     As described under "Description of the Certificates--Principal," the
Senior Prepayment Percentage of the applicable Non-PO Percentage of all
principal prepayments will be initially distributed to the classes of senior
certificates (other than the Class PO Certificates) then entitled to receive
distributions of principal prepayments. This may result in all (or a
disproportionate percentage) of the principal prepayments being distributed to
holders of the classes of senior certificates and none (or less than their pro
rata share) of the principal prepayments being distributed to holders of the
subordinated certificates during the periods of time described in the
definition of "Senior Prepayment Percentage." The Class NB-3 Certificates
generally will not receive distributions in respect of principal payments on
the group 2 mortgage loans for the first five years after the closing date.

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


                                      S-48
<PAGE>

greater the effect on an investor's yield to maturity. The effect on an
investor's yield as a result 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 offered certificates may not be
offset by a subsequent like decrease (or increase) in the rate of principal
payments.

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


SENSITIVITY OF THE CLASS X CERTIFICATES

     AS INDICATED IN THE TABLE BELOW, THE YIELD TO INVESTORS IN THE CLASS X
CERTIFICATES WILL BE SENSITIVE TO THE RATE OF PRINCIPAL PAYMENTS (INCLUDING
PREPAYMENTS) OF THE NON-DISCOUNT MORTGAGE LOANS IN BOTH LOAN GROUPS
(PARTICULARLY THOSE WITH HIGH NET MORTGAGE RATES), WHICH GENERALLY CAN BE
PREPAID AT ANY TIME. ON THE BASIS OF THE ASSUMPTIONS DESCRIBED BELOW, THE YIELD
TO MATURITY ON THE CLASS X CERTIFICATES WOULD BE APPROXIMATELY 0% IF
PREPAYMENTS WERE TO OCCUR AT A CONSTANT RATE OF APPROXIMATELY 196% OF THE
PREPAYMENT ASSUMPTION. IF THE ACTUAL PREPAYMENT RATE OF THE NON-DISCOUNT
MORTGAGE LOANS IN BOTH LOAN GROUPS WERE TO EXCEED THE FOREGOING LEVEL FOR AS
LITTLE AS ONE MONTH WHILE EQUALING SUCH LEVEL FOR THE REMAINING MONTHS, THE
INVESTORS IN THE CLASS X CERTIFICATES WOULD NOT FULLY RECOUP THEIR INITIAL
INVESTMENTS.

     As described above under "Description of the Certificates--General," the
Notional Amount of the Class X Certificates in effect from time to time is
calculated by reference to the Net Mortgage Rates of the Non-Discount mortgage
loans in both loan groups. The Non-Discount mortgage loans will have higher Net
Mortgage Rates (and higher Mortgage Rates) than the other mortgage loans. In
general, mortgage loans with higher mortgage rates tend to prepay at higher
rates than mortgage loans with relatively lower mortgage rates in response to a
given change in market interest rates. As a result, the Non-Discount mortgage
loans may prepay at higher rates, thereby reducing the Notional Amount of the
Class X Certificates.

     The information set forth in the following table has been prepared on the
basis of the structuring assumptions and on the assumption that the purchase
price of the Class X Certificates (expressed as a percentage of their initial
Notional Amount) is as follows:




<TABLE>
<CAPTION>
CLASS                       PRICE*
-----                       ------
<S>                     <C>
Class X .............       2.67177%
</TABLE>

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


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

<TABLE>
<CAPTION>
                                            PREPAYMENT ASSUMPTION
                          ----------------------------------------------------------
CLASS                      0%           50%         100%         150%          200%
-----                      --           ---         ----         ----          ----
<S>                    <C>          <C>          <C>          <C>          <C>
Class X ............       45.1%        34.5%        23.4%        11.6%         (1.0)%
</TABLE>

     It is highly unlikely that the Non-Discount mortgage loans will have the
precise characteristics described in this prospectus supplement or that the
Non-Discount mortgage loans will prepay at the


                                      S-49
<PAGE>

same rate until maturity or that all of the Non-Discount Mortgage Loans will
prepay at the same rate or time. As a result of these factors, the pre-tax
yields on the Notional Amount Certificates are likely to differ from those
shown in the table above, even if all of the Non-Discount mortgage loans in
both loan groups prepay at the indicated percentages of the Prepayment
Assumption. No representation is made as to the actual rate of principal
payments on the mortgage loans for any period or over the life of the Class X
Certificates or as to the yield on the Class X Certificates. Investors must
make their own decisions as to the appropriate prepayment assumptions to be
used in deciding whether to purchase the Class X Certificates.


SENSITIVITY OF THE PRINCIPAL ONLY CERTIFICATES

     THE CLASS PO CERTIFICATES WILL BE "PRINCIPAL ONLY" CERTIFICATES AND WILL
NOT BEAR INTEREST. AS INDICATED IN THE FOLLOWING TABLE, A LOWER THAN
ANTICIPATED RATE OF PRINCIPAL PAYMENTS (INCLUDING PREPAYMENTS) ON THE DISCOUNT
MORTGAGE LOANS WILL HAVE A NEGATIVE EFFECT ON THE YIELD TO INVESTORS IN THE
PRINCIPAL ONLY CERTIFICATES.

     As described above under "Description of the Certificates--Principal," the
Class PO Principal Distribution Amount is calculated by reference to the
principal payments (including prepayments) on the Discount mortgage loans. The
Discount mortgage loans will have lower adjusted net mortgage rates (and lower
mortgage rates) than the other mortgage loans. In general, mortgage loans with
higher mortgage rates tend to prepay at higher rates than mortgage loans with
relatively lower mortgage rates in response to a given change in market
interest rates. As a result, the Discount mortgage loans may prepay at lower
rates, thereby reducing the rate of payment of principal and the resulting
yield of the Class PO Certificates.

     The information set forth in the following table has been prepared on the
basis of the structuring assumptions and on the assumption that the aggregate
purchase price of the Principal Only Certificates (expressed as a percentage of
its initial Class Certificate Balance) is as follows:


<TABLE>
<CAPTION>
CLASS                         PRICE
-----                         -----
<S>                      <C>
Class PO .............       63.00000%
</TABLE>

         SENSITIVITY OF THE PRINCIPAL ONLY CERTIFICATES TO PREPAYMENTS
                         (PRE-TAX YIELDS TO MATURITY)




<TABLE>
<CAPTION>
                                           PREPAYMENT ASSUMPTION
                           -------------------------------------------------------
CLASS                       0%         50%         100%         150%         200%
-----                       --         ---         ----         ----         ----
<S>                     <C>         <C>         <C>          <C>          <C>
Class PO ............       2.3%        6.8%        12.5%        18.6%        24.9%
</TABLE>

     It is unlikely that the Discount mortgage loans will have the precise
characteristics described in this prospectus supplement or that the Discount
mortgage loans will all prepay at the same rate until maturity or that all of
the Discount mortgage loans will prepay at the same rate or time. As a result
of these factors, the pre-tax yields on the Principal Only Certificates are
likely to differ from those shown in the table above, even if all of the
Discount mortgage loans prepay at the indicated percentages of the prepayment
assumption. No representation is made as to the actual rate of principal
payments on the mortgage loans, including the Discount mortgage loans, for any
period or over the life of the Principal Only Certificates or as to the yield
on the Principal Only Certificates. Investors must make their own decisions as
to the appropriate prepayment assumptions to be used in deciding whether to
purchase the Principal Only Certificates.


ADDITIONAL INFORMATION

     The depositor intends to file additional yield tables and other
computational materials with respect to one or more classes of offered
certificates with the Securities and Exchange Commission in a report on Form
8-K. The tables and materials were prepared by the underwriter at the request
of


                                      S-50
<PAGE>

prospective investors, based on assumptions provided by, and satisfying their
special requirements. The tables and assumptions may be based on assumptions
that differ from the structuring assumptions. Accordingly, the tables and other
materials may not be relevant to or appropriate for investors other than those
specifically requesting them.


WEIGHTED AVERAGE LIVES OF THE OFFERED CERTIFICATES

     The weighted average life of an offered certificate is determined by (a)
multiplying the amount of the net reduction, if any, of the Class Certificate
Balance of the Certificate on each Distribution Date by the number of years
from the date of issuance to the Distribution Date, (b) summing the results and
(c) dividing the sum by the aggregate amount of the net reductions in Class
Certificate Balance of the Certificate referred to in clause (a).

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

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

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


DECREMENT TABLES

     The following tables indicate the percentages of the initial Class
Certificate Balances of the classes of offered certificates (other than the
Class X Certificates) that would be outstanding after each of the dates shown
at various constant percentages of the prepayment assumption and the
corresponding weighted average lives of the classes. The tables have been
prepared on the basis of the structuring assumptions. It is not likely that the
mortgage loans in a loan group will have the precise characteristics described
in this prospectus supplement or all of the mortgage loans will prepay at the
constant percentages of the prepayment assumption specified in the tables or at
any other constant rate. Moreover, the diverse remaining terms to maturity of
the mortgage loans could produce slower or faster principal distributions than
indicated in the tables, which have been prepared using the specified constant
percentages of the prepayment assumption, even if the remaining term to
maturity of the mortgage loans in a loan group is consistent with the remaining
terms to maturity of the mortgage loans specified in the structuring
assumptions.


                                      S-51
<PAGE>

          PERCENT OF INITIAL CLASS CERTIFICATE BALANCES OUTSTANDING*




<TABLE>
<CAPTION>
                                           CLASS CB-1                                    CLASS NB-1
                                      PREPAYMENT ASSUMPTION                         PREPAYMENT ASSUMPTION
                             -----------------------------------------     -----------------------------------------
    DISTRIBUTION DATE         0%       50%     100%     150%     200%       0%       50%     100%     150%     200%
    -----------------         --       ---     ----     ----     ----       --       ---     ----     ----     ----
<S>                       <C>       <C>      <C>      <C>      <C>      <C>       <C>      <C>      <C>      <C>
Initial .................     100%     100%     100%     100%     100%      100%     100%     100%     100%     100%
August 25, 2001 .........      99       92       85       78       71        99       90       81       71       62
August 25, 2002 .........      99       82       66       52       39        98       76       55       37       20
August 25, 2003 .........      98       72       51       33       20        97       63       35       13        0
August 25, 2004 .........      97       63       39       21        8        96       52       19        0        0
August 25, 2005 .........      96       56       29       12        2        95       42        7        0        0
August 25, 2006 .........      95       49       22        7        0        94       34        0        0        0
August 25, 2007 .........      94       43       16        3        0        92       27        0        0        0
August 25, 2008 .........      93       38       12        2        0        91       21        0        0        0
August 25, 2009 .........      92       34       10        1        0        89       16        0        0        0
August 25, 2010 .........      90       30        7        1        0        87       12        0        0        0
August 25, 2011 .........      88       26        6        0        0        86        9        0        0        0
August 25, 2012 .........      87       23        5        0        0        83        6        0        0        0
August 25, 2013 .........      85       20        4        0        0        81        3        0        0        0
August 25, 2014 .........      83       18        3        0        0        79        0        0        0        0
August 25, 2015 .........      80       16        2        0        0        76        0        0        0        0
August 25, 2016 .........      78       14        2        0        0        73        0        0        0        0
August 25, 2017 .........      75       12        1        0        0        70        0        0        0        0
August 25, 2018 .........      72       10        1        0        0        66        0        0        0        0
August 25, 2019 .........      68        9        1        0        0        62        0        0        0        0
August 25, 2020 .........      65        7        1        0        0        58        0        0        0        0
August 25, 2021 .........      61        6        0        0        0        53        0        0        0        0
August 25, 2022 .........      56        5        0        0        0        47        0        0        0        0
August 25, 2023 .........      51        4        0        0        0        42        0        0        0        0
August 25, 2024 .........      46        3        0        0        0        35        0        0        0        0
August 25, 2025 .........      39        3        0        0        0        28        0        0        0        0
August 25, 2026 .........      33        2        0        0        0        20        0        0        0        0
August 25, 2027 .........      26        1        0        0        0        12        0        0        0        0
August 25, 2028 .........      18        1        0        0        0         3        0        0        0        0
August 25, 2029 .........       9        0        0        0        0         0        0        0        0        0
August 25, 2030 .........       0        0        0        0        0         0        0        0        0        0
Weighted Average Life
 (in years)** ...........    21.2      7.9      4.1      2.6      1.9      19.6      5.0      2.5      1.7      1.3
</TABLE>

----------
 * Rounded to the nearest whole percentage.

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


                                      S-52
<PAGE>

           PERCENT OF INITIAL CLASS CERTIFICATE BALANCES OUTSTANDING*




<TABLE>
<CAPTION>
                                            CLASS NB-2                                     CLASS NB-3
                                      PREPAYMENT ASSUMPTION                           PREPAYMENT ASSUMPTION
                            -------------------------------------------    ---------------------------------------------
    DISTRIBUTION DATE         0%       50%      100%     150%     200%       0%       50%       100%     150%     200%
    -----------------         --       ---      ----     ----     ----       --       ---       ----     ----     ----
<S>                       <C>       <C>       <C>      <C>      <C>      <C>       <C>       <C>       <C>      <C>
Initial .................     100%      100%     100%     100%     100%      100%      100%      100%     100%     100%
August 25, 2001 .........     100       100      100      100      100       100       100       100      100      100
August 25, 2002 .........     100       100      100      100      100       100       100       100      100      100
August 25, 2003 .........     100       100      100      100       71       100       100       100      100      100
August 25, 2004 .........     100       100      100       78        0       100       100       100      100       83
August 25, 2005 .........     100       100      100       13        0       100       100       100      100       16
August 25, 2006 .........     100       100       92        0        0       100        96        92       65        0
August 25, 2007 .........     100       100       59        0        0        99        91        82       33        0
August 25, 2008 .........     100       100       39        0        0        98        85        69       16        0
August 25, 2009 .........     100       100       28        0        0        97        77        56        8        0
August 25, 2010 .........     100       100       22        0        0        96        68        44        6        0
August 25, 2011 .........     100       100       17        0        0        94        60        35        4        0
August 25, 2012 .........     100       100       14        0        0        92        53        27        3        0
August 25, 2013 .........     100       100       11        0        0        90        47        21        2        0
August 25, 2014 .........     100       100        8        0        0        88        41        17        1        0
August 25, 2015 .........     100        89        6        0        0        85        36        13        1        0
August 25, 2016 .........     100        77        5        0        0        83        31        10        1        0
August 25, 2017 .........     100        67        4        0        0        79        27         8        0        0
August 25, 2018 .........     100        58        3        0        0        76        23         6        0        0
August 25, 2019 .........     100        49        2        0        0        73        20         5        0        0
August 25, 2020 .........     100        42        2        0        0        69        17         3        0        0
August 25, 2021 .........     100        35        1        0        0        64        14         3        0        0
August 25, 2022 .........     100        29        1        0        0        59        12         2        0        0
August 25, 2023 .........     100        24        1        0        0        54        10         1        0        0
August 25, 2024 .........     100        19        0        0        0        48         8         1        0        0
August 25, 2025 .........     100        15        0        0        0        42         6         1        0        0
August 25, 2026 .........     100        11        0        0        0        35         5         0        0        0
August 25, 2027 .........     100         8        0        0        0        27         3         0        0        0
August 25, 2028 .........     100         5        0        0        0        19         2         0        0        0
August 25, 2029 .........      58         2        0        0        0         9         1         0        0        0
August 25, 2030 .........       0         0        0        0        0         0         0         0        0        0
Weighted Average Life
 (in years)** ...........    29.1      19.8      8.7      4.5      3.3      22.3      13.8      10.5      6.9      4.5
</TABLE>

----------
 * Rounded to the nearest whole percentage.

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


                                      S-53
<PAGE>

          PERCENT OF INITIAL CLASS CERTIFICATE BALANCES OUTSTANDING*




<TABLE>
<CAPTION>
                                           CLASS A-R                                     CLASS PO
                                     PREPAYMENT ASSUMPTION                         PREPAYMENT ASSUMPTION
                            -----------------------------------------     -----------------------------------------
    DISTRIBUTION DATE        0%       50%     100%     150%     200%       0%       50%     100%     150%     200%
    -----------------        --       ---     ----     ----     ----       --       ---     ----     ----     ----
<S>                       <C>      <C>      <C>      <C>      <C>      <C>       <C>      <C>      <C>      <C>
Initial .................    100%     100%     100%     100%     100%      100%     100%     100%     100%     100%
August 25, 2001 .........      0        0        0        0        0        99       93       86       80       73
August 25, 2002 .........      0        0        0        0        0        98       83       68       55       43
August 25, 2003 .........      0        0        0        0        0        97       74       54       38       26
August 25, 2004 .........      0        0        0        0        0        96       66       43       26       15
August 25, 2005 .........      0        0        0        0        0        95       58       34       18        9
August 25, 2006 .........      0        0        0        0        0        94       52       27       13        5
August 25, 2007 .........      0        0        0        0        0        93       46       21        9        3
August 25, 2008 .........      0        0        0        0        0        91       41       17        6        2
August 25, 2009 .........      0        0        0        0        0        90       36       13        4        1
August 25, 2010 .........      0        0        0        0        0        88       32       10        3        1
August 25, 2011 .........      0        0        0        0        0        86       28        8        2        0
August 25, 2012 .........      0        0        0        0        0        84       25        6        1        0
August 25, 2013 .........      0        0        0        0        0        82       22        5        1        0
August 25, 2014 .........      0        0        0        0        0        80       19        4        1        0
August 25, 2015 .........      0        0        0        0        0        77       16        3        0        0
August 25, 2016 .........      0        0        0        0        0        74       14        2        0        0
August 25, 2017 .........      0        0        0        0        0        71       12        2        0        0
August 25, 2018 .........      0        0        0        0        0        68       11        1        0        0
August 25, 2019 .........      0        0        0        0        0        65        9        1        0        0
August 25, 2020 .........      0        0        0        0        0        61        8        1        0        0
August 25, 2021 .........      0        0        0        0        0        57        6        1        0        0
August 25, 2022 .........      0        0        0        0        0        52        5        0        0        0
August 25, 2023 .........      0        0        0        0        0        47        4        0        0        0
August 25, 2024 .........      0        0        0        0        0        42        3        0        0        0
August 25, 2025 .........      0        0        0        0        0        36        3        0        0        0
August 25, 2026 .........      0        0        0        0        0        30        2        0        0        0
August 25, 2027 .........      0        0        0        0        0        24        1        0        0        0
August 25, 2028 .........      0        0        0        0        0        16        1        0        0        0
August 25, 2029 .........      0        0        0        0        0         8        0        0        0        0
August 25, 2030 .........      0        0        0        0        0         0        0        0        0        0
Weighted Average Life
 (in years)** ...........    0.1      0.1      0.1      0.1      0.1      20.6      8.2      4.6      3.1      2.3
</TABLE>

----------
 * Rounded to the nearest whole percentage.

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


                                      S-54
<PAGE>

           PERCENT OF INITIAL CLASS CERTIFICATE BALANCES OUTSTANDING*




<TABLE>
<CAPTION>
                                      CLASS B-1, CLASS B-2 AND CLASS B-3
                                             PREPAYMENT ASSUMPTION
                            -------------------------------------------------------
    DISTRIBUTION DATE           0%         50%         100%       150%       200%
    -----------------           --         ---         ----       ----       ----
<S>                         <C>         <C>         <C>         <C>        <C>
Initial .................       100%        100%        100%       100%       100%
August 25, 2001 .........        99          99          99         99         99
August 25, 2002 .........        99          99          99         99         99
August 25, 2003 .........        98          98          98         98         98
August 25, 2004 .........        97          97          97         97         97
August 25, 2005 .........        96          96          96         96         96
August 25, 2006 .........        95          92          89         86         68
August 25, 2007 .........        94          87          81         73         40
August 25, 2008 .........        93          81          70         59         24
August 25, 2009 .........        91          73          57         43         14
August 25, 2010 .........        90          65          45         30          8
August 25, 2011 .........        88          57          35         21          5
August 25, 2012 .........        87          51          28         14          3
August 25, 2013 .........        85          45          22         10          2
August 25, 2014 .........        83          39          17          7          1
August 25, 2015 .........        80          34          13          4          1
August 25, 2016 .........        78          30          10          3          0
August 25, 2017 .........        75          26           8          2          0
August 25, 2018 .........        72          22           6          1          0
August 25, 2019 .........        68          19           5          1          0
August 25, 2020 .........        65          16           3          1          0
August 25, 2021 .........        60          14           3          0          0
August 25, 2022 .........        56          11           2          0          0
August 25, 2023 .........        51           9           1          0          0
August 25, 2024 .........        45           7           1          0          0
August 25, 2025 .........        39           6           1          0          0
August 25, 2026 .........        33           4           0          0          0
August 25, 2027 .........        26           3           0          0          0
August 25, 2028 .........        18           2           0          0          0
August 25, 2029 .........         9           1           0          0          0
August 25, 2030 .........         0           0           0          0          0
Weighted Average Life
 (in years)** ...........      21.2        13.4        10.4        9.0        7.1
</TABLE>

----------
 * Rounded to the nearest whole percentage.

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


                                      S-55
<PAGE>

LAST SCHEDULED DISTRIBUTION DATE

     The Last Scheduled Distribution Date for each class of offered
certificates is the Distribution Date in October 2030, which is the
Distribution Date in the month following the month of the latest scheduled
maturity date for any of the mortgage loans. Since the rate of distributions in
reduction of the Class Certificate Balance or Notional Amount of each class of
offered certificates will depend on the rate of payment (including prepayments)
of the mortgage loans in the related loan group with respect to the Class CB-1,
Class NB-1, Class NB-2, Class NB-3 and Class A-R Certificates and all of the
mortgage loans with respect to all other classes of certificates, the Class
Certificate Balance of any class could be reduced to zero significantly earlier
or later than the Last Scheduled Distribution Date. The rate of payments on the
mortgage loans will depend on their particular characteristics, as well as on
prevailing interest rates from time to time and other economic factors, and no
assurance can be given as to the actual payment experience of the mortgage
loans. See "Yield, Prepayment and Maturity Considerations--Prepayment
Considerations and Risks" and "--Weighted Average Lives of the Offered
Certificates" in this prospectus supplement and "Yield and Prepayment
Considerations" in the prospectus.


THE SUBORDINATED CERTIFICATES

     The weighted average life of, and the yield to maturity on, the
subordinated certificates, in increasing order of their numerical class
designation, will be progressively more sensitive to the rate and timing of
mortgagor defaults and the severity of ensuing losses on the mortgage loans. In
particular, the rate and timing of mortgagor defaults and the severity of
ensuing losses on the mortgage loans may be affected by the characteristics of
the mortgage loans included in the mortgage pool as described under "The
Mortgage Pool--General" and "--Underwriting Process." If the actual rate and
severity of losses on the mortgage loans is higher than those assumed by a
holder of a subordinated certificate, the actual yield to maturity of the
Certificate may be lower than the yield expected by the holder based on the
holder's assumptions. The timing of losses on mortgage loans will also affect an
investor's actual yield to maturity, even if the rate of defaults and severity
of losses over the life of the mortgage pool are consistent with an investor's
expectations. In general, the earlier a loss occurs, the greater the effect on
an investor's yield to maturity. Realized Losses on the mortgage loans will
reduce the Class Certificate Balances of the applicable class of subordinated
certificates to the extent of any losses allocated to it (as described under
"Description of the Certificates-- Allocation of Losses"), without the receipt
of cash attributable to the reduction. In addition, shortfalls in cash available
for distributions on the subordinated certificates will result in a reduction in
the Class Certificate Balance of the class of subordinated certificates then
outstanding with the highest numerical class designation if and to the extent
that the aggregate of the Class Certificate Balances of all classes of
certificates, following all distributions and the allocation of Realized Losses
on a Distribution Date, exceeds the pool principal balance as of the Due Date
occurring in the month of the Distribution Date. As a result of the reductions,
less interest will accrue on the class of subordinated certificates than
otherwise would be the case. The yield to maturity of the subordinated
certificates will also be affected by the disproportionate allocation of
principal prepayments to the senior certificates, Net Interest Shortfalls, other
cash shortfalls in Available Funds and distribution of funds to Class PO
certificateholders otherwise available for distribution on the subordinated
certificates to the extent of reimbursement for Class PO Deferred Amounts. See
"Description of the Certificates--Allocation of Losses."

     If on any Distribution Date, the Applicable Credit Support Percentage for
any class of subordinated certificates is less than its Original Applicable
Credit Support Percentage, all partial principal prepayments and principal
prepayments in full available for distribution on the subordinated certificates
will be allocated solely to all other classes of subordinated certificates with
lower numerical class designations, thereby accelerating their amortization
relative to that of the Restricted Classes and reducing the weighted average
lives of the classes of subordinated certificates receiving the distributions.
Accelerating the amortization of the classes of subordinated certificates with
lower numerical class designations relative to the other classes of
subordinated certificates is intended to preserve the availability of the
subordination provided by the other classes.


                                      S-56
<PAGE>

                               CREDIT ENHANCEMENT


SUBORDINATION

     The rights of the holders of the subordinated certificates to receive
distributions with respect to the mortgage loans will be subordinated to the
rights of the holders of the senior certificates and the rights of the holders
of each class of subordinated certificates (other than the Class B-1
Certificates) to receive the distributions will be further subordinated to the
rights of the class or classes of subordinated certificates with lower
numerical class designations, in each case only to the extent described in this
prospectus supplement. The subordination of the subordinated certificates to
the senior certificates and the subordination of the classes of subordinated
certificates with higher numerical class designations to those with lower
numerical class designations is intended to increase the likelihood of receipt,
respectively, by the senior certificateholders and the holders of subordinated
certificates with lower numerical class designations of the maximum amount to
which they are entitled on any Distribution Date and to provide the holders
protection against Realized Losses, other than Excess Losses. In addition, the
subordinated certificates will provide limited protection against Special
Hazard Losses, Bankruptcy Losses and Fraud Losses up to the Special Hazard Loss
Coverage Amount, Bankruptcy Loss Coverage Amount and Fraud Loss Coverage
Amount, respectively, as described in the following paragraphs. The applicable
Non-PO Percentage of Realized Losses, other than Excess Losses, will be
allocated to the class of subordinated certificates then outstanding with the
highest numerical class designation. In addition, the Class Certificate Balance
of the class of subordinated certificates will be reduced by the amount of
distributions on the Class PO Certificates in reimbursement for Class PO
Deferred Amounts.

     The subordinated certificates will provide limited protection to the
classes of certificates of higher relative priority against

    o Special Hazard Losses in an initial amount expected to be up to
      approximately $3,760,000 (the "Special Hazard Loss Coverage Amount"),

    o Bankruptcy Losses in an initial amount expected to be up to
      approximately $129,965 (the "Bankruptcy Loss Coverage Amount") and

    o Fraud Losses in an initial amount expected to be up to approximately
      $6,026,841 (the "Fraud Loss Coverage Amount").

     The Special Hazard Loss Coverage Amount will be reduced, from time to
time, to be an amount equal on any Distribution Date to the lesser of

    o the Special Hazard Loss Coverage Amount as of the closing date less the
      amount, if any, of losses attributable to Special Hazard mortgage loans
      incurred since the closing date, or

    o the greatest of

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

        o  twice the principal balance of the largest mortgage loan and

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

All principal balances for the purpose of this definition will be calculated as
of the first day of the month before the month in which the Distribution Date
occurs after giving effect to scheduled installments of principal and interest
on the mortgage loans then due, whether or not paid.

     The Fraud Loss Coverage Amount will be reduced, from time to time, by the
amount of Fraud Losses allocated to the certificates. In addition, the Fraud
Loss Coverage Amount will be reduced on the fifth anniversary of the cut-off
date, to zero and on the first, second, third and fourth anniversaries of the
cut-off date, to an amount equal to the lesser of


                                      S-57
<PAGE>

    o 1% of the then current pool principal balance

    and

    o the excess of:

       o  the Fraud Loss Coverage Amount as of the preceding anniversary of the
          cut-off date over

       o  the cumulative amount of Fraud Losses allocated to the certificates
          since the preceding anniversary.

     The Bankruptcy Loss Coverage Amount will be reduced, from time to time, by
the amount of Bankruptcy Losses allocated to the certificates.

     The amount of coverage provided by the subordinated certificates for
Special Hazard Losses, Bankruptcy Losses and Fraud Losses may be cancelled or
reduced from time to time for each of the risks covered, provided that the then
current ratings of the certificates assigned by the rating agencies are not
adversely affected as a result. In addition, a reserve fund or other form of
credit enhancement may be substituted for the protection provided by the
subordinated certificates for Special Hazard Losses, Bankruptcy Losses and
Fraud Losses.

     A "Deficient Valuation" is a bankruptcy proceeding whereby the bankruptcy
court may establish the value of the mortgaged property at an amount less than
the then outstanding principal balance of the mortgage loan secured by the
mortgaged property or may reduce the outstanding principal balance of a
mortgage loan. In the case of a reduction in that value of the related
mortgaged property, the amount of the secured debt could be reduced to that
value, and the holder of the mortgage loan thus would become an unsecured
creditor to the extent the outstanding principal balance of the mortgage loan
exceeds the value so assigned to the mortgaged property by the bankruptcy
court. In addition, other modifications of the terms of a mortgage loan can
result from a bankruptcy proceeding, including the reduction (a "Debt Service
Reduction") of the amount of the monthly payment on the related mortgage loan.
However, none of these shall be considered a Debt Service Reduction or
Deficient Valuation so long as the master servicer is pursuing any other
remedies that may be available with respect to the related mortgage loan and
either the mortgage loan has not incurred payment default or scheduled monthly
payments of principal and interest are being advanced by the master servicer
without giving effect to any Debt Service Reduction or Deficient Valuation.


                                USE OF PROCEEDS

     We expect the proceeds to the depositor from the sale of the offered
certificates, other than the Class PO and Class X Certificates, to be
approximately 98.57% of the aggregate principal balance of the offered
certificates, plus accrued interest, before deducting issuance expenses payable
by the depositor.

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


                   MATERIAL FEDERAL INCOME TAX CONSEQUENCES

     For federal income tax purposes, an election will be made to treat the
trust fund as a REMIC. The Residual Certificates will constitute the sole class
of residual interests in the REMIC.

     The Regular Certificates will be treated as debt instruments issued by the
REMIC for federal income tax purposes. Income on the Regular Certificates must
be reported under an accrual method of accounting. Under the accrual method of
accounting, interest income may be required to be included in a holder's gross
income in advance of the holder's actual receipt of that interest income.

     The Principal Only Certificates will be treated for federal income tax
purposes as having been issued with an amount of Original Issue Discount
("OID") equal to the difference between their principal balance and their issue
price. Although the tax treatment is not entirely certain, Notional Amount
Certificates will be treated as having been issued with OID for federal income
tax purposes


                                      S-58
<PAGE>

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

     If the holders of any Regular Certificates are treated as holding their
certificates at a premium, the holders are encouraged to consult their tax
advisors regarding the election to amortize bond premium and the method to be
employed. See "Material Federal Income Tax Consequences--REMIC Certificates--a.
Regular Certificates" in the prospectus.

     As is described more fully under "Material Federal Income Tax
Consequences" in the prospectus, the offered certificates will represent
qualifying assets under Sections 856(c)(4)(A) and 7701(a)(19)(C) of the Code,
and net interest income attributable to the offered certificates will be
"interest on obligations secured by mortgages on real property" within the
meaning of Section 856(c)(3)(B) of the Internal Revenue Code of 1986, as
amended (the "Code"), to the extent the assets of the trust fund are assets
described in those sections. The Regular Certificates will represent qualifying
assets under Section 860G(a)(3) if acquired by a REMIC within the prescribed
time periods of the 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 them during certain 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.

     In computing alternative minimum taxable income, the special rule
providing that taxable income cannot be less than the sum of the taxpayer's
excess inclusions for the year does not apply. However, a taxpayer's
alternative minimum taxable income cannot be less than the sum of the
taxpayer's excess inclusions for the year. In addition, the amount of any
alternative minimum tax net operating loss is determined without regard to any
excess inclusions.

     Proposed Treasury regulations issued on February 4, 2000 (the "New
Proposed Regulations") would modify the requirements of the safe harbor
relating to transfers of noneconomic residual interests. Under the New Proposed
Regulations, a transfer of a noneconomic residual interest will not qualify
under the safe harbor unless, in addition to satisfaction of the conditions
currently specified, the present value of the anticipated tax liabilities
associated with holding the residual interest does not exceed the present value
of the sum of (i) any consideration given to the transferee to acquire the
interest, (ii) the expected future distributions on the interest, and (iii) any
anticipated tax, savings associated with holding the interest as the REMIC
generates loses. For purposes of this calculation, the present value generally
is calculated using a discount rate equal to the applicable federal rate. The
New Proposed Regulations indicate that the effective date for the modification
to the safe harbor could be as early as February 4, 2000.

     In addition, President Clinton's Fiscal Year 2001 Budget Proposal contains
a provision under which a REMIC itself would be secondarily liable for the tax
liability of its residual interest. It is unknown whether this provision will
be included in any bill introduced to Congress this year, or if


                                      S-59
<PAGE>

introduced, whether it will be enacted. If the proposal were enacted in its
present form, it would be effective for REMICs formed after the date of
enactment. Prospective investors are urged to consult their own tax advisors
regarding the tax consequences of the New Proposed Regulations and the Fiscal
Year 2001 Budget Proposal.

     Purchasers of a Residual Certificate are encouraged to consider carefully
the tax consequences of an investment in Residual Certificates discussed in the
prospectus and consult their own tax advisors with respect to those
consequences. See "Material Federal Income Tax Consequences--REMIC
Certificates--b. 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--Tax-Related Restrictions on Transfer
of Residual Certificates--Noneconomic Residual Certificates," "Material Federal
Income Tax Consequences--b. Residual Certificates--Mark to Market Rules,"
"--Excess Inclusions" and "Material Federal Income Tax Consequences--Tax
Related Restrictions on Transfers of Residual Certificates--Foreign Investors"
in the prospectus. Additionally, for information regarding Prohibited
Transactions and Treatment of Realized Losses, see "Material Federal Income Tax
Consequences--Prohibited Transactions and Other Taxes" and "--REMIC
Certificates--a. Regular Certificates--Treatment of Realized Losses" in the
prospectus.


                             ERISA CONSIDERATIONS

     Any fiduciary of an employee benefit or other plan or arrangement (such as
an individual retirement plan or Keogh plan) that is subject to the Employee
Retirement Income Security Act of 1974, as amended, or to Section 4975 of the
Code (a "Plan") that proposes to cause the Plan to acquire any of the offered
certificates is encouraged to consult with its counsel with respect to the
potential consequences of the Plan's acquisition and ownership of the
certificates under ERISA and Section 4975 of the Code. See "ERISA
Considerations" in the prospectus. Section 406 of ERISA prohibits "parties in
interest" with respect to an employee benefit plan subject to ERISA from
engaging in various different types of transactions involving the Plan and its
assets unless a statutory, regulatory or administrative exemption applies to
the transaction. Section 4975 of the Code imposes excise taxes on prohibited
transactions involving "disqualified persons" and Plans 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 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
those plans that is qualified and exempt from taxation under Sections 401(a)
and 501(a) of the Code may nonetheless be subject to the prohibited transaction
rules set forth in Section 503 of the 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 Credit Suisse First Boston Corporation (Prohibited Transaction
Exemption 89-90, as amended, Exemption Application No. D-6555, 54 Fed. Reg.
42597 (1989)) (the "Exemption") from some of the prohibited transaction rules
of ERISA and the related excise tax provisions of Section 4975 of the Code with
respect to the initial purchase, the holding and the subsequent resale by Plans
of certificates in pass-through trusts that consist of specified receivables,
loans and other obligations that meet the conditions and requirements of the
Exemption. The Exemption applies to mortgage loans such as the mortgage loans
in the trust fund.


                                      S-60
<PAGE>

     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 senior certificates (other than the Class PO, Class X
and Class A-R 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
(5%) of the mortgage loans included in the trust fund by aggregate unamortized
principal balance of the assets of the trust fund. BECAUSE THE CLASS PO AND
CLASS X CERTIFICATES ARE NOT BEING PURCHASED BY ANY UNDERWRITER TO WHOM AN
EXEMPTION SIMILAR TO THE EXEMPTION HAS BEEN GRANTED, THAT CLASS OF CERTIFICATES
DOES NOT CURRENTLY MEET THE REQUIREMENTS OF THE EXEMPTION OR ANY COMPARABLE
INDIVIDUAL ADMINISTRATIVE EXEMPTION GRANTED TO ANY UNDERWRITER. CONSEQUENTLY,
THE CLASS PO AND CLASS X CERTIFICATES MAY BE TRANSFERRED ONLY IF THE CONDITIONS
IN THE FIRST OR THIRD BULLET POINTS IN THE NEXT PARAGRAPH ARE MET.

     BECAUSE THE CHARACTERISTICS OF THE CLASS B-1, CLASS B-2, CLASS B-3 AND
CLASS A-R CERTIFICATES MAY NOT MEET THE REQUIREMENTS OF PROHIBITED TRANSACTION
CLASS EXEMPTION 83-1 ("PTE 83-1"), THE EXEMPTION, OR ANY OTHER ISSUED EXEMPTION
UNDER ERISA, A PLAN MAY HAVE ENGAGED IN A PROHIBITED TRANSACTION OR INCUR
EXCISE TAXES OR CIVIL PENALTIES IF IT PURCHASES AND HOLDS CLASS B-1, CLASS B-2,
CLASS B-3 OR CLASS A-R CERTIFICATES. CONSEQUENTLY, TRANSFERS OF THE CLASS B-1,
B-2 CLASS B-3 AND CLASS A-R CERTIFICATES WILL NOT BE REGISTERED BY THE TRUSTEE
UNLESS THE TRUSTEE RECEIVES:

    o A REPRESENTATION FROM THE TRANSFEREE OF THE CERTIFICATE, ACCEPTABLE TO
      AND IN FORM AND SUBSTANCE SATISFACTORY TO THE TRUSTEE, THAT THE TRANSFEREE
      IS NOT A PLAN, OR A PERSON ACTING ON BEHALF OF A PLAN OR USING A PLAN'S
      ASSETS TO EFFECT THE TRANSFER;

    o 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 DEFINED
      IN SECTION V(E) OF PROHIBITED TRANSACTION CLASS EXEMPTION 95-60 ("PTE
      95-60")) AND THAT THE PURCHASE AND HOLDING OF THE CERTIFICATES ARE COVERED
      UNDER SECTIONS I AND III OF PTE 95-60; OR

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

THIS REPRESENTATION SHALL BE CONSIDERED TO HAVE BEEN MADE TO THE TRUSTEE BY THE
TRANSFEREE'S ACCEPTANCE OF A CLASS B-1, CLASS B-2 OR CLASS B-3 CERTIFICATE. IF
THE REPRESENTATION IS NOT TRUE, OR ANY ATTEMPT TO TRANSFER TO A PLAN OR PERSON
ACTING ON BEHALF OF A PLAN OR USING THE PLAN'S ASSETS IS INITIATED WITHOUT THE
REQUIRED OPINION OF COUNSEL, THE ATTEMPTED TRANSFER OR ACQUISITION SHALL BE
VOID.

     Prospective Plan investors are encourged to consult with their legal
advisors concerning the impact of ERISA and the Code, the applicability of the
Exemption described in the prospectus, and the potential consequences in their
specific circumstances, before making an investment in any of the offered
certificates. Moreover, each Plan fiduciary is encouraged to determine whether,
under the general fiduciary standards of investment prudence and
diversification, an investment in any of the offered certificates is
appropriate for the Plan, taking into account the overall investment policy of
the Plan and the composition of the Plan's investment portfolio.


                            METHOD OF DISTRIBUTION

     Subject to the terms and conditions set forth in the Underwriting
Agreement between the depositor and Credit Suisse First Boston Corporation
("CSFB" or the "underwriter"), the depositor has agreed to sell the Offered
Certificates, other than the Class PO and Class X Certificates, to CSFB and
CSFB has agreed to purchase from the depositor the Offered Certificates, other
than the Class PO and Class X Certificates (together, the "Underwritten
Certificates"). Distribution of the Underwritten Certificates will be made by
CSFB from time to time in negotiated transactions or


                                      S-61
<PAGE>

otherwise at varying prices to be determined at the time of sale. In connection
with the sale of the Underwritten Certificates, the underwriter may be deemed
to have received compensation from the depositor in the form of underwriting
discounts.

     CSFB intends to make a secondary market in the Underwritten Certificates
but has no obligation to do so. There can be no assurance that a secondary
market for the Underwritten Certificates will develop or, if it does develop,
that it will continue or that it will provide certificateholders with a
sufficient level of liquidity of investment.

     The depositor has agreed to indemnify the underwriter against, or make
contributions to the underwriter with respect to, liabilities, customarily
indemnified against, including liabilities under the Securities Act of 1933, as
amended.

     The Class PO and Class X Certificates may be offered by the seller (or an
affiliate) or the depositor from time to time directly or through underwriters
or agents (either of which may include Countrywide Securities Corporation, an
affiliate of the depositor) in one or more negotiated transactions, or
otherwise, at varying prices to be determined at the time of sale, in one or
more separate transactions at prices to be negotiated at the time of each sale.
Any underwriters or agents that participate in the distribution of the Class PO
and Class X Certificates may be deemed to be "underwriters" within the meaning
of the Securities Act of 1933 and any profit on the sale of those Certificates
by them and any discounts, commissions, concessions or other compensation
received by any of them may be deemed to be underwriting discounts and
commissions under the Securities Act.


                                 LEGAL MATTERS

     The validity of the certificates, including their material federal income
tax consequences, will be passed upon for the depositor by Brown & Wood LLP,
New York, New York. Stroock & Stroock & Lavan LLP, New York, New York, will
pass upon certain legal matters on behalf of the underwriter.


                                    RATINGS

     It is a condition to the issuance of the senior certificates that they be
rated AAA by Fitch, Incorporated ("Fitch") and by Standard & Poor's ("S&P"). It
is a condition to the issuance of the Class B-1, Class B-2 and Class B-3
Certificates that they be rated at least AA, A, and BBB, respectively, by
Fitch.

     The ratings assigned by S&P to mortgage pass-through certificates address
the likelihood of the receipt of all distributions on the mortgage loans by the
related certificateholders under the agreements pursuant to which the
certificates are issued. S&P's ratings take into consideration the credit
quality of the related mortgage pool, including any credit support providers,
structural and legal aspects associated with the certificates, and the extent
to which the payment stream on the mortgage pool is adequate to make the
payments required by the certificates.

     The ratings assigned by Fitch to mortgage pass-through certificates
address the likelihood of the receipt by certificateholders of all
distributions to which they are entitled under the transaction structure.
Fitch's ratings reflect its analysis of the riskiness of the mortgage loans and
its analysis of the structure of the transaction as set forth in the operative
documents. Fitch's ratings do not address the effect on the certificates' yield
attributable to prepayments or recoveries on the underlying mortgage loans.
Further the ratings on the Class X Certificates do not address whether
investors will recoup their initial investments. The rating assigned by Fitch
to the Class PO Certificates only addresses the return of its Class Certificate
Balance. The rating assigned by Fitch to the Class A-R Certificates only
addresses the return of its Class Certificate Balance and interest thereon at
its stated pass-through rate.

     The ratings of the rating agencies do not address the possibility that, as
a result of principal prepayments, certificateholders may receive a lower than
anticipated yield.


                                      S-62
<PAGE>

     The security ratings assigned to the offered certificates should be
evaluated independently from similar ratings on other types of securities. 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 rating agencies.


     The depositor has not requested a rating of the offered certificates by
any rating agency other than the rating agencies; there can be no assurance,
however, as to whether any other rating agency will rate the offered
certificates or, if it does, what rating would be assigned by the other rating
agency. The rating assigned by the other rating agency to the offered
certificates could be lower than the respective ratings assigned by the rating
agencies.


                                      S-63
<PAGE>



                      [THIS PAGE INTENTIONALLY LEFT BLANK.]



<PAGE>

PROSPECTUS

                                  CWMBS, INC.
                                   DEPOSITOR

                       MORTGAGE PASS-THROUGH CERTIFICATES
                              (ISSUABLE IN SERIES)



PLEASE CAREFULLY CONSIDER OUR DISCUSSION OF SOME OF THE RISKS OF INVESTING IN
THE CERTIFICATES UNDER "RISK FACTORS" BEGINNING ON PAGE 5.

THE TRUSTS

Each trust will be established to hold assets in its trust fund transferred to
it by CWMBS, Inc. The assets in each trust fund will be specified in the
prospectus supplement for the particular trust and will generally consist of:

o    first lien mortgage loans secured by one- to four-family residential
     properties or participations in that type of loan,

o    mortgage pass-through securities issued or guaranteed by Ginnie Mae, Fannie
     Mae, or Freddie Mac, or

o    private mortgage-backed securities backed by first lien mortgage loans
     secured by one- to four-family residential properties or participations in
     that type of loan.

THE CERTIFICATES

CWMBS, Inc. will sell the certificates pursuant to a prospectus supplement. The
certificates will be grouped into one or more series, each having its own
distinct designation. Each series will be issued in one or more classes and each
class will evidence beneficial ownership of a specified portion of future
payments on the assets in the trust fund that the series relates to. A
prospectus supplement for a series will specify all of the terms of the series
and of each of the classes in the series.

OFFERS OF CERTIFICATES

The certificates may be offered through several different methods, including
offerings through underwriters.

                              -------------------

THE SEC AND STATE SECURITIES REGULATORS HAVE NOT APPROVED OR DISAPPROVED THESE
SECURITIES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

May 17, 1999




<PAGE>


         TABLE OF CONTENTS





                                 PAGE
                                 ----

Important Notice About
Information
    In This Prospectus and Each
    Accompanying Prospectus
    Supplement.................    4
Risk Factors...................    5
    Limited Source of
       Payments -- No Recourse
       to Sellers, Depositor or
       Servicer................    5
    Credit Enhancement May Not
       Be Sufficient To Protect
       You From Losses.........    6
    Losses on Balloon Payment
       Mortgages Are Borne By
       You.....................    7
    Nature of Mortgages........    7
    You Could Be Adversely
       Affected By Violations
       of Environmental Laws...    9
    Ratings of the Certificates
       Does Not Assure Their
       Payment.................    9
    Book-Entry Registration....   11
    Bankruptcy or Insolvency
       May Affect the Timing
       and Amount of
       Distributions on the
       Certificates............   11
The Trust Fund.................   14
    The Mortgage
       Loans -- General........   15
    Agency Securities..........   17
    Private Mortgage-Backed
       Securities..............   22
    Substitution of Mortgage
       Assets..................   23
    Available Information......   24
    Incorporation of Certain
       Documents by
       Reference...............   24
Use of Proceeds................   24
The Depositor..................   24
Mortgage Loan Program..........   25
    Underwriting Process.......   25
    Qualifications of
       Sellers.................   26
    Representations by Sellers;
       Repurchases.............   26
Description of the
  Certificates.................   27
    General....................   28
    Distributions on
       Certificates............   30
    Advances...................   31
    Reports to
       Certificateholders......   32
    Categories of Classes of
       Certificates............   33
    Indices Applicable to
       Floating Rate and
       Inverse Floating Rate
       Classes.................   35
    Book-Entry Certificates....   38
Credit Enhancement.............   40
    General....................   40
    Subordination..............   40
    Mortgage Pool Insurance
       Policies................   40
    Special Hazard Insurance
       Policies................   42
    Bankruptcy Bonds...........   42
    Reserve Fund...............   43
    Cross Support..............   43
    Insurance Policies, Surety
       Bonds and Guaranties....   44
    Over-Collateralization.....   44
Yield and Prepayment
  Considerations...............   44
The Pooling and Servicing
  Agreement....................   45
    Assignment of Mortgage
       Assets..................   45
    Payments on Mortgage
       Assets; Deposits to
       Certificate Account.....   47
    Collection Procedures......   49
    Hazard Insurance...........   50
    Realization Upon Defaulted
       Mortgage Loans..........   51
    Servicing and Other
       Compensation and Payment
       of Expenses.............   54
    Evidence as to
       Compliance..............   55
    List of
       Certificateholders......   55
    Certain Matters Regarding
       the Master Servicer and
       the Depositor...........   55
    Events of Default..........   56
    Rights Upon Event of
       Default.................   57
    Amendment..................   57
    Termination; Optional
       Termination.............   58
    The Trustee................   58



                                       2



<PAGE>







                                 PAGE
                                 ----

Certain Legal Aspects of the
  Mortgage Loans...............   59
    General....................   59
    Foreclosure and
       Repossession............   60
    Rights of Redemption.......   62
    Anti-Deficiency Legislation
       and Other Limitations on
       Lenders.................   62
    Environmental Risks........   63
    Due-on-Sale Clauses........   64
    Prepayment Charges.........   64
    Applicability of Usury
       Laws....................   64
    Soldiers' and Sailors'
       Civil Relief Act........   65
Material Federal Income Tax
  Consequences.................   66
    General....................   66
    Non-REMIC Certificates.....   66
    REMIC Certificates.........   74
    Prohibited Transactions and
       Other Taxes.............   86
    Liquidation and
       Termination.............   86
    Administrative Matters.....   87
    Tax-Exempt Investors.......   87
    Non-U.S. Persons...........   87
    Tax-Related Restrictions on
       Transfers of Residual
       Certificates............   88
State Tax Considerations.......   89
ERISA Considerations...........   89
Legal Investment...............   93
Method of Distribution.........   94
Legal Matters..................   95
Financial Information..........   95
Rating.........................   95
Index to Defined Terms.........   96



                                       3






<PAGE>






         IMPORTANT NOTICE ABOUT INFORMATION IN THIS PROSPECTUS AND EACH
                       ACCOMPANYING PROSPECTUS SUPPLEMENT

    Information about each series of certificates is contained in two separate
documents:

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

o    the accompanying prospectus supplement for a particular series, which
     describes the specific terms of the certificates of that series.

The prospectus supplement will contain information about a particular series
that supplements the information contained in this prospectus, and you should
rely on that supplementary information in the prospectus supplement.

    You should rely only on the information in this prospectus and the
accompanying prospectus supplement. We have not authorized anyone to provide you
with information that is different from that contained in this prospectus and
the accompanying prospectus supplement.

                               -------------------

    If you require additional information, the mailing address of our principal
executive offices is CWMBS, Inc., 4500 Park Granada, Calabasas, California 91302
and the telephone number is (818) 225-3000. For other means of acquiring
additional information about us or a series of securities, see "The Trust Fund
-- Incorporation of Certain Documents by Reference" beginning on page 24.

                                       4

<PAGE>






                                  RISK FACTORS

    You should carefully consider the following information since it identifies
significant risks associated with an investment in the certificates.

<TABLE>
<CAPTION>

<S>                                   <C>
LIMITED SOURCE OF PAYMENTS --         The applicable prospectus supplement may provide that
  NO RECOURSE TO SELLERS,             certificates will be payable from other trust funds in
  DEPOSITOR OR SERVICER               addition to their associated trust fund, but if it does not,
                                      they will be payable solely from their associated trust
                                      fund. If the trust fund does not have sufficient assets to
                                      distribute the full amount due to you as a
                                      certificateholder, your yield will be impaired, and perhaps
                                      even the return of your principal may be impaired, without
                                      your having recourse to anyone else. Furthermore, at the
                                      times specified in the applicable prospectus supplement,
                                      certain assets of the trust fund may be released and paid
                                      out to other people, such as the depositor, a servicer, a
                                      credit enhancement provider, or any other person entitled to
                                      payments from the trust fund. Those assets will no longer be
                                      available to make payments to you. Those payments are
                                      generally made after other specified payments that may be
                                      set forth in the applicable prospectus supplement have been
                                      made.

                                      You will not have any recourse against the depositor or any
                                      servicer if you do not receive a required distribution on
                                      the certificates. Nor will you have recourse against the
                                      assets of the trust fund of any other series of
                                      certificates.

                                      The certificates will not represent an interest in the
                                      depositor, any servicer, any seller to the depositor, or any
                                      one else except the trust fund. The only obligation of the
                                      depositor to a trust fund comes from certain representations
                                      and warranties made by it about assets transferred to the
                                      trust fund. If these representations and warranties turn out
                                      to be untrue, the depositor may be required to repurchase
                                      some of the transferred assets. CWMBS, Inc., which is the
                                      depositor, does not have significant assets and is unlikely
                                      to have significant assets in the future. So if the
                                      depositor were required to repurchase a loan because of a
                                      breach of a representation, its only sources of funds for
                                      the repurchase would be:


                                       5
<PAGE>


<CAPTION>

<S>                                   <C>
                                   o    funds obtained from enforcing a corresponding obligation of
                                        a seller or originator of the loan, or

                                   o    funds from a reserve fund or similar credit enhancement
                                        established to pay for loan repurchases.

                                   The only obligations of the master servicer to a trust fund
                                   (other than its master servicing obligations) comes from certain
                                   representations and warranties made by it in connection with its
                                   loan servicing activities. If these representations and
                                   warranties turn out to be untrue, the master servicer may be
                                   required to repurchase some of the loans. However, the master
                                   servicer may not have the financial ability to make the required
                                   repurchase.

                                   The only obligations to a trust fund of a seller of loans to the
                                   depositor comes from certain representations and warranties made
                                   by it in connection with its sale of the loans and certain
                                   document delivery requirements. If these representations and
                                   warranties turn out to be untrue, or the seller fails to deliver
                                   required documents, it may be required to repurchase some of the
                                   loans. However, the seller may not have the financial ability to
                                   make the required repurchase.

CREDIT ENHANCEMENT MAY NOT         Credit enhancement is intended to reduce the effect of loan
BE SUFFICIENT                      losses. But credit enhancements may benefit only some
TO PROTECT YOU FROM LOSSES         classes of a series of certificates and the amount of any
                                   credit enhancement will be limited as described in the
                                   applicable prospectus supplement. Furthermore, the amount of
                                   a credit enhancement may decline over time pursuant to a
                                   schedule or formula or otherwise, and could be depleted from
                                   payments or for other reasons before the certificates
                                   covered by the credit enhancement are paid in full. In
                                   addition, a credit enhancement may not cover all potential
                                   sources of loss. For example, a credit enhancement may or
                                   may not cover fraud or negligence by a loan originator or
                                   other parties. Also, the trustee may be permitted to reduce,
                                   substitute for, or even eliminate all or a portion of a
                                   credit enhancement so long as the rating agencies that have
                                   rated the certificates at the request of the depositor
                                   indicate that that would not cause them to change







                                       6
<PAGE>


<CAPTION>




<S>                                <C>

                                   adversely their rating of the certificates. Consequently,
                                   certificateholders may suffer losses even though a credit
                                   enhancement exists and its provider does not default.

LOSSES ON BALLOON PAYMENT          Some of the underlying loans may not be fully amortizing
  MORTGAGES ARE BORNE BY YOU       over their terms to maturity and, thus, will require
                                   substantial principal payments (that is, balloon payments)
                                   at their stated maturity. Loans with balloon payments
                                   involve a greater degree of risk than fully amortizing loans
                                   because typically the borrower must be able to refinance the
                                   loan or sell the property to make the balloon payment at
                                   maturity. The ability of a borrower to do this will depend
                                   on such factors as mortgage rates at the time of sale or
                                   refinancing, the borrower's equity in the property, the
                                   relative strength of the local housing market, the financial
                                   condition of the borrower, and tax laws. Losses on these
                                   loans that are not otherwise covered by a credit enhancement
                                   will be borne by the holders of one or more classes of
                                   certificates.


NATURE OF MORTGAGES                The value of the properties underlying the loans held in the
    Declines in Property Values    trust fund may decline over time. Among the factors that
    May Adversely Affect You       could adversely affect the value of the properties are:

                                    o    an overall decline in the residential real estate market in
                                         the areas in which they are located,

                                    o    a decline in their general condition from the failure of
                                         borrowers to maintain their property adequately, and

                                    o    natural disasters that are not covered by insurance, such as
                                         earthquakes and floods.

                                   If property values decline, the actual rates of delinquencies,
                                   foreclosures, and losses on all underlying loans could be higher
                                   than those currently experienced in the mortgage lending industry
                                   in general. These losses, to the extent not otherwise covered by
                                   a credit enhancement, will be borne by the holder of one or more
                                   classes of certificates.

    Delays In Liquidation May        Even if the properties underlying the loans held in the
    Adversely Affect You             trust fund provide adequate security for the loans,
                                     substantial delays could occur before defaulted loans are
                                     liquidated and their proceeds are forwarded to investors.
                                     Property foreclosure actions are regulated





                                       7

<PAGE>

<CAPTION>


<S>                                    <C>
                                       by state statutes and rules and are subject to many of the
                                       delays and expenses of other lawsuits if defenses or
                                       counterclaims are made, sometimes requiring several years to
                                       complete. Furthermore, in some states if the proceeds of the
                                       foreclosure are insufficient to repay the loan, the borrower
                                       is not liable for the deficit. Thus, if a borrower defaults,
                                       these restrictions may impede the trust's ability to dispose
                                       of the property and obtain sufficient proceeds to repay the
                                       loan in full. In addition, the servicer will be entitled to
                                       deduct from liquidation proceeds all expenses reasonably
                                       incurred in attempting to recover on the defaulted loan,
                                       including legal fees and costs, real estate taxes, and
                                       property maintenance and preservation expenses.

    Disproportionate Effect of         Liquidation expenses of defaulted loans generally do not
    Liquidation Expenses May           vary directly with the outstanding principal balance of the
    Adversely Affect You               loan at the time of default. Therefore, if a servicer takes
                                       the same steps for a defaulted loan having a small remaining
                                       principal balance as it does for a defaulted loan having a
                                       large remaining principal balance, the amount realized after
                                       expenses is smaller as a percentage of the outstanding
                                       principal balance of the small loan than it is for the
                                       defaulted loan having a large remaining principal balance.

    Consumer Protection Laws           State laws generally regulate interest rates and other
    May Adversely Affect You           charges, require certain disclosures, and require licensing
                                       of mortgage loan originators and servicers. In addition,
                                       most states have other laws and public policies for the
                                       protection of consumers that prohibit unfair and deceptive
                                       practices in the origination, servicing, and collection of
                                       mortgage loans. Depending on the particular law and the
                                       specific facts involved, violations may limit the ability to
                                       collect all or part of the principal or interest on the
                                       underlying loans held in the trust fund. In some cases, the
                                       borrower may even be entitled to a refund of amounts
                                       previously paid.

                                       The loans held in the trust fund may also be subject to
                                       certain federal laws, including:

                                       o    the Federal Truth in Lending Act and its regulations,
                                            which require disclosures to the




                                       8
<PAGE>


<CAPTION>

<S>                               <C>

                                  borrowers regarding the terms of any mortgage loan;

                                  o    the Equal Credit Opportunity Act and its regulations,
                                       which prohibit discrimination in the extension of
                                       credit on the basis of age, race, color, sex, religion,
                                       marital status, national origin, receipt of public
                                       assistance, or the exercise of any right under the
                                       Consumer Credit Protection Act; and

                                  o    the Fair Credit Reporting Act, which regulates the use
                                       and reporting of information related to the borrowers
                                       credit experience.

                                  Some violations of these federal laws may limit the ability
                                  to collect the principal or interest on the loans held in
                                  the trust fund, and in addition could subject the trust fund
                                  to damages and administrative enforcement. Losses on loans
                                  from the application of those laws that are not otherwise
                                  covered by a credit enhancement will be borne by the holders
                                  of one or more classes of certificates.

YOU COULD BE ADVERSELY            Federal, state, and local laws and regulations impose a wide
AFFECTED BY VIOLATIONS OF         range of requirements on activities that may affect the
ENVIRONMENTAL LAWS                environment, health, and safety. In certain circumstances,
                                  these laws and regulations impose obligations on owners or
                                  operators of residential properties such as those that
                                  secure the loans held in the trust fund. Failure to comply
                                  with these laws and regulations can result in fines and
                                  penalties that could be assessed against the trust as owner
                                  of the related property.

                                  In some states, a lien on the property due to contamination
                                  has priority over the lien of an existing mortgage. Also, a
                                  mortgage lender may be held liable as an "owner" or
                                  "operator" for costs associated with the release of
                                  petroleum from an underground storage tank under certain
                                  circumstances. If the trust is considered the owner or
                                  operator of a property, it will suffer losses as a result of
                                  any liability imposed for environmental hazards on the
                                  property.

RATINGS OF THE CERTIFICATES       Any class of certificates issued under this prospectus and
DOES NOT ASSURE THEIR             the accompanying prospectus supplement will be rated in one
PAYMENT                           of the four highest rating categories of at least one
                                  nationally recognized rating agency. A






                                       9
<PAGE>


<CAPTION>

<S>                 <C>

                    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 certificates will receive the
                    payments to which they are entitled. A rating does not
                    constitute an 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
                    certificates will be redeemed early. A rating is not a
                    recommendation to purchase, hold, or sell certificates
                    because it does not address the market price of the
                    certificates or the suitability of the certificates 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,

                    o    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 certificates will be determined
                    on the basis of criteria established by each rating agency
                    rating classes of the certificates. These criteria are
                    sometimes based upon an actuarial analysis of the behavior
                    of similar loans in a larger group. That analysis is often
                    the basis upon 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 particular pool of mortgage loans. Mortgaged properties
                    may not retain their values. If residential real estate
                    markets experience an overall decline in property values
                    such that the outstanding principal balances of the loans
                    held in a particular trust fund


                                       10

<PAGE>

<CAPTION>
<S>                                        <C>

                                           and any secondary financing on the related mortgaged
                                           properties become equal to or greater than the value of the
                                           mortgaged properties, the rates of delinquencies,
                                           foreclosures, and losses could be higher than those now
                                           generally experienced in the mortgage lending industry. In
                                           addition, adverse economic conditions may affect timely
                                           payment by mortgagors on their loans whether or not the
                                           conditions affect real property values and, accordingly, the
                                           rates of delinquencies, foreclosures, and losses in any
                                           trust fund. Losses from this that are not covered by a
                                           credit enhancement will be borne, at least in part, by the
                                           holders of one or more classes of certificates.

BOOK-ENTRY REGISTRATION                    Certificates issued in book-entry form may have only limited
  Limit on Liquidity                       liquidity in the resale market, since investors may be
                                           unwilling to purchase certificates for which they cannot
                                           obtain physical instruments.

  Limit on Ability to Transfer             Transactions in book-entry certificates can be effected only
  or Pledge                                through The Depository Trust Company, its participating
                                           organizations, its indirect participants, and certain banks.
                                           Therefore, your ability to transfer or pledge certificates
                                           issued in book-entry form may be limited.

  Delays in Distributions                  You may experience some delay in the receipt of
                                           distributions on book-entry certificates since the
                                           distributions will be forwarded by the trustee to The
                                           Depository Trust Company for it to credit the accounts of
                                           its participants. In turn, these participants will then
                                           credit the distributions to your account either directly or
                                           indirectly through indirect participants.

BANKRUPTCY OR INSOLVENCY MAY               The seller and the depositor will treat the transfer of the
AFFECT THE TIMING AND AMOUNT               loans held in the trust fund by the seller to the depositor
OF DISTRIBUTIONS ON THE                    as a sale for accounting purposes. The depositor and the
CERTIFICATES                               trust fund will treat the transfer of the loans from the
                                           depositor to the trust fund as a sale for accounting
                                           purposes. If these characterizations are correct, then if
                                           the seller were to become bankrupt, the loans would not be
                                           part of the seller's bankruptcy estate and would not be
                                           available to the seller's creditors. On the other hand, if
                                           the seller becomes bankrupt, its bankruptcy trustee or one
                                           of its creditors may attempt to recharacterize the sale


                                       11

<PAGE>

<CAPTION>
<S>                 <C>

                    of the loans as a borrowing by the seller, secured by a
                    pledge of the loans. Presenting this position to a
                    bankruptcy court could prevent timely payments on the
                    certificates and even reduce the payments on the
                    certificates. Similarly, if the characterizations of the
                    transfers as sales are correct, then if the depositor were
                    to become bankrupt, the loans would not be part of the
                    depositor's bankruptcy estate and would not be available to
                    the depositor's creditors. On the other hand, if the
                    depositor becomes bankrupt, its bankruptcy trustee or one of
                    its creditors may attempt to recharacterize the sale of the
                    loans as a borrowing by the depositor, secured by a pledge
                    of the loans. Presenting this position to a bankruptcy court
                    could prevent timely payments on the certificates and even
                    reduce the payments on the certificates.

                    If the master servicer becomes bankrupt, the bankruptcy
                    trustee may have the power to prevent the appointment of a
                    successor master servicer. The period during which cash
                    collections may be commingled with the master servicer's own
                    funds before each distribution date for certificates will be
                    specified in the applicable prospectus supplement. If the
                    master servicer becomes bankrupt and cash collections have
                    been commingled with the master servicer's own funds for at
                    least ten days, the trust fund will likely not have a
                    perfected interest in those collections. In this case the
                    trust might be an unsecured creditor of the master servicer
                    as to the commingled funds and could recover only its share
                    as a general creditor, which might be nothing. Collections
                    commingled less than ten days but still in an account of the
                    master servicer might also be included in the bankruptcy
                    estate of the master servicer even though the trust may have
                    a perfected security interest in them. Their inclusion in
                    the bankruptcy estate of the master servicer may result in
                    delays in payment and failure to pay amounts due on the
                    certificates.

                    Federal and state statutory provisions affording protection
                    or relief to distressed borrowers may affect the ability of
                    the secured mortgage lender to realize upon its security in
                    other situations as well. For example, in a proceeding under
                    the federal Bankruptcy Code, a lender may not foreclose on a
                    mortgaged property without the permission of the


                                       12


<PAGE>

<CAPTION>
<S>                 <C>

                    bankruptcy court. And in certain instances a bankruptcy
                    court may allow a borrower to reduce the monthly payments,
                    change the rate of interest, and alter the mortgage loan
                    repayment schedule for under collateralized mortgage loans.
                    The effect of these types of proceedings can be to cause
                    delays in receiving payments on the loans underlying
                    certificates and even to reduce the aggregate amount of
                    payments on the loans underlying certificates.

                    Certain capitalized terms are used in this prospectus to
                    assist you in understanding the terms of the certificates.
                    The capitalized terms used in this prospectus are defined on
                    the pages indicated under the caption "Index to Defined
                    Terms" on page 96.

</TABLE>

                                       13

<PAGE>


                                THE TRUST FUND*

    This prospectus relates to Mortgage Pass-Through Certificates, which may be
sold from time to time in one or more series by the depositor, CWMBS, Inc., on
terms determined at the time of sale and described in this prospectus and the
related prospectus supplement. Each series will be issued under a separate
pooling and servicing agreement to be entered into with respect to each series.
The certificates of a series will evidence beneficial ownership of a trust fund.
The trust fund for a series of certificates will include certain mortgage
related assets (the "Mortgage Assets") consisting of

    o    a pool of first lien mortgage loans (or participation interests in
         them) secured by one- to four-family residential properties,

    o    mortgage pass-through securities (the "Agency Securities") issued or
         guaranteed by Ginnie Mae, Fannie Mae or Freddie Mac or

    o    other mortgage pass-through certificates or collateralized mortgage
         obligations (the "Private Mortgage-Backed Securities") evidencing an
         interest in, or secured by, mortgage loans of the type that would
         otherwise be eligible to be mortgage loans.

The Mortgage Assets will be acquired by the depositor, either directly or
indirectly, from one or more institutions, which may be affiliates of the
depositor, and conveyed by the depositor to the related trust fund. The trustee
for each series of certificates will be specified in the related prospectus
supplement. See "The Pooling and Servicing Agreement" for a description of the
trustee's rights and obligations. The entity or entities named as master
servicer in the related prospectus supplement, which may be an affiliate of the
depositor. See "The Pooling and Servicing Agreement -- Certain Matters Regarding
the Master Servicer and the Depositor." The mortgage loans will be secured by
first mortgage liens on one- to four-family residential properties and, if so
specified in the related prospectus supplement, may include cooperative
apartment loans secured by security interests in shares issued by private,
nonprofit, cooperative housing corporations and in the related proprietary
leases or occupancy agreements granting exclusive rights to occupy specific
dwelling units in the cooperatives' buildings. In addition, the Mortgage Assets
of the related trust fund may include mortgage participation certificates
evidencing interests in mortgage loans. The mortgage loans may be conventional
loans (i.e., loans that are not insured or guaranteed by any governmental
agency), insured by the FHA or partially guaranteed by the VA as specified in
the related prospectus supplement. All or a portion of the mortgage loans in a
mortgage pool may be insured by FHA insurance and may be partially guaranteed by
the VA.

    The certificates will be entitled to payment from the assets of the related
trust fund or other assets pledged for the benefit of the holders of the
certificates as specified in the related prospectus supplement and will not be
entitled to payments in respect of the assets of any other trust fund
established by the depositor. The applicable prospectus supplement may specify
the Mortgage Assets that a trust fund will consist of, but if it does not, the
Mortgage Assets of any trust fund will consist of mortgage loans, Agency
Securities or Private Mortgage-Backed Securities but not a combination of them.
Mortgage loans acquired by the depositor will have been originated in accordance
with the underwriting criteria specified below under "Mortgage Loan Program --
Underwriting Standards" or as otherwise described in a related prospectus
supplement.

    The following is a brief description of the Mortgage Assets expected to be
included in the trust funds. If specific information about the Mortgage Assets
is not known at the time the related series of certificates initially is
offered, more general information of the nature described below will be provided
in the related prospectus supplement, and specific information will be set forth
in a report on Form 8-K to be filed with the SEC within fifteen days after the
initial issuance of the certificates. A maximum of 5% of the Mortgage Assets as
they will be constituted at the time that the applicable detailed description of

---------
* Whenever the terms mortgage pool and certificates are used in this prospectus,
  those terms will be considered to apply, unless the context indicates
  otherwise, to one specific mortgage pool and the certificates representing
  certain undivided interests in a single trust fund consisting primarily of the
  Mortgage Assets in the mortgage pool. Similarly, the term pass-through rate
  will refer to the pass- through rate borne by the certificates of one specific
  series and the term trust fund will refer to one specific trust fund.

                                       14


<PAGE>





Mortgage Assets is filed will deviate in any material respect from the Mortgage
Asset pool characteristics described in the related prospectus supplement, other
than the aggregate number or amount of mortgage loans. A schedule of the
Mortgage Assets relating to the series will be attached to the pooling and
servicing agreement delivered to the trustee upon delivery of the certificates.

THE MORTGAGE LOANS -- GENERAL

     The real property that secures repayment of the mortgage loans is referred
to collectively as mortgaged properties. The mortgaged properties will be
located in any one of the fifty states, the District of Columbia, Guam, Puerto
Rico or any other territory of the United States. Mortgage loans with certain
Loan-to-Value Ratios or certain principal balances or both may be covered wholly
or partially by primary mortgage guaranty insurance policies. The existence,
extent and duration of coverage will be described in the applicable prospectus
supplement.

     The applicable prospectus supplement may specify the day on which monthly
payments on the mortgage loans in a mortgage pool will be due, but if it does
not, all of the mortgage loans in a mortgage pool will have monthly payments due
on the first day of each month. The payment terms of the mortgage loans to be
included in a trust fund will be described in the related prospectus supplement
and may include any of the following features or combination thereof or other
features described in the related prospectus supplement:

     o    Interest may be payable at a fixed rate, a rate adjustable from time
          to time in relation to an index (which will be specified in the
          related prospectus supplement), a rate that is fixed for a period of
          time or under certain circumstances and is followed by an adjustable
          rate, a rate that otherwise varies from time to time, or a rate that
          is convertible from an adjustable rate to a fixed rate. Changes to an
          adjustable rate may be subject to periodic limitations, maximum rates,
          minimum rates or a combination of the limitations. Accrued interest
          may be deferred and added to the principal of a loan for the periods
          and under the circumstances as may be specified in the related
          prospectus supplement.

     o    Principal may be payable on a level debt service basis to fully
          amortize the mortgage loan over its term, may be calculated on the
          basis of an assumed amortization schedule that is significantly longer
          than the original term to maturity or on an interest rate that is
          different from the interest rate specified in its mortgage note or may
          not be amortized during all or a portion of the original term. Payment
          of all or a substantial portion of the principal may be due on
          maturity, called balloon payments. Principal may include interest that
          has been deferred and added to the principal balance of the mortgage
          loan.

     o    Monthly payments of principal and interest may be fixed for the life
          of the mortgage loan, may increase over a specified period of time or
          may change from period to period. The terms of a mortgage loan may
          include limits on periodic increases or decreases in the amount of
          monthly payments and may include maximum or minimum amounts of monthly
          payments.

     o    The mortgage loans generally may be prepaid at any time without the
          payment of any prepayment fee. If so specified in the related
          prospectus supplement, some prepayments of principal may be subject to
          a prepayment fee, which may be fixed for the life of the mortgage loan
          or may decline over time, and may be prohibited for the life of the
          mortgage loan or for certain periods, which are called lockout
          periods. Certain mortgage loans may permit prepayments after
          expiration of the applicable lockout period and may require the
          payment of a prepayment fee in connection with any subsequent
          prepayment. Other mortgage loans may permit prepayments without
          payment of a fee unless the prepayment occurs during specified time
          periods. The loans may include "due-on-sale" clauses that permit the
          mortgagee to demand payment of the entire mortgage loan in connection
          with the sale or certain transfers of the related mortgaged property.
          Other mortgage loans may be assumable by persons meeting the then
          applicable underwriting standards of the seller.

     A trust fund may contain buydown loans that include provisions whereby a
third party partially subsidizes the monthly payments of the obligors on the
mortgage loans during the early years of the mortgage loans, the difference to
be made up from a buydown fund contributed by the third party at the time of
origination of the mortgage loan. A buydown fund will be in an amount equal
either to the

                                       15
<PAGE>

discounted value or full aggregate amount of future payment subsidies.
Thereafter, buydown funds are applied to the applicable mortgage loan upon
receipt by the master servicer of the mortgagor's portion of the monthly payment
on the mortgage loan. The master servicer administers the buydown fund to ensure
that the monthly allocation from the buydown fund combined with the monthly
payment received from the mortgagor equals the scheduled monthly payment on the
applicable mortgage loan. The underlying assumption of buydown plans is that the
income of the mortgagor will increase during the buydown period as a result of
normal increases in compensation and inflation, so that the mortgagor will be
able to meet the full mortgage payments at the end of the buydown period. To the
extent that this assumption as to increased income is not fulfilled, the
possibility of defaults on buydown loans is increased. The related prospectus
supplement will contain information with respect to any Buydown Loan concerning
limitations on the interest rate paid by the mortgagor initially, on annual
increases in the interest rate and on the length of the buydown period.

     Each prospectus supplement will contain information, as of the date of the
prospectus supplement and to the extent then specifically known to the
depositor, with respect to the mortgage loans contained in the related mortgage
pool, including

     o    the aggregate outstanding principal balance and the average
          outstanding principal balance of the mortgage loans as of the first
          day of the month of issuance of the related series of certificates or
          another date specified in the related prospectus supplement called a
          cut-off date,

     o    the type of property securing the mortgage loans (e.g., separate
          residential properties, individual units in condominium apartment
          buildings or in buildings owned by cooperatives, vacation and second
          homes),

     o    the original terms to maturity of the mortgage loans,

     o    the largest principal balance and the smallest principal balance of
          any of the mortgage loans,

     o    the earliest origination date and latest maturity date of any of the
          mortgage loans,

     o    the aggregate principal balance of mortgage loans having Loan-to-Value
          Ratios at origination exceeding 80%,

     o    the maximum and minimum per annum mortgage rates and

     o    the geographical distribution of the mortgage loans. If specific
          information respecting the mortgage loans is not known to the
          depositor at the time the related certificates are initially offered,
          more general information of the nature described above will be
          provided in the detailed description of Mortgage Assets.

     The "Loan-to-Value Ratio" of a mortgage loan at any given time is the
fraction, expressed as a percentage, the numerator of which is the original
principal balance of the related mortgage loan and the denominator of which is
the collateral value of the related mortgaged property. The applicable
prospectus supplement may specify how the collateral value of a mortgaged
property will be calculated, but if it does not, the collateral value of a
mortgaged property is the lesser of the sales price for the property and the
appraised value determined in an appraisal obtained by the originator at
origination of the mortgage loan.

     No assurance can be given that values of the mortgaged properties have
remained or will remain at their levels on the dates of origination of the
related mortgage loans. If the residential real estate market should experience
an overall decline in property values such that the outstanding principal
balances of the mortgage loans, and any secondary financing on the mortgaged
properties, in a particular mortgage pool become equal to or greater than the
value of the mortgaged properties, the actual rates of delinquencies,
foreclosures and losses could be higher than those now generally experienced in
the mortgage lending industry. In addition, adverse economic conditions and
other factors (which may or may not affect real property values) may affect the
timely payment by mortgagors of scheduled payments of principal and interest on
the mortgage loans and, accordingly, the actual rates of delinquencies,
foreclosures and losses with respect to any mortgage pool. To the extent that
the losses are not covered by subordination provisions or alternative
arrangements, the losses will be borne, at least in part, by the holders of the
certificates of the related series.

     The depositor will cause the mortgage loans comprising each mortgage pool
to be assigned to the trustee named in the related prospectus supplement for the
benefit of the certificateholders of the related

                                       16



<PAGE>




series. The master servicer named in the related prospectus supplement will
service the mortgage loans, either directly or through sub-servicers, pursuant
to the pooling and servicing agreement, and will receive a fee for its services.
See "Mortgage Loan Program" and "The Pooling and Servicing Agreement." With
respect to mortgage loans serviced by the master servicer through a
sub-servicer, the master servicer will remain liable for its servicing
obligations under the related pooling and servicing agreement as if the master
servicer alone were servicing the mortgage loans.

    The applicable prospectus supplement may provide for additional obligations
of the depositor, but if it does not, the only obligations of the depositor with
respect to a series of certificates will be to obtain certain representations
and warranties from the sellers and to assign to the trustee for the series of
certificates the depositor's rights with respect to the representations and
warranties. See "The Pooling and Servicing Agreement -- Assignment of Mortgage
Assets." The obligations of the master servicer with respect to the mortgage
loans will consist principally of its contractual servicing obligations under
the related pooling and servicing agreement (including its obligation to enforce
the obligations of the sub-servicers or sellers, or both, as more fully
described under "Mortgage Loan Program -- Representations by Sellers;
Repurchases" and its obligation to make cash advances upon delinquencies in
payments on or with respect to the mortgage loans in the amounts described under
"Description of the Certificates -- Advances." The obligations of the master
servicer to make advances may be subject to limitations, to the extent provided
in this prospectus and in the related prospectus supplement. The master servicer
may also be a seller in which case a breach of its obligations in one capacity
will not constitute a breach of its obligations in the other capacity.

    The mortgage loans will consist of mortgage loans, deeds of trust or
participations or other beneficial interests therein, secured by first liens on
one- to four-family residential properties and, if so specified in the related
prospectus supplement, may include cooperative apartment loans secured by
security interests in shares issued by private, non-profit, cooperative housing
corporations and in the related proprietary leases or occupancy agreements
granting exclusive rights to occupy specific dwelling units in the cooperatives'
buildings. In addition, Mortgage Assets of the related trust fund may include
mortgage participation certificates evidencing interests in mortgage loans.
These loans may be conventional loans (i.e., loans that are not insured or
guaranteed by any governmental agency) or loans insured by the FHA or partially
guaranteed by the VA, as specified in the related prospectus supplement. The
mortgaged properties relating to mortgage loans will consist of detached or
semi-detached one-family dwelling units, two- to four-family dwelling units,
townhouses, rowhouses, individual condominium units, individual units in planned
unit developments and certain other dwelling units. The mortgaged properties may
include vacation and second homes, investment properties and leasehold
interests. In the case of leasehold interests, the applicable prospectus
supplement may specify that the term of the leasehold may be less than five
years beyond the scheduled maturity of the mortgage loan, but if it does not,
the term of the leasehold will exceed the scheduled maturity of the mortgage
loan by at least five years.

AGENCY SECURITIES

    Government National Mortgage Association. Ginnie Mae is a wholly-owned
corporate instrumentality of the United States with the United States Department
of Housing and Urban Development. Section 306(g) of Title II of the National
Housing Act of 1934, as amended, authorizes Ginnie Mae to guarantee the timely
payment of the principal of and interest on certificates that represent an
interest in a pool of mortgage loans insured by the FHA under the National
Housing Act of 1934 or Title V of the Housing Act of 1949, or partially
guaranteed by the VA under the Servicemen's Readjustment Act of 1944, as
amended, or Chapter 37 of Title 38, United States Code.

    Section 306(g) of the National Housing Act of 1934 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 guaranty under this subsection." In
order to meet its obligations under that guaranty, Ginnie Mae may, under Section
306(d) of the National Housing Act of 1934, borrow from the United States
Treasury in an unlimited amount which is at any time sufficient to enable Ginnie
Mae to perform its obligations under its guarantee.

    Ginnie Mae Certificates. Each Ginnie Mae certificate held in a trust fund
will be a "fully modified pass-through" mortgage backed certificate issued and
serviced by a Ginnie Mae issuer approved by Ginnie

                                       17


<PAGE>





Mae or by Fannie Mae as a seller-servicer of FHA loans or VA loans. The Ginnie
Mae certificates may be issued under either the Ginnie Mae I program or the
Ginnie Mae II program. The mortgage loans underlying the Ginnie Mae certificates
will consist of FHA loans or VA loans. Each mortgage loan is secured by a one-
to four-family or multifamily residential property. Ginnie Mae will approve the
issuance of each Ginnie Mae certificate in accordance with a guaranty agreement
between Ginnie Mae and the Ginnie Mae issuer. Pursuant to its guaranty
agreement, a Ginnie Mae issuer will be required to advance its own funds in
order to make timely payments of all amounts due on each Ginnie Mae certificate
if the payments received by the Ginnie Mae issuer on the FHA loans or VA loans
underlying each Ginnie Mae certificate are less than the amounts due on each
Ginnie Mae certificate.

    The full and timely payment of principal of and interest on each Ginnie Mae
certificate will be guaranteed by Ginnie Mae, which obligation is backed by the
full faith and credit of the United States. Each Ginnie Mae certificate will
have an original maturity of not more than 30 years (but may have original
maturities of substantially less than 30 years). Each Ginnie Mae certificate
will be based on and backed by a pool of FHA loans or VA loans secured by one to
four-family residential properties and will provide for the payment by or on
behalf of the Ginnie Mae issuer to the registered holder of the Ginnie Mae
certificate of scheduled monthly payments of principal and interest equal to the
registered holder's proportionate interest in the aggregate amount of the
monthly principal and interest payment on each FHA loan or VA loan underlying
the Ginnie Mae certificate, less the applicable servicing and guaranty fee,
which together equal the difference between the interest on the FHA loan or VA
loan and the pass-through rate on the Ginnie Mae certificate. In addition, each
payment will include proportionate pass-through payments of any prepayments of
principal on the FHA loans or VA loans underlying the Ginnie Mae certificate and
liquidation proceeds upon a foreclosure or other disposition of the FHA loans or
VA loans.

    If a Ginnie Mae issuer is unable to make the payments on a Ginnie Mae
certificate as it becomes due, it must promptly notify Ginnie Mae and request
Ginnie Mae to make the payment. Upon notification and request, Ginnie Mae will
make the payments directly to the registered holder of the Ginnie Mae
certificate. If no payment is made by a Ginnie Mae issuer and the Ginnie Mae
issuer fails to notify and request Ginnie Mae to make the payment, the holder of
the Ginnie Mae certificate will have recourse only against Ginnie Mae to obtain
the payment. The trustee or its nominee, as registered holder of the Ginnie Mae
certificates held in a trust fund, will have the right to proceed directly
against Ginnie Mae under the terms of the guaranty agreements relating to the
Ginnie Mae certificates for any amounts that are not paid when due.

    All mortgage loans underlying a particular Ginnie Mae I certificate must
have the same interest rate over the term of the loan, except in pools of
mortgage loans secured by manufactured homes. The interest rate on the Ginnie
Mae I certificate will equal the interest rate on the mortgage loans included in
the pool of mortgage loans underlying the Ginnie Mae I certificate, less
one-half percentage point per annum of the unpaid principal balance of the
mortgage loans.

    Mortgage loans underlying a particular Ginnie Mae II certificate may have
per annum interest rates that vary from each other by up to one percentage
point. The interest rate on each Ginnie Mae II certificate will be between one
half percentage point and one and one-half percentage points lower than the
highest interest rate on the mortgage loans included in the pool of mortgage
loans underlying the Ginnie Mae II certificate, except for pools of mortgage
loans secured by manufactured homes.

    Regular monthly installment payments on each Ginnie Mae certificate held in
a trust fund will be comprised of interest due as specified on the Ginnie Mae
certificate plus the scheduled principal payments on the FHA loans or VA loans
underlying the Ginnie Mae certificate due on the first day of the month in which
the scheduled monthly installments on the Ginnie Mae certificate are due. The
regular monthly installments on each Ginnie Mae certificate are required to be
paid to the trustee as registered holder by the 15th day of each month in the
case of a Ginnie Mae I certificate and are required to be mailed to the trustee
by the 20th day of each month in the case of a Ginnie Mae II certificate. Any
principal prepayments on any FHA loans or VA loans underlying a Ginnie Mae
certificate held in a trust fund or any other early recovery of principal on the
loans will be passed through to the trustee as the registered holder of the
Ginnie Mae certificate.

                                       18


<PAGE>





    Ginnie Mae certificates may be backed by graduated payment mortgage loans or
by buydown loans for which funds will have been provided (and deposited into
escrow accounts) for application to the payment of a portion of the borrowers'
monthly payments during the early years of the mortgage loan. Payments due the
registered holders of Ginnie Mae certificates backed by pools containing buydown
loans will be computed in the same manner as payments derived from other Ginnie
Mae certificates and will include amounts to be collected from both the borrower
and the related escrow account. The graduated payment mortgage loans will
provide for graduated interest payments that, during the early years of the
mortgage loans, will be less than the amount of stated interest on the mortgage
loans. The interest not so paid will be added to the principal of the graduated
payment mortgage loans and, together with interest on them, will be paid in
subsequent years. The obligations of Ginnie Mae and of a Ginnie Mae issuer will
be the same irrespective of whether the Ginnie Mae certificates are backed by
graduated payment mortgage loans or buydown loans. No statistics comparable to
the FHA's prepayment experience on level payment, non-buydown mortgage loans are
available for graduated payment or buydown loans. Ginnie Mae certificates
related to a series of certificates may be held in book-entry form.

    The Ginnie Mae certificates included in a trust fund, and the related
underlying mortgage loans, may have characteristics and terms different from
those described above. Any different characteristics and terms will be described
in the related prospectus supplement.

    Federal Home Loan Mortgage Corporation. Freddie Mac is a corporate
instrumentality of the United States created pursuant to Title III of the
Emergency Home Finance Act of 1970, as amended. The common stock of Freddie Mac
is owned by the Federal Home Loan Banks and its preferred stock is owned by
stockholders of the Federal Home Loan Banks. Freddie Mac was established
primarily to increase the availability of mortgage credit to finance urgently
needed housing. It seeks to provide an enhanced degree of liquidity for
residential mortgage investments primarily by assisting in the development of
secondary markets for conventional mortgages. The principal activity of Freddie
Mac currently consists of the purchase of first lien conventional mortgage loans
or participation interests in mortgage loans and the sale of the mortgage loans
or participations so purchased in the form of mortgage securities, primarily
mortgage participation certificates issued and either guaranteed as to timely
payment of interest or guaranteed as to timely payment of interest and ultimate
payment of principal by Freddie Mac. Freddie Mac is confined to purchasing, so
far as practicable, mortgage loans that it deems to be of such quality, type and
class as to meet generally the purchase standards imposed by private
institutional mortgage investors.

    Freddie Mac Certificates. Each Freddie Mac certificate represents an
undivided interest in a pool of mortgage loans that may consist of first lien
conventional loans, FHA loans or VA loans. Freddie Mac certificates are sold
under the terms of a Mortgage Participation Certificate Agreement. A Freddie Mac
certificate may be issued under either Freddie Mac's Cash Program or Guarantor
Program.

    Mortgage loans underlying the Freddie Mac certificates held by a trust fund
will consist of mortgage loans with original terms to maturity of between 10 and
40 years. Each mortgage loan must meet the applicable standards set forth in the
Emergency Home Finance Act of 1970. A Freddie Mac certificate group may include
whole loans, participation interests in whole loans and undivided interests in
whole loans and participations comprising another Freddie Mac certificate group.
Under the Guarantor Program, a Freddie Mac certificate group may include only
whole loans or participation interests in whole loans.

    Freddie Mac guarantees to each registered holder of a Freddie Mac
certificate the timely payment of interest on the underlying mortgage loans to
the extent of the applicable certificate interest rate on the registered
holder's pro rata share of the unpaid principal balance outstanding on the
underlying mortgage loans in the Freddie Mac certificate group represented by
the Freddie Mac certificate, whether or not received. Freddie Mac also
guarantees to each registered holder of a Freddie Mac certificate collection by
the holder of all principal on the underlying mortgage loans, without any offset
or deduction, to the extent of the holder's pro rata share of it, but does not,
except if and to the extent specified in the related prospectus supplement for a
series of certificates, guarantee the timely payment of scheduled principal.
Under Freddie Mac's Gold PC Program, Freddie Mac guarantees the timely payment
of principal based on the difference between the pool factor published in the
month preceding the month of distribution and the pool factor published in the
month of distribution. Pursuant to its guaranties, Freddie Mac indemnifies
holders of Freddie Mac certificates against any diminution in principal from
charges for property repairs,

                                       19


<PAGE>





maintenance and foreclosure. Freddie Mac may remit the amount due on account of
its guaranty of collection of principal at any time after default on an
underlying mortgage loan, but not later than 30 days following foreclosure sale,
30 days following payment of the claim by any mortgage insurer or 30 days
following the expiration of any right of redemption, whichever occurs later, but
in any event no later than one year after demand has been made upon the
mortgagor for accelerated payment of principal. In taking actions regarding the
collection of principal after default on the mortgage loans underlying Freddie
Mac certificates, including the timing of demand for acceleration, Freddie Mac
reserves the right to exercise its judgment with respect to the mortgage loans
in the same manner as for mortgage loans that it has purchased but not sold. The
length of time necessary for Freddie Mac to determine that a mortgage loan
should be accelerated varies with the particular circumstances of each
mortgagor, and Freddie Mac has not adopted standards which require that the
demand be made within any specified period.

    Freddie Mac certificates are not guaranteed by the United States or by any
Federal Home Loan Bank and do not constitute debts or obligations of the United
States or any Federal Home Loan Bank. The obligations of Freddie Mac under its
guaranty are obligations solely of Freddie Mac and are not backed by, or
entitled to, the full faith and credit of the United States. If Freddie Mac were
unable to satisfy its obligations, distributions to holders of Freddie Mac
certificates would consist solely of payments and other recoveries on the
underlying mortgage loans and, accordingly, monthly distributions to holders of
Freddie Mac certificates would be affected by delinquent payments and defaults
on the mortgage loans.

    Registered holders of Freddie Mac certificates are entitled to receive their
monthly pro rata share of all principal payments on the underlying mortgage
loans received by Freddie Mac, including any scheduled principal payments, full
and partial prepayments of principal and principal received by Freddie Mac by
virtue of condemnation, insurance, liquidation or foreclosure, and repurchases
of the mortgage loans by Freddie Mac or their seller. Freddie Mac is required to
remit each registered Freddie Mac certificateholder's pro rata share of
principal payments on the underlying mortgage loans, interest at the Freddie Mac
pass-through rate and any other sums such as prepayment fees, within 60 days of
the date on which the payments are deemed to have been received by Freddie Mac.

    Under Freddie Mac's Cash Program, there is no limitation on the amount by
which interest rates on the mortgage loans underlying a Freddie Mac certificate
may exceed the pass-through rate on the Freddie Mac certificate. Under that
program, Freddie Mac purchases groups of whole mortgage loans from sellers at
specified percentages of their unpaid principal balances, adjusted for accrued
or prepaid interest, which when applied to the interest rate of the mortgage
loans and participations purchased results in the yield required by Freddie Mac.
The required yield, which includes a minimum servicing fee retained by the
servicer, is calculated using the outstanding principal balance. The range of
interest rates on the mortgage loans and participations in a Freddie Mac
certificate group under the Cash Program will vary since mortgage loans and
participations are purchased and assigned to a Freddie Mac certificate group
based upon their yield to Freddie Mac rather than on the interest rate on the
underlying mortgage loans. Under Freddie Mac's Guarantor Program, the
pass-through rate on a Freddie Mac certificate is established based upon the
lowest interest rate on the underlying mortgage loans, minus a minimum servicing
fee and the amount of Freddie Mac's management and guaranty income as agreed
upon between the seller and Freddie Mac.

    Freddie Mac certificates duly presented for registration of ownership on or
before the last business day of a month are registered effective as of the first
day of the month. The first remittance to a registered holder of a Freddie Mac
certificate will be distributed so as to be received normally by the 15th day of
the second month following the month in which the purchaser became a registered
holder of the Freddie Mac certificate. Thereafter, the remittance will be
distributed monthly to the registered holder so as to be received normally by
the 15th day of each month. The Federal Reserve Bank of New York maintains
book-entry accounts for Freddie Mac certificates sold by Freddie Mac on or after
January 2, 1985, and makes payments of principal and interest each month to
their registered holders in accordance with the holders' instructions.

    Federal National Mortgage Association. Fannie Mae is a federally chartered
and privately owned corporation organized and existing under the Federal
National Mortgage Association Charter Act, as amended. Fannie Mae was originally
established in 1938 as a United States government agency to provide

                                       20

<PAGE>






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
mortgage loans from lenders, thereby replenishing their funds for additional
lending. Fannie Mae acquires funds to purchase mortgage loans from many capital
market investors that may not ordinarily invest in mortgages, thereby expanding
the total amount of funds available for housing. Operating nationwide, Fannie
Mae helps to redistribute mortgage funds from capital-surplus to capital-short
areas.

    Fannie Mae Certificates. These are guaranteed mortgage pass-through
certificates issued and guaranteed as to timely payment of principal and
interest by Fannie Mae representing fractional undivided interests in a pool of
mortgage loans formed by Fannie Mae. Each mortgage loan must meet the applicable
standards of the Fannie Mae purchase program. Mortgage loans comprising a pool
are either provided by Fannie Mae from its own portfolio or purchased pursuant
to the criteria of the Fannie Mae purchase program.

    Mortgage loans underlying Fannie Mae certificates held by a trust fund will
consist of conventional mortgage loans, FHA loans or VA loans. Original
maturities of substantially all of the conventional, level payment mortgage
loans underlying a Fannie Mae certificate are expected to be between either 8 to
15 years or 20 to 40 years. The original maturities of substantially all of the
fixed rate, level payment FHA loans or VA loans are expected to be 30 years.
Mortgage loans underlying a Fannie Mae certificate may have annual interest
rates that vary by as much as two percentage points from each other. The rate of
interest payable on a Fannie Mae certificate is equal to the lowest interest
rate of any mortgage loan in the related pool, less a specified minimum annual
percentage representing servicing compensation and Fannie Mae's guaranty fee.
Under a regular servicing option, the annual interest rates on the mortgage
loans underlying a Fannie Mae certificate will be between 50 basis points and
250 basis points greater than is its annual pass through rate. Under this option
the mortgagee or each other servicer assumes the entire risk of foreclosure
losses. Under a special servicing option, the annual interest rates on the
mortgage loans underlying a Fannie Mae certificate will generally be between 55
basis points and 255 basis points greater than the annual Fannie Mae certificate
pass-through rate. Under this option Fannie Mae assumes the entire risk for
foreclosure losses. If specified in the related prospectus supplement, Fannie
Mae certificates may be backed by adjustable rate mortgages.

    Fannie Mae guarantees to each registered holder of a Fannie Mae certificate
that it will distribute amounts representing the holder's proportionate share of
scheduled principal and interest payments at the applicable pass through rate
provided for by the Fannie Mae certificate on the underlying mortgage loans,
whether or not received, and the holder's proportionate share of the full
principal amount of any foreclosed or other finally liquidated mortgage loan,
whether or not the principal amount is actually recovered. The obligations of
Fannie Mae under its guaranties are obligations solely of Fannie Mae and are not
backed by, or entitled to, the full faith and credit of the United States.
Although the Secretary of the Treasury of the United States has discretionary
authority to lend Fannie Mae up to $2.25 billion outstanding at any time,
neither the United States nor any of its agencies is obligated to finance Fannie
Mae's operations or to assist Fannie Mae in any other manner. If Fannie Mae were
unable to satisfy its obligations, distributions to holders of Fannie Mae
certificates would consist solely of payments and other recoveries on the
underlying mortgage loans and, accordingly, monthly distributions to holders of
Fannie Mae certificates would be affected by delinquent payments and defaults on
the mortgage loans.

    Except for Fannie Mae certificates backed by pools containing graduated
payment mortgage loans or mortgage loans secured by multifamily projects, Fannie
Mae certificates evidencing interests in pools of mortgage loans formed on or
after May 1, 1985 are available in book-entry form only. Distributions of
principal and interest on each Fannie Mae certificate will be made by Fannie Mae
on the 25th day of each month to the persons in whose name the Fannie Mae
certificate is entered in the books of the Federal Reserve Banks or registered
on the Fannie Mae certificate register as of the close of business on the last
day of the preceding month. Distributions on Fannie Mae certificates issued in
book-entry form will be made by wire. Distributions on fully registered Fannie
Mae certificates will be made by check.

    The Fannie Mae certificates included in a trust fund, and the related
underlying mortgage loans, may have characteristics and terms different from
those described above. Any different characteristics and terms will be described
in the related prospectus supplement.

                                       21



<PAGE>




    Stripped Mortgage-Backed Securities. Agency Securities may consist of one or
more stripped mortgage-backed securities, each as described in this prospectus
and in the related prospectus supplement. Each Agency Security will represent an
undivided interest in all or part of either the principal distributions (but not
the interest distributions) or the interest distributions (but not the principal
distributions), or in some specified portion of the principal and interest
distributions (but not all the distributions) on certain Freddie Mac, Fannie Mae
or Ginnie Mae certificates. The underlying securities will be held under a trust
agreement by Freddie Mac, Fannie Mae or Ginnie Mae, each as trustee, or by
another trustee named in the related prospectus supplement. The applicable
prospectus supplement may specify that Freddie Mac, Fannie Mae or Ginnie Mae
will not guarantee each stripped Agency Security to the same extent it
guarantees the underlying securities backing the stripped Agency Security, but
if it does not, then Freddie Mac, Fannie Mae or Ginnie Mae will guarantee each
stripped Agency Security to the same extent it guarantees the underlying
securities backing the stripped Agency Security.

    Other Agency Securities. If specified in the related prospectus supplement,
a trust fund may include other mortgage pass-through certificates issued or
guaranteed by Ginnie Mae, Fannie Mae or Freddie Mac. The characteristics of
those mortgage pass-through certificates will be described in the prospectus
supplement. If so specified, a combination of different types of Agency
Securities may be held in a trust fund.

PRIVATE MORTGAGE-BACKED SECURITIES

    Private Mortgage-Backed Securities may consist of mortgage pass-through
certificates or participation certificates evidencing an undivided interest in a
pool of mortgage loans or collateralized mortgage obligations secured by
mortgage loans. Private Mortgage-Backed Securities may include stripped
mortgage-backed securities representing an undivided interest in all or a part
of either the principal distributions (but not the interest distributions) or
the interest distributions (but not the principal distributions) or in some
specified portion of the principal and interest distributions (but not all the
distributions) on certain mortgage loans. Private Mortgage-Backed Securities
will have been issued pursuant to a pooling and servicing agreement, an
indenture or similar agreement. The applicable prospectus supplement may provide
that the seller/servicer of the underlying mortgage loans will not have entered
into a pooling and servicing agreement with a private trustee, but if it does
not, the seller/servicer of the underlying mortgage loans will have entered into
the pooling and servicing agreement with a private trustee. The private trustee
or its agent, or a custodian, will possess the mortgage loans underlying the
Private Mortgage-Backed Security. Mortgage loans underlying a Private
Mortgage-Backed Security will be serviced by a private servicer directly or by
one or more subservicers who may be subject to the supervision of the private
servicer.

    The issuer of the Private Mortgage-Backed Securities will be a financial
institution or other entity engaged generally 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 the
trusts and selling beneficial interests in the trusts. If so specified in the
related prospectus supplement, the issuer of Private Mortgage-Backed Securities
may be an affiliate of the depositor. The obligations of the issuer of Private
Mortgage-Backed Securities will generally be limited to certain representations
and warranties with respect to the assets conveyed by it to the related trust
fund. The issuer of Private Mortgage-Backed Securities will not have guaranteed
any of the assets conveyed to the related trust fund or any of the Private
Mortgage-Backed Securities issued under the pooling and servicing agreement.
Additionally, although the mortgage 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 private trustee or the private servicer. The issuer of Private
Mortgage-Backed Securities or the private servicer may have the right to
repurchase assets underlying the Private Mortgage-Backed Securities after a
certain date or under other circumstances specified in the related prospectus
supplement.

                                       22


<PAGE>





     The mortgage loans underlying the Private Mortgage-Backed Securities may
consist of fixed rate, level payment, fully amortizing loans or graduated
payment mortgage loans, buydown loans, adjustable rate mortgage loans or loans
having balloon or other special payment features. The mortgage loans may be
secured by single family property or multifamily property or by an assignment of
the proprietary lease or occupancy agreement relating to a specific dwelling
within a cooperative and the related shares issued by the cooperative.

     The prospectus supplement for a series for which the trust fund 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 fund;

     o    certain characteristics of the mortgage loans that comprise the
          underlying assets for the Private Mortgage-Backed Securities including

          o    the payment features of the mortgage loans,

          o    the approximate aggregate principal balance, if known, of
               underlying mortgage loans insured or guaranteed by a governmental
               entity,

          o    the servicing fee or range of servicing fees with respect to the
               mortgage loans and

          o    the minimum and maximum stated maturities of the underlying
               mortgage 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 pass-through or certificate rate of the Private Mortgage-Backed
          Securities;

     o    the weighted average pass-through or certificate rate of the Private
          Mortgage-Backed Securities;

     o    the issuer of Private Mortgage-Backed Securities, the private servicer
          (if other than the issuer of Private Mortgage-Backed Securities) and
          the private trustee for the Private Mortgage-Backed Securities;

     o    certain characteristics of credit support, if any, the as reserve
          funds, insurance policies, surety bonds, letters of credit or
          guaranties relating to the mortgage loans underlying the Private
          Mortgage-Backed Securities or to the Private Mortgage-Backed
          Securities themselves;

     o    the terms on which the underlying mortgage loans for the Private
          Mortgage-Backed Securities may, or are required to, be purchased
          before their stated maturity or the stated maturity of the Private
          Mortgage-Backed Securities; and

     o    the terms on which mortgage loans may be substituted for those
          originally underlying the Private Mortgage-Backed Securities.

     Private Mortgage-Backed Securities included in the trust fund for a series
of certificates that were issued by an issuer of Private Mortgage-Backed
Securities that is not affiliated with the depositor must be acquired in bona
fide secondary market transactions or either have been previously registered
under the Securities Act of 1933 or have been held for at least the holding
period required to be eligible for sale under Rule 144(k) under the Securities
Act of 1933.

SUBSTITUTION OF MORTGAGE ASSETS

     Substitution of Mortgage Assets will be permitted upon breaches of
representations and warranties with respect to any original Mortgage Asset or if
the documentation with respect to any Mortgage Asset is determined by the
trustee to be incomplete. The period during which the substitution will be
permitted generally will be indicated in the related prospectus supplement. The
related prospectus supplement will describe any other conditions upon which
Mortgage Assets may be substituted for Mortgage Assets initially included in the
trust fund.

                                       23



<PAGE>




AVAILABLE INFORMATION

    The depositor has filed with the SEC a Registration Statement under the
Securities Act of 1933, as amended, covering the certificates. This prospectus,
which forms a part of the Registration Statement, and the prospectus supplement
relating to each series of certificates contain summaries of the material terms
of the documents referred to in this prospectus and in the prospectus
supplement, but do not contain all of the information in the Registration
Statement pursuant to the rules and regulations of the SEC. For further
information, reference is made to the Registration Statement and its exhibits.
The Registration Statement and exhibits can be inspected and copied at
prescribed rates at the public reference facilities maintained by the SEC at its
Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549, and at
its Regional Offices located as follows: Chicago Regional Office, 500 West
Madison Street, Chicago, Illinois 60661; and New York Regional Office, Seven
World Trade Center, New York, New York 10048. You may obtain information on the
operation of the Public Reference Room by calling the SEC a 1-800-SEC-0330. The
SEC maintains an Internet Web site that contains reports, information statements
and other information regarding the registrants that file electronically with
the SEC, including the depositor. The address of that Internet Web site is
http://www.sec.gov.

    This prospectus and any applicable prospectus supplement do not constitute
an offer to sell or a solicitation of an offer to buy any securities other than
the certificates offered by this prospectus and the prospectus supplement nor an
offer of the certificates to any person in any state or other jurisdiction in
which the offer would be unlawful.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

    All documents filed for the trust fund referred to in the accompanying
prospectus supplement after the date of this prospectus and before the end of
the related offering with the SEC pursuant to Section 13(a), 13(c), 14 or 15(d)
of the Securities Exchange Act of 1934, as amended, are incorporated by
reference in this prospectus and are a part of this prospectus from the date of
their filing. Any statement contained in a document incorporated by reference in
this prospectus is modified or superseded for all purposes of this prospectus to
the extent that a statement contained in this prospectus (or in the accompanying
prospectus supplement) or in any other subsequently filed document that also is
incorporated by reference differs from that statement. Any statement so modified
or superseded shall not, except as so modified or superseded, constitute a part
of this prospectus.

    The trustee on behalf of any trust fund will provide without charge to each
person to whom this prospectus is delivered, on the person's written or oral
request, a copy of any or all of the documents referred to above that have been
or may be incorporated by reference in this prospectus (not including exhibits
to the information that is incorporated by reference unless the exhibits are
specifically incorporated by reference into the information that this prospectus
incorporates). Requests should be directed to the corporate trust office of the
trustee specified in the accompanying prospectus supplement.

                                USE OF PROCEEDS

    The net proceeds to be received from the sale of the certificates will be
applied by the depositor to the purchase of Mortgage Assets or will be used by
the depositor for general corporate purposes. The depositor expects to sell
certificates in series from time to time, but the timing and amount of offerings
of certificates will depend on a number of factors, including the volume of
Mortgage Assets acquired by the depositor, prevailing interest rates,
availability of funds and general market conditions.

                                 THE DEPOSITOR

    CWMBS, Inc., a Delaware corporation, was organized on May 27, 1993 for the
limited purpose of acquiring, owning and transferring Mortgage Assets and
selling interests in them or bonds secured by them. The depositor is a
subsidiary of Countrywide Credit Industries, Inc., a Delaware corporation. The
depositor maintains its principal office at 4500 Park Granada, Calabasas,
California 91302. Its telephone number is (818) 225-3000.

                                       24
<PAGE>




    Neither the depositor nor any of the depositor's affiliates will ensure or
guarantee distributions on the certificates of any series.

                             MORTGAGE LOAN PROGRAM

    The mortgage loans will have been purchased by the depositor, either
directly or through affiliates, from sellers. The applicable prospectus
supplement may specify the mortgage loans acquired by the depositor will have
been originated the under different criteria than the servicer's underwriting
criteria, but if it does not, the mortgage loans acquired by the depositor will
have been originated in accordance with the underwriting criteria specified
under "Underwriting Process."

UNDERWRITING PROCESS

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

    In determining the adequacy of the mortgaged property as collateral, an
appraisal is made of each property considered for financing. The appraiser is
required to inspect the property and verify that it is in good repair and that
construction, if new, has been completed. The appraisal is based on the market
value of comparable homes, the estimated rental income (if considered applicable
by the appraiser) and the cost of replacing the home.

    Once all applicable employment, credit and property information is received,
a determination generally is made as to whether the prospective borrower has
sufficient monthly income available to meet monthly housing expenses and other
financial obligations and monthly living expenses and to meet the borrower's
monthly obligations on the proposed mortgage loan (generally determined on the
basis of the monthly payments due in the year of origination) and other expenses
related to the mortgaged property such as property taxes and hazard insurance).
The underwriting standards applied by sellers, particularly with respect to the
level of loan documentation and the mortgagor's income and credit history, may
be varied in appropriate cases where factors as low Loan-to-Value Ratios or
other favorable credit factors exist.

    In the case of a mortgage loan secured by a leasehold interest in real
property, the title to which is held by a third party lessor, the seller will
represent and warrant, among other things, that the remaining term of the lease
and any sublease is at least as long as the remaining term on the loan agreement
or promissory note for the mortgage loan.

    Certain of the types of mortgage loans that may be included in a trust fund
are recently developed and may involve additional uncertainties not present in
traditional types of loans. For example, certain of the mortgage loans may
provide for escalating or variable payments by the mortgagor. These types of
mortgage loans are underwritten on the basis of a judgment that the mortgagors
have the ability to make the monthly payments required initially. In some
instances, however, a mortgagor's income may not be sufficient to permit
continued loan payments as the payments increase. These types of mortgage loans
may also be underwritten primarily on the basis of Loan-to-Value Ratios or other
favorable credit factors.

                                       25



<PAGE>




QUALIFICATIONS OF SELLERS

     Each seller must be an institution experienced in originating and servicing
mortgage loans of the type contained in the related mortgage pool and must
maintain satisfactory facilities to originate and service those mortgage loans.

REPRESENTATIONS BY SELLERS; REPURCHASES

     Each seller will have made representations and warranties in respect of the
mortgage loans sold by it and evidenced by a series of certificates. The
applicable prospectus supplement may specify the different representations and
warranties, but if it does not, the representations and warranties will
generally include, among other things:

     o    that title insurance (or in the case of mortgaged properties located
          in areas where title insurance policies are generally not available,
          an attorney's certificate of title) and any required hazard insurance
          policy and primary mortgage insurance policy were effective at the
          origination of each mortgage loan other than cooperative loans, and
          that each policy (or certificate of title as applicable) remained in
          effect on the date of purchase of the mortgage loan from the seller by
          or on behalf of the depositor;

     o    that the seller had good title to each mortgage loan and the mortgage
          loan was subject to no valid offsets, defenses, counterclaims or
          rights of rescission except to the extent that any buydown agreement
          described in this prospectus may forgive certain indebtedness of a
          mortgagor;

     o    that each mortgage loan constituted a valid first lien on, or a first
          perfected security interest with respect to, the mortgaged property
          (subject only to permissible title insurance exceptions, if
          applicable, and certain other exceptions described in the pooling and
          servicing agreement);

     o    that there were no delinquent tax or assessment liens against the
          mortgaged property; and

     o    that each mortgage loan was made in compliance with, and is
          enforceable under, all applicable local, state and federal laws and
          regulations in all material respects.

     In addition, if any required payment on a mortgage loan was more than 31
days delinquent at any time during the twelve months before the cut-off date,
the related prospectus supplement shall so indicate.

     As to any mortgage loan insured by the FHA or partially guaranteed by the
VA, the seller will represent that it has complied with underwriting policies of
the FHA or the VA, as the case may be.

     As indicated in the related pooling and servicing agreement, the
representations and warranties of a seller in respect of a mortgage loan will be
made as of the date of initial issuance of the series of certificates, the
related cut-off date, the date on which the seller sold the mortgage loan to the
depositor or one of its affiliates, or the date of origination of the related
mortgage loan, as the case may be. If representations and warranties are made as
of a date other than the closing date or cut-off date, a substantial period of
time may have elapsed between the other date and the date of initial issuance of
the series of certificates evidencing an interest in the mortgage loan. Since
the representations and warranties of a seller do not address events that may
occur following the sale of a mortgage loan by the seller or following the
origination of the mortgage loan, as the case may be, its repurchase obligation
will not arise if the relevant event that would otherwise have given rise to a
repurchase obligation with respect to a mortgage loan occurs after the date of
sale of the mortgage loan by the seller to the depositor or its affiliates or
after the origination of the mortgage loan, as the case may be. In addition,
certain representations, including the condition of the related mortgaged
property, will be limited to the extent the seller has knowledge and the seller
will be under no obligation to investigate the substance of the representation.
However, the depositor will not include any mortgage loan in the trust fund for
any series of certificates if anything has come to the depositor's attention
that would cause it to believe that the representations and warranties of a
seller will not be accurate and complete in all material respects in respect of
the mortgage loan as of the date of initial issuance of the related series of
certificates. If the master servicer is also a seller of mortgage loans with
respect to a particular series, the representations will be in addition to the
representations and warranties made by the master servicer in its capacity as
the master servicer.

                                       26


<PAGE>

     The trustee, if the master servicer is the seller, or the master servicer
will promptly notify the relevant seller of any breach of any representation or
warranty made by it in respect of a mortgage loan that materially and adversely
affects the interests of the certificateholders in the mortgage loan. The
applicable prospectus supplement may specify that the seller has a different
repurchase obligation, but if it does not, then if the seller cannot cure the
breach within 90 days after notice from the master servicer or the trustee, as
the case may be, then the seller will be obligated to repurchase the mortgage
loan from the trust fund at a price equal to 100% of the outstanding principal
balance of the mortgage as of the date of the repurchase plus accrued interest
on it to the first day of the month in which the purchase price is to be
distributed at the mortgage rate, less any unreimbursed advances or amount
payable as related servicing compensation if the seller is the master servicer
with respect to the mortgage loan. If an election is to be made to treat a trust
fund or designated portions of it as a "real estate mortgage investment conduit"
as defined in the Internal Revenue Code of 1986, as amended (the "Code"), the
master servicer or a holder of the related residual certificate will be
obligated to pay any prohibited transaction tax that may arise in connection
with the repurchase. The applicable prospectus supplement may contain different
reimbursement options, but if it does not, the master servicer will be entitled
to reimbursement for that payment from the assets of the related trust fund or
from any holder of the related residual certificate. See "Description of the
Certificates -- General" and in the related prospectus supplement. Except in
those cases in which the master servicer is the seller, the master servicer will
be required under the applicable pooling and servicing agreement to enforce this
obligation for the benefit of the trustee and the certificateholders, following
the practices it would employ in its good faith business judgment were it the
owner of the mortgage loan. This repurchase obligation will constitute the sole
remedy available to certificateholders or the trustee for a breach of
representation by a seller.

     Neither the depositor nor the master servicer will be obligated to purchase
a mortgage loan if a seller defaults on its obligation to do so, and no
assurance can be given that sellers will carry out their respective repurchase
obligations with respect to mortgage loans. However, to the extent that a breach
of a representation and warranty of a seller may also constitute a breach of a
representation made by the master servicer, the master servicer may have a
repurchase obligation as described under "The Pooling and Servicing Agreement --
Assignment of Mortgage Assets."

                        DESCRIPTION OF THE CERTIFICATES

     The prospectus supplement relating to the certificates of each series to be
offered under this prospectus will, among other things, set forth for the
certificates, as appropriate:

     o    a description of the class or classes of certificates and the rate at
          which interest will be passed through to holders of each class of
          certificates entitled to interest or the method of determining the
          amount of interest, if any, to be passed through to each class;

     o    the initial aggregate certificate balance of each class of
          certificates included in the series, the dates on which distributions
          on the certificates will be made and, if applicable, the initial and
          final scheduled distribution dates for each class;

     o    information as to the assets comprising the trust fund, including the
          general characteristics of the Mortgage Assets included in the trust
          fund and, if applicable, the insurance, surety bonds, guaranties,
          letters of credit or other instruments or agreements included in the
          trust fund, and the amount and source of any reserve fund;

     o    the circumstances, if any, under which the trust fund may be subject
          to early termination;

     o    the method used to calculate the amount of principal to be distributed
          with respect to each class of certificates;

     o    the order of application of distributions to each of the classes
          within the series, whether sequential, pro rata, or otherwise;

     o    the distribution dates with respect to the series;

     o    additional information with respect to the plan of distribution of the
          certificates;

     o    whether one or more REMIC elections will be made and designation of
          the regular interests and residual interests;

                                       27

<PAGE>






     o    the aggregate original percentage ownership interest in the trust fund
          to be evidenced by each class of certificates;

     o    information as to the nature and extent of subordination with respect
          to any class of certificates that is subordinate in right of payment
          to any other class; and

     o    information as to the seller, the master servicer and the trustee.

     Each series of certificates will be issued pursuant to an pooling and
servicing agreement, dated as of the related cut-off date, among the depositor,
the master servicer and the trustee for the benefit of the holders of the
certificates of the series. The provisions of each pooling and servicing
agreement will vary depending upon the nature of the certificates to be issued
thereunder and the nature of the related trust fund. A form of an pooling and
servicing agreement is an exhibit to the Registration Statement of which this
prospectus is a part.

     The prospectus supplement for a series of certificates will describe any
provision of the pooling and servicing agreement relating to the series that
materially differs from its description contained in this prospectus. The
summaries do not purport to be complete and are subject to, and are qualified in
their entirety by reference to, all of the provisions of the pooling and
servicing agreement for each series of certificates and the applicable
prospectus supplement. The depositor will provide a copy of the pooling and
servicing agreement (without exhibits) relating to any series without charge
upon written request of a holder of record of a certificate of the series
addressed to CWMBS, Inc., 4500 Park Granada, Calabasas, California 91302,
Attention: Secretary. The following summaries describe material provisions that
may appear in each pooling and servicing agreement.

GENERAL

     The certificates of each series will be issued in either fully registered
or book-entry form in the authorized denominations specified in the related
prospectus supplement, will evidence specified beneficial ownership interests in
the related trust fund created pursuant to the related pooling and servicing
agreement and will not be entitled to payments in respect of the assets included
in any other trust fund established by the depositor. The applicable prospectus
supplement may provide for guarantees by a governmental entity or other person,
but if it does not, the Mortgage Assets will not be insured or guaranteed by any
governmental entity or other person. Each trust fund will consist of, to the
extent provided in the related pooling and servicing agreement,

     o    the Mortgage Assets that from time to time are subject to the related
          pooling and servicing agreement (exclusive of any amounts specified in
          the related prospectus supplement as a retained interest);

     o    the assets required to be deposited in the related Certificate Account
          from time to time;

     o    property that secured a mortgage loan and that is acquired on behalf
          of the certificateholders by foreclosure or deed in lieu of
          foreclosure; and

     o    any primary mortgage insurance policies, FHA insurance and VA
          guaranties, and any other insurance policies or other forms of credit
          enhancement required to be maintained pursuant to the related pooling
          and servicing agreement.

     If so specified in the related prospectus supplement, a trust fund may also
include one or more of the following: reinvestment income on payments received
on the Mortgage Assets, a reserve fund, a mortgage pool insurance policy, a
special hazard insurance policy, a bankruptcy bond, one or more letters of
credit, a surety bond, guaranties or similar instruments or other agreements.

     Each series of certificates will be issued in one or more classes. Each
class of certificates of a series will evidence beneficial ownership of a
specified percentage or portion of future interest payments and a specified
percentage or portion of future principal payments on the Mortgage Assets in the
related trust fund. These specified percentages may be 0%. A series of
certificates may include one or more classes that are senior in right to payment
to one or more other classes of certificates of the series. Certain series or
classes of certificates may be covered by insurance policies, surety bonds or
other forms of credit enhancement, in each case as described in this prospectus
and in the related prospectus supplement. One or more classes of certificates of
a series may be entitled to receive distributions of principal, interest or

                                       28


<PAGE>


any combination of principal and interest. Distributions on one or more classes
of a series of certificates may be made before one or more other classes, after
the occurrence of specified events, in accordance with a schedule or formula, on
the basis of collections from designated portions of the Mortgage Assets in the
related trust fund, or on a different basis, in each case as specified in the
related prospectus supplement. The timing and amounts of the distributions may
vary among classes or over time as specified in the related prospectus
supplement.

    Distributions of either or both of principal and interest on the related
certificates will be made by the trustee on each distribution date (i.e.,
monthly, quarterly, semi-annually or at other intervals and on the dates
specified in the prospectus supplement) in proportion to the percentages
specified in the related prospectus supplement. Distributions will be made to
the persons in whose names the certificates are registered at the close of
business on the dates specified in the related prospectus supplement.
Distributions will be made by check or money order mailed to the persons
entitled to them at the address appearing in the certificates register
maintained for holders of certificates or, if specified in the related
prospectus supplement, in the case of certificates that are of a certain minimum
denomination, upon written request by the certificateholder, by wire transfer or
by another means described in the prospectus supplement; provided, however, that
the final distribution in retirement of the certificates will be made only upon
presentation and surrender of the certificates at the office or agency of the
trustee or other person specified in the notice to certificateholders of the
final distribution.

    The certificates will be freely transferable and exchangeable at the
corporate trust office of the trustee as set forth in the related prospectus
supplement. No service charge will be made for any registration of exchange or
transfer of certificates of any series, but the trustee may require payment of a
sum sufficient to cover any related tax or other governmental charge.

    Under current law the purchase and holding by or on behalf of any employee
benefit plan or other retirement arrangement subject to provisions of the
Employee Retirement Income Security Act of 1974, as amended, or the Code of
certain classes of certificates may result in "prohibited transactions" within
the meaning of ERISA and the Code. See "ERlSA Considerations." Retirement
arrangements subject to these provisions include individual retirement accounts
and annuities, Keogh plans and collective investment funds in which the plans,
accounts or arrangements are invested. The applicable prospectus supplement may
specify other conditions under which transfers of this type would be permitted,
but if it does not, transfer of the certificates will not be registered unless
the transferee represents that it is not, and is not purchasing on behalf of, a
plan, account or other retirement arrangement or provides an opinion of counsel
satisfactory to the trustee and the depositor that the purchase of the
certificates by or on behalf of a plan, account or other retirement arrangement
is permissible under applicable law and will not subject the trustee, the master
servicer or the depositor to any obligation or liability in addition to those
undertaken in the pooling and servicing agreement.

    As to each series, an election may be made to treat the related trust fund
or designated portions of it as a real estate mortgage investment conduit or
REMIC as defined in the Code. The related prospectus supplement will specify
whether a REMIC election is to be made. Alternatively, the pooling and servicing
agreement for a series may provide that a REMIC election may be made at the
discretion of the depositor or the master servicer and may be made only if
certain conditions are satisfied. The terms applicable to the making of a REMIC
election, as well as any material federal income tax consequences to
certificateholders not described in this prospectus, will be set forth in the
related prospectus supplement. If a REMIC an election is made with respect to a
series, one of the classes will be designated as evidencing the sole class of
residual interests in the related REMIC, as defined in the Code. All other
classes of certificates in the series will constitute regular interests in the
related REMIC, as defined in the Code. As to each series with respect to which a
REMIC election is to be made, the master servicer or a holder of the related
residual certificate will be obligated to take all actions required to comply
with applicable laws and regulations and will be obligated to pay any prohibited
transaction taxes. The applicable prospectus supplement may restrict the master
servicer's reimbursement rights, but if it does not, the master servicer will be
entitled to reimbursement for that payment from the assets of the trust fund or
from any holder of the related residual certificate.

                                       29

<PAGE>


DISTRIBUTIONS ON CERTIFICATES

    General. In general, the method of determining the amount of distributions
on a particular series of certificates will depend on the type of credit
support, if any, that is used with respect to the series. See "Credit
Enhancement" and in the related prospectus supplement. Various methods that may
be used to determine the amount of distributions on the certificates of a
particular series. The prospectus supplement for each series of certificates
will describe the method to be used in determining the amount of distributions
on the certificates of its series.

    Distributions allocable to principal of and interest on the certificates
will be made by the trustee out of, and only to the extent of, funds in the
related Certificate Account, including any funds transferred from any reserve
fund. As between certificates of different classes and as between distributions
of principal (and, if applicable, between distributions of principal prepayments
and scheduled payments of principal) and interest, distributions made on any
distribution date will be applied as specified in the related prospectus
supplement. The applicable prospectus supplement may provide for payment
distinctions within classes, but if it does not, distributions to any class of
certificates will be made pro rata to all certificateholders of that class.

    Available Funds. All distributions on the certificates of each series on
each distribution date will be made from the Available Funds, in accordance with
the terms described in the related prospectus supplement and specified in the
pooling and servicing agreement. The applicable prospectus supplement may define
Available Funds with reference to different accounts or different amounts, but
if it does not, "Available Funds" for each distribution date will generally
equal the amount on deposit in the related Certificate Account on the
distribution date (net of related fees and expenses payable by the related trust
fund) other than amounts to be held in the Certificate Account for distribution
on future distribution dates.

    Distributions of Interest. Interest will accrue on the aggregate original
balance of the certificates (or, in the case of certificates entitled only to
distributions allocable to interest, the aggregate notional amount) of each
class of certificates (the initial "Class Certificate Balance") entitled to
interest at the pass-through rate (which may be a fixed rate or a rate
adjustable as specified in the prospectus supplement) from the date and for the
periods specified in the prospectus supplement. To the extent funds are
available therefor, interest accrued during each specified period on each class
of certificates entitled to interest (other than a class of certificates that
provides for interest that accrues, but is not currently payable) will be
distributable on the distribution dates specified in the related prospectus
supplement until the Class Certificate Balance of the class has been distributed
in full or, in the case of certificates entitled only to distributions allocable
to interest, until the aggregate notional amount of the certificates is reduced
to zero or for the period of time designated in the related prospectus
supplement. The original certificate balance of each certificate will equal the
aggregate distributions allocable to principal to which the certificate is
entitled. The applicable prospectus supplement may specify some other basis for
these distributions, but if it does not, distributions allocable to interest on
each certificate that is not entitled to distributions allocable to principal
will be calculated based on the notional amount of the certificate. The notional
amount of a certificate will not evidence an interest in or entitlement to
distributions allocable to principal but will be used solely for convenience in
expressing the calculation of interest and for certain other purposes.

    With respect to any class of accrual certificates, any interest that has
accrued but is not paid on a given distribution date will be added to the Class
Certificate Balance of the class of certificates on that distribution date. The
applicable prospectus supplement may specify some other basis for these
distributions, but if it does not, distributions of interest on each class of
accrual certificates will commence only after the occurrence of the events
specified in the prospectus supplement and, before that time, the beneficial
ownership interest of the class of accrual certificates in the trust fund, as
reflected in the Class Certificate Balance of the class of accrual certificates,
will increase on each distribution date by the amount of interest that accrued
on the class of accrual certificates during the preceding interest accrual
period but that was not required to be distributed to the class on the
distribution date. The class of accrual certificates will thereafter accrue
interest on its outstanding Class Certificate Balance as so adjusted.

    Distributions of Principal. The related prospectus supplement will specify
the method by which the amount of principal to be distributed on the
certificates on each distribution date will be calculated and

                                       30


<PAGE>



the manner in which that amount will be allocated among the classes of
certificates entitled to distributions of principal. The Class Certificate
Balance of any class of certificates entitled to distributions of principal will
be the original Class Certificate Balance of the class of certificates specified
in the prospectus supplement, reduced by all distributions reported to the
holders of the certificates as allocable to principal and in the case of accrual
certificates, unless otherwise specified in the related prospectus supplement,
increased by all interest accrued but not then distributable on the accrual
certificates and in the case of adjustable rate certificates, unless otherwise
specified in the related prospectus supplement, subject to the effect of
negative amortization. The related prospectus supplement will specify the method
by which the amount of principal to be distributed on the certificates on each
distribution date will be calculated and the manner in which that amount will be
allocated among the classes of certificates entitled to distributions of
principal.

    A series of certificates may include one or more classes of senior
certificates and one or more classes of subordinate certificates. If so provided
in the related prospectus supplement, one or more classes of senior certificates
will be entitled to receive all or a disproportionate percentage of the payments
of principal that are received from borrowers in advance of their scheduled due
dates and are not accompanied by amounts representing scheduled interest due
after the month of the payments in the percentages and under the circumstances
or for the periods specified in the prospectus supplement. Any disproportionate
allocation of these principal prepayments to senior certificates will have the
effect of accelerating the amortization of the senior certificates while
increasing the interests evidenced by the subordinated certificates in the trust
fund. Increasing the interests of the subordinated certificates relative to that
of the senior certificates is intended to preserve the availability of the
subordination provided by the subordinated certificates. See "Credit Enhancement
-- Subordination" and "Credit Enhancement -- Subordination of the Subordinated
Certificates" in the related prospectus supplement.

    Unscheduled Distributions. If specified in the related prospectus
supplement, the certificates will be subject to receipt of distributions before
the next scheduled distribution date. If applicable, the trustee will be
required to make unscheduled distributions on the day and in the amount
specified in the related prospectus supplement if, due to substantial payments
of principal (including principal prepayments) on the Mortgage Assets, the
trustee or the master servicer determines that the funds available or
anticipated to be available from the Certificate Account and, if applicable, any
reserve fund, may be insufficient to make required distributions on the
certificates on the distribution date. The applicable prospectus supplement may
specify some other basis for these distributions, but if it does not, the amount
of the unscheduled distribution that is allocable to principal will not exceed
the amount that would otherwise have been required to be distributed as
principal on the certificates on the next distribution date. The applicable
prospectus supplement may provide that unscheduled distributions will not
include interest or that interest will be computed on a different basis, but if
it does not, all unscheduled distributions will include interest at the
applicable pass-through rate on the amount of the unscheduled distribution
allocable to principal for the period and to the date specified in the
prospectus supplement.

ADVANCES

    To the extent provided in the related prospectus supplement, the master
servicer will be required to advance on or before each distribution date (from
its own funds, funds advanced by sub-servicers or funds held in the Certificate
Account for future distributions to certificateholders), an amount equal to the
aggregate of payments of principal and interest that were delinquent on the
related Determination Date, subject to the master servicer's determination that
the advances will be recoverable out of late payments by obligors on the
Mortgage Assets, liquidation proceeds, insurance proceeds not used to restore
the property or otherwise. In the case of cooperative loans, the master servicer
also will be required to advance any unpaid maintenance fees and other charges
under the related proprietary leases as specified in the related prospectus
supplement.

    In making advances, the master servicer will endeavor to maintain a regular
flow of scheduled interest and principal payments to certificateholders, rather
than to guarantee or insure against losses. If advances are made by the master
servicer from cash being held for future distribution to certificateholders, the
master servicer will replace the funds on or before any future distribution date
to the extent that funds in the applicable Certificate Account on the
distribution date would be less than the amount required to be

                                       31


<PAGE>


available for distributions to certificateholders on the Distribution Date. Any
advances will be reimbursable to the master servicer out of recoveries on the
specific Mortgage Assets with respect to which the advances were made (e.g.,
late payments made by the related obligors, any related insurance proceeds,
liquidation proceeds or proceeds of any mortgage loan repurchased by the
depositor, a sub-servicer or a seller pursuant to the related pooling and
servicing agreement). In addition, advances by the master servicer or
sub-servicer also will be reimbursable to the master servicer or a sub-servicer
from cash otherwise distributable to certificateholders to the extent that the
master servicer determines that the advances previously made are not ultimately
recoverable as described in the preceding sentence. The master servicer also
will be obligated to make advances, to the extent recoverable out of insurance
proceeds not used to restore the property, liquidation proceeds or otherwise,
for certain taxes and insurance premiums not paid by mortgagors on a timely
basis. Funds so advanced are reimbursable to the master servicer to the extent
permitted by the pooling and servicing agreement. If specified in the related
prospectus supplement, the obligations of the master servicer to make advances
may be supported by a cash advance reserve fund, a surety bond or other
arrangement, in each case as described in the prospectus supplement.

REPORTS TO CERTIFICATEHOLDERS

     The applicable prospectus supplement may specify different items to be
reported, but if it does not, before or concurrently with each distribution on a
distribution date the master servicer or the trustee will furnish to each
certificateholder of record of the related series a statement setting forth, to
the extent applicable to the series of certificates, among other things:

     o    the amount of the distribution allocable to principal, separately
          identifying the aggregate amount of any principal prepayments and, if
          so specified in the related prospectus supplement, prepayment
          penalties;

     o    the amount of the distribution allocable to interest;

     o    the amount of any advance;

     o    the aggregate amount otherwise allocable to the subordinated
          certificateholders on the distribution date and the aggregate amount
          withdrawn from the reserve fund, if any, that is included in the
          amounts distributed to the certificateholders;

     o    the Class Certificate Balance or notional amount of each class of the
          related series after giving effect to the distribution of principal on
          the distribution date;

     o    the percentage of principal payments on the Mortgage Assets (excluding
          prepayments), if any, which each class will be entitled to receive on
          the following distribution date;

     o    the percentage of principal prepayments with respect to the Mortgage
          Assets, if any, which each class will be entitled to receive on the
          following distribution date;

     o    the related amount of the servicing compensation retained or withdrawn
          from the Certificate Account by the master servicer, and the amount of
          additional servicing compensation received by the master servicer
          attributable to penalties, fees, excess liquidation proceeds and other
          similar charges and items;

     o    the number and aggregate principal balances of mortgage loans (A)
          delinquent (exclusive of mortgage loans in foreclosure) 1 to 30 days,
          31 to 60 days, 61 to 90 days and 91 or more days and (B) in
          foreclosure and delinquent 1 to 30 days, 31 to 60 days, 61 to 90 days
          and 91 or more days, as of the close of business on the last day of
          the calendar month preceding the distribution date;

     o    the book value of any real estate acquired through foreclosure or
          grant of a deed in lieu of foreclosure;

     o    the pass-through rate, if adjusted from the date of the last
          statement, of a class expected to be applicable to the next
          distribution to the class;

     o    if applicable, the amount remaining in the reserve fund at the close
          of business on the distribution date;

                                       32

<PAGE>



     o    the pass-through rate as of the day before the preceding distribution
          date; and

     o    any amounts remaining under letters of credit, pool policies or other
          forms of credit enhancement.

     Where applicable, any amount set forth above may be expressed as a dollar
amount per single certificate of the relevant class having the percentage
interest specified in the related prospectus supplement. The report to
certificateholders for any series of certificates may include additional or
other information of a similar nature to that specified above.

     In addition, within a reasonable period of time after the end of each
calendar year, the master servicer or the trustee will mail to each
certificateholder of record at any time during the calendar year a report as to
the aggregate of amounts reported pursuant to the first two items for the
calendar year or, if the person was a certificateholder of record during a
portion of the calendar year, for the applicable portion of the year and other
customary information deemed appropriate for certificateholders to prepare their
tax returns.

CATEGORIES OF CLASSES OF CERTIFICATES

     In general, classes of pass-through certificates fall into different
categories. The following chart identifies and generally defines the more
typical categories. The prospectus supplement for a series of certificates may
identify the classes which comprise the series by reference to the following
categories.

<TABLE>
<CAPTION>


CATEGORIES OF CLASSES                                              DEFINITION
                                                                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 Certificates....................  A class consisting of "components." The components of a
                                            class of component certificates may have different
                                            principal and interest payment characteristics but
                                            together constitute a single class. Each component of a
                                            class of component certificates may be identified as
                                            falling into one or more of the categories in this
                                            chart.

Notional Amount Certificates..............  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 certificates may be subdivided into different
                                            categories (e.g., 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
                                            certificates will be narrower than that for the primary
                                            planned principal class of the series.

Scheduled Principal Class.................  A class that is designed to receive principal payments
                                            using a predetermined principal balance schedule 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


                                       33

<PAGE>
<CAPTION>
<S>                                         <C>
                                            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
                                            until they are retired. A single class that receives
                                            principal payments before or after all other classes in
                                            the same series of certificates 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 "companion classes").................  A class that receives principal payments on any
                                            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

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 upon a designated index and that varies directly
                                            with changes in the index.

Inverse Floating Rate.....................  A class with an interest rate that resets periodically
                                            based upon a designated index and that varies inversely
                                            with changes in the index.

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
                                            (e.g., 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


                                       34

<PAGE>



                                            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>

INDICES APPLICABLE TO FLOATING RATE AND INVERSE FLOATING RATE CLASSES

LIBOR

     The applicable prospectus supplement may specify some other basis for
determining LIBOR, but if it does not, on the LIBOR determination date (as
defined in the related prospectus supplement) for each class of certificates of
a series for which the applicable interest rate is determined by reference to an
index denominated as LIBOR, the person designated in the related pooling and
servicing agreement as the calculation agent will determine LIBOR in accordance
with one of the two methods described below (which method will be specified in
the related prospectus supplement):

LIBO Method

     If using this method to calculate LIBOR, the calculation agent will
determine LIBOR by reference to the quotations, as set forth on the Reuters
Screen LIBO Page, offered by the principal London office of each of the
designated reference banks meeting the criteria set forth in this prospectus for
making one-month United States dollar deposits in leading banks in the London
Interbank market, as of 11:00 a.m. (London time) on the LIBOR determination
date. In lieu of relying on the quotations for those reference banks that appear
at the time on the Reuters Screen LIBO Page, the calculation agent will request
each of the reference banks to provide the offered quotations at the time.

     Under this method LIBOR will be established by the calculation agent on
each LIBOR determination date as follows:

          (a) If on any LIBOR determination date two or more reference banks
     provide offered quotations, LIBOR for the next interest accrual period
     shall be the arithmetic mean of the offered quotations (rounded upwards if
     necessary to the nearest whole multiple of 1/32%).

          (b) If on any LIBOR determination date only one or none of the
     reference banks provides offered quotations, LIBOR for the next interest
     accrual period shall be whichever is the higher of

          o    LIBOR as determined on the previous LIBOR determination date or

          o    the reserve interest rate.

     The reserve interest rate shall be the rate per annum which the calculation
     agent determines to be either

          o    the arithmetic mean (rounded upwards if necessary to the nearest
               whole multiple of 1/32%) of the one-month United States dollar
               lending rates that New York City banks selected by the
               calculation agent are quoting, on the relevant LIBOR
               determination date, to the principal London offices of at least
               two of the reference banks to which the quotations are, in the
               opinion of the calculation agent being so made, or

          o    if the calculation agent cannot determine the arithmetic mean,
               the lowest one-month United States dollar lending rate which New
               York City banks selected by the calculation agent are quoting on
               the LIBOR determination date to leading European banks.

          (c) If on any LIBOR determination date for a class specified in the
     related prospectus supplement, the calculation agent is required but is
     unable to determine the reserve interest rate in the manner provided in
     paragraph (b) above, LIBOR for the next interest accrual period shall be
     LIBOR as determined on the preceding LIBOR determination date, or, in the
     case of the first LIBOR

                                       35



<PAGE>




    determination date, LIBOR shall be considered to be the per annum rate
    specified as such in the related prospectus supplement.

    Each reference bank shall be a leading bank engaged in transactions in
Eurodollar deposits in the international Eurocurrency market; shall not control,
be controlled by, or be under common control with the calculation agent; and
shall have an established place of business in London. If reference bank should
be unwilling or unable to act as such or if appointment of a reference bank is
terminated, another leading bank meeting the criteria specified above will be
appointed.

BBA Method

    If using this method of determining LIBOR, the calculation agent will
determine LIBOR on the basis of the British Bankers' Association "Interest
Settlement Rate" for one-month deposits in United States dollars as found on
Telerate page 3750 as of 11:00 a.m. London time on each LIBOR determination
date. Interest Settlement Rates currently are based on rates quoted by eight
British Bankers' Association designated banks as being, in the view of the
banks, the offered rate at which deposits are being quoted to prime banks in the
London interbank market. The Interest Settlement Rates are calculated by
eliminating the two highest rates and the two lowest rates, averaging the four
remaining rates, carrying the result (expressed as a percentage) out to six
decimal places, and rounding to five decimal places.

    If on any LIBOR determination date, the calculation agent is unable to
calculate LIBOR in accordance with the method set forth in the immediately
preceding paragraph, LIBOR for the next interest accrual period shall be
calculated in accordance with the LIBOR method described under "LIBO Method."

    The establishment of LIBOR on each LIBOR determination date by the
calculation agent and its calculation of the rate of interest for the applicable
classes for the related interest accrual period shall (in the absence of
manifest error) be final and binding.

COFI

    The Eleventh District Cost of Funds Index is designed to represent the
monthly weighted average cost of funds for savings institutions in Arizona,
California and Nevada that are member institutions of the Eleventh Federal Home
Loan Bank District (the "Eleventh District"). The Eleventh District Cost of
Funds Index for a particular month reflects the interest costs paid on all types
of funds held by Eleventh District member institutions and is calculated by
dividing the cost of funds by the average of the total amount of those funds
outstanding at the end of that month and of the prior month and annualizing and
adjusting the result to reflect the actual number of days in the particular
month. If necessary, before these calculations are made, the component figures
are adjusted by the Federal Home Loan Bank of San Francisco ("FHLBSF") to
neutralize the effect of events such as member institutions leaving the Eleventh
District or acquiring institutions outside the Eleventh District. The Eleventh
District Cost of Funds Index is weighted to reflect the relative amount of each
type of funds held at the end of the relevant month. The major components of
funds of Eleventh District member institutions are: savings deposits, time
deposits, FHLBSF advances, repurchase agreements and all other borrowings.
Because the component funds represent a variety of maturities whose costs may
react in different ways to changing conditions, the Eleventh District Cost of
Funds Index does not necessarily reflect current market rates.

    A number of factors affect the performance of the Eleventh District Cost of
Funds Index, which may cause it to move in a manner different from indices tied
to specific interest rates, such as United States Treasury Bills or LIBOR.
Because the liabilities upon which the Eleventh District Cost of Funds Index is
based were issued at various times under various market conditions and with
various maturities, the Eleventh District Cost of Funds Index may not
necessarily reflect the prevailing market interest rates on new liabilities of
similar maturities. Moreover, as stated above, the Eleventh District Cost of
Funds Index is designed to represent the average cost of funds for Eleventh
District savings institutions for the month before the month in which it is due
to be published. Additionally, the Eleventh District Cost of Funds Index may not
necessarily move in the same direction as market interest rates at all times,
since as longer term deposits or borrowings mature and are renewed at prevailing
market interest rates, the Eleventh District Cost of Funds Index is influenced
by the differential between the prior and the new rates on those deposits or
borrowings. In addition, movements of the Eleventh District Cost of Funds Index,
as compared

                                       36



<PAGE>

to other indices tied to specific interest rates, may be affected by changes
instituted by the FHLBSF in the method used to calculate the Eleventh District
Cost of Funds Index.

    The FHLBSF publishes the Eleventh District Cost of Funds Index in its
monthly Information Bulletin. Any individual may request regular receipt by mail
of Information Bulletins by writing the Federal Home Loan Bank of San Francisco,
P.O. Box 7948, 600 California Street, San Francisco, California 94120, or by
calling (415) 616-1000. The Eleventh District Cost of Funds Index may also be
obtained by calling the FHLBSF at (415) 616-2600.

    The FHLBSF has stated in its Information Bulletin that the Eleventh District
Cost of Funds Index for a month "will be announced on or near the last working
day" of the following month and also has stated that it "cannot guarantee the
announcement" of the index on an exact date. So long as the index for a month is
announced on or before the tenth day of the second following month, the interest
rate for each class of certificates of a series for which the applicable
interest rate is determined by reference to an index denominated as COFI for the
interest accrual period commencing in the second following month will be based
on the Eleventh District Cost of Funds Index for the second preceding month. If
publication is delayed beyond the tenth day, the interest rate will be based on
the Eleventh District Cost of Funds Index for the third preceding month.

    The applicable prospectus supplement may specify some other basis for
determining COFI, but if it does not, then if on the tenth day of the month in
which any interest accrual period commences for a class of COFI certificates the
most recently published Eleventh District Cost of Funds Index relates to a month
before the third preceding month, the index for the current interest accrual
period and for each succeeding interest accrual period will, except as described
in the next to last sentence of this paragraph, be based on the National Monthly
Median Cost of Funds Ratio to SAIF-Insured Institutions (the "National Cost of
Funds Index") published by the Office of Thrift Supervision (the "OTS") for the
third preceding month (or the fourth preceding month if the National Cost of
Funds Index for the third preceding month has not been published on the tenth
day of an interest accrual period). Information on the National Cost of Funds
Index may be obtained by writing the OTS at 1700 G Street, N.W., Washington,
D.C. 20552 or calling (202) 906-6677, and the current National Cost of Funds
Index may be obtained by calling (202) 906-6988. If on the tenth day of the
month in which an interest accrual period commences the most recently published
National Cost of Funds Index relates to a month before the fourth preceding
month, the applicable index for the interest accrual period and each succeeding
interest accrual period will be based on LIBOR, as determined by the calculation
agent in accordance with the pooling and servicing agreement relating to the
series of certificates. A change of index from the Eleventh District Cost of
Funds Index to an alternative index will result in a change in the index level
and could increase its volatility, particularly if LIBOR is the alternative
index.

    The establishment of COFI by the calculation agent and its calculation of
the rates of interest for the applicable classes for the related interest
accrual period shall (in the absence of manifest error) be final and binding.

Treasury Index

    The applicable prospectus supplement may specify some other basis for
determining and defining the Treasury index, but if it does not, on the Treasury
index determination date for each class of certificates of a series for which
the applicable interest rate is determined by reference to an index denominated
as a Treasury index, the calculation agent will ascertain the Treasury index for
Treasury securities of the maturity and for the period (or, if applicable, date)
specified in the related prospectus supplement. The Treasury index for any
period means the average of the yield for each business day during the specified
period (and for any date means the yield for the date), expressed as a per annum
percentage rate, on U.S. Treasury securities adjusted to the "constant maturity"
specified in the prospectus supplement or if no "constant maturity" is so
specified, U.S. Treasury securities trading on the secondary market having the
maturity specified in the prospectus supplement, in each case as published by
the Federal Reserve Board in its Statistical Release No. H.15 (519). Statistical
Release No. H.15 (519) is published on Monday or Tuesday of each week and may be
obtained by writing or calling the Publications Department at the Board of
Governors of the Federal Reserve System, 21st and C Streets, Washington, D.C.
20551 (202)

                                       37


<PAGE>


452-3244. If the calculation agent has not yet received Statistical Release No.
H.15 (519) for a week, then it will use the Statistical Release from the
preceding week.

    Yields on U.S. Treasury securities at "constant maturity" are derived from
the U.S. Treasury's daily yield curve. This curve, which relates the yield on a
security to its time to maturity, is based on the closing market bid yields on
actively traded Treasury securities in the over-the-counter market. These market
yields are calculated from composites of quotations reported by five leading
U.S. Government securities dealers to the Federal Reserve Bank of New York. This
method provides a yield for a given maturity even if no security with that exact
maturity is outstanding. If the Treasury index is no longer published, a new
index based upon comparable data and methodology will be designated in
accordance with the pooling and servicing agreement relating to the particular
series of certificates. The calculation agent's determination of the Treasury
index, and its calculation of the rates of interest for the applicable classes
for the related interest accrual period shall (in the absence of manifest error)
be final and binding.

Prime Rate

    The applicable prospectus supplement may specify some other basis for
determining and defining the prime rate, but if it does not, on the prime rate
determination date for each class of certificates of a series for which the
applicable interest rate is determined by reference to an index denominated as
the prime rate, the calculation agent will ascertain the prime rate for the
related interest accrual period. The prime rate for an interest accrual period
will be the "prime rate" as published in the "Money Rates" section of The Wall
Street Journal on the related prime rate determination date, or if not so
published, the "prime rate" as published in a newspaper of general circulation
selected by the calculation agent in its sole discretion. If a prime rate range
is given, then the average of the range will be used. If the prime rate is no
longer published, a new index based upon comparable data and methodology will be
designated in accordance with the pooling and servicing agreement relating to
the particular series of certificates. The calculation agent's determination of
the prime rate and its calculation of the rates of interest for the related
interest accrual period shall (in the absence of manifest error) be final and
binding.

BOOK-ENTRY CERTIFICATES

    If so specified in the related prospectus supplement, one or more classes of
the certificates of any series may be initially issued through the book-entry
facilities of The Depository Trust Company. Each class of book-entry
certificates of a series will be issued in one or more certificates which equal
the aggregate initial Class Certificate Balance of each class and which will be
held by a nominee of the depository. The applicable prospectus supplement may
specify other procedures for book-entry certificates, but if it does not, the
following generally describes the procedures that will be applicable to any
class of book-entry certificates.

    Beneficial interests in the book-entry certificates of a series will be held
indirectly by investors through the book-entry facilities of the depository, as
described in this prospectus. Accordingly, the depository or its nominee is
expected to be the holder of record of the book-entry certificates. Except as
described below, no person acquiring a beneficial interest in a book-entry
certificate will be entitled to receive a physical certificate representing the
certificate.

    The beneficial owner's ownership of a book-entry certificate will be
recorded on the records of the brokerage firm, bank, thrift institution or other
financial intermediary that maintains the beneficial owner's account for that
purpose. In turn, the financial intermediary's ownership of a book-entry
certificate will be recorded on the records of the depository (or of a
participating firm that acts as agent for the financial intermediary, whose
interest will in true be recorded on the records of the depository, if the
beneficial owner's financial intermediary is not a depository participant).
Therefore, the beneficial owner must rely on the foregoing procedures to
evidence its beneficial ownership of a book-entry certificate. Beneficial
ownership of a book-entry certificate may only be transferred by compliance with
the procedures of the financial intermediaries and depository participants.

    In accordance with its normal procedures, the depository is expected to
record the positions held by each depository participant in the book-entry
certificates, whether held for its own account or as a nominee for another
person. In general, beneficial ownership of book-entry certificates will be
subject to

                                       38



<PAGE>


the rules, regulations and procedures governing the depository and depository
participants as in effect from time to time.

    Distributions on the book-entry certificates will be made on each
distribution date by the trustee to the depository. The depository will be
responsible for crediting the amount of the payments to the accounts of the
applicable depository participants in accordance with the depository's normal
procedures. Each depository participant will be responsible for disbursing the
payments to the beneficial owners of the book-entry certificates that it
represents and to each financial intermediary for which it acts as agent. Each
financial intermediary will be responsible for disbursing funds to the
beneficial owners of the book-entry certificates that it represents.

    Under a book-entry format, beneficial owners of the book-entry certificates
may experience some delay in their receipt of payments, since payments will be
forwarded by the trustee to the depository or its nominee, as the case may be,
as holder of record of the book-entry certificates. Because the depository can
act only on behalf of financial intermediaries, the ability of a beneficial
owner to pledge book-entry certificates to persons or entities that do not
participate in the depository system, or otherwise take actions in respect of
the book-entry certificates, may be limited due to the lack of physical
certificates for the book-entry certificates. In addition, issuance of the
book-entry certificates in book-entry form may reduce the liquidity of the
certificates in the secondary market since some potential investors may be
unwilling to purchase certificates for which they cannot obtain physical
certificates.

    Until definitive certificates are issued, it is anticipated that the only
"certificateholder" of the book-entry certificates will be the depository or its
nominee. Beneficial owners of the book-entry certificates will not be
certificateholders, as that term will be used in the pooling and servicing
agreement relating to the series of certificates. Beneficial owners are only
permitted to exercise the rights of certificateholders indirectly through
financial intermediaries and the depository. Monthly and annual reports on the
related trust fund provided to the depository or its nominee, as the case may
be, as holder of record of the book-entry certificates, may be made available to
beneficial owners upon request, in accordance with the rules, regulations and
procedures creating and affecting the depository, and to the financial
intermediaries to whose depository accounts the book-entry certificates of the
beneficial owners are credited.

    Until definitive certificates are issued, the depository will take any
action permitted to be taken by the holders of the book-entry certificates of a
particular series under the related pooling and servicing agreement only at the
direction of one or more financial intermediaries to whose depository accounts
the book-entry certificates are credited to the extent that the actions are
taken on behalf of financial intermediaries whose holdings include the
book-entry certificates.

    The applicable prospectus supplement may when and for what reasons
definitive certificates may be issued, but if it does not, definitive
certificates will be issued to beneficial owners of book-entry certificates, or
their nominees, rather than to the depository, only if the depository 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 with respect to the book-entry certificates and the depositor or
the trustee is unable to locate a qualified successor; the depositor, at its
sole option, elects to terminate the book-entry system through the depository;
or after the occurrence of an event of default, beneficial owners of
certificates representing not less than 51% of the aggregate percentage
interests evidenced by each class of certificates of the related series issued
as book-entry certificates advise the trustee and the depository through the
financial intermediaries in writing that the continuation of a book-entry system
through the depository (or a successor to it) is no longer in the best interests
of the beneficial owners.

    Upon the occurrence of any of the events described in the preceding
paragraph, the trustee will be required to notify all beneficial owners of the
occurrence of the event and the availability of definitive certificates. Upon
surrender by the depository of the global certificate or certificates
representing the book-entry certificates and instructions for re-registration,
the trustee will issue the definitive certificates, and thereafter the trustee
will recognize the holders of the definitive certificates as certificateholders
under the pooling and servicing agreement relating to the series of
certificates.

                                       39




<PAGE>





                               CREDIT ENHANCEMENT

GENERAL

    Credit enhancement may be provided for one or more classes of a series of
certificates or with respect to the Mortgage Assets in the related trust fund.
Credit enhancement may be in the form of a limited financial guaranty policy
issued by an entity named in the related prospectus supplement, the
subordination of one or more classes of the certificates of the series, the
establishment of one or more reserve funds, the use of a cross-support feature,
use of a mortgage pool insurance policy, bankruptcy bond, special hazard
insurance policy, surety bond, letter of credit, guaranteed investment contract
or other method of credit enhancement described in the related prospectus
supplement, or any combination of them. Credit enhancement may not provide
protection against all risks of loss or guarantee repayment of the entire
principal balance of the certificates and interest on them. If losses occur
which exceed the amount covered by credit enhancement or which are not covered
by the credit enhancement, certificateholders will bear their allocable share of
any deficiencies.

SUBORDINATION

    If so specified in the related prospectus supplement, the rights of holders
of one or more classes of subordinated certificates will be subordinate to the
rights of holders of one or more other classes of senior certificates of the
series to distributions of scheduled principal, principal prepayments, interest
or any combination of them that otherwise would have been payable to holders of
subordinated certificates under the circumstances and to the extent specified in
the related prospectus supplement. If specified in the related prospectus
supplement, delays in receipt of scheduled payments on the Mortgage Assets and
losses with respect to the Mortgage Assets will be borne first by the various
classes of subordinated certificates and thereafter by the various classes of
senior certificates, in each case under the circumstances and subject to the
limitations specified in the related prospectus supplement. The aggregate
distributions of delinquent payments on the Mortgage Assets over the lives of
the certificates or at any time, the aggregate losses on Mortgage Assets which
must be borne by the subordinated certificates by virtue of subordination and
the amount of the distributions otherwise distributable to the subordinated
certificateholders that will be distributable to senior certificateholders on
any distribution date may be limited as specified in the related prospectus
supplement. If aggregate distributions of delinquent payments on the Mortgage
Assets or aggregate losses on the Mortgage Assets were to exceed the amount
specified in the related prospectus supplement, senior certificateholders would
experience losses on the certificates.

    If specified in the related prospectus supplement, various classes of senior
certificates and subordinated certificates may themselves be subordinate in
their right to receive certain distributions to other classes of senior and
subordinated certificates, respectively, through a cross support mechanism or
otherwise.

    As between classes of senior certificates and as between classes of
subordinated certificates, distributions may be allocated among the classes in
the order of their scheduled final distribution dates, in accordance with a
schedule or formula, in relation to the occurrence of events, or otherwise, in
each case as specified in the related prospectus supplement. As between classes
of subordinated certificates, payments to senior certificateholders on account
of delinquencies or losses and payments to the reserve fund will be allocated as
specified in the related prospectus supplement.

MORTGAGE POOL INSURANCE POLICIES

    If specified in the related prospectus supplement relating to a mortgage
pool, a separate mortgage pool insurance policy will be obtained for the
mortgage pool and issued by the insurer named in the prospectus supplement. Each
mortgage pool insurance policy will, subject to policy limitations, cover loss
from default in payment on mortgage loans in the mortgage pool in an amount
equal to a percentage specified in the prospectus supplement of the aggregate
principal balance of the mortgage loans on the cut-off date that are not covered
as to their entire outstanding principal balances by primary mortgage insurance
policies. As more fully described below, the master servicer will present claims
under the insurance to the pool insurer on behalf of itself, the trustee and the
certificateholders. The mortgage pool insurance policies, however, are not
blanket policies against loss, since claims under them may be made

                                       40


<PAGE>


only for particular defaulted mortgage loans and only upon satisfaction of
conditions precedent in the policy. The applicable prospectus supplement may
specify that mortgage pool insurance will cover the failure to pay or the denial
of a claim under a primary mortgage insurance policy, but if it does not, the
mortgage pool insurance policies will not cover losses due to a failure to pay
or denial of a claim under a primary mortgage insurance policy.

     In general, each mortgage pool insurance policy will provide that no claims
may be validly presented unless

     o    any required primary mortgage insurance policy is in effect for the
          defaulted mortgage loan and a claim under it has been submitted and
          settled;

     o    hazard insurance on the related mortgaged property has been kept in
          force and real estate taxes and other protection and preservation
          expenses have been paid;

     o    if there has been physical loss or damage to the mortgaged property,
          it has been restored to its physical condition (reasonable wear and
          tear excepted) at the time of issuance of the policy; and

     o    the insured has acquired good and merchantable title to the mortgaged
          property free and clear of liens except certain permitted
          encumbrances.

Upon satisfaction of these conditions, the pool insurer will have the option
either to purchase the mortgaged property at a price equal to the principal
balance of the related mortgage loan plus accrued and unpaid interest at the
mortgage rate to the date of the purchase and certain expenses incurred by the
master servicer on behalf of the trustee and certificateholders or to pay the
amount by which the sum of the principal balance of the defaulted mortgage loan
plus accrued and unpaid interest at the mortgage rate to the date of payment of
the claim and the aforementioned expenses exceeds the proceeds received from an
approved sale of the mortgaged property, in either case net of certain amounts
paid or assumed to have been paid under the related primary mortgage insurance
policy. If any mortgaged property is damaged, and proceeds, if any, from the
related hazard insurance policy or a special hazard insurance policy or policies
maintained for a series are insufficient to restore the damaged property to a
condition sufficient to permit recovery under the mortgage 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 certificateholders on liquidation of the mortgage loan
after reimbursement of the master servicer for its expenses and the expenses
will be recoverable by it through proceeds of the sale of the mortgaged property
or proceeds of the related mortgage pool insurance policy or any related primary
mortgage insurance policy.

    The applicable prospectus supplement may specify that mortgage pool
insurance will cover various origination and servicing defaults, but if it does
not, then no mortgage pool insurance policy will insure (and many primary
mortgage insurance policies do not insure) against loss sustained from a default
arising from, among other things, fraud or negligence in the origination or
servicing of a mortgage loan, including misrepresentation by the mortgagor, the
originator or persons involved in its origination, or failure to construct a
mortgaged property in accordance with plans and specifications. A failure of
coverage for one of these reasons might result in a breach of the related
seller's representations and, in that case, might result in an obligation on the
part of the seller to repurchase the defaulted mortgage loan if the breach
cannot be cured by the seller. No mortgage pool insurance policy will cover (and
many primary mortgage insurance policies do not cover) a claim with respect to a
defaulted mortgage loan occurring when the servicer of the mortgage loan, at the
time of default or thereafter, was not approved by the applicable insurer.

    The original amount of coverage under each mortgage pool insurance policy
will be maintained to the extent provided in the related prospectus supplement
and may be reduced over the life of the related certificates by the aggregate
dollar amount of claims paid less the aggregate of the net amounts realized by
the pool insurer upon disposition of all foreclosed properties. The applicable
prospectus supplement may provide that the claims paid will be net of master
servicer expenses and accrued interest, but if it does not, then the amount of
claims paid will include certain expenses incurred by the master servicer as
well as accrued interest on delinquent mortgage loans to the date of payment of
the claim. Accordingly, if aggregate net claims paid under any mortgage pool
insurance policy reach the original policy limit,

                                       41


<PAGE>


coverage under that mortgage pool insurance policy will be exhausted and any
further losses will be borne by the certificateholders.

SPECIAL HAZARD INSURANCE POLICIES

    If specified in the related prospectus supplement, a separate special hazard
insurance policy will be obtained for the mortgage pool and will be issued by
the insurer named in the prospectus supplement. Each special hazard insurance
policy will, subject to policy limitations, protect holders of the related
certificates from loss caused by the application of the coinsurance clause
contained in hazard insurance policies and loss from damage to mortgaged
properties caused by certain hazards not insured against under the standard form
of hazard insurance policy in the states where the mortgaged properties are
located or under a flood insurance policy if the mortgaged property is located
in a federally designated flood area. Some of the losses covered include
earthquakes and, to a limited extent, tidal waves and related water damage or as
otherwise specified in the related prospectus supplement. See "The Pooling and
Servicing Agreement -- Hazard Insurance." No special hazard insurance policy
will cover losses from fraud or conversion by the trustee or master servicer,
war, insurrection, civil war, certain governmental action, errors in design,
faulty workmanship or materials (except under certain circumstances), nuclear or
chemical reaction, flood (if the mortgaged property is located in a federally
designated flood area), nuclear or chemical contamination and certain other
risks. The amount of coverage under any special hazard insurance policy will be
specified in the related prospectus supplement. Each special hazard insurance
policy will provide that no claim may be paid unless hazard and, if applicable,
flood insurance on the property securing the mortgage loan have been kept in
force and other protection and preservation expenses have been paid.

    The applicable prospectus supplement may provide for other payment coverage,
but if it does not, then, subject to these limitations, each special hazard
insurance policy will provide that where there has been damage to property
securing a foreclosed mortgage loan (title to which has been acquired by the
insured) and to the extent the damage is not covered by the hazard insurance
policy or flood insurance policy, if any, maintained by the mortgagor or the
master servicer, the special hazard insurer will pay the lesser of the cost of
repair or replacement of the property or, upon transfer of the property to the
special hazard insurer, the unpaid principal balance of the mortgage loan at the
time of acquisition of the property by foreclosure or deed in lieu of
foreclosure, plus accrued interest to the date of claim settlement and certain
expenses incurred by the master servicer with respect to the property. If the
unpaid principal balance of a mortgage loan plus accrued interest and certain
expenses is paid by the special hazard insurer, the amount of further coverage
under the related special hazard insurance policy will be reduced by that amount
less any net proceeds from the sale of the property. Any amount paid to repair
the property will further reduce coverage by that amount. So long as a mortgage
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
mortgage loan plus accrued interest and certain expenses will not affect the
total insurance proceeds paid to certificateholders, but will affect the
relative amounts of coverage remaining under the related special hazard
insurance policy and mortgage pool insurance policy.

    To the extent specified in the prospectus supplement, the master servicer
may deposit cash, an irrevocable letter of credit, or any other instrument
acceptable to each nationally recognized rating agency rating the certificates
of the related series at the request of the depositor in a special trust account
to provide protection in lieu of or in addition to that provided by a special
hazard insurance policy. The amount of any special hazard insurance policy or of
the deposit to the special trust account relating to the certificates may be
reduced so long as the reduction will not result in a downgrading of the rating
of the certificates by a rating agency rating certificates at the request of the
depositor.

BANKRUPTCY BONDS

    If specified in the related prospectus supplement, a bankruptcy bond to
cover losses resulting from proceedings under the federal Bankruptcy Code with
respect to a mortgage loan will be issued by an insurer named in the prospectus
supplement. Each bankruptcy bond will cover, to the extent specified in the
related prospectus supplement, certain losses resulting from a reduction by a
bankruptcy court of scheduled payments of principal and interest on a mortgage
loan or a reduction by the court of the

                                       42

<PAGE>


principal amount of a mortgage loan and will cover certain unpaid interest on
the amount of a principal reduction from the date of the filing of a bankruptcy
petition. The required amount of coverage under each bankruptcy bond will be set
forth in the related prospectus supplement. Coverage under a bankruptcy bond may
be cancelled or reduced by the master servicer if the cancellation or reduction
would not adversely affect the then current rating or ratings of the related
certificates. See "Certain Legal Aspects of the Mortgage Loans --
Anti-Deficiency Legislation and Other Limitations on Lenders."

    To the extent specified in the prospectus supplement, the master servicer
may deposit cash, an irrevocable letter of credit or any other instrument
acceptable to each nationally recognized rating agency rating the certificates
of the related series at the request of the depositor in a special trust account
to provide protection in lieu of or in addition to that provided by a bankruptcy
bond. The amount of any bankruptcy bond or of the deposit to the special trust
account relating to the certificates may be reduced so long as the reduction
will not result in a downgrading of the rating of the certificates by a rating
agency rating certificates at the request of the depositor.

RESERVE FUND

    If so specified in the related prospectus supplement, credit support with
respect to a series of certificates may be provided by one or more reserve funds
held by the trustee, in trust, for the series of certificates. The related
prospectus supplement will specify whether or not a reserve fund will be
included in the trust fund for a series.

    The reserve fund for a series will be funded by a deposit of cash, U.S.
Treasury securities or instruments evidencing ownership of principal or interest
payments on U.S. Treasury securities, letters of credit, demand notes,
certificates of deposit, or a combination of them in an aggregate amount
specified in the related prospectus supplement; by the deposit from time to time
of amounts specified in the related prospectus supplement to which the
subordinated certificateholders, if any, would otherwise be entitled; or in any
other manner specified in the related prospectus supplement.

    Any amounts on deposit in the reserve fund and the proceeds of any other
instrument deposited in it upon maturity will be held in cash or will be
invested in permitted investments. The applicable prospectus supplement may
specify a different definition of permitted investments, but if it does not,
then permitted investments will include obligations of the United States and
specified agencies of the United States, certificates of deposit, specified
commercial paper, time deposits and bankers acceptances sold by eligible
commercial banks, and specified repurchase agreements for United States
government securities with eligible commercial banks. If a letter of credit is
deposited with the trustee, the letter of credit will be irrevocable. Generally,
any deposited instrument will name the trustee, in its capacity as trustee for
the certificateholders, as beneficiary and will be issued by an entity
acceptable to each rating agency that rates the certificates at the request of
the depositor. Additional information about the instruments deposited in the
reserve funds will be set forth in the related prospectus supplement.

    Any amounts so deposited and payments on instruments so deposited will be
available for withdrawal from the reserve fund for distribution to the
certificateholders for the purposes, in the manner and at the times specified in
the related prospectus supplement.

CROSS SUPPORT

    If specified in the related prospectus supplement, the beneficial ownership
of separate groups of assets included in a trust fund may be evidenced by
separate classes of the related series of certificates. In that case, credit
support may be provided by a cross support feature that requires that
distributions be made on certificates evidencing a beneficial ownership interest
in other asset groups within the same trust fund. The related prospectus
supplement for a series that includes a cross support feature will describe the
manner and conditions for applying the cross support feature.

    If specified in the related prospectus supplement, the coverage provided by
one or more forms of credit support may apply concurrently to two or more
related trust funds. If applicable, the related prospectus supplement will
identify the trust funds to which the credit support relates and the manner of
determining the amount of the coverage provided by it and of the application of
the coverage to the identified trust funds.

                                       43


<PAGE>

INSURANCE POLICIES, SURETY BONDS AND GUARANTIES

    If so provided in the prospectus supplement for a series of certificates,
deficiencies in amounts otherwise payable on the certificates or certain of
their classes will be covered by insurance policies or surety bonds provided by
one or more insurance companies or sureties. These instruments may cover timely
distributions of interest or full distributions of principal or both on the
basis of a schedule of principal distributions set forth in or determined in the
manner specified in the related prospectus supplement. In addition, if specified
in the related prospectus supplement, a trust fund may also include bankruptcy
bonds, special hazard insurance policies, other insurance or guaranties for the
purpose of maintaining timely payments or providing additional protection
against losses on the assets included in the trust fund, paying administrative
expenses, or establishing a minimum reinvestment rate on the payments made on
the assets or principal payment rate on the assets. These arrangements may
include agreements under which certificateholders are entitled to receive
amounts deposited in various accounts held by the trustee on the terms specified
in the prospectus supplement.

OVER-COLLATERALIZATION

    If so provided in the prospectus supplement for a series of certificates, a
portion of the interest payment on each Loan may be applied as an additional
distribution of principal to reduce the principal balance of a particular class
or classes of certificates and, thus, accelerate the rate of payment of
principal on the class or classes of certificates. Reducing the principal
balance of the certificates without a corresponding reduction in the principal
balance of the underlying Mortgage Assets will result in over-
collateralization.

                      YIELD AND PREPAYMENT CONSIDERATIONS

    The yields to maturity and weighted average lives of the certificates will
be affected primarily by the amount and timing of principal payments received on
or in respect of the Mortgage Assets included in the related trust fund. The
original terms to maturity of the underlying mortgage loans of the Mortgage
Assets in a given mortgage pool will vary depending upon the type of mortgage
loans included in it, and each prospectus supplement will contain information
about the type and maturities of the mortgage loans. The applicable prospectus
supplement may indicate that some mortgage loans provide for prepayment
penalties, but if it does not, then the mortgage loans may be prepaid without
penalty in full or in part at any time. The prepayment experience on the
underlying mortgage loans of the Mortgage Assets will affect the life of the
related series of certificates.

    A number of factors may affect the prepayment experience of mortgage loans,
including homeowner mobility, economic conditions, the presence and
enforceability of due-on-sale clauses, mortgage market interest rates and the
availability of mortgage funds.

    The applicable prospectus supplement may indicate that some conventional
mortgage loans do not have due-on-sale provisions, but if it does not, then all
conventional mortgage loans will contain due-on-sale provisions permitting the
mortgagee to accelerate the maturity of the loan upon sale or specified
transfers by the mortgagor of the underlying mortgaged property. Mortgage loans
insured by the FHA and mortgage loans partially guaranteed by the VA are
assumable with the consent of the FHA and the VA, respectively. Thus, the rate
of prepayments on those mortgage loans may be lower than that on conventional
mortgage loans bearing comparable interest rates. The master servicer generally
will enforce any due-on-sale or due-on-encumbrance clause, to the extent it has
knowledge of the conveyance or further encumbrance or the proposed conveyance or
proposed further encumbrance of the mortgaged property and reasonably believes
that it is entitled to do so under applicable law. However, the master servicer
will not take any enforcement action that would impair or threaten to impair any
recovery under any related insurance policy. See "The Pooling and Servicing
Agreement -- Collection Procedures" and "Certain Legal Aspects of the Mortgage
Loans" for a description of certain provisions of each pooling and servicing
agreement and certain legal developments that may affect the prepayment
experience on the mortgage loans.

    The rate of prepayments of conventional mortgage loans has fluctuated
significantly in recent years. In general, if prevailing rates fall
significantly below the mortgage rates borne by the mortgage loans, the

                                       44


<PAGE>


mortgage loans are likely to be subject to higher prepayment rates than if
prevailing interest rates remain at or above those mortgage rates. Conversely,
if prevailing interest rates rise appreciably above the mortgage rates borne by
the mortgage loans, the mortgage loans are likely to experience a lower
prepayment rate than if prevailing rates remain at or below those mortgage
rates. However, there can be no assurance that this will be the case.

    When a full prepayment is made on a mortgage loan, the mortgagor is charged
interest on the principal amount of the mortgage loan prepaid only for the
number of days in the month actually elapsed up to the date of the prepayment
rather than for a full month. Thus, in most instances, the effect of prepayments
in full will be to reduce the amount of interest passed through in the following
month to certificateholders. Partial prepayments in a given month may be applied
to the outstanding principal balances of the mortgage loans so prepaid in the
month of receipt or the month following receipt. In the latter case, partial
prepayments will not reduce the amount of interest passed through in the month.

    Interest payable on the certificates on any given distribution date will
include all interest accrued during their related interest accrual period. The
interest accrual period for the certificates of each series will be specified in
the applicable prospectus supplement. If the interest accrual period ends two or
more days before the related distribution date, your effective yield will be
less than it would be if the interest accrual period ended the day before the
distribution date, and your effective yield at par would be less than the
indicated coupon rate.

    Under specified circumstances, the master servicer or the holders of the
residual interests in a REMIC may have the option to purchase the assets of a
trust fund thereby effecting earlier retirement of the related series of
certificates. See "The Pooling and Servicing Agreement -- Termination; Optional
Termination."

    Factors other than those identified in this prospectus and in the related
prospectus supplement could significantly affect principal prepayments at any
time and over the lives of the certificates. The relative contribution of the
various factors affecting prepayment may also vary from time to time. There can
be no assurance as to the rate of payment of principal of the Mortgage Assets at
any time or over the lives of the certificates.

    The prospectus supplement relating to a series of certificates will discuss
in greater detail the effect of the rate and timing of principal payments
(including principal prepayments), delinquencies and losses on the yield,
weighted average lives and maturities of the certificates.

                      THE POOLING AND SERVICING AGREEMENT

    The following is a summary of the material provisions of the pooling and
servicing agreement which are not described elsewhere in this prospectus. Where
particular provisions or terms used in the pooling and servicing agreement are
referred to, the provisions or terms are as specified in the related pooling and
servicing agreement.

ASSIGNMENT OF MORTGAGE ASSETS

    Assignment of the Mortgage Loans. At the time of issuance of the
certificates of a series, the depositor will cause the mortgage loans comprising
the related trust fund to be assigned to the trustee, together with all
principal and interest received by or on behalf of the depositor on or with
respect to the mortgage loans after the cut-off date, other than principal and
interest due on or before the cut-off date and other than any retained interest
specified in the related prospectus supplement. The trustee will, concurrently
with the assignment, deliver the certificates to the depositor in exchange for
the mortgage loans. Each mortgage loan will be identified in a schedule
appearing as an exhibit to the related pooling and servicing agreement. The
schedule will include information as to the outstanding principal balance of
each mortgage loan after application of payments due on the cut-off date, as
well as information regarding the mortgage rate, the current scheduled monthly
payment of principal and interest, the maturity of the loan, the Loan-to-Value
Ratio at origination and other specified information.

    In addition, the depositor will deliver or cause to be delivered to the
trustee (or to the custodian) for each mortgage loan

                                       45



<PAGE>




     o    the mortgage note endorsed without recourse in blank or to the order
          of the trustee, 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,

     o    the mortgage, deed of trust or similar instrument with evidence of
          recording indicated on it (except for any mortgage not returned from
          the public recording office, in which case the depositor will deliver
          or cause to be delivered a copy of the mortgage together with a
          certificate that the original of the mortgage was delivered to the
          recording office or some other arrangement will be provided for),

     o    an assignment of the mortgage to the trustee in recordable form and

     o    any other security documents specified in the related prospectus
          supplement or the related pooling and servicing agreement.

The applicable prospectus supplement may provide other arrangements for assuring
the priority of the assignments, but if it does not, then the depositor will
promptly cause the assignments of the related loans to be recorded in the
appropriate public office for real property records, except in states in which
in the opinion of counsel recording is not required to protect the trustee's
interest in the loans against the claim of any subsequent transferee or any
successor to or creditor of the depositor or the originator of the loans.

     With respect to any mortgage loans that are cooperative loans, the
depositor will cause to be delivered to the trustee

     o    the related original cooperative note endorsed without recourse in
          blank or to the order of the trustee (or, to the extent the related
          pooling and servicing agreement so provides, a lost note affidavit),

     o    the original security agreement,

     o    the proprietary lease or occupancy agreement,

     o    the recognition agreement,

     o    an executed financing agreement and

     o    the relevant stock certificate, related blank stock powers and any
          other document specified in the related prospectus supplement.

     The depositor will cause to be filed in the appropriate office an
assignment and a financing statement evidencing the trustee's security interest
in each cooperative loan.

    The trustee (or the custodian) will review the mortgage loan documents
within the time period specified in the related prospectus supplement after
receipt of them, and the trustee will hold the documents in trust for the
benefit of the certificateholders. Generally, if the document is found to be
missing or defective in any material respect, the trustee (or the custodian)
will notify the master servicer and the depositor, and the master servicer will
notify the related seller. If the seller cannot cure the omission or defect
within the time period specified in the related prospectus supplement after
receipt of the notice, the seller will be obligated to purchase the related
mortgage loan from the trustee at the purchase price or, if so specified in the
related prospectus supplement, replace the mortgage loan with another mortgage
loan that meets specified requirements. There can be no assurance that a seller
will fulfill this purchase obligation. Although the master servicer may be
obligated to enforce the obligation to the extent described under "Mortgage Loan
Program -- Representations by Sellers; Repurchases," neither the master servicer
nor the depositor will be obligated to purchase the mortgage loan if the seller
defaults on its purchase obligation, unless the breach also constitutes a breach
of the representations or warranties of the master servicer or the depositor.
The applicable prospectus supplement may provide other remedies but if it does
not, then this purchase obligation constitutes the sole remedy available to the
certificateholders or the trustee for omission of, or a material defect in, a
constituent document.

    The trustee will be authorized to appoint a custodian pursuant to a
custodial agreement to maintain possession of and, if applicable, to review the
documents relating to the mortgage loans as agent of the trustee.

                                       46

<PAGE>



     Notwithstanding these provisions, unless the related prospectus supplement
otherwise provides, no mortgage loan will be purchased from a trust fund for
which a REMIC election is to be made if the purchase would result in a
prohibited transaction tax under the Code.

     Assignment of Agency Securities. The depositor will cause the Agency
Securities to be registered in the name of the trustee or its nominee, and the
trustee concurrently will execute, countersign and deliver the certificates.
Each Agency Security will be identified in a schedule appearing as an exhibit to
the pooling and servicing agreement, which will specify as to each Agency
Security the original principal amount and outstanding principal balance as of
the cut-off date, the annual pass-through rate and the maturity date.

     Assignment of Private Mortgage-Backed Securities. The depositor will cause
the Private Mortgage-Backed Securities to be registered in the name of the
trustee. The trustee (or the custodian) will have possession of any certificated
Private Mortgage-Backed Securities. Generally, 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 Fund -- Private Mortgage-Backed
Securities." Each Private Mortgage-Backed Security will be identified in a
schedule appearing as an exhibit to the related pooling and servicing 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 and other specified pertinent information for each Private Mortgage-Backed
Security conveyed to the trustee.

PAYMENTS ON MORTGAGE ASSETS; DEPOSITS TO CERTIFICATE ACCOUNT

     The master servicer will establish and maintain or cause to be established
and maintained for the related trust fund a separate account or accounts for the
collection of payments on the related Mortgage Assets in the trust fund (the
"Certificate Account"). The applicable prospectus supplement may provide for
other requirements for the Certificate Account, but if it does not, then the
Certificate Account must be either

     o    maintained with a depository institution the short-term unsecured debt
          obligations of which are rated in the highest short-term rating
          category by the nationally recognized statistical rating organizations
          that rated one or more classes of the related series of certificates
          at the request of the depositor, or in the case of a depository
          institution that is the principal subsidiary of a holding company, the
          short-term debt obligations of the holding company are so rated,

     o    an account or accounts the deposits in which are insured by the FDIC
          or SAIF to the limits established by the FDIC or the SAIF, and the
          uninsured deposits in which are otherwise secured such that, as
          evidenced by an opinion of counsel, the certificateholders have a
          claim with respect to the funds in the Certificate Account or a
          perfected first priority security interest against any collateral
          securing the funds that is superior to the claims of any other
          depositors or general creditors of the depository institution with
          which the Certificate Account is maintained,

     o    a trust account or accounts maintained with the trust department of a
          federal or a state chartered depository institution or trust company,
          acting in a fiduciary capacity or

     o    an account or accounts otherwise acceptable to each rating agency that
          rated one or more classes of the related series of certificates at the
          request of the depositor.

The collateral eligible to secure amounts in the Certificate Account is limited
to defined permitted investments. A Certificate Account may be maintained as an
interest bearing account or the funds held in it may be invested pending each
succeeding distribution date in defined permitted investments. To the extent
provided in the related prospectus supplement, the master servicer or its
designee will be entitled to receive the interest or other income earned on
funds in the Certificate Account as additional compensation and will be
obligated to deposit in the Certificate Account the amount of any loss
immediately as realized. The Certificate Account may be maintained with the
master servicer or with a depository institution that is an affiliate of the
master servicer, provided it meets the standards set forth above.

     The master servicer will deposit or cause to be deposited in the
Certificate Account for each trust fund on a daily basis, to the extent
applicable and unless the related pooling and servicing agreement provides for a
different deposit arrangement, the following payments and collections received
or advances

                                       47


<PAGE>

made by or on behalf of it after the cut-off date (other than payments due on or
before the cut-off date and exclusive of any amounts representing any retained
interest specified in the related prospectus supplement):

     o    all payments on account of principal, including principal prepayments
          and, if specified in the related prospectus supplement, prepayment
          penalties, on the mortgage loans;

     o    all payments on account of interest on the mortgage loans, net of
          applicable servicing compensation;

     o    all proceeds (net of unreimbursed payments of property taxes,
          insurance premiums and similar items ("Insured Expenses") incurred,
          and unreimbursed advances made, by the master servicer) of the hazard
          insurance policies and any primary mortgage insurance policies, to the
          extent the proceeds are not applied to the restoration of the property
          or released to the mortgagor in accordance with the master servicer's
          normal servicing procedures and all other cash amounts (net of
          unreimbursed expenses incurred in connection with liquidation or
          foreclosure and unreimbursed advances, if any) received and retained
          in connection with the liquidation of defaulted mortgage loans, 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;

     o    all proceeds of any mortgage loan or property in respect thereof
          purchased by the master servicer, the depositor or any seller as
          described under "Mortgage Loan Program -- Representations by Sellers;
          Repurchases" or "The Pooling and Servicing Agreement -- Assignment of
          Mortgage Assets" above and all proceeds of any mortgage loan
          repurchased as described under "The Pooling and Servicing Agreement --
          Termination; Optional Termination";

     o    all payments required to be deposited in the Certificate Account with
          respect to any deductible clause in any blanket insurance policy
          described under "-- Hazard Insurance";

     o    any amount required to be deposited by the master servicer in
          connection with losses realized on investments for the benefit of the
          master servicer of funds held in the Certificate Account and, to the
          extent specified in the related prospectus supplement, any payments
          required to be made by the master servicer in connection with
          prepayment interest shortfalls; and

     o    all other amounts required to be deposited in the Certificate Account
          pursuant to the pooling and servicing agreement.

    The master servicer (or the depositor, as applicable) may from time to time
direct the institution that maintains the Certificate Account to withdraw funds
from the Certificate Account for the following purposes:

     o    to pay to the master servicer the servicing fees described in the
          related prospectus supplement, the master servicing fees (subject to
          reduction) and, as additional servicing compensation, earnings on or
          investment income with respect to funds in the amounts in the
          Certificate Account credited thereto;

     o    to reimburse the master servicer for advances, the right of
          reimbursement with respect to any mortgage loan being limited to
          amounts received that represent late recoveries of payments of
          principal and interest on the mortgage loan (or insurance proceeds or
          liquidation proceeds from the mortgage loan) with respect to which the
          advance was made;

     o    to reimburse the master servicer for any advances previously made that
          the master servicer has determined to be nonrecoverable;

     o    to reimburse the master servicer from insurance proceeds not used to
          restore the property for expenses incurred by the master servicer and
          covered by the related insurance policies;

     o    to reimburse the master servicer for unpaid master servicing fees and
          unreimbursed out-of-pocket costs and expenses incurred by the master
          servicer in the performance of its servicing obligations, the right of
          reimbursement being limited to amounts received representing late
          recoveries of the payments for which the advances were made;

                                       48

<PAGE>

     o    to pay to the master servicer, with respect to each mortgage loan or
          property acquired in respect thereof that has been purchased by the
          master servicer pursuant to the pooling and servicing agreement, all
          amounts received on them and not taken into account in determining the
          principal balance of the repurchased mortgage loan;

     o    to reimburse the master servicer or the depositor for expenses
          incurred and reimbursable pursuant to the pooling and servicing
          agreement;

     o    to withdraw any amount deposited in the Certificate Account that was
          not required to be deposited in it; and

     o    to clear and terminate the Certificate Account upon termination of the
          pooling and servicing agreement.

     In addition, the pooling and servicing agreement will generally provide
that on or before the business day preceding each distribution date, the master
servicer shall withdraw from the Certificate Account the amount of Available
Funds, to the extent on deposit, for deposit in an account maintained by the
trustee for the related series of certificates.

COLLECTION PROCEDURES

     The master servicer, directly or through one or more sub-servicers, will
make reasonable efforts to collect all payments called for under the mortgage
loans and will, consistent with each pooling and servicing agreement and any
mortgage pool insurance policy, primary mortgage insurance policy, FHA
insurance, VA guaranty and bankruptcy bond or alternative arrangements, follow
the collection procedures it customarily follows for mortgage loans that are
comparable to the mortgage loans. Consistent with the above, the master servicer
may, in its discretion, waive any assumption fee, late payment or other charge
in connection with a mortgage loan and arrange with a mortgagor a schedule for
the liquidation of delinquencies running for no more than 125 days after the
applicable due date for each payment to the extent not inconsistent with the
coverage of the mortgage loan by a mortgage pool insurance policy, primary
mortgage insurance policy, FHA insurance, VA guaranty or bankruptcy bond or
alternative arrangements, if applicable. To the extent the master servicer is
obligated to make or to cause to be made advances, the obligation will remain
during any period of such an arrangement.

     The applicable prospectus supplement may provide for other alternatives
regarding due-on-sale clauses, but if it does not, then in any case in which
property securing a conventional mortgage loan has been, or is about to be,
conveyed by the mortgagor, the master servicer will, to the extent it has
knowledge of the conveyance or proposed conveyance, exercise or cause to be
exercised its rights to accelerate the maturity of the mortgage loan under any
due-on-sale clause applicable to it, but only if permitted by applicable law and
the exercise will not impair or threaten to impair any recovery under any
related primary mortgage insurance policy. If these conditions are not met or if
the master servicer reasonably believes it is unable under applicable law to
enforce the due-on-sale clause or if the mortgage loan is insured by the FHA or
partially guaranteed by the VA, the master servicer will enter into or cause to
be entered into an assumption and modification agreement with the person to whom
the property has been or is about to be conveyed, pursuant to which that person
becomes liable for repayment of the mortgage loan and, to the extent permitted
by applicable law, the mortgagor also remains liable on it. Any fee collected by
or on behalf of the master servicer for entering into an assumption agreement
will be retained by or on behalf of the master servicer as additional servicing
compensation. See "Certain Legal Aspects of the Mortgage Loans -- Due-on-Sale
Clauses." The terms of the related mortgage loan may not be changed in
connection with an assumption.

     Any prospective purchaser of a cooperative apartment will generally have to
obtain the approval of the board of directors of the relevant cooperative before
purchasing the shares and acquiring rights under the related proprietary lease
or occupancy agreement. See "Certain Legal Aspects of the Mortgage Loans." 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 the approval could
limit the number of potential purchasers for those shares and otherwise limit
the trust fund's ability to sell and realize the value of shares securing a
cooperative loan.

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<PAGE>


     In general, a "tenant-stockholder" (as defined in Code Section 216(b)(2))
of a corporation that qualifies as a "cooperative housing corporation" within
the meaning of Code Section 216(b)(1) is allowed a deduction for amounts paid or
accrued within his taxable year to the corporation representing his
proportionate share of certain interest expenses and certain real estate taxes
allowable as a deduction under Code Section 216(a) to the corporation under Code
Sections 163 and 164. In order for a corporation to qualify under Code Section
216(b)(1) for its taxable year in which the items are allowable as a deduction
to the corporation, the Section requires, among other things, that at least 80%
of the gross income of the corporation be derived from its tenant-stockholders
(as defined in Code Section 216(b)(2)). By virtue of this requirement, the
status of a corporation for purposes of Code Section 216(b)(1) 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 Section
216(b)(1) for any particular year. If a 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 Code Section 216(a) with respect to those years. In
view of the significance of the tax benefits accorded tenant-stockholders of a
corporation that qualifies under Code Section 216(b)(1), the likelihood that a
failure to qualify would be permitted to continue over a period of years appears
remote.

HAZARD INSURANCE

     The master servicer will require the mortgagor on each mortgage loan to
maintain a hazard insurance policy providing for no less than the coverage of
the standard form of fire insurance policy with extended coverage customary for
the type of mortgaged property in the state in which the mortgaged property is
located. The coverage will be in an amount that is at least equal to the lesser
of

     o    the maximum insurable value of the improvements securing the mortgage
          loan or

     o    the greater of

          o    the outstanding principal balance of the mortgage loan and

          o    an amount such that the proceeds of the policy shall be
               sufficient to prevent the mortgagor or the mortgagee from
               becoming a co-insurer.

All amounts collected by the master servicer under any hazard policy (except for
amounts 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) will be deposited in the related Certificate Account. If
the master servicer maintains a blanket policy insuring against hazard losses on
all the mortgage loans comprising part of a trust fund, it will have satisfied
its obligation relating to the maintenance of hazard insurance. The blanket
policy may contain a deductible clause, in which case the master servicer will
be required to deposit from its own funds into the related Certificate Account
the amounts that would have been deposited therein but for the clause.

     In general, the standard form of fire and extended coverage policy covers
physical damage to or destruction of the improvements securing a mortgage loan
by fire, lightning, explosion, smoke, windstorm and hail, riot, strike and civil
commotion, subject to the conditions and exclusions particularized in each
policy. Although the policies relating to the mortgage loans may have been
underwritten by different insurers under different state laws in accordance with
different applicable forms and therefore may not contain identical terms, their
basic terms are dictated by the respective state laws, and most policies
typically do not cover any physical damage resulting from war, revolution,
governmental actions, floods and other water-related causes, earth movement
(including earthquakes, landslides and mud flows), nuclear reactions, wet or dry
rot, vermin, rodents, insects or domestic animals, theft and, in certain cases,
vandalism. This list is merely indicative of certain kinds of uninsured risks
and is not all inclusive. If the mortgaged property securing a mortgage loan is
located in a federally designated special flood area at the time of origination,
the master servicer will require the mortgagor to obtain and maintain flood
insurance.

     The hazard insurance policies covering properties securing the mortgage
loans typically contain a clause that in effect requires the insured at all
times to carry insurance of a specified percentage (generally 80% to 90%) of the
full replacement value of the insured property in order to recover the full
amount of any partial loss. If the insured's coverage falls below this specified
percentage, then the insurer's liability upon partial loss will not exceed the
larger of the actual cash value (generally defined as

                                       50



<PAGE>


replacement cost at the time and place of loss, less physical depreciation) of
the improvements damaged or destroyed and the proportion of the loss that the
amount of insurance carried bears to the specified percentage of the full
replacement cost of the improvements. Since the amount of hazard insurance the
master servicer may cause to be maintained on the improvements securing the
mortgage loans declines as the principal balances owing on them decrease, and
since improved real estate generally has appreciated in value over time in the
past, the effect of this requirement upon partial loss may be that hazard
insurance proceeds will be insufficient to fully restore the damaged property.
If specified in the related prospectus supplement, a special hazard insurance
policy will be obtained to insure against certain of the uninsured risks
described above. See "Credit Enhancement -- Special Hazard Insurance Policies"
and "Credit Enhancements -- Insurance -- Special Hazard Insurance Policy" in the
related prospectus supplement.

    The master servicer will not require that a standard hazard or flood
insurance policy be maintained on the cooperative dwelling relating to any
cooperative loan. Generally, 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 insurance or do not maintain
adequate coverage or any insurance proceeds are not applied to the restoration
of damaged property, any damage to the borrower's cooperative dwelling or the
cooperative's building could significantly reduce the value of the collateral
securing the cooperative loan.

REALIZATION UPON DEFAULTED MORTGAGE LOANS

    Primary Mortgage Insurance Policies. The master servicer will maintain or
cause to be maintained, as the case may be, in effect, to the extent specified
in the related prospectus supplement, a primary mortgage insurance policy with
regard to each mortgage loan for which coverage is required. The master servicer
will not cancel or refuse to renew any primary mortgage insurance policy in
effect at the time of the initial issuance of a series of certificates that is
required to be kept in force under the applicable pooling and servicing
agreement unless the replacement primary mortgage insurance policy for the
cancelled or nonrenewed policy is maintained with an insurer whose claims-paying
ability is sufficient to maintain the current rating of the classes of
certificates of the series that have been rated.

    Although the terms of primary mortgage insurance vary, the amount of a claim
for benefits under a primary mortgage insurance policy covering a mortgage loan
will consist of the insured percentage of the unpaid principal amount of the
covered mortgage loan and accrued and unpaid interest on it and reimbursement of
certain expenses, less all rents or other payments collected or received by the
insured (other than the proceeds of hazard insurance) that are derived from or
in any way related to the mortgaged property, hazard insurance proceeds in
excess of the amount required to restore the mortgaged property and which have
not been applied to the payment of the mortgage loan, amounts expended but not
approved by the issuer of the related primary mortgage insurance policy, claim
payments previously made by the primary insurer and unpaid premiums.

    Primary mortgage insurance policies reimburse certain losses sustained from
defaults in payments by borrowers. Primary mortgage insurance policies will not
insure against, and exclude from coverage, a loss sustained from a default
arising from or involving certain matters, including fraud or negligence in
origination or servicing of the mortgage loans, including misrepresentation by
the originator, mortgagor or other persons involved in the origination of the
mortgage loan; failure to construct the mortgaged property subject to the
mortgage loan in accordance with specified plans; physical damage to the
mortgaged property; and the related sub-servicer not being approved as a
servicer by the primary insurer.

    Recoveries Under A Primary Mortgage Insurance Policy. As conditions
precedent to the filing of or payment of a claim under a primary mortgage
insurance policy covering a mortgage loan, the insured will be required to

    o    advance or discharge

    o    all hazard insurance policy premiums and

    o    as necessary and approved in advance by the primary insurer, real
         estate property taxes, all expenses required to maintain the related
         mortgaged property in at least as good a condition as existed at the
         effective date of the primary mortgage insurance policy, ordinary wear
         and tear

                                       51
<PAGE>



          excepted, mortgaged property sales expenses, any specified outstanding
          liens on the mortgaged property and foreclosure costs, including court
          costs and reasonable attorneys' fees;

     o    upon any physical loss or damage to the mortgaged property, have the
          mortgaged property restored and repaired to at least as good a
          condition as existed 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 master servicer, on behalf of itself, the trustee and the
certificateholders, will present claims to the insurer under each primary
mortgage insurance policy, and will take any reasonable steps consistent with
its practices regarding comparable mortgage loans and necessary to receive
payment or to permit recovery under the policy with respect to defaulted
mortgage loans. As set forth above, all collections by or on behalf of the
master servicer under any primary mortgage insurance policy and, when the
mortgaged property has not been restored, the hazard insurance policy, are to be
deposited in the Certificate Account, subject to withdrawal as heretofore
described.

     If the mortgaged property securing a defaulted mortgage loan is damaged and
proceeds, if any, from the related hazard insurance policy are insufficient to
restore the damaged mortgaged property to a condition sufficient to permit
recovery under the related primary mortgage insurance policy, if any, the master
servicer is not required to expend its own funds to restore the damaged
mortgaged property unless it determines that the restoration will increase the
proceeds to certificateholders on liquidation of the mortgage loan after
reimbursement of the master servicer for its expenses and that the expenses will
be recoverable by it from related insurance proceeds or liquidation proceeds.

     If recovery on a defaulted mortgage loan under any related primary mortgage
insurance policy is not available for the reasons set forth in the preceding
paragraph, or if the defaulted mortgage loan is not covered by a primary
mortgage insurance policy, the master servicer will be obligated to follow or
cause to be followed the normal practices and procedures that it deems
appropriate to realize upon the defaulted mortgage loan. If the proceeds of any
liquidation of the mortgaged property securing the defaulted mortgage loan are
less than the principal balance of the mortgage loan plus interest accrued on it
that is payable to certificateholders, the trust fund will realize a loss in the
amount of the difference plus the aggregate of expenses incurred by the master
servicer in connection with the proceedings that are reimbursable under the
pooling and servicing agreement. In the unlikely event that the proceedings
result in a total recovery which is, after reimbursement to the master servicer
of its expenses, in excess of the principal balance of the mortgage loan plus
interest accrued on it that is payable to certificateholders, the master
servicer will be entitled to withdraw or retain from the Certificate Account
amounts representing its normal servicing compensation with respect to the
mortgage loan and, unless otherwise specified in the related prospectus
supplement, amounts representing the balance of the excess, exclusive of any
amount required by law to be forwarded to the related mortgagor, as additional
servicing compensation.

     If the master servicer or its designee recovers insurance proceeds not used
to restore the property which, when added to any related liquidation proceeds
and after deduction of certain expenses reimbursable to the master servicer,
exceed the principal balance of a mortgage loan plus interest accrued thereon
that is payable to certificateholders, the master servicer will be entitled to
withdraw or retain from the Certificate Account amounts representing its normal
servicing compensation with respect to the mortgage loan. If the master servicer
has expended its own funds to restore the damaged mortgaged property and the
funds have not been reimbursed under the related hazard insurance policy, it
will be entitled to withdraw from the Certificate Account out of related
liquidation proceeds or insurance proceeds an amount equal to the expenses
incurred by it, in which event the trust fund may realize a loss up to the
amount so charged. Since insurance proceeds cannot exceed deficiency claims and
certain expenses incurred by the master servicer, no insurance payment or
recovery will result in a recovery to the trust fund that exceeds the principal
balance of the defaulted mortgage loan together with accrued interest on it. See
"Credit Enhancement" in this prospectus and in the related prospectus
supplement.

     Unless the related pooling and servicing agreement provides for a different
application of liquidation proceeds, the proceeds from any liquidation of a
mortgage loan will be applied in the following order of priority:

                                       52


<PAGE>

          first, to reimburse the master servicer for any unreimbursed expenses
     incurred by it to restore the related mortgaged property and any
     unreimbursed servicing compensation payable to the master servicer with
     respect to the mortgage loan;

          second, to reimburse the master servicer for any unreimbursed advances
     with respect to the mortgage loan;

          third, to accrued and unpaid interest (to the extent no advance has
     been made for the amount) on the mortgage loan;

          and fourth, as a recovery of principal of the mortgage loan.

    FHA Insurance; VA Guaranties. Mortgage loans designated in the related
prospectus supplement as insured by the FHA will be insured by the FHA as
authorized under the United States National Housing Act of 1934 of 1937, as
amended. Those mortgage loans will be insured under various FHA programs
including the standard FHA 203(b) program to finance the acquisition of one-to
four-family housing units and the FHA 245 graduated payment mortgage program.
These programs generally limit the principal amount and interest rates of the
mortgage loans insured. Mortgage loans insured by the FHA generally require a
minimum down payment of approximately 5% of the original principal amount of the
loan. No FHA-insured mortgage loans relating to a series may have an interest
rate or original principal amount exceeding the applicable FHA limits at the
time of origination of the loan.

    The insurance premiums for mortgage loans insured by the FHA are collected
by lenders approved by the HUD or by the master servicer or any sub-servicers
and are paid to the FHA. The regulations governing FHA single-family mortgage
insurance programs provide that insurance benefits are payable either upon
foreclosure (or other acquisition of possession) and conveyance of the mortgaged
premises to HUD or upon assignment of the defaulted mortgage loan to HUD. With
respect to a defaulted FHA-insured mortgage loan, the master servicer or any
sub-servicer is limited in its ability to initiate foreclosure proceedings. When
it is determined, either by the master servicer or any sub-servicer or HUD, that
default was caused by circumstances beyond the mortgagor's control, the master
servicer or any sub-servicer is expected to make an effort to avoid foreclosure
by entering, if feasible, into one of a number of available forms of forbearance
plans with the mortgagor. These plans may involve the reduction or suspension of
regular mortgage payments for a specified period, with the payments to be made
up on or before the maturity date of the mortgage, or the recasting of payments
due under the mortgage up to or beyond the maturity date. In addition, when a
default caused by circumstances beyond the mortgagor's control is accompanied by
certain other criteria, HUD may provide relief by making payments to the master
servicer or any sub-servicer in partial or full satisfaction of amounts due
under the mortgage loan (which payments are to be repaid by the mortgagor to
HUD) or by accepting assignment of the loan from the master servicer or any
sub-servicer. With certain exceptions, at least three full monthly installments
must be due and unpaid under the mortgage loan and HUD must have rejected any
request for relief from the mortgagor before the master servicer or any
sub-servicer may initiate foreclosure proceedings.

    HUD has the option, in most cases, to pay insurance claims in cash or in
debentures issued by HUD. Currently, claims are being paid in cash, and claims
have not been paid in debentures since 1965. HUD debentures issued in
satisfaction of FHA insurance claims bear interest at the applicable HUD
debentures interest rate. The master servicer of any sub-servicer of each
FHA-insured mortgage loan will be obligated to purchase the debenture issued in
satisfaction of the mortgage loan upon default for an amount equal to the
principal amount of the debenture.

    The amount of insurance benefits generally paid by the FHA is equal to the
entire unpaid principal amount of the defaulted mortgage loan adjusted to
reimburse the master servicer or sub-servicer for certain costs and expenses and
to deduct certain amounts received or retained by the master servicer or
sub-servicer after default. When entitlement to insurance benefits results from
foreclosure (or other acquisition of possession) and conveyance to HUD, the
master servicer or sub-servicer is compensated for no more than two-thirds of
its foreclosure costs, and is compensated for accrued and unpaid interest but in
general only to the extent it was allowed pursuant to a forbearance plan
approved by HUD. When entitlement to insurance benefits results from assignment
of the mortgage loan to HUD, the insurance payment includes full compensation
for interest accrued and unpaid to the assignment date. The insurance payment
itself, upon foreclosure of an FHA-insured mortgage loan, bears interest from a
date 30 days

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after the mortgagor's first uncorrected failure to perform any obligation to
make any payment due under the mortgage loan and, upon assignment, from the date
of assignment to the date of payment of the claim, in each case at the same
interest rate as the applicable HUD debenture interest rate as described above.

    Mortgage loans designated in the related prospectus supplement as guaranteed
by the VA will be partially guaranteed by the VA under the Serviceman's
Readjustment Act of 1944, as amended. The Serviceman's Readjustment Act of 1944,
as amended, permits a veteran (or in certain instances the spouse of a veteran)
to obtain a mortgage loan guaranty by the VA covering mortgage financing of the
purchase of a one- to four-family dwelling unit at interest rates permitted by
the VA. The program has no mortgage loan limits, requires no down payment from
the purchaser and permits the guarantee of mortgage loans of up to 30 years'
duration. However, no mortgage loan guaranteed by the VA will have an original
principal amount greater than five times the partial VA guaranty for the
mortgage loan.

    The maximum guaranty that may be issued by the VA under a VA guaranteed
mortgage loan depends upon the original principal amount of the mortgage loan,
as further described in 38 United States Code Section 3703(a), as amended. As of
February 1996, the maximum guaranty that may be issued by the VA under a VA
guaranteed mortgage loan of more than $144,000 is the lesser of 25% of the
original principal amount of the mortgage loan and $50,750. The liability on the
guaranty is reduced or increased pro rata 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. The VA may, at its option and
without regard to the guaranty, make full payment to a mortgage holder of
unsatisfied indebtedness on a mortgage upon its assignment to the VA.

    With respect to a defaulted VA guaranteed mortgage loan, the master servicer
or sub-servicer is, absent exceptional circumstances, authorized to announce its
intention to foreclose only when the default has continued for three months.
Generally, a claim for the guaranty is submitted after liquidation of the
mortgaged property.

    The amount payable under the guaranty will be the percentage of the
VA-insured mortgage loan originally guaranteed applied to indebtedness
outstanding as of the applicable date of computation specified in the VA
regulations. Payments under the guaranty will be equal to the unpaid principal
amount of the loan, interest accrued on the unpaid balance of the loan to the
appropriate date of computation and limited expenses of the mortgagee, but in
each case only to the extent that the amounts have not been recovered through
liquidation of the mortgaged property. The amount payable under the guaranty may
in no event exceed the amount of the original guaranty.

SERVICING AND OTHER COMPENSATION AND PAYMENT OF EXPENSES

    The principal servicing compensation to be paid to the master servicer in
respect of its master servicing activities for each series of certificates will
be equal to the percentage per annum described in the related prospectus
supplement (which may vary under certain circumstances) of the outstanding
principal balance of each mortgage loan, and the compensation will be retained
by it from collections of interest on the mortgage loan in the related trust
fund. As compensation for its servicing duties, a sub-servicer or, if there is
no sub-servicer, the master servicer will be entitled to a monthly servicing fee
as described in the related prospectus supplement. In addition, generally the
master servicer or a sub-servicer will retain all prepayment charges, assumption
fees and late payment charges, to the extent collected from mortgagors, and any
benefit that may accrue as a result of the investment of funds in the applicable
Certificate Account.

    The master servicer will, to the extent provided in the related pooling and
servicing agreement, pay or cause to be paid certain ongoing expenses associated
with each trust fund and incurred by it in connection with its responsibilities
under the related pooling and servicing agreement, including, without
limitation, payment of the fees and disbursements of the trustee, any custodian
appointed by the trustee, the certificate registrar and any paying agent, and
payment of expenses incurred in enforcing the obligations of sub-servicers and
sellers. The master servicer will be entitled to reimbursement of expenses
incurred in enforcing the obligations of sub-servicers and sellers under certain
limited circumstances. In addition, as indicated in the preceding section, the
master servicer will be entitled to reimbursement for

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certain expenses incurred by it in connection with any defaulted mortgage loan
as to which it has determined that all recoverable liquidation proceeds and
insurance proceeds have been received (a "Liquidated Mortgage"), and in
connection with the restoration of mortgaged properties, the right of
reimbursement being before the rights of certificateholders to receive any
related liquidation proceeds (including insurance proceeds).

EVIDENCE AS TO COMPLIANCE

    Each pooling and servicing agreement will provide that on or before a
specified date in each year, a firm of independent public accountants will
furnish a statement to the trustee to the effect that, on the basis of the
examination by the firm conducted substantially in compliance with the Uniform
Single Attestation Program for Mortgage Bankers or the Audit Program for
Mortgages serviced for Freddie Mac, the servicing by or on behalf of the master
servicer of mortgage loans, Private Mortgage-Backed Securities or Agency
Securities, under pooling and servicing agreements substantially similar to each
other (including the related pooling and servicing agreement) was conducted in
compliance with those agreements except for any significant exceptions or errors
in records that, in the opinion of the firm, the Audit Program for Mortgages
serviced for Freddie Mac or the Uniform Single Attestation Program for Mortgage
Bankers requires it to report. In rendering its statement the firm may rely, as
to matters relating to the direct servicing of mortgage loans, Private
Mortgage-Backed Securities or Agency Securities by sub-servicers, upon
comparable statements for examinations conducted substantially in compliance
with the Uniform Single Attestation Program for Mortgage Bankers or the Audit
Program for Mortgages serviced for Freddie Mac (rendered within one year of the
statement) of firms of independent public accountants with respect to the
related sub-servicer.

    Each pooling and servicing agreement will also provide for delivery to the
trustee, on or before a specified date in each year, of an annual statement
signed by two officers of the master servicer to the effect that the master
servicer has fulfilled its obligations under the pooling and servicing agreement
throughout the preceding year.

    Copies of the annual accountants' statement and the statement of officers of
the master servicer may be obtained by certificateholders of the related series
without charge upon written request to the master servicer at the address set
forth in the related prospectus supplement.

LIST OF CERTIFICATEHOLDERS

    Each pooling and servicing agreement will provide that three or more holders
of certificates of any series may, by written request to the trustee, obtain
access to the list of all certificateholders maintained by the trustee for the
purpose of communicating with other certificateholders with respect to their
rights under the pooling and servicing agreement and the certificates.

CERTAIN MATTERS REGARDING THE MASTER SERVICER AND THE DEPOSITOR

    The master servicer under each pooling and servicing agreement will be named
in the related prospectus supplement. The entity serving as master servicer may
be an affiliate of the depositor and may have other business relationships with
the depositor or the depositor's affiliates.

    Each pooling and servicing agreement will provide that the master servicer
may not resign from its obligations and duties under the pooling and servicing
agreement except upon a determination that the performance by it of its duties
under the pooling and servicing agreement is no longer permissible under
applicable law. No resignation will become effective until the trustee or a
successor servicer has assumed the master servicer's obligations and duties
under the pooling and servicing agreement.

    Each pooling and servicing agreement will further 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 fund or certificateholders for any action taken or for refraining from the
taking of any action in good faith pursuant to the pooling and servicing
agreement, or for errors in judgment. However, neither the master servicer, the
depositor nor any director, officer, employee, or agent of the master servicer
or the depositor will be protected against any liability that would otherwise be

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imposed for willful misfeasance, bad faith or negligence in the performance of
duties under the pooling and servicing agreement or for reckless disregard of
obligations and duties under the pooling and servicing agreement. Each pooling
and 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 will be entitled to indemnification by the related trust fund and
will be held harmless against any loss, liability or expense incurred in
connection with any legal action relating to the pooling and servicing agreement
or the certificates, other than any loss, liability or expense related to any
specific Mortgage Asset or Mortgage Assets (except any loss, liability or
expense otherwise reimbursable pursuant to the pooling and servicing agreement)
and any loss, liability or expense incurred for willful misfeasance, bad faith
or negligence in the performance of duties under the pooling and servicing
agreement or for reckless disregard of obligations and duties under the pooling
and servicing agreement. In addition, each pooling and servicing agreement will
provide that neither the master servicer nor the depositor will be under any
obligation to appear in, prosecute or defend any legal action that is not
incidental to its respective responsibilities under the pooling and servicing
agreement and that in its opinion may involve it in any expense or liability.
The master servicer or the depositor may, however, in its discretion undertake
any action that it deems appropriate with respect to the pooling and servicing
agreement and the rights and duties of the parties to the pooling and servicing
agreement and the interests of the certificateholders under the pooling and
servicing agreement. In that event, the legal expenses and costs of the action
and any liability resulting from it will be expenses, costs and liabilities of
the trust fund, and the master servicer or the depositor, as the case may be,
will be entitled to be reimbursed for them out of funds otherwise distributable
to certificateholders.

    Any person into which the master servicer may be merged or consolidated, or
any person resulting from any merger or consolidation to which the master
servicer is a party, or any person succeeding to the business of the master
servicer, will be the successor of the master servicer under each pooling and
servicing agreement, provided that the person is qualified to sell mortgage
loans to, and service mortgage loans on behalf of, Fannie Mae or Freddie Mac and
further provided that the merger, consolidation or succession does not adversely
affect the then current rating or ratings of the class or classes of
certificates of any series that have been rated.

EVENTS OF DEFAULT

    The applicable prospectus supplement may provide for other events of
default, but if it does not, then events of default under each pooling and
servicing agreement will consist of

    o    any failure by the master servicer to deposit in the Certificate
         Account or remit to the trustee any payment which continues unremedied
         for five days after the giving of written notice of the failure to the
         master servicer by the trustee or the depositor, or to the master
         servicer and the trustee by the holders of certificates having not
         less than 25% of the voting rights evidenced by the certificates;

    o    any failure by the master servicer to observe or perform in any
         material respect any of its other covenants or agreements in the
         pooling and servicing agreement which failure materially affects the
         rights of certificateholders that continues unremedied for sixty days
         after the giving of written notice of the failure to the master
         servicer by the trustee or the depositor, or to the master servicer
         and the trustee by the holders of certificates of any class evidencing
         not less than 25% of the voting rights evidenced by the certificate;
         and

    o    certain events of insolvency, readjustment of debt, marshalling of
         assets and liabilities or similar proceeding and certain actions by or
         on behalf of the master servicer indicating its insolvency,
         reorganization or inability to pay its obligations.

"Voting rights" are the portion of voting rights of all of the certificates that
is allocated to any certificate pursuant to the terms of the pooling and
servicing agreement.

    If specified in the related prospectus supplement, the pooling and servicing
agreement will permit the trustee to sell the Mortgage Assets and the other
assets of the trust fund if payments on them are insufficient to make payments
required in the pooling and servicing agreement. The assets of the trust

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fund will be sold only under the circumstances and in the manner specified in
the related prospectus supplement.

RIGHTS UPON EVENT OF DEFAULT

    So long as an event of default under an pooling and servicing agreement
remains unremedied, the depositor or the trustee may, and at the direction of
holders of certificates having not less than 66 2/3% of the voting rights and
under any other circumstances specified in the pooling and servicing agreement,
the trustee shall, terminate all of the rights and obligations of the master
servicer under the pooling and servicing agreement relating to the trust fund
and in the Mortgage Assets, whereupon the trustee will succeed to all of the
responsibilities, duties and liabilities of the master servicer under the
pooling and servicing agreement, including, if specified in the related
prospectus supplement, the obligation to make advances, and will be entitled to
similar compensation arrangements. If the trustee is unwilling or unable so to
act, it may appoint, or petition a court of competent jurisdiction for the
appointment of, a mortgage loan servicing institution with a net worth of at
least $10,000,000 to act as successor to the master servicer under the pooling
and servicing agreement. Pending appointment, the trustee is obligated to act as
master servicer. The trustee and any successor may agree upon the servicing
compensation to be paid to the successor servicer, which may not be greater than
the compensation payable to the master servicer under the pooling and servicing
agreement.

    No certificateholder, solely by virtue of its status as a certificateholder,
will have any right under any pooling and servicing agreement to institute any
proceeding with respect to the pooling and servicing agreement, unless the
holder previously has given to the trustee written notice of default and unless
the holders of any class of certificates of the series evidencing not less than
25% of the voting rights have requested the trustee in writing to institute a
proceeding in its own name as trustee and have offered to the trustee reasonable
indemnity, and the trustee for 60 days has neglected or refused to institute the
proceeding.

AMENDMENT

    The applicable prospectus supplement may specify other amendment provisions,
but if it does not, then each pooling and servicing agreement may be amended by
the depositor, the master servicer and the trustee, without the consent of any
of the certificateholders,

          (a) to cure any ambiguity or mistake;

          (b) to correct any defective provision therein or to supplement any
     provision in the pooling and servicing agreement that may be inconsistent
     with any other provision in it;

          (c) to add to the duties of the depositor, the seller or the master
     servicer;

          (d) to add any other provisions with respect to matters or questions
     arising under the pooling and servicing agreement; or

          (e) to modify, alter, amend, add to or rescind any of the terms or
     provisions contained in the pooling and servicing agreement.

However, no action pursuant to clauses (d) or (e) may, as evidenced by an
opinion of counsel, adversely affect in any material respect the interests of
any certificateholder. But no opinion of counsel will be required if the person
requesting the amendment obtains a letter from each rating agency requested to
rate the class or classes of certificates of the series stating that the
amendment will not result in the downgrading or withdrawal of the respective
ratings then assigned to the certificates.

    In addition, to the extent provided in the related pooling and servicing
agreement, an pooling and servicing agreement may be amended without the consent
of any of the certificateholders to change the manner in which the Certificate
Account is maintained, if the change does not adversely affect the then current
rating of the class or classes of certificates of the series that have been
rated at the request of the depositor. Moreover, the related pooling and
servicing agreement may be amended to modify, eliminate or add to any of its
provisions to the extent necessary to maintain the qualification of the related
trust fund as a REMIC or to avoid or minimize the risk of imposition of any tax
on the REMIC, if a REMIC election is made with respect to the trust fund, or to
comply with any other requirements of the Code, if

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the trustee has received an opinion of counsel to the effect that the action is
necessary or helpful to maintain the qualification, avoid or minimize that risk
or comply with those requirements, as applicable.

    The applicable prospectus supplement may specify other amendment provisions,
but if it does not, then each pooling and servicing agreement may also be
amended by the depositor, the master servicer and the trustee with the consent
of holders of certificates of the series evidencing a majority in interest of
each class affected thereby for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of the pooling and
servicing agreement or of modifying in any manner the rights of the holders of
the related certificates. However, no amendment may

        (a) reduce in any manner the amount of, or delay the timing of, payments
    received on Mortgage Assets that are required to be distributed on any
    certificate without the consent of the holder of the certificate,

        (b) adversely affect in any material respect the interests of the
    holders of any class of certificates in a manner other than as described in
    (a), without the consent of the holders of certificates of the class
    evidencing, as to the class, percentage interests aggregating 66%, or

        (c) reduce the aforesaid percentage of certificates of any class of
    holders that is required to consent to the amendment without the consent of
    the holders of all certificates of the class covered by the pooling and
    servicing agreement then outstanding.

If a REMIC election is made with respect to a trust fund, the trustee will not
be entitled to consent to an amendment to the related pooling and servicing
agreement without having first received an opinion of counsel to the effect that
the amendment will not cause the trust fund to fail to qualify as a REMIC.

TERMINATION; OPTIONAL TERMINATION

    Generally, the obligations created by each pooling and servicing agreement
for each series of certificates will terminate upon the payment to the related
certificateholders of all amounts held in the Certificate Account or by the
master servicer and required to be paid to them pursuant to the pooling and
servicing agreement following the later of

    o    the final payment or other liquidation of the last of the Mortgage
         Assets subject to it or the disposition of all property acquired upon
         foreclosure of the Mortgage Assets remaining in the trust fund and

    o    the purchase by the master serviceer or, if REMIC treatment has been
         elected and if specified in the related prospectus supplement, by the
         holder of the residual interest in the REMIC (see "Material Federal
         Income Tax Consequences" in this prospectus and in the related
         prospectus supplement), from the related trust fund of all of the
         remaining Mortgage Assets and all property acquired in respect of the
         Mortgage Assets.

    Any purchase of Mortgage Assets and property acquired in respect of Mortgage
Assets evidenced by a series of certificates will be made at the option of the
master servicer or the party specified in the related prospectus supplement,
including the holder of the REMIC residual interest, at a price, and in
accordance with the procedures, specified in the related prospectus supplement.
The exercise of that right will effect early retirement of the certificates of
that series, but the right of the master servicer or the other party or, if
applicable, the holder of the REMIC residual interest, to so purchase is subject
to the principal balance of the related Mortgage Assets being less than the
percentage specified in the related prospectus supplement of the aggregate
principal balance of the Mortgage Assets at the cut-off date for the series. The
foregoing is subject to the provision that if a REMIC election is made with
respect to a trust fund, any repurchase pursuant to the second bulleted item
above will be made only in connection with a "qualified liquidation" of the
REMIC within the meaning of Section 860F(a)(4) of the Code.

THE TRUSTEE

    The trustee under each pooling and servicing agreement will be named in the
applicable prospectus supplement. The commercial bank or trust company serving
as trustee may have normal banking relationships with the depositor, the master
servicer and any of their respective affiliates.

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                  CERTAIN LEGAL ASPECTS OF THE MORTGAGE LOANS

    The following discussion contains summaries, which are general in nature, of
certain legal matters relating to the mortgage loans. Because the legal aspects
are governed primarily by applicable state law (which laws may differ
substantially), the summaries do not purport to be complete or to reflect the
laws of any particular state or to encompass the laws of all states in which the
security for the mortgage loans is situated.

GENERAL

    The mortgage loans will be secured by deeds of trust, mortgages, security
deeds or deeds to secure debt, depending upon the prevailing practice in the
state in which the property subject to the loan is located. Deeds of trust are
used almost exclusively in California instead of mortgages. A mortgage creates a
lien upon the real property encumbered by the mortgage, which lien is generally
not before the lien for real estate taxes and assessments. Priority between
mortgages depends on their terms and generally on the order of recording with a
state or county office. There are two parties to a mortgage, the mortgagor, who
is the borrower and owner of the mortgaged property, and the mortgagee, who is
the lender. Under the mortgage instrument, the mortgagor delivers to the
mortgagee a note or bond and the mortgage. Although a deed of trust is similar
to a mortgage, a deed of trust formally has three parties, the borrower-property
owner called the trustor (similar to a mortgagor), a lender (similar to a
mortgagee) called the beneficiary, 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, generally with a power of sale, to the trustee to secure
payment of the obligation. A security deed and a deed to secure debt are special
types of deeds which indicate on their face that they are granted to secure an
underlying debt. By executing a security deed or deed to secure debt, the
grantor conveys title to, as opposed to merely creating a lien upon, the subject
property to the grantee until the underlying debt is repaid. The trustee's
authority under a deed of trust, the mortgagee's authority under a mortgage and
the grantee's authority under a security deed or deed to secure debt are
governed by law and, with respect to some deeds of trust, the directions of the
beneficiary.

    Cooperatives. Certain of the mortgage loans may be cooperative loans. The
cooperative owns all the real property that comprises the project, including the
land, separate dwelling units and all common areas. The cooperative is directly
responsible for project management and, in most cases, payment of real estate
taxes and hazard and liability insurance. If there is a blanket mortgage on the
cooperative or underlying land or both, as is generally the case, the
cooperative, as project mortgagor, is also responsible for meeting these
mortgage obligations. A blanket mortgage is ordinarily incurred by the
cooperative in connection with the construction or purchase of the cooperative's
apartment building. The interest of the occupant under proprietary leases or
occupancy agreements to which that cooperative is a party are generally
subordinate to the interest of the holder of the blanket mortgage in that
building. If the cooperative is unable to meet the payment obligations arising
under its blanket mortgage, the mortgagee holding the blanket mortgage could
foreclose on that mortgage and terminate all subordinate proprietary leases and
occupancy agreements. In addition, the blanket 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 lump sum at final maturity.
The inability of the cooperative to refinance this mortgage and its consequent
inability to make the final payment could lead to foreclosure by the mortgagee
providing the financing. A foreclosure in either event by the holder of the
blanket mortgage 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 a trust fund
including cooperative loans, the collateral securing the cooperative loans.

    The cooperative is owned by tenant-stockholders who, through ownership of
stock, shares or membership certificates in the corporation, receive proprietary
leases or occupancy agreements which confer exclusive rights to occupy specific
units. Generally, a tenant-stockholder of a cooperative must make a monthly
payment to the cooperative representing the tenant-stockholder's pro rata share
of the cooperative's payments for its blanket mortgage, real property taxes,
maintenance expenses and other capital or ordinary expenses. An ownership
interest in a cooperative and accompanying rights is financed through a
cooperative share loan evidenced by a promissory note and secured by a security
interest in the occupancy agreement or proprietary lease and in the related
cooperative shares. The lender takes

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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 below, upon default of the
tenant-stockholder, the lender may sue for judgment on the promissory 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.

FORECLOSURE AND REPOSSESSION

    Deed of Trust. Foreclosure of a deed of trust is generally accomplished by a
non-judicial sale under a specific provision in the deed of trust which
authorizes the trustee to sell the property at public auction upon any default
by the borrower under the terms of the note or deed of trust. In certain states,
foreclosure also may be accomplished by judicial action in the manner provided
for foreclosure of mortgages. In some states, such as California, the trustee
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 any notice of default and
notice of sale. In addition, the trustee must provide notice in some states to
any other individual having an interest of record in the real property,
including any junior lien holders. If the deed of trust is not reinstated within
any applicable cure period, a notice of sale must be posted in a public place
and, in most states, including California, published for a specified period of
time in one or more newspapers. In addition, these notice provisions require
that a copy of the notice of sale be posted on the property and sent to all
parties having an interest of record in the property. In California, the entire
process from recording a notice of default to a non-judicial sale usually takes
four to five months.

    In some states, including California, the borrower-trustor has the right to
reinstate the loan at any time following default until shortly before the
trustee's sale. In general, the borrower, or any other 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. Certain state laws control the amount of
foreclosure expenses and costs, including attorney's fees, which may be
recoverable by a lender.

    Mortgages. Foreclosure of a mortgage is generally accomplished by judicial
action. The action is initiated by the service of legal pleadings upon all
parties having an interest in the real property. Delays in completion of the
foreclosure may occasionally result from difficulties in locating necessary
parties. Judicial foreclosure proceedings are often not contested by any of the
parties. When the mortgagee's right to foreclosure is contested, the legal
proceedings necessary to resolve the issue can be time consuming. After the
completion of a judicial foreclosure proceeding, the court generally issues a
judgment of foreclosure and appoints a referee or other court officer to conduct
the sale of the property. In general, the borrower, or any other person having a
junior encumbrance on the real estate, may, during a statutorily prescribed
reinstatement period, cure a monetary default by paying the entire amount in
arrears plus other designated costs and expenses incurred in enforcing the
obligation. Generally, state law controls the amount of foreclosure expenses and
costs, including attorney's fees, which may be recovered by a lender. After the
reinstatement period has expired without the default having been cured, the
borrower or junior lienholder no longer has the right to reinstate the loan and
must pay the loan in full to prevent the scheduled foreclosure sale. If the deed
of trust is not reinstated, 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 addition, some state laws require that a copy of the notice of
sale be posted on the property and sent to all parties having an interest in the
real property.

    Although foreclosure sales are typically public sales, frequently no third
party purchaser bids in excess of the lender's lien because of the difficulty of
determining the exact status of title to the property, the possible
deterioration of the property during the foreclosure proceedings and a
requirement that the purchaser pay for the property in cash or by cashier's
check. Thus the foreclosing lender often purchases the property from the trustee
or referee for an amount equal to the principal amount outstanding under the
loan, accrued and unpaid interest and the expenses of foreclosure. Thereafter,
the lender will assume the burden of ownership, including obtaining hazard
insurance and making repairs at its own expense necessary to render the property
suitable for sale. The lender will commonly obtain the services of a real

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estate broker and pay the broker's commission in connection with the sale of the
property. Depending upon market conditions, the ultimate proceeds of the sale of
the property may not equal the lender's investment in the property.

    Courts have imposed general equitable principles upon foreclosure, which are
generally designed to mitigate the legal consequences to the borrower of the
borrower's defaults under the loan documents. Some courts have been faced with
the issue of whether federal or state constitutional provisions reflecting due
process concerns for fair notice require that borrowers under deeds of trust
receive notice longer than that prescribed by statute. For the most part, these
cases have upheld the notice provisions as being reasonable or have found that
the sale by a trustee under a deed of trust does not involve sufficient state
action to afford constitutional protection to the borrower.

    Cooperative Loans. The cooperative shares owned by the tenant-stockholder
and pledged to the lender are, in almost all cases, subject to restrictions on
transfer as set forth in the cooperative's certificate of incorporation and
bylaws, as well as the proprietary lease or occupancy agreement, and may be
cancelled by the cooperative for failure by the tenant-stockholder to pay rent
or other obligations or charges owed by the tenant-stockholder, including
mechanics' liens against the cooperative apartment building incurred by the
tenant-stockholder. The proprietary lease or occupancy agreement generally
permits the cooperative to terminate the lease or agreement if an obligor fails
to make payments or defaults in the performance of covenants required under it.
Typically, the lender and the cooperative enter into a recognition agreement,
which establishes the rights and obligations of both parties upon 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 generally provides that, if the tenant-stockholder
has defaulted under the proprietary lease or occupancy agreement, the
cooperative will take no action to terminate the lease or agreement until the
lender has been provided with 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 the sale of the cooperative apartment, subject,
however, to the cooperative's right to sums due under the proprietary lease or
occupancy agreement. The total amount owed to the cooperative by the
tenant-stockholder, which the lender generally cannot restrict and does not
monitor, could reduce the value of the collateral below the outstanding
principal balance of the cooperative loan and accrued and unpaid interest on it.

    Recognition agreements also provide that upon foreclosure of a cooperative
loan, the lender must obtain the approval or consent of the cooperative as
required by the proprietary lease before transferring the cooperative shares or
assigning the proprietary lease. Generally, the lender is not limited in any
rights it may have to dispossess the tenant-stockholders.

    In some states, foreclosure on the cooperative shares is accomplished by a
sale in accordance with the provisions of Article 9 of the 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 foreclosure 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
foreclosure. Generally, a sale conducted according to the usual practice of
banks selling similar collateral 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, generally provides that the lender's right to reimbursement
is subject to the right of the cooperative 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. Conversely, if a
portion of the indebtedness remains unpaid, the tenant-stockholder is generally
responsible for the deficiency. See "Anti-Deficiency Legislation and Other
Limitations on Lenders."

    In the case of foreclosure on a building converted from a rental building to
a building owned by a cooperative under a non-eviction plan, some states require
that a purchaser at a foreclosure sale take the property subject to rent control
and rent stabilization laws that apply to certain tenants who elected to

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remain in the building but who did not purchase shares in the cooperative when
the building was so converted.

RIGHTS OF REDEMPTION

    In some states after a sale pursuant to a deed of trust or foreclosure of a
mortgage, the borrower and certain foreclosed junior lienors are given a
statutory period in which to redeem the property from the foreclosure sale. In
certain other states, including California, this right of redemption applies
only to sales following judicial foreclosure, and not to sales pursuant to a
non-judicial power of sale. In most states where the right of redemption is
available, statutory redemption may occur upon payment of the foreclosure
purchase price, accrued interest and taxes. In some states, the right to redeem
is an equitable right. The effect of a right of redemption is to diminish the
ability of the lender to sell the foreclosed property. The exercise of a right
of redemption would defeat the title of any purchaser at a foreclosure sale, or
of any purchaser from the lender after judicial foreclosure or sale under a deed
of trust. Consequently, the practical effect of the redemption right is to force
the lender to retain the property and pay the expenses of ownership until the
redemption period has run.

ANTI-DEFICIENCY LEGISLATION AND OTHER LIMITATIONS ON LENDERS

    Certain states have imposed statutory restrictions that limit the remedies
of a beneficiary under a deed of trust or a mortgagee under a mortgage. In some
states, including California, statutes limit the right of the beneficiary or
mortgagee to obtain a deficiency judgment against the borrower following
foreclosure or a sale under a deed of trust. A deficiency judgment is a personal
judgment against the borrower equal in most cases to the difference between the
amount due to the lender and the current fair market value of the property at
the time of the foreclosure sale. As a result of these prohibitions, it is
anticipated that in most instances the master servicer will utilize the
non-judicial foreclosure remedy and will not seek deficiency judgments against
defaulting mortgagors.

    Some state statutes may require the beneficiary or mortgagee to exhaust the
security afforded under a deed of trust or mortgage by foreclosure in an attempt
to satisfy the full debt before bringing a personal action against the borrower.
In certain 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, following judgment on a personal action, the
lender may be considered to have elected a remedy and may be precluded from
exercising other remedies with respect to the security. Consequently, the
practical effect of the election requirement, when applicable, is that lenders
will usually proceed first against the security rather than bringing a personal
action against the borrower.

    In some states, exceptions to the anti-deficiency statutes are provided for
in certain instances where the value of the lender's security has been impaired
by acts or omissions of the borrower, for example, upon waste of the property.

    In addition to anti-deficiency and related legislation, numerous other
federal and state statutory provisions, including the federal bankruptcy laws,
the federal Soldiers' and Sailors' Civil Relief Act of 1940 and state laws
affording relief to debtors, may interfere with or affect the ability of the
secured mortgage lender to realize on its security. For example, in a proceeding
under the federal Bankruptcy Code, a lender may not foreclose on a mortgaged
property without the permission of the bankruptcy court. And in certain
instances a bankruptcy court may allow a borrower to reduce the monthly
payments, change the rate of interest, and alter the mortgage loan repayment
schedule for under collateralized mortgage loans. The effect of these types of
proceedings can be to cause delays in receiving payments on the loans underlying
certificates and even to reduce the aggregate amount of payments on the loans
underlying certificates.

    The federal tax laws provide priority to certain tax liens over the lien of
a mortgage or secured party. Numerous federal and state consumer protection laws
impose substantive requirements upon mortgage lenders in connection with the
origination, servicing and enforcement of mortgage loans. These 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

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and state laws impose specific statutory liabilities on lenders who fail to
comply with the provisions of the law. In some cases, this liability may affect
assignees of the loans or contracts.

    Generally, Article 9 of the UCC governs foreclosure on cooperative shares
and the related proprietary lease or occupancy agreement. 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.

ENVIRONMENTAL RISKS

    Real property pledged as security to a lender may be subject to unforeseen
environmental risks. Under the laws of certain states, contamination of a
property may give rise to a lien on the property to assure the payment of the
costs of clean-up. In several states that lien has priority over the lien of an
existing mortgage on the property. In addition, under the federal Comprehensive
Environmental Response, Compensation and Liability Act of 1980 ("CERCLA"), the
EPA may impose a lien on property where the EPA has incurred clean-up costs.
However, a CERCLA lien is subordinate to pre-existing, perfected security
interests.

    Under the laws of some states, and under CERCLA, it is conceivable that a
secured lender may be held liable as an "owner" or "operator" for the costs of
addressing releases or threatened releases of hazardous substances at a
mortgaged property, even though the environmental damage or threat was caused by
a prior or current owner or operator. CERCLA imposes liability for the costs on
any and all "responsible parties," including owners or operators. However,
CERCLA excludes from the definition of "owner or operator" a secured creditor
who holds indicia of ownership primarily to protect its security interest but
does not "participate in the management" of the property. Thus, if a lender's
activities begin to encroach on the actual management of a contaminated facility
or property, the lender may incur liability as an "owner or operator" under
CERCLA. Similarly, if a lender forecloses and takes title to a contaminated
facility or property, the lender may incur CERCLA liability in various
circumstances, including when it holds the facility or property as an investment
(including leasing the facility or property to a third party), or fails to
market the property in a timely fashion.

    Whether actions taken by a lender would constitute participation in the
management of a property causing the lender to lose the protection of the
secured creditor exclusion has been a matter of judicial interpretation of the
statutory language, and court decisions have historically been inconsistent. In
United States v. Fleet Factors Corp. (1990), the United States Court of Appeals
for the Eleventh Circuit suggested that the mere capacity of the lender to
influence a borrower's decisions regarding disposal of hazardous substances was
sufficient participation in the management of the borrower's business to deny
the protection of the secured creditor exclusion to the lender, regardless of
whether the lender actually exercised influence. Other judicial decisions did
not interpret the secured creditor exclusion as narrowly as did the Eleventh
Circuit.

    This ambiguity appears to have been resolved by the enactment of the Asset
Conservation, Lender Liability and Deposit Insurance Protection Act of 1996 (the
"Asset Conservation Act"), which took effect on September 30, 1996. The Asset
Conservation Act provides that to be deemed to have participated in the
management of a secured property, a lender must actually participate in the
operational affairs of the property or of the borrower. The Asset Conservation
Act also provides that participation in the management of the property does not
include "merely having the capacity to influence, or unexercised right to
control" operations. Rather, a lender will lose the protection of the secured
creditor exclusion 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 all operational
functions of the secured property.

    If a lender is or becomes liable, it can bring an action for contribution
against any other "responsible parties," including a previous owner or operator,
who created the environmental hazard, but those persons or entities may be
bankrupt or otherwise judgment proof. The costs associated with environmental
cleanup may be substantial. It is conceivable that the costs arising from the
circumstances set forth above would result in a loss to certificateholders.

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    CERCLA does not apply to petroleum products, and the secured creditor
exclusion does not govern liability for cleanup costs under federal laws other
than CERCLA, in particular Subtitle I of the federal Resource Conservation and
Recovery Act ("RCRA"), which regulates underground petroleum storage tanks
(except heating oil tanks). The EPA has adopted a lender liability rule for
underground storage tanks under Subtitle I of RCRA. Under that rule, a holder of
a security interest in an underground storage tank or real property containing
an underground storage tank is not considered an operator of the underground
storage tank as long as petroleum is not added to, stored in or dispensed from
the tank. Moreover, under the Asset Conservation Act, the protections accorded
to lenders under CERCLA are also accorded to holders of security interests in
underground petroleum storage tanks. It should be noted, however, that liability
for cleanup of petroleum contamination may be governed by state law, which may
not provide for any specific protection for secured creditors.

    Except as otherwise specified in the applicable prospectus supplement, at
the time the mortgage loans were originated, no environmental assessment or a
very limited environmental assessment of the Mortgage Properties was conducted.

DUE-ON-SALE CLAUSES

    Generally, each conventional mortgage loan will contain a due-on-sale clause
which will generally provide that if the mortgagor or obligor sells, transfers
or conveys the mortgaged property, the loan may be accelerated by the mortgagee.
In recent years, court decisions and legislative actions have placed substantial
restriction on the right of lenders to enforce these clauses in many states. For
instance, the California Supreme Court in August 1978 held that due-on-sale
clauses were generally unenforceable. However, the Garn-St Germain Depository
Institutions Act of 1982 (the "Garn-St Germain Act"), subject to specified
exceptions, preempts state constitutional, statutory and case law prohibiting
the enforcement of due-on-sale clauses. As to loans secured by an owner-occupied
residence, the Garn-St Germain Act sets forth nine specific instances in which a
mortgagee covered by the Garn-St Germain Act may not exercise its rights under a
due-on-sale clause, notwithstanding the fact that a transfer of the property may
have occurred. The inability to enforce a due-on-sale clause may result in
transfer of the related mortgaged property to an uncreditworthy person, which
could increase the likelihood of default or may result in a mortgage bearing an
interest rate below the current market rate being assumed by a new home buyer,
which may affect the average life of the mortgage loans and the number of
mortgage loans which may extend to maturity.

PREPAYMENT CHARGES

    Under certain state laws, prepayment charges may not be imposed after a
certain period of time following the origination of mortgage loans with respect
to prepayments on loans secured by liens encumbering owner-occupied residential
properties. Since many of the mortgaged properties will be owner-occupied, it is
anticipated that prepayment charges may not be imposed on many of the mortgage
loans. The absence of this a restraint on prepayment, particularly with respect
to fixed rate mortgage loans having higher mortgage rates, may increase the
likelihood of refinancing or other early retirement of the loans or contracts.

APPLICABILITY OF USURY LAWS

    Title V of the depository Institutions Deregulation and Monetary Control Act
of 1980, enacted in March 1980 ("Title V"), provides that state usury
limitations shall not apply to certain types of residential first mortgage loans
originated by certain lenders after March 31, 1980. The Office of Thrift
Supervision, as successor to the Federal Home Loan Bank Board, is authorized to
issue rules and regulations and to publish interpretations governing
implementation of Title V. The statute authorized the states to reimpose
interest rate limits by adopting, before April 1, 1983, a law or constitutional
provision that 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. Certain states have taken action to reimpose interest rate
limits or to limit discount points or other charges, or both.

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SOLDIERS' AND SAILORS' CIVIL RELIEF ACT

    Generally, under the terms of the Soldiers' and Sailors' Civil Relief Act of
1940, as amended (the "Relief Act"), a borrower who enters military service
after the origination of the borrower's mortgage loan (including a borrower who
is a member of the National Guard or is in reserve status at the time of the
origination of the mortgage loan and is later called to active duty) may not be
charged interest above an annual rate of 6% during the period of the borrower's
active duty status, unless a court orders otherwise upon application of the
lender. It is possible that this interest rate limitation could have an effect,
for an indeterminate period of time, on the ability of the master servicer to
collect full amounts of interest on some of the mortgage loans. Unless the
applicable prospectus supplement provides a special feature for a particular
trust fund, any shortfall in interest collections resulting from the application
of the Relief Act could result in losses to the holders of the certificates. In
addition, the Relief Act imposes limitations which would impair the ability of
the master servicer to foreclose on an affected mortgage loan during the
borrower's period of active duty status. Thus, if an affected mortgage loan goes
into default, there may be delays and losses occasioned by the inability to
realize upon the mortgaged property in a timely fashion.

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                    MATERIAL FEDERAL INCOME TAX CONSEQUENCES

    The following discussion is the opinion of Brown & Wood LLP, counsel to the
depositor, as to the material federal income tax consequences of the purchase,
ownership, and disposition of certificates. The opinion of Brown & Wood LLP is
based on laws, regulations, administrative rulings, and judicial decisions now
in effect, all of which are subject to change either prospectively or
retroactively. The following discussion does not describe aspects of federal tax
law that are unique to insurance companies, securities dealers and investors who
hold certificates as part of a straddle within the meaning of Section 1092 of
the Internal Revenue Code of 1986, as amended. Prospective investors are
encouraged to consult their tax advisors regarding the federal, state, local,
and any other tax consequences to them of the purchase, ownership, and
disposition of certificates.

GENERAL

    The federal income tax consequences to certificateholders will vary
depending on whether an election is made to treat the trust fund relating to a
particular series of certificates as a REMIC under the Code. The prospectus
supplement for each series of certificates will specify whether a REMIC election
will be made.

NON-REMIC CERTIFICATES

    If a REMIC election is not made, the trust fund will not be classified as an
association taxable as a corporation and that each trust fund will be classified
as a grantor trust under subpart E, Part I of subchapter J of chapter 1 of
subtitle A of the Internal Revenue Code of 1986 (the "Code" referred to in this
section unless otherwise indicated). In this case, owners of certificates will
be treated for federal income tax purposes as owners of a portion of the trust
fund's assets as described below. Brown & Wood LLP will issue an opinion
confirming the above-stated conclusions for each trust fund for which no REMIC
election is made.

  A. SINGLE CLASS OF CERTIFICATES

    Characterization. The trust fund may be created with one class of
certificates. In this case, each certificateholder will be treated as the owner
of a pro rata undivided interest in the interest and principal portions of the
trust fund represented by the certificates and will be considered the equitable
owner of a pro rata undivided interest in each of the mortgage loans in the
Pool. Any amounts received by a certificateholder in lieu of amounts due with
respect to any mortgage loans because of a default or delinquency in payment
will be treated for federal income tax purposes as having the same character as
the payments they replace.

    Each certificateholder will be required to report on its federal income tax
return in accordance with its method of accounting its pro rata share of the
entire income from the mortgage loans in the trust fund represented by
certificates, including interest, original issue discount ("OID"), if any,
prepayment fees, assumption fees, any gain recognized upon an assumption and
late payment charges received by the master servicer. Under Code Sections 162 or
212 each certificateholder will be entitled to deduct its pro rata share of
servicing fees, prepayment fees, assumption fees, any loss recognized upon an
assumption and late payment charges retained by the master servicer, provided
that the amounts are reasonable compensation for services rendered to the trust
fund. Certificateholders that are individuals, estates or trusts will be
entitled to deduct their share of expenses only to the extent expenses of the
trust fund plus their other miscellaneous itemized deductions (as defined in the
Code) exceed two percent of their adjusted gross income. A certificateholder
using the cash method of accounting must take into account its pro rata share of
income and deductions as and when collected by or paid to the master servicer. A
certificateholder using an accrual method of accounting ust take into account
its pro rata share of income as it accrues, or when received if the income is
received before it accrues, and must take into account its pro rata share of
deductions as they accrue. If the servicing fees paid to the master servicer are
deemed to exceed reasonable servicing compensation, the amount of any excess
could be considered as an ownership interest retained by the master servicer (or
any person to whom the master servicer assigned for

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value all or a portion of the servicing fees) in a portion of the interest
payments on the mortgage loans. The mortgage loans would then be subject to the
"coupon stripping" rules of the Code discussed below.

     Generally, as to each series of certificates:

     o    a certificate owned by a "domestic building and loan association"
          within the meaning of Code Section 7701(a)(19) representing principal
          and interest payments on mortgage loans will be considered to
          represent "loans . . . secured by an interest in real property which
          is . . . residential property" within the meaning of Code Section
          7701(a)(19)(C)(v), to the extent that the mortgage loans represented
          by that certificate are of a type described in that Code section;

     o    a certificate owned by a real estate investment trust representing an
          interest in mortgage loans will be considered to represent "real
          estate assets" within the meaning of Code Section 856(c)(4)(A), and
          interest income on the mortgage loans will be considered "interest on
          obligations secured by mortgages on real property" within the meaning
          of Code Section 856(c)(3)(B), to the extent that the mortgage loans
          represented by that certificate are of a type described in that Code
          section; and

     o    a certificate owned by a REMIC will represent an "obligation . . .
          which is principally secured, directly or indirectly, by an interest
          in real property" within the meaning of Code Section 860G(a)(3).

     Buydown Loans. Certain trust funds may hold buydown loans. These loans can
be secured not only by a mortgage on real property but also by a pledged account
that is drawn upon to subsidize the mortgagor's monthly mortgage payments for a
limited period of time. So long as the loan value of the real property at least
equals the amount of the loan, then for purposes of the above-described
requirements, the mortgage loan will be treated as fully secured by real
property. If the loan value of the real property is less than the amount of the
loan, then, a certificateholder could be required to treat the loan as one
secured by an interest in real property only to the extent of the loan value of
the real property. The related prospectus supplement for any series of
certificates will specify whether apportionment would be required.

     Premium. The price paid for a certificate by a holder will be allocated to
the holder's undivided interest in each mortgage loan based on each mortgage
loan's relative fair market value, so that the holder's undivided interest in
each mortgage loan will have its own tax basis. A certificateholder that
acquires an interest in mortgage loans at a premium may elect, under Code
Section 171, to amortize the premium under a constant interest method, provided
that the underlying mortgage loans with respect to the mortgage loans were
originated after September 27, 1985. Premium allocable to mortgage loans
originated on or before September 27, 1985 should be allocated among the
principal payments on the mortgage loans and allowed as an ordinary deduction as
principal payments are made. Amortizable bond premium will be treated as an
offset to interest income on the certificate. The basis for the certificate will
be reduced to the extent that amortizable premium is applied to offset interest
payments. It is not clear whether a reasonable prepayment assumption should be
used in computing amortization of premium allowable under Code Section 171.
However, recent changes to the Code require the use of a prepayment assumption
to accrue original issue discount on pools of receivables the yield on which may
be affected by prepayments for tax years beginning after August 5, 1997 and
prior legislative history indicated that if a prepayment assumption applied to
an instrument for purposes of the OID rules, that prepayment assumption should
be applied in amortizing bond premium.

     If a premium is not subject to amortization using a reasonable prepayment
assumption, the holder of a certificate acquired at a premium should recognize a
loss if a mortgage loan (or an underlying mortgage loan) prepays in full, equal
to the difference between the portion of the prepaid principal amount of the
mortgage loan (or underlying mortgage loan) that is allocable to the certificate
and the portion of the adjusted basis of the certificate that is allocable to
the mortgage loan (or underlying mortgage loan). If a reasonable prepayment
assumption is used to amortize premium, it appears that any loss would be
available, if at all, only if prepayments have occurred at a rate faster than
the reasonable assumed prepayment rate. It is not clear whether any other
adjustments would be required to reflect differences between an assumed
prepayment rate and the actual rate of prepayments. In addition, under recent
legislation, amounts received on the redemption of an obligation issued by a
natural person are considered received in exchange for the obligation if the
debt obligation is purchased or issued after June 8, 1997

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(i.e., treated the same as obligations issued by corporations). This change
could affect the character of any loss (e.g., cause the loss to be treated as
capital if the assets are held as capital assets by the taxpayer).

    On December 30, 1997 the IRS issued final regulations (the "Amortizable Bond
Premium Regulations") dealing with amortizable bond premium. These regulations
specifically do not apply to prepayable debt instruments subject to Code Section
1272(a)(6). Absent further guidance from the IRS, the trustee intends to account
for amortizable bond premium in the manner described above. Prospective
purchasers of the certificates are encouraged to consult their tax advisors
regarding the possible application of the Amortizable Bond Premium Regulations.

    Original Issue Discount. The IRS has stated in published rulings that, in
circumstances similar to those described in this prospectus, the special rules
of the Code relating to "original issue discount" (currently Code Sections 1271
through 1273 and 1275) will be applicable to a certificateholder's interest in
those mortgage loans meeting the conditions necessary for these sections to
apply. OID generally must be reported as ordinary gross income as it accrues
under a constant interest method. See "-- Multiple Classes of Certificates --
Certificates Representing Interests in Loans Other Than ARM Loans."

    Market Discount. A certificateholder that acquires an undivided interest in
mortgage loans may be subject to the market discount rules of Code Sections 1276
through 1278 to the extent an undivided interest in a mortgage loan is
considered to have been purchased at a "market discount." The amount of market
discount is equal to the excess of the portion of the principal amount of the
mortgage loan allocable to the holder's undivided interest in the mortgage loans
over the holder's tax basis in the undivided interest. Market discount with
respect to a certificate will be considered to be zero if the amount allocable
to the certificate is less than 0.25% of the certificate's stated redemption
price at maturity multiplied by the weighted average maturity remaining after
the date of purchase. Treasury regulations implementing the market discount
rules have not yet been issued; therefore, investors are advised to consult
their own tax advisors regarding the application of these rules and the
advisability of making any of the elections allowed under Code Sections 1276
through 1278.

    The Code provides that any principal payment (whether a scheduled payment or
a prepayment) or any gain on disposition of a market discount bond acquired by
the taxpayer after October 22, 1986, shall be treated as ordinary income to the
extent that it does not exceed the accrued market discount at the time of the
payment. The amount of accrued market discount for purposes of determining the
tax treatment of subsequent principal payments or dispositions of the market
discount bond is to be reduced by the amount so treated as ordinary income.

    The Code also grants the Treasury Department authority to issue regulations
providing for the computation of accrued market discount on debt instruments,
the principal of which is payable in more than one installment. Although the
Treasury Department has not yet issued regulations, rules described in the
relevant legislative history describes how market discount should be accrued on
instruments bearing market discount. According to the legislative history, the
holder of a market discount bond may elect to accrue market discount either on
the basis of a constant interest rate or according to one of the following
methods. If a certificate is issued with OID, the amount of market discount that
accrues during any accrual period would be equal to the product of the total
remaining market discount and a fraction, the numerator of which is the OID
accruing during the period and the denominator of which is the total remaining
OID at the beginning of the accrual period. For certificates issued without OID,
the amount of market discount that accrues during a period is equal to the
product of the total remaining market discount and a fraction, the numerator of
which is the amount of stated interest paid during the accrual period and the
denominator of which is the total amount of stated interest remaining to be paid
at the beginning of the accrual period. For purposes of calculating market
discount under any of these methods in the case of instruments that provide for
payments that may be accelerated due to prepayments of other obligations
securing the instruments, the same prepayment assumption applicable to
calculating the accrual of OID will apply. Recent legislation expands the
required use of a prepayment assumption for purposes of calculating OID for tax
years beginning after August 5, 1997 to pools of receivables the yield on which
may be affected due to prepayments and previous legislative history states
Congress intends that if a prepayment assumption would be used to calculate OID
it should also be used to accrue marked discount. Because the regulations
described above have not been issued, it is impossible to predict what

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effect those regulations might have on the tax treatment of a certificate
purchased at a discount or premium in the secondary market.

    A holder who acquired a certificate at a market discount also may be
required to defer, until the maturity date of the certificate or its earlier
disposition in a taxable transaction, the deduction of a portion of the amount
of interest that the holder paid or accrued during the taxable year on
indebtedness incurred or maintained to purchase or carry the certificate in
excess of the aggregate amount of interest (including OID) includible in the
holder's gross income for the taxable year with respect to the certificate. The
amount of the net interest expense deferred in a taxable year may not exceed the
amount of market discount accrued on the certificate for the days during the
taxable year on which the holder held the certificate and, in general, would be
deductible when the market discount is includible in income. The amount of any
remaining deferred deduction is to be taken into account in the taxable year in
which the certificate matures or is disposed of in a taxable transaction. In the
case of a disposition in which gain or loss is not recognized in whole or in
part, any remaining deferred deduction will be allowed to the extent of gain
recognized on the disposition. This deferral rule does not apply if the
certificateholder elects to include the market discount in income currently as
it accrues on all market discount obligations acquired by the certificateholder
in that taxable year or thereafter.

    Election to Treat All Interest as OID. 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 for certificates acquired on or after April 4,
1994. If an election to treat all interest as OID were to be made with respect
to a certificate with market discount, the certificateholder would be deemed to
have made an election to include in income currently market discount with
respect to all other debt instruments having market discount that the
certificateholder acquires during the year of the election or thereafter.
Similarly, a certificateholder that makes this election for a certificate that
is acquired at a premium will be deemed to have made an election to amortize
bond premium with respect to all debt instruments having amortizable bond
premium that the certificateholder owns or acquires. See "-- Single Class of
Certificates -- Premium." The election to accrue interest, discount and premium
on a constant yield method with respect to a certificate cannot be revoked
without the consent of the IRS.

  B. MULTIPLE CLASSES OF CERTIFICATES

    1. Stripped Bonds and Stripped Coupons

    Pursuant to Code Section 1286, the separation of ownership of the right to
receive some or all of the interest payments on an obligation from ownership of
the right to receive some or all of the principal payments results in the
creation of "stripped bonds" with respect to principal payments and "stripped
coupons" with respect to interest payments. For purposes of Code Sections 1271
through 1288, Code Section 1286 treats a stripped bond or a stripped coupon as
an obligation issued on the date that the stripped interest is created. If a
trust fund is created with two classes of certificates, one class of
certificates may represent the right to principal and interest, or principal
only, on all or a portion of the mortgage loans (the "Stripped Bond
Certificates"), while the second class of certificates may represent the right
to some or all of the interest on the same mortgage loans (the "Stripped Coupon
Certificates").

    Servicing fees in excess of reasonable servicing fees ("excess servicing")
will be treated under the stripped bond rules. If the excess servicing fee is
less than 100 basis points (i.e., 1% interest on the mortgage loan principal
balance) or the certificates are initially sold with a de minimis discount
(which amount may be calculated without a prepayment assumption), any non-de
minimis discount arising from a subsequent transfer of the certificates should
be treated as market discount. The IRS appears to require that reasonable
servicing fees be calculated on a mortgage loan by mortgage loan basis, which
could result in some mortgage loans being treated as having more than 100 basis
points of interest stripped off. See "-- Non-REMIC Certificates" and "Multiple
Classes of Senior Certificates -- Stripped Bonds and Stripped Coupons."

    Although current authority is not entirely clear, a Stripped Bond
Certificate should be treated as an interest in mortgage loans issued on the day
the certificate is purchased for purposes of calculating any OID. Generally, if
the discount on a mortgage loan is larger than a de minimis amount (as
calculated for

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purposes of the OID rules) a purchaser of the certificate will be required to
accrue the discount under the OID rules of the Code. See "-- Non-REMIC
Certificates" and "-- Single Class of Certificates -- Original Issue Discount."
However, a purchaser of a Stripped Bond Certificate will be required to account
for any discount on the mortgage loans as market discount rather than OID if
either the amount of OID with respect to the mortgage loan is treated as zero
under the OID de minimis rule when the certificate was stripped or no more than
100 basis points (including any amount of servicing fees in excess of reasonable
servicing fees) is stripped off of the trust fund's mortgage loans.

    The precise tax treatment of Stripped Coupon Certificates is substantially
uncertain. The Code could be read literally to require that OID computations be
made for each payment from each mortgage loan. However, based on the recent IRS
guidance, it appears that all payments from a mortgage loan underlying a
Stripped Coupon Certificate should be treated as a single installment obligation
subject to the OID rules of the Code, in which case, all payments from the
mortgage loan would be included in the mortgage loan's stated redemption price
at maturity for purposes of calculating income on the Stripped Coupon
Certificate under the OID rules of the Code.

    Based on current authority it is unclear under what circumstances, if any,
the prepayment of mortgage loans will give rise to a loss to the holder of a
Stripped Bond Certificate purchased at a premium or a Stripped Coupon
Certificate. If the certificate is treated as a single instrument (rather than
an interest in discrete mortgage loans) and the effect of prepayments is taken
into account in computing yield with respect to the certificate, it appears that
no loss will be available as a result of any particular prepayment unless
prepayments occur at a rate faster than the assumed prepayment rate. However, if
a certificate is treated as an interest in discrete mortgage loans, or if no
prepayment assumption is used, then when a mortgage loan is prepaid, any
certificate so treated should be able to recognize a loss equal to the portion
of the unrecovered premium of the certificate that is allocable to the mortgage
loan. In addition, amounts received in redemption for debt instruments issued by
natural persons purchased or issued after June 8, 1997 are treated as received
in exchange therefore (i.e., treated the same as obligations issued by
corporations). This change could affect the character of any loss.

    Holders of Stripped Bond Certificates and Stripped Coupon Certificates are
encouraged to consult with their own tax advisors regarding the proper treatment
of these certificates for federal income tax purposes.

    2. Certificates Representing Interests in Loans Other Than ARM Loans

    The original issue discount rules of Code Sections 1271 through 1275 will be
applicable to mortgages of corporations originated after May 27, 1969, mortgages
of noncorporate mortgagors (other than individuals) originated after July 1,
1982, and mortgages of individuals originated after March 2, 1984. Under the OID
Regulations, original issue discount could arise by the charging of points by
the originator of the mortgage in an amount greater than the statutory de
minimis exception, including a payment of points that is currently deductible by
the borrower under applicable Code provisions, or under certain circumstances,
by the presence of "teaser" rates (i.e., the initial rates on the mortgage loans
are lower than subsequent rates on the mortgage loans) on the mortgage loans.

    OID on each certificate must be included in the owner's ordinary income for
federal income tax purposes as it accrues, in accordance with a constant
interest method that takes into account the compounding of interest, in advance
of receipt of the cash attributable to the income. The amount of OID required to
be included in an owner's income in any taxable year with respect to a
certificate representing an interest in mortgage loans other than mortgage loans
with interest rates that adjust periodically ("ARM Loans") likely will be
computed as described under "-- Accrual of Original Issue Discount." The
following discussion is based in part on Treasury regulations issued on January
27, 1994, and amended on June 11, 1996, under Code Sections 1271 through 1273
and 1275 (the "OID Regulations") and in part on the provisions of the Tax Reform
Act of 1986 (the "1986 Act"). The OID Regulations generally are effective for
debt instruments issued on or after April 4, 1994, but may be relied upon as
authority with respect to debt instruments issued after December 21, 1992.
Alternatively, proposed Treasury regulations issued December 21, 1992 may be
treated as authority for debt instruments issued after December 21, 1992 and
before April 4, 1994, and proposed Treasury regulations issued in 1986 and 1991
may be treated as authority for instruments issued before December 21, 1992. In
applying these dates, the issued

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date of the mortgage loans should be used, or, in the case of Stripped Bond
Certificates or Stripped Coupon Certificates, the date the certificates are
acquired. The holder of a certificate should be aware, however, that neither the
proposed OID Regulations nor the OID Regulations adequately address certain
issues relevant to prepayable securities.

    Under the Code, the mortgage loans underlying the certificates will be
treated as having been issued on the date they were originated with an amount of
OID equal to the excess of the mortgage loan's stated redemption price at
maturity over its issue price. The issue price of a mortgage loan is generally
the amount lent to the mortgagee, which may be adjusted to take into account
certain loan origination fees. The stated redemption price at maturity of a
mortgage loan is the sum of all payments to be made on the mortgage loan other
than payments that are treated as qualified stated interest payments. The
accrual of this OID, as described under "-- Accrual of Original Issue
Discount," will, unless otherwise specified in the related prospectus
supplement, utilize the original yield to maturity of the certificates
calculated based on a reasonable assumed prepayment rate for the mortgage loans
underlying the certificates (the "Prepayment Assumption"), and will take into
account events that occur during the calculation period. The Prepayment
Assumption will be determined in the manner prescribed by regulations that have
not yet been issued. The legislative history of the 1986 Act (the "Legislative
History") provides, however, that the regulations will require that the
Prepayment Assumption be the prepayment assumption that is used in determining
the offering price of the certificate. No representation is made that any
certificate will prepay at the Prepayment Assumption or at any other rate. The
prepayment assumption contained in the Code literally only applies to debt
instruments collateralized by other debt instruments that are subject to
prepayment rather than direct ownership interests in debt instruments, and, in
tax years beginning after August 5, 1997, to pools of receivables the yield on
which may be affected by prepayments of receivables such as those the
certificates represent. However, no other legal authority provides guidance with
regard to the proper method for accruing OID on obligations that are subject to
prepayment, and, until further guidance is issued, the master servicer intends
to calculate and report OID under the method described in "-- Accrual of
Original Issue Discount."

    Accrual of Original Issue Discount. Generally, the owner of a certificate
must include in gross income the sum of the "daily portions," as defined below,
of the OID on any certificate for each day on which it owns the certificate,
including the date of purchase but excluding the date of disposition. In the
case of an original owner, the daily portions of OID with respect to each
component generally will be determined as set forth under the OID Regulations. A
calculation will be made by the master servicer or other entity specified in the
related prospectus supplement of the portion of OID that accrues during each
successive monthly accrual period (or shorter period from the date of original
issue) that ends on the day in the calendar year corresponding to each of the
distribution dates on the certificates (or the day before each date). This will
be done, in the case of each full month accrual period, by adding the present
value at the end of the accrual period (determined by using as a discount factor
the original yield to maturity of the respective component under the Prepayment
Assumption) of all remaining payments to be received under the Prepayment
Assumption on the respective component and any payments received during the same
accrual period, and subtracting from that total the "adjusted issue price" of
the respective component at the beginning of the same accrual period. The
adjusted issue price of a certificate at the beginning of the first accrual
period is its issue price; the adjusted issue price of a certificate at the
beginning of a subsequent accrual period is the adjusted issue price at the
beginning of the immediately preceding accrual period plus the amount of OID
allocable to that accrual period reduced by the amount of any payment made at
the end of or during that accrual period. The OID accruing during the accrual
period will then be divided by the number of days in the period to determine the
daily portion of OID for each day in the period. With respect to an initial
accrual period shorter than a full monthly accrual period, the daily portions of
OID must be determined according to an appropriate allocation under any
reasonable method.

    Original issue discount generally must be reported as ordinary gross income
as it accrues under a constant interest method that takes into account the
compounding of interest as it accrues rather than when received. However, the
amount of original issue discount includible in the income of a holder of an
obligation is reduced when the obligation is acquired after its initial issuance
at a price greater than the sum of the original issue price and the previously
accrued original issue discount, less prior payments of principal. Accordingly,
if mortgage loans acquired by a certificateholder are purchased at a price equal
to the then unpaid principal amount of those mortgage loans, no original issue
discount attributable to the

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difference between the issue price and the original principal amount of those
mortgage loans (e.g., due to points) will be includible by the holder. Other
original issue discount on the mortgage loans (e.g., that arising from a
"teaser" rate) would still need to be accrued.

    3. Certificates Representing Interests in ARM Loans

    The OID Regulations do not address the treatment of instruments, such as the
certificates, which represent interests in ARM Loans. Additionally, the IRS has
not issued guidance under the Code's coupon stripping rules with respect to
instruments that represent interests in ARM Loans. In the absence of any
authority, the master servicer will report OID on certificates attributable to
ARM Loans ("Stripped ARM Obligations") to holders in a manner it believes is
consistent with the rules described under the heading "-- Certificates
Representing Interests in Loans Other Than ARM Loans" and with the OID
Regulations. As such, for purposes of projecting the remaining payments and the
projected yield, the assumed rate payable on the ARM Loans will be the fixed
rate equivalent on the issue date. Application of these rules may require
inclusion of income on a Stripped ARM Obligation in advance of the receipt of
cash attributable to the income. Further, the addition of interest deferred due
to negative amortization ("Deferred Interest") to the principal balance of an
ARM Loan may require the inclusion of the interest deferred due to negative
amortization in the income of the certificateholder when it accrues.
Furthermore, the addition of Deferred Interest to the certificate's principal
balance will result in additional income (including possibly OID income) to the
certificateholder over the remaining life of the certificates.

    Because the treatment of Stripped ARM Obligations is uncertain, investors
are encouraged to consult their tax advisors regarding how income will be
includible with respect to the certificates.

  C. SALE OR EXCHANGE OF A CERTIFICATE

    Sale or exchange of a certificate before its maturity will result in gain or
loss equal to the difference, if any, between the amount received and the
owner's adjusted basis in the certificate. The adjusted basis of a certificate
generally will equal the seller's purchase price for the certificate, increased
by the OID included in the seller's gross income with respect to the
certificate, and reduced by principal payments on the certificate previously
received by the seller. The gain or loss will be capital gain or loss to an
owner for which a certificate is a "capital asset" within the meaning of Code
Section 1221, and will be long-term or short-term depending on whether the
certificate has been owned for the long-term capital gain holding period
(currently more than one year).

    The certificates will be "evidences of indebtedness" within the meaning of
Code Section 582(c)(1), so that gain or loss recognized from the sale of a
certificate by a bank or a thrift institution to which that section applies will
be ordinary income or loss.

  D. NON-U.S. PERSONS

    Generally, to the extent that a certificate evidences ownership in
underlying mortgage loans that were issued on or before July 18, 1984, interest
or OID paid by the person required to withhold tax under Code Section 1441 or
1442 to an owner that is not a U.S. Person or a certificateholder holding on
behalf of an owner that is not a U.S. Person will be subject to federal income
tax, collected by withholding, at a rate of 30% or any lower rate provided for
interest by an applicable tax treaty. Accrued OID recognized by the owner on the
sale or exchange of a certificate also will be subject to federal income tax at
the same rate. Generally, accrued OID payments would not be subject to
withholding to the extent that a certificate evidences ownership in mortgage
loans issued after July 18, 1984, by natural persons if the certificateholder
complies with certain identification requirements (including delivery of a
statement, signed by the certificateholder under penalties of perjury,
certifying that the certificateholder is not a U.S. Person and providing the
name and address of the certificateholder). Additional restrictions apply to
mortgage loans where the mortgagor is not a natural person in order to qualify
for the exemption from withholding. Any foreclosure property owned by the trust
could be treated as a U.S. real property interest owned by certificateholders.

    As used in this prospectus, a "U.S. Person" means

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     o    a citizen or resident of the United States,

     o    a corporation or a partnership (including an entity treated as a
          corporation or partnership for U.S. federal income tax purposes)
          organized in or created under the laws of the United States or any
          State thereof or the District of Columbia (unless in the case of a
          partnership Treasury Regulations provide otherwise),

     o    an estate, the income of which from sources outside the United States
          is includible in gross income for federal income tax purposes
          regardless of its connection with the conduct of a trade or business
          within the United States, or

     o    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.

In addition, U.S. Persons would include certain trusts that can elect to be
treated as U.S. Persons. A "Non-U.S. Person" is a person other than a U.S.
Person.

     Interest paid (or accrued) on the mortgage loans to a certificateholder who
is a non-U.S. Person will be considered "portfolio interest," and generally will
not be subject to United States federal income tax and withholding tax,
provided, that the interest is not effectively connected with the conduct of a
trade or business within the United States by the non-U.S. Person, and the
non-U.S. Person provides the trust or other person who is otherwise required to
withhold U.S. tax with respect to the mortgage loans with an appropriate
statement (on Form W-8 or other similar form), signed under penalties of
perjury, certifying that the beneficial owner of the mortgage loan is a foreign
person and providing that non-U.S. person's name and address. If an interest in
a mortgage loan is held through a securities clearing organization or certain
other financial institutions, the organization or institution may provide the
relevant signed statement to the withholding agent. In that case, however, the
signed statement must be accompanied by a Form W-8 or substitute form provided
by the non-U.S. Person that owns that interest in the mortgage loan. If interest
does not constitute portfolio interest, then it will be subject to U.S. federal
income and withholding tax at a rate of 30%, unless reduced or eliminated
pursuant to an applicable tax treaty and the non-U.S. Person provides the trust,
or an organization or financial institution described above, with an appropriate
statement (e.g., a Form 1001), signed under penalties of perjury, to that
effect.

     Final regulations dealing with backup withholding and information reporting
on income paid to foreign person and related matters (the "New Withholding
Regulations") were published in the Federal Register on October 14, 1997. In
general, the New Withholding Regulations do not significantly alter the
substantive withholding and information reporting requirements, but do unify
current certification procedures and forms and clarify reliance standards. The
New Withholding Regulations generally will be effective for payments made after
December 31, 1999, subject to certain transition rules. The discussion set forth
above does not take the New Withholding Regulations into account. Prospective
Non-U.S. Persons who own interests in mortgage loans are strongly urged to
consult their own tax advisor with respect to the New Withholding Regulations.

  E. INFORMATION REPORTING AND BACKUP WITHHOLDING

     The master servicer will furnish or make available, within a reasonable
time after the end of each calendar year, to each person who was a
certificateholder at any time during the year, the information deemed
appropriate to assist certificateholders in preparing their federal income tax
returns, or to enable holders to make any information available to beneficial
owners or financial intermediaries that hold certificates as nominees on behalf
of beneficial owners. If a holder, beneficial owner, financial intermediary or
other recipient of a payment on behalf of a beneficial owner fails to supply a
certified taxpayer identification number or if the Secretary of the Treasury
determines that the person has not reported all interest and dividend income
required to be shown on its federal income tax return, 31% backup withholding
may be required with respect to any payments. Any amounts deducted and withheld
from a distribution to a recipient would be allowed as a credit against a
recipient's federal income tax liability.

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REMIC CERTIFICATES

    The trust fund relating to a series of certificates may elect to be treated
as a REMIC. Qualification as a REMIC requires ongoing compliance with certain
conditions. Although a REMIC is not generally subject to federal income tax
(see, however "-- Residual Certificates" and "-- Prohibited Transactions"), if
a trust fund with respect to which a REMIC election is made fails to comply with
one or more of the ongoing requirements of the Code for REMIC status during any
taxable year, including the implementation of restrictions on the purchase and
transfer of the residual interests in a REMIC as described under "Residual
Certificates," the Code provides that a trust fund will not be treated as a
REMIC for that year and thereafter. In that event, the entity may be taxable as
a separate corporation, and the related certificates (the "REMIC Certificates")
may not be accorded the status or given the tax treatment described below. While
the Code authorizes the Treasury Department to issue regulations providing
relief upon an inadvertent termination of the status of a trust fund as a REMIC,
no such regulations have been issued. Any relief, moreover, may be accompanied
by sanctions, such as the imposition of a corporate tax on all or a portion of
the REMIC's income for the period in which the requirements for REMIC status are
not satisfied. Assuming compliance with all provisions of the related pooling
and servicing agreement, each trust fund that elects REMIC status will qualify
as a REMIC, and the related certificates will be considered to be regular
interests ("Regular Certificates") or residual interests ("Residual
Certificates") in the REMIC. The related prospectus supplement for each series
of certificates will indicate whether the trust fund will make a REMIC election
and whether a class of certificates will be treated as a regular or residual
interest in the REMIC. With respect to each trust fund for which a REMIC
election is to be made, Brown & Wood LLP will issue an opinion confirming the
conclusions expressed above concerning the status of the trust fund as a REMIC
and the status of the certificates as representing regular or residual interests
in a REMIC.

    In general, with respect to each series of certificates for which a REMIC
election is made, certificates held by a thrift institution taxed as a "domestic
building and loan association" will constitute assets described in Code Section
7701(a)(19)(C); certificates held by a real estate investment trust will
constitute "real estate assets" within the meaning of Code Section 856(c)(4)(A);
and interest on certificates held by a real estate investment trust will be
considered "interest on obligations secured by mortgages on real property"
within the meaning of Code Section 856(c)(3)(B). If less than 95% of the REMIC's
assets are assets qualifying under any of these Code sections, the certificates
will be qualifying assets only to the extent that the REMIC's assets are
qualifying assets. In addition, payments on mortgage loans held pending
distribution on the REMIC Certificates will be considered to be real estate
assets for purposes of Code Section 856(c).

    In some instances the mortgage loans may not be treated entirely as assets
described in the foregoing sections. See, in this regard, the discussion of
buydown loans contained in "-- Non-REMIC Certificates -- Single Class of
Certificates." REMIC Certificates held by a real estate investment trust will
not constitute "Government Securities" within the meaning of Code Section
856(c)(4)(A), and REMIC Certificates held by a regulated investment company will
not constitute "Government Securities" within the meaning of Code Section
851(b)(4)(A)(ii). REMIC Certificates held by certain financial institutions will
constitute "evidences of indebtedness" within the meaning of Code Section
582(c)(1).

    A "qualified mortgage" for REMIC purposes is any obligation (including
certificates of participation in an obligation) that is principally secured by
an interest in real property and that is transferred to the REMIC within a
prescribed time period in exchange for regular or residual interests in the
REMIC. The REMIC Regulations provide that manufactured housing or mobile homes
(not including recreational vehicles, campers or similar vehicles) that are
"single family residences" under Code Section 25(e)(10) will qualify as real
property without regard to state law classifications. Under Code Section
25(e)(10), a single family residence includes any manufactured home that has a
minimum of 400 square feet of living space and a minimum width in excess of 102
inches and that is of a kind customarily used at a fixed location.

    Tiered REMIC Structures. For certain series of certificates, two or more
separate elections may be made to treat designated portions of the related trust
fund as REMICs (respectively, the "Subsidiary REMIC or REMICs" and the "Master
REMIC") for federal income tax purposes. Upon the issuance of such a series of
certificates, assuming compliance with all provisions of the related pooling and
servicing

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agreement, the Master REMIC as well as each Subsidiary REMIC will each qualify
as a REMIC, and the REMIC Certificates issued by the Master REMIC and each
Subsidiary REMIC, respectively, will be considered to evidence ownership of
Regular Certificates or Residual Certificates in the related REMIC within the
meaning of the REMIC provisions. With respect to each trust fund for which more
than one REMIC election is to be made, Brown & Wood LLP will issue an opinion
confirming the conclusions expressed above concerning the status of the Master
REMIC and each Subsidiary REMIC as a REMIC and the status of the certificates as
regular or residual interests in a REMIC.

    Only REMIC Certificates, other than the residual interest in any Subsidiary
REMIC, issued by the Master REMIC will be offered under this prospectus. All
Subsidiary REMICs and the Master REMIC will be treated as one REMIC 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 Code; "loans secured
by an interest in real property" under Section 7701(a)(19)(C) of the Code; and
whether the income on the certificates is interest described in Section
856(c)(3)(B) of the Code.

  A. REGULAR CERTIFICATES

    General. Except as otherwise stated in this discussion, 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 Regular Certificates that otherwise report income under a cash method
of accounting will be required to report income with respect to Regular
Certificates under an accrual method.

    Original Issue Discount and Premium. The Regular Certificates may be issued
with OID. Generally, OID, if any, will equal the difference between the "stated
redemption price at maturity" of a Regular Certificate and its "issue price."
Holders of any class of certificates issued with OID will be required to include
OID in gross income for federal income tax purposes as it accrues, in accordance
with a constant interest method based on the compounding of interest as it
accrues rather than in accordance with receipt of the interest payments. The
following discussion is based in part on the OID Regulations and in part on the
provisions of the 1986 Act. The OID Regulations generally are effective for debt
instruments issued on or after April 4, 1994. Holders of Regular Certificates
(the "Regular Certificateholders") should be aware, however, that the OID
Regulations do not adequately address certain issues relevant to prepayable
securities, such as the Regular Certificates.

    Rules governing OID are set forth in Code Sections 1271 through 1273 and
1275. These rules require that the amount and rate of accrual of OID be
calculated based on the Prepayment Assumption and the anticipated reinvestment
rate, if any, relating to the Regular Certificates and prescribe a method for
adjusting the amount and rate of accrual of the discount where the actual
prepayment rate differs from the Prepayment Assumption. Under the Code, the
Prepayment Assumption must be determined in the manner prescribed by
regulations, which regulations have not yet been issued. The Legislative History
provides, however, that Congress intended the regulations to require that the
Prepayment Assumption be the prepayment assumption that is used in determining
the initial offering price of the Regular Certificates. The prospectus
supplement for each series of Regular Certificates will specify the Prepayment
Assumption to be used for the purpose of determining the amount and rate of
accrual of OID. No representation is made that the Regular Certificates will
prepay at the Prepayment Assumption or at any other rate.

    The IRS issued final regulations (the "Contingent Regulations") in June 1996
governing the calculation of OID on instruments having contingent interest
payments. The Contingent Regulations specifically do not apply for purposes of
calculating OID on debt instruments subject to Code Section 1272(a)(6), such as
the Regular Certificates. Additionally, the OID Regulations do not contain
provisions specifically interpreting Code Section 1272(a)(6). The trustee
intends to base its computations on Code Section 1272(a)(6) and the OID
Regulations as described in this prospectus. However, because no regulatory
guidance currently exists under Code Section 1272(a)(6), there can be no
assurance that this methodology represents the correct manner of calculating
OID.

    In general, each Regular Certificate will be treated as a single installment
obligation issued with an amount of OID equal to the excess of its "stated
redemption price at maturity" over its issue price. The issue price of a Regular
Certificate is the first price at which a substantial amount of Regular
Certificates

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of that class are first sold to the public (excluding bond houses, brokers,
underwriters or wholesalers). The issue price of a Regular Certificate also
includes the amount paid by an initial certificateholder for accrued interest
that relates to a period before the issue date of the Regular Certificate. The
stated redemption price at maturity of a Regular Certificate includes the
original principal amount of the Regular Certificate, but generally will not
include distributions of interest that constitute "qualified stated interest."
Qualified stated interest generally means interest unconditionally payable at
intervals of one year or less at a single fixed rate or qualified variable rate
(as described below) during the entire term of the Regular Certificate. Interest
is payable at a single fixed rate only if the rate appropriately takes into
account the length of the interval between payments. Distributions of interest
on Regular Certificates with respect to which Deferred Interest will accrue will
not constitute qualified stated interest payments, and the stated redemption
price at maturity of the Regular Certificates includes all distributions of
interest as well as principal thereon.

    Where the interval between the issue date and the first distribution date on
a Regular Certificate is longer than the interval between subsequent
distribution dates, the greater of any original issue discount disregarding the
rate in the first period and any interest foregone during the first period is
treated as the amount by which the stated redemption price of the certificate
exceeds its issue price for purposes of the de minimis rule described below. The
OID Regulations suggest that all or a portion of the interest on a long first
period Regular Certificate that is issued with non-de minimis OID will be
treated as OID. Where the interval between the issue date and the first
distribution date on a Regular Certificate is shorter than the interval between
subsequent distribution dates, interest due on the first distribution date in
excess of the amount that accrued during the first period would be added to the
certificates stated redemption price at maturity. Regular Certificateholders
should consult their own tax advisors to determine the issue price and stated
redemption price at maturity of a Regular Certificate. Additionally, it is
possible that the IRS could assert that the stated pass-through rate of interest
on the Regular Certificates is not unconditionally payable because late payments
or nonpayments on the mortgage loans are not penalized nor are there reasonable
remedies in place to compel payment on the mortgage loans. That position, if
successful, would require all holders of Regular Certificates to accrue income
on the certificates under the OID Regulations.

    Under the de minimis rule, OID on a Regular Certificate will be considered
to be zero if it is less than 0.25% of the stated redemption price at maturity
of the Regular Certificate multiplied by the weighted average maturity of the
Regular Certificate. For this purpose, the weighted average maturity of the
Regular Certificate is computed as the sum of the amounts determined by
multiplying the number of full years (i.e., rounding down partial years) from
the issue date until each distribution in reduction of stated redemption price
at maturity is scheduled to be made by a fraction, the numerator of which is the
amount of each distribution included in the stated redemption price at maturity
of the Regular Certificate and the denominator of which is the stated redemption
price at maturity of the Regular Certificate. Although currently unclear, it
appears that the schedule of these distributions should be determined in
accordance with the Prepayment Assumption. The Prepayment Assumption with
respect to a series of Regular Certificates will be set forth in the related
prospectus supplement. Holders generally must report de minimis OID pro rata as
principal payments are received, and income will be capital gain if the Regular
Certificate is held as a capital asset. However, accrual method holders may
elect to accrue all de minimis OID as well as market discount under a constant
interest method.

    The prospectus supplement with respect to a trust fund may provide for
certain Regular Certificates to be issued at prices significantly exceeding
their principal amounts or based on notional principal balances (the
"Super-Premium Certificates"). The income tax treatment of Super-Premium
Certificates is not entirely certain. For information reporting purposes, the
trust fund intends to take the position that the stated redemption price at
maturity of Super-Premium Certificates is the sum of all payments to be made on
these Regular Certificates determined under the Prepayment Assumption, with the
result that these Regular Certificates would be issued with OID. The calculation
of income in this manner could result in negative original issue discount (which
delays future accruals of OID rather than being immediately deductible) when
prepayments on the mortgage loans exceed those estimated under the Prepayment
Assumption. As discussed above, the Contingent Regulations specifically do not
apply to prepayable debt instruments subject to Code Section 1272(a)(6), such as
the Regular Certificates. However, if the Super-Premium Certificates were
treated as contingent payment obligations, it is unclear how holders of those
certificates would report income or recover their basis. In the alternative, the
IRS could assert that the

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stated redemption price at maturity of Super-Premium Certificates should be
limited to their principal amount (subject to the discussion under "-- Accrued
Interest Certificates"), so that the Regular Certificates would be considered
for federal income tax purposes to be issued at a premium. If this position were
to prevail, the rules described under "-- Regular Certificates -- Premium"
would apply. It is unclear when a loss may be claimed for any unrecovered basis
for a Super-Premium Certificate. It is possible that a holder of a Super-Premium
Certificate may only claim a loss when its remaining basis exceeds the maximum
amount of future payments, assuming no further prepayments or when the final
payment is received with respect to the Super-Premium Certificate. Absent
further guidance, the trustee intends to treat the Super-Premium Certificates as
described in this prospectus.

     Under the REMIC Regulations, if the issue price of a Regular Certificate
(other than those based on a notional amount) does not exceed 125% of its actual
principal amount, the interest rate is not considered disproportionately high.
Accordingly, the Regular Certificate generally should not be treated as a
Super-Premium Certificate and the rules described under "-- Regular
Certificates -- Premium" should apply. However, it is possible that certificates
issued at a premium, even if the premium is less than 25% of the certificate's
actual principal balance, will be required to amortize the premium under an
original issue discount method or contingent interest method even though no
election under Code section 171 is made to amortize the premium.

     Generally, a Regular Certificateholder must include in gross income the
"daily portions," as determined below, of the OID that accrues on a Regular
Certificate for each day a certificateholder holds the Regular Certificate,
including the purchase date but excluding the disposition date. The daily
portions of OID are determined by allocating to each day in an accrual period
the ratable portion of OID allocable to the accrual period. Accrual periods may
be of any length and may vary in length over the term of the Regular
Certificates, provided that each accrual period is not longer than one year,
begins or ends on a distribution date (except for the first accrual period which
begins on the issue date) and begins on the day after the preceding accrual
period ends. This will be done, in the case of each full accrual period, by

     o    adding

          o    The present value at the end of the accrual period (determined by
               using as a discount factor the original yield to maturity of the
               Regular Certificates as calculated under the Prepayment
               Assumption) of all remaining payments to be received on the
               Regular Certificates under the Prepayment Assumption and

          o    any payments included in the stated redemption price at maturity
               received during the same accrual period, and

     o    subtracting from that total the adjusted issue price of the Regular
          Certificates at the beginning of the same accrual period.

The adjusted issue price of a Regular Certificate at the beginning of the first
accrual period is its issue price; the adjusted issue price of a Regular
Certificate at the beginning of a subsequent accrual period is the adjusted
issue price at the beginning of the immediately preceding accrual period plus
the amount of OID allocable to that accrual period and reduced by the amount of
any payment other than a payment of qualified stated interest made at the end of
or during that accrual period. The OID accrued during an accrual period will
then be divided by the number of days in the period to determine the daily
portion of OID for each day in the accrual period. The calculation of OID under
the method described above will cause the accrual of OID to either increase or
decrease (but never below zero) in a given accrual period to reflect the fact
that prepayments are occurring faster or slower than under the Prepayment
Assumption. With respect to an initial accrual period shorter than a full
accrual period, the daily portions of OID may be determined according to an
appropriate allocation under any reasonable method.

     A subsequent purchaser of a Regular Certificate issued with OID who
purchases the Regular Certificate at a cost less than the remaining stated
redemption price at maturity will also be required to include in gross income
the sum of the daily portions of OID on that Regular Certificate. In computing
the daily portions of OID for a subsequent purchaser of a Regular Certificate
(as well as an initial purchaser that purchases at a price higher than the
adjusted issue price but less than the stated redemption price at maturity),
however, the daily portion is reduced by the amount that would be the daily
portion for the day (computed in accordance with the rules set forth above)
multiplied by a fraction, the numerator of

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which is the amount, if any, by which the price paid by the holder for that
Regular Certificate exceeds the following amount:

     o    the sum of the issue price plus the aggregate amount of OID that would
          have been includible in the gross income of an original Regular
          Certificateholder (who purchased the Regular Certificate at its issue
          price), less

     o    any prior payments included in the stated redemption price at
          maturity, and the denominator of which is the sum of the daily
          portions for that Regular Certificate for all days beginning on the
          date after the purchase date and ending on the maturity date computed
          under the Prepayment Assumption.

A holder who pays an acquisition premium instead may elect to accrue OID by
treating the purchase as a purchase at original issue.

    Variable Rate Regular Certificates. Regular Certificates may provide for
interest based on a variable rate. Interest is treated as payable at a variable
rate and not as contingent interest if, generally, the issue price does not
exceed the original principal balance by more than a specified amount and the
interest compounds or is payable at least annually at current values of certain
objective rates matured by or based on lending rates for newly borrowed funds.
For a debt instrument issued after August 13, 1996, an objective rate is a rate
(other than a qualified floating rate) that is determined using a single fixed
formula and that is based on objective financial or economic information. The
variable interest generally will be qualified stated interest to the extent it
is unconditionally payable at least annually and, to the extent successive
variable rates are used, interest is not significantly accelerated or deferred.

    The amount of OID with respect to a Regular Certificate bearing a variable
rate of interest will accrue in the manner described under "-- Original Issue
Discount and Premium" by assuming generally that the index used for the variable
rate will remain fixed throughout the term of the certificate. Appropriate
adjustments are made for the actual variable rate.

    Although unclear at present, the depositor intends to treat Regular
Certificates bearing an interest rate that is a weighted average of the net
interest rates on mortgage loans as variable rate certificates. In such case,
the weighted average rate used to compute the initial pass-through rate on the
Regular Certificates will be deemed to be the index in effect through the life
of the Regular Certificates. It is possible, however, that the IRS may treat
some or all of the interest on Regular Certificates with a weighted average rate
as taxable under the rules relating to obligations providing for contingent
payments. This treatment may effect the timing of income accruals on the Regular
Certificates. Additionally, if some or all of the mortgage loans are subject to
"teaser rates" (i.e., the initial rates on the mortgage loans are less than
subsequent rates on the mortgage loans) the interest paid on some or all of the
Regular Certificates may be subject to accrual using a constant yield method
notwithstanding the fact that these certificates may not have been issued with
"true" non-de minimis original issue discount.

    Election to Treat All Interest as OID. The OID Regulations permit a
certificateholder to elect to accrue all interest, discount (including de
minimus market or original issue discount) and premium in income as interest,
based on a constant yield method for certificates acquired on or after April 4,
1994. If such an election were to be made with respect to a Regular Certificate
with market discount, a certificateholder would be deemed to have made an
election to include in income currently market discount with respect to all
other debt instruments having market discount that the certificateholder
acquires during the year of the election or thereafter. Similarly, a
certificateholder that makes this election for a certificate that is acquired at
a premium will be deemed to have made an election to amortize bond premium with
respect to all debt instruments having amortizable bond premium that the
certificateholder owns or acquires. See "-- Regular Certificates -- Premium."
The election to accrue interest, discount and premium on a constant yield method
with respect to a certificate cannot be revoked without the consent of the IRS.

    Market Discount. A purchaser of a Regular Certificate may also be subject to
the market discount provisions of Code Sections 1276 through 1278. Under these
provisions and the OID Regulations, "market discount" equals the excess, if any,
of a Regular Certificate's stated principal amount or, in the case of a Regular
Certificate with OID, the adjusted issue price (determined for this purpose as
if the purchaser had purchased the Regular Certificate from an original holder)
over the price for the Regular Certificate paid

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by the purchaser. A certificateholder that purchases a Regular Certificate at a
market discount will recognize income upon receipt of each distribution
representing stated redemption price. In particular, under Section 1276 of the
Code a holder generally will be required to allocate each principal distribution
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, the election
will apply to all market discount bonds acquired by the electing
certificateholder on or after the first day of the first taxable year to which
the election applies.

    Market discount with respect to a Regular Certificate will be considered to
be zero if the amount allocable to the Regular Certificate is less than 0.25% of
the Regular Certificate's stated redemption price at maturity multiplied by the
Regular Certificate's weighted average maturity remaining after the date of
purchase. If market discount on a Regular Certificate is considered to be zero
under this rule, the actual amount of market discount must be allocated to the
remaining principal payments on the Regular Certificate, and gain equal to the
allocated amount will be recognized when the corresponding principal payment is
made. Treasury regulations implementing the market discount rules have not yet
been issued; therefore, investors should consult their own tax advisors
regarding the application of these rules and the advisability of making any of
the elections allowed under Code Sections 1276 through 1278.

    The Code provides that any principal payment (whether a scheduled payment or
a prepayment) or any gain on disposition of a market discount bond acquired by
the taxpayer after October 22, 1986, shall be treated as ordinary income to the
extent that it does not exceed the accrued market discount at the time of the
payment. The amount of accrued market discount for purposes of determining the
tax treatment of subsequent principal payments or dispositions of the market
discount bond is to be reduced by the amount so treated as ordinary income.

    The Code also grants authority to the Treasury Department to issue
regulations providing for the computation of accrued market discount on debt
instruments, the principal of which is payable in more than one installment.
Until regulations are issued by the Treasury, rules described in the Legislative
History will apply. Under those rules, the holder of a market discount bond may
elect to accrue market discount either on the basis of a constant interest rate
or according to one of the following methods. For Regular Certificates issued
with OID, the amount of market discount that accrues during a period is equal to
the product of the total remaining market discount and a fraction, the numerator
of which is the OID accruing during the period and the denominator of which is
the total remaining OID at the beginning of the period. For Regular Certificates
issued without OID, the amount of market discount that accrues during a period
is equal to the product of the total remaining market discount and a fraction,
the numerator of which is the amount of stated interest paid during the accrual
period and the denominator of which is the total amount of stated interest
remaining to be paid at the beginning of the period. For purposes of calculating
market discount under any of the above methods in the case of instruments (such
as the Regular Certificates) that provide for payments that may be accelerated
due to prepayments of other obligations securing the instruments, the same
Prepayment Assumption applicable to calculating the accrual of OID will apply.

    A holder of a Regular Certificate that acquires the Regular Certificate at a
market discount also may be required to defer, until the maturity date of the
Regular Certificate or its earlier disposition in a taxable transaction, the
deduction of a portion of the amount of interest that the holder paid or accrued
during the taxable year on indebtedness incurred or maintained to purchase or
carry the Regular Certificate in excess of the aggregate amount of interest
(including OID) includible in the holder's gross income for the taxable year
with respect to the Regular Certificate. The amount of the net interest expense
deferred in a taxable year may not exceed the amount of market discount accrued
on the Regular Certificate for the days during the taxable year on which the
holder held the Regular Certificate and, in general, would be deductible when
the market discount is includible in income. The amount of any remaining
deferred deduction is to be taken into account in the taxable year in which the
Regular Certificate matures or is disposed of in a taxable transaction. In the
case of a disposition in which gain or loss is not recognized in whole or in
part, any remaining deferred deduction will be allowed to the extent of gain
recognized on the disposition. This deferral rule does not apply if the Regular
Certificateholder elects to include the

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market discount in income currently as it accrues on all market discount
obligations acquired by the Regular Certificateholder in that taxable year or
thereafter.

    Premium. A purchaser of a Regular Certificate that purchases the Regular
Certificate at a cost (not including accrued qualified stated interest) greater
than its remaining stated redemption price at maturity will be considered to
have purchased the Regular Certificate at a premium and may elect to amortize
the premium under a constant yield method. It is not clear whether the
Prepayment Assumption would be taken into account in determining the life of the
Regular Certificate for this purpose. The Amortizable Bond Premium Regulations
described above specifically do not apply to prepayable debt instruments subject
to Code Section 1272(a)(6) such as the Regular Certificates. Absent further
guidance from the IRS, the trustee intends to account for amortizable bond
premium in the manner described in this prospectus. However, the Legislative
History states that the same rules that apply to accrual of market discount
(which rules require use of a Prepayment Assumption in accruing market discount
with respect to Regular Certificates without regard to whether the certificates
have OID) will also apply in amortizing bond premium under Code Section 171. The
Code provides that amortizable bond premium will be allocated among the interest
payments on the Regular Certificates and will be applied as an offset against
the interest payment. Prospective purchasers of the Regular Certificates should
consult their tax advisors regarding the possible application of the Amortizable
Bond Premium Regulations.

    On December 30, 1997 the IRS issued final Amortizable Bond Premium
Regulations. These regulations specifically do not apply to prepayable debt
instruments subject to Code Section 1272(a)(6). Absent further guidance from the
IRS, the trustee intends to account for amortizable bond premium in the manner
described above. Prospective purchasers of the certificates should consult their
tax advisors regarding the possible application of the Amortizable Bond Premium
Regulations.

    Deferred Interest. Certain classes of Regular Certificates will provide for
the accrual of Deferred Interest with respect to one or more ARM Loans. Any
Deferred Interest that accrues with respect to a class of Regular Certificates
will constitute income to the holders of the certificates before the time
distributions of cash with respect to the Deferred Interest are made. It is
unclear, under the OID Regulations, whether any of the interest on the
certificates will constitute qualified stated interest or whether all or a
portion of the interest payable on the certificates must be included in the
stated redemption price at maturity of the certificates and accounted for as OID
(which could accelerate the inclusion). Interest on Regular Certificates must in
any event be accounted for under an accrual method by the holders of the
certificates and, therefore, applying the latter analysis may result only in a
slight difference in the timing of the inclusion in income of interest on the
Regular Certificates.

    Effects of Defaults and Delinquencies. Certain series of certificates may
contain one or more classes of subordinated certificates, and in the event there
are defaults or delinquencies on the mortgage loans, amounts that would
otherwise be distributed on the subordinated certificates may instead be
distributed on the certificates. Subordinated certificateholders nevertheless
will be required to report income with respect to their certificates under an
accrual method without giving effect to delays and reductions in distributions
on the subordinated certificates attributable to defaults and delinquencies on
the mortgage loans, except to the extent that it can be established that the
amounts are uncollectible. As a result, the amount of income reported by a
subordinated certificateholder in any period could significantly exceed the
amount of cash distributed to the holder in that period. The holder will
eventually be allowed a loss (or will be allowed to report a lesser amount of
income) to the extent that the aggregate amount of distributions on the
subordinated certificate is reduced as a result of defaults and delinquencies on
the mortgage loans. However, the timing and characterization of any losses or
reductions in income are uncertain, and, accordingly, subordinated
certificateholders are urged to consult their own tax advisors on this point.

    Sale, Exchange or Redemption. If a Regular Certificate is sold, exchanged,
redeemed or retired, the seller will recognize gain or loss equal to the
difference between the amount realized on the sale, exchange, redemption, or
retirement and the seller's adjusted basis in the Regular Certificate. The
adjusted basis generally will equal the cost of the Regular Certificate to the
seller, increased by any OID and market discount included in the seller's gross
income with respect to the Regular Certificate, and reduced (but not below zero)
by payments included in the stated redemption price at maturity previously
received by the seller and by any amortized premium. Similarly, a holder who
receives a payment that is part of the stated redemption price at maturity of a
Regular Certificate will recognize gain equal to the excess, if

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any, of the amount of the payment over the holder's adjusted basis in the
Regular Certificate. A Regular Certificateholder who receives a final payment
that is less than the holder's adjusted basis in the Regular Certificate will
generally recognize a loss. Except as provided in the following paragraph and as
provided under "Market Discount," any gain or loss will be capital gain or loss,
provided that the Regular Certificate is held as a "capital asset" (generally,
property held for investment) within the meaning of Code Section 1221.

    Gain from the sale or other disposition of a Regular Certificate that might
otherwise be capital gain will be treated as ordinary income to the extent that
the gain does not exceed the excess, if any, of the amount that would have been
includible in the holder s income with respect to the Regular Certificate had
income accrued on it at a rate equal to 110% of the AFR as defined in Code
Section 1274(d) determined as of the date of purchase of the Regular
Certificate, over the amount actually includible in the holder's income.

    The Regular Certificates will be "evidences of indebtedness" within the
meaning of Code Section 582(c)(1), so that gain or loss recognized from the sale
of a Regular Certificate by a bank or a thrift institution to which this section
applies will be ordinary income or loss.

    The Regular Certificate information reports will include a statement of the
adjusted issue price of the Regular Certificate at the beginning of each accrual
period. In addition, the reports will include information necessary to compute
the accrual of any market discount that may arise upon secondary trading of
Regular Certificates. Because exact computation of the accrual of market
discount on a constant yield method would require information relating to the
holder's purchase price which the REMIC may not have, it appears that the
information reports will only require information pertaining to the appropriate
proportionate method of accruing market discount.

    Accrued Interest Certificates. Certain of the Regular Certificates ("Payment
Lag Certificates") may provide for payments of interest based on a period that
corresponds to the interval between distribution dates but that ends before each
distribution date. The period between the Closing Date for Payment Lag
Certificates and their first distribution date may or may not exceed that
interval. Purchasers of Payment Lag Certificates for which the period between
the Closing Date and the first distribution date does not exceed that interval
could pay upon purchase of the Regular Certificates accrued interest in excess
of the accrued interest that would be paid if the interest paid on the
distribution date were interest accrued from distribution date to distribution
date. If a portion of the initial purchase price of a Regular Certificate is
allocable to interest that has accrued before the issue date ("pre-issuance
accrued interest") and the Regular Certificate provides for a payment of stated
interest on the first payment date (and the first payment date is within one
year of the issue date) that equals or exceeds the amount of the pre-issuance
accrued interest, then the Regular Certificates issue price may be computed by
subtracting from the issue price the amount of pre-issuance accrued interest,
rather than as an amount payable on the Regular Certificate. However, it is
unclear under this method how the OID Regulations treat interest on Payment Lag
Certificates. Therefore, in the case of a Payment Lag Certificate, the trust
fund intends to include accrued interest in the issue price and report interest
payments made on the first distribution date as interest to the extent the
payments represent interest for the number of days that the certificateholder
has held the Payment Lag Certificate during the first accrual period.

    Investors are encouraged to consult their own tax advisors concerning the
treatment for federal income tax purposes of Payment Lag Certificates.

    Non-Interest Expenses of the REMIC. Under the temporary Treasury
regulations, if the REMIC is considered to be a "single-class REMIC," a portion
of the REMIC's servicing, administrative and other non-interest expenses will be
allocated as a separate item to those Regular Certificateholders that are
"pass-through interest holders." certificateholders that are pass-through
interest holders should consult their own tax advisors about the impact of these
rules on an investment in the Regular Certificates. See "Pass-Through of
Non-Interest Expenses of the REMIC under Residual Certificates."

    Treatment of Realized Losses. Although not entirely clear, it appears that
holders of Regular Certificates that are corporations should in general be
allowed to deduct as an ordinary loss any loss sustained during the taxable year
on account of the certificates becoming wholly or partially worthless, and that,
in general, holders of certificates that are not corporations should be allowed
to deduct as a

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short-term capital loss any loss sustained during the taxable year on account of
the certificates becoming wholly worthless. Although the matter is unclear,
non-corporate holders of certificates may be allowed a bad debt deduction at the
time that the principal balance of a certificate is reduced to reflect realized
losses resulting from any liquidated mortgage loans. The Internal Revenue
Service, however, could take the position that non-corporate holders will be
allowed a bad debt deduction to reflect realized losses only after all mortgage
loans remaining in the related trust fund have been liquidated or the
certificates of the related series have been otherwise retired. Potential
investors and Holders of the certificates are urged to consult their own tax
advisors regarding the appropriate timing, amount and character of any loss
sustained with respect to their certificates, including any loss resulting from
the failure to recover previously accrued interest or discount income.

    Non-U.S. Persons. Generally, payments of interest (including any payment
with respect to accrued OID) on the Regular Certificates to a Regular
Certificateholder who is not a U.S. Person and is not engaged in a trade or
business within the United States will not be subject to federal withholding tax
if the Regular Certificateholder complies with certain identification
requirements (including delivery of a statement, signed by the Regular
Certificateholder under penalties of perjury, certifying that the Regular
Certificateholder is a foreign person and providing the name and address of the
Regular Certificateholder). If a Regular Certificateholder is not exempt from
withholding, distributions of interest, including distributions in respect of
accrued OID, the holder may be subject to a 30% withholding tax, subject to
reduction under any applicable tax treaty.

    Further, it appears that a 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 are encouraged to consult their tax advisors concerning this
question.

    It is recommended that Regular Certificateholders who are not U.S. Persons
and persons related to them not acquire any Residual Certificates, and holders
of Residual Certificates (the "Residual Certificateholder") and persons related
to Residual Certificateholders not acquire any Regular Certificates without
consulting their tax advisors as to the possible adverse tax consequences of
doing so.

    As previously mentioned, the New Withholding Regulations were published in
the Federal Register on October 14, 1997 and generally will be effective for
payments made after December 31, 1999, subject to certain transition rules. The
discussion set forth above does not take the New Withholding Regulations into
account. Prospective Non-U.S. Persons who own Regular Certificates are urged to
consult their own tax advisor with respect to the New Withholding Regulations.

    Information Reporting and Backup Withholding. The master servicer will
furnish or make available, within a reasonable time after the end of each
calendar year, to each person who was a Regular Certificateholder at any time
during the year, any information deemed appropriate to assist Regular
Certificateholders in preparing their federal income tax returns, or to enable
holders to make the information available to beneficial owners or financial
intermediaries that hold the Regular Certificates on behalf of beneficial
owners. If a holder, beneficial owner, financial intermediary or other recipient
of a payment on behalf of a beneficial owner fails to supply a certified
taxpayer identification number or if the Secretary of the Treasury determines
that the person has not reported all interest and dividend income required to be
shown on its federal income tax return, 31% backup withholding may be required
with respect to any payments. Any amounts deducted and withheld from a
distribution to a recipient would be allowed as a credit against a recipient's
federal income tax liability. In addition, prospective investors are encouraged
to consult their tax advisors with respect to the New Withholding Regulations.

  B. RESIDUAL CERTIFICATES

    Allocation of the Income of the REMIC to the Residual Certificates. The
REMIC will not be subject to federal income tax except with respect to income
from prohibited transactions and certain other transactions. See "-- Prohibited
Transactions and Other Taxes." Instead, each original holder of a Residual
Certificate will report on its federal income tax return, as ordinary income,
its share of the taxable income of the REMIC for each day during the taxable
year on which it owns any Residual Certificates. The taxable income of the REMIC
for each day will be determined by allocating the taxable income of the REMIC
for each calendar quarter ratably to each day in the quarter. An original
holder's share of the

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taxable income of the REMIC for each day will be based on the portion of the
outstanding Residual Certificates that the holder owns on that day. The taxable
income of the REMIC will be determined under an accrual method and will be
taxable to the holders of Residual Certificates without regard to the timing or
amounts of cash distributions by the REMIC. Ordinary income derived from
Residual Certificates will be "portfolio income" for purposes of the taxation of
taxpayers subject to the limitations on the deductibility of "passive losses."
As residual interests, the Residual Certificates will be subject to tax rules,
described below, that differ from those that would apply if the Residual
Certificates were treated for federal income tax purposes as direct ownership
interests in the certificates or as debt instruments issued by the REMIC.

    A Residual Certificateholder may be required to include taxable income from
the Residual Certificate in excess of the cash distributed. For example, a
structure where principal distributions are made serially on regular interests
(that is, a fast-pay, slow-pay structure) may generate that sort of mismatching
of income and cash distributions (that is, "phantom income"). This mismatching
may be caused by the use of certain required tax accounting methods by the
REMIC, variations in the prepayment rate of the underlying mortgage loans and
certain other factors. Depending upon the structure of a particular transaction,
the aforementioned factors may significantly reduce the after-tax yield of a
Residual Certificate to a Residual Certificateholder. Investors should consult
their own tax advisors concerning the federal income tax treatment of a Residual
Certificate and the impact of the tax treatment on the after-tax yield of a
Residual Certificate.

    A subsequent Residual Certificateholder also will report on its federal
income tax return amounts representing a daily share of the taxable income of
the REMIC for each day that the Residual Certificateholder owns the Residual
Certificate. Those daily amounts generally would equal the amounts that would
have been reported for the same days by an original Residual Certificateholder,
as described above. The Legislative History indicates that certain adjustments
may be appropriate to reduce (or increase) the income of a subsequent holder of
a Residual Certificate that purchased the Residual Certificate at a price
greater than (or less than) the adjusted basis the Residual Certificate would
have in the hands of an original Residual Certificateholder. See "-- Sale or
Exchange of Residual Certificates." It is not clear, however, whether these
adjustments will in fact be permitted or required and, if so, how they would be
made. The REMIC Regulations do not provide for these adjustments.

    Taxable Income of the REMIC Attributable to Residual Interests. The taxable
income of the REMIC will reflect a netting of the income from the mortgage loans
and the REMIC's other assets and the deductions allowed to the REMIC for
interest and OID on the Regular Certificates and, except as described under "--
Regular Certificates -- Non-Interest Expenses of the REMIC," other expenses.
REMIC taxable income is generally determined in the same manner as the taxable
income of an individual using the accrual method of accounting, except that the
limitations on deductibility of investment interest expense and expenses for the
production of income do not apply, all bad loans will be deductible as business
bad debts, and the limitation on the deductibility of interest and expenses
related to tax-exempt income is more restrictive than with respect to
individual. The REMIC's gross income includes interest, original issue discount
income, and market discount income, if any, on the mortgage loans, as well as,
income earned from temporary investments on reverse assets, reduced by the
amortization of any premium on the mortgage loans. In addition, a Residual
Certificateholder will recognize additional income due to the allocation of
realized losses to the Regular Certificates due to defaults, delinquencies and
realized losses on the mortgage loans. The timing of the inclusion of the income
by Residual Certificateholders may differ from the time the actual loss is
allocated to the Regular Certificates. The REMIC's deductions include interest
and original issue discount expense on the Regular Certificates, servicing fees
on the mortgage loans, other administrative expenses of the REMIC and realized
losses on the mortgage loans. The requirement that Residual Certificateholders
report their pro rata share of taxable income or net loss of the REMIC will
continue until there are no certificates of any class of the related series
outstanding.

    For purposes of determining its taxable income, the REMIC will have an
initial aggregate tax basis in its assets equal to the sum of the issue prices
of the Regular Certificates and the Residual Certificates (or, if a class of
certificates is not sold initially, its fair market value). The aggregate basis
will be allocated among the mortgage loans and other assets of the REMIC in
proportion to their respective fair market value. A mortgage loan will be deemed
to have been acquired with discount or premium to the extent

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that the REMIC s basis therein is less than or greater than its principal
balance, respectively. Any discount (whether market discount or OID) will be
includible in the income of the REMIC as it accrues, in advance of receipt of
the cash attributable to this income, under a method similar to the method
described above for accruing OID on the Regular Certificates. The REMIC expects
to elect under Code Section 171 to amortize any premium on the mortgage loans.
Premium on any mortgage loan to which the election applies would be amortized
under a constant yield method. It is not clear whether the yield of a mortgage
loan would be calculated for this purpose based on scheduled payments or taking
account of the Prepayment Assumption. Additionally, the election would not apply
to the yield with respect to any underlying mortgage loan originated on or
before September 27, 1985. Instead, premium with respect to that mortgage loan
would be allocated among the principal payments thereon and would be deductible
by the REMIC as those payments become due.

    The REMIC will be allowed a deduction for interest and OID on the Regular
Certificates. The amount and method of accrual of OID will be calculated for
this purpose in the same manner as described above with respect to Regular
Certificates except that the 0.25% per annum de minimis rule and adjustments for
subsequent holders described therein will not apply.

    A Residual Certificateholder will not be permitted to amortize the cost of
the Residual Certificate as an offset to its share of the REMIC's taxable
income. However, that taxable income will not include cash received by the REMIC
that represents a recovery of the REMIC's basis in its assets, and, as described
above, the issue price of the Residual Certificates will be added to the issue
price of the Regular Certificates in determining the REMIC's initial basis in
its assets. See "-- Sale or Exchange of Residual Certificates." For a
discussion of possible adjustments to income of a subsequent holder of a
Residual Certificate to reflect any difference between the actual cost of the
Residual Certificate to the holder and the adjusted basis the Residual
Certificate would have in the hands of an original Residual Certificateholder,
see "-- Allocation of the Income of the REMIC to the Residual Certificates."

    Net Losses of the REMIC. The REMIC will have a net loss for any calendar
quarter in which its deductions exceed its gross income. The net loss would be
allocated among the Residual Certificateholders in the same manner as the
REMIC's taxable income. The net loss allocable to any Residual Certificate will
not be deductible by the holder to the extent that the net loss exceeds the
holder's adjusted basis in the Residual Certificate. Any net loss that is not
currently deductible due to this limitation may only be used by the Residual
Certificateholder to offset its share of the REMIC's taxable income in future
periods (but not otherwise). The ability of Residual Certificateholders that are
individuals or closely held corporations to deduct net losses may be subject to
additional limitations under the Code.

    Mark to Market Rules. A Residual Certificate acquired after January 3, 1995
cannot be marked-to-market.

    Pass-Through of Non-Interest Expenses of the REMIC. As a general rule, all
of the fees and expenses of a REMIC will be taken into account by holders of the
Residual Certificates. In the case of a single class REMIC, however, the
expenses and a matching amount of additional income will be allocated, under
temporary Treasury regulations, among the Regular Certificateholders and the
Residual Certificateholders on a daily basis in proportion to the relative
amounts of income accruing to each certificateholder on that day. In general
terms, a single class REMIC is one that either would qualify, under existing
Treasury regulations, as a grantor trust if it were not a REMIC (treating all
interests as ownership interests, even if they would be classified as debt for
federal income tax purposes) or is similar to a grantor trust and is structured
with the principal purpose of avoiding the single class REMIC rules. The
applicable prospectus supplement may apportion expenses to the Regular
Certificates, but if it does not, then the expenses of the REMIC will be
allocated to holders of the related Residual Certificates in their entirety and
not to holders of the related Regular Certificates.

    In the case of individuals (or trusts, estates or other persons that compute
their income in the same manner as individuals) who own an interest in a Regular
Certificate or a Residual Certificate directly or through a pass-through
interest holder that is required to pass miscellaneous itemized deductions
through to its owners or beneficiaries (e.g. a partnership, an S corporation or
a grantor trust), the trust expenses will be deductible under Code Section 67
only to the extent that those expenses, plus other "miscellaneous itemized
deductions" of the individual, exceed 2% of the individual's adjusted gross
income. In addition, Code Section 68 provides that the amount of itemized
deductions otherwise allowable for an individual

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whose adjusted gross income exceeds a certain amount (the "Applicable Amount")
will be reduced by the lesser of 3% of the excess of the individual's adjusted
gross income over the Applicable Amount or 80% of the amount of itemized
deductions otherwise allowable for the taxable year. The amount of additional
taxable income recognized by Residual Certificateholders who are subject to the
limitations of either Code Section 67 or Code Section 68 may be substantial.
Further, holders (other than corporations) subject to the alternative minimum
tax may not deduct miscellaneous itemized deductions in determining their
alternative minimum taxable income. The REMIC is required to report to each
pass-through interest holder and to the IRS the holder's allocable share, if
any, of the REMIC's non-interest expenses. The term "pass-through interest
holder" generally refers to individuals, entities taxed as individuals and
certain pass-through entities, but does not include real estate investment
trusts. Residual Certificateholders that are pass-through interest holders are
encouraged to consult their own tax advisors about the impact of these rules on
an investment in the Residual Certificates.

    Excess Inclusions. A portion of the income on a Residual Certificate
(referred to in the Code as an "excess inclusion") for any calendar quarter
generally will be subject to federal income tax in all events. Thus, for
example, an excess inclusion may not be offset by any unrelated losses,
deductions or loss carryovers of a Residual Certificateholder; will be treated
as "unrelated business taxable income" within the meaning of Code Section 512 if
the Residual Certificateholder is a pension fund or any other organization that
is subject to tax only on its unrelated business taxable income (see "--
Tax-Exempt Investors"); and is not eligible for any reduction in the rate of
withholding tax in the case of a Residual Certificateholder that is a foreign
investor. See "-- Non-U.S. Persons." An exception to the excess inclusion rules
that applied to thrifts holding certain residuals was repealed by the Small
Business Tax Act of 1996.

    Except as discussed in the following paragraph, with respect to any Residual
Certificateholder, the excess inclusions for any calendar quarter is the excess,
if any, of the income of the Residual Certificateholder for that calendar
quarter from its Residual Certificate over the sum of the "daily accruals" for
all days during the calendar quarter on which the Residual Certificateholder
holds the Residual Certificate. For this purpose, the daily accruals with
respect to a Residual Certificate are determined by allocating to each day in
the calendar quarter its ratable portion of the product of the "adjusted issue
price" of the Residual Certificate at the beginning of the calendar quarter and
120 percent of the "Federal long-term rate" in effect at the time the Residual
Certificate is issued. For this purpose, the "adjusted issue price" of a
Residual Certificate at the beginning of any calendar quarter equals the issue
price of the Residual Certificate, increased by the amount of daily accruals for
all prior quarters, and decreased (but not below zero) by the aggregate amount
of payments made on the Residual Certificate before the beginning of the same
quarter. The "federal long-term 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.

    In the case of any Residual Certificates held by a real estate investment
trust, the aggregate excess inclusions with respect to the Residual
Certificates, reduced (but not below zero) by the real estate investment trust
taxable income (within the meaning of Code Section 857(b)(2), excluding any net
capital gain), will be allocated among the shareholders of the trust in
proportion to the dividends received by the shareholders from the trust, and any
amount so allocated will be treated as an excess inclusion with respect to a
Residual Certificate as if held directly by the shareholder. Regulated
investment companies, common trust funds and certain cooperatives are subject to
similar rules.

    Payments. Any distribution made on a Residual Certificate to a Residual
Certificateholder will be treated as a non-taxable return of capital to the
extent it does not exceed the Residual Certificateholder's adjusted basis in the
Residual Certificate. To the extent a distribution exceeds the adjusted basis,
it will be treated as gain from the sale of the Residual Certificate.

    Sale or Exchange of Residual Certificates. If a Residual Certificate is sold
or exchanged, the seller will generally recognize gain or loss equal to the
difference between the amount realized on the sale or exchange and its adjusted
basis in the Residual Certificate (except that the recognition of loss may be
limited under the "wash sale" rules). A holder's adjusted basis in a Residual
Certificate generally equals the cost of the Residual Certificate to the
Residual Certificateholder, increased by the taxable income of the REMIC that
was included in the income of the Residual Certificateholder with respect to the
Residual

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Certificate, and decreased (but not below zero) by the net losses that have been
allowed as deductions to the Residual Certificateholder with respect to the
Residual Certificate and by the distributions received thereon by the Residual
Certificateholder. In general, the gain or loss will be capital gain or loss
provided the Residual Certificate is held as a capital asset. However, Residual
Certificates will be "evidences of indebtedness" within the meaning of Code
Section 582(c)(1), so that gain or loss recognized from sale of a Residual
Certificate by a bank or thrift institution to which that section applies would
be ordinary income or loss.

     Except as provided in Treasury regulations yet to be issued, if the seller
of a Residual Certificate reacquires the Residual Certificate, or acquires any
other Residual Certificate, any residual interest in another REMIC or similar
interest in a "taxable mortgage pool" (as defined in Code Section 7701(i))
during the period beginning six months before, and ending six months after, the
date of the sale, the sale will be subject to the "wash sale" rules of Code
Section 1091. In that event, any loss realized by the Residual Certificateholder
on the sale will not be deductible, but, instead, will increase the Residual
Certificateholder's adjusted basis in the newly acquired asset.

PROHIBITED TRANSACTIONS AND OTHER TAXES

     The Code imposes a tax on REMICs equal to 100 percent of the net income
derived from "prohibited transactions" (the "Prohibited Transactions Tax") and
prohibits deducting any loss with respect to prohibited transactions. In
general, subject to certain specified exceptions, a prohibited transaction means
the disposition of a mortgage loan, the receipt of income from a source other
than a mortgage loan or certain other permitted investments, the receipt of
compensation for services, or gain from the disposition of an asset purchased
with the payments on the mortgage loans for temporary investment pending
distribution on the certificates. It is not anticipated that the trust fund for
any series of certificates will engage in any prohibited transactions in which
it would recognize a material amount of net income.

     In addition, certain contributions to a trust fund as to which an election
has been made to treat the trust fund as a REMIC made after the day on which the
trust fund issues all of its interest could result in the imposition of a tax on
the trust fund equal to 100% of the value of the contributed property (the
"Contributions Tax"). No trust fund for any series of certificates will accept
contributions that would subject it to a Contributions Tax.

     In addition, a trust fund as to which an election has been made to treat
the trust fund as a REMIC may also be 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" generally means income from foreclosure property
other than qualifying income for a real estate investment trust.

     Where 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 a REMIC relating to any series of certificates results from

     o    a breach of the related master servicer's, trustee's or seller's
          obligations under the related pooling and servicing agreement for the
          series, the tax will be borne by the master servicer, trustee or
          seller, as the case may be, out of its own funds or

     o    the seller's obligation to repurchase a mortgage loan, the tax will be
          borne by the seller.

If the master servicer, trustee or seller, as the case may be, fails to pay or
is not required to pay the tax as provided above, the tax will be payable out of
the trust fund for the series and will result in a reduction in amounts
available to be distributed to the certificateholders of the series.

LIQUIDATION AND TERMINATION

     If the REMIC adopts a plan of complete liquidation, within the meaning of
Code Section 860F(a)(4)(A)(i), which may be accomplished by designating in the
REMIC's final tax return a date on which the 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 subject to any Prohibited Transactions Tax,
provided that

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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.

    The REMIC will terminate shortly following the retirement of the Regular
Certificates. If a Residual Certificateholder's adjusted basis in the Residual
Certificate exceeds the amount of cash distributed to the Residual
Certificateholder in final liquidation of its interest, then it would appear
that the Residual Certificateholder would be entitled to a loss equal to the
amount of the excess. It is unclear whether the loss, if allowed, will be a
capital loss or an ordinary loss.

ADMINISTRATIVE MATTERS

    Solely for the purpose of the administrative provisions of the Code, the
REMIC generally will be treated as a partnership and the Residual
Certificateholders will be treated as the partners if there is more than one
holder of the Residual Certificate. Certain information will be furnished
quarterly to each Residual Certificateholder who held a Residual Certificate on
any day in the previous calendar quarter.

    Each Residual Certificateholder is required to treat items on its return
consistently with their treatment on the REMIC's return, unless the Residual
Certificateholder either files a statement identifying the inconsistency or
establishes that the inconsistency resulted from incorrect information received
from the REMIC. The IRS may assert a deficiency resulting from a failure to
comply with the consistency requirement without instituting an administrative
proceeding at the REMIC level. The REMIC does not intend to register as a tax
shelter pursuant to Code Section 6111 because it is not anticipated that the
REMIC will have a net loss for any of the first five taxable years of its
existence. Any person that holds a Residual Certificate as a nominee for another
person may be required to furnish the REMIC, in a manner to be provided in
Treasury regulations, with the name and address of the person and other
information.

TAX-EXEMPT INVESTORS

    Any Residual Certificateholder that is a pension fund or other entity that
is subject to federal income taxation only on its "unrelated business taxable
income" within the meaning of Code Section 512 will be subject to the tax on
that portion of the distributions received on a Residual Certificate that is
considered an excess inclusion. See "-- Residual Certificates -- Excess
Inclusions."

NON-U.S. PERSONS

    Amounts paid to Residual Certificateholders who are not U.S. persons (see "
-- Regular Certificates -- Non-U.S. Persons") are treated as interest for
purposes of the 30% (or lower treaty rate) United States withholding tax.
Amounts distributed to holders of Residual Certificates should qualify as
"portfolio interest," subject to the conditions described in "-- Regular
Certificates," but only to the extent that the underlying mortgage loans were
originated after July 18, 1984. Furthermore, the rate of withholding on any
income on a Residual Certificate that is excess inclusion income will not be
subject to reduction under any applicable tax treaties. See "-- Residual
Certificates -- Excess Inclusions." If the portfolio interest exemption is
unavailable, the amount will be subject to United States withholding tax when
paid or otherwise distributed (or when the Residual Certificate is disposed of)
under rules similar to those for withholding upon disposition of debt
instruments that have OID. The Code, however, grants the Treasury Department
authority to issue regulations requiring that those amounts be taken into
account earlier than otherwise provided where necessary to prevent avoidance of
tax (for example, where the Residual Certificates do not have significant
value). See "-- Residual Certificates -- Excess Inclusions." If the amounts
paid to Residual Certificateholders that are not U.S. persons are effectively
connected with their conduct of a trade or business within the United States,
the 30% (or lower treaty rate) withholding will not apply. Instead, the amounts
paid to the non-U.S. Person will be subject to U.S. federal income taxation at
regular graduated rates. For special restrictions on the transfer of Residual
Certificates, see "-- Tax-Related Restrictions on Transfers of Residual
Certificates."

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TAX-RELATED RESTRICTIONS ON TRANSFERS OF RESIDUAL CERTIFICATES

    Disqualified Organizations. An entity may not qualify as a REMIC unless
there are reasonable arrangements designed to ensure that residual interests in
the entity are not held by "disqualified organizations." Further, a tax is
imposed on the transfer of a residual interest in a REMIC to a "disqualified
organization." The amount of the tax equals the product of an amount (as
determined under the REMIC Regulations) equal to the present value of the total
anticipated "excess inclusions" with respect to the interest for periods after
the transfer and the highest marginal federal income tax rate applicable to
corporations. The tax is imposed on the transferor unless the transfer is
through an agent (including a broker or other middleman) for a disqualified
organization, in which event the tax is imposed on the agent. The person
otherwise liable for the tax shall be relieved of liability for the tax if the
transferee furnished to it an affidavit that the transferee is not a
disqualified organization and, at the time of the transfer, the person does not
have actual knowledge that the affidavit is false. A "disqualified organization"
means the United States, any State, possession or political subdivision of the
United States, any foreign government, any international organization or any
agency or instrumentality of any of the foregoing entities (provided that the
term does not include an instrumentality if all its activities are subject to
tax and, except for Freddie Mac, a majority of its board of directors is not
selected by a governmental agency), any organization (other than certain farmers
cooperatives) generally exempt from federal income taxes unless the organization
is subject to the tax on "unrelated business taxable income" and a rural
electric or telephone cooperative.

    A tax is imposed on a "pass-through entity" holding a residual interest in a
REMIC if at any time during the taxable year of the pass-through entity a
disqualified organization is the record holder of an interest in the entity. The
amount of the tax is equal to the product of the amount of excess inclusions for
the taxable year allocable to the interest held by the disqualified organization
and the highest marginal federal income tax rate applicable to corporations. The
pass-through entity otherwise liable for the tax, for any period during which
the disqualified organization is the record holder of an interest in the entity,
will be relieved of liability for the tax if the record holder furnishes to the
entity an affidavit that the record holder is not a disqualified organization
and, for the applicable period, the pass-through entity does not have actual
knowledge that the affidavit is false. For this purpose, a "pass-through entity"
means a regulated investment company, real estate investment trust, or common
trust fund; a partnership, trust, or estate; and certain cooperatives. Except as
may be provided in Treasury regulations not yet issued, any person holding an
interest in a pass-through entity as a nominee for another will, with respect to
the interest, be treated as a pass-through entity. The tax on pass-through
entities is generally effective for periods after March 31, 1988, except that in
the case of regulated investment companies, real estate investment trusts,
common trust funds and publicly-traded partnerships the tax shall apply only to
taxable years of the entities beginning after December 31, 1988. Under the
Taxpayer Relief Act of 1997, large partnerships (generally with 250 or more
partners) will be taxable on excess inclusion income as if all partners were
disqualified organizations.

    To comply with these rules, the pooling and servicing agreement will provide
that no record or beneficial ownership interest in a Residual Certificate may be
purchased, transferred or sold, directly or indirectly, without the express
written consent of the master servicer. The master servicer will grant consent
to a proposed transfer only if it receives an affidavit from the proposed
transferee to the effect that it is not a disqualified organization and is not
acquiring the Residual Certificate as a nominee or agent for a disqualified
organization and a covenant by the proposed transferee to the effect that the
proposed transferee agrees to be bound by and to abide by the transfer
restrictions applicable to the Residual Certificate.

    Noneconomic Residual Certificates. The REMIC Regulations disregard, for
federal income tax purposes, any transfer of a Noneconomic Residual Certificate
to a "U.S. Person," as defined in the following section of this discussion,
unless no significant purpose of the transfer is to enable the transferor to
impede the assessment or collection of tax. In general, the definition of a U.S.
Person is the same as provided under "Certain Federal Income Tax Consequences --
Non-REMIC Certificates -- Non-U.S. Persons," except that entities or individuals
that would otherwise be treated as Non-U.S. Persons, may be considered U.S.
Persons for this purpose if their income from the residual is subject to tax
under Code Section 871(b) or Code Section 882 (income effectively connected with
a U.S. trade or business). A Noneconomic

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Residual Certificate is any Residual Certificate (including a Residual
Certificate with a positive value at issuance) unless, at the time of transfer,
taking into account the Prepayment Assumption and any required or permitted
clean up calls or required liquidation provided for in the REMIC's
organizational documents, the present value of the expected future distributions
on the Residual Certificate at least equals the product of the present value of
the anticipated excess inclusions and the highest corporate income tax rate in
effect for the year in which the transfer occurs and the transferor reasonably
expects that the transferee will receive distributions from the REMIC at or
after the time at which taxes accrue on the anticipated excess inclusions in an
amount sufficient to satisfy the accrued taxes. A significant purpose to impede
the assessment or collection of tax exists if the transferor, at the time of the
transfer, either knew or should have known that the transferee would be
unwilling or unable to pay taxes due on its share of the taxable income of the
REMIC. A transferor is presumed not to have that knowledge if the transferor
conducted a reasonable investigation of the transferee and the transferee
acknowledges to the transferor that the residual interest may generate tax
liabilities in excess of the cash flow and the transferee represents that it
intends to pay the taxes associated with the residual interest as they become
due. If a transfer of a Noneconomic Residual Certificate is disregarded, the
transferor would continue to be treated as the owner of the Residual Certificate
and would continue to be subject to tax on its allocable portion of the net
income of the REMIC.

    Foreign Investors. The REMIC Regulations provide that the transfer of a
Residual Certificate that has a "tax avoidance potential" to a "foreign person"
will be disregarded for federal income tax purposes. This rule appears to apply
to a transferee who is not a U.S. Person unless the transferee's income in
respect of the Residual Certificate is effectively connected with the conduct of
a United States trade or business. A Residual Certificate is deemed to have a
tax avoidance potential unless, at the time of transfer, the transferor
reasonably expects that the REMIC will distribute to the transferee amounts that
will equal at least 30 percent of each excess inclusion, and that the amounts
will be distributed at or after the time the excess inclusion accrues and not
later than the end of the calendar year following the year of accrual. If the
non-U.S. Person transfers the Residual Certificate to a U.S. Person, the
transfer will be disregarded, and the foreign transferor will continue to be
treated as the owner, if the transfer has the effect of allowing the transferor
to avoid tax on accrued excess inclusions. The provisions in the REMIC
Regulations regarding transfers of Residual Certificates that have tax avoidance
potential to foreign persons are effective for all transfers after June 30,
1992. The pooling and servicing agreement will provide that no record or
beneficial ownership interest in a Residual Certificate may be transferred,
directly or indirectly, to a non-U.S. Person unless the person provides the
trustee with a duly completed I.R.S. Form 4224 and the trustee consents to the
transfer in writing.

    Any attempted transfer or pledge in violation of the transfer restrictions
shall be absolutely null and void and shall vest no rights in any purported
transferee. Investors in Residual Certificates are encouraged to consult their
own tax advisors with respect to transfers of the Residual Certificates and
pass-through entities are encouraged to consult their own tax advisors with
respect to any tax which may be imposed on a pass-through entity.

                            STATE TAX CONSIDERATIONS

    In addition to the federal income tax consequences described in "Certain
Federal Income Tax Considerations," potential investors are encouraged to
consider the state and local income tax consequences of the acquisition,
ownership, and disposition of the certificates. State and local income tax law
may differ substantially from the corresponding federal law, and this discussion
does not purport to describe any aspect of the income tax laws of any state or
locality. Therefore, potential investors are encouraged to consult their own tax
advisors with respect to the various tax consequences of investments in the
certificates.

                              ERISA CONSIDERATIONS

    The following describes certain considerations under ERISA and the Code,
which apply only to certificates of a series that are not divided into
subclasses. If certificates are divided into subclasses, the related prospectus
supplement will contain information concerning considerations relating to ERISA
and the Code that are applicable to them.

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    ERISA imposes requirements on employee benefit plans subject to ERISA (and
the Code imposes requirements on certain other retirement plans and
arrangements, including individual retirement accounts and annuities, Keogh
plans and collective investment funds and separate accounts in which the plans,
accounts or arrangements are invested) (collectively "Plans") and on persons who
bear specified relationships to Plans ("Parties in Interest") or are fiduciaries
with respect to Plans. Generally, ERISA applies to investments made by Plans.
Among other things, ERISA requires that the assets of Plans be held in trust and
that the trustee, or other duly authorized fiduciary, have exclusive authority
and discretion to manage and control the assets of the Plans. ERISA also imposes
certain duties on persons who are fiduciaries of Plans. Under ERISA, any person
who exercises any authority or control respecting the management or disposition
of the assets of a Plan is considered to be a fiduciary of the Plan (subject to
certain exceptions not here relevant). Certain employee benefit plans, such as
governmental plans (as defined in ERISA Section 3(32)) and, if no election has
been made under Section 410(d) of the Code, church plans (as defined in ERISA
Section 3(33)), are not subject to ERISA requirements. Accordingly, assets of
those plans may be invested in certificates without regard to the described
ERISA considerations, subject to the provisions of applicable state law.
However, any of those plans that are qualified and exempt from taxation under
Code Sections 401(a) and 501(a) are subject to the prohibited transaction rules
set forth in Code Section 503.

    On November 13, 1986, the United States Department of Labor issued final
regulations concerning the definition of what constitutes the assets of a Plan.
(Labor Reg. Section 2510.3-101.) Under this regulation, the underlying assets
and properties of corporations, partnerships and certain other entities in which
a Plan makes an "equity" investment could be deemed for purposes of ERISA to be
assets of the investing Plan in certain circumstances. However, the regulation
provides that, generally, the assets of a corporation or partnership in which a
Plan invests will not be deemed for purposes of ERISA to be assets of the Plan
if the equity interest acquired by the investing Plan is a publicly-offered
security. A publicly-offered security, as defined in Labor Reg. Section
2510.3-101, is a security that is widely held, freely transferable and
registered under the Securities Exchange Act of 1934, as amended.

    In addition to the imposition of general fiduciary standards of investment
prudence and diversification, ERISA and the Code prohibit a broad range of
transactions involving Plan assets of a Plan and Parties in Interest with
respect to the Plan and impose additional prohibitions where Parties in Interest
are fiduciaries with respect to the Plan. Because the mortgage loans may be
deemed Plan assets of each Plan that purchases certificates, an investment in
the certificates by a Plan might be a prohibited transaction under ERISA
Sections 406 and 407 and subject to an excise tax under Code Section 4975 unless
a statutory, regulatory or administrative exemption applies.

    In Prohibited Transaction Exemption 83-1 ("PTE 83-1"), the DOL exempted from
ERISA's prohibited transaction rules and from the excise tax imposed under Code
Section 4975 certain transactions relating to the operation of residential
mortgage pool investment trusts and the purchase, sale and holding of "mortgage
pool pass-through certificates" in the initial issuance of the certificates. PTE
83-1 permits, subject to certain conditions, transactions that might otherwise
be prohibited between Plans and Parties in Interest with respect to those Plans
related to the origination, maintenance and termination of mortgage pools
consisting of mortgage loans secured by first or second mortgages or deeds of
trust on single-family residential property, and the acquisition and holding of
certain mortgage pool pass-through certificates representing an interest in
those mortgage pools by Plans. If the general conditions of PTE 83-1 are
satisfied, investments by a Plan in certificates that represent interests in a
mortgage pool consisting of mortgage loans representing loans for single family
homes ("Single Family Certificates") will be exempt from the prohibitions of
ERISA Sections 406(a) and 407 (relating generally to transactions with Parties
in Interest who are not fiduciaries) if the Plan purchases the Single Family
Certificates at no more than fair market value and will be exempt from the
prohibitions of ERISA Sections 406(b)(1) and (2) (relating generally to
transactions with fiduciaries) if, in addition, the purchase is approved by an
independent fiduciary, no sales commission is paid to the pool sponsor, the Plan
does not purchase more than twenty-five percent (25%) of all Single Family
Certificates and at least fifty percent (50%) of all Single Family Certificates
are purchased by persons independent of the pool sponsor or pool trustee. PTE
83-1 does not provide an exemption for transactions involving subordinated
certificates. Accordingly, no transfer of a subordinated certificate generally
may be made to a Plan.

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<PAGE>


     The discussion in this and the next paragraph applies only to Single Family
Certificates. The depositor believes that, for purposes of PTE 83-1, the term
"mortgage pass-through certificate" would include: (1) certificates issued in a
series consisting of only a single class of certificates; and (2) senior
certificates issued in a series in which there is only one class of senior
certificates; provided that the certificates in the case of clause (1), or the
senior certificates in the case of clause (2), evidence the beneficial ownership
of both a specified percentage (greater than zero percent) of future interest
payments and a specified percentage (greater than zero percent) of future
principal payments on the mortgage loans. It is not clear whether a class of
certificates that evidences the beneficial ownership of a specified percentage
of interest payments only or principal payments only, or of a notional amount of
either principal or interest payments, would be a "mortgage pass-through
certificate" for purposes of PTE 83-1.

     PTE 83-1 sets forth three general conditions that must be satisfied for any
transaction to be eligible for exemption:

     o    the maintenance of a system of insurance or other protection for the
          pooled mortgage loans and property securing the loans and for
          indemnifying certificateholders against reductions in pass-through
          payments due to property damage or defaults in loan payments in an
          amount not less than the greater of one percent of the aggregate
          principal balance of all covered pooled mortgage loans or the
          principal balance of the largest covered pooled mortgage loan;

     o    the existence of a pool trustee who is not an affiliate of the pool
          sponsor; and

     o    a limitation on the amount of the payment retained by the pool
          sponsor, together with other funds inuring to its benefit, to not more
          than adequate consideration for selling the mortgage loans plus
          reasonable compensation for services provided by the pool sponsor to
          the mortgage pool.

     The depositor believes that the first general condition referred to above
will be satisfied with respect to the certificates in a series issued without a
subordination feature, or the senior certificates only in a series issued with a
subordination feature, provided that the subordination and reserve fund,
subordination by shifting of interests, the pool insurance or other form of
credit enhancement described in this prospectus (that subordination, pool
insurance or other form of credit enhancement being the system of insurance or
other protection referred to above) with respect to a series of certificates is
maintained in an amount not less than the greater of one percent of the
aggregate principal balance of the mortgage loans or the principal balance of
the largest mortgage loan. See "Description of the Certificates." In the absence
of a ruling that the system of insurance or other protection with respect to a
series of certificates satisfies the first general condition referred to above,
there can be no assurance that these features will be so viewed by the DOL. The
trustee will not be affiliated with the depositor.

     Each Plan fiduciary who is responsible for making the investment decisions
whether to purchase or commit to purchase and to hold Single Family Certificates
must make its own determination as to whether the first and third general
conditions, and the specific conditions described briefly in the preceding
paragraph, of PTE 83-1 have been satisfied, or as to the availability of any
other prohibited transaction exemptions. Each Plan fiduciary should also
determine whether, under the general fiduciary standards of investment prudence
and diversification, an investment in the 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.

     The DOL has granted to certain underwriters individual administrative
exemptions (the "Underwriter Exemptions") from certain of the prohibited
transaction rules of ERISA and the related excise tax provisions of Section 4975
of the Code with respect to the initial purchase, the holding and the subsequent
resale by Plans of certificates in pass-through trusts that consist of certain
receivables, loans and other obligations that meet the conditions and
requirements of the Underwriter Exemptions.

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<PAGE>

     While each Underwriter Exemption is an individual exemption separately
granted to a specific underwriter, the terms and conditions which generally
apply to the Underwriter Exemptions are substantially the following:

     o    the acquisition of the certificates by a Plan is on terms (including
          the price for the certificates) that are at least as favorable to the
          Plan as they would be in an arm's length transaction with an unrelated
          party;

     o    the rights and interest evidenced by the certificates acquired by the
          Plan are not subordinated to the rights and interests evidenced by
          other certificates of the trust fund;

     o    the certificates acquired by the Plan have received a rating at the
          time of acquisition that is one of the three highest generic rating
          categories from Standard & Poor's Ratings Group, a division of
          McGraw-Hill Companies, Inc., Moody's Investors Service, Inc., Duff &
          Phelps Credit Rating Co. or Fitch IBCA, Inc.;

     o    the trustee is not an affiliate of any other member of the Restricted
          Group;

     o    the sum of all payments made to and retained by the underwriters in
          connection with the distribution of the certificates represents not
          more than reasonable compensation for underwriting the certificates;
          the sum of all payments made to and retained by the seller pursuant to
          the assignment of the loans to the trust fund represents not more than
          the fair market value of the loans; the sum of all payments made to
          and retained by the master servicer and any other servicer represents
          not more than reasonable compensation for its services under the
          agreement pursuant to which the loans are pooled and reimbursements of
          its reasonable expenses in connection therewith; and

     o    the Plan investing in the certificates is an "accredited investor" as
          defined in Rule 501(a)(1) of Regulation D of the SEC under the
          Securities Act of 1933 as amended.

     The trust fund must also meet the following requirements:

     o    the corpus of the trust fund must consist solely of assets of the type
          that have been included in other investment pools;

     o    certificates in other investment pools must have been rated in one of
          the three highest rating categories of S&P, Moody's, Fitch or D&P for
          at least one year before the Plan's acquisition of certificates; and

     o    certificates evidencing interests in the other investment pools must
          have been purchased by investors other than Plans for at least one
          year before any Plan's acquisition of certificates.

     Moreover, the Underwriter Exemptions generally provide relief from certain
self-dealing and conflict of interest prohibited transactions that may occur
when the Plan fiduciary causes a Plan to acquire certificates in a trust holding
receivables as to which the fiduciary (or its affiliate) is an obligor provided
that, among other requirements:

     o    in the case of an acquisition in connection with the initial issuance
          of certificates, at least fifty percent of each class of certificates
          in which Plans have invested is acquired by persons independent of the
          Restricted Group;

     o    the fiduciary (or its affiliate) is an obligor with respect to five
          percent or less of the fair market value of the obligations contained
          in the trust;

     o    the Plan's investment in certificates of any class does not exceed
          twenty-five percent of all of the certificates of that class
          outstanding at the time of the acquisition; and

     o    immediately after the acquisition, no more than twenty-five percent of
          the assets of any Plan with respect to which the person is a fiduciary
          is invested in certificates representing an interest in one or more
          trusts containing assets sold or serviced by the same entity.

     The Underwriter Exemptions do not apply to Plans sponsored by the seller,
the Underwriter, the trustee, the master servicer, any servicer, any insurer
with respect to the mortgage loans, any obligor with respect to mortgage loans
included in the trust fund constituting more than five percent of the aggregate

                                       92

<PAGE>






unamortized principal balance of the assets in the trust fund, or any affiliate
of those parties (the "Restricted Group").

    On July 21, 1997, DOL published in the Federal Register an amendment to the
Exemption, which extends exemptive relief to specified mortgage-backed and
asset-backed securities transactions using pre-funded accounts for trusts
issuing pass-through certificates. The amendment generally allows mortgage loans
or other secured receivables supporting payments to certificateholders, and
having a value equal to no more than twenty-five percent of the total principal
amount of the certificates being offered by the trust, to be transferred to the
trust within a 90-day or three-month period following the closing date, instead
of requiring that all obligations be either identified or transferred on or
before the closing date. The relief is available when certain conditions are
met.

    The prospectus supplement for each series of certificates will indicate the
classes of certificates, if any, offered thereby as to which it is expected that
an Underwriter Exemption will apply.

    Any Plan fiduciary that proposes to cause a Plan to purchase certificates is
encouraged to consult with its counsel concerning the impact of ERISA and the
Code, the applicability of PTE 83-1, the availability and applicability of any
Underwriter Exemption or any other exemptions from the prohibited transaction
provisions of ERISA and the Code and the potential consequences in their
specific circumstances, before making the investment. Moreover, each Plan
fiduciary should determine whether under the general fiduciary standards of
investment prudence and diversification an investment in the 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

    The prospectus supplement for each series of certificates will specify
which, if any, of the classes of certificates offered by it will constitute
"mortgage related securities" for purposes of the Secondary Mortgage Market
Enhancement Act of 1984 ("SMMEA"). Classes of certificates that qualify as
"mortgage related securities" will be legal investments for those investors
whose authorized investments are subject to state regulation, to the same extent
as, under applicable law, obligations issued by or guaranteed as to principal
and interest by the United States constitute legal investments for them. Those
investors are persons, trusts, corporations, partnerships, associations,
business trusts and business entities (including depository institutions, life
insurance companies and pension funds) created pursuant to or existing under the
laws of the United States or of any state (including the District of Columbia
and Puerto Rico). Under SMMEA, if a state enacts legislation before October 4,
1991 specifically limiting the legal investment authority of those entities with
respect to "mortgage related securities," the certificates will constitute legal
investments for entities subject to the legislation only to the extent provided
in it. Approximately twenty-one states adopted limiting legislation before the
October 4, 1991 deadline.

    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 in certificates
without limitations as to the percentage of their assets represented by them,
federal credit unions may invest in mortgage related securities, and national
banks may purchase certificates for their own account without regard to the
limitations generally applicable to investment securities set forth in 12 U.S.C.
24 (Seventh), subject in each case to regulations that the applicable federal
authority may prescribe. In this connection, federal credit unions should review
the National Credit Union Administration Letter to Credit Unions No. 96, as
modified by Letter to Credit Unions No. 108, which includes guidelines to assist
federal credit unions in making investment decisions for mortgage related
securities, and the its regulation "Investment and Deposit Activities" (12
C.F.R. Part 703), (whether or not the class of certificates under consideration
for purchase constitutes a "mortgage related security").

    All depository institutions considering an investment in the certificates
(whether or not the class of certificates under consideration for purchase
constitutes a "mortgage related security" should review the Federal Financial
Institutions Examination Council's Supervisory Policy Statement on Securities
Activities (to the extent adopted by their respective regulators), setting
forth, in relevant part, certain securities trading and sales practices deemed
unsuitable for an institution's investment portfolio, and guidelines for (and
restrictions on) investing in mortgage derivative products, including "mortgage
related securities" that

                                       93

<PAGE>


are "high-risk mortgage securities" as defined in the policy statement.
According to the policy statement, "high-risk mortgage securities" include
securities such as certificates not entitled to distributions allocated to
principal or interest, or subordinated certificates. Under the policy statement,
each depository institution must determine, before purchase (and at stated
intervals thereafter), whether a particular mortgage derivative product is a
"high-risk mortgage security," and whether the purchase (or retention) of such a
product would be consistent with the policy statement.

     The foregoing does not take into consideration the applicability of
statutes, rules, regulations, orders, guidelines, or agreements generally
governing investments made by a particular investor, including "prudent
investor" provisions, percentage-of-assets limits and provisions that may
restrict or prohibit investment in securities that are not "interest bearing" or
"income paying."

     There may be other restrictions on the ability of certain investors,
including depository institutions, either to purchase certificates or to
purchase certificates representing more than a specified percentage of the
investor's assets. Investors are encouraged to consult their own legal advisors
in determining whether and to what extent the certificates constitute legal
investments for them.

                             METHOD OF DISTRIBUTION

     Certificates are being offered hereby in series from time to time (each
series evidencing a separate trust fund) through any of the following methods:

     o    by negotiated firm commitment underwriting and public reoffering by
          underwriters;

     o    by agency placements through one or more placement agents primarily
          with institutional investors and dealers; and

     o    by placement directly by the depositor with institutional investors.

     A prospectus supplement will be prepared for each series which will
describe the method of offering being used for that series and will set forth
the identity of any of its underwriters and either the price at which the series
is being offered, the nature and amount of any underwriting discounts or
additional compensation to the underwriters and the proceeds of the offering to
the depositor, or the method by which the price at which the underwriters will
sell the certificates will be determined. Each prospectus supplement for an
underwritten offering will also contain information regarding the nature of the
underwriters obligations, any material relationship between the depositor and
any underwriter and, where appropriate, information regarding any discounts or
concessions to be allowed or reallowed to dealers or others and any arrangements
to stabilize the market for the certificates so offered. In firm commitment
underwritten offerings, the underwriters will be obligated to purchase all of
the certificates of the series if any certificates are purchased. Certificates
may be acquired by the underwriters for their own accounts and may be resold
from time to time in one or more transactions, including negotiated
transactions, at a fixed public offering price or at varying prices determined
at the time of sale.

     This prospectus, together with the related prospectus supplement, may be
used by Countrywide Securities Corporation, an affiliate of CWMBS, Inc., in
connection with offers and sales related to market making transactions in the
certificates in which Countrywide Securities Corporation acts as principal.
Countrywide Securities Corporation may also act as agent in those transactions.
Sales in those transactions will be made at prices related to prevailing prices
at the time of sale.

     Underwriters and agents may be entitled under agreements entered into with
the depositor to indemnification by the depositor against certain civil
liabilities, including liabilities under the Securities Act of 1933, as amended,
or to contribution with respect to payments which the underwriters or agents may
be required to make in respect thereof.

     If a series is offered other than through underwriters, the prospectus
supplement relating to it will contain information regarding the nature of the
offering and any agreements to be entered into between the depositor and
purchasers of certificates of the series.

                                       94

<PAGE>

                                 LEGAL MATTERS

    The validity of the certificates, including certain federal income tax
consequences with respect to the certificates, will be passed upon for the
depositor by Brown & Wood LLP, One World Trade Center, New York, New York 10048.

                             FINANCIAL INFORMATION

    A new trust fund will be formed for each series of certificates and no trust
fund will engage in any business activities or have any assets or obligations
before the issuance of the related series of certificates. Accordingly, no
financial statements for any trust fund will be included in this prospectus or
in the related prospectus supplement.

                                     RATING

    It is a condition to the issuance of the certificates of each series offered
by this prospectus and by the prospectus supplement that they shall have been
rated in one of the four highest rating categories by the nationally recognized
statistical rating agency or agencies specified in the related prospectus
supplement.

    Ratings on mortgage pass-through certificates address the likelihood of
receipt by certificateholders of all distributions on the underlying mortgage
loans. These ratings address the structural, legal and issuer-related aspects
associated with the certificates, the nature of the underlying mortgage loans
and the credit quality of the credit enhancer or guarantor, if any. Ratings on
mortgage pass-through certificates do not represent any assessment of the
likelihood of principal prepayments by mortgagors or of the degree by which the
prepayments might differ from those originally anticipated. As a result,
certificateholders might suffer a lower than anticipated yield, and, in
addition, holders of stripped pass-through certificates in extreme cases might
fail to recoup their underlying investments.

    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.

                                       95

<PAGE>

          INDEX TO DEFINED TERMS



1986 Act..........................        70
Agency Securities.................        14
Amortizable Bond Premium
  Regulations.....................        68
Applicable Amount.................        85
ARM Loans.........................        70
Asset Conservation Act............        63
CERCLA............................        63
Certificate Account...............        47
Class Certificate Balance.........        30
Code..............................    27, 66
Contingent Regulations............        75
Contributions Tax.................        86
Deferred Interest.................        72
Eleventh District.................        36
excess inclusion..................        85
FHLBSF............................        36
Garn-St Germain Act...............        64
Insured Expenses..................        48
Legislative History...............        71
Liquidated Mortgage...............        55
Loan-to-Value Ratio...............        16
Master REMIC......................        74
Mortgage Assets...................        14
National Cost of Funds Index......        37
New Withholding Regulations.......        73
Non-U.S. Person...................        73
OID...............................        66
OID Regulations...................        70
OTS...............................        37
Parties in Interest...............        90
Payment Lag Certificates..........        81
Plans.............................        90
pre-issuance accrued interest.....        81
Prepayment Assumption.............        71
Private Mortgage-Backed
  Securities......................        14
Prohibited Transactions Tax.......        86
PTE 83-1..........................        90
RCRA..............................        64
Regular Certificateholders........        75
Regular Certificates..............        74
Relief Act........................        65
REMIC Certificates................        74
REMICs............................        74
Residual Certificateholder........        82
Residual Certificates.............        74
Restricted Group..................        93
Single Family Certificates........        90
SMMEA.............................        93
Stripped ARM Obligations..........        72
Stripped Bond Certificates........        69
Stripped Coupon Certificates......        69
Subsidiary REMIC..................        74
Super-Premium Certificates........        76
Title V...........................        64
U.S. Person.......................        72
Underwriter Exemptions............        91


                        96

<PAGE>


                RESIDENTIAL ASSET SECURITIZATION TRUST 2000-A6
                                     ISSUER


                                  CWMBS, INC
                                   DEPOSITOR

[GRAPHIC OMITTED]




                           SELLER AND MASTER SERVICER



                                  $294,862,616
                                 (APPROXIMATE)

               MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2000-F




                             ---------------------
                             PROSPECTUS SUPPLEMENT
                            ---------------------
                           CREDIT SUISSE FIRST BOSTON



     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-F Mortgage Pass-Through Certificates
in any state where the offer is not permitted.


     Dealers will deliver a prospectus supplement and prospectus when acting as
underwriters of the Series 2000-F Mortgage Pass-Through Certificates and with
respect to their unsold allotments or subscriptions. In addition, all dealers
selling the Series 2000-F Mortgage Pass-Through Certificates will be required
to deliver a prospectus supplement and prospectus until November 22, 2000.



                                AUGUST 24, 2000




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