<PAGE>
Filed Pursuant to Rule 424(b)(5)
Registration File No.: 333-6493
THE INFORMATION IN THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS IS
NOT COMPLETE AND MAY BE CHANGED. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS
TO BUY BE ACCEPTED PRIOR TO THE TIME A FINAL PROSPECTUS SUPPLEMENT AND THE
RELATED PROSPECTUS IS DELIVERED. THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING
PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN
OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT
PERMITTED.
Subject to Completion, Dated August 18, 1999
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED NOVEMBER 5, 1998
$1,031,610,000 (APPROXIMATE)
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
Depositor
GMAC COMMERCIAL MORTGAGE CORPORATION
Servicer
SERIES 1999-C3 MORTGAGE PASS-THROUGH CERTIFICATES
THE CERTIFICATES WILL CONSIST OF:
YOU SHOULD CONSIDER o The nine classes of offered certificates described
CAREFULLY THE RISK in the table on page S-4. The offered certificates
FACTORS BEGINNING ON are the only securities offered pursuant to this
PAGE S-12 IN THIS prospectus supplement.
PROSPECTUS SUPPLEMENT
AND PAGE 11 IN THE o Six additional classes of private certificates, all
PROSPECTUS. of which are subordinated to, and provide credit
enhancement for, the offered certificates. The
The certificates private certificates are not offered by this
represent interests prospectus supplement.
only in the trust
created for Series
1999-C3. They do not THE ASSETS UNDERLYING THE CERTIFICATES WILL INCLUDE:
represent interests o A pool of 138 fixed rate, monthly pay mortgage loans
in or obligations of secured by first priority liens on 177 commercial and
GMAC Commercial multifamily residential properties. The mortgage pool
Mortgage Securities, will have an initial pool balance of approximately
Inc., GMAC Commer $1,152,640,035.
cial Mortgage
Corporation or any CREDIT ENHANCEMENT:
of their affiliates o The subordination of certificates other than the
Class A-1-a, A-1-b and affiliates. A-2 certificates
This prospectus will provide credit enhancement to the Class A-1-a,
supplement may be A-1-b and A-2 certificates. Each class of
used to offer and subordinated certificates will provide credit
sell the offered enhancement to subordinated certificates with earlier
certificates only alphabetical class designations.
if accompanied by
the prospectus NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY
STATE SECURITIES COMMISSION HAS APPROVED THE OFFERED
CERTIFICATES OR DETERMINED THAT THIS PROSPECTUS
SUPPLEMENT OR THE PROSPECTUS IS ACCURATE OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The underwriters will sell the offered certificates at varying prices to be
determined at the time of sale. The proceeds to GMAC Commercial Mortgage
Securities, Inc. from the sale of the offered certificates will be approximately
% of their principal balance plus accrued interest, before deducting expenses.
The underwriters' commissi.on will be the difference between the price they pay
to GMAC Commercial Mortgage Securities, Inc. for the offered certificates and
the amount they receive from the sale of the offered certificates to the public.
Co-Lead Managers and Joint Bookrunners
DEUTSCHE BANC ALEX. BROWN GOLDMAN, SACHS & CO.
and solely as a member of the selling party
NEWMAN AND ASSOCIATES, INC.
AUGUST , 1999
<PAGE>
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
Mortgage Pass-Through Certificates, Series 1999-C3
IDAHO NEW YORK OKLAHOMA
1 property 12 properties 3 properties
$2,655,000 $135,840,193 $13,296,180
0.23% of total 11.79% of total 1.15% of total
NEBRASKA CONNECTICUT KANSAS
5 properties 2 properties 2 properties
$4,677,886 $4,126,169 $3,996,634
0.41% of total 0.36% of total 0.35% of total
MISSOURI NEW JERSEY COLORADO
4 properties 9 properties 2 properties
$20,640,232 $32,267,413 $12,434,379
1.79% of total 2.80% of total 1.08% of total
MINNESOTA DELAWARE ARIZONA
1 property 1 property 7 properties
$3,247,265 $3,243,231 $106,178,494
0.28% of total 0.28% of total 9.21% of total
ILLINOIS MARYLAND NEVADA
1 property 3 properties 1 property
$12,106,821 $9,778,118 $5,940,000
1.05% of total 0.85% of total 0.52% of total
WISCONSIN VIRGINIA CALIFORNIA
1 property 4 properties 33 properties
$6,088,038 $12,391,129 $257,687,228
0.53% of total 1.08% of total 22.36% of total
MICHIGAN NORTH CAROLINA
4 properties 6 properties OREGON
$16,106,781 $37,772,542 1 property
1.40% of total 3.28% of total $5,290,545
0.46% of total
INDIANA SOUTH CAROLINA
5 properties 1 property HAWAII
$68,668,711 $11,200,000 2 properties
5.96% of total 0.97% of total $7,837,587
0.68% of total
OHIO GEORGIA
7 properties 3 properties
$48,997,396 $7,736,460
4.25% of total 0.67% of total
WEST VIRGINIA FLORIDA
1 property 10 properties
$2,023,296 $47,770,937
0.18% of total 4.14% of total
PENNSYLVANIA TENNESSEE
3 properties 4 properties
$12,344,296 $11,512,870
1.07% of total 1.00% of total
ALABAMA
NEW HAMPSHIRE 1 property
1 property $4,897,430
$15,961,012 0.42% of total
1.38% of total
MISSISSIPPI
MASSACHUSETTS 2 properties
2 properties $23,078,804
$13,800,000 2.00% of total
1.20% of total
TEXAS
32 properties
$171,046,958
14.84% of total
DISTRIBUTION OF PROPERTY TYPES
Multifamily 22.55%
Hospitality 9.19%
Industrial 8.60%
Other 1.27%
Retail 30.44%
Office 27.95%
[ ] (less than or equal to) 1.00% of Initial Pool Balance
[ ] 1.01% - 5.00% of Initial Pool Balance
[ ] 5.01% - 10.00% of Initial Pool Balance
[ ] (greater than) 10.00% of Initial Pool Balance
For purposes of this map, each Mortgage Loan secured by multiple Mortgaged
Properties 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 Allocated Principal Amounts thereof (as defined herein).
<PAGE>
IMPORTANT NOTICE ABOUT INFORMATION PRESENTED IN THIS
PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS
We tell you about the offered certificates in two separate documents that
progressively provide more detail:
o the accompanying prospectus, which provides general information, some
of which may not apply to your series of certificates; and
o this prospectus supplement, which describes the specific terms of your
series of certificates.
IF THE DESCRIPTION OF YOUR CERTIFICATES IN THIS PROSPECTUS SUPPLEMENT
DIFFERS FROM THE DESCRIPTION IN THE ACCOMPANYING PROSPECTUS, YOU SHOULD RELY ON
THE INFORMATION IN THIS PROSPECTUS SUPPLEMENT.
We include cross references in this prospectus supplement and the
accompanying prospectus to captions in these materials where you can find
further related discussions. The following table of contents and the table of
contents included in the accompanying prospectus provide the pages on which
these captions are located.
You can find a listing of the pages where significant defined terms used in
this prospectus supplement and the accompanying prospectus are defined under the
caption "Index of Significant Definitions" in this prospectus supplement and in
the accompanying prospectus.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
SUMMARY .......................................... S-6
The Mortgage Pool ............................. S-6
Geographic Concentrations ..................... S-7
Property Type ................................. S-7
Call Protection ............................... S-7
Payment Terms ................................. S-7
The Certificates .............................. S-7
Certificate Designations ...................... S-7
Initial Certificate Balances of the
Certificates ............................... S-7
Distributions on the Offered Certificates S-8
Subordination ................................. S-8
Allocation of Losses and Expenses ............. S-8
Advances ...................................... S-9
Optional Termination .......................... S-9
Book-Entry Registration ....................... S-9
Denominations ................................. S-10
Yield and Prepayment Considerations ........... S-10
Legal Investment .............................. S-10
ERISA Considerations .......................... S-10
Tax Status .................................... S-10
Ratings ....................................... S-10
RISK FACTORS ..................................... S-12
DESCRIPTION OF THE MORTGAGE
POOL ............................................ S-28
Calculations of Interest ...................... S-28
Balloon Loans ................................. S-28
ARD Loans ..................................... S-28
</TABLE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Loan Participation Interest ................... S-29
Amortization of Principal ..................... S-30
Due Dates ..................................... S-30
Defeasance .................................... S-30
Prepayment Provisions ......................... S-31
Earnouts and Additional Collateral
Loans ...................................... S-31
Related Borrowers, Cross-Collateralized
Mortgage Loans and Mortgage Loans
Collateralized by Multiple Properties ...... S-32
Due-on-Sale and Due-on-Encumbrance
Provisions ................................. S-32
Secured Subordinate Financing ................. S-32
Ground Leases ................................. S-33
Loan Documentation ............................ S-33
Significant Mortgage Loans .................... S-34
The Sellers ................................... S-44
Underwriting Matters .......................... S-45
Hazard, Liability and Other Insurance ......... S-46
Assignment of the Mortgage Loans;
Repurchases and Substitutions .............. S-47
Representations and Warranties;
Repurchases ................................ S-48
Pool Characteristics; Changes in
Mortgage Pool .............................. S-50
SERVICING OF THE MORTGAGE
LOANS ........................................... S-51
The Servicer .................................. S-51
</TABLE>
S-2
<PAGE>
<TABLE>
<CAPTION>
PAGE
------
<S> <C>
Servicing Standard .......................... S-51
Specially Serviced Mortgage Loans ........... S-51
The Operating Adviser ....................... S-52
Termination of the Servicer with
Respect to Specially Serviced
Mortgage Loans and REO Properties S-53
Servicing and Other Compensation and
Payment of Expenses ...................... S-54
Modifications, Waivers, Amendments
and Consents ............................. S-57
Enforcement of ARD Loans .................... S-58
Sale of Defaulted Mortgage Loans ............ S-58
REO Properties .............................. S-58
Inspections; Collection of Operating
Information .............................. S-59
Year 2000 Compliance ........................ S-60
DESCRIPTION OF THE
CERTIFICATES .................................. S-60
Denominations ............................... S-60
Book-Entry Registration of the Offered
Certificates ............................. S-61
Certificate Balances and Notional
Amounts .................................. S-63
Pass-Through Rates .......................... S-63
Distributions ............................... S-65
Distributions of Prepayment Premiums ........ S-71
Distributions of Excess Interest ............ S-72
Distributions of Excess Liquidation
Proceeds ................................. S-73
Treatment of REO Properties ................. S-73
Interest Reserve Account .................... S-73
Subordination; Allocation of Losses and
Expenses ................................. S-73
P&I Advances ................................ S-75
Appraisal Reductions ........................ S-76
Reports to Certificateholders; Available
Information .............................. S-77
Information Available Electronically ........ S-79
Other Information ........................... S-80
Voting Rights ............................... S-80
</TABLE>
<TABLE>
<CAPTION>
PAGE
------
<S> <C>
Termination; Retirement of Certificates ..... S-81
The Trustee ................................. S-81
Year 2000 Compliance ........................ S-82
YIELD AND MATURITY
CONSIDERATIONS ................................ S-82
Yield Considerations ........................ S-82
Factors that Affect the Rate and Timing
of Payments and Defaults ................. S-84
Delay in Payment of Distributions ........... S-84
Unpaid Distributable Certificate Interest S-84
Weighted Average Life ....................... S-84
Price/Yield Tables .......................... S-90
Yield Sensitivity of the Class X
Certificates ............................. S-94
FEDERAL INCOME TAX
CONSEQUENCES .................................. S-97
Original Issue Discount and Premium ......... S-97
New Withholding Regulations ................. S-99
Characterization of Investments in
Offered Certificates ..................... S-99
METHOD OF DISTRIBUTION ......................... S-100
LEGAL MATTERS .................................. S-101
RATINGS ........................................ S-101
LEGAL INVESTMENT ............................... S-102
ERISA CONSIDERATIONS ........................... S-102
INDEX OF SIGNIFICANT
DEFINITIONS .............................. S-104
ANNEX A -- CHARACTERISTICS
OF THE MORTGAGE LOANS .................... A-1
ANNEX B -- FORM OF
STATEMENT TO
CERTIFICATEHOLDERS AND
SERVICER REPORTS ......................... B-1
ANNEX C -- STRUCTURAL AND
COLLATERAL TERM SHEET .................... C-1
ANNEX D -- GLOBAL
CLEARANCE, SETTLEMENT
AND TAX DOCUMENTATION
PROCEDURES ............................... D-1
</TABLE>
S-3
<PAGE>
TRANSACTION OVERVIEW
THIS TRANSACTION OVERVIEW PROVIDES AN OVERVIEW OF CERTAIN CALCULATIONS,
CASH FLOWS AND OTHER INFORMATION TO AID YOUR UNDERSTANDING OF THIS OFFERING.
MORE DETAIL REGARDING THESE CALCULATIONS, CASH FLOWS AND OTHER INFORMATION IS
PROVIDED IN THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS.
THE SERIES 1999-C3 MORTGAGE PASS-THROUGH CERTIFICATES
<TABLE>
<CAPTION>
APPROXIMATE INITIAL APPROXIMATE
ORIGINAL PRINCIPAL PERCENT OF PASS- WEIGHTED AVG. PRINCIPAL
RATINGS OR NOTIONAL CREDIT THROUGH LIFE (6) WINDOW (7)
CLASS FITCH/MOODY'S AMOUNT (1) SUPPORT (5) RATE (IN YEARS) (MONTH/YEAR)
- -------- --------------- ----------------------- ------------- --------- --------------- -------------
<S> <C> <C> <C> <C> <C> <C>
X AAA/Aaa $ 1,152,640,035(2) N/A (3) 9.3 9/99-3/16
A-1-a AAA/Aaa $ 50,000,000 27.00% (4) 5.8 9/99-5/08
A-1-b AAA/Aaa $ 191,427,000 27.00% (8) 9.7 5/08-8/09
A-2 AAA/Aaa $ 600,000,000 27.00% (8) 8.9 9/99-8/09
B AA/Aa2 $ 51,868,000 22.50% (8) 10.0 8/09-8/09
C A/A2 $ 57,632,000 17.50% (8) 10.0 8/09-8/09
D A-/A3 $ 20,171,000 15.75% (8) 10.0 8/09-8/09
E BBB/Baa2 $ 37,460,000 12.50% (9) 10.0 8/09-8/09
F BBB-/Baa3 $ 23,052,000 10.50% (9) 10.0 8/09-8/09
G (10)
H (10)
J (10)
K (10)
L (10)
M (10)
</TABLE>
- ----------
(1) These amounts are approximate. They may vary upward or downward by no more
than 5%, depending upon the final composition of the pool of mortgage
loans sold to the trust.
(2) The Class X certificates will accrue interest on the Class X notional
amount. The initial Class X notional amount is approximate and will
decline as the aggregate principal balance of the underlying mortgage
loans declines. The Class X certificates will only be entitled to receive
distributions of interest.
(3) The Class X certificates will accrue interest at a variable rate based
upon the weighted average net mortgage rate. See "Description of the
Certificates--Pass-Through Rates."
(4) The pass-through rate for the Class A-1-a certificates is a fixed rate.
(5) The percent of credit support reflects the aggregate certificate balances
of all classes of certificates that will be subordinate to each class on
the date the certificates are issued, expressed as a percentage of the
initial pool balance.
(6) The weighted average life of a security is the average amount of time
that will elapse from the time the security is issued until the investor
receives all principal payments on the security, weighted on the basis of
principal paid (or, in the case of Class X certificates, the reduction in
notional amount). The weighted average life of each class is calculated
assuming that there are no prepayments on the mortgage loans and
according to the maturity assumptions described under "Yield and Maturity
Considerations" in this prospectus supplement. The rated final
distribution date is the distribution date that occurs in July, 2032.
(7) The principal window is the period during which each class would receive
distributions of principal assuming that there are no prepayments on the
mortgage loans and according to the maturity assumptions described under
"Yield and Maturity Considerations" in this prospectus supplement. The
principal window for the Class X certificates is the period during which
that class would have an outstanding notional balance, based on the same
assumptions.
(8) Lesser of fixed rate or weighted average net mortgage rate.
(9) Weighted average net mortgage rate.
(10) This class is not offered by this prospectus supplement.
S-4
<PAGE>
The following table shows certain information regarding the mortgage loans
and the mortgaged properties as of the cut-off date, which is the due date of
any mortgage loan in August, 1999.
All weighted averages set forth below are based on the balances of the
mortgage loans as of that date. The balance of each mortgage loan as of the due
date for any mortgage loan in August, 1999 is its unpaid principal balance as of
that date, after applying all payments of principal due on or before that date,
whether or not those payments are received.
MORTGAGE POOL CHARACTERISTICS
<TABLE>
<CAPTION>
CHARACTERISTICS ENTIRE MORTGAGE POOL
- -------------------------------------------------------------- ---------------------
<S> <C>
Initial pool balance .................................. $1,152,640,035
Number of mortgage loans .............................. 138
Number of mortgaged properties ........................ 177
Average balance as of the cut-off date ................ $ 8,352,464
Range of mortgage rates
as of the cut-off date ............................... 6.70% - 8.93%
Weighted average mortgage rate ........................ 7.896%
Weighted average remaining term to maturity or
anticipated repayment date ........................... 118.3 months
Weighted average debt service coverage ratio .......... 1.37 x
Weighted average loan-to-value ratio .................. 68.88%
</TABLE>
The calculation of "loan-to-value ratio" and "debt service coverage ratio"
is described in Annex A to this prospectus supplement.
S-5
<PAGE>
SUMMARY
This summary highlights selected information from this document and does not
contain all of the information that you need to consider in making your
investment decision. To understand all of the terms of the offered certificates,
you should read carefully this entire document and the accompanying prospectus.
<TABLE>
<CAPTION>
RELEVANT PARTIES AND IMPORTANT DATES
<S> <C> <C>
TITLE OF SERIES:Series 1999-C3 Mortgage CUT-OFF DATES: August 1, August 5, and
Pass-Through Certificates August 10, 1999
THE ISSUER: GMAC Commercial Mortgage DISTRIBUTION DATE: The 15th day of each
Securities Inc. Series 1999-C3 Trust month or, if the 15th day is not a
formed to issue the mortgage business day, the immediately
pass-through certificates and to acquire succeeding business day, beginning in
the mortgage pool. September, 1999.
DEPOSITOR: GMAC Commercial Mortgage CLOSING DATE: On or about August ,
Securities, Inc. 1999.
650 Dresher Road
Horsham, Pennsylvania 19044-8015 DETERMINATION DATE: The 5th day of
(215) 328-4622 each month or, if the 5th day is not a
business day, the immediately
succeeding business day.
SELLERS: GMAC Commercial Mortgage
Corporation; German American Capital
Corporation; and Goldman Sachs COLLECTION PERIOD: For any distribution
Mortgage Company date, the period that begins immediately
following the determination date in the
SERVICER: GMAC Commercial Mortgage prior calendar month and continues
Corporation through and includes the determination
date in the calendar month in which
TRUSTEE: Norwest Bank Minnesota, National that distribution date occurs, except that
Association the first collection period for each mortgage
loan begins immediately following its
cut-off date.
</TABLE>
THE MORTGAGE POOL
The mortgage pool will consist of a pool of mortgage loans secured by first
mortgage liens on fee simple and/or leasehold interests in one or more mortgaged
properties used for commercial or multifamily residential purposes.
GMAC Commercial Mortgage Corporation originated or acquired 70 of the mortgage
loans or 57.14% of the initial pool balance. German American Capital Corporation
originated or acquired 32 of the mortgage loans or 21.50% of the initial pool
balance. Archon Financial L.P. originated 36 of the mortgage loans or 21.36% of
the initial pool balance, all of which were acquired by Goldman Sachs Mortgage
Company. The mortgage loans were originated between January 1, 1998 and August
2, 1999.
Each seller will make representations and warranties with respect to the
mortgage loans sold by it. The depositor will assign these representations and
warranties to the trustee.
The following tables summarize selected mortgage loan information. In these
tables and this prospectus supplement, the percentage of the initial pool
balance refers to the principal balance of the mortgage loans or the allocated
loan amount secured by a mortgaged property. The initial pool balance of the
mortgage loans is equal to their unpaid aggregate principal balances as of their
cut-off dates, after application of all payments of principal due on
S-6
<PAGE>
or before that date, whether or not received. All mortgage pool information is
approximate and depends upon the final composition of the mortgage loans sold to
the trust.
Annex A to this prospectus supplement provides certain characteristics of the
mortgage loans on a loan-by-loan basis. Also see "Description of the Mortgage
Pool" in this prospectus supplement.
GEOGRAPHIC CONCENTRATIONS
The mortgaged properties are located in 35 states. The following table lists the
number and percentage of mortgaged properties 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>
California ......... 33 22.36%
Texas .............. 32 14.84
New York ........... 12 11.79
Arizona ............ 7 9.21
Indiana ............ 5 5.96
</TABLE>
PROPERTY TYPE
The following table lists the number and percentage of mortgaged properties that
are operated for each indicated or other purpose.
<TABLE>
<CAPTION>
NUMBER OF PERCENTAGE
MORTGAGED OF INITIAL
PROPERTY TYPE PROPERTIES POOL BALANCE
- ---------------------- ------------ -------------
<S> <C> <C>
Retail ............... 34 30.44%
Office ............... 36 27.95
Multifamily .......... 55 22.55
Hospitality .......... 25 9.19
Industrial ........... 21 8.60
Mobile Home Park ..... 2 0.38
Other ................ 4 0.88
</TABLE>
CALL PROTECTION
The terms of each of the mortgage loans restrict the ability of the borrower to
prepay the loan. All but one of the mortgage loans only permit prepayment by the
borrower with a prepayment premium or the exercise of a defeasance option by the
borrower, in either case, after the expiration of a lockout period. For a
description of defeasance provisions in the mortgage loans and prepayment
provisions, see "Description of the Mortgage Pool--Defeasance" and "--Prepayment
Provisions."
PAYMENT TERMS
All the mortgage loans accrue interest at a fixed rate, although the rate on a
loan with an anticipated repayment date may increase if that loan is not repaid
on its anticipated repayment date. Six of the mortgage loans, representing
12.80% of the initial pool balance, require payments of interest only for a
period of time after origination. See "Description of the Mortgage
Pool--Calculations of Interest," and "--ARD Loans" in this prospectus
supplement.
THE CERTIFICATES
Your certificates represent the right to a portion of the collections on the
trust's assets. The certificates represent all of the beneficial ownership
interest in the trust.
The approximate initial class principal balance and initial pass-through rate of
each class of the certificates is shown on page S-4.
CERTIFICATE DESIGNATIONS
We refer to the certificates by the following designations:
<TABLE>
<S> <C>
Designation Related Class(es)
- ------------------------ -------------------------------------
Offered certificates Classes X, A-1-a, A-1-b, A-2, B, C,
D, E and F
- ------------------------ -------------------------------------
Senior certificates Classes X, A-1-a, A-1-b and A-2
- ------------------------ -------------------------------------
Interest only Class X
certificates
- ------------------------ -------------------------------------
Subordinate Classes B, C, D, E, F, G, H, J, K, L
certificates and M
- ------------------------ -------------------------------------
REMIC residual Classes R-I, R-II and R-III
certificates
- ------------------------ -------------------------------------
REMIC regular Classes X, A-1-a, A-1-b, A-2, B, C,
certificates D, E, F, G, H, J, K, L and M
- ------------------------ -------------------------------------
</TABLE>
The Class G, H, J, K, L and M certificates are not being offered by this
prospectus supplement.
INITIAL CERTIFICATE BALANCES OF THE CERTIFICATES
The aggregate principal balance of the certificates issued by the trust will be
approximately $1,152,640,035, but may vary upward or downward by no more than
5%.
The senior certificates will comprise approximately 73.0% and the subordinate
certificates will comprise approximately 27.0% of the initial aggregate
certificate balance of the certificates.
The Class X certificates will not have a certificate balance, but will accrue
interest on the Class X notional amount.
S-7
<PAGE>
DISTRIBUTIONS ON THE OFFERED CERTIFICATES
The trustee will make distributions to certificateholders on each distribution
date. The first distribution date will be September 15, 1999.
Until paid in full, each class of offered certificates will be entitled to
receive monthly distributions of interest.
The Class X certificates will not receive any distributions of principal.
For purposes of calculating distributions on the senior certificates on any
distribution date, however, the mortgage loans have been divided into two loan
groups, designated as loan group 1 and loan group 2. Loan group 1 will consist
of 99 mortgage loans, representing 77.45% of the initial pool balance, and loan
group 2 will consist of 39 mortgage loans, representing 22.55% of the initial
pool balance. Loan group 2 includes all of the mortgage loans that are secured
by mortgage liens on multifamily properties, and loan group 1 includes all of
the mortgage loans that are not otherwise included in loan group 2.
The borrowers make payments of interest and principal to the servicer. The
servicer will deduct its servicing fee and send the remainder to the trustee.
After deducting its trustee fee, the trustee will distribute the remaining
amount, up to the available distribution amount to the certificateholders. See
"Description of the Certificates--Distributions" for a discussion of the
available distribution amount and the priorities and amounts of distributions on
the certificates.
Distributions of interest and principal generally are not made to a class of
certificates if its certificate balance has been reduced to zero. Realized
losses or additional trust fund expenses allocated to reduce the certificate
balance of a class of certificates may be reimbursed if the available
distribution amount is sufficient. Because payments are made to classes of
certificateholders in the order of their established payment priorities, there
may not be sufficient funds to make the payments described above after
distributions to classes of certificates with a higher priority. Funds may be
insufficient if the trust experiences realized losses, incurs unanticipated
expenses or an appraisal reduction event occurs.
On any given distribution date, there may be insufficient payments received from
the mortgage loans for all classes of certificates to receive the full amount of
interest due on that date. Those certificates that do not receive their full
interest distributions on any distribution date will be entitled to receive the
shortfall in each month thereafter up to the aggregate amount of the shortfall,
in the same priority as their distribution of interest. However, there will be
no extra interest paid to make up for such delay in distribution of interest.
The amount of interest distributed on each class on each distribution date
generally will equal:
o 1/12th of the pass-through rate for that class
multiplied by
o the related class certificate balance or class notional amount.
See "Description of the Certificates--Distributions" in this prospectus
supplement.
SUBORDINATION
The senior certificates will receive all distributions of interest and principal
before the subordinate certificates are entitled to receive distributions of
interest or principal. This subordination of the subordinate certificates to the
senior certificates provides credit support to the senior certificates.
Similarly, each class of subordinate certificates will provide credit support to
the subordinate certificates with earlier alphabetical class designations.
ALLOCATION OF LOSSES AND EXPENSES
A loss is realized on a mortgage loan when the servicer determines that it has
received all amounts it expects to receive from the mortgage loan and that
amount is less than the outstanding principal balance on the loan plus accrued
and unpaid interest.
An additional trust fund expense is an expense incurred by the trust that is not
covered by a corresponding payment from a borrower. Additional trust fund
expenses include, among other things:
o special servicing compensation;
o interest on advances made by the servicer;
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o extraordinary expenses, such as indemnification and reimbursements paid to
the trustee; and
o loan-specific expenses incurred because of defaults on mortgage loans or
to remediate environmental conditions on mortgaged properties.
Losses and additional trust fund expenses will be allocated to the certificates
by deducting those losses from the certificate balances of the certificates
without making any payments to the certificateholders. In general, losses and
additional trust fund expenses are allocated if the aggregate outstanding
principal balance of the mortgage loans immediately following the distributions
to be made on the certificates on any distribution date is less than the
aggregate outstanding certificate balance of the certificates. If this happens,
the certificate balances of the certificates will be reduced as shown in the
following chart:
Step 1
Reduce the certificate balances of the Class M,
Class L, Class K, Class J, Class H, Class G, Class F, Class E, Class D,
Class C and Class B certificates to zero, in that order
[GRAPHIC OMITTED]
Step 2
Reduce the certificate balances of the
Class A-1-a, Class A-1-b and Class A-2 certificates
on a pro rata basis to zero
A deficit may result from losses incurred on the mortgage loans and additional
trust fund expenses of the trust. Reductions in the certificate balances of the
certificates as a result of the allocation of losses and trust fund expenses
will also have the effect of reducing the notional amount of the Class X
certificates.
For a detailed description of the allocation of losses and trust fund expenses
among the certificates, see "Description of the Certificates--Subordination;
Allocation of Losses and Expenses" in this prospectus supplement.
ADVANCES
For any month, if the servicer receives a payment on a mortgage loan that is
less than the full scheduled payment, or if no payment is received at all, the
servicer will advance its own funds to cover that shortfall. However, the
servicer will make an advance only if it determines that the advance will be
recoverable from future payments or collections on that mortgage loan.
The servicer will not be required to advance the amount of any delinquent
balloon payment or any default interest or excess interest that may be due on
any ARD loan. If the servicer fails to make a required advance, the trustee will
be required to make that advance only if it determines that the advance will be
recoverable from future payments or collections on that mortgage loan.
The servicer and the trustee each will be entitled to interest on any advances
of monthly payments made by it and certain advances of servicing expenses
incurred by it or on its behalf with limited exception. See "Description of the
Certificates--P&I Advances" in this prospectus supplement and "Description of
the Certificates--Advances in Respect of Delinquencies" and "The Pooling and
Servicing Agreements--Certificate Account" in the prospectus.
OPTIONAL TERMINATION
If the remaining aggregate principal balance of the mortgage pool is less than
1% of the initial pool balance on any distribution date, the servicer or the
depositor may, but are not required to, purchase all of the mortgage loans. If
the servicer or depositor does purchase the loans, the outstanding principal
balance of the certificates will be paid in full, together with accrued
interest. See "Description of the Certificates--Certificate Balances and
Notional Amounts" and "--Termination; Retirement of Certificates."
BOOK-ENTRY REGISTRATION
Generally, the offered certificates will be available only in book-entry form
through the facilities of The Depository Trust Company in the United States or
through Cedelbank or the Euroclear System in Europe. See "Description of the
Certificates--Book-Entry Registration of the Offered Certificates" and Annex D
in this prospectus supplement and "Description of the Certificates--Book-Entry
Registration and Definitive Certificates" in the prospectus.
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<PAGE>
DENOMINATIONS
The offered certificates other than the Class X certificates are offered in
minimum denominations of $25,000 each and multiples of $1 in excess thereof. The
Class X certificates are offered in minimum denominations of $1,000,000 initial
notional amount each and multiples of $1 in excess thereof.
YIELD AND PREPAYMENT CONSIDERATIONS
The yield to maturity of each class of certificates will depend upon:
o the purchase price of the certificates;
o the applicable pass-through rate;
o the characteristics of the mortgage loans; and
o the rate and timing of payments on the mortgage loans.
The interest only certificates and the subordinate certificates will be
especially sensitive to the rate of prepayments. For a discussion of special
yield and prepayment considerations applicable to these classes of certificates,
see "Risk Factors" and "Yield and Maturity Considerations" in this prospectus
supplement.
LEGAL INVESTMENT
At the time of their issuance, any of the offered certificates rated in the
category of "AAA" or "AA" or the equivalent by at least one rating agency will
be "mortgage related securities" and all other offered certificates will not be
"mortgage related securities" for purposes of the Secondary Mortgage Market
Enhancement Act of 1984. See "Legal Investment" in this prospectus supplement
for important information concerning possible restrictions on ownership of the
offered certificates by regulated institutions. You should consult your own
legal advisors in determining the extent to which the offered certificates
constitute legal investments for you.
ERISA CONSIDERATIONS
Subject to important considerations described under "ERISA Considerations" in
this prospectus supplement and in the accompanying prospectus, the senior
certificates may be eligible for purchase by persons investing assets of
employee benefit plans or individual retirement accounts. The other offered
certificates may not be sold to such plans and accounts except as may be
permitted under a prohibited transaction class exemption available to certain
insurance companies using general account assets.
TAX STATUS
The certificates (other than the residual certificates) will generally be
treated as debt for federal income tax purposes. Certificateholders (other than
holders of residual certificates) will be required to include in their income
all interest and original issue discount with respect to such debt in accordance
with the accrual method of accounting regardless of the certificateholders'
usual methods of accounting.
For federal income tax purposes, elections will be made to treat the asset pools
that make up the trust as three separate real estate mortgage investment
conduits. Except to the extent they represent the right to excess interest, the
certificates (other than the residual certificates) will represent ownership of
regular interests in one of these real estate mortgage investment conduits. For
federal income tax purposes, the residual certificates will be the residual
interests in the pool.
For further information regarding the federal income tax consequences of
investing in the offered certificates, see "Federal Income Tax Consequences" in
this prospectus supplement and in the accompanying prospectus.
RATINGS
The offered certificates are required to receive ratings from Fitch IBCA, Inc.
("Fitch") and Moody's Investors Service, Inc. ("Moody's") that are not lower
than those indicated under "Transaction Overview." The ratings on the offered
certificates address the likelihood that the holders of offered certificates
will receive timely distributions of interest and the ultimate repayment of
principal before the rated final distribution date that occurs in July, 2032. A
security rating is not a recommendation to buy, sell or hold a security and is
subject to change or withdrawal at any time by the assigning rating agency. The
ratings do not address the likelihood that holders will receive any
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<PAGE>
prepayment premiums, default interest or excess interest. The ratings also do
not address the tax treatment of payments on the certificates or the likely
actual rate of prepayments. The rate of prepayments, if different than
originally anticipated, could adversely affect the yield realized by holders of
the offered certificates or cause the Class X certificateholders to fail to
recover their initial investment.
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<PAGE>
RISK FACTORS
The offered certificates are not suitable investments for all investors. In
particular, you should not purchase any class of offered certificates unless you
understand and are able to bear the risks associated with that class.
The offered certificates are complex securities and it is important that
you possess, either alone or together with an investment advisor, the expertise
necessary to evaluate the information contained in this prospectus supplement
and the accompanying prospectus in the context of your financial situation.
ALLOCATIONS OF LOSSES ON If losses on the mortgage loans are allocated
THE MORTGAGE LOANS WOULD to your class of certificates, the amount
REDUCE YOUR PAYMENTS AND payable to you will be reduced by the amount
YIELD ON YOUR CERTIFICATES of these losses and the yield to maturity on
your certificates will be reduced. Losses
allocated to a class reduce the principal
balance of the class without making a payment
to the class.
Because losses on the mortgage loans, together
with expenses relating to defaulted mortgage
loans, will be allocated first to the most
subordinated class of subordinated certificates
with a positive balance, the yields on the
subordinate certificates will be extremely
sensitive to losses on the mortgage loans.
If the principal balance of all of the
subordinate certificates has been reduced to
zero due to losses on and expenses of defaulted
mortgage loans, these losses and expenses will
be allocated pro rata to the Class A-1-a, A-1-b
and A-2 certificates.
Reductions in the principal balance of any class
reduce the notional amount of the Class X
certificates by a corresponding amount,
resulting in smaller interest distributions to
the Class X certificateholders.
See "Description of the Certificates
--Subordination; Allocation of Losses and
Expenses" in this prospectus supplement.
DELINQUENCIES, LOSSES AND The yield to maturity on the certificates will
PREPAYMENTS ON THE depend significantly on the rate and timing of
MORTGAGE LOANS WILL AFFECT payments of principal and interest on
THE YIELD ON THE the certificates. The rate and timing of
CERTIFICATES principal and interest payments on the mortgage
loans, including the rates of delinquency, loss
and prepayment, will affect the rate and timing
of payments of principal and interest on the
certificates. For a discussion of the impact on
the yields of the certificates of the rate of
delinquency, loss and prepayment on the mortgage
rates and factors that affect those rates, see
"Yield and Maturity Considerations" and
"Description of the Certificates--Subordination;
Allocation of Losses and Expenses" in this
prospectus supplement and "Risk Factors--Yield
and Prepayment Considerations" in the
prospectus. For a description of prepayment
restrictions on the mortgage loans, see
"Description of the Mortgage Pool--Defeasance"
and "--Prepayment Provisions."
THE MORTGAGE LOANS ARE None of the mortgages are insured or guaranteed
NOT INSURED by the United States, any governmental entity or
instrumentality, by any private mortgage insurer
or by the depositor, the underwriters, the
servicer, the sellers or the trustee. Therefore,
you should
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<PAGE>
consider payment on each mortgage loan to depend
exclusively on the borrower and any guarantor
under the particular mortgage loan documents.
CONFLICTS OF INTEREST An affiliate of the servicer expects to acquire
MAY OCCUR WHEN some of the subordinate certificates including
CERTIFICATEHOLDERS OF a portion of the Class M certificates.
VARIOUS CLASSES HAVE The affiliate's ownership of certificates could
DIFFERING INTERESTS cause a conflict between the servicer's duties
as servicer and its affiliate's interest as a
holder of a certificate, especially if actions
would have a disproportionate effect on one or
more classes of certificates. One action over
which the servicer has considerable latitude is
determining whether to liquidate or modify
defaulted mortgage loans. The servicer may also
waive provisions in ARD loans that would require
the payment of excess interest or the
replacement of the property manager if the loan
is not paid on the anticipated repayment date.
In addition, under certain circumstances, the
certificateholders representing more than 50% of
the voting rights allocated to a specified class
may terminate the rights and obligations of the
servicer to service specially serviced mortgage
loans and properties acquired through
foreclosure and appoint a replacement to perform
these duties. The servicer's affiliate may hold
more than 50% of the voting rights allocated to
that specified class. As a result, the interests
of the servicer's affiliate may conflict with
those of other certificateholders that desire to
replace the servicer of specially serviced
mortgage loans and foreclosure properties.
The servicer is, however, required to administer
the mortgage loans in accordance with the
servicing standards without regard to its
ownership of any certificate.
See "Servicing of the Mortgage
Loans--Termination of the Servicer with Respect
to Specially Serviced Mortgage Loans and REO
Properties" and "Servicing of the Mortgage
Loans--Modifications, Waivers, Amendments and
Consents" in this prospectus supplement.
ADVERSE ENVIRONMENTAL The trust could become liable for a material
CONDITIONS MAY adverse environmental condition at a mortgaged
REDUCE OR DELAY YOUR property. Any such potential liability could
PAYMENTS reduce or delay payments to certificateholders.
"Phase I" environmental assessments have been
performed on all of the mortgaged properties.
None of the environmental assessments revealed
material adverse environmental conditions or
circumstances affecting any mortgaged property,
except those cases:
o in which the adverse conditions were
remediated or abated before the date of
issuance of the certificates;
o in which an operations and maintenance plan
or periodic monitoring of the mortgaged
property or nearby properties was recommended;
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<PAGE>
o involving a leaking underground storage tank
or groundwater contamination at a nearby
property that had not yet materially affected
the mortgaged property and for which a
responsible party either has been identified
under applicable law or was then conducting
remediation of the related condition;
o 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;
o involving radon; or
o in which the related borrower has agreed to
seek a "case closed" status for the issue from
the applicable governmental agency.
To decrease the likelihood of any environmental
liability against the trust, the servicer is
required to obtain a satisfactory environmental
site assessment of a mortgaged property and see
that any required remedial action is taken
before acquiring title or assuming its
operation.
See "Description of the Mortgage
Pool--Underwriting Matters--Environmental
Assessments" in this prospectus supplement and
"The Pooling and Servicing
Agreements--Realization upon Defaulted Mortgage
Loans" and "Legal Aspects of Mortgage
Loans--Environmental Considerations" in the
prospectus.
GEOGRAPHIC CONCENTRATION The five states with the highest concentration
MAY INCREASE REALIZED of mortgage loans secured by
LOSSES ON THE MORTGAGE mortgaged properties are listed in the table
LOANS titled "Geographic Concentrations" on page S-7.
Any deterioration in the real estate market or
economy or events in that state or region,
including earthquakes, hurricanes and other
natural disasters, may increase realized losses
on the mortgage loans in the trust.
In addition, improvements on mortgaged
properties located in California may be more
susceptible to earthquakes than properties
located in other parts of the country.
Generally, the mortgaged properties are not
insured for earthquake or hurricane risk. If
mortgaged properties are insured, they may be
insured for amounts less than the outstanding
principal balances of the related mortgage
loans.
THE MORTGAGE LOANS ARE All of the mortgage loans are non-recourse
NON-RECOURSE LOANS loans. If a borrower defaults on such a loan,
only the mortgaged property, and not the other
assets of the borrower, is available to satisfy
the debt. Even if the mortgage loan documents
permit recourse to the borrower or a guarantor,
the trust may not be able to ultimately collect
the amount due under that mortgage loan.
Consequently, before maturity, you should
consider payment on each mortgage loan to depend
primarily on the sufficiency of the cash flow of
the mortgaged property. At scheduled maturity or
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<PAGE>
upon acceleration of maturity after a default,
payment depends primarily on the market value of
the mortgaged property or the ability of the
borrower to refinance the mortgaged property.
THE SELLER OF A MORTGAGE The seller of a mortgage loan will be the only
LOAN IS THE ONLY PERSON person making representations and warranties on
MAKING REPRESENTATIONS that mortgage loan. Neither the depositor nor
AND WARRANTIES any of its affiliates will be obligated to
ON THAT MORTGAGE LOAN repurchase a mortgage loan upon a breach of a
seller's representations and warranties or any
document defects if the applicable seller
defaults on its repurchase obligation. The
applicable seller may not have the financial
ability to effect these repurchases. See
"Description of the Mortgage Pool--Assignment of
the Mortgage Loans; Repurchases and
Substitutions" and "--Representations and
Warranties; Repurchases and Substitutions" in
this prospectus supplement.
BALLOON PAYMENTS MAY 109 mortgage loans, which represent 62.52% of
INCREASE LOSSES ON the initial pool balance, require balloon
ON THE MORTGAGE LOANS payments at their stated maturity.These
AND EXTEND THE mortgage loans involve a greater degree of
WEIGHTED AVERAGE LIFE risk than fully amortizing loans, because the
OF YOUR CERTIFICATE ability of a borrower to make a balloon payment
typically depends on its ability to refinance
the mortgage loan or sell the mortgaged
property.
A borrower's ability to repay a loan on its
stated maturity date will depend upon its
ability either to refinance the loan or to sell
the mortgaged property at a price sufficient to
permit repayment. A borrower's ability to
achieve either of these goals will be affected
by a number of factors, including:
o the availability of, and competition for,
credit for commercial or multifamily real
estate projects, which fluctuate over time;
o the prevailing interest rates;
o the fair market value of the related
properties;
o the borrower's equity in the related
properties;
o the borrower's financial condition;
o the operating history and occupancy level
of the property;
o the tax laws; and
o prevailing general and regional economic
conditions.
Any delay in collection of a balloon payment
that otherwise would be distributable to a
class, whether the delay is due to borrower
default or to modification of the mortgage loan
by the servicer, is likely to extend the
weighted average life of that class.
See "Servicing of the Mortgage
Loans--Modifications, Waivers, Amendments and
Consents," "Description of the Mortgage
Pool--Balloon Loans," and "Yield and Maturity
Considerations" in this prospectus supplement
and "Risk Factors--Investment in Commercial and
Multifamily Mortgage Loans" and "Yield and
Maturity Considerations" in the prospectus.
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<PAGE>
IF BORROWERS DO NOT MAKE 28 of the mortgage loans, which represent
ARD PAYMENTS, THE WEIGHTED 37.35% of the initial pool balance, are
AVERAGE LIFE OF ARD loans. "ARD loans" have anticipated repayment
YOUR CLASS OF dates prior to their maturity dates. The failure
CERTIFICATES MAY BE of a borrower to prepay an ARD loan before its
EXTENDED anticipated repayment date will likely
extend the weighted average life of any class of
offered certificates that would receive a
distribution of the prepayment. The ability of a
borrower to prepay an ARD loan before or at its
anticipated repayment date typically depends on
its ability to either refinance the loan or to
sell the mortgaged property. The provisions for
accelerated amortization and a higher interest
rate after the anticipated repayment date of an
ARD loan are intended to provide a borrower with
an incentive to pay the mortgage loan in full on
or before its anticipated repayment date, but
this incentive may not be sufficient. To the
extent the borrower on an ARD loan makes
payments of interest accrued at a rate of
interest higher than the normal mortgage
interest rate, the excess interest will be
distributed to the holders of the Class M
certificates. See "Description of the Mortgage
Pool--Terms and Conditions of the Mortgage
Loans--ARD Loans" and "Risk Factors-- Conflicts
of interest may occur when certificateholders of
various classes have differing interests" in
this prospectus supplement.
RISKS PARTICULAR TO RETAIL
PROPERTIES:
A SIGNIFICANT TENANT 34 mortgaged properties, securing mortgage loans
CEASING TO OPERATE AT that represent 30.44% of the initial pool
A RETAIL PROPERTY COULD balance, are retail properties.
ADVERSELY AFFECT ITS
VALUE AND CASH FLOW 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 some
component of the total rent paid by retail
tenants may be tied to a percentage of gross
sales. Significant tenants or anchor 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 that property. Some tenants at retail
properties may be entitled to terminate their
leases or pay reduced rent if an anchor tenant
ceases operations at that property. If anchor
stores in a mortgaged property were to close,
the borrower may be unable to replace those
anchor tenants in a timely manner or without
suffering adverse economic consequences. A
retail "anchor tenant" is generally understood
to be a tenant that is larger in size and is
important in attracting customers to a retail
property, whether or not it is located on the
mortgaged property.
A significant tenant ceasing to do business at a
retail property could result in realized losses
on the mortgage loans. The loss of a significant
tenant may be the result of the tenant's
voluntary decision not to renew a lease, the
bankruptcy or insolvency of the tenant, the
tenant's general cessation of business
activities or for other reasons. There is no
guarantee that any tenants will continue to
occupy space in the related retail property.
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<PAGE>
These risks may be increased when the property
is a single tenant property. For a description
of risk factors relating to single tenant
properties, see "--Losses may be caused by
tenant credit risk on the mortgage loans" below.
RETAIL PROPERTIES ARE Retail properties are particularly vulnerable to
VULNERABLE TO CHANGES changes in consumer preferences and market
IN CONSUMER PREFERENCES demographics that could relate to:
o adverse changes in consumer spending
patterns;
o local competitive conditions (such as an
increased supply of retail space or the
construction of other shopping centers);
o the attractiveness of the properties and
the surrounding neighborhood to tenants and
their customers;
o the public perception of the safety of the
neighborhood; and
o the need to make major repairs or
improvements to satisfy major tenants.
COMPETITION FROM Retail properties face competition from sources
ALTERNATIVE RETAIL outside a given real estate market. Catalogue
DISTRIBUTION CHANNELS MAY retailers, home shopping networks, the
ADVERSELY AFFECT THE internet, telemarketing and outlet centers all
VALUE AND CASH FLOW FROM compete with more traditional retail properties
RETAIL PROPERTIES for consumer dollars. Continued growth of these
alternative retail outlets that often are
characterized by lower operating costs could
adversely affect the rents collectible at the
retail properties which secure mortgage loans
in the trust and result in realized losses on
the mortgage loans.
RISKS PARTICULAR TO OFFICE
PROPERTIES:
ECONOMIC DECLINE IN 36 mortgaged properties, securing mortgage loans
TENANT BUSINESSES OR that represent 27.95% of the initial pool
CHANGES IN DEMOGRAPHIC balance, are office properties.
CONDITIONS COULD
ADVERSELY AFFECT THE Economic decline in the businesses operated
VALUE AND CASH FLOW by the tenants of office properties may
FROM OFFICE PROPERTIES increase the likelihood that a tenant may be
unable to pay its rent, which could result
in realized losses on the mortgage loans.
For a description of risk factors relating
to single tenant properties, see "--Losses
may be caused by tenant credit risk on the
mortgage loans" below. A number of other
economic and demographic factors may
adversely affect the value of office
properties, including:
o the quality of the tenants in the building;
o the physical attributes of the building in
relation to competing buildings;
o access to transportation;
o whether tax benefits are available;
o the strength and stability of businesses
operated by the tenant or tenants;
o the desirability of the location for
business; and
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<PAGE>
o the cost of refitting office space for a new
tenant (which is often significantly higher
than the cost of refitting other types of
properties for new tenants).
These risks may be increased if revenue depends
on a single tenant or if there is a significant
concentration of tenants in a particular
business or industry. See "--A significant
tenant ceasing to operate at a retail property
could adversely affect its value and cash flow"
below.
COMPETITION WITH OTHER Office properties are subject to competition
OFFICE PROPERTIES COULD with other office properties in the same market.
ALSO ADVERSELY AFFECT A decrease in occupancy resulting from
THE VALUE AND CASH FLOW competition could result in realized losses on
FROM OFFICE PROPERTIES the mortgage loans. Competition is affected by
a property's age, condition, design, such as
floor sizes and layout, location, access to
transportation and ability to offer amenities to
its tenants including sophisticated building
systems, such as fiber optic cables, satellite
communications or other base building
technological features.
RISKS PARTICULAR TO
MULTIFAMILY PROPERTIES:
REDUCTIONS IN 55 mortgaged properties, securing mortgage loans
OCCUPANCY AND RENT that represent 22.55% of the initial pool
LEVELS ON MULTIFAMILY balance, are multifamily rental properties. A
PROPERTIES COULD decrease in occupancy or rent levels could
ADVERSELY AFFECT result in realized losses on
THEIR VALUE AND CASH the mortgage loans. Occupancy and rent levels on
FLOW multifamily properties may be adversely affected
by:
o local, regional or national economic
conditions, which may limit the amount of rent
that can be charged for rental units or result
in a reduction in timely rent payments or a
reduction in occupancy levels;
o construction of additional housing units in
the same market which may compete for
tenants;
o local military base closings;
o developments at local colleges and
universities;
o national, regional and local politics,
including, in the case of multifamily rental
properties, current or future rent
stabilization and rent control laws and
agreements;
o the level of mortgage interest rates, which
may encourage tenants in multifamily rental
properties to purchase housing; and
o lack of amenities, unattractive physical
attributes or bad reputation of the mortgaged
property.
RESTRICTIONS IMPOSED ON Multifamily properties may be subject to tax
MULTIFAMILY PROPERTIES BY credit, and city, state and federal housing
GOVERNMENT PROGRAMS COULD subsidies or similar programs. The limitations
ALSO ADVERSELY AFFECT and restrictions imposed by these programs could
THEIR VALUE AND CASH FLOW result in realized losses on the mortgage loans.
The limitations and restrictions include:
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<PAGE>
o rent limitations that could adversely affect
the ability of borrowers to increase rents to
maintain the condition of their mortgaged
properties; and
o tenant income restrictions that may reduce
the number of eligible tenants in those
mortgaged properties and result in a reduction
in occupancy rates.
The differences in rents between subsidized or
supported properties and other multifamily
rental properties in the same area may not be a
sufficient economic incentive for some eligible
tenants to reside at a subsidized or supported
property that may have fewer amenities or be
less attractive as a residence.
RISKS PARTICULAR TO
HOSPITALITY PROPERTIES:
REDUCTIONS IN ROOM RATES 25 mortgaged properties, securing mortgage loans
OR OCCUPANCY AT A that represent 9.19% of the initial pool
HOSPITALITY PROPERTY balance, are hospitality properties. A decrease
COULD ADVERSELY AFFECT in room rates or occupancy at hospitality
ITS VALUE AND CASH FLOW properties could result in realized losses on
the mortgage loans. Room rates and occupancy
levels may depend upon the following factors:
o The proximity of a hospitality property to
major population centers or attractions.
o Adverse local, regional or national economic
conditions or the construction of competing
hospitality properties. 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.
o A hospitality property's ability to attract
customers and a portion of its revenues may
depend on its having a liquor license. A
liquor license may not be transferable if a
foreclosure on the related mortgaged property
occurs.
o In many parts of the country the hotel and
lodging industry is generally seasonal in
nature. This seasonality will cause periodic
fluctuations in room and other revenues,
occupancy levels, room rates and operating
expenses.
o The viability of hospitality properties that
are franchisees of national or regional hotel
chains depends in large part on the continued
existence and financial strength of the
franchisor. The public perception of the
franchise service mark and the duration of the
franchise license agreement are also
important. If the franchisee defaults on its
debt, the trustee may be unable to use the
franchise license without the consent of the
franchisor due to restrictions on transfers
imposed by the franchise license agreements.
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<PAGE>
RISKS PARTICULAR TO
INDUSTRIAL PROPERTIES:
CHANGES IN ECONOMIC 21 mortgaged properties, securing mortgage loans
AND DEMOGRAPHIC that represent 8.60% of the initial pool
CONDITIONS COULD balance, are industrial properties.
ADVERSELY AFFECT THE
VALUE AND CASH FLOW The risks of economic decline in the
FROM INDUSTRIAL businesses operated by the tenants of
PROPERTIES industrial properties are similar in both
office properties and industrial properties,
although industrial properties may be more
dependent on a single tenant. Six of the
mortgage loans representing 4.56% of the
initial pool balance are secured by single
tenant industrial properties. For a
description of risk factors relating to
office properties, see "--Economic decline
in tenant businesses or changes in
demographic conditions could adversely
affect the value and cash flow from office
properties," and for a description of risk
factors relating to single tenant
properties, see "--Losses may be caused by
tenant credit risk on the mortgage loans"
below.
RESTRICTIONS IMPOSED BY Site characteristics at industrial properties
SITE CHARACTERISTICS may impose restrictions that could cause
AND INCREASED realized losses on the mortgage loans. Site
ENVIRONMENTAL RISKS characteristics which affect the value of an
COULD ALSO ADVERSELY industrial property include:
AFFECT THE VALUE AND
CASH FLOW FROM o clear heights;
INDUSTRIAL PROPERTIES
o column spacing;
o zoning restrictions;
o number of bays and bay depths;
o divisibility;
o truck turning radius; and
o overall functionality and accessibility.
An industrial property requires availability of
labor sources, proximity to supply sources and
customers, and accessibility to rail lines,
major roadways and other distribution channels.
Properties used for many industrial purposes are
more prone to environmental concerns than other
property types.
LOSSES MAY BE CAUSED Tenant credit risk could reduce cash flow or
BY TENANT CREDIT value of a mortgaged property if tenants were
RISK ON THE MORTGAGE unable to meet their lease obligations or
LOANS became insolvent.
o If tenant sales in retail properties decline,
rents based on sales also will decline, and
tenants may be unable to pay their rent or
other occupancy costs. If a tenant defaults,
the borrower may experience delays and costs
in enforcing the lessor's rights.
o If a significant tenant were to become
insolvent and subject to any bankruptcy or
similar law, the collection of rental payments
could be interrupted and foreclosure on the
mortgaged property made more difficult.
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These risks may be increased when the property
is a single tenant property or is leased to
relatively few tenants. Nine of the mortgage
loans representing 5.29% of the initial pool
balance are secured by single tenant properties.
LOSSES MAY BE CAUSED The income from and market value of retail,
BY THE EXPIRATION OF office and industrial properties would decline
OR TENANT DEFAULTS if space leases expired or tenants defaulted
ON LEASES and the borrowers were unable to renew the
leases or relet the space on comparable terms.
See "Annex A" for information regarding the
expiration of leased space for certain
mortgaged properties. Even if borrowers
successfully relet vacated space, the costs
associated with reletting, including tenant
improvements, leasing commissions and free rent,
can exceed the amount of any reserves maintained
for that purpose and reduce cash flow from the
mortgaged properties. Although many of the
mortgage loans require the borrower to maintain
escrows for leasing expenses, there is no
guarantee that these reserves will be
sufficient. See "Annex A--Characteristics of the
Mortgage Loans--Certain Replacement Reserves and
Tenant Improvement and Leasing Commission
Reserves" for information regarding certain of
these reserves.
TENANT BANKRUPTCY The bankruptcy or insolvency of a major tenant
ENTAILS RISKS (such as an anchor tenant), or a number of
smaller tenants, may adversely affect the income
produced by a mortgaged property. Under the
federal bankruptcy code, a tenant has the option
of assuming or rejecting any unexpired lease. If
the tenant rejects the lease, the landlord's
claim for breach of the lease would be a general
unsecured adversely affect the income claim
against the tenant (unless collateral secures
the claim). The claim would be limited to the
unpaid rent reserved under the lease for the
periods prior to the bankruptcy petition or
earlier surrender of the leased premises that
are unrelated to the rejection, plus the greater
of one year's rent or 15% of the remaining
reserved rent (but not more than three years'
rent). Even if provisions in the lease prohibit
assignment, in a bankruptcy, the tenant may
assign the lease to another entity that could be
less creditworthy than the tenant may have been
at the time of origination of the mortgage loan.
See "Certain Legal Aspects of Mortgage Loans" in
the prospectus.
LOSSES MAY BE CAUSED Losses may be realized on the mortgage loans if
BY INADEQUATE property management is inadequate. The property
PROPERTY MANAGEMENT manager is responsible for the following
activities:
o responding to changes in the local market;
o planning and implementing the rental
structure, including establishing levels of
rent payments; and
o ensuring that maintenance and capital
improvements are carried out in a timely
fashion.
Sound property management controls costs,
provides appropriate service to tenants and
ensures that improvements are maintained. Sound
property management can also maintain cash flow,
reduce vacancy, leasing and repair costs and
preserve
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building value. Property management errors can
impair the long-term viability of a real estate
project and may result in losses.
CONFLICTS OF INTERESTS Losses may result if the managers of mortgaged
BETWEEN PROPERTY properties and the borrowers experience
MANAGERS AND OWNERS conflicts of interest in the management
MAY RESULT IN LOSSES or ownership of mortgaged properties. These
conflicts of interests may exist because:
o the mortgaged properties may be managed by
property managers affiliated with the
borrowers;
o the mortgaged properties may be managed by
property managers who also manage other
properties that compete with the mortgaged
properties; and
o affiliates of the managers or the borrowers,
or the managers and/or the borrowers
themselves, may also own other properties,
including competing properties.
LOSSES MAY RESULT IF An appraisal was conducted for each mortgaged
THE SERVICER IS UNABLE property, and the loan-to-value ratios as of
TO SELL A MORTGAGED the cut-off date referred to in this prospectus
PROPERTY FOR ITS supplement are based on the appraisals.
APPRAISED VALUE Appraisals, however, are not guarantees of
present or future value, and the servicer may
be unable to sell a mortgaged property for its
appraised value. Appraisals seek to establish
the amount a typically motivated buyer would pay
a typically motivated seller. This amount could
be significantly higher than the amount obtained
from the sale of a mortgaged property under a
distress or liquidation sale.
Appraisals are estimates of value at the time of
the appraisal based on the analysis and opinion
of the appraiser. The values of the mortgaged
properties may have changed significantly since
the appraisal was performed. Generally,
appraisals have not been updated since the
mortgage loan was originated.
SUBORDINATE FINANCING Four of the mortgage loans representing 3.54% of
ON THE MORTGAGED the initial pool balance have mortgaged
PROPERTY MAY INCREASE properties that are encumbered by subordinate
RISKS debt that is not part of the mortgage pool. The
existence of additional subordinate indebtedness
may adversely affect the borrower's financial
viability or the lender's security interest in
the mortgaged property and result in realized
losses because:
o refinancing the mortgage loan at maturity for
the purpose of making any balloon payments may
be more difficult;
o reduced cash flow could result in deferred
maintenance; and
o if the holder of the subordinated debt files
for bankruptcy or is placed in involuntary
receivership, foreclosing on the mortgaged
property could be delayed.
The holder of any material subordinate debt on
the mortgaged properties has agreed not to
foreclose for so long as the mortgage loan is
outstanding and the trust is not pursuing a
foreclosure action. Substantially all of the
mortgage loans either
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prohibit the borrower from encumbering the
mortgaged property with additional secured debt
or require the consent of the holder of the
first lien before so encumbering the mortgaged
property. A violation of this prohibition,
however, may not become evident until the
mortgage loan otherwise defaults. For a
description of subordinate debt relating to the
mortgaged properties, see "Description of the
Mortgage Pool--Secured Subordinate Financing" in
this prospectus supplement.
MEZZANINE DEBT SECURED The direct parents the borrowers have pledged
BY EQUITY IN THE their equity interest in the borrower to secure
BORROWER MAY INCREASE mezzanine debt incurred by the parent. However,
RISK the existence of this indebtedness could
adversely affect the financial viability of such
borrower or the value of the equity in the
borrower held by the sponsoring entities of the
borrower. There is a risk that any holder of
mezzanine debt may attempt to use its rights as
owner of the mezzanine loan to protect itself
against an exercise of rights by the lender
under the mortgage loan. For a description of
mezzanine debt relating to the mortgaged
properties see "Description of the Mortgage
Pool--Secured Subordinate Financing" in this
prospectus supplement.
RELATED BORROWERS MAY Some borrowers under the mortgage loans are
MAKE LOSSES ON THE affiliated or under common control with one
MORTGAGE LOANS MORE another. When borrowers are related, any adverse
SEVERE circumstances relating to one borrower or its
affiliates, and affecting one mortgage loan or
mortgaged property, also can affect the related
borrower's mortgage loans or mortgaged
properties which could make losses more severe
than would be the case if there were no related
borrowers.
For example, a borrower that owns or controls
several mortgaged properties and experiences
financial difficulty at one mortgaged property
might defer maintenance at one or more other
mortgaged properties to satisfy current expenses
of the mortgaged property experiencing financial
difficulty. Alternatively, the borrower could
attempt to avert foreclosure by filing a
bankruptcy petition. The bankruptcy or
insolvency of one borrower or its 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 those
mortgaged properties to produce sufficient cash
flow to make required payments on the mortgage
loans. See "Legal Aspects of Mortgage
Loans--Bankruptcy Laws" in the prospectus.
LARGER-THAN-AVERAGE Several mortgage loans, either individually or
BALANCE LOANS MANY together with other mortgage loans with which
MAKE LOSSES MORE SEVERE they are cross-collateralized, have outstanding
balances that are substantially higher than the
average outstanding balance. Generally, if a
mortgage pool includes loans with
larger-than-average balances, losses are likely
to be more severe, relative to the size of the
pool, than would be the case if the aggregate
balance of the pool were distributed among a
larger number of loans.
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LOSSES COULD RESULT Two mortgage loans, representing 4.21% of the
FROM LIMITATION ON initial pool balance, are cross-collateralized
ENFORCEABILITY OF with one or more other mortgage loans.
CROSS-COLLATERALIZATION 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 that borrower were to
become a debtor in a bankruptcy case resulting
in realized losses on the mortgage loans.
Generally, under federal and most state
fraudulent conveyance statutes, a lien granted
by a borrower to secure repayment of another
borrower's mortgage loan could be voided if a
court were to determine that:
(1) the 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 unable to pay its
debts as they matured; and
(2) when it allowed its mortgaged property to be
encumbered by a lien securing the entire
indebtedness represented by the other mortgage
loan, the borrower did not receive fair
consideration or reasonably equivalent value in
return.
The additional security provided by
cross-collateralization would not be available
if a court determines that the grant was a
fraudulent conveyance. See "Description of the
Mortgage Pool--Terms and Conditions of the
Mortgage Loans--Related Borrowers,
Cross-Collateralized Mortgage Loans and Mortgage
Loans Collateralized by Multiple Properties" in
this prospectus supplement.
TAX CONSIDERATIONS Payment of taxes on any net income from
RELATED TO "foreclosure property" acquired by the trust
FORECLOSURE MAY will reduce the net proceeds available for
REDUCE PAYMENTS TO distribution to certificateholders. If the trust
CERTIFICATEHOLDERS acquires a mortgaged property after a default on
the related mortgage loan under a foreclosure or
delivery of a deed in lieu of foreclosure, that
property will be considered "foreclosure
property" under the tax rules applicable to real
estate mortgage investment conduits, which are
the same rules applicable to real estate
investment trusts. It will continue to be
considered "foreclosure property" for a period
of three full years after the taxable year of
acquisition by the trust, with possible
extensions. Any net income from this
"foreclosure property," other than qualifying
"rents from real property," will subject the
real estate mortgage investment conduit
containing the mortgage loans to federal and
possibly state or local tax on that income at
the highest marginal corporate tax rate.
STATE LAW LIMITATIONS Certain jurisdictions (including California)
ON REMEDIES have laws that prohibit more than one "judicial
action" to enforce a mortgage, and some courts
have viewed the term "judicial action" broadly.
The pooling and servicing agreement will require
the servicer and any replacement special
servicer to obtain legal advice prior to
enforcing any rights under the mortgage loans
that relate to properties where the rule could
be applicable. In addition, the
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servicer and any replacement special servicer
may be required to foreclose on properties in
states where the "one action" rules apply before
foreclosing on properties located in states
where judicial foreclosure is the only permitted
method of foreclosure. See "Certain Legal
Aspects of Mortgage Loans--Foreclosure" in the
prospectus.
Because of these considerations, the ability of
the servicer and any replacement special
servicer to foreclose on the mortgage loans may
be limited by the application of state laws.
Such actions could also subject the trust to
liability as a "mortgagee-in-possession" or
result in equitable subordination of the claims
of the trustee to the claims of other creditors
of the borrower. The servicer will be required
to consider these factors in deciding what
alternative to pursue after a default.
INCREASES IN GROUND 10 mortgaged properties securing mortgage loans,
RENTS FOR MORTGAGED which represent 5.23% of the initial pool
PROPERTIES MAY CAUSE balance, are subject solely to the lien of a
LOSSES mortgage on the applicable borrower's leasehold
interest under a ground lease.
Increases in ground rents may adversely affect a
borrower's ability to make payments under a
related mortgage loan and cause realized losses
on the mortgage loans. Mortgage loans secured by
leasehold interests may provide for the
resetting of ground lease rents based on factors
such as the fair market value of the related
mortgaged property or prevailing interest rates.
BANKRUPTCY RULES MAY Operation of the federal bankruptcy code and
LIMIT ABILITY OF related state laws may interfere with the
LENDER TO ENFORCE ability of a lender to foreclose upon a
REMEDIES mortgaged property and to take other actions to
enforce its remedies against the borrower or the
mortgaged property. For a description of risks
related to bankruptcy, see "Certain Legal
Aspects of Mortgage Loans--Bankruptcy Laws" in
the prospectus.
Some sponsors of borrowers or their affiliates
have in the past been subject to bankruptcy
proceedings.
THE BANKRUPTCY OF A Upon bankruptcy of a lessor or a lessee under a
LESSOR OR A LESSEE ground lease, the debtor entity has the right to
UNDER A GROUND LEASE assume and continue or reject and terminate the
COULD RESULT IN LOSSES ground lease. Section 365(h) of the federal
bankruptcy code permits a ground lessee whose
ground lease is rejected by a debtor ground
lessor to remain in possession of its leased
premises under the rent reserved in the lease
for the term, including renewals of the ground
lease. The ground lessee, however, is not
entitled to enforce the obligation of the ground
lessor to provide any services required under
the ground lease. If a ground lessee/borrower in
bankruptcy rejected any or all of its ground
leases, the leasehold mortgagee would have the
right to succeed to the ground lessee/borrower's
position under the lease only if the ground
lessor had specifically granted the mortgagee
that right. If the ground lessor and the ground
lessee/borrower are involved in concurrent
bankruptcy proceedings, the trustee may be
unable to enforce the bankrupt
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ground lessee/borrower's obligation to refuse to
treat a ground lease rejected by a bankrupt
ground lessor as terminated. If this happened, a
ground lease could be terminated notwithstanding
lender protection provisions contained therein
or in the mortgage. If the borrower's leasehold
were to be terminated after a lease default, the
leasehold mortgagee would lose its security.
Each of the ground leases related to the
mortgage loans, however, generally contains the
following protections to mitigate this risk:
o It requires the lessor to give the leasehold
mortgagee notice of lessee defaults and an
opportunity to cure them.
o It permits the leasehold estate to be
assigned to and by the leasehold mortgagee at
and after a foreclosure sale.
o It contains certain other protective
provisions typically included in a
"mortgageable" ground lease.
See "Description of the Mortgage Pool--Ground
Leases" in this prospectus supplement.
YOUR PAYMENTS MAY BE Noncompliance with zoning and building codes may
REDUCED OR DELAYED cause the borrower to experience cash flow
BY ZONING AND BUILDING delays and shortfalls that would reduce or delay
CODE NONCOMPLIANCE ON the amount of proceeds available for
THE MORTGAGED PROPERTIES distributions to certificateholders. Each seller
has taken steps to establish that the use and
operation of the mortgaged properties securing
the mortgage loans sold by it are in compliance
in all material respects with all applicable
zoning, land-use, building, fire and health
ordinances, rules, regulations, and orders.
Evidence of this compliance may be in the form
of legal opinions, certifications from
government officials, title policy endorsements
and/or representations by the related borrower
in the related mortgage loan documents. These
steps may not have revealed all possible
violations.
Some violations may exist at any particular
mortgaged property, but the seller of the
related mortgage loan generally does not
consider those 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 that may not be rebuilt to its current
state if a material casualty event occurs.
Generally, insurance proceeds would be available
for application to the mortgage loan if a
material casualty event were to occur, where the
related seller had obtained law and ordinance
insurance to protect against losses related to a
nonconforming use, or the mortgaged property, as
rebuilt for a conforming use, would generate
sufficient income to service the mortgage loan.
If a mortgaged property could not be rebuilt to
its current state or its current use were no
longer permitted due to building violations or
changes in zoning or other regulations, then the
borrower might experience cash flow delays and
shortfalls that would reduce or delay the amount
of proceeds available for distributions to
certificateholders.
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CHANGES IN CONCENTRATIONS The receipt of payments of principal, including
OF BORROWER, LOAN MAY voluntary principal prepayments, liquidation
LOAN OR PROPERTY proceeds and the repurchase prices for any
CHARACTERISTICS mortgage loans repurchased due to breaches of
CAUSE LOSSES ON THE representations or warranties or defaults, will
MORTGAGE LOANS cause changes in the relative concentrations of
properties, property characteristics, number of
borrowers and affiliated borrowers and
geographic location.
Because principal on the classes of certificates
entitled to payments of principal is payable in
the sequential order described above, the
classes that have a lower priority for the
payment of principal are relatively more likely
to be exposed to risks associated with any
changes in concentrations of borrower, loan or
property characteristics.
COMPLIANCE WITH THE If the borrower were required to pay expenses
AMERICANS WITH and fines imposed by the Americans with
DISABILITIES Disabilities Act of 1990, the amount available
ACT MAY REDUCE PAYMENTS to make payments on the mortgage loan would be
TO CERTIFICATEHOLDERS reduced. Under the Americans with Disabilities
Act, all public accommodations are required to
meet federal requirements related to access and
use by disabled persons. If the mortgaged
properties do not comply with this law, the
borrowers may be required to incur costs of
compliance. Noncompliance could result in the
imposition of fines by the federal government or
an award of damages to private litigants.
LITIGATION MAY REDUCE Legal proceedings may be pending and, from time
PAYMENTS TO to time, threatened, against the borrowers and
CERTIFICATEHOLDERS their affiliates relating to the business of the
borrowers and their affiliates, or arising out
of the ordinary course of that business. This
litigation could have a material adverse effect
on the distributions to certificateholders.
YEAR 2000 PROBLEM MAY Disruptions in the collection or distribution of
REDUCE OR DELAY receipts on the mortgage loans due to the year
COLLECTIONS AND 2000 problem could reduce or ON THE MORTGAGE
DISTRIBUTIONS LOANS delay your distributions.
OF RECEIPTS
Computer problems may arise if the servicer and
the trustee have not completed their efforts to
avoid year 2000 issues on time, or if the
computer systems of the servicer or the trustee
are not fully year 2000-ready. The "year 2000
problem" is pervasive and complex; virtually
every computer operation will be affected in
some way by the rollover of the two-digit year
value to 00. Systems that do not properly
recognize date-sensitive information when the
year changes to 2000 could generate erroneous
data or cause a system to fail.
We have been advised by each of the servicer and
the trustee that they are committed to do one of
the following:
o to implement modifications to their
respective existing systems to the extent
required to cause them to be year 2000-ready;
and/or
o acquire computer systems that are year
2000-ready in each case before January 1,
2000.
We have not, however, made any independent
investigation of the computer systems of the
servicer or the trustee.
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DESCRIPTION OF THE MORTGAGE POOL
A detailed presentation of characteristics of the mortgage loans and
mortgaged properties on an individual basis and in tabular format is presented
in Annex A.
CALCULATIONS OF INTEREST
12 of the mortgage loans, which represent 7.68% 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. 126 of the mortgage loans, which represent
92.32% of the initial pool balance, accrue interest on the basis of a 360-day
year and the actual number of days elapsed.
Five mortgage loans, which represent 11.86% of the initial pool balance,
provide for payments of interest only for up to 47 months after origination,
during which period no payments of principal are due. In addition, one mortgage
loan which represents 0.94% of the initial pool balance, provides for payments
of interest only for the full 120 month term of the mortgage loan. The amount of
the monthly payment with respect to some of these mortgage loans will be subject
to a one-time increase to permit the commencement of scheduled amortization of
such loan. No mortgage loan, other than the ARD loans, permits negative
amortization or the deferral of accrued interest.
Each mortgage loan bears interest at a mortgage rate that is fixed for the
entire remaining term of the mortgage loan, except that certain mortgage loans
will accrue interest at a revised rate if not repaid on or before their
respective anticipated repayment dates.
BALLOON LOANS
109 of the mortgage loans, which represent approximately 62.52% of the
initial pool balance, are "balloon loans" that provide for monthly payments of
principal based on amortization schedules significantly longer than the
remaining terms of those mortgage loans. In some cases, monthly payments of
principal begin after an interest-only period. As a result, a substantial
principal amount will be due and payable together with the corresponding
interest payment on each balloon loan on its maturity date, unless the borrower
prepays the balloon loan before its maturity date. One mortgage loan, which
represents approximately 0.13% of the initial pool balance, is fully amortizing.
ARD LOANS
28 of the mortgage loans, which represent approximately 37.35% of the
initial pool balance, are ARD loans that provide for changes in the accrual of
interest and the payment of principal as of their respective anticipated
repayment dates. The anticipated repayment date for each ARD loan is set forth
on Annex A to this prospectus supplement. If a borrower elects to prepay its ARD
loan in full on its anticipated repayment date, a substantial amount of
principal will be due. If a borrower does not prepay its ARD loan on or before
its anticipated repayment date, that ARD loan will bear interest at a revised
rate that will be a fixed rate per annum equal to the mortgage rate plus 2.0%
per annum. Beginning on its anticipated repayment date, "excess interest"
accrued on an ARD loan at the excess of the revised rate over the original
mortgage rate compounded as described below, will be deferred until the
principal balance of the ARD loan has been reduced to zero. If a borrower does
not prepay its ARD loan on or before its anticipated repayment date, all or a
substantial portion of the monthly cash flow from the related mortgaged property
collected after that date, other than some minimum debt service and specified
property expenses, will be applied to the payment of principal on the ARD loan
and, after its principal balance has been reduced to zero, to the payment of
accrued and unpaid excess interest.
The failure to pay excess interest will not constitute a default under such
mortgage loans before the related maturity date. Unpaid excess interest will,
except where limited by applicable law, continue to accrue interest at the
revised rate.
As of or shortly after 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 lockbox account controlled by the
servicer. From and after the anticipated repayment date, in addition to
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paying interest at the mortgage rate and principal based on the amortization
schedule, the related borrower generally will be required to apply all remaining
monthly cash flow from the related mortgaged property to pay the following
amounts in the following order of priority:
(1) payments to required escrow funds;
(2) payment of operating expenses under the terms of an annual budget
approved by the servicer;
(3 payment of approved extraordinary operating expenses or capital
expenses not a part of the approved annual budget or allotted for in
any escrow fund;
(4) principal on the mortgage loan until the principal is paid in full; and
(5) excess interest.
ARD loans generally prohibit the related borrower from prepaying the
mortgage loan before or, in some cases, until a specified date before the
anticipated repayment date. At that time, the borrower may prepay the loan, in
whole or in part, without payment of a penalty or yield maintenance in the form
of a "prepayment premium." To the extent the borrower on an ARD loan makes
payments of interest accrued at a rate of interest higher than the normal
mortgage interest rate, the excess interest will be distributed to the holders
of the Class M certificates.
LOAN PARTICIPATION INTEREST
In addition to the mortgage loans, the trust fund will also include a
participation interest in the Equity Inns mortgage loans. See "The Mortgage
Pool--Significant Mortgage Loans" in this prospectus supplement. The Equity Inns
loan participation, representing 4.21% of the initial pool balance, is one of
two 50% participation interests in the two Equity Inns mortgage loans that are
not included in the trust fund. The other 50% participation interest in the
Equity Inns mortgage loans is held by GMACCM.
The Equity Inns loan participation included in the trust fund and the other
participation interest were created under a participation agreement among the
depositor, as the owner of the Equity Inns mortgage loans, the trustee, as
custodian, and GMACCM. Under the mortgage loan purchase agreement to which it is
a party, GMACCM sold the Equity Inns loan participation to the depositor which
in turn transferred it to the trust fund. The terms of the participation
agreement provide that GMACCM will act as servicer and special servicer of the
Equity Inns mortgage loans on behalf of the holders of each participation
interest and will service the loans in accordance with the servicing standard
and provisions of the pooling and servicing agreement unless continuing to act
as servicer would cause any rating agency to withdraw, downgrade or qualify any
ratings then assigned to the certificates. If the servicer is terminated in
accordance with the pooling and servicing agreement, GMACCM will continue to act
as primary servicer of the Equity Inns mortgage loans. If, however, a
replacement special servicer is appointed in accordance with the pooling and
servicing agreement, that replacement special servicer will act as special
servicer of the Equity Inns mortgage loans. See "Servicing of the Mortgage
Loans-Termination of the Servicer with respect to Specially Serviced Mortgage
Loans and REO Properties."
All payments and other amounts received in respect of the Equity Inns
mortgage loans will be distributed in respect of each of the participation
interests on a pro rata basis according to their relative participation
interests.
Any P&I advances made by the servicer or the trustee under the pooling and
servicing agreement for the Equity Inns mortgage loans will be made only with
respect to the portion of the delinquent payments on the Equity Inns mortgage
loans to which the Equity Inns loan participation is entitled. The reimbursement
of any such advance, together with interest thereon, will be made in accordance
with the terms and conditions of the pooling and servicing agreement.
Subject to the terms and conditions of the pooling and servicing agreement,
the servicer will make servicing advances for the entire Equity Inns mortgage
loan and related mortgaged properties. Servicing advances and related interest
outstanding from time to time under the pooling and servicing agreement will
only include the portion of such advances and interest that is reimbursable from
payments and other amounts payable in respect of the Equity Inns loan
participation. To the extent any servicing advances are
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not recovered from the borrower or mortgaged properties, each of the trust fund
and the holder of the other participation interest will only be obligated to
reimburse the servicer for its proportionate share of such advance, together
with advance interest thereon.
In the case of the Equity Inns mortgage loans and the related mortgaged
properties, references in this prospectus supplement to a "mortgage loan" or
amounts due thereunder and references to "mortgaged properties," or proceeds
thereon, will, except as expressly set forth herein, be deemed to be references
to the portion of the Equity Inns mortgage loan or related mortgaged properties
represented by the Equity Inns loan participation held by the trust fund.
AMORTIZATION OF PRINCIPAL
In addition to the balloon loans and the ARD loans, the mortgage pool
includes one fully amortizing mortgage loan, which represents 0.13% of the
initial pool balance.
DUE DATES
A "due date" is the date in any month on which a monthly payment on a
mortgage loan is first due. 79 of the mortgage loans, which represent 52.70% of
the initial pool balance, provide for scheduled monthly payments of principal
and/or interest (but not excess interest or principal payments calculated with
respect to excess cash flow on any ARD loan, "monthly payments") to be due on
the first day of each month. 58 of the mortgage loans, which represent 46.89% of
the initial pool balance, provide for due dates on the tenth day of each month.
One mortgage loan, which represents 0.42% of the initial pool balance, provides
for a due date on the fifth day of each month. See "Servicing of the Mortgage
Loans--Servicing and Other Compensation and Payment of Expenses" in this
prospectus supplement.
None of the mortgage loans provide for a grace period for the payment of
monthly payments of more than 15 days.
DEFEASANCE
136 of the mortgage loans provide that after a specified period, if no
default exists under the mortgage loan, the borrower may exercise a "defeasance
option" to obtain the release of one or more of the mortgaged properties, from
the lien of the mortgage upon satisfaction of conditions, including that the
borrower:
(1) pays on any due date
o all interest accrued and unpaid on the principal balance of the
mortgage note to and including that due date,
o all other sums (excluding scheduled interest or principal payments
not yet due and owing) due under the mortgage loan, and
o any costs and expenses related to the release,
(2) delivers or pledges to the trustee "defeasance collateral"
o that consists of direct, non-callable obligations of (or
non-callable obligations, fully guaranteed as to timely payment by)
the United States of America; and
o that provides payments:
o on or before all successive scheduled payment dates from such due
date to the related maturity date (or anticipated repayment date in
the case of any ARD loan), and
o 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 or mortgage loans secured by
multiple mortgaged properties which permit defeasance, an amount equal
to not less than the portion of such scheduled payments allocable to
the released mortgaged property), and
S-30
<PAGE>
(3) delivers a security agreement granting the trust a first priority
security interest in the defeasance collateral and an opinion of
counsel to that effect.
Simultaneously with such actions, the 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.
PREPAYMENT PROVISIONS
All but one of the mortgage loans prohibit voluntary principal prepayments
at any time except during an open period following the expiration of the lockout
period and defeasance period for that mortgage loan or during a period following
the lockout period when any prepayment must be accompanied by a prepayment
premium. One mortgage loan, representing 0.94% of the initial pool balance,
permits prepayment, subject to payment of a prepayment premium, at any time
prior to the commencement of its defeasance period two years after the delivery
date. See Annex A for information regarding the lockout and defeasance periods
for each mortgage loan.
Any 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" in this
prospectus supplement. The enforceability of provisions similar to the
provisions of the mortgage loans providing for the payment of a prepayment
premium upon an involuntary prepayment is unclear under the laws of a number of
states. The obligation to make a prepayment premium with an involuntary
prepayment may not be enforceable under applicable law or, if enforceable, the
foreclosure proceeds may not be sufficient to make such payment.
Liquidation proceeds recovered in respect of any defaulted mortgage loan
will, generally, be applied to cover outstanding servicing expenses and unpaid
principal and interest before being applied to cover any prepayment premium due.
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. Generally, no prepayment premium will
be payable upon any mandatory prepayment of a mortgage loan caused by a casualty
or condemnation. See "Legal Aspects of Mortgage Loans--Default Interest and
Limitations on Prepayments" in the prospectus.
No prepayment premium will be payable with the repurchase of a mortgage
loan by a seller for a material breach of representation or warranty on the part
of that seller or any failure to deliver any related documentation. No
prepayment premium will be payable with the purchase of all of the mortgage
loans and any REO properties in connection with the termination of the trust
fund or 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" in
this prospectus supplement.
EARNOUTS AND ADDITIONAL COLLATERAL LOANS
Some of the mortgage loans are additionally secured by cash reserves or
irrevocable letters of credit that will be released to the borrower upon
satisfaction by the borrower of certain leasing-related or other conditions
including, in some cases, achieving certain debt service coverage ratios or
loan-to-value ratios. If these conditions are not met, the related reserve or
credit enhancement amount will be applied to partially defease or prepay the
related mortgage loan. Any resulting partial prepayment is generally required to
be accompanied by payment of a prepayment premium. For a description of the
related earnout information, see "Annex A--Earnout Loans" and "--Additional
Collateral Loans" and for a description of prepayment provisions of the mortgage
loans and their effect on certificateholders see "Description of the Mortgage
Pool--Prepayment Provisions" and "--Yield and Maturity Considerations" in this
prospectus supplement.
S-31
<PAGE>
RELATED BORROWERS, CROSS-COLLATERALIZED MORTGAGE LOANS AND MORTGAGE LOANS
COLLATERALIZED BY MULTIPLE PROPERTIES
Two mortgage loans, which represent 4.21% of the initial pool balance, are
"cross-collateralized mortgage loans" among groups of related borrowers. For a
discussion of risks related to cross-collateralized loans, see "Risk Factors" in
this prospectus supplement. Losses could result from limitations on the
enforceability of cross-collateralization. See Annex A for information regarding
the cross-collateralized mortgage loans. 10 mortgage loans (other than the
cross-collateralized mortgage loans), which represent 14.56% of the initial pool
balance, are secured by one or more mortgages encumbering multiple mortgaged
properties. Each of these mortgage loans is evidenced by a separate mortgage
note, and is not treated as a set of cross-collateralized mortgage loans.
Because of this, the total number of mortgage loans in the mortgage pool is 138,
while the total number of mortgaged properties in the mortgage pool is 177.
Generally, we treat a mortgage loan that is secured by mortgaged properties that
are located in more than one state as an individual mortgage loan, except that
when we describe the geographic concentration and property type distribution of
the mortgage pool, we treat these mortgage loans as multiple mortgage loans that
are allocated a cut-off date balance based on the allocated loan amount.
In addition to the cross-collateralized loans and the loans secured by
multiple mortgaged properties, some sets of mortgage loans were made to
borrowers who are affiliated or under common control with one another. None of
these sets of mortgage loans represents more than 4.21% of the initial pool
balance.
DUE-ON-SALE AND DUE-ON-ENCUMBRANCE PROVISIONS
All of the mortgage loans contain both "due-on-sale" and
"due-on-encumbrance" clauses. Subject to limited exceptions, these clauses
either:
o permit the holder of the mortgage to accelerate the maturity of the
related mortgage loan if the borrower sells or transfers or encumbers the
mortgaged property in violation of the terms of the mortgage or other loan
documents, or
o prohibit the borrower from doing so without the consent of the holder of
the mortgage. See "--Secured Subordinate Financing" in this prospectus
supplement.
Some of the mortgage loans permit either:
o transfer of the related mortgaged property if specified conditions are
satisfied or if the transfer is to a borrower reasonably acceptable to
the lender, or
o 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 a
due-on-sale or due-on-encumbrance clause to accelerate payment of the related
mortgage loan or to withhold its consent to the transfer or encumbrance of the
mortgaged property. See "The Pooling and Servicing Agreements--Due-on-Sale and
Due-on-Encumbrance Provisions" and "Legal Aspects of Mortgage Loans--Due-on-Sale
and Due-on-Encumbrance" in the prospectus.
SECURED SUBORDINATE FINANCING
Four mortgage loans representing 3.54% of the initial pool balance are
secured by mortgaged properties known to be encumbered by subordinated debt that
is not part of the mortgage 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 is not pursuing a foreclosure action.
Substantially all of the remaining mortgage loans either prohibit the borrower
from encumbering the mortgaged property with additional secured debt or will
require the consent of the trustee before so encumbering such property.
S-32
<PAGE>
The following table indicates those mortgaged properties that are known to
the depositor to be encumbered by secured subordinate debt, the initial
principal amount of the secured subordinate debt and the cut-off date principal
balances of the related mortgage loans. Each holder of secured subordinate debt
has executed a subordination agreement and/or a standstill agreement.
SECURED SUBORDINATE DEBT
<TABLE>
<CAPTION>
INITIAL
PRINCIPAL
AMOUNT OF
SECURED
CONTROL CUT-OFF DATE % OF INITIAL SUBORDINATE
NUMBER LOAN NUMBER PROPERTY NAME BALANCE POOL BALANCE DEBT
- --------- ------------- ---------------------------- -------------- -------------- ------------
<S> <C> <C> <C> <C> <C>
14 22748 Laurel Apartment Portfolio $17,961,949 1.56% $4,600,000
20 23226 Air Touch Building $14,000,000 1.21% $ 655,000
74 19020 The Shops at Pennsville $ 4,796,895 0.42% $ 700,000
Shopping Center
80 901851850 Summer Pointe & Windrock $ 4,059,000 0.35% $1,023,000
Apartments
</TABLE>
Some of the mortgage loans, including the Biltmore Fashion Park loan, may
permit the borrower to incur unsecured subordinated debt in the future, subject
to delivery of a subordination agreement and/or standstill agreement and
requirements that limit the use of proceeds to refurbishing or renovating the
property and/or acquiring furniture, fixtures and equipment for the property.
Additional debt, in any form, may cause a diversion of funds from property
maintenance and increase the likelihood that the borrower will become the
subject of a bankruptcy proceeding.
With respect to one mortgage loan representing 0.35% of the initial pool
balance, the borrower has debt secured by the related mortgaged property (but
that debt is not required to be repaid unless the borrower breaches certain
covenants regarding the use of the property).
Except as described above, the depositor has not been able to confirm
whether the respective borrowers under the mortgage loans have any other debt
outstanding.
In addition, the depositor is aware that owners of the borrowers under
three mortgage loans (including the One Colorado Place and Comerica loans)
representing 8.78% of the initial pool balance have pledged solely their
ownership interest in such borrowers as collateral for "mezzanine debt". This
financing effectively reduces the indirect equity interest of any such owner in
the related mortgaged property. No such "mezzanine debt" is included in the
mortgage pool. See "Risk Factors--Subordinate financing on the mortgaged
property may increase risks" and "--Mezzanine debt secured by equity in the
borrower may increase risk" in this prospectus supplement and "Legal Aspects of
Mortgage Loans--Subordinate Financing" in the prospectus.
GROUND LEASES
10 mortgaged properties securing mortgage loans, which represent 5.23% of
the initial pool balance, are subject solely to the lien of a mortgage on the
applicable borrower's leasehold or subleasehold interest in such mortgaged
property.
None of the ground leases expires less than ten years after the stated
maturity of the related mortgage loan. Under the terms of each such ground
lease, the ground lessor generally has either made its fee interest subject to
the related mortgage or, generally, 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.
LOAN DOCUMENTATION
Except as otherwise described under "Terms and Conditions of the Mortgage
Loans--Related Borrowers, Cross-Collateralized Mortgage Loans and Mortgage Loans
Collateralized by Multiple Properties," each mortgage loan is evidenced by a
promissory note and secured by a mortgage, deed of trust or similar security
instrument that creates a first mortgage lien on a fee simple and/or leasehold
interest in a multifamily, retail, office, industrial, warehouse, hospitality or
other commercial property.
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<PAGE>
SIGNIFICANT MORTGAGE LOANS
The Biltmore Fashion Park Loan
The Loan. The "Biltmore Fashion Park loan" representing 6.94% of the
initial pool balance was originated by GMACCM on June 16, 1999 and has a
principal balance as of the cut-off date of approximately $80,000,000. The
Biltmore Fashion Park loan is an ARD loan with an anticipated repayment date of
July 10, 2009 and a maturity date of July 10, 2029. The Biltmore Fashion Park
loan is secured by, among other things, a mortgage encumbering the borrower's
fee ownership interest in an outdoor regional shopping center located in
Phoenix, Arizona. The Biltmore Fashion Park loan requires payments of interest
only for the first twelve months after its origination date. The Biltmore
Fashion Park loan was made to Biltmore Shopping Center Partners LLC, a special
purpose bankruptcy remote limited liability company affiliated with The Taubman
Realty Group Limited Partnership, which is an affiliate of Taubman Centers,
Inc., a publicly traded real estate investment of trust on the New York Stock
Exchange, listed under the symbol "TCO".
Other payment and prepayment terms for the Biltmore Fashion Park loan are
set forth on Annex A.
The Biltmore Fashion Park Property. The Biltmore Fashion Park property is
an outdoor regional shopping center with approximately 79 in-line stores
anchored by Saks Fifth Avenue and Macy's. The property was built between 1963
and 1996 and consists of approximately 314,805 square feet of in-line space,
90,114 square feet of anchor space occupied by Saks Fifth Avenue, and an
additional anchor occupied by Macy's under a ground lease arrangement with the
borrower. Improvements to the Macy's store increasing the square footage are
currently underway. The improvements occupied by Macy's are not part of the
collateral for the Biltmore Fashion Park loan, however, square footage of the
improvements occupied by Macy's is shown on Annex A and used to calculate the
amount of the loan per square foot. According to an appraisal dated May, 1999,
the in-line stores and Saks Fifth Avenue had approximate average sales per
square foot of $440 and $330, respectively, for the twelve-month period ended
December, 1998. As of June 15, 1999, the Biltmore Fashion Park property was 96%
occupied.
The following table summarizes the breakdown of the gross leasable area, or
"GLA" and base rent information of the ten largest tenants (excluding Macy's) at
the Biltmore Fashion Park property:
TENANTS BASED ON ANNUALIZED BASE RENT
<TABLE>
<CAPTION>
APPROXIMATE ANNUALIZED
LEASE TENANT % OF ANNUALIZED % OF TOTAL BASE RENT
TENANT NAME EXPIRATION GLA GLA BASE RENT BASE RENT PER SF
- ------------------------- ------------ ---------- ----------- ------------ ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Saks Fifth Avenue 10/31/2017 90,114 16.36% $500,000 4.79% $ 5.55
Border Books 01/31/2004 33,416 6.07 845,425 8.10 25.30
Planet Hollywood 03/27/2014 13,087 2.38 458,045 4.39 35.00
Polo Ralph Lauren 01/31/2012 13,000 2.36 402,500 3.85 30.96
Banana Republic 01/31/2005 11,970 2.17 466,112 4.46 38.94
Nieman Marcus Galleries 12/31/2008 11,889 2.16 438,793 4.20 36.91
Restoration Hardware 10/31/2005 7,532 1.37 271,905 2.60 36.10
Claude/Paris Paris 01/31/2009 5,234 0.95 240,000 2.29 57.32
Sharper Image 01/31/2007 3,971 0.72 234,289 2.24 59.00
Coffin & Trout Jewelers 01/31/2005 1,565 0.28 300,000 2.87 191.69
------ ----- ---------- -----
Totals 191,778 34.82% $4,153,069 39.79%
======= ===== ========== =====
</TABLE>
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<PAGE>
The following table summarizes information related to the expiration of the
anchor and tenant leases (excluding Macy's) of the Biltmore Fashion Park
property:
LEASE EXPIRATION SCHEDULE
<TABLE>
<CAPTION>
NUMBER EXPIRING % OF TOTAL ANNUALIZED % OF TOTAL
YEAR OF LEASES SF SF BASE RENT BASE RENT
- --------- ----------- ---------- ------------ ------------ -----------
<S> <C> <C> <C> <C> <C>
1999 2 8,998 1.63% $147,528 1.32%
2000 6 14,346 2.60 323,239 2.90
2001 4 8,380 1.52 249,429 2.24
2002 12 27,941 5.07 901,504 8.08
2003 7 13,634 2.47 534,400 4.79
2004 12 57,811 10.49 1,782,157 15.98
2005 5 28,611 5.19 1,382,057 12.39
2006 5 7,440 1.35 415,311 3.72
2007 11 42,026 7.63 1,557,886 13.97
2008 5 30,473 5.53 1,006,403 9.02
2009+ 8 139,041 25.24 2,122,683 19.03
</TABLE>
Operating Covenants. Macy's predecessor-in-interest, Broadway-Hale Stores,
Inc., executed a ground lease under which Macy's ground leases a portion of the
Biltmore Fashion Park property from the borrower. The current Macy's ground
lease term is scheduled to expire on January 31, 2013 and Macy's has five
additional options to extend the term of the lease for an aggregate of 75 years.
The Macy's ground lease has various operating covenants including, without
limitation, that: (i) Macy's will continuously operate, in a high grade and
reputable manner, a high grade retail department store at the Biltmore Fashion
Park property, (ii) Macy's will keep the department store open on a year-round
basis, adequately stocked and staffed so as to serve customers during all
business hours on all business days so as to produce the maximum return to the
borrower and Macy's and (iii) conduct its business during the regular, customary
days and hours for such retail stores in the trade area in which Biltmore
Fashion Park property is located.
Saks & Company executed an amended and restated lease agreement under which
Saks leases a portion of the Biltmore Fashion Park property from the borrower.
The current Saks lease term is scheduled to expire on October 31, 2017. Saks may
extend the term of the lease for five separate option periods of five years
each. The Saks lease has various operating covenants including that (i) Saks
will continuously use and occupy the leased premises throughout the term of the
lease as a store under the name of "Saks Fifth Avenue" for the sale of
merchandise at retail and the offering of incidental services, (ii) Saks will
keep the store open for business during the same days and hours, including
evenings, as at least one other department store and a majority of the other
tenants are open and (iii) Saks will not operate another Saks department store
in Maricopa County, Arizona.
Defeasance. The borrower may obtain the release of the Biltmore Fashion
Park property from the lien of the mortgage by exercising a defeasance option on
or after the second anniversary of the delivery date.
Value. The Biltmore Fashion Park loan has a 60.38% cut-off date LTV. An
appraisal performed in May, 1999 determined a value for the Biltmore Fashion
Park property of $132,500,000.
Underwritten NCF and DSC Ratio. The Biltmore Fashion Park loan has an
underwritten NCF of $9,894,954 and an underwritten NCF DSCR of 1.43x.
Modified Lockbox; Certain Reserves. Under the borrower's leases with the
tenants of the Biltmore Fashion Park property or otherwise, the borrower has
irrevocably directed the tenants and will direct all future tenants to deposit
rents directly into the lockbox account. Following the earlier to occur of the
anticipated repayment date, an event of default or a decrease in the DSCR
determined quarterly for the
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<PAGE>
Biltmore Fashion Park property below 1.30x, the lockbox account will be under
the sole control of the servicer until such time as the Biltmore Fashion Park
property achieves a DSCR in excess of 1.30x or the event of default is cured.
In addition, if the DSCR determined quarterly for the Biltmore Fashion Park
property decreases below 1.30x, the borrower is required to deposit certain tax,
insurance, replacement, and tenant improvement and leasing commission reserves
with the servicer.
Property Management. The Biltmore Fashion Park property is managed by The
Taubman Company Limited Partnership, an affiliate of the borrower.
Permitted Financing. The borrower is permitted to incur up to $3,000,000 of
unsecured indebtedness that relates solely to financing capital improvements,
compliance with legal requirements, tenant improvements, leasing costs and
equipment related to the Biltmore Fashion Park property, but only if that
indebtedness remains unsecured or is secured solely under capital lease
arrangements.
Transfer of Ownership Interests. The Biltmore Fashion Park loan permits a
one-time sale or transfer of the property with the prior written consent of the
servicer if no event of default has occurred and is continuing under the
mortgage loan and upon the satisfaction of specified conditions.
In addition, the Biltmore Fashion Park property or all of the membership
interests in the borrower and each special purpose member of the borrower may be
sold or transferred without the prior consent of the servicer if no event of
default has occurred and is continuing under the mortgage loan and upon the
satisfaction of other conditions including:
o the transferee is a single purpose, bankruptcy remote entity that assumes
all of the obligations of the borrower under the mortgage note and other
mortgage loan documents by entering into an assumption agreement
satisfactory to the servicer;
o the servicer receives confirmation that the transfer will not result in
any withdrawal, downgrade or qualification of the then current ratings
assigned by the rating agencies to the certificates; and
o the transferee is an "approved transferee."
An "approved transferee" is an entity that satisfies any of the following
tests: it is controlled by a pension fund, insurance company, national
money-center bank or an entity with long-term unsecured debt ratings of
investment grade from at least two rating agencies with at least $500,000,000
total assets and which is managed by an entity which controls at least
$1,000,000,000 in real estate assets; it has, with its affiliates and exclusive
of the Biltmore Fashion Park property, a net worth of at least $250,000,000 and
owns real estate assets of at least $500,000,000 (or if a pension fund advisor,
at least $1,000,000,000 in real estate investments); or it controls at least
twelve regional malls containing an aggregate of six million square feet or more
(inclusive of anchor tenants, but exclusive of the Biltmore Fashion Park
property).
Members of the borrower may transfer up to 50% of their interests in the
borrower without the prior consent of the servicer if no event of default has
occurred and is continuing under the mortgage loan and upon the satisfaction of
other conditions including:
o the retention of at least 50% direct or indirect ownership of the
borrower by the current sponsor and, in the event of a 50% transfer, a
requirement that the transferee must obtain the consent of the current
sponsor to specified major decisions of the borrower from and after the
date of transfer; and
o the managing member of the transferee is a single purpose bankruptcy
remote entity.
The Prime Outlets Loan
The Loan. The "Prime Outlets loan" representing 5.45% of the initial pool
balance was originated by GMACCM on April 27, 1999 and has a principal balance
as of the cut-off date of approximately $62,873,660. The Prime Outlets loan is
an ARD loan with an anticipated repayment date of May 10, 2009 and a maturity
date of May 10, 2029. The Prime Outlets loan is secured by, among other things,
a mortgage encumbering the borrower's fee ownership interest in a partially
enclosed factory outlet center
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<PAGE>
located in Niagara Falls, New York. The Prime Outlets loan was made to Prime
Outlets at Niagara Falls USA Limited Partnership, a special purpose bankruptcy
remote limited partnership sponsored by Prime Retail, Inc. Prime Retail, Inc.
is a publicly traded real estate investment trust on the New York Stock
Exchange, listed under the symbol "PRT".
Payment and prepayment terms for the Prime Outlets loan are set forth on
Annex A.
The Prime Outlets Property. The Prime Outlets property is a partially
enclosed factory outlet center consisting of approximately 533,192 square feet
of retail space and a food court. The current improvements were built and
renovated between 1983 and 1996. According to the 1998 retail sales report
provided by the borrower, the retail space had approximate weighted average
sales per square foot based on occupied square footage of $237.56, for the
twelve-month period ended December 31, 1998, and $265.91, for the period ended
December 31, 1997. As of March 1, 1999 the Prime Outlets property was 96%
occupied.
The following table summarizes the breakdown of the gross leasable area and
base rent information of the ten largest tenants of the Prime Outlets property:
TEN LARGEST TENANTS BASED ON ANNUALIZED BASE RENT
<TABLE>
<CAPTION>
APPROXIMATE ANNUALIZED
LEASE TENANT % OF ANNUALIZED % OF TOTAL BASE RENT
TENANT NAME EXPIRATION GLA GLA BASE RENT BASE RENT PER SF
- --------------------------- ------------ ---------- ---------- ------------ ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Linens N' Things 09/30/2005 27,175 5.10% $279,087 3.35% $10.27
Old Navy 07/31/2008 15,130 2.84 249,645 3.00 16.50
Marshalls 11/30/2000 27,000 5.06 189,000 2.27 7.00
Bass Company Store 01/31/2004 8,720 1.64 165,680 1.99 19.00
Dress Barn 01/31/2006 8,157 1.53 162,732 1.95 19.95
Off 5th Saks Fifth Avenue 08/31/2010 20,359 3.82 157,782 1.89 7.75
Polo/Ralph Lauren 04/30/2004 8,248 1.55 146,801 1.76 17.80
Casual Corner 12/31/2003 7,428 1.39 141,132 1.69 19.00
Applebee's 10/31/2004 6,090 1.14 140,000 1.68 22.99
Eddie Bauer 01/31/2001 8,354 1.57 137,841 1.65 16.50
------ ----- ---------- -----
Totals 136,661 25.64% $1,769,700 21.23%
======= ===== ========== =====
</TABLE>
The following table summarizes information related to the expiration of the
in-line tenant leases of the Prime Outlets property:
LEASE EXPIRATION SCHEDULE
<TABLE>
<CAPTION>
NUMBER EXPIRING % OF TOTAL ANNUALIZED % OF TOTAL
YEAR OF LEASES SF SF BASE RENT BASE RENT
- --------- ----------- ---------- ------------ ------------ -----------
<S> <C> <C> <C> <C> <C>
1999 4 12,481 2.34% $148,726 1.67%
2000 8 48,037 9.01 562,578 6.76
2001 18 67,142 12.59 1,256,446 14.14
2002 21 72,124 13.53 1,450,177 16.32
2003 23 100,905 18.92 1,795,281 20.21
2004 10 47,261 8.86 936,698 10.54
2005 10 55,022 10.32 854,755 9.62
2006 7 24,304 4.56 479,737 5.40
2007 3 15,515 2.91 132,603 1.49
2008 5 26,096 4.89 556,327 6.26
2009+ 2 31,159 5.84 252,282 2.84
</TABLE>
Defeasance. The borrower may obtain the release of the Prime Outlets
property from the lien of the mortgage by exercising a defeasance option on or
after the second anniversary of the delivery date.
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<PAGE>
Value. The Prime Outlets loan has a 72.77% cut-off date LTV. An appraisal
performed in January, 1999 determined a value for the Prime Outlets property of
$86,400,000.
Underwritten NCF and DSC Ratio. The Prime Outlets loan has an underwritten
NCF of $7,361,978 and an underwritten NCF DSCR of 1.36x.
Modified Lockbox. All rents payable by tenants of the Prime Outlets
property are required to be deposited directly into a lockbox account. Following
the earlier to occur of the anticipated repayment date or an event of default,
the lockbox account will be under the sole control of the servicer.
Property Management. The Prime Outlets property is self managed by the
borrower. If the servicer determines that the DSCR of the loan is less that
1.15x for three consecutive months or less than 1.20x for six consecutive
months, then the servicer may direct the borrower to enter into a property
management contract with an independent property manager acceptable to the
servicer.
Tenant Improvement and Leasing Commission Reserves. The borrower is
obligated to make monthly deposits of $61,741 into a tenant improvement and
leasing commission reserve fund held by the servicer. Upon the borrower's
request, the servicer will annually disburse to the borrower the amount then on
deposit in the reserve fund in excess of $740,892 if the servicer determines
that the Prime Outlets property has an occupancy rate of at least 90% and has
maintained a DSCR of at least 1.30x for the preceding twelve month period.
The Equity Inns Loan Participation
The Participation. The "Equity Inns loan participation" representing 4.21%
of the initial pool balance has a principal balance as of the cut-off date of
$48,469,184 and represents a 50% participation interest in each of two mortgage
loans which were originated by GMACCM on June 16, 1999. The remaining 50%
participation interest in the Equity Inns mortgage loans is held by GMACCM. The
terms of the participation agreement provide that GMACCM will act as servicer
and special servicer of the Equity Inns mortgage loans on behalf of the holders
of each participation interest and will service the loans in accordance with the
servicing standard and provisions of the pooling and servicing agreement. If the
servicer is terminated in accordance with the pooling and servicing agreement,
GMACCM will continue to act as primary servicer of the Equity Inns mortgage
loan. If, however, a replacement special servicer is appointed in accordance
with the pooling and servicing agreement, that replacement special servicer will
act as special servicer of the Equity Inns mortgage loans. See "Description of
the Mortgage Pool--Loan Participation Interest" and "Servicing of the Mortgage
Loans--Termination of the Servicer with respect to Specially Serviced Mortgage
Loans and REO Properties."
The two Equity Inns mortgage loans are evidenced by two promissory notes,
each of which is payable by both of the Equity Inns borrowers, with principal
balances as of the cut-off date of $3,836,769 and $93,101,599. Each of the
nineteen mortgages is cross-collateralized and cross-defaulted. The two Equity
Inns mortgage loans are ARD loans with anticipated repayment dates of July 1,
2009 and maturity dates of July 1, 2024, and are secured by, among other things,
mortgages encumbering the respective borrower's fee ownership interest in
seventeen properties and its leasehold interest in two other properties. The
Equity Inns hotels consist of nineteen hotels located in thirteen states. The
Equity Inns mortgage loans were made to two special purpose bankruptcy remote
limited partnerships owned by Equity Inns, Inc. Equity Inns, Inc. is a publicly
traded real estate investment trust on the New York Stock Exchange, listed under
the symbol "ENN".
Payment and prepayment terms for the Equity Inns loan participation are set
forth on Annex A.
The Equity Inns Properties. The Equity Inns properties consist of nineteen
flagged hotels located in thirteen states and described in the table below. Five
of the hotels are operated under the AmeriSuites name, six are operated as
Hampton Inns, three are operated as Homewood Suites and five carry the Residence
Inns brand name. All of the hotels were constructed between 1985 and 1996. The
Equity Inns properties range in size from 96 rooms to 208 rooms and have a total
of 2,453 rooms.
S-38
<PAGE>
<TABLE>
<CAPTION>
HOTEL NO. OF YEAR YEAR
NAME LOCATION ROOMS BUILT RENOVATED
- ----------------- ------------------- -------- ----------- -----------
<S> <C> <C> <C> <C>
AmeriSuites Indianapolis, IN 126 1992 1998-1999
AmeriSuites Overland Park, KS 126 1993-1994 1998-1999
AmeriSuites Columbus, OH 126 1994 1998-1999
AmeriSuites Memphis, TN 128 1996 NAP
AmeriSuites Glen Allen, VA 126 1991 1998
Hampton Inn Overland Park, KS 134 1990-1991 1998-1999
Hampton Inn Kansas City, MO 120 1987 1997
Hampton Inn Memphis, TN 126 1985 1997-1998
Hampton Inn Richardson, TX 130 1987 1998-1999
Hampton Inn Morgantown, WV 108 1991 1998
Hampton Inn Northville, MI 125 1989 1997-1998
Homewood Suites Phoenix, AZ 124 1996 NAP
Homewood Suites Sharonville, OH 111 1990 1998-1999
Homewood Suites San Antonio, TX 123 1996 NAP
Residence Inn Tucson, AZ 128 1985 1992-1999
Residence Inn Eagan, MN 120 1987 1995-1996
Residence Inn Tinton Falls, NJ 96 1988 1998-1999
Residence Inn Portland, OR 168 1990 1996-1998
Residence Inn Princeton, NJ 208 1988-1990 1998
----- --------- ---------
Total/Weighted 2,453
=====
<CAPTION>
AVERAGE
HOTEL OCCUPANCY ALLOCATED
NAME RATE (1) ADR(1)(2) REVPAR(1)(3) PARTICIPATION AMOUNT
- ----------------- ----------- ----------- -------------- ---------------------
<S> <C> <C> <C> <C>
AmeriSuites 68.40% $ 81.28 $ 55.56 $ 1,920,000.00
AmeriSuites 70.40 81.17 57.14 1,795,000.00
AmeriSuites 72.30 80.93 58.53 2,325,000.00
AmeriSuites 67.60 80.27 54.24 1,730,000.00
AmeriSuites 73.50 89.75 66.01 2,705,000.00
Hampton Inn 68.10 73.87 50.30 2,205,000.00
Hampton Inn 69.50 74.31 51.62 1,810,000.00
Hampton Inn 79.20 75.78 59.99 2,375,000.00
Hampton Inn 62.30 62.63 39.00 1,560,000.00
Hampton Inn 71.50 72.54 51.88 2,025,000.00
Hampton Inn 79.00 72.94 57.63 2,220,000.00
Homewood Suites 78.90 103.83 81.88 3,565,000.00
Homewood Suites 74.70 77.66 58.03 1,660,000.00
Homewood Suites 78.60 82.10 63.78 2,070,000.00
Residence Inn 83.00 82.26 69.01 2,665,000.00
Residence Inn 84.30 92.01 77.00 3,250,000.00
Residence Inn 82.50 108.86 86.91 2,350,000.00
Residence Inn 82.90 108.86 90.83 5,295,000.00
Residence Inn 74.30 109.46 81.30 4,985,000.00
----- ------- -------- ---------------
Total/Weighted 74.79% $ 88.84 $ 68.05 $ 48,510,000.00
===== ======= ======== ===============
</TABLE>
(1) For twelve months ended June 1, 1999
(2) Average daily rate
(3) Revenue per available room
Property Management. Five of the hotels are leased by the applicable
Equity Inns borrower to Wayne Holding Corp., a subsidiary of Prime Hospitality
Corp. under an operating lease. Each of these operating leases has a term that
expires on December 30, 2007, except for the lease on the AmeriSuites property
located in Memphis, Tennessee, which expires on June 30, 2008. Prime
Hospitality Corp. is an owner, manager and franchisor of hotels. Prime
Hospitality Corp. is a publicly traded company listed on the NYSE under the
symbol "PDQ."
The remaining fourteen properties are leased to subsidiaries of Interstate
Hotels Management, Inc. under operating leases that terminate on November 30,
2011. Interstate Hotels Management, Inc. is a publicly traded company listed on
the NASDAQ under the symbol "IHCO."
Eleven of these fourteen properties are managed by Crosswoods Hospitality
Company, LLC, an affiliate of the lessees, under management agreements that will
expire on December 31, 2011. The manager is entitled to receive a base
management fee of 6.0% of gross operating revenues under the agreement. Under
its terms, each agreement is subordinated to the operating lease and permits the
borrower to terminate the manager in the event of a default by Interstate Hotels
under the lease. The remaining three properties are managed by Promus Hotels,
Inc., which is also the franchisor for such properties under separate management
agreements, the terms of which run until 2011. The management agreements may be
terminated without penalty in the event of a foreclosure or a deed in lieu
thereof.
<PAGE>
Each of the operating leases for Wayne Holding and Crossroads has been
subordinated to the applicable Equity Inns mortgage pursuant to a subordination,
nondisturbance and attornment agreement. Each agreement grants the lender the
right to receive notice from the applicable tenant of defaults by the borrower
under the lease, and grants the lender rights to cure such defaults. Subject to
the mortgagee's obligation to recognize a non-defaulting tenant upon foreclosure
of the mortgage, the agreement subordinates the tenant's leasehold interest to
that of the mortgagee. Each agreement prohibits amendment of the lease without
the mortgagee's consent and, in the case of the agreement to which Crossroads is
a party, provides that casualty proceeds shall be made available for restoration
of the property, provided that the franchise remains in place or a suitable
substitute is found.
S-39
<PAGE>
Defeasance. The Equity Inns borrowers may obtain the release of one or more
of the Equity Inns properties from the lien of the related mortgage by
exercising a defeasance option on or after the third anniversary of the loans'
origination dates and before the anticipated repayment date if:
o the servicer determines that the DSCR for the remaining properties that
are not released is at least 1.90x; or
o the borrower has provided additional defeasance collateral that would
generate, together with the properties that are not released, cash flow
sufficient to achieve a DSCR of at least 1.90x.
To exercise a defeasance option on an Equity Inns property, the applicable
borrower must deliver defeasance collateral in a principal amount equal to 125%
of the outstanding portion of the allocated loan amount for that property. See
"Description of the Mortgage Pool--Defeasance".
Releases and Substitutions. On or after the third anniversary of the loans'
origination dates and before the anticipated repayment date the Equity Inns
borrowers may obtain a release of one or more of the Equity Inns properties from
the lien of the Equity Inns mortgages upon the substitution of its fee ownership
interest in another hotel property for each property released, if, among other
things, the following conditions are satisfied:
o the allocated loan amount of the released properties for any particular
substitution is not greater than $25,000,000 and the total allocated loan
amount of all properties released over the term of the loan is not
greater than $50,000,000;
o the substitute property is a hotel property with substantially the same
level of services and amenities, a franchise from a nationally-recognized
hotel franchisor and with net cash flow and property valuations that are
substantially similar to the property to be released;
o delivery of a Phase I environmental report on the substitute property
acceptable to the servicer;
o delivery of a structural and engineering report on the substitute
property acceptable to the servicer together with 125% of the cost of
immediate repairs recommended by the report;
o delivery of an appraisal acceptable to the servicer reflecting an LTV on
the Equity Inns mortgage loans not in excess of 55%, after giving effect
to the replacement; and
o confirmation from the rating agencies that the substitution will not
result in a withdrawal, downgrade or qualification of the ratings on the
certificates.
Value. The Equity Inns loans have a 49.26% cut-off date LTV. An appraisal
performed in April, 1999 determined a value for the Equity Inns properties of
$196,800,000.
Underwritten NCF and DSC Ratio. The Equity Inns loans have an underwritten
NCF DSCR of 1.90x, and an underwritten NCF of $17,808,502.
Lockbox. All rents payable by under the operating leases of the Equity Inns
properties are required to be deposited directly into a lockbox account
controlled by the servicer.
Franchise Agreements. Each of the hotel properties is operated under a
hotel franchise agreement that grants a license to operate the hotel as part of
a nationally-recognized chain.
The five hotel properties leased to Wayne Holding Corp. are licensed to
operate as AmeriSuites under separate franchise agreements between Wayne and
AmeriSuites Franchising, Inc., each dated June 16, 1999 and expiring ten years
thereafter. Each franchise agreement may be renewed for a successive ten year
term upon payment of a renewal fee and also grants Wayne an exclusive area of
operation. Under the franchise agreements, Wayne is required to pay various fees
based upon gross room sales including a continuing royalty of 5%, a marketing
contribution of 2% and reservation system fee of 1 1/2%. A "comfort letter"
delivered to the lender in connection with the loan closing gives the lender the
right to notice of defaults and the right to cure defaults on the part of Wayne.
The letter also gives the lender or a subsequent holder of the mortgage loan the
right, upon foreclosure or deed in lieu thereof, to enter into a replacement
franchise agreement for the balance of the term upon payment of a nominal fee.
S-40
<PAGE>
Of the remaining fourteen properties leased to subsidiaries of Interstate
Hotels Management, Inc., five are licensed to operate as Residence Inns by
Marriott. The franchise agreements for the properties licensed as Residence Inns
by Marriott, except the Princeton, New Jersey location, each have terms that
expire not earlier than 2013. The mortgage loan documents provide that it is a
default if that franchise agreement is either not renewed prior to its current
expiration or if it is not replaced by a substitute franchisor acceptable to the
servicer and the rating agencies. Fees under the Marriott franchise agreements
include a continuing royalty of 5% and a marketing fund contribution of 2 1/2%
of gross room revenues. A "comfort letter" delivered to the lender by Marriott
gives notice and cure rights to the lender and provides for operation of the
properties as Residence Inns during and after a foreclosure subject to payment
of various fees, including an application fee. If a subsequent owner is other
than the lender or its wholly owned subsidiary, they may apply for a new
Residence Inn franchise agreement that will be processed in accordance with then
prevailing franchisee requirements.
Six of the remaining nine properties leased to subsidiaries of Interstate
Hotels Management, Inc. are licensed as Hampton Inns and three are licensed as
Homewood Suites, each pursuant to franchise agreements between the respective
lessee and Promus Hotels, Inc. The earliest expiration of any of these franchise
agreements is 2010. Fees under these franchise agreements include a 4%
continuing royalty and 4% marketing/reservation contribution, each calculated on
gross room revenues. "Comfort letters" delivered to the lender give notice and
cure rights to the lender and give lender or the trust the right, upon
foreclosure or deed in lieu thereof, to enter into a replacement franchise
agreement for the balance of the term upon payment of a nominal fee. A
subsequent owner other than the lender or the trust may apply for a new
franchise agreement with Promus Hotels, Inc. that will be processed in
accordance with then prevailing franchisee requirements.
Ground Lease Considerations. Two of the properties, Tinton Falls, New
Jersey and Phoenix, Arizona, are subject to ground leases. The Tinton Falls
ground lease expires not earlier than 2026, and provides for successive
extensions through 2061. The Phoenix ground lease expires in 2062. Both ground
leases provide notice and cure rights for a mortgagee, and, in connection with
the making of the loan, estoppel certificates were delivered by the respective
ground lessors confirming that no defaults existed under the ground leases.
The One Colorado Place Loan
The Loan. The "One Colorado Place loan" representing 3.70% of the initial
pool balance was originated by GMACCM on June 17, 1999 and has a principal
balance as of the cut-off date of approximately $42,649,182. The One Colorado
Place loan is an ARD loan with an anticipated repayment date of July 10, 2009
and a maturity date of July 10, 2029. The One Colorado Place loan is secured by,
among other things, a mortgage encumbering the borrower's fee ownership interest
in an outdoor retail shopping, office and entertainment complex located in
Pasadena, California. The One Colorado Place loan was made to One Colorado
Investments LLC, a special purpose bankruptcy remote limited liability company.
Payment and prepayment terms for the One Colorado Place loan are set forth
on Annex A.
The One Colorado Place Property. The One Colorado Place property is an
outdoor retail shopping, office and entertainment complex consisting of
approximately 47,919 square feet of retail space, 181,734 square feet of office
space, a movie theater and a parking facility. The property was built between
the 1890's and 1920's and was renovated in 1991 and 1992. According to a June 1,
1999 retail sales report provided by the borrower, the retail space had
approximate average sales per square foot of $227 inclusive of the movie
theater, and $362 excluding the movie theater, for the twelve-month period ended
December 31, 1998. As of May 17, 1999, inclusive of the movie theater, the One
Colorado Place was 91% occupied.
S-41
<PAGE>
The following table summarizes the breakdown of the gross leasable area and
base rent information of the ten largest tenants at the One Colorado Place
property:
TEN LARGEST TENANTS BASED ON ANNUALIZED BASE RENT
<TABLE>
<CAPTION>
APPROXIMATE ANNUALIZED
LEASE TENANT % OF ANNUALIZED % OF TOTAL BASE RENT
TENANT NAME EXPIRATION GLA GLA BASE RENT BASE RENT PER SF
- -------------------------------- ------------ ---------- ----------- ------------ ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
AMC Theaters 11/19/2006 47,883 17.25% $331,197 7.32% $6.92
The Gap 11/30/2007 15,279 5.51 358,995 7.93 23.50
Pacific Bell Interactive Media 06/30/2004 14,825 5.34 283,964 6.27 19.15
Crate & Barrel 01/31/2009 14,502 5.23 268,101 5.92 18.49
J. Crew 05/14/2005 9,435 3.40 339,660 7.51 36.00
Gordon Biersch Brewing Co. 12/12/2008 8,466 3.05 262,016 5.79 30.95
IL Fomaio 01/13/2013 8,000 2.88 152,640 3.37 19.08
Banana Republic 11/30/2007 6,870 2.48 201,879 4.46 29.39
Garrett & Tully 11/21/2003 6,371 2.30 152,904 3.38 24.00
Waterworks 02/28/2009 5,963 2.15 155,040 3.43 26.00
------ ------ ---------- -----
Totals 137,594 49.59% $2,506,396 55.38%
======= ====== ========== =====
</TABLE>
The following table summarizes information related to the expiration of the
in-line tenant leases of the One Colorado Place property:
LEASE EXPIRATION SCHEDULE
<TABLE>
<CAPTION>
NUMBER OF EXPIRING % OF ANNUALIZED % OF TOTAL
YEAR LEASES SF TOTAL SF BASE RENT BASE RENT
- --------- ----------- ---------- ---------- ------------ -----------
<S> <C> <C> <C> <C> <C>
1999 3 3,360 1.21% $15,346 0.30%
2000 2 5,443 1.96 97,972 1.94
2001 2 6,113 2.20 131,867 2.61
2002 8 9,366 3.37 258,461 5.11
2003 11 21,047 7.58 674,537 13.34
2004 9 28,611 10.31 676,153 13.38
2005 4 19,535 7.04 574,650 11.37
2006 1 47,883 17.25 331,197 6.55
2007 3 25,078 9.04 597,986 11.83
2008 6 18,294 6.59 395,443 7.82
2009+ 11 68,199 24.57 771,811 15.27
</TABLE>
Defeasance. The borrower may obtain the release of the One Colorado Place
property from the lien of the mortgage by exercising a defeasance option on or
after the second anniversary of the delivery date.
Value. The One Colorado Place loan has a 72.29% cut-off date LTV. An
appraisal performed in June, 1999 determined a value for the One Colorado Place
property of $59,000,000.
S-42
<PAGE>
Underwritten NCF and DSC Ratio. The One Colorado Place loan has an
underwritten NCF of $4,887,329 and an underwritten NCF DSCR of 1.25x.
Lockbox. All rents payable by tenants of the One Colorado Place property
are required to be deposited directly by the tenants of the One Colorado Place
property into a lockbox account under the sole control of the servicer. The
borrower is not obligated to cause the rents to be deposited directly into the
lockbox account from the date the mezzanine financing described below is paid in
full until the anticipated repayment date, if, as of the date of the repayment
of the mezzanine financing, no event of default has occurred and is continuing
under the mortgage loan.
Property Management. The One Colorado Place property is managed by One
Colorado Investments LLC, an affiliate of the borrower.
Mezzanine Financing. The members of the One Colorado Place borrower have
pledged their membership interests in the One Colorado Place borrower as
collateral for a loan having an outstanding principal balance of approximately
$4,130,000 as of the closing date of the One Colorado Place loan. The loan was
made to the One Colorado Place borrower and is held by GMACCM.
Comerica Bank Building Loan
The Loan. The "Comerica loan," representing 2.92% of the initial pool
balance, was originated by Banc One Mortgage Capital Markets on April 30, 1998
and purchased by GACC on April 30, 1998. The principal balance as of the cut-off
date is approximately $33,660,567. The Comerica loan is a balloon loan with a
maturity date of May 1, 2008. The Comerica loan is secured by, among other
things, a fee mortgage encumbering a 12-story office building and a parking
garage located in San Jose, California. The Comerica loan was made to Macanan
Investments, L.P., a special purpose, bankruptcy remote limited partnership.
Payment and prepayment terms for the Comerica loan are described on Annex
A.
The Comerica Property. The Comerica property consists of approximately
213,575 net rentable square feet of office space, and a 629 space parking
facility located in the commercial business district of San Jose, California.
The Comerica property was constructed in 1983. The Comerica property was 98.8%
occupied as of April 30, 1999.
The following table summarizes the breakdown of the gross leasable area and
base rent information of the ten largest tenants of the Comerica property:
TEN LARGEST TENANTS BASED ON ANNUALIZED BASE RENT
<TABLE>
<CAPTION>
APPROXIMATE ANNUALIZED
LEASE TENANT % OF ANNUALIZED % OF TOTAL BASE RENT
TENANT NAME EXPIRATION GLA GLA BASE RENT BASE RENT PER SF
- ---------------------------------- ------------ ---------- ----------- ------------ ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Comerica Bank 01/31/2003 43,213 20.47% $1,501,220 26.23% $34.74
State of California 09/30/2011 32,424 15.36 901,063 15.74 27.79
Ferrari, Olsen and Ottoboni 03/31/2002 14,924 7.07 313,404 5.48 21.00
Commonwealth Land Title Ins. Co. 12/31/2003 13,674 6.48 408,579 7.14 29.88
Dazai Advertising, Inc. 08/31/2004 10,095 4.78 322,333 5.63 31.93
Brach Neal Daney & Spence 08/31/2001 9,878 4.68 207,438 3.62 21.00
Pugh Petrinovich and Company 10/31/2002 8,940 4.24 243,794 4.26 27.27
Oceans of America, Inc. 11/30/2001 8,633 4.09 186,473 3.26 21.60
Brandenberg 333 Company 06/30/2001 8,540 4.05 191,381 3.34 22.41
Comerica Bank -- CA 01/31/2003 6,213 2.94 108,106 1.89 17.40
------ ----- ---------- -----
Totals 156,534 74.16% $4,383,791 76.59%
======= ===== ========== =====
</TABLE>
S-43
<PAGE>
The following table summarizes information related to the expiration of the
ten largest tenant leases of the Comerica property:
LEASE EXPIRATION SCHEDULE
<TABLE>
<CAPTION>
NUMBER EXPIRING % OF ANNUALIZED % OF TOTAL
YEAR OF LEASES SF TOTAL SF BASE RENT BASE RENT
- -------- ----------- ---------- ---------- ------------ -----------
<S> <C> <C> <C> <C> <C>
2000 4 7,702 3.65% $181,716 3.17%
2001 6 36,213 17.16 803,797 14.04
2002 8 47,389 22.45 1,141,227 19.94
2003 5 68,296 32.36 2,158,010 37.70
2004 3 14,911 7.06 440,458 7.70
2005 0 0 0.00 0 0.00
2006 0 0 0.00 0 0.00
2007 2 4,132 1.96 97,506 1.70
2008 4 7,702 3.65 181,716 3.17
2009 6 36,213 17.16 803,797 14.04
</TABLE>
Value. The Comerica loan has a 65.23% cut-off date LTV calculated based on
the principal balance of the Comerica loan as of the cut-off date. An appraisal
performed in January 1998 (and updated in April 1999) determined a value for the
Comerica property of $51,600,000.
DSC Ratio. The Comerica loan has an underwritten NCF DSCR of 1.43x.
Lockbox. All rents payable by tenants of the Comerica property are
required to be deposited directly into a lockbox account controlled by the
servicer.
Property Management. The Comerica property is managed by Macanan
Marketing, Inc.
Mezzanine Financing. In addition to the Comerica loan, a "mezzanine loan"
in the amount of $4,200,000 was made to the equity holders of the borrower. This
mezzanine loan was originated by Banc One Mortgage Capital Markets on April 30,
1998 and purchased by GACC on that date. The mezzanine loan is secured by the
mezzanine borrowers' pledge of partnership interests in the Comerica borrower
and a pledge of shareholders' interest in the general partner of the Comerica
borrower. The mezzanine loan fully amortizes over its ten-year term. On a
monthly basis, the mezzanine borrowers are required to pay $35,000 in principal
payments in addition to interest at the rate quoted at Telerate page 3750 for
U.S. dollar deposits for a 30-day period in the London interbank market plus 6%.
An event of default with respect to the Comerica loan will cause an event of
default with respect to the Mezzanine loan. However, an event of default with
respect to the mezzanine loan will not cause an event of default with respect to
the Comerica loan. As the mezzanine loan is secured by only the partnership
interests in the Comerica borrower and not the real estate, the mezzanine loan
has no foreclosure rights against the Comerica property.
THE SELLERS
GMACCM. GMAC Commercial Mortgage Corporation ("GMACCM"), a California
corporation, is an indirect wholly-owned subsidiary of GMAC Mortgage Group,
Inc., which is a wholly-owned direct subsidiary of General Motors Acceptance
Corporation. GMACCM is also an affiliate of the depositor. The principal offices
of GMACCM are located at 650 Dresher Road, Horsham, Pennsylvania 19044. Its
telephone number is (215) 328-4622.
GACC. German American Capital Corporation ("GACC"), a Maryland corporation,
is a wholly-owned subsidiary of Deutsche Bank North America Holding Corp., which
is a wholly-owned subsidiary of Deutsche Bank AG, a German corporation. GACC is
also an affiliate of Deutsche Bank Securities, 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
S-44
<PAGE>
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.
GSMC. Goldman Sachs Mortgage Company ("GSMC"), a New York limited
partnership, is an affiliate of Goldman, Sachs & Co., one of the underwriters.
GSMC engages primarily in the business of acquiring and depositing mortgage
assets in trusts in exchange for certificates evidencing interests in such
trusts and selling or otherwise distributing such certificates. The mortgage
loans sold by GSMC to the depositor were originated by Archon Financial L.P., an
affiliate of GSMC. The principal offices of GSMC are located at 85 Broad Street,
New York, New York 10004. Its telephone number is (212) 902-1000.
The information set forth herein concerning the mortgage loan sellers and
the underwriting conducted by each with respect to the mortgage loans has been
provided by the respective mortgage loan seller, and neither the depositor nor
the underwriters make any representation or warranty as to the accuracy or
completeness of such information.
UNDERWRITING MATTERS
Environmental Assessments
"Phase I" environmental site assessments or updates of previously conducted
assessments were performed on all of the mortgaged properties. "Phase II"
environmental site assessments were performed on some mortgaged properties.
These environmental site assessments were performed for the seller of the
related mortgage loan or the report was delivered to that seller as part of its
acquisition or origination of the mortgage loan. For all but three of the
mortgaged properties which represent 1.60% of the initial pool balance, these
environmental assessments were performed during the 18-month period before the
cut-off date.
Material adverse environmental conditions or circumstances revealed by
these environmental assessments with respect to the mortgaged properties are
disclosed in "Risk Factors--Adverse environmental conditions may reduce or delay
your payments."
The information contained in this prospectus supplement is based on the
environmental assessments and has not been independently verified by the
depositor, the seller, the servicer, the underwriters or any of their respective
affiliates.
Property Condition Assessments
Inspections or updates of previously conducted inspections of all of the
mortgaged properties were conducted for the seller of the related mortgage loan
by independent licensed engineers and/or architects, or the inspection was
delivered to that seller as part of its acquisition or origination of the
mortgage loan. With respect to all but five of the mortgaged properties, which
secure mortgage loans representing 4.94% of the initial pool balance, such
inspections were conducted within the 18-month period before the cut-off date
for the related mortgage loan. 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. The resulting reports on some of
the mortgaged properties indicated a variety of deferred maintenance items and
recommended capital expenditures. In some instances, repairs or maintenance were
completed prior to closing or cash reserves were established to fund such
deferred maintenance and/or replacement items.
Appraisals
An appraisal for each mortgaged property was performed or an existing appraisal
updated on behalf of the seller of the related mortgage loan, or the appraisal
was delivered to that seller as part of its acquisition or origination of the
related mortgage loan. For all but two of the mortgaged properties which secure
mortgage loans representing 1.05% of the initial pool balance, the appraisals
were performed during the 18-month period before the cut-off date. The appraised
value of the mortgaged property or properties is greater than the original
principal balance of the mortgage loan or the aggregate original principal
balance of any set of cross-collateralized loans. All appraisals were conducted
by an independent
S-45
<PAGE>
appraiser that is state certified and/or designated as a member of the Appraisal
Institute. The appraisal for each mortgaged property or a separate letter
contains a statement by the appraiser to the effect that the appraisal
guidelines set forth in Title XI of the Financial Institutions Reform, Recovery
and Enforcement Act of 1989, as amended, were followed in preparing such
appraisal. However, none of the depositor, the underwriters, or any seller has
independently verified the accuracy of the appraiser's statement. For a
discussion of the risks related to appraisals, see "Risk Factors--Losses may
result if the servicer is unable to sell a mortgaged property for its appraised
value."
For information about the values of the mortgaged properties available to
the depositor as of the cut-off date, see Annex A to this prospectus supplement.
HAZARD, LIABILITY AND OTHER INSURANCE
Most of the mortgage loans require that the mortgaged property be insured
by a hazard insurance policy subject to a customary deductible and in an amount
at least equal to the lesser of the outstanding principal balance of the
mortgage loan and 100% of the full insurable replacement cost of the
improvements located on the mortgaged property. If applicable, the policy
contains appropriate endorsements to avoid the application of co-insurance and
does not permit reduction in insurance proceeds for depreciation.
Flood insurance, if available, must be in effect for any mortgaged property
that at the time of origination included any area identified in the Federal
Register by the Federal Emergency Management Agency as having special flood
hazards. The flood insurance policy must meet the requirements of the then
current guidelines of the Federal Insurance Administration, be provided by a
generally acceptable insurance carrier and be in an amount representing coverage
not less than the least of:
o the outstanding principal balance of the mortgage loan,
o the full insurable value of the mortgaged property,
o the maximum amount of insurance available under the National Flood
Insurance Act of 1968, and
o 100% of the replacement cost of the improvements located on the mortgaged
property, except in some cases where self-insurance was permitted.
Generally, the standard form of hazard insurance policy covers physical
damage or destruction of the improvements on the mortgaged property caused by
fire, lightning, explosion, smoke, windstorm and hail, riot or strike and civil
commotion. The policies may also contain some conditions and exclusions to
coverage.
Each mortgage generally also requires the borrower to maintain
comprehensive general liability insurance against claims for personal and bodily
injury, death or property damage occurring on, in or about the 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 twelve months.
In general, the mortgaged properties are not insured for earthquake risk.
For mortgaged properties located in California and some other seismic zones, the
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. Some of these mortgaged properties may be insured for earthquake
risk in amounts less than the outstanding principal balances of the mortgage
loan.
One mortgage loan representing 1.03% of the initial pool balance is secured
by a mortgaged property on which no earthquake insurance was obtained and for
which a probable maximum loss of 23% was determined by the related seismic
study.
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ASSIGNMENT OF THE MORTGAGE LOANS; REPURCHASES AND SUBSTITUTIONS
On or before August , 1999, the depositor will acquire the mortgage loans
directly or indirectly from the sellers, in each case, under a mortgage loan
purchase agreement dated as of the delivery date or a similar agreement to be
entered into by or assigned to the depositor, who will thereupon assign its
interests in the mortgage loans, without recourse, to the trustee for the
benefit of the holders of the certificates.
Each seller is a "mortgage asset seller" for purposes of the prospectus.
Each seller is generally required to deliver or cause to be delivered the
following documents, with respect to the mortgage loans sold by that seller to
the depositor, to the trustee:
o the original mortgage note, endorsed, without recourse, in blank or to
the order of the trustee;
o the original or a copy of the 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;
o the original or a copy of any 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, in each case with
evidence of recording thereon, unless such document(s) have not been
returned by the applicable recorder's office;
o an assignment of each mortgage in blank or in favor of the trustee, in
recordable form;
o an assignment of any 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;
o any UCC financing statements and original assignments thereof to the
trustee;
o 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 the mortgage loan; and
o when relevant, the ground lease or a copy.
If a seller cannot deliver the original mortgage note for any mortgage loan
sold by it to the depositor, that seller will deliver a copy or duplicate
original of such mortgage note, together with an affidavit certifying that the
original thereof has been lost or destroyed.
The trustee will be required to review the documents delivered to it with
respect to each mortgage loan within 60 days following the delivery date. The
trustee will hold the documents in trust. Within 45 days following the delivery
date, the trustee, at the expense of the applicable seller, will cause the
assignment of each mortgage and any assignments of rents and leases 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.
If the trustee determines that any of these documents were not delivered or
that any document is defective, and the omission or defect materially and
adversely affects the value of the related mortgage loan or the interests of
certificateholders in the loan, the applicable seller may deliver the document
or cure the defect within 90 days after its receipt of notice of the omission or
defect. If that seller does not cure the omission or defect, the applicable
mortgage loan purchase agreement requires the seller to repurchase the affected
mortgage loan or substitute a replacement mortgage loan for the affected
mortgage loan and pay any substitution shortfall amount. That seller will be
obligated to repurchase the affected mortgage loan within the 90-day period at a
"purchase price" at least equal to the unpaid principal balance of such mortgage
loan, together with any accrued but unpaid interest to, but not including, the
due date in the collection period of the repurchase and any related unreimbursed
servicing advances. That seller's repurchase or substitution obligation will be
the sole remedy available to the certificateholders and the trustee. None of the
depositor, any other seller or any other person or entity will be obligated to
repurchase the affected mortgage loan if that seller defaults on its obligation
to do so.
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Instead of repurchasing a mortgage loan, a seller is permitted, for two
years following the delivery date, to substitute a new replacement mortgage loan
for the affected mortgage loan. To qualify as a replacement mortgage loan, the
replacement mortgage loan must have financial terms substantially similar to the
deleted mortgage loan and meet a number of specific requirements.
A "replacement mortgage loan" must:
o have a stated principal balance of not more than the stated principal
balance of the deleted mortgage loan,
o accrue interest at a rate of interest at least equal to that of the
deleted mortgage loan,
o be a fixed-rate mortgage loan,
o have a remaining term to stated maturity or anticipated repayment date,
in the case of an ARD loan, of not greater than, and not more than two
years less than, the deleted mortgage loan, and
o be a "qualified replacement mortgage" within the meaning of 860G(a)(4)
of the Code.
In addition, the applicable seller must deposit in the distribution account
a substitution shortfall amount, equal to any excess of the purchase price of
the deleted mortgage loan over the initial stated principal balance of the
replacement mortgage loan.
REPRESENTATIONS AND WARRANTIES; REPURCHASES
In the applicable mortgage loan purchase agreement or in related
documentation, subject to some exceptions, each seller makes representations and
warranties for each of the mortgage loans sold by it to the depositor, as of the
delivery date, or as of the date stated in the representation and warranty. Some
of these representations and warranties are listed below.
(1) Immediately before the transfer to the depositor, the seller had
good and marketable title to, and was the sole owner and holder of,
the mortgage loan, free and clear of any and all liens, encumbrances
and other interests on, in or to the mortgage loan other than, in some
cases, the right of a subservicer to primary service the mortgage
loan.
(2) The seller has full right and authority to sell, assign and transfer
the mortgage loan.
(3) The information pertaining to the mortgage loan provided in the
mortgage loan schedule attached to the mortgage loan purchase
agreement was true and correct in all material respects as of the
cut-off date for such mortgage loan, provided, that this
representation or warranty is deemed not to include any representation
or warranty with respect to the subject matter of any other
representation or warranty given.
(4) The mortgage loan was not, as of the cut-off date for the mortgage
loan, 30 days or more delinquent in respect of any monthly payment
required thereunder, without giving effect to any applicable grace
period.
(5) 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 mortgage loan, its successors
and assigns, as to the first priority lien of the mortgage in the
original principal amount of the mortgage loan after all advances of
principal, subject only to permitted encumbrances including:
o the lien of current real property taxes and assessments not yet due
and payable,
o covenants, conditions and restrictions, rights-of-way, easements and
other matters of public record, and
o 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 for the mortgage loan.
The permitted encumbrances 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.
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(6) The seller has not waived any material default, breach, violation or
event of acceleration existing under the related mortgage or mortgage
note.
(7) There is no valid offset, defense or counterclaim to such mortgage
loan.
(8) The related mortgaged property is, except as otherwise stated in the
related engineering report, to the knowledge of the seller, free and
clear of any damage that would materially and adversely affect its
value as security for the mortgage loan (except where an escrow of
funds exists sufficient to make the necessary repairs and maintenance)
and the seller has no actual notice of the commencement of a
proceeding for the condemnation of all or any material portion of the
mortgaged property.
(9) At origination, the mortgage loan complied in all material respects
with all applicable usury laws.
(10) The proceeds of the mortgage loan have been fully disbursed and there
is no requirement for future advances thereunder.
(11) The mortgage note and mortgage for the mortgage loan and all other
documents and instruments evidencing, guaranteeing, insuring or
otherwise securing the 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, redemption, fraudulent
conveyance, 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.
(12) All improvements upon the mortgaged property are insured against loss
by hazards of extended coverage in an amount, subject to a customary
deductible, at least equal to the lesser of the outstanding balance of
the mortgage loan and 100% of the full replacement cost of the
improvements located on the mortgaged property, and the related hazard
insurance policy contains appropriate endorsements to avoid the
application of co-insurance provisions and does not permit reduction
in insurance proceeds for depreciation.
(13) The 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 the seller, or for which the related report
was delivered to the seller in connection with its origination or
acquisition of such mortgage loan; and the 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 the
mortgaged property that was not disclosed in the related report(s).
(14) The mortgage loan is not cross-collateralized with a mortgage loan
other than another mortgage loan included in the mortgage pool.
(15) All escrow deposits relating to the 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.
(16) As of the date of origination of the mortgage loan and, to the actual
knowledge of the seller, as of the delivery 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
with priority over the lien created by the related mortgage, except
those which are insured against by the title policy referred to in (5)
above.
(17) No holder of the mortgage loan has, to the 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, other than amounts paid by the tenant
as provided under the related lease.
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(18) To the seller's knowledge, based on due diligence customarily
performed in the origination of comparable mortgage loans by the
seller, as of the date of origination of the mortgage loan, the
related mortgagor or operator was in possession of all material
licenses, permits and authorizations required by applicable laws for
the ownership and operation of the mortgaged property as it was then
operated.
(19) The mortgage or mortgage note, together with applicable state law,
contains customary and enforceable provisions, subject to the
exceptions listed in paragraph (11) above, 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.
(20) In connection with the origination or acquisition of the mortgage
loan, the seller has inspected, or caused to be inspected, the
mortgaged property.
(21) The mortgage loan contains provisions for the acceleration of the
payment of the unpaid principal balance of the mortgage loan if,
without complying with the requirements of the mortgage loan, the
related mortgaged property is directly or indirectly transferred or
sold.
(22) The related mortgagor is an entity, other than an individual, whose
organizational documents or the mortgage loan documents provide
substantially to the effect that such mortgagor:
o is formed or organized solely for the purpose of owning and
operating one or more of the mortgaged properties securing the
mortgage loan;
o may not engage in any business unrelated to such mortgaged property
or properties;
o may not incur indebtedness other than as permitted by the mortgage
or other mortgage loan documents;
o has its own books and records separate and apart from any other
person;
o holds itself out as a legal entity, separate and apart from any
other person; and
o does not have any material assets other than those related to its
interest in and the operation of the mortgaged property or
properties.
If any of the foregoing representations and warranties of a seller are
materially breached for any of the mortgage loans sold by it to the depositor,
the applicable seller may cure the breach within 90 days after its receipt of
notice of the breach. If a seller does not cure the breach, the mortgage loan
purchase agreement requires that seller to repurchase the affected mortgage loan
or substitute a replacement mortgage loan. The seller will be obligated to
repurchase the affected mortgage loan within such 90-day period at the
applicable purchase price or, for two years following the delivery date,
substitute a replacement mortgage loan for the affected mortgage loan and pay
any substitution shortfall amount. See "Assignment of the Mortgage Loans;
Repurchases and Substitutions." The applicable seller's repurchase or
substitution obligation will be the sole remedy available to the
certificateholders and the trustee for any breach of a seller's representations
and warranties regarding the mortgage loans. The seller of each mortgage loan
will be the sole warranting party for each mortgage loan sold by it to the
depositor. None of the depositor, any other seller, nor any other person or
entity will be obligated to repurchase any affected mortgage loan as a result of
a breach of a seller's representations and warranties if that seller defaults on
its obligation to do so. See "The Pooling and Servicing
Agreements--Representations and Warranties; Repurchases" in the prospectus.
POOL CHARACTERISTICS; CHANGES IN MORTGAGE POOL
The description in this prospectus supplement of the mortgage pool and the
mortgaged properties is based upon the mortgage loans that are expected to
constitute the mortgage pool at the time the offered certificates are issued.
The principal balances of the mortgage loans are reduced to reflect the
scheduled principal payments due on or before the cut-off date. Before the
issuance of the offered certificates, a mortgage loan may be removed from the
mortgage pool if the depositor deems such removal necessary
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or appropriate or if it is prepaid. A limited number of other mortgage loans may
be included in the mortgage pool before the issuance of the offered
certificates, unless including such mortgage loans would materially alter the
characteristics of the mortgage pool as described in this prospectus supplement.
As a result, the range of mortgage rates and maturities and some other
characteristics of the mortgage pool may vary depending on the actual
composition of the mortgage pool at the time the offered certificates are
issued.
A Current Report on 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 and each mortgage loan purchase
agreement, with the SEC within fifteen days after the initial issuance of the
offered certificates. If mortgage loans are removed from or added to the
mortgage pool as described in the preceding paragraph, such removal or addition
will be noted in the Form 8-K.
SERVICING OF THE MORTGAGE LOANS
THE SERVICER
As of June 30, 1999, GMAC Commercial Mortgage Corporation had a total
commercial and multifamily mortgage loan servicing portfolio of approximately
$58.27 billion. See "GMAC Commercial Mortgage Corporation" in the prospectus.
Set forth below is a description of 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 is a "master servicer" and a "special servicer" for purposes of the
prospectus. Information provided in the prospectus should be read taking account
of all supplemental information contained in this prospectus supplement.
SERVICING STANDARD
The servicer will be responsible for the servicing and administration of
the mortgage loans. The servicer, either directly or through sub-servicers, will
be required to service and administer the mortgage loans under the following
"servicing standard":
o in the best interests of and for the benefit of the certificateholders as
determined by the servicer in its good faith and reasonable judgment,
o in accordance with applicable law, the terms of the pooling and servicing
agreement and the terms of the respective mortgage loans, and
o 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.
SPECIALLY SERVICED MORTGAGE LOANS
A "specially serviced mortgage loan" is any mortgage loan as to which any
of the following "special servicing events" has occurred:
(1) any balloon payment is more than 30 days late or, if the servicer has
determined that the related borrower has obtained a firm commitment to
refinance, more than 60 days late;
(2) any monthly payment or other payment required under the mortgage note
or the mortgage(s) (other than a balloon payment) is more than 60 days
late;
(3) 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 mortgage note or the 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;
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(4) a default under the loan documents, other than as described in clause
(1) or (2) above, that materially impairs the value of the mortgaged
property as security for the mortgage loan, or otherwise materially
and adversely affects the interests of certificateholders, exists for
the applicable grace period under the terms of the mortgage loan or,
if no grace period is specified, 60 days;
(5) 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, marshaling of assets and liabilities
or similar proceedings, or for the winding-up or liquidation of its
affairs, has been entered against the borrower and the decree or order
shall have remained in force undischarged or unstayed for 60 days;
(6) the borrower shall have consented to the appointment of a conservator
or receiver or liquidator in any insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceedings of or
relating to the borrower or of or relating to all or substantially all
of its property;
(7) the borrower has 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
(8) the servicer has received notice of the commencement of foreclosure or
similar proceedings with respect to the related mortgaged property or
properties.
A specially serviced mortgage loan will become a "corrected mortgage loan"
if each special servicing event that applies to that mortgage loan is remedied
as follows:
o for the circumstances described in clauses (1) and (2) of the
preceding paragraph, the related borrower has made the applicable
balloon payment or three consecutive full and timely monthly payments
under the terms of such mortgage loan (as the terms may be changed or
modified in 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);
o for the circumstances described in clauses (3), (5), (6) and (7) of the
preceding paragraph, the circumstances cease to exist in the good faith
and reasonable judgment of the servicer;
o for the circumstances described in clause (4) of the preceding
paragraph, the default is cured; and
o for the circumstances described in clause (8) of the preceding paragraph,
the 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 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 will subsequently become a corrected mortgage
loan, unless all special servicing events related to each other mortgage loan
that is cross-collateralized with it are corrected as described in the preceding
paragraph.
THE OPERATING ADVISER
An "operating adviser" appointed by the holders of a majority of the
controlling class will have the right to receive notification from the servicer
or any replacement special servicer in regard to certain actions. The servicer
or any replacement special servicer will be required to notify the operating
adviser of, among other things:
o any proposed modification of a monetary term of a mortgage loan other
than an extension of the original maturity date for two years or less;
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o any foreclosure or comparable conversion of the ownership of a
mortgaged property;
o any proposed sale of a specially serviced mortgage loan, other than in
connection with the termination of the trust fund as described in this
prospectus supplement under "Description of the
Certificates--Termination; Retirement of Certificates";
o any proposal to bring an REO property into compliance with applicable
environmental laws; and
o any acceptance of substitute or additional collateral for a mortgage
loan.
At any time, the holders of a majority of the controlling class may direct
the trustee in writing to hold an election for an operating adviser, which
election will be held commencing as soon as practicable thereafter or upon:
o the resignation or removal of the person acting as operating adviser;
or
o a determination by the trustee, based upon a written notice from the
certificate registrar, that the controlling class has changed.
All expenses of the operating adviser are required to be paid by the
controlling class.
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 may at any time terminate
substantially all of the rights and duties of the servicer to service specially
serviced mortgage loans and REO properties and appoint a "replacement special
servicer" to perform such duties under substantially the same terms and
conditions as applicable to the servicer. The holder(s) entitled to more than
50% of the voting rights allocated to the controlling class will designate a
replacement by delivering to the trustee a written notice stating such
designation. The trustee will, promptly after receiving that notice, notify the
rating agencies and the servicer. The "controlling class" will be the most
subordinate class of principal balance certificates outstanding, with the Class
A-1-a, Class A-1-b 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. If no class of principal balance certificates has a
certificate balance at least equal to 25% of its initial certificate balance,
then the most subordinate class will be the controlling class. Initially the
controlling class will be the Class M certificates. It is anticipated that the
servicer or an affiliate will acquire certain subordinate certificates,
including the Class M certificates.
The designated replacement will become the replacement special servicer as
of the date the trustee has received:
o 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
ratings of the outstanding classes of the certificates would be
qualified, downgraded or withdrawn as a result;
o a written acceptance of all obligations of a replacement special
servicer, executed by the designated replacement; and
o an opinion of counsel to the effect that the designation of the
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 the
designated replacement 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 in a
proceeding in equity or at law.
The servicer will resign from its duties in respect of specially serviced
mortgage loans and REO properties simultaneously with the designated
replacement's becoming the replacement special servicer under the pooling and
servicing agreement. Any replacement special servicer may be similarly replaced
by the holder or holders of certificates entitled to more than 50% of the voting
rights allocated to the controlling class.
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Generally, 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 the Master Servicer and the
Depositor." A replacement special servicer will also be responsible for
performing the servicing and other administrative duties of the servicer in this
prospectus supplement or a master servicer under "The Pooling and Servicing
Agreements" in the prospectus, to the extent the duties relate to specially
serviced mortgage loans and REO properties.
Following any appointment of a replacement special servicer, the servicer
will continue to collect information and prepare all reports to the trustee and
to pay the trustee's fee based on the trustee fee rate provided in the pooling
and servicing agreement for any specially serviced mortgage loans and REO
properties. The servicer will also provide incidental services on specially
serviced mortgage loans and REO properties as required by the pooling and
servicing agreement. Unless the same person acts in the capacity as both
servicer and special servicer, 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 may have special relationships and interests that
conflict with those of the holders of one or more classes of certificates. In
addition, the controlling class does not have any duties to the holders of any
class of certificates. It may act solely in the interests of the
certificateholders of the controlling class and will have no liability to any
other certificateholders for having done so. No certificateholder may take any
action against the controlling class for having acted solely in the interests of
the certificateholders of the controlling class.
If the controlling class is represented by book-entry certificates, then
the rights of the holders of the controlling class may be exercised by the
relevant certificate owners subject to receipt by the trustee of a certification
in form and substance acceptable to the trustee stating that the person
exercising such rights is a certificate owner.
SERVICING AND OTHER COMPENSATION AND PAYMENT OF EXPENSES
The principal compensation to be paid to the servicer in respect of its
servicing activities generally will be the servicing fee, the special servicing
fee, the workout fee and the liquidation fee.
Servicing Fee
The "servicing fee" will be a fee payable monthly on a loan-by-loan basis
from amounts received or advanced for 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). The servicing fee will accrue at
the servicing fee rate set forth as an annual percentage in Annex A for each
mortgage loan. A portion of the servicing fee on the mortgage loans identified
on Annex A as loan numbers 090001242 and 907881339 equal to 0.08% is to be paid
to the related sub-servicer of these mortgage loans and will be retained by
Archon Financial L.P. if that sub-servicer is terminated. The servicing fee will
be computed on the same basis and the same principal amount as any related
interest payment due or deemed due on the related mortgage loan is computed.
Special Servicing Fee
The "special servicing fee" will accrue solely for each specially serviced
mortgage loan and each mortgage loan for which the related mortgaged property
has become an REO property. The special servicing fee will accrue at a rate
equal to 0.25% per annum, on the same basis and the same principal amount as any
related interest payment due or deemed due on the mortgage loan is computed, and
will be payable monthly from general collections on the mortgage loans then on
deposit in the certificate account.
Workout Fee
A "workout fee" will generally be payable for each corrected mortgage loan.
For each corrected mortgage loan, the workout fee will be 1.0% of each
collection of interest and principal, including
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scheduled payments, prepayments, balloon payments and payments at maturity,
received on the mortgage loan for so long as it remains a corrected mortgage
loan. The workout fee for any corrected mortgage loan will cease to be payable
if the loan again becomes a specially serviced mortgage loan or if the related
mortgaged property becomes an REO property. However, a new workout fee will
become payable if the mortgage loan again becomes a corrected mortgage loan. If
the servicer is terminated other than for cause or resigns from any or all of
its servicing duties, it will retain the right to receive all workout fees
payable for 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 the
termination or resignation. The successor servicer or replacement special
servicer will not be entitled to any portion of these workout fees, in each case
until the workout fee for any such loan ceases to be payable in accordance with
the preceding sentence.
Liquidation Fee
A "liquidation fee" will be payable for each specially serviced mortgage
loan for which the servicer obtains a full or discounted payoff from the related
borrower and, except as described below, for each specially serviced mortgage
loan or REO property for which the servicer receives any liquidation proceeds.
For each of these specially serviced mortgage loans and REO properties, the
liquidation fee will be 1.0% of the related payment or proceeds. No liquidation
fee will be payable on liquidation proceeds received from 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 as a result of the termination of
the trust. If, however, liquidation proceeds are received on any corrected
mortgage loan and the servicer is properly entitled to a workout fee, the
workout fee will be payable based on the portion of such liquidation proceeds
that constitute principal and/or interest.
Additional Compensation
The servicer will be entitled to 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 under a
mortgage loan.
The servicer will be entitled to prepayment interest excesses and balloon
payment interest excesses collected on the mortgage loans. The servicer will
also be entitled to any default interest actually collected on the mortgage
loans that is not allocable to cover interest on any advances made in respect of
the related mortgage loan.
Generally, if a borrower voluntarily prepays a mortgage loan, in whole or
in part, after the due date in any collection period, the amount of interest,
net of related servicing fees and, if applicable, excess interest, accrued on
the prepayment from that 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, before the due date in any
collection period and does not pay interest on that prepayment through the due
date, then the shortfall in a full month's interest net of related servicing
fees and, if applicable, excess interest on such prepayment will constitute a
"prepayment interest shortfall."
Similarly, if the due date for any balloon payment occurs after the normal
due date in any collection period, the amount of interest net of related
servicing fees and, if applicable, excess interest accrued on the related
balloon loan from such normal due date to the maturity date will, to the extent
actually collected in connection with the payment of such balloon payment on or
before the succeeding determination date, constitute a "balloon payment interest
excess." Conversely, if the due date for any balloon payment occurs before the
due date for monthly payments in any collection period, the amount of interest
net of related servicing fees and, if applicable, excess interest that would
have accrued on the related balloon loan from the stated maturity date through
such due date 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.
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If any mortgage loan with a due date after the determination date in any
month is prepaid in full or in part, including, without limitation, an early
balloon payment during any collection period, and such prepayment is applied to
such mortgage loan before such mortgage loan's due date in the next succeeding
collection period, the amount of interest that would have accrued at the related
net mortgage rate on the amount of such prepayment from the date as of which
such prepayment was received to but not including the due date of such mortgage
loan in the next succeeding collection period, to the extent not collected from
the related borrower without regard to any prepayment premium or excess interest
that may have been collected, and to the extent that any portion thereof does
not represent a balloon payment interest shortfall, will constitute an
"extraordinary prepayment interest shortfall." The servicer will cover, out of
its own funds, any balloon payment interest shortfalls, prepayment interest
shortfalls and extraordinary prepayment interest shortfalls incurred on the
mortgage loans during any collection period; provided, however, that with
respect to those mortgage loans having due dates which fall on or before the
determination date, the servicer will cover prepayment interest shortfalls only
to the extent of its aggregate master servicing fee for the same collection
period calculated for all mortgage loans at a rate equal to the "master
servicing fee rate" of 0.02% per annum.
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
certificate account, the interest reserve account and the REO account, if
established. Any replacement special servicer will be authorized to invest or
direct the investment of funds held in the REO account, if established. 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 these rights and obligations
whether or not the servicer or replacement special servicer, as applicable,
actually directs the investment of such funds.
As compensation for performing its duties for specially serviced mortgage
loans and REO properties, a 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
those duties. A replacement special servicer will also be entitled to any
default interest actually collected on the mortgage loans that is allocable to
the period that the mortgage loan constituted a specially serviced mortgage loan
and that is not allocable to cover interest on any advances made on the mortgage
loan.
Generally, the servicer and any replacement special servicer will be
required to pay their respective overhead and general and administrative
expenses incurred as a result of servicing activities under the pooling and
servicing agreement, including the fees of any sub-servicers retained by it. The
servicer and any replacement special servicer will not be entitled to
reimbursement for these expenses unless expressly provided in the pooling and
servicing agreement. Servicing advances will be reimbursable from future
payments and other collections, including in the form of "related proceeds"
consisting of liquidation proceeds, insurance proceeds and condemnation
proceeds, in any event on or in respect of the related mortgage loan or REO
property. "Servicing advances" generally include customary, reasonable and
necessary out-of-pocket costs and expenses incurred by the servicer or a
replacement special servicer as a result of the servicing of a mortgage loan
after a default, delinquency or other unanticipated event or a mortgage loan on
which a default is imminent, or in connection with the administration of any REO
property. Servicing advances and P&I advances are referred to as "advances."
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. Payments for some
servicing expenses (such as remediation of any adverse environmental
circumstance or condition at a mortgaged property or REO property) may be made
without regard to the relationship between the expense and the funds from which
it is being paid. The servicer, however, may instead advance the costs thereof.
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,
the replacement special servicer may, in its sole discretion, request that the
servicer make such advance. The request must be made in writing and in a timely
manner that does not adversely affect the interests of any certificateholder.
The servicer is required
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to make any servicing advance other than a nonrecoverable advance or an advance
that would be in violation of the servicing standard requested by a replacement
special servicer within ten days of the servicer's receipt of the request. A
replacement special servicer will have no obligation to make an advance that it
requests the servicer to make.
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 the servicing advance is required to be made, then the
trustee will, if it has actual knowledge of the failure, be required to make the
servicing advance. The servicer, any replacement special servicer and the
trustee are required to make servicing advances only to the extent that the
servicing advances are, in the reasonable and good faith judgment of that
person, ultimately recoverable from related proceeds.
As described in this prospectus supplement, the servicer, any replacement
special servicer and the trustee are each entitled to receive interest at the
reimbursement rate on servicing advances. The servicing fee includes the
compensation of the trustee which will be withdrawn by the trustee from the
distribution account. 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" in this
prospectus supplement.
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:
(1) with limited exception, the servicer may not agree to
o any modification, waiver or amendment of any term of, or take any
of the other actions described above on any mortgage loan that
would affect the amount or timing of any related payment of
principal, interest or other amount payable thereunder or affect
the obligation of the related borrower to pay a prepayment premium
or permit a principal prepayment during the applicable lockout
period or, in the servicer's good faith and reasonable judgment,
would materially impair the security for the 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 the modification,
waiver, amendment or other action is reasonably likely to produce a
greater recovery to certificateholders on a present value basis
than would liquidation;
(2) the servicer may not extend the maturity of any mortgage loan beyond
the date that is two years before the distribution date in July,
2032, the "rated final distribution date" and, in any event, may not
permit one or more extensions of the original maturity date of any
mortgage loan that would, in the aggregate, extend the original
maturity of that mortgage loan by more than five years;
(3) the servicer will not make or permit any modification, waiver or
amendment of any term of, or take any of the other above-referenced
actions on, any mortgage loan that would:
o 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
o 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 will not be liable for decisions related to the status
of a mortgage loan on a "qualified mortgage" that are 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 these
decisions);
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(4) the servicer will not permit any borrower to add or substitute any
collateral for an outstanding mortgage loan, if the collateral
constitutes real property, unless the servicer has first determined
in its good faith and reasonable judgment, based upon a Phase I
environmental assessment and the additional environmental testing as
the servicer deems necessary and appropriate, that the additional or
substitute collateral is in compliance with applicable environmental
laws and regulations and that there are no circumstances or
conditions present related 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
(5) with limited exceptions, the servicer may not release any collateral
securing an outstanding mortgage loan;
provided that:
o the limitations, conditions and restrictions in clauses (1) through
(5) above will not apply to any modification of any term of any
mortgage loan that is required under the terms of the mortgage loan
in effect on the delivery date or that is solely within the control
of the related borrower, and
o 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.
ENFORCEMENT OF ARD LOANS
With respect to ARD loans, the servicer and any replacement special
servicer may not take any enforcement action with respect to the payment of
excess interest or principal in excess of the principal component of the
constant monthly payment, other than request for collection, until the maturity
date of the ARD loan. The foregoing will not limit the servicer's or replacement
special servicer's obligation to direct the related borrower to establish a
lockbox account under the provisions of the pooling and servicing agreement.
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 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 notify in writing the
trustee. Within 10 days after receipt of that notice, the trustee will notify
the holders of the controlling class. Any holder or holders of certificates
evidencing a majority interest in the controlling class may purchase any such
defaulted mortgage loan from the trust for a price equal to the purchase price.
If those certificateholders have not purchased the defaulted mortgage loan
within 15 days after they received notice, either the servicer or any
replacement special servicer may purchase the defaulted mortgage loan from the
trust, at a price equal to the purchase price. If neither the servicer nor the
replacement special servicer purchases the defaulted mortgage loan, the servicer
may offer to sell the defaulted mortgage loan if the servicer determines,
consistent with the servicing standard, that a sale would be in the best
economic interests of the trust. The offer to sell is to be made in a
commercially reasonable manner for a period of not less than 10 days or more
than 90 days. Unless the servicer determines that acceptance of any offer would
not be in the best economic interests of the trust, the servicer will accept the
highest cash offer received from any person that constitutes a fair price even
if that offer is for less than the purchase price. However, none of the
servicer, any replacement special servicer, the depositor, the holder of any
certificate or any of their affiliates may purchase the mortgage loan for less
than the purchase price unless it is the highest bid received and 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
Generally, 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
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reasonable judgment and to the extent commercially feasible, maximize the
trust's net after-tax proceeds from the REO property. After the servicer reviews
the operation of the REO property and consults with the trustee to determine the
trust's federal income tax reporting position with respect to income it is
anticipated that the trust would derive from such property, the servicer could
determine that it would not be commercially feasible to manage and operate the
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 in this prospectus supplement as an "REO tax").
To the extent that income the trust receives from an REO property is
subject to a tax on (1) "net income from foreclosure property," such income
would be subject to federal tax at the highest marginal corporate tax rate and
(2) "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 that 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" portion of that 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'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 resulting from the operation of commercial REO properties by REMICs. The
servicer will be required to sell any REO property acquired on behalf of the
trust 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, will
establish and maintain one or more eligible REO accounts, to be held on behalf
of the trustee in trust for the benefit of the certificateholders, for the
retention of revenues, net liquidation proceeds (other than excess liquidation
proceeds) and insurance proceeds derived from each REO property. The servicer or
replacement special servicer, as applicable, will use the funds in the REO
account to pay for the proper operation, management, maintenance, disposition
and liquidation of any REO property, but from amounts on deposit in the REO
account that relate to the REO property. If amounts in the REO account in
respect of any REO property are insufficient to make such payments, the servicer
or replacement special servicer will make a servicing advance to cover any
insufficiency, unless it determines the servicing advance would be
nonrecoverable. Within one business day following the end of each collection
period, the servicer or replacement special servicer will deposit all amounts
collected or received for each REO property during the collection period, net of
any amounts withdrawn to make any permitted disbursements, into the certificate
account. The servicer and the replacement special servicer, however, may retain
permitted reserves in the REO account.
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 in the related loan documents, is required
to perform a physical inspection of each mortgaged property as soon as
practicable after the 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 that describes the condition of the
mortgaged property.
For each mortgage loan that requires the borrower to deliver operating
statements for the related mortgaged property, the servicer will also make
reasonable efforts to collect and review those statements. However, any
operating statements required to be delivered may not in fact be delivered, and
the servicer is not likely to have any practical means of compelling delivery if
the mortgage loan is not in default.
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YEAR 2000 COMPLIANCE
The servicer agrees that by August 31, 1999, any custom-made software or
hardware designed, purchased or licensed by the servicer and used in the course
of the operation or management of, or the compiling, reporting or generation of
data will not contain any deficiency
o in the ability of the software or hardware to identify correctly or
perform calculations or other processing with respect to dates after December
31, 1999, or
o that would cause the software or hardware to no longer be fit for the
purpose for which it was intended due to the changing of the year from 1999
to 2000.
DESCRIPTION OF THE CERTIFICATES
The certificates will be issued under the pooling and servicing agreement
and will represent in the aggregate the entire beneficial ownership interest in
the trust consisting of:
(1) the mortgage loans and all payments under and proceeds of the mortgage
loans received after the cut-off date for such mortgage loan
(exclusive of payments of principal and interest due on or before the
cut-off date for such mortgage loan);
(2) any mortgaged property acquired on behalf of the certificateholders
through foreclosure, deed in lieu of foreclosure or otherwise (upon
acquisition, an "REO property");
(3) the funds or assets that are deposited in the certificate account, any
REO account and the interest reserve account;
(4) the rights of the mortgagee under all insurance policies relating to
the mortgage loans; and
(5) rights of the depositor under the mortgage loan purchase agreements
relating to mortgage loan document delivery requirements and the
representations and warranties of the sellers regarding the mortgage
loans.
DENOMINATIONS
The trust will offer the offered certificates other than the Class X
certificates in minimum denominations of $25,000 and multiples of $1 in excess
thereof. The trust will offer the Class X certificates in minimum denominations
of $1,000,000 initial notional amount and multiples of $1 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
described 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 in
this prospectus supplement 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 under DTC's procedures. Until definitive certificates are issued
for any class of offered certificates, interests in those certificates will be
transferred on the book-entry records of DTC and its participants. The
certificate owners may hold their certificates through DTC, in the United
States, or Cedelbank 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.
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BOOK-ENTRY REGISTRATION OF THE OFFERED CERTIFICATES
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
certificates from the trustee through DTC and its direct and indirect
participants. Accordingly, certificate owners may experience delays in their
receipt of payments. Unless definitive certificates are issued for any class,
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. Except under the limited circumstances
described in this prospectus supplement, 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, 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 similarly are required to
make book-entry transfers and receive and transmit payments on behalf of their
respective certificate owners. Although certificate owners will not hold
physical certificates evidencing their interests in the offered certificates,
the DTC rules, regulations and procedures 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 servicer, the trustee or the depositor 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 Cedelbank
The offered certificates will be initially issued to investors through the
book-entry facilities of DTC, or Cedelbank or the Euroclear system in Europe if
the investors are participants of those systems, or indirectly through
organizations that are participants in such systems. For any of these classes of
offered certificates, the record holder will be DTC's nominee. Cedelbank and
Euroclear will hold omnibus positions on behalf of their participants through
customers' securities accounts in Cedelbank's and Euroclear's names on the books
of their respective depositories (the "depositories"). The depositories in turn,
will hold such positions in customers' securities accounts in the depositories'
names on the books of DTC.
Because of time zone differences, the securities account of a Cedelbank or
Euroclear participant as a result of a transaction with a participant (other
than a depositary holding on behalf of Cedelbank or Euroclear) will be credited
during the securities settlement processing day (which must be a business day
for Cedelbank or Euroclear, as the case may be) immediately following the DTC
settlement date. These credits or any transactions in the securities settled
during the processing will be reported to the relevant Euroclear participant or
Cedelbank participant on that business day. Cash received in Cedelbank or
Euroclear as a result of sales of securities by or through a Cedelbank
participant or Euroclear participant to a DTC Participant (other than the
depository for Cedelbank or Euroclear) will be received with value on the DTC
settlement date, but will be available in the relevant Cedelbank 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 Cedelbank 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 Cedelbank
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
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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 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. Cedelbank participants or Euroclear
participants may not deliver instructions directly to the depositories.
Cedelbank, as a professional depository, holds securities for its
participating organizations ("Cedelbank participants") and facilitates the
clearance and settlement of securities transactions between Cedelbank
participants through electronic book-entry changes in accounts of Cedelbank
participants, thereby eliminating the need for physical movement of
certificates. As a professional depository, Cedelbank 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 offered 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 offered
certificates under the pooling and servicing agreement only at the direction of
one or more participants to whose account such offered 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 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 offered certificates or for
maintaining, supervising or reviewing any records relating to such beneficial
ownership interests.
Certificate owners will not be recognized by the trustee or servicer 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.
Although DTC, Cedelbank and Euroclear have agreed to the foregoing
procedures to facilitate transfers of the offered certificates among
participants of DTC, Cedelbank 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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Year 2000
DTC has informed its participants and other members of the financial
community that it has developed and is implementing a program to deal with the
"year 2000 problem" so that its systems, as the same relate to the timely
payment of distributions to certificateholders, book-entry deliveries, and
settlement of trades within DTC, continue to function appropriately.
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 described 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
On each distribution date, the certificate balance of each class of
certificates with a certificate balance ("principal balance certificates") will
be reduced by any distributions of principal actually made on such class of
certificates on such distribution date. Those certificates' balances will be
further reduced by any realized losses and additional trust expenses allocated
to such class of certificates on such distribution date.
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 in this prospectus supplement 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 $1,152,640,035 (subject to a variance of plus or minus 5%).
The Class X certificates consist of 14 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.
PASS-THROUGH RATES
The annual rate at which any class of certificates accrues interest from
time to time is referred to as its "pass-through rate."
The pass-through rate applicable to the Class A-1-a certificates will be
fixed and, at all times, will be equal to the pass-through rate specified for
such class on page S-4. The pass-through rate applicable to the Class A-1-b,
A-2, B, C and D certificates for any distribution date will be equal to the
lesser of the specified fixed rate described in footnote 8 on page S-4 and the
weighted average net mortgage rate with respect to such distribution date. The
pass-through rates applicable to the Class E and 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
% 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 rates then applicable to
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each Class X component. The pass-through rate of each Class X component for any
distribution date will equal the excess, if any, of the weighted average net
mortgage rate for that distribution date over the pass-through rate for that
distribution date applicable to the related class of principal balance
certificates. If a class of principal balance certificates has a pass-through
rate equal to the weighted average net mortgage rate, the pass-through rate of
the related Class X component will be zero. The pass-through rates for the Class
G, H, J, K, L and M certificates for any distribution date will be equal to the
lesser of a specified fixed rate and the weighted average net mortgage rate for
that 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
beginning of the related collection period, weighted on the basis of their
respective stated principal balances outstanding immediately before such
distribution date.
The "net mortgage rate" for any mortgage loan is, generally, an annual 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 will be determined without regard to any
modification, waiver or amendment of the terms of the mortgage loan, whether
agreed to by the servicer or resulting from a bankruptcy, insolvency or similar
proceeding involving the related borrower or the application of the revised rate
to any ARD loan.
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 that mortgage loan for
any one-month period before a related due date will be equal to:
o the annualized rate at which interest would have to accrue on the loan on
the basis of a 360-day year consisting of twelve 30-day months to produce
the aggregate amount of interest actually accrued in respect of such loan
during such one-month period at the related mortgage rate minus the
related "servicing fee rate" for that mortgage loan specified on Annex A;
however, for each interest reserve loan,
o the net mortgage rate for the one-month period before the due dates in
o January and February in each year that is not a leap year or
o February only in each year that is a leap year
will be determined net of the withheld amounts, and
o the net mortgage rate for the one-month period before the due date in
March will be determined after taking into account the addition of the
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" in
this prospectus supplement.
The "stated principal balance" of each mortgage loan will generally equal
its cut-off date balance, or for a replacement mortgage loan, the outstanding
principal balance as of the related date of substitution, reduced to not less
than zero on each distribution date by
o any payments or other collections or advances of principal of the
mortgage loan that have been or, if they had not been applied to cover
additional trust expenses, would have been distributed on the
certificates on such date, and
o the principal portion of any realized loss incurred on or allocable to
the mortgage loan during the related collection period.
The "determination date" will be the 5th day of each month or, if any such
5th day is not a business day, the next business day.
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DISTRIBUTIONS
The trustee will make distributions on certificates, to the extent of
available funds, on each distribution date. Except as otherwise described below,
the trustee will make these distributions to the persons in whose names the
certificates are registered on the record date, which is the close of business
on the last business day of the preceding month. The trustee will make these
distributions by wire transfer in immediately available funds to the account
specified by the certificateholder at a bank or other entity, if the
certificateholder has given the trustee wiring instructions at least five
business days before the related record date. Distributions not made by wire
transfer will be made 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 expense
previously allocated to that certificate) will also be made by wire transfer or
check, but only upon presentation and surrender of such certificate at the
location that will be specified in a notice of the final distribution. In the
unlikely case of any distribution made on a certificate to reimburse a realized
loss or additional trust expense after the date the certificate is surrendered,
the distribution will be made by check mailed to the certificateholder that
surrendered the certificate. All distributions made on a class of certificates
will be allocated pro rata among those certificates based on their respective
percentage interests in that class.
Loan Groups
For purposes of calculating distributions on the senior certificates, the
mortgage pool has been divided into loan group 1 and loan group 2. The "group 1
mortgage loans" consists of 99 mortgage loans representing 77.45% of the initial
pool balance, and the "group 2 mortgage loans" consists of 39 mortgage loans or
representing 22.55% of the initial pool balance. "Loan group 2" includes all of
the multifamily loans, and "loan group 1" includes all the mortgage loans not
otherwise included in loan group 2.
The Available Distribution Amount
The amount of funds that will be available for distribution to
certificateholders on each distribution date is the "available distribution
amount" for that distribution date, and will generally equal:
(1) all amounts on deposit in the certificate account as of the close of
business on the related determination date, excluding any portion
thereof that represents one or more of the following:
o monthly payments collected but due on a due date after the related
collection period;
o prepayment premiums;
o 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
to reimburse outstanding advances and amounts payable for additional
trust expenses;
o amounts deposited in the certificate account in error;
o for any distribution date in February, and in any January in a year
that is not a leap year, the withheld amounts for the interest
reserve loans to be deposited in the interest reserve account and
held for future distribution; and
o amounts that represent excess interest or excess liquidation
proceeds; plus
(2) to the extent not already included in clause (1), any P&I advances made
for that distribution date and payments made by the servicer to cover
prepayment interest shortfalls, balloon payment interest shortfalls and
extraordinary prepayment interest shortfalls incurred during the related
collection period; plus
(3) for the distribution date occurring in each March, the withheld amounts
for the interest reserve loans then on deposit in the interest reserve
account as described under "--Interest Reserve Account" below; plus
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(4) for any mortgage loan with a due date after the determination date in
each month, the monthly payment, other than any balloon payment, due in
the same month as that distribution date if received by the related due
date in that month.
See "The Pooling and Servicing Agreements--Certificate Account" in the
prospectus.
For purposes of making distributions on the senior certificates on any
distribution date, the available distribution amount for such date will be
divided into the loan group 1 distribution amount and the loan group 2
distribution amount. The "loan group 1 distribution amount" for any distribution
date will consist of all amounts included in the available distribution amount
for such date that are attributable to the mortgage loans constituting loan
group 1, and the "loan group 2 distribution amount" for any distribution date
will consist of all amounts included in the available distribution amount for
such date that are attributable to the mortgage loans constituting loan group 2.
Application of the Available Distribution Amount
In general, distributions of interest and principal are to be made to the
holders of the various classes of REMIC regular certificates sequentially based
on their relative seniority. Accordingly, the trustee will make distributions of
interest and principal on the senior certificates prior to making such
distributions in respect of any other class of REMIC regular certificates.
On each distribution date, the trustee will apply the available
distribution amount for that date in the order of priority set forth below.
Distributions of Interest and Principal on the Senior Certificates
On each distribution date prior to the earlier of the Class A principal
distribution cross-over date and the final distribution date in connection with
the termination of the trust, the trustee will (except as described below) apply
the portion of the loan group 1 distribution amount indicated below for such
date for the following purposes and in the following order of priority:
(1) to pay interest to the holders of the Class A-1-a, Class A-1-b and
Class X certificates, pro rata as among such classes in accordance with
the amount of unpaid distributable certificate interest accrued in
respect of such class of certificates (or, in the case of the Class X
certificates, the portion thereof that accrued on components A-1-a and
A-1-b of such class' notional amount) through the end of the related
interest accrual period up to an amount equal to the lesser of (a) the
amount of such unpaid distributable certificate interest accrued in
respect of such class and (b) 39% of the loan group 1 distribution
amount for such distribution date;
(2) to pay principal to the holders of the Class A-1-a certificates, up to
an amount equal to the lesser of (a) the then outstanding certificate
balance of such class of certificates and (b) 39% of the loan group 1
principal amounts for such distribution date;
(3) if the certificate balance of the Class A-1-a certificates has been
reduced to zero, to pay principal to the holders of the Class A-1-b
certificates, up to an amount equal to the lesser of (a) the then
outstanding certificate balance of such class of certificates and (b)
the excess, if any, of (i) 39% of the loan group 1 principal amounts
for such distribution date over (ii) any distributions of principal
made with respect to the Class A-1-a certificates on such distribution
date in accordance with clause (2) of this paragraph;
(4) if and to the extent not otherwise paid out of the loan group 2
distribution amount and/or the other 61% of the loan group 1
distribution amount, to pay interest to the holders of the Class A-2
and Class X certificates, up to an amount equal to, and pro rata as
between such classes in accordance with, all unpaid distributable
certificate interest accrued in respect of each such Class of
certificates (or, in the case of the Class X certificates, the portion
thereof that accrued on components A-2, B, C, D, E, F, G, H, J, K, L
and M of such class' notional amount) through the end of the related
interest accrual period; and
(5) if the certificate balances of the Class A-1-a and Class A-1-b
certificates have been reduced to zero, to pay principal to the holders
of the Class A-2 certificates, up to an amount equal to the
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lesser of (a) the then outstanding certificate balance of such classes
of certificates (taking into account distributions of principal thereon
made out of the loan group 2 distribution amount and/or the other 61%
of the loan group 1 principal amount) and (b) the excess, if any, of
(i) 39% of the loan group 1 principal amounts for such distribution
date over (ii) any distributions of principal made with respect to the
Class A-1-a and/or Class A-1-b certificates on such distribution date
in accordance with clause (2) and/or clause (3) of this paragraph.
Also on each distribution date prior to the earlier of the Class A
principal distribution cross-over date and the final distribution date in
connection with the termination of the trust, the trustee will (except as
described below) apply 100% of the loan group 2 distribution amount for such
date and the portion of the loan group 1 distribution amount indicated below for
such date for the following purposes and in the following order of priority:
(1) to pay interest to the holders of the Class A-2 and Class X
certificates, pro rata as among such classes in accordance with the
amount of unpaid distributable certificate interest accrued in respect
of each such class of certificates (or, in the case of the Class X
certificates, the portion thereof that accrued on components A-2, B, C,
D, E, F, G, H, J, K, L and M of such class' notional amount) through
the end of the related interest accrual period up to an amount equal to
the lesser of (a) the amount of such unpaid distributable certificate
interest accrued in respect of such class and (b) the aggregate of the
loan group 2 distribution amount plus 61% of the loan group 1
distribution amount for such distribution date;
(2) to pay principal to the holders of the Class A-2 certificates, 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 100% of
the loan group 2 principal amounts for such distribution date and 61%
of the loan group 1 principal amounts for such distribution date; and
(3) if and to the extent not otherwise paid out of the other 39% of the
loan group 1 distribution amount, to pay interest to the holders of the
Class A-1-a, Class A-1-b and Class X certificates, up to an amount
equal to, and pro rata as among such classes in accordance with, all
unpaid distributable certificate interest accrued in respect of each
such class of certificates (or, in the case of the Class X
certificates, the portion thereof that accrued on components A-1-a and
A-1-b of such class' notional amount) through the end of the related
interest accrual period.
On each distribution date on and after the date the certificate balance of
the Class A-2 certificates has been reduced to zero, the trustee will (except as
described below) apply the entire 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 Class A-1-a, Class A-1-b and
Class X certificates, pro rata as among such classes in accordance with
the amount of unpaid distributable certificate interest accrued in
respect of such class of certificates through the end of the related
interest accrual period up to an amount equal to the amount of such
unpaid distributable certificate interest accrued in respect of such
class for such distribution date;
(2) to pay principal to the holders of the Class A-1-a certificates, up to
an amount equal to the lesser of (a) the then outstanding certificate
balance of such class of certificates and (b) the principal
distribution amount for such distribution date; and
(3) if the certificate balance of the Class A-1-a certificates has been
reduced to zero, to pay principal to the holders of the Class A-1-b
certificates, up to an amount equal to the lesser of (a) the then
outstanding certificate balance of such class of certificates and (b)
the excess, if any, of (i) the principal distribution amount for such
distribution date over (ii) any distributions of principal made with
respect to the Class A-1-a certificates on such distribution date in
accordance with clause (2) of this paragraph.
Notwithstanding the foregoing discussion under this "--Distributions of
Interest and Principal on the Senior Certificates" subsection, if for any
distribution date prior to the earlier of the Class A principal distribution
cross-over date and the final distribution date in connection with a termination
of the trust the
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application of the group 1 distribution amount and the group 2 distribution
amount for such date in the manner described above would result in a shortfall
in the payment of distributable certificate interest with respect to any class
of senior certificates, then the trustee will apply the entire available
distribution amount for such date first 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 unpaid distributable
certificate interest accrued in respect of each such class of certificates
through the end of the related interest accrual period. The trustee will then
apply any remaining portion of such available distribution amount (up to the
principal distribution amount for the subject distribution date) to make
distributions of principal on the Class A-1-a, Class A-1-b and Class A-2
certificates as follows:
(1) an amount equal to the lesser of (a) 39% of the loan group 1 principal
amounts for the subject distribution date and (b) the product of (i)
such entire remaining portion of such available distribution amount,
multiplied by (ii) a fraction, the numerator of which is equal to 39%
of the loan group 1 principal amounts for the subject distribution
date, and the denominator of which is equal to the principal
distribution amount for the subject distribution date, will be applied
to make distributions of principal on the Class A-1-a certificates, the
Class A-1-b certificates and the Class A-2 certificates, in that order,
in each case until the related certificate balance is reduced to zero;
and
(2) an amount equal to the lesser of (a) 61% of the loan group 1 principal
amounts and 100% of the loan group 2 principal amounts for the subject
distribution date and (b) the product of (i) such entire remaining
portion of such available distribution amount, multiplied by (ii) a
fraction, the numerator of which is equal to 61% of the loan group 1
principal amounts and 100% of the loan group 2 principal amounts for
the subject distribution date, and the denominator of which is equal to
the principal distribution amount for the subject distribution date,
will be applied to make distributions of principal on the Class A-2
certificates, the Class A-1-a certificates and the Class A-1-b
certificates, in that order, in each case until the related certificate
balance is reduced to zero.
On each distribution date coinciding with or following the occurrence of
any Class A principal distribution cross-over date, and in any event on the
final distribution date in connection with a termination of the trust, the
trustee will apply the entire 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 unpaid distributable certificate
interest accrued in respect of each such class of certificates through
the end of the related interest accrual period;
(2) to pay principal to the holders of the Class A-1-a, Class A-1-b and
Class A-2 certificates, up to an amount equal to, and pro rata as among
such classes in accordance with, the then outstanding class principal
balance of each such class of certificates; and
(3) if applicable, to reimburse the holders of the Class A-1-a, Class A-1-b
and Class A-2 certificates, up to an amount equal to, and pro rata as
among such classes in accordance with, the aggregate of all
unreimbursed reductions, if any, made to the certificate balance of
each such class of certificates as described under "--Subordination;
Allocation of Losses and Expenses" below in connection with realized
losses and additional trust fund expenses.
The "Class A principal distribution cross-over date" will be the first
Distribution Date as of the commencement of business on which (i) the Class
A-1-a, Class A-1-b and/or Class A-2 certificates remain outstanding and (ii) the
certificate balances of all the classes of the subordinate principal balance
certificates have previously been reduced to zero as described under
"--Subordination; Allocation of Losses and Expenses" below.
Distributions of Interest and Principal on the Subordinate Certificates
The portion, if any, of the available distribution amount for any
distribution date that remains after the distributions on the senior
certificates is referred to in this prospectus supplement as the "subordinate
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available distribution amount". The subordinate available distribution amount
for each distribution date will be applied to make payments to the holders of
each class of subordinate certificates (after all required distributions to any
subordinated class of certificates with an earlier alphabetical class
designation have been made pursuant to this clause) as follows:
o first, to pay interest, up to an amount equal to all distributable
certificate interest on that class of certificates for that
distribution date and, to the extent not previously paid, for each
prior distribution date, if any;
o second, if the certificate balances of the Class A certificates and
each 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
o the then outstanding certificate balance of that class of
certificates, and
o the remaining portion, if any, of the principal distribution amount
for that distribution date (or, on the final distribution date
resulting from the termination of the trust, up to an amount equal
to the then outstanding certificate balance of that class of
certificates); and
o third, to distributions for purposes of reimbursement, up to an
amount equal to all realized losses and additional trust expenses, if
any, previously allocated to that class of certificates and for which
no reimbursement has previously been paid; and
o the remaining portion, if any, of the available distribution amounts to
the holders of the REMIC residual certificates.
Distributable Certificate Interest
The "distributable certificate interest" for each class of REMIC regular
certificates for each distribution date is equal to the accrued certificate
interest for that class of certificates for that distribution date, reduced by
that class of certificates' allocable share (calculated as described below) of
any net aggregate prepayment interest shortfall for such distribution date.
The "accrued certificate interest" for each class of REMIC regular
certificates for each distribution date is equal to one month's interest at the
pass-through rate applicable to that class of certificates for that distribution
date accrued on the certificate balance or notional amount, as the case may be,
of that class of certificates outstanding immediately before that distribution
date. Accrued certificate interest will be calculated on the basis of a 360-day
year consisting of twelve 30-day months.
The servicer is required to make a nonreimbursable payment on each
distribution date to cover the aggregate of any prepayment interest shortfalls
and extraordinary prepayment interest shortfalls incurred on the mortgage pool
during the related collection period. However, for mortgage loans with due dates
that fall on or before the related determination date, the servicer will cover
prepayment interest shortfalls only to the extent of its aggregate master
servicing fee for the same collection period.
The "net aggregate prepayment interest shortfall" for any distribution date
will be the following amount, if any, by which:
o the aggregate of all prepayment interest shortfalls incurred on the mortgage
pool during the related collection period exceeds
o any such payment made by the servicer for that distribution date to cover
those prepayment interest shortfalls.
See "Servicing of the Mortgage Loans--Servicing and Other Compensation and
Payment of Expenses" in this prospectus supplement. The net aggregate prepayment
interest shortfall, if any, for each distribution date will be allocated on such
distribution date among each class of REMIC regular certificates, pro rata, in
accordance with the respective amounts of accrued certificate interest for each
such class of certificates for such distribution date.
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Principal Distribution Amount
The "principal distribution amount" with respect to any distribution date
will, generally, equal the aggregate of the following (without duplication):
(1) 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, on the mortgage loans for their respective due dates
occurring during the same calendar month as that distribution date;
(2) all voluntary principal prepayments received on the mortgage loans
during the related collection period;
(3) for any balloon loan for which the stated maturity date occurred, or
any ARD loan for which the anticipated repayment date occurred, during
or before the related collection period, any payment of principal
(exclusive of any voluntary principal prepayment and any amount
described in clause (4) 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, for that mortgage
loan on a due date during or before the same calendar month as that
distribution date and not previously recovered;
(4) 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, in each case (exclusive of any portion of
those amounts that represents a recovery of the principal portion of
any monthly payment (other than a balloon payment) due and any excess
liquidation proceeds), or the principal portion of any assumed monthly
payment deemed due, for the related mortgage loan on a due date during
or before the same calendar month as that distribution date and not
previously recovered; and
(5) if that distribution date is after the initial distribution date, the
excess, if any, of the principal distribution amount for the
immediately preceding distribution date, over the aggregate
distributions of principal made on the principal balance certificates
from the principal distribution amount on that immediately preceding
distribution date.
An "assumed monthly payment" is an amount deemed due for:
o any balloon loan that is delinquent on its balloon payment beyond the
first determination date that follows its stated maturity date and for
which no arrangements have been agreed to for collection of the
delinquent amounts;
o the stated maturity date of any balloon loan that has a due date after
the determination date in any month; or
o any mortgage loan for which the related mortgaged property or
properties have become REO property or properties.
The assumed monthly payment deemed due on any balloon loan on its stated
maturity date and on any successive due date that it remains or is deemed to
remain outstanding will equal the monthly payment that would have been due on
such date if the related balloon payment had not come due, but rather such
mortgage loan had continued to amortize in accordance with the loan's
amortization schedule, if any, in effect immediately before maturity and had
continued to accrue interest in accordance with the loan's terms in effect
immediately before maturity. The assumed monthly payment deemed due on any
mortgage loan for 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, will equal the monthly payment (or, in the
case of a balloon loan described in the prior sentence, the assumed monthly
payment) due or deemed due on the last due date before the acquisition of that
REO property or properties.
For purposes of making distributions of principal on the Class A-1-a, Class
A-1-b and Class A-2 certificates on any distribution date, the principal
distribution amount for such date will be divided into
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the loan group 1 principal amounts and the loan group 2 principal amounts. The
"loan group 1 principal amounts" for any distribution date will consist of all
amounts constituting the principal distribution amount for such date that are
attributable to the mortgage loans included in loan group 1, and the "loan group
2 principal amounts" for any distribution date will consist of all amounts
included in the principal distribution amount for such date that are
attributable to the mortgage loans constituting loan group 2.
DISTRIBUTIONS OF PREPAYMENT PREMIUMS
On each distribution date, any prepayment premiums, or specified portions
thereof, net of any workout fees and liquidation fees payable therefrom, will be
distributed to the holders of the respective classes of principal balance
certificates senior to the Class G certificates, up to, and on a pro rata basis
in accordance with, their respective prepayment premium entitlements in
connection with such particular prepayment premiums or specified portion
thereof.
The "prepayment premium entitlement" of the holders of any class of
principal balance certificates senior to the Class G certificates with respect
to any prepayment premiums, or specified portion thereof, net of workout fees
and liquidation fees payable therefrom, will equal the following:
o For each of the Class A-1-a, Class A-1-b or Class A-2 certificates with
respect to the portion of any prepayment premiums collected in respect of
a group 1 mortgage loan that is attributable to the Class A-1 directed
principal cash flow amounts distributable on a particular distribution
date (provided that the Class A principal distribution cross-over date has
not occurred), the product of:
o 39% of such prepayment premiums (net of any portion thereof payable as
a workout fee or liquidation fee); multiplied by
o a fraction (not greater than 1.0 or less than 0.0), the numerator of
which is the excess, if any, of the pass-through rate for the Class
A-1-b certificates (or, in the case of the Class A-1-a certificates,
the pass-through rate for the Class A-1-a certificates) over the
relevant discount rate, and the denominator of which is the excess, if
any, of the mortgage rate for such prepaid mortgage loan over the
relevant discount rate; multiplied by
o a fraction, the numerator of which is a portion of such Class A-1
directed principal cash flow amounts payable to the holders of such
class of certificates, and the denominator of which is the entire
amount of such Class A-1 directed principal cash flow amounts.
o For each of the Class A-1-a, Class A-1-b or Class A-2 certificates with
respect to the portion of any prepayment premiums collected in respect of
any mortgage loan that is attributable to the class A-2 directed principal
cash flow amounts distributable on a particular distribution date
(provided that the Class A principal distribution crossover date has not
occurred), the product of:
o 100% (if the prepaid mortgage loan is a group 2 mortgage loan) or
61%(if the prepaid mortgage loan is a group 1 mortgage loan), as
applicable, of such prepayment premiums (net of any portion thereof
payable as a workout fee or liquidation fee); multiplied by
o a fraction (not greater than 1.0 or less than 0.0), the numerator of
which is the excess, if any, of the pass-through rate for the Class A-2
certificates over the relevant discount rate, and the denominator of
which is the excess, if any, of the mortgage rate for such prepaid
mortgage loan over the relevant discount rate; multiplied by
o a fraction, the numerator of which is a portion of such Class A-2
directed principal cash flow amounts payable to the holders of such
Class of certificates, and the denominator of which is the entire
amount of such Class A-2 directed principal cash flow amounts.
o For each of the Class A-1-a, Class A-1-b or Class A-2 certificates with
respect to any prepayment premiums collected in respect of any mortgage
loan that is attributable to any principal prepayment distributable on a
particular distribution date (provided that the Class A principal
distribution cross-over date has occurred), the product of:
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o 100% of such prepayment premiums (net of any portion thereof payable as
a workout fee or liquidation fee); multiplied by
o a fraction (not greater than 1.0 or less than 0.0), the numerator of
which is the excess, if any, of the pass-through rate for such class of
certificates over the relevant discount rate, and the denominator of
which is the excess, if any, of the mortgage rate for such prepaid
mortgage loan over the relevant discount rate; multiplied by
o a fraction, the numerator of which is the distribution of principal
payable to the holders of such class of certificates on such
distribution date, and the denominator of which is the entire amount of
the distribution of principal payable to the holders of all the Class
A-1-a, Class A-1-b and Class A-2 certificates on such distribution
date.
o In the case of any class of subordinate principal balance certificates
senior to the Class G certificates with respect to any prepayment premiums
collected in respect of any mortgage loan that is attributable to any
principal prepayment distributable on a particular distribution date, the
product of:
o 100% of such prepayment premiums (net of any portion thereof payable as
a workout fee or liquidation fee); multiplied by
o a fraction (not greater than 1.0 or less than 0.0), the numerator of
which is the excess, if any, of the pass-through rate for such class of
certificates over the relevant discount rate, and the denominator of
which is the excess, if any, of the mortgage rate for such prepaid
mortgage loan over the relevant discount rate; multiplied by
o a fraction, the numerator of which is the distribution of principal
payable to the holders of such class of certificates on such
distribution date, and the denominator of which is the entire amount of
the principal distribution amount for such distribution date.
For any distribution date, the "Class A-1 directed principal cash flow
amounts" will equal 39% of the loan group 1 principal amounts.
For any distribution date, the "Class A-2 directed principal cash flow
amounts" will equal the aggregate of 61% of the loan group 1 principal amounts
and 100% of the loan group 2 principal amounts.
The portion of any prepayment premiums (net of any portion thereof payable
as a workout fee or liquidation fee) remaining after distribution of the amounts
calculated as described above to the holders of the respective classes of
principal balance certificates senior to the Class G certificates will be
distributed to the holders of the Class X certificates. After the distribution
date on which the certificate balances of all classes of principal balance
certificates senior to the Class G certificates have been reduced to zero, any
prepayment premiums collected on the mortgage loans (net of any portion thereof
payable as a workout fee or liquidation fee) will be distributable entirely to
the holders of the Class X certificates.
For any prepaid mortgage loan, the "discount rate" means the yield 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
that 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 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.
DISTRIBUTIONS OF EXCESS INTEREST
No excess interest collected on an ARD loan will be available for
distribution to the holders of the offered certificates.
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DISTRIBUTIONS OF EXCESS LIQUIDATION PROCEEDS
Excess liquidation proceeds generally will not be available for
distribution to the holders of the offered certificates.
"Excess liquidation proceeds" are the excess of:
o proceeds from the sale or liquidation of a mortgage loan or REO property,
net of expenses and related advances and interest on advances, over
o the amount that would have been received if a prepayment in full had been
made on the mortgage loan on the due date immediately following the date
upon which the proceeds were received.
TREATMENT OF REO PROPERTIES
A mortgage loan secured by mortgaged property that is acquired as part of
the trust (through foreclosure, deed in lieu of foreclosure or otherwise), will
be treated as remaining outstanding until the related REO property is liquidated
for the following purposes:
o determining distributions on the certificates,
o allocating of realized losses and additional trust expenses to the
certificates, and
o calculating the amount of servicing fees and special servicing fees
payable under the pooling and servicing agreement.
Among other things, the mortgage loan will be taken into account when
determining pass-through rates and the principal distribution amount. Operating
revenues and other proceeds from an REO property (after payment of certain costs
and taxes, including certain reimbursements payable to the servicer, any
replacement special servicer 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 the mortgage loan,
and, subject to the limitations described under "--P&I Advances" below, the
servicer will be required to make P&I advances on the mortgage loan, in all
cases as if the 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. For
each distribution date in February and each distribution date in any January in
a year that is not a leap year, the servicer will deposit in the interest
reserve account for each mortgage loan bearing interest computed on an
actual/360 basis (the "interest reserve loans"), an amount equal to one day's
interest at the related mortgage rate (net of any servicing fee) on the
respective stated principal balance as of the immediately preceding due date, to
the extent a monthly payment or P&I advance is made on that mortgage loan.
Amounts so deposited in any January (if applicable) and February are referred to
as "withheld amounts." For each distribution date in March, the servicer will
withdraw an amount from the interest reserve account for each interest reserve
loan equal to the related withheld amounts from the preceding January (if
applicable) and February, if any, and deposit this amount into the certificate
account.
SUBORDINATION; ALLOCATION OF LOSSES AND EXPENSES
As described in this prospectus supplement, 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 on their certificates on each distribution date,
and the ultimate receipt by holders of the respective classes of Class
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A certificates of principal equal to, in each such case, the entire certificate
balance of that 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 on their certificates on each
distribution date, and the ultimate receipt by holders of the other classes of
offered certificates of principal equal to the entire certificate balance of
that 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.
A deficit will exist on a distribution date if the aggregate stated
principal balance of the mortgage pool outstanding immediately following such
distribution date is less than the aggregate certificate balance of the
principal balance certificates after giving effect to distributions on the
certificates on that distribution date. If a deficit exists on a distribution
date, the respective certificate balances of the 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 the deficit (or the related certificate balance) is reduced to
zero (whichever occurs first). If any portion of the deficit remains after the
certificate balances of those classes of certificates are reduced to zero, then
the respective certificate balances of the Class A-1-a, Class A-1-b and Class
A-2 certificates will be reduced, pro rata in accordance with the relative sizes
of the remaining certificate balances of those classes of certificates, until
the deficit (or each of those certificate balances) is reduced to zero.
A deficit may be the result of realized losses incurred on the mortgage
loans and/or additional trust expenses. These reductions in the certificate
balances of the principal balance certificates will constitute an allocation of
any realized losses and additional trust expenses. Any such reduction will also
have the effect of reducing the notional amount of the Class X certificates.
"Realized losses" are losses on the mortgage loans arising from the
inability of the servicer to collect all amounts due and owing under the
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 on a liquidated mortgage loan (or related REO property or
properties) is an amount generally equal to the excess, if any, of:
o the outstanding principal balance of the mortgage loan as of the date of
liquidation, together with all accrued and unpaid interest thereon at the
related mortgage rate to but not including the due date in the month in
which the liquidation proceeds are distributed and all related
unreimbursed servicing advances and outstanding liquidation expenses,
over
o the aggregate amount of liquidation proceeds, if any, recovered in
connection with such liquidation.
If any portion of the debt (other than excess interest) 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 expenses" will reduce amounts payable to
certificateholders and, consequently, may result in a loss on the offered
certificates. Additional trust expenses include, among other things:
o special servicing fees, workout fees and liquidation fees,
o interest on unreimbursed advances,
o the cost of various opinions of counsel required or permitted to be obtained
for the servicing of the mortgage loans and the administration of the trust,
o unanticipated, nonmortgage-loan-specific expenses of the trust, including
indemnities and reimbursements to the trustee as described under "The Pooling
and Servicing Agreements--Matters Regarding
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the Trustee" in the prospectus, indemnities and reimbursements to the servicer
and the depositor (and indemnities and reimbursements to a replacement special
servicer comparable to those for the servicer) as described under "The Pooling
and Servicing Agreements--Matters Regarding the Master Servicer and the
Depositor" in the prospectus and federal, state and local taxes, and
tax-related expenses, payable out of the trust as described under "Servicing
of the Mortgage Loans--REO Properties" in this prospectus supplement and
"Federal Income Tax Consequences--REMICs--Taxation of Owners of REMIC Residual
Certificates--Prohibited Transactions Tax and Other Taxes" in the prospectus,
o any amounts expended on behalf of the trust 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
o any other expense of the trust not specifically included in the calculation
of "realized loss" for which there is no corresponding collection from a
borrower.
P&I ADVANCES
On each distribution date, the servicer will be obligated to make "P&I
advances" consisting of advances of delinquent principal and interest on the
mortgage loans, other than balloon payments 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. The servicer will not
be required to make a P&I advance if 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. P&I
advances for any distribution date will be in an amount generally equal to the
aggregate of all monthly payments (other than balloon payments or excess
interest) and any assumed monthly payments (in each case net of any related
workout fee) that were due or deemed due on the mortgage loans during the same
month as such distribution date and that were not paid by or on behalf of the
related borrowers or otherwise collected as of the close of business on the
later of such due date or the last day of the related collection period or other
specified date before such distribution date. The servicer's obligations to make
P&I advances on any mortgage loan will continue through liquidation of that
mortgage loan or disposition of any related REO property.
If it is determined that an appraisal reduction amount exists with respect
to any required appraisal mortgage loan and subsequent delinquencies occur on
the mortgage loan, the interest portion of the P&I advance for that mortgage
loan will be reduced on each distribution date for so long as the appraisal
reduction amount exists (no reduction to be made in the principal portion,
however) to equal the product of
o the amount of the interest portion of the P&I advance that would be required
to be made for that distribution date without regard to this sentence,
multiplied by
o a fraction (expressed as a percentage), the numerator of which is equal to
the stated principal balance of that mortgage loan, net of such appraisal
reduction amount, and the denominator of which is equal to the stated
principal balance of that mortgage loan.
See "Appraisal Reductions" below. If the servicer fails to make a required P&I
advance, the trustee will be required to make that P&I advance. See "The
Trustee" below.
The servicer and the trustee will each be entitled to recover any P&I
advance made by it from related proceeds collected on the mortgage loan for
which that P&I advance was made. However, neither the servicer nor the trustee
is required to make a P&I advance that would constitute a nonrecoverable
advance. If at any time, a P&I advance made by the servicer or the trustee is
determined to be a nonrecoverable advance, the servicer or the trustee will be
entitled to recover the amount of such P&I 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.
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Except as described in the following sentence, the servicer, the trustee
and any replacement special servicer each will be entitled to interest accrued
on the amount of any advance it makes at a "reimbursement rate" per annum equal
to the "prime rate" as published in the "Money Rates" section of The Wall Street
Journal, as that "prime rate" may change from time to time. No interest will be
paid on P&I advances made on the mortgage loan identified as loan number 21211
on Annex A to the extent made to cover monthly payments that are timely made
under the mortgage loan documents, but made after the applicable distribution
date. Interest on any advance will be payable to the servicer, any replacement
special servicer or the trustee, as the case may be, out of default interest
collected on the related mortgage loan or, together with the reimbursement of
that advance, out of any amounts then on deposit in the certificate account.
Interest accrued on outstanding advances will result in a reduction in amounts
payable on the certificates unless the amount of default interest collected on
the related mortgage loan is sufficient to pay that interest in full.
APPRAISAL REDUCTIONS
A mortgage loan will become a "required appraisal loan" upon the earliest
of
o the date on which the mortgage loan becomes a modified mortgage loan,
o the 90th day following the occurrence of any uncured delinquency in monthly
payments on the mortgage loan or, the 60th day following the occurence of
any uncured delinquency in any balloon payment,
o the date on which a receiver is appointed and continues in that capacity for
a mortgaged property securing the mortgage loan, and
o the date on which a mortgaged property securing the mortgage loan becomes an
REO property.
Within 30 days of a mortgage loan becoming a required appraisal loan (or
longer period if the servicer is diligently and in good faith proceeding to
obtain such appraisal), the servicer is required to obtain an appraisal of the
related mortgaged property from an independent MAI-designated appraiser. No
appraisal will be required if such an appraisal was obtained within the prior
twelve months. The cost of the appraisal will be advanced by the servicer,
subject to its right to be reimbursed therefor as a servicing advance.
As a result of this appraisal, the servicer may determine that an appraisal
reduction amount exists on 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
o the sum of:
(1) the stated principal balance of such required appraisal loan,
(2) to the extent not previously advanced by or on behalf of the servicer or
the trustee, all unpaid interest on the required appraisal loan through
the most recent due date before that determination date at a per annum
rate equal to the related mortgage rate,
(3) all related unreimbursed advances made for that required appraisal loan
plus interest accrued on those advances at the reimbursement rate, and
(4) all currently due and unpaid real estate taxes and assessments,
insurance premiums, and, if applicable, ground rents on the related
mortgaged property, net of any escrow reserves held by the servicer to
cover any of these items,
o over:
90% of the appraised value of the related mortgaged property or REO property
as determined by the appraisal, net of the amount of any obligation secured
by liens on the property that are prior to the lien of the required appraisal
loan, and are not amounts related to items included in clause (4) above and
were not taken into account in the calculation of such appraised value.
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If an appraisal is not obtained from an independent MAI-designated
appraiser within 120 days following the earliest of the dates described in the
first sentence of this paragraph, then until the appraisal is obtained, the
appraisal reduction amount will equal 25% of the stated principal balance of the
related required appraisal loan. Upon receipt of an appraisal from an
independent MAI-designated appraiser, the appraisal reduction amount for the
required appraisal loan will be recalculated based upon the formula described
above.
Within 30 days of each anniversary of the date a loan became a required
appraisal loan, the servicer is required to order an update of the prior
appraisal. Based on the update, the servicer will redetermine and report to the
trustee the appraisal reduction amount, if any, for that mortgage loan. No
update is required for a mortgage loan that has become a corrected mortgage
loan, and for which no other special servicing event or event that would cause
the loan to be a required appraisal loan has occurred. The cost of the updates
will be covered by and reimbursable as a servicing advance.
A "modified mortgage loan" is any mortgage loan for which any special
servicing event has occurred and that has been modified by the servicer in a
manner that:
o affects the amount or timing of any payment of principal or interest due on
the mortgage loan (other than, or in addition to, bringing current monthly
payments on that mortgage loan);
o 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
o in the reasonable good faith judgment of the servicer, materially impairs the
security for that mortgage loan or reduces the likelihood of timely payment
of amounts due on that mortgage loan.
REPORTS TO CERTIFICATEHOLDERS; AVAILABLE INFORMATION
Trustee Reports
On each distribution date, the trustee will be required to provide or make
available to each holder of an offered certificate as of the related record date
a "distribution date statement" providing information relating to distributions
made on that date for the relevant class and the recent status of the mortgage
pool. For a discussion of the particular items of information included in each
distribution date statement, as well as a discussion of 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 provide or make
available 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 provided in Annex
B (although the forms may be subject to change over time) and containing, among
other things, substantially the following information:
(1) A report as of the close of business on the immediately preceding
determination date, containing some categories of information regarding
the mortgage loans provided in Annex A of this prospectus supplement in
the tables under the caption "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 presented in a loan-by-loan and tabular format
substantially similar to the formats utilized in Annex A.
(2) A "delinquent loan status report" containing, among other things, those
mortgage loans that, 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 that have become REO property.
(3) An "historical loan modification report" containing, among other things,
those mortgage loans that, as of the close of business on the immediately
preceding determination date, have been modified under the pooling and
servicing agreement
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o during the collection period ending on that determination date and
o since the cut-off date for that mortgage loan, showing its original
and the revised terms.
(4) An "historical loss estimate report" containing, among other things, as
of the close of business on the immediately preceding determination date,
o the aggregate amount of liquidation proceeds and liquidation expenses,
both for the collection period ending on that determination date and
for all prior collection periods, and
o the amount of realized losses occurring both during that collection
period and historically, set forth on a mortgage loan-by-mortgage loan
basis.
(5) An "REO status report" containing, among other things, for each REO
property included in the trust as of the close of business on the
immediately preceding determination date,
o the acquisition date of that REO property,
o the amount of income collected on that REO property (net of related
expenses) and other amounts, if any, received on that REO property
during the collection period ending on that determination date, and
o 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" containing, among other things, a list of
mortgage loans that have experienced a material decrease in debt service
coverage, a loss of or bankruptcy of the largest tenant (if the servicer
has actual knowledge of such loss or bankruptcy) or are approaching
maturity.
None of these reports will include any information that the servicer
regards as 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.
Before each distribution date, the servicer will deliver to the trustee by
electronic means:
o a "comparative financial status report" containing substantially the content
provided in Annex B, including, 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):
o the most current available year-to-date;
o each of the previous two full fiscal years stated separately; and
o the "base year" (representing the original analysis of information used as
of the cut-off date for such mortgage loan); and
o a "CSSA periodic loan file" containing information on the mortgage loans and
the mortgaged properties.
In addition, the servicer is also required to perform for each mortgaged
property and REO property:
o Within 30 days after receipt of a quarterly operating statement, if any,
beginning with the calendar quarter ended December 31, 1999, an "operating
statement analysis" containing revenue, expense, and net operating income
information substantially in accordance with Annex B (but only to the
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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 the mortgaged property or REO property as of the end of that calendar
quarter. The servicer will deliver to the trustee by electronic means the
operating statement analysis upon request.
o Within 30 days after receipt by the servicer of an annual operating
statement, an NOI adjustment analysis containing substantially the content
provided 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 to satisfy its
reporting obligation described in clause (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 their beneficial
ownership of any offered certificate may also obtain copies of any of the
trustee reports upon request. In addition, the servicer may make available, to
certificate owners who have certified to the servicer their beneficial ownership
of any offered certificate, or prospective certificate owners who provide
appropriate confirmation that they are prospective certificate owners who intend
to keep any information confidential, copies of any reports or files prepared by
the servicer. Otherwise, until the time definitive certificates are issued to
evidence the offered certificates, the information described above will be
available to the related certificate owners only if DTC and its participants
provide the information to certificate owners. 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. Except as provided in this prospectus
supplement, 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.
INFORMATION AVAILABLE ELECTRONICALLY
The trustee will make available each month, to any interested party, the
distribution date statement via the trustee's internet website. In addition,
upon the approval of the depositor, the trustee will make available each month,
to any interested party, the trustee reports (other than the servicer watch
list) on the trustee's internet website. The trustee's internet website will
initially be located at "www.ctslink.com/ cmbs". In addition, the trustee will
also make mortgage loan information as presented in the CSSA loan setup file and
CSSA periodic loan update file format available each month to any
certificateholder, any certificate owner, the rating agencies, or any other
interested party via the trustee's internet website. All such reports and
statements will require the use of a password provided by the trustee to the
person requesting such report or statement upon receipt by the trustee from such
person of a certification in the form attached to the pooling and servicing
agreement. The rating agencies and the parties to the pooling and servicing
agreement will not be required to provide that certification. The depositor may
at any time instruct the trustee not to require the use of a password to access
any or all such information. In addition, the trustee will make available, as a
convenience for interested parties (and not in furtherance of the distribution
of the prospectus or the prospectus supplement under the securities laws), the
pooling and servicing agreement, the prospectus and the prospectus supplement
via the trustee's internet website. The trustee will make no representations or
warranties as to the accuracy or completeness of such documents and will assume
no responsibility for them. In addition, the trustee may disclaim responsibility
for any information distributed by the trustee for which it is not the original
source.
The trustee will make available each month the servicer watch list and the
comparative financial status report to any holder or certificate owner of an
offered certificate or any person identified to the trustee by a holder or
certificate owner as a prospective transferee of an offered certificate or any
interest therein, the rating agencies and to any of the parties to the pooling
and servicing agreement via the trustee's internet website with use of a
password provided by the trustee to that person upon receipt by
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the trustee from such person of a certification in the form attached to the
pooling and servicing agreement. The rating agencies and the parties to the
pooling and servicing agreement will not be required to provide that
certification. The depositor may at any time instruct the trustee not to require
the use of a password to access any or all such information.
In connection with providing access to the trustee's internet website, the
trustee may require registration and the acceptance of a disclaimer. The trustee
shall not be liable for the dissemination of information in accordance with the
pooling and servicing agreement.
OTHER INFORMATION
The trustee will make available at its offices, during normal business
hours, for review by any holder, certificate owner or prospective purchaser of
an offered certificate, originals or copies of the following items to the extent
they are held by the trustee:
o the pooling and servicing agreement and any amendments thereto,
o all trustee reports delivered to holders of the relevant class of offered
certificates since the delivery date,
o all officers' 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,
o the most recent property inspection report prepared by or on behalf of the
servicer and delivered to the trustee for each mortgaged property,
o the most recent annual operating statements, if any, collected by or on
behalf of the servicer and delivered to the trustee for each mortgaged
property, and
o 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.
The trustee will provide copies of the items described above upon
reasonable written request. The trustee may require payment for the reasonable
costs and expenses of providing such copies and may also require:
o 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 the person or entity making the request is a
beneficial owner of offered certificates, is requesting the information
solely for use in evaluating its investment in the certificates and will
otherwise keep the information confidential and
o 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 the person or entity making the request is a
prospective purchaser of offered certificates or an interest therein, is
requesting the information solely for use in evaluating a possible investment
in the certificates and will otherwise keep the information confidential.
Certificateholders, by the acceptance of their certificates, will be deemed
to have agreed to keep this information confidential. The servicer may, but is
not required to, make certain information available over the internet.
VOTING RIGHTS
At all times during the term of the pooling and servicing agreement, the
voting rights for the certificates (the "voting rights") will be allocated as
follows:
o 98% among the holders of the respective classes of principal balance
certificates in proportion to the certificate balances (adjusted as described
below) of their certificates,
o 1% among the holders of the Class X certificates, and
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o 1% allocated equally among the holders of the respective classes of REMIC
residual certificates.
Voting rights allocated to a class of certificateholders will be allocated
among those certificateholders in proportion to the percentage interests in the
class evidenced by their respective certificates. Appraisal reduction amounts
will be allocated to reduce the respective certificate balances of the 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-1-a, Class A-1-b and Class A-2 certificates (pro rata among
the Class A-1-a, Class A-1-b and Class A-2 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:
o the final payment (or advance of that payment) or other liquidation of the
last mortgage loan or REO property, and
o the purchase of all of the assets of the trust by the servicer or, if the
servicer elects not to make such purchase, by the depositor, when the then
aggregate stated principal balance of the mortgage pool is less than 1% of
the initial pool balance.
Any purchase by the servicer or the depositor of all the mortgage loans and
other assets in the trust is required to be made at a price equal to:
o the aggregate purchase price of all the mortgage loans (exclusive of mortgage
loans for which the related mortgaged properties have become REO properties)
then included in the trust; plus
o the aggregate fair market value of all REO properties then included in the
trust (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; minus
o if such purchase is by the servicer, the aggregate of all amounts payable or
reimbursable to the servicer under the pooling and servicing agreement.
Written notice of termination of the pooling and servicing agreement will
be given to each certificateholder. 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 the notice of termination.
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 (if the trust is to be terminated as a result of the purchase of all
of the assets), together with all other amounts on deposit in the certificate
account, net of any portion of the foregoing 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
The trustee is Norwest Bank Minnesota, National Association. The trustee
is at all times required to be, and will be required to resign if it fails to
be,
o a corporation or association, organized and doing business under the laws of
the United States of America or any state thereof or the District of
Columbia, authorized under those laws to exercise corporate trust powers,
having a combined capital and surplus of not less than $100,000,000 (or,
under certain conditions, such lesser amount that each rating agency has
confirmed would not cause it to qualify, downgrade or withdraw its rating on
any class of certificates) and subject to supervision or examination by
federal or state authority and
o an institution whose long-term senior unsecured debt (or that of its fiscal
agent, if applicable) is rated not less than "AA" or its equivalent by the
rating agencies (or such lower ratings as the rating agencies would permit
without causing them to qualify, downgrade or withdraw any of the
then-current ratings of the certificates).
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The corporate trust office of the trustee responsible for administration of
the trust ("corporate trust office") is located at 11000 Broken Land Parkway,
Columbia, MD 21044-3562, Attention: Corporate Trust Services (CMBS) GMAC
Commercial Mortgage Securities, Inc., Mortgage Pass-Through Certificates, Series
1999-C3. All requests relating to the transfer of the Certificates should be
delivered to the trustee at Norwest Center, Sixth and Marquette, Minneapolis,
Minnesota 55479-0113, Attention: Corporate Trust Services (CMBS)-GMAC Mortgage
Securities, Inc., Mortgage Pass-Through Certificates, Series 1999-C3.
YEAR 2000 COMPLIANCE
The trustee agrees that by August 31, 1999 any custom-made software or
hardware designed, purchased or licensed by the trustee and used by the trustee
in the course of the operation or management of, or the compiling, reporting or
generation of data will not contain any deficiency
o in the ability of such software or hardware to identify correctly or
perform calculations or other processing with respect to dates after
December 31, 1999, or
o that would cause such software or hardware to be no longer fit for the
purpose for which it was intended by reason of the changing of the year
from 1999 to 2000.
YIELD AND MATURITY CONSIDERATIONS
YIELD CONSIDERATIONS
The yield to maturity of each class of certificates will depend on, among
other things:
o the purchase price of the certificates;
o the applicable pass-through rate;
o the actual characteristics of the mortgage loans; and
o the rate and timing of payments on the mortgage loans.
The Purchase Price of the Certificates
The amount by which the yield to maturity of an offered certificate may
vary from the anticipated yield will depend upon the degree to which that
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 that 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 that 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 that certificate could
result in an actual yield to such investor that is lower than the anticipated
yield. Generally, 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 that 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 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 fullyrecoup their initial investments.
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Applicable Pass-Through Rate
The pass-through rate for the Class A-1-a certificates will be fixed. 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 A-1-b, A-2, B,
C and 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 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
the offered certificates (other than the Class A-1-a 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 net mortgage rates could
result in a reduction in the weighted average net mortgage rate, thereby
reducing the pass-through rates for the Class X, E and F certificates and, to
the extent that the weighted average net mortgage rate is reduced below the
specified fixed rate with respect to the Class A-1-b, A-2, B, C and 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 Pool" in this prospectus supplement and "--Yield
Considerations--Rate and Timing of Principal Payments on the Mortgage Loans" and
"--Yield Sensitivity of the Class X Certificates" below.
Actual Characteristics of the Mortgage Loans
The yield to holders of the offered certificates will also depend on the
extent to which 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
o first, by the holders of the respective classes of subordinate
certificates, in reverse alphabetical order of class designation, to the
extent of amounts otherwise distributable on their certificates; and
o second, by the holders of the senior certificates.
Reductions in the balances of the principal balance certificates will also
reduce the notional amount of the Class X certificates. Any net aggregate
prepayment interest shortfall for each distribution date will be allocated on
that distribution date among each class of REMIC regular certificates, pro rata,
in accordance with the respective amounts of accrued certificate interest for
that class of certificates for that distribution date.
Rate and Timing of Payments on the Mortgage Loans
The yield to holders of the offered certificates 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,
their amortization schedules, the dates on which balloon payments are due and
the rate and timing of principal prepayments and other unscheduled collections
on the mortgage loans (including for this purpose collections resulting from
liquidations of mortgage loans due to defaults, casualties or condemnations
affecting the mortgaged properties, or purchases of mortgage loans out of the
trust). 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. See "Description of the Mortgage Pool--Prepayment
Provisions" and "Annex A--Earnout Loans" and "--Additional Collateral Loans" in
this prospectus supplement. 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
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completed. See "Servicing of the Mortgage Loans--Modifications, Waivers,
Amendments and Consents" in this prospectus supplement and "The Pooling and
Servicing Agreements--Realization Upon Defaulted Mortgage Loans" and "Legal
Aspects of Mortgage Loans--Foreclosure" in the prospectus.
The failure on the part of any borrower to pay its ARD loan on its
anticipated repayment date may result in significant delays in payments of
principal on that ARD loan and on the offered certificates. 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 that
address the historical prepayment experience of a large group of mortgage loans
comparable to the mortgage loans.
FACTORS THAT AFFECT THE RATE AND TIMING OF PAYMENTS AND DEFAULTS
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
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," "Description of the Mortgage Pool" and "Annex A--Earnout Loans"
and "--Additional Collateral Loans" in this prospectus supplement and "Risk
Factors" and "Yield and Maturity Considerations--Yield and Prepayment
Considerations" in the prospectus.
The rate of prepayment on the mortgage 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. See "Description of the Mortgage Pool--Terms and Conditions of the
Mortgage Loans" in this prospectus supplement.
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 the 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 CERTIFICATE INTEREST
As described under "Description of the Certificates--Distributions--
Application of the Available Distribution Amount" in this prospectus supplement,
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 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.
WEIGHTED AVERAGE LIFE
The weighted average life of a certificate refers to the average amount of
time that will elapse from the date of its issuance until each dollar allocable
to principal or the notional amount of that certificate is distributed to the
investor or the notional amount is reduced to zero, in the case of the Class X
certificates. For purposes of this prospectus supplement, the weighted average
life of a balance certificate is determined by
o multiplying the amount of each principal distribution or reduction of the
notional amount on the certificate by the number of years from the delivery
date to the related distribution date,
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o summing the results, and
o dividing the sum by the aggregate amount of the reductions in the principal
balance or notional amount of that certificate.
The weighted average life of any 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 or notional amount of the class of certificates to which the
certificate belongs. If the balloon payment on a balloon loan having a due date
after the determination date in any month is received on the stated maturity
date thereof, the excess of such payment over the related assumed monthly
payment will not be included in the available distribution amount until the
distribution date in the following month. As a result, the weighted average life
of the certificates may be extended.
Prepayments on mortgage loans may be measured by a prepayment standard or
model. The model used in this prospectus supplement is the "CPR" or constant
prepayment rate model. The CPR model assumes that a group of mortgage loans
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 the anticipated repayment date, in the case of an ARD loan). The
columns headed "25%," "50%," "75%," and "100%" assume that no prepayments are
made on any mortgage loan during that mortgage loan's prepayment lock-out,
defeasance or yield maintenance period 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, defeasance period or 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 or defeasance 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
"defeasance period" is any period during which the borrower may, under the terms
of the mortgage loan, exercise a defeasance option. A "yield maintenance period"
is any period during which the terms of the mortgage loan require the borrower
to make a yield maintenance payment together with any prepayment of the mortgage
loan.
The following tables indicate the percentage of the initial certificate
balance or initial notional amount of each class of offered certificates that
would be outstanding after each of the dates shown at the indicated CPR
percentages and the corresponding weighted average life of each of that class of
certificates. The tables have been prepared on the basis of the information set
forth on Annex A and the following maturity assumptions:
(1) the initial certificate balance or notional amount, as the case may be,
and the pass-through rate for each class of certificates are as set forth
in this prospectus supplement,
(2) the scheduled monthly payments for each mortgage loan are based on
payments of principal and interest (or of interest only, for those
mortgage loans identified on Annex A as being interest only or having an
interest only period) described on Annex A,
(3) all scheduled monthly payments (including balloon payments) are assumed
to be timely received on the first day of each month beginning in
September 1999,
(4) there are no delinquencies or losses on the mortgage loans, there are no
extensions of maturity on the mortgage loans, there are no appraisal
reduction amounts on the mortgage loans and there are no casualties or
condemnations affecting the mortgaged properties,
(5) prepayments are made on each of the mortgage loans at the indicated CPR
percentages provided 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 (13)),
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(6) the ARD loans mature on their respective anticipated repayment dates,
(7) all mortgage loans accrue interest under the method as specified in
Annex A,
(8) neither the servicer nor the depositor exercises its right of optional
termination described in this prospectus supplement,
(9) no mortgage loan is required to be repurchased by a mortgage loan
seller,
(10) no prepayment interest shortfalls are incurred and no prepayment
premiums are collected,
(11) there are no additional trust expenses,
(12) distributions on the certificates are made on the 15th day of each
month, beginning in September 1999,
(13) no prepayments are received on any mortgage loan during that mortgage
loan's prepayment lock-out period, defeasance period or yield
maintenance period ("LOP"),
(14) the prepayment provisions for each mortgage loan are as set forth on
Annex A,
(15) no prepayments are received due to the failure to satisfy the
requirements to release earnout amounts for each earnout loan (see
"Annex A--Earnout Loans"),
(16) the delivery date is August 30, 1999, and
(17) no prepayments are received on the loan identified as loan no. TA5222 as
a result of the failure of the borrower to post a letter of credit on or
before April 1, 2004 (see notes to Annex A).
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-a, Class A-1-b, Class A-2, Class B, Class C, Class D, Class
E and Class F certificates may mature and the Class X certificates may no longer
be entitled to receive distributions on a date 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 or notional amounts (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, the actual pre-tax yields on, or any other payment characteristics of,
any class of offered certificates may not correspond to any of the information
shown in the yield tables in this prospectus supplement, and the aggregate
purchase prices of the offered certificates may not be as assumed. 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-a, Class A-1-b, Class A-2,
Class B, Class C, Class D, Class E and Class F certificates and the percentage
of the initial certificate balance or notional amount of each such class of
certificates that would be outstanding after the closing date and each of the
distribution dates shown under the applicable assumptions at the indicated CPR
percentages.
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PERCENTAGES OF THE INITIAL CERTIFICATE BALANCE OF
THE CLASS A-1-A CERTIFICATES AT 0% CPR DURING LOCKOUT,
DEFEASANCE AND YIELD MAINTENANCE AND OTHERWISE AT INDICATED CPR
<TABLE>
<CAPTION>
PREPAYMENT ASSUMPTION (CPR)
-----------------------------------------------------------------------------
DATE 0% CPR 25% CPR 50% CPR 75% CPR 100% CPR
- ---- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Closing Date ............................. 100 100 100 100 100
August 15, 2000 .......................... 95 95 95 95 95
August 15, 2001 .......................... 89 89 89 89 89
August 15, 2002 .......................... 82 82 82 82 82
August 15, 2003 .......................... 74 74 74 74 74
August 15, 2004 .......................... 66 66 66 66 66
August 15, 2005 .......................... 57 57 57 57 57
August 15, 2006 .......................... 35 35 35 35 35
August 15, 2007 .......................... 25 25 25 25 25
August 15, 2008 .......................... 0 0 0 0 0
Weighted Average Life (in years) ......... 5.8 5.8 5.8 5.8 5.7
First Principal Payment Date ............. 9/15/1999 9/15/1999 9/15/1999 9/15/1999 9/15/1999
Last Principal Payment Date .............. 5/15/2008 5/15/2008 5/15/2008 5/15/2008 2/15/2008
</TABLE>
PERCENTAGES OF THE INITIAL CERTIFICATE BALANCE OF
THE CLASS A-1-B CERTIFICATES AT 0% CPR DURING LOCKOUT,
DEFEASANCE AND YIELD MAINTENANCE AND OTHERWISE AT INDICATED CPR
<TABLE>
<CAPTION>
PREPAYMENT ASSUMPTION (CPR)
-----------------------------------------------------------------------------
DATE 0% CPR 25% CPR 50% CPR 75% CPR 100% CPR
- --- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Closing Date ............................. 100 100 100 100 100
August 15, 2000 .......................... 100 100 100 100 100
August 15, 2001 .......................... 100 100 100 100 100
August 15, 2002 .......................... 100 100 100 100 100
August 15, 2003 .......................... 100 100 100 100 100
August 15, 2004 .......................... 100 100 100 100 100
August 15, 2005 .......................... 100 100 100 100 100
August 15, 2006 .......................... 100 100 100 100 100
August 15, 2007 .......................... 100 100 100 100 100
August 15, 2008 .......................... 92 92 91 91 88
August 15, 2009 .......................... 0 0 0 0 0
Weighted Average Life (in years) ......... 9.7 9.7 9.6 9.6 9.4
First Principal Payment Date ............. 5/15/2008 5/15/2008 5/15/2008 5/15/2008 2/15/2008
Last Principal Payment Date .............. 8/15/2009 7/15/2009 7/15/2009 7/15/2009 5/15/2009
</TABLE>
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PERCENTAGES OF THE INITIAL CERTIFICATE BALANCE OF
THE CLASS A-2 CERTIFICATES AT 0% CPR DURING LOCKOUT,
DEFEASANCE AND YIELD MAINTENANCE AND OTHERWISE AT INDICATED CPR
<TABLE>
<CAPTION>
PREPAYMENT ASSUMPTION (CPR)
-----------------------------------------------------------------------------
DATE 0% CPR 25% CPR 50% CPR 75% CPR 100% CPR
- ---- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Closing Date ............................. 100 100 100 100 100
August 15, 2000 .......................... 99 99 99 99 99
August 15, 2001 .......................... 98 98 98 98 98
August 15, 2002 .......................... 96 96 96 96 96
August 15, 2003 .......................... 95 95 95 95 95
August 15, 2004 .......................... 93 93 93 93 93
August 15, 2005 .......................... 91 91 91 91 91
August 15, 2006 .......................... 88 88 88 88 88
August 15, 2007 .......................... 86 85 85 85 80
August 15, 2008 .......................... 71 71 70 70 68
August 15, 2009 .......................... 0 0 0 0 0
Weighted Average Life (in years) ......... 8.9 8.9 8.8 8.8 8.6
First Principal Payment Date ............. 9/15/1999 9/15/1999 9/15/1999 9/15/1999 9/15/1999
Last Principal Payment Date .............. 8/15/2009 8/15/2009 7/15/2009 7/15/2009 5/15/2009
</TABLE>
PERCENTAGES OF THE INITIAL CERTIFICATE BALANCE OF
THE CLASS B CERTIFICATES AT 0% CPR DURING LOCKOUT,
DEFEASANCE AND YIELD MAINTENANCE AND OTHERWISE AT INDICATED CPR
<TABLE>
<CAPTION>
PREPAYMENT ASSUMPTION (CPR)
-----------------------------------------------------------------------------
DATE 0% CPR 25% CPR 50% CPR 75% CPR 100% CPR
- ---- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Closing Date ............................. 100 100 100 100 100
August 15, 2000 .......................... 100 100 100 100 100
August 15, 2001 .......................... 100 100 100 100 100
August 15, 2002 .......................... 100 100 100 100 100
August 15, 2003 .......................... 100 100 100 100 100
August 15, 2004 .......................... 100 100 100 100 100
August 15, 2005 .......................... 100 100 100 100 100
August 15, 2006 .......................... 100 100 100 100 100
August 15, 2007 .......................... 100 100 100 100 100
August 15, 2008 .......................... 100 100 100 100 100
August 15, 2009 .......................... 0 0 0 0 0
Weighted Average Life (in years) ......... 10.0 10.0 9.9 9.9 9.7
First Principal Payment Date ............. 8/15/2009 8/15/2009 7/15/2009 7/15/2009 5/15/2009
Last Principal Payment Date .............. 8/15/2009 8/15/2009 8/15/2009 8/15/2009 5/15/2009
</TABLE>
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PERCENTAGES OF THE INITIAL CERTIFICATE BALANCE OF
THE CLASS C CERTIFICATES AT 0% CPR DURING LOCKOUT,
DEFEASANCE AND YIELD MAINTENANCE AND OTHERWISE AT INDICATED CPR
<TABLE>
<CAPTION>
PREPAYMENT ASSUMPTION (CPR)
-----------------------------------------------------------------------------
DATE 0% CPR 25% CPR 50% CPR 75% CPR 100% CPR
- ---- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Closing Date ............................. 100 100 100 100 100
August 15, 2000 .......................... 100 100 100 100 100
August 15, 2001 .......................... 100 100 100 100 100
August 15, 2002 .......................... 100 100 100 100 100
August 15, 2003 .......................... 100 100 100 100 100
August 15, 2004 .......................... 100 100 100 100 100
August 15, 2005 .......................... 100 100 100 100 100
August 15, 2006 .......................... 100 100 100 100 100
August 15, 2007 .......................... 100 100 100 100 100
August 15, 2008 .......................... 100 100 100 100 100
August 15, 2009 .......................... 0 0 0 0 0
Weighted Average Life (in years) ......... 10.0 10.0 10.0 10.0 9.7
First Principal Payment Date ............. 8/15/2009 8/15/2009 8/15/2009 8/15/2009 5/15/2009
Last Principal Payment Date .............. 8/15/2009 8/15/2009 8/15/2009 8/15/2009 5/15/2009
</TABLE>
PERCENTAGES OF THE INITIAL CERTIFICATE BALANCE OF
THE CLASS D CERTIFICATES AT 0% CPR DURING LOCKOUT,
DEFEASANCE AND YIELD MAINTENANCE AND OTHERWISE AT INDICATED CPR
<TABLE>
<CAPTION>
PREPAYMENT ASSUMPTION (CPR)
-----------------------------------------------------------------------------
DATE 0% CPR 25% CPR 50% CPR 75% CPR 100% CPR
- ---- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Closing Date ............................. 100 100 100 100 100
August 15, 2000 .......................... 100 100 100 100 100
August 15, 2001 .......................... 100 100 100 100 100
August 15, 2002 .......................... 100 100 100 100 100
August 15, 2003 .......................... 100 100 100 100 100
August 15, 2004 .......................... 100 100 100 100 100
August 15, 2005 .......................... 100 100 100 100 100
August 15, 2006 .......................... 100 100 100 100 100
August 15, 2007 .......................... 100 100 100 100 100
August 15, 2008 .......................... 100 100 100 100 100
August 15, 2009 .......................... 0 0 0 0 0
Weighted Average Life (in years) ......... 10.0 10.0 10.0 10.0 9.7
First Principal Payment Date ............. 8/15/2009 8/15/2009 8/15/2009 8/15/2009 5/15/2009
Last Principal Payment Date .............. 8/15/2009 8/15/2009 8/15/2009 8/15/2009 5/15/2009
</TABLE>
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<PAGE>
PERCENTAGES OF THE INITIAL CERTIFICATE BALANCE OF
THE CLASS E CERTIFICATES AT 0% CPR DURING LOCKOUT,
DEFEASANCE AND YIELD MAINTENANCE AND OTHERWISE AT INDICATED CPR
<TABLE>
<CAPTION>
PREPAYMENT ASSUMPTION (CPR)
-----------------------------------------------------------------------------
DATE 0% CPR 25% CPR 50% CPR 75% CPR 100% CPR
- ---- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Closing Date ............................. 100 100 100 100 100
August 15, 2000 .......................... 100 100 100 100 100
August 15, 2001 .......................... 100 100 100 100 100
August 15, 2002 .......................... 100 100 100 100 100
August 15, 2003 .......................... 100 100 100 100 100
August 15, 2004 .......................... 100 100 100 100 100
August 15, 2005 .......................... 100 100 100 100 100
August 15, 2006 .......................... 100 100 100 100 100
August 15, 2007 .......................... 100 100 100 100 100
August 15, 2008 .......................... 100 100 100 100 100
August 15, 2009 .......................... 0 0 0 0 0
Weighted Average Life (in years) ......... 10.0 10.0 10.0 10.0 9.7
First Principal Payment Date ............. 8/15/2009 8/15/2009 8/15/2009 8/15/2009 5/15/2009
Last Principal Payment Date .............. 8/15/2009 8/15/2009 8/15/2009 8/15/2009 6/15/2009
</TABLE>
PERCENTAGES OF THE INITIAL CERTIFICATE BALANCE OF
THE CLASS F CERTIFICATES AT 0% CPR DURING LOCKOUT,
DEFEASANCE AND YIELD MAINTENANCE AND OTHERWISE AT INDICATED CPR
<TABLE>
<CAPTION>
PREPAYMENT ASSUMPTION (CPR)
-----------------------------------------------------------------------------
DATE 0% CPR 25% CPR 50% CPR 75% CPR 100% CPR
- ---- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Closing Date ............................. 100 100 100 100 100
August 15, 2000 .......................... 100 100 100 100 100
August 15, 2001 .......................... 100 100 100 100 100
August 15, 2002 .......................... 100 100 100 100 100
August 15, 2003 .......................... 100 100 100 100 100
August 15, 2004 .......................... 100 100 100 100 100
August 15, 2005 .......................... 100 100 100 100 100
August 15, 2006 .......................... 100 100 100 100 100
August 15, 2007 .......................... 100 100 100 100 100
August 15, 2008 .......................... 100 100 100 100 100
August 15, 2009 .......................... 0 0 0 0 0
Weighted Average Life (in years) ......... 10.0 10.0 10.0 10.0 9.8
First Principal Payment Date ............. 8/15/2009 8/15/2009 8/15/2009 8/15/2009 6/15/2009
Last Principal Payment Date .............. 8/15/2009 8/15/2009 8/15/2009 8/15/2009 6/15/2009
</TABLE>
PRICE/YIELD TABLES
The tables set forth below show the corporate bond equivalent ("CBE") yield
and weighted average life in years for each class of offered certificates (other
than the Class X certificates) under the maturity assumptions.
The yields provided 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 , 1999 to equal the assumed purchase prices, plus accrued
interest at the applicable pass-through rate as stated on the cover hereof from
and including ,
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<PAGE>
1999 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 classes of offered certificates and consequently does not purport to
reflect the return on any investment in those classes of offered certificates
when 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), WEIGHTED AVERAGE LIFE,
FIRST PRINCIPAL PAYMENT DATE AND LAST PRINCIPAL PAYMENT DATE
FOR THE CLASS A-1-A CERTIFICATES AT THE SPECIFIED CPRS
<TABLE>
<CAPTION>
0% CPR DURING LOCKOUT, DEFEASANCE AND YIELD
MAINTENANCE OTHERWISE AT INDICATED CPR
------------------------------------------------
ASSUMED PRICE (32NDS) 0% CPR 25% CPR 50% CPR 75% CPR 100% CPR
- --------------------- -------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Weighted Average Life (yrs.) .........
First Principal Payment Date .........
Last Principal Payment Date ..........
</TABLE>
PRE-TAX YIELD TO MATURITY (CBE), WEIGHTED AVERAGE LIFE,
FIRST PRINCIPAL PAYMENT DATE AND LAST PRINCIPAL PAYMENT DATE
FOR THE CLASS A-1-B CERTIFICATES AT THE SPECIFIED CPRS
<TABLE>
<CAPTION>
0% CPR DURING LOCKOUT, DEFEASANCE AND YIELD
MAINTENANCE OTHERWISE AT INDICATED CPR
------------------------------------------------
ASSUMED PRICE (32NDS) 0% CPR 25% CPR 50% CPR 75% CPR 100% CPR
- --------------------- -------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Weighted Average Life (yrs.) .........
First Principal Payment Date .........
Last Principal Payment Date ..........
</TABLE>
S-91
<PAGE>
PRE-TAX YIELD TO MATURITY (CBE), WEIGHTED AVERAGE LIFE,
FIRST PRINCIPAL PAYMENT DATE AND LAST PRINCIPAL PAYMENT DATE
FOR THE CLASS A-2 CERTIFICATES AT THE SPECIFIED CPRS
<TABLE>
<CAPTION>
0% CPR DURING LOCKOUT, DEFEASANCE AND YIELD
MAINTENANCE OTHERWISE AT INDICATED CPR
------------------------------------------------
ASSUMED PRICE (32NDS) 0% CPR 25% CPR 50% CPR 75% CPR 100% CPR
- --------------------- -------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Weighted Average Life (yrs.) .........
First Principal Payment Date .........
Last Principal Payment Date ..........
</TABLE>
PRE-TAX YIELD TO MATURITY (CBE), WEIGHTED AVERAGE LIFE,
FIRST PRINCIPAL PAYMENT DATE AND LAST PRINCIPAL PAYMENT DATE
FOR THE CLASS B CERTIFICATES AT THE SPECIFIED CPRS
<TABLE>
<CAPTION>
0% CPR DURING LOCKOUT, DEFEASANCE AND YIELD
MAINTENANCE OTHERWISE AT INDICATED CPR
------------------------------------------------
ASSUMED PRICE (32NDS) 0% CPR 25% CPR 50% CPR 75% CPR 100% CPR
- -------------------------------------- -------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Weighted Average Life (yrs.) .........
First Principal Payment Date .........
Last Principal Payment Date ..........
</TABLE>
S-92
<PAGE>
PRE-TAX YIELD TO MATURITY (CBE), WEIGHTED AVERAGE LIFE,
FIRST PRINCIPAL PAYMENT DATE AND LAST PRINCIPAL PAYMENT DATE
FOR THE CLASS C CERTIFICATES AT THE SPECIFIED CPRS
<TABLE>
<CAPTION>
0% CPR DURING LOCKOUT, DEFEASANCE AND YIELD
MAINTENANCE OTHERWISE AT INDICATED CPR
------------------------------------------------
ASSUMED PRICE (32NDS) 0% CPR 25% CPR 50% CPR 75% CPR 100% CPR
- --------------------- -------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Weighted Average Life (yrs.) .........
First Principal Payment Date .........
Last Principal Payment Date ..........
</TABLE>
PRE-TAX YIELD TO MATURITY (CBE), WEIGHTED AVERAGE LIFE,
FIRST PRINCIPAL PAYMENT DATE AND LAST PRINCIPAL PAYMENT DATE
FOR THE CLASS D CERTIFICATES AT THE SPECIFIED CPRS
<TABLE>
<CAPTION>
0% CPR DURING LOCKOUT, DEFEASANCE AND YIELD
MAINTENANCE OTHERWISE AT INDICATED CPR
------------------------------------------------
ASSUMED PRICE (32NDS) 0% CPR 25% CPR 50% CPR 75% CPR 100% CPR
- --------------------- -------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Weighted Average Life (yrs.) .........
First Principal Payment Date .........
Last Principal Payment Date ..........
</TABLE>
S-93
<PAGE>
PRE-TAX YIELD TO MATURITY (CBE), WEIGHTED AVERAGE LIFE,
FIRST PRINCIPAL PAYMENT DATE AND LAST PRINCIPAL PAYMENT DATE
FOR THE CLASS E CERTIFICATES AT THE SPECIFIED CPRS
<TABLE>
<CAPTION>
0% CPR DURING LOCKOUT, DEFEASANCE AND YIELD
MAINTENANCE OTHERWISE AT INDICATED CPR
------------------------------------------------
ASSUMED PRICE (32NDS) 0% CPR 25% CPR 50% CPR 75% CPR 100% CPR
- --------------------- -------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Weighted Average Life (yrs.) .........
First Principal Payment Date .........
Last Principal Payment Date ..........
</TABLE>
PRE-TAX YIELD TO MATURITY (CBE), WEIGHTED AVERAGE LIFE,
FIRST PRINCIPAL PAYMENT DATE AND LAST PRINCIPAL PAYMENT DATE
FOR THE CLASS F CERTIFICATES AT THE SPECIFIED CPRS
<TABLE>
<CAPTION>
0% CPR DURING LOCKOUT, DEFEASANCE AND YIELD
MAINTENANCE OTHERWISE AT INDICATED CPR
------------------------------------------------
ASSUMED PRICE (32NDS) 0% CPR 25% CPR 50% CPR 75% CPR 100% CPR
- --------------------- -------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Weighted Average Life (yrs.) .........
First Principal Payment Date .........
Last Principal Payment Date ..........
</TABLE>
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.
The mortgage loans may prepay at a different 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 table indicates 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
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<PAGE>
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., 4-16 is 4 16/32%) of the initial notional amount (without
accrued interest). Any differences between these 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 provided in the following table 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 , 1999 to equal the
assumed aggregate purchase price plus accrued interest at the initial
pass-through rate for the Class X certificates from and including , 1999
to but excluding the delivery date, and by converting these monthly rates
to semi-annual corporate bond equivalent rates. The calculation does not take
into account shortfalls in the 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).
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
certificates is likely to differ from those shown in the following table, 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.
The mortgage loans may not prepay in accordance with the maturity
assumptions at any particular rate, and the yield on the Class X certificates
may not conform to the yields described in this prospectus supplement. 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. As a result, 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.
S-95
<PAGE>
PRE-TAX YIELD TO MATURITY (CBE), WEIGHTED AVERAGE LIFE,
FIRST PAYMENT DATE AND LAST PAYMENT DATE
FOR THE CLASS X CERTIFICATES AT THE SPECIFIED CPRS
<TABLE>
<CAPTION>
0% CPR DURING LOCKOUT, DEFEASANCE AND YIELD
MAINTENANCE OTHERWISE AT INDICATED CPR
------------------------------------------------
ASSUMED PRICE (32NDS) 0% CPR 25% CPR 50% CPR 75% CPR 100% CPR
- --------------------- -------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Weighted Average Life (yrs.)* .........
First Payment Date ....................
Last Payment Date .....................
</TABLE>
*Based on reduction in the notional amount of the Class X certificates.
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<PAGE>
FEDERAL INCOME TAX CONSEQUENCES
The following summary of the anticipated material federal income tax
consequences of the purchase, ownership and disposition of offered certificates
is based on laws, regulations, including the REMIC regulations promulgated by
the Treasury Department (the "REMIC regulations"), rulings and decisions now in
effect or, with respect to regulations, proposed, all of which are subject to
change, possibly retroactively. To the extent that the following summary relates
to matters of law or legal conclusions with respect thereto, the summary
represents the opinion of Mayer, Brown & Platt, special United States federal
tax counsel for the depositor. This summary does not address the federal income
tax consequences of an investment in offered certificates applicable to all
categories of investors. For example, it does not discuss the federal income tax
consequences of the purchase, ownership and disposition of offered certificates
by investors that are subject to special treatment under the federal income tax
laws, including banks and thrifts, insurance companies, regulated investment
companies, dealers in securities, holders that will hold the offered
certificates as a position in a "straddle" for tax purposes or as part of a
"synthetic security" or "conversion transaction" or other integrated investment
comprised of the offered certificates and one or more other investments, foreign
investors, trusts and estates and pass-through entities, the equity holders of
which are any of the foregoing. Prospective investors should consult their tax
advisors regarding the federal, state, local and any other tax consequences to
them of the purchase, ownership and disposition of offered certificates.
For federal income tax purposes, three separate REMIC elections will be
made with respect to segregated asset pools which make up the trust, other than
any excess interest collected on the ARD loans. The resulting REMICs will be
referred to in this prospectus supplement as "REMIC I", "REMIC II" and "REMIC
III", respectively. Upon the issuance of the offered certificates, Mayer, Brown
& Platt, 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 Internal Revenue Code of 1986,
as amended, called 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; except to the extent
representing the right to excess interest on the ARD loans, the certificates
(other than the REMIC residual 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 "Federal Income Tax Consequences--REMICs" in the prospectus.
ORIGINAL ISSUE DISCOUNT AND PREMIUM
The Class X certificates will be, and other offered certificates may be,
treated as having been issued with original issue discount for federal income
tax reporting purposes. For purposes of computing the rate of accrual of
original issue discount, market discount and premium, if any, for federal income
tax purposes, it will be assumed that there are no prepayments on the mortgage
loans, except that it is assumed that the ARD loans will pay their respective
outstanding principal balances on their related anticipated repayment dates. No
representation is made as to the actual expected rate of prepayment of any
mortgage loan. See "Federal Income Tax Consequences--REMICs--Taxation of Owners
of REMIC Regular Certificates--Original Issue Discount" in the prospectus. The
Class M certificates, in addition to evidencing REMIC regular interests, will
also evidence undivided beneficial interests in the portion of the trust
consisting of any excess interest collected on ARD loans. Such beneficial
interests will constitute interests in a grantor trust for federal income tax
purposes.
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
issues relevant to, or are not applicable to, securities such as the
certificates. For example, because certain classes of certificates bear interest
at the lesser of a fixed rate or a rate based on the weighted average mortgage
rate, it is not entirely clear that the method intended to be used by the trust
fund in reporting
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<PAGE>
such interest (i.e., as "qualified stated interest") would be recognized by the
IRS. In addition, there is considerable uncertainty concerning the application
of Section 1272(a)(6) of the Code and the OID Regulations to REMIC certificates
such as the Class X certificates. 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 "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 the 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 on the Class X certificates generally would be to report
all income for such certificates as original issue discount for each period,
computing the original issue discount
o 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, the certificates, thereby treating the certificates
as fixed rate instruments to which the original issue discount computation
rules described in the prospectus can be applied, and
o 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 for such period.
See "Federal Income Tax Consequences--REMICs--Taxation of Owners of REMIC
Regular Certificates--Original Issue Discount" in the prospectus.
If the method for computing original issue discount described in the
prospectus results in a negative amount to a holder of a Class X certificate for
any period, the amount of original issue discount allocable to such period would
be zero and the certificateholder will be permitted to offset the negative
amount only against future original issue discount (if any) on the certificate.
Although the matter is not free from doubt, a holder of a Class X certificate
may be permitted to deduct a loss to the extent that his or her remaining basis
in the certificate exceeds the maximum amount of future payments to which the
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 certificates may
be able to select a method for recognizing original issue discount that differs
from that used by the trustee in preparing reports to certificateholders and the
IRS. Prospective investors are advised to consult their tax advisors concerning
the treatment of any original issue discount on purchased certificates.
Prepayment premiums collected on the mortgage loans will be distributed to
the holders of each class of certificates entitled to the prepayment premiums as
described in this prospectus supplement. It is not 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 that the class of certificates is
entitled to 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 clear
and certificateholders should consult their tax advisors concerning the
treatment of prepayment premiums.
Certain classes of certificates may be treated for federal income tax
purposes as having been issued at a premium. Whether any holder of a class of
certificates will be treated as holding a certificate with
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<PAGE>
amortizable bond premium will depend on the certificateholder's purchase price
and the distributions remaining to be made on the certificate at the time of its
acquisition by the 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 "Federal Income Tax
Consequences--REMICs--Taxation of Owners of REMIC Regular Certificates--Premium"
in the prospectus.
NEW WITHHOLDING REGULATIONS
The Treasury Department has issued new regulations which make modifications
to the withholding, backup withholding, and information reporting rules
described in the prospectus. The new regulations attempt to unify certification
requirements and to modify reliance standards. The new regulations will be
generally effective for payments made after December 31, 2000. Prospective
investors are urged to consult their tax advisors regarding the new regulations.
CHARACTERIZATION OF INVESTMENTS IN OFFERED CERTIFICATES
Class M certificateholders' right to receive excess interest will be
treated as "stripped coupons" under Section 1286 of the Code. Because excess
interest will arise on the ARD loans only if (contrary to the prepayment
assumption utilized in determining the rate of accrual of original issue
discount, as described above) they do not prepay on their related anticipated
repayment dates, for federal income tax information reporting purposes it will
initially be assumed that no such excess interest will be paid. Consequently,
excess interest will not be reported as income in federal income tax information
reports sent to certificateholders entitled thereto until such excess interest
actually accrues. Similarly, no portion of such holders' purchase price of their
certificates will be treated as allocable to their right to receive possible
distributions of excess interest. However, the Internal Revenue Service might
conceivably disagree with this treatment and assert that additional income
should be accrued with respect to projected possible payments of excess interest
in advance of its actual accrual, that additional original issue discount income
should be accrued with respect to the affected certificates, or both. Class M
certificateholders should consult with their tax advisors regarding the overall
tax consequences of their right to receive excess interest.
The offered certificates will be "real estate assets" within the meaning of
Section 856(c)(4)(A) of the Code generally in the same proportion that the
assets of the trust 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 generally 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 Pool" in this prospectus supplement.
For further information regarding the federal income tax consequences of
investing in the offered certificates, see "Federal Income Tax
Consequences--REMICs" in the prospectus.
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<PAGE>
METHOD OF DISTRIBUTION
The depositor has agreed to sell, and Deutsche Bank Securities Inc. and
Goldman, Sachs & Co. have each agreed to purchase, the portion of the
certificates of each class listed opposite its name in the table below. The
terms of these purchases are governed by an underwriting agreement, dated August
, 1999, among the depositor, GMACCM, and each of the underwriters.
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,
Cedelbank and Euroclear on or about August , 1999, against payment therefor in
immediately available funds.
ALLOCATION TABLE
<TABLE>
<CAPTION>
UNDERWRITER CLASS X CLASS A-1-A CLASS A-1-B CLASS A-2 CLASS B CLASS C CLASS D CLASS E CLASS F
--------------- --------- ------------- ------------- ----------- --------- --------- --------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Deutsche Bank
Securities Inc. ...... % % % % % % % % %
Goldman, Sachs & Co. % % % % % % % % %
- - - - - - - - -
--- --- --- --- --- --- --- --- ---
Total ................. 100% 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. If any underwriter defaults, 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 the sale. Proceeds to the
depositor from the sale of the offered certificates, before deducting expenses
payable by the depositor to the underwriters, will be approximately [ ]% 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.
Deutsche Bank Securities Inc. is an affiliate of GACC, Goldman, Sachs &
Co. is an affiliate of GSMC and Newman and Associates, Inc. is an affiliate of
GMACCM.
The depositor will indemnify the underwriters, and under limited
circumstances the underwriters will, severally and not jointly, indemnify the
depositor, against certain civil liabilities under the Securities Act of 1933 or
contribute to payments to be made in respect thereof.
A secondary market for the offered certificates may not develop and, if it
does develop, it may not continue. The primary source of ongoing information
available to investors concerning the offered certificates will be the trustee
reports discussed in this prospectus supplement under "Description of the
Certificates--Reports to Certificateholders; Available Information." Except as
described in this prospectus supplement under "Description of the
Certificates--Reports to Certificateholders; Available Information," any
additional information regarding the offered certificates may not be available
through any other source. In addition, the depositor is not aware of any source
through which price information about
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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 Mayer, Brown
& Platt and for the underwriters by Brown & Wood LLP.
RATINGS
The offered certificates are required to receive ratings from Fitch and
Moody's that are not lower than those indicated under "Transaction Overview."
The ratings of the offered certificates address the likelihood of the
timely receipt by holders thereof of all payments of interest (other than excess
interest) to which they are entitled on each distribution date and the ultimate
receipt by holders thereof of all payments of principal to which they are
entitled, if any, by the July, 2032 distribution date. The ratings take into
consideration the credit quality of the mortgage pool, structural and legal
aspects associated with the certificates, and the extent to which the payment
stream from the mortgage pool is adequate to make payments of principal and
interest required under the offered certificates.
The ratings of the offered certificates do not, however, address any of the
following:
o the likelihood or frequency of voluntary or involuntary principal
prepayments on the mortgage loans,
o the degree to which prepayments might differ from those originally
anticipated,
o whether and to what extent prepayment premiums will be collected with
prepayments or the corresponding effect on yield to investors,
o whether and to what extent excess interest will be collected on any ARD
loan,
o whether and to what extent default interest will be collected on the
mortgage loans, and
o the tax treatment of payments on the offered certificates. Generally, the
ratings address credit risk and not prepayment risk.
As described in this prospectus supplement, the amounts payable on the
Class X certificates do not include principal. If all the mortgage loans were to
prepay in the initial month, the Class X certificates would receive only a
single month's interest (without regard to any prepayment premiums that may be
collected). As a result, the Class X certificateholders would suffer a nearly
complete loss of their investment. However, all amounts "due" to such
certificateholders have been paid, and this result would be consistent with the
ratings assigned by the rating agencies to the Class X certificates. The ratings
of the Class X certificates by the rating agencies 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 in this
prospectus supplement. 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 if rapid prepayments
of the mortgage loans (including both voluntary and involuntary prepayments)
occur. The notional amount upon which interest is calculated for the Class X
certificates 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 reduced from time to time. As a
result, the ratings of the Class X certificates should be evaluated
independently from similar ratings on other types of securities.
Any rating agency not requested to rate the offered certificates may
nonetheless issue any rating to any class thereof. 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 any
rating agency rating such class.
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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 a security and is subject to change or
withdrawal at any time by the assigning rating agency.
LEGAL INVESTMENT
As of the date of their issuance, any offered certificates rated in the
category of "AAA" or "AA" (or the equivalent) by at least one rating agency will
constitute "mortgage related securities" for the purposes of the Secondary
Mortgage Market Enhancement Act of 1984 ("SMMEA"). All other offered
certificates (the "Non-SMMEA certificates") will not constitute "mortgage
related securities" for purposes of SMMEA. As a result, the appropriate
characterization of the Non-SMMEA certificates under various legal investment
restrictions, and thus the ability of investors subject to these restrictions to
purchase the Non-SMMEA certificates of any class, may be subject to significant
interpretative uncertainties. In addition, institutions whose investment
activities are subject to review by federal or state regulatory authorities may
be or may become subject to restrictions in certain forms of mortgage related
securities. The depositor makes no representation 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
If you are 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"), you should review with your counsel whether your 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 to such "prohibited transactions."
If you purchase or hold the Class A and Class X certificates by, on behalf
of or with "plan assets" of a Plan, your purchase may qualify for exemptive
relief under the Exemption, as described under "ERISA Considerations--Prohibited
Transaction Exemption" in the prospectus and similar exemptions granted to each
of the Underwriters (see Prohibited Transaction Exemption "PTE" 89-88, 54 Fed.
Reg. 42581 (1989), PTE 94-29, 59 Fed. Reg. 14675 (1994) and FAN 97-03-E
(December 9, 1996) (unpublished), each as amended by Prohibited Transaction
Exemption 97-34, 62 Fed. Reg. 39021 (1997)). To qualify for the exemption,
however, the Plan must meet a number of conditions, including the requirement
that it 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, and that at the time of acquisition, the certificates are rated in one
of the top three rating categories by at least one rating agency. When it issued
the exemption, the DOL did not consider mortgages containing defeasance
provisions as described in this prospectus supplement. Accordingly, it is not
clear what the impact on the exemption would be if such defeasance provisions
were exercised. 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, if you purchase a Class B, Class C, Class
D, Class E or Class F certificate or any interest therein, you will be deemed to
have represented by such purchase that either: (a) you are not a Plan and you
are not purchasing such certificates by or on behalf of, or with "plan assets"
of, any Plan or (b) your purchase of any such certificate by or on behalf of, or
with "plan 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 or the servicer to any
obligation in addition to those undertaken in the pooling and servicing
agreement, and the following conditions are met: (1) the source of funds that
you used to purchase such certificate is an "insurance company general account"
(as such
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term is defined in PTCE 95-60) and (2) 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.
If you are an insurance company and you would like to invest your general
account assets in the offered certificates, you should consult with your legal
advisors about whether Section 401(c) of ERISA, as described under "ERISA
Considerations--Insurance Company General Accounts" in the prospectus, may apply
to you. The DOL issued proposed regulations under Section 401(c) on December 22,
1997, but the required final regulations have not been issued as of the date of
this prospectus supplement.
If you are a Plan fiduciary or other person considering whether to purchase
an offered Certificate on behalf of or with "plan assets" of a Plan, you should
consult with your counsel about whether the fiduciary responsibility provisions
of ERISA and the prohibited transaction provisions of ERISA and Section 4975 of
the Code may apply to such investment, and whether the Exemption or any other
prohibited transaction exemption may be available in connection with your
purchase. See "ERISA Considerations" in the prospectus.
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<PAGE>
INDEX OF SIGNIFICANT DEFINITIONS
<TABLE>
<S> <C>
accredited investor ......................... S-102
accrued certificate interest ................ S-69
Additional trust expenses ................... S-74
advances .................................... S-56
Annual debt service ......................... A-2
appraisal reduction amount .................. S-76
Appraised value ............................. A-2
ARD loans ................................... S-16
ARD LTV ..................................... A-3
assumed monthly payment ..................... S-70
available distribution amount ............... S-65
balloon loans ............................... S-28
Balloon or ARD balance ...................... A-3
balloon payment interest excess ............. S-55
balloon payment interest shortfall .......... S-55
base year ................................... S-78
Biltmore Fashion Park loan .................. S-34
CBE ......................................... S-90
Cedelbank participants ...................... S-62
Class A principal distribution
cross-over date ............................. S-68
Class A-1 directed principal cash
flow amounts ................................ S-72
Class A-2 directed principal cash
flow amounts ................................ S-72
Class X components .......................... S-63
clearance cooperative ....................... S-62
CLTV ........................................ A-2
Code ........................................ S-97
Comerica loan ............................... S-43
comparative financial status report ......... S-78
controlling class ........................... S-53
corporate trust office ...................... S-82
corrected mortgage loan ..................... S-52
CPR ......................................... S-85
cross-collateralized mortgage loans ......... S-32
CSSA periodic loan file ..................... S-78
current LTV ................................. A-2
Cut-off date loan-to-value ratio ............ A-2
cut-off date LTV ............................ A-2
debt service coverage ratio ................. S-5
defeasance .................................. A-3
defeasance collateral ....................... S-30
</TABLE>
<TABLE>
<S> <C>
defeasance option ........................... S-30
defeasance period ........................... S-85
delinquent loan status report ............... S-77
depositories ................................ S-61
determination date .......................... S-64
discount rate ............................... S-72
distributable certificate interest .......... S-69
distribution date statement ................. S-77
DSC Ratio ................................... A-2
DSCR ........................................ A-2
due date .................................... S-30
due-on-encumbrance .......................... S-32
due-on-sale ................................. S-32
Equity Inns loan participation .............. S-38
Euroclear operator .......................... S-62
Euroclear participants ...................... S-62
excess interest ............................. S-28
Excess liquidation proceeds ................. S-73
extraordinary prepayment interest
shortfall ................................... S-56
Fitch ....................................... S-10
foreclosure property ........................ S-24
GACC ........................................ S-44
GLA ......................................... S-34
global securities ........................... D-1
GMACCM ...................................... S-44
group 1 mortgage loans ...................... S-65
group 2 mortgage loans ...................... S-65
GSMC ........................................ S-45
historical loan modification report ......... S-77
historical loss estimate report ............. S-78
interest reserve account .................... S-73
interest reserve loans ...................... S-73
liquidation fee ............................. S-55
loan group 1 distribution amount ............ S-66
loan group 1 principal amounts .............. S-71
loan group 2 distribution amount ............ S-66
loan group 2 principal amounts .............. S-71
loan-to-value ratio ......................... A-2
lock ........................................ A-3
lock-up ..................................... D-1
LOP ......................................... S-86
master servicer ............................. S-51
</TABLE>
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<PAGE>
<TABLE>
<S> <C>
master servicing fee rate .............. S-56
mezzanine debt ......................... S-33
modified mortgage loan ................. S-77
monthly payments ....................... S-30
Moody's ................................ S-10
Mortgage rate .......................... A-3
net aggregate prepayment interest
shortfall .............................. S-69
net mortgage rate ...................... S-64
NOI adjustment worksheet ............... S-79
Non-SMMEA certificates ................. S-102
Occupancy .............................. A-3
occupancy as of date ................... A-3
One Colorado Place loan ................ S-41
operating adviser ...................... S-52
operating statement analysis ........... S-78
pass-through rate ...................... S-63
P&I advances ........................... S-75
Plan ................................... S-102
prepayment interest excess ............. S-55
prepayment interest shortfall .......... S-55
prepayment lock-out period ............. S-85
prepayment premium ..................... S-29
prepayment premium entitlement ......... S-71
Prepayment provisions .................. A-3
Prime Outlets loan ..................... S-36
principal balance certificates ......... S-63
principal distribution amount .......... S-70
PTE .................................... S-102
purchase price ......................... S-47
qualified mortgage ..................... S-57
qualified mortgages .................... S-99
rated final distribution date .......... S-57
real estate assets ..................... S-99
Realized losses ........................ S-74
reimbursement rate ..................... S-76
related proceeds ....................... S-56
REMIC I ................................ S-97
REMIC II ............................... S-97
</TABLE>
<TABLE>
<S> <C>
REMIC III .............................. S-97
REMIC regulations ...................... S-97
REO property ........................... S-60
REO status report ...................... S-78
REO tax ................................ S-59
replacement mortgage loan .............. S-48
replacement special servicer ........... S-53
required appraisal loan ................ S-76
Saks Fifth Avenue ...................... S-35
Scheduled maturity date LTV ............ A-3
servicer watch list .................... S-78
Servicing advances ..................... S-56
servicing fee .......................... S-54
Servicing fee rate ..................... A-3
servicing standard ..................... S-51
SMMEA .................................. S-102
special servicer ....................... S-51
special servicing events ............... S-51
special servicing fee .................. S-54
specially serviced mortgage loan ....... S-51
sq. ft ................................. A-2
Square feet ............................ A-2
stated principal balance ............... S-64
subordinate available distribution
amount ................................. S-68
Term to maturity ....................... A-3
terms and conditions ................... S-62
Transaction Overview ................... S-101
trustee reports ........................ S-77
underwritten NCF ....................... A-1
Underwritten net cash flow ............. A-1
Units .................................. A-3
U.S. Person ............................ D-3
UW NCF ................................. A-1
UW NCF DSCR ............................ A-2
voting rights .......................... S-80
weighted average net mortgage rate ..... S-64
withheld amounts ....................... S-73
workout fee ............................ S-54
</TABLE>
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<PAGE>
ANNEX A
CHARACTERISTICS OF THE MORTGAGE LOANS
The schedule and tables appearing in this Annex A set forth certain
information for the mortgage loans and mortgaged properties. The information is
presented, where applicable, as of the cut-off date for each mortgage loan and
the related mortgaged properties. 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. The 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 would not be the same as the stated
underwritten net cash flow for such mortgaged property as provided 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 generally accepted accounting principles 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 provided in this prospectus supplement for any
mortgaged property intended to represent such future net cash flow.
In the schedule and tables provided in this Annex A, for mortgage loans
evidenced by one mortgage note, but secured by multiple mortgaged properties,
for some purposes 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 have the following meanings, as
modified, 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" for any
mortgaged property means an estimate of cash flow available for debt service in
a typical year of stable, normal operations. Generally, 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), (c) capital expenditures and reserves for
capital expenditures, including tenant improvement costs and leasing
commissions, as applicable, and (d) allowance for vacancies and losses.
Underwritten net cash flow generally does not reflect interest expense and
non-cash items such as depreciation and amortization. The underwritten net cash
flow for each mortgaged property is calculated on the basis of numerous
assumptions and subjective judgments, which, if ultimately proven erroneous,
could cause the actual net cash flow for such mortgaged property to differ
materially from the underwritten net cash flow for any mortgaged property. Some
assumptions and subjective judgments relate to future events, conditions and
circumstances, including future expense levels, the re-leasing of vacant space
and the continued leasing of occupied space, that will be affected by a variety
of complex factors over which none of the depositor, the sellers or the servicer
have control. In some cases, the underwritten net cash flow for any mortgaged
property is higher, and may be materially higher, than the annual net cash flow
for that mortgaged property, based on historical operating statements.
In determining underwritten net cash flow for a mortgaged property, the
seller 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 seller calculated stabilized estimates of cash flow
that took into consideration historical financial statements (where available),
material changes in the operating position of a mortgaged property of which the
applicable 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
A-1
<PAGE>
commission and tenant improvement reserves. In some cases, the applicable
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 a decrease in the estimate of
underwritten net cash flow derived therefrom) based upon the seller's own
analysis of those operating statements and the assumptions applied by the
respective borrowers in preparing those statements and information. In some
instances, for example, property management fees and other expenses may have
been taken into account in the calculation of underwritten net cash flow even
though these expenses may not have been reflected in actual historic operating
statements. In most of those cases, the information was annualized, with
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 seller in determining
the presented operating information.
2. "Annual debt service" generally means, for any mortgage loan, 12 times
the monthly payment in effect as of the cut-off date for such mortgage loan or,
for some mortgage loans that pay interest for only a period of time, 12 times
the monthly payment in effect at the end of such period.
3. "UW NCF DSCR," "underwritten NCF DSCR," "debt service coverage ratio,"
"DSC Ratio" or "DSCR" means, for any mortgage loan, (a) the underwritten net
cash flow for the mortgaged property, divided by (b) the annual debt service for
such mortgage loan, assuming for the purposes of this Annex A, except as
otherwise indicated, in the case of the mortgage loans providing for earn-out
reserves (which, if the conditions for release are not met by a certain date,
would be used to partially prepay or defease the mortgage loan), that the
principal balance of the mortgage loan is reduced by the amount of the earn-out.
Generally, 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 measure only 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 NCF DSCRs are presented in
this prospectus supplement 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. As a result, no assurance can be given, and no
representation is made, that the underwritten NCF DSCRs accurately reflect that
ability. The underwritten NCF DSCR for the interest-only mortgage loans is based
on the payment due after the interest-only period, and for the step amortization
mortgage loans is based on the payment due as of the cut-off date or the payment
due after the interest-only period, as applicable.
4. "Appraised value" means, for any mortgaged property, the appraiser's
adjusted value as stated in the most recent third-party appraisal available to
the depositor. In some cases, the appraiser's adjusted value takes into account
certain repairs or stabilization of operations. In some cases in which the
appraiser assumed the completion of repairs, such repairs were, generally,
either completed before the delivery date or the seller has taken 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.
5. "Cut-off date loan-to-value ratio," "loan-to-value ratio," "cut-off date
LTV," "current LTV," or "CLTV" means, with respect to any mortgage loan, (a) the
cut-off date balance of that mortgage loan (generally net of earn-out reserves
or additional collateral, if applicable) divided by (b) the appraised value of
the mortgaged property or mortgaged properties. For mortgage loans for which
earn-out reserves have been established, cut-off date loan-to-value ratio is
shown assuming that the earn-out is not achieved, except as otherwise indicated.
6. "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, combination retail office facility or other
special purpose property, the square footage of the net rentable or leasable
area.
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<PAGE>
7. "Units" means: (1) 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 the apartment and (2) in the case of a mortgaged property
operated as a hospitality property, the number of guest rooms. For purposes of
this Annex A, the total number of units shown for certain multifamily properties
may be greater than the total number of multifamily units shown in the
multifamily schedule because certain of the multifamily properties have
commercial units in addition to multifamily units.
8. "Occupancy" 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") or as
specified by the borrower or as derived from the mortgaged property's rent
rolls, 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.
9. "Balloon or ARD balance" means, for any balloon loan or ARD loan, the
principal amount that will be due at maturity or on the anticipated repayment
date for that balloon loan or ARD loan. 58 loans representing 35.90% of the
aggregate cut-off date balance accrue interest on an actual/360 basis but have a
monthly payment calculated on a 30/360 schedule. Accordingly, the actual
amortization term is longer for these loans than the stated amortization term
reflected in this Annex A.
10. "Scheduled maturity date LTV" or "ARD LTV" means, for any balloon loan
or ARD loan, the Balloon or ARD Balance for that mortgage loan divided by the
appraised value of the related mortgaged property.
11. "Mortgage rate" means, for any mortgage loan, the mortgage rate in
effect as of the cut-off date for that mortgage loan.
12. "Servicing fee rate" for each mortgage loan is the percentage rate per
annum provided in Annex A for such mortgage loan at which compensation is
payable for the servicing of that mortgage loan (which includes the master
servicing fee rate) and at which compensation is also payable to the trustee.
13. "Prepayment provisions" for each mortgage loan are: "lock," which means
the duration of lockout period, and "defeasance," which means the duration of
any defeasance period. The number following the "/" is the number of months for
which the related call protection provision is in effect, exclusive of the
maturity date for calculation purposes only.
14. "Term to maturity" means, for any mortgage loan, the remaining term, in
months, from the cut-off date for that mortgage loan to the earlier of the
related maturity date or anticipated repayment date.
15. In those instances where the same tenant leases space under multiple
leases, the date shown as the "Largest Tenant Lease Expiration" is the earliest
termination date of any of such leases.
INTEREST ONLY LOANS
Loan Number 21674. The mortgage loan requires monthly payments of interest
only (calculated using actual/360 interest accrual method) from July 10, 1999
through June 10, 2001. Commencing on July 10, 2001 and continuing through
maturity, monthly payments of principal and interest in the amount of
$132,474.71 are required.
Loan Number 22232. The mortgage loan requires monthly payments of interest
only (calculated using actual/360 interest accrual method) from September 10,
1999 through August 10, 2001. Commencing on September 10, 2001 and continuing
through maturity, monthly payments of principal and interest in the amount of
$65,407.85 are required.
Loan Number 22673. The mortgage loan requires monthly payments of interest
only (calculated using actual/360 interest accrual method) from August 10, 1999
through July 10, 2000. Commencing on August 10, 2000 and continuing through
maturity, monthly payments of principal and interest in the amount of
$575,491.93 are required.
A-3
<PAGE>
Loan Number 22941. The mortgage loan requires monthly payments of principal
only (calculated using actual/360 interest accrual method) from September 10,
1999 through August 10, 2001. Commencing on September 10, 2001 and continuing
through maturity, monthly payments of principal and interest in the amount of
$54,876.08 are required.
Loan Number 834884757. The mortgage loan requires monthly payments of
interest only (calculated using an actual/360 interest accrual method) from
October 1, 1999 through August 1, 2003. Commencing on September 1, 2003 and
continuing through maturity, monthly payments of principal and interest in the
amount of $168,605.53.
Loan Number 090001263. The mortgage loan requires monthly payments of
interest only (calculated using an actual/360 interest accrual method) from
September 1, 1999 through its maturity on August 1, 2009 in the amount of
$70,608.96.
CERTAIN REPLACEMENT RESERVES AND TENANT IMPROVEMENT AND LEASING COMMISSION
RESERVES
Loan Number 090001264. The mortgage loan requires a New Lease Escrow Fund
to be established at closing with a deposit of $45,000.00. These funds will be
released to the borrower when the new lease conditions are met. These conditions
will be met when the borrower enters into a lease covering the space in the
Improvements identified as Suite 350 containing not less than 4,326 net rentable
square feet for a term of not less than three years at a basic rental rate of
not less than $16.00 per square foot.
Loan Number 090001253. The mortgage loan requires monthly reserve payments
in the amount of $4,166.67 to the Rollover Escrow Fund in connection with the
Albertson's Lease. The borrower shall not be required to make any deposits into
the Fund in excess of $350,000.00. Also the borrower is required to deposit any
funds received from the tenant under the Albertson's lease in to the Rollover
Escrow Fund.
Loan Number 914565048. The mortgage loan requires the borrower to deposit
$100,000.00 at closing into the Rollover Escrow Fund. If at any time the balance
in the Fund goes below $100,000.00 the borrower must pay monthly deposits of
$10,000.00 to the Fund until the balance in the Fund is again up to $100,000.00.
Loan Number 090001243. The mortgage loan requires the borrower to deposit
$100,000.00 at closing into the Astoria Escrow Fund for tenant improvement and
leasing commission obligations incurred with respect to the Astoria Premises
leased to Astoria Federal Mortgage.
Loan Number 090001254. The mortgage loan requires the borrower to make
monthly payments of $6,330.00 into the Rollover Escrow Fund. Once the balance of
the Fund reaches $250,000.00, monthly payments will not be collected. If the
balance falls below $250,000.00, then monthly payments will begin until the
balance reaches $250,000.00. The Borrower deposited $137,862.00 into the Near
Term Rollover Escrow Fund for expenses relating to the renewal of the SSC Yoga,
Zero Pro Shop, Hair Pro and 4M Cleaners leases.
Loan Number 090001256. The mortgage loan requires the borrower to deposit
$150,000.00 for tenant improvements and leasing commission obligations related
to the Wiener's Store lease. Once the balance of the Fund reaches $250,000.00,
monthly payments will not be collected. If the balance falls below $250,000.00,
then monthly payments will begin until the balance reaches $250,000.00
Loan Number 090001261. The mortgage loan requires the borrower to make
monthly payments of $1,283.00 into the Rollover Escrow Fund. Once the balance of
the Fund reaches $50,000.00, monthly payments will not be collected. If the
balance falls below $50,000.00, then monthly payments will begin until the
balance reaches $50,000.00. The Borrower was also required to fund $9,600.00
into the Free Rent Reserve Account. These funds will be released when the free
rent period of the Wilkerson Printing lease has expired.
Loan Number 090001251. The mortgage loan requires the borrower to make
monthly payments of $417.00 into the Rollover Escrow Fund for tenant
improvements and leasing commissions pertaining to the Michael's Store and
Payless Shoesource leases. The renewal of the Michael's lease cannot be any
less than 19,510 sq. ft. at no less than $6.50 a sq. ft. and for a term not
less than five years. The renewal of the Payless lease cannot be any less than
3,000 sq. ft. at no less than $12.00 a sq. ft. and for a term not less than
five years.
A-4
<PAGE>
Loan Number 834884757. The mortgage loan requires a two month Payment
Reserve established at closing for $425,718.40. This reserve is two months of
principal and interest plus any applicable reserves. Funds can be drawn from the
reserve in the event that the mortgagee has not received the payment within five
days of the date the monthly payment is due.
Loan Number 21674. The borrower has posted a letter of credit in lieu of a
required deposit of $700,000 and monthly payments of $5,500 into a tenant
improvement and leasing commission reserve. The borrower has posted a letter of
credit in lieu of required monthly payments of $9,121.25 into a replacement
reserve.
Loan Number 22040. The borrower has posted a letter of credit in lieu of a
required initial deposit of $60,000 into a tenant improvement and leasing
commission reserve. The mortgage loan also requires monthly tenant improvement
leasing commission reserve payments in the amount of $5,000 until the balance
reaches $350,000.
Loan Number 22686. The mortgage loan requires the borrower to deliver a
letter of credit in the amount of $250,000 as additional security for the Loan
pending delivery of an acceptable subordination, nondisturbance and attornment
agreement from each of the required tenants.
Loan Number 22738. The mortgage loan requires monthly tenant improvements
and leasing commissions payments in the amount of $4,499. The borrower may
provide a letter of credit in lieu of the monthly payments.
Loan Number 22868. The mortgage loan requires an initial deposit of
$800,000 or a letter of credit at closing for tenant improvement and leasing
commision reserves and debt service reserves.
Loan Number 25168. The mortgage loan requires monthly reserve payments in
an amount equal to one-twelfth of five percent of the total gross revenues
derived from the operation of the property during the immediately preceding
calendar year for replacements and capital improvements.
Loan Number 22103. The mortgage loan requires monthly reserve payments in
an amount equal to one-twelfth of four percent of the total gross revenues
derived from the operation of the properties during the immediately preceding
calendar year.
Loan Number 23290. The mortgage loan requires monthly reserve payments in
an amount equal to one-twelfth of five percent of the total gross revenues
derived from the operation of the properties during the immediately preceding
calendar year.
Loan Number 24117. The mortgage loan requires monthly reserve payments in
an amount equal to one-twelfth of four percent of the total gross revenues
derived from the operation of the properties during the immediately preceding
calendar year.
OTHER LOANS
bn
Loan Numbers 914142539 and 904900980. The related mortgage loan seller will
establish a reserve to be funded at closing in an amount equal to 30 days of
interest on these loans for distribution on the initial distribution date.
Commencing on October 1, 1999, and continuing through maturity, monthly payments
of $211,511.95 and $33,185.92 respectively are required.
ADDITIONAL COLLATERAL LOAN
Loan Number TA5222. The mortgage loan requires the borrower to make
payments into a reserve account in an amount equal to $33,333 per month
commencing on the due date in April 2004 until the anticipated repayment date if
the borrower fails to furnish an irrevocable letter of credit each year in the
amount of $550,000 commencing in April, 2004 and annually each year thereafter
until the anticipated repayment date for that loan.
EARNOUT LOANS
"Earnout loans" are mortgage loans that require the related borrower to
deposit a portion of the original loan amount in a reserve fund pending
satisfaction of certain conditions, including without
A-5
<PAGE>
limitation, achievement of certain DSCRs, CLTVs or satisfaction of certain
occupancy tests. Each earnout loan provides that in the event the conditions are
not met by a certain date, the servicer may apply amounts held in the reserves
to prepay or partially defease the related mortgage loan. For each of the
earnout loans listed below, the earliest date on which any amounts may be so
applied is set forth beneath the caption "Earliest Defeasance or Prepay Date."
For each of these earnout loans, the underwritten NCF DSCRs and CLTVs shown in
this prospectus supplement and on the foldout pages in this Annex A are
calculated based on the principal balance of those mortgage loans net of the
related earnout amount. Those underwritten DSCRs and CLTVs are also shown
beneath the caption "Net of Earnout Underwritten NCF DSCR" and "Net of Earnout
LTV" in the table below. The amounts beneath the captions "Full Balance Cut-Off
Date LTV" and "Full Balance Cut-Off Date NCF DSCR" are calculated based on a
principal balance of those mortgage loans that includes the related earnout
amount. The following table sets forth certain information regarding the earnout
loans:
.
<TABLE>
<CAPTION>
FULL BALANCE
CONTROL EARNOUT CUT-OFF DATE CUT-OFF DATE NET OF
NO LOAN NO. AMOUNT BALANCE LTV EARNOUT LTV
- --------- ------------ ------------- -------------- -------------- -------------
<S> <C> <C> <C> <C> <C>
34 19282 $1,645,000 $ 9,300,000 71.2% 58.61%
43 20869 1,500,000 7,390,774 54.3 43.31
23 21223 1,708,000 12,434,379 74.9 64.62
57 22603 380,000 6,031,716 69.3 64.96
19 22868 3,000,000 14,500,000 67.4 53.49
12 906995296 3,000,000 21,000,000 84.0 72.00
17 826165831 750,000 15,250,000 68.9 65.46
<CAPTION>
NET OF EARLIEST
FULL BALANCE EARNOUT DEFEASANCE PREPAYMENT
CONTROL CUT-OFF DATE UNDERWRITTEN OR PREPAY DEFEASANCE PENALTIES
NO NCF DSCR NCF DSCR DATE OR PREPAY APPLY?
- --------- -------------- -------------- ------------ ---------------- -----------
<S> <C> <C> <C> <C> <C>
34 1.34x 1.63x 2/1/2000 Prepay Yes
43 1.30 1.62 5/12/2001 Defease NAP
23 1.14 1.32 11/27/2000 Prepay Yes
57 1.12 1.20 6/11/2000 Prepay Yes
19 1.34 1.69 4/30/2000 Defease/Prepay NAP/Yes
12 1.19 1.39 10/30/2000 Prepay Yes
17 1.44 1.44 2/28/2000 Prepay Yes
</TABLE>
A-6
<PAGE>
ANNEX A
Certain Characteristics of the
Mortgage Loans
<TABLE>
<CAPTION>
LOAN
CONTROL GROUP LOAN LOAN
NUMBER (#) SELLER NUMBER PROPERTY NAME
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1 1 GMAC 22673 Biltmore Fashion Park
2 1 GMAC 21893 Prime Outlets at Niagara Falls
- ------------------------------------------------------------------------------------------------------------
3 1 GMAC 22103 Equity Inns Portfolio
3a 1 GMAC 22103-A Equity Inns - AmeriSuites (Overland Park)
3b 1 GMAC 22103-B Equity Inns - AmeriSuites (Columbus)
3c 1 GMAC 22103-C Equity Inns - AmeriSuites (Memphis)
3d 1 GMAC 22103-D Equity Inns - AmeriSuites (Glen Allen)
3e 1 GMAC 22103-E Equity Inns - Hampton Inn (Overland Park)
3f 1 GMAC 22103-F Equity Inns - Hampton Inn (Kansas City)
3g 1 GMAC 22103-G Equity Inns - Hampton Inn (Memphis)
3h 1 GMAC 22103-H Equity Inns - Hampton Inn (Richardson)
3I 1 GMAC 22103-I Equity Inns - Hampton Inn (Morgantown)
3j 1 GMAC 22103-J Equity Inns - Homewood Suites (Phoenix)
3k 1 GMAC 22103-K Equity Inns - Homewood Suites (Sharonville)
3l 1 GMAC 22103-L Equity Inns - Homewood Suites (San Antonio)
3m 1 GMAC 22103-M Equity Inns - Residence Inn (Tucson)
3n 1 GMAC 22103-N Equity Inns - Residence Inn (Eagan)
3o 1 GMAC 22103-O Equity Inns - Residence Inn (Tinton Falls)
3p 1 GMAC 22103-P Equity Inns - Residence Inn (Portland)
3q 1 GMAC 22103-Q Equity Inns - Hampton Inn (Northville)
3r 1 GMAC 22103-R Equity Inns - Residence Inn (Princeton)
- ------------------------------------------------------------------------------------------------------------
4 1 GMAC 22686 One Colorado
5 1 DB GA5152 Comerica Bank Building
6 1 DB TA5222 120 Monument Circle
7 1 AR 914142539 125 Maiden Lane
- ------------------------------------------------------------------------------------------------------------
8 2 GMAC 21584 Texas Development Investors Apartment Portfolio
8a 2 GMAC 21584-A Willow Creek Apartments
8b 2 GMAC 21584-B Bellfort Southwest IV and V Apartments
8c 2 GMAC 21584-C Southwest Village Apartments
8d 2 GMAC 21584-D Bellfort Southwest III
- ------------------------------------------------------------------------------------------------------------
9 1 GMAC 22671 Sherman Plaza East & West Tower
10 2 DB GA5851 Alliance TP Portfolio
10a 2 DB GA5851-A Mulberry Lane Apartments
10b 2 DB GA5851-B Rambletree Apartments
10c 2 DB GA5851-C Robin Oaks Apartments
- ------------------------------------------------------------------------------------------------------------
11 1 AR 834884757 Bush Tower
12 1 AR 906995296 County Line Plaza
13 2 DB GA5614 Sherwood Lakes Apartments
- ------------------------------------------------------------------------------------------------------------
14 2 GMAC 22748 Laurel Apartment Portfolio
14a 2 GMAC 22748-A Laurel Walk Apartments
14b 2 GMAC 22748-B Laurel Oaks Apartments
14c 2 GMAC 22748-C Laurel Springs Apartments
- ------------------------------------------------------------------------------------------------------------
15 1 GMAC 21674 Sweet Paper Warehouse
15a 1 GMAC 21674-A Sweet Paper Warehouse - Hialeah
15b 1 GMAC 21674-B Sweet Paper Warehouse - Atlanta
15c 1 GMAC 21674-C Sweet Paper Warehouse - Tampa
15d 1 GMAC 21674-D Sweet Paper Warehouse - Orlando
15e 1 GMAC 21674-E Sweet Paper Warehouse - Raleigh
- ------------------------------------------------------------------------------------------------------------
16 1 DB TA7316 Sheraton Portsmouth Hotel
17 1 AR 826165831 Trinity Commons Shopping Center
18 2 DB TA1103 Village Square Apartments
19 1 GMAC 22868 Golden Books Industrial Building
20 1 GMAC 23226 Air Touch Building
- ------------------------------------------------------------------------------------------------------------
21 2 GMAC 23908 Tivoli Lakes Club Apartments
22 1 GMAC 23007 InteSys Technologies, Inc.
23 1 GMAC 21223 Hampden Park West/NCI & II
23a 1 GMAC 21223-A Hampden Park West
23b 1 GMAC 21223-B NCI Buildings I and II
- ------------------------------------------------------------------------------------------------------------
24 2 GMAC 23650 Columbus Park Apartments
25 1 DB GA4992 The Towers on Wilshire
26 1 GMAC 23178 Courtyard by Marriott - Charleston
27 1 AR 09-0001254 Hillcrest Village Shopping Center
28 1 AR 09-0001263 Briargrove Place
- ------------------------------------------------------------------------------------------------------------
29 1 AR 09-0001253 Pitman Corners Shopping Center
30 1 DB GA5891 The Harbor Building
31 1 GMAC 22760 Sheraton Cerritos
32 2 AR 09-0001248 Plantation Oaks
33 1 DB TA0216 The Leamington Office Building
- ------------------------------------------------------------------------------------------------------------
34 1 GMAC 19282 Pacific East Oriental ShoppingMall
35 2 GMAC 22396 Riverbend and Cedar Lake Apartments
35a 2 GMAC 22396-A Riverbend Apartments
35b 2 GMAC 22396-B Cedar Lake Apartments
36 1 GMAC 22232 40 Corporate Center
- ------------------------------------------------------------------------------------------------------------
37 1 GMAC 22040 Milpitas R&D Buildings
38 1 GMAC 24117 Residence Inn - Foxborough
39 1 DB TA7051 Rancho San Diego Town and Country Phase I
40 1 GMAC 21704 Cragwood Plaza
41 1 AR 09-0001229 Lakeside Place Office Building
- ------------------------------------------------------------------------------------------------------------
42 1 GMAC 22941 Heritage Office Building
43 1 GMAC 20869 The Jewelry Building
44 1 GMAC 19631 Century Park West Office Building
45 2 GMAC 22471 Austin Lights Apartments
46 1 DB TA2087 IRS Building
- ------------------------------------------------------------------------------------------------------------
47 1 GMAC 21517 Preferred Freezer II
48 2 GMAC 19169 St. Augustine Hills Apartments
49 1 GMAC 20599 Ohio Distribution Warehouse
50 1 AR 09-0001255 Burleson Towne Centre
51 1 GMAC 20808 Quinby Office Building (CA)
- ------------------------------------------------------------------------------------------------------------
52 1 AR 09-0001264 Shiloh Square Shopping Center
53 1 DB TA1852 Commonwealth Plaza
54 1 GMAC 23290 AmeriSuites - Irving
55 1 AR 901905420 Windward Town & Country Plaza
56 1 GMAC 21568 Residence Inn - Glendale
- ------------------------------------------------------------------------------------------------------------
57 2 GMAC 22603 The Bridgeport Apartments
58 1 GMAC 23492 One Corporate Plaza
59 1 AR 09-0001261 Losee Business Park
60 2 AR 09-0001260 Chimney Apartments
- ------------------------------------------------------------------------------------------------------------
61 2 DB TA5740 Jackson Heights Portfolio
61a 2 DB TA5740-A 35-18 95th Street
61b 2 DB TA5740-B 35-24 95th Street
61c 2 DB TA5740-C 35-38 95th Street
61d 2 DB TA5740-D 35-44 95th Street
61e 2 DB TA5740-E 93-35 Lamont Avenue
- ------------------------------------------------------------------------------------------------------------
62 2 AR 911660589 1110-1120 Beacon Street
63 1 AR 906950814 Buckingham Place Shopping Center
64 2 GMAC 22788 Plaza Apartments
65 1 GMAC 22098 Sears Distribution Center
66 1 GMAC 22729 Fremont Business Park
- ------------------------------------------------------------------------------------------------------------
67 2 GMAC 22124 Chase Hill Apartments
68 1 DB TA3432 Architect's Building
69 1 DB GA5283 Madison Square Shopping Center
70 2 GMAC 22252 Villa Mirage Apartments
71 2 GMAC 20670 Summerchase Apartments
- ------------------------------------------------------------------------------------------------------------
72 1 AR 09-0001243 Crystal Heights Office Center
73 1 AR 09-0001251 Boca Chica Place
74 1 GMAC 19020 The Shops at Pennsville Shopping Center - A Note
- ------------------------------------------------------------------------------------------------------------
75 2 DB TA2352 Satcoms Apartments
75a 2 DB TA2352-A French Quarter Apartments
75b 2 DB TA2352-B Crescent Plaza Apartments
75c 2 DB TA2352-C 2101 D Street Apartments
75d 2 DB TA2352-D Willow Wood Apartments
75f 2 DB TA2352-F Arapahoe Village Apartments
- ------------------------------------------------------------------------------------------------------------
76 2 AR 09-0001242 Sharpstown Garden Apartments
77 1 AR 904900980 Kennedy Business Center
78 1 AR 906424723 East Lancaster Plaza
79 1 GMAC 22738 University Corporate Center
80 2 AR 901851850 Summer Pointe & Windrock Apartments
- ------------------------------------------------------------------------------------------------------------
81 1 AR 909033753 Comps Plaza
82 1 DB TA4891 Francisco Center II
83 2 DB TA4664 St. James Garden Apartments
84 1 GMAC 22149 14th & Cary Street Parking Deck
85 1 GMAC 22136 Willow Oak Plaza
- ------------------------------------------------------------------------------------------------------------
86 2 AR 907120356 Community Manor Apartments
87 1 GMAC 21668 Fairporte Green Shopping Center
88 1 AR 914565048 Lanham Center
89 2 AR 09-0001257 Courts of McCallum Apartments
90 1 AR 09-0001249 Bucks County Mall
- ------------------------------------------------------------------------------------------------------------
91 1 AR 09-0001256 San Marcos Place
92 2 DB TA7792 Mallard Creek Apartments
93 1 GMAC 22272 Carriage Center Retail
94 1 GMAC 22369 Delta Plaza Shopping Center
95 1 AR 09-0001246 Tri-State Mini Storage
- ------------------------------------------------------------------------------------------------------------
96 1 GMAC 20311 McKinney Square
97 1 DB TA7147 Palmetto Lakes Business Center
98 1 DB TA7423 Westlake Medical Plaza
99 1 GMAC 22393 Capital Title Building
100 1 AR 907881339 The North Central Office Building
- ------------------------------------------------------------------------------------------------------------
101 1 GMAC 22669 Scott Company of California
102 1 DB TA6017 420 Columbus Avenue
103 2 GMAC 23193 Rivercrest Apartments
104 1 AR 802880743 McCarty Building
105 2 GMAC 21956 Canden-Damada Apartments
- ------------------------------------------------------------------------------------------------------------
106 2 AR 09-0001245 Citadel Apartments
107 1 GMAC 22542 Fairview Center (Parkside Plaza - Food Lion Shopping Ctr.)
108 1 GMAC 19644 100 Morris Avenue
109 1 GMAC 22156 Delta Villa
110 2 GMAC 21857 Los Olivos Apartments
- ------------------------------------------------------------------------------------------------------------
111 1 AR 09-0001262 Commerce Exchange Business Park
112 2 GMAC 21775 Wickham Gardens Condominiums
113 2 GMAC 21159 The Commodore Apartments
114 2 GMAC 18842 South Park Apartments
115 1 AR 828634107 Fountain Village S.C.
- ------------------------------------------------------------------------------------------------------------
116 1 DB TA7225 Tollhouse Shopping Center
117 1 DB TA5907 Sandpiper Mobile Manor
118 2 GMAC 23338 Logan Point Apartments
119 1 DB TA6162 Rushton Portfolio
119a 1 DB TA6162-A 2 Andrews Drive
119b 1 DB TA6162-B 4 Andrews Drive
- ------------------------------------------------------------------------------------------------------------
120 1 GMAC 22102 Equity Inns - AmeriSuites (Indianapolis)
121 1 DB TA1940 47-16 Austell Place
122 1 GMAC 22649 For Eyes Optical
123 2 GMAC 18035 Canyon Hills Apartments
124 1 DB TA4639 Kailua Trade Center
125 2 GMAC 22494 Oak Forest Apartments
- ------------------------------------------------------------------------------------------------------------
126 1 GMAC 22038 Santee Plaza
127 1 AR 09-0001244 Tanglewood Business Park
128 1 GMAC 21211 CVS Pharmacy Baltimore
129 1 DB TA2896 Ahwatukee Office Plaza
130 1 AR 09-0001220 4444 Westgrove
- ------------------------------------------------------------------------------------------------------------
131 1 DB TA4588 4751 White Lane
132 2 GMAC 23294 Park West I Apartments
133 1 DB TA7458 North Dawson Business Center
134 1 DB TA6357 228 Lackawana Avenue
135 1 GMAC 21368 718 North Lake Avenue
- ------------------------------------------------------------------------------------------------------------
136 2 DB TA5681 Park Villa Apartments
137 1 GMAC 20245 Marshall Plaza
138 2 GMAC 21856 13400 Victory Apartments
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CONTROL
NUMBER PROPERTY TYPE ADDRESS CITY STATE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1 Anchored Retail 2470-A East Camelback Road Phoenix Arizona
2 Anchored Retail 1900 Military Road Niagara Falls New York
- ------------------------------------------------------------------------------------------------------------------------------------
3 Lodging
3a Lodging 6801 West 112th Street Overland Park Kansas
3b Lodging 7490 Vantage Drive Columbus Ohio
3c Lodging 7905 Giacosa Place Memphis Tennessee
3d Lodging 4100 Cox Road Glen Allen Virginia
3e Lodging 10591 East Metcalf Frontage Road Overland Park Kansas
3f Lodging 11212 North Newark Circle Kansas City Missouri
3g Lodging 5320 Poplar Avenue Memphis Tennessee
3h Lodging 1577 Gateway Boulevard Richardson Texas
3I Lodging 1053 Van Voorhis Road Morgantown West Virginia
3j Lodging 2001 East Highland Avenue Phoenix Arizona
3k Lodging 2670 East Kemper Road Sharonville Ohio
3l Lodging 4323 Spectrum One San Antonio Texas
3m Lodging 6477 East Speedway Boulevard Tucson Arizona
3n Lodging 3040 Eagandale Place Eagan Minnesota
3o Lodging 90 Park Road Tinton Falls New Jersey
3p Lodging 1710 Northeast Multnomah Street Portland Oregon
3q Lodging 20600 Haggerty Road Northville Michigan
3r Lodging 4225 Route 1 Princeton New Jersey
- ------------------------------------------------------------------------------------------------------------------------------------
4 Anchored Retail One Colorado Boulevard Pasadena California
5 Office 33 West Santa Clara Street San Jose California
6 Office 120 Monumnet Circle Indianapolis Indiana
7 Office 125 Maiden Lane New York New York
- ------------------------------------------------------------------------------------------------------------------------------------
8 Multifamily Houston Texas
8a Multifamily 7575 Office Center Drive Houston Texas
8b Multifamily 8201 West Bellfort Avenue Houston Texas
8c Multifamily 11726 West Bellfort Avenue Houston Texas
8d Multifamily 6400 West Bellfort Avenue Houston Texas
- ------------------------------------------------------------------------------------------------------------------------------------
9 Office 15350 and 15400 Sherman Way Van Nuys California
10 Multifamily
10a Multifamily 2630 Abbott Road Midland Michigan
10b Multifamily 326 Ramblewood Drive Glen Ellyn Illinois
10c Multifamily 1819 Eastlawn Drive Midland Michigan
- ------------------------------------------------------------------------------------------------------------------------------------
11 Office 130 W 42nd Street New York New York
12 Anchored Retail 1051 East County Line Road Jackson Mississippi
13 Multifamily 2010 Sherwood Lake Drive Schererville Indiana
- ------------------------------------------------------------------------------------------------------------------------------------
14 Multifamily
14a Multifamily 908-201 Summit Lake Drive Charlotte North Carolina
14b Multifamily 3111-101 Longmeadow Court Raleigh North Carolina
14c Multifamily 500-103 Bridleridge Drive Raleigh North Carolina
- ------------------------------------------------------------------------------------------------------------------------------------
15 Industrial
15a Industrial 215 SE 10th Avenue Hialeah Florida
15b Industrial 615 Stonehill Drive SW Atlanta Georgia
15c Industrial 1433 Massaro Boulevard Tampa Florida
15d Industrial 350 Central Florida Parkway Orlando Florida
15e Industrial 3915 Beryl Road Raleigh North Carolina
- ------------------------------------------------------------------------------------------------------------------------------------
16 Lodging 250 Market Street Portsmouth New Hampshire
17 Anchored Retail 3000-3150 South Hulen Street Fort Worth Texas
18 Multifamily 3636 Mission Drive Indianapolis Indiana
19 Industrial 107 Tom Starling Road Fayetteville North Carolina
20 Office 5165 Emerald Parkway Dublin Ohio
- ------------------------------------------------------------------------------------------------------------------------------------
21 Multifamily 602 Anderson Circle Deerfield Beach Florida
22 Industrial 1300 North Fiesta Boulevard Gilbert Arizona
23 Industrial
23a Industrial 1500 W. Hampden Avenue Sheridan Colorado
23b Industrial 300 E. Mineral & 8000 S. Lincoln Avenue Littleton Colorado
- ------------------------------------------------------------------------------------------------------------------------------------
24 Multifamily 5999 Bear Creek Drive Bedford Ohio
25 Office 3200 Wilshire Boulevard Los Angeles California
26 Lodging 35 Lockwood Drive Charleston South Carolina
27 Retail 6959 Arapaho Road Dallas Texas
28 Office 17855 Dallas Parkway Dallas Texas
- ------------------------------------------------------------------------------------------------------------------------------------
29 Anchored Retail 1301 Custer Road Plano Texas
30 Office 4201 Wilshire Boulevard Los Angeles California
31 Lodging 12725 Center Court Drive Cerritos California
32 Multifamily 1501 Harvey Road College Station Texas
33 Office 1814 Franklin Street Oakland California
- ------------------------------------------------------------------------------------------------------------------------------------
34 Anchored Retail 3254 Pierce Street Richmond California
35 Multifamily
35a Multifamily 1502 East Lindsay Street Norman Oklahoma
35b Multifamily 4119 West Main Street Norman Oklahoma
36 Office 40 Corporate Center St. Louis Missouri
- ------------------------------------------------------------------------------------------------------------------------------------
37 Office 720-740 Milpitas Blvd. & 591-593 Yosemite Blvd. Milpitas California
38 Lodging 250 Foxborough Boulevard Foxborough Massachusetts
39 Retail 2650 Jamacha Road El Cajon California
40 Office 50 Cragwood Road South Plainfield New Jersey
41 Office 323 Lakeside Avenue Cleveland Ohio
- ------------------------------------------------------------------------------------------------------------------------------------
42 Office 10 South Brentwood Boulevard Clayton Missouri
43 Retail 576-578 Fifth Avenue New York New York
44 Office 1930 Century Park West Los Angeles California
45 Multifamily 1200 Broadmoor Drive Austin Texas
46 Office 9350 Flair Drive El Monte California
- ------------------------------------------------------------------------------------------------------------------------------------
47 Industrial 231 Elm Street Perth Amboy New Jersey
48 Multifamily 2415 Old St. Augustine Road Tallahassee Florida
49 Industrial 1650 and 1654 Williams Road Columbus Ohio
50 Anchored Retail 805, 855, 877 Northeast Alsburard Blvd Burleson Texas
51 Office 650 South Grand Avenue Los Angeles California
- ------------------------------------------------------------------------------------------------------------------------------------
52 Anchored Retail 2334 West Buckingham Road Garland Texas
53 Office 3300 - 3320 Truxtun Avenue Bakersfield California
54 Lodging 4235 West Airport Freeway Irving Texas
55 Anchored Retail 200 Hamakuas Drive Kailua Hawaii
56 Lodging 7275 North Port Washington Road Glendale Wisconsin
- ------------------------------------------------------------------------------------------------------------------------------------
57 Multifamily 16900 Algonquin Street Huntington Beach California
58 Office 2525 Bay Area Boulevard Clear Lake Texas
59 Industrial 4310 & 4336 Losee Road North Las Vegas Nevada
60 Multifamily 200 North Festival Drive El Paso Texas
- ------------------------------------------------------------------------------------------------------------------------------------
61 Multifamily
61a Multifamily 35-18 95th Street Jackson Heights New York
61b Multifamily 35-24 95th Street Jackson Heights New York
61c Multifamily 35-38 95th Street Jackson Heights New York
61d Multifamily 35-44 95th Street Jackson Heights New York
61e Multifamily 93-35 Lamont Avenue Elmhurst New York
- ------------------------------------------------------------------------------------------------------------------------------------
62 Multifamily 1110-1120 Beacon Street Brookline Massachusetts
63 Anchored Retail 1332 S. Plano Road Richardson Texas
64 Multifamily 982 West Brevard Street Tallahassee Florida
65 Industrial 14650 Miller Avenue Fontana California
66 Office 42501 Albrae Street & 42808-42840 Christy Street Fremont California
- ------------------------------------------------------------------------------------------------------------------------------------
67 Multifamily 15801 Chase Hill Boulevard San Antonio Texas
68 Office 117 South 17th Street Philadelphia Pennsylvania
69 Retail 796 Gallatin Pike Road Nashville Tennessee
70 Multifamily 43223 & 43230 Gadsden Avenue Lancaster California
71 Multifamily 100 McQueen Smith Road South Prattville Alabama
- ------------------------------------------------------------------------------------------------------------------------------------
72 Office 10005 & 10015 Old Columbia Columbia Maryland
73 Anchored Retail 2944 Boca Chica Boulevard Brownsville Texas
74 Anchored Retail 251 North Broadway Pennsville New Jersey
- ------------------------------------------------------------------------------------------------------------------------------------
75 Multifamily
75a Multifamily 4645 Dudley Street Lincoln Nebraska
75b Multifamily 3636 North 52nd Street Lincoln Nebraska
75c Multifamily 2101 D Street Lincoln Nebraska
75d Multifamily 1215 Arapahoe Street Lincoln Nebraska
75f Multifamily 1215 Arapahoe Street Lincoln Nebraska
- ------------------------------------------------------------------------------------------------------------------------------------
76 Multifamily 7575 Bissonet Boulevard Houston Texas
77 Industrial 525-580 Kennedy Road Tallmadge (Akron) Ohio
78 Anchored Retail 1004-1060 Avenue J Lancaster California
79 Office 761 Corporate Center Drive Pomona California
80 Multifamily 1149 & 1029 East Brooks Street Norman Oklahoma
- ------------------------------------------------------------------------------------------------------------------------------------
81 Office 9888 Carroll Centre Road San Diego California
82 Retail 610 DuBois Street San Rafael California
83 Multifamily 314 East 24th Street Chester Pennsylvania
84 Special Purpose 1412-1416 East Cary Street Richmond Virginia
85 Anchored Retail 901-R West Broad Street (Route250) Waynesboro Virginia
- ------------------------------------------------------------------------------------------------------------------------------------
86 Multifamily 2655 Brighton Henrietta Town Line Road Henrietta New York
87 Retail 1309 West Fairmont Parkway LaPorte Texas
88 Office 5900 Princess Garden Parkway Lanham Maryland
89 Multifamily 7777 McCallum Boulevard Dallas Texas
90 Anchored Retail 725-751 Bustleton Pike Feasterville Pennsylvania
- ------------------------------------------------------------------------------------------------------------------------------------
91 Retail 900 Bugg Lane San Marcos Texas
92 Multifamily 1878 Simonton Road Statesville North Carolina
93 Retail 12845 Poway Road Poway California
94 Retail 10110 U.S. Highway 19 Port Richey Florida
95 Self-Storage 1050 Ridge Road and 100 Hickman Road Claymont Delaware
- ------------------------------------------------------------------------------------------------------------------------------------
96 Office 2500-2522 McKinney Avenue & 2412-2418 Fairmont Street Dallas Texas
97 Industrial 4715-4774 N.W. 157th Street Miami Florida
98 Office 1220 La Venta Drive Westlake Village California
99 Office 2900 East Camelback Road Phoenix Arizona
100 Office 1000 N. Central Avenue Glendale California
- ------------------------------------------------------------------------------------------------------------------------------------
101 Industrial 14920 South San Pedro Street Gardena California
102 Office 420 Columbus Avenue Mt. Pleasant New York
103 Multifamily 525 Lines Drive Albany Georgia
104 Office 202 North Ninth Street Boise Idaho
105 Multifamily Willowcreek Road & Interstate 80/90 Portage Indiana
- ------------------------------------------------------------------------------------------------------------------------------------
106 Multifamily 1702 Bushman Drive Kansas City Missouri
107 Anchored Retail Hwy. 100 and Chester Road Fairview Tennessee
108 Office 100 Morris Avenue Springfield New Jersey
109 Mobile Home Park 1900 Strasbourg Lane Antioch California
110 Multifamily 7625 North 19th Avenue Phoenix Arizona
- ------------------------------------------------------------------------------------------------------------------------------------
111 Office 2835/2860 Exchange Blvd. & 2805 Market Southlake Texas
112 Multifamily 1267-1299 Burnside Avenue and 5-52 Racebrook Drive East Hartford Connecticut
113 Multifamily 605 Cain Ridge Road Vicksburg Mississippi
114 Multifamily 37-59 Charter Oak Street Manchester Connecticut
115 Retail 1100 East Pleasant Run Road DeSoto Texas
- ------------------------------------------------------------------------------------------------------------------------------------
116 Retail 305 East Market Street Leesburg Virginia
117 Mobile Home Park Sandpiper Drive Eustis Florida
118 Multifamily 5005 Tequesquite Avenue Riverside California
119 Industrial
119a Industrial 2 Andrews Drive West Paterson New Jersey
119b Industrial 4 Andrews Drive West Paterson New Jersey
- ------------------------------------------------------------------------------------------------------------------------------------
120 Lodging 9104 Keystone Crossing Indianapolis Indiana
121 Industrial 47-16 Austell Place Long Island City New York
122 Retail 7332 West Colonial Drive Orlando Florida
123 Multifamily 9010 Magnetic Street El Paso Texas
124 Office 75-5706 Hanama Place Kailua Kona Hawaii
125 Multifamily 2801 Westridge Circle Bryan-College Station Texas
- ------------------------------------------------------------------------------------------------------------------------------------
126 Retail 1141-1143 Santee Street Los Angeles California
127 Mixed Use 11600 Manchaca Road Austin Texas
128 Retail 19 North Central Avenue Baltimore Maryland
129 Office 11011 S. 48th Street Phoenix Arizona
130 Mixed Use 4444 Westgrove Drive Addison Texas
- ------------------------------------------------------------------------------------------------------------------------------------
131 Retail 4751 White Lane Bakersfield California
132 Multifamily 3751 Martin Luther King Jr. Drive Atlanta Georgia
133 Industrial 331-341 North Dawson Drive Camarillo California
134 Industrial 228 Lackawana Avenue West Paterson New Jersey
135 Retail 718 North Lake Avenue Pasadena California
- ------------------------------------------------------------------------------------------------------------------------------------
136 Multifamily 525-535 Pontiac Street Oxford Michigan
137 Retail 1711 East End Boulevard North Marshall Texas
138 Multifamily 13400 Victory Boulevard Valley Glen California
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
% OF
CROSS AGGREGATE CUMULATIVE %
CONTROL COLLATERALIZED RELATED ORIGINAL CUT-OFF DATE INITIAL POOL OF INITIAL POOL
NUMBER ZIP CODE GROUPS GROUPS BALANCE ($) BALANCE ($) BALANCE BALANCE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 85016 80,000,000 80,000,000 6.94 6.94
2 14304 63,000,000 62,873,660 5.45 12.40
- ------------------------------------------------------------------------------------------------------------------------------------
3 Group A Group 1 46,590,000 46,550,800 4.04 16.43
3a 66211
3b 43235
3c 38133
3d 23060
3e 66212
3f 64153
3g 38119
3h 75080
3I 26505
3j 85026
3k 45241
3l 78230
3m 85710
3n 55121
3o 07724
3p 97232
3q 48167
3r 08543
- ------------------------------------------------------------------------------------------------------------------------------------
4 91103 42,670,000 42,649,122 3.70 20.13
5 95113 34,000,000 33,660,567 2.92 23.05
6 46204 29,000,000 28,968,172 2.51 25.57
7 10038 28,500,000 28,500,000 2.47 28.04
- ------------------------------------------------------------------------------------------------------------------------------------
8 77012 27,000,000 26,943,812 2.34 30.38
8a 77012
8b 77071
8c 77477
8d 77035
- ------------------------------------------------------------------------------------------------------------------------------------
9 91406 26,000,000 26,000,000 2.26 32.63
10 24,905,460 24,905,460 2.16 34.79
10a 48642
10b 60137
10c 48642
- ------------------------------------------------------------------------------------------------------------------------------------
11 10036 23,000,000 23,000,000 2.00 36.79
12 39211 Group 2 21,000,000 21,000,000 1.82 38.61
13 46375 20,500,000 20,181,152 1.75 40.36
- ------------------------------------------------------------------------------------------------------------------------------------
14 Group 3 18,000,000 17,961,949 1.56 41.92
14a 28270
14b 27613
14c 27609
- ------------------------------------------------------------------------------------------------------------------------------------
15 17,420,000 17,420,000 1.51 43.43
15a 33010
15b 30336
15c 33619
15d 32824
15e 27607
- ------------------------------------------------------------------------------------------------------------------------------------
16 03801 16,000,000 15,961,012 1.38 44.82
17 76109 Group 2 15,250,000 15,250,000 1.32 46.14
18 46224 15,015,000 15,004,509 1.30 47.44
19 28348 14,500,000 14,500,000 1.26 48.70
20 43017 14,000,000 14,000,000 1.21 49.91
- ------------------------------------------------------------------------------------------------------------------------------------
21 33441 13,600,000 13,600,000 1.18 51.09
22 85233 Group 4 13,130,000 13,130,000 1.14 52.23
23 12,450,000 12,434,379 1.08 53.31
23a 80110
23b 80121
- ------------------------------------------------------------------------------------------------------------------------------------
24 44146 12,250,000 12,250,000 1.06 54.37
25 90010 Group 5 12,000,000 11,861,014 1.03 55.40
26 29401 11,200,000 11,200,000 0.97 56.38
27 75248 Group 6 10,915,000 10,910,814 0.95 57.32
28 75287 10,875,000 10,875,000 0.94 58.27
- ------------------------------------------------------------------------------------------------------------------------------------
29 75075 Group 6 10,250,000 10,250,000 0.89 59.15
30 90010 Group 5 10,200,000 10,112,399 0.88 60.03
31 90703 10,000,000 10,000,000 0.87 60.90
32 77840 9,450,000 9,445,587 0.82 61.72
33 94612 9,500,000 9,412,648 0.82 62.54
- ------------------------------------------------------------------------------------------------------------------------------------
34 94804 9,300,000 9,300,000 0.81 63.34
35 9,250,000 9,237,180 0.80 64.14
35a 73071
35b 73072
36 63141 Group 7 8,850,000 8,850,000 0.77 64.91
- ------------------------------------------------------------------------------------------------------------------------------------
37 95035 8,800,000 8,788,108 0.76 65.67
38 02035 8,100,000 8,100,000 0.70 66.38
39 92019 7,800,000 7,791,623 0.68 67.05
40 07080 7,500,000 7,500,000 0.65 67.70
41 44113 7,450,000 7,438,614 0.65 68.35
- ------------------------------------------------------------------------------------------------------------------------------------
42 63105 Group 7 7,425,000 7,425,000 0.64 68.99
43 10036 7,400,000 7,390,774 0.64 69.63
44 90067 7,400,000 7,390,312 0.64 70.28
45 78723 7,350,000 7,346,276 0.64 70.91
46 91731 7,200,000 7,109,864 0.62 71.53
- ------------------------------------------------------------------------------------------------------------------------------------
47 08861 7,000,000 7,000,000 0.61 72.14
48 32301 7,000,000 6,993,350 0.61 72.74
49 43207 6,985,000 6,975,135 0.61 73.35
50 76028 Group 6 6,600,000 6,600,000 0.57 73.92
51 90017 6,600,000 6,586,926 0.57 74.49
- ------------------------------------------------------------------------------------------------------------------------------------
52 75042 6,575,000 6,575,000 0.57 75.06
53 93301 Group 8 6,400,000 6,315,099 0.55 75.61
54 75062 6,100,000 6,100,000 0.53 76.14
55 96734 6,100,000 6,100,000 0.53 76.67
56 53217 6,100,000 6,088,038 0.53 77.20
- ------------------------------------------------------------------------------------------------------------------------------------
57 92649 6,035,000 6,031,716 0.52 77.72
58 77060 6,000,000 6,000,000 0.52 78.24
59 89030 5,940,000 5,940,000 0.52 78.76
60 79912 5,800,000 5,800,000 0.50 79.26
- ------------------------------------------------------------------------------------------------------------------------------------
61 5,750,000 5,722,696 0.50 79.76
61a 11372
61b 11372
61c 11372
61d 11372
61e 11372
- ------------------------------------------------------------------------------------------------------------------------------------
62 02146 5,700,000 5,700,000 0.49 80.25
63 75081 Group 2 5,600,000 5,600,000 0.49 80.74
64 32304 5,200,000 5,200,000 0.45 81.19
65 92336 5,000,000 4,996,841 0.43 81.62
66 94538 5,000,000 4,991,845 0.43 82.05
- ------------------------------------------------------------------------------------------------------------------------------------
67 78256 5,000,000 4,989,311 0.43 82.49
68 19103 4,970,000 4,966,356 0.43 82.92
69 37115 5,000,000 4,924,529 0.43 83.35
70 93534 5,000,000 4,919,467 0.43 83.77
71 36066 4,900,000 4,897,430 0.42 84.20
- ------------------------------------------------------------------------------------------------------------------------------------
72 21046 4,828,705 4,823,519 0.42 84.62
73 78521 4,800,000 4,798,047 0.42 85.03
74 08070 Group 3 4,800,000 4,796,895 0.42 85.45
- ------------------------------------------------------------------------------------------------------------------------------------
75 4,741,471 4,677,886 0.41 85.85
75a 68503
75b 68504
75c 68502
75d 68502
75f 68502
- ------------------------------------------------------------------------------------------------------------------------------------
76 77074 4,500,000 4,494,595 0.39 86.24
77 44305 4,352,000 4,352,000 0.38 86.62
78 93535 4,290,000 4,284,941 0.37 86.99
79 91768 4,245,000 4,239,984 0.37 87.36
80 73072 4,059,000 4,059,000 0.35 87.71
- ------------------------------------------------------------------------------------------------------------------------------------
81 92126 4,041,000 4,041,000 0.35 88.06
82 94901 4,040,000 4,035,894 0.35 88.41
83 19013 4,000,000 3,959,525 0.34 88.76
84 23298 3,900,000 3,900,000 0.34 89.10
85 22980 3,800,000 3,791,619 0.33 89.43
- ------------------------------------------------------------------------------------------------------------------------------------
86 14623 3,740,000 3,740,000 0.32 89.75
87 77571 3,575,000 3,570,495 0.31 90.06
88 20706 3,500,000 3,500,000 0.30 90.36
89 75252 3,485,000 3,483,582 0.30 90.67
90 19053 3,421,000 3,418,416 0.30 90.96
- ------------------------------------------------------------------------------------------------------------------------------------
91 78666 3,375,000 3,373,967 0.29 91.25
92 28677 3,350,000 3,345,594 0.29 91.54
93 92064 3,300,000 3,292,230 0.29 91.83
94 34653 3,255,000 3,253,444 0.28 92.11
95 19703 3,250,000 3,243,231 0.28 92.39
- ------------------------------------------------------------------------------------------------------------------------------------
96 75201 3,230,000 3,225,990 0.28 92.67
97 33167 3,150,000 3,146,571 0.27 92.95
98 91360 Group 9 3,150,000 3,145,945 0.27 93.22
99 85016 3,130,000 3,130,000 0.27 93.49
100 91203 3,100,000 3,100,000 0.27 93.76
- ------------------------------------------------------------------------------------------------------------------------------------
101 90248 Group 4 3,000,000 3,000,000 0.26 94.02
102 10595 2,775,000 2,767,438 0.24 94.26
103 31705 2,750,000 2,746,460 0.24 94.50
104 83702 2,655,000 2,655,000 0.23 94.73
105 46368 2,600,000 2,596,494 0.23 94.95
- ------------------------------------------------------------------------------------------------------------------------------------
106 64110 2,560,000 2,556,754 0.22 95.18
107 37062 2,490,000 2,486,795 0.22 95.39
108 07081 2,460,000 2,458,852 0.21 95.61
109 94509 2,375,000 2,371,363 0.21 95.81
110 85021 2,260,000 2,255,360 0.20 96.01
- ------------------------------------------------------------------------------------------------------------------------------------
111 76092 2,190,000 2,190,000 0.19 96.20
112 06108 2,080,000 2,078,934 0.18 96.38
113 39180 2,080,000 2,078,804 0.18 96.56
114 06040 2,050,000 2,047,235 0.18 96.74
115 75115 2,025,000 2,025,000 0.18 96.91
- ------------------------------------------------------------------------------------------------------------------------------------
116 20176 2,000,000 1,996,785 0.17 97.08
117 37802 2,000,000 1,987,572 0.17 97.26
118 92501 1,960,000 1,960,000 0.17 97.43
119 Group 10 1,950,000 1,939,542 0.17 97.59
119a 07424
119b 07424
- ------------------------------------------------------------------------------------------------------------------------------------
120 46240 Group A Group 1 1,920,000 1,918,385 0.17 97.76
121 11101 1,860,000 1,845,626 0.16 97.92
122 32818 1,800,000 1,800,000 0.16 98.08
123 79904 1,800,000 1,796,627 0.16 98.23
124 96740 1,750,000 1,737,587 0.15 98.38
125 77801 1,670,000 1,670,000 0.14 98.53
- ------------------------------------------------------------------------------------------------------------------------------------
126 90015 1,650,000 1,649,223 0.14 98.67
127 78748 1,623,000 1,621,214 0.14 98.81
128 21202 1,465,000 1,454,598 0.13 98.94
129 85044 1,450,000 1,438,376 0.12 99.06
130 75248 1,440,000 1,434,695 0.12 99.19
- ------------------------------------------------------------------------------------------------------------------------------------
131 93309 Group 8 1,375,000 1,364,420 0.12 99.31
132 30331 1,325,000 1,325,000 0.11 99.42
133 93010 Group 9 1,250,000 1,247,607 0.11 99.53
134 07424 Group 10 1,250,000 1,243,296 0.11 99.64
135 91104 1,168,000 1,167,500 0.10 99.74
- ------------------------------------------------------------------------------------------------------------------------------------
136 48371 1,100,000 1,090,010 0.09 99.83
137 75671 1,050,000 1,050,000 0.09 99.92
138 91401 870,000 869,571 0.08 100.00
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ORIGINAL
SERVICING INTEREST INTEREST
CONTROL MORTGAGE FEE ACCRUAL ONLY
NUMBER RATE (%) RATE (%) METHOD AMORTIZATION TYPE PERIOD (MOS.)
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1 7.6800 0.0319 Actual / 360 Interest Only, then Hyper Amortizing 12
2 7.6040 0.1269 Actual / 360 Hyper Amortizing 0
- -----------------------------------------------------------------------------------------------------------------------
3 8.3700 0.1269 Actual / 360 Hyper Amortizing 0
3a
3b
3c
3d
3e
3f
3g
3h
3I
3j
3k
3l
3m
3n
3o
3p
3q
3r
- -----------------------------------------------------------------------------------------------------------------------
4 8.2900 0.1269 Actual / 360 Hyper Amortizing 0
5 7.5500 0.0819 Actual / 360 Balloon 0
6 8.0900 0.0819 Actual / 360 Hyper Amortizing 0
7 8.1200 0.1269 Actual / 360 Balloon 0
- -----------------------------------------------------------------------------------------------------------------------
8 7.4400 0.1269 Actual / 360 Balloon 0
8a
8b
8c
8d
- -----------------------------------------------------------------------------------------------------------------------
9 7.6800 0.0519 Actual / 360 Balloon 0
10 7.3200 0.0819 Actual / 360 Hyper Amortizing 0
10a
10b
10c
- -----------------------------------------------------------------------------------------------------------------------
11 7.9900 0.1269 Actual / 360 Interest Only, then Balloon 47
12 7.9100 0.1269 Actual / 360 Balloon 0
13 6.9850 0.0819 30 / 360 Hyper Amortizing 0
- -----------------------------------------------------------------------------------------------------------------------
14 7.3700 0.1269 Actual / 360 Balloon 0
14a
14b
14c
- -----------------------------------------------------------------------------------------------------------------------
15 8.2600 0.1269 Actual / 360 Interest Only, then Balloon 24
15a
15b
15c
15d
15e
- -----------------------------------------------------------------------------------------------------------------------
16 8.5290 0.0819 Actual / 360 Balloon 0
17 7.9300 0.1269 Actual / 360 Balloon 0
18 7.8000 0.0819 30 / 360 Hyper Amortizing
19 8.5000 0.1269 Actual / 360 Balloon 0
20 7.9800 0.1269 Actual / 360 Balloon 0
- -----------------------------------------------------------------------------------------------------------------------
21 7.5200 0.1269 Actual / 360 Balloon 0
22 8.0800 0.1269 Actual / 360 Balloon 0
23 8.1300 0.1269 Actual / 360 Balloon 0
23a
23b
- -----------------------------------------------------------------------------------------------------------------------
24 8.2800 0.1269 Actual / 360 Balloon 0
25 7.1500 0.0819 30 / 360 Hyper Amortizing 0
26 8.7500 0.1269 Actual / 360 Hyper Amortizing 0
27 8.4100 0.1269 Actual / 360 Balloon 0
28 7.5400 0.1269 Actual / 360 Interest Only 120
- -----------------------------------------------------------------------------------------------------------------------
29 8.2300 0.1269 Actual / 360 Balloon 0
30 6.8400 0.0819 Actual / 360 Hyper Amortizing 0
31 8.7800 0.1269 Actual / 360 Hyper Amortizing 0
32 7.8900 0.1269 Actual / 360 Balloon 0
33 7.0500 0.0819 30 / 360 Hyper Amortizing 0
- -----------------------------------------------------------------------------------------------------------------------
34 8.7300 0.1269 Actual / 360 Balloon 0
35 7.6600 0.1269 Actual / 360 Balloon 0
35a
35b
36 7.9600 0.1269 Actual / 360 Interest Only, then Balloon 24
- -----------------------------------------------------------------------------------------------------------------------
37 7.7800 0.1269 Actual / 360 Balloon 0
38 8.5000 0.1269 Actual / 360 Hyper Amortizing 0
39 8.1700 0.0819 Actual / 360 Balloon 0
40 8.1400 0.1269 Actual / 360 Balloon 0
41 8.1100 0.1269 Actual / 360 Balloon 0
- -----------------------------------------------------------------------------------------------------------------------
42 7.9600 0.1269 Actual / 360 Interest Only, then Balloon 24
43 8.1600 0.1269 Actual / 360 Balloon 0
44 7.9300 0.1269 Actual / 360 Balloon 0
45 8.1700 0.1269 Actual / 360 Balloon 0
46 7.1200 0.0819 30 / 360 Hyper Amortizing 0
- -----------------------------------------------------------------------------------------------------------------------
47 8.5200 0.1269 Actual / 360 Balloon 0
48 7.7800 0.1269 Actual / 360 Balloon 0
49 7.5700 0.1269 Actual / 360 Balloon 0
50 8.6000 0.1269 Actual / 360 Balloon 0
51 8.1900 0.1269 Actual / 360 Balloon 0
- -----------------------------------------------------------------------------------------------------------------------
52 7.6900 0.1269 Actual / 360 Balloon 0
53 7.1700 0.0819 30 / 360 Hyper Amortizing 0
54 8.7500 0.1269 Actual / 360 Hyper Amortizing 0
55 8.1600 0.1269 Actual / 360 Balloon 0
56 8.2500 0.1269 Actual / 360 Hyper Amortizing 0
- -----------------------------------------------------------------------------------------------------------------------
57 7.9200 0.1269 Actual / 360 Balloon 0
58 8.3300 0.1269 Actual / 360 Balloon 0
59 8.1100 0.1269 Actual / 360 Balloon 0
60 8.0700 0.1269 Actual / 360 Balloon 0
- -----------------------------------------------------------------------------------------------------------------------
61 7.9000 0.0819 Actual / 360 Balloon 0
61a
61b
61c
61d
61e
- -----------------------------------------------------------------------------------------------------------------------
62 7.9100 0.1269 Actual / 360 Balloon 0
63 7.8800 0.1269 Actual / 360 Balloon 0
64 8.0300 0.1269 Actual / 360 Balloon 0
65 7.3700 0.1269 Actual / 360 Balloon 0
66 7.6500 0.1269 Actual / 360 Balloon 0
- -----------------------------------------------------------------------------------------------------------------------
67 7.3200 0.1269 Actual / 360 Balloon 0
68 7.5600 0.0819 30 / 360 Hyper Amortizing 0
69 7.5850 0.0819 Actual / 360 Balloon 0
70 6.7500 0.1269 Actual / 360 Balloon 0
71 8.0500 0.1269 Actual / 360 Balloon 0
- -----------------------------------------------------------------------------------------------------------------------
72 8.1700 0.2269 Actual / 360 Balloon 0
73 8.2600 0.1269 Actual / 360 Balloon 0
74 7.2800 0.1269 Actual / 360 Balloon 0
- -----------------------------------------------------------------------------------------------------------------------
75 6.7600 0.0819 30 / 360 Balloon 0
75a
75b
75c
75d
75f
- -----------------------------------------------------------------------------------------------------------------------
76 7.7500 0.1319 Actual / 360 Balloon 0
77 8.4100 0.2269 Actual / 360 Balloon 0
78 7.8200 0.1269 Actual / 360 Balloon 0
79 8.4100 0.1269 Actual / 360 Balloon 0
80 7.7900 0.1269 Actual / 360 Balloon 0
- -----------------------------------------------------------------------------------------------------------------------
81 7.9800 0.1269 Actual / 360 Balloon 0
82 8.3700 0.0819 Actual / 360 Balloon 0
83 7.0200 0.0819 30 / 360 Hyper Amortizing 0
84 8.4600 0.1269 Actual / 360 Balloon 0
85 7.5500 0.1269 Actual / 360 Balloon 0
- -----------------------------------------------------------------------------------------------------------------------
86 8.1800 0.1269 Actual / 360 Balloon 0
87 8.1100 0.1269 Actual / 360 Balloon 0
88 8.1300 0.1269 Actual / 360 Balloon 0
89 8.2600 0.1269 Actual / 360 Balloon 0
90 8.3800 0.1269 Actual / 360 Balloon 0
- -----------------------------------------------------------------------------------------------------------------------
91 8.9300 0.1269 Actual / 360 Balloon 0
92 7.7900 0.0819 Actual / 360 Balloon 0
93 8.5000 0.1219 Actual / 360 Balloon 0
94 8.3700 0.1269 Actual / 360 Balloon 0
95 7.4900 0.1269 Actual / 360 Balloon 0
- -----------------------------------------------------------------------------------------------------------------------
96 8.1800 0.1269 Actual / 360 Balloon 0
97 8.1200 0.0819 Actual / 360 Balloon 0
98 7.4800 0.0819 Actual / 360 Balloon 0
99 8.3200 0.1269 Actual / 360 Balloon 0
100 8.0800 0.1319 Actual / 360 Balloon 0
- -----------------------------------------------------------------------------------------------------------------------
101 8.2100 0.1269 Actual / 360 Balloon 0
102 8.0000 0.0819 Actual / 360 Hyper Amortizing 0
103 8.0100 0.1269 Actual / 360 Balloon 0
104 7.8100 0.1269 Actual / 360 Balloon 0
105 7.7900 0.1269 Actual / 360 Balloon 0
- -----------------------------------------------------------------------------------------------------------------------
106 7.5400 0.1269 Actual / 360 Balloon 0
107 8.0100 0.1269 Actual / 360 Balloon 0
108 8.4500 0.1269 Actual / 360 Balloon 0
109 7.1800 0.1269 Actual / 360 Balloon 0
110 7.5000 0.1269 Actual / 360 Balloon 0
- -----------------------------------------------------------------------------------------------------------------------
111 8.2300 0.1269 Actual / 360 Balloon 0
112 8.1300 0.1269 Actual / 360 Balloon 0
113 7.7200 0.1269 Actual / 360 Balloon 0
114 7.7900 0.1269 Actual / 360 Balloon 0
115 8.6700 0.1269 Actual / 360 Balloon 0
- -----------------------------------------------------------------------------------------------------------------------
116 7.9400 0.0819 Actual / 360 Balloon 0
117 7.5000 0.0819 Actual / 360 Hyper Amortizing 0
118 8.0600 0.1269 Actual / 360 Balloon 0
119 7.2800 0.0819 Actual / 360 Balloon 0
119a
119b
- -----------------------------------------------------------------------------------------------------------------------
120 8.3700 0.1269 Actual / 360 Hyper Amortizing 0
121 7.8200 0.0819 30 / 360 Hyper Amortizing 0
122 8.1250 0.1269 Actual / 360 Balloon 0
123 7.9000 0.1269 Actual / 360 Balloon 0
124 6.7000 0.0819 30 / 360 Hyper Amortizing 0
125 8.2500 0.1269 Actual / 360 Balloon 0
- -----------------------------------------------------------------------------------------------------------------------
126 8.4200 0.1269 Actual / 360 Balloon 0
127 8.0800 0.1269 Actual / 360 Balloon 0
128 7.7200 0.1269 Actual / 360 Fully Amortizing 0
129 7.2500 0.0819 30 / 360 Hyper Amortizing 0
130 8.1600 0.1269 Actual / 360 Balloon 0
- -----------------------------------------------------------------------------------------------------------------------
131 7.4300 0.0819 Actual / 360 Hyper Amortizing 0
132 8.2500 0.1269 Actual / 360 Balloon 0
133 7.9300 0.0819 Actual / 360 Balloon 0
134 7.2800 0.0819 Actual / 360 Balloon 0
135 8.7300 0.1269 Actual / 360 Balloon 0
- -----------------------------------------------------------------------------------------------------------------------
136 7.2500 0.0819 Actual / 360 Hyper Amortizing 0
137 8.5200 0.1269 Actual / 360 Balloon 0
138 8.2600 0.1269 Actual / 360 Balloon 0
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
REMAINING
REMAINING ORIGINAL TERM TERM TO ORIGINAL REMAINING
CONTROL INTEREST ONLY TO MATURITY MATURITY AMORTIZATION AMORTIZATION ORIGINATION
NUMBER PERIOD (MOS.) (MOS.) (MOS.) TERM (MOS.) TERM (MOS.) DATE
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1 11 120 119 360 360 6/16/99
2 120 117 360 357 4/27/99
- -------------------------------------------------------------------------------------------------------------------
3 120 119 300 299 6/16/99
3a
3b
3c
3d
3e
3f
3g
3h
3I
3j
3k
3l
3m
3n
3o
3p
3q
3r
- -------------------------------------------------------------------------------------------------------------------
4 120 119 360 359 6/17/99
5 120 105 360 345 4/30/98
6 120 118 360 358 4/21/99
7 120 120 360 360 8/2/99
- -------------------------------------------------------------------------------------------------------------------
8 120 117 360 357 4/30/99
8a
8b
8c
8d
- -------------------------------------------------------------------------------------------------------------------
9 120 120 360 360 7/30/99
10 120 120 338 338 7/29/98
10a
10b
10c
- -------------------------------------------------------------------------------------------------------------------
11 47 119 119 360 360 7/30/99
12 120 120 360 360 7/30/99
13 120 102 360 342 1/15/98
- -------------------------------------------------------------------------------------------------------------------
14 120 117 360 357 5/3/99
14a
14b
14c
- -------------------------------------------------------------------------------------------------------------------
15 22 120 118 360 360 6/10/99
15a
15b
15c
15d
15e
- -------------------------------------------------------------------------------------------------------------------
16 120 117 300 297 4/16/99
17 120 120 360 360 7/30/99
18 99 98 360 359 6/29/99
19 120 120 360 360 7/30/99
20 120 120 360 360 7/28/99
- -------------------------------------------------------------------------------------------------------------------
21 120 120 360 360 7/26/99
22 120 120 360 360 7/30/99
23 120 118 360 358 5/27/99
23a
23b
- -------------------------------------------------------------------------------------------------------------------
24 180 180 240 240 7/30/99
25 120 106 360 346 5/7/98
26 84 84 300 300 7/29/99
27 120 119 360 359 6/25/99
28 120 120 120 0 0 7/7/99
- -------------------------------------------------------------------------------------------------------------------
29 120 120 360 360 7/2/99
30 120 110 348 338 9/15/98
31 120 120 300 300 7/30/99
32 120 119 360 359 6/7/99
33 120 109 360 349 8/5/98
- -------------------------------------------------------------------------------------------------------------------
34 180 180 360 360 7/30/99
35 120 118 360 358 5/14/99
35a
35b
36 24 120 120 360 360 8/2/99
- -------------------------------------------------------------------------------------------------------------------
37 120 118 360 358 6/1/99
38 120 120 300 300 7/30/99
39 120 118 360 358 5/20/99
40 120 120 360 360 7/16/99
41 120 117 360 357 4/26/99
- -------------------------------------------------------------------------------------------------------------------
42 24 120 120 360 360 8/2/99
43 120 118 360 358 5/13/99
44 120 118 360 358 5/13/99
45 120 119 360 359 6/25/99
46 120 105 360 345 4/9/98
- -------------------------------------------------------------------------------------------------------------------
47 120 120 300 300 7/19/99
48 120 119 300 299 7/1/99
49 120 118 360 358 5/13/99
50 180 180 360 360 7/2/99
51 120 118 300 298 5/24/99
- -------------------------------------------------------------------------------------------------------------------
52 120 120 360 360 7/16/99
53 121 105 360 344 4/1/98
54 120 120 300 300 7/26/99
55 120 120 360 360 7/23/99
56 83 81 300 298 5/5/99
- -------------------------------------------------------------------------------------------------------------------
57 120 119 360 359 6/11/99
58 120 120 360 360 7/30/99
59 120 120 360 360 7/2/99
60 120 120 360 360 7/7/99
- -------------------------------------------------------------------------------------------------------------------
61 120 115 300 295 2/23/99
61a
61b
61c
61d
61e
- -------------------------------------------------------------------------------------------------------------------
62 120 120 360 360 7/30/99
63 120 120 360 360 7/30/99
64 120 120 360 360 7/13/99
65 120 119 360 359 6/17/99
66 120 119 240 239 6/16/99
- -------------------------------------------------------------------------------------------------------------------
67 120 117 360 357 4/29/99
68 120 119 360 359 2/12/98
69 120 106 300 286 5/8/98
70 120 107 300 287 6/24/98
71 120 119 360 359 6/25/99
- -------------------------------------------------------------------------------------------------------------------
72 120 118 360 358 5/24/99
73 120 119 360 359 6/16/99
74 120 119 360 359 7/1/99
- -------------------------------------------------------------------------------------------------------------------
75 120 105 360 345 4/6/98
75a
75b
75c
75d
75f
- -------------------------------------------------------------------------------------------------------------------
76 120 118 360 358 5/24/99
77 120 120 360 360 8/2/99
78 120 118 360 358 6/1/99
79 120 118 360 358 6/9/99
80 120 120 360 360 7/30/99
- -------------------------------------------------------------------------------------------------------------------
81 120 120 360 360 6/25/99
82 120 118 360 358 5/25/99
83 120 108 360 348 7/10/98
84 120 120 300 300 7/27/99
85 120 118 300 298 5/26/99
- -------------------------------------------------------------------------------------------------------------------
86 120 120 360 360 7/6/99
87 120 118 360 358 5/20/99
88 120 120 360 360 7/29/99
89 120 119 360 359 6/29/99
90 120 119 300 299 6/4/99
- -------------------------------------------------------------------------------------------------------------------
91 120 119 360 359 6/24/99
92 120 118 348 346 5/27/99
93 120 115 360 355 2/12/99
94 120 119 360 359 7/2/99
95 120 118 300 298 5/27/99
- -------------------------------------------------------------------------------------------------------------------
96 120 118 360 358 5/24/99
97 120 118 360 358 5/17/99
98 120 118 360 358 5/6/99
99 120 120 360 360 7/30/99
100 120 120 360 360 7/22/99
- -------------------------------------------------------------------------------------------------------------------
101 120 120 360 360 7/19/99
102 120 115 360 355 2/11/99
103 180 178 360 358 5/27/99
104 120 120 360 360 7/23/99
105 120 118 360 358 6/2/99
- -------------------------------------------------------------------------------------------------------------------
106 120 118 360 358 5/27/99
107 120 118 360 358 6/2/99
108 120 119 360 359 6/24/99
109 120 118 360 358 6/1/99
110 120 117 360 357 4/26/99
- -------------------------------------------------------------------------------------------------------------------
111 120 120 360 360 7/6/99
112 120 119 360 359 6/25/99
113 120 119 360 359 6/24/99
114 120 118 360 358 5/11/99
115 120 120 360 360 7/30/99
- -------------------------------------------------------------------------------------------------------------------
116 120 117 360 357 4/2/99
117 120 111 360 351 10/26/98
118 120 120 360 360 7/28/99
119 120 115 300 295 2/1/99
119a
119b
- -------------------------------------------------------------------------------------------------------------------
120 120 119 300 299 6/16/99
121 120 113 300 293 12/23/98
122 132 132 360 360 7/21/99
123 120 117 360 357 4/23/99
124 119 111 360 352 9/4/98
125 120 120 360 360 7/23/99
- -------------------------------------------------------------------------------------------------------------------
126 120 119 360 359 7/6/99
127 120 118 360 358 5/26/99
128 202 199 202 199 5/3/99
129 120 110 360 350 9/1/98
130 120 116 300 296 3/31/99
- -------------------------------------------------------------------------------------------------------------------
131 120 109 360 349 7/31/98
132 120 120 360 360 7/29/99
133 120 118 300 298 5/6/99
134 120 115 300 295 2/1/99
135 120 119 360 359 6/25/99
- -------------------------------------------------------------------------------------------------------------------
136 120 112 300 292 11/6/98
137 120 120 300 300 8/2/99
138 120 119 360 359 6/15/99
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MATURITY BALLOON UNDERWRITTEN
CONTROL DATE OR ARD MONTHLY NET CASH
NUMBER OR ARD BALANCE ($) PREPAYMENT PROVISION PAYMENT ($) FLOW ($)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1 7/10/09 71,272,907 Lock/25_Defeasance/91_0%/4 575,491.93 9,894,954
2 5/10/09 54,942,475 Lock/27_Defeasance/86_0%/7 449,922.94 7,361,978
- ------------------------------------------------------------------------------------------------------------------------------
3 7/1/09 38,094,187 Lock/35_Defeasance/81_0%/4 374,997.71 8,551,567
3a 329,147
3b 427,069
3c 317,856
3d 496,388
3e 404,571
3f 332,190
3g 436,041
3h 286,046
3I 371,687
3j 653,874
3k 304,815
3l 380,295
3m 489,469
3n 596,340
3o 431,523
3p 971,638
3q 407,910
3r 914,713
- ------------------------------------------------------------------------------------------------------------------------------
4 7/10/09 37,746,005 Lock/25_Defeasance/91_0%/4 325,483.48 4,887,329
5 5/1/08 30,086,430 Lock/48_>YM or 1%/68_0%/4 238,898.09 4,103,369
6 6/1/09 25,999,961 Lock/35_Defeasance/81_0%/4 214,614.01 3,171,370
7 9/1/09 25,563,948 Lock/23_Def/93_0%/4 211,511.95 3,336,012
- ------------------------------------------------------------------------------------------------------------------------------
8 5/10/09 23,462,062 Lock/27_Defeasance/91_0%/2 189,731.10 3,050,782
8a 2,138,531
8b 436,331
8c 355,370
8d 120,550
- ------------------------------------------------------------------------------------------------------------------------------
9 8/10/09 22,712,015 Lock/24_Defeasance/92_0%/4 187,042.19 2,783,357
10 8/1/09 21,339,727 Lock/37_Defeasance/76_0%/7 174,290.58 2,488,306
10a 938,425
10b 1,154,380
10c 395,498
- ------------------------------------------------------------------------------------------------------------------------------
11 8/1/09 21,782,540 Lock/34_Def/81_0%/4 168,605.53 2,563,622
12 8/1/09 18,746,010 Lock/24_Def/92_0%/4 152,775.06 2,185,909
13 2/1/08 17,585,326 Lock/59_Defeasance/54/0%/7 136,180.56 2,158,435
- ------------------------------------------------------------------------------------------------------------------------------
14 5/10/09 15,616,950 Lock/27_Defeasance/89_0%/4 125,611.11 1,841,138
14a 413,288
14b 779,039
14c 648,811
- ------------------------------------------------------------------------------------------------------------------------------
15 6/10/09 15,947,938 Lock/26_Defeasance/90_0%/4 132,474.71 1,987,139
15a 943,046
15b 381,433
15c 248,237
15d 227,487
15e 186,936
- ------------------------------------------------------------------------------------------------------------------------------
16 5/1/09 13,395,118 Lock/27_Defeasance/93_0%/0 129,149.17 1,987,758
17 8/1/09 13,619,741 Lock/24_Def/92_0%/4 111,155.82 1,922,887
18 10/1/07 13,563,729 Lock/26_Defeasance/69_0%/4 108,088.56 1,659,160
19 8/10/09 12,879,353 Lock/24_Defeasance/96_0%/0 112,782.01 1,810,351
20 8/10/09 12,307,115 Lock/24_Defeasance/94_0%/2 103,680.60 1,489,044
- ------------------------------------------------------------------------------------------------------------------------------
21 8/10/09 11,838,868 Lock/24_Defeasance/94_0%/2 96,313.61 1,382,941
22 8/10/09 11,566,003 Lock/24_Defeasance/92_0%/4 98,171.15 1,883,664
23 6/1/09 10,978,115 Lock/26_Defeasance/94 93,533.00 1,275,637
23a 1,275,637
23b 0
- ------------------------------------------------------------------------------------------------------------------------------
24 8/10/14 5,156,523 Lock/24_Defeasance/152_0%/4 105,552.17 1,586,031
25 6/1/08 10,333,532 Lock/47_Defeasance/66_0%/7 81,048.81 1,386,612
26 8/1/06 10,019,142 Lock/25_Defeasance/57_0%/2 93,064.29 1,568,306
27 7/1/09 9,860,722 Lock/25_Def/91_0%/4 83,231.70 1,253,217
28 8/1/09 10,875,000 >YM or 1%/24_Def/92_0%/4 70,608.96 1,612,498
- ------------------------------------------------------------------------------------------------------------------------------
29 8/1/09 9,219,600 Lock/24_Def/92_0%/4 76,860.75 1,131,315
30 10/1/08 8,741,217 Lock/47_Defeasance/69_0%/4 67,449.92 1,100,970
31 8/1/09 8,257,449 Lock/47_Defeasance/71_0%/2 83,300.91 1,491,479
32 7/1/09 8,433,151 Lock/35_Def/81_0%/4 68,617.47 1,197,178
33 9/1/08 8,161,739 Lock/37_Defeasance/76_0%/7 63,523.07 1,027,351
- ------------------------------------------------------------------------------------------------------------------------------
34 8/10/14 7,345,614 Lock/24_Defeasance/149_0%/7 73,886.00 1,192,051
35 6/10/09 8,076,744 Lock/26_Defeasance/90_0%/4 66,415.57 951,927
35a 545,410
35b 406,517
36 8/10/09 8,064,667 Lock/24_Defeasance/92_0%/4 65,407.85 942,480
- ------------------------------------------------------------------------------------------------------------------------------
37 6/10/09 7,703,572 Lock/26_Defeasance/90_0%/4 63,927.32 988,977
38 8/1/09 6,643,979 Lock/47_Defeasance/71_0%/2 65,909.13 1,328,178
39 6/1/09 7,006,305 Lock/26_Defeasance/90_0%/4 58,160.70 834,892
40 8/10/09 6,614,670 Lock/24_Defeasance/89_0%/7 56,397.26 845,391
41 5/1/09 6,683,736 Lock/35_Def/81_0%/4 55,237.82 934,926
- ------------------------------------------------------------------------------------------------------------------------------
42 8/10/09 6,766,119 Lock/24_Defeasance/92_0%/4 54,876.08 790,480
43 6/10/09 6,529,095 Lock/26_Defeasance/90_0%/4 55,752.38 866,435
44 6/10/09 6,498,443 Lock/26_Defeasance/90_0%/4 54,541.57 852,560
45 7/10/09 6,486,291 Lock/25_Defeasance/91_0%/4 55,433.73 797,200
46 5/1/08 6,195,821 Lock/59_Defeasance/54_0%/7 48,483.44 833,544
- ------------------------------------------------------------------------------------------------------------------------------
47 8/10/09 5,744,489 Lock/24_Defeasance/92_0%/4 57,054.68 907,599
48 7/10/09 5,638,690 Lock/25_Defeasance/93_0%/2 53,546.17 767,940
49 6/10/09 6,087,132 Lock/26_Defeasance/90_0%/4 49,712.23 1,064,338
50 8/1/14 5,411,295 Lock/24_Def/152_0%/4 51,216.77 769,054
51 6/10/09 5,372,450 Lock/26_Defeasance/90_0%/4 52,307.35 848,009
- ------------------------------------------------------------------------------------------------------------------------------
52 8/1/09 5,837,845 Lock/24_Def/89_0%7 46,831.79 704,292
53 5/1/08 5,503,389 Lock/59_Defeasance/58_0%/4 43,312.55 677,778
54 8/1/09 5,033,485 Lock/48_Defeasance/70_0%/2 50,686.80 872,283
55 8/1/09 5,477,796 Lock/35_Def/81_0%/4 45,441.88 741,209
56 5/1/06 5,423,977 Lock/47_Defeasance/34_0%/2 48,593.66 845,964
- ------------------------------------------------------------------------------------------------------------------------------
57 7/10/09 5,298,647 Lock/25_Defeasance/91_0%/4 44,442.42 599,794
58 8/10/09 5,311,810 Lock/24_Defeasance/92_0%/4 45,933.93 658,496
59 8/1/09 5,327,832 Lock/35_Def/81_0%/4 44,041.97 660,515
60 8/1/09 5,197,333 Lock/24_Def/92_0%/4 42,841.72 617,299
- ------------------------------------------------------------------------------------------------------------------------------
61 3/1/09 4,728,687 Lock/29_Defeasance/87_0%/4 43,999.20 679,687
61a 92,869
61b 74,672
61c 72,830
61d 89,072
61e 350,244
- ------------------------------------------------------------------------------------------------------------------------------
62 8/1/09 5,088,202 Lock/35_Def/81_0%/4 41,467.52 603,194
63 8/1/09 4,995,313 Lock/24_Def/92_0%/4 40,623.32 654,186
64 8/10/09 4,575,919 Lock/24_Defeasance/92_0%/4 38,694.64 575,479
65 7/10/09 4,338,047 Lock/25_Defeasance/95 34,891.17 479,468
66 7/10/09 3,421,937 Lock/25_Defeasance/91_0%/4 41,092.29 776,898
- ------------------------------------------------------------------------------------------------------------------------------
67 5/10/09 4,333,162 Lock/27_Defeasance/89_0%/4 34,718.51 516,862
68 7/1/09 4,319,394 Lock/60_Defeasance/56_0%/4 34,955.38 538,488
69 6/1/08 4,072,491 Lock/47_Defeasance/69_0%/4 37,226.45 812,893
70 7/1/08 3,969,539 Lock/60_>1% or YM/53_0%/7 34,545.58 600,721
71 7/10/09 4,313,685 Lock/25_Defeasance/91_0%/4 36,536.50 544,160
- ------------------------------------------------------------------------------------------------------------------------------
72 6/1/09 4,337,358 Lock/35_Def/78_0%/7 36,005.23 573,492
73 7/1/09 4,321,344 Lock/35_Def/81_0%/4 36,094.55 527,713
74 7/5/09 4,156,075 Lock/25_Defeasance/91_0%/4 33,196.01 504,932
- ------------------------------------------------------------------------------------------------------------------------------
75 5/1/08 4,045,504 Lock/59_Defeasance/61 30,784.61 534,614
75a 98,598
75b 134,773
75c 22,871
75d 157,091
75f 121,281
- ------------------------------------------------------------------------------------------------------------------------------
76 6/1/09 4,001,527 Lock/35_Def/81_0%/4 32,238.55 614,865
77 9/1/09 3,930,022 Lock/23_Def/93_0%/4 33,185.92 483,428
78 6/1/09 3,821,325 Lock/35_Def/81_0%/4 30,941.87 465,657
79 6/10/09 3,763,982 Lock/26_Defeasance/90_0%/4 32,743.31 471,218
80 8/1/09 3,612,792 Lock/24_Def/92_0%/4 29,191.45 621,400
- ------------------------------------------------------------------------------------------------------------------------------
81 8/1/09 3,613,346 Lock/34_Def/82_0%/4 29,595.10 456,729
82 6/1/09 3,645,824 Lock/26_Defeasance/90_0%/4 30,692.66 464,457
83 8/1/08 3,434,117 Lock/35_Defeasance/81_0%/4 26,665.80 421,356
84 8/10/09 3,195,849 Lock/24_Defeasance/94_0%/2 31,626.97 477,986
85 6/10/09 3,042,478 Lock/26_Defeasance/90_0%/4 28,482.22 507,950
- ------------------------------------------------------------------------------------------------------------------------------
86 8/1/09 3,360,094 Lock/35_Def/78_0%/7 27,913.54 440,356
87 6/10/09 3,151,075 Lock/26_Defeasance/90_0%/4 26,806.87 399,862
88 8/1/09 3,140,777 Lock/24_Def/92_0%/4 25,999.66 442,871
89 7/1/09 3,137,477 Lock/35_Def/81_0%/4 26,206.14 379,060
90 7/1/09 2,852,028 Lock/35_Def/81_0%/4 27,270.72 412,656
- ------------------------------------------------------------------------------------------------------------------------------
91 7/1/09 3,084,661 Lock/35_Def/81_0%/4 26,986.20 448,482
92 6/1/09 2,943,326 Lock/26 Defeasance/90_0%/4 24,304.11 415,298
93 3/1/09 2,987,633 Lock/36_Defeasance/80_0%/4 25,374.14 413,962
94 7/10/09 2,883,917 Lock/25_Defeasance/88_0%/7 25,015.94 385,942
95 6/1/09 2,639,871 Lock/35_Def/81_0%/4 23,996.08 626,076
- ------------------------------------------------------------------------------------------------------------------------------
96 6/10/09 2,851,008 Lock/26_Defeasance/94 24,381.31 368,029
97 6/1/09 2,826,138 Lock/47_Defeasance/69_0%/4 23,377.64 359,706
98 6/1/09 2,782,299 Lock/26_Defeasance/90_0%/4 21,982.13 389,564
99 8/10/09 2,770,449 Lock/24_Defeasance/92_0%/4 23,939.73 343,682
100 8/1/09 2,778,545 Lock/35_Def/81_0%/4 22,919.82 350,039
- ------------------------------------------------------------------------------------------------------------------------------
101 8/10/09 2,649,593 Lock/24_Defeasance/92_0%/4 22,708.94 343,510
102 3/1/09 2,483,150 Lock/59_Defeasance/57_0%/4 20,361.97 317,221
103 6/1/14 2,120,836 Lock/60_Defeasance/118_0%/2 20,424.93 295,929
104 8/1/09 2,364,289 Lock/35_Def/81_0%/4 19,130.94 303,040
105 6/10/09 2,276,538 Lock/26_Defeasance/90_0%/4 18,905.95 283,721
- ------------------------------------------------------------------------------------------------------------------------------
106 6/1/09 2,264,589 Lock/26_Def/90_0%/4 17,970.06 330,051
107 6/10/09 2,190,258 Lock/26_Defeasance/90_0%/4 18,493.85 281,255
108 7/10/09 2,182,943 Lock/25_Defeasance/88_0%/7 19,047.79 294,770
109 6/10/09 2,051,695 Lock/26_Defeasance/90_0%/4 16,259.62 250,012
110 5/10/09 1,966,471 Lock/27_Defeasance/91_0%/2 15,975.73 243,183
- ------------------------------------------------------------------------------------------------------------------------------
111 8/1/09 1,969,845 Lock/35_Def/81_0%/4 16,421.96 245,436
112 7/10/09 1,834,096 Lock/25_Defeasance/88_0%/7 15,627.96 235,143
113 7/10/09 1,818,520 Lock/25_Defeasance/91_0%/4 15,023.64 221,826
114 6/10/09 1,794,963 Lock/26_Defeasance/94 14,906.61 223,864
115 8/1/09 1,839,811 Lock/35_Def/81_0%/4 15,815.12 281,351
- ------------------------------------------------------------------------------------------------------------------------------
116 5/1/09 1,787,011 Lock/27_Defeasance/89_0%/4 14,591.75 258,713
117 11/1/08 1,766,863 Lock/59_Defeasance/57_0%/4 13,984.29 258,658
118 8/10/09 1,725,829 Lock/24_Defeasance/92_0%/4 14,626.73 219,831
119 3/1/09 1,574,204 Lock/59_Defeasance/57_0%/4 14,132.46 238,977
119a 98,352
119b 140,625
- ------------------------------------------------------------------------------------------------------------------------------
120 7/1/09 1,569,883 Lock/35_Defeasance/81_0%/4 15,453.86 352,684
121 1/1/09 1,495,278 Lock/59_Defeasance/57_0%/4 14,134.70 230,749
122 8/10/10 1,554,374 Lock/24_Defeasance/104_0%/4 13,516.08 210,712
123 5/10/09 1,579,714 Lock/27_Defeasance/89_0%/4 13,230.23 225,160
124 11/1/08 1,493,902 Lock/35_Defeasance/80_0%/4 11,292.36 199,482
125 8/10/09 1,476,116 Lock/24_Defeasance/94_0%2 12,689.13 192,930
- ------------------------------------------------------------------------------------------------------------------------------
126 7/10/09 1,463,318 Lock/25_Defeasance/91_0%/4 12,740.28 200,853
127 6/1/09 1,454,756 Lock/35_Def/81_0%/4 11,999.64 200,994
128 3/10/16 0 Lock/27_Defeasance/171_0%/4 13,078.79 157,775
129 10/1/08 1,251,499 Lock/47_Defeasance/69_0%/4 9,891.56 157,638
130 4/1/09 1,192,888 Lock/35_Def/81_0%/4 11,267.21 195,983
- ------------------------------------------------------------------------------------------------------------------------------
131 9/1/08 1,212,619 Lock/35_Defeasance/81_0%/4 9,548.38 164,886
132 8/10/09 1,171,171 Lock/24_Defeasance/92_0%/4 10,067.72 169,441
133 6/1/09 1,028,619 Lock/26_Defeasance/90_0%/4 9,589.81 191,165
134 3/1/09 1,009,107 Lock/59_Defeasance/57_0%/4 9,059.26 173,940
135 7/10/09 1,041,972 Lock/25_Defeasance/91_0%/4 9,280.69 140,494
- ------------------------------------------------------------------------------------------------------------------------------
136 12/1/08 886,827 Lock/59_Defeasance/57_0%4 7,950.88 128,924
137 8/10/09 861,674 Lock/24_Defeasance/92_0%/4 8,558.20 124,454
138 7/10/09 769,147 Lock/25_Defeasance/91_0%/4 6,617.58 95,770
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
UNDERWRITTEN CROSS ORIGINAL ORIGINAL SCHEDULED CROSS
CONTROL NCF COLLATERALIZED APPRAISAL APPRAISAL CUT-OFF DATE MATURITY OR ARD COLLATERALIZED
NUMBER DSCR (X) DSCR (X) VALUE DATE LTV (%) DATE LTV (%) LTV RATIO (%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 1.43 132,500,000 5/5/99 60.38 53.79
2 1.36 86,400,000 1/30/99 72.77 63.59
- ------------------------------------------------------------------------------------------------------------------------------------
3 1.90 1.90 93,950,000 49.55 40.55 49.29
3a 4,050,000 4/1/99
3b 4,250,000 4/1/99
3c 3,600,000 4/1/99
3d 5,050,000 4/1/99
3e 4,400,000 4/1/99
3f 3,650,000 4/1/99
3g 4,100,000 4/1/99
3h 2,800,000 4/1/99
3I 3,700,000 4/1/99
3j 6,150,000 4/1/99
3k 4,400,000 4/1/99
3l 4,400,000 4/1/99
3m 5,300,000 4/1/99
3n 5,250,000 4/1/99
3o 4,700,000 4/1/99
3p 11,100,000 4/1/99
3q 4,750,000 4/1/99
3r 12,300,000 4/1/99
- ------------------------------------------------------------------------------------------------------------------------------------
4 1.25 59,000,000 6/10/99 72.29 63.98
5 1.43 51,600,000 4/29/99 65.23 58.31
6 1.23 38,900,000 2/11/99 74.47 66.84
7 1.31 38,600,000 7/1/99 73.83 66.23
- ------------------------------------------------------------------------------------------------------------------------------------
8 1.34 37,385,000 72.07 62.76
8a 25,000,000 3/16/99
8b 6,150,000 3/6/99
8c 4,435,000 3/11/99
8d 1,800,000 3/9/99
- ------------------------------------------------------------------------------------------------------------------------------------
9 1.24 38,000,000 5/11/99 68.42 59.77
10 1.19 28,800,000 86.48 74.10
10a 10,600,000 7/15/98
10b 14,000,000 7/15/98
10c 4,200,000 7/15/98
- ------------------------------------------------------------------------------------------------------------------------------------
11 1.27 50,000,000 7/1/99 46.00 43.57
12 1.39 25,000,000 6/22/99 72.00 74.98
13 1.32 26,300,000 12/29/98 76.73 66.86
- ------------------------------------------------------------------------------------------------------------------------------------
14 1.22 24,380,000 73.67 64.06
14a 5,900,000 3/9/99
14b 10,140,000 3/11/99
14c 8,340,000 3/10/99
- ------------------------------------------------------------------------------------------------------------------------------------
15 1.25 24,400,000 71.39 65.36
15a 12,000,000 3/17/99
15b 4,600,000 3/23/99
15c 3,100,000 3/18/99
15d 2,500,000 3/25/99
15e 2,200,000 3/24/99
- ------------------------------------------------------------------------------------------------------------------------------------
16 1.28 22,000,000 3/1/99 72.55 60.89
17 1.44 22,150,000 6/7/99 65.46 61.49
18 1.28 18,900,000 3/2/99 79.39 71.77
19 1.69 21,500,000 12/18/99 53.49 59.90
20 1.20 18,000,000 6/10/99 77.78 68.37
- ------------------------------------------------------------------------------------------------------------------------------------
21 1.20 17,000,000 5/26/99 80.00 69.64
22 1.60 22,600,000 6/1/99 58.10 51.18
23 1.32 16,600,000 64.62 66.13
23a 7,500,000 3/1/99
23b 9,100,000 3/1/99
- ------------------------------------------------------------------------------------------------------------------------------------
24 1.25 16,750,000 6/30/99 73.13 30.79
25 1.43 16,500,000 3/18/98 71.88 62.63
26 1.40 15,900,000 2/1/99 70.44 63.01
27 1.25 15,000,000 6/2/99 72.74 65.74
28 1.90 20,800,000 5/24/99 52.28 52.28
- ------------------------------------------------------------------------------------------------------------------------------------
29 1.23 13,100,000 6/2/99 78.24 70.38
30 1.36 13,600,000 2/3/99 74.36 64.27
31 1.49 17,200,000 6/1/99 58.14 48.01
32 1.45 12,250,000 4/22/99 77.11 68.84
33 1.35 13,400,000 5/7/98 70.24 60.91
- ------------------------------------------------------------------------------------------------------------------------------------
34 1.63 13,060,000 10/15/98 58.61 56.25
35 1.19 11,400,000 81.03 70.85
35a 6,600,000 3/17/99
35b 4,800,000 3/17/99
36 1.20 12,170,000 6/1/99 72.72 66.27
- ------------------------------------------------------------------------------------------------------------------------------------
37 1.29 13,100,000 4/13/99 67.08 58.81
38 1.68 14,100,000 8/1/99 57.45 47.12
39 1.20 11,300,000 2/1/99 68.95 62.00
40 1.25 11,700,000 12/1/98 64.10 56.54
41 1.41 9,500,000 2/25/99 78.30 70.36
- ------------------------------------------------------------------------------------------------------------------------------------
42 1.20 10,800,000 6/1/99 68.75 62.65
43 1.62 13,600,000 12/30/98 43.31 48.01
44 1.30 12,600,000 2/18/99 58.65 51.57
45 1.20 10,000,000 4/26/99 73.46 64.86
46 1.43 9,500,000 1/19/98 74.84 65.22
- ------------------------------------------------------------------------------------------------------------------------------------
47 1.33 10,400,000 7/1/99 67.31 55.24
48 1.20 9,100,000 6/2/99 76.85 61.96
49 1.78 12,700,000 2/1/99 54.92 47.93
50 1.25 8,400,000 6/7/99 78.57 64.42
51 1.35 10,400,000 1/19/99 63.34 51.66
- ------------------------------------------------------------------------------------------------------------------------------------
52 1.25 8,450,000 1/20/99 77.81 69.09
53 1.30 8,200,000 5/15/99 77.01 67.11
54 1.43 8,600,000 7/1/99 70.93 58.53
55 1.36 7,630,000 4/22/99 79.95 71.79
56 1.45 8,600,000 3/7/99 70.79 63.07
- ------------------------------------------------------------------------------------------------------------------------------------
57 1.20 8,700,000 4/30/99 64.96 60.90
58 1.19 9,500,000 6/16/99 63.16 55.91
59 1.25 7,600,000 2/8/99 78.16 70.10
60 1.20 7,250,000 5/13/99 80.00 71.69
- ------------------------------------------------------------------------------------------------------------------------------------
61 1.29 7,640,000 74.90 61.89
61a 1,000,000 12/23/98
61b 840,000 12/23/98
61c 860,000 12/23/98
61d 960,000 12/23/98
61e 3,980,000 12/23/98
- ------------------------------------------------------------------------------------------------------------------------------------
62 1.21 7,150,000 6/25/99 79.72 71.16
63 1.34 8,000,000 7/9/99 70.00 62.44
64 1.24 6,700,000 3/17/99 77.61 68.30
65 1.15 6,800,000 4/28/99 73.48 63.79
66 1.58 11,050,000 3/5/99 45.18 30.97
- ------------------------------------------------------------------------------------------------------------------------------------
67 1.24 6,250,000 3/10/99 79.83 69.33
68 1.28 7,100,000 1/9/98 69.95 60.84
69 1.82 9,400,000 5/11/99 52.39 43.32
70 1.45 8,200,000 6/13/98 59.99 48.41
71 1.24 6,150,000 11/16/98 79.63 70.14
- ------------------------------------------------------------------------------------------------------------------------------------
72 1.33 6,600,000 4/2/99 73.08 65.72
73 1.22 6,250,000 5/12/99 76.77 69.14
74 1.27 7,200,000 4/1/99 66.62 57.72
- ------------------------------------------------------------------------------------------------------------------------------------
75 1.45 6,580,000 71.09 61.48
75a 1,150,000 5/17/99
75b 1,600,000 5/17/99
75c 330,000 5/17/99
75d 2,200,000 5/17/99
75f 1,300,000 5/17/99
- ------------------------------------------------------------------------------------------------------------------------------------
76 1.59 6,000,000 4/5/99 74.91 66.69
77 1.21 5,900,000 6/22/99 73.76 66.61
78 1.25 5,350,000 4/14/99 80.09 71.43
79 1.20 5,750,000 5/10/99 73.74 65.46
80 1.77 5,700,000 5/30/99 71.21 63.38
- ------------------------------------------------------------------------------------------------------------------------------------
81 1.29 5,240,000 6/1/99 77.12 68.96
82 1.26 5,600,000 3/1/99 72.07 65.10
83 1.32 5,000,000 4/25/98 79.19 68.68
84 1.26 5,800,000 7/2/99 67.24 55.10
85 1.49 6,500,000 4/23/99 58.33 46.81
- ------------------------------------------------------------------------------------------------------------------------------------
86 1.31 4,650,000 4/22/99 80.43 72.26
87 1.24 5,000,000 3/28/99 71.41 63.02
88 1.42 5,400,000 6/22/99 64.81 58.16
89 1.21 4,350,000 5/12/99 80.08 72.13
90 1.26 5,500,000 1/1/99 62.15 51.86
- ------------------------------------------------------------------------------------------------------------------------------------
91 1.38 4,600,000 4/27/99 73.35 67.06
92 1.42 4,340,000 4/1/99 77.09 67.82
93 1.36 4,415,000 1/23/99 74.57 67.67
94 1.29 4,675,000 2/10/99 69.59 61.69
95 2.17 5,330,000 4/26/99 60.85 49.53
- ------------------------------------------------------------------------------------------------------------------------------------
96 1.26 4,700,000 3/19/99 68.64 60.66
97 1.28 4,600,000 5/5/99 68.40 61.44
98 1.48 4,400,000 2/2/99 71.50 63.23
99 1.20 4,875,000 9/1/99 64.21 56.83
100 1.27 4,400,000 5/21/99 70.45 63.15
- ------------------------------------------------------------------------------------------------------------------------------------
101 1.26 4,200,000 3/1/99 71.43 63.09
102 1.30 3,700,000 9/15/98 74.80 67.11
103 1.21 5,042,000 1/13/99 54.47 42.06
104 1.32 3,670,000 6/15/99 72.34 64.42
105 1.25 3,500,000 4/13/99 74.19 65.04
- ------------------------------------------------------------------------------------------------------------------------------------
106 1.53 3,200,000 1/22/99 79.90 70.77
107 1.27 3,100,000 5/5/99 80.22 70.65
108 1.29 3,500,000 10/28/98 70.25 62.37
109 1.28 3,240,000 4/27/99 73.19 63.32
110 1.27 3,050,000 3/30/99 73.95 64.47
- ------------------------------------------------------------------------------------------------------------------------------------
111 1.25 2,760,000 5/10/99 79.35 71.37
112 1.25 2,600,000 4/23/99 79.96 70.54
113 1.23 2,600,000 2/25/99 79.95 69.94
114 1.25 2,600,000 4/16/99 78.74 69.04
115 1.48 3,000,000 5/22/99 67.50 61.33
- ------------------------------------------------------------------------------------------------------------------------------------
116 1.48 3,200,000 2/2/99 62.40 55.84
117 1.54 3,000,000 7/14/98 66.25 58.90
118 1.25 2,650,000 6/7/99 73.96 65.13
119 1.41 2,700,000 71.83 58.30
119a 1,175,000 9/2/98
119b 1,525,000 9/2/98
- ------------------------------------------------------------------------------------------------------------------------------------
120 1.90 1.90 4,450,000 4/1/99 43.11 35.28 49.29
121 1.36 3,000,000 5/12/99 61.52 49.84
122 1.30 2,500,000 6/11/99 72.00 62.17
123 1.42 2,600,000 3/17/99 69.10 60.76
124 1.47 2,800,000 5/15/98 62.06 53.35
125 1.27 2,250,000 6/7/99 74.22 65.61
- ------------------------------------------------------------------------------------------------------------------------------------
126 1.31 2,400,000 5/6/99 68.72 60.97
127 1.40 2,275,000 3/30/99 71.26 63.95
128 1.01 1,750,000 3/3/99 83.12 0.00
129 1.33 2,050,000 7/31/98 70.16 61.05
130 1.45 2,150,000 2/10/99 66.73 55.48
- ------------------------------------------------------------------------------------------------------------------------------------
131 1.44 1,850,000 6/9/98 73.75 65.55
132 1.40 1,800,000 5/27/99 73.61 65.07
133 1.66 1,900,000 2/4/99 65.66 54.14
134 1.60 1,800,000 9/2/98 69.07 56.06
135 1.26 1,600,000 3/11/99 72.97 65.12
- ------------------------------------------------------------------------------------------------------------------------------------
136 1.35 1,500,000 8/20/98 72.67 59.12
137 1.21 1,450,000 12/2/98 72.41 59.43
138 1.21 1,100,000 3/7/99 79.05 69.92
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CUT-OFF DATE
BALANCE PER SQ.
CONTROL YEAR YEAR UNITS, BEDS, UNIT FT., UNIT, BED,
NUMBER BUILT RENOVATED ROOMS, SQFT DESCRIPTION PAD OF ROOM ($)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1 1963-1996 1999 550,949 Sq Ft 145.20
2 1960, 1983-1995 1996 533,192 Sq Ft 117.92
- -------------------------------------------------------------------------------------------------------------------
3 2,327 Rooms 20,004.64
3a 1993-1994 1998-1999 126 Rooms
3b 1994 1998-1999 126 Rooms
3c 1996 NAP 128 Rooms
3d 1991 1998 126 Rooms
3e 1991 1998/99 134 Rooms
3f 1987 1997 120 Rooms
3g 1985 1997/98 126 Rooms
3h 1987 1998/99 130 Rooms
3I 1991 1998 108 Rooms
3j 1996 NAP 124 Rooms
3k 1990 1998/99 111 Rooms
3l 1996 NAP 123 Rooms
3m 1985 1992 & 1999 128 Rooms
3n 1987 1995-1996 120 Rooms
3o 1988 1998-1999 96 Rooms
3p 1990 1998 168 Rooms
3q 1989 1997-1998 125 Rooms
3r 1988 & 1990 1998 208 Rooms
- -------------------------------------------------------------------------------------------------------------------
4 1890's,1920's 1991/1992 277,536 Sq Ft 153.67
5 1983 NAP 213,575 Sq Ft 157.61
6 1950 1991 213,609 Sq Ft 135.61
7 1958 NAP 301,765 Sq Ft 94.44
- -------------------------------------------------------------------------------------------------------------------
8 2,316 Units 11,633.77
8a 1973 1995 1,677 Units
8b 1980 NAP 345 Units
8c 1978 1995 198 Units
8d 1978 NAP 96 Units
- -------------------------------------------------------------------------------------------------------------------
9 1984 & 1990 NAP 269,650 Sq Ft 96.42
10 660 Units 37,735.55
10a 1969-70 NAP 264 Units
10b 1973 NAP 264 Units
10c 1966 NAP 132 Units
- -------------------------------------------------------------------------------------------------------------------
11 1917 1985 193,639 Sq Ft 118.78
12 1997 NAP 180,683 Sq Ft 116.23
13 1972/1976 NAP 576 Units 35,036.72
- -------------------------------------------------------------------------------------------------------------------
14 384 Units 46,775.91
14a 1986 NAP 98 Units
14b 1986 1989 164 Units
14c 1986 NAP 122 Units
- -------------------------------------------------------------------------------------------------------------------
15 739,526 Sq Ft 23.56
15a 1959, 1972 1995-1996 302,700 Sq Ft
15b 1982/1998 NAP 185,000 Sq Ft
15c 1973 NAP 89,826 Sq Ft
15d 1981/1995 NAP 90,000 Sq Ft
15e 1962, 1972 NAP 72,000 Sq Ft
- -------------------------------------------------------------------------------------------------------------------
16 1988 1997 181 Rooms 88,182.39
17 1998/2000 NAP 177,229 Sq Ft 86.05
18 1972 1999 614 Units 24,437.31
19 1974/1983/1992/1999 NAP 899,697 Sq Ft 16.12
20 1998-1999 NAP 120,225 Sq Ft 116.45
- -------------------------------------------------------------------------------------------------------------------
21 1990/1991 NAP 278 Units 48,920.86
22 1987 & 1997 1994/1995 243,370 Sq Ft 53.95
23 251,862 Sq Ft 49.37
23a 1981-1983 NAP 134,057 Sq Ft
23b 1980-1981 NAP 117,805 Sq Ft
- -------------------------------------------------------------------------------------------------------------------
24 Between 1966 & 1973 1998-1999 625 Units 19,600.00
25 1961 1998 373,180 Sq Ft 31.78
26 1997 NAP 179 Rooms 62,569.83
27 1979 1997-1998 151,946 Sq Ft 71.81
28 1998 NAP 127,082 Sq Ft 85.57
- -------------------------------------------------------------------------------------------------------------------
29 1975 1996 189,800 Sq Ft 54.00
30 1958 1990 240,330 Sq Ft 42.08
31 1990 1995/1996 203 Rooms 49,261.08
32 1972 1994 448 Units 21,083.90
33 1929 1984 106,817 Sq Ft 88.12
- -------------------------------------------------------------------------------------------------------------------
34 1969/1971 1997/1998 104,684 Sq Ft 88.84
35 368 Units 25,101.03
35a 1984 NAP 216 Units
35b 1984 NAP 152 Units
36 1989 NAP 77,583 Sq Ft 114.07
- -------------------------------------------------------------------------------------------------------------------
37 1984 1997 89,415 Sq Ft 98.28
38 1998 NAP 108 Rooms 75,000.00
39 1990 NAP 55,563 Sq Ft 140.23
40 1980 NAP 90,223 Sq Ft 83.13
41 1918 1990 84,162 Sq Ft 88.38
- -------------------------------------------------------------------------------------------------------------------
42 1959 NAP 62,042 Sq Ft 119.68
43 1907 1998/1999 (ongoing) 62,589 Sq Ft 118.08
44 1966 1993 & 1996 56,132 Sq Ft 131.66
45 1969 1998-1999 286 Units 25,686.28
46 1973 1987 92,474 Sq Ft 76.89
- -------------------------------------------------------------------------------------------------------------------
47 1999 NAP 106,200 Sq Ft 65.91
48 1996-1998 NAP 176 Units 39,734.94
49 1973, 1975 In Progress 744,800 Sq Ft 9.37
50 1987 1993-1997 126,158 Sq Ft 52.32
51 1926 1998 68,113 Sq Ft 96.71
- -------------------------------------------------------------------------------------------------------------------
52 1997 NAP 85,410 Sq Ft 76.98
53 1987 NAP 63,461 Sq Ft 99.51
54 1996 NAP 128 Rooms 47,656.25
55 1987 NAP 53,928 Sq Ft 113.11
56 1988 NAP 96 Rooms 63,417.07
- -------------------------------------------------------------------------------------------------------------------
57 1974 1998 66 Units 91,389.64
58 1984 NAP 115,145 Sq Ft 52.11
59 1997-1998 NAP 124,095 Sq Ft 47.87
60 1985 1997/1998 224 Units 25,892.86
- -------------------------------------------------------------------------------------------------------------------
61 170 Units 33,662.92
61a 1920 NAP 20 Units
61b 1920 NAP 20 Units
61c 1928 NAP 20 Units
61d 1928 NAP 20 Units
61e 1961 NAP 90 Units
- -------------------------------------------------------------------------------------------------------------------
62 1905 UAV 40 Units 142,500.00
63 1979 1997 150,476 Sq Ft 37.22
64 1972 1997-1999 289 Units 17,993.08
65 1991 NAP 185,504 Sq Ft 26.94
66 1985 NAP 118,006 Sq Ft 42.30
- -------------------------------------------------------------------------------------------------------------------
67 1976, 1996 NAP 200 Units 24,946.56
68 1930 1992 127,488 Sq Ft 38.96
69 1956 1989 305,148 Sq Ft 16.14
70 1990 NAP 320 Units 15,373.33
71 1987 & 1991 NAP 152 Units 32,219.93
- -------------------------------------------------------------------------------------------------------------------
72 1984 NAP 81,821 Sq Ft 58.95
73 1996, 1998 NAP 66,625 Sq Ft 72.02
74 1963 1997-1998 183,270 Sq Ft 26.17
- -------------------------------------------------------------------------------------------------------------------
75 259 Units 18,061.34
75a 1969 NAP 47 Units
75b 1970 NAP 54 Units
75c 1973 NAP 14 Units
75d 1973 NAP 96 Units
75f 1973 NAP 48 Units
- -------------------------------------------------------------------------------------------------------------------
76 1968 1999 395 Units 11,378.72
77 1974-1976 UAV 171,042 Sq Ft 25.44
78 1989 NAP 53,821 Sq Ft 79.61
79 1985 NAP 62,036 Sq Ft 68.35
80 1971 1992 192 Units 21,140.63
- -------------------------------------------------------------------------------------------------------------------
81 1987 NAP 52,425 Sq Ft 77.08
82 1988 1995 27,514 Sq Ft 146.69
83 1967 1998 228 Units 17,366.34
84 1984 NAP 263,500 Sq Ft 14.80
85 1965/1973 1989 163,090 Sq Ft 23.25
- -------------------------------------------------------------------------------------------------------------------
86 1967 UAV 132 Units 28,333.33
87 1984 NAP 40,834 Sq Ft 87.44
88 1975 1994 76,372 Sq Ft 45.83
89 1984 1997-1998 144 Units 24,191.54
90 1966 - 1975 1998 110,848 Sq Ft 30.84
- -------------------------------------------------------------------------------------------------------------------
91 1976, 1985 1996 80,891 Sq Ft 41.71
92 1986 NAP 158 Units 20,909.96
93 1971 & 1983 1998 55,162 Sq Ft 59.68
94 1984 NAP 51,117 Sq Ft 63.65
95 1980-1982, 1985-1989 1997 107,664 Sq Ft 30.12
- -------------------------------------------------------------------------------------------------------------------
96 1942/1975 NAP 26,775 Sq Ft 120.49
97 1984 NAP 139,971 Sq Ft 22.48
98 1990 NAP 21,523 Sq Ft 146.17
99 1999 NAP 24,444 Sq Ft 128.05
100 1983 NAP 30,838 Sq Ft 100.53
- -------------------------------------------------------------------------------------------------------------------
101 1965-1986 NAP 87,285 Sq Ft 34.37
102 1970 NAP 44,923 Sq Ft 61.60
103 1997-1998 NAP 120 Units 22,887.17
104 1905 1994 25,711 Sq Ft 103.26
105 1972-1980 1998 100 Units 25,964.94
- -------------------------------------------------------------------------------------------------------------------
106 1970 1994 164 Units 15,589.97
107 1998 NAP 35,720 Sq Ft 69.62
108 1976 NAP 30,947 Sq Ft 79.45
109 1986 NAP 107 Pads 22,162.27
110 1968 1997/1998 64 Units 35,240.00
- -------------------------------------------------------------------------------------------------------------------
111 1998/1999 NAP 37,484 Sq Ft 58.42
112 1962, 1963 1998 83 Units 25,047.39
113 1973 1986/ongoing 100 Units 20,788.04
114 1925/1965-1967 NAP 59 Units 34,698.91
115 1986 NAP 46,562 Sq Ft 43.49
- -------------------------------------------------------------------------------------------------------------------
116 1987 NAP 29,352 Sq Ft 68.03
117 1967 1986 184 Pads 10,802.02
118 1970 thru 1977 1998 58 Units 33,793.10
119 45,092 Sq Ft 43.01
119a 1970 1985 20,000 Sq Ft
119b 1987 NAP 25,092 Sq Ft
- -------------------------------------------------------------------------------------------------------------------
120 1992 1998-1999 126 Rooms 15,225.27
121 1915 1987 90,000 Sq Ft 20.51
122 1999 NAP 11,000 Sq Ft 163.64
123 1972 NAP 110 Units 16,332.97
124 1980 1991 18,122 Sq Ft 95.88
125 1981 NAP 72 Units 23,194.44
- -------------------------------------------------------------------------------------------------------------------
126 1945 1995 20,700 Sq Ft 79.67
127 1984, 1986 NAP 64,125 Sq Ft 25.28
128 1996 NAP 12,608 Sq Ft 115.37
129 1988 NAP 20,108 Sq Ft 71.53
130 1985 NAP 27,650 Sq Ft 51.89
- -------------------------------------------------------------------------------------------------------------------
131 1985 1995 30,312 Sq Ft 45.01
132 1966 1998-1999 100 Units 13,250.00
133 1982 NAP 40,400 Sq Ft 30.88
134 1959 NAP 31,222 Sq Ft 39.82
135 1998 NAP 9,742 Sq Ft 119.84
- -------------------------------------------------------------------------------------------------------------------
136 1973 NAP 36 Units 30,278.05
137 1998 NAP 15,000 Sq Ft 70.00
138 1970 1996-98 28 Units 31,056.09
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ANNUAL
CONTROL OCCUPANCY OWNERSHIP REQUIRED
NUMBER OCCUPANCY (%) DATE INTEREST LOCKBOX RESERVES
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1 96 6/15/99 Fee Simple Soft 0
2 96 3/1/99 Fee Simple Hard 79,980
- ----------------------------------------------------------------------------------------------------------------
3 Fee Simple and Leasehold Hard 2,121,487
3a 68 6/30/99 Fee Simple
3b 69 6/30/99 Fee Simple
3c 65 6/30/99 Fee Simple
3d 71 6/30/99 Fee Simple
3e 66 6/30/99 Fee Simple
3f 62 6/30/99 Fee Simple
3g 77 6/30/99 Fee Simple
3h 65 6/30/99 Fee Simple
3I 73 6/30/99 Fee Simple
3j 73 6/30/99 Leasehold
3k 68 6/30/99 Fee Simple
3l 79 6/30/99 Fee Simple
3m 87 6/30/99 Fee Simple
3n 79 6/30/99 Fee Simple
3o 81 6/30/99 Leasehold
3p 81 6/30/99 Fee Simple
3q 76 6/30/99 Fee Simple
3r 66 6/30/99 Fee Simple
- ----------------------------------------------------------------------------------------------------------------
4 91 5/17/99 Fee Simple Hard 27,754
5 99 4/30/99 Fee Simple Hard 43,942
6 100 3/31/99 Fee Simple Hard 10,750
7 97 5/31/99 Fee Simple NAP 60,282
- ----------------------------------------------------------------------------------------------------------------
8 Fee Simple NAP 696,300
8a 85 3/16/99
8b 93 3/16/99
8c 97 3/16/99
8d 97 3/17/99
- ----------------------------------------------------------------------------------------------------------------
9 95 7/31/99 Fee Simple Soft 43,144
10 Fee Simple Soft 4,448,763
10a 95 4/22/99
10b 99 4/22/99
10c 96 4/22/99
- ----------------------------------------------------------------------------------------------------------------
11 97 7/1/99 Fee Simple NAP 29,436
12 98 6/22/99 Fee Simple NAP 22,242
13 94 4/1/99 Fee Simple Springing 144,000
- ----------------------------------------------------------------------------------------------------------------
14 Fee Simple Hard 106,824
14a 92 4/19/99
14b 95 4/21/99
14c 100 4/19/99
- ----------------------------------------------------------------------------------------------------------------
15 Fee Simple NAP 0
15a 100 3/17/99
15b 100 6/10/99
15c 100 6/10/99
15d 100 6/10/99
15e 100 6/10/99
- ----------------------------------------------------------------------------------------------------------------
16 71 12/31/98 Fee Simple NAP 378,579
17 97 7/6/99 Leasehold NAP 19,672
18 97 3/31/99 Fee Simple Springing 153,504
19 100 5/7/99 Fee Simple Soft 92,628
20 100 6/10/99 Fee Simple Springing 13,224
- ----------------------------------------------------------------------------------------------------------------
21 94 5/3/99 Fee Simple Soft 67,560
22 100 7/5/99 Fee Simple Hard 0
23 Fee Simple Hard 40,250
23a 89 2/22/99
23b 86 2/22/99
- ----------------------------------------------------------------------------------------------------------------
24 85 6/30/99 Fee Simple NAP 162,504
25 89 2/1/99 Fee Simple Springing 0
26 77 6/30/99 Fee Simple Hard 0
27 90 6/18/99 Fee Simple NAP 22,788
28 100 5/10/99 Fee Simple NAP 0
- ----------------------------------------------------------------------------------------------------------------
29 93 6/18/99 Fee Simple NAP 30,368
30 90 12/31/98 Fee Simple Soft 40,872
31 73 6/15/99 Leasehold Hard 429,872
32 88 5/25/99 Fee Simple NAP 156,800
33 91 5/31/99 Fee Simple Springing 21,360
- ----------------------------------------------------------------------------------------------------------------
34 99 4/1/99 Leasehold NAP 12,562
35 Fee Simple NAP 98,080
35a 96 4/27/99
35b 95 4/27/99
36 100 6/9/99 Fee Simple NAP 11,637
- ----------------------------------------------------------------------------------------------------------------
37 80 5/24/99 Fee Simple Springing 13,412
38 81 6/18/99 Fee Simple Springing 133,003
39 96 7/13/99 Fee Simple NAP 8,340
40 98 4/16/99 Fee Simple Springing 18,948
41 94 3/31/99 Fee Simple NAP 18,516
- ----------------------------------------------------------------------------------------------------------------
42 98 6/9/99 Fee Simple NAP 9,306
43 91 4/1/99 Leasehold Soft 16,273
44 100 3/1/99 Fee Simple NAP 6,174
45 96 4/21/99 Fee Simple NAP 57,200
46 99 3/31/99 Fee Simple Springing 13,811
- ----------------------------------------------------------------------------------------------------------------
47 100 5/25/99 Fee Simple Soft 15,930
48 96 6/2/99 Fee Simple NAP 34,144
49 100 1/25/99 Fee Simple NAP 22,344
50 97 6/18/99 Fee Simple Hard 21,554
51 93 3/30/99 Fee Simple NAP 6,816
- ----------------------------------------------------------------------------------------------------------------
52 99 6/17/99 Fee Simple NAP 0
53 97 3/31/99 Fee Simple Springing 17,163
54 74 6/15/99 Fee Simple Hard 30,000
55 100 7/16/99 Leasehold NAP 10,856
56 84 12/31/98 Fee Simple Springing 0
- ----------------------------------------------------------------------------------------------------------------
57 100 5/10/99 Fee Simple NAP 0
58 94 7/22/99 Fee Simple NAP 17,272
59 96 4/10/99 Fee Simple NAP 12,410
60 95 6/30/99 Fee Simple NAP 50,400
- ----------------------------------------------------------------------------------------------------------------
61 Fee Simple NAP 48,105
61a 100 2/16/99
61b 100 2/16/99
61c 100 2/16/99
61d 100 2/16/99
61e 100 2/16/99
- ----------------------------------------------------------------------------------------------------------------
62 100 7/1/99 Fee Simple NAP 12,000
63 85 7/22/99 Fee Simple NAP 19,018
64 71 5/13/99 Fee Simple NAP 72,250
65 100 4/30/99 Fee Simple Hard 18,552
66 97 6/10/99 Fee Simple NAP 23,604
- ----------------------------------------------------------------------------------------------------------------
67 91 4/1/99 Fee Simple NAP 47,800
68 88 7/21/99 Fee Simple Springing 18,564
69 78 6/30/99 Fee Simple NAP 65,769
70 93 12/31/98 Fee Simple NAP 57,600
71 91 4/30/99 Fee Simple NAP 39,520
- ----------------------------------------------------------------------------------------------------------------
72 100 4/15/99 Fee Simple NAP 12,274
73 96 5/12/99 Fee Simple NAP 6,663
74 99 4/9/99 Fee Simple Soft 31,156
- ----------------------------------------------------------------------------------------------------------------
75 Fee Simple NAP 96,946
75a 96 3/30/99
75b 87 3/30/99
75c 79 3/30/99
75d 84 3/30/99
75f 100 3/30/99
- ----------------------------------------------------------------------------------------------------------------
76 96 5/17/99 Fee Simple NAP 87,295
77 100 3/1/99 Fee Simple NAP 44,471
78 100 3/29/99 Fee Simple NAP 10,764
79 100 5/17/99 Fee Simple NAP 27,300
80 98 4/1/99 Fee Simple NAP 57,600
- ----------------------------------------------------------------------------------------------------------------
81 100 6/1/99 Fee Simple NAP 8,388
82 100 5/31/99 Fee Simple NAP 4,127
83 100 4/20/99 Fee Simple Springing 60,256
84 100 6/30/99 Fee Simple Hard 26,352
85 93 4/30/99 Fee Simple Springing 48,927
- ----------------------------------------------------------------------------------------------------------------
86 92 6/2/99 Fee Simple NAP 33,000
87 95 3/31/99 Fee Simple NAP 10,617
88 75 7/1/99 Fee Simple NAP 11,456
89 94 6/25/99 Fee Simple NAP 30,240
90 100 5/1/99 Fee Simple NAP 16,632
- ----------------------------------------------------------------------------------------------------------------
91 92 4/22/99 Fee Simple NAP 18,605
92 93 5/26/99 Fee Simple NAP 39,504
93 98 3/18/99 Fee Simple NAP 11,022
94 95 5/20/99 Fee Simple NAP 7,668
95 90 4/30/99 Fee Simple NAP 16,150
- ----------------------------------------------------------------------------------------------------------------
96 100 4/21/99 Fee Simple NAP 8,172
97 100 5/1/99 Fee Simple NAP 28,721
98 96 5/3/99 Fee Simple NAP 4,305
99 100 7/22/99 Leasehold Hard 3,672
100 100 4/1/99 Fee Simple NAP 437
- ----------------------------------------------------------------------------------------------------------------
101 100 6/14/99 Fee Simple Hard 0
102 92 4/30/99 Fee Simple Hard 7,527
103 98 4/27/99 Fee Simple Springing 27,000
104 100 7/12/99 Fee Simple NAP 3,857
105 98 3/31/99 Fee Simple NAP 25,446
- ----------------------------------------------------------------------------------------------------------------
106 99 5/13/99 Fee Simple NAP 41,000
107 100 5/18/99 Fee Simple NAP 5,358
108 98 3/1/99 Fee Simple NAP 6,840
109 87 5/1/99 Fee Simple NAP 4,812
110 100 4/9/99 Fee Simple NAP 0
- ----------------------------------------------------------------------------------------------------------------
111 100 7/31/99 Fee Simple NAP 3,756
112 100 3/11/99 Fee Simple NAP 19,505
113 100 4/1/99 Fee Simple NAP 26,200
114 98 3/31/99 Fee Simple NAP 0
115 96 5/31/99 Fee Simple NAP 1,125
- ----------------------------------------------------------------------------------------------------------------
116 97 3/1/99 Fee Simple NAP 5,870
117 96 5/7/99 Fee Simple Springing 74,304
118 98 7/31/99 Fee Simple NAP 14,964
119 Fee Simple Springing 6,764
119a 100 1/1/99
119b 96 4/21/99
- ----------------------------------------------------------------------------------------------------------------
120 66 6/30/99 Fee Simple Hard 88,372
121 89 4/6/99 Fee Simple Springing 11,250
122 100 6/1/99 Fee Simple NAP 1,650
123 99 3/22/99 Fee Simple NAP 0
124 85 3/31/99 Leasehold Springing 3,615
125 100 6/24/99 Fee Simple NAP 23,112
- ----------------------------------------------------------------------------------------------------------------
126 100 4/1/99 Fee Simple NAP 1,656
127 100 5/3/99 Fee Simple NAP 9,619
128 100 3/1/99 Fee Simple Hard 0
129 91 5/13/99 Fee Simple Springing 0
130 100 3/23/99 Leasehold NAP 4,473
- ----------------------------------------------------------------------------------------------------------------
131 100 3/31/99 Fee Simple Springing 4,671
132 100 7/1/99 Fee Simple NAP 27,500
133 100 5/3/99 Fee Simple NAP 8,088
134 100 5/13/99 Fee Simple NAP 8,424
135 100 4/20/99 Fee Simple NAP 974
- ----------------------------------------------------------------------------------------------------------------
136 94 3/24/99 Fee Simple Hard 10,800
137 100 6/1/99 Fee Simple Soft 2,250
138 100 5/1/99 Fee Simple NAP 0
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
LARGEST
ANNUAL LARGEST TENANT
CONTROL REQUIRED TENANT LEASE
NUMBER TI/LC LARGEST TENANT SQ FT EXPIRATION
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1 0 Saks Fifth Avenue 90,114 10/31/17
2 740,892 Linens N' Things 27,175 9/30/05
- -----------------------------------------------------------------------------------------------------
3 0
3a
3b
3c
3d
3e
3f
3g
3h
3I
3j
3k
3l
3m
3n
3o
3p
3q
3r
- -----------------------------------------------------------------------------------------------------
4 274,205 AMC Theaters 47,883 11/19/06
5 350,571 Comerica Bank 43,213 1/31/03
6 10,500 Anthem INC 185,409 12/31/18
7 120,000 US Life 85,615 12/31/06
- -----------------------------------------------------------------------------------------------------
8 0
8a
8b
8c
8d
- -----------------------------------------------------------------------------------------------------
9 364,848 NLAC Regional Center 30,161 4/30/06
10 0
10a
10b
10c
- -----------------------------------------------------------------------------------------------------
11 50,004 Gersch Agency 8,094 6/30/02
12 0 HomePlace 53,000 5/31/12
13 0
- -----------------------------------------------------------------------------------------------------
14 0
14a
14b
14c
- -----------------------------------------------------------------------------------------------------
15 0
15a Sweet Paper Distribution 302,700 5/31/20
15b Sweet Paper Co. 185,000 5/31/20
15c Sweet Paper Sales Corp. 89,826 5/31/20
15d Sweet Paper Sales Corporation 90,000 5/31/20
15e Sweet Paper Sales Corporation 72,000 5/31/20
- -----------------------------------------------------------------------------------------------------
16 0
17 0 Tom Thumb 63,280 8/15/18
18 0
19 0 TBC Corporation 586,942 11/30/09
20 0 Air Touch Cellular 105,225 12/31/06
- -----------------------------------------------------------------------------------------------------
21 0
22 0 InteSys Technologies, Inc. 243,370 2/1/19
23 0
23a Drug Systems, Inc (AMS) 13,953 11/30/01
23b Apria Healthcare 59,085 10/31/01
- -----------------------------------------------------------------------------------------------------
24 0
25 0 County of Los Angeles 57,096 MTM
26 0
27 75,960 Handyman Hardware 12,000 6/30/13
28 0 The Hartford 69,097 1/31/09
- -----------------------------------------------------------------------------------------------------
29 50,000 Albertson's 53,820 8/31/06
30 232,800 LA Unified School District 43,529 9/30/03
31 0
32 0
33 133,431 Kaiser 55,849 8/31/01
- -----------------------------------------------------------------------------------------------------
34 62,496 99 Ranch Market 34,624 4/1/08
35 0
35a
35b
36 77,000 St. Luke's/Unity Health 31,084 4/30/04
- -----------------------------------------------------------------------------------------------------
37 60,000 Assured Access 50,666 5/31/05
38 0
39 32,000 Blockbuster Video 6,540 MTM
40 143,750 Inchcape 67,246 9/30/01
41 22,200 Weltman, Weinberg & Associates 37,082 4/30/00
- -----------------------------------------------------------------------------------------------------
42 62,535 Memorial Service Life Insur. 28,663 6/30/02
43 104,173 Antwerp Sales Int'l 3,184 6/30/00
44 0 Houlihan Lokey & Howard, LLP 36,498 9/21/05
45 0
46 69,048 Internal Revenue Service 58,359 3/23/07
- -----------------------------------------------------------------------------------------------------
47 50,000 Preferred Freezer Services 106,200 6/30/19
48 0
49 0 ODW Logistics 744,800 3/31/11
50 0 K-Mart Corporation 86,479 11/30/13
51 200,004 Vartec 5,550 6/30/02
- -----------------------------------------------------------------------------------------------------
52 0 Winn-Dixie Texas, Inc. 61,834 2/4/18
53 24,000 Kern County Mental Health (Off 23,187 6/30/04
54 0
55 0 Safeway, Inc. 41,650 10/31/12
56 0
- -----------------------------------------------------------------------------------------------------
57 0
58 100,000 Barrios Technology, Inc. 11,551 3/31/05
59 15,396 Nevada Assoc. of Handicapped 13,200 5/31/03
60 0
- -----------------------------------------------------------------------------------------------------
61 0
61a
61b
61c
61d
61e
- -----------------------------------------------------------------------------------------------------
62 0
63 0 Minyard Food Stores 70,674 9/30/17
64 0
65 0 Sears Roebuck & Company 185,504 1/14/09
66 0 Regulus West LLC 15,592 2/28/02
- -----------------------------------------------------------------------------------------------------
67 0
68 0 Meredith, Cohen 6,732 12/31/99
69 48,750 Denim & Diamonds 30,000 12/31/03
70 0
71 0
- -----------------------------------------------------------------------------------------------------
72 36,000 Long Island Savings 12,318 5/31/01
73 5,004 Office Depot 30,138 6/23/11
74 28,980 Acme Supermarket 70,850 10/31/17
- -----------------------------------------------------------------------------------------------------
75 0
75a
75b
75c
75d
75f
- -----------------------------------------------------------------------------------------------------
76 0
77 56,250 Summit Auto Sales 91,577 4/30/02
78 3,000 Thrifty Payless (Rite Aid) 17,880 5/31/09
79 53,988 San Gabriel/Pomona Valley 45,000 2/28/09
80 0
- -----------------------------------------------------------------------------------------------------
81 44,400 Comps.com, Inc. 41,015 1/31/04
82 5,100 R. A. B. Motors 16,894 6/30/20
83 0
84 0 APCOA/Standard Parking, Inc. 263,500 5/31/11
85 0 Rose's 52,551 2/28/01
- -----------------------------------------------------------------------------------------------------
86 0
87 0 McAmis Occupational Clinic 10,981 2/28/05
88 0 Radio One 21,546 12/31/11
89 0
90 33,000 Michael's Crafts 30,120 2/28/09
- -----------------------------------------------------------------------------------------------------
91 50,040 Weiner's 25,200 10/31/01
92 0
93 33,899 Childrens Hospital Thrift Shop 8,800 7/9/03
94 29,344 Outback Steakhouse 7,060 9/1/05
95 0
- -----------------------------------------------------------------------------------------------------
96 12,000 Bizu (Lombardi's) 5,370 12/31/08
97 36,000 MICLA - I 21,700 2/28/03
98 32,004 Huntington Reproductive Center 3,337 4/30/04
99 20,004 Capital Title Group, Inc. 24,444 12/31/12
100 20,000 Malmquist, Fields, O'Flaherty 9,051 9/30/03
- -----------------------------------------------------------------------------------------------------
101 40,000 Scott Company of California 87,285 8/1/19
102 12,000 Opti-Fashion 33,590 12/31/10
103 0
104 0 Oliver Russell 9,034 12/31/13
105 0
- -----------------------------------------------------------------------------------------------------
106 0
107 3,081 Food Lion 29,000 1/26/19
108 38,388 Maryland National Mortgage 11,780 8/31/03
109 0
110 0
- -----------------------------------------------------------------------------------------------------
111 0 Orion Financial 7,425 7/31/03
112 0
113 0
114 0
115 0 Women's Total Fitness 10,013 5/1/05
- -----------------------------------------------------------------------------------------------------
116 7,400 Places in the Heart 7,412 5/30/04
117 0
118 0
119 24,000
119a Tri State News 5,600 6/14/01
119b Pictura, Inc. 24,092 4/30/02
- -----------------------------------------------------------------------------------------------------
120 0
121 36,000 Randall Leather Mach. Corp. 18,750 6/30/00
122 11,112 Men's Wearhouse 5,500 3/31/09
123 0
124 20,784 Holualoa Management Corporatio 1,933 4/30/01
125 0
- -----------------------------------------------------------------------------------------------------
126 32,000 D. Seprazadeh/A. Khalioun 9,200 3/31/01
127 18,000 Copyright Printing 40,500 12/31/01
128 0 CVS 12,608 3/31/16
129 0 Norwest Mortgage 3,248 1/31/02
130 40,488 E3 Group 8,675 12/31/00
- -----------------------------------------------------------------------------------------------------
131 0 Safelite Glass Corporation 10,400 1/31/02
132 0
133 10,200 Bentley's Display 10,000 3/31/01
134 6,480 Everready Thermometer 20,000 12/31/04
135 8,400 Wahid Wafa & Rahmat Adel 2,700 7/31/01
- -----------------------------------------------------------------------------------------------------
136 0
137 8,799 Cato's 4,200 5/1/03
138 0
</TABLE>
<PAGE>
AGGREGATE POOL
DISTRIBUTION OF CUT-OFF DATE PRINCIPAL BALANCES
<TABLE>
<CAPTION>
PERCENTAGE
OF
AGGREGATE MINIMUM MAXIMUM AVERAGE
CUT-OFF DATE NUMBER OF CUT-OFF CUT-OFF CUT-OFF CUT-OFF CUT-OFF
BALANCE MORTGAGE DATE DATE DATE DATE DATE
DISTRIBUTION LOANS BALANCE BALANCE BALANCE BALANCE BALANCE
- ---------------------------- ----------- ----------------- ------------ -------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
$ 500,000 - $ 999,999 1 $ 869,571 0.08% $ 869,571 $ 869,571 $ 869,571
1,000,000 - 1,999,999 22 34,738,063 3.01 1,050,000 1,996,785 1,579,003
2,000,000 - 2,999,999 14 33,314,489 2.89 2,025,000 2,767,438 2,379,606
3,000,000 - 3,999,999 19 64,620,609 5.61 3,000,000 3,959,525 3,401,085
4,000,000 - 4,999,999 18 83,289,540 7.23 4,035,894 4,996,841 4,627,197
5,000,000 - 5,999,999 6 33,962,696 2.95 5,200,000 5,940,000 5,660,449
6,000,000 - 6,999,999 11 70,365,264 6.10 6,000,000 6,993,350 6,396,842
7,000,000 - 7,999,999 9 66,392,462 5.76 7,000,000 7,791,623 7,376,940
8,000,000 - 8,999,999 3 25,738,108 2.23 8,100,000 8,850,000 8,579,369
9,000,000 - 9,999,999 4 37,395,415 3.24 9,237,180 9,445,587 9,348,854
10,000,000 - 11,999,999 7 75,209,227 6.52 10,000,000 11,861,014 10,744,175
12,000,000 - 13,999,999 4 51,414,379 4.46 12,250,000 13,600,000 12,853,595
14,000,000 - 16,999,999 5 74,715,521 6.48 14,000,000 15,961,012 14,943,104
17,000,000 - 19,999,999 2 35,381,949 3.07 17,420,000 17,961,949 17,690,974
20,000,000 - 24,999,999 4 89,086,612 7.73 20,181,152 24,905,460 22,271,653
25,000,000 - 49,999,999 7 233,272,473 20.24 26,000,000 46,550,800 33,324,639
50,000,000 - 80,000,000 2 142,873,660 12.40 62,873,660 80,000,000 71,436,830
-- -------------- ------
Total/Avg./Wtd. Avg./
Min/Max: 138 $1,152,640,035 100.00% $ 869,571 $80,000,000 $ 8,352,464
=== ============== ======
<CAPTION>
WEIGHTED WEIGHTED
MINIMUM MAXIMUM AVERAGE AVERAGE WEIGHTED
DEBT DEBT DEBT WEIGHTED REMAINING MINIMUM MAXIMUM AVERAGE
CUT-OFF DATE SERVICE SERVICE SERVICE AVERAGE TERM TO CUT-OFF CUT-OFF CUT-OFF
BALANCE COVERAGE COVERAGE COVERAGE MORTGAGE MATURITY DATE DATE DATE
DISTRIBUTION RATIO RATIO RATIO RATE (MOS) LTV LTV LTV
- ---------------------------- ---------- ---------- ---------- ---------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 500,000 - $ 999,999 1.21x 1.21x 1.21x 8.260% 119.0 79.05% 79.05% 79.05%
1,000,000 - 1,999,999 1.01 1.90 1.41 7.853 120.2 43.11 83.12 68.37
2,000,000 - 2,999,999 1.21 1.53 1.30 7.909 123.2 54.47 80.22 73.91
3,000,000 - 3,999,999 1.20 2.17 1.36 8.074 118.1 58.33 80.43 70.27
4,000,000 - 4,999,999 1.15 1.82 1.37 7.719 116.5 45.18 80.09 70.35
5,000,000 - 5,999,999 1.20 1.34 1.25 7.984 119.2 70.00 80.00 76.76
6,000,000 - 6,999,999 1.19 1.78 1.34 8.028 120.3 54.92 79.95 70.72
7,000,000 - 7,999,999 1.20 1.62 1.33 8.033 117.3 43.31 78.30 66.38
8,000,000 - 8,999,999 1.20 1.68 1.38 8.068 119.3 57.45 72.72 65.99
9,000,000 - 9,999,999 1.19 1.63 1.41 7.831 131.4 58.61 81.03 71.75
10,000,000 - 11,999,999 1.23 1.90 1.44 7.950 110.9 52.28 78.24 68.33
12,000,000 - 13,999,999 1.20 1.60 1.34 7.992 133.8 58.10 80.00 69.05
14,000,000 - 16,999,999 1.20 1.69 1.38 8.152 114.9 53.49 79.39 69.76
17,000,000 - 19,999,999 1.22 1.25 1.23 7.808 117.5 71.39 73.67 72.55
20,000,000 - 24,999,999 1.19 1.39 1.29 7.556 115.7 46.00 86.48 70.41
25,000,000 - 49,999,999 1.23 1.90 1.42 7.987 116.9 49.55 74.47 66.74
50,000,000 - 80,000,000 1.36 1.43 1.40 7.647 118.1 60.38 72.77 65.83
Total/Avg./Wtd. Avg./
Min/Max: 1.01x 2.17x 1.37x 7.896% 118.3 43.11% 86.48% 68.88%
</TABLE>
A-11
<PAGE>
LOAN GROUP 1
DISTRIBUTION OF CUT-OFF DATE PRINCIPAL BALANCES
<TABLE>
<CAPTION>
PERCENTAGE
OF
AGGREGATE MINIMUM MAXIMUM AVERAGE
CUT-OFF DATE NUMBER OF CUT-OFF CUT-OFF CUT-OFF CUT-OFF CUT-OFF
BALANCE MORTGAGE DATE DATE DATE DATE DATE
DISTRIBUTION LOANS BALANCE BALANCE BALANCE BALANCE BALANCE
- ---------------------------- ----------- -------------- ------------ ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
$ 1,000,000 - $ 1,999,999 17 $ 26,896,426 3.01% $ 1,050,000 $ 1,996,785 $ 1,582,143
2,000,000 - 2,999,999 7 16,954,448 1.90 2,025,000 2,767,438 2,422,064
3,000,000 - 3,999,999 15 50,091,909 5.61 3,000,000 3,900,000 3,339,461
4,000,000 - 4,999,999 12 55,251,851 6.19 4,035,894 4,996,841 4,604,321
5,000,000 - 5,999,999 2 11,540,000 1.29 5,600,000 5,940,000 5,770,000
6,000,000 - 6,999,999 9 57,340,198 6.42 6,000,000 6,975,135 6,371,133
7,000,000 - 7,999,999 8 59,046,187 6.61 7,000,000 7,791,623 7,380,773
8,000,000 - 8,999,999 3 25,738,108 2.88 8,100,000 8,850,000 8,579,369
9,000,000 - 9,999,999 2 18,712,648 2.10 9,300,000 9,412,648 9,356,324
10,000,000 - 11,999,999 7 75,209,227 8.43 10,000,000 11,861,014 10,744,175
12,000,000 - 13,999,999 2 25,564,379 2.86 12,434,379 13,130,000 12,782,189
14,000,000 - 16,999,999 4 59,711,012 6.69 14,000,000 15,961,012 14,927,753
17,000,000 - 19,999,999 1 17,420,000 1.95 17,420,000 17,420,000 17,420,000
20,000,000 - 24,999,999 2 44,000,000 4.93 21,000,000 23,000,000 22,000,000
25,000,000 - 49,999,999 6 206,328,661 23.11 26,000,000 46,550,800 34,388,110
50,000,000 - 80,000,000 2 142,873,660 16.01 62,873,660 80,000,000 71,436,830
-- ------------ ------
Total/Avg./Wtd. Avg./
Min/Max: 99 $892,678,711 100.00% $ 1,050,000 $80,000,000 $ 9,016,957
== ============ ======
<CAPTION>
WEIGHTED WEIGHTED
MINIMUM MAXIMUM AVERAGE AVERAGE WEIGHTED
DEBT DEBT DEBT WEIGHTED REMAINING MINIMUM MAXIMUM AVERAGE
CUT-OFF DATE SERVICE SERVICE SERVICE AVERAGE TERM TO CUT-OFF CUT-OFF CUT-OFF
BALANCE COVERAGE COVERAGE COVERAGE MORTGAGE MATURITY DATE DATE DATE
DISTRIBUTION RATIO RATIO RATIO RATE (MOS) LTV LTV LTV
- ---------------------------- ---------- ---------- ---------- ---------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 1,000,000 - $ 1,999,999 1.01x 1.90x 1.43x 7.815% 120.8 43.11% 83.12% 67.12%
2,000,000 - 2,999,999 1.25 1.48 1.31 8.032 118.5 67.50 80.22 74.04
3,000,000 - 3,999,999 1.20 2.17 1.37 8.155 118.7 58.33 74.57 67.67
4,000,000 - 4,999,999 1.15 1.82 1.33 7.885 117.7 45.18 80.09 69.10
5,000,000 - 5,999,999 1.25 1.34 1.29 7.998 120.0 70.00 78.16 74.20
6,000,000 - 6,999,999 1.19 1.78 1.38 8.070 120.6 54.92 79.95 70.58
7,000,000 - 7,999,999 1.20 1.62 1.34 8.016 117.1 43.31 78.30 65.50
8,000,000 - 8,999,999 1.20 1.68 1.38 8.068 119.3 57.45 72.72 65.99
9,000,000 - 9,999,999 1.35 1.63 1.49 7.885 144.3 58.61 70.24 64.46
10,000,000 - 11,999,999 1.23 1.90 1.44 7.950 110.9 52.28 78.24 68.33
12,000,000 - 13,999,999 1.32 1.60 1.46 8.104 119.0 58.10 64.62 61.27
14,000,000 - 16,999,999 1.20 1.69 1.40 8.240 119.2 53.49 77.78 67.34
17,000,000 - 19,999,999 1.25 1.25 1.25 8.260 118.0 71.39 71.39 71.39
20,000,000 - 24,999,999 1.27 1.39 1.33 7.952 119.5 46.00 72.00 58.41
25,000,000 - 49,999,999 1.23 1.90 1.43 8.059 116.8 49.55 74.47 66.04
50,000,000 - 80,000,000 1.36 1.43 1.40 7.647 118.1 60.38 72.77 65.83
Total/Avg./Wtd. Avg./
Min/Max: 1.01x 2.17x 1.39x 7.976% 118.2 43.11% 83.12% 66.67%
</TABLE>
A-12
<PAGE>
LOAN GROUP 2
DISTRIBUTION OF CUT-OFF DATE PRINCIPAL BALANCES
<TABLE>
<CAPTION>
PERCENTAGE
OF
AGGREGATE MINIMUM MAXIMUM AVERAGE
CUT-OFF DATE NUMBER OF CUT-OFF CUT-OFF CUT-OFF CUT-OFF CUT-OFF
BALANCE MORTGAGE DATE DATE DATE DATE DATE
DISTRIBUTION LOANS BALANCE BALANCE BALANCE BALANCE BALANCE
- ---------------------------- ----------- --------------- ------------ -------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
$ 500,000 - $ 999,999 1 $ 869,571 0.33% $ 869,571 $ 869,571 $ 869,571
1,000,000 - 1,999,999 5 7,841,636 3.02 1,090,010 1,960,000 1,568,327
2,000,000 - 2,999,999 7 16,360,041 6.29 2,047,235 2,746,460 2,337,149
3,000,000 - 3,999,999 4 14,528,700 5.59 3,345,594 3,959,525 3,632,175
4,000,000 - 4,999,999 6 28,037,689 10.79 4,059,000 4,989,311 4,672,948
5,000,000 - 5,999,999 4 22,422,696 8.63 5,200,000 5,800,000 5,605,674
6,000,000 - 6,999,999 2 13,025,066 5.01 6,031,716 6,993,350 6,512,533
7,000,000 - 7,999,999 1 7,346,276 2.83 7,346,276 7,346,276 7,346,276
9,000,000 - 9,999,999 2 18,682,768 7.19 9,237,180 9,445,587 9,341,384
12,000,000 - 13,999,999 2 25,850,000 9.94 12,250,000 13,600,000 12,925,000
14,000,000 - 16,999,999 1 15,004,509 5.77 15,004,509 15,004,509 15,004,509
17,000,000 - 19,999,999 1 17,961,949 6.91 17,961,949 17,961,949 17,961,949
20,000,000 - 24,999,999 2 45,086,612 17.34 20,181,152 24,905,460 22,543,306
25,000,000 - 49,999,999 1 26,943,812 10.36 26,943,812 26,943,812 26,943,812
- ------------ ------
Total/Avg./Wtd. Avg./
Min/Max: 39 $259,961,324 100.00% $ 869,571 $26,943,812 $ 6,665,675
== ============ ======
<CAPTION>
WEIGHTED WEIGHTED
MINIMUM MAXIMUM AVERAGE AVERAGE WEIGHTED
DEBT DEBT DEBT WEIGHTED REMAINING MINIMUM MAXIMUM AVERAGE
CUT-OFF DATE SERVICE SERVICE SERVICE AVERAGE TERM TO CUT-OFF CUT-OFF CUT-OFF
BALANCE COVERAGE COVERAGE COVERAGE MORTGAGE MATURITY DATE DATE DATE
DISTRIBUTION RATIO RATIO RATIO RATE (MOS) LTV LTV LTV
- ---------------------------- ---------- ---------- ---------- ---------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 500,000 - $ 999,999 1.21x 1.21x 1.21x 8.260% 119.0 79.05% 79.05% 79.05%
1,000,000 - 1,999,999 1.25 1.42 1.33 7.983 118.2 69.10 74.22 72.66
2,000,000 - 2,999,999 1.21 1.53 1.29 7.782 128.2 54.47 79.96 73.77
3,000,000 - 3,999,999 1.21 1.42 1.31 7.793 116.0 77.09 80.43 79.24
4,000,000 - 4,999,999 1.24 1.77 1.44 7.391 114.2 59.99 79.83 72.82
5,000,000 - 5,999,999 1.20 1.29 1.23 7.977 118.7 74.90 80.00 78.07
6,000,000 - 6,999,999 1.20 1.20 1.20 7.845 119.0 64.96 76.85 71.34
7,000,000 - 7,999,999 1.20 1.20 1.20 8.170 119.0 73.46 73.46 73.46
9,000,000 - 9,999,999 1.19 1.45 1.32 7.776 118.5 77.11 81.03 79.05
12,000,000 - 13,999,999 1.20 1.25 1.22 7.880 148.4 73.13 80.00 76.74
14,000,000 - 16,999,999 1.28 1.28 1.28 7.800 98.0 79.39 79.39 79.39
17,000,000 - 19,999,999 1.22 1.22 1.22 7.370 117.0 73.67 73.67 73.67
20,000,000 - 24,999,999 1.19 1.32 1.25 7.170 111.9 76.73 86.48 82.12
25,000,000 - 49,999,999 1.34 1.34 1.34 7.440 117.0 72.07 72.07 72.07
Total/Avg./Wtd. Avg./
Min/Max: 1.19x 1.77x 1.29x 7.619% 119.0 54.47% 86.48% 76.46%
</TABLE>
A-13
<PAGE>
AGGREGATE POOL
DISTRIBUTION OF PROPERTY TYPES
<TABLE>
<CAPTION>
PERCENTAGE
OF
AGGREGATE MINIMUM MAXIMUM AVERAGE
NUMBER OF CUT-OFF CUT-OFF CUT-OFF CUT-OFF CUT-OFF
MORTGAGED DATE DATE DATE DATE DATE
PROPERTY TYPE PROPERTIES BALANCE BALANCE BALANCE BALANCE BALANCE
- ---------------------- ------------ ----------------- ------------ ------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Retail
Anchored 17 $ 289,774,494 25.14% $2,486,795 $80,000,000 $17,045,558
Unanchored 17 61,051,298 5.30 1,050,000 10,910,814 3,591,253
-- -------------- ------
Retail Subtotal 34 $ 350,825,792 30.44% $1,050,000 $80,000,000 $10,318,406
Office 36 $ 322,205,615 27.95% $1,438,376 $33,660,567 $ 8,950,156
Multifamily 55 259,961,324 22.55 234,605 20,181,152 4,726,570
Hospitality 25 105,918,234 9.19 1,558,687 15,961,012 4,236,729
Industrial 21 99,170,997 8.60 844,060 14,500,000 4,722,428
Mobile Home Park 2 4,358,934 0.38 1,987,572 2,371,363 2,179,467
Special Purpose 1 3,900,000 0.34 3,900,000 3,900,000 3,900,000
Self-Storage 1 3,243,231 0.28 3,243,231 3,243,231 3,243,231
Mixed Use 2 3,055,909 0.27 1,434,695 1,621,214 1,527,954
-- -------------- ------
Total/Avg./Wtd. Avg./
Min/Max: 177 $1,152,640,035 100.00% $ 234,605 $80,000,000 $ 6,512,091
=== ============== ======
<CAPTION>
WEIGHTED WEIGHTED
MINIMUM MAXIMUM AVERAGE AVERAGE WEIGHTED
DEBT DEBT DEBT WEIGHTED REMAINING MINIMUM MAXIMUM AVERAGE
SERVICE SERVICE SERVICE AVERAGE TERM TO CUT-OFF CUT-OFF CUT-OFF
COVERAGE COVERAGE COVERAGE MORTGAGE MATURITY DATE DATE DATE
PROPERTY TYPE RATIO RATIO RATIO RATE (MOS) LTV LTV LTV
- ---------------------- ---------- ---------- ---------- ---------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Retail
Anchored 1.22x 1.63x 1.36x 7.886% 122.1 58.33% 80.22% 68.74%
Unanchored 1.01 1.82 1.37 8.249 119.4 43.31 83.12 66.52
Retail Subtotal 1.01x 1.82x 1.36x 7.949% 121.6 43.31% 83.12% 68.36%
Office 1.19x 1.90x 1.33x 7.794% 115.9 45.18% 79.35% 67.87%
Multifamily 1.19 1.77 1.29 7.619 119.0 54.47 86.48 76.46
Hospitality 1.28 1.90 1.65 8.498 113.0 43.11 72.55 58.98
Industrial 1.15 1.78 1.42 8.128 118.8 53.49 78.16 64.96
Mobile Home Park 1.28 1.54 1.40 7.326 114.8 66.25 73.19 70.03
Special Purpose 1.26 1.26 1.26 8.460 120.0 67.24 67.24 67.24
Self-Storage 2.17 2.17 2.17 7.490 118.0 60.85 60.85 60.85
Mixed Use 1.40 1.45 1.42 8.118 117.1 66.73 71.26 69.13
Total/Avg./Wtd. Avg./
Min/Max: 1.01x 2.17x 1.37x 7.896% 118.3 43.11% 86.48% 68.88%
</TABLE>
A-14
<PAGE>
LOAN GROUP 1
DISTRIBUTION OF PROPERTY TYPES
<TABLE>
<CAPTION>
PERCENTAGE
OF
AGGREGATE MINIMUM MAXIMUM AVERAGE
NUMBER OF CUT-OFF CUT-OFF CUT-OFF CUT-OFF CUT-OFF
MORTGAGED DATE DATE DATE DATE DATE
PROPERTY TYPE PROPERTIES BALANCE BALANCE BALANCE BALANCE BALANCE
- ---------------------- ------------ --------------- ------------ ------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Retail
Anchored 17 $289,774,494 32.46% $2,486,795 $80,000,000 $17,045,558
Unanchored 17 61,051,298 6.84 1,050,000 10,910,814 3,591,253
-- ------------ ------
Retail Subtotal 34 $350,825,792 39.30% $1,050,000 $80,000,000 $10,318,406
Office 36 $322,205,615 36.09% $1,438,376 $33,660,567 $ 8,950,156
Hospitality 25 105,918,234 11.87 1,558,687 15,961,012 4,236,729
Industrial 21 99,170,997 11.11 844,060 14,500,000 4,722,428
Mobile Home Park 2 4,358,934 0.49 1,987,572 2,371,363 2,179,467
Special Purpose 1 3,900,000 0.44 3,900,000 3,900,000 3,900,000
Self-Storage 1 3,243,231 0.36 3,243,231 3,243,231 3,243,231
Mixed Use 2 3,055,909 0.34 1,434,695 1,621,214 1,527,954
-- ------------ ------
Total/Avg./Wtd. Avg./
Min/Max: 122 $892,678,711 100.00% $ 844,060 $80,000,000 $ 7,317,039
=== ============ ======
<CAPTION>
WEIGHTED WEIGHTED
MINIMUM MAXIMUM AVERAGE AVERAGE WEIGHTED
DEBT DEBT DEBT WEIGHTED REMAINING MINIMUM MAXIMUM AVERAGE
SERVICE SERVICE SERVICE AVERAGE TERM TO CUT-OFF CUT-OFF CUT-OFF
COVERAGE COVERAGE COVERAGE MORTGAGE MATURITY DATE DATE DATE
PROPERTY TYPE RATIO RATIO RATIO RATE (MOS) LTV LTV LTV
- ---------------------- ---------- ---------- ---------- ---------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Retail
Anchored 1.22x 1.63x 1.36x 7.886 122.1 58.33% 80.22% 68.74%
Unanchored 1.01 1.82 1.37 8.249 119.4 43.31 83.12 66.52
Retail Subtotal 1.01x 1.82x 1.36x 7.949 121.6 43.31% 83.12% 68.36%
Office 1.19x 1.90x 1.33x 7.794% 115.9 45.18% 79.35% 67.87%
Hospitality 1.28 1.90 1.65 8.498 113.0 43.11 72.55 58.98
Industrial 1.15 1.78 1.42 8.128 118.8 53.49 78.16 64.96
Mobile Home Park 1.28 1.54 1.40 7.326 114.8 66.25 73.19 70.03
Special Purpose 1.26 1.26 1.26 8.460 120.0 67.24 67.24 67.24
Self-Storage 2.17 2.17 2.17 7.490 118.0 60.85 60.85 60.85
Mixed Use 1.40 1.45 1.42 8.118 117.1 66.73 71.26 69.13
Total/Avg./Wtd. Avg./
Min/Max: 1.01x 2.17x 1.39x 7.976% 118.2 43.11% 83.12% 66.67%
</TABLE>
LOAN GROUP 2
DISTRIBUTION OF PROPERTY TYPES
<TABLE>
<CAPTION>
PERCENTAGE
OF
AGGREGATE MINIMUM MAXIMUM AVERAGE
NUMBER OF CUT-OFF CUT-OFF CUT-OFF CUT-OFF CUT-OFF
MORTGAGED DATE DATE DATE DATE DATE
PROPERTY TYPE PROPERTIES BALANCE BALANCE BALANCE BALANCE BALANCE
- ---------------------- ------------ --------------- ------------ ----------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Multifamily 55 $259,961,324 100.00% $234,605 $20,181,152 $4,726,570
-- ------------ ------
Total/Avg./Wtd. Avg./
Min/Max: 55 $259,961,324 100.00% $234,605 $20,181,152 $4,726,570
== ============ ======
<CAPTION>
WEIGHTED WEIGHTED
MINIMUM MAXIMUM AVERAGE AVERAGE WEIGHTED
DEBT DEBT DEBT WEIGHTED REMAINING MINIMUM MAXIMUM AVERAGE
SERVICE SERVICE SERVICE AVERAGE TERM TO CUT-OFF CUT-OFF CUT-OFF
COVERAGE COVERAGE COVERAGE MORTGAGE MATURITY DATE DATE DATE
PROPERTY TYPE RATIO RATIO RATIO RATE (MOS) LTV LTV LTV
- ---------------------- ---------- ---------- ---------- ---------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Multifamily 1.19x 1.77x 1.29x 7.619% 119.0 54.47% 86.48% 76.46%
Total/Avg./Wtd. Avg./
Min/Max: 1.19x 1.77x 1.29x 7.619% 119.0 54.47% 86.48% 76.46%
</TABLE>
A-15
<PAGE>
AGGREGATE POOL
RANGE OF DEBT SERVICE COVERAGE RATIOS
<TABLE>
<CAPTION>
PERCENTAGE
OF
AGGREGATE MINIMUM MAXIMUM AVERAGE
RANGE OF DEBT NUMBER OF CUT-OFF CUT-OFF CUT-OFF CUT-OFF
SERVICE COVERAGE MORTGAGE CUT-OFF DATE DATE DATE DATE DATE
RATIOS LOANS BALANCE BALANCE BALANCE BALANCE BALANCE
- ---------------------- ----------- ----------------- ------------ ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
1.00 - 1.10x (a) 1 $ 1,454,598 0.13% $1,454,598 $ 1,454,598 $ 1,454,598
1.11 - 1.20 15 130,347,430 11.31 3,130,000 24,905,460 8,689,829
1.21 - 1.30 56 391,961,968 34.01 869,571 42,649,122 6,999,321
1.31 - 1.40 25 258,758,664 22.45 1,090,010 62,873,660 10,350,347
1.41 - 1.50 23 222,628,851 19.31 1,364,420 80,000,000 9,679,515
1.51 - 1.60 6 28,404,063 2.46 1,243,296 13,130,000 4,734,010
1.61 - 1.70 5 40,538,382 3.52 1,247,607 14,500,000 8,107,676
1.71 - 1.80 2 11,034,135 0.96 4,059,000 6,975,135 5,517,067
1.81 - 1.90 4 64,268,714 5.58 1,918,385 46,550,800 16,067,178
2.11 - 2.20 1 3,243,231 0.28 3,243,231 3,243,231 3,243,231
-- -------------- ------
Total/Avg./Wtd. Avg./
Min/Max: 138 $1,152,640,035 100.00% $ 869,571 $80,000,000 $ 8,352,464
--- ============== ======
<CAPTION>
WEIGHTED WEIGHTED
MINIMUM MAXIMUM AVERAGE AVERAGE WEIGHTED
DEBT DEBT DEBT WEIGHTED REMAINING MINIMUM MAXIMUM AVERAGE
RANGE OF DEBT SERVICE SERVICE SERVICE AVERAGE TERM TO CUT-OFF CUT-OFF CUT-OFF
SERVICE COVERAGE COVERAGE COVERAGE COVERAGE MORTGAGE MATURITY DATE DATE DATE
RATIOS RATIO RATIO RATIO RATE (MOS) LTV LTV LTV
- ---------------------- ---------- ---------- ---------- ---------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1.00 - 1.10x (a) 1.01x 1.01x 1.01x 7.720% 199.0 83.12% 83.12% 83.12%
1.11 - 1.20 1.15 1.20 1.20 7.808 119.5 63.16 86.48 76.44
1.21 - 1.30 1.21 1.30 1.25 8.032 121.1 46.00 80.22 71.46
1.31 - 1.40 1.31 1.40 1.35 7.754 114.6 61.52 80.43 72.37
1.41 - 1.50 1.41 1.49 1.44 7.716 114.0 58.14 78.30 65.37
1.51 - 1.60 1.53 1.60 1.58 7.828 118.5 45.18 79.90 61.50
1.61 - 1.70 1.62 1.69 1.66 8.473 133.3 43.31 65.66 53.97
1.71 - 1.80 1.77 1.78 1.78 7.651 118.7 54.92 71.21 60.91
1.81 - 1.90 1.82 1.90 1.89 8.169 118.2 43.11 52.39 50.04
2.11 - 2.20 2.17 2.17 2.17 7.490 118.0 60.85 60.85 60.85
Total/Avg./Wtd. Avg./
Min/Max: 1.01x 2.17x 1.37x 7.896% 118.3 43.11% 86.48% 68.88%
</TABLE>
(a) Loan is a credit tenant lease loan.
LOAN GROUP 1
RANGE OF DEBT SERVICE COVERAGE RATIOS
<TABLE>
<CAPTION>
PERCENTAGE
OF
AGGREGATE MINIMUM MAXIMUM AVERAGE
RANGE OF DEBT NUMBER OF CUT-OFF CUT-OFF CUT-OFF CUT-OFF
SERVICE COVERAGE MORTGAGE CUT-OFF DATE DATE DATE DATE DATE
RATIOS LOANS BALANCE BALANCE BALANCE BALANCE BALANCE
- ---------------------- ----------- -------------- ------------ ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
1.00 - 1.10x (a) 1 $ 1,454,598 0.16% $1,454,598 $ 1,454,598 $ 1,454,598
1.11 - 1.20 8 56,433,448 6.32 3,130,000 14,000,000 7,054,181
1.21 - 1.30 38 298,449,634 33.43 1,050,000 42,649,122 7,853,938
1.31 - 1.40 19 201,519,166 22.57 1,438,376 62,873,660 10,606,272
1.41 - 1.50 18 198,443,691 22.23 1,364,420 80,000,000 11,024,649
1.51 - 1.60 4 21,352,713 2.39 1,243,296 13,130,000 5,338,178
1.61 - 1.70 5 40,538,382 4.54 1,247,607 14,500,000 8,107,676
1.71 - 1.80 1 6,975,135 0.78 6,975,135 6,975,135 6,975,135
1.81 - 1.90 4 64,268,714 7.20 1,918,385 46,550,800 16,067,178
2.11 - 2.20 1 3,243,231 0.36 3,243,231 3,243,231 3,243,231
-- ------------ ------
Total/Avg./Wtd. Avg./
Min/Max: 99 $892,678,711 100.00% $1,050,000 $80,000,000 $ 9,016,957
== ============ ======
<CAPTION>
WEIGHTED WEIGHTED
MINIMUM MAXIMUM AVERAGE AVERAGE WEIGHTED
DEBT DEBT DEBT WEIGHTED REMAINING MINIMUM MAXIMUM AVERAGE
RANGE OF DEBT SERVICE SERVICE SERVICE AVERAGE TERM TO CUT-OFF CUT-OFF CUT-OFF
SERVICE COVERAGE COVERAGE COVERAGE COVERAGE MORTGAGE MATURITY DATE DATE DATE
RATIOS RATIO RATIO RATIO RATE (MOS) LTV LTV LTV
- ---------------------- ---------- ---------- ---------- ---------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1.00 - 1.10x (a) 1.01x 1.01x 1.01x 7.720% 199.0 83.12% 83.12% 83.12%
1.11 - 1.20 1.15 1.20 1.19 8.035 119.5 63.16 77.78 71.59
1.21 - 1.30 1.21 1.30 1.26 8.094 120.0 46.00 80.22 70.04
1.31 - 1.40 1.31 1.40 1.35 7.879 115.6 61.52 79.95 71.69
1.41 - 1.50 1.41 1.49 1.44 7.752 114.0 58.14 78.30 64.57
1.51 - 1.60 1.54 1.60 1.59 7.879 118.6 45.18 69.07 56.48
1.61 - 1.70 1.62 1.69 1.66 8.473 133.3 43.31 65.66 53.97
1.71 - 1.80 1.78 1.78 1.78 7.570 118.0 54.92 54.92 54.92
1.81 - 1.90 1.82 1.90 1.89 8.169 118.2 43.11 52.39 50.04
2.11 - 2.20 2.17 2.17 2.17 7.490 118.0 60.85 60.85 60.85
Total/Avg./Wtd. Avg./
Min/Max: 1.01x 2.17x 1.39x 7.976% 118.2 43.11% 83.12% 66.67%
</TABLE>
(a) Loan is a credit tenant lease loan.
A-16
<PAGE>
LOAN GROUP 2
RANGE OF DEBT SERVICE COVERAGE RATIOS
<TABLE>
<CAPTION>
PERCENTAGE
OF
AGGREGATE MINIMUM MAXIMUM AVERAGE
RANGE OF DEBT NUMBER OF CUT-OFF CUT-OFF CUT-OFF CUT-OFF
SERVICE COVERAGE MORTGAGE CUT-OFF DATE DATE DATE DATE DATE
RATIOS LOANS BALANCE BALANCE BALANCE BALANCE BALANCE
- ---------------------- ----------- -------------- ------------ ------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
1.11 - 1.20 7 $ 73,913,982 28.43% $5,800,000 $24,905,460 $10,559,140
1.21 - 1.30 18 93,512,334 35.97 869,571 17,961,949 5,195,130
1.31 - 1.40 6 57,239,498 22.02 1,090,010 26,943,812 9,539,916
1.41 - 1.50 5 24,185,160 9.30 1,796,627 9,445,587 4,837,032
1.51 - 1.60 2 7,051,350 2.71 2,556,754 4,494,595 3,525,675
1.71 - 1.80 1 4,059,000 1.56 4,059,000 4,059,000 4,059,000
-- ------------ ------
Total/Avg./Wtd. Avg./
Min/Max: 39 $259,961,324 100.00% $ 869,571 $26,943,812 $ 6,665,675
== ============ ======
<CAPTION>
WEIGHTED WEIGHTED
MINIMUM MAXIMUM AVERAGE AVERAGE WEIGHTED
DEBT DEBT DEBT WEIGHTED REMAINING MINIMUM MAXIMUM AVERAGE
RANGE OF DEBT SERVICE SERVICE SERVICE AVERAGE TERM TO CUT-OFF CUT-OFF CUT-OFF
SERVICE COVERAGE COVERAGE COVERAGE COVERAGE MORTGAGE MATURITY DATE DATE DATE
RATIOS RATIO RATIO RATIO RATE (MOS) LTV LTV LTV
- ---------------------- ---------- ---------- ---------- ---------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1.11 - 1.20 1.19x 1.20x 1.20x 7.635% 119.5 64.96% 86.48% 80.14%
1.21 - 1.30 1.21 1.29 1.24 7.832 124.7 54.47 80.08 75.97
1.31 - 1.40 1.31 1.40 1.33 7.314 111.3 72.07 80.43 74.80
1.41 - 1.50 1.42 1.45 1.44 7.426 113.6 59.99 77.11 71.87
1.51 - 1.60 1.53 1.59 1.57 7.674 118.0 74.91 79.90 76.72
1.71 - 1.80 1.77 1.77 1.77 7.790 120.0 71.21 71.21 71.21
Total/Avg./Wtd. Avg./
Min/Max: 1.19x 1.77x 1.29x 7.619% 119.0 54.47% 86.48% 76.46%
</TABLE>
AGGREGATE POOL
RANGE OF MORTGAGE INTEREST RATES
<TABLE>
<CAPTION>
PERCENTAGE
OF
AGGREGATE MINIMUM MAXIMUM AVERAGE
NUMBER OF CUT-OFF CUT-OFF CUT-OFF CUT-OFF
RANGE OF MORTGAGE CUT-OFF DATE DATE DATE DATE DATE
MORTGAGE RATES LOANS BALANCE BALANCE BALANCE BALANCE BALANCE
- ---------------------- ----------- ----------------- ------------ ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
6.5001 - 6.7500 2 $ 6,657,054 0.58% $1,737,587 $ 4,919,467 $ 3,328,527
6.7501 - 7.0000 3 34,971,437 3.03 4,677,886 20,181,152 11,657,146
7.0001 - 7.2500 8 43,557,897 3.78 1,090,010 11,861,014 5,444,737
7.2501 - 7.5000 13 99,773,633 8.66 1,243,296 26,943,812 7,674,895
7.5001 - 7.7500 17 279,055,643 24.21 1,454,598 80,000,000 16,415,038
7.7501 - 8.0000 27 192,884,625 16.73 1,247,607 23,000,000 7,143,875
8.0001 - 8.2500 35 218,781,905 18.98 1,325,000 28,968,172 6,250,912
8.2501 - 8.5000 22 203,180,363 17.63 869,571 46,550,800 9,235,471
8.5001 - 8.7500 9 60,403,511 5.24 1,050,000 15,961,012 6,711,501
8.7501 - 9.0000 2 13,373,967 1.16 3,373,967 10,000,000 6,686,983
-- -------------- ------
Total/Avg./Wtd. Avg./
Min/Max: 138 $1,152,640,035 100.00% $ 869,571 $80,000,000 $ 8,352,464
=== ============== ======
<CAPTION>
WEIGHTED WEIGHTED
MINIMUM MAXIMUM AVERAGE AVERAGE WEIGHTED
DEBT DEBT DEBT WEIGHTED REMAINING MINIMUM MAXIMUM AVERAGE
SERVICE SERVICE SERVICE AVERAGE TERM TO CUT-OFF CUT-OFF CUT-OFF
RANGE OF COVERAGE COVERAGE COVERAGE MORTGAGE MATURITY DATE DATE DATE
MORTGAGE RATES RATIO RATIO RATIO RATE (MOS) LTV LTV LTV
- ---------------------- ---------- ---------- ---------- ---------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
6.5001 - 6.7500 1.45x 1.47x 1.46x 6.737% 108.0 59.99% 62.06% 60.53%
6.7501 - 7.0000 1.32 1.45 1.35 6.913 104.7 71.09 76.73 75.29
7.0001 - 7.2500 1.28 1.43 1.37 7.122 107.5 70.16 79.19 73.45
7.2501 - 7.5000 1.15 2.17 1.30 7.380 117.7 60.85 86.48 75.68
7.5001 - 7.7500 1.01 1.90 1.41 7.625 117.2 45.18 83.12 66.51
7.7501 - 8.0000 1.20 1.77 1.31 7.902 117.4 46.00 80.09 69.25
8.0001 - 8.2500 1.20 1.62 1.31 8.130 118.8 43.31 80.43 71.07
8.2501 - 8.5000 1.19 1.90 1.45 8.355 122.7 43.11 80.08 64.47
8.5001 - 8.7500 1.21 1.63 1.38 8.638 128.3 58.61 78.57 69.74
8.7501 - 9.0000 1.38 1.49 1.46 8.818 119.7 58.14 73.35 61.98
Total/Avg./Wtd. Avg./
Min/Max: 1.01x 2.17x 1.37x 7.896% 118.3 43.11% 86.48% 68.88%
</TABLE>
A-17
<PAGE>
LOAN GROUP 1
RANGE OF MORTGAGE INTEREST RATES
<TABLE>
<CAPTION>
PERCENTAGE
OF
AGGREGATE MINIMUM MAXIMUM AVERAGE
NUMBER OF CUT-OFF CUT-OFF CUT-OFF CUT-OFF
RANGE OF MORTGAGE CUT-OFF DATE DATE DATE DATE DATE
MORTGAGE RATES LOANS BALANCE BALANCE BALANCE BALANCE BALANCE
- ---------------------- ----------- -------------- ------------ ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
6.5001 - 6.7500 1 $ 1,737,587 0.19% $ 1,737,587 $ 1,737,587 $ 1,737,587
6.7501 - 7.0000 1 10,112,399 1.13 10,112,399 10,112,399 10,112,399
7.0001 - 7.2500 6 38,508,363 4.31 1,438,376 11,861,014 6,418,060
7.2501 - 7.5000 8 22,717,742 2.54 1,243,296 4,996,841 2,839,718
7.5001 - 7.7500 12 247,088,310 27.68 1,454,598 80,000,000 20,590,692
7.7501 - 8.0000 16 130,141,817 14.58 1,247,607 23,000,000 8,133,864
8.0001 - 8.2500 25 182,017,805 20.39 1,434,695 28,968,172 7,280,712
8.2501 - 8.5000 19 186,577,210 20.90 1,649,223 46,550,800 9,819,853
8.5001 - 8.7500 9 60,403,511 6.77 1,050,000 15,961,012 6,711,501
8.7501 - 9.0000 2 13,373,967 1.50 3,373,967 10,000,000 6,686,983
-- ------------ ------
Total/Avg./Wtd. Avg./
Min/Max: 99 $892,678,711 100.00% $ 1,050,000 $80,000,000 $ 9,016,957
== ============ ======
<CAPTION>
WEIGHTED WEIGHTED
MINIMUM MAXIMUM AVERAGE AVERAGE WEIGHTED
DEBT DEBT DEBT WEIGHTED REMAINING MINIMUM MAXIMUM AVERAGE
SERVICE SERVICE SERVICE AVERAGE TERM TO CUT-OFF CUT-OFF CUT-OFF
RANGE OF COVERAGE COVERAGE COVERAGE MORTGAGE MATURITY DATE DATE DATE
MORTGAGE RATES RATIO RATIO RATIO RATE (MOS) LTV LTV LTV
- ---------------------- ---------- ---------- ---------- ---------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
6.5001 - 6.7500 1.47x 1.47x 1.47x 6.700% 111.0 62.06% 62.06% 62.06%
6.7501 - 7.0000 1.36 1.36 1.36 6.840 110.0 74.36 74.36 74.36
7.0001 - 7.2500 1.28 1.43 1.38 7.129 107.3 70.16 77.01 72.88
7.2501 - 7.5000 1.15 2.17 1.47 7.386 116.9 60.85 73.75 68.96
7.5001 - 7.7500 1.01 1.90 1.42 7.627 116.9 45.18 83.12 64.82
7.7501 - 8.0000 1.20 1.66 1.31 7.930 119.2 46.00 80.09 66.08
8.0001 - 8.2500 1.20 1.62 1.33 8.134 117.8 43.31 80.22 70.15
8.2501 - 8.5000 1.19 1.90 1.47 8.362 119.0 43.11 76.77 63.55
8.5001 - 8.7500 1.21 1.63 1.38 8.638 128.3 58.61 78.57 69.74
8.7501 - 9.0000 1.38 1.49 1.46 8.818 119.7 58.14 73.35 61.98
Total/Avg./Wtd. Avg./
Min/Max: 1.01x 2.17x 1.39x 7.976% 118.2 43.11% 83.12% 66.67%
</TABLE>
LOAN GROUP 2
RANGE OF MORTGAGE INTEREST RATES
<TABLE>
<CAPTION>
PERCENTAGE
OF
AGGREGATE MINIMUM MAXIMUM AVERAGE
NUMBER OF CUT-OFF CUT-OFF CUT-OFF CUT-OFF
RANGE OF MORTGAGE CUT-OFF DATE DATE DATE DATE DATE
MORTGAGE RATES LOANS BALANCE BALANCE BALANCE BALANCE BALANCE
- ---------------------- ----------- -------------- ------------ ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
6.5001 - 6.7500 1 $ 4,919,467 1.89% $4,919,467 $ 4,919,467 $ 4,919,467
6.7501 - 7.0000 2 24,859,038 9.56 4,677,886 20,181,152 12,429,519
7.0001 - 7.2500 2 5,049,534 1.94 1,090,010 3,959,525 2,524,767
7.2501 - 7.5000 5 77,055,892 29.64 2,255,360 26,943,812 15,411,178
7.5001 - 7.7500 5 31,967,334 12.30 2,078,804 13,600,000 6,393,467
7.7501 - 8.0000 11 62,742,808 24.14 1,796,627 15,004,509 5,703,892
8.0001 - 8.2500 10 36,764,100 14.14 1,325,000 7,346,276 3,676,410
8.2501 - 8.5000 3 16,603,152 6.39 869,571 12,250,000 5,534,384
-- ------------ ------
Total/Avg./Wtd. Avg./
Min/Max: 39 $259,961,324 100.00% $ 869,571 $26,943,812 $ 6,665,675
== ============ ======
<CAPTION>
WEIGHTED WEIGHTED
MINIMUM MAXIMUM AVERAGE AVERAGE WEIGHTED
DEBT DEBT DEBT WEIGHTED REMAINING MINIMUM MAXIMUM AVERAGE
SERVICE SERVICE SERVICE AVERAGE TERM TO CUT-OFF CUT-OFF CUT-OFF
RANGE OF COVERAGE COVERAGE COVERAGE MORTGAGE MATURITY DATE DATE DATE
MORTGAGE RATES RATIO RATIO RATIO RATE (MOS) LTV LTV LTV
- ---------------------- ---------- ---------- ---------- ---------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
6.5001 - 6.7500 1.45x 1.45x 1.45x 6.750% 107.0 59.99% 59.99% 59.99%
6.7501 - 7.0000 1.32 1.45 1.34 6.943 102.6 71.09 76.73 75.67
7.0001 - 7.2500 1.32 1.35 1.33 7.070 108.9 72.67 79.19 77.78
7.2501 - 7.5000 1.19 1.34 1.26 7.379 118.0 72.07 86.48 77.66
7.5001 - 7.7500 1.19 1.59 1.28 7.607 118.9 74.91 81.03 79.57
7.7501 - 8.0000 1.20 1.77 1.32 7.843 113.6 64.96 79.72 75.81
8.0001 - 8.2500 1.20 1.40 1.24 8.106 123.9 54.47 80.43 75.63
8.2501 - 8.5000 1.21 1.25 1.24 8.275 164.0 73.13 80.08 74.90
Total/Avg./Wtd. Avg./
Min/Max: 1.19x 1.77x 1.29x 7.619% 119.0 54.47% 86.48% 76.46%
</TABLE>
A-18
<PAGE>
AGGREGATE POOL
DISTRIBUTION OF AMORTIZATION TYPES
<TABLE>
<CAPTION>
PERCENTAGE
OF
AGGREGATE MINIMUM MAXIMUM AVERAGE
NUMBER OF CUT-OFF CUT-OFF CUT-OFF CUT-OFF CUT-OFF
AMORTIZATION MORTGAGE DATE DATE DATE DATE DATE
TYPE LOANS BALANCE BALANCE BALANCE BALANCE BALANCE
- ---------------------- ----------- ----------------- ------------ ------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Balloon 109 $ 720,678,208 62.52% $ 869,571 $33,660,567 $ 6,611,727
Hyperamortizing 28 430,507,229 37.35 1,090,010 80,000,000 15,375,258
Fully Amortizing 1 1,454,598 0.13 1,454,598 1,454,598 1,454,598
--- -------------- ------
Total/Avg./Wtd. Avg./
Min/Max: 138 $1,152,640,035 100.00% $ 869,571 $80,000,000 $ 8,352,464
=== ============== ======
<CAPTION>
WEIGHTED WEIGHTED
MINIMUM MAXIMUM AVERAGE AVERAGE WEIGHTED
DEBT DEBT DEBT WEIGHTED REMAINING MINIMUM MAXIMUM AVERAGE
SERVICE SERVICE SERVICE AVERAGE TERM TO CUT-OFF CUT-OFF CUT-OFF
AMORTIZATION COVERAGE COVERAGE COVERAGE MORTGAGE MATURITY DATE DATE DATE
TYPE RATIO RATIO RATIO RATE (MOS) LTV LTV LTV
- ---------------------- ---------- ---------- ---------- ---------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balloon 1.15x 2.17x 1.34x 7.954% 120.6 43.31% 81.03% 69.18%
Hyperamortizing 1.19 1.90 1.41 7.800 114.3 43.11 86.48 68.32
Fully Amortizing 1.01 1.01 1.01 7.720 199.0 83.12 83.12 83.12
Total/Avg./Wtd. Avg./
Min/Max: 1.01x 2.17x 1.37x 7.896% 118.3 43.11% 86.48% 68.88%
</TABLE>
LOAN GROUP 1
DISTRIBUTION OF AMORTIZATION TYPES
<TABLE>
<CAPTION>
PERCENTAGE
OF
AGGREGATE MINIMUM MAXIMUM AVERAGE
NUMBER OF CUT-OFF CUT-OFF CUT-OFF CUT-OFF CUT-OFF
AMORTIZATION MORTGAGE DATE DATE DATE DATE DATE
TYPE LOANS BALANCE BALANCE BALANCE BALANCE BALANCE
- ---------------------- ----------- --------------- ------------ ------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Balloon 75 $525,857,539 58.91% $1,050,000 $33,660,567 $ 7,011,434
Hyperamortizing 23 365,366,574 40.93 1,364,420 80,000,000 15,885,503
Fully Amortizing 1 1,454,598 0.16 1,454,598 1,454,598 1,454,598
-- ------------ ------
Total/Avg./Wtd. Avg./
Min/Max: 99 $892,678,711 100.00% $1,050,000 $80,000,000 $ 9,016,957
== ============ ======
<CAPTION>
WEIGHTED WEIGHTED
MINIMUM MAXIMUM AVERAGE AVERAGE WEIGHTED
DEBT DEBT DEBT WEIGHTED REMAINING MINIMUM MAXIMUM AVERAGE
SERVICE SERVICE SERVICE AVERAGE TERM TO CUT-OFF CUT-OFF CUT-OFF
AMORTIZATION COVERAGE COVERAGE COVERAGE MORTGAGE MATURITY DATE DATE DATE
TYPE RATIO RATIO RATIO RATE (MOS) LTV LTV LTV
- ---------------------- ---------- ---------- ---------- ---------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balloon 1.15x 2.17x 1.36x 8.039% 120.0 43.31% 80.22% 67.06%
Hyperamortizing 1.23 1.9 1.44 7.887 115.3 43.11 77.01 66.04
Fully Amortizing 1.01 1.01 1.01 7.720 199.0 83.12 83.12 83.12
Total/Avg./Wtd. Avg./
Min/Max: 1.01x 2.17x 1.39x 7.976% 118.2 43.11% 83.12% 66.67%
</TABLE>
LOAN GROUP 2
DISTRIBUTION OF AMORTIZATION TYPES
<TABLE>
<CAPTION>
PERCENTAGE
OF
AGGREGATE MINIMUM MAXIMUM AVERAGE
NUMBER OF CUT-OFF CUT-OFF CUT-OFF CUT-OFF CUT-OFF
AMORTIZATION MORTGAGE DATE DATE DATE DATE DATE
TYPE LOANS BALANCE BALANCE BALANCE BALANCE BALANCE
- ---------------------- ----------- --------------- ------------ ------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Balloon 34 $194,820,669 74.94% $ 869,571 $26,943,812 $ 5,730,020
Hyperamortizing 5 65,140,655 25.06 1,090,010 24,905,460 13,028,131
-- ------------ ------
Total/Avg./Wtd. Avg./
Min/Max: 39 $259,961,324 100.00% $ 869,571 $26,943,812 $ 6,665,675
== ============ ======
<CAPTION>
WEIGHTED WEIGHTED
MINIMUM MAXIMUM AVERAGE AVERAGE WEIGHTED
DEBT DEBT DEBT WEIGHTED REMAINING MINIMUM MAXIMUM AVERAGE
SERVICE SERVICE SERVICE AVERAGE TERM TO CUT-OFF CUT-OFF CUT-OFF
AMORTIZATION COVERAGE COVERAGE COVERAGE MORTGAGE MATURITY DATE DATE DATE
TYPE RATIO RATIO RATIO RATE (MOS) LTV LTV LTV
- ---------------------- ---------- ---------- ---------- ---------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balloon 1.19x 1.77x 1.29x 7.724% 122.5 54.47% 81.03% 74.89%
Hyperamortizing 1.19 1.35 1.26 7.307 108.5 72.67 86.48 81.15
Total/Avg./Wtd. Avg./
Min/Max: 1.19x 1.77x 1.29x 7.619% 119.0 54.47% 86.48% 76.46%
</TABLE>
A-19
<PAGE>
AGGREGATE POOL
RANGE OF CURRENT LOAN-TO-VALUE RATIOS
<TABLE>
<CAPTION>
PERCENTAGE
OF
RANGE OF AGGREGATE MINIMUM MAXIMUM AVERAGE
CUT-OFF DATE NUMBER OF CUT-OFF CUT-OFF CUT-OFF CUT-OFF
LOAN-TO-VALUE MORTGAGE CUT-OFF DATE DATE DATE DATE DATE
RATIOS LOANS BALANCE BALANCE BALANCE BALANCE BALANCE
- ---------------------- ----------- ----------------- ------------ ------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
30.1 - 50.0 5 $ 83,851,804 7.27% $ 1,918,385 $46,550,800 $16,770,361
50.1 - 60.0 12 96,652,522 8.39 2,746,460 14,500,000 8,054,377
60.1 - 65.0 13 137,424,665 11.92 1,737,587 80,000,000 10,571,128
65.1 - 70.0 21 146,188,574 12.68 1,243,296 33,660,567 6,961,361
70.1 - 75.0 52 455,934,399 39.56 1,050,000 62,873,660 8,767,969
75.1 - 80.0 28 182,995,515 15.88 869,571 20,181,152 6,535,554
80.1 - 85.0 6 24,687,096 2.14 1,454,598 9,237,180 4,114,516
85.1 - 90.0 1 24,905,460 2.16 24,905,460 24,905,460 24,905,460
-- -------------- ------
Total/Avg./Wtd. Avg./
Min/Max: 138 $1,152,640,035 100.00% $ 869,571 $80,000,000 $ 8,352,464
=== ============== ======
<CAPTION>
WEIGHTED WEIGHTED
MINIMUM MAXIMUM AVERAGE AVERAGE WEIGHTED
RANGE OF DEBT DEBT DEBT WEIGHTED REMAINING MINIMUM MAXIMUM AVERAGE
CUT-OFF DATE SERVICE SERVICE SERVICE AVERAGE TERM TO CUT-OFF CUT-OFF CUT-OFF
LOAN-TO-VALUE COVERAGE COVERAGE COVERAGE MORTGAGE MATURITY DATE DATE DATE
RATIOS RATIO RATIO RATIO RATE (MOS) LTV LTV LTV
- ---------------------- ---------- ---------- ---------- ---------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
30.1 - 50.0 1.27x 1.90x 1.68x 8.204% 118.9 43.11% 49.55% 47.62%
50.1 - 60.0 1.21 1.90 1.62 8.088 125.7 52.28 59.99 56.28
60.1 - 65.0 1.19 2.17 1.39 7.841 118.8 60.38 64.96 61.75
65.1 - 70.0 1.20 1.66 1.34 7.836 115.9 65.23 70.00 67.28
70.1 - 75.0 1.15 1.77 1.32 7.910 117.5 70.16 74.91 72.72
75.1 - 80.0 1.20 1.53 1.28 7.786 117.1 76.73 80.00 78.35
80.1 - 85.0 1.01 1.31 1.22 7.890 123.2 80.08 83.12 80.68
85.1 - 90.0 1.19 1.19 1.19 7.320 120.0 86.48 86.48 86.48
Total/Avg./Wtd. Avg./
Min/Max: 1.01x 2.17x 1.37x 7.896% 118.3 43.11% 86.48% 68.88%
</TABLE>
LOAN GROUP 1
RANGE OF CURRENT LOAN-TO-VALUE RATIOS
<TABLE>
<CAPTION>
PERCENTAGE
OF
RANGE OF AGGREGATE MINIMUM MAXIMUM AVERAGE
CUT-OFF DATE NUMBER OF CUT-OFF CUT-OFF CUT-OFF CUT-OFF
LOAN-TO-VALUE MORTGAGE CUT-OFF DATE DATE DATE DATE DATE
RATIOS LOANS BALANCE BALANCE BALANCE BALANCE BALANCE
- ---------------------- ----------- -------------- ------------ ------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
30.1 - 50.0 5 $ 83,851,804 9.39% $1,918,385 $46,550,800 $16,770,361
50.1 - 60.0 10 88,986,595 9.97 3,791,619 14,500,000 8,898,660
60.1 - 65.0 12 131,392,949 14.72 1,737,587 80,000,000 10,949,412
65.1 - 70.0 20 144,391,947 16.18 1,243,296 33,660,567 7,219,597
70.1 - 75.0 38 361,581,322 40.51 1,050,000 62,873,660 9,515,298
75.1 - 80.0 11 74,247,759 8.32 2,190,000 14,000,000 6,749,796
80.1 - 85.0 3 8,226,334 0.92 1,454,598 4,284,941 2,742,111
-- ------------ ------
Total/Avg./Wtd. Avg./
Min/Max: 99 $892,678,711 100.00% $1,050,000 $80,000,000 $ 9,016,957
== ============ ======
<CAPTION>
WEIGHTED WEIGHTED
MINIMUM MAXIMUM AVERAGE AVERAGE WEIGHTED
RANGE OF DEBT DEBT DEBT WEIGHTED REMAINING MINIMUM MAXIMUM AVERAGE
CUT-OFF DATE SERVICE SERVICE SERVICE AVERAGE TERM TO CUT-OFF CUT-OFF CUT-OFF
LOAN-TO-VALUE COVERAGE COVERAGE COVERAGE MORTGAGE MATURITY DATE DATE DATE
RATIOS RATIO RATIO RATIO RATE (MOS) LTV LTV LTV
- ---------------------- ---------- ---------- ---------- ---------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
30.1 - 50.0 1.27x 1.90x 1.68x 8.204% 118.9 43.11% 49.55% 47.62%
50.1 - 60.0 1.30 1.90 1.65 8.165 125.1 52.28 58.65 56.13
60.1 - 65.0 1.19 2.17 1.40 7.838 118.8 60.38 64.81 61.60
65.1 - 70.0 1.20 1.66 1.33 7.835 115.9 65.23 70.00 67.25
70.1 - 75.0 1.15 1.48 1.31 7.974 115.6 70.16 74.84 72.63
75.1 - 80.0 1.20 1.41 1.27 8.039 123.7 76.77 79.95 78.06
80.1 - 85.0 1.01 1.27 1.21 7.860 132.3 80.09 83.12 80.67
Total/Avg./Wtd. Avg./
Min/Max: 1.01x 2.17x 1.39x 7.976% 118.2 43.11% 83.12% 66.67%
</TABLE>
A-20
<PAGE>
LOAN GROUP 2
RANGE OF CURRENT LOAN-TO-VALUE RATIOS
<TABLE>
<CAPTION>
PERCENTAGE
OF
RANGE OF AGGREGATE MINIMUM MAXIMUM AVERAGE
CUT-OFF DATE NUMBER OF CUT-OFF CUT-OFF CUT-OFF CUT-OFF
LOAN-TO-VALUE MORTGAGE CUT-OFF DATE DATE DATE DATE DATE
RATIOS LOANS BALANCE BALANCE BALANCE BALANCE BALANCE
- ---------------------- ----------- -------------- ------------ ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
50.1 - 60.0 2 $ 7,665,927 2.95% $ 2,746,460 $ 4,919,467 $ 3,832,963
60.1 - 65.0 1 6,031,716 2.32 6,031,716 6,031,716 6,031,716
65.1 - 70.0 1 1,796,627 0.69 1,796,627 1,796,627 1,796,627
70.1 - 75.0 14 94,353,077 36.30 1,090,010 26,943,812 6,739,505
75.1 - 80.0 17 108,747,756 41.83 869,571 20,181,152 6,396,927
80.1 - 85.0 3 16,460,762 6.33 3,483,582 9,237,180 5,486,921
85.1 - 90.0 1 24,905,460 9.58 24,905,460 24,905,460 24,905,460
-- ------------ ------
Total/Avg./Wtd. Avg./
Min/Max: 39 $259,961,324 100.00% $ 869,571 $26,943,812 $ 6,665,675
== ============ ======
<CAPTION>
WEIGHTED WEIGHTED
MINIMUM MAXIMUM AVERAGE AVERAGE WEIGHTED
RANGE OF DEBT DEBT DEBT WEIGHTED REMAINING MINIMUM MAXIMUM AVERAGE
CUT-OFF DATE SERVICE SERVICE SERVICE AVERAGE TERM TO CUT-OFF CUT-OFF CUT-OFF
LOAN-TO-VALUE COVERAGE COVERAGE COVERAGE MORTGAGE MATURITY DATE DATE DATE
RATIOS RATIO RATIO RATIO RATE (MOS) LTV LTV LTV
- ---------------------- ---------- ---------- ---------- ---------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
50.1 - 60.0 1.21x 1.45x 1.36x 7.201% 132.4 54.47% 59.99% 58.01%
60.1 - 65.0 1.20 1.20 1.20 7.920 119.0 64.96 64.96 64.96
65.1 - 70.0 1.42 1.42 1.42 7.900 117.0 69.10 69.10 69.10
70.1 - 75.0 1.20 1.77 1.32 7.664 124.9 71.09 74.91 73.05
75.1 - 80.0 1.20 1.53 1.28 7.614 112.7 76.73 80.00 78.55
80.1 - 85.0 1.19 1.31 1.22 7.905 118.7 80.08 81.03 80.69
85.1 - 90.0 1.19 1.19 1.19 7.320 120.0 86.48 86.48 86.48
Total/Avg./Wtd. Avg./
Min/Max: 1.19x 1.77x 1.29x 7.619% 119.0 54.47% 86.48% 76.46%
</TABLE>
A-21
<PAGE>
AGGREGATE POOL
DISTRIBUTION OF MORTGAGED PROPERTIES BY STATE
<TABLE>
<CAPTION>
PERCENTAGE
OF
AGGREGATE MINIMUM MAXIMUM
NUMBER OF CUT-OFF CUT-OFF CUT-OFF
MORTGAGED CUT-OFF DATE DATE DATE DATE
PROPERTY STATE PROPERTIES BALANCE BALANCE BALANCE BALANCE
- ---------------------- ------------ ----------------- ------------ -------------- --------------
<S> <C> <C> <C> <C> <C>
California 33 $ 257,687,228 22.36% $ 869,571 $42,649,122
Texas 32 171,046,958 14.84 1,050,000 18,735,928
New York 12 135,840,193 11.79 629,197 62,873,660
Arizona 7 106,178,494 9.21 1,438,376 80,000,000
Indiana 5 68,668,711 5.96 1,918,385 28,968,172
Ohio 7 48,997,396 4.25 1,658,603 14,000,000
Florida 10 47,770,937 4.14 1,800,000 13,600,000
North Carolina 6 37,772,542 3.28 1,965,000 14,500,000
New Jersey 9 32,267,413 2.80 844,060 7,500,000
Mississippi 2 23,078,804 2.00 2,078,804 21,000,000
Missouri 4 20,640,232 1.79 1,808,477 8,850,000
Michigan 4 16,106,781 1.40 1,090,010 9,166,593
New Hampshire 1 15,961,012 1.38 15,961,012 15,961,012
Massachusetts 2 13,800,000 1.20 5,700,000 8,100,000
Oklahoma 3 13,296,180 1.15 3,889,339 5,347,841
Colorado 2 12,434,379 1.08 5,617,942 6,816,437
Virginia 4 12,391,129 1.08 1,996,785 3,900,000
Pennsylvania 3 12,344,296 1.07 3,418,416 4,966,356
Illinois 1 12,106,821 1.05 12,106,821 12,106,821
Tennessee 4 11,512,870 1.00 1,728,544 4,924,529
South Carolina 1 11,200,000 0.97 11,200,000 11,200,000
Maryland 3 9,778,118 0.85 1,454,598 4,823,519
Hawaii 2 7,837,587 0.68 1,737,587 6,100,000
Georgia 3 7,736,460 0.67 1,325,000 3,665,000
Wisconsin 1 6,088,038 0.53 6,088,038 6,088,038
Nevada 1 5,940,000 0.52 5,940,000 5,940,000
Oregon 1 5,290,545 0.46 5,290,545 5,290,545
Alabama 1 4,897,430 0.42 4,897,430 4,897,430
Nebraska 5 4,677,886 0.41 234,605 1,564,035
Connecticut 2 4,126,169 0.36 2,047,235 2,078,934
Kansas 2 3,996,634 0.35 1,793,490 2,203,145
Minnesota 1 3,247,265 0.28 3,247,265 3,247,265
Delaware 1 3,243,231 0.28 3,243,231 3,243,231
Idaho 1 2,655,000 0.23 2,655,000 2,655,000
West Virginia 1 2,023,296 0.18 2,023,296 2,023,296
-- -------------- ------
Total/Avg./Wtd. Avg./
Min/Max: 177 $1,152,640,035 100.00% $ 234,605 $80,000,000
=== ============== ======
<CAPTION>
WEIGHTED WEIGHTED
MINIMUM MAXIMUM AVERAGE AVERAGE WEIGHTED
AVERAGE DEBT DEBT DEBT WEIGHTED REMAINING MINIMUM MAXIMUM AVERAGE
CUT-OFF SERVICE SERVICE SERVICE AVERAGE TERM TO CUT-OFF CUT-OFF CUT-OFF
DATE COVERAGE COVERAGE COVERAGE MORTGAGE MATURITY DATE DATE DATE
PROPERTY STATE BALANCE RATIO RATIO RATIO RATE (MOS) LTV LTV LTV
- ---------------------- ------------- ---------- ---------- ---------- ---------- ----------- --------- --------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
California $ 7,808,704 1.15x 1.66x 1.34x 7.814% 117.0 45.18 80.09 68.51%
Texas 5,345,217 1.19 1.90 1.37 8.001 121.3 49.55 80.08 71.34
New York 11,320,016 1.27 1.62 1.34 7.847 117.9 43.31 80.43 67.05
Arizona 15,168,356 1.20 1.90 1.47 7.779 119.0 49.55 73.95 60.00
Indiana 13,733,742 1.23 1.90 1.29 7.698 109.0 43.11 79.39 75.32
Ohio 6,999,628 1.20 1.90 1.38 8.086 134.2 49.55 78.30 70.79
Florida 4,777,094 1.20 1.54 1.25 7.916 119.2 66.25 80.00 74.81
North Carolina 6,295,424 1.22 1.69 1.42 7.887 118.3 53.49 77.09 66.11
New Jersey 3,585,268 1.25 1.90 1.44 8.086 119.1 49.55 71.83 62.99
Mississippi 11,539,402 1.23 1.39 1.38 7.893 119.9 72.00 79.95 72.72
Missouri 5,160,058 1.20 1.90 1.30 7.944 119.7 49.55 79.90 70.15
Michigan 4,026,695 1.19 1.90 1.30 7.460 119.3 49.55 86.48 80.46
New Hampshire 15,961,012 1.28 1.28 1.28 8.529 117.0 72.55 72.55 72.55
Massachusetts 6,900,000 1.21 1.68 1.49 8.256 120.0 57.45 79.72 66.65
Oklahoma 4,432,060 1.19 1.77 1.37 7.700 118.6 71.21 81.03 78.03
Colorado 6,217,189 1.32 1.32 1.32 8.130 118.0 64.62 64.62 64.62
Virginia 3,097,782 1.26 1.90 1.51 8.078 118.7 49.55 67.24 59.88
Pennsylvania 4,114,765 1.26 1.32 1.29 7.614 115.5 62.15 79.19 70.75
Illinois 12,106,821 1.19 1.19 1.19 7.320 120.0 86.48 86.48 86.48
Tennessee 2,878,218 1.27 1.90 1.73 7.956 113.2 49.55 80.22 57.39
South Carolina 11,200,000 1.40 1.40 1.40 8.750 84.0 70.44 70.44 70.44
Maryland 3,259,373 1.01 1.42 1.31 8.089 130.8 64.81 83.12 71.61
Hawaii 3,918,794 1.36 1.47 1.38 7.836 118.0 62.06 79.95 75.98
Georgia 2,578,820 1.21 1.40 1.26 8.170 139.6 54.47 73.61 65.76
Wisconsin 6,088,038 1.45 1.45 1.45 8.250 81.0 70.79 70.79 70.79
Nevada 5,940,000 1.25 1.25 1.25 8.110 120.0 78.16 78.16 78.16
Oregon 5,290,545 1.90 1.90 1.90 8.370 119.0 49.55 49.55 49.55
Alabama 4,897,430 1.24 1.24 1.24 8.050 119.0 79.63 79.63 79.63
Nebraska 935,577 1.45 1.45 1.45 6.760 105.0 71.09 71.09 71.09
Connecticut 2,063,085 1.25 1.25 1.25 7.961 118.5 78.74 79.96 79.35
Kansas 1,998,317 1.90 1.90 1.90 8.370 119.0 49.55 49.55 49.55
Minnesota 3,247,265 1.90 1.90 1.90 8.370 119.0 49.55 49.55 49.55
Delaware 3,243,231 2.17 2.17 2.17 7.490 118.0 60.85 60.85 60.85
Idaho 2,655,000 1.32 1.32 1.32 7.810 120.0 72.34 72.34 72.34
West Virginia 2,023,296 1.90 1.90 1.90 8.370 119.0 49.55 49.55 49.55
Total/Avg./Wtd. Avg./
Min/Max: $ 6,512,091 1.01x 2.17x 1.37x 7.896% 118.3 43.11 86.48 68.88%
</TABLE>
A-22
<PAGE>
LOAN GROUP 1
DISTRIBUTION OF MORTGAGED PROPERTIES BY STATE
<TABLE>
<CAPTION>
PERCENTAGE
OF
AGGREGATE MINIMUM MAXIMUM AVERAGE
NUMBER OF CUT-OFF CUT-OFF CUT-OFF CUT-OFF
MORTGAGED CUT-OFF DATE DATE DATE DATE DATE
PROPERTY STATE PROPERTIES BALANCE BALANCE BALANCE BALANCE BALANCE
- ---------------------- ------------ -------------- ------------ ------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
California 29 $243,906,474 27.32% $ 1,167,500 $42,649,122 $ 8,410,568
New York 6 126,377,497 14.16 1,845,626 62,873,660 21,062,916
Texas 20 105,077,167 11.77 1,050,000 15,250,000 5,253,858
Arizona 6 103,923,134 11.64 1,438,376 80,000,000 17,320,522
Ohio 6 36,747,396 4.12 1,658,603 14,000,000 6,124,566
New Jersey 9 32,267,413 3.61 844,060 7,500,000 3,585,268
Indiana 2 30,886,557 3.46 1,918,385 28,968,172 15,443,279
Florida 7 21,977,587 2.46 1,800,000 7,500,000 3,139,655
Mississippi 1 21,000,000 2.35 21,000,000 21,000,000 21,000,000
Missouri 3 18,083,477 2.03 1,808,477 8,850,000 6,027,826
North Carolina 2 16,465,000 1.84 1,965,000 14,500,000 8,232,500
New Hampshire 1 15,961,012 1.79 15,961,012 15,961,012 15,961,012
Colorado 2 12,434,379 1.39 5,617,942 6,816,437 6,217,189
Virginia 4 12,391,129 1.39 1,996,785 3,900,000 3,097,782
Tennessee 4 11,512,870 1.29 1,728,544 4,924,529 2,878,218
South Carolina 1 11,200,000 1.25 11,200,000 11,200,000 11,200,000
Maryland 3 9,778,118 1.10 1,454,598 4,823,519 3,259,373
Pennsylvania 2 8,384,771 0.94 3,418,416 4,966,356 4,192,386
Massachusetts 1 8,100,000 0.91 8,100,000 8,100,000 8,100,000
Hawaii 2 7,837,587 0.88 1,737,587 6,100,000 3,918,794
Wisconsin 1 6,088,038 0.68 6,088,038 6,088,038 6,088,038
Nevada 1 5,940,000 0.67 5,940,000 5,940,000 5,940,000
Oregon 1 5,290,545 0.59 5,290,545 5,290,545 5,290,545
Kansas 2 3,996,634 0.45 1,793,490 2,203,145 1,998,317
Georgia 1 3,665,000 0.41 3,665,000 3,665,000 3,665,000
Minnesota 1 3,247,265 0.36 3,247,265 3,247,265 3,247,265
Delaware 1 3,243,231 0.36 3,243,231 3,243,231 3,243,231
Idaho 1 2,655,000 0.30 2,655,000 2,655,000 2,655,000
Michigan 1 2,218,132 0.25 2,218,132 2,218,132 2,218,132
West Virginia 1 2,023,296 0.23 2,023,296 2,023,296 2,023,296
-- ------------ ------
Total/Avg./Wtd. Avg./
Min/Max: 122 $892,678,711 100.00% $ 844,060 $80,000,000 $ 7,317,039
=== ============ ======
<CAPTION>
WEIGHTED WEIGHTED
MINIMUM MAXIMUM AVERAGE AVERAGE WEIGHTED
DEBT DEBT DEBT WEIGHTED REMAINING MINIMUM MAXIMUM AVERAGE
SERVICE SERVICE SERVICE AVERAGE TERM TO CUT-OFF CUT-OFF CUT-OFF
COVERAGE COVERAGE COVERAGE MORTGAGE MATURITY DATE DATE DATE
PROPERTY STATE RATIO RATIO RATIO RATE (MOS) LTV LTV LTV
- ---------------------- ---------- ---------- ---------- ---------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
California 1.15x 1.66x 1.34x 7.830% 117.1 45.18% 80.09% 68.69%
New York 1.27 1.62 1.35 7.835 118.0 43.31 74.80 66.29
Texas 1.19 1.90 1.39 8.172 123.3 49.55 79.35 69.15
Arizona 1.20 1.90 1.47 7.785 119.0 49.55 70.16 59.69
Ohio 1.20 1.90 1.43 8.022 118.9 49.55 78.30 70.01
New Jersey 1.25 1.90 1.44 8.086 119.1 49.55 71.83 62.99
Indiana 1.23 1.90 1.27 8.107 118.1 43.11 74.47 72.52
Florida 1.25 1.54 1.29 8.176 118.7 66.25 72.00 70.28
Mississippi 1.39 1.39 1.39 7.910 120.0 72.00 72.00 72.00
Missouri 1.20 1.90 1.27 8.001 119.9 49.55 72.72 68.77
North Carolina 1.25 1.69 1.64 8.471 119.8 53.49 71.39 55.63
New Hampshire 1.28 1.28 1.28 8.529 117.0 72.55 72.55 72.55
Colorado 1.32 1.32 1.32 8.130 118.0 64.62 64.62 64.62
Virginia 1.26 1.90 1.51 8.078 118.7 49.55 67.24 59.88
Tennessee 1.27 1.90 1.73 7.956 113.2 49.55 80.22 57.39
South Carolina 1.40 1.40 1.40 8.750 84.0 70.44 70.44 70.44
Maryland 1.01 1.42 1.31 8.089 130.8 64.81 83.12 71.61
Pennsylvania 1.26 1.28 1.27 7.894 119.0 62.15 69.95 66.77
Massachusetts 1.68 1.68 1.68 8.500 120.0 57.45 57.45 57.45
Hawaii 1.36 1.47 1.38 7.836 118.0 62.06 79.95 75.98
Wisconsin 1.45 1.45 1.45 8.250 81.0 70.79 70.79 70.79
Nevada 1.25 1.25 1.25 8.110 120.0 78.16 78.16 78.16
Oregon 1.90 1.90 1.90 8.370 119.0 49.55 49.55 49.55
Kansas 1.90 1.90 1.90 8.370 119.0 49.55 49.55 49.55
Georgia 1.25 1.25 1.25 8.260 118.0 71.39 71.39 71.39
Minnesota 1.90 1.90 1.90 8.370 119.0 49.55 49.55 49.55
Delaware 2.17 2.17 2.17 7.490 118.0 60.85 60.85 60.85
Idaho 1.32 1.32 1.32 7.810 120.0 72.34 72.34 72.34
Michigan 1.90 1.90 1.90 8.370 119.0 49.55 49.55 49.55
West Virginia 1.90 1.90 1.90 8.370 119.0 49.55 49.55 49.55
Total/Avg./Wtd. Avg./
Min/Max: 1.01x 2.17x 1.39x 7.976% 118.2 43.11% 83.12% 66.67%
</TABLE>
A-23
<PAGE>
LOAN GROUP 2
DISTRIBUTION OF MORTGAGED PROPERTIES BY STATE
<TABLE>
<CAPTION>
PERCENTAGE
OF
AGGREGATE MINIMUM MAXIMUM AVERAGE
NUMBER OF CUT-OFF CUT-OFF CUT-OFF CUT-OFF
MORTGAGED CUT-OFF DATE DATE DATE DATE DATE
PROPERTY STATE PROPERTIES BALANCE BALANCE BALANCE BALANCE BALANCE
- ---------------------- ------------ -------------- ------------ ------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Texas 12 $ 65,969,790 25.38% $ 1,122,659 $18,735,928 $ 5,497,483
Indiana 3 37,782,154 14.53 2,596,494 20,181,152 12,594,051
Florida 3 25,793,350 9.92 5,200,000 13,600,000 8,597,783
North Carolina 4 21,307,542 8.20 3,345,594 7,509,092 5,326,886
Michigan 3 13,888,649 5.34 1,090,010 9,166,593 4,629,550
California 4 13,780,753 5.30 869,571 6,031,716 3,445,188
Oklahoma 3 13,296,180 5.11 3,889,339 5,347,841 4,432,060
Ohio 1 12,250,000 4.71 12,250,000 12,250,000 12,250,000
Illinois 1 12,106,821 4.66 12,106,821 12,106,821 12,106,821
New York 6 9,462,696 3.64 629,197 3,740,000 1,577,116
Massachusetts 1 5,700,000 2.19 5,700,000 5,700,000 5,700,000
Alabama 1 4,897,430 1.88 4,897,430 4,897,430 4,897,430
Nebraska 5 4,677,886 1.80 234,605 1,564,035 935,577
Connecticut 2 4,126,169 1.59 2,047,235 2,078,934 2,063,085
Georgia 2 4,071,460 1.57 1,325,000 2,746,460 2,035,730
Pennsylvania 1 3,959,525 1.52 3,959,525 3,959,525 3,959,525
Missouri 1 2,556,754 0.98 2,556,754 2,556,754 2,556,754
Arizona 1 2,255,360 0.87 2,255,360 2,255,360 2,255,360
Mississippi 1 2,078,804 0.80 2,078,804 2,078,804 2,078,804
-- ------------ ------
Total/Avg./Wtd. Avg./
Min/Max: 55 $259,961,324 100.00% $ 234,605 $20,181,152 $ 4,726,570
== ============ ======
<CAPTION>
WEIGHTED WEIGHTED
MINIMUM MAXIMUM AVERAGE AVERAGE WEIGHTED
DEBT DEBT DEBT WEIGHTED REMAINING MINIMUM MAXIMUM AVERAGE
SERVICE SERVICE SERVICE AVERAGE TERM TO CUT-OFF CUT-OFF CUT-OFF
COVERAGE COVERAGE COVERAGE MORTGAGE MATURITY DATE DATE DATE
PROPERTY STATE RATIO RATIO RATIO RATE (MOS) LTV LTV LTV
- ---------------------- ---------- ---------- ---------- ---------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Texas 1.20x 1.59x 1.33x 7.729% 118.0 69.10% 80.08% 74.82%
Indiana 1.25 1.32 1.30 7.364 101.5 74.19 79.39 77.61
Florida 1.20 1.24 1.21 7.693 119.7 76.85 80.00 78.66
North Carolina 1.22 1.42 1.25 7.436 117.2 73.67 77.09 74.21
Michigan 1.19 1.35 1.20 7.315 119.4 72.67 86.48 85.40
California 1.20 1.45 1.30 7.544 114.9 59.99 79.05 65.35
Oklahoma 1.19 1.77 1.37 7.700 118.6 71.21 81.03 78.03
Ohio 1.25 1.25 1.25 8.280 180.0 73.13 73.13 73.13
Illinois 1.19 1.19 1.19 7.320 120.0 86.48 86.48 86.48
New York 1.29 1.31 1.30 8.011 117.0 74.90 80.43 77.09
Massachusetts 1.21 1.21 1.21 7.910 120.0 79.72 79.72 79.72
Alabama 1.24 1.24 1.24 8.050 119.0 79.63 79.63 79.63
Nebraska 1.45 1.45 1.45 6.760 105.0 71.09 71.09 71.09
Connecticut 1.25 1.25 1.25 7.961 118.5 78.74 79.96 79.35
Georgia 1.21 1.40 1.27 8.088 159.1 54.47 73.61 60.70
Pennsylvania 1.32 1.32 1.32 7.020 108.0 79.19 79.19 79.19
Missouri 1.53 1.53 1.53 7.540 118.0 79.90 79.90 79.90
Arizona 1.27 1.27 1.27 7.500 117.0 73.95 73.95 73.95
Mississippi 1.23 1.23 1.23 7.720 119.0 79.95 79.95 79.95
Total/Avg./Wtd. Avg./
Min/Max: 1.19x 1.77x 1.29x 7.619% 119.0 54.47% 86.48% 76.46%
</TABLE>
A-24
<PAGE>
AGGREGATE POOL
PREPAYMENT PROVISIONS*
<TABLE>
<CAPTION>
PREPAYMENT RESTRICTIONS SEPT-99 SEPT-00 SEPT-01 SEPT-02 SEPT-03 SEPT-04 SEPT-05
- ---------------------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Locked out ................ 99.06% 99.05% 35.55% 11.33% 1.60% 0.00% 0.00%
Defeasance ................ 0.00 0.00 64.45 85.75 95.07 96.67 96.68
Yield Maintenance ......... 0.94 0.95 0.00 2.92 3.33 3.33 3.32
- ---------------------------- -------- -------- -------- -------- -------- -------- --------
Sub Total ................. 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
Open ...................... 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
- ---------------------------- -------- -------- -------- -------- -------- -------- --------
Total ..................... 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
UPB ($MM).................. 1,152.64 1,143.48 1,132.66 1,120.70 1,107.74 1,093.78 1,078.43
% of Initial UPB .......... 100.00% 99.21% 98.27% 97.23% 96.10% 94.89% 93.56%
</TABLE>
<TABLE>
<CAPTION>
PREPAYMENT RESTRICTIONS SEPT-06 SEPT-07 SEPT-08 SEPT-09 SEPT-10 SEPT-11
- ---------------------------- ------------- ------------- ------------- ------------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Locked out ................ 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Defeasance ................ 96.63 93.59 97.41 48.34 100.00 100.00
Yield Maintenance ......... 3.37 3.36 0.00 0.00 0.00 0.00
- ---------------------------- -------- -------- -------- -------- ------ ------
Sub Total ................. 100.00% 96.95% 97.41% 48.34% 100.00% 100.00%
Open ...................... 0.00% 3.05% 2.59% 51.66% 0.00% 0.00%
- ---------------------------- -------- -------- -------- -------- ------ ------
Total ..................... 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
UPB ($MM).................. 1,046.40 1,028.77 911.82 57.17 25.08 24.02
% of Initial UPB .......... 90.78% 89.25% 79.11% 4.96% 2.18% 2.08%
</TABLE>
*Assuming no prepayments and the maturity assumptions.
A-25
<PAGE>
LOAN GROUP 1
PREPAYMENT PROVISIONS*
<TABLE>
<CAPTION>
PREPAYMENT RESTRICTIONS SEPT-99 SEPT-00 SEPT-01 SEPT-02 SEPT-03 SEPT-04 SEPT-05
- ---------------------------- ----------- ----------- ----------- ----------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Locked out ................ 98.78% 98.77% 34.66% 8.12% 1.64% 0.00% 0.00%
Defeasance ................ 0.00 0.00 65.34 88.12 94.60 96.24 96.24
Yield Maintenance ......... 1.22 1.23 0.00 3.76 3.76 3.76 3.76
- ----------------------------- ------ ------ ------ ------ ------ ------ ------
Sub Total ................. 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
Open ...................... 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
- ----------------------------- ------ ------ ------ ------ ------ ------ ------
Total ..................... 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
UPB ($MM).................. 892.68 886.06 878.04 869.09 859.39 848.90 837.35
% of Initial UPB .......... 100.00% 99.26% 98.36% 97.36% 96.27% 95.10% 93.80%
</TABLE>
<TABLE>
<CAPTION>
PREPAYMENT RESTRICTIONS SEPT-06 SEPT-07 SEPT-08 SEPT-09 SEPT-10 SEPT-11
- ---------------------------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Locked out ................ 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Defeasance ................ 96.17 96.17 96.87 36.09 100.00 100.00
Yield Maintenance ......... 3.83 3.83 0.00 0.00 0.00 0.00
- ----------------------------- ------ ------ ------ ------ ------ ------
Sub Total ................. 100.00% 100.00% 96.87% 36.09% 100.00% 100.00%
Open ...................... 0.00% 0.00% 3.13% 63.91% 0.00% 0.00%
- ----------------------------- ------ ------ ------ ------ ------ ------
Total ..................... 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
UPB ($MM).................. 809.41 796.21 726.15 46.21 14.74 14.35
% of Initial UPB .......... 90.67% 89.19% 81.34% 5.18% 1.65% 1.61%
</TABLE>
*Assuming no prepayments and the maturity assumptions.
A-26
<PAGE>
LOAN GROUP 2
PREPAYMENT PROVISIONS*
<TABLE>
<CAPTION>
PREPAYMENT RESTRICTIONS SEPT-99 SEPT-00 SEPT-01 SEPT-02 SEPT-03 SEPT-04 SEPT-05
- ---------------------------- ------------ ------------ ----------- ----------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Locked out ................ 100.00% 100.00% 38.63% 22.42% 1.47% 0.00% 0.00%
Defeasance ................ 0.00 0.00 61.37 77.58 96.69 98.18 98.20
Yield Maintenance ......... 0.00 0.00 0.00 0.00 1.84 1.82 1.80
- ----------------------------- ------ ------ ------ ------ ------ ------ ------
Sub Total ................. 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
Open ...................... 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
- ----------------------------- ------ ------ ------ ------ ------ ------ ------
Total ..................... 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
UPB ($MM).................. 259.96 257.42 254.62 251.61 248.35 244.88 241.08
% of Initial UPB .......... 100.00% 99.02% 97.95% 96.79% 95.53% 94.20% 92.74%
</TABLE>
<TABLE>
<CAPTION>
PREPAYMENT RESTRICTIONS SEPT-06 SEPT-07 SEPT-08 SEPT-09 SEPT-10 SEPT-11
- ---------------------------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Locked out ................ 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Defeasance ................ 98.22 84.74 99.52 100.00 100.00 100.00
Yield Maintenance ......... 1.78 1.76 0.00 0.00 0.00 0.00
- ----------------------------- ------ ------ ------ ------ ------ ------
Sub Total ................. 100.00% 86.50% 99.52% 100.00% 100.00% 100.00%
Open ...................... 0.00% 13.50% 0.48% 0.00% 0.00% 0.00%
- ----------------------------- ------ ------ ------ ------ ------ ------
Total ..................... 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
UPB ($MM).................. 236.98 232.56 185.67 10.96 10.34 9.66
% of Initial UPB .......... 91.16% 89.46% 71.42% 4.22% 3.98% 3.72%
</TABLE>
*Assuming no prepayments and the maturity assumptions.
A-27
<PAGE>
AGGREGATE POOL
DISTRIBUTION OF REMAINING AMORTIZATION TERMS
<TABLE>
<CAPTION>
PERCENTAGE
OF
RANGE OF AGGREGATE MINIMUM MAXIMUM AVERAGE
REMAINING NUMBER OF CUT-OFF CUT-OFF CUT-OFF CUT-OFF
AMORTIZATION MORTGAGE CUT-OFF DATE DATE DATE DATE DATE
TERMS (MOS.) LOANS BALANCE BALANCE BALANCE BALANCE BALANCE
- ---------------------- ----------- ----------------- ------------ -------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Interest Only 1 $ 10,875,000 0.94% $10,875,000 $10,875,000 $10,875,000
191 - 210 1 1,454,598 0.13 1,454,598 1,454,598 1,454,598
231 - 250 2 17,241,845 1.50 4,991,845 12,250,000 8,620,923
271 - 290 2 9,843,996 0.85 4,919,467 4,924,529 4,921,998
291 - 310 23 156,425,247 13.57 1,050,000 46,550,800 6,801,098
331 - 360 109 956,799,348 83.01 869,571 80,000,000 8,777,976
--- -------------- -----
Total/Avg./Wtd. Avg./
Min/Max: 138 $1,152,640,035 100% $ 869,571 $80,000,000 $ 8,352,464
=== ============== =====
<CAPTION>
WEIGHTED WEIGHTED
MINIMUM MAXIMUM AVERAGE AVERAGE WEIGHTED
RANGE OF DEBT DEBT DEBT WEIGHTED REMAINING MINIMUM MAXIMUM AVERAGE
REMAINING SERVICE SERVICE SERVICE AVERAGE TERM TO CUT-OFF CUT-OFF CUT-OFF
AMORTIZATION COVERAGE COVERAGE COVERAGE MORTGAGE MATURITY DATE DATE DATE
TERMS (MOS.) RATIO RATIO RATIO RATE (MOS.) LTV LTV LTV
- ---------------------- ---------- ---------- ---------- ---------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Interest Only 1.90x 1.90x 1.90x 7.540% 120.0 52.28% 52.28% 52.28%
191 - 210 1.01 1.01 1.01 7.720 199.0 83.12 83.12 83.12
231 - 250 1.25 1.58 1.35 8.098 162.3 45.18 73.13 65.04
271 - 290 1.45 1.82 1.64 7.168 106.5 52.39 59.99 56.19
291 - 310 1.20 2.17 1.56 8.336 114.6 43.11 76.85 61.79
331 - 360 1.15 1.78 1.33 7.832 118.2 43.31 86.48 70.40
Total/Avg./Wtd. Avg./
Min/Max: 1.01x 2.17x 1.37x 7.896% 118.3 43.11% 86.48% 68.88%
</TABLE>
LOAN GROUP 1
DISTRIBUTION OF REMAINING AMORTIZATION TERMS
<TABLE>
<CAPTION>
PERCENTAGE
OF
RANGE OF AGGREGATE MINIMUM MAXIMUM AVERAGE
REMAINING NUMBER OF CUT-OFF CUT-OFF CUT-OFF CUT-OFF
AMORTIZATION MORTGAGE CUT-OFF DATE DATE DATE DATE DATE
TERMS (MOS.) LOANS BALANCE BALANCE BALANCE BALANCE BALANCE
- ---------------------- ----------- -------------- ------------ -------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Interest Only 1 $ 10,875,000 1.22% $10,875,000 $10,875,000 $10,875,000
191 - 210 1 1,454,598 0.16 1,454,598 1,454,598 1,454,598
231 - 250 1 4,991,845 0.56 4,991,845 4,991,845 4,991,845
271 - 290 1 4,924,529 0.55 4,924,529 4,924,529 4,924,529
291 - 310 20 142,619,192 15.98 1,050,000 46,550,800 7,130,960
331 - 360 75 727,813,547 81.53 1,167,500 80,000,000 9,704,181
-- ------------ ------
Total/Avg./Wtd. Avg./
Min/Max: 99 $892,678,711 100.00% $ 1,050,000 $80,000,000 $ 9,016,957
== ============ ======
<CAPTION>
WEIGHTED WEIGHTED
MINIMUM MAXIMUM AVERAGE AVERAGE WEIGHTED
RANGE OF DEBT DEBT DEBT WEIGHTED REMAINING MINIMUM MAXIMUM AVERAGE
REMAINING SERVICE SERVICE SERVICE AVERAGE TERM TO CUT-OFF CUT-OFF CUT-OFF
AMORTIZATION COVERAGE COVERAGE COVERAGE MORTGAGE MATURITY DATE DATE DATE
TERMS (MOS.) RATIO RATIO RATIO RATE (MOS.) LTV LTV LTV
- ---------------------- ---------- ---------- ---------- ---------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Interest Only 1.90x 1.90x 1.90x 7.540% 120.0 52.28% 52.28% 52.28%
191 - 210 1.01 1.01 1.01 7.720 199.0 83.12 83.12 83.12
231 - 250 1.58 1.58 1.58 7.650 119.0 45.18 45.18 45.18
271 - 290 1.82 1.82 1.82 7.585 106.0 52.39 52.39 52.39
291 - 310 1.21 2.17 1.59 8.389 114.4 43.11 72.55 60.44
331 - 360 1.15 1.78 1.34 7.907 118.8 43.31 80.22 68.32
Total/Avg./Wtd. Avg./
Min/Max: 1.01x 2.17x 1.39x 7.976% 118.2 43.11% 83.12% 66.67%
</TABLE>
A-28
<PAGE>
LOAN GROUP 2
RANGE OF REMAINING AMORTIZATION TERMS
<TABLE>
<CAPTION>
PERCENTAGE
OF
RANGE OF AGGREGATE MINIMUM MAXIMUM AVERAGE
REMAINING NUMBER OF CUT-OFF CUT-OFF CUT-OFF CUT-OFF
AMORTIZATION MORTGAGE CUT-OFF DATE DATE DATE DATE DATE
TERMS (MOS.) LOANS BALANCE BALANCE BALANCE BALANCE BALANCE
- ---------------------- ----------- -------------- ------------ -------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
231 - 250 1 $ 12,250,000 4.71% $12,250,000 $12,250,000 $12,250,000
271 - 290 1 4,919,467 1.89 4,919,467 4,919,467 4,919,467
291 - 310 3 13,806,056 5.31 1,090,010 6,993,350 4,602,019
331 - 360 34 228,985,802 88.08 869,571 26,943,812 6,734,877
-- ------------ ------
Total/Avg./Wtd. Avg./
Min/Max: 39 $259,961,324 100.00% $ 869,571 $26,943,812 $ 6,665,675
== ============ ======
<CAPTION>
WEIGHTED WEIGHTED
MINIMUM MAXIMUM AVERAGE AVERAGE WEIGHTED
RANGE OF DEBT DEBT DEBT WEIGHTED REMAINING MINIMUM MAXIMUM AVERAGE
REMAINING SERVICE SERVICE SERVICE AVERAGE TERM TO CUT-OFF CUT-OFF CUT-OFF
AMORTIZATION COVERAGE COVERAGE COVERAGE MORTGAGE MATURITY DATE DATE DATE
TERMS (MOS.) RATIO RATIO RATIO RATE (MOS.) LTV LTV LTV
- ---------------------- ---------- ---------- ---------- ---------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
231 - 250 1.25x 1.25x 1.25x 8.280% 180.0 73.13% 73.13% 73.13%
271 - 290 1.45 1.45 1.45 6.750 107.0 59.99 59.99 59.99
291 - 310 1.20 1.35 1.25 7.788 116.8 72.67 76.85 75.71
331 - 360 1.19 1.77 1.29 7.593 116.1 54.47 86.48 77.04
Total/Avg./Wtd. Avg./
Min/Max: 1.19x 1.77x 1.29x 7.619% 119.0 54.47% 86.48% 76.46%
</TABLE>
AGGREGATE POOL
RANGE OF REMAINING TERM TO MATURITY
<TABLE>
<CAPTION>
PERCENTAGE
OF
AGGREGATE MINIMUM MAXIMUM AVERAGE
RANGE OF NUMBER OF CUT-OFF CUT-OFF CUT-OFF CUT-OFF
REMAINING TERMS MORTGAGE CUT-OFF DATE DATE DATE DATE DATE
TO MATURITY (MOS.) LOANS BALANCE BALANCE BALANCE BALANCE BALANCE
- ---------------------- ----------- ----------------- ------------ ------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
71 - 90 months 2 $ 17,288,038 1.50% $6,088,038 $11,200,000 $8,644,019
91 - 110 months 14 134,941,454 11.71 1,364,420 33,660,567 9,638,675
111 - 120 months 116 966,259,484 83.83 869,571 80,000,000 8,329,823
131 - 150 months 1 1,800,000 0.16 1,800,000 1,800,000 1,800,000
171 - 190 months 4 30,896,460 2.68 2,746,460 12,250,000 7,724,115
191 - 210 months 1 1,454,598 0.13 1,454,598 1,454,598 1,454,598
--- -------------- ------
Total/Avg./Wtd. Avg./
Min/Max: 138 $1,152,640,035 100.00% $ 869,571 $80,000,000 $8,352,464
=== ============== ======
<CAPTION>
WEIGHTED WEIGHTED
MINIMUM MAXIMUM AVERAGE AVERAGE WEIGHTED
DEBT DEBT DEBT WEIGHTED REMAINING MINIMUM MAXIMUM AVERAGE
RANGE OF SERVICE SERVICE SERVICE AVERAGE TERM TO CUT-OFF CUT-OFF CUT-OFF
REMAINING TERMS COVERAGE COVERAGE COVERAGE MORTGAGE MATURITY DATE DATE DATE
TO MATURITY (MOS.) RATIO RATIO RATIO RATE (MOS.) LTV LTV LTV
- ---------------------- ---------- ---------- ---------- ---------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
71 - 90 months 1.40x 1.45x 1.42x 8.574% 82.9 70.44% 70.79% 70.56%
91 - 110 months 1.28 1.82 1.39 7.254 104.8 52.39 79.39 71.29
111 - 120 months 1.15 2.17 1.37 7.955 118.8 43.11 86.48 68.50
131 - 150 months 1.30 1.30 1.30 8.125 132.0 72.00 72.00 72.00
171 - 190 months 1.21 1.63 1.36 8.460 179.8 54.47 78.57 68.26
191 - 210 months 1.01 1.01 1.01 7.720 199.0 83.12 83.12 83.12
Total/Avg./Wtd. Avg./
Min/Max: 1.01x 2.17x 1.37x 7.896% 118.3 43.11% 86.48% 68.88%
</TABLE>
A-29
<PAGE>
LOAN GROUP 1
RANGE OF REMAINING TERMS TO MATURITY
<TABLE>
<CAPTION>
PERCENTAGE
OF
AGGREGATE MINIMUM MAXIMUM AVERAGE
RANGE OF NUMBER OF CUT-OFF CUT-OFF CUT-OFF CUT-OFF
REMAINING TERMS MORTGAGE CUT-OFF DATE DATE DATE DATE DATE
TO MATURITY (MOS.) LOANS BALANCE BALANCE BALANCE BALANCE BALANCE
- ---------------------- ----------- -------------- ------------ ------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
71 - 90 months 2 $ 17,288,038 1.94% $6,088,038 $11,200,000 $8,644,019
91 - 110 months 9 86,198,916 9.66 1,364,420 33,660,567 9,577,657
111 - 120 months 84 770,037,158 86.26 1,050,000 80,000,000 9,167,109
131 - 150 months 1 1,800,000 0.20 1,800,000 1,800,000 1,800,000
171 - 190 months 2 15,900,000 1.78 6,600,000 9,300,000 7,950,000
191 - 210 months 1 1,454,598 0.16 1,454,598 1,454,598 1,454,598
-- ------------ ------
Total/Avg./Wtd. Avg./
Min/Max: 99 $892,678,711 100.00% $1,050,000 $80,000,000 $9,016,957
== ============ ======
<CAPTION>
WEIGHTED WEIGHTED
MINIMUM MAXIMUM AVERAGE AVERAGE WEIGHTED
DEBT DEBT DEBT WEIGHTED REMAINING MINIMUM MAXIMUM AVERAGE
RANGE OF SERVICE SERVICE SERVICE AVERAGE TERM TO CUT-OFF CUT-OFF CUT-OFF
REMAINING TERMS COVERAGE COVERAGE COVERAGE MORTGAGE MATURITY DATE DATE DATE
TO MATURITY (MOS.) RATIO RATIO RATIO RATE (MOS.) LTV LTV LTV
- ---------------------- ---------- ---------- ---------- ---------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
71 - 90 months 1.40x 1.45x 1.42x 8.574% 82.9 70.44% 70.79% 70.56%
91 - 110 months 1.30 1.82 1.42 7.289 106.4 52.39 77.01 68.90
111 - 120 months 1.15 2.17 1.39 8.025 118.8 43.11 80.22 66.28
131 - 150 months 1.30 1.30 1.30 8.125 132.0 72.00 72.00 72.00
171 - 190 months 1.25 1.63 1.47 8.676 180.0 58.61 78.57 66.90
191 - 210 months 1.01 1.01 1.01 7.720 199.0 83.12 83.12 83.12
Total/Avg./Wtd. Avg./
Min/Max: 1.01x 2.17x 1.39x 7.976% 118.2 43.11% 83.12% 66.67%
</TABLE>
LOAN GROUP 2
RANGE OF REMAINING TERMS TO MATURITY
<TABLE>
<CAPTION>
PERCENTAGE
OF
AGGREGATE MINIMUM MAXIMUM AVERAGE
RANGE OF NUMBER OF CUT-OFF CUT-OFF CUT-OFF CUT-OFF
REMAINING TERMS MORTGAGE CUT-OFF DATE DATE DATE DATE DATE
TO MATURITY (MOS.) LOANS BALANCE BALANCE BALANCE BALANCE BALANCE
- ---------------------- ----------- -------------- ------------ ------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
91 - 110 months 5 $ 48,742,538 18.75% $3,959,525 $20,181,152 $9,748,508
111 - 120 months 32 196,222,326 75.48 869,571 26,943,812 6,131,948
171 - 190 months 2 14,996,460 5.77 2,746,460 12,250,000 7,498,230
-- ------------ ------
Total/Avg./Wtd. Avg./
Min/Max: 39 $259,961,324 100.00% $ 869,571 $26,943,812 $6,665,675
== ============ ======
<CAPTION>
WEIGHTED WEIGHTED
MINIMUM MAXIMUM AVERAGE AVERAGE WEIGHTED
DEBT DEBT DEBT WEIGHTED REMAINING MINIMUM MAXIMUM AVERAGE
RANGE OF SERVICE SERVICE SERVICE AVERAGE TERM TO CUT-OFF CUT-OFF CUT-OFF
REMAINING TERMS COVERAGE COVERAGE COVERAGE MORTGAGE MATURITY DATE DATE DATE
TO MATURITY (MOS.) RATIO RATIO RATIO RATE (MOS.) LTV LTV LTV
- ---------------------- ---------- ---------- ---------- ---------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
91 - 110 months 1.28x 1.45x 1.33x 7.193% 102.0 59.99% 79.39% 75.52%
111 - 120 months 1.19 1.77 1.28 7.678 118.5 64.96 86.48 77.21
171 - 190 months 1.21 1.25 1.24 8.231 179.6 54.47 73.13 69.71
Total/Avg./Wtd. Avg./
Min/Max: 1.19x 1.77x 1.29x 7.619% 119.0 54.47% 86.48% 76.46%
</TABLE>
A-30
<PAGE>
AGGREGATE POOL
RANGE OF ORIGINAL TERMS TO MATURITY
<TABLE>
<CAPTION>
PERCENTAGE
OF
AGGREGATE MINIMUM MAXIMUM AVERAGE
RANGE OF NUMBER OF CUT-OFF CUT-OFF CUT-OFF CUT-OFF
ORIGINAL TERMS MORTGAGE CUT-OFF DATE DATE DATE DATE DATE
TO MATURITY (MOS) LOANS BALANCE BALANCE BALANCE BALANCE BALANCE
- ---------------------- ----------- ---------------- ------------ ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
83 - 83 months 1 $ 6,088,038 0.53% $6,088,038 $ 6,088,038 $6,088,038
84 - 120 months 130 1,106,085,840 95.96 869,571 80,000,000 8,508,353
121 - 180 months 6 39,011,559 3.38 1,800,000 12,250,000 6,501,927
181 - 240 months 1 1,454,598 0.13 1,454,598 1,454,598 1,454,598
--- -------------- ------
Total/Avg./Wtd. Avg./
Min/Max: 138 $1,152,640,035 100.00% $ 869,571 $80,000,000 $8,352,464
=== ============== ======
<CAPTION>
WEIGHTED WEIGHTED
MINIMUM MAXIMUM AVERAGE AVERAGE WEIGHTED
DEBT DEBT DEBT WEIGHTED REMAINING MINIMUM MAXIMUM AVERAGE
RANGE OF SERVICE SERVICE SERVICE AVERAGE TERM TO CUT-OFF CUT-OFF CUT-OFF
ORIGINAL TERMS COVERAGE COVERAGE COVERAGE MORTGAGE MATURITY DATE DATE DATE
TO MATURITY (MOS) RATIO RATIO RATIO RATE (MOS) LTV LTV LTV
- ---------------------- ---------- ---------- ---------- ---------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
83 - 83 months 1.45x 1.45x 1.45x 8.250% 81.0 70.79% 70.79% 70.79%
84 - 120 months 1.15 2.17 1.37 7.882 116.8 43.11 86.48 68.82
121 - 180 months 1.21 1.63 1.35 8.236 165.5 54.47 78.57 69.85
181 - 240 months 1.01 1.01 1.01 7.720 199.0 83.12 83.12 83.12
Total/Avg./Wtd. Avg./
Min/Max: 1.01x 2.17x 1.37x 7.896% 118.3 43.11% 86.48% 68.88%
</TABLE>
LOAN GROUP 1
RANGE OF ORIGINAL TERMS TO MATURITY
<TABLE>
<CAPTION>
PERCENTAGE
OF
AGGREGATE MINIMUM MAXIMUM AVERAGE
RANGE OF NUMBER OF CUT-OFF CUT-OFF CUT-OFF CUT-OFF
ORIGINAL TERMS MORTGAGE CUT-OFF DATE DATE DATE DATE DATE
TO MATURITY (MOS) LOANS BALANCE BALANCE BALANCE BALANCE BALANCE
- ---------------------- ----------- -------------- ------------ ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
83 - 83 months 1 $ 6,088,038 0.68% $6,088,038 $ 6,088,038 $6,088,038
84 - 120 months 93 861,120,976 96.46 1,050,000 80,000,000 9,259,365
121 - 180 months 4 24,015,099 2.69 1,800,000 9,300,000 6,003,775
181 - 240 months 1 1,454,598 0.16 1,454,598 1,454,598 1,454,598
-- ------------ -----
Total/Avg./Wtd. Avg./
Min/Max: 99 $892,678,711 100% $1,050,000 $80,000,000 $9,016,957
== ============ =====
<CAPTION>
WEIGHTED WEIGHTED
MINIMUM MAXIMUM AVERAGE AVERAGE WEIGHTED
DEBT DEBT DEBT WEIGHTED REMAINING MINIMUM MAXIMUM AVERAGE
RANGE OF SERVICE SERVICE SERVICE AVERAGE TERM TO CUT-OFF CUT-OFF CUT-OFF
ORIGINAL TERMS COVERAGE COVERAGE COVERAGE MORTGAGE MATURITY DATE DATE DATE
TO MATURITY (MOS) RATIO RATIO RATIO RATE (MOS) LTV LTV LTV
- ---------------------- ---------- ---------- ---------- ---------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
83 - 83 months 1.45x 1.45x 1.45x 8.250% 81.0 70.79% 70.79% 70.79%
84 - 120 months 1.15 2.17 1.39 7.967 117.2 43.11 80.22 66.52
121 - 180 months 1.25 1.63 1.41 8.239 156.7 58.61 78.57 69.94
181 - 240 months 1.01 1.01 1.01 7.720 199.0 83.12 83.12 83.12
Total/Avg./Wtd. Avg./
Min/Max: 1.01x 2.17x 1.39x 7.976% 118.2 43.11% 83.12% 66.67%
</TABLE>
LOAN GROUP 2
RANGE OF ORIGINAL TERMS TO MATURITY
<TABLE>
<CAPTION>
PERCENTAGE
OF
AGGREGATE MINIMUM MAXIMUM AVERAGE
RANGE OF NUMBER OF CUT-OFF CUT-OFF CUT-OFF CUT-OFF
ORIGINAL TERMS MORTGAGE CUT-OFF DATE DATE DATE DATE DATE
TO MATURITY (MOS) LOANS BALANCE BALANCE BALANCE BALANCE BALANCE
- ---------------------- ----------- -------------- ------------ ------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
84 - 120 months 37 $244,964,864 94.23% $ 869,571 $26,943,812 $6,620,672
121 - 180 months 2 14,996,460 5.77 2,746,460 12,250,000 7,498,230
-- ------------ ------
Total/Avg./Wtd. Avg./
Min/Max: 39 $259,961,324 100.00% $ 869,571 $26,943,812 $6,665,675
== ============ ======
<CAPTION>
WEIGHTED WEIGHTED
MINIMUM MAXIMUM AVERAGE AVERAGE WEIGHTED
DEBT DEBT DEBT WEIGHTED REMAINING MINIMUM MAXIMUM AVERAGE
RANGE OF SERVICE SERVICE SERVICE AVERAGE TERM TO CUT-OFF CUT-OFF CUT-OFF
ORIGINAL TERMS COVERAGE COVERAGE COVERAGE MORTGAGE MATURITY DATE DATE DATE
TO MATURITY (MOS) RATIO RATIO RATIO RATE (MOS) LTV LTV LTV
- ---------------------- ---------- ---------- ---------- ---------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
84 - 120 months 1.19x 1.77x 1.29x 7.582% 115.2 59.99% 86.48% 76.88%
121 - 180 months 1.21 1.25 1.24 8.231 179.6 54.47 73.13 69.71
Total/Avg./Wtd. Avg./
Min/Max: 1.19x 1.77x 1.29x 7.619% 119.0 54.47% 86.48% 76.46%
</TABLE>
A-31
<PAGE>
ANNEX B
<TABLE>
<CAPTION>
[NORWEST BANKS LOGO] ------------------------------------------
GMAC COMMERCIAL MORTGAGE SECURITIES, INC. For Additional Information, please contact
NORWEST BANK MINNESOTA, N.A. MORTGAGE PASS-THROUGH CERTIFICATES Leslie Gaskill
CORPORATE TRUST SERVICES SERIES 1999-C3 (212) 515-5254
3 NEW YORK PLAZA, 15TH FLOOR Reports Available on the World Wide Web
NEW YORK, NY 10004 @ www.ctslink.com/cmbs
------------------------------------------
PAYMENT DATE: 09/15/1999
RECORD DATE: 08/31/1999
- ------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTION DATE STATEMENT
TABLE OF CONTENTS
=====================================================================
STATEMENT SECTIONS PAGE(S)
------------------ -------
<S> <C>
Certificate Distribution Detail 2
Certificate Factor Detail 3
Reconciliation Detail 4
Other Required Information 5
Ratings Detail 6
Current Mortgage Loan and Property Stratification Tables 7 - 9
Mortgage Loan Detail 10
Principal Prepayment Detail 11
Historical Detail 12
Delinquency Loan Detail 13
Specially Serviced Loan Detail 14 - 15
Modified Loan Detail 16
Liquidated Loan Detail 17
=====================================================================
UNDERWRITER UNDERWRITER MASTER SERVICER SPECIAL SERVICER
=============================== =============================== =============================== =================================
Deutsche Bank Securities Inc. Goldman, Sachs & Co. GMAC Commercial Mortgage Corp. GMAC Commercial Mortgage
31 West 52nd Street 85 Broad Street 650 Dresher Road 550 California Street, 12th Floor
New York, NY 10019 New York, New York 10004 Horsham, PA 10944-8015 San Francisco, CA 94104
Contact: Justin Kennedy Contact: Dan Sparks Contact: Gary Severyn Contact: Henry Bieber
Phone Number: (212) 469-5149 Phone Number: (212) 902-2914 Phone Number: (312) 499-5485 Phone Number: (415) 835-9268
=============================== =============================== =============================== =================================
This report has been compiled from information provided to Norwest by various third parties, which may include the
Servicer, Master Servicer, Special Servicer and others. Norwest has not independently confirmed the accuracy of
information received from these third parties and assumes no duty to do so. Norwest expressly disclaims any
responsibility for the accuracy or completeness of information furnished by third parties.
- ------------------------------------------------------------------------------------------------------------------------------------
Copyright 1997, Norwest Bank Minnesota, N.A.
</TABLE>
B-1
<PAGE>
<TABLE>
<CAPTION>
[NORWEST BANKS LOGO] ------------------------------------------
GMAC COMMERCIAL MORTGAGE SECURITIES, INC. For Additional Information, please contact
NORWEST BANK MINNESOTA, N.A. MORTGAGE PASS-THROUGH CERTIFICATES Leslie Gaskill
CORPORATE TRUST SERVICES SERIES 1999-C3 (212) 515-5254
3 NEW YORK PLAZA, 15TH FLOOR Reports Available on the World Wide Web
NEW YORK, NY 10004 @ www.ctslink.com/cmbs
------------------------------------------
PAYMENT DATE: 09/15/1999
RECORD DATE: 08/31/1999
- ------------------------------------------------------------------------------------------------------------------------------------
CERTIFICATE DISTRIBUTION DETAIL
====================================================================================================================================
Realized
Loss/
Additional
Pass- Trust Current
Through Original Beginning Principal Interest Prepayment Fund Total Ending Subordination
Class CUSIP Rate Balance Balance Distribution Distribution Penalties Expenses Distribution Balance Level (1)
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
A-1 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00%
A-2 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00%
B 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00%
C 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00%
D 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00%
E 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00%
F 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00%
G 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00%
H 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00%
J 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00%
K 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00%
L 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00%
M 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00%
N 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00%
R-I 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00%
R-II 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00%
R-III 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00%
====================================================================================================================================
Totals 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
====================================================================================================================================
===============================================================================================
Pass- Original Beginning Ending
Through Notional Notional Interest Prepayment Total Notional
Class CUSIP Rate Amount Amount Distribution Penalties Distribution Amount
===============================================================================================
X 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00
===============================================================================================
(1) Calculated by taking (A) the sum of the ending certificate balance of all classes less (B) the sum of (i) the ending certificate
balance of the designated class and (ii) the ending certificate balance of all classes which are not subordinate to the designated
class and dividing the result by (A).
- ------------------------------------------------------------------------------------------------------------------------------------
Copyright 1997, Norwest Bank Minnesota, N.A.
</TABLE>
B-2
<PAGE>
<TABLE>
<CAPTION>
[NORWEST BANKS LOGO] ------------------------------------------
GMAC COMMERCIAL MORTGAGE SECURITIES, INC. For Additional Information, please contact
NORWEST BANK MINNESOTA, N.A. MORTGAGE PASS-THROUGH CERTIFICATES Leslie Gaskill
CORPORATE TRUST SERVICES SERIES 1999-C3 (212) 515-5254
3 NEW YORK PLAZA, 15TH FLOOR Reports Available on the World Wide Web
NEW YORK, NY 10004 @ www.ctslink.com/cmbs
------------------------------------------
PAYMENT DATE: 09/15/1999
RECORD DATE: 08/31/1999
- ------------------------------------------------------------------------------------------------------------------------------------
CERTIFICATE FACTOR DETAIL
====================================================================================================================================
Realized Loss/
Beginning Principal Interest Prepayment Additional Trust Ending
Class CUSIP Balance Distribution Distribution Penalties Fund Expenses Balance
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C>
A-1 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000
A-2 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000
B 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000
C 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000
D 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000
E 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000
F 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000
G 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000
H 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000
J 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000
K 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000
L 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000
M 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000
N 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000
R-I 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000
R-II 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000
R-III 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000
====================================================================================================================================
==========================================================================================
Beginning Ending
Notional Interest Prepayment Notional
Class CUSIP Amount Distribution Penalties Amount
==========================================================================================
X 0.00000000 0.00000000 0.00000000 0.00000000
==========================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
Copyright 1997, Norwest Bank Minnesota, N.A.
</TABLE>
B-3
<PAGE>
<TABLE>
<CAPTION>
[NORWEST BANKS LOGO] ------------------------------------------
GMAC COMMERCIAL MORTGAGE SECURITIES, INC. For Additional Information, please contact
NORWEST BANK MINNESOTA, N.A. MORTGAGE PASS-THROUGH CERTIFICATES Leslie Gaskill
CORPORATE TRUST SERVICES SERIES 1999-C3 (212) 515-5254
3 NEW YORK PLAZA, 15TH FLOOR Reports Available on the World Wide Web
NEW YORK, NY 10004 @ www.ctslink.com/cmbs
------------------------------------------
PAYMENT DATE: 09/15/1999
RECORD DATE: 08/31/1999
- ------------------------------------------------------------------------------------------------------------------------------------
RECONCILIATION DETAIL
ADVANCE SUMMARY MASTER SERVICING FEE SUMMARY
<S> <C> <C> <C>
P&I Advances Outstanding 0.00 Current Period Accrued Master Servicing Fees 0.00
Servicing Advances Outstanding 0.00 Less Master Servicing Fees on Delinquent 0.00
Payments Less Reductions to Master Servicing Fees 0.00
Reimbursement for Interest on P&I 0.00 Plus Master Servicing Fees for Delinquent Payments Received 0.00
Advances paid from general collections Plus Adjustments for Prior Master Servicing Calculation 0.00
Total Master Servicing Fees Collected 0.00
Reimbursement for Interest on Servicing 0.00
Advances paid from general collections
CERTIFICATE INTEREST RECONCILIATION
====================================================================================================================================
Net
Aggregate Distributable Unpaid
Accrued Prepayment Distributable Certificate Additional Total Distributable
Certificate Interest Certificate Interest Trust Fund Interest Excess Interest Certificate
Class Interest Shortfall Interest Adjustment Expenses Distribution Interest Distribution Int.
====================================================================================================================================
A-1 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
A-2 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
X 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
B 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
C 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
D 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
E 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
F 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
G 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
H 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
J 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
K 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
L 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
M 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
N 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
====================================================================================================================================
Total 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
====================================================================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
Copyright 1997, Norwest Bank Minnesota, N.A.
</TABLE>
B-4
<PAGE>
<TABLE>
<CAPTION>
[NORWEST BANKS LOGO] ------------------------------------------
GMAC COMMERCIAL MORTGAGE SECURITIES, INC. For Additional Information, please contact
NORWEST BANK MINNESOTA, N.A. MORTGAGE PASS-THROUGH CERTIFICATES Leslie Gaskill
CORPORATE TRUST SERVICES SERIES 1999-C3 (212) 515-5254
3 NEW YORK PLAZA, 15TH FLOOR Reports Available on the World Wide Web
NEW YORK, NY 10004 @ www.ctslink.com/cmbs
------------------------------------------
PAYMENT DATE: 09/15/1999
RECORD DATE: 08/31/1999
- ------------------------------------------------------------------------------------------------------------------------------------
OTHER REQUIRED INFORMATION
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
|
Available Distribution Amount 0.00 | Appraisal Reduction
| ===============================================
Aggregate Number of Outstanding Loans 0 | Date
Aggregate Stated Principal Balance of Loans before Distributions 0.00 | Appraisal Appraisal
Aggregate Stated Principal Balance of Loans after Distributions 0.00 | Loan Reductions Reduction
Percentage of Cut-off Date Principal Balance after Distributions 0.0% | Number Effected Effected
| ===============================================
Aggregate Amount of Servicing Fee 0.00 |
Aggregate Amount of Special Servicing Fee 0.00 |
Aggregate Amount of Trustee Fee 0.00 | None
|
Aggregate Additional Trust Fund Expenses 0.00 |
|
Additional Trust Fund Expenses attributed to 0.00 |
Rating Agency charges for Assumptions |
|
Net Balloon Payment Excess (Shortfall) 0.00 |
|
Interest Reserve Account |
Deposits 0.00 |
Withdrawals 0.00 |
|
Specially Serviced Loans not Delinquent | ===============================================
Number of Outstanding Loans 0 | Total
Aggregate Unpaid Principal Balance 0.00 | ===============================================
|
- ------------------------------------------------------------------------------------------------------------------------------------
Copyright 1997, Norwest Bank Minnesota, N.A.
</TABLE>
B-5
<PAGE>
<TABLE>
<CAPTION>
[NORWEST BANKS LOGO] ------------------------------------------
GMAC COMMERCIAL MORTGAGE SECURITIES, INC. For Additional Information, please contact
NORWEST BANK MINNESOTA, N.A. MORTGAGE PASS-THROUGH CERTIFICATES Leslie Gaskill
CORPORATE TRUST SERVICES SERIES 1999-C3 (212) 515-5254
3 NEW YORK PLAZA, 15TH FLOOR Reports Available on the World Wide Web
NEW YORK, NY 10004 @ www.ctslink.com/cmbs
------------------------------------------
PAYMENT DATE: 09/15/1999
RECORD DATE: 08/31/1999
- ------------------------------------------------------------------------------------------------------------------------------------
RATINGS DETAIL
============================================================================
Original Ratings Current Ratings (1)
Class CUSIP ------------------------ ------------------------
DCR Fitch Moody's S&P DCR Fitch Moody's S&P
============================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
============================================================================
NR - Designates that the class was not rated by the above agency at the
time of original issuance.
X - Designates that the above rating agency did not rate any classes in
this transaction at the time of original issuance.
N/A - Data not available this period.
1) For any class not rated at the time of original issuance by any particular rating agency, no request has been
made subsequent to issuance to obtain rating information, if any, from such rating agency. The current ratings
were obtained directly from the applicable rating agency within 30 days of the payment date listed above. The
ratings may have changed since they were obtained. Because the ratings may have changed, you may want to obtain
current ratings directly from the rating agencies.
Duff & Phelps Credit Rating Co. Fitch IBCA, Inc. Moody's Investors Service Standard & Poor's Rating Services
55 East Monroe Street One State Street Plaza 99 Church Street 26 Broadway
Chicago, Illinois 60603 New York, New York 10004 New York, New York 10007 New York, New York 10004
(312) 368-3100 (212) 908-0500 (212) 553-0300 (212) 208-8000
- ------------------------------------------------------------------------------------------------------------------------------------
Copyright 1997, Norwest Bank Minnesota, N.A.
</TABLE>
B-6
<PAGE>
<TABLE>
<CAPTION>
[NORWEST BANKS LOGO] ------------------------------------------
GMAC COMMERCIAL MORTGAGE SECURITIES, INC. For Additional Information, please contact
NORWEST BANK MINNESOTA, N.A. MORTGAGE PASS-THROUGH CERTIFICATES Leslie Gaskill
CORPORATE TRUST SERVICES SERIES 1999-C3 (212) 515-5254
3 NEW YORK PLAZA, 15TH FLOOR Reports Available on the World Wide Web
NEW YORK, NY 10004 @ www.ctslink.com/cmbs
------------------------------------------
PAYMENT DATE: 09/15/1999
RECORD DATE: 08/31/1999
- ------------------------------------------------------------------------------------------------------------------------------------
CURRENT MORTGAGE LOAN AND PROPERTY STRATIFICATION TABLES
SCHEDULED BALANCE STATE (3)
=============================================================== ===============================================================
% of % of
Scheduled # of Scheduled Agg. WAM Weighted # of Scheduled Agg. WAM Weighted
Balance Loans Balance Bal. (2) WAC Avg DSCR (1) State Props. Balance Bal. (2) WAC Avg DSCR (1)
=============================================================== ===============================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
===============================================================
Totals
===============================================================
===============================================================
Totals
===============================================================
See footnotes on last page of this section.
- ------------------------------------------------------------------------------------------------------------------------------------
Copyright 1997, Norwest Bank Minnesota, N.A.
</TABLE>
B-7
<PAGE>
<TABLE>
<CAPTION>
[NORWEST BANKS LOGO] ------------------------------------------
GMAC COMMERCIAL MORTGAGE SECURITIES, INC. For Additional Information, please contact
NORWEST BANK MINNESOTA, N.A. MORTGAGE PASS-THROUGH CERTIFICATES Leslie Gaskill
CORPORATE TRUST SERVICES SERIES 1999-C3 (212) 515-5254
3 NEW YORK PLAZA, 15TH FLOOR Reports Available on the World Wide Web
NEW YORK, NY 10004 @ www.ctslink.com/cmbs
------------------------------------------
PAYMENT DATE: 09/15/1999
RECORD DATE: 08/31/1999
- ------------------------------------------------------------------------------------------------------------------------------------
CURRENT MORTGAGE LOAN AND PROPERTY STRATIFICATION TABLES
DEBT SERVICE COVERAGE RATIO PROPERTY TYPE (3)
============================================================== ==============================================================
Debt
Service % of % of
Coverage # of Scheduled Agg. WAM Weighted Property # of Scheduled Agg. WAM Weighted
Ratio Loans Balance Bal. (2) WAC Avg DSCR (1) Type Props. Balance Bal. (2) WAC Avg DSCR (1)
============================================================== ==============================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
============================================================== ==============================================================
Totals Totals
============================================================== ==============================================================
NOTE RATE SEASONING
============================================================== ==============================================================
% of % of
Note # of Scheduled Agg. WAM Weighted # of Scheduled Agg. WAM Weighted
Rate Loans Balance Bal. (2) WAC Avg DSCR (1) Seasoning Loans Balance Bal. (2) WAC Avg DSCR (1)
============================================================== ==============================================================
============================================================== ==============================================================
Totals Totals
============================================================== ==============================================================
See footnotes on last page of this section.
- ------------------------------------------------------------------------------------------------------------------------------------
Copyright 1997, Norwest Bank Minnesota, N.A.
</TABLE>
B-8
<PAGE>
<TABLE>
<CAPTION>
[NORWEST BANKS LOGO] ------------------------------------------
GMAC COMMERCIAL MORTGAGE SECURITIES, INC. For Additional Information, please contact
NORWEST BANK MINNESOTA, N.A. MORTGAGE PASS-THROUGH CERTIFICATES Leslie Gaskill
CORPORATE TRUST SERVICES SERIES 1999-C3 (212) 515-5254
3 NEW YORK PLAZA, 15TH FLOOR Reports Available on the World Wide Web
NEW YORK, NY 10004 @ www.ctslink.com/cmbs
------------------------------------------
PAYMENT DATE: 09/15/1999
RECORD DATE: 08/31/1999
- ------------------------------------------------------------------------------------------------------------------------------------
CURRENT MORTGAGE LOAN AND PROPERTY STRATIFICATION TABLES
ANTICIPATED REMAINING TERM (ARD AND BALLOON LOANS) REMAINING STATED TERM (FULLY AMORTIZING LOANS)
================================================================= =================================================================
Anticipated % of Remaining % of
Remaining # of Scheduled Agg. WAM Weighted Stated # of Scheduled Agg. WAM Weighted
Term (2) Loans Balance Bal. (2) WAC Avg DSCR (1) Term Loans Balance Bal. (2) WAC Avg DSCR (1)
================================================================= =================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
================================================================= =================================================================
Totals Totals
================================================================= =================================================================
REMAINING AMORTIZATION TERM (ARD AND BALLOON LOANS) AGE OF MOST RECENT NOI
================================================================= =================================================================
Age of
Remaining % of Most % of
Amortization # of Scheduled Agg. WAM Weighted Recent # of Scheduled Agg. WAM Weighted
Term Loans Balance Bal. (2) WAC Avg DSCR (1) NOI Loans Balance Bal. (2) WAC Avg DSCR (1)
================================================================= =================================================================
================================================================= =================================================================
Totals Totals
================================================================= =================================================================
(1) Debt Service Coverage Ratios are updated periodically as new NOI figures become available from borrowers on an asset level. In
all cases the most current DSCR provided by the Servicer is used. To the extent that no DSCR is provided by the Servicer,
information from the offering document is used. The Trustee makes no representations as to the accuracy of the data provided by the
borrower for this calculation.
(2) Anticipated Remaining Term and WAM are each calculated based upon the term from the current month to the earlier of the
Anticipated Repayment Date, if applicable, and the maturity date.
(3) Data in this table was calculated by allocating pro- rata the current loan information to the properties based upon the Cut- off
Date Balance of the related mortgage loan as disclosed in the offering document.
Note: (i) "Scheduled Balance" has the meaning assigned thereto in the CSSA Standard Information Package.
- ------------------------------------------------------------------------------------------------------------------------------------
Copyright 1997, Norwest Bank Minnesota, N.A.
</TABLE>
B-9
<PAGE>
<TABLE>
<CAPTION>
[NORWEST BANKS LOGO] ------------------------------------------
GMAC COMMERCIAL MORTGAGE SECURITIES, INC. For Additional Information, please contact
NORWEST BANK MINNESOTA, N.A. MORTGAGE PASS-THROUGH CERTIFICATES Leslie Gaskill
CORPORATE TRUST SERVICES SERIES 1999-C3 (212) 515-5254
3 NEW YORK PLAZA, 15TH FLOOR Reports Available on the World Wide Web
NEW YORK, NY 10004 @ www.ctslink.com/cmbs
------------------------------------------
PAYMENT DATE: 09/15/1999
RECORD DATE: 08/31/1999
- ------------------------------------------------------------------------------------------------------------------------------------
MORTGAGE LOAN DETAIL
====================================================================================================================================
=================================================================================================================
Anticipated
Loan Property Interest Principal Gross Repayment Maturity
Number ODCR Type (1) City State Payment Payment Coupon Date Date
=================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
=================================================================================================================
TOTALS
=================================================================================================================
============================================================================================
Neg. Beginning Ending Paid Appraisal Appraisal Res. Mod.
Amort Scheduled Scheduled Thru Reduction Reduction Strat. Code
(Y/N) Balance Balance Date Date Amount (2) (3)
============================================================================================
============================================================================================
============================================================================================
(1) Property Type Code (2) Resolution Strategy Code (3) Modification Code
---------------------- ---------------------------- ---------------------
MF - Multi-Family OF - Office 1 - Modification 6 - DPO 10 - Deed In Lieu Of 1 - Maturity Date
RT - Retail MU - Mixed Use 2 - Foreclosure 7 - REO Foreclosure Extension
HC - Health Care LO - Lodging 3 - Bankruptcy 8 - Resolved 11 - Full Payoff 2 - Amortization Change
IN - Industrial SS - Self Storage 4 - Extension 9 - Pending Return to 12 - Reps and Warranties 3 - Principal Write-Off
WH - Warehouse OT - Other 5 - Note Sale Master Servicer 13 - Other or TBD 4 - Combination
MH - Mobile Home Park
- ------------------------------------------------------------------------------------------------------------------------------------
Copyright 1997, Norwest Bank Minnesota, N.A.
</TABLE>
B-10
<PAGE>
<TABLE>
<CAPTION>
[NORWEST BANKS LOGO] ------------------------------------------
GMAC COMMERCIAL MORTGAGE SECURITIES, INC. For Additional Information, please contact
NORWEST BANK MINNESOTA, N.A. MORTGAGE PASS-THROUGH CERTIFICATES Leslie Gaskill
CORPORATE TRUST SERVICES SERIES 1999-C3 (212) 515-5254
3 NEW YORK PLAZA, 15TH FLOOR Reports Available on the World Wide Web
NEW YORK, NY 10004 @ www.ctslink.com/cmbs
------------------------------------------
PAYMENT DATE: 09/15/1999
RECORD DATE: 08/31/1999
- ------------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL PREPAYMENT DETAIL
====================================================================================================================================
Principal Prepayment Amount Prepayment Penalties
Offering Document ---------------------------------------------- ----------------------------------------------
Loan Number Cross-Reference Payoff Amount Curtailment Amount Prepayment Premium Yield Maintenance Premium
====================================================================================================================================
<S> <C> <C> <C> <C> <C>
====================================================================================================================================
Totals
====================================================================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
Copyright 1997, Norwest Bank Minnesota, N.A.
</TABLE>
B-11
<PAGE>
<TABLE>
<CAPTION>
[NORWEST BANKS LOGO] ------------------------------------------
GMAC COMMERCIAL MORTGAGE SECURITIES, INC. For Additional Information, please contact
NORWEST BANK MINNESOTA, N.A. MORTGAGE PASS-THROUGH CERTIFICATES Leslie Gaskill
CORPORATE TRUST SERVICES SERIES 1999-C3 (212) 515-5254
3 NEW YORK PLAZA, 15TH FLOOR Reports Available on the World Wide Web
NEW YORK, NY 10004 @ www.ctslink.com/cmbs
------------------------------------------
PAYMENT DATE: 09/15/1999
RECORD DATE: 08/31/1999
- ------------------------------------------------------------------------------------------------------------------------------------
HISTORICAL DETAIL
====================================================================================================================================
Delinquencies Prepayments Rate and Maturities
- ------------------------------------------------------------------------------------------------------------------------------------
Distri- Next
bution 30-59 Days 60-89 Days 90 Days or More Foreclosure REO Modifications Curtailments Payoff Weighted Avg.
Date # Balance # Balance # Balance # Balance # Balance # Balance # Amount # Amount Coupon Remit WAM
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
====================================================================================================================================
Note: Foreclosure and REO Totals are excluded from the delinquencies aging categories.
- ------------------------------------------------------------------------------------------------------------------------------------
Copyright 1997, Norwest Bank Minnesota, N.A.
</TABLE>
B-12
<PAGE>
<TABLE>
<CAPTION>
[NORWEST BANKS LOGO] ------------------------------------------
GMAC COMMERCIAL MORTGAGE SECURITIES, INC. For Additional Information, please contact
NORWEST BANK MINNESOTA, N.A. MORTGAGE PASS-THROUGH CERTIFICATES Leslie Gaskill
CORPORATE TRUST SERVICES SERIES 1999-C3 (212) 515-5254
3 NEW YORK PLAZA, 15TH FLOOR Reports Available on the World Wide Web
NEW YORK, NY 10004 @ www.ctslink.com/cmbs
------------------------------------------
PAYMENT DATE: 09/15/1999
RECORD DATE: 08/31/1999
- ------------------------------------------------------------------------------------------------------------------------------------
DELINQUENCY LOAN DETAIL
====================================================================================================================================
Offering Status
Document # of Paid Current Outstanding of Resolution Servicing Fore- Current Outstanding Bank-
Loan Cross- Months Through P&I P&I Mortgage Strategy Transfer closure Servicing Servicing ruptcy REO
Number Reference Delinq. Date Advances Advances** Loan (1) Code (2) Date Date Advances Advances Date Date
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
====================================================================================================================================
Totals
====================================================================================================================================
(1) Status of Mortgage Loan (2) Resolution Strategy Code
--------------------------- ----------------------------
1 - Modification 6 - DPO 10 - Deed In Lieu Of 1 - Modification 7 - REO
2 - Foreclosure 7 - REO Foreclosure 2 - Foreclosure 8 - Resolved
3 - Bankruptcy 8 - Resolved 11 - Full Payoff 3 - Bankruptcy 9 - Pending Return to
4 - Extension 9 - Pending Return to 12 - Reps and Warranties 4 - Extension Master Servicer
5 - Note Sale Master Servicer 13 - Other or TBD 5 - Note Sale 10 - Deed In Lieu Of
6 - DPO Foreclosure
** Outstanding P&I Advances include the current period advance
- ------------------------------------------------------------------------------------------------------------------------------------
Copyright 1997, Norwest Bank Minnesota, N.A.
</TABLE>
B-13
<PAGE>
<TABLE>
<CAPTION>
[NORWEST BANKS LOGO] ------------------------------------------
GMAC COMMERCIAL MORTGAGE SECURITIES, INC. For Additional Information, please contact
NORWEST BANK MINNESOTA, N.A. MORTGAGE PASS-THROUGH CERTIFICATES Leslie Gaskill
CORPORATE TRUST SERVICES SERIES 1999-C3 (212) 515-5254
3 NEW YORK PLAZA, 15TH FLOOR Reports Available on the World Wide Web
NEW YORK, NY 10004 @ www.ctslink.com/cmbs
------------------------------------------
PAYMENT DATE: 09/15/1999
RECORD DATE: 08/31/1999
- ------------------------------------------------------------------------------------------------------------------------------------
SPECIALLY SERVICED LOAN DETAIL - PART 1
====================================================================================================================================
Offering Remaining
Distri- Document Servicing Resolution Net Amort-
bution Loan Cross- Transfer Strategy Scheduled Property Interest Actual Operating NOI Maturity ization
Date Number Reference Date Code (1) Balance Type (2) State Rate Balance Income Date DSCR Date Term
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
====================================================================================================================================
(1) Resolution Strategy Code (2) Property Type Code
---------------------------- ----------------------
1 - Modification 7 - REO MF - Multi-Family OF - Office
2 - Foreclosure 8 - Resolved RT - Retail MU - Mixed Use
3 - Bankruptcy 9 - Pending Return to HC - Health Care LO - Lodging
4 - Extension Master Servicer IN - Industrial SS - Self Storage
5 - Note Sale 10 - Deed In Lieu Of WH - Warehouse OT - Other
6 - DPO Foreclosure MH - Mobile Home Park
- ------------------------------------------------------------------------------------------------------------------------------------
Copyright 1997, Norwest Bank Minnesota, N.A.
</TABLE>
B-14
<PAGE>
<TABLE>
<CAPTION>
[NORWEST BANKS LOGO] ------------------------------------------
GMAC COMMERCIAL MORTGAGE SECURITIES, INC. For Additional Information, please contact
NORWEST BANK MINNESOTA, N.A. MORTGAGE PASS-THROUGH CERTIFICATES Leslie Gaskill
CORPORATE TRUST SERVICES SERIES 1999-C3 (212) 515-5254
3 NEW YORK PLAZA, 15TH FLOOR Reports Available on the World Wide Web
NEW YORK, NY 10004 @ www.ctslink.com/cmbs
------------------------------------------
PAYMENT DATE: 09/15/1999
RECORD DATE: 08/31/1999
- ------------------------------------------------------------------------------------------------------------------------------------
SPECIALLY SERVICED LOAN DETAIL - PART 2
====================================================================================================================================
Offering
Document Resolution Site Other REO
Distribution Loan Cross- Strategy Inspection Phase Appraisal Appraisal Property
Date Number Reference Code (1) Date 1 Date Date Value Revenue Comment
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
====================================================================================================================================
(1) Resolution Strategy Code
----------------------------
1 - Modification 6 - DPO 10 - Deed In Lieu Of
2 - Foreclosure 7 - REO Foreclosure
3 - Bankruptcy 8 - Resolved 11 - Full Payoff
4 - Extension 9 - Pending Return to 12 - Reps and Warranties
5 - Note Sale Master Servicer 13 - Other or TBD
- ------------------------------------------------------------------------------------------------------------------------------------
Copyright 1997, Norwest Bank Minnesota, N.A.
</TABLE>
B-15
<PAGE>
<TABLE>
<CAPTION>
[NORWEST BANKS LOGO] ------------------------------------------
GMAC COMMERCIAL MORTGAGE SECURITIES, INC. For Additional Information, please contact
NORWEST BANK MINNESOTA, N.A. MORTGAGE PASS-THROUGH CERTIFICATES Leslie Gaskill
CORPORATE TRUST SERVICES SERIES 1999-C3 (212) 515-5254
3 NEW YORK PLAZA, 15TH FLOOR Reports Available on the World Wide Web
NEW YORK, NY 10004 @ www.ctslink.com/cmbs
------------------------------------------
PAYMENT DATE: 09/15/1999
RECORD DATE: 08/31/1999
- ------------------------------------------------------------------------------------------------------------------------------------
MODIFIED LOAN DETAIL
====================================================================================================================================
Offering
Loan Document Pre-Modification
Number Cross-Reference Balance Modification Date Modification Description
====================================================================================================================================
<S> <C> <C> <C> <C>
====================================================================================================================================
Total
====================================================================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
Copyright 1997, Norwest Bank Minnesota, N.A.
</TABLE>
B-16
<PAGE>
<TABLE>
<CAPTION>
[NORWEST BANKS LOGO] ------------------------------------------
GMAC COMMERCIAL MORTGAGE SECURITIES, INC. For Additional Information, please contact
NORWEST BANK MINNESOTA, N.A. MORTGAGE PASS-THROUGH CERTIFICATES Leslie Gaskill
CORPORATE TRUST SERVICES SERIES 1999-C3 (212) 515-5254
3 NEW YORK PLAZA, 15TH FLOOR Reports Available on the World Wide Web
NEW YORK, NY 10004 @ www.ctslink.com/cmbs
------------------------------------------
PAYMENT DATE: 09/15/1999
RECORD DATE: 08/31/1999
- ------------------------------------------------------------------------------------------------------------------------------------
LIQUIDATED LOAN DETAIL
====================================================================================================================================
Final Gross Net
Recovery Offering Proceeds Proceeds Repur-
Deter- Document as a % of Aggregate Net as a % of chased
Loan mination Cross- Appraisal Appraisal Actual Gross Actual Liquidation Liquidation Actual Realized by Seller
Number Date Reference Date Value Balance Proceeds Balance Expenses* Proceeds Balance Loss (Y/N)
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
====================================================================================================================================
Current Total
====================================================================================================================================
Cumulative Total
====================================================================================================================================
* Aggregate liquidation expenses also include outstanding P&I advances and unpaid fees (servicing, trustee, etc.).
- ------------------------------------------------------------------------------------------------------------------------------------
Copyright 1997, Norwest Bank Minnesota, N.A.
</TABLE>
B-17
<PAGE>
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
MORTGAGE PASS-THROUGH CERTIFICATES SERIES 1999-C3
DELINQUENT LOAN STATUS REPORT
AS OF ____________________
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
SHORT NAME SQ FT TOTAL P&I
(WHEN PROPERTY OR PAID THRU SCHEDULED ADVANCES
PROSPECTUS ID APPROPRIATE) TYPE CITY STATE UNITS DATE LOAN BALANCE TO DATE
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
30 DAYS DELINQUENT
60 DAYS DELINQUENT
90 DAYS DELINQUENT
CURRENT & AT SPECIAL SERVICER
<CAPTION>
- ----------------------------------------------------------------------------------------------
TOTAL OTHER CURRENT CURRENT
EXPENSES ADVANCES TOTAL MONTHLY INTEREST MATURITY LTM NOI LTM
TO DATE (TAXES & ESCROW) EXPOSURE P&I RATE DATE DATE NOI
- ----------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C> <C>
<CAPTION>
- ----------------------------------------------------
LTM TRANSFER
DSCR DATE COMMENTS
- ----------------------------------------------------
<C> <C> <C>
</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 special
servicer - to be provided by a third party.
B-18
<PAGE>
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
MORTGAGE PASS-THROUGH CERTIFICATES SERIES 1999-C3
HISTORICAL LOAN MODIFICATION REPORT
AS OF ____________________
<TABLE>
<CAPTION>
BALANCE WHEN BALANCE AT THE
SENT TO EFFECTIVE DATE # MTHS
PROSPECUTS MOD / EFFECT SPECIAL OF OLD FOR RATE
ID CITY STATE EXTENSION FLAG DATE SERVICER REHABILITATION RATE CHANGE
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
TOTAL FOR ALL LOANS:
TOTAL FOR LOANS IN CURRENT MONTH:
# OF LOANS $BALANCE
MODIFICATIONS: $0.00
MATURITY DATE EXTENSIONS: 0 $0.00
----------------------------------------------------
TOTAL: 0 $0.00
<CAPTION>
(2)
TOTAL # (1) EST. FUTURE
MTHS FOR REALIZED INTEREST LOSS
NEW OLD NEW CHANGE OF LOSS TO TO TRUST $
RATE* OLD P&I NEW P&I** MATURITY MATURITY MOD TRUST $ (RATE REDUCTION) COMMENTS
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C> <C> <C>
</TABLE>
* The information in these columns is from a particular point 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
calculated at the time of the modification.
B-19
<PAGE>
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
MORTGAGE PASS-THROUGH CERTIFICATES SERIES 1999-C3
HISTORICAL LOSS ESTIMATE REPORT (REO SOLD OR DISCOUNTED PAYOFF)
AS OF ____________________
<TABLE>
<CAPTION>
LATEST
% APPRAISAL OR EFFECTIVE
PROSPECTUS SHORT PROPERTY RECOVERED BROKER'S DATE OF
ID NAME TYPE CITY STATE FROM SALE OPINION SALE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
TOTAL ALL LOANS: 0% $ -
Current Month Only:
TOTAL CURRENT MONTH: $ -
<CAPTION>
NET AMT.
SALES RECEIVED SCHEDULED TOTAL P&I TOTAL SERVICING NET
PRICE FROM SALE BALANCE ADVANCED EXPENSES FEES PROCEEDS
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C>
$ -
$ -
$ -
$ -
$ - $ - $ - $ - $ - $ - $ -
$ - $ - $ - $ - $ - $ - $ -
<CAPTION>
ACTUAL DATE MINOR
LOSSES DATE LOSS ADJ. TOTAL LOSS LOSS %
PASSED PASSED MINOR ADJ. PASSED WITH OF SCHEDULED
THRU THRU TO TRUST THRU ADJUSTMENT BALANCE
- ----------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C>
$ - $ -
$ - $ -
$ - $ -
$ - $ -
$ - $ - $ - 0%
$ - $ -
</TABLE>
B-20
<PAGE>
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
MORTGAGE PASS-THROUGH CERTIFICATES SERIES 1999-C3
REO STATUS REPORT
AS OF ____________________
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
PRO- SHORT NAME SQ FT PAID SCHEDULED TOTAL P&I
SPECTUS (WHEN PROPERTY OR THRU LOAN ADVANCES
ID APPROPRIATE) TYPE CITY STATE UNITS DATE BALANCE TO DATE
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
VALUE
OTHER USING LOSS
TOTAL ADVANCES CURRENT NOI & APPRAISAL USING 92%
EXPENSES (TAXES & TOTAL MONTHLY CAP RATE VALUATION CAP BPO OR APPR. OR
TO DATE ESCROW) EXPOSURE P&I ASSIGN DATE RATE INTERNAL VALUE** BPO (F)
- ------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C> <C> <C>
<CAPTION>
- --------------------------------------------------------------------------------------------------
TOTAL
ESTIMATED APPRAISAL REO PENDING
RECOVERY REDUCTION TRANSFER ACQUISITION RESOLUTION
% REALIZED DATE DATE DATE COMMENTS
- --------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C>
</TABLE>
(1) Use the following codes; App. - Appraisal, BPO - Brokers Opinion, Int -
Internal Value
B-21
<PAGE>
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
MORTGAGE PASS-THROUGH CERTIFICATES SERIES 1999-C3
SERVICER WATCH LIST
AS OF ____________________
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------
PROSPECTUS SHORT NAME (WHEN PROPERTY
ID APPROPRIATE) TYPE
- ------------------------------------------------------------------------------
<S> <C> <C>
<CAPTION>
- -------------------------------------------------------------------------------
SCHEDULED LOAN PAID THRU MATURITY
CITY STATE BALANCE DATE DATE
- -------------------------------------------------------------------------------
<C> <C> <C> <C> <C>
<CAPTION>
- ------------------------------------------------------------------------
LTM
DSCR COMMENT / REASON ON WATCH LIST
- ------------------------------------------------------------------------
<C> <C>
</TABLE>
B-22
<PAGE>
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
MORTGAGE PASS-THROUGH CERTIFICATES SERIES 1999-C3
COMPARATIVE FINANCIAL STATUS REPORT
AS OF ____________________
<TABLE>
<CAPTION>
LAST
PROPERTY SCHEDULED PAID ANNUAL
PROSPECTUS INSPECT LOAN THRU DEBT
ID CITY STATE DATE BALANCE DATE SERVICE
<S> <C> <C> <C> <C> <C> <C>
yy/mm
Total: $ $
<CAPTION>
- --------------------------------------
ORIGINAL UNDERWRITING
INFORMATION
- --------------------------------------
BASIS YEAR
- --------------------------------------
Financial
Info as % Total $ (1)
of Date Occ Revenue NOI DSCR
- --------------------------------------
<C> <C> <C> <C> <C>
yy/mm
WA $ $ WA
- --------------------------------------
<CAPTION>
- ---------------------------------------
2ND PRECEDING ANNUAL OPERATING
INFORMATION
- ---------------------------------------
AS OF _______ NORMALIZED
- ---------------------------------------
Financial
Info
as of % Total $ (1)
Date Occ Revenue NOI DSCR
- ---------------------------------------
yy/mm
WA $ $ WA
- ---------------------------------------
<CAPTION>
- ---------------------------------------
PRECEDING ANNUAL OPERATING
INFORMATION
- ---------------------------------------
AS OF _______ NORMALIZED
- ---------------------------------------
Financial
Info
as of % Total $ (1)
Date Occ Revenue NOI DSCR
- ---------------------------------------
yy/mm
WA $ $ WA
- ---------------------------------------
<CAPTION>
- ----------------------------------------
TRAILING FINANCIAL
INFORMATION
- ----------------------------------------
MONTH REPORTED ACTUAL
- ----------------------------------------
FS Start FS End Total $ %
Date Date Revenue NOI DSC
- ----------------------------------------
yy/mm yy/mm
WA $ $ WA
- ----------------------------------------
<CAPTION>
- ---------------------
NET CHANGE
- ---------------------
PRECEDING & BASIS
%
% Total (1)
Occ Revenue DSC
WA $ WA
- ---------------------
<CAPTION>
Received Required
Financial Information: Loans Balance Loans Balance
# % $ % # % $ %
<C> <C> <C> <C> <C>
Current Full Year:
Current Full Yr. received with DSC <1:
Prior Full Year:
Prior Full Yr. received with DSC <1:
</TABLE>
(1) DSCR should match to Operating Statement and is calculated in accordance
with the Pooling and Servicing Agreement.
(2) Net change should compare the latest year to the underwriting year
B-23
<PAGE>
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
SERIES 1999-C3
OPERATING STATEMENT ANALYSIS
AS OF ______________________
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
PROPERTY OVERVIEW
LB 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 UNDERWRITING 1994 1995 1996 TRAILING
Occupancy Rate *
Average Rental Rate
* OCCUPANCY RATES ARE YEAR END OR THE ENDING DATE OF THE FINANCIAL STATEMENT FOR THE PERIOD.
INCOME: NO. OF MOS.
Number of Mos. PRIOR YEAR CURRENT YR.
Period Ended UNDERWRITING 1994 1995 1996 97 TRAILING** 1996-BASE
Statement Classification BASE LINE NORMALIZED NORMALIZED NORMALIZED AS OF / /97 VARIANCE
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
General & Administration
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
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
DSCR: (NOI/Debt Service)
DSCR: (AFTER RESERVES\CAP EXP.)
Source of Financial Data:
<PAGE>
<CAPTION>
1996-1995
VARIANCE
<C>
%
%
$0.00
</TABLE>
NOTES AND ASSUMPTIONS:
The years shown above will roll always showing a three year history. 1996 is the
current year financials; 1995 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 needs to be broken down, differently whenever possible 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
B-24
<PAGE>
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
SERIES 1999-C3
NOI ADJUSTMENT WORKSHEET
FOR FISCAL YEAR ENDED _________________
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
PROPERTY OVERVIEW
LB 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 UNDERWRITING 1994 1995 1996 TRAILING
Occupancy Rate *
Average Rental Rate
* OCCUPANCY RATES ARE YEAR END OR THE ENDING DATE OF THE FINANCIAL STATEMENT FOR THE
PERIOD.
INCOME: NO. OF MOS.
Number of Mos. PRIOR YEAR CURRENT YR.
Period Ended UNDERWRITING 1994 1995 1996 97 TRAILING** 1996-BASE 1996-1995
Statement Classification BASE LINE NORMALIZED NORMALIZED NORMALIZED AS OF / /97 VARIANCE VARIANCE
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
General & Administration
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
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. 1996 is the
current year financials; 1995 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 needs to be broken down, differently whenever possible 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
B-25
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
ANNEX C
ALL INFORMATION IN THIS TERM SHEET, 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.
STRUCTURAL AND COLLATERAL TERM SHEET
$1,031,610,000 (APPROXIMATE BALANCE) AUGUST 18, 1999
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1999-C3
APPROXIMATE SECURITIES STRUCTURE:
<TABLE>
<CAPTION>
EXPECTED EXPECTED
APPROXIMATE CREDIT WEIGHTED EXPECTED
EXPECTED RATING FACE/NOTIONAL SUPPORT AVERAGE LIFE PAYMENT
CLASS (A) MOODY'S/FITCH AMOUNT (MM) (% OF UPB) (YEARS)(b) WINDOW
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PUBLICLY OFFERED CLASSES
X (c) Aaa / AAA $1,152.6 N/A N/A 9/99 - 3/16
A1a Aaa / AAA 50.0 27.00 5.8 9/99 - 5/08
A1b Aaa / AAA 191.4 27.00 9.7 5/08 - 8/09
A2 Aaa / AAA 600.0 27.00 8.9 9/99 - 8/09
B Aa2 / AA 51.9 22.50 10.0 8/09 - 8/09
C A2 / A 57.6 17.50 10.0 8/09 - 8/09
D A3 / A- 20.2 15.75 10.0 8/09 - 8/09
E Baa2 / BBB 37.5 12.50 10.0 8/09 - 8/09
F Baa3 / BBB- 23.1 10.50 10.0 8/09 - 8/09
PRIVATELY OFFERED CLASSES (D)
G
H
J
K
L
M
</TABLE>
(a) Class A1a is expected to have a fixed pass-through rate. Classes A1b
through D and G through M are expected to have a fixed pass-through rate
subject to a cap equal to the weighted average Net Mortgage Pass-Through
Rate. Classes E and F are expected to have a pass-through rate equal to the
weighted average Net Mortgage Pass-Through Rate.
(b) Calculated at 0% CPR, assuming no balloon payment extension and that ARD
Loans pay in full on Anticipated Repayment Dates.
(c) Notional amount on interest only class. (d) Not offered hereby.
COLLATERAL FACTS:
Initial Pool Balance: $1,152,640,035
Number of Mortgage Loans: 138
Number of Mortgaged Properties: 177
Average Cut-Off Date Balance: $8,352,464
Weighted Average Current Mortgage Rate: 7.896%
Weighted Average U/W DSCR (a): 1.37x
Weighted Average Cut-Off Date LTV Ratio (a): 68.88%
Weighted Average Remaining Term to Maturity (months): 118.3 months
Weighted Average Remaining Amortization Term (months): 342.9 months
Weighted Average Seasoning (months): 2.55 months
CTL Loans as a % of Total 0.13%
Balloon Loans as % of Total (b): 99.87%
Single Largest Loan as % of Total: 6.94%
Five Largest Loans as % of Total: 23.22%
Ten Largest Loans as % of Total: 34.96%
(a) All DSCR and LTV information presented herein is generally calculated as
though any related earnout reserve had been applied to reduce or defease
the primary balance of the mortgage loan.
(b) Includes 28 ARD loans totaling $431 mm and 37.4% of the pool Cut-Off date
balance.
TEN LARGEST LOANS OR SPONSORS
<TABLE>
<CAPTION>
CURRENT
LOAN BALANCE % BY UPB LTV DSCR PROPERTY TYPE
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Biltmore Fashion Park $80,000,000 6.94% 60.38% 1.43x Anchored Retail
Prime Outlets at Niagara Falls 62,873,660 5.45 72.77 1.36 Anchored Retail
Equity Inns Portfolio 48,469,184 4.21 49.26 1.90 Hospitality
One Colorado Place 42,649,122 3.70 72.29 1.25 Anchored Retail
Comerica Bank Building 33,660,567 2.92 65.23 1.43 Office
120 Monument Circle 28,968,172 2.51 74.47 1.23 Office
125 Maiden Lane 28,500,000 2.47 73.83 1.31 Office
Texas Development Portfolio 26,943,812 2.34 72.07 1.34 Multifamily
Sherman Plaza 26,000,000 2.26 68.42 1.24 Office
Alliance TP Portfolio 24,905,460 2.16 86.48 1.19 Multifamily
---------- ---- ----- ----
Total/Wtd. Avg. $402,969,977 34.96% 67.52% 1.14x
</TABLE>
KEY FEATURES:
Lead Managers: Deutsche Banc Alex. Brown
Goldman, Sachs & Co.
Selling Group: Newman and Associates, Inc.
Mortgage Loan Sellers (a): GMAC Commercial Mortgage Corporation (57.14%)
German American Capital Corporation (21.50%)
Goldman Sachs Mortgage Company (21.36%)
Master Servicer: GMAC Commercial Mortgage Corporation
Special Servicer: GMAC Commercial Mortgage Corporation
Trustee: Norwest Bank National Association
Launch: August 1999
Pricing: August 1999
Anticipated Settlement: On or about August 30, 1999
Cut-Off Date: August 1, August 5 and August 10, 1999
Distribution Date: 15th of each month, or following business day
(commencing September 1999)
Payment Delay: 14 days
ERISA Eligible: Classes A1a, A1b, A2, and X are expected to be
ERISA eligible subject to certain conditions for
eligibility.
SMMEA Eligible: Classes A1a, A1b, A2, X and B are expected to be
SMMEA securities upon issuance.
Structure: Sequential pay
Day Count: 30/360
Tax Treatment: REMIC
Rated Final Distribution: July, 2032
Clean up Call: 1.0%
Minimum Denominations: Publicly Offered Classes except Class X: $25,000 & $1
Class X: $1,000,000 Notional Amount & $1
Delivery: DTC
(a) Percentages represent the portion of the Aggregate Cut-Off Date Principal
Balance contributed by each Mortgage Loan Seller.
SELECTED LOAN DATA:
- -----------------------------------------------------------------
NUMBER OF CUT-OFF DATE BALANCE
GEOGRAPHIC MORTGAGED -----------------------------------
DISTRIBUTION PROPERTIES (MM) % BY UPB WTD. AVG. DSCR
- -----------------------------------------------------------------
California 33 $257.7 22.4% 1.34x
Texas 32 171.0 14.8 1.37
New York 12 135.8 11.8 1.34
Arizona 7 106.2 9.2 1.47
Indiana 5 68.7 6.0 1.29
Other (a) 88 413.2 35.9 1.39
-- ----- ---- ----
TOTAL/WTD. AVG. 177 $1,152.6 100.0% 1.37x
- -----------------------------------------------------------------
PROPERTY TYPE
- -----------------------------------------------------------------
Retail (b) 34 $350.8 30.4% 1.36x
Office 36 322.2 28.0 1.33
Multifamily 55 260.0 22.6 1.29
Hospitality 25 105.9 9.2 1.65
Industrial 21 99.2 8.6 1.42
Mobil Home Park 2 4.4 0.4 1.40
Special Purpose 1 3.9 0.3 1.26
Self Storage 1 3.2 0.3 2.17
Mixed Use 2 3.1 0.3 1.42
- --- --- ----
TOTAL/WTD. AVG. 177 $1,152.6 100.0% 1.37x
- -----------------------------------------------------------------
PREPAYMENT
- -----------------------------------------------------------------
Defeasance 135 1,103.2 95.7% 1.36x
> YM or 1% UPB 2 38.6 3.4 1.43
> YM or 1% & 1 10.9 0.9 1.90
---- --- ----
TOTAL/WTD. AVG. 138 1,152.6 100.0% 1.37x
- -----------------------------------------------------------------
(a) Includes 30 states.
(b) 17 properties representing 25.14% of the Aggregate Cut-Off Date Balance are
Anchored Retail properties; 17 properties representing 5.30% of the
Aggregate Cut-Off Date Balance are Unanchored Retail properties.
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. All information in this Term Sheet, 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.
This material is furnished to you by Deutsche Bank Securities, Inc. and Goldman,
Sachs & Co. and not by the issuer of the securities. Deutsche Bank Securities,
Inc. and Goldman, Sachs & Co. are acting as the lead managers and neither of
these parties are acting as agent for the issuer or its affiliates in connection
with the proposed transaction. Neither the issuer nor any of its affiliates has
prepared or taken part in the preparation of these materials and neither makes
any representation as to the accuracy of these materials.
C-1
<PAGE>
ALL INFORMATION IN THIS TERM SHEET, 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.
COLLATERAL TERM SHEET
MORTGAGE POOL OVERVIEW
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
COLLATERAL FACTS LOAN GROUP 1 LOAN GROUP 2 AGGREGATE
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INITIAL POOL BALANCE: $892,678,711 $259,961,324 $1,152,640,035
NUMBER OF MORTGAGE LOANS: 99 39 138
NUMBER OF MORTGAGE PROPERTIES 122 55 177
AVERAGE CUT-OFF DATE BALANCE: $9,016,957 $6,665,675 $8,352,464
WEIGHTED AVERAGE CURRENT MORTGAGE RATE: 7.976% 7.619% 7.896%
WEIGHTED AVERAGE U/W DSCR: 1.39x 1.29x 1.37x
WEIGHTED AVERAGE CUT-OFF DATE LTV RATIO: 66.67% 76.46% 68.88%
WEIGHTED AVERAGE REMAINING TERM TO MATURITY: 118.2 119.0 118.3
WEIGHTED AVERAGE REMAINING AMORTIZATION TERM: 342.4 344.5 342.9
WEIGHTED AVERAGE SEASONING: 2.33 3.29 2.55
BALLOON/ARD LOANS AS % OF TOTAL: 99.84% 100.00% 99.87%
FIVE LARGEST LOANS AS % OF TOTAL: 29.98% 40.39% 23.22%
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
[TABLE OMITTED]
Non-Investment Grade Tranches
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. All information in this Term Sheet, 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.
This material is furnished to you by Deutsche Bank Securities, Inc. and Goldman,
Sachs & Co. and not by the issuer of the securities. Deutsche Bank Securities,
Inc. and Goldman, Sachs & Co. are acting as the lead managers and neither of
these parties are acting as agent for the issuer or its affiliates in connection
with the proposed transaction. Neither the issuer nor any of its affiliates has
prepared or taken part in the preparation of these materials and neither makes
any representation as to the accuracy of these materials.
C-2
<PAGE>
ALL INFORMATION IN THIS TERM SHEET, 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.
COLLATERAL TERM SHEET
STRUCTURAL OVERVIEW
o Loan Group 1 is comprised of all 99 of the non-multifamily Loans with an
aggregate Cut-Off Date Principal Balance of $893 million. Loan Group 2 is
comprised of all 39 of the multifamily loans with an aggregate Cut-Off Date
Principal Balance of $260 million.
o Principal and Interest payments will be made from Group 1 in the following
manner:
- 39.00% of Interest to A1 Class and 61.00% of Interest to A2 Class,
- 39.00% of Principal sequentially to A1a and A1b and 61.00% to the A2
Class until retired.
- After A1 Classes are retired Principal to A2 until all Class A
certificates are retired.
- Interest and Principal sequentially to Classes B, C, D, E, F, G, H, J,
K, L and M.
o Principal and Interest payments will be made from Group 2 in the following
manner:
- Interest and Principal to A2, and upon the retirement of the A2, all
cash flow will be combined with Group 1 and applied as set forth
above.
o Principal Losses will be allocated in reverse alphabetical order to Class
M, L, K, J, H, G, F, E, D, C, B, and then pro rata to Classes A1a, A1b and
A2 regardless of Loan Group.
o Each Class will be subordinate to the Class A1a, A1b, A2 and X and to each
Class with an earlier alphabetic designation than such Class. Each of the
Class A1, A2 and X Certificates will be of equal priority.
o The Master Servicer will cover net prepayment Interest shortfalls, provided
that with respect to any loans with due dates on or preceding the related
determination date the Master Servicer will only cover net prepayment
Interest shortfalls up to the Master Servicing fee of 2 basis points on the
principal balance of such loans. Net prepayment Interest shortfalls (after
application of prepayment Interest excesses and other Servicer coverage
from the Master Servicing Fee) will be allocated pro-rata (based on
Interest entitlements) to all regular Certificates.
o Shortfalls resulting from Master Servicer and Special Servicer
modifications, Special Servicer compensation or other extraordinary trust
fund expenses will be allocated in reverse alphabetical order to classes of
outstanding regular Certificates other than to the Class X.
o All Classes will pay Interest on a 30/360 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. All information in this Term Sheet, 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.
This material is furnished to you by Deutsche Bank Securities, Inc. and Goldman,
Sachs & Co. and not by the issuer of the securities. Deutsche Bank Securities,
Inc. and Goldman, Sachs & Co. are acting as the lead managers and neither of
these parties are acting as agent for the issuer or its affiliates in connection
with the proposed transaction. Neither the issuer nor any of its affiliates has
prepared or taken part in the preparation of these materials and neither makes
any representation as to the accuracy of these materials.
C-3
<PAGE>
ALL INFORMATION IN THIS TERM SHEET, 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.
COLLATERAL TERM SHEET
ALLOCATION OF PREPAYMENT PREMIUMS
PREPAYMENT PREMIUM EXAMPLE:
o The Yield Maintenance prepayment premium will generally be equal to the
present value of the reduction in Interest payments as a result of the
prepayment through the maturity of the prepaid Mortgage Loan, discounted at
the yield of a Treasury security of similar maturity in most cases
(converted from semi-annual to monthly pay). The following example reflects
that method.
GENERAL YIELD MAINTENANCE EXAMPLE FOR GROUP 1 MORTGAGE LOAN:
Assuming the structure presented in the beginning of this memo, that a Loan
Group 1 Mortgage Loan prepays, so Class A1a and Class A2 are the only
classes entitled to principal and the following assumptions: Mortgage Loan
Characteristics of Loan Group 1 Mortgage Loan being prepaid:
Balance $10,000,000
Coupon 7.80%
Maturity 10 yrs (August 1, 2009)
Treasury Rate (monthly) 6.00%
Certificate Characteristics
Class A1a Coupon 7.40%
Class A2 Coupon 7.40%
Discount Rate Fraction Example:
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------
CLASS A1A CERTIFICATES CLASS A2 CERTIFICATES CLASS X CERTIFICATES
-----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
PRINCIPAL PAYMENT $3,900,000 $6,100,000 N/A
-----------------------------------------------------------------------------------------------------------------------------
DISCOUNT RATE FRACTION CALCULATION (7.40% - 6.00%) / (7.40% - 6.00%) / 100.00% - 77.78% =
(7.80% - 6.00%) = (7.80% - 6.00%) = 22.22%
77.78% 77.78%
-----------------------------------------------------------------------------------------------------------------------------
% TOTAL PRINCIPAL DISTRIBUTION 39.00% 61.00% N/A
-----------------------------------------------------------------------------------------------------------------------------
% PREMIUM ALLOCATED 39.00% * 77.78% = 61.00% * 77.78% = 22.22%
30.33% 47.44%
-----------------------------------------------------------------------------------------------------------------------------
</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. All information in this Term Sheet,
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.
This material is furnished to you by Deutsche Bank Securities, Inc. and
Goldman, Sachs & Co. and not by the issuer of the securities. Deutsche Bank
Securities, Inc. and Goldman, Sachs & Co. are acting as the lead managers and
neither of these parties are acting as agent for the issuer or its affiliates
in connection with the proposed transaction. Neither the issuer nor any of its
affiliates has prepared or taken part in the preparation of these materials and
neither makes any representation as to the accuracy of these materials.
C-4
<PAGE>
ALL INFORMATION IN THIS TERM SHEET, 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.
COLLATERAL TERM SHEET
ALLOCATION OF PREPAYMENT PREMIUMS
GENERAL YIELD MAINTENANCE EXAMPLE FOR LOAN GROUP 2 MORTGAGE LOAN:
Assuming the structure presented in the beginning of this memo, that
a Loan Group 2 Mortgage Loan prepays, so Class A2 is the only class
entitled to principal and the following assumptions:
Mortgage Loan Characteristics of Loan Group 2 Mortgage Loan being
prepaid:
Balance $10,000,000
Coupon 7.80%
Maturity 10 yrs (August 1, 2009)
Treasury Rate (monthly) 6.00%
Certificate Characteristics
Class A1a Coupon 7.40%
Class A2 Coupon 7.40%
Discount Rate Fraction Example:
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------
CLASS A1a CERTIFICATES CLASS A2 CERTIFICATES CLASS X CERTIFICATES
-----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
PRINCIPAL PAYMENT $0 $10,000,000 N/A
-----------------------------------------------------------------------------------------------------------------------------
DISCOUNT RATE FRACTION CALCULATION (7.40% - 6.00%) / (7.40% - 6.00%) / 100.00% - 77.78% =
(7.80% - 6.00%) = (7.80% - 6.00%) = 22.22%
77.78% 77.78%
-----------------------------------------------------------------------------------------------------------------------------
% TOTAL PRINCIPAL DISTRIBUTION 0% 100% N/A
-----------------------------------------------------------------------------------------------------------------------------
% PREMIUM ALLOCATED 0% 100% *77.78% = 22.22%
77.78%
-----------------------------------------------------------------------------------------------------------------------------
</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. All information in this Term Sheet,
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.
This material is furnished to you by Deutsche Bank Securities, Inc. and
Goldman, Sachs & Co. and not by the issuer of the securities. Deutsche Bank
Securities, Inc. and Goldman, Sachs & Co. are acting as the lead managers and
neither of these parties are acting as agent for the issuer or its affiliates
in connection with the proposed transaction. Neither the issuer nor any of its
affiliates has prepared or taken part in the preparation of these materials and
neither makes any representation as to the accuracy of these materials.
C-5
<PAGE>
ALL INFORMATION IN THIS TERM SHEET, 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.
COLLATERAL TERM SHEET
PREPAYMENT PROFILES
PREPAYMENT RESTRICTION ASSUMING NO PREPAYMENT OF PRINCIPAL (a) (b)
o AGGREGATE POOL
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
PREPAYMENT SEPTEMBER SEPTEMBER SEPTEMBER SEPTEMBER SEPTEMBER SEPTEMBER SEPTEMBER
RESTRICTIONS 1999 2000 2001 2002 2003 2004 2005
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Locked out 99.06% 99.05% 35.55% 11.33% 1.60% 0.00% 0.00%
Defeasance 0.00 0.00 64.45 85.75 95.07 96.67 96.68
Yield Maintenance 0.94 0.95 0.00 2.92 3.33 3.33 3.32
- ----------------------------------------------------------------------------------------------------
Sub Total 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
Open 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
- ----------------------------------------------------------------------------------------------------
Total 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
UPB ($MM) 1,152.64 1,143.48 1,132.66 1,120.70 1,107.74 1,093.78 1,078.43
% of Initial UPB 100.00% 99.21% 98.27% 97.23% 96.10% 94.89% 93.56%
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
PREPAYMENT SEPTEMBER SEPTEMBER SEPTEMBER SEPTEMBER SEPTEMBER SEPTEMBER
RESTRICTIONS 2006 2007 2008 2009 2010 2011
- ----------------------------------------------------------------------------------------------------
Locked out 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Defeasance 96.63 93.59 97.41 48.34 100.00 100.00
Yield Maintenance 3.37 3.36 0.00 0.00 0.00 0.00
- ----------------------------------------------------------------------------------------------------
Sub Total 100.00% 96.95% 97.41% 48.34% 100.00% 100.00%
Open 0.00% 3.05% 2.59% 51.66% 0.00% 0.00%
- ----------------------------------------------------------------------------------------------------
Total 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
UPB ($MM) 1,046.40 1,028.77 911.82 57.17 25.08 24.02
% of Initial UPB 90.78% 89.25% 79.11% 4.96% 2.18% 2.08%
- ----------------------------------------------------------------------------------------------------
o LOAN GROUP 1
- ----------------------------------------------------------------------------------------------------
PREPAYMENT SEPTEMBER SEPTEMBER SEPTEMBER SEPTEMBER SEPTEMBER SEPTEMBER SEPTEMBER
RESTRICTIONS 1999 2000 2001 2002 2003 2004 2005
- ----------------------------------------------------------------------------------------------------
Locked out 98.78% 98.77% 34.66% 8.12% 1.64% 0.00% 0.00%
Defeasance 0.00 0.00 65.34 88.12 94.60 96.24 96.24
Yield Maintenance 1.22 1.23 0.00 3.76 3.76 3.76 3.76
- ----------------------------------------------------------------------------------------------------
Sub Total 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
Open 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
- ----------------------------------------------------------------------------------------------------
Total 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
UPB ($MM) 892.68 886.06 878.04 869.09 859.39 848.90 837.35
% of Initial UPB 100.00% 99.26% 98.36% 97.36% 96.27% 95.10% 93.80%
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
PREPAYMENT SEPTEMBER SEPTEMBER SEPTEMBER SEPTEMBER SEPTEMBER SEPTEMBER
RESTRICTIONS 2006 2007 2008 2009 2010 2011
- ----------------------------------------------------------------------------------------------------
Locked out 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Defeasance 96.17 96.17 96.87 36.09 100.00 100.00
Yield Maintenance 3.83 3.83 0.00 0.00 0.00 0.00
- ----------------------------------------------------------------------------------------------------
Sub Total 100.00% 100.00% 96.87% 36.09% 100.00% 100.00%
Open 0.00% 0.00% 3.13% 63.91% 0.00% 0.00%
- ----------------------------------------------------------------------------------------------------
Total 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
UPB ($MM) 809.41 796.21 726.15 46.21 14.74 14.35
% of Initial UPB 90.67% 89.19% 81.34% 5.18% 1.65% 1.61%
- ----------------------------------------------------------------------------------------------------
o LOAN GROUP 2
- ----------------------------------------------------------------------------------------------------
PREPAYMENT SEPTEMBER SEPTEMBER SEPTEMBER SEPTEMBER SEPTEMBER SEPTEMBER SEPTEMBER
RESTRICTIONS 1999 2000 2001 2002 2003 2004 2005
- ----------------------------------------------------------------------------------------------------
Locked out 100.00% 100.00% 38.63% 22.42% 1.47% 0.00% 0.00%
Defeasance 0.00 0.00 61.37 77.58 96.69 98.18 98.20
Yield Maintenance 0.00 0.00 0.00 0.00 1.84 1.82 1.80
- ----------------------------------------------------------------------------------------------------
Sub Total 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
Open 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
- ----------------------------------------------------------------------------------------------------
Total 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
UPB ($MM) 259.96 257.42 254.62 251.61 248.35 244.88 241.08
% OF INITIAL UPB 100.00% 99.02% 97.95% 96.79% 95.53% 94.20% 92.74%
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
PREPAYMENT SEPTEMBER SEPTEMBER SEPTEMBER SEPTEMBER SEPTEMBER SEPTEMBER
RESTRICTIONS 2006 2007 2008 2009 2010 2011
- ----------------------------------------------------------------------------------------------------
Locked out 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Defeasance 98.22 84.74 99.52 100.00 100.00 100.00
Yield Maintenance 1.78 1.76 0.00 0.00 0.00 0.00
- ----------------------------------------------------------------------------------------------------
Sub Total 100.00% 86.50% 99.52% 100.00% 100.00% 100.00%
Open 0.00% 13.50% 0.48% 0.00% 0.00% 0.00%
- ----------------------------------------------------------------------------------------------------
Total 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
UPB ($MM) 236.98 232.56 185.67 10.96 10.34 9.66
% of Initial UPB 91.16% 89.46% 71.42% 4.22% 3.98% 3.72%
- ----------------------------------------------------------------------------------------------------
(a) All tables calculated using modeling assumptions.
(b) Differences in totals may exist 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. All information in this Term Sheet,
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.
This material is furnished to you by Deutsche Bank Securities, Inc. and
Goldman, Sachs & Co. and not by the issuer of the securities. Deutsche Bank
Securities, Inc. and Goldman, Sachs & Co. are acting as the lead managers and
neither of these parties are acting as agent for the issuer or its affiliates
in connection with the proposed transaction. Neither the issuer nor any of its
affiliates has prepared or taken part in the preparation of these materials and
neither makes any representation as to the accuracy of these materials.
C-6
<PAGE>
ALL INFORMATION IN THIS TERM SHEET, 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.
COLLATERAL TERM SHEET
AVERAGE LIFE TABLE (IN YEARS) - AGGREGATE POOL
(PREPAYMENTS LOCKED OUT THROUGH LOCK OUT PERIOD, DEFEASANCE AND YIELD
MAINTENANCE, THEN RUN AT THE INDICATED CPR'S)
<TABLE>
<CAPTION>
- -------------------------------------------------------------
PREPAYMENT ASSUMPTIONS (CPR)
0% CPR 25% CPR 50% CPR 75% CPR 100% CPR
- -------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
A1a 5.8 5.8 5.8 5.8 5.7
A1b 9.7 9.7 9.6 9.6 9.4
A2 8.9 8.9 8.8 8.8 8.6
B 10.0 10.0 9.9 9.9 9.7
C 10.0 10.0 10.0 10.0 9.7
D 10.0 10.0 10.0 10.0 9.7
E 10.0 10.0 10.0 10.0 9.7
F 10.0 10.0 10.0 10.0 9.8
- -------------------------------------------------------------
</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. All information in this Term Sheet,
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.
This material is furnished to you by Deutsche Bank Securities, Inc. and
Goldman, Sachs & Co. and not by the issuer of the securities. Deutsche Bank
Securities, Inc. and Goldman, Sachs & Co. are acting as the lead managers and
neither of these parties are acting as agent for the issuer or its affiliates
in connection with the proposed transaction. Neither the issuer nor any of its
affiliates has prepared or taken part in the preparation of these materials and
neither makes any representation as to the accuracy of these materials.
C-7
<PAGE>
ALL INFORMATION IN THIS TERM SHEET, 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.
COLLATERAL TERM SHEET
DISTRIBUTION OF CUT-OFF DATE BALANCES
<TABLE>
<CAPTION>
WEIGHTED
AVERAGE WEIGHTED
PERCENTAGE OF WEIGHTED REMAINING AVERAGE
NUMBER OF AGGREGATE WEIGHTED AVERAGE TERM TO CUT-OFF
RANGE OF CUT-OFF DATE MORTGAGE CUT-OFF DATE CUT-OFF DATE AVERAGE CUT-OFF AVERAGE MORTGAGE MATURITY DATE LTV
BALANCES LOANS BALANCE BALANCE DATE BALANCE DSCR RATE (MOS) RATIO
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$500,000 - 999,999 1 $869,571 0.08% $869,571 1.21x 8.260% 119.0 79.05%
1,000,000 - 1,999,999 22 34,738,063 3.01 1,579,003 1.41 7.853 120.2 68.37
2,000,000 - 2,999,999 14 33,314,489 2.89 2,379,606 1.30 7.909 123.2 73.91
3,000,000 - 3,999,999 19 64,620,609 5.61 3,401,085 1.36 8.074 118.1 70.27
4,000,000 - 4,999,999 18 83,289,540 7.23 4,627,197 1.37 7.719 116.5 70.35
5,000,000 - 5,999,999 6 33,962,696 2.95 5,660,449 1.25 7.984 119.2 76.76
6,000,000 - 6,999,999 11 70,365,264 6.10 6,396,842 1.34 8.028 120.3 70.72
7,000,000 - 7,999,999 9 66,392,462 5.76 7,376,940 1.33 8.033 117.3 66.38
8,000,000 - 8,999,999 3 25,738,108 2.23 8,579,369 1.38 8.068 119.3 65.99
9,000,000 - 9,999,999 4 37,395,415 3.24 9,348,854 1.41 7.831 131.4 71.75
10,000,000 - 11,999,999 7 75,209,227 6.52 10,744,175 1.44 7.950 110.9 68.33
12,000,000 - 13,999,999 4 51,414,379 4.46 12,853,595 1.34 7.992 133.8 69.05
14,000,000 - 16,999,999 5 74,715,521 6.48 14,943,104 1.38 8.152 114.9 69.76
17,000,000 - 19,999,999 2 35,381,949 3.07 17,690,974 1.23 7.808 117.5 72.55
20,000,000 - 24,999,999 4 89,086,612 7.73 22,271,653 1.29 7.556 115.7 70.41
25,000,000 - 49,999,999 7 233,272,473 20.24 33,324,639 1.42 7.987 116.9 66.74
50,000,000 - 80,000,000 2 142,873,660 12.40 71,436,830 1.40 7.647 118.1 65.83
- ----------- ----- ---------- ---- ----- ----- -----
TOTAL/WTD. AVG. 138 $1,152,640,035 100.00% $8,352,464 1.37x 7.896% 118.3 68.88
=======================================================================================================
===================================================================================================================================
</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. All information in this Term Sheet,
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.
This material is furnished to you by Deutsche Bank Securities, Inc. and
Goldman, Sachs & Co. and not by the issuer of the securities. Deutsche Bank
Securities, Inc. and Goldman, Sachs & Co. are acting as the lead managers and
neither of these parties are acting as agent for the issuer or its affiliates
in connection with the proposed transaction. Neither the issuer nor any of its
affiliates has prepared or taken part in the preparation of these materials and
neither makes any representation as to the accuracy of these materials.
C-8
<PAGE>
ALL INFORMATION IN THIS TERM SHEET, 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.
COLLATERAL TERM SHEET
DISTRIBUTION OF MORTGAGED PROPERTIES BY STATE
OR 0.46% MN 0.28% GA 0.67% CT 0.36%
CA 22.36% MO 1.79% FL 4.14% NJ 2.80%
NV 0.52% WI 0.53% WV 0.18% DE 0.28%
ID 0.23% IL 1.05% SC 0.97% MD 0.85%
AZ 9.21% MS 2.00% PA 1.07% HI 0.68%
CO 1.08% MI 1.40% VA 1.08%
NE 0.41% IN 5.96% NC 3.28%
KS 0.35% TN 1.00% NY 11.79%
OK 1.15% AL 0.42% NH 1.38%
TX 14.84% OH 4.25% MA 1.20%
Indiana 5.96%
Ohio 4.25%
Other (a) 31.60%
California 22.36%
Texas 14.84%
New York 11.79%
Arizona 9.21%
(a) Includes 29 states
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. All information in this Term Sheet,
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.
This material is furnished to you by Deutsche Bank Securities, Inc. and
Goldman, Sachs & Co. and not by the issuer of the securities. Deutsche Bank
Securities, Inc. and Goldman, Sachs & Co. are acting as the lead managers and
neither of these parties are acting as agent for the issuer or its affiliates
in connection with the proposed transaction. Neither the issuer nor any of its
affiliates has prepared or taken part in the preparation of these materials and
neither makes any representation as to the accuracy of these materials.
C-9
<PAGE>
ALL INFORMATION IN THIS TERM SHEET, 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.
COLLATERAL TERM SHEET
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTION OF MORTGAGED PROPERTIES BY STATE (a)
- -----------------------------------------------------------------------------------------------------------------------------------
WEIGHTED
AVERAGE WEIGHTED
PERCENTAGE OF WEIGHTED REMAINING AVERAGE
NUMBER OF AGGREGATE WEIGHTED AVERAGE TERM TO CUT-OFF
MORTGAGED CUT-OFF DATE CUT-OFF DATE AVERAGE CUT-OFF AVERAGE MORTGAGE MATURITY DATE LTV
STATE PROPERTIES BALANCE BALANCE DATE BALANCE DSCR RATE (MOS) RATIO
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
California 33 $257,687,228 22.36% $7,808,704 1.34x 7.814% 117.0 68.51%
Texas 32 171,046,958 14.84 5,345,217 1.37 8.001 121.3 71.34
New York 12 135,840,193 11.79 11,320,016 1.34 7.847 117.9 67.05
Arizona 7 106,178,494 9.21 15,168,356 1.47 7.779 119.0 60.00
Indiana 5 68,668,711 5.96 13,733,742 1.29 7.698 109.0 75.32
Ohio 7 48,997,396 4.25 6,999,628 1.38 8.086 134.2 70.79
Florida 10 47,770,937 4.14 4,777,094 1.25 7.916 119.2 74.81
North Carolina 6 37,772,542 3.28 6,295,424 1.42 7.887 118.3 66.11
New Jersey 9 32,267,413 2.80 3,585,268 1.44 8.086 119.1 62.99
Mississippi 2 23,078,804 2.00 11,539,402 1.38 7.893 119.9 72.72
Missouri 4 20,640,232 1.79 5,160,058 1.30 7.944 119.7 70.15
Michigan 4 16,106,781 1.40 4,026,695 1.30 7.460 119.3 80.46
New Hampshire 1 15,961,012 1.38 15,961,012 1.28 8.529 117.0 72.55
Massachusetts 2 13,800,000 1.20 6,900,000 1.49 8.256 120.0 66.65
Oklahoma 3 13,296,180 1.15 4,432,060 1.37 7.700 118.6 78.03
Colorado 2 12,434,379 1.08 6,217,189 1.32 8.130 118.0 64.62
Virginia 4 12,391,129 1.08 3,097,782 1.51 8.078 118.7 59.88
Pennsylvania 3 12,344,296 1.07 4,114,765 1.29 7.614 115.5 70.75
Illinois 1 12,106,821 1.05 12,106,821 1.19 7.320 120.0 86.48
Tennessee 4 11,512,870 1.00 2,878,218 1.73 7.956 113.2 57.39
South Carolina 1 11,200,000 0.97 11,200,000 1.40 8.750 84.0 70.44
Maryland 3 9,778,118 0.85 3,259,373 1.31 8.089 130.8 71.61
Hawaii 2 7,837,587 0.68 3,918,794 1.38 7.836 118.0 75.98
Georgia 3 7,736,460 0.67 2,578,820 1.26 8.170 139.6 65.76
Wisconsin 1 6,088,038 0.53 6,088,038 1.45 8.250 81.0 70.79
Nevada 1 5,940,000 0.52 5,940,000 1.25 8.110 120.0 78.16
Oregon 1 5,290,545 0.46 5,290,545 1.90 8.370 119.0 49.55
Alabama 1 4,897,430 0.42 4,897,430 1.24 8.050 119.0 79.63
Nebraska 5 4,677,886 0.41 935,577 1.45 6.760 105.0 71.09
Connecticut 2 4,126,169 0.36 2,063,085 1.25 7.961 118.5 79.35
Kansas 2 3,996,634 0.35 1,998,317 1.90 8.370 119.0 49.55
Minnesota 1 3,247,265 0.28 3,247,265 1.90 8.370 119.0 49.55
Delaware 1 3,243,231 0.28 3,243,231 2.17 7.490 118.0 60.85
Idaho 1 2,655,000 0.23 2,655,000 1.32 7.810 120.0 72.34
West Virginia 1 2,023,296 0.18 2,023,296 1.90 8.370 119.0 49.55
- --------- ---- --------- ---- ----- ----- -----
TOTAL/WTD. AVG. 177 $1,152,640,035 100.00% $6,512,091 1.37x 7.896% 118.3 68.88%
===============================================================================================================
===================================================================================================================================
</TABLE>
(a) If a Mortgage Loan is secured by properties in multiple states, it is
treated as multiple Mortgage Loans each of which is allocated a cut-off
balance based on the allocated loan amount.
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. All information in this Term Sheet,
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.
This material is furnished to you by Deutsche Bank Securities, Inc. and
Goldman, Sachs & Co. and not by the issuer of the securities. Deutsche Bank
Securities, Inc. and Goldman, Sachs & Co. are acting as the lead managers and
neither of these parties are acting as agent for the issuer or its affiliates
in connection with the proposed transaction. Neither the issuer nor any of its
affiliates has prepared or taken part in the preparation of these materials and
neither makes any representation as to the accuracy of these materials.
C-10
<PAGE>
ALL INFORMATION IN THIS TERM SHEET, 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.
COLLATERAL TERM SHEET
DISTRIBUTION OF PROPERTY TYPES
Industrial 8.60%
Other 1.27%
Retail:
Anchored 25.14%
Unanchored 5.30%
Total 30.44%
Office 27.95%
Multi-family 22.55%
Hospitality 9.19%
<TABLE>
<CAPTION>
WEIGHTED
AVERAGE WEIGHTED
PERCENTAGE OF WEIGHTED REMAINING AVERAGE
NUMBER OF AGGREGATE WEIGHTED AVERAGE TERM TO CUT-OFF
MORTGAGED CUT-OFF DATE CUT-OFF DATE AVERAGE CUT-OFF AVERAGE MORTGAGE MATURITY DATE LTV
PROPERTY TYPE PROPERTIES BALANCE BALANCE DATE BALANCE DSCR RATE (MOS) RATIO
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Retail
Anchored 17 $289,774,494 25.14% $17,045,558 1.36x 7.886% 122.1 68.74%
Unanchored 17 61,051,298 5.30 3,591,253 1.37 8.249 119.4 66.52
-- ---------- ---- --------- ---- ----- ----- -----
Retail Subtotal 34 $350,825,792 30.44% $10,318,406 1.36x 7.949% 121.6 68.36%
Office 36 $322,205,615 27.95% $8,950,156 1.33x 7.794% 115.9 67.87%
Multifamily 55 259,961,324 22.55 4,726,570 1.29 7.619 119.0 76.46
Hospitality 25 105,918,234 9.19 4,236,729 1.65 8.498 113.0 58.98
Industrial 21 99,170,997 8.60 4,722,428 1.42 8.128 118.8 64.96
Mobile Home Park 2 4,358,934 0.38 2,179,467 1.40 7.326 114.8 70.03
Special Purpose 1 3,900,000 0.34 3,900,000 1.26 8.460 120.0 67.24
Self-Storage 1 3,243,231 0.28 3,243,231 2.17 7.490 118.0 60.85
Mixed Use 2 3,055,909 0.27 1,527,954 1.42 8.118 117.1 69.13
- --------- ---- --------- ---- ----- ----- -----
TOTAL/WTD. AVG. 177 $1,152,640,035 100.00% $6,512,091 1.37x 7.896% 118.3 68.88%
=============================================================================================================
===================================================================================================================================
</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. All information in this Term Sheet,
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.
This material is furnished to you by Deutsche Bank Securities, Inc. and
Goldman, Sachs & Co. and not by the issuer of the securities. Deutsche Bank
Securities, Inc. and Goldman, Sachs & Co. are acting as the lead managers and
neither of these parties are acting as agent for the issuer or its affiliates
in connection with the proposed transaction. Neither the issuer nor any of its
affiliates has prepared or taken part in the preparation of these materials and
neither makes any representation as to the accuracy of these materials.
C-11
<PAGE>
ALL INFORMATION IN THIS TERM SHEET, 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.
COLLATERAL TERM SHEET
DISTRIBUTION OF UNDERWRITTEN NCF DEBT SERVICE COVERAGE RATIOS
<TABLE>
<CAPTION>
WEIGHTED
AVERAGE WEIGHTED
PERCENTAGE OF WEIGHTED REMAINING AVERAGE
RANGE OF DEBT NUMBER OF AGGREGATE WEIGHTED AVERAGE TERM TO CUT-OFF
SERVICE COVERAGE MORTGAGE CUT-OFF DATE CUT-OFF DATE AVERAGE CUT-0FF AVERAGE MORTGAGE MATURITY DATE LTV
RATIOS LOANS BALANCE BALANCE DATE BALANCE DSCR RATE (MOS) RATIO
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1.00 - 1.10 (a) 1 $1,454,598 0.13% $1,454,598 1.01x 7.720% 199.0 83.12%
1.11 - 1.20 15 130,347,430 11.31 8,689,829 1.20 7.808 119.5 76.44
1.21 - 1.30 56 391,961,968 34.01 6,999,321 1.25 8.032 121.1 71.46
1.31 - 1.40 25 258,758,664 22.45 10,350,347 1.35 7.754 114.6 72.37
1.41 - 1.50 23 222,628,851 19.31 9,679,515 1.44 7.716 114.0 65.37
1.51 - 1.60 6 28,404,063 2.46 4,734,010 1.58 7.828 118.5 61.50
1.61 - 1.70 5 40,538,382 3.52 8,107,676 1.66 8.473 133.3 53.97
1.71 - 1.80 2 11,034,135 0.96 5,517,067 1.78 7.651 118.7 60.91
1.81 - 1.90 4 64,268,714 5.58 16,067,178 1.89 8.169 118.2 50.04
2.11 - 2.20 1 3,243,231 0.28 3,243,231 2.17 7.490 118.0 60.85
- --------- ---- --------- ---- ----- ----- -----
TOTAL/WTD. AVG. 138 $1,152,640,035 100.00% $8,352,464 1.37x 7.896% 118.3 68.88%
============================================================================================================
===================================================================================================================================
(a) Includes one CTL loan.
</TABLE>
DISTRIBUTION OF CUT-OFF DATE LOAN TO VALUE AT ORIGINATION RATIOS
<TABLE>
<CAPTION>
WEIGHTED
AVERAGE WEIGHTED
PERCENTAGE OF WEIGHTED REMAINING AVERAGE
NUMBER OF AGGREGATE WEIGHTED AVERAGE TERM TO CUT-OFF
RANGE OF CUT-OFF DATE MORTGAGE CUT-OFF DATE CUT-OFF DATE AVERAGE CUT-0FF AVERAGE MORTGAGE MATURITY DATE LTV
LOAN TO VALUE RATIOS LOANS BALANCE BALANCE DATE BALANCE DSCR RATE (MOS) RATIO
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
30.1 - 50.0 5 $83,851,804 7.27% $16,770,361 1.68x 8.204% 118.9 47.62%
50.1 - 60.0 12 96,652,522 8.39 8,054,377 1.62 8.088 125.7 56.28
60.1 - 65.0 13 137,424,665 11.92 10,571,128 1.39 7.841 118.8 61.75
65.1 - 70.0 21 146,188,574 12.68 6,961,361 1.34 7.836 115.9 67.28
70.1 - 75.0 52 455,934,399 39.56 8,767,969 1.32 7.910 117.5 72.72
75.1 - 80.0 28 182,995,515 15.88 6,535,554 1.28 7.786 117.1 78.35
80.1 - 85.0 6 24,687,096 2.14 4,114,516 1.22 7.890 123.2 80.68
85.1 - 90.0 1 24,905,460 2.16 24,905,460 1.19 7.320 120.0 86.48
- ---------- ---- ---------- ---- ----- ----- -----
TOTAL/WTD. AVG. 138 $1,152,640,035 100.00% $8,352,464 1.37x 7.896% 118.3 68.88%
==========================================================================================================
===================================================================================================================================
</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. All information in this Term Sheet,
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.
This material is furnished to you by Deutsche Bank Securities, Inc. and
Goldman, Sachs & Co. and not by the issuer of the securities. Deutsche Bank
Securities, Inc. and Goldman, Sachs & Co. are acting as the lead managers and
neither of these parties are acting as agent for the issuer or its affiliates
in connection with the proposed transaction. Neither the issuer nor any of its
affiliates has prepared or taken part in the preparation of these materials and
neither makes any representation as to the accuracy of these materials.
C-12
<PAGE>
ALL INFORMATION IN THIS TERM SHEET, 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.
COLLATERAL TERM SHEET
DISTRIBUTION OF MORTGAGE INTEREST RATES
<TABLE>
<CAPTION>
WEIGHTED
AVERAGE WEIGHTED
PERCENTAGE OF WEIGHTED REMAINING AVERAGE
NUMBER OF AGGREGATE WEIGHTED AVERAGE TERM TO CUT-0FF
RANGE OF MORTGAGE CUT-OFF DATE CUT-OFF DATE AVERAGE CUT-0FF AVERAGE MORTGAGE MATURITY DATE LTV
MORTGAGE RATES LOANS BALANCE BALANCE DATE BALANCE DSCR RATE (MOS) RATIO
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
6.5001 - 6.7500 2 $6,657,054 0.58% $3,328,527 1.46x 6.737% 108.0 60.53%
6.7501 - 7.0000 3 34,971,437 3.03 11,657,146 1.35 6.913 104.7 75.29
7.0001 - 7.2500 8 43,557,897 3.78 5,444,737 1.37 7.122 107.5 73.45
7.2501 - 7.5000 13 99,773,633 8.66 7,674,895 1.30 7.380 117.7 75.68
7.5001 - 7.7500 17 279,055,643 24.21 16,415,038 1.41 7.625 117.2 66.51
7.7501 - 8.0000 27 192,884,625 16.73 7,143,875 1.31 7.902 117.4 69.25
8.0001 - 8.2500 35 218,781,905 18.98 6,250,912 1.31 8.130 118.8 71.07
8.2501 - 8.5000 22 203,180,363 17.63 9,235,471 1.45 8.355 122.7 64.47
8.5001 - 8.7500 9 60,403,511 5.24 6,711,501 1.38 8.638 128.3 69.74
8.7501 - 9.0000 2 13,373,967 1.16 6,686,983 1.46 8.818 119.7 61.98
- ---------- ---- --------- ---- ----- ----- -----
TOTAL/WTD. AVG. 138 $1,152,640,035 100.00% $8,352,464 1.37x 7.896% 118.3 68.88%
============================================================================================================
===================================================================================================================================
</TABLE>
DISTRIBUTION OF REMAINING AMORTIZATION TERMS (a)
<TABLE>
<CAPTION>
WEIGHTED
AVERAGE WEIGHTED
PERCENTAGE OF WEIGHTED REMAINING AVERAGE
RANGE OF REMAINING NUMBER OF AGGREGATE WEIGHTED AVERAGE TERM TO CUT-0FF
AMORTIZATION TERMS MORTGAGE CUT-0FF DATE CUT-OFF DATE AVERAGE CUT-OFF AVERAGE MORTGAGE MATURITY DATE LTV
(MONTHS) LOANS BALANCE BALANCE DATE BALANCE DSCR RATE (MOS) RATIO
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Interest Only 1 $10,875,000 0.94% $10,875,000 1.90x 7.540% 120.0 52.28%
191 - 210 1 1,454,598 0.13 1,454,598 1.01 7.720 199.0 83.12
231 - 250 2 17,241,845 1.50 8,620,923 1.35 8.098 162.3 65.04
271 - 290 2 9,843,996 0.85 4,921,998 1.64 7.168 106.5 56.19
291 - 310 23 156,425,247 13.57 6,801,098 1.56 8.336 114.6 61.79
331 - 360 109 956,799,348 83.01 8,777,976 1.33 7.832 118.2 70.40
--- ----------- ----- --------- ---- ----- ----- -----
TOTAL/WTD. AVG. 138 $1,152,640,035 100.00% $8,352,464 1.37x 7.896% 118.3 68.88%
===========================================================================================================
===================================================================================================================================
</TABLE>
(a) 58 loans representing 35.90% of the Aggregate Cut-Off Date Balance accrue
interest on an Actual/360 basis but have a monthly payment calculated on a
30/360 schedule. Accordingly, the actual amortization term is longer for
these loans than the stated amortization term reflected in the table
above.
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. All information in this Term Sheet,
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.
This material is furnished to you by Deutsche Bank Securities, Inc. and
Goldman, Sachs & Co. and not by the issuer of the securities. Deutsche Bank
Securities, Inc. and Goldman, Sachs & Co. are acting as the lead managers and
neither of these parties are acting as agent for the issuer or its affiliates
in connection with the proposed transaction. Neither the issuer nor any of its
affiliates has prepared or taken part in the preparation of these materials and
neither makes any representation as to the accuracy of these materials.
C-13
<PAGE>
ALL INFORMATION IN THIS TERM SHEET, 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.
COLLATERAL TERM SHEET
DISTRIBUTION OF ORIGINAL TERMS TO MATURITY
<TABLE>
<CAPTION>
WEIGHTED
AVERAGE WEIGHTED
PERCENTAGE OF WEIGHTED REMAINING AVERAGE
NUMBER OF AGGREGATE WEIGHTED AVERAGE TERM TO CUT-OFF
RANGE OF ORIGINAL TERMS MORTGAGE CUT-OFF DATE CUT-OFF DATE AVERAGE CUT-OFF AVERAGE MORTGAGE MATURITY DATE LTV
TO MATURITY (MONTHS) LOANS BALANCE BALANCE DATE BALANCE DSCR RATE (MOS) RATIO
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
83 - 83 months 1 $6,088,038 0.53% $6,088,038 1.45x 8.250% 81.0 70.79%
84 - 120 months 130 1,106,085,840 95.96 8,508,353 1.37 7.882 116.8 68.82
121 - 180 months 6 39,011,559 3.38 6,501,927 1.35 8.236 165.5 69.85
181 - 240 months 1 1,454,598 0.13 1,454,598 1.01 7.720 199.0 83.12
- --------- ---- --------- ---- ----- ----- -----
TOTAL/WTD. AVG. 138 $1,152,640,035 100.00% $8,352,464 1.37x 7.896% 118.3 68.88%
=======================================================================================================
===================================================================================================================================
</TABLE>
DISTRIBUTION OF REMAINING TERMS TO MATURITY
<TABLE>
<CAPTION>
WEIGHTED
AVERAGE WEIGHTED
PERCENTAGE OF WEIGHTED REMAINING AVERAGE
RANGE OF REMAINING NUMBER OF AGGREGATE WEIGHTED AVERAGE TERM TO CUT-OFF
TERMS TO MATURITY MORTGAGE CUT-0FF DATE CUT-0FF DATE AVERAGE CUT-0FF AVERAGE MORTGAGE MATURITY DATE LTV
(MONTHS) LOANS BALANCE BALANCE DATE BALANCE DSCR RATE (MOS) RATIO
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C>
71 - 90 2 $17,288,038 1.50% $8,644,019 1.42x 8.574% 82.9 70.56%
91 - 110 14 134,941,454 11.71 9,638,675 1.39 7.254 104.8 71.29
111 - 120 116 966,259,484 83.83 8,329,823 1.37 7.955 118.8 68.50
131 - 150 1 1,800,000 0.16 1,800,000 1.30 8.125 132.0 72.00
171 - 190 4 30,896,460 2.68 7,724,115 1.36 8.460 179.8 68.26
191 - 210 1 1,454,598 0.13 1,454,598 1.01 7.720 199.0 83.12
- --------- ---- --------- ---- ----- ----- -----
TOTAL/WTD. AVG. 138 $1,152,640,035 100.00% $8,352,464 1.37x 7.896% 118.3 68.88%
=======================================================================================================
===================================================================================================================================
</TABLE>
DISTRIBUTION OF AMORTIZATION TYPES
<TABLE>
<CAPTION>
WEIGHTED
AVERAGE WEIGHTED
PERCENTAGE OF REMAINING AVERAGE
NUMBER OF AGGREGATE WEIGHTED TERM TO CUT-0FF
MORTGAGE CUT-0FF DATE CUT-0FF DATE AVERAGE CUT-OFF AVERAGE MATURITY DATE LTV
AMORTIZATION TYPE LOANS BALANCE BALANCE DATE BALANCE DSCR (MOS) RATIO
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balloon 109 $720,678,208 62.52% $6,611,727 1.34x 120.6 69.18%
Hyperamortizing 28 430,507,229 37.35 15,375,258 1.41 114.3 68.32%
Fully Amortizing 1 1,454,598 0.13 1,454,598 1.01 199.0 83.12%
- --------- ---- --------- ---- ----- -----
TOTAL/WTD. AVG. 138 $1,152,640,035 100.00% $8,352,464 1.37x 118.3 68.88%
=============================================================================================================================
</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. All information in this Term Sheet,
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.
This material is furnished to you by Deutsche Bank Securities, Inc. and
Goldman, Sachs & Co. and not by the issuer of the securities. Deutsche Bank
Securities, Inc. and Goldman, Sachs & Co. are acting as the lead managers and
neither of these parties are acting as agent for the issuer or its affiliates
in connection with the proposed transaction. Neither the issuer nor any of its
affiliates has prepared or taken part in the preparation of these materials and
neither makes any representation as to the accuracy of these materials.
C-14
<PAGE>
ALL INFORMATION IN THIS TERM SHEET, 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.
COLLATERAL TERM SHEET
DISTRIBUTION OF PREPAYMENT PROVISIONS
<TABLE>
<CAPTION>
WEIGHTED
AVERAGE WEIGHTED
PERCENTAGE OF WEIGHTED REMAINING AVERAGE
NUMBER OF AGGREGATE WEIGHTED AVERAGE TERM TO CUT-0FF
MORTGAGE CUT-OFF DATE CUT-0FF DATE AVERAGE CUT-OFF AVERAGE MORTGAGE MATURITY DATE LTV
PREPAYMENT PROVISION LOANS BALANCE BALANCE DATE BALANCE DSCR RATE (MOS) RATIO
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Defeasance 135 $1,103,185,001 95.71% $8,171,741 1.36x 7.915% 118.8 69.19%
> of YM or 1% UPB 2 38,580,034 3.35 19,290,017 1.43 7.448 105.3 64.56
> of YM or 1% and Defeasance 1 10,875,000 0.94 10,875,000 1.90 7.540 120.0 52.28
- ---------- ---- ---------- ---- ----- ----- -----
TOTAL/WTD. AVG. 138 $1,152,640,035 100.00% $8,352,464 1.37x 7.896% 118.3 68.88%
==========================================================================================================
====================================================================================================================================
</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. All information in this Term Sheet,
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.
This material is furnished to you by Deutsche Bank Securities, Inc. and
Goldman, Sachs & Co. and not by the issuer of the securities. Deutsche Bank
Securities, Inc. and Goldman, Sachs & Co. are acting as the lead managers and
neither of these parties are acting as agent for the issuer or its affiliates
in connection with the proposed transaction. Neither the issuer nor any of its
affiliates has prepared or taken part in the preparation of these materials and
neither makes any representation as to the accuracy of these materials.
C-15
<PAGE>
ALL INFORMATION IN THIS TERM SHEET, 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.
COLLATERAL TERM SHEET
BILTMORE FASHION PARK
LOAN INFORMATION
ORIGINAL CUT-OFF DATE
PRINCIPAL BALANCE (a): $80,000,000 $80,000,000
% OF POOL BY UPB 6.94%
NOTE DATE: June 16, 1999
INTEREST RATE: 7.68%
AMORTIZATION: 30 years
ARD DATE: 7/10/09
BORROWER/SPONSOR: The Borrower is a single purpose, bankruptcy remote
entity sponsored by the Taubman Realty Group Limited
Partnership, an affiliate of Taubman Centers, Inc., a
publicly traded Real Estate Investment Trust (NYSE:
TCO).
CALL PROTECTION: Prepayment lockout; U.S. Treasury defeasance.
CROSS-COLLATERALIZATION/
DEFAULT: No/No
ADDITIONAL FINANCING: The Borrower is permitted to incur up to $3,000,000 of
indebtedness that relates solely to financing capital
improvements, compliance with legal requirements,
tenant improvements, leasing costs and equipment
related to the Biltmore Fashion Park property, but
only if that indebtedness remains unsecured or
secured by capital leases.
CASH MANAGEMENT: Soft Lockbox in place springing to a Hard Lockbox at
the ARD date or either upon an Event of Default or if
the DSCR falls below 1.30x.
MONTHLY RESERVES: All reserves are waived unless the Soft Lockbox has
converted to a Hard Lockbox.
PROPERTY INFORMATION
SINGLE ASSET/PORTFOLIO: Single Asset
PROPERTY TYPE: Anchored Retail
LOCATION: Phoenix, Arizona
YEAR(S) BUILT / RENOVATED: 1963-1996 / 1999
THE COLLATERAL: An outdoor, regional shopping mall situated on
28.59 acres. The mall has a total of 550,949
square feet of gross leaseable area, of which
398,449 square feet serve as collateral for the
Loan. The mall is anchored by a Saks Department
Store and a Macy's Department Store. The building
containing the Macy's is not part of the
collateral for the Loan
PROPERTY MANAGEMENT: Taubman Centers, Inc.
CURRENT OCCUPANCY (6/15/99): 96%
UNDERWRITTEN NET CASH FLOW: $9,894,554
APPRAISED VALUE: $132,500,000
APPRAISAL DATE: May 5, 1999
CUT-OFF DATE LOAN/SF: $145.20
CUT-OFF DATE LTV: 60.38%
ARD BALLOON LTV: 53.79%
UWNCF DSCR: 1.43x
THREE LARGEST TENANTS
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
SQUARE PERCENTAGE OF DATE OF
FOOTAGE LEASED TOTAL LEASABLE AREA LEASE EXPIRATION
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Macy's (a) 152,500 27.68% 01/31/2013
- ---------------------------------------------------------------------------------------------
Saks Fifth Avenue 90,114 16.36% 10/31/2017
- ---------------------------------------------------------------------------------------------
Borders Books 33,416 6.07% 01/31/2004
- ---------------------------------------------------------------------------------------------
</TABLE>
(a) The Macy's building is not part of the collateral for the loan.
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. All information in this Term Sheet,
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.
This material is furnished to you by Deutsche Bank Securities, Inc. and
Goldman, Sachs & Co. and not by the issuer of the securities. Deutsche Bank
Securities, Inc. and Goldman, Sachs & Co. are acting as the lead managers and
neither of these parties are acting as agent for the issuer or its affiliates
in connection with the proposed transaction. Neither the issuer nor any of its
affiliates has prepared or taken part in the preparation of these materials and
neither makes any representation as to the accuracy of these materials.
C-16
<PAGE>
ALL INFORMATION IN THIS TERM SHEET, 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.
COLLATERAL TERM SHEET
PRIME OUTLETS AT NIAGARA FALLS
LOAN INFORMATION
ORIGINAL CUT-OFF DATE
PRINCIPAL BALANCE (a): $63,000,000 $62,873,660
% OF POOL BY UPB 5.45%
NOTE DATE: April 27, 1999
INTEREST RATE: 7.60%
AMORTIZATION: 30 years
ARD DATE: May 10, 2009
BORROWER/SPONSOR: The Borrower is a single purpose, bankruptcy remote
entity affiliated with Prime Retail, Inc., a publicly
traded Real Estate Investment Trust (NYSE: PRT).
CALL PROTECTION: Prepayment lockout; U.S. Treasury defeasance.
CROSS-COLLATERALIZATION/
DEFAULT: No/No
ADDITIONAL FINANCING: None.
CASH MANAGEMENT: Soft Lockbox in place springing to a Hard Lockbox at
the ARD Date or upon an Event of Default.
MONTHLY RESERVES: TI/LC - $61,741
Replacement - $6,665
PROPERTY INFORMATION
SINGLE ASSET/PORTFOLIO: Single Asset
PROPERTY TYPE: Anchored Retail
LOCATION: Niagara Falls, New York
YEAR BUILT / RENOVATED: 1960, 1983 - 1995 / 1996
THE COLLATERAL: A partially enclosed, factory outlet center
located on 41.3 acres. The property has a total
of 533,192 net rentable square feet and also
includes a food court. Diverse tenant mix includes
Old Navy, Saks Off Fifth Avenue, Gap, Polo/Ralph
Lauren, among others.
PROPERTY MANAGEMENT: Prime Retail, Inc.
CURRENT OCCUPANCY (3/01/99): 96%
UNDERWRITTEN NET CASH FLOW: $7,361,978
APPRAISED VALUE: $86,400,000
APPRAISAL DATE: January 30, 1999
CUT-OFF DATE LOAN/SF: $117.92
CUT-OFF DATE LTV: 72.770%
ARD BALLOON LTV: 63.59%
UWNCF DSCR: 1.36x
THREE LARGEST TENANTS
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
SQUARE PERCENTAGE OF DATE OF
TENANT FOOTAGE LEASED TOTAL LEASABLE AREA LEASE EXPIRATION
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Linens N' Things 27,175 5.10% 09/30/2005
- ---------------------------------------------------------------------------------------------
Marshall's 27,000 5.06% 11/30/2000
- ---------------------------------------------------------------------------------------------
Off 5th / Saks Fifth Avenue 20,359 3.82% 08/31/2010
- ---------------------------------------------------------------------------------------------
</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. All information in this Term Sheet,
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.
This material is furnished to you by Deutsche Bank Securities, Inc. and
Goldman, Sachs & Co. and not by the issuer of the securities. Deutsche Bank
Securities, Inc. and Goldman, Sachs & Co. are acting as the lead managers and
neither of these parties are acting as agent for the issuer or its affiliates
in connection with the proposed transaction. Neither the issuer nor any of its
affiliates has prepared or taken part in the preparation of these materials and
neither makes any representation as to the accuracy of these materials.
C-17
<PAGE>
ALL INFORMATION IN THIS TERM SHEET, 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.
COLLATERAL TERM SHEET
EQUITY INNS
LOAN/PARTICIPATION INFORMATION
ORIGINAL CUT-OFF DATE
PRINCIPAL BALANCE LOAN: $97,020,000 $96,938,368
% OF POOL BY UPB: 4.21%
NOTE DATE: June 16, 1999
INTEREST RATE: 8.37%
AMORTIZATION: 25 years
ARD DATE: July 1, 2009
BORROWER/SPONSOR: Two single purpose, bankruptcy remote entities
affiliated with Equity Inns Inc., a publicly traded
Real Estate Investment Trust (NYSE: ENN).
CALL PROTECTION: Prepayment lockout; U.S. Treasury defeasance.
RELEASE PRICE: After the lockout period, Borrowers may partially
defease the Loan to obtain the release of an
individual property. To release a property, the
Borrowers must defease 125% of the loan amount
originally allocated to the property. Further, the
UWDSCR for the remaining properties must be greater
than or equal to 1.90x.
CROSS-COLLATERALIZATION/
DEFAULT: Yes/Yes.
ADDITIONAL FINANCING: None.
CASH MANAGEMENT: Hard Lockbox.
PROPERTY INFORMATION
SINGLE ASSET/PORTFOLIO: Portfolio
PROPERTY TYPE: Hospitality
THE COLLATERAL: 5 AmeriSuites, 3 Homewood Suites, 6 Hampton Inns
and 5 Residence Inns Hospitality properties
containing a total of 2,453 rooms and located in
13 states. Each of the properties is leased to
and managed by an affiliate of either Prime
Hospitality Corp. or Interstate Hotels
Management, Inc.
SUBSTITUTION: The Borrowers may substitute "like-kind"
collateral without penalty after the prepayment
lockout period. Substitution is limited to $25
million in collateral value per substitution and
$50 million in the aggregate. Any substitution is
also subject to maintenance of a minimum LTV of
55% and receipt of confirmation from the Rating
Agencies that such substitution will not effect
the ratings for any Class.
LESSEES: Five of the properties are leased by an affiliate
of Prime Hospitality Corp., a publicly traded
company (NYSE: PDQ), which owns, manages and
franchises hotels. The Prime affiliate manages
each of the five properties.
The remaining 14 properties are leased by
affiliates of Interstate Hotels Management, Inc.,
a publicly traded company (NASDAQ: IHCO). The
Interstate affiliates manage all but three of the
properties, which are managed under contract by a
third party.
UNDERWRITTEN NET CASH
LOAN/PARTICIPATION: $17,808,512 / $8,904,256
APPRAISED VALUE
LOAN/PARTICIPATION: $196,800,000 / $98,400,000
APPRAISAL DATE: April 1, 1999
CUT-OFF DATE LOAN/ROOM
LOAN/PARTICIPATION: $39,518 / $19,759
CUT-OFF DATE LTV: 49.26%
BALLOON LTV: 40.31%
UWNCF DSCR: 1.90x
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. All information in this Term Sheet,
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.
This material is furnished to you by Deutsche Bank Securities, Inc. and
Goldman, Sachs & Co. and not by the issuer of the securities. Deutsche Bank
Securities, Inc. and Goldman, Sachs & Co. are acting as the lead managers and
neither of these parties are acting as agent for the issuer or its affiliates
in connection with the proposed transaction. Neither the issuer nor any of its
affiliates has prepared or taken part in the preparation of these materials and
neither makes any representation as to the accuracy of these materials.
C-18
<PAGE>
ALL INFORMATION IN THIS TERM SHEET, 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.
COLLATERAL TERM SHEET
EQUITY INNS
COLLATERAL DETAILS
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------
ALLOCATED CUT-OFF DATE ALLOCATED CUT-OFF
PROPERTY CITY STATE #UNITS PARTICIPATION AMOUNT DATE LOAN AMOUNT
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Residence Inn Portland Oregon 168 $5,290,544.85 $10,581,089.70
--------------------------------------------------------------------------------------------------------------
Residence Inn Princeton New Jersey 208 $4,980,805.68 $9,961,611.36
--------------------------------------------------------------------------------------------------------------
Homewood Suites Phoenix Arizona 124 $3,562,000.45 $7,124,000.90
--------------------------------------------------------------------------------------------------------------
Residence Inn Eagan Minnesota 120 $3,247,265.49 $6,494,530.98
--------------------------------------------------------------------------------------------------------------
Amerisuites Glen Allen Virginia 126 $2,702,724.05 $5,405,448.10
--------------------------------------------------------------------------------------------------------------
Residence Inn Tucson Arizona 128 $2,662,757.70 $5,325,515.40
--------------------------------------------------------------------------------------------------------------
Hampton Inn Memphis Tennessee 126 $2,373,001.70 $4,746,003.40
--------------------------------------------------------------------------------------------------------------
Residence Inn Tinton Falls New Jersey 96 $2,348,022.74 $4,696,045.48
--------------------------------------------------------------------------------------------------------------
Amerisuites Columbus Ohio 126 $2,323,043.77 $4,646,087.54
--------------------------------------------------------------------------------------------------------------
Hampton Inn Northville Michigan 125 $2,218,132.12 $4,436,264.24
--------------------------------------------------------------------------------------------------------------
Hampton Inn Overland Park Kansas 134 $2,203,144.74 $4,406,289.48
--------------------------------------------------------------------------------------------------------------
Homewood Suites San Antonio Texas 123 $2,068,258.33 $4,136,516.66
--------------------------------------------------------------------------------------------------------------
Hampton Inn Morgantown West Virginia 108 $2,023,296.19 $4,046,592.38
--------------------------------------------------------------------------------------------------------------
Amerisuites Indianapolis Indiana 126 $1,918,384.53 $3,836,769.06
--------------------------------------------------------------------------------------------------------------
Hampton Inn Kansas City Missouri 120 $1,808,477.09 $3,616,954.18
--------------------------------------------------------------------------------------------------------------
Amerisuites Overland Park Kansas 126 $1,793,489.71 $3,586,979.42
--------------------------------------------------------------------------------------------------------------
Amerisuites Memphis Tennessee 128 $1,728,544.40 $3,457,088.80
--------------------------------------------------------------------------------------------------------------
Homewood Suites Sharonville Ohio 111 $1,658,603.30 $3,317,206.60
--------------------------------------------------------------------------------------------------------------
Hampton Inn Richardson Texas 130 $1,558,687.43 $3,117,374.86
--------------------------------------------------------------------------------------------------------------
</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. All information in this Term Sheet,
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.
This material is furnished to you by Deutsche Bank Securities, Inc. and
Goldman, Sachs & Co. and not by the issuer of the securities. Deutsche Bank
Securities, Inc. and Goldman, Sachs & Co. are acting as the lead managers and
neither of these parties are acting as agent for the issuer or its affiliates
in connection with the proposed transaction. Neither the issuer nor any of its
affiliates has prepared or taken part in the preparation of these materials and
neither makes any representation as to the accuracy of these materials.
C-19
<PAGE>
ALL INFORMATION IN THIS TERM SHEET, 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.
COLLATERAL TERM SHEET
ONE COLORADO PLACE RETAIL-OFFICE
Loan Information
ORIGINAL CUT-OFF DATE
PRINCIPAL BALANCE (a): $42,670,000 $42,649,122
% OF POOL BY UPB 3.70%
NOTE DATE: June 17, 1999
INTEREST RATE: 8.29%
AMORTIZATION: 30 years
ARD DATE: May 10, 2009
BORROWER/SPONSOR: The Borrower is a single purpose, bankruptcy remote
entity.
CALL PROTECTION: Prepayment lockout; U.S. Treasury
defeasance.
CROSS-COLLATERALIZATION/ No/No
DEFAULT:
MEZZANINE LOAN: There is a $4.13 million mezzanine loan made by GMAC
Commercial Mortgage to the Borrower. The mezzanine
loan is secured by a pledge of the membership
interests in the Borrower
CASH MANAGEMENT: Hard Lockbox in place converting to a Soft Lockbox
once the Mezzanine Loan has been repaid in full. The
Soft Lockbox will revert to a Hard Lockbox at the ARD
Date or upon an Event of Default.
MONTHLY RESERVES: TI/LC - $22,850
Replacement - $2,313
PROPERTY INFORMATION
SINGLE ASSET/PORTFOLIO: Single Asset
PROPERTY TYPE: Anchored Retail / Office
LOCATION: Pasadena, California
YEAR(S) BUILT / RENOVATED: 1890-1930 / 1991-1992
THE COLLATERAL: An outdoor retail shopping, office and
entertainment complex located in the Old Town
district of Pasadena, CA. The buildings in the
complex were originally constructed during the
1890's and 1920's, and all subsequently underwent
comprehensive structural and seismic upgrades.
The complex contains 277,536 of net rentable
square feet, with major tenants including The
Gap, Banana Republic, Armani Exchange, and AMC
Theatres. In addition to the retail and office
space, the collateral also includes a parking
garage.
PROPERTY MANAGEMENT: An affiliate of the Borrower
CURRENT OCCUPANCY (5/17/99): 91%
UNDERWRITTEN NET CASH FLOW: $4,887,329
APPRAISED VALUE: $59,000,000
APPRAISAL DATE: June 10, 1999
CUT-OFF DATE LOAN/SF: $153.67
CUT-OFF DATE LTV: 72.29%
BALLOON LTV: 63.98%
UWNCF DSCR: 1.25x
THREE LARGEST TENANTS
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
SQUARE PERCENTAGE OF DATE OF
TENANT FOOTAGE LEASED TOTAL LEASABLE AREA LEASE EXPIRATION
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
AMC Theaters 47,883 17.25% 11/19/2006
- ---------------------------------------------------------------------------------------------
Crate & Barrel 26,839 9.67% 01/31/2009
- ---------------------------------------------------------------------------------------------
The Gap 15,279 5.51% 11/30/2007
- ---------------------------------------------------------------------------------------------
</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. All information in this Term Sheet,
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.
This material is furnished to you by Deutsche Bank Securities, Inc. and
Goldman, Sachs & Co. and not by the issuer of the securities. Deutsche Bank
Securities, Inc. and Goldman, Sachs & Co. are acting as the lead managers and
neither of these parties are acting as agent for the issuer or its affiliates
in connection with the proposed transaction. Neither the issuer nor any of its
affiliates has prepared or taken part in the preparation of these materials and
neither makes any representation as to the accuracy of these materials.
C-20
<PAGE>
ALL INFORMATION IN THIS TERM SHEET, 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.
COLLATERAL TERM SHEET
COMERICA BANK BUILDING
LOAN INFORMATION
ORIGINAL CUT-OFF DATE
PRINCIPAL BALANCE (a): $34,000,000 $33,660,567
% OF POOL BY UPB 2.92%
NOTE DATE: April 30, 1999
INTEREST RATE: 7.55%
AMORTIZATION: 30 years
MATURITY DATE: May 1, 2008
BORROWER/SPONSOR: Macanan Investments, LP, a special purpose entity
whose principals directly manage the subject.
CALL PROTECTION: Prepayment lockout; Greater of 1% or Yield
Maintenance.
CROSS-COLLATERALIZATION/
DEFAULT: No/No
MEZZANINE LOAN: There is a $4.2 million mezzanine loan made by German
American Capital Corporation to the principals of the
Borrower and Vanderson Construction, Inc. The
mezzanine loan is secured by a pledge of partnership
interests in the Borrower and a pledge of shareholder
interests in the general partner of the Borrower.
CASH MANAGEMENT: Hard Lockbox in place.
MONTHLY RESERVES: TI/LC - $29,214
Replacement - $3,662
PROPERTY INFORMATION
SINGLE ASSET/PORTFOLIO: Single Asset
PROPERTY TYPE: Office
LOCATION: San Jose, California
YEAR BUILT: 1983
THE COLLATERAL: A twelve-story, 213,575 square foot office tower
with an attached parking garage located in San
Jose, California. The two largest tenants are
Comerica Bank and the State of California, with
the 29 remaining tenants reflecting a diverse mix
of professional, service, and technology-oriented
businesses. In addition to the office building,
the collateral also includes a parking garage.
PROPERTY MANAGEMENT: Macanan Marketing, Inc., an affiliate of the
Borrower.
CURRENT OCCUPANCY (4/30/99): 99%
UNDERWRITTEN NET CASH FLOW: $4,103,369
APPRAISED VALUE: $51,600,000
APPRAISAL DATE: April 29, 1999
CUT-OFF DATE LOAN/SF: $157.61
CUT-OFF DATE LTV: 65.23%
BALLOON LTV: 58.31%
UWNCF DSCR: 1.43x
THREE LARGEST TENANTS
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
SQUARE PERCENTAGE OF DATE OF
TENANT FOOTAGE LEASED TOTAL LEASEABLE AREA LEASE EXPIRATION
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Comerica Bank 43,213 20.23% 01/31/2003
- ---------------------------------------------------------------------------------------------
State of California 32,424 15.18% 09/30/2011
- ---------------------------------------------------------------------------------------------
Ferrari, Olsen and Ottoboni 14,924 6.99% 03/31/2002
- ---------------------------------------------------------------------------------------------
</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. All information in this Term Sheet,
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.
This material is furnished to you by Deutsche Bank Securities, Inc. and
Goldman, Sachs & Co. and not by the issuer of the securities. Deutsche Bank
Securities, Inc. and Goldman, Sachs & Co. are acting as the lead managers and
neither of these parties are acting as agent for the issuer or its affiliates
in connection with the proposed transaction. Neither the issuer nor any of its
affiliates has prepared or taken part in the preparation of these materials and
neither makes any representation as to the accuracy of these materials.
C-21
<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
1999-C3 (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, Cedelbank 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. Terms used
but not defined in this Annex D have the meanings assigned to them in the
prospectus supplement and the prospectus.
Secondary market trading between investors holding global securities
through Cedelbank 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 Cedelbank or Euroclear and DTC
participants holding certificates will be effected on a delivery-against-payment
basis through the respective depositaries of Cedelbank 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, Cedelbank 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 Cedelbank 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 Cedelbank and/or Euroclear Participants. Secondary market
trading between Cedelbank participants or Euroclear participants will be settled
using the procedures applicable to conventional eurobonds in same-day funds.
Trading between DTC seller and Cedelbank or Euroclear purchaser. When
global securities are to be transferred from the account of a DTC participant to
the account of a Cedelbank participant or a Euroclear participant, the purchaser
will send instructions to Cedelbank or Euroclear through a
D-1
<PAGE>
Cedelbank participant or Euroclear participant at least one business day before
settlement. Cedelbank 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 Cedelbank
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 Cedelbank or Euroclear cash debit will be valued instead as of the actual
settlement date.
Cedelbank 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 Cedelbank or Euroclear. Under
this approach, they may take on credit exposure to Cedelbank or Euroclear until
the global securities are credited to their accounts one day later.
As an alternative, if Cedelbank or Euroclear has extended a line of credit
to them, Cedelbank 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, Cedelbank 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 Cedelbank 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 Cedelbank 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 Cedelbank or Euroclear seller and DTC purchaser. Due to
time zone differences in their favor, Cedelbank 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 Cedelbank or Euroclear through a Cedelbank participant or
Euroclear participant at least one business day before settlement. In these
cases, Cedelbank 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 Cedelbank participant or
Euroclear participant the following day, and receipt of the cash proceeds in the
Cedelbank 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 Cedelbank 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 Cedelbank participant's or Euroclear
participant's account would instead be valued as of the actual settlement date.
Finally, day traders that use Cedelbank or Euroclear and that purchase global
securities from DTC participants for delivery to Cedelbank 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 Cedelbank or Euroclear for one day (until the
purchase side of the day trade is reflected in their Cedelbank 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 before settlement, which would give the global securities
sufficient time to be reflected in their Cedelbank or Euroclear account 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 before the value date for the sale to the Cedelbank participant or
Euroclear participant.
U.S. FEDERAL INCOME TAX DOCUMENTATION REQUIREMENTS
A beneficial owner of global securities holding securities through
Cedelbank 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 (1) 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 (2) 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 a citizen or resident of the United States, a
corporation or partnership (unless, in the case of a partnership, Treasury
regulations are adopted that provide otherwise) created or organized in or under
the laws of the United States, any State thereof or the District of Columbia,
including an entity treated as a corporation or partnership for federal income
tax purposes, an estate whose income is subject to United States federal 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 such trust, and
one or more such U. S. Persons have the authority to control all substantial
decisions of such trust (or, to the extent provided in applicable Treasury
regulations, certain trusts in existence on August 20, 1996
D-3
<PAGE>
which are eligible to elect to be treated as U.S. Persons). 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-4
<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 November 5, 1998
<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) 328-3164.
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., an
indirect 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 SERVICER............. 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
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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.
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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".
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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 significant
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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 a foreclosure of the related Senior Liens to satisfy
fully both the Senior Liens and the Mortgage Loan. In
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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, 12 times the monthly payment in effect
at the end of such period. The Underwritten Cash Flow of a Mortgaged
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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.
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.
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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 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
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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".
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
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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.
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
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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, 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.
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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 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
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(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 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
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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 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
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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 an indirect 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) 328-3164. 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 that any Prepayment Interest Shortfalls, as described under "Yield and
Maturity Considerations--Certain Shortfalls in Collections of
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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.
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
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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
(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.
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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 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.
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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 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
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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 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
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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 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
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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 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
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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 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
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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 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
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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 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:
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(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
(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;
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(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;
(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
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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 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.
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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 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.
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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 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
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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.
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.
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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 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
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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 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
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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.
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
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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".
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.
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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, 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.
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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 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
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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.
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
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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 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
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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 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.
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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 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.
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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" 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
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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 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.
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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.
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
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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 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.
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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.
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
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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 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.
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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 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
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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.
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.
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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 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".
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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 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
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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, 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.
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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 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."
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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.
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.
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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 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
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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.
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
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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.
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
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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".
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
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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 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
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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 (whether a
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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 similar to that described for taking account of
original issue discount on REMIC Regular Certificates. See
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"--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 constant yield. The OID
Regulations suggest that no prepayment assumption is appropriate in computing
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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 method, (ii) in the case
of a Mortgage Loan issued without original issue discount, in an amount that
bears the
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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
regulations or published rulings under Section 1286 of the Code have been issued
and some uncertainty
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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.
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
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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 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
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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 Credit Rating Co. or Fitch IBCA, Inc. 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
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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 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.
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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 Depositor or the underwriters may sell
certain of the Certificates to affiliates of the Depositor. In any such case,
the related Prospectus Supplement will identify any such affiliate and the
method or methods by which such affiliate may resell such Certificates. 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.
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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.
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INDEX OF PRINCIPAL TERMS
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
401(c) Regulations ..................................... 84
Accrual Certificates ................................... 8
Accrued Certificate Interest ........................... 26
Act .................................................... 54
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 ...................................... 31
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 .................................................... 21
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
DOL .................................................... 81
DTC .................................................... 25
Due Dates .............................................. 17
Due Period ............................................. 20
Equity Participation ................................... 17
ERISA .................................................. 10
Excess Funds ........................................... 23
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
</TABLE>
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<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Insurance Proceeds ...................... 38
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
Parties in Interest ..................... 81
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
</TABLE>
90
<PAGE>
<TABLE>
<CAPTION>
PAGE
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<S> <C>
REMIC Certificates ............................... 58
REMIC Provisions ................................. 58
REMIC Regular Certificates ....................... 10
REMIC Regulations ................................ 58
REMIC Residual Certificates ...................... 10
REO Property ..................................... 36
Restricted Group ................................. 82
Senior Certificates .............................. 7
Senior Liens ..................................... 14
Servicer ......................................... 5
SMMEA ............................................ 10
SPA .............................................. 21
Special Servicer ................................. 5
Stripped Interest Certificates ................... 7
Stripped Principal Certificates .................. 7
Subordinate Certificates ......................... 7
Sub-Servicer ..................................... 36
Sub-Servicing Agreement .......................... 37
Tax Exempt Investor .............................. 85
Tiered REMICs .................................... 59
Title V .......................................... 56
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>
"GMAC99C3.xls" is a Microsoft Excel*, Version 5.0 spreadsheet that provides
in electronic format certain information shown in Annex A in the Prospectus
Supplement. In addition, the spreadsheet provides certain information detailing
the changes in the amount of monthly payments with regard to certain mortgage
loans.
Open the file as you would normally open a spreadsheet in Microsoft Excel.
After the file is opened, a screen will appear requesting a password. Please
"click" the "read only" option. At that point, a securities law legend will be
displayed. READ THE LEGEND CAREFULLY. To view the data, see the worksheets
labeled "Characteristics" and "MF Schedule," respectively.
*Microsoft Excel is a registered trademark of Microsoft Corporation. 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 in this prospectus
supplement or therein is correct as of any time since the date of this
prospectus.
<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 in this
prospectus supplement or therein is correct as of any time since the date of
this prospectus.
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
------
<S> <C>
Summary ............................................... S-6
Risk Factors .......................................... S-12
Description of the Mortgage Pool ...................... S-28
Servicing of the Mortgage Loans ....................... S-51
Description of the Certificates ....................... S-60
Yield and Maturity Considerations ..................... S-82
Federal Income Tax Consequences ....................... S-97
Method of Distribution ................................ S-100
Legal Matters ......................................... S-101
Ratings ............................................... S-101
Legal Investment ...................................... S-102
ERISA Considerations .................................. S-102
Index of Significant Definitions ...................... S-104
Annex A -- Characteristics of the Mortgage Loans ...... A-1
Annex B -- Form of Statement to Certificateholders
and Servicer Reports ............................... B-1
Annex C -- Structural and Collateral Term Sheet ....... C-1
Annex D -- Global Clearance, Settlement and Tax
Documentation Procedures ........................... D-1
PROSPECTUS
Prospectus Supplement ................................. 3
Available Information ................................. 3
Incorporation of 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
Index of Principal Terms .............................. 89
</TABLE>
$1,031,610,000
(Approximate)
GMAC COMMERCIAL
MORTGAGE SECURITIES, INC.
MORTGAGE PASS-THROUGH
CERTIFICATES, SERIES 1999-C3
-----------------------------------------------------
PROSPECTUS SUPPLEMENT
-----------------------------------------------------
DEUTSCHE BANC ALEX. BROWN
GOLDMAN, SACHS & CO.
NEWMAN AND ASSOCIATES, INC.
as a member of the selling party
August , 1999
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