SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[X] Annual Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
[ ] Transition Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the fiscal year ended Commission File Number
December 31, 1996 33-63924
Mortgage Capital Funding, Inc.
(Issuer in respect of Mortgage Pass-Through
Certificates, Series 1996-MC1)
(Exact name of registrant as specified in its charter)
Delaware 13-3408716
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
399 Park Avenue, 3rd Floor
New York, New York 10043
(Address of principal (Zip Code)
executive offices)
Registrant's telephone number, including area code: (212) 559-6893.
Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of the Act: NONE
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X . No .
----- -----
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. Yes X . No .
----- -----
State the aggregate market value of the voting stock held by
non-affiliates of the registrant. The aggregate market value shall be computed
by reference to the price at which the stock was sold, or the average bid and
asked prices of such stock, as of a specified date within 60 days prior to the
date of filing.
NOT APPLICABLE
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PART I
Item 1. Business.
Omitted pursuant to a request to the Securities and Exchange Commission
for an exemption of Mortgage Capital Funding, Inc. ("MCFI" or the "registrant")
pursuant to Section 12(h) of the Securities Exchange Act of 1934 (the "12(h)
Exemption"), filed by Thacher Proffitt & Wood on behalf of the registrant on
October 17, 1995.
Item 2. Properties.
The Trust did not acquire any mortgaged property in connection with the
foreclosure of a defaulted Mortgage Asset or otherwise. As of December 31, 1996,
no mortgage loan had a principal balance greater than 10% of the aggregate
principal balance of the Mortgage Pool.
Item 3. Legal Proceedings.
The registrant knows of no material pending legal proceeding involving
the Mortgage Properties, or to the extent related to the Trust Fund, any of
MCFI, the sponsor (the "Sponsor"), Citibank, N.A. ("Citibank"), as mortgage loan
seller, GMAC Commercial Mortgage Corporation ("GMAC") as master servicer (the
"Master Servicer"), and as successor in interest to Hanford/Healy Asset
Management Company, as special servicer (the "Special Servicer") or the trust
(the "Trust") evidenced by the registrant's Mortgage Pass-Through Certificates,
Series 1996-MC1 (the "Certificates"), or State Street Bank and Trust Company, as
trustee (the "Trustee") or REMIC administrator (the "REMIC Administrator"), for
the Certificates, other than routine litigation incidental to the duties of the
Sponsor, Citibank, the Master Servicer, the Special Servicer or the Trustee
under the Pooling and Servicing Agreement (the "Pooling Agreement") dated as of
July 1, 1996 between the Sponsor, Citibank, as mortgage loan seller, the Master
Servicer, the Special Servicer and the Trustee.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
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PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder's
Matters.
(a) There is no established public trading market for the Certificates.
To the best of the registrant's knowledge, there are no reported high and low
bid quotations for any of the Certificates.
(b) As of December 31, 1996, the number of record holders of the
registrant's Mortgage Pass- Through Certificates, Series 1996-MC1: 12.
(c) Omitted pursuant to the 12(h) Exemption.
Item 6. Selected Financial Data.
Omitted pursuant to the 12(h) Exemption.
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operation.
Omitted pursuant to the 12(h) Exemption.
Item 8. Financial Statements and Supplementary Data.
Omitted pursuant to the 12(h) Exemption.
Item 9. Disagreements on Accounting and Financial Disclosure.
None.
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PART III
Item 10. Directors and Executive Officers of the Registrant.
Omitted pursuant to the 12(h) Exemption.
Item 11. Executive Compensation.
Omitted pursuant to the 12(h) Exemption.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
(a) As of December 31, 1996, 100% of all the publicly offered Mortgage
Pass-Through Certificates, Series 1996-MC1 were held as of record by Cede & Co.,
55 Water Street, New York, New York 10041.
(b) Omitted pursuant to the 12(h) Exemption.
(c) Omitted pursuant to the 12(h) Exemption.
Item 13. Certain Relationships and Related Transactions.
(a)(1) Omitted pursuant to the 12(h) Exemption.
(a)(2) Omitted pursuant to the 12(h) Exemption.
(a)(3) The Issuer has been informed that GMAC Commercial Mortgage
Corporation as of December 31, 1996, was beneficial owner of Certificates issued
by the Trust with an outstanding principal amount of $18,088,000 and a Notional
Amount of $242,000,000. GMAC Commercial Mortgage Corporation serves as Master
Servicer and Special Servicer under the Pooling Agreement for which it receives
a master servicing fee, equal, on a per annum basis, to 0.14% to 2.005% per
annum of the outstanding principal balance of each Mortgage Loan (with an
initial weighted average rate applicable to such Mortgage Loans of 0.234% per
annum). GMAC as Master Servicer is also entitled to retain all assumption and
modification fees, late payment charges and penalty interest in excess of
interest at the related Mortgage Rate received on or with respect to Mortgage
Loans serviced thereby and certain other fees as specified in the Pooling
Agreement. In 1996, GMAC received a fee for these services of $174,002.03
(including the Standby Fee payable to the Special Servicer) net of sub-servicing
and trustee fees. The Special Servicer will be entitled to certain Standby Fees,
Special Servicing Fees, Workout Fees and Liquidation Fees. The Standby Fee
accrues as to each Mortgage Loan at a rate of .005% per annum which will be
payable out of the Master Servicing Fee. For 1996, the Special Servicer did not
receive any Special Servicing Fees, Workout Fees or Liquidation Fees.
(a)(4) None.
(b) Omitted pursuant to the 12(h) Exemption.
(c) Omitted pursuant to the 12(h) Exemption.
(d) Omitted pursuant to the 12(h) Exemption.
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PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.
(a) (1) Annual Statement of Compliance, pursuant to Pooling
Agreement and participation agreements referred to therein.
Delivered by GMAC Commercial Mortgage Corporation as Master
Servicer and Special Servicer.
(2) Annual Servicing Report from independent public
accountants, pursuant to Pooling Agreement and participation agreements referred
to therein.
(i) Delivered by Master Servicer.
(ii) Omitted as no Mortgage Loans became Specially Serviced
Mortgage Loans or REO Properties during the time period covered by this
10-K.
(b) Reports on Form 8-K. During the last quarter of the prior calendar
year, no Reports on Form 8-K were filed by the registrant.
(c) (1) Articles of incorporation of MCFI have been previously
filed with the Securities and Exchange Commission.
(2) By-laws of MCFI have been previously filed with the
Securities and Exchange Commission.
(3) Pooling and Servicing Agreement dated as of July 1, 1996
among the Sponsor, Citibank, N.A. as Seller, the Master Servicer, Hanford/Healy
Asset Management Company, as Special Servicer, and State Street Bank and Trust
Company as Trustee and REMIC Administrator has been previously filed in a Report
on Form 8-K dated July 10, 1996.
(d) As required pursuant to the 12(h) Exemption, information
aggregating certain data reported with respect to each distribution date will be
set forth as Exhibit 99(d) hereto.
SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO
SECTION 15(d) OF THE ACT BY REGISTRANTS WHICH HAVE NOT REGISTERED SECURITIES
PURSUANT TO SECTION 12 OF THE ACT.
No annual report covering the registrant's last fiscal year or proxy material
with respect to any annual or other meeting of security holders has been sent to
security holders.
5
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SIGNATURES
Pursuant to the requirements of Section 13 and 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
SIGNATURES
Pursuant to the requirements of Section 13 and 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
MORTGAGE CAPITAL FUNDING, INC.
(Issuer in respect of Mortgage
Pass-Through Certificates, Series 1996-MC1)
(Registrant)
By: /s/ Robert E. Woods
----------------------------
Robert E. Woods
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant in
the capacities indicated on March 28, 1997.
Signature Capacity
--------- --------
/s/ Robert E. Woods Chairman and Chief Executive Officer
- --------------------------- (Principal Executive Officer)
Robert E. Woods
/s/Theresa D. DeGuisto Vice President and Treasurer
- --------------------------- (Principal Financial and
Theresa D. DeGuisto Accounting Officer)
/s/ Carol Ann Arvon Director
- ---------------------------
Carol Ann Arvon
/s/ J. Theodore Borter Director
- ---------------------------
J. Theodore Borter
/s/ Frank Forelle Director
- ---------------------------
Frank Forelle
/s/ Richard L. Jarocki, Jr. Director
- ---------------------------
Richard L. Jarocki, Jr.
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<PAGE>
EXHIBIT INDEX
Exhibit No.
99(a)(1) Annual Statement of Compliance, pursuant to Pooling Agreement and
participation agreements referred to therein.
Delivered by GMAC Commercial Mortgage Corporation as Master Servicer
and Special Servicer.
99(a)(2) Annual Servicing Report from independent public accountants,
pursuant to Pooling Agreement and participation agreements referred
to therein.
Delivered by Master Servicer.
99(d) Aggregate data with respect to distributions made in 1996.
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EXHIBIT 99(a)(1)
State Street Bank and Trust Company
Corporate Trust Department
Two International Place, 5th Floor
Boston, Massachusetts 02110
MORTGAGE CAPITAL FUNDING, INC. SERIES 1996-MC1
OFFICER'S CERTIFICATE
ANNUAL COMPLIANCE STATEMENT
for the Year Ended 12/31/96
Pursuant to the requirements of Section 3.13 of that certain Pooling and
Servicing Agreement (PSA) governing the referenced Trust, it is hereby certified
that (i) the undersigned has completed a review of the activities and
performance of GMAC Commercial Mortgage Corporation (GMACCM), as Master Servicer
and Special Servicer, related to its obligations under the PSA for the current
calendar year; (ii) to the best of the undersigned's knowledge on the basis of
that review GMACCM as Master Servicer and Special Servicer has in all material
respects fulfilled all of its obligations under the PSA throughout such calendar
year; and (iii) GMACCM as Master Servicer and Special Servicer has received no
notice regarding qualification, or challenging the status, of any portion of the
Trust Fund as a REMIC from the Internal Revenue Service or any other
governmental agency.
/s/ Ann W. Cassidy 3/10/97
- ------------------------------------------------
Ann W. Cassidy, Sr. Vice President/Date
/s/ Gary Severyn 3/11/97
- ------------------------------------------------
Gary Severyn, Vice President/Date
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Exhibit 99(a)(2)
Deloitte &
Touche LLP __________________________________________________________
Twenty-Fourth Floor Telephone: (215) 246-2300
1700 Market Street Facsimile: (215) 569-2441
Philadelphia, Pennsylvania 19103-3984
INDEPENDENT ACCOUNTANTS' REPORT
To the Board of Directors of
GMAC Commercial Mortgage Corporation:
We have examined management's assertion about GMAC Commercial Mortgage
Corporation's (the "Company") compliance with its established minimum master
servicing standards (herein "Master Servicing Policy") identified and included
in the accompanying management assertion as of and for the year ended December
31, 1996, dated March 3, 1997. Management is responsible for the Company's
compliance with the Master Servicing Policy. Our responsibility is to express an
opinion on management's assertion about the Company's compliance based on our
examination.
Our examination was made in accordance with the standards established by the
American Institute of Certified Public Accountants and, accordingly, included
examining, on a test basis, evidence about the Company's compliance with the
Master Servicing Policy and performing such other procedures as we considered
necessary in the circumstances. We believe that our examination provides a
reasonable basis for our opinion. Our examination does not provide a legal
determination on the Company's compliance with the Master Servicing Policy.
In our opinion, management's assertion that the company complied with the
aforementioned Master Servicing Policy as of and for the year ended December 31,
1996 is fairly stated, in all material respects.
/s/ Deloitte & Touche LLP
March 3, 1997
- ---------------
Deloitte Touche
Tohmatsu
International
- ---------------
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<PAGE>
Deloitte & Touche LLP
Page 3
March 3, 1997
March 3, 1997
Deloitte & Touche LLP
1700 Market Street
Philadelphia, PA 19103-3984
Gentlemen:
DIRECT LOAN SERVICING
We have separately provided to you our written assertions that as of and for the
year ended December 31, 1996, GMAC Commercial Mortgage Corporation (the
"Company") complied, in all material respects, with their Minimum Servicing
Standards for loans directly serviced by the Company in our report dated
February 28, 1997. The Company's Minimum Servicing Standards were derived from
the Mortgage Banker's Association of America's Uniform Single Attestation
Program for Mortgage Bankers.
MASTER LOAN SERVICING
The Company as master servicer, performs certain functions with respect to
servicing loans, however, the direct loan servicing functions are performed by
various subservicers. For those loans included in the Pooling and Servicing
Agreements listed in the attached Exhibit A, the Company has complied with their
Master Servicing Standards enumerated below, as of and for the year ended
December 31, 1996.
GMAC COMMERCIAL MORTGAGE CORPORATION
MINIMUM MASTER SERVICING STANDARDS
I. CUSTODIAL BANK ACCOUNTS
1. Reconciliations shall be prepared on a monthly basis for all
custodial bank accounts and related bank clearing accounts.
These reconciliations shall:
(a) be mathematically accurate;
(b) be prepared within forty-five (45) calendar days after
the cutoff date, but in any event in accordance with the
applicable servicing agreements;
(c) be reviewed and approved by someone other than the
person who prepared the reconciliation; and
(d) explanations for reconciling items shall be documented
and shall be resolved within ninety (90) calendar days
of their original identification.
2. Funds of the servicing entity shall be advanced as specified in
the applicable servicing agreements in cases where there is
potential for an overdraft in an investor's account or a
<PAGE>
request letter has been received from a subservicer for a
servicing advance stipulated by the subservicing agreement.
3. All cash for each custodial account shall be maintained at a
federally insured depository institution in trust for the
applicable investor in accordance with the applicable servicing
agreement requirements for bank ratings.
II. MORTGAGE PAYMENTS
1. Mortgage payments shall be deposited into the custodial bank
accounts and related bank clearing accounts within two business
days of receipt from the subservicer.
2. Mortgage payments made in accordance with the mortgagor's loan
documents shall be posted to the applicable mortgagor records
within two business days of receipt from the subservicer.
III. DISBURSEMENTS
1. Remittances made via wire transfer on behalf of a mortgagor or
investor shall be made only by authorized personnel.
2. Amounts remitted to investors per the servicer's investor
reports shall agree with canceled checks, or other form of
payment, or custodial bank statements.
IV. INVESTOR ACCOUNTING AND REPORTING
1. Monthly investor reports shall be sent in a timely manner
listing loan level detail of payments and balances, and all
other data required by the servicing agreements.
V. INSURANCE POLICIES
1. A fidelity bond and errors and omissions policy shall be in
effect on the Company throughout the reporting period in the
amounts following: General Motors Corporation fidelity bond of
$150 million, a GMAC Commercial Mortgage Corporation errors and
omissions policy of $30 million and a GMAC Commercial Mortgage
Corporation excess miscellaneous professional liability policy
of $30 million.
VI. MONITORING OF SUBSERVICER COMPLIANCE
1. Within 120 days of a subservicer's year-end, the subservicer's
management assertions about compliance with minimum servicing
standards which were derived from the Mortgage Bankers
Association of America's Uniform Single Attestation Program for
Mortgage Bankers and the Independent Accountants' Report on
management's assertions shall be reviewed, and if material
exceptions are found, appropriate corrective action will be
taken.
2. An on-site subservicer review for all subservicers with
servicing principal amounting to 10% of the applicable pool
balance shall be performed annually.
3. An annual certification from each subservicer stating that the
subservicer is in compliance with its subservicer agreement
shall be obtained by April 30th for the previous calendar year.
/s/ Ann W. Cassidy
- ---------------------
Ann W. Cassidy
Senior Vice President
/s/ Gary Severyn
- ---------------------
Gary Severyn
Vice President
<PAGE>
EXHIBIT A
Mortgage Capital Funding, Inc., Series 1996-MC1
Mortgage Capital Funding, Inc., Series 1996-MC2
LB Commercial Conduit Mortgage Trust II, Series 1996-C2
LB Commercial Conduit Mortgage Trust, Series 1995-C2
LTC Commercial Mortgage Pass-Through Certificates, Series 1996-1
GMAC Commercial Mortgage Securities, Inc., Series 1996-C1
GMAC Commercial Mortgage Securities, Inc., Series 1996-C2
Mortgage Capital Funding, Inc., Series 1993-C1
Citibank, N.A., Series 1994-1
Citibank, N.A., Series 1994-C2
Mortgage Capital Funding, Inc., Series 1994-MC1
Mortgage Capital Funding, Inc., Series 1995-MC1
Exhibit 99(d)
(i) Principal Received for 1996
Class A-1 126,073.78
Class A-2A 3,694,107.75
No other class received any distributions of principal.
(ii) Interest Paid for 1996
Class X-1 215,306.41
Class X-2 1,920,982.57
Class A-1 788,331.37
Class A-2A 4,557,407.50
Class A-2B 4,793,456.65
Class B 476,304.15
Class C 1,018,972.50
Class D 627,055.00
Class E 541,630.85
Class F 232,122.90
Class G 969,986.90
Class H 429,590.00
Class J 85,903.75
Class K 315,135.45
Class R-II 1,849.39
(iii) Aggregate collections on the mortgage loans
distributed to certificateholders for 1996 $20,794,216.92
(iv) No delinquency advances were made in 1996.
(vii) No mortgage loan were delinquent in 1996
(ix) Same as (ii) above.
(x) Same as (ii) above.
(xiv) The Trust Fund suffered no losses or additional expenses in 1996.
(xvii)
Master Servicer Compensation for 1996 $424,347.49
(including fees paid to primary servicers)
Special Servicer Compensation for 1996 $ 10,023.37
