SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
Annual Report Pursuant to Section 13
or 15(d) of the Securities Exchange Act of 1934
for the fiscal year ended December 31, 1998
Commission File Number: 333-24489
Mortgage Capital Funding, Inc.
Issuer in Repscet of Multifamily/Commercial
Mortgage Pass-Through Certificates Series 1998-MC1
(Exact Name of registrant as specified in its charter)
Delaware 13-3408716
(State or Other Juris- (I.R.S. Employer
diction of Incorporation) Identification No.)
399 Park Avenue, New York, New York, 10004
(Address of Principal Executive Office)
212-559-6899
(Registrant's telephone number, including area code)
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 herein,
and will not be contained, to the best of 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.
Not applicable.
Aggregate market value of voting stock held by non-affiliates of
the Registrant as of December 31, 1998.
Not applicable.
Number of shares of common stock outstanding as of December 31,
1998.
Not applicable.
Table of Contents
PART I
Item 1. Business..................................................3
Item 2. Properties................................................3
Item 3. Legal Proceedings.........................................3
Item 4. Submission Of Matters To A Vote Of Security Holders.......3
PART II
Item 5. Market For Registrant's Common Equity And
Related Shareholder Matters.......................................3
Item 6. Selected Financial Data...................................3
Item 7. Management's Discussion And Analysis Of Financial Condition
And Results Of Operations...............................4
Item 8. Financial Statements And Supplementary Data...............4
Item 9. Changes In And Disagreements With Accountants On
Accounting And Financial Disclosure.....................4
PART III
Item 10. Directors And Executive Officers Of The Registrant.......4
Item 11. Executive Compensation...................................4
Item 12. Security Ownership Of Certain Beneficial Owners And
Management......................................4
Item 13. Certain Relationships And Related Transactions...4
PART IV
Item 14. Exhibits, Financial Statement Schedules And Reports
On Form 8-K.....................................4
Signatures................................................4
Exhibit Index.............................................4
PART I
ITEM 1. BUSINESS
This Annual Report on Form 10-K relates to the Trust Fund
formed, and the Commercial Mortgage Pass-Through Certificates,
Series 1998-MC1 issued, pursuant to a Pooling and Servicing
Agreement, dated as of April 1, 1998 (the "Pooling and Servicing
Agreement"), by and among Mortgage Capital Funding as sponsor,
Goldman Sacs Mortgage Company, As additional warranting party,
Ameresco Services, as master Servicer Criimi Mae Services Limited Partnership as
special servicer, LaSalle National Bank, as
Trustee and REMIC Administrator, and ABN AMRO Bank N.V., as
fiscal agent. The Class A-1, Class A-2, Class X, Class B, Class
C, Class D, Class E, Class F, Class G, Class J, Class K, Class L,
Class M and Class N Certificates have been registered pursuant
to the Act under a Registration Statement on Form S-3 (the
"Registration Statement").
Capitalized terms used herein and not defined have the same
meanings ascribed to such terms in the Pooling and Servicing
Agreement.
This Annual Report is being filed by the Trustee, in its capacity
as such under the Pooling and Servicing Agreement, on behalf of
Registrant. The information contained herein has been supplied
to the Trustee by one or more of the Borrowers or other third
parties without independent review or investigation by the
Trustee. Pursuant to the Pooling and Servicing Agreement, the
Trustee is not responsible for the accuracy or completeness of
such information.
ITEM 2. PROPERTIES
See Exhibits 99.1 and 99.2 hereto for Servicer's Annual
Statement of Compliance and Servicer s Independent Accountant's
Report on Servicer's servicing activities.
ITEM 3. LEGAL PROCEEDINGS
Except for claims arising in the ordinary course of business and
which are covered by liability insurance, there are no material
pending legal proceedings involving the Trust Fund, the Mortgages
comprising the Trust Fund or the Trustee, the Special Servicer or
the Servicer with respect to or affecting their respective duties
under the Pooling and Servicing Agreement.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS
No matters were submitted to a vote of Certificateholders during
the fiscal year covered by this report.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
There was one registered holder of the Certificate representing
an equity interest in the Trust as of December 31, 1997. To the
Registrant's knowledge, as of that date, there was no principal
market in which the Certificates representing an equity interest
in the Trust were traded.
ITEM 6. SELECTED FINANCIAL DATA
Not applicable.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF A FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
Not applicable.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Not applicable.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
The information required by Items 10, 11, 12 and 13 is not
applicable as the trust fund does not have directors or
officers and Certificateholders have no right to vote (except
with respect to required consents to certain amendments to the
Pooling and Servicing Agreement and upon certain events of
default) or control the Trust Fund.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS
ON FORM 8-K
(a)
1. Servicer's Annual Statement of Compliance for the period
ended 12/31/98.
2. Servicer's Independent Accountant's Report on Servicer's
servicing activities.
(b) All current Reports on Form 8-K for the Trust have been
filed as of 12/31/98.
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its by the undersigned thereunto
duly authorized.
LASALLE NATIONAL BANK, IN
ITS CAPACITY AS TRUSTEE UNDER
THE POOLING AND SERVICING
AGREEMENT ON BEHALF OF
Mortgage Capital Funding
REGISTRANT
By: /s/ Russell Goldenberg
Name: Russell Goldenberg
Title: Senior Vice President
Dated: March 30, 1999
EXHIBIT INDEX
Exhibit No. Description
99.1 Servicer's Annual Statement of Compliance
99.2 Servicer's Independent Accountants' Report on
Servicer's servicing activities
MORTGAGE CAPITAL FUNDING 1998-MC1
February 9, 1999
VIA CERTIFIED MAIL
RETURN RECEIPT REQUESTED
Mortgage Capital Funding, Inc.
399 Park Avenue, 3rd Floor
New York, New York 10043
Attention: Mortgage Finance
Ladies & Gentlemen:
Reference is made to the Pooling and Servicing Agreement
dated as of April 1, 1998, among Mortgage Capital Funding,
Inc., as Sponsor, Citicorp Real Estate, Inc., as Mortgage
Loan Seller, Goldman Sachs Mortgage Company, as Additional
Warranting Party, AMRESCO Capital, L.P., as Additional
Warranting Party, AMRESCO Services, L.P., ("ASLP") as
Master Servicer, CRIIMI MAE Services Limited Partnership,
as Special Servicer, LaSalle National Bank, as
Trustee and REMIC Administrator, and ABN AMRO Bank N.V.,
as Fiscal Agent, entered into in connection with
Multifamily Commercial Mortgage Pass-Through Certificates,
Series 1998-MC1 (the "PSA").
As Senior Vice President of AMRESCO, I have delegated to
specified officers ("Officers") the responsibility for
reviewing and monitoring the activities of AMRESCO, and of
our performance under the PSA.
Accordingly, pursuant to Section 3.13 of the PSA and in
accordance with certifications made to me by each of the
Officers, AMRESCO certifies the following:
A review of the activities of AMRESCO for the period
from April 1, 1998 to December 31, 1998, and of its
performance under this PSA has been made under the
supervision of the Officers, who have in turn been under
my supervision;
To the best of my knowledge and the Officers' knowledge,
based on such review, AMRESCO has fulfilled its obligations
as Servicer in all material respects under the PSA
throughout the period from April 1, 1998 to December 31, 1998;
Mortgage Capital Funding, Inc.
February 9, 1999
Page 2
AMRESCO did not use any sub-servicers, other than affiliates
of AMRESCO, with respect to its duties under this PSA during
the period from April 1, 1998 to December 31, 1998; and
To the best of my knowledge and the Officers' knowledge,
AMRESCO has not received any notice regarding the
qualification, or challenging the status, of the Series
1998-MC1 as a REMIC from the Internal Revenue Service
or any other governmental agency or body.
Please refer to the enclosed independent accountants' report
dated January 30, 1999, delivered pursuant to Section 3.14 of
the PSA, which discusses the results of their review of our
activities under this PSA and which is incorporated herein by
reference.
Very truly yours,
Daniel B. Kirby
Senior Vice President
AMRESCO Management, Inc., in its capacity
as Master Servicer under the PSA with respect to the
period from April 1, 1998 to December 31, 1998, and
AMRESCO Services, L.P.
Enclosures
cc: Citibank, N.A.
425 Park Avenue
New York, New York 10043
Attention: Stephen E. Dietz, Esq.
Associate General Counsel
Citicorp Real Estate, Inc.
399 Park Avenue
New York, New York 10043
Attention: Mr. Richard L. Jarocki, Jr.
Goldman Sachs Mortgage Company
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Attention: Mr. Rolf Edwards
Mortgage Capital Funding, Inc.
February 9, 1999
Page 3
cc: AMRESCO Capital, L.P.
700 North Pearl Street
Suite 2400, L.B. No. 342
Dallas, Texas 75201
Attention: Mr. Edward Hurley
CRIIMI MAE Services Limited Partnership
1120 Rockville Pike
Rockville, Maryland 20852
Attention: Mr. Brian Hanson
CRIIMI MAE Services Limited Partnership
1120 Rockville Pike
Rockville, Maryland 20852
Attention: David Iannarone, Esq.
LaSalle National Bank
135 South LaSalle Street
Suite 1625
Chicago, Illinois 60674-4107
Attention: ABS Group - MCFI -
Series 1998-MC1
ABN AMRO Bank, N.V.
c/o 135 South LaSalle Street
Suite 1625
Chicago, Illinois 60674-4107
Attention: ABS Group - MCFI -
Series 1998-MC1
Standard & Poor's Ratings Services
26 Broadway, 10th Floor
New York, New York 10004
Attention: CMBS Surveillance
Mortgage Capital Funding, Inc.
February 9, 1999
Page 4
Fitch IBCA, Inc.
One State Street Plaza
New York, New York 10004
Attention: CMBS Surveillance
Weil, Gotshal & Manges, LLP
767 Fifth Avenue
New York, New York 10153-0114
Attention: Paul T. Cohn, Esq.
INDEPENDENT ACCOUNTANTS' REPORT
To the Board of Directors of AMRESCO Services, L.P.:
We have examined management's assertion about AMRESCO Services,L.P.'s (the
"Company") (a wholly owned subsidiary of AMRESCO, INC.) compliance with the
Company's servicing standards identified in the Appendix as of and for the
year ended December 31, 1998, included in the accompanying management
assertion. Such standards were established by the Company's management based
on the Mortgage Bankers Association of America's Uniform Single Attestation
Program for Mortgage Bankers ("USAP"). Management is responsi
e with these servicing standards. 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 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
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 the Company's compliance with the servicin
reements.
In our opinion, management's assertion that AMRESCO Services, L.P. complied
with its established servicing standards identified in the Appendix as of and
for the year ended December 31, 1998, is fairly stated, in all material
respects.
/s/ DELOITTE & TOUCHE LLP
February 4, 1999
1. Reconciliations shall be prepared on a monthly basis for all custodial
bank accounts and related bank clearing accounts. These reconciliations shall
:
* be mathematically accurate;
* be prepared within forty-five (45) calendar days after the cutoff date;
* be reviewed and approved by someone other than the person who prepared the
reconciliation; and
* document explanations for reconciling items. These reconciling items shall
be resolved within ninety (90) calendar days of their original
identification.
2. Each custodial account shall be maintained at a federally insured
depository institution in trust for the applicable investor.
3. Escrow funds held in trust for a mortgagor shall be returned to the
mortgagor within thirty (30) calendar days of payoff of the mortgage loan.
II. MORTGAGE PAYMENTS
1. Scheduled mortgage payments shall be deposited into the custodial bank
accounts and related bank clearing accounts within two business days of
receipt.
2. Scheduled 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.
3. Scheduled mortgage payments shall be allocated to principal, interest,
insurance, taxes or other escrow items in accordance with the mortgagor's
loan documents.
4. Mortgage payments identified as loan payoffs or other nonscheduled
payments shall be allocated in accordance with the mortgagor's loan documents.
III. DISBURSEMENTS
1. Disbursements made via wire transfer on behalf of a mortgagor or investor
shall be made only by authorized personnel.
2. Disbursements made on behalf of a mortgagor or investor shall be posted
within two business days to the mortgagor's or investor's records maintained
by the servicing entity.
3. Tax and insurance payments shall be made on or before the penalty or
insurance policy expiration dates, as indicated on tax bills and insurance
premium notices, respectively, provided that such support has been received
by the servicing entity at least thirty (30) calendar days prior to these
dates.
4. Any late payment penalties paid in conjunction with the payment of any tax
bill or insurance premium notice shall be paid from the servicing entity's
funds and not charged to the mortgagor, unless the late payment was due to
the mortgagor's error or omission.
5. Amounts remitted to investors per the servicer's investor reports shall
agree with canceled checks, or other form of payment, or custodial bank
statements.
6. Unused checks shall be safeguarded so as to prevent unauthorized access.
IV. INVESTOR ACCOUNTING AND REPORTING
1. The servicing entity's investor reports shall agree with, or reconcile to,
investors' records on a monthly basis as to the total unpaid principal
balance and number of loans serviced by the servicing entity.
V. MORTGAGOR LOAN ACCOUNTING
1. The servicing entity's mortgage loan records shall agree with, or
reconcile to, the records of mortgagors with respect to the unpaid principal
balance on a monthly basis.
2. Adjustments on ARM loans shall be computed based on the related mortgage
note and any ARM rider.
3. Escrow accounts shall be analyzed, in accordance with the mortgagor's loan
documents, on an annual basis or as required by the servicing agreement.
4. Interest on escrow accounts shall be paid, or credited, to mortgagors in
accordance with the servicing agreements.
VI. DELINQUENCIES
1. Records documenting collection efforts shall be maintained during the
period a loan is in default and shall be updated at least monthly. Such
records shall describe the entity's activities in monitoring delinquent loans
including, for example, phone calls, letters and mortgage payment
rescheduling plans.
VII. INSURANCE POLICIES
1. A fidelity bond and errors and omissions policy shall be in effect on the
servicing entity throughout the reporting period in the amount of coverage
represented to investors in management's assertion.
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