SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-K
FOR ANNUAL AND TRANSITION REPORTS
PURSUANT TO SECTIONS 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One)
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE
ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from _______ to __________
Commission file number: 33-85224
MANUFACTURED HOUSING CONTRACT SENIOR/SUBORDINATE PASS-THROUGH
CERTIFICATES, SERIES 1995-2
(Exact name of registrant as specified in its charter)
Delaware 22-3186144
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
c/o The CIT Group Securitization Corporation II
650 CIT Drive
Livingston, New Jersey 07039
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (201) 740-5000
Securities registered pursuant to Section 12(b) of the Act:
None
(Title of Class)
Securities registered pursuant to Section 12(g) of the Act:
None
(Title of Class)
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. [ ]
<PAGE>
PART I
Item 1. Business.
On November 21, 1995 The CIT Group Securitization Corporation II (the
"Company") issued its Manufactured Housing Contract Senior/Subordinate
Pass-Through Certificates, Series 1995-2, Class A-1, Class A-2, Class A-3, Class
A-4, Class A-5 and Class B Certificates (collectively, the "Offered
Certificates") and Class R Certificates, such Series representing interests in
the CIT Manufactured Housing Contract Senior/Subordinate Pass-Through
Certificates Trust, Series 1995-2 (the "Trust"). The Offered Certificates were
offered pursuant to Company's prospectus dated February 10, 1995 as supplemented
by the prospectus supplement dated November 14, 1995 (collectively referred to
herein as the "Prospectus").
The Class A-1 Certificates evidence an initial (approximate) 18.20%
ownership interest in the Trust. The Class A-2 Certificates evidence an initial
(approximate) 17.80% ownership interest in the Trust. The Class A-3 Certificates
evidence an initial (approximate) 12.27% ownership interest in the Trust. The
Class A-4 Certificates evidence an initial (approximate) 32.73% ownership
interest in the Trust. The Class A-5 Certificates evidence an initial
(approximate) 8.00% ownership interest in the Trust. The Class B Certificates
evidence an initial (approximate) 11.00% ownership interest in the Trust. The
Class R Certificates evidence a 100% interest in the residual of the Trust.
The Class A-5, Class B and Class R Certificates are subordinated to the
rights of the Class A-1, Class A-2, Class A-3 and Class A-4 Certificates to the
extent described in the Prospectus. The Class B Certificates have the benefit of
a Limited Guarantee provided by The CIT Group Holdings, Inc. as described in the
Prospectus. The Class R Certificates represent the right to receive certain
residual cashflows.
The Trust's only business is to act as a passive conduit to permit
investment in a pool of retail consumer receivables.
Item 2. Properties.
The property of the Trust consists of a pool of manufactured housing
installment sales contracts and installment loan agreements (collectively, the
"Contracts").
All of the Contracts were acquired by the Company from The CIT Group/Sales
Financing, Inc. ("CITSF") pursuant to the terms of a Sale and Purchase Agreement
between the Company and CITSF dated as of November 1, 1995, and sold to the
Trust pursuant to a Pooling and Servicing Agreement dated as of November 1,
1995, among the Company, CITSF and Harris Trust and Savings Bank, as trustee
(the "Trustee").
Information related to the payment on the Contracts by the obligors under
the Contracts is set forth in the 1995 Annual Statement of Trust filed as
Exhibit 99 to this Annual Report on Form 10-K.
<PAGE>
Item 3. Legal Proceedings.
In June, 1995, a suit, Harvey Travis et al. v. The CIT Group Sales
Financing, Inc., et al., Civil Action No. CV-95-P-1544-S, was filed in the
United States District Court for the Northern District of Alabama, against
CITSF, its force-placed insurance carrier and another lender. Plaintiffs in this
action allege primarily that force-placed insurance coverage on manufactured
homes was placed by defendants in a manner which caused plaintiffs and other
borrowers to be charged or assessed for excessive premiums and that there was
inadequate disclosure regarding certain fees charged and commissions earned in
connection therewith. In their complaint, plaintiffs ask that a class action be
certified, with the class to be comprised of individuals against whom monetary
charges alleged to be excessive have been assessed and/or collected by CITSF
and/or the other defendants for the purchase of force-placed insurance in
connection with consumer installment transactions with CITSF and/or the other
defendants. It cannot at this time be determined whether there is any basis for
a class action. The allegations of the complaint are very general and discovery
has only recently commenced. However, based on what it knows at this time, the
management of CITSF has no reason to believe that this case will have a material
effect upon CITSF's financial condition or results of operations.
The registrant knows of no other material pending legal proceedings with
respect to the Trust or involving the Trust, the Owner Trustee, the Indenture
Trustee, the Company or CITSF.
Item 4. Submission of Matters to a Vote of Security Holders.
No matter was 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.
The Offered Certificates are held and delivered in book-entry form through
the facilities of The Depository Trust Company ("DTC"), a "clearing agency"
registered pursuant to the provisions of Section 17A of the Securities Exchange
Act of 1934, as amended.
As of January 2, 1996, 100% of the Offered Certificates were held in the
nominee name of Cede & Co. for 11 beneficial owners. As of January 2, 1996, the
Company owned the Class R Certificate which was not offered for sale, which
represented beneficial ownership of a residual interest in the assets of the
Trust as provided in the Pooling and Servicing Agreement
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
None.
<PAGE>
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
(a) Exhibits:
Exhibit Number Description
- -------------- -----------
19 Annual Report of Accountants with respect to the
servicing of the contracts by the Servicer,
pursuant to the Pooling and Servicing Agreement.
99 1995 Annual Statement of Trust.
(b) Reports on Form 8-K:
Current Reports on Form 8-K are filed each
month. The reports include as an exhibit, the
Monthly Reports to Certificateholders. Current
Reports on Form 8-K dated December 15,1995 and
January 16, 1996 were filed with the Securities
and Exchange Commission.
(c), (d) Omitted.
<PAGE>
SIGNATURES
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 behalf by the undersigned, thereunto duly authorized.
MANUFACTURED HOUSING CONTRACT
SENIOR/SUBORDINATE PASS-THROUGH
CERTIFICATES, SERIES 1995-2
(Registrant)
By: The CIT Group Securitization
Corporation II, as Originator of
the Trust
Dated: March 29, 1996 By: /s/ Frank Garcia
-------------------------
Name: Frank Garcia
Title: Vice President
Exhibit 19
Annual report of Accountants with respect to the servicing of the contracts
by the Servicer, pursuant to the Pooling and Servicing Agreement
Independent Auditors' Report
The Board of Directors
The CIT Group/Sales Financing, Inc.:
We have examined management's assertion about The CIT Group/Sales Financing,
Inc.'s (the Company) 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,
1995 included in the accompanying management assertion. Management is
responsible for the Company's compliance with those minimum 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
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 Company's compliance with the minimum servicing
standards.
In our opinion, management's assertion that the Company complied with the
aforementioned minimum servicing standards as of and for the year ended December
31, 1995 is fairly stated, in all material respects.
/s/ KPMG Peat Marwick LLP
March 25, 1996
<PAGE>
March 25, 1996
MANAGEMENT'S ASSERTION
As of and for the year ended December 31, 1995, The CIT Group Sales/Financing,
Inc. (the Company) has complied in all material respects with the minimum
servicing standards as set forth in the Mortgage Bankers Association of
America's Uniform Single Attestation Program for Mortgage Bankers. As of and for
this same period, the Company had in effect a fidelity bond and errors and
omissions policy in the amount of $50 million and $5 million respectively.
The CIT Group/Sales Financing, Inc.
/s/ James J. Egan
-------------------------------------
James J. Egan, Jr.
President and Chief Executive Officer
/s/ Richard W. Bauerband
------------------------
Richard W. Bauerband
Executive Vice President
/s/ Christine L. Reilly
-----------------------------
Christine L. Reilly
Vice President and Controller
<PAGE>
MINIMUM 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:
o be mathematically accurate;
o be prepared within forty-five (45)
calendar days after the cutoff date;
o be reviewed and approved by someone other than the person who
prepared the reconciliation; and
o document explanations for reconciling items. These reconciling items
shall be resolved within ninety (90) calendar days of their original
identification.
2. Funds of the servicing entity shall be advanced in cases where there is
an overdraft in an investor's or a mortgagor's account.
3. Each custodial account shall be maintained at a federally insured
depository institution in trust for the applicable investor.
4. 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. Mortgage payments shall be deposited into the custodial bank accounts
and related bank clearing accounts within two business days of receipt (with the
exception of securitization servicing contracts for which custodial accounts are
not applicable).
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.
3. 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 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.
<PAGE>
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 the canceled checks, or other form of payment, or custodial bank
statements.
6. Unissued 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 at least an annual basis.
4. Interest on escrow accounts shall be paid, or credited, to mortgagors in
accordance with the applicable state laws. (A compilation of state laws relating
to the payment of interest on escrow accounts may be obtained through the MBA's
FAX ON DEMAND service. For more information, contact MBA).
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 in
cases where the delinquency is deemed temporary (e.g., illness or unemployment).
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 assertion.
Exhibit 99
The CIT Group Securitization Corporation II
Manufactured Housing Contract Senior/Subordinate Certificate
Series 1995-2
For the Period November 21, 1995 (Date of Inception) to December 31, 1995
1. Aggregate Principal & Interest Received on Loans 4,746,477.12
2. Aggregate Amount of Liquation Proceeds -
3. Aggregate Net Servicer Advances -
4. Investment Earnings on Certificate Account 12,407.38
5. Aggregate Servicing Fees 346,597.10
6. Aggregate Fees to Guarantor 82,863.66
7. Aggregate Distribution made in respect of Interest:
(a) Class A-1 @ 5.90% 317,698.09
(b) Class A-2 @ 6.00% 319,104.00
(c) Class A-3 @ 6.25% 229,068.75
(d) Class A-4 @ 7.00% 684,600.00
(e) Class A-5 @ 6.95% 166,132.80
(f) Class B @ 7.65% 251,446.10
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Total Interest Distribution 1,968,049.74
8. Aggregate Distribution made in respect of Principal:
(a) Class A-1 1,552,469.32
(b) Class A-2 -
(c) Class A-3 -
(d) Class A-4 -
------------
Total Principal Distribution 1,552,469.32
9. Aggregate Amounts to Class R distribution 808,904.70
Delinquency Information at 12/31/95 Amount Number
- ----------------------------------- ------------ ------
(a) 31-59 Days 4,406,196.23 99
(b) 60 Days or more 1,892,025.49 43
Repossession Inventory at 12/31/95 0 0
