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, 1997 333-24489
Mortgage Capital Funding, Inc.
(Issuer in respect of Mortgage Pass-Through
Certificates, Series 1997-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) 793-5880
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. [X].
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
<PAGE>
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, 1997,
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"), Citicorp Real Estate, Inc. ("CREI"), as mortgage
loan seller, NationsBanc Mortgage Capital Corporation ("NMCC"), as Additional
Warranting Party, CRIIMI MAE Services Limited Partnership ("CRIIMI MAE"), as
master servicer (the "Master Servicer") and as special servicer (the "Special
Servicer") or the trust (the "Trust") evidenced by the registrant's Mortgage
Pass-Through Certificates, Series 1997-MC1 (the "Certificates"), or LaSalle
National Bank, as trustee (the "Trustee") or REMIC administrator (the "REMIC
Administrator"), or ABN AMRO Bank N.V. as fiscal agent (the "Fiscal Agent") for
the Certificates, other than routine litigation incidental to the duties of the
Sponsor, CREI, NMCC, the Master Servicer, the Special Servicer, the Trustee, the
REMIC Administrator or the Fiscal Agent under the Pooling and Servicing
Agreement (the "Pooling Agreement") dated as of June 1, 1997, between the
Sponsor, CREI, as mortgage loan seller, NMCC, as Additional Warranting Party,
the Master Servicer, the Special Servicer, the Trustee, the REMIC Administrator
and the Fiscal Agent.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
<PAGE>
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder's
Matters.
(a)
(1) 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.
(2) As of December 31, 1997, the number of record holders of the
registrant's Mortgage Pass-Through Certificates, Series 1997-MC1 was 5.
(3) Omitted pursuant to the 12(h) Exemption.
(b) Not applicable.
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 7A. Quantitive and Qualitive Disclosure re Market Risk.
Not applicable.
Item 8. Financial Statements and Supplementary Data.
Omitted pursuant to the 12(h) Exemption.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
None.
<PAGE>
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, 1997, 100% of all the publicly offered Mortgage
Pass-Through Certificates, Series 1997-MC1 were held of record by Cede & Co., 55
Water Street, New York, NY 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 registrant has been informed that as of December 31, 1997,
CRIIMI MAE was the beneficial owner of Certificates issued by the Trust with an
outstanding principal amount of $19,938,252 (representing 3% of the
Certificates, 75.6% of the Class F Certificates, 60% of the Class G Certificates
, 48% of the Class H Certificates, 21% of the Class J Certificates and 100% of
the Class K Certificates). CRIIMI MAE 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 0.170% to 0.355% per annum of the
outstanding principal balance of each Mortgage Loan (with an initial weighted
average rate applicable to such Mortgage Loans of 0.208% per annum). CRIIMI MAE
as Master Servicer is also entitled to receive certain other fees as specified
in the Pooling Agreement. CRIIMI MAE as Special Servicer will be entitled to
certain Standby Fees, Special Servicing Fees, Workout Fees and Liquidation Fees
and 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. 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. In 1997, CRIIMI MAE received $688,588.06 for its services
as Master Servicer and $0 for its services as Special Servicer.
(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.
<PAGE>
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 CRIIMI MAE 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 with respect to Special Servicer 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, Reports on Form 8-K were filed by the registrant as follows: Reports on
Form 8-K dated October 20, 1997, November 20, 1997 and December 22, 1997 were
filed in response to Item 5 (Other Events) of Form 8-K with respect to
information contained in Distribution Date Statements delivered to
Certificateholders for the Distributions Dates occurring in October, November
and December, 1997, respectively.
(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 June 1, 1997 among the
Sponsor, CREI, as Mortgage Loan Seller, NMCC, as Additional Warranting Party,
the Master Servicer, the Special Servicer, LaSalle National Bank, as Trustee and
REMIC Administrator, and ABN AMRO Bank N.V., as Fiscal Agent, has been
previously filed in a Report on Form 8-K dated July 1, 1997.
(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.
<PAGE>
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, Series1997-MC1)
(Registrant)
By: /s/ Richard L. Jarocki, Jr
Richard L. Jarocki, Jr.
President
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 30, 1998.
Signature Capacity
/s/ Richard L. Jarocki, Jr President and Director
Richard L. Jarocki, Jr. (Principal Executive Officer)
/s/ Theresa D. DeGuisto Vice President and Treasurer
Theresa D. DeGuisto (Principal Financial and
Accounting Officer)
/s/ Frank Forelle Vice President and Director
Frank Forelle
<PAGE>
EXHIBIT INDEX
Exhibit No.
99(a)(1) Annual Statement of Compliance, pursuant to Pooling Agreement and
participation agreements referred to therein.
Delivered by CRIIMI MAE Services Limited Partnership 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 1997.
Exhibit 99(a)(1)
MASTER SERVICER AND SPECIAL SERVICER
ANNUAL STATEMENT AS TO COMPLIANCE
OFFICER'S CERTIFICATE
Re: Mortgage Capital Funding, Inc.
Multifamily/Commercial Mortgage Pass-Through Certificates
Series 1997-MC1 (the "Trust")
As an authorized officer of CRIIMI MAE Services Limited Partnership, Master
Servicer and Special Servicer for the Trust, I hereby certify that (i) a review
of the activities and performance of the Master Servicer and Special Servicer
under the Pooling and Servicing Agreement dated June 1, 1997 (the "Agreement"),
for the period ending December 31, 1997, has been made under my supervision;
(ii) to the best of my knowledge, based on such review, the Master Servicer and
the Special Servicer have fulfilled all of their obligations in all material
respects under this Agreement throughout the aforementioned period; and (iii) no
notice has been received regarding the qualification or status as a REMIC of, or
otherwise asserting a tax (other than ad valorem real property taxes or other
similar taxes on REO property) on the income or assets of, any portion of the
Trust Fund from the Internal Revenue Service or from any other governmental
agency or body.
CRIIMI MAE SERVICES LIMITED PARTNERSHIP
By: CRIIMI MAE Services, Inc.,
Its general partner
/s/ Maribeth Stahl
By: Maribeth Stahl
Vice President
March 9, 1998
Exhibit 99(a)(2)
ARTHUR ANDERSEN LLP
INDEPENDENT ACCOUNTANT'S REPORT
To the Partners of CRIIMI MAE Services Limited Partnership:
We have examined management's assertion about CRIIMI MAE Services Partnership's
compliance with the minimum servicing standards identified in the Mortgage
Bankers Association of America's Uniform Single Attestation Program for Mortgage
Bankers (USAP) and that CRIIMI MAE Services Limited Partnership had in effect a
fidelity bond and errors and omissions policy in the amount of $20 million as of
and for the year ended December 31, 1997 included in the accompanying
Management's Assertion. Management is responsible for CRIIMI MAE Services
Limited Partnership's compliance with those minimum servicing standards and for
maintaining a fidelity bond and errors and omissions policy. Our responsibility
is to express an opinion on management's assertion based on our examination.
Our examination was made in accordance with standards established by the
American Institute of Certified Public Accountants and ,accordingly, included
examining, on a test basis, evidence about CRIIMI MAE Services Limited
Partnership's compliance with the minimum servicing standards 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 CRIIMI MAE Services
Limited Partnership's compliance with the minimum servicing standards.
In our opinion, management's assertion that CRIIMI MAE Services Limited
Partnership complied with the aforementioned minimum servicing standards and
that CRIIMI MAE Services Limited Partnership had in effect a fidelity bond and
errors and omissions policy in the amount of $20 million as of and for the year
ended December 31, 1997 is fairly stated, in all material aspects.
/s/ Arthur Andersen LLP
Washington, D.C.
February 27, 1998
<PAGE>
CRIIMI MAE SERVICES
LIMITED PARTNERSHIP
MANAGEMENT ASSERTION
We, as members of management of CRIIMI MAE Services, L.P. (the Partnership), are
responsible for complying with the minimum servicing standards as set forth in
the Mortgage Bankers Association of America's (MBA) Uniform Single Attestation
Program for Mortgage Bankers (USAP). We are also responsible for establishing
and maintaining effective internal control over compliance with these standards.
We have performed an evaluation of the Partnership's compliance with the minimum
servicing standards as set forth in the USAP as of December 31, 1997 and for the
year then ended. Based on this evaluation, we assert that during the year ended
December 31, 1997 the Partnership complied with the minimum servicing standards
set forth in the USAP.
As of and for this same period, the Partnership had in effect a fidelity bond
and errors and omissions policy in the amount of $20 million.
/s/ Vicki Speights
Vicki Speights
Vice President, Mortgage Servicing
February 27, 1998
/s/ Brian Hanson
Brian Hanson
Group Vice President
February 27, 1998
/s/ Cynthia O. Azarra
Cynthia O. Azarra
Senior Vice President and Chief
Financial Officer
February 27, 1998
/s/ Dawn E. Bowman
Brian Hanson
Vice President/Controller
February 27, 1998
Exhibit 99(d)
(i) Class A-1 Certificates received distributions of principal in the aggregate
amount of $3,017,997.78 in 1997. No other Class received any distributions of
principal in 1997.
(ii) All Classes received distributions of interest in 1997.
(iii) Aggregate collections on the mortgage loans for 1997 $32,122,371.42
(iv) No delinquency advances were made in 1997.
(vii) No mortgage loan was delinquent in 1997
(ix) Same as (ii) above.
(x) Same as (ii) above.
(xiv) The Trust Fund suffered no losses or additional expenses in 1997.
(xvii)
Master Servicer Compensation for $688,588.06
1997 (including fees paid to
primary servicers)
Special Servicer Compensation for $0
1997
