<PAGE>
Filed Pursuant to Rule 424(b)(5)
Registration File No.: 333-74299
THE INFORMATION IN THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS
IS NOT COMPLETE AND MAY BE AMENDED. WE MAY NOT SELL THESE SECURITIES UNTIL WE
DELIVER A FINAL PROSPECTUS SUPPLEMENT AND ACCOMPANYING PROSPECTUS. THIS
PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS ARE NOT AN OFFER TO SELL
NOR ARE THEY SEEKING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE
OFFER OR SALE IS NOT PERMITTED.
Subject to Completion, Dated July 31, 2000
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED JULY 31, 2000
$698,318,000 (APPROXIMATE)
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
Depositor
GMAC COMMERCIAL MORTGAGE CORPORATION
Servicer
SERIES 2000-C2 MORTGAGE PASS-THROUGH CERTIFICATES
YOU SHOULD CONSIDER CAREFULLY THE RISK FACTORS BEGINNING ON PAGE S-16 IN THIS
PROSPECTUS SUPPLEMENT AND PAGE 6 IN THE PROSPECTUS.
The certificates represent interests only in the trust created for Series
2000-C2. They do not represent interests in or obligations of GMAC Commercial
Mortgage Securities, Inc., GMAC Commercial Mortgage Corporation or any of their
affiliates.
This prospectus supplement may be used to offer and sell the offered
certificates only if accompanied by the prospectus.
THE CERTIFICATES WILL CONSIST OF:
o The six classes of offered certificates described in the table on page S-5.
o Thirteen additional classes of private certificates, twelve of which are
subordinated to, and provide credit enhancement for, the offered
certificates. The private certificates are not offered by this prospectus
supplement.
THE MORTGAGE ASSETS UNDERLYING THE CERTIFICATES WILL INCLUDE:
o A pool of 128 fixed rate, monthly pay mortgage loans secured by first
priority liens on 153 commercial and multifamily residential properties.
The mortgage loan pool will have an initial balance of approximately
$684,220,240.
o A multifamily mortgage participation certificate issued and guaranteed by
the Federal Home Loan Mortgage Corporation or "Freddie Mac". This Freddie
Mac Multifamily Gold PC will have an initial principal balance of
$89,540,000.
CREDIT ENHANCEMENT:
o The subordination of certificates other than the Class A-1 and A-2
certificates will provide credit enhancement to the Class A-1 and A-2
certificates. Each class of subordinated certificates will provide credit
enhancement to subordinated certificates with earlier alphabetical class
designations.
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.
FREDDIE MAC IS NOT RESPONSIBLE FOR THE ACCURACY OR COMPLETENESS OF THE
INFORMATION INCLUDED IN THIS PROSPECTUS SUPPLEMENT RELATING TO THE MORTGAGE
LOANS UNDERLYING THE FREDDIE MAC MULTIFAMILY GOLD PC.
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' commission 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
GOLDMAN, SACHS & CO. DEUTSCHE BANC ALEX. BROWN
AUGUST , 2000
<PAGE>
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
Mortgage Pass-Through Certificates, Series 2000-C2
WASHINGTON
4 PROPERTIES
$10,809,239
1.40% OF TOTAL
IDAHO
5 PROPERTIES
$4,458,627
0.58% OF TOTAL
NEBRASKA
1 PROPERTY
$2,972,079
0.38% OF TOTAL
MISSOURI
2 PROPERTIES
$4,568.950
0.59% OF TOTAL
MINNESOTA
2 PROPERTIES
$20,145,106
2.60% OF TOTAL
ILLINOIS
7 PROPERTIES
$32,937,338
4.26% OF TOTAL
MICHIGAN
4 PROPERTIES
$27,098,257
3.50% OF TOTAL
INDIANA
3 PROPERTIES
$9,070.547
1.17% OF TOTAL
OHIO
2 PROPERTIES
$4,929,744
0.64% OF TOTAL
PENNSYLVANIA
17 PROPERTIES
$25,182,754
3.25% OF TOTAL
NEW HAMPSHIRE
2 PROPERTIES
$9,077,638
1.17% OF TOTAL
MASSACHUSETTS
1 PROPERTY
$18,463,148
2.39% OF TOTAL
CONNECTICUT
3 PROPERTIES
$15,384,483
1.99% OF TOTAL
NEW YORK
2 PROPERTIES
$30,147,283
3,90% OF TOTAL
NEW JERSEY
16 PROPERTIES
$123,910,461
16.01% OF TOTAL
DISTRICT OF COLUMBIA
3 PROPERTIES
$11,888,463
1.54% OF TOTAL
DELAWARE
1 PROPERTY
$3,989,267
0.52% OF TOTAL
MARYLAND
5 PROPERTIES
$26,911,176
3.48% OF TOTAL
VIRGINIA
10 PROPERTIES
$34,061,593
4.40% OF TOTAL
NORTH CAROLINA
6 PROPERTIES
$17,610,646
2.28% OF TOTAL
GEORGIA
5 PROPERTIES
$14,116,140
1.82% OF TOTAL
FLORIDA
7 PROPERTIES
$23,834,309
3.08% OF TOTAL
ALABAMA
1 PROPERTY
$3,973,509
0.51% OF TOTAL
OKLAHOMA
2 PROPERTIES
$8,473,739
1.10% OF TOTAL
TEXAS
11 PROPERTIES
$40,021,333
5.17% OF TOTAL
KANSAS
2 PROPERTIES
$14,686,280
1.90% OF TOTAL
NEW MEXICO
1 PROPERTY
$9,924,254
1.28% OF TOTAL
COLORADO
5 PROPERTIES
$21,976,894
2.84% OF TOTAL
ARIZONA
5 PROPERTIES
$25,740,633
3.33% OF TOTAL
NEVADA
7 PROPERTIES
$28,684,674
3.71% OF TOTAL
CALIFORNIA
16 PROPERTIES
$148,711,704
19.22% OF TOTAL
DISTRIBUTION OF PROPERTY TYPES
MULTIFAMILY 30.05%
RETAIL 29.51%
OFFICE 24.02%
LODGING 7.95%
INDUSTRIAL 7.71%
MIXED USE 0.41%
SELF-STORAGE 0.22%
MOBILE HOME PARK 0.13%
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 the properties' allocated principal amounts.
The information in this map includes the mortgage loans and
mortgaged properties underlying the Freddie Mac Multifamily Gold PC.
[ ] [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 OR EQUAL TO] 10.01%
OF INITIAL POOL BALANCE
<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.
THE PROSPECTUS AND THE PROSPECTUS SUPPLEMENT, TOGETHER, PROVIDE A
DESCRIPTION OF THE MATERIAL TERMS OF YOUR CERTIFICATES. YOU SHOULD RELY ON THE
INFORMATION IN THE PROSPECTUS SUPPLEMENT TO THE EXTENT IT PROVIDES A MORE
SPECIFIC DESCRIPTION OF YOUR CERTIFICATES.
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.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
SUMMARY OF SERIES
2000-C2 MORTGAGE
PASS-THROUGH
CERTIFICATES AND
MORTGAGE ASSET POOL
CHARACTERISTICS ......................... S-5
SUMMARY OF SERIES
2000-C2 TRANSACTION ..................... S-7
Relevant Parties and Important
Dates ............................... S-7
The Mortgage Assets .................... S-7
The Mortgage Loans ..................... S-8
The Sellers ............................ S-8
Geographic Concentrations of
the Mortgaged Properties ............ S-8
Property Types ......................... S-9
Prepayment Protection
Provided by the Mortgage
Loans ............................... S-9
Payment Terms of the
Mortgage Loans ...................... S-9
The Freddie Mac Multifamily
Gold PC ............................. S-9
The Certificates ....................... S-10
Certificate Designations ............... S-10
Initial Certificate Balances of
the Certificates .................... S-10
Distributions on the Offered
Certificates ........................ S-10
Subordination of Classes of
Certificates ........................ S-11
Allocation of Losses and
Expenses to Classes of
Certificates ........................ S-12
Advances Made by the Servicer
and the Trustee ..................... S-12
Optional Termination of the
Trust ............................... S-13
Book-Entry Registration ................ S-13
Denominations .......................... S-13
Yield and Prepayment
Considerations ...................... S-13
Legal Investment in the
Certificates ........................ S-14
ERISA Considerations for
Certificateholders .................. S-14
Tax Status of the Certificates ......... S-14
Ratings on the Certificates ............ S-14
RISK FACTORS ............................... S-16
</TABLE>
S-2
<PAGE>
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
DESCRIPTION OF THE
MORTGAGE ASSETS ........................ S-41
Calculations of Interest ............ S-41
Balloon Loans ....................... S-41
ARD Loans ........................... S-41
Amortization of Principal ........... S-42
Due Dates ........................... S-42
Defeasance .......................... S-43
Prepayment Provisions ............... S-44
Related Borrowers,
Cross-Collateralized
Mortgage Loans and
Mortgage Loans
Collateralized by Multiple
Properties ....................... S-45
Due-on-Sale
and Due-on-Encumbrance
Provisions ....................... S-45
Secured Subordinate Financing........ S-45
Unsecured Subordinate and
Mezzanine Financing .............. S-46
Ground Leases ....................... S-46
Loan Documentation .................. S-47
Significant Mortgage Assets ......... S-47
The Sellers ......................... S-58
Underwriting Matters ................ S-58
Hazard, Liability and Other
Insurance ........................ S-60
Earnouts and Additional
Collateral Loans ................. S-60
Assignment of the Mortgage
Loan; Repurchases and
Substitutions .................... S-61
Representations and
Warranties; Repurchases .......... S-63
Pool Characteristics; Changes in
Mortgage Loan Pool ............... S-66
SERVICING OF THE
MORTGAGE LOANS ......................... S-66
The Servicer ........................ S-67
Servicing Standard .................. S-67
Specially Serviced Mortgage
Loans ............................ S-67
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Termination of the Servicer for
Specially Serviced Mortgage
Loans and REO Properties ......... S-69
Servicing and Other
Compensation and Payment
of Expenses ...................... S-70
Modifications, Waivers,
Amendments and Consents .......... S-73
Enforcement of ARD Loans ............ S-75
Sale of Defaulted Mortgage
Loans ............................ S-75
REO Properties ...................... S-75
Inspections; Collection of
Operating Information ............ S-76
DESCRIPTION OF THE
CERTIFICATES ........................... S-78
Denominations ....................... S-78
Book-Entry Registration of the
Offered Certificates ............. S-79
Certificate Balances and
Notional Amounts ................. S-81
Pass-Through Rates .................. S-82
Distributions ....................... S-83
Distributions of Prepayment
Premiums ......................... S-86
Distributions of Excess Interest..... S-87
Distributions of Excess
Liquidation Proceeds ............. S-87
Treatment of REO Properties ......... S-87
Interest Reserve Account ............ S-87
Subordination; Allocation of
Losses and Expenses .............. S-88
P&I Advances ........................ S-89
Appraisal Reductions ................ S-91
Reports to Certificateholders;
Available Information ............ S-92
Information Available
Electronically ................... S-95
Other Information ................... S-96
Voting Rights ....................... S-96
Termination; Retirement of
Certificates ..................... S-97
The Trustee ......................... S-97
YIELD AND MATURITY
CONSIDERATIONS ......................... S-98
</TABLE>
S-3
<PAGE>
<TABLE>
<CAPTION>
PAGE
------
<S> <C>
Yield Considerations ............ S-98
Factors that Affect the Rate
and Timing of Payments and
Defaults ..................... S-100
Delay in Payment of
Distributions ................ S-100
Unpaid Distributable Certificate
Interest ..................... S-100
Weighted Average Life ........... S-100
Price/Yield Tables .............. S-107
FEDERAL INCOME TAX
CONSEQUENCES ....................... S-111
Original Issue Discount and
Premium ...................... S-111
New Withholding Regulations ..... S-113
Characterization of Investments
in Offered Certificates ...... S-113
METHOD OF DISTRIBUTION............... S-113
LEGAL MATTERS ....................... S-115
RATINGS ............................. S-115
LEGAL INVESTMENT .................... S-116
ERISA CONSIDERATIONS ................ S-116
GLOSSARY ............................ S-118
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
SHEETS ........................... C-1
ANNEX D--GLOBAL
CLEARANCE, SETTLEMENT
AND TAX
DOCUMENTATION
PROCEDURES ....................... D-1
</TABLE>
S-4
<PAGE>
SUMMARY OF SERIES 2000-C2 MORTGAGE PASS-THROUGH
CERTIFICATES AND MORTGAGE ASSET POOL CHARACTERISTICS
SERIES 2000-C2 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/S&P AMOUNT (1) SUPPORT (5) RATE (IN YEARS) (MONTH/YEAR)
------- ----------- -------------------- ------------- --------- --------------- -------------
<S> <C> <C> <C> <C> <C> <C>
X (9) (2) N/A (3)
A-1 AAA/AAA $123,801,000 21.250% %(4) 5.62 9/00-4/09
A-2 AAA/AAA $485,535,000 21.250% %(8) 9.56 4/09-6/10
B AA/AA $30,950,000 17.250% %(8) 9.83 6/10-6/10
C A/A $28,049,000 13.625% %(8) 9.86 6/10-7/10
D A-/A- $10,639,000 12.250% %(8) 9.91 7/10-7/10
E BBB/BBB $19,344,000 9.750% %(8) 9.91 7/10-7/10
F (9)
G (9)
H (9)
J (9)
K (9)
L (9)
M (9)
N (9)
O (9)
</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 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. The initial pool balance is equal to the initial
balance of the mortgage loan pool plus the initial principal balance of
the Freddie Mac Multifamily Gold PC.
(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 August 2033.
S-5
<PAGE>
(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 the specified fixed rate or weighted average net mortgage rate.
(9) This class is not offered by this prospectus supplement.
The following table shows 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 2000. The information in this table includes the two
mortgage loans and five mortgaged properties underlying the Freddie Mac
Multifamily Gold PC.
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 2000 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.
SERIES 2000-C2 MORTGAGE ASSET POOL CHARACTERISTICS
<TABLE>
<CAPTION>
CHARACTERISTICS ENTIRE MORTGAGE ASSET POOL
----------------------------------------------------------- ---------------------------
<S> <C>
Initial pool balance .................................. $ 773,760,240
Number of mortgage loans .............................. 130
Number of mortgaged properties ........................ 158
Average balance as of the cut-off date ................ $ 5,952,002
Range of mortgage rates
as of the cut-off date .............................. 7.38% to 9.50%
Weighted average mortgage rate ........................ 8.409%
Weighted average remaining term to maturity or
anticipated repayment date .......................... 114.9 months
Weighted average debt service coverage ratio .......... 1.34x
Weighted average loan-to-value ratio .................. 70.82%
</TABLE>
----------
NOTE: The mortgage loans underlying the Freddie Mac Multifamily Gold PC have a
cut-off date balance of $89,540,000 and a mortgage rate of 8.10%. If the
mortgage loans and mortgaged properties underlying the Freddie Mac Multifamily
Gold PC are excluded (leaving an initial pool balance of $684,220,240), the
weighted average mortgage rate would be 8.450%, the weighted average debt
service coverage ratio would be 1.36x and the weighted average loan-to-value
ratio would be 69.67%. The calculation of loan-to-value ratios and debt service
coverage ratios is described in Annex A to this prospectus supplement.
S-6
<PAGE>
SUMMARY OF SERIES 2000-C2 TRANSACTION
This summary highlights selected information from this document. To understand
all of the terms of the offered certificates, you should read carefully this
entire document and the accompanying prospectus.
<TABLE>
<S> <C> <C>
RELEVANT PARTIES AND IMPORTANT DATES
TITLE OF SERIES:Series 2000-C2 Mortgage CUT-OFF DATES: August 1,
Pass-Through Certificates August 5 and August 10, 2000
THE ISSUER: GMAC Commercial Mortgage DISTRIBUTION DATE: The 16th
Securities, Inc. Series 2000-C2 day of each month or, if the 16th
Trust formed to issue the day is not a business day, the
mortgage pass-through immediately succeeding business
certificates and to acquire the day, beginning on September 18,
mortgage loan pool. 2000.
DEPOSITOR: GMAC Commercial Mortgage CLOSING DATE: On or about
Securities, Inc. August , 2000.
200 Witmer Road
Horsham, Pennsylvania
19044-8015
(215) 328-4622 DETERMINATION DATE: The 5th
day of each month or, if the 5th
day is not a business day, the
SELLERS: GMAC Commercial Mortgage immediately succeeding business
Corporation; German American day.
Capital Corporation; and
Goldman Sachs Mortgage
Company
SERVICER: GMAC Commercial Mortgage COLLECTION PERIOD: For any
Corporation distribution date, the period that
begins immediately following the
determination date in the prior
calendar month and continues
through and includes the
determination date in the
TRUSTEE: Wells Fargo Bank calendar month in which that
Minnesota, N.A. distribution date occurs. The first
collection period, however, for
each mortgage loan begins
immediately following its cut-off
date.
</TABLE>
THE MORTGAGE ASSETS
The mortgage assets in the trust fund consist of the mortgage loan pool and
the Freddie Mac Multifamily Gold PC. Except where otherwise indicated, all
references to the mortgage loans and mortgaged properties in this prospectus
supplement include the mortgage loans and mortgaged properties underlying the
Freddie Mac Multifamily Gold PC.
In this prospectus supplement, the percentage of the initial pool balance
refers to the principal balance of the mortgage loans or the allocated loan
S-7
<PAGE>
amount secured by a mortgaged property. The initial principal balance of the
mortgage loans is equal to their unpaid aggregate principal balances as of
their cut-off dates, after taking into account all payments of principal due on
or before that date, whether or not received. All mortgage information in this
prospectus supplement is approximate and depends upon the final composition of
the mortgage loans sold to the trust.
Annex A to this prospectus supplement provides characteristics of the mortgage
loans on a loan-by-loan basis. Also see "Description of the Mortgage Assets" in
this prospectus supplement.
THE MORTGAGE LOANS
The mortgage loans are secured by first mortgage liens on real property
interests, which may be fee ownership interests or ground lease interests. The
mortgaged properties are used for commercial or multifamily residential
purposes.
THE SELLERS
GMAC Commercial Mortgage Corporation originated or acquired 68 of the mortgage
loans, including the two mortgage loans underlying the Freddie Mac Multifamily
Gold PC, representing 44.31% of the initial pool balance. German American
Capital Corporation originated or acquired 31 of the mortgage loans,
representing 31.90% of the initial pool balance. Archon Financial, L.P.
originated 31 of the mortgage loans, representing 23.79% of the initial pool
balance, all of which were acquired by Goldman Sachs Mortgage Company. The
mortgage loans were originated between October 30, 1997 and June 30, 2000.
Each seller will make representations and warranties regarding the mortgage
loans sold by it and deposited in the trust fund. The depositor will assign
these representations and warranties to the trustee. No representations and
warranties regarding the mortgage loans underlying the Freddie Mac Multifamily
Gold PC will be made for the benefit of the trust fund, although certain
representations and warranties will be made for the benefit of Freddie Mac in
connection with the issuance of the participation certificate.
GEOGRAPHIC CONCENTRATIONS OF THE
MORTGAGED PROPERTIES
The mortgaged properties are located in 30 states and the District of Columbia.
The following table lists the number and percentage of mortgaged properties
that are located in the five states with the highest concentrations of
mortgaged properties.
<TABLE>
<CAPTION>
PERCENTAGE
NUMBER OF OF
MORTGAGED INITIAL POOL
PROPERTY STATE PROPERTIES BALANCE
-------------------- ------------ -------------
<S> <C> <C>
California ......... 16 19.22%
New Jersey ......... 16 16.01
Texas .............. 11 5.17
Virginia ........... 10 4.40
Illinois ........... 7 4.26
</TABLE>
If the mortgage loans and mortgaged properties underlying the Freddie Mac
Multifamily Gold PC are excluded (leaving an initial pool balance of
$684,220,240), there would be 11 mortgaged properties in the State of New
Jersey securing mortgage loans that represent 5.02% of such reduced initial
pool balance.
S-8
<PAGE>
PROPERTY TYPES
The following table lists the number and percentage of mortgaged properties
that are operated for each indicated purpose.
<TABLE>
<CAPTION>
PERCENTAGE
NUMBER OF OF INITIAL
MORTGAGED POOL
PROPERTY TYPE PROPERTIES BALANCE
-------------------------- ------------ -----------
<S> <C> <C>
Multifamily .............. 54 30.05%
Retail ................... 51 29.51
Office ................... 26 24.02
Lodging .................. 9 7.95
Industrial ............... 13 7.71
Mixed Use ................ 1 0.41
Self-Storage ............. 3 0.22
Mobile Home Park ......... 1 0.13
</TABLE>
If the mortgage loans and mortgaged properties underlying the Freddie Mac
Multifamily Gold PC are excluded (leaving an initial pool balance of
$684,220,240), there would be 49 multifamily mortgaged properties securing
mortgage loans that represent 20.89% of such reduced initial pool balance.
PREPAYMENT PROTECTION PROVIDED BY THE
MORTGAGE LOANS
The terms of each of the mortgage loans restrict the ability of the borrower to
prepay the mortgage loan. All but 8 of the mortgage loans permit defeasance
after a lockout period. One of such defeasance loans also has a subsequent
yield maintenance period, which is followed by a 1% prepayment penalty period.
Except with respect to 3 mortgage loans, representing 1.24% of the initial
mortgage pool balance, the defeasance may not occur prior to the second
anniversary of the closing date of the issuance of the certificates. For a
description of defeasance provisions in the mortgage loans, see "Description of
the Mortgage Assets----Defeasance."
PAYMENT TERMS OF THE MORTGAGE LOANS
All the mortgage loans accrue interest at a fixed rate. However, the rate on a
mortgage loan with an anticipated repayment date may increase if that mortgage
loan is not repaid in full by its anticipated repayment date. See "Description
of the Mortgage Assets----Calculations of Interest," and "----ARD Loans" in
this prospectus supplement.
THE FREDDIE MAC MULTIFAMILY GOLD PC
In addition to the mortgage loan pool, the trust fund includes a multifamily
mortgage participation certificate issued by the Federal Home Loan Mortgage
Corporation or "Freddie Mac". The Freddie Mac Multifamily Gold PC has an
initial principal balance of $89,540,000 and a coupon rate of 7.265% per annum.
The participation certificate represents an undivided beneficial ownership
interest in a discrete pool of two mortgage loans secured by five multifamily
mortgaged properties located in New Jersey. Under the terms of the
participation certificate, Freddie Mac guarantees the timely payment of
interest at the certificate's coupon rate, the timely payment of scheduled
principal and the ultimate payment of principal on the underlying mortgage
loans by the payment date occurring in the same month as the maturity date of
the loans. See "Description of the Mortgage Assets--Significant Mortgage
Assets--The Freddie Mac Multifamily Gold PC" in this prospectus supplement.
S-9
<PAGE>
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
interests in the trust. The offered certificates are the only securities
offered through this prospectus supplement. The private certificates are not
offered by this prospectus supplement.
CERTIFICATE DESIGNATIONS
We refer to the certificates by the following designations:
<TABLE>
<S> <C>
Designation Related Class(es)
Offered Classes A-1, A-2, B, C,
certificates D and E
Senior Classes X, A-1, and A-2
certificates
Interest-only Class X
certificates
Subordinate Classes B, C, D, E, F, G,
certificates H, J, K, L, M, N and O
Residual Classes R-I, R-II and
certificates R-III
REMIC Classes X, A-1, A-2, B,
regular C, D, E, F, G, H, J, K,
certificates L, M, N and O
</TABLE>
INITIAL CERTIFICATE BALANCES OF THE
CERTIFICATES
The aggregate principal balance of the certificates issued by the trust will be
approximately $773,760,240, but may vary upward or downward by no more than 5%.
The senior certificates will comprise approximately 78.75% and the subordinate
certificates will comprise approximately 21.25% of the initial aggregate
certificate balance of the certificates.
The Class X certificates will not have a certificate balance. The Class X
certificates will have a notional amount and will accrue interest on that
notional amount. The Class X certificates will not receive any distributions of
principal.
DISTRIBUTIONS ON THE OFFERED CERTIFICATES
The trustee will make distributions to certificateholders on each distribution
date in the order of priority described below.
Until paid in full, each class of offered certificates will be entitled to
receive monthly distributions of interest.
The borrowers are required to make payments of interest and principal under the
mortgage loans in the mortgage loan pool to the servicer. The servicer will
deduct its servicing fee and send the remainder to the trustee. The trustee
will also receive distributions under the Freddie Mac Multifamily Gold PC from
Freddie Mac. After deducting its trustee fee from the amounts received from the
servicer and Freddie Mac, the trustee will distribute the remaining amount, up
to the amount available to the certificateholders as follows:
S-10
<PAGE>
Amount available to certificateholders
Step 1
Distribution of interest to the
senior certificates
Step 2
Distribution of principal to the
Class A-1 and A-2 certificates
Step 3
Distribution of the
amount of interest due and
principal due each class of the
subordinate certificates. These
distributions are made in
the priority of the alphabetic
order of the subordinate certificates
and as described below.
Step 4
Any remaining funds to the
residual certificates
Distributions of interest and principal are not made to a class of certificates
if its certificate balance has been reduced to zero. However, realized losses
or additional trust fund expenses allocated to reduce the certificate balance
of a class of certificates may be reimbursed if the amount available for
distribution is sufficient. See "Description of the
Certificates----Distributions" for a discussion of the amount available for
distribution and the priorities and amounts of distributions on the
certificates. Because payments are made in the order described above, there may
not be sufficient funds to make each of the payments described above after
making distributions with a higher priority. Funds may be insufficient if the
trust experiences realized losses or incurs unanticipated expenses or if 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 the delay in distribution
of interest.
The amount of interest distributable on each class on each distribution date
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.
Due to allocations of losses, expenses and any net aggregate prepayment
interest shortfall, the actual amount of interest distributed on each
distribution date may be less than this amount.
See "Description of the Certificates----Distributions" in this prospectus
supplement.
SUBORDINATION OF CLASSES OF CERTIFICATES
The senior certificates will receive all distributions of interest and
principal before the subordinate certificates are entitled to receive
distributions of
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<PAGE>
interest or principal. This subordination of the subordinate certificates to
the senior certificates provides credit support to the senior certificates.
Each class of subordinated certificates will provide credit enhancement to
subordinated certificates with earlier alphabetical class designations.
ALLOCATION OF LOSSES AND EXPENSES TO CLASSES OF CERTIFICATES
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 mortgage 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 on a mortgage asset. Additional trust
fund expenses include, among other things:
o special servicing compensation;
o interest on advances made by the servicer and the trustee;
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 to the certificates if the
aggregate outstanding principal balance of the mortgage assets 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 O, Class N, Class M,
Class L, Class K, Class J, Class H,
Class G, Class F, Class E, Class D,
Class C and Class B certificates to
zero, in that order
Step 2
Reduce the certificate balances of
the Class A-1 and A-2 certificates
to zero
Any reductions in the certificate balances of the certificates as the 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 MADE BY THE SERVICER AND THE TRUSTEE
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, the
servicer is required to advance its own funds to
S-12
<PAGE>
cover that shortfall. However, the servicer is required to make an advance only
if it determines that the advance, together with any advance interest, 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. Because Freddie Mac has guaranteed the timely payment of interest
and scheduled principal under the Freddie Mac Multifamily Gold PC, the servicer
also will not be required to make any advance with respect to payments due
under the participation certificate or the mortgage loans underlying the
participation certificate. If the servicer fails to make a required advance,
the trustee will be required to make that advance. However, the trustee will
make an advance only if it determines that the advance, together with any
advance interest, 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 advances of servicing expenses incurred by
it or on its behalf. 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 OF THE TRUST
If, on any distribution date, the remaining aggregate principal balance of the
mortgage assets is less than 1% of the initial pool balance, the servicer or
the depositor may purchase the mortgage assets and cause the trust to
terminate. Neither the servicer nor the depositor, however, is required to do
so. If the servicer or depositor does purchase the mortgage assets, 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 Clearstream 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.
DENOMINATIONS
The offered certificates are offered in minimum denominations of $25,000 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 assets; and
o the rate and timing of payments on the mortgage assets.
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<PAGE>
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 IN THE CERTIFICATES
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 FOR CERTIFICATEHOLDERS
If the considerations described under "ERISA Considerations" in this prospectus
supplement and in the accompanying prospectus are satisfied, 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 these plans and accounts except as may be
permitted under a prohibited transaction class exemption available to some
insurance companies using general account assets.
TAX STATUS OF THE CERTIFICATES
The certificates, other than the residual certificates, will 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 for that 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 real estate mortgage investment conduits.
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 ON THE CERTIFICATES
The offered certificates are required to receive ratings from Fitch, Inc. and
Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies,
Inc., that are not lower than those indicated under "Summary of Series 2000-C2
Mortgage Pass-Through Certificates and Mortgage Asset Pool Characteristics."
The ratings of the offered certificates address the likelihood that the holders
of offered
S-14
<PAGE>
certificates will receive timely distributions of interest and the ultimate
repayment of principal before the rated final distribution date that occurs in
August 2033. A security rating is not a recommendation to buy, sell or hold a
security and may be changed or withdrawn at any time by the assigning rating
agency. The ratings do not address the likelihood that holders will receive any
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.
S-15
<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 If losses on the mortgage assets are
ON THE MORTGAGE ASSETS allocated to your class of
WILL REDUCE YOUR PAYMENTS AND certificates, the amount payable to you
YIELD ON YOUR CERTIFICATES will be reduced by the amount 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 assets,
together with expenses relating to defaulted
mortgage assets, 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 assets.
If the principal balance of all of the
subordinate certificates has been reduced to
zero due to losses on and expenses of
defaulted mortgage assets, losses and
expenses will be allocated pro rata to the
Class A-1 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
PREPAYMENTS ON THE MORTGAGE will depend significantly on the rate and
ASSETS WILL AFFECT THE timing of payments of principal and interest
YIELD ON THE CERTIFICATES on the certificates. The rate and timing of
principal and interest payments on the
mortgage assets, including the rates of
delinquency, loss and prepayment, will
affect the rate and timing of payments of
principal and interest on the certificates.
S-16
<PAGE>
Some of the mortgage loans are secured by
cash reserves or other credit enhancement
that, if certain leasing-related or other
conditions are met, may be applied to
partially defease or prepay the related
mortgage loan without payment of a
prepayment premium or yield maintenance
payment. See "Description of the Mortgage
Assets--Earnouts and Additional Collateral
Loans" and Annex A to this prospectus
supplement. In addition, with respect to one
mortgage loan, representing approximately
0.77% of the initial pool balance, partial
condemnation of the related mortgaged
property is pending in exchange for a
payment of $122,103.60. Amounts received in
connection with the condemnation of the
related mortgaged property will be applied
as a partial prepayment of the mortgage loan
without payment of any prepayment penalty.
For a discussion of the impact on the yields
of the certificates of the rate of
delinquency, loss and prepayment on the
mortgage loans 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--Each Class of
certificates will have different yield and
prepayment considerations" in the
prospectus.
THE MORTGAGE LOANS ARE NOT Although payments under the Freddie Mac
INSURED Multifamily Gold PC are guaranteed by
Freddie Mac, none of the mortgage loans are
insured or guaranteed by the United States,
by 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 consider
payment on each mortgage loan to depend
exclusively on the borrower and any
guarantor under the particular mortgage loan
documents. If the borrower or any guarantor
fails to make all payments when due on the
mortgage loans, the yield on your class of
certificates may be adversely affected and
any resulting losses may be allocated to
your certificates.
S-17
<PAGE>
CONFLICTS OF INTEREST MAY An affiliate of the servicer expects to
OCCUR WHEN CERTIFICATEHOLDERS acquire some of the subordinate certificates
OF VARIOUS CLASSES HAVE including a portion of the Class O
DIFFERING INTERESTS certificates. The affiliate's ownership of
certificates could 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 ARD loan is not paid
by the anticipated repayment date.
Furthermore, if an event of default
regarding the servicer exists under the
pooling and servicing agreement, the rights
and obligations of the servicer to service
specially serviced mortgage loans and
properties acquired through foreclosure may
be terminated. The certificateholders
representing more than 50% of the voting
rights allocated to a specified class may
terminate that servicer in its capacity as
special servicer and appoint a replacement
special servicer. 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. For
example, the servicer's affiliate could seek
to reduce its potential loss from a troubled
mortgage loan by deferring foreclosure or
other legal action in an attempt to maximize
future proceeds. As a result, the trust may
ultimately receive a smaller amount of
proceeds from that mortgage loan as a result
of that deferral.
The servicer is, however, required to
administer the mortgage loans in accordance
with the servicing standards without regard
to ownership of any certificate by it or any
of its affiliates.
GMACCM will act as servicer of the mortgage
loans underlying the Freddie Mac Multifamily
Gold PC pursuant to a separate servicing
S-18
<PAGE>
agreement with Freddie Mac. GMACCM or one of
its affiliates has also entered into certain
indemnity arrangements with Freddie Mac in
connection with the sale of the underlying
mortgage loans to Freddie Mac.
See "Servicing of the Mortgage Loans--
Termination of the Servicer for 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 an
CONDITIONS AT A MORTGAGED environmental condition at a mortgaged
PROPERTY MAY REDUCE OR DELAY property. Any potential liability could
YOUR PAYMENTS reduce or delay payments to
certificateholders.
"Phase I" environmental assessments have
been performed on all but 33 of the
mortgaged properties, which secure mortgage
loans that represent 7.00% of the initial
pool balance. 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;
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,
environmental insurance or other
collateral was provided to cover the
estimated costs of continued monitoring,
investigation, testing or remediation;
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<PAGE>
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.
Some of the mortgage loans carry
environmental insurance which may provide
coverage in an amount equal to all or a
portion of the principal amount of the loan
or an amount necessary to provide for
certain remediation expenses. Environmental
insurance was obtained for each mortgage
loan for which the related mortgaged
property was not subject to a "Phase I"
environmental assessment. There can be no
assurance, however, that should
environmental insurance coverage be needed,
coverage would be available or uncontested,
that the terms and conditions of such
coverage would be met, that coverage would
be sufficient for the claims at issue or
that coverage would not be subject to
certain deductibles.
To decrease the likelihood of 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 Assets--
Underwriting Matters--Environmental
Assessments" in this prospectus supplement
and "The Pooling and Servicing
Agreements-- Realization upon Defaulted
Mortgage Loans," "Risk
Factors--Environmental conditions may
subject the mortgaged property to liens or
impose costs on the property owner" and
"Legal Aspects of Mortgage
Loans--Environmental Considerations" in the
prospectus.
GEOGRAPHIC CONCENTRATION The five states with the highest
MAY INCREASE REALIZED concentration of mortgage loans secured by
LOSSES ON THE MORTGAGE mortgaged properties are listed in the table
LOANS under "Summary of Series 2000 C-2
Transaction--Geographic Concentrations of
the Mortgaged Properties" on page S-8. 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 the rate of
S-20
<PAGE>
delinquency experienced with mortgage loans
related to properties in that region. As a
result, realized losses may occur on the
mortgage loans in the trust.
In addition, 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 but 4 of the mortgage loans are
NON-RECOURSE LOANS non-recourse loans. If a borrower defaults
on a mortgage 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. Any
resulting losses may reduce your payments
and yield on your certificates.
Consequently, you should consider payment on
each mortgage loan before maturity to depend
primarily on the sufficiency of the cash
flow from the related mortgaged property or
properties. At scheduled maturity or 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. See "Legal Aspects of
Mortgage Loans--Foreclosure--Anti-Deficiency
Legislation" in the prospectus.
THE SELLER OF A MORTGAGE The seller of each mortgage loan will be the
LOAN IS THE ONLY ENTITY MAKING only person making representations and
REPRESENTATIONS AND WARRANTIES warranties on that mortgage loan. No
ON THAT MORTGAGE LOAN representations and warranties regarding the
mortgage loans underlying the Freddie Mac
Multifamily Gold PC will be made for the
benefit of the trust fund. Neither the
depositor nor any of its affiliates will be
obligated to 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 obligation
to repurchase such mortgage loans. The
applicable
S-21
<PAGE>
seller may not have the financial ability to
effect such repurchases. Any resulting
losses may reduce your payments and yield on
your certificates. See "Description of the
Mortgage Assets--Assignment of the Mortgage
Loans; Repurchases and Substitutions" and
"--Representations and Warranties;
Repurchases" in this prospectus supplement.
BALLOON PAYMENTS MAY INCREASE One hundred four of the mortgage loans,
LOSSES ON THE MORTGAGE LOANS AND which represent 74.44% of the initial pool
EXTEND THE WEIGHTED AVERAGE LIFE balance, require balloon payments at their
OF YOUR CERTIFICATE stated maturity. These mortgage loans
involve a greater degree of risk than fully
amortizing loans because the ability of a
borrower to make a balloon payment typically
depends on its ability to refinance the
mortgage loan or 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:
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 property;
o the borrower's equity in the property;
o the borrower's financial condition;
o the operating history and occupancy level
of the property;
o 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. If
the weighted average life of your class of
certificates is extended, your yield on
those certificates may be reduced to less
than what it would otherwise have been.
S-22
<PAGE>
See "Servicing of the Mortgage Loans--
Modifications, Waivers, Amendments and
Consents," "Description of the Mortgage
Assets--Balloon Loans," and "Yield and
Maturity Considerations" in this prospectus
supplement and "Risk Factors--Investment in
commercial and multifamily mortgage loans is
riskier than investment in single family
mortgage loans" and "Yield and Maturity
Considerations" in the prospectus.
IF BORROWERS DO NOT MAKE ARD Twenty-two of the mortgage loans, which
PAYMENTS, THE WEIGHTED AVERAGE represent 24.22% of the initial pool
LIFE OF YOUR CLASS OF balance, are ARD loans. ARD loans have
CERTIFICATES MAY BE EXTENDED anticipated repayment dates prior to their
maturity dates. The failure of a borrower to
prepay an ARD loan by its anticipated
repayment date will likely extend the
weighted average life of any class of
certificates that would receive a
distribution of the prepayment. The ability
of a borrower to prepay an ARD loan by its
anticipated repayment date typically depends
on its ability either to refinance the ARD
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 O
Certificates. See "Description of the
Mortgage Assets--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 MULTIFAMILY
PROPERTIES:
REDUCTIONS IN OCCUPANCY AND RENT Fifty-four mortgaged properties, securing
LEVELS ON MULTIFAMILY PROPERTIES mortgage loans that represent 30.05% of the
COULD ADVERSELY AFFECT THEIR VALUE initial pool balance, are multifamily rental
AND CASH FLOW properties. A decrease in occupancy or rent
levels at these properties could result in
realized
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<PAGE>
losses on the mortgage loans. Occupancy and
rent levels at a multifamily property 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;
o construction of additional housing units
in the same market;
o local military base or industrial/business
closings;
o developments at local colleges and
universities;
o national, regional and local politics,
including current or future rent
stabilization and rent control laws and
agreements;
o trends in the senior housing market;
o the level of mortgage interest rates,
which may encourage tenants in multifamily
rental properties to purchase housing; and
o a lack of amenities, unattractive physical
attributes or bad reputation of the
mortgaged property.
RESTRICTIONS IMPOSED ON Tax credit and city, state and federal
MULTIFAMILY PROPERTIES housing subsidies or similar programs may
BY GOVERNMENT PROGRAMS apply to multifamily properties. The
COULD ALSO ADVERSELY AFFECT limitations and restrictions imposed by
THEIR VALUE AND CASH FLOW these programs could result in realized
losses on the related mortgage loans that
may be allocated to your class of
certificates. These programs may include:
o rent limitations that could adversely
affect the ability of borrowers to
increase rents to maintain the condition
of their mortgaged properties and satisfy
operating expenses; 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.
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<PAGE>
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 RETAIL
PROPERTIES:
A SIGNIFICANT TENANT CEASING Fifty-one mortgaged properties, securing
TO OPERATE AT A RETAIL PROPERTY mortgage loans that represent 29.51% of the
COULD ADVERSELY AFFECT THE initial pool balance, are retail properties.
PROPERTY'S VALUE AND CASH FLOW
A significant tenant ceasing to do business
at a retail property could result in
realized losses on the mortgage loans that
may be allocated to your certificates. The
loss of a significant tenant may be the
result of the tenant's voluntary decision
not to renew a lease or to terminate it in
accordance with its terms, the bankruptcy or
insolvency of the tenant, the tenant's
general cessation of business activities or
other reasons. There can be no assurance
that any tenant will continue to occupy
space in the related retail property even if
that tenant continues to pay rent under its
lease.
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 on similar
terms and customer traffic may be reduced,
possibly impacting sales at the remaining
retail tenants. Some component of the total
rent paid by retail tenants may be tied to a
percentage of gross sales. As a result, the
correlation between the success of tenant
businesses and property value can be more
direct for retail properties than other
types of commercial property. A retail
"anchor tenant" is typically understood to
be a tenant that is larger
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<PAGE>
in size and is important in attracting
customers to a retail property, whether or
not it is located on the mortgaged property.
These risks may be increased when the
property is a single tenant property. Eleven
of the mortgaged properties, securing
mortgage loans that represent 6.23% of the
initial pool balance, are single tenant
retail properties. 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 Changes in consumer preferences and market
VULNERABLE TO CHANGES IN demographics may adversely affect the value
CONSUMER PREFERENCES and cash flow from retail properties,
particularly properties with a specialty
retail focus. You may experience losses on
the certificates due to these changes.
Retail properties are particularly
vulnerable to changes in consumer
preferences and market demographics that may
relate to:
o 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 ALTERNATIVE Retail properties face competition from
RETAIL DISTRIBUTION CHANNELS sources outside their local real estate
MAY ADVERSELY AFFECT THE VALUE market. Catalogue retailers, home shopping
AND CASH FLOW FROM RETAIL networks, internet retailers, telemarketing
PROPERTIES sales and outlet centers all compete with
more traditional retail properties for
consumer dollars. These alternative retail
outlets are often characterized by lower
operating costs. Continued growth of these
alternative retail outlets 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 that may be allocated to
your certificates.
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<PAGE>
RISKS PARTICULAR TO OFFICE
PROPERTIES:
ECONOMIC DECLINE IN TENANT
BUSINESSES OR CHANGES IN Twenty-six mortgaged properties, securing
DEMOGRAPHIC CONDITIONS COULD mortgage loans that represent 24.02% of the
ADVERSELY AFFECT THE VALUE AND initial pool balance, are office properties.
CASH FLOW FROM OFFICE PROPERTIES
Economic decline in the businesses operated
by the tenants of office properties may
increase the likelihood that the tenants may
be unable to pay their rent, which could
result in realized losses on the mortgage
loans. A number of 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 the availability of tax benefits;
o the strength and stability of businesses
operated by the tenant or tenants;
o the desirability of the location for
business; and
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 rental
revenue depends on a single tenant, if the
property is owner-occupied or if there is a
significant concentration of tenants in a
particular business or industry. Two of the
mortgaged properties, securing mortgage
loans that represent 1.46% of the initial
pool balance, are secured by single tenant
office properties. 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.
COMPETITION WITH OTHER OFFICE Competition from other office properties in
PROPERTIES COULD ALSO ADVERSELY the same market could decrease occupancy or
AFFECT THE VALUE AND CASH FLOW rental rates at office properties. Decreased
FROM OFFICE PROPERTIES occupancy or rental revenues could result in
realized losses on the mortgage loans. 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
S-27
<PAGE>
sophisticated building systems (such as
fiber optic cables, satellite communications
or other base building technological
features) may affect the property's ability
to compete with office properties in the
same market.
RISKS PARTICULAR TO INDUSTRIAL
PROPERTIES:
CHANGES IN ECONOMIC AND Thirteen of the mortgaged properties,
DEMOGRAPHIC CONDITIONS COULD securing mortgage loans that represent 7.71%
ADVERSELY AFFECT THE VALUE of the initial pool balance, are industrial
AND CASH FLOW FROM INDUSTRIAL properties. Economic decline in the
PROPERTIES businesses operated by the tenants of
industrial properties could result in
realized losses on the mortgage loans that
may be allocated to your class of
certificates.
These risks are similar to those of tenants
of office properties. Industrial properties,
however, may be more dependent on a single
tenant. Five of the mortgaged properties,
securing mortgage loans that represent 4.33%
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 Site characteristics at industrial
CHARACTERISTICS COULD ALSO properties may impose restrictions that may
ADVERSELY AFFECT THE limit the properties' suitability for
VALUE AND CASH FLOW FROM tenants, affect the value of the properties
INDUSTRIAL PROPERTIES and contribute to losses on the mortgage
loans that may be allocated to your class of
certificates. Site characteristics which
affect the value of an industrial property
include:
o clear heights;
o column spacing;
o number of bays and bay depths;
o truck turning radius;
o divisibility;
o zoning restrictions; and
o overall functionality and accessibility.
S-28
<PAGE>
An industrial property also requires
availability of labor sources, proximity to
supply sources and customers, and
accessibility to rail lines, major roadways
and other distribution channels.
RESTRICTIONS IMPOSED BY Properties used for many industrial purposes
INCREASED ENVIRONMENTAL are more prone to environmental concerns
RISKS COULD ALSO ADVERSELY than other property types. For a description
AFFECT THE VALUE AND CASH of risk factors relating to environmental
FLOW FROM INDUSTRIAL PROPERTIES risks, see "--Adverse environmental
conditions at a mortgaged property or delay
your payments" above.
RISKS PARTICULAR TO HOSPITALITY
PROPERTIES:
REDUCTIONS IN ROOM RATES OR Nine mortgaged properties, securing mortgage
OCCUPANCY AT A HOSPITALITY loans that represent 7.95% of the initial
PROPERTY COULD ADVERSELY pool balance, are hospitality properties. A
AFFECT ITS VALUE AND CASH FLOW decrease in room rates or occupancy at
hospitality properties could result in
realized losses on the mortgage loans that
may be allocated to your class of
certificates. 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 typically are
rented for short periods of time, the
performance of hospitality properties
tends to be affected by adverse economic
conditions and competition more quickly
than 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
mortgaged property occurs.
o In many parts of the country the hotel and
lodging industry is seasonal in nature.
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
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<PAGE>
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.
LIMITED ALTERNATIVE USES OF Five mortgaged properties, securing mortgage
OTHER PROPERTY TYPES COULD loans that represent approximately 0.76% of
ADVERSELY AFFECT THEIR the initial pool balance, are mixed use
VALUE AND CASH FLOW properties or other property types that have
limited alternative uses.
These limited alternative uses could result
in realized losses on the mortgage loans
that may be allocated to your class of
certificates. Mortgage loans secured by
other property types, including mixed use
properties, may pose risks not associated
with mortgage loans secured by liens on
other types of income-producing mortgaged
properties.
RISKS ASSOCIATED WITH TENANTS
GENERALLY:
LOSSES MAY BE CAUSED BY TENANT Cash flow or value of a mortgaged property
CREDIT RISK ON THE MORTGAGE LOANS could be reduced if tenants are unable to
meet their lease obligations or become
insolvent. The inability of tenants to meet
their obligations may result in realized
losses on the mortgage loans that may be
allocated to your class of certificates.
o If tenant sales in retail properties
decline, rents based on sales will
decline. Tenants may be unable to pay
their rent or other occupancy costs as a
result of poor cash flow due to sales
declines or the amount of the gross sales
component of rent will be reduced. If a
tenant defaults, the borrower may
experience delays and costs in enforcing
the lessor's rights.
o If a 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.
See "Legal
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<PAGE>
Aspects of Mortgage Loans--Bankruptcy
Laws" in the prospectus.
These risks may be increased when the
property is a single tenant property, is
owner-occupied or is leased to relatively
few tenants. Eighteen of the mortgaged
properties, securing mortgage loans that
represent 12.02% of the initial pool
balance, are single tenant properties.
LOSSES MAY BE CAUSED BY THE The income from and market value of retail,
EXPIRATION OF OR TENANT office, multifamily and industrial
DEFAULTS ON LEASES properties would decline if leases expired
or terminated, or tenants defaulted and the
borrowers were unable to renew the leases or
relet the space on comparable terms. See
Annex A to this prospectus supplement for
information regarding the expiration of
leased space for certain mortgaged
properties.
If leases are not renewed at all or are not
renewed on favorable terms, the trust may
experience realized losses on the mortgage
loans that may be allocated to your class of
certificates.
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 Reserves" in
this prospectus supplement for information
regarding certain of these reserves.
TENANT BANKRUPTCY ENTAILS RISKS The bankruptcy or insolvency of a major
tenant, such as an anchor tenant, or a
number of smaller tenants, may adversely
affect the income produced by a mortgaged
property and result in realized losses on
the mortgage loans that may be allocated to
your class of certificates. 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 claim
against the tenant, unless collateral
secures the claim. The claim
S-31
<PAGE>
would be limited to the unpaid rent reserved
under the lease for the periods before 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 "Legal Aspects of
Mortgage Loans" in the prospectus.
LOSSES MAY BE CAUSED BY Losses may be realized on the mortgage loans
INADEQUATE PROPERTY MANAGEMENT that may be allocated to your class of
certificates if property management is
inadequate. Property managers are generally
responsible for:
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 building value.
Property management errors can impair the
long-term viability of a property.
CONFLICTS OF INTERESTS BETWEEN Managers of mortgaged properties and the
PROPERTY MANAGERS AND OWNERS MAY borrowers may experience conflicts of
RESULT IN LOSSES interest in the management or ownership of
mortgaged properties. These conflicts of
interest could result in realized losses on
the mortgage loans that may be allocated to
your class of certificates. These conflicts
of interests may exist because:
o the mortgaged properties may be managed by
property managers affiliated with the
borrowers;
S-32
<PAGE>
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 or the
borrowers or both, may also own other
properties, including competing
properties.
LOSSES MAY RESULT IF THE SERVICER An appraisal was conducted for each
IS UNABLE TO SELL A MORTGAGED mortgaged property in connection with the
PROPERTY SECURING A DEFAULTED origination of the related mortgage loan or
MORTGAGE LOAN FOR ITS APPRAISED thereafter, and the loan-to-value ratios as
VALUE of the cut-off date referred to in this
prospectus supplement are based on the
appraisals. If the servicer forecloses on a
mortgaged property and realizes liquidation
proceeds that are less than the appraised
value, a realized loss on the mortgage loan
could result that may be allocated to your
class of certificates.
Appraisals are not guarantees of present or
future value. Appraisals seek to establish
the amount a typically motivated buyer would
pay a typically motivated seller as of a
designated date. This amount could be
significantly higher than the amount
obtained from the sale of a mortgaged
property under a distress or liquidation
sale at a subsequent date. If a borrower
defaults on a mortgage loan, the servicer
may be unable to sell the related mortgaged
property for its appraised value.
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. Most appraisals have not been
updated since the mortgage loan was
originated.
SUBORDINATE FINANCING ON One of the mortgaged properties, securing a
THE MORTGAGED PROPERTY MAY mortgage loan that represents 1.73% of the
INCREASE RISKS initial pool balance, is encumbered by
subordinate debt that is not part of the
mortgage loan pool. The existence of
subordinate indebtedness may adversely
affect the borrower's financial viability or
the enforcement of its lender's security
interest in the mortgaged property and
result in realized losses on the mortgage
loans that may be allocated to your class of
certificates. The borrower's financial
viability or the enforcement
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<PAGE>
of the lender's security interest could be
adversely affected by subordinate financing
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 borrower defaults after 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 each of 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. All of
the mortgage loans either 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 Assets--Secured
Subordinate Financing" in this prospectus
supplement.
MEZZANINE DEBT SECURED BY The direct parents of some borrowers have
EQUITY IN THE BORROWER MAY pledged or are permitted to pledge their
INCREASE RISKS equity interest in the borrower to secure
mezzanine debt incurred by the parent or
other obligations. The existence of this
indebtedness could adversely affect the
financial viability of such borrower or the
availability of proceeds from the operation
of the property to fund items such as
replacements, tenant improvements or other
capital expenditures. The value of the
equity in the borrower held by the
sponsoring entities of the borrower could
also be adversely affected by the existence
of mezzanine indebtedness or other
obligations. 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
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<PAGE>
mezzanine debt relating to the mortgaged
properties see "Description of the Mortgage
Assets--Unsecured Subordinate or Mezzanine
Financing" in this prospectus supplement.
RELATED BORROWERS MAY MAKE Some borrowers under the mortgage loans are
LOSSES ON THE MORTGAGE LOANS affiliated or under common control with one
MORE SEVERE another. When borrowers are related, any
adverse 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 likely or more
severe or both 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 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 a
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. The
insufficiency of cash flows could result in
realized losses on the mortgage loans that
may be allocated to your class of
certificates. See "Legal Aspects of Mortgage
Loans--Bankruptcy Laws" in the prospectus.
LARGER-THAN-AVERAGE BALANCE Several mortgage loans, either individually
LOANS MAY MAKE LOSSES MORE or together with other mortgage loans with
SEVERE which they are cross-collateralized, have
outstanding balances that are substantially
higher than the average outstanding balance.
If a mortgage loan pool includes mortgage
loans with larger-than-average balances, any
realized losses on the mortgage loans with
larger-than-average balances could 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 mortgage loans.
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<PAGE>
LOSSES COULD RESULT FROM Five mortgage loans, representing 11.80% of
LIMITATION ON ENFORCEABILITY the initial pool balance, are
OF CROSS-COLLATERALIZATION cross-collateralized with one or more other
mortgage loans. Cross-collateralization
arrangements involving more than one
borrower could be challenged as a fraudulent
conveyance by creditors of a borrower or by
the representative or the bankruptcy estate
of a borrower, if that borrower were to
become a debtor in a bankruptcy case.
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:
o 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
o 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. If a
creditor were to successfully assert a
fraudulent conveyance claim it could result
in realized losses on the mortgage loans
that may be allocated to your class of
certificates. See "Legal Aspects of Mortgage
Loans-- Bankruptcy Laws" in the prospectus
and "Description of the Mortgage
Assets--Related Borrowers,
Cross-Collateralized Mortgage Loans and
Mortgage Loans Collateralized by Multiple
Properties" in this prospectus supplement.
TAX CONSIDERATIONS RELATED Payment of taxes on any net income from
TO FORECLOSURE MAY REDUCE "foreclosure property" acquired by the trust
PAYMENTS TO CERTIFICATEHOLDERS will reduce the net proceeds available for
distribution to certificateholders. If the
trust 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
S-36
<PAGE>
investment conduits. 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 ON Some jurisdictions, including California,
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 before enforcing any rights under the
mortgage loans that relate to properties
where the rule could be applicable. In
addition, the 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 "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. 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 which alternatives to pursue after
a default.
BANKRUPTCY RULES MAY LIMIT THE Operation of the federal bankruptcy code and
ABILITY OF A LENDER TO ENFORCE related state laws may interfere with the
REMEDIES ability of a lender to foreclose upon a
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 "Legal
Aspects of Mortgage Loans--Bankruptcy Laws"
in the prospectus.
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<PAGE>
INCREASES IN GROUND RENTS MAY Three mortgaged properties, securing
ADVERSELY AFFECT A BORROWER'S mortgage loans which represent 1.64% of the
ABILITY TO MAKE PAYMENTS UNDER initial pool balance, are subject solely to
A RELATED MORTGAGE LOAN AND the lien of a mortgage on a leasehold
CAUSE REALIZED LOSSES ON THE interest under a ground lease or sublease of
MORTGAGE LOANS a ground lease. One mortgaged property,
securing a mortgage loan which represents
1.49% of the initial pool balance, is
subject to the lien of a mortgage on both
the leasehold interest and the ground
lessor's fee simple interest in the
mortgaged property.
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. In addition, bankruptcy rules may
limit the ability of a lender to enforce
remedies under any mortgage loan secured by
a ground lease and the bankruptcy of a
lessor or a lessee under a ground lease
could result in losses on the related
mortgage loans. Upon bankruptcy of a lessor
or a lessee under a ground lease, the debtor
entity has the right to assume and continue
or reject and terminate the 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 of the ground lease,
including renewals. 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 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.
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<PAGE>
However, each of the ground leases (or
subleases to ground leases) related to the
mortgage loans that are not secured by the
related fee interest 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
Assets--Ground Leases" in this prospectus
supplement.
YOUR PAYMENTS MAY BE REDUCED Noncompliance with zoning and building codes
OR DELAYED IF ZONING AND may cause the borrower to experience cash
BUILDING CODE NONCOMPLIANCE flow delays and shortfalls. These delays or
ON THE MORTGAGED PROPERTIES shortfalls in payments could result in
ADVERSELY AFFECTS THE ABILITY realized losses in the mortgage loans that
OF BORROWERS TO MAKE PAYMENTS may be allocated to your class of
ON THE MORTGAGE LOANS certificates.
Each seller has taken steps to establish
that the use and operation of the related
mortgaged properties securing the mortgage
loans 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 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 does not
consider those defects known to it to be
material.
In many cases, the use, operation or
structure of a mortgaged property
constitutes a permitted nonconforming use or
structure that may not be rebuilt to its
current state if a material casualty event
occurs. Generally, insurance proceeds will
be available in the event of a casualty
affecting the mortgaged property. The
insurance proceeds will be available to
rebuild the mortgaged property or for
application to the mortgage loan.
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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.
CHANGES IN CONCENTRATIONS OF As the mortgage loans are repaid, liquidated
BORROWERS, MORTGAGE LOANS OR or repurchased, the characteristics of the
PROPERTY CHARACTERISTICS MAY pool may vary. For example, the relative
INCREASE THE LIKELIHOOD OF concentrations of properties, geographic
LOSSES ON THE CERTIFICATES location, property characteristics and
number of borrowers and affiliated borrowers
may change. Classes of certificates that
have a lower priority for payment of
principal are more likely to be exposed to
risks associated with any of these changes.
COMPLIANCE WITH THE AMERICANS Under the Americans with Disabilities Act of
WITH DISABILITIES ACT MAY 1990, all public accommodations are required
REDUCE PAYMENTS TO to meet federal requirements related to
CERTIFICATEHOLDERS 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. If a borrower were
required to pay expenses and fines imposed
by the Americans with Disabilities Act, the
amount available to make payments on its
mortgage loan would be reduced. Reductions
in funds available to make mortgage loan
payments could result in realized losses on
the mortgage loans that may be allocated to
your class of certificates.
LITIGATION MAY REDUCE PAYMENTS Legal proceedings may be pending and, from
TO CERTIFICATEHOLDERS time to time, threatened, against the
borrowers and 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.
You can find a "Glossary" of capitalized terms used in this prospectus
supplement beginning on page S-118 in this prospectus supplement.
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DESCRIPTION OF THE MORTGAGE ASSETS
The mortgage assets in the trust fund will consist of the mortgage loan
pool and the Freddie Mac Multifamily Gold PC. Except where otherwise indicated,
all references to the mortgage loans and mortgaged properties in this
prospectus supplement include the mortgage loans and mortgaged properties
underlying the Freddie Mac Multifamily Gold PC . 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 to this prospectus
supplement.
CALCULATIONS OF INTEREST
One hundred twenty-three of the mortgage loans representing 97.49% of the
initial pool balance accrue interest at fixed interest rates on the basis of a
360-day year and the actual number of days elapsed. Eighty-eight of such
mortgage loans representing 70.48% of the initial pool balance accrue interest
on the basis of a 360-day year and the actual number of days elapsed but have a
monthly payment calculated on the basis of a 360-day year consisting of twelve
30-day months. Accordingly, the actual amortization term is longer for these
mortgage loans than the stated amortization term. The remaining 7 mortgage
loans representing 2.51% of the initial pool balance accrue interest on the
basis of a 360-day year consisting of twelve 30-day months.
In addition, 3 mortgage loans (including both mortgage loans underlying
the Freddie Mac Multifamily Gold PC), which represent 12.00% of the initial
pool balance, currently provide for payments of interest only for up to 23
remaining months after the cut-off date, during which period no payments of
principal are due. A one-time increase in the amount of the monthly payment for
some of these mortgage loans will occur in connection with the commencement of
the scheduled amortization of the mortgage 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 ARD loans will accrue
interest at a revised rate if not repaid on or before their respective
anticipated repayment dates.
For a description of the payment terms and interest calculation method of
the Freddie Mac Multifamily Gold PC, see "--Significant Mortgage Assets--The
Freddie Mac Participation Certificate--Terms of Participation Certificate."
BALLOON LOANS
One hundred four of the mortgage loans, which represent approximately
74.44% 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. Four of the mortgage loans, which
represent approximately 13.52% of the initial pool balance, begin monthly
payments of principal 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.
ARD LOANS
Twenty-two of the mortgage loans, which represent approximately 24.22% of
the initial pool balance, are ARD loans that provide for changes in the accrual
of interest
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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, the 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 (except
for loan number DBM 11301, which will be a fixed rate per annum equal to the
mortgage rate plus 1.0% per annum). Beginning on its anticipated repayment
date, excess interest or 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 the
ARD loans before the related maturity date. Unpaid excess interest will, except
where limited by applicable law, continue to accrue interest at the revised
rate. Any excess interest received on an ARD loan will be distributed to the
holders of the Class O certificates.
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 paying
interest at the mortgage rate and principal based on the amortization schedule,
the related borrower typically 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 typically 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 ARD loan,
in whole or in part, without payment of a penalty or yield maintenance in the
form of a prepayment premium.
AMORTIZATION OF PRINCIPAL
In addition to the balloon loans and the ARD loans, the mortgage loan pool
includes four fully amortizing mortgage loans, which represent 1.34% of the
initial pool balance.
DUE DATES
A due date is the date in the month on which a monthly payment on a
mortgage loan is first due. One hundred ten of the mortgage loans, which
represent 74.62% of the
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initial pool balance, provide for scheduled monthly payments of principal or
interest (but not excess interest or principal payments calculated with respect
to excess cash flow on any ARD loan) or both to be due on the first day of each
month. Sixteen of the mortgage loans, which represent 22.16% of the initial
pool balance, provide for due dates on the fifth day of each month. Four of the
mortgage loans, which represent 3.22% of the initial pool balance, provide for
due dates on the tenth 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
All but 8 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 certain
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 due under the mortgage loan, excluding scheduled
interest or principal payments not yet due and owing, and
o any costs and expenses related to the release,
(2) delivers or pledges defeasance collateral to the trustee
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 that 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 those dates under the mortgage loan, or, for
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 the scheduled payments
allocable to the released mortgaged property, and
(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.
The related mortgaged property will be released from the lien of the
mortgage loan and the defeasance collateral will be substituted as the
collateral securing the mortgage loan when these conditions are met. One of the
mortgage loans has a yield maintenance period subsequent to the period during
which defeasance is permitted. The yield maintaince period is followed by a 1%
prepayment penalty period.
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In general, no borrower will be permitted to defease the related mortgage
loan prior to the second anniversary of the date of initial issuance of the
offered certificates, with the following exceptions:
<TABLE>
<CAPTION>
MORTGAGED PROPERTY EARLIEST DEFEASANCE DATE
------------------ -------------------------
<S> <C>
Bladensburg Shopping Center May 1, 2002
The Corners Shopping Center May 1, 2002
Woodbury Shopping Center August 1, 2002
</TABLE>
The respective mortgage loans relating to the mortgaged properties
identified in the foregoing table are each the primary asset of a single loan
REMIC. The startup day of each of those single loan REMICs is at least two
years prior to the earliest defeasance date of the related mortgage loan.
PREPAYMENT PROVISIONS
Each mortgage loan prohibits voluntary principal prepayments except during
an open period following the expiration of the lockout period and any
defeasance period for that mortgage loan or during a period following the
lockout period when any prepayment must be accompanied by a prepayment premium.
See Annex A to this prospectus supplement for information regarding the lockout
and defeasance periods for each mortgage loan.
Any prepayment premiums actually collected on the mortgage loans, other
than the mortgage loans underlying the Freddie Mac Multifamily Gold PC, will be
distributed to the respective classes of certificateholders in the amounts and
priorities described under "Description of the Certificates----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 pay 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 the
payment.
Liquidation proceeds recovered from any defaulted mortgage loan will, in
most cases, 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. See "Legal Aspects of
Mortgage Loans----Default Interest and Limitations on Prepayments" in the
prospectus.
In most cases, no prepayment premium will be payable upon any mandatory
prepayment of a mortgage loan caused by a casualty or condemnation. No
prepayment premium will be payable with the repurchase of a mortgage loan by a
seller for a breach of representation or warranty or any failure to deliver any
related documentation on the part of that seller. 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 Loan; Repurchases and Substitutions" and "----
Representations and Warranties; Repurchases" and "Description of the
Certificates----Termination; Retirement of Certificates" in this prospectus
supplement.
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RELATED BORROWERS, CROSS-COLLATERALIZED MORTGAGE LOANS AND MORTGAGE LOANS
COLLATERALIZED BY MULTIPLE PROPERTIES
Five of the mortgage loans, which represent 11.80% of the initial pool
balance, are cross-collateralized mortgage loans among groups of related
borrowers. Eight mortgage loans, other than the cross-collateralized mortgage
loans, which represent 5.28% of the initial pool balance, are secured by one or
more mortgages encumbering multiple mortgaged properties. Each of these 8
mortgage loans is evidenced by a single mortgage note, and is not treated as a
set of cross-collateralized mortgage loans. Because of this, the total number
of mortgage loans is 130, while the total number of mortgaged properties is
158. In most cases, 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 loans, we treat these mortgage loans as
multiple mortgage loans that are allocated a cut-off date balance based on the
allocated loan amount. Losses could result from limitations on the
enforceability of cross-collateralization. For a discussion of risks related to
cross-collateralized loans, see "Risk Factors" in this prospectus supplement.
See Annex A to this prospectus supplement for information regarding the cross-
collateralized mortgage loans.
In addition to the cross-collateralized loans and the mortgage 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 3.83% 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. With 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
- transfers to specified parties related to the borrower.
For mortgage loans in the mortgage pool (which excludes the mortgage loans
underlying the Freddie Mac Multifamily Gold PC), the servicer will determine,
in accordance with the servicing standard, whether to exercise any right the
holder of the 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
One mortgage loan, which has a cut-off date balance of $13,380,226 and
represents 1.73% of the initial pool balance, is secured by a mortgaged
property known to be
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encumbered by subordinated debt that is not part of the mortgage loan pool. The
initial principal amount of such secured subordinated debt, which is held by
GMACCM, is $250,000. 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. 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 the property. See "Risk
Factors----Subordinate financing on the mortgaged property may increase risks"
in this prospectus supplement and "Legal Aspects of Mortgage
Loans----Subordinate Financing" in the prospectus.
UNSECURED SUBORDINATE AND MEZZANINE FINANCING
Some of the mortgage loans may permit the borrower to incur unsecured
subordinated debt in the future, in most cases, conditioned upon delivery of a
subordination agreement or standstill agreement or both and requirements that
limit the use of proceeds to refurbishing or renovating the property or
acquiring furniture, fixtures and equipment for the property or both. With
respect to one mortgage loan, which has a cut-off date balance of $11,341,541
and represents approximately 1.47% of the initial pool balance, the members of
the borrower have granted a security interest in their membership interests to
an unaffiliated third party to secure a $1,000,000 loan. The related lender has
entered into a subordination and standstill agreement with respect to this
mezzanine loan. No "mezzanine debt" is included in the mortgage loan pool.
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.
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.
See "Risk Factors----Subordinate financing on the mortgaged property may
increase risks" and "----Mezzanine debt secured by equity in the borrower may
increase risks" in this prospectus supplement and "Legal Aspects of Mortgage
Loans----Subordinate Financing" in the prospectus.
GROUND LEASES
Three of the mortgaged properties, securing mortgage loans which represent
1.64% of the initial pool balance, are subject solely to the lien of a mortgage
on the applicable borrower's leasehold interest in such mortgaged property.
One of the mortgaged properties, securing a mortgage loan which represents
1.49% of the initial pool balance, is subject to the lien of a mortgage on both
a leasehold interest and a fee simple interest in the mortgaged property.
None of the ground leases (including any extension options) expire 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 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.
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LOAN DOCUMENTATION
Except as otherwise described under "Description of the Mortgage
Assets--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.
SIGNIFICANT MORTGAGE ASSETS
The Freddie Mac Multifamily Gold PC
The description of the Freddie Mac Multifamily Gold PC and the multifamily
mortgage participation certificate agreement that follows is a summary of
certain of the terms and provisions relating to the participation certificate
and does not purport to be complete. Such description is subject to, and is
qualified in its entirety by reference to the Freddie Mac multifamily mortgage
participation certificate agreement described below (including any amendments
and supplements thereto), copies of which are available from Freddie Mac. See
"--Availability of Information" below.
General. The Freddie Mac Multifamily Gold PC will be issued by Freddie Mac
pursuant to its multifamily mortgage participation certificate program and will
represent a 100% beneficial ownership interest in a discrete pool of two
multifamily mortgage loans secured by five mortgaged properties. This pool will
be established by Freddie Mac pursuant to its multifamily mortgage
participation certificate agreement dated as of December 1, 1997. The
underlying loans are being sold by GMAC Commercial Mortgage Corporation to
Freddie Mac in exchange for the Freddie Mac Multifamily Gold PC. GMACCM will
convey the Freddie Mac Multifamily Gold PC to the depositor, and the depositor
will transfer the Freddie Mac Multifamily Gold PC to the trustee for deposit
into the trust fund. GMACCM will be appointed to act as servicer, on behalf of
Freddie Mac, of the two mortgage loans underlying the participation
certificate, pursuant to a separate servicing agreement between Freddie Mac and
GMACCM. GMACCM or one of its affiliates has also agreed to indemnify Freddie
Mac for certain losses on the underlying mortgage loans pursuant to a separate
indemnity agreement.
Underlying Mortgage Loans. The two mortgage loans underlying the Freddie
Mac Multifamily Gold PC are the "Schron Multifamily Portfolio loan" and the
"Mill Run Apartments loan". Both loans were originated by GMACCM on May 4,
2000, are balloon loans and have a final maturity date of May 5, 2010. The
Schron Multifamily Portfolio loan has a cut-off date principal balance of
$33,940,000, is secured by four multifamily properties located in northern and
central New Jersey and was made to four separate special purpose borrowers. The
Mill Run Apartments loan has a cut-off date principal balance of $55,600,000,
is secured by one multifamily property located in Union, New Jersey and was
made to a single special purpose borrower. The Schron Multifamily Portfolio
loan and the Mill Run Apartments loan are cross-defaulted and
cross-collateralized. The borrowers under the Schron Multifamily Portfolio loan
and the Mill Run Apartments loan are also affiliated. For additional
information regarding the mortgage loans and mortgaged properties underlying
the Freddie Mac Multifamily Gold PC, see Annex A to this prospectus supplement.
Terms of Participation Certificate. The Freddie Mac Multifamily Gold PC
has an initial principal amount of $89,540,000 and a coupon rate of 7.265% per
annum. The rate
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of interest payable by the borrowers on the underlying mortgage loans exceeds
the coupon of the Freddie Mac Multifamily Gold PC. The servicer will retain a
portion of such excess as servicing compensation and Freddie Mac will retain
the remaining portion of such excess as compensation for administering the
underlying mortgage pool and guaranteeing payments on the participation
certificate.
The payment date for the Freddie Mac Multifamily Gold PC is the 15th day
of each month, unless the 15th is not a business day, in which case the payment
date is the next succeeding business day, commencing on September 15, 2000.
Each reporting period under the participation certificate will be from the 16th
day of a month through the 15th day of the following month.
Freddie Mac's system for paying interest on the Freddie Mac Multifamily
Gold PC is calculated on the basis of a 360-year consisting of twelve 30-day
months. Interest on each of the mortgage loans underlying the Freddie Mac
Multifamily Gold PC, however, will be payable at its respective mortgage rate
on the basis of a 360-day year and the actual number of days elapsed.
Accordingly, Freddie Mac will adjust the principal and interest allocations
monthly so that interest payments on the mortgage loans underlying the Freddie
Mac Multifamily Gold PC can be passed through to the trustee on the basis of a
360-year consisting of twelve 30-day months. Absent manifest error, Freddie
Mac's adjustment to the principal and interest allocation will be conclusive
and binding on all affected persons.
Freddie Mac will make payments to the trustee, as holder of the
participation certificate, pursuant to its "pool factor method". A "pool
factor" for any month is a truncated seven-digit number which, when multiplied
by the original principal amount of the pool of mortgage loans underlying the
participation certificate, equals the remaining principal amount of the pool
after giving effect to the principal payment made in such month. The pool
factor in the month of formation of the underlying pool is 1.0000000. Freddie
Mac will make the pool factors for each subsequent month available on or about
the first business day of such month, but retains the right to make pool
factors available at other times and by whatever means it deems appropriate.
Freddie Mac relies on the servicer's reports of mortgage activity to prepare
its pool factors. In the event that it fails to receive (or believes it will
not receive) accurate or timely reports of mortgage activity, Freddie Mac may
estimate mortgage payments and such estimations will be deemed conclusive for
purposes of the payment of interest and principal pursuant to Freddie Mac's
guarantee. Once the servicer's reports have been received and processed,
Freddie Mac will reconcile the actual principal balance of the mortgage loans
underlying the participation certificate by adjusting subsequent pool factors.
The amount of interest payable on the participation certificate on any
payment date will equal the product of (a) 1/12th of the coupon rate on the
participation certificate, multiplied by (b) the pool factor published in the
preceding month, multiplied by (c) the original principal amount of the
participation certificate. The amount of principal payable on the participation
certificate on any payment date will equal the product of (a) the prior month's
pool factor minus the current month's pool factor, multiplied by (b) the
original principal amount of the participation certificate.
The aggregate principal payment on the participation certificate in any
month will reflect (i) the scheduled principal payments on the underlying
mortgage loans for the reporting period ending in the current month, plus (ii)
any prepayments on the
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underlying mortgage loans for the reporting period ending in the previous
month, plus (iii) any adjustments necessary to reconcile the aggregate
principal balance of the underlying mortgage loans as calculated by Freddie Mac
with the aggregate balance of the related underlying mortgage loans as reported
to Freddie Mac by the servicer. For purposes of the participation certificate,
a prepayment with respect to an underlying mortgage loan is any event that
causes an unscheduled principal payment to be passed through on the
participation certificate, including a full or partial prepayment of principal
on the mortgage loan by the borrower, a liquidation resulting from default,
casualty or condemnation, the payment of principal on an insurance or guarantee
claim by the Federal Housing Administration or other mortgage insurer or
mortgage guarantor, and the repurchase of the mortgage loan from the underlying
mortgage pool by the seller, the servicer or Freddie Mac, including any
repurchase pursuant to Freddie Mac's guarantee of ultimate collection of
principal.
Freddie Mac calculates the scheduled principal due in any month on a
mortgage loan based on the principal balance of the mortgage loan (adjusted for
any prepayments and any principal payments previously passed through pursuant
to Freddie Mac's guarantee), the mortgage rate of the mortgage loan, and the
scheduled monthly principal and interest payment applicable to the mortgage
loan at the time of issuance of the participation certificate. To the extent
that Freddie Mac's calculation of scheduled principal does not reflect actual
payment on the underlying mortgage loan, any differences (other than any
difference resulting from defaults or measures taken to resolve such defaults)
will be accounted for by adjusting subsequent pool factors. Freddie Mac retains
the right, in its discretion, to modify its procedures for passing through full
or partial prepayments under its participation certificates by including, as
part of the aggregate principal payment for each month, prepayments reported to
Freddie Mac after the end of the related reporting period. Any such prepayments
would be reflected in the applicable pool factor. The timing and manner of any
notification of such modification, as well as any other modifications to the
pool factor method, will be determined by Freddie Mac in its discretion.
Guarantee. Freddie Mac guarantees (i) the timely payment of interest at
the coupon rate on the principal balance of the participation certificate, as
calculated by Freddie Mac under the pool factor method, (ii) the timely payment
of scheduled principal and (iii) the ultimate collection of all principal on
the underlying mortgage loans, without offset or deduction, no later than the
payment date that occurs in the same month as the participation certificate's
final payment date. THE OBLIGATIONS OF FREDDIE MAC UNDER ITS GUARANTEE OF THE
PARTICIPATION CERTIFICATE ARE OBLIGATIONS OF FREDDIE MAC ONLY. THE
PARTICIPATION CERTIFICATE, INCLUDING THE PAYMENT OF INTEREST THEREON, IS NOT
GUARANTEED BY THE UNITED STATES AND DOES NOT CONSTITUTE A DEBT OR OBLIGATION OF
THE UNITED STATES OR ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES OTHER
THAN FREDDIE MAC.
Optional Redemption. Freddie Mac may, at its option, redeem the
participation certificate in whole, but not in part, on any payment date when,
after giving effect to the principal payment to be made on such payment date,
the outstanding principal balance of the participation certificate would be
less than two percent of its original principal balance. Any such optional
redemption would be at a redemption price of 100% of the outstanding principal
balance of the participation certificate, plus any accrued and unpaid interest.
Final Payment Date. The final payment date of the participation
certificate is May 1, 2010 and reflects the date on which the last monthly
payment of the mortgage
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loans underlying the participation certificate is scheduled to be made, as
determined at the time of issuance of the participation certificate. By
convention, the final payment date of a Freddie Mac Multifamily Gold PC is
always designated as the first day of a month, even though all payment dates
occur on the 15th day of each month. Final payment of interest and principal on
a participation certificate may occur before the month of its final payment
date because of prepayments, including any repurchases of underlying mortgage
loans that are in default or likely to default.
Prepayments. A prepayment may occur upon a sale of the mortgaged property
securing an underlying mortgage loan, a refinancing of the mortgage loan or a
repurchase of the mortgage loan from the underlying mortgage pool. The
underlying mortgage loans with respect to the participation certificate contain
lockout provisions prohibiting prepayments by the borrowers for a period of
time, after which time the borrowers may defease one or both of the mortgage
loans. Freddie Mac will require the servicer to enforce the lockout provisions
only to the extent that Freddie Mac would, at that time, seek to enforce
similar lockout provisions for comparable mortgage loans it has purchased but
not resold. For example, Freddie Mac may waive lockout provisions in connection
with efforts to resolve existing or impending defaults or litigation, or when
the benefits resulting from prepayment protection are likely to be
substantially offset by the cost or result of enforcement.
A repurchase of an underlying mortgage loan may result from a material
breach of a warranty, representation or agreement by the seller or from a
defect in documentation; in order to facilitate the resolution of an existing
or impending delinquency or other default; from satisfaction of Freddie Mac's
guarantee of the ultimate collection of principal; from actions taken to
maintain proper servicing of the mortgage loan or to minimize loss; from
actions taken to maintain the fixed investment trust status of the underlying
mortgage pool and certain other circumstances. In determining whether a
mortgage loan should be repurchased, Freddie Mac considers a variety of
factors, including whether the repurchase will reduce Freddie Mac's
administrative costs or Freddie Mac's possible exposure under its guarantees.
Under certain circumstances, Freddie Mac may require a seller to repurchase the
underlying mortgage loans. The proceeds of any mortgage loan repurchase will be
passed through to the holder of the participation certificate as if the
mortgage loan had been prepaid. A mortgage loan repurchase will not trigger
payment by the borrower of any prepayment premium nor will it be restricted by
the existence of lockout provisions in the mortgage loan.
Defaults, Delinquencies and Foreclosures. Freddie Mac may resolve an
existing or impending delinquency or other default on a mortgage loan through a
variety of measures. In determining which measures to pursue with respect to a
given mortgage loan and when to initiate such measures, Freddie Mac seeks to
minimize the costs that may be incurred in administering the mortgage loan, as
well as Freddie Mac's possible exposure under its guarantees.
Among the measures that Freddie Mac may pursue, Freddie Mac may approve an
assumption of the mortgage loan by a new borrower, may allow a repayment plan
or period of forbearance during which regular mortgage loan payments may be
reduced or suspended, may approve a modification of certain of the terms of the
mortgage loan if the circumstances indicate that the borrower would be able to
make all payments under the modified mortgage loan terms or may pursue a
refinancing of the mortgage loan, a preforeclosure sale of the mortgaged
property, a deed in lieu of foreclosure or a charge off of the unpaid principal
balance of the mortgage loan or initiate a foreclosure proceeding.
S-50
<PAGE>
In pursuing such measures, Freddie Mac will determine, in its sole
discretion, whether or not to remove the mortgage loan from the underlying
mortgage pool. Removal of the mortgage loan from the pool will result in a
partial prepayment of the Freddie Mac Multifamily Gold PC without payment of a
prepayment premium. If Freddie Mac determines not to remove the mortgage loan
from the pool, the measures Freddie Mac has chosen to pursue to resolve the
existing or impending delinquency or other default will not affect Freddie
Mac's guarantees, and Freddie Mac will continue to make payments in respect of
the mortgage loan as if such measures were not in effect.
Availability of Information. Freddie Mac makes available to investors
information regarding its multifamily participation certificates and the
underlying mortgage pools for such participation certificates. Information
regarding multifamily participation certificates is available from various
sources, including several information vendors that provide both original and
updated securities information. Investors can obtain the names of these vendors
by writing or calling Freddie Mac's Investor Inquiry Department at 8200 Jones
Branch Drive, McLean, Virginia 22102 (outside Washington, DC metropolitan area,
phone (800) 336-FMPC; within Washington, DC metropolitan area, phone (703)
450-3777). Information regarding multifamily participation certificates is also
available from Freddie Mac's Investor Inquiry Department. Freddie Mac's
Internet Web-Site (http://www.freddiemac.com) displays information regarding
multifamily participation certificates.
Freddie Mac provides information about Freddie Mac in an annual
Information Statement that describes its business and operations and contains
its audited financial statements. Supplements to the Information Statement are
also prepared by Freddie Mac periodically and include unaudited financial data
and/or other information concerning Freddie Mac's business and operations.
Investors can obtain Information Statements and Supplements to the Information
Statement by writing or calling Freddie Mac's Investor Inquiry Department at
the address or phone number listed above.
The Technology Station Loan
The Loan. The "Technology Station loan" representing 4.76% of the initial
pool balance was originated by an affiliate of GACC on March 26, 1999, and has
a principal balance as of the cut-off date of $36,811,929. The Technology
Station loan is an ARD loan with an anticipated repayment date of April 1, 2009
and a maturity date of April 1, 2029. The Technology Station borrower is
Technology Station Associates, LLC. The Technology Station loan is secured by,
among other things, a deed of trust encumbering the Technology Station
borrower's fee ownership interest in a 221,378 square foot office property,
which includes 10,205 square feet of retail space, and is located in Santa
Clara County, California. The Technology Station borrower is a bankruptcy
remote, special purpose limited liability company.
The Technology Station borrower is prohibited from voluntarily prepaying
the Technology Station loan through the payment date in March 2005. From the
payment date in April 2005, the Technology Station borrower may prepay the
Technology Station loan in full with a yield maintenance fee. From the payment
date in January 2009 (the payment date which is three months prior to the
anticipated repayment date), the Technology Station borrower may prepay the
Technology Station loan in full without payment of a prepayment premium or
yield maintenance fee. Other payment and prepayment terms for the Technology
Station loan are set forth on Annex A to this prospectus supplement.
S-51
<PAGE>
The Technology Station Property. The Technology Station property was
built in 1998 and 1999 and consists of approximately 221,378 net rentable
square feet. Tenants at the Technology Station property include Magellan Corp.
and ABB Power T&D Company, Inc. Magellan occupies approximately 82,153 gross
leasable square feet (or approximately 37% of total gross leasable square feet)
under a lease that is guaranteed by Orbital Science Corporation, Inc. and ABB
Power occupies approximately 75,000 gross leasable square feet (or
approximately 34% of total gross leasable square feet) under a lease that is
guaranteed by Asea Brown Boveri Inc. The Technology Station property was 100%
occupied as of May 1, 2000.
The following table summarizes the breakdown of the gross leasable area,
or "GLA" and base rent information of the five largest tenants at the
Technology Station property:
FIVE LARGEST TENANTS BASED ON ANNUALIZED BASE RENT
<TABLE>
<CAPTION>
APPROXIMATE ANNUALIZED
LEASE TENANT % OF ANNUALIZED % OF TOTAL BASE RENT
TENANT NAME TYPE OF SPACE EXPIRATION GLA (SF) GLA BASE RENT BASE RENT PER SF
-------------------------- --------------- ------------ ---------- ----------- ------------ ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
ABB Power T&D
Company, Inc. R&D 11/12/08 75,000 33.88% $1,616,402 31.39% $ 21.55
Magellan/Boldfish, Inc. R&D 1/12/09 55,485 25.06 1,231,767 23.92 22.20
Magellan/DCI R&D 2/14/09 26,668 12.05 592,030 11.50 22.20
North American Title Co. Office 1/14/09 13,732 6.20 342,751 6.66 24.96
Frequency Technology Co. R&D 3/18/04 13,030 5.89 331,757 6.44 25.46
------ ----- ---------- ----- --------
Totals 183,915 83.0% $4,114,706 79.90% $ 22.37
======= ===== ========== ===== ========
</TABLE>
The following table summarizes information related to the expiration of
tenant leases of the Technology Station property:
LEASE EXPIRATION SCHEDULE
<TABLE>
<CAPTION>
NUMBER OF
YEAR LEASES EXPIRING SF % OF TOTAL SF ANNUALIZED BASE RENT % OF TOTAL BASE RENT
------- ---------- ------------- --------------- ---------------------- ---------------------
<S> <C> <C> <C> <C> <C>
2000 0 0 0.00% $ 0 0.00%
2001 0 0 0.00 0 0.00
2002 1 1748 0.79 54,538 1.06
2003 0 0 0.00 0 0.00
2004 6 29,836 13.48 868,410 16.86
2005 0 0 0.00 0 0.00
2006 0 0 0.00 0 0.00
2007 0 0 0.00 0 0.00
2008 2 86,471 39.06 1,877,941 36.47
2009 6 103,323 46.67 2,348,836 45.61
</TABLE>
Defeasance. The Technology Station borrower is not permitted to defease
the loan.
Value. The Technology Station loan has a 57.52% cut-off date LTV. An
appraisal performed on June 5, 2000 determined a value for the Technology
Station property of $64,000,000.
Underwritten NCF and DSC Ratio. The Technology Station loan has an
underwritten NCF DSCR of 1.33x and an underwritten NCF of $4,198,865.
S-52
<PAGE>
Lockbox; Certain Reserves. All rents payable by tenants of the Technology
Station property are required to be deposited into a lockbox account controlled
by the servicer. On the first day of each month, the holder of the mortgage is
paid an amount equal to the scheduled monthly payments, any reserve payments
and other amounts due under the Technology Station loan.
Environmental Considerations. The former owner of the Technology Station
property had five leaking underground storage tanks which caused soil and
ground water contamination. The tanks have been removed and an approved
remediation plan has been in effect since 1996. The prior owner has funded a
$240,000 escrow account to cover expenses related to the remediation plan. The
principals of the Technology Station borrower provided a $2,000,000 personal
indemnification and obtained environmental insurance on the property.
Property Management. The Technology Station property is managed by Hunter
Properties, Inc., an affiliate of the Technology Station borrower. The
Technology Station property manager has subordinated its contractual right to
management fees to the lien of the mortgage. If the Technology Station borrower
fails to pay any management fees or any costs of operating the Technology
Station property, the Technology Station property manager must provide the
holder of the Technology Station loan with 60 days notice and an opportunity to
cure before it may terminate the management agreement. The management agreement
is not otherwise terminable by the Technology Station property manager or by
the Technology Station borrower, without the written consent of the holder of
the Technology Station loan. The servicer may replace the Technology Station
property manager as property manager only upon a default under the management
agreement or a default under the loan documents.
Tenant Improvement and Leasing Commission Reserve. The Technology Station
borrower has deposited $105,900, and is required to make monthly deposits of
$20,000, into a reserve account for tenant improvements, lease rollovers,
leasing commission obligations and other expenses. With respect to the $105,900
up-front deposit, $59,500 is allocated to the space occupied by Steven and
Virginia d/b/a Quinzno's and $46,400 is allocated to the space occupied by
Starbucks Corporation.
The Burbank Multifamily Portfolio Loans
The Loans. The "Burbank multifamily portfolio loans" consist of two
mortgage loans representing 3.83% of the initial pool balance which were
originated by Archon Financial, L.P. on May 15, 2000. The Burbank multifamily
portfolio loans have an aggregate principal balance as of the cut-off date of
$29,617,195. The Burbank multifamily portfolio loans are not
cross-collateralized or cross-defaulted. The Burbank multifamily portfolio
loans are balloon loans with a maturity date of June 1, 2010 and are secured
by, among other things, fee mortgages encumbering a 243-unit and a 96-unit
multifamily complex, respectively, each located in Burbank, California. The
borrower under each mortgage loan is a newly-formed special purpose bankruptcy
remote limited liability company.
Payment and prepayment terms for each of the Burbank multifamily portfolio
loans are set forth on Annex A to this prospectus supplement.
The Parc Pointe Apartments Property. The Parc Pointe Apartments property
is a garden multifamily complex with 243 units. The property was built in 1990
and as of May 9, 2000 was 98% occupied.
S-53
<PAGE>
The Oaks Apartment Property. The Oak Apartments property is a garden
multifamily complex with 96 units. The property was built in 1988 and as of May
9, 2000 was 100% occupied.
Defeasance. The borrower under each Burbank multifamily portfolio loan may
obtain the release of the respective property from the lien of the mortgage by
exercising a defeasance option on or after the second anniversary of the
closing date of the certificates.
Value; Underwritten NCF and DSC Ratio. The following table summarizes
information relating to the underwriting and origination of the Burbank
multifamily portfolio loans:
<TABLE>
<CAPTION>
CUT-OFF DATE APPRAISAL UNDERWRITTEN
MORTGAGE LOAN LTV DATE APPRAISAL VALUE NCF DSCR NCF
----------------------- -------------- ---------------- ----------------- ---------- -------------
<S> <C> <C> <C> <C> <C>
Parc Pointe Apartments
Loan 72.58% April 13, 2000 $28,900,000 1.21x $2,251,076
The Oaks Apartments
Loan 73.54% April 13, 2000 $11,750,000 1.21x $ 925,468
</TABLE>
Property Management. The Burbank multifamily portfolio properties are
managed by Anchor Pacifica Management Company, an affiliate of each of the
respective borrowers, which has subordinated its contractual right to
management fees to the lien of the respective mortgages.
The Rialto Building Loan
The Loan. The "Rialto Building loan" representing 3.52% of the initial
pool balance was originated by GMACCM on May 31, 2000 and has a principal
balance as of the cut-off date of $27,222,688. The Rialto Building loan is a
balloon loan with a maturity date of June 5, 2010 and is secured by, among
other things, a deed of trust and security agreement encumbering an office
building with retail space located in downtown San Francisco, California. The
Rialto Building loan was made to 116 HCT LLC, a special purpose bankruptcy
remote limited liability company. Part of the proceeds of the Rialto Building
loan was used to repay a mortgage loan that was secured by the Rialto Building
property and held by another securitization trust established by the depositor.
Payment and prepayment terms for the Rialto Building loan are set forth on
Annex A to this prospectus supplement.
The Rialto Building Property. The Rialto Building property consists of
approximately 111,423 square feet of office space, 12,595 square feet of retail
space, 12,816 square feet of basement space and 3,372 square feet of mezzanine
space. The Rialto Building property was built in 1901 and is currently
undergoing renovations. The Rialto Property was 92.0% occupied as of May 17,
2000. A seismic review of the Rialto Property indicated a probable maximum loss
of 24% and earthquake insurance is required to be maintained by the Rialto
Building borrower and has been obtained.
The following table summarizes the breakdown of the gross leasable area
and base rent information for the five largest tenants at the Rialto Building
property:
S-54
<PAGE>
FIVE LARGEST TENANTS
<TABLE>
<CAPTION>
APPROXIMATE ANNUALIZED
TENANT ANNUALIZED % OF TOTAL BASE RENT
TENANT NAME LEASE EXPIRATION GLA (SF) % OF GLA BASE RENT BASE RENT PER SF
----------------------- ------------------ ---------- ---------- ------------ ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
TPL 7/31/10 39,312 28.04% $1,068,425 23.04% $ 27.18
Double Click, Inc. 4/30/01 18,885 13.47 774,344 16.70 41.00
Walgreens 6/30/30 12,000 8.56 450,000 9.70 37.50
SFMOMA 7/31/04 7,153 5.10 271,812 5.86 38.00
M&R Valuation Service 2/28/03 4,227 3.01 156,396 3.37 37.00
------ ----- ---------- ----- --------
Totals 81,577 58.18% $2,720,977 58.67%
====== ===== ========== =====
</TABLE>
The following table summarizes information related to the expiration of
the leases of the Rialto Building 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>
2000 9 8,841 6.31% $ 329,249 7.10%
2001 6 25,615 18.27 978,181 21.09
2002 7 6,526 4.65 192,019 4.14
2003 13 19,977 14.24 575,303 12.41
2004 2 8,958 6.39 338,597 7.30
2005 2 3,317 2.37 135,280 2.92
2006 1 4,053 2.89 156,817 3.38
2007 0 0 0 0 0.00
2008 0 0 0 0 0.00
2009 0 0 0 0 0.00
2009+ 2 51,312 36.60 1,518,425 32.74
</TABLE>
Defeasance. The Rialto Building borrower may obtain the release of the
Rialto Building property from the lien of the deed of trust and security
agreement by exercising a defeasance option on or after the second anniversary
of the closing date of the certificates.
Value. The Rialto Building loan has a 69.61% cut-off date LTV calculated
based on the principal balance of the mortgage loan as of the cut-off date net
of the earnout reserve amount and a cut-off date LTV of 71.64% calculated based
on the principal balance of the loan as of the cut-off date. An appraisal
performed in April 2000 determined a value for the Rialto Building property of
$38,000,000.
Underwritten NCF and DSC Ratio. The Rialto Building loan has an
underwritten NCF of $3,105,838. The Rialto Building loan has an underwritten
NCF DSCR of 1.28x calculated based on the principal balance of the Rialto
Building loan as of the cut-off date net of the earnout reserve amount and an
underwritten NCF DSCR of 1.24x calculated based on the principal balance of the
mortgage loan as of the cut-off date.
Property Management. The Rialto Building property is managed by Redding
Management, Inc., an affiliate of the Rialto Building borrower.
Debt Service Reserve; Earnout Reserve. In connection with the closing of
the Rialto Building loan, the Rialto Building borrower was required to
establish a debt service reserve account and an earnout reserve account. The
debt service reserve account was established at the closing of the Rialto
Building loan in the amount of $3,930,000. Subsequent to the closing of the
mortgage loan, the Rialto Building borrower received a one-time disbursement of
$3,592,500 after a tenant, Walgreen Co., accepted possession of the premises
that it leased from the Rialto Building borrower
S-55
<PAGE>
and other conditions precedent were satisfied. From July 2000 to October 2000,
a monthly amount of $37,500, and from November 2000 and thereafter, a monthly
amount of $18,750 may be released to the Rialto Building borrower after some
conditions precedent are met. The earnout reserve account was established at
the closing of the Rialto Building loan in the amount of $770,000. This earnout
reserve fund may be disbursed to the Rialto Building borrower after a tenant,
Chipotle Mexican Grill, Inc., actually occupies the premises that it leased
from the Rialto Building borrower and other conditions precedent are satisfied.
If the Rialto Building borrower does not meet the conditions to qualify for the
disbursement of the earnout reserve fund on or before April 1, 2001, the
servicer may apply the earnout reserve fund to prepay the Rialto Building loan.
Any resulting partial prepayment will be required to be accompanied by a yield
maintenance payment.
Lockbox. All rents payable by the tenants of the Rialto Building property
are required to be deposited directly into a lockbox account controlled by the
servicer.
Tenant Improvement and Leasing Commission Reserve. The Rialto Building
borrower deposited $283,275 into a tenant improvement and leasing commission
reserve account. If at any time the occupancy rate of the Rialto Building loan
falls below 85% for a trailing period of six months, the Rialto Building
borrower is required to make monthly deposits of $22,297 into the reserve
account until the occupancy rate reaches 94%. The funds deposited in this
account are reserved for tenant improvement costs and leasing commissions
incurred in connection with the releasing of the space currently occupied by a
tenant, Double Click, Inc.
The Centereach Mall Loan
The Loan. The "Centereach Mall loan" representing 3.00% of the initial
pool balance was originated by an affiliate of GACC on November 30, 1999 and
has a principal balance as of the cut-off date of $23,300,000. The Centereach
Mall loan is a balloon loan with a maturity date of December 1, 2009. The
Centereach Mall loan is evidenced by a promissory note in the original
principal amount of $23,300,000 and is secured by, among other things, a fee
mortgage encumbering a retail shopping mall located in Suffolk County, New
York. The Centereach Mall loan was made to Centereach Mall Associates, L.P., a
special purpose bankruptcy remote limited partnership affiliated with Kimco
Realty Corporation, a publicly traded real estate investment trust listed on
the NYSE under the symbol "KIM".
The Centereach Mall borrower may not voluntarily prepay the loan until the
payment date in September 2009. Additional payment and prepayment terms for the
Centereach Mall loan are set forth on Annex A to this prospectus supplement.
The Centereach Mall Property. The Centereach Mall property is a retail
shopping mall located in Suffolk County, New York. The property was built in
1973 and was renovated in 1995. Tenants at the Centereach Mall property include
Wal-Mart (approximately 151,067 square feet GLA), King Kullen (approximately
33,600 square feet GLA) and Modell's (approximately 18,050 square feet GLA).
King Kullen closed this store in the fall of 1999 but continues to pay its rent
under its lease which expires in December 2003. The rent for this tenant was
excluded from the calculation of the underwritten NCF and underwritten DSCR.
The following table summarizes the breakdown of the gross leasable area
and base rent information of the six largest tenants at the Centereach Mall
property:
S-56
<PAGE>
SIX LARGEST TENANTS BASED ON ANNUALIZED BASE RENT
<TABLE>
<CAPTION>
APPROXIMATE ANNUALIZED
TYPE OF LEASE TENANT % OF ANNUALIZED % OF TOTAL BASE RENT
TENANT NAME SPACE EXPIRATION GLA (SF) GLA BASE RENT BASE RENT PER SF
---------------- --------- ------------ ---------- ----------- ------------ ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Walmart Anchor 8/18/15 151,067 40.72% $1,472,903 41.97% $ 9.75
King Kullen(1) Anchor 12/31/03 33,600 9.06 109,200 3.04 3.25
Modell's Anchor 8/31/09 18,050 4.86 279,810 7.78 15.50
Party City Inline 7/31/07 14,885 4.01 182,341 5.07 12.25
CVS Pharmacy Inline 3/31/04 14,400 3.88 51,480 1.43 3.58
Jo-Ann Stores Inline 1/31/10 14,300 3.85 146,575 4.08 10.25
------- ----- ---------- ----- ------
Totals 246,302 66.38% $2,242,309 62.37% $ 9.10
======= ===== ========== ===== ======
</TABLE>
----------
(1) King Kullen no longer occupies this space but continues to pay rent
under its lease which expires in December 2003. The rent for this
tenant was excluded from the calculation of the underwritten NCF and
underwritten DSCR.
The following table summarizes information related to the expiration of
tenant leases of the Centereach Mall 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>
2000 4 9,408 2.54% $ 159,254 4.43%
2001 1 3,350 0.90 58,625 1.63
2002 4 14,917 4.02 203,979 5.67
2003 6 52,125 14.05 301,720 8.39
2004 5 25,015 6.74 266.499 7.41
2005 3 9,985 2.69 200,856 5.59
2006 0 0 0.00 0 0.00
2007 1 14,885 4.01 182,341 5.07
2008 0 0 0.00 0 0.00
2009 2 21,850 5.89 331,110 9.21
2009+ 5 176,974 47.70 1,891,018 52.60
</TABLE>
Defeasance. The Centereach Mall borrower may obtain a release of the
Centereach Mall property from the lien of the mortgage by exercising a
defeasance option on or after December 1, 2003.
Value. The Centereach Mall loan has a 71.38% cut-off date LTV. An
appraisal performed in August 1999 determined a value for the Centereach Mall
property of $32,500,000.
Underwritten NCF and DSC Ratio. The Centereach Mall loan has an
underwritten NCF DSCR of 1.29x, and an underwritten NCF of $2,699,187.
Property Management. The Centereach Mall property is managed by Kimco
Centereach 605, Inc., an affiliate of the Centereach Mall borrower, which has
subordinated its contractual right to management fees to the lien of the
mortgage. The holder of the Centereach Mall Loan may replace the Centereach
property manager upon a default under the Centereach loan documents.
Lockbox. The Centereach Mall loan does not have a lockbox in place.
Environmental Remediation Reserve. At the origination of the Centereach
Mall loan, $57,500 was deposited into an environmental repair and remediation
reserve to
S-57
<PAGE>
reimburse the Centereach Mall borrower for costs and expenses incurred in
connection with the remediation of environmental issues identified in a
pre-origination environmental report. The Centereach Mall borrower must
complete such remediation within 12 months of origination.
THE SELLERS
GMACCM. GMAC Commercial Mortgage Corporation, 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 200 Witmer Road, Horsham, Pennsylvania 19044. Its telephone number
is (215) 328-4622.
GACC. German American Capital Corporation, 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 Inc., one of the underwriters.
GACC engages primarily in the business of purchasing and holding mortgage loans
pending securitization, repackaging or other disposition. GACC also acts from
time to time as the originator of mortgage loans. Although GACC purchases and
sells mortgage loans for its own account, it does not act as a broker or dealer
in connection with any such mortgage 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, 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 but 33 of the mortgaged properties
which constitute 7.00% of the initial pool balance. "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 12 of the
mortgaged properties which represent 12.44% of the initial pool balance, these
environmental assessments were performed during the 12-month period before the
cut-off date.
Environmental insurance was obtained from an affiliate of American
International Group, Inc. for each mortgage loan where the underlying mortgaged
property or
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<PAGE>
properties were not subject to an environmental assessment. Each environmental
insurance policy insures the trust fund against losses resulting from certain
known and unknown environmental conditions at the related mortgaged property or
properties during the applicable policy period. Subject to certain conditions
and exclusions, the insurance policies generally provide coverage against (i)
losses resulting from default under the applicable mortgage loan, up to the
outstanding balance of the mortgage loan, if on-site environmental conditions
are discovered at the mortgaged property during the policy period and no
foreclosure of the mortgaged property has taken place, (ii) losses from
third-party claims against the lender during the policy period for bodily
injury, property damage or clean-up costs resulting from environmental
conditions at or emanating from the mortgaged property and (iii) after
foreclosure, costs of clean-up of environmental conditions discovered during
the policy period to the extent required by applicable law, including any court
order or other governmental directive.
The information contained in this prospectus supplement is based on the
environmental assessments and has not been independently verified by the
depositor, the sellers, the servicer, the underwriters or any of their
respective affiliates.
Property Condition Assessments
Inspections or updates of previously conducted inspections of all but 7 of
the mortgaged properties, which secure mortgage loans representing 0.81% of the
initial pool balance, were conducted in connection with the origination or the
purchase of the related mortgage loan by independent licensed engineers or
architects or both. For all but 10 of the mortgaged properties, which secure
mortgage loans representing 9.43% of the initial pool balance, the inspections
were conducted within the 12-month period before the cut-off date for the
related mortgage loan. The inspections were conducted 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 before
closing or cash reserves were established to fund the deferred maintenance or
replacement items or both.
Appraisals
An appraisal for each mortgaged property was performed or an existing
appraisal updated in connection with the origination or the purchase of the
related mortgage loan. For all but 20 of the mortgaged properties, which secure
mortgage loans representing 10.60% of the initial pool balance, the appraisals
were performed during the 12-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 related mortgage loan or the aggregate
original principal balance of any set of cross-collateralized loans. All
appraisals were conducted by an independent appraiser that is state certified
or designated as a member of the Appraisal Institute. For all but 3 mortgaged
properties, which secure mortgage loans representing 0.22% of the initial pool
balance, the appraisal or a separate letter contains a statement by the
appraiser to the effect that the appraisal guidelines of Title XI of the
Financial Institutions Reform, Recovery and Enforcement Act of 1989, were
followed in preparing the appraisal. However, none of the depositor, the
underwriters, or the 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 securing a defaulted mortgage loan for its appraised value."
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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
The mortgage loans typically require that the mortgaged property be
insured by a hazard insurance policy with 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, the
o 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.
The standard form of hazard insurance policy typically 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 contain some conditions and exclusions to coverage.
Each mortgage typically 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 typically 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.
The mortgaged properties are typically not insured for earthquake risk.
For mortgaged properties located in California and some other seismic zones,
the seller typically conducted seismic studies to assess the "probable maximum
loss" for the related mortgaged properties. In some 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.
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 upon satisfaction by the
borrower of leasing-related or other conditions, including, in some cases,
achieving specified debt service coverage
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ratios or loan-to-value ratios. If these conditions are not met, under some
mortgage loans, the related reserve or credit enhancement amount will be
applied to partially defease or prepay the related mortgage loan. Any resulting
partial prepayment may not be required to be accompanied by payment of a
prepayment premium or yield maintenance payment. For a description of the cash
reserves or letters of credit and related earnout information, see Annex A to
this prospectus supplement.
ASSIGNMENT OF THE MORTGAGE LOANS; REPURCHASES AND SUBSTITUTIONS
On or before the closing date, the depositor will acquire the mortgage
loans to be included in the mortgage pool (which will not include the mortgage
loans underlying the Freddie Mac Multifamily Gold PC), 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 then assign its interests in such mortgage
loans, without recourse, to the trustee for the benefit of the holders of the
certificates. On or before the closing date, the depositor will also acquire
the Freddie Mac Multifamily Gold PC from GMACCM. The following discussion does
not apply to the mortgage loans underlying the Freddie Mac Multifamily Gold PC,
which will be conveyed by GMACCM to Freddie Mac in connection with the issuance
of the participation certificate pursuant to Freddie Mac's customary
requirements. See "Description of the Mortgage Assets--Significant Mortgage
Assets--The Freddie Mac Multifamily Gold PC" in this prospectus supplement.
Each seller is a "mortgage asset seller" for purposes of the prospectus.
Each seller is typically 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 the document(s), in each case
with evidence of recording thereon unless the 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 the
assignment 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 the 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 the 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 related original assignments 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 of the ground lease.
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If the 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 the mortgage note, together with an affidavit certifying that the
related original has been lost or destroyed.
The trustee will be required to review the documents delivered to it for
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, subject to receipt of
the applicable recording information.
If the trustee determines that any of the required 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 mortgage loan, the applicable seller
will have 90 days after the earlier of discovery or receipt of notice of the
omission or defect to deliver the document or cure the defect. If that seller
does not cure the omission or defect within the 90 day period, the seller will
be required to repurchase the affected mortgage loan or substitute a
replacement mortgage loan for the affected mortgage loan and pay any
substitution shortfall amount. The purchase price for any mortgage loan
required to be repurchased will be at least equal to the unpaid principal
balance of the 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 and interest on such 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.
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 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.
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REPRESENTATIONS AND WARRANTIES; REPURCHASES
In the applicable mortgage loan purchase agreement or in related
documentation, with 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.
The following discussion does not apply to the mortgage loans underlying
the Freddie Mac Multifamily Gold PC, which will be conveyed by GMACCM to
Freddie Mac in connection with the issuance of the participation certificate.
No representations and warranties regarding such underlying mortgage loans will
be made for the benefit of the trust fund, although certain representations and
warranties will be made by GMACCM for the benefit of Freddie Mac in connection
with the issuance of the participation certificate. See "Description of the
Mortgage Assets--Significant Mortgage Assets--The Freddie Mac Multifamily Gold
PC" in this prospectus supplement.
(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 sub-servicer 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 the 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.
Such permitted encumbrances do not materially interfere with the
security intended to be provided by the related mortgage, the current
use or operation
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of the related mortgaged property or the current ability of the
mortgaged property to generate net operating income sufficient to
service the mortgage loan.
(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 the 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
and is 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.
(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
its maker, subject to any applicable non-recourse provisions and any
applicable state anti-deficiency legislation, enforceable in accordance
with its terms, except as 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 the 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, with 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 the subject of 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 the mortgage loan; and the seller, having made no independent inquiry
other than reviewing the resulting report(s) or employing an
environmental consultant to perform that assessment(s) or both, 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 loan pool.
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(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 similar liens 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(s) as provided under
the related lease(s).
(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, with the exceptions listed
in paragraph (11) above, such as to render the rights and remedies of its
holders 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 the 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 the 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.
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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 seller may cure the breach within 90 days after the earlier of discovery or
receipt of notice of the breach. If the 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 that 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 within that 90-day period 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 LOAN POOL
The description in this prospectus supplement of the mortgage loans and
the mortgaged properties is based upon the mortgage loans that are expected to
constitute the mortgage loan pool or the mortgage loans underlying the Freddie
Mac Multifamily Gold PC 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 loan
pool if the depositor deems the removal necessary or appropriate or if it is
prepaid. A limited number of other mortgage loans may be included in the
mortgage loan pool before the issuance of the offered certificates, unless
including these mortgage loans would materially alter the characteristics of
the mortgage loan pool as described in this prospectus supplement. As a result,
the range of mortgage rates and maturities and some other characteristics of
the mortgage loan pool may vary depending on the actual composition of the
mortgage loan 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 loan pool as described in the preceding paragraph, the removal or
addition will be noted in the Form 8-K.
SERVICING OF THE MORTGAGE LOANS
Set forth below is a description of pertinent provisions of the pooling
and servicing agreement relating to the servicing of the mortgage loans in the
mortgage loan pool. All references to the mortgage loans and the mortgaged
properties under this caption are intended to exclude the mortgage loans and
mortgaged properties underlying the Freddie Mac Multifamily Gold PC. GMACCM
will service the mortgage loans underlying the participation certificate on
behalf of Freddie Mac pursuant to a separate
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servicing agreement between GMACCM and Freddie Mac, in accordance with Freddie
Mac's customary requirements. See "Description of the Mortgage
Assets--Significant Mortgage Assets--The Freddie Mac Multifamily Gold PC" in
this prospectus supplement.
THE SERVICER
As of May 31, 2000, GMAC Commercial Mortgage Corporation had a total
commercial and multifamily mortgage loan servicing portfolio of approximately
$79.2 billion. See "GMAC Commercial Mortgage Corporation" in the prospectus.
Reference is 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 both a "master servicer" and a "special servicer"
for purposes of the prospectus. You should read the information provided in the
prospectus taking account of all supplemental information contained in this
prospectus supplement.
SERVICING STANDARD
The servicer will be responsible under the pooling and servicing agreement
for the servicing and administration of the mortgage loans, other than the
mortgage loans underlying the Freddie Mac Multifamily Gold PC. 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, with the same care, skill
and diligence as is normal and usual in its general mortgage servicing
and REO property management activities on behalf of third parties or
itself, whichever is higher, 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, other than a
mortgage loan underlying the Freddie Mac Multifamily Gold PC, 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 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 in an
involuntary case under any 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 has remained in force undischarged or unstayed for 60 days;
(6) the borrower has 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 for 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
the 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 will
also become a specially serviced mortgage loan. Similarly, no
cross-collateralized mortgage loan will 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.
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TERMINATION OF THE SERVICER FOR 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 the 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 the
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 and 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 controlling class will be the most
subordinate class of principal balance certificates outstanding. Initially the
controlling class will be the Class O certificates. It is anticipated that the
servicer or an affiliate will acquire some subordinate certificates, including
the Class O 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 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.
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 "----Matters Regarding the Master Servicer and the Depositor."
A replacement special servicer will also be
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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 will 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 will be the servicing fee, the special servicing fee, the
special servicing standby fee, the workout fee and the liquidation fee.
Servicing Fee
The servicing fee will be payable monthly on a loan-by-loan basis from
amounts received or advanced for interest on each mortgage loan, other than the
mortgage loans underlying the Freddie Mac Multifamily Gold PC, 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
for each such mortgage loan at the annual servicing fee rate set forth in Annex
A to this prospectus supplement. A portion of the servicing fee received by the
servicer is to be paid to the trustee in respect of its trustee activities and
to the special servicer as a special servicing standby fee. A portion of the
servicing fee on the mortgage loans identified on Annex A to this prospectus
supplement as loan numbers 09-000137, 09-001340, 09-001341 and 09-001344 equal
to 0.08%, 0.04%, 0.04% and 0.08% respectively, is to be paid to the related
sub-servicer of these mortgage loans and a portion of this fee may 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.
The mortgage loans underlying the Freddie Mac Multifamily Gold PC will be
serviced by GMACCM on behalf of Freddie Mac pursuant
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to a separate servicing agreement between GMACCM and Freddie Mac, in accordance
with Freddie Mac's customary requirements. GMACCM will receive a servicing fee
for those servicing activities as described under "Description of the Mortgage
Assets--The Freddie Mac Multifamily Gold PC".
Special Servicing Fees
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. The special servicer will
also be entitled to a special servicing standby fee on each mortgage loan,
other than the mortgage loans underlying the Freddie Mac Multifamily Gold PC,
accruing at a rate equal to 0.005% per annum on the same basis and same
principal amount as any related interest payment due or deemed due on the
mortgage loan is computed. The special servicing standby fee will be payable
from servicing fee collections.
Workout Fee
A workout fee will 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 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 mortgage 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 the
mortgage 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 which
results in 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 the
liquidation proceeds that constitute principal or interest or both.
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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 as additional
servicing compensation. 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.
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 (after giving effect to any grace period) 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 those 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 those 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, special servicing standby
fees and other fees payable to the special servicer 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.
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
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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, some 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 an 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 those
expenses.
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 the 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 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 if the
trustee has actual knowledge of the failure, the trustee will 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 permit the
release of the borrower on or any guarantor of any mortgage loan, other than
the mortgage loans underlying the Freddie Mac Multifamily Gold PC, without the
consent of the trustee or any certificateholder, subject, however, to each of
the following limitations, conditions and restrictions:
(1) with limited exceptions, the servicer may not agree to 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
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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 the mortgage loan has occurred or a default in
respect of payment on the 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 August
2033, which is the rated final distribution date;
(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 of those REMICs 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 as 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;
(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 the 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 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
(4) 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, opposition would not
ultimately prevent the confirmation of the plan or a plan that is
substantially similar.
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ENFORCEMENT OF ARD LOANS
The servicer and any replacement special servicer may not take any
enforcement action on ARD loans for 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 servicer
or replacement special servicer will nevertheless be obligated to direct the
related borrower to establish a lockbox account under the provisions of the
pooling and servicing agreement. If a borrower elects not to repay the
principal due and outstanding on an ARD loan on its anticipated repayment date,
the servicer will notify the borrower of the revised rate, which may not exceed
the related initial mortgage rate plus 2.00%.
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 defaulted mortgage loans that are subject to foreclosure
proceedings. 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 the trustee in
writing. 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 that
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 that 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 required 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
The servicer will be obligated to or may contract with a third party to
operate and manage any mortgaged property acquired as REO property in a manner
that would, in its good faith and reasonable judgment and to the extent
commercially feasible, maximize the trust'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 for income it is anticipated that the trust would derive from the
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
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of the REMIC Provisions or a tax on "prohibited transactions" under Section
860F of the Code----either 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," that income
would be subject to federal tax at the highest marginal corporate tax rate and
(2) "prohibited transactions," that 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 those 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, to 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 inspection performed that describes the condition of the
mortgaged property.
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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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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, other than the mortgage loans underlying the Freddie
Mac Multifamily Gold PC, and all payments under and proceeds of such
mortgage loans received after the cut-off date for that mortgage loan,
exclusive of payments of principal and interest due on or before the
cut-off date for that mortgage loan;
(2) the Freddie Mac Multifamily Gold PC and all payments under and proceeds
of such participation certificate;
(3) any mortgaged property, other than any mortgaged property underlying the
Freddie Mac Multifamily Gold PC, acquired on behalf of the
certificateholders through foreclosure, deed in lieu of foreclosure or
otherwise (upon acquisition, called an REO property);
(4) the funds or assets that are deposited in the certificate account, any
REO account and the interest reserve account;
(5) the rights of the mortgagee under all insurance policies relating to the
mortgage loans; and
(6) 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, other than the mortgage loans underlying the Freddie Mac
Multifamily Gold PC.
DENOMINATIONS
The trust will offer the offered certificates in minimum denominations of
$25,000 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 Clearstream or Euroclear, in Europe, through
participants in the systems, or indirectly through organizations which are
participants in the 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
The offered certificates are expected to be available only in book-entry
form through the facilities of The Depository Trust Company in the United
States or through Clearstream, Luxembourg ("Clearstream") or the Euroclear
System in Europe.
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 their beneficial ownership interest.
Euroclear and Clearstream
The offered certificates will be initially issued to investors through the
book-entry facilities of DTC, or Clearstream or the Euroclear system in Europe
if the investors are participants of those systems, or indirectly through
organizations that are participants in the systems. For any of these classes of
offered certificates, the record holder will be DTC's nominee. Clearstream and
Euroclear will hold omnibus positions on behalf of their participants through
customers' securities accounts in Clearstream's and Euroclear's names on the
books of their respective depositories. The depositories in turn, will hold
positions in customers' securities accounts in the depositories' names on the
books of DTC.
Because of time zone differences, the securities account of a Clearstream
or Euroclear participant as a result of a transaction with a participant, other
than a depositary holding on behalf of Clearstream or Euroclear, will be
credited during the securities settlement processing day, which must be a
business day for Clearstream 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
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to the relevant Euroclear participant or Clearstream participant on that
business day. Cash received in Clearstream or Euroclear as a result of sales of
securities by or through a Clearstream participant or Euroclear participant to
a DTC Participant, other than the depository for Clearstream or Euroclear, will
be received with value on the DTC settlement date, but will be available in the
relevant Clearstream 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 Clearstream 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 Clearstream
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, cross-market
transactions will require delivery of instructions to the relevant European
international clearing system by the counterparty in the system in accordance
with its rules and procedures and within its established deadlines in 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. Clearstream participants or Euroclear participants may not deliver
instructions directly to the depositories.
Clearstream, as a professional depository, holds securities for its
participating organizations and facilitates the clearance and settlement of
securities transactions between Clearstream participants through electronic
book-entry changes in accounts of Clearstream participants, thereby eliminating
the need for physical movement of certificates. As a professional depository,
Clearstream is subject to regulation by the Luxembourg Monetary Institute.
Euroclear was created to hold securities for participants of Euroclear 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. The operator of
Euroclear is the Brussels, Belgium office of Morgan Guaranty Trust Company of
New York, under contract with Euroclear Clearance Systems S.C., a Belgian
co-operative corporation that serves as 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. 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. The terms and
conditions govern transfers of securities and cash within Euroclear,
withdrawals of securities and cash from Euroclear, and receipts of payments for
securities in Euroclear. All securities in Euroclear are held on a fungible
basis without attribution of specific certificates to specific securities
clearance accounts.
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Distributions in respect of the offered certificates will be forwarded by
the trustee to DTC, and DTC will be responsible for forwarding those payments
to participants, each of which will be responsible for disbursing 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 the 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 as to any action of certificateholders of any class to the
extent that participants authorize the 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 the beneficial ownership interests.
Certificate owners will not be recognized by the trustee or servicer as
certificateholders, as that term is used in the pooling and servicing
agreement. Certificate owners that provide the trustee with a certification
acceptable to the trustee stating that the person requesting the information is
a certificate owner will be permitted to request and receive information
furnished to certificateholders by the trustee.
DTC, Clearstream and Euroclear have agreed to the foregoing procedures to
facilitate transfers of the offered certificates among participants of DTC,
Clearstream and Euroclear, but are under no obligation to perform or continue
to perform these procedures, these procedures may be discontinued at any time.
See Annex D hereto.
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 affected class, and thereafter the trustee and the servicer will
recognize the holders of the 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 principal balance will be reduced by any
distributions of principal actually
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made to that class of certificates on that distribution date. The certificate
balances will be further reduced by any realized losses and additional trust
expenses allocated to that class of certificates on that distribution date.
The notional amount of the Class X certificates will equal 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
$773,760,240 (subject to a variance of plus or minus 5%) and will consist of 15
Class X components each corresponding to a different class of principal balance
certificates.
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 certificates will be
fixed and, at all times, will be equal to the pass-through rate specified for
that class on page S-5.
The pass-through rate applicable to the Class A-2, Class B, Class C, Class
D and Class E certificates for any distribution date will be equal to the
lesser of the specified fixed rate on page S-5 and the Weighted Average Net
Mortgage Rate for that distribution date.
The pass-through rate applicable to the Class F certificates for any
distribution date will be equal to the Weighted Average Net Mortgage Rate for
that 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 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, Class H, Class J, Class K, Class
L, Class M, Class N and Class O certificates for any distribution date will be
equal to a specified fixed rate.
No class of REMIC residual certificates will have a specified pass-through
rate.
If any mortgage loan, other than a mortgage loan underlying the Freddie
Mac certificate, 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
mortgage loan on the basis of a 360-day year of twelve 30-day months to
produce the aggregate amount of interest actually accrued on that
mortgage loan during that one-month period at the related mortgage rate
minus the related servicing fee rate for that mortgage loan specified on
Annex A to this prospectus supplement.
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However, for each interest reserve loan, the net mortgage rate for the
one-month period before the due dates in January and February in each year that
is not a leap year, or February only in each year that is a leap year, will be
determined net of the withheld amounts. The net mortgage rate for each interest
reserve loan for the one-month period before the due date in March will be
determined after taking into account the addition of the withheld amounts for
the 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 that 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.
DISTRIBUTIONS
The trustee will make distributions on certificates, to the extent of
available funds, on each distribution date. Except for the final distribution
on any certificate, the trustee will make 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
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 the 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 the 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 at the address last shown on
the books of the trustee. 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.
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.
See "The Pooling and Servicing Agreements----Certificate Account" in the
prospectus.
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Application of the Available Distribution Amount
On each distribution date, the trustee will apply the Available
Distribution Amount for that date in the following order of priority:
(1) to pay interest to the holders of the classes of senior certificates, up
to an amount equal to all distributable certificate interest for each of
those classes of certificates for that distribution date and, to the
extent not previously paid, for each prior distribution date, if any, or,
if the Available Distribution Amount is not sufficient to pay all those
amounts, pro rata among the classes in accordance with the amounts due to
each class;
(2) to pay principal: first to the holders of the Class A-1 certificates, and
then to the holders of the Class A-2 certificates, in each case, up to an
amount equal to the lesser of:
o the then outstanding certificate balance of that class of certificates,
and
o the Principal Distribution Amount for that distribution date;
(3) to reimburse the holders of the classes of Class A certificates, up to an
amount equal to the respective amounts of realized losses and additional
trust expenses, if any, previously allocated to those classes of
certificates and for which no reimbursement has previously been paid, or,
if the Available Distribution Amount is not sufficient to pay all those
amounts, pro rata among the classes in accordance with the amounts due to
each class;
(4) 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 under this clause (4) 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
(5) the remaining portion, if any, of the Available Distribution Amounts to
the holders of the REMIC residual certificates.
However, on each distribution date after the aggregate certificate balance
of the subordinate certificates has been reduced to zero, and in any event on
the final
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distribution date resulting from a termination of the trust, the payments of
principal to be made as contemplated by clause (2) above on the Class A
certificates, will be made to the holders of the respective classes of those
certificates, and pro rata as among those classes in accordance with the
respective then outstanding certificate balances of those classes of
certificates until paid in full.
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 of any Net Aggregate Prepayment
Interest Shortfall for that 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 Balloon Payment Interest
Shortfalls, Prepayment Interest Shortfalls and Extraordinary Prepayment
Interest Shortfalls incurred on the mortgage loans, other than the mortgage
loans underlying the Freddie Mac Multifamily Gold PC, 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 calculated at the master servicing fee rate of
0.02%. 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 that distribution date among each class
of REMIC regular certificates, pro rata, in accordance with the respective
amounts of accrued certificate interest for each class of certificates for that
distribution date.
An assumed monthly payment is an amount deemed due for a mortgage loan,
other than a mortgage loan underlying the Freddie Mac Multifamily Gold PC,
under the following circumstances:
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
that date if the related balloon payment had not come due, but rather the
mortgage loan had continued to amortize in accordance with the balloon loan's
amortization schedule, if
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any, in effect immediately before maturity and had continued to accrue interest
in accordance with the balloon 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 that 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.
DISTRIBUTIONS OF PREPAYMENT PREMIUMS
Any prepayment premium actually collected on a mortgage loan, other than a
mortgage loan underlying the Freddie Mac Multifamily Gold PC, during any
collection period will be distributed on the related distribution date to the
holders of the Class A-1, Class A-2, Class B, Class C, Class D, Class E and
Class F certificates as additional interest and not in reduction of their
certificate balances in an amount up to, in the case of each class, the product
of
<TABLE>
<S> <C> <C> <C> <C>
the prepayment x discount rate fraction x principal allocation fraction
premium for that class of that class
</TABLE>
The discount rate fraction for any class of certificates is a fraction not
greater than 1.0 or less than 0.0 and equal to:
pass-through rate for
that class of certificates - relevant discount rate
---------------------------------------------------
mortgage rate of the
related mortgage loan - relevant discount rate
The principal allocation fraction for each class of certificates for any
distribution date is:
the portion, if any, of the principal distribution
amount allocated to that class of certificates
for that distribution date
---------------------------------------------------
entire Principal Distribution Amount for
that distribution date
The portion of the prepayment premium remaining after the payment of the
amount calculated as described above will be distributed to the holders of the
Class X certificates.
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 the
remaining term to maturity or anticipated repayment date. For some of the
mortgage loans, the discount rate is a semiannual rate.
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.
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<PAGE>
DISTRIBUTIONS OF EXCESS INTEREST
No excess interest collected on an ARD loan will be available for
distribution to the holders of the offered certificates.
DISTRIBUTIONS OF EXCESS LIQUIDATION PROCEEDS
Except to the extent realized losses have been allocated to classes of
certificates that include the offered certificates, excess liquidation proceeds
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 due date immediately following the date upon which the
proceeds were received.
TREATMENT OF REO PROPERTIES
A mortgage loan, other than a mortgage loan underlying the Freddie Mac
Multifamily Gold PC, 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 for the following purposes until the
related REO property is liquidated:
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 costs and
taxes, including some reimbursements payable to the servicer, any replacement
special servicer or the trustee, incurred in connection with the operation and
disposition of the REO property, will be applied by the servicer as principal,
interest and other amounts deemed due on the mortgage loan, and, except as
otherwise described under "----P&I Advances" below, the servicer will be
required to make P&I advances on the mortgage loan 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 interest reserve loan, which are mortgage loans (other
than the mortgage loans underlying the Freddie Mac Multifamily Gold PC) that
bear interest computed on an actual/360 basis, an amount equal to one day's
interest at the related mortgage rate, net of any servicing fee, on the stated
principal balance for that mortgage loan 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
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<PAGE>
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
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 each class of
Class A certificates of principal equal to 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 each other class 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 loans (other than the mortgage loans
underlying the Freddie Mac Multifamily Gold PC) and the aggregate outstanding
principal amount of the Freddie Mac Multifamily Gold PC immediately following
that 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 O, Class N, Class M,
Class L, Class K, Class J, Class H, Class G, Class F, Class E, Class D, Class C
and Class B certificates will be reduced, sequentially in that order until the
deficit or the related certificate balance of that class 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 certificate balances of the Class A-1 and Class A-2 certificates will be
reduced, pro rata in accordance with the remaining certificate balances of
those 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 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.
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The realized loss on a liquidated mortgage loan, or related REO property
or properties, is an amount 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 the 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 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----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 (i) balloon payments and (ii) payments due on the
mortgage loans underlying the Freddie Mac Multifamily Gold PC. Servicing
advances and P&I advances are referred
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to as advances. The servicer will make P&I advances out of its own funds or,
consistent with 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 that distribution
date. Any funds advanced from the certificate account are required to be
replaced by the servicer by the next distribution date. 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, other than the mortgage loans
underlying the Freddie Mac Multifamily Gold PC, during the same month as that
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
that due date or the last day of the related collection period or other
specified date before that 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.
Because Freddie Mac has guaranteed the timely payment of interest and
principal under the Freddie Mac Multifamily Gold PC, the servicer will not be
required to make any advance with respect to payments due under the Freddie Mac
Multifamily Gold PC or the mortgage loans underlying such participation
certificate.
If the servicer fails to make a required P&I advance, the trustee will be
required to make that P&I advance. No advance will be required to be made by
the servicer or trustee if, in the judgment of that person, the advance would
not be recoverable from related proceeds or any other recovery on or in respect
of that mortgage loan. The trustee will be able to rely on any
non-recoverability determination made by the servicer.
If it is determined that an appraisal reduction amount exists for 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 will be made in the principal portion of
any P&I advance. The reduction in the interest portion of the P&I advance will
be equal to 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, the numerator of which is equal to the stated principal
balance of that mortgage loan, net of the appraisal reduction amount,
and the denominator of which is equal to the stated principal balance of
that mortgage loan.
See "----Appraisal Reductions" 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. 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 that 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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<PAGE>
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. Interest on any advance will be payable to the party
making the advance out of default interest or other collections collected on
the related mortgage loan or, if the advance is determined to be
nonrecoverable, 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, other than a mortgage loan underlying the Freddie Mac
Multifamily Gold PC, 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,
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 the appraisal, the servicer is required to obtain an appraisal of the
related mortgaged property from an independent MAI-designated appraiser,
provided that if the mortgage loan has a principal balance of less than
$2,000,000 at that time, a desktop estimation of value may be substituted for
the required appraisal. No appraisal will be required if an appraisal was
obtained within the prior twelve months unless the servicer determines that
such appraisal is materially inaccurate. The cost of the appraisal will be
advanced by the servicer and will be reimbursed to the servicer as a servicing
advance.
As a result of this appraisal, the servicer may determine that an
appraisal reduction amount exists on the 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 the 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
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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, are not amounts related to items
included in clause (4) above and were not taken into account in the
calculation of the appraised value.
If a required appraisal is not obtained within 120 days of the date that
the mortgage loan became a required appraisal loan (or, in the case of a
payment delinquency on the mortgage loan, 120 days of the date of such uncured
delinquency), 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 the required appraisal, 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 mortgage 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 has remained current for twelve consecutive monthly payments, and for
which no other special servicing event or other event that would cause the
mortgage loan to be a required appraisal loan has occurred during the preceding
twelve months. The cost of the updates will be covered by and reimbursable as a
servicing advance.
A modified mortgage loan is any mortgage loan, other than a mortgage loan
underlying the Freddie Mac Multifamily Gold PC, 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
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 loan pool, excluding the mortgage loans underlying the Freddie Mac
Multifamily Gold PC. For a discussion of the particular items of information
included in each distribution date statement, as well as
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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 trustee reports, substantially in the forms provided in Annex B,
which forms are subject to change, and, including substantially the following
information (other than with respect to the mortgage loans underlying the
Freddie Mac Multifamily PC):
(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 to 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 to this prospectus supplement.
(2) A delinquent loan status report including 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) A historical loan modification report including 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
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) A historical loss estimate report including 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 including 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 that date
of determination, including any prepared internally by the
servicer.
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(6) A servicer watch list including a list of mortgage loans that have
experienced a material decrease in debt service coverage or a loss of
or bankruptcy of the largest tenant of which the servicer has actual
knowledge, or that are approaching maturity.
None of these reports will include any information that the servicer
regards as confidential. Neither the servicer nor the trustee will 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. Some 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 the occupancy, revenue, net
operating income and debt service coverage ratio for each mortgage loan,
other than the mortgage loans underlying the Freddie Mac Multifamily
Gold PC, or related mortgaged property as of the determination date
immediately preceding the preparation of the 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, that 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 the mortgage loan; and
o a CMSA periodic loan file containing information on the mortgage loans
and the mortgaged properties (other than the mortgage loans and
mortgaged properties underlying the Freddie Mac Multifamily Gold PC).
In addition, the servicer is also required to perform for each mortgaged
property and REO property (other than the mortgaged properties underlying the
Freddie Mac Multifamily Gold PC):
o Within 30 days after receipt of a quarterly operating statement, if
any, beginning with the calendar quarter ended September 30, 2000, an
operating statement analysis containing revenue, expense, and net
operating income information substantially in accordance with Annex B,
but only to the extent the related borrower is required by the mortgage
to deliver and does deliver, or otherwise agrees to provide and does
provide, that 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, 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, that information, presenting the
computation made in accordance with
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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 analysis 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. 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, consistent with 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 person, the
related distribution date statement (in the form attached hereto as Annex B)
via its internet website initially located at "www.ctslink.com/cmbs". In
addition, the trustee will make available each month, on a restricted basis
solely to privileged persons (as defined below), (i) the CMSA loan periodic
update file, loan setup file, bond level file, collateral summary file, and
property file, (ii) the servicer reports, and (iii) as a convenience to
privileged persons (and not in furtherance of the distribution thereof under
the securities laws), this prospectus supplement, the prospectus and the
pooling and servicing agreement. At the direction of the depositor, the trustee
will remove any or all of such restrictions and make any or all of such
information available to any interested person.
A "privileged person" is any of the following: a party to the pooling and
servicing agreement, a rating agency, a designee of the depositor and any
person who certifies to the trustee, in the form attached to the pooling and
servicing agreement, that such person is a certificateholder, a beneficial
owner of a certificate or a prospective purchaser of a certificate.
The "servicer reports" are comprised of the delinquent loan status report,
the historical loan modification report, the historical loss estimate report,
the REO status report, the watch list, the NOI adjustment worksheet, the
comparative financial status report and the operating statement analysis.
The trustee makes no representations or warranties as to the accuracy or
completeness of any report, document or other information made available on its
internet website and assumes no responsibility therefor. In addition, the
trustee may disclaim responsibility for any information distributed by the
trustee for which it is not the original source.
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. Questions regarding the trustee's
internet website can be directed to the trustee's CMBS customer service desk at
(301) 815-6600.
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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,
o all trustee reports delivered to holders of each 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,
o the Freddie Mac Multifamily Gold PC and the related Freddie Mac
multifamily mortgage participation certificate agreement, and
o the mortgage note, mortgage and other legal documents relating to each
mortgage loan in the trust fund (other than the mortgage loans
underlying the Freddie Mac Multifamily Gold PC), 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 the copies and may also require a confirmation
executed by the requesting person or entity, in a form reasonably acceptable to
the trustee, to the effect that the person or entity making the request is a
beneficial owner or prospective purchaser of offered certificates, is
requesting the information solely for use in evaluating its 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 information available over the internet.
Freddie Mac will also make certain information available with respect to
the Freddie Mac Multifamily Gold PC and related matters as described under
"Description of the mortgage assets--The Freddie Mac Multifamily Gold
PC--Availability of Information."
VOTING RIGHTS
At all times during the term of the pooling and servicing agreement, the
voting rights for the certificates will be allocated as follows:
o 99% among the holders of the classes of principal balance certificates
in proportion to the certificate balances of their certificates,
adjusted as described below, and
o 1% among the holders of the Class X certificates.
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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 O,
Class N, Class M, Class L, Class K, Class J, Class H, Class G, Class F Class E,
Class D, Class C, Class B and Class A certificates (pro rata between the A-1
and 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 the purchase, the depositor, when the
then aggregate stated principal balance of the mortgage assets in the
trust fund 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 assets, 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 the 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, will be applied as described
above under "----Distributions----Application of the Available Distribution
Amount."
THE TRUSTEE
The trustee is Wells Fargo Bank Minnesota, N.A. 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
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combined capital and surplus of not less than $100,000,000, or, in some
cases, a 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 lower ratings that the rating
agencies would permit without causing them to qualify, downgrade or
withdraw any of the then-current ratings of the certificates.
The corporate trust office of the trustee responsible for administration
of the trust is located at 11000 Broken Land Parkway, Columbia, Maryland
21044-3562. Attention: Corporate Trust Services (CMBS)----GMAC Commercial
Mortgage Securities, Inc., Mortgage Pass-Through Certificates, Series 2000-C2.
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 performance 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. You 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 you 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 you that is lower than the anticipated yield. Typically, 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 the yield to maturity of
that certificate. As a result, the effect on yield of principal payments on
offered certificates occurring at a rate higher or lower than the rate
anticipated during any particular period would not be fully offset by a
subsequent like reduction or increase in the rate of principal payments during
a later period.
Applicable Pass-Through Rate
The pass-through rate for each class of offered certificates will be as
specified in "Description of the Certificates----Pass-Through Rates." The yield
on the offered certificates, other than the Class A-1 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 repur-
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chases 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 and Class F certificates and, to the extent that the Weighted Average
Net Mortgage Rate is reduced below the specified fixed rate for the Class A-2,
Class B, Class C, Class D and Class E certificates, reducing the pass-through
rates on those classes of offered certificates.
See "Description of the Mortgage Assets" in this prospectus supplement and
"----Rate and Timing of Principal Payments on the Mortgage Loans" below.
Actual Performance 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 be borne as described in "Risk Factors----Allocations of losses on
the mortgage loans would reduce your payments and yield on your certificates."
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. The yield to holders of offered certificates may also
be affected by measures undertaken by Freddie Mac with respect to the
resolution of existing or impending delinquencies or defaults under the
mortgage loans underlying the Freddie Mac Multifamily Gold PC. Prepayments,
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 Assets----Prepayment Provisions",
"--Earnouts and Additional Collateral Loans" and "Annex A----Characteristics of
the Mortgage Loans--Earnout 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 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 or prepayments on the mortgage loans will depend on future
events and a variety of factors, no assurance can be given as to the actual
rate of principal payments or prepayments. The depositor is not aware of any
publicly available or authoritative statistics that address the historical
prepayment experience of a large group of mortgage loans comparable to the
mortgage loans.
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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, including
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 commercial space in those areas, the
quality of management of the mortgaged properties, the servicing of the
mortgage loans, possible changes in tax laws and other opportunities for
investment. See "Risk Factors" and "Description of the Mortgage Assets" and
"Annex A----Earnout Loans" and "Description of the Mortgage Assets--Earnouts
and Additional Collateral Loans" in this prospectus supplement and "Risk
Factors" and "Yield and Maturity Considerations----The Effects of Prepayments
on Yield" in the prospectus.
The rate of prepayment on the mortgage loan 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 Assets" 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 16 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
those prices did not account for that 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 that class, the shortfall will be
distributable to holders of that 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 that 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 of that certificate is distributed to the holder of that
certificate 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 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,
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.
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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 those payments,
collections and 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 that 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 for 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 period,
defeasance period, yield maintenance period or penalty 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, yield maintenance period or
penalty period will conform to any particular CPR percentages, and no
representation is made that the mortgage loans will prepay in accordance with
the assumptions at any of the CPR percentages shown or at any other particular
prepayment rate, that all the mortgage loans will prepay in accordance with the
assumptions at the same rate or that mortgage loans that are in a prepayment
lock-out period, defeasance period, yield maintenance period or penalty 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 voluntary prepayment of
the mortgage loan. A penalty period is any period during which any voluntary
prepayment of a mortgage loan requires the borrower to make a penalty payment
together with any prepayment of the mortgage loan.
The following tables indicate the percentage of the initial certificate
balance 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 to this
prospectus supplement 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
provided in this prospectus supplement;
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(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 to this prospectus supplement as
being interest-only or having an interest-only period) described on
Annex A to this prospectus supplement;
(3) all scheduled monthly payments, including balloon payments, are
timely received on the applicable due date in each month beginning in
September 2000;
(4) there are no delinquencies or losses, extensions of maturity or
appraisal reduction amounts on the mortgage loans and there are no
casualties or condemnations affecting the mortgaged properties except
as described below in the assumption numbered (5);
(5) condemnation proceeds in the amount of $122,103.60 are received with
respect to loan number 09-0001331 and are applied to prepay principal
of such loan prior to the calculation of the monthly payment due in
September 2000;
(6) prepayments are made on each of the mortgage loans at the indicated
CPR percentages provided in the table without regard to any
limitations in the mortgage loans on partial voluntary principal
prepayments, except to the extent modified below by the assumption
numbered (15);
(7) the ARD loans mature on their respective anticipated repayment
dates;
(8) each of the mortgage loans and the Freddie Mac Multifamily Gold PC
accrues interest under the method specified in Annex A to this
prospectus supplement;
(9) neither the servicer nor the depositor exercises its right of
optional termination described in this prospectus supplement;
(10) Freddie Mac does not exercise (i) its option to redeem the Freddie
Mac Multifamily Gold PC prior to its final payment date or (ii) its
option to remove either of the mortgage loans from the underlying
mortgage pool in order to resolve an existing or impending
delinquency or default;
(11) no mortgage loan is required to be repurchased by a mortgage loan
seller;
(12) no Prepayment Interest Shortfalls are incurred and no prepayment
premiums are collected;
(13) there are no additional trust expenses;
(14) distributions on the certificates are made on the 16th calendar day
of each month, beginning in September 2000;
(15) no prepayments are received on any mortgage loan during that
mortgage loan's prepayment lock-out period, defeasance period, yield
maintenance period or penalty period;
(16) the prepayment provisions for each mortgage loan are as described on
Annex A to this prospectus supplement;
(17) 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" in this prospectus supplement); and
S-102
<PAGE>
(18) the delivery date is August 17, 2000.
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 principal balances of the certificates may be reduced to zero and
the right of the Class X certificates to receive distributions of interest may
end 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. For example, some 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 affect the rate of principal payments to the certificates
even if the average prepayment experience of the mortgage loans is equal to 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. You must make your own decisions as to the
appropriate assumptions, including prepayment assumptions, to be used in
deciding whether to purchase the offered certificates.
You are urged to conduct your own analyses of the rates at which the
mortgage loans may be expected to prepay.
Based on the maturity assumptions, the following tables indicate the
resulting weighted average lives of the Class A-1, Class A-2, Class B, Class C,
Class D and Class E certificates and the percentage of the initial certificate
balance of each 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.
S-103
<PAGE>
PERCENTAGES OF THE INITIAL CERTIFICATE BALANCE OF
THE CLASS A-1 CERTIFICATES AT 0% CPR DURING LOCKOUT,
DEFEASANCE, YIELD MAINTENANCE AND PENALTY PERIOD 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 16, 2001 ...................... 95 95 95 95 95
August 16, 2002 ...................... 90 90 90 90 90
August 16, 2003 ...................... 84 84 84 84 84
August 16, 2004 ...................... 78 78 78 78 78
August 16, 2005 ...................... 53 53 53 53 53
August 16, 2006 ...................... 46 46 46 46 46
August 16, 2007 ...................... 38 37 37 37 29
August 16, 2008 ...................... 21 21 20 20 18
August 16, 2009 ...................... 0 0 0 0 0
August 16, 2010 ...................... 0 0 0 0 0
Weighted Average Life
(in years) .......................... 5.62 5.61 5.60 5.59 5.51
First Principal Payment Date ......... 09/16/00 09/16/00 09/16/00 09/16/00 09/16/00
Last Principal Payment Date .......... 04/16/09 04/16/09 04/16/09 04/16/09 01/16/09
</TABLE>
PERCENTAGES OF THE INITIAL CERTIFICATE BALANCE OF
THE CLASS A-2 CERTIFICATES AT 0% CPR DURING LOCKOUT,
DEFEASANCE, YIELD MAINTENANCE AND PENALTY PERIOD 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 16, 2001 ...................... 100 100 100 100 100
August 16, 2002 ...................... 100 100 100 100 100
August 16, 2003 ...................... 100 100 100 100 100
August 16, 2004 ...................... 100 100 100 100 100
August 16, 2005 ...................... 100 100 100 100 100
August 16, 2006 ...................... 100 100 100 100 100
August 16, 2007 ...................... 100 100 100 100 100
August 16, 2008 ...................... 100 100 100 100 100
August 16, 2009 ...................... 93 93 93 92 85
August 16, 2010 ...................... 0 0 0 0 0
Weighted Average Life
(in years) .......................... 9.56 9.55 9.53 9.51 9.35
First Principal Payment Date ......... 04/16/09 04/16/09 04/16/09 04/16/09 01/16/09
Last Principal Payment Date .......... 06/16/10 06/16/10 06/16/10 06/16/10 04/16/10
</TABLE>
S-104
<PAGE>
PERCENTAGES OF THE INITIAL CERTIFICATE BALANCE OF
THE CLASS B CERTIFICATES AT 0% CPR DURING LOCKOUT,
DEFEASANCE, YIELD MAINTENANCE AND PENALTY PERIOD 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 16, 2001 ...................... 100 100 100 100 100
August 16, 2002 ...................... 100 100 100 100 100
August 16, 2003 ...................... 100 100 100 100 100
August 16, 2004 ...................... 100 100 100 100 100
August 16, 2005 ...................... 100 100 100 100 100
August 16, 2006 ...................... 100 100 100 100 100
August 16, 2007 ...................... 100 100 100 100 100
August 16, 2008 ...................... 100 100 100 100 100
August 16, 2009 ...................... 100 100 100 100 100
August 16, 2010 ...................... 0 0 0 0 0
Weighted Average Life
(in years) .......................... 9.83 9.83 9.83 9.83 9.66
First Principal Payment Date ......... 06/16/10 06/16/10 06/16/10 06/16/10 04/16/10
Last Principal Payment Date .......... 06/16/10 06/16/10 06/16/10 06/16/10 04/16/10
</TABLE>
PERCENTAGES OF THE INITIAL CERTIFICATE BALANCE OF
THE CLASS C CERTIFICATES AT 0% CPR DURING LOCKOUT,
DEFEASANCE, YIELD MAINTENANCE AND PENALTY PERIOD 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 16, 2001 ...................... 100 100 100 100 100
August 16, 2002 ...................... 100 100 100 100 100
August 16, 2003 ...................... 100 100 100 100 100
August 16, 2004 ...................... 100 100 100 100 100
August 16, 2005 ...................... 100 100 100 100 100
August 16, 2006 ...................... 100 100 100 100 100
August 16, 2007 ...................... 100 100 100 100 100
August 16, 2008 ...................... 100 100 100 100 100
August 16, 2009 ...................... 100 100 100 100 100
August 16, 2010 ...................... 0 0 0 0 0
Weighted Average Life
(in years) .......................... 9.86 9.84 9.83 9.83 9.66
First Principal Payment Date ......... 06/16/10 06/16/10 06/16/10 06/16/10 04/16/10
Last Principal Payment Date .......... 07/16/10 07/16/10 06/16/10 06/16/10 04/16/10
</TABLE>
S-105
<PAGE>
PERCENTAGES OF THE INITIAL CERTIFICATE BALANCE OF
THE CLASS D CERTIFICATES AT 0% CPR DURING LOCKOUT,
DEFEASANCE, YIELD MAINTENANCE AND PENALTY PERIOD 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 16, 2001 ...................... 100 100 100 100 100
August 16, 2002 ...................... 100 100 100 100 100
August 16, 2003 ...................... 100 100 100 100 100
August 16, 2004 ...................... 100 100 100 100 100
August 16, 2005 ...................... 100 100 100 100 100
August 16, 2006 ...................... 100 100 100 100 100
August 16, 2007 ...................... 100 100 100 100 100
August 16, 2008 ...................... 100 100 100 100 100
August 16, 2009 ...................... 100 100 100 100 100
August 16, 2010 ...................... 0 0 0 0 0
Weighted Average Life
(in years) .......................... 9.91 9.91 9.89 9.83 9.66
First Principal Payment Date ......... 07/16/10 07/16/10 06/16/10 06/16/10 04/16/10
Last Principal Payment Date .......... 07/16/10 07/16/10 07/16/10 06/16/10 04/16/10
</TABLE>
PERCENTAGES OF THE INITIAL CERTIFICATE BALANCE OF
THE CLASS E CERTIFICATES AT 0% CPR DURING LOCKOUT,
DEFEASANCE, YIELD MAINTENANCE AND PENALTY PERIOD 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 16, 2001 ...................... 100 100 100 100 100
August 16, 2002 ...................... 100 100 100 100 100
August 16, 2003 ...................... 100 100 100 100 100
August 16, 2004 ...................... 100 100 100 100 100
August 16, 2005 ...................... 100 100 100 100 100
August 16, 2006 ...................... 100 100 100 100 100
August 16, 2007 ...................... 100 100 100 100 100
August 16, 2008 ...................... 100 100 100 100 100
August 16, 2009 ...................... 100 100 100 100 100
August 16, 2010 ...................... 0 0 0 0 0
Weighted Average Life
(in years) .......................... 9.91 9.91 9.91 9.89 9.71
First Principal Payment Date ......... 07/16/10 07/16/10 07/16/10 06/16/10 04/16/10
Last Principal Payment Date .......... 07/16/10 07/16/10 07/16/10 07/16/10 05/16/10
</TABLE>
S-106
<PAGE>
PRICE/YIELD TABLES
The tables set forth below show the corporate bond equivalent or CBE yield
and weighted average life in years for each class of offered 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, would cause the
discounted present value of the assumed stream of cash flows as of August ,
2000, to equal the assumed purchase prices, plus accrued interest at the
applicable pass-through rate on page S-5 from and including August 1, 2000 to
but excluding the delivery date, and converting the monthly rates to
semi-annual corporate bond equivalent rates. That calculation does not take
into account variations that may occur in the interest rates at which you 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 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 CERTIFICATES AT THE SPECIFIED CPRS
<TABLE>
<CAPTION>
0% CPR DURING LOCKOUT, DEFEASANCE, YIELD
MAINTENANCE AND PENALTY PERIOD
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-107
<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, YIELD
MAINTENANCE AND PENALTY PERIOD
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, YIELD
MAINTENANCE AND PENALTY PERIOD
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-108
<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, YIELD
MAINTENANCE AND PENALTY PERIOD
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, YIELD
MAINTENANCE AND PENALTY PERIOD
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-109
<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, YIELD
MAINTENANCE AND PENALTY PERIOD
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-110
<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, rulings and decisions now in effect, or proposed
regulations, all of which may 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 Orrick, Herrington &
Sutcliffe LLP, 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," "integrated
transaction," "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 for 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, Orrick, Herrington
& Sutcliffe LLP, special United States federal tax counsel for the depositor,
will deliver its opinion 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, or 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 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--Original Issue Discount" in the prospectus. The Class O
certificates, in addition to evidencing REMIC regular interests, will also
S-111
<PAGE>
evidence undivided beneficial interests in the portion of the trust consisting
of any excess interest collected on ARD loans. Those 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
addressing the treatment of debt instruments issued with original issue
discount. You 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 as specified on
page S-5, 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 that interest (i.e., as "qualified stated interest") would be
recognized by the IRS. Prospective purchasers of the offered certificates are
advised to consult their tax advisors concerning the tax treatment of the
certificates.
See "Federal Income Tax Consequences--REMICs--Original Issue Discount" in
the prospectus.
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 that income is not clear
and certificateholders should consult their tax advisors concerning the
treatment of prepayment premiums.
Some 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 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 affected class of
certificates should consult their tax advisors regarding the possibility of
making an election to amortize that premium. See "Federal Income Tax
Consequences--REMICs--Taxation of Owners of REMIC Regular
Certificates--Premium" in the prospectus.
S-112
<PAGE>
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 effective for payments made after December 31, 2000,
subject to certain transition rules. Prospective investors are urged to consult
their tax advisors regarding the New Regulations.
CHARACTERIZATION OF INVESTMENTS IN OFFERED CERTIFICATES
Class O 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 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 excess interest
actually accrues. Similarly, no portion of that 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 for projected possible payments of excess
interest in advance of its actual accrual, that additional original issue
discount income should be accrued for the affected certificates, or both. Class
O certificateholders should consult with their tax advisors regarding the
overall tax consequences of their right to receive excess interest.
The offered certificates will be treated as "real estate assets" within
the meaning of Section 856(c)(5)(B) 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 the certificates are treated as "real estate
assets" within the meaning of Section 856(c)(5)(B) 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 residential mortgaged properties and,
accordingly, investment in the offered certificates may not be suitable for
certain thrift institutions. See "Description of the Mortgage Assets" 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.
METHOD OF DISTRIBUTION
The depositor has agreed to sell and Goldman, Sachs & Co. and Deutsche
Bank Securities Inc. 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 , 2000, among the depositor, GMACCM and each of the underwriters.
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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,
Clearstream and Euroclear on or about August , 2000, against payment therefor
in immediately available funds.
ALLOCATION TABLE
<TABLE>
<CAPTION>
UNDERWRITER CLASS A-1 CLASS A-2 CLASS B CLASS C CLASS D CLASS E
-------------------------- ----------- ----------- --------- --------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
Deutsche Bank
Securities Inc. .........
Goldman, Sachs &
Co. .....................
Total .................... 100% 100% 100% 100% 100% 100%
=== === === === === ===
</TABLE>
The underwriters have agreed, provided the terms and conditions of the
underwriting agreement are met, to purchase all of the offered certificates if
any are purchased. If either underwriter defaults, the underwriting agreement
provides that, in specified circumstances, the purchase commitment of the
nondefaulting underwriter may be increased or the offering may be terminated.
Under the underwriting agreement, each underwriter must pay for and accept
delivery of its certificates provided that specified conditions are met,
including the receipt of legal opinions, that no stop order suspending the
effectiveness of the depositor's registration statement is in effect, and that
no proceedings for that purpose are pending before or threatened by the SEC.
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 transactions by selling its certificates
to or through dealers. 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 the 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 and Goldman, Sachs &
Co. is an affiliate of GSMC and Archon Financial, L.P.
The depositor will indemnify the underwriters, and under limited
circumstances the underwriters will, severally and not jointly indemnify the
depositor, against specified 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 Certificate-
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holders; 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 the offered certificates will be available on an
ongoing basis. The limited nature of that information regarding the offered
certificates may adversely affect the liquidity of the offered certificates,
even if a secondary market for the offered certificates becomes available.
LEGAL MATTERS
Certain legal matters will be passed upon for the depositor by Orrick,
Herrington & Sutcliffe LLP, and for the underwriters by Brown & Wood LLP.
RATINGS
The offered certificates are required to receive ratings from Fitch and
Standard & Poor's that are not lower than those indicated under "Summary of
Series 2000-C2 Certificates and Pool Characteristics."
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 August 2033 distribution date. The ratings take
into consideration the credit quality of the mortgage loan pool and the Freddie
Mac Multifamily Gold PC, structural and legal aspects associated with the
certificates, and the extent to which the payment stream from the mortgage loan
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.
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 by any rating
agency rating that class.
You should evaluate the ratings on the offered certificates independently
from similar ratings on other types of securities. A security rating is not a
recommendation to buy, sell or hold a security and may be changed or withdrawn
at any time by the assigning rating agency.
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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
be "mortgage related securities" for the purposes of the Secondary Mortgage
Market Enhancement Act of 1984 or "SMMEA". No other offered certificates will
be "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 entities in which those plans have invested, such as collective
investment funds, insurance company separate accounts and insurance company
general accounts, 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 under either ERISA or Section 4975 of
the Code or whether there exists any statutory, regulatory or administrative
exemption applicable to those "prohibited transactions."
If you purchase or hold the Class A certificates, 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) as amended by 55 Fed. Reg. 1641 and 55 Fed. Reg. 48939, PTE 94-29,
59 Fed. Reg. 14675 (1994) and FAN 97-03E (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 must be 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 or other substitution of
collateral provisions as described in this prospectus supplement. Accordingly,
it is not clear what the impact on the exemption would be if those defeasance
or other substitution of collateral provisions were exercised. In addition, the
exemption does not apply to subordinated certificates, so neither the exemption
nor any similar exemption issued to the underwriters will apply to the Class B,
Class C, Class D or Class E certificates.
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As a result, if you purchase a Class B, Class C, Class D or Class E
certificate or any interest in these certificates, you will be deemed to have
represented by your purchase that either:
o you are not a plan and you are not purchasing your certificates on behalf
of, or with "plan assets" of, any plan or
o your purchase of any of those certificates 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 your certificate is
an "insurance company general account" as defined in PTCE 95-60 and
(2) the conditions of Sections I and III of PTCE 95-60 have been
satisfied as of the date of the acquisition of your 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--Representation from Investing Plans" in the prospectus, may
apply to you. On January 5, 2000, the DOL published final regulations under
Section 401(c) that will generally become applicable on July 5, 2001.
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 your 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>
GLOSSARY
AVAILABLE DISTRIBUTION AMOUNT--The Available Distribution Amount for any
distribution date will generally equal:
(1) all amounts on deposit in the certificate account and the
distribution account as of the close of business on the related
determination date, excluding:
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" in this prospectus supplement; plus
(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; plus
(5) the monthly payment on the Freddie Mac Multifamily Gold PC due in
the same month as that distribution date if received by the
participation certificate's payment date in that month.
BALLOON PAYMENT INTEREST EXCESS--If the due date for any balloon payment
occurs on a later date than the due date in prior months, the amount of
interest (net of related servicing fees and, if applicable, excess interest)
accrued on the related balloon loan, other than a mortgage loan underlying the
Freddie Mac Multifamily Gold PC, for the additional number of days will, to the
extent actually collected in connection with the payment of the balloon payment
on or before the succeeding determination date, constitute a Balloon Payment
Interest Excess.
BALLOON PAYMENT INTEREST SHORTFALL--If the due date for any balloon
payment occurs on an earlier date than the due date in prior months, the
additional amount of
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interest (net of related servicing fees and, if applicable, excess interest)
that would have accrued on the related balloon loan, other than a mortgage loan
underlying in the Freddie Mac Multifamily Gold PC, if the stated maturity date
were on the later date will, to the extent not paid by the borrower, constitute
a Balloon Payment Interest Shortfall.
EXTRAORDINARY PREPAYMENT INTEREST SHORTFALL--An Extraordinary Prepayment
Interest Shortfall may occur if a mortgage loan, other than a mortgage loan
underlying the Freddie Mac Multifamily Gold PC, with a due date after the
determination date in any month is prepaid in full or in part and the
prepayment is applied to the mortgage loan before the mortgage loan's due date
in the next collection period. Any part of the interest that would have accrued
at the related net mortgage rate on the prepayment amount from the date of
receipt of the prepayment to, but not including, the mortgage loan's due date
in the next collection period, that is not collected from the related borrower,
without regard to any prepayment premium or excess interest that may have been
collected, and that does not represent a Balloon Payment Interest Shortfall
will be an Extraordinary Prepayment Interest Shortfall.
NET AGGREGATE PREPAYMENT INTEREST SHORTFALL--The Net Aggregate Prepayment
Interest Shortfall for any distribution date will be the amount, if any, by
which the aggregate of all Prepayment Interest Shortfalls incurred on the
mortgage loan pool during the related collection period, exceeds any payment
made by the servicer for that distribution date to cover those Prepayment
Interest Shortfalls.
NET MORTGAGE RATE--The Net Mortgage Rate for any mortgage loan is an
annual rate equal to the related mortgage rate in effect from time to time,
minus the servicing fee rate. The net mortgage rate for the Freddie Mac
Multifamily Gold PC is calculated as an annual rate equal to the related coupon
rate on the participation certificate, minus the trustee 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.
PREPAYMENT INTEREST EXCESS--If a borrower voluntarily prepays a mortgage
loan, other than a mortgage loan underlying the Freddie Mac Multifamily Gold
PC, 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.
PREPAYMENT INTEREST SHORTFALL--If a borrower prepays a mortgage loan other
than a mortgage loan underlying the Freddie Mac Multifamily Gold PC, 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 the prepayment will constitute a Prepayment Interest Shortfall.
PRINCIPAL DISTRIBUTION AMOUNT--The Principal Distribution Amount for any
distribution date will, generally, equal the aggregate of the following,
without duplication:
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(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, other than the mortgage loans
underlying the Freddie Mac Multifamily Gold PC, 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,
other than the mortgage loans underlying the Freddie Mac Multifamily
Gold PC, 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, in each case
excluding the mortgage loans underlying the Freddie Mac Multifamily
Gold PC, 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 the 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, other than the
mortgage loans underlying the Freddie Mac Multifamily Gold PC, 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;
(5) all payments of principal received under the Freddie Mac Multifamily
Gold PC on the payment date occurring during the same calendar month
as that distribution date; and
(6) 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.
WEIGHTED AVERAGE NET MORTGAGE RATE--The Weighted Average Net Mortgage Rate
for each distribution date is the weighted average of the net mortgage rates
for the mortgage loans (other than the mortgage loans underlying the Freddie
Mac Multifamily Gold PC) and the net mortgage rate for the Freddie Mac
Multifamily Gold PC, as of the beginning of the related collection period,
weighted on the basis of their respective stated principal balances outstanding
immediately before that distribution date.
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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 principals 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) with the exception of multifamily and
hospitality properties, 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 circum-
A-1
<PAGE>
stances, 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 seller 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 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 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 only interest for 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 earnout
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 earnout.
The debt service coverage ratio shown for the Freddie Mac Multifamily Gold PC
is (x) the aggregate underwritten net cash flow shown for each of the mortgaged
properties securing the mortgage loans underlying the Freddie Mac Multifamily
Gold PC divided by (y) the aggregate annual debt service shown for the mortgage
loans underlying the Freddie Mac Multifamily Gold PC.
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
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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.
4. "Appraised value" or "original appraisal 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. The appraised value
shown for the Freddie Mac Multifamily Gold PC is the aggregate of the appraised
values for each of the mortgaged properties securing the mortgage loans
underlying the participation certificate.
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 earnout
reserves or additional collateral, if applicable) divided by (b) the appraised
value of the mortgaged property or mortgaged properties. For mortgage loans for
which earnout reserves have been established, cut-off date loan-to-value ratio
is shown assuming that the earnout is not achieved, except as otherwise
indicated. The loan-to-value ratio shown for the Freddie Mac Multifamily Gold
PC is (x) the cut-off date balance of the participation certificate divided by
(y) the appraised value shown for the participation certificate.
6. "Square feet," "sq. ft." or "SF" 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.
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
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<PAGE>
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. The balloon balance shown for the
Freddie Mac Multifamily Gold PC is the aggregate balloon balance of the
mortgage loans underlying the participation certificate.
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. The scheduled maturity date
LTV shown for the Freddie Mac Multifamily Gold PC is the balloon balance of the
participation certificate divided by the aggregate appraised values of the
mortgaged properties securing the mortgage loans underlying the participation
certificate.
11. "Mortgage rate" means, for any mortgage loan, the mortgage rate in
effect as of the cut-off date for that mortgage loan. The mortgage rate
identified on this Annex A for the Freddie Mac Multifamily Gold PC is the
coupon rate for such participation certificate.
12. "Servicing fee rate" for each mortgage loan is the percentage rate per
annum provided in this 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.
The servicing fee rate identified on this Annex A for the Freddie Mac
Multifamily Gold PC is the applicable trustee fee rate.
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. "Remaining 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.
16. "Underwritten net operating income," "underwritten NOI" or "UW NOI"
for any mortgaged property means net cash flow before deducting for capital
expenditures and any deposits to reserves for capital expenditures, including
tenant improvement costs and leasing commissions, as applicable.
INTEREST ONLY LOANS
Loan Number 27387. The mortgage loan requires monthly payments of interest
only (calculated using actual/360 interest accrual method) from June 5, 2000
through
A-4
<PAGE>
May 5, 2001. Commencing on June 5, 2001 and continuing through maturity,
monthly payments of principal and interest in the amount of $251,409.76 are
required.
Loan Number 27396. The mortgage loan requires monthly payments of interest
only (calculated using actual/360 interest accrual method) from June 5, 2000
through May 5, 2001. Commencing on June 5, 2001 and continuing through
maturity, monthly payments of principal and interest in the amount of
$411,855.72 are required.
Loan Number 27754. The mortgage loan requires monthly payments of interest
only (calculated using actual/360 interest accrual method) from August 5, 2000
through July 5, 2002. Commencing on August 5, 2002 and continuing through
maturity, monthly payments of principal and interest in the amount of
$25,346.42 are required.
CERTAIN RESERVES
Loan Number 24161. The mortgage loan requires an initial deposit of
$207,511 into a tenant improvement and leasing commission reserve. The borrower
has posted a letter of credit in lieu of the initial deposit.
Loan Number 24483. The mortgage loan requires an initial deposit of $1,000
into a replacement reserve. The borrower is paying $8,530 per month into the
replacement reserve. Beginning on July 1, 2001 the monthly payment will be
equal to one-twelfth of four and one-half percent of gross revenue from the
immediately preceding calendar year. Beginning on July 1, 2002 the monthly
payment will equal to one-twelfth of five percent of gross revenue from the
immediately preceding calendar year.
Loan Number 24575. The mortgage loan requires an initial deposit of
$243,162 into a tenant improvement and leasing commission reserve. The borrower
has posted a letter of credit in lieu of the initial deposit.
Loan Number 24576. The mortgage loan requires an initial deposit of
$240,315 into a tenant improvement and leasing commission reserve. The borrower
has posted a letter of credit in lieu of the initial deposit.
Loan Number 26002. The mortgage loan requires an initial deposit of
$10,106 into the replacement reserve. The borrower is paying $10,106 per month
into the replacement reserve. Beginning on May 1, 2001 the monthly deposit will
be equal to one-twelfth of five percent of gross revenue for the immediately
preceding calendar year. The mortgage loan also requires monthly payments of
$72,047 each month between June and November, inclusive, throughout the term of
the loan into the seasonality escrow.
Loan Number 27102. The mortgage loan requires an initial deposit of $100
at closing into the replacement reserve. The borrower is paying $15,878 per
month into the replacement reserve. The monthly deposit will be equal to
one-twelfth of four percent of gross revenue for the immediately preceding
calendar year. Beginning on August 1, 2002 the monthly payment will be based
upon one-twelfth of five percent of gross revenue for the immediately preceding
calendar month.
Loan Number 27256. The mortgage loan requires an initial deposit of
$11,818 into the replacement reserve. The borrower is paying $11,818 per month
into the replacement reserve. The amount of the monthly deposit will be equal
to one-twelfth of five percent of gross revenue for the immediately preceding
calendar year. The mortgage loan also requires an initial deposit of $49,280
into the seasonality escrow and monthly payments of $73,960 between June and
November, inclusive, throughout the term of the loan into the seasonality
escrow.
A-5
<PAGE>
Loan Number 27257. The mortgage loan requires an initial deposit of $100
into the replacement reserve. The borrower is paying $16,398 per month into the
replacement reserve. The amount of the monthly deposit will be equal to
one-twelfth of five percent of gross revenue for the immediately preceding
calendar year.
Loan Number 27271. The mortgage loan requires monthly payments of $11,098
into the replacement reserve. Beginning on May 1, 2001 the monthly payment will
be equal to one-twelfth of five percent of gross revenue from the immediately
preceding calendar year.
Loan Number 28000. The mortgage loan requires an initial deposit of $100
at closing into the replacement reserve. Beginning on August 1, 2000 and
continuing until April 30, 2001 the borrower will make payments of $13,266 per
month into the replacement reserve. Beginning on May 1, 2001 the monthly
payment will be equal to one-twelfth of five percent of gross revenue from the
immediately preceding calendar year.
Loan Number 28001. The mortgage loan requires an initial deposit of $100
into the replacement reserve. Beginning on August 1, 2000 and continuing until
April 30, 2001 the borrower will make payments of $14,696 per month into the
replacement reserve. Beginning on May 1, 2001 the monthly payment will be equal
to one-twelfth of five percent of gross revenue for the immediately preceding
calendar year.
Loan Number DBM11379. The mortgage loan requires an initial payment of
$100,000 into a tenant improvement and leasing commission reserve. The borrower
is paying $1,389 per month into the tenant and leasing commission reserve.
Loan Number DBM11414. The mortgage loan requires an initial payment of
$97,470 into a tenant improvement and leasing commission reserve. The borrower
is paying $8,123 per month into the tenant and leasing commission reserve.
Loan Number DBM11828. The mortgage loan requires an initial payment of
$350,000 into a tenant improvement and leasing commission reserve. If this
amount falls below $350,000, the borrower is required to pay $17,000 a month
into the reserve until the amount reaches $350,000.
Loan Number DBM6173. The mortgage loan requires an initial payment of
$105,900 into a tenant improvement and leasing commission reserve. The borrower
is paying $20,000 a month into the tenant improvement and leasing commission
reserve.
Loan Number 09-0001333. The mortgage loan requires an initial deposit of
$422,360 into the tenant improvement and leasing commissions account. All funds
will be released to the borrower upon delivery to the mortgagee of a tenant
estoppel certificate with respect to certain required improvements. In addition
to the initial deposit, the borrower is required to make monthly deposits of
$2,500 into the rollover escrow fund. These funds will be released to the
borrower upon the occurrence of certain tenants electing to renew their
respective leases for not less than 5 years or replacement of such tenants for
a basic rental not less than that required to be paid in the last year of the
term of the lease it is replacing.
Loan Number 09-0001345. The mortgage loan requires an initial deposit of
$650,000 into the tenant improvement and leasing commissions accounts which
will be released in increments as certain tenant improvements are completed,
certificates of occupancy are issued and tenants take occupancy and pay rent.
A-6
<PAGE>
Loan Number 09-0001348. The mortgage loan requires an initial deposit of
$260,000 into the tenant improvement and leasing commissions accounts. Funds
will be disbursed in increments as new leases are entered into with new tenants
and rollover tenant leases are renewed or replaced. In addition to the initial
deposit, the borrower is required to make monthly deposits of $4,000.
Loan Number 09-0001351. The mortgage loan requires an initial deposit of
$469,000 into the tenant improvement and leasing commissions accounts. Funds
will be disbursed from the leasing account in amounts equal to $32 per square
foot of net rentable square feet for tenant improvements plus leasing
commission expenses.
Loan Number 09-0001352. The mortgage loan requires an initial deposit of
$103,000 into the tenant improvement and leasing commissions accounts. Funds
will be released in connection with satisfaction of certain condition relating
to, and renewal or replacement of, each lease expiring in the year 2000. In
addition to the initial deposit, the borrower is required to make monthly
deposits of $3,333.
Loan Number 09-0001353. The mortgage loan requires an initial deposit of
$307,309 into the tenant improvement and leasing commissions accounts. In
addition to the initial deposit, the borrower is required to make monthly
deposits of $8,333.
Loan Number 09-0001359. The mortgage loan requires an initial deposit of
$197,000 into the tenant improvement and leasing commissions accounts. Funds
will be disbursed upon receipt of certain tenant estoppels. In addition to the
initial deposit, the borrower is required to make monthly deposits of $1,500.
Loan Number 09-0001360. The mortgage loan requires an initial deposit of
$300,000 into the tenant improvement and leasing commissions accounts.
Loan Number 09-0001361. The mortgage loan requires a letter of credit to
be issued in the amount of $200,000 in lieu of deposits into a tenant
improvement and leasing escrow in favor of mortgagee.
A-7
<PAGE>
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 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 NET OF
LOAN EARNOUT CUT-OFF DATE CUT-OFF DATE EARNOUT
NUMBER AMOUNT BALANCE LTV LTV
------------- ------------- -------------- -------------- -----------
<S> <C> <C> <C> <C>
26426 $ 460,000 $ 4,908,090 73.26% 66.39%
26750 400,000 4,395,737 75.01 68.19
27800 770,000 27,222,688 71.64 69.61
01-1024869 150,000 2,914,283 62.01 58.81
01-1025819 122,500 2,996,891 75.39 72.31
01-1025231 500,000 3,076,764 69.93 58.56
01-1026339 230,000 2,098,154 47.47 42.27
09-0001353 1,485,000 18,994,291 77.21 71.18
<CAPTION>
FULL
BALANCE NET OF EARLIEST
CUT-OFF EARNOUT DEFEASANCE PREPAYMENT
LOAN DATE NCF UNDERWRITTEN OR PREPAY DEFEASANCE PENALTIES
NUMBER DSCR NCF DSCR DATE OR PREPAY APPLY
------------- ---------- -------------- ------------ ------------ -----------
<S> <C> <C> <C> <C> <C>
26426 1.12x 1.24x 3/31/2001 Prepay Yes
26750 1.10 1.21 5/25/2002 Prepay Yes
27800 1.24 1.28 4/1/2001 Prepay Yes
01-1024869 1.29 1.36 NAP Defeasance NAP
01-1025819 1.20 1.25 8/15/2000 Defeasance NAP
01-1025231 1.22 1.46 1/12/2001 Defeasance NAP
01-1026339 1.54 1.73 NAP Defeasance NAP
09-0001353 1.21 1.32 6/1/2001 Prepay Yes
</TABLE>
A-8
<PAGE>
<TABLE>
<CAPTION>
CONTROL
NUMBER LOAN SELLER LOAN NUMBER PROPERTY NAME PROPERTY TYPE
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<S> <C> <C> <C> <C>
Freddie Mac Participation Certificate
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Freddie Mac Participation Certificate Multifamily
1 GMACCM 27396 Mill Run Apartments Multifamily
2 GMACCM 27387 Schron Portfolio II Multifamily
2a GMACCM 27387-A Royal Crest Apartments Multifamily
2b GMACCM 27387-B Ken Gardens Apartments Multifamily
2c GMACCM 27387-C Douglas Apartments Multifamily
2d GMACCM 27387-D Dutchtown Manor Apartments Multifamily
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Mortgage Loans
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3 Deutsche Bank DBM6173 Technology Station Office
4 GMACCM 27800 Rialto Building Office
5 Deutsche Bank DBM6288 Centereach Mall Anchored Retail
6 Archon Financial 09-0001341 Parc Pointe Apartments Multifamily
7 Archon Financial 09-0001353 One Shoreline Plaza Office
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8 Deutsche Bank DBM10100 Sherburne Portfolio Retail
9 Deutsche Bank DBM9551 Rochester Village Apartments Multifamily
10 Deutsche Bank DBM11414 536 & 544 Fayette Street Industrial
11 GMACCM 26560 Ahwatukee Palms Shopping Center Anchored Retail
12 Deutsche Bank DBM1685 Pacific Point Apartments Multifamily
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13 Archon Financial 09-0001368 Roanoke Portfolio Office
13a Archon Financial 09-0001368-A Valley Park Center Office
13b Archon Financial 09-0001368-B National Park Services Office Building Office
13c Archon Financial 09-0001368-C Park at Valleypointe Office
14 GMACCM 27102 Sheraton Four Points Hotel Lodging
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15 Archon Financial 09-0001352 Mission Commons Anchored Retail
16 Deutsche Bank DBM9724 O'Herron Portfolio Anchored Retail
16a Deutsche Bank DBM9724-A Cross Country Village Shopping Center Anchored Retail
16b Deutsche Bank DBM9724-B Denver Lake Shopping Center Anchored Retail
16c Deutsche Bank DBM9724-C Village of Wendell Shopping Center Anchored Retail
16d Deutsche Bank DBM9724-D Northside Square Shopping Center Anchored Retail
16e Deutsche Bank DBM9724-E River Park Shopping Center Anchored Retail
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17 Archon Financial 09-0001359 The Plaza at Cottonwood Anchored Retail
18 GMACCM 27257 Holiday Inn Express - BWI Lodging
19 Deutsche Bank DBM5774 Partridge Run Apartments Multifamily
20 Deutsche Bank DBM10982 Eastlake Commons Anchored Retail
21 Deutsche Bank DBM12061 County of Los Angeles Office Building Office
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22 Archon Financial 09-0001340 The Oaks Apartments Multifamily
23 GMACCM 24575 Galyan's-Leawood Retail
24 GMACCM 24576 Galyan's-Fairfax Retail
25 Deutsche Bank DBM11067 Brush Hill Office Courte Office
26 Archon Financial 09-0001361 Meriden Parkade Shopping Center Anchored Retail
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27 GMACCM 01-1026401 K-Mart Retail - Chicago Anchored Retail
28 Deutsche Bank DBM11828 The Lafayette Building Office
29 GMACCM 28001 Residence Inn by Marriott Lodging
30 Archon Financial 09-0001345 South Tech Hacienda Business Park Industrial
31 GMACCM 01-1026263 K-Mart Retail - Aurora, Illinois Anchored Retail
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32 Deutsche Bank DBM7884 Woodbury Shopping Center Anchored Retail
33 Archon Financial 09-0001335 Mountain View Shopping Center Anchored Retail
34 Archon Financial 09-0001338 Summerhill Office Plaza Office
35 GMACCM 25149 Center City Apartment Portfolio II Multifamily
35a GMACCM 25149-A 1109 Spruce Street Multifamily
35b GMACCM 25149-B 322 S. 10th Street Multifamily
35c GMACCM 25149-C 927 Spruce Street Multifamily
35d GMACCM 25149-D 1104 Spruce Street Multifamily
35e GMACCM 25149-E 2125-27 Walnut Street Multifamily
35f GMACCM 25149-F 434 Lombard Street Multifamily
35g GMACCM 25149-G 1001 Pine Street Multifamily
35h GMACCM 25149-H 1034 Spruce Street Multifamily
35i GMACCM 25149-I 1616-18 Spruce Street Multifamily
35j GMACCM 25149-J 1957 Locust Street Multifamily
35k GMACCM 25149-K 218 S. 20th Street Multifamily
35l GMACCM 25149-L 1719 Spruce Street Multifamily
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36 Deutsche Bank DBM10594 Bulova Technologies Building Industrial
37 GMACCM 28000 Courtyard by Marriott Lodging
38 Deutsche Bank DBM11402 Heather Glen Apartments Multifamily
39 GMACCM 27256 Hampton Inn Lodging
40 GMACCM 24483 Residence Inn by Marriott Lodging
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41 GMACCM 26002 Paradise Plaza Inn Lodging
42 Archon Financial 09-0001331 Alma-Elliot Square Shopping Center Anchored Retail
43 GMACCM 27433 Industrial Distribution Group Building Industrial
44 GMACCM 01-1020228 Continental Office Building Office
45 Archon Financial 09-0001348 Atrium Center Office
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46 Archon Financial 09-0001351 McCarran Corporate Plaza - Building 1 Office
47 Deutsche Bank DBM8646 Autumn Oaks Apartments Multifamily
48 GMACCM 27271 Residence Inn (Danbury) Lodging
49 Deutsche Bank DBM8009 4200 North 29th Avenue Industrial
50 GMACCM 24161 Galyan's-Plainfield Retail
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51 GMACCM 26426 Bank of America Office Building Office
52 Archon Financial 09-0001355 Crestwood Plaza Anchored Retail
53 Deutsche Bank DBM8977 Fashion Terrace Apartments Multifamily
54 Archon Financial 09-0001337 Metro Arts Building Office
55 GMACCM 26750 Brighton Park Shopping Center Retail
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56 Deutsche Bank DBM8925 901 N. Pitt Street Office
57 Archon Financial 09-0001357 Satellite Court Office Building Office
58 Archon Financial 09-0001339 Continental Court Multifamily
59 Deutsche Bank DBM7785 Mobile Holiday Inn Lodging
60 Archon Financial 09-0001350 McCrory's Warehouse Industrial
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61 GMACCM 01-1027351 Chili's Plaza Retail
62 Deutsche Bank DBM10304 Riverside Green Apartments Multifamily
63 Archon Financial 09-0001360 Net Perceptions Building Office
64 GMACCM 01-1020227 DuPont Medical Building Office
65 Deutsche Bank DBM10749 Wall Street & Northgate Office Buildings Office
65a Deutsche Bank DBM10749-A Wall Street Service Center Office
65b Deutsche Bank DBM10749-B Northgate Office Building Office
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66 Archon Financial 09-0001358 Mebane Mill Apartments - Phase II Multifamily
67 Archon Financial 09-0001333 Champaign Village Shopping Center Anchored Retail
68 Archon Financial 09-0001356 Royal 400 Court Office Building - Phase II Office
69 GMACCM 26209 Office Depot - Hobby Lobby Retail Center Anchored Retail
70 GMACCM 27619 Donna Lynn Apartments Multifamily
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71 Deutsche Bank DBM11379 City Centre Office Building Office
72 Deutsche Bank DBM11301 Tory Estates Multifamily
73 Archon Financial 09-0001362 Crystal River Shopping Center Anchored Retail
74 GMACCM 27754 West Union Corporate Building Industrial
75 Deutsche Bank DBM9440 Sugar Creek Apartments Multifamily
75a Deutsche Bank DBM9440-A Sugar Creek Apartments Multifamily
75b Deutsche Bank DBM9440-B Crestwood Apartments Multifamily
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76 GMACCM 21702 Remond Cliff Plaza Apartments Multifamily
77 Archon Financial 09-0001346 South Tech Polaris Business Park Industrial
78 Deutsche Bank DBM3794 Gold Coast Galleria East Mixed Use
79 Deutsche Bank DBM11651 Briarwood Manor Apartments Multifamily
80 GMACCM 01-1025231 K-Mart Retail - Aurora, Colorado Anchored Retail
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81 GMACCM 01-1025819 The Meadows Apartments - Lacey, WA Multifamily
82 Deutsche Bank DBM8484 Portsmouth Industrial Building Industrial
83 GMACCM 01-1025387 K-Mart Retail - Grand Island Anchored Retail
84 GMACCM 01-1026212 La Brea Office Building Office
85 GMACCM 01-1024869 Gardena Village Shopping Center Retail
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86 Deutsche Bank DBM10118 Mervyn's Plaza Retail
87 Archon Financial 09-0001343 Insight Aircenter Industrial
88 GMACCM 26254 Feeley Apartment Portfolio Multifamily
88a GMACCM 26254-A 64 Monroe Street Multifamily
88b GMACCM 26254-B 125 Monroe Street Multifamily
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88c GMACCM 26254-C 70 Jefferson Street Multifamily
88d GMACCM 26254-D 100 Jefferson Street Multifamily
88e GMACCM 26254-E 102 Jefferson Street Multifamily
89 GMACCM 01-1026584 K-Mart Retail - South Bend, IN Anchored Retail
90 GMACCM 01-1024654 Stonegate Apartments Multifamily
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91 GMACCM 01-1025997 Across Lenox Shopping Center Retail
92 GMACCM 01-1027480 Meadows of Gwinnett County Apartments Multifamily
93 GMACCM 01-1020226 Carpenter's Union Building Office
94 Archon Financial 09-0001344 The Promenade South Shopping Center Anchored Retail
95 Archon Financial 09-0001336 Eagle River Business Center Industrial
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96 GMACCM 01-1026497 9001 Braddock Road Office Building Office
97 GMACCM 27974 Weinerman Multifamily Portfolio Multifamily
97a GMACCM 27974-A Daibes Apartments Multifamily
97b GMACCM 27974-B Crescent Garden Apartments Multifamily
98 GMACCM 01-1023795 Cypress Square Shopping Center Retail
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99 Archon Financial 09-0001364 Clock Tower Plaza Retail
100 GMACCM 01-1026339 Pioneer Center Retail Retail
101 Archon Financial 09-0001332 Fry's at the Island Anchored Retail
102 GMACCM 01-1026456 Sierra Meadows Apartments (Richard's Place) Multifamily
103 GMACCM 01-1027900 BRC Plaza Shopping Center Retail
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104 GMACCM 01-1025814 Ralph's Moreno Valley Retail Anchored Retail
105 GMACCM 01-1025336 Los Frances Apartments Multifamily
106 Archon Financial 09-0001327 Cottonwood Plaza Shopping Center Shadow Anchored Retail
107 Archon Financial 09-0001347 South Tech Rio Industrial
108 GMACCM 26214 Dove Park Townhomes Multifamily
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109 GMACCM 26207 Holcomb Corners Shopping Center Retail
110 GMACCM 01-1025095 College Park Apartments Multifamily
111 GMACCM 01-1021111 The Corners Shopping Center Retail
112 GMACCM 01-1024369 Citrus Heights Plaza Shopping Center Retail
113 GMACCM 01-1025540 Southport Associates Retail Retail
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114 GMACCM 01-1024168 The Shoppes at Kiln Creek Retail
115 GMACCM 01-1025134 Sunset Pointe Apartments Multifamily
116 GMACCM 01-1020971 Bladensburg Shopping Center Retail
117 GMACCM 26190 Candlestick Apartments Multifamily
118 GMACCM 01-1026176 Buckingham Apartments Multifamily
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119 GMACCM 01-1025798 Universal Shoppes Retail Retail
120 Deutsche Bank DBM10628 Vollmer's Village Square Multifamily
121 GMACCM 01-1025199 Southlake Market Loop Industrial
122 GMACCM 01-1025373 2170 N.W. 11th Street Apartments Multifamily
123 GMACCM 01-1024714 Carousel Ranch Mobile Home Park Mobile Home Park
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124 GMACCM 01-1024948 Advance Auto Parts Retail (Combined) Retail
124a GMACCM 01-1024948-A Advance Auto - Sayre Retail
124b GMACCM 01-1024948-B Advance Auto - Wellsboro Retail
125 GMACCM 01-1027902 Denver Creek Apartments Multifamily
126 Deutsche Bank DBM10627 Chesterfield Crossing Anchored Retail
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127 GMACCM 01-1027903 Intermountain Self Storage #1 (Idaho Falls, ID) Self-Storage
128 GMACCM 01-1027904 Intermountain Self Storage #2 (Chubbuck, ID) Self-Storage
129 GMACCM 01-1025907 East Colorado Boulevard Retail Retail
130 GMACCM 01-1027905 Intermountain Self Storage #3 (Chubbuck, ID) Self-Storage
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ADDRESS CITY STATE
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<S> <C> <C>
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Union New Jersey
Hamilton New Jersey
Aberdeen New Jersey
Somerset New Jersey
Lakewood New Jersey
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451-495 El Camino Real Santa Clara California
116 New Montgomery Street San Francisco California
1917 Middle Country Road Centereach New York
620-640 North Hollywood Avenue Burbank California
800 North Shoreline Boulevard Corpus Christi Texas
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Nantucket Island Nantucket Massachusetts
2015 41st Street Rochester Minnesota
536 & 544 Fayette Street Perth Amboy New Jersey
4825 East Warner Road Phoenix Arizona
1714-1746 Ximeno Ave. & 4720-4722 East Atherton Street Long Beach California
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5305 & 5310 Valley Park Drive Roanoke Virginia
5162 Valleypointe Parkway Roanoke Virginia
5221, 5228, 5238 Valleypointe Pkwy & 5251 S. Concourse Drive Roanoke Virginia
1603 Powell Street Emeryville California
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7605 - 7699 West 88th Avenue Westminister Colorado
104A - 104N Thornburg Drive Conover North Carolina
6097 - 6113 South Hwy. 16 Denver North Carolina
758-800 US Highway 64 Wendell North Carolina
1100 - 1116 Aberdeen Road Laurinburg North Carolina
1092 - 1098 Bypass Road Route 24 Vinton Virginia
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10242 - 10260 Coors Boulevard Bypass Albuquerque New Mexico
7481 Ridge Road Hanover Maryland
130 New Road Parsippany New Jersey
44801-44975 Hayes Road Sterling Heights Michigan
2601 Wilshire Boulevard Los Angeles California
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330 North Screenland Drive Burbank California
11801 Nall Avenue Leawood Kansas
12501 Fair Lakes Circle Fairfax Virginia
740-770 Pasquinelli Drive Westmont Illinois
1231 East Main Street Meriden Connecticut
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2050 West Peterson Avenue Chicago Illinois
433 - 441 Chestnut Street Philadelphia Pennsylvania
3333 Centerpoint Parkway Pontiac Michigan
5275 Arville Street Las Vegas Nevada
1250 North Lake Avenue Aurora Illinois
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418 Woodbury Road Hicksville New York
1211 North Commerce Street Ardmore Oklahoma
7465, 7469, 7473, 7477 West Lake Mead Boulevard Las Vegas Nevada
1109 Spruce Street Philadelphia Pennsylvania
322 S. 10th Street Philadelphia Pennsylvania
927 Spruce Street Philadelphia Pennsylvania
1104 Spruce Street Philadelphia Pennsylvania
2125-27 Walnut Street Philadelphia Pennsylvania
434 Lombard Street Philadelphia Pennsylvania
1001 Pine Street Philadelphia Pennsylvania
1034 Spruce Street Philadelphia Pennsylvania
1616-18 Spruce Street Philadelphia Pennsylvania
1957 Locust Street Philadelphia Pennsylvania
218 S. 20th Street Philadelphia Pennsylvania
1719 Spruce Street Philadelphia Pennsylvania
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101 North Queen Street Lancaster Pennsylvania
3555 Centerpoint Parkway Pontiac Michigan
12901 Lord Nelson Lenexa Kansas
4201 Coastal Highway Ocean City Maryland
32 Centerra Parkway Lebanon New Hampshire
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3 Ninth Street Ocean City Maryland
941, 947, 955, 963, 971, 973 and 985 West Elliot Road Chandler Arizona
2100 The Oaks Parkway Belmont North Carolina
1012 14th Street Washington District of Columbia
4801 South University Drive Davie Florida
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5740 South Eastern Avenue Las Vegas Nevada
711 West Casino Road Everett Washington
22 Segar Street Danbury Connecticut
4100 N 29 Terrace & 4200 N 29th Avenue Hollywood Florida
655 Perry Road Plainfield Indiana
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900 West 49th Street Hialeah Florida
6930-6956 Crestwood Boulevard Frederick Maryland
6888 Friars Road San Diego California
5657 Wilshire Boulevard Los Angeles California
1005-1019 E. Grand River Avenue Brighton Michigan
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901 N. Pitt Street Alexandria Virginia
2250 Satellite Boulevard Duluth Georgia
65 S. Chapel Street Newark Delaware
850 South Beltline Highway Mobile Alabama
2955 E. Market Street Springettsbury Township Pennsylvania
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SEC of US Highway 41 and Robinhood Street Sarasota Florida
3422 Durkin Circle Columbus Ohio
7901 Flying Cloud Drive Eden Prairie Minnesota
1234 19th Street Washington District of Columbia
8906 Wall Street Austin Texas
9027 Northgate Boulevard Austin Texas
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1500-3000 East Dogwood Drive Mebane North Carolina
1812-2002 Glen Park Drive Champaign Illinois
3060 Royal Boulevard South Alpharetta Georgia
500 NW State Route 7 Blue Springs Missouri
1301 East Marshall Drive Grand Prairie Texas
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223 East City Hall Avenue Norfolk Virginia
1801 Broadacres Drive Clementon New Jersey
1051 Highway 133 Carbondale Colorado
5865 South Ash Avenue Tempe Arizona
606 Linden Avenue Normal Illinois
404 Vernon Avenue Normal Illinois
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2928 Remond Drive Dallas Texas
3485 West Harmon Avenue Las Vegas Nevada
1021-1029 North Clark Street Chicago Illinois
1351 Good Intent Road Deptford New Jersey
15200 East Colfax Road Aurora Colorado
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3428 West McLeod Road Bellingham Washington
125 Aviation Avenue Portsmouth New Hampshire
3535 West 13th Street Grand Island Nebraska
110 South La Brea Avenue Inglewood California
15435 South Western Avenue Gardena California
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3643-3753 Camp Wisdom Road Dallas Texas
3068 East Sunset Road Las Vegas Nevada
64 Monroe Street Hoboken New Jersey
125 Monroe Street Hoboken New Jersey
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70 Jefferson Street Hoboken New Jersey
100 Jefferson Street Hoboken New Jersey
102 Jefferson Street Hoboken New Jersey
U.S. Route 31 South Bend Indiana
1431 - 1439 Willard Avenue Newington Connecticut
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---------------------------------------------------------------------------------------------------------------------------------
3425 - 3435 Lenox Road Atlanta Georgia
9-22 and 27-29 Britain Drive Lawrenceville Georgia
1003 K Street N.W. Washington District of Columbia
330 Coit Road Richardson Texas
8100 Shaffer Parkway Littleton Colorado
---------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------------
9001 Braddock Road Springfield Virginia
12 Liberty Place Weehawken New Jersey
9005 Third Avenue North Bergen New Jersey
13451 McGregor Boulevard Fort Myers Florida
---------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------------
2005-2073 West Avenue K Lancaster California
501 - 557 Azusa Avenue & 1751 East Rowland Avenue West Covina California
835 West Warner Road Gilbert Arizona
1942 Richards Place Sparks Nevada
12375 - 12505 West Chinden Boulevard Boise Idaho
---------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------------
14930 Perris Boulevard Moreno Valley California
508 Gale Street Laredo Texas
17721-17789 Cottonwood Drive Parker Colorado
4255 Industrial Road Las Vegas Nevada
11334 E. 23rd Street Tulsa Oklahoma
---------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------------
3375 Holcomb Bridge Road Norcross Georgia
3307 College Street Lacey Washington
3002 West 7th Street Ft. Worth Texas
7601 Sunrise Boulevard Citrus Heights California
354 - 378 Western Boulevard Greenwood Indiana
---------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------------
120 Ottis Street Newport News Virginia
10104-10110 NE 60th Street Kirkland Washington
4900-4932 Annapolis Road Bladensburg Maryland
4747 Rigsby Avenue San Antonio Texas
3884 Buckingham Court St. Louis Missouri
---------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------------
6807 - 6809 Visitors Circle Orlando Florida
2829-2846 Eldora & 5305-5319 Breezeway Toledo Ohio
2830 - 2840 Market Loop Southlake Texas
2170 N.W. 11 Street Miami Florida
4315 North Flowing Wells Road Tucson Arizona
---------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------------
930 Elmira Street Sayre Pennsylvania
124 East Avenue Wellsboro Pennsylvania
1160 South Denver Avenue Boise Idaho
11357 Midlothian Turnpike Richmond Virginia
---------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------------
1055 Sunnyside Road Idaho Falls Idaho
201 West Linden Street Chubbuck Idaho
3813 East Colorado Boulevard Pasadena California
4698 Burley Road Chubbuck Idaho
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CROSS % OF AGGREGATE CUMULATIVE % OF MORTGAGE
COLLATERALIZED RELATED ORIGINAL CUT-OFF DATE INITIAL POOL INITIAL POOL RATE
ZIP CODE GROUPS GROUPS BALANCE ($) BALANCE ($) BALANCE BALANCE (%)
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
-----------------------------------------------------------------------------------------------------------------------------------
$89,540,000 $89,540,000 11.57 11.57 7.265
Group A Group 1 $55,600,000 $55,600,000 7.19 8.100
Group A Group 1 $33,940,000 $33,940,000 4.39 8.100
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
95050 $37,200,000 $36,811,929 4.76 16.33 7.6050
94105 $27,250,000 $27,222,688 3.52 19.85 8.4200
11720 $23,300,000 $23,197,884 3.00 22.85 8.1700
91505 Group 2 $21,000,000 $20,976,765 2.71 25.56 8.0600
78401 $19,000,000 $18,994,291 2.45 28.01 8.9700
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
02554 $18,500,000 $18,463,148 2.39 30.40 9.0300
55901 $16,400,000 $16,316,458 2.11 32.51 8.1500
08861 $14,000,000 $13,946,089 1.80 34.31 8.9000
85044 $13,400,000 $13,380,226 1.73 36.04 8.2260
90815 Group 3 $11,905,695 $11,803,024 1.53 37.56 7.3800
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
$11,600,000 $11,600,000 1.50 39.06 8.3000
24019
24019
24019
94608 $11,500,000 $11,492,165 1.49 40.55 8.7800
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
80005 $11,350,000 $11,341,541 1.47 42.01 9.4100
$10,185,000 $10,165,290 1.31 43.33 8.5700
28613
28037
27591
28352
24179
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
87114 $9,928,000 $9,924,254 1.28 44.61 8.4500
21076 Group 4 $9,100,000 $9,084,449 1.17 45.78 8.5000
07054 $9,000,000 $8,966,072 1.16 46.94 8.3400
48313 $8,930,000 $8,912,122 1.15 48.09 8.4500
90057 $8,850,000 $8,841,571 1.14 49.24 8.6000
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
91505 Group 2 $8,650,000 $8,640,430 1.12 50.35 8.0600
66211 Group 5 $8,600,000 $8,545,423 1.10 51.46 8.7540
22033 Group 5 $8,300,000 $8,247,294 1.07 52.52 8.7510
60559 $8,200,000 $8,172,391 1.06 53.58 8.7600
06450 $7,900,000 $7,897,258 1.02 54.60 8.6500
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
60659 Group 6 $7,905,000 $7,893,170 1.02 55.62 8.1800
19106 $7,550,000 $7,535,472 0.97 56.60 8.5900
48341 Group 7 $7,485,000 $7,479,792 0.97 57.56 8.7000
89118 Group 8 $7,007,000 $7,000,777 0.90 58.47 8.8400
60506 Group 6 $6,970,000 $6,959,570 0.90 59.37 8.1800
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
11801 $7,000,000 $6,949,369 0.90 60.26 7.8600
73401 $6,750,000 $6,737,011 0.87 61.13 8.5900
89128 $6,500,000 $6,488,014 0.84 61.97 8.1200
$6,400,000 $6,385,741 0.83 62.80 8.6800
19107
19107
19106
19107
19103
19147
19107
19107
19103
19103
19103
19103
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
17603 $6,400,000 $6,384,510 0.83 63.62 8.5600
48341 Group 7 $6,315,000 $6,310,606 0.82 64.44 8.7000
66215 $6,155,000 $6,140,857 0.79 65.23 8.5800
21842 Group 4 $6,120,000 $6,109,542 0.79 66.02 8.5000
03766 $6,100,000 $6,089,576 0.79 66.81 8.5000
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
21842 $6,000,000 $5,987,587 0.77 67.58 9.2500
85222 Group 9 $6,000,000 $5,987,208 0.77 68.36 8.8200
28012 $5,950,000 $5,947,737 0.77 69.13 8.4300
20005 Group 10 $5,833,000 $5,827,835 0.75 69.88 8.8500
33328 $5,743,000 $5,735,554 0.74 70.62 8.7400
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
89107 $5,300,000 $5,294,538 0.68 71.30 8.3200
98204 Group 3 $5,100,000 $5,068,823 0.66 71.96 7.7800
06810 $5,000,000 $4,996,452 0.65 72.61 8.6250
33020 $4,968,000 $4,950,097 0.64 73.25 8.5100
46168 Group 5 $4,975,000 $4,943,454 0.64 73.88 8.7580
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
33012 $4,910,000 $4,908,090 0.63 74.52 8.3750
21703 $4,550,000 $4,548,184 0.59 75.11 8.3100
92108 $4,550,000 $4,528,629 0.59 75.69 7.9100
90036 $4,450,000 $4,440,966 0.57 76.27 8.4000
48116 $4,400,000 $4,395,737 0.57 76.83 8.5400
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
22314 $4,350,000 $4,336,049 0.56 77.39 8.9350
30097 Group 11 $4,050,000 $4,046,143 0.52 77.92 8.6000
19711 $4,000,000 $3,989,267 0.52 78.43 8.0800
36609 $4,000,000 $3,973,509 0.51 78.95 8.7600
17402 $4,000,000 $3,958,717 0.51 79.46 8.9100
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
34233 $3,950,000 $3,944,511 0.51 79.97 8.4200
43212 $3,850,000 $3,841,605 0.50 80.46 8.1400
55344 $3,830,000 $3,828,648 0.49 80.96 8.6100
20036 Group 10 $3,646,000 $3,642,771 0.47 81.43 8.8500
$3,650,000 $3,642,464 0.47 81.90 8.9200
78754
78758
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
27302 $3,600,000 $3,598,546 0.47 82.37 8.2800
75039 $3,585,000 $3,576,737 0.46 82.83 8.5700
30022 Group 11 $3,500,000 $3,496,667 0.45 83.28 8.6000
64014 $3,450,000 $3,445,100 0.45 83.72 8.3500
75051 $3,400,000 $3,398,606 0.44 84.16 8.2400
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
23510 $3,400,000 $3,395,171 0.44 84.60 8.3500
08021 Group 12 $3,400,000 $3,387,689 0.44 85.04 8.4920
81623 $3,360,000 $3,358,706 0.43 85.47 8.4000
85253 Group 5 $3,300,000 $3,300,000 0.43 85.90 8.3100
$3,200,000 $3,187,777 0.41 86.31 8.2900
61761
61761
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
75211 $3,200,000 $3,170,907 0.41 86.72 8.1600
89103 Group 8 $3,165,000 $3,162,189 0.41 87.13 8.8400
60610 $3,200,000 $3,147,693 0.41 87.54 7.5800
08096 Group 12 $3,100,000 $3,093,072 0.40 87.94 8.6700
80011 $3,080,000 $3,076,764 0.40 88.34 8.2500
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
98226 $3,000,000 $2,996,891 0.39 88.72 8.3000
03801 $3,000,000 $2,988,062 0.39 89.11 8.5200
68803 $2,980,000 $2,972,079 0.38 89.49 8.1250
90301 $2,925,000 $2,920,877 0.38 89.87 8.3750
90247 $2,925,000 $2,914,283 0.38 90.25 9.1250
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
75237 $2,895,000 $2,888,946 0.37 90.62 8.8800
89120 $2,850,000 $2,845,876 0.37 90.99 8.2900
$2,784,000 $2,778,395 0.36 91.35 8.4300
07030
07030
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
07030
07030
07030
46614 $2,700,000 $2,699,030 0.35 91.70 8.5700
06111 Group 13 $2,500,000 $2,490,773 0.32 92.02 8.4200
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
30326 $2,500,000 $2,487,612 0.32 92.34 7.9200
30244 $2,440,000 $2,438,949 0.32 92.66 8.1100
20001 Group 10 $2,420,000 $2,417,857 0.31 92.97 8.8500
75080 $2,346,000 $2,343,971 0.30 93.27 8.9300
80127 $2,310,000 $2,305,192 0.30 93.57 8.3100
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
22151 $2,250,000 $2,246,829 0.29 93.86 8.3750
$2,200,000 $2,199,144 0.28 94.14 8.3750
07087
07047
33919 $2,200,000 $2,192,825 0.28 94.43 8.8750
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
93536 $2,125,000 $2,124,218 0.27 94.70 8.5100
91791 $2,100,000 $2,098,154 0.27 94.97 8.8750
85233 Group 9 $2,080,000 $2,075,466 0.27 95.24 8.7500
89431 $2,050,000 $2,045,827 0.26 95.50 8.3900
83713 $2,100,000 $1,988,786 0.26 95.76 7.8500
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
92553 $1,960,000 $1,939,532 0.25 96.01 8.7500
78041 $1,920,000 $1,916,210 0.25 96.26 8.5000
80134 $1,900,000 $1,894,691 0.24 96.51 9.0600
89103 Group 8 $1,849,000 $1,847,453 0.24 96.74 9.0400
74129 Group 15 $1,740,000 $1,736,728 0.22 96.97 8.6700
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
30092 $1,650,000 $1,646,770 0.21 97.18 8.5300
98503 $1,550,000 $1,548,229 0.20 97.38 7.9400
76107 Group 14 $1,500,000 $1,485,003 0.19 97.57 8.0000
95610 $1,450,000 $1,447,336 0.19 97.76 8.7500
46142 $1,430,000 $1,428,062 0.18 97.94 8.5000
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
23606 $1,430,000 $1,427,095 0.18 98.13 8.9700
98033 $1,200,000 $1,195,296 0.15 98.28 8.1900
27010 $1,200,000 $1,181,413 0.15 98.44 8.6250
78222 Group 15 $1,155,000 $1,152,223 0.15 98.59 8.4300
63108 $1,125,000 $1,123,850 0.15 98.73 8.3500
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
32819 $1,108,000 $1,105,250 0.14 98.87 9.5000
43613 $1,100,000 $1,088,138 0.14 99.01 8.5000
76092 $1,030,000 $1,028,713 0.13 99.15 8.7500
33125 $1,000,000 $997,982 0.13 99.28 8.9900
85705 $1,000,000 $997,734 0.13 99.40 8.6250
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
$926,000 $918,314 0.12 99.52 9.3000
18840
16901
83706 $750,000 $736,304 0.10 99.62 8.2000
23235 $713,000 $708,229 0.09 99.71 8.5000
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
83404 Group B Group 16 $720,000 $703,182 0.09 99.80 9.0000
83202 Group B Group 16 $625,000 $610,400 0.08 99.88 9.0000
91107 $510,000 $509,136 0.07 99.95 9.5000
83202 Group B Group 16 $430,000 $419,956 0.05 100.00 9.0000
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ORIGINAL ORIGINAL
INTEREST INTEREST REMAINING TERM TO
SERVICING ACCRUAL ONLY PERIOD INTEREST ONLY MATURITY
FEE RATE (%) METHOD AMORTIZATION TYPE (MOS.) PERIOD (MOS.) (MOS.)
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
--------------------------------------------------------------------------------------------------------------------------------
0.0025 30 / 360 Interest Only, Then Amortizing 12 9 120
Actual / 360 Interest Only, Then Amortizing 12 9 120
Actual / 360 Interest Only,Then Amortizing 12 9 120
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
0.0575 Actual / 360 Hyper-Amortizing 120
0.0700 Actual / 360 Amortizing Balloon 120
0.0575 Actual / 360 Amortizing Balloon 120
0.0975 Actual / 360 Amortizing Balloon 120
0.0575 Actual / 360 Amortizing Balloon 120
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
0.0575 Actual / 360 Hyper-Amortizing 120
0.0575 Actual / 360 Amortizing Balloon 120
0.0575 Actual / 360 Hyper-Amortizing 120
0.0825 Actual / 360 Amortizing Balloon 120
0.0575 30 / 360 Interest Only ,Then Hyper-Amortizing 22 0 120
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
0.0575 Actual / 360 Amortizing Balloon 120
0.1325 Actual / 360 Hyper-Amortizing 120
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
0.0575 Actual / 360 Amortizing Balloon 60
0.0575 Actual / 360 Hyper-Amortizing 120
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
0.0575 Actual / 360 Amortizing Balloon 120
0.1325 Actual / 360 Hyper-Amortizing 120
0.0575 Actual / 360 Amortizing Balloon 120
0.0575 Actual / 360 Amortizing Balloon 120
0.0575 Actual / 360 Hyper-Amortizing 120
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
0.0975 Actual / 360 Amortizing Balloon 120
0.1325 Actual / 360 Amortizing Balloon 120
0.1325 Actual / 360 Amortizing Balloon 120
0.0575 Actual / 360 Amortizing Balloon 120
0.0575 Actual / 360 Amortizing Balloon 120
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
0.1325 Actual / 360 Amortizing Balloon 120
0.0575 Actual / 360 Amortizing Balloon 120
0.1325 Actual / 360 Hyper-Amortizing 120
0.0575 Actual / 360 Amortizing Balloon 120
0.1325 Actual / 360 Amortizing Balloon 120
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
0.0575 Actual / 360 Amortizing Balloon 120
0.0575 Actual / 360 Amortizing Balloon 120
0.0575 Actual / 360 Amortizing Balloon 120
0.1325 Actual / 360 Amortizing Balloon 120
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
0.0575 Actual / 360 Hyper-Amortizing 120
0.1325 Actual / 360 Hyper-Amortizing 120
0.0575 Actual / 360 Amortizing Balloon 120
0.1325 Actual / 360 Hyper-Amortizing 120
0.1325 Actual / 360 Hyper-Amortizing 120
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
0.1325 Actual / 360 Hyper-Amortizing 120
0.0575 Actual / 360 Amortizing Balloon 120
0.1325 Actual / 360 Amortizing Balloon 120
0.1325 Actual / 360 Amortizing Balloon 60
0.0575 Actual / 360 Amortizing Balloon 120
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
0.0575 Actual / 360 Amortizing Balloon 120
0.0575 Actual / 360 Amortizing Balloon 120
0.1325 Actual / 360 Hyper-Amortizing 120
0.0575 Actual / 360 Amortizing Balloon 120
0.1325 Actual / 360 Amortizing Balloon 120
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
0.1325 Actual / 360 Amortizing Balloon 120
0.0575 Actual / 360 Amortizing Balloon 120
0.0575 Actual / 360 Amortizing Balloon 120
0.1375 Actual / 360 Amortizing Balloon 120
0.1325 Actual / 360 Amortizing Balloon 120
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
0.0575 Actual / 360 Amortizing Balloon 120
0.0575 Actual / 360 Amortizing Balloon 120
0.0575 Actual / 360 Amortizing Balloon 120
0.0575 Actual / 360 Amortizing Balloon 120
0.0575 Actual / 360 Fully Amortizing 120
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
0.1325 Actual / 360 Amortizing Balloon 120
0.0575 Actual / 360 Hyper-Amortizing 120
0.0575 Actual / 360 Amortizing Balloon 120
0.1325 Actual / 360 Amortizing Balloon 60
0.0575 Actual / 360 Hyper-Amortizing 120
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
0.0575 Actual / 360 Amortizing Balloon 120
0.0575 Actual / 360 Amortizing Balloon 120
0.0575 Actual / 360 Amortizing Balloon 120
0.1325 Actual / 360 Amortizing Balloon 120
0.1325 Actual / 360 Amortizing Balloon 120
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
0.0575 Actual / 360 Hyper-Amortizing 120
0.0575 Actual / 360 Hyper-Amortizing 120
0.1075 Actual / 360 Amortizing Balloon 120
0.1325 Actual / 360 Interest Only ,Then Amortizing 24 23 120
0.0575 Actual / 360 Amortizing Balloon 120
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
0.1325 Actual / 360 Amortizing Balloon 120
0.0575 Actual / 360 Amortizing Balloon 120
0.0575 30 / 360 Hyper-Amortizing 120
0.0575 Actual / 360 Amortizing Balloon 300
0.1325 Actual / 360 Hyper-Amortizing 120
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
0.1325 Actual / 360 Amortizing Balloon 120
0.0575 Actual / 360 Amortizing Balloon 120
0.1325 Actual / 360 Hyper-Amortizing 120
0.1325 Actual / 360 Amortizing Balloon 120
0.1325 Actual / 360 Amortizing Balloon 120
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
0.0575 Actual / 360 Amortizing Balloon 120
0.0575 Actual / 360 Amortizing Balloon 120
0.1325 Actual / 360 Amortizing Balloon 120
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
0.1325 Actual / 360 Amortizing Balloon 120
0.1325 Actual / 360 Amortizing Balloon 120
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
0.1325 Actual / 360 Fully Amortizing 240
0.1325 Actual / 360 Amortizing Balloon 120
0.1325 Actual / 360 Amortizing Balloon 60
0.1375 Actual / 360 Amortizing Balloon 120
0.1075 Actual / 360 Amortizing Balloon 120
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
0.1325 Actual / 360 Amortizing Balloon 120
0.1325 Actual / 360 Amortizing Balloon 120
0.1325 Actual / 360 Amortizing Balloon 120
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
0.0575 Actual / 360 Amortizing Balloon 120
0.1325 Actual / 360 Amortizing Balloon 120
0.0575 Actual / 360 Amortizing Balloon 120
0.1325 Actual / 360 Amortizing Balloon 120
0.2575 30 / 360 Fully Amortizing 240
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
0.1325 Actual / 360 Fully Amortizing 180
0.1325 Actual / 360 Amortizing Balloon 120
0.0575 Actual / 360 Amortizing Balloon 120
0.0575 Actual / 360 Amortizing Balloon 120
0.1325 Actual / 360 Amortizing Balloon 120
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
0.1325 Actual / 360 Amortizing Balloon 120
0.1325 Actual / 360 Amortizing Balloon 120
0.1325 Actual / 360 Amortizing Balloon 120
0.2575 Actual / 360 Amortizing Balloon 120
0.1325 Actual / 360 Amortizing Balloon 120
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
0.2575 Actual / 360 Amortizing Balloon 120
0.2575 Actual / 360 Amortizing Balloon 120
0.2575 Actual / 360 Amortizing Balloon 120
0.1325 Actual / 360 Amortizing Balloon 120
0.2575 Actual / 360 Amortizing Balloon 120
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
0.2575 Actual / 360 Amortizing Balloon 120
0.0575 Actual / 360 Amortizing Balloon 120
0.2575 Actual / 360 Amortizing Balloon 120
0.2575 Actual / 360 Amortizing Balloon 120
0.2575 Actual / 360 Amortizing Balloon 120
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
0.2575 Actual / 360 Amortizing Balloon 120
0.2575 30 / 360 Amortizing Balloon 180
0.0575 Actual / 360 Amortizing Balloon 120
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
0.2575 30 / 360 Amortizing Balloon 180
0.2575 30 / 360 Amortizing Balloon 180
0.2575 Actual / 360 Amortizing Balloon 120
0.2575 30 / 360 Amortizing Balloon 180
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ORIGINAL REMAINING
REMAINING AMORTIZATION AMORTIZATION
TERM TO TERM TERM ORIGINATION MATURITY DATE BALLOON OR ARD
MATURITY (MOS.) (MOS.) (MOS.) DATE OR ARD BALANCE ($)
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
------------------------------------------------------------------------------------------------------------------
117 360 360 NAP 05/05/10 $81,585,000
117 360 360 05/04/00 05/05/10 $50,660,330
117 360 360 05/04/00 05/05/10 $30,924,670
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
104 360 344 03/26/99 04/01/09 $32,961,919
118 360 358 05/31/00 06/05/10 $24,607,169
112 360 352 11/30/99 12/01/09 $20,926,582
118 360 358 05/15/00 06/01/10 $18,805,351
119 360 359 06/16/00 07/01/10 $17,370,901
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
115 360 355 02/02/00 03/01/10 $16,937,467
111 360 351 10/08/99 11/01/09 $14,720,268
115 300 295 02/15/00 03/01/10 $11,834,149
117 360 357 04/14/00 05/05/10 $12,048,859
87 360 349 10/30/97 11/01/07 $10,693,589
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
120 360 360 06/30/00 08/01/10 $10,445,689
119 300 299 06/12/00 07/01/10 $9,688,327
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
58 360 358 05/11/00 06/01/05 $11,013,097
116 360 356 03/15/00 04/01/10 $9,228,928
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
119 360 359 06/05/00 07/01/10 $8,972,724
118 300 298 05/11/00 06/01/10 $7,606,382
113 360 353 12/23/99 01/01/10 $8,113,601
116 360 356 03/03/00 04/01/10 $8,069,828
118 360 358 05/18/00 06/01/10 $8,024,245
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
118 360 358 05/15/00 06/01/10 $7,746,014
109 360 349 08/31/99 09/10/09 $7,675,494
109 360 349 08/31/99 09/10/09 $7,407,333
113 360 353 12/21/99 01/01/10 $7,462,600
119 360 359 06/08/00 07/01/10 $7,172,112
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
117 360 357 04/27/00 05/01/10 $7,100,290
116 360 356 03/29/00 04/01/10 $6,844,347
119 300 299 06/09/00 07/01/10 $6,292,133
118 360 358 05/11/00 06/01/10 $6,386,994
117 360 357 04/27/00 05/01/10 $6,260,470
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
108 360 348 07/08/99 08/01/09 $6,241,114
116 360 356 03/31/00 04/01/10 $6,119,119
118 300 298 05/18/00 06/01/10 $5,375,454
115 360 355 02/14/00 03/05/10 $5,814,785
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
117 300 297 04/25/00 05/01/10 $5,359,725
119 300 299 06/09/00 07/01/10 $5,308,594
115 360 355 02/09/00 03/01/10 $5,579,692
118 300 298 05/11/00 06/01/10 $5,115,501
118 300 298 05/09/00 06/01/10 $5,098,783
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
117 300 297 04/04/00 05/01/10 $5,118,749
115 360 355 02/15/00 03/01/10 $5,468,252
119 360 359 06/07/00 07/05/10 $5,375,039
58 360 358 05/15/00 06/01/05 $5,632,091
118 324 322 05/02/00 06/01/10 $5,013,535
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
118 360 358 05/08/00 06/01/10 $4,775,025
110 360 350 09/10/99 10/01/09 $4,538,076
119 300 299 06/27/00 07/01/10 $4,194,546
113 360 353 12/27/99 01/01/10 $4,496,075
109 360 349 08/31/99 09/10/09 $4,440,513
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
119 360 359 06/26/00 07/05/10 $4,429,956
119 360 359 06/16/00 07/01/10 $4,099,014
112 360 352 11/08/99 12/01/09 $4,061,324
116 360 356 03/30/00 04/01/10 $4,016,773
118 360 358 05/25/00 06/05/10 $3,984,087
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
113 360 353 12/23/99 01/01/10 $3,973,964
118 360 358 05/31/00 06/01/10 $3,672,113
117 300 297 04/11/00 05/01/10 $3,304,921
112 300 292 11/15/99 12/01/09 $3,368,752
118 120 118 05/05/00 06/01/10 $0
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
117 360 357 04/13/00 05/01/10 $3,567,657
116 360 356 03/28/00 04/01/10 $3,454,310
119 360 359 06/07/00 07/01/10 $3,474,006
58 360 358 05/15/00 06/01/05 $3,520,419
115 360 355 02/25/00 03/01/10 $3,333,786
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
119 360 359 06/01/00 07/01/10 $3,240,925
115 360 355 02/29/00 03/01/10 $3,249,179
118 360 358 05/31/00 06/01/10 $3,173,432
117 360 357 04/07/00 05/05/10 $3,111,058
119 360 359 06/26/00 07/05/10 $3,058,031
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
117 360 357 04/04/00 05/01/10 $3,065,969
113 360 353 12/29/99 01/01/10 $3,075,790
119 360 359 06/07/00 07/01/10 $3,033,234
119 336 336 06/22/00 07/05/10 $3,005,889
113 360 353 12/27/99 01/01/10 $2,881,510
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
106 360 346 06/08/99 06/10/09 $2,823,392
118 360 358 05/11/00 06/01/10 $2,884,949
99 360 339 10/27/98 11/01/08 $2,782,313
295 360 355 02/29/00 03/01/25 $1,492,135
118 360 358 05/26/00 06/01/10 $2,770,432
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
118 360 358 05/16/00 06/01/10 $2,701,597
112 360 352 11/18/99 12/01/09 $2,716,229
117 300 297 04/28/00 05/01/10 $2,465,337
117 360 357 04/24/00 05/01/10 $2,639,152
115 300 295 03/01/00 03/01/10 $2,487,362
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
115 360 355 02/01/00 03/01/10 $2,641,915
117 360 357 04/27/00 05/01/10 $2,566,446
116 360 356 03/09/00 04/05/10 $2,514,687
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
119 360 359 06/02/00 07/01/10 $2,446,840
113 360 353 12/30/99 01/01/10 $2,257,911
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
237 240 237 04/04/00 05/01/20 $0
119 360 359 06/02/00 07/01/10 $2,187,913
58 360 358 05/15/00 06/01/05 $2,336,646
118 360 358 05/08/00 06/01/10 $2,142,602
116 360 356 03/16/00 04/01/10 $2,080,806
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
117 360 357 04/27/00 05/01/10 $2,030,116
119 360 359 06/26/00 07/05/10 $1,984,909
113 360 353 12/28/99 01/01/10 $2,007,207
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
119 360 359 06/15/00 07/01/10 $1,923,150
118 360 358 06/01/00 06/01/10 $1,915,645
115 360 355 02/18/00 03/01/10 $1,892,741
116 360 356 03/17/00 04/01/10 $1,850,001
212 240 212 03/31/98 04/01/18 $0
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
176 180 176 03/03/00 04/01/15 $0
116 360 356 03/27/00 04/01/10 $1,737,025
114 360 354 01/31/00 02/01/10 $1,739,996
118 360 358 05/11/00 06/01/10 $1,692,691
116 360 356 03/30/00 04/05/10 $1,580,192
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
116 360 356 03/23/00 04/05/10 $1,493,768
118 360 358 05/12/00 06/01/10 $1,384,050
105 360 345 04/30/99 05/01/09 $1,319,159
116 360 356 03/23/00 04/01/10 $1,319,160
117 360 357 04/04/00 05/01/10 $1,293,937
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
115 360 355 02/17/00 03/01/10 $1,307,529
113 360 353 12/10/99 01/01/10 $1,078,058
104 300 284 04/01/99 04/01/09 $987,254
115 360 355 02/25/00 03/05/10 $1,043,488
118 360 358 05/02/00 06/01/10 $1,014,266
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
114 360 354 01/07/00 02/01/10 $1,024,028
109 290 279 08/31/99 09/01/09 $902,270
117 360 357 04/28/00 05/01/10 $937,224
115 360 355 02/11/00 03/01/10 $914,752
115 360 355 02/25/00 03/01/10 $907,445
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
114 240 234 01/20/00 02/01/10 $681,784
154 360 334 05/29/98 06/01/13 $579,814
109 342 331 08/25/99 09/01/09 $633,310
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
156 300 276 07/17/98 08/01/13 $476,984
156 300 276 07/17/98 08/01/13 $414,046
115 360 355 02/29/00 03/01/10 $471,549
156 300 276 07/17/98 08/01/13 $284,866
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ANNUAL
DEBT
PREPAYMENT PROVISION LOAN SELLER LOAN NUMBER SERVICE ($)
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
--------------------------------------------------------------------------------------------------------------------------
Lock/27_Defeasance/91_0%/2
Lock/27_Defeasance/91_0%/2 GMACCM 27396 $4,942,268.64
Lock/27_Defeasance/91_0%/2 GMACCM 27387 $3,016,917.12
GMACCM 27387-A
GMACCM 27387-B
GMACCM 27387-C
GMACCM 27387-D
--------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------
Lock/71_> YM or 1%/45_0%/4 Deutsche Bank DBM6173 $3,153,451.80
Lock/26_Defeasance/93_0%/1 GMACCM 27800 $2,495,830.80
Lock/47_Defeasance/69_0%/4 Deutsche Bank DBM6288 $2,084,837.28
Lock/26_Defeasance/90_0%/4 Archon Financial 09-0001341 $1,859,638.08
Lock/25_Defeasance/91_0%/4 Archon Financial 09-0001353 $1,829,620.20
--------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------
Lock/29_Defeasance/87_0%/4 Deutsche Bank DBM10100 $1,791,056.40
Lock/33_Defeasance/83_0%/4 Deutsche Bank DBM9551 $1,464,680.28
Lock/29_Defeasance/87_0%/4 Deutsche Bank DBM11414 $1,398,363.36
Lock/27_Defeasance/91_0%/2 GMACCM 26560 $1,205,324.76
Lock/57_Defeasance/59_0%/4 Deutsche Bank DBM1685 $987,243.00
--------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------
Lock/24_Defeasance/89_0%/7 Archon Financial 09-0001368 $1,050,660.12
Archon Financial 09-0001368-A
Archon Financial 09-0001368-B
Archon Financial 09-0001368-C
Lock/47_Defeasance/71_0%/2 GMACCM 27102 $1,137,372.36
--------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------
Lock/26_Defeasance/30_0%/4 Archon Financial 09-0001352 $1,136,310.72
Lock/28_Defeasance/88_0%/4 Deutsche Bank DBM9724 $945,836.04
Deutsche Bank DBM9724-A
Deutsche Bank DBM9724-B
Deutsche Bank DBM9724-C
Deutsche Bank DBM9724-D
Deutsche Bank DBM9724-E
--------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------
Lock/25_Defeasance/91_0%/4 Archon Financial 09-0001359 $911,834.52
Lock/47_Defeasance/71_0%/2 GMACCM 27257 $879,308.04
Lock/31_Defeasance/85_0%/4 Deutsche Bank DBM5774 $818,211.24
Lock/28_Defeasance/88_0%/4 Deutsche Bank DBM10982 $820,173.00
Lock/26_Defeasance/90_0%/4 Deutsche Bank DBM12061 $824,124.48
--------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------
Lock/26_Defeasance/90_0%/4 Archon Financial 09-0001340 $765,993.72
Lock/35_Defeasance/83_0%/2 GMACCM 24575 $821,586.36
Lock/35_Defeasance/83_0%/2 GMACCM 24576 $792,708.96
Lock/31_Defeasance/85_0%/4 Deutsche Bank DBM11067 $774,816.12
Lock/25_Defeasance/91_0%/4 Archon Financial 09-0001361 $739,031.52
--------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------
Lock/27_Defeasance/89_0%/4 GMACCM 01-1026401 $707,988.72
Lock/28_Defeasance/88_0%/4 Deutsche Bank DBM11828 $702,422.64
Lock/47_Defeasance/69_0%/4 GMACCM 28001 $735,400.68
Lock/35_Defeasance/81_0%/4 Archon Financial 09-0001345 $666,901.44
Lock/27_Defeasance/89_0%/4 GMACCM 01-1026263 $624,248.16
--------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------
Lock/35_Defeasance/81_0%/4 Deutsche Bank DBM7884 $608,184.00
Lock/28_Defeasance/88_0%/4 Archon Financial 09-0001335 $627,993.72
Lock/26_Defeasance/89_0%/5 Archon Financial 09-0001338 $608,230.32
Lock/29_Defeasance/89_0%/2 GMACCM 25149 $600,350.40
GMACCM 25149-A
GMACCM 25149-B
GMACCM 25149-C
GMACCM 25149-D
GMACCM 25149-E
GMACCM 25149-F
GMACCM 25149-G
GMACCM 25149-H
GMACCM 25149-I
GMACCM 25149-J
GMACCM 25149-K
GMACCM 25149-L
--------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------
Lock/27_Defeasance/89_0%/4 Deutsche Bank DBM10594 $621,522.84
Lock/47_Defeasance/69_0%/4 GMACCM 28000 $620,448.24
Lock/29_Defeasance/87_0%/4 Deutsche Bank DBM11402 $572,112.36
Lock/47_Defeasance/71_0%/2 GMACCM 27256 $591,358.80
Lock/47_Defeasance/71_0%/2 GMACCM 24483 $589,426.32
--------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------
Lock/47_Defeasance/71_0%/2 GMACCM 26002 $616,594.92
Lock/29_Defeasance/87_0%/4 Archon Financial 09-0001331 $570,027.72
Lock/25_Defeasance/93_0%/2 GMACCM 27433 $545,466.00
Lock/26_Defeasance/30_0%/4 GMACCM 01-1020228 $555,665.52
Lock/26_Defeasance/90_0%/4 Archon Financial 09-0001348 $554,781.24
--------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------
Lock/26_Defeasance/90_0%/4 Archon Financial 09-0001351 $480,938.88
Lock/35_Defeasance/81_0%/4 Deutsche Bank DBM8646 $439,713.72
Lock/35_Defeasance/83_0%/2 GMACCM 27271 $488,200.92
Lock/31_Defeasance/85_0%/4 Deutsche Bank DBM8009 $458,819.64
Lock/35_Defeasance/83_0%/2 GMACCM 24161 $475,451.88
--------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------
Lock/25_Defeasance/93_0%/2 GMACCM 26426 $447,834.60
Lock/25_Defeasance/91_0%/4 Archon Financial 09-0001355 $412,496.88
Lock/32_Defeasance/84_0%/4 Deutsche Bank DBM8977 $397,215.12
Lock/28_Defeasance/88_0%/4 Archon Financial 09-0001337 $406,821.36
Lock/26_Defeasance/92_0%/2 GMACCM 26750 $407,484.00
--------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------
Lock/35_Defeasance/81_0%/4 Deutsche Bank DBM8925 $417,573.96
Lock/26_Defeasance/90_0%/4 Archon Financial 09-0001357 $377,141.64
Lock/27_Defeasance/89_0%/4 Archon Financial 09-0001339 $373,019.16
Lock/35_Defeasance/81_0%/4 Deutsche Bank DBM7785 $394,955.16
Lock/26_Defeasance/90_0%/4 Archon Financial 09-0001350 $609,066.96
--------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------
Lock/27_Defeasance/89_0%/4 GMACCM 01-1027351 $361,781.04
Lock/48_Defeasance/68_0%/4 Deutsche Bank DBM10304 $343,518.96
Lock/25_Defeasance/91_0%/4 Archon Financial 09-0001360 $356,981.76
Lock/26_Defeasance/30_0%/4 GMACCM 01-1020227 $347,326.68
Lock/35_Defeasance/81_0%/4 Deutsche Bank DBM10749 $349,906.56
Deutsche Bank DBM10749-A
Deutsche Bank DBM10749-B
--------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------
Lock/25_Defeasance/91_0%/4 Archon Financial 09-0001358 $325,458.72
Lock/29_Defeasance/87_0%/4 Archon Financial 09-0001333 $332,923.08
Lock/26_Defeasance/90_0%/4 Archon Financial 09-0001356 $325,924.80
Lock/27_Defeasance/91_0%/2 GMACCM 26209 $313,939.56
Lock/25_Defeasance/93_0%/2 GMACCM 27619 $306,230.04
--------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------
Lock/27_Defeasance/89_0%/4 Deutsche Bank DBM11379 $309,389.76
Lock/31_Defeasance/85_0%/4 Deutsche Bank DBM11301 $313,485.36
Lock/25_Defeasance/91_0%/4 Archon Financial 09-0001362 $307,173.00
Lock/25_Defeasance/93_0%/2 GMACCM 27754 $304,157.04
Lock/31_Defeasance/85_0%/4 Deutsche Bank DBM9440 $289,566.96
Deutsche Bank DBM9440-A
Deutsche Bank DBM9440-B
--------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------
Lock/38_Defeasance/78_0%/4 GMACCM 21702 $289,309.68
Lock/35_Defeasance/81_0%/4 Archon Financial 09-0001346 $301,233.48
Lock/59_Defeasance/57_0%/4 Deutsche Bank DBM3794 $270,605.04
Lock/29_Defeasance/91_> YM or 1%/119_1%/57_0%/4 Deutsche Bank DBM11651 $290,529.60
Lock/26_Defeasance/90_0%/4 GMACCM 01-1025231 $277,668.12
--------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------
Lock/26_Defeasance/87_0%/7 GMACCM 01-1025819 $271,722.48
Lock/47_Defeasance/69_0%/4 Deutsche Bank DBM8484 $277,319.28
Lock/27_Defeasance/89_0%/4 GMACCM 01-1025387 $278,969.16
Lock/27_Defeasance/89_0%/4 GMACCM 01-1026212 $266,785.32
Lock/29_Defeasance/87_0%/4 GMACCM 01-1024869 $297,568.20
--------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------
Lock/29_Defeasance/87_0%/4 Deutsche Bank DBM10118 $276,530.40
Lock/27_Defeasance/88_0%/5 Archon Financial 09-0001343 $257,895.48
Lock/28_Defeasance/90_0%/2 GMACCM 26254 $255,223.08
GMACCM 26254-A
GMACCM 26254-B
--------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------
GMACCM 26254-C
GMACCM 26254-D
GMACCM 26254-E
Lock/25_Defeasance/91_0%/4 GMACCM 01-1026584 $250,737.12
Lock/31_Defeasance/85_0%/4 GMACCM 01-1024654 $228,975.36
--------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------
Lock/27_Defeasance/209_0%/4 GMACCM 01-1025997 $251,619.36
Lock/25_Defeasance/91_0%/4 GMACCM 01-1027480 $217,095.72
Lock/26_Defeasance/30_0%/4 GMACCM 01-1020226 $230,535.00
Lock/35_Defeasance/81_0%/4 Archon Financial 09-0001344 $225,100.92
Lock/28_Defeasance/88_0%/4 Archon Financial 09-0001336 $209,421.48
--------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------
Lock/27_Defeasance/89_0%/4 GMACCM 01-1026497 $205,219.56
Lock/25_Defeasance/93_0%/2 GMACCM 27974 $200,659.08
GMACCM 27974-A
GMACCM 27974-B
Lock/31_Defeasance/85_0%/4 GMACCM 01-1023795 $210,050.28
--------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------
Lock/25_Defeasance/91_0%/4 Archon Financial 09-0001364 $196,253.64
Lock/26_Defeasance/90_0%/4 GMACCM 01-1026339 $200,502.48
Lock/29_Defeasance/87_0%/4 Archon Financial 09-0001332 $196,360.44
Lock/28_Defeasance/88_0%/4 GMACCM 01-1026456 $187,238.28
Lock/0_> YM or 1%/107_1%/126_0%/7 GMACCM 01-1027900 $208,436.52
--------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------
Lock/28_Defeasance/148_0%/4 GMACCM 01-1025814 $235,070.28
Lock/28_Defeasance/88_0%/4 GMACCM 01-1025336 $177,157.68
Lock/30_Defeasance/86_0%/4 Archon Financial 09-0001327 $184,439.16
Lock/35_Defeasance/81_0%/4 Archon Financial 09-0001347 $179,168.64
Lock/28_Defeasance/90_0%/2 GMACCM 26214 $163,071.48
--------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------
Lock/47_Defeasance/71_0%/2 GMACCM 26207 $152,666.04
Lock/26_Defeasance/87_0%/7 GMACCM 01-1025095 $135,703.08
Lock/35_Defeasance/81_0%/4 GMACCM 01-1021111 $133,579.08
Lock/28_Defeasance/88_0%/4 GMACCM 01-1024369 $136,885.92
Lock/27_Defeasance/89_0%/4 GMACCM 01-1025540 $131,945.52
--------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------
Lock/29_Defeasance/87_0%/4 GMACCM 01-1024168 $137,703.00
Lock/31_Defeasance/82_0%/7 GMACCM 01-1025134 $107,575.56
Lock/36_Defeasance/80_0%/4 GMACCM 01-1020971 $118,416.72
Lock/29_Defeasance/89_0%/2 GMACCM 26190 $105,884.64
Lock/26_Defeasance/90_0%/4 GMACCM 01-1026176 $102,371.64
--------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------
Lock/30_Defeasance/86_0%/4 GMACCM 01-1025798 $111,799.92
Lock/47_> YM or 1%/69_0%/4 Deutsche Bank DBM10628 $107,393.28
Lock/27_Defeasance/89_0%/4 GMACCM 01-1025199 $97,236.12
Lock/29_Defeasance/87_0%/4 GMACCM 01-1025373 $96,468.36
Lock/29_Defeasance/87_0%/4 GMACCM 01-1024714 $93,334.80
--------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------
Lock/30_Defeasance/86_0%/4 GMACCM 01-1024948 $102,131.52
GMACCM 01-1024948-A
GMACCM 01-1024948-B
Lock/0_> YM or 1%/107_1%/66_0%/7 GMACCM 01-1027902 $67,297.92
Lock/59_> YM or 1%/57_0%/4 Deutsche Bank DBM10627 $66,540.36
--------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------
Lock/0_> YM or 1%/107_1%/66_0%/7 GMACCM 01-1027903 $72,506.52
Lock/0_> YM or 1%/107_1%/66_0%/7 GMACCM 01-1027904 $62,939.76
Lock/29_Defeasance/87_0%/4 GMACCM 01-1025907 $51,460.32
Lock/0_> YM or 1%/107_1%/66_0%/7 GMACCM 01-1027905 $43,302.48
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
UNDERWRITTEN NET UNDERWRITTEN NET UNDERWRITTEN NCF CROSS COLLATERALIZED ORIGINAL
OPERATING INCOME ($) CASH FLOW ($) DSCR (X) DSCR (X) APPRAISAL VALUE
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
-----------------------------------------------------------------------------------------------------------------------------------
1.21 1.21 $112,475,000
$6,351,331 $6,055,331 1.23 1.21 $69,500,000
$3,790,517 $3,590,267 1.19 1.21 $42,975,000
$1,397,054 $1,329,054 $15,900,000
$1,093,411 $1,031,411 $12,375,000
$849,598 $805,348 $9,600,000
$450,454 $424,454 $5,100,000
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
$4,851,946 $4,198,865 1.33 $64,000,000
$3,387,430 $3,105,838 1.28 $38,000,000
$2,931,486 $2,699,187 1.29 $32,500,000
$2,299,676 $2,251,076 1.21 $28,900,000
$2,567,794 $2,222,319 1.32 $24,600,000
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
$2,867,322 $2,738,420 1.53 $32,000,000
$2,179,187 $2,076,187 1.42 $21,000,000
$2,199,697 $1,924,697 1.38 $24,250,000
$1,553,688 $1,456,960 1.21 $17,800,000
$1,605,012 $1,545,762 1.57 $17,400,000
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
$1,495,201 $1,389,659 1.32 $14,500,000
$1,707,156 $1,707,156 1.50 $15,500,000
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
$1,515,474 $1,404,163 1.24 $15,000,000
$1,322,322 $1,179,527 1.25 $13,185,000
$253,104 $224,405 $2,650,000
$222,688 $194,688 $1,975,000
$345,033 $324,845 $3,400,000
$204,602 $175,630 $2,160,000
$296,895 $259,959 $3,000,000
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
$1,166,326 $1,121,614 1.23 $12,850,000
$1,351,727 $1,351,727 1.54 $13,400,000
$1,065,907 $989,337 1.21 $12,000,000
$1,068,138 $981,088 1.20 $11,250,000
$1,085,230 $1,072,830 1.30 $11,900,000
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
$944,668 $925,468 1.21 $11,750,000
$1,088,015 $1,039,586 1.27 $11,900,000
$1,050,416 $1,003,113 1.27 $11,400,000
$1,167,318 $964,620 1.24 $13,000,000
$1,060,722 $965,084 1.31 $10,650,000
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
$986,269 $978,185 1.38 $10,000,000
$1,264,273 $1,092,340 1.56 $13,500,000
$1,194,006 $1,194,006 1.62 $11,400,000
$907,328 $826,252 1.24 $9,000,000
$929,715 $920,597 1.47 $8,800,000
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
$1,225,714 $1,125,690 1.85 $12,500,000
$995,551 $851,291 1.36 $9,210,000
$976,895 $927,899 1.53 $10,000,000
$792,086 $755,251 1.26 $7,990,000
$38,922 $36,983 $403,000
$49,378 $46,055 $489,000
$26,984 $25,599 $271,000
$75,140 $71,540 $774,000
$65,894 $62,571 $699,000
$36,532 $35,147 $355,000
$133,827 $128,011 $1,328,000
$152,452 $144,974 $1,498,000
$62,144 $59,098 $633,000
$63,789 $62,404 $628,000
$38,418 $36,202 $377,000
$48,606 $46,667 $535,000
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
$976,035 $844,608 1.36 $9,600,000
$990,148 $990,148 1.60 $9,500,000
$793,219 $755,469 1.32 $7,750,000
$955,454 $955,454 1.62 $9,100,000
$839,380 $839,380 1.42 $7,850,000
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
$930,784 $930,784 1.51 $10,600,000
$747,158 $718,960 1.26 $7,765,000
$740,313 $677,553 1.24 $8,130,000
$785,329 $684,185 1.23 $9,100,000
$759,163 $693,388 1.25 $8,130,000
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
$750,806 $677,015 1.41 $7,650,000
$618,933 $588,933 1.34 $6,500,000
$1,004,785 $1,004,785 2.06 $10,800,000
$663,286 $583,587 1.27 $6,370,000
$648,777 $601,555 1.27 $7,200,000
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
$584,774 $502,651 1.24 $6,700,000
$543,436 $524,002 1.27 $5,750,000
$668,247 $649,997 1.64 $8,500,000
$585,762 $533,913 1.31 $6,250,000
$488,781 $448,545 1.21 $5,860,000
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
$681,979 $572,915 1.37 $7,300,000
$534,340 $479,311 1.27 $5,500,000
$489,467 $479,217 1.28 $5,120,000
$683,989 $683,989 1.73 $7,250,000
$1,293,011 $1,162,553 1.91 $12,300,000
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
$528,682 $489,225 1.35 $5,300,000
$488,363 $448,363 1.31 $5,100,000
$526,365 $447,428 1.25 $5,500,000
$500,158 $440,197 1.27 $5,200,000
$598,288 $479,009 1.37 $5,770,000
$485,692 $387,498 $4,420,000
$112,596 $91,511 $1,350,000
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
$449,153 $433,153 1.33 $4,550,000
$481,113 $422,960 1.27 $4,520,000
$452,967 $417,594 1.28 $4,400,000
$428,985 $381,286 1.21 $5,283,000
$400,807 $369,307 1.21 $4,250,000
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
$481,212 $401,316 1.30 $4,650,000
$359,501 $335,501 1.07 $4,500,000
$437,694 $421,195 1.37 $5,600,000
$512,974 $456,844 1.50 $5,500,000
$515,226 $481,026 1.66 $5,500,000
$379,987 $360,187 $3,900,000
$135,239 $120,839 $1,600,000
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
$383,423 $355,923 1.23 $4,000,000
$410,349 $376,401 1.25 $4,125,000
$426,437 $392,559 1.45 $4,050,000
$337,908 $313,158 1.08 $3,330,000
$352,838 $338,689 1.46 $4,400,000
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
$339,231 $324,831 1.25 $3,975,000
$389,499 $345,649 1.25 $4,100,000
$383,033 $368,332 1.32 $4,000,000
$464,024 $400,808 1.50 $3,900,000
$425,959 $382,858 1.36 $4,700,000
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
$383,402 $347,790 1.26 $4,100,000
$360,361 $335,987 1.30 $3,600,000
$304,084 $300,584 1.18 $3,420,000
$47,828 $47,078 $535,000
$61,185 $60,685 $695,000
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
$52,936 $52,436 $590,000
$97,091 $96,091 $1,100,000
$45,044 $44,294 $500,000
$307,043 $295,776 1.18 $3,500,000
$310,461 $294,981 1.29 $3,150,000
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
$414,519 $390,657 1.55 $4,700,000
$345,639 $320,615 1.48 $3,360,000
$339,731 $291,362 1.26 $3,350,000
$297,399 $279,323 1.24 $3,275,000
$309,077 $283,756 1.35 $3,350,000
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
$309,654 $270,766 1.32 $3,200,000
$265,765 $249,785 1.24 $2,905,000
$124,234 $115,415 $1,390,000
$141,531 $134,370 $1,515,000
$379,552 $335,172 1.60 $3,450,000
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
$425,436 $388,565 1.98 $3,725,000
$372,871 $308,837 1.73 $4,420,000
$259,694 $252,835 1.29 $2,620,000
$264,247 $248,511 1.33 $2,740,000
$289,664 $266,293 1.28 $2,970,000
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
$279,655 $271,054 1.15 $2,610,000
$249,823 $225,823 1.27 $2,400,000
$275,818 $241,401 1.31 $2,800,000
$251,264 $222,833 1.24 $2,590,000
$213,309 $199,323 1.22 $2,180,000
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
$210,900 $191,917 1.26 $2,200,000
$178,640 $164,140 1.21 $2,180,000
$215,075 $193,298 1.45 $2,200,000
$219,862 $190,087 1.39 $2,150,000
$188,180 $176,182 1.34 $2,270,000
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
$179,581 $169,556 1.23 $2,000,000
$247,526 $242,526 2.25 $2,410,000
$194,038 $150,441 1.27 $1,800,000
$146,586 $126,586 1.20 $1,550,000
$134,429 $125,429 1.23 $1,450,000
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
$154,585 $139,366 1.25 $1,750,000
$206,914 $188,914 1.76 $1,700,000
$149,913 $132,223 1.36 $1,450,000
$129,141 $120,141 1.25 $1,310,000
$183,162 $171,912 1.84 $1,800,000
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
$131,326 $119,841 1.17 $1,435,000
$71,138 $65,199 $775,000
$60,188 $54,642 $660,000
$90,944 $84,944 1.26 $970,000
$86,512 $79,103 1.19 $960,000
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
$154,956 $147,858 2.04 1.72 $1,050,000
$99,379 $93,343 1.48 1.72 $850,000
$80,934 $71,472 1.39 $870,000
$70,564 $66,394 1.53 1.72 $600,000
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SCHEDULED
ORIGINAL CUT-OFF DATE MATURITY OR ARD CROSS COLLATERALIZED
APPRAISAL DATE LTV (%) DATE LTV (%) LTV RATIO (%) YEAR BUILT
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
--------------------------------------------------------------------------------------------------------------------------
79.61 72.54 79.61
03/13/00 80.00 72.89 79.61 1948
78.98 71.96 79.61
03/15/00 1971/1972
02/02/00 1971/1973
03/15/00 1965
03/15/00 1971
--------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------
06/05/00 57.52 51.50 1998/1999
04/26/00 69.61 64.76 1901
08/09/99 71.38 64.39 1973
04/13/00 72.58 65.07 1990
05/18/00 71.18 70.61 1988
--------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------
11/22/99 57.70 52.93
09/13/99 77.70 70.10 1974/1975
01/12/00 57.51 48.80 1945
03/29/00 75.17 67.69 1988
05/19/00 67.83 61.46 1963/1970
--------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------
80.00 72.04
05/22/00 1998/1999
05/22/00 1993
05/22/00 1989/1991/1996
03/09/00 74.14 62.51 1985
--------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------
04/04/00 75.61 73.42 1983
77.10 70.00
11/05/99 1986
11/04/99 1990
01/01/00 1992
11/04/99 1988
11/05/99 1988
--------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------
04/20/00 77.23 69.83 1999
04/01/00 67.79 56.76 1988
11/24/99 74.72 67.61 1965
01/05/00 79.22 71.73 1988/1998
03/22/00 74.30 67.43 1955
--------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------
04/13/00 73.54 65.92 1988
04/05/99 71.81 64.50 1997
05/01/99 72.34 64.98 1998
11/18/99 62.86 57.40 1986
05/01/00 74.15 67.34 1960/1970/1987/1988
--------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------
02/01/00 78.93 71.00 1987
02/09/00 55.82 50.70 1907
05/05/00 65.61 55.19 1998
02/02/00 77.79 70.97 1999
02/01/00 79.09 71.14 1983
--------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------
04/12/99 55.59 49.93 1953
02/03/00 73.15 66.44 1980
07/01/00 64.88 53.75 1999
79.92 72.78
11/05/99 Late 1800's
11/05/99 Late 1800's
11/05/99 Late 1800's
11/05/99 Late 1800's
11/05/99 Late 1800's
11/05/99 Late 1800's
11/05/99 Late 1800's
11/05/99 Late 1800's
11/05/99 Late 1800's
11/05/99 Late 1800's
11/05/99 Late 1800's
11/05/99 Late 1800's
--------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------
12/12/99 66.51 55.83 1970
05/05/00 66.43 55.88 1998
12/31/99 79.24 72.00 1971/1972
04/01/00 67.14 56.21 1988
09/01/99 77.57 64.95 1997/1998
--------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------
01/01/00 56.49 48.29 1998
01/06/00 77.11 70.42 1986
03/20/00 73.16 66.11 1999
01/14/00 64.04 61.89 1954
04/07/00 70.55 61.67 1982/1992
--------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------
03/28/00 69.21 62.42 2000
07/02/99 77.98 69.82 1981
04/01/00 46.26 38.84 1999
07/30/99 77.71 70.58 1948/1976
04/09/99 68.66 61.67 1997
--------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------
03/21/00 66.39 66.12 1971
04/26/00 79.10 71.29 1999
08/17/99 53.28 47.78 1990/1991
02/25/00 71.06 64.27 1949
03/03/00 68.19 67.99 1956/1986
--------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------
10/04/99 59.40 54.44 1982
04/11/00 73.57 66.77 1998
02/17/00 77.92 64.55 1999
10/25/99 54.81 46.47 1972/1984
03/21/00 32.18 0.00 1963/1984/1999
--------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------
12/13/99 74.42 67.31 1986
03/03/00 75.33 67.73 1977
04/01/00 69.61 63.16 1977
01/13/00 70.05 67.70 1965
63.13 57.78
11/29/99 1984
11/19/99 1973
--------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------
04/11/00 79.09 71.23 1999
01/13/00 79.13 71.88 1972/1987
04/11/00 79.47 72.12 1999
12/30/99 65.21 58.89 1978
04/01/00 79.97 71.95 1968
--------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------
02/01/00 73.01 65.93 1987
12/14/99 75.28 68.35 1985
05/09/00 59.98 54.16 1983/1997
02/15/00 60.00 54.65 1989/2000
57.96 52.39
10/20/99 1970
10/20/99 1970
--------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------
03/19/99 79.27 70.58 1970
02/02/00 76.66 69.94 1999
05/11/98 77.72 68.70 1928
02/03/00 83.28 35.20 1965
10/01/00 58.56 62.96 1972
--------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------
12/01/99 72.31 67.96 1999
06/28/99 72.88 66.25 1998
01/16/00 74.30 61.63 1990
01/13/00 74.89 67.67 1987
12/08/99 58.81 52.92 1990
--------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------
11/01/99 70.46 64.44 1983
02/08/00 79.05 71.29 1998
81.24 73.53
01/10/00 1910's
01/10/00 1910's
--------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------
01/10/00 1910's
01/10/00 1910's/1999
01/10/00 1910's
03/01/00 77.12 69.91 1963
11/01/99 79.07 71.68 1971
--------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------
02/02/00 52.93 0.00 1989
04/11/00 72.59 65.12 1985
01/14/00 72.17 69.75 1926
02/22/00 71.57 65.42 1973
04/01/00 68.81 62.11 1999
--------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------
02/23/00 70.21 63.44 1972
75.70 68.33
05/01/00 1930
05/01/00 1963
10/20/99 63.56 58.18 1979
--------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------
05/03/00 57.03 51.63 1987
01/07/00 42.27 43.34 1970/1973/1974/1986
01/21/00 79.22 72.24 1995
11/01/99 74.67 67.52 1960
03/02/98 66.96 0.00 1997
--------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------
11/18/99 74.31 0.00 1988
12/07/99 79.84 72.38 1989
07/09/99 67.67 62.14 1985
02/02/00 71.33 65.35 1994
01/19/00 79.67 72.49 1985
--------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------
01/11/00 74.85 67.90 1985
11/04/99 71.02 63.49 1985
02/19/99 67.50 59.96 1975/1980/1982
11/30/99 67.32 61.36 1978
01/05/00 62.91 57.00 1998
--------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------
10/19/99 71.35 65.38 1999
12/01/99 49.60 44.73 1976
01/18/99 65.63 54.85 1949
01/15/00 74.34 67.32 1972
01/06/00 77.51 69.95 1930
--------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------
12/06/99 63.16 58.52 1989
07/08/99 64.01 53.07 1971/1972
03/28/00 70.95 64.64 1996
12/01/99 76.18 69.83 1972
09/10/99 55.43 50.41 1963
--------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------
63.99 47.51
10/27/99 1999
10/27/99 1999
05/08/98 75.91 59.77 1993
07/06/99 73.77 65.97 1998
--------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------
04/23/98 66.97 45.43 69.41 1994
04/23/98 71.81 48.71 69.41 1990
12/11/99 58.52 54.20 1970
04/23/98 69.99 47.48 69.41 1988
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CUT-OFF DATE
BALANCE PER
UNITS, BEDS SQ. FT., UNIT, BED,
YEAR RENOVATED ROOMS, SQFT UNIT DESCRIPTION PAD OR ROOM ($) OCCUPANCY (%)
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
----------------------------------------------------------------------------------------------------------------------------
1998/1999 1,167 Units 47,644 96
801 Units 42,372
272 Units 99
248 Units 96
177 Units 98
104 Units 96
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
221,378 Sq. Ft. 166 100
Ongoing 140,206 Sq. Ft. 194 92
1995 371,028 Sq. Ft. 63 89
243 Units 86,324 98
363,562 Sq. Ft. 52 79
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
77,678 Sq. Ft. 238 100
1997 412 Units 39,603 92
1980/1997 252,251 Sq. Ft. 55 100
131,964 Sq. Ft. 101 99
1997 237 Units 49,802 98
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
148,561 Sq. Ft. 78
54,925 Sq. Ft. 69
25,000 Sq. Ft. 100
68,636 Sq. Ft. 93
1997/2000 153 Rooms 75,112 81
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
115,164 Sq. Ft. 98 96
239,324 Sq. Ft. 42
49,064 Sq. Ft. 100
1997 39,880 Sq. Ft. 100
1999 49,110 Sq. Ft. 100
43,320 Sq. Ft. 100
57,950 Sq. Ft. 97
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
84,322 Sq. Ft. 118 100
1998 159 Rooms 57,135 82
1999 247 Units 36,300 100
99,155 Sq. Ft. 90 100
1999 62,000 Sq. Ft. 143 100
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
96 Units 90,004 100
100,945 Sq. Ft. 85 100
103,277 Sq. Ft. 80 100
109,857 Sq. Ft. 74 94
188,981 Sq. Ft. 42 98
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
1998 80,842 Sq. Ft. 98 100
1990/2000 162,564 Sq. Ft. 46 93
114 Rooms 65,612 79
75,875 Sq. Ft. 92 94
1998 91,182 Sq. Ft. 76 100
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
1997 75,740 Sq. Ft. 92 100
216,890 Sq. Ft. 31 93
54,362 Sq. Ft. 119 99
127 Units 50,281
7 Units 86
12 Units 100
5 Units 100
13 Units 92
12 Units 100
5 Units 100
20 Units 100
25 Units 96
11 Units 91
3 Units 100
7 Units 100
7 Units 100
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
1980 215,560 Sq. Ft. 30 100
110 Rooms 57,369 83
1998/1999 151 Units 40,668 93
1997 168 Rooms 36,366 56
90 Rooms 67,662 85
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
88 Rooms 68,041 63
57,846 Sq. Ft. 104 97
125,096 Sq. Ft. 48 100
1997 72,195 Sq. Ft. 81 98
74,578 Sq. Ft. 77 98
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
52,086 Sq. Ft. 102 92
1997/1998 120 Units 42,240 92
78 Rooms 64,057 92
1987/1999 118,051 Sq. Ft. 42 100
220,307 Sq. Ft. 22 100
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
84,247 Sq. Ft. 58 86
56,910 Sq. Ft. 80 92
73 Units 62,036 100
1988/1989 43,939 Sq. Ft. 101 93
1999 49,050 Sq. Ft. 90 75
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
60,903 Sq. Ft. 71 100
38,768 Sq. Ft. 104 100
41 Units 97,299 100
1997/1998 200 Rooms 19,868 68
2000 383,700 Sq. Ft. 10 100
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
41,010 Sq. Ft. 96 91
160 Units 24,010 90
1997/1999 61,217 Sq. Ft. 63 100
1994/1999 30,596 Sq. Ft. 119 100
88,064 Sq. Ft. 41
1993 70,000 Sq. Ft. 95
1991 18,064 Sq. Ft. 100
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
80 Units 44,982 98
143,120 Sq. Ft. 25 99
31,840 Sq. Ft. 110 92
1988/1991/1994/1999 85,100 Sq. Ft. 40 100
1999/2000 126 Units 26,973 94
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
53,629 Sq. Ft. 63 91
1998/1999 96 Units 35,288 98
65,480 Sq. Ft. 51 95
116,922 Sq. Ft. 28 100
114 Units 27,963
1999 66 Units 100
48 Units 96
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
1998 110 Units 28,826 99
36,218 Sq. Ft. 87 100
1967 79,177 Sq. Ft. 40 77
99 Units 31,243 89
2000 141,488 Sq. Ft. 22 100
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
75 Units 39,959 100
65,500 Sq. Ft. 46 100
86,479 Sq. Ft. 34 100
1998 55,184 Sq. Ft. 53 99
36,463 Sq. Ft. 80 89
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
38,960 Sq. Ft. 74 100
27,698 Sq. Ft. 103 100
13 Units 213,723
1999 3 Units 100
1999 2 Units 100
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
1995 2 Units 100
1999 3 Units 100
1999 3 Units 100
1993 112,666 Sq. Ft. 24 100
1995 60 Units 41,513 98
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
20,720 Sq. Ft. 120 98
2000 68 Units 35,867 99
1996 34,113 Sq. Ft. 71 99
1995/1998 23,526 Sq. Ft. 100 77
29,302 Sq. Ft. 79 100
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
1999 32,706 Sq. Ft. 69 100
64 Units 34,362
31 Units 100
33 Units 100
41,790 Sq. Ft. 52 92
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
48,957 Sq. Ft. 43 94
54,840 Sq. Ft. 38 100
15,360 Sq. Ft. 135 100
1999 56 Units 36,533 100
24,720 Sq. Ft. 80 96
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
37,712 Sq. Ft. 51 100
1998 96 Units 19,961 96
27,763 Sq. Ft. 68 100
21,490 Sq. Ft. 86 100
1998/1999 54 Units 32,162 100
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
15,035 Sq. Ft. 110 100
58 Units 26,694 98
21,764 Sq. Ft. 68 85
25,016 Sq. Ft. 58 91
7,600 Sq. Ft. 188 100
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
8,640 Sq. Ft. 165 100
1999 20 Units 59,765 85
45,072 Sq. Ft. 26 100
1996/1999 80 Units 14,403 94
1994 36 Units 31,218 100
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
13,804 Sq. Ft. 80 100
72 Units 15,113 97
22,320 Sq. Ft. 46 100
36 Units 27,722 100
90 Pads 11,086 99
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
14,000 Sq. Ft. 66
7,000 Sq. Ft. 100
7,000 Sq. Ft. 100
24 Units 30,679 100
5,400 Sq. Ft. 131 100
----------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------
492 Units 1,429 72
298 Units 2,048 86
1998 7,358 Sq. Ft. 69 100
237 Units 1,772 89
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ANNUAL
REQUIRED ANNUAL
OCCUPANCY DATE OWNERSHIP INTEREST LOCKBOX RESERVES ($) REQUIRED TI/LC ($)
-------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
-------------------------------------------------------------------------------------------------------------------------------
03/28/00 Fee Simple $295,998
$284,250
03/28/00 Fee Simple
03/29/00 Fee Simple
03/29/00 Fee Simple
03/27/00 Fee Simple
-------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------
05/01/00 Fee Simple Hard $33,118 $240,000
05/17/00 Fee Simple Soft $21,031
05/04/00 Fee Simple $21,945
05/09/00 Fee Simple $48,600
05/10/00 Fee Simple $72,191 $99,996
-------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------
04/17/00 Fee Simple Hard $38,839 $60,000
02/29/00 Fee Simple
05/31/00 Fee Simple Hard $50,450 $97,470
06/08/00 Fee Simple $19,800 $76,884
03/31/00 Fee Simple $59,250
-------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------
$14,865 $120,000
06/01/00 Fee Simple
06/01/00 Fee Simple
06/01/00 Fee Simple
03/31/00 Both Fee Simple and Leasehold Springing
-------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------
04/24/00 Fee Simple $11,516 $40,000
Hard $50,300 $33,996
03/15/00 Fee Simple
03/15/00 Fee Simple
03/15/00 Fee Simple
03/15/00 Fee Simple
03/15/00 Fee Simple
-------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------
06/05/00 Fee Simple $8,432 $18,000
04/01/00 Fee Simple Springing
04/30/00 Fee Simple $86,448
02/29/00 Fee Simple $14,873 $36,743
04/01/00 Fee Simple Hard $12,400
-------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------
05/09/00 Fee Simple $19,200
08/31/99 Fee Simple Hard $10,095
08/31/99 Fee Simple Hard $10,328
04/26/00 Fee Simple $21,951 $152,004
04/14/00 Fee Simple $34,224 $70,000
-------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------
01/17/00 Fee Simple
03/21/00 Fee Simple $30,165
03/31/00 Fee Simple Springing
04/10/00 Fee Simple $7,598
01/17/00 Fee Simple
-------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------
03/01/00 Fee Simple $10,611 $400,000
03/25/00 Fee Simple Hard $42,098 $30,000
05/01/00 Fee Simple $7,611
Hard $36,840
02/01/00 Fee Simple
02/01/00 Fee Simple
02/01/00 Fee Simple
02/01/00 Fee Simple
02/01/00 Fee Simple
02/01/00 Fee Simple
02/01/00 Fee Simple
02/01/00 Fee Simple
02/01/00 Fee Simple
02/01/00 Fee Simple
02/01/00 Fee Simple
02/01/00 Fee Simple
-------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------
05/01/00 Fee Simple Hard $42,996 $67,004
03/31/00 Fee Simple Springing
03/31/00 Fee Simple $37,752
12/31/99 Fee Simple Springing
12/31/99 Leasehold Springing
-------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------
11/30/99 Fee Simple Springing
01/20/00 Fee Simple $12,151
03/20/00 Fee Simple Hard
05/08/00 Fee Simple $11,637
06/30/00 Fee Simple $18,141 $48,000
-------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------
04/11/00 Fee Simple $5,232
03/31/00 Fee Simple $30,000
04/30/00 Fee Simple Springing
04/20/00 Fee Simple $23,610 $34,433
08/31/99 Fee Simple Hard $22,031
-------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------
06/01/00 Fee Simple $12,636 $69,516
06/29/00 Fee Simple $5,691 $90,000
04/30/00 Fee Simple $18,250
02/01/00 Fee Simple $7,470 $18,000
05/01/00 Fee Simple $7,358 $20,012
-------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------
06/01/00 Fee Simple Springing $12,167 $82,736
04/30/00 Fee Simple $4,320 $30,000
09/01/99 Fee Simple $8,446
12/31/99 Fee Simple
05/05/00 Fee Simple Hard $43,356
-------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------
02/01/00 Fee Simple $4,104 $32,136
02/01/00 Fee Simple Springing
03/31/00 Fee Simple $7,280
05/08/00 Leasehold $6,731
Hard $17,667 $89,015
06/13/00 Fee Simple
02/23/00 Fee Simple
-------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------
04/26/00 Fee Simple $16,000
02/23/00 Fee Simple $33,016 $30,000
04/30/00 Fee Simple $3,180 $30,000
01/03/00 Fee Simple Hard $21,276
05/01/00 Fee Simple Soft $26,838
-------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------
03/01/00 Fee Simple Hard $10,666 $16,667
05/31/00 Fee Simple Springing $19,200
05/26/00 Fee Simple
04/24/00 Fee Simple
$39,690
12/31/99 Fee Simple
02/15/00 Fee Simple
-------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------
05/28/00 Fee Simple $27,500
04/10/00 Fee Simple $3,622 $13,500
03/20/00 Fee Simple Soft $21,378 $23,024
02/15/00 Fee Simple $19,800
03/22/99 Fee Simple Hard
-------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------
04/25/00 Fee Simple $11,250
02/13/00 Leasehold $13,099 $22,658
01/01/00 Fee Simple Hard
03/01/00 Fee Simple $54,973
02/28/00 Fee Simple $36,463
-------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------
05/31/00 Fee Simple $7,797 $17,544
04/27/00 Fee Simple $2,770
$3,500
02/03/00 Fee Simple
02/03/00 Fee Simple
-------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------
02/03/00 Fee Simple
02/03/00 Fee Simple
02/03/00 Fee Simple
04/17/00 Fee Simple Hard
05/01/00 Fee Simple $10,260
-------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------
03/27/00 Fee Simple
05/01/00 Fee Simple $25,020
05/08/00 Fee Simple $7,505
03/30/00 Fee Simple Springing $3,529
02/29/00 Fee Simple $2,930 $15,070
-------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------
04/13/00 Fee Simple
$15,980
05/01/00 Fee Simple
05/01/00 Fee Simple
05/19/00 Fee Simple $3,933 $35,791
-------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------
05/31/00 Fee Simple $12,730
05/20/00 Fee Simple $54,840
02/07/00 Fee Simple $2,304 $24,000
03/15/00 Fee Simple $9,442
06/22/00 Fee Simple $3,708 $10,338
-------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------
02/22/00 Fee Simple
03/01/00 Fee Simple $24,000
01/07/00 Fee Simple $6,663 $12,000
04/10/00 Fee Simple $3,246 $12,000
04/03/00 Fee Simple $13,986
-------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------
05/01/00 Fee Simple Springing $6,768 $12,228
05/01/00 Fee Simple $8,550
05/31/00 Fee Simple $14,220
03/20/00 Fee Simple $24,772
04/03/00 Fee Simple
-------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------
02/16/00 Fee Simple $8,594
12/05/99 Fee Simple $3,000
05/01/00 Fee Simple $14,478 $29,297
03/01/00 Fee Simple $20,000
01/20/00 Fee Simple $5,472
-------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------
01/06/00 Fee Simple $13,800
04/01/00 Fee Simple
04/24/00 Fee Simple
02/09/00 Fee Simple $5,400
02/22/00 Fee Simple
-------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------
$2,100 $9,380
10/13/99 Fee Simple
12/15/99 Fee Simple
01/11/00 Fee Simple $4,800
12/20/99 Fee Simple $3,000
-------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------
03/15/00 Fee Simple
03/15/00 Fee Simple
02/15/00 Fee Simple $7,372
03/15/00 Fee Simple
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
LARGEST TENANT LARGEST TENANT
LARGEST TENANT SQ FT LEASE EXPIRATION
---------------------------------------------------------------------------------------------------
<S> <C> <C>
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
ABB Power T&D Company, Inc 75,000 11/12/08
TPL 39,312 07/31/10
Walmart 151,067 08/18/15
Meredith, Donnel & Abernathy 22,377 08/31/04
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
The Tavern 5,050 12/31/06
Preferred Freezer Services, Inc. 252,251 01/31/20
Basha's 44,505 11/08/08
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
ITT Industries, Inc. 17,425 02/28/03
United States of America 25,000 10/27/08
RBX Holding Inc. 17,007 09/30/04
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
TJ Maxx 25,417 10/31/03
Food Lion 31,864 05/16/09
Food Lion 30,280 08/03/10
Food Lion 31,864 07/14/12
Food Lion 25,000 07/16/08
Winn Dixie 35,000 12/07/08
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
Staples 31,755 05/31/14
Farmer Jack 39,609 01/31/09
County of Los Angeles 62,000 06/30/19
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
Galyan's Trading Company 100,945 08/31/19
Galyan's Trading Company 103,277 08/31/19
Benefit Services 11,678 11/30/04
Ames 78,000 04/30/06
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
KMart Corporation 80,842 01/31/24
Wick, Fisher, & White 14,500 03/31/03
Dean Warren 11,310 02/28/05
Kmart Corporation 91,182 01/31/24
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
TJ Maxx 30,017 10/31/07
Hobby Lobby 57,120 02/28/05
Town Executive Suites 6,889 07/31/10
Foodery 1,100 12/31/04
Wok & Tofu Restaurant 1,500 12/31/04
DB's Cafe' 800 06/30/02
Sparacino 700 06/14/02
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
Bulova Technologies, LLC 215,560 04/01/20
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
Party City 11,600 11/30/03
IDG 125,096 04/30/20
Families Forward, Inc. 4,443 01/31/05
Casa Romeau Restaurant 3,810 12/31/04
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
Nova Southeastern University 16,424 05/14/04
Merchandising Resources 58,900 10/31/06
Galyan's Trading Company 220,307 08/31/19
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
Bank of America 18,393 05/19/07
Food Lion 33,000 03/30/19
Palomar Pictures, Inc. 15,401 04/30/04
Taorello's 16,753 12/31/09
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
Advanced Solutions Intl 8,315 04/14/02
Haas Publishing Companies 5,340 10/31/03
McCrory Corporation 383,700 03/31/15
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
Chili's 6,400 09/28/06
Net Perceptions 23,086 12/31/03
Neil Starr 2,620 07/31/05
Advanced System 10,000 01/31/01
United Cerebal Palsy 9,580 09/30/00
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
Hobby Lobby 59,468 01/31/07
BC Components, Inc. 4,224 03/31/03
Hobby Lobby 60,100 01/31/08
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
Norfolk Southern Corporation 23,464 01/31/04
City Market Grocery 43,917 06/01/12
West Union Corporation 116,922 01/31/15
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
Bianca 19,910 12/31/03
Standard 30,568 01/31/16
Kmart Corporation 141,488 10/01/25
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
HCA Health Services of New Hampshire 26,500 08/31/08
Kmart Corporation 86,479 11/30/15
One Stop Program 12,164 09/30/02
Gardena Women Sauna 6,000 01/31/10
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
Foot Action 5,600 01/31/04
Orion Engineering 6,513 04/30/03
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
Kmart of Indiana 112,666 05/31/20
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
Pier 1 Imports 9,000 01/31/05
Capitol Wholesale Imports, Inc 5,202 09/30/04
Eckerd Drugs 11,612 01/31/10
SAIC 12,100 11/30/04
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
IQ Management Corporation 6,573 05/31/19
The Prawnbroker Restaurant 6,500 12/31/07
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
Denny's Restaurant 9,128 02/28/19
Brooks Furniture 7,500 08/31/03
Blockbuster 6,300 01/31/06
Wood - Burrus, L.L.C. d/b/a Videoland 8,287 12/31/04
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
Ralph's Supermarket 37,712 06/13/14
Stock Exchange 6,500 02/28/03
Williams Communication 12,850 07/31/02
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
Le Peep 3,276 06/30/05
Blockbuster Video 5,848 06/30/05
Safe Credit Union 3,680 12/31/10
SJSM Corp / Burger King 3,200 01/31/18
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
Mattress King 2,952 06/18/09
Americana Grocery Of MD, Inc. 8,315 12/31/11
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
Allied Gifts & Shipping, Inc. 5,804 01/31/02
Pleiades 5,580 08/01/01
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
Advance Auto 7,000 12/31/09
Advance Auto 7,000 12/31/09
Payless Shoesource 2,700 07/31/03
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
Primerica Financial Services 2,600 10/31/03
</TABLE>
<PAGE>
Certain Characteristics of the Multifamily Loans
<TABLE>
<CAPTION>
CONTROL LOAN
NUMBER NUMBER PROPERTY NAME CITY
--------------------------------------------------------------------------------------------------------------
Freddie Mac Participation Certificate
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Freddie Mac Participation Certificate
1 27396 Mill Run Apartments Union and Irvington
2 27387 Schron Portfolio II
2a 27387A Royal Crest Apartments Hamilton
2b 27387B Ken Gardens Apartments Aberdeen
2c 27387C Douglas Apartments Somerset
2d 27387D Dutchtown Manor Apartments Lakewood
--------------------------------------------------------------------------------------------------------------
MORTGAGE LOANS
--------------------------------------------------------------------------------------------------------------
6 09-0001341 Parc Pointe Apartments Burbank
9 DBM9551 Rochester Village Apartments Rochester
12 DBM1685 Pacific Point Apartments Long Beach
19 DBM5774 Partridge Run Apartments Parsippany
22 09-0001340 The Oaks Apartments Burbank
--------------------------------------------------------------------------------------------------------------
35 25149 Center City Apartment Portfolio II
35a 25149A 1109 Spruce Street Philadelphia
35b 25149B 322 S. 10th Street Philadelphia
35c 25149C 927 Spruce Street Philadelphia
35d 25149D 1104 Spruce Street Philadelphia
35e 25149E 2125-27 Walnut Street Philadelphia
35f 25149F 434 Lombard Street Philadelphia
35g 25149G 1001 Pine Street Philadelphia
35h 25149H 1034 Spruce Street Philadelphia
35i 25149I 1616-18 Spruce Street Philadelphia
35j 25149J 1957 Locust Street Philadelphia
35k 25149K 218 S. 20th Street Philadelphia
35l 25149L 1719 Spruce Street Philadelphia
--------------------------------------------------------------------------------------------------------------
38 DBM11402 Heather Glen Apartments Lenexa
47 DBM8646 Autumn Oaks Apartments Everett
53 DBM8977 Fashion Terrace Apartments San Diego
58 09-0001339 Continental Court Newark
62 DBM10304 Riverside Green Apartments Columbus
--------------------------------------------------------------------------------------------------------------
66 09-0001358 Mebane Mill Apartments - Phase II Mebane
70 27619 Donna Lynn Apartments Grand Prairie
72 DBM11301 Tory Estates Clementon
75 DBM9440 Sugar Creek Apartments
75a DBM9440A Sugar Creek Apartments Normal
75b DBM9440B Crestwood Apartments Normal
--------------------------------------------------------------------------------------------------------------
76 21702 Remond Cliff Plaza Apartments Dallas
79 DBM11651 Briarwood Manor Apartments Deptford
81 01-1025819 The Meadows Apartments - Lacey, WA Bellingham
88 26254 Feeley Apartment Portfolio
88a 26254A 64 Monroe Street Hoboken
88b 26254B 125 Monroe Street Hoboken
88c 26254C 70 Jefferson Street Hoboken
88d 26254D 100 Jefferson Street Hoboken
88e 26254E 102 Jefferson Street Hoboken
--------------------------------------------------------------------------------------------------------------
90 01-1024654 Stonegate Apartments Newington
92 01-1027480 Meadows of Gwinnett County Apartments Lawrenceville
97 27974 Weinerman Multifamily Portfolio
97a 27974A Daibes Apartments Weehawken
97b 27974B Crescent Garden Apartments North Bergen
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
102 01-1026456 Sierra Meadows Apartments (Richard's Place) Sparks
105 01-1025336 Los Frances Apartments Laredo
108 26214 Dove Park Townhomes Tulsa
110 01-1025095 College Park Apartments Lacey
115 01-1025134 Sunset Pointe Apartments Kirkland
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
117 26190 Candlestick Apartments San Antonio
118 01-1026176 Buckingham Apartments St. Louis
120 DBM10628 Vollmer's Village Square Toledo
122 01-1025373 2170 N.W. 11th Street Apartments Miami
125 01-1027902 Denver Creek Apartments Boise
--------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CUT-OFF DATE
CUT-OFF DATE BALANCE
COUNTY STATE ZIP CODE BALANCE ($) PER UNIT ($) UTILITIES PAID BY TENANT
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
------------------------------------------------------------------------------------------------------------
89,540,000
Union and Essex NJ 07083 55,600,000 47,644 Electricity
33,940,000 42,372
Mercer NJ 08690 Electricity/Cable
Monmouth NJ 07721 Electricity/Cable
Somerset NJ 08873 Electricity/Cable
Ocean NJ 08701 Electricity/Cable
------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------
Los Angeles CA 91505 20,976,765 86,324 Electric
Olmstead MN 55901 16,316,458 39,603 Gas/Electricity/Cable
Los Angeles CA 90815 11,803,024 49,802 Water/Gas/Electricity
Morris NJ 07054 8,966,072 36,300 Water/Gas
Los Angeles CA 91505 8,640,430 90,004 Electric
------------------------------------------------------------------------------------------------------------
6,385,741 50,281
Philadelphia PA 19107 Gas/Electricity/Cable
Philadelphia PA 19107 Gas/Electricity/Cable
Philadelphia PA 19106 Gas/Electricity/Cable
Philadelphia PA 19107 Gas/Electricity/Cable
Philadelphia PA 19103 Gas/Electricity/Cable
Philadelphia PA 19147 Gas/Electricity/Cable
Philadelphia PA 19107 Gas/Electricity/Cable
Philadelphia PA 19107 Gas/Electricity/Cable
Philadelphia PA 19103 Gas/Electricity/Cable
Philadelphia PA 19103 Gas/Electricity/Cable
Philadelphia PA 19103 Gas/Electricity/Cable
Philadelphia PA 19103 Gas/Electricity/Cable
------------------------------------------------------------------------------------------------------------
Johnson KS 66215 6,140,857 40,668 Electricity
Snohomish WA 98204 5,068,823 42,240 Electricity
San Diego CA 92108 4,528,629 62,036 Water/Gas/Electricity/Trash
New Castle DE 19711 3,989,267 97,299 Electric/Water/Sewer
Franklin OH 43212 3,841,605 24,010 Electricity
------------------------------------------------------------------------------------------------------------
Alamance NC 27302 3,598,546 44,982 Electric/Gas
Dallas TX 75051 3,398,606 26,973 Cable
Camden NJ 08021 3,387,689 35,288 Electricity
3,187,777 27,963
McLean IL 61761 Electricity
McLean IL 61761 Electricity
------------------------------------------------------------------------------------------------------------
Dallas TX 75211 3,170,907 28,826
Gloucester NJ 08096 3,093,072 31,243 Electricity
Whatcom WA 98226 2,996,891 39,959 Electricity
2,778,395 213,723
Hudson NJ 07030 Gas/Electricity/Cable
Hudson NJ 07030 Gas/Electricity/Cable
Hudson NJ 07030 Gas/Electricity/Cable
Hudson NJ 07030 Gas/Electricity/Cable
Hudson NJ 07030 Gas/Electricity/Cable
------------------------------------------------------------------------------------------------------------
Hartford CT 06111 2,490,773 41,513 Electricity
Gwinnett GA 30244 2,438,949 35,867 Electricity
2,199,144 34,362
Hudson NJ 07087 Gas/Electricity/Cable
Hudson NJ 07047 Gas/Electricity/Cable
------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------
Washoe NV 89431 2,045,827 36,533 Electricity
Webb TX 78041 1,916,210 19,961 Electricity
Tulsa OK 74129 1,736,728 32,162 Gas/Electricity/Cable
Thurston WA 98503 1,548,229 26,694 Electricity
King WA 98033 1,195,296 59,765 Electricity
------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------
Bexar TX 78222 1,152,223 14,403 Gas/Electricity/Cable
St. Louis MO 63108 1,123,850 31,218 Electricity
Lucas OH 43613 1,088,138 15,113 Gas/Electricity/Cable/Trash
Miami-Dade FL 33125 997,982 27,722 Electricity
Ada ID 83706 736,304 30,679 Gas/Electricity
------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
STUDIOS 1 BEDROOM 2 BEDROOM 3 BEDROOM
AVG RENT AVG RENT AVG RENT AVG RENT
# UNITS PER MO. ($) # UNITS PER MO. ($) # UNITS PER MO. ($) # UNITS PER MO. ($)
---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------
0 0 473 763 694 897 0 0
0 0 204 755 68 945 0 0
0 0 207 760 41 900 0 0
0 0 149 825 28 925 0 0
0 0 84 705 20 826 0 0
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
42 814 130 1,012 56 1,256 15 1,600
0 0 112 590 196 680 104 779
0 0 36 813 200 964 1 1,025
0 0 191 750 56 912 0 0
24 807 30 1,006 42 1,272 0 0
---------------------------------------------------------------------------------------------------
1 575 5 672 1 850 0 0
11 525 0 0 1 800 0 0
4 544 0 0 0 0 1 1,100
8 592 2 663 1 800 1 1,100
6 504 4 850 2 1,000 0 0
0 0 5 857 0 0 0 0
0 0 20 671 0 0 0 0
15 575 9 695 1 750 0 0
3 632 6 634 2 1,100 0 0
1 710 1 1,500 1 2,000 0 0
5 530 1 750 1 1,100 0 0
1 600 6 798 0 0 0 0
---------------------------------------------------------------------------------------------------
0 0 8 645 103 691 40 874
0 0 42 595 78 680 0 0
0 0 10 968 63 1,150 0 0
0 0 0 0 41 1,177 0 0
30 389 102 469 28 529 0 0
---------------------------------------------------------------------------------------------------
0 0 64 552 8 691 8 806
0 0 32 545 70 670 24 900
0 0 0 0 96 722 0 0
0 0 7 475 41 640 0 0
0 0 4 364 44 492 0 0
---------------------------------------------------------------------------------------------------
0 0 20 520 50 600 30 675
0 0 66 493 33 611 0 0
0 0 16 525 59 615 0 0
0 0 0 0 1 1,800 2 2,000
0 0 0 0 0 0 0 0
0 0 0 0 1 1,800 0 0
0 0 0 0 0 0 2 2,400
0 0 0 0 2 1,100 0 0
---------------------------------------------------------------------------------------------------
0 0 20 650 40 739 0 0
0 0 0 0 54 718 14 820
0 0 21 825 4 950 6 0
0 0 16 601 17 696 0 0
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
0 0 0 0 56 644 0 0
0 0 60 375 36 475 0 0
0 0 0 0 54 600 0 0
0 0 1 500 56 525 1 595
0 0 0 0 20 1,655 0 0
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
1 365 79 365 0 0 0 0
0 0 9 477 21 611 6 825
0 0 72 390 0 0 0 0
0 0 0 0 36 566 0 0
0 0 12 475 12 575 0 0
---------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
4 BEDROOM 5 BEDROOM NUMBER
AVG RENT AVG RENT OF
# UNITS PER MO. ($) #UNITS PER MO. ($) ELEVATORS
-------------------------------------------------------------
<S> <C> <C> <C> <C>
-------------------------------------------------------------
0 0 0 0 0
0 0 0 0 0
0 0 0 0 0
0 0 0 0 0
0 0 0 0 0
-------------------------------------------------------------
-------------------------------------------------------------
0 0 0 0 6
0 0 0 0 0
0 0 0 0 0
0 0 0 0 0
0 0 0 0 2
-------------------------------------------------------------
0 0 0 0 0
0 0 0 0 0
0 0 0 0 0
1 1,300 0 0 0
0 0 0 0 0
0 0 0 0 0
0 0 0 0 1
0 0 0 0 0
0 0 0 0 0
0 0 0 0 0
0 0 0 0 0
0 0 0 0 0
-------------------------------------------------------------
0 0 0 0 0
0 0 0 0 0
0 0 0 0 2
0 0 0 0 0
0 0 0 0 0
-------------------------------------------------------------
0 0 0 0 0
0 0 0 0 0
0 0 0 0 0
18 1,160 0 0 0
0 0 0 0 0
-------------------------------------------------------------
10 720 0 0 0
0 0 0 0 0
0 0 0 0 0
0 0 0 0 0
2 3,600 0 0 0
0 0 1 4,000 0
1 3,600 0 0 0
1 1,550 0 0 0
-------------------------------------------------------------
0 0 0 0 0
0 0 0 0 0
0 0 0 0 0
0 0 0 0 0
-------------------------------------------------------------
-------------------------------------------------------------
0 0 0 0 0
0 0 0 0 0
0 0 0 0 0
0 0 0 0 0
0 0 0 0 0
-------------------------------------------------------------
-------------------------------------------------------------
0 0 0 0 0
0 0 0 0 0
0 0 0 0 0
0 0 0 0 1
0 0 0 0 0
-------------------------------------------------------------
</TABLE>
<PAGE>
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>
$ 419,956 - 499,999 1 $ 419,956 0.05% $ 419,956 $ 419,956 $ 419,956
500,000 - 999,999 8 6,181,280 0.80 509,136 997,982 772,660
1,000,000 - 1,999,999 19 28,180,779 3.64 1,028,713 1,988,786 1,483,199
2,000,000 - 2,999,999 22 55,471,257 7.17 2,045,827 2,996,891 2,521,421
3,000,000 - 3,999,999 23 80,617,116 10.42 3,076,764 3,989,267 3,505,092
4,000,000 - 4,999,999 10 46,093,802 5.96 4,046,143 4,996,452 4,609,380
5,000,000 - 5,999,999 7 39,849,281 5.15 5,068,823 5,987,587 5,692,754
6,000,000 - 6,999,999 10 64,554,796 8.34 6,089,576 6,959,570 6,455,480
7,000,000 - 7,999,999 5 37,806,469 4.89 7,000,777 7,897,258 7,561,294
8,000,000 - 8,999,999 7 60,325,303 7.80 8,172,391 8,966,072 8,617,900
9,000,000 - 9,999,999 2 19,008,703 2.46 9,084,449 9,924,254 9,504,352
10,000,000 - 11,999,999 5 56,402,021 7.29 10,165,290 11,803,024 11,280,404
12,000,000 - 13,999,999 2 27,326,314 3.53 13,380,226 13,946,089 13,663,157
14,000,000 - 16,999,999 1 16,316,458 2.11 16,316,458 16,316,458 16,316,458
17,000,000 - 19,999,999 2 37,457,439 4.84 18,463,148 18,994,291 18,728,720
20,000,000 - 24,999,999 2 44,174,649 5.71 20,976,765 23,197,884 22,087,325
25,000,000 - 49,999,999 3 97,974,618 12.66 27,222,688 36,811,929 32,658,206
50,000,000 - 55,600,000 1 55,600,000 7.19 55,600,000 55,600,000 55,600,000
-- ------------ ------
Total/Avg./Wtd.
Avg./Min/Max: 130 $773,760,240 100.00% $ 419,956 $55,600,000 $ 5,952,002
=== ============ ======
<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>
$ 419,956 - 499,999 1.53x 1.53x 1.53x 9.000% 156.0 69.99% 69.99% 69.99%
500,000 - 999,999 1.17 2.04 1.45 8.871 127.5 55.43 76.18 67.78
1,000,000 - 1,999,999 1.15 2.25 1.33 8.568 125.5 49.60 79.84 70.02
2,000,000 - 2,999,999 1.18 1.98 1.37 8.509 119.3 42.27 81.24 70.40
3,000,000 - 3,999,999 1.07 1.91 1.36 8.445 119.8 32.18 83.28 69.41
4,000,000 - 4,999,999 1.21 2.06 1.40 8.496 115.6 46.26 79.10 66.23
5,000,000 - 5,999,999 1.23 1.51 1.32 8.621 107.8 56.49 77.98 69.63
6,000,000 - 6,999,999 1.26 1.85 1.48 8.419 116.0 55.59 79.92 70.85
7,000,000 - 7,999,999 1.24 1.62 1.42 8.585 117.8 55.82 78.93 70.48
8,000,000 - 8,999,999 1.20 1.30 1.24 8.526 113.8 62.86 79.22 72.81
9,000,000 - 9,999,999 1.23 1.54 1.38 8.474 118.5 67.79 77.23 72.72
10,000,000 - 11,999,999 1.24 1.57 1.38 8.477 99.7 67.83 80.00 74.85
12,000,000 - 13,999,999 1.21 1.38 1.30 8.570 116.0 57.51 75.17 66.16
14,000,000 - 16,999,999 1.42 1.42 1.42 8.150 111.0 77.70 77.70 77.70
17,000,000 - 19,999,999 1.32 1.53 1.42 9.000 117.0 57.70 71.18 64.54
20,000,000 - 24,999,999 1.21 1.29 1.25 8.118 114.8 71.38 72.58 71.95
25,000,000 - 49,999,999 1.19 1.33 1.27 8.003 112.4 57.52 78.98 68.31
50,000,000 - 55,600,000 1.23 1.23 1.23 8.100 117.0 80.00 80.00 80.00
Total/Avg./Wtd.
Avg./Min/Max: 1.07x 2.25x 1.34x 8.409% 114.9 32.18% 83.28% 70.82%
</TABLE>
A-13
<PAGE>
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 54 $232,479,207 30.05% $ 216,587 $55,600,000 $4,305,170
Retail 51 228,366,164 29.51 422,360 23,197,884 4,477,768
Office 26 185,846,814 24.02 648,658 36,811,929 7,147,954
Lodging 9 61,523,679 7.95 3,973,509 11,492,165 6,835,964
Industrial 13 59,665,412 7.71 1,028,713 13,946,089 4,589,647
Mixed Use 1 3,147,693 0.41 3,147,693 3,147,693 3,147,693
Self-Storage 3 1,733,538 0.22 419,956 703,182 577,846
Mobile Home Park 1 997,734 0.13 997,734 997,734 997,734
-- ------------ ------
Total/Avg./Wtd.
Avg./Min/Max: 158 $773,760,240 100.00% $ 216,587 $55,600,000 $4,897,217
=== ============ ======
<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 1.07x 2.25x 1.28x 8.142% 116.8 49.60% 83.28% 76.28%
Retail 1.15 1.98 1.34 8.557 114.8 42.27 79.22 70.75
Office 1.23 1.56 1.32 8.391 111.1 55.82 80.00 67.12
Lodging 1.42 2.06 1.60 8.697 118.0 46.26 77.57 65.79
Industrial 1.24 1.91 1.36 8.673 116.5 32.18 79.05 66.45
Mixed Use 1.45 1.45 1.45 7.580 99.0 77.72 77.72 77.72
Self-Storage 1.48 2.04 1.72 9.000 156.0 66.97 71.81 69.41
Mobile Home Park 1.84 1.84 1.84 8.625 115.0 55.43 55.43 55.43
Total/Avg./Wtd.
Avg./Min/Max: 1.07x 2.25x 1.34x 8.409% 114.9 32.18% 83.28% 70.82%
</TABLE>
DISTRIBUTION OF DEBT SERVICE COVERAGE RATIOS (NCF)
<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 2 $ 6,480,761 0.84% $3,093,072 $ 3,387,689 $3,240,380
1.11 - 1.20 8 53,047,845 6.86 708,229 33,940,000 6,630,981
1.21 - 1.30 57 363,507,504 46.98 736,304 55,600,000 6,377,325
1.31 - 1.40 27 167,428,934 21.64 509,136 36,811,929 6,201,072
1.41 - 1.50 12 63,131,994 8.16 610,400 16,316,458 5,260,999
1.51 - 1.60 10 70,772,694 9.15 419,956 18,463,148 7,077,269
1.61 - 1.70 4 21,305,740 2.75 3,187,777 7,479,792 5,326,435
1.71 - 1.80 3 7,159,802 0.93 1,088,138 3,973,509 2,386,601
1.81 - 1.90 2 7,947,103 1.03 997,734 6,949,369 3,973,551
1.91 - 2.00 2 6,082,935 0.79 2,124,218 3,958,717 3,041,467
2.01 - 2.10 2 5,699,634 0.74 703,182 4,996,452 2,849,817
2.21 - 2.30 1 1,195,296 0.15 1,195,296 1,195,296 1,195,296
-- ------------ ------
Total/Avg./Wtd.
Avg./Min/Max: 130 $773,760,240 100.00% $ 419,956 $55,600,000 $5,952,002
=== ============ ======
<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 1.07x 1.08x 1.07x 8.577% 199.9 75.28% 83.28% 79.10%
1.11 - 1.20 1.15 1.20 1.19 8.257 118.8 63.99 81.24 78.44
1.21 - 1.30 1.21 1.30 1.25 8.440 112.9 62.86 80.00 74.22
1.31 - 1.40 1.31 1.39 1.34 8.368 114.0 57.51 80.00 67.84
1.41 - 1.50 1.41 1.50 1.45 8.314 115.4 58.56 79.09 74.00
1.51 - 1.60 1.51 1.60 1.55 8.502 116.1 52.93 69.99 61.91
1.61 - 1.70 1.62 1.66 1.63 8.413 116.3 53.28 67.14 62.28
1.71 - 1.80 1.73 1.76 1.73 8.754 113.3 42.27 64.01 52.53
1.81 - 1.90 1.84 1.85 1.85 7.956 108.9 55.43 55.59 55.57
1.91 - 2.00 1.91 1.98 1.93 8.770 118.3 32.18 57.03 40.86
2.01 - 2.10 2.04 2.06 2.06 8.671 123.6 46.26 66.97 48.82
2.21 - 2.30 2.25 2.25 2.25 8.190 113.0 49.60 49.60 49.60
Total/Avg./Wtd.
Avg./Min/Max: 1.07x 2.25x 1.34x 8.409% 114.9 32.18% 83.28% 70.82%
</TABLE>
A-14
<PAGE>
DISTRIBUTION 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 MORTGAGE CUT-OFF DATE DATE DATE DATE DATE
INTEREST RATES LOANS BALANCE BALANCE BALANCE BALANCE BALANCE
------------------- ----------- -------------- ------------ -------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
7.2501 - 7.5000% 1 $ 11,803,024 1.53% $11,803,024 $11,803,024 $11,803,024
7.5001 - 7.7500 2 39,959,623 5.16 3,147,693 36,811,929 19,979,811
7.7501 - 8.0000 7 24,056,451 3.11 1,485,003 6,949,369 3,436,636
8.0001 - 8.2500 19 218,212,292 28.20 736,304 55,600,000 11,484,857
8.2501 - 8.5000 36 170,912,235 22.09 708,229 27,222,688 4,747,562
8.5001 - 8.7500 30 131,862,217 17.04 997,734 10,165,290 4,395,407
8.7501 - 9.0000 26 131,972,994 17.06 419,956 18,994,291 5,075,884
9.0001 - 9.2500 5 31,107,163 4.02 1,847,453 18,463,148 6,221,433
9.2501 - 9.5000 4 13,874,241 1.79 509,136 11,341,541 3,468,560
-- ------------ ------
Total/Avg./Wtd.
Avg./Min/Max: 130 $773,760,240 100.00% $ 419,956 $55,600,000 $ 5,952,002
=== ============ ======
<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 MORTGAGE COVERAGE COVERAGE COVERAGE MORTGAGE MATURITY DATE DATE DATE
INTEREST RATES RATIO RATIO RATIO RATE (MOS) LTV LTV LTV
------------------- ---------- ---------- ---------- ---------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
7.2501 - 7.5000% 1.57x 1.57x 1.57x 7.380% 87.0 67.83% 67.83% 67.83%
7.5001 - 7.7500 1.33 1.45 1.34 7.603 103.6 57.52 77.72 59.11
7.7501 - 8.0000 1.21 1.85 1.56 7.872 131.6 52.93 77.98 62.27
8.0001 - 8.2500 1.19 2.25 1.28 8.126 116.2 49.60 80.00 76.20
8.2501 - 8.5000 1.07 1.76 1.32 8.398 117.3 57.96 81.24 72.63
8.5001 - 8.7500 1.08 2.06 1.37 8.618 121.9 46.26 83.28 71.25
8.7501 - 9.0000 1.23 2.04 1.36 8.854 110.4 32.18 77.79 67.07
9.0001 - 9.2500 1.24 1.53 1.48 9.084 115.5 56.49 71.33 58.99
9.2501 - 9.5000 1.17 1.39 1.24 9.413 68.3 58.52 75.61 73.22
Total/Avg./Wtd.
Avg./Min/Max: 1.07x 2.25x 1.34x 8.409% 114.9 32.18% 83.28% 70.82%
</TABLE>
DISTRIBUTION OF AMORTIZATION TYPES
<TABLE>
<CAPTION>
PERCENTAGE
OF
AGGREGATE MINIMUM MAXIMUM AVERAGE
NUMBER OF CUT-OFF CUT-OFF CUT-OFF CUT-OFF CUT-OFF
MORTGAGE DATE DATE DATE DATE DATE
AMORTIZATION TYPE LOANS BALANCE BALANCE BALANCE BALANCE BALANCE
------------------- ----------- --------------- ------------ ------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Balloon 104 $575,956,397 74.44% $ 419,956 $55,600,000 $5,538,042
Hyperamortizing 22 187,429,196 24.22 2,972,079 36,811,929 8,519,509
Fully Amortizing 4 10,374,647 1.34 1,939,532 3,958,717 2,593,662
--- ------------ ------
Total/Avg./Wtd.
Avg./Min/Max: 130 $773,760,240 100.00% $ 419,956 $55,600,000 $5,952,002
=== ============ ======
<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
AMORTIZATION TYPE RATIO RATIO RATIO RATE (MOS) LTV LTV LTV
------------------- ---------- ---------- ---------- ---------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balloon 1.08x 2.25x 1.30x 8.419% 114.7 42.27% 83.28% 73.12%
Hyperamortizing 1.07 2.06 1.44 8.378 112.2 46.26 77.72 64.82
Fully Amortizing 1.15 1.91 1.56 8.440 175.4 32.18 74.31 51.70
Total/Avg./Wtd.
Avg./Min/Max: 1.07x 2.25x 1.34x 8.409% 114.9 32.18% 83.28% 70.82%
</TABLE>
A-15
<PAGE>
DISTRIBUTION OF CUT-OFF DATE 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 - 35.0% 1 $ 3,958,717 0.51% $3,958,717 $ 3,958,717 $3,958,717
40.1 - 45.0 1 2,098,154 0.27 2,098,154 2,098,154 2,098,154
45.1 - 50.0 2 6,191,748 0.80 1,195,296 4,996,452 3,095,874
50.1 - 55.0 3 10,989,750 1.42 2,487,612 4,528,629 3,663,250
55.1 - 60.0 15 113,498,262 14.67 509,136 36,811,929 7,566,551
60.1 - 65.0 9 30,863,293 3.99 918,314 8,172,391 3,429,255
65.1 - 70.0 21 112,635,736 14.56 419,956 27,222,688 5,363,606
70.1 - 75.0 37 201,857,950 26.09 610,400 23,197,884 5,455,620
75.1 - 80.0 39 285,795,163 36.94 736,304 55,600,000 7,328,081
80.1 - 85.0 2 5,871,467 0.76 2,778,395 3,093,072 2,935,733
-- ------------ ------
Total/Avg./Wtd.
Avg./Min/Max: 130 $773,760,240 100.00% $ 419,956 $55,600,000 $5,952,002
=== ============ ======
<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 - 35.0% 1.91x 1.91x 1.91x 8.910% 118.0 32.18% 32.18% 32.18%
40.1 - 45.0 1.73 1.73 1.73 8.875 118.0 42.27 42.27 42.27
45.1 - 50.0 2.06 2.25 2.10 8.541 117.8 46.26 49.60 46.90
50.1 - 55.0 1.55 1.73 1.65 8.220 140.3 52.93 54.81 53.75
55.1 - 60.0 1.33 1.98 1.46 8.369 111.4 55.43 60.00 57.53
60.1 - 65.0 1.17 1.76 1.36 8.691 104.0 62.86 64.88 63.68
65.1 - 70.0 1.21 2.04 1.40 8.386 116.1 65.21 69.99 67.92
70.1 - 75.0 1.15 1.50 1.29 8.498 115.0 70.05 74.89 72.61
75.1 - 80.0 1.07 1.47 1.27 8.333 113.9 75.17 80.00 78.43
80.1 - 85.0 1.08 1.18 1.13 8.556 210.3 81.24 83.28 82.31
Total/Avg./Wtd.
Avg./Min/Max: 1.07x 2.25x 1.34x 8.409% 114.9 32.18% 83.28% 70.82%
</TABLE>
A-16
<PAGE>
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 16 $148,711,704 19.22% $ 509,136 $36,811,929 $ 9,294,481
New Jersey 16 123,910,461 16.01 418,432 55,600,000 7,744,404
Texas 11 40,021,333 5.17 648,658 18,994,291 3,638,303
Virginia 10 34,061,593 4.40 708,229 8,247,294 3,406,159
Illinois 7 32,937,338 4.26 927,353 8,172,391 4,705,334
New York 2 30,147,253 3.90 6,949,369 23,197,884 15,073,626
Nevada 7 28,684,674 3.71 1,847,453 7,000,777 4,097,811
Michigan 4 27,098,257 3.50 4,395,737 8,912,122 6,774,564
Maryland 5 26,911,176 3.48 1,181,413 9,084,449 5,382,235
Arizona 5 25,740,633 3.33 997,734 13,380,226 5,148,127
Pennsylvania 17 25,182,754 3.25 216,587 7,535,472 1,481,338
Florida 7 23,834,309 3.08 997,982 5,735,554 3,404,901
Colorado 5 21,976,894 2.84 1,894,691 11,341,541 4,395,379
Minnesota 2 20,145,106 2.60 3,828,648 16,316,458 10,072,553
Massachusetts 1 18,463,148 2.39 18,463,148 18,463,148 18,463,148
North Carolina 6 17,610,646 2.28 1,576,942 5,947,737 2,935,108
Connecticut 3 15,384,483 1.99 2,490,773 7,897,258 5,128,161
Kansas 2 14,686,280 1.90 6,140,857 8,545,423 7,343,140
Georgia 5 14,116,140 1.82 1,646,770 4,046,143 2,823,228
District of Columbia 3 11,888,463 1.54 2,417,857 5,827,835 3,962,821
Washington 4 10,809,239 1.40 1,195,296 5,068,823 2,702,310
New Mexico 1 9,924,254 1.28 9,924,254 9,924,254 9,924,254
New Hampshire 2 9,077,638 1.17 2,988,062 6,089,576 4,538,819
Indiana 3 9,070,547 1.17 1,428,062 4,943,454 3,023,516
Oklahoma 2 8,473,739 1.10 1,736,728 6,737,011 4,236,870
Ohio 2 4,929,744 0.64 1,088,138 3,841,605 2,464,872
Missouri 2 4,568,950 0.59 1,123,850 3,445,100 2,284,475
Idaho 5 4,458,627 0.58 419,956 1,988,786 891,725
Delaware 1 3,989,267 0.52 3,989,267 3,989,267 3,989,267
Alabama 1 3,973,509 0.51 3,973,509 3,973,509 3,973,509
Nebraska 1 2,972,079 0.38 2,972,079 2,972,079 2,972,079
-- ------------ ------
Total/Avg./Wtd.
Avg./Min/Max: 158 $773,760,240 100.00% $ 216,587 $55,600,000 $ 4,897,217
=== ============ ======
<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 1.98x 1.35x 8.118% 112.6 42.27% 74.89% 66.63%
New Jersey 1.07 1.38 1.23 8.245 120.8 57.51 83.28 76.71
Texas 1.20 1.45 1.30 8.751 116.4 63.13 79.97 72.17
Virginia 1.19 1.37 1.30 8.549 115.3 59.40 80.00 73.51
Illinois 1.24 1.66 1.39 8.320 113.7 57.96 79.13 72.85
New York 1.29 1.85 1.42 8.099 111.1 55.59 71.38 67.74
Nevada 1.24 1.53 1.35 8.507 117.8 64.88 79.05 72.65
Michigan 1.20 1.62 1.41 8.592 117.9 65.61 79.22 70.70
Maryland 1.27 1.62 1.49 8.640 117.3 56.49 79.10 66.94
Arizona 1.21 1.84 1.29 8.433 116.6 55.43 79.22 73.24
Pennsylvania 1.17 1.91 1.47 8.681 116.2 32.18 79.92 61.22
Florida 1.24 1.60 1.30 8.622 116.2 63.16 77.71 71.07
Colorado 1.24 1.46 1.31 8.948 86.6 58.56 75.61 69.44
Minnesota 1.25 1.42 1.39 8.237 112.5 69.61 77.70 76.16
Massachusetts 1.53 1.53 1.53 9.030 115.0 57.70 57.70 57.70
North Carolina 1.24 1.33 1.26 8.463 117.6 73.16 79.09 76.18
Connecticut 1.29 2.06 1.55 8.605 118.0 46.26 79.07 65.89
Kansas 1.27 1.32 1.29 8.681 111.5 71.81 79.24 74.92
Georgia 1.26 1.55 1.36 8.387 138.9 52.93 79.47 71.37
District of Columbia 1.23 1.27 1.25 8.850 58.0 64.04 72.17 67.54
Washington 1.21 2.25 1.40 7.992 113.7 49.60 77.98 72.27
New Mexico 1.23 1.23 1.23 8.450 119.0 77.23 77.23 77.23
New Hampshire 1.25 1.42 1.36 8.507 116.0 72.88 77.57 76.03
Indiana 1.18 1.34 1.25 8.661 113.2 62.91 77.12 70.27
Oklahoma 1.22 1.36 1.33 8.606 116.0 73.15 79.67 74.49
Ohio 1.31 1.76 1.41 8.219 114.5 64.01 75.33 72.83
Missouri 1.21 1.23 1.21 8.350 117.2 65.21 77.51 68.24
Idaho 1.26 2.04 1.45 8.355 180.6 66.96 75.91 69.39
Delaware 1.28 1.28 1.28 8.080 117.0 77.92 77.92 77.92
Alabama 1.73 1.73 1.73 8.760 112.0 54.81 54.81 54.81
Nebraska 1.32 1.32 1.32 8.125 117.0 74.30 74.30 74.30
Total/Avg./Wtd.
Avg./Min/Max: 1.07x 2.25x 1.34x 8.409% 114.9 32.18% 83.28% 70.82%
</TABLE>
A-17
<PAGE>
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>
111 - 130 1 $ 3,958,717 0.51% $3,958,717 $ 3,958,717 $3,958,717
171 - 190 1 1,939,532 0.25 1,939,532 1,939,532 1,939,532
211 - 230 1 1,988,786 0.26 1,988,786 1,988,786 1,988,786
231 - 250 2 3,405,926 0.44 918,314 2,487,612 1,702,963
271 - 290 5 4,003,089 0.52 419,956 1,181,413 800,618
291 - 310 15 98,217,922 12.69 2,914,283 13,946,089 6,547,861
311 - 330 1 5,735,554 0.74 5,735,554 5,735,554 5,735,554
331 - 360 104 654,510,715 84.59 509,136 55,600,000 6,293,372
--- ------------ ------
Total/Avg./Wtd.
Avg./Min/Max: 130 $773,760,240 100.00% $ 419,956 $55,600,000 $5,952,002
=== ============ ======
<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>
111 - 130 1.91x 1.91x 1.91x 8.910% 118.0 32.18% 32.18% 32.18%
171 - 190 1.15 1.15 1.15 8.750 176.0 74.31 74.31 74.31
211 - 230 1.28 1.28 1.28 7.850 212.0 66.96 66.96 66.96
231 - 250 1.17 1.55 1.45 8.292 203.8 52.93 63.99 55.91
271 - 290 1.27 2.04 1.60 8.753 127.9 64.01 71.81 66.82
291 - 310 1.28 2.06 1.52 8.649 117.4 46.26 77.92 65.14
311 - 330 1.25 1.25 1.25 8.740 118.0 70.55 70.55 70.55
331 - 360 1.07 2.25 1.31 8.367 113.5 42.27 83.28 72.01
Total/Avg./Wtd.
Avg./Min/Max: 1.07x 2.25x 1.34x 8.409% 114.9 32.18% 83.28% 70.82%
</TABLE>
DISTRIBUTION 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>
60 - 83 4 $ 23,230,004 3.00% $2,417,857 $11,341,541 $5,807,501
84 - 120 118 738,551,393 95.45 509,136 55,600,000 6,258,910
121 - 180 5 4,409,373 0.57 419,956 1,939,532 881,875
181 - 240 2 4,476,398 0.58 1,988,786 2,487,612 2,238,199
241 - 300 1 3,093,072 0.40 3,093,072 3,093,072 3,093,072
--- ------------ ------
Total/Avg./Wtd.
Avg./Min/Max: 130 $773,760,240 100.00% $ 419,956 $55,600,000 $5,952,002
=== ============ ======
<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>
60 - 83 1.23x 1.27x 1.24x 9.123% 58.0 64.04% 75.61% 71.48%
84 - 120 1.07 2.25 1.34 8.387 115.0 32.18 81.24 70.81
121 - 180 1.15 2.04 1.39 8.756 164.5 66.97 75.91 72.65
181 - 240 1.28 1.55 1.43 7.889 225.9 52.93 66.96 59.16
241 - 300 1.08 1.08 1.08 8.670 295.0 83.28 83.28 83.28
Total/Avg./Wtd.
Avg./Min/Max: 1.07x 2.25x 1.34x 8.409% 114.9 32.18% 83.28% 70.82%
</TABLE>
A-18
<PAGE>
DISTRIBUTION 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>
51 - 70 4 $ 23,230,004 3.00% $ 2,417,857 $11,341,541 $ 5,807,501
71 - 90 1 11,803,024 1.53 11,803,024 11,803,024 11,803,024
91 - 110 12 81,347,677 10.51 708,229 36,811,929 6,778,973
111 - 120 105 645,400,691 83.41 509,136 55,600,000 6,146,673
151 - 170 4 2,469,841 0.32 419,956 736,304 617,460
171 - 190 1 1,939,532 0.25 1,939,532 1,939,532 1,939,532
211 - 230 1 1,988,786 0.26 1,988,786 1,988,786 1,988,786
231 - 250 1 2,487,612 0.32 2,487,612 2,487,612 2,487,612
271 - 295 1 3,093,072 0.40 3,093,072 3,093,072 3,093,072
--- ------------ ------
Total/Avg./Wtd.
Avg./Min/Max: 130 $773,760,240 100.00% $ 419,956 $55,600,000 $ 5,952,002
=== ============ ======
<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>
51 - 70 1.23x 1.27x 1.24x 9.123% 58.0 64.04% 75.61% 71.48%
71 - 90 1.57 1.57 1.57 7.380 87.0 67.83 67.83 67.83
91 - 110 1.19 1.85 1.37 8.007 106.1 55.59 79.27 64.47
111 - 120 1.07 2.25 1.34 8.453 116.6 32.18 81.24 71.66
151 - 170 1.26 2.04 1.58 8.762 155.4 66.97 75.91 71.34
171 - 190 1.15 1.15 1.15 8.750 176.0 74.31 74.31 74.31
211 - 230 1.28 1.28 1.28 7.850 212.0 66.96 66.96 66.96
231 - 250 1.55 1.55 1.55 7.920 237.0 52.93 52.93 52.93
271 - 295 1.08 1.08 1.08 8.670 295.0 83.28 83.28 83.28
Total/Avg./Wtd.
Avg./Min/Max: 1.07x 2.25x 1.34x 8.409% 114.9 32.18% 83.28% 70.82%
</TABLE>
DISTRIBUTION OF PREPAYMENT PROVISIONS
<TABLE>
<CAPTION>
PERCENTAGE
OF
AGGREGATE MINIMUM MAXIMUM AVERAGE
NUMBER OF CUT-OFF CUT-OFF CUT-OFF CUT-OFF
MORTGAGE CUT-OFF DATE DATE DATE DATE DATE
PREPAYMENT PROVISION LOANS BALANCE BALANCE BALANCE BALANCE BALANCE
------------------------- ----------- -------------- ------------ ------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Defeasance 121 $727,600,244 94.03% $ 509,136 $55,600,000 $ 6,013,225
Greater of YM or 1% UPB 3 38,608,297 4.99 708,229 36,811,929 12,869,432
Greater of YM or 1% and
Declining Fee 5 4,458,627 0.58 419,956 1,988,786 891,725
Other (a) 1 3,093,072 0.40 3,093,072 3,093,072 3,093,072
--- ------------ ------
Total/Avg./Wtd.
Avg./Min/Max: 130 $773,760,240 100.00% $ 419,956 $55,600,000 $ 5,952,002
=== ============ ======
<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
PREPAYMENT PROVISION RATIO RATIO RATIO RATE (MOS) LTV LTV LTV
------------------------- ---------- ---------- ---------- ---------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Defeasance 1.07x 2.25x 1.34x 8.449% 114.3 32.18% 81.24% 71.45%
Greater of YM or 1% UPB 1.19 1.76 1.34 7.647 104.2 57.52 73.77 58.00
Greater of YM or 1% and
Declining Fee 1.26 2.04 1.45 8.355 180.6 66.96 75.91 69.39
Other (a) 1.08 1.08 1.08 8.670 295.0 83.28 83.28 83.28
Total/Avg./Wtd.
Avg./Min/Max: 1.07x 2.25x 1.34x 8.409% 114.9 32.18% 83.28% 70.82%
</TABLE>
A-19
<PAGE>
ANNEX B
WELLS FARGO [LOGO]
WELLS FARGO BANK MINNESOTA, N.A.
CORPORATE TRUST SERVICES
11000 BROKEN LAND PARKWAY
COLUMBIA, MD 21044
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 2000-C2
-----------------------------------------
For Additional Information please contact
CTSLink Customer Service
(301) 815-6600
Reports Available on the World Wide Web
at www.ctslink.com/cmbs
-----------------------------------------
PAYMENT DATE: 09/17/2000
RECORD DATE: 08/31/2000
DISTRIBUTION DATE STATEMENT
TABLE OF CONTENTS
================================================================================
STATEMENT SECTIONS PAGE(s)
------------------ -------
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
================================================================================
Deutsche Bank Securities Inc.
31 West 52nd Street
New York, NY 10019
Contact: Chris Battles
Phone Number: (212) 469-3671
================================================================================
UNDERWRITER
================================================================================
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Contact: Dan Sparks
Phone Number: (212) 902-2914
================================================================================
MASTER SERVICER
================================================================================
GMAC Commercial Mortgage Corp.
200 Witmar Road
Horsham, PA 10944
Contact: Coral I. Horstmeyer
Phone Number: (215) 328-1790
================================================================================
SPECIAL SERVICER
GMAC Commercial Mortgage
550 California Street, 12th Floor
San Francisco, CA 94104
Contact: Henry Breber
Phone Number: (415) 835-9268
================================================================================
This report has been compiled from information provided to Wells Fargo Bank MN,
N.A. by various third parties, which may include the Servicer, Master servicer,
Special Servicer and others. Wells Fargo Bank MN, N.A. has not independently
confirmed the accuracy of information received from these third parties and
assumes no duty to do so. Wells Fargo Bank MN, N.A. expressly disclaims any
responsibility for the accuracy or completeness of information furnished by
third parties.
Copyright 1997, Wells Fargo Bank Minnesota, N.A. Page 1 of 17
================================================================================
B-1
<PAGE>
WELLS FARGO [LOGO]
WELLS FARGO BANK MINNESOTA, N.A.
CORPORATE TRUST SERVICES
11000 BROKEN LAND PARKWAY
COLUMBIA, MD 21044
GMAC COMMERCIAL MORTGAGE SECURITIES, INC
MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 2000-C2
-----------------------------------------
For Additional Information please contact
CTSLink Customer Service
(301) 815-6600
Reports Available on the World Wide Web
at www.ctslink.com/cmbs
-----------------------------------------
PAYMENT DATE: 09/17/2000
RECORD DATE: 08/31/2000
CERTIFICATE DISTRIBUTION DETAIL
<TABLE>
<CAPTION>
====================================================================================================================================
Realized
Loss/
Pass- Additional Current
Through Original Beginning Principal Interest Prepayment Trust 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
====================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
=======================================================================================================
Original Beginning Ending
Pass-Through Notional Notional Interest Prepayment Total Notional
Class CUSIP Rate Amount Amount Distribution Penalties Distribution Amount
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
X 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00
=======================================================================================================
</TABLE>
(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, Wells Fargo Bank Minnesota, N.A. Page 2 of 17
B-2
<PAGE>
WELLS FARGO [LOGO]
WELLS FARGO BANK MINNESOTA, N.A.
CORPORATE TRUST SERVICES
11000 BROKEN LAND PARKWAY
COLUMBIA, MD 21044
GMAC COMMERCIAL MORTGAGE SECURITIES, INC
MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 2000-C2
-----------------------------------------
For Additional Information please contact
CTSLink Customer Service
(301) 815-6600
Reports Available on the World Wide Web
at www.ctslink.com/cmbs
-----------------------------------------
PAYMENT DATE: 09/17/2000
RECORD DATE: 08/31/2000
CERTIFICATE FACTOR DETAIL
<TABLE>
<CAPTION>
=========================================================================================================
Realized Loss/
Class\ Beginning Principal Interest Prepayment Additional Trust Ending
Component 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
=========================================================================================================
</TABLE>
<TABLE>
<CAPTION>
=========================================================================
Beginning Ending
Notional Interest Prepayment Notional
Class CUSIP Amount Distribution Penalties Amount
-------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
X 0.00000000 0.00000000 0.00000000 0.00000000
=========================================================================
</TABLE>
Copyright 1997, Wells Fargo Bank Minnesota, N.A. Page 3 of 17
B-3
<PAGE>
WELLS FARGO LOGO
WELLS FARGO BANK MINNESOTA, N.A.
CORPORATE TRUST SERVICES
11000 BROKEN LAND PARKWAY
COLUMBIA, MD 21044
GMAC COMMERCIAL MORTGAGE SECURITIES, INC
MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 2000-C2
-----------------------------------------
For Additional Information please contact
CTSLink Customer Service
(301) 815-6600
Reports Available on the World Wide Web
at www.ctslink.com/cmbs
-----------------------------------------
PAYMENT DATE: 09/17/2000
RECORD DATE: 08/31/2000
RECONCILIATION DETAIL
ADVANCE SUMMARY
P&I Advances Outstanding 0.00
Servicing Advances Outstanding 0.00
Reimbursements for Interest on P&I 0.00
Advances paid from general collections
Reimbursement for Interest on Servicing 0.00
Advances paid from general collections
SERVICING FEE SUMMARY
Current Period Accrued Master Servicing Fees 0.00
Less Master Servicing Fees on Delinquent Payments 0.00
Less Reductions to Master Servicing Fees 0.00
Plus Master Servicing Fees for Delinquent Payments Received 0.00
Plus Adjustments for Prior Master Servicing Calculation 0.00
Total Master Servicing Fees Collected 0.00
CERTIFICATE INTEREST RECONCILIATION
<TABLE>
<CAPTION>
----- ----------- ------------- ------------- -------------- ----------- ------------ -------- ------------ --------------
Net Aggregate Distributable Unpaid
Class Accrued Prepayment Distributable Certificate Additional Total Distributable
Certificate Interest Certificate Interest Trust Fund Interest Excess Interest Certificate
Interest Shortfall Interest Adjustment Expenses Distribution Interest Distribution Interest
----- ----------- ------------- ------------- -------------- ----------- ------------ -------- ------------ --------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
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
====== =========== ============= ============= ============== =========== =========== ========= ============ ==============
</TABLE>
Copyright 1997, Wells Fargo Bank Minnesota, N.A. Page 4 of 17
B-4
<PAGE>
WELLS FARGO LOGO
WELLS FARGO BANK MINNESOTA, N.A.
CORPORATE TRUST SERVICES
11000 BROKEN LAND PARKWAY
COLUMBIA, MD 21044
GMAC COMMERCIAL MORTGAGE SECURITIES, INC
MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 2000-C2
-----------------------------------------
For Additional Information please contact
CTSLink Customer Service
(301) 815-6600
Reports Available on the World Wide Web
at www.ctslink.com/cmbs
-----------------------------------------
PAYMENT DATE: 09/17/2000
RECORD DATE: 08/31/2000
OTHER REQUIRED INFORMATION
Available Distribution Amount 0.00
Aggregate Number of Outstanding Loans 0
Aggregate Stated Principal Balance of Loans before Distributions 0.00
Aggregate Stated Principal Balance of Loans after Distributions 0.00
Percentage of Cut-Off Date Principal Balance after Distributions 0.00%
Aggregate Amount of Servicing Fee 0.00
Aggregate Amount of Special Servicing Fee 0.00
Aggregate Amount of Trustee Fee 0.00
Aggregate Additional Trust Fund Expenses 0.00
Specially Serviced Loans not Delinquent
Number of Outstanding Loans 0
Aggregate Unpaid Principal Balance 0.00
Interest Reserve Account
Deposits 0.00
Withdrawals 0.00
APPRAISAL REDUCTIONS
-----------------------------------------------------
Appraisal Date Appraisal
Loan Reduction Reduction
Number Effected Effected
-----------------------------------------------------
NONE
-----------------------------------------------------
TOTAL
=====================================================
Copyright 1997, Wells Fargo Bank Minnesota, N.A. Page 5 of 17
B-5
<PAGE>
WELLS FARGO LOGO
WELLS FARGO BANK MINNESOTA, N.A.
CORPORATE TRUST SERVICES
11000 BROKEN LAND PARKWAY
COLUMBIA, MD 21044
GNAC COMMERCIAL MORTGAGE SECURITIES, INC
MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 2000-C2
-----------------------------------------
For Additional Information please contact
CTSLink Customer Service
(301) 815-6600
Reports Available on the World Wide Web
at www.ctslink.com/cmbs
-----------------------------------------
PAYMENT DATE: 09/17/2000
RECORD DATE: 08/31/2000
RATINGS DETAIL
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------
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>
A-1
A-2
X
B
C
D
E
F
G
H
J
K
L
M
N
-----------------------------------------------------------------------------------------
</TABLE>
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.
55 East Monroe Street One State Street Plaza
Chicago, Illinois 60603 New York, New York 10004
(312) 368-3100 (212) 908-0500
Moody's Investors Service Standard & Poor's Rating Services
99 Church Street 55 Water Street
New York, New York 10007 New York, New York 10041
(212) 553-0300 (212) 438-2000
Copyright 1997, Wells Fargo Bank Minnesota, N.A. Page 6 of 17
B-6
<PAGE>
WELLS FARGO LOGO
WELLS FARGO BANK MINNESOTA, N.A.
CORPORATE TRUST SERVICES
11000 BROKEN LAND PARKWAY
COLUMBIA, MD 21044
GMAC COMMERCIAL MORTGAGE SECURITIES, INC
MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 2000-C2
-----------------------------------------
For Additional Information please contact
CTSLink Customer Service
(301) 815-6600
Reports Available on the World Wide Web
at www.ctslink.com/cmbs
-----------------------------------------
PAYMENT DATE: 09/17/2000
RECORD DATE: 08/31/2000
CURRENT MORTGAGE LOAN AND PROPERTY STRATIFICATION TABLES
SCHEDULED BALANCE
--------------------------------------------------------------------------------
% of
Scheduled # of Scheduled Agg. WAM Weighted
Balance loans Balance Bal. (2) WAC Avg DSCR (1)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Totals
================================================================================
STATE (3)
--------------------------------------------------------------------------------
% of
# of Scheduled Agg. WAM Weighted
State Props. Balance Bal. (2) WAC Avg DSCR (1)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Totals
================================================================================
See footnotes on last page of this section.
Copyright 1997, Wells Fargo Bank Minnesota, N.A. Page 7 of 17
B-7
<PAGE>
WELLS FARGO [LOGO]
WELLS FARGO BANK MINNESOTA, N.A.
CORPORATE TRUST SERVICES
11000 BROKEN LAND PARKWAY
COLUMBIA, MD 21044
GMAC COMMERCIAL MORTGAGE SECURITIES, INC
MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 2000-C2
-----------------------------------------
For Additional Information please contact
CTSLink Customer Service
(301) 815-6600
Reports Available on the World Wide Web
at www.ctslink.com/cmbs
-----------------------------------------
PAYMENT DATE: 09/17/2000
RECORD DATE: 08/31/2000
--------------------------------------------------------------------------------
CURRENT MORTGAGE LOAN AND PROPERTY STRATIFICATION TABLES
<TABLE>
<CAPTION>
DEBT SERVICE COVERAGE RATIO
--------------------------------------------------------------------------------
% of
Debt Service # of Scheduled Agg. WAM Weighted
Coverage Ratio loans Balance Bal. (2) WAC Avg DSCR(1)
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
--------------------------------------------------------------------------------
Totals
--------------------------------------------------------------------------------
<CAPTION>
NOTE RATE
--------------------------------------------------------------------------------
% of
Note # of Scheduled Agg. WAM Weighted
Rate loans Balance Bal. (2) WAC Avg DSCR(1)
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
--------------------------------------------------------------------------------
Totals
--------------------------------------------------------------------------------
<CAPTION>
PROPERTY TYPE (3)
--------------------------------------------------------------------------------
% of
# of Scheduled Agg. WAM Weighted
Property Type props. Balance Bal. (2) WAC Avg DSCR(1)
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
--------------------------------------------------------------------------------
Totals
--------------------------------------------------------------------------------
<CAPTION>
SEASONING
--------------------------------------------------------------------------------
% of
# of Scheduled Agg. WAM Weighted
Seasoning loans Balance Bal. (2) WAC Avg DSCR(1)
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
--------------------------------------------------------------------------------
Totals
--------------------------------------------------------------------------------
</TABLE>
See footnotes on last page of this section
--------------------------------------------------------------------------------
Copyright 1997, Wells Fargo Bank Minnesota, N.A. Page 8 of 17
B-8
<PAGE>
WELLS FARGO [LOGO]
WELLS FARGO BANK MINNESOTA, N.A.
CORPORATE TRUST SERVICES
11000 BROKEN LAND PARKWAY
COLUMBIA, MD 21044
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 2000-C2
-----------------------------------------
For Additional Information please contact
CTSLink Customer Service
(301) 815-6600
Reports Available on the World Wide Web
at www.ctslink.com/cmbs
-----------------------------------------
PAYMENT DATE: 09/17/2000
RECORD DATE: 08/31/2000
--------------------------------------------------------------------------------
CURRENT MORTGAGE LOAN AND PROPERTY STRATIFICATION TABLES
<TABLE>
<CAPTION>
ANTICIPATED REMAINING TERM (ARD AND BALLOON LOANS)
--------------------------------------------------------------------------------
% of
Anticipated Remaining # of Scheduled Agg. WAM Weighted
Term (2) loans Balance Bal. (2) WAC Avg DSCR(1)
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
--------------------------------------------------------------------------------
Totals
--------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
REMAINING AMORTIZATION TERM (ARD AND BALLOON LOANS)
--------------------------------------------------------------------------------
% of
Remaining Amortization # of Scheduled Agg. WAM Weighted
Term loans Balance Bal. (2) WAC Avg DSCR(1)
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
--------------------------------------------------------------------------------
Totals
--------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
REMAINING STATED TERM (FULLY AMORTIZING LOANS)
--------------------------------------------------------------------------------
% of
Remaining Stated # of Scheduled Agg. WAM Weighted
Term loans Balance Bal. (2) WAC Avg DSCR(1)
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
--------------------------------------------------------------------------------
Totals
--------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
AGE OF MOST RECENT NOI
--------------------------------------------------------------------------------
% of
Age of Most # of Scheduled Agg. WAM Weighted
Recent NOI loans Balance Bal. (2) WAC Avg DSCR(1)
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
--------------------------------------------------------------------------------
Totals
--------------------------------------------------------------------------------
</TABLE>
(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
recent 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 CMSA
Standard Information Package.
--------------------------------------------------------------------------------
Copyright 1997, Wells Fargo Bank Minnesota, N.A. Page 9 of 17
B-9
<PAGE>
WELLS FARGO [LOGO]
WELLS FARGO BANK MINNESOTA, N.A.
CORPORATE TRUST SERVICES
11000 BROKEN LAND PARKWAY
COLUMBIA, MD 21044
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 2000-C2
-----------------------------------------
For Additional Information please contact
CTSLink Customer Service
(301) 815-6600
Reports Available on the World Wide Web
at www.ctslink.com/cmbs
-----------------------------------------
PAYMENT DATE: 09/17/2000
RECORD DATE: 08/31/2000
--------------------------------------------------------------------------------
MORTGAGE LOAN DETAIL
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------
Anticipated Neg.
Loan Property Interest Principal Gross Repayment Maturity Amort
Number ODCR Type (1) City State Payment Payment Coupon Date Date (Y/N)
----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
----------------------------------------------------------------------------------------------------------------
Totals
----------------------------------------------------------------------------------------------------------------
<CAPTION>
---------------------------------------------------------------------------------------
Beginning Ending Paid Appraisal Appraisal Res. Mod.
Loan Scheduled Scheduled Thru Reduction Reduction Strat. Code
Number Balance Balance Date Date Amount (2) (3)
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------
Totals
---------------------------------------------------------------------------------------
</TABLE>
(1) Property Type Code
----------------------
MF - Multi-Family OF - Office
RT - Retail MU - Mixed Use
HC - Health Care LO - Lodging
IN - Industrial SS - Self Storage
WH - Warehouse OT - Other
MH - Mobile Home Park
(2) 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 12 - Reps and Warranties
5 - Note Sale to Master Servicer 13 - Other or TBD
(3) Modification Code
---------------------
1 - Maturity Date Extension
2 - Amortization Change
3 - Principal Write-Off
4 - Combination
--------------------------------------------------------------------------------
Copyright 1997, Wells Fargo Bank Minnesota, N.A. Page 10 of 17
B-10
<PAGE>
WELLS FARGO [LOGO]
WELLS FARGO BANK MINNESOTA, N.A.
CORPORATE TRUST SERVICES
11000 BROKEN LAND PARKWAY
COLUMBIA, MD 21044
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 2000-C2
-----------------------------------------
For Additional Information please contact
CTSLink Customer Service
(301) 815-6600
Reports Available on the World Wide Web
at www.ctslink.com/cmbs
-----------------------------------------
PAYMENT DATE: 09/17/2000
RECORD DATE: 08/31/2000
--------------------------------------------------------------------------------
PRINCIPAL PREPAYMENT DETAIL
<TABLE>
-----------------------------------------------------------------------------------------------------------------------------
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
-----------------------------------------------------------------------------------------------------------------------------
</TABLE>
Copyright 1997, Wells Fargo Bank Minnesota, N.A. Page 11 of 17
--------------------------------------------------------------------------------
B-11
<PAGE>
WELLS FARGO [LOGO]
WELLS FARGO BANK MINNESOTA, N.A.
CORPORATE TRUST SERVICES
11000 BROKEN LAND PARKWAY
COLUMBIA, MD 21044
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 2000-C2
-----------------------------------------
For Additional Information please contact
CTSLink Customer Service
(301) 815-6600
Reports Available on the World Wide Web
at www.ctslink.com/cmbs
-----------------------------------------
PAYMENT DATE: 09/17/2000
RECORD DATE: 08/31/2000
--------------------------------------------------------------------------------
HISTORICAL DETAIL
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------------
Delinquencies
-----------------------------------------------------------------------------------------------------------------------------------
Distribution 30-59 Days 60-89 Days 90 Days or More Foreclosure REO Modifications
Date # Balance # Balance # Balance # Balance # Balance # Balance
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
-----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Prepayments Rate and Maturities
------------------------------------------------- ---------------------------------
Distribution Curtailments Payoff Next Weighted Avg.
Date # Amount # Amount Coupon Remit WAM
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
-----------------------------------------------------------------------------------
</TABLE>
Note: Foreclosure and REO Totals are excluded from the delinquencies aging
categories.
--------------------------------------------------------------------------------
Copyright 1997, Wells Fargo Bank Minnesota, N.A. Page 12 of 17
B-12
<PAGE>
WELLS FARGO [LOGO]
WELLS FARGO BANK MINNESOTA, N.A.
CORPORATE TRUST SERVICES
11000 BROKEN LAND PARKWAY
COLUMBIA, MD 21044
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 2000-C2
-----------------------------------------
For Additional Information please contact
CTSLink Customer Service
(301) 815-6600
Reports Available on the World Wide Web
at www.ctslink.com/cmbs
-----------------------------------------
PAYMENT DATE: 09/17/2000
RECORD DATE: 08/31/2000
--------------------------------------------------------------------------------
DELINQUENCY LOAN DETAIL
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------------
Offering # of Current Outstanding Status of Resolution
Document Months Paid Through P&I P&I Mortgage Strategy Servicing
Loan Number Cross-Reference Delinq. Date Advances Advances** Loan (1) Code (2) Transfer Date
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
----------------------------------------------------------------------------------------------------------------------------------
Totals
----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
--------------------------------------------------------------------------------
Current Outstanding
Foreclosure Servicing Servicing Bankruptcy REO
Loan Number Date Advances Advances Date Date
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
--------------------------------------------------------------------------------
Totals
--------------------------------------------------------------------------------
</TABLE>
(1) Status of Mortgage Loan
---------------------------
A - Payment Not Received 2 - Two Months Delinquent
But Still in Grace Period 3 - Three or More Months Delinquent
B - Late Payment But Less 4 - Assumed Scheduled payment
Than 1 Month Delinquent (Performing Matured Balloon)
0 - Current 7 - Foreclosure
1 - One Month Delinquent 9 - RE
(2) Resolution Strategy Code
----------------------------
1 - Modification 6 - DPO 10 - Deed In Lieu Of
2 - Foreclosure 7 - REO Foreclosure
3 - Bankruptcy 8 - Resolved
4 - Extension 9 - Pending Return
5 - Note Sale to Master Servicer
** Outstanding P&I Advances include the current period advance
--------------------------------------------------------------------------------
Copyright 1997, Wells Fargo Bank Minnesota, N.A. Page 13 of 17
B-13
<PAGE>
WELLS FARGO [LOGO]
WELLS FARGO BANK MINNESOTA, N.A.
CORPORATE TRUST SERVICES
11000 BROKEN LAND PARKWAY
COLUMBIA, MD 21044
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 2000-C2
-----------------------------------------
For Additional Information please contact
CTSLink Customer Service
(301) 815-6600
Reports Available on the World Wide Web
at www.ctslink.com/cmbs
-----------------------------------------
PAYMENT DATE: 09/17/2000
RECORD DATE: 08/31/2000
--------------------------------------------------------------------------------
SPECIALLY SERVICED LOAN DETAIL - PART 1
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------
Offering Servicing Resolution Net
Distribution Loan Document Transfer Strategy Scheduled Property Interest Actual Operating
Date Number Cross-Reference Date Code (1) Balance Type (2) State Rate Balance Income
-----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
-----------------------------------------------------------------------------------------------------------------------------
<CAPTION>
------------------------------------------------------------------------
Remaining
Distribution NOI Note Maturity Amortization
Date Date DSCR Date Date Term
------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
------------------------------------------------------------------------
</TABLE>
(1) Resolution Strategy Code
----------------------------
1 - Modification 6 - DPO 10 - Deed In Lieu Of
2 - Foreclosure 7 - REO Foreclosure
3 - Bankruptcy 8 - Resolved
4 - Extension 9 - Pending Return
5 - Note Sale to Master Servicer
(2) Property Type Code
----------------------
MF - Multi-Family OF - Office
RT - Retail MU - Mixed use
HC - Health Care LO - Lodging
IN - Industrial SS - Self Storage
WH - Warehouse OT - Other
MH - Mobile Home Park
--------------------------------------------------------------------------------
Copyright 1997, Wells Fargo Bank Minnesota, N.A. Page 14 of 17
B-14
<PAGE>
WELLS FARGO [LOGO]
WELLS FARGO BANK MINNESOTA, N.A.
CORPORATE TRUST SERVICES
11000 BROKEN LAND PARKWAY
COLUMBIA, MD 21044
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 2000-C2
-----------------------------------------
For Additional Information please contact
CTSLink Customer Service
(301) 815-6600
Reports Available on the World Wide Web
at www.ctslink.com/cmbs
-----------------------------------------
PAYMENT DATE: 09/17/2000
RECORD DATE: 08/31/2000
--------------------------------------------------------------------------------
SPECIALLY SERVICED LOAN DETAIL - PART 2
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
Offering Resolution Site
Distribution Loan Document Strategy Inspection Appraisal Appraisal Other REO
Date Number Cross-Reference Code (1) Date Phase 1 Date Date Value Property Revenue Comment
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(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 12 - Reps and Warranties
5 - Note Sale to Master Servicer 13 - Other or TBD
--------------------------------------------------------------------------------
Copyright 1997, Wells Fargo Bank Minnesota, N.A. Page 15 of 17
B-15
<PAGE>
WELLS FARGO [LOGO]
WELLS FARGO BANK MINNESOTA, N.A.
CORPORATE TRUST SERVICES
11000 BROKEN LAND PARKWAY
COLUMBIA, MD 21044
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 2000-C2
-----------------------------------------
For Additional Information please contact
CTSLink Customer Service
(301) 815-6600
Reports Available on the World Wide Web
at www.ctslink.com/cmbs
-----------------------------------------
PAYMENT DATE: 09/17/2000
RECORD DATE: 08/31/2000
--------------------------------------------------------------------------------
MODIFIED LOAN DETAIL
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
Offering
Loan Document Pre-Modification
Number Cross-Reference Balance Modification Date Modification Description
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
------------------------------------------------------------------------------------------------------------------------------------
Total
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
--------------------------------------------------------------------------------
Copyright 1997, Wells Fargo Bank Minnesota, N.A. Page 16 of 17
B-16
<PAGE>
WELLS FARGO [LOGO]
WELLS FARGO BANK MINNESOTA, N.A.
CORPORATE TRUST SERVICES
11000 BROKEN LAND PARKWAY
COLUMBIA, MD 21044
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 2000-C2
-----------------------------------------
For Additional Information please contact
CTSLink Customer Service
(301) 815-6600
Reports Available on the World Wide Web
at www.ctslink.com/cmbs
-----------------------------------------
PAYMENT DATE: 09/17/2000
RECORD DATE: 08/31/2000
--------------------------------------------------------------------------------
LIQUIDATED LOAN DETAIL
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------
Final Recovery Offering Gross Proceeds
Loan Determination Document Appraisal Appraisal Actual Gross as a % of
Number Date Cross-Reference Date Value Balance Proceeds Actual Balance
-------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
-------------------------------------------------------------------------------------------------
Current Total
-------------------------------------------------------------------------------------------------
Cumulative Total
-------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
-------------------------------------------------------------------------
Aggregate Net Net Proceeds Repurchased
Loan Liquidation Liquidation as a % of Realized by Seller
Number Expenses* Proceeds Actual Balance Loss (Y/N)
-------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
------------------------------------------------------------------------------------------------
Current Total
------------------------------------------------------------------------------------------------
Cumulative Total
------------------------------------------------------------------------------------------------
</TABLE>
* Aggregate liquidation expenses also include outstanding P & I advances and
unpaid fees (servicing, trustee, etc.).
--------------------------------------------------------------------------------
Copyright 1997, Wells Fargo Bank Minnesota, N.A. Page 17 of 17
B-17
<PAGE>
<PAGE>
<TABLE>
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
SERIES 2000-C2
DELINQUENT LOAN STATUS REPORT
AS OF ____________________
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
SHORT TOTAL OTHER
NAME SQ FT PAID SCHEDULED P&I TOTAL ADVANCES CURRENT CURRENT
PROSPECTUS (WHEN PROPERTY OR THRU LOAN ADVANCES EXPENSES (TAXES & TOTAL MONTHLY INTEREST
ID APPROPRIATE) TYPE CITY STATE UNITS DATE BALANCE TO DATE TO DATE ESCROW) EXPOSURE P&I RATE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
90 +DAYS DELINQUENT
60 DAYS DELINQUENT
30 DAYS DELINQUENT
CURRENT & AT SPECIAL SERVICER
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)
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 services - to be provided by a third party.
------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
-----------------------------------------------
LTM **CAP VALUE USING
MATURITY NOI LTM LTM RATE NOI & CAP
DATE DATE NOI DSCR ASSIGNED RATE
-----------------------------------------------
<S> <C> <C> <C> <C> <C>
-----------------------------------------------
-----------------------------------------------
-----------------------------------------------
</TABLE>
B-18
<PAGE>
GMAC Commercial Mortgage Securities, Inc.
Series 2000-C2
DELINQUENT LOAN STATUS REPORT
AS OF _________
<TABLE>
<CAPTION>
APPRAISAL TOTAL
VALUATION BPO OR LOSS USING APPRAISAL SHORT NAME
DATE INTERNAL 90% APPR. OR ESTIMATED REDUCTION PROSPECTUS (WHEN PROPERTY CITY STATE TRANSFER
VALUE** BPO (F) RECOVERY % REALIZED ID APPROPRIATE) TYPE DATE
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
<CAPTION>
FCL EXPECTED
RESOLUTION START FCL SALE WORKOUT COMMENTS
DATE DATE DATE STRATEGY
<C> <C> <C> <C> <C>
</TABLE>
B-19
<PAGE>
<TABLE>
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
SERIES 2000-C2
HISTORICAL LOAN MODIFICATION REPORT
AS OF ____________________
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
BALANCE WHEN BALANCE AT THE
SENT TO EFFECTIVE DATE # MTHS
PROSPECUTS MOD / EFFECT SPECIAL OF OLD FOR RATE NEW OLD
ID CITY STATE EXTENSION FLAG DATE SERVICER REHABILITATION RATE CHANGE RATE* OLD P&I NEW P&I** MATURITY
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
THIS REPORT IS HISTORICAL
Information is as of modification. Each line it should not change in the future. Only new
modifications should be added.
TOTAL FOR ALL LOANS:
TOTAL FOR LOANS IN CURRENT MONTH:
# OF LOANS $BALANCE
Modifications:
Maturity Date Extensions:
Total:
* 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.
------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
-----------------------------------------------------------
(2)
TOTAL # (1) EST. FUTURE
MTHS FOR REALIZED INTEREST LOSS
NEW CHANGE OF LOSS TO TO TRUST $
MATURITY MOD TRUST $ (RATE REDUCTION) COMMENT
-----------------------------------------------------------
<C> <C> <C> <C> <C>
-----------------------------------------------------------
</TABLE>
B-20
<PAGE>
<TABLE>
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
2000-C2
HISTORICAL LOSS ESTIMATE REPORT (REO - SOLD OR DISCOUNTED PAYOFF)
AS OF ____________________
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------
SHORT % LATEST
NAME RECEIVED APPRAISAL EFFECTIVE NET AMT. TOTAL
PROSPECTUS (WHEN PROPERTY FROM OR BROKERS DATE OF SALES RECEIVED SCHEDULED P&I TOTAL
ID APPROPRIATE) TYPE CITY STATE SALE OPINION SALE PRICE FROM SALE BALANCE ADVANCED EXPENSES
-----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
-----------------------------------------------------------------------------------------------------------------------------
This Report is Historical.
-----------------------------------------------------------------------------------------------------------------------------
All information is from the liquidation date and does not need to be updated.
-----------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------
TOTAL ALL LOANS: 0% $ - $ - $ - $ - $ - $ -
CURRENT MONTH ONLY:
-----------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------
TOTAL CURRENT MONTH: $ - $ - $ - $ - $ - $ -
<CAPTION>
---------------------------------------------------------------------------
DATE
ACTUAL DATE MINOR TOTAL LOSS
SERVICING LOSSES LOSS MINOR ADJ. LOSS % OF
FEES NET PASSED PASSED ADJ. TO PASSED WITH SCHEDULED
EXPENSES PROCEEDS THRU THRU TRUST THRU ADJUSTMENT BALANCE
---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------
$ - $ - $ -
---------------------------------------------------------------------------
$ - $ - $ -
---------------------------------------------------------------------------
$ - $ - $ -
---------------------------------------------------------------------------
$ - $ - $ -
---------------------------------------------------------------------------
$ - $ - $ - $ - $ - 0%
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
$ - $ - $ - $ -
</TABLE>
B-21
<PAGE>
<TABLE>
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
SERIES 2000-C2
REO STATUS REPORT
AS OF ____________________
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------------
SHORT TOTAL OTHER
NAME SQ FT PAID SCHEDULED P&I TOTAL ADVANCES CURRENT
PROSPECTUS (WHEN PROPERTY OR THRU LOAN ADVANCES EXPENSES (TAXES TOTAL MONTHLY MATURITY
ID APPROPRIATE) TYPE CITY STATE UNITS DATE BALANCE TO DATE TO DATE & ESCROW) EXPOSURE P&I DATE
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
(1) Use the following codes; App. - Appraisal, BPO - Brokers Opinion, Int - Internal Value
----------------------------------------------------------------------------------------------------------------------------------
*** How to determine the cap rate is agreed upon by Underwriter and servicers - to be provided by third party.
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
CAP VALUE APPRAISAL TOTAL
LTM LTM RATE USING BPO OR LOSS USING ESTIMATED APPRAISAL REO PENDING
NOI NOI/ ASSIGN VALUATION NOI & INTERNAL 92% APPR. RECOVERY REDUCTION TRANSFER ACQUISITION RESOLUTION
DATE DSC *** DATE CAP RATE VALUE** OR BPO (F) % REALIZED DATE DATE DATE COMMENTS
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
----------------------------------------------------------------------------------------------------------------
</TABLE>
B-22
<PAGE>
<TABLE>
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
SERIES 2000-C2
SERVICER WATCH LIST
AS OF ____________________
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
SHORT NAME SCHEDULED MATURITY LTM COMMENT/ REASON
PROSPECTUS ID (WHEN APPROPRIATE) PROPERTY TYPE CITY STATE LOAN BALANCE PAID THRU DATE DATE DSCR ON WATCH LIST
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
List all loans on watch list and reason sorted in decending balance order.
Total: $
*LTM - Last 12 months either trailing or last annual
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
B-23
<PAGE>
<TABLE>
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
SERIES 2000-C2
COMPARATIVE FINANCIAL STATUS REPORT
AS OF ____________________
<CAPTION>
ORIGINAL UNDERWRITING 2ND PRECEDING ANNUAL OPERATING
INFORMATION INFORMATION
-----------------------------------------------------------------------------------------------------------------------------------
BASIS YEAR AS OF _______ NORMALIZED
Last
Property Scheduled Paid Annual Financial Financial
Prospectus Inspect Loan Thru Debt Info as % Total $ Info as % Total $
ID City State Date Balance Date Service of Date Occ Revenue NOI DSCR of Date Occ Revenue NOI DSCR
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
yy/mm yy/mm yy/mm
List all loans currently in deal with or without information largest to smallest loan
Total: $ $ WA $ $ WA WA $ $ WA
-----------------------------------------------------------------------------------------------------------------------------------
Received Required
Financial Information: Loans Balance Loans Balance
# % $ % # % $ %
Current Full Year:
Current Full Yr. received with DSC <1:
Prior Full Year:
Prior Full Yr. received with DSC <1:
Quarterly Financials:
(1) Net change should compare the latest year to the underwriting year
-----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
-------------------------------------------------------------------------------------
PRECEDING ANNUAL OPERATING TRAILING FINANCIAL
INFORMATION INFORMATION NET CHANGE
-------------------------------------------------------------------------------------
AS OF _______ NORMALIZED MONTH REPORTED ACTUAL PRECEDING & BASIS
Financial FS FS %
Info as % Total $ Start End Total $ % % Total
of Date Occ Revenue NOI DSCR Date Date Revenue NOI DSC Occ Revenue DSC
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
yy/mm yy/mm yy/mm
WA $ $ WA WA $ $ WA WA $ WA
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
</TABLE>
B-24
<PAGE>
<TABLE>
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
SERIES 2000-C2
OPERATING STATEMENT ANALYSIS REPORT
AS OF ______________________
<CAPTION>
PROPERTY OVERVIEW
<S> <C> <C> <C> <C> <C> <C> <C>
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 199_ 199_ 2000 YTD
Occupancy Rate *
Average Rental Rate
* Occupancy rates are year end or the ending date of the financial statement
for the period.
NO. OF MOS.
-------------------------------------------------------------------------------------
INCOME: PRIOR YEAR CURRENT YR.
Number of Mos. Annualized -------------------------------------------------------------------------------------
Period Ended Underwriting 199_ 199_ 2000 2000 YTD** 199_-Base 199_-199_
Statement Classification Base Line Normalized Normalized Normalized as of / /96 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
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)
NOTES AND ASSUMPTIONS:
----------------------------------------------------------------------------------------------------------------------------------
The years shown above will roll always showing a three year history.
This report may vary depending on the property type and because of the way information may vary in each borrowers statement.
Rental Income need to be broken down, whenever possible differently for each property type as follows: Retail: 1) Base Rent
2)Percentage rents on cashflow Hotel: 1)Room Revenue 2)Food/Beverage Nursing Home: 1)Private 2) Medicaid 3) Medicare
INCOME: COMMENT
EXPENSE: COMMENT
CAPITAL ITEMS: COMMENT
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
B-25
<PAGE>
<TABLE>
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
SERIES 2000-C2
NOI ADJUSTMENT WORKSHEET FOR "YEAR"
AS OF $______________________
<CAPTION>
PROPERTY OVERVIEW
<S> <C> <C> <C> <C> <C> <C> <C>
Control Number
Current Balance/Paid to Date
Property Name
Property Type
Property Address, City, State
Net Rentable Square Feet
Year Built/Year Renovated
Year of Operations BORROWER ADJUSTMENT NORMALIZED
Occupancy Rate *
Average Rental Rate
* Occupancy rates are year end or the ending date of the financial statement
for the period.
INCOME:
Number of Mos. Annualized "YEAR"
Period Ended -------------------------------------------------------------------------------------
Statement Classification BORROWER ADJUSTMENT NORMALIZED
Rental Income (Category 1) ACTUAL
Rental Income (Category 2)
Rental Income (Category 3)
Pass Through/Escalations
Other Income
EFFECTIVE GROSS INCOME $0.00 $0.00 $0.00
-------------------------------------------------------------------------------------
Normalized - Full year Financial statements that have been reviewed by the
underwriter or Servicer
-------------------------------------------------------------------------------------
OPERATING EXPENSES:
Real Estate Taxes
Property Insurance
Utilities
Repairs and Maintenance
Management Fees
Payroll & Benefits Expense
Advertising & Marketing
Professional Fees
Other Expenses
Ground Rent
TOTAL OPERATING EXPENSES $0.00 $0.00 $0.00
OPERATING EXPENSE RATIO
NET OPERATING INCOME $0.00 $0.00 $0.00
Leasing Commissions
Tenant Improvements
Replacement Reserve
TOTAL CAPITAL ITEMS $0.00 $0.00 $0.00
N.O.I. AFTER CAPITAL ITEMS $0.00 $0.00 $0.00
DEBT SERVICE (PER SERVICER) $0.00 $0.00 $0.00
CASH FLOW AFTER DEBT SERVICE $0.00 $0.00 $0.00
DSCR: (NOI/Debt Service)
DSCR: (AFTER RESERVES\CAP EXP.)
SOURCE OF FINANCIAL DATA:
(ie. operating statements, financial statements, tax return, other)
NOTES AND ASSUMPTIONS:
----------------------------------------------------------------------------------------------------------------------------------
This report should be completed by the Servicer for an "Normalization" of the Borrowers numbers.
The "Normalized" column is used in the Operating Statement Analysis Report.
This report may vary depending on the property type and because of the way information may vary in each borrowers statement.
INCOME: COMMENT
EXPENSE: COMMENT
CAPITAL ITEMS: COMMENT
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
B-26
<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
$698,318,000 (APPROXIMATE BALANCE) JULY 31, 2000
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 2000-C2
APPROXIMATE SECURITIES STRUCTURE:
---------------------------------
EXPECTED EXPECTED
APPROXIMATE CREDIT WEIGHTED EXPECTED
EXPECTED RATING FACE/NOTIONAL SUPPORT AVERAGE LIFE PAYMENT
CLASS (a) S&P/FITCH AMOUNT (MM) (% OF UPB) (YEARS) (b) WINDOW (b)
--------------------------------------------------------------------------------
PUBLICLY OFFERED CLASSES
A1 AAA/AAA $123.8 21.250% 5.62 9/00-4/09
A2 AAA/AAA 485.5 21.250 9.56 4/09-6/10
B AA/AA 30.9 17.250 9.83 6/10-6/10
C A/A 28.0 13.625 9.86 6/10-7/10
D A-/A- 10.6 12.250 9.91 7/10-7/10
E BBB/BBB 19.3 9.750 9.91 7/10-7/10
PRIVATELY OFFERED CLASSES (c)
--------------------------------------------------------------------------------
F
G
H
J
K
L
M
N
O
X (d)
TOTAL SECURITIES: $
--------------------------------------------------------------------------------
(a) Class A1 is expected to have a fixed pass-through rate. Classes A2 through D
are expected to have a fixed pass-through rate subject to a cap equal to the
weighted average Net Mortgage Pass-Through Rate. Class E is 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) Not offered hereby.
(d) Notional amount on interest only class.
KEY FEATURES:
-------------
Lead Managers: Goldman, Sachs & Co.
Deutsche Banc Alex. Brown
Collateral Contributors: GMAC Commercial Mortgage Corporation (44.31%)
German American Capital Corporation (DB) (31.90%)
Archon Financial, L.P. (GSMC) (23.79%)
Collateral: 128 Mortgage Loans ($684,220,240) and 1 Freddie
Mac Multifamily Gold Participation Certificate
($89,540,000)
Master Servicer: GMAC Commercial Mortgage Corporation
Special Servicer: GMAC Commercial Mortgage Corporation
Trustee: Wells Fargo Bank Minnesota, N.A.
Launch: August 2000
Pricing: August 2000
Closing: August 2000
Cut-Off Date: August 1st, 5th and 10th
Distribution Date: 16th of each month, or following business day
(commencing September 18, 2000)
Payment Delay: 15 days
ERISA Eligible: Classes A1 and A2 are expected to be ERISA
eligible subject to certain conditions for
eligibility.
SMMEA Eligible: Classes A1, A2, and B are expected to be SMMEA
securities upon issuance.
Structure: Sequential pay
Day Count: 30/360
Tax Treatment: REMIC
Rated Final Distribution Date: August 16, 2033
Clean up Call: 1.0%
Minimum Denominations: Publicly Offered Classes: $25,000 & $1;
Class X $1,000,000 Notional Amount & $1.
Delivery: DTC
================================================================================
COLLATERAL FACTS:
-----------------
Cut-Off Date Loan Principal Balance: $773,760,240
Number of Mortgage Loans: 130
Number of Mortgaged Properties: 158
Average Mortgage Loan Cut-Off Date Balance: $5,952,002
Weighted Average Current Mortgage Rate: 8.409%
Weighted Average Loan U/W DSCR (a) (b) (c): 1.34x
Weighted Average Loan Cut-Off Date LTV Ratio (a) (b) (c): 70.82%
Weighted Average Remaining Term to Maturity (months): 114.9
Weighted Average Remaining Amortization Term (months): 344.8
Weighted Average Seasoning (months): 5
Prepayment Lockout / Defeasance as % of Total: 94.03%
Balloon Loans as % of Total (d): 98.66%
Single Largest Asset as % of Total: 11.57%
Five Largest Assets as % of Total: 26.67%
Ten Largest Assets as % of Total: 37.15%
(a) Excluding the underlying loans of the Freddie Mac Multifamily Gold PC, the
Weighted Average DSCR and Weighted Average LTV would be 1.36x and 69.67%
respectively.
(b) 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.
(c) All DSCR and LTV information presented herein is based upon the Crossed
Collateralized LTV and Crossed Collateralized DSCR.
(d) Includes 22 ARD loans totaling $187.4 mm and 24.22% of the Mortgage Loan
Cut-Off date balance.
TEN LARGEST ASSETS OR SPONSORS:
-------------------------------
CURRENT % BY LOAN
LOAN BALANCE POOL UPB LTV DSCR PROPERTY TYPE
--------------------------------------------------------------------------------
Freddie Mac Multifamily
Gold PC $89,540,000 11.57% 79.61% 1.21x Multifamily
Technology Station 36,811,929 4.76 57.52 1.33 Office
Burbank Multifamily
Portfolio (b) 29,617,195 3.83 72.86 1.21 Multifamily
Rialto Building 27,222,688 3.52 69.61 1.28 Office
Centereach Mall 23,197,884 3.00 71.38 1.29 Anchored Retail
One Shoreline Plaza 18,994,291 2.45 71.18 1.32 Office
Sherburne Portfolio 18,463,148 2.39 57.70 1.53 Retail
Rochester Village
Apartments 16,316,458 2.11 77.70 1.42 Multifamily
536 & 544 Fayette Street 13,946,089 1.80 57.51 1.38 Industrial
Ahwatukee Palms
Shopping Ctr. 13,380,226 1.73 75.17 1.21 Anchored Retail
------------ -----
TOTAL/WTD. AVG. (a) $287,489,907 37.15% 71.12% 1.29x
--------------------------------------------------------------------------------
(a) Excluding the underlying loans of the Freddie Mac Multifamily Gold PC the
Top 10 Weighted Average LTV and Weighted Average DSCR would be 67.29% and
1.32x respectively.
(b) Related sponsor including the $20.98 million Parc Point Apartments and $8.64
million Oaks Apartment loans.
FREDDIE MAC MULTIFAMILY GOLD PARTICIPATION CERTIFICATE (a):
-----------------------------------------------------------
Cut-Off Date Certificate Balance: $89,540,000
PC Coupon 7.265%
Remaining Term to Maturity (months): 117.0
Remaining Amortization Term (months): 360.0
Prepayment: Lockout/Defeasance
(a) There are 2 underlying loans to the Freddie Mac Multifamily Gold PC that are
collateralized by 5 multifamily properties in New Jersey with a Cross
Collateralized DSCR of 1.21x and Cross Collateralized LTV of 79.61%.
SELECTED LOAN DATA:
-------------------
NUMBER OF LOAN POOL CUT-OFF DATE BALANCE
MORTGAGED -----------------------------------------
GEOGRAPHIC DISTRIBUTION PROPERTIES (MM) % BY UPB WTD. AVG. DSCR
--------------------------------------------------------------------------------
California 16 $148.7 19.22% 1.35x
New Jersey 16 123.9 16.01 1.23
Texas 11 40.0 5.17 1.30
Virginia 10 34.1 4.40 1.30
Illinois 7 32.9 4.26 1.39
New York 2 30.1 3.90 1.42
Other (a) 96 364.0 47.04 1.37
--- ------ ------
TOTAL/WTD. AVG. 158 $773.8 100.00% 1.34x
--------------------------------------------------------------------------------
(a) Includes 24 states and the District of Columbia.
NUMBER OF LOAN POOL CUT-OFF DATE BALANCE
MORTGAGED -----------------------------------------
PROPERTY TYPE PROPERTIES (MM) % BY UPB WTD. AVG. DSCR
--------------------------------------------------------------------------------
Multifamily 54 $232.5 30.05% 1.28x
Retail (a) 51 228.4 29.51 1.34
Office 26 185.8 24.02 1.32
Lodging 9 61.5 7.95 1.60
Industrial 13 59.7 7.71 1.36
Mixed Use 1 3.1 0.41 1.45
Self-Storage 3 1.7 0.22 1.72
Mobile Home Park 1 1.0 0.13 1.84
--- ------ ------
TOTAL/WTD. AVG. 158 $773.8 100.00% 1.34x
--------------------------------------------------------------------------------
(a) Includes 27 properties for a total of $150.1 million (65.72% of total) that
are Anchored Retail.
All calculations include the underlying loan and property information
of the Freddie Mac Gold PC
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 Goldman, Sachs & Co. and Deutsche Bank
Securities, Inc. and not by the issuer of the securities. Goldman, Sachs & Co.
and Deutsche Bank Securities, Inc. 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.
<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
--------------------------------------------------------------------------------
[ ] For purposes of calculating principal distributions of the Certificates:
-- Available principal will be allocated sequentially to the Class A1,
A2, B, C, D, E, F, G, H, J, K, L, M, N, and O certificates.
-- In case the principal balance of the Class O, N, M, L, K, J, H, G,
F, E, D, C, and B, in that order, have been reduced to zero due to
the allocation of principal losses, then A1 and A2 will be allocated
principal pro rata.
[ ] Class X will be entitled to receive payments of interest only and will not
receive any payments of principal. Class X will be entitled to payments of
interest pro rata (based on interest entitlements) with the Class A1 and
A2 certificates each month.
[ ] Each Class will be subordinate to the Class A1, 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.
[ ] All Classes will pay interest on a 30/360 basis.
[ ] Principal Losses will be allocated in reverse alphabetical order to
Class O, N, M, L, K, J, H, G, F, E, D, C, B, and then pro rata to Class A1
and A2.
[ ] The Master Servicer will cover net prepayment interest shortfalls on the
loans other than the underlying loans of the Freddie Mac Multifamily Gold
PC, 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 equal to 2
basis points per annum 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.
[ ] 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.
[ ] The Freddie Mac Multifamily Gold Participation Certificate is a mortgage
pass-through security issued and guaranteed by Freddie Mac. The Freddie
Mac Multifamily Gold PC represents an undivided beneficial ownership
interest in two multifamily mortgage loans secured by five mortgaged
properties. Freddie Mac guarantees (i) the timely payment of interest at
the PC Coupon rate, (ii) the timely payment of scheduled principal, and
(iii) the ultimate collection of all principal on the underlying loans by
the payment date occurring in the same month as the maturity date of such
loans.
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 Goldman, Sachs & Co. and Deutsche Bank
Securities, Inc. and not by the issuer of the securities. Goldman, Sachs & Co.
and Deutsche Bank Securities, Inc. 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.
<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 (a)
--------------------------------------------------------------------------------
ALLOCATION OF PREPAYMENT PREMIUMS:
----------------------------------
Prepayment premiums and yield maintenance amounts with respect to all loans will
be allocated between the related Certificates then entitled to principal
distributions and the Class X Certificates as follows:
[ ] A percentage of all prepayment premiums and yield maintenance amounts with
respect to all loans will be allocated to each class of the Certificates
then entitled to principal distributions, which percentage will be equal
to the product of (a) the percentage of the total principal distribution
that such Class receives, and (b) a percentage (which can be no greater
than 100%), the numerator of which is the excess, if any, of the
Pass-Through Rate of the Class of the Certificates currently receiving
principal over the relevant Discount Rate, and the denominator of which is
the excess, if any, of the Mortgage Rate of the related Mortgage Loan over
the Discount Rate.
----------------------------------------------------------------------
| |
| Prepayment (Pass-Through Rate - Discount Rate) |
| Premium Allocation = ----------------------------------- |
| Percentage (Mortgage Rate - Discount Rate) |
| |
----------------------------------------------------------------------
[ ] The remaining percentage of such prepayment premiums and yield maintenance
amounts will be allocated to the Class X Certificates.
[ ] In general, this formula provides for an increase in the allocation of
prepayment premiums and yield maintenance premiums to the Certificates
then entitled to principal distributions relative to the Class X
Certificates as Discount Rates decrease and a decrease in the allocation
to such Classes as Discount Rates rise.
Allocation of Prepayment Premiums Example
-----------------------------------------
Discount Rate Fraction Methodology:
Mortgage Rate = 8%
Bond Class Rate = 6%
Treasury Rate = 5%
% of Principal Distributed to Class = 100%
BOND CLASS ALLOCATION | CLASS X ALLOCATION
--------------------------------------------------------------------------------
|
6% - 5% x 100% = 33 1/3% | Receives excess premiums = 66 2/3% thereof
------- |
8% - 5% |
(a) For further information regarding the allocation of prepayment premiums,
refer to the Prospectus Supplement.
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 Goldman, Sachs & Co. and Deutsche Bank
Securities, Inc. and not by the issuer of the securities. Goldman, Sachs & Co.
and Deutsche Bank Securities, Inc. 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.
<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>
----------------------------------------------------------------------------------------------------------
PREPAYMENT PROFILE
----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
PREPAYMENT RESTRICTION ASSUMING NO PREPAYMENT OF PRINCIPAL (a) (b)
----------------------------------------------------------------------------------------------------------
<CAPTION>
----------------------------------------------------------------------------------------------------------
PREPAYMENT AUGUST AUGUST AUGUST AUGUST AUGUST AUGUST AUGUST AUGUST
RESTRICTIONS 2000 2001 2002 2003 2004 2005 2006 2007
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Locked out 99.42% 99.43% 98.20% 16.20% 4.83% 0.00% 0.00% 0.00%
Defeasance 0.00 0.00 1.24 83.25 94.49 94.34 94.35 92.83
Yield Maintenance 0.58 0.57 0.56 0.55 0.68 5.66 5.65 5.10
3.00 - 3.99% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
2.00 - 2.99% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
1.00 - 1.99% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.53
----------------------------------------------------------------------------------------------------------
Open 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1.54
----------------------------------------------------------------------------------------------------------
TOTAL 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
UPB ($MM) 773.76 768.15 761.56 754.35 746.68 715.68 706.59 696.70
% OF INITIAL UPB 100.00% 99.28% 98.42% 97.49% 96.50% 92.49% 91.32% 90.04%
----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
PREPAYMENT AUGUST AUGUST AUGUST AUGUST AUGUST AUGUST AUGUST AUGUST
RESTRICTIONS 2008 2009 2010 2011 2012 2013 2014 2015
----------------------------------------------------------------------------------------------------------
Locked out 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Defeasance 93.89 92.73 30.49 29.01 27.16 33.19 29.50 24.70
Yield Maintenance 5.17 0.00 32.46 33.96 35.83 51.12 56.13 62.84
3.00 - 3.99% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
2.00 - 2.99% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
1.00 - 1.99% 0.52 0.55 37.05 37.04 37.02 15.69 14.37 12.46
----------------------------------------------------------------------------------------------------------
Open 0.41 6.72 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% 100.00%
UPB ($MM) 675.56 617.23 8.62 8.10 7.54 5.18 4.61 4.01
% OF INITIAL UPB 87.31% 79.77% 1.11% 1.05% 0.97% 0.67% 0.60% 0.52%
----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
PREPAYMENT AUGUST AUGUST AUGUST AUGUST AUGUST AUGUST AUGUST AUGUST
RESTRICTIONS 2016 2017 2018 2019 2020 2021 2022 2023
----------------------------------------------------------------------------------------------------------
Locked out 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Defeasance 22.65 19.81 15.19 7.68 0.00 0.00 0.00 0.00
Yield Maintenance 68.30 75.88 84.81 92.32 0.00 0.00 0.00 0.00
3.00 - 3.99% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
2.00 - 2.99% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
1.00 - 1.99% 9.05 4.32 0.00 0.00 100.00 100.00 100.00 100.00
----------------------------------------------------------------------------------------------------------
Open 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
----------------------------------------------------------------------------------------------------------
TOTAL 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
UPB ($MM) 3.59 3.13 2.70 2.38 2.09 1.98 1.86 1.73
% OF INITIAL UPB 0.46% 0.40% 0.35% 0.31% 0.27% 0.26% 0.24% 0.22%
----------------------------------------------------------------------------------------------------------
</TABLE>
(a) Table calculated using modeling assumptions.
(b) Differences in totals may exist due to rounding.
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 Goldman, Sachs & Co. and Deutsche Bank
Securities, Inc. and not by the issuer of the securities. Goldman, Sachs & Co.
and Deutsche Bank Securities, Inc. 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.
<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)
(PREPAYMENTS LOCKED OUT THROUGH LOCK OUT PERIOD, DEFEASANCE, YIELD MAINTENANCE
AND PENALTY PERIOD THEN RUN AT THE INDICATED CPRs)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
PREPAYMENT ASSUMPTIONS (CPR)
0% CPR 25% CPR 50% CPR 75% CPR 100% CPR
--------------------------------------------------------------------------------
A1 5.62 5.61 5.60 5.59 5.51
A2 9.56 9.55 9.53 9.51 9.35
B 9.83 9.83 9.83 9.83 9.66
C 9.86 9.84 9.83 9.83 9.66
D 9.91 9.91 9.89 9.83 9.66
E 9.91 9.91 9.91 9.89 9.71
--------------------------------------------------------------------------------
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 Goldman, Sachs & Co. and Deutsche Bank
Securities, Inc. and not by the issuer of the securities. Goldman, Sachs & Co.
and Deutsche Bank Securities, Inc. 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.
<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>
-----------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTION OF CUT-OFF DATE BALANCES
-----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
WEIGHTED WEIGHTED
AVERAGE AVERAGE
PERCENTAGE OF WEIGHTED REMAINING CUT-OFF
NUMBER OF CUT-OFF AGGREGATE WEIGHTED AVERAGE TERM TO DATE
RANGE OF CUT-OFF MORTGAGE DATE CUT-OFF DATE AVERAGE CUT-OFF AVERAGE MORTGAGE MATURITY LTV
DATE BALANCES LOANS BALANCE BALANCE DATE BALANCE DSCR RATE (MOS) RATIO
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 419,956 - 499,999 1 $ 419,956 0.05% $ 419,956 1.53x 9.000% 156.0 69.99%
500,000 - 999,999 8 6,181,280 0.80 772,660 1.45 8.871 127.5 67.78
1,000,000 - 1,999,999 19 28,180,779 3.64 1,483,199 1.33 8.568 125.5 70.02
2,000,000 - 2,999,999 22 55,471,257 7.17 2,521,421 1.37 8.509 119.3 70.40
3,000,000 - 3,999,999 23 80,617,116 10.42 3,505,092 1.36 8.445 119.8 69.41
4,000,000 - 4,999,999 10 46,093,802 5.96 4,609,380 1.40 8.496 115.6 66.23
5,000,000 - 5,999,999 7 39,849,281 5.15 5,692,754 1.32 8.621 107.8 69.63
6,000,000 - 6,999,999 10 64,554,796 8.34 6,455,480 1.48 8.419 116.0 70.85
7,000,000 - 7,999,999 5 37,806,469 4.89 7,561,294 1.42 8.585 117.8 70.48
8,000,000 - 8,999,999 7 60,325,303 7.80 8,617,900 1.24 8.526 113.8 72.81
9,000,000 - 9,999,999 2 19,008,703 2.46 9,504,352 1.38 8.474 118.5 72.72
10,000,000 - 11,999,999 5 56,402,021 7.29 11,280,404 1.38 8.477 99.7 74.85
12,000,000 - 13,999,999 2 27,326,314 3.53 13,663,157 1.30 8.570 116.0 66.16
14,000,000 - 16,999,999 1 16,316,458 2.11 16,316,458 1.42 8.150 111.0 77.70
17,000,000 - 19,999,999 2 37,457,439 4.84 18,728,720 1.42 9.000 117.0 64.54
20,000,000 - 24,999,999 2 44,174,649 5.71 22,087,325 1.25 8.118 114.8 71.95
25,000,000 - 49,999,999 3 97,974,618 12.66 32,658,206 1.27 8.003 112.4 68.31
$50,000,000 - 55,600,000 1 55,600,000 7.19 55,600,000 1.23 8.100 117.0 80.00
--- ------------ ------
TOTAL/WTD. AVG. 130 $773,760,240 100.00% $ 5,952,002 1.34x 8.409% 114.9 70.82%
=== ============ ======
-----------------------------------------------------------------------------------------------------------------------------------
</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 Goldman, Sachs & Co. and Deutsche Bank
Securities, Inc. and not by the issuer of the securities. Goldman, Sachs & Co.
and Deutsche Bank Securities, Inc. 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.
<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>
---------------------------------------------------------------------------------------------------------------------------
DISTRIBUTION OF MORTGAGED PROPERTIES BY STATE (a)
---------------------------------------------------------------------------------------------------------------------------
<CAPTION>
WEIGHTED
AVERAGE WEIGHTED
PERCENTAGE AVERAGE WEIGHTED REMAINING AVERAGE
NUMBER OF CUT-OFF OF AGGREGATE CUT-OFF WEIGHTED AVERAGE TERM TO CUT-OFF
MORTGAGED DATE CUT-OFF DATE AVERAGE MORTGAGE MATURITY DATE LTV
PROPERTY STATE PROPERTIES BALANCE DATE BALANCE BALANCE DSCR RATE (MOS) RATIO
---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
California 16 $148,711,704 19.22% $9,294,481 1.35x 8.118% 112.6 66.63%
New Jersey 16 123,910,461 16.01 7,744,404 1.23 8.245 120.8 76.71
Texas 11 40,021,333 5.17 3,638,303 1.30 8.751 116.4 72.17
Virginia 10 34,061,593 4.40 3,406,159 1.30 8.549 115.3 73.51
Illinois 7 32,937,338 4.26 4,705,334 1.39 8.320 113.7 72.85
New York 2 30,147,253 3.90 15,073,626 1.42 8.099 111.1 67.74
Nevada 7 28,684,674 3.71 4,097,811 1.35 8.507 117.8 72.65
Michigan 4 27,098,257 3.50 6,774,564 1.41 8.592 117.9 70.70
Maryland 5 26,911,176 3.48 5,382,235 1.49 8.640 117.3 66.94
Arizona 5 25,740,633 3.33 5,148,127 1.29 8.433 116.6 73.24
Pennsylvania 17 25,182,754 3.25 1,481,338 1.47 8.681 116.2 61.22
Florida 7 23,834,309 3.08 3,404,901 1.30 8.622 116.2 71.07
Colorado 5 21,976,894 2.84 4,395,379 1.31 8.948 86.6 69.44
Minnesota 2 20,145,106 2.60 10,072,553 1.39 8.237 112.5 76.16
Massachusetts 1 18,463,148 2.39 18,463,148 1.53 9.030 115.0 57.70
North Carolina 6 17,610,646 2.28 2,935,108 1.26 8.463 117.6 76.18
Connecticut 3 15,384,483 1.99 5,128,161 1.55 8.605 118.0 65.89
Kansas 2 14,686,280 1.90 7,343,140 1.29 8.681 111.5 74.92
Georgia 5 14,116,140 1.82 2,823,228 1.36 8.387 138.9 71.37
District of Columbia 3 11,888,463 1.54 3,962,821 1.25 8.850 58.0 67.54
Washington 4 10,809,239 1.40 2,702,310 1.40 7.992 113.7 72.27
New Mexico 1 9,924,254 1.28 9,924,254 1.23 8.450 119.0 77.23
New Hampshire 2 9,077,638 1.17 4,538,819 1.36 8.507 116.0 76.03
Indiana 3 9,070,547 1.17 3,023,516 1.25 8.661 113.2 70.27
Oklahoma 2 8,473,739 1.10 4,236,870 1.33 8.606 116.0 74.49
Ohio 2 4,929,744 0.64 2,464,872 1.41 8.219 114.5 72.83
Missouri 2 4,568,950 0.59 2,284,475 1.21 8.350 117.2 68.24
Idaho 5 4,458,627 0.58 891,725 1.45 8.355 180.6 69.39
Delaware 1 3,989,267 0.52 3,989,267 1.28 8.080 117.0 77.92
Alabama 1 3,973,509 0.51 3,973,509 1.73 8.760 112.0 54.81
Nebraska 1 2,972,079 0.38 2,972,079 1.32 8.125 117.0 74.30
--- ------------ ------
TOTAL/WTD. AVG. 158 $773,760,240 100.00% $4,897,217 1.34x 8.409% 114.9 70.82%
=== ============ ======
----------------------------------------------------------------------------------------------------------------------------
(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.
</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 Goldman, Sachs & Co. and Deutsche Bank
Securities, Inc. and not by the issuer of the securities. Goldman, Sachs & Co.
and Deutsche Bank Securities, Inc. 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.
<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
--------------------------------------------------------------------------------
[MAP OF UNITED STATES]
NH 1.17% PA 3.25% IN 1.17% CO 2.84%
MA 2.39% VA 4.40% IL 4.26% NM 1.28%
CT 1.99% NC 2.28% MO 0.59% AZ 3.33%
DE 0.52% GA 1.82% MN 2.60% ID 0.58%
MD 3.48% FL 3.08% NB 0.38% NV 3.71%
DC 1.54% AL 0.51% KS 1.90% WA 1.40%
NY 3.90% OH 0.64% OK 1.10% CA 19.22%
NJ 16.01% MI 3.50% TX 5.17%
[PIE CHART]
California 19.22%
New Jersey 16.01%
Texas 5.17%
Virginia 4.40%
Illinois 4.26%
New York 3.90%
Nevada 3.71%
Michigan 3.50%
Other(a) 39.83%
(a) Other includes 22 states and District of Columbia.
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 Goldman, Sachs & Co. and Deutsche Bank
Securities, Inc. and not by the issuer of the securities. Goldman, Sachs & Co.
and Deutsche Bank Securities, Inc. 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.
<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>
------------------------------------------------------------------------------------------------------------------
DISTRIBUTION OF PROPERTY TYPES
------------------------------------------------------------------------------------------------------------------
<CAPTION>
PERCENTAGE WEIGHTED WEIGHTED
OF AVERAGE AVERAGE
AGGREGATE AVERAGE WEIGHTED REMAINING CUT-OFF
NUMBER OF CUT-OFF CUT-OFF CUT-OFF WEIGHTED AVERAGE TERM TO DATE
MORTGAGED DATE DATE DATE AVERAGE MORTGAGE MATURITY LTV
PROPERTY TYPE PROPERTIES BALANCE BALANCE BALANCE DSCR RATE (MOS) RATIO
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Multifamily 54 $232,479,207 30.05% $4,305,170 1.28x 8.142% 116.8 76.28%
Retail (a) 51 228,366,164 29.51 4,477,768 1.34 8.557 114.8 70.75
Office 26 185,846,814 24.02 7,147,954 1.32 8.391 111.1 67.12
Lodging 9 61,523,679 7.95 6,835,964 1.60 8.697 118.0 65.79
Industrial 13 59,665,412 7.71 4,589,647 1.36 8.673 116.5 66.45
Mixed Use 1 3,147,693 0.41 3,147,693 1.45 7.580 99.0 77.72
Self-Storage 3 1,733,538 0.22 577,846 1.72 9.000 156.0 69.41
Mobile Home Park 1 997,734 0.13 997,734 1.84 8.625 115.0 55.43
--- ------------ ------
TOTAL/WTD. AVG. 158 $773,760,240 100.00% $4,897,217 1.34x 8.409% 114.9 70.82%
=== ============ ======
------------------------------------------------------------------------------------------------------------------
a) Includes 27 properties for a total of $150.1 million (65.72% of total) that are Anchored Retail.
</TABLE>
[PIE CHART]
Multifamily 30.05%
Retail 29.51%
Office 24.02%
Lodging 7.95%
Industrial 7.71%
Mixed Use 0.41%
Self-Storage 0.22%
Mobile Home Park 0.13%
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 Goldman, Sachs & Co. and Deutsche Bank
Securities, Inc. and not by the issuer of the securities. Goldman, Sachs & Co.
and Deutsche Bank Securities, Inc. 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.
<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>
------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTION OF UNDERWRITTEN NCF DEBT SERVICE COVERAGE RATIOS
------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
WEIGHTED
AVERAGE WEIGHTED
PERCENTAGE OF WEIGHTED REMAINING AVERAGE
RANGE OF DEBT AGGREGATE AVERAGE WEIGHTED AVERAGE TERM TO CUT-OFF
SERVICE COVERAGE NUMBER OF CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE AVERAGE MORTGAGE MATURITY DATE LTV
RATIOS MORTGAGE LOANS BALANCE BALANCE BALANCE DSCR RATE (MOS) RATIO
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1.00-1.10x 2 $ 6,480,761 0.84% $3,240,380 1.07x 8.577% 199.9 79.10%
1.11-1.20 8 53,047,845 6.86 6,630,981 1.19 8.257 118.8 78.44
1.21-1.30 57 363,507,504 46.98 6,377,325 1.25 8.440 112.9 74.22
1.31-1.40 27 167,428,934 21.64 6,201,072 1.34 8.368 114.0 67.84
1.41-1.50 12 63,131,994 8.16 5,260,999 1.45 8.314 115.4 74.00
1.51-1.60 10 70,772,694 9.15 7,077,269 1.55 8.502 116.1 61.91
1.61-1.70 4 21,305,740 2.75 5,326,435 1.63 8.413 116.3 62.28
1.71-1.80 3 7,159,802 0.93 2,386,601 1.73 8.754 113.3 52.53
1.81-1.90 2 7,947,103 1.03 3,973,551 1.85 7.956 108.9 55.57
1.91-2.00 2 6,082,935 0.79 3,041,467 1.93 8.770 118.3 40.86
2.01-2.10 2 5,699,634 0.74 2,849,817 2.06 8.671 123.6 48.82
2.21-2.30 1 1,195,296 0.15 1,195,296 2.25 8.190 113.0 49.60
--- ------------ ------
TOTAL/WTD. AVG. 130 $773,760,240 100.00% $5,952,002 1.34x 8.409% 114.9 70.82%
=== ============ ======
------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTION OF CUT-OFF DATE LOAN TO VALUE AT ORIGINATION RATIOS
------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
WEIGHTED
AVERAGE WEIGHTED
PERCENTAGE OF WEIGHTED REMAINING AVERAGE
RANGE OF CUT-OFF AGGREGATE AVERAGE WEIGHTED AVERAGE TERM TO CUT-OFF
DATE LOAN-TO-VALUE NUMBER OF CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE AVERAGE MORTGAGE MATURITY DATE LTV
RATIOS MORTGAGE LOANS BALANCE BALANCE BALANCE DSCR RATE (MOS) RATIO
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
30.1-35.0% 1 $ 3,958,717 0.51% $3,958,717 1.91x 8.910% 118.0 32.18%
40.1-45.0 1 2,098,154 0.27 2,098,154 1.73 8.875 118.0 42.27
45.1-50.0 2 6,191,748 0.80 3,095,874 2.10 8.541 117.8 46.90
50.1-55.0 3 10,989,750 1.42 3,663,250 1.65 8.220 140.3 53.75
55.1-60.0 15 113,498,262 14.67 7,566,551 1.46 8.369 111.4 57.53
60.1-65.0 9 30,863,293 3.99 3,429,255 1.36 8.691 104.0 63.68
65.1-70.0 21 112,635,736 14.56 5,363,606 1.40 8.386 116.1 67.92
70.1-75.0 37 201,857,950 26.09 5,455,620 1.29 8.498 115.0 72.61
75.1-80.0 39 285,795,163 36.94 7,328,081 1.27 8.333 113.9 78.43
80.1-85.0 2 5,871,467 0.76 2,935,733 1.13 8.556 210.3 82.31
--- ------------ ------
TOTAL/WTD. AVG. 130 $773,760,240 100.00% $5,952,002 1.34x 8.409% 114.9 70.82%
=== ============ ======
------------------------------------------------------------------------------------------------------------------------------
</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 Goldman, Sachs & Co. and Deutsche Bank
Securities, Inc. and not by the issuer of the securities. Goldman, Sachs & Co.
and Deutsche Bank Securities, Inc. 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.
<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>
-------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTION OF MORTGAGE INTEREST RATES
-------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
WEIGHTED
AVERAGE WEIGHTED
PERCENTAGE OF WEIGHTED REMAINING AVERAGE
AGGREGATE AVERAGE WEIGHTED AVERAGE TERM TO CUT-OFF
RANGE OF NUMBER OF CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE AVERAGE MORTGAGE MATURITY DATE LTV
MORTGAGE RATES MORTGAGE LOANS BALANCE BALANCE BALANCE DSCR RATE (MOS) RATIO
-------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
7.2501-7.5000% 1 $ 11,803,024 1.53% $11,803,024 1.57x 7.380% 87.0 67.83%
7.5001-7.7500 2 39,959,623 5.16 19,979,811 1.34 7.603 103.6 59.11
7.7501-8.0000 7 24,056,451 3.11 3,436,636 1.56 7.872 131.6 62.27
8.0001-8.2500 19 218,212,292 28.20 11,484,857 1.28 8.126 116.2 76.20
8.2501-8.5000 36 170,912,235 22.09 4,747,562 1.32 8.398 117.3 72.63
8.5001-8.7500 30 131,862,217 17.04 4,395,407 1.37 8.618 121.9 71.25
8.7501-9.0000 26 131,972,994 17.06 5,075,884 1.36 8.854 110.4 67.07
9.0001-9.2500 5 31,107,163 4.02 6,221,433 1.48 9.084 115.5 58.99
9.2501-9.5000 4 13,874,241 1.79 3,468,560 1.24 9.413 68.3 73.22
--- ------------ ------
TOTAL/WTD. AVG. 130 $773,760,240 100.00% $5,952,002 1.34x 8.409% 114.9 70.82%
=== ============ ======
-------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTION OF REMAINING AMORTIZATION TERMS (a)
-------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
WEIGHTED
AVERAGE WEIGHTED
PERCENTAGE OF WEIGHTED REMAINING AVERAGE
RANGE OF REMAINING AGGREGATE AVERAGE WEIGHTED AVERAGE TERM TO CUT-OFF
AMORTIZATION TERMS NUMBER OF CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE AVERAGE MORTGAGE MATURITY DATE LTV
(MOS) MORTGAGE LOANS BALANCE BALANCE BALANCE DSCR RATE (MOS) RATIO
-------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
111-130 1 $ 3,958,717 0.51% $3,958,717 1.91x 8.910% 118.0 32.18%
171-190 1 1,939,532 0.25 1,939,532 1.15 8.750 176.0 74.31
211-230 1 1,988,786 0.26 1,988,786 1.28 7.850 212.0 66.96
231-250 2 3,405,926 0.44 1,702,963 1.45 8.292 203.8 55.91
271-290 5 4,003,089 0.52 800,618 1.60 8.753 127.9 66.82
291-310 15 98,217,922 12.69 6,547,861 1.52 8.649 117.4 65.14
311-330 1 5,735,554 0.74 5,735,554 1.25 8.740 118.0 70.55
331-360 104 654,510,715 84.59 6,293,372 1.31 8.367 113.5 72.01
--- ------------ ------
TOTAL/WTD. AVG. 130 $773,760,240 100.00% $5,952,002 1.34x 8.409% 114.9 70.82%
=== ============ ======
-------------------------------------------------------------------------------------------------------------------------------
(a) 88 loans representing 70.48% 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.
</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 Goldman, Sachs & Co. and Deutsche Bank
Securities, Inc. and not by the issuer of the securities. Goldman, Sachs & Co.
and Deutsche Bank Securities, Inc. 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.
<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>
-------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTION OF ORIGINAL TERMS TO MATURITY
-------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
WEIGHTED
AVERAGE WEIGHTED
PERCENTAGE OF WEIGHTED REMAINING AVERAGE
RANGE OF ORIGINAL AGGREGATE AVERAGE WEIGHTED AVERAGE TERM TO CUT-OFF
TERM TO MATURITY NUMBER OF CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE AVERAGE MORTGAGE MATURITY DATE LTV
(MOS) MORTGAGE LOANS BALANCE BALANCE BALANCE DSCR RATE (MOS) RATIO
-------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
60-83 4 $ 23,230,004 3.00% $5,807,501 1.24x 9.123% 58.0 71.48%
84-120 118 738,551,393 95.45 6,258,910 1.34 8.387 115.0 70.81
121-180 5 4,409,373 0.57 881,875 1.39 8.756 164.5 72.65
181-240 2 4,476,398 0.58 2,238,199 1.43 7.889 225.9 59.16
241-300 1 3,093,072 0.40 3,093,072 1.08 8.670 295.0 83.28
--- ------------ ------
TOTAL/WTD. AVG. 130 $773,760,240 100.00% $5,952,002 1.34x 8.409% 114.9 70.82%
=== ============ ======
-------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTION OF REMAINING TERMS TO MATURITY
-------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
WEIGHTED
AVERAGE WEIGHTED
PERCENTAGE OF WEIGHTED REMAINING AVERAGE
RANGE OF REMAINING AGGREGATE AVERAGE WEIGHTED AVERAGE TERM TO CUT-OFF
TERMS TO MATURITY NUMBER OF CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE AVERAGE MORTGAGE MATURITY DATE LTV
(MOS) MORTGAGE LOANS BALANCE BALANCE BALANCE DSCR RATE (MOS) RATIO
-------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
51-70 4 $ 23,230,004 3.00% $5,807,501 1.24x 9.123% 58.0 71.48%
71-90 1 11,803,024 1.53 11,803,024 1.57 7.380 87.0 67.83
91-110 12 81,347,677 10.51 6,778,973 1.37 8.007 106.1 64.47
111-120 105 645,400,691 83.41 6,146,673 1.34 8.453 116.6 71.66
151-170 4 2,469,841 0.32 617,460 1.58 8.762 155.4 71.34
171-190 1 1,939,532 0.25 1,939,532 1.15 8.750 176.0 74.31
211-230 1 1,988,786 0.26 1,988,786 1.28 7.850 212.0 66.96
231-250 1 2,487,612 0.32 2,487,612 1.55 7.920 237.0 52.93
271-295 1 3,093,072 0.40 3,093,072 1.08 8.670 295.0 83.28
--- ------------ ------
TOTAL/WTD. AVG. 130 $773,760,240 100.00% $5,952,002 1.34x 8.409% 114.9 70.82%
=== ============ ======
-------------------------------------------------------------------------------------------------------------------------------
</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 Goldman, Sachs & Co. and Deutsche Bank
Securities, Inc. and not by the issuer of the securities. Goldman, Sachs & Co.
and Deutsche Bank Securities, Inc. 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.
<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>
-------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTION OF AMORTIZATION TYPES
-------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
WEIGHTED
AVERAGE WEIGHTED
PERCENTAGE OF WEIGHTED REMAINING AVERAGE
AGGREGATE AVERAGE WEIGHTED AVERAGE TERM TO CUT-OFF
NUMBER OF CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE AVERAGE MORTGAGE MATURITY DATE LTV
AMORTIZATION TYPE MORTGAGE LOANS BALANCE BALANCE BALANCE DSCR RATE (MOS) RATIO
-------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balloon 104 $575,956,397 74.44% $5,538,042 1.30x 8.419% 114.7 73.12%
Hyperamortizing 22 187,429,196 24.22 8,519,509 1.44 8.378 112.2 64.82
Fully Amortizing 4 10,374,647 1.34 2,593,662 1.56 8.440 175.4 51.70
--- ------------ ------
TOTAL/WTD. AVG. 130 $773,760,240 100.00% $5,952,002 1.34x 8.409% 114.9 70.82%
=== ============ ======
-------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTION OF PREPAYMENT PROVISIONS
-------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
WEIGHTED
AVERAGE WEIGHTED
PERCENTAGE OF WEIGHTED REMAINING AVERAGE
AGGREGATE AVERAGE WEIGHTED AVERAGE TERM TO CUT-OFF
PREPAYMENT NUMBER OF CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE AVERAGE MORTGAGE MATURITY DATE LTV
PROVISION MORTGAGE LOANS BALANCE BALANCE BALANCE DSCR RATE (MOS) RATIO
-------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Defeasance 121 $727,600,244 94.03% $6,013,225 1.34x 8.449% 114.3 71.45%
Greater of YM or
1% UPB 3 38,608,297 4.99 12,869,432 1.34 7.647 104.2 58.00
Greater of YM or
1% and 1% Fee 5 4,458,627 0.58 891,725 1.45 8.355 180.6 69.39
Other (a) 1 3,093,072 0.40 3,093,072 1.08 8.670 295.0 83.28
--- ------------ ------
TOTAL/WTD. AVG. 130 $773,760,240 100.00% $5,952,002 1.34x 8.409% 114.9 70.82%
=== ============ ======
-------------------------------------------------------------------------------------------------------------------------------
(a) Includes one loan with a 29-month lockout period, a 91-month defeasance period, a 119-month period which requires greater
of YM or a 1% penalty, a 57-month period which requires a 1% penalty, and a 4-month open period.
</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 Goldman, Sachs & Co. and Deutsche Bank
Securities, Inc. and not by the issuer of the securities. Goldman, Sachs & Co.
and Deutsche Bank Securities, Inc. 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.
<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
FREDDIE MAC MULTIFAMILY GOLD PARTICIPATION CERTIFICATE
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
///////////////// FREDDIE MAC MULTIFAMILY GOLD PC INFORMATION ////////////////
--------------------------------------------------------------------------------
ORIGINAL CUT-OFF DATE
-------- ------------
PRINCIPAL BALANCE: $89,540,000 $89,540,000
% OF POOL BY UPB 11.57%
SELLER: GMACCM
DATE OF ISSUANCE: TBD
PC COUPON: 7.265%
AMORTIZATION: 30 years
MATURITY DATE: May 1, 2010
FREDDIE MAC GUARANTEE: Freddie Mac guarantees (i) the timely payment of
interest at the PC Coupon Rate, (ii) the timely
payment of scheduled principal and (iii) the ultimate
collection of all principal due to be paid on the
Multifamily Gold Participation Certificate.
CALL PROTECTION: Prepayment lockout; U.S. Treasury defeasance.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
///////////////////////// UNDERLYING LOAN INFORMATION ////////////////////////
--------------------------------------------------------------------------------
ORIGINAL CUT-OFF DATE
-------- ------------
PRINCIPAL BALANCE: $89,540,000 $89,540,000
ORIGINATOR: GMACCM
NOTE DATE: May 4, 2000
INTEREST RATE: 8.10%
AMORTIZATION: 30 years
MATURITY DATE: May 5, 2010
BORROWER/SPONSOR: The two loans have separate single purpose, bankruptcy
remote borrowers.
CALL PROTECTION: Prepayment lockout; U.S. Treasury defeasance.
CROSS COLLATERALIZATION/ Yes / Yes
DEFAULT:
RESERVES: Replacement: $48,354 monthly
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
/////////////////////// UNDERLYING PROPERTY INFORMATION //////////////////////
--------------------------------------------------------------------------------
SINGLE ASSET/PORTFOLIO: Portfolio
PROPERTY TYPE: Multifamily
LOCATION: New Jersey
YEAR BUILT / RENOVATED: Various
THE COLLATERAL: 5 multifamily properties located in Union, Hamilton
Township, Aberdeen, Somerset, and Lakewood New Jersey.
The portfolio consists of 1,968 multifamily units and
a 29,956 square foot retail center.
PROPERTY MANAGEMENT: Jersey Central Management, LLC
CURRENT OCCUPANCY 97%
(MARCH 2000):
UNDERWRITTEN NET
CASH FLOW: $9,645,598
APPRAISED VALUE: $112,475,000
APPRAISAL DATES: February and March 2000
CUT-OFF DATE LOAN/UNITS: $45,497.97
CROSS COLLATERALIZED
CUT-OFF DATE LTV: 79.61%
BALLOON LTV: 72.54%
CROSS COLLATERALIZED
UWNCF DSCR: 1.21x
--------------------------------------------------------------------------------
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 Goldman, Sachs & Co. and Deutsche Bank
Securities, Inc. and not by the issuer of the securities. Goldman, Sachs & Co.
and Deutsche Bank Securities, Inc. 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.
<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
TECHNOLOGY STATION
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
/////////////////////// LOAN/PARTICIPATION INFORMATION ///////////////////////
--------------------------------------------------------------------------------
ORIGINAL CUT-OFF DATE
-------- ------------
PRINCIPAL BALANCE
LOAN: $37,200,000 $36,811,929
% OF POOL BY UPB: 4.76%
ORIGINATOR: German American Capital Corporation
NOTE DATE: March 26, 1999
INTEREST RATE: 7.605%
AMORTIZATION: 30 years
ARD DATE: April 1, 2009
BORROWER/SPONSOR: The Borrower is a single purpose, bankruptcy remote
entity.
CALL PROTECTION: Prepayment lockout; Greater of Yield Maintenance or 1%
of the then unpaid principal balance.
CROSS-COLLATERALIZATION/ NAP/NAP
DEFAULT:
ADDITIONAL FINANCING: None
CASH MANAGEMENT: Hard Lockbox
RESERVES: TI/LC: $105,900 upfront; $20,000 monthly
Replacement: $2,760 monthly
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
//////////////////////////// PROPERTY INFORMATION ////////////////////////////
--------------------------------------------------------------------------------
SINGLE ASSET/PORTFOLIO: Single Asset
PROPERTY TYPE: Office
LOCATION: Santa Clara, California
YEAR BUILT / RENOVATED: 1998 - 1999 / NAP
THE COLLATERAL: A 221,378 square foot property consisting of 4
two-story R&D/office buildings and 2 one-story retail
buildings.
PROPERTY MANAGEMENT: Hunter Properties, Inc.; an affiliate of the borrower.
CURRENT OCCUPANCY
(05/01/00): 100%
UNDERWRITTEN NET
CASH FLOW: $4,198,865
APPRAISED VALUE: $64,000,000
APPRAISAL DATE: June 5, 2000
CUT-OFF DATE LOAN/SF: $166.29
CUT-OFF DATE LTV: 57.52%
BALLOON LTV: 51.50%
UWNCF DSCR: 1.33x
--------------------------------------------------------------------------------
FIVE LARGEST TENANTS
--------------------
--------------------------------------------------------------------------------
SQUARE PERCENTAGE OF DATE OF
TENANT FOOTAGE LEASED TOTAL LEASEABLE AREA LEASE EXPIRATION
--------------------------------------------------------------------------------
Magellan 82,153 37.11% 1/12/2009 (a)
--------------------------------------------------------------------------------
ABB Power T&D 75,000 33.88% 1/12/2008
--------------------------------------------------------------------------------
North American Title 13,732 6.20% 1/14/2009
--------------------------------------------------------------------------------
Frequency Technology, Inc 13,030 5.89% 3/18/2004
--------------------------------------------------------------------------------
CPS 11,471 5.18% 11/12/2008
--------------------------------------------------------------------------------
(a) Magellan operates under two separate leases of which 55,485 sq. ft. expires
in January 2009, the remaining 26,668 expires in February 2009.
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 Goldman, Sachs & Co. and Deutsche Bank
Securities, Inc. and not by the issuer of the securities. Goldman, Sachs & Co.
and Deutsche Bank Securities, Inc. 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.
<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
BURBANK MULTIFAMILY PORTFOLIO
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
////////////////////////////// LOAN INFORMATION //////////////////////////////
--------------------------------------------------------------------------------
ORIGINAL CUT-OFF DATE
-------- ------------
PRINCIPAL BALANCE: $29,650,000 $29,617,195
% OF POOL BY UPB 3.83%
ORIGINATOR: Archon Financial, L.P.
NOTE DATE: May 15, 2000
INTEREST RATE: 8.06%
AMORTIZATION: 30 years
MATURITY DATE: June 1, 2010
BORROWER/SPONSOR: The Borrower is a single purpose, bankruptcy remote
entity.
CALL PROTECTION: Prepayment lockout; U.S. Treasury defeasance.
CROSS-COLLATERALIZATION/ NAP/NAP
DEFAULT:
ADDITIONAL FINANCING: None
CASH MANAGEMENT: None
RESERVES Replacement: $5,650 monthly
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
//////////////////////////// PROPERTY INFORMATION ////////////////////////////
--------------------------------------------------------------------------------
SINGLE ASSET/PORTFOLIO: Portfolio
PROPERTY TYPE: Multifamily
LOCATION: Burbank, California
YEAR BUILT / RENOVATED: 1988 - 1990 / NAP
THE COLLATERAL: Two multifamily complexes. Parc Pointe Apartments is a
243-unit garden style apartment complex consisting of
seven, 3-story buildings. The Oaks Apartments is a
96-unit garden style apartment complex consisting of
three 3-story apartment buildings.
PROPERTY MANAGEMENT: Anchor Pacifica Management Company, an affiliate of
the borrower.
CURRENT OCCUPANCY
(5/9/00): 99%
UNDERWRITTEN NET
CASH FLOW: $3,176,544
APPRAISED VALUE: $40,650,000
APPRAISAL DATE: April 13, 2000
CUT-OFF DATE LOAN/UNITS: $87,366
CUT-OFF DATE LTV: 72.86%
BALLOON LTV: 65.32%
UWNCF DSCR: 1.21x
--------------------------------------------------------------------------------
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 Goldman, Sachs & Co. and Deutsche Bank
Securities, Inc. and not by the issuer of the securities. Goldman, Sachs & Co.
and Deutsche Bank Securities, Inc. 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.
<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
RIALTO BUILDING
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
////////////////////////////// LOAN INFORMATION //////////////////////////////
--------------------------------------------------------------------------------
ORIGINAL CUT-OFF DATE
-------- ------------
PRINCIPAL BALANCE: $27,250,000 $27,222,688
% OF POOL BY UPB 3.52%
ORGINATOR: GMACCM
NOTE DATE: May 31, 2000
INTEREST RATE: 8.42%
AMORTIZATION: 30 Years
MATURITY DATE: June 5, 2010
BORROWER/SPONSOR: The Borrower is a single purpose, bankruptcy remote
entity.
CALL PROTECTION: Prepayment lockout; U.S. Treasury defeasance.
CROSS-COLLATERALIZATION/ NAP/NAP
DEFAULT:
ADDITIONAL FINANCING: There is a $770,000 fully funded earnout feature
pertaining to a lease where the tenant has yet to take
occupancy. The Borrower has until April 1, 2001 to
meet the conditions of the earnout or the funds will
be used to pay down the loan.
CASH MANAGEMENT: Soft lockbox
RESERVES: Debt Service: $337,500 upfront TI/LC: $283,275 upfront
($22,297 monthly reserves if occupancy drops below 85%
for a trailing 6-month period) Replacement: $1,753
monthly
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
//////////////////////////// PROPERTY INFORMATION ////////////////////////////
--------------------------------------------------------------------------------
SINGLE ASSET/PORTFOLIO: Single Asset
PROPERTY TYPE: Office
LOCATION: San Francisco, CA
YEAR BUILT / RENOVATED: 1901 / On-going
THE COLLATERAL: A 9-story, 140,206 square foot office building located
in the South of Market Area in San Francisco, CA.
PROPERTY MANAGEMENT: Redding Management, Inc., an affiliate of the
borrower.
OCCUPANCY (5/17/00): 92%
UNDERWRITTEN NET
CASH FLOW: $3,105,838
APPRAISED VALUE: $38,000,000
APPRAISAL DATE: April 26, 2000
CUT-OFF DATE LOAN/UNITS: $194.16
CUT-OFF DATE LTV: 69.61%
BALLOON LTV: 64.76%
UWNCF DSCR: 1.28x
--------------------------------------------------------------------------------
FIVE LARGEST TENANTS
--------------------
--------------------------------------------------------------------------------
SQUARE PERCENTAGE OF DATE OF
TENANT FOOTAGE LEASED TOTAL LEASEABLE AREA LEASE EXPIRATION
--------------------------------------------------------------------------------
Trust for Public Land 39,312 28.04% 7/31/2010
--------------------------------------------------------------------------------
Double Click, Inc. 18,885 13.47% 4/30/2001
--------------------------------------------------------------------------------
Walgreen's (a) 12,000 8.56% 6/30/2030
--------------------------------------------------------------------------------
SFMOMA 7,153 5.10% 7/31/2004
--------------------------------------------------------------------------------
M & R Valuation Service 4,227 3.01% 2/28/2003
--------------------------------------------------------------------------------
(a) Walgreen's is rated A+ by S&P and Aa3 by Moody's.
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 Goldman, Sachs & Co. and Deutsche Bank
Securities, Inc. and not by the issuer of the securities. Goldman, Sachs & Co.
and Deutsche Bank Securities, Inc. 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.
<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
CENTEREACH MALL
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
////////////////////////////// LOAN INFORMATION //////////////////////////////
--------------------------------------------------------------------------------
ORIGINAL CUT-OFF DATE
-------- ------------
PRINCIPAL BALANCE: $23,300,000 $23,197,884
% OF POOL BY UPB 3.00%
ORGINATOR: German American Capital Corporation
NOTE DATE: November 30, 1999
INTEREST RATE: 8.17%
AMORTIZATION: 30 Years
MATURITY DATE: December 1, 2009
BORROWER/SPONSOR: The Borrower is a single purpose,
bankruptcy remote entity sponsored by
Kimco Realty Corporation (NYSE: KIM).
CALL PROTECTION: Prepayment lockout; U.S. Treasury
defeasance.
CROSS-COLLATERALIZATION/ NAP/NAP
DEFAULT:
ADDITIONAL FINANCING: None.
CASH MANAGEMENT: None
RESERVES: Replacement: $1,829 monthly
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
//////////////////////////// PROPERTY INFORMATION ////////////////////////////
--------------------------------------------------------------------------------
SINGLE ASSET/PORTFOLIO: Single Asset
PROPERTY TYPE: Anchored Retail
LOCATION: Centereach, NY
YEAR BUILT / RENOVATED: 1973/1995
THE COLLATERAL: A 371,028 square foot regional power center anchored
by Wal-Mart. Tenants include Modell's Sporting Goods,
and CVS Pharmacy.
PROPERTY MANAGEMENT: Kimco Realty Corporation, an affiliate of the Borrower
(S&P: A- / Moody's: A3).
CURRENT OCCUPANCY
(5/4/00): 89%
UNDERWRITTEN NET
CASH FLOW: $2,699,187
APPRAISED VALUE: $32,500,000
APPRAISAL DATE: August 9, 1999
CUT-OFF DATE LOAN/UNITS: $62.52
CUT-OFF DATE LTV: 71.38%
BALLOON LTV: 64.39%
UWNCF DSCR: 1.29x
--------------------------------------------------------------------------------
FIVE LARGEST TENANTS (a)
------------------------
--------------------------------------------------------------------------------
SQUARE PERCENTAGE OF DATE OF
TENANT FOOTAGE LEASED TOTAL LEASEABLE AREA LEASE EXPIRATION
--------------------------------------------------------------------------------
Wal-Mart (b) 151,067 40.72% 8/18/2015
--------------------------------------------------------------------------------
Modell's 18,050 4.86% 8/31/2009
--------------------------------------------------------------------------------
Party City 14,885 4.01% 7/31/2007
--------------------------------------------------------------------------------
CVS Pharmacy (c) 14,400 3.88% 3/31/2004
--------------------------------------------------------------------------------
Jo-Ann Stores 14,300 3.85% 1/31/2010
--------------------------------------------------------------------------------
(a) This table excludes one tenant, King Kullen, which leases, but no longer
occupies, 33,600 sq ft of space with an expiration date of 12/31/2003.
(b) Wal-Mart is rated AA by S&P and Aa2 by Moody's.
(c) CVS Pharmacy is rated A by S&P and A3 by Moody's.
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 Goldman, Sachs & Co. and Deutsche Bank
Securities, Inc. and not by the issuer of the securities. Goldman, Sachs & Co.
and Deutsche Bank Securities, Inc. 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.
<PAGE>
ANNEX D
GLOBAL CLEARANCE, SETTLEMENT
AND TAX DOCUMENTATION PROCEDURES
Except in limited circumstances, the globally offered GMAC Commercial
Mortgage Securities, Inc. Mortgage Pass-Through Certificates, Series 2000-C2
(the "global securities") will be available only in book-entry form. Investors
in the global securities may hold those global securities through any of DTC,
Clearstream or Euroclear. The global securities will be tradable 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 Clearstream 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 Clearstream or Euroclear and DTC
participants holding certificates will be effected on a
delivery-against-payment basis through the respective depositaries of
Clearstream and Euroclear (in that capacity) and as DTC participants.
Non-U.S. holders (as described below) of global securities will be subject
to U.S. withholding taxes unless those 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, Clearstream and Euroclear
will hold positions on behalf of their participants through their respective
depositaries, which in turn will hold those 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 Clearstream 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.
D-1
<PAGE>
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 Clearstream or Euroclear Participants. Secondary market
trading between Clearstream participants or Euroclear participants will be
settled using the procedures applicable to conventional eurobonds in same-day
funds.
Trading between DTC seller and Clearstream or Euroclear purchaser. When
global securities are to be transferred from the account of a DTC participant
to the account of a Clearstream participant or a Euroclear participant, the
purchaser will send instructions to Clearstream or Euroclear through a
Clearstream participant or Euroclear participant at least one business day
before settlement. Clearstream 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 Clearstream 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 Clearstream or Euroclear cash
debit will be valued instead as of the actual settlement date.
Clearstream 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 Clearstream or Euroclear. Under
this approach, they may take on credit exposure to Clearstream or Euroclear
until the global securities are credited to their accounts one day later.
As an alternative, if Clearstream or Euroclear has extended a line of
credit to them, Clearstream 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, Clearstream 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 the overdraft charges, although this result will
depend on each Clearstream 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 Clearstream 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.
D-2
<PAGE>
Trading between Clearstream or Euroclear seller and DTC purchaser. Due to
time zone differences in their favor, Clearstream 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 Clearstream or Euroclear through a Clearstream participant or
Euroclear participant at least one business day before settlement. In these
cases, Clearstream 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 Clearstream
participant or Euroclear participant the following day, and receipt of the cash
proceeds in the Clearstream 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 Clearstream 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 Clearstream
participant's or Euroclear participant's account would instead be valued as of
the actual settlement date. Finally, day traders that use Clearstream or
Euroclear and that purchase global securities from DTC participants for
delivery to Clearstream 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:
(a) borrowing through Clearstream or Euroclear for one day (until the
purchase side of the day trade is reflected in their Clearstream 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 Clearstream 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 Clearstream participant or
Euroclear participant.
U.S. FEDERAL INCOME TAX DOCUMENTATION REQUIREMENTS
A beneficial owner of global securities holding securities through
Clearstream 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 that
beneficial owner and the U.S. entity required to withhold tax complies with
applicable certification requirements and (2) that 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
D-3
<PAGE>
filing a signed Form W-8 (Certificate of Foreign Status) or substitute form. If
the information shown on Form W-8 changes, a new Form W-8 must be filed within
30 days of that 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) or substitute form.
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) or substitute form. 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 (1) a citizen or resident of the United
States, (2) a corporation or partnership organized in or under the laws of the
United States or any political subdivision thereof or (3) an estate the income
of which is includable in gross income for United States tax purposes,
regardless of its source or a trust if a court within the United States is able
to exercise primary supervision of the administration of the trust and one or
more United States fiduciaries have the authority to control all substantial
decisions of the trust. This summary does not deal with all aspects of U.S.
federal income tax withholding that may be relevant to foreign holders of the
global securities. Investors are advised to consult their own tax advisors for
specific tax advice concerning their holding and disposing of the global
securities.
D-4
<PAGE>
PROSPECTUS
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
Depositor
MORTGAGE PASS-THROUGH CERTIFICATES
THE DEPOSITOR MAY FROM TIME TO TIME ESTABLISH A TRUST AND ISSUE A SERIES OF
CERTIFICATES REPRESENTING INTERESTS IN THAT TRUST.
THE CERTIFICATES IN A SERIES:
o will be paid only from the assets of the trust created for that series; and
o may be divided into multiple classes of certificates having different rights
as to payments, security and priority.
THE ASSETS UNDERLYING THE CERTIFICATES IN A SERIES WILL INCLUDE:
o multifamily or commercial mortgage loans; or
o securities that evidence interests in or are secured by multifamily or
commercial mortgage loans; or
o a combination of mortgage loans and mortgage-backed securities.
YOU SHOULD CONSIDER CAREFULLY THE RISK FACTORS BEGINNING ON PAGE 6 IN THIS
PROSPECTUS.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED THESE CERTIFICATES OR DETERMINED THAT THIS PROSPECTUS
IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
This prospectus may be used to offer and sell a series of certificates only if
accompanied by the prospectus supplement for that series.
THE DATE OF THIS PROSPECTUS IS JULY 31, 2000
<PAGE>
IMPORTANT NOTICE ABOUT INFORMATION PRESENTED IN THIS
PROSPECTUS AND THE ACCOMPANYING PROSPECTUS SUPPLEMENT
We provide information to you about the certificates in two separate
documents that progressively provide more detail:
o this prospectus, which provides general information, some of which may not
apply to your series of certificates; and
o the accompanying prospectus supplement, which describes the specific terms
of your series of certificates, including:
o the timing of interest and principal payments;
o financial and other information about the mortgage loans;
o any credit enhancement for each class;
o the ratings for each class; and
o the method for selling the certificates.
THE PROSPECTUS AND THE PROSPECTUS SUPPLEMENT, TOGETHER, PROVIDE A
DESCRIPTION OF THE MATERIAL TERMS OF YOUR CERTIFICATES. YOU SHOULD RELY ON THE
INFORMATION IN THE PROSPECTUS SUPPLEMENT TO THE EXTENT IT PROVIDES A MORE
SPECIFIC DESCRIPTION OF YOUR CERTIFICATES.
You should rely only on the information provided in this prospectus and
the accompanying prospectus supplement, including the information incorporated
by reference. You can request information incorporated by reference from GMAC
Commercial Mortgage Securities, Inc. at (215) 328-4622 or 200 Witmer Road,
Horsham, Pennsylvania 19044-8015. See "Where You Can Find Additional
Information" and "Incorporation of Information by Reference" in this
prospectus. We have not authorized anyone to provide you with different
information. We are not offering the certificates in any state where the offer
is not permitted.
We include cross-references in this prospectus and the accompanying
prospectus supplement 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 supplement provide the pages on which
these captions are located.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
PROSPECTUS SUMMARY ...................... 3
The Mortgage Asset Pools and
Other Assets of the Trusts ....... 3
The Mortgage Loan Sellers ........... 3
The Master Servicer, the Special
Servicer and the
Administration of the Trusts ..... 3
The Certificates .................... 4
Distributions to the
Certificateholders ............... 4
Interest ............................ 4
Principal ........................... 5
Credit Support and Cash Flow
Agreements ....................... 5
Ratings ............................. 5
RISK FACTORS ............................ 6
It may not be possible to find an
investor to purchase your
certificates ..................... 6
The certificates will only be paid
from trust assets ................ 6
The certificates are not
guaranteed ....................... 6
Investment in commercial and
multifamily mortgage loans is
riskier than investment in
single-family mortgage loans ..... 6
Modifications to mortgage loans
or extensions of the maturity
date agreed to by the servicer
may not ultimately increase the
present value of proceeds to
certificateholders ............... 8
Credit support is limited ........... 8
Each class of certificates will
have different yield and
prepayment considerations ........ 9
Assignments of leases and rents
may affect payments to
certificateholders ............... 11
Environmental conditions may
subject the mortgaged property
to liens or impose costs on the
property owner ................... 11
DESCRIPTION OF THE TRUST ................ 12
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
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Mortgage Loans ...................... 12
Default and Loss Considerations
for the Mortgage Loans .............. 13
Payment Provisions of the
Mortgage Loans ................... 14
Mortgage Loan Information in
prospectus supplements .............. 15
MBS ................................. 16
Certificate Accounts ................ 17
Cash Flow Agreements ................ 17
YIELD AND MATURITY
CONSIDERATIONS ......................... 18
Pass-Through Rate ................... 18
Purchase Price Consideration ........ 18
Payment Delays ...................... 19
Shortfalls in Collections of
Interest ......................... 19
The Effects of Prepayments on
Yield ............................ 19
Weighted Average Life and
Maturity ......................... 21
Other Factors Affecting Yield,
Weighted Average Life and
Maturity ......................... 23
THE DEPOSITOR ........................... 25
GMAC COMMERCIAL
MORTGAGE CORPORATION 26
DESCRIPTION OF THE
CERTIFICATES ........................... 26
Distributions ....................... 27
Distributions of Interest on the
Certificates ....................... 27
Distributions of Principal of the
Certificates ....................... 29
Allocation of Losses and
Shortfalls ....................... 30
Advances in Respect of
Delinquencies .................... 30
Reports to Certificateholders ....... 31
Termination; Retirement of
Certificates ..................... 33
Book-Entry Registration and
Definitive Certificates .......... 33
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THE POOLING AND
SERVICING AGREEMENTS ..................... 36
Assignment of Mortgage Loans;
Repurchases .......................... 36
Representations and Warranties;
Repurchases .......................... 38
Collection and other Servicing
Procedures ........................... 39
Sub-Servicers ......................... 42
Special Servicers ..................... 42
Certificate Account ................... 43
Realization Upon Defaulted
Mortgage Loans ..................... 46
Hazard Insurance Policies ............. 48
Due-on-Sale and
Due-on-Encumbrance
Provisions ......................... 49
Servicing Compensation and
Payment of Expenses ................ 49
Evidence as to Compliance ............. 50
Matters Regarding the Master
Servicer and the Depositor ......... 51
Events of Default ..................... 52
Rights Upon Event of Default .......... 53
Amendment ............................. 54
The Trustee ........................... 55
Duties of the Trustee ................. 55
Matters Regarding the Trustee ......... 56
Resignation and Removal of the
Trustee ............................ 56
DESCRIPTION OF CREDIT
SUPPORT .................................. 57
Subordinate Certificates .............. 57
Insurance or Guarantees for
Mortgage Loans ..................... 58
Letter of Credit ...................... 58
Certificate Insurance and Surety
Bonds .............................. 58
Reserve Funds ......................... 59
Credit Support for MBS ................ 59
LEGAL ASPECTS OF
MORTGAGE LOANS ........................... 59
Types of Mortgage Instruments ......... 60
Leases and Rents ...................... 60
Personalty ............................ 61
Foreclosure ........................... 61
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Bankruptcy Laws ....................... 65
Environmental Considerations .......... 67
Due-on-Sale and
Due-on-Encumbrance ................. 69
Subordinate Financing ................. 69
Default Interest and Limitations
on Prepayments ..................... 70
Applicability of Usury Laws ........... 70
Soldiers' and Sailors' Civil Relief
Act of 1940 ........................ 70
FEDERAL INCOME TAX
CONSEQUENCES ............................. 72
REMICs ................................ 73
Grantor Trusts ........................ 92
STATE AND OTHER TAX
CONSEQUENCES ............................. 102
ERISA CONSIDERATIONS ...................... 102
Plan Asset Regulations ................ 103
Prohibited Transaction
Exemption .......................... 103
Representation from Investing
Plans .............................. 107
Tax Exempt Investors .................. 107
LEGAL INVESTMENT .......................... 108
USE OF PROCEEDS ........................... 110
METHOD OF DISTRIBUTION .................... 110
LEGAL MATTERS ............................. 111
FINANCIAL INFORMATION ..................... 111
WHERE YOU CAN FIND
ADDITIONAL
INFORMATION .............................. 112
REPORTS TO
CERTIFICATEHOLDERS ....................... 112
INCORPORATION OF
INFORMATION BY
REFERENCE ................................ 112
RATING .................................... 113
GLOSSARY .................................. 114
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PROSPECTUS SUMMARY
This summary highlights selected information from this document. To understand
all of the terms of the offering of the certificates, you should carefully read
this entire document and the accompanying prospectus supplement.
THE MORTGAGE ASSET POOLS AND
OTHER ASSETS OF THE TRUSTS
The depositor will from time to time deposit a pool of mortgage assets and
related property and interests into a trust.
The mortgage assets for each series of certificates may consist of mortgage
loans with various payment provisions and related rights and limitations. See
"Description of the Trust--Payment Provisions of the Mortgage Loans" in this
prospectus.
The mortgage assets for each series of certificates also may include or consist
of mortgage-backed securities. These mortgage-backed securities will represent
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 in this prospectus. See
"Description of the Trust--MBS" in this prospectus.
The mortgage loans will be secured by first or junior liens on multifamily
residential properties or commercial properties. The mortgage loans may be
secured by liens on real estate projects under construction. See "Description
of the Mortgage Pool" in your prospectus supplement for a description of the
mortgage asset pool applicable to your series of certificates.
THE MORTGAGE LOAN SELLERS
The depositor will purchase the mortgage loans for each series of certificates
from the mortgage asset seller or sellers specified in your prospectus
supplement. Some or all of the mortgage loans in any trust may have been
originated by GMAC Commercial Mortgage Corporation, another affiliate of the
depositor or the depositor. See "Description of the Trust--Mortgage Loans" in
this prospectus.
THE MASTER SERVICER, THE SPECIAL SERVICER
AND THE ADMINISTRATION OF THE TRUSTS
If a trust includes mortgage loans, then your prospectus supplement will name
the servicer or the master servicer for that trust. The master servicer for any
series of certificates may be GMAC Commercial Mortgage Corporation or another
affiliate of the depositor. If a trust includes mortgage loans, then your
prospectus supplement will also name any special servicer for that trust or
will describe the circumstances under which a special servicer may be appointed
or replaced.
The master servicer may also be the special servicer for that series and, in
that dual capacity, would be referred to as the servicer. A special servicer
for any series may be an affiliate of the depositor, the master servicer or an
underwriter. See "GMAC Commercial Mortgage Corporation" and "The Pooling and
Servicing Agreements-- Matters Regarding the Master Servicer and the Depositor"
in this prospectus.
If a trust includes mortgage-backed securities, then your prospectus supplement
will name the entity responsible for administering those mortgage-backed
securities. If an entity
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other than the trustee or the master servicer is the mortgage-backed securities
administrator, that entity will be referred to as the manager in this
prospectus. The manager for any series of certificates may be an affiliate of
either the depositor or the master servicer. See your prospectus supplement for
a description of the servicing and administration of the mortgage-backed
certificates and the trust related to your certificates.
THE CERTIFICATES
Each trust will issue a series of certificates. A series of certificates may
consist of a single class of certificates entitled to all of the principal and
interest up to a specified rate on the mortgage assets in the related trust.
Alternatively, a series of certificates may consist of multiple classes. If the
series of certificates has multiple classes, the prospectus supplement for that
series will set forth for each class of certificates:
o the initial principal balance if that class receives principal;
o the initial interest rate if that class receives interest;
o whether that class is subordinated;
o whether each class will receive distributions from all or a portion of
the mortgage loans; and
o any other characteristics of that class and any limitations on the
payments to be made to each class of certificates. See "Description of
the Certificates" in this prospectus.
DISTRIBUTIONS TO THE CERTIFICATEHOLDERS
Principal and interest will be paid on a distribution date which may occur
monthly or on other scheduled dates over the life of the certificates. The
distribution date or dates for each will be described in the related prospectus
supplement.
INTEREST
Each certificate of a series will be entitled to receive payments of interest
to the extent described in the accompanying prospectus supplement. If a series
of certificates consists of more than one class, each class may differ in,
among other things:
o priority in receiving interest payments;
o payment dates;
o interest rates; or
o methods for computing interest.
Each class of certificates may have a fixed or variable interest rate. Some
classes may not be entitled to receive any distributions of interest. Some
classes may not be entitled to distributions of interest until after the
occurrence of specific events, such as the retirement of one or more other
classes of certificates. The interest that is accrued on these certificates
will either be added to their certificate balance or otherwise deferred as
described in your prospectus supplement. Distributions of interest on some
classes may be reduced to the extent of delinquencies, losses or other
contingencies described in this prospectus and in your prospectus supplement.
See "Risk Factors--Each class of certificates will have different yield and
prepayment considerations," "Yield and Maturity Considerations-- Shortfalls in
Collections of Interest" and "Description of the Certificates-- Distributions
of Interest on the Certificates" in this prospectus.
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<PAGE>
PRINCIPAL
Each certificate of a series will be entitled to receive payments of principal
as described in your prospectus supplement. If a series of certificates
consists of more than one class, each class may differ in, among other things:
o its priority of principal payments;
o periods during which certificateholders receive principal payments;
o the amount of scheduled principal it is entitled to receive on each
payment date; or
o the amount of prepayments it is entitled to receive on each payment
date.
NOT ALL CERTIFICATES WILL RECEIVE PRINCIPAL ON EACH DISTRIBUTION DATE AND SOME
CLASSES MAY NOT BE ENTITLED TO RECEIVE ANY DISTRIBUTIONS OF PRINCIPAL.
CREDIT SUPPORT AND CASH FLOW
AGREEMENTS
One or more classes of certificates in a series may be protected in part by
some form of credit support.
The accompanying prospectus supplement will provide the following information:
o whether credit support covers any classes of certificates;
o the type, amount and extent of coverage;
o the identity of any entity providing the coverage; and
o the terms of any subordination.
Any credit enhancement will be limited and certificateholders will bear any
losses allocated after the credit enhancement coverage for a particular class
is depleted. See "Risk Factors-- Credit support is limited," "Description of
Credit Support" and "Description of the Trust--Cash Flow Agreements" in this
prospectus.
RATINGS
At issuance, each class of offered certificates will be rated not lower than
investment grade by one or more nationally recognized statistical rating
agencies. See "Rating" in this prospectus and in your prospectus supplement.
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<PAGE>
RISK FACTORS
You should consider the following risk factors in addition to the risk
factors in the prospectus supplement in deciding whether to purchase any of the
certificates.
IT MAY NOT BE POSSIBLE TO The underwriters may assist in resales of
FIND AN INVESTOR TO PURCHASE certificates, but they are not required to
YOUR CERTIFICATES do so. A secondary market for your
certificates may not develop. If a secondary
market does develop, it might not continue
or it might not be sufficiently liquid to
allow you to resell any of your
certificates. Illiquidity also could have an
adverse effect on the market value of your
certificates. The related prospectus
supplement will state whether the
certificates will be listed on any
securities exchange.
THE CERTIFICATES WILL ONLY The certificates will represent interests
BE PAID FROM TRUST ASSETS only in the trust established for that
series. The certificates will not represent
an obligation of the depositor, GMAC
Commercial Mortgage Corporation or any of
their affiliates. Payments on the mortgage
assets included in the trust and any credit
support will be the only source of payments
to you. If those amounts are insufficient to
make required payments of interest or
principal or both to you, there is no other
source of payments. As a result, payments to
you may be reduced or delayed and you may
experience losses on your certificates.
THE CERTIFICATES ARE NOT Unless so specified in your prospectus
GUARANTEED supplement, no governmental agency or any
other person guarantees or insures payments
on the certificates of a particular series
or any of the underlying mortgage assets.
The depositor, the mortgage loan seller(s),
the master servicer and the special servicer
will have limited obligations and will not
be obligated to make payments on the
certificates. See "The certificates will
only be paid from trust assets" above.
INVESTMENT IN COMMERCIAL Each trust generally will consist of a
AND MULTIFAMILY MORTGAGE smaller number of higher balance loans than
LOANS IS RISKIER THAN would a pool of single-family loans of
INVESTMENT IN SINGLE-FAMILY comparable aggregate unpaid principal
MORTGAGE LOANS balance. Accordingly, the concentration of
default, foreclosure and loss risks in
individual mortgage loans in a particular
trust generally will be greater than for
pools of single-family loans. A description
of material
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<PAGE>
considerations associated with investments
in mortgage loans is included in this
prospectus under "Legal Aspects of Mortgage
Loans." See also "Description of the
Trust--Default and Loss Considerations for
the Mortgage Loans" in this prospectus.
In contrast to single-family loans, the
ability of a borrower to repay a loan
secured by an income-producing property
typically depends mainly on the operating
income produced by that property, not on the
independent income or assets of the
borrower. If the net operating income of the
property is reduced, the borrower's ability
to repay the loan may be impaired and losses
may be realized on the mortgage loans. As a
result, 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, delinquency and foreclosure than loans
made on the security of owner-occupied
single-family residential property.
Your investment in the certificates will
subject you to the risks of owning an
interest in commercial and multifamily real
estate. Your investment in the mortgage
assets may be adversely affected by factors
that affect the value of interests in real
property and of loans secured by those
interests including:
o changes in general or local economic
conditions or specific industry segments;
o declines in real estate values;
o declines in rental or occupancy rates;
o increases in interest rates, real estate
tax rates and other operating expenses;
o changes in governmental rules, regulations
and fiscal policies, including
environmental legislation; and
o natural disasters and civil disturbances
such as earthquakes, hurricanes, floods,
eruptions or riots.
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<PAGE>
Factors that adversely affect the mortgage
assets for a particular series may cause the
rates of delinquencies, foreclosures and
losses on those mortgage assets to be higher
than would otherwise be the case. To the
extent your certificates are not covered by
credit support, you will bear all of the
risks resulting from defaults by borrowers.
MODIFICATIONS TO MORTGAGE LOANS To maximize recoveries on defaulted mortgage
OR EXTENSIONS OF THE MATURITY loans, the master servicer or a special
DATE AGREED TO BY THE SERVICER servicer may, under certain limited
MAY NOT ULTIMATELY INCREASE THE circumstances, extend the maturity date of
PRESENT VALUE OF PROCEEDS TO and otherwise modify mortgage loans that are
CERTIFICATEHOLDERS in default or as to which a payment default
is reasonably foreseeable. See "The Pooling
and Servicing Agreements--Realization Upon
Defaulted Mortgage Loans" in this
prospectus. There is no guarantee, however,
that an extension or modification will in
fact increase the present value of receipts
from, or proceeds of, the affected mortgage
loans.
See "Description of the Mortgage Pool" in
the accompanying prospectus supplement for a
description of these or other types of
special risk loans in the mortgage asset
pool applicable to your certificates.
CREDIT SUPPORT IS LIMITED The prospectus supplement for your series of
certificates may specify that credit support
will provide protection against losses on
the underlying mortgage assets up to
specified amounts and for the benefit of
specified classes of certificates. If any
losses are incurred on the mortgage loans
that are not covered by the credit
enhancement for your class of certificates,
you will bear the risk of these losses. See
"Credit Support" in your prospectus
supplement for a description of any forms of
credit support that apply to your
certificates.
Although credit support is intended to
reduce the likelihood of temporary
shortfalls on the certificates, you should
be aware that:
o The amount of coverage usually is limited.
o The amount of coverage usually will be
reduced over time according to a schedule
or formula.
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<PAGE>
o Credit support may not cover all potential
losses on the mortgage loans. For example,
credit support may not cover loss by
reason of fraud or negligence by a
mortgage loan originator or other parties.
o Credit support may provide coverage only
to some certificates and not other
certificates of the same series. If
principal payments on one or more classes
are made in a specified order of priority,
any related credit support may be
exhausted before the principal of the
later paid classes has been repaid in
full. As a result, losses and shortfalls
experienced on the mortgage assets may
have a greater impact upon those classes
having a later right of payment.
o If the applicable rating agencies believe
that the rating on the certificates will
not be adversely affected, credit support
may be reduced or terminated without the
consent of certificateholders.
o The loss experience on the related
mortgage assets underlying your
certificates may exceed the levels of
losses covered by the amount of credit
support for your certificates. If this
happens, you will bear the losses on the
mortgage assets in excess of available
credit support for your class. See
"Description of the Certificates--
Allocation of Losses and Shortfalls" and
"Description of Credit Support" in this
prospectus.
EACH CLASS OF CERTIFICATES The price you paid for your certificates and
WILL HAVE DIFFERENT YIELD AND the rate of principal payments on the
PREPAYMENT CONSIDERATIONS mortgage assets in the applicable trust will
affect the yield to maturity of your
certificates. The rate of principal payments
depends on scheduled payments of interest
and principal, the rate of prepayments,
liquidations due to defaults and
repurchases. If the rate of prepayments on
the mortgage assets related to your
certificates is higher or lower than you
anticipated, the yield to maturity on your
certificates may be adversely affected. The
yield on some types of certificates is more
sensitive to variations in prepayments than
others. For
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<PAGE>
example, certificates that receive only
payments of interest are especially
sensitive to variations in the rate of
prepayments. If the rate of prepayments is
high, or if a redemption or call feature of
the certificates or the underlying mortgage
assets occurs, the holders of these
certificates may not fully recover their
initial investment. In addition, the
following types of certificates also may be
particularly sensitive to the rate of
prepayment on the related mortgage assets:
o classes that receive distributions of
interest or principal commencing only
after the occurrence of specific events;
o classes that are only entitled to receive
distributions of interest accrued on a
notional principal balance;
o classes that are entitled to receive
disproportionately small or no interest
distributions;
o certificates with a pass-through rate that
fluctuates inversely with an index; or
o classes of a series that includes multiple
classes of certificates.
The rate of principal payments on groups of
mortgage loans varies within and among
pools. Principal payments are influenced by
economic, demographic, geographic, social,
tax, legal and other factors, including
prevailing mortgage market interest rates
and the particular terms of the mortgage
loans, such as provisions that prohibit
voluntary prepayments during specified
periods or impose penalties on voluntary
prepayments. There is no guarantee as to the
actual rate of prepayment on the mortgage
assets in any trust, or that the rate of
prepayment will conform to any model
described in this prospectus or in any
prospectus supplement. See "Yield and
Maturity Considerations" in this prospectus.
See also "Risk Factors" and "Yield and
Maturity Considerations" in your prospectus
supplement for more information concerning
the prepayment risks applicable to your
certificates.
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<PAGE>
ASSIGNMENTS OF LEASES AND RENTS If a mortgaged property is subject to
MAY AFFECT PAYMENTS TO leases, the related mortgage loan typically
CERTIFICATEHOLDERS will be secured by an assignment of leases
and rents. Under this assignment, the
borrower assigns its right under the leases
to the lender and upon default, the lender
is entitled to collect rents.
Some state laws may require the lender to
take possession of the mortgaged property
and obtain a judicial appointment of a
receiver before the lender is entitled to
collect rents. The lender's ability to
collect rents also may be adversely affected
if bankruptcy or similar proceedings are
commenced by or against a borrower. If a
lender is prevented or delayed in collecting
rents, payments on your certificates may be
reduced or delayed. See "Legal Aspects of
Mortgage Loans--Leases and Rents" in this
prospectus.
ENVIRONMENTAL CONDITIONS MAY Real property pledged as security for a
SUBJECT THE MORTGAGED PROPERTY mortgage loan may be subject to
TO LIENS OR IMPOSE COSTS ON THE environmental risks. Under some state laws,
PROPERTY OWNER contamination of real property may give rise
to a lien on the property to assure the
costs of cleanup. In several states, that
lien has priority over an existing mortgage
lien on the property. In addition, under the
laws of some states and under the federal
Comprehensive Environmental Response,
Compensation and Liability Act of 1980, a
lender, either before or after foreclosure
of the mortgage, may be liable, as an
"owner" or "operator," for costs of
addressing releases or threatened releases
of hazardous substances at a property. This
liability may exist if agents or employees
of the lender have become sufficiently
involved in the operations of the borrower.
This liability may exist regardless of
whether the environmental damage or threat
was caused by the borrower or a prior owner.
You can find a Glossary where capitalized terms used in this prospectus
are defined beginning on page 114 in this prospectus.
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DESCRIPTION OF THE TRUST
Each series of certificates will represent in the aggregate the entire
beneficial ownership interest in a trust to be formed by the depositor. The
primary assets of each trust will be mortgage loans or a combination of
mortgage loans and mortgage-backed securities or MBS. Each mortgage asset will
be selected by the depositor for inclusion in a trust from among those
purchased, either directly or indirectly, from a mortgage asset seller. The
mortgage asset seller may or may not be the originator of that mortgage loan or
the issuer of that MBS. The discussion below under the heading "--Mortgage
Loans," unless otherwise noted, applies equally to mortgage loans underlying
any MBS included in a particular trust.
MORTGAGE LOANS
The mortgage loans will be evidenced by promissory notes secured by
mortgages, deeds of trust or similar security instruments that create first or
junior liens on fee or leasehold estates in properties consisting of:
o multifamily properties that are 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, or
o commercial properties that are 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 other types of income-producing properties or
unimproved land.
The multifamily properties may include mixed commercial and residential
structures and apartment buildings owned by private cooperative housing
corporations. Each mortgage will create a 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 the term of any leasehold will exceed the term of
the mortgage note by the period specified in the related prospectus supplement.
The originator of any mortgage loan may be the depositor, GMAC Commercial
Mortgage Corporation, another affiliate of the depositor, an affiliate of the
underwriter or an unrelated party.
Mortgage assets for a series of certificates may include mortgage loans
secured by junior liens. The loans secured by the related 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.
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 the certificates are issued. The
related prospectus supplement will include as to each delinquent or
non-performing mortgage loan,
12
<PAGE>
o available information as to the period of the delinquency or
non-performance;
o any forbearance arrangement then in effect;
o the condition of the related mortgaged property; and
o the ability of the mortgaged property to generate income to service the
mortgage debt.
DEFAULT AND LOSS CONSIDERATIONS FOR THE MORTGAGE LOANS
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 the loan.
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 the interest only period.
The Underwritten Cash Flow of a mortgaged property will fluctuate over
time and may or may not be sufficient to cover debt service on the 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 for 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 or area economy or both. In addition,
properties typically leased, occupied or used on a short-term basis, such as
some 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. As a result, the Underwritten Cash Flow of a commercial property may
depend substantially on the financial condition of the borrower or a tenant,
and mortgage loans secured by liens on those 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 to changes in governmental rules, regulations and
fiscal policies, may also affect the likelihood of default on a mortgage loan.
In some cases leases of mortgaged properties may provide that the lessee,
rather than the borrower/landlord, is responsible for payment of operating
expenses. However, the existence of 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 more specifically described in the related prospectus supplement,
the value of a mortgaged property will be its fair market value determined in
an appraisal
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obtained by the originator at the origination of the loan. The lower the
Loan-to-value Ratio, the greater the borrower's equity in a mortgaged property,
and the greater the incentive of the borrower to perform under the terms of the
related mortgage loan to protect its equity and 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
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 typically based on:
o the market comparison method based on recent resale values of comparable
properties at the date of the appraisal;
o the cost replacement method based on the cost of replacing the property at
that date;
o the income capitalization method based on a projection of value of the
property's projected net cash flow; or
o a selection from or interpolation of the values derived from these 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 also be affected and a liquidation loss may occur.
While the depositor believes that the considerations described above are
important factors in assessing credit risk on loans secured by liens on
income-producing real estate, there can be no assurance that all of these
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 is riskier than investment in single-family mortgage loans."
PAYMENT PROVISIONS OF THE MORTGAGE LOANS
To the extent specified in the related prospectus supplement, all of the
mortgage loans will have had original terms to maturity of not more than 40
years and provide for
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scheduled payments of principal, interest or both, to be made on specified due
dates that occur monthly, quarterly, semi-annually or annually.
A mortgage loan:
o may provide for no accrual of interest or for accrual of interest at a
mortgage rate that is fixed over its term, 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,
o 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 specific events, and may permit negative amortization,
o may be fully amortizing or may be partially amortizing or non-amortizing,
with a balloon payment due on its stated maturity date, and
o may prohibit prepayments over its term or for a specified lock-out period
which ends on a lock-out date or may require payment of a prepayment
premium consisting of a premium or a yield maintenance penalty in
connection with prepayments, or both, in each case as described in the
related prospectus supplement.
A mortgage loan may also contain an equity participation provision that
entitles the lender to a share of appreciation in value of the related
mortgaged property, or profits realized from the operation or disposition of
the mortgaged property or the benefit, if any, resulting from the refinancing
of the mortgage loan.
MORTGAGE LOAN INFORMATION IN PROSPECTUS SUPPLEMENTS
Each prospectus supplement will contain information about the mortgage
loans in the related trust, which may include the following:
o the aggregate outstanding principal balance and the largest, smallest and
average outstanding principal balance of the mortgage loans,
o the type or types of property that provide security for repayment of the
mortgage loans,
o the earliest and latest origination date and maturity date of the mortgage
loans,
o the original and remaining terms to maturity of the mortgage loans, or
ranges of assigned and remaining terms to maturity, and the weighted
average original and remaining terms to maturity of the mortgage loans,
o the Loan-to-value Ratios of the mortgage loans either at origination or as
of a more recent date, or the range of Loan-to-value Ratios, and the
weighted average of the Loan-to-value Ratios,
o the mortgage rates borne by the mortgage loans, or range of mortgage rates,
and the weighted average mortgage rate borne by the mortgage loans,
o for mortgage loans with adjustable mortgage rates or ARM loans, the index or
indices upon which the 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 mortgage loan,
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o information regarding the payment characteristics of the mortgage loans,
such as balloon payment and other amortization provisions, lock-out periods
and prepayment premiums,
o the Debt Service Coverage Ratios of the mortgage loans either at origination
or as of a more recent date, or the range of Debt Service Coverage Ratios,
and the weighted average of the Debt Service Coverage Ratios,
o the geographic distribution of the mortgaged properties on a state-by-state
basis, and
o information describing material 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. Specific information will be provided in a
report which will be available to purchasers of those certificates at or before
their initial issuance and prior to sales of the offered certificates and will
be filed as part of a Current Report on Form 8-K with the SEC within fifteen
days following the issuance.
MBS
MBS may include:
o private-label mortgage participations, mortgage pass-through certificates or
other mortgage-backed securities that are not guaranteed or insured by the
United States or any agency or instrumentality of the United States; or
o certificates insured or guaranteed by the Federal Home Loan Mortgage
Corporation or FHLMC, the Federal National Mortgage Association or the
Governmental National Mortgage Association or the Federal Agricultural
Mortgage Corporation. To the extent described 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 in this prospectus.
Any MBS will have been issued under an MBS agreement consisting of a
participation and servicing agreement, a pooling and servicing agreement, an
indenture or similar agreement. Either or both of the issuer of the MBS and the
servicer of the underlying mortgage loans will have entered into the MBS
agreement, with a 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 in this prospectus.
Distributions on 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 specified 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 for the
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MBS. The type, characteristics and amount of credit support, if any, will be a
function of the characteristics of the underlying mortgage loans and other
factors and usually will have been established on the basis of the requirements
of any nationally recognized statistical 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,
o the aggregate approximate initial and outstanding principal amount and type
of the MBS to be included in the trust,
o the original and remaining term to stated maturity of the MBS, if
applicable,
o the pass-through or bond rate of the MBS or the formula for determining
those rates,
o the payment characteristics of the MBS,
o the MBS issuer, MBS servicer and MBS trustee, as applicable,
o a description of the credit support, if any,
o the circumstances under which the related underlying mortgage loans, or the
MBS themselves, may be purchased before their maturity,
o the terms on which mortgage loans may be substituted for those originally
underlying the MBS,
o the type of mortgage loans underlying the MBS and, to the extent available
to the depositor and appropriate under the circumstances, other information
about the underlying mortgage loans described under "--Mortgage Loan
Information in prospectus supplements," and
o the characteristics of any cash flow agreements that relate to the MBS.
CERTIFICATE ACCOUNTS
Each trust will include one or more certificate accounts established and
maintained on behalf of the certificateholders. All payments and collections
received or advanced or the mortgage assets and other assets in the trust will
be deposited into the certificate account(s) to the extent described in this
prospectus and in the related prospectus supplement. See "The Pooling and
Servicing Agreements--Certificate Account."
CASH FLOW AGREEMENTS
If so provided in the prospectus supplement for a series of certificates,
the related trust will include guaranteed investment contracts under which
moneys held in the funds and accounts established for the series will be
invested at a specified rate. The trust may also include 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 cash flow agreement, including provisions relating to the timing,
manner and amount of payments thereunder and provisions relating to the
termination
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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
The yield on any certificate offered hereby will depend on the price paid
by the holder, the pass-through rate of interest at which the certificate
accrues interest and the amount and timing of distributions on the certificate.
See "Risk Factors--Each class of certificates will have different yield and
prepayment considerations." The following discussion contemplates a trust that
consists solely of mortgage loans. While the characteristics and behavior of
mortgage loans underlying an MBS can be expected to have the same effect on the
yield to maturity and 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 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. The prospectus
supplement for any series of certificates will specify the pass-through rate
for each class of offered certificates of the 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, as well as the effect, if any, of
the prepayment of any mortgage loan on the pass-through rate of one or more
classes of offered certificates.
The prospectus supplement will also indicate 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 any cash flow agreement
consisting of:
o guaranteed investment contracts under which moneys held in the funds and
accounts established for the related series will be invested at a specified
rate; or
o 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 fluctuation on the mortgage assets or on one or more
classes of certificates.
PURCHASE PRICE CONSIDERATION
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 are in turn distributed on those certificates or, in the case of a class
of stripped interest certificates, result in the reduction of the notional
amount thereof. You 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 could result in
an actual yield to you that is lower than the anticipated yield. You should
also consider, in the case
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of any offered certificate purchased at a premium, the risk that a faster than
anticipated rate of principal payments on those mortgage loans could result in
an actual yield to you that is lower than the anticipated yield. In addition,
if you purchase an offered certificate at a discount or premium, and principal
payments are made in reduction of the principal balance or notional amount of
your offered certificates at a rate slower or faster than the rate you
anticipated during any particular period, the consequent adverse effects on
your yield would not be fully offset by a subsequent like increase or decrease
in the rate of principal payments.
PAYMENT DELAYS
For each series of certificates, a period of time will elapse between the
date upon which payments on the mortgage loans in the related trust are due and
the distribution date on which the payments are passed through to
certificateholders. That delay will effectively reduce the yield that would
otherwise be produced if payments on the mortgage loans were distributed to
certificateholders on the date they were due.
SHORTFALLS IN COLLECTIONS OF INTEREST
When a principal prepayment in full or in part is made on a mortgage loan,
the borrower is typically charged interest on the amount of the prepayment only
through the date of the prepayment, instead of through the due date for the
next succeeding scheduled payment. However, interest accrued and distributable
on any series of certificates on any distribution date will typically
correspond to interest accrued on the mortgage loans to their respective due
dates during the related due period. As more specifically described in the
prospectus supplement for a series of certificates, a due period will be a
specified time period running from a specified day of one month to the
immediately preceding day of the next month, inclusive. All scheduled payments
on the mortgage loans in the related trust that are due during a given due
period will, to the extent received by a specified date called the
determination date or otherwise advanced by the related master servicer or
other specified person, be distributed to the holders of the certificates of
the series on the next distribution date. Consequently, if a prepayment on any
mortgage loan is distributable to certificateholders on a particular
distribution date, but the prepayment is not accompanied by interest thereon to
the due date for that mortgage loan in the related due period, then the
interest charged to the borrower net of servicing and administrative fees may
be less than the corresponding amount of interest accrued and otherwise payable
on the certificates of the related series. To the extent that any prepayment
interest shortfall is allocated to a class of offered certificates, the yield
on that class will be adversely affected. The prospectus supplement for each
series of certificates will describe the manner in which any shortfalls will be
allocated among the classes of certificates of that series. The related
prospectus supplement will also describe any amounts available to offset
shortfalls.
THE EFFECTS OF PREPAYMENTS ON YIELD
A certificate's yield to maturity will be affected by the rate of
principal payments on the mortgage loans in the related trust and the
allocation of those payments to reduce the principal balance or notional
amount, if applicable, of the certificate. The rate of
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principal payments on the mortgage loans in any trust will be affected by the
amortization schedules thereof. In the case of ARM loans, amortization
schedules may change periodically to accommodate adjustments to the mortgage
rates of those loans, the dates on which any balloon payments are due, and the
rate of principal prepayments. Because the rate of principal prepayments on the
mortgage loans in any trust will depend on future events and a variety of
factors, no assurance can be given as to that rate.
Principal prepayments include:
o voluntary prepayments by borrowers;
o prepayments resulting from liquidations of mortgage loans due to
defaults, casualties or condemnations affecting the mortgaged
properties; and
o purchases of mortgage loans out of the related trust.
A lower than anticipated rate of principal prepayments on the mortgage
loans in the related trust will negatively affect the yield to investors in any
class of certificates that are stripped principal certificates. A higher than
anticipated rate of principal prepayments on those mortgage loans will
negatively affect the yield to investors in any class of certificates that are
stripped interest certificates. In general, the notional amount of a class of
stripped interest certificates will either be based on the principal balances
of some or all of the mortgage assets in the related trust or equal to the
initial stated principal amounts or certificate balance of one or more of the
other classes of certificates of the same series. If the offered certificates
of a series include any stripped interest certificates, the related prospectus
supplement will include a table showing the effect of various constant assumed
levels of prepayment on yields on those certificates. The purpose of the tables
are to illustrate the sensitivity of yields to various constant assumed
prepayment rates and are not intended to predict, or to provide information
that will enable you to predict, yields or prepayment rates.
The depositor is not aware of any publicly available or authoritative
statistics that relate 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 may be affected by a number of
factors, including:
o the availability of mortgage credit,
o the relative economic vitality of the area in which the mortgaged
properties are located,
o the quality of management of the mortgaged properties,
o the servicing of the mortgage loans,
o possible changes in tax laws, and
o other opportunities for investment.
In addition, the rate of principal payments on the mortgage loans in any
trust may be affected by
o the existence of lock-out periods;
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o requirements that principal prepayments be accompanied by prepayment
premiums; and
o the extent to which those prepayment premium provisions may be
practicably enforced.
To the extent enforceable, prepayment premium 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
the interest rate specified in the mortgage loan, 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 those ARM loans decline in a manner consistent
therewith, the related borrowers may have an increased incentive to refinance
for purposes of either converting to a fixed rate loan and thereby locking in
the rate or 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, some borrowers may sell mortgaged
properties 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
before 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, as to the relative importance of those
factors, as to the percentage of the principal balance of those mortgage loans
that will be paid as of any date or as to the overall rate of prepayment on
those mortgage loans.
WEIGHTED AVERAGE LIFE AND MATURITY
The rate at which principal payments are received on the mortgage loans in
any trust will affect the ultimate maturity and the weighted average life of
one or more classes of the certificates of the series. Unless more specifically
described 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 that 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 is
paid to that class. For this purpose, the term prepayment includes voluntary
prepayments, liquidations due to default and purchases of mortgage loans out of
the related trust. Prepayment rates on loans are commonly measured relative to
a prepayment standard or model, such as the Constant Prepayment Rate or CPR
prepayment model or the Standard Prepayment Assumption or SPA prepayment model.
CPR represents an assumed constant rate of prepayment each month expressed as
an annual percentage relative to the then outstanding principal balance of a
pool of loans for the life of those loans. SPA represents an assumed variable
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rate of prepayment each month expressed as an annual percentage of 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 those 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. As a result, it is unlikely that the prepayment
experience of the mortgage loans included in any trust will conform to any
particular level of CPR or SPA.
The prospectus supplement for each series of certificates will contain
tables, if applicable, specifying the projected weighted average life of each
class of offered certificates of that series and the percentage of the initial
certificate balance of each class that would be outstanding on specified
distribution dates based on the assumptions stated in the prospectus
supplement. The assumptions will include assumptions that prepayments on the
related mortgage loans are made at rates corresponding to various percentages
of CPR or SPA, or at other rates specified in that prospectus supplement. The
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.
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OTHER FACTORS AFFECTING YIELD, WEIGHTED AVERAGE LIFE AND MATURITY
Balloon Payments; Extensions of Maturity.
Some or all of the mortgage loans included in a trust 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, mortgage loans that require
balloon payments may default at maturity, or the maturity of 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. To minimize
losses on defaulted mortgage loans, the master servicer or a special servicer,
to the extent and under the circumstances set forth in this prospectus 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 those certificates and, if those
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 on the loan 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. A 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 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 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 negative amortization
would be allocated or that would bear the effects of a slower rate of
amortization on the mortgage loans may increase as a result of that feature.
Negative amortization also may occur in respect of an ARM loan that:
o limits the amount by which its scheduled payment may adjust in response to a
change in its mortgage rate,
o provides that its scheduled payment will adjust less frequently than its
mortgage rate, or
o provides for constant scheduled payments even if its mortgage rate has been
adjusted.
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Conversely, during a period of declining interest rates, the scheduled
payment on 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
the mortgage loan. Any acceleration in amortization of its principal balance
will shorten the weighted average life of a mortgage loan and, correspondingly,
the weighted average lives of those classes of certificates entitled to a
portion of the principal payments on that mortgage loan.
The extent to which the yield on any offered certificate will be affected
by the inclusion in the related trust of mortgage loans that permit negative
amortization, will depend upon whether that offered certificate was purchased
at a premium or a discount and the extent to which the payment characteristics
of those mortgage loans delay or accelerate the distributions of principal on
that certificate or, in the case of a stripped interest certificate, delay or
accelerate the reduction of the notional amount thereof. See "--The Effects of
Prepayments on Yield" 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 for the mortgage loans, including the use of payment plans
before 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 on 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 those 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 and the timing of those losses and
shortfalls. The earlier that any loss or shortfall occurs, usually the greater
will be the negative effect on yield for any class of certificates that is
required to bear its effects.
The amount of any losses or shortfalls in collections on the mortgage
assets in any trust, 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, allocations may
be effected by a reduction in the entitlements to interest and certificate
balances of one or more of those classes of certificates, or by establishing a
priority of payments among those classes of certificates or both.
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.
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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, one or more
classes of certificates of any series, including one or more classes of offered
certificates of that series, may provide for distributions of principal from:
o amounts attributable to interest accrued but not currently distributable on
one or more classes of accrual certificates on which distributions of
interest may not commence until the occurrence of specific events, such as
the retirement of one or more other classes of certificates,
o Excess Funds or
o any other amounts described in the related prospectus supplement.
The amortization of any class of certificates out of the sources described
in the preceding paragraph would shorten the weighted average life of those
certificates and, if those certificates were purchased at a premium, reduce the
yield on those certificates. 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 those sources is likely to have
any material effect on the rate at which the certificates are amortized and the
yield to be realized on the certificates.
Optional Early Termination.
If provided in the related prospectus supplement, the master servicer, the
depositor or the holder of the residual interest in a REMIC may at its option
either effect early retirement of a series of certificates through the purchase
of the assets in the related trust or purchase, in whole but not in part, the
certificates specified in the related prospectus supplement. The optional
termination would occur under the circumstances and in the manner described
under "Description of the Certificates--Termination; Retirement of
Certificates" in this prospectus and in the related prospectus supplement. Any
early retirement of a class of offered certificates would shorten their
weighted average life and, if those certificates were purchased at premium,
reduce the yield realized on those certificates.
THE DEPOSITOR
GMAC Commercial Mortgage Securities, Inc. is a wholly-owned subsidiary of
GMAC Commercial Mortgage Corporation which is an indirect 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 200 Witmer 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.
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GMAC COMMERCIAL MORTGAGE CORPORATION
Unless we tell you otherwise in the related prospectus supplement, GMAC
Commercial Mortgage Corporation, an affiliate of GMAC Commercial Mortgage
Corporation and a corporation duly organized and existing under the laws of the
State of California, will act as the master servicer or manager for each series
of certificates.
GMAC Commercial Mortgage Corporation originates mortgage loans through its
own originating network and buys mortgage loans primarily through its branch
network and also from mortgage loan originators or sellers nationwide. GMAC
Commercial Mortgage Corporation services mortgage loans for its own account and
for others. GMAC Commercial Mortgage Corporation's principal executive offices
are located at 200 Witmer Road, Horsham, Pennsylvania 19044. Its telephone
number is (215) 328-4622. GMAC Commercial Mortgage Corporation 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.
DESCRIPTION OF THE CERTIFICATES
Each series of certificates will represent the entire beneficial ownership
interest in the trust created under the related pooling and servicing agreement
or other agreement specified in the related prospectus supplement. Either
agreement is referred to as a pooling and servicing agreement. The certificates
of each series may consist of one or more classes of certificates that:
o provide for the accrual of interest on the certificate balance or notional
amount at a fixed, variable or adjustable rate;
o constitute senior certificates or subordinate certificates;
o constitute stripped interest certificates or stripped principal
certificates;
o provide for distributions of interest or principal that begins only after
the occurrence of specified events, such as the retirement of one or more
other classes of certificates of the series;
o provide for distributions of principal to be made, from time to time or for
designated periods, at a rate that is faster or slower than the rate at
which payments or other collections of principal are received on the
mortgage assets in the related trust;
o provide for distributions of principal to be made, subject to available
funds, based on a specified principal payment schedule or other
methodology; or
o provide for distributions based on collections on the mortgage assets in the
related trust attributable to prepayment premiums and equity
participations.
A class of certificates may have two or more component parts that each
have different characteristics. For example, a class of certificates may have a
certificate balance on which it accrues interest at a fixed, variable or
adjustable rate. The same class of certificates may also have features of a
stripped interest certificate that entitles its holders 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
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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 classes of
stripped interest certificates or REMIC residual certificates, notional amounts
or percentage interests, specified in the related prospectus supplement. One or
more classes of offered certificates of any series may be issued as definitive
certificates in fully registered, definitive form or may be offered as
book-entry certificates in book-entry format through the facilities of The
Depository Trust Company or DTC. If issued as definitive certificates, the
offered certificates of each series may be transferred or exchanged 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. Any transfer or exchange of the certificates must comply
with any restrictions on transfer described in the related prospectus
supplement. Interests in a class of book-entry certificates will be transferred
on the book-entry records of DTC and its participating organizations.
DISTRIBUTIONS
The trustee will make distributions on the certificates of each series on
each distribution date from the Available Distribution Amount for that series
on that distribution date. The distribution date for a series of certificates
will be a specified day of each month, or, if that day is not a business day,
the next business day, beginning in the month specified in the related
prospectus supplement.
To the extent specified in the related prospectus supplement,
distributions on the certificates of each series, other than the final
distribution in retirement of any certificate, will be made to the persons in
whose names the certificates are registered at the close of business on the
record date or last business day of the month preceding the month in which the
applicable distribution date occurs. All distributions on each class of
certificates on each distribution date will be allocated pro rata among the
outstanding certificates in the class in proportion to the respective
percentage interests evidenced thereby to the extent specified in the related
prospectus supplement. Payments may be made by wire transfer in immediately
available funds to the account of a certificateholder at a bank or other entity
having appropriate facilities, if the certificateholder has provided the person
required to make the payments with wiring instructions no later than the
related record date or another date specified in the related prospectus
supplement and the certificateholder holds certificates in any requisite amount
or denomination specified in the related prospectus supplement. Otherwise,
payments will be made by check mailed to the address of the certificateholder
as it appears on the certificate register. However, 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
the certificates at the location specified in the notice to certificateholders
of the final distribution.
DISTRIBUTIONS OF INTEREST ON THE CERTIFICATES
Each class of certificates of each series, other than stripped principal
certificates that are entitled to distributions of principal, with
disproportionate, nominal or no
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distributions of interest and other than some 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. Interest on the certificates of each series
will be calculated on the basis described in the related prospectus supplement.
A class of accrual certificates will be entitled to distributions of
accrued interest beginning only on the distribution date, or under the
circumstances, specified in the related prospectus supplement. Some classes of
stripped principal certificates or REMIC residual certificates are not entitled
to any distributions of interest. Distributions of interest on all other
classes of certificates will be made on each distribution date based on the
Accrued Certificate Interest for that class and that distribution date, to the
extent of the portion of the Available Distribution Amount allocable to that
class on that distribution date.
Before the time interest is distributable on any class of accrual
certificates, the amount of Accrued Certificate Interest otherwise
distributable on that class will be added to the certificate balance thereof on
each distribution date or otherwise deferred as described in the related
prospectus supplement.
Stripped interest certificates are entitled to distributions of interest,
with disproportionate, nominal or no distributions or principal. To the extent
described in the related prospectus supplement, the Accrued Certificate
Interest for each distribution date on a class of stripped interest
certificates will be calculated like the Accrued Certificate Interest for other
classes except that it will accrue on a notional amount rather than a
certificate balance. The notional amount is either based on the principal
balances of some or all of the mortgage assets in the related trust or equal to
the certificate balances of one or more other classes of certificates of the
same series. Reference to a notional amount for a class of stripped interest
certificates is solely for convenience in making calculations and does not
represent the right to receive any distributions of principal.
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--Shortfalls in Collections of
Interest," exceed the amount of any sums that are applied to offset the amount
of those shortfalls. The particular manner in which the 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. These contingencies include delinquencies,
losses and deferred interest on or in respect of the mortgage assets in the
related trust. Unless otherwise provided in the related prospectus
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supplement, any reduction in the amount of Accrued Certificate Interest
otherwise distributable on a class of certificates by reason of the allocation
to that class of a portion of any deferred interest on or in respect of the
mortgage assets in the related trust will result in a corresponding increase in
the certificate balance of that class. See "Risk Factors--Each class of
certificates will have different yield and prepayment considerations" and
"Yield and Maturity Considerations--Shortfalls in Collections of Interest."
DISTRIBUTIONS OF PRINCIPAL OF THE CERTIFICATES
Each class of certificates of each series, other than some classes of
stripped interest certificates and some classes of REMIC residual certificates,
will have a certificate balance. The certificate balance for a class, at any
time, will equal the then maximum amount that the holders of certificates of
that 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. The
outstanding certificate balance of a class of certificates will be reduced by
distributions of principal made to that class. If provided in the related
prospectus supplement, the outstanding certificate balance of a class will be
reduced further by any losses incurred on the related mortgage assets allocated
to that class.
The outstanding certificate balance of a class of certificates may be
increased as a result of any deferred interest on or for the related mortgage
assets being allocated to that class. The outstanding certificate balance of
each class of accrual certificates will be increased before the distribution
date on which distributions of interest thereon are required to begin, by the
amount of any Accrued Certificate Interest on that class, as reduced by any
prepayment interest shortfalls.
Except to the extent specified 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 cut-off date, after
taking into account all scheduled payments due on or before that 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. To the
extent described in the related prospectus supplement, distributions of
principal on a series of certificates will be made on each distribution date to
the holders of the class or classes of certificates of that series entitled
thereto until the certificate balances of those certificates have been reduced
to zero. Distributions of principal on one or more classes of certificates may
be made at a rate that is faster than the rate at which payments or other
collections of principal are received on the mortgage assets in the related
trust. Distributions of principal on one or more classes of certificates may
not begin until the occurrence of specific 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 than the rate at which payments or other collections of
principal are received on the mortgage assets in the related trust.
Distributions of principal on one or more controlled amortization classes of
certificates may be made, subject to available funds, based on a specified
principal payment schedule. Distributions of principal on one or more companion
classes of certificates 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 are received.
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Distributions of principal of any class of offered certificates will be made on
a pro rata basis among all of the certificates of that class or on another
basis specified in the related prospectus supplement.
ALLOCATION OF LOSSES AND SHORTFALLS
The amount of any losses or shortfalls in collections on the mortgage
assets in any trust, to the extent not covered by any credit support, will be
allocated among the respective classes of certificates of the related series in
the priority and manner specified in the related prospectus supplement. The
allocations may be effected by a reduction in the entitlements to interest or
the certificate balances of one or more classes of certificates, or both, or by
establishing a priority of payments among those classes of certificates. See
"Description of Credit Support."
ADVANCES IN RESPECT OF DELINQUENCIES
If provided in the related prospectus supplement and, if a trust includes
mortgage loans, the master servicer, a special servicer, the trustee, the
fiscal agent, if any, any provider of credit support or any other specified
person may be obligated to advance, or have the option of advancing 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 for those
mortgage loans during the related due period and were delinquent on the related
determination date. The person responsible will make advances on or before each
distribution date, from its 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 that distribution 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
to receive those amounts, rather than to guarantee or insure against losses.
Consistent with this principle, all advances made out of an entity's own funds
will be reimbursable out of related proceeds consisting of liquidation
proceeds, insurance proceeds and condemnation proceeds on the mortgage loans on
which payments are delinquent and any credit support or other specific sources
that are identified in the related prospectus supplement. One source, in the
case of a series that includes one or more classes of subordinate certificates,
is collections on other mortgage assets in the related trust that would
otherwise be distributable to the holders of one or more classes of the
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 that
person, the advance would not be recoverable from related proceeds or another
specifically identified source. If previously made by a master servicer,
special servicer, fiscal agent or trustee, a nonrecoverable advance will be
reimbursable 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, that
person will be required to replace those funds in the certificate account on
any future distribution date to the extent that funds in the certificate
account on that distribution date are less than payments required to be made to
the related series of certificateholders on that date.
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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 surety bond, will be provided in the
related prospectus supplement.
If provided in the related prospectus supplement, any entity making
advances will be entitled to receive interest on advances for a specified
period during which the advances are outstanding at the rate specified in the
prospectus supplement. The entity making advances will be entitled to payment
of that interest periodically from general collections on the mortgage loans in
the related trust before any payment to the related series of
certificateholders or as described in the prospectus supplement.
The prospectus supplement for any series of certificates evidencing an
interest in a trust 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 supplement, will
forward to each holder, a distribution date statement that will set forth,
among other things, in each case to the extent applicable and to the extent
described in the related prospectus supplement:
o the amount of that distribution to holders of that class of offered
certificates that was applied to reduce the certificate balance thereof;
o the amount of that distribution to holders of that class of offered
certificates that was applied to pay Accrued Certificate Interest;
o the amount, if any, of that distribution to holders of that class of offered
certificates that was allocable to:
o prepayment premiums; and
o payments for equity participations;
o the amount, if any, by which that distribution is less than the amounts to
which holders of that class of offered certificates are entitled;
o if the related trust includes mortgage loans, the aggregate amount of
advances included in that distribution;
o if the related trust includes mortgage loans, the amount of servicing
compensation received by the related master servicer, and, if payable
directly out of the related trust, by any special servicer and any
sub-servicer;
o if the related trust includes MBS, the amount of administrative compensation
received by the REMIC administrator;
o information regarding the aggregate principal balance of the related
mortgage assets on or about that distribution date;
o if the related trust includes mortgage loans, information regarding the
number and aggregate principal balance of those mortgage loans that are
delinquent;
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o if the related trust includes mortgage loans, information regarding the
aggregate amount of losses incurred and principal prepayments made on those
mortgage loans during the related Prepayment Period;
o the certificate balance or notional amount, as the case may be, of that
class of certificates at the close of business on that distribution
date--separately identifying any reduction in the certificate balance or
notional amount due to the allocation of any losses on the related mortgage
assets, any increase in the 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, if Accrued Certificate Interest has been
added to that balance;
o if that class of offered certificates has a variable pass-through rate or an
adjustable pass-through rate, the pass-through rate applicable thereto for
that distribution date and, if determinable, for the next succeeding
distribution date;
o the amount deposited in or withdrawn from any reserve fund on that
distribution date, and the amount remaining on deposit in that reserve fund
as of the close of business on that distribution date;
o if the related trust includes one or more instruments of credit support,
such as a letter of credit, an insurance policy or a surety bond, the
amount of coverage under each instrument as of the close of business on
that distribution date; and
o the amount of credit support being afforded by any classes of subordinate
certificates.
In the case of information furnished under the first three points 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 that
series.
Within a reasonable period of time after the end of each calendar year,
the master servicer, manager or trustee for a series of certificates, as the
case may be, will, upon request, furnish to each person who at any time during
the calendar year was a holder of an offered certificate of that series a
statement containing the information provided in the first three points above,
aggregated for that calendar year or the applicable portion thereof during
which that person was a certificateholder. This obligation will be deemed to
have been satisfied to the extent that substantially comparable information is
provided under any requirements of the Internal Revenue Code of 1986 as are
from time to time in force. See, however, "--Book-Entry Registration and
Definitive Certificates" below.
If the trust 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 the MBS will depend on the reports received for the 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.
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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 under the pooling and servicing
agreement following the earlier of:
o the final payment or other liquidation or disposition, or any advance made
for the last mortgage asset in the trust for that series or of any property
acquired upon foreclosure or deed in lieu of foreclosure of any mortgage
loan in the trust for that series, and
o the purchase by the master servicer, the depositor or, if specified in the
related prospectus supplement, by the holder of the REMIC residual
certificates from the trust for that series of all remaining mortgage
assets therein and property, if any, acquired in respect of the mortgage
loans therein. See "Federal Income Tax Consequences" below.
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 provided in the
related prospectus supplement. Upon the purchase of those certificates or at
any time thereafter, at the option of the master servicer or the depositor, the
mortgage assets may be sold, the certificates retired and the trust terminated,
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 the persons named
in the pooling and servicing agreement. 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 any special servicer because of
the termination.
Any purchase of mortgage assets and other property will 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. Before the right to purchase can be exercised, however,
the aggregate principal balance of the mortgage assets for that series must be
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 describe
the amounts that the holders of those certificates will be entitled to receive
upon early retirement. Early termination may adversely affect the yield to
holders of some classes of certificates. If a REMIC election has been made, the
termination of the related trust will be effected in a manner consistent with
applicable federal income tax regulations and its status as a REMIC.
BOOK-ENTRY REGISTRATION AND DEFINITIVE CERTIFICATES
If so provided in the prospectus supplement for a series of certificates,
one or more classes of the offered certificates of the series will be offered
in book-entry format through the facilities of DTC, and each class so offered
will be represented by one or more global certificates registered in the name
of DTC or its nominee.
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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 under the provisions of Section 17A of the Exchange Act. DTC was
created to hold securities for its participating organizations 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 maintain accounts with DTC and include securities brokers and
dealers, banks, trust companies and clearing corporations and 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 other indirect participants, such as banks, brokers, dealers
and trust companies that clear through or maintain a custodial relationship
with a direct participant, either directly or indirectly. The rules applicable
to DTC and its participants are on file with the SEC.
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 or 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 those
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
if 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 the 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 that date.
Disbursement of 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 participant, and not of
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DTC, the depositor or any trustee or master servicer, consistent with 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 the term is used in the related pooling and servicing
agreement, of book-entry certificates will be the nominee of DTC, and the
certificate owners will not be recognized as certificateholders under the
pooling and servicing agreement. Certificate owners will be permitted to
exercise the rights of certificateholders under the related pooling and
servicing agreement only indirectly through the participants who in turn will
exercise their rights through DTC. The depositor is informed that DTC will take
action permitted to be taken by a certificateholder under a pooling and
servicing agreement only at the direction of one or more participants to whose
account with DTC interests in the book-entry certificates are credited.
Because DTC can act only on behalf of participants, who in turn act on
behalf of indirect participants and 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 that interest.
If provided 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:
o the depositor advises the trustee in writing that DTC is no longer willing
or able to discharge properly its responsibilities as depository for those
certificates and the depositor is unable to locate a qualified successor or
o the depositor, at its option, elects to terminate the book-entry system
through DTC for those 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 those instructions the definitive certificates to which they are
entitled, and thereafter the holders of those definitive certificates will be
recognized as certificateholders under the related pooling and servicing
agreement.
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THE POOLING AND SERVICING AGREEMENTS
The certificates of each series will be issued under a pooling and
servicing agreement. The parties to a pooling and servicing agreement will
typically 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. A pooling and servicing agreement that relates to a trust 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. An affiliate of the depositor,
or the mortgage asset seller or an affiliate thereof, may perform the functions
of a special servicer, manager or a master servicer called either a servicer or
master servicer. Any party to a pooling and servicing agreement or any
affiliate thereof may own certificates issued under that agreement.
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. The following summaries describe 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 includes MBS, will
summarize all of the material provisions of the related pooling and servicing
agreement. These summaries 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 those provisions in the related prospectus supplement.
The depositor will provide a copy of the pooling and servicing agreement,
without exhibits, that relates to any series of certificates without charge
upon written request of a holder of a certificate of that series addressed to
it at its principal executive offices specified 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, together with, to the extent described in
the related prospectus supplement, all principal and interest to be received on
or for those 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
that 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 for that series. Each mortgage loan will be identified in
a schedule appearing as an exhibit to the related pooling and servicing
agreement. The schedule will include detailed information that pertains to each
mortgage loan included in the related trust, which information will typically
include:
o the address of the related mortgaged property and type of property;
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o the mortgage rate and, if applicable, the applicable index, gross margin,
adjustment date and any rate cap information;
o the original and remaining term to maturity;
o the original amortization term; and
o the original and outstanding principal balance.
In addition, to the extent provided in the related prospectus supplement,
the depositor will, as to each mortgage loan to be included in a trust,
deliver, or cause to be delivered, to the related trustee or to a custodian
appointed by the trustee:
o the mortgage note endorsed, without recourse, either in blank or to the
order of the trustee or its nominee, the mortgage with evidence of
recording indicated thereon, except for any mortgage not returned from the
public recording office;
o an assignment, which may be a blanket assignment covering mortgages on
mortgaged properties located in the same county if permitted by law, 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 assignment not returned from the public
recording office; and
o if applicable, any riders or modifications to the mortgage note and
mortgage, together with other documents at the times provided in the
related pooling and servicing agreement.
A trust 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 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, for
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 custodian a true and correct photocopy of the mortgage or
assignment as submitted for recording. The depositor will deliver, or cause to
be delivered to the related trustee or custodian the mortgage or assignment
with evidence of recording after receipt from the public recording office. If
the depositor cannot deliver, for any mortgage loan, the mortgage or any
intervening assignment with evidence of recording concurrently with the
execution and delivery of the related pooling and servicing agreement because
the mortgage or assignment has been lost, the depositor will deliver, or cause
to be delivered, to the related trustee or custodian a true and correct
photocopy of that mortgage or assignment with evidence of recording.
As 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, the 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 the
mortgage loan.
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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, and the trustee or
custodian will hold those documents in trust for the benefit of the
certificateholders of that series. Unless we tell you otherwise in the related
prospectus supplement, if any mortgage loan document is found to be missing or
defective, and the omission or defect, as the case may be, materially and
adversely affects the interests of the certificateholders of the related
series, the trustee or custodian will be required to notify the master servicer
and the depositor, and one of them will be required to notify the relevant
mortgage asset seller. If the mortgage asset seller cannot deliver the document
or cure the defect within a specified number of days after receipt of the
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.
If so provided in the prospectus supplement for a series of certificates,
a mortgage asset seller, instead of repurchasing a mortgage loan for which
there is missing or defective loan documentation, will have the option,
exercisable upon specific conditions or within a specified period after initial
issuance of the series of certificates, to replace that mortgage loan with one
or more other mortgage loans. Any replacement of a mortgage loan must comply
with standards that will be described in the 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 when the related
prospectus supplement provides for additional remedies. 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 under a custodial agreement to hold title to the mortgage loans in
any trust and to maintain possession and review the documents relating to those
mortgage loans as the agent of the trustee. The identity of any custodian to be
appointed on the date of initial issuance of the certificates will be provided
in the related prospectus supplement. Any custodian may be an affiliate of the
depositor or the master servicer.
REPRESENTATIONS AND WARRANTIES; REPURCHASES
To the extent provided in the prospectus supplement for a series of
certificates, the depositor will, for each mortgage loan in the related trust,
make or assign, or cause to be made or assigned, representations and warranties
made by a warranting party covering, for example:
o the accuracy of the information for the mortgage loan on the schedule of
mortgage loans appearing as an exhibit to the related pooling and servicing
agreement;
o the enforceability of the related mortgage note and mortgage and the
existence of title insurance insuring the lien priority of the related
mortgage;
o the warranting party's title to the mortgage loan and the authority of the
warranting party to sell the mortgage loan; and
o the payment status of the mortgage loan.
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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.
If provided in the related prospectus supplement, the master servicer or
the trustee or both 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 the warranting party cannot cure
the breach within a specified period following the date on which it was
notified of the breach, then, if provided in the related prospectus supplement,
it will be obligated to repurchase the mortgage loan from the trustee at the
applicable Purchase Price.
If provided in the related prospectus supplement, a warranting party,
instead of repurchasing a mortgage loan for which a breach has occurred, will
have the option to replace the mortgage loan with one or more other mortgage
loans, in accordance with standards that will be described in the prospectus
supplement. This option will be exercisable upon the conditions and within the
time period specified in the related prospectus supplement. This repurchase or
substitution obligation will constitute the sole remedy available to holders of
the certificates of any series or to the related trustee on their behalf for a
breach of representation and warranty by a warranting party unless the related
prospectus supplement provides for additional remedies. Unless it is the
warranting party, neither the depositor nor the master servicer 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 before the date upon which the related series of certificates is
issued, and therefore 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 were made will be
specified in the related prospectus supplement.
COLLECTION AND OTHER SERVICING PROCEDURES
As more specifically described 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 that mortgage pool. The master servicer will
act for the benefit of the related certificateholders, in accordance with
applicable law and with the terms of the pooling and servicing agreement, the
mortgage loans and any instrument of credit support included in the related
trust. Subject to these servicing obligations, the master servicer will have
full power and authority to do any and all things in connection with the
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 the collection procedures as it would follow for mortgage loans that are
comparable to the mortgage loans and held for its
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own account. These procedures must be consistent with the terms of the related
pooling and servicing agreement and not impair recovery under any instrument of
credit support included in the related trust. Consistent with these servicing
obligations, the master servicer will be permitted to waive any prepayment
premium, late payment charge or other charge in connection with any mortgage
loan to the extent provided in the related prospectus supplement.
Under a pooling and servicing agreement, a master servicer or special
servicer will be granted discretion to extend relief to mortgagors whose
payments become delinquent. To the extent provided in the related prospectus
supplement, if a material default occurs or a payment default is reasonably
foreseeable on a mortgage loan, the master servicer or special servicer will be
permitted, subject to any specific limitations provided in the related pooling
and servicing agreement and described in the related prospectus supplement, to
modify, waive or amend any term of the mortgage loan. These modifications,
waivers or amendments may include deferring payments, extending the stated
maturity date or otherwise adjusting the payment schedule. Each modification,
waiver or amendment must be reasonably likely to produce a greater recovery on
the mortgage loan on a present value basis than would liquidation and 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 master servicer will be
required:
o to monitor any mortgage loan that is in default;
o 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;
o initiate corrective action in cooperation with the mortgagor if cure is
likely;
o inspect the related mortgaged property; and
o take 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 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.
The variation will depend on the particular mortgage loan, the mortgaged
property, the mortgagor, the presence of an acceptable party to assume the
mortgage loan and the laws of the jurisdiction in which the mortgaged property
is located. If a mortgagor files a bankruptcy petition, the master servicer may
not be permitted to accelerate the maturity of the mortgage loan or to
foreclose on the related mortgaged property for a considerable period of time.
See "Legal Aspects of Mortgage Loans--Bankruptcy Laws."
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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 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 the approval will not
adversely affect the security for, or the timely and full collectibility of,
the related mortgage loan. The master servicer will not approve a request if a
REMIC election has been made and the request would, in the opinion of
independent counsel, result in the imposition of a tax on the trust or cause
the trust 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 the request will be retained by the master
servicer as additional servicing compensation.
For mortgage loans secured by junior liens on the related mortgaged
properties, to the extent 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. This request for notice
will be filed 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 to foreclose the junior lienholder's equity of
redemption. To the extent provided 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 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:
o has accelerated or intends to accelerate the obligations secured by the
related senior lien;
o has declared or intends to declare a default under the mortgage or the
promissory note secured thereby; or
o has filed or intends to file an election to have the related mortgaged
property sold or foreclosed,
then, to the extent provided in the related prospectus supplement, the master
servicer will be required to take, on behalf of the related trust, whatever
actions are necessary to protect the interests of the related
certificateholders or to preserve the security of the related mortgage loan or
both, subject to the application of the REMIC provisions.
Unless we tell you otherwise 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 the advance is in the best interests
of the related certificateholders and the master servicer determines the
advances are recoverable out of payments on or proceeds of the related mortgage
loan.
The master servicer for any trust, directly or through sub-servicers, will
also be required to perform various other customary functions of a servicer of
mortgage loans, including:
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o 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;
o attempting to collect delinquent payments;
o supervising foreclosures;
o negotiating modifications;
o conducting property inspections on a periodic or other basis; managing or
overseeing the management of REO properties or mortgaged properties
acquired on behalf of the trust through foreclosure, deed-in-lieu of
foreclosure or otherwise; and
o maintaining servicing records relating to the mortgage loans.
To the extent provided 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 it services to one or more third-party sub-servicers. To the
extent specified in the related prospectus supplement, the master servicer will
remain obligated under the related pooling and servicing agreement. A
sub-servicer for any series of certificates may be an affiliate of the
depositor or master servicer. To the extent specified in the related prospectus
supplement, each sub-servicing agreement between a master servicer and a
sub-servicer 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 the 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,
even if the master servicer's compensation under the related pooling and
servicing agreement is insufficient to pay those fees. Each sub-servicer will
be reimbursed by the master servicer that retained it for expenditures which it
makes, 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
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 the series. A
special servicer may be entitled to any of the rights, and subject to any of
the obligations, described in this prospectus for 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
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certificates. The master servicer will be liable for the performance of a
special servicer only if, and to the extent, provided in the related prospectus
supplement. The master servicer may be appointed the special servicer.
CERTIFICATE ACCOUNT
For each trust that includes mortgage loans, the master servicer, the
trustee or a special servicer will establish and maintain a certificate account
that will 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 in the account may be invested pending each
succeeding distribution date in permitted investments consisting of 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. To the extent 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 them or of the depositor
if the account complies with applicable rating agency standards. If permitted
by each applicable rating agency, a certificate account may contain funds
relating to more than one series of mortgage pass-through certificates and
other funds representing payments on mortgage loans owned by the related master
servicer or special servicer, or serviced by either of them on behalf of
others.
Deposits.
To the extent described in the related prospectus supplement, the
following payments and collections received or made by the master servicer, the
trustee or any special servicer after 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 that includes mortgage loans. Each deposit will be made within a
specified period following receipt:
(1) all payments of principal, including principal prepayments, on the
mortgage loans;
(2) all payments of interest on the mortgage loans, including any default
interest collected, in each case net of any portion retained by the
master servicer or any special servicer as its servicing compensation or
as compensation to the trustee;
(3) all insurance proceeds received under any hazard, title or other
insurance policy that provides coverage for a mortgaged property or the
related mortgage loan, other than proceeds applied to the restoration of
the property or released to the related borrower;
(4) all condemnation 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;
(5) any other amounts disposition proceeds received and retained in
connection with the liquidation of defaulted mortgage loans or property
acquired by foreclosure or otherwise;
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(6) together with the net operating income, less reasonable reserves for
future expenses, derived from the operation of any mortgaged properties
acquired by the trust through foreclosure or otherwise;
(7) any amounts paid under any instrument or drawn from any fund that
constitutes credit support for the related series of certificates;
(8) any advances made for delinquent scheduled payments of principal and
interest on the mortgage loans;
(9) any amounts paid under any cash flow agreement;
(10) all proceeds of the purchase of any mortgage loan, or REO property 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", together with
insurance proceeds, condemnation proceeds and disposition proceeds,
liquidation proceeds;
(11) to the extent that any 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 for the mortgage
loans;
(12) all payments required to be deposited in the certificate account for any
deductible clause in any blanket insurance policy described under
"--Hazard Insurance Policies";
(13) any amount required to be deposited by the master servicer or the trustee
to cover 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
(14) any other amounts required to be deposited in the certificate account as
described in the related prospectus supplement.
Withdrawals.
To the extent described in the related prospectus supplement, a master
servicer, trustee or special servicer may make withdrawals from the certificate
account for a trust that includes mortgage loans for any of the following
purposes:
o to make distributions to the certificateholders on each distribution date;
o to pay the master servicer or a special servicer any servicing fees out of
payments and other collections of interest on the particular mortgage loans
on which those fees were earned;
o to pay costs and expenses incurred by the trust for environmental site
assessments performed for mortgaged properties that constitute security for
defaulted mortgage
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loans, and for any containment, clean-up or remediation of hazardous wastes
and materials present on those mortgaged properties, as described under
"--Realization Upon Defaulted Mortgage Loans";
o to reimburse the master servicer, the depositor, the trustee, or any of
their respective directors, officers, employees and agents for specified
expenses, costs and liabilities incurred by them, as described under
"--Matters Regarding the Master Servicer and the Depositor" and "--Matters
Regarding the Trustee";
o to the extent described in the related prospectus supplement, to pay the
fees of the trustee and any provider of credit support;
o to the extent described in the related prospectus supplement, to reimburse
prior draws on any form of credit support;
o 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;
o to pay any servicing expenses not otherwise required to be advanced by the
master servicer, a special servicer or any other specified person;
o if one or more elections have been made to treat the trust or designated
portions thereof as a REMIC, to pay any federal, state or local taxes
imposed on the trust or its assets or transactions, as described under
"Federal Income Tax Consequences--REMICs--Prohibited Transactions Tax and
Other Taxes;"
o to pay the cost of various opinions of counsel obtained under the related
pooling and servicing agreement for the benefit of certificateholders;
o to make any other withdrawals described in the related prospectus
supplement; and
o to clear and terminate the certificate account upon the termination of the
trust.
To the extent provided in the related prospectus supplement, withdrawals
from the certificate account can also be made 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
specified unreimbursed servicing expenses incurred by it, for mortgage loans in
the trust and REO properties. This reimbursement is available from amounts that
represent late payments and liquidation proceeds on the particular mortgage
loans on which advances were made, and net income collected on any REO
properties for which the advances were made or the expenses were incurred.
Reimbursements of advances can also be made from amounts drawn under any form
of credit support. If in the judgment of the person making the advance, those
advances or expenses or both will not be recoverable from those amounts, the
reimbursement will be available from amounts collected on other mortgage loans
in the same trust or to the extent described in the related prospectus
supplement, only from that portion of amounts collected on those other mortgage
loans that is otherwise distributable on one or more classes of subordinate
certificates of the related series.
To the extent described in the related prospectus supplement, withdrawals
can also be made to pay the master servicer, a special servicer or any other
specified person interest accrued on these advances and servicing expenses
while they remain outstanding and unreimbursed.
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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
o institute foreclosure proceedings,
o exercise any power of sale contained in the related mortgage,
o obtain a deed in lieu of foreclosure, or
o otherwise acquire title to the related mortgaged property, by operation of
law or otherwise.
Except to the extent specified in the related prospectus supplement,
unless the master servicer has previously received a report prepared by a
person who regularly conducts environmental audits, the master servicer may not
acquire title to any mortgaged property or take any other action relating to
any mortgaged property that would cause the trustee, for the benefit of the
related series of certificateholders, or any other specified person to hold
title to, to be a "mortgagee-in-possession" of, or to be an "owner" or an
"operator" of the mortgaged property within the meaning of federal
environmental laws. The environmental report will be an expense of the trust,
and the report must indicate that either:
(1) (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
(2) the master servicer, based solely, as to environmental matters and
related costs, on the information provided in the report, determines that
taking 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 (1)(B) above, is reasonably
likely to produce a greater recovery, taking into account the time value
of money, than not taking the actions. See "Legal Aspects of Mortgage
Loans--Environmental Considerations."
A pooling and servicing agreement may grant to any or all of the master
servicer, a special servicer, a provider of credit support and the holder or
holders of classes of the related series of certificates a right of first
refusal to purchase from the trust, at a predetermined Purchase Price any
mortgage loan on which a specified number of scheduled payments are delinquent.
The predetermined Purchase Price will be specified on the prospectus supplement
if it is insufficient to fully cover all amounts due on the related mortgage
loan. In addition, to the extent provided in the related prospectus supplement,
the master servicer may offer to sell any defaulted mortgage loan if the master
servicer determines, consistent with its normal servicing procedures, that a
sale would produce a greater recovery, taking into account the time value of
money, than would liquidation of the related mortgaged property. If the master
servicer does not sell the mortgage loan, it will proceed against the related
mortgaged property, subject to the discussion below.
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If title to any mortgaged property is acquired by a trust as to which a
REMIC election has been made, the master servicer, on behalf of the trust, will
be required to sell the mortgaged property within three full years after the
taxable year of acquisition or within another period specified in the related
prospectus supplement, unless:
o the IRS grants an extension of time to sell the property or
o the trustee receives an opinion of independent counsel to the effect that
the holding of the property by the trust for longer than that period will
not result in the imposition of a tax on the trust or cause the trust, 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 this and any other tax-related limitations, the master servicer
will generally be required to attempt to sell any REO property on the same
terms and conditions it would if it were the owner. To the extent provided in
the related prospectus supplement, if title to any mortgaged property is
acquired by a trust 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 the property does not
result in the receipt by the trust of any income from non-permitted assets as
described in Code Section 860F(a)(2)(B), and that the trust does not derive any
"net income from foreclosure property" within the meaning of Code Section
860G(c)(2), for the property. If the trust acquires title to any mortgaged
property, the master servicer, on behalf of the trust, may retain an
independent contractor to manage and operate the property. The retention of an
independent contractor, however, will not relieve the master servicer of its
obligation to manage the mortgaged property as required under the related
pooling and servicing agreement.
If liquidation proceeds collected on a defaulted mortgage loan are less
than the outstanding principal balance of the defaulted mortgage loan plus
interest accrued on that mortgage loan plus the aggregate amount of
reimbursable expenses incurred by the master servicer related to that mortgage
loan, then the trust will realize a loss in the amount of the shortfall to the
extent that the shortfall is not covered by any instrument or fund constituting
credit support. The master servicer will be entitled to reimbursement from the
liquidation proceeds recovered on any defaulted mortgage loan, of any:
o amounts that represent unpaid servicing compensation for the mortgage loan,
o unreimbursed servicing expenses incurred on the mortgage loan, and
o any unreimbursed advances of delinquent payments made on the mortgage loan.
The master servicer will be entitled to receive these reimbursements
before any distributions of liquidation proceeds are made to
certificateholders. In addition, if provided in the related prospectus
supplement, amounts otherwise distributable on the certificates may be further
reduced by interest payable to the master servicer on any servicing expenses
and advances.
If any mortgaged property suffers damage and the proceeds, if any, of the
related hazard insurance policy are insufficient to restore fully the damaged
property, the
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master servicer will not be required to expend its own funds to restore the
property unless, and to the extent not otherwise provided in the related
prospectus supplement, it determines that:
o the restoration will increase the proceeds to certificateholders on
liquidation of the mortgage loan after reimbursement of the master servicer
for its expenses, and
o the expenses will be recoverable by it from related insurance proceeds,
condemnation proceeds, liquidation proceeds or amounts drawn on any
instrument or fund constituting credit support.
HAZARD INSURANCE POLICIES
Unless we tell you otherwise 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 the coverage as is required under the
related mortgage if the mortgage permits the holder of the mortgage to dictate
to the borrower the insurance coverage to be maintained on the related
mortgaged property, the coverage as is consistent with the master servicer's
normal servicing procedures. The coverage will typically be in an amount equal
to the lesser of the principal balance owing on the mortgage loan and the
replacement cost of the related mortgaged property.
The ability of a master servicer to assure that insurance proceeds are
appropriately applied may be dependent upon its being named as an additional
insured under any insurance policy and upon whether information concerning
covered losses is furnished by borrowers. All amounts collected by a master
servicer under any insurance policy covering the mortgaged property, except for
amounts to be applied to the restoration or repair of the mortgaged property or
released to the borrower consistent with the master servicer's normal servicing
procedures or 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 a hazard
insurance policy by maintaining a blanket policy insuring against hazard losses
on all of the mortgage loans in a trust. If the blanket policy contains a
deductible clause, the master servicer will be required, if a casualty covered
by the blanket policy occurs, to deposit in the related certificate account all
additional sums that would have been deposited in that account under an
individual policy but were not because of the deductible clause.
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 and different applicable state
forms, 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. As a result, a mortgaged property may not be
insured for losses arising from any of these causes unless the related mortgage
specifically requires, or permits the holder thereof to require, that 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 of typically 80% to 90% of
the full replacement value of the improvements on the property to recover the
full amount of any partial loss. If the insured's coverage falls below this
specified percentage, the clauses typically provide that the insurer's
liability if there is a partial loss does not exceed the lesser of:
o the replacement cost of the improvements less physical depreciation; and
o the proportion of the loss that the amount of insurance carried bears to the
specified percentage of the full replacement cost of the improvements.
DUE-ON-SALE AND DUE-ON-ENCUMBRANCE PROVISIONS
Some 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.
Some 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
due-on-sale provision in a manner consistent with the master servicer's normal
servicing procedures. To the extent provided 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 "Legal Aspects of Mortgage
Loans--Due-on-Sale and Due-on-Encumbrance."
SERVICING COMPENSATION AND PAYMENT OF EXPENSES
As described in the related prospectus supplement, a master servicer's
primary servicing compensation for 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. Because this compensation is based on a
percentage of the principal balance of each mortgage loan outstanding from time
to time, it will decrease with the amortization of the mortgage loans.
A master servicer's compensation may also include:
o an additional specified portion of the interest payments on each defaulted
mortgage loan serviced by the master servicer;
o a fixed percentage of some or all of the collections and proceeds received
on any defaulted mortgage loan for which it negotiated a work-out or that
it liquidated; and
o any other amounts specified in the related prospectus supplement.
To the extent provided 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.
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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 specified expenses
incurred in the administration of the related trust, including:
o payment of the fees and disbursements of independent accountants,
o payment of fees and disbursements of the trustee and any custodians, and
o payment of expenses incurred related to distributions and delivery of
reports to certificateholders.
Other expenses, including expenses related to mortgage loan defaults and
liquidations and, to the extent so provided in the related prospectus
supplement, interest on these expenses at the rate specified therein, and the
fees of any special servicer, may be borne by the trust.
Servicing advances will be reimbursable from future payments and other
collections, including related proceeds, in any event on or in respect of the
related mortgage loan or REO property. Servicing advances 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.
EVIDENCE AS TO COMPLIANCE
Each pooling and servicing agreement will require that on or before a
specified date in each year, beginning the first specified 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
regarding the servicing of the mortgage loans. The statement will be to the
effect that, on the basis of an examination by that firm conducted
substantially in compliance with the Uniform Single Attestation Program for
Mortgage Bankers established by the Mortgage Bankers Association of America for
the servicing of commercial and multifamily mortgage loans or the Audit Program
for Mortgages serviced for FHLMC, the servicing of mortgage loans under the
agreements, including the related pooling and servicing agreement,
substantially similar to each other was conducted in compliance with the
agreements except for 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 the firm may rely, regarding 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 that statement, of
firms of independent public accountants for those sub-servicers which also have
been the subject of an examination.
Each pooling and servicing agreement will also provide that, on or before
a specified date in each year, beginning the first specified date that is at
least a specified number of months after the cut-off date, the master servicer
will deliver to the trustee
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a statement regarding its servicing. The statement will be signed by one or
more of its officers and be to the effect that, to the best knowledge of that
officer, the master servicer has fulfilled in all material respects its
obligations under the pooling and servicing agreement throughout the preceding
year. If, however, there has been a material default in the fulfillment of any
of its obligations, the statement will specify each known default and the
nature and status of the default. The statement may be provided as a single
form making the required statements for more than one pooling and servicing
agreement.
If provided 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.
MATTERS REGARDING THE MASTER SERVICER AND THE DEPOSITOR
Any master servicer may have other normal business relationships with the
depositor or the depositor's affiliates. To the extent provided in the related
prospectus supplement, the master servicer for that series will not be
permitted to resign from its obligations and duties under the pooling and
servicing agreement unless performance of those duties is no longer permissible
under applicable law or unless there is a permitted transfer of servicing. No
resignation of the master servicer 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.
To the extent provided in the related prospectus supplement, each pooling
and servicing agreement will provide that 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 or the
certificateholders for any action taken or for refraining from taking any
action in good faith under the pooling and servicing agreement, or for errors
in judgment. No person, however, 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
its obligations and duties.
To the extent provided 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 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. No person, however, will be
protected against any loss, liability or expense otherwise reimbursable under
the pooling and servicing agreement or any loss, liability or expense incurred
by reason of willful misfeasance, bad faith or negligence in the performance of
duties thereunder or by reason of reckless disregard of obligations and duties
thereunder.
In addition, each pooling and servicing agreement will provide that
neither the master servicer nor the depositor will be obligated 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 that in
its opinion may involve it in any expense or liability. The master servicer or
the depositor may, however, in its discretion, undertake
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an action that it deems necessary or desirable for the rights and duties of the
parties to the pooling and servicing agreement and the interests of the
certificateholders. The legal expenses and costs of those actions and any
resulting liability will be covered by the trust, and the master servicer or
the depositor, as the case may be, will be reimbursed out of funds otherwise
distributable to certificateholders.
If provided in the related pooling and servicing agreement, 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:
(1) the person is qualified to service mortgage loans on behalf of Federal
National Mortgage Association or FHLMC; and
(2) the 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.
Notwithstanding the prohibition on its resignation, the master servicer
may assign its rights under the pooling and servicing agreement to any person
to whom the master servicer is transferring a substantial portion of its
mortgage servicing portfolio, provided clauses (1) and (2) above are satisfied.
The master servicer will then be released from its obligations under the
pooling and servicing agreement, other than liabilities and obligations
incurred by it before the time of the assignment.
EVENTS OF DEFAULT
If provided in the related prospectus supplement, events of default under
the pooling and servicing agreement in respect of a series of certificates,
will include:
o 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 the series any required payment,
for 5 or more days after written notice of the failure is given 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 the class
evidencing 25% or more of the aggregate percentage interests of that class;
o 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 for that series of certificates that continues
unremedied for 30 days after written notice of the failure is given 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 the series evidencing 25% or more of the aggregate percentage interests
of that class; and
o specified events of insolvency, readjustment of debt, marshaling of assets
and liabilities or similar proceedings regarding the master servicer and
specified actions by the master servicer indicating its insolvency or
inability to pay its obligations.
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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 under the terms of any MBS included in any
trust will not constitute an event of default under the related pooling and
servicing agreement.
RIGHTS UPON EVENT OF DEFAULT
As 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
51% or more of the aggregate undivided interests, or, if so specified in the
related prospectus supplement, voting rights, in the related trust, the trustee
will, 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 that trust
and in and to the related mortgage loans and the proceeds thereof, other than
any rights of the master servicer as certificateholder and other than any
rights of the master servicer to payment or reimbursement for previously earned
servicing fees and outstanding advances. Then, 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 that
pooling and servicing agreement, other than the obligation to purchase mortgage
loans, and will be entitled to similar compensation arrangements.
If the trustee would be obligated, but is unwilling to succeed the master
servicer, 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 Federal
National Mortgage Association- 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 provided
in the pooling and servicing agreement. Pending the appointment, the trustee is
obligated to act in that capacity. The trustee and the successor may agree upon
the servicing compensation to be paid, which may not 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 under that pooling and servicing
agreement unless:
o the holder previously gave the trustee written notice of default and the
continuance thereof; and
o the holders of certificates of any class evidencing 25% or more of the
aggregate percentage interests constituting that class have:
o made written request upon the trustee to institute that proceeding in
its own name as trustee;
o offered to the trustee reasonable indemnity; and
o for 60 days after receipt of the request and indemnity, the trustee has
neglected or refused to institute the 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
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defend any litigation under or in relation to it at the request, order or
direction of any of the holders of certificates covered by that pooling and
servicing agreement, unless those certificateholders have offered to the
trustee reasonable security or indemnity against the related costs, expenses
and liabilities that may be incurred.
AMENDMENT
Each pooling and servicing agreement may be amended by its parties,
without the consent of any of the certificateholders covered by that pooling
and servicing agreement,
(1) to cure any ambiguity,
(2) to correct or supplement any provision that may be inconsistent with any
other provision in the agreement or to correct any error,
(3) to change the timing, the nature or both, of deposits in the certificate
account, provided that:
o the change would not adversely affect in any material respect the
interests of any certificateholder, as evidenced by an opinion of
counsel; and
o the 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,
(4) if a REMIC election has been made for the related trust, to modify,
eliminate or add to any of its provisions
o to the extent necessary or desirable to maintain the qualification of
the trust as a REMIC or to avoid or minimize the risk of imposition of
any tax on the related trust, provided that the trustee has received an
opinion of counsel to the effect that:
o the action is necessary or desirable to maintain the qualification or
to avoid or minimize that risk, and
o the action will not adversely affect in any material respect the
interests of any certificateholder covered by the pooling and
servicing agreement, or
o to restrict the transfer of the REMIC residual certificates, provided
that:
o 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
o that the amendment will not give rise to any tax on the transfer of
the REMIC residual certificates to a non-permitted transferee,
(5) to make any other provisions as to matters or questions arising under the
pooling and servicing agreement or any other change, provided that the
action will not adversely affect in any material respect the interests of
any certificateholder, or
(6) to amend specified provisions that are not material to holders of any
class of offered certificates.
Unless more specifically described in the related prospectus supplement,
the parties to a pooling and servicing agreement may amend it with the consent
of the holders of
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certificates of each class affected thereby evidencing, in each case, 66% or
more of the aggregate percentage interests constituting that class. The
amendment may be for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of that pooling and servicing
agreement or of modifying in any manner the rights of the certificateholders
covered by that pooling and servicing agreement, except that the amendment may
not:
o reduce in any manner the amount of, or delay the timing of, payments
received on mortgage loans that are required to be distributed on a
certificate of any class without the consent of the holder of that
certificate; or
o reduce the percentage of certificates of any class the holders of which
are required to consent to the amendment without the consent of the
holders of all certificates of that class covered by that pooling and
servicing agreement then outstanding.
Notwithstanding the foregoing, if a REMIC election has been made for the
related trust, 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 the amendment or the exercise of any power granted
to the master servicer, the depositor, the trustee or any other specified
person in accordance with the amendment will not result in the imposition of a
tax on the related trust or cause the trust 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. The
trustee 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 under the related pooling and
servicing agreement, a trustee will be required to examine those documents and
to determine whether they conform to the requirements of the agreement.
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MATTERS REGARDING THE TRUSTEE
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.
Unless more specifically described 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 that 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. Indemnification, however, 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 under the agreement, or by reason of its reckless
disregard of those obligations or duties.
Unless more specifically described 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 its duties under the agreement either directly or by or through
agents or attorneys.
RESIGNATION AND REMOVAL OF THE TRUSTEE
The trustee may resign at any time. The depositor will then be obligated
to appoint a successor trustee. The depositor may also remove the trustee and
appoint a successor trustee if the trustee ceases to be eligible to continue as
trustee under the pooling and servicing agreement or if the trustee becomes
insolvent. The holders of certificates evidencing 51% or more of the aggregate
undivided interests, or, if so specified in the related prospectus supplement,
voting rights, in the related trust may remove the trustee at any time. 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.
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DESCRIPTION OF CREDIT SUPPORT
Credit support may be provided for one or more classes of the certificates
of any series, or for the related mortgage assets. Credit support may be in the
form of:
o a letter of credit,
o the subordination of one or more classes of certificates,
o the use of a pool insurance policy or guarantee insurance,
o the establishment of one or more reserve funds,
o another method of credit support described in the related prospectus
supplement, or
o any combination of these.
To the extent provided in the related prospectus supplement, any of the
forms of credit support may provide credit enhancement for one or more classes
or series.
Unless more specifically described 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 that
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 the credit support, it is possible that the holders of
offered certificates of one or more series will be disproportionately benefited
by the credit support to the detriment of the holders of offered certificates
of one or more other series.
If credit support is provided for one or more classes of certificates of a
series, or for the related mortgage assets, the related prospectus supplement
will include a description of:
o the nature and amount of coverage under the credit support,
o any conditions to payment thereunder not otherwise described in this
prospectus,
o the conditions, if any, under which the amount of coverage under the credit
support may be reduced and under which the credit support may be terminated
or replaced, and
o the material provisions relating to the credit support.
The related prospectus supplement will provide information regarding the
obligor, if any, under any instrument of credit support. See "Risk
Factors--Credit support is limited."
SUBORDINATE CERTIFICATES
One or more classes of certificates of a series may be subordinate to one
or more other classes of certificates in entitlement to distributions on the
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
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distribution date will be subordinated to the corresponding rights of the
holders of classes that are senior in entitlement. If so provided in the
related prospectus supplement, the subordination of a class may apply only if
specific types of losses or shortfalls occur. The related prospectus supplement
will provide 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 the subordination will be available.
If the mortgage assets in any trust 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 before distributions on subordinate certificates evidencing
interests in a different group of mortgage assets within the trust. The
prospectus supplement for a series that includes a cross-support provision will
describe the manner and conditions for applying those provisions.
INSURANCE OR GUARANTEES FOR MORTGAGE LOANS
Mortgage loans included in a trust may be covered for some default risks
by insurance policies or guarantees. The related prospectus supplement will
describe the nature of the default risks and the extent of any coverage.
LETTER OF CREDIT
Deficiencies in amounts otherwise payable on certificates in a series or
classes may be covered by one or more letters of credit, issued by a bank or
other financial institution. 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.
The letter of credit may permit draws only if specific types of losses and
shortfalls occur. 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 a
series of certificates will expire at the earlier of the date specified in the
related prospectus supplement or the termination of the trust.
CERTIFICATE INSURANCE AND SURETY BONDS
Deficiencies in amounts otherwise payable on certificates in a series or
classes may be covered by insurance policies or surety bonds provided by one or
more insurance companies or sureties. Those instruments may cover, for 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 provided 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 instrument.
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RESERVE FUNDS
Deficiencies in amounts otherwise payable on certificates in a series or
classes may 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 the related prospectus supplement. The reserve fund for a series
may also be funded over time by a specified amount of some 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. Reserve funds may be established to provide protection
only against specific 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.
Amounts deposited in any reserve fund may be invested in permitted
investments. Unless more specifically described in the related prospectus
supplement, any reinvestment income or other gain from those investments will
be credited to the related reserve fund for that series, and any loss resulting
from those investments will be charged to that reserve fund. However, the
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 unless we tell you otherwise in
the related prospectus supplement.
CREDIT SUPPORT FOR MBS
Any MBS included in the related trust or the related underlying mortgage
loans or both may be covered by one or more of the types of credit support
described in this prospectus. The related prospectus supplement will specify,
as to each form of credit support, the information indicated above for each
type of credit support, to the extent that information is material and
available.
LEGAL ASPECTS OF MORTGAGE LOANS
The following discussion contains general summaries of some legal aspects
of loans secured by commercial and multifamily residential properties. Because
these 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--Mortgage Loans." For purposes of the following discussion, mortgage loan
includes a mortgage loan underlying an MBS.
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 collectively
referred to as mortgages in this prospectus. A
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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 may depend on:
o the terms of the mortgage,
o the terms of separate subordination agreements or intercreditor agreements
with others that hold interests in the real property,
o the knowledge of the parties to the mortgage, and
o the order of recordation of the mortgage in the appropriate public recording
office.
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 that is the borrower and
usually the owner of the subject property and a mortgagee that is the lender.
In contrast, a deed of trust is a three-party instrument, among a trustor that
is the equivalent of a borrower, a trustee to whom the real property is
conveyed, and a beneficiary that is 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 typically 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, under which the borrower,
or grantor, conveys title to the real property to the grantee, or lender,
typically with a power of sale, until the debt is repaid. If the borrower is a
land trust, there is 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. The land trustee is not 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, 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 may be accompanied by a separate assignment
of rents and leases, under which the borrower assigns to the lender the
borrower's right, title and interest as landlord under each lease and the
income derived therefrom, while, unless rents are to be paid directly to the
lender, retaining a revocable license to collect the rents for so long as there
is no default. If the borrower defaults, the license terminates and the lender
is entitled to collect the rents. Local law may require that the lender take
possession of the property or obtain a court-appointed receiver or both before
becoming entitled to collect the rents.
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In most states, hotel and motel room rates are considered accounts
receivable under the Uniform Commercial Code; in cases where hotels or motels
constitute loan security, the rates are usually pledged by the borrower as
additional security for the loan. In general, the lender must file financing
statements to perfect its security interest in the room rates and must file
continuation statements, usually every five years, to maintain perfection of
the security interest. Mortgage loans secured by hotels or motels may be
included in a trust 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 usually be required to commence a foreclosure
action or otherwise take possession of the property 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 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. Adequate protection may take
the form of 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 some 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 usually must file UCC financing
statements to perfect its security interest therein, and must file continuation
statements, usually every five years, to maintain that perfection. Mortgage
loans secured in part by personal property may be included in a trust even if
the security interest in the personal property was not perfected or the
requisite UCC filings were allowed to lapse.
FORECLOSURE
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 under 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.
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Judicial Foreclosure.
A judicial foreclosure proceeding is conducted in a court having
jurisdiction over the mortgaged property. Typically, the action is initiated by
the service of legal pleadings upon all parties having a subordinate interest
of record in the real property and all parties in possession of the property,
under leases or otherwise, whose interests are subordinate to the mortgage.
Delays in completion of the foreclosure may occasionally result from
difficulties in locating defendants. When the lender's right to foreclose is
contested, the legal proceedings can be time-consuming. Upon successful
completion of a judicial foreclosure proceeding, the court typically 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. Sales are made in accordance with procedures that vary
from state to state.
Equitable and Other Limitations on Enforceability of Provisions.
United States courts have traditionally imposed general equitable
principles to limit the remedies available to lenders in foreclosure actions.
These principles are designed to relieve borrowers from the effects of mortgage
defaults perceived as harsh or unfair. Relying on these 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 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 before a foreclosure sale.
Non-Judicial Foreclosure/Power of Sale.
In states permitting non-judicial foreclosure proceedings, foreclosure of
a deed of trust is typically accomplished by a non-judicial trustee's sale
under 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 typically 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, before the sale, the trustee
under the deed of
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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. Typically,
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 to preserve its right to seek a deficiency judgment if it is
available under state law and under the terms of the mortgage loan documents.
The mortgage loans, however, are expected to be non-recourse. See "Risk
Factors--Investment in commercial and multifamily mortgage loans is riskier
than investment in single-family mortgage loans."
Thereafter, subject to the borrower's right in some states to remain in
possession during a redemption period, the lender will become the owner of the
property and have both the benefits and burdens of ownership, including the
obligation to pay debt service on any senior mortgages, to pay taxes, to obtain
casualty insurance and to make 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 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
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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 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 under 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
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 other states, the lender has the
option of bringing a personal action against the borrower on the debt without
first exhausting that security; however, in some of those states, the lender,
following judgment on the 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 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
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that might result from bidding at below-market values at the foreclosure sale,
limit any deficiency judgment to the excess of the outstanding debt over the
fair market value of the property at the time of the sale.
Leasehold Considerations.
Mortgage loans may be secured by a mortgage on the borrower's leasehold
interest in a ground lease. Leasehold mortgage loans are subject to 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
other protective provisions typically included in a mortgageable ground lease.
Some mortgage loans, however, may be secured by ground leases which do not
contain these provisions.
Cross-Collateralization.
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 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 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
the 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 the junior lien.
Under the Bankruptcy Code, if specific 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 some
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, under a confirmed plan
or lien avoidance proceeding, thus leaving the lender a general unsecured
creditor for the difference between that 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 or an
alteration of the repayment schedule or both, with or without affecting the
unpaid principal
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balance of the loan, 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 arrearage 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 before 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 some states until the lender has taken some further action,
such as commencing foreclosure or obtaining a receiver before activation of the
assignment of rents.
If a borrower's ability to make payment on a mortgage loan is dependent on
its receipt of rent payments under a lease of the related property, that
ability may be impaired by the commencement of a bankruptcy case relating to a
lessee under the 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 before the filing of the
lessee's petition. In addition, the Bankruptcy Code provides that a trustee or
debtor-in-possession may, subject to approval of the court,
o assume the lease and retain it or assign it to a third party, or
o 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. These 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 as 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.
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:
o 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
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o 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.
ENVIRONMENTAL CONSIDERATIONS
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.
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. 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, that 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 a "superlien."
CERCLA.
The federal Comprehensive Environmental Response, Compensation and
Liability Act of 1980 or 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 the mortgaged property or the operations of
the borrower. 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, 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
or the Act amended, among other things, the provisions of CERCLA for 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
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assumes day-to-day management of all operational functions of the mortgaged
property. The Act also provides that a lender will continue to have the benefit
of the secured creditor exemption even if it forecloses on a mortgaged
property, purchases it at a foreclosure sale or accepts a deed-in-lieu of
foreclosure provided that the lender seeks to sell the mortgaged property at
the earliest practicable commercially reasonable time on commercially
reasonable terms.
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 or 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 before 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 those 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 those costs could become a liability of the
trust and result in a loss to certificateholders.
To reduce the likelihood of a loss, unless we tell you otherwise 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."
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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.
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 to prospective buyers,
including prospective buyers at a foreclosure sale or following foreclosure.
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 before the issuance of the related certificates.
Environmental site assessments, however, vary considerably in their content,
quality and cost. Even when adhering to good professional practices,
environmental consultants will sometimes not detect significant environmental
problems because to do an exhaustive environmental assessment would be far too
costly and time-consuming to be practical.
DUE-ON-SALE AND DUE-ON-ENCUMBRANCE
Some 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 those clauses in many states.
However, the Garn-St Germain depository Institutions Act of 1982 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 some limitations as provided 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 some 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 the 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
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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
either or both of the senior loan and 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 or
condition prepayments upon the borrower's payment of prepayment fees or yield
maintenance penalties or both. In some states, there are or may be specific
limitations upon the late charges which a lender may collect from a borrower
for delinquent payments. Some 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 provides that state usury limitations do not apply to some types of
residential, including multifamily, first mortgage loans originated by
specified 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. Some states have taken action to reimpose
interest rate limits or to limit discount points or other charges or both.
No mortgage loan originated in any state in which application of Title V
has been expressly rejected or a provision limiting discount points or other
charges has been adopted, will, if originated after that rejection or adoption,
be eligible for inclusion in a trust unless:
o the mortgage loan provides for the interest rate, discount points and
charges as are permitted in that state, or
o the mortgage loan provides that its terms are to be construed in accordance
with the laws of another state under which the interest rate, discount
points and charges would not be usurious and the borrower's counsel has
rendered an opinion that the 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, a
borrower who enters military service after the origination of the borrower's
mortgage loan, including a borrower who was in reserve status and is called to
active duty after
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origination of the mortgage loan, may not be charged interest, including fees
and charges, above an annual rate of 6% during the period of the 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 affected 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 we tell you
otherwise in the related prospectus supplement, any form of credit support
provided in connection with the 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 some circumstances, during
an additional three month period thereafter.
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FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of the material federal income tax consequences
of the purchase, ownership and disposition of offered certificates. The summary
is based on current provisions of the Internal Revenue Code of 1986, called the
Code, as well as Treasury regulations and administrative and judicial rulings
and practice. The current tax laws and regulations, rulings and court decisions
may be changed, possibly retroactively. Any of these changes could alter or
modify the validity of the statements and conclusions set forth below. This
summary does not address all federal income tax matters that may be relevant to
particular holders. For example, it does not address all relevant tax
consequences to investors subject to special rules under the federal income tax
laws, such as
o banks,
o insurance companies,
o tax-exempt organizations,
o electing large partnerships,
o dealers in securities or currencies,
o mutual funds,
o REITs,
o RICs,
o S corporations,
o estates and trusts,
o investors that hold the certificates as part of a hedge, straddle,
integrated or conversion transaction, or
o holders whose "functional currency" is not the United States dollar.
Additionally, this summary is addressed only to original purchasers of the
certificates who are United States investors, and who hold the certificates as
capital assets within the meaning of Section 1221 of the Code. 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. We recommend that you consult your own tax advisers about the
federal, state, local, or other tax consequences of the purchase, ownership and
disposition of the certificates.
The master servicer or the trustee may elect to have a trust, or a portion
of the trust, treated as a "real estate mortgage investment conduit", called a
REMIC under Sections 860A through 860G of the Code, referred to in this summary
as the REMIC Provisions. Beneficial ownership interests in a trust that has
made a REMIC election are referred to in this summary as REMIC certificates,
and are divided into regular interests, called REMIC regular certificates and
residual interests, called REMIC residual certificates. The prospectus
supplement for each series of certificates will indicate whether a REMIC
election(s) will be made for the related trust and, if an election is to be
made, will identify all regular interests and residual interests in the
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REMIC. If a REMIC election will not be made for a trust, the federal income tax
consequences of the purchase, ownership and disposition of the related
certificates will be provided in the related prospectus supplement. In the
following summary, references to a certificateholder or a holder are to the
beneficial owner of a certificate.
The following discussion applies only to offered certificates. Further,
this discussion applies only if the mortgage assets held by a trust consisting
solely of mortgage loans. If other mortgage assets, including REMIC
certificates and mortgage pass-through certificates, are to be held by a trust,
the tax consequences of the inclusion of these 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, the tax consequences
associated with these cash flow agreements also will be disclosed in the
related prospectus supplement. See "Description of the Trust--Cash Flow
Agreements."
Additionally, the following discussion is based in part upon the rules
governing original issue discount, called "OID", that are provided in Sections
1271-1273 and 1275 of the Code and in the Treasury regulations issued
thereunder, called the "OID Regulations," and in part upon the "REMIC
Provisions" and the Treasury regulations issued thereunder, called the "REMIC
Regulations." The OID Regulations do not adequately address some issues
relevant to, and in some instances provide that they are not applicable to,
securities like the certificates.
REMICS
Classification of REMICs.
Upon the issuance of each series of REMIC certificates, counsel to the
depositor will deliver its opinion that, assuming compliance with all
provisions of the related pooling and servicing agreement, the related trust,
or each applicable portion of the trust, will qualify as a REMIC and the REMIC
certificates issued by the REMIC will be considered to evidence ownership of
REMIC regular certificates or REMIC residual certificates in that REMIC within
the meaning of the REMIC Provisions.
If an entity electing to be treated as a REMIC fails to comply with one or
more of the requirements for REMIC status during any taxable year, the entity
will not be treated as a REMIC for that year or for any following year. If the
electing entity is not a REMIC, the 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
if there is an inadvertent termination of REMIC status, these regulations have
not been issued. If relief is provided, it may be accompanied by sanctions,
including the imposition of a corporate tax on all or a portion of the trust's
income for the period in which the requirements for REMIC status are not
satisfied. The pooling and servicing agreement related to each REMIC will
include provisions designed to maintain the trust's status as a REMIC under the
REMIC Provisions. It is not anticipated that the status of any trust as a REMIC
will be inadvertently terminated.
Tiered REMIC Structures.
For some series of REMIC Certificates, two or more separate elections may
be made to treat portions of the trust as REMICs, called "Tiered REMICs," for
federal
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income tax purposes. Upon the issuance of any series of REMIC Certificates
representing an interest in a Tiered REMIC, counsel to the depositor will
deliver its opinion 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.
Except as otherwise stated in this discussion, the certificates of each
series that constitute regular interests in a REMIC, called 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. Further, if you are a holder of a REMIC regular certificate, and
you otherwise report income under a cash method of accounting, you will be
required to report income for REMIC regular certificates under an accrual
method.
Original Issue Discount. Some REMIC regular certificates may be issued
with OID, within the meaning of Section 1273(a) of the Code. If you hold REMIC
regular certificates issued with OID, you will generally be required to include
OID in income as it accrues, under the method described below, in advance of
the receipt of the cash on that income. In addition, the Code provides special
rules for REMIC regular certificates and other debt instruments issued with
OID. Regulations have not been issued under these rules.
The Code requires that a prepayment assumption be used for mortgage loans
held by a REMIC in computing the accrual of OID on REMIC regular certificates
issued by that REMIC, and that adjustments be made in the amount and rate of
accrual of the OID 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, called the committee report, indicates that the regulations
will provide that the prepayment assumption used for a REMIC regular
certificate must be the same as that used in pricing the initial offering of
the REMIC regular certificate. The prepayment assumption used in reporting OID
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 OID, 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
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 class of REMIC regular certificates is sold for cash on
or before the date of their initial issuance, the closing date, the issue price
for that class will be the fair market value of that class on the closing date.
Under
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Code provisions and the OID Regulations, the stated redemption price of a REMIC
regular certificate is equal to the total of all payments to be made on the
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 the
REMIC regular certificate.
In the case of REMIC regular certificates with adjustable interest rates,
the determination of the total amount of OID and the timing of the inclusion of
that OID will vary according to the characteristics of the REMIC regular
certificates. If the OID rules apply to the certificates, the related
prospectus supplement will describe the manner in which the OID rules will be
applied to those certificates in preparing information returns for the
certificateholders and the IRS.
Some classes of the REMIC regular certificates may provide for the first
interest payment on those certificates to be made more than one month after the
date of issuance, a longer period than the remaining monthly intervals between
interest payments. Assuming the accrual period defined below for OID 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 OID. Because interest on REMIC regular
certificates must 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 for a period that begins before the closing date, a portion of
the purchase price paid for a REMIC regular certificate will reflect this
accrued interest. If the purchase price includes this accrued interest,
information returns provided to you and to the IRS will be based on the
position that the portion of the purchase price paid for the interest accrued
for periods before the closing date is part of the overall cost of the 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 the REMIC regular certificate. However, the OID
Regulations state that all or some portion of this 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 this election could
be made unilaterally by a certificateholder.
OID 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. The weighted average life
of the REMIC regular certificate is computed as the sum of the amounts
determined, for payment included in the stated redemption price of the REMIC
regular certificate, by multiplying
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o the number of complete years, rounding down for partial years, from the
issue date until the payment is expected to be made, presumably taking into
account the prepayment assumption, by
o 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 the
REMIC regular certificate.
Under the OID Regulations, OID of only a de minimis amount, other than de
minimis OID 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 this de minimis
OID and a fraction, the numerator of which is the amount of the principal
payment and the denominator of which is the outstanding stated principal amount
of the REMIC regular certificate. The OID Regulations also permit you to elect
to accrue de minimis OID into income currently based on a constant yield
method. See "--Market Discount" for a description of this election under the
OID Regulations.
If OID on a REMIC regular certificate is in excess of a de minimis amount,
you must include in ordinary gross income the sum of the daily portions of OID
for each day during your taxable year that you held the 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 OID will be determined as described in the next two paragraphs.
As to each accrual period, meaning, 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 accrual period, begins on
the closing date, a calculation will be made of the portion of the OID that
accrued during the accrual period. The portion of OID that accrues in any
accrual period will equal the excess, if any, of
o the sum of
o 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
o the distributions made on the REMIC regular certificate during the
accrual period of amounts included in the stated redemption price, over
o the adjusted issue price of the 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:
o 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
o using a discount rate equal to the original yield to maturity of the
certificate.
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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 the certificate, increased by the aggregate
amount of OID that accrued for the certificate in prior accrual periods, and
reduced by the amount of any distributions made on the REMIC regular
certificate in prior accrual periods of amounts included in the state
redemption price. The OID 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 OID for each day.
A subsequent purchaser of a REMIC regular certificate that purchases the
certificate at a cost, excluding any portion of the 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 OID for the certificate. However, each daily portion will be reduced, if
the cost is in excess of its "adjusted issue price," in proportion to the ratio
this excess bears to the aggregate OID remaining to be accrued on the REMIC
regular certificate. The adjusted issue price of a REMIC regular certificate on
any given day equals the sum of:
o the adjusted issue price, or, in the case of the first accrual period, the
issue price, of the certificate at the beginning of the accrual period
which includes that day, and
o the daily portions of OID for all days during the accrual period before that
day, less
o any payments other than qualified stated interest payments made during the
accrual period before that day.
If the method for computing original issue discount results in a negative
amount for any period with respect to a certificateholder, the amount of
original issue discount allocable to that period would be zero and the
certificateholder will be permitted to offset that negative amount only against
future original issue discount (if any) attributable to the certificates.
Market Discount. If you purchase a REMIC regular certificate at a market
discount, meaning, in the case of a REMIC regular certificate issued without
OID, at a purchase price less than its remaining stated principal amount, or in
the case of a REMIC regular certificate issued with OID, at a purchase price
less than its adjusted issue price, you will recognize gain upon receipt of
each distribution representing stated redemption price. In particular, under
Section 1276 of the Code you will generally be required to allocate the portion
of each distribution representing stated redemption price first to accrued
market discount not previously included in income, and to recognize ordinary
income to that extent. You may elect to include market discount in income
currently as it accrues rather than including it on a deferred basis as
prescribed in the preceding sentence. If made, this election will apply to all
market discount bonds acquired by you on or after the first day of the first
taxable year to which the election applies. In addition, the OID Regulations
permit you to elect to accrue all interest, discount, including de minimis
market discount or OID, and premium in income as interest, based on a constant
yield method. If this election were made for a REMIC
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regular certificate with market discount, you would be deemed to have made an
election to include market discount in income currently for all other debt
instruments having market discount that you acquire during the taxable year of
the election or any following year. Similarly, if you made this election for a
certificate that is acquired at a premium, you would be deemed to have made an
election to amortize bond premium for all debt instruments having amortizable
bond premium that you own or acquire. See "--Premium" below. Each of these
elections to accrue interest, discount and premium for a certificate on a
constant yield method or as interest may not be revoked without the consent of
the IRS.
However, the market discount on a REMIC regular certificate will be
considered de minimis for purposes of Section 1276 of the Code if the market
discount is less than 0.25% of the remaining stated redemption price of the
REMIC regular certificate multiplied by the number of complete years to
maturity after the date of its purchase. Under a similar rule regarding OID on
obligations payable in installments, the OID Regulations refer to the weighted
average maturity of obligations, and it is likely that the same rule would
apply for market discount, presumably taking into account the prepayment
assumption. If market discount is treated as de minimis under this rule, it
appears that the discount would be treated in a manner similar to de minimis
OID. See "--Original Issue Discount" above. This treatment may result in the
inclusion of discount in income more slowly than discount would be included in
income using the method described above.
Section 1276(b)(3) of the Code authorizes the Treasury Department to issue
regulations providing the method for accruing market discount on debt
instruments with principal payable in installments. Until regulations are
issued, 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 your option:
o on the basis of a constant yield method,
o in the case of a REMIC regular certificate issued without OID, 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
o in the case of a REMIC regular certificate issued with OID, in an amount
that bears the same ratio to the total remaining market discount as the OID
accrued in the accrual period bears to the total OID remaining on the REMIC
regular certificate at the beginning of the accrual period.
Further, the prepayment assumption used in calculating the accrual of OID
is also used in calculating the accrual of market discount. Because the
regulations described in this paragraph have not been issued, it is not
possible to predict what effect these regulations might have on the tax
treatment of a REMIC regular certificate purchased at a discount in the
secondary market.
The effect of these rules on REMIC regular certificates which provide for
monthly or other periodic distributions throughout their term may be to require
market discount
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to be included in income at a rate that is not significantly slower than the
rate at which the discount would accrue if it were OID. In any event, you will
generally be required to treat a portion of any gain on the sale or exchange of
the certificate as ordinary income equal to the amount of the market discount
accrued to the date of disposition under one of the methods described above,
less any accrued market discount previously reported as ordinary income.
Further, under Section 1277 of the Code you may be required to defer a
portion of your 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 deferred interest expense would not exceed
the market discount that accrues during the taxable year and is, in general,
allowed as a deduction not later than the year in which the market discount is
includible in income. If you elect to include market discount in income
currently as it accrues on all market discount instruments you acquire in that
taxable year or thereafter, the interest deferral rule described above will not
apply.
Premium. A REMIC regular certificate purchased at a cost, excluding any
amount attributable to accrued qualified stated interest, greater than its
remaining stated redemption price will be considered to be purchased at a
premium. In this event, you may elect under Section 171 of the Code to amortize
the premium under the constant yield method over the life of the certificate.
If made, the election will apply to all debt instruments with amortizable bond
premium that you own or subsequently acquire. Amortizable premium will be
treated as an offset to interest income on the related debt instrument, and not
as a separate interest deduction. The OID Regulations also permit you to elect
to include all interest, discount and premium in income based on a constant
yield method, further treating you as having made the election to amortize
premium generally. See "--Market Discount" above. The committee report states
that the same rules that apply to accrual of market discount, which require use
of a prepayment assumption in accruing market discount on REMIC Regular
Certificates without regard to whether the certificates have OID, 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 the 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 the 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 OID for the 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 of
these reductions ultimately will not be recoverable. As a result, the amount of
taxable income reported in any period by the
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holder of a REMIC regular certificate could exceed the amount of economic
income actually realized by the holder in the 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
as to the timing and character of this loss or reduction in income.
Taxation of Owners of REMIC Residual Certificates.
The certificates of each series that constitute the residual interests in
a REMIC, called 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.
As a holder of a REMIC residual certificate, you will generally be
required to report your 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 you owned the 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 that 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."
If you purchased your REMIC residual certificate from a prior holder of
the certificate, you will also be required to report on your federal income tax
return amounts representing your daily share of the taxable income, or net
loss, of the REMIC for each day that you hold the 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 its REMIC residual certificate from a prior
holder of the certificate at a price greater than, or less than, the adjusted
basis defined below, such REMIC residual certificate would have had in the
hands of an original holder of the certificate. The REMIC Regulations, however,
do not provide for these modifications.
Any payments received by you in connection with the acquisition of the
REMIC residual certificate will be taken into account in determining your
income for federal income tax purposes. Although it appears likely that any of
these payments would be
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includible in income immediately upon its receipt, the IRS might assert that
the 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 these payments, holders of REMIC residual
certificates should consult their tax advisors concerning the treatment of
these payments for income tax purposes.
The amount of income you will be required to report, or the tax liability
associated with this income, may exceed the amount of cash distributions
received from the REMIC for the corresponding period. Consequently, you should
have other sources of funds sufficient to pay any federal income taxes due as a
result of your 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 you may exceed the cash distributions received by
you for the corresponding period may significantly adversely affect your
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 OID, and reduced by any premium on issuance, on the REMIC
regular certificates, and on 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 on 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. That 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 by this prospectus will be determined in the manner described above
under "--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 the 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 the interests 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 OID income and market discount income on mortgage loans
that it holds will be equivalent to the method for accruing OID income for
holders of REMIC regular certificates, that is, under the constant yield method
taking into account the prepayment assumption. However, a REMIC that acquires
loans at a market discount must include the 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
discount income that is analogous to that required to be used by a REMIC
holding mortgage loans with market discount.
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A mortgage loan will be deemed to have been acquired with discount, or
premium, to the extent that the REMIC's basis in the mortgage loan, determined
as described in the preceding paragraph, is less than, or greater than, its
stated redemption price. Any discount will be includible in the income of the
REMIC as it accrues, in advance of receipt of the cash attributable to that
income, under a method similar to the method described above for accruing OID
on the REMIC regular certificates. It is anticipated that each REMIC will elect
to amortize any premium on the mortgage loans. Premium on any mortgage loan to
which an election applies may be amortized under a constant yield method,
presumably taking into account a prepayment assumption. Further, an election
would not apply to any mortgage loan originated on or before September 27,
1985. Instead, premium on these mortgage loans should be allocated among the
principal payments on those loans and be deducted by the REMIC as those
payments become due or upon the prepayment of the mortgage loan.
A REMIC will be allowed deductions for interest, including OID, on the
REMIC regular certificates, and including any other class of REMIC certificates
constituting regular interests in the REMIC not offered by this prospectus,
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 by this prospectus, were
indebtedness of the REMIC. OID will be considered to accrue for this purpose as
described above under "--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 by this prospectus described in that section will not
apply.
If a class of REMIC regular certificates is issued at a price in excess of
the stated redemption price of that class, with this excess being called issue
premium, the net amount of interest deductions that are allowed the REMIC in
each taxable year on the REMIC regular certificates of that 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 OID
described above under "--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 these 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 of these 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, this excess will be the
net loss for the REMIC for that calendar quarter.
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Basis Rules, Net Losses and Distributions. The adjusted basis of a REMIC
residual certificate will be equal to the amount paid for the REMIC residual
certificate, increased by amounts included in your income with respect to a
REMIC residual certificate and decreased, but not below zero, by distributions
made, and by net losses allocated, to you.
You will not be allowed to take into account any net loss for any calendar
quarter in the amount that the net loss exceeds your adjusted basis in your
REMIC residual certificate as of the close of the calendar quarter, determined
without regard to the 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. Your ability to deduct net
losses may be subject to additional limitations under the Code. You should
consult your tax advisor about these limitations.
Any distribution on a REMIC residual certificate will be treated as a
non-taxable return of capital to the extent it does not exceed your adjusted
basis in the REMIC residual certificate. To the extent a distribution on a
REMIC residual certificate exceeds its adjusted basis, it will be treated as
gain from the sale of the REMIC residual certificate. You may be entitled to
distributions early in the term of a REMIC in which you own certain REMIC
residual certificates under circumstances in which your bases in the REMIC
residual certificates will not be sufficiently large that the distributions
will be treated as non-taxable returns of capital. Your bases in the REMIC
residual certificates will initially equal the amount paid for the REMIC
residual certificates and will be increased by your allocable shares of taxable
income of the REMIC. However, these bases increases may not occur until the end
of the calendar quarter, or perhaps the end of the calendar year, for which the
REMIC taxable income is allocated to you. To the extent your initial bases are
less than the distributions to you, and increases in your initial bases either
occur after the distributions or, together with your initial bases, are less
than the amount of the distributions, gain will be recognized to you on the
distributions and will be treated as gain from the sale of your REMIC residual
certificates.
The effect of these rules is that you may not amortize your basis in a
REMIC residual certificate, but may only recover your basis through
distributions, through the deduction of any net losses of the REMIC or upon the
sale of your 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 to reflect any difference between the cost of the REMIC
residual certificate to the REMIC residual certificateholder and the adjusted
basis the REMIC residual certificate would have in the hands of an original
holder see "--Taxation of Owners of REMIC Residual Certificates" above.
Excess Inclusions. Any excess inclusions for a REMIC residual certificate
will be subject to federal income tax in all events.
In general, the excess inclusions for a REMIC residual certificate for any
calendar quarter will be the excess, if any, of the daily portions of REMIC
taxable income
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allocable to the REMIC residual certificate over the sum of the daily accruals
for each day during the quarter that the REMIC residual certificate was held by
you. Your daily accruals will be determined by allocating to each day during a
calendar quarter your 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 its issue price
increased by the sum of the daily accruals for all prior quarters and
decreased, but not below zero, by any distributions on the REMIC residual
certificate before the beginning of the quarter. The issue price of a REMIC
residual certificate is the initial offering price to the public, excluding
bond houses and brokers, at which a substantial amount of the REMIC residual
certificates were sold. The "long-term Federal rate" is an average of current
yields on Treasury securities with a remaining term of greater than nine years,
computed and published monthly by the IRS. Although it has not done so, the
Treasury has authority to issue regulations that would treat the entire amount
of income accruing on a REMIC residual certificate as an excess inclusion if
the REMIC residual certificates are considered not to have "significant value."
For REMIC residual certificateholders, excess inclusions:
o will not be permitted to be offset by deductions, losses or loss carryovers
from other activities,
o will be treated as unrelated business taxable income to an otherwise
tax-exempt organization, and
o will not be eligible for any rate reduction or exemption under any
applicable tax treaty as 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.
Additionally, for purposes of the alternative minimum tax, excess
inclusions will not be permitted to be offset by the alternative tax net
operating loss deduction, and alternative minimum taxable income (which, for
this specific purpose is determined without regard to the special rule that
taxable income cannot be less than excess inclusions) 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, called a REIT, the aggregate excess inclusions for those
REMIC residual certificates, reduced, but not below zero, by the REIT 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 the REIT in
proportion to the dividends received by those shareholders from the REIT, and
any amount so allocated will be treated as an excess inclusion on a REMIC
residual certificate as if held directly by the shareholder. Treasury
regulations yet to be issued could apply a similar rule to regulated investment
companies, common trust and some cooperatives; the REMIC Regulations currently
do not address this subject.
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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."
Recently proposed regulations (which would apply retroactively) would amend a
safe harbor for determining whether such a significant purpose existed with
respect to a transfer of a residual interest. This regulation would now
require, in very general terms, that the present value of the amounts received
by the transferee (from the transferor) and from holding the residual interest
(including the present value of the resulting tax benefits) at least equal the
present value of the tax liabilities arising from holding the residual
interest. If a transfer is disregarded, the purported transferor will continue
to remain liable for any taxes due on the income on a 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:
o 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 on the REMIC
residual certificate, and 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
o the transferor reasonably expects that the transferee will receive
distributions on 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 restrictions under
the terms of the related pooling and servicing agreement that are intended to
reduce the possibility of any transfer being disregarded. These restrictions
will require each party to a transfer to provide an affidavit that no purpose
of the transfer is to impede the assessment or collection of tax, including
representations as to the financial condition of the prospective transferee. In
this regard, the transferor is also required to make a reasonable investigation
to determine the transferee's historic payment of its debts and ability to
continue to pay its debts as they come due in the future. Before purchasing a
REMIC residual certificate, prospective purchasers should consider the
possibility that a purported transfer of a REMIC residual certificate by the
purchaser to another purchaser at some future date may be disregarded in
accordance with these rules, resulting in the retention of tax liability by the
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
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" below
for additional restrictions on transfers of REMIC residual certificates to
foreign persons.
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Mark-to-Market Rules. On December 23, 1996, the IRS released final
regulations called 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,
unless 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 REMIC
residual certificates of that REMIC. The applicable Treasury regulations
indicate, however, that as to a REMIC that is similar to a single class grantor
trust, all or a portion of those fees and expenses should be allocated to the
holders of the REMIC regular certificates. Unless otherwise stated in the
related prospectus supplement, these fees and expenses will be allocated to
holders of the REMIC residual certificates in their entirety and not to the
holders of the REMIC regular certificates.
For holders of REMIC residual certificates or REMIC regular certificates
that receive an allocation of fees and expenses in accordance with the
preceding discussion and that is an individual, estate or trust, or a
"pass-through entity" beneficially owned by one or more individuals, estates or
trusts, an amount equal to the individual's, estate's or trust's share of the
fees and expenses will be added to the gross income of the holder, and the
individual's, estate's or trust's share of the fees and expenses will be
treated as a miscellaneous itemized deduction allowable subject to the
limitation of Section 67 of the Code, which permits these deductions only to
the extent they exceed in the aggregate two percent of a taxpayer's adjusted
gross income. In addition, itemized deductions are further restricted by other
sections of the Code. The amount of additional taxable income reportable by
REMIC certificateholders that are subject to the limitations of either Section
67 or other sections of the Code may be substantial. In addition, in
determining the alternative minimum taxable income of 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 that holder's allocable portion of servicing fees and other
miscellaneous itemized deductions of the REMIC, even though an amount equal to
the amount of those fees and other deductions will be included in the holder's
gross income. Accordingly, these 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. Any of these
investors should consult with their tax advisors before making an investment in
the certificates.
Sales of REMIC Certificates. If you sell a REMIC certificate, you will
recognize gain or loss equal to the difference between the amount realized on
the sale and your adjusted basis in the REMIC certificate. The adjusted basis
of a REMIC regular certificate generally will equal your cost for the REMIC
regular certificate, increased by income on the REMIC regular certificate
reported by you, including original issue discount and market discount income,
and reduced, but not below zero, by distributions on the REMIC regular
certificate received by you and by any amortized premium. The adjusted basis of
a REMIC residual certificate will be determined as described under
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"--Basis Rules, Net Losses and Distributions." Except as provided in the
following four paragraphs, any gain or loss from a sale will be capital gain or
loss, provided the REMIC certificate is held as a capital asset within the
meaning of Section 1221 of the Code. Generally, you will receive long-term
capital gain treatment on the sale of a REMIC regular certificate if you have
held the certificate for at least 12 months.
Gain from the sale of a REMIC regular certificate that might otherwise be
capital gain will be treated as ordinary income in the amount by which the gain
does not exceed the excess, if any, of the amount that would have been
includible in your income with respect to the REMIC regular certificate
assuming that income had accrued thereon at a rate equal to 110% of the
applicable Federal rate determined as of the date of purchase of the REMIC
regular certificate, over the amount of ordinary income actually includible in
your income before the sale. In addition, gain recognized on the sale of a
REMIC regular certificate that you purchased at a market discount will be
taxable as ordinary income in an amount not exceeding the portion of the
discount that accrued during the period you held the REMIC certificate, reduced
by any market discount included in income under the rules described above under
"--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 that section
applies will be ordinary income or loss.
Except as may be provided in Treasury regulations yet to be issued, if you
sell and reacquire a REMIC residual certificate, or you acquire any other
residual interest in a REMIC (and possibly a FASIT) 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 that sale, the sale will be subject to the "wash sale" rules of Section 1091
of the Code. In that event, any loss you realize on the sale will not be
deductible, but instead will be added to your 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"
called a prohibited transactions tax. In general, subject to specified
exceptions, a prohibited transaction includes the disposition of a mortgage
loan, the receipt of income from a source other than a mortgage loan or 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, some 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, called a
contributions tax. Each pooling and servicing agreement will include provisions
designed to prevent the acceptance of any contributions that would be subject
to this 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
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REITs. Net income from foreclosure property generally includes 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 REIT. The pooling and servicing agreement provides that a special
servicer shall cause or permit to be earned with respect to any REO property
any "net income from foreclosure property" that is subject to tax by reason of
the REMIC provisions only if it has determined that the earning of such income
on a net after-tax basis could reasonably be expected to result in a greater
recovery on behalf of the certificateholders than an alternative method of
operation or rental of such property that would not be subject to such a 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 person has sufficient assets to do so, and
provided further that the tax arises out of a breach of that person's
obligations under the related pooling and servicing agreement and in respect of
compliance with applicable laws and regulations. Any tax not borne by a master
servicer, special servicer, manager or trustee will be charged against the
related trust 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 equal to the product of:
o the present value, discounted using the applicable Federal rate, computed
and published monthly by the IRS, for obligations whose term ends on the
close of the last quarter in which excess inclusions are expected to accrue
on the REMIC residual certificate, of the total anticipated excess
inclusions for the REMIC residual certificate for periods after the
transfer, and
o 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 the transfer, the prepayment assumption and any
required or permitted clean up calls or required liquidation provided for in
the REMIC's organizational documents. If imposed, this tax generally would be
imposed on the transferor of the REMIC residual certificate, except that where
the transfer is through an agent for a disqualified organization, the tax would
instead be imposed on the agent. However, a transferor of a REMIC residual
certificate would in no event be liable for this tax on 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 the affidavit is false. Further, an entity
will not qualify as a REMIC unless there are reasonable arrangements designed
to ensure that residual
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interests in the entity are not held by disqualified organizations and
information necessary for the application of the tax described in this
paragraph will be made available. Restrictions on the transfer of REMIC
residual certificates and other provisions 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 includes in income excess inclusions
with respect to a REMIC residual certificate, and a disqualified organization
is the record holder of an interest in that entity, then a tax will be imposed
on that entity equal to the product of:
o the amount of excess inclusions on the REMIC residual certificate that are
allocable to the interest in the pass-through entity held by the
disqualified organization, and
o 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 the pass-through entity
furnishes to the pass-through entity the holder's social security number and a
statement under penalties of perjury that social security number is that of the
record holder or a statement under penalties of perjury that the record holder
is not a disqualified organization. For taxable years beginning after December
31, 1997, notwithstanding the preceding two sentences, in the case of a REMIC
residual certificate held by an "electing large partnership," all interests in
such partnership shall be treated as held by disqualified organizations
(without regard to whether the record holders of the partnership furnish
statements described in the preceding sentence) and the amount that is subject
to tax under the preceding paragraph is excluded from the gross income of the
partnership allocated to the partners (in lieu of allocating to the partners a
deduction for such tax paid by the partners).
For these purposes, a disqualified organization means:
o the United States, any State or political subdivision of the United States,
any foreign government, any international organization, or any agency or
instrumentality of the entities just listed, but would not include
instrumentalities described in Section 168(h)(2)(D) of the Code or the
Federal Home Loan Mortgage Corporation,
o 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
o any organization described in Section 1381(a)(2)(C) of the Code.
For these purposes, a pass-through entity means any regulated investment
company, REIT, trust, partnership or 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 be treated as a
pass-through entity for these purposes.
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
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treated as a payment in retirement of a debt instrument. If the last
distribution on a REMIC residual certificate is less than the REMIC residual
certificateholder's adjusted basis in the certificate, the REMIC residual
certificateholder should, but may not, be treated as realizing a loss equal to
the amount of the difference, and the loss may be treated as a capital loss.
Reporting and Other Administrative Matters. For purposes of the
administrative provisions of the Code only, 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 for the REMIC.
As the tax matters person, the trustee or the master servicer, subject to
notice requirements and various restrictions and limitations, generally will
have the authority to act on behalf of the REMIC and on behalf of you for any
administrative and judicial review of items of income, deduction, gain or loss
of the REMIC, as well as the REMIC's classification. You will generally be
required to report these REMIC items consistently with their treatment on the
REMIC's tax return and you may in some circumstances be bound by a settlement
agreement between the trustee or the master servicer, as tax matters person,
and the IRS concerning any REMIC item. Adjustments made to the REMIC tax return
may require you to make corresponding adjustments on your return, and an audit
of the REMIC's tax return, or the adjustments resulting from an audit, could
result in an audit of your return. No REMIC will be registered as a tax shelter
under 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 that person and other
information.
Reporting of interest income, including any OID, on any 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 some other non-individuals will be provided interest and OID income
information and the information provided 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 OID to disclose on its face the amount of OID and the
issue date, and requiring this information to be reported to the IRS. Reporting
for 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
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of each accrual period. In addition, the reports will include information
required by regulations for computing the accrual of any market discount.
Because exact computation of the accrual of market discount on a constant yield
method would require information about the holder's purchase price that the
REMIC may not have, the regulations only require that information about the
appropriate method of accruing market discount be provided. See "--Market
Discount."
Unless we tell you otherwise in the related prospectus supplement, the
responsibility for complying with the reporting rules discussed above 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 a backup withholding tax at a
rate of 31% if you fail to furnish to the payor information, including your
taxpayer identification numbers, or otherwise fail to establish an exemption
from this tax. Any amounts deducted and withheld from a distribution to you
would be allowed as a credit against your federal income tax. Penalties may be
imposed on you by the IRS if you fail to supply required information in the
proper manner. We advise you to consult your tax advisors about the backup
withholding tax rules, including your eligibility for, and the procedure for
obtaining, exemption from this tax.
Foreign Investors in REMIC Certificates.
A REMIC regular certificateholder that is not a "United States Person" 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 on a
distribution on a REMIC regular certificate, provided that the holder complies
with identification requirements, including delivery of a statement, signed by
the certificateholder under penalties of perjury, certifying that the
Certificateholder is not a United States Person and providing the name and
address of the certificateholder. For these purposes, "United States Person"
means:
o a citizen or resident of the United States,
o a corporation, partnership or other entity treated as a corporation or
a partnership created or organized in, or under the laws of, the United
States or any political subdivision of the United States,
o an estate whose income is subject to United States income tax
regardless of its source, or
o 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 persons have the authority to control all substantial decisions
of the trust.
It is possible that the IRS may assert that the tax exemption discussed
above should not apply 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
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certificates. If the holder does not qualify for exemption, distributions of
interest, including distributions in respect of accrued OID, to the holder may
be subject to a tax rate of 30%, unless reduced by an applicable tax treaty.
In addition, these rules will not apply to exempt a United States
shareholder of a controlled foreign corporation from taxation on the United
States shareholder's allocable portion of the interest income received by the
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 TRUSTS
Classification of Grantor Trusts.
Counsel to the depositor will deliver its opinion upon issuance of each
series of grantor trust certificates, to the effect that, assuming compliance
with all provisions of the related pooling and servicing agreement, the related
grantor trust 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.
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, 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, net of normal
administration fees, and interest paid to the holders of grantor trust
fractional interest certificates 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.
Taxation of Owners of Grantor Trust Fractional Interest Certificates.
As a holder of a grantor trust fractional interest certificate, you will
generally be required to report on your federal income tax return your share of
the entire income from the mortgage loans and will be entitled to deduct your
share of any reasonable servicing fees and other expenses. Because of stripped
interests, market discount, OID, or premium, the amount includible in income on
a grantor trust fractional interest certificate may differ significantly from
the amount distributable on that certificate from 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 reasonable servicing fees
and
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expenses only in the amount of the holder's aggregate miscellaneous itemized
deductions less two percent of the holder's adjusted gross income. In addition,
itemized deductions are further restricted by other sections of the Code. 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 other sections 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 the
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, fees and
expenses should be allocated among the classes of grantor trust certificates
using a method that recognizes that each class of certificates benefits from
the services. In the absence of statutory or administrative clarification as to
the method to be used, it is currently intended to base information returns or
reports to the IRS and certificateholders on a method that allocates expenses
among classes of grantor trust certificates for each period based on the
distributions made to each 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 a class of grantor trust
strip certificates is issued as part of the same series of certificates or the
depositor or any of its affiliates retains 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. The IRS has established safe harbors for purposes of
determining what constitutes reasonable servicing fees for various types of
mortgages. The servicing fees paid for servicing of the mortgage loans for some
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 OID, subject, however, to the discussion below regarding the
treatment of some stripped bonds as market discount bonds and the discussion
regarding de minimis market discount. See "--Market Discount" below. Under the
stripped bond rules, you will be required to report interest income from your
grantor trust fractional interest certificate for each month in an amount equal
to the income that accrues on the certificate in that month calculated under a
constant yield method, in accordance with the rules of the Code relating to
OID.
The OID on a grantor trust fractional interest certificate will be the
excess of the certificate's stated redemption price over its issue price. The
issue price of a grantor trust fractional interest certificate will be equal to
the price you paid for 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 the certificate, other
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than qualified stated interest, if any, as well as the certificate's share of
reasonable servicing fees and other expenses. See "--If Stripped Bond Rules Do
Not Apply" for a definition of qualified stated interest. In general, the
amount of income that accrues in any month would equal the product of your
adjusted basis in the grantor trust fractional interest certificate at the
beginning of the month (see "--Sales of Grantor Trust Certificates" below) and
your yield on the grantor trust fractional interest certificate. The yield
would be computed as the rate, compounded based on the regular interval between
payment dates, that, if used to discount your share of future payments on the
mortgage loans, would cause the present value of those future payments to equal
your price for the certificate. In computing yield under the stripped bond
rules, your share of future payments on the mortgage loans will not include any
payments made on 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 your share of any reasonable servicing
fees and other expenses.
Section 1272(a)(6) of the Code requires the use of a reasonable prepayment
assumption in accruing OID and adjustments in the accrual of OID when
prepayments do not conform to the prepayment assumption, for some categories of
debt instruments. Such categories include any pool of debt instruments the
yield on which may be affected by reason of prepayments. Accordingly, it
appears that Section 1272(a)(6) would apply to the certificates. It is unclear
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 at the time of purchase of the grantor trust fractional interest certificate
by each specific holder. You are advised to consult your tax advisor about OID
in general and, in particular, how a prepayment assumption should be used in
reporting OID 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 that
certificate, the use of a prepayment assumption generally would not have any
significant effect on the yield used in calculating accruals of interest
income. However, for a grantor trust fractional interest certificate acquired
at a discount or premium, the use of a reasonable prepayment assumption would
increase or decrease the yield, and thus accelerate or decelerate,
respectively, the reporting of income.
When a mortgage loan prepays in full, 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 OID on REMIC regular
certificates. See "--REMICs--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
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prepay at a rate conforming to the prepayment assumption or any other rate and
you should be aware that the use of a representative initial offering price
will mean that information returns or reports, even if otherwise accepted as
accurate by the IRS, will be accurate only as to the initial certificateholders
of each series who bought at that price.
Under Treasury regulation Section 1.1286-1(b), some stripped bonds are to
be treated as market discount bonds and, accordingly, any purchaser of these
bonds is to account for any discount on the bond as market discount rather than
OID. 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:
o there is no OID, or only a de minimis amount of OID, or
o the annual stated rate of interest payable on the stripped 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.
The related prospectus supplement will disclose whether 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. If the
OID 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 this OID or market discount will be considered de minimis. OID or
market discount of only a de minimis amount will be included in income in the
same manner as de minimis OID and market discount described in "--If Stripped
Bond Rules Do Not Apply" and "--Market Discount" below.
If Stripped Bond Rules Do Not Apply. Subject to the discussion below on
OID, if the stripped bond rules do not apply to a grantor trust fractional
interest certificate, you will be required to report your share of the interest
income on the mortgage loans in accordance with your normal method of
accounting.
Recently enacted amendments to Section 1272(a)(6) of the Code require the
use of a prepayment assumption in determining the existence and accrual of
original issue discount associated with pools of debt instruments whose yield
may be affected by prepayments. No regulations have been issued interpreting
the application of this provision to securities such as the grantor trust
fractional interest certificates nor do the committee reports prepared by those
Congressional committees that examined such provision in the course of its
enactment provide guidance as to its intended application to such securities.
In the absence of such guidance, various interpretations are possible. For
example, the provision could be interpreted as requiring the pool of mortgage
loans underlying the grantor trust fractional interest certificates to be
segregated into two subpools consisting respectively of those mortgage loans
that had original issue discount upon their origination and those mortgage
loans that did not have original issue discount upon their origination. If so
interpreted, you would be required to report your share of the interest income
on the mortgage loans in the non-OID pool in accordance with your normal method
of accounting and, to the extent that the portion of your purchase price for
such certificates properly allocable to your interest in the non-OID pool were
less
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than its share of the aggregate principal amount of the mortgage loans in the
non-OID pool, you would be subject to the market discount rules described above
under "REMICs--Market Discount" or below, under "--Market Discount." In that
event, you would be required to treat the portion of your certificate
representing an interest in the OID pool as a single debt instrument issued on
the closing date with original issue discount equal to its pro rata share of
the aggregate of the unaccrued original issue discount on the mortgage loans in
the OID pool as of such date and subject to the rules for reporting original
issue discount described under "REMICs--Original Issue Discount." To the extent
that the portion of your purchase price for your certificate properly allocable
to the OID pool represented a discount greater than your pro rata share of the
aggregate original issue discount on the mortgage loans in the OID pool, you
would be subject to the market discount rules described above under "REMICs--
Market Discount."
Alternatively, a grantor trust fractional interest certificate could be
treated as a single debt instrument issued on the closing date and subject to
the rules described under "REMICs--Original Issue Discount" and "--Market
Discount." Other interpretations of the application of the original issue
discount rules to grantor trust fractional interest certificates are possible.
You are urged to consult your tax advisor concerning the application and effect
of such rules on your investment in such certificates.
The trustee 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.
The determination as to whether OID will be considered to be de minimis
will be calculated using the same test as in the REMIC discussion. See
"--REMICs--Original Issue Discount" above.
In the case of mortgage loans with adjustable or variable interest rates,
the related prospectus supplement will describe the manner that the OID rules
will be applied to those mortgage loans by the trustee or master servicer, in
preparing information returns to you and to the IRS.
If OID is in excess of a de minimis amount, all OID 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 the yield on prepayable obligations
issued with OID. In the absence of statutory or administrative clarification,
it currently is not intended to base information reports or returns to you and
to the IRS on the use of a prepayment assumption in transactions not subject to
the stripped bond rules. However, a prepayment assumption may be required for
computing yield on all mortgage-backed securities. You are advised to consult
your own tax advisors about the use of a prepayment assumption in reporting OID
on grantor trust fractional interest certificates. The prospectus supplement
for each series will specify whether and in what manner the OID rules will
apply to mortgage loans in each series.
If you purchased a grantor trust fractional interest certificate at a cost
less than the certificate's allocable portion of the aggregate remaining stated
redemption price of the
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mortgage loans held in the related trust, you will also be required to include
in gross income the certificate's daily portions of any OID on the mortgage
loans. However, each daily portion will be reduced, if your cost for the
grantor trust fractional interest certificate is in excess of the certificate's
allocable portion of the aggregate adjusted issue prices of the mortgage loans
held in the related trust, approximately in proportion to the ratio the excess
bears to the certificate's allocable portion of the aggregate OID remaining to
be accrued on the mortgage loans. The adjusted issue price of a mortgage loan
on any given day equals the sum of:
o the adjusted issue price, or, in the case of the first accrual period, the
issue price, of that mortgage loan at the beginning of the accrual period
that includes that day, and
o the daily portions of OID for all days during the accrual period before that
day.
The adjusted issue price of a mortgage loan at the beginning of any
accrual period will equal the issue price of that mortgage loan, increased by
the aggregate amount of OID on that mortgage loan that accrued in prior accrual
periods, and reduced by the amount of any payments made on that 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, will provide to any holder of a grantor trust
fractional interest certificate any information as the holder may reasonably
request from time to time about OID accruing on grantor trust fractional
interest certificates. See "--Grantor Trust Reporting" below.
Market Discount. If the stripped bond rules do not apply to the grantor
trust fractional interest certificate, you may be subject to the market
discount rules of the Code. The amendment to Section 1272(a)(6) of the Code
described under "--If Stripped Bond Rules Do Not Apply" above, could be
interpreted as requiring the use of a prepayment assumption in connection with
the determination, accrual and inclusion in income of market discount. If such
a requirement were applicable, a grantor trust fractional interest certificate
would probably be treated as a single aggregate debt instrument to which the
rules described under "REMICs--Market Discount" would apply. Alternatively, if
the requirement of a prepayment assumption were not applicable, the rules
described in the succeeding paragraphs of this section would be applicable
either on a mortgage loan-by-mortgage loan basis or on such a basis with
respect to the non-OID pool and on an aggregate basis with respect to the OID
pool. Other interpretations of the effect of the amendment to Section
1272(a)(6) on the determination and accrual of market discount are possible.
You are advised to consult your tax advisor concerning the application of the
market discount rules to grantor trust fractional interest certificates.
If a prepayment assumption generally is not required in the application of
the market discount rules to pools of debt instruments, a grantor trust
fractional interest certificate may be subject to the market discount rules to
the extent an interest in a mortgage loan is considered to have been purchased
at a market discount, that is, for a mortgage loan issued without OID, at a
purchase price less than its remaining stated redemption price, or for a
mortgage loan issued with OID, at a purchase price less than its adjusted issue
price. If market discount is in excess of a de minimis amount, you will
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generally be required to include in income in each month the amount of discount
that has accrued through that month that has not previously been included in
income, but limited, in the case of the portion of that discount that is
allocable to any mortgage loan, to the payment of stated redemption price on
the mortgage loan that is received by, or, for accrual basis
certificateholders, due to, the trust in that month. You 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 you rather than including it on a
deferred basis in accordance with this paragraph under rules similar to those
described in "--REMICs--Market Discount" above.
The Treasury Department is authorized to issue regulations on the method
for accruing market discount on debt instruments, the principal of which is
payable in installments. Until regulations are issued, 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:
o on the basis of a constant yield method,
o in the case of a mortgage loan issued without OID, in an amount that bears
the same ratio to the total remaining market discount as the stated
interest paid in the accrual period bears to the total stated interest
remaining to be paid on the mortgage loan as of the beginning of the
accrual period, or
o in the case of a mortgage loan issued with OID, in an amount that bears the
same ratio to the total remaining market discount as the OID accrued in the
accrual period bears to the total OID remaining at the beginning of the
accrual period.
The prepayment assumption, if any, used in calculating the accrual of OID
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 discount
income. Because the regulations referred to in this paragraph have not been
issued, it is not possible to predict what effect these 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, any discount may be required to be included in income at a
rate that is not significantly slower than the rate at which the discount would
be included in income if it were OID.
Market discount on mortgage loans considered to be de minimis will be
includible in income under de minimis rules similar to those described in
"--REMICs--Original Issue Discount" above with the exception that it is unclear
whether a prepayment assumption will be used in the application of these rules
to the mortgage loans.
Further, under the rules described in "--REMICs--Market Discount," any
discount that is not OID 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 you are treated as acquiring the underlying mortgage loans at
a premium, that is, at a price in excess of their remaining stated redemption
price, you
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may elect to amortize using a constant yield method the portion of the 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 these payments are made, or, for a certificateholder using the
accrual method of accounting, when these payments are due.
It is unclear whether a prepayment assumption should be used in computing
amortization of premium. If premium is not subject to amortization using a
prepayment assumption and a mortgage loan prepays in full, if you hold a
grantor trust fractional interest certificate acquired at a premium, you 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 the premium, it
appears that this 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 OID on REMIC regular certificates. See "--REMICs--Original Issue Discount."
It is unclear whether any other adjustments would be required for 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 "--If Stripped
Bond Rules Apply," no regulations or published rulings under these rules have
been issued and some uncertainty exists as to how it will be applied to
securities like the grantor trust strip certificates. Accordingly, you should
consult your tax advisor about the method for reporting income or loss on
grantor trust strip certificates.
The OID Regulations do not apply to stripped coupons, although they
provide general guidance as to how the OID sections of the Code will be
applied. In addition, the discussion below is subject to the discussion under
"--Possible Application of 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 OID will be required to
be accrued in each month on the grantor trust strip certificates based on a
constant yield method. In effect, you would include as interest income in each
month an amount equal to the product of your adjusted basis in the grantor
trust strip certificate at the beginning of the month and the yield of the
grantor trust strip certificate to you. This yield would be calculated based on
the price you paid for that grantor trust strip certificate and the payments
remaining to be made on the certificate at the time of the purchase, plus an
allocable portion of the servicing fees and expenses to be paid on the mortgage
loans. See "--Taxation of Owners of Grantor Trust Fractional Interest
Certificates--If Stripped Bond Rules Apply" above.
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As noted above, the Code requires that a prepayment assumption be used in
computing the accrual of OID on debt instruments the yield on which may be
affected by reason of prepayment, and that adjustments be made in the amount
and rate of accrual of this OID when prepayments do not conform to the
prepayment assumption. Accordingly, it appears that Section 1272(a)(6) would
apply to the grantor trust strip certificates. It is also unclear 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, at the time of
purchase of the grantor trust strip certificate by each specific 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 to you 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 you should be aware that the use of a
representative initial offering price will mean that information returns or
reports, even if otherwise accepted as accurate by the IRS, will be accurate
only as to the initial certificateholders of each series who bought at that
price. You should consult your tax advisor 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 you. 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 on the 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,
then when a mortgage loan is prepaid, you 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 the prepaid mortgage loan.
Possible Application of Contingent Payment Rules. The contingent payment
rules do not apply to any debt instrument that is subject to Section
1272(a)(6). As noted above in "--If Stripped Bond Rules Apply," Section
1272(a)(6) applies to any pool of debt instruments the yield on which may be
affected by reason of prepayments. Section 1272(a)(6) also applies to any debt
instrument if payments under such debt instrument may be accelerated by reason
of prepayments of other obligations securing such debt instrument. Accordingly,
it appears that the contingent payment rules will not apply to the grantor
trust strip certificates.
If the contingent payment rules under the OID Regulations were to apply,
the issuer of a grantor trust strip certificate would determine a projected
payment schedule with respect to such grantor trust strip certificate. You
would be bound by the issuer's projected payment schedule, which would consist
of all noncontingent payments and a projected amount for each contingent
payment based on the projected yield (as described below) of the grantor trust
strip certificate. The projected amount of each
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payment would be determined so that the projected payment schedule reflected
the projected yield reasonably expected to be received by the holder of a
grantor trust strip certificate. The projected yield referred to above would be
a reasonable rate, not less than the "applicable Federal rate" that, as of the
issue date, reflected general market conditions, the credit quality of the
issuer, and the terms and conditions of the mortgage loans. You 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, and would add to, or subtract from, such
income any variation between the payment actually received in such month and
the payment originally projected to be made in such month. In addition, income
that might otherwise be capital gain may be recharacterized as ordinary income.
You should consult your tax advisor concerning the possible application of
the contingent payment rules to the grantor trust strip certificates.
Sales of Grantor Trust Certificates.
Except as provided below, any gain or loss recognized on the sale or
exchange of a grantor trust certificate (equal to the difference between the
amount realized on the sale or exchange of a grantor trust certificate and its
adjusted basis) will be capital gain or loss if you hold the grantor trust
certificate as a capital asset. The adjusted basis of a grantor trust
certificate generally will equal its cost, increased by any income you reported
on the grantor trust certificate, including OID and market discount income, and
reduced, but not below zero, by any previously reported losses, any amortized
premium and by any distributions on the grantor trust certificate. Capital
losses may not, in general, be offset against ordinary income.
Gain or loss from the sale of a grantor trust certificate may be partially
or wholly ordinary and not capital in some 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. In addition, if the contingent payment rules
applied, certain income realized upon the sale of a certificate may be
characterized as ordinary.
Finally, a taxpayer may elect to have net capital gain taxed at ordinary
income rates rather than capital gains rates to include the net capital gain in
total net investment income for that taxable year. A taxpayer would make this
election 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 will furnish to you with each distribution a
statement setting forth the amount of the distribution allocable to principal
and to interest at the related pass-through rate on the underlying mortgage
loans. In addition, the trustee or master servicer will furnish, within a
reasonable time after the end of each calendar year, to you provided you held a
grantor trust certificate at any time during the year, information regarding
the amount of servicing compensation received by the master servicer, the
special servicer or any sub-servicer, and other customary factual information
as the
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depositor or the reporting party deems necessary or desirable to enable you to
prepare your 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 on the grantor trust certificates are uncertain, there is no
assurance the IRS will agree with the trustee's or master servicer's,
information reports of these items of income and expense. Additionally, the
information reports, even if otherwise accepted as accurate by the IRS, will be
accurate only as to the initial certificateholders that bought their
certificates at the initial offering price used in preparing the 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 that discussion,
only if the related mortgage loans were originated after July 18, 1984.
If the 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, the 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 "Federal
Income Tax Consequences," you 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, you
should consult your own tax advisors about the various tax consequences of
investments in the offered certificates.
ERISA CONSIDERATIONS
The Employee Retirement Income Security Act of 1974 or "ERISA" and the
Code impose requirements on employee benefit plans and on other retirement
plans and arrangements, including individual retirement accounts and annuities,
Keogh plans and some entities in which the plans have invested, such as
collective investment funds, insurance company separate accounts, and some
insurance company general accounts. We refer to the plans collectively, as
"benefit plans." In addition, ERISA imposes duties on persons who are
fiduciaries of plans subject to ERISA in connection with the investment of plan
assets. Governmental plans and some church plans are not subject to ERISA
requirements but are subject to the provisions of other applicable federal and
state law which may be substantially similar to ERISA and the Code.
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ERISA imposes on plan fiduciaries general fiduciary requirements,
including those of investment prudence and diversification and the requirement
that a benefit plan's investments be made in accordance with the documents
governing the benefit plan. In addition, Section 406 of ERISA and Section 4975
of the Code prohibit a broad range of transactions involving assets of a
benefit plan and persons called "parties in interest," who have specified
relationships to the benefit plan. Unless an exemption is available, a benefit
plan's purchase or holding of a certificate may 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 benefit plan. If a party in interest participates in a
prohibited transaction that is not exempt, it may be subject to excise tax and
other liabilities under ERISA and the Code.
PLAN ASSET REGULATIONS
If a benefit plan purchases offered certificates, the underlying mortgage
loans, MBS and other assets included in the related trust may be deemed "plan
assets" of that benefit plan. A regulation of the United States Department of
Labor or "DOL" at 29 C.F.R. Section 2510.3-101 provides that when a benefit
plan acquires an equity interest in an entity, the plan's assets include both
the equity interest and an undivided interest in each of the underlying assets
of the entity, unless some exceptions not applicable here apply, or unless the
equity participation in the entity by "benefit plan investors," i.e., benefit
plans and some employee benefit plans not subject to ERISA or the Code, is not
"significant," both as defined in the regulation. Equity participation in a
trust 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 benefit plan assets, and any person who provides
investment advice with respect to benefit plan assets for a fee, is a fiduciary
of the investing benefit plan. If the mortgage loans, MBS and other assets
included in a trust constitute benefit 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 of those
parties may be deemed to be a plan "fiduciary" and may be subject to the
fiduciary responsibility and 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 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, may result in a prohibited transaction
under ERISA or Section 4975 of the Code.
PROHIBITED TRANSACTION EXEMPTION
On March 29, 1994, the DOL issued an individual exemption (Prohibited
Transaction Exemption 94-29, 59 FR 14675) to certain of the depositor's
affiliates, which was amended by another exemption dated July 21, 1997
(Prohibited Transaction Exemption 97-34, 62 FR 39021). We refer to these two
exemptions, together, as the "exemption." The exemption provides relief from
the prohibited transaction provisions of Section 406 of ERISA, and the excise
taxes imposed on those prohibited transactions
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under Sections 4975(a) and (b) of the Code, for certain transactions, among
others, relating to the servicing and operation of mortgage pools and the
purchase, sale and holding of mortgage pass-through certificates or
certificates denominated as debt instruments that represent interests in a
REMIC under Section 860D of the Code issued by a trust, if:
(1) the depositor, or an affiliate, is the sponsor and an 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 selling or placement agent,
or
(2) the depositor or an affiliate is the sole underwriter or a manager or
co-manager of the underwriting syndicate or a selling or placement agent,
provided that conditions provided in the exemption are satisfied.
The prospectus supplement for each series will indicate whether the
exemption is available for the relevant underwriter.
Each transaction involving the purchase, sale and holding of the offered
certificates must satisfy the following six general conditions before it will
be eligible for relief under the exemption:
o 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.
o the offered certificates must evidence rights and interests that are not
subordinated to the rights and interests evidenced by the other
certificates of the same trust.
o 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, a division of The McGraw-Hill
Companies, Inc., Moody's Investors Service, Inc., or Fitch.
o 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, any mortgagor with respect to the
assets constituting the related trust constituting more than 5% of the
aggregate unamortized principal balance of the trust assets in the related
trust as of the date of initial issuance of the certificates, and their
affiliates.
o 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
under the assignment of the trust assets to the related trust must
represent not more than the fair market value of these 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 the person's services under the related
pooling and servicing agreement and reimbursement of that person's
reasonable expenses in connection therewith.
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o the investing benefit plan must be an accredited investor as defined in Rule
501(a)(1) of Regulation D under the Securities Act.
The exemption also requires that each trust meet the following
requirements:
o the corpus of the trust must consist solely of assets of the type that have
been included in other investment pools;
o certificates in 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 before the acquisition of certificates by or with assets
of a plan; and
o certificates in other investment pools must have been purchased by investors
other than plans for at least one year before any acquisition of
certificates by or with assets of a plan.
In addition, the exemption requires that the corpus of the trust consist
solely of some types of assets, including mortgage obligations such as those in
the trusts and property which had secured those obligations. However, it is not
clear whether some certificates that may be offered by this prospectus would
constitute "certificates" for purposes of the exemption, including but not
limited to:
o certificates evidencing an interest in mortgage loans secured by liens on
real estate projects under construction,
o certificates evidencing an interest in a trust including equity
participations,
o certificates evidencing an interest in a trust including cash flow
agreements,
o subordinated classes of certificates or "non-exempt certificates," or
o certificates evidencing mortgages containing "defeasance" provisions under
which a borrower may release a mortgaged property from the lien of the
mortgage by substituting treasury securities as collateral.
In promulgating the exemption, the DOL did not consider interests in pools
of the exact nature described in this paragraph.
If you are a fiduciary or other investor using plan assets of a benefit
plan, and you are contemplating purchasing an offered certificate, you must
make your own determination that the general conditions set forth above will be
satisfied with respect to your purchase.
If the general conditions of the exemption are satisfied, the exemption
may provide relief 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 benefit plan. However, no exemption is
provided from the restrictions of Sections 406(a)(1)(E), 406(a)(2) and 407 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 that excluded plan. For purposes of
the certificates, an excluded plan is a benefit plan sponsored by any member of
the restricted group.
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If specific conditions of the exemption are also satisfied, the exemption
may provide relief 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 the direct
or indirect sale, exchange or transfer of certificates in the initial issuance
of certificates between the depositor or an underwriter and a benefit plan when
the fiduciary of that benefit plan is also a mortgagor, only if, among other
requirements,
o the fiduciary, or its affiliate, is a mortgagor with respect to 5% or less
of the fair market value of the trust assets and is otherwise not a member
of the restricted group;
o a benefit plan's investment in offered certificates does not exceed 25% of
all of the offered certificates outstanding at the time of the acquisition;
o immediately after the acquisition, no more than 25% of the assets of the
benefit plan are invested in certificates representing an interest in
trusts, including the relevant trust, containing assets sold or serviced by
the master servicer; and
o in the case of the acquisition of the offered certificates in connection
with their initial issuance, at least 50% of the offered certificates are
acquired by persons independent of the restricted group and at least 50% of
the aggregate interest in the trust is acquired by persons independent of
the restricted group.
Further, the exemption may provide relief 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. This relief requires that, in addition to the general
requirements described above, (a) transactions are carried out in accordance
with the terms of a binding pooling and servicing agreement and (b) the pooling
and servicing agreement is provided to, or described in all material respects
in the prospectus or private placement memorandum provided to, investing
benefit plans before their purchase of offered certificates issued by the
trust. The depositor expects these specific conditions will be satisfied with
respect to the certificates.
The exemption also may provide relief 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 restrictions would otherwise apply merely because a person is deemed
to be a party in interest, with respect to an investing plan by virtue of
providing services to the plan, or by virtue of having certain specified
relationships to that person, solely as a result of the plan's ownership of
certificates.
Before purchasing an offered certificate, if you are a fiduciary or other
investor of plan assets, you should confirm for yourself:
o that the certificates constitute "certificates" for purposes of the
exemption, and
o that the specific and general conditions required by the exemption and the
other requirements provided in the exemption are satisfied.
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REPRESENTATION FROM INVESTING PLANS
If you purchase, including by transfer, offered certificates with the
assets of one or more benefit plans in reliance on the exemption, you will be
deemed to represent that each of those benefit plans qualifies as an
"accredited investor" as defined in Rule 501(a)(1) of Regulation D under the
Securities Act. You may not purchase or hold the offered certificates with the
assets of a benefit plan unless those certificates are rated in one of the top
three rating categories by at least one rating agency at the time of purchase,
unless the benefit plan is an insurance company general account that represents
and warrants that it is eligible for, and meets all of the requirements of,
Sections I and III of Prohibited Transaction Class Exemption ("PTCE") 95-60,
which are described below.
The exemption does not provide relief for the purchase, sale or holding of
subordinate classes of offered certificates. The trustee will not register
transfers of subordinate classes of offered certificates to you if you are a
benefit plan, if you are acting on behalf of any benefit plan, or if you are
using plan assets to effect that acquisition unless you represent and warrant
that:
o the source of funds used to purchase those certificates is an "insurance
company general account" as that term is defined in PTCE 95-60, and
o that general account is eligible for, and satisfies all of the conditions of
Sections I and III of PTCE 95-60 as of the date of the acquisition of those
certificates.
In addition to making your own determination that exemptive relief is
available under the exemption, you should consider your general fiduciary
obligations under ERISA in determining whether to purchase any offered
certificates with assets of a benefit plan. You should also consider whether
other class exemptions granted by the DOL may provide relief from some of the
prohibited transaction provisions of ERISA and the related excise tax
provisions of Section 4975 of the Code. For example, Sections I and III of PTCE
95-60, regarding transactions by insurance company general accounts may provide
relief in some cases. Insurance company general accounts, should also consider
the possible impact of Section 401(c) of ERISA and the final regulations under
that section. 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 by that prospectus supplement.
If you are a fiduciary or other plan investor and you would like to
purchase offered certificates on behalf of or with assets of a plan, you should
consult with your counsel about whether ERISA and the Code impose restrictions
on the investment, and whether the exemption or any other prohibited
transaction exemption may provide relief from those restrictions. These
exemptions may not apply to your investment in the certificates. Even if an
exemption does apply, it may not apply to all prohibited transactions that may
occur in connection with an investment.
TAX EXEMPT INVESTORS
A "tax-exempt investor" or a plan that is exempt from federal income
taxation under Section 501 of the Code nonetheless will be subject to federal
income taxation to
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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
"Federal Income Tax Consequences--Excess Inclusions."
LEGAL INVESTMENT
If so specified in the related prospectus supplement, the offered
certificates will constitute "mortgage related securities" for purposes of the
Secondary Mortgage Market Enhancement Act of 1984 or 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.
Usually, only classes of offered certificates that:
o are rated in one of the two highest rating categories by one or more rating
agencies and
o are part of a series evidencing interests in a trust 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 some 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 under 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 before
October 3, 1991 that specifically limits the legal investment authority of any
such entities as to "mortgage related securities," offered certificates would
constitute legal investments for entities subject to that legislation only to
the extent provided in the legislation.
SMMEA also amended the legal investment authority of federally chartered
depository institutions as follows: federal savings and loan associations and
federal savings banks may invest in, sell or otherwise deal with "mortgage
related securities" without limitation as to the percentage of their assets
represented thereby, federal credit unions may invest in such securities, and
national banks may purchase such securities for their own account without
regard to the limitations generally applicable to investment securities
provided 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 the 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
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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 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 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,
before 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 or 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
"high-risk" mortgage derivative securities and limitations on the use of such
securities by insolvent, undercapitalized or otherwise "troubled" institutions.
According to the bulletin, "high-risk" mortgage derivative securities include
securities having certain specified characteristics, which may include some
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 some 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 investors either to
purchase some 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.
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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.
METHOD OF DISTRIBUTION
The certificates offered by this prospectus and by the related prospectus
supplements will be offered in series through one or more of the methods
described below. The prospectus supplement for each series will describe the
method of offering for that series and will state the net proceeds to the
depositor from the 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 the following methods:
o by negotiated firm commitment or best efforts underwriting and public
re-offering by underwriters;
o by placements by the depositor with institutional investors through dealers;
and
o by direct placements by the depositor with institutional investors.
In addition, 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 for those certificates or to one or more of its affiliates.
If underwriters are used in a sale of any offered certificates, other than
in connection with an underwriting on a best efforts basis, the 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. The
underwriters may be broker-dealers affiliated with the depositor whose
identities and relationships to the depositor will be as provided in the
related prospectus supplement. The depositor or the underwriters may sell
certificates to affiliates of the depositor. The related prospectus supplement
will identify those affiliates and the method or methods by which the
affiliates may resell those certificates. The managing underwriter or
underwriters for the offer and sale of offered certificates of a particular
series will be set forth on the cover of the prospectus supplement relating to
that series and the members of the underwriting syndicate, if any, will be
named in the 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 those certificates, and any
discounts or commissions received by them
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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.
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 conditions precedent, that the underwriters
will be obligated to purchase all of those 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
specified civil liabilities, including liabilities under the Securities Act, or
will contribute to payments required to be made in respect thereof.
The prospectus supplement for any series offered by placements through
dealers will contain information regarding the nature of the offering and any
agreements to be entered into between the depositor and purchasers of offered
certificates of that 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 the
purchases, be deemed to be "underwriters" within the meaning of the Securities
Act, in connection with reoffers and sales by them of offered certificates.
Holders of offered certificates should consult with their legal advisors in
this regard before any reoffer or sale.
If and to the extent required by applicable law or regulation, this
prospectus and the applicable prospectus supplement will also be used by Newman
and Associates, Inc., an affiliate of the depositor, after the completion of
the offering in connection with offers and sales related to market-making
transactions in the offered securities in which Newman and Associates, Inc. act
as principal. Sales will be made at negotiated prices determined at the time of
sales.
LEGAL MATTERS
Unless we tell you otherwise 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, New York, New York or Orrick, Herrington & Sutcliffe
LLP, New York, New York.
FINANCIAL INFORMATION
A new trust will be formed for each series of certificates, and no trust
will engage in any business activities or have any assets or obligations before
the issuance of the related series of certificates. Accordingly, no financial
statements for any trust 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.
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WHERE YOU CAN FIND ADDITIONAL INFORMATION
The depositor has filed a registration statement with the Commission
relating to the certificates. This prospectus is part of the registration
statement, but the registration statement includes additional information.
We will file with the Commission all required annual, monthly and special
Commission reports, as well as other information about the trusts.
You may read and copy any reports, statements or other information we file
at the Commission's Public Reference Room at 450 Fifth Street, N.W.,
Washington, D.C. 20549. You may obtain information on the operation of the
Public Reference Room by calling the Commission at 1-800-732-0330. You can also
request copies of these documents, upon payment of a duplicating fee, by
writing to the Commission. The Commission also maintains an Internet site that
contains reports, proxy and information statements, and other information
regarding issuers that file electronically with the Commission. The address of
the Commission's Internet site is www.sec.gov.
REPORTS TO CERTIFICATEHOLDERS
Monthly statements will be sent to you by the master servicer, manager or
trustee, as applicable. These statements will keep you informed about the trust
for your series of certificates. See "Description of the Certificates--Reports
to Certificateholders." These monthly reports will present financial
information that no independent certified public accountant will have examined.
INCORPORATION OF INFORMATION BY REFERENCE
The Commission allows us to "incorporate by reference" information we file
with it, which means that we can disclose important information to you by
referring you to documents which contain that information. Exhibits to these
documents may be omitted, unless the exhibits are specifically incorporated by
reference in the documents. Information incorporated in this prospectus by
reference is considered to be part of this prospectus. Certain information that
we will file with the Commission in the future will automatically update the
information in this prospectus. In all cases, you should rely on the later
information over different information included in this prospectus or the
prospectus supplement. We incorporate by reference any future annual, monthly
and special Commission reports filed by or on behalf of the trust until we
terminate our offering of the certificates. At your request, we will send you
copies of these documents and reports at no charge. Send your written request
to:
GMAC Commercial Mortgage Securities, Inc.
200 Witmer Road
Horsham, Pennsylvania 19044
(215) 328-3164
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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 of all collections on the underlying mortgage assets to
which the holders are entitled. These ratings address the structural, legal and
issuer-related aspects associated with the 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 the 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 the certificates or the
suitability of the 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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GLOSSARY
ACCRUED CERTIFICATE INTEREST--For each class of certificates, other than
some classes of stripped interest certificates and some 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 that class of certificates immediately
before that distribution date.
AVAILABLE DISTRIBUTION AMOUNT--As more specifically described 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 made by the servicer in lieu of those
payments on the mortgage assets and any other assets included in the related
trust that are available for distribution to the holders of certificates of
that series on that date.
DEBT SERVICE COVERAGE RATIO--Unless more specifically described in the
related prospectus supplement, the debt service coverage ratio means, for any
mortgage loan, or for a mortgage loan evidenced by one mortgage note, but
secured by multiple mortgaged properties,
o the Underwritten Cash Flow for the mortgaged property or mortgaged
properties, divided by
o the annual debt service for the mortgage loan.
EXCESS FUNDS--Unless we tell you otherwise in the related prospectus
supplement, Excess Funds will, generally, represent that portion of the amounts
distributable in respect of the certificates of any series on any distribution
date that represent
o interest received or advanced on the mortgage assets in the related trust
that is in excess of the interest currently accrued on the certificates of
that series, or
o prepayment premiums, payments from equity participations or any other
amounts received on the mortgage assets in the related trust that do not
constitute interest thereon or principal thereof.
LOAN-TO-VALUE RATIO--Unless more specifically described 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
o the then outstanding principal balance of the mortgage loan and any loans
senior to the mortgage loan that are secured by the related mortgaged
property; to
o the value of the related mortgaged property.
PREPAYMENT PERIOD--The Prepayment Period 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 must
be received to be distributed on a particular distribution date.
PURCHASE PRICE--The Purchase Price will be equal to either the unpaid
principal balance of the mortgage loan, together with accrued but unpaid
interest through a date on or about the date of purchase, or another price
specified in the related prospectus supplement.
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UNDERWRITTEN CASH FLOW--Underwritten Cash Flow for any mortgaged property
is an estimate of cash flow available for debt service in a typical year of
stable, normal operations. Unless more specifically described in the related
prospectus supplement, it is the estimated revenue derived from the use and
operation of the mortgaged property less the sum of
o estimated operating expenses, such as utilities, administrative expenses,
repairs and maintenance, management and franchise fees and advertising;
o fixed expenses, such as insurance, real estate taxes and, if applicable,
ground lease payments; and
o 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.
UNDIVIDED PERCENTAGE INTEREST--The Undivided Percentage Interest for an
offered certificate of a particular class will be equal to the percentage
obtained by dividing the initial principal balance or notional amount of the
certificate by the initial certificate balance or notional amount of that
class.
115
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"GMAC00C2.xls" is a Microsoft Excel*, Version 5.0 spreadsheet that
provides in electronic format certain information shown in Annex A to 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 "Annex A" and "MF Schedule," respectively.
----------
* Microsoft Excel is a registered trademark of Microsoft Corporation
<PAGE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
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 of Series 2000-C2 Transaction ........... S-5
Risk Factors .................................... S-16
Description of the Mortgage Assets .............. S-41
Servicing of the Mortgage Loans ................. S-66
Description of the Certificates ................. S-78
Yield and Maturity Considerations ............... S-98
Federal Income Tax Consequences ................. S-111
Method of Distribution .......................... S-113
Legal Matters ................................... S-115
Ratings ......................................... S-115
Legal Investment ................................ S-116
ERISA Considerations ............................ S-116
Glossary ........................................ S-118
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 Summary .............................. 3
Risk Factors .................................... 6
Description of the Trust ........................ 12
Yield and Maturity Considerations ............... 18
The Depositor ................................... 25
GMAC Commercial Mortgage Corporation ............ 26
Description of the Certificates ................. 26
The Pooling and Servicing Agreements ............ 36
Description of Credit Support ................... 57
Legal Aspects of Mortgage Loans ................. 59
Federal Income Tax Consequences ................. 72
State and Other Tax Consequences ................ 102
ERISA Considerations ............................ 102
Legal Investment ................................ 108
Use of Proceeds ................................. 110
Method of Distribution .......................... 110
Legal Matters ................................... 111
Financial Information ........................... 111
Where You Can Find Additional
Information .................................. 112
Reports to Certificateholders ................... 112
Incorporation of Information by Reference ....... 112
Rating .......................................... 113
Glossary ........................................ 114
</TABLE>
<PAGE>
$698,318,000
(Approximate)
GMAC COMMERCIAL
MORTGAGE SECURITIES, INC.
MORTGAGE PASS-THROUGH
CERTIFICATES, SERIES 2000-C2
-----------------------------------------------------
PROSPECTUS SUPPLEMENT
-----------------------------------------------------
GOLDMAN, SACHS & CO.
DEUTSCHE BANC ALEX. BROWN
August , 2000
