<PAGE>
Filed Purusant to Rule 424 (b)(5)
Registration File No.: 333-37717
PROSPECTUS SUPPLEMENT (TO PROSPECTUS DATED DECEMBER 17, 1997)
$1,301,390,000
(APPROXIMATE)
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
DEPOSITOR
GMAC COMMERCIAL MORTGAGE CORPORATION
SERVICER
MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 1998-C1
The Series 1998-C1 Mortgage Pass-Through Certificates (the "Certificates")
will consist of the following eighteen classes (each, a "Class"): (i) the Class
X Certificates; (ii) the Class A-1 Certificates and Class A-2 Certificates
(together, the "Class A Certificates" and collectively with the Class X
Certificates, the "Senior Certificates"); (iii) the Class B, Class C, Class D,
Class E, Class F, Class G, Class H, Class J, Class K, Class L, Class M and
Class N Certificates (collectively, the "Subordinate Certificates;" and
collectively with the Senior Certificates, the "REMIC Regular Certificates");
and (iv) the Class R-I, Class R-II and Class R-III Certificates (the "REMIC
Residual Certificates"). Only the Senior Certificates and the Class B, Class C,
Class D, Class E and Class F Certificates (collectively, the "Offered
Certificates") are offered hereby. The respective Classes of Offered
Certificates will be issued with the respective Certificate Balances and
Pass-Through Rates set forth or otherwise described in the table on the cover
page hereof.
(cover continued on next page)
PROCEEDS OF THE ASSETS IN THE TRUST FUND ARE THE SOLE SOURCE OF PAYMENTS ON THE
OFFERED CERTIFICATES. THE OFFERED CERTIFICATES DO NOT REPRESENT AN INTEREST IN
OR OBLIGATION OF THE DEPOSITOR, GMAC COMMERCIAL MORTGAGE CORPORATION OR ANY OF
THEIR AFFILIATES. NEITHER THE OFFERED CERTIFICATES NOR THE MORTGAGE LOANS ARE
INSURED OR GUARANTEED BY ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY OR BY THE
DEPOSITOR, GMAC COMMERCIAL MORTGAGE CORPORATION OR ANY OF THEIR AFFILIATES.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED ON OR
ENDORSED THE MERITS OF THIS OFFERING. ANY REPRESENTATION TO THE CONTRARY IS
UNLAWFUL.
PROSPECTIVE INVESTORS SHOULD REVIEW THE INFORMATION APPEARING UNDER THE
CAPTION -RISK FACTORS- BEGINNING ON PAGE S-20 HEREIN AND PAGE 11 IN THE
PROSPECTUS BEFORE PURCHASING ANY OFFERED CERTIFICATE.
<TABLE>
<CAPTION>
MOODY'S/FITCH
INITIAL CERTIFICATE INITIAL ASSUMED FINAL IBCA
CLASS BALANCE (1) PASS-THROUGH RATE DISTRIBUTION DATE(2) RATING
- ----------- --------------------- ------------------- ---------------------- --------------
<S> <C> <C> <C> <C>
Class X (3) 0.442%(4) March 15, 2018 Aaa/AAA
Class A-1 $333,587,000 6.411% November 15, 2007 Aaa/AAA
Class A-2 $687,393,000 6.700% March 15, 2008 Aaa/AAA
Class B $28,760,000 6.753%(5) April 15, 2008 Aaa/AA+
Class C $64,710,000 6.806%(5) April 15, 2008 Aa2/AA
Class D $75,495,000 6.974%(5) July 15, 2008 A2/A
Class E $68,305,000 7.153%(6) March 15, 2011 Baa2/BBB
Class F $43,140,000 7.153%(6) January 15, 2013 NR/BBB-
</TABLE>
(footnotes on page S-2)
The Offered Certificates will be purchased from the Depositor by Deutsche
Morgan Grenfell Inc. ("DMG") and Lehman Brothers Inc. ("Lehman Brothers" and
with DMG, the "Underwriters"), with the Underwriters as co-bookrunners and
co-lead managers, and will be offered by the Underwriters from time to time in
negotiated transactions or otherwise at varying prices to be determined at the
time of sale. Proceeds to the Depositor from the sale of the Offered
Certificates, before deducting expenses payable by the Depositor estimated to
be approximately $1,347,190,696, will be 103.52% of the initial aggregate
Certificate Balance of the Offered Certificates, plus accrued interest. The
Offered Certificates are offered by the Underwriters subject to prior sale,
when, as and if delivered to and accepted by the Underwriters and subject to
certain other conditions.
It is expected that the Offered Certificates will be delivered in
book-entry form through the Same-Day Funds Settlement System of DTC, Cedel
Bank, societe anonyme, and the Euroclear System on or about May 18, 1998 (the
"Delivery Date"), against payment therefor in immediately available funds.
DEUTSCHE MORGAN GRENFELL LEHMAN BROTHERS
The date of this Prospectus Supplement is April 28, 1998.
<PAGE>
[THE NARRATIVE AND/OR TABULAR INFORMATION BELOW IS A FAIR AND ACCURATE
DESCRIPTION OF GRAPHIC OR IMAGE MATERIAL OMITTED FOR THE
PURPOSE OF EDGAR FILING.]
[MAP]
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 1998-C1
<TABLE>
<CAPTION>
PERCENTAGE OF
AGGREGATE
NUMBER OF CUT-OFF DATE CUT-OFF DATE
MORTGAGE PRINCIPAL PRINCIPAL
PROPERTY STATE PROPERTIES BALANCE BALANCE
- ---------------------------- ------------ ----------------- ---------------
<S> <C> <C> <C>
Texas ...................... 85 $ 310,782,395 21.61%
New York ................... 13 152,293,306 10.59
California ................. 25 134,299,281 9.34
Arizona .................... 23 102,987,628 7.16
Illinois ................... 34 100,578,286 6.99
District of Columbia ....... 3 64,920,483 4.51
Washington ................. 4 63,033,903 4.38
Florida .................... 11 54,445,035 3.79
Minnesota .................. 3 51,567,186 3.59
Maryland ................... 8 37,396,229 2.60
Michigan ................... 8 36,604,997 2.55
Louisiana .................. 5 36,191,152 2.52
Oregon ..................... 5 35,985,336 2.50
New Jersey ................. 16 29,686,459 2.06
Virginia ................... 5 26,906,398 1.87
Missouri ................... 8 26,083,560 1.81
Georgia .................... 10 25,003,208 1.74
Utah ....................... 4 24,032,603 1.67
Massachusetts .............. 3 23,157,868 1.61
Rhode Island ............... 2 17,298,892 1.20
Delaware ................... 3 15,859,106 1.10
Pennsylvania ............... 2 12,948,658 0.90
Nevada ..................... 2 11,142,981 0.77
North Carolina ............. 3 10,521,317 0.73
Colorado ................... 1 6,973,065 0.48
Nebraska ................... 1 6,153,174 0.43
Connecticut ................ 2 4,641,398 0.32
Wisconsin .................. 1 4,539,085 0.32
Kentucky ................... 1 3,497,339 0.24
Tennessee .................. 1 3,492,543 0.24
Arkansas ................... 1 2,681,087 0.19
Idaho ...................... 1 2,296,307 0.16
[ ] less than or equal to 1.0% of Initial Pool Balance
[ ] 1.1% - 5.0% of Initial Pool Balance
[ ] 5.1% - 10.0% of Initial Pool Balance
[ ] greater than 10.0% of Initial Pool Balance
For purposes of this map, each Mortgage Loan secured by multiple Mortgaged
Properties (including the Senior Living Loan (as defined herein)) is treated as
the number of Mortgage Loans equal to the number of Mortgaged Properties, each
of which is allocated a Cut-off Date Balance on the Allocated Principal Amounts
thereof (as defined herein).
<PAGE>
(The footnotes to the table on the cover page are as follows)
- ----------
(1) Subject to a variance of plus or minus 5%.
(2) The "Assumed Final Distribution Date" with respect to any Class of
Offered Certificates is the Distribution Date (as defined herein) on
which the final distribution would occur for such Class of Certificates
based upon the assumption that no Mortgage Loan is prepaid prior to its
stated maturity and otherwise based on the Maturity Assumptions (as
described herein). The actual performance and experience of the Mortgage
Loans will likely differ from such assumptions. The Rated Final
Distribution Date (as defined herein) for each Class of Principal Balance
Certificates (as defined herein) is the Distribution Date in May, 2030.
See "Yield and Maturity Considerations" herein.
(3) The Class X Certificates will not have a Certificate Balance and will
accrue interest on the Notional Amount (as defined herein) thereof, which
is equal to the aggregate Certificate Balance of the Principal Balance
Certificates.
(4) Approximate initial Pass-Through Rate. The Pass-Through Rate applicable
to the Class X Certificates for each Distribution Date subsequent to the
initial Distribution Date will be equal to the weighted average (by
Certificate Balance of the corresponding Class of Principal Balance
Certificates) of the Pass-Through Rates applicable to each Class X
Component. The Pass-Through Rate for each Class X Component will equal
the excess, if any, of the Weighted Average Net Mortgage Rate (as defined
herein) for such Distribution Date over the Pass-Through Rate for such
Distribution Date applicable to the related Class of Principal Balance
Certificates. See "Description of the Certificates."
(5) Lesser of fixed rate or Weighted Average Net Mortgage Rate.
(6) Approximate initial Pass-Through Rate. The Pass-Through Rate on the Class
E and Class F Certificates for any Distribution Date will be equal to the
Weighted Average Net Mortgage Rate with respect to such Distribution
Date.
(cover continued from preceding page)
The Certificates will represent the entire beneficial ownership interest
in a trust fund (the "Trust Fund") to be established by the Depositor, the
assets of which will consist primarily of a segregated pool (the "Mortgage
Asset Pool") of multifamily and commercial mortgage loans (the "Mortgage
Loans"). The Cut-off Date is May 1, 1998 and, as of such date, the Mortgage
Loans had an aggregate principal balance (the "Initial Pool Balance") of
$1,438,000,264 after application of all payments of principal due on or before
such date, whether or not received, and subject to a variance of plus or minus
5%. Certain characteristics of the Mortgage Loans are described herein under
"Description of the Mortgage Asset Pool."
As described herein, three separate REMIC elections will be made with
respect to the Trust Fund for federal income tax purposes (the REMICs formed
thereby being herein referred to as "REMIC I," "REMIC II" and "REMIC III,"
respectively). The Offered Certificates will constitute "regular interests" in
REMIC III. See "Certain Federal Income Tax Consequences" herein and in the
Prospectus.
Distributions on the Certificates will be made, to the extent of available
funds, on each Distribution Date (as defined herein) beginning in June 1998. As
described herein, interest distributions on each Class of Offered Certificates
will be made on each Distribution Date based on the Pass-Through Rate then
applicable to such Class and the Certificate Balance or Notional Amount, as the
case may be, of such Class outstanding immediately prior to such Distribution
Date. Distributions allocable to principal of the respective Classes of
Certificates with Certificate Balances (the "Principal Balance Certificates")
will be made in the amounts and in accordance with the priorities described
herein until the Certificate Balance of each such Class is reduced to zero. The
Class X Certificates will not have a Certificate Balance or entitle the holders
thereof to receive distributions of principal. As described herein, any
Prepayment Premiums actually collected on the Mortgage Loans will, in general,
be distributed among certain of the Classes of Certificates in the amounts and
in accordance with the priorities described herein. See "Description of the
Certificates -- Distributions" herein.
S-2
<PAGE>
As and to the extent described herein, the Subordinate Certificates will
be subordinate to the Senior Certificates; and each Class of Subordinate
Certificates will be subordinate to each other class of Subordinate
Certificates, if any, with an earlier alphabetical Class designation. The REMIC
Residual Certificates will be subordinate to the REMIC Regular Certificates.
See "Description of the Certificates -- Distributions" and "-- Subordination;
Allocation of Losses and Certain Expenses" herein.
The yield to maturity of each Class of Offered Certificates will depend
on, among other things, the rate and timing of principal payments (including by
reason of prepayments, loan extensions, repurchases, defaults and liquidations)
and losses on or in respect of the Mortgage Loans that result in a reduction of
the Certificate Balance or Notional Amount of such Class. The yield to maturity
of the Class X Certificates will be highly sensitive to the rate and timing of
principal payments (including by reason of prepayments, loan extensions,
repurchases, defaults and liquidations) and losses on or in respect of the
Mortgage Loans, which rate and timing of principal payments and losses may
fluctuate significantly from time to time. A rate of principal prepayments on
the Mortgage Loans that is more rapid than expected by investors will have a
material negative effect on the yield to maturity of the Class X Certificates.
Investors in the Class X Certificates should consider the associated risks,
including the risk that a rapid rate of principal prepayments on the Mortgage
Loans could result in the failure of investors in such Certificates to recover
fully their initial investments. See "Yield and Maturity Considerations" herein
and "Yield and Maturity Considerations" and "Risk Factors -- Yield and
Prepayment Considerations" in the Prospectus.
See "Index of Principal Definitions" in the Prospectus for the location of
meanings of capitalized terms used but not defined herein. See "Index of
Principal Terms" herein for location of meanings of other capitalized terms
used herein.
There is currently no secondary market for the Offered Certificates. The
Underwriters currently intend to make a secondary market in the Offered
Certificates, but are not obligated to do so. There can be no assurance that a
secondary market for the Offered Certificates will develop or, if it does
develop, that it will continue. The Offered Certificates will not be listed on
any securities exchange.
THE CERTIFICATES OFFERED BY THIS PROSPECTUS SUPPLEMENT CONSTITUTE PART OF
A SEPARATE SERIES OF CERTIFICATES ISSUED BY THE DEPOSITOR AND ARE BEING OFFERED
PURSUANT TO ITS PROSPECTUS DATED DECEMBER 17, 1997, OF WHICH THIS PROSPECTUS
SUPPLEMENT IS A PART AND WHICH ACCOMPANIES THIS PROSPECTUS SUPPLEMENT. THE
PROSPECTUS CONTAINS IMPORTANT INFORMATION REGARDING THIS OFFERING THAT IS NOT
CONTAINED HEREIN, AND PROSPECTIVE INVESTORS ARE URGED TO READ THE PROSPECTUS
AND THIS PROSPECTUS SUPPLEMENT IN FULL. SALES OF THE OFFERED CERTIFICATES MAY
NOT BE CONSUMMATED UNLESS THE PURCHASER HAS RECEIVED BOTH THIS PROSPECTUS
SUPPLEMENT AND THE PROSPECTUS.
UNTIL JULY 27, 1998, ALL DEALERS EFFECTING TRANSACTIONS IN THE OFFERED
CERTIFICATES, WHETHER OR NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE
REQUIRED TO DELIVER A PROSPECTUS SUPPLEMENT AND THE PROSPECTUS TO WHICH IT
RELATES. THIS DELIVERY REQUIREMENT IS IN ADDITION TO THE OBLIGATION OF DEALERS
TO DELIVER A PROSPECTUS SUPPLEMENT AND PROSPECTUS WHEN ACTING AS UNDERWRITERS
AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
S-3
<PAGE>
TABLE OF CONTENTS
</TABLE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
TRANSACTION OVERVIEW ................................................................. S-6
SUMMARY OF PROSPECTUS SUPPLEMENT ..................................................... S-8
RISK FACTORS ......................................................................... S-20
The Certificates .................................................................... S-20
The Mortgage Loans .................................................................. S-20
DESCRIPTION OF THE MORTGAGE ASSET POOL ............................................... S-29
General ............................................................................. S-29
Certain Terms and Conditions of the Mortgage Loans .................................. S-29
Additional Mortgage Loan Information ................................................ S-33
The Mortgage Loan Sellers ........................................................... S-44
Certain Underwriting Matters ........................................................ S-44
Assignment of the Mortgage Loans; Repurchases and Substitutions ..................... S-46
Representations and Warranties; Repurchases ......................................... S-47
Changes in Mortgage Asset Pool Characteristics ...................................... S-49
SERVICING OF THE MORTGAGE LOANS ...................................................... S-50
General ............................................................................. S-50
The Servicer ........................................................................ S-51
Termination of the Servicer with Respect to Specially Serviced Mortgage Loans and
REO Properties .................................................................... S-51
Servicing and Other Compensation and Payment of Expenses ............................ S-52
Modifications, Waivers, Amendments and Consents ..................................... S-55
Sale of Defaulted Mortgage Loans .................................................... S-56
REO Properties ...................................................................... S-56
Inspections; Collection of Operating Information .................................... S-57
DESCRIPTION OF THE CERTIFICATES ...................................................... S-58
General ............................................................................. S-58
Book-Entry Registration of the Offered Certificates ................................. S-58
Certificate Balances and Notional Amounts ........................................... S-61
Pass-Through Rates .................................................................. S-62
Distributions ....................................................................... S-63
Subordination; Allocation of Losses and Certain Expenses ............................ S-67
P&I Advances ........................................................................ S-68
Appraisal Reductions ................................................................ S-69
Reports to Certificateholders; Certain Available Information ........................ S-70
Voting Rights ....................................................................... S-72
Termination; Retirement of Certificates ............................................. S-72
The Trustee and the Fiscal Agent .................................................... S-73
YIELD AND MATURITY CONSIDERATIONS .................................................... S-74
Yield Considerations ................................................................ S-74
Weighted Average Life ............................................................... S-76
Certain Price/Yield Tables .......................................................... S-81
Yield Sensitivity of the Class X Certificates ....................................... S-84
</TABLE>
S-4
<PAGE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
CERTAIN FEDERAL INCOME TAX CONSEQUENCES .......................... S-86
General ......................................................... S-86
Original Issue Discount and Premium ............................. S-86
Characterization of Investments in Offered Certificates ......... S-87
METHOD OF DISTRIBUTION ........................................... S-88
LEGAL MATTERS .................................................... S-89
RATINGS .......................................................... S-89
LEGAL INVESTMENT ................................................. S-90
ERISA CONSIDERATIONS ............................................. S-90
INDEX OF PRINCIPAL TERMS ......................................... S-92
ANNEX A .......................................................... A-1
ANNEX B .......................................................... B-1
ANNEX C .......................................................... C-1
ANNEX D .......................................................... D-1
</TABLE>
S-5
<PAGE>
TRANSACTION OVERVIEW
Prospective investors are advised to carefully read, and should rely
solely on, the detailed information appearing elsewhere in this Prospectus
Supplement and the Prospectus relating to the Offered Certificates in making
their investment decision. The following Transaction Overview does not include
all relevant information relating to the securities and collateral described
herein, particularly with respect to the risks and special considerations
involved with an investment in such securities and is qualified in its entirety
by reference to the detailed information appearing elsewhere in this Prospectus
Supplement and the Prospectus. Prior to making an investment decision, a
prospective investor should carefully review this Prospectus Supplement and the
Prospectus. Capitalized terms used and not otherwise defined herein have the
respective meanings assigned to them in this Prospectus Supplement and the
Prospectus. See "Index of Principal Terms" in this Prospectus Supplement and
"Index of Principal Definitions" in the Prospectus.
<TABLE>
<CAPTION>
INITIAL
RATINGS CERTIFICATE PERCENT OF
(MOODY'S/ BALANCE OF INITIAL
FITCH NOTIONAL POOL
CLASS IBCA) AMOUNT BALANCE
- ------- ----------- ----------------------- ------------
<S> <C> <C> <C>
X Aaa/AAA $ 1,438,000,263(b) N/A
A-1 Aaa/AAA $ 333,587,000 23.20%
A-2 Aaa/AAA $ 687,393,000 47.80%
B Aaa/AA+ $ 28,760,000 2.00%
C Aa2/AA $ 64,710,000 4.50%
D A2/A $ 75,495,000 5.25%
E Baa2/BBB $ 68,305,000 4.75%
F NR/BBB- $ 43,140,000 3.00%
G(a) $ 32,355,000 2.25%
H(a) $ 25,165,000 1.75%
J(a) $ 14,380,000 1.00%
K(a) $ 25,165,000 1.75%
L(a) $ 14,380,000 1.00%
M(a) $ 10,785,000 0.75%
N(a) $ 14,380,263 1.00%
<CAPTION>
DESCRIPTION WEIGHTED
OF PASS- INITIAL PASS- AVG. PRINCIPAL
THROUGH THROUGH LIFE(D) WINDOW (D)
CLASS SUBORDINATION (C) RATE RATE (YEARS) (MONTH/YEAR)
- ------- ------------------- --------------- --------------- --------- ----------------
<S> <C> <C> <C> <C> <C>
X N/A Variable 0.442% N/A 6/98 - 3/18
Rate I/O
A-1 29.00% Fixed Rate 6.411% 5.5 6/98 - 11/07
A-2 29.00% Fixed Rate 6.700% 9.7 11/07 - 3/08
B 27.00% (e) 6.753% 9.9 3/08 - 4/08
C 22.50% (e) 6.806% 9.9 4/08 - 4/08
D 17.25% (e) 6.974% 10.0 4/08 - 7/08
E 12.50% (f) 7.153% 11.1 7/08 - 3/11
F 9.50% (f) 7.153% 14.2 3/11 - 1/13
G(a) 7.25% (f) 7.153% 14.7 1/13 - 2/13
H(a) 5.50% (f) 7.153% 14.8 2/13 - 3/13
J(a) 4.50% (f) 7.153% 14.9 3/13 - 4/13
K(a) 2.75% (e) 6.700% 15.2 4/13 - 4/14
L(a) 1.75% (e) 6.700% 16.6 4/14 - 9/15
M(a) 1.00% (e) 6.700% 17.8 9/15 - 9/16
N(a) 0.00% (e) 6.700% 19.0 9/16 - 3/18
</TABLE>
- ----------
(a) Not offered hereby.
(b) Notional Amount.
(c) Reflects aggregate of Certificate Balances of all Classes of
Certificates that, as of the Closing Date, are subordinate to the
specified Class, expressed as a percentage of the Initial Pool
Balance.
(d) The weighted average life and period during which distributions of
principal would be received (the "Principal Window") set forth in
the foregoing table with respect to each Class of REMIC Regular
Certificates is based on the assumptions that there are no
prepayments on the Mortgage Loans and otherwise on the basis of the
Maturity Assumptions (as defined herein). See "Yield and Maturity
Considerations" herein. With respect to the Class X Certificates,
the Principal Window is the period during which distributions of
interest would be received based upon the foregoing assumptions.
(e) Lesser of fixed rate or Weighted Average Net Mortgage Rate.
(f) Weighted Average Net Mortgage Rate.
S-6
<PAGE>
Set forth below is certain information regarding the Mortgage Loans and
the Mortgaged Properties as of the Cut-off Date (all weighted averages set
forth below are based on the Cut-off Date Balances (as defined herein) of the
respective Mortgage Loans). Such information is described, and additional
information regarding the Mortgage Loans and the Mortgaged Properties is set
forth, under "Description of the Mortgage Asset Pool" herein and in Annex A
hereto.
MORTGAGE POOL CHARACTERISTICS
<TABLE>
<CAPTION>
CHARACTERISTICS ENTIRE MORTGAGE POOL
--------------- --------------------
<S> <C>
Initial Pool Balance .................................. $1,438,000,264
Number of Mortgage Loans .............................. 181
Number of Mortgaged Properties ........................ 294
Average Cut-off Date Balance .......................... $ 7,944,753
Weighted Average Mortgage Rate ........................ 7.20%
Weighted Average Remaining Term to Maturity or
Anticipated Repayment Date ........................... 133 Months
Weighted Average Debt Service Coverage Ratio .......... 1.49
Weighted Average Cut-off Date LTV Ratio ............... 70.5%
</TABLE>
"Cut-off Date Loan-to-Value Ratio" and "Debt Service Coverage Ratio" are
calculated as described in Annex A hereto.
S-7
<PAGE>
SUMMARY OF PROSPECTUS SUPPLEMENT
The following summary is qualified in its entirety by reference to the
detailed information appearing elsewhere in this Prospectus Supplement and in
the accompanying Prospectus. Certain capitalized terms that are used in this
Summary may be defined elsewhere in this Prospectus Supplement, including on
Annex A hereto, or in the Prospectus. An "Index of Principal Definitions" is
included at the end of both this Prospectus Supplement and the Prospectus.
Terms that are used but not defined in this Prospectus Supplement will have the
meanings specified in the Prospectus.
Title of Certificates....... Mortgage Pass-Through Certificates, Series
1998-C1.
Depositor................... GMAC Commercial Mortgage Securities, Inc. See
"The Depositor" in the Prospectus.
Servicer.................... GMAC Commercial Mortgage Corporation. See
"Servicing of the Mortgage Loans -- The Servicer"
herein.
Trustee..................... LaSalle National Bank. See "Description of the
Certificates -- The Trustee and the Fiscal Agent"
herein.
Mortgage Loan Sellers....... On or before the Delivery Date, the Depositor
will acquire the Mortgage Loans that are to
constitute the Trust Fund from German American
Capital Corporation ("GACC"), an affiliate of
Deutsche Bank AG and Deutsche Morgan Grenfell
Inc., one of the Underwriters, and GMAC
Commercial Mortgage Corporation ("GMACCM"), an
affiliate of the Depositor (GACC and GMACCM are
collectively referred to as the "Mortgage Loan
Sellers"). Each Mortgage Loan Seller will make
certain representations and warranties with
respect to its Mortgage Loans, and all such
representations and warranties will be assigned
by the Depositor to the Trustee. See "Description
of the Mortgage Asset Pool -- The Mortgage Loan
Sellers" herein.
Fiscal Agent................ ABN AMRO Bank N.V., a Netherlands banking
corporation and the indirect corporate parent of
the Trustee. See "Description of the Certificates
-- The Trustee and the Fiscal Agent" herein.
Cut-off Date................ May 1, 1998.
Delivery Date............... On or about May 18, 1998.
Distribution Date........... The 15th day of each month, or, if any such
15th day is not a business day, then on the next
business day beginning on June 15, 1998 (the
"Distribution Date").
Record Date................. With respect to any Distribution Date, the last
business day of the calendar month immediately
preceding the month in which such Distribution
Date occurs.
Interest Accrual Period..... With respect to any Distribution Date, the
calendar month immediately preceding the month in
which such Distribution Date occurs.
S-8
<PAGE>
Registration and
Denominations............... The Offered Certificates will be issued as
Book-Entry Certificates in denominations of: (i)
in the case of the Class X Certificates,
$1,000,000 Notional Amount and in any whole
dollar denomination in excess thereof; and (ii)
in the case of the other Classes of Offered
Certificates, $25,000 actual principal amount and
in any whole dollar denomination in excess
thereof. Each Class of Offered Certificates will
be represented by one or more Certificates
registered in the name of Cede & Co., as nominee
of DTC. Persons acquiring beneficial ownership
interests in the Offered Certificates may elect
to hold their book-entry Certificate interests
either through DTC in the United States, or
through Cedel Bank, societe anonyme ("CEDEL") or
the Euroclear System ("Euroclear") in Europe.
Transfers within DTC, CEDEL or Euroclear, as the
case may be, will be in accordance with the usual
rules and operating procedures of the applicable
system. The Offered Certificates (the "DTC
Registered Certificates") will be represented by
one or more global certificates registered in the
name of Cede & Co., as nominee of DTC. No
Certificate Owner acquiring an interest in the
DTC Registered Certificates will be entitled to
receive a Definitive Certificate of such class,
except under the limited circumstances described
herein. See "Description of the Certificates --
Book-Entry Registration of the Offered
Certificates" herein and Annex D hereto and
"Description of the Certificates -- Book-Entry
Registration and Definitive Certificates" in the
The Mortgage Asset Pool..... The Mortgage Asset Pool will consist of 181
fixed rate Mortgage Loans, with an Initial Pool
Balance of $1,438,000,264, subject to a variance
of plus or minus 5%. All numerical information
provided herein with respect to the Mortgage
Loans is provided on an approximate basis.
The Cut-off Date Balances (as defined herein) of
the Mortgage Loans will range from $411,898 to
$225,437,229 and the average Cut-off Date
Balance will be $7,944,753.
Each Mortgage Loan is secured by a first
mortgage lien on a fee simple and/or leasehold
interest in one or more Mortgaged Properties
used for commercial or multifamily residential
purposes.
Substantially all of the Mortgage Loans
constitute nonrecourse obligations of the
related borrower, and prospective investors
should thus consider all of the Mortgage Loans
to be nonrecourse. None of the Mortgage Loans is
insured or guaranteed by the United States, any
governmental agency or instrumentality or any
private mortgage insurer except for one Mortgage
Loan which has the benefit of a partial surety
bond as described herein. See "Description of
the Mortgage Asset Pool -- General" herein.
Set forth below are the number of Mortgaged
Properties and the approximate percentage of the
Initial Pool Balance repre-
S-9
<PAGE>
sented by the related Mortgage Loans, that are
located in the five states with the highest
concentrations:
<TABLE>
<CAPTION>
NUMBER OF PERCENTAGE
MORTGAGED OF INITIAL
STATE PROPERTIES POOL BALANCE
---------------------- ------------ -------------
<S> <C> <C>
Texas .............. 85 21.61%
New York ........... 13 10.59%
California ......... 25 9.34%
Arizona ............ 23 7.16%
Illinois ........... 34 6.99%
</TABLE>
The remaining Mortgaged Properties are located
throughout 26 other states and the District of
Columbia.
Set forth below are the number of Mortgaged
Properties and the approximate percentage of the
Initial Pool Balance represented by the related
Mortgage Loans, that are operated for each
indicated purpose:
<TABLE>
<CAPTION>
NUMBER OF PERCENTAGE OF
MORTGAGED INITIAL
PROPERTY TYPE PROPERTIES POOL BALANCE
----------------------------------- ------------ --------------
<S> <C> <C>
Multifamily ..................... 90 26.15%
Retail .......................... 40 19.05%
Skilled Nursing ................. 91 17.53%
Hospitality ..................... 10 11.69%
Office .......................... 25 10.85%
Independent/Assisted Living ..... 12 4.69%
Mixed Use ....................... 8 4.17%
Industrial ...................... 13 3.24%
Other ........................... 5 2.64%
</TABLE>
All of the Mortgage Loans bear interest at
Mortgage Rates that are, in each case, fixed for
the entire remaining term of the Mortgage Loan.
No Mortgage Loan (other than each ARD Loan (as
defined herein) permits negative amortization or
the deferral of accrued interest. See
"Description of the Mortgage Asset Pool --
Certain Terms and Conditions of the Mortgage
Loans -- Mortgage Rates; Calculations of
Interest" herein.
One hundred three (103) of the Mortgage Loans
(the "Balloon Loans"), which represent 61.40% of
the Initial Pool Balance, provide for monthly
payments of principal based on amortization
schedules significantly longer than the
remaining terms of such Mortgage Loans (and, in
some cases, following an interest only period).
As a result, substantial principal amounts will
be due and payable (each such payment, together
with the corresponding interest payment, a
"Balloon Payment") in respect of such Mortgage
Loans on their respective maturity dates, unless
prepaid prior thereto. Forty-four (44) of the
Mortgage Loans, which represent 11.30% of the
Initial Pool Balance, are fully amortizing.
S-10
<PAGE>
Hyperamortization. Thirty-four (34) of the
Mortgage Loans (the "ARD Loans"), which
represent 27.29% of the Initial Pool Balance,
permit the related borrower to prepay the
related Mortgage Loan without payment of a
Prepayment Premium beginning at, or up to six
months prior to, the related Anticipated
Repayment Date. The "Anticipated Repayment Date"
for any such ARD Loan is set forth on Annex A.
If the related borrower elects to prepay an ARD
Loan in full on the related Anticipated
Repayment Date, a substantial amount of
principal will be due. If a borrower elects not
to prepay an ARD Loan on or before its
Anticipated Repayment Date, commencing on such
Anticipated Repayment Date, such ARD Loan will
bear interest at the Revised Rate (as defined
herein). Interest accrued on an ARD Loan at the
excess of the related Revised Rate over the
Mortgage Rate (the "Excess Interest") will be
deferred until the principal balance thereof is
reduced to zero. If a borrower elects not to
prepay an ARD Loan on or before its Anticipated
Repayment Date, all or a substantial portion of
all monthly cash flow from the related Mortgaged
Property collected after such date will be
applied to the payment of principal on such ARD
Loan and, after the principal balance thereof
has been reduced to zero, to the payment of
accrued and unpaid Excess Interest. To the
extent such Excess Interest is unpaid, it will,
except where limited by applicable law, continue
to accrue interest at the Revised Rate. All of
the ARD Loans for which a Lockbox Account (as
defined herein) has not been established on or
before the Closing Date provide that a Lockbox
Account must be established on or prior to the
applicable Anticipated Repayment Date. See
"Description of the Mortgage Asset Pool
--Certain Terms and Conditions of the Mortgage
Loans -- Hyperamortization" herein.
Call Protection. All of the Mortgage Loans
impose some restriction on voluntary principal
prepayments, whether in the form of an absolute
prohibition or a requirement that any voluntary
principal prepayment be accompanied by a
Prepayment Premium. The prepayment terms of each
of the Mortgage Loans are described under
"Description of the Mortgage Asset Pool --
Certain Terms and Conditions of the Mortgage
Loans -- Prepayment Provisions" herein and on
Annex A hereto. Certain of the Mortgage Loans
subject to lockout at origination will be beyond
the applicable lockout period as of the Cut-off
Date. See "Annex A--Prepayment
Lock-Out/Prepayment Premium Analysis."
<TABLE>
<CAPTION>
OVERVIEW OF ORIGINAL CALL PROTECTION (1) (2)
--------------------------------------------
<S> <C>
Lock-out Period with defeasance ................ 47.12%
Yield maintenance .............................. 29.54%
Lock-out Period with yield maintenance ......... 22.30%
Lock-out Period with fixed percentage .......... 0.49%
Other .......................................... 0.55%
</TABLE>
S-11
<PAGE>
----------------
(1) Percentage of Initial Pool Balance. Certain
of the Mortgage Loans may permit prepayment
without penalty for a specified period
preceding the maturity date or Anticipated
Repayment Date.
(2) With respect to one (1) Mortgage Loan
representing 3.12% of the Initial Pool
Balance, 0.50% is added to the applicable
treasury rate for purposes of calculating
the applicable yield maintenance charge.
Defeasance. Forty-three (43) Mortgage Loans,
which represent 47.12% of the Initial Pool
Balance, permit the applicable borrower, after a
specified period and provided no event of
default exists, to obtain the release of the
related Mortgaged Property (or, if a
Cross-Collateralized Mortgage Loan (as defined
herein), one or more of the related Mortgaged
Properties) from the lien of the related
Mortgage (a "Defeasance Option") upon the pledge
to the Trustee of noncallable U.S. government
obligations that provide payments on or prior to
all successive scheduled payment dates upon
which interest and principal payments are due
under the related Mortgage Note and in amounts
due on such dates, and upon satisfaction of
certain other conditions. For detailed
statistical information regarding the entire
Mortgage Asset Pool, see "Description of the
Mortgage Asset Pool -- Certain Terms and
Conditions of the Mortgage Loans -- Defeasance"
herein and Annex A hereto.
Description of
the Certificates............ The Certificates will be issued pursuant to a
Pooling and Servicing Agreement, to be dated as
of the Cut-off Date, among the Depositor, the
Servicer, the Trustee and the Fiscal Agent (the
"Pooling and Servicing Agreement"), and will
represent in the aggregate the entire beneficial
ownership interest in the Trust Fund, which will
consist of the Mortgage Asset Pool and certain
related assets.
Certificate Balances and Notional
Amounts.................... Upon initial issuance, the Class A-1, Class
A-2, Class B, Class C, Class D, Class E and Class
F Certificates will have the respective
Certificate Balances set forth on the cover page
hereof (in each case, subject to a variance of
plus or minus 5%).
The Class G, Class H, Class J, Class K, Class L,
Class M and Class N Certificates will have an
initial aggregate Certificate Balance equal to
the excess of the Initial Pool Balance over the
initial aggregate Certificate Balance of the
Class A, Class B, Class C, Class D, Class E and
Class F Certificates.
The Class X Certificates will not have a
Certificate Balance; such Class of Certificates
will instead represent the right to receive
distributions of interest accrued as described
herein on a Notional Amount. The Notional Amount
of the Class X
S-12
<PAGE>
Certificates at any time will equal the
aggregate Certificate Balance of the Principal
Balance Certificates at such time. The Notional
Amount of the Class X Certificates is used
solely for the purpose of determining the amount
of interest to be distributed on such Class of
Certificates and does not represent the right to
receive any distributions of principal. The
Class X Certificates consist of the Class X
Components (as defined herein) each
corresponding to a different Class of Principal
Balance Certificates.
No Class of REMIC Residual Certificates will
have a Certificate Balance.
See "Description of the Certificates --
Certificate Balances and Notional Amounts" and
"-- Distributions" herein.
Pass-Through Rates.......... The Pass-Through Rate applicable to the Class X
Certificates for the initial Distribution Date
will equal approximately 0.442% per annum. The
Pass-Through Rate applicable to the Class X
Certificates for each Distribution Date
subsequent to the initial Distribution Date will
be equal to the weighted average (by Certificate
Balance of the corresponding Class of Principal
Balance Certificates) of the Pass-Through Rates
applicable to each Class X Component. The
Pass-Through Rate for each Class X Component will
equal the excess, if any, of the Weighted Average
Net Mortgage Rate (as defined herein) for such
Distribution Date over the Pass-Through Rate for
such Distribution Date applicable to the related
Class of Principal Balance Certificates.The
Pass-Through Rate for any Class X Component
relating to a Class of Principal Balance
Certificates having a Pass-Through Rate equal to
the Weighted Average Net Mortgage Rate will be
zero.
The Pass-Through Rates applicable to the Class
A-1 and Class A-2 Certificates will be fixed and
will be equal to the respective Pass-Through
Rates specified for each such Class on the cover
page hereof. The Pass-Through Rates applicable
to the Class B, Class C and Class D Certificates
for any Distribution Date will be equal to the
lesser of the respective Pass-Through Rates
specified for each such Class on the cover page
hereof and the Weighted Average Net Mortgage
Rate with respect to such Distribution Date. The
Pass-Through Rates applicable to the Class E and
Class F Certificates for any Distribution Date
will be equal to the Weighted Average Net
Mortgage Rate with respect to such Distribution
Date.
The Pass-Through Rates applicable to the Class
G, Class H and Class J Certificates for any
Distribution Date will be equal to the Weighted
Average Net Mortgage Rate with respect to such
Distribution Date. The Pass-Through Rates
applicable to the Class K, Class L, Class M and
Class N Certificates for any Distribution Date
will be equal to the lesser of a specified rate
and the Weighted Average Net Mortgage Rate with
respect to such Distribution Date. No Class of
REMIC Residual Certificates will have a
Pass-Through Rate.
S-13
<PAGE>
Distributions of Interest and Principal
on the Senior Certificates.. On each Distribution Date, to the extent of the
Available Distribution Amount (as defined herein)
for such date, the holders of the respective
Classes of Senior Certificates will be entitled
to receive distributions of interest, on a pro
rata basis, in an amount equal to all
Distributable Certificate Interest (as defined
herein) in respect of each such Class of
Certificates for such Distribution Date and, to
the extent not previously paid, for all prior
Distribution Dates, if any.
On each Distribution Date, following all
required distributions of interest on the Senior
Certificates, the Trustee will apply the
remaining portion, if any, of the Available
Distribution Amount for such date to make
payments of principal on the respective Classes
of Class A Certificates, in the amounts and
order described herein, up to an aggregate
amount equal to the lesser of (i) the then
aggregate of the outstanding Certificate Balance
of the Class A Certificates and (ii) the
aggregate of the Principal Distribution Amount
(as defined herein) for such Distribution Date
(or, on the final Distribution Date in
connection with a termination of the Trust Fund
(see "Description of the Certificates --
Termination; Retirement of Certificates"
herein), up to an aggregate amount equal to the
aggregate of the then outstanding Certificate
Balances of the Class A Certificates). See
"Description of the Certificates --
Distributions" herein.
Distributions of Interest
and Principal on the Class B,
Class C, Class D, Class E and
Class F Certificates ...... On each Distribution Date, following all
required distributions of interest and principal
on the Senior Certificates, the Trustee will
apply the remaining portion, if any, of the
Available Distribution Amount for such date to
make payments of interest and principal on the
Class B, Class C, Class D, Class E and Class F
Certificates, in that order. On each
Distribution Date, the holders of each such
Class of Offered Certificates, to the extent of
the Available Distribution Amount remaining
after all required distributions of interest and
principal on the Senior Certificates and each
other Class of Offered Certificates, if any,
with an earlier alphabetical Class designation,
will be entitled: first, to distributions of
interest up to an amount equal to all
Distributable Certificate Interest in respect of
such particular Class of Offered Certificates
for such Distribution Date and, to the extent
not previously paid, for all prior Distribution
Dates, if any, and, then, if the Certificate
Balances of the Class A Certificates and each
other Class of Principal Balance Certificates,
if any, with an earlier alphabetical Class
designation, have been reduced to zero, to
distributions of principal up to an amount equal
to the lesser of (i) the then outstanding
Certificate Balance of such particular Class of
Offered Certificates and (ii) the aggregate of
the Principal Distribution Amount for such
Distribution Date (net of any portion of such
aggregate amount paid in retirement of the Class
A Certificates and/or any other Class of
Principal
S-14
<PAGE>
Balance Certificates with an earlier
alphabetical Class designation) (or, on the
final Distribution Date in connection with a
termination of the Trust Fund, up to an amount
equal to the then outstanding Certificate
Balance of such particular Class of Offered
Certificates). See "Description of the
Certificates -- Distributions" herein.
Distributions of Prepayment
Premiums................... Any Prepayment Premium actually collected with
respect to a Mortgage Loan during any particular
Collection Period (as defined herein) will be
distributed among certain Classes of Certificates
in the amounts and priorities described under
"Description of the Certificates -- Distributions
-- Distributions of Prepayment Premiums" herein.
Certain Yield and Prepayment
Considerations............. The yield on each Class of Offered Certificates
will depend on, among other things, the
Pass-Through Rate for such Certificates. The
yield on any Offered Certificate that is
purchased at a discount or premium will also be
affected by the rate and timing of distributions
in respect of principal on such Certificate,
which in turn will be affected by (i) the rate
and timing of principal payments (including
principal prepayments) on the Mortgage Loans and
(ii) the extent to which such principal payments
are applied on any Distribution Date in reduction
of the Certificate Balance of the Class to which
such Certificate belongs. See "Description of the
Certificates -- Distributions -- Application of
the Available Distribution Amount" and "--
Distributions -- Principal Distribution Amount"
herein.
An investor that purchases an Offered
Certificate at a discount should consider the
risk that a slower than anticipated rate of
principal payments on such Certificate will
result in an actual yield that is lower than
such investor's expected yield. An investor that
purchases any Offered Certificate at a premium
should consider the risk that a faster than
anticipated rate of principal payments on such
Certificate will result in an actual yield that
is lower than such investor's expected yield.
Insofar as an investor's initial investment in
any Offered Certificate is returned in the form
of payments of principal thereon, there can be
no assurance that such amounts can be reinvested
in a comparable alternative investment with a
comparable yield.
The actual rate of prepayment of principal on
the Mortgage Loans cannot be predicted. The
investment performance of the Offered
Certificates may vary materially and adversely
from the investment expectations of investors
due to prepayments on the Mortgage Loans being
higher or lower than anticipated by investors.
The actual yield to the holder of an Offered
Certificate may not be equal to the yield
anticipated at the time of purchase of the
Certificate or, notwithstanding that the actual
yield is equal to the yield anticipated at that
time, the total return on investment expected by
the investor or the expected
S-15
<PAGE>
weighted average life of the Certificate may not
be realized. For a discussion of certain factors
affecting prepayment of the Mortgage Loans,
including the effect of Prepayment Premiums, see
"Yield and Maturity Considerations" herein. In
deciding whether to purchase any Offered
Certificates, an investor should make an
independent decision as to the appropriate
prepayment assumptions to be used.
The Pass-Through Rates applicable to the Class
B, Class C and Class D Certificates for any
Distribution Date will be equal to the lesser of
the respective Pass-Through Rates specified for
each such Class on the cover page hereof and the
Weighted Average Net Mortgage Rate with respect
to such Distribution Date. The Pass-Through
Rates applicable to the Class E and Class F
Certificates for any Distribution Date will be
equal to the Weighted Average Net Mortgage Rate
with respect to such Distribution Date. Losses
or payments of principal on Mortgage Loans with
higher Mortgage Rates could result in a
reduction in the Weighted Average Net Mortgage
Rate thereby reducing the Pass-Through Rates for
the Class E and Class F Certificates and, to the
extent that the Weighted Average Net Mortgage
Rate is reduced below the specified fixed rates
set forth on the cover hereof for the Class B,
Class C and Class D Certificates, reducing the
Pass-Through Rates on such Classes of Offered
Certificates.
The Class X Certificates are interest-only
Certificates and are not entitled to any
distributions in respect of principal. The yield
to maturity of the Class X Certificates will be
especially sensitive to the prepayment, loan
extension, repurchase, default and liquidation
experience on, the Mortgage Loans, which
prepayment, repurchase, default and recovery
experience may fluctuate significantly from time
to time. A rate of principal payments and
liquidations on the Mortgage Loans that is more
rapid than expected by investors will have a
material negative effect on the yield to
maturity of the Class X Certificates and may
result in holders not recouping their initial
investments. In addition, the Pass-Through Rate
for any Class X Component relating to a Class of
Principal Balance Certificates having a
Pass-Through Rate equal to the Weighted Average
Net Mortgage Rate will be zero. See "Yield and
Maturity Considerations -- Yield Sensitivity of
the Class X Certificates" herein.
P&I Advances................ The Servicer is required to make advances
(each, a "P&I Advance") of delinquent principal
and interest on the Mortgage Loans, under the
circumstances and subject to the limitations set
forth herein. In no event will the Servicer be
required to advance the full amount of any
delinquent Balloon Payment. If the Servicer fails
to make a required P&I Advance, the Trustee will
be required to make such P&I Advance. If the
Trustee fails to make a required P&I Advance, the
Fiscal Agent will be required to make such P&I
Advance. The Servicer, the Trustee and the Fiscal
Agent will each be entitled to interest on any
P&I
S-16
<PAGE>
Advances made and certain servicing expenses
incurred by it or on its behalf, such interest
accruing at the rate and payable under the
circumstances described herein. See "Description
of the Certificates -- P&I Advances" herein and
"Description of the Certificates -- Advances in
Respect of Delinquencies" and "The Pooling and
Servicing Agreements -- Certificate Account" in
the Prospectus.
Subordination; Allocation of Losses
and Certain Expenses....... The rights of the holders of the Subordinate
Certificates to receive distributions with
respect to the Mortgage Loans will be subordinate
to the rights of the holders of the Senior
Certificates and, further, in the case of any
particular Class of Subordinate Certificates, to
the rights of the holders of each other Class of
Subordinate Certificates, if any, with an earlier
alphabetical Class designation, in each case to
the extent described herein and in the
Prospectus. In addition, the rights of the
holders of the REMIC Residual Certificates to
receive distributions with respect to the
Mortgage Loans will be subordinate to the rights
of the holders of the REMIC Regular Certificates,
to the extent described herein and in the
Prospectus. Such subordination will be
accomplished by the application of the Available
Distribution Amount on each Distribution Date to
distributions on the respective Classes of
Certificates in the order described herein under
"Description of the Certificates -- Distributions
-- Application of the Available Distribution
Amount." No other form of Credit Support will be
available for the benefit of the holders of the
Offered Certificates.
If, following the distributions to be made in
respect of the Certificates on any Distribution
Date, the aggregate Stated Principal Balance of
the Mortgage Asset Pool that will be outstanding
immediately following such Distribution Date is
less than the then aggregate Certificate Balance
of the Principal Balance Certificates, the
Certificate Balances of the Subordinate
Certificates will be reduced, in reverse
alphabetical order, until, in the case of each
such Class of Subordinate Certificates, such
deficit (or the related Certificate Balance) is
reduced to zero (whichever occurs first). If any
portion of such deficit remains outstanding at
such time as the aggregate Certificate Balance
of the Subordinate Certificates is reduced to
zero, then, the respective Certificate Balances
of the Class A-1 and Class A-2 Certificates will
be reduced, pro rata in accordance with the
relative sizes of the remaining Certificate
Balances of such Classes of Certificates, until
such deficit (or each such Certificate Balance)
is reduced to zero. Any such deficit may be the
result of Realized Losses (as defined herein)
incurred in respect of the Mortgage Loans and/or
Additional Trust Fund Expenses (also, as defined
herein). The foregoing reductions in the
Certificate Balances of the Principal Balance
Certificates will be deemed to constitute an
allocation of any
S-17
<PAGE>
such Realized Losses and Additional Trust Fund
Expenses. Any such allocation will also have the
effect of reducing the Notional Amount of the
Class X Certificates.
Optional Termination........ At its option, on any Distribution Date on
which the remaining aggregate Stated Principal
Balance of the Mortgage Asset Pool is less than
1% of the Initial Pool Balance, the Servicer or
the Depositor may purchase all of the Mortgage
Loans and REO Properties, and thereby effect
termination of the Trust Fund and early
retirement of the then outstanding Certificates.
See "Description of the Certificates --
Termination; Retirement of Certificates" herein
and in the Prospectus.
Certain Federal Income Tax
Consequences............... For federal income tax purposes, three separate
REMIC elections will be made with respect to
certain segregated asset pools which make up the
Trust Fund, the resulting REMICs being herein
referred to as REMIC I, REMIC II and REMIC III,
respectively. The assets of REMIC I will include
the Mortgage Loans, any REO Properties acquired
on behalf of the Certificateholders, the
Certificate Account, the REO Account (if
established) and any Replacement Mortgage Loans
substituted for Deleted Mortgage Loans (as
defined herein). For federal income tax purposes,
(i) the separate, uncertificated regular
interests in REMIC I will be the "regular
interests" in REMIC I and will constitute the
assets of REMIC II, (ii) the Class R-I
Certificates will be the sole class of "residual
interests" in REMIC I, (iii) the separate,
uncertificated regular interests in REMIC II will
be the "regular interests" in REMIC II and will
constitute the assets of REMIC III, (iv) the
Class R-II Certificates will be the sole class of
"residual interests" in REMIC II, (v) the REMIC
Regular Certificates will be the "regular
interests" in, and generally will be treated as
debt obligations of, REMIC III, and (vi) the
Class R-III Certificates will be the sole class
of "residual interests" in REMIC III.
For further information regarding the federal
income tax consequences of investing in the
Offered Certificates, see "Certain Federal
Income Tax Consequences" herein and in the
Prospectus.
Ratings..................... It is a condition to their issuance that the
Offered Certificates receive from Moody's
Investors Service, Inc. ("Moody's") and Fitch
IBCA, Inc. ("Fitch IBCA" and together with
Moody's, the "Rating Agencies") the credit
ratings indicated herein. The ratings of the
Offered Certificates address the timely payment
thereon of interest and, to the extent
applicable, the ultimate payment thereon of
principal on or before the Rated Final
Distribution Date. The ratings of the Offered
Certificates do not, however, represent any
assessment of (i) the likelihood or frequency of
principal prepayments (whether voluntary or
involuntary) on the Mortgage Loans, (ii) the
corresponding effect
S-18
<PAGE>
on yield to investors, (iii) the possibility
that, as a result of prepayments, investors in
the Class X Certificates may realize a lower
than anticipated yield or may not fully recover
their initial investment or (iv) whether and to
what extent Prepayment Premiums will be
received. Further, a security rating does not
represent any assessment of the yield to
maturity that investors may experience or the
possibility that the holders of the Class X
Certificates might not fully recover their
investment in the event of rapid prepayments of
the Mortgage Loans (including both voluntary and
involuntary prepayments). In general, the
ratings thus address credit risk and not
prepayment risk. As described herein, the
amounts payable with respect to the Class X
Certificates consist only of interest. If the
entire pool were to prepay in the initial month,
with the result that the Class X
Certificateholders receive only a single month's
interest and thus suffer a nearly complete loss
of their investment, all amounts "due" to such
Holders will nevertheless have been paid, and
such result is consistent with the "AAA" rating
received on the Class X Certificates. The Class
X Certificates' Notional Amount upon which
interest is calculated is reduced by the
allocation of Realized Losses, Additional Trust
Fund Expenses and prepayments, whether voluntary
or involuntary. The rating does not address the
timing or magnitude of reductions of such
notional amount, but only the obligation to pay
interest timely on the Notional Amount as so
reduced from time to time. Accordingly, the
ratings of the Class X Certificates should be
evaluated independently from similar ratings on
other types of securities. The ratings of the
Offered Certificates also do not address certain
other matters as described under "Ratings"
herein. A security rating is not a
recommendation to buy, sell or hold securities
and may be subject to revision or withdrawal at
any time by the assigning rating agency. See
"Ratings" herein.
Legal Investment............ The Offered Certificates will not be "mortgage
related securities" within the meaning of SMMEA.
Institutions whose investment activities are
subject to legal investment laws and regulations,
regulatory capital requirements or review by
regulatory authorities may be subject to
restrictions on investment in the Offered
Certificates and should consult their legal
advisors to determine whether and to what extent
the Offered Certificates constitute legal
investments for them. See "Legal Investment"
herein and in the Prospectus.
ERISA Considerations........ A fiduciary of a Plan should review with its
counsel whether the purchase or holding of
Offered Certificates could give rise to a
transaction that is prohibited or is not
otherwise permitted either under ERISA or Section
4975 of the Code or whether there exists any
statutory or administrative exemption applicable
thereto. See "ERISA Considerations" herein and in
the Prospectus.
S-19
<PAGE>
RISK FACTORS
Prospective purchasers of Offered Certificates should consider, among
other things, the following risk factors (as well as the risk factors set forth
under "Risk Factors" in the Prospectus) in connection with an investment
therein.
THE CERTIFICATES
Subordination of Class B, Class C, Class D, Class E and Class F
Certificates; Allocation of Realized Losses. As described herein, the rights of
holders of the Subordinate Certificates, including the Class B, Class C, Class
D, Class E and Class F Certificates, to receive certain payments of principal
and interest otherwise payable on their Certificates, in the case of each Class
of Subordinate Certificates, will be subordinated to such rights of the holders
of the Senior Certificates and the holders of each other Class of Subordinate
Certificates, if any, having an earlier alphabetical Class designation, to the
extent set forth herein. See "Description of the Certificates -- Distributions"
herein. Realized Losses on the Mortgage Loans and Additional Trust Fund
Expenses will be allocated to the Class N, Class M, Class L, Class K, Class J,
Class H, Class G, Class F, Class E, Class D, Class C and Class B Certificates,
in that order, reducing amounts payable to each such Class. Any such allocation
of Realized Losses and Additional Trust Fund Expenses will have the effect of
reducing the Notional Amount of the Class X Certificates by the amount so
allocated.
Potential Conflicts of Interest. As described herein, the Servicer will
have considerable latitude in determining whether to liquidate or modify
defaulted Mortgage Loans. See "Servicing of the Mortgage Loans --
Modifications, Waivers, Amendments and Consents" herein. GMACCM, the Servicer,
expects to acquire in connection with the initial issuance thereof a portion of
the Class X Certificates and certain of the Subordinate Certificates, including
a portion of the Class N Certificates. In addition, subject to the conditions
described herein, the holder or holders of Certificates representing more than
50% of the voting rights allocated to the Controlling Class (as described
herein and initially consisting of the Class N Certificates) may terminate the
rights and obligations of the Servicer in respect of Specially Serviced
Mortgage Loans and REO Properties (each as defined herein) and may appoint a
replacement to perform such duties, which replacement may be any such holder or
an affiliate thereof. Investors in the Offered Certificates should consider
that, although the Servicer will be obligated to act in accordance with the
terms of the Pooling and Servicing Agreement, it may have interests when
dealing with defaulted Mortgage Loans that are in conflict with those of the
holders of the Offered Certificates. See "Servicing of the Mortgage Loans --
Termination of the Servicer with Respect to Specially Serviced Mortgage Loans
and REO Properties" herein.
THE MORTGAGE LOANS
Environmental Considerations. All of the Mortgaged Properties were subject
to a "Phase I" environmental site assessment (or an update of a previously
conducted assessment) and, in the case of certain Mortgage Loans, a "Phase II,"
which were performed on behalf of the related Mortgage Loan Seller, or as to
which the related report was delivered to the related Mortgage Loan Seller in
connection with its acquisition or origination of the related Mortgage Loan.
With respect to all but four (4) of the Mortgage Loans (which represent 1.70%
of the Initial Pool Balance), such environmental assessments (or updates) were
performed during the 12-month period prior to the Cut-off Date. No such
environmental assessment revealed any material adverse environmental condition
or circumstance with respect to any Mortgaged Property, except for: (i) those
cases where such conditions were remediated or abated prior to the Delivery
Date; (ii) those cases in which an operations and maintenance plan or periodic
monitoring of such Mortgaged Property or nearby properties was recommended;
(iii) those cases involving a leaking underground storage tank or groundwater
contamination at a nearby property, which condition had not yet materially
affected such Mortgaged Property and as to which a responsible party has either
been identified under applicable law or was then conducting remediation of the
related condition; or (iv) those cases in which groundwater, soil or other
contamination was identified or suspected, and an escrow reserve, indemnity or
other collateral was provided to cover the estimated costs of continued
monitoring, investigation, testing or remediation.
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The Servicer is required to obtain an environmental site assessment of a
Mortgaged Property securing a defaulted Mortgage Loan prior to acquiring title
thereto or assuming its operation. Such requirement effectively precludes
enforcement of the security for the related Mortgage Note until a satisfactory
environmental site assessment is obtained (or until any required remedial
action is thereafter taken), but will decrease the likelihood that the Trust
Fund will become liable for a material adverse environmental condition at the
Mortgaged Property. However, there can be no assurance that this requirement
will effectively insulate the Trust Fund from potential liability for a
materially adverse environmental condition at any Mortgaged Property. See "The
Pooling and Servicing Agreements -- Realization Upon Defaulted Mortgage Loans,"
"Risk Factors -- Environmental Considerations" and "Certain Legal Aspects of
Mortgage Loans -- Environmental Considerations" in the Prospectus.
Geographic Concentration. Eighty-five (85) Mortgaged Properties, securing
Mortgage Loans which represent 21.61% of the Initial Pool Balance, are located
in Texas; thirteen (13) Mortgaged Properties, securing Mortgage Loans which
represent 10.59% of the Initial Pool Balance, are located in New York;
twenty-five (25) Mortgaged Properties, securing Mortgage Loans which represent
9.34% of the Initial Pool Balance, are located in California; twenty-three (23)
Mortgaged Properties, securing Mortgage Loans which represent 7.16% of the
Initial Pool Balance, are located in Arizona; thirty-four (34) Mortgaged
Properties, securing Mortgage Loans which represent 6.99% of the Initial Pool
Balance, are located in Illinois; and three (3) Mortgaged Properties, securing
Mortgage Loans which represent 4.51% of the Initial Pool Balance, are located
in the District of Columbia. For purposes of describing geographic
concentration, the Senior Living Loan (as defined herein), which is secured by
87 Mortgaged Properties (including the Senior Living Account Properties, as
defined herein) located in two states, is treated as 87 Mortgage Loans, each of
which is allocated a Cut-off Date Principal Balance based on the Allocated
Principal Amounts thereof (as defined herein). In general, the level of such
concentration increases the exposure of the Mortgage Asset Pool to any adverse
economic or other developments, including earthquakes, hurricanes and other
natural disasters, that may occur in such States. In addition, improvements on
Mortgaged Properties located in California may be more susceptible to certain
types of special hazards not covered by insurance (such as earthquakes) than
properties located in other parts of the country. In general, the Mortgaged
Properties are not insured for earthquake risk. With respect to Mortgaged
Properties located in California, the related Mortgage Loan Seller generally
conducted seismic studies to assess the "probable maximum loss" for the related
Mortgaged Properties. In certain circumstances, the related borrower was
required to obtain earthquake insurance covering the Mortgaged Properties.
Certain of such Mortgaged Properties may be insured in amounts less than the
outstanding principal balances of such Mortgage Loans.
Mortgage Loans Not Insured. Except for the Senior Living Loan, which has
the benefit of a partial surety bond, none of the Mortgage Loans is insured or
guaranteed by the United States, any governmental entity or instrumentality, by
any private mortgage insurer or by the Depositor, the Underwriters, Servicer or
any Mortgage Loan Seller. As described herein, in certain limited
circumstances, a Mortgage Loan Seller may be obligated to repurchase or replace
a Mortgage Loan if its representations and warranties concerning such Mortgage
Loan are breached; however, there can be no assurance that any Mortgage Loan
Seller will be in a financial position to effect such repurchase or
substitution. See "Description of the Mortgage Asset Pool -- The Mortgage Loan
Sellers," "-- Assignment of the Mortgage Loans; Repurchases and Substitutions,"
and "-- Representations and Warranties; Repurchases" herein.
Non-Recourse Mortgage Loans. Substantially all of the Mortgage Loans are
non-recourse loans as to which recourse, in the event of a default, will be
limited to the related Mortgaged Property. In those cases where the loan
documents permit recourse to the borrower or a guarantor, no assurance can be
given that the financial condition of such borrower or guarantor will permit it
to satisfy its recourse obligations. Consequently, payment on each Mortgage
Loan prior to maturity is (or should be considered by investors to be)
dependent primarily on the sufficiency of the cash flow of the related
Mortgaged Property, and at maturity (whether at scheduled maturity or, in the
event of a default, upon the acceleration of such maturity) upon the then
market value of the related Mortgaged Property or the ability of the related
borrower to refinance the Mortgaged Property.
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Balloon Payments. One hundred three (103) of the Mortgage Loans, which
represent 61.40% of the Initial Pool Balance, provide for Balloon Payments to
be due at their respective stated maturity dates unless prepaid prior thereto.
Loans with Balloon Payments involve a greater likelihood of default than
self-amortizing loans because the ability of a borrower to make a Balloon
Payment typically will depend upon its ability either to refinance the loan or
to sell the related Mortgaged Property. See "Description of the Mortgage Asset
Pool -- Certain Terms and Conditions of the Mortgage Loans" herein and "Risk
Factors -- Balloon Payments; Borrower Default" in the Prospectus.
In order to maximize recoveries on defaulted Mortgage Loans, the Servicer
may extend and modify Mortgage Loans that are in material default or as to
which a payment default (including the failure to make a Balloon Payment) is
reasonably foreseeable; subject, however, to the limitations described under
"Servicing of the Mortgage Loans -- Modifications, Waivers, Amendments and
Consents" herein. There can be no assurance, however, that any such extension
or modification will increase the present value of recoveries in a given case.
Any delay in collection of a Balloon Payment that would otherwise be
distributable in respect of a Class of Offered Certificates, whether such delay
is due to borrower default or to modification of the related Mortgage Loan by
the Servicer, will likely extend the weighted average life of such Class of
Offered Certificates. See "Yield and Maturity Considerations" herein and in the
Prospectus.
Risks Particular to Multifamily Properties. Ninety (90) Mortgaged
Properties, securing Mortgage Loans which represent 26.15% of the Initial Pool
Balance, are secured by multifamily rental properties. Adverse economic
conditions, either local, regional or national, may limit the amount of rent
that can be charged for rental units, and may result in a reduction in timely
rent payments or a reduction in occupancy levels. Occupancy and rent levels may
also be affected by construction of additional housing units, local military
base closings, developments at local colleges and universities and national,
regional and local politics, including, in the case of multifamily rental
properties, current or future rent stabilization and rent control laws and
agreements. In addition, the level of mortgage interest rates may encourage
tenants in multifamily rental properties to purchase housing. Furthermore, tax
credit and city, state and federal housing subsidy or similar programs may
impose rent limitations and may adversely affect the ability of the applicable
borrowers to increase rents to maintain such Mortgaged Properties in proper
condition during periods of rapid inflation or declining market value of such
Mortgaged Properties. In addition, such programs may impose income restrictions
on tenants, which may reduce the number of eligible tenants in such Mortgaged
Properties and result in a reduction in occupancy rates applicable thereto.
Furthermore, some eligible tenants may not find any differences in rents
between such subsidized or supported properties and other multifamily rental
properties in the same area to be a sufficient economic incentive to reside at
a subsidized or supported property, which may have fewer amenities or otherwise
be less attractive as a residence. All of these conditions and events may
increase the possibility that a borrower may be unable to meet its obligations
under its Mortgage Loan.
Risks Particular to Retail Properties. Forty (40) Mortgaged Properties,
securing Mortgage Loans which represent 19.05% of the Initial Pool Balance, are
secured by retail properties. Significant factors determining the value of
retail properties are the quality of the tenants as well as fundamental aspects
of real estate such as location and market demographics. The correlation
between the success of tenant businesses and property value is more direct with
respect to retail properties than other types of commercial property because a
significant component of the total rent paid by retail tenants is often tied to
a percentage of gross sales. Significant tenants at a retail property play an
important part in generating customer traffic and making a retail property a
desirable location for other tenants at such property. Accordingly, retail
properties may be adversely affected if a significant tenant ceases operations
at such locations (which may occur on account of a voluntary decision not to
renew a lease, bankruptcy or insolvency of such tenant, such tenant's general
cessation of business activities or for other reasons). In addition, certain
tenants at retail properties may be entitled to terminate their leases or pay
reduced rent if an anchor tenant ceases operations at such property. In such
cases, there can be no assurance that any such anchor tenants will continue to
occupy space in the related shopping centers. See "Description of the Mortgage
Asset Pool -- Certain Terms and Conditions of the Mortgage Loans -- Tenant
Matters"
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herein. Furthermore, the correlation between the success of tenant businesses
and credit quality of the Mortgage Loan is increased when the property is a
single tenant property. For a description of risk factors relating to single
tenant properties see "-- Tenant Credit Risk" herein.
Unlike office or hospitality properties, retail properties also face
competition from sources outside a given real estate market. Catalogue
retailers, home shopping networks, the Internet, telemarketing and outlet
centers all compete with more traditional retail properties for consumer
dollars. Continued growth of these alternative retail outlets (which are often
characterized by lower operating costs) could adversely affect the rents
collectible at the retail properties which secure Mortgage Loans in the Trust
Fund.
Risks Particular to Skilled Nursing Facilities. Ninety-one (91) Mortgaged
Properties, securing Mortgage Loans which represent 17.53% of the Initial Pool
Balance, are secured by Mortgages on properties operated as skilled nursing
facilities. Significant factors determining the value of such properties
include federal and state laws, competition with similar properties on a local
and regional basis and the continued availability of revenue from government
reimbursement programs, primarily Medicaid and Medicare.
Such facilities may receive a substantial portion of their revenues from
government reimbursement programs, primarily Medicaid and Medicare. Medicaid
and Medicare are subject to statutory and regulatory changes, retroactive rate
adjustments, administrative rulings, policy interpretations, delays by fiscal
intermediaries and government funding restrictions, all of which can adversely
affect revenues from operation. Moreover, governmental payors have employed
cost-containment measures that limit payments to health care providers. In
addition, providers of long-term nursing care and other medical services are
highly regulated by federal, state and local law and are subject to, among
other things, federal and state licensing requirements, facility inspections,
rate setting, reimbursement policies, and laws relating to the adequacy of
medical care, distribution of pharmaceuticals, equipment, personnel, operating
policies and maintenance of and additions to facilities and services, any or
all of which factors can increase the cost of operation, limit growth and, in
extreme cases, require or result in suspension or cessation of operations.
Under applicable federal and state laws and regulations, Medicare and
Medicaid reimbursements are generally not permitted to be made to any person
other than the provider who actually furnished the related medical goods and
services. Accordingly, in the event of foreclosure on a nursing facility, a
subsequent lessee or operator of the facility would generally not be entitled
to obtain from government payors any outstanding reimbursement payments
relating to services furnished prior to such foreclosure.
Such facilities may be subject to state regulation that requires the
operators to be licensed (generally on an annual basis), and the facilities
must meet various state licensure requirements that relate, among other things,
to qualifications of personnel, quality of care and the adequacy of their
buildings, equipment and suppliers. In the event of foreclosure, there can be
no assurance that the Trustee or purchaser at a foreclosure sale would be
entitled to the rights under any required licenses and regulatory approvals, or
that such party, if required to apply in its own right, could obtain a new
license or a new approval. In addition, such facilities are generally "special
purpose" properties that are not readily converted to general residential,
retail or office use.
Risks Particular to Office Properties. Twenty-five (25) Mortgaged
Properties, securing Mortgage Loans which represent 10.85% of the Initial Pool
Balance, are secured by office properties. Significant factors determining the
value of office properties are the quality of the tenants in the building, the
physical attributes of the building in relation to competing buildings and the
strength and stability of the market area as a desirable business location.
Office properties may be adversely affected by an economic decline in the
business operated by the tenants. The risk of such an adverse effect is
increased if revenue is dependent on a single tenant or if there is a
significant concentration of tenants in a particular business or industry. For
a description of risk factors relating to single tenant properties see "--
Tenant Credit Risk" herein.
Office properties are also subject to competition with other office
properties in the same market. Competition is affected by a property's age,
condition, design (e.g., floor sizes and layout), access to transportation and
ability or inability to offer certain amenities to its tenants, including
sophisticated building systems (such as fiberoptic cables, satellite
communications or other base building technological features).
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The success of an office property also depends on the local economy. A
company's decision to locate office headquarters in a given area, for example,
may be affected by such factors as labor cost and quality, tax environment and
quality of life issues such as schools and cultural amenities. A central
business district may have an economy which is markedly different from that of
a suburb. The local economy and the financial condition of the owner will
impact on an office property's ability to attract stable tenants on a
consistent basis. In addition, the cost of refitting office space for a new
tenant is often more costly than for other property types.
Risks Particular to Hospitality Properties. Ten (10) Mortgaged Properties,
securing Mortgage Loans which represent 11.69% of the Initial Pool Balance, are
secured by hospitality properties. Various factors, including location, quality
and franchise affiliation, affect the economic viability of a hospitality
property. Adverse economic conditions, either local, regional or national, may
limit the amount that may be charged for a room and may result in a reduction
in occupancy levels. The construction of competing hospitality properties can
have similar effects. Because hospitality property rooms generally are rented
for short periods of time, hospitality properties tend to respond more quickly
to adverse economic conditions and competition than do other commercial
properties. In addition, the transferability of franchise license agreements
may be restricted. Furthermore, the ability of a hospitality property to
attract customers, and a portion of a hospitality property's revenues, may
depend on its having a liquor license. Such a license may not be transferable
in the event of a foreclosure on the related Mortgaged Property.
Risks Particular to Industrial Properties. Thirteen (13) Mortgaged
Properties, securing Mortgage Loans which represent 3.24% of the Initial Pool
Balance, are secured by industrial properties. Significant factors determining
the value of industrial properties are the quality of tenants, building design
and adaptability and the location of the property. Concerns about the quality
of tenants, particularly major tenants, are similar in both office properties
and industrial properties, although industrial properties are more frequently
dependent on a single tenant. For a description of risk factors relating to
single tenant properties see "-- Tenant Credit Risk" herein. In addition,
properties used for many industrial purposes are more prone to environmental
concerns than other property types.
Aspects of building site design and adaptability affect the value of an
industrial property. Site characteristics which are valuable to an industrial
property include clear heights, column spacing, zoning restrictions, number of
bays and bay depths, divisibility, truck turning radius and overall
functionality and accessibility. Location is also important because an
industrial property requires the availability of labor sources, proximity to
supply sources and customers and accessibility to rail lines, major roadways
and other distribution channels.
Risks Associated with Other Property Types. Mortgage loans secured by
other property types, such as parking garages, mixed use, mobile home parks and
hospitals, may pose risks not associated with loans secured by liens on other
types of income-producing real estate. Thirteen (13) Mortgaged Properties,
securing Mortgage Loans which represent approximately 6.81% of the Initial Pool
Balance, are secured by such other types of property. Such properties may be
"special purpose" properties that may have limited alternative uses.
Tenant Credit Risk. Income from and the market value of retail, office and
industrial Mortgaged Properties would be adversely affected if space in such
Mortgaged Properties could not be leased, if tenants were unable to meet their
lease obligations, if a significant tenant were to become a debtor in a
bankruptcy case under any bankruptcy or other similar law related to creditors
rights or if for any other reason rental payments could not be collected. If
tenant sales in the Mortgaged Properties that contain retail space were to
decline, rents based upon such sales would decline and tenants may be unable to
pay their rent or other occupancy costs. Upon the occurrence of an event of
default by a tenant, delays and costs in enforcing the lessor's rights could be
experienced. Repayment of the Mortgage Loans will be affected by the expiration
of space leases and the ability of the respective borrowers to renew the leases
or relet the space on comparable terms. Even if vacated space is successfully
relet, the costs associated with reletting, including tenant improvements,
leasing commissions and free rent, could
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exceed the amount of any reserves maintained for such purpose and could reduce
cash flow from the Mortgaged Properties. Although many of the Mortgage Loans
require the borrower to maintain escrows for such consideration, there can be
no assurance that such factors will not adversely impact the ability of a
borrower to repay a mortgage loan.
Management. The successful operation of a real estate project is dependent
on the performance and viability of the property manager of such project. The
property manager is responsible for responding to changes in the local market,
planning and implementing the rental structure, including establishing levels
of rent payments, and ensuring that maintenance and capital improvements can be
carried out in a timely fashion. Accordingly, by controlling costs, providing
appropriate service to tenants and seeing to the maintenance of improvements,
sound property management can improve cash flow, reduce vacancy, leasing and
repair costs and preserve building value. On the other hand, management errors
can, in some cases, impair the long term viability of a real estate project.
Certain of the Mortgaged Properties may be managed by property managers
affiliated with the respective borrowers. These property managers may also
manage and/or franchise additional properties, including Mortgaged Properties
or other properties that may compete with the Mortgaged Properties. Moreover,
affiliates of the managers and/or the borrowers, or the managers and/or the
borrowers themselves, may also own other properties, including competing
properties. Accordingly, the managers of the Mortgaged Properties and the
borrowers may experience conflicts of interest in the management and/or
ownership of such properties.
Limitations of Appraisals. An appraisal was conducted in respect of each
of the Mortgaged Properties in connection with the origination of the related
Mortgage Loan, and the resulting estimates of value are the bases of the
Cut-off Date LTV Ratios referred to herein. However, those estimates represent
the analysis and opinion of the person performing the appraisal or market
analysis and are not guarantees of present or future values. Moreover, the
values of the Mortgaged Properties may have fluctuated significantly since the
appraisal or market study was performed in connection with the origination of
the related Mortgage Loan and generally, no update of such appraisal or market
study has been performed since the date of origination. In addition, appraisals
seek to establish the amount a typically motivated buyer would pay a typically
motivated seller. Such amount could be significantly higher than the amount
obtained from the sale of a Mortgaged Property under a distress or liquidation
sale. Information regarding the values of Mortgaged Properties available to the
Depositor as of the Cut-off Date is presented in Annex A and Annex C hereto for
illustrative purposes only.
Risks of Secured Subordinate Financing. Certain of the Mortgaged
Properties are known to be encumbered by subordinated debt that is not part of
the Mortgage Asset Pool. For all of the Mortgage Loans, the holder of any
material subordinate debt has agreed not to foreclose for so long as the
related Mortgage Loan is outstanding and the Trust Fund is not pursuing a
foreclosure action. Substantially all of the Mortgage Loans either prohibit the
related borrower from encumbering the Mortgaged Property with additional
secured debt or require the consent of the holder of the first lien prior to so
encumbering such property. However, a violation of such prohibition may not
become evident until the related Mortgage Loan otherwise defaults.
The existence of any such additional subordinate indebtedness may increase
the difficulty of refinancing the related Mortgage Loan at maturity for the
purpose of making any Balloon Payments and the possibility that reduced cash
flow could result in deferred maintenance. Also, in the event that the holder
of the subordinated debt secured by a Mortgaged Property has filed for
bankruptcy or been placed in involuntary receivership, foreclosing on such
Mortgaged Property could be delayed.
Related Borrowers. Certain borrowers under the Mortgage Loans are
affiliated or under common control with one another. In such circumstances, any
adverse circumstances relating to a borrower or an affiliate thereof and
affecting one of the related Mortgage Loans or Mortgaged Properties could also
affect Mortgage Loans or Mortgaged Properties of the related borrower. In
particular, the bankruptcy or insolvency of any such borrower or affiliate
could have an adverse effect on the operation of all of the Mortgaged
Properties of that borrower and its affiliates and on the ability of such
related Mortgaged Properties to produce sufficient cash flow to make required
payments on the Mortgage Loans. For
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example, if a person that owns or directly or indirectly controls several
Mortgaged Properties experiences financial difficulty at one Mortgaged
Property, it could defer maintenance at one or more other Mortgaged Properties
in order to satisfy current expenses with respect to the Mortgaged Property
experiencing financial difficulty, or it could attempt to avert foreclosure by
filing a bankruptcy petition that might have the effect of interrupting
payments for an indefinite period on all the related Mortgage Loans. See
"Certain Legal Aspects of Mortgage Loans -- Bankruptcy Laws" in the Prospectus.
Concentration of Mortgage Loans. Several of the Mortgage Loans,
individually or together with other Mortgage Loans with which they are
cross-collateralized, have Cut-off Date Balances that are substantially higher
than the average Cut-off Date Balance, including one Mortgage Loan representing
15.68% of the Initial Pool Balance. In general, concentrations in a mortgage
pool of loans with larger-than-average balances can result in losses that are
more severe, relative to the size of the pool, than would be the case if the
aggregate balance of the pool were more evenly distributed.
Limitation on Enforceability of Cross-Collateralization. Eleven (11)
Mortgage Loans, representing in the aggregate 4.29% of the Initial Pool
Balance, are cross-collateralized with one or more other Mortgage Loans (the
"Cross-Collateralized Mortgage Loans"). Cross-collateralization arrangements
involving more than one borrower could be challenged as a fraudulent conveyance
by creditors of a borrower or by the representative or the bankruptcy estate of
a borrower, if a borrower were to become a debtor in a bankruptcy case.
Generally, under federal and most state fraudulent conveyance statutes, the
incurring of an obligation or the transfer of property by a person will be
subject to avoidance under certain circumstances if the person did not receive
fair consideration or reasonably equivalent value in exchange for such
obligation or transfer and (i) was insolvent or was rendered insolvent by such
obligation or transfer, (ii) was engaged in business or a transaction, or was
about to engage in business or a transaction, for which any property remaining
with the person has an unreasonably small capital or (iii) intended to, or
believed that it would, incur debts that would be beyond the person's ability
to pay as such debts matured. Accordingly, a lien granted by a borrower to
secure repayment of another borrower's Mortgage Loan could be avoided if a
court were to determine that (i) such borrower was insolvent at the time of
granting the lien, was rendered insolvent by the granting of the lien, or was
left with inadequate capital or was not able to pay its debts as they matured
and (ii) the borrower did not, when it allowed its Mortgaged Property to be
encumbered by a lien securing the entire indebtedness represented by the other
Mortgage Loan, receive fair consideration or reasonably equivalent value for
pledging such Mortgaged Property for the equal benefit of the other borrower.
See "Description of the Mortgage Asset Pool-Certain Terms and Conditions of the
Mortgage Loans -- Related Borrowers, Cross-Collateralized and Cross-Defaulted
Mortgage Loans."
Tax Considerations Related to Foreclosure. If the Trust Fund were to
acquire a Mortgaged Property after a default on the related Mortgage Loan
pursuant to a foreclosure or delivery of a deed in lieu of foreclosure, the
Servicer would be required to retain an independent contractor to operate and
manage the Mortgaged Property. By reference to rules applicable to real estate
investment trusts, such property will be considered "foreclosure property" for
a period of two full years after the taxable year of acquisition, with possible
extensions. Any net income from such "foreclosure property" other than
qualifying "rents from real property," will subject REMIC I to federal (and
possibly state or local) tax on such income at the highest marginal corporate
tax rate, thereby reducing net proceeds available for distribution to
Certificateholders.
Risks Associated with Mortgaged Properties located in California. As of
the Cut-off Date, twenty-five (25) of the Mortgaged Properties, securing
Mortgage Loans which represent 9.34% of the Initial Pool Balance, are located
in California. The following discussion contains a general summary of certain
legal aspects of loans secured by income-producing properties in California.
The summary does not purport to be complete nor does the summary reflect the
laws of any other state. The summary relates only to the topics covered and are
qualified in their entirety by reference to the applicable state laws being
discussed. See also "Certain Legal Aspects of Mortgage Loans" in the
Prospectus.
Mortgage loans in California are generally secured by deeds of trust.
Provided the deed of trust contains a private power of sale, a lender may
foreclose either non-judicially or judicially. Most lenders
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choose non-judicial foreclosure because the process typically may be completed
within a much shorter time frame; however, a lender is barred from obtaining a
deficiency judgment after a non-judicial foreclosure. If the lender opts for
judicial foreclosure, an application for a deficiency judgment must be filed
with the court within three months of the foreclosure sale. A deficiency
judgment may not exceed the difference between the indebtedness and the fair
value of the property, as determined by the court. Unless the lender waives the
right to a deficiency judgment, the borrower has a right to redeem the property
following a judicial foreclosure sale for a period of three months from the
date of sale if the proceeds from the sale were sufficient to satisfy the debt,
or for a period of one year if the proceeds were insufficient to satisfy the
debt. Junior lienholders do not have a right to redeem the property following a
judicial foreclosure sale unless the junior lien was created before July 1,
1983. California's form of the "one action rule" requires the lender to look
first to the property for satisfaction of the debt if the lender wants to
pursue a deficiency judgment. In general, a lender who takes any action to
enforce the debt other than judicial or non-judicial foreclosure violates the
one-action rule and may be deemed to have waived its security for the
indebtedness and, in some cases, may be prevented from collecting the
indebtedness altogether.
Leasehold Considerations. One (1) Mortgage Loan, which represents 3.40% of
the Initial Pool Balance, is secured solely by a Mortgage on the borrower's
leasehold interest under a ground lease. Three (3) Mortgage Loans, which
represent 6.58% of the Initial Pool Balance, are secured by a Mortgage on both
the borrower's leasehold interest and fee simple interest in the Mortgaged
Property. See "Description of the Mortgage Asset Pool -- Certain Terms and
Conditions of the Mortgage Loans -- Ground Leases" herein. Leasehold mortgage
loans are subject to certain risks not associated with mortgage loans secured
by a lien on the fee estate of the borrower. The most significant of these
risks is that if the borrower's leasehold were to be terminated upon a lease
default, the leasehold mortgagee would lose its security. However, in each of
these cases, each related ground lease requires the lessor to give the
leasehold mortgagee notice of lessee defaults and an opportunity to cure them,
permits the leasehold estate to be assigned to and by the leasehold mortgagee
at and after a foreclosure sale, and contains certain other protective
provisions typically included in a "mortgageable" ground lease.
Zoning and Building Code Compliance. Each Mortgage Loan Seller has taken
certain steps to establish that the use and operation of Mortgaged Properties
securing its Mortgage Loans were in compliance in all material respects with
all applicable zoning, land-use, building, fire and health ordinances, rules,
regulations and orders applicable to such Mortgaged Properties, but no
assurance can be made that such steps revealed all possible violations.
Evidence of such compliance may have been in the form of legal opinions,
certifications from government officials, title policy endorsements and/or
representations by the related borrower contained in the related Mortgage Loan
documents. Certain violations may exist at any particular Mortgaged Property,
but the related Mortgage Loan Seller does not consider any such violations
known to it to be material. In many cases, the use, operation and/or structure
of a Mortgaged Property constitutes a permitted nonconforming use and/or
structure, which may not be rebuilt to its current state in the event of a
material casualty event; however, it is expected that insurance proceeds would
be available for application to the related Mortgage Loan if such were to
occur.
Risk of Changes in Concentrations. As payments in respect of principal
(including in the form of voluntary principal prepayments, liquidations
proceeds and the repurchase prices for any Mortgage Loans repurchased due to
breaches of representations or warranties or defaults) are received with
respect to the Mortgage Loans, the remaining Mortgage Loans as a group may
exhibit increased concentration with respect to the type of properties,
property characteristics, number of borrowers and affiliated borrowers and
geographic location. Because principal on the Principal Balance Certificates is
payable in sequential order, the Classes thereof that have a lower priority
with respect to the payment of principal are relatively more likely to be
exposed to any risks associated with changes in concentrations of borrower,
loan or property characteristics.
Costs of Compliance with Americans with Disabilities Act. Under the
Americans with Disabilities Act of 1990 (the "ADA"), all public accommodations
are required to meet certain federal requirements
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related to access and use by disabled persons. To the extent the Mortgaged
Properties do not comply with the ADA, the borrowers may be required to incur
costs of complying with the ADA. In addition, noncompliance could result in the
imposition of fines by the federal government or an award of damages to private
litigants.
Litigation. There may be legal proceedings pending and, from time to time,
threatened against the borrowers and their affiliates relating to the business
of or arising out of the ordinary course of business of the borrowers and their
affiliates. There can be no assurance that such litigation will not have a
material adverse affect on the distributions to Certificateholders.
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DESCRIPTION OF THE MORTGAGE ASSET POOL
GENERAL
The Mortgage Asset Pool will consist of 181 Mortgage Loans with an Initial
Pool Balance of $1,438,000,264, subject to a variance of plus or minus 5%. See
"Description of the Trust Funds" and "Certain Legal Aspects of Mortgage Loans"
in the Prospectus. All numerical information provided herein with respect to
the Mortgage Loans is provided on an approximate basis. All weighted average
information provided herein with respect to the Mortgage Loans is determined by
related Cut-off Date Balance. The "Cut-off Date Balance" of each Mortgage Loan
is the unpaid principal balance thereof as of the Cut-off Date (which will be
May 1, 1998), after application of all payments of principal due on or before
such date, whether or not received.
Except as otherwise described below under "--Certain Terms and Conditions
of the Mortgage Loans -- Related Borrowers, Cross-Collateralized and
Cross-Defaulted Mortgage Loans," each Mortgage Loan is evidenced by a Mortgage
Note and secured by a Mortgage that creates a first mortgage lien on a fee
simple and/or leasehold interest in a Mortgaged Property, improved by
multifamily, retail, skilled nursing, office, industrial, cooperative housing,
hospitality or other commercial property.
Ten (10) of the Mortgage Loans (other than the Cross-Collateralized
Mortgage Loans), which represent 27.72% of the Initial Pool Balance, are
secured by more than one Mortgaged Property, including the Senior Living Loan,
which is secured by 74 Mortgaged Properties and 13 Senior Living Account
Properties (as defined herein). Accordingly, the total number of Mortgage Loans
reflected herein is 181, while the total number of Mortgaged Properties
reflected herein is 294.
The Mortgage Asset Pool includes five (5) separate sets of
Cross-Collateralized Mortgage Loans, which represent in the aggregate 4.29% of
the Initial Pool Balance. See "--Certain Terms and Conditions of the Mortgage
Loans -- Related Borrowers, Cross-Collateralized and Cross-Defaulted Mortgage
Loans" below and Annex A hereto.
Substantially all the Mortgage Loans constitute nonrecourse obligations of
the related borrower and, upon any such borrower's default in the payment of
any amount due under the related Mortgage Loan, the holder thereof may look
only to the related Mortgaged Property or Properties for satisfaction of the
borrower's obligation. In addition, in those cases where recourse to a borrower
or guarantor is permitted by the loan documents, no assurance can be given that
the financial condition of such borrower or guarantor will permit it to satisfy
its recourse obligations. Except for the Senior Living Loan which has the
benefit of a partial surety bond, none of the Mortgage Loans is insured or
guaranteed by the United States, any governmental entity or instrumentality, by
any private mortgage insurer, or by the Depositor, Servicer or any Mortgage
Loan Seller.
Twenty-nine (29) of the Mortgage Loans (the "GACC Mortgage Loans"), which
represent 16.67% of the Initial Pool Balance, are currently held by GACC.
Substantially all of the GACC Mortgage Loans were originated by GACC or its
affiliates. One hundred fifty-two (152) of the Mortgage Loans (the "GMACCM
Mortgage Loans"), which represent 83.33% of the Initial Pool Balance, are
currently held by GMACCM. All of the GMACCM Mortgage Loans were originated by
GMACCM.
On or prior to the Delivery Date, the Depositor will acquire the Mortgage
Loans from the Mortgage Loan Sellers, in each case pursuant to a purchase
agreement to be entered into between the Depositor and the related Mortgage
Loan Seller (each, a "Mortgage Loan Purchase Agreement"). The Depositor will
thereupon assign its interests in the Mortgage Loans, without recourse, to the
Trustee for the benefit of the Certificateholders. See "--The Mortgage Loan
Sellers" and "--Assignment of Mortgage Loans; Repurchases and Substitutions"
below. Each Mortgage Loan Seller constitutes a "Mortgage Asset Seller" for
purposes of the Prospectus.
CERTAIN TERMS AND CONDITIONS OF THE MORTGAGE LOANS
Due Dates. One hundred seventy-eight (178) of the Mortgage Loans provide
for scheduled monthly payments of principal and/or interest ("Monthly
Payments") on Due Dates which are the first day
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of each month. Three (3) of the Mortgage Loans provide for Monthly Payments on
Due Dates which are the tenth day of each month. In the case of certain
Mortgage Loans, the related Balloon Payment may be due on a day other than the
related Due Date for Monthly Payments (any resulting Balloon Payment Interest
Shortfalls (as defined herein) to be covered by the Servicer out of its own
funds). See "Servicing of the Mortgage Loans -- Servicing and Other
Compensation and Payment of Expenses" herein.
None of the Mortgage Loans provide for a grace period for the payment of
Monthly Payments of more than fifteen days.
Mortgage Rates; Calculations of Interest. One hundred sixty (160) of the
Mortgage Loans, which represent 68.04% of the Initial Pool Balance, accrue
interest at fixed interest rates on the basis of a 360-day year consisting of
twelve 30-day months. Twenty-one (21) of the Mortgage Loans, which represent
31.96% of the Initial Pool Balance, accrue interest on the basis of the actual
number of days elapsed in a year consisting of 360 days (with respect to one of
such Mortgage Loans, after an initial interest-only period).
As of the Cut-off Date, the Mortgage Rates of the Mortgage Loans range
from 6.70% to 8.875% per annum, and the weighted average Mortgage Rate of the
Mortgage Loans is 7.20% per annum.
Hyperamortization. Thirty-four (34) of the Mortgage Loans, which represent
27.29% of the Initial Pool Balance, bear interest at their respective Mortgage
Rates until an Anticipated Repayment Date. Commencing on the respective
Anticipated Repayment Date, except as described below, each such Mortgage Loan
generally will bear interest at a fixed rate (the "Revised Rate") per annum
equal to the Mortgage Rate plus 2.0%. Excess Interest on such Mortgage Loans
will be deferred until the principal balance thereof is reduced to zero.
Non-payment of such Excess Interest will not constitute a default under such
Mortgage Loans prior to the related maturity date. To the extent Excess
Interest is unpaid, it will, except where limited by applicable law, continue
to accrue interest at the Revised Rate. Prior to the Anticipated Repayment
Date, borrowers under ARD Loans will be required to enter into a lockbox
agreement whereby all revenue will be deposited directly into a designated
account (the "Lockbox Account") controlled by the Servicer. From and after the
Anticipated Repayment Date, in addition to paying interest (at the Mortgage
Rate) and principal (based on the amortization schedule), the related borrower
generally will be required to apply all monthly cash flow from the related
Mortgaged Property to pay the following amounts in the following order of
priority: (i) payments to required escrow funds, (ii) payment of operating
expenses pursuant to the terms of an annual budget approved by the Servicer,
(iii) payment of approved extraordinary operating expenses or capital expenses
not set forth in the approved annual budget or allotted for in any escrow fund,
(iv) principal on the Mortgage Loan until such principal is paid in full and
(v) to Excess Interest. As described below, ARD Loans generally provide that
the related borrower is prohibited from prepaying the Mortgage Loan until zero
to six months prior to the Anticipated Repayment Date but, upon the
commencement of such period, may prepay the loan, in whole or in part, without
payment of a Prepayment Premium. The Anticipated Repayment Date for each ARD
Loan is listed in Annex A.
Amortization of Principal. The Mortgage Asset Pool consists of one hundred
three (103) Balloon Loans, which represent 61.40% of the Initial Pool Balance;
thirty-four (34) ARD Loans, which represent 27.29% of the Initial Pool Balance;
and forty-four (44) fully amortizing Mortgage Loans, which represent 11.30% of
the Initial Pool Balance.
One (1) Mortgage Loan, which represents 0.32% of the Initial Pool Balance,
is a "split amortization" Mortgage Loan that amortizes at a certain
amortization schedule for a specified period following origination, and
thereafter amortizes at a different amortization schedule until maturity. No
assurance is given as to the effect of such split amortization on prepayment of
such Mortgage Loan. See "Certain Characteristics of the Mortgage Loans--Split
Amortization Loans" in Annex A hereto.
In addition, three (3) Mortgage Loans, which represent 3.72% of the
Initial Pool Balance, provide for payments of interest only for up to 36 months
following origination before payments of principal are due. The total dollar
amount of the Monthly Payment with respect to each such Mortgage Loan will be
subject
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to a one-time increase in order to permit the commencement of scheduled
amortization of such loan. See "Risk Factors -- Balloon Payments; Borrower
Default" in the Prospectus. No Mortgage Loan (other than the ARD Loans) permits
negative amortization or the deferral of accrued interest.
Prepayment Provisions. As of the Cut-off Date, all of the Mortgage Loans
impose some restriction on voluntary principal prepayments, whether in the form
of an absolute prohibition or a requirement that any voluntary principal
prepayment be accompanied by a Prepayment Premium.
As described herein, Prepayment Premiums actually collected on the
Mortgage Loans will be distributed to the respective Classes of
Certificateholders in the amounts and priorities described under "Description
of the Certificates -- Distributions -- Distributions of Prepayment Premiums"
herein. The enforceability, under the laws of a number of states, of provisions
similar to the provisions of the Mortgage Loans providing for the payment of a
Prepayment Premium upon an involuntary prepayment is unclear. No assurance can
be given that, at any time that any Prepayment Premium is required to be made
in connection with an involuntary prepayment, the obligation to pay such
Prepayment Premium will be enforceable under applicable law or, if enforceable,
the foreclosure proceeds will be sufficient to make such payment. Liquidation
Proceeds recovered in respect of any defaulted Mortgage Loan will, in general,
be applied to cover outstanding servicing expenses and unpaid principal and
interest prior to being applied to cover any Prepayment Premium due in
connection with the liquidation of such Mortgage Loan. The Depositor makes no
representation as to the enforceability of the provision of any Mortgage Loan
requiring the payment of a Prepayment Premium or as to the collectability of
any Prepayment Premium. In general, no Prepayment Premium will be payable upon
any mandatory prepayment of a Mortgage Loan in connection with a casualty or
condemnation. See "Annex A" herein and "Certain Legal Aspects of Mortgage Loans
- -- Default Interest and Limitations on Prepayments" in the Prospectus.
No Prepayment Premium will be payable in connection with any repurchase of
a Mortgage Loan by a Mortgage Loan Seller for a material breach of
representation or warranty on the part of such Mortgage Loan Seller or any
failure to deliver documentation relating thereto, nor will any Prepayment
Premium be payable in connection with the purchase of all of the Mortgage Loans
and any REO Properties by the Servicer or the Depositor in connection with the
termination of the Trust Fund or in connection with the purchase of defaulted
Mortgage Loans by the Servicer or any holder or holders of Certificates
evidencing a majority interest in the Controlling Class. See "-- Assignment of
the Mortgage Loans; Repurchases and Substitutions" and "-- Representations and
Warranties; Repurchases" and "Description of the Certificates -- Termination;
Retirement of Certificates" herein.
Defeasance. Forty-three (43) Mortgage Loans, which represent 47.12% of the
Initial Pool Balance, permit the applicable borrower, after a specified period
and provided that no event of default exists, to exercise a Defeasance Option,
provided that, among other conditions, the borrower (a) pays on any Due Date
(the "Release Date") (i) all interest accrued and unpaid on the principal
balance of the Mortgage Note to and including the Release Date, (ii) all other
sums, excluding scheduled interest or principal payments, due under the
Mortgage Loan, and (iii) any costs and expenses incurred in connection with
such release, (b) delivers direct, non-callable obligations of (or non-callable
obligations, fully guaranteed as to timely payment by) the United States of
America (the "Defeasance Collateral") providing payments on or prior to all
successive scheduled payment dates from the Release Date to the related
maturity date, and in an amount equal to or greater than the scheduled payments
due on such dates under the Mortgage Loan (or with respect to
Cross-Collateralized Mortgage Loans which permit defeasance, an amount equal to
not less than the principal portion of such Mortgage Loan allocable to the
released Mortgaged Property), and (c) delivers a security agreement granting
the Trust Fund a first priority security interest in the Defeasance Collateral
and an opinion of counsel to such effect. Simultaneously with such actions, the
related Mortgaged Property will be released from the lien of the Mortgage Loan
and the Defeasance Collateral will be substituted as the collateral securing
the Mortgage Loan.
The Depositor makes no representation as to the enforceability of the
defeasance provisions of any Mortgage Loan.
Related Borrowers, Cross-Collateralized and Cross-Defaulted Mortgage
Loans. Each of the Mortgage Loan Sellers has identified certain sets of
Mortgage Loans in its respective pool made to
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borrowers who are affiliated or under common control with one another (although
no such set of Mortgage Loans represents more than 8.25% of the Initial Pool
Balance). See "-- Additional Mortgage Loan Information -- Significant Mortgage
Loans -- The AIMCO Loans" herein and "Annex A -- Certain Characteristics of the
Mortgage Loans".
Eleven (11) Mortgage Loans, which represent 4.29% of the Initial Pool
Balance, are Cross-Collateralized Mortgage Loans among groups of related
borrowers.
Cross-collateralization arrangements involving more than one borrower
could be challenged as a fraudulent conveyance by creditors of a borrower or by
the representative of the bankruptcy estate of a borrower, if a borrower were
to become a debtor in a bankruptcy case. See "Risk Factors -- The Mortgage
Loans -- Limitation on Enforceability of Cross-Collateralization" herein.
See Annex A hereto for information regarding the Cross-Collateralized
Mortgage Loans.
Ten (10) Mortgage Loans (other than the Cross-Collateralized Mortgage
Loans), which represent 27.72% of the Initial Pool Balance, are secured by one
or more Mortgages encumbering multiple Mortgaged Properties. With respect to
each of such Mortgage Loans, the related Mortgaged Properties are of the same
property type and, other than the Senior Living Loan, are located in the same
state. Each of these Mortgage Loans is evidenced by a single Mortgage Note, and
despite the related multiple Mortgaged Properties, none is treated as a set of
Cross-Collateralized Mortgage Loans for purposes herein. The Senior Living Loan
is secured by 74 Mortgaged Properties and 13 Senior Living Account Properties
(as defined herein) located in two states and is evidenced by one Mortgage
Note. Accordingly, the total number of Mortgage Loans reflected herein is 181,
while the total number of Mortgaged Properties (including the Senior Living
Account Properties for such purpose only) reflected herein is 294. The Senior
Living Loan is treated as a single Mortgage Loan for all purposes hereof except
that in describing the geographic concentration and property type distribution
of the Mortgage Asset Pool, the Senior Living Loan is treated as 87 Mortgage
Loans, each of which is assigned an Allocated Principal Amount as described
herein.
Due-on-Sale and Due-on-Encumbrance Provisions. All of the Mortgage Loans
contain both "due-on-sale" and "due-on-encumbrance" clauses that in each case,
subject to limited exceptions, permit the holder of the Mortgage to accelerate
the maturity of the related Mortgage Loan if the borrower sells or otherwise
transfers or encumbers the related Mortgaged Property other than in accordance
with the terms of the related Mortgage or other loan documents or prohibit the
borrower from doing so without the consent of the holder of the Mortgage. See
"--Secured Subordinate Financing" herein. Certain of the Mortgage Loans permit
either: (i) a one-time transfer of the related Mortgaged Property if certain
specified conditions are satisfied or if the transfer is to a borrower
reasonably acceptable to the lender, or (ii) transfers to certain parties
related to the borrower. The Servicer will determine, in accordance with the
Servicing Standard, whether to exercise any right the holder of any Mortgage
may have under any such clause to accelerate payment of the related Mortgage
Loan upon, or to withhold its consent to, any transfer or further encumbrance
of the related Mortgaged Property. See "The Pooling and Servicing Agreements --
Due-on-Sale and Due-on-Encumbrance Provisions" and "Certain Legal Aspects of
Mortgage Loans -- Due-on-Sale and Due-on-Encumbrance" in the Prospectus.
Secured Subordinate Financing. Certain of the Mortgaged Properties are
known to be encumbered by subordinated debt that is not part of the Mortgage
Asset Pool. In all cases, the holder of any material subordinated debt has
agreed not to foreclose for so long as the related Mortgage Loan is
outstanding, and the Trust Fund is not pursuing a foreclosure action.
Substantially all of the remaining Mortgage Loans either prohibit the related
borrower from encumbering the Mortgaged Property with additional secured debt
or require the consent of the holder of the first lien prior to so encumbering
such property. See "Risk Factors -- The Mortgage Loans -- Risks of Secured
Subordinate Financing" herein and "Certain Legal Aspects of Mortgage Loans --
Subordinate Financing" in the Prospectus.
Ground Leases. One (1) Mortgage Loan, which represents 3.40% of the
Initial Pool Balance, is secured solely by a Mortgage on the applicable
borrower's leasehold interest in the related Mortgaged Property. Three (3)
Mortgage Loans, which represent 6.58% of the Initial Pool Balance, are secured
by
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a Mortgage on both the borrower's leasehold interest and fee simple interest in
the Mortgaged Property. None of the related ground leases expire less than ten
years after the stated maturity of the related Mortgage Loan. In each such
case, the related ground lessor has agreed to give the holder of the Mortgage
Loan notice of, and has granted such holder the right to cure, any default or
breach by the lessee. As described below under "-- Additional Mortgage Loan
Information -- Significant Mortgage Loans -- The Senior Living Loan", the
Senior Living Loan is secured by Mortgages on fee simple interests in 74
Mortgaged Properties and by security interests in certain accounts, income and
other personal property relating to 13 additional properties in which the
related borrower has leasehold interests. See "Risk Factors -- The Mortgage
Loans -- Leasehold Considerations" herein.
ADDITIONAL MORTGAGE LOAN INFORMATION
General. For a detailed presentation of certain characteristics of the
Mortgage Loans and Mortgaged Properties, on an individual basis and in tabular
format, see Annex A hereto.
Significant Mortgage Loans.
The Senior Living Loan
The Loan. The largest Mortgage Loan in the Mortgage Asset Pool (the
"Senior Living Loan") is a Mortgage Loan originated by GMACCM on February 6,
1998 to finance the acquisition by Senior Living Properties, LLC, an Indiana
limited liability company ("Senior Living"), and SLP Illinois, LLC, a Delaware
limited liability company ("SLP Illinois") (together, the "Senior Living
Borrowers") of 87 skilled nursing and assisted living properties (the "Senior
Living Properties") located in Illinois and Texas. The Senior Living Loan bears
interest at a rate of 6.81% per annum (the "Senior Living Note Rate") and, as
of the Cut-Off Date, had a principal balance of approximately $225,437,229,
which represents approximately 15.68% of the Initial Pool Balance. The Senior
Living Loan is partially insured under an insurance surety bond (the "Senior
Living Surety Bond") issued by ZC Specialty Insurance Company (the "Senior
Living Surety") covering, as of the Cut-off Date, up to a principal amount of
$144,549,430, together with interest thereon at the Senior Living Note Rate
(such principal and interest amounts, together the "Senior Living Surety Bond
Amount"). The obligations of the Senior Living Surety under the Senior Living
Surety Bond are guaranteed by Centre Reinsurance (US) Limited, ("Centre Re"), a
Bermuda exempted company. As of March 1998, Centre Re had a claims paying
ability rating of AA by Standard & Poor's. See "-- The Senior Living Surety and
Centre Re" herein.
The Senior Living Loan is secured pursuant to a trust agreement (the
"Senior Living Trust Agreement") among the Senior Living Borrowers, GMACCM, the
Senior Living Surety, the Senior Living Manager (as defined herein), HCFP
Funding, Inc. ("HCFP", and together with GMACCM, the Senior Living Surety and
the Senior Living Manager, the "Senior Living Trust Secured Parties") and The
First National Bank of Chicago (the "Senior Living Trustee"), as trustee.
Pursuant to the Senior Living Trust Agreement, the Senior Living Trustee, as
trustee, is the beneficiary of certain collateral (the "Senior Living Trust
Collateral") pledged by the Senior Living Borrowers to pay the obligations of
the Senior Living Borrowers to the Senior Living Trust Secured Parties,
including those obligations evidenced by the Senior Living Loan. Pursuant to
the Senior Living Trust Agreement, the Senior Living Loan is secured by, among
other things, fee mortgages or deeds of trust (the "Senior Living Mortgages")
encumbering 74 of the Senior Living Properties (the "Senior Living Mortgaged
Properties") and security interests in certain income, accounts and other
personal property relating to 13 additional properties (the "Senior Living
Account Properties"). The Senior Living Trust Secured Parties other than GMACCM
are additionally secured by leasehold mortgages (the "Senior Living Leasehold
Mortgages") on the Senior Living Account Properties. The Senior Living Trust
Agreement provides that if the term of any leasehold relating to the Senior
Living Account Properties is extended to a date on or after February 1, 2018,
the Senior Living Loan will become secured by the related Senior Living
Leasehold Mortgage.
Payment terms for the Senior Living Loan are as set forth on Annex A.
The Borrowers. Senior Living was formed in December 1997 solely for the
purpose of acquiring, owning, leasing, operating and financing the Senior
Living Properties and engaging in activities
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incidental thereto. The members (the "Senior Living Members") of Senior Living
consist of SLP Management, Inc., a Delaware corporation, its managing member,
James Eden, Allison Eden and Larry Bonds. SLP Illinois was formed in January,
1998 solely for the purpose of receiving and holding certain healthcare
accounts receivable relating to the Senior Living Properties. SLP Illinois is
wholly-owned by Senior Living. Each of the Senior Living Members have pledged
their respective equity interests in Senior Living, and Senior Living has
pledged its equity interest in SLP Illinois, to the Senior Living Trustee as
part of the Senior Living Trust Collateral.
The Senior Living Surety Bond; Guaranty; Subordination. The Senior Living
Trustee, as trustee under the Senior Living Trust Agreement, is the named
insured under the Senior Living Surety Bond. Pursuant to the Senior Living
Surety Bond, the Senior Living Surety irrevocably and unconditionally
guaranties timely payment to the Senior Living Trustee, for the exclusive
benefit of the holder of the Senior Living Loan, of principal and interest when
due thereunder (without giving effect to the acceleration thereof) up to the
Senior Living Surety Bond Amount. The Senior Living Surety's obligations to
make payments under the Senior Living Surety Bond are not conditioned upon
payment of any premiums due after the date of issuance thereof. In addition,
the Senior Living Surety Bond provides that if and to the extent that any
amount insured by the Senior Living Surety pursuant to the Senior Living Surety
Bond is avoided as a preference payment under applicable bankruptcy,
insolvency, receivership or similar law, the Senior Living Surety will pay such
amount to the holder of the Senior Living Loan, up to an aggregate amount equal
to the Senior Living Surety Bond Amount. The obligations of the Senior Living
Surety under the Senior Living Surety Bond may be transferred to an affiliate
upon written confirmation from the Rating Agencies that such transfer will not
result in a downgrade, withdrawal or qualification of their respective ratings
on the Certificates.
The obligations of the Senior Living Surety under the Senior Living Surety
Bond are guaranteed by Centre Re pursuant to a Guaranty dated February 6, 1998,
which names the Senior Living Trustee as beneficiary for the benefit of the
holder of the Senior Living Loan.
If required payments under the Senior Living Surety Bond and the Centre Re
guaranty are not made, the Certificateholders will be at a greater risk with
respect to losses on the Senior Living Loan.
Pursuant to a Subrogation and Note Purchase Agreement between GMACCM and
the Surety dated as of February 6, 1998, (the "Senior Living Subrogation
Agreement"), upon payment by the Senior Living Surety of a claim under the
Senior Living Surety Bond, the Senior Living Surety will be deemed to have
purchased a subordinated participation interest (each, a "Participation") in
the Senior Living Loan in an amount equal to the amount of such claim paid. The
Senior Living Surety is only entitled to receive distributions in respect of
the Participations out of collections from and proceeds on the Senior Living
Trust Collateral after payment of the uninsured portion of the Senior Living
Loan in full.
The Senior Living Surety and Centre Re. The following information has been
supplied by the Senior Living Surety and Centre Re for inclusion in this
Prospectus Supplement. Accordingly, none of the Depositor, the Servicer or the
Underwriters make any representation as to the accuracy and completeness of
such information.
General. The Senior Living Surety is licensed and subject to regulation as
an insurance corporation under the laws of the State of Texas. The Senior
Living Surety is a wholly owned direct subsidiary of Centre Re.
The principal executive offices for the Senior Living Surety are located
at 1 Canterbury Green in Stamford, Connecticut and its telephone number at that
location is (203) 326-7796.
The principal executive offices for Centre Re are located at Cumberland
House, 1 Victoria Street in Hamilton, Bermuda and its telephone number at that
location is (441) 295-8501. Centre Re is a member of the Centre Reinsurance
Group and as of March 1998 had a claims-paying ability rating of AA by Standard
and Poor's. Such rating reflects only the views of such rating agency, is not a
recommendation to buy, sell or hold securities and is subject to revision or
withdrawal at any time by such rating agency.
The Centre Reinsurance Group is a full-service provider of customized
insurance and risk management programs with offices in Bermuda, Dublin, London,
New York, San Francisco, Sydney, and Zurich.
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Financial Information. The following table sets forth certain financial
information regarding Centre Re and its wholly owned Subsidiaries on the basis
of U.S. generally accepted accounting principles as of December 31, 1997 (in
thousands of dollars):
December 31, 1997
Audited
<TABLE>
<S> <C>
Total Assets ................. $4,205,001
Shareholder's Equity ......... $1,130,889
Net Income ................... $ 113,276
</TABLE>
The Senior Living Surety Bond is not covered by the Property/Casualty
Insurance Security Fund specified in Article 76 of New York Insurance Law.
Exercise of Remedies; Consulting Advisor; Servicer Discretion. Following
an event of default on the Senior Living Loan, each of the Senior Living
Secured Parties has agreed to exercise remedies against the Senior Living
Borrowers and Senior Living Properties only as permitted under the Senior
Living Trust Agreement. Provided that a Senior Living Surety Default (as
defined herein) has not occurred, upon the occurrence of an event of default
under the Senior Living Loan, the Servicer will commence discussions with an
advisor (the "Consulting Advisor") and the Senior Living Surety to develop a
plan of action. The Servicer will designate, from time to time, a Consulting
Advisor from a list of parties (the "Consulting Advisor List") approved by the
Servicer and the Senior Living Surety. The Servicer will be entitled to replace
the Consulting Advisor with another party on the Consulting Advisor List if the
then current Consulting Advisor resigns or is unable or unwilling to act as
required by the Senior Living Trust Agreement, or, in the Servicer's
reasonable, good faith judgment, no longer has recognized expertise in health
care. The initial Consulting Advisor will be ZA Consulting, LLC.
If during discussions with the Senior Living Surety and the Consulting
Advisor, the Servicer, in its reasonable and good faith judgment, determines
that it will be unable to agree on an initial plan of action with the Senior
Living Surety within 30 days of commencement of discussions, the Servicer is
required to designate a second consultant from the Consulting Advisor List to
review the plans of the Servicer and the Senior Living Surety and affirm one of
such plans within such 30 day period. The role of the second consultant will be
to determine which course of action would result in the maximum recoveries on
the loan as a whole on a present value basis (without giving effect to amounts
payable under the Senior Living Surety Bond), the relevant discounting to be
done based on the mortgage rate.
If the Consulting Advisor, the Senior Living Surety or such second
consultant fails to respond to the Servicer within any required response
period, or the Servicer determines, in its good faith and reasonable
discretion, that, in accordance with Servicing Standard, the interest of the
Certificateholders in the uninsured portion of the Senior Living Loan has or is
likely to be materially and adversely affected by the taking of or failure to
take immediate action (including, without limitation, actions recommended by
the Senior Living Surety, the Consulting Advisor or the second consultant), the
Servicer will be entitled to unilaterally direct the Senior Living Trustee to
take such action as the Servicer deems appropriate without the agreement of the
Senior Living Surety. In addition, upon failure by the Senior Living Surety to
make payments required under the Senior Living Surety Bond or the occurrence of
certain other events described in the Senior Living Trust Agreement (each such
event, a "Senior Living Surety Default"), the Servicer will not be required to
consult with the Consulting Advisor or the Senior Living Surety and will be
entitled to unilaterally direct the Senior Living Trustee to take such action
as the Servicer deems appropriate.
Purchase of Senior Living Loan; Increase, Defeasance and Revision of
Senior Living Surety Bond Amount. Pursuant to the Senior Living Subrogation
Agreement, the Senior Living Surety may (i) provided that an event of default
has occurred under the Senior Living Loan, purchase the Senior Living Loan at a
price equal to the unpaid principal amount of the Senior Living Loan plus
accrued interest thereon to the date of such purchase, or (ii) provided that
written confirmation is obtained from the Rating Agencies that no downgrade,
withdrawal or qualification of the ratings then assigned to the Certificates
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<PAGE>
would result from the taking of such action, increase the Senior Living Surety
Bond Amount to an amount equal to the then outstanding principal amount
outstanding on the Senior Living Loan (net of the principal portion of any
Participation then held by the Senior Living Surety) with interest thereon at
the Senior Living Note Rate. In either such event, the Senior Living Surety
shall be deemed to have succeeded to the rights of the holder of the Senior
Living Loan and shall have the exclusive right to direct the Senior Living
Trustee to exercise remedies pursuant to the Senior Living Trust Agreement. In
addition, the Senior Living Surety may, at any time, discharge its liabilities
under the Senior Living Surety Bond by delivering to the Senior Living Trustee
an amount necessary to defease a portion of the Senior Living Loan equal to the
principal portion of the then outstanding Senior Living Surety Bond Amount.
The Senior Living Surety is further permitted, at any time prior to the
third anniversary of the Delivery Date, to deliver a replacement surety bond
with a revised Senior Living Surety Bond Amount to the holder of the Senior
Living Loan; provided, that the Senior Living Surety may only deliver one such
replacement surety bond during such three year period, and provided further
that each of the Rating Agencies confirms that the delivery of such replacement
surety bond will not result in a downgrade, withdrawal or qualification of the
then current ratings on the Certificates.
The Senior Living Properties. The Senior Living Properties consist of 87
nursing homes and assisted living properties located in Texas and Illinois.
Thirty-one (31) of the Senior Living Properties (including three Senior Living
Account Properties) are located in Illinois and 56 of the Senior Living
Properties (including eleven of the Senior Living Account Properties) are
located in Texas. The Senior Living Properties range in number of licensed beds
from 20 to 202 and were constructed between 1902 and 1984. Appraisals dated
January 1998 determined an aggregate value for the Senior Living Properties,
exclusive of the Senior Living Account Properties, of $257,300,000 and,
inclusive of the Senior Living Account Properties, of $282,400,000.
The Senior Living Properties were acquired by Senior Living on February 6,
1998 from Healthcare Centers of Texas, Inc., Chur Properties of Texas, Inc.,
Trinity CHC, L.P., Springwood Associates, L.P., Community Healthcare Centers of
America, Inc., CHC Properties, L.P. and National Medical Care Associates
(collectively, the "Sellers"). At origination of the Senior Living Loan, the
Senior Living Borrowers deposited approximately $245,826 of the loan proceeds
into a debt service reserve fund. Provided that the Senior Living Borrowers
deliver satisfactory legal and other documentation to the holder of the Senior
Living Loan, the Senior Living Borrowers will be permitted to withdraw funds
then on deposit in such reserve fund to complete the acquisition of a leasehold
estate underlying an additional facility (the "Andrews Facility") located in
Andrews County, Texas. In such event, the Andrews Facility will become subject
to a Senior Living Leasehold Mortgage. The Andrews Facility is not considered a
Senior Living Property for purposes hereof.
Certain historical operating information with respect to the Senior Living
Properties is set forth below. Such information was provided to the Senior
Living Borrowers by the Sellers in connection with the acquisition by the
Senior Living Borrowers of the Senior Living Properties. Accordingly, neither
the Depositor, the Underwriters nor the Servicer makes any representation as to
the accuracy and completeness of such information. Further, such information
represents the aggregation of information provided by each Seller, which
information may have been prepared by such Seller on the basis of different
accounting practices and procedures for the periods indicated. In addition, the
Senior Living Borrowers acquired and intend to operate the Senior Living
Properties as a group, under central management provided by the Senior Living
Manager (as defined herein). The historical operating information is intended
for illustrative purposes only and may not be indicative of future performance
of the Senior Living Properties acquired from any particular Seller or of the
Senior Living Properties taken as a whole. In particular, each Senior Living
Property was operated by the related Seller prior to its acquisition by the
Senior Living Borrowers; from and after February 6, 1998, each Senior Living
Property will be operated by the Senior Living Manager pursuant to the related
Management Agreement as described below under "--The Senior Living Manager."
The operating standards required under such
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Management Agreement are not necessarily consistent with the operating policies
of the related Seller. See "Annex A -- Certain Characteristics of the Mortgage
Loans."
The gross revenues of the Senior Living Properties for the calendar year
1996 totalled $167,697,245. The gross revenues of the Senior Living Properties
for the ten months ending October 31, 1997 (annualized) totalled $174,683,214.
Expenses for the same periods, net of debt service and non-recurring expenses,
assuming a 5% management fee and normalizing certain expenses, were
$139,776,121 and $144,376,706, respectively. NOI for the Senior Living
Properties for each period was $27,921,124 and $30,306,508, respectively.
Additional financial information with respect to the Senior Living Loan and the
Senior Living Properties is set forth on Annex A.
The Senior Living Borrowers are permitted to have one or more of the
Senior Living Properties released from the lien of the related Senior Living
Mortgages, from and after the second anniversary of the Delivery Date, by
delivering to the holder of the Senior Living Loan non-callable obligations of
the United States of America which provide payments in an amount sufficient to
pay principal and interest when due on the related Release Amount (as defined
herein) being defeased. Defeasance is only permitted upon the satisfaction of
certain conditions, including, among other things, (x) delivery of certain
legal opinions and documentation, (y) confirmation from the Rating Agencies
that such defeasance will not result in a withdrawal, downgrade or
qualification of the then current ratings on the Certificates, and (z) that
after giving effect to any such release, (i) the debt service coverage ratio
for the Senior Living Properties then remaining subject to the Senior Living
Mortgages must equal or exceed the greatest of (a) the debt service coverage
ratio for the Senior Living Properties, calculated including the property or
properties to be released, for the six full calendar months immediately
preceding the release date, (b) the debt service coverage ratio for the Senior
Living Properties, calculated excluding the property or properties to be
released, for the six full calendar months immediately preceding the release
date, and (c) 1.25, (ii) the debt service coverage ratio for the remaining
Senior Living Properties will equal or exceed 1.50, taking into account the
Senior Living Loan and the Senior Living Additional Debt (as defined herein),
and (iii) the negotiated sale price equals or exceeds the greater of (a) the
related Release Amount, and (b) the current appraised fair market value. The
Release Amount for each applicable Senior Living Property as of the Cut-Off
Date is 125% of the related Allocated Principal Amount set forth below:
SENIOR LIVING ALLOCATED PRINCIPAL AMOUNTS
<TABLE>
<CAPTION>
ALLOCATED
PRINCIPAL RELEASE
FACILITY NAME AMOUNT FACILITY NAME AMOUNT
- ----------------------------------- ------------- ------------------------------------ -------------
<S> <C> <C> <C>
Anahuac Healthcare ................ $1,998,585 Anahuac Healthcare ................. $2,498,231
Anson Healthcare .................. 1,998,585 Anson Healthcare ................... 2,498,231
Borger Healthcare ................. 2,798,019 Borger Healthcare .................. 3,497,524
Canton Healthcare ................. 3,117,793 Canton Healthcare .................. 3,897,241
Carthage Healthcare ............... 2,238,415 Carthage Healthcare ................ 2,798,019
Cedar Hill Healthcare ............. 2,798,019 Cedar Hill Healthcare .............. 3,497,524
Centerville Healthcare ............ 1,359,038 Centerville Healthcare ............. 1,698,797
Childress Healthcare .............. 4,636,717 Childress Healthcare ............... 5,795,897
Claystone Healthcare .............. 1,678,811 Claystone Healthcare ............... 2,098,514
Coleman Healthcare ................ 1,918,642 Coleman Healthcare ................. 2,398,302
Coronado Healthcare ............... 2,158,472 Coronado Healthcare ................ 2,698,090
Country Inn Healthcare ............ 239,830 Country Inn Healthcare ............. 299,788
Cross Country Healthcare .......... 4,316,944 Cross Country Healthcare ........... 5,396,180
Eastland Healthcare ............... 2,078,528 Eastland Healthcare ................ 2,598,161
Electra Healthcare ................ 1,598,868 Electra Healthcare ................. 1,998,585
Evergreen Healthcare .............. 2,877,963 Evergreen Healthcare ............... 3,597,453
Frankston Healthcare .............. 3,117,793 Frankston Healthcare ............... 3,897,241
Garden Terrace Healthcare ......... 1,998,585 Garden Terrace Healthcare .......... 2,498,231
Gibson Healthcare ................. 319,774 Gibson Healthcare .................. 399,717
</TABLE>
S-37
<PAGE>
<TABLE>
<CAPTION>
ALLOCATED
PRINCIPAL RELEASE
FACILITY NAME AMOUNT FACILITY NAME AMOUNT
- ----------------------------------- ---------------- ------------------------------------ ----------------
<S> <C> <C> <C>
Gilmer Healthcare ................. (1) Gilmer Healthcare .................. (1)
Graham Healthcare ................. $1,838,698 Graham Healthcare .................. $2,298,373
Graham Living Center .............. 799,434 Graham Living Center ............... 999,293
Hamilton Healthcare ............... 2,158,472 Hamilton Healthcare ................ 2,698,090
Haskell Healthcare ................ 1,119,208 Haskell Healthcare ................. 1,399,010
Hearne Healthcare ................. 1,998,585 Hearne Healthcare .................. 2,498,231
Hill Country Healthcare ........... 2,238,415 Hill Country Healthcare ............ 2,798,019
Holiday Lodge Healthcare .......... 3,437,566 Holiday Lodge Healthcare ........... 4,296,958
Jacksboro Healthcare .............. 3,917,227 Jacksboro Healthcare ............... 4,896,533
Jacksonville Healthcare ........... 2,078,528 Jacksonville Healthcare ............ 2,598,161
Jeffrey Place Healthcare .......... 5,116,378 Jeffrey Place Healthcare ........... 6,395,472
Kaufman Healthcare ................ 3,437,566 Kaufman Healthcare ................. 4,296,958
Kermit Healthcare ................. 2,718,076 Kermit Healthcare .................. 3,397,595
Lake Jackson Healthcare ........... 3,037,849 Lake Jackson Healthcare ............ 3,797,312
Lamesa Healthcare ................. 1,199,151 Lamesa Healthcare .................. 1,498,939
LaPorte Healthcare ................ 2,558,189 LaPorte Healthcare ................. 3,197,736
Lindale Healthcare ................ 2,078,528 Lindale Healthcare ................. 2,598,161
McKinney Healthcare ............... 2,638,132 McKinney Healthcare ................ 3,297,665
Nederland Healthcare .............. 1,359,038 Nederland Healthcare ............... 1,698,797
Olney Healthcare .................. 2,238,415 Olney Healthcare ................... 2,798,019
Overton Healthcare ................ 2,318,359 Overton Healthcare ................. 2,897,948
Palacios Healthcare ............... 1,838,698 Palacios Healthcare ................ 2,298,373
Palestine Healthcare .............. 5,116,378 Palestine Healthcare ............... 6,395,472
Paris Healthcare .................. 4,316,944 Paris Healthcare ................... 5,396,180
Red River Healthcare .............. 1,998,585 Red River Healthcare ............... 2,498,231
Regency Manor Healthcare .......... 5,915,812 Regency Manor Healthcare ........... 7,394,765
Renfro Healthcare ................. 879,377 Renfro Healthcare .................. 1,099,222
Riverside Healthcare .............. 6,475,416 Riverside Healthcare ............... 8,094,270
Roscoe Healthcare ................. 2,398,302 Roscoe Healthcare .................. 2,997,878
Rotan Healthcare .................. 2,478,245 Rotan Healthcare ................... 3,097,807
Sage Healthcare ................... 1,998,585 Sage Healthcare .................... 2,498,231
Snyder Healthcare ................. 4,316,944 Snyder Healthcare .................. 5,396,180
South Plains Healthcare ........... 1,279,094 South Plains Healthcare ............ 1,598,868
Sweetwater Healthcare ............. 3,837,283 Sweetwater Healthcare .............. 4,796,604
Throckmorton Healthcare ........... 1,518,925 Throckmorton Healthcare ............ 1,898,656
Valley View Healthcare ............ 3,197,736 Valley View Healthcare ............. 3,997,170
Van Healthcare .................... 1,678,811 Van Healthcare ..................... 2,098,514
Alderwood Healthcare .............. 1,838,698 Alderwood Healthcare ............... 2,298,373
Arrowwood Residence ............... 239,830 Arrowwood Residence ................ 299,788
Aspenwood Healthcare .............. 3,837,283 Aspenwood Healthcare ............... 4,796,604
Beechwood Healthcare .............. 7,834,453 Beechwood Healthcare ............... 9,793,067
Cedarwood Healthcare .............. 2,238,415 Cedarwood Healthcare ............... 2,798,019
Cherrywood Healthcare ............. 3,037,849 Cherrywood Healthcare .............. 3,797,312
Cottonwood Healthcare ............. 3,597,453 Cottonwood Healthcare .............. 4,496,816
Dogwood Healthcare ................ 2,318,359 Dogwood Healthcare ................. 2,897,948
Firwood Healthcare ................ 3,037,849 Firwood Healthcare ................. 3,797,312
Fondulac Woods Healthcare ......... 3,917,227 Fondulac Woods Healthcare .......... 4,896,533
Ironwood Healthcare ............... 719,491 Ironwood Healthcare ................ 899,363
Lindenwood Healthcare ............. 3,277,680 Lindenwood Healthcare .............. 4,097,099
</TABLE>
S-38
<PAGE>
<TABLE>
<CAPTION>
ALLOCATED
PRINCIPAL RELEASE
FACILITY NAME AMOUNT FACILITY NAME AMOUNT
- ---------------------------------- ------------- ----------------------------------- -------------
<S> <C> <C> <C>
Locustwood Healthcare ............ $1,678,811 Locustwood Healthcare ............. $2,098,514
Magnolia Wood Healthcare ......... 3,997,170 Magnolia Wood Healthcare .......... 4,996,463
Maplewood Healthcare ............. 3,917,227 Maplewood Healthcare .............. 4,896,533
Olivewood Healthcare ............. 2,078,528 Olivewood Healthcare .............. 2,598,161
Pinewood Healthcare .............. 2,078,528 Pinewood Healthcare ............... 2,598,161
Scotchwood Healthcare ............ 2,877,963 Scotchwood Healthcare ............. 3,597,453
Sprucewood Healthcare ............ 1,438,981 Sprucewood Healthcare ............. 1,798,727
Willowwood Healthcare ............ 1,598,868 Willowwood Healthcare ............. 1,998,585
Boxwood Healthcare ............... 1,359,038 Boxwood Healthcare ................ 1,698,797
Oakwood Healthcare ............... 2,398,302 Oakwood Healthcare ................ 2,997,878
Palmwood Healthcare .............. 1,359,038 Palmwood Healthcare ............... 1,698,797
Benton Healthcare ................ 1,998,585 Benton Healthcare ................. 2,498,231
Cisne Healthcare ................. 879,377 Cisne Healthcare .................. 1,099,222
Enfield Healthcare ............... 399,717 Enfield Healthcare ................ 499,646
Jonesboro Healthcare ............. 3,197,736 Jonesboro Healthcare .............. 3,997,170
McLeansboro Healthcare ........... 1,838,698 McLeansboro Healthcare ............ 2,298,373
Pittsfield Healthcare ............ 4,716,661 Pittsfield Healthcare ............. 5,895,826
Rosiclare Healthcare ............. 1,119,208 Rosiclare Healthcare .............. 1,399,010
Westabbe Healthcare .............. 10,152,812 Westabbe Healthcare ............... 12,691,015
</TABLE>
- ----------
(1) Due to the term of the leasehold estate, no principal amount was
allocated thereto.
Additional prepayment and defeasance terms for the Senior Living Loan are
as set forth on Annex A.
The Senior Living Manager. The Senior Living Properties are currently
operated by Complete Care Services, L.P. (the "Senior Living Manager"), a
Pennsylvania limited partnership, under management agreements (the "Management
Agreements") dated as of January 31, 1998. Each Management Agreement has a term
of twenty years, unless terminated earlier for cause. The Senior Living Manager
receives a base management fee for its services under each Management Agreement
equal to the sum of (i) 5% of the monthly gross revenues of the related Senior
Living Property plus (ii) an amount equal to the monthly compensation of
certain employees of each Senior Living Property. In addition, the Senior
Living Manager is entitled to certain performance management fees payable out
of net cash flow after debt service on the Senior Living Loan.
The Senior Living Manager was formed in 1989. As of March 1, 1998, the
Senior Living Manager managed and operated approximately 22,000 beds in 190
nursing homes and assisted living properties (including the Senior Living
Properties) located in Texas, Pennsylvania, Illinois, New Jersey, Maryland and
New York.
The Senior Living Loan provides that if the debt service coverage ratio
for the Senior Living Properties, calculated quarterly on a rolling twelve
month basis (or any shorter period from July 1, 1998), drops below 1.25, and
continues for two consecutive calendar quarters, the holder of the Senior
Living Loan shall be entitled, at the Senior Living Borrowers' sole cost and
expense, to retain a consultant to develop a plan of correction which will be
implemented by the Senior Living Borrowers at their sole cost and expense.
Other Debt. The Senior Living Borrowers are obligors on two loans (the
"Senior Living Manager Loan" and the "HCFP Loan") which are also secured under
the Senior Living Trust Agreement. The Senior Living Manager Loan had, as of
the Cut-Off Date, a principal balance of $10 million. The Senior Living Manager
Loan is secured by the Senior Living Mortgages, but is fully subordinated to
the Senior Living Loan. The HCFP Loan consists of two revolving lines of credit
with permitted balances of up to $10 million and $15 million, respectively,
provided to the Senior Living Borrowers by HCFP. The HCFP
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<PAGE>
Loan is secured only by a security interest in certain income and accounts
(including payments from Medicare or Medicaid) arising from the operation of
the Senior Living Properties. Pursuant to the Senior Living Trust Agreement,
all proceeds of such income and accounts will be applied to required payments
under the HCFP Loan before such proceeds will be available to pay the Senior
Living Loan. Upon the occurrence of a monetary default under the HCFP Loan,
HCFP is entitled to direct the Senior Living Trustee to exercise certain
remedies against the Senior Living Borrowers in respect of the accounts only,
and is entitled to direct the Senior Living Trustee to apply proceeds realized
first to pay down accrued interest and the outstanding principal balance of the
HCFP Loan outstanding at the time of such default prior to making payments on
the Senior Living Loan. Senior Living is the obligor on an additional note (the
"Seller Note," and together with the Senior Living Manager Loan and the HCFP
Loan, the "Senior Living Additional Debt") which had, as of the Cut-Off Date, a
principal balance of $10 million, made to certain entities from whom Senior
Living acquired the Senior Living Properties. The Seller Note is not secured
pursuant to the Senior Living Trust Agreement or any other assets of Senior
Living and is subordinated in right of payment to the Senior Living Loan and
the Senior Living Manager Loan.
Licensure and Regulatory Issues. Prior to the acquisition of the Senior
Living Properties by Senior Living, all of the Senior Living Properties were
licensed to operate. Senior Living has received provisional licenses with
respect to the Senior Living Properties located in Illinois and Senior Living
expects to receive permanent licenses pursuant to applicable licensing
procedures. Application has been made to transfer the licenses related to the
Senior Living Properties located in Texas to Senior Living; however, in Texas,
licenses are not issued until the licensing surveys are completed by the
applicable authorities. The Senior Living Manager is licensed to operate
certain other facilities in Texas and, although no assurances can be given, the
Senior Living Manager has indicated to GMACCM that it knows of no reason why
licenses with respect to the Senior Living Properties located in Texas would
not be forthcoming.
The Texas Department of Human Services has issued a final draft of a
proposed change to the rules allocating beds for purposes of participation in
the Medicaid program. The comment period expired on April 6, 1998 and it is
expected that final rules will be promulgated within forty-five days of such
expiration. The proposed regulations are intended to decrease excess bed
capacity in Texas and would decertify a number of beds (determined by formula)
in any skilled nursing facility having a Medicaid occupancy rate for the
preceding six months of less than 70%. Occupancy would be reviewed annually.
Skilled nursing facilities experiencing high occupancy rates would be permitted
to request increases in beds certified for Medicaid so long as the operator
meets the established quality of care guidelines. The proposed rule does not
affect the licensed capacity of a facility or its ability to accept private pay
or Medicare patients.
Certain of the Senior Living Properties located in Texas have experienced
historical Medicaid occupancy rates below 70%. If such historical occupancy
rates were to continue, the promulgation of the final rule may result in the
loss of some certified Medicaid beds at the Senior Living Properties located in
Texas. The loss of certified Medicaid beds would adversely affect the maximum
potential occupancy of such Senior Living Properties unless occupancy by
private care or Medicare patients is increased.
The AIMCO Loans
The Loans. Thirty-three Mortgage Loans for which the borrowers are
affiliates (collectively, the "AIMCO Loans"), representing 8.25% of the Initial
Pool Balance, were originated by GMACCM on October 31, 1997 and have an
aggregate principal balance as of the Cut-Off Date of approximately
$118,600,711.
The AIMCO Loans consist of thirty-three separate Mortgage Loans to
thirty-three different special purpose Delaware limited partnerships (each, an
"AIMCO Loan Borrower"), each formed for the purpose of purchasing, owning and
operating one of the AIMCO Properties (as defined herein). Each AIMCO Loan is
secured by, among other things, a fee mortgage encumbering one of thirty-three
multifamily properties located throughout the United States (the "AIMCO
Properties"). None of the AIMCO Loans are cross-collateralized or
cross-defaulted.
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<PAGE>
Payment and prepayment terms for the AIMCO Loans are as set forth on Annex
A.
The Borrowers. Each of the AIMCO Loan Borrowers is a special purpose
Delaware limited partnership sponsored by Apartment Investment and Management
Company, a publicly traded real estate investment trust ("AIMCO").
The Properties. The AIMCO Properties consist of thirty-three multifamily
properties located in Arizona, Georgia, Texas, Florida, Michigan, North
Carolina and Illinois. The AIMCO properties range in size from 84 units to 487
units and were constructed between 1964 and 1990. Appraisals performed in
October and November 1997 determined a range of values for the AIMCO Properties
from $2,050,000 to $17,200,000.
The Manager. The AIMCO Properties are managed by AIMCO Properties, L.P.,
an affiliate of AIMCO.
Permitted Substitutions, Subordinate Debt and Lockbox Provisions. On or
after November 1, 2007, each AIMCO Loan Borrower is permitted to substitute
collateral without prepayment or defeasance of the principal amount of the
related AIMCO Loan provided, among other things, that a loan-to-value ratio of
not more than 55% and a debt service coverage ratio of not less than 1.75 are
maintained on the related AIMCO Loan after giving effect to any such
substitution. The AIMCO Loan Borrowers in the aggregate are permitted no more
than two such collateral substitutions during any twelve-month period. Each
AIMCO Loan Borrower is permitted to incur secured or unsecured subordinate
third party debt provided that the loan-to-value ratio calculated using the
combined principal balances of the related AIMCO Loan and such subordinate debt
does not exceed 55%, the combined debt service coverage of such AIMCO Loan and
such subordinate debt is not less that 1.75 and the proceeds of any such
subordinate debt are used solely for purposes of renovations or capital
improvements approved by the holder of such AIMCO Loan. Each AIMCO Loan
provides that the holder of the related note may require that the borrower
establish a lockbox account for the collection of gross revenues from the
related AIMCO Property following the occurrence of an event of default under
the related loan documents or if the trailing 12 month debt service coverage
ratio falls below 1.50.
The Renaissance Techworld Loan
The Loan. One Mortgage Loan (the "Renaissance Techworld Loan")
representing 4.31% of the Initial Pool Balance was originated by GMACCM on
March 13, 1998 and has a principal balance as of the Cut-Off Date of
approximately $61,924,861. The Renaissance Techworld Loan is secured by, among
other things, a fee mortgage encumbering the Renaissance Washington Hotel
located in Washington, DC and the Renaissance Techworld Borrower's interest in
certain leases (collectively, the "Renaissance Techworld Property"). The
Renaissance Techworld Loan is an ARD Loan.
Payment and prepayment terms for the Renaissance Techworld Loan are as set
forth on Annex A.
The Borrower. The Renaissance Techworld Loan was made to Techworld Hotel
Associates, LLC (the "Renaissance Techworld Borrower"), a District of Columbia
limited liability company formed for the purpose of owning, managing and
operating the Renaissance Techworld Property. The Renaissance Techworld
Borrower is an affiliate of the IDI Group Companies, a developer in the
Washington, DC region. One of the equity owners of the Renaissance Techworld
Borrower is affiliated with the borrower on another Mortgage Loan (the
"Renaissance Orlando Hotel Loan") included in the Mortgage Asset Pool, which
has a principal balance as of the Cut-off Date of $11,973,636 and is secured by
a mortgage on a hotel (the "Renaissance Orlando Hotel") located in Orlando,
Florida.
The Property. The Renaissance Techworld Property consists of a fifteen
story, 801 room full service hotel located at 999 9th Street NE in Washington,
DC, near the Washington Convention Center. The Renaissance Techworld Property
includes a restaurant and a lounge, 66,918 square of meeting and ballroom space
and a 307 seat auditorium. Other amenities include a fitness center and indoor
pool. The fitness center, the auditorium and approximately 37 percent of the
combined meeting and ballroom space in the Renaissance Techworld Property are
leased by the Renaissance Techworld Borrower from Techworld Trade Associates
Limited Partnership, a District of Columbia limited partnership. An appraisal
performed in January, 1998 determined a value for the Renaissance Techworld
Property of $125,000,000.
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<PAGE>
The Manager. The Renaissance Techworld Property is managed by Renaissance
Hotel Operating Company (the "Renaissance Manager"), a Delaware corporation and
an affiliate of Marriott International, Inc ("Marriott"), pursuant to a
management agreement (the "Renaissance Management Agreement") between the
Renaissance Techworld Borrower and the Renaissance Manager. The Renaissance
Manager's initial term expires on December 31, 2008, but the Renaissance
Manager has a right to extend the term for two successive terms of 10 year
each. Under the Renaissance Management Agreement, the Renaissance Manager is
entitled to compensation consisting of a base management fee of 3% of gross
revenues and certain other incentive fees. In the event that the Renaissance
Techworld Property fails to meet certain performance standards for two
consecutive years, then the holder of the Renaissance Techworld Loan may compel
the Renaissance Techworld Borrower to exercise certain rights to terminate the
Renaissance Manager pursuant to the Renaissance Management Agreement. The
Renaissance Manager also manages the Renaissance Orlando Hotel and is
affiliated with the Madison Renaissance Franchisor (as defined herein).
Mezzanine Debt. GMACCM is the holder of a loan (the "Renaissance Techworld
Mezzanine Loan") originated on March 13, 1998 which has a principal balance as
of the Cut-Off Date of approximately $6,000,000. The Renaissance Techworld
Mezzanine Loan was made to THA I, LLC and THA II, LLC (together, the
"Renaissance Techworld Borrower Members"), each District of Columbia limited
liability companies. The Renaissance Techworld Mezzanine Loan is secured by the
Renaissance Techworld Borrower Members' respective membership interests in the
Renaissance Techworld Borrower and is payable only after payment of debt
service on the Renaissance Techworld Loan and certain operating expenses
incurred in connection with the management and operation of the Renaissance
Techworld Property. Pursuant to a guaranty agreement (the "Marriott Guaranty"),
Marriott has guarantied payment of the Renaissance Techworld Mezzanine Loan to
GMACCM, which guaranty terminates upon the earlier of (i) the sale, transfer or
assignment of the Renaissance Techworld Mezzanine Loan by GMACCM, and (ii) the
achievement by the Renaissance Techworld Property of certain debt service
coverage ratio thresholds. In addition, Marriott has the option to purchase the
Renaissance Techworld Mezzanine Loan from GMACCM upon the terms and conditions
specified in the Marriott Guaranty. The Renaissance Techworld Mezzanine Loan is
not included in the Mortgage Asset Pool.
The Madison Renaissance Loan
The Loan. One Mortgage Loan (the "Madison Renaissance Loan") representing
3.40% of the Initial Pool Balance was originated by GMACCM on March 3, 1998 and
has a principal balance as of the Cut-Off Date of approximately $48,942,695.
The Madison Renaissance Loan is secured by, among other things, a fee and
leasehold deed of trust (the "Madison Renaissance Mortgage") encumbering a
hotel (the "Madison Renaissance Property") located in Seattle, WA. The Madison
Renaissance Loan is an ARD Loan.
Payment and prepayment terms for the Madison Renaissance Loan are as set
forth on Annex A.
The Borrower. The Madison Renaissance Loan was made to Madison Hotel LLC
(the "Madison Renaissance Borrower"), a Washington limited liability company
formed for the purpose of acquiring, owning and operating the Madison
Renaissance Property. Madison Associates, a Washington general partnership, is
the sole member of the Madison Renaissance Borrower. MHC Madison Hotel Corp., a
Washington corporation, is the limited manager of the Madison Renaissance
Borrower. Both Madison Associates and MHC Madison Hotel Corp. are affiliates of
Richard C. Hedreen, a developer of hotel and commercial properties in the
Seattle, Washington area.
The Property. The Madison Renaissance Property consists of both the fee
and leasehold interests in land underlying a twenty-eight story, 553 room full
service hotel located at 515 Madison Street in downtown Seattle, Washington.
The Madison Renaissance Borrower owns a leasehold interest in the land
underlying the Madison Renaissance Property. The fee interest is subject to the
lien of the Madison Renaissance Mortgage by virtue of the delivery and
execution of the Madison Renaissance Mortgage by the holder of the fee interest
(the "Madison Fee Holder") underlying the Madison Renaissance Property. The
Madison Fee Holder is an affiliate of Richard C. Hedreen. The Madison
Renaissance Property
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includes three restaurants, 18,283 square feet of meeting space and underground
parking facilities. Other amenities include a fitness center and indoor pool.
An appraisal performed in June 1997 determined a value for the Madison
Renaissance Property of $83,800,000.
The Manager; Franchise Agreement. The Madison Renaissance Property is
managed by R.C. Hedreen Co. (the "Madison Renaissance Manager"), a Washington
corporation, which is an affiliate of the Madison Renaissance Borrower. The
management fees payable to the Madison Renaissance Manager have been
subordinated to the rights of the holder of the Madison Renaissance Loan and
are further subject to reduction by amounts payable by the Madison Renaissance
Borrower as franchise fees under a license agreement between the Madison
Renaissance Borrower and Marriott International, Inc (the "Madison Renaissance
Franchisor"). The Madison Renaissance Franchisor is affiliated with the
Renaissance Manager, which manages the Madison Techworld Property and the
Renaissance Orlando Hotel.
Clearing Account. The Madison Renaissance Manager is required to deposit
all cash receipts and proceeds of credit card receipts received in connection
with the operation of the Madison Renaissance Property on a daily basis into a
clearing account (the "Madison Clearing Account"). Following an event of
default on the Madison Renaissance Loan, disbursement of funds from the
Clearing Account are permitted only as directed by the holder of the Madison
Renaissance Loan.
The Alliance Loan
The Loan. One Mortgage Loan (the "Alliance Portfolio Loan") is secured by
eight Mortgaged Properties operated by Alliance Residential Management LLC. The
Alliance Portfolio Loan was originated by GACC on December 16, 1997 and has a
principal balance as of the Cut-off Date of $61,800,612, which represents 4.3%
of the Initial Pool Balance. The Alliance Portfolio Loan is secured by fee
mortgages encumbering eight multifamily properties (the "Alliance Portfolio
Properties") located in Texas. The Mortgage Loan documents permit the release
of individual Mortgaged Properties upon a payment of 125% of the allocated
principal amount (the "Allocated Principal Amount") for the applicable
mortgaged property, as set forth in the table below (as of the Cut-off Date)
plus any applicable prepayment premium.
The Alliance Portfolio Loan was made to Alliance DG Portfolio LP
("Alliance DG"), an Illinois special purpose entity formed in 1997 solely for
the purpose of purchasing, owning and operating the Alliance Portfolio
Properties.
<TABLE>
<CAPTION>
PROPERTY NAME ALLOCATED LOAN AMOUNT CUT-OFF DATE BALANCE
- ------------- --------------------- --------------------
<S> <C> <C>
Audobon Park Apartment ..................... $ 7,110,057 $ 7,087,192
Preston Valley Apartments .................. 7,253,314 7,229,988
Commerce Park Apartments ................... 6,898,942 6,876,756
The Falls on Clearwood Apartments .......... 7,426,730 7,402,846
The Forum Plaza Apartments ................. 3,355,223 3,344,433
The Holly Ridge Apartments ................. 7,449,350 7,425,393
The Remington Oaks Apartments .............. 13,571,689 13,528,043
The Somerset I & II Apartments ............. 8,934,695 8,905,962
----------- -----------
Total ...................................... $62,000,000 $61,800,612
</TABLE>
The Borrower. Alliance DG is an Illinois limited partnership and is an
affiliate of Alliance Holdings, LLC, a privately owned real estate investment,
development and finance firm primarily involved in the multifamily housing
industry. Alliance Holdings is based in Chicago, Illinois and maintains a
Houston, Texas affiliate (Alliance Residential Management, LLC) which manages
the properties which secure this Loan. Alliance Holdings' real estate portfolio
includes more than 13,368 apartment units in Texas, Indiana, California and
Florida.
The Properties. The Alliance Portfolio Properties consist of eight
multifamily properties all of which are located in the Dallas and Houston
metropolitan areas. The Properties are comprised of a total of 2,762 units.
Appraisals determined an aggregate value for the Alliance Portfolio Properties
of $81,910,000.
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Mezzanine Debt. Alliance DG, L.L.C., the 99% limited partner in Alliance
DG, is the borrower (the "Alliance Mezzanine Borrower") under a mezzanine loan
(the "Alliance Mezzanine Loan") secured by the limited partnership interest in
Alliance DG and the stock in the 1% general partner of Alliance DG. The
Alliance Mezzanine Loan was originated by GACC (in its capacity as mezzanine
lender, the "Alliance Mezzanine Lender") on December 16, 1997, and has a
principal balance, as of the Cut-off Date, of approximately $9.5 million. The
Alliance Mezzanine Loan matures on December 1, 2007 and bears interest at a per
annum rate equal to LIBOR plus 4.5%. Any remaining cash flow after payment of
amounts due under the Alliance Portfolio Loan and after payment of expenses of
the Alliance Portfolio Properties is required to be used to pay the Alliance
Mezzanine Loan. The Alliance Mezzanine Borrower has certain control rights with
respect to Alliance DG and the Alliance Pool Properties, including rights
relating to the sale and management of and the budgeting of expenses relating
to the Alliance Pool Properties and the prepayment and amendment of the
Alliance Mortgage Loan. The Alliance Mezzanine Borrower has agreed to exercise
such rights subject to the approval of the Alliance Mezzanine Lender. The
mortgage lender has the right to override any objection by the Alliance
Mezzanine Lender with respect to certain of such approval rights. In addition,
the Alliance Mezzanine Lender must obtain written confirmation from each Rating
Agency prior to transferring its interest or exercising certain remedies with
respect to the Alliance Mezzanine Loan.
THE MORTGAGE LOAN SELLERS
GMACCM. GMACCM, a corporation organized under the laws of the State of
California and an affiliate of the Depositor, is a wholly-owned direct
subsidiary of GMAC Mortgage Group, Inc., which in turn is a wholly-owned direct
subsidiary of General Motors Acceptance Corporation. The principal offices of
GMACCM are located at 650 Dresher Road, Horsham, Pennsylvania 19044. Its
telephone number is (215) 328-4622.
German American Capital Corporation. GACC is a wholly-owned subsidiary of
Deutsche Bank North America Holding Corp., which in turn is a wholly-owned
subsidiary of Deutsche Bank AG, a German corporation. GACC is also an affiliate
of Deutsche Morgan Grenfell Inc., one of the Underwriters. GACC engages
primarily in the business of purchasing and holding mortgage loans pending
securitization, repackaging or other disposition. GACC also acts from time to
time as the originator of mortgage loans. Although GACC purchases and sells
mortgage loans for its own account, it does not act as a broker or dealer in
connection with any such loans. The principal offices of GACC are located at 31
West 52nd Street, New York, New York 10019. Its telephone number is (212)
469-7280.
The information set forth herein concerning the Mortgage Loan Sellers and
the underwriting conducted by each with respect to the Mortgage Loan has been
provided by the respective Mortgage Loan Sellers, and neither the Depositor nor
the Underwriters make any representation or warranty as to the accuracy or
completeness of such information.
CERTAIN UNDERWRITING MATTERS
Environmental Assessments. All of the Mortgaged Properties were subject to
a Phase I environmental site assessment (or an update of a previously conducted
assessment), and in the case of certain Mortgage Loans, a Phase II, which was
performed on behalf of the related Mortgage Loan Seller, or as to which the
related report was delivered to the related Mortgage Loan Seller in connection
with its origination or acquisition of the related Mortgage Loan. With respect
to all but four (4) of the Mortgage Loans (which represent 1.70% of the Initial
Pool Balance), such environmental assessments or updates thereof were conducted
within the 12-month period prior to the Cut-off Date. No such environmental
assessment revealed any material adverse environmental condition or
circumstance with respect to any Mortgaged Property, except for: (i) those
cases where such conditions were remediated or abated prior to the Delivery
Date; (ii) those cases in which an operations and maintenance plan or periodic
monitoring of such Mortgaged Property or nearby properties was recommended;
(iii) those cases involving a leaking underground storage tank or groundwater
contamination at a nearby property, which condition had not yet materially
affected such Mortgaged Property and as to which a responsible party has either
been identified under applicable law or was then conducting remediation of the
related condition; or (iv) those
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cases in which groundwater, soil or other contamination was identified or
suspected, and an escrow reserve, indemnity or other collateral was provided to
cover the estimated costs of continued monitoring, investigation, testing or
remediation.
The information contained herein is based on the environmental assessments
and has not been independently verified by the Depositor, the Mortgage Loan
Sellers, the Underwriters, or any of their respective affiliates.
Property Condition Assessments. Inspections of all but six of the
Mortgaged Properties (or updates of previously conducted inspections) were
conducted by independent licensed engineers on behalf of the related Mortgage
Loan Seller. All but two of such inspections were conducted within the 12-month
period prior to the Cut-off Date. Any Mortgaged Property that was not subject
to an engineering inspection on behalf of the related Mortgage Loan Seller was
inspected by representatives or another designee of the related Mortgage Loan
Seller. Such inspections were generally commissioned to inspect the exterior
walls, roofing, interior construction, mechanical and electrical systems and
general condition of the site, buildings and other improvements located at a
Mortgaged Property. With respect to certain of the Mortgage Loans, the
resulting reports indicated a variety of deferred maintenance items and
recommended capital expenditures. In some (but not all) instances, cash
reserves were established to fund such deferred maintenance and/or replacement
items.
Appraisals and Market Analysis. An appraisal for each Mortgaged Property
was performed (or an existing appraisal updated) on behalf of the related
Mortgage Loan Seller. With respect to all but three of the Mortgage Loans
(which represents 0.89% of the Cut-off Date Principal Balance), such appraisals
or market analyses (or updates) were performed during the 12-month period prior
to the Cut-off Date. See "Annex A" herein. All but three of such appraisals
were conducted by an independent appraiser that is state certified and/or
designated as a Member of the Appraisal Institute ("MAI"), in order to
establish that the appraised value of the related Mortgaged Property or
Properties exceeded the original principal balance of the Mortgage Loan (or, in
the case of a set of related Cross-Collateralized Mortgage Loans, the aggregate
original principal balance of such set). In general, such appraisals represent
the analysis and opinions of the respective appraisers at or before the time
made, and are not guarantees of, and may not be indicative of, present or
future value. There can be no assurance that another appraiser would not have
arrived at a different valuation, even if such appraiser used the same general
approach to and same method of appraising the property. In addition, appraisals
seek to establish the amount a typically motivated buyer would pay a typically
motivated seller. Such amount could be significantly higher than the amount
obtained from the sale of a Mortgaged Property under a distress or liquidation
sale. Furthermore, not all of the above-described appraisals of the Mortgaged
Properties conformed to the appraisal guidelines set forth in Title XI of the
Federal Financial Institutions Reform, Recovery and Enforcement Act of 1989.
See "Risk Factors -- The Mortgage Pool -- Limitations of Appraisals" herein.
Hazard, Liability and Other Insurance. The Mortgage Loans require that
either: (i) in most cases, the Mortgaged Property be insured by a hazard
insurance policy in an amount (subject to a customary deductible) at least
equal to the lesser of the outstanding principal balance of the related
Mortgage Loan and 100% of the full insurable replacement cost of the
improvements located on the related Mortgaged Property, and if applicable, the
related hazard insurance policy contains appropriate endorsements to avoid the
application of co-insurance and does not permit reduction in insurance proceeds
for depreciation; or (ii) in certain cases, the Mortgaged Property be insured
by hazard insurance in such other amounts as was required by the related
originators. In addition, if any portion of a Mortgaged Property securing any
Mortgage Loan was, at the time of the origination of such Mortgage Loan, in an
area identified in the Federal Register by the Federal Emergency Management
Agency as having special flood hazards, and flood insurance was available, a
flood insurance policy meeting any requirements of the then current guidelines
of the Federal Insurance Administration is in effect with a generally
acceptable insurance carrier, in an amount representing coverage not less than
the least of (1) the outstanding principal balance of such Mortgage Loan, (2)
the full insurable value of such Mortgaged Property, (3) the maximum amount of
insurance available under the National Flood Insurance Act of 1968, as amended
and (4) 100% of the replacement cost of the improvements located on the related
Mortgaged Property except in certain cases where self insurance was permitted.
In general, the standard
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form of hazard insurance policy covers physical damage to, or destruction of,
the improvements on the Mortgaged Property by fire, lightning, explosion,
smoke, windstorm and hail, riot or strike and civil commotion, subject to the
conditions and exclusions set forth in each policy.
Each Mortgage generally also requires the related borrower to maintain
comprehensive general liability insurance against claims for personal and
bodily injury, death or property damage occurring on, in or about the related
Mortgaged Property in an amount customarily required by institutional lenders.
Each Mortgage generally further requires the related borrower to maintain
business interruption or rent loss insurance in an amount not less than 100% of
the projected rental income from the related Mortgaged Property for not less
than six months.
In general, the Mortgaged Properties are not insured for earthquake risk.
With respect to Mortgaged Properties located in California, the related
Mortgage Loan Seller generally conducted seismic studies to assess the
"probable maximum loss" for the related Mortgaged Properties. In certain
circumstances, the related borrower was required to obtain earthquake insurance
covering the Mortgaged Properties. Certain of such Mortgaged Properties may be
insured in amounts less than the outstanding principal balances of such
Mortgage Loans.
ASSIGNMENT OF THE MORTGAGE LOANS; REPURCHASES AND SUBSTITUTIONS
On or prior to the Delivery Date, each Mortgage Loan Seller will assign
its Mortgage Loans, without recourse, to the Depositor, and the Depositor will
assign all the Mortgage Loans, without recourse, to the Trustee for the benefit
of the Certificateholders. In connection with the foregoing, generally each
Mortgage Loan Seller is required in accordance with, and subject to the terms
of, the related Mortgage Loan Purchase Agreement to deliver the following
documents, among others, with respect to each Mortgage Loan so assigned by it,
to the Depositor or its custodial agent (who will deliver such documents to the
Trustee) or, at the direction of the Depositor, directly to the Trustee: (a)
the original Mortgage Note, endorsed (without recourse) in blank or to the
order of Trustee; (b) the original or a copy of the related Mortgage(s),
together with originals or copies of any intervening assignments of such
document(s), in each case with evidence of recording thereon (unless such
document(s) have not been returned by the applicable recorder's office); (c)
the original or a copy of any related assignment(s) of rents and leases (if any
such item is a document separate from the Mortgage), together with originals or
copies of any intervening assignments of such document(s), in each case with
evidence of recording thereon (unless such document(s) have not been returned
by the applicable recorder's office); (d) an assignment of each related
Mortgage in blank or in favor of the Trustee, in recordable form; (e) an
assignment of any related assignment(s) of rents and leases (if any such item
is a document separate from the Mortgage) in blank or in favor of the Trustee,
in recordable form; (f) any UCC financing statements and original assignments
thereof to the Trustee; (g) an original or copy of the related lender's title
insurance policy (or, if a title insurance policy has not yet been issued, a
commitment for title insurance "marked-up" at the closing of such Mortgage
Loan); and (h) when relevant, the related ground lease or a copy thereof.
The Trustee will be required to review the documents delivered by the
related Mortgage Loan Seller and/or Depositor with respect to each Mortgage
Loan within 60 days following the Delivery Date, and the Trustee will hold the
related documents in trust. If it is found during the course of such review or
at any other time that any of the above-described documents was not delivered
with respect to any Mortgage Loan or that any such document is defective, and
in either case such omission or defect materially and adversely affects the
value of the related Mortgage Loan or the interests of Certificateholders
therein, and if the related Mortgage Loan Seller cannot deliver the document or
cure the defect within a period of 90 days following its receipt of notice of
such omission or defect, then the related Mortgage Loan Seller will be
obligated pursuant to the related Mortgage Loan Purchase Agreement (the
relevant rights under which will be assigned by the Depositor to the Trustee)
to repurchase the affected Mortgage Loan within such 90-day period at a price
(the "Purchase Price") at least equal to the unpaid principal balance of such
Mortgage Loan, together with any accrued but unpaid interest thereon to but not
including the Due Date in the Collection Period of the repurchase and any
related unreimbursed Servicing Advances (as defined herein).
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In lieu of affecting any such repurchase in the manner set forth above, a
Mortgage Loan Seller is also permitted to substitute a new mortgage loan (a
"Replacement Mortgage Loan") for the affected Mortgage Loan (any Mortgage Loan
repurchased or substituted, a "Deleted Mortgage Loan"). To qualify as a
Replacement Mortgage Loan, the Replacement Mortgage Loan must have certain
financial terms substantially similar to the Deleted Mortgage Loan and meet a
number of specific requirements. In particular, the Replacement Mortgage Loan
must (i) have a Stated Principal Balance (as defined herein) of not more than
the Stated Principal Balance of the Deleted Mortgage Loan, (ii) accrue interest
at a rate of interest at least equal to that of the Deleted Mortgage Loan,
(iii) be a fixed-rate Mortgage Loan if the Deleted Mortgage Loan is a
fixed-rate Mortgage Loan or an adjustable-rate Mortgage Loan (with the same
adjustable rate and other financial terms as the Deleted Mortgage Loan) if the
Deleted Mortgage Loan is an adjustable-rate Mortgage Loan, and (iv) have a
remaining term to stated maturity of not greater than, and not more than two
years less than, the Deleted Mortgage Loan (any mortgage loan meeting such
qualifications, a "Qualifying Substitute Mortgage Loan"). In addition, the
Replacement Mortgage Loan must be a "qualified replacement mortgage" within the
meaning of 860G(a)(4) of the Code. Finally, the Mortgage Loan Seller must
deposit in the Distribution Account an amount, if any, by which the Stated
Principal Balance of the Deleted Mortgage Loan exceeds the Stated Principal
Balance of the Replacement Mortgage Loan (the "Substitution Shortfall Amount").
The foregoing repurchase or substitution obligation will constitute the
sole remedy available to the Certificateholders and the Trustee for any failure
on the part of a Mortgage Loan Seller to deliver any of the above-described
documents with respect to any of its Mortgage Loans or for any defect in any
such document; and none of the Depositor, either of the other Mortgage Loan
Sellers or any other person or entity will be obligated to repurchase the
affected Mortgage Loan if the related Mortgage Loan Seller defaults on its
obligation to do so.
Within 45 days following the Delivery Date, the related Mortgage Loan
Seller will cause the assignments with respect to each Mortgage Loan described
in clauses (d) and (e) of the fourth preceding paragraph to be completed in the
name of the Trustee (if delivered in blank) and submitted for recording in the
real property records of the appropriate jurisdictions.
REPRESENTATIONS AND WARRANTIES; REPURCHASES
In each Mortgage Loan Purchase Agreement, subject to certain exceptions,
the related Mortgage Loan Seller has represented and warranted with respect to
each of its Mortgage Loans, as of the Delivery Date, or as of such other date
specifically provided in the representation and warranty, among other things,
generally to the effect that:
(i) Immediately prior to the transfer thereof to the Depositor, such
Mortgage Loan Seller had good and marketable title to, and was the sole owner
and holder of, such Mortgage Loan, free and clear of any and all liens,
encumbrances and other interests on, in or to such Mortgage Loan (other than,
in certain cases, the right of a subservicer to primary service such Mortgage
Loan).
(ii) Such Mortgage Loan Seller has full right and authority to sell,
assign and transfer such Mortgage Loan.
(iii) The information pertaining to such Mortgage Loan set forth in the
Mortgage Loan schedule attached to the related Mortgage Loan Purchase Agreement
was true and correct in all material respects as of the Cut-off Date.
(iv) Such Mortgage Loan was not, as of the Cut-off Date, 30 days or more
delinquent in respect of any Monthly Payment required thereunder, without
giving effect to any applicable grace period.
(v) The lien of the related Mortgage is insured by an ALTA lender's title
insurance policy, or its equivalent as adopted in the applicable jurisdiction,
issued by a nationally recognized title insurance company, insuring the
originator of the related Mortgage Loan, its successors and assigns, as to the
first priority lien of the Mortgage in the original principal amount of the
related Mortgage Loan after all advances of principal, subject only to
Permitted Encumbrances (or, if a title insurance policy has not yet been issued
in respect of any Mortgage Loan, a policy meeting the foregoing description is
evidenced
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by a commitment for title insurance "marked-up" at the closing of such loan).
"Permitted Encumbrances" include (A) the lien of current real property taxes
and assessments not yet due and payable, (B) covenants, conditions and
restrictions, rights of way, easements and other matters of public record, and
(C) exceptions and exclusions specifically referred to in the lender's title
insurance policy issued or, as evidenced by a "marked-up" commitment, to be
issued in respect of such Mortgage Loan. The Permitted Encumbrances referred to
above do not materially interfere with the security intended to be provided by
the related Mortgage, the current use or operation of the related Mortgaged
Property, or the current ability of such Mortgaged Property to generate net
operating income sufficient to service the Mortgage Loan.
(vi) Such Mortgage Loan Seller has not waived any material default,
breach, violation or event of acceleration existing under the related Mortgage
or Mortgage Note.
(vii) There is no valid offset, defense or counterclaim to such Mortgage
Loan.
(viii) Such Mortgage Loan Seller has not received actual notice (A) that
there is any proceeding pending or threatened for the total or partial
condemnation of the related Mortgaged Property or (B) that there is any
material damage at the related Mortgaged Property that materially and adversely
affects the value of such Mortgaged Property.
(ix) At origination, such Mortgage Loan complied with all applicable usury
laws.
(x) The proceeds of such Mortgage Loan have been fully disbursed and there
is no requirement for future advances thereunder.
(xi) The Mortgage Note and Mortgage for such Mortgage Loan and all other
documents and instruments evidencing, guaranteeing, insuring or otherwise
securing such Mortgage Loan have been duly and properly executed by the parties
thereto, and each is the legal, valid and binding obligation of the maker
thereof (subject to any non-recourse provisions contained in any of the
foregoing agreements and any applicable state anti-deficiency legislation),
enforceable in accordance with its terms, except as such enforcement may be
limited by bankruptcy, insolvency, reorganization, receivership, moratorium or
other laws relating to or affecting the rights of creditors generally and by
general principles of equity (regardless of whether such enforcement is
considered in a proceeding in equity or at law).
(xii) All insurance required under the Mortgage for such Mortgage Loan is
in full force and effect with respect to the related Mortgaged Property.
(xiii) The related Mortgaged Property was subject to one or more
environmental site assessments (or an update of a previously conducted
assessment), which was performed on behalf of such Mortgage Loan Seller, or as
to which the related report was delivered to such Mortgage Loan Seller in
connection with its origination or acquisition of such Mortgage Loan; and such
Mortgage Loan Seller, having made no independent inquiry other than reviewing
the resulting report(s) and/or employing an environmental consultant to perform
the assessment(s) referenced herein, has no knowledge of any material and
adverse environmental condition or circumstance affecting such Mortgaged
Property that was not disclosed in the related report(s).
(xiv) Such Mortgage Loan is not cross-collateralized with a mortgage loan
other than another Mortgage Loan.
(xv) All escrow deposits relating to such Mortgage Loan that were required
to be deposited with the mortgagee or its agent under the terms of the related
loan documents, have been so deposited.
(xvi) As of the date of origination of such Mortgage Loan and, to the
actual knowledge of the Mortgage Loan Seller, as of the Closing Date, the
related Mortgaged Property was and is free and clear of any mechanics' and
materialmen's liens or liens in the nature thereof which create a lien prior to
that created by the related Mortgage, except those which are insured against by
the title policy referred to in (v) above.
(xviii) No holder of the Mortgage Loan has, to the Mortgage Loan Seller's
knowledge, advanced funds or induced, solicited or knowingly received any
advance of funds from a party other than the owner of the related Mortgaged
Property, directly or indirectly, for the payment of any amount required by the
Mortgage Loan.
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(xix) To such Mortgage Loan Seller's knowledge, based on due diligence
customarily performed in the origination of comparable mortgage loans by the
Mortgage Loan Seller, as of the date of origination of the Mortgage Loan, the
related Mortgagor or operator (with respect to certain healthcare properties)
was in possession of all material licenses, permits and authorizations required
by applicable laws for the ownership and operation of the related Mortgaged
Property as it was then operated.
(xx) The related Mortgage or Mortgage Note, together with applicable state
law, contains customary and enforceable provisions such as to render the rights
and remedies of the holders thereof adequate for the practical realization
against the related Mortgaged Property of the principal benefits of the
security intended to be provided thereby.
(xxi) In connection with the origination or acquisition of such Mortgage
Loan, such Mortgage Loan Seller has inspected or caused to be inspected the
Mortgaged Property.
(xxii) Such Mortgage Loan contains provisions for the acceleration of the
payment of the unpaid principal balance of such Mortgage Loan if, without
complying with the requirements of such Mortgage Loan, the related Mortgaged
Property is directly or indirectly transferred or sold.
(xxiii) The related Mortgagor is an entity, other than an individual,
whose organizational documents or the related Mortgage Loan Documents provide
substantially to the effect that such Mortgagor: (A) is formed or organized
solely for the purpose of owning and operating the Mortgaged Property securing
the Mortgage Loan, (B) may not engage in any business unrelated to such
Mortgaged Property, (C) does not have any assets other than those related to
its interest in and operation of such Mortgage Property, (D) may not incur
indebtedness other than as permitted by the related Mortgage or other Mortgage
Loan Documents, (E) has its own books and records separate and apart from any
other person, and (F) holds itself out as a legal entity, separate and apart
from any other person.
If it is found that there exists a material breach of any of the foregoing
representations and warranties of any of the Mortgage Loan Sellers with respect
to any of its Mortgage Loans, and if such Mortgage Loan Seller cannot cure such
breach within a period of 90 days following its receipt of notice of such
breach, then such Mortgage Loan Seller will be obligated pursuant to the
related Mortgage Loan Purchase Agreement (the relevant rights under which will
be assigned by the Depositor to the Trustee) to repurchase the affected
Mortgage Loan within such 90 day period at the applicable Purchase Price or
substitute a Replacement Mortgage Loan for the affected Mortgage Loan and pay
any Substitution Shortfall Amount.
The foregoing repurchase or substitution obligation will constitute the
sole remedy available to the Certificateholders and the Trustee for any breach
of a Mortgage Loan Seller's representations and warranties regarding any of its
Mortgage Loans. As to any Mortgage Loan, the related Mortgage Loan Seller will
be the sole Warranting Party; and none of the Depositor, any of the other
Mortgage Loan Sellers or any other person or entity will be obligated to
repurchase any affected Mortgage Loan in connection with a breach of the
related Mortgage Loan Seller's representations and warranties if the related
Mortgage Loan Seller defaults on its obligation to do so. See "The Pooling and
Servicing Agreements -- Representations and Warranties; Repurchases" in the
Prospectus.
CHANGES IN MORTGAGE ASSET POOL CHARACTERISTICS
The description in this Prospectus Supplement of the Mortgage Asset Pool
and the Mortgaged Properties is based upon the Mortgage Asset Pool as expected
to be constituted at the time the Offered Certificates are issued, as adjusted
for the scheduled principal payments due on or before the Cut-off Date. Prior
to the issuance of the Offered Certificates, a Mortgage Loan may be removed
from the Mortgage Asset Pool if the Depositor deems such removal necessary or
appropriate or if it is prepaid. A limited number of other mortgage loans may
be included in the Mortgage Asset Pool prior to the issuance of the Offered
Certificates, unless including such mortgage loans would materially alter the
characteristics of the Mortgage Asset Pool as described herein. The information
set forth herein is representative of the characteristics of the Mortgage Asset
Pool as it will be constituted at the time the Offered Certificates are issued,
although the range of Mortgage Rates and maturities and certain other
characteristics of the Mortgage Loans in the Mortgage Asset Pool may vary.
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A Current Report on Form 8-K (the "Form 8-K") will be available to
purchasers of the Offered Certificates on or shortly after the Delivery Date
and will be filed, together with the Pooling and Servicing Agreement, with the
Securities and Exchange Commission within fifteen days after the initial
issuance of the Offered Certificates. In the event Mortgage Loans are removed
from or added to the Mortgage Asset Pool as set forth in the preceding
paragraph, such removal or addition will be noted in the
Form 8-K.
SERVICING OF THE MORTGAGE LOANS
GENERAL
The Servicer will be responsible for the servicing and administration of
all the Mortgage Loans; however, the holder or holders of Certificates
evidencing a majority interest in the Controlling Class (as defined herein)
will be entitled to terminate substantially all the rights and duties of the
Servicer in respect of Specially Serviced Mortgage Loans (as defined herein)
and REO Properties and to appoint a replacement to perform such duties under
substantially the same terms and conditions as applicable to the Servicer. See
"--Termination of the Servicer with Respect to Specially Serviced Mortgage
Loans and REO Properties" below. The Servicer, either directly or through
Sub-Servicers, will be required to service and administer the Mortgage Loans in
the best interests of and for the benefit of the Certificateholders (as
determined by the Servicer in its good faith and reasonable judgment), in
accordance with applicable law, the terms of the Pooling and Servicing
Agreement and the terms of the respective Mortgage Loans and, to the extent
consistent with the foregoing, in the same manner as is normal and usual in its
general mortgage servicing and REO property management activities with respect
to mortgage loans and REO properties that are comparable to those for which it
is responsible under the Pooling and Servicing Agreement. Such requirements are
herein referred to as the "Servicing Standard."
A "Specially Serviced Mortgage Loan" is any Mortgage Loan as to which any
of the following events (each, a "Special Servicing Event") has occurred: (i)
the related borrower has failed to make when due any Balloon Payment, which
failure has continued unremedied for 30 days; (ii) the related borrower has
failed to make when due any Monthly Payment (other than a Balloon Payment) or
any other payment required under the related Mortgage Note or the related
Mortgage(s), which failure continues unremedied for 60 days; (iii) the Servicer
has determined in its good faith and reasonable judgment, that a default in the
making of a Monthly Payment or any other payment required under the related
Mortgage Note or the related Mortgage(s) is likely to occur within 30 days and
is likely to remain unremedied for at least 60 days or, in the case of a
Balloon Payment, for at least 30 days; (iv) there shall have occurred a default
under the related loan documents, other than as described in clause (i) or (ii)
above, that materially impairs the value of the related Mortgaged Property as
security for the Mortgage Loan or otherwise materially and adversely affects
the interests of Certificateholders, which default has continued unremedied for
the applicable grace period under the terms of the Mortgage Loan (or, if no
grace period is specified, 60 days); (v) a decree or order of a court or agency
or supervisory authority having jurisdiction in the premises in an involuntary
case under any present or future federal or state bankruptcy, insolvency or
similar law or the appointment of a conservator or receiver or liquidator in
any insolvency, readjustment of debt, marshalling of assets and liabilities or
similar proceedings, or for the winding-up or liquidation of its affairs, shall
have been entered against the related borrower and such decree or order shall
have remained in force undischarged or unstayed for a period of 60 days; (vi)
the related borrower shall have consented to the appointment of a conservator
or receiver or liquidator in any insolvency, readjustment of debt, marshalling
of assets and liabilities or similar proceedings of or relating to such
borrower or of or relating to all or substantially all of its property; (vii)
the related borrower shall have admitted in writing its inability to pay its
debts generally as they become due, filed a petition to take advantage of any
applicable insolvency or reorganization statute, made an assignment for the
benefit of its creditors, or voluntarily suspended payment of its obligations;
and (viii) the Servicer shall have received notice of the commencement of
foreclosure or similar proceedings with respect to the related Mortgaged
Property or Properties.
A Mortgage Loan will cease to be a Specially Serviced Mortgage Loan (and
will become a "Corrected Mortgage Loan") at such time as such of the following
as are applicable occur with respect
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to the circumstances identified above that caused the Mortgage Loan to be
characterized as a Specially Serviced Mortgage Loan (and provided that no other
Special Servicing Event then exists):
(a) with respect to the circumstances described in clauses (i) and (ii) of
the preceding paragraph, the related borrower has made three consecutive full
and timely Monthly Payments under the terms of such Mortgage Loan (as such
terms may be changed or modified in connection with a bankruptcy or similar
proceeding involving the related borrower or by reason of a modification,
waiver or amendment granted or agreed to by the Servicer);
(b) with respect to the circumstances described in clauses (iii), (v),
(vi) and (vii) of the preceding paragraph, such circumstances cease to exist in
the good faith and reasonable judgment of the Servicer;
(c) with respect to the circumstances described in clause (iv) of the
preceding paragraph, such default is cured; and
(d) with respect to the circumstances described in clause (viii) of the
preceding paragraph, such proceedings are terminated.
The Servicer will be required to service and administer the respective
groups of related Cross-Collateralized Mortgage Loans as a single Mortgage Loan
as and when it deems necessary and appropriate, consistent with the Servicing
Standard. If any Cross-Collateralized Mortgage Loan becomes a Specially
Serviced Mortgage Loan, then each other Mortgage Loan that is
cross-collateralized with it shall also become a Specially Serviced Mortgage
Loan. Similarly, no Cross-Collateralized Mortgage Loan shall subsequently
become a Corrected Mortgage Loan, unless and until all Special Servicing Events
in respect of each other Mortgage Loan that is cross-collateralized with it,
are remediated or otherwise addressed as contemplated above.
Set forth below, following the subsection captioned "--The Servicer," is a
description of certain pertinent provisions of the Pooling and Servicing
Agreement relating to the servicing of the Mortgage Loans. Reference is also
made to the Prospectus, in particular to the section captioned "The Pooling and
Servicing Agreements" for important additional information regarding the terms
and conditions of the Pooling and Servicing Agreement as they relate to the
rights and obligations of the Servicer thereunder. The Servicer constitutes a
"Master Servicer" for purposes of the Prospectus. However, information set
forth in the Prospectus should be read taking account of all supplemental
information contained herein.
THE SERVICER
GMACCM will be the Servicer with respect to the Mortgage Asset Pool. As of
February 28, 1998, the Servicer had a total commercial and multifamily mortgage
loan servicing portfolio of approximately $41.6 billion. See "Description of
the Mortgage Asset Pool -- The Mortgage Loan Sellers -- GMACCM" herein and
"GMAC Commercial Mortgage Corporation" in the Prospectus.
TERMINATION OF THE SERVICER WITH RESPECT TO SPECIALLY SERVICED MORTGAGE LOANS
AND REO PROPERTIES
The holder or holders of Certificates entitled to more than 50% of the
voting rights allocated to the Controlling Class (as defined below) may at any
time terminate substantially all of the rights and duties of the Servicer in
respect of Specially Serviced Mortgage Loans and REO Properties and appoint a
replacement (a "Replacement Special Servicer") to perform such duties under
substantially the same terms and conditions as applicable to the Servicer. Such
holder(s) shall designate a replacement to so serve by the delivery to the
Trustee of a written notice stating such designation. The Trustee shall,
promptly after receiving any such notice, so notify the Rating Agencies. The
designated replacement shall become the Replacement Special Servicer as of the
date the Trustee shall have received: (i) written confirmation from each Rating
Agency stating that if the designated replacement were to serve as Replacement
Special Servicer under the Pooling and Servicing Agreement, none of the
then-current rating or ratings of all outstanding Classes of the Certificates
would be qualified, downgraded or withdrawn as a result thereof; (ii) a written
acceptance of all obligations of a Replacement Special Servicer, executed by
the designated replacement; and (iii) an opinion of counsel to the effect that
the
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designation of such replacement to serve as Replacement Special Servicer is in
compliance with the Pooling and Servicing Agreement, that the designated
replacement will be bound by the terms of the Pooling and Servicing Agreement
and that the Pooling and Servicing Agreement will be enforceable against such
designated replacement in accordance with its terms. The Servicer shall be
deemed to have resigned from its duties in respect of Specially Serviced
Mortgage Loans and REO Properties simultaneously with such designated
replacement's becoming the Replacement Special Servicer under the Pooling and
Servicing Agreement. Any Replacement Special Servicer may be similarly so
replaced by the holder or holders of Certificates entitled to more than 50% of
the voting rights allocated to the Controlling Class.
In general, a Replacement Special Servicer will possess rights and
obligations comparable to those of a Master Servicer described in the
Prospectus under "The Pooling and Servicing Agreements -- Sub-Servicers,"
"--Evidence as to Compliance" and "--Certain Matters Regarding a Master
Servicer and the Depositor." In addition, a Replacement Special Servicer will
be responsible for performing the servicing and other administrative duties
attributable to the Servicer herein or a Master Servicer under "The Pooling and
Servicing Agreements" (and, in particular, under the subsection thereof
captioned "--Realization Upon Defaulted Mortgage Loans") in the Prospectus,
insofar as such duties relate to Specially Serviced Mortgage Loans and REO
Properties. Notwithstanding any appointment of a Replacement Special Servicer,
however, the Servicer shall continue to collect information and prepare all
reports to the Trustee and to pay the reasonable compensation of the Trustee
required under the Pooling and Servicing Agreement with respect to any
Specially Serviced Mortgage Loans and REO Properties, and further to render
incidental services with respect to any Specially Serviced Mortgage Loans and
REO Properties as are specifically provided for in the Pooling and Servicing
Agreement. Unless the same person acts in both capacities, the Servicer and the
Replacement Special Servicer shall not have any responsibility for the
performance of each other's duties under the Pooling and Servicing Agreement.
The "Controlling Class" will be the most subordinate Class of Principal
Balance Certificates outstanding (the Class A-1 and Class A-2 Certificates
being treated as a single Class for this purpose) that has a Certificate
Balance at least equal to 25% of its initial Certificate Balance (or, if no
Class of Principal Balance Certificates has a Certificate Balance at least
equal to 25% of its initial Certificate Balance, then the "Controlling Class"
will be the most subordinate Class of Principal Balance Certificates with the
largest Certificate Balance then outstanding). Initially the Controlling Class
will consist of the Class N Certificates. It is anticipated that the Servicer
will acquire certain Subordinate Certificates, including the Class N
Certificates.
SERVICING AND OTHER COMPENSATION AND PAYMENT OF EXPENSES
The principal compensation to be paid to the Servicer in respect of its
servicing activities will be the Servicing Fee, the Special Servicing Fee, the
Workout Fee and the Liquidation Fee. The "Servicing Fee" will be payable
monthly on a loan-by-loan basis from amounts received or advanced in respect of
interest on each Mortgage Loan (including Specially Serviced Mortgage Loans and
Mortgage Loans as to which the related Mortgaged Property has become an REO
Property), will accrue at a percentage rate per annum set forth on Annex A for
each Mortgage Loan (the "Servicing Fee Rate"), and will be computed on the
basis of the same principal amount and for the same period respecting which any
related interest payment due or deemed due on the related Mortgage Loan is
computed. The "Special Servicing Fee" will accrue solely with respect to each
Specially Serviced Mortgage Loan and each Mortgage Loan as to which the related
Mortgaged Property has become an REO Property, at a rate equal to 0.25% per
annum, on the basis of the same principal amount and for the same period
respecting which any related interest payment due or deemed due on such
Mortgage Loan is computed, and will be payable monthly from general collections
on the Mortgage Loans then on deposit in the Certificate Account. A "Workout
Fee" will in general be payable with respect to each Corrected Mortgage Loan.
As to each Corrected Mortgage Loan, the Workout Fee will be payable out of, and
will be calculated by application of a "Workout Fee Rate" of 1.0% to, each
collection of interest and principal (including scheduled payments,
prepayments, Balloon Payments and payments at maturity) received on such
Mortgage Loan for so long as it remains a Corrected Mortgage Loan. The Workout
Fee with respect to any Corrected Mortgage
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Loan will cease to be payable if such loan again becomes a Specially Serviced
Mortgage Loan or if the related Mortgaged Property becomes an REO Property;
provided that a new Workout Fee will become payable if and when such Mortgage
Loan again becomes a Corrected Mortgage Loan. If the Servicer is terminated
(other than for cause) or resigns with respect to any or all of its servicing
duties, it shall retain the right to receive any and all Workout Fees payable
with respect to Mortgage Loans that became Corrected Mortgage Loans during the
period that it had responsibility for servicing Specially Serviced Mortgage
Loans and that were still Corrected Mortgage Loans at the time of such
termination or resignation (and the successor Servicer or Replacement Special
Servicer shall not be entitled to any portion of such Workout Fees), in each
case until the Workout Fee for any such loan ceases to be payable in accordance
with the preceding sentence. A "Liquidation Fee" will be payable with respect
to each Specially Serviced Mortgage Loan as to which the Servicer obtains a
full or discounted payoff from the related borrower and, except as otherwise
described below, with respect to any Specially Serviced Mortgage Loan or REO
Property as to which the Servicer receives any Liquidation Proceeds. As to each
such Specially Serviced Mortgage Loan and REO Property, the Liquidation Fee
will be payable from, and will be calculated by application of a "Liquidation
Fee Rate" of 1.0% to, the related payment or proceeds. Notwithstanding anything
to the contrary described above, no Liquidation Fee will be payable based on,
or out of, Liquidation Proceeds received in connection with the purchase of any
Specially Serviced Mortgage Loan or REO Property by the Servicer, a Replacement
Special Servicer or any holder of Certificates evidencing a majority interest
in the Controlling Class or the purchase of all of the Mortgage Loans and REO
Properties by the Servicer or the Depositor in connection with the termination
of the Trust Fund. If, however, Liquidation Proceeds are received with respect
to any Corrected Mortgage Loan and the Servicer is properly entitled to a
Workout Fee, such Workout Fee will be payable based on and out of the portion
of such Liquidation Proceeds that constitute principal and/or interest.
As additional servicing compensation, the Servicer will be entitled to
retain all assumption and modification fees, late payment charges, charges for
beneficiary statements or demands, amounts collected for checks returned for
insufficient funds, and any similar or ancillary fees, in each case to the
extent actually paid by a borrower with respect to a Mortgage Loan. The
Servicer will also be entitled to: (a) Prepayment Interest Excesses and Balloon
Payment Interest Excesses (each described below) collected on the Mortgage
Loans; and (b) any default interest actually collected on the Mortgage Loans,
but only to the extent that such default interest is not allocable to pay any
portion of a Workout Fee or Liquidation Fee payable with respect to the related
Mortgage Loan or to cover interest on any Advances (as defined below) made in
respect of the related Mortgage Loan. In addition, the Servicer will be
authorized to invest or direct the investment of funds held in any and all
accounts maintained by it that constitute part of the REO Account, if
established, and the Replacement Special Servicer will be authorized to invest
or direct the investment of funds held in the REO Account, and the Servicer and
Replacement Special Servicer, respectively, will be entitled to retain any
interest or other income earned on such funds, but will be required to cover
any losses from its own funds without any right to reimbursement. The Servicer
and Replacement Special Servicer will have such rights and obligations
irrespective of whether the Servicer or Replacement Special Servicer, as
applicable, actually directs the investment of such funds.
If a Replacement Special Servicer is appointed, then as compensation for
performing its duties in respect of the Specially Serviced Mortgage Loans and
REO Properties, such Replacement Special Servicer will be entitled to receive
all Special Servicing Fees, Liquidation Fees and, except as otherwise described
above, Workout Fees otherwise payable to the Servicer for performing such
duties. A Replacement Special Servicer will also become (and the Servicer will
also cease to be) entitled to any default interest actually collected on the
Mortgage Loans, but only to the extent that (i) such default interest is not
allocable to pay any portion of a Workout Fee or Liquidation Fee payable to the
Servicer or Replacement Special Servicer with respect to the related Mortgage
Loan or to cover interest payable to the Servicer, the Replacement Special
Servicer, the Trustee or the Fiscal Agent with respect to any Advances made in
respect of the related Mortgage Loan and (ii) such default interest is
allocable to the period that the related Mortgage Loan constituted a Specially
Serviced Mortgage Loan.
If a borrower voluntarily prepays a Mortgage Loan, in whole or in part,
after the Due Date but before the Determination Date in any calendar month, the
amount of interest (net of related Servicing Fees)
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accrued on such prepayment from such Due Date to, but not including, the date
of prepayment (or any later date through which interest accrues) will, to the
extent actually collected, constitute a "Prepayment Interest Excess."
Conversely, if a borrower prepays a Mortgage Loan, in whole or in part, after
the Determination Date in any calendar month and does not pay interest on such
prepayment through the end of such calendar month, then the shortfall in a full
month's interest (net of related Servicing Fees) on such prepayment will
constitute a "Prepayment Interest Shortfall." Similarly, if the Due Date for
any Balloon Payment occurs after the first day of, but before the Determination
Date in, any calendar month, the amount of interest (net of related Servicing
Fees) accrued on the related Balloon Loan from the beginning of such month to
the maturity date will, to the extent actually collected in connection with the
payment of such Balloon Payment on or before such Determination Date,
constitute a "Balloon Payment Interest Excess." Conversely, if the Due Date for
any Balloon Payment occurs after the Determination Date in any calendar month,
the amount of interest (net of related Servicing Fees) that would have accrued
on the related Balloon Loan from the stated maturity date through the end of
such calendar month will, to the extent not paid by the borrower, constitute a
"Balloon Payment Interest Shortfall." Prepayment Interest Excesses and Balloon
Payment Interest Excesses collected on the Mortgage Loans will be retained by
the Servicer as additional servicing compensation. The Servicer will cover, out
of its own funds, any Balloon Payment Interest Shortfalls and, to the extent of
that portion of its aggregate Servicing Fee for the same Collection Period
calculated for each Mortgage Loan at a rate equal to the Master Servicing Fee
Rate (as defined in Annex A herein) for such Mortgage Loan, Prepayment Interest
Shortfalls incurred with respect to the Mortgage Loans during any Collection
Period.
The Servicer and any Replacement Special Servicer will, in general, each
be required to pay its overhead and any general and administrative expenses
incurred by it in connection with its servicing activities under the Pooling
and Servicing Agreement, including the fees of any Sub-Servicers retained by
it, and will not be entitled to reimbursement therefor except as expressly
provided in the Pooling and Servicing Agreement. In general, customary,
reasonable and necessary "out of pocket" costs and expenses incurred by the
Servicer or a Replacement Special Servicer in connection with the servicing of
a Mortgage Loan after a default, delinquency or other unanticipated event, or
in connection with the administration of any REO Property, will constitute
"Servicing Advances" (Servicing Advances and P&I Advances, collectively,
"Advances") and, in all cases, will be reimbursable from future payments and
other collections, including in the form of Liquidation Proceeds, Insurance
Proceeds and Condemnation Proceeds, in any event on or in respect of the
related Mortgage Loan or REO Property ("Related Proceeds"). Notwithstanding the
foregoing, the Servicer and any Replacement Special Servicer will each be
permitted to pay, or to direct the payment of, certain servicing expenses
directly out of the Certificate Account or the REO Account, as applicable, and
at times without regard to the relationship between the expense and the funds
from which it is being paid (including in connection with the remediation of
any adverse environmental circumstance or condition at a Mortgaged Property or
an REO Property, although in such specific circumstances the Servicer may
advance the costs thereof). Furthermore, if any Replacement Special Servicer is
required under the Pooling and Servicing Agreement to make any Servicing
Advance but does not desire to do so, such Replacement Special Servicer may, in
its sole discretion, request that the Servicer make such Advance, such request
to be made in writing and in a timely manner that does not adversely affect the
interests of any Certificateholder; provided, however, that such Replacement
Special Servicer will have an obligation to make any such Servicing Advance
that, in its good faith and reasonable judgment, is necessary to avoid (i) a
penalty, (ii) material harm to a Mortgaged Property or (iii) any other material
adverse consequence to the Trust Fund (an "Emergency Advance"). The Servicer
shall make any such Servicing Advance (other than an Emergency Advance)
requested by a Replacement Special Servicer within ten (10) days of the
Servicer's receipt of such request. A Replacement Special Servicer will be
relieved of any obligations with respect to an Advance that it requests the
Servicer to make (regardless of whether or not the Servicer makes that
Advance), other than an Emergency Advance.
If the Servicer (or a Replacement Special Servicer) is required under the
Pooling and Servicing Agreement to make a Servicing Advance, but does not do so
within 15 days after such Servicing Advance is required to be made, then the
Trustee will, if it has actual knowledge of such failure, be
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required to give the defaulting party notice of such failure and, if such
failure continues for three more days, the Trustee will be required to make
such Servicing Advance. If the Trustee fails to make a required Servicing
Advance, the Fiscal Agent will be required to make such Servicing Advance.
The Servicer, any Replacement Special Servicer, the Trustee and the Fiscal
Agent will be obligated to make Servicing Advances only to the extent that such
Servicing Advances are, in the reasonable and good faith judgment of such
party, ultimately recoverable from Related Proceeds.
As and to the extent described herein, the Servicer, any Replacement
Special Servicer, the Trustee and the Fiscal Agent are each entitled to receive
interest at the Reimbursement Rate (as defined herein) on Servicing Advances
made thereby. See "The Pooling and Servicing Agreements -- Certificate Account"
and "--Servicing Compensation and Payment of Expenses" in the Prospectus and
"Description of the Certificates -- P&I Advances" herein.
The Servicer will be required to pay, out of its Servicing Fee, the
compensation of the Trustee.
MODIFICATIONS, WAIVERS, AMENDMENTS AND CONSENTS
The Servicer may agree to any modification, waiver or amendment of any
term of, forgive interest on and principal of, capitalize interest on, permit
the release, addition or substitution of collateral securing, and/or permit the
release of the borrower on or any guarantor of any Mortgage Loan without the
consent of the Trustee or any Certificateholder, subject, however, to each of
the following limitations, conditions and restrictions:
(i) the Servicer may not agree to any modification, waiver or amendment of
any term of, or take any of the other above referenced actions with respect to,
any Mortgage Loan that would affect the amount or timing of any related payment
of principal, interest or other amount payable thereunder or, in the Servicer's
good faith and reasonable judgment, would materially impair the security for
such Mortgage Loan or reduce the likelihood of timely payment of amounts due
thereon, unless, in the Servicer's judgment, a material default on such
Mortgage Loan has occurred or a default in respect of payment on such Mortgage
Loan is reasonably foreseeable, and such modification, waiver, amendment or
other action is reasonably likely to produce a greater recovery to
Certificateholders on a present value basis than would liquidation;
(ii) the Servicer may not extend the maturity of any Mortgage Loan beyond
the date that is two years prior to the Rated Final Distribution Date;
(iii) the Servicer shall not make or permit any modification, waiver or
amendment of any term of, or take any of the other above referenced actions
with respect to, any Mortgage Loan that would (A) cause any of REMIC I, REMIC
II or REMIC III to fail to qualify as a REMIC under the Code or, except as
otherwise described under "--REO Properties" below, result in the imposition of
any tax on "prohibited transactions" or "contributions" after the startup date
of any such REMIC under the REMIC Provisions or (B) cause any Mortgage Loan to
cease to be a "qualified mortgage" within the meaning of Section 860G(a)(3) of
the Code (provided that the Servicer shall not be liable for judgments as
regards decisions made under this subsection which were made in good faith and,
unless it would constitute bad faith or negligence to do so, the Servicer may
rely on opinions of counsel in making such decisions);
(iv) the Servicer shall not permit any borrower to add or substitute any
collateral for an outstanding Mortgage Loan, which collateral constitutes real
property, unless the Servicer shall have first determined in its good faith and
reasonable judgment, based upon a Phase I environmental assessment (and such
additional environmental testing as the Servicer deems necessary and
appropriate), that such additional or substitute collateral is in compliance
with applicable environmental laws and regulations and that there are no
circumstances or conditions present with respect to such new collateral
relating to the use, management or disposal of any hazardous materials for
which investigation, testing, monitoring, containment, clean-up or remediation
would be required under any then applicable environmental laws and/or
regulations; and
(v) with limited exceptions, the Servicer shall not release any collateral
securing an outstanding Mortgage Loan;
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provided that (x) the limitations, conditions and restrictions set forth in
clauses (i) through (v) above will not apply to any modification of any term of
any Mortgage Loan that is required under the terms of such Mortgage Loan in
effect on the Delivery Date or that is solely within the control of the related
borrower, and (y) notwithstanding clauses (i) through (v) above, the Servicer
will not be required to oppose the confirmation of a plan in any bankruptcy or
similar proceeding involving a borrower if in its reasonable and good faith
judgment such opposition would not ultimately prevent the confirmation of such
plan or one substantially similar.
SALE OF DEFAULTED MORTGAGE LOANS
The Pooling and Servicing Agreement grants to the Servicer, any
Replacement Special Servicer and the holder or holders of Certificates
evidencing a majority interest in the Controlling Class a right to purchase
from the Trust Fund certain defaulted Mortgage Loans. If the Servicer has
determined, in its good faith and reasonable judgment, that any defaulted
Mortgage Loan will become the subject of a foreclosure, the Servicer will be
required to promptly so notify in writing the Trustee, and the Trustee will be
required, within 10 days after receipt of such notice, to notify the holders of
the Controlling Class. Any holder or holders of Certificates evidencing a
majority interest in the Controlling Class may, at its or their option,
purchase from the Trust Fund, at a price equal to the applicable Purchase
Price, any such defaulted Mortgage Loan. If such Certificateholders have not
purchased such defaulted Mortgage Loan within 15 days of their having received
notice in respect thereof, either the Servicer or any Replacement Special
Servicer may, at its option, purchase such defaulted Mortgage Loan from the
Trust Fund, at a price equal to the applicable Purchase Price.
The Servicer may offer to sell any such defaulted Mortgage Loan not
otherwise purchased pursuant to the prior paragraph, if and when the Servicer
determines, consistent with the Servicing Standard, that such a sale would be
in the best economic interests of the Trust Fund. Such offer is to be made in a
commercially reasonable manner for a period of not less than 10 days. Unless
the Servicer determines, in its good faith and reasonable judgment, that
acceptance of any offer would not be in the best economic interests of the
Trust Fund, the Servicer shall accept the highest cash offer received from any
person that constitutes a fair price (which may be less than the Purchase
Price) for such Mortgage Loan; provided that none of the Servicer, any
Replacement Special Servicer, the Depositor, the holder of any Certificate or
an affiliate of any such party may purchase such Mortgage Loan for less than
the Purchase Price unless at least two other offers are received from
independent third parties. See also "The Pooling and Servicing Agreements --
Realization Upon Defaulted Mortgage Loans" in the Prospectus.
REO PROPERTIES
In general, the Servicer will be obligated to (or may contract with a
third party to) operate and manage any Mortgaged Property acquired as REO
Property in a manner that would, in its good faith and reasonable judgment and
to the extent commercially feasible, maximize the Trust Fund's net after-tax
proceeds from such property. After the Servicer reviews the operation of such
property and consults with the Trustee to determine the Trust Fund's federal
income tax reporting position with respect to income it is anticipated that the
Trust Fund would derive from such property, the Servicer could determine that
it would not be commercially feasible to manage and operate such property in a
manner that would avoid the imposition of a tax on "net income from foreclosure
property" within the meaning of the REMIC Provisions or a tax on "prohibited
transactions" under Section 860F of the Code (either such tax referred to
herein as an "REO Tax"). To the extent that income the Trust Fund receives from
an REO Property is subject to a tax on (i) "net income from foreclosure
property," such income would be subject to federal tax at the highest marginal
corporate tax rate and (ii) "prohibited transactions," such income would be
subject to federal tax at a 100% rate. The determination as to whether income
from an REO Property would be subject to an REO Tax will depend on the specific
facts and circumstances relating to the management and operation of each REO
Property. Generally, income from an REO Property that is directly operated by
the Servicer would be apportioned and classified as "service" or "non-service"
income. The "service" portion of such income could be subject to federal tax
either at the highest marginal corporate tax rate or at the 100% rate on
"prohibited transactions," and the "non-service"
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portion of such income could be subject to federal tax at the highest marginal
corporate tax rate or, although it appears unlikely, at the 100% rate
applicable to "prohibited transactions." Any REO Tax imposed on the Trust
Fund's income from an REO Property would reduce the amount available for
distribution to Certificateholders. Certificateholders are advised to consult
their tax advisors regarding the possible imposition of REO Taxes in connection
with the operation of commercial REO Properties by REMICs. The Servicer will be
required to sell any REO Property acquired on behalf of the Trust Fund within
the time period and in the manner described under "The Pooling and Servicing
Agreements -- Realization Upon Defaulted Mortgage Loans" in the Prospectus.
The Servicer, or, if appointed, the Replacement Special Servicer, shall
establish and maintain one or more eligible accounts (the "REO Account"), to be
held on behalf of the Trustee in trust for the benefit of the
Certificateholders, for the retention of revenues, Liquidation Proceeds (net of
related liquidation expenses) and Insurance Proceeds derived from each REO
Property. The Servicer or Replacement Special Servicer, as applicable, shall
use the funds in the REO Account to pay for the proper operation, management,
maintenance, disposition and liquidation of any REO Property, but only to the
extent of amounts on deposit in the REO Account relate to such REO Property. To
the extent that amounts in the REO Account in respect of any REO Property are
insufficient to make such payments, such Servicer or Replacement Special
Servicer shall make a Servicing Advance, unless it determines such Servicing
Advance would be nonrecoverable. Within one Business Day following the end of
each Collection Period, the Servicer or Replacement Special Servicer shall
deposit all amounts collected received in respect of each REO Property during
such Collection Period, net of any amounts withdrawn to make any permitted
disbursements, to the Certificate Account, provided that the Servicer and the
Replacement Special Servicer may retain in the REO Account permitted reserves.
INSPECTIONS; COLLECTION OF OPERATING INFORMATION
The Servicer is required to (or may contract with a third party to)
perform physical inspections of each Mortgaged Property at least once every two
years (or, if the related Mortgage Loan has a then-current balance greater than
$2,000,000, at least once every year). In addition, the Servicer, subject to
statutory limitations or limitations set forth in the related loan documents,
is required to perform a physical inspection of each Mortgaged Property as soon
as practicable after the related Mortgage Loan becomes a Specially Serviced
Mortgage Loan. The Servicer will be required to prepare or cause to be prepared
a written report of each such inspection performed thereby describing the
condition of the Mortgaged Property.
With respect to each Mortgage Loan that requires the borrower to deliver
operating statements with respect to the related Mortgaged Property, the
Servicer is also required to make reasonable efforts to collect and review such
statements. However, there can be no assurance that any operating statements
required to be delivered will in fact be delivered, nor is the Servicer likely
to have any practical means of compelling such delivery in the case of an
otherwise performing Mortgage Loan.
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DESCRIPTION OF THE CERTIFICATES
GENERAL
The Certificates will be issued pursuant to the Pooling and Servicing
Agreement and will represent in the aggregate the entire beneficial ownership
interest in a Trust Fund consisting of: (i) the Mortgage Loans and all payments
under and proceeds of the Mortgage Loans received after the Cut-off Date
(exclusive of payments of principal and interest due on or before the Cut-off
Date); (ii) any REO Property acquired on behalf of the Certificateholders
through foreclosure, deed in lieu of foreclosure or otherwise; (iii) such funds
or assets as from time to time are deposited in the Certificate Account; (iv)
the rights of the mortgagee under all insurance policies with respect to the
Mortgage Loans; and (v) certain rights of the Depositor under each of the
Mortgage Loan Purchase Agreements relating to Mortgage Loan document delivery
requirements and the representations and warranties of the related Mortgage
Loan Seller regarding its Mortgage Loans.
The Certificates will consist of eighteen Classes to be designated as: (i)
the Class X Certificates; (ii) the Class A-1 Certificates and the Class A-2
Certificates (together, the "Class A Certificates;" and collectively with the
Class X Certificates, the "Senior Certificates"); (iii) the Class B
Certificates, the Class C Certificates, the Class D Certificates, the Class E
Certificates, the Class F Certificates, the Class G Certificates, the Class H
Certificates, the Class J Certificates, the Class K Certificates, the Class L
Certificates, the Class M Certificates and the Class N Certificates
(collectively, the "Subordinate Certificates;" and collectively with the Senior
Certificates, the "REMIC Regular Certificates"); and (iv) the Class R-I
Certificates, the Class R-II Certificates and the Class R-III Certificates
(collectively, the "REMIC Residual Certificates").
Only the Offered Certificates are offered hereby. The Class G, Class H,
Class J, Class K, Class L, Class M, Class N and REMIC Residual Certificates
have not been registered under the Securities Act of 1933 and are not offered
hereby.
The Offered Certificates will be issued in book-entry format in
denominations of: (i) in the case of the Class X Certificates, $1,000,000
notional principal amount and in any whole dollar denomination in excess
thereof; and (ii) in the case of the other Classes of Offered Certificates,
$25,000 actual principal amount and in any whole dollar denomination in excess
thereof.
Each Class of Offered Certificates will initially be represented by one or
more global Certificates registered in the name of the nominee of DTC. The
Depositor has been informed by DTC that DTC's nominee initially will be Cede &
Co. No Certificate Owner will be entitled to receive a Definitive Certificate
representing its interest in a Class of Offered Certificates, except as set
forth below under "--Book-Entry Registration of the Offered Certificates --
Definitive Certificates." Unless and until Definitive Certificates are issued
in respect of any Class of Offered Certificates, all references to actions by
holders of the Offered Certificates will refer to actions taken by DTC upon
instructions received from the related Certificate Owners through its
Participants, and all references herein to payments, notices, reports and
statements to holders of the Offered Certificates will refer to payments
notices, reports and statements to DTC or Cede & Co., as the registered holder
of the Offered Certificates, for distribution to the related Certificate Owners
through its Participants in accordance with DTC procedures. Until Definitive
Certificates are issued in respect of any Class of Offered Certificates,
interests in such Certificates will be transferred on the book-entry records of
DTC and its Participants. The Certificate Owners may elect to hold their
Certificates through DTC, in the United States, or CEDEL or Euroclear, in
Europe, through participants in such systems, or indirectly through
organizations which are participants in such systems. See "Description of the
Certificates -- Book-Entry Registration and Definitive Certificates" in the
Prospectus.
BOOK-ENTRY REGISTRATION OF THE OFFERED CERTIFICATES
General. Certificate Owners that are not Direct or Indirect Participants
but desire to purchase, sell or otherwise transfer ownership of, or other
interests in, the Offered Certificates may do so only through Direct and
Indirect Participants. In addition, Certificate Owners will receive all
payments on their Offered
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Certificates from the Trustee through DTC and its Direct and Indirect
Participants. Accordingly, Certificate Owners may experience delays in their
receipt of payments. Unless and until Definitive Certificates are issued in
respect of any Class thereof, the only registered Certificateholder of the
Offered Certificates will be Cede & Co., as nominee of DTC. Certificate Owners
will not be recognized by the Trustee or the Servicer as Certificateholders;
and, except under the limited circumstances described herein, Certificate
Owners will be permitted to receive information furnished to Certificateholders
and to exercise the rights of Certificateholders only indirectly through DTC
and its Direct and Indirect Participants.
Under the rules, regulations and procedures regarding DTC and its
operations (the "Rules"), DTC is required to make book-entry transfers of the
Offered Certificates among Participants and to receive and transmit payments on
the Offered Certificates. Direct and Indirect Participants with which
Certificate Owners have accounts with respect to the Offered Certificates
similarly are required to make book-entry transfers and receive and transmit
such payments on behalf of their respective Certificate Owners. Accordingly,
although Certificate Owners will not possess physical certificates evidencing
their interests in the Offered Certificates, the Rules provide a mechanism by
which Certificate Owners, through their Direct and Indirect Participants, will
receive payments and will be able to transfer their interests in the Offered
Certificates.
None of the Depositor, the Servicer, the Trustee, the Fiscal Agent or the
Mortgage Loan Sellers will have any liability for any actions taken by DTC or
its nominee, including, without limitation, actions for any aspect of the
records relating to or payments made on account of beneficial ownership
interests in the Offered Certificates held by Cede & Co., as nominee for DTC,
or for maintaining, supervising or reviewing any records relating to such
beneficial ownership interest.
Euroclear and CEDEL. The Offered Certificates will be initially issued to
investors through the book-entry facilities of DTC, or CEDEL or Euroclear if
such investors are participants of such systems, or indirectly through
organizations which are participants in such systems. As to any such class of
Offered Certificates, the record holder of such Certificates will be DTC's
nominee. CEDEL and Euroclear will hold omnibus positions on behalf of their
participants through customers' securities accounts in CEDEL's and Euroclear's
names on the books of their respective depositories (the "Depositories"), which
in turn will hold such positions in customers' securities accounts in
Depositories' names on the books of DTC.
Because of time zone differences, the securities account of a CEDEL or
Euroclear Participant (each as defined below) as a result of a transaction with
a DTC Participant (other than a depositary holding on behalf of CEDEL or
Euroclear) will be credited during the securities settlement processing day
(which must be a business day for CEDEL or Euroclear, as the case may be)
immediately following the DTC settlement date. Such credits or any transactions
in such securities settled during such processing will be reported to the
relevant Euroclear Participant or CEDEL Participant on such business day. Cash
received in CEDEL or Euroclear as a result of sales of securities by or through
a CEDEL Participant or Euroclear Participant to a DTC Participant (other than
the depository for CEDEL or Euroclear) will be received with value on the DTC
settlement date, but will be available in the relevant CEDEL or Euroclear cash
account only as of the business day following settlement in DTC.
Transfers between Participants will occur in accordance with DTC rules.
Transfers between CEDEL Participants or Euroclear Participants will occur in
accordance with their respective rules and operating procedures.
Cross-market transfers between persons holding directly or indirectly
through DTC, on the one hand, and directly or indirectly through CEDEL
Participants or Euroclear Participants, on the other, will be effected in DTC
in accordance with DTC rules on behalf of the relevant European international
clearing system by the relevant Depositories; however, such cross-market
transactions will require delivery of instructions to the relevant European
international clearing system by the counterparty in such system in accordance
with its rules and procedures and within its established deadlines (European
time). The relevant European international clearing system will, if the
transaction meets its settlement requirements, deliver instructions to its
Depository to take action to effect final settlement on its behalf
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by delivering or receiving securities in DTC, and making or receiving payment
in accordance with normal procedures for same day funds settlement applicable
to DTC. CEDEL Participants or Euroclear Participants may not deliver
instructions directly to the Depositories.
CEDEL, as a professional depository, holds securities for its
participating organizations ("CEDEL Participants") and facilitates the
clearance and settlement of securities transactions between CEDEL Participants
through electronic book-entry changes in accounts of CEDEL Participants,
thereby eliminating the need for physical movement of certificates. As a
professional depository, CEDEL is subject to regulation by the Luxembourg
Monetary Institute.
Euroclear was created to hold securities for participants of Euroclear
("Euroclear Participants") and to clear and settle transactions between
Euroclear Participants through simultaneous electronic book-entry delivery
against payment, thereby eliminating the need for physical movement of
certificates and any risk from lack of simultaneous transfers of securities and
cash. Euroclear is operated by the Brussels, Belgium office of Morgan Guaranty
Trust Company of New York (the "Euroclear Operator"), under contract with
Euroclear Clearance Systems S.C., a Belgian co-operative corporation (the
"Clearance Cooperative"). All operations are conducted by the Euroclear
Operator, and all Euroclear securities clearance accounts and Euroclear cash
accounts are accounts with the Euroclear Operator, not the Clearance
Cooperative. The Clearance Cooperative establishes policies for Euroclear on
behalf of Euroclear's Participants. The Euroclear Operator is the Belgian
branch of a New York banking corporation which is a member bank of the Federal
Reserve System. As such, it is regulated and examined by the Board of Governors
of the Federal Reserve System and the New York State Banking Department, as
well as the Belgian Banking Commission. Securities clearance accounts and cash
accounts with the Euroclear Operator are governed by the Terms and Conditions
Governing Use of Euroclear and the related Operating Procedures of the
Euroclear System and applicable Belgian law (collectively, the "Terms and
Conditions"). The Terms and Conditions govern transfers of securities and cash
within Euroclear, withdrawals of securities and cash from Euroclear, and
receipts of payments with respect to securities in Euroclear. All securities in
Euroclear are held on a fungible basis without attribution of specific
certificates to specific securities clearance accounts.
Distributions in respect of the DTC Registered Certificates will be
forwarded by the Trustee to DTC, and DTC will be responsible for forwarding
such payments to Participants, each of which will be responsible for disbursing
such payments to the Certificate Owners it represents or, if applicable, to
Indirect Participants. Accordingly, Certificate Owners may experience delays in
the receipt of payments in respect of their Certificates. Under DTC's
procedures, DTC will take actions permitted to be taken by holders of any class
of DTC Registered Certificates under the Pooling and Servicing Agreement only
at the direction of one or more Participants to whose account the DTC
Registered Certificates are credited and whose aggregate holdings represent no
less than any minimum amount of Percentage Interests or voting rights required
therefor. DTC may take conflicting actions with respect to any action of
Certificateholders of any class to the extent that Participants authorize such
actions. None of the Depositor, the Trustee, the Fiscal Agent or any of their
respective affiliates will have any liability for any aspect of the records
relating to or payments made on account of beneficial ownership interests in
the DTC Registered Certificates or for maintaining, supervising or reviewing
any records relating to such beneficial ownership interests.
Certificate Owners will not be recognized by the Trustee as
Certificateholders, as such term is used in the Pooling and Servicing
Agreement; provided, however, that Certificate Owners will be permitted to
request and receive information furnished to Certificateholders by the Trustee
subject to receipt by the Trustee of a certification in form and substance
acceptable to the Trustee stating that the person requesting such information
is a Certificate Owner. Otherwise, the Certificate Owners will be permitted to
receive information furnished to Certificateholders and to exercise the rights
of Certificateholders only indirectly through DTC, its Participants and
Indirect Participants.
Although DTC, CEDEL and Euroclear have agreed to the foregoing procedures
in order to facilitate transfers of the Offered Certificates among Participants
of DTC, CEDEL and Euroclear, they are under no obligation to perform or
continue to perform such procedures and such procedures may be discontinued at
any time. See Annex D hereto.
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Definitive Certificates. Definitive Certificates will be issued to
Certificate Owners or their nominees, respectively, rather than to DTC or its
nominee, only under the limited conditions set forth in the Prospectus under
"Description of the Certificates -- Book-Entry Registration and Definitive
Certificates."
Upon the occurrence of an event described in the Prospectus in the last
paragraph under "Description of the Certificates -- Book-Entry Registration and
Definitive Certificates," the Trustee is required to notify, through DTC,
Direct Participants who have ownership of Offered Certificates as indicated on
the records of DTC, of the availability of Definitive Certificates with respect
thereto. Upon surrender by DTC of the physical certificates registered in the
name of its nominee and representing the Offered Certificates and upon receipt
of instructions from DTC for re-registration, the Trustee will reissue the
respective Classes of Offered Certificates as Definitive Certificates issued in
the respective principal or notional amounts owned by individual Certificate
Owners of each such Class, and thereafter the Trustee and the Servicer will
recognize the holders of such Definitive Certificates as Certificateholders.
For additional information regarding DTC and Certificates maintained on
the book-entry records thereof, see "Description of the Certificates --
Book-Entry Registration and Definitive Certificates" in the Prospectus.
CERTIFICATE BALANCES AND NOTIONAL AMOUNTS
Upon initial issuance, the Class A-1, Class A-2, Class B, Class C, Class
D, Class E, Class F, Class G, Class H, Class J, Class K, Class L, Class M and
Class N Certificates will have the following Certificate Balances (in each
case, subject to a variance of plus or minus 5%):
<TABLE>
<CAPTION>
INITIAL CERTIFICATE PERCENT OF INITIAL POOL PERCENT OF CREDIT
CLASS BALANCE BALANCE SUPPORT
- ------------------- --------------------- ------------------------- ------------------
<S> <C> <C> <C>
Class A-1 ......... $333,587,000 23.20% 29.00%
Class A-2 ......... 687,393,000 47.80 29.00
Class B ........... 28,760,000 2.00 27.00
Class C ........... 64,710,000 4.50 22.50
Class D ........... 75,495,000 5.25 17.25
Class E ........... 68,305,000 4.75 12.50
Class F ........... 43,140,000 3.00 9.50
Class G ........... 32,355,000 2.25 7.25
Class H ........... 25,165,000 1.75 5.50
Class J ........... 14,380,000 1.00 4.50
Class K ........... 25,165,000 1.75 2.75
Class L ........... 14,380,000 1.00 1.75
Class M ........... 10,785,000 0.75 1.00
Class N ........... 14,380,263 1.00 0.00
</TABLE>
On each Distribution Date, the Certificate Balance of each Class of
Principal Balance Certificates will be reduced by any distributions of
principal actually made on such Class of Certificates on such Distribution
Date, and will be further reduced by any Realized Losses and Additional Trust
Fund Expenses deemed allocated to such Class of Certificates on such
Distribution Date. See "--Distributions" and "--Subordination; Allocation of
Realized Losses and Certain Expenses" below.
The Class X Certificates will not have a Certificate Balance. The Class X
Certificates will represent the right to receive distributions of interest
accrued as described herein on a Notional Amount equal to the aggregate
Certificate Balance of the Principal Balance Certificates outstanding from time
to time. The Class X Certificates will have an initial Notional Amount of
$1,438,000,263 (subject to a variance of plus or minus 5%). The Class X
Certificates consist of fourteen components each corresponding to a different
Class of Principal Balance Certificates (the "Class X Components"). No Class of
REMIC Residual Certificates will have a Certificate Balance.
The "Stated Principal Balance" of each Mortgage Loan will generally equal
the Cut-off Date Balance thereof (or in the case of a Replacement Mortgage
Loan, the outstanding principal balance as of the
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related date of substitution), reduced (to not less than zero) on each
Distribution Date by (i) any payments or other collections (or advances in lieu
thereof) of principal of such Mortgage Loan that have been or, if they had not
been applied to cover Additional Trust Fund Expenses, would have been
distributed on the Certificates on such date, and (ii) the principal portion of
any Realized Loss incurred in respect of or allocable to such Mortgage Loan
during the related Collection Period.
PASS-THROUGH RATES
The rate per annum at which any Class of Certificates accrues interest
from time to time is herein referred to as its "Pass-Through Rate."
The Pass-Through Rates applicable to the Class A-1 and Class A-2
Certificates will be fixed and, at all times, will be equal to the respective
Pass-Through Rates specified for each such Class on the cover page hereof. The
Pass-Through Rate applicable to the Class B, Class C and Class D Certificates
for any Distribution Date will be equal to the lesser of a specified rate and
the Weighted Average Net Mortgage Rate with respect to such Distribution Date.
The Pass-Through Rates applicable to the Class E and Class F Certificates for
any Distribution Date will be equal to the Weighted Average Net Mortgage Rate
with respect to such Distribution Date. The Pass-Through Rate applicable to the
Class X Certificates for the initial Distribution Date will equal approximately
0.442% per annum. The Pass-Through Rate applicable to the Class X Certificates
for any Distribution Date will be variable and will be equal to the weighted
average (by Certificate Balance of the corresponding Class of Principal Balance
Certificates) of the Pass-Through Rate applicable to each Class X Component.
The Pass-Through Rate for each Class X Component will equal the excess, if any,
of the Weighted Average Net Mortgage Rate for such Distribution Date over the
Pass-Through Rate for such Distribution Date applicable to the related Class of
Principal Balance Certificates. The Pass-Through Rate for any Class X Component
relating to a Class of Principal Balance Certificates having a Pass-Through
Rate equal to the Weighted Average Net Mortgage Rate will be zero.
The Pass-Through Rates applicable to the Class G, Class H and Class J
Certificates for any Distribution Date will be equal to the Weighted Average
Net Mortgage Rate with respect to such Distribution Date. The Pass-Through
Rates applicable to the Class K, Class L, Class M and Class N Certificates for
any Distribution Date will be equal to the lesser of a specified rate and the
Weighted Average Net Mortgage Rate with respect to such Distribution Date. No
Class of REMIC Residual Certificates will have a specified Pass-Through Rate.
The "Weighted Average Net Mortgage Rate" for each Distribution Date is the
weighted average of the Net Mortgage Rates for the Mortgage Loans as of the
commencement of the related Collection Period, weighted on the basis of their
respective Stated Principal Balances outstanding immediately prior to such
Distribution Date.
The "Net Mortgage Rate" with respect to any Mortgage Loan is, in general,
a per annum rate equal to the related Mortgage Rate in effect from time to
time, minus the Servicing Fee Rate. However, for purposes of calculating
Pass-Through Rates, the Net Mortgage Rate for any Mortgage Loan shall be
determined without regard to any modification, waiver or amendment of the terms
of such Mortgage Loan, whether agreed to by the Servicer or resulting from a
bankruptcy, insolvency or similar proceeding involving the related borrower. In
addition, if any Mortgage Loan does not accrue interest on the basis of a
360-day year consisting of twelve 30-day months (which is the basis on which
interest accrues in respect of the REMIC Regular Certificates), then, for
purposes of calculating Pass-Through Rates, the Net Mortgage Rate of such
Mortgage Loan for any one-month period preceding a related Due Date will be the
annualized rate at which interest would have to accrue in respect of such loan
on the basis of a 360-day year consisting of twelve 30-day months in order to
produce the aggregate amount of interest actually accrued in respect of such
loan during such one-month period at the related Mortgage Rate (net of the
related Servicing Fee Rate); provided, however, that with respect to each
Interest Reserve Loan (as defined herein), (i) the Mortgage Rate for the
Collection Period preceding the Due Dates in (a) January and February in each
year that is not a leap year or (b) in February only in each year that is a
leap year will be determined net of the Withheld Amounts and (ii) the Mortgage
Rate for the Collection Period preceding the Due Dates in March will be
determined after taking into account the addition of the
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Withheld Amounts with respect to each such Mortgage Loan. See "Servicing of the
Mortgage Loans -- Servicing and Other Compensation and Payment of Expenses" and
"--Modifications, Waivers, Amendments and Consents" herein.
The "Collection Period" for each Distribution Date is the period that
begins immediately following the Determination Date in the calendar month
preceding the month in which such Distribution Date occurs (or, in the case of
the initial Distribution Date, immediately following the Cut-off Date) and ends
on the Determination Date in the calendar month in which such Distribution Date
occurs. The "Determination Date" will be the 5th day of each month or, if any
such 5th day is not a business day, the immediately preceding business day.
DISTRIBUTIONS
General. Distributions on or with respect to the Certificates will be made
by the Trustee, to the extent of available funds, on each Distribution Date,
commencing in June 1998. Except as otherwise described below, all such
distributions will be made to the persons in whose names the Certificates are
registered at the close of business on the related Record Date and, as to each
such person, will be made by wire transfer in immediately available funds to
the account specified by the Certificateholder at a bank or other entity having
appropriate facilities therefor, if such Certificateholder will have provided
the Trustee with wiring instructions no less than five business days prior to
the related Record Date, or otherwise by check mailed to such
Certificateholder. The final distribution on any Certificate (determined
without regard to any possible future reimbursement of any Realized Losses or
Additional Trust Fund Expense (each as defined herein) previously allocated to
such Certificate) will be made in like manner, but only upon presentation and
surrender of such Certificate at the location that will be specified in a
notice of the pendency of such final distribution. Any distribution that is to
be made with respect to a Certificate in reimbursement of a Realized Loss or
Additional Trust Fund Expense previously allocated thereto, which reimbursement
is to occur after the date on which such Certificate is surrendered as
contemplated by the preceding sentence (the likelihood of any such distribution
being remote), will be made by check mailed to the Certificateholder that
surrendered such Certificate. All distributions made on or with respect to a
Class of Certificates will be allocated pro rata among such Certificates based
on their respective Percentage Interests in such Class.
The Available Distribution Amount. With respect to any Distribution Date,
distributions of interest on and principal of the Certificates will be made
from the Available Distribution Amount for such Distribution Date. The
"Available Distribution Amount" for any Distribution Date will, in general,
equal (a) all amounts on deposit in the Certificate Account as of the close of
business on the related Determination Date, exclusive of any portion thereof
that represents one or more of the following:
(i) Monthly Payments collected but due on a Due Date subsequent to
the related Collection Period;
(ii) Prepayment Premiums (which are separately distributable on the
Certificates as hereinafter described);
(iii) amounts that are payable or reimbursable to any person other
than the Certificateholders (including amounts payable to the
Servicer, any Replacement Special Servicer or the Trustee as
compensation or in reimbursement of outstanding Advances and
amounts payable in respect of Additional Trust Fund Expenses);
(iv) amounts deposited in the Certificate Account in error; and
(v) with respect to any Distribution Date occurring in each
February, and in any January occurring in a year that is not a
leap year, the Withheld Amounts with respect to the Interest
Reserve Loans to be deposited in the Interest Reserve Account and
held for future distribution;
(b) to the extent not already included in clause (a), any P&I Advances
made with respect to such Distribution Date and payments made by the Servicer
to cover Prepayment Interest Shortfalls and Balloon Payment Interest Shortfalls
incurred during the related Collection Period; plus
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(c) for the Distribution Date occurring in each March, the Withheld
Amounts as described under "-- Interest Reserve Account" below.
See "The Pooling and Servicing Agreements -- Certificate Account" in the
Prospectus.
Application of the Available Distribution Amount. On each Distribution
Date, the Trustee will apply the Available Distribution Amount for such date
for the following purposes and in the following order of priority:
(1) to pay interest to the holders of the respective Classes of Senior
Certificates, up to an amount equal to, and pro rata as among such Classes in
accordance with, all Distributable Certificate Interest in respect of each such
Class of Certificates for such Distribution Date and, to the extent not
previously paid, for each prior Distribution Date, if any;
(2) to pay principal: first to the holders of the Class A-1 Certificates,
and then to the holders of the Class A-2 Certificates, in each case, up to an
amount equal to the lesser of (i) the then outstanding Certificate Balance of
such Class of Certificates and (ii) the Principal Distribution Amount for such
Distribution Date;
(3) to reimburse the holders of the respective Classes of Class A
Certificates, up to an amount equal to, and pro rata as among such Classes in
accordance with, the respective amounts of Realized Losses and Additional Trust
Fund Expenses, if any, previously deemed allocated to such Classes of
Certificates and for which no reimbursement has previously been paid; and
(4) to make payments on the Subordinate Certificates as set forth below;
provided that, on each Distribution Date after the aggregate Certificate
Balance of the Subordinate Certificates has been reduced to zero, and in any
event on the final Distribution Date in connection with a termination of the
Trust Fund (see "--Termination; Retirement of Certificates" below), the
payments of principal to be made as contemplated by clause (2) above with
respect to the Class A Certificates, will be so made to the holders of the
respective Classes of such Certificates, up to an amount equal to, and pro rata
as among such Classes in accordance with, the respective then outstanding
Certificate Balances of such Classes of Certificates.
On each Distribution Date, following the above-described distributions on
the Senior Certificates, the Trustee will apply the remaining portion, if any,
of the Available Distribution Amount for such date to make payments on the
respective Classes of Subordinate Certificates in alphabetical order of Class
designation. On each Distribution Date, the holders of each Class of
Subordinate Certificates will, to the extent of the Available Distribution
Amount remaining after all required distributions to be made therefrom (as
described under this "--Distributions -- Application of the Available
Distribution Amount" section) on the Senior Certificates and each other Class
of Subordinate Certificates, if any, with an earlier alphabetical Class
designation, be entitled: first, to distributions of interest, up to an amount
equal to all Distributable Certificate Interest in respect of such Class of
Certificates for such Distribution Date and, to the extent not previously paid,
for each prior Distribution Date, if any; second, if the Certificate Balances
of the Class A Certificates and each other Class of Subordinate Certificates,
if any, with an earlier alphabetical Class designation have been reduced to
zero, to distributions of principal, up to an amount equal to the lesser of (a)
the then outstanding Certificate Balance of such Class of Certificates and (b)
the aggregate of the remaining Principal Distribution Amounts for such
Distribution Date (or, on the final Distribution Date in connection with the
termination of the Trust Fund, up to an amount equal to the then outstanding
Certificate Balance of such Class of Certificates); and, third, to
distributions for purposes of reimbursement, up to an amount equal to all
Realized Losses and Additional Trust Fund Expenses, if any, previously deemed
allocated to such Class of Certificates and for which no reimbursement has
previously been paid.
On each Distribution, following the above-described distributions on the
REMIC Regular Certificates, the Trustee will pay the remaining portion, if any,
of the Available Distribution Amounts for such date to the holders of the REMIC
Residual Certificates.
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Distributable Certificate Interest. The "Distributable Certificate
Interest" in respect of each Class of REMIC Regular Certificates for each
Distribution Date is equal to the Accrued Certificate Interest in respect of
such Class of Certificates for such Distribution Date, reduced by such Class of
Certificates' allocable share (calculated as described below) of any Net
Aggregate Prepayment Interest Shortfall for such Distribution Date.
The "Accrued Certificate Interest" in respect of each Class of REMIC
Regular Certificates for each Distribution Date is equal to one month's
interest at the Pass-Through Rate applicable to such Class of Certificates for
such Distribution Date accrued on the Certificate Balance or Notional Amount,
as the case may be, of such Class of Certificates outstanding immediately prior
to such Distribution Date. Accrued Certificate Interest will be calculated on
the basis of a 360-day year consisting of twelve 30-day months.
To the extent of that portion of its aggregate Servicing Fees for the
related Collection Period calculated at the Master Servicing Fee Rate for each
Mortgage Loan, the Servicer is required to make a non-reimbursable payment with
respect to each Distribution Date to cover the aggregate of any Prepayment
Interest Shortfalls incurred with respect to the Mortgage Asset Pool during
each Collection Period. The "Net Aggregate Prepayment Interest Shortfall" for
any Distribution Date will be the amount, if any, by which (a) the aggregate of
all Prepayment Interest Shortfalls incurred with respect to the Mortgage Asset
Pool during the related Collection Period, exceeds (b) any such payment made by
the Servicer with respect to such Distribution Date to cover such Prepayment
Interest Shortfalls. See "Servicing of the Mortgage Loans -- Servicing and
Other Compensation and Payment of Expenses" herein. The Net Aggregate
Prepayment Interest Shortfall, if any, for each Distribution Date will be
allocated on such Distribution Date: first, to the respective Classes of
Subordinate Certificates sequentially in reverse alphabetical order of Class
designation, in each case up to the amount of the Accrued Certificate Interest
in respect of such Class of Certificates for such Distribution Date; and
thereafter, among the respective Classes of Senior Certificates, pro rata, in
accordance with the respective amounts of Accrued Certificate Interest for each
such Class of Senior Certificates for such Distribution Date.
Principal Distribution Amount. The "Principal Distribution Amount" with
respect to any Distribution Date will, in general, equal the aggregate of the
following:
(a) the principal portions of all Monthly Payments (other than Balloon
Payments) and any Assumed Monthly Payments due or deemed due, as the case may
be, in respect of the Mortgage Loans for their respective Due Dates occurring
during the related Collection Period;
(b) all voluntary principal prepayments received on the Mortgage Loans
during the related Collection Period;
(c) with respect to any Balloon Loan as to which the related stated
maturity date occurred during or prior to the related Collection Period, any
payment of principal (exclusive of any voluntary principal prepayment and any
amount described in clause (d) below) made by or on behalf of the related
borrower during the related Collection Period, net of any portion of such
payment that represents a recovery of the principal portion of any Monthly
Payment (other than a Balloon Payment) due, or the principal portion of any
Assumed Monthly Payment deemed due, in respect of such Mortgage Loan on a Due
Date during or prior to the related Collection Period and not previously
recovered;
(d) the portion of all Liquidation Proceeds, Condemnation Proceeds and
Insurance Proceeds received on the Mortgage Loans during the related Collection
Period that were identified and applied by the Servicer as recoveries of
principal thereof, in each case net of any portion of such amounts that
represents a recovery of the principal portion of any Monthly Payment (other
than a Balloon Payment) due, or the principal portion of any Assumed Monthly
Payment deemed due, in respect of the related Mortgage Loan on a Due Date
during or prior to the related Collection Period and not previously recovered;
and
(e) if such Distribution Date is after the initial Distribution Date, the
excess, if any, of (i) the Principal Distribution Amount for the immediately
preceding Distribution Date, over (ii) the aggregate distributions of principal
made on the Principal Balance Certificates in respect of such Principal
Distribution Amount on such immediately preceding Distribution Date.
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An "Assumed Monthly Payment" is an amount deemed due in respect of: (i)
any Balloon Loan that is delinquent in respect of its Balloon Payment beyond
the first Determination Date that follows its stated maturity date and as to
which no arrangements have been agreed to for collection of the delinquent
amounts; or (ii) any Mortgage Loan as to which the related Mortgaged Property
or Properties have become REO Property or Properties. The Assumed Monthly
Payment deemed due on any such Balloon Loan on its stated maturity date and on
any successive Due Date that it remains or is deemed to remain outstanding
shall equal the Monthly Payment that would have been due thereon on such date
if the related Balloon Payment had not come due, but rather such Mortgage Loan
had continued to amortize in accordance with such loan's amortization schedule,
if any, in effect immediately prior to maturity and had continued to accrue
interest in accordance with such loan's terms in effect immediately prior to
maturity. The Assumed Monthly Payment deemed due on any such Mortgage Loan as
to which the related Mortgaged Property or Properties have become REO Property
or Properties, on each Due Date for so long as such REO Property or Properties
remain part of the Trust Fund, shall equal the Monthly Payment (or, in the case
of a Balloon Loan described in the prior sentence, the Assumed Monthly Payment)
due on the last Due Date prior to the acquisition of such REO Property or
Properties.
Distributions of Prepayment Premiums. Any Prepayment Premium (whether
described in the related Mortgage Loan documents as a fixed percentage
prepayment premium or a yield maintenance prepayment premium) actually
collected with respect to a Mortgage Loan during any particular Collection
Period will be distributed on the related Distribution Date to the holders of
each Class of Offered Certificates other than the Class X Certificates (not in
reduction of the Certificate Balances thereof) in an aggregate amount up to the
product of (a) such Prepayment Premium, (b) the Discount Rate Fraction and (c)
the Principal Allocation Fraction of each such Class. The "Discount Rate
Fraction" is equal to a fraction (not greater than 1.0 or less than 0.0) the
numerator of which is equal to the excess of (x) the Pass-Through Rate for such
Class of Certificates over (y) the relevant Discount Rate (as defined below)
and the denominator of which is equal to the excess of (x) the Mortgage Rate of
the related Mortgage Loan over (y) the relevant Discount Rate. With respect to
any Distribution Date and each Class of Offered Certificates (other than the
Class X Certificates), the "Principal Allocation Fraction" is a fraction the
numerator of which is the Principal Distribution Amount allocated to such Class
of Certificates for such Distribution Date and the denominator of which is the
Principal Distribution Amount for all Classes of Certificates as of such
Distribution Date. The portion of the Prepayment Premium remaining after the
payment of the amount calculated as described above will be distributed to the
holders of the Class X Certificates.
The "Discount Rate" means the yield (compounded monthly) for "This Week"
as reported by the Federal Reserve Board in Federal Reserve Statistical Release
H.15(519) for the constant maturity treasury having a maturity coterminous with
the Maturity Date or Anticipated Repayment Date of such Mortgage Loan as of the
Determination Date. If there is no Discount Rate for instruments having a
maturity coterminous with the remaining term (to maturity or Anticipated
Repayment Date, where applicable) of the relevant Mortgage Loan, then the
Discount Rate will be equal to the linear interpolation of the yields of the
constant maturity treasuries with maturities next longer and shorter than such
remaining term to maturity or Anticipated Repayment Date.
The Prepayment Premiums, if any, collected on the Mortgage Loans during
any Collection Period may not be sufficient to fully compensate
Certificateholders of any Class for any loss in yield attributable to the
related prepayments of principal.
Treatment of REO Properties. Notwithstanding that any Mortgaged Property
may be acquired as part of the Trust Fund through foreclosure, deed in lieu of
foreclosure or otherwise, the related Mortgage Loan will be treated, for
purposes of, among other things, determining distributions on the Certificates,
allocations of Realized Losses and Additional Trust Fund Expenses to the
Certificates, and the amount of Servicing Fees and Special Servicing Fees
payable under the Pooling and Servicing Agreement, as having remained
outstanding until such REO Property is liquidated. Among other things, such
Mortgage Loan will be taken into account when determining Pass-Through Rates
and the Principal Distribution Amount. In connection therewith, operating
revenues and other proceeds derived from such REO Property (after application
thereof to pay certain costs and taxes, including certain reimbursements
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payable to the Servicer, any Replacement Special Servicer and/or the Trustee,
incurred in connection with the operation and disposition of such REO Property)
will be "applied" by the Servicer as principal, interest and other amounts
"due" on such Mortgage Loan, and, subject to the applicable limitations
described under "--P&I Advances" below, the Servicer will be required to make
P&I Advances in respect of such Mortgage Loan, in all cases as if such Mortgage
Loan had remained outstanding.
Interest Reserve Account. The Trustee will establish and maintain an
"Interest Reserve Account" in the name of the Trustee for the benefit of the
holders of the Certificates. With respect to each Distribution Date occurring
in February and each Distribution Date occurring in any January which occurs in
a year that is not a leap year, there shall be deposited, in respect of each
Mortgage Loan bearing interest computed on an actual/360 basis and having a
Mortgage Rate (less the Servicing Fee) less than 7.62% per annum (the "Interest
Reserve Loans"), an amount equal to one day's interest at the related Mortgage
Rate (less the Servicing Fee) on the respective Stated Principal Balance, as of
the Due Date in the month preceding the month in which such Distribution Date
occurs, to the extent a Monthly Payment or P&I Advance is made in respect
thereof (all amounts so deposited in any consecutive January (if applicable)
and February, "Withheld Amounts"). With respect to each Distribution Date
occurring in March, an amount is required to be withdrawn equal to the Withheld
Amounts from the preceding January (if applicable) and February, if any, and
deposited into the Certificate Account.
SUBORDINATION; ALLOCATION OF LOSSES AND CERTAIN EXPENSES
As and to the extent described herein, the rights of holders of
Subordinate Certificates to receive distributions of amounts collected or
advanced on the Mortgage Loans will, in the case of each Class thereof, be
subordinated to the rights of holders of the Senior Certificates and, further,
to the rights of holders of each other Class of Subordinate Certificates, if
any, with an earlier alphabetical Class designation. This subordination is
intended to enhance the likelihood of timely receipt by holders of the
respective Classes of Senior Certificates of the full amount of Distributable
Certificate Interest payable in respect of their Certificates on each
Distribution Date, and the ultimate receipt by holders of the respective
Classes of Class A Certificates of principal equal to, in each such case, the
entire Certificate Balance of such Class of Certificates. Similarly, but to
decreasing degrees, this subordination is also intended to enhance the
likelihood of timely receipt by holders of the other Classes of Offered
Certificates of the full amount of Distributable Certificate Interest payable
in respect of their Certificates on each Distribution Date, and the ultimate
receipt by holders of such other Classes of Offered Certificates of principal
equal to, in each such case, the entire Certificate Balance of such Class of
Certificates. The subordination of any Class of Subordinate Certificates will
be accomplished by, among other things, the application of the Available
Distribution Amount on each Distribution Date in the order of priority
described under "--Distributions -- Application of the Available Distribution
Amount" above. No other form of Credit Support will be available for the
benefit of holders of the Offered Certificates.
If, following the distributions to be made in respect of the Certificates
on any Distribution Date, the aggregate Stated Principal Balance of the
Mortgage Asset Pool that will be outstanding immediately following such
Distribution Date is less than the then aggregate Certificate Balance of the
Principal Balance Certificates, the respective Certificate Balances of the
Class N, Class M, Class L, Class K, Class J, Class H, Class G, Class F, Class
E, Class D, Class C and Class B Certificates will be reduced, sequentially in
that order, in the case of each such Class until such deficit (or the related
Certificate Balance) is reduced to zero (whichever occurs first). If any
portion of such deficit remains at such time as the Certificate Balances of
such Classes of Certificates are reduced to zero, then the respective
Certificate Balances of the Class A-1 and Class A-2 Certificates will be
reduced, pro rata in accordance with the relative sizes of the remaining
Certificate Balances of such Classes of Certificates, until such deficit (or
each such Certificate Balance) is reduced to zero. Any such deficit may be the
result of Realized Losses incurred in respect of the Mortgage Loans and/or
Additional Trust Fund Expenses. The foregoing reductions in the Certificate
Balances of the Principal Balance Certificates will be deemed to constitute an
allocation of any such Realized Losses and Additional Trust Fund Expenses. Any
such reduction will also have the effect of reducing the Notional Amount of the
Class X Certificates.
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"Realized Losses" are losses on or in respect of the Mortgage Loans
arising from the inability of the Servicer to collect all amounts due and owing
under any such Mortgage Loan, including by reason of the fraud or bankruptcy of
a borrower or a casualty of any nature at a Mortgaged Property, to the extent
not covered by insurance. The Realized Loss in respect of a liquidated Mortgage
Loan (or related REO Property or Properties) is an amount generally equal to
the excess, if any, of (a) the outstanding principal balance of such Mortgage
Loan as of the date of liquidation, together with (i) all accrued and unpaid
interest thereon at the related Mortgage Rate to but not including the Due Date
in the Collection Period in which the liquidation occurred and (ii) all related
unreimbursed Servicing Advances and outstanding liquidation expenses, over (b)
the aggregate amount of Liquidation Proceeds, if any, recovered in connection
with such liquidation. If any portion of the debt due under a Mortgage Loan is
forgiven, whether in connection with a modification, waiver or amendment
granted or agreed to by the Servicer or in connection with the bankruptcy or
similar proceeding involving the related borrower, the amount so forgiven also
will be treated as a Realized Loss.
"Additional Trust Fund Expenses" include, among other things, (i) Special
Servicing Fees, Workout Fees and Liquidation Fees, (ii) interest in respect of
unreimbursed Advances, (iii) the cost of various opinions of counsel required
or permitted to be obtained in connection with the servicing of the Mortgage
Loans and the administration of the Trust Fund, (iv) certain unanticipated,
non-Mortgage Loan specific expenses of the Trust Fund, including certain
indemnities and reimbursements to the Trustee as described under "The Pooling
and Servicing Agreements -- Certain Matters Regarding the Trustee" in the
Prospectus, certain indemnities and reimbursements to the Servicer and the
Depositor (and certain indemnities and reimbursements to a Replacement Special
Servicer comparable to those for the Servicer) as described under "The Pooling
and Servicing Agreements --Certain Matters Regarding the Master Servicer and
the Depositor" in the Prospectus and certain federal, state and local taxes,
and certain tax-related expenses, payable out of the Trust Fund as described
under "Servicing of the Mortgage Loans -- REO Properties" herein and "Certain
Federal Income Tax Consequences -- REMICs -- Taxation of Owners of REMIC
Residual Certificates -- Prohibited Transactions Tax and Other Taxes" in the
Prospectus, (v) any amounts expended on behalf of the Trust Fund to remediate
an adverse environmental condition at any Mortgaged Property securing a
defaulted Mortgage Loan (see "The Pooling and Servicing Agreements --
Realization Upon Defaulted Mortgage Loans" in the Prospectus), and (vi) any
other expense of the Trust Fund not specifically included in the calculation of
"Realized Loss" for which there is no corresponding collection from a borrower.
Additional Trust Fund Expenses will reduce amounts payable to
Certificateholders and, consequently, may result in a loss on the Offered
Certificates.
P&I ADVANCES
With respect to each Distribution Date, unless the Servicer, in its
reasonable judgment, believes that the funds therefor would not be recoverable
from Related Proceeds and subject to the recoverability standard described in
the Prospectus, the Servicer, will be obligated to make P&I Advances out of its
own funds or, subject to the replacement thereof as provided in the Pooling and
Servicing Agreement, funds held in the Certificate Account that are not
required to be part of the Available Distribution Amount for such Distribution
Date, in an amount generally equal to the aggregate of all Monthly Payments
(other than Balloon Payments) and any Assumed Monthly Payments (in each case
net of any related Workout Fee) that were due or deemed due, as the case may
be, in respect of the Mortgage Loans during the related Collection Period and
that were not paid by or on behalf of the related borrowers or otherwise
collected as of the close of business on the last day of the related Collection
Period or other specified date prior to such Distribution Date. The Servicer's
obligations to make P&I Advances in respect of any Mortgage Loan will continue
through liquidation of such Mortgage Loan or disposition of any REO Property
acquired in respect thereof. Notwithstanding the foregoing, if it is determined
that an Appraisal Reduction Amount exists with respect to any Required
Appraisal Mortgage Loan (each as defined below), then, with respect to the
Distribution Date immediately following the date of such determination and with
respect to each subsequent Distribution Date for so long as such Appraisal
Reduction Amount exists, in the event of subsequent delinquencies thereon, the
interest portion of the P&I Advance in respect of such Mortgage Loan will be
reduced (no reduction to be made in the principal portion,
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however) to equal to the product of (i) the amount of the interest portion of
such P&I Advance that would otherwise be required to be made for such
Distribution Date without regard to this sentence, multiplied by (ii) a
fraction (expressed as a percentage), the numerator of which is equal to the
Stated Principal Balance of such Mortgage Loan, net of such Appraisal Reduction
Amount, and the denominator of which is equal to the Stated Principal Balance
of such Mortgage Loan. See "--Appraisal Reductions" below. If the Servicer
fails to make a required P&I Advance, the Trustee will be required to make such
P&I Advance. If the Trustee fails to make a required P&I Advance, the Fiscal
Agent will be required to make such P&I Advance. See "The Trustee and the
Fiscal Agent" below.
The Servicer, Trustee and the Fiscal Agent will each be entitled to
recover any P&I Advance made by it from Related Proceeds collected in respect
of the Mortgage Loan as to which such P&I Advance was made. Notwithstanding the
foregoing, neither the Servicer, the Trustee nor the Fiscal Agent will be
obligated to make a P&I Advance that would, if made, constitute a
Nonrecoverable Advance. The Servicer, the Trustee and the Fiscal Agent will
each be entitled to recover any P&I Advance previously made by it that is, at
any time, determined to be a Nonrecoverable Advance, out of funds received on
or in respect of other Mortgage Loans. See "Description of the Certificates --
Advances in Respect of Delinquencies" and "The Pooling and Servicing Agreements
- -- Certificate Account" in the Prospectus.
The Servicer, the Trustee and the Fiscal Agent will each be entitled with
respect to any Advance made thereby, and any Replacement Special Servicer will
be entitled with respect to any Servicing Advance made thereby, to interest
accrued on the amount of such Advance for so long as it is outstanding at a
rate per annum (the "Reimbursement Rate") equal to the "prime rate" as
published in the "Money Rates" section of The Wall Street Journal, as such
"prime rate" may change from time to time. Such interest on any Advance will be
payable to the Servicer, any Replacement Special Servicer, the Trustee, or the
Fiscal Agent, as the case may be, out of default interest collected in respect
of the related Mortgage Loan or, in connection with the reimbursement of such
Advance, out of any amounts then on deposit in the Certificate Account. To the
extent not offset by default interest actually collected in respect of any
defaulted Mortgage Loan, interest accrued on outstanding Advances made in
respect thereof will result in a reduction in amounts payable on the
Certificates.
APPRAISAL REDUCTIONS
Upon the earliest of (i) the date on which any Mortgage Loan becomes a
Modified Mortgage Loan (as defined below), (ii) the 90th day following the
occurrence of any uncured delinquency in Monthly Payments with respect to any
Mortgage Loan, (iii) the date on which a receiver is appointed and continues in
such capacity in respect of a Mortgaged Property securing any Mortgage Loan and
(iv) the date on which a Mortgaged Property securing any Mortgage Loan becomes
an REO Property (each such Mortgage Loan, a "Required Appraisal Loan"), the
Servicer will be required, within 30 days (or such longer period as the
Servicer is diligently and in good faith proceeding to obtain such appraisal),
to obtain an appraisal of the related Mortgaged Property from an independent
MAI-designated appraiser, unless such an appraisal had previously been obtained
within the prior twelve months. The cost of such appraisal will be advanced by
the Servicer, subject to its right to be reimbursed therefor as a Servicing
Advance. As a result of any such appraisal, it may be determined that an
Appraisal Reduction Amount exists with respect to the related Required
Appraisal Loan. The "Appraisal Reduction Amount" for any Required Appraisal
Loan will be an amount, calculated as of the Determination Date immediately
succeeding the date on which the appraisal is obtained, equal to the excess, if
any, of (a) the sum of (i) the Stated Principal Balance of such Required
Appraisal Loan, (ii) to the extent not previously advanced by or on behalf of
the Servicer, the Trustee or the Fiscal Agent, all unpaid interest on the
Required Appraisal Loan through the most recent Due Date prior to such
Determination Date at a per annum rate equal to the related Mortgage Rate,
(iii) all related unreimbursed Advances made with respect to such Required
Appraisal Loan plus interest accrued on such Advances at the Reimbursement Rate
and (iv) all currently due and unpaid real estate taxes and assessments,
insurance premiums, and, if applicable, ground rents in respect of the related
Mortgaged Property, net of any escrow reserves held by the Servicer to cover
any such item, over (b) 90% of an amount equal to (i) the appraised value of
the related
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Mortgaged Property or REO Property as determined by such appraisal, net of (ii)
the amount of any liens on such property that are prior to the lien of the
Required Appraisal Loan, are not in respect of items included in clause (a)(iv)
above and were not taken into account in the calculation of such appraised
value.
With respect to each Required Appraisal Loan (unless such Mortgage Loan
has become a Corrected Mortgage Loan and has remained current for twelve
consecutive Monthly Payments, and no other Special Servicing Event has occurred
with respect thereto during the preceding twelve months), the Servicer is
required, within 30 days of each anniversary of such loan's becoming a Required
Appraisal Loan, to order an update of the prior appraisal (the cost of which
will be covered by and reimbursable as a Servicing Advance). Based upon such
appraisal, the Servicer is to redetermine and report to the Trustee the
Appraisal Reduction Amount, if any, with respect to such Mortgage Loan.
A "Modified Mortgage Loan" is any Mortgage Loan as to which any Special
Servicing Event has occurred and which has been modified by the Servicer in a
manner that: (a) affects the amount or timing of any payment of principal or
interest due thereon (other than, or in addition to, bringing current Monthly
Payments with respect to such Mortgage Loan); (b) except as expressly
contemplated by the related Mortgage, results in a release of the lien of the
Mortgage on any material portion of the related Mortgaged Property without a
corresponding principal prepayment in an amount not less than the fair market
value (as is) of the property to be released; or (c) in the reasonable good
faith judgment of the Servicer, otherwise materially impairs the security for
such Mortgage Loan or reduces the likelihood of timely payment of amounts due
thereon.
REPORTS TO CERTIFICATEHOLDERS; CERTAIN AVAILABLE INFORMATION
Trustee Reports. On each Distribution Date, the Trustee will be required
to forward by mail to each holder of an Offered Certificate as of the related
Record Date a Distribution Date Statement providing various items of
information relating to distributions made on such date with respect to the
relevant Class and the recent status of the Mortgage Asset Pool. For a
discussion of the particular items of information to be provided in each
Distribution Date Statement, as well as a discussion of certain annual
information reports to be furnished by the Trustee to persons who at any time
during the prior calendar year were holders of the Offered Certificates, see
"Description of the Certificates -- Reports to Certificateholders" in the
Prospectus.
In addition, based on information provided in monthly reports prepared by
the Servicer and delivered to the Trustee, the Trustee will prepare and/or
forward on each Distribution Date to each Offered Certificateholder, the
following statements and reports (collectively with the Distribution Date
Statements, the "Trustee Reports"), substantially in the forms set forth in
Annex B (although such forms may be subject to change over time) and
containing, among other things, substantially the information set forth below:
(1) A report containing information regarding the Mortgage Loans as of the
close of business on the immediately preceding Determination Date, which report
shall contain certain of the categories of information regarding the Mortgage
Loans set forth in this Prospectus Supplement in the tables under the caption
"Annex A: Certain Characteristics of the Mortgage Loans" (calculated, where
applicable, on the basis of the most recent relevant information provided by
the borrowers to the Servicer and by the Servicer to the Trustee) and such
information shall be presented in a loan-by-loan and tabular format
substantially similar to the formats utilized in this Prospectus Supplement on
Annex A.
(2) A "Delinquent Loan Status Report" setting forth, among other things,
those Mortgage Loans which, as of the close of business on the immediately
preceding Determination Date, were delinquent 30-59 days, delinquent 60-89
days, delinquent 90 days or more, current but specially serviced, or in
foreclosure but not REO Property or which has become REO Property.
(3) An "Historical Loan Modification Report" setting forth, among other
things, those Mortgage Loans which, as of the close of business on the
immediately preceding Determination Date, have been modified pursuant to the
Pooling and Servicing Agreement (i) during the Collection Period ending on such
Determination Date and (ii) since the Cut-off Date, showing the original and
the revised terms thereof.
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(4) An "Historical Loss Estimate Report" setting forth, among other
things, as of the close of business on the immediately preceding Determination
Date, (i) the aggregate amount of liquidation proceeds and liquidation
expenses, both for the Collection Period ending on such Determination Date and
for all prior Collection Periods, and (ii) the amount of Realized Losses
occurring both during such Collection Period and historically, set forth on a
Mortgage Loan-by-Mortgage Loan basis.
(5) An "REO Status Report" setting forth, among other things, with respect
to each REO Property that was included in the Trust Fund as of the close of
business on the immediately preceding Determination Date, (i) the acquisition
date of such REO Property, (ii) the amount of income collected with respect to
any REO Property (net of related expenses) and other amounts, if any, received
on such REO Property during the Collection Period ending on such Determination
Date and (iii) the value of the REO Property based on the most recent appraisal
or other valuation thereof available to the Servicer as of such date of
determination (including any prepared internally by the Servicer).
(6) A "Servicer Watch List" setting forth, among other things, certain
Mortgage Loans which have experienced a material decrease in debt service
coverage, a loss of or bankruptcy of the largest tenant (to the extent the
Servicer has actual knowledge of such loss or bankruptcy) or are approaching
maturity.
None of the above reports will include any information that the Servicer
deems to be confidential. Neither the Servicer nor the Trustee shall be
responsible for the accuracy or completeness of any information supplied to it
by a borrower or other third party that is included in any reports, statements,
materials or information prepared or provided by the Servicer or the Trustee,
as applicable. Certain information will be made available to Certificateholders
by electronic transmission as may be agreed upon between the Depositor and the
Trustee.
Prior to each Distribution Date, the Servicer will deliver to the Trustee
(by electronic means) a "Comparative Financial Status Report" containing
substantially the content set forth in Annex B setting forth, among other
things, the occupancy, revenue, net operating income and debt service coverage
ratio for each Mortgage Loan or related Mortgaged Property as of the
Determination Date immediately preceding the preparation of such report for
each of the following three periods (but only to the extent the related
borrower is required by the Mortgage to deliver and does deliver, or otherwise
agrees to provide and does provide, such information): (i) the most current
available year-to-date; (ii) each of the previous two full fiscal years stated
separately; and (iii) the "base year" (representing the original analysis of
information used as of the Cut-Off Date).
In addition, the Servicer is also required to perform with respect to each
Mortgaged Property and REO Property:
(a) Within 30 days after receipt of a quarterly operating statement, if
any, commencing with the calendar quarter ended June 30, 1998, an "Operating
Statement Analysis" containing revenue, expense, and net operating income
information substantially in accordance with Annex B (but only to the extent
the related borrower is required by the Mortgage to deliver and does deliver,
or otherwise agrees to provide and does provide, such information) for such
Mortgaged Property or REO Property as of the end of such calendar quarter. The
Servicer will deliver to the Trustee by electronic means the Operating
Statement Analysis upon request, and
(b) Within 30 days after receipt by the Servicer of an annual operating
statement, an NOI adjustment analysis containing substantially the content set
forth in Annex B, the "NOI Adjustment Worksheet," (but only to the extent the
related borrower is required by the Mortgage to deliver and does deliver, or
otherwise agrees to provide and does provide, such information) presenting the
computation made in accordance with the methodology described in the Pooling
and Servicing Agreement to "normalize" the full year net operating income and
debt service coverage numbers used by the Servicer in its reporting obligation
in (1) above. The Servicer will deliver to the Trustee by electronic means the
"NOI Adjustment Worksheet" upon request.
Certificate Owners who have certified to the Trustee as to their
beneficial ownership of any Offered Certificate may also obtain copies of any
of the Trustee Reports described above upon request. Otherwise, until such time
as Definitive Certificates are issued in respect of the Offered Certificates,
the foregoing information will be available to the related Certificate Owners
only to the extent that it is forwarded by or otherwise available through DTC
and its Participants. Conveyance of notices and other
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communications by DTC to Participants, and by Participants to Certificate
Owners, will be governed by arrangements among them, subject to any statutory
or regulatory requirements as may be in effect from time to time. The Servicer,
the Trustee, the Depositor and the Certificate Registrar are required to
recognize as Certificateholders only those persons in whose names the
Certificates are registered on the books and records of the Certificate
Registrar.
Other Information. The Trustee will make available at its offices
primarily responsible for administration of the Trust Fund, during normal
business hours, for review by any holder or Certificate Owner of an Offered
Certificate, originals or copies of, among other things, the following items:
(a) the Pooling and Servicing Agreement and any amendments thereto, (b) all
Trustee Reports delivered to holders of the relevant Class of Offered
Certificates since the Delivery Date, (c) all officer's certificates and
accountants' reports delivered to the Trustee since the Delivery Date as
described under "The Pooling and Servicing Agreements -- Evidence as to
Compliance" in the Prospectus, (d) the most recent property inspection report
prepared by or on behalf of the Servicer and delivered to the Trustee in
respect of each Mortgaged Property, (e) the most recent annual operating
statements, if any, collected by or on behalf of the Servicer and delivered to
the Trustee in respect of each Mortgaged Property, and (f) the Mortgage Note,
Mortgage and other legal documents relating to each Mortgage Loan, including
any and all modifications, waivers and amendments of the terms of a Mortgage
Loan entered into by the Servicer and delivered to the Trustee. Copies of any
and all of the foregoing items will be available from the Trustee upon
reasonable written request; provided that the Trustee will be permitted to
require payment of a sum sufficient to cover the reasonable costs and expenses
of providing such copies; and provided, further, that the Trustee may require
(x) in the case of a Certificate Owner, a written confirmation executed by the
requesting person or entity, in a form reasonably acceptable to the Trustee,
generally to the effect that such person or entity is a beneficial owner of
Offered Certificates, is requesting the information solely for use in
evaluating such person's or entity's investment in such Certificates and will
otherwise keep such information confidential and (y) in the case of a
prospective purchaser, confirmation executed by the requesting person or
entity, in a form reasonably acceptable to the Trustee, generally to the effect
that such person or entity is a prospective purchaser of Offered Certificates
or an interest therein, is requesting the information solely for use in
evaluating a possible investment in such Certificates and will otherwise keep
such information confidential. Certificateholders, by the acceptance of their
Certificates, will be deemed to have agreed to keep such information
confidential. The Servicer may, but is not required, make certain information
available over the Internet.
VOTING RIGHTS
At all times during the term of the Pooling and Servicing Agreement, 98%
of the voting rights for the Certificates (the "Voting Rights") shall be
allocated among the holders of the respective Classes of Principal Balance
Certificates in proportion to the Certificate Balances of their Certificates,
1% of the Voting Rights shall be allocated among the holders of the Class X
Certificates, and the remaining Voting Rights shall be allocated equally among
the holders of the respective Classes of REMIC Residual Certificates. Voting
Rights allocated to a Class of Certificateholders shall be allocated among such
Certificateholders in proportion to the Percentage Interests in such Class
evidenced by their respective Certificates. Appraisal Reduction Amounts will be
allocated in reduction of the respective Certificate Balances of the Class N,
Class M, Class L, Class K, Class J, Class H, Class G, Class F, Class E, Class
D, Class C, Class B and Class A Certificates, in that order, solely for
purposes of calculating Voting Rights.
TERMINATION; RETIREMENT OF CERTIFICATES
The obligations created by the Pooling and Servicing Agreement will
terminate following the earliest of (i) the final payment (or Advance in
respect thereof) or other liquidation of the last Mortgage Loan or REO Property
subject thereto, and (ii) subject to the requirement that the then aggregate
Stated Principal Balance of the Mortgage Asset Pool be less than 1% of the
Initial Pool Balance, the purchase of all of the assets of the Trust Fund by
the Servicer or the Depositor. Written notice of termination of the Pooling and
Servicing Agreement will be given to each Certificateholder, and the final
distribution will be made only upon surrender and cancellation of the
Certificates at the office of the Certificate Registrar or other location
specified in such notice of termination.
S-72
<PAGE>
Any such purchase by the Servicer or the Depositor of all the Mortgage
Loans and other assets in the Trust Fund is required to be made at a price
equal to (a) the sum of (i) the aggregate Purchase Price of all the Mortgage
Loans (exclusive of Mortgage Loans as to which the related Mortgaged Properties
have become REO Properties) then included in the Trust Fund and (ii) the
aggregate fair market value of all REO Properties then included in the Trust
Fund (which fair market value for any REO Property may be less than the
Purchase Price for the corresponding Mortgage Loan), as determined by an
appraiser mutually agreed upon by the Servicer and the Trustee, reduced by (b)
if such purchase is by the Servicer, the aggregate of amounts payable or
reimbursable to the Servicer under the Pooling and Servicing Agreement.
On the final Distribution Date, the aggregate amount paid by the Servicer
or the Depositor, as the case may be, for the Mortgage Loans and other assets
in the Trust Fund (if the Trust Fund is to be terminated as a result of the
purchase described in the preceding paragraph), together with all other amounts
on deposit in the Certificate Account and not otherwise payable to a person
other than the Certificateholders (see "The Pooling and Servicing Agreements --
Certificate Account" in the Prospectus), will be applied as described above
under "--Distributions -- Application of the Available Distribution Amount."
THE TRUSTEE AND THE FISCAL AGENT
The Trustee. LaSalle National Bank ("LaSalle") will act as Trustee.
LaSalle is a subsidiary of LaSalle National Corporation, which is a subsidiary
of the Fiscal Agent. The Trustee is at all times required to be, and will be
required to resign if it fails to be, (i) an institution insured by the FDIC,
(ii) a corporation, trust company, national bank or national banking
association, organized and doing business under the laws of the United States
of America or any state thereof, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of not less than
$50,000,000 and subject to supervision or examination by federal or state
authority and (iii) an institution whose long-term senior unsecured debt (or
that of its fiscal agent, if applicable) is rated not less than "Aa2" by
Moody's and "AA" by Fitch IBCA (or such lower ratings as the Rating Agencies
would permit without an adverse effect on any of the then-current ratings of
the Certificates). The corporate trust office of the Trustee responsible for
administration of the Trust Fund (the "Corporate Trust Office") is located at
135 South LaSalle Street, Suite 1625, Chicago, Illinois 60674-4107, Attention:
Asset-Backed Securities Trust Services Group -- GMAC Commercial Mortgage
Securities, Inc., Mortgage Pass-Through Certificates, Series 1998-C1. The
Trustee will make (x) certain information contained in the Monthly Distribution
Statement available through its ASAP System to Certificateholders dialing
telephone number (312) 904-2200 and requesting statement No. 325 and (y)
certain information regarding the Monthly Loans available in electronic format
through its dial-up bulletin board service, to Certificateholders dialing
telephone number (714) 282-3990. Additionally, certain information regarding
the Mortgage Loans will be made available at the website maintained by LaSalle
at www.lnbabs.com.
The Servicer will be responsible for payment of the compensation of the
Trustee.
The Fiscal Agent. ABN AMRO Bank N.V., a Netherlands banking corporation
and the indirect corporate parent of the Trustee, will act as fiscal agent (the
"Fiscal Agent") for the Trust Fund and will be obligated to make any Advance
required to be made, and not made, by the Servicer and the Trustee under the
Pooling and Servicing Agreement, provided that the Fiscal Agent will not be
obligated to make any Advance that it deems to be a Nonrecoverable Advance. The
Fiscal Agent will be entitled (but not obligated) to rely conclusively on any
determination by the Servicer or the Trustee that an Advance, if made, would be
a Nonrecoverable Advance. The Fiscal Agent will be entitled to reimbursement
for each Advance made by it plus interest thereon at the Advance Rate in the
same manner and to the same extent as the Servicer and the Trustee. See "--P&I
Advances" and "Servicing of the Mortgage Loans -- Servicing and Other
Compensation and Payment of Expenses." The Fiscal Agent will be entitled to
various rights, protections and indemnities similar to those afforded the
Trustee. The Trustee will be responsible for payment of the compensation of the
Fiscal Agent. As of December 31, 1997, the Fiscal Agent had consolidated assets
of approximately $414 billion. In the event that LaSalle shall, for any reason,
cease to act as Trustee under the Pooling Agreement, ABN AMRO Bank N.V.
likewise shall no longer serve in the capacity of Fiscal Agent thereunder.
S-73
<PAGE>
YIELD AND MATURITY CONSIDERATIONS
YIELD CONSIDERATIONS
General. The yield on any Offered Certificate will depend on: (i) the
Pass-Through Rate in effect from time to time for such Certificate; (ii) the
price paid for such Certificate and the rate and timing of payments of
principal on such Certificate; and (iii) the aggregate amount of distributions
on such Certificate.
Pass-Through Rate. The Pass-Through Rate for the Class X Certificates for
any Distribution Date will be variable and will be based on the Weighted
Average Net Mortgage Rate for such Distribution Date. The Pass-Through Rates
applicable to the Class B, Class C and Class D Certificates for any
Distribution Date will be equal to the lesser of the specified rates shown on
the cover hereof and the Weighted Average Net Mortgage Rate with respect to
such Distribution Date. The Pass-Through Rates applicable to the Class E and
Class F Certificates for any Distribution Date will be equal to the Weighted
Average Net Mortgage Rate with respect to such Distribution Date. Accordingly,
the yield on each Class of Offered Certificates (other than the Class A-1 and
Class A-2 Certificates) will be sensitive to changes in the relative
composition of the Mortgage Loans as a result of scheduled amortization,
voluntary prepayments, liquidations of Mortgage Loans following default and
repurchases of Mortgage Loans. Losses or payments of principal on the Mortgage
Loans with higher Mortgage Rates could result in a reduction in the Weighted
Average Net Mortgage Rate, thereby reducing the Pass-Through Rates for the
Class X, Class E and Class F Certificates and, to the extent that the Weighted
Average Net Mortgage Rate is reduced below the specified fixed rates set forth
on the cover hereof for the Class B, Class C and Class D Certificates, reducing
the Pass-Through Rates on such Classes of Offered Certificates.
See "Description of the Certificates -- Pass-Through Rates" and
"Description of the Mortgage Asset Pool" herein and "-- Yield Considerations --
Rate and Timing of Principal Payments" and "-- Yield Sensitivity of the Class X
Certificates" below.
Rate and Timing of Principal Payments. The yield to holders of the Class X
Certificates and any other Offered Certificates that are purchased at a
discount or premium will be affected by the rate and timing of principal
payments on the Mortgage Loans (including principal prepayments on the Mortgage
Loans resulting from both voluntary prepayments by the mortgagors and
involuntary liquidations). The rate and timing of principal payments on the
Mortgage Loans will in turn be affected by, among other things, the
amortization schedules thereof, the dates on which Balloon Payments are due and
the rate and timing of principal prepayments and other unscheduled collections
thereon (including for this purpose, collections made in connection with
liquidations of Mortgage Loans due to defaults, casualties or condemnations
affecting the Mortgaged Properties, or purchases of Mortgage Loans out of the
Trust Fund). Prepayments and, assuming the respective stated maturity dates
thereof have not occurred, liquidations and purchases of the Mortgage Loans,
will result in distributions on the Principal Balance Certificates of amounts
that otherwise would have been distributed (and reductions in the Notional
Amount of the Class X Certificates that would otherwise have occurred) over the
remaining terms of the Mortgage Loans. Defaults on the Mortgage Loans,
particularly at or near their stated maturity dates, may result in significant
delays in payments of principal on the Mortgage Loans (and, accordingly, on the
Principal Balance Certificates) while work-outs are negotiated or foreclosures
are completed. See "Servicing of the Mortgage Loans -- Modifications, Waivers,
Amendments and Consents" herein and "The Pooling and Servicing Agreements --
Realization Upon Defaulted Mortgage Loans" and "Certain Legal Aspects of
Mortgage Loans -- Foreclosure" in the Prospectus. Because the rate of principal
payments on the Mortgage Loans will depend on future events and a variety of
factors (as described below), no assurance can be given as to such rate or the
rate of principal prepayments in particular. The Depositor is not aware of any
relevant publicly available or authoritative statistics with respect to the
historical prepayment experience of a large group of mortgage loans comparable
to the Mortgage Loans.
The extent to which the yield to maturity of an Offered Certificate may
vary from the anticipated yield will depend upon the degree to which such
Certificate is purchased at a discount or premium and when, and to what degree,
payments of principal on the Mortgage Loans are in turn distributed on or
otherwise result in the reduction of the principal balance or notional amount,
as the case may be, of such
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<PAGE>
Certificate. An investor should consider, in the case of any Offered
Certificate purchased at a discount, the risk that a slower than anticipated
rate of principal payments on such Certificate could result in an actual yield
to such investor that is lower than the anticipated yield and, in the case of
any Offered Certificate purchased at a premium, the risk that a faster than
anticipated rate of principal payments on such Certificate could result in an
actual yield to such investor that is lower than the anticipated yield. In
general, the earlier a payment of principal is made on an Offered Certificate
purchased at a discount or premium, the greater will be the effect on an
investor's yield to maturity. As a result, the effect on an investor's yield of
principal payments on such investor's Offered Certificates occurring at a rate
higher (or lower) than the rate anticipated by the investor during any
particular period would not be fully offset by a subsequent like reduction (or
increase) in the rate of principal payments. The yield to maturity of the Class
X Certificates will be highly sensitive to the rate and timing of principal
payments (including by reason of prepayments, defaults and liquidations) on or
in respect of, the Mortgage Loans. Investors in the Class X Certificates should
fully consider the associated risks, including the risk that an extremely rapid
rate of amortization and prepayment of the Mortgage Loans could result in the
failure of such investors to fully recoup their initial investments.
Losses and Shortfalls. The yield to holders of the Offered Certificates
will also depend on the extent to which such holders are required to bear the
effects of any losses or shortfalls on the Mortgage Loans. Losses and other
shortfalls on the Mortgage Loans will generally be borne: first, by the holders
of the respective Classes of Subordinate Certificates, in reverse alphabetical
order of Class designation, to the extent of amounts (or, in the case of a Net
Aggregate Prepayment Interest Shortfall, just interest) otherwise distributable
in respect of their Certificates; and then, by the holders of the Senior
Certificates.
Certain Relevant Factors. The rate and timing of principal payments and
defaults and the severity of losses on the Mortgage Loans may be affected by a
number of factors, including, without limitation, prevailing interest rates,
the terms of the Mortgage Loans (for example, Prepayment Premiums, prepayment
lock-out periods and amortization terms that require Balloon Payments), the
demographics and relative economic vitality of the areas in which the Mortgaged
Properties are located and the general supply and demand for comparable
residential and/or commercial space in such areas, the quality of management of
the Mortgaged Properties, the servicing of the Mortgage Loans, possible changes
in tax laws and other opportunities for investment. See "Risk Factors" and
"Description of the Mortgage Asset Pool" herein and "Risk Factors" and "Yield
and Maturity Considerations -- Yield and Prepayment Considerations" in the
Prospectus.
The rate of prepayment on the Mortgage Asset Pool is likely to be affected
by prevailing market interest rates for mortgage loans of a comparable type,
term and risk level. When the prevailing market interest rate is below a
mortgage coupon, a borrower may have an increased incentive to refinance its
mortgage loan. If a Mortgage Loan is not in a lock-out period, the Prepayment
Premium, if any, in respect of such Mortgage Loan may not be sufficient
economic disincentive to prevent the related borrower from voluntarily
prepaying the loan as part of a refinancing thereof. See "Description of the
Mortgage Asset Pool -- Certain Terms and Conditions of the Mortgage Loans"
herein.
Delay in Payment of Distributions. Because monthly distributions will not
be made to Certificateholders until a date that is scheduled to be at least 15
days following the end of related Interest Accrual Period, the effective yield
to the holders of the Offered Certificates will be lower than the yield that
would otherwise be produced by the applicable Pass-Through Rates and purchase
prices (assuming such prices did not account for such delay).
Unpaid Distributable Certificates Interest. As described under
"Description of the Certificates -- Distributions -- Application of the
Available Distribution Amount" herein, if the portion of the Available
Distribution Amount distributable in respect of interest on any Class of
Offered Certificates on any Distribution Date is less than the Distributable
Certificate Interest then payable for such Class, the shortfall will be
distributable to holders of such Class of Certificates on subsequent
Distribution Dates, to the extent of available funds. Any such shortfall will
not bear interest, however, and will therefore negatively affect the yield to
maturity of such Class of Certificates for so long as it is outstanding.
S-75
<PAGE>
WEIGHTED AVERAGE LIFE
The weighted average life of a Principal Balance Certificate refers to the
average amount of time that will elapse from the date of its issuance until
each dollar allocable to principal of such Certificate is distributed to the
investor. For purposes of this Prospectus Supplement, the weighted average life
of a Principal Balance Certificate is determined by (i) multiplying the amount
of each principal distribution thereon by the number of years from the Delivery
Date to the related Distribution Date, (ii) summing the results and (iii)
dividing the sum by the aggregate amount of the reductions in the principal
balance of such Certificate. Accordingly, the weighted average life of any such
Certificate will be influenced by, among other things, the rate at which
principal of the Mortgage Loans is paid or otherwise collected or advanced and
the extent to which such payments, collections and/or advances of principal are
in turn applied in reduction of the Certificate Balance of the Class of
Certificates to which such Certificate belongs.
Prepayments on mortgage loans may be measured by a prepayment standard or
model. The model used in this Prospectus Supplement is the Constant Prepayment
Rate ("CPR") model. The CPR Model assumes that an outstanding principal balance
experiences prepayments each month at a specified constant annual rate. As used
in each of the following sets of tables with respect to any particular Class,
the column headed "0%" assumes that none of the Mortgage Loans is prepaid
before maturity or, where applicable, extended maturity. The columns headed
"5%," "10%," "15%," "20%," and "25%" assume with respect to any particular
Class, that no prepayments are made on any Mortgage Loan during such Mortgage
Loan's prepayment lock-out or defeasance period, if any, or during such
Mortgage Loan's yield maintenance period, if any, and are otherwise made on
each of the Mortgage Loans at the indicated CPR percentages. There is no
assurance, however, that prepayments of the Mortgage Loans (whether or not in a
prepayment lock-out period or a yield maintenance period) will conform to any
particular CPR percentages, and no representation is made that the Mortgage
Loans will prepay in accordance with the assumptions at any of the CPR
percentages shown or at any other particular prepayment rate, that all the
Mortgage Loans will prepay in accordance with the assumptions at the same rate
or that Mortgage Loans that are in a prepayment lock-out period or a yield
maintenance period will not prepay as a result of involuntary liquidations upon
default or otherwise. A "prepayment lock-out period" is any period during which
the terms of the Mortgage Loan prohibit voluntary prepayments on the part of
the borrower. A "yield maintenance period" is any period during which the terms
of the Mortgage Loan provide that voluntary prepayments be accompanied by a
Prepayment Premium calculated on the basis of a yield maintenance formula.
The following tables indicate the percentage of the initial Certificate
Balance of each Class of Offered Certificates (other than the Class X
Certificates) that would be outstanding after each of the dates shown at the
indicated CPR percentages and the corresponding weighted average life of each
such Class of Certificates. The tables have been prepared on the basis of the
information set forth on Annex A and the following assumptions (collectively,
the "Maturity Assumptions"): (i) the initial Certificate Balances and Notional
Amount, as the case may be, and the Pass-Through Rate for each Class of
Certificates are set forth herein (ii) the scheduled Monthly Payments for each
Mortgage Loan are based on such Mortgage Loan's Cut-off Date Balance, stated
monthly principal and interest payments (as such may be increased in the case
of the one Mortgage Loan as described in Annex A) and the Mortgage Rate in
effect as of the Cut-off Date, (iii) all scheduled Monthly Payments are assumed
to be timely received on the first day of each month, (iv) there are no
delinquencies or losses in respect of the Mortgage Loans, there are no
extensions of maturity in respect of the Mortgage Loans, there are no Appraisal
Reduction Amounts with respect to the Mortgage Loans and there are no
casualties or condemnations affecting the Mortgaged Properties, (v) prepayments
are made on each of the Mortgage Loans at the indicated CPR percentages set
forth in the table (without regard to any limitations in such Mortgage Loans on
partial voluntary principal prepayments) (except to the extent modified below
by the assumption numbered (xii)) and that the ARD Loans mature on the
Anticipated Repayment Date, (vi) all Mortgage Loans accrue interest under the
applicable Accrual Method as specified in Annex A, (vii) neither the Servicer
nor the Depositor exercises its right of optional termination described herein,
(viii) no Mortgage Loan is required to be repurchased by a Mortgage Loan
Seller, (ix) no Prepayment Interest Shortfalls are incurred and no
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<PAGE>
Prepayment Premiums are collected, (x) there are no Additional Trust Fund
Expenses, (xi) distributions on the Certificates are made on the 15th day of
each month, commencing in June 1998, (xii) when specifically indicated in a
particular table, no prepayments are received as to any Mortgage Loan during
such Mortgage Loan's prepayment lock-out period or defeasance period ("LOP"),
if any, or yield maintenance period ("YMP"), if any, (xiii) the prepayment
provisions for each Mortgage Loan as set forth on Annex A are assumed to begin
on the first due date of such Mortgage Loan, (xiv) the Delivery Date is May 18,
1998, (xv) for Loan GMAC 3560, it is assumed that when the prepayment penalty
is equal to the lesser of yield maintenance or a fixed percentage, the penalty
will be calculated as a fixed percentage, (xvi) for Loans GMAC 1040, GMAC 1070,
GMAC 1320, GMAC 2420, GMAC 2560, GMAC 3320 and GMAC 3360, no partial prepayment
due to an earnout occurs, and (xvii) the extension options for Loans GMAC 2240,
GMAC 2540, GMAC 3070 and GMAC 3260 are not exercised. To the extent that the
Mortgage Loans have characteristics or experience performance that differs from
those assumed in preparing the tables set forth below, the Class A-1, Class
A-2, Class B, Class C, Class D, Class E and Class F Certificates may mature
earlier or later than indicated by the tables. It is highly unlikely that the
Mortgage Loans will prepay or perform in accordance with the Maturity
Assumptions at any constant rate until maturity or that all the Mortgage Loans
will prepay in accordance with the Maturity Assumptions or at the same rate. In
particular, certain of the Mortgage Loans may not permit voluntary partial
prepayments. In addition, variations in the actual prepayment experience and
the balance of the specific Mortgage Loans that prepay may increase or decrease
the percentages of initial Certificate Balances (and weighted average lives)
shown in the following tables. Such variations may occur even if the average
prepayment experience of the Mortgage Loans were to equal any of the specified
CPR percentages. In addition, there can be no assurance that the actual pre-tax
yields on, or any other payment characteristics of, any Class of Offered
Certificates will correspond to any of the information shown in the yield
tables herein, or that the aggregate purchase prices of the Offered
Certificates will be as assumed. Accordingly, investors must make their own
decisions as to the appropriate assumptions (including prepayment assumptions)
to be used in deciding whether to purchase the Offered Certificates.
Investors are urged to conduct their own analyses of the rates at which
the Mortgage Loans may be expected to prepay.
Based on the Maturity Assumptions, the following tables indicate the
resulting weighted average lives of the Class A-1, Class A-2, Class B, Class C,
Class D, Class E and Class F Certificates and set forth the percentage of the
initial Certificate Balance of each such Class of Certificates that would be
outstanding after each of the dates shown under the applicable assumptions at
the indicated CPR percentages.
PERCENTAGES OF THE INITIAL CERTIFICATE BALANCE OF THE CLASS A-1 CERTIFICATES
OUTSTANDING AT THE SPECIFIED CPR PERCENTAGES
<TABLE>
<CAPTION>
PREPAYMENTS LOCKED OUT THROUGH
LOP AND YMP, THEN AT THE FOLLOWING CPRS
---------------------------------------------------------------
DATE 0% 5% 10% 15% 20% 25%
- ---- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Initial .................. 100% 100% 100% 100% 100% 100%
May 15, 1999 ............. 93 93 93 93 93 93
May 15, 2000 ............. 86 86 86 86 86 86
May 15, 2001 ............. 78 78 78 78 78 77
May 15, 2002 ............. 70 69 69 69 68 68
May 15, 2003 ............. 59 58 58 58 58 57
May 15, 2004 ............. 49 48 48 48 47 47
May 15, 2005 ............. 31 30 30 29 29 29
May 15, 2006 ............. 21 20 19 19 18 18
May 15, 2007 ............. 10 8 8 7 6 6
May 15, 2008 ............. 0 0 0 0 0 0
Weighted Average
Life (in years) ......... 5.5 5.5 5.4 5.4 5.4 5.4
</TABLE>
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<PAGE>
PERCENTAGES OF THE INITIAL CERTIFICATE BALANCE OF THE CLASS A-2 CERTIFICATES
OUTSTANDING AT THE SPECIFIED CPR PERCENTAGES
<TABLE>
<CAPTION>
PREPAYMENTS LOCKED OUT THROUGH
LOP AND YMP, THEN AT THE FOLLOWING CPRS
---------------------------------------------------------------
DATE 0% 5% 10% 15% 20% 25%
- ---- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Initial .................. 100% 100% 100% 100% 100% 100%
May 15, 1999 ............. 100 100 100 100 100 100
May 15, 2000 ............. 100 100 100 100 100 100
May 15, 2001 ............. 100 100 100 100 100 100
May 15, 2002 ............. 100 100 100 100 100 100
May 15, 2003 ............. 100 100 100 100 100 100
May 15, 2004 ............. 100 100 100 100 100 100
May 15, 2005 ............. 100 100 100 100 100 100
May 15, 2006 ............. 100 100 100 100 100 100
May 15, 2007 ............. 100 100 100 100 100 100
May 15, 2008 ............. 0 0 0 0 0 0
Weighted Average
Life (in years) ......... 9.7 9.7 9.7 9.7 9.7 9.7
</TABLE>
PERCENTAGES OF THE INITIAL CERTIFICATE BALANCE OF THE CLASS B CERTIFICATES
OUTSTANDING AT THE SPECIFIED CPR PERCENTAGES
<TABLE>
<CAPTION>
PREPAYMENTS LOCKED OUT THROUGH
LOP AND YMP, THEN AT THE FOLLOWING CPRS
---------------------------------------------------------------
DATE 0% 5% 10% 15% 20% 25%
- ---- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Initial .................. 100% 100% 100% 100% 100% 100%
May 15, 1999 ............. 100 100 100 100 100 100
May 15, 2000 ............. 100 100 100 100 100 100
May 15, 2001 ............. 100 100 100 100 100 100
May 15, 2002 ............. 100 100 100 100 100 100
May 15, 2003 ............. 100 100 100 100 100 100
May 15, 2004 ............. 100 100 100 100 100 100
May 15, 2005 ............. 100 100 100 100 100 100
May 15, 2006 ............. 100 100 100 100 100 100
May 15, 2007 ............. 100 100 100 100 100 100
May 15, 2008 ............. 0 0 0 0 0 0
Weighted Average
Life (in years) ......... 9.9 9.9 9.8 9.8 9.8 9.8
</TABLE>
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<PAGE>
PERCENTAGES OF THE INITIAL CERTIFICATE BALANCE OF THE CLASS C CERTIFICATES
OUTSTANDING AT THE SPECIFIED CPR PERCENTAGES
<TABLE>
<CAPTION>
PREPAYMENTS LOCKED OUT THROUGH
LOP AND YMP, THEN AT THE FOLLOWING CPRS
---------------------------------------------------------------
DATE 0% 5% 10% 15% 20% 25%
- ---- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Initial .................. 100% 100% 100% 100% 100% 100%
May 15, 1999 ............. 100 100 100 100 100 100
May 15, 2000 ............. 100 100 100 100 100 100
May 15, 2001 ............. 100 100 100 100 100 100
May 15, 2002 ............. 100 100 100 100 100 100
May 15, 2003 ............. 100 100 100 100 100 100
May 15, 2004 ............. 100 100 100 100 100 100
May 15, 2005 ............. 100 100 100 100 100 100
May 15, 2006 ............. 100 100 100 100 100 100
May 15, 2007 ............. 100 100 100 100 100 100
May 15, 2008 ............. 0 0 0 0 0 0
Weighted Average
Life (in years) ......... 9.9 9.9 9.9 9.9 9.9 9.9
</TABLE>
PERCENTAGES OF THE INITIAL CERTIFICATE BALANCE OF THE CLASS D CERTIFICATES
OUTSTANDING AT THE SPECIFIED CPR PERCENTAGES
<TABLE>
<CAPTION>
PREPAYMENTS LOCKED OUT THROUGH
LOP AND YMP, THEN AT THE FOLLOWING CPRS
-------------------------------------------------------------------
DATE 0% 5% 10% 15% 20% 25%
- ---- --------- --------- --------- --------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Initial .................. 100% 100% 100% 100% 100% 100%
May 15, 1999 ............. 100 100 100 100 100 100
May 15, 2000 ............. 100 100 100 100 100 100
May 15, 2001 ............. 100 100 100 100 100 100
May 15, 2002 ............. 100 100 100 100 100 100
May 15, 2003 ............. 100 100 100 100 100 100
May 15, 2004 ............. 100 100 100 100 100 100
May 15, 2005 ............. 100 100 100 100 100 100
May 15, 2006 ............. 100 100 100 100 100 100
May 15, 2007 ............. 100 100 100 100 100 100
May 15, 2008 ............. 28 25 23 21 19 18
May 15, 2009 ............. 0 0 0 0 0 0
Weighted Average
Life (in years) ......... 10.0 10.0 10.0 10.0 9.9 9.9
</TABLE>
S-79
<PAGE>
PERCENTAGES OF THE INITIAL CERTIFICATE BALANCE OF THE CLASS E CERTIFICATES
OUTSTANDING AT THE SPECIFIED CPR PERCENTAGES
<TABLE>
<CAPTION>
PREPAYMENTS LOCKED OUT THROUGH
LOP AND YMP, THEN AT THE FOLLOWING CPRS
---------------------------------------------------------------------
DATE 0% 5% 10% 15% 20% 25%
- ---- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Initial .................. 100% 100% 100% 100% 100% 100%
May 15, 1999 ............. 100 100 100 100 100 100
May 15, 2000 ............. 100 100 100 100 100 100
May 15, 2001 ............. 100 100 100 100 100 100
May 15, 2002 ............. 100 100 100 100 100 100
May 15, 2003 ............. 100 100 100 100 100 100
May 15, 2004 ............. 100 100 100 100 100 100
May 15, 2005 ............. 100 100 100 100 100 100
May 15, 2006 ............. 100 100 100 100 100 100
May 15, 2007 ............. 100 100 100 100 100 100
May 15, 2008 ............. 100 100 100 100 100 100
May 15, 2009 ............. 39 37 35 34 33 32
May 15, 2010 ............. 20 17 16 15 14 14
May 15, 2011 ............. 0 0 0 0 0 0
Weighted Average
Life (in years) ......... 11.1 11.1 11.0 11.0 11.0 10.9
</TABLE>
PERCENTAGES OF THE INITIAL CERTIFICATE BALANCE OF THE CLASS F CERTIFICATES
OUTSTANDING AT THE SPECIFIED CPR PERCENTAGES
<TABLE>
<CAPTION>
PREPAYMENTS LOCKED OUT THROUGH
LOP AND YMP, THEN AT THE FOLLOWING CPRS
---------------------------------------------------------------------
DATE 0% 5% 10% 15% 20% 25%
- ---- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Initial .................. 100% 100% 100% 100% 100% 100%
May 15, 1999 ............. 100 100 100 100 100 100
May 15, 2000 ............. 100 100 100 100 100 100
May 15, 2001 ............. 100 100 100 100 100 100
May 15, 2002 ............. 100 100 100 100 100 100
May 15, 2003 ............. 100 100 100 100 100 100
May 15, 2004 ............. 100 100 100 100 100 100
May 15, 2005 ............. 100 100 100 100 100 100
May 15, 2006 ............. 100 100 100 100 100 100
May 15, 2007 ............. 100 100 100 100 100 100
May 15, 2008 ............. 100 100 100 100 100 100
May 15, 2009 ............. 100 100 100 100 100 100
May 15, 2010 ............. 100 100 100 100 100 100
May 15, 2011 ............. 95 95 94 94 93 93
May 15, 2012 ............. 67 64 62 59 57 54
May 15, 2013 ............. 0 0 0 0 0 0
Weighted Average
Life (in years) ......... 14.2 14.2 14.1 14.1 14.1 14.0
</TABLE>
S-80
<PAGE>
CERTAIN PRICE/YIELD TABLES
The tables set forth below show the corporate bond equivalent ("CBE")
yield and weighted average life in years with respect to each Class of Offered
Certificates (other than the Class X Certificates) under the Maturity
Assumptions.
The yields set forth in the following tables were calculated by
determining the monthly discount rates which, when applied to the assumed
stream of cash flows to be paid on each Class of Offered Certificates (other
than the Class X Certificates), would cause the discounted present value of
such assumed stream of cash flows as of May 18, 1998 to equal the assumed
purchase prices, plus accrued interest at the applicable Pass-Through Rate as
stated on the cover hereof from and including the Cut-off Date to but excluding
the Delivery Date, and converting such monthly rates to semi-annual corporate
bond equivalent rates. Such calculation does not take into account variations
that may occur in the interest rates at which investors may be able to reinvest
funds received by them as reductions of the Certificate Balances of such
Classes of Offered Certificates and consequently does not purport to reflect
the return on any investment in such Classes of Offered Certificates when such
reinvestment rates are considered. Purchase prices are expressed in 32nds and
interpreted as a percentage of the initial Certificate Balance of the specified
Class (i.e., 99-16 means 99 16/32%) and are exclusive of accrued interest.
PRE-TAX YIELD TO MATURITY (CBE)
FOR THE CLASS A-1 CERTIFICATES AT THE SPECIFIED CPR PERCENTAGES
<TABLE>
<CAPTION>
PREPAYMENTS LOCKED OUT THROUGH LOP AND
YMP, THEN AT THE FOLLOWING CPRS
---------------------------------------------------------------------------------
ASSUMED PURCHASE PRICE*(32NDS) 0% 5% 10% 15% 20% 25%
- -------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
99-16 ......................... 6.555% 6.555% 6.556% 6.556% 6.556% 6.556%
99-24 ......................... 6.497 6.497 6.497 6.497 6.497 6.497
100-00 ......................... 6.440 6.440 6.439 6.439 6.439 6.439
100-08 ......................... 6.383 6.382 6.382 6.381 6.381 6.380
100-16 ......................... 6.326 6.325 6.324 6.323 6.323 6.322
100-24 ......................... 6.269 6.268 6.267 6.266 6.265 6.264
101-00 ......................... 6.212 6.211 6.209 6.208 6.207 6.206
101-08 ......................... 6.156 6.154 6.152 6.151 6.150 6.149
101-16 ......................... 6.100 6.098 6.096 6.094 6.092 6.091
</TABLE>
- ----------
* Exclusive of accrued interest.
S-81
<PAGE>
PRE-TAX YIELD TO MATURITY (CBE)
FOR THE CLASS A-2 CERTIFICATES AT THE SPECIFIED CPR PERCENTAGES
<TABLE>
<CAPTION>
PREPAYMENTS LOCKED OUT THROUGH LOP AND
YMP, THEN AT THE FOLLOWING CPRS
---------------------------------------------------------------------------------
ASSUMED PURCHASE PRICE*(32NDS) 0% 5% 10% 15% 20% 25%
- -------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
100-16 ......................... 6.685% 6.685% 6.685% 6.685% 6.685% 6.685%
100-24 ......................... 6.649 6.649 6.649 6.649 6.649 6.649
101-00 ......................... 6.614 6.614 6.614 6.613 6.613 6.613
101-08 ......................... 6.578 6.578 6.578 6.578 6.578 6.578
101-16 ......................... 6.543 6.543 6.543 6.543 6.542 6.542
101-24 ......................... 6.508 6.508 6.507 6.507 6.507 6.507
102-00 ......................... 6.472 6.472 6.472 6.472 6.472 6.472
102-08 ......................... 6.437 6.437 6.437 6.437 6.437 6.437
102-16 ......................... 6.403 6.402 6.402 6.402 6.402 6.402
</TABLE>
- ----------
* Exclusive of accrued interest.
PRE-TAX YIELD TO MATURITY (CBE)
FOR THE CLASS B CERTIFICATES AT THE SPECIFIED CPR PERCENTAGES
<TABLE>
<CAPTION>
PREPAYMENTS LOCKED OUT THROUGH LOP AND
YMP, THEN AT THE FOLLOWING CPRS
---------------------------------------------------------------------------------
ASSUMED PURCHASE PRICE*(32NDS) 0% 5% 10% 15% 20% 25%
- -------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
100-16 ......................... 6.740% 6.740% 6.740% 6.740% 6.740% 6.740%
100-24 ......................... 6.705 6.705 6.705 6.704 6.704 6.704
101-00 ......................... 6.670 6.669 6.669 6.669 6.669 6.669
101-08 ......................... 6.634 6.634 6.634 6.634 6.634 6.634
101-16 ......................... 6.599 6.599 6.599 6.599 6.599 6.599
101-24 ......................... 6.564 6.564 6.564 6.564 6.564 6.564
102-00 ......................... 6.530 6.529 6.529 6.529 6.529 6.529
102-08 ......................... 6.495 6.495 6.494 6.494 6.494 6.494
102-16 ......................... 6.460 6.460 6.460 6.459 6.459 6.459
</TABLE>
- ----------
* Exclusive of accrued interest.
S-82
<PAGE>
PRE-TAX YIELD TO MATURITY (CBE)
FOR THE CLASS C CERTIFICATES AT THE SPECIFIED CPR PERCENTAGES
<TABLE>
<CAPTION>
PREPAYMENTS LOCKED OUT THROUGH LOP AND
YMP, THEN AT THE FOLLOWING CPRS
---------------------------------------------------------------------------------
ASSUMED PURCHASE PRICE*(32NDS) 0% 5% 10% 15% 20% 25%
- -------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
100-16 ......................... 6.794% 6.794% 6.794% 6.794% 6.794% 6.794%
100-24 ......................... 6.759 6.759 6.759 6.759 6.759 6.759
101-00 ......................... 6.724 6.724 6.724 6.724 6.724 6.724
101-08 ......................... 6.689 6.689 6.689 6.689 6.689 6.689
101-16 ......................... 6.654 6.654 6.654 6.654 6.654 6.654
101-24 ......................... 6.619 6.619 6.619 6.619 6.619 6.619
102-00 ......................... 6.584 6.584 6.584 6.584 6.584 6.584
102-08 ......................... 6.549 6.549 6.549 6.549 6.549 6.549
102-16 ......................... 6.515 6.515 6.515 6.515 6.515 6.515
</TABLE>
- ----------
* Exclusive of accrued interest.
PRE-TAX YIELD TO MATURITY (CBE)
FOR THE CLASS D CERTIFICATES AT THE SPECIFIED CPR PERCENTAGES
<TABLE>
<CAPTION>
PREPAYMENTS LOCKED OUT THROUGH LOP AND
YMP, THEN AT THE FOLLOWING CPRS
---------------------------------------------------------------------------------
ASSUMED PURCHASE PRICE*(32NDS) 0% 5% 10% 15% 20% 25%
- -------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
100-16 ......................... 6.966% 6.966% 6.966% 6.966% 6.966% 6.966%
100-24 ......................... 6.930 6.930 6.930 6.930 6.930 6.930
101-00 ......................... 6.895 6.895 6.895 6.895 6.895 6.895
101-08 ......................... 6.860 6.860 6.860 6.860 6.859 6.859
101-16 ......................... 6.825 6.825 6.824 6.824 6.824 6.824
101-24 ......................... 6.790 6.789 6.789 6.789 6.789 6.789
102-00 ......................... 6.755 6.755 6.754 6.754 6.754 6.754
102-08 ......................... 6.720 6.720 6.720 6.719 6.719 6.719
102-16 ......................... 6.685 6.685 6.685 6.685 6.685 6.685
</TABLE>
- ----------
* Exclusive of accrued interest.
PRE-TAX YIELD TO MATURITY (CBE)
FOR THE CLASS E CERTIFICATES AT THE SPECIFIED CPR PERCENTAGES
<TABLE>
<CAPTION>
PREPAYMENTS LOCKED OUT THROUGH LOP AND
YMP, THEN AT THE FOLLOWING CPRS
---------------------------------------------------------------------------------
ASSUMED PURCHASE PRICE*(32NDS) 0% 5% 10% 15% 20% 25%
- -------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
98-21 .......................... 7.374% 7.374% 7.374% 7.374% 7.374% 7.374%
98-29 .......................... 7.340 7.340 7.340 7.340 7.340 7.340
99-05 .......................... 7.306 7.306 7.306 7.306 7.306 7.306
99-13 .......................... 7.272 7.272 7.272 7.272 7.272 7.272
99-21 .......................... 7.238 7.238 7.238 7.238 7.238 7.237
99-29 .......................... 7.205 7.204 7.204 7.204 7.204 7.204
100-05 ......................... 7.171 7.171 7.170 7.170 7.170 7.170
100-13 ......................... 7.138 7.137 7.137 7.136 7.136 7.136
100-21 ......................... 7.105 7.104 7.103 7.103 7.103 7.102
</TABLE>
- ----------
* Exclusive of accrued interest.
S-83
<PAGE>
PRE-TAX YIELD TO MATURITY (CBE)
FOR THE CLASS F CERTIFICATES AT THE SPECIFIED CPR PERCENTAGES
<TABLE>
<CAPTION>
PREPAYMENTS LOCKED OUT THROUGH LOP AND
YMP, THEN AT THE FOLLOWING CPRS
---------------------------------------------------------------------------------
ASSUMED PURCHASE PRICE*(32NDS) 0% 5% 10% 15% 20% 25%
- -------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
93-21 .......................... 7.955% 7.956% 7.957% 7.957% 7.958% 7.959%
93-29 .......................... 7.924 7.924 7.925 7.926 7.927 7.927
94-05 .......................... 7.893 7.893 7.894 7.894 7.895 7.896
94-13 .......................... 7.861 7.862 7.862 7.863 7.864 7.864
94-21 .......................... 7.830 7.831 7.831 7.832 7.832 7.833
94-29 .......................... 7.799 7.800 7.800 7.801 7.801 7.802
95-05 .......................... 7.768 7.769 7.769 7.770 7.770 7.771
95-13 .......................... 7.738 7.738 7.738 7.739 7.739 7.740
95-21 .......................... 7.707 7.707 7.707 7.708 7.708 7.709
</TABLE>
- ----------
* Exclusive of accrued interest.
YIELD SENSITIVITY OF THE CLASS X CERTIFICATES
The yield to maturity of the Class X Certificates will be especially
sensitive to the prepayment, repurchase and default experience on the Mortgage
Loans, which prepayment, repurchase and default experience may fluctuate
significantly from time to time. A rapid rate of principal payments will have a
material negative effect on the yield to maturity of the Class X Certificates.
There can be no assurance that the Mortgage Loans will prepay at any particular
rate. In addition, the Pass-Through Rate for any Class X Component relating to
a Class of Principal Balance Certificates having a Pass-Through Rate equal to
the Weighted Average Net Mortgage Rate will be zero. Prospective investors in
the Class X Certificates should fully consider the associated risks, including
the risk that such investors may not fully recover their initial investment.
The following tables indicate the sensitivity of the pre-tax yield to
maturity on the Class X Certificates to various CPR percentages on the Mortgage
Loans by projecting the monthly aggregate payments of interest on the Class X
Certificates and computing the corresponding pre-tax yields to maturity on a
corporate bond equivalent basis, based on the Maturity Assumptions. It was
further assumed that the aggregate purchase price of the Class X Certificates
are as specified below, in each case expressed in 32nds and interpreted as a
percentage (i.e., 2-04 is 2 4/32%) of the initial Notional Amount (without
accrued interest). Any differences between such assumptions and the actual
characteristics and performance of the Mortgage Loans and of the Class X
Certificates may result in yields being different from those shown in such
table. Discrepancies between assumed and actual characteristics and performance
underscore the hypothetical nature of the table, which is provided only to give
a general sense of the sensitivity of yields in varying prepayment scenarios.
The pre-tax yields set forth in the following tables were calculated by
determining the monthly discount rates that, when applied to the assumed
streams of cash flows to be paid on the Class X Certificates, would cause the
discounted present value of such assumed stream of cash flows as of May 18,
1998 to equal the assumed aggregate purchase price plus accrued interest at the
Class X Pass-Through Rate from and including the Cut-off Date to but excluding
the Delivery Date thereof, and by converting such monthly rates to semi-annual
corporate bond equivalent rates. Such calculation does not take into account
shortfalls in collection of interest due to prepayments (or other liquidations)
of the Mortgage Loans or the interest rates at which investors may be able to
reinvest funds received by them as distributions on the Class X Certificates
(and accordingly does not purport to reflect the return on any investment in
the Class X Certificates when such reinvestment rates are considered).
Notwithstanding the assumed prepayment rates reflected in the preceding
tables, it is highly unlikely that the Mortgage Loans will be prepaid according
to one particular pattern. For this reason, and because the timing of cash
flows is critical to determining yields, the pre-tax yield to maturity on the
Class X
S-84
<PAGE>
Certificates is likely to differ from those shown in the tables, even if all of
the Mortgage Loans prepay at the indicated CPR percentages over any given time
period or over the entire life of the Certificates.
There can be no assurance that the Mortgage Loans will prepay at any
particular rate or that the yield on the Class X Certificates will conform to
the yields described herein. Investors are urged to make their investment
decisions based on the determinations as to anticipated rates of prepayment
under a variety of scenarios. Investors in the Class X Certificates should
fully consider the risk that a rapid rate of prepayments on the Mortgage Loans
could result in the failure of such investors to fully recover their
investments.
In addition, holders of the Class X Certificates generally have rights to
relatively larger portions of interest payments on Mortgage Loans with higher
Mortgage Rates; thus, the yield on the Class X Certificates will be materially
and adversely affected if the Mortgage Loans with higher Mortgage Rates prepay
faster than the Mortgage Loans with lower Mortgage Rates.
PRE-TAX YIELD TO MATURITY FOR THE
CLASS X CERTIFICATES AT THE SPECIFIED CPR PERCENTAGES
<TABLE>
<CAPTION>
PREPAYMENTS LOCKED OUT THROUGH LOP AND
YMP, THEN AT THE FOLLOWING CPRS
---------------------------------------------------------------------------------------
ASSUMED PURCHASE PRICE (32NDS)* 0% 5% 10% 15% 20% 25%
- --------------------------------- ------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
2-04 ............................ 11.524% 11.467% 11.418% 11.375% 11.338% 11.304%
2-12 ............................ 8.580 8.522 8.472 8.428 8.390 8.355
2-20 ............................ 6.098 6.039 5.988 5.944 5.905 5.870
</TABLE>
- ----------
* Exclusive of accrued interest.
S-85
<PAGE>
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
GENERAL
Upon the issuance of the Offered Certificates, Orrick, Herrington &
Sutcliffe LLP, counsel to the Depositor, will deliver its opinion generally to
the effect that, assuming compliance with all provisions of the Pooling and
Servicing Agreement, for Federal income tax purposes, REMIC I, REMIC II and
REMIC III will each qualify as a REMIC under the Code. For Federal income tax
purposes, the Class R-I Certificates will be the sole class of "residual
interests" in REMIC I; the Class R-II Certificates will be the sole class of
"residual interests" in REMIC II; the Offered Certificates will evidence the
"regular interests" in, and will be treated as debt instruments of, REMIC III
and the Class R-III Certificates will be the sole class of "residual interests"
in REMIC III. See "Certain Federal Income Tax Consequences -- REMICs" in the
Prospectus.
ORIGINAL ISSUE DISCOUNT AND PREMIUM
The Class X and Class F Certificates will be treated as having been issued
with original issue discount for Federal income tax reporting purposes. The
prepayment assumption that will be used in determining the rate of accrual of
original issue discount, market discount and premium, if any, for Federal
income tax purposes will be based on the assumption that subsequent to the date
of any determination the Mortgage Loans will not prepay prior to their
respective maturity dates. No representation is made that the Mortgage Loans
will not prepay. See "Certain Federal Income Tax Consequences -- REMICs --
Taxation of Owners of REMIC Regular Certificates -- Original Issue Discount" in
the Prospectus.
The IRS has issued OID Regulations under Sections 1271 to 1275 of the Code
generally addressing the treatment of debt instruments issued with original
issue discount. Purchasers of the Offered Certificates should be aware that the
OID Regulations and Section 1272(a)(6) of the Code do not adequately address
certain issues relevant to, or are not applicable to, prepayable securities
such as the Offered Certificates. In addition, there is considerable
uncertainty concerning the application of Section 1272(a)(6) of the Code and
the OID Regulations to REMIC Regular Certificates that provide for payments
based on an adjustable rate, such as the Class X and Class F Certificates.
There are uncertainties concerning the application of Section 1272(a)(6) of the
Code to the Class X and Class F Certificates, and the rules of the OID
Regulations relating to debt instruments having an adjustable rate of interest
are limited in their application in ways that could preclude their application
to the Class X and Class F Certificates even in the absence of Section
1272(a)(6) of the Code. The IRS could assert that income derived from a Class X
Certificate should be calculated as if the Class X Certificate were a
Certificate purchased at a premium equal to the price paid by the Holder for
the Class X Certificate. Under this approach, a Holder would be entitled to
amortize such premium only if it has in effect an election under Section 171 of
the Code with respect to all taxable debt instruments held by such Holder, as
described in the Prospectus under "Certain Federal Income Tax Consequences --
REMICs -- Taxation of Owners of REMIC Regular Certificates -- Premium."
Alternatively, the IRS could assert that the Class X Certificates should be
taxable under regulations governing debt instruments having one or more
contingent payments. Prospective purchasers of the Offered Certificates are
advised to consult their tax advisors concerning the tax treatment of such
Certificates.
Assuming the Class X Certificates are treated as having been issued with
original issue discount, it appears that a reasonable method of reporting
original issue discount with respect to the Class X Certificates, generally
would be to report all income with respect to such Certificates as original
issue discount for each period, computing such original issue discount (i) by
assuming that the value of the applicable index will remain constant for
purposes of determining the original yield to maturity of, and projecting
future distributions on, such Certificates, thereby treating such Certificates
as fixed rate instruments to which the original issue discount computation
rules described in the Prospectus can be applied, and (ii) by accounting for
any positive or negative variation in the actual value of the applicable index
in any period from its assumed value as a current adjustment to original issue
discount with respect to such period. See "Certain Federal Income Tax
Consequences -- REMICs -- Taxation of Owners of REMIC Regular Certificates --
Original Issue Discount" in the Prospectus.
S-86
<PAGE>
If the method for computing original issue discount described in the
Prospectus results in a negative amount for any period with respect to a holder
of a Class X and Class F Certificate, the amount of original issue discount
allocable to such period would be zero and such Certificateholder will be
permitted to offset such negative amount only against future original issue
discount (if any) attributable to such Certificate. Although the matter is not
free from doubt, a holder of a Class X and Class F Certificate may be permitted
to deduct a loss to the extent that his or her respective remaining basis in
such Certificate exceeds the maximum amount of future payments to which such
Certificateholder is entitled, assuming no further prepayments of the Mortgage
Loans. Any such loss might be treated as a capital loss.
The OID Regulations in some circumstances permit the holder of a debt
instrument to recognize original issue discount under a method that differs
from that of the issuer. Accordingly, it is possible that holders of Class X
and Class F Certificates may be able to select a method for recognizing
original issue discount that differs from that used by the REMIC Administrator
in preparing reports to Certificateholders and the IRS. Prospective purchasers
of Class X and Class F Certificates are advised to consult their tax advisors
concerning the treatment of such Certificates.
Prepayment Premiums actually collected on the Mortgage Loans will be
distributed to the holders of each Class of Certificates entitled thereto as
described herein. It is not entirely clear under the Code when the amount of a
Prepayment Premium should be taxed to the holder of a Class of Certificates
entitled to a Prepayment Premium. For Federal income tax reporting purposes,
Prepayment Premiums will be treated as income to the holders of a Class of
Certificates entitled to Prepayment Premiums only after the Servicer's actual
receipt of a Prepayment Premium as to which such Class of Certificates is
entitled under the terms of the Pooling and Servicing Agreement. It appears
that Prepayment Premiums are to be treated as ordinary income rather than
capital gain. However, the correct characterization of such income is not
entirely clear and Certificateholders should consult their tax advisors
concerning the treatment of Prepayment Premiums.
The Class A-1, Class A-2, Class B, Class C and Class D Certificates will
be treated for Federal income tax purposes as having been issued at a premium.
Whether any holder of any such Class of Certificates will be treated as holding
a Certificate with amortizable bond premium will depend on such
Certificateholder's purchase price and the distributions remaining to be made
on such Certificate at the time of its acquisition by such Certificateholder.
Holders of each such Class of Certificates should consult their tax advisors
regarding the possibility of making an election to amortize such premium. See
"Certain Federal Income Tax Consequences -- REMICs -- Taxation of Owners of
REMIC Regular Certificates -- Premium" in the Prospectus.
CHARACTERIZATION OF INVESTMENTS IN OFFERED CERTIFICATES
The Offered Certificates will be "real estate assets" within the meaning
of Section 856(c)(4)(A) of the Code in the same proportion that the assets of
the Trust Fund would be so treated. In addition, interest (including original
issue discount, if any) on the Offered Certificates will be interest described
in Section 856(c)(3)(B) of the Code to the extent that such Certificates are
treated as "real estate assets" within the meaning of Section 856(c)(4)(A) of
the Code. Moreover, the Offered Certificates will be "qualified mortgages"
under Section 860G(a)(3) of the Code if transferred to another REMIC on its
start-up day in exchange for regular or residual interests therein.
The Offered Certificates will be treated as assets within the meaning of
Section 7701(a)(19)(C) of the Code generally only to the extent of the portion
of the Mortgage Loans secured by multifamily Mortgaged Properties. See
"Description of the Mortgage Asset Pool" herein and "Certain Federal Income Tax
Consequences -- REMICs" in the Prospectus.
For further information regarding the Federal income tax consequences of
investing in the Offered Certificates, see "Certain Federal Income Tax
Consequences -- REMICs" in the Prospectus.
S-87
<PAGE>
METHOD OF DISTRIBUTION
Subject to the terms and conditions set forth in an Underwriting
Agreement, dated April 28, 1998 (the "Underwriting Agreement"), the
Underwriters have agreed to purchase and the Depositor has agreed to sell to
the Underwriters the Offered Certificates.
It is expected that delivery of the Offered Certificates will be made only
in book-entry form through the Same Day Funds Settlement System of DTC on or
about May 18, 1998, against payment therefor in immediately available funds.
In the Underwriting Agreement, the Underwriters have agreed to purchase
the portion of the Certificates of each Class set forth below.
ALLOCATION TABLE
<TABLE>
<CAPTION>
UNDERWRITER CLASS X CLASS A-1 CLASS A-2 CLASS B CLASS C CLASS D CLASS E CLASS F
----------- --------- ----------- ----------- --------- --------- --------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Deutsche Morgan Grenfell Inc. ...... 50% 50% 50% 50% 50% 50% 50% 50%
Lehman Brothers Inc. ............... 50% 50% 50% 50% 50% 50% 50% 50%
Total .............................. 100% 100% 100% 100% 100% 100% 100% 100%
=== === === === === === === ===
</TABLE>
In the Underwriting Agreement, the Underwriters have agreed, subject to
the terms and conditions set forth therein, to purchase all of the Offered
Certificates if any are purchased. In the event of default by any Underwriter,
the Underwriting Agreement provides that, in certain circumstances, the
purchase commitment of the nondefaulting underwriter may be increased or the
underwriting may be terminated.
The Underwriting Agreement provides that the obligation of each
Underwriter to pay for and accept delivery of its Certificates is subject to,
among other things, the receipt of certain legal opinions and to the
conditions, among others, that no stop order suspending the effectiveness of
the Depositor's Registration Statement shall be in effect, and that no
proceedings for such purpose shall be pending before or threatened by the
Securities and Exchange Commission.
The distribution of the Offered Certificates by any Underwriter may be
effected from time to time in one or more negotiated transactions, or
otherwise, at varying prices to be determined at the time of sale. Proceeds to
the Depositor from the sale of the Offered Certificates, before deducting
expenses payable by the Depositor, will be approximately 103.52% of the
aggregate Certificate Balance of the Offered Certificates, plus accrued
interest. Each Underwriter may effect such transactions by selling its
Certificates to or through dealers, and such dealers may receive compensation
in the form of underwriting discounts, concessions or commissions from the
Underwriter for whom they act as agent. In connection with the sale of the
Offered Certificates, each Underwriter may be deemed to have received
compensation from the Depositor in the form of underwriting compensation. Each
Underwriter and any dealers that participate with such Underwriter in the
distribution of the Offered Certificates may be deemed to be underwriters and
any profit on the resale of the Offered Certificates positioned by them may be
deemed to be underwriting discounts and commissions under the Securities Act of
1933, as amended.
Deutsche Morgan Grenfell Inc. is an affiliate of GACC.
The Underwriting Agreement provides that the Depositor will indemnify the
Underwriters, and that under limited circumstances the Underwriters will
indemnify the Depositor, against certain civil liabilities under the Securities
Act of 1933, as amended, or contribute to payments to be made in respect
thereof.
There can be no assurance that a secondary market for the Offered
Certificates will develop or, if it does develop, that it will continue. The
primary source of ongoing information available to investors concerning the
Offered Certificates will be the Trustee Reports discussed herein under
"Description of the Certificates -- Reports to Certificateholders; Certain
Available Information." Except as described herein under "Description of the
Certificates -- Reports to Certificateholders; Certain Available Information,"
there can be no assurance that any additional information regarding the Offered
Certificates will be available through any other source. In addition, the
Depositor is not aware of any
S-88
<PAGE>
source through which price information about the Offered Certificates will be
generally available on an ongoing basis. The limited nature of such information
regarding the Offered Certificates may adversely affect the liquidity of the
Offered Certificates, even if a secondary market for the Offered Certificates
becomes available.
LEGAL MATTERS
Certain legal matters will be passed upon for the Depositor by Orrick,
Herrington & Sutcliffe LLP and for the Underwriters by Brown & Wood LLP.
RATINGS
It is a condition to their issuance that the respective Classes of Offered
Certificates receive the indicated credit ratings from Moody's and Fitch IBCA:
<TABLE>
<CAPTION>
CLASS MOODY'S FITCH IBCA
- ----------------------- --------- -----------
<S> <C> <C>
Class X ............ Aaa AAA
Class A-1 .......... Aaa AAA
Class A-2 .......... Aaa AAA
Class B ............ Aaa AA+
Class C ............ Aa2 AA
Class D ............ A2 A
Class E ............ Baa2 BBB
Class F ............ NR BBB-
</TABLE>
The ratings of the Offered Certificates address the likelihood of the
timely receipt by holders thereof of all payments of interest to which they are
entitled and the ultimate receipt by holders thereof of all payments of
principal to which they are entitled, if any, by the Distribution Date in May,
2030 (the "Rated Final Distribution Date"). The ratings take into consideration
the credit quality of the Mortgage Asset Pool, structural and legal aspects
associated with the Certificates, and the extent to which the payment stream
from the Mortgage Asset Pool is adequate to make payments of principal and
interest required under the Offered Certificates. The ratings of the Offered
Certificates do not, however, represent any assessments of (i) the likelihood
or frequency of principal prepayments (whether voluntary or involuntary) on the
Mortgage Loans, (ii) the degree to which such prepayments might differ from
those originally anticipated or (iii) whether and to what extent Prepayment
Premiums will be collected in connection with such prepayments or the
corresponding effect on yield to investors. In general, the ratings thus
address credit risk and not prepayment risk.
As described herein, the amounts payable with respect to the Class X
Certificates do not include principal. If all the Mortgage Loans were to prepay
in the initial month, with the result that the Class X Certificates were to
receive only a single month's interest (without regard to any Prepayment
Premiums that may be collected), and thus suffer a nearly complete loss of
their investment, all amounts "due" to such Certificateholders will
nevertheless have been paid, and such result is consistent with the ratings
assigned by Moody's and Fitch IBCA to the Class X Certificates. The ratings of
the Class X Certificates by Moody's and Fitch IBCA do not address the timing or
magnitude of reductions of the Notional Amount of the Class X Certificates, but
only the obligation to pay interest timely on the Notional Amount of the Class
X Certificates, as such may be reduced from time to time as described herein.
Such ratings do not represent any assessment of the yield to maturity of the
Class X Certificates or the possibility that the Class X Certificateholders
might not fully recover their investment in the event of rapid prepayments of
the Mortgage Loans (including both voluntary and involuntary prepayments). The
Class X Certificate Notional Amount upon which interest is calculated is
reduced by the allocation of Realized Losses and prepayments, whether voluntary
or involuntary. The rating does not address the timing or magnitude of
reductions of such Notional Amount, but only the obligation to pay interest
timely on the notional amount as so reduced from time to time. Accordingly, the
ratings of the Class X Certificates should be evaluated independently from
similar ratings on other types of securities.
S-89
<PAGE>
There can be no assurance as to whether any rating agency not requested to
rate the Offered Certificates will nonetheless issue a rating to any Class
thereof and, if so, what such rating would be. A rating assigned to any Class
of Offered Certificates by a rating agency that has not been requested by the
Depositor to do so may be lower than the ratings assigned thereto by Moody's or
Fitch IBCA, as applicable.
The ratings on the Offered Certificates should be evaluated independently
from similar ratings on other types of securities. A security rating is not a
recommendation to buy, sell or hold securities and may be subject to revision
or withdrawal at any time by the assigning rating agency.
LEGAL INVESTMENT
The Offered Certificates will not be "mortgage related securities" for
purposes of SMMEA. As a result, the appropriate characterization of the Offered
Certificates under various legal investment restrictions, and thus the ability
of investors subject to these restrictions to purchase the Offered
Certificates, is subject to significant interpretive uncertainties.
The Depositor makes no representation as to the proper characterization of
any class of Offered Certificates for legal investment or other purposes, or as
to the ability of particular investors to purchase the Offered Certificates
under applicable legal investment or other restrictions. All institutions whose
investment activities are subject to legal investment laws and regulations,
regulatory capital requirements or review by regulatory authorities should
consult with their legal advisors in determining whether and to what extent the
Offered Certificates constitute legal investments for them or are subject to
investment, capital or other restrictions.
See "Legal Investment" in the Prospectus.
ERISA CONSIDERATIONS
A fiduciary of any employee benefit plan or other retirement plan or
arrangement, including individual retirement accounts and annuities, Keogh
plans and collective investment funds and separate accounts (and, as
applicable, insurance company general accounts) in which such plans, accounts
or arrangements are invested, that is subject to ERISA and/or Section 4975 of
the Code (each, a "Plan") should review with its counsel whether the purchase
or holding of Offered Certificates could give rise to a transaction that is
prohibited or is not otherwise permitted either under ERISA or Section 4975 of
the Code or whether there exists any statutory or administrative exemption
applicable thereto.
The purchase or holding of the Class A and Class X Certificates by, on
behalf of or with assets of a Plan may qualify for exemptive relief under the
Exemption, as described under "ERISA Considerations -- Prohibited Transaction
Exemption" in the Prospectus; however, the Exemption contains a number of
conditions, including the requirement that any such Plan must be an "accredited
investor" as defined in Rule 501(a)(1) of Regulation D of the Securities and
Exchange Commission under the Securities Act of 1933, as amended. In addition,
neither the Exemption nor any similar exemption issued to the Underwriters will
apply to the Class B, Class C, Class D, Class E or Class F Certificates. As a
result, no transfer of a Class B, Class C, Class D, Class E or Class F
Certificate or any interest therein may be made to a Plan or to any person who
is directly or indirectly purchasing such Certificate or interest therein on
behalf of, as named fiduciary of, as trustee of, or with assets of a Plan,
unless the prospective transferee provides the Depositor, the Trustee, the
Fiscal Agent and the Servicer with an opinion of counsel satisfactory to the
Depositor, the Trustee, the Fiscal Agent and the Servicer that such transfer is
permissible under applicable law, will not constitute or result in any
non-exempt prohibited transaction under ERISA or Section 4975 of the Code and
will not subject the Depositor, the Trustee, the Fiscal Agent or the Master
Servicer to any obligation in addition to those undertaken in the Pooling and
Servicing Agreement. In lieu of such opinion of counsel, the prospective
transferee of a Class B, Class C, Class D, Class E or Class F Certificate may
provide a certification of facts substantially to the effect that the purchase
of such Certificate by or on behalf of, or with assets of, any Plan is
permissible under applicable law, will not constitute or result in any
non-exempt prohibited transaction under ERISA or Section 4975 of the Code, will
not subject the Depositor, the Trustee, the Fiscal Agent or the Master Servicer
to any
S-90
<PAGE>
obligation in addition to those undertaken in the Pooling and Servicing
Agreement, and the following conditions are met: (a) the source of funds used
to purchase such Certificate is an "insurance company general account" (as such
term is defined in United States Department of Labor Prohibited Transaction
Class Exemption ("PTCE") 95-60) and (b) the conditions set forth in Sections I
and III of PTCE 95-60 have been satisfied as of the date of the acquisition of
such Certificates. In addition, so long as the Class B, Class C, Class D, Class
E and Class F Certificates are registered in the name of Cede & Co., as nominee
of DTC, any purchaser of such Certificates will be deemed to have represented
by such purchase that either: (a) such purchaser is not a Plan and is not
purchasing such Certificates by or on behalf of, or with assets of, any Plan or
(b) the purchase of any such Certificate by or on behalf of, or with assets of,
any Plan is permissible under applicable law, will not result in any non-exempt
prohibited transaction under ERISA or Section 4975 of the Code, and will not
subject the Depositor, the Trustee, the Fiscal Agent or the Servicer to any
obligation in addition to those undertaken in the Pooling and Servicing
Agreement, and the following conditions are met: (a) the source of funds used
to purchase such Certificate is an "insurance company general account" (as such
term is defined in PTCE 95-60) and (b) the conditions set forth in Sections I
and III of PTCE 95-60 have been satisfied as of the date of the acquisition of
such Certificates. See "ERISA Considerations -- Representation From Investing
Plans" in the Prospectus.
Any Plan fiduciary or other person considering whether to purchase an
Offered Certificate on behalf of or with assets of a Plan should consult with
its counsel regarding the applicability of the fiduciary responsibility
provisions of ERISA and the prohibited transaction provisions of ERISA and
Section 4975 of the Code to such investment and the availability of the
Exemption or any other prohibited transaction exemption in connection
therewith. See "ERISA Considerations" in the Prospectus.
S-91
<PAGE>
INDEX OF PRINCIPAL TERMS
<TABLE>
<S> <C>
Accrued Certificate Interest ................ S-65
ADA ......................................... S-27
Additional Trust Fund Expenses .............. S-68
Advances .................................... S-54
AIMCO ....................................... S-41
AIMCO Loan Borrower ......................... S-40
AIMCO Loans ................................. S-40
AIMCO Properties ............................ S-40
Alliance DG ................................. S-43
Alliance Mezzanine Borrower ................. S-44
Alliance Mezzanine Lender ................... S-44
Alliance Mezzanine Loan ..................... S-44
Alliance Portfolio Loan ..................... S-43
Alliance Portfolio Properties ............... S-43
Allocated Principal Amount .................. S-43
Andrews Facility ............................ S-36
Anticipated Repayment Date .................. S-11
Appraisal Reduction Amount .................. S-69
ARD Loans ................................... S-11
Assumed Final Distribution Date ............. S-2
Assumed Monthly Payment ..................... S-66
Available Distribution Amount ............... S-63
Balloon Loans ............................... S-10
Balloon Payment ............................. S-10
Balloon Payment Interest Excess ............. S-54
Balloon Payment Interest Shortfall .......... S-54
CBE ......................................... S-81
CEDEL ....................................... S-9
CEDEL Participants .......................... S-60
Centre Re ................................... S-33
Certificates ................................ 1
Class ....................................... 1
Class A Certificates ........................ 1, S-58
Class X Components .......................... S-61
Clearance Cooperative ....................... S-60
Collection Period ........................... S-63
Comparative Financial Status Report ......... S-71
Consulting Advisor .......................... S-35
Consulting Advisor List ..................... S-35
Controlling Class ........................... S-52
Corporate Trust Office ...................... S-73
Corrected Mortgage Loan ..................... S-50
CPR ......................................... S-76
Cross-Collateralized Mortgage Loans ......... S-26
Cut-off Date Balance ........................ S-29
Defeasance Collateral ....................... S-31
Defeasance Option ........................... S-12
Deleted Mortgage Loan ....................... S-47
Delinquent Loan Status Report ............... S-70
Delivery Date ............................... 1
Depositories ................................ S-59
</TABLE>
S-92
<PAGE>
<TABLE>
<S> <C>
Determination Date .......................... S-63
Discount Rate ............................... S-66
Discount Rate Fraction ...................... S-66
Distributable Certificate Interest .......... S-65
Distribution Date ........................... S-8
DMG ......................................... 1
DTC Registered Certificates ................. S-9
Emergency Advance ........................... S-54
Euroclear ................................... S-9
Euroclear Operator .......................... S-60
Euroclear Participants ...................... S-60
Excess Interest ............................. S-11
Fiscal Agent ................................ S-73
Fitch IBCA .................................. S-18
Form 8-K .................................... S-50
GACC ........................................ S-8
GACC Mortgage Loans ......................... S-29
GMACCM ...................................... S-8
GMACCM Mortgage Loans ....................... S-29
HCFP ........................................ S-33
HCFP Loan ................................... S-39
Historical Loan Modification Report ......... S-70
Historical Loss Estimate Report ............. S-71
Initial Pool Balance ........................ S-2
Interest Reserve Account .................... S-67
Interest Reserve Loans ...................... S-67
LaSalle ..................................... S-73
Lehman Brothers ............................. 1
Liquidation Fee ............................. S-53
Liquidation Fee Rate ........................ S-53
Lockbox Account ............................. S-30
LOP ......................................... S-77
Madison Clearing Account .................... S-43
Madison Fee Holder .......................... S-42
Madison Renaissance Borrower ................ S-42
Madison Renaissance Franchisor .............. S-43
Madison Renaissance Loan .................... S-42
Madison Renaissance Manager ................. S-43
Madison Renaissance Mortgage ................ S-42
Madison Renaissance Property ................ S-42
MAI ......................................... S-45
Management Agreements ....................... S-39
Marriott .................................... S-42
Marriott Guaranty ........................... S-42
Master Servicer ............................. S-51
Maturity Assumptions ........................ S-76
Modified Mortgage Loan ...................... S-70
Monthly Payments ............................ S-29
Moody's ..................................... S-18
Mortgage Asset Pool ......................... S-2
Mortgage Asset Seller ....................... S-29
Mortgage Loan Purchase Agreement ............ S-29
Mortgage Loan Sellers ....................... S-8
</TABLE>
S-93
<PAGE>
<TABLE>
<S> <C>
Mortgage Loans ...................................... S-2
Net Aggregate Prepayment Interest Shortfall ......... S-65
Net Mortgage Rate ................................... S-62
NOI Adjustment Worksheet ............................ S-71
Offered Certificates ................................ 1
Operating Statement Analysis ........................ S-71
Participation ....................................... S-34
Pass-Through Rate ................................... S-62
Permitted Encumbrances .............................. S-48
Phase I ............................................. S-20
Phase II ............................................ S-20
P&I Advance ......................................... S-16
Plan ................................................ S-90
Pooling and Servicing Agreement ..................... S-12
Prepayment Interest Excess .......................... S-54
Prepayment Interest Shortfall ....................... S-54
Principal Allocation Fraction ....................... S-66
Principal Balance Certificates ...................... S-2
Principal Distribution Amount ....................... S-65
Principal Window .................................... S-6
PTCE ................................................ S-91
Purchase Price ...................................... S-46
Qualifying Substitute Mortgage Loan ................. S-47
Rated Final Distribution Date ....................... S-89
Rating Agencies ..................................... S-18
Realized Losses ..................................... S-68
Reimbursement Rate .................................. S-69
Related Proceeds .................................... S-54
Release Date ........................................ S-31
REMIC I ............................................. S-2
REMIC II ............................................ S-2
REMIC III ........................................... S-2
REMIC Regular Certificates .......................... 1, S-58
REMIC Residual Certificates ......................... 1, S-58
Renaissance Management Agreement .................... S-42
Renaissance Manager ................................. S-42
Renaissance Orlando Hotel ........................... S-41
Renaissance Orlando Hotel Loan ...................... S-41
Renaissance Techworld Borrower ...................... S-41
Renaissance Techworld Borrower Members .............. S-42
Renaissance Techworld Loan .......................... S-41
Renaissance Techworld Mezzanine Loan ................ S-42
Renaissance Techworld Property ...................... S-41
REO Account ......................................... S-57
REO Status Report ................................... S-71
REO Tax ............................................. S-56
Replacement Mortgage Loan ........................... S-47
Replacement Special Servicer ........................ S-51
Required Appraisal Loan ............................. S-69
Revised Rate ........................................ S-30
Rules ............................................... S-59
Seller Note ......................................... S-40
Sellers ............................................. S-36
</TABLE>
S-94
<PAGE>
<TABLE>
<S> <C>
Senior Certificates ......................... 1, S-58
Senior Living ............................... S-33
Senior Living Account Properties ............ S-33
Senior Living Additional Debt ............... S-40
Senior Living Borrowers ..................... S-33
Senior Living Leasehold Mortgages ........... S-33
Senior Living Loan .......................... S-33
Senior Living Manager ....................... S-39
Senior Living Manager Loan .................. S-39
Senior Living Members ....................... S-34
Senior Living Mortgaged Properties .......... S-33
Senior Living Mortgages ..................... S-33
Senior Living Note Rate ..................... S-33
Senior Living Properties .................... S-33
Senior Living Subrogation Agreement ......... S-34
Senior Living Surety ........................ S-33
Senior Living Surety Bond ................... S-33
Senior Living Surety Bond Amount ............ S-33
Senior Living Surety Default ................ S-35
Senior Living Trust Agreement ............... S-33
Senior Living Trust Collateral .............. S-33
Senior Living Trust Secured Parties ......... S-33
Senior Living Trustee ....................... S-33
Servicer Watch List ......................... S-71
Servicing Advances .......................... S-54
Servicing Fee ............................... S-52
Servicing Fee Rate .......................... S-52
Servicing Standard .......................... S-50
SLP Illinois ................................ S-33
Special Servicing Event ..................... S-50
Special Servicing Fee ....................... S-52
Specially Serviced Mortgage Loan ............ S-50
Stated Principal Balance .................... S-61
Subordinate Certificates .................... 1, S-58
Substitution Shortfall Amount ............... S-47
Terms and Conditions ........................ S-60
Trust Fund .................................. S-2
Trustee Reports ............................. S-70
Underwriters ................................ 1
Underwriting Agreement ...................... S-88
Voting Rights ............................... S-72
Weighted Average Net Mortgage Rate .......... S-62
Withheld Amounts ............................ S-67
Workout Fee ................................. S-52
Workout Fee Rate ............................ S-52
YMP ......................................... S-77
</TABLE>
S-95
<PAGE>
ANNEX A
CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS
GENERAL
The schedule and tables appearing in this Annex A set forth certain
information with respect to the Mortgage Loans and Mortgaged Properties. Such
information is presented, where applicable, as of the Cut-off Date. The
statistics in such schedule and tables were derived, in many cases, from
information and operating statements furnished by or on behalf of the
respective borrowers. Such information and operating statements were generally
unaudited and have not been independently verified by the Depositor or the
Underwriters or any of their respective affiliates or any other person. The sum
of the amounts in any column of any of the tables of this Annex A may not equal
the indicated total under such column due to rounding.
Net income for a Mortgaged Property as determined in accordance with
generally accepted accounting principles ("GAAP") would not be the same as the
stated Underwritten Net Cash Flow for such Mortgaged Property as set forth in
the following schedule or tables. In addition, Underwritten Net Cash Flow is
not a substitute for or comparable to operating income as determined in
accordance with GAAP as a measure of the results of a property's operations or
a substitute for cash flows from operating activities determined in accordance
with GAAP as a measure of liquidity. No representation is made as to the future
net cash flow of the Mortgaged Properties, nor is the Underwritten Net Cash
Flow set forth herein with respect to any Mortgaged Property intended to
represent such future net cash flow.
In the schedule and tables set forth in this Annex A, with respect to
Mortgage Loans evidenced by one Mortgage Note, but secured by multiple
Mortgaged Properties, for certain purposes, including Underwritten Net Cash
Flow, separate amounts for each such related Mortgaged Property are shown.
DEFINITIONS
For purposes of the Prospectus Supplement, including the schedule and
tables in this Annex A, the indicated terms shall have the following meanings,
modified accordingly, by reference to the "Certain Loan Payment Terms" below
and footnotes to the schedules that follow:
1. "Underwritten Net Cash Flow", "Underwritten NCF" or "UW NCF" with
respect to any Mortgaged Property, means an estimate of cash flow available
for debt service in a typical year of stable, normal operations. In
general, it is the estimated revenue derived from the use and operation of
such Mortgaged Property less the sum of estimated (a) operating expenses
(such as utilities, administrative expenses, repairs and maintenance,
management and franchise fees and advertising), (b) fixed expenses (such as
insurance, real estate taxes and, if applicable, ground lease payments) and
(c) with the exception of skilled nursing, independent/assisted living and
hospital properties, capital expenditures and reserves for capital
expenditures, including tenant improvement costs and leasing commissions.
Underwritten Net Cash Flow generally does not reflect interest expense and
non-cash items such as depreciation and amortization.
In determining Underwritten Net Cash Flow for a Mortgaged Property, the
Mortgage Loan Sellers generally relied on rent rolls and/or other generally
unaudited financial information provided by the respective borrowers; in
some cases the appraisal and/or local market information was the primary
basis for the determination. From that information, the Mortgage Loan
Sellers calculated stabilized estimates of cash flow that took into
consideration historical financial statements, material changes in the
operating position of a Mortgaged Property of which the applicable Mortgage
Loan Seller was aware (e.g., newly signed leases, expirations of "free
rent" periods and market rent and market vacancy data), and estimated
capital expenditures, leasing commission and tenant improvement reserves.
In certain cases, the applicable Mortgage Loan Seller's estimate of
Underwritten Net Cash Flow reflected differences from the information
contained in the operating statements obtained from the respective
borrowers (resulting in either an increase or decrease in the estimate of
Underwritten Net Cash Flow derived therefrom) based upon the Mortgage Loan
A-1
<PAGE>
Seller's own analysis of such operating statements and the assumptions
applied by the respective borrowers in preparing such statements and
information. In certain instances, for example, property management fees
and other expenses may have been included in the calculation of
Underwritten Net Cash Flow even though such expense may not have been
reflected in actual historic operating statements. In most of those cases,
the information was annualized, with certain adjustments for items deemed
not appropriate to be annualized, before using it as a basis for the
determination of Underwritten Net Cash Flow. No assurance can be given with
respect to the accuracy of the information provided by any borrowers, or
the adequacy of the procedures used by any Mortgage Loan Seller in
determining the presented operating information.
2. "Underwritten NOI" means Underwritten Net Cash Flow before deducting
for capital expenditures, replacement reserves, tenant improvements and
leasing commissions.
3. "1996 NOI" means the net operating income for a Mortgaged Property as
established by information provided by the related borrower, except that in
certain cases such net operating income has been adjusted by removing
certain nonrecurring expenses and revenues or by certain other
normalizations and in certain cases may reflect annualization of partial
year numbers. 1996 NOI does not necessarily reflect accrual of certain
costs such as real estate taxes and capital expenditures and does not
reflect non-cash items such as depreciation or amortization. In most cases,
no attempt was made to verify the accuracy of any information provided by
each borrower or to reflect changes in net operating income that may have
occurred since the date of the information provided by each borrower for
the related Mortgaged Property.
4. "1997 NOI" means the net operating income for 1997, calculated in a
manner consistent with 1996 NOI.
5. "Annual Debt Service" means, for any Mortgage Loan 12 times the
Monthly Payment in effect as of the Cut-off Date or, for any Mortgage Loans
that pay interest only for a period of time, 12 times the Monthly Payment
in effect at the end of such period.
6. "UW NCF DSCR" means, with respect to any Mortgage Loan, or with
respect to a Mortgage Loan evidenced by one Mortgage Note, but secured by
multiple Mortgaged Properties, (a) the Underwritten Net Cash Flow for the
Mortgaged Property, divided by (b) the Annual Debt Service for such
Mortgage Loan. With respect to Cross-Collateralized Loans, the UW NCF DSCR
set forth in Annex A is based upon the combined UW NCF and Annual Debt
Service for all such Cross-Collateralized Loans. "UW NCF DSCR" and "UW NOI
DSCR" are collectively referred to as "Underwritten DSCRs".
In general, debt service coverage ratios are used by income property
lenders to measure the ratio of (a) cash currently generated by a property
that is available for debt service to (b) required debt service payments.
However, debt service coverage ratios only measure the current, or recent,
ability of a property to service mortgage debt. If a property does not
possess a stable operating expectancy (for instance, if it is subject to
material leases that are scheduled to expire during the loan term and that
provide for above-market rents and/or that may be difficult to replace), a
debt service coverage ratio may not be a reliable indicator of a property's
ability to service the mortgage debt over the entire remaining loan term.
The Underwritten DSCRs are presented herein for illustrative purposes only
and, as discussed above, are limited in their usefulness in assessing the
current, or predicting the future, ability of a Mortgaged Property to
generate sufficient cash flow to repay the related Mortgage Loan.
Accordingly, no assurance can be given, and no representation is made, that
the Underwritten DSCRs accurately reflects that ability.
7. "Appraised Value" means, for any Mortgaged Property, the appraiser's
adjusted value as stated in the most recent third party appraisal or market
analysis, available to the Depositor. In certain cases, the appraiser's
adjusted value takes into account certain repairs or stabilization of
operations. In those cases in which the appraiser assumed the completion of
repairs, such repairs were either completed prior to the Delivery Date or
the related Mortgage Loan Seller has taken
A-2
<PAGE>
reserves sufficient to complete such repairs. No representation is made
that any such value would approximate either the value that would be
determined in a current appraisal of the related Mortgaged Property or the
amount that would be realized upon a sale.
8. "Cut-off Date Loan-to-Value Ratio," "Loan-to-Value Ratio" or "Cut-off
Date LTV" means, with respect to any Mortgage Loan, or with respect to a
Mortgage Loan evidenced by one Mortgage Note, but secured by multiple
Mortgaged Properties, (a) the Cut-off Date Balance of such Mortgage Loan
divided (b) by the Appraised Value of the Mortgaged Property or Mortgaged
Properties.
9. "Square Feet" or "Sq. Ft." means, in the case of a Mortgaged Property
operated as a retail center, office or medical office complex,
industrial/warehouse facility, parking garage or other special purpose
property, combination retail office facility, the square footage of the net
rentable or leasable area.
10. "Units" means: (i) in the case of a Mortgaged Property operated as
multifamily housing, the number of apartments, regardless of the size of or
number of rooms in such apartment; (ii) in the case of a Mortgaged Property
operated as a skilled nursing or congregate care facility, the number of
beds; (iii) in the case of a Mortgaged Property constituting a mobile home
park, the number of pads; and (iv) in the case of a Mortgaged Property
operated as a hospitality property, the number of guest rooms.
11. "Occupancy Percentage" means the percentage of Square Feet or Units,
as the case may be, of the Mortgaged Property that was occupied or leased
or, in the case of certain properties, average units so occupied over a
specified period, as of a specified date (identified on this Annex A as the
"Occupancy as of Date"), as specified by the borrower or as derived from
the Mortgaged Property's rent rolls or, with respect to certain skilled
nursing, congregate care and assisted living facilities, census reports,
operating statements or appraisals or as determined by a site inspection of
the Mortgaged Property. Information in this Annex A concerning the "Largest
Tenant" is presented as of the same date as of which the Occupancy
Percentage is specified.
12. "Balloon or ARD Balance" means, with respect to any Balloon Loan or
ARD Loan, the principal amount that will be due at maturity or on the
Anticipated Repayment Date for such Balloon Loan.
13. "Scheduled Maturity Date or ARD LTV" means, with respect to any
Balloon Loan or ARD Loan, the Maturity Balance for such Balloon Loan or ARD
Balance divided by the Appraised Value of the related Mortgaged Property.
14. "Mortgage Rate" means, with respect to any Mortgage Loan, the
Mortgage Rate in effect as of the Cut-off Date.
15. "Servicing Fee" for each Mortgage Loan includes the compensation
payable in respect of the servicing of such Mortgage Loan (which includes
the Master Servicing Fee Rate) and the compensation payable to the Trustee.
The "Master Servicing Fee Rate" and the "Servicing Fee Rate" with respect
to the Mortgage Loan from each Loan Source (other than Loan GMAC 1130,
which has a Servicing Fee Rate of 0.04275%) are set forth below:
<TABLE>
<CAPTION>
LOAN SOURCE MASTER SERVICING FEE RATE SERVICING FEE RATE
- ------------- --------------------------- -------------------
<S> <C> <C>
GACC 0.02000% 0.07275%
GMACCM 0.02000% 0.12775%
</TABLE>
16. "Prepayment Provisions" for each Mortgage Loan are: "Lock" means the
duration of lockout period; "Defeasance" means the duration of any
defeasance period; " (greater than) 1% or YM" means the greater of the
applicable yield maintenance charge and one percent of the amount being
prepaid at such time; a fixed percentage means a flat percentage of the
amount being prepaid. The number following the "/" is the number of payment
dates for which the related call protection provision is in effect,
inclusive of the maturity date for calculation purpose only.
A-3
<PAGE>
17. "Term to Maturity" means, with respect to any Mortgage Loan, the
remaining term, in months, from the Cut-off Date to the earlier of the
related Maturity Date or Anticipated Repayment Date.
CERTAIN LOAN PAYMENT TERMS
The indicated Mortgage Loans have the following payment terms:
Interest Only Loans
Loan Number GMAC1020. The Mortgage Loan requires Monthly Payments of
interest only in the amount of $256,875.00 (calculated using a 30/360 interest
accrual method) from February 1, 1998 through January 1, 2001. Commencing on
February 1, 2001 and through maturity, Monthly Payments of principal and
interest in the amount of $305,129.84 (calculated using an actual/360 interest
accrual method) are required.
Loan Number GMAC1510. The Mortgage Loan requires Monthly Payments of
interest only in the amount of $33,411.71 from February 1, 1998 through January
1, 2000. Commencing on February 1, 2000 and through maturity, Monthly Payments
of principal and interest in the amount of $37,696.86 are required.
Loan Number GMAC2310. The Mortgage Loan requires Monthly Payments of
interest only in the amount of $17,851.75 from February 1, 1998 through January
1, 2000. Commencing on February 1, 2000 and through maturity, Monthly Payments
of principal and interest in the amount of $20,301.31 are required.
SPLIT AMORTIZATION LOANS
Loan Number GMAC4055. The Mortgage Loan requires Monthly Payments due
beginning March 10, 1998 in the amount of $50,000.00 per month and continue at
this level through February 10, 2003. Beginning March 10, 2003, payments
increase to $58,333.33 per month through January 10, 2008. The remaining
balance is due on February 10, 2008.
CERTAIN OTHER LOAN CHARACTERISTICS
EARN-OUT LOANS
Loan Number GMAC1040. The Mortgage Loan requires $10,000,000.00 of the
original Loan Amount to be reserved in a Lease Contingency Escrow which is
eligible to be drawn when the Borrower has fully complied with and satisfied
certain leasing conditions. Avon Products, Inc. has entered into a lease and,
if it occupies its leased premises and commences to pay rent under such lease,
and if no default or event of default under the loan documents exists, the
Lease Contingency Escrow will be eligible to be drawn by the Borrower. The
Lease Contingency escrow will be used to partially prepay the Mortgage Loan to
the extent that the Mortgaged Property does not satisfy the draw requirements.
Prepayment penalties will apply.
Loan Number GMAC1070. The Mortgage Loan requires $4,500,000.00 of the
original Loan Amount to be reserved in an earn-out escrow which is eligible to
be drawn within 12 months after origination of the Mortgage Loan. Leases have
been signed with three tenants such that if the tenants commence occupancy,
commence paying rent and substantially complete leasehold improvements, and no
default or event of default under the applicable loan documents exists, the
Borrower would be entitled to draw all or a portion of the earn-out escrow. The
earn-out escrow will be used to partially prepay the Mortgage Loan to the
extent that the Mortgaged Property does not satisfy the draw requirements.
Prepayment penalties will apply.
Loan Number GMAC1320. The Mortgage Loan requires $350,000.00 of the
original Loan Amount to be reserved in an earn-out escrow which is eligible to
be drawn no sooner than 180 days after origination of the Mortgage Loan. The
earn-out escrow will be used to partially prepay the Mortgage Loan to the
extent that the Mortgaged Property does not satisfy the draw requirements.
Prepayment penalties will apply.
A-4
<PAGE>
Loan Number GMAC2420. The Mortgage Loan requires $250,000.00 of the
original Loan Amount to be reserved in an earn-out escrow which is eligible to
be drawn no sooner than 90 days after origination of the Mortgage Loan. The
earn-out escrow will be used to partially prepay the Mortgage Loan to the
extent that the Mortgaged Property does not satisfy the draw requirements.
Prepayment penalties will apply.
Loan Number GMAC2560. The Mortgage Loan requires $250,000.00 of the
original Loan Amount to be reserved in an earn-out escrow which is eligible to
be drawn no sooner than six months after origination of the Mortgage Loan. The
earn-out escrow will be used to partially prepay the Mortgage Loan to the
extent that the Mortgaged Property does not satisfy the draw requirements.
Prepayment penalties will apply.
Loan Number GMAC3320. The Mortgage Loan requires $500,000.00 of the
original Loan Amount to be reserved in an earn-out escrow which is eligible to
be drawn no sooner than six months after origination of the Mortgage Loan. The
earn-out escrow will be used to partially prepay the Mortgage Loan to the
extent that the Mortgaged Property does not satisfy the draw requirements.
Prepayment penalties will apply.
Loan Number GMAC3360. The Mortgage Loan requires $130,000.00 of the
original Loan Amount to be reserved in a Debt Service Reserve escrow which is
eligible to be drawn no sooner than six months after origination of the
Mortgage Loan. The Debt Service Reserve escrow will be used to partially prepay
the Mortgage Loan to the extent that the Mortgaged Property does not satisfy
the draw requirements. Prepayment penalties will apply.
EXTENSION OPTION LOANS
Loan Numbers GMAC2240, GMAC2540, GMAC3070 and GMAC3260. These Mortgage
Loans contain an option allowing the Borrower to extend the maturity date for
one year upon 30 days' notice.
CERTAIN RESERVES
For the following AIMCO Loans, if the DSCR falls below 1.50, an annual
required reserve deposit as detailed in the following table is required:
<TABLE>
<S> <C> <C> <C>
GMAC1230 ......... $146,100 GMAC2340 ......... $ 58,800
GMAC1300 ......... $116,100 GMAC2350 ......... $ 63,000
GMAC1330 ......... $ 83,400 GMAC2400 ......... $ 62,400
GMAC1360 ......... $105,600 GMAC2450 ......... $ 69,900
GMAC1390 ......... $ 87,900 GMAC2470 ......... $ 45,600
GMAC1530 ......... $ 60,000 GMAC2490 ......... $ 55,200
GMAC2040 ......... $ 78,300 GMAC2520 ......... $ 55,200
GMAC2070 ......... $ 64,800 GMAC2580 ......... $ 37,500
GMAC2090 ......... $ 67,800 GMAC2590 ......... $ 32,400
GMAC2100 ......... $ 76,800 GMAC2600 ......... $ 79,200
GMAC2120 ......... $ 93,000 GMAC2610 ......... $ 36,900
GMAC2150 ......... $ 81,000 GMAC3050 ......... $ 65,400
GMAC2160 ......... $ 60,000 GMAC3100 ......... $ 25,800
GMAC2200 ......... $ 36,000 GMAC3180 ......... $ 40,200
GMAC2270 ......... $ 40,800 GMAC3200 ......... $ 25,200
GMAC2290 ......... $ 69,600 GMAC3210 ......... $ 31,200
GMAC2300 ......... $ 41,400
</TABLE>
In lieu of monthly payments to a repair reserve, the following Mortgage
Loans require that the Borrower must provide evidence that $250 per bed has
been spent annually on repairs and replacements: GMAC1050, GMAC1060, GMAC1150,
GMAC1210, GMAC1350, GMAC1400, GMAC1470, GMAC2240, GMAC2540, GMAC3060, GMAC3070,
GMAC3260 and GMAC3340
A-5
<PAGE>
Loan Number GMAC1010. The Mortgage Loan requires $250 per available bed
for replacement reserves to be deposited with the Senior Living Trustee.
Loan Number GMAC1370. The Mortgage Loan requires that the Borrower must
provide evidence of $200 per bed spent annually on repairs and replacements
required under the Loan Agreement.
Loan Number GMAC2210. The Mortgage Loan requires that the Borrower must
provide evidence of $400 per bed spent annually on repairs and replacements
required under the Loan Agreement.
Loan Number GMAC1130. The Mortgage Loan requires monthly reserve payments
in the amount equal to four percent (4%) of the total gross revenues from the
second preceding calendar month.
Loan Number GMAC1420. The Mortgage Loan requires monthly reserve payments
in the amount equal to one-twelfth (1/12th) of five percent (5%) of the
operating income during the preceding year.
Loan Number GMAC1500. The Mortgage Loan requires monthly reserve payments
in the amount equal to one-twelfth (1/12th) of five percent (5%) of the gross
income during the preceding year.
Loan Number GMAC3330. The Mortgage Loan requires monthly reserve payments
in the amount equal to one-twelfth (1/12th) of four and one-half percent (4.5%)
of gross income derived from prior year.
Loan Number GMAC3370. The Mortgage Loan requires monthly reserve payments
in the amount equal to one-twelfth (1/12th) of four percent (4%) of gross
revenue derived from the prior year.
Loan Number GMAC3380. The Mortgage Loan requires monthly reserve payments
in the amount equal to one-twelfth (1/12th) of four and one-half percent (4.5%)
of gross income derived from prior year.
Loan Number GMAC3390. The Mortgage Loan requires monthly reserve payments
in the amount equal to one-twelfth (1/12th) of four and one-half percent (4.5%)
of gross income derived from prior year.
Loan Number GMAC3430. The Mortgage Loan requires monthly reserve payments
in the amount equal to one-twelfth (1/12th) of four percent (4.0%) of gross
income derived from the preceding year.
Loan Number GMAC4060. The Mortgage Loan requires monthly reserve payments
in an amount equal to one-twelfth (1/12th) of three percent (3%) of gross
revenues derived in 1998, four percent (4%) of gross revenue derived in years
1999 to 2001 and five percent (5%) of gross revenue years 2002 and through
term.
Loan Number GMAC1090. In addition to an initial deposit of $1,350,000 into
a tenant improvement and leasing commission reserve, the Mortgage Loan requires
monthly deposits of $22,222.00 into a tenant improvement and leasing commission
reserve for the first eighteen (18) months of the mortgage term.
Loan Number GMAC1250. In addition to an initial deposit of $350,000 into a
tenant improvement and leasing commission holdback reserve, the Mortgage Loan
requires monthly deposits of $3,600.00 into a tenant improvement and leasing
commission reserve until reserve totals $136,000.
Loan Number GMAC2020. The Mortgage Loan requires monthly deposits of
$5,098.16 into a repair reserve until reserve totals $300,000.
Loan Number GMAC2330. In lieu of monthly payments to a tenant improvement
and leasing commission reserve, an initial deposit of $100,000 tenant
improvement and leasing commission reserve was established. In the event that
the amount on deposit in such reserve drops below $100,000, monthly payments of
$2,600.00 will be required until such balance totals $100,000.
Loan Number GMAC2410. The Mortgage Loan requires monthly tenant
improvement and leasing commission of $4,965.00. In the 42nd month of the
Mortgage, monthly payments are reduced to $3,161.00.
Loan Number GMAC2460. The Mortgage Loan requires monthly deposits of
$416.67 into a tenant improvement and leasing commission reserve for the first
two years; $1,500.00 monthly during years three, four, and five; $2,083.88
monthly for years six through 12.
A-6
<PAGE>
Loan Number GMAC3250. In lieu of monthly payments to a tenant improvement
and leasing commission reserve, an initial $35,000 reserve was established. The
Mortgage Loan requires that an amount of at least $35,000 be maintained in the
tenant improvement and leasing commission reserve.
Loan Number GMAC 3310. Beginning in year five, the Mortgage Loan requires
an annual deposit of $45,000 plus a monthly deposit equal to the monthly rental
increase above the four-year rent payment into the tenant improvement and
leasing commission reserve. In no event will the annual deposit exceed $55,000.
Loan Number GMAC3560. The Mortgage Loan requires monthly payments to a
repair reserve only after the occurrence of an event of default or if the
related Mortgaged Property is not maintained on a commercially reasonable
basis.
Loan Number GMAC3590. The Mortgage Loan requires monthly deposits of
$1,562.50 into a tenant improvement and leasing commission reserve until
reserve totals $75,000.
YIELD MAINTENANCE CALCULATION TYPE
Prepayment premiums for Mortgage Loans with Yield Maintenance Type 1
generally equal the product of (A) the principal amount being prepaid
(expressed as a percentage of the Stated Principal Balance outstanding assuming
no prepayments have been made) and the (B) excess, if any, as of the date of
determination of (i) the present value (discounted with the applicable Discount
Rate as defined herein plus, in the case of Loan GMAC 1030, a spread of 0.50%)
of the remaining monthly payments that would have been made in respect of the
Mortgage Loan until its maturity or ARD date, as applicable, assuming no
prepayments have been or will be made over (ii) the Stated Principal Balance
outstanding assuming no prepayments have been made.
Prepayment premiums for Mortgage Loans with Yield Maintenance Type 2 are
generally equal to the present value (discounted with the applicable Discount
Rate as defined herein plus the Spread as shown in this table) of a stream of
Yield Loss Amounts (as defined below) over a term of the Mortgage Loan's
weighted average life or remaining months to maturity or ARD date, as
applicable. The Yield Loss Amount is equal to the product of (A) 1/12, (B) the
amount of principal being prepaid and (C) the difference between (i) the
Mortgage Rate and (ii) the applicable Discount Rate as defined herein.
<TABLE>
<CAPTION>
YIELD YIELD YIELD
LOAN MAINTENANCE LOAN MAINTENANCE LOAN MAINTENANCE
NUMBER TYPE NUMBER TYPE NUMBER TYPE
- ----------------- ------------ ----------------- ------------ ----------------- -----------------
<S> <C> <S> <C> <C> <C>
BL9703 N/A TA2090 N/A GMAC4040 N/A
TA2271 N/A TA2088 N/A GMAC4045 N/A
TA3078 N/A TA1799 N/A GMAC4050 N/A
TA0831 N/A TA2414 N/A GMAC4055 N/A
TA1432 N/A TA1922 N/A GMAC4060 N/A
TA0146 N/A TA2394 N/A GMAC4100 N/A
WF9701 N/A TA1898 N/A GMAC4110 N/A
TA2094 N/A TA1738 N/A GMAC1020 1
TA2667 N/A TA2573 N/A GMAC1030 1
TA0541 N/A GMAC1010 N/A GMAC1040 1
TA1936 N/A GMAC1130 N/A GMAC1070 1
TA2921 N/A GMAC1400 N/A GMAC1080 1
TA1658 N/A GMAC1450 N/A GMAC1090 1
WF9703 N/A GMAC2020 N/A GMAC1110 1
TA1900 N/A GMAC3370 N/A GMAC1120 1
TA1772 N/A GMAC3380 N/A GMAC1140 1
GA0175 N/A GMAC3390 N/A GMAC1180 1
TA0814 N/A GMAC3430 N/A GMAC1190 1
TA1585 N/A GMAC4010 N/A GMAC1220 1
</TABLE>
A-7
<PAGE>
<TABLE>
<CAPTION>
YIELD YIELD YIELD
LOAN MAINTENANCE LOAN MAINTENANCE LOAN MAINTENANCE
NUMBER TYPE NUMBER TYPE NUMBER TYPE
- ----------------- ------------ ----------------- ------------ ----------------- ------------
<S> <C> <C> <C> <C> <C>
GMAC1240 1 GMAC3020 1 GMAC1360 2
GMAC1250 1 GMAC3030 1 GMAC1370 2
GMAC1270 1 GMAC3040 1 GMAC1390 2
GMAC1290 1 GMAC3080 1 GMAC1420 2
GMAC1310 1 GMAC3120 1 GMAC1470 2
GMAC1320 1 GMAC3140 1 GMAC1500 2
GMAC1340 1 GMAC3150 1 GMAC1530 2
GMAC1380 1 GMAC3160 1 GMAC2040 2
GMAC1410 1 GMAC3190 1 GMAC2070 2
GMAC1440 1 GMAC3220 1 GMAC2090 2
GMAC1480 1 GMAC3230 1 GMAC2100 2
GMAC1490 1 GMAC3240 1 GMAC2120 2
GMAC1510 1 GMAC3250 1 GMAC2150 2
GMAC1520 1 GMAC3260 1 GMAC2160 2
GMAC2030 1 GMAC3270 1 GMAC2200 2
GMAC2050 1 GMAC3280 1 GMAC2210 2
GMAC2060 1 GMAC3290 1 GMAC2240 2
GMAC2130 1 GMAC3300 1 GMAC2270 2
GMAC2140 1 GMAC3310 1 GMAC2290 2
GMAC2180 1 GMAC3320 1 GMAC2300 2
GMAC2190 1 GMAC3350 1 GMAC2340 2
GMAC2260 1 GMAC3360 1 GMAC2350 2
GMAC2310 1 GMAC3400 1 GMAC2400 2
GMAC2320 1 GMAC3410 1 GMAC2450 2
GMAC2330 1 GMAC3450 1 GMAC2470 2
GMAC2360 1 GMAC3470 1 GMAC2490 2
GMAC2370 1 GMAC3510 1 GMAC2520 2
GMAC2380 1 GMAC3560 1 GMAC2580 2
GMAC2410 1 GMAC3590 1 GMAC2590 2
GMAC2420 1 GMAC4030 1 GMAC2600 2
GMAC2440 1 GMAC4080 1 GMAC2610 2
GMAC2460 1 GMAC4090 1 GMAC3050 2
GMAC2480 1 GMAC4120 1 GMAC3060 2
GMAC2500 1 GMAC4130 1 GMAC3070 2
GMAC2510 1 TA2456 2 GMAC3100 2
GMAC2530 1 GMAC1050 2 GMAC3180 2
GMAC2540 1 GMAC1150 2 GMAC3200 2
GMAC2550 1 GMAC1210 2 GMAC3210 2
GMAC2560 1 GMAC1230 2 GMAC3330 2
GMAC2570 1 GMAC1300 2 GMAC3340 2
GMAC2620 1 GMAC1330 2
GMAC2630 1 GMAC1350 2
</TABLE>
A-8
<PAGE>
<TABLE>
<CAPTION>
LOAN CONTROL LOAN
SELLER NUMBER NUMBER PROPERTY NAME
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
SENIOR LIVING PROPERTIES PORTFOLIO
GMACCM 17194 GMAC1010A Alderwood Health Care Center
GMACCM 17194 GMAC1010B Arrowood Residence
GMACCM 17194 GMAC1010C Aspenwood Health Care Center
GMACCM 17194 GMAC1010D Beechwood Health Care Center
- -----------------------------------------------------------------------------------------------------------------------------
GMACCM 17194 GMAC1010E Benton Healthcare Center
GMACCM 17194 GMAC1010F Boxwood Health Care Center
GMACCM 17194 GMAC1010G Cedarwood Health Care Center
GMACCM 17194 GMAC1010H Cherrywood Health Care Center
GMACCM 17194 GMAC1010I Cisne Health Care Center
- -----------------------------------------------------------------------------------------------------------------------------
GMACCM 17194 GMAC1010J Cottonwood Health Care Center
GMACCM 17194 GMAC1010K Dogwood Health Care Center
GMACCM 17194 GMAC1010L Enfield Healthcare Center
GMACCM 17194 GMAC1010M Firwood Health Care Center
GMACCM 17194 GMAC1010N Fondulac Woods Health Care Center
- -----------------------------------------------------------------------------------------------------------------------------
GMACCM 17194 GMAC1010O Ironwood Health Care Center
GMACCM 17194 GMAC1010P Jonesboro Healthcare Center
GMACCM 17194 GMAC1010Q Lindenwood Health Care Center
GMACCM 17194 GMAC1010R Locustwood Health Care Center
GMACCM 17194 GMAC1010S Magnolia Wood Health Care Center
- -----------------------------------------------------------------------------------------------------------------------------
GMACCM 17194 GMAC1010T Maplewood Health Care Center
GMACCM 17194 GMAC1010U McLeansboro Healthcare Center
GMACCM 17194 GMAC1010V Oakwood Health Care Center
GMACCM 17194 GMAC1010W Olivewood Health Care Center
GMACCM 17194 GMAC1010X Palmwood Health Care Center
- -----------------------------------------------------------------------------------------------------------------------------
GMACCM 17194 GMAC1010Y Pinewood Health Care Center
GMACCM 17194 GMAC1010Z Pittsfield Healthcare Center
GMACCM 17194 GMAC1010AA Rosiclare Healthcare Center
GMACCM 17194 GMAC1010AB Scotchwood Health Care Center
GMACCM 17194 GMAC1010AC Sprucewood Health Care Center
- -----------------------------------------------------------------------------------------------------------------------------
GMACCM 17194 GMAC1010AD Westabbe Healthcare Center
GMACCM 17194 GMAC1010AE Willow Wood Health Care Center
GMACCM 17194 GMAC1010AF Anahuac Healthcare Center
GMACCM 17194 GMAC1010AH Anson Healthcare Center
GMACCM 17194 GMAC1010AI Borger Healthcare Center
- -----------------------------------------------------------------------------------------------------------------------------
GMACCM 17194 GMAC1010AJ Canton Healthcare Center
GMACCM 17194 GMAC1010AK Carthage Healthcare Center
GMACCM 17194 GMAC1010AL Cedar Hill Healthcare Center
GMACCM 17194 GMAC1010AM Centerville Healthcare Center
GMACCM 17194 GMAC1010AN Childress Healthcare Center
- -----------------------------------------------------------------------------------------------------------------------------
GMACCM 17194 GMAC1010AO Claystone Healthcare Center
GMACCM 17194 GMAC1010AP Coleman Healthcare Center
GMACCM 17194 GMAC1010AQ Coronado Healthcare Center
GMACCM 17194 GMAC1010AR Country Inn Healthcare Center
GMACCM 17194 GMAC1010AS Cross Country Healthcare Center
- -----------------------------------------------------------------------------------------------------------------------------
GMACCM 17194 GMAC1010AT Eastland Healthcare Center
GMACCM 17194 GMAC1010AU Electra Healthcare Center
GMACCM 17194 GMAC1010AV Evergreen Healthcare Center
GMACCM 17194 GMAC1010AW Frankston Healthcare Center
GMACCM 17194 GMAC1010AX Garden Terrace Healthcare Center
- -----------------------------------------------------------------------------------------------------------------------------
GMACCM 17194 GMAC1010AY Gibson Healthcare Center
GMACCM 17194 GMAC1010AZ Gilmer Healthcare Center
GMACCM 17194 GMAC1010BA Graham Healthcare Center
GMACCM 17194 GMAC1010BB Graham Living Center
GMACCM 17194 GMAC1010BC Hamilton Healthcare Center
- -----------------------------------------------------------------------------------------------------------------------------
GMACCM 17194 GMAC1010BD Haskell Healthcare Center
GMACCM 17194 GMAC1010BE Hearne Healthcare Center
GMACCM 17194 GMAC1010BF Hill Country Healthcare Center
GMACCM 17194 GMAC1010BG Holiday Lodge Healthcare Center
GMACCM 17194 GMAC1010BH Jacksboro Healthcare Center
- -----------------------------------------------------------------------------------------------------------------------------
GMACCM 17194 GMAC1010BI Jacksonville Healthcare Center
GMACCM 17194 GMAC1010BJ Jeffrey Place Healthcare Center
GMACCM 17194 GMAC1010BK Kaufman Healthcare Center
GMACCM 17194 GMAC1010BL Kermit Healthcare Center
GMACCM 17194 GMAC1010BM Lake Jackson Healthcare Center
- -----------------------------------------------------------------------------------------------------------------------------
GMACCM 17194 GMAC1010BN Lamesa Healthcare Center
GMACCM 17194 GMAC1010BO Laporte Healthcare Center
GMACCM 17194 GMAC1010BP Lindale Healthcare Center
GMACCM 17194 GMAC1010BQ McKinney Healthcare Center
GMACCM 17194 GMAC1010BS Nederland Healthcare Center
- -----------------------------------------------------------------------------------------------------------------------------
GMACCM 17194 GMAC1010BT Olney Healthcare Center
GMACCM 17194 GMAC1010BU Overton Healthcare Center
GMACCM 17194 GMAC1010BV Palacios Healthcare Center
GMACCM 17194 GMAC1010BW Palestine Healthcare Center
- -----------------------------------------------------------------------------------------------------------------------------
GMACCM 17194 GMAC1010BX Paris Healthcare Center
GMACCM 17194 GMAC1010BY Red River Healthcare Center
GMACCM 17194 GMAC1010BZ Regency Manor Healthcare and Rehabilitation Center
GMACCM 17194 GMAC1010CA Renfro Healthcare Center
GMACCM 17194 GMAC1010CB Riverside Healthcare and Rehabilitation Center
- -----------------------------------------------------------------------------------------------------------------------------
GMACCM 17194 GMAC1010CC Roscoe Healthcare Center
GMACCM 17194 GMAC1010CD Rotan Healthcare Center
GMACCM 17194 GMAC1010CE Sage Healthcare Center
GMACCM 17194 GMAC1010CF Snyder Healthcare Center
GMACCM 17194 GMAC1010CG South Plains Healthcare Center
- -----------------------------------------------------------------------------------------------------------------------------
GMACCM 17194 GMAC1010CH Sweetwater Healthcare Center
GMACCM 17194 GMAC1010CI Throckmorton Healthcare Center
GMACCM 17194 GMAC1010CJ Valley View Healthcare Center
GMACCM 17194 GMAC1010CK Van Healthcare Center
GMAC1010 SENIOR LIVING PROPERTIES PORTFOLIO SUMMARY
- -----------------------------------------------------------------------------------------------------------------------------
GMACCM 17239 GMAC4060 Renaissance, Washington, D.C. Hotel
ALLIANCE PORTFOLIO
GACC 18 GA0175-1 Audobon Park Apartments
GACC 18 GA0175-2 Preston Valley Apartments
GACC 18 GA0175-3 Commerce Park Apartments
- -----------------------------------------------------------------------------------------------------------------------------
GACC 18 GA0175-4 The Falls on Clearwood Apartments
GACC 18 GA0175-5 The Forum Plaza Apartments
GACC 18 GA0175-6 The Holly Ridge Apartments
GACC 18 GA0175-7 The Remington Oaks Apartments
GACC 18 GA0175-8 The Somerset I & II Apartments
- -----------------------------------------------------------------------------------------------------------------------------
GA0175 ALLIANCE PORTFOLIO SUMMARY
GMACCM 16539 GMAC1130 The Madison, Renaissance Hotel
GMACCM 16937 GMAC1020 580 Fifth Avenue
GMACCM 16837 GMAC1030 Tamarack Village Shopping Center
LOUISIANA PORTFOLIO
- -----------------------------------------------------------------------------------------------------------------------------
GACC 1 BL9703-1 Polo Run Apartments
GACC 1 BL9703-2 Seasons Apartments
GACC 1 BL9703-3 Sunlake Apartments
GACC 1 BL9703-4 Windsong Apartments
GACC 1 BL9703-5 Woodlake II Apartments
- -----------------------------------------------------------------------------------------------------------------------------
BL9703 LOUISIANA PORTFOLIO SUMMARY
GMACCM 16547 GMAC1040 Trump Tower
AMERIPARK LODGE PORTFOLIO
GMACCM 17056 GMAC1050A Camlu Retirement Apartments - Tucson
GMACCM 17056 GMAC1050B Camlu Retirement Apartments - Austin
- -----------------------------------------------------------------------------------------------------------------------------
GMACCM 17056 GMAC1050C Camlu Retirement Apartments - Kerrville
GMACCM 17056 GMAC1050D Camlu Retirement Apartments - Las Vegas
GMAC1050 AMERIPARK LODGE PORTFOLIO SUMMARY
GMACCM 16810 GMAC1070 The Market Place at River Park
CROSSED GROUP 1
- -----------------------------------------------------------------------------------------------------------------------------
GMACCM 16725 GMAC1240 Country Club Terrace Apartments
GMACCM 16724 GMAC1310 Country Club Meadows
GMACCM 16726 GMAC1520 Country Club Vista Apartments
CROSSED GROUP 1 SUMMARY
GACC 19 TA0814 One Old Country Road
- -----------------------------------------------------------------------------------------------------------------------------
CROSSED GROUP 2
GMACCM 17093 GMAC4050 Ulster Business Complex - Fleet
GMACCM 17353 GMAC4055 Ulster Business Complex - IBM
CROSSED GROUP 2 SUMMARY
GMACCM 16964 GMAC1080 Northridge Apartments
- -----------------------------------------------------------------------------------------------------------------------------
GMACCM 16609 GMAC1090 K-Mart Distribution Center
GMACCM 15888 GMAC1110 Salt Pond Shopping Center
GMACCM 17088 GMAC3310 Nickelodeon Studio Center
GMACCM 17054 GMAC4110 Aquia Towne Center
VILLAGE OF WINDHOVER/CANBY PARK APARTMENTS
- -----------------------------------------------------------------------------------------------------------------------------
GMACCM 16614 GMAC1120A Village of Windhover
GMACCM 16614 GMAC1120B Canby Park Apartments
GMAC1120 VILLAGE OF WINDHOVER/CANBY PARK APTS. SUMMARY
CROSSED GROUP 3
GMACCM 16174 GMAC1350 William Penn Health Care Center
- -----------------------------------------------------------------------------------------------------------------------------
GMACCM 16173 GMAC1470 Loyalhanna Health Care Center
CROSSED GROUP 3 SUMMARY
GMACCM 16947 GMAC3370 Renaissance Orlando Hotel - Airport
GMACCM 17075 GMAC4010 Glendale Park Apartments I & II
GACC 2 TA2271 Hollywood Plaza
- -----------------------------------------------------------------------------------------------------------------------------
GMACCM 16691 GMAC1140 Zion Factory Stores
GACC 3 TA3078 Takoma Langley Crossroads Ctr.
GMACCM 16826 GMAC1150 12 Oaks Irving Retirement Village
GMACCM 16988 GMAC3380 Heathman Hotel
GMACCM 16761 GMAC1180 1200 Ross Garage
- -----------------------------------------------------------------------------------------------------------------------------
WEINERMAN PORTFOLIO
GMACCM 16916 GMAC1190A Gatehouse Apartments
GMACCM 16916 GMAC1190B Cooperstown Apartments
GMACCM 16916 GMAC1190C Cedar Park Apartments
GMACCM 16916 GMAC1190D Camelot Court Apartments
- -----------------------------------------------------------------------------------------------------------------------------
GMAC1190 WEINERMAN PORTFOLIO SUMMARY
GMACCM 16825 GMAC1210 12 Oaks East Retirement Village
GMACCM 16960 GMAC1220 Sun Valley Apartments
LICATA PORTFOLIO
GACC 4 TA0831-1 111 South Harrison Street
- -----------------------------------------------------------------------------------------------------------------------------
GACC 4 TA0831-2 195 Prospect Street Apartments
GACC 4 TA0831-3 158 South Harrison Street
GACC 4 TA0831-4 25 Van Velsor Place
GACC 4 TA0831-5 36-40 South Munn Street
GACC 4 TA0831-6 4 Chestnut Street
- -----------------------------------------------------------------------------------------------------------------------------
TA0831 LICATA PORTFOLIO SUMMARY
GMACCM 16876 GMAC1230 AIMCO - Foxtree Apartments
GACC 5 TA1432 Newpark Plaza Shopping Ctr.
GMACCM 16571 GMAC1250 Timberhill Shopping Center
GMACCM 16987 GMAC3390 Clarion Hotel
- -----------------------------------------------------------------------------------------------------------------------------
GMACCM 17004 GMAC1270 Calabasas Business Park
GMACCM 16658 GMAC1290 Plaza at the Quorum II
GMACCM 16874 GMAC1300 AIMCO - Timbertree Apartments
GMACCM 17279 GMAC3430 Roslyn Claremont Hotel
GMACCM 16807 GMAC1320 Imperial Promenade Retail Center
- -----------------------------------------------------------------------------------------------------------------------------
GMACCM 16870 GMAC1330 AIMCO - Orchidtree Apartments
GACC 23 TA1585 Grossmont Trolley Center
GMACCM 16847 GMAC1340 Queens Manor Apartments
GMACCM 16891 GMAC1360 AIMCO - Freedom Place Club Apartments
- -----------------------------------------------------------------------------------------------------------------------------
GMACCM 16257 GMAC3560 Maple-Telegraph Shopping Center
GACC 7 TA0146 Southern Cross Shopping Center
GMACCM 16686 GMAC1370 Garden Village Retirement Center
GMACCM 17063 GMAC1380 Heritage Apartments
GMACCM 16895 GMAC1390 AIMCO - Yorktree Apartments
- -----------------------------------------------------------------------------------------------------------------------------
GMACCM 16721 GMAC1400 Hampton Court Nursing Home
GMACCM 17070 GMAC1410 Greenhouse Townhomes Apartments
GMACCM 16633 GMAC1420 Hampton Inn - Southcenter
GMACCM 16084 GMAC4090 Time Warner Building
GMACCM 16739 GMAC1450 Mid America Plaza
- -----------------------------------------------------------------------------------------------------------------------------
GMACCM 16975 GMAC1480 Pacific VU Center
GMACCM 17028 GMAC1440 1000 Tower Lane
GMACCM 16942 GMAC3320 Henderson Plaza Shopping Center
GMACCM 16553 GMAC1490 Central Corporate Center
GMACCM 17236 GMAC4100 Wickes Furniture
- -----------------------------------------------------------------------------------------------------------------------------
GMACCM 16632 GMAC1500 West Coast Bellevue Hotel
GMACCM 16908 GMAC1510 Highland Club Apartments
GMACCM 16893 GMAC1530 AIMCO - Windsor Landing Apartments
GACC 24 TA2090 Santa Cruz Plaza
GACC 8 WF9701 8200 Preston Court
- -----------------------------------------------------------------------------------------------------------------------------
GMACCM 16592 GMAC4030 Cigna Healthcare Facility
GACC 25 TA2088 Sinaloa Plaza
GMACCM 16996 GMAC3400 Heathman Parking Garage
GACC 9 TA2094 Fox Animation Studio
GMACCM 16458 GMAC2030 Tassajara Village Shopping Center
- -----------------------------------------------------------------------------------------------------------------------------
ARBOR VILLAGE, BRITTANY, TROTWOOD
GMACCM 17162 GMAC2020A Arbor Village Apartments
GMACCM 17162 GMAC2020B Brittany Townhouses
GMACCM 17162 GMAC2020C Trotwood Downs Apartments
GMAC2020 ARBOR VILLAGE, BRITTANY, TROTWOOD SUMMARY
- -----------------------------------------------------------------------------------------------------------------------------
GACC 10 TA2667 Galleria West
GMACCM 16959 GMAC2050 Sunmark Office Plaza
GMACCM 16896 GMAC2040 AIMCO - Hiddentree Apartments
GMACCM 17034 GMAC2060 Plymouth Plaza Shopping Center
GMACCM 16894 GMAC2070 AIMCO - Islandtree Apartments
- -----------------------------------------------------------------------------------------------------------------------------
GACC 11 TA0541 Aloha Mobile Home Park
GMACCM 16875 GMAC2090 AIMCO - Wickertree Apartments
GMACCM 16522 GMAC3330 Park Inn
GMACCM 16883 GMAC2100 AIMCO - Tall Timbers Apartments
GACC 12 TA1936 284 Newbury Street
- -----------------------------------------------------------------------------------------------------------------------------
GMACCM 16869 GMAC2120 AIMCO - Hazeltree Apartments
GMACCM 16731 GMAC2130 Newtown Baker Crossings Shopping Center
GMACCM 16849 GMAC2140 Tiffany Square Office Plaza
GACC 26 TA1799 Women's National Republican Club
GMACCM 16877 GMAC2150 AIMCO - Foothills Apartments
- -----------------------------------------------------------------------------------------------------------------------------
GMACCM 16866 GMAC2160 AIMCO - The Arbors and Grovetree Apartments
GMACCM 16848 GMAC2180 Fox Run Apartments
GACC 27 TA2456 Terminal One
GMACCM 16797 GMAC2190 Vernon Park Plaza
GMACCM 16892 GMAC2200 AIMCO - Beacon Hill Apartments
- -----------------------------------------------------------------------------------------------------------------------------
GACC 28 TA2414 County Square Shopping Center
GMACCM 16717 GMAC2210 Nashville Rehab Hospital
GMACCM 16999 GMAC4120 Walgreens (Independence)
GMACCM 16510 GMAC2240 New Hope Care Center
GMACCM 16929 GMAC2360 Bice Restaurant of Chicago
- -----------------------------------------------------------------------------------------------------------------------------
GMACCM 16997 GMAC3410 Suntek Office Building
GMACCM 16851 GMAC2260 Kenley Square Apartments
GMACCM 16757 GMAC3450 New Hope Business Center
GMACCM 16898 GMAC2270 AIMCO - Shadow Lake Apartments
GMACCM 16878 GMAC2290 AIMCO - Foxbay Apartments
- -----------------------------------------------------------------------------------------------------------------------------
GMACCM 16882 GMAC2300 AIMCO - Sand Castles Apartments
GMACCM 16928 GMAC2310 Crossings Apartments
CROSSED GROUP 4
GMACCM 17118 GMAC4040 Southern Court Apartments
GMACCM 17119 GMAC4045 Patton Arms Apartments
- -----------------------------------------------------------------------------------------------------------------------------
CROSSED GROUP 4 SUMMARY
GMACCM 16940 GMAC2330 Shoppes of Weston Road
GMACCM 16948 GMAC2320 Mountain View Business Park
GACC 30 TA1922 Jerral Office Building
CROSSED GROUP 5
- -----------------------------------------------------------------------------------------------------------------------------
GMACCM 17177 GMAC3160 Chula Vista Office Center
GMACCM 17232 GMAC3590 Carlsbad Industrial Park
CROSSED GROUP 5 SUMMARY
GMACCM 16868 GMAC2340 AIMCO - Colonnade Gardens / Ferntree Apartments
GMACCM 16879 GMAC2350 AIMCO - Rivercrest Apartments
- -----------------------------------------------------------------------------------------------------------------------------
GMACCM 16956 GMAC2370 Alpharetta Business Center
GMACCM 17032 GMAC2380 Green Acres Apartments
GMACCM 16998 GMAC4130 Walgreens (Linwood)
GMACCM 16424 GMAC2410 Braewood Shopping Center
GACC 13 TA2921 600 Winter Street
- -----------------------------------------------------------------------------------------------------------------------------
GMACCM 16889 GMAC2400 AIMCO - Sand Pebble Apartments
GMACCM 16145 GMAC2420 Central Park Shopping Center
GMACCM 17113 GMAC3470 Sutters Creek Apartments
GMACCM 16288 GMAC2440 Rolling Brook Apartments
GMACCM 16863 GMAC3340 Heritage Nursing Center
- -----------------------------------------------------------------------------------------------------------------------------
GACC 31 TA2394 Hollowbrook Office Bldgs.
GMACCM 17223 GMAC3350 South Loop Freeway Office Building
GACC 14 TA1658 Hilgard House Hotel
GMACCM 17169 GMAC4080 Parklynn Apartments
GMACCM 16897 GMAC2450 AIMCO - Pine Creek Apartments
- -----------------------------------------------------------------------------------------------------------------------------
GMACCM 16835 GMAC2460 Marlboro Crossings Shopping Center
GMACCM 16809 GMAC2480 Nicolett VI Business Campus
GMACCM 16890 GMAC2470 AIMCO - Surrey Oaks Apartments
GMACCM 16886 GMAC2490 AIMCO - Polo Park Apartments
GMACCM 17108 GMAC3360 Times Square Shopping Center
- -----------------------------------------------------------------------------------------------------------------------------
GMACCM 16801 GMAC2570 Town Lift Base
GMACCM 16910 GMAC2500 Block 44
GMACCM 16665 GMAC2530 Auburn Place Shoppes
GMACCM 16498 GMAC2510 400 Morris Avenue
GMACCM 16871 GMAC2520 AIMCO - Quailtree Apartments
- -----------------------------------------------------------------------------------------------------------------------------
GACC 32 TA1898 Sunrise Shopping Center
GMACCM 16517 GMAC2540 Evergreen Retirement Inn
GMACCM 16762 GMAC2560 Parkway Plaza
GMACCM 16867 GMAC2580 AIMCO - Blossomtree Apartments
GMACCM 16884 GMAC2590 AIMCO - Woodhollow Apartments
- -----------------------------------------------------------------------------------------------------------------------------
DOLIK PORTFOLIO
GACC 33 TA1738-1 Dolik Industrial
GACC 33 TA1738-2 Dolik Industries
TA1738 DOLIK PORTFOLIO SUMMARY
GMACCM 16887 GMAC2600 AIMCO - Wildflower Apartments
- -----------------------------------------------------------------------------------------------------------------------------
GMACCM 16872 GMAC2610 AIMCO - Shadetree Apartments
GMACCM 16955 GMAC2620 Parkridge 85 North Office Building
GMACCM 16958 GMAC2630 5200 Panola Industrial Boulevard
GMACCM 17102 GMAC2550 Mount Pleasant Heights Apartments
GACC 15 WF9703 Paca Drive Industrial
- -----------------------------------------------------------------------------------------------------------------------------
GMACCM 16957 GMAC3020 30 Perimeter Park Office Building
DAIBES APARTMENTS
GMACCM 16924 GMAC3040A Daibes Apartments - 12 Liberty Place
GMACCM 16924 GMAC3040B Daibes Apartments, Hudson Croissant
GMAC3040 DAIBES APARTMENTS SUMMARY
- -----------------------------------------------------------------------------------------------------------------------------
GMACCM 16971 GMAC3030 Chippewa Medical Office Building
GMACCM 16888 GMAC3050 AIMCO - Wydewood Apartments
GMACCM 16223 GMAC3070 Studio City Retirement Villa
GMACCM 16662 GMAC3510 Vista La Jolla Corporate Center
GMACCM 17049 GMAC3060 The Holiday Retirement Home
- -----------------------------------------------------------------------------------------------------------------------------
GMACCM 16666 GMAC3080 University Shoppes
GACC 34 TA2573 Brookmanor Apartments
GMACCM 16873 GMAC3100 AIMCO - Silktree Apartments
GMACCM 16695 GMAC3120 Pico - Santee Building
GMACCM 17000 GMAC3140 8 and 20 Rose Avenue Apartments
- -----------------------------------------------------------------------------------------------------------------------------
GACC 16 TA1900 The Wellmont at Montclair
GMACCM 16708 GMAC3150 La Costa Place Apartments
GMACCM 16885 GMAC3180 AIMCO - Olmos Club Apartments
GMACCM 16773 GMAC3190 Heatherwood I Apartments
GMACCM 16881 GMAC3200 AIMCO - Brant Rock Apartments
- -----------------------------------------------------------------------------------------------------------------------------
GMACCM 16880 GMAC3210 AIMCO - Twinbridge Apartments
GMACCM 16953 GMAC3220 Amwiler West Office Building
GMACCM 16954 GMAC3230 1800 Roswell Road
GMACCM 16304 GMAC3300 Sunrise I Apartments
GACC 17 TA1772 Trenton Chateau Apartments
- -----------------------------------------------------------------------------------------------------------------------------
GMACCM 16861 GMAC3250 Kaysville Plaza
GMACCM 16598 GMAC3270 Valjean Avenue
GMACCM 16482 GMAC3260 Sunnyvale Nursing and Rehabilitation Center
GMACCM 16734 GMAC3240 Unity Plaza
GMACCM 16952 GMAC3280 55 Park Square
- -----------------------------------------------------------------------------------------------------------------------------
GMACCM 16305 GMAC3290 Sunrise II Apartments
</TABLE>
<TABLE>
<CAPTION>
ADDRESS CITY COUNTY STATE ZIP CODE
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
746 West Spring Street South Elgin Kane Illinois 60177
430 Martin Road Rock Falls Whiteside Illinois 61071
1403 9th Avenue Silvis Rock Island Illinois 61282
2220 State Street Pekin Tazewell Illinois 61554
- ----------------------------------------------------------------------------------------------------------------------------------
1409 North Main Street Benton Franklin Illinois 62812
418 S. Memorial Park Road Newman Douglas Illinois 61942
136 South Dipper Lane Decatur Macon Illinois 62522
1500 West St. Louis Avenue Vandalia Fayette Illinois 62471
Watkins Street Cisne Wayne Illinois 62823
- ----------------------------------------------------------------------------------------------------------------------------------
820 East Fifth Street Galesburg Knox Illinois 61402
902 East Arnold Street Sandwich Dekalb Illinois 60548
One North Wilson Street Enfield White Illinois 62835
520 Fabyan Parkway Batavia Kane Illinois 60510
901 Illini Drive East Peoria Tazewell Illinois 61611
- ----------------------------------------------------------------------------------------------------------------------------------
910 East Arnold Street Sandwich Dekalb Illinois 60548
Route 127 South Jonesboro Union Illinois 62952
2308 West Nebraska Avenue Peoria Peoria Illinois 61604
3520 School Street Rockford Winnebago Illinois 61103
900 North Market Street Watseka Iroquois Illinois 60970
- ----------------------------------------------------------------------------------------------------------------------------------
310 Banbury Road Elgin Kane Illinois 60542
405 West Carpenter McLeansboro Hamilton Illinois 62859
605 East Church Street Kewanee Henry Illinois 61443
2116 South 3rd Street Shelbyville Shelby Illinois 62565
600 South Maple Street Piper City Ford Illinois 60959
- ----------------------------------------------------------------------------------------------------------------------------------
515 East Euclid Avenue Monmouth Warren Illinois 61462
1400 East Washington Street Pittsfield Pike Illinois 62363
Route 1, Box 55A Rosiclare Hardin Illinois 62363
1925 South Main Street Bloomington McLean Illinois 61701
400 West Grant Street Macomb McDonough Illinois 61455
- ----------------------------------------------------------------------------------------------------------------------------------
2301 West Monroe Street Springfield Sangamon Illinois 62704
430 Martin Road Rock Falls Whiteside Illinois 61071
Front Street Anahuac Chambers Texas 77514
125 Avenue J Anson Jones Texas 79501
1316 South Florida Borger Hutchinson Texas 79007
- ----------------------------------------------------------------------------------------------------------------------------------
1661 South Buffalo Street Canton Van Zandt Texas 75103
701 South Market Street Carthage Panola Texas 75633
230 South Clark Road Cedar Hill Dallas Texas 75104
103 Teakwood Drive Centerville Leon Texas 75833
1200 7th Street NW Childress Childress Texas 79201
- ----------------------------------------------------------------------------------------------------------------------------------
1107 South Clay Street Ennis Ellis Texas 75119
2713 Commercial Avenue Coleman Coleman Texas 76834
1502 West Kentucky Avenue Pampa Gray Texas 79094
615 East Main Street Van Van Zandt Texas 75790
1514 Indian Creek Drive Brownwood Brown Texas 76801
- ----------------------------------------------------------------------------------------------------------------------------------
1405 West Commerce Street Eastland Eastland Texas 76448
511 South Bailey Electra Wichita Texas 76360
406 East 7th Street Burkburnett Wichita Texas 76354
Highway 155 Frankston Anderson Texas 75763
1224 Corvadura Street Graham Young Texas 76450
- ----------------------------------------------------------------------------------------------------------------------------------
1000 North Broadway Aspermont Stonewall Texas 79502
1704 North Bradford Street Gilmer Upshur Texas 75644
1309 Brazos Street Graham Young Texas 76450
1201 Cherry Street Graham Young Texas 76450
910 East Pierson Street Hamilton Hamilton Texas 76531
- ----------------------------------------------------------------------------------------------------------------------------------
1504 North 1st Street Haskell Haskell Texas 79521
1101 Brown Street Hearne Robertson Texas 77859
507 East Green Street Llano Llano Texas 78643
425 SW Avenue F Hamlin Jones Texas 79520
211 East Jasper Street Jacksboro Jack Texas 76458
- ----------------------------------------------------------------------------------------------------------------------------------
407 Bonita Street Jacksonville Cherokee Texas 75766
820 Jeffrey Street Waco McLennan Texas 76170
3001 South Houston Street Kaufman Kaufman Texas 75142
2000 East School Street Kermit Winkler Texas 79745
413 Garland Drive Lake Jackson Brazoria Texas 77566
- ----------------------------------------------------------------------------------------------------------------------------------
1818 North 7th Street Lamesa Dawson Texas 79331
208 South Utah Street La Porte Harris Texas 77571
215 Margaret Street Lindale Smith Texas 75771
2030 West University Drive McKinney Collin Texas 75070
3600 North Twin City Highway Nederland Jefferson Texas 77627
- ----------------------------------------------------------------------------------------------------------------------------------
1302 West Payne Street Olney Young Texas 76376
Highway 135 South Overton Rusk Texas 75684
1414 Fourth Street Palacios Matagorda Texas 77465
1816 Tile Factory Road Palestine Anderson Texas 75801
- ----------------------------------------------------------------------------------------------------------------------------------
610 Deshong Drive Paris Lamar Texas 75460
319 Paris Road Bogata Red River Texas 75417
3011 West Adams Avenue Temple Bell Texas 76504
1413 West Main Street Waxahachie Ellis Texas 75165
609 Rio Concho Drive San Angelo Tom Green Texas 76903
- ----------------------------------------------------------------------------------------------------------------------------------
201 Cypress Street Roscoe Nolan Texas 79545
711 East Fifth Street Rotan Fisher Texas 79546
1201 North 15th Street Lamesa Dawson Texas 79331
5311 Big Spring Highway Snyder Scurry Texas 79549
1101 East Lake Street Brownfield Terry Texas 79316
- ----------------------------------------------------------------------------------------------------------------------------------
1600 Josephine Street Sweetwater Nolan Texas 79556
1000 Minter Nursing Avenue Throckmorton Throckmorton Texas 76483
700 South Ostrom Street Eastland Eastland Texas 76448
201 South Oak Street Van Van Zandt Texas 75790
- ----------------------------------------------------------------------------------------------------------------------------------
999 9th Street NE Washington NAP District of Columbia 20001
5800 Northwest Drive Mesquite Dallas Texas 75150
5631 Spring Valley Road Dallas Dallas Texas 75240
15330 Ella Boulevard Houston Harris Texas 77090
- ----------------------------------------------------------------------------------------------------------------------------------
613 Clearwood Road Richardson Dallas Texas 75081
10101 Forum Park Drive Houston Harris Texas 77036
2504 Ivy Brook Court Arlington Tarrant Texas 76006
1601 Weyland Drive North Richland Hills Tarrant Texas 76180
8001 West Tidwell Houston Harris Texas 77077
- ----------------------------------------------------------------------------------------------------------------------------------
515 Madison Street Seattle King Washington 98104
580 Fifth Avenue New York New York New York 10036
SWC of I-94 and Radio Drive Woodbury Washington Minnesota 55125
- ----------------------------------------------------------------------------------------------------------------------------------
3801 West Napoleon Avenue Metairie Jefferson Parish Louisiana 70001
3800 Grandlake Boulevard Kenner Jefferson Parish Louisiana 70065
800 Joe Yenni Boulevard Kenner Jefferson Parish Louisiana 70065
1400 West Esplanade Avenue Kenner Jefferson Parish Louisiana 70065
121 West Esplanade Avenue Kenner Jefferson Parish Louisiana 70065
- ----------------------------------------------------------------------------------------------------------------------------------
725 Fifth Avenue New York New York New York 10022
102 South Sherwood Village Tucson Pima Arizona 85710
1130 Camino La Costa Austin Travis Texas 78752
- ----------------------------------------------------------------------------------------------------------------------------------
135 Plaza Drive Kerrville Kerr Texas 78028
4255 Spencer Street Las Vegas Clark Nevada 89119
NWC of North Blackstone and Alluvial Avenues Fresno Fresno California 93720
- ----------------------------------------------------------------------------------------------------------------------------------
5404 East Cortland Boulevard Flagstaff Coconino Arizona 86004
5303 East Cortland Boulevard Flagstaff Coconino Arizona 86004
5250 East Cortland Boulevard Flagstaff Coconino Arizona 86004
One Old Country Road Carle Place Nassau New York 11514
- ----------------------------------------------------------------------------------------------------------------------------------
201 - 203 Enterprise Drive Ulster Ulster New York 12401
42 and 43 Enterprise Drive Ulster Ulster New York 12401
1204 Sherwood Court Rochester Hills Oakland Michigan 48307
- ----------------------------------------------------------------------------------------------------------------------------------
90 Salem Street Billerica Middlesex Massachusetts 01821
91 Point Judith Road Naragansett Washington Rhode Island 02882
231 West Olive Avenue Burbank Los Angeles California 91502
US Route 1 and Route 610 Aquia Stafford Virginia 22554
- ----------------------------------------------------------------------------------------------------------------------------------
104 Sandburg Place Newark New Castle Delaware 19702
1600 Bonwood Road Christiana Hundred New Castle Delaware 19805
2020 Ader Road Jeannette Westmoreland Pennsylvania 15644
- ----------------------------------------------------------------------------------------------------------------------------------
Ligonier Street Extension, RR2 Box 14 Latrobe Westmoreland Pennsylvania 15650
5445 Forbes Place Orlando Orange Florida 32812
8801 and 8811 Gustine Lane Houston Harris Texas 77031
8148 International Drive Orlando Orange Florida 32819
- ----------------------------------------------------------------------------------------------------------------------------------
250 North Red Cliff Drive St. George Washington Utah 84790
New Hampshire Ave/University Blvd Tokoma Park Montgomery Maryland 20783
820 North Britain Road Irving Dallas Texas 75061
1001 SW Broadway Street Portland Multnomah Oregon 97205
1200 Ross Avenue Dallas Dallas Texas 75202
- ----------------------------------------------------------------------------------------------------------------------------------
907 Woodlane Road Edgewater Park Burlington New Jersey 08010
1306 Cooper Street Edgewater Park Burlington New Jersey 08010
821 North Main Road Vineland Cumberland New Jersey 08360
430 West Walnut Road Vineland Cumberland New Jersey 08360
- ----------------------------------------------------------------------------------------------------------------------------------
3305 Dilido Road Dallas Dallas Texas 75228
2955 North 400 West Layton Davis Utah 84041
111 South Harrison Street East Orange Essex County New Jersey 07018
- ----------------------------------------------------------------------------------------------------------------------------------
195 Prospect Street East Orange Essex County New Jersey 07017
158 South Harrison Street East Orange Essex County New Jersey 07018
25 Van Velsor Place Newark Essex County New Jersey 07112
36-40 South Munn Street East Orange Essex County New Jersey 07018
4 Chestnut Street East Orange Essex County New Jersey 07018
- ----------------------------------------------------------------------------------------------------------------------------------
2100 North Scottsdale Road Tempe Maricopa Arizona 85281
5222-5810 Newpark Mall Road Newark Alameda California 94560
2359 NW Kings Boulevard Corvallis Benton Oregon 97330
6233 NE 78th Court Portland Multnomah Oregon 97218
- ----------------------------------------------------------------------------------------------------------------------------------
23801 Calabasas Road Calabasas Los Angeles California 91302
4980 Beltline Road Addison Dallas Texas 75240
2800 West Sahuaro Drive Phoenix Maricopa Arizona 85029
1221 Old Northern Boulevard Roslyn Nassau New York 11576
5645 - 5675 East La Palma Avenue Anaheim Orange California 92807
- ----------------------------------------------------------------------------------------------------------------------------------
6801 East Camelback Road Scottsdale Maricopa Arizona 85251
8401-8555 Fletcher Parkway La Mesa San Diego California 91942
4615 27th Street Mount Rainier Prince George Maryland 20712
8335 Freedom Crossing Trail Jacksonville Duval Florida 32256
- ----------------------------------------------------------------------------------------------------------------------------------
SE Corner of Maple and Telegraph Road Bloomfield Township Oakland Michigan 48301
1801-1899 South Neveda Avenue Colorado Springs El Paso Colorado 80906
8550 North Granby Avenue Kansas City Platte Missouri 64154
910 Heritage Court St. Charles St. Charles Missouri 63303
201 Flame Drive Carol Stream Dupage Illinois 60188
- ----------------------------------------------------------------------------------------------------------------------------------
16100 NW Second Avenue North Miami Beach Dade Florida 33169
650 - 740 Fargo Avenue San Leandro Alameda California 94579
7200 South 156th Street Tukwila King Washington 98188
31 - 89 and 31 - 99 123rd Street New York Queens New York 11354
7000 and 7100 West Center Road and 7101 Mercy Road Omaha Douglas Nebraska 68106
- ----------------------------------------------------------------------------------------------------------------------------------
1901 1st and 1958 2nd Avenues San Diego San Diego California 92101
1000 Tower Lane Bensenville DuPage Illinois 60007
508 - 544 South Boulder Highway Henderson Clark Nevada 89015
3400 Central Avenue Riverside Riverside California 92506
18850 Hawthorne Boulevard Torrance Los Angeles California 90504
- ----------------------------------------------------------------------------------------------------------------------------------
625 - 116th Avenue NE Bellevue King Washington 98004
20 Eastview Drive Watervliet Albany New York 12189
7120 Southlake Parkway Morrow Clayton Georgia 30260
3858-36705 16th Street Tucson Pima Arizona 85713
8200 Preston Court Jessup Howard Maryland 20794
- ----------------------------------------------------------------------------------------------------------------------------------
535 North Wilmot Road Tucson Pima Arizona 85711
660 East Los Angeles Ave. Simi Valley Ventura California 93605
914 SW Taylor Street Portland Multnomah Oregon 97205
2747 East Camelback Road Phoenix Maricopa Arizona 85016
9000 Crow Canyon Road Danville Contra Costa California 94506
- ----------------------------------------------------------------------------------------------------------------------------------
26 B Arbor Village Court Ferguson St. Louis Missouri 63135
7200 Brittany Town Place Hazelwood St. Louis Missouri 63042
8507 East Tally Ho Drive Hazelwood St. Louis Missouri 63042
- ----------------------------------------------------------------------------------------------------------------------------------
18900 West Bluemound Road Brookfield Waukesha Wisconsin 53045
133 - 137 - 139 South Pebble Beach Boulevard Sun City Center Hillsborough Florida 33571
410 Pine Forest Drive East Lansing Ingham Michigan 48823
1415 - 1495 N. Highway 101 Plymouth Hennepin Minnesota 55447
2 Johnny Mercer Boulevard Whitsmarsh Island Chatham Georgia 31410
- ----------------------------------------------------------------------------------------------------------------------------------
3100 Hawthorne Street Sarasota Sarasota Florida 34239
20003 North 23rd Avenue Phoenix Maricopa Arizona 85027
5977 Mowry Avenue Newark Alameda California 94560
13155 Woodforest Boulevard Houston Harris Texas 77015
284 Newbury St. Boston Suffolk Massachusetts 02115
- ----------------------------------------------------------------------------------------------------------------------------------
2928 East Osborn Road Phoenix Maricopa Arizona 85016
649 - 665 Newtown Road Virginia Beach Virginia Beach Virginia 23462
800 Tiffany Boulevard Rocky Mount Nash North Carolina 27802
3 West 51st Street New York New York New York 10019
5441 North Swan Road Tucson Pima Arizona 85718
- ----------------------------------------------------------------------------------------------------------------------------------
805 West Brown Tempe Maricopa Arizona 85281
1600 - 1618 Ashby Square Edgewood Harford Maryland 21040
8397 Terminal Road Newington Fairfax Virginia 22079
135 - 141 Talcottville Road Vernon Tolland Connecticut 06066
3301 Henderson Mill Chamblee DeKalb Georgia 30341
- ----------------------------------------------------------------------------------------------------------------------------------
16-62 Martha Layne Collins Blvd Cold Spring Campbell Kentucky 41076
610 Gallatin Road Nashville Davidson Tennessee 37206
5400 Independence Avenue Kansas City Jackson Missouri 64123
2586 Buthmann Avenue Tracy San Joaquin California 95376
158 East Ontario Street Chicago Cook Illinois 60611
- ----------------------------------------------------------------------------------------------------------------------------------
9400 and 9450 SW Barnes Road Portland Washington Oregon 97225
1150 Kenley Avenue Hagerstown Washington Maryland 21740
4101 Capital Boulevard Raleigh Wake North Carolina 27604
101 Meadowood Street Greensboro Guilford North Carolina 27409
3985 North Stone Avenue Tucson Pima Arizona 85705
- ----------------------------------------------------------------------------------------------------------------------------------
2751 FM 518 League City Galveston Texas 77573
2001 East Cross Street Tulare Tulare California 93274
860 - 890 Southern Avenue SE and 845 -
885 Chesapeake Street SE Washington NAP District of Columbia 20032
5066-5078 Benning Road SE and 5010 Southern
Avenue SE Washington NAP District of Columbia 20032
- ----------------------------------------------------------------------------------------------------------------------------------
1700 Weston Road Weston Broward Florida 33326
1438 - 1442 East Arrow Highway Irwindale Los Angeles California 91706
766 Shrewsbury Avenue Tinton Falls Monmouth New Jersey 07724
- ----------------------------------------------------------------------------------------------------------------------------------
637 Third Avenue Chula Vista San Diego California 91910
2080 Las Palmas Drive Carlsbad San Diego California 92009
1930 East Camelback Road Phoenix Maricopa Arizona 85016
1001 West St. Mary's Road Tucson Pima Arizona 85745
- ----------------------------------------------------------------------------------------------------------------------------------
11940 Alpharetta Highway Alpharetta Fulton Georgia 30201
6715-6717 Park Heights Ave., 3602-3610
Clarinth Rd., 3505-3612 Labyrinth Rd.,
3607 Fallstaff Rd. Baltimore Baltimore City Maryland 21215
2501 East Linwood Boulevard Kansas City Jackson Missouri 64128
150 South Denton Tap Road Coppell Dallas Texas 75019
600 Winter Street Waltham Middlesex Massachusetts 02154
- ----------------------------------------------------------------------------------------------------------------------------------
11280 Pebble Hills Boulevard El Paso El Paso Texas 79936
1800 West Irving Boulevard Irving Dallas Texas 75061
2480 Crooks Road Troy Oakland Michigan 48084
620 Hickory Drive Huntsville Walker Texas 77340
1175 Morningside Drive Conway Faulkner Arkansas 72032
- ----------------------------------------------------------------------------------------------------------------------------------
15 Myers Corner Road Wappinger Falls Dutchess New York 12590
2656 South Loop West Houston Harris Texas 77054
927 Hilgard Avenue Los Angeles Los Angeles California 90024
5 Ruth Road Elsmere New Castle Delaware 19805
11650 Plaza Drive Clio Genesee Michigan 48420
- ----------------------------------------------------------------------------------------------------------------------------------
12 Route 9 North Marlboro Monmouth New Jersey 07746
151 East Cliff Road Burnsville Dakota Minnesota 55337
3001 Crystal Springs Road Bedford Tarrant Texas 76021
4700 Polo Parkway Midland Midland Texas 79705
2315 - 2405 Michael Drive Thousand Oaks Ventura California 91320
- ----------------------------------------------------------------------------------------------------------------------------------
825 Main Street & 838 Park Ave Park City Summit Utah 84060
814 - 822 West Idaho, 211 - 223 North 8th, and
801 - 815 West Bannock Streets Boise Ada Idaho 83702
3497 - 3501 Holland Road Virginia Beach Virginia Beach Virginia 23452
400 Morris Avenue, Building 7, Denville
Technical Center Denville Morris New Jersey 07834
4444 North 7th Avenue Phoenix Maricopa Arizona 85013
- ----------------------------------------------------------------------------------------------------------------------------------
127-135 West Sunrise Highway Freeport Nassau New York 11520
500 Main Street Vancouver Clark Washington 98660
10231 - 10241 - 10251 Metro Parkway Fort Myers Lee County Florida 33912
8750 East McDowell Road Scottsdale Maricopa Arizona 85257
3524 Greystone Drive Austin Travis Texas 78731
- ----------------------------------------------------------------------------------------------------------------------------------
1400 Combermere Street Troy Oakland Michigan 48083
2944-46 and 2950 Waterview Drive Rochester Hills Oakland Michigan 48309
4301 Raleigh Court Midland Midland Texas 79707
- ----------------------------------------------------------------------------------------------------------------------------------
801 East McKellips Road Tempe Maricopa Arizona 85281
3125 Presidential Parkway Atlanta DeKalb Georgia 30340
5200 Panola Industrial Boulevard Decatur DeKalb Georgia 30035
6502 McClean Boulevard Baltimore Baltimore City Maryland 21214
1308 Continental Drive Abingdon Harford Maryland 21040
- ----------------------------------------------------------------------------------------------------------------------------------
30 Perimeter Park Drive Chamblee DeKalb Georgia 30341
12 Liberty Place Weehawken Hudson New Jersey 07087
9005 Third Avenue North Bergen Hudson New Jersey 07047
- ----------------------------------------------------------------------------------------------------------------------------------
6555 Chippewa Street St. Louis St. Louis Missouri 63109
4715 West Wadley Avenue Midland Midland Texas 79707
4509 Laurel Canyon Boulevard North Hollywood Los Angeles California 91607
4747 Morena Boulevard San Diego San Diego California 92117
30 Sayles Hill Road Lincoln Providence Rhode Island 02838
- ----------------------------------------------------------------------------------------------------------------------------------
5660 Indian River Road Virginia Beach Virginia Beach Virginia 23464
313-321 Schaffer Avenue Salina Onodaga New York 13206
4815 East Thomas Road Phoenix Maricopa Arizona 85018
218 - 230 East Pico Boulevard / 1301 South
Santee Street Los Angeles Los Angeles California 90015
8 and 20 Rose Avenue Spring Valley Rockland New York 10977
- ----------------------------------------------------------------------------------------------------------------------------------
408 Bloomfield Avenue Montclair Essex New Jersey 07042
2641 West Butler Drive Phoenix Maricopa Arizona 85051
800 Basse Road San Antonio Bexar Texas 78212
1005-D Airport Road (Hoagland Boulevard) Kissimmee Osceola Florida 34741
12906 Brant Rock Drive Houston Harris Texas 77082
- ----------------------------------------------------------------------------------------------------------------------------------
201 West Blacklidge Drive Tucson Pima Arizona 85705
2845 Amwiler Road Norcross Gwinnett Georgia 30360
1800 Roswell Road Marietta Cobb Georgia 30062
3805 South Hopkins Avenue Titusville Brevard Florida 32780
14610-14664 Middle Gibralter Rd. Gibralter Wayne Michigan 48173
- ----------------------------------------------------------------------------------------------------------------------------------
12 - 66 South Main Kaysville Davis Utah 84037
6917 - 6921 Valjean Avenue Van Nuys Los Angeles California 91406
1291 South Bernardo Avenue Sunnyvale Santa Clara California 94087
255 - 295 Barbour Street Hartford Hartford Connecticut 06112
55 Park Square Roswell Fulton Georgia 30075
- ----------------------------------------------------------------------------------------------------------------------------------
3821 South Hopkins Avenue Titusville Brevard Florida 32708
</TABLE>
<TABLE>
<CAPTION>
% OF AGGREGATE
PROPERTY OWNERSHIP CROSSED RELATED ORIGINAL CUT-OFF DATE CUT-OFF DATE
TYPE INTEREST LOAN GROUP LOANS BALANCE BALANCE BALANCE
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Nursing, Skilled/Intermediate Care Fee
Independent/Assisted Living Fee
Nursing, Skilled/Intermediate Care Fee
Nursing, Skilled/Intermediate Care Fee
- -----------------------------------------------------------------------------------------------------------------------------------
Nursing, Skilled/Intermediate Care Fee
Nursing, Skilled/Intermediate Care Leasehold
Nursing, Skilled/Intermediate Care Fee
Nursing, Skilled/Intermediate Care Fee
Nursing, Skilled/Intermediate Care Fee
- -----------------------------------------------------------------------------------------------------------------------------------
Nursing, Skilled/Intermediate Care Fee
Nursing, Skilled/Intermediate Care Fee
Nursing, Skilled/Intermediate Care Fee
Nursing, Skilled/Intermediate Care Fee
Nursing, Skilled/Intermediate Care Fee
- -----------------------------------------------------------------------------------------------------------------------------------
Independent/Assisted Living Fee
Nursing, Skilled/Intermediate Care Fee
Nursing, Skilled/Intermediate Care Fee
Nursing, Skilled/Intermediate Care Fee
Nursing, Skilled/Intermediate Care Fee
- -----------------------------------------------------------------------------------------------------------------------------------
Nursing, Skilled/Intermediate Care Fee
Nursing, Skilled/Intermediate Care Fee
Nursing, Skilled/Intermediate Care Leasehold
Nursing, Skilled/Intermediate Care Fee
Nursing, Skilled/Intermediate Care Leasehold
- -----------------------------------------------------------------------------------------------------------------------------------
Nursing, Skilled/Intermediate Care Fee
Nursing, Skilled/Intermediate Care Fee
Nursing, Skilled/Intermediate Care Fee
Nursing, Skilled/Intermediate Care Fee
Nursing, Skilled/Intermediate Care Fee
- -----------------------------------------------------------------------------------------------------------------------------------
Nursing, Skilled/Intermediate Care Fee
Nursing, Skilled/Intermediate Care Fee
Nursing, Skilled/Intermediate Care Fee
Nursing, Skilled/Intermediate Care Fee
Nursing, Skilled/Intermediate Care Fee
- -----------------------------------------------------------------------------------------------------------------------------------
Nursing, Skilled/Intermediate Care Fee
Nursing, Skilled/Intermediate Care Fee
Nursing, Skilled/Intermediate Care Leasehold
Nursing, Skilled/Intermediate Care Fee
Nursing, Skilled/Intermediate Care Fee
- -----------------------------------------------------------------------------------------------------------------------------------
Nursing, Skilled/Intermediate Care Fee
Nursing, Skilled/Intermediate Care Fee
Nursing, Skilled/Intermediate Care Fee
Nursing, Skilled/Intermediate Care Leasehold
Nursing, Skilled/Intermediate Care Fee
- -----------------------------------------------------------------------------------------------------------------------------------
Nursing, Skilled/Intermediate Care Fee
Nursing, Skilled/Intermediate Care Fee
Nursing, Skilled/Intermediate Care Fee
Nursing, Skilled/Intermediate Care Leasehold
Nursing, Skilled/Intermediate Care Fee
- -----------------------------------------------------------------------------------------------------------------------------------
Nursing, Skilled/Intermediate Care Leasehold
Nursing, Skilled/Intermediate Care Leasehold
Nursing, Skilled/Intermediate Care Fee
Independent/Assisted Living Fee
Nursing, Skilled/Intermediate Care Fee
- -----------------------------------------------------------------------------------------------------------------------------------
Nursing, Skilled/Intermediate Care Fee
Nursing, Skilled/Intermediate Care Fee
Nursing, Skilled/Intermediate Care Fee
Nursing, Skilled/Intermediate Care Fee
Nursing, Skilled/Intermediate Care Fee
- -----------------------------------------------------------------------------------------------------------------------------------
Nursing, Skilled/Intermediate Care Fee
Nursing, Skilled/Intermediate Care Fee
Nursing, Skilled/Intermediate Care Fee
Nursing, Skilled/Intermediate Care Fee
Nursing, Skilled/Intermediate Care Fee
- -----------------------------------------------------------------------------------------------------------------------------------
Nursing, Skilled/Intermediate Care Fee
Nursing, Skilled/Intermediate Care Fee
Nursing, Skilled/Intermediate Care Fee
Nursing, Skilled/Intermediate Care Leasehold
Nursing, Skilled/Intermediate Care Fee
- -----------------------------------------------------------------------------------------------------------------------------------
Nursing, Skilled/Intermediate Care Fee
Nursing, Skilled/Intermediate Care Fee
Nursing, Skilled/Intermediate Care Fee
Nursing, Skilled/Intermediate Care Fee
- -----------------------------------------------------------------------------------------------------------------------------------
Nursing, Skilled/Intermediate Care Fee
Nursing, Skilled/Intermediate Care Leasehold
Nursing, Skilled/Intermediate Care Fee
Nursing, Skilled/Intermediate Care Leasehold
Nursing, Skilled/Intermediate Care Fee
- -----------------------------------------------------------------------------------------------------------------------------------
Nursing, Skilled/Intermediate Care Fee
Nursing, Skilled/Intermediate Care Fee
Nursing, Skilled/Intermediate Care Fee
Nursing, Skilled/Intermediate Care Fee
Nursing, Skilled/Intermediate Care Both Fee/Lease
- -----------------------------------------------------------------------------------------------------------------------------------
Nursing, Skilled/Intermediate Care Fee
Nursing, Skilled/Intermediate Care Fee
Nursing, Skilled/Intermediate Care Fee
Nursing, Skilled/Intermediate Care Leasehold
$226,000,000 $225,437,229 15.68
- -----------------------------------------------------------------------------------------------------------------------------------
Hospitality Both Fee/Lease 62,000,000 61,924,861 4.31
Multifamily Fee
Multifamily Fee
Multifamily Fee
- -----------------------------------------------------------------------------------------------------------------------------------
Multifamily Fee
Multifamily Fee
Multifamily Fee
Multifamily Fee
Multifamily Fee
- -----------------------------------------------------------------------------------------------------------------------------------
62,000,000 61,800,612 4.30
Hospitality Leasehold 49,000,000 48,942,695 3.40
Office Fee 45,000,000 45,000,000 3.13
Retail Fee 45,000,000 44,852,613 3.12
- -----------------------------------------------------------------------------------------------------------------------------------
Multifamily Fee
Multifamily Fee
Multifamily Fee
Multifamily Fee
Multifamily Fee
- -----------------------------------------------------------------------------------------------------------------------------------
36,901,150 36,191,152 2.52
Mixed Use Fee 35,000,000 34,919,372 2.43
Independent/Assisted Living Fee
Independent/Assisted Living Fee
- -----------------------------------------------------------------------------------------------------------------------------------
Independent/Assisted Living Fee
Independent/Assisted Living Fee
34,520,000 34,386,268 2.39
Retail Both Fee/Lease 25,500,000 25,422,055 1.77
- -----------------------------------------------------------------------------------------------------------------------------------
Multifamily Fee Country Clubs Country Clubs 9,000,000 8,964,469 0.62
Multifamily Fee Country Clubs Country Clubs 7,900,000 7,868,812 0.55
Multifamily Fee Country Clubs Country Clubs 5,600,000 5,577,892 0.39
--------- --------- ----
22,500,000 22,411,172 1.56
Office Fee 20,760,000 20,744,298 1.44
- -----------------------------------------------------------------------------------------------------------------------------------
Office Fee Ulsters Ulsters 16,185,000 15,873,962 1.10
Industrial Fee Ulsters Ulsters 4,620,000 4,573,072 0.32
--------- --------- ----
20,805,000 20,447,034 1.42
Multifamily Fee 17,000,000 16,936,955 1.18
- -----------------------------------------------------------------------------------------------------------------------------------
Industrial Fee 16,350,000 16,325,042 1.14
Retail Fee 15,700,000 15,652,390 1.09
Special Purpose Fee 15,400,000 15,330,575 1.07
Retail Fee 15,225,000 15,202,679 1.06
- -----------------------------------------------------------------------------------------------------------------------------------
Multifamily Fee
Multifamily Fee
13,400,000 13,378,055 0.93
Nursing, Skilled/Intermediate Care Fee Wukich Wukich 7,200,000 7,171,565 0.50
- -----------------------------------------------------------------------------------------------------------------------------------
Nursing, Skilled/Intermediate Care Fee Wukich Wukich 5,800,000 5,777,094 0.40
--------- --------- ----
13,000,000 12,948,658 0.90
Hospitality Fee 12,000,000 11,973,636 0.83
Multifamily Fee 12,000,000 11,971,076 0.83
Retail Fee 12,000,000 11,962,586 0.83
- -----------------------------------------------------------------------------------------------------------------------------------
Retail Fee 11,600,000 11,564,963 0.80
Retail Fee 11,250,000 11,233,745 0.78
Independent/Assisted Living Fee Blaylock 11,250,000 11,183,827 0.78
Hospitality Fee Stevenson/Bean 10,350,000 10,327,999 0.72
Special Purpose Fee 10,000,000 9,970,213 0.69
- -----------------------------------------------------------------------------------------------------------------------------------
Multifamily Fee
Multifamily Fee
Multifamily Fee
Multifamily Fee
- -----------------------------------------------------------------------------------------------------------------------------------
10,000,000 9,968,325 0.69
Independent/Assisted Living Fee Blaylock 9,450,000 9,394,414 0.65
Multifamily Fee 9,200,000 9,172,371 0.64
Multifamily Fee
- -----------------------------------------------------------------------------------------------------------------------------------
Multifamily Fee
Multifamily Fee
Multifamily Fee
Multifamily Fee
Multifamily Fee
- -----------------------------------------------------------------------------------------------------------------------------------
9,100,000 9,046,363 0.63
Multifamily Fee AIMCO 9,079,651 8,973,776 0.62
Retail Fee 8,900,000 8,885,193 0.62
Retail Fee 8,700,000 8,667,698 0.60
Hospitality Fee Stevenson/Bean 8,650,000 8,631,612 0.60
- -----------------------------------------------------------------------------------------------------------------------------------
Office Fee 8,567,166 8,553,911 0.59
Retail Fee 8,400,000 8,368,936 0.58
Multifamily Fee AIMCO 8,050,350 7,956,477 0.55
Hospitality Fee 7,750,000 7,740,771 0.54
Retail Fee 7,500,000 7,477,211 0.52
- -----------------------------------------------------------------------------------------------------------------------------------
Multifamily Fee AIMCO 7,417,850 7,331,352 0.51
Retail Both Fee/Lease 7,300,000 7,293,885 0.51
Multifamily Fee Gross 7,200,000 7,178,079 0.50
Multifamily Fee AIMCO 7,118,100 7,035,098 0.49
- -----------------------------------------------------------------------------------------------------------------------------------
Retail Fee 7,000,000 6,980,029 0.49
Retail Fee 7,000,000 6,973,065 0.48
Independent/Assisted Living Fee 6,850,000 6,809,066 0.47
Multifamily Fee 6,800,000 6,783,734 0.47
Multifamily Fee AIMCO 6,778,609 6,699,565 0.47
- -----------------------------------------------------------------------------------------------------------------------------------
Nursing, Rehabilitation Fee 6,700,000 6,685,351 0.46
Multifamily Fee 6,525,000 6,508,605 0.45
Hospitality Fee Eberle 6,250,000 6,221,234 0.43
Mixed Use Fee 6,212,000 6,199,156 0.43
Office Fee 6,200,000 6,153,174 0.43
- -----------------------------------------------------------------------------------------------------------------------------------
Mixed Use Fee 5,800,000 5,785,961 0.40
Office Fee 5,750,000 5,740,776 0.40
Retail Fee 5,750,000 5,736,585 0.40
Office Fee 5,725,000 5,705,140 0.40
Retail Fee 5,700,000 5,695,124 0.40
- -----------------------------------------------------------------------------------------------------------------------------------
Hospitality Fee Eberle 5,700,000 5,674,792 0.39
Multifamily Fee Elkor 5,515,000 5,515,000 0.38
Multifamily Fee AIMCO 5,564,448 5,499,562 0.38
Retail Fee 5,440,000 5,435,637 0.38
Industrial Fee James F. Knott 5,515,000 5,255,368 0.37
- -----------------------------------------------------------------------------------------------------------------------------------
Office Fee 5,200,000 5,195,834 0.36
Retail Fee 5,000,000 4,996,037 0.35
Special Purpose Fee Stevenson/Bean 5,000,000 4,992,876 0.35
Office Fee 5,000,000 4,987,775 0.35
Retail Fee 4,650,000 4,633,377 0.32
- -----------------------------------------------------------------------------------------------------------------------------------
Multifamily Fee
Multifamily Fee
Multifamily Fee
4,630,000 4,622,754 0.32
- -----------------------------------------------------------------------------------------------------------------------------------
Retail Fee 4,550,000 4,539,085 0.32
Office Fee 4,500,000 4,488,869 0.31
Multifamily Fee AIMCO 4,505,728 4,453,188 0.31
Retail Fee 4,400,000 4,370,386 0.30
Multifamily Fee AIMCO 4,301,550 4,251,391 0.30
- -----------------------------------------------------------------------------------------------------------------------------------
Mobile Home Park Fee 4,200,000 4,193,518 0.29
Multifamily Fee AIMCO 4,231,700 4,182,355 0.29
Hospitality Fee 4,200,000 4,172,624 0.29
Multifamily Fee AIMCO 4,188,250 4,139,412 0.29
Mixed Use Fee 4,100,000 4,093,351 0.28
- -----------------------------------------------------------------------------------------------------------------------------------
Multifamily Fee AIMCO 4,140,761 4,092,477 0.28
Retail Fee 4,050,000 4,031,360 0.28
Office Fee 4,000,000 3,993,827 0.28
Mixed Use Fee 4,000,000 3,991,184 0.28
Multifamily Fee AIMCO 3,936,350 3,890,449 0.27
- -----------------------------------------------------------------------------------------------------------------------------------
Multifamily Fee AIMCO 3,916,538 3,870,868 0.27
Multifamily Fee Gross 3,840,000 3,828,332 0.27
Industrial Fee 3,800,000 3,797,077 0.26
Retail Fee 3,800,000 3,736,335 0.26
Multifamily Fee AIMCO 3,685,000 3,642,030 0.25
- -----------------------------------------------------------------------------------------------------------------------------------
Retail Fee 3,500,000 3,497,339 0.24
Hospital, Specialized Fee 3,500,000 3,492,543 0.24
Retail Fee Paul 3,415,000 3,401,529 0.24
Nursing, Skilled/Intermediate Care Fee 3,400,000 3,385,924 0.24
Retail Fee 3,375,000 3,369,718 0.23
- -----------------------------------------------------------------------------------------------------------------------------------
Office Fee Stevenson/Bean 3,370,000 3,365,150 0.23
Multifamily Fee Gross 3,320,000 3,309,892 0.23
Office Fee 3,270,000 3,264,883 0.23
Multifamily Fee AIMCO 3,301,100 3,262,607 0.23
Multifamily Fee AIMCO 3,260,278 3,222,261 0.22
- -----------------------------------------------------------------------------------------------------------------------------------
Multifamily Fee AIMCO 3,162,500 3,125,623 0.22
Multifamily Fee Elkor 3,030,000 3,030,000 0.21
Multifamily Fee Herrick Herrick 2,587,500 2,583,724 0.18
Multifamily Fee Herrick Herrick 412,500 411,898 0.03
------- ------- ----
- -----------------------------------------------------------------------------------------------------------------------------------
3,000,000 2,995,622 0.21
Retail Fee 3,000,000 2,995,282 0.21
Industrial Fee 3,000,000 2,992,565 0.21
Office Fee 2,900,000 2,897,769 0.20
- -----------------------------------------------------------------------------------------------------------------------------------
Office Fee Shinohara Shinohara 1,410,000 1,407,867 0.10
Industrial Fee Shinohara Shinohara 1,462,500 1,460,287 0.10
--------- --------- ----
2,872,500 2,868,154 0.20
Multifamily Fee AIMCO 2,901,250 2,867,419 0.20
Multifamily Fee AIMCO 2,874,703 2,841,182 0.20
- -----------------------------------------------------------------------------------------------------------------------------------
Mixed Use Fee Margolias 2,820,000 2,811,337 0.20
Multifamily Fee Gross 2,800,000 2,792,868 0.19
Retail Fee Paul 2,800,000 2,788,955 0.19
Retail Fee 2,750,000 2,739,810 0.19
Industrial Fee 2,750,000 2,739,475 0.19
- -----------------------------------------------------------------------------------------------------------------------------------
Multifamily Fee AIMCO 2,761,550 2,729,348 0.19
Retail Fee 2,725,000 2,717,091 0.19
Multifamily Fee 2,700,000 2,695,791 0.19
Multifamily Fee 2,700,000 2,693,361 0.19
Nursing, Skilled/Intermediate Care Fee 2,686,600 2,681,087 0.19
- -----------------------------------------------------------------------------------------------------------------------------------
Office Fee 2,500,000 2,498,034 0.17
Office Fee 2,500,000 2,494,343 0.17
Hospitality Fee 2,500,000 2,494,282 0.17
Multifamily Fee 2,485,000 2,481,051 0.17
Multifamily Fee AIMCO 2,442,550 2,414,068 0.17
- -----------------------------------------------------------------------------------------------------------------------------------
Retail Fee 2,400,000 2,392,065 0.17
Industrial Fee 2,350,000 2,344,187 0.16
Multifamily Fee AIMCO 2,350,700 2,323,289 0.16
Multifamily Fee AIMCO 2,328,419 2,301,268 0.16
Retail Fee 2,300,000 2,296,650 0.16
- -----------------------------------------------------------------------------------------------------------------------------------
Retail Fee 2,300,000 2,296,429 0.16
Retail Fee 2,300,000 2,296,307 0.16
Retail Fee Breeden 2,287,000 2,280,106 0.16
Office Fee 2,260,000 2,252,309 0.16
Multifamily Fee AIMCO 2,256,308 2,229,998 0.16
- -----------------------------------------------------------------------------------------------------------------------------------
Retail Fee 2,200,000 2,197,427 0.15
Independent/Assisted Living Fee 2,200,000 2,195,182 0.15
Industrial Fee 2,200,000 2,193,729 0.15
Multifamily Fee AIMCO 2,147,420 2,122,380 0.15
Multifamily Fee AIMCO 2,137,086 2,112,166 0.15
- -----------------------------------------------------------------------------------------------------------------------------------
Industrial Fee
Industrial Fee
2,100,000 2,097,412 0.15
Multifamily Fee AIMCO 2,119,735 2,095,017 0.15
- -----------------------------------------------------------------------------------------------------------------------------------
Multifamily Fee AIMCO 2,102,161 2,077,648 0.14
Office Fee Margolias 2,050,000 2,043,703 0.14
Office Fee Margolias 2,025,000 2,018,780 0.14
Multifamily Fee Gross 1,992,000 1,987,393 0.14
Industrial Fee James F. Knott 1,900,000 1,810,552 0.13
- -----------------------------------------------------------------------------------------------------------------------------------
Office Fee Margolias 1,800,000 1,794,471 0.12
Multifamily Fee
Multifamily Fee
1,700,000 1,686,911 0.12
- -----------------------------------------------------------------------------------------------------------------------------------
Office Fee 1,700,000 1,677,521 0.12
Multifamily Fee AIMCO 1,674,017 1,654,497 0.12
Independent/Assisted Living Fee 1,656,000 1,649,298 0.11
Office Fee 1,650,000 1,648,775 0.11
Nursing, Skilled/Intermediate Care Fee 1,665,000 1,646,502 0.11
- -----------------------------------------------------------------------------------------------------------------------------------
Retail Fee Breeden 1,600,000 1,595,177 0.11
Multifamily Fee 1,600,000 1,595,009 0.11
Multifamily Fee AIMCO 1,587,911 1,569,395 0.11
Retail Fee 1,500,000 1,490,911 0.10
Multifamily Fee 1,450,000 1,446,021 0.10
- -----------------------------------------------------------------------------------------------------------------------------------
Mixed Use Fee 1,445,000 1,442,716 0.10
Multifamily Fee 1,420,000 1,413,845 0.10
Multifamily Fee AIMCO 1,274,814 1,259,949 0.09
Multifamily Fee McGrath 1,250,000 1,245,419 0.09
Multifamily Fee AIMCO 1,241,625 1,227,147 0.09
- -----------------------------------------------------------------------------------------------------------------------------------
Multifamily Fee AIMCO 1,160,988 1,147,450 0.08
Office Fee Margolias 1,140,000 1,136,498 0.08
Office Fee Margolias 1,050,000 1,046,775 0.07
Multifamily Fee McGrath 1,037,000 1,033,893 0.07
Multifamily Fee 1,030,000 1,027,554 0.07
- -----------------------------------------------------------------------------------------------------------------------------------
Retail Fee 1,000,000 998,840 0.07
Industrial Fee 1,000,000 994,454 0.07
Nursing, Rehabilitation Fee 1,000,000 988,567 0.07
Retail Fee 910,000 905,063 0.06
Mixed Use Fee Margolias 761,000 758,662 0.05
- -----------------------------------------------------------------------------------------------------------------------------------
Multifamily Fee McGrath 640,000 637,654 0.04
</TABLE>
<TABLE>
<CAPTION>
ORIGINAL REMAINING ORIGINAL REMAINING
MORTGAGE TERM TO TERM TO AMORTIZATION AMORTIZATION
INTEREST RATE MATURITY OR ARD MATURITY OR ARD TERM TERM ORIGINATION
TYPE ACCRUAL METHOD (%) (MONTHS) (MONTHS) (MONTHS) (MONTHS) DATE
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
FIXED ACTUAL / 360 6.810 119 117 300 298 2/6/98
- -----------------------------------------------------------------------------------------------------------------------------------
Fixed Actual / 360 7.500 120 119 300 299 3/13/98
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
FIXED 30 / 360 7.143 120 116 360 356 12/16/97
Fixed 30 / 360 7.340 120 119 300 299 3/3/98
Fixed Actual / 360 6.850 180 176 333 333 12/22/97
Fixed 30 / 360 7.050 120 116 360 356 11/14/97
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
FIXED 30 / 360 6.980 120 114 180 174 10/31/97
Fixed 30 / 360 7.360 180 177 360 357 1/29/98
- -----------------------------------------------------------------------------------------------------------------------------------
FIXED 30 / 360 6.750 120 117 300 297 1/16/98
Fixed 30 / 360 7.400 132 128 360 356 12/22/97
- -----------------------------------------------------------------------------------------------------------------------------------
Fixed 30 / 360 7.250 120 115 360 355 11/10/97
Fixed 30 / 360 7.250 120 115 360 355 11/10/97
Fixed 30 / 360 7.250 120 115 360 355 11/10/97
Fixed 30 / 360 7.405 120 119 360 359 3/19/98
- -----------------------------------------------------------------------------------------------------------------------------------
Fixed 30 / 360 6.910 82 80 82 80 2/9/98
Fixed 30 / 360 6.910 120 118 120 118 2/9/98
Fixed Actual / 360 6.790 120 116 360 356 12/31/97
- -----------------------------------------------------------------------------------------------------------------------------------
Fixed 30 / 360 7.375 120 118 360 358 2/11/98
Fixed 30 / 360 7.440 120 116 360 356 12/31/97
Fixed 30 / 360 7.630 126 122 300 296 12/18/97
Fixed Actual / 360 7.390 120 118 360 358 2/27/98
- -----------------------------------------------------------------------------------------------------------------------------------
FIXED 30 / 360 7.020 84 82 360 358 2/11/98
Fixed Actual / 360 8.450 120 116 311 307 12/11/97
- -----------------------------------------------------------------------------------------------------------------------------------
Fixed Actual / 360 8.450 120 116 311 307 12/11/97
Fixed 30 / 360 7.750 123 121 300 298 2/10/98
Fixed Actual / 360 7.010 120 118 300 298 2/27/98
Fixed 30 / 360 7.300 120 116 360 356 12/30/97
- -----------------------------------------------------------------------------------------------------------------------------------
Fixed 30 / 360 7.460 120 116 360 356 12/31/97
Fixed 30 / 360 7.650 180 178 360 358 2/5/98
Fixed 30 / 360 7.380 120 115 300 295 11/25/97
Fixed Actual / 360 7.770 183 181 300 298 2/10/98
Fixed 30 / 360 7.530 84 80 360 356 12/29/97
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
FIXED 30 / 360 7.220 120 116 360 356 12/23/97
Fixed 30 / 360 7.380 120 115 300 295 11/25/97
Fixed Actual / 360 6.700 120 117 360 357 1/21/98
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
FIXED 30 / 360 7.367 120 115 300 295 11/21/97
Fixed 30 / 360 7.019 240 234 240 234 10/31/97
Fixed 30 / 360 6.940 120 118 360 358 2/13/98
Fixed 30 / 360 7.560 120 115 360 355 11/26/97
Fixed Actual / 360 7.770 183 181 300 298 2/12/98
- -----------------------------------------------------------------------------------------------------------------------------------
Fixed Actual / 360 7.130 120 118 360 358 2/10/98
Fixed 30 / 360 7.580 120 115 360 355 11/12/97
Fixed 30 / 360 7.019 240 234 240 234 10/31/97
Fixed Actual / 360 7.625 123 122 300 299 3/5/98
Fixed 30 / 360 7.430 121 117 360 356 12/18/97
- -----------------------------------------------------------------------------------------------------------------------------------
Fixed 30 / 360 7.019 240 234 240 234 10/31/97
Fixed 30 / 360 6.890 180 179 360 359 3/16/98
Fixed 30 / 360 7.420 120 116 360 356 12/24/97
Fixed 30 / 360 7.019 240 234 240 234 10/31/97
- -----------------------------------------------------------------------------------------------------------------------------------
Fixed 30 / 360 7.100 120 117 336 333 1/27/98
Fixed 30 / 360 7.380 120 115 360 355 11/26/97
Fixed 30 / 360 7.280 120 115 300 295 11/24/97
Fixed 30 / 360 7.170 120 117 360 357 1/30/98
Fixed 30 / 360 7.019 240 234 240 234 10/31/97
- -----------------------------------------------------------------------------------------------------------------------------------
Fixed 30 / 360 7.780 120 118 300 298 2/26/98
Fixed 30 / 360 6.920 60 57 360 357 1/28/98
Fixed 30 / 360 7.500 120 116 300 296 12/19/97
Fixed 30 / 360 8.125 120 118 300 298 2/27/98
Fixed 30 / 360 7.210 240 236 240 236 12/22/97
- -----------------------------------------------------------------------------------------------------------------------------------
Fixed 30 / 360 7.110 120 117 360 357 1/8/98
Fixed 30 / 360 7.125 120 118 360 358 2/23/98
Fixed 30 / 360 7.375 120 118 300 298 2/12/98
Fixed 30 / 360 7.900 120 115 360 355 11/25/97
Fixed Actual / 360 7.230 120 119 360 359 3/2/98
- -----------------------------------------------------------------------------------------------------------------------------------
Fixed 30 / 360 7.750 120 116 300 296 12/19/97
Fixed 30 / 360 7.270 120 116 360 360 12/31/97
Fixed 30 / 360 7.019 240 234 240 234 10/31/97
Fixed 30 / 360 7.110 180 179 360 359 3/31/98
Fixed 30 / 360 7.550 180 151 264 235 12/18/95
- -----------------------------------------------------------------------------------------------------------------------------------
Fixed Actual / 360 7.625 120 119 360 359 2/26/98
Fixed 30 / 360 7.170 180 179 360 359 3/16/98
Fixed 30 / 360 7.720 180 178 360 358 2/12/98
Fixed 30 / 360 7.080 120 118 300 298 2/12/98
Fixed 30 / 360 7.750 120 115 360 355 11/21/97
- -----------------------------------------------------------------------------------------------------------------------------------
FIXED 30 / 360 7.250 120 118 360 358 2/27/98
- -----------------------------------------------------------------------------------------------------------------------------------
Fixed 30 / 360 7.200 120 118 300 298 2/24/98
Fixed 30 / 360 7.000 120 117 360 357 1/16/98
Fixed 30 / 360 7.019 240 234 240 234 10/31/97
Fixed 30 / 360 7.375 120 117 216 213 1/20/98
Fixed 30 / 360 7.019 240 234 240 234 10/31/97
- -----------------------------------------------------------------------------------------------------------------------------------
Fixed 30 / 360 7.320 120 118 360 358 1/26/98
Fixed 30 / 360 7.019 240 234 240 234 10/31/97
Fixed 30 / 360 8.875 120 113 300 293 9/10/97
Fixed 30 / 360 7.019 240 234 240 234 10/31/97
Fixed 30 / 360 7.070 120 118 360 358 2/13/98
- -----------------------------------------------------------------------------------------------------------------------------------
Fixed 30 / 360 7.019 240 234 240 234 10/31/97
Fixed 30 / 360 7.500 186 182 300 296 12/8/97
Fixed 30 / 360 7.320 120 118 360 358 2/24/98
Fixed 30 / 360 7.730 120 118 300 298 2/26/98
Fixed 30 / 360 7.019 240 234 240 234 10/31/97
- -----------------------------------------------------------------------------------------------------------------------------------
Fixed 30 / 360 7.019 240 234 240 234 10/31/97
Fixed 30 / 360 7.430 120 116 360 356 12/2/97
Fixed 30 / 360 7.320 120 119 360 359 3/5/98
Fixed 30 / 360 7.125 150 146 150 146 12/22/97
Fixed 30 / 360 7.019 240 234 240 234 10/31/97
- -----------------------------------------------------------------------------------------------------------------------------------
Fixed 30 / 360 7.380 120 119 360 359 3/13/98
Fixed 30 / 360 7.940 120 118 300 298 2/2/98
Fixed 30 / 360 6.800 240 238 240 238 2/19/98
Fixed Actual / 360 8.160 120 116 310 306 12/31/97
Fixed 30 / 360 7.250 120 118 360 358 2/26/98
- -----------------------------------------------------------------------------------------------------------------------------------
Fixed 30 / 360 7.670 180 178 360 358 2/12/98
Fixed 30 / 360 7.420 120 116 360 356 12/2/97
Fixed 30 / 360 7.250 120 118 360 358 2/27/98
Fixed 30 / 360 7.019 240 234 240 234 10/31/97
Fixed 30 / 360 7.019 240 234 240 234 10/31/97
- -----------------------------------------------------------------------------------------------------------------------------------
Fixed 30 / 360 7.019 240 234 240 234 10/31/97
Fixed 30 / 360 7.070 120 116 360 360 12/31/97
Fixed 30 / 360 7.600 120 118 360 358 2/27/98
Fixed 30 / 360 7.600 120 118 360 358 2/27/98
- -----------------------------------------------------------------------------------------------------------------------------------
Fixed Actual / 360 7.050 120 118 360 358 2/17/98
Fixed 30 / 360 6.990 120 117 360 357 1/12/98
Fixed 30 / 360 7.320 120 119 360 359 3/6/98
- -----------------------------------------------------------------------------------------------------------------------------------
Fixed 30 / 360 7.420 120 118 360 358 2/2/98
Fixed 30 / 360 7.420 120 118 360 358 2/2/98
Fixed 30 / 360 7.019 240 234 240 234 10/31/97
Fixed 30 / 360 7.019 240 234 240 234 10/31/97
- -----------------------------------------------------------------------------------------------------------------------------------
Fixed 30 / 360 7.375 120 116 360 356 12/12/97
Fixed 30 / 360 6.850 120 117 360 357 1/15/98
Fixed 30 / 360 6.800 240 238 240 238 2/19/98
Fixed 30 / 360 7.570 120 115 360 355 11/20/97
Fixed 30 / 360 7.050 120 118 240 238 2/13/98
- -----------------------------------------------------------------------------------------------------------------------------------
Fixed 30 / 360 7.019 240 234 240 234 10/31/97
Fixed 30 / 360 7.660 120 116 360 356 12/24/97
Fixed 30 / 360 7.270 120 118 360 358 2/26/98
Fixed 30 / 360 7.030 120 117 360 357 1/16/98
Fixed Actual / 360 7.980 120 118 300 298 2/5/98
- -----------------------------------------------------------------------------------------------------------------------------------
Fixed 30 / 360 7.210 120 119 360 359 3/19/98
Fixed 30 / 360 7.450 84 81 360 357 1/29/98
Fixed 30 / 360 7.500 180 178 300 298 2/19/98
Fixed Actual / 360 7.000 120 118 360 358 2/23/98
Fixed 30 / 360 7.019 240 234 240 234 10/31/97
- -----------------------------------------------------------------------------------------------------------------------------------
Fixed 30 / 360 7.750 144 141 300 297 1/12/98
Fixed 30 / 360 7.000 120 117 360 357 1/8/98
Fixed 30 / 360 7.019 240 234 240 234 10/31/97
Fixed 30 / 360 7.019 240 234 240 234 10/31/97
Fixed 30 / 360 7.610 120 118 360 358 2/9/98
- -----------------------------------------------------------------------------------------------------------------------------------
Fixed 30 / 360 7.290 120 118 360 358 2/4/98
Fixed 30 / 360 7.120 120 118 360 358 2/4/98
Fixed 30 / 360 7.470 120 116 360 356 12/23/97
Fixed 30 / 360 7.570 120 117 300 297 1/22/98
Fixed 30 / 360 7.019 240 234 240 234 10/31/97
- -----------------------------------------------------------------------------------------------------------------------------------
Fixed 30 / 360 7.340 120 119 300 299 3/23/98
Fixed 30 / 360 7.770 120 118 300 298 2/13/98
Fixed 30 / 360 7.750 120 116 360 356 12/30/97
Fixed 30 / 360 7.019 240 234 240 234 10/31/97
Fixed 30 / 360 7.019 240 234 240 234 10/31/97
- -----------------------------------------------------------------------------------------------------------------------------------
FIXED 30 / 360 7.010 120 119 300 299 3/13/98
Fixed 30 / 360 7.019 240 234 240 234 10/31/97
- -----------------------------------------------------------------------------------------------------------------------------------
Fixed 30 / 360 7.019 240 234 240 234 10/31/97
Fixed 30 / 360 7.375 120 116 360 356 12/12/97
Fixed 30 / 360 7.375 132 128 360 356 12/12/97
Fixed 30 / 360 7.340 120 117 360 357 1/30/98
Fixed 30 / 360 7.550 180 151 264 235 12/18/95
- -----------------------------------------------------------------------------------------------------------------------------------
Fixed 30 / 360 7.375 120 116 360 356 12/12/97
FIXED 30 / 360 7.050 120 116 240 236 12/30/97
- -----------------------------------------------------------------------------------------------------------------------------------
Fixed 30 / 360 7.250 108 106 108 106 2/27/98
Fixed 30 / 360 7.019 240 234 240 234 10/31/97
Fixed Actual / 360 8.300 120 116 310 306 12/31/97
Fixed 30 / 360 7.500 120 119 360 359 3/12/98
Fixed Actual / 360 7.620 120 118 120 118 2/26/98
- -----------------------------------------------------------------------------------------------------------------------------------
Fixed 30 / 360 7.470 120 116 360 356 12/23/97
Fixed 30 / 360 7.130 180 179 180 179 3/10/98
Fixed 30 / 360 7.019 240 234 240 234 10/31/97
Fixed 30 / 360 7.500 180 178 180 178 2/3/98
Fixed 30 / 360 7.940 120 116 360 356 12/9/97
- -----------------------------------------------------------------------------------------------------------------------------------
Fixed 30 / 360 7.200 120 118 360 358 2/3/98
Fixed 30 / 360 7.875 120 116 300 296 12/11/97
Fixed 30 / 360 7.019 240 234 240 234 10/31/97
Fixed 30 / 360 7.625 84 79 360 355 11/21/97
Fixed 30 / 360 7.019 240 234 240 234 10/31/97
- -----------------------------------------------------------------------------------------------------------------------------------
Fixed 30 / 360 7.019 240 234 240 234 10/31/97
Fixed 30 / 360 7.375 120 116 360 356 12/12/97
Fixed 30 / 360 7.375 120 116 360 356 12/12/97
Fixed 30 / 360 7.500 84 80 360 356 12/19/97
Fixed 30 / 360 7.265 120 118 300 298 2/23/98
- -----------------------------------------------------------------------------------------------------------------------------------
Fixed 30 / 360 7.390 120 119 300 299 3/2/98
Fixed 30 / 360 7.750 120 115 300 295 11/7/97
Fixed 30 / 360 8.240 180 176 180 176 12/18/97
Fixed 30 / 360 7.540 120 117 240 237 1/30/98
Fixed 30 / 360 7.375 120 116 360 356 12/12/97
- -----------------------------------------------------------------------------------------------------------------------------------
Fixed 30 / 360 7.625 84 79 360 355 11/7/97
</TABLE>
<TABLE>
<CAPTION>
FIRST MATURITY
PAYMENT OR ARD BALLOON BALLOON OR ARD PREPAYMENT PAYMENTS ANNUAL
DATE DATE FLAG BALANCE PROVISIONS PER YEAR DEBT SERVICE
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------------
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4/1/98 2/1/08 BALLOON $177,881,691 LOCK/34_DEFEASANCE/85 12 $19,014,909
- --------------------------------------------------------------------------------------------------------------------------------
5/1/98 4/1/08 Hyper Amortizing 49,573,393 LOCK/47_Defeasance/66_0%/7 12 5,551,667
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
2/1/98 1/1/08 HYPER AMORTIZING 53,381,291 LOCK/59_DEFEASANCE/55_0%6 12 5,021,508
5/1/98 4/1/08 Hyper Amortizing 38,893,627 LOCK/35_Defeasance/79_0%/6 12 4,284,258
2/1/98 12/31/12 Balloon 35,018,788 >1% or YM/167_0%/13 12 3,661,558
1/10/98 12/10/07 Balloon 38,660,871 LOCK/2_>1% or YM/112_0%/6 12 3,610,785
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
12/1/97 11/1/07 HYPER AMORTIZING 16,737,542 LOCK/35_DEFEASANCE/85_0%/0 12 3,975,186
3/1/98 2/1/13 Balloon 26,263,222 LOCK/60_>1% or YM/114_0%/6 12 2,896,543
- --------------------------------------------------------------------------------------------------------------------------------
3/1/98 2/1/08 BALLOON 26,952,210 >1% OR YM/114_0%/6 12 2,862,032
2/1/98 1/1/09 Balloon 21,582,431 LOCK/1_>1% or YM/124_0%/7 12 2,118,682
- --------------------------------------------------------------------------------------------------------------------------------
1/1/98 12/1/07 Balloon 7,767,931 LOCK/1_>1% or YM/113_0%/6 12 736,750
1/1/98 12/1/07 Balloon 6,818,517 LOCK/1_>1% or YM/113_0%/6 12 646,703
1/1/98 12/1/07 Balloon 4,833,380 LOCK/1_>1% or YM/113_0%/6 12 458,422
--------- -------
19,419,828 1,841,876
5/1/98 4/1/08 Hyper Amortizing 17,980,708 LOCK/35_Defeasance/82_0%3 12 1,725,708
- --------------------------------------------------------------------------------------------------------------------------------
3/10/98 12/10/04 Fully Amortizing 0 LOCK/35_Defeasance/41_0%/6 12 2,979,254
3/10/98 2/10/08 Fully Amortizing 0 LOCK/35_Defeasance/79_0%/6 12 600,000
- -------
0 3,579,254
2/1/98 1/1/08 Balloon 14,548,329 LOCK/4_>1% or YM/110_0%/6 12 1,341,832
- --------------------------------------------------------------------------------------------------------------------------------
4/1/98 3/1/08 Balloon 14,151,632 LOCK/1_>1% or YM/113_0%/6 12 1,355,105
2/1/98 1/1/08 Balloon 13,608,743 >1% or YM/114_0%/6 12 1,309,588
2/1/98 7/1/08 Balloon 12,094,710 LOCK/1_>1% or YM/119_0%/6 12 1,381,320
4/1/98 3/1/08 Balloon 13,215,127 LOCK/37_Defeasance/81_0%/2 12 1,277,452
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4/1/98 3/1/05 BALLOON 12,217,548 >1% OR YM/78_0%/6 12 1,071,967
2/1/98 1/1/08 Balloon 6,007,926 >1% or YM/108_0%/12 12 692,807
- --------------------------------------------------------------------------------------------------------------------------------
2/1/98 1/1/08 Balloon 4,839,719 >1% or YM/108_0%/12 12 558,095
--------- -------
10,847,645 1,250,902
4/1/98 6/1/08 Hyper Amortizing 9,543,524 LOCK/35_Defeasance/81_0%/7 12 1,087,674
4/1/98 3/1/08 Balloon 9,466,433 LOCK/36_Defeasance/78_0%/6 12 1,028,299
2/1/98 1/1/08 Hyper Amortizing 10,369,001 LOCK/35_Defeasance/82_0%/3 12 987,222
- --------------------------------------------------------------------------------------------------------------------------------
2/1/98 1/1/08 Balloon 10,059,326 >1% or YM/114_0%/6 12 969,497
4/1/98 3/1/13 Hyper Amortizing 8,531,857 LOCK/26_Defeasance/151_0%/3 12 957,844
1/1/98 12/1/07 Balloon 8,939,341 >1% or YM/108_0%/12 12 987,125
4/1/98 6/1/13 Hyper Amortizing 6,443,931 LOCK/47_Defeasance/129_0%/7 12 949,223
2/1/98 1/1/05 Balloon 9,187,385 >1% or YM/77_0%/7 12 841,524
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- --------------------------------------------------------------------------------------------------------------------------------
2/1/98 1/1/08 BALLOON 8,625,131 LOCK/1_>1% OR YM/112_0%/7 12 816,171
1/1/98 12/1/07 Balloon 7,509,046 >1% or YM/108_0%/12 12 829,185
3/1/98 2/1/08 Balloon 7,855,978 LOCK/1_>1% or YM/112_0%/7 12 719,368
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
1/1/98 12/1/07 HYPER AMORTIZING 7,228,390 LOCK/35_DEFEASANCE/82_0%/3 12 797,555
12/1/97 11/1/17 Fully Amortizing 0 >1% or YM/227_0%/13 12 845,976
4/1/98 3/1/08 Hyper Amortizing 7,626,489 LOCK/59_Defeasance/58_0%3 12 706,245
1/1/98 12/1/07 Balloon 7,561,112 LOCK/1_>1% or YM/113_0%/6 12 734,274
4/1/98 6/1/13 Hyper Amortizing 5,385,505 LOCK/48_Defeasance/128_0%/7 12 793,312
- --------------------------------------------------------------------------------------------------------------------------------
4/1/98 3/1/08 Balloon 7,392,322 >1% or YM/114_0%/6 12 700,342
1/1/98 11/30/07 Balloon 7,303,570 LOCK/2_>1% or YM/110_0%/8 12 710,338
12/1/97 11/1/17 Fully Amortizing 0 >1% or YM/227_0%/13 12 750,073
5/1/98 7/1/08 Hyper Amortizing 6,161,417 LOCK/47_Defeasance/70_0%/6 12 701,682
2/1/98 2/1/08 Balloon 6,487,709 LOCK/1_>1% or YM/114_0%/6 12 624,985
- --------------------------------------------------------------------------------------------------------------------------------
12/1/97 11/1/17 Fully Amortizing 0 >1% or YM/227_0%/13 12 691,142
5/1/98 4/1/13 Hyper Amortizing 5,380,257 LOCK/59_Defeasance/118_0%/3 12 576,348
2/1/98 1/1/08 Balloon 6,238,177 >1% or YM/114_0%/6 12 599,395
12/1/97 11/1/17 Fully Amortizing 0 >1% or YM/227_0%/13 12 663,213
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3/1/98 1/31/08 Balloon 5,848,216 >1% or YM/60_<3% or YM/36_<2%
or YM/12_<1% or YM/6_0%/6 12 576,415
1/1/98 12/1/07 Hyper Amortizing 6,059,481 LOCK/59_Defeasance/58_0%/3 12 580,453
1/1/98 12/1/07 Balloon 5,428,297 >1% or YM/107_0%/13 12 595,737
3/1/98 2/1/08 Balloon 5,858,367 LOCK/1_>1% or YM/113_0%/6 12 552,235
12/1/97 11/1/17 Fully Amortizing 0 >1% or YM/227_0%/13 12 631,582
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4/1/98 3/1/08 Balloon 5,380,629 LOCK/26_Defeasance/88_0%/6 12 608,869
3/1/98 2/1/03 Balloon 6,136,806 >1% or YM/36_0%/24 12 516,732
2/1/98 12/31/07 Hyper Amortizing 4,982,344 >1% or YM/113_0%/7 12 554,243
4/1/98 3/1/08 Balloon 5,032,884 LOCK/60_>1% or YM/54_0%/6 12 581,529
2/1/98 1/1/18 Fully Amortizing 0 LOCK/35_Defeasance/108_0%/97 12 586,238
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3/1/98 2/1/08 Balloon 4,989,922 LOCK/1_>1% or YM/112_0%/7 12 468,204
4/1/98 3/1/08 Balloon 4,948,624 LOCK/1_>1% or YM/113_0%/6 12 464,866
4/1/98 3/1/08 Balloon 4,568,379 LOCK/3_>1% or YM/111_0%/6 12 504,307
1/1/98 12/1/07 Balloon 5,011,834 LOCK/1_>1% or YM/113_0%/6 12 499,315
5/1/98 4/1/08 Balloon 4,929,672 LOCK/25_Defeasance/88_0%/7 12 470,622
- --------------------------------------------------------------------------------------------------------------------------------
2/1/98 12/31/07 Hyper Amortizing 4,573,977 >1% or YM/113_0%/7 12 516,645
2/1/98 1/1/08 Balloon 4,959,218 >1% or YM/114_0%/6 12 452,362
12/1/97 11/1/17 Fully Amortizing 0 >1% or YM/227_0%/13 12 518,455
5/1/98 4/1/13 Hyper Amortizing 4,043,719 LOCK/59_Defeasance/118_0%/3 12 439,143
1/1/96 12/1/10 Balloon 2,791,605 LOCK/48_5%/24_4%/12_3%/
12_2%/12_1%/66_0%/6 12 514,650
- --------------------------------------------------------------------------------------------------------------------------------
5/1/98 4/1/08 Balloon 4,536,959 >1% or YM/114_0%/6 12 446,490
5/1/98 4/1/13 Hyper Amortizing 3,725,169 LOCK/59_Defeasance/118_0%/3 12 406,055
4/1/98 3/1/13 Balloon 3,801,470 >1% or YM/174_0%/6 12 428,604
4/1/98 3/1/08 Hyper Amortizing 3,940,471 LOCK/47_Defeasance/67_0%/6 12 427,134
1/1/98 12/1/07 Balloon 4,057,887 >1% or YM/114_0%/6 12 399,758
- --------------------------------------------------------------------------------------------------------------------------------
4/1/98 3/1/08 BALLOON 3,996,170 LOCK/26_DEFEASANCE/94_0%/0 12 379,017
- --------------------------------------------------------------------------------------------------------------------------------
4/1/98 3/1/08 Hyper Amortizing 3,597,758 LOCK/26_Defeasance/91_0%/3 12 392,895
3/1/98 2/1/08 Balloon 3,861,558 >1% or YM/114_0%/6 12 359,263
12/1/97 11/1/17 Fully Amortizing 0 >1% or YM/227_0%/13 12 419,811
3/1/98 2/1/08 Balloon 2,666,396 LOCK/1_>1% or YM/113_0%/6 12 442,230
12/1/97 11/1/17 Fully Amortizing 0 >1% or YM/227_0%/13 12 400,787
- --------------------------------------------------------------------------------------------------------------------------------
4/1/98 3/1/08 Hyper Amortizing 3,630,790 LOCK/59_Defeasance/57_0%/4 12 346,213
12/1/97 11/1/17 Fully Amortizing 0 >1% or YM/227_0%/13 12 394,279
11/1/97 10/1/07 Balloon 3,465,027 >1% or YM/114_0%/6 12 418,649
12/1/97 11/1/17 Fully Amortizing 0 >1% or YM/227_0%/13 12 390,231
4/1/98 3/1/08 Hyper Amortizing 3,524,080 LOCK/35_Defeasance/82_0%/3 12 329,645
- --------------------------------------------------------------------------------------------------------------------------------
12/1/97 11/1/17 Fully Amortizing 0 >1% or YM/227_0%/13 12 385,806
2/1/98 7/1/13 Balloon 2,435,011 LOCK/2_>1% or YM/178_0%/6 12 359,150
4/1/98 3/1/08 Balloon 3,457,896 >1% or YM/113_0%/7 12 329,727
4/1/98 3/1/08 Hyper Amortizing 3,208,134 LOCK/35_Defeasance/82_0%/3 12 361,928
12/1/97 11/1/17 Fully Amortizing 0 >1% or YM/227_0%/13 12 366,761
- --------------------------------------------------------------------------------------------------------------------------------
12/1/97 11/1/17 Fully Amortizing 0 >1% or YM/227_0%/13 12 364,915
2/1/98 1/1/08 Balloon 3,327,768 >1% or YM/114_0%/6 12 319,992
5/1/98 4/1/08 Hyper Amortizing 3,285,001 LOCK/71_YM or 1%/46_0%3 12 313,240
2/1/98 7/1/10 Fully Amortizing 0 >1% or YM/143_0%/7 12 460,053
12/1/97 11/1/17 Fully Amortizing 0 >1% or YM/227_0%/13 12 343,342
- --------------------------------------------------------------------------------------------------------------------------------
5/1/98 4/1/08 Hyper Amortizing 3,029,737 LOCK/59_Defeasance/58_0%/3 12 290,227
4/1/98 3/1/08 Balloon 2,822,395 >1% or YM/108_0%/12 12 322,495
4/1/98 3/1/18 Fully Amortizing 0 >1% or YM/234_0%/6 12 312,817
2/1/98 1/1/08 Balloon 2,814,115 >1% or YM/114_0%/6 12 319,238
4/1/98 3/1/08 Balloon 2,912,974 LOCK/2_>1% or YM/112_0%/6 12 276,281
- --------------------------------------------------------------------------------------------------------------------------------
4/1/98 3/1/13 Balloon 2,557,603 >1% or YM/174_0%/6 12 287,485
2/1/98 1/1/08 Balloon 2,876,494 >1% or YM/114_0%/6 12 276,388
4/1/98 3/1/08 Balloon 2,822,349 >1% or YM/114_0%/6 12 267,686
12/1/97 11/1/17 Fully Amortizing 0 >1% or YM/227_0%/13 12 307,572
12/1/97 11/1/17 Fully Amortizing 0 >1% or YM/227_0%/13 12 303,769
- --------------------------------------------------------------------------------------------------------------------------------
12/1/97 11/1/17 Fully Amortizing 0 >1% or YM/227_0%/13 12 294,659
2/1/98 1/1/08 Balloon 2,715,021 >1% or YM/114_0%/6 12 243,616
4/1/98 3/1/08 Balloon 2,250,741 LOCK/26_Defeasance/87_0%/7 12 219,236
4/1/98 3/1/08 Balloon 358,813 LOCK/26_Defeasance/87_0%/7 12 34,951
------- ------
- --------------------------------------------------------------------------------------------------------------------------------
2,609,554 254,187
4/1/98 3/1/08 Balloon 2,583,783 >1% or YM/114_0%/6 12 243,263
3/1/98 2/1/08 Balloon 2,573,766 LOCK/1_>1% or YM/112_0%/7 12 239,267
5/1/98 4/1/08 Hyper Amortizing 2,506,972 LOCK/47_Defeasance/70_0%/3 12 239,052
- --------------------------------------------------------------------------------------------------------------------------------
4/1/98 3/1/08 Balloon 1,221,643 LOCK/1_>1% or YM/113_0%/6 12 117,382
4/1/98 3/1/08 Balloon 1,267,129 LOCK/1_>1% or YM/113_0%/6 12 121,752
--------- -------
2,488,772 239,134
12/1/97 11/1/17 Fully Amortizing 0 >1% or YM/227_0%/13 12 270,318
12/1/97 11/1/17 Fully Amortizing 0 >1% or YM/227_0%/13 12 267,844
- --------------------------------------------------------------------------------------------------------------------------------
2/1/98 1/1/08 Balloon 2,440,832 LOCK/1_>1% or YM/113_0%/6 12 233,724
3/1/98 2/1/08 Balloon 2,394,200 >1% or YM/114_0%/6 12 220,167
4/1/98 3/1/18 Fully Amortizing 0 >1% or YM/234_0%/6 12 256,482
1/1/98 12/1/07 Balloon 2,390,528 LOCK/1_>1% or YM/112_0%/7 12 232,325
4/1/98 3/1/08 Hyper Amortizing 1,839,307 LOCK/35_Defeasance/85_0%/0 12 256,840
- --------------------------------------------------------------------------------------------------------------------------------
12/1/97 11/1/17 Fully Amortizing 0 >1% or YM/227_0%/13 12 257,301
2/1/98 1/1/08 Balloon 2,373,426 LOCK/1_>1% or YM/113_0%/6 12 232,236
4/1/98 3/1/08 Balloon 2,331,440 LOCK/3_>1% or YM/111_0%/6 12 221,465
3/1/98 2/1/08 Balloon 2,318,567 LOCK/1_>1% or YM/114_0%/5 12 216,211
4/1/98 3/1/08 Balloon 2,175,299 >1% or YM/108_0%/12 12 250,946
- --------------------------------------------------------------------------------------------------------------------------------
5/1/98 4/1/08 Hyper Amortizing 2,155,790 LOCK/59_Defeasance/59_0%/2 12 203,840
3/1/98 2/1/05 Balloon 2,294,183 >1% or YM/78_0%/6 12 208,738
4/1/98 3/1/13 Hyper Amortizing 1,556,274 LOCK/59_Defeasance/118_0%/3 12 221,702
4/1/98 3/1/08 Balloon 2,137,722 LOCK/36_>1% or YM/78_0%/6 12 200,481
12/1/97 11/1/17 Fully Amortizing 0 >1% or YM/227_0%/13 12 227,579
- --------------------------------------------------------------------------------------------------------------------------------
3/1/98 2/1/10 Balloon 1,778,689 >1% or YM/114_0%/30 12 217,535
3/1/98 2/1/08 Balloon 2,016,591 LOCK/2_>1% or YM/112_0%/6 12 187,615
12/1/97 11/1/17 Fully Amortizing 0 >1% or YM/227_0%/13 12 219,021
12/1/97 11/1/17 Fully Amortizing 0 >1% or YM/227_0%/13 12 216,945
4/1/98 3/1/08 Balloon 2,001,093 LOCK/1_>1% or YM/112_0%/7 12 195,066
- --------------------------------------------------------------------------------------------------------------------------------
4/1/98 3/1/08 Balloon 1,986,943 LOCK/3_>1% or YM/111_0%/6 12 189,030
4/1/98 3/1/08 Balloon 1,979,222 LOCK/1_>1% or YM/113_0%/6 12 185,853
2/1/98 1/1/08 Balloon 1,983,688 LOCK/2_>1% or YM/113_0%/5 12 191,329
3/1/98 1/31/08 Balloon 1,804,977 >1% or YM/114_0%/6 12 201,651
12/1/97 11/1/17 Fully Amortizing 0 >1% or YM/227_0%/13 12 210,226
- --------------------------------------------------------------------------------------------------------------------------------
5/1/98 4/1/08 Hyper Amortizing 1,746,244 LOCK/35_Defeasance/82_0%/3 12 192,354
4/1/98 3/1/08 Balloon 1,766,314 >1% or YM/114_0%/6 12 199,754
2/1/98 1/1/08 Balloon 1,919,861 >1% or YM/114_0%/6 12 189,133
12/1/97 11/1/17 Fully Amortizing 0 >1% or YM/227_0%/13 12 200,081
12/1/97 11/1/17 Fully Amortizing 0 >1% or YM/227_0%/13 12 199,118
- --------------------------------------------------------------------------------------------------------------------------------
5/1/98 4/1/08 HYPER AMORTIZING 1,651,765 LOCK/59_DEFEASANCE/61_0%/0 12 178,269
12/1/97 11/1/17 Fully Amortizing 0 >1% or YM/227_0%/13 12 197,502
- --------------------------------------------------------------------------------------------------------------------------------
12/1/97 11/1/17 Fully Amortizing 0 >1% or YM/227_0%/13 12 195,864
2/1/98 1/1/08 Balloon 1,774,364 LOCK/1_>1% or YM/113_0%/6 12 169,906
2/1/98 1/1/09 Balloon 1,712,824 LOCK/1_>1% or YM/125_0%/6 12 167,834
3/1/98 2/1/08 Balloon 1,722,809 >1% or YM/114_0%/6 12 164,529
1/1/96 12/1/10 Balloon 961,738 LOCK/48_5%/24_4%/12_3%/
12_2%/12_1%/66_0%/6 12 177,305
- --------------------------------------------------------------------------------------------------------------------------------
2/1/98 1/1/08 Balloon 1,557,978 LOCK/1_>1% or YM/113_0%/6 12 149,186
2/1/98 1/1/08 BALLOON 1,137,026 >1% OR YM/114_0%/6 12 158,774
- --------------------------------------------------------------------------------------------------------------------------------
4/1/98 3/1/07 Fully Amortizing 0 >1% or YM/102_0%/6 12 257,719
12/1/97 11/1/17 Fully Amortizing 0 >1% or YM/227_0%/13 12 155,973
2/1/98 1/1/08 Balloon 1,376,060 >1% or YM/114_0%/6 12 157,345
5/1/98 4/1/08 Balloon 1,432,117 >1% or YM/114_0%/6 12 138,444
4/1/98 3/1/08 Fully Amortizing 0 >1% or YM/120 12 239,634
- --------------------------------------------------------------------------------------------------------------------------------
2/1/98 1/1/08 Balloon 1,387,801 LOCK/2_>1% or YM/113_0%/5 12 133,855
5/1/98 4/1/13 Fully Amortizing 0 LOCK/83_Defeasance/94_0%/3 12 173,973
12/1/97 11/1/17 Fully Amortizing 0 >1% or YM/227_0%/13 12 147,950
4/1/98 3/1/13 Fully Amortizing 0 LOCK/2_>1% or YM/172_0%/6 12 166,862
2/1/98 1/1/08 Balloon 1,270,430 LOCK/1_>1% or YM/113_0%/6 12 126,948
- --------------------------------------------------------------------------------------------------------------------------------
4/1/98 3/1/08 Hyper Amortizing 1,245,761 LOCK/35_Defeasance/82_0%/3 12 117,702
2/1/98 12/31/07 Balloon 1,143,177 LOCK/2_>1% or YM/111_0%/7 12 130,110
12/1/97 11/1/17 Fully Amortizing 0 >1% or YM/227_0%/13 12 118,778
1/1/98 12/1/04 Balloon 1,149,986 >1% or YM/78_0%/6 12 106,169
12/1/97 11/1/17 Fully Amortizing 0 >1% or YM/227_0%/13 12 115,686
- --------------------------------------------------------------------------------------------------------------------------------
12/1/97 11/1/17 Fully Amortizing 0 >1% or YM/227_0%/13 12 108,172
2/1/98 1/1/08 Balloon 986,719 LOCK/1_>1% or YM/113_0%/6 12 94,484
2/1/98 1/1/08 Balloon 908,820 LOCK/1_>1% or YM/113_0%/6 12 87,025
2/1/98 1/1/05 Balloon 952,319 >1% or YM/78_0%/6 12 87,010
4/1/98 3/1/08 Hyper Amortizing 815,891 LOCK/59_Defeasance/58_0%/3 12 89,458
- --------------------------------------------------------------------------------------------------------------------------------
5/1/98 4/1/08 Balloon 794,823 LOCK/47_1% or YM/66_0%/7 12 87,822
1/1/98 12/1/07 Balloon 802,452 >1% or YM/114_0%/6 12 90,639
2/1/98 1/1/13 Fully Amortizing 0 >1% or YM/174_0%/6 12 116,347
3/1/98 1/30/08 Balloon 618,378 >1% or YM/36_Defeasance/77_0%/7 12 88,238
2/1/98 1/1/08 Balloon 658,678 LOCK/1_>1% or YM/113_0%/6 12 63,072
- --------------------------------------------------------------------------------------------------------------------------------
1/1/98 12/1/04 Balloon 588,793 >1% or YM/78_0%/6 12 54,359
</TABLE>
<TABLE>
<CAPTION>
UW UW
1996 1996 1997 1997 UNDERWRITTEN NOI UNDERWRITTEN NCF
NOI NCF NOI NCF NOI DSCR NCF DSCR
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$147,212 $147,212 $271,214 $271,214 $272,733 $272,733
40,403 40,403 48,762 48,762 47,269 47,269
600,035 600,035 592,071 592,071 568,195 568,195
700,399 700,399 908,122 908,122 887,357 887,357
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275,762 275,762 288,552 288,552 276,117 276,117
345,542 345,542 405,983 405,983 412,459 412,459
309,773 309,773 362,490 362,490 348,563 348,563
332,614 332,614 442,453 442,453 436,194 436,194
132,950 132,950 122,087 122,087 116,615 116,615
- -----------------------------------------------------------------------------------------------------------------------------------
517,001 517,001 602,172 602,172 579,789 579,789
363,361 363,361 373,435 373,435 359,010 359,010
36,859 36,859 53,545 53,545 51,058 51,058
369,130 369,130 453,136 453,136 434,235 434,235
597,176 597,176 636,521 636,521 645,147 645,147
- -----------------------------------------------------------------------------------------------------------------------------------
113,562 113,562 118,639 118,639 114,162 114,162
229,542 229,542 468,137 468,137 471,774 471,774
270,802 270,802 441,590 441,590 439,421 439,421
98,044 98,044 157,826 157,826 147,380 147,380
475,961 475,961 528,696 528,696 527,411 527,411
- -----------------------------------------------------------------------------------------------------------------------------------
527,949 527,949 627,571 627,571 603,198 603,198
276,450 276,450 291,903 291,903 280,463 280,463
284,920 284,920 10,162 10,162 22,446 22,446
301,156 301,156 257,227 257,227 264,409 264,409
383,162 383,162 383,800 383,800 385,981 385,981
- -----------------------------------------------------------------------------------------------------------------------------------
204,955 204,955 308,881 308,881 322,521 322,521
687,370 687,370 734,171 734,171 719,735 719,735
113,063 113,063 184,524 184,524 192,946 192,946
307,504 307,504 285,969 285,969 279,428 279,428
177,490 177,490 162,077 162,077 153,124 153,124
- -----------------------------------------------------------------------------------------------------------------------------------
1,383,681 1,383,681 1,324,146 1,324,146 1,319,576 1,319,576
237,664 237,664 83,178 83,178 73,230 73,230
306,025 306,025 177,487 177,487 180,815 180,815
162,502 162,502 213,201 213,201 209,910 209,910
316,374 316,374 302,106 302,106 296,279 296,279
- -----------------------------------------------------------------------------------------------------------------------------------
261,335 261,335 434,514 434,514 420,494 420,494
83,778 83,778 285,943 285,943 289,602 289,602
63,307 63,307 543,316 543,316 590,008 590,008
122,764 122,764 97,985 97,985 104,473 104,473
520,660 520,660 659,964 659,964 619,416 619,416
- -----------------------------------------------------------------------------------------------------------------------------------
329,741 329,741 162,734 162,734 175,773 175,773
162,616 162,616 313,928 313,928 317,062 317,062
180,553 180,553 284,919 284,919 289,225 289,225
7,424 7,424 73,105 73,105 100,523 100,523
477,745 477,745 577,598 577,598 567,870 567,870
- -----------------------------------------------------------------------------------------------------------------------------------
261,654 261,654 174,786 174,786 171,853 171,853
302,273 302,273 219,042 219,042 228,614 228,614
406,125 406,125 411,962 411,962 404,695 404,695
304,053 304,053 291,960 291,960 297,186 297,186
213,671 213,671 182,792 182,792 181,714 181,714
- -----------------------------------------------------------------------------------------------------------------------------------
69,051 69,051 23,254 23,254 52,426 52,426
-127,982 -127,982 -2,307 -2,307 46,036 46,036
166,721 166,721 278,563 278,563 274,679 274,679
146,645 146,645 94,221 94,221 107,602 107,602
331,253 331,253 335,237 335,237 333,469 333,469
- -----------------------------------------------------------------------------------------------------------------------------------
197,617 197,617 130,886 130,886 141,645 141,645
444,533 444,533 279,868 279,868 310,373 310,373
239,931 239,931 360,671 360,671 360,639 360,639
502,893 502,893 507,777 507,777 492,329 492,329
536,013 536,013 514,809 514,809 496,028 496,028
- -----------------------------------------------------------------------------------------------------------------------------------
204,914 204,914 296,354 296,354 304,871 304,871
625,560 625,560 759,308 759,308 738,281 738,281
388,169 388,169 454,419 454,419 465,164 465,164
506,625 506,625 302,145 302,145 302,852 302,852
265,837 265,837 415,739 415,739 421,181 421,181
- -----------------------------------------------------------------------------------------------------------------------------------
219,900 219,900 135,349 135,349 140,684 140,684
255,005 255,005 341,662 341,662 341,074 341,074
410,842 410,842 219,864 219,864 225,001 225,001
-34,916 -34,916 403,945 403,945 444,031 444,031
123,741 123,741 33,115 33,115 45,740 45,740
- -----------------------------------------------------------------------------------------------------------------------------------
224,756 224,756 247,678 247,678 246,562 246,562
260,023 260,023 217,809 217,809 232,965 232,965
261,107 261,107 248,111 248,111 251,605 251,605
612,921 612,921 750,043 750,043 749,740 749,740
- -----------------------------------------------------------------------------------------------------------------------------------
707,157 707,157 611,929 611,929 609,749 609,749
406,540 406,540 209,120 209,120 245,627 245,627
262,447 262,447 832,558 832,558 828,953 828,953
378,339 378,339 -54,217 -54,217 30,932 30,932
920,522 920,522 989,243 989,243 960,879 960,879
- -----------------------------------------------------------------------------------------------------------------------------------
187,363 187,363 241,905 241,905 233,499 233,499
345,379 345,379 320,009 320,009 308,579 308,579
415,751 415,751 255,813 255,813 261,030 261,030
643,934 643,934 549,218 549,218 521,982 521,982
294,767 294,767 302,826 302,826 337,460 337,460
- -----------------------------------------------------------------------------------------------------------------------------------
468,279 468,279 496,010 496,010 479,345 479,345
158,570 158,570 202,807 202,807 200,628 200,628
302,575 302,575 414,585 414,585 395,638 395,638
274,250 274,250 249,786 249,786 265,766 265,766
------- ------- ------- ------- ------- -------
27,921,124 27,921,124 30,306,508 30,306,508 30,402,500 1.60 30,402,500 1.60
- -----------------------------------------------------------------------------------------------------------------------------------
9,217,870 8,032,578 10,261,495 9,000,408 10,903,680 1.96 8,801,680 1.59
697,348 328,447 838,570 838,570 857,282 805,282
707,046 470,082 737,193 737,193 796,733 734,733
687,847 232,519 740,744 740,744 808,164 737,364
- -----------------------------------------------------------------------------------------------------------------------------------
710,798 300,407 811,746 811,746 850,454 803,254
338,658 158,258 382,872 382,872 427,556 384,356
703,885 312,792 862,999 862,999 886,219 828,219
1,209,464 940,636 1,470,696 1,470,696 1,438,192 1,322,192
927,826 789,206 1,027,642 1,027,642 1,127,236 1,024,036
------- ------- --------- --------- --------- ---------
- -----------------------------------------------------------------------------------------------------------------------------------
5,982,872 3,532,347 6,872,462 6,872,462 7,191,836 1.43 6,639,436 1.32
8,015,023 7,325,784 7,948,850 7,260,614 8,021,320 1.87 7,106,470 1.66
7,946,775 7,946,775 8,215,043 7,654,907 7,786,002 2.13 6,878,621 1.88
3,787,660 3,787,660 5,311,827 1.47 5,113,136 1.42
- -----------------------------------------------------------------------------------------------------------------------------------
418,025 376,474 483,181 456,289 482,537 432,137
1,190,620 1,146,363 897,661 849,210 1,139,008 1,047,808
2,568,437 2,162,128 2,853,376 2,555,289 2,808,828 2,437,428
1,563,969 1,208,542 1,730,843 1,601,498 1,556,327 1,391,027
796,656 751,087 683,851 658,238 723,553 663,553
------- ------- ------- ------- ------- -------
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6,537,707 5,644,594 6,648,912 6,120,524 6,710,253 1.69 5,971,953 1.50
5,137,189 4,624,739 5,481,146 5,210,417 6,346,448 2.19 5,566,914 1.92
455,055 455,055 553,633 553,633 631,013 631,013
1,282,963 1,282,963 1,265,071 1,265,071 1,323,376 1,323,376
- -----------------------------------------------------------------------------------------------------------------------------------
1,108,005 1,108,005 1,793,914 1,793,914 1,859,188 1,859,188
69,568 69,568 437,957 437,957 477,561 477,561
------ ------ ------- ------- ------- -------
2,915,590 2,915,590 4,050,576 4,050,576 4,291,139 1.50 4,291,139 1.50
3,078,491 3,048,954 2,928,712 1.38 2,797,422 1.32
- -----------------------------------------------------------------------------------------------------------------------------------
726,566 477,392 613,154 503,168 1,064,388 1.44 985,998 1.34
647,702 384,967 650,647 542,772 882,462 1.36 812,508 1.26
356,620 128,982 628,585 498,643 593,875 1.30 550,711 1.20
------- ------- ------- ------- ------- ---- ------- ----
1,730,888 991,341 1,892,386 1,544,583 2,540,725 1.38 2,349,217 1.28
1,804,390 1,804,390 2,020,068 1,977,529 2,817,615 1.63 2,184,218 1.27
- -----------------------------------------------------------------------------------------------------------------------------------
2,979,269 1.00 2,979,269 1.00
600,000 1.00 600,000 1.00
------- ---- ------- ----
3,579,269 1.00 3,579,269 1.00
1,765,452 1,765,452 1,816,853 1,816,853 1,861,824 1.39 1,793,504 1.34
- -----------------------------------------------------------------------------------------------------------------------------------
1,986,478 1,986,478 1,904,760 1.41 1,667,355 1.23
1,102,548 1,102,548 1,887,819 1,815,649 1,840,566 1.41 1,741,756 1.33
1,815,982 1,791,282 1,720,548 1.25 1,713,325 1.24
1,599,116 1,599,116 1,705,137 1,705,137 1,832,981 1.43 1,654,080 1.29
- -----------------------------------------------------------------------------------------------------------------------------------
1,284,558 1,284,558 1,088,672 1,088,672 1,217,709 1,080,621
328,117 328,117 285,948 285,948 410,391 359,791
------- ------- ------- ------- ------- -------
1,612,675 1,612,675 1,374,620 1,374,620 1,628,100 1.52 1,440,412 1.34
1,331,645 1,331,645 1,339,998 1,339,998 1,339,998 1.93 1,339,998 1.93
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793,014 793,014 842,642 842,642 842,642 1.51 842,642 1.51
------- ------- ------- ------- ------- ---- ------- ----
2,124,659 2,124,659 2,182,640 2,182,640 2,182,640 1.74 2,182,640 1.74
1,705,657 1,705,657 2,476,028 2,476,028 2,312,800 2.13 1,740,856 1.60
1,078,484 1,078,484 781,850 781,850 1,615,909 1.57 1,433,884 1.39
1,513,321 1,513,321 1,526,510 1,526,510 1,440,667 1.46 1,319,765 1.34
- -----------------------------------------------------------------------------------------------------------------------------------
1,685,877 1,668,144 1,267,763 1,255,131 1,379,393 1.42 1,288,436 1.33
1,394,932 1,393,498 1,457,775 1,457,775 1,325,481 1.38 1,191,685 1.24
995,129 995,129 813,619 813,619 1,312,250 1.33 1,312,250 1.33
2,160,546 2,160,546 2,213,697 2,213,697 1,925,688 2.03 1,410,139 1.49
700,046 700,046 996,273 996,273 1,154,555 1.37 1,129,999 1.34
- -----------------------------------------------------------------------------------------------------------------------------------
430,093 430,093 373,888 373,888 374,044 339,044
235,178 235,178 248,401 248,401 224,527 202,527
284,000 284,000 432,792 432,792 398,694 359,444
218,486 218,486 284,731 284,731 246,913 226,288
------- ------- ------- ------- ------- -------
- -----------------------------------------------------------------------------------------------------------------------------------
1,167,757 1,167,757 1,339,812 1,339,812 1,244,179 1.52 1,127,301 1.38
803,704 803,704 574,287 574,287 1,064,904 1.28 1,064,904 1.28
1,302,842 1,246,077 1,247,112 1,150,883 1,204,190 1.67 1,107,440 1.54
309,550 288,050
- -----------------------------------------------------------------------------------------------------------------------------------
220,800 204,300
204,885 189,885
162,206 141,206
154,702 137,702
82,006 71,756
------ ------
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1,134,149 1.42 1,032,899 1.30
1,501,352 1,347,354 1,762,112 1,647,618 1,631,728 1.93 1,485,628 1.76
956,483 888,215 994,588 982,531 1,013,034 1.43 900,142 1.27
812,147 812,147 916,668 916,668 1,035,894 1.41 956,564 1.30
1,435,529 1,435,529 1,235,527 1,235,527 1,350,421 1.70 1,164,765 1.47
- -----------------------------------------------------------------------------------------------------------------------------------
837,175 769,380 1,012,894 995,179 1,013,229 1.45 870,705 1.24
744,163 744,163 1,020,882 1,020,882 1,002,239 1.41 936,603 1.32
1,401,039 1,314,285 1,517,044 1,427,564 1,439,617 1.92 1,323,517 1.76
1,284,718 1,284,718 1,529,727 1,529,727 1,094,374 1.56 1,094,374 1.56
1,052,826 1,052,826 966,201 966,201 867,717 1.39 799,574 1.28
- -----------------------------------------------------------------------------------------------------------------------------------
1,354,087 1,217,174 1,349,964 1,309,342 1,349,270 1.95 1,265,870 1.83
1,356,905 1,356,905 1,482,137 1,482,137 1,119,832 1.94 1,022,660 1.77
550,492 550,492 555,240 555,240 802,785 1.34 750,585 1.25
1,291,362 1,186,133 1,232,826 1,129,640 1,349,200 2.03 1,243,600 1.88
- -----------------------------------------------------------------------------------------------------------------------------------
807,356 807,356 1,111,840 1,097,238 1,021,573 1.77 971,206 1.68
1,010,379 878,297 952,287 888,240 839,867 1.45 752,425 1.30
376,124 376,124 538,746 538,746 646,495 1.09 646,495 1.09
741,166 741,166 638,923 638,923 778,872 1.41 737,951 1.34
1,258,374 1,153,337 1,221,688 1,031,706 1,197,091 1.90 1,109,191 1.76
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693,150 693,150 1,029,546 1,029,546 1,029,546 1.69 1,029,546 1.69
567,201 526,164 688,080 606,668 705,233 1.36 674,983 1.31
1,197,631 1,197,631 1,222,168 1,222,168 1,224,330 2.21 1,086,000 1.96
950,651 950,651 822,501 1.41 769,104 1.32
1,183,868 857,535 820,510 820,510 1,000,796 1.71 781,793 1.33
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865,463 865,463 682,493 682,493 670,885 1.43 642,618 1.37
557,682 557,682 658,228 658,228 707,693 1.52 623,515 1.34
55,690 55,690 580,117 472,864 692,145 1.37 636,709 1.26
755,780 755,780 776,155 770,760 716,291 1.43 641,087 1.28
713,063 708,008 705,860 1.50 642,287 1.36
- -----------------------------------------------------------------------------------------------------------------------------------
906,722 906,722 1,006,485 1,006,485 1,008,171 1.95 786,753 1.52
496,931 494,977 601,094 1.33 560,454 1.24
949,774 906,904 908,064 873,126 984,182 1.90 924,182 1.78
471,747 446,046 686,292 61,678 675,285 1.54 607,966 1.38
713,024 659,564 710,441 710,441 653,674 1.27 603,825 1.17
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665,117 665,117 676,453 676,453 634,108 1.42 596,961 1.34
551,697 551,697 512,050 512,050 594,812 1.46 515,209 1.27
520,964 520,964 684,074 684,074 674,462 1.57 638,736 1.49
804,000 804,000 721,329 1.69 630,426 1.48
621,981 613,579 583,722 1.46 538,545 1.35
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176,310 176,310 187,697 166,508 205,704 176,894
160,532 160,532 159,215 159,215 156,101 143,431
188,988 188,988 202,713 202,713 202,597 182,899
------- ------- ------- ------- ------- -------
525,829 525,829 549,628 528,439 564,402 1.49 503,225 1.33
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529,902 451,575 514,929 458,057 545,306 1.39 483,323 1.23
624,777 624,777 509,002 1.42 469,072 1.31
873,700 533,756 848,330 402,916 815,784 1.94 737,484 1.76
654,207 654,207 670,879 670,879 579,205 1.31 564,543 1.28
792,478 722,333 741,048 712,940 771,601 1.93 706,801 1.76
- -----------------------------------------------------------------------------------------------------------------------------------
494,493 494,493 413,565 413,565 482,186 1.39 465,902 1.35
750,597 748,396 799,911 2.03 732,111 1.86
528,710 528,710 730,703 730,703 732,877 1.75 657,913 1.57
778,484 717,593 1,120,058 1,110,333 800,283 2.05 723,483 1.85
331,190 331,190 454,824 1.38 429,028 1.30
- -----------------------------------------------------------------------------------------------------------------------------------
614,308 459,208 868,692 717,370 770,628 2.00 677,628 1.76
357,773 357,773 496,131 458,226 561,633 1.56 461,452 1.28
301,083 301,083 181,660 181,660 504,115 1.53 434,594 1.32
544,360 544,360 234,839 234,839 564,477 1.56 509,528 1.41
665,250 616,237 757,764 706,722 746,502 2.04 665,502 1.81
- -----------------------------------------------------------------------------------------------------------------------------------
670,521 484,681 726,638 523,874 706,439 1.94 646,139 1.77
341,048 341,048 553,324 528,664 433,048 1.35 409,048 1.28
512,630 506,582 495,031 450,379 471,858 1.51 393,179 1.26
433,411 433,411 432,353 432,353 475,070 1.03 472,453 1.03
579,722 515,453 560,112 496,424 649,757 1.89 613,757 1.79
- -----------------------------------------------------------------------------------------------------------------------------------
433,218 418,499 417,106 409,924 441,317 1.52 376,182 1.30
1,260,454 1,260,454 933,617 933,617 933,617 2.89 933,617 2.89
316,858 307,256 323,291 1.03 321,900 1.03
344,265 344,265 550,708 550,708 550,709 1.73 550,709 1.73
349,499 349,499 416,862 416,862 397,060 1.44 383,490 1.39
- -----------------------------------------------------------------------------------------------------------------------------------
499,423 499,423 549,992 549,992 504,162 1.75 425,487 1.48
368,146 368,146 324,073 324,073 369,128 1.34 349,928 1.27
430,984 430,984 432,227 432,227 401,658 1.50 356,283 1.33
570,874 445,626 625,874 589,482 607,609 1.98 566,809 1.84
510,797 456,987 569,902 500,520 603,095 1.99 533,495 1.76
- -----------------------------------------------------------------------------------------------------------------------------------
574,041 531,550 609,834 577,518 686,107 2.33 644,707 2.19
220,363 219,524 338,738 1.39 314,104 1.29
204,689 169,910 383,414 1.75 350,964 1.60
72,636 62,670 68,292 1.95 58,117 1.66
------ ------ ------ ---- ------ ----
- -----------------------------------------------------------------------------------------------------------------------------------
277,325 232,580 451,706 1.78 409,081 1.61
448,583 444,393 403,456 1.66 380,453 1.56
341,695 341,695 362,327 362,327 385,518 1.61 327,731 1.37
407,958 285,042 390,542 195,271 417,498 1.75 315,365 1.32
- -----------------------------------------------------------------------------------------------------------------------------------
176,440 176,440 152,774 129,257 174,958 1.49 155,272 1.32
176,718 172,501 170,973 1.40 157,772 1.30
------- ------- ------- ------- ------- ---- ------- ----
176,440 176,440 329,492 301,758 345,931 1.45 313,044 1.31
468,640 419,641 529,166 493,570 554,709 2.05 495,909 1.83
461,464 385,517 552,494 506,944 532,914 1.99 469,914 1.75
- -----------------------------------------------------------------------------------------------------------------------------------
262,649 251,182 339,076 325,714 360,089 1.54 315,496 1.35
216,676 216,676 413,533 368,533 346,799 1.58 299,279 1.36
259,138 251,286 264,399 1.03 263,008 1.03
193,312 193,312 324,411 324,411 354,182 1.52 316,029 1.36
444,589 1.73 327,336 1.27
- -----------------------------------------------------------------------------------------------------------------------------------
511,874 409,516 572,028 486,810 605,296 2.35 542,896 2.11
332,749 332,749 502,761 502,761 404,347 1.74 312,601 1.35
293,871 246,982 321,448 286,105 307,088 1.39 278,648 1.26
383,393 383,393 297,934 252,811 316,510 1.46 277,446 1.28
292,415 292,415 520,087 520,087 520,087 2.07 520,087 2.07
- -----------------------------------------------------------------------------------------------------------------------------------
374,097 374,097 407,030 407,030 334,108 1.64 255,754 1.25
171,100 171,100 363,610 1.74 285,656 1.37
596,263 596,263 592,312 592,312 375,858 1.70 375,858 1.70
303,196 303,196 281,067 281,067 296,109 1.48 261,109 1.30
481,268 425,412 469,273 416,225 484,367 2.13 414,467 1.82
- -----------------------------------------------------------------------------------------------------------------------------------
329,165 292,621 328,121 1.51 304,764 1.40
308,323 308,323 282,266 1.50 244,862 1.31
411,939 373,375 418,628 340,980 440,942 2.01 395,342 1.81
485,368 438,082 485,846 448,422 436,659 2.01 381,459 1.76
308,950 308,950 274,992 1.41 246,026 1.26
- -----------------------------------------------------------------------------------------------------------------------------------
277,086 273,723 261,318 1.38 246,940 1.31
204,882 204,882 260,794 260,794 269,867 1.45 243,972 1.31
337,411 332,516 337,550 330,050 316,942 1.66 280,894 1.47
339,597 -13,687 206,003 188,612 399,695 1.98 275,298 1.37
408,405 379,244 495,452 452,572 424,413 2.02 369,213 1.76
- -----------------------------------------------------------------------------------------------------------------------------------
326,931 310,781 401,876 399,288 318,348 1.66 271,444 1.41
330,060 330,060 276,969 276,969 268,762 1.35 268,762 1.35
187,465 151,776 330,722 233,651 310,942 1.64 263,005 1.39
409,435 392,304 354,742 338,428 388,902 1.94 351,402 1.76
435,799 414,047 382,776 357,134 381,729 1.92 349,329 1.75
- -----------------------------------------------------------------------------------------------------------------------------------
263,720 260,024 298,294 263,361
------- ------- ------- -------
263,720 260,024 298,294 1.67 263,361 1.48
416,346 387,827 488,574 454,076 444,021 2.25 364,821 1.85
- -----------------------------------------------------------------------------------------------------------------------------------
372,323 340,419 402,068 374,460 380,892 1.94 343,992 1.76
188,106 183,041 290,115 284,755 261,207 1.54 230,585 1.36
257,203 249,042 248,089 1.48 227,679 1.36
214,551 184,303 253,047 222,695 255,898 1.56 219,841 1.34
256,376 211,505 251,015 251,015 260,663 1.47 242,683 1.37
- -----------------------------------------------------------------------------------------------------------------------------------
228,081 222,286 233,520 1.57 201,945 1.35
111,200 111,200 135,559 135,559
106,496 106,496 122,843 122,843
------- ------- ------- -------
217,696 217,696 258,402 258,402 229,700 1.45 217,100 1.37
- -----------------------------------------------------------------------------------------------------------------------------------
268,500 268,500 274,500 1.07 273,000 1.06
359,519 333,155 -297,532 -325,238 338,881 2.17 273,481 1.75
49,717 49,717 195,040 195,040 188,500 1.20 188,500 1.20
183,275 183,275 227,737 1.64 187,858 1.36
690,750 690,750 753,067 753,067 753,067 3.14 753,067 3.14
- -----------------------------------------------------------------------------------------------------------------------------------
224,322 218,774 221,274 216,347 210,452 1.57 181,181 1.35
277,451 277,451 272,657 272,657 232,906 1.34 211,656 1.22
274,132 257,134 298,866 277,072 285,639 1.93 259,839 1.76
249,127 249,127 282,085 282,085 260,064 1.56 241,228 1.45
213,646 213,646 215,011 215,011 183,264 1.44 168,414 1.33
- -----------------------------------------------------------------------------------------------------------------------------------
140,924 140,924 187,097 187,097 175,517 1.49 160,929 1.37
273,633 271,776 290,202 286,984 197,228 1.52 178,253 1.37
238,960 213,184 223,344 198,344 241,964 2.04 208,464 1.76
158,443 158,443 170,211 170,211 156,489 1.47 143,089 1.35
206,485 171,692 233,724 207,446 228,375 1.97 203,175 1.76
- -----------------------------------------------------------------------------------------------------------------------------------
217,424 198,069 224,040 210,246 221,041 2.04 189,841 1.75
170,654 170,654 166,340 136,240 158,660 1.68 127,701 1.35
109,439 103,928 168,574 160,757 145,745 1.67 120,661 1.39
146,418 146,418 157,446 157,446 127,728 1.47 115,728 1.33
133,252 133,252 146,610 146,610 132,002 1.48 122,402 1.37
- -----------------------------------------------------------------------------------------------------------------------------------
78,271 78,271 134,438 134,438 163,482 1.86 159,607 1.82
145,239 52,144 137,053 132,353 140,881 1.55 126,657 1.40
622,532 622,532 625,559 625,559 625,559 5.38 625,559 5.38
95,534 95,534 172,431 172,431 163,717 1.86 116,830 1.32
93,489 87,326 109,780 106,361 99,987 1.59 89,538 1.42
- -----------------------------------------------------------------------------------------------------------------------------------
92,703 92,703 102,849 102,849 79,128 1.46 71,728 1.32
</TABLE>
<TABLE>
<CAPTION>
CUT-OFF BED, UNIT
APPRAISED APPRAISAL DATE MATURITY DATE ROOM, PAD
VALUE DATE LTV (%) OR ARD LTV (%) OR SQ.FT
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$2,300,000 1/1/98 90
300,000 1/1/98 21
4,800,000 1/1/98 63
9,800,000 1/1/98 202
- -----------------------------------------------------------------------------------------------------------
2,500,000 1/1/98 71
1/1/98 60
2,800,000 1/1/98 58
3,800,000 1/1/98 116
1,100,000 1/1/98 35
- -----------------------------------------------------------------------------------------------------------
4,500,000 1/1/98 101
2,900,000 1/1/98 63
500,000 1/1/98 49
3,800,000 1/1/98 63
4,900,000 1/1/98 98
- -----------------------------------------------------------------------------------------------------------
900,000 1/1/98 20
4,000,000 1/1/98 77
4,100,000 1/1/98 105
2,100,000 1/1/98 63
5,000,000 1/1/98 76
- -----------------------------------------------------------------------------------------------------------
4,900,000 1/1/98 129
2,300,000 1/1/98 43
1/1/98 200
2,600,000 1/1/98 80
1/1/98 60
- -----------------------------------------------------------------------------------------------------------
2,600,000 1/1/98 118
5,900,000 1/1/98 99
1,400,000 1/1/98 62
3,600,000 1/1/98 78
1,800,000 1/1/98 65
- -----------------------------------------------------------------------------------------------------------
12,700,000 1/1/98 175
2,000,000 1/1/98 57
2,500,000 1/1/98 100
2,500,000 1/1/98 70
3,500,000 1/1/98 110
- -----------------------------------------------------------------------------------------------------------
3,900,000 1/1/98 66
2,800,000 1/1/98 104
1/1/98 120
1,700,000 1/1/98 100
5,800,000 1/1/98 120
- -----------------------------------------------------------------------------------------------------------
2,100,000 1/1/98 112
2,400,000 1/1/98 64
2,700,000 1/1/98 120
1/1/98 52
5,400,000 1/1/98 126
- -----------------------------------------------------------------------------------------------------------
2,600,000 1/1/98 102
2,000,000 1/1/98 69
3,600,000 1/1/98 60
1/1/98 76
2,500,000 1/1/98 120
- -----------------------------------------------------------------------------------------------------------
1/1/98 80
1/1/98 100
2,300,000 1/1/98 64
1,000,000 1/1/98 60
2,700,000 1/1/98 94
- -----------------------------------------------------------------------------------------------------------
1,400,000 1/1/98 68
2,500,000 1/1/98 136
2,800,000 1/1/98 86
4,300,000 1/1/98 60
4,900,000 1/1/98 106
- -----------------------------------------------------------------------------------------------------------
2,600,000 1/1/98 53
6,400,000 1/1/98 106
4,300,000 1/1/98 115
3,400,000 1/1/98 100
3,800,000 1/1/98 120
- -----------------------------------------------------------------------------------------------------------
1,500,000 1/1/98 48
3,200,000 1/1/98 58
2,600,000 1/1/98 80
1/1/98 113
1,700,000 1/1/98 108
- -----------------------------------------------------------------------------------------------------------
2,800,000 1/1/98 72
2,900,000 1/1/98 100
2,300,000 1/1/98 102
6,400,000 1/1/98 110
- -----------------------------------------------------------------------------------------------------------
5,400,000 1/1/98 98
1/1/98 154
7,400,000 1/1/98 140
1/1/98 156
8,100,000 1/1/98 144
- -----------------------------------------------------------------------------------------------------------
3,000,000 1/1/98 60
3,100,000 1/1/98 48
2,500,000 1/1/98 80
5,400,000 1/1/98 80
1/1/98 116
- -----------------------------------------------------------------------------------------------------------
4,800,000 1/1/98 100
1,900,000 1/1/98 58
4,000,000 1/1/98 102
1/1/98 60
----------- --
257,300,000 88 69 7,823
- -----------------------------------------------------------------------------------------------------------
125,000,000 1/28/98 50 40 801
9,380,000 11/4/97 260
9,565,000 11/4/97 310
9,100,000 10/23/97 354
- -----------------------------------------------------------------------------------------------------------
9,765,000 11/4/97 236
4,450,000 3/23/98 216
9,850,000 11/6/97 290
17,970,000 11/6/97 580
11,830,000 10/23/97 516
---------- ---
- -----------------------------------------------------------------------------------------------------------
81,910,000 75 65 2,762
83,800,000 6/1/97 58 46 553
95,000,000 11/19/97 47 37 374,900
62,910,000 10/17/97 71 61 543,532
- -----------------------------------------------------------------------------------------------------------
4,075,000 7/22/97 168
9,960,000 7/22/97 304
22,000,000 7/15/97 1,058
14,975,000 7/15/97 551
6,500,000 7/22/97 200
--------- ---
- -----------------------------------------------------------------------------------------------------------
57,510,000 63 29 2,281
65,000,000 11/1/97 54 40 214,658
6,500,000 11/19/97 154
13,850,000 11/13/97 176
- -----------------------------------------------------------------------------------------------------------
16,100,000 11/14/97 246
6,800,000 11/17/97 121
--------- ---
43,250,000 80 62 697
32,800,000 10/9/97 78 66 285,274
- -----------------------------------------------------------------------------------------------------------
11,222,500 9/8/97 80 69 201
9,865,000 9/8/97 80 69 178
6,900,000 9/8/97 81 70 132
--------- -- -- ---
27,987,500 80 69 511
27,900,000 1/1/98 74 64 276,024
- -----------------------------------------------------------------------------------------------------------
19,550,000 1/1/98 81 0 382,605
8,000,000 1/1/98 57 0 200,000
--------- -- - -------
27,550,000 74 0 582,605
21,300,000 11/11/97 80 68 305
- -----------------------------------------------------------------------------------------------------------
20,000,000 9/8/97 82 71 627,975
19,700,000 11/19/97 79 69 186,134
19,720,000 12/3/97 78 61 72,232
20,300,000 12/15/97 75 65 242,317
- -----------------------------------------------------------------------------------------------------------
13,100,000 9/2/97 384
4,500,000 9/2/97 253
--------- ---
17,600,000 9/2/97 76 69 637
9,300,000 8/12/97 77 65 161
- -----------------------------------------------------------------------------------------------------------
7,700,000 8/7/97 75 63 116
--------- -- -- ---
17,000,000 76 64 277
22,100,000 12/1/97 54 43 298
15,670,000 3/1/98 76 60 809
17,150,000 10/20/97 70 60 72,417
- -----------------------------------------------------------------------------------------------------------
17,100,000 8/29/97 68 59 118,722
14,600,000 12/24/97 77 58 124,151
15,000,000 10/31/97 75 60 202
22,000,000 1/1/98 47 29 150
13,960,000 10/7/97 71 66 584,030
- -----------------------------------------------------------------------------------------------------------
3,600,000 11/17/97 140
2,400,000 11/17/97 88
3,900,000 11/17/97 157
2,600,000 11/17/97 75
--------- --
- -----------------------------------------------------------------------------------------------------------
12,500,000 80 69 460
12,600,000 10/31/97 75 60 170
12,300,000 12/3/97 75 64 430
3,100,000 8/8/97 86
- -----------------------------------------------------------------------------------------------------------
2,000,000 8/8/97 66
1,900,000 8/8/97 60
1,900,000 8/8/97 84
1,800,000 10/1/97 68
900,000 10/1/97 40
------- --
- -----------------------------------------------------------------------------------------------------------
11,600,000 78 62 404
17,200,000 10/31/97 52 0 487
11,000,000 9/26/97 81 69 155,932
11,600,000 8/25/97 75 65 122,874
13,000,000 1/1/98 66 41 193
- -----------------------------------------------------------------------------------------------------------
12,300,000 11/19/97 70 60 101,618
11,200,000 9/23/97 75 65 79,136
15,100,000 10/31/97 53 0 387
12,500,000 1/1/98 62 49 76
10,400,000 10/27/97 72 62 42,884
- -----------------------------------------------------------------------------------------------------------
13,800,000 10/31/97 53 0 278
13,300,000 11/23/97 55 40 113,428
9,000,000 12/1/97 80 69 348
13,250,000 10/28/97 53 0 352
- -----------------------------------------------------------------------------------------------------------
11,000,000 8/7/97 63 53 48,672
10,350,000 10/12/97 67 59 101,415
9,150,000 10/1/97 74 59 187
8,500,000 12/3/97 80 69 168
13,550,000 10/30/97 49 0 293
- -----------------------------------------------------------------------------------------------------------
9,400,000 10/1/97 71 57 120
9,100,000 11/24/97 72 67 121
10,800,000 9/12/97 58 46 154
9,500,000 6/9/97 65 53 88,000
10,700,000 10/13/97 58 0 205,692
- -----------------------------------------------------------------------------------------------------------
7,500,000 11/15/97 77 67 47,264
7,600,000 11/24/97 76 65 69,280
8,400,000 11/25/97 68 54 88,625
7,300,000 6/13/97 78 69 48,547
9,700,000 11/26/97 59 51 50,545
- -----------------------------------------------------------------------------------------------------------
11,500,000 4/8/97 49 40 176
7,575,000 11/5/97 73 65 209
10,000,000 10/31/97 55 0 200
6,800,000 11/29/97 80 59 73,875
7,000,000 9/21/95 75 40 142,425
- -----------------------------------------------------------------------------------------------------------
6,250,000 1/12/98 83 73 40,900
6,700,000 12/11/97 75 56 60,091
6,900,000 12/1/97 72 55 11,177
7,775,000 10/22/97 64 51 66,218
6,750,000 8/6/97 69 60 30,429
- -----------------------------------------------------------------------------------------------------------
2,175,000 1/5/98 96
1,575,000 1/9/98 40
2,050,000 1/5/98 68
--------- --
5,800,000 80 69 204
- -----------------------------------------------------------------------------------------------------------
6,200,000 12/15/97 73 58 58,247
6,000,000 10/16/97 75 64 42,518
8,600,000 10/29/97 52 0 261
6,300,000 1/1/98 69 42 72,560
8,500,000 11/26/97 50 0 216
- -----------------------------------------------------------------------------------------------------------
5,300,000 9/25/97 79 69 275
7,800,000 10/31/97 54 0 226
6,600,000 8/1/97 63 53 100
7,630,000 11/20/97 54 0 256
5,700,000 1/16/98 72 62 16,888
- -----------------------------------------------------------------------------------------------------------
7,800,000 10/31/97 52 0 310
5,400,000 10/3/97 75 45 91,686
5,350,000 11/14/97 75 65 56,691
13,000,000 11/17/97 31 25 44,500
7,800,000 11/5/97 50 0 270
- -----------------------------------------------------------------------------------------------------------
7,400,000 10/31/97 52 0 201
4,800,000 10/7/97 80 69 120
5,075,000 12/18/97 75 65 81,887
4,450,000 10/30/97 84 0 8,724
6,750,000 11/25/97 54 0 120
- -----------------------------------------------------------------------------------------------------------
4,750,000 12/18/97 74 64 46,706
4,500,000 12/2/97 78 63 33
3,415,000 12/2/97 100 0 13,905
4,430,000 9/7/97 76 64 99
4,500,000 11/25/97 75 65 11,854
- -----------------------------------------------------------------------------------------------------------
6,000,000 12/5/97 56 43 80,829
4,150,000 10/6/97 80 69 96
4,360,000 11/3/97 75 65 63,340
6,400,000 11/3/97 51 0 136
6,400,000 11/5/97 50 0 232
- -----------------------------------------------------------------------------------------------------------
5,800,000 11/20/97 54 0 138
3,800,000 11/18/97 80 71 109
3,450,000 1/8/98 75 65 118
600,000 1/8/98 69 60 37
------- -- -- --
- -----------------------------------------------------------------------------------------------------------
4,050,000 74 64 155
4,400,000 12/5/97 68 59 20,950
4,100,000 11/5/97 73 63 91,823
3,900,000 10/20/97 74 64 70,000
- -----------------------------------------------------------------------------------------------------------
1,880,000 1/2/98 75 65 15,814
1,950,000 1/12/98 75 65 28,110
--------- -- -- ------
3,830,000 75 65 43,924
5,600,000 10/31/97 51 0 196
5,400,000 11/5/97 53 0 210
- -----------------------------------------------------------------------------------------------------------
4,145,000 10/29/97 68 59 56,531
3,900,000 12/9/97 72 61 180
2,800,000 12/2/97 100 0 13,905
3,700,000 8/1/97 74 65 35,818
5,300,000 6/1/98 52 35 30,400
- -----------------------------------------------------------------------------------------------------------
5,300,000 10/28/97 51 0 208
3,900,000 7/1/97 70 61 110,222
3,500,000 12/16/97 77 67 90
3,450,000 7/18/97 78 67 152
4,600,000 10/1/97 58 47 270
- -----------------------------------------------------------------------------------------------------------
3,500,000 1/15/98 71 62 47,573
3,700,000 1/8/98 67 62 107,431
5,300,000 12/1/97 47 29 47
3,110,000 1/15/98 80 69 140
4,400,000 10/30/97 55 0 233
- -----------------------------------------------------------------------------------------------------------
3,300,000 11/16/97 72 54 19,938
3,200,000 10/1/97 73 63 49,974
4,600,000 10/28/97 51 0 152
4,300,000 10/29/97 54 0 184
3,100,000 12/23/97 74 65 28,691
- -----------------------------------------------------------------------------------------------------------
3,100,000 11/11/97 74 64 9,144
3,200,000 11/14/97 72 62 30,514
3,050,000 10/3/97 75 65 44,846
4,270,000 9/11/97 53 42 73,361
4,500,000 10/31/97 50 0 184
- -----------------------------------------------------------------------------------------------------------
4,100,000 12/15/97 54 43 35,040
3,540,000 8/25/97 62 50 85
3,075,000 10/17/97 71 62 57,862
3,550,000 10/31/97 60 0 125
4,200,000 11/16/97 50 0 108
- -----------------------------------------------------------------------------------------------------------
425,000 12/3/97 10,200
2,875,000 12/3/97 34,844
--------- ------
3,300,000 64 50 45,044
4,100,000 10/29/97 51 0 264
- -----------------------------------------------------------------------------------------------------------
3,500,000 10/31/97 59 0 123
2,880,000 10/29/97 71 62 34,083
2,800,000 10/29/97 72 61 40,804
2,490,000 12/19/97 80 69 119
2,500,000 10/2/95 72 38 51,372
- -----------------------------------------------------------------------------------------------------------
2,465,000 10/29/97 73 63 28,975
1,100,000 11/10/97 31
1,330,000 11/10/97 32
--------- --
2,430,000 69 47 63
- -----------------------------------------------------------------------------------------------------------
2,500,000 1/28/98 67 0 15,000
3,200,000 10/29/97 52 0 218
2,725,000 6/16/97 61 50 58
2,560,000 10/10/97 64 56 39,667
6,900,000 1/19/98 24 0 170
- -----------------------------------------------------------------------------------------------------------
2,150,000 10/3/97 74 65 26,100
2,250,000 11/7/97 71 0 85
2,775,000 10/31/97 57 0 86
2,600,000 10/14/97 57 0 10,200
2,000,000 10/28/97 72 64 54
- -----------------------------------------------------------------------------------------------------------
1,800,000 12/5/97 80 69 22,587
1,900,000 10/9/97 74 60 75
2,500,000 11/17/97 50 0 134
1,985,000 9/25/97 63 58 67
2,330,000 11/20/97 53 0 84
- -----------------------------------------------------------------------------------------------------------
2,050,000 11/5/97 56 0 104
1,680,000 10/29/97 68 59 27,441
1,600,000 10/29/97 65 57 19,866
1,300,000 7/2/97 80 73 60
1,350,000 11/26/97 76 60 48
- -----------------------------------------------------------------------------------------------------------
1,600,000 12/1/97 62 50 19,373
1,350,000 7/11/97 74 59 24,994
3,750,000 8/22/97 26 0 102
1,250,000 11/12/97 72 49 39,524
1,015,000 10/29/97 75 65 10,786
- -----------------------------------------------------------------------------------------------------------
809,000 7/2/97 79 73 37
</TABLE>
<TABLE>
<CAPTION>
CUT-OFF DATE TOTAL
BALANCE / REQUIRED TOTAL
SQ FT, UNIT, OCCUPANCY OCCUPANCY ANNUAL REQUIRED ANNUAL
UNIT TYPE BED, PAD OR ROOM PERCENTAGE AS OF DATE RESERVES RESERVES PER UNIT/SQ FT
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Beds 64 10/31/97 $19,000 $211.11
Beds 43 10/31/97 5,250 250.00
Beds 96 10/31/97 15,500 246.03
Beds 61 10/31/97 46,750 231.44
- --------------------------------------------------------------------------------------------------------------------------------
Beds 78 10/31/97 17,750 250.00
Beds 96 10/31/97 15,000 250.00
Beds 89 10/31/97 13,500 232.76
Beds 65 10/31/97 29,000 250.00
Beds 91 10/31/97 8,750 250.00
- --------------------------------------------------------------------------------------------------------------------------------
Beds 98 10/31/97 25,000 247.52
Beds 95 10/31/97 15,750 250.00
Beds 71 10/31/97 12,250 250.00
Beds 90 10/31/97 15,750 250.00
Beds 88 10/31/97 24,500 250.00
- --------------------------------------------------------------------------------------------------------------------------------
Beds 87 10/31/97 5,000 250.00
Beds 97 10/31/97 19,000 246.75
Beds 73 10/31/97 26,250 250.00
Beds 87 10/31/97 15,750 250.00
Beds 87 10/31/97 18,750 246.71
- --------------------------------------------------------------------------------------------------------------------------------
Beds 72 10/31/97 32,250 250.00
Beds 100 10/31/97 10,750 250.00
Beds 71 10/31/97 46,000 230.00
Beds 69 10/31/97 20,000 250.00
Beds 88 10/31/97 15,000 250.00
- --------------------------------------------------------------------------------------------------------------------------------
Beds 68 10/31/97 22,000 186.44
Beds 84 10/31/97 24,750 250.00
Beds 85 10/31/97 15,500 250.00
Beds 80 10/31/97 19,000 243.59
Beds 78 10/31/97 15,500 238.46
- --------------------------------------------------------------------------------------------------------------------------------
Beds 81 10/31/97 41,000 234.29
Beds 67 10/31/97 14,250 250.00
Beds 42 10/31/97 24,000 240.00
Beds 51 10/31/97 16,000 228.57
Beds 44 10/31/97 25,000 227.27
- --------------------------------------------------------------------------------------------------------------------------------
Beds 79 10/31/97 16,000 242.42
Beds 49 10/31/97 25,750 247.60
Beds 92 10/31/97 28,500 237.50
Beds 35 10/31/97 21,500 215.00
Beds 50 10/31/97 23,000 191.67
- --------------------------------------------------------------------------------------------------------------------------------
Beds 43 10/31/97 25,000 223.21
Beds 63 10/31/97 16,000 250.00
Beds 43 10/31/97 24,000 200.00
Beds 72 10/31/97 11,500 221.15
Beds 61 10/31/97 31,000 246.03
- --------------------------------------------------------------------------------------------------------------------------------
Beds 40 10/31/97 22,000 215.69
Beds 63 10/31/97 15,750 228.26
Beds 90 10/31/97 14,250 237.50
Beds 81 10/31/97 18,500 243.42
Beds 29 10/31/97 28,500 237.50
- --------------------------------------------------------------------------------------------------------------------------------
Beds 47 10/31/97 17,000 212.50
Beds 47 10/31/97 21,500 215.00
Beds 50 10/31/97 16,000 250.00
Beds 59 10/31/97 14,250 237.50
Beds 50 10/31/97 18,500 196.81
- --------------------------------------------------------------------------------------------------------------------------------
Beds 50 10/31/97 14,500 213.23
Beds 52 10/31/97 31,000 227.94
Beds 63 10/31/97 18,000 209.30
Beds 81 10/31/97 14,250 237.50
Beds 59 10/31/97 23,500 221.70
- --------------------------------------------------------------------------------------------------------------------------------
Beds 95 10/31/97 13,250 250.00
Beds 80 10/31/97 25,500 240.57
Beds 68 10/31/97 26,000 226.09
Beds 50 10/31/97 22,500 225.00
Beds 56 10/31/97 28,500 237.50
- --------------------------------------------------------------------------------------------------------------------------------
Beds 55 10/31/97 10,500 218.75
Beds 84 10/31/97 14,000 241.38
Beds 59 10/31/97 16,750 209.37
Beds 78 10/31/97 27,750 245.58
Beds 35 10/31/97 20,250 187.50
- --------------------------------------------------------------------------------------------------------------------------------
Beds 52 10/31/97 17,000 236.11
Beds 57 10/31/97 24,500 245.00
Beds 45 10/31/97 19,500 191.18
Beds 86 10/31/97 27,000 245.45
- --------------------------------------------------------------------------------------------------------------------------------
Beds 79 10/31/97 23,500 239.80
Beds 50 10/31/97 31,750 206.17
Beds 79 10/31/97 33,000 235.71
Beds 69 10/31/97 37,000 237.18
Beds 67 10/31/97 32,250 223.96
- --------------------------------------------------------------------------------------------------------------------------------
Beds 59 10/31/97 13,500 225.00
Beds 84 10/31/97 11,500 239.58
Beds 55 10/31/97 19,000 237.50
Beds 74 10/31/97 19,000 237.50
Beds 55 10/31/97 23,500 202.59
- --------------------------------------------------------------------------------------------------------------------------------
Beds 61 10/31/97 24,000 240.00
Beds 46 10/31/97 14,000 241.38
Beds 48 10/31/97 24,500 240.20
Beds 83 10/31/97 15,000 250.00
---- ------ ------
BEDS $28,817 1,813,750 231.85
- --------------------------------------------------------------------------------------------------------------------------------
Rooms 77,309 71 12/31/97
Units 95 1/19/98
Units 94 1/23/98
Units 95 1/19/98
- --------------------------------------------------------------------------------------------------------------------------------
Units 97 1/19/98
Units 95 1/26/98
Units 98 1/19/98
Units 96 1/19/98
Units 98 1/26/98
-----
- --------------------------------------------------------------------------------------------------------------------------------
UNITS 22,375 552,072 199.88
Rooms 88,504 69 12/31/97
Sq Ft 120 99 12/4/97 80,000 0.21
Sq Ft 83 97 1/15/98
- --------------------------------------------------------------------------------------------------------------------------------
Units 97 6/30/97
Units 89 7/31/97
Units 94 7/8/97
Units 95 10/29/97
Units 83 7/31/97
-----
- --------------------------------------------------------------------------------------------------------------------------------
UNITS 15,866 570,252 250.00
Sq Ft 163 98 11/12/97 21,466 0.10
Units 92 11/30/97
Units 94 11/30/97
- --------------------------------------------------------------------------------------------------------------------------------
Units 73 11/30/97
Units 87 11/30/97
UNITS 49,335
Sq Ft 89 80 12/5/97 128,527 0.45
- --------------------------------------------------------------------------------------------------------------------------------
Units 44,599 84 3/31/98 78,424 390.17
Units 44,207 78 3/31/98 69,954 393.00
Units 42,257 75 3/30/98 43,185 327.16
----- ------ ------ ------
UNITS 43,857 191,563 374.88
Sq Ft 75 93 11/27/97 438,684 1.59
- --------------------------------------------------------------------------------------------------------------------------------
Sq Ft 41 100 2/4/98
Sq Ft 23 100 2/4/98
----- --
SQ FT 35
Units 55,531 94 11/18/97 68,320 224.00
- --------------------------------------------------------------------------------------------------------------------------------
Sq Ft 26 100 9/8/97 398,539 0.63
Sq Ft 84 93 11/30/97 99,343 0.53
Sq Ft 212 100 2/1/98 7,223 0.10
Sq Ft 63 83 2/20/98 244,500 1.01
- --------------------------------------------------------------------------------------------------------------------------------
Units 90 7/31/97
Units 69 10/22/97
UNITS 21,002 187,688 294.64
Beds 44,544 83 9/30/97
- --------------------------------------------------------------------------------------------------------------------------------
Beds 49,803 87 9/30/97
---- ------
BEDS 46,746
Beds 40,180 81 11/30/97
Units 14,797 84 2/25/98 182,025 225.00
Sq Ft 165 100 10/1/97 34,863 0.48
- --------------------------------------------------------------------------------------------------------------------------------
Sq Ft 97 94 12/1/97 65,041 0.55
Sq Ft 90 97 2/2/98 28,555 0.23
Units 55,365 97 8/31/97
Rooms 68,853 75 12/31/97
Sq Ft 17 94 10/1/97
- --------------------------------------------------------------------------------------------------------------------------------
Units 96 12/12/97
Units 98 12/12/97
Units 85 3/14/98
Units 87 3/14/98
-----
- --------------------------------------------------------------------------------------------------------------------------------
UNITS 21,670 116,875 254.08
Units 55,261 97 8/31/97
Units 21,331 90 1/6/98 96,750 225.00
Units 95 3/31/98
- --------------------------------------------------------------------------------------------------------------------------------
Units 94 3/31/98
Units 97 3/31/98
Units 89 3/31/98
Units 93 3/31/98
Units 93 3/31/98
-----
- --------------------------------------------------------------------------------------------------------------------------------
UNITS 22,392 100,000 247.52
Units 18,427 97 8/26/97
Sq Ft 57 97 12/30/97 23,382 0.15
Sq Ft 71 100 9/12/97 14,745 0.12
Rooms 44,723 78 12/1/97
- --------------------------------------------------------------------------------------------------------------------------------
Sq Ft 84 95 12/31/97 142,565 1.40
Sq Ft 106 96 10/31/97 66,499 0.84
Units 20,559 89 12/15/97
Rooms 101,852 81 1/1/98
Sq Ft 174 87 9/25/97 74,143 1.73
- --------------------------------------------------------------------------------------------------------------------------------
Units 26,372 92 9/2/97
Sq Ft 64 100 7/31/97 8,848 0.08
Units 20,627 96 10/31/97 52,200 150.00
Units 19,986 92 8/20/97
- --------------------------------------------------------------------------------------------------------------------------------
Sq Ft 143 98 1/1/98
Sq Ft 69 93 11/1/97 81,826 0.81
Units 36,412 93 9/12/97
Units 40,379 97 1/12/98 40,992 244.00
Units 22,865 96 9/1/97
- --------------------------------------------------------------------------------------------------------------------------------
Beds 55,711 91 9/30/97
Units 53,790 98 11/19/97 27,828 229.98
Rooms 40,398 73 8/31/97
Sq Ft 70 100 6/9/97 53,397 0.61
Sq Ft 30 87 11/19/97 393,168 1.91
- --------------------------------------------------------------------------------------------------------------------------------
Sq Ft 122 99 11/30/97 39,591 0.84
Sq Ft 83 96 11/13/97 10,392 0.15
Sq Ft 65 86 12/5/97 55,439 0.63
Sq Ft 118 100 9/7/97 69,709 1.44
Sq Ft 113 100 1/21/98 134,664 2.66
- --------------------------------------------------------------------------------------------------------------------------------
Rooms 32,243 75 9/30/97
Units 26,388 96 12/9/97 42,000 200.96
Units 27,498 100 10/1/97
Sq Ft 74 89 3/31/98
Sq Ft 37 100 2/23/98
- --------------------------------------------------------------------------------------------------------------------------------
Sq Ft 127 100 1/12/98 6,544 0.16
Sq Ft 83 89 12/11/97
Sq Ft 447 100 1/1/98 22,680 2.03
Sq Ft 75 100 2/12/98 79,462 1.20
Sq Ft 152 98 11/3/97 45,128 1.48
- --------------------------------------------------------------------------------------------------------------------------------
Units 97 12/23/97
Units 100 11/25/97
Units 93 11/25/97
-----
UNITS 22,661 61,178 299.89
- --------------------------------------------------------------------------------------------------------------------------------
Sq Ft 78 100 3/1/98 80,447 1.38
Sq Ft 106 90 2/12/98 41,532 0.98
Units 17,062 90 10/1/97
Sq Ft 60 100 1/19/98 20,328 0.28
Units 19,682 91 10/1/97
- --------------------------------------------------------------------------------------------------------------------------------
Pads 15,249 97 1/26/98 16,284 59.21
Units 18,506 87 9/16/97
Rooms 41,726 66 6/30/97
Units 16,170 95 11/20/97
Sq Ft 242 100 2/10/98 22,480 1.33
- --------------------------------------------------------------------------------------------------------------------------------
Units 13,202 94 9/16/97
Sq Ft 44 96 12/31/97 42,180 0.46
Sq Ft 70 100 2/11/98 59,672 1.05
Sq Ft 90 100 11/21/97 78,000 1.75
Units 14,409 97 9/17/97
- --------------------------------------------------------------------------------------------------------------------------------
Units 19,258 97 8/29/97
Units 31,903 93 10/30/97 24,000 200.00
Sq Ft 46 100 12/11/97 7,369 0.09
Sq Ft 428 100 11/1/97 2,617 0.30
Units 30,350 93 9/29/97
- --------------------------------------------------------------------------------------------------------------------------------
Sq Ft 75 98 12/1/97 62,581 1.34
Beds 105,835 94 12/2/97
Sq Ft 245 100 12/2/97
Beds 34,201 95 9/30/97
Sq Ft 284 100 11/25/97 13,764 1.16
- --------------------------------------------------------------------------------------------------------------------------------
Sq Ft 42 100 3/2/98 12,360 0.15
Units 34,478 99 10/31/97 19,200 200.00
Sq Ft 52 100 11/1/97 57,891 0.91
Units 23,990 92 12/15/97
Units 13,889 81 9/17/97
- --------------------------------------------------------------------------------------------------------------------------------
Units 22,649 94 12/15/97
Units 27,798 93 11/10/97 24,636 226.02
Units 21,896 92 1/31/98 32,448 274.98
Units 11,132 97 1/31/98 10,176 275.03
----- ------ ------ ------
- --------------------------------------------------------------------------------------------------------------------------------
UNITS 19,327 42,624 274.99
Sq Ft 143 100 12/31/97 2,095 0.10
Sq Ft 33 95 12/2/97 11,937 0.13
Sq Ft 41 99 2/6/98 86,590 1.24
- --------------------------------------------------------------------------------------------------------------------------------
Sq Ft 89 100 1/22/98 22,248 1.41
Sq Ft 52 100 2/1/98 25,317 0.90
----- -- ------ ----
SQ FT 65 47,565 1.08
Units 14,630 94 9/1/97
Units 13,529 95 9/18/97
- --------------------------------------------------------------------------------------------------------------------------------
Sq Ft 50 100 11/19/97 44,594 0.79
Units 15,516 93 12/9/97 47,520 264.00
Sq Ft 201 100 12/2/97
Sq Ft 76 100 7/31/97 67,460 1.88
Sq Ft 90 100 2/28/98 63,729 2.10
- --------------------------------------------------------------------------------------------------------------------------------
Units 13,122 91 8/18/97
Sq Ft 25 93 10/31/97 96,876 0.88
Units 29,953 98 2/1/98 28,440 316.00
Units 17,719 99 8/5/97 39,064 257.00
Beds 9,930 94 12/31/97
- --------------------------------------------------------------------------------------------------------------------------------
Sq Ft 53 98 9/15/97 61,143 1.29
Sq Ft 23 91 1/26/98 77,940 0.73
Rooms 53,070 80 6/30/97
Units 17,722 96 12/31/97 35,000 250.00
Units 10,361 90 10/29/97
- --------------------------------------------------------------------------------------------------------------------------------
Sq Ft 120 100 12/30/97 6,994 0.35
Sq Ft 47 93 12/23/97 37,411 0.75
Units 15,285 95 8/20/97
Units 12,507 97 10/28/97
Sq Ft 80 77 1/14/98 28,992 1.01
- --------------------------------------------------------------------------------------------------------------------------------
Sq Ft 251 100 11/11/97 13,006 1.42
Sq Ft 75 100 10/29/97 25,919 0.85
Sq Ft 51 100 12/18/97 15,248 0.34
Sq Ft 31 82 11/1/97 105,336 1.44
Units 12,120 93 9/4/97
- --------------------------------------------------------------------------------------------------------------------------------
Sq Ft 63 100 10/30/97 52,152 1.49
Beds 25,826 85 9/30/97
Sq Ft 38 89 12/31/97 32,712 0.57
Units 16,979 97 9/2/97
Units 19,557 93 10/27/97
- --------------------------------------------------------------------------------------------------------------------------------
Sq Ft 100 3/13/98
Sq Ft 100 3/13/98
SQ FT 47 28,725 0.64
Units 7,936 88 10/28/97
- --------------------------------------------------------------------------------------------------------------------------------
Units 16,891 87 9/1/97
Sq Ft 60 93 11/17/97 30,490 0.89
Sq Ft 49 100 11/21/97 39,988 0.98
Units 16,701 94 12/19/97 36,060 303.03
Sq Ft 35 92 2/23/98
- --------------------------------------------------------------------------------------------------------------------------------
Sq Ft 62 98 11/19/97 31,576 1.09
Units 100 12/9/97
Units 100 12/9/97
UNITS 26,776 12,600 200.00
- --------------------------------------------------------------------------------------------------------------------------------
Sq Ft 112 100 1/28/98
Units 7,589 91 10/27/97
Beds 28,436 94 9/30/97
Sq Ft 42 92 9/30/97 39,880 1.01
Beds 9,685 98 1/19/98
- --------------------------------------------------------------------------------------------------------------------------------
Sq Ft 61 100 11/7/97 8,613 0.33
Units 18,765 95 2/13/98 19,125 225.00
Units 18,249 92 9/2/97
Sq Ft 146 100 1/13/98 18,557 1.82
Units 26,778 100 11/17/97 14,850 275.00
- --------------------------------------------------------------------------------------------------------------------------------
Sq Ft 64 95 1/30/98 8,262 0.37
Units 18,851 97 11/1/97
Units 9,403 94 10/29/97
Units 18,588 96 10/30/97 13,400 200.00
Units 14,609 92 8/18/97
- --------------------------------------------------------------------------------------------------------------------------------
Units 11,033 92 9/18/97
Sq Ft 41 100 11/19/97 30,959 1.13
Sq Ft 53 100 11/17/97 24,983 1.26
Units 17,232 97 8/30/97 12,000 200.00
Units 21,407 98 1/26/98 12,000 250.00
- --------------------------------------------------------------------------------------------------------------------------------
Sq Ft 52 99 11/1/97 3,876 0.20
Sq Ft 40 100 7/11/97 2,240 0.09
Beds 9,692 91 3/31/97
Sq Ft 23 94 10/17/97 46,885 1.19
Sq Ft 70 100 11/19/97 11,501 1.07
- --------------------------------------------------------------------------------------------------------------------------------
Units 17,234 97 8/31/97 7,400 200.00
</TABLE>
<TABLE>
<CAPTION>
LARGEST LARGEST
LARGEST TENANT TENANT TENANT
AREA LEASED % OF LEASE YEAR YEAR
LARGEST TENANT NAME (SQ. FT.) NSF EXP. DATE BUILT RENOVATED
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1970
1984 1984
1972
1971
- ----------------------------------------------------------------------------------------------------------------------------------
1971
1973
1970
1958
1970
- ----------------------------------------------------------------------------------------------------------------------------------
1971
1970 1995-1996
1972
1972
1971 1984,1986,1987
- ----------------------------------------------------------------------------------------------------------------------------------
1983
1971 1973
1962
1972
1969 1972, 1975
- ----------------------------------------------------------------------------------------------------------------------------------
1971 & 1972 1982
1975
1971
1971 1974, 1976, 1978
1972 1993-1998
- ----------------------------------------------------------------------------------------------------------------------------------
1902 1939
1971 1974
1974
1972 1979
1970
- ----------------------------------------------------------------------------------------------------------------------------------
1969 1974 & 1981
1973
1971
1968
1967 1992
- ----------------------------------------------------------------------------------------------------------------------------------
1970 1993
1973 1984
1976
1971
1971
- ----------------------------------------------------------------------------------------------------------------------------------
1973
1963
1975
1963 1971
1967
- ----------------------------------------------------------------------------------------------------------------------------------
1970
1946 1962
1965
1972 1993
1970
- ----------------------------------------------------------------------------------------------------------------------------------
1974
1970
1968
1968
1972 1997
- ----------------------------------------------------------------------------------------------------------------------------------
1968
1969 1994, 1995
1974 1995
1963
1963
- ----------------------------------------------------------------------------------------------------------------------------------
1965 1993
1969 1995
1968 1993
1975
1978 1996
- ----------------------------------------------------------------------------------------------------------------------------------
1970
1940 1994
1963 1973
1967
1968 1996
- ----------------------------------------------------------------------------------------------------------------------------------
1963/1965 1965
1976
1971
1965 1970 & 1993
- ----------------------------------------------------------------------------------------------------------------------------------
1967 1988
1963 1993 & 1997
1969 1998
1960 1974 & 1985
1971
- ----------------------------------------------------------------------------------------------------------------------------------
1960
1968
1968 1993
1972 1980
1968 1993/1994
- ----------------------------------------------------------------------------------------------------------------------------------
1968 1986
1962
1968
1969
- ----------------------------------------------------------------------------------------------------------------------------------
1989 1994
1983 1997
1980 1997
1982 1996-97
- ----------------------------------------------------------------------------------------------------------------------------------
1970 1996 & Current
1979 1996
1983 1996,1997
1975-1979 1997
1978
- ----------------------------------------------------------------------------------------------------------------------------------
1983 1997-1998
Diamond Dealers Club 22,000 6 9/1/09 1925-1926 1980's
Cub Foods (BBB) 75,826 14 10/8/16 1997
- ----------------------------------------------------------------------------------------------------------------------------------
1985
1990
1976-1986
1975-1997
1988
- ----------------------------------------------------------------------------------------------------------------------------------
Avon 26,675 12 3/1/13 1983
1974
1987
- ----------------------------------------------------------------------------------------------------------------------------------
1990 & 1996
1974 1995
JC Penney Home Store 50,000 18 9/30/07 1996-1997
- ----------------------------------------------------------------------------------------------------------------------------------
1985
1983
1989
Continental Broker 28,769 10 2/14/08 1969
- ----------------------------------------------------------------------------------------------------------------------------------
Fleet Bank 382,605 100 12/31/04 1958-1971 1990
IBM 200,000 100 2/7/08 1965
1982
- ----------------------------------------------------------------------------------------------------------------------------------
K-Mart 627,975 100 2/28/01 1972 1978
Ames 55,650 30 1/31/07 1986
Viacom International, Inc. 72,232 100 1/31/08 1997 1997
Shopper's Food 43,895 18 8/31/07 1989-1990
- ----------------------------------------------------------------------------------------------------------------------------------
1974-79
1965 1995-1997
1993
- ----------------------------------------------------------------------------------------------------------------------------------
1991
1990
1978-1979 1997-1998
SS Mart at Hollywood Plaza 27,491 38 7/30/10 1995
- ----------------------------------------------------------------------------------------------------------------------------------
Bugle Boy 6,721 6 12/31/02 1991-1992
Aldi, Inc 17,778 14 5/31/03 1956 1986
1984 989,1994,1996,1997
1927 1984
Blockbuster, Inc. 106,267 18 4/1/02 1985
- ----------------------------------------------------------------------------------------------------------------------------------
1965
1970
1968
1967
- ----------------------------------------------------------------------------------------------------------------------------------
1988
1985
1930 1997
- ----------------------------------------------------------------------------------------------------------------------------------
1938 1997
1928 1997
1939 1997
1925 1997
1947 1997
- ----------------------------------------------------------------------------------------------------------------------------------
1972
Toys "R" US, Inc. 43,219 28 1/31/06 1980-1981 1997
Emporium 32,775 27 8/31/99 1988
1994
- ----------------------------------------------------------------------------------------------------------------------------------
Davis Market Research 8,945 9 7/31/98 1981 1986
The Gap 11,850 15 3/1/07 1981 1996-1997
1979
1991
Knowlwood Restaurant 5,600 13 11/1/12 1992
- ----------------------------------------------------------------------------------------------------------------------------------
1971
Pacific Theatres 33,800 30 12/31/06 1980 & 1991
1946
1988
- ----------------------------------------------------------------------------------------------------------------------------------
Barnes & Noble 21,000 43 1/31/09 1979 1993
Walgreens Drug 11,520 11 2/28/28 1964, 1980, 1988
1987 1994
1986-1988
1972
- ----------------------------------------------------------------------------------------------------------------------------------
1990
1965
1990
Time Warner Cable Communications of Queens 60,000 68 9/30/06 1984-1989
Conagra 45,819 22 11/30/99 1968-69-70
- ----------------------------------------------------------------------------------------------------------------------------------
Executive Suites 34,895 74 3/1/98 1986-1987
Wellmark International 14,909 22 5/30/00 1983
State of Nevada Welfare Div 25,000 28 8/31/06 1958-1959 1993-1994
FHP, Inc. 18,300 38 11/30/00 1990
Wickes Furniture Company, Inc. 50,545 100 5/27/04 1989
- ----------------------------------------------------------------------------------------------------------------------------------
1972 1993-1996
1979 1996, 1997
1990
Cloth World (Brown Group Retail, Inc.) 10,000 14 11/30/01 1983, 1985
Iron Mountain 68,200 48 11/30/06 1987
- ----------------------------------------------------------------------------------------------------------------------------------
Cigna Healthplan of Arizona, Inc. 40,900 100 3/14/01 1991
Body Ventures 7,000 12 9/30/03 1979
B. Moloch Restaurant 6,723 60 11/30/07 1928 1986
Fox Animation Studio 66,218 100 10/31/04 1985 1994-1996
Blackhawk Video 4,275 14 6/14/02 1994-1996
- ----------------------------------------------------------------------------------------------------------------------------------
1968 1993-1997
1968 1996-1997
1965
- ----------------------------------------------------------------------------------------------------------------------------------
TLC 4 KIDS, INC D/B/A BABY'S BEST BUY 4,840 8 5/31/98 1987 1996
Sports Orthopedic 8,900 21 10/31/02 1987-1997
1964
SuperValu Stores 41,720 57 10/31/06 1986
1985
- ----------------------------------------------------------------------------------------------------------------------------------
1950-1960
1983
1986 1993
1982
Back Bay Restaurant Group, Inc. 16,888 100 9/30/12 1884 1990-1991
- ----------------------------------------------------------------------------------------------------------------------------------
1971
Farmer Jack 38,485 42 9/30/06 1986, 1987
Fast Food Merchandiser 32,310 57 12/31/04 1987 1997-1998
Galavs Travel 3,850 9 4/30/98 1933 1994-1997
1984
- ----------------------------------------------------------------------------------------------------------------------------------
1967
1990
BFI 49,007 60 12/31/99 1970
Fleet National Bank 8,724 100 7/9/10 1989
1968 1996
- ----------------------------------------------------------------------------------------------------------------------------------
Blockbuster 7,350 16 5/31/99 1987
1937 1965, 1968, 1997
Walgreens Co. 13,905 100 10/31/57 1997
1987
Bice Restaurant 11,854 100 12/31/07 1951 1997
- ----------------------------------------------------------------------------------------------------------------------------------
St. Vincents (9450 Bldg.) 33,366 41 9/30/99 1951-1979 1978
1988-1990
Square D Corporation 63,340 100 8/1/00 1985
1988
1984
- ----------------------------------------------------------------------------------------------------------------------------------
1987
1988 1996-1997
1967 1987
1962 1996-1997
- ----------------------------------------------------------------------------------------------------------------------------------
Pill Box Pharmacy 3,040 15 9/24/02 1997
F&D Medical Consulting 10,800 12 7/31/02 1983
Systex 10,500 15 2/29/00 1970-74 1989-1990
- ----------------------------------------------------------------------------------------------------------------------------------
Ameriquest Mortgage 3,060 19 8/14/02 1989
Pacific Recorders and Engineering (PRE) 28,110 100 5/14/05 1984
1973
1984
- ----------------------------------------------------------------------------------------------------------------------------------
Healthcare Management 11,116 20 10/31/01 1984
1930s-70s 1997
Walgreens Co. 13,905 100 10/31/57 1997
Community Credit Union 5,674 16 4/30/01 1985
Parametric Technology 14,400 47 5/31/98 1962 - 1964 1998
- ----------------------------------------------------------------------------------------------------------------------------------
1983
Minyards 36,904 33 4/27/02 1964-1981 1994-1997
1968 1996
1985
1992
- ----------------------------------------------------------------------------------------------------------------------------------
Dutchess Community College 25,000 53 3/15/02 1986
Texas Comptrollers 10,688 10 2/28/99 1982
1983/1984
1949 1994-1997
1974-1976
- ----------------------------------------------------------------------------------------------------------------------------------
New Jersey Family Fun Centers (Laser Storm) 6,300 32 10/31/02 1997
Xata Corporation 20,588 41 6/30/04 1996
1983
1982
Intl House of Pancakes 4,000 14 11/30/13 1978
- ----------------------------------------------------------------------------------------------------------------------------------
L'Chateau Retreat, Inc. 2,754 30 7/31/02 1997
Johnson Floral 3,265 11 12/31/02 1905-1910 1989-1996
Womens Workout & Fit 12,138 27 12/31/99 1985
Northwest Covenant 8,082 11 4/30/00 1954-1958
1978
- ----------------------------------------------------------------------------------------------------------------------------------
Social Security Administration 13,852 40 3/14/03 1958
1928-1987 1987
Mead Corporation 6,701 12 3/31/99 1986
1970
1974 1993
- ----------------------------------------------------------------------------------------------------------------------------------
Trevco, Inc 10,200 100 8/31/99 1984
Magellan Dis, Inc. 22,744 65 7/31/02 1987
1982
- ----------------------------------------------------------------------------------------------------------------------------------
1965
Northeast Executive Suites 10,221 30 9/30/00 1987
Media One Inc. 40,804 100 10/31/07 1993 1997
1965
EAI Corporation 23,100 45 8/31/98 1986
- ----------------------------------------------------------------------------------------------------------------------------------
ICG Telecom 10,330 36 9/30/06 1968 1997
1950
1960
- ----------------------------------------------------------------------------------------------------------------------------------
SSM Health Care, Inc. 15,000 100 10/31/06 1997
1982
1971
Re/Max & Assoc. 8,047 20 9/30/00 1985
1973
- ----------------------------------------------------------------------------------------------------------------------------------
Fiesta Han 2,000 8 5/31/99 1985
1977
1980
Vantana 1,500 15 8/31/98 1955 & 1985 1995
1965
- ----------------------------------------------------------------------------------------------------------------------------------
Joseph Song Productions, Inc. 2,250 10 6/1/01 Early 1900's 1988/89
1972 1993
1982
1980
1984
- ----------------------------------------------------------------------------------------------------------------------------------
1984
Milner Document Products, INc. 15,944 58 7/31/99 1984
Century 21 7,100 36 4/30/00 1983
1981
1967
- ----------------------------------------------------------------------------------------------------------------------------------
Designer Woodworks 3,518 18 4/1/98 Mid 1800's,1974,1995 1994-1996
MCM Video Security, Inc. 8,809 35 10/31/98 1972 1996
1969
Sav A Lot 12,720 32 11/30/03 1970-1974
Linfield Capital 2,088 19 5/31/98 1985
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
DISTRIBUTION OF PROPERTY BY STATE
<TABLE>
<CAPTION>
PERCENTAGE OF
AGGREGATE
NUMBER OF CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE PRINCIPAL BALANCE
MORTGAGE PRINCIPAL PRINCIPAL -------------------------------------------
PROPERTY STATE PROPERTIES BALANCE BALANCE MINIMUM MAXIMUM AVERAGE
- ---------------------------- ------------ ----------------- --------------- -------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Texas ...................... 85 $ 310,782,395 21.61% $ 0 $61,800,612 $ 3,656,263
New York ................... 13 152,293,306 10.59 1,446,021 45,000,000 11,714,870
California ................. 25 134,299,281 9.34 988,567 25,422,055 5,371,971
Arizona .................... 23 102,987,628 7.16 1,147,450 8,973,776 4,477,723
Illinois ................... 34 100,578,286 6.99 239,233 10,127,530 2,958,185
District of Columbia ....... 3 64,920,483 4.51 411,898 61,924,861 21,640,161
Washington ................. 4 63,033,903 4.38 2,195,182 48,942,695 15,758,476
Florida .................... 11 54,445,035 3.79 637,654 11,973,636 4,949,549
Minnesota .................. 3 51,567,186 3.59 2,344,187 44,852,613 17,189,062
Maryland ................... 8 37,396,229 2.60 1,810,552 11,233,745 4,674,529
Michigan ................... 8 36,604,997 2.55 1,027,554 16,936,955 4,575,625
Louisiana .................. 5 36,191,152 2.52 36,191,152 36,191,152 7,238,230
Oregon ..................... 5 35,985,336 2.50 3,365,150 10,327,999 7,197,067
New Jersey ................. 16 29,686,459 2.06 1,442,716 9,968,325 1,855,404
Virginia ................... 5 26,906,398 1.87 1,595,177 15,202,679 5,381,280
Missouri ................... 8 26,083,560 1.81 1,677,521 6,809,066 3,260,445
Georgia .................... 10 25,003,208 1.74 758,662 5,499,562 2,500,321
Utah ....................... 4 24,032,603 1.67 998,840 11,564,963 6,008,151
Massachusetts .............. 3 23,157,868 1.61 2,739,475 16,325,042 7,719,289
Rhode Island ............... 2 17,298,892 1.20 1,646,502 15,652,390 8,649,446
Delaware ................... 3 15,859,106 1.10 2,481,051 13,378,055 5,286,369
Pennsylvania ............... 2 12,948,658 0.90 5,777,094 7,171,565 6,474,329
Nevada ..................... 2 11,142,981 0.77 5,406,396 5,736,585 5,571,491
North Carolina ............. 3 10,521,317 0.73 3,262,607 3,993,827 3,507,106
Colorado ................... 1 6,973,065 0.48 6,973,065 6,973,065 6,973,065
Nebraska ................... 1 6,153,174 0.43 6,153,174 6,153,174 6,153,174
Connecticut ................ 2 4,641,398 0.32 905,063 3,736,335 2,320,699
Wisconsin .................. 1 4,539,085 0.32 4,539,085 4,539,085 4,539,085
Kentucky ................... 1 3,497,339 0.24 3,497,339 3,497,339 3,497,339
Tennessee .................. 1 3,492,543 0.24 3,492,543 3,492,543 3,492,543
Arkansas ................... 1 2,681,087 0.19 2,681,087 2,681,087 2,681,087
Idaho ...................... 1 2,296,307 0.16 2,296,307 2,296,307 2,296,307
-- -------------- ------ ------------ ----------- -----------
Total*/Avg./Wtd.Avg./
Min./Max. ................ 294 $1,438,000,264 100.00% $ 0 $61,924,861 $ 4,891,157
=== ============== ====== ============ =========== ===========
<CAPTION>
WEIGHTED WEIGHTED
DEBT SERVICE COVERAGE RATIO AVERAGE AVERAGE WEIGHTED
---------------------------- MORTGAGE REMAINING AVERAGE
WEIGHTED INTEREST TERM TO CUT-OFF DATE
PROPERTY STATE MINIMUM MAXIMUM AVERAGE RATE MATURITY LTV
- ---------------------------- --------- --------- ---------- ------------ ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Texas ...................... 1.28 2.19 1.51 6.9975% 123.8 79.28%
New York ................... 1.00 1.92 1.58 7.2064 145.6 59.24
California ................. 1.20 5.38 1.38 7.4108 124.6 72.01
Arizona .................... 1.20 1.86 1.59 7.1059 186.3 63.91
Illinois ................... 1.34 1.76 1.59 6.8566 124.9 83.96
District of Columbia ....... 1.59 1.66 1.59 7.5046 119.0 50.67
Washington ................. 1.35 1.96 1.67 7.4077 118.4 57.64
Florida .................... 1.31 1.88 1.52 7.4178 131.0 65.59
Minnesota .................. 1.28 1.42 1.40 7.0753 116.1 71.22
Maryland ................... 1.17 1.37 1.26 7.4679 141.4 77.29
Michigan ................... 1.26 1.82 1.49 6.9534 138.7 70.26
Louisiana .................. 1.50 1.50 1.50 6.9800 114.0 62.93
Oregon ..................... 1.30 1.49 1.44 7.7031 164.4 62.68
New Jersey ................. 1.30 1.40 1.35 7.3332 118.2 75.48
Virginia ................... 1.26 1.47 1.31 7.4081 127.4 74.79
Missouri ................... 1.03 1.34 1.18 7.1302 144.7 82.26
Georgia .................... 1.35 1.79 1.58 7.1843 180.2 61.01
Utah ....................... 1.31 1.82 1.43 7.1508 116.7 70.68
Massachusetts .............. 1.23 1.30 1.25 7.2826 118.0 76.35
Rhode Island ............... 1.33 3.14 1.50 7.4571 116.2 74.16
Delaware ................... 1.30 1.34 1.34 7.0169 87.6 76.60
Pennsylvania ............... 1.51 1.93 1.74 8.4500 116.0 76.18
Nevada ..................... 1.26 1.50 1.38 7.0718 117.5 73.73
North Carolina ............. 1.32 1.84 1.48 7.2049 154.0 67.38
Colorado ................... 1.30 1.30 1.30 7.3800 115.0 67.37
Nebraska ................... 1.33 1.33 1.33 7.2100 236.0 57.51
Connecticut ................ 1.03 1.32 1.08 7.2059 140.3 81.71
Wisconsin .................. 1.23 1.23 1.23 7.2000 118.0 73.21
Kentucky ................... 1.30 1.30 1.30 7.3800 119.0 73.63
Tennessee .................. 2.89 2.89 2.89 7.9400 118.0 77.61
Arkansas ................... 2.07 2.07 2.07 7.9800 118.0 58.28
Idaho ...................... 1.31 1.31 1.31 7.1200 118.0 71.76
---- ---- ---- ------ ----- -----
Total*/Avg./Wtd.Avg./
Min./Max. ................ 1.00 5.38 1.49 7.2017% 133.0 70.45%
==== ==== ==== ====== ===== =====
</TABLE>
- -------
For purposes of this table, each Mortgage Loan secured by multiple Mortgaged
Properties (including the Senior Living Loan (as defined herein)) is treated as
the number of Mortgage Loans equal to the number of Mortgaged Properties, each
of which is allocated a Cut-off Date Balance based on the Allocated Principal
Amounts thereof (as defined herein).
* Totals may not equal due to rounding.
A-14
<PAGE>
DISTRIBUTION OF SPECIFIC PROPERTY TYPES
<TABLE>
<CAPTION>
PERCENTAGE OF
AGGREGATE
NUMBER OF CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE PRINCIPAL BALANCE
MORTGAGE PRINCIPAL PRINCIPAL ------------------------------------------
PROPERTY TYPE PROPERTIES BALANCE BALANCE MINIMUM MAXIMUM AVERAGE
- --------------------------------- ------------ ----------------- --------------- ------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Multifamily ..................... 90 $ 375,985,582 26.15% $ 411,898 $61,800,612 $ 4,177,618
Retail .......................... 40 273,969,673 19.05 905,063 44,852,613 6,849,242
Skilled Nursing Facility ........ 91 252,018,942 17.53 0 10,127,530 2,769,439
Hospitality ..................... 10 168,104,507 11.69 2,494,282 61,924,861 16,810,451
Office .......................... 25 155,984,444 10.85 1,046,775 45,000,000 6,239,378
Independent/Assisted Living ..... 12 67,372,430 4.69 239,233 12,800,437 5,614,369
Mixed Use ....................... 8 60,001,740 4.17 758,662 34,919,372 7,500,217
Industrial ...................... 13 46,583,219 3.24 994,454 16,325,042 3,583,325
Other ........................... 5 37,979,725 2.64 3,492,543 15,330,575 7,595,945
-- -------------- ------ ----------- ----------- -----------
Total*/Avg./Wtd.Avg./
Min./Max. ..................... 294 $1,438,000,264 100.00% $ 0 $61,924,861 $ 4,891,157
=== ============== ====== =========== =========== ===========
<CAPTION>
WEIGHTED WEIGHTED
DEBT SERVICE COVERAGE RATIO AVERAGE AVERAGE WEIGHTED
------------------------------ MORTGAGE REMAINING AVERAGE
WEIGHTED INTEREST TERM TO CUT-OFF DATE
PROPERTY TYPE MINIMUM MAXIMUM AVERAGE RATE MATURITY LTV
- --------------------------------- --------- --------- ---------- ------------ ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Multifamily ..................... 1.20 2.19 1.50 7.0873% 150.9 67.86%
Retail .......................... 1.03 1.82 1.35 7.3013 128.9 72.98
Skilled Nursing Facility ........ 1.51 5.38 1.64 6.9615 117.2 85.47
Hospitality ..................... 1.47 1.96 1.61 7.5500 126.8 54.32
Office .......................... 1.00 1.88 1.45 7.1614 136.2 65.27
Independent/Assisted Living ..... 1.09 1.60 1.39 7.0687 116.2 76.66
Mixed Use ....................... 1.30 1.92 1.68 7.4168 152.1 58.44
Industrial ...................... 1.00 1.48 1.25 7.2993 122.9 73.16
Other ........................... 1.24 2.89 1.46 7.6099 117.5 75.52
---- ---- ---- ------ ----- -----
Total*/Avg./Wtd.Avg./
Min./Max. ..................... 1.00 5.38 1.49 7.2017% 133.0 70.45%
==== ==== ==== ====== ===== =====
</TABLE>
- -------
For purposes of this table, each Mortgage Loan secured by multiple Mortgaged
Properties (including the Senior Living Loan (as defined herein)) is treated as
the number of Mortgage Loans equal to the number of Mortgaged Properties, each
of which is allocated a Cut-off Date Balance based on the Allocated Principal
Amounts thereof (as defined herein).
* Totals may not equal due to rounding.
A-15
<PAGE>
DISTRIBUTION OF AMORTIZATION TYPES
<TABLE>
<CAPTION>
PERCENTAGE OF
AGGREGATE
NUMBER OF CUT-OFF DATE CUR-OFF DATE CUT-OFF DATE PRINCIPAL BALANCE
MORTGAGE PRINCIPAL PRINCIPAL -------------------------------------------
AMORTIZATION TYPE LOANS BALANCE BALANCE MINIMUM MAXIMUM AVERAGE
- -------------------------- ----------- ----------------- --------------- ------------- --------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Balloon .................. 103 $ 882,979,842 61.40% $ 411,898 $225,437,229 $ 8,572,620
Hyper Amortizing ......... 34 392,494,174 27.29 1,027,554 61,924,861 11,543,946
Fully Amortizing ......... 44 162,526,248 11.30 988,567 15,873,962 3,693,778
--- -------------- ------ ----------- ------------ -----------
Total*/Avg./Wtd.Avg./
Min./Max. .............. 181 $1,438,000,264 100.00% $ 411,898 $225,437,229 $ 7,944,753
=== ============== ====== =========== ============ ===========
<CAPTION>
WEIGHTED WEIGHTED
DEBT SERVICE COVERAGE RATIO AVERAGE AVERAGE WEIGHTED
------------------------------ MORTGAGE REMAINING AVERAGE
WEIGHTED INTEREST TERM TO CUT-OFF DATE
AMORTIZATION TYPE MINIMUM MAXIMUM AVERAGE RATE MATURITY LTV
- -------------------------- --------- --------- ---------- ------------ ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Balloon .................. 1.09 2.89 1.48 7.1767% 122.2 75.65%
Hyper Amortizing ......... 1.23 1.96 1.46 7.3298 125.5 63.88
Fully Amortizing ......... 1.00 5.38 1.66 7.0280 210.0 58.10
---- ---- ---- ------ ----- -----
Total*/Avg./Wtd.Avg./
Min./Max. .............. 1.00 5.38 1.49 7.2017% 133.0 70.45%
==== ==== ==== ====== ===== =====
</TABLE>
- -------
* Totals may not equal due to rounding.
A-16
<PAGE>
DISTRIBUTION OF PREPAYMENT PENALTIES
<TABLE>
<CAPTION>
PERCENTAGE OF
AGGREGATE
NUMBER OF CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE PRINCIPAL BALANCE
MORTGAGE PRINCIPAL PRINCIPAL ------------------------------------------
PREPAYMENT RESTRICTION LOANS BALANCE BALANCE MINIMUM MAXIMUM AVERAGE
- --------------------------- ----------- ----------------- --------------- ------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Yield Maintenance ......... 134 $ 745,443,129 51.84% $ 637,654 $ 45,000,000 $ 5,563,008
Defeasance ................ 43 677,606,123 47.12 411,898 225,437,229 15,758,282
Fixed Percentage .......... 2 7,065,919 0.49 1,810,552 5,255,368 3,532,960
Other ..................... 2 7,885,092 0.55 905,063 6,980,029 3,942,546
--- -------------- ------ ----------- ------------ -----------
Total*/Avg./Wtd.Avg./
Min./Max. ............... 181 $1,438,000,264 100.00% $ 411,898 $225,437,229 $ 7,944,753
=== ============== ====== =========== ============ ===========
<CAPTION>
WEIGHTED WEIGHTED
DEBT SERVICE COVERAGE RATIO AVERAGE AVERAGE WEIGHTED
------------------------------ MORTGAGE REMAINING AVERAGE
WEIGHTED INTEREST TERM TO CUT-OFF DATE
PREPAYMENT RESTRICTION MINIMUM MAXIMUM AVERAGE RATE MATURITY LTV
- --------------------------- --------- --------- ---------- ------------ ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Yield Maintenance ......... 1.03 5.38 1.51 7.2573% 142.7 68.29%
Defeasance ................ 1.00 1.77 1.48 7.1375 122.4 72.86
Fixed Percentage .......... 1.17 1.37 1.22 7.5500 151.0 74.40
Other ..................... 1.32 1.68 1.64 7.1505 117.0 64.48
---- ---- ---- ------ ----- -----
Total*/Avg./Wtd.Avg./
Min./Max. ............... 1.00 5.38 1.49 7.2017% 133.0 70.45%
==== ==== ==== ====== ===== =====
</TABLE>
- -------
* Totals may not equal due to rounding.
A-17
<PAGE>
DISTRIBUTION OF YEARS OF ORIGINATION
<TABLE>
<CAPTION>
PERCENTAGE OF
AGGREGATE
NUMBER OF CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE PRINCIPAL BALANCE
MORTGAGE PRINCIPAL PRINCIPAL -------------------------------------------
YEAR OF ORIGINATION LOANS BALANCE BALANCE MINIMUM MAXIMUM AVERAGE
- ---------------------- ----------- ----------------- --------------- ------------- --------------- -------------
<S> <C> <C> <C> <C> <C> <C>
1995 ................. 2 $ 7,065,919 0.49% $1,810,552 $ 5,255,368 $3,532,960
1997 ................. 93 627,341,024 43.63 637,654 61,800,612 6,745,602
1998 ................. 86 803,593,321 55.88 411,898 225,437,229 9,344,108
-- -------------- ------ ---------- ------------ ----------
Total*/Avg./Wtd.Avg./
Min./Max. .......... 181 $1,438,000,264 100.00% $ 411,898 $225,437,229 $7,944,753
=== ============== ====== ========== ============ ==========
<CAPTION>
WEIGHTED WEIGHTED
DEBT SERVICE COVERAGE RATIO AVERAGE AVERAGE WEIGHTED
------------------------------ MORTGAGE REMAINING AVERAGE
WEIGHTED INTEREST TERM TO CUT-OFF DATE
YEAR OF ORIGINATION MINIMUM MAXIMUM AVERAGE RATE MATURITY LTV
- ---------------------- --------- --------- ---------- ------------ ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
1995 ................. 1.17 1.37 1.22 7.5500% 151.0 74.40%
1997 ................. 1.03 5.38 1.49 7.2508 144.1 67.35
1998 ................. 1.00 3.14 1.50 7.1603 124.2 72.84
---- ---- ---- ------ ----- -----
Total*/Avg./Wtd.Avg./
Min./Max. .......... 1.00 5.38 1.49 7.2017% 133.0 70.45%
==== ==== ==== ====== ===== =====
</TABLE>
- -------
* Totals may not equal due to rounding.
A-18
<PAGE>
DISTRIBUTION OF REMAINING AMORTIZATION TERMS
<TABLE>
<CAPTION>
PERCENTAGE OF
AGGREGATE
RANGE OF NUMBER OF CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE PRINCIPAL BALANCE
AMORTIZATION TERMS MORTGAGE PRINCIPAL PRINCIPAL --------------------------------------------
(MONTHS) LOANS BALANCE BALANCE MINIMUM MAXIMUM AVERAGE
- ---------------------- ----------- ----------------- --------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
71 - 90 ............ 1 $ 15,873,962 1.10% $15,873,962 $ 15,873,962 $15,873,962
91 - 110 ............ 1 1,677,521 0.12 1,677,521 1,677,521 1,677,521
111 - 130 ............ 2 6,219,574 0.43 1,646,502 4,573,072 3,109,787
131 - 150 ............ 1 3,736,335 0.26 3,736,335 3,736,335 3,736,335
171 - 190 ............ 4 40,265,640 2.80 988,567 36,191,152 10,066,410
211 - 230 ............ 1 4,370,386 0.30 4,370,386 4,370,386 4,370,386
231 - 250 ............ 41 143,341,737 9.97 905,063 8,973,776 3,496,140
291 - 310 ............ 40 567,560,418 39.47 994,454 225,437,229 14,189,010
331 - 360 ............ 90 654,954,690 45.55 411,898 61,800,612 7,277,274
-- -------------- ------ ----------- ------------ -----------
Total*/Avg./Wtd.Avg./
Min./Max. .......... 181 $1,438,000,264 100.00% $ 411,898 $225,437,229 $ 7,944,753
=== ============== ====== =========== ============ ===========
<CAPTION>
WEIGHTED WEIGHTED
DEBT SERVICE COVERAGE RATIO AVERAGE AVERAGE WEIGHTED
RANGE OF ------------------------------ MORTGAGE REMAINING AVERAGE
AMORTIZATION TERMS WEIGHTED INTEREST TERM TO CUT-OFF DATE
(MONTHS) MINIMUM MAXIMUM AVERAGE RATE MATURITY LTV
- ---------------------- --------- --------- ---------- ------------ ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
71 - 90 ............ 1.00 1.00 1.00 6.9100% 80.0 81.20%
91 - 110 ............ 1.06 1.06 1.06 7.2500 106.0 67.10
111 - 130 ............ 1.00 3.14 1.57 7.0980 118.0 48.35
131 - 150 ............ 1.03 1.03 1.03 7.1250 146.0 83.96
171 - 190 ............ 1.22 5.38 1.58 7.0361 120.5 62.14
211 - 230 ............ 1.28 1.28 1.28 7.3750 117.0 69.37
231 - 250 ............ 1.03 2.19 1.71 7.0482 225.8 56.17
291 - 310 ............ 1.09 2.89 1.56 7.2174 120.5 73.28
331 - 360 ............ 1.20 1.92 1.41 7.2391 125.8 71.53
---- ---- ---- ------ ----- -----
Total*/Avg./Wtd.Avg./
Min./Max. .......... 1.00 5.38 1.49 7.2017% 133.0 70.45%
==== ==== ==== ====== ===== =====
</TABLE>
- -------
* Totals may not equal due to rounding.
A-19
<PAGE>
DISTRIBUTION OF CUT-OFF DATE LOAN TO VALUE AT ORIGINATION RATIOS
<TABLE>
<CAPTION>
PERCENTAGE OF
AGGREGATE
NUMBER OF CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE PRINCIPAL BALANCE
RANGE OF CURRENT MORTGAGE PRINCIPAL PRINCIPAL -----------------------------------------------
LOAN-TO-VALUE RATIOS LOANS BALANCE BALANCE MINIMUM MAXIMUM AVERAGE
- -------------------------- ----------- ----------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
20.01% - 30.00% ......... 2 $ 2,635,069 0.18% $ 988,567 $ 1,646,502 $ 1,317,534
30.01% - 50.00% ......... 9 142,233,130 9.89 2,229,998 61,924,861 15,803,681
50.01% - 60.00% ......... 44 246,279,251 17.13 1,147,450 48,942,695 5,597,256
60.01% - 65.00% ......... 11 69,907,277 4.86 998,840 36,191,152 6,355,207
65.01% - 70.00% ......... 18 85,603,297 5.95 411,898 11,962,586 4,755,739
70.01% - 75.00% ......... 51 267,464,838 18.60 758,662 44,852,613 5,244,409
75.01% - 80.00% ......... 36 335,212,716 23.31 637,654 61,800,612 9,311,464
80.01% - 85.00% ......... 7 57,036,973 3.97 1,442,716 16,325,042 8,148,139
85.01% - 90.00% ......... 1 225,437,229 15.68 225,437,229 225,437,229 225,437,229
95.01% - 100.00% ......... 2 6,190,484 0.43 2,788,955 3,401,529 3,095,242
-- -------------- ------ ------------- ------------ -------------
Total*/Avg./Wtd.Avg./
Min./Max. .............. 181 $1,438,000,264 100.00% $ 411,898 $225,437,229 $ 7,944,753
=== ============== ====== ============= ============ =============
<CAPTION>
WEIGHTED WEIGHTED
DEBT SERVICE COVERAGE RATIO AVERAGE AVERAGE WEIGHTED
------------------------------ MORTGAGE REMAINING AVERAGE
RANGE OF CURRENT WEIGHTED INTEREST TERM TO CUT-OFF DATE
LOAN-TO-VALUE RATIOS MINIMUM MAXIMUM AVERAGE RATE MATURITY LTV
- -------------------------- --------- --------- ---------- ------------ ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
20.01% - 30.00% ......... 3.14 5.38 3.98 7.8526% 139.8 24.80%
30.01% - 50.00% ......... 1.41 1.88 1.68 7.2870 152.8 48.09
50.01% - 60.00% ......... 1.00 2.19 1.73 7.2132 182.4 54.80
60.01% - 65.00% ......... 1.20 1.82 1.51 7.2701 115.3 62.93
65.01% - 70.00% ......... 1.06 1.66 1.33 7.4585 121.8 68.07
70.01% - 75.00% ......... 1.09 1.69 1.34 7.3048 118.2 73.25
75.01% - 80.00% ......... 1.17 2.89 1.37 7.2666 119.6 77.77
80.01% - 85.00% ......... 1.00 1.37 1.17 7.1676 109.1 81.55
85.01% - 90.00% ......... 1.60 1.60 1.60 6.8100 117.0 87.62
95.01% - 100.00% ......... 1.03 1.03 1.03 6.8000 238.0 99.61
---- ---- ---- ------ ----- -----
Total*/Avg./Wtd.Avg./
Min./Max. .............. 1.00 5.38 1.49 7.2017% 133.0 70.45%
==== ==== ==== ====== ===== =====
</TABLE>
- -------
* Totals may not equal due to rounding.
A-20
<PAGE>
DISTRIBUTION OF REMAINING TERM TO MATURITY OR ARD
<TABLE>
<CAPTION>
PERCENTAGE OF
AGGREGATE
RANGE OF REMAINING NUMBER OF CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE PRINCIPAL BALANCE
TERM TO MATURITY OR ARD MORTGAGE PRINCIPAL PRINCIPAL -------------------------------------------
(MONTHS) LOANS BALANCE BALANCE MINIMUM MAXIMUM AVERAGE
- ------------------------- ----------- ---------------- --------------- ------------- --------------- -------------
<S> <C> <C> <C> <C> <C> <C>
51 - 70 ............... 1 $ 6,508,605 0.45% $6,508,605 $ 6,508,605 $6,508,605
71 - 90 ............... 7 44,633,538 3.10 637,654 15,873,962 6,376,220
91 - 110 ............... 1 1,677,521 0.12 1,677,521 1,677,521 1,677,521
111 - 130 ............... 117 1,094,245,468 76.09 411,898 225,437,229 9,352,525
131 - 150 ............... 2 6,128,400 0.43 2,392,065 3,736,335 3,064,200
151 - 170 ............... 2 7,065,919 0.49 1,810,552 5,255,368 3,532,960
171 - 190 ............... 15 146,796,443 10.21 988,567 45,000,000 9,786,430
231 - 250 ............... 36 130,944,369 9.11 1,147,450 8,973,776 3,637,344
--- -------------- ------ ---------- ------------ ----------
Total*/Avg./Wtd.Avg./
Min./Max. ............. 181 $1,438,000,264 100.00% $ 411,898 $225,437,229 $7,944,753
=== ============== ====== ========== ============ ==========
<CAPTION>
WEIGHTED WEIGHTED
DEBT SERVICE COVERAGE RATIO AVERAGE AVERAGE WEIGHTED
RANGE OF REMAINING ------------------------------ MORTGAGE REMAINING AVERAGE
TERM TO MATURITY OR ARD WEIGHTED INTEREST TERM TO CUT-OFF DATE
(MONTHS) MINIMUM MAXIMUM AVERAGE RATE MATURITY LTV
- ------------------------- --------- --------- ---------- ------------ ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
51 - 70 ............... 1.31 1.31 1.31 6.9200% 57.0 71.52%
71 - 90 ............... 1.00 1.37 1.22 7.1555 80.6 76.10
91 - 110 ............... 1.06 1.06 1.06 7.2500 106.0 67.10
111 - 130 ............... 1.00 3.14 1.45 7.2149 117.4 73.83
131 - 150 ............... 1.03 1.40 1.17 7.3690 144.0 79.48
151 - 170 ............... 1.17 1.37 1.22 7.5500 151.0 74.40
171 - 190 ............... 1.22 5.38 1.71 7.2702 177.8 56.74
231 - 250 ............... 1.03 2.19 1.75 7.0176 234.3 55.00
---- ---- ---- ------ ----- -----
Total*/Avg./Wtd.Avg./
Min./Max. ............. 1.00 5.38 1.49 7.2017% 133.0 70.45%
==== ==== ==== ====== ===== =====
</TABLE>
- -------
* Totals may not equal due to rounding.
A-21
<PAGE>
DISTRIBUTION OF CUT-OFF DATE PRINCIPAL BALANCES
<TABLE>
<CAPTION>
PERCENTAGE OF
AGGREGATE
NUMBER OF CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE PRINCIPAL BALANCE
RANGE OF CURRENT MORTGAGE PRINCIPAL PRINCIPAL --------------------------------------------
PRINCIPAL BALANCES LOANS BALANCE BALANCE MINIMUM MAXIMUM AVERAGE
- -------------------------- ----------- ----------------- --------------- -------------- --------------- -------------
<S> <C> <C> <C> <C> <C> <C>
$ 400,000 - 499,999 1 $ 411,898 0.03% $ 411,898 $ 411,898 $ 411,898
500,000 - 999,999 6 5,283,241 0.37 637,654 998,840 880,540
1,000,000 - 1,999,999 26 38,101,831 2.65 1,027,554 1,987,393 1,465,455
2,000,000 - 2,999,999 41 101,114,894 7.03 2,018,780 2,995,282 2,466,217
3,000,000 - 3,999,999 20 70,477,572 4.90 3,030,000 3,993,827 3,523,879
4,000,000 - 4,999,999 18 79,813,908 5.55 4,031,360 4,996,037 4,434,106
5,000,000 - 5,999,999 13 72,594,765 5.05 5,195,834 5,785,961 5,584,213
6,000,000 - 6,999,999 10 66,012,980 4.59 6,153,174 6,980,029 6,601,298
7,000,000 - 7,999,999 9 67,053,250 4.66 7,035,098 7,956,477 7,450,361
8,000,000 - 8,999,999 7 61,045,595 4.25 8,368,936 8,973,776 8,720,799
9,000,000 - 9,999,999 5 47,551,686 3.31 9,046,363 9,970,213 9,510,337
10,000,000 - 11,999,999 7 80,217,832 5.58 10,327,999 11,973,636 11,459,690
12,000,000 - 13,999,999 1 13,378,055 0.93 13,378,055 13,378,055 13,378,055
14,000,000 - 16,999,999 6 95,321,602 6.63 15,202,679 16,936,955 15,886,934
17,000,000 - 225,437,299 11 639,621,155 44.48 20,744,298 225,437,229 58,147,378
-- -------------- ------ ------------ ------------ -----------
Total*/Avg./Wtd. Avg./
Min./Max. .............. 181 $1,438,000,264 100.00% $ 411,898 $225,437,229 $ 7,944,753
=== ============== ====== ============ ============ ===========
<CAPTION>
WEIGHTED WEIGHTED
DEBT SERVICE COVERAGE RATIO AVERAGE AVERAGE WEIGHTED
------------------------------ MORTGAGE REMAINING AVERAGE
RANGE OF CURRENT WEIGHTED INTEREST TERM TO CUT-OFF DATE
PRINCIPAL BALANCES MINIMUM MAXIMUM AVERAGE RATE MATURITY LTV
- -------------------------- --------- --------- ---------- ------------ ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
$ 400,000 - 499,999 1.66 1.66 1.66 7.6000% 118.0 68.65%
500,000 - 999,999 1.32 5.38 2.20 7.6687 123.3 63.25
1,000,000 - 1,999,999 1.06 3.14 1.48 7.3975 141.9 65.69
2,000,000 - 2,999,999 1.03 2.11 1.50 7.2484 152.2 65.54
3,000,000 - 3,999,999 1.03 2.89 1.55 7.3021 162.4 67.13
4,000,000 - 4,999,999 1.00 1.86 1.45 7.2942 159.0 66.03
5,000,000 - 5,999,999 1.17 1.78 1.37 7.4450 132.9 71.37
6,000,000 - 6,999,999 1.09 1.96 1.48 7.3424 133.7 65.89
7,000,000 - 7,999,999 1.25 1.93 1.61 7.3438 162.8 64.91
8,000,000 - 8,999,999 1.24 1.76 1.39 7.3169 142.7 71.14
9,000,000 - 9,999,999 1.28 1.54 1.37 7.2443 108.3 75.64
10,000,000 - 11,999,999 1.24 1.60 1.39 7.4676 134.0 66.85
12,000,000 - 13,999,999 1.34 1.34 1.34 7.0200 82.0 76.01
14,000,000 - 16,999,999 1.00 1.34 1.24 7.2477 111.6 79.12
17,000,000 - 225,437,299 1.27 1.92 1.57 7.0483 124.9 72.03
---- ---- ---- ------ ----- -----
Total*/Avg./Wtd. Avg./
Min./Max. .............. 1.00 5.38 1.49 7.2017% 133.0 70.45%
==== ==== ==== ====== ===== =====
</TABLE>
- -------
* Totals may not equal due to rounding.
A-22
<PAGE>
DISTRIBUTION OF MORTGAGE INTEREST RATES
<TABLE>
<CAPTION>
PERCENTAGE OF
AGGREGATE
NUMBER OF CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE PRINCIPAL BALANCE
RANGE OF MORTGAGE PRINCIPAL PRINCIPAL -------------------------------------------
MORTGAGE RATES LOANS BALANCE BALANCE MINIMUM MAXIMUM AVERAGE
- ------------------------- ----------- ----------------- --------------- ------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
6.5001%-6.7500% ......... 2 $ 43,558,638 3.03% $9,172,371 $ 34,386,268 $21,779,319
6.7501%-7.0000% ......... 16 387,990,079 26.98 2,344,187 225,437,229 24,249,380
7.0001%-7.2500% ......... 68 392,472,876 27.29 1,147,450 61,800,612 5,771,660
7.2501%-7.5000% ......... 51 410,834,586 28.57 758,662 61,924,861 8,055,580
7.5001%-7.7500% ......... 28 131,221,075 9.13 411,898 15,330,575 4,686,467
7.7501%-8.0000% ......... 9 42,578,781 2.96 1,413,845 10,327,999 4,730,976
8.0001%-8.2500% ......... 3 10,573,647 0.74 988,567 6,199,156 3,524,549
8.2501%-8.5000% ......... 3 14,597,956 1.02 1,649,298 7,171,565 4,865,985
8.7501%-9.0000% ......... 1 4,172,624 0.29 4,172,624 4,172,624 4,172,624
-- -------------- ------ ---------- ------------ -----------
Total*/Avg./Wtd.Avg./
Min./Max. ............. 181 $1,438,000,264 100.00% $ 411,898 $225,437,229 $ 7,944,753
=== ============== ====== ========== ============ ===========
<CAPTION>
WEIGHTED WEIGHTED
DEBT SERVICE COVERAGE RATIO AVERAGE AVERAGE WEIGHTED
------------------------------ MORTGAGE REMAINING AVERAGE
RANGE OF WEIGHTED INTEREST TERM TO CUT-OFF DATE
MORTGAGE RATES MINIMUM MAXIMUM AVERAGE RATE MATURITY LTV
- ------------------------- --------- --------- ---------- ------------ ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
6.5001%-6.7500% ......... 1.50 1.54 1.51 6.7395% 117.0 78.47%
6.7501%-7.0000% ......... 1.00 1.88 1.55 6.8473 124.1 78.31
7.0001%-7.2500% ......... 1.03 2.19 1.49 7.0947 154.9 67.33
7.2501%-7.5000% ......... 1.09 1.96 1.45 7.3976 124.2 66.59
7.5001%-7.7500% ......... 1.17 3.14 1.40 7.6410 126.0 68.11
7.7501%-8.0000% ......... 1.28 2.89 1.62 7.8254 145.5 64.65
8.0001%-8.2500% ......... 1.32 5.38 1.83 8.1470 122.8 65.20
8.2501%-8.5000% ......... 1.20 1.93 1.68 8.4331 116.0 74.41
8.7501%-9.0000% ......... 1.57 1.57 1.57 8.8750 113.0 63.22
---- ---- ---- ------ ----- ------
Total*/Avg./Wtd.Avg./
Min./Max. ............. 1.00 5.38 1.49 7.2017% 133.0 70.45 %
==== ==== ==== ====== ===== =======
</TABLE>
- -------
* Totals may not equal due to rounding.
A-23
<PAGE>
DISTRIBUTION OF DEBT SERVICE COVERAGE RATIOS
<TABLE>
<CAPTION>
PERCENTAGE OF
AGGREGATE
NUMBER OF CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE PRINCIPAL BALANCE
RANGE OF DEBT SERVICE MORTGAGE PRINCIPAL PRINCIPAL -------------------------------------------
COVERAGE RATIOS LOANS BALANCE BALANCE MINIMUM MAXIMUM AVERAGE
- ----------------------- ----------- ----------------- --------------- ------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
0.91 - 1.00 ........... 2 $ 20,447,034 1.42% $4,573,072 $ 15,873,962 $10,223,517
1.01 - 1.10 ........... 5 18,413,406 1.28 1,677,521 6,809,066 3,682,681
1.11 - 1.20 ........... 3 12,482,558 0.87 1,649,298 5,577,892 4,160,853
1.21 - 1.30 ........... 35 227,790,328 15.84 1,460,287 20,744,298 6,508,295
1.31 - 1.40 ........... 63 362,948,923 25.24 637,654 61,800,612 5,761,094
1.41 - 1.50 ........... 14 160,551,148 11.16 758,662 44,852,613 11,467,939
1.51 - 1,60 ........... 10 337,452,383 23.47 2,583,724 225,437,229 33,745,238
1.61 - 1.70 ........... 5 65,514,255 4.56 411,898 48,942,695 13,102,851
1.71 - 1.80 ........... 23 83,884,482 5.83 1,147,450 8,973,776 3,647,151
1.81 - 1.90 ........... 12 85,539,907 5.95 998,840 45,000,000 7,128,326
1.91 - 2.00 ........... 3 48,312,170 3.36 6,221,234 34,919,372 16,104,057
2.01 - 2.10 ........... 1 2,681,087 0.19 2,681,087 2,681,087 2,681,087
2.11 - 2.20 ........... 2 5,854,971 0.41 2,729,348 3,125,623 2,927,486
2.51 - 5.38 ........... 3 6,127,612 0.43 988,567 3,492,543 2,042,537
-- -------------- ------ ---------- ------------ -----------
Total*/Avg./Wtd.Avg./
Min./Max. ........... 181 $1,438,000,264 100.00% $ 411,898 $225,437,229 $ 7,944,753
=== ============== ====== ========== ============ ===========
<CAPTION>
WEIGHTED WEIGHTED
DEBT SERVICE COVERAGE RATIO AVERAGE AVERAGE WEIGHTED
------------------------------ MORTGAGE REMAINING AVERAGE
RANGE OF DEBT SERVICE WEIGHTED INTEREST TERM TO CUT-OFF DATE
COVERAGE RATIOS MINIMUM MAXIMUM AVERAGE RATE MATURITY LTV
- ----------------------- --------- --------- ---------- ------------ ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
0.91 - 1.00 ........... 1.00 1.00 1.00 6.9100% 88.5 75.82%
1.01 - 1.10 ........... 1.03 1.09 1.05 7.0844 161.8 84.16
1.11 - 1.20 ........... 1.17 1.20 1.19 7.5150 130.3 75.73
1.21 - 1.30 ........... 1.22 1.30 1.27 7.3711 123.4 75.36
1.31 - 1.40 ........... 1.31 1.40 1.34 7.2787 116.8 74.34
1.41 - 1.50 ........... 1.41 1.50 1.47 7.1218 127.4 67.41
1.51 - 1,60 ........... 1.51 1.60 1.59 7.0633 117.6 77.07
1.61 - 1.70 ........... 1.66 1.70 1.67 7.3671 120.9 59.87
1.71 - 1.80 ........... 1.73 1.79 1.76 7.0538 224.5 53.71
1.81 - 1.90 ........... 1.81 1.88 1.86 6.9344 202.1 49.92
1.91 - 2.00 ........... 1.92 1.96 1.93 7.5398 160.1 57.69
2.01 - 2.10 ........... 2.07 2.07 2.07 7.9800 118.0 58.28
2.11 - 2.20 ........... 2.11 2.19 2.15 7.0190 234.0 52.77
2.51 - 5.38 ........... 2.89 5.38 3.36 7.9024 127.4 54.90
---- ---- ---- ------ ----- -----
Total*/Avg./Wtd.Avg./
Min./Max. ........... 1.00 5.38 1.49 7.2017% 133.0 70.45%
==== ==== ==== ====== ===== =====
</TABLE>
- -------
* Totals may not equal due to rounding.
A-24
<PAGE>
PREPAYMENT LOCK-OUT/PREPAYMENT PREMIUM ANALYSIS
PERCENTAGE OF MORTGAGE LOANS BY OUTSTANDING PRINCIPAL BALANCE**
<TABLE>
<CAPTION>
JUNE 1998 JUNE 1999 JUNE 2000 JUNE 2001 JUNE 2002 JUNE 2003
--------------- --------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Locked out ............... 51.72% 50.87% 47.77% 17.98% 11.24% 0.37%
Defeasance ............... 0.00 0.00 2.51 32.07 38.63 46.63
Greater of 1% or Yield
Maintenance ............. 48.28 49.13 49.24 49.01 49.20 52.03
---------- ---------- ---------- ---------- ---------- ----------
Sub-Total* ............... 100.00% 100.00% 99.52% 99.06% 99.06% 99.03%
FIXED PERCENTAGE
- ---------------------------
5% or Greater ............ 0.00% 0.00% 0.48% 0.48% 0.00% 0.00%
4% - 4.99% ............... 0.00 0.00 0.00 0.00 0.47 0.00
3% - 3.99% ............... 0.00 0.00 0.00 0.00 0.00 0.97
2% - 2.99% ............... 0.00 0.00 0.00 0.00 0.00 0.00
1% - 1.99% ............... 0.00 0.00 0.00 0.00 0.00 0.00
Less than 1% ............. 0.00 0.00 0.00 0.00 0.00 0.00
No Prepayment Protection 0.00 0.00 0.00 0.46 0.46 0.00
---------- ---------- ---------- ---------- ---------- ----------
Total* ................... 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
Balance of Mortgage
Loans ($mm) ............. $ 1,438.00 $ 1,415.59 $ 1,391.56 $ 1,365.43 $ 1,337.00 $ 1,300.33
% of Cut-off Date Balance
Outstanding ............. 100.00% 98.44% 96.77% 94.95% 92.98% 90.43%
<CAPTION>
JUNE 2004 JUNE 2005 JUNE 2006 JUNE 2007 JUNE 2008 JUNE 2009
--------------- --------------- --------------- --------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Locked out ............... 0.09% 0.00% 0.00% 0.00% 0.00% 0.00%
Defeasance ............... 46.46 47.40 47.32 47.24 17.45 21.92
Greater of 1% or Yield
Maintenance ............. 52.49 51.62 51.70 47.23 69.71 75.08
---------- ---------- ---------- ---------- -------- --------
Sub-Total* ............... 99.03% 99.02% 99.02% 94.47% 87.16% 97.00%
FIXED PERCENTAGE
- ---------------------------
5% or Greater ............ 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
4% - 4.99% ............... 0.00 0.00 0.00 0.00 0.00 0.00
3% - 3.99% ............... 0.50 0.52 0.00 0.00 0.00 0.00
2% - 2.99% ............... 0.46 0.00 0.52 0.00 0.00 0.00
1% - 1.99% ............... 0.00 0.46 0.45 0.97 1.75 2.11
Less than 1% ............. 0.00 0.00 0.00 0.00 0.00 0.00
No Prepayment Protection 0.00 0.00 0.00 4.56 11.09 0.89
---------- ---------- ---------- ---------- -------- --------
Total* ................... 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
Balance of Mortgage
Loans ($mm) ............. $ 1,267.60 $ 1,207.09 $ 1,172.86 $ 1,136.12 $ 269.12 $ 206.69
% of Cut-off Date Balance
Outstanding ............. 88.15% 83.94% 81.56% 79.01% 18.71% 14.37%
<CAPTION>
JUNE 2010
------------
<S> <C>
Locked out ............... 0.00%
Defeasance ............... 20.73
Greater of 1% or Yield
Maintenance ............. 75.38
--------
Sub-Total* ............... 96.12%
FIXED PERCENTAGE
- ---------------------------
5% or Greater ............ 0.00%
4% - 4.99% ............... 0.00
3% - 3.99% ............... 0.00
2% - 2.99% ............... 0.00
1% - 1.99% ............... 2.06
Less than 1% ............. 0.00
No Prepayment Protection 1.82
--------
Total* ................... 100.00%
Balance of Mortgage
Loans ($mm) ............. $ 193.30
% of Cut-off Date Balance
Outstanding ............. 13.44%
</TABLE>
- -------
* Totals may not equal due to rounding.
** Table calculated using Maturity Assumtpions and assuming no prepayments
of principal.
A-25
<PAGE>
ANNEX B
<TABLE>
<CAPTION>
<S> <C> <C>
ABN AMRO GMAC Commercial Mortgage Securities, Inc. Statement Date:
LaSalle National Bank GMAC Commercial Mortgage Corporation as Master Servicer Payment Date:
GMAC Commercial Mortgage Corporation as Special Servicer Prior Payment:
Administrator: Mortgage Pass-Through Certificates Record Date:
Ann Geraghty (800) 246-5761 Series 1998-C1
135 S. LaSalle Street Suite 1625 ABN AMRO Acct: WAC:
Chicago, IL 60674-4107 WAMM:
==================================================================================================================================
Number Of Pages
---------------
Table Of Contents
REMIC Certificate Report
Other Related Information
Mortgage Loan Characteristics
Loan Level Detail
Delinquent Loan Status Report
Historical Loan Modification Report
Historical Loss Estimate Report
REO Status Report
Total Pages Included In This Package
- ----------------------------------------------------------------------------------------------------------------------------------
Information is available for this issue from the following sources
- ----------------------------------------------------------------------------------------------------------------------------------
LaSalle Web Site www.lnbabs.com
LaSalle Bulletin Board (714) 282-3990
LaSalle ASAP Fax System (312) 904-2200
ASAP #: 287
Monthly Data File Name: 0287MMYY.EXE
</TABLE>
B-1
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
ABN AMRO GMAC Commercial Mortgage Securities, Inc. Statement Date:
LaSalle National Bank GMAC Commercial Mortgage Corporation as Master Servicer Payment Date:
GMAC Commercial Mortgage Corporation as Special Servicer Prior Payment:
Administrator: Mortgage Pass-Through Certificates Record Date:
Ann Geraghty (800) 246-5761 Series 1998-C1
135 S. LaSalle Street Suite 1625 ABN AMRO Acct: WAC:
Chicago, IL 60674-4107 WAMM:
</TABLE>
<TABLE>
<CAPTION>
===================================================================================================================================
Original Opening Principal Principal Negative Closing Interest Interest Pass-Through
Class Face Value (1) Balance Payment Adj. or Loss Amortization Balance Payment Adjustment Rate (2)
CUSIP Per $1,000 Per $1,000 Per $1,000 Per $1,000 Per $1,000 Per $1,000 Per $1,000 Per $1,000 Next Rate (3)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
===================================================================================================================================
Total P&I Payment
</TABLE>
Notes: (1) N denotes notional balance not included in total (2) Interest Paid
minus Interest Adjustment minus Deferred Interest equals Accrual (3) Estimated
B-2
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
ABN AMRO GMAC Commercial Mortgage Securities, Inc. Statement Date:
LaSalle National Bank GMAC Commercial Mortgage Corporation as Master Servicer Payment Date:
GMAC Commercial Mortgage Corporation as Special Servicer Prior Payment:
Administrator: Mortgage Pass-Through Certificates Record Date:
Ann Geraghty (800) 246-5761 Series 1998-C1
135 S. LaSalle Street Suite 1625 ABN AMRO Acct:
Chicago, IL 60674-4107 Other Related Information
</TABLE>
<TABLE>
<CAPTION>
========================================================================================================================
Accrued Excess Beginning Payment of Ending Yield
Certificate Prepay Interest Unpaid Prior Unpaid Unpaid Maintenance Prepayment
Class Interest Shortfall Interest Interest Interest Premium Premiums
========================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C>
X
A-1
A-2
A-3
B
C
D
E
F
G
H
J
K
========================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
Advances
Prior Outstanding Current Period Recovered Outstanding
Principal Interest Principal Interest Principal Interest Principal Interest
=================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C>
Servicer
Trustee:
Fiscal Agent:
=================================================================================================================================
=================================================================================================================================
</TABLE>
B-3
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
ABN AMRO GMAC Commercial Mortgage Securities, Inc. Statement Date:
LaSalle National Bank GMAC Commercial Mortgage Corporation as Master Servicer Payment Date:
GMAC Commercial Mortgage Corporation as Special Servicer Prior Payment:
Administrator: Mortgage Pass-Through Certificates Record Date:
Ann Geraghty (800) 246-5761 Series 1998-C1
135 S. LaSalle Street Suite 1625 ABN AMRO Acct:
Chicago, IL 60674-4107 Other Related Information
</TABLE>
=============================================================================
Servicing Compensation
=============================================================================
Current Period Master Servicing Fees Paid:
Current Period Surveillance Fees Paid:
Current Period Primary Fees Paid:
Current Period Sub Servicer Fees Paid:
Additional Master Servicing Compensation:
Current Period Special Servicing Fees Paid:
Current Period Workout Fees Paid:
Current Period Liquidation Fees Paid:
----------
==========
=============================================================================
Outstanding Mortgage Loans in Pool
=============================================================================
Number of Outstanding Mortgage Loans in Pool:
Aggregate Stated Principal Balance before Distribution Date:
Aggregate Stated Principal Balance after Distribution Date:
Percentage of Remaining Cut-off Date Principal Balance:
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
Summary of REO Properties
Principal Date of Final Amount Aggregate Other
# Property Name Date of REO Balance Book Value Recovery of Proceeds Revenue Collected
==================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C>
1.
2.
3.
4.
5.
==================================================================================================================================
</TABLE>
B-4
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
ABN AMRO GMAC Commercial Mortgage Securities, Inc. Statement Date:
LaSalle National Bank GMAC Commercial Mortgage Corporation as Master Servicer Payment Date:
GMAC Commercial Mortgage Corporation as Special Servicer Prior Payment:
Administrator: Mortgage Pass-Through Certificates Record Date:
Ann Geraghty (800) 246-5761 Series 1998-C1
135 S. LaSalle Street Suite 1625 ABN AMRO Acct:
Chicago, IL 60674-4107 Other Related Information
</TABLE>
<TABLE>
<CAPTION>
===========================================================================================================
Summary of Appraisal Reductions
Principal Appraisal Appraisal Date of
# Property Name Loan Number Balance Reduction Amt. Date Reduction
==========================================================================================================
<S> <C> <C> <C> <C> <C> <C>
1.
2.
3.
4.
5.
</TABLE>
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------
Summary of Repurchased, Liquidated or Disposed Loans
Principal Date of Final Amount Aggregate Other
# Property Name Loan Number Balance Book Value Liquidation of Proceeds Rev. Collected
==========================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C>
1.
2.
3.
4.
5.
===========================================================================================================
</TABLE>
B-5
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
ABN AMRO GMAC Commercial Mortgage Securities, Inc. Statement Date:
LaSalle National Bank GMAC Commercial Mortgage Corporation as Master Servicer Payment Date:
GMAC Commercial Mortgage Corporation as Special Servicer Prior Payment:
Administrator: Mortgage Pass-Through Certificates Record Date:
Ann Geraghty (800) 246-5761 Series 1998-C1
135 S. LaSalle Street Suite 1625 ABN AMRO Acct:
Chicago, IL 60674-4107 Other Related Information
</TABLE>
Number of loans which have had their maturity dates extended: 0
Stated principal balance outstanding of loans which have had their maturity
dates extended: 0.00
Weighted average extension period (in months) of loans which have had their
maturity dates extended: 0
Number of loans in the process of having their maturity dates extended: 0
Stated principal balance of loans in the process of having their maturity
dates extended: 0.00
Weighted average anticipated extension period of loans in the process of being
extended: 0
Cut-off principal balance of paid off loans that never experienced maturity
date extensions: 0.00
Cut-off principal balance of paid off loans that experienced maturity date
extensions: 0.00
Weighted average extension period of paid off loans that experienced maturity
date extensions: 0
Number of loans in the process of having their maturity dates further
extended: 0
Cut-off principal balance of loans in the process of having their maturity
dates further extended: 0.00
Weighted average extension period of loans in the process of having their
maturity date further extended: 0
B-6
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
ABN AMRO GMAC Commercial Mortgage Securities, Inc. Statement Date:
LaSalle National Bank GMAC Commercial Mortgage Corporation as Master Servicer Payment Date:
GMAC Commercial Mortgage Corporation as Special Servicer Prior Payment:
Administrator: Mortgage Pass-Through Certificates Record Date:
Ann Geraghty (800) 246-5761 Series 1998-C1
135 S. LaSalle Street Suite 1625 ABN AMRO Acct:
Chicago, IL 60674-4107 Pool Total
</TABLE>
<TABLE>
<CAPTION>
Distribution of Principal Balances
- ---------------------------------------------------------------------------------------------------------
Current Scheduled Number Scheduled Based on
Balances of Loans Balance Balance
=========================================================================================================
<S> <C> <C> <C>
$0 to $100,000
$100,000 to $250,000
$250,000 to $500,000
$500,000 to $750,000
$750,000 to $1,000,000
$1,000,000 to $2,000,000
$2,000,000 to $3,000,000
$3,000,000 to $4,000,000
$4,000,000 to $5,000,000
$5,000,000 to $6,000,000
$6,000,000 to $7,000,000
$7,000,000 to $8,000,000
$8,000,000 to $9,000,000
$9,000,000 to $10,000,000
$10,000,000 to $11,000,000
$11,000,000 to $12,000,000
$12,000,000 to $13,000,000
$13,000,000 to $14,000,000
$14,000,000 to $15,000,000
$15,000,000 & Above
- ---------------------------------------------------------------------------------------------------------
Total
- ---------------------------------------------------------------------------------------------------------
Average Scheduled Balance is
Maximum Scheduled Balance is
Minimum Scheduled Balance is
</TABLE>
<TABLE>
<CAPTION>
Distribution of Property Types
--------------------------------------------------------------------------------------------------------
Number Scheduled Based on
Property Types of Loans Balance Balance
========================================================================================================
<S> <C> <C> <C> <C>
Retail
Multifamily
Office
Industrial
Lodging
Health Care
Mixed Use
Self Storage
Mobile Home
Other
--------------------------------------------------------------------------------------------------------
Total
--------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Distribution of Mortgage Interest Rates
--------------------------------------------------------------------------------------------------------
Current Mortgage Number Scheduled Based on
Interest Rate of Loans Balance Balance
========================================================================================================
<S> <C> <C> <C>
7.500% or less
7.500% to 7.750%
7.750% to 8.000%
8.000% to 8.250%
8.250% to 8.500%
8.500% to 8.750%
8.750% to 9.000%
9.000% to 9.250%
9.250% to 9.500%
9.500% to 9.750%
9.750% to 10.000%
10.000% to 10.250%
10.250% to 10.500%
10.500% to 10.750%
10.750% & Above
--------------------------------------------------------------------------------------------------------
Total
--------------------------------------------------------------------------------------------------------
W/Avg Mortgage Interest Rate is
Minimum Mortgage Interest Rate is
Maximum Mortgage Interest Rate is
</TABLE>
<TABLE>
<CAPTION>
Geographic Distribution
-------------------------------------------------------------------------------------------------------
Number Scheduled Based on
Geographic Location of Loans Balance Balance
=======================================================================================================
<S> <C> <C> <C>
-------------------------------------------------------------------------------------------------------
Total
-------------------------------------------------------------------------------------------------------
</TABLE>
B-7
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
ABN AMRO GMAC Commercial Mortgage Securities, Inc. Statement Date:
LaSalle National Bank GMAC Commercial Mortgage Corporation as Master Servicer Payment Date:
GMAC Commercial Mortgage Corporation as Special Servicer Prior Payment:
Administrator: Mortgage Pass-Through Certificates Record Date:
Ann Geraghty (800) 246-5761 Series 1998-C1
135 S. LaSalle Street Suite 1625 ABN AMRO Acct:
Chicago, IL 60674-4107 Pool Total
</TABLE>
<TABLE>
<CAPTION>
Loan Seasoning
- ---------------------------------------------------------------------------------------------------------------------
Number Scheduled Based on
Number of Years of Loans Balance Balance
=====================================================================================================================
<S> <C> <C> <C>
1 year or less
1+ to 2 years
2+ to 3 years
3+ to 4 years
4+ to 5 years
5+ to 6 years
6+ to 7 years
7+ to 8 years
8+ to 9 years
9+ to 10 years
10 years or more
- ---------------------------------------------------------------------------------------------------------------------
Total
- ---------------------------------------------------------------------------------------------------------------------
Weighted Average Seasoning is
</TABLE>
<TABLE>
<CAPTION>
Distribution of Amortization Type
- ---------------------------------------------------------------------------------------------------------------------
Number Scheduled Based on
Amortization Type of Loans Balance Balance
=====================================================================================================================
<S> <C> <C> <C>
Fully Amortizing
Amortizing Balloon
Interest Only / Balloon
- ---------------------------------------------------------------------------------------------------------------------
Total
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Distribution of Remaining Term
Fully Amortizing
--------------------------------------------------------------------------------------------------------
Fully Amortizing Number Scheduled Based on
Mortgage Loans of Loans Balance Balance
========================================================================================================
<S> <C> <C> <C>
60 months or less
61 to 120 months
121 to 180 months
181 to 240 months
241 to 360 months
--------------------------------------------------------------------------------------------------------
Total
--------------------------------------------------------------------------------------------------------
Weighted Average Months to Maturity is
</TABLE>
<TABLE>
<CAPTION>
Distribution of Remaining Term
Balloon Loans
--------------------------------------------------------------------------------------------------------
Balloon Number Scheduled Based on
Mortgage Loans of Loans Balance Balance
========================================================================================================
<S> <C> <C> <C>
12 months or less
13 to 24 months
25 to 36 months
37 to 48 months
49 to 60 months
61 to 120 months
121 to 180 months
181 to 240 months
--------------------------------------------------------------------------------------------------------
Total
--------------------------------------------------------------------------------------------------------
Weighted Average Months to Maturity is
</TABLE>
<TABLE>
<CAPTION>
Distribution of DSCR
---------------------------------------------------------------------------------------------------------------------
Debt Service Number Scheduled Based on
Coverage Ratio (1) of Loans Balance Balance
=====================================================================================================================
<S> <C> <C> <C>
0.500 or less
0.500 to 0.625
0.625 to 0.750
0.750 to 0.875
0.875 to 1.000
1.000 to 1.125
1.125 to 1.250
1.875 to 2.000
1.250 to 1.375
1.375 to 1.500
1.500 to 1.625
1.625 to 1.750
1.750 to 1.875
2.000 to 2.125
2.125 & above
Unknown
---------------------------------------------------------------------------------------------------------------------
Total
---------------------------------------------------------------------------------------------------------------------
Weighted Average Debt Service Coverage Ratio is
</TABLE>
<TABLE>
<CAPTION>
NOI Aging
---------------------------------------------------------------------------------------------------------------------
Number Scheduled Based on
NOI Date of Loans Balance Balance
=====================================================================================================================
<S> <C> <C> <C>
1 year or less
1 to 2 years
2 Years or More
Unknown
---------------------------------------------------------------------------------------------------------------------
Total
---------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Debt Service Coverage Ratios are calculated as described in the
prospectus, values are updated periodically as new NOI figures became
available from borrowers on an asset level.
Neither the Trustee, Servicer, Special Servicer or Underwriter makes any
representation as to the accuracy of the data provided by the borrower
for this calculation.
B-8
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
ABN AMRO GMAC Commercial Mortgage Securities, Inc. Statement Date:
LaSalle National Bank GMAC Commercial Mortgage Corporation as Master Servicer Payment Date:
GMAC Commercial Mortgage Corporation as Special Servicer Prior Payment:
Administrator: Mortgage Pass-Through Certificates Record Date:
Ann Geraghty (800) 246-5761 Series 1998-C1
135 S. LaSalle Street Suite 1625 ABN AMRO Acct:
Chicago, IL 60674-4107 Pool Total
</TABLE>
<TABLE>
<CAPTION>
Distribution of Maximum Rates
- ---------------------------------------------------------------------------------------------------------------------
Number Scheduled Based on
Maximum Rates of Loans Balance Balance
=====================================================================================================================
<S> <C> <C> <C>
No Maximum
0.0 to 6.50%
6.5 to 7.00%
7.0 to 7.50%
7.5 to 8.00%
8.0 to 8.50%
8.5 to 9.00%
9.0 to 9.50%
9.5 to 10.00%
10.0 to 10.50%
10.5 to 11.00%
11.0 to 11.50%
11.5 to 12.00%
12.01 & above
Fixed Rate Mortgage
- ---------------------------------------------------------------------------------------------------------------------
Total
- ---------------------------------------------------------------------------------------------------------------------
Weighted Average for Mtge with a Maximum Rate is
</TABLE>
<TABLE>
<CAPTION>
Distribution of Payment Adjustment
- ---------------------------------------------------------------------------------------------------------------------
Payment Adjustment Number Scheduled Based on
Frequency Loans Balance Balance
=====================================================================================================================
<S> <C> <C> <C>
Three Month
Six Month
Fixed Rate Mortgage
- ---------------------------------------------------------------------------------------------------------------------
Total
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Distribution of Indices of Mortgage Loans
--------------------------------------------------------------------------------------------------------
Number Scheduled Based on
Indices of Loans Balance Balance
========================================================================================================
<S> <C> <C>
3 Month LIBOR
6 Month LIBOR
Fixed Rate Mortgage
--------------------------------------------------------------------------------------------------------
Total
--------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Distribution of Mortgage Loan Margins
--------------------------------------------------------------------------------------------------------
Number Scheduled Based on
Mortgage Loan Margins Loans Balance Balance
========================================================================================================
<S> <C> <C> <C>
No Margin
0.010% to 2.500%
2.510% to 2.625%
2.635% to 2.750%
2.760% to 2.875%
2.885% to 3.000%
3.010% to 3.125%
3.135% to 3.250%
3.260% to 3.375%
3.385% to 99.000%
Fixed Rate Mortgage
--------------------------------------------------------------------------------------------------------
Total
--------------------------------------------------------------------------------------------------------
Weighted Average for Mtge with a Margin is
</TABLE>
<TABLE>
<CAPTION>
Distribution of Minimum Rates
-----------------------------------------------------------------------------------------------------------------------
Number Scheduled Based on
Minimum Rates (1) of Loans Balance Balance
=======================================================================================================================
<S> <C> <C> <C>
No Minimum
0.010% to 2.000%
2.010% to 2.125%
2.135% to 2.250%
2.260% to 2.375%
2.385% to 2.500%
2.510% to 2.625%
2.635% to 2.750%
2.760% to 2.875%
2.885% to 3.000%
3.010% to 3.125%
3.135% to 3.250%
3.260% to 3.375%
3.385% & Above
Fixed Rate Mortgage
-----------------------------------------------------------------------------------------------------------------------
Total
-----------------------------------------------------------------------------------------------------------------------
Weighted Average for Mtge with a Minimum Rate is
</TABLE>
<TABLE>
<CAPTION>
Distribution of Interest Adjustment
-----------------------------------------------------------------------------------------------------------------------
Interest Adjustment Number Scheduled Based on
Frequency Loans Balance Balance
-----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Three Month
Six Month
Fixed Rate Mortgage
-----------------------------------------------------------------------------------------------------------------------
Total
-----------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) For adjustable mortgage loans where a minimum rate does not exist the
gross margin was used.
B-9
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
ABN AMRO GMAC Commercial Mortgage Securities, Inc. Statement Date: 01/15/98
LaSalle National Bank GMAC Commercial Mortgage Corporation as Master Servicer Payment Date: 01/15/98
GMAC Commercial Mortgage Corporation as Special Servicer Prior Payment: 12/15/97
Administrator: Mortgage Pass-Through Certificates Record Date: 12/31/97
Ann Geraghty (800) 246-5761 Series 1998-C1
135 S. LaSalle Street Suite 1625 ABN AMRO Acct:
Chicago, IL 60674-4107
Loan Level Detail
</TABLE>
<TABLE>
<CAPTION>
===================================================================================================================================
Property Operating Ending Loan
Disclosure Type Maturity Statement Principal Note Scheduled Prepayment Status
Control # Group Code Date DSCR Date State Balance Rate P&I Prepayment Date Code (1)
===================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
===================================================================================================================================
</TABLE>
* NOI and DSCR, if available and reportable under the terms of the trust
agreement, are based on information obtained from the related borrower,
and no other party to the agreement shall be held liable for the accuracy
or methodology used to determine such figures.
- -------------------------------------------------------------------------------
(1) Legend: A. P&I Adv - in Grace Period
B. P&I Adv - greater than one month delinq
1. P&I Adv - delinquent 1 month
2. P&I Adv - delinquent 2 months
3. P&I Adv - delinquent 3+ months
4. Mat. Balloon/Assumed P&I
5. Prepaid in Full
6. Specially Serviced
7. Foreclosure
8. Bankruptcy
9. REO
10. DPO
11. Modification
B-10
<PAGE>
GMAC Commercial Mortgage Securities, Inc.
Series 1998-C1
DELINQUENT LOAN STATUS REPORT
as of
<TABLE>
<CAPTION>
Prospectus ID Short Name (When Appropriate) Property Type City State Sq Ft or Units
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
90 + DAYS DELINQUENT
60 DAYS DELINQUENT
30 DAYS DELINQUENT
Current & at Special Servicer
</TABLE>
[Table Restubbed from above]
<TABLE>
<CAPTION>
Paid Thru Date Scheduled Loan Balance Total P&I Advances To Date Total Expenses To Date
<S> <C> <C> <C> <C>
90 + DAYS DELINQUENT
60 DAYS DELINQUENT
30 DAYS DELINQUENT
Current & at Special Servicer
</TABLE>
[Table Restubbed from above]
<TABLE>
<CAPTION>
Other Advances
(Taxes & Escrow) Total Exposure Current Monthly P&I Current Interest Rate
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
90 + DAYS DELINQUENT
60 DAYS DELINQUENT
30 DAYS DELINQUENT
Current & at Special Servicer
</TABLE>
[Table Restubbed from above]
<TABLE>
<CAPTION>
Maturity Date LTM NOI Date LTM NOI LTM DSCR ***Cap Rate Assigned
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
90 + DAYS DELINQUENT
60 DAYS DELINQUENT
30 DAYS DELINQUENT
Current & at Special Servicer
</TABLE>
[Table Restubbed from above]
<TABLE>
<CAPTION>
Value using NOI & Cap Rate Valuation Date Appraisal BPO or Internal Value**
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
90 + DAYS DELINQUENT
60 DAYS DELINQUENT
30 DAYS DELINQUENT
Current & at Special Servicer
</TABLE>
[Table Restubbed from above]
<TABLE>
<CAPTION>
Loss using 90% Appr. or BPO(1) Estimated Recovery % Total Appraisal Reduction Realized
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
90 + DAYS DELINQUENT
60 DAYS DELINQUENT
30 DAYS DELINQUENT
Current & at Special Servicer
</TABLE>
[Table Restubbed from above]
<TABLE>
<CAPTION>
Transfer Date Resolution Date FCL Stat Date Expected PCL Sale Date Workout Strategy Comments
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
90 + DAYS DELINQUENT
60 DAYS DELINQUENT
30 DAYS DELINQUENT
Current & at Special Servicer
</TABLE>
FCL - Foreclosure
LTM - Latest 12 Months either Last Annual or Trailing 12 months
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
* Workout Strategy should match the CSSA Loan file using abreviated words in
place of a code number such as (FCL - In Foreclosure, MOD - Modification,
DPO - Discount Payoff, NS - Note Sale, BK - Bankrupcy, PP - Payment Plan,
TBD - To Be Determined etc...) It is possible to combine the status codes
if the loan is going in more than one direction. (i.e. FCL/Mod, BK/Mod,
BK/FCL/DPO)
** App - Appraisal, BPO - Broker opinion, Int. - Internal Value
*** How to determine the cap rate is agreed upon by Underwriter and servicers
- to be provided by a third party.
B-11
<PAGE>
GMAC Commercial Mortgage Securities, Inc.
Series 1998-C1
HISTORICAL LOAN MODIFICATION REPORT
as of
<TABLE>
<CAPTION>
Balance
When Balance at the
Mod/ Sent to Effective Date # Miles
Prospectus Extension Effect Special of Old for Rate New Old New
ID City State Flag Date Servicer Rehabilitation Rate Change Rate P&I P&I
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
THIS REPORT IS HISTORICAL
Information is as of modification. Each line it should not change in the future. Only new modifications should be added.
Total For All Loans:
Total For Loans in Current Month:
# of Loans $ Balance
Modifications:
Maturity Date Extentions:
Total:
</TABLE>
[Table Restubbed from above]
<TABLE>
<CAPTION>
(2) Est.
Future
Total # Interest
Mths (1) Loan to
for Realized Trust $
Prospectus Old New Change Loan to (Rate
ID Maturity Maturity of Mod Trust $ Reduction) COMMENT
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
THIS REPORT IS HISTORICAL
Information is as of modification. Each line it should not change in the future. Only new modifications should be added.
Total For All Loans:
Total For Loans in Current Month:
# of Loans $ Balance
Modifications:
Maturity Date Extentions:
Total:
</TABLE>
* The information in these columns is from a particular poin in time and
should not change on this report once assigned.
(1) Actual principal loss taken by bonds.
(2) Expected future loss due to a rate reduction. This is just an estimate
at the time of modification.
B-12
<PAGE>
GMAC Commercial Mortgage Securities, Inc.
Series 1998-C1
HISTORICAL LOSS ESTIMATE REPORT (REO-SOLD OR DISCOUNTED PAYOFF)
as of
<TABLE>
<CAPTION>
LATEST
APPRAISAL
SHORT NAME % OR EFFECT NET AMT
PROSPECTUS (WHEN PROPERTY RECEIVED BROKERS DATE OF SALES RECEIVED SCHEDULED
ID APPROPRIATE) TYPE CITY STATE FROM SALE OPINION SALE PRICE FROM SALE BALANCE
- ------------ ------------- -------- ---- ----- ------------- ------- ------- ----- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
THIS REPORT IS HISTORICAL
All information is from the liquidation date and does not need to be updated.
Total all Loans:
Current
Month Only:
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
ACTUAL DATE TOTAL LOSS
TOTAL SERVICING LOSSES DATE LOSS MINOR MINOR ADJ LOSS % OF
P&I TOTAL FEES NET PASSED PASSED ADJ TO PASSED WITH SCHEDULED
PROSPECTUS ID ADVANCED EXPENSES EXPENSE PROCEEDS THRU THRU TRUST THRU ADJUSTMENT BALANCE
- ------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
THIS REPORT IS HISTORICAL
All information is from the liquidation date and does not need to be updated.
Total all Loans:
Current Month
Only:
</TABLE>
B-13
<PAGE>
GMAC Commercial Mortgage Securities, Inc.
Series 1998-C1
REO STATUS REPORT
as of
<TABLE>
<CAPTION>
SHORT OTHER
NAME ADVANCES
PROS- (WHEN SCHEDULED TOTAL P&I TOTAL (TAXES CURRENT
PECTUS APPRO- PROPERTY SQ FT OR PAID THRU LOAN ADVANCES EXPENSES & TOTAL MONTHLY MATURITY
ID PRIATE) TYPE CITY STATE UNITS DATE BALANCE TO DATE TO DATE ESCROW) EXPOSURE P&I DATE
- ------ --------- -------- ---- ----- -------- --------- --------- --------- --------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
(1) Use the following codes; App. - Appraisal, BPO - Brokers Opinion, Int - Internal Value
*** How to determine the cap rate is agreed upon by Underwriter and servicers -to be
provided by a third party.
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
VALUE LOSS
USING APPRAISAL USING TOTAL REO PENDING
PROS- LTM LTM CAP NOI BPO OR 92% ESTIMATED APPRAISAL TRANS-ACQUISI- RESOLU-
PECTUS NOI NOI / RATE VALUA- & CAP INTERNAL APPR. RECOVERY REDUCTION FER TION TION
ID DATE DSC ASSIGN*** TION DATE RATE VALUE** R BPO(F) % REALIZED DATE DATE DATE COMMENTS
- ------ ------- --------- ---------- --------- ------- --------- -------- --------- --------- -------- ------ ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
(1) Use the following codes; App. - Appraisal, BPO - Brokers Opinion, Int - Internal Value
*** How to determine the cap rate is agreed upon by Underwriter and servicers -to be
provided by a third party.
</TABLE>
B-14
<PAGE>
GMAC Commercial Mortgage Securities, Inc.
Series 1998-C1
SERVICER WATCH LIST
as of
<TABLE>
<CAPTION>
S4 S55 S61 S57 S58 P7
- -------------- --------------- ------------ -------- --------- ----------------
SHORT NAME
(WHEN PROPERTY SCHEDULED LOAN
PROSPECTUS ID APPROPRIATE) TYPE CITY STATE BALANCE
- -------------- --------------- ------------ -------- --------- ----------------
<S> <C> <C> <C> <C> <C>
List all loans on watch list and reason sorted in decending balance order.
Total: $
*LTM - Last 12 months either trailing or last annual
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
S4 P8 P11 P54
- -------------- ------------- ------------ -------- ----------------------------------
PAID THRU MATURITY LTM*
PROSPECTUS ID DATE DATE DSCR COMMENT / REASON ON WATCH LIST
- -------------- ------------- ------------ -------- ----------------------------------
<S> <C> <C> <C> <C>
List all loans on watch list and reason sorted in decending balance order.
Total:
*LTM - Last 12 months either trailing or last annual
</TABLE>
B-15
<PAGE>
GMAC Commercial Mortgage Securities, Inc.
Series 1998-C1
COMPARATIVE FINANCIAL STATUS REPORT
as of
<TABLE>
<CAPTION>
ORIGINAL UNDERWRITING 2ND PRECEDING ANNUAL
INFORMATION OPERATING INFORMATION
- ---------- ---- ----- ------------ --------- --------- ------- -------------------------------- -----------------------
BASIS YEAR AS OF
- ---------- ---- ----- ------------ --------- --------- ------- --------------- ------- --- ---- --------------- -------
LAST SCHEDULED ANNUAL FINANCIAL FINANCIAL
PROSPECTUS PROPERTY LOAN PAID DEBT INFO AS OF % TOTAL $ INFO AS OF % TOTAL
ID CITY STATE INSPECT DATE BALANCE THRU DATE SERVICE DATE OCC REVENUE NOI DSCR DATE OCC REVENUE
- ---------- ---- ----- ------------ --------- --------- ------- ---------- --- ------- --- ---- ---------- --- -------
YY/MM YY/MM YY/MM
- ---------- ---- ----- ------------ --------- --------- ------- ---------- --- ------- --- ---- ---------- --- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
List all loans currently in deal with or with out information largest to smallest loan
Total: $ $ WA $ $ WA WA $
RECEIVED REQUIRED
FINANCIAL INFORMATION: LOANS BALANCE LOANS BALANCE
# % $ % # % $ %
CURRENT FULL
YEAR:
CURRENT FULL YR. RECEIVED WITH DSC LESS THAN 1:
PRIOR FULL YEAR:
PRIOR FULL YR. RECEIVED WITH DSC LESS THAN 1:
QUARTERLY FINANCIALS:
(1) DSC calculated using NOI / Debt Service
(2) Net change should compare the latest year
to the underwriting year
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
PRECEDING ANNUAL OPERATING YTD OR TRAILING FINANCIAL
INFORMATION INFORMATION NET CHANGE
- ---------- -------------------------------------------------------------------- -----------
PRECEDING &
NORMALIZED AS OF NORMALIZED MONTH REPORTED ACTUAL BASIS
- ---------- --------- --------------- ------- ----------- ------ --------------------- --- ---------------
FINANCIAL FS FS %
PROSPECTUS $ INFO AS OF % TOTAL START END TOTAL $ % % TOTAL
ID NOI DSCR DATE OCC REVENUE $ NOI DSCR DATE DATE REVENUE NOI DSC OCC REV DSC
- ---------- --- ---- ---------- --- ------- ----- ---- ------ ------ ------- ------ --- --- ----- ---
YY/MM YY/MM YY/MM
- ---------- --- ---- ---------- --- ------- ----- ---- ------ --------------------- --- --- ----- ---
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
List all loans currently in deal with or with out information largest to smallest loan
Total: $ WA WA $ $ WA WA $ $ WA WA $ WA
FINANCIAL
INFORMATION:
CURRENT FULL
YEAR:
CURRENT FULL YR. RECEIVED WITH DSC LESS THAN 1:
PRIOR FULL YEAR:
PRIOR FULL YR. RECEIVED WITH DSC LESS THAN 1:
QUARTERLY FINANCIALS:
(1) DSC calculated using NOI / Debt Service
(2) Net change should compare the
latest year to the underwriting year
</TABLE>
B-16
<PAGE>
GMAC Commercial Mortgage Securities, Inc.
Series 1998-C1
OPERATING STATEMENT ANALYSIS REPORT
as of
<TABLE>
<CAPTION>
UNDERWRITING 1993 1994 1995 YTD
---------------- -------- -------- -------- -------
<S> <C> <C> <C> <C> <C>
PROPERTY OVERVIEW
Control Number
Current Balance/Paid to Date
Property Name
Property Type
Property Address, City, State
Net Rentable Square Feet
Year Built/Year Renovated
Year of Operations
Occupancy Rate *
Average Rental Rate
*Occupancy rates are year end or the ending date of
the financial statement for the period.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NO.OF MOS.
PRIOR YEAR CURRENT YR.
------------ ------------- --------------
UNDERWRITING 1993 1994 1995 1996 YTD** 1995-BASE 1995-1994
BASE LINE NOMRALIZED NORMALIZED NORMALIZED AS OF //96 VARIANCE VARIANCE
-------------- ------------ ------------ ------------- -------------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME:
No. of Mos. Annualized
Period Ended
Statement Classification
Rental Income (Category 1)
Rental Income (Category 2)
Rental Income (Category 3)
Pass Through/Escalations
Other Income
EFFECTIVE GROSS INCOME $0.00 $0.00 $0.00 $0.00 $0.00 % %
Normalized - Full year Financial statements that have been reviewed by
the underwriter or Servicer
** Servicer will not be expected to "Normalize" these YTD numbers.
OPERATING EXPENSES:
Real Estate Taxes
Property Insurance
Utilities
Repairs and Maintenance
Management Fees
Payroll & Benefits Expense
Advertising & Marketing
Professional Fees
Other Expenses
Ground Rent
TOTAL OPERATING EXPENSES $0.00 $0.00 $0.00 $0.00 $0.00 % %
OPERATING EXPENSE RATIO
NET OPERATING INCOME $0.00 $0.00 $0.00 $0.00 $0.00
Leasing Commissions
Tenant Improvements
Replacement Reserve
TOTAL CAPITAL ITEMS $0.00 $0.00 $0.00 $0.00 $0.00 $0.00
N.O.I. AFTER CAPITAL ITEMS $0.00 $0.00 $0.00 $0.00 $0.00
DEBT SERVICE (PER SERVICER) $0.00 $0.00 $0.00 $0.00 $0.00
CASH FLOW AFTER DEBT SERVICE $0.00 $0.00 $0.00 $0.00 $0.00
(1) DSCR: (NOI/DEBT SERVICE)
DSCR: (AFTER RESERVES/CAP EXP.)
SOURCE OF FINANCIAL DATA:
(ie. operating statements, financial statements, tax return, other)
</TABLE>
NOTES AND ASSUMPTIONS:
The years shown above will roll always showing a three year history. 1995 is
the current year financials; 1994 is the prior year financials.
This report may vary depending on the property type and because of the way
information may vary in each borrowers statement.
Rental Income need to be broken down whenever possible differently for each
property type as follows: Retail: 1) Base Rent 2)Percentage rents on cashflow
Hotel: 1)Room Revenue 2)Food/Beverage Nursing Home: 1)Private 2) Medicaid 3)
Medicare
INCOME: COMMENT
EXPENSE: COMMENT
CAPITAL ITEMS: COMMENT
(1) Used in the Comparative Financial Status Report
B-17
<PAGE>
GMAC Commercial Mortgage Securities, Inc.
Series 1998-C1
NOI ADJUSTMENT WORKSHEET FOR "year"
as of
<TABLE>
<CAPTION>
BORROWER ADJUSTMENT NORMALIZED
------------ -------------- --------------
<S> <C> <C> <C>
PROPERTY OVERVIEW
Control Number
Current Balance/Paid to Date
Property Name
Property Type
Property Address, City, State
Net Rentable Square Feet
Year Built/Year Renovated
Year of Operations
Borrower
Adjustment
Normalized
Occupancy Rate *
Average Rental Rate
* Occupancy rates are year end or the ending
date of the financial statement for the
period.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
"YEAR"
----------
BORROWER
ACTUAL ADJUSTMENT NORMALIZED
---------- ---------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C>
INCOME:
Number of Mos.Annualized
Period Ended
Statement Classification
Actual
Rental Income (Category 1)
Rental Income (Category 2)
Rental Income (Category 3)
Pass Throughs/Escalations
Other Income
EFFECTIVE GROSS INCOME $0.00 $0.00 $0.00
Normalized - Full year Financial statements that
have been reviewed by the underwriter or Servicer
OPERATING EXPENSES:
Real Estate Taxes
Property Insurance
Utilities
Repairs and Maintenance
Management Fees
Payroll & Benefits Expense
Advertising & Marketing
Professional Fees
Other Expenses
Ground Rent
TOTAL OPERATING EXPENSES $0.00 $0.00 $0.00
OPERATING EXPENSE RATIO
NET OPERATING INCOME $0.00 $0.00 $0.00
Leasing Commissions
Tenant Improvements
Replacement Reserve
TOTAL CAPITAL ITEMS $0.00 $0.00 $0.00
N.O.I. AFTER CAPITAL ITEMS $0.00 $0.00 $0.00
DEBT SERVICE (PER SERVICER) $0.00 $0.00 $0.00
CASH FLOW AFTER DEBT SERVICE $0.00 $0.00 $0.00
(1)DSCR: (NOI/DEBT SERVICE)
DSCR: (AFTER
RESERVES(COPYRIGHT)AP EXP.)
SOURCE OF FINANCIAL DATA:
(ie. operating statements, financial statements, tax return,
other)
</TABLE>
NOTES AND ASSUMPTIONS:
This report should be completed by the Servicer for any Normalization of the
Borrowers numbers.
The Normalized column is used in the Operating Statement Analysis Report.
This report may vary depending on the property type and because of the way
information may vary in each borrowers statement.
INCOME: COMMENTS
EXPENSE: COMMENTS
CAPITAL ITEMS: COMMENTS
(1) Used in the Comparative Financial Status Report
B-18
<PAGE>
DEUTSCHE MORGAN GRENFELL [LOGO] LEHMAN BROTHERS
CMBS NEW ISSUE
----------------------------------
PRICING DATE: APRIL 28, 1998
----------------------------------
$1,301,390,000
(APPROXIMATE)
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
AS DEPOSITOR
GERMAN AMERICAN CAPITAL CORPORATION
GMAC COMMERCIAL MORTGAGE CORPORATION
AS MORTGAGE LOAN SELLERS
GMAC COMMERCIAL MORTGAGE CORPORATION
AS MASTER SERVICER AND SPECIAL SERVICER
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1998-C1
DEUTSCHE MORGAN GRENFELL LEHMAN BROTHERS
This material is for your private information and we are not soliciting any
action based upon it. This material is not to be construed as an offer to sell
or the solicitation of any offer to buy any security in any jurisdiction where
such an offer or solicitation would be illegal. This material is based on
information that we consider reliable, but we do not represent that it is
accurate or complete and it should not be relied upon as such. By accepting
this material the recipient agrees that it will not distribute or provide the
material to any other person. The information contained in this material may
be based on assumptions regarding market conditions and other matters as
reflected therein. We make no representations regarding the reasonableness of
such assumptions or the likelihood that any of such assumptions will coincide
with actual market conditions or events, and this material should not be
relied upon for such purposes. We and our affiliates, officers, directors,
partners and employees, including persons involved in the preparation or
issuance of this material may, from time to time, have long or short positions
in, and buy and sell, the securities mentioned therein or derivatives thereof
(including options). This material may be filed with the Securities and
Exchange Commission (the "SEC") and incorporated by reference into an
effective registration statement previously filed with the SEC under Rule 415
of the Securities Act of 1933, including in cases where the material does not
pertain to securities that are ultimately offered for sale pursuant to such
registration statement. Information contained in this material is current as
of the date appearing on this material only. Information in this material
regarding any assets backing any securities discussed herein supersedes all
prior information regarding such assets. Any information in the material,
whether regarding the assets backing any securities discussed herein or
otherwise, will be superseded by the information contained in any final
prospectus for any securities actually sold to you.
<PAGE>
STRUCTURAL AND COLLATERAL TERM SHEET [LOGO]
$1,301,390,000 (APPROXIMATE) APRIL 28, 1998
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1998-C1
I. ISSUE CHARACTERISTICS
Issue Type: Class A-1, A-2, B, C, D, E, F and X
Certificates (the "Public Securities") will
be offered pursuant to the related Prospectus
Supplement and accompanying Prospectus and
the Class G, H, J, K, L, M and N Certificates
(the "Non-Investment Grade Private
Securities") and will be offered privately
(including pursuant to Rule 144A under the
Securities Act of 1933, as amended) pursuant
to a Private Placement Memorandum.
Securities Offered: $1,301,390,000 fixed-rate, monthly pay,
multi-class, sequential pay commercial
mortgage REMIC Pass-Through Certificates.
Only the Public Securities are being offered
to investors who receive this term sheet.
Collateral: The collateral consists of an approximately
$1,438,000,264 pool of generally newly
originated, fixed rate, call protected, and
balloon or fully amortizing first lien,
commercial and multifamily Mortgage Loans.
Co-Lead Managers: Deutsche Morgan Grenfell and Lehman Brothers
Master Servicer: GMAC Commercial Mortgage Corporation
Special Servicer: GMAC Commercial Mortgage Corporation
Trustee: LaSalle National Bank
Pricing: On or about April 28th
Closing: On or about May 18th
Settlement: All classes will settle plus accrued interest
from May 1
Cut-Off Date: May 1, 1998
Distribution Date: 15th of each month, or following business day
(commencing June 1998)
ERISA Eligible: Classes A-1, A-2 and X are ERISA eligible
pursuant to the Underwriter's exemption
subject to certain conditions for eligibility
Representations & Warranties: Provided by applicable Mortgage Loan Sellers
Structure: Sequential pay
Rated Final Distribution Date: May 15, 2030
Clean up Call: 1.0%
Minimum Denominations: Classes A-1, A-2, B, C, D, E and F: $25,000 &
$1 increments Class X: $1,000,000 Notional
Amount & $1 increments
Rating Agencies: Fitch IBCA Inc. and Moody's Investors Service
(except Fitch will rate Class F and Moody's
will not)
This material is for your private information and we are not soliciting any
action based upon it. This material is not to be construed as an offer to sell
or the solicitation of any offer to buy any security in any jurisdiction where
such an offer or solicitation would be illegal. This material is based on
information that we consider reliable, but we do not represent that it is
accurate or complete and it should not be relied upon as such. By accepting
this material the recipient agrees that it will not distribute or provide the
material to any other person. The information contained in this material may
be based on assumptions regarding market conditions and other matters as
reflected therein. We make no representations regarding the reasonableness of
such assumptions or the likelihood that any of such assumptions will coincide
with actual market conditions or events, and this material should not be
relied upon for such purposes. We and our affiliates, officers, directors,
partners and employees, including persons involved in the preparation or
issuance of this material may, from time to time, have long or short positions
in, and buy and sell, the securities mentioned therein or derivatives thereof
(including options). This material may be filed with the Securities and
Exchange Commission (the "SEC") and incorporated by reference into an
effective registration statement previously filed with the SEC under Rule 415
of the Securities Act of 1933, including in cases where the material does not
pertain to securities that are ultimately offered for sale pursuant to such
registration statement. Information contained in this material is current as
of the date appearing on this material only. Information in this material
regarding any assets backing any securities discussed herein supersedes all
prior information regarding such assets. Any information in the material,
whether regarding the assets backing any securities discussed herein or
otherwise, will be superseded by the information contained in any final
prospectus for any securities actually sold to you.
<PAGE>
STRUCTURAL AND COLLATERAL TERM SHEET [LOGO]
II. ORIGINATORS:
GMAC Commercial
Mortgage Corporation: 152 of the Mortgage Loans (the "GMACCM
Loans"), which represent 83.3% of the Initial
Pool Balance, were originated or acquired by
GMAC Commercial Mortgage Corporation, a
California corporation and an affiliate of
the Depositor. GMACCM is a wholly-owned
subsidiary of GMAC Mortgage Group, Inc. GMAC
Mortgage Group, Inc. is a wholly-owned
subsidiary of General Motors Acceptance
Corporation, which is a wholly-owned
subsidiary of General Motors Corporation
("GM").
German American
Capital Corporation: 29 of the Mortgage Loans (the "GACC Loans"),
which represent 16.7% of the Initial Pool
Balance, were originated or acquired by GACC,
a wholly owned subsidiary of Deutsche Bank
North America Holding Corp., which in turn is
a wholly-owned subsidiary of Deutsche Bank
AG, a German corporation. GACC is also an
affiliate of Deutsche Morgan Grenfell Inc.,
one of the Underwriters. GACC engages
primarily in the business of purchasing and
holding mortgage loans pending
securitization, repackaging or other
disposition. GACC also acts from time to time
as the originator of mortgage loans. Although
GACC purchases and sells mortgage loans for
its own account, it does not act as a broker
or dealer in connection with any such loans.
[THE NARRATIVE AND/OR TABULAR INFORMATION BELOW IS A FAIR AND ACCURATE
DESCRIPTION OF GRAPHIC OR IMAGE MATERIAL OMITTED FOR THE
PURPOSE OF EDGAR FILING.]
[PIE CHART]
GMACCM 83.3%
GACC 16.7%
This material is for your private information and we are not soliciting any
action based upon it. This material is not to be construed as an offer to sell
or the solicitation of any offer to buy any security in any jurisdiction where
such an offer or solicitation would be illegal. This material is based on
information that we consider reliable, but we do not represent that it is
accurate or complete and it should not be relied upon as such. By accepting
this material the recipient agrees that it will not distribute or provide the
material to any other person. The information contained in this material may
be based on assumptions regarding market conditions and other matters as
reflected therein. We make no representations regarding the reasonableness of
such assumptions or the likelihood that any of such assumptions will coincide
with actual market conditions or events, and this material should not be
relied upon for such purposes. We and our affiliates, officers, directors,
partners and employees, including persons involved in the preparation or
issuance of this material may, from time to time, have long or short positions
in, and buy and sell, the securities mentioned therein or derivatives thereof
(including options). This material may be filed with the Securities and
Exchange Commission (the "SEC") and incorporated by reference into an
effective registration statement previously filed with the SEC under Rule 415
of the Securities Act of 1933, including in cases where the material does not
pertain to securities that are ultimately offered for sale pursuant to such
registration statement. Information contained in this material is current as
of the date appearing on this material only. Information in this material
regarding any assets backing any securities discussed herein supersedes all
prior information regarding such assets. Any information in the material,
whether regarding the assets backing any securities discussed herein or
otherwise, will be superseded by the information contained in any final
prospectus for any securities actually sold to you.
<PAGE>
STRUCTURAL AND COLLATERAL TERM SHEET
- -------------------------------------------------------------------------------
APPROXIMATE SECURITIES STRUCTURE
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PUBLICLY OFFERED CLASSES:
- -----------------------------------------------------------------------------------------------------------------------------------
EXPECTED APPROX. EXPECTED CREDIT EXPECTED
RATING SIZE SUPPORT COUPON WEIGHTED AVERAGE
CLASS (FITCH/MOODY'S) ($MM) DESCRIPTION DELIVERY (E) LIFE (YRS.) (A) PRINCIPAL WINDOW
(A)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
A1 AAA/Aaa 333,587,000 29.00% (g) DTC 5.5 6/98 - 11/07
A2 AAA/Aaa 687,393,000 29.00% (g) DTC 9.7 11/07 - 3/08
B AA+/Aaa 28,760,000 27.00% (f) DTC 9.9 3/08 - 4/08
C AA/ Aa2 64,710,000 22.50% (f) DTC 9.9 4/08 - 4/08
D A/A2 75,495,000 17.25% (f) DTC 10.0 4/08 - 7/08
E BBB/ Baa2 68,305,000 12.50% (c) DTC 11.1 7/08 - 3/11
F BBB-/ - 43,140,000 9.50% (c) DTC 14.2 3/11 - 1/13
X AAA/Aaa 1,438,000,263(b) IO (d) DTC 9.5 6/98 - 3/18
<CAPTION>
PRIVATELY PLACED CLASSES (NOT OFFERED):
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
G BB+/ - 32,355,000 7.25% (c) DTC 14.7 1/13 -2/13
H BB/ - 25,165,000 5.50% (c) DTC 14.8 2/13 - 3/13
J BB-/ - 14,380,000 4.50% (c) Physical 14.9 3/13 - 4/13
K B/ - 25,165,000 2.75% (f) Physical 15.2 4/13 - 4/14
L B-/ - 14,380,000 1.75% (f) Physical 16.6 4/14 - 9/15
M CCC/ - 10,785,000 1.00% (f) Physical 17.8 9/15 - 9/16
N Not Rated 14,380,263 (f) Physical 19.0 9/16 - 3/18
- -----------------------------------------------------------------------------------------------------------------------------------
<FN>
(a) Calculated at 0% CPR and no balloon extension.
(b) Notional amount.
(c) Weighted Average Net Mortgage Rate.
(d) The Class X coupon is calculated as the Weighted Average Net Mortgage
Rate less the Weighted Average Pass-Through Rate. (e) Delivery shall be
DTC, Euroclear and Cedel.
(f) Lesser of fixed rate or Weighted Average Net Mortgage Rate.
(g) Fixed Rate.
This material is for your private information and we are not soliciting any
action based upon it. This material is not to be construed as an offer to sell
or the solicitation of any offer to buy any security in any jurisdiction where
such an offer or solicitation would be illegal. This material is based on
information that we consider reliable, but we do not represent that it is
accurate or complete and it should not be relied upon as such. By accepting
this material the recipient agrees that it will not distribute or provide the
material to any other person. The information contained in this material may
be based on assumptions regarding market conditions and other matters as
reflected therein. We make no representations regarding the reasonableness of
such assumptions or the likelihood that any of such assumptions will coincide
with actual market conditions or events, and this material should not be
relied upon for such purposes. We and our affiliates, officers, directors,
partners and employees, including persons involved in the preparation or
issuance of this material may, from time to time, have long or short positions
in, and buy and sell, the securities mentioned therein or derivatives thereof
(including options). This material may be filed with the Securities and
Exchange Commission (the "SEC") and incorporated by reference into an
effective registration statement previously filed with the SEC under Rule 415
of the Securities Act of 1933, including in cases where the material does not
pertain to securities that are ultimately offered for sale pursuant to such
registration statement. Information contained in this material is current as
of the date appearing on this material only. Information in this material
regarding any assets backing any securities discussed herein supersedes all
prior information regarding such assets. Any information in the material,
whether regarding the assets backing any securities discussed herein or
otherwise, will be superseded by the information contained in any final
prospectus for any securities actually sold to you.
<PAGE>
STRUCTURAL AND COLLATERAL TERM SHEET
- -------------------------------------------------------------------------------
MORTGAGE POOL OVERVIEW
- -------------------------------------------------------------------------------
The Mortgage Pool is comprised of 181 multifamily and commercial loans
with an aggregate Cut-Off Date Balance of approximately $1,438,000,264
All of the Mortgage Loans are secured by first liens on multifamily and
commercial properties
The Pool's average Cut-Off Date Principal Balance is approximately
$7,944,753
The Pool's weighted average Mortgage Interest Rate is approximately
7.20%
Approximately 100% of the Pool Balance has prepayment protection as of
the Cut-Off Date
Approximately 51.72% of the Pool Balance is locked out as of the
Cut-Off Date
Weighted Average Current Debt Service Coverage Ratio: 1.49x
96.84% of the Portfolio has Debt Service Coverage Ratio greater than
1.20x
Weighted Average Current Loan to Value Ratio: 70.5%
This material is for your private information and we are not soliciting any
action based upon it. This material is not to be construed as an offer to sell
or the solicitation of any offer to buy any security in any jurisdiction where
such an offer or solicitation would be illegal. This material is based on
information that we consider reliable, but we do not represent that it is
accurate or complete and it should not be relied upon as such. By accepting
this material the recipient agrees that it will not distribute or provide the
material to any other person. The information contained in this material may
be based on assumptions regarding market conditions and other matters as
reflected therein. We make no representations regarding the reasonableness of
such assumptions or the likelihood that any of such assumptions will coincide
with actual market conditions or events, and this material should not be
relied upon for such purposes. We and our affiliates, officers, directors,
partners and employees, including persons involved in the preparation or
issuance of this material may, from time to time, have long or short positions
in, and buy and sell, the securities mentioned therein or derivatives thereof
(including options). This material may be filed with the Securities and
Exchange Commission (the "SEC") and incorporated by reference into an
effective registration statement previously filed with the SEC under Rule 415
of the Securities Act of 1933, including in cases where the material does not
pertain to securities that are ultimately offered for sale pursuant to such
registration statement. Information contained in this material is current as
of the date appearing on this material only. Information in this material
regarding any assets backing any securities discussed herein supersedes all
prior information regarding such assets. Any information in the material,
whether regarding the assets backing any securities discussed herein or
otherwise, will be superseded by the information contained in any final
prospectus for any securities actually sold to you.
<PAGE>
STRUCTURAL AND COLLATERAL TERM SHEET
- ------------------------------------------------------------------------------
GEOGRAPHIC DISTRIBUTION BY CUT-OFF DATE PRINCIPAL BALANCE
- ------------------------------------------------------------------------------
[THE NARRATIVE AND/OR TABULAR INFORMATION BELOW IS A FAIR AND ACCURATE
DESCRIPTION OF GRAPHIC OR IMAGE MATERIAL OMITTED FOR THE
PURPOSE OF EDGAR FILING.]
[MAP]
</TABLE>
<TABLE>
<CAPTION>
PERCENTAGE OF
NUMBER OF CUT-OFF DATE AGGREGATE CUT-OFF AVERAGE CUT-OFF WEIGHTED AVERAGE
MORTGAGE PRINCIPAL DATE PRINCIPAL DATE PRINCIPAL DEBT SERVICE
PROPERTY STATE PROPERTIES BALANCE (B) BALANCE BALANCE COVERAGE RATIO
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Texas 85 $ 310,782,395 21.61% $ 3,656,263 1.51x
New York 13 152,293,306 10.59 11,714,870 1.58
California 25 134,299,281 9.34 5,371,971 1.38
Arizona 23 102,987,628 7.16 4,477,723 1.59
Illinois 34 100,578,286 6.99 2,958,185 1.59
District of Columbia 3 64,920,483 4.51 21,640,161 1.59
Washington 4 63,033,903 4.38 15,758,476 1.67
Florida 11 54,445,035 3.79 4,949,549 1.52
Minnesota 3 51,567,186 3.59 17,189,062 1.40
Maryland 8 37,396,229 2.60 4,674,529 1.26
Michigan 8 36,604,997 2.55 4,575,625 1.49
Louisiana 5 36,191,152 2.52 7,238,230 1.50
Other 72 292,900,382 20.37 4,068,061 1.41
-- ----------- ----- --------- ----
TOTAL 294 $ 1,438,000,264 100% $ 4,891,157 1.49X
<CAPTION>
WEIGHTED
WEIGHTED AVERAGE AVERAGE WEIGHTED AVERAGE
MORTGAGE INTEREST REMAINING TERM CURRENT
PROPERTY STATE RATE TO MATURITY LTV
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
Texas 7.00% 123.8 79.28%
New York 7.21 145.6 59.24
California 7.41 124.6 72.01
Arizona 7.11 186.3 63.91
Illinois 6.86 124.9 83.96
District of Columbia 7.50 119.0 50.67
Washington 7.41 118.4 57.64
Florida 7.42 131.0 65.59
Minnesota 7.08 116.1 71.22
Maryland 7.47 141.4 77.29
Michigan 6.95 138.7 70.26
Louisiana 6.98 114.0 62.93
Other 7.37 134.4 71.85
---- ----- -----
TOTAL 7.20% 133.0 70.45%
<FN>
(a) Column totals may not sum due to rounding.
(b) For purposes of describing geographic concentration, loans secured by
multiple properties are allocated a Cut-off Date Principal Balance based
on the allocated loan amount.
</TABLE>
This material is for your private information and we are not soliciting any
action based upon it. This material is not to be construed as an offer to sell
or the solicitation of any offer to buy any security in any jurisdiction where
such an offer or solicitation would be illegal. This material is based on
information that we consider reliable, but we do not represent that it is
accurate or complete and it should not be relied upon as such. By accepting
this material the recipient agrees that it will not distribute or provide the
material to any other person. The information contained in this material may
be based on assumptions regarding market conditions and other matters as
reflected therein. We make no representations regarding the reasonableness of
such assumptions or the likelihood that any of such assumptions will coincide
with actual market conditions or events, and this material should not be
relied upon for such purposes. We and our affiliates, officers, directors,
partners and employees, including persons involved in the preparation or
issuance of this material may, from time to time, have long or short positions
in, and buy and sell, the securities mentioned therein or derivatives thereof
(including options). This material may be filed with the Securities and
Exchange Commission (the "SEC") and incorporated by reference into an
effective registration statement previously filed with the SEC under Rule 415
of the Securities Act of 1933, including in cases where the material does not
pertain to securities that are ultimately offered for sale pursuant to such
registration statement. Information contained in this material is current as
of the date appearing on this material only. Information in this material
regarding any assets backing any securities discussed herein supersedes all
prior information regarding such assets. Any information in the material,
whether regarding the assets backing any securities discussed herein or
otherwise, will be superseded by the information contained in any final
prospectus for any securities actually sold to you.
<PAGE>
STRUCTURAL AND COLLATERAL TERM SHEET
- -------------------------------------------------------------------------------
PROPERTY TYPE DISTRIBUTION BY CUT-OFF DATE PRINCIPAL BALANCE
- -------------------------------------------------------------------------------
[THE NARRATIVE AND/OR TABULAR INFORMATION BELOW IS A FAIR AND ACCURATE
DESCRIPTION OF GRAPHIC OR IMAGE MATERIAL OMITTED FOR THE
PURPOSE OF EDGAR FILING.]
[PIE CHART]
<TABLE>
<CAPTION>
NUMBER CUT-OFF DATE PERCENTAGE OF AGGREGATE AVERAGE WEIGHTED AVERAGE
OF MORTGAGE PRINCIPAL CUT-OFF DATE PRINCIPAL CUT-OFF DATE DEBT SERVICE
PROPERTY TYPE PROPERTIES BALANCE BALANCE PRINCIPAL BALANCE COVERAGE RATIO
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Multifamily 90 $ 375,985,582 26.15% $ 4,177,618 1.50x
Retail 40 273,969,673 19.05 6,849,242 1.35
Skilled Nursing 91 252,018,942 17.53 2,769,439 1.64
Hospitality 10 168,104,507 11.69 16,810,451 1.61
Office 25 155,984,444 10.85 6,239,378 1.45
Assisted Living 12 67,372,430 4.69 5,614,369 1.39
Mixed Use 8 60,001,740 4.17 7,500,217 1.68
Industrial 13 46,583,219 3.24 3,583,325 1.25
Other 5 37,979,725 2.64 7,595,945 1.46
- ---------- ---- --------- ----
TOTAL 294 $ 1,438,000,264 100% $ 4,891,157 1.49X
<CAPTION>
WEIGHTED AVERAGE WEIGHTED AVERAGE WEIGHTED
MORTGAGE INTEREST REMAINING TERM TO AVERAGE CURRENT
PROPERTY TYPE RATE MATURITY LTV
- ------------------------------------------------------------------------------------
<S> <C> <C> <C>
Multifamily 7.09% 150.9 67.86%
Retail 7.30 128.9 72.98
Skilled Nursing 6.96 117.2 85.47
Hospitality 7.55 126.8 54.32
Office 7.16 136.2 65.27
Assisted Living 7.07 116.2 76.66
Mixed Use 7.42 152.1 58.44
Industrial 7.30 122.9 73.16
Other 7.61 117.5 75.52
---- ----- -----
TOTAL 7.20% 133.0 70.45
<FN>
(a) Column totals may not sum due to rounding.
(b) Other property type includes special purpose properties, mobile home
parks, and a hospital.
</TABLE>
This material is for your private information and we are not soliciting any
action based upon it. This material is not to be construed as an offer to sell
or the solicitation of any offer to buy any security in any jurisdiction where
such an offer or solicitation would be illegal. This material is based on
information that we consider reliable, but we do not represent that it is
accurate or complete and it should not be relied upon as such. By accepting
this material the recipient agrees that it will not distribute or provide the
material to any other person. The information contained in this material may
be based on assumptions regarding market conditions and other matters as
reflected therein. We make no representations regarding the reasonableness of
such assumptions or the likelihood that any of such assumptions will coincide
with actual market conditions or events, and this material should not be
relied upon for such purposes. We and our affiliates, officers, directors,
partners and employees, including persons involved in the preparation or
issuance of this material may, from time to time, have long or short positions
in, and buy and sell, the securities mentioned therein or derivatives thereof
(including options). This material may be filed with the Securities and
Exchange Commission (the "SEC") and incorporated by reference into an
effective registration statement previously filed with the SEC under Rule 415
of the Securities Act of 1933, including in cases where the material does not
pertain to securities that are ultimately offered for sale pursuant to such
registration statement. Information contained in this material is current as
of the date appearing on this material only. Information in this material
regarding any assets backing any securities discussed herein supersedes all
prior information regarding such assets. Any information in the material,
whether regarding the assets backing any securities discussed herein or
otherwise, will be superseded by the information contained in any final
prospectus for any securities actually sold to you.
<PAGE>
STRUCTURAL AND COLLATERAL TERM SHEET
- -------------------------------------------------------------------------------
PREPAYMENT PROVISIONS
- -------------------------------------------------------------------------------
OVERVIEW OF PREPAYMENT RESTRICTIONS
PREPAYMENT RESTRICTION % OF INITIAL POOL BALANCE
- -------------------------------------------------------------------------------
Lockout Period with Defeasance 47.12%
Yield Maintenance 29.54
Lockout Period with Yield Maintenance 22.30
Lockout Period with Fixed Percentage 0.49
Other 0.55
------
Total 100%
ALLOCATION OF PREPAYMENT PREMIUMS
All Prepayment Premiums are distributed to Certificate holders on the
Distribution Date following the one-month collection period in which the
prepayment occurred.
Prepayment premiums will be allocated between the Offered Certificates
as follows:
A percentage of all Prepayment Premiums (either fixed Prepayment
Premiums or Yield Maintenance amount) will be allocated to each class
of Offered Certificates (other than the Class X Certificates) (the "P &
I Certificates) in an amount equal to the product of (a) such
Prepayment Premium (b) the percentage of the total principal
distribution that such Class receives, and (c) the Discount Rate
Fraction. The "Discount Ratio Fraction" is a percentage (which can be
no greater that 100% or less than 0%), the numerator of which is the
excess of the Pass-Through Rate for such Class of Certificates over the
relevant Discount Rate, and the denominator of which is the excess of
the Mortgage Rate of the related Mortgage Loan over the Discount Rate.
Discount = (Pass- Through Rate - Discount Rate)
Rate -----------------------------------
Fraction (Mortgage Rate - Discount Rate)
The remaining percentage of the Prepayment Premiums will be allocated
to the Class X Certificates
Allocation of Prepayment Premiums Example
Discount Rate Fraction Methodology:
Mortgage Rate = 9%
Pass-Through Rate = 7%
Treasury Rate (monthly) = 6%
P & I CERTIFICATE ALLOCATION CLASS X CERTIFICATE ALLOCATION
---------------------------- -------------------------------
7% - 6% = 33 1/3% Receives excess premiums = 66 2/3%
- -------
9% - 6%
This material is for your private information and we are not soliciting any
action based upon it. This material is not to be construed as an offer to sell
or the solicitation of any offer to buy any security in any jurisdiction where
such an offer or solicitation would be illegal. This material is based on
information that we consider reliable, but we do not represent that it is
accurate or complete and it should not be relied upon as such. By accepting
this material the recipient agrees that it will not distribute or provide the
material to any other person. The information contained in this material may
be based on assumptions regarding market conditions and other matters as
reflected therein. We make no representations regarding the reasonableness of
such assumptions or the likelihood that any of such assumptions will coincide
with actual market conditions or events, and this material should not be
relied upon for such purposes. We and our affiliates, officers, directors,
partners and employees, including persons involved in the preparation or
issuance of this material may, from time to time, have long or short positions
in, and buy and sell, the securities mentioned therein or derivatives thereof
(including options). This material may be filed with the Securities and
Exchange Commission (the "SEC") and incorporated by reference into an
effective registration statement previously filed with the SEC under Rule 415
of the Securities Act of 1933, including in cases where the material does not
pertain to securities that are ultimately offered for sale pursuant to such
registration statement. Information contained in this material is current as
of the date appearing on this material only. Information in this material
regarding any assets backing any securities discussed herein supersedes all
prior information regarding such assets. Any information in the material,
whether regarding the assets backing any securities discussed herein or
otherwise, will be superseded by the information contained in any final
prospectus for any securities actually sold to you.
<PAGE>
STRUCTURAL AND COLLATERAL TERM SHEET
- ------------------------------------------------------------------------------
PREPAYMENT RESTRICTIONS
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PREPAYMENT LOCK-OUT / PREMIUM ANALYSIS
PERCENTAGE OF MORTGAGE POOL BY PREPAYMENT RESTRICTION ASSUMING NO PREPAYMENT
PREPAYMENT JUNE JUNE JUNE JUNE JUNE JUNE JUNE JUNE JUNE
RESTRICTIONS 1998 1999 2000 2001 2002 2003 2004 2005 2006
- ----------------------------------- ---------- --------- ---------- --------- ---------- ---------- --------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Locked Out 51.72% 50.87% 47.77% 17.98% 11.24% 0.37% 0.09% 0.00% 0.00%
Defeasance 0.00 0.00 2.51 32.07 38.63 46.63 46.46 47.40 47.32
Greater of 1% and Yield
Maintenance 48.28 49.13 49.24 49.01 49.20 52.03 52.49 51.62 51.70
----- ----- ----- ----- ----- ----- ----- ----- -----
Subtotal 100.00 100.00 99.52 99.06 99.06 99.03 99.03 99.02 99.02
5.00% or Greater 0.00 0.00 0.48 0.48 0.00 0.00 0.00 0.00 0.00
4.00 - 4.99% 0.00 0.00 0.00 0.00 0.47 0.00 0.00 0.00 0.00
3.00 - 3.99% 0.00 0.00 0.00 0.00 0.00 0.97 0.50 0.52 0.00
2.00 - 2.99% 0.00 0.00 0.00 0.00 0.00 0.00 0.46 0.00 0.52
1.00 - 1.99% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.46 0.45
<1.00% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Open 0.00 0.00 0.00 0.46 0.46 0.00 0.00 0.00 0.00
---- ---- ---- ---- ---- ---- ---- ---- ----
Totals 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
Mortgage Pool Balance
($ million) $1,438.0 $1,415.6 $1,391.6 $1,365.4 $1,337.0 $1,300.3 $1,267.6 $1,207.1 $1,172.9
% of Cut-Off Pool Balance 100.00% 98.44% 96.77% 94.95% 92.98% 90.43% 88.15% 83.94% 81.56%
<CAPTION>
PREPAYMENT JUNE JUNE JUNE JUNE
RESTRICTIONS 2007 2008 2009 2010
- ----------------------------------- ---------- --------- ---------- --------
<S> <C> <C> <C> <C>
Locked Out 0.00% 0.00% 0.00% 0.00%
Defeasance 47.24 17.45 21.92 20.73
Greater of 1% and Yield
Maintenance 47.23 69.71 75.08 75.38
----- ----- ----- -----
Subtotal 94.47 87.16 97.00 96.12
5.00% or Greater 0.00 0.00 0.00 0.00
4.00 - 4.99% 0.00 0.00 0.00 0.00
3.00 - 3.99% 0.00 0.00 0.00 0.00
2.00 - 2.99% 0.00 0.00 0.00 0.00
1.00 - 1.99% 0.97 1.75 2.11 2.06
<1.00% 0.00 0.00 0.00 0.00
Open 4.56 11.09 0.89 1.82
---- ----- ---- ----
Totals 100.00% 100.00% 100.00% 100.00%
Mortgage Pool Balance
($ million) $1,136.1 $269.1 $206.7 $193.3
% of Cut-Off Pool Balance 79.01% 18.71% 14.37% 13.44%
</TABLE>
This material is for your private information and we are not soliciting any
action based upon it. This material is not to be construed as an offer to sell
or the solicitation of any offer to buy any security in any jurisdiction where
such an offer or solicitation would be illegal. This material is based on
information that we consider reliable, but we do not represent that it is
accurate or complete and it should not be relied upon as such. By accepting
this material the recipient agrees that it will not distribute or provide the
material to any other person. The information contained in this material may
be based on assumptions regarding market conditions and other matters as
reflected therein. We make no representations regarding the reasonableness of
such assumptions or the likelihood that any of such assumptions will coincide
with actual market conditions or events, and this material should not be
relied upon for such purposes. We and our affiliates, officers, directors,
partners and employees, including persons involved in the preparation or
issuance of this material may, from time to time, have long or short positions
in, and buy and sell, the securities mentioned therein or derivatives thereof
(including options). This material may be filed with the Securities and
Exchange Commission (the "SEC") and incorporated by reference into an
effective registration statement previously filed with the SEC under Rule 415
of the Securities Act of 1933, including in cases where the material does not
pertain to securities that are ultimately offered for sale pursuant to such
registration statement. Information contained in this material is current as
of the date appearing on this material only. Information in this material
regarding any assets backing any securities discussed herein supersedes all
prior information regarding such assets. Any information in the material,
whether regarding the assets backing any securities discussed herein or
otherwise, will be superseded by the information contained in any final
prospectus for any securities actually sold to you.
<PAGE>
STRUCTURAL AND COLLATERAL TERM SHEET
- -------------------------------------------------------------------------------
DISTRIBUTION OF CUT-OFF DATE PRINCIPAL BALANCE
- -------------------------------------------------------------------------------
[THE NARRATIVE AND/OR TABULAR INFORMATION BELOW IS A FAIR AND ACCURATE
DESCRIPTION OF GRAPHIC OR IMAGE MATERIAL OMITTED FOR THE
PURPOSE OF EDGAR FILING.]
[BAR GRAPH]
<TABLE>
<CAPTION>
PERCENTAGE OF
AGGREGATE AVERAGE
NUMBER OF CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE WEIGHTED AVERAGE
MORTGAGE PRINCIPAL PRINCIPAL PRINCIPAL DEBT SERVICE
RANGE OF CUT-OFF DATE PRINCIPAL BALANCE LOANS BALANCE BALANCE BALANCE COVERAGE RATIO
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
< $499,999 1 $ 411,898 0.03% $ 411,898 1.66x
500,000 - 999,999 6 5,283,241 0.37 880,540 2.20
1,000,000 - 1,999,999 26 38,101,831 2.65 1,465,455 1.48
2,000,000 - 2,999,999 41 101,114,894 7.03 2,466,217 1.50
3,000,000 - 3,999,999 20 70,477,572 4.90 3,523,879 1.55
4,000,000 - 4,999,999 18 79,813,908 5.55 4,434,106 1.45
5,000,000 - 5,999,999 13 72,594,765 5.05 5,584,213 1.37
6,000,000 - 6,999,999 10 66,012,980 4.59 6,601,298 1.48
7,000,000 - 7,999,999 9 67,053,250 4.66 7,450,361 1.61
8,000,000 - 8,999,999 7 61,045,595 4.25 8,720,799 1.39
9,000,000 - 9,999,999 5 47,551,686 3.31 9,510,337 1.37
10,000,000 - 11,999,999 7 80,217,832 5.58 11,459,690 1.39
12,000,000 - 13,999,999 1 13,378,055 0.93 13,378,055 1.34
14,000,000 - 16,999,999 6 95,321,602 6.63 15,886,934 1.24
17,000,000 - 225,437,299 11 639,621,155 44.48 58,147,378 1.57
-- ----------- ----- ---------- ----
TOTAL 181 $ 1,438,000,264 100% $ 7,944,753 1.49X
<CAPTION>
WEIGHTED
WEIGHTED AVERAGE WEIGHTED AVERAGE AVERAGE
MORTGAGE INTEREST REMAINING TERM CURRENT
RANGE OF CUT-OFF DATE PRINCIPAL BALANCE RATE TO MATURITY LTV
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
< $499,999 7.60% 118.0 68.65%
500,000 - 999,999 7.67 123.3 63.25
1,000,000 - 1,999,999 7.40 141.9 65.69
2,000,000 - 2,999,999 7.25 152.2 65.54
3,000,000 - 3,999,999 7.30 162.4 67.13
4,000,000 - 4,999,999 7.29 159.0 66.03
5,000,000 - 5,999,999 7.45 132.9 71.37
6,000,000 - 6,999,999 7.34 133.7 65.89
7,000,000 - 7,999,999 7.34 162.8 64.91
8,000,000 - 8,999,999 7.32 142.7 71.14
9,000,000 - 9,999,999 7.24 108.3 75.64
10,000,000 - 11,999,999 7.47 134.0 66.85
12,000,000 - 13,999,999 7.02 82.0 76.01
14,000,000 - 16,999,999 7.25 111.6 79.12
17,000,000 - 225,437,299 7.05 124.9 72.03
---- ----- -----
TOTAL 7.20% 133.0 70.45%
<FN>
(a) Column totals may not add due to rounding.
</TABLE>
This material is for your private information and we are not soliciting any
action based upon it. This material is not to be construed as an offer to sell
or the solicitation of any offer to buy any security in any jurisdiction where
such an offer or solicitation would be illegal. This material is based on
information that we consider reliable, but we do not represent that it is
accurate or complete and it should not be relied upon as such. By accepting
this material the recipient agrees that it will not distribute or provide the
material to any other person. The information contained in this material may
be based on assumptions regarding market conditions and other matters as
reflected therein. We make no representations regarding the reasonableness of
such assumptions or the likelihood that any of such assumptions will coincide
with actual market conditions or events, and this material should not be
relied upon for such purposes. We and our affiliates, officers, directors,
partners and employees, including persons involved in the preparation or
issuance of this material may, from time to time, have long or short positions
in, and buy and sell, the securities mentioned therein or derivatives thereof
(including options). This material may be filed with the Securities and
Exchange Commission (the "SEC") and incorporated by reference into an
effective registration statement previously filed with the SEC under Rule 415
of the Securities Act of 1933, including in cases where the material does not
pertain to securities that are ultimately offered for sale pursuant to such
registration statement. Information contained in this material is current as
of the date appearing on this material only. Information in this material
regarding any assets backing any securities discussed herein supersedes all
prior information regarding such assets. Any information in the material,
whether regarding the assets backing any securities discussed herein or
otherwise, will be superseded by the information contained in any final
prospectus for any securities actually sold to you.
<PAGE>
STRUCTURAL AND COLLATERAL TERM SHEET
- -------------------------------------------------------------------------------
DEBT SERVICE COVERAGE RATIO
- -------------------------------------------------------------------------------
Weighted Average Current Debt Service Coverage Ratio: 1.49x
96.4% of the Portfolio has Debt Service Coverage Ratio
greater than 1.20x
[THE NARRATIVE AND/OR TABULAR INFORMATION BELOW IS A FAIR AND ACCURATE
DESCRIPTION OF GRAPHIC OR IMAGE MATERIAL OMITTED FOR THE
PURPOSE OF EDGAR FILING.]
[BAR GRAPH]
<TABLE>
<CAPTION>
RANGE OF NUMBER OF CUT-OFF DATE PERCENTAGE OF AGGREGATE AVERAGE CUT-OFF WEIGHTED AVERAGE
DEBT SERVICE MORTGAGE PRINCIPAL CUT-OFF DATE PRINCIPAL DATE PRINCIPAL DEBT SERVICE
COVERAGE RATIOS LOANS BALANCE BALANCE BALANCE COVERAGE RATIO
- --------------------- ------------- ---------------- ------------------------- ------------------ ------------------
<S> <C> <C> <C> <C> <C>
< 1.00 2 $ 20,447,034 1.42% $ 10,223,517 1.00x
1.01 - 1.10 5 18,413,406 1.28 3,682,681 1.05
1.11 - 1.20 3 12,482,558 0.87 4,160,853 1.19
1.21 - 1.30 35 227,790,328 15.84 6,508,295 1.27
1.31 - 1.40 63 362,948,923 25.24 5,761,094 1.34
1.41 - 1.50 14 160,551,148 11.16 11,467,939 1.47
1.51 - 1.60 10 337,452,383 23.47 33,745,238 1.59
1.61 - 1.70 5 65,514,255 4.56 13,102,851 1.67
1.71 - 1.80 23 83,884,482 5.83 3,647,151 1.76
1.81 - 1.90 12 85,539,907 5.95 7,128,326 1.86
1.91 - 2.00 3 48,312,170 3.36 16,104,057 1.93
2.01 - 2.10 1 2,681,087 0.19 2,681,087 2.07
2.11 - 2.20 2 5,854,971 0.41 2,927,486 2.15
2.21 >= 3 6,127,612 0.43 2,042,537 3.36
- --------- ---- --------- ----
TOTAL 181 $ 1,438,000,264 100% $ 7,944,753 1.49X
<CAPTION>
RANGE OF WEIGHTED AVERAGE WEIGHTED AVERAGE WEIGHTED
DEBT SERVICE MORTGAGE INTEREST REMAINING TERM TO AVERAGE CURRENT
COVERAGE RATIOS RATE MATURITY LTV
- --------------------- - -------------------- -------------------- -----------------
<S> <C> <C> <C>
< 1.00 6.91% 88.5 75.82%
1.01 - 1.10 7.08 161.8 84.16
1.11 - 1.20 7.52 130.3 75.73
1.21 - 1.30 7.37 123.4 75.36
1.31 - 1.40 7.28 116.8 74.34
1.41 - 1.50 7.12 127.4 67.41
1.51 - 1.60 7.06 117.6 77.07
1.61 - 1.70 7.37 120.9 59.87
1.71 - 1.80 7.05 224.5 53.71
1.81 - 1.90 6.93 202.1 49.92
1.91 - 2.00 7.54 160.1 57.69
2.01 - 2.10 7.98 118.0 58.28
2.11 - 2.20 7.02 234.0 52.77
2.21 >= 7.90 127.4 54.90
---- ----- -----
TOTAL 7.20% 133.0 70.45%
<FN>
(a) Column totals may not add due to rounding
</TABLE>
This material is for your private information and we are not soliciting any
action based upon it. This material is not to be construed as an offer to sell
or the solicitation of any offer to buy any security in any jurisdiction where
such an offer or solicitation would be illegal. This material is based on
information that we consider reliable, but we do not represent that it is
accurate or complete and it should not be relied upon as such. By accepting
this material the recipient agrees that it will not distribute or provide the
material to any other person. The information contained in this material may
be based on assumptions regarding market conditions and other matters as
reflected therein. We make no representations regarding the reasonableness of
such assumptions or the likelihood that any of such assumptions will coincide
with actual market conditions or events, and this material should not be
relied upon for such purposes. We and our affiliates, officers, directors,
partners and employees, including persons involved in the preparation or
issuance of this material may, from time to time, have long or short positions
in, and buy and sell, the securities mentioned therein or derivatives thereof
(including options). This material may be filed with the Securities and
Exchange Commission (the "SEC") and incorporated by reference into an
effective registration statement previously filed with the SEC under Rule 415
of the Securities Act of 1933, including in cases where the material does not
pertain to securities that are ultimately offered for sale pursuant to such
registration statement. Information contained in this material is current as
of the date appearing on this material only. Information in this material
regarding any assets backing any securities discussed herein supersedes all
prior information regarding such assets. Any information in the material,
whether regarding the assets backing any securities discussed herein or
otherwise, will be superseded by the information contained in any final
prospectus for any securities actually sold to you.
<PAGE>
STRUCTURAL AND COLLATERAL TERM SHEET
- ------------------------------------------------------------------------------
CUT-OFF DATE LOAN TO VALUE RATIO
- ------------------------------------------------------------------------------
Weighted Average Current Loan to Value Ratio: 70.5%
56.6% of the Cut-off Date Principal Balance have Loan to
Value Ratio of 75% or less
[THE NARRATIVE AND/OR TABULAR INFORMATION BELOW IS A FAIR AND ACCURATE
DESCRIPTION OF GRAPHIC OR IMAGE MATERIAL OMITTED FOR THE
PURPOSE OF EDGAR FILING.]
[BAR GRAPH]
<TABLE>
<CAPTION>
PERCENTAGE OF
RANGE OF CURRENT NUMBER OF CUT-OFF DATE AGGREGATE AVERAGE CUT-OFF WEIGHTED AVERAGE
LOAN-TO-VALUE RATIOS MORTGAGE PRINCIPAL CUT-OFF DATE DATE PRINCIPAL DEBT SERVICE
LOANS BALANCE PRINCIPAL BALANCE BALANCE COVERAGE RATIO
- --------------------- ----------- ------------------ ---------------------- ----------------- ---------------------
<S> <C> <C> <C> <C> <C>
23.86% - 30.00% 2 $ 2,635,069 0.18% $ 1,317,534 3.98x
30.01 - 50.00 9 142,233,130 9.89 15,803,681 1.68
50.01 - 60.00 44 246,279,251 17.13 5,597,256 1.73
60.01 - 65.00 11 69,907,277 4.86 6,355,207 1.51
65.01 - 70.00 18 85,603,297 5.95 4,755,739 1.33
70.01 - 75.00 51 267,464,838 18.60 5,244,409 1.34
75.01 - 80.00 36 335,212,716 23.31 9,311,464 1.37
80.01 - 85.00 7 57,036,973 3.97 8,148,139 1.17
85.01 - 90.00 1 225,437,229 15.68 225,437,229 1.60
95.01 - 100.00 2 6,190,484 0.43 3,095,242 1.03
- --------- ---- --------- ----
TOTAL 181 $ 1,438,000,264 100% $ 7,944,753 1.49X
<CAPTION>
WEIGHTED
WEIGHTED AVERAGE WEIGHTED
RANGE OF CURRENT AVERAGE REMAINING WEIGHTED AVERAGE
LOAN-TO-VALUE RATIOS MORTGAGE TERM TO AVERAGE BALLOON/
INTEREST RATE MATURITY CURRENT LTV ARD LTV
- --------------------- -------------- -------------- ---------------- ---------------
<S> <C> <C> <C> <C>
23.86% - 30.00% 7.85% 139.8 24.80% 0.00%
30.01 - 50.00 7.29 152.8 48.09 33.85
50.01 - 60.00 7.21 182.4 54.80 22.84
60.01 - 65.00 7.27 115.3 62.93 39.90
65.01 - 70.00 7.46 121.8 68.07 54.66
70.01 - 75.00 7.30 118.2 73.25 61.72
75.01 - 80.00 7.27 119.6 77.77 65.11
80.01 - 85.00 7.17 109.1 81.55 46.27
85.01 - 90.00 6.81 117.0 87.62 69.13
95.01 - 100.00 6.80 238.0 99.61 0.00
---- ----- ----- ----
TOTAL 7.20% 133.0 70.45% 51.78%
<FN>
(a) Column totals may not add due to rounding.
</TABLE>
This material is for your private information and we are not soliciting any
action based upon it. This material is not to be construed as an offer to sell
or the solicitation of any offer to buy any security in any jurisdiction where
such an offer or solicitation would be illegal. This material is based on
information that we consider reliable, but we do not represent that it is
accurate or complete and it should not be relied upon as such. By accepting
this material the recipient agrees that it will not distribute or provide the
material to any other person. The information contained in this material may
be based on assumptions regarding market conditions and other matters as
reflected therein. We make no representations regarding the reasonableness of
such assumptions or the likelihood that any of such assumptions will coincide
with actual market conditions or events, and this material should not be
relied upon for such purposes. We and our affiliates, officers, directors,
partners and employees, including persons involved in the preparation or
issuance of this material may, from time to time, have long or short positions
in, and buy and sell, the securities mentioned therein or derivatives thereof
(including options). This material may be filed with the Securities and
Exchange Commission (the "SEC") and incorporated by reference into an
effective registration statement previously filed with the SEC under Rule 415
of the Securities Act of 1933, including in cases where the material does not
pertain to securities that are ultimately offered for sale pursuant to such
registration statement. Information contained in this material is current as
of the date appearing on this material only. Information in this material
regarding any assets backing any securities discussed herein supersedes all
prior information regarding such assets. Any information in the material,
whether regarding the assets backing any securities discussed herein or
otherwise, will be superseded by the information contained in any final
prospectus for any securities actually sold to you.
<PAGE>
STRUCTURAL AND COLLATERAL TERM SHEET
- -------------------------------------------------------------------------------
REMAINING AMORTIZATION TERM (IN MONTHS)
- -------------------------------------------------------------------------------
[THE NARRATIVE AND/OR TABULAR INFORMATION BELOW IS A FAIR AND ACCURATE
DESCRIPTION OF GRAPHIC OR IMAGE MATERIAL OMITTED FOR THE
PURPOSE OF EDGAR FILING.]
[BAR GRAPH]
<TABLE>
<CAPTION>
RANGE OF NUMBER OF CUT-OFF DATE PERCENTAGE OF AGGREGATE AVERAGE CUT-OFF WEIGHTED AVERAGE
AMORTIZATION MORTGAGE PRINCIPAL CUT-OFF DATE PRINCIPAL DATE PRINCIPAL DEBT SERVICE
TERMS LOANS BALANCE BALANCE BALANCE COVERAGE RATIO
- --------------------- ------------- ---------------- ------------------------- ------------------ --------------------
<S> <C> <C> <C> <C> <C>
71-90 1 $ 15,873,962 1.10% $ 15,873,962 1.00x
91-110 1 1,677,521 0.12 1,677,521 1.06
111-130 2 6,219,574 0.43 3,109,787 1.57
131-150 1 3,736,335 0.26 3,736,335 1.03
171-190 4 40,265,640 2.80 10,066,410 1.58
211-230 1 4,370,386 0.30 4,370,386 1.28
231-250 41 143,341,737 9.97 3,496,140 1.71
291-310 40 567,560,418 39.47 14,189,010 1.56
331-360 90 654,954,690 45.55 7,277,274 1.41
-- ----------- ----- --------- ----
TOTAL 181 $ 1,438,000,264 100% $ 7,944,753 1.49X
<CAPTION>
RANGE OF WEIGHTED AVERAGE WEIGHTED AVERAGE WEIGHTED
AMORTIZATION MORTGAGE INTEREST REMAINING TERM TO AVERAGE CURRENT
TERMS RATE MATURITY LTV
- --------------------- -------------------- -------------------- -----------------
<S> <C> <C> <C>
71-90 6.91% 80.0 81.20%
91-110 7.25 106.0 67.10
111-130 7.10 118.0 48.35
131-150 7.13 146.0 83.96
171-190 7.04 120.5 62.14
211-230 7.38 117.0 69.37
231-250 7.05 225.8 56.17
291-310 7.22 120.5 73.28
331-360 7.24 125.8 71.53
---- ----- -----
TOTAL 7.20% 133.0 70.45%
<FN>
(a) Column totals may not add due to rounding.
</TABLE>
This material is for your private information and we are not soliciting any
action based upon it. This material is not to be construed as an offer to sell
or the solicitation of any offer to buy any security in any jurisdiction where
such an offer or solicitation would be illegal. This material is based on
information that we consider reliable, but we do not represent that it is
accurate or complete and it should not be relied upon as such. By accepting
this material the recipient agrees that it will not distribute or provide the
material to any other person. The information contained in this material may
be based on assumptions regarding market conditions and other matters as
reflected therein. We make no representations regarding the reasonableness of
such assumptions or the likelihood that any of such assumptions will coincide
with actual market conditions or events, and this material should not be
relied upon for such purposes. We and our affiliates, officers, directors,
partners and employees, including persons involved in the preparation or
issuance of this material may, from time to time, have long or short positions
in, and buy and sell, the securities mentioned therein or derivatives thereof
(including options). This material may be filed with the Securities and
Exchange Commission (the "SEC") and incorporated by reference into an
effective registration statement previously filed with the SEC under Rule 415
of the Securities Act of 1933, including in cases where the material does not
pertain to securities that are ultimately offered for sale pursuant to such
registration statement. Information contained in this material is current as
of the date appearing on this material only. Information in this material
regarding any assets backing any securities discussed herein supersedes all
prior information regarding such assets. Any information in the material,
whether regarding the assets backing any securities discussed herein or
otherwise, will be superseded by the information contained in any final
prospectus for any securities actually sold to you.
<PAGE>
STRUCTURAL AND COLLATERAL TERM SHEET
- -------------------------------------------------------------------------------
CURRENT MORTGAGE INTEREST RATES
- -------------------------------------------------------------------------------
[THE NARRATIVE AND/OR TABULAR INFORMATION BELOW IS A FAIR AND ACCURATE
DESCRIPTION OF GRAPHIC OR IMAGE MATERIAL OMITTED FOR THE
PURPOSE OF EDGAR FILING.]
[BAR GRAPH]
<TABLE>
<CAPTION>
RANGE OF NUMBER OF CUT-OFF DATE PERCENTAGE OF AGGREGATE AVERAGE CUT-OFF WEIGHTED AVERAGE
MORTGAGE MORTGAGE PRINCIPAL CUT-OFF DATE PRINCIPAL DATE PRINCIPAL DEBT SERVICE
RATES LOANS BALANCE BALANCE BALANCE COVERAGE RATIO
- --------------------- ------------- ---------------- ------------------------- ------------------ -------------------
<S> <C> <C> <C> <C> <C>
6.50 - 6.75 2 $ 43,558,638 3.03% $ 21,779,319 1.51x
6.75 - 7.00 16 387,990,079 26.98 24,249,380 1.55
7.00 - 7.25 68 392,472,876 27.29 5,771,660 1.49
7.25 - 7.50 51 410,834,586 28.57 8,055,580 1.45
7.50 - 7.75 28 131,221,075 9.13 4,686,467 1.40
7.75 - 8.00 9 42,578,781 2.96 4,730,976 1.62
8.00 - 8.25 3 10,573,647 0.74 3,524,549 1.83
8.25 - 8.50 3 14,597,956 1.02 4,865,985 1.68
8.75 - 9.00 1 4,172,624 0.29 4,172,624 1.57
- --------- ---- --------- ----
TOTAL 181 $ 1,438,000,264 100% $ 7,944,753 1.49X
<CAPTION>
RANGE OF WEIGHTED AVERAGE WEIGHTED AVERAGE WEIGHTED
MORTGAGE MORTGAGE INTEREST REMAINING TERM TO AVERAGE CURRENT
RATES RATE MATURITY LTV
- --------------------- - -------------------- -------------------- -----------------
<S> <C> <C> <C>
6.50 - 6.75 6.74% 117.0 78.47%
6.75 - 7.00 6.85 124.1 78.31
7.00 - 7.25 7.09 154.9 67.33
7.25 - 7.50 7.40 124.2 66.59
7.50 - 7.75 7.64 126.0 68.11
7.75 - 8.00 7.83 145.5 64.65
8.00 - 8.25 8.15 122.8 65.20
8.25 - 8.50 8.43 116.0 74.41
8.75 - 9.00 8.88 113.0 63.22
---- ----- -----
TOTAL 7.20% 133.0 70.45%
<FN>
(a) Column totals may not add due to rounding.
</TABLE>
This material is for your private information and we are not soliciting any
action based upon it. This material is not to be construed as an offer to sell
or the solicitation of any offer to buy any security in any jurisdiction where
such an offer or solicitation would be illegal. This material is based on
information that we consider reliable, but we do not represent that it is
accurate or complete and it should not be relied upon as such. By accepting
this material the recipient agrees that it will not distribute or provide the
material to any other person. The information contained in this material may
be based on assumptions regarding market conditions and other matters as
reflected therein. We make no representations regarding the reasonableness of
such assumptions or the likelihood that any of such assumptions will coincide
with actual market conditions or events, and this material should not be
relied upon for such purposes. We and our affiliates, officers, directors,
partners and employees, including persons involved in the preparation or
issuance of this material may, from time to time, have long or short positions
in, and buy and sell, the securities mentioned therein or derivatives thereof
(including options). This material may be filed with the Securities and
Exchange Commission (the "SEC") and incorporated by reference into an
effective registration statement previously filed with the SEC under Rule 415
of the Securities Act of 1933, including in cases where the material does not
pertain to securities that are ultimately offered for sale pursuant to such
registration statement. Information contained in this material is current as
of the date appearing on this material only. Information in this material
regarding any assets backing any securities discussed herein supersedes all
prior information regarding such assets. Any information in the material,
whether regarding the assets backing any securities discussed herein or
otherwise, will be superseded by the information contained in any final
prospectus for any securities actually sold to you.
<PAGE>
STRUCTURAL AND COLLATERAL TERM SHEET
- -------------------------------------------------------------------------------
AMORTIZATION TYPES
- -------------------------------------------------------------------------------
[THE NARRATIVE AND/OR TABULAR INFORMATION BELOW IS A FAIR AND ACCURATE
DESCRIPTION OF GRAPHIC OR IMAGE MATERIAL OMITTED FOR THE
PURPOSE OF EDGAR FILING.]
[BAR GRAPH]
<TABLE>
<CAPTION>
NUMBER CUT-OFF DATE PERCENTAGE OF AGGREGATE AVERAGE WEIGHTED AVERAGE DEBT
OF MORTGAGE PRINCIPAL CUT-OFF DATE PRINCIPAL CUT-OFF DATE SERVICE COVERAGE
AMORTIZATION TYPE LOANS BALANCE BALANCE PRINCIPAL BALANCE RATIO
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Balloon 103 $ 882,979,842 61.40 $8,572,620 1.48x
Fully Amortizing 44 162,526,248 11.30 3,693,778 1.66
Hyper Amortizing 34 392,494,174 27.29 11,543,946 1.46
-- ----------- ----- ---------- ----
TOTAL 181 $ 1,438,000,264 100% $ 7,944,753 1.49X
<CAPTION>
WEIGHTED AVERAGE WEIGHTED AVERAGE WEIGHTED
MORTGAGE INTEREST REMAINING TERM TO AVERAGE
AMORTIZATION TYPE RATE MATURITY CURRENT LTV
- -----------------------------------------------------------------------------
<S> <C> <C> <C>
Balloon 7.18% 122.2 75.65%
Fully Amortizing 7.03 210.0 58.10
Hyper Amortizing 7.33 125.5 63.88
---- ----- -----
TOTAL 7.20% 133.0 70.45%
<FN>
(a) Column totals may not add due to rounding.
</TABLE>
This material is for your private information and we are not soliciting any
action based upon it. This material is not to be construed as an offer to sell
or the solicitation of any offer to buy any security in any jurisdiction where
such an offer or solicitation would be illegal. This material is based on
information that we consider reliable, but we do not represent that it is
accurate or complete and it should not be relied upon as such. By accepting
this material the recipient agrees that it will not distribute or provide the
material to any other person. The information contained in this material may
be based on assumptions regarding market conditions and other matters as
reflected therein. We make no representations regarding the reasonableness of
such assumptions or the likelihood that any of such assumptions will coincide
with actual market conditions or events, and this material should not be
relied upon for such purposes. We and our affiliates, officers, directors,
partners and employees, including persons involved in the preparation or
issuance of this material may, from time to time, have long or short positions
in, and buy and sell, the securities mentioned therein or derivatives thereof
(including options). This material may be filed with the Securities and
Exchange Commission (the "SEC") and incorporated by reference into an
effective registration statement previously filed with the SEC under Rule 415
of the Securities Act of 1933, including in cases where the material does not
pertain to securities that are ultimately offered for sale pursuant to such
registration statement. Information contained in this material is current as
of the date appearing on this material only. Information in this material
regarding any assets backing any securities discussed herein supersedes all
prior information regarding such assets. Any information in the material,
whether regarding the assets backing any securities discussed herein or
otherwise, will be superseded by the information contained in any final
prospectus for any securities actually sold to you.
<PAGE>
STRUCTURAL AND COLLATERAL TERM SHEET
- -------------------------------------------------------------------------------
REMAINING TERM TO MATURITY (IN MONTHS)
- -------------------------------------------------------------------------------
[THE NARRATIVE AND/OR TABULAR INFORMATION BELOW IS A FAIR AND ACCURATE
DESCRIPTION OF GRAPHIC OR IMAGE MATERIAL OMITTED FOR THE
PURPOSE OF EDGAR FILING.]
[BAR GRAPH]
<TABLE>
<CAPTION>
RANGE OF REMAINING NUMBER OF CUT-OFF DATE PERCENTAGE OF AGGREGATE AVERAGE CUT-OFF WEIGHTED AVERAGE
TERM TO MORTGAGE PRINCIPAL CUT-OFF DATE PRINCIPAL DATE PRINCIPAL DEBT SERVICE
MATURITY LOANS BALANCE BALANCE BALANCE COVERAGE RATIO
- --------------------- ------------- ----------------- ------------------------- ------------------ --------------------
<S> <C> <C> <C> <C>
=<70 1 $ 6,508,605 0.45% $ 6,508,605 1.31x
71 - 90 7 44,633,538 3.10 6,376,220 1.22
91 - 110 1 1,677,521 0.12 1,677,521 1.06
111 - 130 117 1,094,245,468 76.09 9,352,525 1.45
131- 150 2 6,128,400 0.43 3,064,200 1.17
151 - 170 2 7,065,919 0.49 3,532,960 1.22
171 - 190 15 146,796,443 10.21 9,786,430 1.71
231 - 250 36 130,944,369 9.11 3,637,344 1.75
-- ----------- ---- --------- ----
TOTAL 181 $ 1,438,000,264 100% $ 7,944,753 1.49X
<CAPTION>
RANGE OF REMAINING WEIGHTED AVERAGE WEIGHTED AVERAGE WEIGHTED AVERAGE
TERM TO MORTGAGE INTEREST REMAINING TERM TO CURRENT
MATURITY RATE MATURITY LTV
- --------------------- -------------------- ------------------- -------------------
<S> <C> <C> <C>
=<70 6.92% 57.0 71.52%
71 - 90 7.16 80.6 76.10
91 - 110 7.25 106.0 67.10
111 - 130 7.21 117.4 73.83
131- 150 7.37 144.0 79.48
151 - 170 7.55 151.0 74.40
171 - 190 7.27 177.8 56.74
231 - 250 7.02 234.3 55.00
---- ----- -----
TOTAL 7.20% 133.0 70.45%
<FN>
(a) Column totals may not add due to rounding.
</TABLE>
This material is for your private information and we are not soliciting any
action based upon it. This material is not to be construed as an offer to sell
or the solicitation of any offer to buy any security in any jurisdiction where
such an offer or solicitation would be illegal. This material is based on
information that we consider reliable, but we do not represent that it is
accurate or complete and it should not be relied upon as such. By accepting
this material the recipient agrees that it will not distribute or provide the
material to any other person. The information contained in this material may
be based on assumptions regarding market conditions and other matters as
reflected therein. We make no representations regarding the reasonableness of
such assumptions or the likelihood that any of such assumptions will coincide
with actual market conditions or events, and this material should not be
relied upon for such purposes. We and our affiliates, officers, directors,
partners and employees, including persons involved in the preparation or
issuance of this material may, from time to time, have long or short positions
in, and buy and sell, the securities mentioned therein or derivatives thereof
(including options). This material may be filed with the Securities and
Exchange Commission (the "SEC") and incorporated by reference into an
effective registration statement previously filed with the SEC under Rule 415
of the Securities Act of 1933, including in cases where the material does not
pertain to securities that are ultimately offered for sale pursuant to such
registration statement. Information contained in this material is current as
of the date appearing on this material only. Information in this material
regarding any assets backing any securities discussed herein supersedes all
prior information regarding such assets. Any information in the material,
whether regarding the assets backing any securities discussed herein or
otherwise, will be superseded by the information contained in any final
prospectus for any securities actually sold to you.
<PAGE>
STRUCTURAL AND COLLATERAL TERM SHEET
- -------------------------------------------------------------------------------
YEAR OF ORIGINATION
- -------------------------------------------------------------------------------
[THE NARRATIVE AND/OR TABULAR INFORMATION BELOW IS A FAIR AND ACCURATE
DESCRIPTION OF GRAPHIC OR IMAGE MATERIAL OMITTED FOR THE
PURPOSE OF EDGAR FILING.]
[BAR GRAPH]
<TABLE>
<CAPTION>
YEAR OF NUMBER OF CUT-OFF DATE PERCENTAGE OF AGGREGATE AVERAGE WEIGHTED AVERAGE
ORIGINATION MORTGAGE PRINCIPAL CUT-OFF DATE PRINCIPAL CUT-OFF DATE DEBT SERVICE
LOANS BALANCE BALANCE PRINCIPAL BALANCE COVERAGE RATIO
- --------------------- ------------- ----------------- ------------------------- ------------------ -------------------
<S> <C> <C> <C> <C> <C>
1997 93 $ 627,341,024 43.63 $ 6,745,602 1.49x
1998 86 803,593,321 55.88 9,344,108 1.50
1995 2 7,065,919 0.49 3,532,960 1.22
- --------- ---- --------- ----
TOTAL 181 $ 1,438,000,264 100% $ 7,944,753 1.49X
<CAPTION>
YEAR OF WEIGHTED AVERAGE WEIGHTED AVERAGE WEIGHTED
ORIGINATION MORTGAGE INTEREST REMAINING TERM TO AVERAGE CURRENT
RATE MATURITY LTV
- ----------------------- -------------------- ------------------- -----------------
<S> <C> <C> <C>
1997 7.25% 144.1 67.35%
1998 7.16 124.2 72.84
1995 7.55 151.0 74.40
---- ----- -----
TOTAL 7.20% 133.0 70.45%
<FN>
(a) Column totals may not add due to rounding.
</TABLE>
This material is for your private information and we are not soliciting any
action based upon it. This material is not to be construed as an offer to sell
or the solicitation of any offer to buy any security in any jurisdiction where
such an offer or solicitation would be illegal. This material is based on
information that we consider reliable, but we do not represent that it is
accurate or complete and it should not be relied upon as such. By accepting
this material the recipient agrees that it will not distribute or provide the
material to any other person. The information contained in this material may
be based on assumptions regarding market conditions and other matters as
reflected therein. We make no representations regarding the reasonableness of
such assumptions or the likelihood that any of such assumptions will coincide
with actual market conditions or events, and this material should not be
relied upon for such purposes. We and our affiliates, officers, directors,
partners and employees, including persons involved in the preparation or
issuance of this material may, from time to time, have long or short positions
in, and buy and sell, the securities mentioned therein or derivatives thereof
(including options). This material may be filed with the Securities and
Exchange Commission (the "SEC") and incorporated by reference into an
effective registration statement previously filed with the SEC under Rule 415
of the Securities Act of 1933, including in cases where the material does not
pertain to securities that are ultimately offered for sale pursuant to such
registration statement. Information contained in this material is current as
of the date appearing on this material only. Information in this material
regarding any assets backing any securities discussed herein supersedes all
prior information regarding such assets. Any information in the material,
whether regarding the assets backing any securities discussed herein or
otherwise, will be superseded by the information contained in any final
prospectus for any securities actually sold to you.
<PAGE>
STRUCTURAL AND COLLATERAL TERM SHEET
COLLATERAL TERM SHEET:
SENIOR LIVING PORTFOLIO
Loan Information
Original Cut-Off Date
PRINCIPAL BALANCE: $226,000,000 $225,437,229
ORIGINATION DATE: February 6, 1998
INTEREST RATE: 6.81%
AMORTIZATION: 25 years
MATURITY DATE: February 1, 2008
BORROWERS: Senior Living Properties, LLC and SLP Illinois,
LLC were formed as special purpose entities in
December 1997 and January 1998.
CALL PROTECTION: Prepayment lockout for 34 months. U.S. Treasury
defeasance permitted from 34 months after the
closing date.
CROSS-COLLATERALIZATION/ No
DEFAULT
ADDITIONAL FINANCING: $10 million subordinate loan secured by mortgages
on the property and revolving lines of credit of
$15 million and a $10 million secured by certain
income and accounts. Additional $10 million
unsecured subordinated loan.
Property Information
SINGLE ASSET/PORTFOLIO: Portfolio
PROPERTY TYPE: Nursing Home and Independent Assisted Living
LOCATION: Illinois and Texas
YEAR BUILT/RENOVATED: 1902-1984 / 1939-1998
THE COLLATERAL The loan is secured by fee mortgages or deeds of
trust encumbering 74 nursing homes and assisted
living properties located in Texas and Illinois,
and security interests in certain income, accounts
and other personal property relating to 13 other
nursing homes and assisting living properties.
SURETY BOND: The loan is insured under an insurance surety bond
issued by ZC Specialty Insurance Company ("ZC")
covering up to a principal amount of $144,549,430,
together with applicable interest thereon. The
obligations of ZC are guaranteed by Centre
Reinsurrance (US) Limited ("Centre Re"). As of
March 1998, Centre Re had claims paying ability of
AA by Standard & Poor's.
PROPERTY MANAGEMENT: Complete Care Services, L.P.
OCCUPANCY: 73%
(10/31/97)
1997 NET OPERATING $30,306,508
INCOME:
UNDERWRITABLE NET CASH $30,402,500
FLOW:
APPRAISED VALUE: $257,300,000
CUT-OFF DATE LOAN/SQ. FT.: $28,461
APPRAISAL DATE: January 1, 1998
Cut-off Date
LTV: 87.6%
BALLOON LTV: 69.1%
DSCR(1): 1.60x
(1) Based on Underwritable Net Cash Flow.
This material is for your private information and we are not soliciting any
action based upon it. This material is not to be construed as an offer to sell
or the solicitation of any offer to buy any security in any jurisdiction where
such an offer or solicitation would be illegal. This material is based on
information that we consider reliable, but we do not represent that it is
accurate or complete and it should not be relied upon as such. By accepting
this material the recipient agrees that it will not distribute or provide the
material to any other person. The information contained in this material may
be based on assumptions regarding market conditions and other matters as
reflected therein. We make no representations regarding the reasonableness of
such assumptions or the likelihood that any of such assumptions will coincide
with actual market conditions or events, and this material should not be
relied upon for such purposes. We and our affiliates, officers, directors,
partners and employees, including persons involved in the preparation or
issuance of this material may, from time to time, have long or short positions
in, and buy and sell, the securities mentioned therein or derivatives thereof
(including options). This material may be filed with the Securities and
Exchange Commission (the "SEC") and incorporated by reference into an
effective registration statement previously filed with the SEC under Rule 415
of the Securities Act of 1933, including in cases where the material does not
pertain to securities that are ultimately offered for sale pursuant to such
registration statement. Information contained in this material is current as
of the date appearing on this material only. Information in this material
regarding any assets backing any securities discussed herein supersedes all
prior information regarding such assets. Any information in the material,
whether regarding the assets backing any securities discussed herein or
otherwise, will be superseded by the information contained in any final
prospectus for any securities actually sold to you.
<PAGE>
STRUCTURAL AND COLLATERAL TERM SHEET
COLLATERAL TERM SHEET:
ALLIANCE PORTFOLIO
Loan Information
Original Cut-Off Date
PRINCIPAL BALANCE: $62,000,000 $61,800,612
ORIGINATION DATE: December 16, 1997
INTEREST RATE: 7.14%
AMORTIZATION: 30 years
HYPERAMORTIZATION After Anticipated Repayment Date, interest rate
increases to 9.143%. All excess cash flow is used
to reduce outstanding principal balance; the
additional 2% deferred and accrues interest at the
increased rate until the principal balance is
zero.
ANTICIPATED REPAYMENT January 1, 2008
DATE:
MATURITY DATE: January 1, 2028
BORROWER/SPONSOR: Alliance DG, a special purpose entity, is an
Illinois limited partnership, an affiliate of
Alliance Holdings, LLC, a privately owned real
estate investment, development, and finance firm
primarily involved in the multifamily housing
industry. Alliance Holdings is based in Chicago,
Illinois and holds a portfolio of more than 13,368
apartment units in Texas, Indiana, California and
Florida.
CALL PROTECTION: Prepayment lockout up to 6 months prior to the
Anticipated Repayment Date. U.S. Treasury
defeasance permitted from five years after closing
date.
CROSS-COLLATERALIZATION/ No
DEFAULT
ADDITIONAL FINANCING: $9.5 million mezzanine partnership loan.
Property Information
SINGLE ASSET/PORTFOLIO: Portfolio
PROPERTY TYPE: Multifamily
LOCATION: Texas
YEAR BUILT/RENOVATED: 1970-1983 / 1996-1998
THE COLLATERAL: 8 multi-family properties located in Dallas and
Houston, Texas, totaling 2,762 units.
PROPERTY MANAGEMENT: Alliance Residential Management LLC
OCCUPANCY(1/11/98): 96%
1997 NET OPERATING INCOME: $6,872,462
UNDERWRITABLE NET CASH $6,639,436
FLOW:
APPRAISED VALUE: $81,910,000
CUT-OFF DATE LOAN/ SQ. FT: $22,375
APPRAISAL DATE: 10/23/97 - 3/23/98
Cut-off Date At ARD(1)
LTV: 75.5% 65.2%
DSCR(2) 1.32x
(1) Anticipated Repayment Date.
(2) Based on Underwritable Net Cash Flow.
This material is for your private information and we are not soliciting any
action based upon it. This material is not to be construed as an offer to sell
or the solicitation of any offer to buy any security in any jurisdiction where
such an offer or solicitation would be illegal. This material is based on
information that we consider reliable, but we do not represent that it is
accurate or complete and it should not be relied upon as such. By accepting
this material the recipient agrees that it will not distribute or provide the
material to any other person. The information contained in this material may
be based on assumptions regarding market conditions and other matters as
reflected therein. We make no representations regarding the reasonableness of
such assumptions or the likelihood that any of such assumptions will coincide
with actual market conditions or events, and this material should not be
relied upon for such purposes. We and our affiliates, officers, directors,
partners and employees, including persons involved in the preparation or
issuance of this material may, from time to time, have long or short positions
in, and buy and sell, the securities mentioned therein or derivatives thereof
(including options). This material may be filed with the Securities and
Exchange Commission (the "SEC") and incorporated by reference into an
effective registration statement previously filed with the SEC under Rule 415
of the Securities Act of 1933, including in cases where the material does not
pertain to securities that are ultimately offered for sale pursuant to such
registration statement. Information contained in this material is current as
of the date appearing on this material only. Information in this material
regarding any assets backing any securities discussed herein supersedes all
prior information regarding such assets. Any information in the material,
whether regarding the assets backing any securities discussed herein or
otherwise, will be superseded by the information contained in any final
prospectus for any securities actually sold to you.
<PAGE>
STRUCTURAL AND COLLATERAL TERM SHEET
COLLATERAL TERM SHEET:
RENAISSANCE TECHWORLD HOTEL
Loan Information
Original Cut-Off Date
PRINCIPAL BALANCE: $62,000,000 $61,924,861
ORIGINATION DATE: March 13, 1998
INTEREST RATE: 7.50%
AMORTIZATION: 25 years
HYPERAMORTIZATION After Anticipated Repayment Date, interest rate
increases to 9.500%. All excess cash flow is used
to reduce outstanding principal balance; the
additional 2% deferred and accrues interest at the
increased rate until the principal balance is
zero.
ANTICIPATED REPAYMENT April 1, 2008
DATE:
MATURITY DATE: April 1, 2023
BORROWER: Techworld Hotel Associates, LLC, a District of
Columbia limited liability company and a special
purpose entity.
CALL PROTECTION: Prepayment lockout up to 7 months prior to
Anticipated Repayment Date. U.S. Treasury
defeasance permitted from 47 months after the
closing date.
CROSS-COLLATERALIZATION/ No
DEFAULT
ADDITIONAL FINANCING: Approximately $6.0 million mezzanine partnership
loan.
Property Information
SINGLE ASSET/PORTFOLIO: Single Asset
PROPERTY TYPE: Hospitality
LOCATION: District of Columbia
YEAR BUILT/RENOVATED: 1989 / 1994
THE COLLATERAL A 15-story, 801 room full service hotel
located at 999 9th Street in Washington D.C. with
a restaurant and a lounge, 66,918 square feet of
meeting and ballroom space and a 307 seat
auditorium.
PROPERTY MANAGEMENT: Renaissance Hotel Operating Company
OCCUPANCY (12/31/97): 71%(3)
1997 NET OPERATING $10,261,495
INCOME:
UNDERWRITABLE NET CASH $8,801,680
FLOW:
APPRAISED VALUE: $125,000,000
CUT-OFF DATE LOAN/ROOMS: $77,309
APPRAISAL DATE: January 28, 1998
Current
LTV: 49.6% At ARD(1)
DSCR(2) 1.59x 39.7%
(1) Anticipated Repayment Date.
(2) Based on Underwritable Net Cash Flow.
(3) Based on a trailing12 month basis.
This material is for your private information and we are not soliciting any
action based upon it. This material is not to be construed as an offer to sell
or the solicitation of any offer to buy any security in any jurisdiction where
such an offer or solicitation would be illegal. This material is based on
information that we consider reliable, but we do not represent that it is
accurate or complete and it should not be relied upon as such. By accepting
this material the recipient agrees that it will not distribute or provide the
material to any other person. The information contained in this material may
be based on assumptions regarding market conditions and other matters as
reflected therein. We make no representations regarding the reasonableness of
such assumptions or the likelihood that any of such assumptions will coincide
with actual market conditions or events, and this material should not be
relied upon for such purposes. We and our affiliates, officers, directors,
partners and employees, including persons involved in the preparation or
issuance of this material may, from time to time, have long or short positions
in, and buy and sell, the securities mentioned therein or derivatives thereof
(including options). This material may be filed with the Securities and
Exchange Commission (the "SEC") and incorporated by reference into an
effective registration statement previously filed with the SEC under Rule 415
of the Securities Act of 1933, including in cases where the material does not
pertain to securities that are ultimately offered for sale pursuant to such
registration statement. Information contained in this material is current as
of the date appearing on this material only. Information in this material
regarding any assets backing any securities discussed herein supersedes all
prior information regarding such assets. Any information in the material,
whether regarding the assets backing any securities discussed herein or
otherwise, will be superseded by the information contained in any final
prospectus for any securities actually sold to you.
<PAGE>
STRUCTURAL AND COLLATERAL TERM SHEET
COLLATERAL TERM SHEET:
MADISON RENAISSANCE
Loan Information
Original Cut-Off Date
PRINCIPAL BALANCE: $49,000,000 $48,942,695
ORIGINATION DATE: March 3, 1998
INTEREST RATE: 7.34%
AMORTIZATION: 25-years
HYPERAMORTIZATION After Anticipated Repayment Date, interest rate
increases to 9.340%. All excess cash flow is used
to reduce outstanding principal balance; the
additional 2% deferred and accrues interest at the
increased rate until the principal balance is
zero.
ANTICIPATED REPAYMENT April 1, 2008
DATE:
MATURITY DATE: April 1, 2023
BORROWER: Madison Hotel LLC, a Washington limited liability
company and a special purpose entity. Madison
Associates, a Washington general partnership, is
the sole member of the Madison Renaissance
Borrower.
CALL PROTECTION: Prepayment lockout up to 6 months prior to
Anticipated Repayment Date. U.S. Treasury
defeasance permitted from 35 months after the
closing date.
CROSS-COLLATERALIZATION/ No
DEFAULT
MEZZANINE LOANS: NAP
Property Information
SINGLE ASSET/PORTFOLIO: Single Asset
PROPERTY TYPE: Hospitality
LOCATION: Washington
YEAR BUILT/RENOVATED: 1983 / 1997-1998
THE COLLATERAL Collateral consists of both fee and
leasehold interests in land underlying a 28-story,
553 room full service hotel. The property includes
three restaurants, 18,283 square feet of meeting
space and underground parking facilities.
PROPERTY MANAGEMENT: R.C. Hedreen Co.
FRANCHISOR: Marriott International, Inc.
OCCUPANCY: 69%(3)
(12/31/97)
1997 NET OPERATING $7,948,850
INCOME:
UNDERWRITABLE NET CASH $7,106,470
FLOW:
APPRAISED VALUE: $83,800,000
CUT-OFF DATE LOAN/ROOMS: $88,504
APPRAISAL DATE: June 1, 1997
Cut-off Date At ARD(1)
LTV: 58.5% 46.4%
DSCR(2) 1.66x
(1) Anticipated Repayment Date.
(2) Based on Underwritable Net Cash Flow.
(3) Based on a trailing 12 month basis.
This material is for your private information and we are not soliciting any
action based upon it. This material is not to be construed as an offer to sell
or the solicitation of any offer to buy any security in any jurisdiction where
such an offer or solicitation would be illegal. This material is based on
information that we consider reliable, but we do not represent that it is
accurate or complete and it should not be relied upon as such. By accepting
this material the recipient agrees that it will not distribute or provide the
material to any other person. The information contained in this material may
be based on assumptions regarding market conditions and other matters as
reflected therein. We make no representations regarding the reasonableness of
such assumptions or the likelihood that any of such assumptions will coincide
with actual market conditions or events, and this material should not be
relied upon for such purposes. We and our affiliates, officers, directors,
partners and employees, including persons involved in the preparation or
issuance of this material may, from time to time, have long or short positions
in, and buy and sell, the securities mentioned therein or derivatives thereof
(including options). This material may be filed with the Securities and
Exchange Commission (the "SEC") and incorporated by reference into an
effective registration statement previously filed with the SEC under Rule 415
of the Securities Act of 1933, including in cases where the material does not
pertain to securities that are ultimately offered for sale pursuant to such
registration statement. Information contained in this material is current as
of the date appearing on this material only. Information in this material
regarding any assets backing any securities discussed herein supersedes all
prior information regarding such assets. Any information in the material,
whether regarding the assets backing any securities discussed herein or
otherwise, will be superseded by the information contained in any final
prospectus for any securities actually sold to you.
<PAGE>
STRUCTURAL AND COLLATERAL TERM SHEET
COLLATERAL TERM SHEET:
THE AIMCO LOANS
Loan Information
Original Cut-Off Date
TOTAL PRINCIPAL BALANCE: $120,000,000 $118,600,711
NUMBER OF LOANS: Thirty Three
RANGE OF PRINCIPAL
BALANCE: $1,160,988 - $9,079,651 $1,147,450 - 8,973,776
ORIGINATION DATE: October 31, 1997
RANGE OF INTEREST RATE: 7.019%
RANGE OF AMORTIZATION: 20 Years
RANGE OF MATURITY DATE: November 1, 2017
BORROWER/SPONSOR: Thirty Three AIMCO Loan Borrowers, each a separate
special purpose entity Delaware limited
partnership
CALL PROTECTION: Prepayment penalty is the greater of 1% or yield
maintenance for the first 227 months and open for
the last 13 months.
CROSS-COLLATERALIZATION/ No
DEFAULT
MEZZANINE LOANS: No
Property Information
SINGLE ASSET/PORTFOLIO: Portfolio
PROPERTY TYPE: Multifamily
LOCATION: Arizona, Georgia, Texas, Florida, Michigan, North
Carolina, and Illinois
YEAR BUILT/RENOVATED: 1964 -1990
THE COLLATERAL Collateral consists of thirty three
multifamily properties ranging in size from 84
units to 487 units, totaling 6,976 units.
PROPERTY MANAGEMENT: AMICO Properties, L.P.
OCCUPANCY: 81% - 100%
(8/18/97 - 12/15/97)
1997 NET OPERATING ($297,532) - $1,762,112
INCOME:
UNDERWRITABLE NET CASH $189,841 - $1,485,628
FLOW:
APPRAISED VALUE: $2,050,000 - $17,200,000
CUT-OFF DATE $17,001
BALANCE/UNITS:
APPRAISAL DATE: October and November 1997
Cut-off Date
LTV: 49% - 60%
DSCR(1) 1.75x - 2.19x
(1) Based on Underwritable Net Cash Flow.
This material is for your private information and we are not soliciting any
action based upon it. This material is not to be construed as an offer to sell
or the solicitation of any offer to buy any security in any jurisdiction where
such an offer or solicitation would be illegal. This material is based on
information that we consider reliable, but we do not represent that it is
accurate or complete and it should not be relied upon as such. By accepting
this material the recipient agrees that it will not distribute or provide the
material to any other person. The information contained in this material may
be based on assumptions regarding market conditions and other matters as
reflected therein. We make no representations regarding the reasonableness of
such assumptions or the likelihood that any of such assumptions will coincide
with actual market conditions or events, and this material should not be
relied upon for such purposes. We and our affiliates, officers, directors,
partners and employees, including persons involved in the preparation or
issuance of this material may, from time to time, have long or short positions
in, and buy and sell, the securities mentioned therein or derivatives thereof
(including options). This material may be filed with the Securities and
Exchange Commission (the "SEC") and incorporated by reference into an
effective registration statement previously filed with the SEC under Rule 415
of the Securities Act of 1933, including in cases where the material does not
pertain to securities that are ultimately offered for sale pursuant to such
registration statement. Information contained in this material is current as
of the date appearing on this material only. Information in this material
regarding any assets backing any securities discussed herein supersedes all
prior information regarding such assets. Any information in the material,
whether regarding the assets backing any securities discussed herein or
otherwise, will be superseded by the information contained in any final
prospectus for any securities actually sold to you.
<PAGE>
DEUTSCHE MORGAN GRENFELL INC.
31 WEST 52ND STREET
NEW YORK, NY 10019
REAL ESTATE FINANCE
Steve Stuart Phone: (212) 469-8444
Director Fax: (212) 469-8518
Eric Schwartz Phone: (212) 469-4542
Director Fax: (212) 469-8518
Greg Hartch Phone: (212) 469-2748
Vice President Fax: (212) 469-8518
Allisson Michaels Phone: (212) 469-7391
Vice President Fax: (212) 469-8518
Janet Whang Phone: (212) 469-3672
Analyst Fax: (212) 469-8518
MORTGAGE UNDERWRITING
Robert Burns Phone: (212) 469-3867
Director Fax: (212) 469-8523
Lotte Potter Phone: (212) 469-2793
Vice President Fax: (212) 469-8523
MORTGAGE TRADING
John Cutting Phone: (212) 469-7730
Director Fax: (212) 469-6933
Scott Wayneburn Phone: (212) 469-7730
Vice President Fax: (212) 469-6933
LEHMAN BROTHERS
THREE WORLD FINANCIAL CENTER, 20TH FLOOR
NEW YORK, NY 10285
REAL ESTATE FINANCE
Paul Hughson Phone: (212) 526-5911
Senior Vice President Fax: (212) 526-3746
Rick Hollander Phone: (212) 526-8327
Vice President Fax: (212) 526-3746
Jim Blakemore Phone: (212) 526-7708
Vice President Fax: (212) 526-3746
MORTGAGE TRADING
Haejin Baek Phone: (212) 526-0001
Senior Vice President Fax: (212) 528-8955
This material is for your private information and we are not soliciting any
action based upon it. This material is not to be construed as an offer to sell
or the solicitation of any offer to buy any security in any jurisdiction where
such an offer or solicitation would be illegal. This material is based on
information that we consider reliable, but we do not represent that it is
accurate or complete and it should not be relied upon as such. By accepting
this material the recipient agrees that it will not distribute or provide the
material to any other person. The information contained in this material may
be based on assumptions regarding market conditions and other matters as
reflected therein. We make no representations regarding the reasonableness of
such assumptions or the likelihood that any of such assumptions will coincide
with actual market conditions or events, and this material should not be
relied upon for such purposes. We and our affiliates, officers, directors,
partners and employees, including persons involved in the preparation or
issuance of this material may, from time to time, have long or short positions
in, and buy and sell, the securities mentioned therein or derivatives thereof
(including options). This material may be filed with the Securities and
Exchange Commission (the "SEC") and incorporated by reference into an
effective registration statement previously filed with the SEC under Rule 415
of the Securities Act of 1933, including in cases where the material does not
pertain to securities that are ultimately offered for sale pursuant to such
registration statement. Information contained in this material is current as
of the date appearing on this material only. Information in this material
regarding any assets backing any securities discussed herein supersedes all
prior information regarding such assets. Any information in the material,
whether regarding the assets backing any securities discussed herein or
otherwise, will be superseded by the information contained in any final
prospectus for any securities actually sold to you.
<PAGE>
ANNEX D
GLOBAL CLEARANCE, SETTLEMENT AND TAX
DOCUMENTATION PROCEDURES
Except in certain limited circumstances, the globally offered GMAC
Commercial Mortgage Securities, Inc. Mortgage Pass-Through Certificates, Series
1998-C1 (the "Global Securities") will be available only in book-entry form.
Investors in the Global Securities may hold such Global Securities through any
of DTC, CEDEL or Euroclear. The Global Securities will be tradeable as home
market instruments in both the European and U.S. domestic markets. Initial
settlement and all secondary trades will settle in same day funds. Capitalized
terms used but not defined in this Annex B have the meanings assigned to them
in the Prospectus Supplement and the Prospectus.
Secondary market trading between investors holding Global Securities
through CEDEL and Euroclear will be conducted in the ordinary way in accordance
with their normal rules and operating procedures and in accordance with
conventional eurobond practice (i.e., seven calendar day settlement).
Secondary market trading between investors holding Global Securities
through DTC will be conducted according to the rules and procedures applicable
to U.S. corporate debt obligations.
Secondary cross-market trading between CEDEL or Euroclear and DTC
Participants holding Certificates will be effected on a
delivery-against-payment basis through the respective Depositaries of CEDEL and
Euroclear (in such capacity) and as DTC Participants.
Non-U.S. holders (as described below) of Global Securities will be subject
to U.S. withholding taxes unless such holders meet certain requirements and
deliver appropriate U.S. tax documents to the securities clearing organizations
or their participants.
INITIAL SETTLEMENT
All Global Securities will be held in book-entry form by DTC in the name
of Cede & Co. as nominee of DTC. Investors' interests in the Global Securities
will be represented through financial institutions acting on their behalf as
direct and indirect Participants in DTC. As a result, CEDEL and Euroclear will
hold positions on behalf of their participants through their respective
Depositaries, which in turn will hold such positions in accounts as DTC
Participants.
Investors electing to hold their Global Securities through DTC will follow
the settlement practices applicable to similar issues of pass-through
certificates. Investors' securities custody accounts will be credited with
their holdings against payment in same-day funds on the settlement date.
Investors electing to hold their Global Securities through CEDEL or
Euroclear accounts will follow the settlement procedures applicable to
conventional eurobonds, except that there will be no temporary global security
and no "lock-up" or restricted period. Global Securities will be credited to
the securities custody accounts on the settlement date against payments in
same-day funds.
SECONDARY MARKET TRADING
Since the purchaser determines the place of delivery, it is important to
establish at the time of the trade where both the purchaser's and seller's
accounts are located to ensure that settlement can be made on the desired value
date.
Trading between DTC Participants. Secondary market trading between DTC
Participants will be settled using the procedures applicable to similar issues
of pass-through certificates in same-day funds.
Trading between CEDEL and/or Euroclear Participants. Secondary market
trading between CEDEL Participants or Euroclear Participants will be settled
using the procedures applicable to conventional eurobonds in same-day funds.
Trading between DTC seller and CEDEL or Euroclear purchaser. When Global
Securities are to be transferred from the account of a DTC Participant to the
account of a CEDEL Participant or a Euroclear
D-1
<PAGE>
Participant, the purchaser will send instructions to CEDEL or Euroclear through
a CEDEL Participant or Euroclear Participant at least one business day prior to
settlement. CEDEL or Euroclear will instruct the respective Depositary, as the
case may be, to receive the Global Securities against payment. Payment will
include interest accrued on the Global Securities from and including the last
coupon payment date to and excluding the settlement date. Payment will then be
made by the respective Depositary to the DTC Participant's account against
delivery of the Global Securities. After settlement has been completed, the
Global Securities will be credited to the respective clearing system and by the
clearing system, in accordance with its usual procedures, to the CEDEL
Participant's or Euroclear Participant's account. The Global Securities credit
will appear the next day (European time) and the cash debit will be back-valued
to, and the interest on the Global Securities will accrue from, the value date
(which would be the preceding day when settlement occurred in New York). If
settlement is not completed on the intended value date (i.e., the trade fails),
the CEDEL or Euroclear cash debit will be valued instead as of the actual
settlement date.
CEDEL Participants and Euroclear Participants will need to make available
to the respective clearing systems the funds necessary to process same-day
funds settlement. The most direct means of doing so is to pre-position funds
for settlement, either from cash on hand or existing lines of credit, as they
would for any settlement occurring within CEDEL or Euroclear. Under this
approach, they may take on credit exposure to CEDEL or Euroclear until the
Global Securities are credited to their accounts one day later.
As an alternative, if CEDEL or Euroclear has extended a line of credit to
them, CEDEL Participants or Euroclear Participants can elect not to
pre-position funds and allow that credit line to be drawn upon the finance
settlement. Under this procedure, CEDEL Participants or Euroclear Participants
purchasing Global Securities would incur overdraft charges for one day,
assuming they cleared the overdraft when the Global Securities were credited to
their accounts. However, interest on the Global Securities would accrue from
the value date. Therefore, in many cases the investment income on the Global
Securities earned during that one day period may substantially reduce or offset
the amount of such overdraft charges, although this result will depend on each
CEDEL Participant's or Euroclear Participant's particular cost of funds.
Since the settlement is taking place during New York business hours, DTC
Participants can employ their usual procedures for sending Global Securities to
the respective Depositary for the benefit of CEDEL Participants or Euroclear
Participants. The sale proceeds will be available to the DTC seller on the
settlement date. Thus, to the DTC Participant a cross-market transaction will
settle no differently than a trade between two DTC Participants.
Trading between CEDEL or Euroclear seller and DTC purchaser. Due to time
zone differences in their favor, CEDEL Participants and Euroclear Participants
may employ their customary procedures for transactions in which Global
Securities are to be transferred by the respective clearing system, through the
respective Depositary, to a DTC Participant. The seller will send instructions
to CEDEL or Euroclear through a CEDEL Participant or Euroclear Participant at
least one business day prior to settlement. In these cases, CEDEL or Euroclear
will instruct the respective Depositary, as appropriate, to deliver the bonds
to the DTC Participant's account against payment. Payment will include interest
accrued on the Global Securities from and including the last coupon payment
date to and excluding the settlement date. The payment will then be reflected
in the account of the CEDEL Participant or Euroclear Participant the following
day, and receipt of the cash proceeds in the CEDEL Participant's or Euroclear
Participant's account would be back-valued to the value date (which would be
the preceding day, when settlement occurred in New York). Should the CEDEL
Participant or Euroclear Participant have a line of credit with its respective
clearing system and elect to be in debit in anticipation of receipt of the sale
proceeds in its account, the back-valuation will extinguish any overdraft
charges incurred over that one-day period. If settlement is not completed on
the intended value date (i.e., the trade fails), receipt of the cash proceeds
in the CEDEL Participant's or Euroclear Participant's account would instead be
valued as of the actual settlement date. Finally, day traders that use CEDEL or
Euroclear and that purchase Global Securities from DTC Participants for
delivery to CEDEL Participants or Euroclear Participants should note that these
trades would automatically fail on the sale side unless affirmative action were
taken. At least three techniques should be readily available to eliminate this
potential problem:
D-2
<PAGE>
(a) borrowing through CEDEL or Euroclear for one day (until the purchase
side of the day trade is reflected in their CEDEL or Euroclear accounts) in
accordance with the clearing system's customary procedures;
(b) borrowing the Global Securities in the U.S. from a DTC Participant no
later than one day prior to settlement, which would give the Global Securities
sufficient time to be reflected in their CEDEL or Euroclear account in order to
settle the sale side of the trade; or
(c) staggering the value dates for the buy and sell sides of the trade so
that the value date for the purchase from the DTC Participant is at least one
day prior to the value date for the sale to the CEDEL Participant or Euroclear
Participant.
CERTAIN U.S. FEDERAL INCOME TAX DOCUMENTATION REQUIREMENTS
A Beneficial Owner of Global Securities holding securities through CEDEL
or Euroclear (or through DTC if the holder has an address outside the U.S.)
will be subject to the 30% U.S. withholding tax that generally applies to
payments of interest (including original issue discount) on registered debt
issued by U.S. Persons, unless (i) each clearing system, bank or other
financial institution that holds customers' securities in the ordinary course
of its trade or business in the chain of intermediaries between such Beneficial
Owner and the U.S. entity required to withhold tax complies with applicable
certification requirements and (ii) such beneficial owner takes one of the
following steps to obtain an exemption or reduced tax rate:
Exemption for non-U.S. Persons (Form W-8). Beneficial Owners of
Certificates that are non-U.S. Persons can obtain a complete exemption from the
withholding tax by filing a signed Form W-8 (Certificate of Foreign Status). If
the information shown on Form W-8 changes, a new Form W-8 must be filed within
30 days of such change.
Exemption for non-U.S. Persons with effectively connected income (Form
4224). A non-U.S. Person, including a non-U.S. corporation or bank with a U.S.
branch, for which the interest income is effectively connected with its conduct
of a trade or business in the United States can obtain an exemption from the
withholding tax by filing Form 4224 (Exemption from Withholding of Tax on
Income Effectively Connected with the Conduct of a Trade or Business in the
United States).
Exemption or reduced rate for non-U.S. Persons resident in treaty
countries (Form 1001). Non-U.S. Persons that are Beneficial Owners residing in
a country that has a tax treaty with the United States can obtain an exemption
or reduced tax rate (depending on the treaty terms) by filing Form 1001
(Ownership, Exemption or Reduced Rate Certificate). If the treaty provides only
for a reduced rate, withholding tax will be imposed at that rate unless the
filer alternatively files Form W-8. Form 1001 may be filed by the Beneficial
Owner or his agent.
Exemption for U.S. Persons (Form W-9). U.S. Persons can obtain a complete
exemption from the withholding tax by filing Form W-9 (Payer's Request for
Taxpayer Identification Number and Certification).
U.S. Federal Income Tax Reporting Procedure. The Beneficial Owner of a
Global Security or, in the case of a Form 1001 or a Form 4224 filer, his agent,
files by submitting the appropriate form to the person through whom it holds
(the clearing agency, in the case of persons holding directly on the books of
the clearing agency). Form W-8 and Form 1001 are effective for three calendar
years and Form 4224 is effective for one calendar year.
The term "U.S. Person" means (i) a citizen or resident of the United
States, (ii) a corporation or partnership organized in or under the laws of the
United States or any political subdivision thereof or (iii) an estate the
income of which is includable in gross income for United States tax purposes,
regardless of its source or a trust if a court within the United States is able
to exercise primary supervision of the administration of the trust and one or
more United States fiduciaries have the authority to control all substantial
decisions of the trust. This summary does not deal with all aspects of U.S.
Federal income tax withholding that may be relevant to foreign holders of the
Global Securities. Investors are advised to consult their own tax advisors for
specific tax advice concerning their holding and disposing of the Global
Securities.
D-3
<PAGE>
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
MORTGAGE PASS-THROUGH CERTIFICATES
The mortgage pass-through certificates (the "Offered Certificates")
offered hereby and by the supplements hereto (each, a "Prospectus Supplement")
will be offered from time to time in series. The Offered Certificates of any
series, together with any other mortgage pass-through certificates of such
series, are collectively referred to herein as the "Certificates".
Each series of Certificates will represent in the aggregate the entire
beneficial ownership interest in a trust fund (with respect to any series, the
"Trust Fund") to be formed by GMAC Commercial Mortgage Securities, Inc. (the
"Depositor") and consisting primarily of a segregated pool (a "Mortgage Asset
Pool") of the Mortgage Loans (as defined in the related Prospectus Supplement),
mortgage-backed securities ("MBS") that evidence interests in, or that are
secured by pledges of, one or more of various types of multifamily or
commercial mortgage loans, or a combination of Mortgage Loans and MBS
(collectively, "Mortgage Assets"). If so specified in the related Prospectus
Supplement, the Trust Fund for a series of Certificates may include letters of
credit, insurance policies, guarantees, reserve funds or other types of credit
support, or any combination thereof, and also interest rate exchange agreements
and other financial assets, or any combination thereof. See "Description of the
Trust Funds", "Description of the Certificates" and "Description of Credit
Support".
The yield on each class of Certificates of a series will be affected by,
among other things, the rate of payment of principal (including prepayments) on
the Mortgage Assets in the related Trust Fund and the timing of receipt of such
payments as described herein and in the related Prospectus Supplement. See
"Yield and Maturity Considerations". A Trust Fund may be subject to early
termination under the circumstances described herein and in the related
Prospectus Supplement. See "Description of the Certificates--Termination;
Retirement of the Certificates".
Retain this Prospectus for future reference. This Prospectus may not be
used to consummate sales of the Offered Certificates of any series unless
accompanied by the Prospectus Supplement for such series.
(cover continued on next page)
--------------
PROCEEDS OF THE ASSETS IN THE TRUST FUND ARE THE SOLE SOURCE OF PAYMENTS
ON THE OFFERED CERTIFICATES. THE OFFERED CERTIFICATES DO NOT REPRESENT AN
INTEREST IN OR OBLIGATION OF THE DEPOSITOR, THE MASTER SERVICER, GMAC
COMMERCIAL MORTGAGE CORPORATION OR ANY OF THEIR AFFILIATES. NEITHER THE OFFERED
CERTIFICATES NOR THE MORTGAGE ASSETS WILL BE GUARANTEED OR INSURED BY THE
DEPOSITOR, THE MASTER SERVICER, GMAC COMMERCIAL MORTGAGE CORPORATION OR ANY OF
THEIR AFFILIATES OR, UNLESS OTHERWISE SPECIFIED IN THE RELATED PROSPECTUS
SUPPLEMENT, BY ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
PROSPECTIVE INVESTORS SHOULD REVIEW THE INFORMATION APPEARING ON PAGE 11 HEREIN
UNDER THE CAPTION "RISK FACTORS" AND SUCH INFORMATION AS MAY BE SET FORTH UNDER
THE CAPTION "RISK FACTORS" IN THE RELATED PROSPECTUS SUPPLEMENT BEFORE
PURCHASING ANY OFFERED CERTIFICATE.
--------------
The Offered Certificates of any series may be offered through one or more
different methods, including offerings through underwriters, as described under
"Method of Distribution" and in the related Prospectus Supplement.
The date of this Prospectus is December 17, 1997
<PAGE>
(cover continued)
There will be no secondary market for the Offered Certificates of any
series prior to the offering thereof. There can be no assurance that a
secondary market for any Offered Certificates will develop or, if it does
develop, that it will continue. The Certificates will not be listed on any
securities exchange.
As described in the related Prospectus Supplement, the Certificates of
each series, including the Offered Certificates of such series, may consist of
one or more classes of Certificates that: (i) provide for the accrual of
interest thereon based on a fixed, variable or adjustable interest rate; (ii)
are senior or subordinate to one or more other classes of Certificates in
entitlement to certain distributions on the Certificates; (iii) are entitled to
distributions of principal, with disproportionate, nominal or no distributions
of interest; (iv) are entitled to distributions of interest, with
disproportionate, nominal or no distributions of principal; (v) provide for
distributions of interest thereon or principal thereof that commence only
following the occurrence of certain events, such as the retirement of one or
more other classes of Certificates of such series; (vi) provide for
distributions of principal thereof to be made, from time to time or for
designated periods, at a rate that is faster (and, in some cases, substantially
faster) or slower (and, in some cases, substantially slower) than the rate at
which payments or other collections of principal are received on the Mortgage
Assets in the related Trust Fund; or (vii) provide for distributions of
principal thereof to be made, subject to available funds, based on a specified
principal payment schedule or other methodology. Distributions in respect of
the Certificates of each series will be made on a monthly, quarterly,
semi-annual, annual or other periodic basis as specified in the related
Prospectus Supplement. See "Description of the Certificates".
If so provided in the related Prospectus Supplement, one or more elections
may be made to treat the related Trust Fund or a designated portion thereof as
a "real estate mortgage investment conduit" (each, a "REMIC") for federal
income tax purposes. If applicable, the Prospectus Supplement for a series of
Certificates will specify which class or classes of such series of Certificates
will be considered to be regular interests in the related REMIC and which class
of Certificates or other interests will be designated as the residual interest
in the related REMIC. See "Certain Federal Income Tax Consequences".
2
<PAGE>
PROSPECTUS SUPPLEMENT
As more particularly described herein, the Prospectus Supplement relating
to each series of Offered Certificates will, among other things, set forth, as
and to the extent appropriate: (i) a description of the class or classes of
such Offered Certificates, including the payment provisions with respect to
each such class, the aggregate principal amount, if any, of each such class,
the rate at which interest accrues from time to time, if at all, with respect
to each such class or the method of determining such rate, and whether interest
with respect to each such class will accrue from time to time on its aggregate
principal amount, if any, or on a specified notional amount, if at all; (ii)
information with respect to any other classes of Certificates of the same
series; (iii) the respective dates on which distributions are to be made; (iv)
information as to the assets, including the Mortgage Assets, constituting the
related Trust Fund (all such assets, with respect to the Certificates of any
series, the "Trust Assets"); (v) the circumstances, if any, under which the
related Trust Fund may be subject to early termination; (vi) additional
information with respect to the method of distribution of such Offered
Certificates; (vii) whether one or more REMIC elections will be made and the
designation of the "regular interests" and "residual interests" in each REMIC
to be created; (viii) the initial percentage ownership interest in the related
Trust Fund to be evidenced by each class of Certificates of such series; (ix)
information concerning the Trustee (as defined herein) of the related Trust
Fund; (x) if the related Trust Fund includes Mortgage Loans, information
concerning the Master Servicer and any Special Servicer (each as defined
herein) of such Mortgage Loans; (xi) information as to the nature and extent of
subordination of any class of Certificates of such series, including a class of
Offered Certificates; and (xii) whether such Offered Certificates will be
initially issued in definitive or book-entry form.
AVAILABLE INFORMATION
The Depositor has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement (of which this Prospectus forms a part)
under the Securities Act of 1933, as amended, with respect to the Offered
Certificates. This Prospectus and the Prospectus Supplement relating to each
series of Offered Certificates contain summaries of the material terms of the
documents referred to herein and therein, but do not contain all of the
information set forth in the Registration Statement pursuant to the rules and
regulations of the Commission. For further information, reference is made to
such Registration Statement and the exhibits thereto. Such Registration
Statement and exhibits can be inspected and copied at prescribed rates at the
public reference facilities maintained by the Commission at its Public
Reference Section, 450 Fifth Street, N.W., Washington, D.C. 20549, and at its
Midwest Regional Offices located as follows: Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661-2511; and Northeast Regional
Office, Seven World Trade Center, Suite 1300, New York, New York 10048. The
Commission maintains a Web site at http://www.sec.gov containing reports, proxy
and information statements and other information regarding registrants,
including the Depositor, that file electronically with the Commission.
No dealer, salesman, or any other person has been authorized to give any
information, or to make any representations, other than those contained in this
Prospectus or any related Prospectus Supplement, and, if given or made, such
information or representations must not be relied upon as having been
authorized by the Depositor or any dealer, salesman, or any other person.
Neither the delivery of this Prospectus or any related Prospectus Supplement
nor any sale made hereunder or thereunder shall under any circumstances create
an implication that there has been no change in the information herein or
therein since the date hereof. This Prospectus and any related Prospectus
Supplement are not an offer to sell or a solicitation of an offer to buy any
security in any jurisdiction in which it is unlawful to make such offer or
solicitation.
The Master Servicer or another specified person will cause to be provided
to registered holders of the Offered Certificates of each series periodic
unaudited reports concerning the related Trust Fund.
3
<PAGE>
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
There are incorporated herein by reference all documents and reports filed
or caused to be filed by the Depositor with respect to a Trust Fund pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act of 1934, as amended,
prior to the termination of an offering of Offered Certificates evidencing
interests therein. The Depositor will provide or cause to be provided without
charge to each person to whom this Prospectus is delivered in connection with
the offering of one or more classes of Offered Certificates, upon written or
oral request of such person, a copy of any or all documents or reports
incorporated herein by reference, in each case to the extent such documents or
reports relate to one or more of such classes of such Offered Certificates,
other than the exhibits to such documents (unless such exhibits are
specifically incorporated by reference in such documents). Requests to the
Depositor should be directed in writing to its principal executive offices at
650 Dresher Road, Horsham, Pennsylvania 19044, or by telephone at (215)
328-3480.
4
<PAGE>
SUMMARY OF PROSPECTUS
The following summary of certain pertinent information is qualified in its
entirety by reference to the more detailed information appearing elsewhere in
this Prospectus and by reference to the information with respect to each series
of Certificates contained in the Prospectus Supplement to be prepared and
delivered in connection with the offering of Offered Certificates of such
series. An Index of Principal Definitions is included at the end of this
Prospectus.
SECURITIES OFFERED.......... Mortgage pass-through certificates.
DEPOSITOR................... GMAC Commercial Mortgage Securities, Inc., a
wholly-owned subsidiary of GMAC Commercial
Mortgage Corporation ("GMACCM"). See "The
Depositor".
TRUSTEE..................... The trustee (the "Trustee") for each series of
Certificates will be named in the related
Prospectus Supplement. See "The Pooling and
Servicing Agreements--The Trustee".
MASTER SERVICE.............. If a Trust Fund includes Mortgage Loans, then
the servicer or the master servicer (each, a
"Master Servicer") for the corresponding series
of Certificates will be named in the related
Prospectus Supplement. The Master Servicer for
any series of Certificates may be GMACCM or
another affiliate of the Depositor. The Master
Servicer may also be the Special Servicer for
such series and, in such dual capacity, would be
referred to as the "Servicer". See "GMAC
Commercial Mortgage Corporation" and "The Pooling
and Servicing Agreements--Certain Matters
Regarding the Master Servicer and the Depositor".
SPECIAL SERVICER............ If a Trust Fund includes Mortgage Loans, then
any special servicers (each, a "Special
Servicer") for the corresponding series of
Certificates will be named, or the circumstances
under which a Special Servicer may be appointed
will be described, in the related Prospectus
Supplement. A Special Servicer for any series of
Certificates may be the Master Servicer or an
affiliate of the Depositor or the Master
Servicer. See "The Pooling and Servicing
Agreements--Special Servicers".
MBS ADMINISTRATOR........... If a Trust Fund includes MBS, then the entity
responsible for administering such MBS (the "MBS
Administrator") will be named in the related
Prospectus Supplement. If an entity other than
the Trustee and the Master Servicer is the MBS
Administrator, such entity will be herein
referred to as the "Manager". The Manager for any
series of Certificates may be GMACCM or another
affiliate of the Depositor.
THE MORTGAGE ASSETS......... The Mortgage Assets will be the primary asset
of any Trust Fund. The Mortgage Assets with
respect to each series of Certificates will, in
general, consist of a pool of Mortgage Loans
secured by first or junior liens on, as described
herein, multifamily residential properties or
commercial properties. If so specified in the
related Prospectus Supplement, a Trust Fund
5
<PAGE>
may include Mortgage Loans secured by liens on
real estate projects under construction. The
Mortgage Loans will not be guaranteed or insured
by the Depositor, GMACCM or any of their
affiliates or, unless otherwise provided in the
related Prospectus Supplement, by any
governmental agency or instrumentality or by any
other person. If so specified in the related
Prospectus Supplement, some Mortgage Loans may
be delinquent or non-performing as of the date
the related Trust Fund is formed.
As and to the extent described in the related
Prospectus Supplement, a Mortgage Loan (i) may
provide for no accrual of interest or for
accrual of interest thereon at an interest rate
(a "Mortgage Rate") that is fixed over its term
or that adjusts from time to time, or that may
be converted at the borrower's election from an
adjustable to a fixed Mortgage Rate, or from a
fixed to an adjustable Mortgage Rate, (ii) may
provide for level payments to maturity or for
payments that adjust from time to time to
accommodate changes in the Mortgage Rate or to
reflect the occurrence of certain events, and
may permit negative amortization, (iii) may be
fully amortizing or may be partially amortizing
or non-amortizing, with a balloon payment due on
its stated maturity date, (iv) may prohibit over
its term or for a certain period prepayments
and/or require payment of a premium or a yield
maintenance penalty in connection with certain
prepayments and (v) may provide for payments of
principal, interest or both, on due dates that
occur monthly, quarterly, semi-annually or at
such other interval as is specified in the
related Prospectus Supplement. Unless otherwise
provided in the related Prospectus Supplement,
each Mortgage Loan will have had an original
term to maturity of not more than 40 years.
Unless otherwise provided in the related
Prospectus Supplement, no Mortgage Loan will
have been originated by the Depositor; however,
some or all of the Mortgage Loans in any Trust
Fund may have been originated by GMACCM or
another affiliate of the Depositor. See
"Description of the Trust Funds--Mortgage
Loans".
If and to the extent specified in the related
Prospectus Supplement, the Mortgage Assets with
respect to a series of Certificates may also
include, or consist of, MBS, provided that each
MBS will evidence an interest in, or will be
secured by a pledge of, one or more mortgage
loans that conform to the descriptions of the
Mortgage Loans contained herein. See
"Description of the Trust Funds--MBS".
THE CERTIFICATES............ Each series of Certificates will be issued in
one or more classes pursuant to a pooling and
servicing agreement or other agreement specified
in the related Prospectus Supplement (in either
case, a "Pooling And Servicing Agreement") and
will represent in the aggregate the entire
beneficial ownership interest in the related
Trust Fund.
6
<PAGE>
As described in the related Prospectus
Supplement, the Certificates of each series,
including the Offered Certificates of such
series, may consist of one or more classes of
Certificates that, among other things: (i) are
senior (collectively, "Senior Certificates") or
subordinate (collectively, "Subordinate
Certificates") to one or more other classes of
Certificates in entitlement to certain
distributions on the Certificates; (ii) are
entitled to distributions of principal, with
disproportionate, nominal or no distributions of
interest (collectively, "Stripped Principal
Certificates"); (iii) are entitled to
distributions of interest, with
disproportionate, nominal or no distributions of
principal (collectively, "Stripped Interest
Certificates"); (iv) provide for distributions
of interest thereon or principal thereof that
commence only after the occurrence of certain
events, such as the retirement of one or more
other classes of Certificates of such series;
(v) provide for distributions of principal
thereof to be made, from time to time or for
designated periods, at a rate that is faster
(and, in some cases, substantially faster) or
slower (and, in some cases, substantially
slower) than the rate at which payments or other
collections of principal are received on the
Mortgage Assets in the related Trust Fund; (vi)
provide for distributions of principal thereof
to be made, subject to available funds, based on
a specified principal payment schedule or other
methodology; or (vii) provide for distribution
based on collections on the Mortgage Assets in
the related Trust Fund attributable to
prepayment premiums, yield maintenance penalties
or equity participations.
Each class of Certificates, other than certain
classes of Stripped Interest Certificates and
certain classes of REMIC Residual Certificates
(as defined herein), will have an initial stated
principal amount (a "Certificate Balance"); and
each class of Certificates, other than certain
classes of Stripped Principal Certificates and
certain classes of REMIC Residual Certificates,
will accrue interest on its Certificate Balance
or, in the case of certain classes of Stripped
Interest Certificates, on a notional amount (a
"Notional Amount") based on a fixed, variable or
adjustable interest rate (a "Pass-Through
Rate"). The related Prospectus Supplement will
specify the Certificate Balance, Notional Amount
and/or Pass-Through Rate (or, in the case of a
variable or adjustable Pass-Through Rate, the
method for determining such rate), as
applicable, for each class of Offered
Certificates.
If so specified in the related Prospectus
Supplement, a class of Certificates may have two
or more component parts, each having
characteristics that are otherwise described
herein as being attributable to separate and
distinct classes.
The Certificates will not be guaranteed or
insured by the Depositor, by the Master
Servicer, by GMACCM or any of their affiliates,
by any governmental agency or instrumentality or
by any other person or entity, unless otherwise
provided in the related Prospectus Supplement.
See "Risk Factors--Limited Obligations".
7
<PAGE>
DISTRIBUTIONS OF INTEREST ON THE
CERTIFICATES............... Interest on each class of Offered Certificates
(other than certain classes of Stripped Principal
Certificates and certain classes of REMIC
Residual Certificates) of each series will accrue
at the applicable Pass-Through Rate on the
Certificate Balance or, in the case of certain
classes of Stripped Interest Certificates, the
Notional Amount thereof outstanding from time to
time and will be distributed to
Certificateholders as provided in the related
Prospectus Supplement (each of the specified
dates on which distributions are to be made, a
"Distribution Date"). Distributions of interest
with respect to one or more classes of
Certificates (collectively, "Accrual
Certificates") may not commence until the
occurrence of certain events, such as the
retirement of one or more other classes of
Certificates, and interest accrued with respect
to a class of Accrual Certificates prior to the
occurrence of such an event will either be added
to the Certificate Balance thereof or otherwise
deferred as described in the related Prospectus
Supplement. Distributions of interest with
respect to one or more classes of Certificates
may be reduced to the extent of certain
delinquencies, losses and other contingencies
described herein and in the related Prospectus
Supplement. See "Risk Factors--Yield and
Prepayment Considerations", "Yield and Maturity
Considerations--Certain Shortfalls in
Collections of Interest" and "Description of the
Certificates--Distributions of Interest on the
Certificates".
DISTRIBUTIONS OF PRINCIPAL OF THE
CERTIFICATES............... As and to the extent described in each
Prospectus Supplement, distributions of principal
with respect to the related series of
Certificates will be made on each Distribution
Date to the holders of the class or classes of
Certificates of such series entitled thereto
until the Certificate Balances of such
Certificates have been reduced to zero.
Distributions of principal with respect to one or
more classes of Certificates: (i) may be made at
a rate that is faster (and, in some cases,
substantially faster) or slower (and, in some
cases, substantially slower) than the rate at
which payments or other collections of principal
are received on the Mortgage Assets in the
related Trust Fund; (ii) may not commence until
the occurrence of certain events, such as the
retirement of one or more other classes of
Certificates of the same series; (iii) may be
made, subject to certain limitations, based on a
specified principal payment schedule; or (iv) may
be contingent on the specified principal payment
schedule for another class of the same series and
the rate at which payments and other collections
of principal on the Mortgage Assets in the
related Trust Fund are received. Unless otherwise
specified in the related Prospectus Supplement,
distributions of principal of any class of
Offered Certificates will be made on a pro rata
basis among all of the Certificates of such
class. See "Description of the
Certificates--Distributions of Principal of the
Certificates".
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CREDIT SUPPORT AND CASH FLOW
AGREEMENTS................. If so provided in the related Prospectus
Supplement, partial or full protection against
certain defaults and losses on the Mortgage
Assets in the related Trust Fund may be provided
to one or more classes of Certificates of the
related series in the form of subordination of
one or more other classes of Certificates of such
series, which other classes may include one or
more classes of Offered Certificates, or by one
or more other types of credit support, such as a
letter of credit, insurance policy, guarantee,
reserve fund or another type of credit support,
or a combination thereof (any such coverage with
respect to the Certificates of any series,
"Credit Support"). If so provided in the related
Prospectus Supplement, a Trust Fund may include:
(i) guaranteed investment contracts pursuant to
which moneys held in the funds and accounts
established for the related series will be
invested at a specified rate; or (ii) certain
other agreements, such as interest rate exchange
agreements, interest rate cap or floor
agreements, or other agreements designed to
reduce the effects of interest rate fluctuations
on the Mortgage Assets or on one or more classes
of Certificates (any such agreement, in the case
of clause (i) or (ii), a "Cash Flow Agreement").
Certain relevant information regarding any
applicable Credit Support or Cash Flow Agreement
will be set forth in the Prospectus Supplement
for a series of Offered Certificates. See "Risk
Factors--Credit Support Limitations",
"Description of the Trust Funds--Credit Support"
and "--Cash Flow Agreements" and "Description of
Credit Support".
ADVANCES.................... If and to the extent provided in the related
Prospectus Supplement, if a Trust Fund includes
Mortgage Loans, the Master Servicer, a Special
Servicer, the Trustee, any provider of Credit
Support and/or any other specified person may be
obligated to make, or have the option of making,
certain advances with respect to delinquent
scheduled payments of principal and/or interest
on such Mortgage Loans. Any such advances made
with respect to a particular Mortgage Loan will
be reimbursable from subsequent recoveries in
respect of such Mortgage Loan and otherwise to
the extent described herein and in the related
Prospectus Supplement. See "Description of the
Certificates-Advances in respect of
Delinquencies". If and to the extent provided in
the Prospectus Supplement for a series of
Certificates, any entity making such advances
may be entitled to receive interest thereon for
a specified period during which certain or all
of such advances are outstanding, payable from
amounts in the related Trust Fund. See
"Description of the Certificates-Advances in
Respect of Delinquencies". If a Trust Fund
includes MBS, any comparable advancing
obligation of a party to the related Pooling and
Servicing Agreement, or of a party to the
related MBS Agreement, will be described in the
related Prospectus Supplement.
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OPTIONAL TERMINATION........ The Master Servicer, the Depositor or, if
specified in the related Prospectus Supplement,
the holder of the residual interest in a REMIC
may at its option either (i) effect early
retirement of a series of Certificates through
the purchase of the assets in the related Trust
Fund or (ii) purchase, in whole but not in part,
the Certificates specified in the related
Prospectus Supplement; in each case under the
circumstances and in the manner set forth herein
under "Description of the
Certificates--Termination; Retirement of
Certificates" and in the related Prospectus
Supplement.
CERTAIN FEDERAL INCOME TAX
CONSEQUENCES............... The Certificates of each series will constitute
"regular interests" ("REMIC Regular
Certificates") and "residual interests" ("REMIC
Residual Certificates") in a Trust Fund, or a
designated portion thereof, treated as a REMIC
under Sections 860A through 860G of the Internal
Revenue Code of 1986 (the "Code").
Investors are advised to consult their tax
advisors and to review "Certain Federal Income
Tax Consequences" herein and in the related
Prospectus Supplement.
ERISA CONSIDERATIONS........ Fiduciaries of employee benefit plans and
certain other retirement plans and arrangements,
including individual retirement accounts,
annuities, Keogh plans, and collective investment
funds and separate accounts (and, as applicable,
insurance company general accounts) in which such
plans, accounts, annuities or arrangements are
invested, that are subject to the Employee
Retirement Income Security Act of 1974, as
amended ("ERISA"), or Section 4975 of the Code,
should review with their legal advisors whether
the purchase or holding of Offered Certificates
could give rise to a transaction that is
prohibited or is not otherwise permissible either
under ERISA or Section 4975 of the Code. See
"ERISA Considerations" herein and in the related
Prospectus Supplement.
LEGAL INVESTMENT............ The Offered Certificates will constitute
"Mortgage Related Securities" for purposes of the
Secondary Mortgage Market Enhancement Act of
1984, as amended ("SMMEA"), only if so specified
in the related Prospectus Supplement. Investors
whose investment authority is subject to legal
restrictions should consult their legal advisors
to determine whether and to what extent the
Offered Certificates constitute legal investments
for them. See "Legal Investment" herein and in
the related Prospectus Supplement.
RATING...................... At their respective dates of issuance, each
class of Offered Certificates will be rated not
lower than investment grade by one or more
nationally recognized statistical rating agencies
(each, a "Rating Agency"). See "Rating" herein
and in the related Prospectus Supplement.
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RISK FACTORS
In considering an investment in the Offered Certificates of any series,
investors should consider, among other things, the following risk factors and
any other factors set forth under the heading "Risk Factors" in the related
Prospectus Supplement. In general, to the extent that the factors discussed
below pertain to or are influenced by the characteristics or behavior of
Mortgage Loans included in a particular Trust Fund, they would similarly
pertain to and be influenced by the characteristics or behavior of the mortgage
loans underlying any MBS included in such Trust Fund.
LIMITED LIQUIDITY
There can be no assurance that a secondary market for the Offered
Certificates of any series will develop or, if it does develop, that it will
provide holders with liquidity of investment or that it will continue for as
long as such Certificates remain outstanding. The Prospectus Supplement for any
series of Offered Certificates may indicate that an underwriter specified
therein intends to establish a secondary market in such Offered Certificates;
however, no underwriter will be obligated to do so. The Certificates will not
be listed on any securities exchange.
LIMITED OBLIGATIONS
The Certificates will not represent an interest in or obligation of the
Depositor, the Master Servicer, GMACCM or any of their affiliates. The only
obligations of the foregoing entities with respect to the Certificates or the
Mortgage Assets will be the obligations (if any) of the Depositor and the
Master Servicer pursuant to certain limited representations and warranties made
with respect to the Mortgage Assets, the Master Servicer's servicing
obligations under the related Pooling and Servicing Agreement (including its
limited obligation to make certain advances in the event of delinquencies on
the Mortgage Loans, but only to the extent deemed recoverable) and pursuant to
the terms of any MBS, and such other limited obligations of the Master Servicer
and the Depositor as may be described in the related Prospectus Supplement.
Neither the Certificates nor the underlying Mortgage Assets will be guaranteed
or insured by the Depositor, the Master Servicer, GMACCM or any of their
affiliates or, unless otherwise specified in the related Prospectus Supplement,
by any governmental agency or instrumentality. Proceeds of the Trust Assets
included in the related Trust Fund for each series of Certificates (including
the Mortgage Assets, any fund or instrument constituting Credit Support and any
Cash Flow Agreements) will be the sole source of payments on the Certificates,
and there will be no recourse to the Depositor, the Master Servicer, GMACCM or
any other entity in the event that such proceeds are insufficient or otherwise
unavailable to make all payments provided for under the Certificates.
CREDIT SUPPORT LIMITATIONS
The Prospectus Supplement for a series of Certificates will describe any
Credit Support provided with respect thereto. Use of Credit Support will be
subject to the conditions and limitations described herein and in the related
Prospectus Supplement. Moreover, such Credit Support may not cover all
potential losses; for example, Credit Support may or may not cover loss by
reason of fraud or negligence by a mortgage loan originator or other parties.
A series of Certificates may include one or more classes of Subordinate
Certificates (which may include Offered Certificates), if so provided in the
related Prospectus Supplement. Although subordination is intended to reduce the
likelihood of temporary shortfalls and ultimate losses to holders of Senior
Certificates, the amount of subordination will be limited and may decline under
certain circumstances. In addition, if principal payments on one or more
classes of Offered Certificates of a series are made in a specified order of
priority, any related Credit Support may be exhausted before the principal of
the later paid classes of Offered Certificates of such series has been repaid
in full. As a result, the impact of losses and shortfalls experienced with
respect to the Mortgage Assets may fall primarily upon those classes of Offered
Certificates having a later right of payment. Moreover, if a form of Credit
Support covers the Offered Certificates of more than one series and losses on
the related Mortgage Assets exceed the amount of such Credit Support, it is
possible that the holders of Offered Certificates of one (or more) such series
will be disproportionately benefited by such Credit Support to the detriment of
the holders of Offered Certificates of one (or more) other such series.
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The amount of any applicable Credit Support supporting one or more classes
of Offered Certificates, including the subordination of one or more classes of
Certificates, will be determined on the basis of criteria established by each
Rating Agency rating such classes of Certificates based on an assumed level of
defaults, delinquencies and losses on the underlying Mortgage Assets and
certain other factors. There can, however, be no assurance that the loss
experience on the related Mortgage Assets will not exceed such assumed levels.
See "Description of the Certificates--Allocation of Losses and Shortfalls" and
"Description of Credit Support".
YIELD AND PREPAYMENT CONSIDERATIONS
The yield to maturity of the Offered Certificates of each series will
depend on the rate and timing of principal payments (including prepayments,
liquidations due to defaults, and repurchases for breaches of representations
and warranties or document defects) on the Mortgage Loans and the price paid by
Certificateholders. Such yield may be adversely affected by a higher or lower
than anticipated rate of prepayments on the related Mortgage Loans. The yield
to maturity on Stripped Interest Certificates and Stripped Principal
Certificates will be extremely sensitive to the rate of prepayments on the
related Mortgage Loans. In addition, the yield to maturity on certain other
types of classes of Certificates, including Accrual Certificates, Certificates
with a Pass-Through Rate which fluctuates inversely with an index or certain
other classes in a series including more than one class of Certificates, may be
relatively more sensitive to the rate of prepayment on the related Mortgage
Loans than other classes of Certificates. The rate of principal payments on
pools of mortgage loans varies among pools and from time to time is influenced
by a variety of economic, demographic, geographic, social, tax, legal and other
factors, including prevailing mortgage market interest rates and the particular
terms of the Mortgage Loans (e.g., provisions that prohibit voluntary
prepayments during specified periods or impose penalties in connection
therewith). There can be no assurance as to the actual rate of prepayment on
the Mortgage Loans in any Trust Fund or that such rate of prepayment will
conform to any model described herein or in any Prospectus Supplement. See
"Yield and Maturity Considerations" herein.
INVESTMENT IN COMMERCIAL AND MULTIFAMILY MORTGAGE LOANS
A description of certain material considerations associated with
investments in mortgage loans is included herein under "Certain Legal Aspects
of Mortgage Loans". Mortgage loans made on the security of multifamily or
commercial property may have a greater likelihood of delinquency and
foreclosure, and a greater likelihood of loss in the event thereof, than loans
made on the security of an owner-occupied single-family property. See
"Description of the Trust Funds--Mortgage Loans--Default and Loss
Considerations with Respect to the Mortgage Loans". The ability of a borrower
to repay a loan secured by an income-producing property typically is dependent
primarily upon the successful operation of such property rather than upon the
existence of independent income or assets of the borrower; thus, the value of
an income-producing property is directly related to the net operating income
derived from such property. If the net operating income of the property is
reduced (for example, if rental or occupancy rates decline or real estate tax
rates or other operating expenses increase), the borrower's ability to repay
the loan may be impaired. A number of the Mortgage Loans may be secured by
liens on owner-occupied Mortgaged Properties or on Mortgaged Properties leased
to a single tenant or a small number of significant tenants. Accordingly, a
decline in the financial condition of the borrower or a significant tenant, as
applicable, may have a disproportionately greater effect on the net operating
income from such Mortgaged Properties than would be the case with respect to
Mortgaged Properties with multiple tenants. Furthermore, the value of any
Mortgaged Property may be adversely affected by factors generally incident to
interests in real property, including changes in general or local economic
conditions and/or specific industry segments; declines in real estate values;
declines in rental or occupancy rates; increases in interest rates, real estate
tax rates and other operating expenses; changes in governmental rules,
regulations and fiscal policies, including environmental legislation; natural
disasters and civil disturbances such as earthquakes, hurricanes, floods,
eruptions or riots; and other circumstances, conditions or events beyond the
control of a Master Servicer.
Additional considerations may be presented by the type and use of a
particular Mortgaged Property. For instance, Mortgaged Properties that operate
as hospitals and nursing homes are subject to
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significant governmental regulation of the ownership, operation, maintenance
and financing of health care institutions. Hotel and motel properties are often
operated pursuant to franchise, management or operating agreements that may be
terminable by the franchisor or operator, and the transferability of a hotel's
operating, liquor and other licenses upon a transfer of the hotel, whether
through purchase or foreclosure, is subject to local law requirements.
It is anticipated that some or all of the Mortgage Loans included in any
Trust Fund will be nonrecourse loans or loans for which recourse may be
restricted or unenforceable. As to any such Mortgage Loan, recourse in the
event of borrower default will be limited to the specific real property and
other assets, if any, that were pledged to secure the Mortgage Loan. However,
even with respect to those Mortgage Loans that provide for recourse against the
borrower and its assets generally, there can be no assurance that enforcement
of such recourse provisions will be practicable, or that the assets of the
borrower will be sufficient to permit a recovery in respect of a defaulted
Mortgage Loan in excess of the liquidation value of the related Mortgaged
Property. See "Certain Legal Aspects of Mortgage Loans--
Foreclosure--Anti-Deficiency Legislation".
Further, the concentration of default, foreclosure and loss risks in
individual Mortgage Loans in a particular Trust Fund will generally be greater
than for pools of single-family loans because Mortgage Loans in a Trust Fund
will generally consist of a smaller number of higher balance loans than would a
pool of single-family loans of comparable aggregate unpaid principal balance.
BALLOON PAYMENTS; BORROWER DEFAULT
Certain of the Mortgage Loans included in a Trust Fund may be
non-amortizing or only partially amortizing over their terms to maturity and,
thus, will require substantial payments of principal and interest (that is,
balloon payments) at their stated maturity. Mortgage Loans of this type involve
a greater likelihood of default than self-amortizing loans because the ability
of a borrower to make a balloon payment typically will depend upon its ability
either to refinance the loan or to sell the related Mortgaged Property. The
ability of a borrower to accomplish either of these goals will be affected by a
number of factors, including the value of the related Mortgaged Property, the
level of available mortgage rates at the time of sale or refinancing, the
borrower's equity in the related Mortgaged Property, the financial condition
and operating history of the borrower and the related Mortgaged Property, tax
laws, rent control laws (with respect to certain residential properties),
Medicaid and Medicare reimbursement rates (with respect to hospitals and
nursing homes), prevailing general economic conditions and the availability of
credit for loans secured by multifamily or commercial, as the case may be, real
properties generally. Neither the Depositor nor any of its affiliates will be
required to refinance any Mortgage Loan.
If and to the extent described herein and in the related Prospectus
Supplement, in order to maximize recoveries on defaulted Mortgage Loans, the
Master Servicer or a Special Servicer will be permitted (within prescribed
limits) to extend and modify Mortgage Loans that are in default or as to which
a payment default is imminent. See "The Pooling and Servicing
Agreements--Realization upon Defaulted Mortgage Loans". While a Master Servicer
or a Special Servicer generally will be required to determine that any such
extension or modification is reasonably likely to produce a greater recovery
than liquidation, taking into account the time value of money, there can be no
assurance that any such extension or modification will in fact increase the
present value of receipts from or proceeds of the affected Mortgage Loans.
LEASES AND RENTS
Each Mortgage Loan included in any Trust Fund secured by Mortgaged
Property that is subject to leases typically will be secured by an assignment
of leases and rents pursuant to which the borrower assigns to the lender its
right, title and interest as landlord under the leases of the related Mortgaged
Property, and the income derived therefrom, as further security for the related
Mortgage Loan, while retaining a license to collect rents for so long as there
is no default. If the borrower defaults, the license terminates and the lender
is entitled to collect rents. Some state laws may require that the lender take
possession of the Mortgaged Property and obtain a judicial appointment of a
receiver before becoming
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entitled to collect the rents. In addition, if bankruptcy or similar
proceedings are commenced by or in respect of the borrower, the lender's
ability to collect the rents may be adversely affected. See "Certain Legal
Aspects of Mortgage Loans--Leases and Rents".
ENVIRONMENTAL CONSIDERATIONS
Under the laws of certain states, contamination of real property may give
rise to a lien on the property to assure the costs of cleanup. In several
states, such a lien has priority over an existing mortgage lien on such
property. In addition, under the laws of some states and under the federal
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
as amended, a lender may be liable, as an "owner" or "operator", for costs of
addressing releases or threatened releases of hazardous substances at a
property, if agents or employees of the lender have become sufficiently
involved in the operations of the borrower, regardless of whether the
environmental damage or threat was caused by the borrower or a prior owner. A
lender also risks such liability on foreclosure of the mortgage.
DESCRIPTION OF THE TRUST FUNDS
GENERAL
The primary assets of each Trust Fund will consist of Mortgage Loans (see
"--Mortgage Loans" below), MBS (see "--MBS" below) or a combination of Mortgage
Loans and MBS. Each Trust Fund will be established by the Depositor. Each
Mortgage Asset will be selected by the Depositor for inclusion in a Trust Fund
from among those purchased, either directly or indirectly, from a prior holder
thereof (a "Mortgage Asset Seller"), which prior holder may or may not be the
originator of such Mortgage Loan or the issuer of such MBS and may be GMACCM or
another affiliate of the Depositor. The Mortgage Assets will not be guaranteed
or insured by the Depositor, GMACCM or any of their affiliates or, unless
otherwise provided in the related Prospectus Supplement, by any governmental
agency or instrumentality or by any other person. The discussion below under
the heading "--Mortgage Loans", unless otherwise noted, applies equally to
mortgage loans underlying any MBS included in a particular Trust Fund.
MORTGAGE LOANS
General. The Mortgage Loans will be evidenced by promissory notes (the
"Mortgage Notes") secured by mortgages, deeds of trust or similar security
instruments (the "Mortgages") that create first or junior liens on fee or
leasehold estates in properties (the "Mortgaged Properties") consisting of (i)
residential properties consisting of five or more rental or cooperatively-owned
dwelling units in high-rise, mid-rise or garden apartment buildings or other
residential structures ("Multifamily Properties") or (ii) office buildings,
retail stores and establishments, hotels or motels, nursing homes, hospitals or
other health care-related facilities, mobile home parks, warehouse facilities,
mini-warehouse facilities, self-storage facilities, industrial plants, parking
lots, mixed use or various other types of income-producing properties or
unimproved land ("Commercial Properties"). The Multifamily Properties may
include mixed commercial and residential structures and apartment buildings
owned by private cooperative housing corporations ("Cooperatives"). Unless
otherwise specified in the related Prospectus Supplement, each Mortgage will
create a first priority mortgage lien on a borrower's fee estate in a Mortgaged
Property. If a Mortgage creates a lien on a borrower's leasehold estate in a
property, then, unless otherwise specified in the related Prospectus
Supplement, the term of any such leasehold will exceed the term of the Mortgage
Note by at least ten years. Unless otherwise specified in the related
Prospectus Supplement, each Mortgage Loan will have been originated by a person
(the "Originator") other than the Depositor; however, the Originator may be
GMACCM or, alternatively, may be or may have been another affiliate of the
Depositor.
If so provided in the related Prospectus Supplement, Mortgage Assets for a
series of Certificates may include Mortgage Loans secured by junior liens, and
the loans secured by the related senior liens ("Senior Liens") may not be
included in the Mortgage Pool. The primary risk to holders of Mortgage Loans
secured by junior liens is the possibility that adequate funds will not be
received in connection with
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a foreclosure of the related Senior Liens to satisfy fully both the Senior
Liens and the Mortgage Loan. In the event that a holder of a Senior Lien
forecloses on a Mortgaged Property, the proceeds of the foreclosure or similar
sale will be applied first to the payment of court costs and fees in connection
with the foreclosure, second to real estate taxes, third in satisfaction of all
principal, interest, prepayment or acceleration penalties, if any, and any
other sums due and owing to the holder of the Senior Liens. The claims of the
holders of the Senior Liens will be satisfied in full out of proceeds of the
liquidation of the related Mortgage Property, if such proceeds are sufficient,
before the Trust Fund as holder of the junior lien receives any payments in
respect of the Mortgage Loan. If the Master Servicer were to foreclose on any
Mortgage Loan, it would do so subject to any related Senior Liens. In order for
the debt related to such Mortgage Loan to be paid in full at such sale, a
bidder at the foreclosure sale of such Mortgage Loan would have to bid an
amount sufficient to pay off all sums due under the Mortgage Loan and any
Senior Liens or purchase the Mortgaged Property subject to such Senior Liens.
In the event that such proceeds from a foreclosure or similar sale of the
related Mortgaged Property are insufficient to satisfy all Senior Liens and the
Mortgage Loan in the aggregate, the Trust Fund, as the holder of the junior
lien, and, accordingly, holders of one or more classes of the Certificates of
the related series bear (i) the risk of delay in distributions while a
deficiency judgment against the borrower is obtained and (ii) the risk of loss
if the deficiency judgment is not realized upon. Moreover, deficiency judgments
may not be available in certain jurisdictions or the Mortgage Loan may be
nonrecourse.
If so specified in the related Prospectus Supplement, Mortgage Assets for
a series of Certificates may include Mortgage Loans made on the security of
real estate projects under construction. In that case, the related Prospectus
Supplement will describe the procedures and timing for making disbursements
from construction reserve funds as portions of the related real estate project
are completed. In addition, the Mortgage Assets for a particular series of
Certificates may include Mortgage Loans that are delinquent or non-performing
as of the date such Certificates are issued. In that case, the related
Prospectus Supplement will set forth, as to each such Mortgage Loan, available
information as to the period of such delinquency or non-performance, any
forbearance arrangement then in effect, the condition of the related Mortgaged
Property and the ability of the Mortgaged Property to generate income to
service the mortgage debt.
Default and Loss Considerations with Respect to the Mortgage
Loans. Mortgage loans secured by liens on income-producing properties are
substantially different from loans made on the security of owner-occupied
single-family homes. The repayment of a loan secured by a lien on an
income-producing property is typically dependent upon the successful operation
of such property (that is, its ability to generate income). Moreover, some or
all of the Mortgage Loans included in a particular Trust Fund may be
non-recourse loans, which means that, absent special facts, recourse in the
case of default will be limited to the Mortgaged Property and such other
assets, if any, that were pledged to secure repayment of the Mortgage Loan.
Lenders typically look to the Debt Service Coverage Ratio of a loan
secured by income-producing property as an important factor in evaluating the
likelihood of default on such a loan. Unless otherwise defined in the related
Prospectus Supplement, the "Debt Service Coverage Ratio," "Underwritten Debt
Service Coverage Ratio" or "Underwritten DSCR" means, with respect to any
Mortgage Loan, or with respect to a Mortgage Loan evidenced by one Mortgage
Note, but secured by multiple Mortgaged Properties, (a) the Underwritten Cash
flow for the Mortgaged Property, divided by (b) the Annual Debt Service for
such Mortgage Loan. "Underwritten Cash Flow" with respect to any Mortgaged
Property, means an estimate of cash flow available for debt service in a
typical year of stable, normal operations. In general, it is the estimated
revenue derived from the use and operation of such Mortgaged Property less the
sum of (a) estimated operating expenses (such as utilities, administrative
expenses, repairs and maintenance, management and franchise fees and
advertising), (b) fixed expenses (such as insurance, real estate taxes and, if
applicable, ground lease payments) and (c) capital expenditures and reserves
for capital expenditures, including tenant improvement costs and leasing
commissions. Underwritten Cash Flow generally does not reflect interest expense
and non-cash items such as depreciation and amortization. "Annual Debt Service"
means for any Mortgage Loan 12 times the monthly payment in effect as of the
Cut-off Date or, for any Mortgage Loans that pay interest only for a period of
time,
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12 times the monthly payment in effect at the end of such period. The
Underwritten Cash Flow of a Mortgaged Property will generally fluctuate over
time and may or may not be sufficient to cover debt service on the related
Mortgage Loan at any given time. As the primary source of the operating
revenues of a non-owner occupied, income-producing property, rental income
(and, with respect to a Mortgage Loan secured by a Cooperative apartment
building, maintenance payments from tenant-stockholders of a Cooperative) may
be affected by the condition of the applicable real estate market and/or area
economy. In addition, properties typically leased, occupied or used on a
short-term basis, such as certain health care-related facilities, hotels and
motels, and mini-warehouse and self-storage facilities, tend to be affected
more rapidly by changes in market or business conditions than do properties
typically leased for longer periods, such as warehouses, retail stores, office
buildings and industrial plants. Commercial Properties may be owner-occupied or
leased to a small number of tenants. Thus, the Underwritten Cash Flow of such a
Mortgaged Property may depend substantially on the financial condition of the
borrower or a tenant, and Mortgage Loans secured by liens on such properties
may pose a greater likelihood of default and loss than loans secured by liens
on Multifamily Properties or on multi-tenant Commercial Properties.
Increases in operating expenses due to the general economic climate or
economic conditions in a locality or industry segment, such as increases in
interest rates, real estate tax rates, energy costs, labor costs and other
operating expenses, and/or to changes in governmental rules, regulations and
fiscal policies, may also affect the likelihood of default on a Mortgage Loan.
As may be further described in the related Prospectus Supplement, in some cases
leases of Mortgaged Properties may provide that the lessee, rather than the
borrower/landlord, is responsible for payment of operating expenses ("Net
Leases"). However, the existence of such "net of expense" provisions will
result in stable Underwritten Cash Flow to the borrower/landlord only to the
extent that the lessee is able to absorb operating expense increases while
continuing to make rent payments.
Lenders also look to the Loan-to-Value Ratio of a mortgage loan as a
factor in evaluating the likelihood of loss if a property must be liquidated
following a default. Unless otherwise defined in the related Prospectus
Supplement, the "Loan-to-Value Ratio" of a Mortgage Loan at any given time is
the ratio (expressed as a percentage) of (i) the then outstanding principal
balance of the Mortgage Loan and any other loans senior thereto that are
secured by the related Mortgaged Property to (ii) the Value of the related
Mortgaged Property. Unless otherwise specified in the related Prospectus
Supplement, the "Value" of a Mortgaged Property will be its fair market value
determined in an appraisal obtained by the Originator at the origination of
such loan. The lower the Loan-to-Value Ratio, the greater the percentage of the
borrower's equity in a Mortgaged Property, and thus (a) the greater the
incentive of the borrower to perform under the terms of the related Mortgage
Loan (in order to protect such equity) and (b) the greater the cushion provided
to the lender against loss on liquidation following a default.
Loan-to-Value Ratios will not necessarily constitute an accurate measure
of the likelihood of liquidation loss in a pool of Mortgage Loans. For example,
the value of a Mortgaged Property as of the date of initial issuance of the
related series of Certificates may be less than the Value determined at loan
origination, and will likely continue to fluctuate from time to time based upon
certain factors including changes in economic conditions and the real estate
market. Moreover, even when current, an appraisal is not necessarily a reliable
estimate of value. Appraised values of income-producing properties are
generally based on the market comparison method (recent resale value of
comparable properties at the date of the appraisal), the cost replacement
method (the cost of replacing the property at such date), the income
capitalization method (a projection of value based upon the property's
projected net cash flow), or upon a selection from or interpolation of the
values derived from such methods. Each of these appraisal methods can present
analytical difficulties. It is often difficult to find truly comparable
properties that have recently been sold; the replacement cost of a property may
have little to do with its current market value; and income capitalization is
inherently based on inexact projections of income and expense and the selection
of an appropriate capitalization rate and discount rate. Where more than one of
these appraisal methods are used and provide significantly different results,
an accurate determination of value and, correspondingly, a reliable analysis of
the likelihood of default and loss, is even more difficult.
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Although there may be multiple methods for determining the value of a
Mortgaged Property, value will in all cases be affected by property
performance. As a result, if a Mortgage Loan defaults because the income
generated by the related Mortgaged Property is insufficient to cover operating
costs and expenses and pay debt service, then the value of the Mortgaged
Property will reflect such and a liquidation loss may occur.
While the Depositor believes that the foregoing considerations are
important factors that generally distinguish loans secured by liens on
income-producing real estate from single-family mortgage loans, there can be no
assurance that all of such factors will in fact have been prudently considered
by the Originators of the Mortgage Loans, or that, for a particular Mortgage
Loan, they are complete or relevant. See "Risk Factors--Investment in
Commercial and Multifamily Mortgage Loans" and "--Balloon Payments; Borrower
Default".
Payment Provisions of the Mortgage Loans. Unless otherwise specified in
the related Prospectus Supplement, all of the Mortgage Loans will (i) have had
original terms to maturity of not more than 40 years and (ii) provide for
scheduled payments of principal, interest or both, to be made on specified
dates ("Due Dates") that occur monthly, quarterly, semi-annually or annually. A
Mortgage Loan (i) may provide for no accrual of interest or for accrual of
interest thereon at a Mortgage Rate that is fixed over its term or that adjusts
from time to time, or that may be converted at the borrower's election from an
adjustable to a fixed Mortgage Rate, or from a fixed to an adjustable Mortgage
Rate, (ii) may provide for level payments to maturity or for payments that
adjust from time to time to accommodate changes in the Mortgage Rate or to
reflect the occurrence of certain events, and may permit negative amortization,
(iii) may be fully amortizing or may be partially amortizing or non-amortizing,
with a balloon payment due on its stated maturity date, and (iv) may prohibit
over its term or for a certain period prepayments (the period of such
prohibition, a "Lock-Out Period" and its date of expiration, a "Lock-Out Date")
and/or require payment of a premium or a yield maintenance penalty (a
"Prepayment Premium") in connection with certain prepayments, in each case as
described in the related Prospectus Supplement. A Mortgage Loan may also
contain a provision that entitles the lender to a share of appreciation of the
related Mortgaged Property, or profits realized from the operation or
disposition of such Mortgaged Property or the benefit, if any, resulting from
the refinancing of the Mortgage Loan (any such provision, an "Equity
Participation"), as described in the related Prospectus Supplement.
Mortgage Loan Information in Prospectus Supplements. Each Prospectus
Supplement will contain certain information pertaining to the Mortgage Loans in
the related Trust Fund, which, to the extent then applicable and specifically
known to the Depositor, will generally include the following: (i) the aggregate
outstanding principal balance and the largest, smallest and average outstanding
principal balance of the Mortgage Loans, (ii) the type or types of property
that provide security for repayment of the Mortgage Loans, (iii) the earliest
and latest origination date and maturity date of the Mortgage Loans, (iv) the
original and remaining terms to maturity of the Mortgage Loans, or the
respective ranges thereof, and the weighted average original and remaining
terms to maturity of the Mortgage Loans, (v) the Loan-to-Value Ratios of the
Mortgage Loans (either at origination or as of a more recent date), or the
range thereof, and the weighted average of such Loan-to-Value Ratios, (vi) the
Mortgage Rates borne by the Mortgage Loans, or range thereof, and the weighted
average Mortgage Rate borne by the Mortgage Loans, (vii) with respect to
Mortgage Loans with adjustable Mortgage Rates ("ARM Loans"), the index or
indices upon which such adjustments are based, the adjustment dates, the range
of gross margins and the weighted average gross margin, and any limits on
Mortgage Rate adjustments at the time of any adjustment and over the life of
the ARM Loan, (viii) information regarding the payment characteristics of the
Mortgage Loans, including, without limitation, balloon payment and other
amortization provisions, Lock-out Periods and Prepayment Premiums, (ix) the
Debt Service Coverage Ratios of the Mortgage Loans (either at origination or as
of a more recent date), or the range thereof, and the weighted average of such
Debt Service Coverage Ratios, and (x) the geographic distribution of the
Mortgaged Properties on a state-by-state basis. In appropriate cases, the
related Prospectus Supplement will also contain certain information available
to the Depositor that pertains to the provisions of leases and the nature of
tenants of the Mortgaged Properties. If the Depositor is unable to provide the
specific information described above at the time Offered Certificates of a
series are initially offered, more general information
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of the nature described above will be provided in the related Prospectus
Supplement, and specific information will be set forth in a report which will
be available to purchasers of those Certificates at or before the initial
issuance thereof and will be filed as part of a Current Report on Form 8-K with
the Commission within fifteen days following such issuance.
MBS
MBS may include (i) private-label (that is, not guaranteed or insured by
the United States or any agency or instrumentality thereof) mortgage
participations, mortgage pass-through certificates or other mortgage-backed
securities or (ii) certificates insured or guaranteed by the Federal Home Loan
Mortgage Corporation ("FHLMC"), the Federal National Mortgage Association
("FNMA"), the Governmental National Mortgage Association or the Federal
Agricultural Mortgage Corporation ("FAMC"), provided that, unless otherwise
specified in the related Prospectus Supplement, each MBS will evidence an
interest in, or will be secured by a pledge of, mortgage loans that conform to
the descriptions of the Mortgage Loans contained herein.
Any MBS will have been issued pursuant to a participation and servicing
agreement, a pooling and servicing agreement, an indenture or similar agreement
(an "MBS Agreement"). The issuer of the MBS (the "MBS Issuer") and/or the
servicer of the underlying mortgage loans (the "MBS Servicer") will have
entered into the MBS Agreement, generally with a trustee (the "MBS Trustee")
or, in the alternative, with the original purchaser or purchasers of the MBS.
The MBS may have been issued in one or more classes with characteristics
similar to the classes of Certificates described herein. Distributions in
respect of the MBS will be made by the MBS Issuer, the MBS Servicer or the MBS
Trustee on the dates specified in the related Prospectus Supplement. The MBS
Issuer or the MBS Servicer or another person specified in the related
Prospectus Supplement may have the right or obligation to repurchase or
substitute assets underlying the MBS after a certain date or under other
circumstances specified in the related Prospectus Supplement.
Reserve funds, subordination or other credit support similar to that
described for the Certificates under "Description of Credit Support" may have
been provided with respect to the MBS. The type, characteristics and amount of
such credit support, if any, will be a function of the characteristics of the
underlying mortgage loans and other factors and generally will have been
established on the basis of the requirements of any Rating Agency that may have
assigned a rating to the MBS, or by the initial purchasers of the MBS.
The Prospectus Supplement for a series of Certificates that evidence
interests in MBS will specify, to the extent available, (i) the aggregate
approximate initial and outstanding principal amount and type of the MBS to be
included in the Trust Fund, (ii) the original and remaining term to stated
maturity of the MBS, if applicable, (iii) the pass-through or bond rate of the
MBS or the formula for determining such rates, (iv) the payment characteristics
of the MBS, (v) the MBS Issuer, MBS Servicer and MBS Trustee, as applicable,
(vi) a description of the credit support, if any, (vii) the circumstances under
which the related underlying mortgage loans, or the MBS themselves, may be
purchased prior to their maturity, (viii) the terms on which mortgage loans may
be substituted for those originally underlying the MBS, (ix) the type of
mortgage loans underlying the MBS and, to the extent available to the Depositor
and appropriate under the circumstances, such other information in respect of
the underlying mortgage loans described under "--Mortgage Loans--Mortgage Loan
Information in Prospectus Supplements", and (x) the characteristics of any cash
flow agreements that relate to the MBS.
CERTIFICATE ACCOUNTS
Each Trust Fund will include one or more accounts (collectively, the
"Certificate Account") established and maintained on behalf of the
Certificateholders into which all payments and collections received or advanced
with respect to the Mortgage Assets and other assets in the Trust Fund will be
deposited to the extent described herein and in the related Prospectus
Supplement. See "The Pooling and Servicing Agreements--Certificate Account".
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CREDIT SUPPORT
If so provided in the Prospectus Supplement for a series of Certificates,
partial or full protection against certain defaults and losses on the Mortgage
Assets in the related Trust Fund may be provided to one or more classes of
Certificates of such series in the form of subordination of one or more other
classes of Certificates of such series or by one or more other types of credit
support, such as a letter of credit, insurance policy, guarantee or reserve
fund, among others, or a combination thereof. The amount and types of Credit
Support, the identification of the entity providing it (if applicable) and
related information with respect to each type of Credit Support, if any, will
be set forth in the Prospectus Supplement for a series of Certificates. See
"Risk Factors--Credit Support Limitations" and "Description of Credit Support".
CASH FLOW AGREEMENTS
If so provided in the Prospectus Supplement for a series of Certificates,
the related Trust Fund may include guaranteed investment contracts pursuant to
which moneys held in the funds and accounts established for such series will be
invested at a specified rate. The Trust Fund may also include certain other
agreements, such as interest rate exchange agreements, interest rate cap or
floor agreements, or other agreements designed to reduce the effects of
interest rate fluctuations on the Mortgage Assets on one or more classes of
Certificates. The principal terms of any such Cash Flow Agreement, including,
without limitation, provisions relating to the timing, manner and amount of
payments thereunder and provisions relating to the termination thereof, will be
described in the related Prospectus Supplement. The related Prospectus
Supplement will also identify the obligor under the Cash Flow Agreement.
YIELD AND MATURITY CONSIDERATIONS
GENERAL
The yield on any Offered Certificate will depend on the price paid by the
Certificateholder, the Pass-Through Rate of the Certificate and the amount and
timing of distributions on the Certificate. See "Risk Factors--Yield and
Prepayment Considerations". The following discussion contemplates a Trust Fund
that consists solely of Mortgage Loans. While the characteristics and behavior
of mortgage loans underlying an MBS can generally be expected to have the same
effect on the yield to maturity and/or weighted average life of a class of
Certificates as will the characteristics and behavior of comparable Mortgage
Loans, the effect may differ due to the payment characteristics of the MBS. If
a Trust Fund includes MBS, the related Prospectus Supplement will discuss the
effect, if any, that the payment characteristics of the MBS may have on the
yield to maturity and weighted average lives of the Offered Certificates of the
related series.
PASS-THROUGH RATE
The Certificates of any class within a series may have a fixed, variable
or adjustable Pass-Through Rate, which may or may not be based upon the
interest rates borne by the Mortgage Loans in the related Trust Fund. The
Prospectus Supplement with respect to any series of Certificates will specify
the Pass-Through Rate for each class of Offered Certificates of such series or,
in the case of a class of Offered Certificates with a variable or adjustable
Pass-Through Rate, the method of determining the Pass-Through Rate; the effect,
if any, of the prepayment of any Mortgage Loan on the Pass-Through Rate of one
or more classes of Offered Certificates; and whether the distributions of
interest on the Offered Certificates of any class will be dependent, in whole
or in part, on the performance of any obligor under a Cash Flow Agreement.
PAYMENT DELAYS
With respect to any series of Certificates, a period of time will elapse
between the date upon which payments on the Mortgage Loans in the related Trust
Fund are due and the Distribution Date on which such payments are passed
through to Certificateholders. That delay will effectively reduce the yield
that would otherwise be produced if payments on such Mortgage Loans were
distributed to Certificateholders on the date they were due.
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CERTAIN SHORTFALLS IN COLLECTIONS OF INTEREST
When a principal prepayment in full or in part is made on a Mortgage Loan,
the borrower is generally charged interest on the amount of such prepayment
only through the date of such prepayment, instead of through the Due Date for
the next succeeding scheduled payment. However, interest accrued on any series
of Certificates and distributable thereon on any Distribution Date will
generally correspond to interest accrued on the Mortgage Loans to their
respective Due Dates during the related Due Period. Unless otherwise specified
in the Prospectus Supplement for a series of Certificates, a "Due Period" will
be a specified time period (generally running from the second day of one month
to the first day of the next month, inclusive) and all scheduled payments on
the Mortgage Loans in the related Trust Fund that are due during a given Due
Period will, to the extent received by a specified date (the "Determination
Date") or otherwise advanced by the related Master Servicer or other specified
person, be distributed to the holders of the Certificates of such series on the
next succeeding Distribution Date. Consequently, if a prepayment on any
Mortgage Loan is distributable to Certificateholders on a particular
Distribution Date, but such prepayment is not accompanied by interest thereon
to the Due Date for such Mortgage Loan in the related Due Period, then the
interest charged to the borrower (net of servicing and administrative fees) may
be less (such shortfall, a "Prepayment Interest Shortfall") than the
corresponding amount of interest accrued and otherwise payable on the
Certificates of the related series. If and to the extent that any such
shortfall is allocated to a class of Offered Certificates, the yield thereon
will be adversely affected. The Prospectus Supplement for each series of
Certificates will describe the manner in which any such shortfalls will be
allocated among the classes of such Certificates. The related Prospectus
Supplement will also describe any amounts available to offset such shortfalls.
YIELD AND PREPAYMENT CONSIDERATIONS
A Certificate's yield to maturity will be affected by the rate of
principal payments on the Mortgage Loans in the related Trust Fund and the
allocation thereof to reduce the principal balance (or notional amount, if
applicable) of such Certificate. The rate of principal payments on the Mortgage
Loans in any Trust Fund will in turn be affected by the amortization schedules
thereof (which, in the case of ARM Loans, may change periodically to
accommodate adjustments to the Mortgage Rates thereon), the dates on which any
balloon payments are due, and the rate of principal prepayments thereon
(including for this purpose, voluntary prepayments by borrowers and also
prepayments resulting from liquidations of Mortgage Loans due to defaults,
casualties or condemnations affecting the Mortgaged Properties, or purchases of
Mortgage Loans out of the related Trust Fund). Because the rate of principal
prepayments on the Mortgage Loans in any Trust Fund will depend on future
events and a variety of factors (as described below), no assurance can be given
as to such rate.
The extent to which the yield to maturity of a class of Offered
Certificates of any series may vary from the anticipated yield will depend upon
the degree to which they are purchased at a discount or premium and when, and
to what degree, payments of principal on the Mortgage Loans in the related
Trust Fund are in turn distributed on such Certificates (or, in the case of a
class of Stripped Interest Certificates, result in the reduction of the
Notional Amount thereof). An investor should consider, in the case of any
Offered Certificate purchased at a discount, the risk that a slower than
anticipated rate of principal payments on the Mortgage Loans in the related
Trust Fund could result in an actual yield to such investor that is lower than
the anticipated yield and, in the case of any Offered Certificate purchased at
a premium, the risk that a faster than anticipated rate of principal payments
on such Mortgage Loans could result in an actual yield to such investor that is
lower than the anticipated yield. In addition, if an investor purchases an
Offered Certificate at a discount (or premium), and principal payments are made
in reduction of the principal balance or notional amount of such investor's
Offered Certificates at a rate slower (or faster) than the rate anticipated by
the investor during any particular period, the consequent adverse effects on
such investor's yield would not be fully offset by a subsequent like increase
(or decrease) in the rate of principal payments.
In general, the Notional Amount of a class of Stripped Interest
Certificates will either (i) be based on the principal balances of some or all
of the Mortgage Assets in the related Trust Fund or (ii) equal the Certificate
Balances of one or more of the other classes of Certificates of the same
series. Accordingly,
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the yield on such Stripped Interest Certificates will be inversely related to
the rate at which payments and other collections of principal are received on
such Mortgage Assets or distributions are made in reduction of the Certificate
Balances of such classes of Certificates, as the case may be.
Consistent with the foregoing, if a class of Certificates of any series
consists of Stripped Interest Certificates or Stripped Principal Certificates,
a lower than anticipated rate of principal prepayments on the Mortgage Loans in
the related Trust Fund will negatively affect the yield to investors in
Stripped Principal Certificates, and a higher than anticipated rate of
principal prepayments on such Mortgage Loans will negatively affect the yield
to investors in Stripped Interest Certificates. If the Offered Certificates of
a series include any such Certificates, the related Prospectus Supplement will
include a table showing the effect of various constant assumed levels of
prepayment on yields on such Certificates. Such tables will be intended to
illustrate the sensitivity of yields to various constant assumed prepayment
rates and will not be intended to predict, or to provide information that will
enable investors to predict, yields or prepayment rates.
The Depositor is not aware of any relevant publicly available or
authoritative statistics with respect to the historical prepayment experience
of a group of multifamily or commercial mortgage loans. However, the extent of
prepayments of principal of the Mortgage Loans in any Trust Fund may be
affected by a number of factors, including, without limitation, the
availability of mortgage credit, the relative economic vitality of the area in
which the Mortgaged Properties are located, the quality of management of the
Mortgaged Properties, the servicing of the Mortgage Loans, possible changes in
tax laws and other opportunities for investment. In addition, the rate of
principal payments on the Mortgage Loans in any Trust Fund may be affected by
the existence of Lock-out Periods and requirements that principal prepayments
be accompanied by Prepayment Premiums, and by the extent to which such
provisions may be practicably enforced. To the extent enforceable, such
provisions could constitute either an absolute prohibition (in the case of a
Lock-out Period) or a disincentive (in the case of a Prepayment Premium) to a
borrower's voluntarily prepaying its Mortgage Loan.
The rate of prepayment on a pool of mortgage loans is likely to be
affected by prevailing market interest rates for mortgage loans of a comparable
type, term and risk level. When the prevailing market interest rate is below a
mortgage coupon, a borrower may have an increased incentive to refinance its
mortgage loan. Even in the case of ARM Loans, as prevailing market interest
rates decline, and without regard to whether the Mortgage Rates on such ARM
Loans decline in a manner consistent therewith, the related borrowers may have
an increased incentive to refinance for purposes of either (i) converting to a
fixed rate loan and thereby "locking in" such rate or (ii) taking advantage of
a different index, margin or rate cap or floor on another adjustable rate
mortgage loan.
Depending on prevailing market interest rates, the outlook for market
interest rates and economic conditions generally, some borrowers may sell
Mortgaged Properties in order to realize their equity therein, to meet cash
flow needs or to make other investments. In addition, some borrowers may be
motivated by federal and state tax laws (which are subject to change) to sell
Mortgaged Properties prior to the exhaustion of tax depreciation benefits. The
Depositor makes no representation as to the particular factors that will affect
the prepayment of the Mortgage Loans in any Trust Fund, as to the relative
importance of such factors, as to the percentage of the principal balance of
such Mortgage Loans that will be paid as of any date or as to the overall rate
of prepayment on such Mortgage Loans.
WEIGHTED AVERAGE LIFE AND MATURITY
The rate at which principal payments are received on the Mortgage Loans in
any Trust Fund will affect the ultimate maturity and the weighted average life
of one or more classes of the Certificates of such series. Unless otherwise
specified in the related Prospectus Supplement, weighted average life refers to
the average amount of time that will elapse from the date of issuance of an
instrument until each dollar allocable as principal of such instrument is
repaid to the investor.
The weighted average life and maturity of a class of Certificates of any
series will be influenced by the rate at which principal on the related
Mortgage Loans, whether in the form of scheduled amortization or prepayments
(for this purpose, the term "prepayment" includes voluntary prepayments,
liquidations
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due to default and purchases of Mortgage Loans out of the related Trust Fund),
is paid to such class. Prepayment rates on loans are commonly measured relative
to a prepayment standard or model, such as the Constant Prepayment Rate ("CPR")
prepayment model or the Standard Prepayment Assumption ("SPA") prepayment
model. CPR represents an assumed constant rate of prepayment each month
(expressed as an annual percentage) relative to the then outstanding principal
balance of a pool of loans for the life of such loans. SPA represents an
assumed variable rate of prepayment each month (expressed as an annual
percentage) relative to the then outstanding principal balance of a pool of
loans, with different prepayment assumptions often expressed as percentages of
SPA. For example, a prepayment assumption of 100% of SPA assumes prepayment
rates of 0.2% per annum of the then outstanding principal balance of such loans
in the first month of the life of the loans and an additional 0.2% per annum in
each month thereafter until the thirtieth month. Beginning in the thirtieth
month, and in each month thereafter during the life of the loans, 100% of SPA
assumes a constant prepayment rate of 6% per annum each month.
Neither CPR nor SPA nor any other prepayment model or assumption purports
to be a historical description of prepayment experience or a prediction of the
anticipated rate of prepayment of any particular pool of loans. Moreover, the
CPR and SPA models were developed based upon historical prepayment experience
for single-family loans. Thus, it is unlikely that the prepayment experience of
the Mortgage Loans included in any Trust Fund will conform to any particular
level of CPR or SPA.
The Prospectus Supplement with respect to each series of Certificates will
contain tables, if applicable, setting forth the projected weighted average
life of each class of Offered Certificates of such series and the percentage of
the initial Certificate Balance of each such class that would be outstanding on
specified Distribution Dates based on the assumptions stated in such Prospectus
Supplement, including assumptions that prepayments on the related Mortgage
Loans are made at rates corresponding to various percentages of CPR or SPA, or
at such other rates specified in such Prospectus Supplement. Such tables and
assumptions will illustrate the sensitivity of the weighted average lives of
the Certificates to various assumed prepayment rates and will not be intended
to predict, or to provide information that will enable investors to predict,
the actual weighted average lives of the Certificates.
OTHER FACTORS AFFECTING YIELD, WEIGHTED AVERAGE LIFE AND MATURITY
Balloon Payments; Extensions of Maturity. Some or all of the Mortgage
Loans included in a particular Trust Fund may require that balloon payments be
made at maturity. Because the ability of a borrower to make a balloon payment
typically will depend upon its ability either to refinance the loan or to sell
the related Mortgaged Property, there is a possibility that Mortgage Loans that
require balloon payments may default at maturity, or that the maturity of such
a Mortgage Loan may be extended in connection with a workout. In the case of
defaults, recovery of proceeds may be delayed by, among other things,
bankruptcy of the borrower or adverse conditions in the market where the
property is located. In order to minimize losses on defaulted Mortgage Loans,
the Master Servicer or a Special Servicer, to the extent and under the
circumstances set forth herein and in the related Prospectus Supplement, may be
authorized to modify Mortgage Loans that are in default or as to which a
payment default is imminent. Any defaulted balloon payment or modification that
extends the maturity of a Mortgage Loan may delay distributions of principal on
a class of Offered Certificates and thereby extend the weighted average life of
such Certificates and, if such Certificates were purchased at a discount,
reduce the yield thereon.
Negative Amortization. The weighted average life of a class of
Certificates can be affected by Mortgage Loans that permit negative
amortization to occur. A Mortgage Loan that provides for the payment of
interest calculated at a rate lower than the rate at which interest accrues
thereon would, in the case of an ARM Loan, be expected during a period of
increasing interest rates to amortize at a slower rate (and perhaps not at all)
than if interest rates were declining or were remaining constant. Such slower
rate of Mortgage Loan amortization would correspondingly be reflected in a
slower rate of amortization for one or more classes of Certificates of the
related series. In addition, negative amortization on one or more Mortgage
Loans in any Trust Fund may result in negative amortization on the Certificates
of the related series. The related Prospectus Supplement will describe, if
applicable, the manner in which negative amortization in respect of the
Mortgage Loans in any Trust Fund is allocated among the
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respective classes of Certificates of the related series. The portion of any
Mortgage Loan negative amortization allocated to a class of Certificates may
result in a deferral of some or all of the interest payable thereon, which
deferred interest may be added to the Certificate Balance thereof. Accordingly,
the weighted average lives of Mortgage Loans that permit negative amortization
(and that of the classes of Certificates to which any such negative
amortization would be allocated or that would bear the effects of a slower rate
of amortization on such Mortgage Loans) may increase as a result of such
feature.
Negative amortization also may occur in respect of an ARM Loan that (i)
limits the amount by which its scheduled payment may adjust in response to a
change in its Mortgage Rate, (ii) provides that its scheduled payment will
adjust less frequently than its Mortgage Rate or (iii) provides for constant
scheduled payments notwithstanding adjustments to its Mortgage Rate.
Accordingly, during a period of declining interest rates, the scheduled payment
on such a Mortgage Loan may exceed the amount necessary to amortize the loan
fully over its remaining amortization schedule and pay interest at the then
applicable Mortgage Rate, thereby resulting in the accelerated amortization of
such Mortgage Loan. Any such acceleration in amortization of its principal
balance will shorten the weighted average life of such Mortgage Loan and,
correspondingly, the weighted average lives of those classes of Certificates
entitled to a portion of the principal payments on such Mortgage Loan.
The extent to which the yield on any Offered Certificate will be affected
by the inclusion in the related Trust Fund of Mortgage Loans that permit
negative amortization, will depend upon (i) whether such Offered Certificate
was purchased at a premium or a discount and (ii) the extent to which the
payment characteristics of such Mortgage Loans delay or accelerate the
distributions of principal on such Certificate (or, in the case of a Stripped
Interest Certificate, delay or accelerate the reduction of the notional amount
thereof). See "--Yield and Prepayment Considerations" above.
Foreclosures and Payment Plans. The number of foreclosures and the
principal amount of the Mortgage Loans that are foreclosed in relation to the
number and principal amount of Mortgage Loans that are repaid in accordance
with their terms will affect the weighted average lives of those Mortgage Loans
and, accordingly, the weighted average lives of and yields on the Certificates
of the related series. Servicing decisions made with respect to the Mortgage
Loans, including the use of payment plans prior to a demand for acceleration
and the restructuring of Mortgage Loans in bankruptcy proceedings or otherwise,
may also have an effect upon the payment patterns of particular Mortgage Loans
and thus the weighted average lives of and yields on the Certificates of the
related series.
Losses and Shortfalls on the Mortgage Assets. The yield to holders of the
Offered Certificates of any series will directly depend on the extent to which
such holders are required to bear the effects of any losses or shortfalls in
collections arising out of defaults on the Mortgage Loans in the related Trust
Fund and the timing of such losses and shortfalls. In general, the earlier that
any such loss or shortfall occurs, the greater will be the negative effect on
yield for any class of Certificates that is required to bear the effects
thereof.
The amount of any losses or shortfalls in collections on the Mortgage
Assets in any Trust Fund (to the extent not covered or offset by draws on any
reserve fund or under any instrument of Credit Support) will be allocated among
the respective classes of Certificates of the related series in the priority
and manner, and subject to the limitations, specified in the related Prospectus
Supplement. As described in the related Prospectus Supplement, such allocations
may be effected by a reduction in the entitlements to interest and/or
Certificate Balances of one or more such classes of Certificates, and/or by
establishing a priority of payments among such classes of Certificates.
The yield to maturity on a class of Subordinate Certificates may be
extremely sensitive to losses and shortfalls in collections on the Mortgage
Loans in the related Trust Fund.
Additional Certificate Amortization. In addition to entitling the holders
thereof to a specified portion (which may during specified periods range from
none to all) of the principal payments received on the Mortgage Assets in the
related Trust Fund, one or more classes of Certificates of any series,
including one or more classes of Offered Certificates of such series, may
provide for distributions of principal thereof from (i) amounts attributable to
interest accrued but not currently distributable on one or more
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classes of Accrual Certificates, (ii) Excess Funds or (iii) any other amounts
described in the related Prospectus Supplement. Unless otherwise specified in
the related Prospectus Supplement, "Excess Funds" will, in general, represent
that portion of the amounts distributable in respect of the Certificates of any
series on any Distribution Date that represent (i) interest received or
advanced on the Mortgage Assets in the related Trust Fund that is in excess of
the interest currently accrued on the Certificates of such series, or (ii)
Prepayment Premiums, payments from Equity Participations or any other amounts
received on the Mortgage Assets in the related Trust Fund that do not
constitute interest thereon or principal thereof.
The amortization of any class of Certificates out of the sources described
in the preceding paragraph would shorten the weighted average life of such
Certificates and, if such Certificates were purchased at a premium, reduce the
yield thereon. The related Prospectus Supplement will discuss the relevant
factors to be considered in determining whether distributions of principal of
any class of Certificates out of such sources is likely to have any material
effect on the rate at which such Certificates are amortized and the consequent
yield with respect thereto.
Optional Early Termination. Unless otherwise provided in the related
Prospectus Supplement, the Master Servicer, the Depositor or, if specified in
the related Prospectus Supplement, the holder of the residual interest in a
REMIC may at its option either (i) effect early retirement of a series of
Certificates through the purchase of the assets in the related Trust Fund or
(ii) purchase, in whole but not in part, the Certificates specified in the
related Prospectus Supplement; in each case under the circumstances and in the
manner set forth herein under "Description of the Certificates-Termination;
Retirement of Certificates" and in the related Prospectus Supplement. In the
absence of other factors, any such early retirement of a class of Offered
Certificates would shorten the weighted average life thereof and, if such
Certificates were purchased at premium, reduce the yield thereon.
THE DEPOSITOR
GMAC Commercial Mortgage Securities, Inc. is a wholly-owned subsidiary of
GMACCM which is a wholly-owned subsidiary of GMAC Mortgage Group, Inc., a
Michigan Corporation. The Depositor was incorporated in the State of Delaware
on June 22, 1995. The Depositor was organized for the purpose of serving as a
private secondary mortgage market conduit. The Depositor maintains its
principal office at 650 Dresher Road, Horsham, Pennsylvania 19044. Its
telephone number is (215) 328-3480. The Depositor does not have, nor is it
expected in the future to have, any significant assets.
GMAC COMMERCIAL MORTGAGE CORPORATION
Unless otherwise specified in the related Prospectus Supplement, GMAC
Commercial Mortgage Corporation, an affiliate of the Company and a corporation
duly organized and existing under the laws of the State of California, will act
as the Master Servicer or Manager for a series of Certificates.
GMACCM buys mortgage loans primarily through its branch network and also
from mortgage loan originators or sellers nationwide and services mortgage
loans for its own account and for others. GMACCM's principal executive offices
are located at 650 Dresher Road, Horsham, Pennsylvania 19044. Its telephone
number is (215) 328-4622. GMACCM conducts operations from its headquarters in
Pennsylvania and from offices located in California, Colorado, the District of
Columbia, Illinois, Michigan, Minnesota, Missouri, Nebraska, New York, Ohio,
Texas, Virginia, Washington and Wisconsin.
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DESCRIPTION OF THE CERTIFICATES
GENERAL
Each series of Certificates will represent the entire beneficial ownership
interest in the Trust Fund created pursuant to the related Pooling and
Servicing Agreement. As described in the related Prospectus Supplement, the
Certificates of each series, including the Offered Certificates of such series,
may consist of one or more classes of Certificates that, among other things:
(i) provide for the accrual of interest on the Certificate Balance or Notional
Amount thereof at a fixed, variable or adjustable rate; (ii) constitute Senior
Certificates or Subordinate Certificates; (iii) constitute Stripped Interest
Certificates or Stripped Principal Certificates; (iv) provide for distributions
of interest thereon or principal thereof that commence only after the
occurrence of certain events, such as the retirement of one or more other
classes of Certificates of such series; (v) provide for distributions of
principal thereof to be made, from time to time or for designated periods, at a
rate that is faster (and, in some cases, substantially faster) or slower (and,
in some cases, substantially slower) than the rate at which payments or other
collections of principal are received on the Mortgage Assets in the related
Trust Fund; (vi) provide for distributions of principal thereof to be made,
subject to available funds, based on a specified principal payment schedule or
other methodology; or (vii) provide for distributions based on collections on
the Mortgage Assets in the related Trust Fund attributable to Prepayment
Premiums and Equity Participations.
If so specified in the related Prospectus Supplement, a class of
Certificates may have two or more component parts, each having characteristics
that are otherwise described herein as being attributable to separate and
distinct classes. For example, a class of Certificates may have a Certificate
Balance on which it accrues interest at a fixed, variable or adjustable rate.
Such class of Certificates may also have certain characteristics attributable
to Stripped Interest Certificates insofar as it may also entitle the holders
thereof to distributions of interest accrued on a Notional Amount at a
different fixed, variable or adjustable rate. In addition, a class of
Certificates may accrue interest on one portion of its Certificate Balance at
one fixed, variable or adjustable rate and on another portion of its
Certificate Balance at a different fixed, variable or adjustable rate.
Each class of Offered Certificates of a series will be issued in minimum
denominations corresponding to the principal balances or, in case of certain
classes of Stripped Interest Certificates or REMIC Residual Certificates,
notional amounts or percentage interests, specified in the related Prospectus
Supplement. As provided in the related Prospectus Supplement, one or more
classes of Offered Certificates of any series may be issued in fully
registered, definitive form (such Certificates, "Definitive Certificates") or
may be offered in book-entry format (such Certificates, "Book-Entry
Certificates") through the facilities of The Depository Trust Company ("DTC").
The Offered Certificates of each series (if issued as Definitive Certificates)
may be transferred or exchanged, subject to any restrictions on transfer
described in the related Prospectus Supplement, at the location specified in
the related Prospectus Supplement, without the payment of any service charges,
other than any tax or other governmental charge payable in connection
therewith. Interests in a class of Book-Entry Certificates will be transferred
on the book-entry records of Dtc and its participating organizations.
DISTRIBUTIONS
Distributions on the Certificates of each series will be made on each
Distribution Date from the Available Distribution Amount for such series and
such Distribution Date. Unless otherwise provided in the related Prospectus
Supplement, the "Available Distribution Amount" for any series of Certificates
and any Distribution Date will refer to the total of all payments or other
collections (or advances in lieu thereof) on, under or in respect of the
Mortgage Assets and any other assets included in the related Trust Fund that
are available for distribution to the holders of Certificates of such series on
such date. The particular components of the Available Distribution Amount for
any series and Distribution Date will be more specifically described in the
related Prospectus Supplement Unless otherwise provided in the related
Prospectus Supplement, the Distribution Date for a series of Certificates will
be the 25th day of each month (or, if any such 25th day is not a business day,
the next succeeding business day), commencing in the month immediately
following the month in which such series of Certificates is issued.
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Except as otherwise specified in the related Prospectus Supplement,
distributions on the Certificates of each series (other than the final
distribution in retirement of any such Certificate) will be made to the persons
in whose names such Certificates are registered at the close of business on the
last business day of the month preceding the month in which the applicable
Distribution Date occurs (the "Record Date"). All distributions with respect to
each class of Certificates on each Distribution Date will be allocated pro rata
among the outstanding Certificates in such class in proportion to the
respective Percentage Interests evidenced thereby unless otherwise specified in
the related Prospectus Supplement. Payments will be made either by wire
transfer in immediately available funds to the account of a Certificateholder
at a bank or other entity having appropriate facilities therefor, if such
Certificateholder has provided the person required to make such payments with
wiring instructions no later than the related Record Date or such other date
specified in the related Prospectus Supplement (and, if so provided in the
related Prospectus Supplement, such Certificateholder holds Certificates in the
requisite amount or denomination specified therein), or by check mailed to the
address of such Certificateholder as it appears on the Certificate Register;
provided, however, that the final distribution in retirement of any class of
Certificates (whether Definitive Certificates or Book-Entry Certificates) will
be made only upon presentation and surrender of such Certificates at the
location specified in the notice to Certificateholders of such final
distribution. The undivided percentage interest (the "Percentage Interest")
represented by an Offered Certificate of a particular class will be equal to
the percentage obtained by dividing the initial principal balance or notional
amount of such Certificate by the initial Certificate Balance or Notional
Amount of such class.
DISTRIBUTIONS OF INTEREST ON THE CERTIFICATES
Each class of Certificates of each series (other than certain classes of
Stripped Principal Certificates and certain classes of REMIC Residual
Certificates that have no Pass-Through Rate) may have a different Pass-Through
Rate, which in each case may be fixed, variable or adjustable. The related
Prospectus Supplement will specify the Pass-Through Rate or, in the case of a
variable or adjustable Pass-Through Rate, the method for determining the
Pass-Through Rate, for each class. Unless otherwise specified in the related
Prospectus Supplement, interest on the Certificates of each series will be
calculated on the basis of a 360-day year consisting of twelve 30-day months.
Distributions of interest in respect of any class of Certificates (other
than a class of Accrual Certificates, which will be entitled to distributions
of accrued interest commencing only on the Distribution Date, or under the
circumstances, specified in the related Prospectus Supplement, and other than
any class of Stripped Principal Certificates or REMIC Residual Certificates
that is not entitled to any distributions of interest) will be made on each
Distribution Date based on the Accrued Certificate Interest for such class and
such Distribution Date, subject to the sufficiency of the portion of the
Available Distribution Amount allocable to such class on such Distribution
Date. Prior to the time interest is distributable on any class of Accrual
Certificates, the amount of Accrued Certificate Interest otherwise
distributable on such class will be added to the Certificate Balance thereof on
each Distribution Date or otherwise deferred as described in the related
Prospectus Supplement. With respect to each class of Certificates (other than
certain classes of Stripped Interest Certificates and certain classes of REMIC
Residual Certificates), the "Accrued Certificate Interest" for each
Distribution Date will be equal to interest at the applicable Pass-Through Rate
accrued for a specified period (generally the most recently ended calendar
month) on the outstanding Certificate Balance of such class of Certificates
immediately prior to such Distribution Date. Unless otherwise provided in the
related Prospectus Supplement, the Accrued Certificate Interest for each
Distribution Date on a class of Stripped Interest Certificates will be
similarly calculated except that it will accrue on a Notional Amount that is
either (i) based on the principal balances of some or all of the Mortgage
Assets in the related Trust Fund or (ii) equal to the Certificate Balances of
one or more other classes of Certificates of the same series. Reference to a
Notional Amount with respect to a class of Stripped Interest Certificates is
solely for convenience in making certain calculations and does not represent
the right to receive any distributions of principal. If so specified in the
related Prospectus Supplement, the amount of Accrued Certificate Interest that
is otherwise distributable on (or, in the case of Accrual Certificates, that
may otherwise be added to the Certificate Balance of) one or more classes of
the Certificates of a series may be reduced to the extent
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that any Prepayment Interest Shortfalls, as described under "Yield and Maturity
Considerations--Certain Shortfalls in Collections of Interest", exceed the
amount of any sums that are applied to offset the amount of such shortfalls.
The particular manner in which such shortfalls will be allocated among some or
all of the classes of Certificates of that series will be specified in the
related Prospectus Supplement. The related Prospectus Supplement will also
describe the extent to which the amount of Accrued Certificate Interest that is
otherwise distributable on (or, in the case of Accrual Certificates, that may
otherwise be added to the Certificate Balance of) a class of Offered
Certificates may be reduced as a result of any other contingencies, including
delinquencies, losses and deferred interest on or in respect of the Mortgage
Assets in the related Trust Fund. Unless otherwise provided in the related
Prospectus Supplement, any reduction in the amount of Accrued Certificate
Interest otherwise distributable on a class of Certificates by reason of the
allocation to such class of a portion of any deferred interest on or in respect
of the Mortgage Assets in the related Trust Fund will result in a corresponding
increase in the Certificate Balance of such class. See "Risk Factors--Yield and
Prepayment Considerations" and "Yield and Maturity Considerations--Certain
Shortfalls in Collections of Interest".
DISTRIBUTIONS OF PRINCIPAL OF THE CERTIFICATES
Each class of Certificates of each series (other than certain classes of
Stripped Interest Certificates and certain classes of REMIC Residual
Certificates) will have a Certificate Balance, which, at any time, will equal
the then maximum amount that the holders of Certificates of such class will be
entitled to receive as principal out of the future cash flow on the Mortgage
Assets and other assets included in the related Trust Fund. The outstanding
Certificate Balance of a class of Certificates will be reduced by distributions
of principal made thereon from time to time and, if so provided in the related
Prospectus Supplement, further by any losses incurred in respect of the related
Mortgage Assets allocated thereto from time to time. In turn, the outstanding
Certificate Balance of a class of Certificates may be increased as a result of
any deferred interest on or in respect of the related Mortgage Assets being
allocated thereto from time to time, and will be increased, in the case of a
class of Accrual Certificates prior to the Distribution Date on which
distributions of interest thereon are required to commence, by the amount of
any Accrued Certificate Interest in respect thereof (reduced as described
above). Unless otherwise provided in the related Prospectus Supplement, the
initial aggregate Certificate Balance of all classes of a series of
Certificates will not be greater than the aggregate outstanding principal
balance of the related Mortgage Assets as of a specified date (the "Cut-Off
Date"), after application of scheduled payments due on or before such date,
whether or not received. The initial Certificate Balance of each class of a
series of Certificates will be specified in the related Prospectus Supplement.
As and to the extent described in the related Prospectus Supplement,
distributions of principal with respect to a series of Certificates will be
made on each Distribution Date to the holders of the class or classes of
Certificates of such series entitled thereto until the Certificate Balances of
such Certificates have been reduced to zero. Distributions of principal with
respect to one or more classes of Certificates may be made at a rate that is
faster (and, in some cases, substantially faster) than the rate at which
payments or other collections of principal are received on the Mortgage Assets
in the related Trust Fund. Distributions of principal with respect to one or
more classes of Certificates may not commence until the occurrence of certain
events, such as the retirement of one or more other classes of Certificates of
the same series, or may be made at a rate that is slower (and, in some cases,
substantially slower) than the rate at which payments or other collections of
principal are received on the Mortgage Assets in the related Trust Fund.
Distributions of principal with respect to one or more classes of Certificates
(each such class, a "Controlled Amortization Class") may be made, subject to
available funds, based on a specified principal payment schedule. Distributions
of principal with respect to one or more classes of Certificates (each such
class, a "Companion Class") may be contingent on the specified principal
payment schedule for a Controlled Amortization Class of the same series and the
rate at which payments and other collections of principal on the Mortgage
Assets in the related Trust Fund are received. Unless otherwise specified in
the related Prospectus Supplement, distributions of principal of any class of
Offered Certificates will be made on a pro rata basis among all of the
Certificates of such class.
ALLOCATION OF LOSSES AND SHORTFALLS
The amount of any losses or shortfalls in collections on the Mortgage
Assets in any Trust Fund (to the extent not covered or offset by draws on any
reserve fund or under any instrument of Credit Support)
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will be allocated among the respective classes of Certificates of the related
series in the priority and manner, and subject to the limitations, specified in
the related Prospectus Supplement. As described in the related Prospectus
Supplement, such allocations may be effected by a reduction in the entitlements
to interest and/or the Certificate Balances of one or more such classes of
Certificates, or by establishing a priority of payments among such classes of
Certificates. See "Description of Credit Support".
ADVANCES IN RESPECT OF DELINQUENCIES
If and to the extent provided in the related Prospectus Supplement, if a
Trust Fund includes Mortgage Loans, the Master Servicer, a Special Servicer,
the Trustee, the Fiscal Agent (if any), any provider of Credit Support and/or
any other specified person may be obligated to advance, or have the option of
advancing, on or before each Distribution Date, from its or their own funds or
from excess funds held in the related Certificate Account that are not part of
the Available Distribution Amount for the related series of Certificates for
such Distribution Date, an amount up to the aggregate of any payments of
principal (other than the principal portion of any balloon payments) and
interest that were due on or in respect of such Mortgage Loans during the
related Due Period and were delinquent on the related Determination Date.
Advances are intended to maintain a regular flow of scheduled interest and
principal payments to holders of the class or classes of Certificates entitled
thereto, rather than to guarantee or insure against losses. Accordingly, all
advances made out of a specific entity's own funds will be reimbursable out of
related recoveries on the Mortgage Loans (including amounts drawn under any
fund or instrument constituting Credit Support) respecting which such advances
were made (as to any Mortgage Loan, "Related Proceeds") and such other specific
sources as may be identified in the related Prospectus Supplement, including in
the case of a series that includes one or more classes of Subordinate
Certificates, collections on other Mortgage Assets in the related Trust Fund
that would otherwise be distributable to the holders of one or more classes of
such Subordinate Certificates. No advance will be required to be made by a
Master Servicer, Special Servicer, Fiscal Agent or Trustee if, in the judgment
of the Master Servicer, Special Servicer, Fiscal Agent or Trustee, as the case
may be, such advance would not be recoverable from Related Proceeds or another
specifically identified source (any such advance, a "Nonrecoverable Advance");
and, if previously made by a Master Servicer, Special Servicer, Fiscal Agent or
Trustee, a Nonrecoverable Advance will be reimbursable thereto from any amounts
in the related Certificate Account prior to any distributions being made to the
related series of Certificateholders.
If advances have been made by a Master Servicer, Special Servicer, Fiscal
Agent, Trustee or other entity from excess funds in a Certificate Account, such
Master Servicer, Special Servicer, Fiscal Agent, Trustee or other entity, as
the case may be, will be required to replace such funds in such Certificate
Account on any future Distribution Date to the extent that funds in such
Certificate Account on such Distribution Date are less than payments required
to be made to the related series of Certificateholders on such date. If so
specified in the related Prospectus Supplement, the obligation of a Master
Servicer, Special Servicer, Fiscal Agent, Trustee or other entity to make
advances may be secured by a cash advance reserve fund or a surety bond. If
applicable, information regarding the characteristics of, and the identity of
any obligor on, any such surety bond, will be set forth in the related
Prospectus Supplement.
If and to the extent so provided in the related Prospectus Supplement, any
entity making advances will be entitled to receive interest on certain or all
of such advances for a specified period during which such advances are
outstanding at the rate specified in such Prospectus Supplement, and such
entity will be entitled to payment of such interest periodically from general
collections on the Mortgage Loans in the related Trust Fund prior to any
payment to the related series of Certificateholders or as otherwise provided in
the related Pooling and Servicing Agreement and described in such Prospectus
Supplement.
The Prospectus Supplement for any series of Certificates evidencing an
interest in a Trust Fund that includes MBS will describe any comparable
advancing obligation of a party to the related Pooling and Servicing Agreement
or of a party to the related MBS Agreement.
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REPORTS TO CERTIFICATEHOLDERS
On each Distribution Date, together with the distribution to the holders
of each class of the Offered Certificates of a series, a Master Servicer,
Manager or Trustee, as provided in the related Prospectus Supplement, will
forward to each such holder, a statement (a "Distribution Date Statement")
that, unless otherwise provided in the related Prospectus Supplement, will set
forth, among other things, in each case to the extent applicable:
(i) the amount of such distribution to holders of such class of Offered
Certificates that was applied to reduce the Certificate Balance thereof;
(ii) the amount of such distribution to holders of such class of Offered
Certificates that was applied to pay Accrued Certificate Interest;
(iii) the amount, if any, of such distribution to holders of such class
of Offered Certificates that was allocable to (A) Prepayment Premiums and
(B) payments on account of Equity Participations;
(iv) the amount, if any, by which such distribution is less than the
amounts to which holders of such class of Offered Certificates are
entitled;
(v) if the related Trust Fund includes Mortgage Loans, the aggregate
amount of advances included in such distribution;
(vi) if the related Trust Fund includes Mortgage Loans, the amount of
servicing compensation received by the related Master Servicer (and, if
payable directly out of the related Trust Fund, by any Special Servicer and
any Sub-Servicer) and, if the related Trust Fund includes MBS, the amount
of administrative compensation received by the REMIC Administrator;
(vii) information regarding the aggregate principal balance of the
related Mortgage Assets on or about such Distribution Date;
(viii) if the related Trust Fund includes Mortgage Loans, information
regarding the number and aggregate principal balance of such Mortgage Loans
that are delinquent;
(ix) if the related Trust Fund includes Mortgage Loans, information
regarding the aggregate amount of losses incurred and principal prepayments
made with respect to such Mortgage Loans during the related Prepayment
Period (that is, the specified period, generally corresponding to the
related Due Period, during which prepayments and other unscheduled
collections on the Mortgage Loans in the related Trust Fund must be
received in order to be distributed on a particular Distribution Date);
(x) the Certificate Balance or Notional Amount, as the case may be, of
such class of Certificates at the close of business on such Distribution
Date, separately identifying any reduction in such Certificate Balance or
Notional Amount due to the allocation of any losses in respect of the
related Mortgage Assets, any increase in such Certificate Balance or
Notional Amount due to the allocation of any negative amortization in
respect of the related Mortgage Assets and any increase in the Certificate
Balance of a class of Accrual Certificates, if any, in the event that
Accrued Certificate Interest has been added to such balance;
(xi) if such class of Offered Certificates has a variable Pass-Through
Rate or an adjustable Pass-Through Rate, the Pass-Through Rate applicable
thereto for such Distribution Date and, if determinable, for the next
succeeding Distribution Date;
(xii) the amount deposited in or withdrawn from any reserve fund on such
Distribution Date, and the amount remaining on deposit in such reserve fund
as of the close of business on such Distribution Date;
(xiii) if the related Trust Fund includes one or more instruments of
Credit Support, such as a letter of credit, an insurance policy and/or a
surety bond, the amount of coverage under each such instrument as of the
close of business on such Distribution Date; and
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(xiv) the amount of Credit Support being afforded by any classes of
Subordinate Certificates.
In the case of information furnished pursuant to subclauses (i)-(iii)
above, the amounts will be expressed as a dollar amount per minimum
denomination of the relevant class of Offered Certificates or as a percentage.
The Prospectus Supplement for each series of Certificates may describe
additional information to be included in reports to the holders of the Offered
Certificates of such series.
Within a reasonable period of time after the end of each calendar year,
the Master Servicer, Manager or Trustee for a series of Certificates, as the
case may be, will be required to furnish to each person who at any time during
the calendar year was a holder of an Offered Certificate of such series a
statement containing the information set forth in subclauses (i)-(iii) above,
aggregated for such calendar year or the applicable portion thereof during
which such person was a Certificateholder. Such obligation will be deemed to
have been satisfied to the extent that substantially comparable information is
provided pursuant to any requirements of the Code as are from time to time in
force. See, however, "--Book-Entry Registration and Definitive Certificates"
below.
If the Trust Fund for a series of Certificates includes MBS, the ability
of the related Master Servicer, Manager or Trustee, as the case may be, to
include in any Distribution Date Statement information regarding the mortgage
loans underlying such MBS will depend on the reports received with respect to
such MBS. In such cases, the related Prospectus Supplement will describe the
loan-specific information to be included in the Distribution Date Statements
that will be forwarded to the holders of the Offered Certificates of that
series in connection with distributions made to them.
TERMINATION; RETIREMENT OF CERTIFICATES
The obligations created by the Pooling and Servicing Agreement for each
series of Certificates (other than limited payment and notice obligations of
the applicable parties) will terminate upon the payment to Certificateholders
of that series of all amounts held in the Certificate Account or by the Master
Servicer and required to be paid to them pursuant to such Pooling and Servicing
Agreement following the earlier of (i) the final payment or other liquidation
or disposition (or any advance with respect thereto) of the last Mortgage Asset
subject thereto or of any property acquired upon foreclosure or deed in lieu of
foreclosure of any Mortgage Loan subject thereto and (ii) the purchase by the
Master Servicer, the Depositor or, if specified in the related Prospectus
Supplement, by the holder of the REMIC Residual Certificates (see "Certain
Federal Income Tax Consequences" below) from the Trust Fund for such series of
all remaining Mortgage Assets therein and property, if any, acquired in respect
of the Mortgage Loans therein. In addition to the foregoing, the Master
Servicer or the Depositor will have the option to purchase, in whole but not in
part, the Certificates specified in the related Prospectus Supplement in the
manner set forth in the related Prospectus Supplement. Upon the purchase of
such Certificates or at any time thereafter, at the option of the Master
Servicer or the Depositor, the Mortgage Assets may be sold, thereby effecting a
retirement of the Certificates and the termination of the Trust Fund, or the
Certificates so purchased may be held or resold by the Master Servicer or the
Depositor. In no event, however, will the trust created continue beyond the
expiration of 21 years from the death of the survivor of certain persons named
in such Pooling and Servicing Agreement. Written notice of termination of the
Pooling and Servicing Agreement will be given to each Certificateholder, and
the final distribution will be made only upon surrender and cancellation of the
Certificates at an office or agency appointed by the Trustee which will be
specified in the notice of termination. If the Certificateholders are permitted
to terminate the trust under the applicable Pooling and Servicing Agreement, a
penalty may be imposed upon the Certificateholders based upon the fee that
would be foregone by the Master Servicer and/or any Special Servicer because of
such termination.
Any such purchase of Mortgage Assets and property acquired in respect of
Mortgage Loans evidenced by a series of Certificates shall be made at the
option of the Master Servicer, the Depositor or, if applicable, the holder of
the REMIC Residual Certificates at the price specified in the related
Prospectus Supplement. The exercise of such right will effect early retirement
of the Certificates of that series, but the right of the Master Servicer, the
Depositor or, if applicable, such holder to so purchase is subject to the
aggregate principal balance of the Mortgage Assets for that series as of the
Distribution Date on which the purchase proceeds are to be distributed to
Certificateholders being less than the
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percentage specified in the related Prospectus Supplement of the aggregate
principal balance of the Mortgage Assets at the Cut-off Date for that series.
The Prospectus Supplement for each series of Certificates will set forth the
amounts that the holders of such Certificates will be entitled to receive upon
such early retirement. Such early termination may adversely affect the yield to
holders of certain classes of such Certificates. If a REMIC election has been
made, the termination of the related Trust Fund will be effected in a manner
consistent with applicable federal income tax regulations and its status as a
REMIC.
BOOK-ENTRY REGISTRATION AND DEFINITIVE CERTIFICATES
If so provided in the Prospectus Supplement for a series of Certificates,
one or more classes of the Offered Certificates of such series will be offered
in book-entry format through the facilities of DTC, and each such class will be
represented by one or more global Certificates registered in the name of DTC or
its nominee.
DTC is a limited-purpose trust company organized under the New York
Banking Law, a "banking corporation" within the meaning of the New York Banking
Law, a member of the Federal Reserve System, a "clearing corporation" within
the meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Exchange Act. DTC
was created to hold securities for its participating organizations
("Participants") and facilitate the clearance and settlement of securities
transactions between Participants through electronic computerized book-entry
changes in their accounts, thereby eliminating the need for physical movement
of securities certificates. "Direct Participants", which maintain accounts with
DTC, include securities brokers and dealers, banks, trust companies and
clearing corporations and may include certain other organizations. DTC is owned
by a number of its Direct Participants and by the New York Stock Exchange,
Inc., the American Stock Exchange, Inc. and the National Association of
Securities Dealers, Inc. Access to the DTC system also is available to others
such as banks, brokers, dealers and trust companies that clear through or
maintain a custodial relationship with a Direct Participant, either directly or
indirectly ("Indirect Participants"). The rules applicable to DTC and its
Participants are on file with the Commission.
Purchases of Book-Entry Certificates under the DTC system must be made by
or through Direct Participants, which will receive a credit for the Book-Entry
Certificates on DTC's records. The ownership interest of each actual purchaser
of a Book-Entry Certificate (a "Certificate Owner") is in turn to be recorded
on the Direct and Indirect Participants' records. Certificate Owners will not
receive written confirmation from DTC of their purchases, but Certificate
Owners are expected to receive written confirmations providing details of such
transactions, as well as periodic statements of their holdings, from the Direct
or Indirect Participant through which each Certificate Owner entered into the
transaction. Transfers of ownership interest in the Book-Entry Certificates are
to be accomplished by entries made on the books of Participants acting on
behalf of Certificate Owners. Certificate Owners will not receive certificates
representing their ownership interests in the Book-Entry Certificates, except
in the event that use of the book-entry system for the Book-Entry Certificates
of any series is discontinued as described below.
DTC has no knowledge of the actual Certificate Owners of the Book-Entry
Certificates; DTC's records reflect only the identity of the Direct
Participants to whose accounts such Certificates are credited, which may or may
not be the Certificate Owners. The Participants will remain responsible for
keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Certificate Owners will be governed
by arrangements among them, subject to any statutory or regulatory requirements
as may be in effect from time to time.
Distributions on the Book-Entry Certificates will be made to DTC. DTC's
practice is to credit Direct Participants' accounts on the related Distribution
Date in accordance with their respective holdings shown on DTC's records unless
DTC has reason to believe that it will not receive payment on such date.
Disbursement of such distributions by Participants to Certificate Owners will
be governed by standing
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instructions and customary practices, as is the case with securities held for
the accounts of customers in bearer form or registered in "street name", and
will be the responsibility of each such Participant (and not of DTC, the
Depositor or any Trustee or Master Servicer), subject to any statutory or
regulatory requirements as may be in effect from time to time. Under a
book-entry system, Certificate Owners may receive payments after the related
Distribution Date.
Unless otherwise provided in the related Prospectus Supplement, the only
"Certificateholder" (as such term is used in the related Pooling and Servicing
Agreement) of Book-Entry Certificates will be the nominee of DTC, and the
Certificate Owners will not be recognized as Certificateholders under the
Pooling and Servicing Agreement. Certificate Owners will be permitted to
exercise the rights of Certificateholders under the related Pooling and
Servicing Agreement only indirectly through the Participants who in turn will
exercise their rights through DTC. The Depositor is informed that DTC will take
action permitted to be taken by a Certificateholder under a Pooling and
Servicing Agreement only at the direction of one or more Participants to whose
account with DTC interests in the Book-Entry Certificates are credited.
Because DTC can act only on behalf of Participants, who in turn act on
behalf of Indirect Participants and certain Certificate Owners, the ability of
a Certificate Owner to pledge its interest in Book-Entry Certificates to
persons or entities that do not participate in the DTC system, or otherwise
take actions in respect of its interest in Book-Entry Certificates, may be
limited due to the lack of a physical certificate evidencing such interest.
Unless otherwise specified in the related Prospectus Supplement,
Certificates initially issued in book-entry form will be issued as Definitive
Certificates to Certificate Owners or their nominees, rather than to DTC or its
nominee, only if (i) the Depositor advises the Trustee in writing that DTC is
no longer willing or able to discharge properly its responsibilities as
depository with respect to such Certificates and the Depositor is unable to
locate a qualified successor or (ii) the Depositor, at its option, elects to
terminate the book-entry system through DTC with respect to such Certificates.
Upon the occurrence of either of the events described in the preceding
sentence, DTC will be required to notify all Participants of the availability
through DTC of Definitive Certificates. Upon surrender by DTC of the
certificate or certificates representing a class of Book-Entry Certificates,
together with instructions for registration, the Trustee for the related series
or other designated party will be required to issue to the Certificate Owners
identified in such instructions the Definitive Certificates to which they are
entitled, and thereafter the holders of such Definitive Certificates will be
recognized as Certificateholders under the related Pooling and Servicing
Agreement.
THE POOLING AND SERVICING AGREEMENTS
GENERAL
The Certificates of each series will be issued pursuant to a Pooling and
Servicing Agreement. In general, the parties to a Pooling and Servicing
Agreement will include the Depositor, the Trustee, the Master Servicer and, in
some cases, a Special Servicer appointed as of the date of the Pooling and
Servicing Agreement. However, a Pooling and Servicing Agreement that relates to
a Trust Fund that includes MBS may include a Manager as a party, but may not
include a Master Servicer or other servicer as a party. All parties to each
Pooling and Servicing Agreement under which Certificates of a series are issued
will be identified in the related Prospectus Supplement. If so specified in the
related Prospectus Supplement, an affiliate of the Depositor, or the Mortgage
Asset Seller or an affiliate thereof, may perform the functions of Master
Servicer, Special Servicer or Manager. Any party to a Pooling and Servicing
Agreement or any affiliate thereof may own Certificates issued thereunder.
A form of a pooling and servicing agreement has been filed as an exhibit
to the Registration Statement of which this Prospectus is a part. However, the
provisions of each Pooling and Servicing Agreement will vary depending upon the
nature of the Certificates to be issued thereunder and the nature of the
related Trust Fund. The following summaries describe certain provisions that
may appear in a Pooling and Servicing Agreement under which Certificates that
evidence interests in Mortgage Loans will
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be issued. The Prospectus Supplement for a series of Certificates will describe
any provision of the related Pooling and Servicing Agreement that materially
differs from the description thereof contained in this Prospectus and, if the
related Trust Fund includes MBS, will summarize all of the material provisions
of the related Pooling and Servicing Agreement. The summaries herein do not
purport to be complete and are subject to, and are qualified in their entirety
by reference to, all of the provisions of the Pooling and Servicing Agreement
for each series of Certificates and the description of such provisions in the
related Prospectus Supplement. The Depositor will provide a copy of the Pooling
and Servicing Agreement (without exhibits) that relates to any series of
Certificates without charge upon written request of a holder of a Certificate
of such series addressed to it at its principal executive offices specified
herein under "The Depositor".
ASSIGNMENT OF MORTGAGE LOANS; REPURCHASES
At the time of issuance of any series of Certificates, the Depositor will
assign (or cause to be assigned) to the designated Trustee the Mortgage Loans
to be included in the related Trust Fund, together with, unless otherwise
specified in the related Prospectus Supplement, all principal and interest to
be received on or with respect to such Mortgage Loans after the Cut-off Date,
other than principal and interest due on or before the Cut-off Date. The
Trustee will, concurrently with such assignment, deliver the Certificates to or
at the direction of the Depositor in exchange for the Mortgage Loans and the
other assets to be included in the Trust Fund for such series. Each Mortgage
Loan will be identified in a schedule appearing as an exhibit to the related
Pooling and Servicing Agreement. Such schedule generally will include detailed
information that pertains to each Mortgage Loan included in the related Trust
Fund, which information will typically include the address of the related
Mortgaged Property and type of such property; the Mortgage Rate and, if
applicable, the applicable index, gross margin, adjustment date and any rate
cap information; the original and remaining term to maturity; the original
amortization term; and the original and outstanding principal balance.
In addition, unless otherwise specified in the related Prospectus
Supplement, the Depositor will, as to each Mortgage Loan to be included in a
Trust Fund, deliver, or cause to be delivered, to the related Trustee (or to a
custodian appointed by the Trustee as described below) the Mortgage Note
endorsed, without recourse, either in blank or to the order of such Trustee (or
its nominee), the Mortgage with evidence of recording indicated thereon (except
for any Mortgage not returned from the public recording office), an assignment
of the Mortgage in blank or to the Trustee (or its nominee) in recordable form,
together with any intervening assignments of the Mortgage with evidence of
recording thereon (except for any such assignment not returned from the public
recording office), and, if applicable, any riders or modifications to such
Mortgage Note and Mortgage, together with certain other documents at such times
as set forth in the related Pooling and Servicing Agreement. Such assignments
may be blanket assignments covering Mortgages on Mortgaged Properties located
in the same county, if permitted by law. Notwithstanding the foregoing, a Trust
Fund may include Mortgage Loans where the original Mortgage Note is not
delivered to the Trustee if the Depositor delivers, or causes to be delivered,
to the related Trustee (or such custodian) a copy or a duplicate original of
the Mortgage Note, together with an affidavit certifying that the original
thereof has been lost or destroyed. In addition, if the Depositor cannot
deliver, with respect to any Mortgage Loan, the Mortgage or any intervening
assignment with evidence of recording thereon concurrently with the execution
and delivery of the related Pooling and Servicing Agreement because of a delay
caused by the public recording office, the Depositor will deliver, or cause to
be delivered, to the related Trustee (or such custodian) a true and correct
photocopy of such Mortgage or assignment as submitted for recording. The
Depositor will deliver, or cause to be delivered, to the related Trustee (or
such custodian) such Mortgage or assignment with evidence of recording
indicated thereon after receipt thereof from the public recording office. If
the Depositor cannot deliver, with respect to any Mortgage Loan, the Mortgage
or any intervening assignment with evidence of recording thereon concurrently
with the execution and delivery of the related Pooling and Servicing Agreement
because such Mortgage or assignment has been lost, the Depositor will deliver,
or cause to be delivered, to the related Trustee (or such custodian) a true and
correct photocopy of such Mortgage or assignment with evidence of recording
thereon. Unless otherwise specified in the related Prospectus Supplement,
assignments of Mortgage to the Trustee (or its nominee) will be recorded in the
appropriate public
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recording office, except in states where, in the opinion of counsel acceptable
to the Trustee, such recording is not required to protect the Trustee's
interests in the Mortgage Loan against the claim of any subsequent transferee
or any successor to or creditor of the Depositor or the originator of such
Mortgage Loan.
The Trustee (or a custodian appointed by the Trustee) for a series of
Certificates will be required to review the Mortgage Loan documents delivered
to it within a specified period of days after receipt thereof, and the Trustee
(or such custodian) will hold such documents in trust for the benefit of the
Certificateholders of such series. Unless otherwise specified in the related
Prospectus Supplement, if any such document is found to be missing or
defective, and such omission or defect, as the case may be, materially and
adversely affects the interests of the Certificateholders of the related
series, the Trustee (or such custodian) will be required to notify the Master
Servicer and the Depositor, and one of such persons will be required to notify
the relevant Mortgage Asset Seller. In that case, and if the Mortgage Asset
Seller cannot deliver the document or cure the defect within a specified number
of days after receipt of such notice, then, except as otherwise specified below
or in the related Prospectus Supplement, the Mortgage Asset Seller will be
obligated to repurchase the related Mortgage Loan from the Trustee at a price
generally equal to the unpaid principal balance thereof, together with accrued
but unpaid interest through a date on or about the date of purchase, or at such
other price as will be specified in the related Prospectus Supplement (in any
event, the "Purchase Price"). If so provided in the Prospectus Supplement for a
series of Certificates, a Mortgage Asset Seller, in lieu of repurchasing a
Mortgage Loan as to which there is missing or defective loan documentation,
will have the option, exercisable upon certain conditions and/or within a
specified period after initial issuance of such series of Certificates, to
replace such Mortgage Loan with one or more other mortgage loans, in accordance
with standards that will be described in the Prospectus Supplement. Unless
otherwise specified in the related Prospectus Supplement, this repurchase or
substitution obligation will constitute the sole remedy to holders of the
Certificates of any series or to the related Trustee on their behalf for
missing or defective Mortgage Asset documentation and neither the Depositor
nor, unless it is the Mortgage Asset Seller, the Master Servicer will be
obligated to purchase or replace a Mortgage Loan if a Mortgage Asset Seller
defaults on its obligation to do so.
The Trustee will be authorized at any time to appoint one or more
custodians pursuant to a custodial agreement to hold title to the Mortgage
Loans in any Trust Fund, and to maintain possession of and, if applicable, to
review, the documents relating to such Mortgage Loans, in any case as the agent
of the Trustee. The identity of any such custodian to be appointed on the date
of initial issuance of the Certificates will be set forth in the related
Prospectus Supplement. Any such custodian may be an affiliate of the Depositor
or the Master Servicer.
REPRESENTATIONS AND WARRANTIES; REPURCHASES
Unless otherwise provided in the Prospectus Supplement for a series of
Certificates, the Depositor will, with respect to each Mortgage Loan in the
related Trust Fund, make or assign, or cause to be made or assigned, certain
representations and warranties (the person making such representations and
warranties, the "Warranting Party") covering, by way of example: (i) the
accuracy of the information set forth for such Mortgage Loan on the schedule of
Mortgage Loans appearing as an exhibit to the related Pooling and Servicing
Agreement; (ii) the enforceability of the related Mortgage Note and Mortgage
and the existence of title insurance insuring the lien priority of the related
Mortgage; (iii) the Warranting Party's title to the Mortgage Loan and the
authority of the Warranting Party to sell the Mortgage Loan; and (iv) the
payment status of the Mortgage Loan. It is expected that in most cases the
Warranting Party will be the Mortgage Asset Seller; however, the Warranting
Party may also be an affiliate of the Mortgage Asset Seller, the Depositor or
an affiliate of the Depositor, the Master Servicer, a Special Servicer or
another person acceptable to the Depositor. The Warranting Party, if other than
the Mortgage Asset Seller, will be identified in the related Prospectus
Supplement.
Unless otherwise provided in the related Prospectus Supplement, the Master
Servicer and/or Trustee will be required to notify promptly any Warranting
Party of any breach of any representation or warranty made by it in respect of
a Mortgage Loan that materially and adversely affects the interests of
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the Certificateholders of the related series. If such Warranting Party cannot
cure such breach within a specified period following the date on which it was
notified of such breach, then, unless otherwise provided in the related
Prospectus Supplement, it will be obligated to repurchase such Mortgage Loan
from the Trustee at the applicable Purchase Price. If so provided in the
Prospectus Supplement for a series of Certificates, a Warranting Party, in lieu
of repurchasing a Mortgage Loan as to which a breach has occurred, will have
the option, exercisable upon certain conditions and/or within a specified
period after initial issuance of such series of Certificates, to replace such
Mortgage Loan with one or more other mortgage loans, in accordance with
standards that will be described in the Prospectus Supplement. Unless otherwise
specified in the related Prospectus Supplement, this repurchase or substitution
obligation will constitute the sole remedy available to holders of the
Certificates of any series or to the related Trustee on their behalf for a
breach of representation and warranty by a Warranting Party and neither the
Depositor nor the Master Servicer, in either case unless it is the Warranting
Party, will be obligated to purchase or replace a Mortgage Loan if a Warranting
Party defaults on its obligation to do so.
Representations and warranties may be made in respect of a Mortgage Loan
as of a date prior to the date upon which the related series of Certificates is
issued, and thus may not address events that may occur following the date as of
which they were made. The date as of which the representations and warranties
regarding the Mortgage Loans in any Trust Fund were made will be specified in
the related Prospectus Supplement.
COLLECTION AND OTHER SERVICING PROCEDURES
Unless otherwise specified in the related Prospectus Supplement, the
Master Servicer for any Mortgage Pool, directly or through Sub-Servicers, will
be obligated under the related Pooling and Servicing Agreement to service and
administer the Mortgage Loans in such Mortgage Pool for the benefit of the
related Certificateholders, in accordance with applicable law and with the
terms of such Pooling and Servicing Agreement, such Mortgage Loans and any
instrument of Credit Support included in the related Trust Fund. Subject to the
foregoing, the Master Servicer will have full power and authority to do any and
all things in connection with such servicing and administration that it may
deem necessary and desirable.
As part of its servicing duties, a Master Servicer will be required to
make reasonable efforts to collect all payments called for under the terms and
provisions of the Mortgage Loans that it services and will be obligated to
follow such collection procedures as it would follow with respect to mortgage
loans that are comparable to such Mortgage Loans and held for its own account,
provided (i) such procedures are consistent with the terms of the related
Pooling and Servicing Agreement, and (ii) do not impair recovery under any
instrument of Credit Support included in the related Trust Fund. Consistent
with the foregoing, the Master Servicer will be permitted, in its discretion,
unless otherwise specified in the related Prospectus Supplement, to waive any
Prepayment Premium, late payment charge or other charge in connection with any
Mortgage Loan.
Under a Pooling and Servicing Agreement, a Master Servicer or Special
Servicer will be granted certain discretion to extend relief to Mortgagors
whose payments become delinquent. Unless otherwise specified in the related
Prospectus Supplement, if a material default occurs or a payment default is
reasonably foreseeable with respect to a Mortgage Loan, the Master Servicer or
Special Servicer will be permitted, subject to any specific limitations set
forth in the related Pooling and Servicing Agreement and described in the
related Prospectus Supplement, to modify, waive or amend any term of such
Mortgage Loan, including deferring payments, extending the stated maturity date
or otherwise adjusting the payment schedule, provided that such modification,
waiver or amendment (i) is reasonably likely to produce a greater recovery with
respect to such Mortgage Loan on a present value basis than would liquidation
and (ii) will not adversely affect the coverage under any applicable instrument
of Credit Support.
A mortgagor's failure to make required Mortgage Loan payments may mean
that operating income is insufficient to service the mortgage debt, or may
reflect the diversion of that income from the servicing of the mortgage debt.
In addition, a mortgagor that is unable to make Mortgage Loan payments may also
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be unable to make timely payment of taxes and otherwise to maintain and insure
the related Mortgaged Property. In general, the related Master Servicer will be
required to monitor any Mortgage Loan that is in default, evaluate whether the
causes of the default can be corrected over a reasonable period without
significant impairment of the value of the related Mortgaged Property, initiate
corrective action in cooperation with the Mortgagor if cure is likely, inspect
the related Mortgaged Property and take such other actions as it deems
necessary and appropriate. A significant period of time may elapse before the
Master Servicer is able to assess the success of any such corrective action or
the need for additional initiatives. The time within which the Master Servicer
can make the initial determination of appropriate action, evaluate the success
of corrective action, develop additional initiatives, institute foreclosure
proceedings and actually foreclose (or accept a deed to a Mortgaged Property in
lieu of foreclosure) on behalf of the Certificateholders of the related series
may vary considerably depending on the particular Mortgage Loan, the Mortgaged
Property, the mortgagor, the presence of an acceptable party to assume the
Mortgage Loan and the laws of the jurisdiction in which the Mortgaged Property
is located. If a mortgagor files a bankruptcy petition, the Master Servicer may
not be permitted to accelerate the maturity of the Mortgage Loan or to
foreclose on the related Mortgaged Property for a considerable period of time.
See "Certain Legal Aspects of Mortgage Loans--Bankruptcy Laws."
Mortgagors may, from time to time, request partial releases of the
Mortgaged Properties, easements, consents to alteration or demolition and other
similar matters. The Master Servicer may approve such a request if it has
determined, exercising its business judgment in the same manner as it would if
it were the owner of the related Mortgage Loan, that such approval will not
adversely affect the security for, or the timely and full collectability of,
the related Mortgage Loan; provided, however, that the Master Servicer will not
approve such a request if a REMIC election has been made and such request would
not (in the opinion of independent counsel) result in the imposition of a tax
on the Trust Fund or cause the Trust Fund (or any designated portion thereof)
to fail to qualify as a REMIC under the Code at any time that any Certificate
is outstanding. Any fee collected by the Master Servicer for processing such
request will be retained by the Master Servicer as additional servicing
compensation.
In the case of Mortgage Loans secured by junior liens on the related
Mortgaged Properties, unless otherwise provided in the related Prospectus
Supplement, the Master Servicer will be required to file (or cause to be filed)
of record a request for notice of any action by a superior lienholder under the
Senior Lien for the protection of the related Trustee's interest, where
permitted by local law and whenever applicable state law does not require that
a junior lienholder be named as a party defendant in foreclosure proceedings in
order to foreclose such junior lienholder's equity of redemption. Unless
otherwise specified in the related Prospectus Supplement, the Master Servicer
also will be required to notify any superior lienholder in writing of the
existence of the Mortgage Loan and request notification of any action (as
described below) to be taken against the mortgagor or the Mortgaged Property by
the superior lienholder. If the Master Servicer is notified that any superior
lienholder has accelerated or intends to accelerate the obligations secured by
the related Senior Lien, or has declared or intends to declare a default under
the mortgage or the promissory note secured thereby, or has filed or intends to
file an election to have the related Mortgaged Property sold or foreclosed,
then, unless otherwise specified in the related Prospectus Supplement, the
Master Servicer will be required to take, on behalf of the related Trust Fund,
whatever actions are necessary to protect the interests of the related
Certificateholders, and/or to preserve the security of the related Mortgage
Loan, subject to the application of the REMIC Provisions. Unless otherwise
specified in the related Prospectus Supplement, the Master Servicer will be
required to advance the necessary funds to cure the default or reinstate the
Senior Lien, if such advance is in the best interests of the related
Certificateholders and the Master Servicer determines such advances are
recoverable out of payments on or proceeds of the related Mortgage Loan.
The Master Servicer for any Trust Fund, directly or through Sub-Servicers,
will also be required to perform as to the Mortgage Loans in such Trust Fund
various other customary functions of a servicer of comparable loans, including
maintaining escrow or impound accounts, if required under the related Pooling
and Servicing Agreement, for payment of taxes, insurance premiums, ground rents
and similar items, or otherwise monitoring the timely payment of those items;
attempting to collect delinquent
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payments; supervising foreclosures; negotiating modifications; conducting
property inspections on a periodic or other basis; managing (or overseeing the
management of) Mortgaged Properties acquired on behalf of such Trust Fund
through foreclosure, deed-in-lieu of foreclosure or otherwise (each, an "REO
Property"); and maintaining servicing records relating to such Mortgage Loans.
Unless otherwise specified in the related Prospectus Supplement, the Master
Servicer will be responsible for filing and settling claims in respect of
particular Mortgage Loans under any applicable instrument of Credit Support.
See "Description of Credit Support".
SUB-SERVICERS
A Master Servicer may delegate its servicing obligations in respect of the
Mortgage Loans serviced thereby to one or more third-party servicers (each, a
"Sub-Servicer"); provided that, unless otherwise specified in the related
Prospectus Supplement, such Master Servicer will remain obligated under the
related Pooling and Servicing Agreement. A Sub-Servicer for any series of
Certificates may be an affiliate of the Depositor or Master Servicer. Unless
otherwise provided in the related Prospectus Supplement, each sub-servicing
agreement between a Master Servicer and a Sub-Servicer (a "Sub-Servicing
Agreement") will provide for servicing of the applicable Mortgage Loans
consistent with the related Pooling and Servicing Agreement. A Master Servicer
will be required to monitor the performance of Sub-Servicers retained by it and
will have the right to remove a Sub-Servicer retained by it at any time it
considers such removal to be in the best interests of Certificateholders.
Unless otherwise provided in the related Prospectus Supplement, a Master
Servicer will be solely liable for all fees owed by it to any Sub-Servicer,
irrespective of whether the Master Servicer's compensation pursuant to the
related Pooling and Servicing Agreement is sufficient to pay such fees. Each
Sub-Servicer will be reimbursed by the Master Servicer that retained it for
certain expenditures which it makes, generally to the same extent the Master
Servicer would be reimbursed under a Pooling and Servicing Agreement. See
"--Certificate Account" and "--Servicing Compensation and Payment of Expenses".
SPECIAL SERVICERS
To the extent so specified in the related Prospectus Supplement, one or
more Special Servicers may be a party to the related Pooling and Servicing
Agreement or may be appointed by the Master Servicer or another specified
party. A Special Servicer for any series of Certificates may be an affiliate of
the Depositor or the Master Servicer and may hold, or be affiliated with the
holder of, Subordinate Certificates of such series. A Special Servicer may be
entitled to any of the rights, and subject to any of the obligations, described
herein in respect of a Master Servicer. In general, a Special Servicer's duties
will relate to defaulted Mortgage Loans, including instituting foreclosures and
negotiating work-outs. The related Prospectus Supplement will describe the
rights, obligations and compensation of any Special Servicer for a particular
series of Certificates. The Master Servicer will be liable for the performance
of a Special Servicer only if, and to the extent, set forth in the related
Prospectus Supplement. In certain cases the Master Servicer may be appointed
the Special Servicer.
CERTIFICATE ACCOUNT
General. The Master Servicer, the Trustee and/or a Special Servicer will,
as to each Trust Fund that includes Mortgage Loans, establish and maintain or
cause to be established and maintained the corresponding Certificate Account,
which will be established so as to comply with the standards of each Rating
Agency that has rated any one or more classes of Certificates of the related
series. A Certificate Account may be maintained as an interest-bearing or a
non-interest-bearing account and the funds held therein may be invested pending
each succeeding Distribution Date in United States government securities and
other obligations that are acceptable to each Rating Agency that has rated any
one or more classes of Certificates of the related series ("Permitted
Investments"). Unless otherwise provided in the related Prospectus Supplement,
any interest or other income earned on funds in a Certificate Account will be
paid to the related Master Servicer, Trustee or Special Servicer (if any) as
additional compensation. A Certificate Account may be maintained with the
related Master Servicer, Special
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Servicer or Mortgage Asset Seller or with a depository institution that is an
affiliate of any of the foregoing or of the Depositor, provided that it
complies with applicable Rating Agency standards. If permitted by the
applicable Rating Agency or Agencies, a Certificate Account may contain funds
relating to more than one series of mortgage pass-through certificates and may
contain other funds representing payments on mortgage loans owned by the
related Master Servicer or Special Servicer (if any) or serviced by either on
behalf of others.
Deposits. Unless otherwise provided in the related Pooling and Servicing
Agreement and described in the related Prospectus Supplement, the following
payments and collections received or made by the Master Servicer, the Trustee
or any Special Servicer subsequent to the Cut-off Date (other than payments due
on or before the Cut-off Date) are to be deposited in the Certificate Account
for each Trust Fund that includes Mortgage Loans, within a certain period
following receipt (in the case of collections on or in respect of the Mortgage
Loans) or otherwise as provided in the related Pooling and Servicing Agreement:
(i) all payments on account of principal, including principal prepayments,
on the Mortgage Loans;
(ii) all payments on account of interest on the Mortgage Loans, including
any default interest collected, in each case net of any portion thereof
retained by the Master Servicer or any Special Servicer as its servicing
compensation or as compensation to the Trustee;
(iii) all proceeds received under any hazard, title or other insurance
policy that provides coverage with respect to a Mortgaged Property or the
related Mortgage Loan (other than proceeds applied to the restoration of the
property or released to the related borrower) (collectively, "Insurance
Proceeds"), all proceeds received in connection with the condemnation or
other governmental taking of all or any portion of a Mortgaged Property
(other than proceeds applied to the restoration of the property or released
to the related borrower) (collectively, "Condemnation Proceeds"), and all
other amounts received and retained in connection with the liquidation of
defaulted Mortgage Loans or property acquired in respect thereof, by
foreclosure or otherwise (such amounts, together with those amounts listed
in clause (vii) below, "Liquidation Proceeds"), together with the net
operating income (less reasonable reserves for future expenses) derived from
the operation of any Mortgaged Properties acquired by the Trust Fund through
foreclosure or otherwise;
(iv) any amounts paid under any instrument or drawn from any fund that
constitutes Credit Support for the related series of Certificates;
(v) any advances made with respect to delinquent scheduled payments of
principal and interest on the Mortgage Loans;
(vi) any amounts paid under any Cash Flow Agreement;
(vii) all proceeds of the purchase of any Mortgage Loan, or property
acquired in respect thereof, by the Depositor, any Mortgage Asset Seller or
any other specified person as described under "--Assignment of Mortgage
Loans; Repurchases" and "--Representations and Warranties; Repurchases", all
proceeds of the purchase of any defaulted Mortgage Loan as described under
"--Realization Upon Defaulted Mortgage Loans", and all proceeds of any
Mortgage Asset purchased as described under "Description of the
Certificates--Termination; Retirement of Certificates";
(viii) to the extent that any such item does not constitute additional
servicing compensation to the Master Servicer or a Special Servicer and is
not otherwise retained by the Depositor or another specified person, any
payments on account of modification or assumption fees, late payment
charges, Prepayment Premiums or Equity Participations with respect to the
Mortgage Loans;
(ix) all payments required to be deposited in the Certificate Account with
respect to any deductible clause in any blanket insurance policy described
under "--Hazard Insurance Policies";
(x) any amount required to be deposited by the Master Servicer or the
Trustee in connection with losses realized on investments for the benefit of
the Master Servicer or the Trustee, as the case may be, of funds held in the
Certificate Account; and
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(xi) any other amounts required to be deposited in the Certificate Account
as provided in the related Pooling and Servicing Agreement and described in
the related Prospectus Supplement.
Withdrawals. Unless otherwise provided in the related Pooling and
Servicing Agreement and described in the related Prospectus Supplement, a
Master Servicer, Trustee or Special Servicer may make withdrawals from the
Certificate Account for each Trust Fund that includes Mortgage Loans for any of
the following purposes:
(i) to make distributions to the Certificateholders on each Distribution
Date;
(ii) to pay the Master Servicer or a Special Servicer any servicing fees
not previously retained thereby, such payment to be made out of payments and
other collections of interest on the particular Mortgage Loans as to which
such fees were earned;
(iii) to reimburse the Master Servicer, a Special Servicer or any other
specified person for unreimbursed advances of delinquent scheduled payments
of principal and interest made by it, and certain unreimbursed servicing
expenses incurred by it, with respect to Mortgage Loans in the Trust Fund
and properties acquired in respect thereof, such reimbursement to be made
out of amounts that represent late payments collected on the particular
Mortgage Loans, Liquidation Proceeds, Condemnation Proceeds and Insurance
Proceeds collected on the particular Mortgage Loans and properties, and net
income collected on the particular properties, with respect to which such
advances were made or such expenses were incurred or out of amounts drawn
under any form of Credit Support with respect to such Mortgage Loans and
properties, or if in the judgment of the Master Servicer, the Special
Servicer or such other person, as applicable, such advances and/or expenses
will not be recoverable from such amounts, such reimbursement to be made
from amounts collected on other Mortgage Loans in the same Trust Fund or, if
and to the extent so provided by the related Pooling and Servicing Agreement
and described in the related Prospectus Supplement, only from that portion
of amounts collected on such other Mortgage Loans that is otherwise
distributable on one or more classes of Subordinate Certificates of the
related series;
(iv) if and to the extent described in the related Prospectus Supplement,
to pay the Master Servicer, a Special Servicer or any other specified person
interest accrued on the advances and servicing expenses described in clause
(iii) above incurred by it while such remain outstanding and unreimbursed;
(v) to pay for costs and expenses incurred by the Trust Fund for
environmental site assessments performed with respect to Mortgaged
Properties that constitute security for defaulted Mortgage Loans, and for
any containment, clean-up or remediation of hazardous wastes and materials
present on such Mortgaged Properties, as described under "--Realization Upon
Defaulted Mortgage Loans";
(vi) to reimburse the Master Servicer, the Depositor, the Trustee, or any
of their respective directors, officers, employees and agents, as the case
may be, for certain expenses, costs and liabilities incurred thereby, as and
to the extent described under "--Certain Matters Regarding the Master
Servicer and the Depositor" and "--Certain Matters Regarding the Trustee";
(vii) if and to the extent described in the related Prospectus Supplement,
to pay the fees of the Trustee and any provider of Credit Support;
(viii) if and to the extent described in the related Prospectus
Supplement, to reimburse prior draws on any form of Credit Support;
(ix) to pay the Master Servicer, a Special Servicer or the Trustee, as
appropriate, interest and investment income earned in respect of amounts
held in the Certificate Account as additional compensation;
(x) to pay any servicing expenses not otherwise required to be advanced
by the Master Servicer, a Special Servicer or any other specified person;
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(xi) if one or more elections have been made to treat the Trust Fund or
designated portions thereof as a REMIC, to pay any federal, state or local
taxes imposed on the Trust Fund or its assets or transactions, as and to the
extent described under "Certain Federal Income Tax Consequences--
REMICs--Prohibited Transactions Tax and Other Taxes";
(xii) to pay for the cost of various opinions of counsel obtained pursuant
to the related Pooling and Servicing Agreement for the benefit of
Certificateholders;
(xiii) to make any other withdrawals permitted by the related Pooling and
Servicing Agreement and described in the related Prospectus Supplement; and
(xiv) to clear and terminate the Certificate Account upon the termination
of the Trust Fund.
REALIZATION UPON DEFAULTED MORTGAGE LOANS
If a default on a Mortgage Loan has occurred or, in the Master Servicer's
judgment, a payment default is imminent, the Master Servicer, on behalf of the
Trustee, may at any time institute foreclosure proceedings, exercise any power
of sale contained in the related Mortgage, obtain a deed in lieu of
foreclosure, or otherwise acquire title to the related Mortgaged Property, by
operation of law or otherwise. Unless otherwise specified in the related
Prospectus Supplement, the Master Servicer may not, however, acquire title to
any Mortgaged Property, have a receiver of rents appointed with respect to any
Mortgaged Property or take any other action with respect to any Mortgaged
Property that would cause the Trustee, for the benefit of the related series of
Certificateholders, or any other specified person to be considered to hold
title to, to be a "mortgagee-in-possession" of, or to be an "owner" or an
"operator" of such Mortgaged Property within the meaning of certain federal
environmental laws, unless the Master Servicer has previously received a report
prepared by a person who regularly conducts environmental audits (which report
will be an expense of the Trust Fund) and either:
(i) such report indicates that (a) the Mortgaged Property is in
compliance with applicable environmental laws and regulations and (b) there
are no circumstances or conditions present at the Mortgaged Property that
have resulted in any contamination for which investigation, testing,
monitoring, containment, clean-up or remediation could be required under
any applicable environmental laws and regulations; or
(ii) the Master Servicer, based solely (as to environmental matters and
related costs) on the information set forth in such report, determines that
taking such actions as are necessary to bring the Mortgaged Property into
compliance with applicable environmental laws and regulations and/or taking
the actions contemplated by clause (i)(b) above, is reasonably likely to
produce a greater recovery, taking into account the time value of money,
than not taking such actions. See "Certain Legal Aspects of Mortgage
Loans--Environmental Considerations".
A Pooling and Servicing Agreement may grant to the Master Servicer, a
Special Servicer, a provider of Credit Support and/or the holder or holders of
certain classes of the related series of Certificates a right of first refusal
to purchase from the Trust Fund, at a predetermined purchase price (which, if
insufficient to fully fund the entitlements of Certificateholders to principal
and interest thereon, will be specified in the related Prospectus Supplement),
any Mortgage Loan as to which a specified number of scheduled payments are
delinquent. In addition, unless otherwise specified in the related Prospectus
Supplement, the Master Servicer may offer to sell any defaulted Mortgage Loan
if and when the Master Servicer determines, consistent with its normal
servicing procedures, that such a sale would produce a greater recovery, taking
into account the time value of money, than would liquidation of the related
Mortgaged Property. In the absence of any such sale, the Master Servicer will
generally be required to proceed against the related Mortgaged Property,
subject to the discussion below.
Unless otherwise provided in the related Prospectus Supplement, if title
to any Mortgaged Property is acquired by a Trust Fund as to which a REMIC
election has been made, the Master Servicer, on behalf of the Trust Fund, will
be required to sell the Mortgaged Property within three full years after the
taxable year of acquisition, unless (i) the Internal Revenue Service (the
"IRS") grants an extension of time to sell such property or (ii) the Trustee
receives an opinion of independent counsel to the effect that the holding
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of the property by the Trust Fund for longer than such period will not result
in the imposition of a tax on the Trust Fund or cause the Trust Fund (or any
designated portion thereof) to fail to qualify as a REMIC under the Code at any
time that any Certificate is outstanding. Subject to the foregoing and any
other tax-related limitations, the Master Servicer will generally be required
to attempt to sell any Mortgaged Property so acquired on the same terms and
conditions it would if it were the owner. Unless otherwise provided in the
related Prospectus Supplement, if title to any Mortgaged Property is acquired
by a Trust Fund as to which a REMIC election has been made, the Master Servicer
will also be required to ensure that the Mortgaged Property is administered so
that it constitutes "foreclosure property" within the meaning of Code Section
860G(a)(8) at all times, that the sale of such property does not result in the
receipt by the Trust Fund of any income from non-permitted assets as described
in Code Section 860F(a)(2)(B), and that the Trust Fund does not derive any "net
income from foreclosure property" within the meaning of Code Section
860G(c)(2), with respect to such property. If the Trust Fund acquires title to
any Mortgaged Property, the Master Servicer, on behalf of the Trust Fund, may
retain an independent contractor to manage and operate such property. The
retention of an independent contractor, however, will not relieve the Master
Servicer of its obligation to manage such Mortgaged Property as required under
the related Pooling and Servicing Agreement.
If Liquidation Proceeds collected with respect to a defaulted Mortgage
Loan are less than the outstanding principal balance of the defaulted Mortgage
Loan plus interest accrued thereon plus the aggregate amount of reimbursable
expenses incurred by the Master Servicer in connection with such Mortgage Loan,
then, to the extent that such shortfall is not covered by any instrument or
fund constituting Credit Support, the Trust Fund will realize a loss in the
amount of such shortfall. The Master Servicer will be entitled to reimbursement
out of the Liquidation Proceeds recovered on any defaulted Mortgage Loan, prior
to the distribution of such Liquidation Proceeds to Certificateholders, amounts
that represent unpaid servicing compensation in respect of the Mortgage Loan,
unreimbursed servicing expenses incurred with respect to the Mortgage Loan and
any unreimbursed advances of delinquent payments made with respect to the
Mortgage Loan. In addition, if and to the extent set forth in the related
Prospectus Supplement, amounts otherwise distributable on the Certificates may
be further reduced by interest payable to the Master Servicer on such servicing
expenses and advances.
If any Mortgaged Property suffers damage such that the proceeds, if any,
of the related hazard insurance policy are insufficient to restore fully the
damaged property, the Master Servicer will not be required to expend its own
funds to effect such restoration unless (and to the extent not otherwise
provided in the related Prospectus Supplement) it determines (i) that such
restoration will increase the proceeds to Certificateholders on liquidation of
the Mortgage Loan after reimbursement of the Master Servicer for its expenses
and (ii) that such expenses will be recoverable by it from related Insurance
Proceeds, Condemnation Proceeds, Liquidation Proceeds and/or amounts drawn on
any instrument or fund constituting Credit Support.
HAZARD INSURANCE POLICIES
Unless otherwise specified in the related Prospectus Supplement, each
Pooling and Servicing Agreement will require the Master Servicer to use
reasonable efforts to cause each Mortgage Loan borrower to maintain a hazard
insurance policy that provides for such coverage as is required under the
related Mortgage or, if the Mortgage permits the holder thereof to dictate to
the borrower the insurance coverage to be maintained on the related Mortgaged
Property, such coverage as is consistent with the Master Servicer's normal
servicing procedures. Unless otherwise specified in the related Prospectus
Supplement, such coverage generally will be in an amount equal to the lesser of
the principal balance owing on such Mortgage Loan and the replacement cost of
the related Mortgaged Property. The ability of a Master Servicer to assure that
hazard insurance proceeds are appropriately applied may be dependent upon its
being named as an additional insured under any hazard insurance policy and
under any other insurance policy referred to below, or upon the extent to which
information concerning covered losses is furnished by borrowers. All amounts
collected by a Master Servicer under any such policy (except for amounts to be
applied to the restoration or repair of the Mortgaged Property or released to
the borrower in accordance with the Master Servicer's normal servicing
procedures and/or to the terms and conditions of the related Mortgage and
Mortgage Note) will be deposited in the related Certificate
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Account. The Pooling and Servicing Agreement may provide that the Master
Servicer may satisfy its obligation to cause each borrower to maintain such a
hazard insurance policy by maintaining a blanket policy insuring against hazard
losses on all of the Mortgage Loans in a Trust Fund. If such blanket policy
contains a deductible clause, the Master Servicer will be required, in the
event of a casualty covered by such blanket policy, to deposit in the related
Certificate Account all additional sums that would have been deposited therein
under an individual policy but were not because of such deductible clause.
In general, the standard form of fire and extended coverage policy covers
physical damage to or destruction of the improvements of the property by fire,
lightning, explosion, smoke, windstorm and hail, and riot, strike and civil
commotion, subject to the conditions and exclusions specified in each policy.
Although the policies covering the Mortgaged Properties will be underwritten by
different insurers under different state laws in accordance with different
applicable state forms, and therefore will not contain identical terms and
conditions, most such policies typically do not cover any physical damage
resulting from war, revolution, governmental actions, floods and other
water-related causes, earth movement (including earthquakes, landslides and
mudflows), wet or dry rot, vermin and domestic animals. Accordingly, a
Mortgaged Property may not be insured for losses arising from any such cause
unless the related Mortgage specifically requires, or permits the holder
thereof to require, such coverage.
The hazard insurance policies covering the Mortgaged Properties will
typically contain co-insurance clauses that in effect require an insured at all
times to carry insurance of a specified percentage (generally 80% to 90%) of
the full replacement value of the improvements on the property in order to
recover the full amount of any partial loss. If the insured's coverage falls
below this specified percentage, such clauses generally provide that the
insurer's liability in the event of partial loss does not exceed the lesser of
(i) the replacement cost of the improvements less physical depreciation and
(ii) such proportion of the loss as the amount of insurance carried bears to
the specified percentage of the full replacement cost of such improvements.
DUE-ON-SALE AND DUE-ON-ENCUMBRANCE PROVISIONS
Certain of the Mortgage Loans may contain a due-on-sale clause that
entitles the lender to accelerate payment of the Mortgage Loan upon any sale or
other transfer of the related Mortgaged Property made without the lender's
consent. Certain of the Mortgage Loans may also contain a due-on-encumbrance
clause that entitles the lender to accelerate the maturity of the Mortgage Loan
upon the creation of any other lien or encumbrance upon the Mortgaged Property.
Unless otherwise provided in the related Prospectus Supplement, the Master
Servicer will determine whether to exercise any right the Trustee may have
under any such provision in a manner consistent with the Master Servicer's
normal servicing procedures. Unless otherwise specified in the related
Prospectus Supplement, the Master Servicer will be entitled to retain as
additional servicing compensation any fee collected in connection with the
permitted transfer of a Mortgaged Property. See "Certain Legal Aspects of
Mortgage Loans--Due-on-Sale and Due-on-Encumbrance".
SERVICING COMPENSATION AND PAYMENT OF EXPENSES
Unless otherwise specified in the related Prospectus Supplement, a Master
Servicer's primary servicing compensation with respect to a series of
Certificates will come from the periodic payment to it of a specified portion
of the interest payments on each Mortgage Loan in the related Trust Fund.
Because such compensation is generally based on a percentage of the principal
balance of each such Mortgage Loan outstanding from time to time, it will
decrease in accordance with the amortization of the Mortgage Loans. If and to
the extent described in the related Prospectus Supplement, a Master Servicer's
compensation may also include: (i) an additional specified portion of the
interest payments on each defaulted Mortgage Loan serviced by the Master
Servicer; (ii) subject to any specified limitations, a fixed percentage of some
or all of the collections and proceeds received with respect to any defaulted
Mortgage Loan as to which it negotiated a work-out or that it liquidated; and
(iii) any other amounts specified in the related Prospectus Supplement. Unless
otherwise specified in the related Prospectus Supplement, the Master Servicer
may retain, as additional compensation, all or a portion of late payment
charges, Prepayment Premiums, modification fees and other fees collected from
borrowers and any
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interest or other income that may be earned on funds held in the Certificate
Account. Any Sub-Servicer will receive a portion of the Master Servicer's
compensation as its sub-servicing compensation.
In addition to amounts payable to any Sub-Servicer, a Master Servicer may
be required, to the extent provided in the related Prospectus Supplement, to
pay from amounts that represent its servicing compensation certain expenses
incurred in connection with the administration of the related Trust Fund,
including, without limitation, payment of the fees and disbursements of
independent accountants, payment of fees and disbursements of the Trustee and
any custodians appointed thereby and payment of expenses incurred in connection
with distributions and reports to Certificateholders. Certain other expenses,
including certain expenses related to Mortgage Loan defaults and liquidations
and, to the extent so provided in the related Prospectus Supplement, interest
on such expenses at the rate specified therein, and the fees of any Special
Servicer, may be required to be borne by the Trust Fund.
EVIDENCE AS TO COMPLIANCE
Each Pooling and Servicing Agreement will provide that on or before a
specified date in each year, beginning the first such date that is at least a
specified number of months after the Cut-off Date, a firm of independent public
accountants will furnish a statement to the related Trustee to the effect that,
on the basis of an examination by such firm conducted substantially in
compliance with the Uniform Single Attestation Program for Mortgage Bankers
established by the Mortgage Bankers Association of America with respect to the
servicing of commercial and multifamily mortgage loans or the Audit Program for
Mortgages serviced for FHLMC, the servicing of mortgage loans under agreements
(including the related Pooling and Servicing Agreement) substantially similar
to each other was conducted in compliance with such agreements except for such
significant exceptions or errors in records that, in the opinion of the firm,
the Uniform Single Audit Program for Mortgage Bankers or the Audit Program for
Mortgages serviced for FHLMC requires it to report. In rendering its statement
such firm may rely, as to the matters relating to the direct servicing of
mortgage loans by Sub-Servicers, upon comparable statements for examinations
conducted substantially in compliance with the Uniform Single Audit Program for
Mortgage Bankers or the Audit Program for Mortgages serviced for FHLMC
(rendered within one year of such statement) of firms of independent public
accountants with respect to those Subservicers which also have been the subject
of such an examination.
Each Pooling and Servicing Agreement will also provide that, on or before
a specified date in each year, beginning the first such date that is at least a
specified number of months after the Cut-off Date, there is to be delivered to
the related Trustee an annual statement signed by one or more officers of the
Master Servicer to the effect that, to the best knowledge of each such officer,
the Master Servicer has fulfilled in all material respects its obligations
under the Pooling and Servicing Agreement throughout the preceding year or, if
there has been a material default in the fulfillment of any such obligation,
such statement shall specify each such known default and the nature and status
thereof. Such statement may be provided as a single form making the required
statements as to more than one Pooling and Servicing Agreement.
Unless otherwise specified in the related Prospectus Supplement, copies of
the annual accountants' statement and the annual statement of officers of a
Master Servicer may be obtained by Certificateholders upon written request to
the Trustee.
CERTAIN MATTERS REGARDING THE MASTER SERVICER AND THE DEPOSITOR
The entity servicing as Master Servicer under a Pooling and Servicing
Agreement may be an affiliate of the Depositor and may have other normal
business relationships with the Depositor or the Depositor's affiliates. Unless
otherwise specified in the related Prospectus Supplement, the Pooling and
Servicing Agreement for a series of Certificates will provide that the Master
Servicer may not resign from its obligations and duties thereunder except upon
a determination that performance of such duties is no longer permissible under
applicable law or except in connection with a permitted transfer of servicing.
No such resignation will become effective until the Trustee or a successor
servicer has assumed the Master Servicer's obligations and duties under the
Pooling and Servicing Agreement.
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Unless otherwise specified in the related Prospectus Supplement, each
Pooling and Servicing Agreement will also provide that, except as set forth
below, neither the Master Servicer, the Depositor, nor any director, officer,
employee or agent of the Master Servicer or the Depositor will be under any
liability to the Trust Fund or the Certificateholders for any action taken or
for refraining from the taking of any action in good faith pursuant to the
Pooling and Servicing Agreement, or for errors in judgment; provided, however,
that neither the Master Servicer, the Depositor, nor any such person will be
protected against any liability which would otherwise be imposed by reason of
willful misfeasance, bad faith or negligence in the performance of duties or by
reason of reckless disregard of obligations and duties thereunder. Unless
otherwise specified in the related Prospectus Supplement, each Pooling and
Servicing Agreement will further provide that the Master Servicer, the
Depositor, and any director, officer, employee or agent of the Master Servicer
or the Depositor is entitled to indemnification by the Trust Fund and will be
held harmless against any loss, liability or expense incurred in connection
with any legal action relating to the Pooling and Servicing Agreement or the
related series of Certificates, other than any loss, liability or expense
related to any specific Mortgage Loan or Mortgage Loans (except any such loss,
liability or expense otherwise reimbursable pursuant to the Pooling and
Servicing Agreement) and any loss, liability or expense incurred by reason of
willful misfeasance, bad faith or negligence in the performance of duties
thereunder or by reason of reckless disregard of obligations and duties
thereunder. In addition, each Pooling and Servicing Agreement will provide that
neither the Master Servicer nor the Depositor will be under any obligation to
appear in, prosecute or defend any legal or administrative action that is not
incidental to its respective duties under the Pooling and Servicing Agreement
and which in its opinion may involve it in any expense or liability. The Master
Servicer or the Depositor may, however, in its discretion undertake any such
action which it may deem necessary or desirable with respect to the Pooling and
Servicing Agreement and the rights and duties of the parties thereto and the
interests of the Certificateholders thereunder. In such event, the legal
expenses and costs of such action and any liability resulting therefrom will be
expenses, costs and liabilities of the Trust Fund, and the Master Servicer or
the Depositor, as the case may be, will be entitled to be reimbursed therefor
out of funds otherwise distributable to Certificateholders.
Any person into which the Master Servicer may be merged or consolidated,
any person resulting from any merger or consolidation to which the Master
Servicer is a party or any person succeeding to the business of the Master
Servicer will be the successor of the Master Servicer under the Pooling and
Servicing Agreement, provided that, unless otherwise specified in the related
Prospectus Supplement, (i) such person is qualified to service mortgage loans
on behalf of FNMA or FHLMC and (ii) such merger, consolidation or succession
does not adversely affect the then-current ratings of the classes of
Certificates of the related series that have been rated. In addition,
notwithstanding the prohibition on its resignation, the Master Servicer may
assign its rights under a Pooling and Servicing Agreement to any person to whom
the Master Servicer is transferring a substantial portion of its mortgage
servicing portfolio, provided clauses (i) and (ii) above are satisfied. In the
case of any such assignment, the Master Servicer will be released from its
obligations under such Pooling and Servicing Agreement, other than liabilities
and obligations incurred by it prior to the time of such assignment.
EVENTS OF DEFAULT
Events of Default under the Pooling and Servicing Agreement in respect of
a series of Certificates, unless otherwise specified in the Prospectus
Supplement, will include, without limitation, (i) any failure by the Master
Servicer to make a required deposit to the Certificate Account or, if the
Master Servicer is so required, to distribute to the holders of any class of
Certificates of such series any required payment which continues unremedied for
5 days after the giving of written notice of such failure to the Master
Servicer by the Trustee or the Depositor, or to the Master Servicer, the
Depositor and the Trustee by the holders of Certificates of such class
evidencing not less than 25% of the aggregate Percentage Interests constituting
such class; (ii) any failure by the Master Servicer duly to observe or perform
in any material respect any other of its covenants or agreements in the Pooling
and Servicing Agreement with respect to such series of Certificates which
continues unremedied for 30 days after the giving of written notice of such
failure to the Master Servicer by the Trustee or the Depositor, or to the
Master Servicer, the Depositor and the Trustee by the holders of any class of
Certificates of such series evidencing not less
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than 25% of the aggregate Percentage Interests constituting such class; and
(iii) certain events of insolvency, readjustment of debt, marshalling of assets
and liabilities or similar proceedings regarding the Master Servicer and
certain actions by the Master Servicer indicating its insolvency or inability
to pay its obligations. Material variations to the foregoing Events of Default
(other than to add thereto or to make them more restrictive) will be specified
in the related Prospectus Supplement. A default pursuant to the terms of any
MBS included in any Trust Fund will not constitute an Event of Default under
the related Pooling and Servicing Agreement.
RIGHTS UPON EVENT OF DEFAULT
So long as an Event of Default remains unremedied, either the Depositor or
the Trustee may, and at the direction of the holders of Certificates evidencing
not less than 51% of the aggregate undivided interests (or, if so specified in
the related Prospectus Supplement, voting rights) in the related Trust Fund the
Trustee shall, by written notification to the Master Servicer and to the
Depositor or the Trustee, as applicable, terminate all of the rights and
obligations of the Master Servicer under the Pooling and Servicing Agreement
covering such Trust Fund and in and to the related Mortgage Loans and the
proceeds thereof (other than any rights of the Master Servicer as
Certificateholder and other than any rights of the Master Servicer to payment
and/or reimbursement for previously earned servicing fees and outstanding
advances), whereupon the Trustee or, upon notice to the Depositor and with the
Depositor's consent, its designee will succeed to all responsibilities, duties
and liabilities of the Master Servicer under such Pooling and Servicing
Agreement (other than the obligation to purchase Mortgage Loans under certain
circumstances) and will be entitled to similar compensation arrangements. In
the event that the Trustee would be obligated to succeed the Master Servicer
but is unwilling so to act, it may appoint (or if it is unable so to act, it
shall appoint) or petition a court of competent jurisdiction for the
appointment of, a FNMA- or FHLMC-approved mortgage servicing institution with a
net worth of at least $10,000,000 to act as successor to the Master Servicer
under the Pooling and Servicing Agreement (unless otherwise set forth in the
Pooling and Servicing Agreement). Pending such appointment, the Trustee is
obligated to act in such capacity. The Trustee and such successor may agree
upon the servicing compensation to be paid, which in no event may be greater
than the compensation to the initial Master Servicer under the Pooling and
Servicing Agreement.
No Certificateholder will have any right under a Pooling and Servicing
Agreement to institute any proceeding with respect to such Pooling and
Servicing Agreement unless such holder previously has given to the Trustee
written notice of default and the continuance thereof and unless the holders of
Certificates of any class evidencing not less than 25% of the aggregate
Percentage Interests constituting such class have made written request upon the
Trustee to institute such proceeding in its own name as Trustee thereunder and
have offered to the Trustee reasonable indemnity and the Trustee for 60 days
after receipt of such request and indemnity has neglected or refused to
institute any such proceeding. However, the Trustee will be under no obligation
to exercise any of the trusts or powers vested in it by the Pooling and
Servicing Agreement or to institute, conduct or defend any litigation
thereunder or in relation thereto at the request, order or direction of any of
the holders of Certificates covered by such Pooling and Servicing Agreement,
unless such Certificateholders have offered to the Trustee reasonable security
or indemnity against the costs, expenses and liabilities which may be incurred
therein or thereby.
AMENDMENT
Each Pooling and Servicing Agreement may be amended by the parties
thereto, without the consent of any of the holders of Certificates covered by
such Pooling and Servicing Agreement, (i) to cure any ambiguity, (ii) to
correct or supplement any provision therein which may be inconsistent with any
other provision therein or to correct any error, (iii) to change the timing
and/or nature of deposits in the Certificate Account, provided that (A) such
change would not adversely affect in any material respect the interests of any
Certificateholder, as evidenced by an opinion of counsel, and (B) such change
would not adversely affect the then-current rating of any rated classes of
Certificates, as evidenced by a letter from each applicable Rating Agency, (iv)
if a REMIC election has been made with respect to the related Trust Fund, to
modify, eliminate or add to any of its provisions (A) to such extent as shall
be necessary or
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desirable to maintain the qualification of the Trust Fund as a REMIC or to
avoid or minimize the risk of imposition of any tax on the related Trust Fund,
provided that the Trustee has received an opinion of counsel to the effect that
(1) such action is necessary or desirable to maintain such qualification or to
avoid or minimize such risk, and (2) such action will not adversely affect in
any material respect the interests of any holder of Certificates covered by the
Pooling and Servicing Agreement, or (C) to restrict the transfer of the REMIC
Residual Certificates, provided that the Depositor has determined that the
then-current ratings of the classes of the Certificates that have been rated
will not be adversely affected, as evidenced by a letter from each applicable
Rating Agency, and that any such amendment will not give rise to any tax with
respect to the transfer of the REMIC Residual Certificates to a non-Permitted
Transferee, (v) to make any other provisions with respect to matters or
questions arising under such Pooling and Servicing Agreement or any other
change, provided that such action will not adversely affect in any material
respect the interests of any Certificateholder, or (vi) to amend specified
provisions that are not material to holders of any class of Certificates
offered hereunder.
Unless otherwise specified in the Prospectus Supplement, the Pooling and
Servicing Agreement may also be amended by the parties thereto with the consent
of the holders of Certificates of each class affected thereby evidencing, in
each case, not less than 66% of the aggregate Percentage Interests constituting
such class for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of such Pooling and Servicing
Agreement or of modifying in any manner the rights of the holders of
Certificates covered by such Pooling and Servicing Agreement, except that no
such amendment may (i) reduce in any manner the amount of, or delay the timing
of, payments received on Mortgage Loans which are required to be distributed on
a Certificate of any class without the consent of the holder of such
Certificate or (ii) reduce the aforesaid percentage of Certificates of any
class the holders of which are required to consent to any such amendment
without the consent of the holders of all Certificates of such class covered by
such Pooling and Servicing Agreement then outstanding.
Notwithstanding the foregoing, if a REMIC election has been made with
respect to the related Trust Fund, the Trustee will not be required to consent
to any amendment to a Pooling and Servicing Agreement without having first
received an opinion of counsel to the effect that such amendment or the
exercise of any power granted to the Master Servicer, the Depositor, the
Trustee or any other specified person in accordance with such amendment will
not result in the imposition of a tax on the related Trust Fund or cause such
Trust Fund to fail to qualify as a REMIC.
THE TRUSTEE
The Trustee under each Pooling and Servicing Agreement will be named in
the related Prospectus Supplement. The commercial bank, national banking
association, banking corporation or trust company that serves as Trustee may
have typical banking relationships with the Depositor and its affiliates.
DUTIES OF THE TRUSTEE
The Trustee for each series of Certificates will make no representation as
to the validity or sufficiency of the related Pooling and Servicing Agreement,
the Certificates or any underlying Mortgage Asset or related document and will
not be accountable for the use or application by or on behalf of any Master
Servicer or Special Servicer of any funds paid to the Master Servicer or
Special Servicer in respect of the Certificates or the underlying Mortgage
Assets. If no Event of Default has occurred and is continuing, the Trustee for
each series of Certificates will be required to perform only those duties
specifically required under the related Pooling and Servicing Agreement.
However, upon receipt of any of the various certificates, reports or other
instruments required to be furnished to it pursuant to the related Pooling and
Servicing Agreement, a Trustee will be required to examine such documents and
to determine whether they conform to the requirements of such agreement.
CERTAIN MATTERS REGARDING THE TRUSTEE
As and to the extent described in the related Prospectus Supplement, the
fees and normal disbursements of any Trustee may be the expense of the related
Master Servicer or other specified person or may be required to be borne by the
related Trust Fund.
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Unless otherwise specified in the related Prospectus Supplement, the
Trustee for each series of Certificates will be entitled to indemnification,
from amounts held in the Certificate Account for such series, for any loss,
liability or expense incurred by the Trustee in connection with the Trustee's
acceptance or administration of its trusts under the related Pooling and
Servicing Agreement; provided, however, that such indemnification will not
extend to any loss liability or expense incurred by reason of willful
misfeasance, bad faith or negligence on the part of the Trustee in the
performance of its obligations and duties thereunder, or by reason of its
reckless disregard of such obligations or duties.
Unless otherwise specified in the related Prospectus Supplement, the
Trustee for each series of Certificates will be entitled to execute any of its
trusts or powers under the related Pooling and Servicing Agreement or perform
any of this duties thereunder either directly or by or through agents or
attorneys.
RESIGNATION AND REMOVAL OF THE TRUSTEE
The Trustee may resign at any time, in which event the Depositor will be
obligated to appoint a successor Trustee. The Depositor may also remove the
Trustee if the Trustee ceases to be eligible to continue as such under the
Pooling and Servicing Agreement or if the Trustee becomes insolvent. Upon
becoming aware of such circumstances, the Depositor will be obligated to
appoint a successor Trustee. The Trustee may also be removed at any time by the
holders of Certificates evidencing not less than 51% of the aggregate undivided
interests (or, if so specified in the related Prospectus Supplement, voting
rights) in the related Trust Fund. Any resignation or removal of the Trustee
and appointment of a successor Trustee will not become effective until
acceptance of the appointment by the successor Trustee.
DESCRIPTION OF CREDIT SUPPORT
GENERAL
Credit Support may be provided with respect to one or more classes of the
Certificates of any series, or with respect to the related Mortgage Assets.
Credit Support may be in the form of a letter of credit, the subordination of
one or more classes of Certificates, the use of a pool insurance policy or
guarantee insurance, the establishment of one or more reserve funds or another
method of Credit Support described in the related Prospectus Supplement, or any
combination of the foregoing. If and to the extent so provided in the related
Prospectus Supplement, any of the foregoing forms of Credit Support may provide
credit enhancement for more than one series of Certificates.
Unless otherwise provided in the related Prospectus Supplement for a
series of Certificates, the Credit Support will not provide protection against
all risks of loss and will not guarantee payment to Certificateholders of all
amounts to which they are entitled under the related Pooling and Servicing
Agreement. If losses or shortfalls occur that exceed the amount covered by the
related Credit Support or that are of a type not covered by such Credit
Support, Certificateholders will bear their allocable share of deficiencies.
Moreover, if a form of Credit Support covers the Offered Certificates of more
than one series and losses on the related Mortgage Assets exceed the amount of
such Credit Support, it is possible that the holders of Offered Certificates of
one (or more) such series will be disproportionately benefited by such Credit
Support to the detriment of the holders of Offered Certificates of one (or
more) other such series.
If Credit Support is provided with respect to one or more classes of
Certificates of a series, or with respect to the related Mortgage Assets, the
related Prospectus Supplement will include a description of (i) the nature and
amount of coverage under such Credit Support, (ii) any conditions to payment
thereunder not otherwise described herein, (iii) the conditions (if any) under
which the amount of coverage under such Credit Support may be reduced and under
which such Credit Support may be terminated or replaced and (iv) the material
provisions relating to such Credit Support. Additionally, the related
Prospectus Supplement will set forth certain information with respect to the
obligor, if any, under any instrument of Credit Support. See "Risk
Factors--Credit Support Limitations".
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SUBORDINATE CERTIFICATES
If so specified in the related Prospectus Supplement, one or more classes
of Certificates of a series may be Subordinate Certificates. To the extent
specified in the related Prospectus Supplement, the rights of the holders of
Subordinate Certificates to receive distributions from the Certificate Account
on any Distribution Date will be subordinated to the corresponding rights of
the holders of Senior Certificates. If so provided in the related Prospectus
Supplement, the subordination of a class may apply only in the event of certain
types of losses or shortfalls. The related Prospectus Supplement will set forth
information concerning the method and amount of subordination provided by a
class or classes of Subordinate Certificates in a series and the circumstances
under which such subordination will be available.
If the Mortgage Assets in any Trust Fund are divided into separate groups,
each supporting a separate class or classes of Certificates of the related
series, Credit Support may be provided by cross-support provisions requiring
that distributions be made on Senior Certificates evidencing interests in one
group of Mortgage Assets prior to distributions on Subordinate Certificates
evidencing interests in a different group of Mortgage Assets within the Trust
Fund. The Prospectus Supplement for a series that includes a cross-support
provision will describe the manner and conditions for applying such provisions.
INSURANCE OR GUARANTEES WITH RESPECT TO MORTGAGE LOANS
If so provided in the Prospectus Supplement for a series of Certificates,
Mortgage Loans included in the related Trust Fund will be covered for certain
default risks by insurance policies or guarantees. The related Prospectus
Supplement will describe the nature of such default risks and the extent of
such coverage.
LETTER OF CREDIT
If so provided in the Prospectus Supplement for a series of Certificates,
deficiencies in amounts otherwise payable on such Certificates or certain
classes thereof will be covered by one or more letters of credit, issued by a
bank or other financial institution specified in such Prospectus Supplement
(the "Letter of Credit Bank"). Under a letter of credit, the Letter of Credit
Bank will be obligated to honor draws thereunder in an aggregate fixed dollar
amount, net of unreimbursed payments thereunder, generally equal to a
percentage specified in the related Prospectus Supplement of the aggregate
principal balance of the Mortgage Assets on the related Cut-off Date or of the
initial aggregate Certificate Balance of one or more classes of Certificates.
If so specified in the related Prospectus Supplement, the letter of credit may
permit draws only in the event of certain types of losses and shortfalls. The
amount available under the letter of credit will, in all cases, be reduced to
the extent of the unreimbursed payments thereunder and may otherwise be reduced
as described in the related Prospectus Supplement. The obligations of the
Letter of Credit Bank under the letter of credit for each series of
Certificates will expire at the earlier of the date specified in the related
Prospectus Supplement or the termination of the Trust Fund.
CERTIFICATE INSURANCE AND SURETY BONDS
If so provided in the Prospectus Supplement for a series of Certificates,
deficiencies in amounts otherwise payable on such Certificates or certain
classes thereof will be covered by insurance policies or surety bonds provided
by one or more insurance companies or sureties. Such instruments may cover,
with respect to one or more classes of Certificates of the related series,
timely distributions of interest or distributions of principal on the basis of
a schedule of principal distributions set forth in or determined in the manner
specified in the related Prospectus Supplement. The related Prospectus
Supplement will describe any limitations on the draws that may be made under
any such instrument.
RESERVE FUNDS
If so provided in the Prospectus Supplement for a series of Certificates,
deficiencies in amounts otherwise payable on such Certificates or certain
classes thereof will be covered (to the extent of available funds) by one or
more reserve funds in which cash, a letter of credit, Permitted Investments,
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a demand note or a combination thereof will be deposited, in the amounts
specified in such Prospectus Supplement. If so specified in the related
Prospectus Supplement, the reserve fund for a series may also be funded over
time by a specified amount of certain collections received on the related
Mortgage Assets.
Amounts on deposit in any reserve fund for a series will be applied for
the purposes, in the manner, and to the extent specified in the related
Prospectus Supplement. If so specified in the related Prospectus Supplement,
reserve funds may be established to provide protection only against certain
types of losses and shortfalls. Following each Distribution Date, amounts in a
reserve fund in excess of any amount required to be maintained therein may be
released from the reserve fund under the conditions and to the extent specified
in the related Prospectus Supplement.
If so specified in the related Prospectus Supplement, amounts deposited in
any reserve fund will be invested in Permitted Investments. Unless otherwise
specified in the related Prospectus Supplement, any reinvestment income or
other gain from such investments will be credited to the related reserve fund
for such series, and any loss resulting from such investments will be charged
to such reserve fund. However, such income may be payable to any related Master
Servicer or another service provider as additional compensation for its
services. The reserve fund, if any, for a series will not be a part of the
Trust Fund unless otherwise specified in the related Prospectus Supplement.
CREDIT SUPPORT WITH RESPECT TO MBS
If so provided in the Prospectus Supplement for a series of Certificates,
any MBS included in the related Trust Fund and/or the related underlying
mortgage loans may be covered by one or more of the types of Credit Support
described herein. The related Prospectus Supplement will specify, as to each
such form of Credit Support, the information indicated above with respect
thereto, to the extent such information is material and available.
CERTAIN LEGAL ASPECTS OF MORTGAGE LOANS
The following discussion contains general summaries of certain legal
aspects of loans secured by commercial and multifamily residential properties.
Because such legal aspects are governed by applicable state law (which laws may
differ substantially), the summaries do not purport to be complete, to reflect
the laws of any particular state, or to encompass the laws of all states in
which the security for the Mortgage Loans (or mortgage loans underlying any
MBS) is situated. Accordingly, the summaries are qualified in their entirety by
reference to the applicable laws of those states. See "Description of the Trust
Funds--Mortgage Loans". For purposes of the following discussion, "Mortgage
Loan" includes a mortgage loan underlying an MBS.
GENERAL
Each Mortgage Loan will be evidenced by a note or bond and secured by an
instrument granting a security interest in real property, which may be a
mortgage, deed of trust or a deed to secure debt, depending upon the prevailing
practice and law in the state in which the related Mortgaged Property is
located. Mortgages, deeds of trust and deeds to secure debt are herein
collectively referred to as "mortgages". A mortgage creates a lien upon, or
grants a title interest in, the real property covered thereby, and represents
the security for the repayment of the indebtedness customarily evidenced by a
promissory note. The priority of the lien created or interest granted will
depend on the terms of the mortgage and, in some cases, on the terms of
separate subordination agreements or intercreditor agreements with others that
hold interests in the real property, the knowledge of the parties to the
mortgage and, generally, the order of recordation of the mortgage in the
appropriate public recording office. However, the lien of a recorded mortgage
will generally be subordinate to later-arising liens for real estate taxes and
assessments and other charges imposed under governmental police powers.
TYPES OF MORTGAGE INSTRUMENTS
There are two parties to a mortgage: a mortgagor (the borrower and usually
the owner of the subject property) and a mortgagee (the lender). In contrast, a
deed of trust is a three-party instrument, among
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a trustor (the equivalent of a borrower), a trustee to whom the real property
is conveyed, and a beneficiary (the lender) for whose benefit the conveyance is
made. Under a deed of trust, the trustor grants the property, irrevocably until
the debt is paid, in trust and generally with a power of sale, to the trustee
to secure repayment of the indebtedness evidenced by the related note. A deed
to secure debt typically has two parties, pursuant to which the borrower, or
grantor, conveys title to the real property to the grantee, or lender,
generally with a power of sale, until such time as the debt is repaid. In a
case where the borrower is a land trust, there would be an additional party
because legal title to the property is held by a land trustee under a land
trust agreement for the benefit of the borrower. At origination of a mortgage
loan involving a land trust, the borrower may execute a separate undertaking to
make payments on the mortgage note. In no event is the land trustee personally
liable for the mortgage note obligation. The mortgagee's authority under a
mortgage, the trustee's authority under a deed of trust and the grantee's
authority under a deed to secure debt are governed by the express provisions of
the related instrument, the law of the state in which the real property is
located, certain federal laws and, in some deed of trust transactions, the
directions of the beneficiary.
LEASES AND RENTS
Mortgages that encumber income-producing property often contain an
assignment of rents and leases and/or may be accompanied by a separate
assignment of rents and leases, pursuant to which the borrower assigns to the
lender the borrower's right, title and interest as landlord under each lease
and the income derived therefrom, while (unless rents are to be paid directly
to the lender) retaining a revocable license to collect the rents for so long
as there is no default. If the borrower defaults, the license terminates and
the lender is entitled to collect the rents. Local law may require that the
lender take possession of the property and/or obtain a court-appointed receiver
before becoming entitled to collect the rents.
In most states, hotel and motel room rates are considered accounts
receivable under the Uniform Commercial Code ("UCC"); in cases where hotels or
motels constitute loan security, the rates are generally pledged by the
borrower as additional security for the loan. In general, the lender must file
financing statements in order to perfect its security interest in the room
rates and must file continuation statements, generally every five years, to
maintain perfection of such security interest. In certain cases, Mortgage Loans
secured by hotels or motels may be included in a Trust Fund even if the
security interest in the room rates was not perfected or the requisite UCC
filings were allowed to lapse. Even if the lender's security interest in room
rates is perfected under applicable non-bankruptcy law, it will generally be
required to commence a foreclosure action or otherwise take possession of the
property in order to enforce its rights to collect the room rates following a
default. In the bankruptcy setting, however, the lender will be stayed from
enforcing its rights to collect room rates, but those room rates (in light of
certain revisions to the Bankruptcy Code which are effective for all bankruptcy
cases commenced on or after October 22, 1994) constitute "cash collateral" and
therefore cannot be used by the bankruptcy debtor without a hearing or lender's
consent and unless the lender's interest in the room rates is given adequate
protection (e.g., cash payment for otherwise encumbered funds or a replacement
lien on unencumbered property, in either case equal in value to the amount of
room rates that the debtor proposes to use, or other similar relief). See
"--Bankruptcy Laws".
PERSONALTY
In the case of certain types of mortgaged properties, such as hotels,
motels and nursing homes, personal property (to the extent owned by the
borrower and not previously pledged) may constitute a significant portion of
the property's value as security. The creation and enforcement of liens on
personal property are governed by the UCC. Accordingly, if a borrower pledges
personal property as security for a mortgage loan, the lender generally must
file UCC financing statements in order to perfect its security interest
therein, and must file continuation statements, generally every five years, to
maintain that perfection. In certain cases, Mortgage Loans secured in part by
personal property may be included in a Trust Fund even if the security interest
in such personal property was not perfected or the requisite UCC filings were
allowed to lapse.
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FORECLOSURE
General. Foreclosure is a legal procedure that allows the lender to
recover its mortgage debt by enforcing its rights and available legal remedies
under the mortgage. If the borrower defaults in payment or performance of its
obligations under the note or mortgage, the lender has the right to institute
foreclosure proceedings to sell the real property at public auction to satisfy
the indebtedness.
Foreclosure procedures vary from state to state. Two primary methods of
foreclosing a mortgage are judicial foreclosure, involving court proceedings,
and non-judicial foreclosure pursuant to a power of sale granted in the
mortgage instrument. Other foreclosure procedures are available in some states,
but they are either infrequently used or available only in limited
circumstances.
A foreclosure action is subject to most of the delays and expenses of
other lawsuits if defenses are raised or counterclaims are interposed, and
sometimes requires several years to complete.
Judicial Foreclosure. A judicial foreclosure proceeding is conducted in a
court having jurisdiction over the mortgaged property. Generally, the action is
initiated by the service of legal pleadings upon all parties having a
subordinate interest of record in the real property and all parties in
possession of the property, under leases or otherwise, whose interests are
subordinate to the mortgage. Delays in completion of the foreclosure may
occasionally result from difficulties in locating defendants. When the lender's
right to foreclose is contested, the legal proceedings can be time-consuming.
Upon successful completion of a judicial foreclosure proceeding, the court
generally issues a judgment of foreclosure and appoints a referee or other
officer to conduct a public sale of the mortgaged property, the proceeds of
which are used to satisfy the judgment. Such sales are made in accordance with
procedures that vary from state to state.
Equitable and Other Limitations on Enforceability of Certain
Provisions. United States courts have traditionally imposed general equitable
principles to limit the remedies available to lenders in foreclosure actions.
These principles are generally designed to relieve borrowers from the effects
of mortgage defaults perceived as harsh or unfair. Relying on such principles,
a court may alter the specific terms of a loan to the extent it considers
necessary to prevent or remedy an injustice, undue oppression or overreaching,
or may require the lender to undertake affirmative actions to determine the
cause of the borrower's default and the likelihood that the borrower will be
able to reinstate the loan. In some cases, courts have substituted their
judgment for the lender's and have required that lenders reinstate loans or
recast payment schedules in order to accommodate borrowers who are suffering
from a temporary financial disability. In other cases, courts have limited the
right of the lender to foreclose in the case of a nonmonetary default, such as
a failure to adequately maintain the mortgaged property or an impermissible
further encumbrance of the mortgaged property. Finally, some courts have
addressed the issue of whether federal or state constitutional provisions
reflecting due process concerns for adequate notice require that a borrower
receive notice in addition to statutorily-prescribed minimum notice. For the
most part, these cases have upheld the reasonableness of the notice provisions
or have found that a public sale under a mortgage providing for a power of sale
does not involve sufficient state action to trigger constitutional protections.
In addition, some states may have statutory protection such as the right
of the borrower to reinstate mortgage loans after commencement of foreclosure
proceedings but prior to a foreclosure sale.
Non-Judicial Foreclosure/Power of Sale. In states permitting non-judicial
foreclosure proceedings, foreclosure of a deed of trust is generally
accomplished by a non-judicial trustee's sale pursuant to a power of sale
typically granted in the deed of trust. A power of sale may also be contained
in any other type of mortgage instrument if applicable law so permits. A power
of sale under a deed of trust allows a non-judicial public sale to be conducted
generally following a request from the beneficiary/lender to the trustee to
sell the property upon default by the borrower and after notice of sale is
given in accordance with the terms of the mortgage and applicable state law. In
some states, prior to such sale, the trustee under the deed of trust must
record a notice of default and notice of sale and send a copy to the borrower
and to any other party who has recorded a request for a copy of a notice of
default and notice of sale. In addition, in some states the trustee must
provide notice to any other party having an interest of record
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in the real property, including junior lienholders. A notice of sale must be
posted in a public place and, in most states, published for a specified period
of time in one or more newspapers. The borrower or junior lienholder may then
have the right, during a reinstatement period required in some states, to cure
the default by paying the entire actual amount in arrears (without regard to
the acceleration of the indebtedness), plus the lender's expenses incurred in
enforcing the obligation. In other states, the borrower or the junior
lienholder is not provided a period to reinstate the loan, but has only the
right to pay off the entire debt to prevent the foreclosure sale. Generally,
state law governs the procedure for public sale, the parties entitled to
notice, the method of giving notice and the applicable time periods.
Public Sale. A third party may be unwilling to purchase a mortgaged
property at a public sale because of the difficulty in determining the exact
status of title to the property (due to, among other things, redemption rights
that may exist) and because of the possibility that physical deterioration of
the property may have occurred during the foreclosure proceedings. Therefore,
it is common for the lender to purchase the mortgaged property for an amount
equal to the secured indebtedness and accrued and unpaid interest plus the
expenses of foreclosure, in which event the borrower's debt will be
extinguished, or for a lesser amount in order to preserve its right to seek a
deficiency judgment if such is available under state law and under the terms of
the Mortgage Loan documents. (The Mortgage Loans, however, are generally
expected to be non-recourse. See "Risk Factors--Investment in Commercial and
Multifamily Mortgage Loans".) Thereafter, subject to the borrower's right in
some states to remain in possession during a redemption period, the lender will
become the owner of the property and have both the benefits and burdens of
ownership, including the obligation to pay debt service on any senior
mortgages, to pay taxes, to obtain casualty insurance and to make such repairs
as are necessary to render the property suitable for sale. The costs of
operating and maintaining a commercial or multifamily residential property may
be significant and may be greater than the income derived from that property.
The lender also will commonly obtain the services of a real estate broker and
pay the broker's commission in connection with the sale or lease of the
property. Depending upon market conditions, the ultimate proceeds of the sale
of the property may not equal the lender's investment in the property.
Moreover, because of the expenses associated with acquiring, owning and selling
a mortgaged property, a lender could realize an overall loss on a mortgage loan
even if the mortgaged property is sold at foreclosure, or resold after it is
acquired through foreclosure, for an amount equal to the full outstanding
principal amount of the loan plus accrued interest.
The holder of a junior mortgage that forecloses on a mortgaged property
does so subject to senior mortgages and any other prior liens, and may be
obliged to keep senior mortgage loans current in order to avoid foreclosure of
its interest in the property. In addition, if the foreclosure of a junior
mortgage triggers the enforcement of a "due-on-sale" clause contained in a
senior mortgage, the junior mortgagee could be required to pay the full amount
of the senior mortgage indebtedness or face foreclosure.
Rights of Redemption. The purposes of a foreclosure action are to enable
the lender to realize upon its security and to bar the borrower, and all
persons who have interests in the property that are subordinate to that of the
foreclosing lender, from exercise of their "equity of redemption". The doctrine
of equity of redemption provides that, until the property encumbered by a
mortgage has been sold in accordance with a properly conducted foreclosure and
foreclosure sale, those having interests that are subordinate to that of the
foreclosing lender have an equity of redemption and may redeem the property by
paying the entire debt with interest. Those having an equity of redemption must
generally be made parties and joined in the foreclosure proceeding in order for
their equity of redemption to be terminated.
The equity of redemption is a common-law (non-statutory) right which
should be distinguished from post-sale statutory rights of redemption. In some
states, after sale pursuant to a deed of trust or foreclosure of a mortgage,
the borrower and foreclosed junior lienors are given a statutory period in
which to redeem the property. In some states, statutory redemption may occur
only upon payment of the foreclosure sale price. In other states, redemption
may be permitted if the former borrower pays only a portion of the sums due.
The effect of a statutory right of redemption is to diminish the ability of the
lender to sell the foreclosed property because the exercise of a right of
redemption would defeat the title of any purchaser through a foreclosure.
Consequently, the practical effect of the redemption right is to force the
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lender to maintain the property and pay the expenses of ownership until the
redemption period has expired. In some states, a post-sale statutory right of
redemption may exist following a judicial foreclosure, but not following a
trustee's sale under a deed of trust.
Anti-Deficiency Legislation. Some or all of the Mortgage Loans may be
nonrecourse loans, as to which recourse in the case of default will be limited
to the Mortgaged Property and such other assets, if any, that were pledged to
secure the Mortgage Loan. However, even if a mortgage loan by its terms
provides for recourse to the borrower's other assets, a lender's ability to
realize upon those assets may be limited by state law. For example, in some
states a lender cannot obtain a deficiency judgment against the borrower
following foreclosure or sale under a deed of trust. A deficiency judgment is a
personal judgment against the former borrower equal to the difference between
the net amount realized upon the public sale of the real property and the
amount due to the lender. Other statutes may require the lender to exhaust the
security afforded under a mortgage before bringing a personal action against
the borrower. In certain other states, the lender has the option of bringing a
personal action against the borrower on the debt without first exhausting such
security; however, in some of those states, the lender, following judgment on
such personal action, may be deemed to have elected a remedy and thus may be
precluded from foreclosing upon the security. Consequently, lenders in those
states where such an election of remedy provision exists will usually proceed
first against the security. Finally, other statutory provisions, designed to
protect borrowers from exposure to large deficiency judgments that might result
from bidding at below-market values at the foreclosure sale, limit any
deficiency judgment to the excess of the outstanding debt over the fair market
value of the property at the time of the sale.
Leasehold Considerations. Mortgage Loans may be secured by a mortgage on
the borrower's leasehold interest in a ground lease. Leasehold mortgage loans
are subject to certain risks not associated with mortgage loans secured by a
lien on the fee estate of the borrower. The most significant of these risks is
that if the borrower's leasehold were to be terminated upon a lease default,
the leasehold mortgagee would lose its security. This risk may be lessened if
the ground lease requires the lessor to give the leasehold mortgagee notices of
lessee defaults and an opportunity to cure them, permits the leasehold estate
to be assigned to and by the leasehold mortgagee or the purchaser at a
foreclosure sale, and contains certain other protective provisions typically
included in a "mortgageable" ground lease. Certain Mortgage Loans, however, may
be secured by ground leases which do not contain these provisions.
Cross-Collateralization. Certain of the Mortgage Loans may be secured by
more than one mortgage covering properties located in more than one state.
Because of various state laws governing foreclosure or the exercise of a power
of sale and because, in general, foreclosure actions are brought in state court
and the courts of one state cannot exercise jurisdiction over property in
another state, it may be necessary upon a default under a cross-collateralized
Mortgage Loan to foreclose on the related mortgages in a particular order
rather than simultaneously in order to ensure that the lien of the mortgages is
not impaired or released.
BANKRUPTCY LAWS
Operation of the Bankruptcy Code and related state laws may interfere with
or affect the ability of a lender to realize upon collateral and/or to enforce
a deficiency judgment. For example, under the Bankruptcy Code, virtually all
actions (including foreclosure actions and deficiency judgment proceedings) to
collect a debt are automatically stayed upon the filing of the bankruptcy
petition and, often, no interest or principal payments are made during the
course of the bankruptcy case. The delay and the consequences thereof caused by
such automatic stay can be significant. Also, under the Bankruptcy Code, the
filing of a petition in bankruptcy by or on behalf of a junior lienor may stay
the senior lender from taking action to foreclose out such junior lien.
Under the Bankruptcy Code, provided certain substantive and procedural
safeguards protective of the lender are met, the amount and terms of a mortgage
loan secured by a lien on property of the debtor may be modified under certain
circumstances. For example, the outstanding amount of the loan may be reduced
to the then-current value of the property (with a corresponding partial
reduction of the amount of lender's security interest) pursuant to a confirmed
plan or lien avoidance proceeding, thus leaving the
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lender a general unsecured creditor for the difference between such value and
the outstanding balance of the loan. Other modifications may include the
reduction in the amount of each scheduled payment, by means of a reduction in
the rate of interest and/or an alteration of the repayment schedule (with or
without affecting the unpaid principal balance of the loan), and/or by an
extension (or shortening) of the term to maturity. Some bankruptcy courts have
approved plans, based on the particular facts of the reorganization case, that
effected the cure of a mortgage loan default by paying arrearages over a number
of years. Also, a bankruptcy court may permit a debtor, through its
rehabilitative plan, to reinstate a loan mortgage payment schedule even if the
lender has obtained a final judgment of foreclosure prior to the filing of the
debtor's petition.
Federal bankruptcy law may also have the effect of interfering with or
affecting the ability of a secured lender to enforce the borrower's assignment
of rents and leases related to the mortgaged property. Under the Bankruptcy
Code, a lender may be stayed from enforcing the assignment, and the legal
proceedings necessary to resolve the issue could be time-consuming, with
resulting delays in the lender's receipt of the rents. Recent amendments to the
Bankruptcy code, however, may minimize the impairment of the lender's ability
to enforce the borrower's assignment of rents and leases. In addition to the
inclusion of hotel revenues within the definition of "cash collateral" as noted
previously in the section entitled "--Leases and Rents", the amendments provide
that a pre-petition security interest in rents or hotel revenues is designed to
overcome those cases holding that a security interest in rents is unperfected
under the laws of certain states until the lender has taken some further
action, such as commencing foreclosure or obtaining a receiver prior to
activation of the assignment of rents.
If a borrower's ability to make payment on a mortgage loan is dependent on
its receipt of rent payments under a lease of the related property, that
ability may be impaired by the commencement of a bankruptcy case relating to a
lessee under such lease. Under the Bankruptcy Code, the filing of a petition in
bankruptcy by or on behalf of a lessee results in a stay in bankruptcy against
the commencement or continuation of any state court proceeding for past due
rent, for accelerated rent, for damages or for a summary eviction order with
respect to a default under the lease that occurred prior to the filing of the
lessee's petition. In addition, the Bankruptcy Code generally provides that a
trustee or debtor-in-possession may, subject to approval of the court, (i)
assume the lease and retain it or assign it to a third party or (ii) reject the
lease. If the lease is assumed, the trustee or debtor-in-possession (or
assignee, if applicable) must cure any defaults under the lease, compensate the
lessor for its losses and provide the lessor with "adequate assurance" of
future performance. Such remedies may be insufficient, and any assurances
provided to the lessor may, in fact, be inadequate. If the lease is rejected,
the lessor will be treated as an unsecured creditor with respect to its claim
for damages for termination of the lease. The Bankruptcy Code also limits a
lessor's damages for lease rejection to the rent reserved by the lease (without
regard to acceleration) for the greater of one year, or 15%, not to exceed
three years, of the remaining term of the lease.
ENVIRONMENTAL CONSIDERATIONS
General. A lender may be subject to environmental risks when taking a
security interest in real property. Of particular concern may be properties
that are or have been used for industrial, manufacturing, military or disposal
activity. Such environmental risks include the possible diminution of the value
of a contaminated property or, as discussed below, potential liability for
clean-up costs or other remedial actions that could exceed the value of the
property or the amount of the lender's loan. In certain circumstances, a lender
may decide to abandon a contaminated mortgaged property as collateral for its
loan rather than foreclose and risk liability for clean-up costs.
Superlien Laws. Under the laws of many states, contamination on a property
may give rise to a lien on the property for clean-up costs. In several states,
such a lien has priority over all existing liens, including those of existing
mortgages. In these states, the lien of a mortgage may lose its priority to
such a "superlien".
CERCLA. The federal Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended ("CERCLA"), imposes strict liability on
present and past "owners" and "operators" of contaminated real property for the
costs of clean-up. A secured lender may be liable as an "owner"
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or "operator" of a contaminated mortgaged property if agents or employees of
the lender have participated in the management of such mortgaged property or
the operations of the borrower. Such liability may exist even if the lender did
not cause or contribute to the contamination and regardless of whether the
lender has actually taken possession of a mortgaged property through
foreclosure, deed in lieu of foreclosure or otherwise. Moreover, such liability
is not limited to the original or unamortized principal balance of a loan or to
the value of the property securing a loan. Excluded from CERCLA's definition of
"owner" or "operator", however, is a person "who without participating in the
management of the facility, holds indicia of ownership primarily to protect his
security interest". This is the so called "secured creditor exemption".
The Asset Conservation, Lender Liability and Deposit Insurance Act of 1996
(the "Act") amended, among other things, the provisions of CERCLA with respect
to lender liability and the secured creditor exemption. The Act offers
substantial protection to lenders by defining the activities in which a lender
can engage and still have the benefit of the secured creditor exemption. In
order for a lender to be deemed to have participated in the management of a
mortgaged property, the lender must actually participate in the operational
affairs of the property of the borrower. The Act provides that "merely having
the capacity to influence, or unexercised right to control" operations does not
constitute participation in management. A lender will lose the protection of
the secured creditor exemption only if it exercises decision-making control
over the borrower's environmental compliance and hazardous substance handling
and disposal practices, or assumes day-to-day management of all operational
functions of the mortgaged property. The Act also provides that a lender will
continue to have the benefit of the secured creditor exemption even if it
forecloses on a mortgaged property, purchases it at a foreclosure sale or
accepts a deed-in-lieu of foreclosure provided that the lender seeks to sell
the mortgaged property at the earliest practicable commercially reasonable time
on commercially reasonable terms.
Certain Other Federal and State Laws. Many states have statutes similar to
CERCLA, and not all of those statutes provide for a secured creditor exemption.
In addition, under federal law, there is potential liability relating to
hazardous wastes and underground storage tanks under the federal Resource
Conservation and Recovery Act ("RCRA").
In addition, the definition of "hazardous substances" under CERCLA
specifically excludes petroleum products. Subtitle I of RCRA governs
underground petroleum storage tanks. Under the Act the protections accorded to
lenders under CERCLA are also accorded to the holders of security interests in
underground storage tanks. It should be noted, however, that liability for
cleanup of petroleum contamination may be governed by state law, which may not
provide for any specific protection for secured creditors.
In a few states, transfers of some types of properties are conditioned
upon cleanup of contamination prior to transfer. In these cases, a lender that
becomes the owner of a property through foreclosure, deed in lieu of
foreclosure or otherwise, may be required to clean up the contamination before
selling or otherwise transferring the property.
Beyond statute-based environmental liability, there exist common law
causes of action (for example, actions based on nuisance or on toxic tort
resulting in death, personal injury or damage to property) related to hazardous
environmental conditions on a property. While it may be more difficult to hold
a lender liable in such cases, unanticipated or uninsured liabilities of the
borrower may jeopardize the borrower's ability to meet its loan obligations.
Additional Considerations. The cost of remediating hazardous substance
contamination at a property can be substantial. If a lender becomes liable, it
can bring an action for contribution against the owner or operator who created
the environmental hazard, but that individual or entity may be without
substantial assets. Accordingly, it is possible that such costs could become a
liability of the Trust Fund and occasion a loss to the Certificateholders.
To reduce the likelihood of such a loss, unless otherwise specified in the
related Prospectus Supplement, the Pooling and Servicing Agreement will provide
that the Master Servicer, acting on behalf of the Trustee, may not acquire
title to a Mortgaged Property or take over its operation unless the Master
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Servicer, based solely (as to environmental matters) on a report prepared by a
person who regularly conducts environmental audits, has made the determination
that it is appropriate to do so, as described under "The Pooling and Servicing
Agreements-Realization Upon Defaulted Mortgage Loans".
If a lender forecloses on a mortgage secured by a property, the operations
on which are subject to environmental laws and regulations, the lender will be
required to operate the property in accordance with those laws and regulations.
Such compliance may entail substantial expense, especially in the case of
industrial or manufacturing properties.
In addition, a lender may be obligated to disclose environmental
conditions on a property to government entities and/or to prospective buyers
(including prospective buyers at a foreclosure sale or following foreclosure).
Such disclosure may decrease the amount that prospective buyers are willing to
pay for the affected property, sometimes substantially, and thereby decrease
the ability of the lender to recoup its investment in a loan upon foreclosure.
Environmental Site Assessments. In most cases, an environmental site
assessment of each Mortgaged Property will have been performed in connection
with the origination of the related Mortgage Loan or at some time prior to the
issuance of the related Certificates. Environmental site assessments, however,
vary considerably in their content, quality and cost. Even when adhering to
good professional practices, environmental consultants will sometimes not
detect significant environmental problems because to do an exhaustive
environmental assessment would be far too costly and time-consuming to be
practical.
DUE-ON-SALE AND DUE-ON-ENCUMBRANCE
Certain of the Mortgage Loans may contain "due-on-sale" and
"due-on-encumbrance" clauses that purport to permit the lender to accelerate
the maturity of the loan if the borrower transfers or encumbers the related
Mortgaged Property. In recent years, court decisions and legislative actions
placed substantial restrictions on the right of lenders to enforce such clauses
in many states. However, the Garn-St Germain Depository Institutions Act of
1982 (the "Garn Act") generally preempts state laws that prohibit the
enforcement of due-on-sale clauses and permits lenders to enforce these clauses
in accordance with their terms, subject to certain limitations as set forth in
the Garn Act and the regulations promulgated thereunder. Accordingly, a Master
Servicer may nevertheless have the right to accelerate the maturity of a
Mortgage Loan that contains a "due-on-sale" provision upon transfer of an
interest in the property, without regard to the Master Servicer's ability to
demonstrate that a sale threatens its legitimate security interest.
SUBORDINATE FINANCING
The terms of certain of the Mortgage Loans may not restrict the ability of
the borrower to use the Mortgaged Property as security for one or more
additional loans, or such restrictions may be unenforceable. Where a borrower
encumbers a mortgaged property with one or more junior liens, the senior lender
is subjected to additional risk. First, the borrower may have difficulty
servicing and repaying multiple loans. Moreover, if the subordinate financing
permits recourse to the borrower (as is frequently the case) and the senior
loan does not, a borrower may have more incentive to repay sums due on the
subordinate loan. Second, acts of the senior lender that prejudice the junior
lender or impair the junior lender's security may create a superior equity in
favor of the junior lender. For example, if the borrower and the senior lender
agree to an increase in the principal amount of or the interest rate payable on
the senior loan, the senior lender may lose its priority to the extent any
existing junior lender is harmed or the borrower is additionally burdened.
Third, if the borrower defaults on the senior loan and/or any junior loan or
loans, the existence of junior loans and actions taken by junior lenders can
impair the security available to the senior lender and can interfere with or
delay the taking of action by the senior lender. Moreover, the bankruptcy of a
junior lender may operate to stay foreclosure or similar proceedings by the
senior lender.
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DEFAULT INTEREST AND LIMITATIONS ON PREPAYMENTS
Notes and mortgages may contain provisions that obligate the borrower to
pay a late charge or additional interest if payments are not timely made, and
in some circumstances, may prohibit prepayments for a specified period and/or
condition prepayments upon the borrower's payment of prepayment fees or yield
maintenance penalties. In certain states, there are or may be specific
limitations upon the late charges which a lender may collect from a borrower
for delinquent payments. Certain states also limit the amounts that a lender
may collect from a borrower as an additional charge if the loan is prepaid. In
addition, the enforceability of provisions that provide for prepayment fees or
penalties upon an involuntary prepayment is unclear under the laws of many
states.
APPLICABILITY OF USURY LAWS
Title V of the Depository Institutions Deregulation and Monetary Control
Act of 1980 ("Title V") provides that state usury limitations shall not apply
to certain types of residential (including multifamily) first mortgage loans
originated by certain lenders after March 31, 1980. Title V authorized any
state to reimpose interest rate limits by adopting, before April 1, 1983, a law
or constitutional provision that expressly rejects application of the federal
law. In addition, even where Title V is not so rejected, any state is
authorized by the law to adopt a provision limiting discount points or other
charges on mortgage loans covered by Title V. Certain states have taken action
to reimpose interest rate limits and/or to limit discount points or other
charges.
No Mortgage Loan originated in any state in which application of Title V
has been expressly rejected or a provision limiting discount points or other
charges has been adopted, will (if originated after that rejection or adoption)
be eligible for inclusion in a Trust Fund unless (i) such Mortgage Loan
provides for such interest rate, discount points and charges as are permitted
in such state or (ii) such Mortgage Loan provides that the terms thereof are to
be construed in accordance with the laws of another state under which such
interest rate, discount points and charges would not be usurious and the
borrower's counsel has rendered an opinion that such choice of law provision
would be given effect.
SOLDIERS' AND SAILORS' CIVIL RELIEF ACT OF 1940
Under the terms of the Soldiers' and Sailors' Civil Relief Act of 1940, as
amended (the "Relief Act"), a borrower who enters military service after the
origination of such borrower's mortgage loan (including a borrower who was in
reserve status and is called to active duty after origination of the Mortgage
Loan), may not be charged interest (including fees and charges) above an annual
rate of 6% during the period of such borrower's active duty status, unless a
court orders otherwise upon application of the lender. The Relief Act applies
to individuals who are members of the Army, Navy, Air Force, Marines, National
Guard, Reserves, Coast Guard and officers of the U.S. Public Health Service
assigned to duty with the military. Because the Relief Act applies to
individuals who enter military service (including reservists who are called to
active duty) after origination of the related mortgage loan, no information can
be provided as to the number of loans with individuals as borrowers that may be
affected by the Relief Act. Application of the Relief Act would adversely
affect, for an indeterminate period of time, the ability of a Master Servicer
or Special Servicer to collect full amounts of interest on certain of the
Mortgage Loans. Any shortfalls in interest collections resulting from the
application of the Relief Act would result in a reduction of the amounts
distributable to the holders of the related series of Certificates, and would
not be covered by advances or, unless otherwise specified in the related
Prospectus Supplement, any form of Credit Support provided in connection with
such Certificates. In addition, the Relief Act imposes limitations that would
impair the ability of a Master Servicer or Special Servicer to foreclose on an
affected Mortgage Loan during the borrower's period of active duty status, and,
under certain circumstances, during an additional three month period
thereafter.
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CERTAIN FEDERAL INCOME TAX CONSEQUENCES
GENERAL
The following is a general discussion of the anticipated material federal
income tax consequences of the purchase, ownership and disposition of Offered
Certificates. The following summary is based on the Code as well as Treasury
regulations and administrative and judicial rulings and practice. Legislative,
judicial and administrative changes may occur, possibly with retroactive
effect, that could alter or modify the continued validity of the statements and
conclusions set forth herein. This summary does not purport to address all
federal income tax matters that may be relevant to particular holders. For
example, it generally is addressed only to original purchasers of the
Certificates that are United States investors, deals only with Certificates
held as capital assets within the meaning of Section 1221 of the Code, and does
not address tax consequences to holders that may be relevant to investors
subject to special rules, such as non- U.S. investors, banks, insurance
companies, tax-exempt organizations, electing large partnerships, dealers in
securities or currencies, mutual funds, REITs, S corporations, estates and
trusts, investors that hold the Certificates as part of a hedge, straddle,
integrated or conversion transaction, or holders whose "functional currency" is
not the United States dollar. Further, it does not address alternative minimum
tax consequences or the indirect effects on the holders of equity interests in
an entity that is a beneficial owner of the Certificates. Further, this
discussion does not address the state or local tax consequences of the
purchase, ownership and disposition of such Certificates. Investors should
consult their tax advisers in determining the federal, state, local, or other
tax consequences to them of the purchase, ownership and disposition of the
Certificates offered hereunder. See "State and Other Tax Consequences".
The following discussion addresses certificates ("REMIC Certificates")
representing interests in a Trust Fund, or a portion thereof, that the Master
Servicer or the Trustee will elect to have treated as a REMIC under Sections
860A through 860G (the "REMIC Provisions") of the Code. The Prospectus
Supplement for each series of Certificates will indicate whether a REMIC
election (or elections) will be made for the related Trust Fund and, if such an
election is to be made, will identify all "regular interests" and "residual
interests" in the REMIC. If a REMIC election will not be made for a Trust Fund,
the federal income tax consequences of the purchase, ownership and disposition
of the related Certificates will be set forth in the related Prospectus
Supplement. For purposes of this tax discussion, references to a
"Certificateholder" or a "holder" are to the beneficial owner of a Certificate.
The following discussion is limited in applicability to Offered
Certificates. Moreover, this discussion applies only to the extent that
Mortgage Assets held by a Trust Fund consist solely of Mortgage Loans. To the
extent that other Mortgage Assets, including REMIC certificates and mortgage
pass-through certificates, are to be held by a Trust Fund, the tax consequences
associated with the inclusion of such assets will be disclosed in the related
Prospectus Supplement. In addition, if Cash Flow Agreements, other than
guaranteed investment contracts, are included in a Trust Fund, the tax
consequences associated with such Cash Flow Agreements also will be disclosed
in the related Prospectus Supplement. See "Description of the Trust Funds--Cash
Flow Agreements".
Furthermore, the following discussion is based in part upon the rules
governing original issue discount that are set forth in Sections 1271-1273 and
1275 of the Code and in the Treasury regulations issued thereunder (the "OID
Regulations"), and in part upon the REMIC Provisions and the Treasury
regulations issued thereunder (the "REMIC Regulations"). The Oid Regulations do
not adequately address certain issues relevant to, and in some instances
provide that they are not applicable to, securities such as the Certificates.
REMICS
Classification of REMICs. Upon the issuance of each series of REMIC
Certificates, counsel to the Depositor will deliver its opinion generally to
the effect that, assuming compliance with all provisions of
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the related Pooling and Servicing Agreement, the related Trust Fund (or each
applicable portion thereof) will qualify as a REMIC and the REMIC Certificates
offered with respect thereto will be considered to evidence ownership of REMIC
Regular Certificates or REMIC Residual Certificates in that REMIC within the
meaning of the REMIC Provisions.
If an entity electing to be treated as a REMIC fails to comply with one or
more of the ongoing requirements of the Code for such status during any taxable
year, the Code provides that the entity will not be treated as a REMIC for such
year and thereafter. In that event, such entity may be taxable as a corporation
under Treasury regulations, and the related REMIC Certificates may not be
accorded the status or given the tax treatment described below. Although the
Code authorizes the Treasury Department to issue regulations providing relief
in the event of an inadvertent termination of REMIC status, no such regulations
have been issued. Any such relief, moreover, may be accompanied by sanctions,
such as the imposition of a corporate tax on all or a portion of the Trust
Fund's income for the period in which the requirements for such status are not
satisfied. The Pooling and Servicing Agreement with respect to each REMIC will
include provisions designed to maintain the Trust Fund's status as a REMIC
under the REMIC Provisions. It is not anticipated that the status of any Trust
Fund as a REMIC will be inadvertently terminated.
Tiered REMIC Structures. For certain series of REMIC Certificates, two or
more separate elections may be made to treat designated portions of the related
Trust Fund as REMICs ("Tiered REMICs") for federal income tax purposes. Upon
the issuance of any such series of REMIC Certificates, counsel to the Depositor
will deliver its opinion generally to the effect that, assuming compliance with
all provisions of the related Pooling and Servicing Agreement, the Tiered
REMICs will each qualify as a REMIC and the REMIC Certificates issued by the
Tiered REMICs, will be considered to evidence ownership of REMIC Regular
Certificates or REMIC Residual Certificates in the related REMIC within the
meaning of the REMIC Provisions.
Taxation of Owners of REMIC Regular Certificates
General. Except as otherwise stated in this discussion, REMIC Regular
Certificates will be treated for federal income tax purposes as debt
instruments issued by the REMIC and not as ownership interests in the REMIC or
its assets. Moreover, holders of REMIC Regular Certificates that otherwise
report income under a cash method of accounting will be required to report
income with respect to REMIC Regular Certificates under an accrual method.
Original Issue Discount. Certain REMIC Regular Certificates may be issued
with "original issue discount" within the meaning of Section 1273(a) of the
Code. Any holders of REMIC Regular Certificates issued with original issue
discount generally will be required to include original issue discount in
income as it accrues, in accordance with the method described below, in advance
of the receipt of the cash attributable to such income. In addition, Section
1272(a)(6) of the Code provides special rules applicable to REMIC Regular
Certificates and certain other debt instruments issued with original issue
discount. Regulations have not been issued under that section.
The Code requires that a prepayment assumption be used with respect to
Mortgage Loans held by a REMIC in computing the accrual of original issue
discount on REMIC Regular Certificates issued by that REMIC, and that
adjustments be made in the amount and rate of accrual of such discount to
reflect differences between the actual prepayment rate and the prepayment
assumption. The prepayment assumption is to be determined in a manner
prescribed in Treasury regulations; as noted above, those regulations have not
been issued. The Conference Committee Report accompanying the Tax Reform Act of
1986 (the "Committee Report") indicates that the regulations will provide that
the prepayment assumption used with respect to a REMIC Regular Certificate must
be the same as that used in pricing the initial offering of such REMIC Regular
Certificate. The prepayment assumption (the "Prepayment Assumption") used in
reporting original issue discount for each series of REMIC Regular Certificates
will be consistent with this standard and will be disclosed in the related
Prospectus Supplement. However, neither the Depositor nor any other person will
make any representation that the Mortgage Loans will in fact prepay at a rate
conforming to the Prepayment Assumption or at any other rate.
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The original issue discount, if any, on a REMIC Regular Certificate will
be the excess of its stated redemption price at maturity over its issue price.
The issue price of a particular class of REMIC Regular Certificates will be the
first cash price at which a substantial amount of REMIC Regular Certificates of
that class is sold (excluding sales to bond houses, brokers and underwriters).
If less than a substantial amount of a particular class of REMIC Regular
Certificates is sold for cash on or prior to the date of their initial issuance
(the "Closing Date"), the issue price for such class will be the fair market
value of such class on the Closing Date. Under the OID Regulations, the stated
redemption price of a REMIC Regular Certificate is equal to the total of all
payments to be made on such Certificate other than "qualified stated interest".
"Qualified stated interest" is interest that is unconditionally payable at
least annually at a single fixed rate, or at a "qualified floating rate", an
"objective rate", a combination of a single fixed rate and one or more
"qualified floating rates" or one "qualified inverse floating rate", or a
combination of "qualified floating rates" that does not operate in a manner
that accelerates or defers interest payments on such REMIC Regular Certificate.
In the case of REMIC Regular Certificates bearing adjustable interest
rates, the determination of the total amount of original issue discount and the
timing of the inclusion thereof will vary according to the characteristics of
such REMIC Regular Certificates. If the original issue discount rules apply to
such Certificates, the related Prospectus Supplement will describe the manner
in which such rules will be applied with respect to those Certificates in
preparing information returns to the Certificateholders and the IRS.
Certain classes of the REMIC Regular Certificates may provide for the
first interest payment with respect to such Certificates to be made more than
one month after the date of issuance, a period which is longer than the
subsequent monthly intervals between interest payments. Assuming the "accrual
period" (as defined below) for original issue discount is each monthly period
that ends on a Distribution Date, in some cases, as a consequence of this "long
first accrual period", some or all interest payments may be required to be
included in the stated redemption price of the REMIC Regular Certificate and
accounted for as original issue discount. Because interest on REMIC Regular
Certificates must in any event be accounted for under an accrual method,
applying this analysis would result in only a slight difference in the timing
of the inclusion in income of the yield on the REMIC Regular Certificates.
In addition, if the accrued interest to be paid on the first Distribution
Date is computed with respect to a period that begins prior to the Closing
Date, a portion of the purchase price paid for a REMIC Regular Certificate will
reflect such accrued interest. In such cases, information returns provided to
the Certificateholders and the IRS will be based on the position that the
portion of the purchase price paid for the interest accrued with respect to
periods prior to the Closing Date is treated as part of the overall cost of
such REMIC Regular Certificate (and not as a separate asset the cost of which
is recovered entirely out of interest received on the next Distribution Date)
and that portion of the interest paid on the first Distribution Date in excess
of interest accrued for a number of days corresponding to the number of days
from the Closing Date to the first Distribution Date should be included in the
stated redemption price of such REMIC Regular Certificate. However, the OID
Regulations state that all or some portion of such accrued interest may be
treated as a separate asset the cost of which is recovered entirely out of
interest paid on the first Distribution Date. It is unclear how an election to
do so would be made under the OID Regulations and whether such an election
could be made unilaterally by a Certificateholder.
Notwithstanding the general definition of original issue discount,
original issue discount on a REMIC Regular Certificate will be considered to be
de minimis if it is less than 0.25% of the stated redemption price of the REMIC
Regular Certificate multiplied by its weighted average life. For this purpose,
the weighted average life of the REMIC Regular Certificate is computed as the
sum of the amounts determined, as to each payment included in the stated
redemption price of such REMIC Regular Certificate, by multiplying (i) the
number of complete years (rounding down for partial years) from the issue date
until such payment is expected to be made (presumably taking into account the
Prepayment Assumption) by (ii) a fraction, the numerator of which is the amount
of the payment, and the denominator of which is the stated redemption price at
maturity of such REMIC Regular Certificate. Under the OID Regulations, original
issue discount of only a de minimis amount (other than de minimis original
issue discount attributable to a so-called "teaser" interest rate or an initial
interest holiday) will be included in
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income as each payment of stated principal is made, based on the product of the
total amount of such de minimis original issue discount and a fraction, the
numerator of which is the amount of such principal payment and the denominator
of which is the outstanding stated principal amount of the REMIC Regular
Certificate. The OID Regulations also would permit a Certificateholder to elect
to accrue de minimis original issue discount into income currently based on a
constant yield method. See "--Taxation of Owners of REMIC Regular
Certificates--Market Discount" for a description of such election under the OID
Regulations.
If original issue discount on a REMIC Regular Certificate is in excess of
a de minimis amount, the holder of such Certificate must include in ordinary
gross income the sum of the "daily portions" of original issue discount for
each day during its taxable year on which it held such REMIC Regular
Certificate, including the purchase date but excluding the disposition date. In
the case of an original holder of a REMIC Regular Certificate, the daily
portions of original issue discount will be determined as follows.
As to each "accrual period", that is, unless otherwise stated in the
related Prospectus Supplement, each period that ends on a date that corresponds
to a Distribution Date and begins on the first day following the immediately
preceding accrual period (or in the case of the first such period, begins on
the Closing Date), a calculation will be made of the portion of the original
issue discount that accrued during such accrual period. The portion of original
issue discount that accrues in any accrual period will equal the excess, if
any, of (i) the sum of (a) the present value, as of the end of the accrual
period, of all of the distributions remaining to be made on the REMIC Regular
Certificate, if any, in future periods and (b) the distributions made on such
REMIC Regular Certificate during the accrual period of amounts included in the
stated redemption price, over (ii) the adjusted issue price of such REMIC
Regular Certificate at the beginning of the accrual period. The present value
of the remaining distributions referred to in the preceding sentence will be
calculated (i) assuming that distributions on the REMIC Regular Certificate
will be received in future periods based on the Mortgage Loans being prepaid at
a rate equal to the Prepayment Assumption and (ii) using a discount rate equal
to the original yield to maturity of the Certificate. For these purposes, the
original yield to maturity of the Certificate will be calculated based on its
issue price and assuming that distributions on the Certificate will be made in
all accrual periods based on the Mortgage Loans being prepaid at a rate equal
to the Prepayment Assumption. The adjusted issue price of a REMIC Regular
Certificate at the beginning of any accrual period will equal the issue price
of such Certificate, increased by the aggregate amount of original issue
discount that accrued with respect to such Certificate in prior accrual
periods, and reduced by the amount of any distributions made on such REMIC
Regular Certificate in prior accrual periods of amounts included in the stated
redemption price. The original issue discount accruing during any accrual
period, computed as described above, will be allocated ratably to each day
during the accrual period to determine the daily portion of original issue
discount for such day.
A subsequent purchaser of a REMIC Regular Certificate that purchases such
Certificate at a cost (excluding any portion of such cost attributable to
accrued qualified stated interest) less than its remaining stated redemption
price will also be required to include in gross income the daily portions of
any original issue discount with respect to such Certificate. However, each
such daily portion will be reduced, if such cost is in excess of its "adjusted
issue price", in proportion to the ratio such excess bears to the aggregate
original issue discount remaining to be accrued on such REMIC Regular
Certificate. The adjusted issue price of a REMIC Regular Certificate on any
given day equals the sum of (i) the adjusted issue price (or, in the case of
the first accrual period, the issue price) of such Certificate at the beginning
of the accrual period which includes such day and (ii) the daily portions of
original issue discount for all days during such accrual period prior to such
day.
Market Discount. A Certificateholder that purchases a REMIC Regular
Certificate at a market discount, that is, in the case of a REMIC Regular
Certificate issued without original issue discount, at a purchase price less
than its remaining stated principal amount, or in the case of a REMIC Regular
Certificate issued with original issue discount, at a purchase price less than
its adjusted issue price will recognize gain upon receipt of each distribution
representing stated redemption price. In particular, under Section 1276 of the
Code such a Certificateholder generally will be required to allocate the
portion of each such distribution representing stated redemption price first to
accrued market discount not
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previously included in income, and to recognize ordinary income to that extent.
A Certificateholder may elect to include market discount in income currently as
it accrues rather than including it on a deferred basis in accordance with the
foregoing. If made, such election will apply to all market discount bonds
acquired by such Certificateholder on or after the first day of the first
taxable year to which such election applies. In addition, the OID Regulations
permit a Certificateholder to elect to accrue all interest, discount (including
de minimis market or original issue discount) and premium in income as
interest, based on a constant yield method. If such an election were made with
respect to a REMIC Regular Certificate with market discount, the
Certificateholder would be deemed to have made an election to include currently
market discount in income with respect to all other debt instruments having
market discount that such Certificateholder acquires during the taxable year of
the election or thereafter, and possibly previously acquired instruments.
Similarly, a Certificateholder that made this election for a Certificate that
is acquired at a premium would be deemed to have made an election to amortize
bond premium with respect to all debt instruments having amortizable bond
premium that such Certificateholder owns or acquires. See "--Taxation of Owners
of REMIC Regular Certificates--Premium" below. Each of these elections to
accrue interest, discount and premium with respect to a Certificate on a
constant yield method or as interest would be irrevocable.
However, market discount with respect to a REMIC Regular Certificate will
be considered to be de minimis for purposes of Section 1276 of the Code if such
market discount is less than 0.25% of the remaining stated redemption price of
such REMIC Regular Certificate multiplied by the number of complete years to
maturity remaining after the date of its purchase. In interpreting a similar
rule with respect to original issue discount on obligations payable in
installments, the OID Regulations refer to the weighted average maturity of
obligations, and it is likely that the same rule will be applied with respect
to market discount, presumably taking into account the Prepayment Assumption.
If market discount is treated as de minimis under this rule, it appears that
the actual discount would be treated in a manner similar to original issue
discount of a de minimis amount. See "--Taxation of Owners of REMIC Regular
Certificates--Original Issue Discount" above. Such treatment would result in
discount being included in income at a slower rate than discount would be
required to be included in income using the method described above.
Section 1276(b)(3) of the Code specifically authorizes the Treasury
Department to issue regulations providing for the method for accruing market
discount on debt instruments, the principal of which is payable in more than
one installment. Until regulations are issued by the Treasury Department,
certain rules described in the Committee Report apply. The Committee Report
indicates that in each accrual period market discount on REMIC Regular
Certificates should accrue, at the Certificateholder's option: (i) on the basis
of a constant yield method, (ii) in the case of a REMIC Regular Certificate
issued without original issue discount, in an amount that bears the same ratio
to the total remaining market discount as the stated interest paid in the
accrual period bears to the total amount of stated interest remaining to be
paid on the REMIC Regular Certificate as of the beginning of the accrual
period, or (iii) in the case of a REMIC Regular Certificate issued with
original issue discount, in an amount that bears the same ratio to the total
remaining market discount as the original issue discount accrued in the accrual
period bears to the total original issue discount remaining on the REMIC
Regular Certificate at the beginning of the accrual period. Moreover, the
Prepayment Assumption used in calculating the accrual of original issue
discount is also used in calculating the accrual of market discount. Because
the regulations referred to in this paragraph have not been issued, it is not
possible to predict what effect such regulations might have on the tax
treatment of a REMIC Regular Certificate purchased at a discount in the
secondary market.
To the extent that REMIC Regular Certificates provide for monthly or other
periodic distributions throughout their term, the effect of these rules may be
to require market discount to be includible in income at a rate that is not
significantly slower than the rate at which such discount would accrue if it
were original issue discount. Moreover, in any event a holder of a REMIC
Regular Certificate generally will be required to treat a portion of any gain
on the sale or exchange of such Certificate as ordinary income to the extent of
the market discount accrued to the date of disposition under one of the
foregoing methods, less any accrued market discount previously reported as
ordinary income.
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Further, under Section 1277 of the Code a holder of a REMIC Regular
Certificate may be required to defer a portion of its interest deductions for
the taxable year attributable to any indebtedness incurred or continued to
purchase or carry a REMIC Regular Certificate purchased with market discount.
For these purposes, the de minimis rule referred to above applies. Any such
deferred interest expense would not exceed the market discount that accrues
during such taxable year and is, in general, allowed as a deduction not later
than the year in which such market discount is includible in income. If such
holder elects to include market discount in income currently as it accrues on
all market discount instruments acquired by such holder in that taxable year or
thereafter, the interest deferral rule described above will not apply.
Premium. A REMIC Regular Certificate purchased at a cost (excluding any
portion of such cost attributable to accrued qualified stated interest) greater
than its remaining stated redemption price will be considered to be purchased
at a premium. The holder of such a REMIC Regular Certificate may elect under
Section 171 of the Code to amortize such premium under the constant yield
method over the life of the Certificate. If made, such an election will apply
to all debt instruments having amortizable bond premium that the holder owns or
subsequently acquires. Amortizable premium will be treated as an offset to
interest income on the related debt instrument, rather than as a separate
interest deduction. The OID Regulations also permit Certificateholders to elect
to include all interest, discount and premium in income based on a constant
yield method, further treating the Certificateholder as having made the
election to amortize premium generally. See "--Taxation of Owners of REMIC
Regular Certificates--Market Discount" above. The Committee Report states that
the same rules that apply to accrual of market discount (which rules will
require use of a Prepayment Assumption in accruing market discount with respect
to REMIC Regular Certificates without regard to whether such Certificates have
original issue discount) will also apply in amortizing bond premium under
Section 171 of the Code.
Realized Losses. Under Section 166 of the Code, both corporate holders of
the REMIC Regular Certificates and noncorporate holders of the REMIC Regular
Certificates that acquire such Certificates in connection with a trade or
business should be allowed to deduct, as ordinary losses, any losses sustained
during a taxable year in which their Certificates become wholly or partially
worthless as the result of one or more realized losses on the Mortgage Loans.
However, it appears that a noncorporate holder that does not acquire a REMIC
Regular Certificate in connection with a trade or business will not be entitled
to deduct a loss under Section 166 of the Code until such holder's Certificate
becomes wholly worthless (i.e., until its outstanding principal balance has
been reduced to zero) and that the loss will be characterized as a short-term
capital loss.
Each holder of a REMIC Regular Certificate will be required to accrue
interest and original issue discount with respect to such Certificate, without
giving effect to any reductions in distributions attributable to defaults or
delinquencies on the Mortgage Loans or the Underlying Certificates until it can
be established that any such reduction ultimately will not be recoverable. As a
result, the amount of taxable income reported in any period by the holder of a
REMIC Regular Certificate could exceed the amount of economic income actually
realized by the holder in such period. Although the holder of a REMIC Regular
Certificate eventually will recognize a loss or reduction in income
attributable to previously accrued and included income that as the result of a
realized loss ultimately will not be realized, the law is unclear with respect
to the timing and character of such loss or reduction in income.
Taxation of Owners of REMIC Residual Certificates
General. As residual interests, the REMIC Residual Certificates will be
subject to tax rules that differ significantly from those that would apply if
the REMIC Residual Certificates were treated for federal income tax purposes as
direct ownership interests in the Mortgage Loans or as debt instruments issued
by the REMIC.
A holder of a REMIC Residual Certificate generally will be required to
report its daily portion of the taxable income or, subject to the limitations
noted in this discussion, the net loss of the REMIC for each day during a
calendar quarter that such holder owned such REMIC Residual Certificate. For
this purpose, the taxable income or net loss of the REMIC will be allocated to
each day in the calendar quarter ratably using a "30 days per month/90 days per
quarter/360 days per year" convention unless
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otherwise disclosed in the related Prospectus Supplement. The daily amounts so
allocated will then be allocated among the REMIC Residual Certificateholders in
proportion to their respective ownership interests on such day. Any amount
included in the gross income or allowed as a loss of any REMIC Residual
Certificateholder by virtue of this paragraph will be treated as ordinary
income or loss. The taxable income of the REMIC will be determined under the
rules described below in "--Taxable Income of the REMIC" and will be taxable to
the REMIC Residual Certificateholders without regard to the timing or amount of
cash distributions by the REMIC. Ordinary income derived from REMIC Residual
Certificates will be "portfolio income" for purposes of the taxation of
taxpayers subject to limitations under Section 469 of the Code on the
deductibility of "passive losses".
A holder of a REMIC Residual Certificate that purchased such Certificate
from a prior holder of such Certificate also will be required to report on its
federal income tax return amounts representing its daily share of the taxable
income (or net loss) of the REMIC for each day that it holds such REMIC
Residual Certificate. Those daily amounts generally will equal the amounts of
taxable income or net loss determined as described above. The Committee Report
indicates that certain modifications of the general rules may be made, by
regulations, legislation or otherwise to reduce (or increase) the income of a
REMIC Residual Certificateholder that purchased such REMIC Residual Certificate
from a prior holder of such Certificate at a price greater than (or less than)
the adjusted basis (as defined below) such REMIC Residual Certificate would
have had in the hands of an original holder of such Certificate. The REMIC
Regulations, however, do not provide for any such modifications.
Any payments received by a holder of a REMIC Residual Certificate in
connection with the acquisition of such REMIC Residual Certificate will be
taken into account in determining the income of such holder for federal income
tax purposes. Although it appears likely that any such payment would be
includible in income immediately upon its receipt, the IRS might assert that
such payment should be included in income over time according to an
amortization schedule or according to some other method. Because of the
uncertainty concerning the treatment of such payments, holders of REMIC
Residual Certificates should consult their tax advisors concerning the
treatment of such payments for income tax purposes.
The amount of income REMIC Residual Certificateholders will be required to
report (or the tax liability associated with such income) may exceed the amount
of cash distributions received from the REMIC for the corresponding period.
Consequently, REMIC Residual Certificateholders should have other sources of
funds sufficient to pay any federal income taxes due as a result of their
ownership of REMIC Residual Certificates or unrelated deductions against which
income may be offset, subject to the rules relating to "excess inclusions",
residual interests without "significant value" and "noneconomic" residual
interests discussed below. The fact that the tax liability associated with the
income allocated to REMIC Residual Certificateholders may exceed the cash
distributions received by such REMIC Residual Certificateholders for the
corresponding period may significantly adversely affect such REMIC Residual
Certificateholders' after-tax rate of return.
Taxable Income of the REMIC. The taxable income of the REMIC will equal
the income from the Mortgage Loans and other assets of the REMIC plus any
cancellation of indebtedness income due to the allocation of realized losses to
REMIC Regular Certificates, less the deductions allowed to the REMIC for
interest (including original issue discount and reduced by any premium on
issuance) on the REMIC Regular Certificates (and any other class of REMIC
Certificates constituting "regular interests" in the REMIC not offered hereby),
amortization of any premium on the Mortgage Loans, bad debt losses with respect
to the Mortgage Loans and, except as described below, for servicing,
administrative and other expenses.
For purposes of determining its taxable income, the REMIC will have an
initial aggregate basis in its assets equal to the sum of the issue prices of
all REMIC Certificates (or, if a class of REMIC Certificates is not sold
initially, their fair market values). Such aggregate basis will be allocated
among the Mortgage Loans and the other assets of the REMIC in proportion to
their respective fair market values. The issue price of any REMIC Certificates
offered hereby will be determined in the manner described above under
"--Taxation of Owners of REMIC Regular Certificates--Original Issue Discount".
The issue price of a
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REMIC Certificate received in exchange for an interest in the Mortgage Loans or
other property will equal the fair market value of such interests in the
Mortgage Loans or other property. Accordingly, if one or more classes of REMIC
Certificates are retained initially rather than sold, the Master Servicer or
the Trustee may be required to estimate the fair market value of such interests
in order to determine the basis of the REMIC in the Mortgage Loans and other
property held by the REMIC.
Subject to possible application of the de minimis rules, the method of
accrual by the REMIC of original issue discount income and market discount
income with respect to Mortgage Loans that it holds will be equivalent to the
method for accruing original issue discount income for holders of REMIC Regular
Certificates (that is, under the constant yield method taking into account the
Prepayment Assumption). However, a REMIC that acquires loans at a market
discount must include such market discount in income currently, as it accrues,
on a constant yield basis. See "--Taxation of Owners of REMIC Regular
Certificates" above, which describes a method for accruing such discount income
that is analogous to that required to be used by a REMIC as to Mortgage Loans
with market discount that it holds.
A Mortgage Loan will be deemed to have been acquired with discount (or
premium) to the extent that the REMIC's basis therein, determined as described
in the preceding paragraph, is less than (or greater than) its stated
redemption price. Any such discount will be includible in the income of the
REMIC as it accrues, in advance of receipt of the cash attributable to such
income, under a method similar to the method described above for accruing
original issue discount on the REMIC Regular Certificates. It is anticipated
that each REMIC will elect under Section 171 of the Code to amortize any
premium on the Mortgage Loans. Premium on any Mortgage Loan to which such
election applies may be amortized under a constant yield method, presumably
taking into account a Prepayment Assumption. Further, such an election would
not apply to any Mortgage Loan originated on or before September 27, 1985.
Instead, premium on such a Mortgage Loan should be allocated among the
principal payments thereon and be deductible by the REMIC as those payments
become due or upon the prepayment of such Mortgage Loan.
A REMIC will be allowed deductions for interest (including original issue
discount) on the REMIC Regular Certificates (including any other class of REMIC
Certificates constituting "regular interests" in the REMIC not offered hereby)
equal to the deductions that would be allowed if the REMIC Regular Certificates
(including any other class of REMIC Certificates constituting "regular
interests" in the REMIC not offered hereby) were indebtedness of the REMIC.
Original issue discount will be considered to accrue for this purpose as
described above under "--Taxation of Owners of REMIC Regular
Certificates--Original Issue Discount", except that the de minimis rule and the
adjustments for subsequent holders of REMIC Regular Certificates (including any
other class of REMIC Certificates constituting "regular interests" in the REMIC
not offered hereby) described therein will not apply.
If a class of REMIC Regular Certificates is issued at a price in excess of
the stated redemption price of such class (such excess "Issue Premium"), the
net amount of interest deductions that are allowed the REMIC in each taxable
year with respect to the REMIC Regular Certificates of such class will be
reduced by an amount equal to the portion of the Issue Premium that is
considered to be amortized or repaid in that year. Although the matter is not
entirely certain, it is likely that Issue Premium would be amortized under a
constant yield method in a manner analogous to the method of accruing original
issue discount described above under "--Taxation of Owners of REMIC Regular
Certificates--Original Issue Discount".
As a general rule, the taxable income of a REMIC will be determined in the
same manner as if the REMIC were an individual having the calendar year as its
taxable year and using the accrual method of accounting. However, no item of
income, gain, loss or deduction allocable to a prohibited transaction will be
taken into account. See "--Prohibited Transactions Tax and Other Taxes" below.
Further, the limitation on miscellaneous itemized deductions imposed on
individuals by Section 67 of the Code (which allows such deductions only to the
extent they exceed in the aggregate two percent of the taxpayer's adjusted
gross income) will not be applied at the REMIC level so that the REMIC will be
allowed deductions for servicing, administrative and other non-interest
expenses in determining its taxable income. All such expenses will be allocated
as a separate item to the holders of REMIC Certificates,
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subject to the limitation of Section 67 of the Code. See "--Possible
Pass-Through of Miscellaneous Itemized Deductions" below. If the deductions
allowed to the REMIC exceed its gross income for a calendar quarter, such
excess will be the net loss for the REMIC for that calendar quarter.
Basis Rules, Net Losses and Distributions. The adjusted basis of a REMIC
Residual Certificate will be equal to the amount paid for such REMIC Residual
Certificate, increased by amounts included in the income of the REMIC Residual
Certificateholder and decreased (but not below zero) by distributions made, and
by net losses allocated, to such REMIC Residual Certificateholder.
A REMIC Residual Certificateholder is not allowed to take into account any
net loss for any calendar quarter to the extent such net loss exceeds such
REMIC Residual Certificateholder's adjusted basis in its REMIC Residual
Certificate as of the close of such calendar quarter (determined without regard
to such net loss). Any loss that is not currently deductible by reason of this
limitation may be carried forward indefinitely to future calendar quarters and,
subject to the same limitation, may be used only to offset income from the
REMIC Residual Certificate. The ability of REMIC Residual Certificateholders to
deduct net losses may be subject to additional limitations under the Code, as
to which REMIC Residual Certificateholders should consult their tax advisors.
Any distribution on a REMIC Residual Certificate will be treated as a
non-taxable return of capital to the extent it does not exceed the holder's
adjusted basis in such REMIC Residual Certificate. To the extent a distribution
on a REMIC Residual Certificate exceeds such adjusted basis, it will be treated
as gain from the sale of such REMIC Residual Certificate. Holders of certain
REMIC Residual Certificates may be entitled to distributions early in the term
of the related REMIC under circumstances in which their bases in such REMIC
Residual Certificates will not be sufficiently large that such distributions
will be treated as non-taxable returns of capital. Their bases in such REMIC
Residual Certificates will initially equal the amount paid for such REMIC
Residual Certificates and will be increased by their allocable shares of
taxable income of the REMIC. However, such bases increases may not occur until
the end of the calendar quarter, or perhaps the end of the calendar year, with
respect to which such REMIC taxable income is allocated to the REMIC Residual
Certificateholders. To the extent such REMIC Residual Certificateholders'
initial bases are less than the distributions to such REMIC Residual
Certificateholders, and increases in such initial bases either occur after such
distributions or (together with their initial bases) are less than the amount
of such distributions, gain will be recognized to such REMIC Residual
Certificateholders on such distributions and will be treated as gain from the
sale of their REMIC Residual Certificates.
The effect of these rules is that a REMIC Residual Certificateholder may
not amortize its basis in a REMIC Residual Certificate, but may only recover
its basis through distributions, through the deduction of any net losses of the
REMIC or upon the sale of its REMIC Residual Certificate. See "--Sales of REMIC
Certificates" below. For a discussion of possible modifications of these rules
that may require adjustments to income of a holder of a REMIC Residual
Certificate other than an original holder in order to reflect any difference
between the cost of such REMIC Residual Certificate to such REMIC Residual
Certificateholder and the adjusted basis such REMIC Residual Certificate would
have in the hands of an original holder see "--Taxation of Owners of REMIC
Residual Certificates--General" above.
Excess Inclusions. Any "excess inclusions" with respect to a REMIC
Residual Certificate will be subject to federal income tax in all events.
In general, the "excess inclusions" with respect to a REMIC Residual
Certificate for any calendar quarter will be the excess, if any, of (i) the
daily portions of REMIC taxable income allocable to such REMIC Residual
Certificate over (ii) the sum of the "daily accruals" (as defined below) for
each day during such quarter that such REMIC Residual Certificate was held by
such REMIC Residual Certificateholder. The daily accruals of a REMIC Residual
Certificateholder will be determined by allocating to each day during a
calendar quarter its ratable portion of the product of the "adjusted issue
price" of the REMIC Residual Certificate at the beginning of the calendar
quarter and 120% of the "long-term Federal rate" in effect on the Closing Date.
For this purpose, the adjusted issue price of a REMIC Residual Certificate as
of the beginning of any calendar quarter will be equal to the issue price of
the REMIC Residual Certificate, increased by the sum of the daily accruals for
all prior quarters and
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decreased (but not below zero) by any distributions made with respect to such
REMIC Residual Certificate before the beginning of such quarter. The issue
price of a REMIC Residual Certificate is the initial offering price to the
public (excluding bond houses and brokers) at which a substantial amount of the
REMIC Residual Certificates were sold. The "long-term Federal rate" is an
average of current yields on Treasury securities with a remaining term of
greater than nine years, computed and published monthly by the IRS. Although it
has not done so, the Treasury has authority to issue regulations that would
treat the entire amount of income accruing on a REMIC Residual Certificate as
an excess inclusion if the REMIC Residual Certificates are considered not to
have "significant value."
For REMIC Residual Certificateholders, excess inclusions (i) will not be
permitted to be offset by deductions, losses or loss carryovers from other
activities, (ii) will be treated as "unrelated business taxable income" to an
otherwise tax-exempt organization and (iii) will not be eligible for any rate
reduction or exemption under any applicable tax treaty with respect to the 30%
United States withholding tax imposed on distributions to REMIC Residual
Certificateholders that are foreign investors. See, however, "--Foreign
Investors in REMIC Certificates" below. Furthermore, for purposes of the
alternative minimum tax, (i) excess inclusions will not be permitted to be
offset by the alternative tax net operating loss deduction and (ii) alternative
minimum taxable income may not be less than the taxpayer's excess inclusions.
The latter rule has the effect of preventing non-refundable tax credits from
reducing the taxpayer's income tax to an amount lower than the tentative
minimum tax on excess inclusions.
In the case of any REMIC Residual Certificates held by a real estate
investment trust, the aggregate excess inclusions with respect to such REMIC
Residual Certificates, reduced (but not below zero) by the real estate
investment trust taxable income (within the meaning of Section 857(b)(2) of the
Code, excluding any net capital gain), will be allocated among the shareholders
of such trust in proportion to the dividends received by such shareholders from
such trust, and any amount so allocated will be treated as an excess inclusion
with respect to a REMIC Residual Certificate as if held directly by such
shareholder. Treasury regulations yet to be issued could apply a similar rule
to regulated investment companies, common trust funds and certain cooperatives;
the REMIC Regulations currently do not address this subject.
Noneconomic REMIC Residual Certificates. Under the REMIC Regulations,
transfers of "noneconomic" REMIC Residual Certificates will be disregarded for
all federal income tax purposes if "a significant purpose of the transfer was
to enable the transferor to impede the assessment or collection of tax". If
such transfer is disregarded, the purported transferor will continue to remain
liable for any taxes due with respect to the income on such "noneconomic" REMIC
Residual Certificate. The REMIC Regulations provide that a REMIC Residual
Certificate is noneconomic unless, based on the Prepayment Assumption and on
any required or permitted clean up calls, or required liquidation provided for
in the REMIC's organizational documents, (1) the present value of the expected
future distributions (discounted using the "applicable Federal rate" for
obligations whose term ends on the close of the last quarter in which excess
inclusions are expected to accrue with respect to the REMIC Residual
Certificate, which rate is computed and published monthly by the IRS) on the
REMIC Residual Certificate equals at least the present value of the expected
tax on the anticipated excess inclusions, and (2) the transferor reasonably
expects that the transferee will receive distributions with respect to the
REMIC Residual Certificate at or after the time the taxes accrue on the
anticipated excess inclusions in an amount sufficient to satisfy the accrued
taxes. Accordingly, all transfers of REMIC Residual Certificates that may
constitute noneconomic residual interests will be subject to certain
restrictions under the terms of the related Pooling and Servicing Agreement
that are intended to reduce the possibility of any such transfer being
disregarded. Such restrictions will require each party to a transfer to provide
an affidavit that no purpose of such transfer is to impede the assessment or
collection of tax, including certain representations as to the financial
condition of the prospective transferee, as to which the transferor is also
required to make a reasonable investigation to determine such transferee's
historic payment of its debts and ability to continue to pay its debts as they
come due in the future. Prior to purchasing a REMIC Residual Certificate,
prospective purchasers should consider the possibility that a purported
transfer of such REMIC Residual Certificate by such a purchaser to another
purchaser at some future date may be disregarded in accordance with the
above-described rules which would result in the retention of tax liability by
such purchaser.
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The related Prospectus Supplement will disclose whether offered REMIC
Residual Certificates may be considered "noneconomic" residual interests under
the REMIC Regulations; provided, however, that any disclosure that a REMIC
Residual Certificate will not be considered "noneconomic" will be based upon
certain assumptions, and the Depositor will make no representation that a REMIC
Residual Certificate will not be considered "noneconomic" for purposes of the
above-described rules. See "--Foreign Investors in REMIC Certificates--REMIC
Residual Certificates" below for additional restrictions applicable to
transfers of certain REMIC Residual Certificates to foreign persons.
Mark-to-Market Rules. On December 23, 1996, the IRS released final
regulations (the "Mark-to-Market Regulations") relating to the requirement that
a securities dealer mark to market securities held for sale to customers. This
mark-to-market requirement applies to all securities owned by a dealer, except
to the extent that the dealer has specifically identified a security as held
for investment. The Mark-to-Market Regulations provide that, for purposes of
this mark-to-market requirement, a REMIC Residual Certificate is not treated as
a security and thus may not be marked to market.
Possible Pass-Through of Miscellaneous Itemized Deductions. Fees and
expenses of a REMIC generally will be allocated to the holders of the related
REMIC Residual Certificates. The applicable Treasury regulations indicate,
however, that in the case of a REMIC that is similar to a single class grantor
trust, all or a portion of such fees and expenses should be allocated to the
holders of the related REMIC Regular Certificates. Unless otherwise stated in
the related Prospectus Supplement, such fees and expenses will be allocated to
holders of the related REMIC Residual Certificates in their entirety and not to
the holders of the related REMIC Regular Certificates.
With respect to REMIC Residual Certificates or REMIC Regular Certificates
the holders of which receive an allocation of fees and expenses in accordance
with the preceding discussion, if any holder thereof is an individual, estate
or trust, or a "pass-through entity" beneficially owned by one or more
individuals, estates or trusts, (i) an amount equal to such individual's,
estate's or trust's share of such fees and expenses will be added to the gross
income of such holder and (ii) such individual's, estate's or trust's share of
such fees and expenses will be treated as a miscellaneous itemized deduction
allowable subject to the limitation of Section 67 of the Code, which permits
such deductions only to the extent they exceed in the aggregate two percent of
a taxpayer's adjusted gross income. In addition, Section 68 of the Code
provides that the amount of itemized deductions otherwise allowable for an
individual whose adjusted gross income exceeds a specified amount will be
reduced by the lesser of (i) 3% of the excess of the individual's adjusted
gross income over such amount or (ii) 80% of the amount of itemized deductions
otherwise allowable for the taxable year. The amount of additional taxable
income reportable by REMIC Certificateholders that are subject to the
limitations of either Section 67 or Section 68 of the Code may be substantial.
Furthermore, in determining the alternative minimum taxable income of such a
holder of a REMIC Certificate that is an individual, estate or trust, or a
"pass-through entity" beneficially owned by one or more individuals, estates or
trusts, no deduction will be allowed for such holder's allocable portion of
servicing fees and other miscellaneous itemized deductions of the REMIC, even
though an amount equal to the amount of such fees and other deductions will be
included in such holder's gross income. Accordingly, such REMIC Certificates
may not be appropriate investments for individuals, estates, or trusts, or
pass-through entities beneficially owned by one or more individuals, estates or
trusts. Such prospective investors should consult with their tax advisors prior
to making an investment in such Certificates.
Sales of REMIC Certificates. If a REMIC Certificate is sold, the selling
Certificateholder will recognize gain or loss equal to the difference between
the amount realized on the sale and its adjusted basis in the REMIC
Certificate. The adjusted basis of a REMIC Regular Certificate generally will
equal the cost of such REMIC Regular Certificate to such Certificateholder,
increased by income reported by such Certificateholder with respect to such
REMIC Regular Certificate (including original issue discount and market
discount income) and reduced (but not below zero) by distributions on such
REMIC Regular Certificate received by such Certificateholder and by any
amortized premium. The adjusted basis of a REMIC Residual Certificate will be
determined as described under "--Taxation of Owners of REMIC Residual
Certificates--Basis Rules, Net Losses and Distributions". Except as provided in
the following four paragraphs, any such gain or loss will be capital gain or
loss, provided such REMIC Certificate is
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held as a capital asset (generally, property held for investment) within the
meaning of Section 1221 of the Code. The Code as of the date of this Prospectus
provides for a top marginal tax rate of 39.6% for individuals and a maximum
marginal rate for long-term capital gains of individuals of 28%. No such rate
differential exists for corporations. In addition, the distinction between a
capital gain or loss and ordinary income or loss remains relevant for other
purposes.
Gain from the sale of a REMIC Regular Certificate that might otherwise be
capital gain will be treated as ordinary income to the extent such gain does
not exceed the excess, if any, of (i) the amount that would have been
includible in the seller's income with respect to such REMIC Regular
Certificate assuming that income had accrued thereon at a rate equal to 110% of
the "applicable Federal rate" (generally, a rate based on an average of current
yields on Treasury securities having a maturity comparable to that of the
Certificate based on the application of the Prepayment Assumption to such
Certificate which rate is computed and published monthly by the IRS),
determined as of the date of purchase of such REMIC Regular Certificate, over
(ii) the amount of ordinary income actually includible in the seller's income
prior to such sale. In addition, gain recognized on the sale of a REMIC Regular
Certificate by a seller who purchased such REMIC Regular Certificate at a
market discount will be taxable as ordinary income in an amount not exceeding
the portion of such discount that accrued during the period such REMIC
Certificate was held by such holder, reduced by any market discount included in
income under the rules described above under "--Taxation of Owners of REMIC
Regular Certificates--Market Discount" and "--Premium".
REMIC Certificates will be "evidences of indebtedness" within the meaning
of Section 582(c)(1) of the Code, so that gain or loss recognized from the sale
of a REMIC Certificate by a bank or thrift institution to which such section
applies will be ordinary income or loss.
Except as may be provided in Treasury regulations yet to be issued, if the
seller of a REMIC Residual Certificate reacquires such REMIC Residual
Certificate, or acquires any other residual interest in a REMIC or any similar
interest in a "taxable mortgage pool" (as defined in Section 7701(i) of the
Code) during the period beginning six months before, and ending six months
after, the date of such sale, such sale will be subject to the "wash sale"
rules of Section 1091 of the Code. In that event, any loss realized by the
REMIC Residual Certificateholder on the sale will not be deductible, but
instead will be added to such REMIC Residual Certificateholder's adjusted basis
in the newly-acquired asset.
Prohibited Transactions Tax and Other Taxes. The Code imposes a tax on
REMICs equal to 100% of the net income derived from "prohibited transactions"
(a "Prohibited Transactions Tax"). In general, subject to certain specified
exceptions a prohibited transaction means the disposition of a Mortgage Loan,
the receipt of income from a source other than a Mortgage Loan or certain other
permitted investments, the receipt of compensation for services, or gain from
the disposition of an asset purchased with the payments on the Mortgage Loans
for temporary investment pending distribution on the REMIC Certificates. It is
not anticipated that any REMIC will engage in any prohibited transactions in
which it would recognize a material amount of net income.
In addition, certain contributions to a REMIC made after the day on which
the REMIC issues all of its interests could result in the imposition of a tax
on the REMIC equal to 100% of the value of the contributed property (a
"Contributions Tax"). Each Pooling and Servicing Agreement will include
provisions designed to prevent the acceptance of any contributions that would
be subject to such tax.
REMICs also are subject to federal income tax at the highest corporate
rate on "net income from foreclosure property", determined by reference to the
rules applicable to real estate investment trusts. "Net income from foreclosure
property" generally means gain from the sale of a foreclosure property that is
inventory property and gross income from foreclosure property other than
qualifying rents and other qualifying income for a real estate investment
trust. Unless otherwise disclosed in the related Prospectus Supplement, it is
not anticipated that any REMIC will recognize "net income from foreclosure
property" subject to federal income tax.
Unless otherwise disclosed in the related Prospectus Supplement, it is not
anticipated that any material state or local income or franchise tax will be
imposed on any REMIC.
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Unless otherwise stated in the related Prospectus Supplement, and to the
extent permitted by then applicable laws, any Prohibited Transactions Tax,
Contributions Tax, tax on "net income from foreclosure property" or state or
local income or franchise tax that may be imposed on the REMIC will be borne by
the related Master Servicer, Special Servicer, Manager or Trustee in any case
out of its own funds, provided that such person has sufficient assets to do so,
and provided further that such tax arises out of a breach of such person's
obligations under the related Pooling and Servicing Agreement and in respect of
compliance with applicable laws and regulations. Any such tax not borne by a
Master Servicer, Special Servicer, Manager or Trustee will be charged against
the related Trust Fund resulting in a reduction in amounts payable to holders
of the related REMIC Certificates.
Tax and Restrictions on Transfers of REMIC Residual Certificates to
Certain Organizations. If a REMIC Residual Certificate is transferred to a
"disqualified organization" (as defined below), a tax would be imposed in an
amount (determined under the REMIC Regulations) equal to the product of (i) the
present value (discounted using the "applicable Federal rate" for obligations
whose term ends on the close of the last quarter in which excess inclusions are
expected to accrue with respect to the REMIC Residual Certificate, which rate
is computed and published monthly by the IRS) of the total anticipated excess
inclusions with respect to such REMIC Residual Certificate for periods after
the transfer and (ii) the highest marginal federal income tax rate applicable
to corporations. The anticipated excess inclusions must be determined as of the
date that the REMIC Residual Certificate is transferred and must be based on
events that have occurred up to the time of such transfer, the Prepayment
Assumption and any required or permitted clean up calls or required liquidation
provided for in the REMIC's organizational documents. Such a tax generally
would be imposed on the transferor of the REMIC Residual Certificate, except
that where such transfer is through an agent for a disqualified organization,
the tax would instead be imposed on such agent. However, a transferor of a
REMIC Residual Certificate would in no event be liable for such tax with
respect to a transfer if the transferee furnishes to the transferor an
affidavit that the transferee is not a disqualified organization and, as of the
time of the transfer, the transferor does not have actual knowledge that such
affidavit is false. Moreover, an entity will not qualify as a REMIC unless
there are reasonable arrangements designed to ensure that (i) residual
interests in such entity are not held by disqualified organizations and (ii)
information necessary for the application of the tax described herein will be
made available. Restrictions on the transfer of REMIC Residual Certificates and
certain other provisions that are intended to meet this requirement will be
included in each Pooling and Servicing Agreement, and will be discussed in any
Prospectus Supplement relating to the offering of any REMIC Residual
Certificate.
In addition, if a "pass-through entity" (as defined below) includes in
income excess inclusions with respect to a REMIC Residual Certificate, and a
disqualified organization is the record holder of an interest in such entity,
then a tax will be imposed on such entity equal to the product of (i) the
amount of excess inclusions on the REMIC Residual Certificate that are
allocable to the interest in the pass-through entity held by such disqualified
organization and (ii) the highest marginal federal income tax rate imposed on
corporations. A pass-through entity will not be subject to this tax for any
period, however, if each record holder of an interest in such pass-through
entity furnishes to such pass-through entity (i) such holder's social security
number and a statement under penalties of perjury that such social security
number is that of the record holder or (ii) a statement under penalties of
perjury that such record holder is not a disqualified organization.
For these purposes, a "disqualified organization" means (i) the United
States, any State or political subdivision thereof, any foreign government, any
international organization, or any agency or instrumentality of the foregoing
(but would not include instrumentalities described in Section 168(h)(2)(D) of
the Code or the Federal Home Loan Mortgage Corporation), (ii) any organization
(other than a cooperative described in Section 521 of the Code) that is exempt
from federal income tax, unless it is subject to the tax imposed by Section 511
of the Code or (iii) any organization described in Section 1381(a)(2)(C) of the
Code. For these purposes, a "pass-through entity" means any regulated
investment company, real estate investment trust, trust, partnership or certain
other entities described in Section 860E(e)(6) of the Code. In addition, a
person holding an interest in a pass-through entity as a nominee for another
person will, with respect to such interest, be treated as a pass-through
entity.
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Termination. A REMIC will terminate immediately after the Distribution
Date following receipt by the REMIC of the final payment in respect of the
Mortgage Loans or upon a sale of the REMIC's assets following the adoption by
the REMIC of a plan of complete liquidation. The last distribution on a REMIC
Regular Certificate will be treated as a payment in retirement of a debt
instrument. In the case of a REMIC Residual Certificate, if the last
distribution on such REMIC Residual Certificate is less than the REMIC Residual
Certificateholder's adjusted basis in such Certificate, such REMIC Residual
Certificateholder should (but may not) be treated as realizing a loss equal to
the amount of such difference, and such loss may be treated as a capital loss.
Reporting and Other Administrative Matters. Solely for purposes of the
administrative provisions of the Code, the REMIC will be treated as a
partnership and REMIC Residual Certificateholders will be treated as partners.
Unless otherwise stated in the related Prospectus Supplement, the Trustee or
the Master Servicer, which generally will hold at least a nominal amount of
REMIC Residual Certificates, will file REMIC federal income tax returns on
behalf of the related REMIC, and will be designated as and will act as the "tax
matters person" with respect to the REMIC in all respects.
As the tax matters person, the Trustee or the Master Servicer, as the case
may be, subject to certain notice requirements and various restrictions and
limitations, generally will have the authority to act on behalf of the REMIC
and the REMIC Residual Certificateholders in connection with the administrative
and judicial review of items of income, deduction, gain or loss of the REMIC,
as well as the REMIC's classification. REMIC Residual Certificateholders
generally will be required to report such REMIC items consistently with their
treatment on the related REMIC's tax return and may in some circumstances be
bound by a settlement agreement between the Trustee or the Master Servicer, as
the case may be, as tax matters person, and the IRS concerning any such REMIC
item. Adjustments made to the REMIC tax return may require a REMIC Residual
Certificateholder to make corresponding adjustments on its return, and an audit
of the REMIC's tax return, or the adjustments resulting from such an audit,
could result in an audit of a REMIC Residual Certificateholder's return. No
REMIC will be registered as a tax shelter pursuant to Section 6111 of the Code
because it is not anticipated that any REMIC will have a net loss for any of
the first five taxable years of its existence. Any person that holds a REMIC
Residual Certificate as a nominee for another person may be required to furnish
to the related REMIC, in a manner to be provided in Treasury regulations, the
name and address of such person and other information.
Reporting of interest income, including any original issue discount, with
respect to REMIC Regular Certificates is required annually, and may be required
more frequently under Treasury regulations. These information reports generally
are required to be sent to individual holders of REMIC Regular Interests and
the IRS; holders of REMIC Regular Certificates that are corporations, trusts,
securities dealers and certain other non-individuals will be provided interest
and original issue discount income information and the information set forth in
the following paragraph upon request in accordance with the requirements of the
applicable regulations. The information must be provided by the later of 30
days after the end of the quarter for which the information was requested, or
two weeks after the receipt of the request. The REMIC must also comply with
rules requiring a REMIC Regular Certificate issued with original issue discount
to disclose on its face the amount of original issue discount and the issue
date, and requiring such information to be reported to the IRS. Reporting with
respect to REMIC Residual Certificates, including income, excess inclusions,
investment expenses and relevant information regarding qualification of the
REMIC's assets will be made as required under the Treasury regulations,
generally on a quarterly basis.
As applicable, the REMIC Regular Certificate information reports will
include a statement of the adjusted issue price of the REMIC Regular
Certificate at the beginning of each accrual period. In addition, the reports
will include information required by regulations with respect to computing the
accrual of any market discount. Because exact computation of the accrual of
market discount on a constant yield method would require information relating
to the holder's purchase price that the REMIC may not have, such regulations
only require that information pertaining to the appropriate proportionate
method of accruing market discount be provided. See "--Taxation of Owners of
REMIC Regular Certificates--Market Discount".
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Unless otherwise specified in the related Prospectus Supplement, the
responsibility for complying with the foregoing reporting rules will be borne
by either the Trustee or the Master Servicer.
Backup Withholding with Respect to REMIC Certificates. Payments of
interest and principal, as well as payments of proceeds from the sale of REMIC
Certificates, may be subject to the "backup withholding tax" under Section 3406
of the Code at a rate of 31% if recipients of such payments fail to furnish to
the payor certain information, including their taxpayer identification numbers,
or otherwise fail to establish an exemption from such tax. Any amounts deducted
and withheld from a distribution to a recipient would be allowed as a credit
against such recipient's federal income tax. Furthermore, certain penalties may
be imposed by the IRS on a recipient of payments that is required to supply
information but that does not do so in the proper manner.
Foreign Investors in REMIC Certificates. A REMIC Regular Certificateholder
that is not a "United States Person" (as defined below) and is not subject to
federal income tax as a result of any direct or indirect connection to the
United States in addition to its ownership of a REMIC Regular Certificate will
not, unless otherwise disclosed in the related Prospectus Supplement, be
subject to United States federal income or withholding tax in respect of a
distribution on a REMIC Regular Certificate, provided that the holder complies
to the extent necessary with certain identification requirements (including
delivery of a statement, signed by the Certificateholder under penalties of
perjury, certifying that such Certificateholder is not a United States Person
and providing the name and address of such Certificateholder). For these
purposes, "UNITED STATES PERSON" means a citizen or resident of the United
States, a corporation, partnership or other entity created or organized in, or
under the laws of, the United States or any political subdivision thereof, or
an estate whose income is subject to United States income tax regardless of its
source, or a trust if a court within the United States is able to exercise
primary supervision over the administration of the trust and one or more United
States fiduciaries have the authority to control all substantial decisions of
the trust. It is possible that the IRS may assert that the foregoing tax
exemption should not apply with respect to a REMIC Regular Certificate held by
a REMIC Residual Certificateholder that owns directly or indirectly a 10% or
greater interest in the REMIC Residual Certificates. If the holder does not
qualify for exemption, distributions of interest, including distributions in
respect of accrued original issue discount, to such holder may be subject to a
tax rate of 30%, subject to reduction under any applicable tax treaty.
In addition, the foregoing rules will not apply to exempt a United States
shareholder of a controlled foreign corporation from taxation on such United
States shareholder's allocable portion of the interest income received by such
controlled foreign corporation.
Further, it appears that a REMIC Regular Certificate would not be included
in the estate of a non-resident alien individual and would not be subject to
United States estate taxes. However, Certificateholders who are non-resident
alien individuals should consult their tax advisors concerning this question.
Unless otherwise stated in the related Prospectus Supplement, transfers of
REMIC Residual Certificates to investors that are not United States Persons
will be prohibited under the related Pooling and Servicing Agreement.
GRANTOR TRUST FUNDS
Classification of Grantor Trust Funds. With respect to each series of
Grantor Trust Certificates, counsel to the Depositor will deliver its opinion
to the effect that, assuming compliance with all provisions of the related
Pooling and Servicing Agreement, the related Grantor Trust Fund will be
classified as a grantor trust under subpart E, part I of subchapter J of the
Code and not as a partnership or an association taxable as a corporation.
Accordingly, each holder of a Grantor Trust Certificate generally will be
treated as the owner of an interest in the Mortgage Loans included in the
Grantor Trust Fund.
For purposes of the following discussion, a Grantor Trust Certificate
representing an undivided equitable ownership interest in the principal of the
Mortgage Loans constituting the related Grantor Trust Fund, together with
interest thereon at a pass-through rate, will be referred to as a "Grantor
Trust Fractional Interest Certificate". A Grantor Trust Certificate
representing ownership of all or a portion of the
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difference between interest paid on the Mortgage Loans constituting the related
Grantor Trust Fund (net of normal administration fees) and interest paid to the
holders of Grantor Trust Fractional Interest Certificates issued with respect
to such Grantor Trust Fund will be referred to as a "Grantor Trust Strip
Certificate". A Grantor Trust Strip Certificate may also evidence a nominal
ownership interest in the principal of the Mortgage Loans constituting the
related Grantor Trust Fund.
Taxation of Owners of Grantor Trust Fractional Interest Certificates.
General. Holders of a particular series of Grantor Trust Fractional
Interest Certificates generally will be required to report on their federal
income tax returns their shares of the entire income from the Mortgage Loans
(including amounts used to pay reasonable servicing fees and other expenses)
and will be entitled to deduct their shares of any such reasonable servicing
fees and other expenses. Because of stripped interests, market or original
issue discount, or premium, the amount includible in income on account of a
Grantor Trust Fractional Interest Certificate may differ significantly from the
amount distributable thereon representing interest on the Mortgage Loans. Under
Section 67 of the Code, an individual, estate or trust holding a Grantor Trust
Fractional Interest Certificate directly or through certain pass-through
entities will be allowed a deduction for such reasonable servicing fees and
expenses only to the extent that the aggregate of such holder's miscellaneous
itemized deductions exceeds two percent of such holder's adjusted gross income.
In addition, Section 68 of the Code provides that the amount of itemized
deductions otherwise allowable for an individual whose adjusted gross income
exceeds a specified amount will be reduced by the lesser of (i) 3% of the
excess of the individual's adjusted gross income over such amount or (ii) 80%
of the amount of itemized deductions otherwise allowable for the taxable year.
The amount of additional taxable income reportable by holders of Grantor Trust
Fractional Interest Certificates who are subject to the limitations of either
Section 67 or Section 68 of the Code may be substantial. Further,
Certificateholders (other than corporations) subject to the alternative minimum
tax may not deduct miscellaneous itemized deductions in determining such
holder's alternative minimum taxable income. Although it is not entirely clear,
it appears that in transactions in which multiple classes of Grantor Trust
Certificates (including Grantor Trust Strip Certificates) are issued, such fees
and expenses should be allocated among the classes of Grantor Trust
Certificates using a method that recognizes that each such class benefits from
the related services. In the absence of statutory or administrative
clarification as to the method to be used, it currently is intended to base
information returns or reports to the IRS and Certificateholders on a method
that allocates such expenses among classes of Grantor Trust Certificates with
respect to each period based on the distributions made to each such class
during that period.
The federal income tax treatment of Grantor Trust Fractional Interest
Certificates of any series will depend on whether they are subject to the
"stripped bond" rules of Section 1286 of the Code. Grantor Trust Fractional
Interest Certificates may be subject to those rules if (i) a class of Grantor
Trust Strip Certificates is issued as part of the same series of Certificates
or (ii) the Depositor or any of its affiliates retains (for its own account or
for purposes of resale) a right to receive a specified portion of the interest
payable on a Mortgage Asset. Further, the IRS has ruled that an unreasonably
high servicing fee retained by a seller or servicer will be treated as a
retained ownership interest in mortgages that constitutes a stripped coupon.
For purposes of determining what constitutes reasonable servicing fees for
various types of mortgages the IRS has established certain "safe harbors." The
servicing fees paid with respect to the Mortgage Loans for certain series of
Grantor Trust Certificates may be higher than the "safe harbors" and,
accordingly, may not constitute reasonable servicing compensation. The related
Prospectus Supplement will include information regarding servicing fees paid to
a Master Servicer, a Special Servicer, any Sub-Servicer or their respective
affiliates necessary to determine whether the preceding "safe harbor" rules
apply.
If Stripped Bond Rules Apply. If the stripped bond rules apply, each
Grantor Trust Fractional Interest Certificate will be treated as having been
issued with "original issue discount" within the meaning of Section 1273(a) of
the Code, subject, however, to the discussion below regarding the treatment of
certain stripped bonds as market discount bonds and the discussion regarding de
minimis market discount. See "--Taxation of Owners of Grantor Trust Fractional
Interest Certificates--Market Discount" below. Under the stripped bond rules,
the holder of a Grantor Trust Fractional Interest Certificate
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(whether a cash or accrual method taxpayer) will be required to report interest
income from its Grantor Trust Fractional Interest Certificate for each month in
an amount equal to the income that accrues on such Certificate in that month
calculated under a constant yield method, in accordance with the rules of the
Code relating to original issue discount.
The original issue discount on a Grantor Trust Fractional Interest
Certificate will be the excess of such Certificate's stated redemption price
over its issue price. The issue price of a Grantor Trust Fractional Interest
Certificate as to any purchaser will be equal to the price paid by such
purchaser of the Grantor Trust Fractional Interest Certificate. The stated
redemption price of a Grantor Trust Fractional Interest Certificate will be the
sum of all payments to be made on such Certificate, other than "qualified
stated interest", if any, as well as such Certificate's share of reasonable
servicing fees and other expenses. See "--Taxation of Owners of Grantor Trust
Fractional Interest Certificates--If Stripped Bond Rules Do Not Apply" for a
definition of "qualified stated interest". In general, the amount of such
income that accrues in any month would equal the product of such holder's
adjusted basis in such Grantor Trust Fractional Interest Certificate at the
beginning of such month (see "--Sales of Grantor Trust Certificates" below) and
the yield of such Grantor Trust Fractional Interest Certificate to such holder.
Such yield would be computed as the rate (compounded based on the regular
interval between payment dates) that, if used to discount the holder's share of
future payments on the Mortgage Loans, would cause the present value of those
future payments to equal the price at which the holder purchased such
Certificate. In computing yield under the stripped bond rules, a
Certificateholder's share of future payments on the Mortgage Loans will not
include any payments made in respect of any ownership interest in the Mortgage
Loans retained by the Depositor, a Master Servicer, a Special Servicer, any
Sub-Servicer or their respective affiliates, but will include such
Certificateholder's share of any reasonable servicing fees and other expenses.
Section 1272(a)(6) of the Code requires (i) the use of a reasonable
prepayment assumption in accruing original issue discount and (ii) adjustments
in the accrual of original issue discount when prepayments do not conform to
the prepayment assumption, with respect to certain categories of debt
instruments, and regulations could be adopted applying those provisions to the
Grantor Trust Fractional Interest Certificates. It is unclear whether those
provisions would be applicable to the Grantor Trust Fractional Interest
Certificates or whether use of a reasonable prepayment assumption may be
required or permitted without reliance on these rules. It is also uncertain, if
a prepayment assumption is used, whether the assumed prepayment rate would be
determined based on conditions at the time of the first sale of the Grantor
Trust Fractional Interest Certificate or, with respect to any holder, at the
time of purchase of the Grantor Trust Fractional Interest Certificate by that
holder. Certificateholders are advised to consult their tax advisors concerning
reporting original issue discount in general and, in particular, whether a
prepayment assumption should be used in reporting original issue discount with
respect to Grantor Trust Fractional Interest Certificates.
In the case of a Grantor Trust Fractional Interest Certificate acquired at
a price equal to the principal amount of the Mortgage Loans allocable to such
Certificate, the use of a prepayment assumption generally would not have any
significant effect on the yield used in calculating accruals of interest
income. In the case, however, of a Grantor Trust Fractional Interest
Certificate acquired at a discount or premium (that is, at a price less than or
greater than such principal amount, respectively), the use of a reasonable
prepayment assumption would increase or decrease such yield, and thus
accelerate or decelerate, respectively, the reporting of income.
If a prepayment assumption is not used, then when a Mortgage Loan prepays
in full, the holder of a Grantor Trust Fractional Interest Certificate acquired
at a discount or a premium generally will recognize ordinary income or loss
equal to the difference between the portion of the prepaid principal amount of
the Mortgage Loan that is allocable to such Certificate and the portion of the
adjusted basis of such Certificate that is allocable to such
Certificateholder's interest in the Mortgage Loan. If a prepayment assumption
is used, it appears that no separate item of income or loss should be
recognized upon a prepayment. Instead, a prepayment should be treated as a
partial payment of the stated redemption price of the Grantor Trust Fractional
Interest Certificate and accounted for under a method
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similar to that described for taking account of original issue discount on
REMIC Regular Certificates. See "--REMICs--Taxation of Owners of REMIC Regular
Certificates--Original Issue Discount". It is unclear whether any other
adjustments would be required to reflect differences between an assumed
prepayment rate and the actual rate of prepayments.
In the absence of statutory or administrative clarification, it is
currently intended to base information reports or returns to the IRS and
Certificateholders in transactions subject to the stripped bond rules on a
prepayment assumption that will be disclosed in the related Prospectus
Supplement and on a constant yield computed using a representative initial
offering price for each class of Certificates. However, neither the Depositor
nor any other person will make any representation that the Mortgage Loans will
in fact prepay at a rate conforming to such prepayment assumption or any other
rate and Certificateholders should bear in mind that the use of a
representative initial offering price will mean that such information returns
or reports, even if otherwise accepted as accurate by the IRS, will in any
event be accurate only as to the initial Certificateholders of each series who
bought at that price.
Under Treasury regulation Section 1.1286-1(b), certain stripped bonds are
to be treated as market discount bonds and, accordingly, any purchaser of such
a bond is to account for any discount on the bond as market discount rather
than original issue discount. This treatment only applies, however, if
immediately after the most recent disposition of the bond by a person stripping
one or more coupons from the bond and disposing of the bond or coupon (i) there
is no original issue discount (or only a de minimis amount of original issue
discount) or (ii) the annual stated rate of interest payable on the original
bond is no more than one percentage point lower than the gross interest rate
payable on the original mortgage loan (before subtracting any servicing fee or
any stripped coupon). If interest payable on a Grantor Trust Fractional
Interest Certificate is more than one percentage point lower than the gross
interest rate payable on the Mortgage Loans, the related Prospectus Supplement
will disclose that fact. If the original issue discount or market discount on a
Grantor Trust Fractional Interest Certificate determined under the stripped
bond rules is less than 0.25% of the stated redemption price multiplied by the
weighted average maturity of the Mortgage Loans, then such original issue
discount or market discount will be considered to be de minimis. Original issue
discount or market discount of only a de minimis amount will be included in
income in the same manner as de minimis original issue and market discount
described in "--Taxation of Owners of Grantor Trust Fractional Interest
Certificates--If Stripped Bond Rules Do Not Apply" and "--Market Discount"
below.
If Stripped Bond Rules Do Not Apply. Subject to the discussion below on
original issue discount, if the stripped bond rules do not apply to a Grantor
Trust Fractional Interest Certificate, the Certificateholder will be required
to report its share of the interest income on the Mortgage Loans in accordance
with such Certificateholder's normal method of accounting. The original issue
discount rules will apply, even if the stripped bond rules do not apply, to a
Grantor Trust Fractional Interest Certificate to the extent it evidences an
interest in Mortgage Loans issued with original issue discount.
The original issue discount, if any, on the Mortgage Loans will equal the
difference between the stated redemption price of such Mortgage Loans and their
issue price. For a definition of "stated redemption price," see "--Taxation of
Owners of REMIC Regular Certificates--Original Issue Discount" above. In
general, the issue price of a Mortgage Loan will be the amount received by the
borrower from the lender under the terms of the Mortgage Loan, less any
"points" paid by the borrower, and the stated redemption price of a Mortgage
Loan will equal its principal amount, unless the Mortgage Loan provides for an
initial "teaser," or below-market interest rate. The determination as to
whether original issue discount will be considered to be de minimis will be
calculated using the same test as in the REMIC discussion. See "--Taxation of
Owners of REMIC Regular Certificates--Original Issue Discount" above.
In the case of Mortgage Loans bearing adjustable or variable interest
rates, the related Prospectus Supplement will describe the manner in which such
rules will be applied with respect to those Mortgage Loans by the Trustee or
Master Servicer, as applicable, in preparing information returns to the
Certificateholders and the IRS.
If original issue discount is in excess of a de minimis amount, all
original issue discount with respect to a Mortgage Loan will be required to be
accrued and reported in income each month, based on a
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constant yield. The OID Regulations suggest that no prepayment assumption is
appropriate in computing the yield on prepayable obligations issued with
original issue discount. In the absence of statutory or administrative
clarification, it currently is not intended to base information reports or
returns to the IRS and Certificateholders on the use of a prepayment assumption
in transactions not subject to the stripped bond rules. However, Section
1272(a)(6) of the Code may require that a prepayment assumption be made in
computing yield with respect to all mortgage-backed securities.
Certificateholders are advised to consult their own tax advisors concerning
whether a prepayment assumption should be used in reporting original issue
discount with respect to Grantor Trust Fractional Interest Certificates.
Certificateholders should refer to the related Prospectus Supplement with
respect to each series to determine whether and in what manner the original
issue discount rules will apply to Mortgage Loans in such series.
A purchaser of a Grantor Trust Fractional Interest Certificate that
purchases such Grantor Trust Fractional Interest Certificate at a cost less
than such Certificate's allocable portion of the aggregate remaining stated
redemption price of the Mortgage Loans held in the related Trust Fund will also
be required to include in gross income such Certificate's daily portions of any
original issue discount with respect to such Mortgage Loans. However, each such
daily portion will be reduced, if the cost of such Grantor Trust Fractional
Interest Certificate to such purchaser is in excess of such Certificate's
allocable portion of the aggregate "adjusted issue prices" of the Mortgage
Loans held in the related Trust Fund, approximately in proportion to the ratio
such excess bears to such Certificate's allocable portion of the aggregate
original issue discount remaining to be accrued on such Mortgage Loans. The
adjusted issue price of a Mortgage Loan on any given day equals the sum of (i)
the adjusted issue price (or, in the case of the first accrual period, the
issue price) of such Mortgage Loan at the beginning of the accrual period that
includes such day and (ii) the daily portions of original issue discount for
all days during such accrual period prior to such day. The adjusted issue price
of a Mortgage Loan at the beginning of any accrual period will equal the issue
price of such Mortgage Loan, increased by the aggregate amount of original
issue discount with respect to such Mortgage Loan that accrued in prior accrual
periods, and reduced by the amount of any payments made on such Mortgage Loan
in prior accrual periods of amounts included in its stated redemption price.
Unless otherwise provided in the related Prospectus Supplement, the
Trustee or Master Servicer, as applicable, will provide to any holder of a
Grantor Trust Fractional Interest Certificate such information as such holder
may reasonably request from time to time with respect to original issue
discount accruing on Grantor Trust Fractional Interest Certificates. See
"--Grantor Trust Reporting" below.
Market Discount. If the stripped bond rules do not apply to a Grantor
Trust Fractional Interest Certificate, a Certificateholder may be subject to
the market discount rules of Sections 1276 through 1278 of the Code to the
extent an interest in a Mortgage Loan is considered to have been purchased at a
"market discount", that is, in the case of a Mortgage Loan issued without
original issue discount, at a purchase price less than its remaining stated
redemption price (as defined above), or in the case of a Mortgage Loan issued
with original issue discount, at a purchase price less than its adjusted issue
price (as defined above). If market discount is in excess of a de minimis
amount (as described below), the holder generally will be required to include
in income in each month the amount of such discount that has accrued (under the
rules described in the next paragraph) through such month that has not
previously been included in income, but limited, in the case of the portion of
such discount that is allocable to any Mortgage Loan, to the payment of stated
redemption price on such Mortgage Loan that is received by (or, in the case of
accrual basis Certificateholders, due to) the Trust Fund in that month. A
Certificateholder may elect to include market discount in income currently as
it accrues (under a constant yield method based on the yield of the Certificate
to such holder) rather than including it on a deferred basis in accordance with
the foregoing under rules similar to those described in "--Taxation of Owners
of REMIC Regular Interests--Market Discount" above.
Section 1276(b)(3) of the Code authorized the Treasury Department to issue
regulations providing for the method for accruing market discount on debt
instruments, the principal of which is payable in more than one installment.
Until such time as regulations are issued by the Treasury Department, certain
rules described in the Committee Report apply. Under those rules, in each
accrual period market discount on the Mortgage Loans should accrue, at the
holder's option: (i) on the basis of a constant yield
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method, (ii) in the case of a Mortgage Loan issued without original issue
discount, in an amount that bears the same ratio to the total remaining market
discount as the stated interest paid in the accrual period bears to the total
stated interest remaining to be paid on the Mortgage Loan as of the beginning
of the accrual period, or (iii) in the case of a Mortgage Loan issued with
original issue discount, in an amount that bears the same ratio to the total
remaining market discount as the original issue discount accrued in the accrual
period bears to the total original issue discount remaining at the beginning of
the accrual period. The prepayment assumption, if any, used in calculating the
accrual of original issue discount is to be used in calculating the accrual of
market discount. The effect of using a prepayment assumption could be to
accelerate the reporting of such discount income. Because the regulations
referred to in this paragraph have not been issued, it is not possible to
predict what effect such regulations might have on the tax treatment of a
Mortgage Loan purchased at a discount in the secondary market.
Because the Mortgage Loans will provide for periodic payments of stated
redemption price, such discount may be required to be included in income at a
rate that is not significantly slower than the rate at which such discount
would be included in income if it were original issue discount.
Market discount with respect to Mortgage Loans may be considered to be de
minimis and, if so, will be includible in income under de minimis rules similar
to those described in "--REMICs--Taxation of Owners of REMIC Regular
Certificates--Original Issue Discount" above within the exception that it is
less likely that a prepayment assumption will be used for purposes of such
rules with respect to the Mortgage Loans.
Further, under the rules described in "--REMICs--Taxation of Owners of
REMIC Regular Certificates--Market Discount", any discount that is not original
issue discount and exceeds a de minimis amount may require the deferral of
interest expense deductions attributable to accrued market discount not yet
includible in income, unless an election has been made to report market
discount currently as it accrues.
Premium. If a Certificateholder is treated as acquiring the underlying
Mortgage Loans at a premium, that is, at a price in excess of their remaining
stated redemption price, such Certificateholder may elect under Section 171 of
the Code to amortize using a constant yield method the portion of such premium
allocable to Mortgage Loans originated after September 27, 1985. Amortizable
premium is treated as an offset to interest income on the related debt
instrument, rather than as a separate interest deduction. However, premium
allocable to Mortgage Loans originated before September 28, 1985 or to Mortgage
Loans for which an amortization election is not made, should be allocated among
the payments of stated redemption price on the Mortgage Loan and be allowed as
a deduction as such payments are made (or, for a Certificateholder using the
accrual method of accounting, when such payments of stated redemption price are
due).
It is unclear whether a prepayment assumption should be used in computing
amortization of premium allowable under Section 171 of the Code. If premium is
not subject to amortization using a prepayment assumption and a Mortgage Loan
prepays in full, the holder of a Grantor Trust Fractional Interest Certificate
acquired at a premium should recognize a loss equal to the difference between
the portion of the prepaid principal amount of the Mortgage Loan that is
allocable to the Certificate and the portion of the adjusted basis of the
Certificate that is allocable to the Mortgage Loan. If a prepayment assumption
is used to amortize such premium, it appears that such a loss would be
unavailable. Instead, if a prepayment assumption is used, a prepayment should
be treated as a partial payment of the stated redemption price of the Grantor
Trust Fractional Interest Certificate and accounted for under a method similar
to that described for taking account of original issue discount on REMIC
Regular Certificates. See "--REMICs--Taxation of Owners of REMIC Regular
Certificates--Original Issue Discount". It is unclear whether any other
adjustments would be required to reflect differences between the prepayment
assumption and the actual rate of prepayments.
Taxation of Owners of Grantor Trust Strip Certificates. The "stripped
coupon" rules of Section 1286 of the Code will apply to the Grantor Trust Strip
Certificates. Except as described above in "--Taxation of Owners of Grantor
Trust Fractional Interest Certificates--If Stripped Bond Rules Apply", no
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regulations or published rulings under Section 1286 of the Code have been
issued and some uncertainty exists as to how it will be applied to securities
such as the Grantor Trust Strip Certificates. Accordingly, holders of Grantor
Trust Strip Certificates should consult their tax advisors concerning the
method to be used in reporting income or loss with respect to such
Certificates.
The OID Regulations do not apply to "stripped coupons", although they
provide general guidance as to how the original issue discount sections of the
Code will be applied. In addition, the discussion below is subject to the
discussion under "--Possible Application of Proposed Contingent Payment Rules"
below and assumes that the holder of a Grantor Trust Strip Certificate will not
own any Grantor Trust Fractional Interest Certificates.
Under the stripped coupon rules, it appears that original issue discount
will be required to be accrued in each month on the Grantor Trust Strip
Certificates based on a constant yield method. In effect, each holder of
Grantor Trust Strip Certificates would include as interest income in each month
an amount equal to the product of such holder's adjusted basis in such Grantor
Trust Strip Certificate at the beginning of such month and the yield of such
Grantor Trust Strip Certificate to such holder. Such yield would be calculated
based on the price paid for that Grantor Trust Strip Certificate by its holder
and the payments remaining to be made thereon at the time of the purchase, plus
an allocable portion of the servicing fees and expenses to be paid with respect
to the Mortgage Loans. See "--Taxation of Owners of Grantor Trust Fractional
Interest Certificates--If Stripped Bond Rules Apply" above.
As noted above, Section 1272(a)(6) of the Code requires that a prepayment
assumption be used in computing the accrual of original issue discount with
respect to certain categories of debt instruments, and that adjustments be made
in the amount and rate of accrual of such discount when prepayments do not
conform to such prepayment assumption. Regulations could be adopted applying
those provisions to the Grantor Trust Strip Certificates. It is unclear whether
those provisions would be applicable to the Grantor Trust Strip Certificates or
whether use of a prepayment assumption may be required or permitted in the
absence of such regulations. It is also uncertain, if a prepayment assumption
is used, whether the assumed prepayment rate would be determined based on
conditions at the time of the first sale of the Grantor Trust Strip Certificate
or, with respect to any subsequent holder, at the time of purchase of the
Grantor Trust Strip Certificate by that holder.
The accrual of income on the Grantor Trust Strip Certificates will be
significantly slower if a prepayment assumption is permitted to be made than if
yield is computed assuming no prepayments. In the absence of statutory or
administrative clarification, it currently is intended to base information
returns or reports to the IRS and Certificateholders on the Prepayment
Assumption disclosed in the related Prospectus Supplement and on a constant
yield computed using a representative initial offering price for each class of
Certificates. However, neither the Depositor nor any other person will make any
representation that the Mortgage Loans will in fact prepay at a rate conforming
to the Prepayment Assumption or at any other rate and Certificateholders should
bear in mind that the use of a representative initial offering price will mean
that such information returns or reports, even if otherwise accepted as
accurate by the IRS, will in any event be accurate only as to the initial
Certificateholders of each series who bought at that price. Prospective
purchasers of the Grantor Trust Strip Certificates should consult their tax
advisors regarding the use of the Prepayment Assumption.
It is unclear under what circumstances, if any, the prepayment of a
Mortgage Loan will give rise to a loss to the holder of a Grantor Trust Strip
Certificate. If a Grantor Trust Strip Certificate is treated as a single
instrument (rather than an interest in discrete mortgage loans) and the effect
of prepayments is taken into account in computing yield with respect to such
Grantor Trust Strip Certificate, it appears that no loss may be available as a
result of any particular prepayment unless prepayments occur at a rate faster
than the Prepayment Assumption. However, if a Grantor Trust Strip Certificate
is treated as an interest in discrete Mortgage Loans, or if the Prepayment
Assumption is not used, then when a Mortgage Loan is prepaid, the holder of a
Grantor Trust Strip Certificate should be able to recognize a loss equal to the
portion of the adjusted issue price of the Grantor Trust Strip Certificate that
is allocable to such Mortgage Loan.
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Possible Application of Proposed Contingent Payment Rules. The coupon
stripping rules' general treatment of stripped coupons is to regard them as
newly issued debt instruments in the hands of each purchaser. To the extent
that payments on the Grantor Trust Strip Certificates would cease if the
Mortgage Loans were prepaid in full, the Grantor Trust Strip Certificates could
be considered to be debt instruments providing for contingent payments. Under
the OID Regulations, debt instruments providing for contingent payments are not
subject to the same rules as debt instruments providing for noncontingent
payments. Treasury regulations were promulgated on June 11, 1996 regarding
contingent payment debt instruments, but it appears that the Grantor Trust
Strip Certificates, due to their similarity to other mortgage-backed securities
(such as REMIC regular interests) that are expressly exempted from the
application of such proposed regulations, may be excepted from such proposed
regulations. Like the OID Regulations, such proposed regulations do not
specifically address securities, such as the Grantor Trust Strip Certificates,
that are subject to the stripped bond rules of Section 1286 of the Code.
If the contingent payment rules under the proposed regulations were to
apply, the holder of a Grantor Trust Strip Certificate would be required to
apply the "noncontingent bond method." Under the "noncontingent bond method,"
the issuer of a Grantor Trust Strip Certificate determines a projected payment
schedule on which interest will accrue. Holders of Grantor Trust Strip
Certificates are bound by the issuer's projected payment schedule. The
projected payment schedule consists of all noncontingent payments and a
projected amount for each contingent payment based on the "comparable yield"
(as described below) of the Grantor Trust Strip Certificate. The projected
amount of each payment is determined so that the payment schedule reflects the
"comparable yield. The projected amount of each payment must reasonably reflect
the relative expected values of the payments to be received by the holders of a
Grantor Trust Strip Certificate in the manner prescribed by the regulations.
The "comparable yield" referred to above is generally the yield at which the
issuer would issue a fixed rate debt instrument with terms and conditions
similar to those of the Grantor Trust Strip Certificates, including the level
of subordination, term, timing of payments and general market conditions. The
holder of a Grantor Trust Strip Certificate would be required to include as
interest income in each month the adjusted issue price of the Grantor Trust
Strip Certificate at the beginning of the period multiplied by the projected
yield.
Assuming that a prepayment assumption were used, if the proposed
regulations or their principles were applied to Grantor Trust Strip
Certificates, the amount of income reported with respect thereto would be
substantially similar to that described under "Taxation of Owners of Grantor
Trust Strip Certificates."
Certificateholders should consult their tax advisors concerning the
possible application of the contingent payment rules to the Grantor Trust Strip
Certificates.
Sales of Grantor Trust Certificates. Any gain or loss, equal to the
difference between the amount realized on the sale or exchange of a Grantor
Trust Certificate and its adjusted basis, recognized on such sale or exchange
of a Grantor Trust Certificate by an investor who holds such Grantor Trust
Certificate as a capital asset, will be capital gain or loss, except to the
extent of accrued and unrecognized market discount, which will be treated as
ordinary income, and (in the case of banks and other financial institutions)
except as provided under Section 582(c) of the Code. The adjusted basis of a
Grantor Trust Certificate generally will equal its cost, increased by any
income reported by the seller (including original issue discount and market
discount income) and reduced (but not below zero) by any previously reported
losses, any amortized premium and by any distributions with respect to such
Grantor Trust Certificate. The Code as of the date of this Prospectus provides
a top marginal tax rate of 39.6% for individuals and a maximum marginal rate
for long-term capital gains of individuals of 28%. No such rate differential
exists for corporations. In addition, the distinction between a capital gain or
loss and ordinary income or loss remains relevant for other purposes.
Gain or loss from the sale of a Grantor Trust Certificate may be partially
or wholly ordinary and not capital in certain circumstances. Gain attributable
to accrued and unrecognized market discount will be treated as ordinary income,
as will gain or loss recognized by banks and other financial institutions
subject to Section 582(c) of the Code. Furthermore, a portion of any gain that
might otherwise be capital gain may be treated as ordinary income to the extent
that the Grantor Trust Certificate is held as part of
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a "conversion transaction" within the meaning of Section 1258 of the Code. A
conversion transaction generally is one in which the taxpayer has taken two or
more positions in the same or similar property that reduce or eliminate market
risk, if substantially all of the taxpayer's return is attributable to the time
value of the taxpayer's net investment in such transaction. The amount of gain
realized in a conversion transaction that is recharacterized as ordinary income
generally will not exceed the amount of interest that would have accrued on the
taxpayer's net investment at 120% of the appropriate "applicable Federal rate"
(which rate is computed and published monthly by the IRS) at the time the
taxpayer enters into the conversion transaction, subject to appropriate
reduction for prior inclusion of interest and other ordinary income items from
the transaction.
Finally, a taxpayer may elect to have net capital gain taxed at ordinary
income rates rather than capital gains rates in order to include such net
capital gain in total net investment income for that taxable year, for purposes
of the rule that limits the deduction of interest on indebtedness incurred to
purchase or carry property held for investment to a taxpayer's net investment
income.
Grantor Trust Reporting. Unless otherwise provided in the related
Prospectus Supplement, the Trustee or Master Servicer, as applicable, will
furnish to each holder of a Grantor Trust Certificate with each distribution a
statement setting forth the amount of such distribution allocable to principal
on the underlying Mortgage Loans and to interest thereon at the related
Pass-Through Rate. In addition, the Trustee or Master Servicer, as applicable,
will furnish, within a reasonable time after the end of each calendar year, to
each holder of a Grantor Trust Certificate who was such a holder at any time
during such year, information regarding the amount of servicing compensation
received by the Master Servicer, the Special Servicer or any Sub-Servicer, and
such other customary factual information as the Depositor or the reporting
party deems necessary or desirable to enable holders of Grantor Trust
Certificates to prepare their tax returns and will furnish comparable
information to the IRS as and when required by law to do so. Because the rules
for accruing discount and amortizing premium with respect to the Grantor Trust
Certificates are uncertain in various respects, there is no assurance the IRS
will agree with the Trustee's or Master Servicer's, as the case may be,
information reports of such items of income and expense. Moreover, such
information reports, even if otherwise accepted as accurate by the IRS, will in
any event be accurate only as to the initial Certificateholders that bought
their Certificates at the representative initial offering price used in
preparing such reports.
Backup Withholding. In general, the rules described in "--REMICs--Backup
Withholding with Respect to REMIC Certificates" will also apply to Grantor
Trust Certificates.
Foreign Investors. In general, the discussion with respect to REMIC
Regular Certificates in "--REMICs--Foreign Investors in REMIC Certificates"
applies to Grantor Trust Certificates except that Grantor Trust Certificates
will, unless otherwise disclosed in the related Prospectus Supplement, be
eligible for exemption from U.S. withholding tax, subject to the conditions
described in such discussion, only to the extent the related Mortgage Loans
were originated after July 18, 1984.
To the extent that interest on a Grantor Trust Certificate would be exempt
under Sections 871(h)(1) and 881(c) of the Code from United States withholding
tax, and the Grantor Trust Certificate is not held in connection with a
Certificateholder's trade or business in the United States, such Grantor Trust
Certificate will not be subject to United States estate taxes in the estate of
a non-resident alien individual.
STATE AND OTHER TAX CONSEQUENCES
In addition to the federal income tax consequences described in "Certain
Federal Income Tax Consequences," potential investors should consider the state
and local tax consequences of the acquisition, ownership, and disposition of
the Offered Certificates. State tax law may differ substantially from the
corresponding federal law, and the discussion above does not purport to
describe any aspect of the income tax laws of any state or other jurisdiction.
Therefore, potential investors should consult their tax advisors with respect
to the various tax consequences of investments in the Offered Certificates.
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ERISA CONSIDERATIONS
GENERAL
ERISA and the Code impose certain requirements on employee benefit plans
and on certain other retirement plans and arrangements, including individual
retirement accounts and annuities, Keogh plans and collective investment funds
and separate accounts (and, as applicable, insurance company general accounts)
in which such plans, accounts or arrangements are invested that are subject to
the fiduciary responsibility provisions of ERISA and/or Section 4975 of the
Code ("Plans") and on persons who are fiduciaries with respect to such Plans in
connection with the investment of Plan assets. Certain employee benefit plans,
such as governmental plans (as defined in ERISA Section 3(32)), and, if no
election has been made under Section 410(d) of the Code, church plans (as
defined in Section 3(33) of ERISA) are not subject to ERISA requirements.
Accordingly, assets of such plans may be invested in Offered Certificates
without regard to the ERISA considerations described below, subject to the
provisions of other applicable federal and state law. Any such plan which is
qualified and exempt from taxation under Sections 401(a) and 501(a) of the
Code, however, is subject to the prohibited transaction rules set forth in
Section 503 of the Code.
ERISA generally imposes on Plan fiduciaries certain general fiduciary
requirements, including those of investment prudence and diversification and
the requirement that a Plan's investments be made in accordance with the
documents governing the Plan. In addition, Section 406 of ERISA and Section
4975 of the Code prohibit a broad range of transactions involving assets of a
Plan and persons ("Parties in Interest") who have certain specified
relationships to the Plan, unless a statutory or administrative exemption is
available. Unless an exemption is available, a Plan's purchase or holding of a
Certificate may constitute or result in a prohibited transaction if any of the
Depositor, the Trustee, the Master Servicer, the Manager, the Special Servicer
or a Sub-Servicer is a Party in Interest with respect to that Plan. Certain
Parties in Interest that participate in a prohibited transaction may be subject
to an excise tax imposed pursuant to Section 4975 of the Code or a penalty
imposed pursuant to Section 502(i) of ERISA, unless a statutory or
administrative exemption is available. These prohibited transactions generally
are set forth in Section 406 of ERISA and Section 4975 of the Code.
PLAN ASSET REGULATIONS
A Plan's investment in Offered Certificates may cause the underlying
Mortgage Loans, MBS and other assets included in a related Trust Fund to be
deemed assets of such Plan. A regulation of the United States Department of
Labor ("DOL") at 29 C.F.R. Section 2510.3-101 provides that when a Plan
acquires an equity interest in an entity, the Plan's assets include both such
equity interest and an undivided interest in each of the underlying assets of
the entity, unless certain exceptions not applicable here apply, or unless the
equity participation in the entity by "benefit plan investors" (i.e., Plans and
certain employee benefit plans not subject to ERISA) is not "significant," both
as defined therein. Equity participation in a Trust Fund will be significant on
any date if immediately after the most recent acquisition of any Certificate,
25% or more of any class of Certificates is held by benefit plan investors.
Any person who has discretionary authority or control respecting the
management or disposition of Plan assets, and any person who provides
investment advice with respect to such assets for a fee, is a fiduciary of the
investing Plan. If the Mortgage Loans, MBS and other assets included in a Trust
Fund constitute Plan assets, then any party exercising management or
discretionary control regarding those assets, such as the Master Servicer, the
Special Servicer, any Sub-Servicer, the Manager, the Trustee, the obligor under
any credit enhancement mechanism, or certain affiliates thereof may be deemed
to be a Plan "fiduciary" and thus subject to the fiduciary responsibility
provisions of ERISA and the prohibited transaction provisions of ERISA and
Section 4975 of the Code with respect to the investing Plan. In addition, if
the Mortgage Loans, MBS and other assets included in a Trust Fund constitute
Plan assets, the purchase of Certificates by, on behalf of or with assets of a
Plan, as well as the operation of the Trust Fund, may constitute or involve a
prohibited transaction under ERISA or the Code.
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PROHIBITED TRANSACTION EXEMPTION
On March 29, 1994, the DOL issued an individual exemption (the
"Exemption"), to certain of the Depositor's affiliates, which generally exempts
from the application of the prohibited transaction provisions of Section 406 of
ERISA, and the excise taxes imposed on such prohibited transactions pursuant to
Sections 4975(a) and (b) of the Code, certain transactions, among others,
relating to the servicing and operation of mortgage pools and the purchase,
sale and holding of mortgage pass-through certificates issued by a trust as to
which (i) the Depositor is the sponsor if any entity which has received from
the DOL an individual prohibited transaction exemption which is similar to the
Exemption is the sole underwriter, or manager or co-manager of the underwriting
syndicate or a seller or placement agent, or (ii) the Depositor or an affiliate
is the Underwriter (as hereinafter defined), provided that certain conditions
set forth in the Exemption are satisfied. For purposes of this Section "ERISA
Considerations," the term "Underwriter" shall include (a) the Depositor and
certain of its affiliates, (b) any person directly or indirectly, through one
or more intermediaries, controlling, controlled by or under common control with
the Depositor and certain of its affiliates, (c) any member of the underwriting
syndicate or selling group of which a person described in (a) or (b) is a
manager or co-manager with respect to a class of Certificates, or (d) any
entity which has received an exemption from the DOL relating to Certificates
which is similar to the Exemption.
The Exemption sets forth six general conditions which must be satisfied
for a transaction involving the purchase, sale and holding of Offered
Certificates to be eligible for exemptive relief thereunder. First, the
acquisition of Offered Certificates by or with assets of a Plan must be on
terms that are at least as favorable to the Plan as they would be in an
arm's-length transaction with an unrelated party. Second, the Exemption only
applies to Offered Certificates evidencing rights and interests that are not
subordinated to the rights and interests evidenced by the other Certificates of
the same trust. Third, the Offered Certificates at the time of acquisition by
or with assets of a Plan must be rated in one of the three highest generic
rating categories by Standard & Poor's Ratings Services, Moody's Investors
Service, Inc., Duff & Phelps or Fitch Investors Service, L.P. Fourth, the
Trustee cannot be an affiliate of any member of the "Restricted Group" which
consists of any Underwriter, the Depositor, the Master Servicer, any Special
Servicer, any Sub-Servicer, any obligor under any credit enhancement mechanism,
any Manager and any mortgagor with respect to Trust Assets constituting more
than 5% of the aggregate unamortized principal balance of the Trust Assets in
the related Trust Fund as of the date of initial issuance of the Certificates.
Fifth, the sum of all payments made to and retained by the Underwriters must
represent not more than reasonable compensation for underwriting the
Certificates; the sum of all payments made to and retained by the Depositor
pursuant to the assignment of the Trust Assets to the related Trust Fund must
represent not more than the fair market value of such obligations; and the sum
of all payments made to and retained by the Master Servicer, any Special
Servicer, any Sub-Servicer and any Manager must represent not more than
reasonable compensation for such person's services under the related Pooling
and Servicing Agreement and reimbursement of such person's reasonable expenses
in connection therewith. Sixth, the Exemption states that the investing Plan or
Plan asset investor must be an accredited investor as defined in Rule 501(a)(1)
of Regulation D of the Securities and Exchange Commission under the Securities
Act of 1933, as amended.
The Exemption also requires that each Trust Fund meet the following
requirements: (i) the Trust Fund must consist solely of assets of the type that
have been included in other investment pools; (ii) certificates in such other
investment pools must have been rated in one of the three highest categories of
one of the rating agencies specified above for at least one year prior to the
acquisition of Certificates by or with assets of a Plan; and (iii) certificates
in such other investment pools must have been purchased by investors other than
Plans for at least one year prior to any acquisition of Certificates by or with
assets of a Plan.
It is not clear whether certain Certificates that may be offered hereunder
would constitute "certificates" for purposes of the Exemption, including but
not limited to, (i) Certificates evidencing an interest in certificates insured
or guaranteed by FAMC, (ii) Certificates evidencing an interest in Mortgage
Loans secured by liens on real estate projects under construction, (iii)
Certificates evidencing an interest in a Trust Fund including equity
participations, (iv) Certificates evidencing an interest in a Trust Fund
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including Cash Flow Agreements, or (v) subordinated Classes of Certificates
(collectively, "Non-Exempt Certificates"). In promulgating the Exemption, the
DOL did not have under consideration interests in pools of the exact nature
described in this paragraph and accordingly, unless otherwise provided in the
related Prospectus Supplement, Plans and persons investing assets of Plans
should not purchase Non-Exempt Certificates based solely upon the Exemption.
A fiduciary or other investor of Plan assets contemplating purchasing an
Offered Certificate must make its own determination that the general conditions
set forth above will be satisfied with respect to such Certificate.
If the general conditions of the Exemption are satisfied, the Exemption
may provide an exemption from the restrictions imposed by Sections 406(a) and
407 of ERISA, and the excise taxes imposed by Sections 4975(a) and (b) of the
Code by reason of Sections 4975(c)(1)(A) through (D) of the Code, in connection
with the direct or indirect sale, exchange, transfer, holding or the direct or
indirect acquisition or disposition in the secondary market of Offered
Certificates by or with assets of a Plan. However, no exemption is provided
from the restrictions of Sections 406(a)(1)(E) and 406(a)(2) of ERISA for the
acquisition or holding of an Offered Certificate on behalf of an "Excluded
Plan" by any person who has discretionary authority or renders investment
advice with respect to assets of such Excluded Plan. For purposes of the
Certificates, an Excluded Plan is a Plan sponsored by any member of the
Restricted Group.
If certain specific conditions of the Exemption are also satisfied, the
Exemption may provide an exemption from the restrictions imposed by Sections
406(b)(1) and (b)(2) of ERISA, and the taxes imposed by Sections 4975(a) and
(b) of the Code by reason of Section 4975(c)(1)(E) of the Code, in connection
with (1) the direct or indirect sale, exchange or transfer of Certificates in
the initial issuance of Certificates between the Depositor or an Underwriter
and a Plan when the person who has discretionary authority or renders
investment advice with respect to the investment of the relevant Plan assets in
the Certificates is (a) a mortgagor with respect to 5% or less of the fair
market value of the Trust Assets or (b) an affiliate of such a person, (2) the
direct or indirect acquisition or disposition in the secondary market of
Certificates by or with assets of a Plan and (3) the holding of Certificates by
or with assets of a Plan.
Further, if certain specific conditions of the Exemption are satisfied,
the Exemption may provide an exemption from the restrictions imposed by
Sections 406(a), 406(b) and 407 of ERISA, and the taxes imposed by Sections
4975(a) and (b) of the Code by reason of Section 4975(c) of the Code, for
transactions in connection with the servicing, management and operation of the
pools of Mortgage Assets. The Depositor expects that the specific conditions of
the Exemption required for this purpose will be satisfied with respect to the
Certificates so that the Exemption would provide an exemption from the
restrictions imposed by Sections 406(a) and (b) of ERISA, the excise taxes
imposed by Sections 4975(a) and (b) of the Code by reason of Section 4975(c) of
the Code), for transactions in connection with the servicing, management and
operation of the pools of Mortgage Assets, provided that the general conditions
of the Exemption are satisfied.
The Exemption also may provide an exemption from the restrictions imposed
by Sections 406(a) and 407(a) of ERISA, and the taxes imposed by Sections
4975(a) and (b) of the Code by reason of Sections 4975(c)(1)(A) through (D) of
the Code, if such restrictions are deemed to otherwise apply merely because a
person is deemed to be a "party in interest" (within the meaning of Section
3(14) of ERISA) or a "disqualified person" (within the meaning of Section
4975(e)(2) of the Code) with respect to an investing Plan by virtue of
providing services to the Plan (or by virtue of having certain specified
relationships to such a person) solely as a result of the Plan's ownership of
Certificates.
Before purchasing an Offered Certificate, a fiduciary or other investor of
Plan assets should itself confirm (a) that the Certificates constitute
"certificates" for purposes of the Exemption and (b) that the specific and
general conditions set forth in the Exemption and the other requirements set
forth in the Exemption would be satisfied. In addition to making its own
determination as to the availability of the exemptive relief provided in the
Exemption, the fiduciary or other Plan investor should consider its general
fiduciary obligations under ERISA in determining whether to purchase any
Offered Certificates
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with assets of a Plan. Such fiduciary or other Plan investor should consider
the availability of other class exemptions granted by the DOL, which provide
relief from certain of the prohibited transaction provisions of ERISA and the
related excise tax provisions of Section 4975 of the Code, including Sections I
and III of Prohibited Transaction Class Exemption ("PTCE") 95-60, regarding
transactions by insurance company general accounts. The Prospectus Supplement
with respect to a series of Certificates may contain additional information
regarding the application of the Exemption, PTCE 95-60 or any other DOL
exemption, with respect to the Certificates offered thereby.
Any fiduciary or other Plan investor that proposes to purchase Offered
Certificates on behalf of or with assets of a Plan should consult with its
counsel with respect to the potential applicability of ERISA and the Code to
such investment and the availability of the Exemption or any other prohibited
transaction exemption in connection therewith. There can be no assurance that
any of these exemptions will apply with respect to any particular Plan's or
other Plan asset investor's investment in the Certificates or, even if an
exemption were deemed to apply, that any exemption would apply to all
prohibited transactions that may occur in connection with such an investment.
INSURANCE COMPANY GENERAL ACCOUNTS
In addition to any exemption that may be available under PTCE 95-60 for
the purchase and holding of the Certificates by an insurance company general
account, the Small Business Job Protection Act of 1996 added a new Section
401(c) to ERISA, which provides certain exemptive relief from the provisions of
Part 4 of Title I of ERISA and Section 4975 of the Code, including the
prohibited transaction restrictions imposed by ERISA and the related excise
taxes imposed by Section 4975 of the Code, for transactions involving an
insurance company general account. Pursuant to Section 401(c) of ERISA, the DOL
is required to issue final regulations (the "401(c) Regulations") no later than
December 31, 1997 which are to provide guidance for the purpose of determining,
in cases where insurance policies and annuity contracts supported by an
insurer's general account are issued to or for the benefit of a Plan on or
before December 31, 1998, which general account assets constitute Plan assets.
Section 401(c) of ERISA generally provides that, until the date which is 18
months after the 401(c) Regulations become final, no person shall be subject to
liability under Part 4 of Title I of ERISA and Section 4975 of the Code on the
basis of a claim that the assets of an insurance company general account
constitute Plan assets, unless (I) as otherwise provided by the Secretary of
labor in the 401(c) Regulations to prevent avoidance of the regulations or (ii)
an action is brought by the Secretary of Labor for certain breaches of
fiduciary duty which would also constitute a violation of federal or state
criminal law. Any assets of an insurance company general account which support
insurance policies or annuity contracts issued to a Plan after December 31,
1998 or issued to Plans on or before December 31, 1998 for which the insurance
company does not comply with the 401(c) Regulations may be treated as Plan
assets. In addition, because Section 401(c) does not relate to insurance
company accounts, separate account assets are still treated as Plan assets of
any Plan invested in such separate account. Insurance companies contemplating
the investment of general account assets in the Certificates should consult
with their legal counsel with respect to the applicability of Sections I and
III of PTCE 95-60 and Section 401(c) of ERISA, including the general account's
ability to continue to hold the Certificates after the date which is 18 months
after the date the 401(c) Regulations become final.
REPRESENTATION FROM INVESTING PLANS
It is not clear whether the exemptive relief afforded by the Exemption
will be applicable to the purchase, sale or holding of any class of Non-Exempt
Certificates. To the extent that Offered Certificates are Non-Exempt
Certificates, transfers of such Certificates to a Plan, to a trustee or other
person acting on behalf of any Plan, or to any other person using Plan assets
to effect such acquisition will not be registered by the Trustee unless the
transferee provides the Depositor, the Trustee and the Master Servicer with an
opinion of counsel satisfactory to the Depositor, the Trustee and the Master
Servicer, which opinion will not be at the expense of the Depositor, the
Trustee or the Master Servicer, that the purchase of such Certificates by or on
behalf of, or with asset of, any Plan is permissible under applicable law, will
not constitute or result in any non-exempt prohibited transaction under ERISA
or Section 4975
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of the Code and will not subject the Depositor, the Trustee or the Master
Servicer to any obligation in addition to those undertaken in the Pooling and
Servicing Agreement. In lieu of such opinion of counsel, the prospective
transferee of any class of Non-Exempt Certificates may provide a certification
of facts substantially to the effect that the purchase of such Certificates by
or on behalf of, or with asset of, any Plan is permissible under applicable
law, will not constitute or result in a non-exempt prohibited transaction under
ERISA or Section 4975 of the Code, will not subject the Depositor, the Trustee
or the Master Servicer to any obligation in addition to those undertaken in the
Pooling and Servicing Agreement, and the following conditions are met: (a) the
source of funds used to purchase such Certificates is an "insurance company
general account" (as such term is defined in PTCE 95-60 and (b) the conditions
set forth in Sections I and III of PTCE 95-60 have been satisfied as of the
date of the acquisition of such Certificates.
TAX EXEMPT INVESTORS
A Plan that is exempt from federal income taxation pursuant to Section 501
of the Code (a "Tax Exempt Investor") nonetheless will be subject to federal
income taxation to the extent that its income is "unrelated business taxable
income" ("UBTI") within the meaning of Section 512 of the Code. All "excess
inclusions" of a REMIC allocated to a REMIC Residual Certificate held by a
Tax-Exempt Investor will be considered UBTI and thus will be subject to federal
income tax. See "Certain Federal Income Tax Consequences--Taxation of Owners of
REMIC Residual Certificates--Excess Inclusions."
Such fiduciary or other Plan investor should consider the availability of
other class exemptions granted by the DOL, which provide relief from certain of
the prohibited transaction provisions of ERISA and the related excise tax
provisions of Section 4975 of the Code, including Sections I and III of
Prohibited Transaction Class Exemption ("PTCE") 95-60, regarding transactions
by insurance company general accounts. The Prospectus Supplement with respect
to a series of Certificates may contain additional information regarding the
application of the Exemption, PTCE 95-60 or any other DOL exemption, with
respect to the Certificates offered thereby.
LEGAL INVESTMENT
If so specified in the related Prospectus Supplement, the Offered
Certificates will constitute "mortgage related securities" for purposes of
SMMEA. Accordingly, investors whose investment authority is subject to legal
restrictions should consult their legal advisors to determine whether and to
what extent the Offered Certificates constitute legal investments for them.
Generally, only classes of Offered Certificates that (i) are rated in one
of the two highest rating categories by one or more Rating Agencies and (ii)
are part of a series evidencing interests in a Trust Fund consisting of loans
secured by a single parcel of real estate upon which is located a dwelling or
mixed residential and commercial structure, such as certain Multifamily Loans,
and originated by types of Originators specified in SMMEA, will be "mortgage
related securities" for purposes of SMMEA. "Mortgage related securities" are
legal investments to the same extent that, under applicable law, obligations
issued by or guaranteed as to principal and interest by the United States or
any agency or instrumentality thereof constitute legal investments for persons,
trusts, corporations, partnerships, associations, business trusts and business
entities (including depository institutions, insurance companies and pension
funds created pursuant to or existing under the laws of the United States or of
any state, the authorized investments of which are subject to state
regulation). Under SMMEA, if a state enacted legislation prior to October 3,
1991 that specifically limits the legal investment authority of any such
entities with respect to "mortgage related securities", Offered Certificates
would constitute legal investments for entities subject to such legislation
only to the extent provided in such legislation.
SMMEA also amended the legal investment authority of federally chartered
depository institutions as follows: federal savings and loan associations and
federal savings banks may invest in, sell or otherwise deal with "mortgage
related securities" without limitation as to the percentage of their assets
represented thereby, federal credit unions may invest in such securities, and
national banks may purchase such securities for their own account without
regard to the limitations generally applicable to
85
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investment securities set forth in 12 U.S.C. 24 (Seventh), subject in each case
to such regulations as the applicable federal regulatory authority may
prescribe.
Upon the issuance of final implementing regulations under the Riegle
Community Development and Regulatory Improvement Act of 1994 and subject to any
limitations such regulations may impose, a modification of the definition of
"mortgage related securities" will become effective to expand the types of
loans to which such securities may relate to include loans secured by "one or
more parcels of real estate upon which is located one or more commercial
structures". In addition, the related legislative history states that this
expanded definition includes multifamily residential loans secured by more than
one parcel of real estate upon which is located more than one structure. Until
September 23, 2001 any state may enact legislation limiting the extent to which
"mortgage related securities" under this expanded definition would constitute
legal investments under that state's laws.
The Federal Financial Institutions Examination Council has issued a
supervisory policy statement (the "Policy Statement") applicable to all
depository institutions, setting forth guidelines for and significant
restrictions on investments in "high-risk mortgage securities". The Policy
Statement has been adopted by the Federal Reserve Board, the Office of the
Comptroller of the Currency, the FDIC and the OTS. The Policy Statement
generally indicates that a mortgage derivative product will be deemed to be
high risk if it exhibits greater price volatility than a standard fixed rate
thirty-year mortgage security. According to the Policy Statement, prior to
purchase, a depository institution will be required to determine whether a
mortgage derivative product that it is considering acquiring is high-risk, and
if so that the proposed acquisition would reduce the institution's overall
interest rate risk. Reliance on analysis and documentation obtained from a
securities dealer or other outside party without internal analysis by the
institution would be unacceptable. There can be no assurance as to which
classes of Certificates, including Offered Certificates, will be treated as
high-risk under the Policy Statement.
The predecessor to the Office of Thrift Supervision (the "OTS") issued a
bulletin, entitled, "Mortgage Derivative Products and Mortgage Swaps", which is
applicable to thrift institutions regulated by the OTS. The bulletin
established guidelines for the investment by savings institutions in certain
"high-risk" mortgage derivative securities and limitations on the use of such
securities by insolvent, undercapitalized or otherwise "troubled" institutions.
According to the bulletin, such "high-risk" mortgage derivative securities
include securities having certain specified characteristics, which may include
certain classes of Offered Certificates. In addition, the National Credit Union
Administration has issued regulations governing federal credit union
investments which prohibit investment in certain specified types of securities,
which may include certain classes of Offered Certificates. Similar policy
statements have been issued by regulators having jurisdiction over other types
of depository institutions.
There may be other restrictions on the ability of certain investors either
to purchase certain classes of Offered Certificates or to purchase any class of
Offered Certificates representing more than a specified percentage of the
investor's assets. The Depositor will make no representations as to the proper
characterization of any class of Offered Certificates for legal investment or
other purposes, or as to the ability of particular investors to purchase any
class of Offered Certificates under applicable legal investment restrictions.
These uncertainties may adversely affect the liquidity of any class of Offered
Certificates. Accordingly, all investors whose investment activities are
subject to legal investment laws and regulations, regulatory capital
requirements or review by regulatory authorities should consult with their
legal advisors in determining whether and to what extent the Offered
Certificates of any class constitute legal investments or are subject to
investment, capital or other restrictions.
USE OF PROCEEDS
The net proceeds to be received from the sale of the Certificates of any
series will be applied by the Depositor to the purchase of Trust Assets or will
be used by the Depositor for general corporate purposes. The Depositor expects
to sell the Certificates from time to time, but the timing and amount of
offerings of Certificates will depend on a number of factors, including the
volume of Mortgage Assets acquired by the Depositor, prevailing interest rates,
availability of funds and general market conditions.
86
<PAGE>
METHOD OF DISTRIBUTION
The Certificates offered hereby and by the related Prospectus Supplements
will be offered in series through one or more of the methods described below.
The Prospectus Supplement prepared for each series will describe the method of
offering being utilized for that series and will state the net proceeds to the
Depositor from such sale.
The Depositor intends that Offered Certificates will be offered through
the following methods from time to time and that offerings may be made
concurrently through more than one of these methods or that an offering of the
Offered Certificates of a particular series may be made through a combination
of two or more of these methods. Such methods are as follows:
1. By negotiated firm commitment or best efforts underwriting and public
re-offering by underwriters;
2. By placements by the Depositor with institutional investors through
dealers; and
3. By direct placements by the Depositor with institutional investors.
In addition, if specified in the related Prospectus Supplement, the
Offered Certificates of a series may be offered in whole or in part to the
seller of the related Mortgage Assets that would comprise the Trust Fund for
such Certificates.
If underwriters are used in a sale of any Offered Certificates (other than
in connection with an underwriting on a best efforts basis), such Certificates
will be acquired by the underwriters for their own account and may be resold
from time to time in one or more transactions, including negotiated
transactions, at fixed public offering prices or at varying prices to be
determined at the time of sale or at the time of commitment therefor. Such
underwriters may be broker-dealers affiliated with the Depositor whose
identities and relationships to the Depositor will be as set forth in the
related Prospectus Supplement. The managing underwriter or underwriters with
respect to the offer and sale of Offered Certificates of a particular series
will be set forth on the cover of the Prospectus Supplement relating to such
series and the members of the underwriting syndicate, if any, will be named in
such Prospectus Supplement.
In connection with the sale of Offered Certificates, underwriters may
receive compensation from the Depositor or from purchasers of the Offered
Certificates in the form of discounts, concessions or commissions. Underwriters
and dealers participating in the distribution of the Offered Certificates may
be deemed to be underwriters in connection with such Certificates, and any
discounts or commissions received by them from the Depositor and any profit on
the resale of Offered Certificates by them may be deemed to be underwriting
discounts and commissions under the Securities Act of 1933, as amended.
It is anticipated that the underwriting agreement pertaining to the sale
of the Offered Certificates of any series will provide that the obligations of
the underwriters will be subject to certain conditions precedent, that the
underwriters will be obligated to purchase all such Certificates if any are
purchased (other than in connection with an underwriting on a best efforts
basis) and that, in limited circumstances, the Depositor will indemnify the
several underwriters and the underwriters will indemnify the Depositor against
certain civil liabilities, including liabilities under the Securities Act of
1933, as amended, or will contribute to payments required to be made in respect
thereof.
The Prospectus Supplement with respect to any series offered by placements
through dealers will contain information regarding the nature of such offering
and any agreements to be entered into between the Depositor and purchasers of
Offered Certificates of such series.
The Depositor anticipates that the Certificates offered hereby will be
sold primarily to institutional investors. Purchasers of Offered Certificates,
including dealers, may, depending on the facts and circumstances of such
purchases, be deemed to be "underwriters" within the meaning of the Securities
Act of 1933, as amended, in connection with reoffers and sales by them of
Offered Certificates. Holders of Offered Certificates should consult with their
legal advisors in this regard prior to any such reoffer or sale.
87
<PAGE>
LEGAL MATTERS
Unless otherwise specified in the related Prospectus Supplement, certain
legal matters in connection with the Certificates of each series, including
certain federal income tax consequences, will be passed upon for the Depositor
by Mayer, Brown & Platt, Chicago, Illinois, Thacher Proffitt & Wood, New York,
New York or Orrick, Herrington & Sutcliffe LLP, New York, New York.
FINANCIAL INFORMATION
A new Trust Fund will be formed with respect to each series of
Certificates, and no Trust Fund will engage in any business activities or have
any assets or obligations prior to the issuance of the related series of
Certificates. Accordingly, no financial statements with respect to any Trust
Fund will be included in this Prospectus or in the related Prospectus
Supplement. The Depositor has determined that its financial statements will not
be material to the offering of any Offered Certificates.
RATING
It is a condition to the issuance of any class of Offered Certificates
that they shall have been rated not lower than investment grade, that is, in
one of the four highest rating categories, by at least one Rating Agency.
Ratings on mortgage pass-through certificates address the likelihood of
receipt by the holders thereof of all collections on the underlying mortgage
assets to which such holders are entitled. These ratings address the
structural, legal and issuer-related aspects associated with such certificates,
the nature of the underlying mortgage assets and the credit quality of the
guarantor, if any. Ratings on mortgage pass-through certificates do not
represent any assessment of the likelihood of principal prepayments by
borrowers or of the degree by which such prepayments might differ from those
originally anticipated. As a result, certificateholders might suffer a lower
than anticipated yield, and, in addition, holders of stripped interest
certificates in extreme cases might fail to recoup their initial investments.
Furthermore, ratings on mortgage pass-through certificates do not address the
price of such certificates or the suitability of such certificates to the
investor.
A security rating is not a recommendation to buy, sell or hold securities
and may be subject to revision or withdrawal at any time by the assigning
rating organization. Each security rating should be evaluated independently of
any other security rating.
88
<PAGE>
INDEX OF PRINCIPAL TERMS
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
401(c) Regulations ..................................... 84
Accrual Certificates ................................... 8
Accrued Certificate Interest ........................... 26
Act .................................................... 55
Annual Debt Service .................................... 15
ARM Loans .............................................. 17
Available Distribution Amount .......................... 25
Book-Entry Certificates ................................ 25
Cash Flow Agreement .................................... 9
CERCLA ................................................. 54
Certificate Account .................................... 18
Certificate Balance .................................... 7
Certificate Owner ...................................... 31
Certificateholder ...................................... 32
Certificates ........................................... 1
Closing Date ........................................... 60
Code ................................................... 10
Commercial Properties .................................. 14
Commission ............................................. 3
Committee Report ....................................... 59
Companion Class ........................................ 27
Condemnation Proceeds .................................. 38
Contributions Tax ...................................... 69
Controlled Amortization Class .......................... 27
Cooperatives ........................................... 14
CPR .................................................... 22
Credit Support ......................................... 9
Cut-Off Date ........................................... 27
Debt Service Coverage Ratio ............................ 15
Definitive Certificates ................................ 25
Depositor .............................................. 1
Determination Date ..................................... 20
Direct Participants .................................... 31
Distribution Date ...................................... 8
Distribution Date Statement ............................ 29
DTC .................................................... 25
Due Dates .............................................. 17
Due Period ............................................. 20
Equity Participation ................................... 17
ERISA .................................................. 10
Excess Funds ........................................... 24
Excluded Plan .......................................... 83
Exemption .............................................. 82
FAMC ................................................... 18
FHLMC .................................................. 18
FNMA ................................................... 18
Garn Act ............................................... 56
GMACCM ................................................. 5
Grantor Trust Fractional Interest Certificate .......... 72
Grantor Trust Strip Certificate ........................ 73
Indirect Participants .................................. 31
Insurance Proceeds ..................................... 38
</TABLE>
89
<PAGE>
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
IRS ..................................... 40
Issue Premium ........................... 65
Letter of Credit Bank ................... 48
Liquidation Proceeds .................... 38
Loan-to-Value Ratio ..................... 16
Lock-Out Date ........................... 17
Lock-Out Period ......................... 17
Manager ................................. 5
Mark-to-Market Regulations .............. 68
Master Servicer ......................... 5
MBS ..................................... 1
MBS Administrator ....................... 5
MBS Agreement ........................... 18
MBS Issuer .............................. 18
MBS Servicer ............................ 18
MBS Trustee ............................. 18
Mortgage Asset Pool ..................... 1
Mortgage Asset Seller ................... 14
Mortgage Assets ......................... 1
Mortgage Notes .......................... 14
Mortgage Rate ........................... 6
Mortgaged Properties .................... 14
Mortgages ............................... 14
Multifamily Properties .................. 14
Net Leases .............................. 16
Non-Exempt Certificates ................. 83
Nonrecoverable Advance .................. 28
Notional Amount ......................... 7
Offered Certificates .................... 1
OID Regulations ......................... 58
Originator .............................. 14
OTS ..................................... 86
Participants ............................ 31
Pass-Through Rate ....................... 7
Percentage Interest ..................... 26
Permitted Investments ................... 37
Plans ................................... 81
Policy Statement ........................ 86
Pooling And Servicing Agreement ......... 6
Prepayment Assumption ................... 59
Prepayment Interest Shortfall ........... 20
Prepayment Premium ...................... 17
Prohibited Transactions Tax ............. 69
Prospectus Supplement ................... 1
PTCE .................................... 84
Purchase Price .......................... 34
Rating Agency ........................... 10
RCRA .................................... 55
Record Date ............................. 26
Related Proceeds ........................ 28
Relief Act .............................. 57
REMIC ................................... 2
REMIC Certificates ...................... 58
REMIC Provisions ........................ 58
</TABLE>
90
<PAGE>
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
REMIC Regular Certificates ....................... 10
REMIC Regulations ................................ 58
REMIC Residual Certificates ...................... 10
REO Property ..................................... 37
Restricted Group ................................. 82
Senior Certificates .............................. 7
Senior Liens ..................................... 14
Servicer ......................................... 5
SMMEA ............................................ 10
SPA .............................................. 22
Special Servicer ................................. 5
Stripped Interest Certificates ................... 7
Stripped Principal Certificates .................. 7
Subordinate Certificates ......................... 7
Sub-Servicer ..................................... 37
Sub-Servicing Agreement .......................... 37
Tax Exempt Investor .............................. 85
Tiered REMICs .................................... 59
Title V .......................................... 57
Trust Assets ..................................... 3
Trust Fund ....................................... 1
Trustee .......................................... 5
UBTI ............................................. 85
UCC .............................................. 50
Underwriter ...................................... 82
Underwritten Cash Flow ........................... 15
Underwritten Debt Service Coverage Ratio ......... 15
Underwritten DSCR ................................ 15
UNITED STATES PERSON ............................. 72
Value ............................................ 16
Warranting Party ................................. 34
</TABLE>
91
<PAGE>
This diskette contains two spreadsheet files in read-only format that can
be put on a user-specified hard drive or network drive. These two files are
"GMAC98C1.xls" and "GMAC98C1.wk4." The file "GMA98C1.xls" is a Microsoft
Excel(1), Version 5.0 spreadsheet, and the file "GMAC98C1.wk4" is a Lotus 1231,
Version 4.1 spreadsheet. Each file provides, in electronic format, certain loan
level information shown in ANNEX A of the Prospectus Supplement.
Open either file as you would normally open any spreadsheet in either
Microsoft Excel or Lotus 123. After either file is opened, a securities law
legend will be displayed. READ THE LEGEND CAREFULLY. To view the ANNEX A data,
see the worksheet labeled "Annex A."
- ----------
(1) Microsoft Excel and Lotus 123 are registered trademarks of Microsoft
Corporation and Lotus Development Corporation, respectively.
<PAGE>
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NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS
SUPPLEMENT AND THE PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
DEPOSITOR OR BY THE UNDERWRITERS. THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS
DO NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, THE
SECURITIES OFFERED HEREBY TO ANYONE IN ANY JURISDICTION IN WHICH THE PERSON
MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANYONE TO
WHOM IT IS UNLAWFUL TO MAKE ANY SUCH OFFER OR SOLICITATION. NEITHER THE
DELIVERY OF THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT
INFORMATION HEREIN OR THEREIN IS CORRECT AS OF ANY TIME SINCE THE DATE OF THIS
PROSPECTUS
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Transaction Overview ............................ S-6
Summary ......................................... S-8
Risk Factors .................................... S-20
Description of the Mortgage Asset Pool .......... S-29
Servicing of the Mortgage Loans ................. S-50
Description of the Certificates ................. S-58
Yield and Maturity Considerations ............... S-74
Certain Federal Income Tax Consequences S-86
Method of Distribution .......................... S-88
Legal Matters ................................... S-89
Ratings ......................................... S-89
Legal Investment ................................ S-90
ERISA Considerations ............................ S-90
Index of Principal Terms ........................ S-92
Annex A ......................................... A-1
Annex B ......................................... B-1
Annex C ......................................... C-1
Annex D ......................................... D-1
</TABLE>
PROSPECTUS
<TABLE>
<S> <C>
Available Information ........................... 3
Incorporation of Certain Information by
Reference .................................... 4
Summary of Prospectus ........................... 5
Risk Factors .................................... 11
Description of the Trust Funds .................. 14
Yield and Maturity Considerations ............... 19
The Depositor ................................... 24
GMAC Commercial Mortgage Corporation ............ 24
Description of the Certificates ................. 25
The Pooling and Servicing Agreements ............ 32
Description of Credit Support ................... 47
Certain Legal Aspects of Mortgage Loans ......... 49
Certain Federal Income Tax Consequences 58
State and Other Tax Consequences ................ 80
ERISA Considerations ............................ 81
Legal Investment ................................ 85
Use of Proceeds ................................. 86
Method of Distribution .......................... 87
Legal Matters ................................... 88
Financial Information ........................... 88
Rating .......................................... 88
</TABLE>
$1,301,390,000
(APPROXIMATE)
GMAC COMMERCIAL
MORTGAGE SECURITIES, INC.
MORTGAGE PASS-THROUGH
CERTIFICATES,
SERIES 1998-C1
--------------------------------------------------------------
PROSPECTUS SUPPLEMENT
--------------------------------------------------------------
DEUTSCHE MORGAN GRENFELL
LEHMAN BROTHERS
April 28, 1998
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