SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Pursuant to Section 13 or 15 (d)
of the Securities Exchange Act of 1934
Date of Report: June 30, 1997
MORSERV, INC.
----------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 33-76724 13-3784934
--------------- --------------- -------------------
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
343 Thornhall Street, Edison, New Jersey 08837
---------------------------------------- --------
(Address of principal executives offices) Zip Code
(909) 205-6000
----------------------------------------------------
(Registrant's telephone number, including area code)
<PAGE>
Item 5. Other Events
On or about April 14, 1997, MorServ, Inc. (the "Company") received an
Officer's Certificate, and on or about March 18, 1997, the Company received a
Report of Independent Accountants, required by Sections 5.25 and 5.26,
respectively, of each of (i) the Pooling and Servicing Agreement for the
Series 1996-1 Multi-Class Mortgage Pass-Through Certificates entered into by
the Company, The Chase Manhattan Bank, as Master Servicer, and Norwest Bank
Minnesota, N.A. as Trustee (the "Series One Pooling and Servicing Agreement")
and (ii) the Pooling and Servicing Agreement for the Series 1996-2 Multi-Class
Mortgage Pass-Through Certificates entered into by the Company, Chase
Manhattan Mortgage Corporation, as Master Servicer, and Citibank, N.A., as
Trustee (the "Series Two Pooling and Servicing Agreement").
Copies of each of the Officer's Certificates and the Report of Independent
Accountants required by the Series One Pooling and Servicing Agreement are
being filed as Exhibits 20.1 and 20.2, respectively, to this Current Report on
Form 8-K. Copies of each of the Officer's Certificates and the Report of
Independent Accountants required by the Series Two Pooling and Servicing
Agreement are being filed as Exhibits 20.3 and 20.4 respectively, to this
Current Report on Form 8-K.
Item 7 (c). Exhibits Description
-------- -----------
20.1 Officer's Certificate, dated April 14, 1997,
required by Section 5.25 of the Series One
Pooling and Servicing Agreement.
20.2 Report of Independent Accountant, dated
March 28, 1997, required by Section 5.26
of the Series One Pooling and Servicing
Agreement.
20.3 Officer's Certificate, dated April 14, 1997,
required by Section 5.25 of the Series Two
Pooling and Servicing Agreement.
20.4 Report of Independent Accountants, dated
March 28, 1997, required by Section 5.26 of
the Series Two Pooling and Servicing
Agreement.
<PAGE>
INDEX TO EXHIBITS
-----------------
Exhibits Description
-------- -----------
20.1 Officer's Certificate, dated April 14, 1997,
required by Section 5.25 of the Series One
Pooling and Servicing Agreement.
20.2 Report of Independent Accountant, dated
March 28, 1997, required by Section 5.26
of the Series One Pooling and Servicing
Agreement.
20.3 Officer's Certificate, dated April 14, 1997,
required by Section 5.25 of the Series Two
Pooling and Servicing Agreement.
20.4 Report of Independent Accountants, dated
March 28, 1997, required by Section 5.26 of
the Series Two Pooling and Servicing
Agreement.
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
MORSERV, INC.
/s/ Michael D. Katz
----------------------------
Name: Michael D. Katz
Title: Senior Vice President
Date: June 30, 1997
Exhibit 20.1
------------
OFFICERS' CERTIFICATE
Multiclass-Mortgage Pass Through Certificates Series 1996-1
Pursuant to Section 5.25 of the Pooling and Servicing Agreement dated June 1,
1996 between Morserv, Inc., as Seller, The Chase Manhattan Bank (formerly known
as "Chemical Bank") as Master Servicer, and Norwest Bank Minnesota, N.A., as
Trustee, hereby provide the following Officers' Certificate:
(i) A review of the activities of the Master Servicer
during the preceding calendar year and of performance under
the related Pooling and Servicing Agreement has been made
under such Officers' supervision,
(ii) to the best of such officer's knowledge, based
on such review, the Master Servicer has fulfilled all its
obligation, specifying each such default known to such
officer and the nature and status thereof.
/s/Theresa M. McCue
- -------------------
Theresa M. McCue
Vlce President
/s/Judith A. Wolfe
- ------------------
Judith A. Wolfe
Assistant Treasurer
April 14, 1997
Exhibit 20.2
------------
Price Waterhouse LLP
Report of Independent Accountants
March 28, 1997
The Chase Manhattan Bank,
as Master Servicer under the
Agreement (as defined below)
We have audited, in accordance with generally accepted auditing standards, the
consolidated balance sheet of Chase Manhattan Mortgage Corporation (the
"Corporation") as of December 31, 1996 and the related consolidated statements
of operations and retained earnings and of cash flows for the year then ended,
and have issued our report thereon dated March 28, 1997.
This report is furnished pursuant to the Pooling and Servicing Agreement (the
"Agreement") for the Series 1996-1 Multi-Class Mortgage Pass-Through
Certificates entered into by MorServ, Inc., The Chase Manhattan Bank, as Master
Servicer, (the "Bank") and Norwest Bank Minnesota, N.A., as Trustee.
We have examined management's assertion about the Bank's compliance with the
minimum servicing standards identified in the Mortgage Bankers Association of
America's Uniform Single Attestation Program for Mortgage Bankers (USAP) as of
and for the year ended December 31, 1996 included in the accompanying management
assertion (see Exhibit I). The Corporation performs loan servicing functions for
the residential loan portfolios of MorServ, Inc. Management is responsible for
the Bank's compliance with the minimum servicing standards. Our responsibility
is to express an opinion on management's assertion about the entity'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 Corporation'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 the Corporation's compliance with the minimum servicing
standards.
In our opinion, management's assertion that, except for instances of
noncompliance described in management's assertion, the Corporation complied with
the aforementioned minimum servicing standards as of and for the year ended
December 31, 1996 is fairly stated, in all material respects.
Instances of noncompliance which occurred during 1996 are more fully discussed
in management's assertion which is set forth in Exhibit I.
/s/ Price Waterhouse LLP
<PAGE>
Exhibit I
Management's Assertion
As of and for the year ended December 31, 1996, except as specifically noted
below, Chase Manhattan Mortgage Corporation ("CMMC"), Chase Mortgage Services
Incorporated ("CMSI") and Chemical Mortgage Company ("CMC") and their
subsidiaries (collectively, the "Group") has complied in all material respects
with the minimum servicing standards (the "Standard(s)") set forth in the
Mortgage Bankers Association of America's Uniform Single Attestation Program for
Mortgage Bankers (USAP). During the year ended December 31, 1996, certain
instances of non-compliance with the Standards occurred. Except as specifically
noted, the following instances of non-compliance have been remedied and
procedural enhancements have been implemented.
Bank Accounts
Standard: Custodial bank accounts and related bank clearing accounts
reconciliation shall be prepared within forty-five (45) days after the
cutoff date and documented reconciling items shall be resolved from
these reconciliations within ninety (90) calendar days of their
original identification.
Certain of the Group's custodial accounts and related bank clearing
accounts were not consistently reconciled within 45 days during the
year. In addition, reconciling items documented on the reconciliations
were not always resolved within 90 days after identification. Weekly
management reviews have been initiated for the higher volume accounts
to ensure reconciliations are performed and reconciling items are
cleared in accordance with the Standards and new company policy.
Specific project plans have been placed in operation to ensure that the
population of reconciling items is worked and eventually cleared.
Additionally, work orders for technological enhancements to facilitate
the reconciliation process are being developed.
Disbursements
Standard: Unissued checks shall be safeguarded so as to prevent
unauthorized access.
Controls surrounding the Corporation's safeguarding of unissued checks
were determined to be inadequate. There was limited accountability for
checks printed and issued, and multiple employees had system access to
reprint checks. In addition, blank checks for various disbursing
amounts do not have pre-printed serial numbers which would enable area
management to effectively track missing and voided checks. Management
has requested new checks with preprinted serial numbers on them.
Additionally, management has placed into operation new scanners to be
installed on the Corporation's check printers, which will enable
management to print detailed reports on check printing, handling and
reconciliation via the printer account logs.
<PAGE>
Mortgagor Loan Accounting
Standard: Escrow accounts shall be analyzed, in accordance with the
mortgagor's loan documents, at least on an annual basis.
During 1996, there were instances in which an escrow analysis was not
performed on certain loans within the required 12-month cycle. These
exceptions were primarily attributed to missing tax or insurance
details required by area management to effectively perform an escrow
analysis. Management is currently utilizing tracking worksheets to
accelerate the information gathering process and is investigating
system upgrades to enable it to more efficiently perform the required
escrow analyses within the established timeframe.
Management believes it has taken definitive actions and implemented controls and
procedures to address and correct the instances of noncompliance which occurred
during 1996.
As of and for the year ended December 31, 1996, the Corporation had in effect
fidelity bond and errors and omissions policies in the amounts of $200,000,000
and $25,000,000, respectively.
/s/ Thomas Jacob 3/25/97
- ----------------- -------
Thomas Jacob Date
Chief Executive Officer
/s/ Stephen J. Rotalla 3/24/97
- ------------------------ -------
Steve Rotella Date
Executive Vice President
/s/ Glenn Mouridy 3/25/97
- ------------------ -------
Glenn Mouridy Date
Executive Vice President
Chief Financial Officer
/s/ Lucy P. Gambino 3/24/97
- -------------------- -------
Lucy Gambino Date
Assistant Vice President - Risk Management
Exhibit 20.3
------------
OFFICERS' CERTIFICATE
Multiclass-Mortgage Pass Through Certificates Series 1996-2
Pursuant to Section 5.25 of the Pooling and Servicing Agreement dated August I,
1996 between Morserv, Inc. as Seller, Chase Manhattan Mortgage Corporation, as
Master Servicer, and Citibank, N.A., as Trustee, hereby provides the following
Officers' Certificate:
(i) A review of the activities of the Master Servicer
during the preceding calendar year and of performance under
the related Pooling and Servicing Agreement has been made
under such Officers' supervision,
(ii) to the best of such officer's knowledge, based
on such review, the Master Servicer has fulfilled all its
obligation, specifying each such default known to such officer
and the nature and status thereof:
/s/Theresa M. McCue
- -------------------
Theresa M. McCue
Vlce President
/s/Judith A. Wolfe
- ------------------
Judith A. Wolfe
Assistant Treasurer
April 14, 1997
<PAGE>
Exhibit 20.4
------------
Price Waterhouse LLP
Report of Independent Accountants
March 28, 1997
To the Board of Directors and Shareholder
of Chase Manhattan Mortgage Corporation
We have audited, in accordance with generally accepted auditing standards, the
consolidated balance of Chase Manhattan Mortgage Corporation (the "Corporation")
as of December 31, 1996 and the related consolidated statements of operations
and retained earnings and of cash flows for the year then ended, and have issued
our report thereon dated March 28, 1997.
This report is furnished pursuant to the Pooling and Servicing Agreement (the
"Agreement") for the Series 1996-2 Multi-Class Mortgage Pass-Through
Certificates entered into by MorServ, Inc., the Corporation, as Master Servicer,
and Citibank, N.A., as Trustee.
We have examined management's assertion about the Corporation's compliance with
the minimum servicing standards identified in the Mortgage Bankers Association
of America's Uniform Single Attestation Program for Mortgage Bankers (USAP) as
of and for the year ended December 31, 1996 included in the accompanying
management assertion (see Exhibit I). The Corporation performs loan servicing
functions for the residential loan portfolios of MorServ, Inc. Management is
responsible for the Corporation's compliance with the minimum servicing
standards. Our responsibility is to express an opinion on management's assertion
about the entity'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 Corporation'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 the Corporation's compliance with the minimum servicing
standards.
In our opinion, management's assertion that, except for instances of
noncompliance described in management's assertion, the Corporation complied with
the aforementioned minimum servicing standards as of and for the year ended
December 31, 1996 is fairly stated, in all material respects.
Instances of noncompliance which occurred during 1996 are more fully discussed
in management's assertion which is set forth in Exhibit I.
/s/ Price Waterhouse LLP
<PAGE>
Exhibit I
Management's Assertion
As of and for the year ended December 31, 1996, except as specifically noted
below, Chase Manhattan Mortgage Corporation ("CMMC"), Chase Mortgage Services
Incorporated ("CMSI") and Chemical Mortgage Company ("CMC") and their
subsidiaries (collectively, the "Group") has complied in all material respects
with the minimum servicing standards (the "Standard(s)") set forth in the
Mortgage Bankers Association of America's Uniform Single Attestation Program for
Mortgage Bankers (USAP). During the year ended December 31, 1996, certain
instances of non-compliance with the Standards occurred. Except as specifically
noted, the following instances of non-compliance have been remedied and
procedural enhancements have been implemented.
Bank Accounts
Standard: Custodial bank accounts and related bank clearing accounts
reconciliation shall be prepared within forty-five (45) days after the
cutoff date and documented reconciling items shall be resolved from
these reconciliations within ninety (90) calendar days of their
original identification.
Certain of the Group's custodial accounts and related bank clearing
accounts were not consistently reconciled within 45 days during the
year. In addition, reconciling items documented on the reconciliations
were not always resolved within 90 days after identification. Weekly
management reviews have been initiated for the higher volume accounts
to ensure reconciliations are performed and reconciling items are
cleared in accordance with the Standards and new company policy.
Specific project plans have been placed in operation to ensure that the
population of reconciling items is worked and eventually cleared.
Additionally, work orders for technological enhancements to facilitate
the reconciliation process are being developed.
Disbursements
Standard: Unissued checks shall be safeguarded so as to prevent
unauthorized access.
Controls surrounding the Corporation's safeguarding of unissued checks
were determined to be inadequate. There was limited accountability for
checks printed and issued, and multiple employees had system access to
reprint checks. In addition, blank checks for various disbursing
amounts do not have pre-printed serial numbers which would enable area
management to effectively track missing and voided checks. Management
has requested new checks with preprinted serial numbers on them.
Additionally, management has placed into operation new scanners to be
installed on the Corporation's check printers, which will enable
management to print detailed reports on check printing, handling and
reconciliation via the printer account logs.
<PAGE>
Mortgagor Loan Accounting
Standard: Escrow accounts shall be analyzed, in accordance with the
mortgagor's loan documents, at least on an annual basis.
During 1996, there were instances in which an escrow analysis was not
performed on certain loans within the required 12-month cycle. These
exceptions were primarily attributed to missing tax or insurance
details required by area management to effectively perform an escrow
analysis. Management is currently utilizing tracking worksheets to
accelerate the information gathering process and is investigating
system upgrades to enable it to more efficiently perform the required
escrow analyses within the established timeframe.
Management believes it has taken definitive actions and implemented controls and
procedures to address and correct the instances of noncompliance which occurred
during 1996.
As of and for the year ended December 31, 1996, the Corporation had in effect
fidelity bond and errors and omissions policies in the amounts of $200,000,000
and $25,000,000, respectively.
/s/ Thomas Jacob 3/25/97
- ----------------- -------
Thomas Jacob Date
Chief Executive Officer
/s/ Stephen J. Rotalla 3/24/97
- ------------------------ -------
Steve Rotella Date
Executive Vice President
/s/ Glenn Mouridy 3/25/97
- ------------------ -------
Glenn Mouridy Date
Executive Vice President
Chief Financial Officer
/s/ Lucy P. Gambino 3/24/97
- -------------------- -------
Lucy Gambino Date
Assistant Vice President - Risk Management