<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 CHANGED. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME A FINAL PROSPECTUS SUPPLEMENT AND
THE RELATED PROSPECTUS IS DELIVERED. THIS PROSPECTUS SUPPLEMENT AND THE
ACCOMPANYING PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT
SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR
SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED MARCH 3, 2000
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED MARCH 3, 2000
$802,144,000 (APPROXIMATE)
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
Depositor
GMAC COMMERCIAL MORTGAGE CORPORATION
Servicer
SERIES 2000-C1 MORTGAGE PASS-THROUGH CERTIFICATES
YOU SHOULD CONSIDER CAREFULLY THE RISK FACTORS BEGINNING ON PAGE S-14 IN THIS
PROSPECTUS SUPPLEMENT AND PAGE 6 IN THE PROSPECTUS.
The Certificates represent interests only in the trust created for Series
2000-C1. 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 EIGHT classes of offered certificates described in the table on page
S-5.
o SEVEN additional classes of private certificates, all of which are
subordinated to, and provide credit enhancement for, the offered
certificates. The private certificates are not offered by this prospectus
supplement.
THE ASSETS UNDERLYING THE CERTIFICATES WILL INCLUDE:
o A pool of 137 fixed rate, monthly pay mortgage loans secured by first
priority liens on 179 commercial and multifamily residential properties.
The mortgage pool will have an initial pool balance of approximately
$886,350,652.
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 CRIMINAL OFFENSE.
The underwriters will sell the offered certificates at varying prices to be
determined at the time of sale. The proceeds to GMAC Commercial Mortgage
Securities, Inc. from the sale of the offered certificates will be
approximately % of their principal balance plus accrued interest, before
deducting expenses. The underwriters' 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
and solely as a member of the selling party
NEWMAN AND ASSOCIATES, INC.
MARCH , 2000
<PAGE>
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
Mortgage Pass-Through Certificates, Series 2000-C1
ALASKA
1 PROPERTY
$3,688,040
0.42% OF TOTAL
WASHINGTON
2 PROPERTIES
$7,707,131
0.87% OF TOTAL
OREGON
2 PROPERTIES
$7,553,473
0.85% OF TOTAL
CALIFORNIA
13 PROPERTIES
$104,230,421
11.76% OF TOTAL
NEVADA
2 PROPERTIES
$9,936,797
1.12% OF TOTAL
IDAHO
1 PROPERTY
$1,446,431
0.16% OF TOTAL
ARIZONA
7 PROPERTIES
$23,281,205
2.63% OF TOTAL
COLORADO
4 PROPERTIES
$22,044,005
2.49% OF TOTAL
MISSOURI
1 PROPERTY
$1,795,805
0.20% OF TOTAL
KANSAS
2 PROPERTIES
$3,968,629
0.45% OF TOTAL
IOWA
3 PROPERTIES
$3,073,949
0.35% OF TOTAL
MINNESOTA
18 PROPERTIES
$52,198,112
5.89% OF TOTAL
TEXAS
22 PROPERTIES
$90,858,492
10.25% OF TOTAL
ILLINOIS
3 PROPERTIES
$22,305,288
2.52% OF TOTAL
MISSISSIPPI
1 PROPERTY
$1,775,000
0.20% OF TOTAL
MICHIGAN
6 PROPERTIES
$33,652,307
3.80% OF TOTAL
INDIANA
2 PROPERTIES
$4,695,070
0.53% OF TOTAL
TENNESSEE
5 PROPERTIES
$32,572,806
5.57% OF TOTAL
VIRGIN ISLANDS
2 PROPERTIES
$11,955,484
1.35% OF TOTAL
OHIO
6 PROPERTIES
$19,874,912
2.24% OF TOTAL
PENNSYLVANIA
6 PROPERTIES
$22,470,680
2.54% OF TOTAL
SOUTH CAROLINA
1 PROPERTY
$11,373,287
1.28% OF TOTAL
GEORGIA
6 PROPERTIES
$29,079,438
3.28% OF TOTAL
FLORIDA
15 PROPERTIES
$82,046,915
9.26% OF TOTAL
NEW HAMPSHIRE
2 PROPERTIES
$5,719,458
0.65% OF TOTAL
DELAWARE
2 PROPERTIES
$17,048,924
1.92% OF TOTAL
VIRGINIA
5 PROPERTIES
$12,050,559
1.36% OF TOTAL
WEST VIRGINIA
2 PROPERTIES
$4,375,398
0.49% OF TOTAL
NORTH CAROLINA
3 PROPERTIES
$15,442,354
1.74% OF TOTAL
MASSACHUSETTS
2 PROPERTIES
$14,378,390
1.62% OF TOTAL
CONNECTICUT
2 PROPERTIES
$10,102,735
1.14% OF TOTAL
NEW YORK
17 PROPERTIES
$112,116,525
12.65% OF TOTAL
NEW JERSEY
8 PROPERTIES
$39,439,075
4.45% OF TOTAL
MARYLAND
5 PROPERTIES
$52,093,556
5.88% OF TOTAL
DISTRIBUTION OF PROPERTY TYPES
MULTIFAMILY 32.82%
OFFICE 24.08%
RETAIL 17.86%
INDUSTRIAL 14.90%
LODGING 6.90%
MIXED USE 2.29%
MOBILE HOME PARK 0.58%
SPECIAL PURPOSE 0.56%
FOR PURPOSES OF THIS MAP, EACH MORTGAGE LOAN SECURED BY MULTIPLE
MORTGAGED PROPERTIES IS TREATED AS THE NUMBER
OF MORTGAGE LOANS EQUAL TO THE NUMBER OF MORTGAGED PROPERTIES,
EACH OF WHICH IS ALLOCATED A CUT-OFF DATE BALANCE
BASED ON ALLOCATED PRINCIPAL AMOUNTS THEREOF (AS DEFINED HEREIN).
[ ] [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
PAGE
-----
Summary of Series 2000-C1
Transaction ............................. S-7
Relevant Parties and Important
Dates ............................... S-7
The Mortgage Pool ...................... S-7
Geographic Concentrations of
the Mortgaged Properties ............ S-8
Property Types ......................... S-8
Call Protection provided by the
Mortgage Loans ...................... S-8
Payment Terms of the
Mortgage Loans ...................... S-8
The Certificates ....................... S-8
Certificate Designations ............... S-9
Initial Certificate Balances of
the Certificates .................... S-9
Distributions on the Offered
Certificates ........................ S-9
Subordination of Classes of
Certificates ........................ S-10
Allocation of Losses and
Expenses to Classes of
Certificates ........................ S-10
Advances Made by the
Servicer ............................ S-11
Optional Termination of the
Trust ............................... S-11
Book Entry Registration ................ S-11
PAGE
-----
Denominations .......................... S-12
Yield and Prepayment
Considerations ...................... S-12
Legal Investment in the
Certificates ........................ S-12
ERISA Considerations for
Certificateholders .................. S-12
Tax Status of the Certificates ......... S-12
Ratings on the Certificates ............ S-13
RISK FACTORS ............................... S-14
DESCRIPTION OF THE
MORTGAGE POOL ........................... S-40
Calculations of Interest ............... S-40
Balloon Loans .......................... S-40
ARD Loans .............................. S-40
Loan Participation Interest ............ S-41
Amortization of Principal .............. S-43
Due Dates .............................. S-43
Defeasance ............................. S-43
Prepayment Provisions .................. S-44
Related Borrowers,
Cross-Collateralized
Mortgage Loans and
Mortgage Loans
Collateralized by Multiple
Properties .......................... S-45
S-2
<PAGE>
PAGE
----
Due-on-Sale and
Due-on-Encumbrance
Provisions ....................... S-45
Secured Subordinate Financing........ S-46
Unsecured Subordinate and
Mezzanine Financing .............. S-46
Ground Leases ....................... S-47
Loan Documentation .................. S-47
Significant Mortgage Loans .......... S-47
The 80 Lafayette Street Loan ..... S-47
The Equity Inns Loan
Participation ................. S-48
The First Union Tower Loan........ S-53
The World Savings Center Loan .... S-56
The Freeman Webb Loan ............ S-58
The Sellers ......................... S-59
Underwriting Matters ................ S-60
Environmental Assessments ........ S-60
Property Condition Assessments ... S-60
Appraisals ....................... S-61
Hazard, Liability and Other
Insurance ........................ S-61
Earnouts and Additional
Collateral Loans .............. S-62
Assignment of the Mortgage
Loan; Repurchases and
Substitutions .................... S-62
Representations and
Warranties; Repurchases .......... S-64
Pool Characteristics; Changes in
Mortgage Pool .................... S-67
SERVICING OF THE
MORTGAGE
LOANS ................................ S-68
The Servicer ........................ S-68
Servicing Standard .................. S-68
Specially Serviced Mortgage
Loans ............................ S-69
Termination of the Servicer for
Specially Serviced Mortgage
Loans and REO Properties ......... S-70
Servicing and Other Compensation
and Payment of Expenses ....... S-71
Servicing Fee ................. S-71
Special Servicing Fee ......... S-72
Workout Fee ................... S-72
Liquidation Fee ............... S-72
Additional Compensation ....... S-73
Modifications, Waivers,
Amendments and Consents .......... S-74
Enforcement of ARD Loans ............ S-76
Sale of Defaulted Mortgage
Loans ............................ S-76
REO Properties ...................... S-77
Inspections; Collection of
Operating Information ............ S-78
DESCRIPTION OF THE
CERTIFICATES ......................... S-79
Denominations ....................... S-79
Book-Entry Registration of the
Offered Certificates ............. S-80
Euroclear and Clearstream,
Luxembourg .................... S-80
Definitive Certificates .......... S-82
Certificate Balances and
Notional Amounts ................. S-83
Pass-Through Rates .................. S-83
Distributions ....................... S-84
The Available Distribution
Amount ........................ S-85
Application of the Available
Distribution Amount ........... S-85
Distributable Certificate
Interest ...................... S-86
Distributions of Prepayment
Premiums ......................... S-87
Distributions of Excess Interest..... S-88
Distributions of Excess
Liquidation Proceeds ............. S-88
Treatment of REO Properties ......... S-88
Interest Reserve Account ............ S-88
Subordination; Allocation of
Losses and Expenses .............. S-89
P&I Advances ........................ S-90
Appraisal Reductions ................ S-92
Reports to Certificateholders;
Available Information ............ S-93
Trustee Reports .................. S-93
Information Available
Electronically ................... S-96
Other Information ................... S-96
S-3
<PAGE>
PAGE
------
Voting Rights .................... S-97
Termination; Retirement of
Certificates .................. S-97
The Trustee and Fiscal Agent ..... S-98
YIELD AND MATURITY
CONSIDERATIONS .................... S-99
Yield Considerations ............. S-99
The Purchase Price of the
Certificates ............... S-99
Applicable Pass-Through
Rate ....................... S-100
Actual Performance of the
Mortgage Loans ............. S-100
Rate and Timing of Payments
on the Mortgage Loans ...... S-100
Factors that Affect the Rate
and Timing of Payments and
Defaults ...................... S-101
Delay in Payment of
Distributions ................. S-101
Unpaid Distributable Certificate
Interest ...................... S-101
Weighted Average Life ............ S-102
Price/Yield Tables ............... S-108
Yield Sensitivity of the Class X
Certificates .................. S-112
PAGE
------
FEDERAL INCOME TAX
CONSEQUENCES ...................... S-114
Original Issue Discount and
Premium ....................... S-114
New Withholding Regulations ...... S-116
Characterization of Investments
in Offered Certificates ....... S-116
METHOD OF DISTRIBUTION................ S-117
LEGAL MATTERS ........................ S-118
RATINGS .............................. S-118
LEGAL INVESTMENT ..................... S-120
ERISA CONSIDERATIONS ................. S-120
Glossary ............................. S-122
ANNEX A--
CHARACTERISTICS OF
THE MORTGAGE LOANS ................ A-1
ANNEX B .............................. B-1
ANNEX C .............................. C-1
ANNEX D--GLOBAL
CLEARANCE, SETTLEMENT
AND TAX
DOCUMENTATION
PROCEDURES ........................ D-1
S-4
<PAGE>
SUMMARY OF SERIES 2000-C1 MORTGAGE PASS-THROUGH
CERTIFICATES AND POOL CHARACTERISTICS
THE SERIES 2000-C1 MORTGAGE PASS-THROUGH CERTIFICATES
<TABLE>
<CAPTION>
APPROXIMATE INITIAL APPROXIMATE
ORIGINAL PRINCIPAL PERCENT OF PASS- WEIGHTED AVG. PRINCIPAL
RATINGS OR NOTIONAL CREDIT THROUGH LIFE (6) WINDOW (7)
CLASS FITCH/MOODY'S AMOUNT (1) SUPPORT (5) RATE (IN YEARS) (MONTH/YEAR)
- -------- --------------- -------------------- ------------- --------- --------------- --------------
<S> <C> <C> <C> <C> <C> <C>
X AAA/Aaa $ 886,350,652(2) N/A (3) 9.12 4/00 - 1/15
A-1 AAA/Aaa $ 125,861,000 24.75% (4) 5.71 4/00 - 05/09
A-2 AAA/Aaa $ 541,117,000 24.75% (8) 9.57 05/09 - 12/09
B AA/Aa2 $ 37,669,000 20.50% (8) 9.81 12/09 - 01/10
C A/A2 $ 42,101,000 15.75% (8) 9.83 01/10 - 01/10
D A--/A3 $ 8,863,000 14.75% (8) 9.83 01/10 - 01/10
E BBB/Baa2 $ 31,022,000 11.25% (8) 9.83 01/10 - 01/10
F BBB-/Baa3 $ 15,511,000 9.50% (9) 9.83 01/10 - 01/10
G (10)
H (10)
J (10)
K (10)
L (10)
M (10)
N (10)
</TABLE>
- ----------
(1) These amounts are approximate. They may vary upward or downward by no
more than 5% depending upon the final composition of the pool of mortgage
loans sold to the trust.
(2) The Class X certificates will accrue interest on the Class X notional
amount. The initial Class X notional amount is approximate and will
decline as the aggregate principal balance of the underlying mortgage
loans declines. The Class X certificates will only be entitled to receive
distributions of interest.
(3) The Class X certificates will accrue interest at a variable rate based
upon the weighted average net mortgage rate. See "Description of the
Certificates--Pass-Through Rates."
(4) The pass-through rate for the Class A-1 certificates is a fixed rate.
(5) The percent of credit support reflects the aggregate certificate balances
of all classes of certificates that will be subordinate to each class on
the date the certificates are issued, expressed as a percentage of the
initial pool balance.
(6) The weighted average life of a security is the average amount of time
that will elapse from the time the security is issued until the investor
receives all principal payments on the security, weighted on the basis of
principal paid, or, in the case of Class X certificates, the reduction in
notional amount. The weighted average life of each class is calculated
assuming that there are no prepayments on the mortgage loans and
according to the maturity assumptions described under "Yield and Maturity
Considerations" in this prospectus supplement. The rated final
distribution date is the distribution date that occurs in March, 2033.
(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
S-5
<PAGE>
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) Weighted average net mortgage rate.
(10) 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 March, 2000.
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 March, 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-C1 MORTGAGE POOL CHARACTERISTICS
<TABLE>
<CAPTION>
CHARACTERISTICS ENTIRE MORTGAGE POOL
- --------------- --------------------
<S> <C>
Initial pool balance .................................. $886,350,652
Number of mortgage loans .............................. 137
Number of mortgaged properties ........................ 179
Average balance as of the cut-off date ................ $ 6,469,713
Range of mortgage rates
as of the cut-off date .............................. 7.560% to 9.625%
Weighted average mortgage rate ........................ 8.34%
Weighted average remaining term to maturity or
anticipated repayment date .......................... 115.0 months
Weighted average debt service coverage ratio .......... 1.36x
Weighted average loan-to-value ratio .................. 69.20%
</TABLE>
The calculation of loan-to-value ratio and debt service coverage ratio is
described in Annex A to this prospectus supplement.
S-6
<PAGE>
SUMMARY OF SERIES 2000-C1 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>
<CAPTION>
- -------------------------------------------------------------------------------------------
RELEVANT PARTIES AND IMPORTANT DATES
<S> <C> <C>
TITLE OF SERIES: Series 2000-C1 Mortgage CUT-OFF DATES: March 1, March 5
Pass-Through Certificates and March 10, 2000
THE ISSUER: GMAC Commercial Mortgage DISTRIBUTION DATE: The 15th day
Securities, Inc. Series 2000-C1 of each month or, if the 15th day
Trust formed to issue the is not a business day, the
mortgage pass-through immediately succeeding business
certificates and to acquire day, beginning in April 17, 2000.
the mortgage pool.
DEPOSITOR: GMAC Commercial Mortgage CLOSING DATE: On or about
Securities, Inc. March 16, 2000.
650 Dresher Road
Horsham, Pennsylvania
19044-8015 DETERMINATION DATE: The 5th
(215) 328-4622 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
COLLECTION PERIOD: For any
distribution date, the period that
SERVICER: GMAC Commercial Mortgage begins immediately following the
Corporation determination date in the prior
calendar month and continues
through and includes the
TRUSTEE: LaSalle Bank National determination date in the
Association calendar month in which that
distribution date occurs. The first
collection period, however, for
FISCAL AGENT: ABN AMRO Bank N.V. each mortgage loan begins
immediately following its cut-off
date.
- -------------------------------------------------------------------------------------------
</TABLE>
THE MORTGAGE POOL
The mortgage pool will consist of mortgage loans secured by first mortgage
liens on real property interests held by borrow ers that own or lease the
mortgaged properties. The mortgaged properties are used for commercial or
multifamily residential purposes.
GMAC Commercial Mortgage Corporation originated 58 of the mortgage loans or
45.9% of the initial pool balance. German American Capital Corporation origi-
nated or acquired 28 of the mortgage loans or 19.6% of the initial pool balance.
Archon Financial, L.P. originated 51 of the mortgage loans or 34.6% of the
initial pool balance, all of which were acquired
S-7
<PAGE>
by Goldman Sachs Mortgage Company. The mortgage loans were originated between
November 17, 1998 and February 9, 2000.
Each seller will make representations and warranties regarding the mortgage
loans sold by it. The depositor will assign these representations and
warranties to the trustee.
In this prospectus supplement, the percentage of the initial pool balance
refers to the principal balance of the mortgage loans or the allocated loan
amount secured by a mortgaged property. The initial pool balance of the
mortgage loans is equal to their unpaid aggregate principal balances as of
their cut-off dates, after taking into account all payments of principal due on
or before that date, whether or not received. All mortgage pool 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 Pool" in
this prospectus supplement.
GEOGRAPHIC CONCENTRATIONS OF THE MORTGAGED PROPERTIES
The mortgaged properties are located in 33 states and the U.S. Virgin Islands.
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.
PERCENTAGE
NUMBER OF OF AGGREGATE
MORTGAGED CUT-OFF
PROPERTY STATE PROPERTIES DATE BALANCE
- -------------------- ------------ -------------
New York ........... 17 12.65%
California ......... 13 11.76
Texas .............. 22 10.25
Florida ............ 15 9.26
Minnesota .......... 18 5.89
PROPERTY TYPES
The following table lists the number and percentage of mortgaged properties
that are operated for each indicated purpose.
PERCENTAGE
NUMBER OF OF AGGREGATE
MORTGAGED CUT-OFF
PROPERTY TYPE PROPERTIES DATE BALANCE
- --------------------- ------------ -------------
Multifamily ......... 40 32.82%
Office .............. 35 24.08
Retail .............. 37 17.86
Industrial .......... 35 14.90
Lodging ............. 23 6.90
Mixed Use ........... 4 2.29
Mobile Home Park..... 2 0.58
Special Purpose ..... 3 0.56
CALL 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 two of the mortgage loans permit defeasance
after a lockout period. For a description of defeasance provisions in the
mortgage loans, See "Description of the Mortgage Pool--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 on its anticipated repayment date. See "Description of the
Mortgage Pool--Calculations of Interest," and "--ARD Loans" in this prospectus
supplement.
THE CERTIFICATES
Your certificates represent the right to a portion of the collections on the
trust's assets. The certificates represent all of the beneficial ownership
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.
S-8
<PAGE>
CERTIFICATE DESIGNATIONS
We refer to the certificates by the following designations:
Designation Related Class(es)
- ------------------------------------------------
Offered Classes X, A-1, A-2, B,
certificates C, D, E and F
- ------------------------------------------------
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 and N
- ------------------------------------------------
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 and N
- ------------------------------------------------
INITIAL CERTIFICATE BALANCES OF THE CERTIFICATES
The aggregate principal balance of the certificates issued by the trust will be
approximately $886,350,652, but may vary upward or downward by no more than 5%.
The senior certificates will comprise approximately 75.25% and the subordinate
certificates will comprise approximately 24.75% 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 make payments of interest and principal to the servicer. The
servicer will deduct its servicing fee and send the remainder to the trustee.
After deducting its trustee fee, the trustee will distribute the remaining
amount, up to the amount available to the certificateholders as follows:
--------------------------------------------------------------------
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
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<PAGE>
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, incurs
unanticipated expenses or an appraisal reduction event occurs.
On any given distribution date, there may be insufficient payments received
from the mortgage loans for all classes of certificates to receive the full
amount of interest due on that date. Those certificates that do not receive
their full interest distributions on any distribution date will be entitled to
receive the shortfall in each month thereafter up to the aggregate amount of
the shortfall, in the same priority as their distribution of interest. However,
there will be no extra interest paid to make up for 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 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 from a borrower. Additional trust fund
expenses include, among other things:
o special servicing compensation;
o interest on advances made by the servicer;
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 princi-
S-10
<PAGE>
pal balance of the mortgage loans immediately following the distributions to be
made on the certificates on any distribution date is less than the aggregate
outstanding certificate balance of the certificates. If this happens, the
certificate balances of the certificates will be reduced as shown in the
following chart:
---------------------------------------------
Step 1
Reduce the certificate balances
of the Class 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
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 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. If the servicer fails to make a required advance, the trustee or
the fiscal agent will be required to make that advance. However, the trustee or
the fiscal agent 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, the trustee and the fiscal agent 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 pool is less than 1% of the initial pool balance, the servicer or the
depositor may purchase the mortgage loans. Neither the servicer, nor the
depositor, however, are required to do so. If the servicer or depositor does
purchase the mortgage loans, the outstanding principal balance of the
certificates will be paid in full, together with accrued interest. See
"Description of the Certificates--Certificate Balances and Notional Amounts"
and "--Termination; Retirement of Certificates."
BOOK ENTRY REGISTRATION
Generally, the offered certificates will be available only in book entry form
through
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the facilities of The Depository Trust Company in the United States or through
Clearstream, Luxembourg 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 other than the Class X certificates are offered in
minimum denominations of $25,000 each and multiples of $1 in excess thereof.
The Class X certificates are offered in minimum denominations of $1,000,000
initial notional amount each and multiples of $1 in excess thereof.
YIELD AND PREPAYMENT CONSIDERATIONS
The yield to maturity of each class of certificates will depend upon:
o the purchase price of the certificates;
o the applicable pass-through rate;
o the characteristics of the mortgage loans; and
o the rate and timing of payments on the mortgage loans.
The interest only certificates and the subordinate certificates will be
especially sensitive to the rate of prepayments. For a discussion of special
yield and prepayment considerations applicable to these classes of
certificates, see "Risk Factors" and "Yield and Maturity Considerations" in
this prospectus supplement.
LEGAL INVESTMENT 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
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<PAGE>
tax purposes, the residual certificates will be the residual interests in the
pool.
For further information regarding the federal income tax consequences of
investing in the offered certificates, see "Federal Income Tax Consequences" in
this prospectus supplement and in the accompanying prospectus.
RATINGS ON THE CERTIFICATES
The offered certificates are required to receive ratings from Fitch IBCA, Inc.
and Moody's Investors Service, Inc. that are not lower than those indicated
under "Summary of Series 2000-C1 Mortgage Pass-Through Certificates and Pool
Characteristics." The ratings of the offered certificates address the
likelihood that the holders of offered certificates will receive timely
distributions of interest and the ultimate repayment of principal before the
rated final distribution date that occurs in March, 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 or cause the Class X certificateholders to fail to recover their
initial investment.
S-13
<PAGE>
RISK FACTORS
The offered certificates are not suitable investments for all investors.
In particular, you should not purchase any class of offered certificates unless
you understand and are able to bear the risks associated with that class.
The offered certificates are complex securities and it is important that
you possess, either alone or together with an investment advisor, the expertise
necessary to evaluate the information contained in this prospectus supplement
and the accompanying prospectus in the context of your financial situation.
ALLOCATIONS OF LOSSES ON THE If losses on the mortgage loans are allocated
MORTGAGE LOANS WILL REDUCE YOUR to your class of certificates, the amount
PAYMENTS AND YIELD ON YOUR payable to you will be reduced by the amount of
CERTIFICATES these losses and the yield to maturity on your
certificates will be reduced. Losses allocated
to a class reduce the principal balance of the
class without making a payment to the class.
Because losses on the mortgage loans, together
with expenses relating to defaulted mortgage
loans, will be allocated first to the most
subordinated class of subordinated
certificates with a positive balance, the
yields on the subordinate certificates will be
extremely sensitive to losses on the mortgage
loans.
If the principal balance of all of the
subordinate certificates has been reduced to
zero due to losses on and expenses of
defaulted mortgage loans, 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 will
PREPAYMENTS ON THE MORTGAGE depend significantly on the rate and timing of
LOANS WILL AFFECT THE YIELD payments of principal and interest on the
ON THE CERTIFICATES certificates. The rate and timing of principal
and interest payments on the mortgage loans,
including the rates of delinquency, loss and
prepayment, will affect the rate and timing of
payments of principal and interest on the
certificates. For a discussion of the impact on
the yields of the certificates of the rate of
delinquency, loss and prepayment on the
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<PAGE>
mortgage rates and factors that affect those
rates, see "Yield and Maturity Considerations"
and "Description of the
Certificates--Subordination; Allocation of
Losses and Expenses" in this prospectus
supplement and "Risk Factors--Yield and
Prepayment Considerations" in the prospectus.
THE MORTGAGE LOANS ARE NOT None of the mortgages are insured or guaranteed
INSURED by the United States, any governmental entity
or instrumentality, by any private mortgage
insurer or by the depositor, the underwriters,
the servicer, the sellers, the trustee or the
fiscal agent. 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.
CONFLICTS OF INTEREST MAY OCCUR An affiliate of the servicer expects to acquire
WHEN CERTIFICATEHOLDERS OF some of the subordinate certificates including
VARIOUS CLASSES HAVE a portion of the Class N certificates. The
DIFFERING INTERESTS 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 on 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
S-15
<PAGE>
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
its ownership of any certificate.
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 ON THE MORTGAGED environmental condition at a mortgaged
PROPERTY MAY REDUCE OR DELAY property. Any potential liability could reduce
YOUR PAYMENTS or delay payments to certificateholders.
"Phase I" environmental assessments have been
performed on all but one of the mortgaged
properties, which constitutes 0.05% 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
S-16
<PAGE>
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;
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. There can be no assurance, however,
that should such 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
Pool--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 MAY The five states with the highest concentration
INCREASE REALIZED LOSSES of mortgage loans secured by mortgaged
ON THE MORTGAGE LOANS properties
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<PAGE>
are listed in the table titled "Geographic
Concentrations" 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
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 one 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 will
reduce your payments and yield on your
certificates.
Consequently, before maturity, you should
consider payment on each mortgage loan to
depend primarily on the sufficiency of the
cash flow of the mortgaged property. At
scheduled maturity or 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 LOAN IS The seller of a mortgage loan will be the only
THE ONLY PERSON MAKING person making representations and warranties on
REPRESENTATIONS AND WARRANTIES that mortgage loan. Neither the depositor nor
ON THAT MORTGAGE LOAN 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 repurchase obligation. The
applicable
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<PAGE>
seller may not have the financial ability to
effect these repurchases. Any resulting losses
will reduce your payments and yield on your
certificates. See "Description of the Mortgage
Pool--Assignment of the Mortgage Loans;
Repurchases and Substitutions" and
"--Representations and Warranties; Repurchases
and Substitutions" in this prospectus
supplement.
BALLOON PAYMENTS MAY INCREASE 124 mortgage loans, which represent 85.64% of
LOSSES ON THE MORTGAGE LOANS the initial pool balance, require balloon
AND EXTEND THE WEIGHTED payments at their stated maturity. These OF
AVERAGE LIFE YOUR CERTIFICATE 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 the tax laws; and
o prevailing general and regional economic
conditions.
Any delay in collection of a balloon payment
that otherwise would be distributable to a
class, whether the delay is due to borrower
default or to modification of the mortgage
loan by the servicer, is likely to extend the
weighted average life of that class. 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.
See "Servicing of the Mortgage
Loans--Modifications, Waivers, Amendments and
Consents," "Description of the Mortgage
Pool--Balloon Loans," and "Yield and Maturity
S-19
<PAGE>
Considerations" in this prospectus supplement
and "Risk Factors--Investment in Commercial
and Multifamily Mortgage Loans" and "Yield and
Maturity Considerations" in the prospectus.
IF BORROWERS DO NOT MAKE ARD 11 of the mortgage loans, which represent
PAYMENTS, THE WEIGHTED AVERAGE 14.00% of the initial pool balance are ARD
LIFE OF YOUR CLASS OF loans. ARD loans have anticipated repayment
CERTIFICATES MAY BE EXTENDED dates prior to their maturity dates. The
failure of a borrower to prepay an ARD loan
before or at 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 before or at
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 N Certificates. See
"Description of the Mortgage Pool--ARD Loans"
and "Risk Factors--Conflicts of interest may
occur when certificateholders of various
classes have differing interests" in this
prospectus supplement.
THE CONTROLLING CLASS DOES NOT The terms of the participation agreement
HAVE THE RIGHT TO APPOINT THE creating the Equity Inns loan participation
SPECIAL SERVICER FOR THE EQUITY provide that GMACCM will act as servicer and
INNS MORTGAGE LOANS OR TO special servicer of the Equity Inns mortgage
ACQUIRE THE EQUITY INNS MORTGAGE loans on behalf of the holders of each of the
LOANS UPON AN EVENT OF DEFAULT two participation interests created thereunder
and will service the Equity Inns mortgage loans
in accordance with the servicing standard and
provisions of the 1999-C3 pooling and servicing
agreement. The servicing standard under the
1999-C3 pooling and servicing agreement is the
same as the servicing standard under the
pooling and servicing agreement for the 2000-C1
certificates. Subject to the terms and
conditions of the 1999-C3 pooling and servicing
agreement, the 1999-C3 trust may, however,
replace GMACCM as special servicer of the
Equity Inns
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<PAGE>
loan participation at any time, and may
replace GMACCM as master servicer of the
Equity Inns loan participation upon the
occurrence of an event of default under the
1999-C3 pooling and servicing agreement if
each of Fitch and Moody's, the rating agencies
designated in the 1999-C3 pooling agreement
and the 2000-C1 pooling agreement, confirms in
writing that the replacement will not in and
of itself result in the withdrawal, downgrade
or qualification (including, placement on
"negative credit watch") of the rating
assigned by it to any securities issued by the
1999-C3 trust or the trust. Consequently, the
controlling class hereunder does not have the
right to replace the special servicer for the
Equity Inns mortgage loans.
In addition, if the Equity Inns mortgage loans
become defaulted mortgage loans, the majority
certificateholder of the controlling class of
the 1999-C3 certificates and each of the
special servicer and the master servicer under
the 1999-C3 pooling and servicing agreement
have the right to purchase the Equity Inns
mortgage loans under the terms and conditions
of, and for the purchase price set forth in,
the participation agreement and the 1999-C3
pooling and servicing agreement. Under the
terms of the participation agreement, the
related purchase proceeds would be distributed
ratably to the holders of each participation
interest. For a more detailed description of
the Equity Inns mortgage loans see
"Description of the Mortgage Pool--Significant
Mortgage Loans--The Equity Inns Loan
Participation" in this prospectus supplement.
RISKS PARTICULAR TO MULTIFAMILY
PROPERTIES:
REDUCTIONS IN OCCUPANCY AND 40 mortgaged properties, securing mortgage
RENT LEVELS ON MULTIFAMILY loans that represent 32.82% of the initial pool
PROPERTIES COULD ADVERSELY balance, are multifamily rental properties. A
AFFECT THEIR VALUE AND decrease in occupancy or rent levels could
CASH FLOW result in realized losses on the mortgage
loans. Occupancy and rent levels on multifamily
properties may be adversely affected by:
o local, regional or national economic
conditions, which may limit the amount of
rent that can be charged for rental units
or result in a reduction in timely rent
payments;
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<PAGE>
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 lack of amenities, unattractive physical
attributes or bad reputation of the
mortgaged property.
STUDENT HOUSING CONCENTRATIONS Eight of the mortgaged properties, securing
MAY AFFECT CASH FLOW OF A mortgage loans that represent 10.81% of the
MULTIFAMILY PROPERTY initial pool balance, are student housing or
have high concentrations of student tenants. In
addition to other multifamily real estate
risks, student housing risks include:
o increased influence of economic, social,
governmental and demographic factors as
they relate to the number of students
attending colleges and universities in
need of student housing;
o reliance upon the well-being of the
colleges or universities to which the
facilities relate;
o student housing facilities are subject to
competition from colleges and universities
as well as other providers of student
housing and physical layouts may not be
readily convertible to traditional
multifamily use;
o maintenance and insurance costs of student
housing can exceed the typical costs of
other multifamily housing;
o tenants or sub-tenants are individuals who
often have little or no credit history,
may not have parental guarantees and are
not tied to the local community; and
o turnover of tenants or sub-tenants can be
significant and student housing is less
utilized or subject to reduced rents
during summer months.
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<PAGE>
One mortgaged property, consisting principally
of student housing, securing a mortgage loan
that represents 5.47% of the initial pool
balance is primarily leased to one tenant,
which increases the adverse effect of a tenant
default or lease termination. See "Description
of the Mortgage Pool--Significant Mortgage
Loans--The 80 Lafayette Street Loan" in this
prospectus supplement and "--Losses may be
caused by tenant credit risk on the mortgage"
below.
RESTRICTIONS IMPOSED ON Tax credit, and city, state and federal housing
MULTIFAMILY PROPERTIES BY subsidies or similar programs may apply to
GOVERNMENT PROGRAMS COULD ALSO multifamily properties. The limitations and
ADVERSELY AFFECT THEIR restrictions imposed by these programs could
VALUE AND CASH FLOW result in realized losses on the 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.
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 OFFICE
PROPERTIES:
ECONOMIC DECLINE IN TENANT 35 mortgaged properties, securing mortgage
BUSINESSES OR CHANGES IN loans that represent 24.08% of the initial pool
DEMOGRAPHIC CONDITIONS COULD balance, are office properties.
ADVERSELY AFFECT THE VALUE AND Economic decline in the businesses operated by
CASH FLOW FROM OFFICE the tenants of office properties may increase
PROPERTIES the likelihood that a tenant may be unable to
pay its 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:
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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 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. Three of the mortgaged
properties representing 0.13% 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 the
PROPERTIES COULD ALSO ADVERSELY same market could decrease occupancy or rental
AFFECT THE VALUE AND CASH FLOW rates at office properties. Decreased occupancy
FROM OFFICE PROPERTIES could result in realized losses on the mortgage
loans. Competition is affected by a property's
age, condition, design, such as floor sizes and
layout, location, access to transportation and
ability to offer amenities to its tenants,
including sophisticated building systems, such
as fiber optic cables, satellite communications
or other base building technological features.
RISKS PARTICULAR TO RETAIL
PROPERTIES:
A SIGNIFICANT TENANT CEASING TO 37 mortgaged properties, securing mortgage
OPERATE AT A RETAIL PROPERTY loans that represent 17.86% of the initial pool
COULD ADVERSELY AFFECT ITS balance, are retail properties.
VALUE AND CASH FLOW
A significant tenant ceasing to do business at
retail property could result in realized
losses on the mortgage loans. The loss of a
significant tenant may be the result of the
tenant's voluntary
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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 for other reasons. There is no
guarantee that any tenants will continue to
occupy space in the related retail property.
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 is more direct for retail
properties than other types of commercial
property. 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. A
retail "anchor tenant" is typically understood
to be a tenant that is larger in size and is
important in attracting customers to a retail
property, whether or not it is located on the
mortgaged property.
These risks may be increased when the property
is a single tenant property. Seven of the
mortgaged properties representing 4.25% 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 demographics may adversely affect the value and
PREFERENCES IN CONSUMER 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;
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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 sources
RETAIL DISTRIBUTION CHANNELS outside their local real estate market.
MAY ADVERSELY AFFECT THE Catalogue retailers, home shopping networks,
VALUE AND CASH FLOW FROM the internet, telemarketing and outlet centers
RETAIL PROPERTIES 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.
RISKS PARTICULAR TO INDUSTRIAL
PROPERTIES:
CHANGES IN ECONOMIC AND 35 mortgaged properties, securing mortgage
DEMOGRAPHIC CONDITIONS COULD loans that represent 14.90% of the initial pool
ADVERSELY AFFECT THE VALUE AND balance, are industrial properties. Economic
CASH FLOW FROM INDUSTRIAL decline in the businesses operated by the
PROPERTIES 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. Seven of the mortgaged properties
representing 2.22% 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.
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RESTRICTIONS IMPOSED BY SITE Site characteristics at industrial properties
CHARACTERISTICS COULD ALSO may impose restrictions that could cause
ADVERSELY AFFECT THE VALUE realized losses on the mortgage loans that may
AND CASH FLOW FROM INDUSTRIAL be allocated to your class of certificates.
PROPERTIES 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.
An industrial property requires availability
of labor sources, proximity to supply sources
and customers, and accessibility to rail
lines, major roadways and other distribution
channels.
RESTRICTIONS IMPOSED BY Properties used for many industrial purposes
INCREASED ENVIRONMENTAL RISKS are more prone to environmental concerns than
COULD ALSO ADVERSELY AFFECT other property types. For a description of risk
THE VALUE AND CASH FLOW FROM factors relating to environmental risks, see
INDUSTRIAL PROPERTIES "--Adverse environmental conditions may reduce
or delay your payments" above.
RISKS PARTICULAR TO HOSPITALITY
PROPERTIES:
REDUCTIONS IN ROOM RATES OR 23 mortgaged properties, securing mortgage
OCCUPANCY AT A HOSPITALITY loans that represent 6.90% of the initial pool
PROPERTY COULD ADVERSELY AFFECT balance, are hospitality properties. A decrease
ITS VALUE AND CASH FLOW 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.
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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 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.
RISKS ASSOCIATED WITH TENANTS
GENERALLY:
LOSSES MAY BE CAUSED BY TENANT Cash flow or value of a mortgaged property
CREDIT RISK ON THE MORTGAGE could be reduced if tenants are unable to meet
LOANS 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 Aspects of Mortgage
Loans--Bankruptcy Laws" in the prospectus.
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These risks may be increased when the property
is a single tenant property, is owner-occupied
or is leased to relatively few tenants. 19 of
the mortgaged properties representing 6.79% of
the initial pool balance are secured by 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 properties
DEFAULTS ON LEASES would decline if space 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" for information regarding the expiration of
leased space for certain mortgaged properties.
If space is not renewed at all or is 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 Replacement
Reserves and Tenant Improvements and Leasing
Commission Reserves" 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 would
be limited to the unpaid rent reserved
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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. The property manager is responsible
for the following activities:
o responding to changes in the local market;
o planning and implementing the rental
structure, including establishing levels
of rent payments; and
o ensuring that maintenance and capital
improvements are carried out in a timely
fashion.
Sound property management controls costs,
provides appropriate service to tenants and
ensures that improvements are maintained.
Sound property management can also maintain
cash flow, reduce vacancy, leasing and repair
costs and preserve 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 borrowers may experience conflicts of interest
MAY RESULT IN LOSSES 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;
o the mortgaged properties may be managed by
property managers who also manage other
properties that compete with the mortgaged
properties; and
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o affiliates of the managers or the
borrowers, or the managers or the
borrowers or both, may also own other
properties, including competing
properties.
LIMITED ALTERNATIVE USES OF Three mortgaged properties, securing mortgage
OTHER PROPERTY TYPES COULD loans that represent approximately 0.56% of the
ADVERSELY AFFECT THEIR VALUE initial pool balance, are "special purpose"
AND CASH FLOW properties that have limited alternative uses.
See Annex A for additional information
concerning "special purpose" properties.
"Special purpose" limitations 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 real estate.
LOSSES MAY RESULT IF THE An appraisal was conducted for each mortgaged
SERVICER IS UNABLE TO SELL property in connection with its origination,
A MORTGAGED PROPERTY and the loan-to-value ratios as of the cut-off
SECURING A DEFAULTED date D referred to in this prospectus
MORTGAGE LOAN FOR ITS supplement are based on the appraisals. If the
APPRAISE VALUE 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.
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<PAGE>
SUBORDINATE FINANCING ON THE Four of the mortgaged properties securing 4.60%
MORTGAGED PROPERTY MAY of the initial pool balance are encumbered by
INCREASE RISKS subordinate debt that is not part of the
mortgage 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 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
Pool--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 equity
INCREASE RISK 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
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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 mezzanine
debt relating to the mortgaged properties see
"Description of the Mortgage Pool--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 one or more other
mortgaged properties to satisfy current
expenses of the mortgaged property
experiencing financial difficulty.
Alternatively, the borrower could attempt to
avert foreclosure by filing a bankruptcy
petition. The bankruptcy or insolvency of one
borrower or its affiliate could have an
adverse effect on the operation of all of the
mortgaged properties of that borrower and its
affiliates and on the ability of those
mortgaged properties to produce sufficient
cash flow to make required payments on the
mortgage loans. 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 or
LOANS MAY MAKE LOSSES MORE together with other mortgage loans with which
they are cross-collateralized, have outstanding
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<PAGE>
balances that are substantially higher than
the average outstanding balance. If a mortgage
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.
LOSSES COULD RESULT FROM Seven mortgage loans, representing 6.89% of the
LIMITATION ON ENFORCEABILITY initial pool balance, are cross-collateralized
OF CROSS-COLLATERALIZATION 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:
1) the borrower was insolvent at the time of
granting the lien, was rendered insolvent by
the granting of the lien, or was left with
inadequate capital or was unable to pay its
debts as they matured; and
2) when it allowed its mortgaged property to
be encumbered by a lien securing the entire
indebtedness represented by the other mortgage
loan, the borrower did not receive fair
consideration or reasonably equivalent value
in return.
The additional security provided by
cross-collateralization would not be available
if a court determines that the grant was a
fraudulent conveyance. 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
Pool--Terms and Conditions of the Mortgage
Loans--Related Borrowers, Cross-Collateralized
Mortgage Loans
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<PAGE>
and Mortgage Loans Collateralized by Multiple
Properties" in this prospectus supplement.
TAX CONSIDERATIONS RELATED TO Payment of taxes on any net income from
FORECLOSURE MAY REDUCE PAYMENTS "foreclosure property" acquired by the trust
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 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, have
REMEDIES 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
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servicer will be required to consider these
factors in deciding what alternative 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.
INCREASES IN GROUND RENTS MAY Seven mortgaged properties securing mortgage
ADVERSELY AFFECT A BORROWER'S loans, which represent 3.39% of the initial
ABILITY TO MAKE PAYMENTS UNDER pool balance, are subject solely to the lien of
A RELATED MORTGAGE LOAN AND a mortgage on the applicable borrower's
CAUSE REALIZED LOSSES ON THE leasehold interest under a ground lease. Two
MORTGAGE LOANS mortgaged properties securing mortgage loans,
which represent 4.55% of the initial pool
balance, are subject to the lien of either a
mortgage on both the borrower's leasehold
interest and the ground lessor's fee simple
interest in the mortgaged property or a
mortgage on the borrower's leasehold interest
in a portion of the mortgaged property and the
borrower's fee simple interest in the remaining
portion of 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. Bankruptcy rules
may limit the ability of a lender to enforce
remedies.
The bankruptcy of a lessor or a lessee under a
ground lease could result in losses on the
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,
including renewals of the ground lease. The
ground lessee, however, is not entitled to
enforce the obligation of the ground lessor to
provide any services required under the
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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.
Each of the ground leases related to the
mortgage loans, however, generally contains
the following protections to mitigate this
risk:
o It requires the lessor to give the
leasehold mortgagee notice of lessee
defaults and an opportunity to cure them.
o It permits the leasehold estate to be
assigned to and by the leasehold mortgagee
at and after a foreclosure sale.
o It contains certain other protective
provisions typically included in a
"mortgageable" ground lease.
See "Description of the Mortgage Pool--Ground
Leases" in this prospectus supplement.
YOUR PAYMENTS MAY BE REDUCED Noncompliance with zoning and building codes
OR DELAYED IF ZONING AND may cause the borrower to experience cash flow
BUILDING CODE NONCOMPLIANCE delays and shortfalls. These delays or
ON THE MORTGAGED PROPERTIES shortfalls in payments could result in realized
ADVERSELY AFFECTS THE ABILITY losses in the mortgage loans that may be
OF BORROWERS TO MAKE PAYMENTS allocated to your class of certificates.
ON THE MORTGAGE LOANS
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
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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. 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 as referred to above.
CHANGES IN CONCENTRATIONS OF As the mortgage loans are repaid, liquidated
or BORROWERS, MORTGAGE LOANS OR repurchased, the characteristics of the pool
PROPERTY CHARACTERISTICS MAY 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 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 If the borrower were required to pay expenses
WITH DISABILITIES ACT MAY and fines imposed by the Americans with
REDUCE PAYMENTS TO Disabilities Act of 1990, the amount available
CERTIFICATEHOLDERS to make payments on the 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. Under
the Americans with Disabilities Act, all public
accommodations are required to meet federal
requirements related to access and use by
disabled persons. If the mortgaged properties
do not comply with this law, the borrowers may
be required to incur costs of compliance.
Noncompliance could result in the imposition of
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fines by the federal government or an award of
damages to private litigants.
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-122 in this prospectus supplement.
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<PAGE>
DESCRIPTION OF THE MORTGAGE POOL
A detailed presentation of characteristics of the mortgage loans and
mortgaged properties on an individual basis and in tabular format is presented
in Annex A.
CALCULATIONS OF INTEREST
All of the mortgage loans accrue interest at fixed interest rates on the
basis of a 360-day year and the actual number of days elapsed. 91 mortgage
loans representing 62.31% 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.
In addition, four mortgage loans, which represent 6.82% of the initial
pool balance, provide for payments of interest only for up to 24 months after
origination, 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.
BALLOON LOANS
124 of the mortgage loans, which represent approximately 85.64% 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 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. Two of
the mortgage loans, which represent approximately 0.36% of the initial pool
balance, are fully amortizing. One mortgage loan, which represents 1.65% of the
initial pool balance provides for monthly payments of interest only for the
entire term of the mortgage loan.
ARD LOANS
11 of the mortgage loans, which represent approximately 14.00% of the
initial pool balance, are ARD loans that provide for changes in the accrual of
interest and the payment of principal as of their respective anticipated
repayment dates. The anticipated repayment date for each ARD loan is set forth
on Annex A to this prospectus supplement. If a borrower elects to prepay its
ARD loan in full on its anticipated repayment date, a substantial amount of
principal will be due. If a borrower does not prepay its ARD loan on or before
its anticipated repayment date, 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. 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
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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.
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. Any excess interest received on an ARD loan will
be distributed to the holders of the Class N certificates.
LOAN PARTICIPATION INTEREST
In addition to the mortgage loans, the trust fund will also include a
participation interest in the Equity Inns mortgage loans. See "The Mortgage
Pool--Significant Mortgage Loans--The Equity Inns Participation" and "Risk
Factors--The controlling class does not have the right to appoint the special
servicer for the Equity Inns mortgage loans or to acquire the Equity Inns
mortgage loans upon an event of default" in this prospectus supplement. The
Equity Inns loan participation, representing 5.43% of the initial pool balance,
is one of two 50% participation interests in two Equity Inns mortgage loans.
The other 50% participation interest in the Equity Inns mortgage loans is held
by the trust fund created by the pooling and servicing agreement for the GMAC
Commercial Mortgage Securities, Inc. Series 1999-C3 Mortgage Pass-Through
Certificates. The Equity Inns mortgage loans are not included in the trust
fund.
The Equity Inns loan participation included in the 2000-C1 trust fund and
the other participation interest were created by a participation agreement among
the depositor, as the owner of the Equity Inns mortgage loans, the trustee for
the 1999-C3 trust fund, as custodian, and GMACCM. Under the mortgage loan
purchase agreement entered into by GMACCM in connection with the 2000-C1
transaction, GMACCM will transfer its 50% participation interest in the Equity
Inns mortgage loans to the depositor which in
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turn will transfer it to the trust for the 2000-C1 certificates. The terms of
the participation agreement provide that GMACCM will act as master servicer and
special servicer of the Equity Inns mortgage loans on behalf of the holders of
each participation interest and will service the Equity Inns mortgage loans in
accordance with the servicing standard and provisions of the 1999-C3 pooling and
servicing agreement. The servicing standard under the 1999-C3 pooling and
servicing agreement is the same as the servicing standard under the pooling and
servicing agreement for the 2000-C1 certificates. Subject to the terms and
conditions of the 1999-C3 pooling and servicing agreement, the 1999-C3 trust
may, however, replace GMACCM as special servicer of the Equity Inns loan
participation at any time, and may replace GMACCM as master servicer of the
Equity Inns loan participation upon the occurrence of an event of default under
the 1999-C3 pooling and servicing agreement if each of Fitch and Moody's, the
rating agencies designated in the 1999-C3 pooling agreement and the 2000-C1
pooling agreement, has confirmed in writing that the replacement will not in and
of itself result in the withdrawal, downgrade or qualification (including,
placement on "negative credit watch") of the rating assigned by it to any
securities issued by the 1999-C3 trust or the 2000-C1 trust. See "Servicing of
the Mortgage Loans--Termination of the Servicer with respect to Specially
Serviced Mortgage Loans and REO Properties" and "Risk Factors--the controlling
class does not have the right to appoint the special servicer for the Equity
Inns mortgage loans or to acquire the Equity Inns mortgage loans upon an event
of default" in this prospectus supplement.
All payments and other amounts received in respect of the Equity Inns
mortgage loans will be distributed in respect of each of the participation
interests on a pro rata basis according to their relative participation
interests.
P&I advances with respect to the Equity Inns mortgage loans will be made
by the servicer, the trustee or the fiscal agent under the 2000-C1 pooling and
servicing agreement and will be made only with respect to the portion of the
delinquent payments on the Equity Inns mortgage loans to which the Equity Inns
loan participation is entitled. The reimbursement of any such advance, together
with interest thereon, will be made in accordance with the terms and conditions
of the 2000-C1 pooling and servicing agreement.
Subject to the terms and conditions of the 1999-C3 pooling and servicing
agreement, the servicer or special servicer under the participation agreement
creating the Equity Inns loan participation will make servicing advances for
the entire Equity Inns mortgage loan and related mortgaged properties.
Servicing advances and related interest outstanding from time to time under the
2000-C1 pooling and servicing agreement will only include the portion of such
advances and interest that is reimbursable from payments and other amounts
payable in respect of the participation interest held by the 2000-C1 trust
fund. To the extent any servicing advances are not recovered from the borrower
or mortgaged properties, each of the 1999-C3 trust fund and the 2000-C1 trust
fund will only be obligated to reimburse the servicer or special servicer under
the participation agreement for its proportionate share of such advance,
together with advance interest thereon.
In addition, if the Equity Inns mortgage loans become defaulted mortgage
loans, the majority certificateholder of the controlling class of the 1999-C3
certificates and each of the special servicer and the master servicer under the
1999-C3 pooling and servicing agreement have the right to purchase the Equity
Inns mortgage loans under the terms
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and conditions of, and for the purchase price set forth in, the participation
agreement and the 1999-C3 pooling and servicing agreement. Under the terms of
the participation agreement, the related purchase proceeds would be distributed
ratably to the holders of each participation interest.
In the case of the Equity Inns mortgage loans and the related mortgaged
properties, references in this prospectus supplement to a "mortgage loan" or
amounts due thereunder and references to "mortgaged properties," or proceeds
thereon, will, except as expressly set forth in this prospectus supplement, be
deemed to be references to the portion of the Equity Inns mortgage loan or
related mortgaged properties represented by the Equity Inns loan participation
held by the 2000-C1 trust fund.
AMORTIZATION OF PRINCIPAL
In addition to the balloon loans and the ARD loans, the mortgage pool
includes two fully amortizing mortgage loans, which represent 0.36% of the
initial pool balance. One mortgage loan, which represents 1.65% of the initial
pool balance provides for monthly payments of interest only for the entire term
of the mortgage loan.
DUE DATES
A due date is the date in the month on which a monthly payment on a
mortgage loan is first due. 82 of the mortgage loans, which represent 59.96% of
the 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. Seven of the mortgage loans, which represent 5.04% of the
initial pool balance, provide for due dates on the fifth day of each month. 48
of the mortgage loans, which represent 35.00% 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 10 days.
DEFEASANCE
All but two of the mortgage loans provide that after a specified period,
if no default exists under the mortgage loan, the borrower may exercise a
defeasance option to obtain the release of one or more of the mortgaged
properties, from the lien of the mortgage upon satisfaction of conditions,
including that the borrower:
(1) pays on any due date
o all interest accrued and unpaid on the principal balance of the
mortgage note to and, including that due date,
o all other sums, excluding scheduled interest or principal payments
not yet due and owing, due under the mortgage loan, and
o any costs and expenses related to the release,
(2) delivers or pledges to the trustee defeasance collateral
o that consists of direct, non-callable obligations of, or
non-callable obligations, fully guaranteed as to timely payment by,
the United States of America; and
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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 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.
PREPAYMENT PROVISIONS
Each mortgage loan prohibits voluntary principal prepayments at any time
except during an open period following the expiration of the lockout period and
defeasance period for that mortgage loan or during a period following the
lockout period when any prepayment must be accompanied by a prepayment premium.
See Annex A for information regarding the lockout and defeasance periods for
each mortgage loan.
Any prepayment premiums actually collected on the mortgage loans will be
distributed to the respective classes of certificateholders in the amounts and
priorities described under "Description of the
Certificates--Distributions--Distributions of Prepayment Premiums" in this
prospectus supplement. The enforceability of provisions similar to the
provisions of the mortgage loans providing for the payment of a prepayment
premium upon an involuntary prepayment is unclear under the laws of a number of
states. The obligation to 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. Generally, no prepayment
premium will be payable upon any mandatory prepayment of a mortgage loan caused
by a casualty or condemnation. See "Legal Aspects of Mortgage Loans--Default
Interest and Limitations on Prepayments" in the prospectus.
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
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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.
RELATED BORROWERS, CROSS-COLLATERALIZED MORTGAGE LOANS AND MORTGAGE LOANS
COLLATERALIZED BY MULTIPLE PROPERTIES
Seven mortgage loans, which represent 6.89% of the initial pool balance,
are cross-collateralized mortgage loans among groups of related borrowers. 10
mortgage loans, other than the cross-collateralized mortgage loans, which
represent 11.86% of the initial pool balance, are secured by one or more
mortgages encumbering multiple mortgaged properties. Each of these mortgage
loans is evidenced by a separate mortgage note, and is not treated as a set of
cross-collateralized mortgage loans. Because of this, the total number of
mortgage loans in the mortgage pool is 137, while the total number of mortgaged
properties in the mortgage pool is 179. 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 pool, 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 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 3.04% 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
o transfers to specified parties related to the borrower.
The servicer will determine, in accordance with the servicing standard,
whether to exercise any right the holder of any mortgage may have under a
due-on-sale or due-on-encumbrance clause to accelerate payment of the related
mortgage loan or to withhold its consent to the transfer or encumbrance of the
mortgaged property. See "The Pooling and Servicing Agreements--Due-on-Sale and
Due-on-Encumbrance Provisions" and "Legal Aspects of Mortgage
Loans--Due-on-Sale and Due-on-Encumbrance" in the prospectus.
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<PAGE>
SECURED SUBORDINATE FINANCING
Four mortgage loans representing 4.60% of the initial pool balance are
secured by mortgaged properties known to be encumbered by subordinated debt
that is not part of the mortgage pool. In all cases, the holder of any material
subordinated debt has agreed not to foreclose for so long as the related
mortgage loan is outstanding and the trust is not pursuing a foreclosure
action. 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.
The following table indicates those mortgaged properties that are known to
the depositor to be encumbered by secured subordinate debt, the initial
principal amount of the secured subordinate debt and the cut-off date principal
balances of the related mortgage loans.
SECURED SUBORDINATE DEBT
<TABLE>
<CAPTION>
INITIAL
PRINCIPAL
% OF AMOUNT OF
INITIAL SECURED
CONTROL LOAN CUT-OFF DATE POOL SUBORDINATE
NUMBER NUMBER PROPERTY NAME BALANCE BALANCE DEBT
- --------- -------- ---------------------------------------- -------------- --------- ------------
<S> <C> <C> <C> <C> <C>
8 23439 Citation Club on Palmer Ranch $17,050,000 1.92% $750,000
13 23384 Concorde Place Apartments $12,897,774 1.46% $325,000
43 25196 SunTrust/Gateway Operations Center $ 6,389,543 0.72% $600,000
65 23273 Building 100 (Main Street NoviProject) $ 4,421,066 0.50% $200,000
</TABLE>
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. One of
the mortgage loans having a cut-off date balance of $18,904,581, and
representing approximately 2.13% of the initial pool balance, permits the
borrower to incur unsecured subordinated debt and/or mezzanine debt secured by
equity interests in the borrower if the sum of all mezzanine, subordinated and
other debt secured by the mortgaged property does not exceed 80% of the lesser
of the (a) fair market value of the property determined by the lender and (b)
the most recent purchase price of the property. Some of the mortgage loans also
permit the owner of the borrower to incur "mezzanine debt" secured by the
ownership interest in the borrower. This financing effectively reduces the
indirect equity interest of any such owner in the related mortgaged property.
No such "mezzanine debt" is included in the mortgage pool. At the time such
mezzanine or subordinated debt is incurred, the DSCR for that mortgage loan may
not be less than 1.20x and the total DSCR (on a pro forma basis) must not be
less than 1.10x. Subject to these tests, there is no cap on the amount of
unsecured subordinated debt or mezzanine debt that may be incurred.
In addition, the depositor is aware that owners of the borrower under one
mortgage loan representing 4.17% of the initial pool balance have incurred
mezzanine debt. See "--Significant Mortgage Loans--The First Union Tower Loan"
below.
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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 risk" and "--Mezzanine debt secured by equity in the borrower may
increase risk" in this prospectus supplement and "Legal Aspects of Mortgage
Loans--Subordinate Financing" in the prospectus.
GROUND LEASES
Seven mortgaged properties securing mortgage loans, which represent 3.39%
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.
Two mortgaged properties securing mortgage loans, which represent 4.55% of
the initial pool balance, are subject to the lien of either:
o a mortgage on both the borrower's leasehold interest and the ground
lessor's fee simple interest in the mortgaged property or
o a mortgage on both the borrower's leasehold interest in a portion of
the mortgaged property and the borrower's fee simple interest in the
remaining portion of 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, typically, has agreed
to give the holder of the mortgage loan notice of, and has granted such holder
the right to cure, any default or breach by the lessee.
LOAN DOCUMENTATION
Except as otherwise described under "Terms and Conditions of the Mortgage
Loans--Related Borrowers, Cross-Collateralized Mortgage Loans and Mortgage
Loans Collateralized by Multiple Properties," each mortgage loan is evidenced
by a promissory note and secured by a mortgage, deed of trust or similar
security instrument that creates a first mortgage lien on a fee simple and/or
leasehold interest in a multifamily, retail, office, industrial, warehouse,
hospitality or other commercial property.
SIGNIFICANT MORTGAGE LOANS
The 80 Lafayette Street Loan
The Loan. The "80 Lafayette Street loan" representing 5.47% of the initial
pool balance was originated by GMACCM on October 14, 1999 and has a principal
balance as of the cut-off date of approximately $48,443,653. The 80 Lafayette
Street loan is a balloon loan with a maturity date of November 10, 2009 and is
secured by, among other things, a fee mortgage encumbering a 261 unit
multifamily building with retail space located in New York City, New York. The
80 Lafayette Street loan was made to Lafayette 80", LLC, a special purpose
bankruptcy remote limited liability company.
Payment and prepayment terms for the 80 Lafayette Street loan are set
forth on Annex A.
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The 80 Lafayette Street Property. The 80 Lafayette Street property is a
multifamily high rise building with 261 units and approximately 8,750 square
feet of ground floor retail space. The property was built in 1915 and was
renovated in 1999. As of the cut-off date, the residential portion of the 80
Lafayette Street property was 100% master leased to New York University or
"NYU" for student housing purposes. NYU, as sublessor, leases individual units
to students. The rental obligations of NYU under the master lease are not
affected by occupancy of individual units. The current configuration of the
residential and retail space constitutes a legal non-conforming use of the
property.
Defeasance. The 80 Lafayette Street borrower may obtain the release of the
80 Lafayette Street property from the lien of the mortgage by exercising a
defeasance option on or after the second anniversary of the delivery date.
Value. The 80 Lafayette Street loan has a 66.27% cut-off date LTV. An
appraisal performed in August, 1999 determined a value for the 80 Lafayette
Street property of $73,100,000.
Underwritten NCF and DSC Ratio. The 80 Lafayette Street loan has an
underwritten NCF DSCR of 1.29x, and an underwritten NCF of $5,656,662.
Property Management. The 80 Lafayette Street property is managed by Coral
Realty, LLC, an affiliate of the borrower, which has subordinated its
contractual right to management fees to the lien of the mortgage.
Master Lease. Under the terms of a master lease between the borrower and
NYU, NYU has the right to terminate the lease as to up to 132 units effective
as of January 31, 2002, with a pro rata reduction of rent. The master lease
expires under its terms on August 31, 2002. NYU has five consecutive renewal
options for not fewer than 132 units under the master lease for additional
terms of one year.
NYU must exercise each option not later than 90 days prior to expiration
of the then current term. In the event of a casualty affecting 10 or more
units, NYU may terminate the master lease as to the entire building if such
units are not repaired within 30 days. The borrower carries business
interruption insurance in the amount of $8,500,000, covering units that are
uninhabitable due to casualty damage.
Debt Service Reserve. The borrower has deposited $600,000 in a reserve
account, and is required to deposit an additional $18,182 per month for the
initial 33 months of the loan (coinciding with the scheduled termination of the
NYU master lease), as a "debt service reserve". Funds in this account are
pledged as additional security for the loan. The borrower is entitled to the
release of these funds if, for any three month period following the date NYU
vacates the space, the lender has determined that the debt service coverage
ratio for the 80 Lafayette Street loan is at least 1.30x for that three month
period.
Lockbox. All rents payable by NYU and the retail tenants of the 80
Lafayette Street property are required to be deposited directly into a lockbox
account. The borrower has the right to dispose of funds in the lockbox account
until the lender terminates this right after a default under the loan.
The Equity Inns Loan Participation
The Participation. The "Equity Inns loan participation" representing 5.43% of
the initial pool balance has a principal balance as of the cut-off date of
$48,129,553 and represents a 50% participation interest in each of two mortgage
loans which were
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originated by GMACCM on June 16, 1999. The remaining 50% participation interest
in the Equity Inns mortgage loans is held by the 1999-C3 trust fund. The terms
of the participation agreement provide that GMACCM will act as servicer and
special servicer of the Equity Inns mortgage loans on behalf of the holders of
each participation interest and will service the Equity Inns mortgage loans in
accordance with the servicing standard and provisions of the 1999-C3 pooling
and servicing agreement. The servicing standard under the 1999-C3 pooling and
servicing agreement is the same as the servicing standard under the pooling and
servicing agreement for the 2000-C1 certificates. See "Description of the
Mortgage Pool--Loan Participation Interest," "Servicing of the Mortgage
Loans--Termination of the Servicer with Respect to Specially Serviced Mortgage
Loans and REO Properties" and "Risk Factors--The controlling class does not
have the right to appoint the special servicer for the Equity Inns mortgage
loans or to acquire the Equity Inns mortgage loans upon an event of default" in
this prospectus supplement.
The two Equity Inns mortgage loans are evidenced by two promissory notes,
each of which is payable by both of the Equity Inns borrowers, with principal
balances as of the cut-off date of $1,904,942 and $46,224,611. Each of the 19
mortgages is cross-collateralized and cross-defaulted. The two Equity Inns
mortgage loans are ARD loans with anticipated repayment dates of July 1, 2009
and maturity dates of July 1, 2024, and are secured by, among other things,
mortgages encumbering the respective borrower's fee ownership interest in 17
properties and its leasehold interest in two other properties. The Equity Inns
hotels consist of 19 hotels located in 13 states. The Equity Inns mortgage
loans were made to two special purpose bankruptcy remote limited partnerships
owned by Equity Inns, Inc. Equity Inns, Inc. is a publicly traded real estate
investment trust on the New York Stock Exchange, listed under the symbol "ENN".
Payment and prepayment terms for the Equity Inns loan participation are
set forth on Annex A.
The Equity Inns Properties. The Equity Inns properties consist of 19
flagged hotels located in thirteen states and described in the table below.
Five of the hotels are operated under the AmeriSuites name, six are operated as
Hampton Inns, three are operated as Homewood Suites and five carry the
Residence Inns brand name. All of the hotels were constructed between 1985 and
1996. The Equity Inns properties range in size from 96 rooms to 208 rooms and
have a total of 2,453 rooms.
S-49
<PAGE>
<TABLE>
<CAPTION>
CUT-OFF DATE
NO. AVERAGE ALLOCATED
OF YEAR YEAR OCCUPANCY ADR REVPAR PARTICIPATION
HOTEL NAME LOCATION ROOMS BUILT RENOVATED RATE (1) (1)(2) (1)(3) AMOUNT
- ----------------- ------------------- ------- -------------- ------------- ----------- ----------- ----------- ------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
AmeriSuites Indianapolis, IN 126 1992 1998-1999 64.50% $ 83.52 $ 53.91 $ 1,904,942.11
AmeriSuites Overland Park, KS 126 1993-1994 1998-1999 69.60 78.81 54.83 1,780,922.44
AmeriSuites Columbus, OH 126 1994 1998-1999 70.60 78.61 55.51 2,306,765.83
AmeriSuites Memphis, TN 128 1996 NAP 62.30 78.85 49.11 1,716,432.21
AmeriSuites Glen Allen, VA 126 1991 1998 71.20 79.15 56.33 2,683,785.63
Hampton Inn Overland Park, KS 134 1990 1998-1999 67.20 73.95 49.72 2,187,706.95
Hampton Inn Kansas City, MO 120 1987 1997 62.80 74.77 46.92 1,795,804.80
Hampton Inn Memphis, TN 126 1985 1997-1998 74.70 77.31 57.72 2,356,373.70
Hampton Inn Richardson, TX 130 1987 1998-1999 62.40 65.93 41.16 1,547,765.46
Hampton Inn Morgantown, WV 108 1991 1998 72.70 73.94 53.75 2,009,118.63
Hampton Inn Northville, MI 125 1989 1997-1998 76.50 74.46 57.00 2,202,589.31
Homewood Suites Phoenix, AZ 124 1996 NAP 72.30 108.39 78.32 3,537,040.95
Homewood Suites Sharonville, OH 111 1990 1998-1999 70.00 80.97 56.65 1,646,981.20
Homewood Suites San Antonio, TX 123 1996 NAP 73.80 83.77 61.82 2,053,765.71
Residence Inn Tucson, AZ 128 1985 1992 & 1999 86.60 81.41 70.49 2,644,099.33
Residence Inn Eagan, MN 120 1987 1995-1996 81.00 89.93 72.85 3,224,511.38
Residence Inn Tinton Falls, NJ 96 1988 1998-1999 83.40 107.49 89.63 2,331,569.77
Residence Inn Portland, OR 168 1990 1998 78.90 111.59 88.00 5,253,473.16
Residence Inn Princeton, NJ 208 1988 & 1990 1998 71.80 113.59 81.50 4,945,904.39
--- ----------- --------- ----- ------- -------- ---------------
Total/Weighted 2,453 73.37% $ 89.63 $ 66.14 $ 48,129,552.96
===== ===== ======= ======== ===============
</TABLE>
- ----------
(1) Through November, 1999
(2) Average daily rate
(3) Revenue per available room
Property Management. Five of the hotels are leased by the applicable
Equity Inns borrower to Wayne Holding Corp., a subsidiary of Prime Hospitality
Corp. under an operating lease. Each of these operating leases has a term that
expires on December 30, 2007, except for the lease on the AmeriSuites property
located in Memphis, Tennessee, which expires on June 30, 2008. Prime
Hospitality Corp. is an owner, manager and franchisor of hotels. Prime
Hospitality Corp. is a publicly traded company listed on the NYSE under the
symbol "PDQ."
The remaining fourteen properties are leased to subsidiaries of Interstate
Hotels Management, Inc. under operating leases that terminate on or after
November 30, 2011. Interstate Hotels Management, Inc. is a publicly traded
company listed on the NASDAQ under the symbol "IHCO."
Eleven of these fourteen properties are managed by Crossroads Hospitality
Company, LLC, an affiliate of the lessees, under management agreements that
will expire on December 31, 2011. The manager is entitled to receive a base
management fee of 6.0% of gross operating revenues under the agreement. Under
its terms, each agreement is subordinated to the operating lease and permits
the borrower to terminate the manager in the event of a default by Interstate
Hotels under the lease. The remaining three properties are managed by Promus
Hotels, Inc., which is also the franchisor for such properties under separate
management agreements, the terms of which run until 2011. The management
agreements may be terminated without penalty in the event of a foreclosure or a
deed in lieu thereof.
Each of the operating leases for Wayne Holding and Interstate has been
subordinated to the applicable Equity Inns mortgage pursuant to a
subordination, nondisturbance and attornment agreement. Each agreement grants
the lender the right to receive
S-50
<PAGE>
notice from the applicable tenant of defaults by the borrower under the lease,
and grants the lender rights to cure such defaults. Subject to the mortgagee's
obligation to recognize a non-defaulting tenant upon foreclosure of the
mortgage, the agreement subordinates the tenant's leasehold interest to that of
the mortgagee. Each agreement prohibits amendment of the lease without the
mortgagee's consent and, in the case of the agreements to which Crossroads is a
party, provides that casualty proceeds shall be made available for restoration
of the property, provided that the franchise remains in place or a suitable
substitute is found.
Defeasance. The Equity Inns borrowers may obtain the release of one or
more of the Equity Inns properties from the lien of the related mortgage by
exercising a defeasance option on or after the third anniversary of the loans'
origination dates and before the anticipated repayment date if:
o the servicer determines that the DSCR for the remaining properties that
are not released is at least 1.90x; or
o the borrower has provided additional defeasance collateral that would
generate, together with the properties that are not released, cash flow
sufficient to achieve a DSCR of at least 1.90x.
To exercise a defeasance option on an Equity Inns property, the applicable
borrower must deliver defeasance collateral in a principal amount equal to 125%
of the outstanding portion of the allocated loan amount for that property. See
"Description of the Mortgage Pool--Defeasance."
Releases and Substitutions. On or after the third anniversary of the
loans' origination dates and before the anticipated repayment date, the Equity
Inns borrowers may obtain a release of one or more of the Equity Inns
properties from the lien of the Equity Inns mortgages upon the substitution of
its fee ownership interest in another hotel property for each property
released, if, among other things, the following conditions are satisfied:
o the allocated loan amount of the released properties for any particular
substitution is not greater than $25,000,000 and the total allocated
loan amount of all properties released over the term of the loan is not
greater than $50,000,000;
o the substitute property is a hotel property with substantially the same
level of services and amenities, a franchise from a
nationally-recognized hotel franchisor and with net cash flow and
property valuations that are substantially similar to the property to
be released;
o delivery of a Phase I environmental report on the substitute property
acceptable to the servicer;
o delivery of a structural and engineering report on the substitute
property acceptable to the servicer together with 125% of the cost of
immediate repairs recommended by the report;
o delivery of an appraisal acceptable to the servicer reflecting an LTV
on the Equity Inns mortgage loans not in excess of 55%, after giving
effect to the replacement; and
o confirmation from the rating agencies that the substitution will not
result in a withdrawal, downgrade or qualification of the ratings on
the certificates.
S-51
<PAGE>
Value. The Equity Inns loans have a 48.95% cut-off date LTV. An appraisal
performed in April, 1999 determined a value for the Equity Inns properties of
$196,800,000.
Underwritten NCF and DSC Ratio. The Equity Inns loans have an underwritten
NCF DSCR of 1.90x, and an underwritten NCF of $8,904,251.
Lockbox. All rents payable by and under the operating leases of the Equity
Inns properties are required to be deposited directly into a lockbox account
controlled by the servicer.
Franchise Agreements. Each of the hotel properties is operated under a
hotel franchise agreement that grants a license to operate the hotel as part of
a nationally-recognized chain.
The five hotel properties leased to Wayne Holding Corp. are licensed to
operate as AmeriSuites under separate franchise agreements between Wayne and
AmeriSuites Franchising, Inc., each dated June 16, 1999 and expiring ten years
thereafter. Each franchise agreement may be renewed for a successive ten year
term upon payment of a renewal fee and also grants Wayne an exclusive area of
operation. Under the franchise agreements, Wayne is required to pay various
fees based upon gross room sales including a continuing royalty of 5%, a
marketing contribution of 2% and reservation system fee of 1 1/2%. A "comfort
letter" delivered to the lender in connection with the loan closing gives the
lender the right to notice of defaults and the right to cure defaults on the
part of Wayne. The letter also gives the lender or a subsequent holder of the
mortgage loan the right, upon foreclosure or deed in lieu thereof, to enter
into a replacement franchise agreement for the balance of the term upon payment
of a nominal fee.
Of the remaining 14 properties leased to subsidiaries of Interstate Hotels
Management, Inc., five are licensed to operate as Residence Inns by Marriott.
The franchise agreements for the properties licensed as Residence Inns by
Marriott, except the Princeton, New Jersey location, each have terms that
expire not earlier than 2013. The mortgage loan documents provide that it is a
default if that franchise agreement is either not renewed prior to its current
expiration or if it is not replaced by a substitute franchisor acceptable to
the servicer and the rating agencies. Fees under the Marriott franchise
agreements include a continuing royalty of 5% and a marketing fund contribution
of 2 1/2% of gross room revenues. A "comfort letter" delivered to the lender by
Marriott gives notice and cure rights to the lender and provides for operation
of the properties as Residence Inns during and after a foreclosure subject to
payment of various fees, including an application fee. If a subsequent owner is
other than the lender or its wholly owned subsidiary, they may apply for a new
Residence Inn franchise agreement that will be processed in accordance with
then prevailing franchisee requirements.
Six of the remaining nine properties leased to subsidiaries of Interstate
Hotels Management, Inc. are licensed as Hampton Inns and three are licensed as
Homewood Suites, each pursuant to franchise agreements between the respective
lessee and Promus Hotels, Inc. The earliest expiration of any of these
franchise agreements is in 2010. Fees under these franchise agreements include
a 4% continuing royalty and 4% marketing/ reservation contribution, each
calculated on gross room revenues. "Comfort letters" delivered to the lender
give notice and cure rights to the lender and give lender or the trust the
right, upon foreclosure or deed in lieu thereof, to enter into a replacement
S-52
<PAGE>
franchise agreement for the balance of the term upon payment of a nominal fee.
A subsequent owner other than the lender or the trust may apply for a new
franchise agreement with Promus Hotels, Inc. that will be processed in
accordance with then prevailing franchisee requirements.
Ground Lease Considerations. Two of the properties, Tinton Falls, New
Jersey and Phoenix, Arizona, are subject to ground leases. The Tinton Falls
ground lease expires not earlier than 2027, and provides for successive
extensions through 2062. The Phoenix ground lease expires in 2062. Both ground
leases provide notice and cure rights for a mortgagee, and, in connection with
the making of the loan, estoppel certificates were delivered by the respective
ground lessors confirming that no defaults existed under the ground leases.
The First Union Tower Loan
The Loan. The "First Union Tower loan" representing 4.17% of the initial
pool balance was originated by GACC on December 30, 1999, and has a principal
balance as of the cut-off date of approximately $36,959,753. The First Union
Tower loan is an ARD loan with an anticipated repayment date of January 1, 2010
and a maturity date of January 1, 2030. The "First Union Tower borrower" is
Crow-Chesapeake Holdings, LLC. The "First Union Tower guarantor" is
Crow-Chesapeake Associates Limited Partnership, the owner of the property and
the sole member and 100% owner of the First Union Tower borrower. The First
Union Tower loan was structured as an "Indemnity Deed of Trust" to avoid the
imposition of certain mortgage recordation taxes in the State of Maryland.
Under this structure, the First Union Tower guarantor executed an indemnity
guaranty in favor of GACC guaranteeing the $37,000,000 senior loan made by GACC
to the First Union Tower borrower. The indemnity guaranty is secured by, among
other things, an indemnity deed of trust from the First Union Tower guarantor
in favor of GACC, encumbering the First Union Tower guarantor's fee and
leasehold interests in an office building located in Baltimore, Maryland. Each
of the First Union Tower borrower and the First Union Tower guarantor are
special purpose bankruptcy remote entities affiliated with Trammel Crow, an
internationally diversified commercial real estate services company.
Payment and prepayment terms for the First Union Tower loan are set forth
on Annex A.
The First Union Tower Property. The First Union Tower property is a
19-story office building located in the central business district of Baltimore,
Maryland. The property was built in 1985 and consists of approximately 377,684
net rentable square feet. Tenants at the First Union Tower property include
First Union National Bank, PricewaterhouseCoopers and Salomon Smith Barney.
First Union National Bank occupies 103,259 gross leasable square feet. First
Union National Bank master leases an additional 73,691 gross leasable square
feet that is subleased to seven tenants.
The following table summarizes the breakdown of the gross leasable area,
or "GLA" and base rent information of the ten largest tenants at the First
Union Tower property:
S-53
<PAGE>
TEN LARGEST TENANTS BASED ON ANNUALIZED BASE RENT
<TABLE>
<CAPTION>
APPROXIMATE ANNUALIZED
LEASE TENANT % OF ANNUALIZED % OF TOTAL BASE RENT
TENANT NAME EXPIRATION GLA(SF) GLA BASE RENT BASE RENT PER SF
- ------------------------------ ------------ --------- ----------- ------------ ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
First Union National Bank 8/31/2014 103,259 27.34% $2,321,786 28.56% $ 22.49
Whiteford, Taylor & Preston 1/31/2006 78,116 20.68 1,620,907 19.94 20.75
Development Design Group,
Inc.(1) 3/31/2003 31,247 8.27 687,434 8.46 22.00
McGuire, Woods & Battle 2/28/2009 28,758 7.61 603,918 7.43 21.00
Credit Suisse First Boston
Corp.(1) 11/30/2005 19,455 5.15 428,010 5.26 22.00
PricewaterhouseCoopers 5/31/2002 17,512 4.64 350,240 4.31 20.00
Salomon Smith Barney 12/31/2006 12,392 3.28 231,111 2.84 18.65
Allegiance Telecom(1) 11/30/2005 9,330 2.47 205,260 2.52 22.00
Adams Express 6/30/2001 10,606 2.81 193,560 2.38 18.25
Stewart, Plant & Blumenthal(1) 10/31/2005 7,272 1.93 159,984 1.97 22.00
Totals
----- ----- --------
317,947 84.18% $6,802,209 83.66%
======= ===== ========== =====
</TABLE>
- ----------
(1) Subleased from First Union National Bank.
The following table summarizes information related to the expiration of
tenant leases of the First Union Tower property:
LEASE EXPIRATION SCHEDULE
<TABLE>
<CAPTION>
YEAR NUMBER OF LEASES EXPIRING SF % OF TOTAL SF ANNUALIZED BASE RENT % OF TOTAL BASE RENT
- ------- ------------------ ------------- --------------- ---------------------- ---------------------
<S> <C> <C> <C> <C> <C>
2000 1 1,277 0.34% $ 28,094 0.35%
2001 5 22,365 5.92 434,366 5.34
2002 3 19,370 5.13 393,634 4.84
2003 1 31,247 8.27 687,434 8.46
2004 0 0 0.00 0 0.00
2005 3 36,057 9.55 793,254 9.76
2006 2 90,508 23.96 1,852,018 22.78
2009+ 2 132,017 34.95 2,925,704 35.99
</TABLE>
Defeasance. The First Union Tower guarantor may obtain the release of the
First Union Tower property from the lien of the indemnity deed of trust by
exercising a defeasance option on or after January 1, 2004.
Value. The First Union Tower loan has a 67.82% cut-off date LTV. An
appraisal performed in December, 1999 determined a value for the First Union
Tower property of $54,500,000.
Underwritten NCF and DSC Ratio. The First Union Tower loan has an
underwritten NCF DSCR of 1.34x and an underwritten NCF of $4,792,223.
Property Management. The First Union Tower property is managed by TC-
MidAtlantic, Inc., which is partially owned by affiliates of the First Union
Tower guarantor.
Lockbox; Certain Reserves. All rents payable by tenants of the First Union
Tower property are required to be deposited into a lockbox account controlled
by the servicer.
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<PAGE>
Funds in the lockbox account will be allocated according to a cash management
agreement to pay debt service on the loan and to fund certain tax, insurance,
air rights rent, replacement, tenant improvement and leasing commission
reserves and any operating expenses.
Tenant Improvement and Leasing Commission Reserve. The First Union Tower
guarantor has deposited $2,500,000 into a tenant improvement and leasing
commission reserve account and is required to make monthly deposits of $18,750
into the reserve account until the balance of the reserve account (including
the initial deposit) reaches $2,750,000. Prior to January 31, 2006, the First
Union Tower guarantor is not entitled to receive disbursements from the reserve
account if such disbursements would cause the balance then on deposit to fall
below $1,900,000, unless the First Union Tower guarantor has delivered to the
servicer satisfactory evidence that either Whiteford, Taylor, Preston has
renewed or extended its lease to a date that is at least one year beyond the
anticipated repayment date or the Whiteford, Taylor Preston space has been
re-leased to a replacement tenant with terms satisfactory to the servicer.
Leasehold Considerations/Air Rights Rent Reserve. The First Union Tower
loan is secured, in part, by the First Union Tower guarantor's leasehold
interest created pursuant to an air rights lease between the Mass Transit
Administration, an instrumentality of the Maryland Department of
Transportation, as landlord, and the First Union Tower guarantor, as tenant.
The air rights lease has a 99-year term and expires in April, 2083. The First
Union Tower guarantor is obligated to make monthly deposits into a reserve fund
of one-twelfth of the amount that the servicer estimates will be payable during
the next twelve months in order to accumulate sufficient funds to pay the First
Union Tower guarantor's rental obligations under the air rights lease.
Mezzanine Financing. A mezzanine loan in the principal amount of
$5,800,000 was made by First Union Development Corporation ("FUDC"), an
affiliate of First Union National Bank, to the First Union Tower guarantor on
December 29, 1999. The mezzanine loan is secured by a portion of the general
and limited partnership interests in the First Union Tower guarantor. The
maturity date of the mezzanine loan is January 1, 2007 and such maturity date
may be extended to January 1, 2012 upon the satisfaction of certain conditions.
Interest accrues on the outstanding principal balance of the mezzanine loan at
the rate of 9.03% per annum, subject to adjustment if the maturity date is
extended.
The First Union Tower guarantor is required to make scheduled monthly
payments on the mezzanine loan in the amount of $32,271.29, subject to
adjustment if the maturity date of the mezzanine loan is extended, and to pay,
to the extent of net cash flow, any accrued interest and, until the outstanding
principal amount of the mezzanine loan is reduced to $4,000,000, the
outstanding principal of the loan.
Pursuant to a cash management agreement, the First Union Tower guarantor
must cause all rents from the First Union Tower property to be paid into a
lockbox controlled by the servicer. On a monthly basis, after all payments
required to be made on the First Union Tower loan have been made, and after
deductions for operating expenses, and provided there is no event of default on
the First Union Tower loan, the anticipated repayment date of the First Union
Tower loan has not occurred, or the DSCR on the First Union Tower loan has not
dropped below 1.15x (each of the foregoing, a "trigger
S-55
<PAGE>
event"), the servicer will pay the scheduled monthly payment as directed by
FUDC and any remaining monies will be transferred to a lockbox established
pursuant to the mezzanine loan agreement. If a trigger event has occurred, such
remaining monies will be held and applied by the servicer in accordance with
the mortgage loan documents.
FUDC entered into a subordination and intercreditor agreement with the
GACC which, among other things, subordinates the loan documents to the First
Union Tower loan and prohibits payments under the mezzanine loan so long as a
monetary default under the First Union Tower loan has occurred and is
continuing. If an event of default occurs under the First Union Tower loan and
the servicer accelerates the First Union Tower loan, FUDC has the nonexclusive
right (but not the obligation) to purchase the First Union Tower loan upon
payment to the servicer of all amounts then due under the First Union Tower
loan (including any prepayment premiums and fees) and any and all amounts due
in connection with the sale of the First Union Tower loan pursuant to the
pooling and servicing agreement. FUDC's right to purchase the First Union Tower
loan may be exercised by written notice to the servicer of its intention to do
so and payment of the purchase price within twenty days thereafter or, within
ten days if the servicer intends to accept a deed of trust property in lieu of
a foreclosure of the senior deed of trust, and in any event before the earlier
of the issuance of a final judgment of foreclosure of the senior deed of trust
or the conduct of a foreclosure sale. While the First Union Tower loan is
outstanding, FUDC may not generally take any enforcement actions upon a default
under the mezzanine loan provided that FUDC may enforce the pledge of certain
ownership interests in the First Union Tower guarantor as security for the
mezzanine loan upon the satisfaction of certain conditions, including written
confirmation that the acquisition of such partnership interests will not result
in any qualification, reduction or withdrawal of any rating of the
certificates.
The World Savings Center Loan
The Loan. The "World Savings Center loan," representing approximately
3.32% of the initial pool balance, was originated by Archon Financial L.P. on
October 4, 1999. The principal balance as of the cut-off date is approximately
$29,425,174. The World Savings Center loan is a balloon loan with a maturity
date of November 1, 2010. The World Savings Center loan is secured by, among
other things, a mortgage encumbering the borrower's fee ownership interest in a
17-story office building located in Oakland, California. The World Savings
Center loan was made to Prentiss Properties Acquisition Partners, L.P. Prentiss
Properties Acquisition Partners, L.P. is majority-owned by Prentiss Properties
Trust, a publicly traded real estate investment trust on the New York Stock
Exchange, listed under the symbol "PP." The borrower is not a special purpose
entity. The borrower and guarantor are obligated to fund certain reserves and
to provide additional credit supports described below in "Lockbox; Financial
Covenants." The borrower and guarantor are also obligated to maintain certain
financial covenants as described below in "Lockbox; Financial Covenants".
Payment and prepayment terms for the World Savings Center loan are
described on Annex A.
The World Savings Center Property. The World Savings Center property
consists of approximately 270,485 net rentable square feet of office space and
a 232 space three-level subterranean parking facility located in the central
business district of Oakland, California. The World Savings Center property was
constructed in 1986. The World Savings Center property was approximately 100%
occupied as of December 31, 1999.
S-56
<PAGE>
The following table summarizes the breakdown of the gross leasable area,
or "GLA" and base rent information of the ten largest tenants of the World
Savings Center property:
TEN LARGEST TENANTS BASED ON ANNUALIZED BASE RENT
<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>
World Savings and Loan 12/31/2007 147,517 54.54% $3,670,223 54.46% $ 24.88
Burnham & Brown 12/14/2004 48,891 18.08 1,228,875 18.23 25.13
Carol Williams 01/31/2003 14,207 5.25 366,541 5.44 25.80
Robbins, Palmer, Allen 07/31/2003 13,907 5.14 361,249 5.36 25.98
Lawrence Johnson 04/21/2002 11,707 4.33 252,871 3.75 21.60
Bjork Lawrence Attorneys at
Law 12/31/2005 5,840 2.16 173,098 2.57 29.64
Transpacific Carrier Services,
Inc. 10/31/2004 3,142 1.16 97,276 1.44 30.96
Bennet & Johnson 05/31/2000 4,230 1.56 88,830 1.32 21.00
Prentiss Properties 11/30/2004 3,820 1.41 87,096 1.29 22.80
DNA Plant Technology 01/31/2001 2,622 0.97 80,548 1.20 30.72
------- ----- ---------- ----- --------
Totals 255,883 94.60% $6,406,607 95.06%
======= ===== ========== =====
</TABLE>
The following table summarizes information related to the expiration of
the tenant leases of the World Savings Center 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 3 8,271 3.06% $ 190,599 2.83%
2001 3 4,278 1.58 113,330 1.68
2002 4 15,464 5.72 343,888 5.10
2003 4 28,114 10.39 727,790 10.80
2004 3 58,460 21.61 1,413,247 20.97
2005 1 5,840 2.16 173,098 2.57
2007 2 148,175 54.78 3,680,093 54.60
</TABLE>
World Savings and Loan Lease. The lease with World Savings and Loan
expires in December 2007. In addition, World Savings and Loan has the option to
surrender one floor (approximately 16,385 square feet) per year for three
years, commencing in 2002. Surrender of any of the three floors requires 18
months advance notice. If World Savings and Loan surrenders two floors, the
World Savings Center loan requires the borrower to provide a letter of credit
equal to $490,000, and if it surrenders three floors, to provide a letter of
credit equal to $980,000. The World Savings and Loan lease expires in 2007. If
World Savings and Loan elects not to renew its lease, it must provide 18 months
prior notice. If World Savings and Loan does not elect to renew its lease, the
World Savings Center loan requires the posting of a $3 million letter of
credit, among other credit support which includes a partial recourse guarantee
for up to $5 million, less the letter of credit and amounts funded in the
tenant improvement reserve. Any letter of credit required under the World
Savings Center loan is to be provided by an entity with an S&P rating of at
least "A-".
S-57
<PAGE>
Defeasance. The borrower may obtain the release of the World Savings
Center property from the lien of the mortgage by exercising a defeasance option
on or after the second anniversary of the delivery date.
Value. The World Savings Center loan has a cut-off date LTV of
approximately 61.95% calculated based on the principal balance of the World
Savings Center loan as of the cut-off date. An appraisal performed in
September, 1999 determined a value for the World Savings Center property of
approximately $47,500,000.
Underwritten NCF and DSC Ratio. The World Savings Center loan has an
underwritten NCF DSCR of 1.47x and an underwritten NCF of $3,783,775.
Lockbox; Financial Covenants. All rents payable by tenants of the World
Savings Center property are required to be deposited directly into a clearing
account controlled by the servicer. Prior to receipt of notice from the
servicer that an event of default has occurred, that the borrower or Prentiss
Properties Trust, the guarantor, breached special financial covenants or that
the borrower failed to deliver any required letter of credit, the clearing bank
is required to remit, on a weekly basis, amounts on deposit in the clearing
account to the borrower. Following an event of default, the breach of special
financial covenants by the borrower or the guarantor, or failure by the
borrower to deliver any required letters of credit, amounts on deposit in the
clearing account are required to be swept directly into a lockbox account
controlled by the servicer. These special financial covenants include
maintaining a net worth of $500,000,000, a fixed charge coverage ratio of not
less than 1.50x and a liability to assets ratio of 0.60x during the first five
years of the loan and 0.65x after the first five years, prohibiting the
acceleration of the maturity of any recourse indebtedness of the borrower in
excess of $10,000,000 and prohibiting the acceleration of the maturity of any
two indebtedness obligations of the borrower in excess of $30,000,000 in the
aggregate. In addition, if quarterly net income of the World Savings Center
property is less than $3,122,000 on an annualized basis (which would
approximate a debt service coverage ratio of 1.21x), amounts on deposit in the
clearing account are required to be swept directly into the lockbox account
controlled by the servicer. These funds will be released to the borrower when
the quarterly net income of the World Savings Center property is equal to
$3,532,000 on an annualized basis (which would approximate a debt service
coverage ratio of 1.37x).
Property Management. The World Savings Center property is managed by
Prentiss Properties Management, L.P.
Tenant Improvement Reserves. The borrower is required to make deposits
into a tenant improvement and leasing commission reserve in an amount equal to
$25,000 during the first year, with such amount increasing by $25,000 annually,
until the amount in such reserve equals $200,000. Prentiss Properties Trust and
Prentiss Properties Acquisition Partners, L.P. are recourse obligors for the
funding of $980,000 of unfunded tenant improvements under certain leases with
respect to the World Savings Center property. If the quarterly net income of
the World Savings Center property is less than $4,107,000 on an annualized
basis (which would approximate a debt service coverage ratio of 1.59x), the
World Savings Center loan requires the borrower to provide a letter of credit
in the amount of the unfunded tenant improvement obligation.
The Freeman Webb Loan
The Loan. The "Freeman Webb loan" representing 3.22% of the initial pool
balance was originated by GMACCM on October 1, 1999 and has a principal balance
as
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of the cut-off date of approximately $28,500,000. The Freeman Webb loan is a
balloon loan with a maturity date of October 10, 2009. The loan requires
payments of interest only through but not including its due date in November,
2001 and is secured by, among other things, a single fee mortgage encumbering
three garden-style apartment complexes located in Knoxville, Nashville and
Madison, Tennessee. The Freeman Webb loan was made to British Highland Wind,
L.P., a special purpose bankruptcy remote limited partnership.
Payment and prepayment terms for the Freeman Webb loan are set forth on
Annex A.
The Freeman Webb Properties. The Windover Apartments, located in
Knoxville, consists of 271 units in 23 buildings. It was built in 1974 and
renovated during 1997 through 1999. As of July 31, 1999, it was 94% occupied.
The British Woods Apartments, located in Nashville, consists of 263 units in 22
buildings. It was built in 1983 and renovated during 1997 through 1999. As of
July 31, 1999, the property was 93% occupied. The Highland Ridge Apartments,
located in Madison, consists of 280 units in 17 buildings. It was built in 1972
and renovated during 1997 through 1999. As of July 31, 1999 it was 96%
occupied. The Highland Ridge Apartments are situated in a zoning area that does
not permit new construction of multifamily properties but is a legal,
non-conforming use of the property under local zoning regulations. If 50% or
more of a building were destroyed, the building could not be rebuilt under
existing zoning rules. The borrower applied for revision to the zoning
classification of the subject that would make the property a "legal, conforming
use," which was approved by the local planning commission, and is awaiting a
ruling on its application by the local governmental council.
Defeasance. The Freeman Webb borrower may obtain the release of the
Freeman Webb properties from the lien of the mortgage by exercising a
defeasance option on or after the second anniversary of the delivery date.
Value. The Freeman Webb loan has a 78.49% cut-off date LTV. An appraisal
performed in August, 1999 determined a value for the Freeman Webb properties of
$36,310,000.
Underwritten NCF and DSC Ratio. The Freeman Webb loan has an underwritten
NCF DSCR of 1.20x and an underwritten NCF of $2,964,503.
Property Management. The Freeman Webb properties are managed by Freeman
Webb, Co., Realtors, an affiliate of the borrower.
Partial Releases. The mortgage permits the borrower to request release of
one or more of the properties by payment of a defined allocable percentage (for
each released property) times the amount due under the note. The note permits
one or more of the Freeman Webb properties to be released from the lien of the
mortgage upon 60 days notice and prepayment of the applicable allocated note
amount plus a specified premium. The principal balance of the loan is allocated
29.9% to Highland Ridge Apartments, 35.1% to British Woods Apartments and 35.0%
to Windover Apartments. The premium to be paid by the borrower is 10% if the 12
month trailing DSCR of the remaining properties is less than 1.30x, 5% if the
12 month trailing DSCR is 1.30x or greater but less than 1.35x, and 0% if the
12 month trailing DSCR is 1.35x or greater.
THE SELLERS
GMACCM. GMAC Commercial Mortgage Corporation, a California corporation, is
an indirect wholly-owned subsidiary of GMAC Mortgage Group, Inc., which is a
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wholly-owned direct subsidiary of General Motors Acceptance Corporation. GMACCM
is also an affiliate of the depositor. The principal offices of GMACCM are
located at 650 Dresher Road, Horsham, Pennsylvania 19044. Its telephone number
is (215) 328-4622.
GACC. German American Capital Corporation, a Maryland corporation, is a
wholly-owned subsidiary of Deutsche Bank North America Holding Corp., which is
a wholly-owned subsidiary of Deutsche Bank AG, a German corporation. GACC is
also an affiliate of Deutsche Bank Securities, one of the underwriters. GACC
engages primarily in the business of purchasing and holding mortgage loans
pending securitization, repackaging or other disposition. GACC also acts from
time to time as the 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 one of the mortgaged
properties, which constitutes .05% 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 5 of the mortgaged
properties which represent 3.71% of the initial pool balance, these
environmental assessments were performed during the 12-month period before the
cut-off date.
Material adverse environmental conditions or circumstances revealed by
these environmental assessments for the mortgaged properties are described in
"Risk Factors--Adverse environmental conditions may reduce or delay your
payments."
The information contained in this prospectus supplement is based on the
environmental assessments and has not been independently verified by the
depositor, the sellers, the servicer, the underwriters or any of their
respective affiliates.
Property Condition Assessments
Inspections or updates of previously conducted inspections of all except
two of the mortgaged properties, which constitute 0.16% of the initial pool
balance, were con-
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ducted in connection with the origination or the purchase of the related
mortgage loan by independent licensed engineers or architects or both. For all
but 6 of the mortgaged properties, which secure mortgage loans representing
4.16% 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 three of the mortgaged properties, which
secures mortgage loans representing 1.27% 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 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. The appraisal for all but six mortgaged
properties, which constitute 3.73% of the initial pool balance, 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 for its appraised value."
For information about the values of the mortgaged properties available to
the depositor as of the cut-off date, see Annex A to this prospectus
supplement.
HAZARD, LIABILITY AND OTHER INSURANCE
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,
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o the maximum amount of insurance available under the National Flood
Insurance Act of 1968, and
o 100% of the replacement cost of the improvements located on the
mortgaged property, except in some cases where self-insurance was
permitted.
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 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.
Under 1 mortgage loan, amounts will be retained as additional collateral. For a
description of the cash reserves or letters of credit and related earnout
information, see Annex A.
ASSIGNMENT OF THE MORTGAGE LOAN; REPURCHASES AND SUBSTITUTIONS
On or before March 16, 2000 the depositor will acquire the mortgage loans
directly or indirectly from the sellers, in each case, under a mortgage loan
purchase agreement dated as of the delivery date or a similar agreement to be
entered into by or assigned to the depositor, who will then assign its
interests in the mortgage loans, without recourse, to the trustee for the
benefit of the holders of the certificates.
Each seller is a "mortgage asset seller" for purposes of the prospectus.
Each seller is 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:
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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.
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.
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 its 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. That seller's repurchase or substitution obligation will
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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.
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.
(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.
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(5) The lien of the related mortgage is insured by an ALTA lender's title
insurance policy, or its equivalent as adopted in the applicable
jurisdiction, issued by a nationally recognized title insurance
company, insuring the originator of the mortgage loan, its successors
and assigns, as to the first priority lien of the mortgage in the
original principal amount of the mortgage loan after all advances of
principal, subject only to permitted encumbrances including:
o the lien of current real property taxes and assessments not yet due
and payable,
o covenants, conditions and restrictions, rights of way, easements and
other matters of public record, and
o exceptions and exclusions specifically referred to in the lender's
title insurance policy issued or, as evidenced by a "marked-up"
commitment, to be issued for the mortgage loan.
The permitted encumbrances do not materially interfere with the
security intended to be provided by the related mortgage, the current
use or operation of the related mortgaged property or the current
ability of 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 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
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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 pool.
(15) All escrow deposits relating to the mortgage loan that were required to
be deposited with the mortgagee or its agent under the terms of the
related loan documents have been so deposited.
(16) As of the date of origination of the mortgage loan and, to the actual
knowledge of the seller, as of the delivery date, the related mortgaged
property was and is free and clear of any mechanics' and materialmen's
liens or 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 as provided under
the related lease.
(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.
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(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.
If any of the foregoing representations and warranties of a seller are
materially breached for any of the mortgage loans sold by it to the depositor,
the applicable seller may cure the breach within 90 days after its receipt of
notice of the breach. If a seller does not cure the breach, the mortgage loan
purchase agreement requires that seller to repurchase the affected mortgage
loan or substitute a replacement mortgage loan. The seller will be obligated to
repurchase the affected mortgage loan within 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 and pay
any substitution shortfall amount. See "Assignment of the Mortgage Loans;
Repurchases and Substitutions." The applicable seller's repurchase or
substitution obligation will be the sole remedy available to the
certificateholders and the trustee for any breach of a seller's representations
and warranties regarding the mortgage loans. The seller of each mortgage loan
will be the sole warranting party for each mortgage loan sold by it to the
depositor. None of the depositor, any other seller nor any other person or
entity will be obligated to repurchase any affected mortgage loan as a result
of a breach of a seller's representations and warranties if that seller
defaults on its obligation to do so. See "The Pooling and Servicing
Agreements--Representations and Warranties; Repurchases" in the prospectus.
POOL CHARACTERISTICS; CHANGES IN MORTGAGE POOL
The description in this prospectus supplement of the mortgage pool and the
mortgaged properties is based upon the mortgage loans that are expected to
constitute the mortgage pool at the time the offered certificates are issued.
The principal balances of the mortgage loans are reduced to reflect the
scheduled principal payments due on or before the cut-off date. Before the
issuance of the offered certificates, a mortgage loan may be removed from the
mortgage pool if the depositor deems the removal necessary or appropriate or if
it is prepaid. A limited number of other mortgage loans may be included in the
mortgage pool before the issuance of the offered certificates, unless
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including these mortgage loans would materially alter the characteristics of
the mortgage pool as described in this prospectus supplement. As a result, the
range of mortgage rates and maturities and some other characteristics of the
mortgage pool may vary depending on the actual composition of the mortgage pool
at the time the offered certificates are issued.
A Current Report on Form 8-K will be available to purchasers of the
offered certificates on or shortly after the delivery date and will be filed,
together with the pooling and servicing agreement and each mortgage loan
purchase agreement, with the SEC within fifteen days after the initial issuance
of the offered certificates. If mortgage loans are removed from or added to the
mortgage pool as described in the preceding paragraph, the removal or addition
will be noted in the Form 8-K.
SERVICING OF THE MORTGAGE LOANS
THE SERVICER
As of January 31, 2000, GMAC Commercial Mortgage Corporation had a total
commercial and multifamily mortgage loan servicing portfolio of approximately
$76.334 billion. See "GMAC Commercial Mortgage Corporation" in the prospectus.
Set forth below is a description of pertinent provisions of the pooling
and servicing agreement relating to the servicing of the mortgage loans.
Reference is also made to the prospectus, in particular to the section
captioned "The Pooling and Servicing Agreements," for important additional
information regarding the terms and conditions of the pooling and servicing
agreement as they relate to the rights and obligations of the servicer
thereunder. The servicer is a "master servicer" and a "special servicer" for
purposes of the prospectus. 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 for the servicing and administration of
the mortgage loans. The servicer, either directly or through sub-servicers,
will be required to service and administer the mortgage loans under the
following servicing standard:
o in the best interests of and for the benefit of the certificateholders
as determined by the servicer in its good faith and reasonable
judgment,
o in accordance with applicable law, the terms of the pooling and
servicing agreement and the terms of the respective mortgage loans, and
o to the extent consistent with the foregoing, 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.
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SPECIALLY SERVICED MORTGAGE LOANS
A specially serviced mortgage loan is any mortgage loan as to which any of
the following special servicing events has occurred:
(1) any balloon payment is more than 30 days late or, if the servicer has
determined that the related borrower has obtained a firm commitment to
refinance, more than 60 days late;
(2) any monthly payment or other payment required under the mortgage note
or the mortgage(s), other than a balloon payment, is more than 60 days
late;
(3) the servicer has determined in its good faith and reasonable judgment
that a default in the making of a monthly payment or any other payment
required under the mortgage note or the mortgage 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;
(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;
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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.
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 N certificates. It is anticipated that the
servicer or an affiliate will acquire some subordinate certificates, including
the Class N 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
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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 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
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, including
specially serviced
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mortgage loans and mortgage loans as to which the related mortgaged property
has become an REO property. The servicing fee will accrue for each mortgage
loan at the annual servicing fee rate set forth in Annex A. A portion of the
servicing fee received by the servicer is to be paid to the trustee in respect
of its trustee activities. A portion of the servicing fee on the mortgage loans
identified on Annex A as loan numbers 09-0001296 and 09-0001303 equal to 0.05 %
and 0.04%, respectively is to be paid to the related sub-servicer of these
mortgage loans and will be retained by Archon Financial, L.P. if that
sub-servicer is terminated. The servicing fee will be computed on the same
basis and the same principal amount as any related interest payment due or
deemed due on the related mortgage loan is computed.
Special Servicing Fee
The special servicing fee will accrue solely for each specially serviced
mortgage loan and each mortgage loan for which the related mortgaged property
has become an REO property. The special servicing fee will accrue at a rate
equal to 0.25% per annum, on the same basis and the same principal amount as
any related interest payment due or deemed due on the mortgage loan is
computed, and will be payable monthly from general collections on the mortgage
loans then on deposit in the certificate account.
Workout Fee
A workout fee will 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 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 incurred by the servicer or a replacement special servicer
as a result of the servicing of
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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. If the trustee fails to make the servicing advance,
the fiscal agent will be required to make that servicing advance. The servicer,
any replacement special servicer, the trustee and the fiscal agent 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 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 June, 2035,
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 (5)
above will not apply to any modification of any term of any mortgage
loan that is required under the terms of the mortgage loan in effect on
the delivery date or that is solely within the control of the related
borrower, and
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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 one substantially similar.
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. With respect to the First Union Tower loan, the rights of the
servicer, any replacement special servicer and the holders of certificates
evidencing a majority interest in the controlling class described above are
subject to the rights of FUDC to purchase the First Union Tower loan. See
"--Significant Mortgage Loans--the First Union Tower Loan" above.
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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 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.
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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.
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 and all payments under and proceeds of the 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) any mortgaged property acquired on behalf of the certificateholders
through foreclosure, deed in lieu of foreclosure or otherwise (upon
acquisition, called an REO property);
(3) the funds or assets that are deposited in the certificate account, any
REO account and the interest reserve account;
(4) the rights of the mortgagee under all insurance policies relating to
the mortgage loans; and
(5) rights of the depositor under the mortgage loan purchase agreements
relating to mortgage loan document delivery requirements and the
representations and warranties of the sellers regarding the mortgage
loans.
DENOMINATIONS
The trust will offer the offered certificates other than the Class X
certificates in minimum denominations of $25,000 and multiples of $1 in excess
thereof. The trust will offer the Class X certificates in minimum denominations
of $1,000,000 initial notional amount and multiples of $1 in excess thereof.
Each class of offered certificates will initially be represented by one or
more global certificates registered in the name of the nominee of DTC. The
depositor has been informed by DTC that DTC's nominee initially will be Cede &
Co. No certificate owner will be entitled to receive a definitive certificate
representing its interest in a class of offered certificates, except as
described below under "--Book-Entry Registration of the offered
certificates--Definitive Certificates."
Unless and until definitive certificates are issued in respect of any
class of offered certificates, all references to actions by holders of the
offered certificates will refer to actions taken by DTC upon instructions
received from the related certificate owners through its participants, and all
references in this prospectus supplement to payments, notices, reports and
statements to holders of the offered certificates will refer to payments,
notices, reports and statements to DTC or Cede & Co., as the registered holder
of the offered certificates, for distribution to the related certificate owners
through its participants under DTC's procedures. Until definitive certificates
are issued for any class of offered certificates, interests in those
certificates will be transferred on the book-entry records of DTC and its
participants. The certificate owners may hold their certificates through DTC,
in the United States, or Clearstream, Luxembourg 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 Banking, societe anonyme 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, Luxembourg
The offered certificates will be initially issued to investors through the
book-entry facilities of DTC, or Clearstream, Luxembourg 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, Luxembourg and Euroclear will hold omnibus positions on
behalf of their participants through customers' securities accounts in
Clearstream, Luxembourg'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,
Luxembourg or Euroclear participant as a result of a transaction with a
participant, other than a depositary holding on behalf of Clearstream,
Luxembourg or Euroclear, will be credited during the securities settlement
processing day, which must be a business day for Clearstream, Luxembourg or
Euroclear, as the case may be, immediately following the DTC settlement date.
These credits or any transactions in the securities settled
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during the processing will be reported to the relevant Euroclear participant or
Clearstream, Luxembourg participant on that business day. Cash received in
Clearstream, Luxembourg or Euroclear as a result of sales of securities by or
through a Clearstream, Luxembourg participant or Euroclear participant to a DTC
Participant, other than the depository for Clearstream, Luxembourg or
Euroclear, will be received with value on the DTC settlement date, but will be
available in the relevant Clearstream, Luxembourg 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, Luxembourg 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,
Luxembourg 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--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, Luxembourg participants or Euroclear
participants may not deliver instructions directly to the depositories.
Clearstream, Luxembourg, as a professional depository, holds securities
for its participating organizations and facilitates the clearance and
settlement of securities transactions between Clearstream, Luxembourg
participants through electronic book-entry changes in accounts of Clearstream,
Luxembourg participants, thereby eliminating the need for physical movement of
certificates. As a professional depository, Clearstream, Luxembourg 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
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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.
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, Luxembourg and Euroclear have agreed to the foregoing
procedures to facilitate transfers of the offered certificates among
participants of DTC, Clearstream, Luxembourg 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.
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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 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
$886,350,652 (subject to a variance of plus or minus 5%) and will consist of 14
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 described in footnote 8 on page S-5 and the
Weighted Average Net Mortgage Rate for that distribution date.
The pass-through rates 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 and Class N certificates for any distribution date will be equal to
the lesser of a specified fixed rate and the Weighted Average Net Mortgage Rate
for that distribution date.
No class of REMIC residual certificates will have a specified pass-through
rate.
If any mortgage loan does not accrue interest on the basis of a 360-day
year consisting of twelve 30-day months, which is the basis on which interest
accrues in respect of the REMIC regular certificates, then, for purposes of
calculating pass-through rates, the net mortgage rate of that mortgage loan for
any one-month period before a related due date will be equal to:
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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.
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.
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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.
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
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(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 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 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:
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
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continued to amortize in accordance with the balloon loan's amortization
schedule, if 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 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
the prepayment x discount rate fraction x principal allocation fraction
premium for that class of that class
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.
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The prepayment premiums, if any, collected on the mortgage loans during
any collection period may not be sufficient to fully compensate
certificateholders of any class for any loss in yield attributable to the
related prepayments of principal.
DISTRIBUTIONS OF EXCESS INTEREST
No excess interest collected on an ARD loan will be available for
distribution to the holders of the offered certificates.
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 secured by mortgaged property that is acquired as part of
the trust through foreclosure, deed in lieu of foreclosure or otherwise, will
be treated as remaining outstanding until the related REO property is
liquidated for the following purposes:
o determining distributions on the certificates,
o allocating of realized losses and additional trust expenses to the
certificates, and
o calculating the amount of servicing fees and special servicing fees
payable under the pooling and servicing agreement.
Among other things, the mortgage loan will be taken into account when
determining pass-through rates and the Principal Distribution Amount. Operating
revenues and other proceeds from an REO property, after payment of 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 loans 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 bearing
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
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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 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 pool outstanding 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 N, Class M, Class L,
Class K, Class J, Class H, Class G, Class F, Class E, Class D, Class C, 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 and/or additional trust expenses. These reductions in the certificate
balances of the principal balance certificates will constitute an allocation of
any realized losses and additional trust expenses. Any such reduction will also
have the effect of reducing the notional amount of the Class X certificates.
Realized losses are losses on the mortgage loans arising from the
inability of the servicer to collect all amounts due and owing under the
mortgage loan, including by reason of the fraud or bankruptcy of a borrower or
a casualty of any nature at a mortgaged property, to the extent not covered by
insurance.
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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--Taxation of Owners of REMIC Residual
Certificates--Prohibited Transactions Tax and Other Taxes" in the
prospectus,
o any amounts expended on behalf of the trust to remediate an adverse
environmental condition at any mortgaged property securing a defaulted
mortgage loan. See "The Pooling and Servicing Agreements--Realization
Upon Defaulted Mortgage Loans" in the prospectus, and
o any other expense of the trust not specifically included in the
calculation of realized loss for which there is no corresponding
collection from a borrower.
P&I ADVANCES
On each distribution date, the servicer will be obligated to make P&I
advances consisting of advances of delinquent principal and interest on the
mortgage loans, other than balloon payments. Servicing advances and P&I
advances are referred to as advances. The servicer will make P&I advances out
of its own funds or, consistent with
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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 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.
If the servicer fails to make a required P&I advance, the trustee will be
required to make that P&I advance. If the trustee fails to make a required P&I
advance, the fiscal agent will be required to make that P&I advance. No advance
will be required to be made by the servicer, fiscal agent 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 and the fiscal agent 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, the trustee and the fiscal agent 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, the trustee or the fiscal agent is determined to
be a nonrecoverable advance, the servicer, the trustee or the fiscal agent 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.
The servicer, the trustee, the fiscal agent 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
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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 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. No
appraisal will be required if an appraisal was obtained within the prior twelve
months. 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 premiums, and, if applicable, ground rents on the related
mortgaged property, net of any escrow reserves held by the servicer
to cover any of these items,
o over:
90% of the appraised value of the related mortgaged property or REO
property as determined by the appraisal, net of the amount of any
obligation secured by liens on the property that are prior to the lien
of the required appraisal loan, and are not amounts related to items
included in clause (4) above and were not taken into account in the
calculation of the appraised value.
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If a required appraisal is not obtained within 120 days of the date that
the mortgage loan became a required appraisal loan, 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 for which any special
servicing event has occurred and that has been modified by the servicer in a
manner that:
o affects the amount or timing of any payment of principal or interest
due on the mortgage loan, other than, or in addition to, bringing
current monthly payments on that mortgage loan;
o except as expressly contemplated by the related mortgage, results in a
release of the lien of the mortgage on any material portion of the
related mortgaged property without a corresponding principal prepayment
in an amount not less than the fair market value, as is, of the
property to be released; or
o in the reasonable good faith judgment of the servicer, materially
impairs the security for that mortgage loan or reduces the likelihood
of timely payment of amounts due on that mortgage loan.
REPORTS TO CERTIFICATEHOLDERS; AVAILABLE INFORMATION
Trustee Reports
On each distribution date, the trustee will be required to provide or make
available to each holder of an offered certificate as of the related record
date a distribution date statement providing information relating to
distributions made on that date for the relevant class and the recent status of
the mortgage pool. For a discussion of the particular items of information
included in each distribution date statement, as well as a discussion of annual
information reports to be furnished by the trustee to persons who at any time
during the prior calendar year were holders of the offered certificates, see
"Description of the Certificates--Reports to Certificateholders" in the
prospectus.
In addition, based on information provided in monthly reports prepared by
the servicer and delivered to the trustee, the trustee will provide or make
available on each distribution date to each offered certificateholder, the
following trustee reports, substantially in the forms provided in Annex B,
which forms are subject to change, and, including substantially the following
information:
(1) A report as of the close of business on the immediately preceding
determination date, containing some categories of information regarding
the mortgage loans provided in Annex A of this prospectus supplement in
the tables under
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the caption "Characteristics of the Mortgage Loans", calculated, where
applicable, on the basis of the most recent relevant information
provided by the borrowers to the servicer and by the servicer to the
trustee, and presented in a loan-by-loan and tabular format
substantially similar to the formats utilized in Annex A.
(2) A delinquent loan status report 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) An 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) An 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.
(6) A servicer watch list including a list of mortgage loans that have
experienced a material decrease in debt service coverage, a loss of or
bankruptcy of the largest tenant of which the servicer has actual
knowledge, or 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.
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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 credit lease loans, 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.
In addition, the servicer is also required to perform for each mortgaged
property and REO property:
o Within 30 days after receipt of a quarterly operating statement, if
any, beginning with the calendar quarter ended June 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 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
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prospectus supplement, the servicer, the trustee, the depositor and the
certificate registrar are required to recognize as certificateholders only
those persons in whose names the certificates are registered on the books and
records of the certificate registrar.
INFORMATION AVAILABLE ELECTRONICALLY
The trustee will make available each month, to any interested party, the
distribution date statement via the trustee's internet website. In addition,
upon the approval of the depositor, the trustee will make available each month,
to any interested party, the trustee reports (other than the servicer watch
list) on the trustee's internet website. The trustee's internet website will
initially be located at "www.lnbabs.com". In addition, the trustee will also
make mortgage loan information, as presented in the CMSA loan setup file and
CMSA periodic loan update file format, available each month to any
certificateholder, any certificate owner, the rating agencies, or any other
interested party via the trustee's internet website. All such reports and
statements will require the use of a password provided by the trustee to the
person requesting such report or statement upon receipt by the trustee from
such person of a certification in the form attached to the pooling and
servicing agreement. The rating agencies and the parties to the pooling and
servicing agreement will not be required to provide that certification. The
depositor may at any time instruct the trustee not to require the use of a
password to access any or all such information. In addition, the trustee will
make available, as a convenience for interested parties (and not in furtherance
of the distribution of the prospectus or the prospectus supplement under the
securities laws), the pooling and servicing agreement, the prospectus and the
prospectus supplement via the trustee's internet website. The trustee will make
no representations or warranties as to the accuracy or completeness of such
documents and will assume no responsibility for them. In addition, the trustee
may disclaim responsibility for any information distributed by the trustee for
which it is not the original source.
The trustee will make available each month the servicer watch list and the
comparative financial status report, to the extent received from the servicer,
to any holder or certificate owner of an offered certificate or any person
identified to the trustee by a holder or certificate owner as a prospective
transferee of an offered certificate or any interest therein, the rating
agencies and to any of the parties to the pooling and servicing agreement via
the trustee's internet website with use of a password provided by the trustee
to that person upon receipt by the trustee from such person of a certification
in the form attached to the pooling and servicing agreement. The rating
agencies and the parties to the pooling and servicing agreement will not be
required to provide that certification. The depositor may at any time instruct
the trustee not to require the use of a password to access any or all such
information.
In connection with providing access to the trustee's internet website, the
trustee may require registration and the acceptance of a disclaimer. The
trustee shall not be liable for the dissemination of information in accordance
with the pooling and servicing agreement.
OTHER INFORMATION
The trustee will make available at its offices, during normal business
hours, for review by any holder, certificate owner or prospective purchaser of
an offered certificate, originals or copies of the following items to the
extent they are held by the trustee:
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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, and
o the mortgage note, mortgage and other legal documents relating to each
mortgage loan, including any and all modifications, waivers and
amendments of the terms of a mortgage loan entered into by the servicer
and delivered to the trustee.
The trustee will provide copies of the items described above upon
reasonable written request. The trustee may require payment for the reasonable
costs and expenses of providing 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.
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 98% among the holders of the classes of principal balance certificates
in proportion to the certificate balances of their certificates,
adjusted as described below,
o 1% among the holders of the Class X certificates, and
o 1% allocated equally among the holders of the respective classes of
REMIC residual certificates.
Voting rights allocated to a class of certificateholders will be allocated
among those certificateholders in proportion to the percentage interests in the
class evidenced by their respective certificates. Appraisal reduction amounts
will be allocated to reduce the respective certificate balances of the Class 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:
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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 pool is less
than 1% of the initial pool balance.
Any purchase by the servicer or the depositor of all the mortgage loans
and other assets in the trust is required to be made at a price equal to:
o the aggregate purchase price of all the mortgage loans, exclusive of
mortgage loans for which the related mortgaged properties have become
REO properties, then included in the trust; plus
o the aggregate fair market value of all REO properties then included in
the trust, which fair market value for any REO property may be less
than the purchase price for the corresponding mortgage loan, as
determined by an appraiser mutually agreed upon by the servicer and the
trustee; minus
o if 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 AND FISCAL AGENT
The trustee is LaSalle Bank National Association. The trustee is at all
times required to be, and will be required to resign if it fails to be,
o a corporation or association, organized and doing business under the
laws of the United States of America or any state thereof or the
District of Columbia, authorized under those laws to exercise corporate
trust powers, having a combined capital and surplus of not less than
$100,000,000, or, 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.
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The corporate trust office of the trustee responsible for administration
of the trust is located at 135 South LaSalle Street, Suite 1625, Chicago,
Illinois 60603. Attention: Asset-Backed Securities Trust Services Group--GMAC
Commercial Mortgage Securities, Inc., Mortgage Pass-Through Certificates,
Series 2000-C1.
ABN AMRO Bank N.V., a Netherlands banking corporation and the indirect
corporate parent of the trustee, will act as fiscal agent for the trust and is
obligated to make any advance required to be made, and not made, by the
servicer and the trustee under the pooling and servicing agreement, provided
that the fiscal agent is not obligated to make any advance unless it determines
that the advance will be recoverable from future payments or collections. The
fiscal agent is entitled to rely conclusively on any determination by the
servicer (solely in the case of servicing advances) or the trustee that an
advance, if made, would be nonrecoverable. The fiscal agent is entitled to
reimbursement for each advance made by it in the same manner and to the same
extent as, but prior to, the servicer and the trustee. See "--P&I Advances"
above. The fiscal agent is entitled to various rights, protections and
indemnities similar to those afforded the trustee. The trustee is responsible
for payment of the compensation of the fiscal agent. As of June 30, 1999, the
fiscal agent had consolidated assets of approximately $480 billion. In the
event that LaSalle Bank National Association shall, for any reason, cease to
act as trustee under the pooling and servicing agreement, ABN AMRO Bank N.V.
will also no longer serve in the capacity of fiscal agent under the pooling and
servicing agreement.
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
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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. The yield to maturity of the Class X certificates will be
highly sensitive to the rate and timing of principal payments, including by
reason of prepayments, defaults and liquidations, on the mortgage loans. If you
invest in the Class X certificates, you should fully consider the associated
risks, including the risk that an extremely rapid rate of amortization and
prepayment of the mortgage loans could result in your failure to fully recoup
your initial investment.
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 repurchases of mortgage loans. Losses or
payments of principal on the mortgage loans with higher net mortgage rates
could result in a reduction in the Weighted Average Net Mortgage Rate, thereby
reducing the pass-through rates for the Class X 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 Pool" in this prospectus supplement and
"--Yield Considerations--Rate and Timing of Principal Payments on the Mortgage
Loans" and "--Yield Sensitivity of the Class X Certificates" below.
Actual 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. 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 Pool--Prepayment Provisions" and "Annex A--Earnout Loans" and
"Additional Collateral Loans" in this prospectus supplement. Defaults on the
mortgage loans, particularly at or near their stated maturity dates, may result
in significant delays in payments of principal
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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.
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 Pool" and
"Annex A--Earnout Loans" and -- "Additional Collateral Loans" in this
prospectus supplement and "Risk Factors" and "Yield and Maturity
Considerations--Yield and Prepayment Considerations" in the prospectus.
The rate of prepayment on the mortgage pool is likely to be affected by
prevailing market interest rates for mortgage loans of a comparable type, term
and risk level. When the prevailing market interest rate is below a mortgage
coupon, a borrower may have an increased incentive to refinance its mortgage
loan. See "Description of the Mortgage Pool--Terms and Conditions of the
Mortgage Loans" in this prospectus supplement.
DELAY IN PAYMENT OF DISTRIBUTIONS
Because monthly distributions will not be made to certificateholders until
a date that is scheduled to be at least 15 days following the end of the
related interest accrual period, the effective yield to the holders of the
offered certificates will be lower than the yield that would otherwise be
produced by the applicable pass-through rates and purchase prices assuming
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
S-101
<PAGE>
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.
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, defeasance,
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
S-102
<PAGE>
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 or initial notional amount of each class of offered certificates that
would be outstanding after each of the dates shown at the indicated CPR
percentages and the corresponding weighted average life of each of that class
of certificates. The tables have been prepared on the basis of the information
set forth on Annex A and the following maturity assumptions:
(1) the initial certificate balance or notional amount, as the case may be,
and the pass-through rate for each class of certificates are as
provided in this prospectus supplement;
(2) the scheduled monthly payments for each mortgage loan are based on
payments of principal and interest (or of interest only, for those
mortgage loans identified on Annex A as being interest only or having
an interest only period) described on Annex A;
(3) all scheduled monthly payments, including balloon payments, are timely
received on the first day of each month beginning in April, 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;
(5) prepayments are made on each of the mortgage loans at the indicated CPR
percentages provided in the table without regard to any limitations in
the mortgage loans on partial voluntary principal prepayments, except
to the extent modified below by the assumption numbered (13);
(6) the ARD loans mature on their respective anticipated repayment dates;
(7) each mortgage loan accrues interest under the method specified in Annex
A;
(8) neither the servicer nor the depositor exercises its right of optional
termination described in this prospectus supplement;
(9) no mortgage loan is required to be repurchased by a mortgage loan
seller;
(10) no Prepayment Interest Shortfalls are incurred and no prepayment
premiums are collected;
(11) there are no additional trust expenses;
(12) distributions on the certificates are made on the 15th calendar day of
each month, beginning in April, 2000;
(13) 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;
(14) the prepayment provisions for each mortgage loan are as described on
Annex A;
S-103
<PAGE>
(15) no prepayments are received due to the failure to satisfy the
requirements to release earnout amounts for each earnout loan (See
"Annex A--Earnout Loans"); and
(16) the delivery date is March 16, 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, Class E and Class F certificates and the percentage of the initial
certificate balance or notional amount 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-104
<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
March 15, 2001 ....................... 95 95 95 95 95
March 15, 2002 ....................... 89 89 89 89 89
March 15, 2003 ....................... 83 83 83 83 83
March 15, 2004 ....................... 76 76 76 76 76
March 15, 2005 ....................... 56 56 56 56 56
March 15, 2006 ....................... 48 48 48 48 48
March 15, 2007 ....................... 34 34 34 34 34
March 15, 2008 ....................... 25 25 25 25 25
March 15, 2009 ....................... 2 2 2 1 0
March 15, 2010 ....................... 0 0 0 0 0
Weighted Average Life
(in years) .......................... 5.71 5.70 5.70 5.69 5.65
First Principal Payment Date ......... 04/15/2000 04/15/2000 04/15/2000 04/15/2000 04/15/2000
Last Principal Payment Date .......... 05/15/2009 05/15/2009 04/15/2009 04/15/2009 02/15/2009
</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
March 15, 2001 ....................... 100 100 100 100 100
March 15, 2002 ....................... 100 100 100 100 100
March 15, 2003 ....................... 100 100 100 100 100
March 15, 2004 ....................... 100 100 100 100 100
March 15, 2005 ....................... 100 100 100 100 100
March 15, 2006 ....................... 100 100 100 100 100
March 15, 2007 ....................... 100 100 100 100 100
March 15, 2008 ....................... 100 100 100 100 100
March 15, 2009 ....................... 100 100 100 100 99
March 15, 2010 ....................... 0 0 0 0 0
Weighted Average Life
(in years) .......................... 9.57 9.56 9.55 9.53 9.37
First Principal Payment Date ......... 05/15/2009 05/15/2009 04/15/2009 04/15/2009 02/15/2009
Last Principal Payment Date .......... 12/15/2009 12/15/2009 12/15/2009 12/15/2009 10/15/2009
</TABLE>
S-105
<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
March 15, 2001 ....................... 100 100 100 100 100
March 15, 2002 ....................... 100 100 100 100 100
March 15, 2003 ....................... 100 100 100 100 100
March 15, 2004 ....................... 100 100 100 100 100
March 15, 2005 ....................... 100 100 100 100 100
March 15, 2006 ....................... 100 100 100 100 100
March 15, 2007 ....................... 100 100 100 100 100
March 15, 2008 ....................... 100 100 100 100 100
March 15, 2009 ....................... 100 100 100 100 100
March 15, 2010 ....................... 0 0 0 0 0
Weighted Average Life
(in years) .......................... 9.81 9.79 9.76 9.75 9.58
First Principal Payment Date ......... 12/15/2009 12/15/2009 12/15/2009 12/15/2009 10/15/2009
Last Principal Payment Date .......... 01/15/2010 01/15/2010 01/15/2010 12/15/2009 10/15/2009
</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
March 15, 2001 ....................... 100 100 100 100 100
March 15, 2002 ....................... 100 100 100 100 100
March 15, 2003 ....................... 100 100 100 100 100
March 15, 2004 ....................... 100 100 100 100 100
March 15, 2005 ....................... 100 100 100 100 100
March 15, 2006 ....................... 100 100 100 100 100
March 15, 2007 ....................... 100 100 100 100 100
March 15, 2008 ....................... 100 100 100 100 100
March 15, 2009 ....................... 100 100 100 100 100
March 15, 2010 ....................... 0 0 0 0 0
Weighted Average Life
(in years) .......................... 9.83 9.83 9.83 9.81 9.61
First Principal Payment Date ......... 01/15/2010 01/15/2010 01/15/2010 12/15/2009 10/15/2009
Last Principal Payment Date .......... 01/15/2010 01/15/2010 01/15/2010 01/15/2010 11/15/2009
</TABLE>
S-106
<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
March 15, 2001 ....................... 100 100 100 100 100
March 15, 2002 ....................... 100 100 100 100 100
March 15, 2003 ....................... 100 100 100 100 100
March 15, 2004 ....................... 100 100 100 100 100
March 15, 2005 ....................... 100 100 100 100 100
March 15, 2006 ....................... 100 100 100 100 100
March 15, 2007 ....................... 100 100 100 100 100
March 15, 2008 ....................... 100 100 100 100 100
March 15, 2009 ....................... 100 100 100 100 100
March 15, 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 ......... 01/15/2010 01/15/2010 01/15/2010 01/15/2010 11/15/2009
Last Principal Payment Date .......... 01/15/2010 01/15/2010 01/15/2010 01/15/2010 11/15/2009
</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
March 15, 2001 ....................... 100 100 100 100 100
March 15, 2002 ....................... 100 100 100 100 100
March 15, 2003 ....................... 100 100 100 100 100
March 15, 2004 ....................... 100 100 100 100 100
March 15, 2005 ....................... 100 100 100 100 100
March 15, 2006 ....................... 100 100 100 100 100
March 15, 2007 ....................... 100 100 100 100 100
March 15, 2008 ....................... 100 100 100 100 100
March 15, 2009 ....................... 100 100 100 100 100
March 15, 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 ......... 01/15/2010 01/15/2010 01/15/2010 01/15/2010 11/15/2009
Last Principal Payment Date .......... 01/15/2010 01/15/2010 01/15/2010 01/15/2010 11/15/2009
</TABLE>
S-107
<PAGE>
PERCENTAGES OF THE INITIAL CERTIFICATE BALANCE OF
THE CLASS F 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
March 15, 2001 ....................... 100 100 100 100 100
March 15, 2002 ....................... 100 100 100 100 100
March 15, 2003 ....................... 100 100 100 100 100
March 15, 2004 ....................... 100 100 100 100 100
March 15, 2005 ....................... 100 100 100 100 100
March 15, 2006 ....................... 100 100 100 100 100
March 15, 2007 ....................... 100 100 100 100 100
March 15, 2008 ....................... 100 100 100 100 100
March 15, 2009 ....................... 100 100 100 100 100
March 15, 2010 ....................... 0 0 0 0 0
Weighted Average Life
(in years) .......................... 9.83 9.83 9.83 9.83 9.73
First Principal Payment Date ......... 01/15/2010 01/15/2010 01/15/2010 01/15/2010 11/15/2009
Last Principal Payment Date .......... 01/15/2010 01/15/2010 01/15/2010 01/15/2010 12/15/2009
</TABLE>
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,
other than the Class X certificates, under the maturity assumptions.
The yields provided in the following tables were calculated by determining
the monthly discount rates which, when applied to the assumed stream of cash
flows to be paid on each class of offered certificates, other than the Class X
certificates, would cause the discounted present value of the assumed stream of
cash flows as of March 16, 2000 to equal the assumed purchase prices, plus
accrued interest at the applicable pass-through rate on page S-5 from and
including March 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.
S-108
<PAGE>
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>
% 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 A-2 CERTIFICATES AT THE SPECIFIED CPRS
<TABLE>
<CAPTION>
% 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 B CERTIFICATES AT THE SPECIFIED CPRS
<TABLE>
<CAPTION>
% 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 C CERTIFICATES AT THE SPECIFIED CPRS
<TABLE>
<CAPTION>
% 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>
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>
% 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 E CERTIFICATES AT THE SPECIFIED CPRS
<TABLE>
<CAPTION>
% 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-111
<PAGE>
PRE-TAX YIELD TO MATURITY (CBE), WEIGHTED AVERAGE LIFE,
FIRST PRINCIPAL PAYMENT DATE AND LAST PRINCIPAL PAYMENT DATE
FOR THE CLASS F CERTIFICATES AT THE SPECIFIED CPRS
<TABLE>
<CAPTION>
% 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>
YIELD SENSITIVITY OF THE CLASS X CERTIFICATES
The yield to maturity of the Class X certificates will be especially
sensitive to the prepayment, repurchase and default experience on the mortgage
loans, each of which may fluctuate significantly from time to time. A rapid
rate of principal payments will have a material adverse effect on the yield to
maturity of the Class X certificates. The mortgage loans may prepay at a
different rate. In addition, the pass-through rate for any Class X component
relating to a class of principal balance certificates having a pass-through
rate equal to the Weighted Average Net Mortgage Rate will be zero. Prospective
investors in the Class X certificates should fully consider the associated
risks, including the risk that investors may not fully recover their initial
investment.
The following table indicates the sensitivity of the pre-tax yield to
maturity on the Class X certificates to various CPR percentages on the mortgage
loans by projecting the monthly aggregate payments of interest on the Class X
certificates and computing the corresponding pre-tax yields to maturity on a
corporate bond equivalent basis, based on the maturity assumptions. It was
further assumed that the aggregate purchase price of the Class X certificates
are as specified below, in each case expressed in 32nds and interpreted as a
percentage (i.e., 4-16 is 4 16/32%) of the initial notional amount without
accrued interest. Any differences between these assumptions and the actual
characteristics and performance of the mortgage loans and of the Class X
certificates may result in yields being different from those shown in the
table. Discrepancies between assumed and actual characteristics and performance
underscore the hypothetical nature of the table, which is provided only to give
a general sense of the sensitivity of yields in varying prepayment scenarios.
The pre-tax yields provided in the following table were calculated by
determining the monthly discount rates that, when applied to the assumed
streams of cash flows to be paid on the Class X certificates, would cause the
discounted present value of the assumed stream of cash flows as of March 16,
2000 to equal the assumed aggregate purchase price plus accrued interest at the
initial pass-through rate
S-112
<PAGE>
for the Class X certificates from and including March 1, 2000 to but excluding
the delivery date, and by converting these monthly rates to semi-annual
corporate bond equivalent rates. The calculation does not take into account
shortfalls in the collection of interest due to prepayments or other
liquidations of the mortgage loans or the interest rates at which you may be
able to reinvest funds you receive as distributions on the Class X
certificates, and accordingly does not purport to reflect the return on any
investment in the Class X certificates when the reinvestment rates are
considered.
It is highly unlikely that the mortgage loans will be prepaid according to
one particular pattern. For this reason, and because the timing of cash flows
is critical to determining yields, the pre-tax yield to maturity on the Class X
certificates is likely to differ from those shown in the following table, even
if all of the mortgage loans prepay at the indicated CPR percentages over any
given time period or over the entire life of the certificates.
The mortgage loans may not prepay in accordance with the maturity
assumptions at any particular rate and the yield on the Class X certificates
may not conform to the yields described in this prospectus supplement. You are
urged to make your investment decision based on the determinations as to
anticipated rates of prepayment under a variety of scenarios. You should fully
consider the risk that a rapid rate of prepayments on the mortgage loans could
result in your failure to fully recover your investments.
In addition, holders of the Class X certificates generally have rights to
relatively larger portions of interest payments on mortgage loans with higher
mortgage rates. As a result, the yield on the Class X certificates will be
materially and adversely affected if the mortgage loans with higher mortgage
rates prepay faster than the mortgage loans with lower mortgage rates.
PRE-TAX YIELD TO MATURITY (CBE), WEIGHTED AVERAGE LIFE,
FIRST PAYMENT DATE AND LAST PAYMENT DATE
FOR THE CLASS X CERTIFICATES AT THE SPECIFIED CPRS
<TABLE>
<CAPTION>
% CPR DURING LOCKOUT, DEFEASANCE,
YIELDMAINTENANCE 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 Payment Date ....................
Last Payment Date .....................
</TABLE>
- ----------
*Based on reduction in the notional amount of the Class X Certificates.
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<PAGE>
FEDERAL INCOME TAX CONSEQUENCES
The following summary of the anticipated material federal income tax
consequences of the purchase, ownership and disposition of offered certificates
is based on laws, regulations, including the REMIC regulations promulgated by
the Treasury Department, rulings and decisions now in effect or, for
regulations, proposed, 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 Mayer,
Brown & Platt, special United States federal tax counsel for the depositor.
This summary does not address the federal income tax consequences of an
investment in offered certificates applicable to all categories of investors.
For example, it does not discuss the federal income tax consequences of the
purchase, ownership and disposition of offered certificates by investors that
are subject to special treatment under the federal income tax laws, including
banks and thrifts, insurance companies, regulated investment companies, dealers
in securities, holders that will hold the offered certificates as a position in
a "straddle" for tax purposes or as part of a "synthetic security" or
"conversion transaction" or other integrated investment comprised of the
offered certificates and one or more other investments, foreign investors,
trusts and estates and pass-through entities, the equity holders of which are
any of the foregoing. Prospective investors should consult their tax advisors
regarding the federal, state, local and any other tax consequences to them of
the purchase, ownership and disposition of offered certificates.
For federal income tax purposes, three separate REMIC elections will be
made 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, Mayer, Brown &
Platt, counsel to 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, called
the Code. For federal income tax purposes, the Class R-I certificates will be
the sole class of "residual interests" in REMIC I; the Class R-II certificates
will be the sole class of "residual interests" in REMIC II; except to the
extent representing the right to excess interest on the ARD loans, the
certificates, other than the REMIC residual certificates, will evidence the
"regular interests" in, and will be treated as debt instruments of, REMIC III;
and the Class R-III certificates will be the sole class of "residual interests"
in REMIC III. See "Federal Income Tax Consequences--REMICs" in the prospectus.
ORIGINAL ISSUE DISCOUNT AND PREMIUM
The Class X certificates will be, and other offered certificates may be,
treated as having been issued with original issue discount for federal income
tax reporting purposes. For purposes of computing the rate of accrual of
original issue discount, market discount and premium, if any, for federal
income tax purposes it will be assumed that there are no prepayments on the
mortgage loans, except that it is assumed that the ARD loans will pay their
respective outstanding principal balances on their related anticipated
repayment dates. No representation is made as to the actual expected rate of
prepayment of any mortgage loan. See "Federal Income Tax Consequences--
REMICs--Taxation of Owners of REMIC Regular Certificates--Original Issue
Discount" in the prospectus. The Class N certificates, in addition to
evidencing REMIC
S-114
<PAGE>
regular interests, will also 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. In addition, there is considerable uncertainty
concerning the application of Section 1272(a)(6) of the Code and the OID
Regulations to REMIC certificates such as the Class X certificates. The IRS
could assert that income derived from a Class X certificate should be
calculated as if the Class X certificate were a certificate purchased at a
premium equal to the price paid by the holder for the Class X certificate.
Under this approach, a holder would be entitled to amortize that premium only
if it has in effect an election under Section 171 of the Code for all taxable
debt instruments held by that holder, as described in the prospectus under
"Federal Income Tax Consequences--REMICs--Taxation of Owners of REMIC Regular
Certificates--Premium." Alternatively, the IRS could assert that the Class X
certificates should be taxable under regulations governing debt instruments
having one or more contingent payments. Such treatment may affect the timing of
income accruals on such offered certificates. Prospective purchasers of the
offered certificates are advised to consult their tax advisors concerning the
tax treatment of the certificates.
Assuming the Class X certificates are treated as having been issued with
original issue discount, it appears that a reasonable method of reporting
original issue discount on the Class X certificates would be to report all
income for those certificates as original issue discount for each period,
computing the original issue discount
o by assuming that the value of the applicable index will remain constant
for purposes of determining the original yield to maturity of, and
projecting future distributions on, the certificates, thereby treating
the certificates as fixed rate instruments to which the original issue
discount computation rules described in the prospectus can be applied,
and
o by accounting for any positive or negative variation in the actual
value of the applicable index in any period from its assumed value as a
current adjustment to original issue discount for that period.
See "Federal Income Tax Consequences--REMICs--Taxation of Owners of REMIC
Regular Certificates--Original Issue Discount" in the prospectus.
If the method for computing original issue discount described in the
prospectus results in a negative amount to a holder of a Class X certificate
for any period, the amount of original issue discount allocable to that period
would be zero and the certificateholder will be permitted to offset the
negative amount only against future original issue discount, if any, on the
certificate. Although the matter is not free from doubt, a holder of a Class X
certificate may be permitted to deduct a loss to the extent that his or her
remaining basis in the certificate exceeds the maximum amount of future
payments to which the certificateholder is entitled, assuming no further
prepayments of the mortgage loans. That loss might be treated as a capital
loss.
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<PAGE>
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.
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 N 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
S-116
<PAGE>
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 N 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 Pool" in this
prospectus supplement.
For further information regarding the federal income tax consequences of
investing in the offered certificates, see "Federal Income Tax
Consequences--REMICs" in the prospectus.
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 March
, 2000, among the depositor, GMACCM and each of the underwriters.
It is expected that delivery of the offered certificates will be made only
in book-entry form through the Same Day Funds Settlement System of DTC,
Clearstream, Luxembourg and Euroclear on or about March 16, 2000, against
payment therefor in immediately available funds.
ALLOCATION TABLE
<TABLE>
<CAPTION>
UNDERWRITER CLASS X CLASS A-1 CLASS A-2 CLASS B CLASS C CLASS D CLASS E CLASS F
- ------------------ --------- ----------- ----------- --------- --------- --------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Deutsche Bank
Securities Inc...
Goldman, Sachs
& Co. ...........
Total ............ 100% 100% 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 underwriting may be
terminated.
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<PAGE>
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 Certificateholders; Available Information." Except as
described in this prospectus supplement under "Description of the
Certificates--Reports to Certificateholders; Available Information," any
additional information regarding the offered certificates may not be available
through any other source. In addition, the depositor is not aware of any source
through which price information about 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 Mayer,
Brown & Platt, and for the underwriters by Brown & Wood LLP.
RATINGS
The offered certificates are required to receive ratings from Fitch and
Moody's that are not lower than those indicated under "Summary of Series
2000-C1 Certificates and Pool Characteristics."
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<PAGE>
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 March, 2033 distribution date. The ratings take
into consideration the credit quality of the mortgage pool, structural and
legal aspects associated with the certificates, and the extent to which the
payment stream from the mortgage pool is adequate to make payments of principal
and interest required under the offered certificates.
The ratings of the offered certificates do not, however, address any of
the following:
o the likelihood or frequency of voluntary or involuntary principal
prepayments on the mortgage loans,
o the degree to which prepayments might differ from those originally
anticipated,
o whether and to what extent prepayment premiums will be collected with
prepayments or the corresponding effect on yield to investors,
o whether and to what extent excess interest will be collected on any ARD
loan,
o whether and to what extent default interest will be collected on the
mortgage loans, and
o the tax treatment of payments on the offered certificates.
The ratings address credit risk and not prepayment risk. As described in
this prospectus supplement, the amounts payable on the Class X certificates do
not include principal. If all the mortgage loans were to prepay in the initial
month, the Class X certificates would receive only a single month's interest,
without regard to any prepayment premiums that may be collected. As a result,
the Class X certificateholders would suffer a nearly complete loss of their
investment. However, all amounts due to the Class X certificateholders have
been paid, and this result would be consistent with the ratings assigned by the
rating agencies to the Class X certificates. The ratings of the Class X
certificates by the rating agencies do not address the timing or magnitude of
reductions of the notional amount of the Class X certificates, but only the
obligation to pay interest timely on the notional amount of the Class X
certificates, as it may be reduced from time to time as described in this
prospectus supplement. The ratings do not represent any assessment of the yield
to maturity of the Class X certificates or the possibility that the Class X
certificateholders might not fully recover their investment if rapid
prepayments of the mortgage loans, including both voluntary and involuntary
prepayments, occur. The notional amount upon which interest is calculated for
the Class X certificates is reduced by the allocation of realized losses and
prepayments, whether voluntary or involuntary. The rating does not address the
timing or magnitude of reductions of the notional amount, but only the
obligation to pay interest timely on the notional amount as reduced from time
to time. As a result, you should evaluate the ratings of the Class X
certificates independently from similar ratings on other types of securities.
Any rating agency not requested to rate the offered certificates may
nonetheless issue any rating to any class thereof. A rating assigned to any
class of offered certificates by a rating agency that has not been requested by
the depositor to do so may be lower than the ratings assigned by any rating
agency rating that class.
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<PAGE>
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.
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 or Class X 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
S-120
<PAGE>
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, Class E or Class F certificates.
As a result, if you purchase a Class B, Class C, Class D, Class E or Class
F certificate or any interest in these certificates, you will be deemed to have
represented by your purchase that either:
you are not a plan and you are not purchasing your certificates on behalf
of, or with "plan assets" of, any plan or
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--Insurance Company General Accounts" 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.
S-121
<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.
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 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 interest (net of related servicing fees and, if
applicable, excess interest) that would have accrued on the related balloon
loan 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.
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<PAGE>
EXTRAORDINARY PREPAYMENT INTEREST SHORTFALL--An Extraordinary Prepayment
Interest Shortfall may occur if a mortgage loan 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 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. 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, 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, 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:
(1) the principal portions of all monthly payments, other than balloon
payments, and any assumed monthly payments due or deemed due, as the
case may be, on the mortgage loans for their respective due dates
occurring during the same calendar month as that distribution date;
(2) all voluntary principal prepayments received on the mortgage loans
during the related collection period;
(3) for any balloon loan for which the stated maturity date occurred, or
any ARD loan for which the anticipated repayment date occurred, during
or before the related collection period, any payment of principal,
exclusive of any voluntary principal prepayment and any amount
described in clause (4) below, made by
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<PAGE>
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 during the related
collection period that were identified and applied by the servicer as
recoveries of principal, in each case, exclusive of any portion of
those amounts that represents a recovery of the principal portion of
any monthly payment, other than a balloon payment, due and any excess
liquidation proceeds, or the principal portion of any assumed monthly
payment deemed due, for the related mortgage loan on a due date during
or before the same calendar month as that distribution date and not
previously recovered; and
(5) if that distribution date is after the initial distribution date, the
excess, if any, of the principal distribution amount for the
immediately preceding distribution date, over the aggregate
distributions of principal made on the principal balance certificates
from the principal distribution amount on that immediately preceding
distribution date.
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 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-
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<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 interest for only a period of time, 12 times
the monthly payment in effect at the end of such period.
3. "UW NCF DSCR," "underwritten NCF DSCR," "debt service coverage ratio,"
"DSC Ratio" or "DSCR" means, for any mortgage loan, (a) the underwritten net
cash flow for the mortgaged property, divided by (b) the annual debt service
for such mortgage loan, assuming for the purposes of this Annex A, except as
otherwise indicated, in the case of the mortgage loans providing for earn-out
reserves (which, if the conditions for release are not met by a certain date,
would be used to partially prepay or defease the mortgage loan), that the
principal balance of the mortgage loan is reduced by the amount of the
earn-out.
Generally, debt service coverage ratios are used by income property
lenders to measure the ratio of (a) cash currently generated by a property that
is available for debt service to (b) required debt service payments. However,
debt service coverage ratios measure only the current, or recent, ability of a
property to service mortgage debt. If a property does not possess a stable
operating expectancy (for instance, if it is subject to material leases that
are scheduled to expire during the loan term and that provide for above-market
rents and/or that may be difficult to replace), a debt service coverage ratio
A-2
<PAGE>
may not be a reliable indicator of a property's ability to service the mortgage
debt over the entire remaining loan term. The underwritten NCF DSCRs are
presented in this prospectus supplement for illustrative purposes only and, as
discussed above, are limited in their usefulness in assessing the current, or
predicting the future, ability of a mortgaged property to generate sufficient
cash flow to repay the related mortgage loan. As a result, no assurance can be
given, and no representation is made, that the underwritten NCF DSCRs
accurately reflect that ability. The underwritten NCF DSCR for the
interest-only mortgage loans is based on the payment due after the
interest-only period, and for the step amortization mortgage loans is based on
the payment due as of the cut-off date or the payment due after the
interest-only period, as applicable.
4. "Appraised value" means, for any mortgaged property, the appraiser's
adjusted value as stated in the most recent third-party appraisal available to
the depositor. In some cases, the appraiser's adjusted value takes into account
certain repairs or stabilization of operations. In some cases in which the
appraiser assumed the completion of repairs, such repairs were, generally,
either completed before the delivery date or the seller has taken reserves
sufficient to complete such repairs. No representation is made that any such
value would approximate either the value that would be determined in a current
appraisal of the related mortgaged property or the amount that would be
realized upon a sale.
5. "Cut-off date loan-to-value ratio," "loan-to-value ratio," "cut-off
date LTV," "current LTV," or "CLTV" means, with respect to any mortgage loan,
(a) the cut-off date balance of that mortgage loan (generally net of earn-out
reserves or additional collateral, if applicable) divided by (b) the appraised
value of the mortgaged property or mortgaged properties. For mortgage loans for
which earn-out reserves have been established, cut-off date loan-to-value ratio
is shown assuming that the earn-out is not achieved, except as otherwise
indicated.
6. "Square feet," "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 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.
A-3
<PAGE>
10. "Scheduled maturity date LTV" or "ARD LTV" means, for any balloon loan
or ARD loan, the Balloon or ARD Balance for that mortgage loan divided by the
appraised value of the related mortgaged property.
11. "Mortgage rate" means, for any mortgage loan, the mortgage rate in
effect as of the cut-off date for that mortgage loan.
12. "Servicing fee rate" for each mortgage loan is the percentage rate per
annum provided in Annex A for such mortgage loan at which compensation is
payable for the servicing of that mortgage loan (which includes the master
servicing fee rate) and at which compensation is also payable to the trustee.
13. "Prepayment provisions" for each mortgage loan are: "lock," which
means the duration of lockout period, and "defeasance," which means the
duration of any defeasance period. The number following the "/" is the number
of months for which the related call protection provision is in effect,
exclusive of the maturity date for calculation purposes only.
14. "Term to maturity" means, for any mortgage loan, the remaining term,
in months, from the cut-off date for that mortgage loan to the earlier of the
related maturity date or anticipated repayment date.
15. In those instances where the same tenant leases space under multiple
leases, the date shown as the "Largest Tenant Lease Expiration" is the earliest
termination date of any of such leases.
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 23439. The mortgage loan requires monthly payments of interest
only (calculated using actual/360 interest accrual method) from December 10,
1999 through November 10, 2001. Commencing on December 10, 2001 and continuing
through maturity, monthly payments of principal and interest in the amount of
$124,015.92 are required.
Loan Number 24317. The mortgage loan requires monthly payments of interest
only (calculated using actual/360 interest accrual method) from November 10,
1999 through October 10, 2001. Commencing on November 10, 2001 and continuing
through maturity, monthly payments of principal and interest in the amount of
$206,000.05 are required.
Loan Number 25545. The mortgage loan requires monthly payments of interest
only (calculated using actual/360 interest accrual method) from February 5,
2000 through January 5, 2001. Commencing on February 5, 2001 and continuing
through maturity, monthly payments of principal and interest in the amount of
$102,785.73 are required.
Loan Number 25912. The mortgage loan requires monthly payments of interest
only (calculated using actual/360 interest accrual method) from February 10,
2000 through January 10, 2001. Commencing on February 10, 2001 and continuing
through maturity, monthly payments of principal and interest in the amount of
$13,510.08 are required.
A-4
<PAGE>
Loan Number 09-0001325. The mortgage loan requires monthly payments of
interest only (calculated using an actual/360 interest accrual method) from
February 1, 2000 through, but excluding, its maturity on January 1, 2005.
CERTAIN RESERVES
Loan Number 19810. The mortgage loan requires an initial payment of $100
at closing into a replacement reserve. The borrower is paying $10,200 per month
into the replacement reserve. Beginning on May 1, 2000, the monthly payment
will be equal to one-twelfth of four and one half percent of gross revenue from
the previous calendar year.
Loan Number 20220. The mortgage loan requires an initial deposit of
$200,000 into a tenant improvement and leasing commission reserve. In addition
to the initial deposit, the mortgage loan requires the borrower to make a
monthly deposit into the tenant improvement and leasing commission reserve
which is the product of (i) the result of the gross rentals from the property
less principal and interest under the note and all reserves under the security
documents multiplied by (ii) one-half.
Loan Number 21094. The mortgage loan requires payments of $6,779.67 per
month into the replacement reserve during the first loan year through and
including the fifth loan year and $4,622.50 per month during the sixth loan
year through and including the tenth loan year.
Loan Number 22102. The mortgage loan requires monthly reserve payments in
an amount equal to one-twelfth of four percent of the total gross revenues
derived from the operation of the property during the immediately preceding
calendar year.
Loan Number 22103. The mortgage loan requires monthly reserve payments in
an amount equal to one-twelfth of four percent of the total gross revenues
derived from the operation of the property during the immediately preceding
calendar year.
Loan Number 23086. The mortgage loan requires an initial deposit of
$100,000 into a tenant improvement and leasing commission reserve. In addition
to the initial deposit, the borrower is required to make monthly deposits of
$6,500 so long as the occupancy rate is equal to or greater than 85% for the
immediately preceding three month period. Currently, the occupancy is 93%, the
borrower is currently not required to make the monthly deposit.
Loan Number 24140. The mortgage loan requires an initial deposit of
$107,000.00 into a replacement reserve. In addition to the initial deposit, the
borrower is required to deposit $2,625 monthly into the replacement reserve.
Lender may waive the monthly deposit provided that (a) no event of default
exists; (b) the annual minimum DSCR for the property is no less than 1.20x, and
(c) the annual inspections of the property by lender or its consultants are
satisfactory to lender in its sole discretion. The current DSCR is 1.26x, the
borrower is currently not required to make the monthly deposit.
Loan Number 24154. The mortgage loan requires an initial deposit of
$239,911 into a tenant improvement and leasing commission reserve. The borrower
has posted a letter of credit in lieu of the initial deposit.
Loan Number 24158. The mortgage loan requires an initial deposit of
$219,447 into a tenant improvement and leasing commission reserve. The borrower
has posted a letter of credit in lieu of the initial deposit.
A-5
<PAGE>
Loan Number 24573. The mortgage loan requires an initial deposit of
$248,813 into a tenant improvement and leasing commission reserve. The borrower
has posted a letter of credit in lieu of the initial deposit.
Loan Number 25545. The mortgage loan requires an Impound Account for
payment of real estate taxes and insurance premiums if at any time after an
occurrence of an event of default under the Atrium lease, (i) if the Atrium
lease is not in effect, or (ii) if at any time Atrium is not required by the
terms of the Atrium lease to pay all taxes and insurance premiums due with
respect to the property.
Loan Number 25942. The mortgage loan requires the borrower to make monthly
deposits into a debt service reserve during the months of September through May
during the term of the note in the amount necessary to produce a debt service
coverage ratio for the summer months of June, July, and August of 1.10x. The
debt service reserve shall be waived subject to all of the following conditions
being met as of August 10th of each year throughout the term of the loan: (i)
the DSCR for the trailing 12-month period is at least 1.20x, (ii) the property
has signed leases for the upcoming school term (September through May), which
indicates at least 90% occupancy and (iii) borrower is not in default.
Loan Number 09-0001302. The mortgage loan required a rent prepayment
reserve of $23,982 to be established at the time of the closing of the mortgage
loan. If no event of default exists under the mortgage loan on October 31,
2001, the amount on deposit in the rent prepayment reserve will be remitted to
the borrower.
Loan Number 09-0001283. The mortgage loan requires a monthly payment into
a seasonality reserve in the amount of $26,000 during each January, February,
March and April, subject to an annual waiver based upon results of operations
from prior year.
Loan Number 09-0001313. The mortgage loan required a rent reserve holdback
of $62,500 to be established at the time of the closing of the mortgage loan.
The reserve was established because certain tenants had not taken possession of
their space under their prospective leases at the time the mortgage loan was
closed. Funds in the reserve will be released to the borrower upon delivery to
the mortgagee of (i) new tenant estoppels from such tenants and (ii) proof of
full payment of rent for one month by each of these tenants.
Loan Number 09-0001328. The mortgage loan requires a monthly payment into
a tenant improvement and leasing commissions reserve in the amount of $1,200,
beginning on January 1, 2001.
Loan Number DBM10988. The mortgage loan requires an initial payment of
$2,500,000 into a tenant improvement and leasing commission reserve. The
borrower is paying $18,750 per month into the tenant improvement and leasing
commission reserve, with a cap of $2,725,000. This reserve must remain above
$1,900,000 for a minimum of six year or until Whiteford, Taylor & Preston
renews its lease with a term at least one year past the maturity of the loan.
Loan Number TA6975. The mortgage loan requires an initial payment of
$100,000 into a tenant improvement and leasing commission reserve. The borrower
is paying $9,500 per month into the tenant improvement and leasing commission
reserve, with cap of $400,000.
Loan Number TA7163. The mortgage loan requires an initial payment of
$282,600 into a tenant improvement and leasing commission reserve. The borrower
is paying $5,400 per month into the tenant improvement and leasing commission
reserve.
A-6
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Loan Number TA7314. The mortgage loan requires an initial payment of
$150,000 into a tenant improvement and leasing commission reserve. The borrower
is paying $10,000 per month into the tenant improvement and leasing commission
reserve.
Loan Number TA5900. The mortgage loan requires an initial payment of
$250,000 into a tenant improvement and leasing commission reserve. The borrower
is paying $20,000 per month into the tenant improvement and leasing commission
reserve.
Loan Number TA7189. The mortgage loan requires an initial payment of
$230,000 into a tenant improvement and leasing commission reserve. A minimum
balance of $150,000 is required.
Loan Number TA7176. The mortgage loan requires an initial payment of
$55,250 into a tenant improvement and leasing commission reserve. The borrower
is paying $4,450 per month into the tenant improvement and leasing commission
reserve, with a cap of $445,000.
Loan Number TA7885. The mortgage loan requires an initial payment of
$156,528 into a tenant improvement and leasing commission reserve. The borrower
is paying $1,667.67 per month into the tenant improvement and leasing
commission reserve, with a cap of $100,000. $150,000 of the initial deposit has
been replaced by a letter of credit.
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 (for all but one loan) and
CLTVs shown in this prospectus supplement and on the foldout pages in this
Annex A are calculated based on the principal balance of those mortgage loans
net of the related earnout amount. Those underwritten DSCRs and CLTVs are also
shown beneath the caption "Net of Earnout Underwritten NCF DSCR" and "Net of
Earnout LTV" in the table below. The amounts beneath the captions "Full Balance
Cut-Off Date LTV" and "Full Balance Cut-Off Date NCF DSCR" are calculated based
on a principal balance of those mortgage loans that includes the related
earnout amount. The following table sets forth certain information regarding
the earnout loans:
<TABLE>
<CAPTION>
FULL BALANCE
CONTROL LOAN EARNOUT CUT-OFF DATE CUT-OFF DATE
NUMBER NUMBER AMOUNT BALANCE LTV
- --------- ------------- ------------- -------------- --------------
<S> <C> <C> <C> <C>
19 227094 $2,750,000 $11,179,929 65.76%
25 25254 385,000 8,592,834 78.12
122 25912 200,000 1,775,000 73.96
26 09-0001308 990,000 8,480,363 77.20
39 09-0001326 1,000,000 6,744,445 64.85
64 902803901 640,000 4,422,909 78.98
<CAPTION>
NET OF EARLIEST
NET OF FULL BALANCE EARNOUT DEFEASANCE PREPAYMENT
CONTROL EARNOUT CUT-OFF DATE UNDERWRITTEN OR PREPAY DEFEASANCE PENALTIES
NUMBER LTV NCF DSCR NCF DSCR DATE OR PREPAY APPLY?
- --------- ----------- -------------- -------------- ------------ ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
19 49.59% 1.24x 1.65x 04/15/00 Prepay Yes
25 74.75 1.15 1.20 04/01/00 Prepay Yes
122 65.63 1.07 NAP NAP NAP NAP
26 69.19 1.10 1.25 07/01/00 Prepay Yes
39 55.24 1.32 1.55 01/01/01 Prepay Yes
64 67.55 1.33 1.55 05/01/00 Prepay Yes
</TABLE>
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<TABLE>
<CAPTION>
CONTROL
NUMBER LOAN SELLER LOAN NUMBER PROPERTY NAME PROPERTY TYPE
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1 GMACCM 24028 80 Lafayette Street Multifamily
- ---------------------------------------------------------------------------------------------------------------------------
2 GMACCM 22103 Equity Inns Portfolio Lodging
2a GMACCM 22103-A Equity Inns - AmeriSuites (Overland Park) Lodging
2b GMACCM 22103-B Equity Inns - AmeriSuites (Columbus) Lodging
2c GMACCM 22103-C Equity Inns - AmeriSuites (Memphis) Lodging
2d GMACCM 22103-D Equity Inns - AmeriSuites (Glen Allen) Lodging
2e GMACCM 22103-E Equity Inns - Hampton Inn (Overland Park) Lodging
2f GMACCM 22103-F Equity Inns - Hampton Inn (Kansas City) Lodging
2g GMACCM 22103-G Equity Inns - Hampton Inn (Memphis) Lodging
2h GMACCM 22103-H Equity Inns - Hampton Inn (Richardson) Lodging
2i GMACCM 22103-I Equity Inns - Hampton Inn (Morgantown) Lodging
2j GMACCM 22103-J Equity Inns - Homewood Suites (Phoenix) Lodging
2k GMACCM 22103-K Equity Inns - Homewood Suites (Sharonville) Lodging
2l GMACCM 22103-L Equity Inns - Homewood Suites (San Antonio) Lodging
2m GMACCM 22103-M Equity Inns - Residence Inn (Tucson) Lodging
2n GMACCM 22103-N Equity Inns - Residence Inn (Eagan) Lodging
2o GMACCM 22103-O Equity Inns - Residence Inn (Tinton Falls) Lodging
2p GMACCM 22103-P Equity Inns - Residence Inn (Portland) Lodging
2q GMACCM 22103-Q Equity Inns - Hampton Inn (Northville) Lodging
2r GMACCM 22103-R Equity Inns - Residence Inn (Princeton) Lodging
- ---------------------------------------------------------------------------------------------------------------------------
3 Deutsche Bank Securities DBM10988 First Union Tower Office
4 Archon Financial 09-0001303 World Savings Center Office
5 GMACCM 24317 Freeman Webb Portfolio Multifamily
5a GMACCM 24317-A British Woods Apartments Multifamily
5b GMACCM 24317-B Windover Apartments Multifamily
5c GMACCM 24317-C Highland Ridge Apartments Multifamily
- ---------------------------------------------------------------------------------------------------------------------------
6 Archon Financial 09-0001324 Minnesota Industrial Venture Industrial
6a Archon Financial 09-0001324-A Minnesota Industrial Venture Industrial
6b Archon Financial 09-0001324-B Minnesota Industrial Venture Industrial
6c Archon Financial 09-0001324-C Minnesota Industrial Venture Industrial
6d Archon Financial 09-0001324-D Minnesota Industrial Venture Office
6e Archon Financial 09-0001324-E Minnesota Industrial Venture Office
6f Archon Financial 09-0001324-F Minnesota Industrial Venture Industrial
6g Archon Financial 09-0001324-G Minnesota Industrial Venture Industrial
6h Archon Financial 09-0001324-H Minnesota Industrial Venture Industrial
6i Archon Financial 09-0001324-I Minnesota Industrial Venture Industrial
6j Archon Financial 09-0001324-J Minnesota Industrial Venture Industrial
6k Archon Financial 09-0001324-K Minnesota Industrial Venture Industrial
6l Archon Financial 09-0001324-L Minnesota Industrial Venture Industrial
6m Archon Financial 09-0001324-M Minnesota Industrial Venture Industrial
6n Archon Financial 09-0001324-N Minnesota Industrial Venture Industrial
- ---------------------------------------------------------------------------------------------------------------------------
7 Archon Financial 09-0001295 Vista Way Apartments Multifamily
8 GMACCM 23439 Citation Club on Palmer Ranch Multifamily
9 GMACCM 23452 Maverick Creek Villas Multifamily
10 Archon Financial 09-0001325 Boardwalk Shopping Center Anchored Retail
- ---------------------------------------------------------------------------------------------------------------------------
11 GMACCM 25545 Atrium Company Portfolio Industrial
11a GMACCM 25545-A Ambassador Row Industrial
11b GMACCM 25545-B Ed Rutherford Road Industrial
11c GMACCM 25545-C Industrial Drive Industrial
12 Deutsche Bank Securities DBM9650 Fairlane Commerce Park Industrial
- ---------------------------------------------------------------------------------------------------------------------------
13 GMACCM 23384 Concorde Place Apartments Multifamily
14 GMACCM 25580 Crossroads Shopping Center Anchored Retail
15 GMACCM 23666 Nisky Center & Vitraco Mixed Use
15a GMACCM 23666-A Nisky Center Retail
15b GMACCM 23666-B Vitraco Mall Mixed Use
- ---------------------------------------------------------------------------------------------------------------------------
16 Archon Financial 09-0001286 Buckingham Place Apartments Multifamily
17 Deutsche Bank Securities TA6975 175 Remsen Street Office
18 Archon Financial 09-0001310 Berkley Place Apartments Multifamily
19 GMACCM 22709 Newport Center Medical Building II Office
20 Archon Financial 09-0001278 47-50 West Street & 80 Washington Street Mixed Use
- ---------------------------------------------------------------------------------------------------------------------------
21 GMACCM 23625 Blue Bell West & Plymouth Crossing Office/Industrial
21a GMACCM 23625-A Blue Bell West Office
22a GMACCM 23625-B Plymouth Crossing Industrial
22 Deutsche Bank Securities TA7328 Commerce Tech Center Office
23 GMACCM 24573 Galyan's-Richfield Retail
- ---------------------------------------------------------------------------------------------------------------------------
24 GMACCM 23837 University Club Apartments Multifamily
25 GMACCM 25254 Commons of Valwood Multifamily
26 Archon Financial 09-0001308 Superstition Springs Center Anchored Retail
27 Archon Financial 09-0001289 Bridgewater Industrial Park Industrial
- ---------------------------------------------------------------------------------------------------------------------------
28 GMACCM 24307 Medina & Massillon Villas Multifamily
28a GMACCM 24307-A Golden Villas of Medina Multifamily
28b GMACCM 24307-B Golden Villas of Massillon Multifamily
29 GMACCM 24154 Galyan's-Lombard Retail
30 Deutsche Bank Securities TA7163 11-17 Beach Street Office
- ---------------------------------------------------------------------------------------------------------------------------
31 GMACCM 23725 Newport Medical Center Building I Office
32 Deutsche Bank Securities TA9068 Waterford Place Apartments Multifamily
33 GMACCM 23717 Gatherings Apartments Multifamily
34 Deutsche Bank Securities TA7314 106 Apple Street Office
35 Deutsche Bank Securities TA5900 10 New Bond Street Industrial
- ---------------------------------------------------------------------------------------------------------------------------
36 Archon Financial 09-0001296 Schoolcraft Business Park Industrial
37 Deutsche Bank Securities DBM10098 Winthrop Portfolio Retail
38 Deutsche Bank Securities TA8800 Sports Authority Norwalk Anchored Retail
39 Archon Financial 09-0001326 Dillon Ridge Marketplace Shopping Center Anchored Retail
40 Archon Financial 09-0001300 Milestone Manor Apartments Multifamily
- ---------------------------------------------------------------------------------------------------------------------------
41 Archon Financial 09-0001283 Travel Lodge - Tampa Lodging
42 GMACCM 23875 Northland Gardens Apartments Multifamily
43 GMACCM 25196 SunTrust/Gateway Operations Center Office
44 Archon Financial 09-0001316 333 Sunset Avenue Office
- ---------------------------------------------------------------------------------------------------------------------------
45 GMACCM 22283 North Batavia Business Center Industrial
46 GMACCM 24158 Galyan's-Kennesaw Retail
47 Archon Financial 09-0001282 Brookscrossing Apartments Multifamily
48 Archon Financial 09-0001293 Aurora Medical Center II Office
49 GMACCM 23086 Wendover Business Park Industrial
- ---------------------------------------------------------------------------------------------------------------------------
50 Archon Financial 09-0001272 Enclave Medical Office Plaza Office
51 GMACCM 25494 Village at Red Clay Apartments Multifamily
52 GMACCM 22759 Toluca Terrace Apartments Multifamily
53 Deutsche Bank Securities TA7233 Parsippany Crossroads Office Center Office
54 Archon Financial 09-0001328 Northgate Square Mixed Use
- ---------------------------------------------------------------------------------------------------------------------------
55 Deutsche Bank Securities TA9001 Laguna Vista Apartments Multifamily
56 Deutsche Bank Securities TA7189 Executive Court Office
57 Archon Financial 09-0001302 Corporate Center Industrial
58 Archon Financial 09-0001292 Aurora Medical Center I Office
59 Deutsche Bank Securities TA8486 Renaissance Apartments Multifamily
- ---------------------------------------------------------------------------------------------------------------------------
60 Deutsche Bank Securities TA7176 Linde Building Industrial
61 Archon Financial 09-0001312 Plantation Corporate Center Office
62 Archon Financial 09-0001299 Cranbury Road Medical Building Office
63 Archon Financial 09-0001315 Taft Hills Plaza Anchored Retail
64 Archon Financial 902803901 15 Dutch Street Multifamily
- ---------------------------------------------------------------------------------------------------------------------------
65 GMACCM 23273 Building 100 (Main Street NoviProject) Office
66 Archon Financial 09-0001313 The Village at Timarron Retail
67 Archon Financial 09-0001269 Carlsbad Research Center Industrial
68 GMACCM 21094 Whale Square Industrial
69 Archon Financial 09-0001291 Executive Airport Business Ctr Office
- ---------------------------------------------------------------------------------------------------------------------------
70 Archon Financial 09-0001252 McCrory Buildings Retail
70a Archon Financial 09-0001252-A McCrory Buildings Retail
70b Archon Financial 09-0001252-B McCrory Buildings Retail
71 Archon Financial 09-0001311 Summer Wind Apartments Multifamily
72 Deutsche Bank Securities TA8565 Manito Shopping Center Anchored Retail
- ---------------------------------------------------------------------------------------------------------------------------
73 Archon Financial 09-0001318 2070 Maple Street Industrial
74 Archon Financial 09-0001298 85 Madison Street Multifamily
75 Archon Financial 09-0001323 West Park Plaza Industrial
76 Deutsche Bank Securities TA7538 Northfield Marketplace Anchored Retail
77 Archon Financial 09-0001294 Beach Club Apartments Multifamily
- ---------------------------------------------------------------------------------------------------------------------------
78 Archon Financial 09-0001285 Yukon Building Office
79 Archon Financial 09-0001317 Madison Crossing Apartments Multifamily
80 GMACCM 23155 Four Expressway Plaza Office
81 Deutsche Bank Securities TA8747 750 Grand Street Multifamily
82 Archon Financial 09-0001321 Syndee's Industrial Building Industrial
- ---------------------------------------------------------------------------------------------------------------------------
83 GMACCM 24340 Cotton Farm Manufactured Housing Community Mobile Home Park
84 GMACCM 19810 The Point at Saranac Lake Lodging
85 Archon Financial 09-0001307 Plum Tree Center Office
86 Deutsche Bank Securities TA8802 Sports Authority St. Petersburg Anchored Retail
87 GMACCM 24737 Highland Village Shopping Center Anchored Retail
- ---------------------------------------------------------------------------------------------------------------------------
88 Archon Financial 09-0001320 Cornerstone Shopping Center Retail
89 Deutsche Bank Securities TA7885 Smithtown Executive Plaza Office
90 GMACCM 25247 El Cajon Cadillac Special Purpose
91 GMACCM 25893 Colchester Courtyard Apartments Multifamily
92 Archon Financial 09-0001297 Lakeridge Village Shopping Center Retail
- ---------------------------------------------------------------------------------------------------------------------------
93 GMACCM 25246 Balboa Village Retail
94 Archon Financial 09-0001314 Featherstone Industrial Industrial
95 GMACCM 23947 Parkway Plaza I & II Retail
96 Archon Financial 09-0001301 Bealeton Village Shopping Cntr Anchored Retail
97 Archon Financial 09-0001290 Brentwood Park Apartments Multifamily
- ---------------------------------------------------------------------------------------------------------------------------
98 GMACCM 20220 Today's Man Retail Building Retail
99 GMACCM 21708 Henderson Commons Retail
100 Archon Financial 09-0001306 Laurel Technology Center Office
101 Deutsche Bank Securities TA8645 Pine View Apartments Multifamily
102 Archon Financial 09-0001309 420 Feheley Drive Industrial
- ---------------------------------------------------------------------------------------------------------------------------
103 GMACCM 25936 521 Broadway Retail
104 GMACCM 24140 Singing Oaks Apartments Multifamily
105 Archon Financial 09-0001319 Wards Corner Research Center Industrial
106 Archon Financial 09-0001284 Preston Valley Phase II Retail
107 GMACCM 18652 Morgan Square Shopping Center Anchored Retail
- ---------------------------------------------------------------------------------------------------------------------------
108 Archon Financial 09-0001305 Fry's Continental Ranch Anchored Retail
109 GMACCM 25942 Casa Cortez Apartments Multifamily
110 Archon Financial 09-0001330 Valley Plaza Shopping Center Retail
111 Deutsche Bank Securities TA6655 Red Roof Lane/Depot Crossing Office
- ---------------------------------------------------------------------------------------------------------------------------
112 GMACCM 24788 For Eyes Optical-Snellville & Humble Retail
112a GMACCM 24788-A For Eyes Shopping Center - Snellville Retail
112b GMACCM 24788-B Men's Wearhouse Retail Store Retail
113 Archon Financial 09-0001322 35 West 31st Street Office
114 GMACCM 24057 Sentinel Pointe Apartments Multifamily
- ---------------------------------------------------------------------------------------------------------------------------
115 Archon Financial 09-0001250 814 King Street Office
116 GMACCM 23888 Interbelt North Business Center Industrial
117 GMACCM 23311 Broad Street Medical Building Office
118 Deutsche Bank Securities DBM10653 Ridgedale Plaza Retail
119 GMACCM 22102 Equity Inns - AmeriSuites (Indianapolis) Lodging
- ---------------------------------------------------------------------------------------------------------------------------
120 Deutsche Bank Securities DBM10477 Linden Portfolio Office/Special Purpose
120a Deutsche Bank Securities DBM10477-A 789 Linden Avenue Office
120b Deutsche Bank Securities DBM10477-B 1901 Lac DeVille Special Purpose
120c Deutsche Bank Securities DBM10477-C 2101 Lac DeVille Office
121 Deutsche Bank Securities TA4930 Days Inn Asheville Hotel Lodging
- ---------------------------------------------------------------------------------------------------------------------------
122 GMACCM 25912 Bandywood Apartments Multifamily
123 GMACCM 24108 JW Floor Coverings Building Industrial
124 GMACCM 26070 Arrowood Manufactured Housing Community Mobile Home Park
125 GMACCM 23118 Pin Oaks & Bur Oaks Apartments Multifamily
125a GMACCM 23118-A Pin Oaks Apartments Multifamily
125b GMACCM 23118-B Bur Oak Apartments Multifamily
- ---------------------------------------------------------------------------------------------------------------------------
126 GMACCM 23628 Vista Place Shopping Center Retail
127 GMACCM 24681 For Eyes-Valley View Retail
128 GMACCM 24099 Meadows Apartments Multifamily
129 Archon Financial 09-0001304 Syringa Terrace Apartments Multifamily
130 GMACCM 24095 CT Produce Industrial
- ---------------------------------------------------------------------------------------------------------------------------
131 Deutsche Bank Securities TA7381 Seguin Super 8 Motel Lodging
132 GMACCM 22648 For Eyes Optical Retail
133 GMACCM 24200 DeKalb Corner Office Center Office
134 GMACCM 22829 Highland Office Building Office
135 Deutsche Bank Securities DBM10646 Pacific Avenue Parking Garage Special Purpose
- ---------------------------------------------------------------------------------------------------------------------------
136 GMACCM 23523 Hampton Park Retail Center Retail
137 Deutsche Bank Securities DBM10642 Madiera Beach Office Center Mixed Use
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CONTROL
NUMBER ADDRESS CITY STATE ZIP CODE
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1 80 Lafayette Street New York New York 10013
- -------------------------------------------------------------------------------------------------------------------------
2
2a 6801 West 112th Street Overland Park Kansas 66211
2b 7490 Vantage Drive Columbus Ohio 43235
2c 7905 Giacosa Place Memphis Tennessee 38133
2d 4100 Cox Road Glen Allen Virginia 23060
2e 10591 East Metcalf Frontage Road Overland Park Kansas 66212
2f 11212 North Newark Circle Kansas City Missouri 64153
2g 5320 Poplar Avenue Memphis Tennessee 38119
2h 1577 Gateway Boulevard Richardson Texas 75080
2i 1053 Van Voorhis Road Morgantown West Virginia 26505
2j 2001 East Highland Avenue Phoenix Arizona 85026
2k 2670 East Kemper Road Sharonville Ohio 45241
2l 4323 Spectrum One San Antonio Texas 78230
2m 6477 East Speedway Boulevard Tucson Arizona 85710
2n 3040 Eagandale Place Eagan Minnesota 55121
2o 90 Park Road Tinton Falls New Jersey 07724
2p 1710 Northeast Multnomah Street Portland Oregon 97232
2q 20600 Haggerty Road Northville Michigan 48167
2r 4225 Route 1 Princeton New Jersey 08543
- -------------------------------------------------------------------------------------------------------------------------
3 7 St. Paul Street Baltimore Maryland 21202
4 1901 Harrison Street Oakland California 94612
5
5a 264 British Woods Drive Nashville Tennessee 37217
5b 301 Cheshire Drive NW Knoxville Tennessee 37919
5c 721 Due West Avenue Madison Tennessee 37115
- -------------------------------------------------------------------------------------------------------------------------
6
6a 2579-2605 Fairview Avenue North Roseville Minnesota 55113
6b 2770-2812 Fairview Avenue North Roseville Minnesota 55113
6c 2805-2823 Fairview Avenue North Roseville Minnesota 55113
6d 2825 Fairview Avenue North Roseville Minnesota 55113
6e 2833 Fairview Avenue North Roseville Minnesota 55113
6f 1929-1957 County Road C-2 Roseville Minnesota 55113
6g 501-515 County Road E Shoreview Minnesota 55126
6h 502-512 Shoreview Park Road Shoreview Minnesota 55126
6i 507-525 Shoreview Park Road Shoreview Minnesota 55126
6j 1620-1646 Terrace Drive Roseville Minnesota 55113
6k 1720-1746 Terrace Drive Roseville Minnesota 55113
6l 1752-1758 Terrace Drive Roseville Minnesota 55113
6m 1120 Red Fox Road Arden Hills Minnesota 55112
6n 3070 Long Lake Road Roseville Minnesota 55113
- -------------------------------------------------------------------------------------------------------------------------
7 3522 Vista Way Village Drive Oceanside California 92056
8 4110 Winners Circle Sarasota Florida 34238
9 15651 Chase Hill Boulevard San Antonio Texas 78256
10 NE Quadrant of IH 35 and Louis Henna Blvd. Round Rock Texas 78664
- -------------------------------------------------------------------------------------------------------------------------
11
11a 9001 Ambassador Row Dallas Texas 75247
11b 1001 Ed Rutherford Road Greenville Texas 75401
11c 6202 Industrial Drive Greenville Texas 75401
12 15080 Commerce Drive N, & 15100-200 Mercantile Drive Dearborn Michigan 48120
- -------------------------------------------------------------------------------------------------------------------------
13 2135 Godby Road College Park Georgia 30349
14 1128-1298 Vierling Drive Shakopee Minnesota 55379
15
15a Parcels 45 - A and 45 - B Estate Nisky No. 6 St Thomas, U.S. Virgin Islands 00802
15b Parcels 3, 7 & 8 Estate Thomas, Kings Quarter St Thomas, U.S. Virgin Islands 00802
- -------------------------------------------------------------------------------------------------------------------------
16 14 D Windsor Circle Newark Delaware 19702
17 175 Remsen Street Brooklyn New York 11201
18 100 Berkeley Place Circle Clemson South Carolina 29631
19 1401 Avocado Avenue Newport Beach California 92660
20 47-50 West street & 80 Washington Street New York New York 10006
- -------------------------------------------------------------------------------------------------------------------------
21
21a 653 Skippack Pike Whitpain Township Pennsylvania 19422
22a 4130 Butler Pike Whitemarsh Township Pennsylvania 19462
22 50 East Commerce Drive Schaumberg Illinois 60173
23 1700 West 78th Street Richfield Minnesota 55423
- -------------------------------------------------------------------------------------------------------------------------
24 2900 Southwest 23rd Terrace Gainesville Florida 32608
25 14208 Heritage Circle Farmers Branch Texas 75234
26 SWC of E. Baseline Road and South Power Road Gilbert Arizona 85234
27 East & West Side of Chimney Rock Road Bridgewater New Jersey 08807
- -------------------------------------------------------------------------------------------------------------------------
28
28a 800 Nottingham Drive Medina Ohio 44256
28b 1602 1st Street, NE Massillon Ohio 44646
29 810 Butterfield Road Lombard Illinois 60148
30 11-17 Beach Street New York New York 10013
- -------------------------------------------------------------------------------------------------------------------------
31 400 Newport Center Drive Newport Beach California 92660
32 4000 North Center Street Hickory North Carolina 28601
33 3961 Gathering Drive Orlando Florida 32817
34 106 Apple Street Tinton Falls New Jersey 07224
35 10 New Bond Street Worcester Massachusetts 01606
- -------------------------------------------------------------------------------------------------------------------------
36 38035 Schoolcraft Road, 13112 & 13115 Waco Road Livonia Michigan 48150
37 32 Main St, 14-21 Federal St, 2 E. Chestnut St, Nantucket Massachusetts 02554
38 444 Connecticut Avenue Norwalk Connecticut 06850
39 282-336 US Highway 6 Dillon Colorado 80435
40 14706 Normandy Court Laurel Maryland 20708
- -------------------------------------------------------------------------------------------------------------------------
41 820 East Busch Boulevard Tampa Florida 33612
42 2950 North Clifford Street Las Vegas Nevada 89115
43 8750 Northwest 21st Terrace Miami Florida 33172
44 333 Sunset Avenue Suisun City California 94585
- -------------------------------------------------------------------------------------------------------------------------
45 1401-1415 North Batavia Street Orange California 92867
46 691 Ernest W. Barrett Parkway NW Kennesaw Georgia 30144
47 8050 Taylor Road Riverdale Georgia 30274
48 1411 S. Potomac Aurora Colorado 80012
49 3400-3410 West Wendover Avenue Greensboro North Carolina 27404
- -------------------------------------------------------------------------------------------------------------------------
50 4726-4730 North Habana Avenue Tampa Florida 33614
51 2150 Melson Road Wilmington Delaware 19808
52 333 North Screenland Drive Burbank California 91505
53 300 Littleton Road Parsippany New Jersey 07054
54 9530-9620 Colerain Avenue Colerain Township Ohio 45251
- -------------------------------------------------------------------------------------------------------------------------
55 555 Belcher Road South Largo Florida 33771
56 1730, 1734, & 1738 Elton Road Silver Spring Maryland 20903
57 600 & 700 Corporate Circle (Bldgs. I & J) Golden Colorado 80401
58 1421 South Potomac Street Aurora Colorado 80012
59 3403 Winkler Avenue Fort Myers Florida 33916
- -------------------------------------------------------------------------------------------------------------------------
60 50 Powhattan Avenue Essington Pennsylvania 19029
61 2 South University Drive Plantation Florida 33324
62 579A Cranbury Road East Brunswick New Jersey 08816
63 NWC Kern Street & 10th Street Taft California 93268
64 15 Dutch Street New York New York 10038
- -------------------------------------------------------------------------------------------------------------------------
65 42705 Grand River Avenue Novi Michigan 48375
66 511 E. Southlake Boulevard Southlake Texas 76092
67 1908 Aston Avenue Carlsbad California 92008
68 14 53rd Street Brooklyn New York 11232
69 1875-1895 West Commercial Boulevard Ft. Lauderdale Florida 33309
- -------------------------------------------------------------------------------------------------------------------------
70
70a 8 Palisade Avenue Yonkers New York 10701
70b 2914 Third Avenue Bronx New York 10455
71 833 Fairfield Drive Austin Texas 78758
72 802 - 820 East 29th Avenue & 3007 - 3017 Grand Blvd. Spokane Washington 99203
- -------------------------------------------------------------------------------------------------------------------------
73 2070 Maple Street Des Plaines Illinois 60018
74 85 Madison Street Hoboken New Jersey 07030
75 Annapolis Lane & 24th Avenue North Plymouth Minnesota 55441
76 5365-5407 Crooks Road Troy Michigan 48098
77 2350 South 8th Avenue Yuma Arizona 85364
- -------------------------------------------------------------------------------------------------------------------------
78 3150 "C" Street Anchorage Alaska 99503
79 1600-1610 East Madison Street Seattle Washington 98112
80 4 Expressway Plaza Roslyn Heights New York 11577
81 750 Grand Street Brooklyn New York 11211
82 975 American Pacific Drive Henderson Nevada 89014
- -------------------------------------------------------------------------------------------------------------------------
83 75 Cotton Farm Road Danville New Hampshire 03819
84 HCR #1, Box 65, Beaverwood Road Saranac Lake New York 12983
85 3350 NW Boca Raton Blvd. Boca Raton Florida 33431
86 3700 Tyrone Blvd. N St. Petersburg Florida 33710
87 6929 Airport Boulevard Austin Texas 78752
- -------------------------------------------------------------------------------------------------------------------------
88 4400 N. Midland Drive Midland Texas 79707
89 222 Jericho Turnpike Smithtown New York 11787
90 1375, 1385, 1405 East Main Street El Cajon California 92021
91 14-65 Balaban Road Colchester Connecticut 06415
92 9600 Audelia Road Dallas Texas 75238
- -------------------------------------------------------------------------------------------------------------------------
93 4411 Mercury Street San Diego California 92111
94 15005 Farm Creek Drive Woodbridge Virginia 22191
95 24041-24063 Dequindre Rd., 1721 Maple & 24040-24050 Vance Hazel Park Michigan 48030
96 6346-6394 Village Center Drive Bealeton Virginia 22712
97 2510 Farnsworth Drive Ft. Wayne Indiana 46815
- -------------------------------------------------------------------------------------------------------------------------
98 1528 Chestnut Street Philadelphia Pennsylvania 19102
99 2720-3010 Henderson Ave.; 5103 Miller St.; 5107-5113 Willis Dallas Texas 75206
100 14900 Sweitzer Lane Laurel Maryland 20707
101 3910 West Walnut Street Garland Texas 75042
102 420 Feheley Drive King of Prussia Pennsylvania 19406
- -------------------------------------------------------------------------------------------------------------------------
103 521 Broadway New York New York 10012
104 307 North Loop 288 Denton Texas 76201
105 455 Wards Corner Road Miami Township Ohio 45140
106 5850 LBJ Freeway Dallas Texas 75240
107 200 Morgan Square Berkeley Springs West Virginia 25411
- -------------------------------------------------------------------------------------------------------------------------
108 7850 North Silverbell Road Marana Arizona 85743
109 1834 Jackson Bluff Road Tallahassee Florida 32304
110 9206-9350 SW Beaverton-Hillsdale Highway Beaverton Oregon 97005
111 9-13 Red Roof Lane Salem New Hampshire 03079
- -------------------------------------------------------------------------------------------------------------------------
112
112a 2055 Scenic Highway Snellville Georgia 30078
112b 20125 Highway 59 North Humble Texas 77338
113 35 West 31st Street New York New York 10001
114 1235 East Mulberry Avenue San Antonio Texas 78209
- -------------------------------------------------------------------------------------------------------------------------
115 814 King Street Alexandria Virginia 22314
116 14310-14320 Interdrive East Houston Texas 77032
117 1701-03 S. Broad Street Philadelphia Pennsylvania 19148
118 33-43 Ridgedale Avenue East Hanover New Jersey 07936
119 9104 Keystone Crossing Indianapolis Indiana 46240
- -------------------------------------------------------------------------------------------------------------------------
120
120a 789 Linden Avenue Pittsford (Rochester) New York 14625
120b 1901 Lac DeVille Boulevard Brighton (Rochester) New York 14618
120c 2102 Lac DeVille Boulevard Brighton (Rochester) New York 14618
121 120 Patton Avenue Ashville North Carolina 28801
- -------------------------------------------------------------------------------------------------------------------------
122 5111 Orchard Road Pascagoula Mississippi 39581
123 9881 Carroll Centre Road San Diego California 92126
124 4477 Wrightsboro Road Grovetown Georgia 30813
125
125a 216 & 224 South Kellogg Avenue Ames Iowa 50010
125b 219 South Sherman Avenue Ames Iowa 50010
- -------------------------------------------------------------------------------------------------------------------------
126 1830, 1850, 1876 Hacienda Drive Vista California 92083
127 4757 Valley View Boulevard Roanoke Virginia 24012
128 100, 104 & 108 NW 5th Avenue Altoona Iowa 50009
129 2101-2158 Marigold Street Pocatello Idaho 83201
130 1450 West La Quinta Road Nogales Arizona 85621
- -------------------------------------------------------------------------------------------------------------------------
131 1525 North Highway 46 Seguin Texas 78155
132 3122 East Colonial Drive Orlando Florida 32803
133 3469 Lawrenceville Highway Tucker Georgia 30084
134 2211 East Highland Avenue Phoenix Arizona 85016
135 1512-1514 Pacific Avenue Dallas Texas 75201
- -------------------------------------------------------------------------------------------------------------------------
136 17-31 Hampton Park Road Capital Heights Maryland 20743
137 14955 Gulf Boulevard Madiera Beach Florida 33708
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
% OF AGGREGATE
CONTROL CROSS COLLATERALIZED ORIGINAL CUT-OFF DATE INITIAL POOL
NUMBER GROUPS RELATED GROUPS BALANCE ($) BALANCE ($) BALANCE
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1 48,576,876 48,443,653 5.47
- -------------------------------------------------------------------------------------------------------------------
2 Group A Group 1 46,590,000 46,224,611 5.22
2a
2b
2c
2d
2e
2f
2g
2h
2i
2j
2k
2l
2m
2n
2o
2p
2q
2r
- -------------------------------------------------------------------------------------------------------------------
3 37,000,000 36,959,753 4.17
4 29,500,000 29,425,174 3.32
5 28,500,000 28,500,000 3.22
5a
5b
5c
- -------------------------------------------------------------------------------------------------------------------
6 Group 2 23,000,000 22,972,361 2.59
6a
6b
6c
6d
6e
6f
6g
6h
6i
6j
6k
6l
6m
6n
- -------------------------------------------------------------------------------------------------------------------
7 18,960,000 18,904,581 2.13
8 17,050,000 17,050,000 1.92
9 14,885,000 14,871,558 1.68
10 14,600,000 14,600,000 1.65
- -------------------------------------------------------------------------------------------------------------------
11 13,123,000 13,123,000 1.48
11a
11b
11c
12 13,129,000 13,113,190 1.48
- -------------------------------------------------------------------------------------------------------------------
13 12,950,000 12,897,774 1.46
14 12,780,000 12,764,323 1.44
15 12,000,000 11,955,484 1.35
15a
15b
- -------------------------------------------------------------------------------------------------------------------
16 11,700,000 11,663,775 1.32
17 11,500,000 11,395,492 1.29
18 11,400,000 11,373,287 1.28
19 Group 4 11,200,000 11,179,929 1.26
20 11,000,000 10,962,714 1.24
- -------------------------------------------------------------------------------------------------------------------
21 10,280,000 10,260,577 1.16
21a
22a
22 10,000,000 9,965,512 1.12
23 Group 5 9,300,000 9,266,742 1.05
- -------------------------------------------------------------------------------------------------------------------
24 9,000,000 8,974,118 1.01
25 8,600,000 8,592,834 0.97
26 8,500,000 8,480,363 0.96
27 Group 6 8,500,000 8,462,563 0.95
- -------------------------------------------------------------------------------------------------------------------
28 8,450,000 8,432,397 0.95
28a
28b
29 Group 5 8,375,000 8,345,079 0.94
30 8,350,000 8,296,082 0.94
- -------------------------------------------------------------------------------------------------------------------
31 Group 4 8,300,000 8,285,126 0.93
32 8,250,000 8,218,275 0.93
33 8,200,000 8,183,378 0.92
34 8,150,000 8,116,829 0.92
35 7,402,500 7,378,390 0.83
- -------------------------------------------------------------------------------------------------------------------
36 7,029,000 7,010,321 0.79
37 7,000,000 7,000,000 0.79
38 6,874,000 6,855,468 0.77
39 6,750,000 6,744,614 0.76
40 Group 7 6,500,000 6,479,775 0.73
- -------------------------------------------------------------------------------------------------------------------
41 6,492,000 6,460,481 0.73
42 6,470,000 6,441,372 0.73
43 6,400,000 6,389,543 0.72
44 6,350,000 6,339,781 0.72
- -------------------------------------------------------------------------------------------------------------------
45 6,350,000 6,338,166 0.72
46 Group 5 6,225,000 6,203,165 0.70
47 5,900,000 5,878,111 0.66
48 Group 8 5,500,000 5,484,407 0.62
49 5,450,000 5,427,978 0.61
- -------------------------------------------------------------------------------------------------------------------
50 5,416,000 5,409,356 0.61
51 5,395,000 5,385,148 0.61
52 5,400,000 5,380,878 0.61
53 5,150,000 5,117,248 0.58
54 5,050,000 5,042,842 0.57
- -------------------------------------------------------------------------------------------------------------------
55 5,000,000 4,988,366 0.56
56 5,000,000 4,981,698 0.56
57 4,940,000 4,928,177 0.56
58 Group 8 4,900,000 4,886,807 0.55
59 4,900,000 4,874,984 0.55
- -------------------------------------------------------------------------------------------------------------------
60 4,875,000 4,843,762 0.55
61 4,750,000 4,742,278 0.54
62 4,550,000 4,536,901 0.51
63 4,500,000 4,492,904 0.51
64 4,440,000 4,422,909 0.50
- -------------------------------------------------------------------------------------------------------------------
65 4,440,000 4,421,066 0.50
66 4,345,000 4,338,131 0.49
67 4,297,000 4,279,355 0.48
68 4,210,000 4,198,342 0.47
69 Group 6 4,200,000 4,188,544 0.47
- -------------------------------------------------------------------------------------------------------------------
70 4,150,000 4,142,988 0.47
70a
70b
71 4,130,000 4,121,033 0.46
72 4,125,000 4,113,469 0.46
- -------------------------------------------------------------------------------------------------------------------
73 4,000,000 3,994,697 0.45
74 4,000,000 3,990,359 0.45
75 Group 2 3,975,000 3,970,174 0.45
76 3,975,000 3,960,682 0.45
77 3,765,000 3,754,106 0.42
- -------------------------------------------------------------------------------------------------------------------
78 3,700,000 3,688,040 0.42
79 3,600,000 3,593,662 0.41
80 3,525,000 3,514,071 0.40
81 3,500,000 3,495,742 0.39
82 3,500,000 3,495,425 0.39
- -------------------------------------------------------------------------------------------------------------------
83 Group B Group 9 3,490,000 3,483,262 0.39
84 3,400,000 3,393,423 0.38
85 3,400,000 3,392,108 0.38
86 3,375,000 3,365,901 0.38
87 3,350,000 3,347,468 0.38
- -------------------------------------------------------------------------------------------------------------------
88 3,300,000 3,296,289 0.37
89 3,300,000 3,286,928 0.37
90 Group C Group 10 3,296,000 3,282,064 0.37
91 3,250,000 3,247,267 0.37
92 3,200,000 3,192,233 0.36
- -------------------------------------------------------------------------------------------------------------------
93 Group C Group 10 3,159,000 3,150,377 0.36
94 3,000,000 2,994,835 0.34
95 2,950,000 2,944,459 0.33
96 Group 7 2,850,000 2,841,774 0.32
97 2,800,000 2,790,128 0.31
- -------------------------------------------------------------------------------------------------------------------
98 2,800,000 2,783,302 0.31
99 2,740,000 2,731,843 0.31
100 2,732,000 2,725,910 0.31
101 2,720,000 2,711,432 0.31
102 2,580,000 2,574,317 0.29
- -------------------------------------------------------------------------------------------------------------------
103 2,500,000 2,498,107 0.28
104 2,500,000 2,489,408 0.28
105 2,450,000 2,445,926 0.28
106 2,400,000 2,387,958 0.27
107 2,369,000 2,366,280 0.27
- -------------------------------------------------------------------------------------------------------------------
108 2,359,000 2,353,407 0.27
109 2,350,000 2,346,897 0.26
110 2,300,000 2,300,000 0.26
111 2,250,000 2,236,195 0.25
- -------------------------------------------------------------------------------------------------------------------
112 Group 11 2,220,000 2,217,120 0.25
112a
112b
113 2,199,000 2,186,653 0.25
114 2,150,000 2,142,225 0.24
- -------------------------------------------------------------------------------------------------------------------
115 2,057,000 2,052,641 0.23
116 2,045,000 2,043,349 0.23
117 2,014,000 2,008,723 0.23
118 1,945,000 1,937,700 0.22
119 Group A Group 1 1,920,000 1,904,942 0.21
- -------------------------------------------------------------------------------------------------------------------
120 1,881,000 1,879,422 0.21
120a
120b
120c
121 1,800,000 1,796,101 0.20
- -------------------------------------------------------------------------------------------------------------------
122 1,775,000 1,775,000 0.20
123 1,680,000 1,675,798 0.19
124 Group B Group 9 1,628,000 1,624,857 0.18
125 1,625,000 1,618,055 0.18
125a
125b
- -------------------------------------------------------------------------------------------------------------------
126 1,500,000 1,496,290 0.17
127 Group 11 1,480,000 1,477,524 0.17
128 1,460,000 1,455,894 0.16
129 1,450,000 1,446,431 0.16
130 Group C Group 10 1,421,000 1,414,992 0.16
- -------------------------------------------------------------------------------------------------------------------
131 1,400,000 1,394,821 0.16
132 Group 11 1,250,000 1,246,427 0.14
133 1,150,000 1,147,915 0.13
134 1,100,000 1,097,197 0.12
135 1,000,000 983,877 0.11
- -------------------------------------------------------------------------------------------------------------------
136 950,000 946,421 0.11
137 437,000 434,534 0.05
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CUMULATIVE % OF INTEREST
CONTROL INITIAL POOL MORTGAGE RATE SERVICING ACCRUAL
NUMBER BALANCE (%) FEE RATE (%) METHOD AMORTIZATION TYPE
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1 5.47 8.1350 0.1276 Actual/360 Balloon
- ------------------------------------------------------------------------------------------------------------------------
2 10.68 8.3700 0.1276 Actual/360 Hyper Amortizing
2a
2b
2c
2d
2e
2f
2g
2h
2i
2j
2k
2l
2m
2n
2o
2p
2q
2r
- ------------------------------------------------------------------------------------------------------------------------
3 14.85 9.0300 0.0526 Actual/360 Hyper Amortizing
4 18.17 7.9100 0.0926 Actual/360 Balloon
5 21.39 7.7300 0.0776 Actual/360 Interest Only, then Amortizing Balloon
5a
5b
5c
- ------------------------------------------------------------------------------------------------------------------------
6 23.98 8.5500 0.0526 Actual/360 Balloon
6a
6b
6c
6d
6e
6f
6g
6h
6i
6j
6k
6l
6m
6n
- ------------------------------------------------------------------------------------------------------------------------
7 26.11 8.0300 0.0526 Actual/360 Balloon
8 28.03 7.7960 0.0426 Actual/360 Interest Only, then Amortizing Balloon
9 29.71 7.9100 0.1276 Actual/360 Balloon
10 31.36 8.3300 0.1226 Actual/360 Interest Only
- ------------------------------------------------------------------------------------------------------------------------
11 32.84 8.7000 0.1276 Actual/360 Interest Only, then Amortizing Balloon
11a
11b
11c
12 34.32 8.5400 0.0526 Actual/360 Balloon
- ------------------------------------------------------------------------------------------------------------------------
13 35.77 8.1300 0.1276 Actual/360 Balloon
14 37.21 8.4500 0.1276 Actual/360 Balloon
15 38.56 9.0100 0.1276 Actual/360 Balloon
15a
15b
- ------------------------------------------------------------------------------------------------------------------------
16 39.88 7.8000 0.0526 Actual/360 Balloon
17 41.16 8.0300 0.0526 Actual/360 Balloon
18 42.45 8.2500 0.0526 Actual/360 Balloon
19 43.71 8.6800 0.1276 Actual/360 Balloon
20 44.95 8.2900 0.0526 Actual/360 Balloon
- ------------------------------------------------------------------------------------------------------------------------
21 46.10 8.4100 0.0826 Actual/360 Balloon
21a
22a
22 47.23 8.2200 0.0526 Actual/360 Balloon
23 48.27 8.7480 0.1276 Actual/360 Balloon
- ------------------------------------------------------------------------------------------------------------------------
24 49.29 7.8800 0.0226 Actual/360 Balloon
25 50.26 8.5900 0.1276 Actual/360 Balloon
26 51.21 8.3100 0.0526 Actual/360 Balloon
27 52.17 8.5300 0.0526 Actual/360 Balloon
- ------------------------------------------------------------------------------------------------------------------------
28 53.12 7.9100 0.0776 Actual/360 Hyper Amortizing
28a
28b
29 54.06 8.7530 0.1276 Actual/360 Balloon
30 55.00 7.5600 0.0526 Actual/360 Balloon
- ------------------------------------------------------------------------------------------------------------------------
31 55.93 8.6800 0.1276 Actual/360 Balloon
32 56.86 7.7700 0.0526 Actual/360 Balloon
33 57.78 8.0500 0.1276 Actual/360 Balloon
34 58.70 8.4300 0.0526 Actual/360 Balloon
35 59.53 8.4500 0.0526 Actual/360 Hyper Amortizing
- ------------------------------------------------------------------------------------------------------------------------
36 60.32 8.4000 0.1026 Actual/360 Balloon
37 61.11 9.0300 0.0526 Actual/360 Hyper Amortizing
38 61.88 8.3450 0.0526 Actual/360 Balloon
39 62.64 8.9800 0.0526 Actual/360 Balloon
40 63.38 7.7800 0.0526 Actual/360 Balloon
- ------------------------------------------------------------------------------------------------------------------------
41 64.10 9.0900 0.0526 Actual/360 Balloon
42 64.83 8.2900 0.1276 Actual/360 Balloon
43 65.55 9.1500 0.1276 Actual/360 Balloon
44 66.27 8.4500 0.0526 Actual/360 Balloon
- ------------------------------------------------------------------------------------------------------------------------
45 66.98 8.4800 0.1276 Actual/360 Balloon
46 67.68 8.8470 0.1276 Actual/360 Balloon
47 68.35 7.9200 0.0526 Actual/360 Balloon
48 68.96 8.1500 0.0526 Actual/360 Balloon
49 69.58 8.1200 0.1276 Actual/360 Balloon
- ------------------------------------------------------------------------------------------------------------------------
50 70.19 8.4500 0.0526 Actual/360 Balloon
51 70.79 7.9400 0.1276 Actual/360 Balloon
52 71.40 7.7400 0.1276 Actual/360 Balloon
53 71.98 7.6200 0.0526 Actual/360 Balloon
54 72.55 8.8800 0.0526 Actual/360 Balloon
- ------------------------------------------------------------------------------------------------------------------------
55 73.11 8.2800 0.0526 Actual/360 Hyper Amortizing
56 73.67 8.4400 0.0526 Actual/360 Balloon
57 74.23 8.1600 0.0526 Actual/360 Balloon
58 74.78 8.3500 0.0526 Actual/360 Balloon
59 75.33 7.5800 0.0526 Actual/360 Balloon
- ------------------------------------------------------------------------------------------------------------------------
60 75.88 8.3100 0.0526 Actual/360 Balloon
61 76.41 8.4100 0.0526 Actual/360 Balloon
62 76.92 8.0900 0.0526 Actual/360 Balloon
63 77.43 8.5300 0.0526 Actual/360 Balloon
64 77.93 8.2500 0.0526 Actual/360 Balloon
- ------------------------------------------------------------------------------------------------------------------------
65 78.43 8.4700 0.1276 Actual/360 Balloon
66 78.92 8.5200 0.1026 Actual/360 Balloon
67 79.40 8.0000 0.0526 Actual/360 Balloon
68 79.87 8.8750 0.1276 Actual/360 Balloon
69 80.35 8.3000 0.0526 Actual/360 Balloon
- ------------------------------------------------------------------------------------------------------------------------
70 80.81 9.3400 0.0526 Actual/360 Balloon
70a
70b
71 81.28 8.5700 0.0526 Actual/360 Balloon
72 81.74 8.2050 0.0526 Actual/360 Hyper Amortizing
- ------------------------------------------------------------------------------------------------------------------------
73 82.19 8.0700 0.0526 Actual/360 Balloon
74 82.64 8.1300 0.0526 Actual/360 Balloon
75 83.09 8.5000 0.0526 Actual/360 Balloon
76 83.54 8.5000 0.0526 Actual/360 Balloon
77 83.96 8.0700 0.0526 Actual/360 Balloon
- ------------------------------------------------------------------------------------------------------------------------
78 84.38 8.4800 0.0526 Actual/360 Balloon
79 84.78 8.0900 0.0526 Actual/360 Balloon
80 85.18 8.4000 0.1276 Actual/360 Balloon
81 85.57 8.4900 0.0526 Actual/360 Balloon
82 85.97 8.1400 0.0526 Actual/360 Balloon
- ------------------------------------------------------------------------------------------------------------------------
83 86.36 8.3000 0.0876 Actual/360 Balloon
84 86.74 9.1250 0.1276 Actual/360 Hyper Amortizing
85 87.13 8.2900 0.0526 Actual/360 Balloon
86 87.51 8.3450 0.0526 Actual/360 Balloon
87 87.88 9.5000 0.1276 Actual/360 Balloon
- ------------------------------------------------------------------------------------------------------------------------
88 88.26 8.8700 0.0526 Actual/360 Balloon
89 88.63 8.1400 0.0526 Actual/360 Balloon
90 89.00 8.1600 0.1276 Actual/360 Balloon
91 89.36 8.5100 0.1276 Actual/360 Balloon
92 89.72 8.7400 0.0526 Actual/360 Balloon
- ------------------------------------------------------------------------------------------------------------------------
93 90.08 8.1600 0.1276 Actual/360 Balloon
94 90.42 8.1800 0.0526 Actual/360 Balloon
95 90.75 8.4400 0.1276 Actual/360 Balloon
96 91.07 8.0800 0.0526 Actual/360 Balloon
97 91.39 8.1300 0.0526 Actual/360 Balloon
- ------------------------------------------------------------------------------------------------------------------------
98 91.70 8.4800 0.1276 Actual/360 Balloon
99 92.01 8.6000 0.1276 Actual/360 Balloon
100 92.32 8.4600 0.0526 Actual/360 Balloon
101 92.62 7.7300 0.0526 Actual/360 Balloon
102 92.91 8.5100 0.0526 Actual/360 Balloon
- ------------------------------------------------------------------------------------------------------------------------
103 93.19 9.4800 0.1276 Actual/360 Balloon
104 93.47 7.8750 0.1276 Actual/360 Balloon
105 93.75 8.3200 0.1226 Actual/360 Balloon
106 94.02 8.9200 0.0526 Actual/360 Balloon
107 94.29 8.7700 0.1276 Actual/360 Balloon
- ------------------------------------------------------------------------------------------------------------------------
108 94.55 8.2000 0.0526 Actual/360 Balloon
109 94.82 8.0900 0.1276 Actual/360 Balloon
110 95.08 8.7300 0.0526 Actual/360 Balloon
111 95.33 7.7600 0.0526 Actual/360 Balloon
- ------------------------------------------------------------------------------------------------------------------------
112 95.58 8.9300 0.1276 Actual/360 Balloon
112a
112b
113 95.83 8.6600 0.0526 Actual/360 Fully Amortizing
114 96.07 7.6300 0.1276 Actual/360 Balloon
- ------------------------------------------------------------------------------------------------------------------------
115 96.30 8.6700 0.0526 Actual/360 Balloon
116 96.53 8.8750 0.1276 Actual/360 Balloon
117 96.76 8.3800 0.1276 Actual/360 Balloon
118 96.97 8.5000 0.0526 Actual/360 Balloon
119 97.19 8.3700 0.1276 Actual/360 Hyper Amortizing
- ------------------------------------------------------------------------------------------------------------------------
120 97.40 8.5300 0.0526 Actual/360 Hyper Amortizing
120a
120b
120c
121 97.60 9.4300 0.0526 Actual/360 Hyper Amortizing
- ------------------------------------------------------------------------------------------------------------------------
122 97.80 8.3900 0.1276 Actual/360 Interest Only, then Amortizing Balloon
123 97.99 8.6300 0.1276 Actual/360 Balloon
124 98.18 8.3000 0.1276 Actual/360 Balloon
125 98.36 7.8300 0.1276 Actual/360 Balloon
125a
125b
- ------------------------------------------------------------------------------------------------------------------------
126 98.53 8.6900 0.1276 Actual/360 Balloon
127 98.69 9.0300 0.1276 Actual/360 Balloon
128 98.86 8.0000 0.1276 Actual/360 Balloon
129 99.02 8.0400 0.0526 Actual/360 Balloon
130 99.18 8.1600 0.1276 Actual/360 Balloon
- ------------------------------------------------------------------------------------------------------------------------
131 99.34 9.5200 0.0526 Actual/360 Balloon
132 99.48 8.8000 0.1276 Actual/360 Balloon
133 99.61 8.6200 0.1276 Actual/360 Balloon
134 99.73 8.5300 0.1276 Actual/360 Balloon
135 99.84 9.0000 0.0526 Actual/360 Fully Amortizing
- ------------------------------------------------------------------------------------------------------------------------
136 99.95 8.9100 0.1276 Actual/360 Balloon
137 100.00 9.6250 0.0526 Actual/360 Balloon
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ORIGINAL
ORIGINAL INTEREST REMAINING TERM TO REMAINING ORIGINAL REMAINING
CONTROL ONLY PERIOD INTEREST ONLY MATURITY TERM TO AMORTIZATION TERM AMORTIZATION TERM
NUMBER (MOS.) PERIOD (MOS.) (MOS.) MATURITY (MOS.) (MOS.) (MOS.)
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1 120 116 360 356
- ----------------------------------------------------------------------------------------------------------------------
2 120 112 300 292
2a
2b
2c
2d
2e
2f
2g
2h
2i
2j
2k
2l
2m
2n
2o
2p
2q
2r
- ----------------------------------------------------------------------------------------------------------------------
3 120 118 360 358
4 132 128 360 356
5 24 19 120 115 360 360
5a
5b
5c
- ----------------------------------------------------------------------------------------------------------------------
6 120 118 360 358
6a
6b
6c
6d
6e
6f
6g
6h
6i
6j
6k
6l
6m
6n
- ----------------------------------------------------------------------------------------------------------------------
7 120 115 360 355
8 24 20 120 116 360 360
9 120 119 360 359
10 60 58 60 58
- ----------------------------------------------------------------------------------------------------------------------
11 12 10 120 118 360 360
11a
11b
11c
12 120 118 360 358
- ----------------------------------------------------------------------------------------------------------------------
13 120 114 360 354
14 120 118 360 358
15 120 116 300 296
15a
15b
- ----------------------------------------------------------------------------------------------------------------------
16 120 115 360 355
17 120 105 360 345
18 120 116 360 356
19 120 117 360 357
20 120 114 360 354
- ----------------------------------------------------------------------------------------------------------------------
21 120 117 360 357
21a
22a
22 120 114 360 354
23 120 114 360 354
- ----------------------------------------------------------------------------------------------------------------------
24 120 116 360 356
25 120 119 360 359
26 120 116 360 356
27 120 115 300 295
- ----------------------------------------------------------------------------------------------------------------------
28 120 117 360 357
28a
28b
29 120 114 360 354
30 120 110 360 350
- ----------------------------------------------------------------------------------------------------------------------
31 120 117 360 357
32 120 114 360 354
33 120 117 360 357
34 120 112 360 352
35 120 114 360 354
- ----------------------------------------------------------------------------------------------------------------------
36 120 115 360 355
37 120 120 360 360
38 120 115 360 355
39 120 119 360 359
40 120 115 360 355
- ----------------------------------------------------------------------------------------------------------------------
41 120 114 300 294
42 120 113 360 353
43 84 81 360 357
44 120 117 360 357
- ----------------------------------------------------------------------------------------------------------------------
45 120 117 360 357
46 120 114 360 354
47 120 114 360 354
48 120 115 360 355
49 120 114 360 354
- ----------------------------------------------------------------------------------------------------------------------
50 120 118 360 358
51 120 117 360 357
52 120 115 360 355
53 120 110 360 350
54 120 119 270 269
- ----------------------------------------------------------------------------------------------------------------------
55 120 116 360 356
56 120 113 360 353
57 120 116 360 356
58 120 115 360 355
59 120 112 360 352
- ----------------------------------------------------------------------------------------------------------------------
60 120 108 360 348
61 120 117 360 357
62 120 115 360 355
63 120 117 360 357
64 120 113 360 353
- ----------------------------------------------------------------------------------------------------------------------
65 120 113 360 353
66 120 117 360 357
67 120 113 360 353
68 120 117 300 297
69 120 115 360 355
- ----------------------------------------------------------------------------------------------------------------------
70 120 118 300 298
70a
70b
71 120 116 360 356
72 120 115 360 355
- ----------------------------------------------------------------------------------------------------------------------
73 120 118 360 358
74 120 116 360 356
75 120 118 360 358
76 120 113 360 353
77 120 115 360 355
- ----------------------------------------------------------------------------------------------------------------------
78 120 114 360 354
79 120 117 360 357
80 120 115 360 355
81 120 118 360 358
82 120 118 360 358
- ----------------------------------------------------------------------------------------------------------------------
83 120 117 360 357
84 120 118 300 298
85 120 116 360 356
86 120 115 360 355
87 120 119 360 359
- ----------------------------------------------------------------------------------------------------------------------
88 120 118 360 358
89 120 113 360 353
90 120 116 300 296
91 120 119 360 359
92 120 115 360 355
- ----------------------------------------------------------------------------------------------------------------------
93 120 116 360 356
94 120 117 360 357
95 120 117 360 357
96 120 115 360 355
97 120 114 360 354
- ----------------------------------------------------------------------------------------------------------------------
98 120 114 300 294
99 120 115 360 355
100 120 116 360 356
101 120 115 360 355
102 120 116 360 356
- ----------------------------------------------------------------------------------------------------------------------
103 120 119 360 359
104 120 114 360 354
105 120 117 360 357
106 120 114 300 294
107 120 118 360 358
- ----------------------------------------------------------------------------------------------------------------------
108 120 116 360 356
109 120 118 360 358
110 120 120 360 360
111 120 110 360 350
- ----------------------------------------------------------------------------------------------------------------------
112 132 130 360 358
112a
112b
113 180 178 180 178
114 120 115 360 355
- ----------------------------------------------------------------------------------------------------------------------
115 120 116 360 356
116 120 119 360 359
117 120 116 360 356
118 120 114 342 336
119 120 112 300 292
- ----------------------------------------------------------------------------------------------------------------------
120 120 119 360 359
120a
120b
120c
121 120 118 270 268
- ----------------------------------------------------------------------------------------------------------------------
122 12 10 120 118 360 360
123 120 116 360 356
124 120 117 360 357
125 120 114 360 354
125a
125b
- ----------------------------------------------------------------------------------------------------------------------
126 120 116 360 356
127 132 129 360 357
128 120 116 360 356
129 120 116 360 356
130 120 116 300 296
- ----------------------------------------------------------------------------------------------------------------------
131 120 113 330 323
132 132 127 360 355
133 120 117 360 357
134 120 116 360 356
135 180 174 177 171
- ----------------------------------------------------------------------------------------------------------------------
136 120 116 300 296
137 120 113 287 280
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ANNUAL
CONTROL MATURITY DATE BALLOON OR ARD DEBT
NUMBER ORIGINATION DATE OR ARD BALANCE ($) PREPAYMENT PROVISION SERVICE ($)
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1 10/14/99 11/10/09 42,838,456 Lock/28_Defeasance/89_0%/3 4,380,610.20
- ----------------------------------------------------------------------------------------------------------------------------
2 6/16/99 7/1/09 38,094,187 Lock/35_Defeasance/81_0%/4 4,499,972.52
2a
2b
2c
2d
2e
2f
2g
2h
2i
2j
2k
2l
2m
2n
2o
2p
2q
2r
- ----------------------------------------------------------------------------------------------------------------------------
3 12/30/99 1/1/10 33,870,697 Lock/47_Defeasance/69_0%/4 3,582,112.80
4 10/4/99 11/1/10 25,846,159 Lock/28_Defeasance/97_0%/7 2,575,351.08
5 10/1/99 10/10/09 25,875,192 Lock/29_Defeasance/89_0%/2 2,472,000.60
5a
5b
5c
- ----------------------------------------------------------------------------------------------------------------------------
6 12/21/99 1/1/10 20,834,068 Lock/26_Defeasance/90_0%/4 2,131,989.00
6a
6b
6c
6d
6e
6f
6g
6h
6i
6j
6k
6l
6m
6n
- ----------------------------------------------------------------------------------------------------------------------------
7 9/30/99 10/1/09 16,973,082 Lock/29_Defeasance/87_0%/4 1,674,221.88
8 11/10/99 11/10/09 15,496,337 Lock/28_Defeasance/89_0%/3 1,488,191.04
9 1/31/00 2/10/10 13,281,448 Lock/25_Defeasance/93_0%/2 1,299,460.92
10 12/22/99 1/1/05 14,600,000 Lock/26_Defeasance/30_0%/4 1,236,449.67
- ----------------------------------------------------------------------------------------------------------------------------
11 1/4/00 1/5/10 12,091,514 Lock/26_Defeasance/90_0%/4 1,233,428.76
11a
11b
11c
12 12/7/99 1/1/10 11,889,951 Lock/26_Defeasance/90_0%/4 1,215,876.84
- ----------------------------------------------------------------------------------------------------------------------------
13 9/3/99 9/10/09 11,419,033 Lock/30_Defeasance/90 1,167,295.08
14 12/21/99 1/5/10 11,550,335 Lock/26_Defeasance/91_0%/3 1,173,775.68
15 10/28/99 11/10/09 9,962,075 Lock/28_Defeasance/90_0%/2 1,222,360.32
15a
15b
- ----------------------------------------------------------------------------------------------------------------------------
16 9/13/99 10/1/09 10,415,969 Lock/35_Defeasance/81_0%/4 1,010,698.20
17 11/17/98 12/1/08 10,293,368 Lock/47_Defeasance/70_0%/3 1,015,482.72
18 10/29/99 11/1/09 10,256,307 Lock/28_Defeasance/87_0%/5 1,027,732.68
19 11/18/99 12/10/09 9,982,238 Lock/27_Defeasance/91_0%/2 1,062,826.44
20 8/6/99 9/1/09 9,906,036 Lock/35_Defeasance/81_0%/4 995,386.32
- ----------------------------------------------------------------------------------------------------------------------------
21 11/22/99 12/10/09 9,115,185 Lock/27_Defeasance/92_0%/1 951,443.52
21a
22a
22 8/27/99 9/1/09 8,990,854 Lock/30_Defeasance/85_0%/5 898,990.44
23 8/31/99 9/10/09 8,299,305 Lock/30_Defeasance/88_0%/2 887,972.64
- ----------------------------------------------------------------------------------------------------------------------------
24 11/1/99 11/10/09 7,895,307 Lock/28_Defeasance/90_0%/2 792,051.12
25 1/21/00 2/5/10 7,795,427 Lock/25_Defeasance/93_0%/2 800,110.56
26 10/21/99 11/1/09 7,657,880 Lock/28_Defeasance/88_0%/4 770,598.60
27 9/10/99 10/1/09 7,113,964 Lock/29_Defeasance/87_0%/4 823,394.64
- ----------------------------------------------------------------------------------------------------------------------------
28 11/30/99 12/10/09 7,417,470 Lock/27_Defeasance/91_0%/2 745,871.64
28a
28b
29 8/31/99 9/10/09 7,474,529 Lock/30_Defeasance/88_0%/2 800,018.28
30 4/29/99 5/1/09 7,391,378 Lock/34_Defeasance/82_0%/4 704,734.32
- ----------------------------------------------------------------------------------------------------------------------------
31 11/18/99 12/10/09 7,397,551 Lock/27_Defeasance/91_0%/2 787,630.32
32 8/3/99 9/1/09 7,338,188 Lock/30_Defeasance/86_0%/4 710,616.84
33 12/2/99 12/10/09 7,218,852 Lock/27_Defeasance/92_0%/1 733,581.36
34 6/29/99 7/1/09 7,366,171 Lock/47_Defeasance/69_0%/4 747,150.96
35 8/20/99 9/1/09 6,690,840 Lock/35_Defeasance/81_0%/4 679,880.64
- ----------------------------------------------------------------------------------------------------------------------------
36 9/22/99 10/1/09 6,347,037 Lock/29_Defeasance/87_0%/4 642,594.84
37 2/2/00 3/1/10 6,408,772 Lock/24_Defeasance/92_0%/4 677,697.00
38 9/17/99 10/1/09 6,199,233 Lock/29_Defeasance/87_0%/4 625,222.44
39 1/26/00 2/1/10 6,171,006 Lock/35_Defeasance/81_0%/4 650,578.92
40 9/30/99 10/1/09 5,783,823 Lock/29_Defeasance/87_0%/4 560,419.44
- ----------------------------------------------------------------------------------------------------------------------------
41 8/10/99 9/1/09 5,515,229 Lock/30_Defeasance/86_0%/4 658,575.48
42 8/9/99 8/10/09 5,723,385 Lock/31_Defeasance/87_0%/2 592,156.32
43 12/1/99 12/10/06 6,012,682 Lock/27_Defeasance/55_0%/2 633,717.48
44 11/30/99 12/1/09 5,740,219 Lock/27_Defeasance/89_0%/4 583,214.04
- ----------------------------------------------------------------------------------------------------------------------------
45 11/12/99 12/10/09 5,638,121 Lock/27_Defeasance/91_0%/2 591,554.88
46 8/31/99 9/10/09 5,565,314 Lock/30_Defeasance/88_0%/2 599,755.68
47 8/9/99 9/1/09 5,267,044 Lock/30_Defeasance/86_0%/4 515,562.24
48 9/14/99 10/1/09 4,937,633 Lock/35_Defeasance/81_0%/4 491,203.80
49 9/8/99 9/10/09 4,804,721 Lock/30_Defeasance/88_0%/2 490,789.08
- ----------------------------------------------------------------------------------------------------------------------------
50 12/2/99 1/1/10 4,894,884 Lock/35_Defeasance/81_0%/4 497,431.08
51 12/1/99 12/10/09 4,819,050 Lock/27_Defeasance/89_0%/4 472,334.04
52 10/6/99 10/10/09 4,723,185 Lock/29_Defeasance/90_0%/1 468,888.12
53 4/16/99 5/1/09 4,565,600 Lock/34_Defeasance/86 437,204.04
54 1/31/00 2/1/10 4,009,448 Lock/25_Defeasance/91_0%/4 519,393.00
- ----------------------------------------------------------------------------------------------------------------------------
55 10/15/99 11/1/09 4,501,512 Lock/28_Defeasance/88_0%/4 452,025.96
56 7/8/99 8/1/09 4,519,224 Lock/47_Defeasance/69_0%/4 458,799.12
57 10/4/99 11/1/09 4,435,072 Lock/28_Defeasance/88_0%/4 441,605.76
58 9/14/99 10/1/09 4,419,515 Lock/35_Defeasance/81_0%/4 445,885.20
59 6/10/99 7/1/09 4,339,490 Lock/32_Defeasance/84_0%/4 414,363.96
- ----------------------------------------------------------------------------------------------------------------------------
60 2/26/99 3/1/09 4,394,177 Lock/36_Defeasance/80_0%/4 441,969.60
61 11/12/99 12/1/09 4,289,944 Lock/27_Defeasance/89_0%/4 434,650.20
62 9/28/99 10/1/09 4,078,989 Lock/35_Defeasance/81_0%/4 404,066.40
63 11/30/99 12/1/09 4,075,264 Lock/27_Defeasance/89_0%/4 416,361.96
64 7/6/99 8/1/09 3,995,523 Lock/35_Defeasance/81_0%/4 400,274.88
- ----------------------------------------------------------------------------------------------------------------------------
65 8/9/99 8/10/09 3,941,471 Lock/31_Defeasance/88_0%/1 413,262.00
66 11/12/99 12/1/09 3,934,006 Lock/27_Defeasance/89_0%/4 401,650.68
67 7/26/99 8/1/09 3,844,093 Lock/35_Defeasance/81_0%/4 378,358.32
68 11/23/99 12/10/09 3,484,137 Lock/27_Defeasance/89_0%/4 424,141.80
69 9/13/99 10/1/09 3,783,783 Lock/35_Defeasance/81_0%/4 380,411.40
- ----------------------------------------------------------------------------------------------------------------------------
70 12/21/99 1/1/10 3,548,326 Lock/35_Defeasance/81_0%/4 429,575.04
70a
70b
71 10/27/99 11/1/09 3,742,928 Lock/35_Defeasance/81_0%/4 383,534.88
72 9/1/99 10/1/09 3,708,006 Lock/29_Defeasance/87_0%/4 370,312.20
- ----------------------------------------------------------------------------------------------------------------------------
73 12/13/99 1/1/10 3,583,398 Lock/26_Defeasance/90_0%/4 354,552.12
74 10/18/99 11/1/09 3,588,622 Lock/28_Defeasance/88_0%/4 356,566.68
75 12/21/99 1/1/10 3,596,611 Lock/26_Defeasance/90_0%/4 366,771.72
76 7/14/99 8/1/09 3,597,694 Lock/31_Defeasance/85_0%/4 366,771.72
77 9/17/99 10/1/09 3,373,653 Lock/29_Defeasance/87_0%/4 333,722.16
- ----------------------------------------------------------------------------------------------------------------------------
78 8/17/99 9/1/09 3,346,572 Lock/35_Defeasance/81_0%/4 340,768.44
79 11/29/99 12/1/09 3,227,202 Lock/27_Defeasance/89_0%/4 319,700.88
80 10/4/99 10/10/09 3,124,973 Lock/29_Defeasance/88_0%/3 325,953.72
81 12/2/99 1/1/10 3,166,110 Lock/26_Defeasance/90_0%/4 322,646.04
82 12/14/99 1/1/10 3,140,652 Lock/35_Defeasance/81_0%/4 312,290.04
- ----------------------------------------------------------------------------------------------------------------------------
83 12/2/99 12/10/09 3,087,889 Lock/27_Defeasance/91_0%/2 319,698.96
84 12/22/99 1/1/10 2,830,010 Lock/47_Defeasance/71_0%/2 349,604.04
85 10/13/99 11/1/09 3,061,736 Lock/35_Defeasance/81_0%/4 307,664.88
86 9/17/99 10/1/09 3,043,703 Lock/29_Defeasance/87_0%4 306,972.00
87 2/1/00 2/10/10 3,096,111 Lock/25_Defeasance/93_0%/2 338,023.44
- ----------------------------------------------------------------------------------------------------------------------------
88 12/3/99 1/1/10 3,010,484 Lock/26_Defeasance/90_0%/4 314,933.40
89 7/8/99 8/1/09 2,962,003 Lock/35_Defeasance/81_0%/4 294,444.84
90 10/19/99 11/10/09 2,680,964 Lock/28_Defeasance/90_0%/2 312,601.68
91 2/3/00 2/5/10 2,940,661 Lock/25_Defeasance/93_0%/2 300,152.64
92 9/23/99 10/1/09 2,911,744 Lock/29_Defeasance/87_0%/4 301,818.72
- ----------------------------------------------------------------------------------------------------------------------------
93 10/19/99 11/10/09 2,787,230 Lock/28_Defeasance/90_0%/2 285,551.52
94 11/18/99 12/1/09 2,695,041 Lock/27_Defeasance/89_0%/4 268,686.48
95 11/24/99 12/10/09 2,617,262 Lock/27_Defeasance/89_0%/4 273,795.84
96 9/30/99 10/1/09 2,554,367 Lock/29_Defeasance/87_0%/4 252,857.40
97 8/30/99 9/1/09 2,512,138 Lock/35_Defeasance/81_0%/4 249,596.64
- ----------------------------------------------------------------------------------------------------------------------------
98 8/13/99 9/10/09 2,295,572 Lock/30_Defeasance/86_0%/4 272,903.64
99 9/20/99 10/10/09 2,438,404 Lock/29_Defeasance/89_0%/2 258,113.16
100 10/8/99 11/1/09 2,469,804 Lock/28_Defeasance/88_0%/4 251,151.84
101 9/10/99 10/1/09 2,417,343 Lock/35_Defeasance/81_0%/4 233,385.96
102 10/20/99 11/1/09 2,335,037 Lock/28_Defeasance/88_0%/4 238,275.12
- ----------------------------------------------------------------------------------------------------------------------------
103 1/20/00 2/5/10 2,309,591 Lock/25_Defeasance/93_0%/2 251,818.56
104 8/31/99 9/10/09 2,192,907 Lock/30_Defeasance/87_0%/3 219,914.04
105 11/29/99 12/1/09 2,208,133 Lock/27_Defeasance/89_0%/4 222,320.88
106 8/17/99 9/1/09 2,029,693 Lock/35_Defeasance/81_0%/4 240,112.80
107 12/23/99 1/5/10 2,156,439 Lock/26_Defeasance/92_0%/2 224,049.36
- ----------------------------------------------------------------------------------------------------------------------------
108 10/14/99 11/1/09 2,119,865 Lock/28_Defeasance/88_0%/4 211,674.36
109 12/20/99 1/10/10 2,106,241 Lock/26_Defeasance/90_0%/4 208,693.68
110 2/9/00 3/1/10 2,092,008 Lock/24_Defeasance/92_0%/4 216,735.24
111 4/23/99 5/1/09 2,001,603 Lock/47_Defeasance/69_0%/4 193,617.96
- ----------------------------------------------------------------------------------------------------------------------------
112 12/15/99 1/10/11 1,950,667 Lock/26_Defeasance/104_0%/2 215,490.60
112a
112b
113 12/15/99 1/1/15 - Lock/26_Defeasance/150_0%/4 264,281.52
114 9/13/99 10/10/09 1,876,344 Lock/29_Defeasance/89_0%/2 184,676.28
- ----------------------------------------------------------------------------------------------------------------------------
115 10/15/99 11/1/09 1,868,385 Lock/35_Defeasance/81_0%/4 192,780.48
116 1/28/00 2/5/10 1,865,353 Lock/25_Defeasance/93_0%/2 195,251.28
117 11/1/99 11/10/09 1,784,750 Lock/28_Defeasance/90_0%/2 185,860.92
118 8/13/99 9/1/09 1,727,611 Lock/47_Defeasance/69_0%/4 181,516.20
119 6/16/99 7/1/09 1,569,883 Lock/35_Defeasance/81_0%/4 185,446.32
- ----------------------------------------------------------------------------------------------------------------------------
120 1/19/00 2/1/10 1,702,731 Lock/35_Defeasance/81_0%/4 174,039.24
120a
120b
120c
121 12/20/99 1/1/10 1,452,703 Lock/47_Defeasance/69_0%/4 193,066.20
- ----------------------------------------------------------------------------------------------------------------------------
122 12/28/99 1/10/10 1,625,967 Lock/26_Defeasance/92_0%/2 162,120.96
123 11/3/99 11/10/09 1,495,929 Lock/28_Defeasance/90_0%/2 158,676.12
124 12/2/99 12/10/09 1,440,425 Lock/27_Defeasance/91_0%/2 149,131.80
125 8/31/99 9/10/09 1,424,043 Lock/30_Defeasance/88_0%/2 142,324.20
125a
125b
- ----------------------------------------------------------------------------------------------------------------------------
126 10/18/99 11/10/09 1,337,156 Lock/28_Defeasance/90_0%/2 142,458.48
127 11/29/99 12/10/10 1,303,083 Lock/27_Defeasance/103_0%/2 144,981.24
128 10/25/99 11/10/09 1,283,989 Lock/28_Defeasance/90_0%/2 129,978.00
129 10/7/99 11/1/09 1,298,110 Lock/28_Defeasance/88_0%/4 128,160.60
130 10/19/99 11/10/09 1,155,841 Lock/28_Defeasance/90_0%/2 134,771.52
- ----------------------------------------------------------------------------------------------------------------------------
131 6/25/99 8/1/09 1,255,706 Lock/31_Defeasance/85_0%/4 143,872.20
132 10/8/99 10/10/10 1,095,410 Lock/29_Defeasance/99_0%/4 119,931.72
133 11/15/99 12/10/09 1,023,806 Lock/27_Defeasance/92_0%/1 108,528.96
134 10/29/99 11/10/09 977,619 Lock/28_Defeasance/91_0%/1 102,939.96
135 8/30/99 9/1/14 - Lock/120_3%/12_2%/12_1%/24_0%/12 122,649.12
- ----------------------------------------------------------------------------------------------------------------------------
136 11/4/99 11/10/09 786,846 Lock/28_Defeasance/91_0%/1 95,976.00
137 7/28/99 8/1/09 367,776 Lock/59_>1% or Yield Maintenance/57_0%/4 46,793.88
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CONTROL UNDERWRITTEN NET UNDERWRITTEN NET UNDERWRITTEN NCF CROSS COLLATERALIZED ORIGINAL ORIGINAL
NUMBER OPERATING INCOME ($) CASH FLOW ($) DSCR (x) DSCR (x) APPRAISAL VALUE APPRAISAL DATE
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1 5,734,962 5,656,662 1.29 73,100,000 8/16/99
- ----------------------------------------------------------------------------------------------------------------------
2 8,551,567 8,551,567 1.90 1.90 93,950,000
2a 329,147 329,147 4,050,000 4/1/99
2b 427,069 427,069 4,250,000 4/1/99
2c 317,856 317,856 3,600,000 4/1/99
2d 496,388 496,388 5,050,000 4/1/99
2e 404,571 404,571 4,400,000 4/1/99
2f 332,190 332,190 3,650,000 4/1/99
2g 436,041 436,041 4,100,000 4/1/99
2h 286,046 286,046 2,800,000 4/1/99
2i 371,687 371,687 3,700,000 4/1/99
2j 653,874 653,874 6,150,000 4/1/99
2k 304,815 304,815 4,400,000 4/1/99
2l 380,295 380,295 4,400,000 4/1/99
2m 489,469 489,469 5,300,000 4/1/99
2n 596,340 596,340 5,250,000 4/1/99
2o 431,523 431,523 4,700,000 4/1/99
2p 971,638 971,638 11,100,000 4/1/99
2q 407,910 407,910 4,750,000 4/1/99
2r 914,713 914,713 12,300,000 4/1/99
- ----------------------------------------------------------------------------------------------------------------------
3 5,102,210 4,792,223 1.34 54,500,000 12/7/99
4 4,188,250 3,783,774 1.47 47,500,000 9/1/99
5 3,142,287 2,964,503 1.20 36,310,000
5a 1,097,007 1,042,303 12,980,000 8/9/99
5b 1,091,638 1,037,438 12,430,000 8/9/99
5c 953,642 884,762 10,900,000 8/9/99
- ----------------------------------------------------------------------------------------------------------------------
6 2,919,044 2,666,100 1.25 29,100,000
6a 2,919,044 2,666,100 2,028,140 12/1/99
6b - - 3,129,243 12/1/99
6c - - 3,051,012 12/1/99
6d - - 383,332 12/1/99
6e - - 383,332 12/1/99
6f - - 2,581,625 12/1/99
6g - - 1,642,852 12/1/99
6h - - 1,627,206 12/1/99
6i - - 2,339,109 12/1/99
6j - - 2,077,035 12/1/99
6k - - 2,757,645 12/1/99
6l - - 2,698,972 12/1/99
6m - - 1,173,466 12/1/99
6n - - 3,227,031 12/1/99
- ----------------------------------------------------------------------------------------------------------------------
7 2,077,642 2,014,642 1.20 23,700,000 7/26/99
8 1,877,606 1,794,406 1.21 23,000,000 8/3/99
9 1,680,396 1,609,446 1.24 21,200,000 8/30/99
10 1,916,578 1,763,875 1.43 20,900,000 11/6/99
- ----------------------------------------------------------------------------------------------------------------------
11 1,947,620 1,682,798 1.36 20,900,000
11a 1,164,640 1,015,234 12,500,000 11/9/99
11b 485,636 411,031 5,200,000 11/11/99
11c 297,344 256,533 3,200,000 11/11/99
12 1,525,949 1,418,472 1.17 16,500,000 9/1/99
- ----------------------------------------------------------------------------------------------------------------------
13 1,524,152 1,402,652 1.20 17,000,000 7/2/99
14 1,475,862 1,406,164 1.20 16,000,000 11/1/99
15 1,684,941 1,592,051 1.30 19,969,000
15a 1,147,089 1,082,451 13,569,000 8/1/99
15b 537,852 509,600 6,400,000 8/1/99
- ----------------------------------------------------------------------------------------------------------------------
16 1,457,853 1,388,353 1.37 14,650,000 8/5/99
17 1,421,776 1,229,774 1.21 18,000,000 1/4/00
18 1,311,010 1,278,010 1.24 14,725,000 11/1/99
19 1,496,178 1,320,205 1.65 17,000,000 8/20/99
20 1,352,593 1,280,414 1.29 14,200,000 7/26/99
- ----------------------------------------------------------------------------------------------------------------------
21 1,369,159 1,211,468 1.27 14,100,000
21a 584,892 496,097 6,100,000 7/21/99
22a 784,267 715,371 8,000,000 7/21/99
22 1,345,625 1,234,414 1.37 14,100,000 6/24/99
23 1,175,284 1,123,771 1.27 12,900,000 4/2/99
- ----------------------------------------------------------------------------------------------------------------------
24 1,014,817 991,317 1.25 11,960,000 8/31/99
25 985,480 918,435 1.20 11,000,000 11/3/99
26 896,746 847,678 1.25 10,985,000 12/27/99
27 1,358,417 1,201,272 1.46 13,100,000 6/14/99
- ----------------------------------------------------------------------------------------------------------------------
28 1,041,997 954,022 1.28 10,600,000
28a 684,994 635,269 6,900,000 8/3/99
28b 357,003 318,753 3,700,000 8/9/99
29 1,058,769 1,012,327 1.27 11,600,000 5/17/99
30 1,482,328 1,340,410 1.90 14,700,000 12/27/99
- ----------------------------------------------------------------------------------------------------------------------
31 1,090,466 952,717 1.21 13,000,000 8/20/99
32 883,779 836,529 1.18 10,350,000 6/18/99
33 911,225 887,225 1.21 10,400,000 8/26/99
34 1,199,043 1,048,787 1.40 11,500,000 3/11/99
35 1,077,785 851,591 1.25 9,870,000 3/15/99
- ----------------------------------------------------------------------------------------------------------------------
36 901,072 807,236 1.26 9,200,000 8/25/99
37 985,909 938,581 1.38 10,700,000 11/22/99
38 818,323 782,712 1.25 10,200,000 7/9/99
39 909,343 856,941 1.55 10,400,000 7/9/99
40 1,882,363 1,776,613 3.17 15,000,000 7/28/99
- ----------------------------------------------------------------------------------------------------------------------
41 934,571 934,571 1.42 8,800,000 7/13/99
42 800,563 710,563 1.20 8,100,000 7/9/99
43 884,412 791,423 1.25 8,620,000 6/3/99
44 871,498 762,079 1.31 8,700,000 11/24/99
- ----------------------------------------------------------------------------------------------------------------------
45 831,247 739,029 1.25 8,780,000 8/11/99
46 793,085 757,023 1.26 8,600,000 5/12/99
47 790,498 734,498 1.42 8,750,000 6/21/99
48 802,977 706,297 1.44 8,500,000 7/21/99
49 732,433 629,820 1.28 8,200,000 6/14/99
- ----------------------------------------------------------------------------------------------------------------------
50 684,760 611,508 1.23 6,900,000 5/25/99
51 649,904 590,384 1.25 7,000,000 10/7/99
52 890,170 856,044 1.83 11,300,000 6/17/99
53 643,696 573,426 1.31 7,000,000 3/1/99
54 709,608 649,039 1.25 7,250,000 11/23/99
- ----------------------------------------------------------------------------------------------------------------------
55 600,044 541,294 1.20 6,600,000 8/11/99
56 761,037 643,781 1.40 8,400,000 2/27/99
57 593,420 539,686 1.22 6,200,000 8/18/99
58 636,528 558,886 1.25 6,600,000 7/21/99
59 540,663 512,663 1.24 6,600,000 5/5/99
- ----------------------------------------------------------------------------------------------------------------------
60 599,889 524,907 1.19 6,700,000 1/13/99
61 623,234 543,012 1.25 6,450,000 8/17/99
62 537,752 503,693 1.25 5,750,000 9/20/99
63 587,874 547,477 1.31 5,800,000 10/12/99
64 537,540 530,540 1.55 5,600,000 3/18/99
- ----------------------------------------------------------------------------------------------------------------------
65 555,874 517,941 1.25 6,900,000 12/1/99
66 553,576 500,208 1.25 5,675,000 8/4/99
67 498,620 472,890 1.25 5,500,000 7/1/99
68 761,582 560,334 1.32 7,200,000 4/13/99
69 648,323 549,571 1.44 6,100,000 5/1/99
- ----------------------------------------------------------------------------------------------------------------------
70 623,725 586,553 1.37 6,650,000
70a 623,725 586,553 2,550,000 12/9/99
70b - - 4,100,000 4/22/99
71 580,075 541,325 1.41 5,550,000 8/5/99
72 512,069 464,921 1.26 7,100,000 6/21/99
- ----------------------------------------------------------------------------------------------------------------------
73 888,514 803,414 2.27 8,200,000 11/15/99
74 438,165 431,915 1.21 5,000,000 9/15/99
75 525,903 465,545 1.27 5,160,000 11/5/99
76 438,653 403,566 1.10 5,300,000 5/24/99
77 528,655 479,155 1.44 4,750,000 8/9/99
- ----------------------------------------------------------------------------------------------------------------------
78 527,572 466,421 1.37 6,100,000 8/1/99
79 436,648 422,250 1.32 5,400,000 10/14/99
80 479,427 401,057 1.23 4,700,000 7/15/99
81 420,558 384,589 1.19 5,130,000 9/1/99
82 446,916 415,246 1.33 4,500,000 11/12/99
- ----------------------------------------------------------------------------------------------------------------------
83 394,482 387,217 1.21 1.21 4,350,000 8/19/99
84 586,451 586,451 1.68 7,300,000 1/1/00
85 445,249 401,803 1.31 4,600,000 7/26/99
86 405,929 387,263 1.26 5,200,000 7/8/99
87 518,939 428,514 1.27 5,000,000 10/12/99
- ----------------------------------------------------------------------------------------------------------------------
88 518,865 461,897 1.47 4,500,000 6/2/99
89 615,472 539,591 1.83 7,500,000 4/18/99
90 446,271 404,769 1.29 1.29 4,500,000 7/30/99
91 407,714 382,138 1.27 4,200,000 11/17/99
92 471,400 402,106 1.33 5,575,000 7/27/99
- ----------------------------------------------------------------------------------------------------------------------
93 416,578 373,022 1.31 1.29 4,300,000 7/30/99
94 355,351 335,297 1.25 3,750,000 11/1/99
95 363,004 340,925 1.25 3,900,000 8/9/99
96 523,298 471,061 1.86 4,600,000 8/4/99
97 337,780 310,420 1.24 3,800,000 6/18/99
- ----------------------------------------------------------------------------------------------------------------------
98 330,380 315,870 1.16 3,600,000 5/15/99
99 384,932 339,236 1.31 4,070,000 8/10/99
100 349,515 315,184 1.25 3,630,000 8/25/99
101 401,792 363,792 1.56 3,400,000 6/25/99
102 334,184 304,798 1.28 3,225,000 9/13/99
- ----------------------------------------------------------------------------------------------------------------------
103 380,010 334,138 1.33 4,000,000 11/12/99
104 307,793 276,293 1.26 3,125,000 8/2/99
105 338,345 304,235 1.37 3,430,000 12/1/99
106 323,782 302,967 1.26 3,400,000 5/6/99
107 286,265 268,063 1.20 3,100,000 5/16/99
- ----------------------------------------------------------------------------------------------------------------------
108 286,265 263,643 1.25 3,025,000 8/29/99
109 287,527 266,077 1.27 3,000,000 12/22/99
110 407,190 370,225 1.71 4,000,000 12/9/99
111 311,912 277,450 1.43 3,500,000 1/17/00
- ----------------------------------------------------------------------------------------------------------------------
112 281,321 267,048 1.24 3,340,000
112a 175,582 166,552 2,000,000 9/14/99
112b 105,739 100,496 1,340,000 11/1/99
113 383,600 339,150 1.28 3,800,000 9/9/99
114 277,216 250,237 1.36 2,720,000 8/5/99
- ----------------------------------------------------------------------------------------------------------------------
115 274,955 242,523 1.26 2,750,000 5/1/99
116 275,012 245,428 1.26 2,850,000 8/19/99
117 268,487 246,929 1.33 2,650,000 7/15/99
118 224,460 211,393 1.16 2,600,000 5/17/99
119 352,684 352,684 1.90 1.90 4,450,000 4/1/99
- ----------------------------------------------------------------------------------------------------------------------
120 249,463 225,649 1.30 2,615,000
120a 56,141 47,893 700,000 10/28/99
120b 193,322 177,756 990,000 10/28/99
120c - - 925,000 10/28/99
121 325,046 287,963 1.49 3,350,000 9/30/99
- ----------------------------------------------------------------------------------------------------------------------
122 203,900 172,700 1.07 2,400,000 11/18/99
123 183,677 180,527 1.14 2,050,000 8/23/99
124 185,679 180,719 1.21 1.21 2,200,000 8/15/99
125 179,758 172,258 1.21 2,235,000
125a 102,975 98,975 1,260,000 7/1/99
125b 76,783 73,283 975,000 7/1/99
- ----------------------------------------------------------------------------------------------------------------------
126 223,269 194,537 1.37 2,350,000 7/16/99
127 187,389 178,036 1.23 2,050,000 11/1/99
128 179,301 161,301 1.24 2,000,000 8/9/99
129 193,312 174,496 1.36 2,025,000 7/14/99
130 209,634 167,910 1.25 1.29 2,100,000 7/29/99
- ----------------------------------------------------------------------------------------------------------------------
131 367,222 367,222 2.55 2,450,000 2/9/99
132 156,935 149,368 1.25 1,800,000 9/1/99
133 175,148 142,003 1.31 1,690,000 5/10/99
134 158,945 127,537 1.24 1,680,000 8/9/99
135 143,548 143,548 1.17 1,875,000 5/25/99
- ----------------------------------------------------------------------------------------------------------------------
136 148,603 137,772 1.44 1,440,000 8/24/99
137 70,124 61,597 1.32 700,000 5/6/99
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SCHEDULED
CONTROL CUT-OFF DATE MATURITY OR ARD CROSS COLLATERALIZED UNITS, BEDS
NUMBER LTV (%) DATE LTV (%) LTV RATIO (%) YEAR BUILT YEAR RENOVATED ROOMS, SQFT
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1 66.27 58.60 1915 1999 261
- ----------------------------------------------------------------------------------------------------------------------
2 49.20 40.55 48.91 2,327
2a 1993-1994 1998-1999 126
2b 1994 1998-1999 126
2c 1996 NAP 128
2d 1991 1998 126
2e 1991 1998-1999 134
2f 1987 1997 120
2g 1985 1997-1998 126
2h 1987 1998-1999 130
2i 1991 1998 108
2j 1996 NAP 124
2k 1990 1998-1999 111
2l 1996 NAP 123
2m 1985 1992, 1999 128
2n 1987 1995-1996 120
2o 1988 1998-1999 96
2p 1990 1998 168
2q 1989 1997-1998 125
2r 1988-1990 1998 208
- ----------------------------------------------------------------------------------------------------------------------
3 67.82 62.15 1985 NAP 377,684
4 61.95 54.41 1986 NAP 270,485
5 78.49 71.26 814
5a 1983 1997-1999 263
5b 1974 1997-1999 271
5c 1972 1997-1999 280
- ----------------------------------------------------------------------------------------------------------------------
6 78.94 71.59 743,950
6a 1979 1998 51,850
6b 1979 1999 80,000
6c 1981 1997-1998 78,000
6d 1981 1994-1995 9,800
6e 1981 1994-1995 9,800
6f 1979 1998 66,000
6g 1979 NAP 42,000
6h 1980 1998 41,600
6i 1981 1994 59,800
6j 1973 1995 53,100
6k 1974 1997-1998 70,500
6l 1974 NAP 69,000
6m 1975 NAP 30,000
6n 1980 1995 82,500
- ----------------------------------------------------------------------------------------------------------------------
7 79.77 71.62 1988 NAP 280
8 74.13 67.38 1990 NAP 320
9 70.15 62.65 1998-1999 NAP 258
10 69.86 69.86 1997 NAP 184,474
- ----------------------------------------------------------------------------------------------------------------------
11 62.79 57.85 1,001,480
11a 1968 NAP 539,017
11b 1979, 1987 NAP 284,696
11c 1972, 1986 NAP 177,767
12 79.47 72.06 1973, 1980 1994-1997 189,845
- ----------------------------------------------------------------------------------------------------------------------
13 75.87 67.17 1972 1997-1999 486
14 79.78 72.19 1998-1999 NAP 140,720
15 59.87 49.89 174,337
15a 1988 1996-1997 120,237
15b 1960-1962 1992-1995 54,100
- ----------------------------------------------------------------------------------------------------------------------
16 79.62 71.10 1972 1997-1999 278
17 63.31 57.19 1961 1998 128,588
18 77.24 69.65 1999 NAP 132
19 49.59 58.72 1972 1997 94,890
20 77.20 69.76 1912 1997 152,483
- ----------------------------------------------------------------------------------------------------------------------
21 72.77 64.65 143,895
21a 1971 1997 58,317
22a 1990-1991 NAP 85,578
22 70.68 63.76 1985 1998-1999 137,918
23 71.84 64.34 1997 NAP 101,262
- ----------------------------------------------------------------------------------------------------------------------
24 75.03 66.01 1999 NAP 94
25 74.75 70.87 1965 1999 265
26 68.19 69.71 1998-1999 NAP 52,056
27 64.60 54.31 1947, 1981 1990's 333,482
- ----------------------------------------------------------------------------------------------------------------------
28 79.55 69.98 345
28a 1972, 1977-1978 NAP 195
28b 1982 NAP 150
29 71.94 64.44 1999 NAP 93,968
30 56.44 50.28 1927 1987 118,730
- ----------------------------------------------------------------------------------------------------------------------
31 63.73 56.90 1967 NAP 74,982
32 79.40 70.90 1997-1998 NAP 189
33 78.69 69.41 1999 NAP 96
34 70.58 64.05 1970, 1988 1996-1997 114,417
35 74.76 67.79 1900-1981 1997-1998 320,745
- ----------------------------------------------------------------------------------------------------------------------
36 76.20 68.99 1986-1989 NAP 182,760
37 65.42 59.90 VARIOUS VARIOUS 24,783
38 67.21 60.78 1998 NAP 44,963
39 55.24 59.34 1998 NAP 63,149
40 43.20 38.56 1963-1965, 1989 Ongoing 423
- ----------------------------------------------------------------------------------------------------------------------
41 73.41 62.67 1970-1972, 1984 1998-1999 255
42 79.52 70.66 1963, 1973 NAP 300
43 74.12 69.75 1982 NAP 78,733
44 72.87 65.98 1992 NAP 70,773
- ----------------------------------------------------------------------------------------------------------------------
45 72.19 64.22 1988 NAP 128,505
46 72.13 64.71 1998 NAP 80,000
47 67.18 60.19 1989-1990 NAP 224
48 64.52 58.09 1994 NAP 53,809
49 66.19 58.59 1979-1982 NAP 148,360
- ----------------------------------------------------------------------------------------------------------------------
50 78.40 70.94 1989-1991 NAP 49,831
51 76.93 68.84 1963, 1988 NAP 192
52 47.62 41.80 1988 1997-1999 113
53 73.10 65.22 1988-1989 1997-1998 48,306
54 69.56 55.30 1977, 1979, 1985 NAP 69,501
- ----------------------------------------------------------------------------------------------------------------------
55 75.58 68.20 1980 NAP 235
56 59.31 53.80 1980-1981 1998 87,996
57 79.49 71.53 1998 NAP 74,380
58 74.04 66.96 1982 NAP 43,973
59 73.86 65.75 1994 NAP 112
- ----------------------------------------------------------------------------------------------------------------------
60 72.29 65.58 1937,1953,1958,1966 1994, 1995, 1998 83,846
61 73.52 66.51 1985 NAP 56,141
62 78.90 70.94 1999 NAP 37,351
63 77.46 70.26 1985-1986 NAP 69,381
64 67.55 71.35 1900 1998 13
- ----------------------------------------------------------------------------------------------------------------------
65 64.07 57.12 1997 NAP 43,947
66 76.44 69.32 1998-1999 NAP 36,279
67 77.81 69.89 1998-1999 NAP 46,991
68 58.31 48.39 1918 NAP 367,800
69 68.66 62.03 1987 NAP 73,149
- ----------------------------------------------------------------------------------------------------------------------
70 62.30 53.36 59,980
70a 1920's NAP 37,000
70b 1936 1998 22,980
71 74.25 67.44 1983 Ongoing 155
72 57.94 52.23 1969 1991 121,531
- ----------------------------------------------------------------------------------------------------------------------
73 48.72 43.70 1959, 1972 1996 229,662
74 79.81 71.77 1999 NAP 25
75 76.94 69.70 1975 NAP 87,548
76 74.73 67.88 1998 NAP 22,502
77 79.03 71.02 1978 1995 198
- ----------------------------------------------------------------------------------------------------------------------
78 60.46 54.86 1976 1999 47,798
79 66.55 59.76 1998 NAP 24
80 74.77 66.49 1987 NAP 36,017
81 68.14 61.72 1887 1999 23
82 77.68 69.79 1996 NAP 56,160
- ----------------------------------------------------------------------------------------------------------------------
83 80.07 70.99 77.99 1978 1999 159
84 46.49 38.77 1929, 1939 1996-1998 11
85 73.74 66.56 1988 NAP 41,775
86 64.73 58.53 1994 NAP 42,500
87 66.95 61.92 1964 1985 113,271
- ----------------------------------------------------------------------------------------------------------------------
88 73.25 66.90 1984 NAP 101,329
89 43.83 39.49 1972 NAP 76,136
90 72.93 59.58 71.99 1955, 1974, 1989 NAP 42,957
91 77.32 70.02 1972, 1977 NAP 92
92 57.26 52.23 1967, 1984 NAP 90,316
- ----------------------------------------------------------------------------------------------------------------------
93 73.26 64.82 71.99 1987 NAP 35,623
94 79.86 71.87 1999 NAP 68,049
95 75.50 67.11 1990, 1996 NAP 54,627
96 61.78 55.53 1991 NAP 75,940
97 73.42 66.11 1967,74,77,80,88 NAP 120
- ----------------------------------------------------------------------------------------------------------------------
98 77.31 63.77 1908 1980 15,336
99 67.12 59.91 1925, 1985 1995-1997 36,128
100 75.09 68.04 1987 NAP 33,658
101 79.75 71.10 1973-1975 1996 152
102 79.82 72.40 1989 NAP 33,558
- ----------------------------------------------------------------------------------------------------------------------
103 62.45 57.74 1907 1996 13,500
104 79.66 70.17 1970 1998 126
105 71.31 64.38 1989 NAP 42,000
106 70.23 59.70 1969 1998 18,898
107 76.33 69.56 1990 NAP 53,750
- ----------------------------------------------------------------------------------------------------------------------
108 77.80 70.08 1997 NAP 23,212
109 78.23 70.21 1974 NAP 66
110 57.50 52.30 1963 NAP 84,793
111 63.89 57.19 1986 1998 30,620
- ----------------------------------------------------------------------------------------------------------------------
112 66.38 58.40 15,266
112a 1999 NAP 9,668
112b 1999 NAP 5,598
113 57.54 0.00 1904 UAV 35,000
114 78.76 68.98 1964 1998 94
- ----------------------------------------------------------------------------------------------------------------------
115 74.64 67.94 1920 1996 18,037
116 71.70 65.45 1995 NAP 68,248
117 75.80 67.35 1920 1991 16,624
118 74.53 66.45 1970 1998 15,232
119 42.81 35.28 48.91 1992 1998-1999 126
- ----------------------------------------------------------------------------------------------------------------------
120 71.87 65.11 21,627
120a 1996 NAP 6,000
120b 1994 NAP 8,079
120c 1996 NAP 7,548
121 53.61 43.36 1964 1988-1999 92
- ----------------------------------------------------------------------------------------------------------------------
122 65.63 67.75 1971 1999 104
123 81.75 72.97 1997 NAP 21,000
124 73.86 65.47 77.99 1975, 1985 1980 124
125 72.40 63.72 30
125a 1996 NAP 16
125b 1997 NAP 14
- ----------------------------------------------------------------------------------------------------------------------
126 63.67 56.90 1984 NAP 29,844
127 72.07 63.57 1999 NAP 9,448
128 72.79 64.20 1978 NAP 72
129 71.43 64.10 1976 UAV 64
130 67.38 55.04 71.99 1991 NAP 43,006
- ----------------------------------------------------------------------------------------------------------------------
131 56.93 51.25 1997 NAP 49
132 69.25 60.86 1968 1999 7,200
133 67.92 60.58 1985 NAP 23,909
134 65.31 58.19 1975 1998 17,047
135 52.47 0.00 1967 NAP 494
- ----------------------------------------------------------------------------------------------------------------------
136 65.72 54.64 1987 NAP 13,700
137 62.08 52.54 1968 1998 6,581
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CUT-OFF DATE
BALANCE PER
CONTROL SQ. FT., UNIT, BED,
NUMBER UNIT DESCRIPTION PAD OR ROOM ($) OCCUPANCY (%) OCCUPANCY DATE OWNERSHIP INTEREST LOCKBOX
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1 Units 185,607.87 100 10/2/99 Fee Simple Soft
- ----------------------------------------------------------------------------------------------------------------------
2 Rooms 19,864.47 Fee Simple and Leasehold Hard
2a Rooms 70 11/30/99 Fee Simple
2b Rooms 71 11/30/99 Fee Simple
2c Rooms 62 11/30/99 Fee Simple
2d Rooms 71 11/30/99 Fee Simple
2e Rooms 67 11/30/99 Fee Simple
2f Rooms 63 11/30/99 Fee Simple
2g Rooms 75 11/30/99 Fee Simple
2h Rooms 62 11/30/99 Fee Simple
2i Rooms 73 11/30/99 Fee Simple
2j Rooms 72 11/30/99 Leasehold
2k Rooms 70 11/30/99 Fee Simple
2l Rooms 74 11/30/99 Fee Simple
2m Rooms 87 11/30/99 Fee Simple
2n Rooms 81 11/30/99 Fee Simple
2o Rooms 83 11/30/99 Leasehold
2p Rooms 79 11/30/99 Fee Simple
2q Rooms 77 11/30/99 Fee Simple
2r Rooms 72 11/30/99 Fee Simple
- ----------------------------------------------------------------------------------------------------------------------
3 Sq Ft 97.86 88 12/12/99 Fee Simple and Leasehold Hard
4 Sq Ft 108.79 100 12/31/99 Fee Simple Hard
5 Units 35,012.29 Fee Simple
5a Units 93 7/31/99 Fee Simple
5b Units 94 7/31/99 Fee Simple
5c Units 96 7/31/99 Fee Simple
- ----------------------------------------------------------------------------------------------------------------------
6 Sq Ft 30.88 Fee Simple Hard
6a Sq Ft 100 12/14/99 Fee Simple
6b Sq Ft 100 12/14/99 Fee Simple
6c Sq Ft 100 12/14/99 Fee Simple
6d Sq Ft 100 12/14/99 Fee Simple
6e Sq Ft 100 12/14/99 Fee Simple
6f Sq Ft 87 12/14/99 Fee Simple
6g Sq Ft 100 12/14/99 Fee Simple
6h Sq Ft 58 12/14/99 Fee Simple
6i Sq Ft 100 12/14/99 Fee Simple
6j Sq Ft 77 12/14/99 Fee Simple
6k Sq Ft 79 12/14/99 Fee Simple
6l Sq Ft 99 12/14/99 Fee Simple
6m Sq Ft 100 12/14/99 Fee Simple
6n Sq Ft 100 12/14/99 Fee Simple
- ----------------------------------------------------------------------------------------------------------------------
7 Units 67,516.36 95 9/22/99 Fee Simple
8 Units 53,281.25 90 7/28/99 Fee Simple
9 Units 57,641.70 90 1/27/00 Fee Simple
10 Sq Ft 79.14 97 12/20/99 Fee Simple
- ----------------------------------------------------------------------------------------------------------------------
11 Sq Ft 13.10 Fee Simple Hard
11a Sq Ft 100 11/15/99 Fee Simple
11b Sq Ft 100 11/15/99 Fee Simple
11c Sq Ft 100 11/15/99 Fee Simple
12 Sq Ft 69.07 100 11/1/99 Fee Simple
- ----------------------------------------------------------------------------------------------------------------------
13 Units 26,538.63 94 12/7/99 Fee Simple
14 Sq Ft 90.71 97 12/3/99 Fee Simple
15 Sq Ft 68.58 Fee Simple and Leasehold Springing
15a Sq Ft 84 12/1/99 Leasehold
15b Sq Ft 98 12/1/99 Fee Simple
- ----------------------------------------------------------------------------------------------------------------------
16 Units 41,956.03 95 11/30/99 Fee Simple
17 Sq Ft 88.62 99 1/12/00 Fee Simple
18 Units 86,161.27 96 8/1/99 Fee Simple
19 Sq Ft 117.82 97 1/1/00 Fee Simple
20 Sq Ft 71.89 99 7/8/99 Fee Simple
- ----------------------------------------------------------------------------------------------------------------------
21 Sq Ft 71.31 Fee Simple Hard
21a Sq Ft 98 12/31/99 Fee Simple
22a Sq Ft 100 11/15/99 Fee Simple
22 Sq Ft 72.26 92 10/18/99 Fee Simple
23 Sq Ft 91.51 100 8/31/99 Fee Simple Hard
- ----------------------------------------------------------------------------------------------------------------------
24 Units 95,469.34 98 1/10/00 Fee Simple
25 Units 32,425.79 92 12/7/99 Fee Simple
26 Sq Ft 162.91 88 11/30/99 Fee Simple
27 Sq Ft 25.38 95 8/1/99 Fee Simple
- ----------------------------------------------------------------------------------------------------------------------
28 Units 24,441.73 Fee Simple Springing
28a Units 96 9/1/99 Fee Simple
28b Units 81 9/1/99 Fee Simple
29 Sq Ft 88.81 100 8/31/99 Fee Simple Hard
30 Sq Ft 69.87 100 12/1/99 Fee Simple
- ----------------------------------------------------------------------------------------------------------------------
31 Sq Ft 110.49 98 9/30/99 Fee Simple
32 Units 43,482.93 95 12/20/99 Fee Simple
33 Units 85,243.52 100 12/22/99 Fee Simple
34 Sq Ft 70.94 94 2/1/00 Fee Simple Springing
35 Sq Ft 23.00 91 12/1/99 Fee Simple Hard
- ----------------------------------------------------------------------------------------------------------------------
36 Sq Ft 38.36 90 9/9/99 Fee Simple
37 Sq Ft 282.45 100 1/18/00 Fee Simple Hard
38 Sq Ft 152.47 100 12/15/99 Fee Simple Hard
39 Sq Ft 106.80 87 1/24/00 Fee Simple
40 Units 15,318.62 90 9/13/99 Fee Simple
- ----------------------------------------------------------------------------------------------------------------------
41 Rooms 25,335.22 71 7/13/99 Fee Simple
42 Units 21,471.24 94 1/6/00 Fee Simple
43 Sq Ft 81.15 100 10/14/99 Fee Simple Hard
44 Sq Ft 89.58 96 11/30/99 Leasehold
- ----------------------------------------------------------------------------------------------------------------------
45 Sq Ft 49.32 98 11/4/99 Fee Simple
46 Sq Ft 77.54 100 8/31/99 Fee Simple Hard
47 Units 26,241.57 92 7/26/99 Fee Simple
48 Sq Ft 101.92 98 10/15/99 Fee Simple
49 Sq Ft 36.59 93 1/1/00 Fee Simple
- ----------------------------------------------------------------------------------------------------------------------
50 Sq Ft 108.55 92 12/2/99 Fee Simple
51 Units 28,047.65 94 10/1/99 Fee Simple
52 Units 47,618.39 96 12/31/99 Fee Simple
53 Sq Ft 105.93 100 12/31/99 Fee Simple Hard
54 Sq Ft 72.56 98 1/17/00 Fee Simple Hard
- ----------------------------------------------------------------------------------------------------------------------
55 Units 21,227.09 98 10/5/99 Fee Simple Soft
56 Sq Ft 56.61 96 1/1/00 Fee Simple
57 Sq Ft 66.26 96 8/16/99 Fee Simple
58 Sq Ft 111.13 100 8/5/99 Fee Simple
59 Units 43,526.64 100 12/8/99 Fee Simple
- ----------------------------------------------------------------------------------------------------------------------
60 Sq Ft 57.77 96 10/18/99 Fee Simple
61 Sq Ft 84.47 98 1/1/00 Fee Simple
62 Sq Ft 121.47 100 1/18/00 Fee Simple
63 Sq Ft 64.76 92 11/2/99 Fee Simple
64 Units 340,223.81 100 5/12/99 Leasehold
- ----------------------------------------------------------------------------------------------------------------------
65 Sq Ft 100.60 100 12/11/99 Fee Simple
66 Sq Ft 119.58 100 10/1/99 Fee Simple
67 Sq Ft 91.07 100 6/30/99 Fee Simple
68 Sq Ft 11.41 100 11/1/99 Fee Simple
69 Sq Ft 57.26 98 7/22/99 Leasehold
- ----------------------------------------------------------------------------------------------------------------------
70 Sq Ft 69.07 Fee Simple
70a Sq Ft 100 12/7/99 Fee Simple
70b Sq Ft 100 12/7/99 Fee Simple
71 Units 26,587.31 94 9/30/99 Fee Simple
72 Sq Ft 33.85 99 10/1/99 Fee Simple Springing
- ----------------------------------------------------------------------------------------------------------------------
73 Sq Ft 17.39 100 10/22/99 Fee Simple
74 Units 159,614.37 100 9/28/99 Fee Simple
75 Sq Ft 45.35 98 12/14/99 Fee Simple Hard
76 Sq Ft 176.01 100 11/19/99 Fee Simple
77 Units 18,960.13 93 8/31/99 Fee Simple
- ----------------------------------------------------------------------------------------------------------------------
78 Sq Ft 77.16 88 8/11/99 Fee Simple
79 Units 149,735.94 100 11/2/99 Fee Simple
80 Sq Ft 97.57 100 6/22/99 Fee Simple
81 Units 151,988.77 100 11/19/99 Fee Simple
82 Sq Ft 62.24 100 12/3/99 Fee Simple
- ----------------------------------------------------------------------------------------------------------------------
83 Pads 21,907.31 97 1/13/00 Fee Simple
84 Rooms 308,493.02 68 1/1/00 Fee Simple Springing
85 Sq Ft 81.20 100 9/29/99 Fee Simple Springing
86 Sq Ft 79.20 100 12/15/99 Fee Simple Hard
87 Sq Ft 29.55 88 1/27/00 Fee Simple and Leasehold Hard
- ----------------------------------------------------------------------------------------------------------------------
88 Sq Ft 32.53 78 11/15/99 Fee Simple
89 Sq Ft 43.17 75 12/31/99 Fee Simple
90 Sq Ft 76.40 100 8/20/99 Fee Simple
91 Units 35,296.38 96 12/7/99 Fee Simple
92 Sq Ft 35.35 95 8/9/99 Fee Simple
- ----------------------------------------------------------------------------------------------------------------------
93 Sq Ft 88.44 79 9/27/99 Fee Simple
94 Sq Ft 44.01 100 9/1/99 Fee Simple
95 Sq Ft 53.90 100 10/1/99 Fee Simple
96 Sq Ft 37.42 98 8/12/99 Fee Simple
97 Units 23,251.06 97 8/1/99 Fee Simple
- ----------------------------------------------------------------------------------------------------------------------
98 Sq Ft 181.49 100 8/10/99 Fee Simple Hard
99 Sq Ft 75.62 98 11/29/99 Fee Simple
100 Sq Ft 80.99 100 9/1/99 Fee Simple
101 Units 17,838.37 97 9/30/99 Fee Simple
102 Sq Ft 76.71 100 10/12/99 Fee Simple
- ----------------------------------------------------------------------------------------------------------------------
103 Sq Ft 185.04 100 1/4/00 Fee Simple Hard
104 Units 19,757.20 89 7/7/99 Fee Simple
105 Sq Ft 58.24 98 11/17/99 Fee Simple
106 Sq Ft 126.36 100 8/13/99 Fee Simple
107 Sq Ft 44.02 98 12/1/99 Fee Simple
- ----------------------------------------------------------------------------------------------------------------------
108 Sq Ft 101.39 91 9/30/99 Fee Simple
109 Units 35,559.04 97 11/1/99 Fee Simple
110 Sq Ft 27.12 98 1/28/00 Fee Simple
111 Sq Ft 73.03 100 12/1/99 Fee Simple Springing
- ----------------------------------------------------------------------------------------------------------------------
112 Sq Ft 145.23 Fee Simple Springing
112a Sq Ft 100 11/1/99 Fee Simple
112b Sq Ft 100 11/1/99 Fee Simple
113 Sq Ft 62.48 100 12/1/99 Fee Simple
114 Units 22,789.63 95 7/31/99 Fee Simple
- ----------------------------------------------------------------------------------------------------------------------
115 Sq Ft 113.80 100 10/11/99 Fee Simple
116 Sq Ft 29.94 100 1/20/00 Fee Simple Hard
117 Sq Ft 120.83 100 10/1/99 Fee Simple
118 Sq Ft 127.21 100 1/21/00 Fee Simple
119 Rooms 15,118.59 65 11/30/99 Fee Simple Hard
- ----------------------------------------------------------------------------------------------------------------------
120 Sq Ft 86.90 Fee Simple Springing
120a Sq Ft 100 1/14/00 Fee Simple
120b Sq Ft 100 1/14/00 Fee Simple
120c Sq Ft 100 1/14/00 Fee Simple
121 Rooms 19,522.84 65 10/31/99 Fee Simple Hard
- ----------------------------------------------------------------------------------------------------------------------
122 Units 17,067.31 88 12/13/99 Fee Simple
123 Sq Ft 79.80 100 10/1/99 Fee Simple
124 Pads 13,103.69 93 1/13/00 Fee Simple
125 Units 53,935.16 Fee Simple
125a Units 100 7/12/99 Fee Simple
125b Units 100 7/12/99 Fee Simple
- ----------------------------------------------------------------------------------------------------------------------
126 Sq Ft 50.14 93 12/28/99 Fee Simple
127 Sq Ft 156.38 100 11/1/99 Fee Simple Springing
128 Units 20,220.75 99 8/9/99 Fee Simple
129 Units 22,600.49 95 10/7/99 Fee Simple
130 Sq Ft 32.90 100 8/20/99 Fee Simple
- ----------------------------------------------------------------------------------------------------------------------
131 Rooms 28,465.73 75 12/31/99 Fee Simple Hard
132 Sq Ft 173.11 100 1/6/00 Fee Simple
133 Sq Ft 48.01 93 1/13/00 Fee Simple Hard
134 Sq Ft 64.36 96 12/1/99 Leasehold
135 Spaces 1,991.65 100 12/16/99 Fee Simple
- ----------------------------------------------------------------------------------------------------------------------
136 Sq Ft 69.08 87 11/15/99 Fee Simple
137 Sq Ft 66.03 100 12/31/99 Fee Simple
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ANNUAL
CONTROL REQUIRED ANNUAL LARGEST TENANT LARGEST TENANT
NUMBER RESERVES ($) REQUIRED TI/LC ($) LARGEST TENANT SQ FT LEASE EXPIRATION
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1 52,200 0 Bagel Sublease 2,200 3/31/11
- ----------------------------------------------------------------------------------------------------------------------------
2 2,121,487 0
2a
2b
2c
2d
2e
2f
2g
2h
2i
2j
2k
2l
2m
2n
2o
2p
2q
2r
- ----------------------------------------------------------------------------------------------------------------------------
3 75,537 225,000 First Union 103,259 9/30/14
4 40,573 25,000 World Savings & Loan 147,517 12/31/07
5 177,792 0
5a
5b
5c
- ----------------------------------------------------------------------------------------------------------------------------
6 74,395 30,000
6a Togerson Printing 12,000 11/30/04
6b Rasmussen Millwork Inc. 48,000 7/31/03
6c Phoenix Recycling Corp. 42,217 10/31/03
6d NE Contemporary Services 9,800 5/31/00
6e Lakeside Motor Express 9,800 12/31/03
6f Merchants Home Delivery 18,000 5/30/01
6g Mid State Fabricating, Inc. 12,000 3/31/02
6h Color Technologies, Inc. 14,400 2/28/03
6i Riverview Packaging, Inc. 25,600 7/31/03
6j Advance Circuits, Inc. 30,300 1/31/06
6k L. Stcynske 10,586 4/30/05
6l Minnesota Specialty Corp. 30,832 9/30/00
6m Acumeter Laboratories 30,000 3/31/04
6n Distribution Systems & Service 82,500 3/31/03
- ----------------------------------------------------------------------------------------------------------------------------
7 33,040 0
8 83,200 0
9 70,950 0
10 18,461 0 Petsmart, Inc. 41,920 2/28/13
- ----------------------------------------------------------------------------------------------------------------------------
11 0 0
11a Atrium Companies, Inc. 539,017 7/31/20
11b Atrium Companies, Inc. 284,696 7/31/20
11c Atrium Companies, Inc. 177,767 7/31/20
12 28,477 66,446 Ford Motor Company 56,250 4/30/05
- ----------------------------------------------------------------------------------------------------------------------------
13 121,500 0
14 18,268 0 Cub Foods (Super Valu) 64,955 10/15/18
15 26,676 0
15a Immigration & Naturalization 16,140 7/17/07
15b Blockbuster 4,800 4/30/03
- ----------------------------------------------------------------------------------------------------------------------------
16 62,550 0
17 19,200 114,000 P. Barretta and Skyline 11,240 9/30/08
18 46,200 0
19 18,984 156,144 Newport Pain Management 4,807 3/31/03
20 24,397 34,080 Admiral Photo 49,100 12/31/10
- ----------------------------------------------------------------------------------------------------------------------------
21 25,860 130,512
21a Prudential Fox & Roach 12,569 8/26/01
22a Elkay Plastics 18,212 8/31/02
22 27,560 149,280 Motorola - Office 116,331 12/31/08
23 10,126 48,813 Galyan's Trading Company 101,262 8/31/19
- ----------------------------------------------------------------------------------------------------------------------------
24 23,520 0
25 67,044 0
26 5,206 0 Hi Health 5,487 6/30/05
27 53,357 36,000 County of Somerset 28,758 1/31/03
- ----------------------------------------------------------------------------------------------------------------------------
28 87,975 0
28a
28b
29 9,397 39,991 Galyan's Trading Company 93,968 8/31/19
30 23,996 64,800 New York Restaurant School 33,000 12/31/13
- ----------------------------------------------------------------------------------------------------------------------------
31 14,827 121,068 Newport Center Medical 6,920 7/12/03
32 42,525 0
33 24,000 0
34 17,074 120,000 Lockheed Martin 32,526 5/31/02
35 35,743 240,000 Alpha Holdings, Inc. 113,012 3/31/02
- ----------------------------------------------------------------------------------------------------------------------------
36 23,747 0 Plastomer 56,416 12/31/03
37 12,391 60,000 21 Federal Street 4,800 12/31/00
38 0 0 Sports Authority, Inc. 44,963 1/1/20
39 9,460 15,600 Gart Sports 25,200 1/31/13
40 0 0
- ----------------------------------------------------------------------------------------------------------------------------
41 199,108 0
42 90,000 0
43 11,808 280,008 SunTrust Bank 67,456 11/30/02
44 10,616 0 Response Insurance 18,025 3/31/05
- ----------------------------------------------------------------------------------------------------------------------------
45 28,271 63,947 Global Micro 5,700 8/31/02
46 8,000 19,448 Galyan's Trading Company 80,000 8/31/19
47 44,800 0
48 8,369 39,000 Total Renal Care 8,421 4/1/06
49 25,224 0 GTE Cellular One 13,903 6/14/01
- ----------------------------------------------------------------------------------------------------------------------------
50 15,946 0 Tampa Diagnostic Clinic 3,500 8/1/01
51 59,520 0
52 0 0
53 9,180 48,000 Storis, Inc 23,675 11/30/05
54 13,419 0 Shells Seafood Restaurant 8,480 6/30/12
- ----------------------------------------------------------------------------------------------------------------------------
55 58,752 0
56 18,784 0 SMBIA 5,255 10/31/01
57 7,438 0 Ceavco Audio-Visual Company 10,300 1/31/02
58 6,596 18,000 Aurora Denver Cardiology Assoc 8,223 6/14/00
59 27,996 0
- ----------------------------------------------------------------------------------------------------------------------------
60 16,925 53,400 Medex Clinical Trial Services 31,999 2/23/06
61 16,281 0 State of Florida/DDT 5,522 2/28/01
62 1,866 20,000 University Radiology 13,375 6/13/09
63 10,407 27,500 Albertson's d/b/a Lucky Stores 42,728 4/30/06
64 3,600 0
- ----------------------------------------------------------------------------------------------------------------------------
65 0 33,540 Local Color Brewing 16,480 11/30/07
66 3,628 20,000 The Restaurants of Southlake 8,777 5/31/03
67 4,694 0 Safety-Kleen Systems, Inc. 27,991 7/8/06
68 81,356 119,317 Baby Fair, Inc. 43,000 10/30/01
69 31,454 0 DryClean USA 9,766 4/3/00
- ----------------------------------------------------------------------------------------------------------------------------
70 9,717 0
70a McCrory 28,000 1/31/14
70b McCrory 11,490 1/31/14
71 31,000 0
72 10,938 30,000 Rosauers/Super 1 Foods 52,500 1/3/11
- ----------------------------------------------------------------------------------------------------------------------------
73 0 0 Isotec, Inc. 60,030 4/1/09
74 5,000 0
75 9,581 24,000 Electro Rent Corp. 10,523 3/31/02
76 3,372 11,251 Little Daddy's Parthenon (RT-1,LLC) 5,674 11/30/08
77 49,500 0
- ----------------------------------------------------------------------------------------------------------------------------
78 7,100 0 University of Alaska Library 15,837 8/31/02
79 5,224 2,441 Central Co-op Grocery Store 15,223 1/31/09
80 7,200 70,248 Citibank, NA 5,500 1/31/01
81 9,350 20,542 US Census Bureau 9,500 12/31/00
82 5,616 14,000 Syndee's Crafts, LLC 28,110 7/31/06
- ----------------------------------------------------------------------------------------------------------------------------
83 8,346 0
84 122,400 0
85 6,266 0 Marin & Associates 3,802 8/31/03
86 0 0 Sports Authority 42,500 1/31/20
87 24,924 91,008 MacFrugals (Pic "N" Save) 24,348 7/1/09
- ----------------------------------------------------------------------------------------------------------------------------
88 18,659 0 Mid-Tex of Midland 23,282 5/31/03
89 11,729 20,012 AG Edwards 7,933 1/31/06
90 6,444 19,416 First United Inc./Cadillac 21,357 6/30/09
91 25,584 0
92 26,192 7,197 Handyman Hardware 13,440 9/30/01
- ----------------------------------------------------------------------------------------------------------------------------
93 5,340 16,104 Ortho Mattress 5,300 6/30/04
94 6,805 3,000 World of Woods, Inc. 35,510 8/31/12
95 5,925 13,884 C & M Pharmacal 19,627 3/31/03
96 11,391 14,004 Food Lion, Inc. 34,680 10/19/10
97 27,360 0
- ----------------------------------------------------------------------------------------------------------------------------
98 3,857 0 Today's Man 15,336 8/31/14
99 10,477 34,000 Cierra Interiors, Inc. 9,000 12/31/03
100 5,722 0 Data Sciences 9,194 4/30/04
101 38,000 0
102 7,383 2,496 GTE Customer Networks, Inc. 10,305 9/30/02
- ----------------------------------------------------------------------------------------------------------------------------
103 3,900 42,000 Indonesai Imports (Le Sak) 3,000 11/14/08
104 0 0
105 12,180 10,000 Cold Jet, Inc. 25,594 11/28/09
106 2,835 0 Ascot Tuxedo/BridesMart 11,032 9/30/08
107 8,063 10,138 Food Lion 33,800 6/8/15
- ----------------------------------------------------------------------------------------------------------------------------
108 2,321 0 Video Update, Inc. 4,532 8/31/07
109 20,262 0
110 0 0 Valley Lanes 32,423 9/30/06
111 6,585 27,600 Newpoint Technology, Inc. 18,000 12/31/09
- ----------------------------------------------------------------------------------------------------------------------------
112 2,292 12,000
112a Men's Warehouse 6,000 2/28/10
112b Men's Wearhouse 5,598 10/31/09
113 15,050 0 Budget Dental Holding 3,200 7/30/09
114 26,979 0
- ----------------------------------------------------------------------------------------------------------------------------
115 2,706 22,500 Meetinghouse Tech. 4,750 9/30/03
116 10,236 19,068 Action Express 26,000 7/31/05
117 2,496 0 Philadelphia Eye Associates 7,321 9/30/09
118 0 0 Kiddie Academy of Hannover 10,462 3/31/09
119 88,372 0
- ----------------------------------------------------------------------------------------------------------------------------
120 4,325 0
120a Monroe County Sheriff 6,000 5/31/01
120b Childtime 8,079 12/31/05
120c Unity Health 6,415 2/28/01
121 39,872 0
- ----------------------------------------------------------------------------------------------------------------------------
122 31,200 0
123 3,156 0 J. W. Floor Covering, Inc. 21,000 10/1/19
124 6,200 0
125 7,500 0
125a
125b
- ----------------------------------------------------------------------------------------------------------------------------
126 4,477 24,228 Altura Paint 4,665 4/30/09
127 1,512 7,860 Men's Warehouse 5,490 2/28/10
128 18,000 0
129 18,816 0
130 6,456 19,440 CT Produce 43,006 11/30/03
- ----------------------------------------------------------------------------------------------------------------------------
131 31,999 0
132 1,224 6,348 Mattress Discounters 3,100 11/19/09
133 5,736 25,800 EPOCH Mortgage Co. 2,624 2/28/03
134 2,736 28,692 Red Rock Resorts 3,340 3/31/03
135 0 0 1600 Pacific Place 110,000 10/31/63
- ----------------------------------------------------------------------------------------------------------------------------
136 2,609 12,996 Jiffy Lube 2,750 8/31/07
137 2,254 0 Service Employees International Union 2,699 5/31/01
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CERTAIN CHARACTERISTICS OF THE MULTIFAMILY LOANS
CONTROL LOAN
NUMBER NUMBER PROPERTY NAME CITY COUNTY
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1 24028 80 Lafayette Street New York New York
5 24317 Freeman Webb Portfolio
5a 24317A British Woods Apartments Nashville Davidson
5b 24317B Windover Apartments Knoxville Knox
5c 24317C Highland Ridge Apartments Madison Davidson
- ---------------------------------------------------------------------------------------------------------------------------------
7 09-0001295 Vista Way Apartments Oceanside San Diego
8 23439 Citation Club on Palmer Ranch Sarasota Sarasota
9 23452 Maverick Creek Villas San Antonio Bexar
13 23384 Concorde Place Apartments College Park Fulton
16 09-0001286 Buckingham Place Apartments Newark New Castle
- ---------------------------------------------------------------------------------------------------------------------------------
18 09-0001310 Berkley Place Apartments Clemson Pickens
24 23837 University Club Apartments Gainesville Alachua
25 25254 Commons of Valwood Farmers Branch Dallas
28 24307 Medina & Massillon Villas
28a 24307A Golden Villas of Medina Medina Medina
28b 24307B Golden Villas of Massillon Massillon Stark
- ---------------------------------------------------------------------------------------------------------------------------------
32 TA9068 Waterford Place Apartments Hickory Catawba
33 23717 Gatherings Apartments Orlando Orange
40 09-0001300 Milestone Manor Apartments Laurel Prince George
42 23875 Northland Gardens Apartments Las Vegas Clark
47 09-0001282 Brookscrossing Apartments Riverdale Clayton
- ---------------------------------------------------------------------------------------------------------------------------------
51 25494 Village at Red Clay Apartments Wilmington New Castle
52 22759 Toluca Terrace Apartments Burbank Los Angeles
55 TA9001 Laguna Vista Apartments Largo Pinellas
59 TA8486 Renaissance Apartments Fort Myers Lee
64 902803901 15 Dutch Street New York New York
- ---------------------------------------------------------------------------------------------------------------------------------
71 09-0001311 Summer Wind Apartments Austin Travis
74 09-0001298 85 Madison Street Hoboken Hudson
77 09-0001294 Beach Club Apartments Yuma Yuma
79 09-0001317 Madison Crossing Apartments Seattle King
81 TA8747 750 Grand Street Brooklyn Kings
- ---------------------------------------------------------------------------------------------------------------------------------
91 25893 Colchester Courtyard Apartments Colchester New London
97 09-0001290 Brentwood Park Apartments Ft. Wayne Allen
101 TA8645 Pine View Apartments Garland Dallas
104 24140 Singing Oaks Apartments Denton Denton
109 25942 Casa Cortez Apartments Tallahassee Leon
- ---------------------------------------------------------------------------------------------------------------------------------
114 24057 Sentinel Pointe Apartments San Antonio Bexar
122 25912 Bandywood Apartments Pascagoula Jackson
125 23118 Pin Oaks & Bur Oaks Apartments
125a 23118A Pin Oaks Apartments Ames Story
125b 23118B Bur Oak Apartments Ames Story
- ---------------------------------------------------------------------------------------------------------------------------------
128 24099 Meadows Apartments Altoona Polk
129 09-0001304 Syringa Terrace Apartments Pocatello Bannock
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CUT-OFF
CONTROL CUT-OFF DATE DATE BALANCE
NUMBER STATE ZIP CODE BALANCE ($) PER UNIT ($) UTILITIES PAID BY TENANT
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1 NY 10013 48,443,653 185607.8700 Gas/Electricity/Cable/Trash
5 28,500,000 35012.2900
5a TN 37217 Electricity/Cable
5b TN 37919 Electricity/Cable
5c TN 37115 Gas/Cable
- -----------------------------------------------------------------------------------------------------------------------------------
7 CA 92056 18,904,581 67516.3600 Electric
8 FL 34238 17,050,000 53281.2500 Water/Gas/Electricity/Cable
9 TX 78256 14,871,558 57641.7000 Electricity/Cable
13 GA 30349 12,897,774 26538.6300 Electricity/Cable
16 DE 19702 11,663,775 41956.0300 Electric
- -----------------------------------------------------------------------------------------------------------------------------------
18 SC 29631 11,373,287 86161.2700 Electric
24 FL 32608 8,974,118 95469.3400 Water/Gas/Electricity/Cable/Trash
25 TX 75234 8,592,834 32425.7900 Cable
28 8,432,397 24441.7300
28a OH 44256 Gas/Electricity/Cable
28b OH 44646 Gas/Electricity/Cable
- -----------------------------------------------------------------------------------------------------------------------------------
32 NC 28601 8,218,275 43482.9300 Electricity
33 FL 32817 8,183,378 85243.5200 Water/Gas/Electricity
40 MD 20708 6,479,775 15318.6200 Electric
42 NV 89115 6,441,372 21471.2394 Electricity/Cable
47 GA 30274 5,878,111 26241.5700 Electric/Water/Sewer
- -----------------------------------------------------------------------------------------------------------------------------------
51 DE 19808 5,385,148 28047.6482 Electricity/Cable
52 CA 91505 5,380,878 47618.3900 Gas/Electricity/Cable
55 FL 33771 4,988,366 21227.0900 Electricity
59 FL 33916 4,874,984 43526.6400 Electricity
64 NY 10038 4,422,909 340223.8100 Electric
- -----------------------------------------------------------------------------------------------------------------------------------
71 TX 78758 4,121,033 26587.3100 Electric
74 NJ 07030 3,990,359 159614.3700 Electric/Gas/Water
77 AZ 85364 3,754,106 18960.1300 Electric/Gas
79 WA 98112 3,593,662 149735.9400 Electric/Gas/Water/Sewer
81 NY 11211 3,495,742 151988.7700 Gas/Electricity
- -----------------------------------------------------------------------------------------------------------------------------------
91 CT 06415 3,247,267 35296.3800 Cable
97 IN 46815 2,790,128 23251.0600 Electric/Gas
101 TX 75042 2,711,432 17838.3700 Electric/Gas/Water/Sewer
104 TX 76201 2,489,408 19757.2000 Cable
109 FL 32304 2,346,897 35559.0400 Gas/Electricity/Cable
- -----------------------------------------------------------------------------------------------------------------------------------
114 TX 78209 2,142,225 22789.6300 Cable
122 MS 39581 1,775,000 17067.3100 Gas/Electricity/Cable
125 1,618,055 53935.1600
125a IA 50010 Water/Gas/Electricity/Cable
125b IA 50010 Water/Gas/Electricity/Cable
- -----------------------------------------------------------------------------------------------------------------------------------
128 IA 50009 1,455,894 20220.7500 Electricity/Cable
129 ID 83201 1,446,431 22600.4900 Electric
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
STUDIOS 1 BEDROOM 2 BEDROOM
CONTROL AVG RENT AVG RENT AVG RENT
NUMBER # UNITS PER MO. ($) # UNITS PER MO. ($) # UNITS PER MO. ($)
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1 24 1,900 180 2,700 33 3,300
5
5a 0 0 30 580 221 726
5b 0 0 129 530 130 720
5c 0 0 90 470 140 594
- -----------------------------------------------------------------------------------------------------
7 0 0 110 865 170 1,019
8 0 0 108 745 174 900
9 0 0 36 615 74 740
13 0 0 178 460 268 592
16 0 0 64 620 214 715
- -----------------------------------------------------------------------------------------------------
18 0 0 0 0 24 606
24 0 0 0 0 0 0
25 0 0 87 574 110 614
28
28a 0 0 99 440 96 490
28b 0 0 112 405 38 450
- -----------------------------------------------------------------------------------------------------
32 0 0 78 572 99 706
33 0 0 0 0 0 0
40 0 0 122 609 248 743
42 0 0 104 447 172 494
47 0 0 24 479 96 592
- -----------------------------------------------------------------------------------------------------
51 0 0 71 555 121 605
52 10 750 46 900 48 1,200
55 0 0 235 445 0 0
59 0 0 48 581 28 705
64 13 3,458 0 0 0 0
- -----------------------------------------------------------------------------------------------------
71 0 0 0 0 155 650
74 0 0 5 1,600 20 2,023
77 126 340 0 0 72 435
79 4 694 8 956 12 1,220
81 0 0 20 1,695 3 3,342
- -----------------------------------------------------------------------------------------------------
91 0 0 0 0 92 727
97 0 0 78 389 42 488
101 0 0 81 385 64 517
104 0 0 16 497 86 597
109 0 0 24 471 30 616
- -----------------------------------------------------------------------------------------------------
114 14 395 28 470 52 571
122 0 0 16 410 72 475
125
125a 0 0 0 0 4 600
125b 0 0 0 0 8 600
- -----------------------------------------------------------------------------------------------------
128 0 0 2 450 68 540
129 0 0 6 393 50 456
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
3 BEDROOM 4 BEDROOM NUMBER
CONTROL AVG RENT AVG RENT OF
NUMBER # UNITS PER MO. ($) # UNITS PER MO. ($) ELEVATORS
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1 6 3,900 18 4,822 6
5
5a 12 945 0 0 0
5b 12 945 0 0 0
5c 50 700 0 0 0
- ---------------------------------------------------------------------------------------
7 0 0 0 0 0
8 38 1,082 0 0 0
9 74 1,020 74 1,300 0
13 40 700 0 0 0
16 0 0 0 0 0
- ---------------------------------------------------------------------------------------
18 0 0 108 1,212 0
24 0 0 94 1,360 0
25 68 877 0 0 0
28
28a 0 0 0 0 0
28b 0 0 0 0 0
- ---------------------------------------------------------------------------------------
32 12 880 0 0 0
33 0 0 96 1,300 0
40 53 936 0 0 0
42 24 625 0 0 0
47 104 640 0 0 0
- ---------------------------------------------------------------------------------------
51 0 0 0 0 0
52 9 1,500 0 0 2
55 0 0 0 0 0
59 36 828 0 0 0
64 0 0 0 0 2
- ---------------------------------------------------------------------------------------
71 0 0 0 0 0
74 0 0 0 0 1
77 0 0 0 0 0
79 0 0 0 0 2
81 0 0 0 0 1
- ---------------------------------------------------------------------------------------
91 0 0 0 0 0
97 0 0 0 0 0
101 7 645 0 0 0
104 24 697 0 0 0
109 0 0 12 1,104 0
- ---------------------------------------------------------------------------------------
114 0 0 0 0 0
122 16 579 0 0 0
125
125a 6 783 6 1,067 0
125b 3 750 3 1,033 0
- ---------------------------------------------------------------------------------------
128 2 650 0 0 0
129 8 636 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>
$ 434,534 - $ 499,999 1 $ 434,534 0.05% $ 434,534 $ 434,534 $ 434,534
500,000 - 999,999 2 1,930,298 0.22 946,421 983,877 965,149
1,000,000 - 1,999,999 17 26,389,365 2.98 1,097,197 1,937,700 1,552,316
2,000,000 - 2,999,999 24 59,172,886 6.68 2,008,723 2,994,835 2,465,537
3,000,000 - 3,999,999 21 73,894,278 8.34 3,150,377 3,994,697 3,518,775
4,000,000 - 4,999,999 18 81,501,713 9.20 4,113,469 4,988,366 4,527,873
5,000,000 - 5,999,999 8 43,125,968 4.87 5,042,842 5,878,111 5,390,746
6,000,000 - 6,999,999 9 58,252,364 6.57 6,203,165 6,855,468 6,472,485
7,000,000 - 7,999,999 3 21,388,711 2.41 7,000,000 7,378,390 7,129,570
8,000,000 - 8,999,999 11 92,387,044 10.42 8,116,829 8,974,118 8,398,822
9,000,000 - 9,999,999 2 19,232,254 2.17 9,266,742 9,965,512 9,616,127
10,000,000 - 11,999,999 7 78,791,259 8.89 10,260,577 11,955,484 11,255,894
12,000,000 - 13,999,999 4 51,898,287 5.86 12,764,323 13,123,000 12,974,572
14,000,000 - 16,999,999 2 29,471,558 3.33 14,600,000 14,871,558 14,735,779
17,000,000 - 19,999,999 2 35,954,581 4.06 17,050,000 18,904,581 17,977,290
20,000,000 - 24,999,999 1 22,972,361 2.59 22,972,361 22,972,361 22,972,361
25,000,000 - 49,999,999 5 189,553,191 21.39 28,500,000 48,443,653 37,910,638
-- ------------ ------
Total/Avg./Wtd.
Avg./Min/Max: 137 $886,350,652 100.00% $ 434,534 $48,443,653 $ 6,469,713
=== ============ ======
<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>
$ 434,534 - $ 499,999 1.32x 1.32x 1.32x 9.625% 113.0 62.08% 62.08% 62.08%
500,000 - 999,999 1.17 1.44 1.30 8.956 145.6 52.47 65.72 58.97
1,000,000 - 1,999,999 1.07 2.55 1.37 8.547 117.1 42.81 81.75 67.06
2,000,000 - 2,999,999 1.16 1.86 1.33 8.404 118.7 57.50 79.86 72.32
3,000,000 - 3,999,999 1.10 2.27 1.38 8.421 116.4 43.83 80.07 68.53
4,000,000 - 4,999,999 1.19 1.55 1.30 8.361 114.7 57.94 79.49 70.82
5,000,000 - 5,999,999 1.23 1.83 1.38 8.098 115.2 47.62 78.40 67.88
6,000,000 - 6,999,999 1.20 3.17 1.52 8.600 111.7 43.20 79.52 67.64
7,000,000 - 7,999,999 1.25 1.38 1.30 8.623 116.3 65.42 76.20 72.18
8,000,000 - 8,999,999 1.18 1.90 1.33 8.223 115.2 56.44 79.55 71.19
9,000,000 - 9,999,999 1.27 1.37 1.32 8.474 114.0 70.68 71.84 71.24
10,000,000 - 11,999,999 1.21 1.65 1.33 8.354 114.3 49.59 79.62 68.43
12,000,000 - 13,999,999 1.17 1.36 1.23 8.456 117.0 62.79 79.78 74.43
14,000,000 - 16,999,999 1.24 1.43 1.33 8.118 88.8 69.86 70.15 70.01
17,000,000 - 19,999,999 1.20 1.21 1.20 7.919 115.5 74.13 79.77 77.10
20,000,000 - 24,999,999 1.25 1.25 1.25 8.550 118.0 78.94 78.94 78.94
25,000,000 - 49,999,999 1.20 1.90 1.46 8.271 117.1 49.20 78.49 63.58
Total/Avg./Wtd.
Avg./Min/Max: 1.07x 3.17x 1.36x 8.338% 115.0 42.81% 81.75% 69.20%
</TABLE>
A-12
<PAGE>
DISTRIBUTION OF PROPERTY TYPES(A)
<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 40 $290,934,812 32.82% $ 705,863 $48,443,653 $7,273,370
Office 35 213,476,252 24.08 302,613 36,959,753 6,099,321
Retail 37 158,312,596 17.86 889,503 14,600,000 4,278,719
Industrial 35 132,092,589 14.90 926,367 13,113,190 3,774,074
Lodging 23 61,174,378 6.90 1,394,821 6,460,481 2,659,756
Mixed Use 4 20,271,784 2.29 434,534 10,962,714 5,067,946
Mobile Home Park 2 5,108,120 0.58 1,624,857 3,483,262 2,554,060
Special Purpose 3 4,980,121 0.56 714,180 3,282,064 1,660,040
-- ------------ ------
Total/Avg./Wtd.
Avg./Min/Max: 179 $886,350,652 100.00% $ 302,613 $48,443,653 $4,951,680
=== ============ ======
<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 3.17x 1.31x 8.011% 115.7 43.20% 79.81% 73.17%
Office 1.21 1.90 1.38 8.398 116.2 43.83 78.94 66.28
Retail 1.10 1.86 1.31 8.649 111.3 55.24 79.78 69.07
Industrial 1.14 2.27 1.30 8.452 116.4 48.72 81.75 72.74
Lodging 1.42 2.55 1.84 8.545 112.7 42.81 73.41 51.71
Mixed Use 1.25 1.32 1.28 8.601 115.6 59.87 77.20 71.70
Mobile Home Park 1.21 1.21 1.21 8.300 117.0 73.86 80.07 78.09
Special Purpose 1.17 1.30 1.27 8.379 127.9 52.47 72.93 68.74
Total/Avg./Wtd.
Avg./Min/Max: 1.07x 3.17x 1.36x 8.338% 115.0 42.81% 81.75% 69.20%
</TABLE>
DISTRIBUTION OF DEBT SERVICE COVERAGE RATIOS
<TABLE>
<CAPTION>
PERCENTAGE
OF
AGGREGATE MINIMUM MAXIMUM AVERAGE
RANGE OF DEBT NUMBER OF CUT-OFF CUT-OFF CUT-OFF CUT-OFF
SERVICE COVERAGE MORTGAGE CUT-OFF DATE DATE DATE DATE DATE
RATIOS LOANS BALANCE BALANCE BALANCE BALANCE BALANCE
- ------------------ ----------- -------------- ------------ ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
1.00 - 1.10x 2 $ 5,735,682 0.65% $1,775,000 $ 3,960,682 $ 2,867,841
1.11 - 1.20 16 132,507,175 14.95 983,877 28,500,000 8,281,698
1.21 - 1.30 64 393,935,889 44.44 1,097,197 48,443,653 6,155,248
1.31 - 1.40 27 152,965,666 17.26 434,534 36,959,753 5,665,395
1.41 - 1.50 13 90,649,425 10.23 946,421 29,425,174 6,973,033
1.51 - 1.60 3 13,878,955 1.57 2,711,432 6,744,614 4,626,318
1.61 - 1.70 2 14,573,353 1.64 3,393,423 11,179,929 7,286,676
1.71 - 1.80 1 2,300,000 0.26 2,300,000 2,300,000 2,300,000
1.81 - 1.90 6 67,935,216 7.66 1,904,942 46,224,611 11,322,536
2.21 - 2.30 1 3,994,697 0.45 3,994,697 3,994,697 3,994,697
2.51 - 3.17 2 7,874,596 0.89 1,394,821 6,479,775 3,937,298
-- ------------ ------
Total/Avg./Wtd.
Avg./Min/Max: 137 $886,350,652 100.00% $ 434,534 $48,443,653 $ 6,469,713
=== ============ ======
<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 1.10x 1.09x 8.466% 114.5 65.63% 74.73% 71.91%
1.11 - 1.20 1.14 1.20 1.19 8.175 115.9 52.47 81.75 77.62
1.21 - 1.30 1.21 1.30 1.25 8.325 115.7 57.54 80.07 72.09
1.31 - 1.40 1.31 1.40 1.35 8.572 116.3 57.26 79.62 68.73
1.41 - 1.50 1.41 1.49 1.45 8.261 110.0 53.61 79.03 66.69
1.51 - 1.60 1.55 1.56 1.55 8.503 116.3 55.24 79.75 63.95
1.61 - 1.70 1.65 1.68 1.66 8.784 117.2 46.49 49.59 48.87
1.71 - 1.80 1.71 1.71 1.71 8.730 120.0 57.50 57.50 57.50
1.81 - 1.90 1.83 1.90 1.89 8.198 112.2 42.81 61.78 50.05
2.21 - 2.30 2.27 2.27 2.27 8.070 118.0 48.72 48.72 48.72
2.51 - 3.17 2.55 3.17 3.06 8.088 114.6 43.20 56.93 45.63
Total/Avg./Wtd.
Avg./Min/Max: 1.07x 3.17x 1.36x 8.338% 115.0 42.81% 81.75% 69.20%
</TABLE>
- -------
(a) If a Mortgage Loan is secured by multiple properties with different
property type classifications, it is treated as multiple Mortgage
Loans each of which is allocated a Cut-Off Date Balance based on the
allocated loan amount.
A-13
<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>
7.5001 - 7.7500% 7 $ 57,022,848 6.43% $2,142,225 $28,500,000 $ 8,146,121
7.7501 - 8.0000 15 128,457,239 14.49 1,455,894 29,425,174 8,563,816
8.0001 - 8.2500 28 194,813,600 21.98 1,414,992 48,443,653 6,957,629
8.2501 - 8.5000 38 239,255,588 26.99 1,624,857 46,224,611 6,296,200
8.5001 - 8.7500 23 133,529,389 15.07 1,097,197 22,972,361 5,805,626
8.7501 - 9.0000 13 46,021,763 5.19 946,421 8,345,079 3,540,136
9.0001 - 9.2500 7 73,636,208 8.31 1,477,524 36,959,753 10,519,458
9.2501 - 9.5000 4 11,784,664 1.33 1,796,101 4,142,988 2,946,166
9.5001 - 9.6250 2 1,829,355 0.21 434,534 1,394,821 914,677
-- ------------ ------
Total/Avg./Wtd.
Avg./Min/Max: 137 $886,350,652 100.00% $ 434,534 $48,443,653 $ 6,469,713
=== ============ ======
<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>
7.5001 - 7.7500% 1.20x 1.90x 1.40x 7.680% 113.6 47.62% 79.75% 71.56%
7.7501 - 8.0000 1.18 3.17 1.41 7.869 118.6 43.20 79.66 70.39
8.0001 - 8.2500 1.20 2.27 1.31 8.127 114.9 43.83 79.86 70.66
8.2501 - 8.5000 1.07 1.90 1.40 8.386 111.2 42.81 80.07 67.99
8.5001 - 8.7500 1.14 1.71 1.32 8.610 118.1 49.59 81.75 70.05
8.7501 - 9.0000 1.17 1.55 1.32 8.866 118.7 52.47 76.33 67.35
9.0001 - 9.2500 1.23 1.68 1.35 9.047 114.5 46.49 74.12 66.44
9.2501 - 9.5000 1.27 1.49 1.35 9.429 118.5 53.61 66.95 62.33
9.5001 - 9.6250 1.32 2.55 2.26 9.545 113.0 56.93 62.08 58.15
Total/Avg./Wtd.
Avg./Min/Max: 1.07x 3.17x 1.36x 8.338% 115.0 42.81% 81.75% 69.20%
</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
AMORTIZATION MORTGAGE DATE DATE DATE DATE DATE
TYPE LOANS BALANCE BALANCE BALANCE BALANCE BALANCE
- ------------------ ----------- --------------- ------------ ------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Balloon 124 $759,109,247 85.64% $ 434,534 $48,443,653 $ 6,121,849
Hyperamortizing 11 124,070,875 14.00 1,796,101 46,224,611 11,279,170
Fully Amortizing 2 3,170,530 0.36 983,877 2,186,653 1,585,265
--- ------------ ------
Total/Avg./Wtd.
Avg./Min/Max: 137 $886,350,652 100.00% $ 434,534 $48,443,653 $ 6,469,713
=== ============ ======
<CAPTION>
WEIGHTED WEIGHTED
MINIMUM MAXIMUM AVERAGE AVERAGE WEIGHTED
DEBT DEBT DEBT WEIGHTED REMAINING MINIMUM MAXIMUM AVERAGE
SERVICE SERVICE SERVICE AVERAGE TERM TO CUT-OFF CUT-OFF CUT-OFF
AMORTIZATION COVERAGE COVERAGE COVERAGE MORTGAGE MATURITY DATE DATE DATE
TYPE RATIO RATIO RATIO RATE (MOS) LTV LTV LTV
- ------------------ ---------- ---------- ---------- ---------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balloon 1.07x 3.17x 1.33x 8.293% 114.7 43.20% 81.75% 70.63%
Hyperamortizing 1.20 1.90 1.55 8.607 115.3 42.81 79.55 60.83
Fully Amortizing 1.17 1.28 1.25 8.766 176.8 52.47 57.54 55.97
Total/Avg./Wtd.
Avg./Min/Max: 1.07x 3.17x 1.36x 8.338% 115.0 42.81% 81.75% 69.20%
</TABLE>
A-14
<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 - 50.0% 8 $ 81,845,184 9.23% $1,904,942 $46,224,611 $10,230,648
50.1 - 60.0 12 52,143,373 5.88 983,877 11,955,484 4,345,281
60.1 - 65.0 15 101,300,658 11.43 434,534 29,425,174 6,753,377
65.1 - 70.0 22 170,313,407 19.22 946,421 48,443,653 7,741,519
70.1 - 75.0 38 197,920,241 22.33 1,446,431 17,050,000 5,208,427
75.1 - 80.0 40 277,668,728 31.33 2,008,723 28,500,000 6,941,718
80.1 - 85.0 2 5,159,060 0.58 1,675,798 3,483,262 2,579,530
-- ------------ ------
Total/Avg./Wtd.
Avg./Min/Max: 137 $886,350,652 100.00% $ 434,534 $48,443,653 $ 6,469,713
=== ============ ======
<CAPTION>
WEIGHTED WEIGHTED
MINIMUM MAXIMUM AVERAGE AVERAGE WEIGHTED
RANGE OF DEBT DEBT DEBT WEIGHTED REMAINING MINIMUM MAXIMUM AVERAGE
CUT-OFF DATE SERVICE SERVICE SERVICE AVERAGE TERM TO CUT-OFF CUT-OFF CUT-OFF
LOAN-TO-VALUE COVERAGE COVERAGE COVERAGE MORTGAGE MATURITY DATE DATE DATE
RATIOS RATIO RATIO RATIO RATE (MOS) LTV LTV LTV
- ---------------- ---------- ---------- ---------- ---------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
30.1 - 50.0% 1.65x 3.17x 1.97x 8.332% 113.7 42.81% 49.59% 48.17%
50.1 - 60.0 1.17 2.55 1.49 8.631 118.9 52.47 59.87 57.60
60.1 - 65.0 1.21 1.86 1.38 8.331 118.2 60.46 64.73 62.94
65.1 - 70.0 1.07 1.55 1.32 8.490 111.8 65.31 69.86 67.33
70.1 - 75.0 1.10 1.47 1.27 8.375 114.3 70.15 74.77 72.79
75.1 - 80.0 1.16 1.56 1.24 8.167 116.0 75.03 79.86 78.25
80.1 - 85.0 1.14 1.21 1.19 8.407 116.7 80.07 81.75 80.62
Total/Avg./Wtd.
Avg./Min/Max: 1.07x 3.17x 1.36x 8.338% 115.0 42.81% 81.75% 69.20%
</TABLE>
A-15
<PAGE>
DISTRIBUTION OF MORTGAGED PROPERTIES BY STATE(A)
<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>
New York 17 $112,116,525 12.65% $ 507,444 $48,443,653 $ 6,595,090
California 13 104,230,421 11.76 1,496,290 29,425,174 8,017,725
Texas 22 90,858,492 10.25 889,503 14,871,558 4,129,931
Florida 15 82,046,915 9.26 434,534 17,050,000 5,469,794
Minnesota 18 52,198,112 5.89 302,613 12,764,323 2,899,895
Maryland 5 52,093,556 5.88 946,421 36,959,753 10,418,711
New Jersey 8 39,439,075 4.45 1,937,700 8,462,563 4,929,884
Michigan 6 33,652,307 3.80 2,202,589 13,113,190 5,608,718
Tennessee 5 32,572,806 3.67 1,716,432 10,003,500 6,514,561
Georgia 6 29,079,438 3.28 1,147,915 12,897,774 4,846,573
Arizona 7 23,281,205 2.63 1,097,197 8,480,363 3,325,886
Pennsylvania 6 22,470,680 2.54 2,008,723 6,012,698 3,745,113
Illinois 3 22,305,288 2.52 3,994,697 9,965,512 7,435,096
Colorado 4 22,044,005 2.49 4,886,807 6,744,614 5,511,001
Ohio 6 19,874,912 2.24 1,646,981 5,508,501 3,312,485
Delaware 2 17,048,924 1.92 5,385,148 11,663,775 8,524,462
North Carolina 3 15,442,354 1.74 1,796,101 8,218,275 5,147,451
Massachusetts 2 14,378,390 1.62 7,000,000 7,378,390 7,189,195
Virginia 5 12,050,559 1.36 1,477,524 2,994,835 2,410,112
Virgin Islands 2 11,955,484 1.35 3,831,694 8,123,790 5,977,742
South Carolina 1 11,373,287 1.28 11,373,287 11,373,287 11,373,287
Connecticut 2 10,102,735 1.14 3,247,267 6,855,468 5,051,368
Nevada 2 9,936,797 1.12 3,495,425 6,441,372 4,968,399
Washington 2 7,707,131 0.87 3,593,662 4,113,469 3,853,566
Oregon 2 7,553,473 0.85 2,300,000 5,253,473 3,776,737
New Hampshire 2 5,719,458 0.65 2,236,195 3,483,262 2,859,729
Indiana 2 4,695,070 0.53 1,904,942 2,790,128 2,347,535
West Virginia 2 4,375,398 0.49 2,009,119 2,366,280 2,187,699
Kansas 2 3,968,629 0.45 1,780,922 2,187,707 1,984,315
Alaska 1 3,688,040 0.42 3,688,040 3,688,040 3,688,040
Iowa 3 3,073,949 0.35 705,863 1,455,894 1,024,650
Missouri 1 1,795,805 0.20 1,795,805 1,795,805 1,795,805
Mississippi 1 1,775,000 0.20 1,775,000 1,775,000 1,775,000
Idaho 1 1,446,431 0.16 1,446,431 1,446,431 1,446,431
-- ------------ ------
Total/Avg./Wtd.
Avg./Min/Max: 179 $886,350,652 100.00% $ 302,613 $48,443,653 $ 4,951,680
=== ============ ======
<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>
New York 1.19x 1.90x 1.36x 8.270% 115.6 43.83% 77.20% 64.82%
California 1.14 1.83 1.38 8.203 119.4 47.62 81.75 66.90
Texas 1.17 2.55 1.37 8.458 108.4 49.20 79.75 68.94
Florida 1.20 1.44 1.26 8.235 113.3 62.08 78.69 74.24
Minnesota 1.20 1.90 1.28 8.546 116.9 49.20 79.78 75.90
Maryland 1.25 3.17 1.57 8.786 117.0 43.20 75.09 64.29
New Jersey 1.16 1.90 1.45 8.269 113.2 49.20 79.81 67.76
Michigan 1.10 1.90 1.25 8.477 115.6 49.20 79.47 73.88
Tennessee 1.20 1.90 1.29 7.810 114.6 49.20 78.49 74.83
Georgia 1.20 1.42 1.26 8.306 115.0 66.38 75.87 72.46
Arizona 1.24 1.90 1.45 8.277 114.8 49.20 79.03 65.68
Pennsylvania 1.16 1.33 1.25 8.406 114.5 72.29 79.82 74.31
Illinois 1.27 2.27 1.49 8.393 114.7 48.72 71.94 67.22
Colorado 1.22 1.55 1.38 8.451 116.4 55.24 79.49 67.14
Ohio 1.25 1.90 1.41 8.298 116.5 49.20 79.55 69.96
Delaware 1.25 1.37 1.33 7.844 115.6 76.93 79.62 78.77
North Carolina 1.18 1.49 1.25 8.086 114.5 53.61 79.40 71.76
Massachusetts 1.25 1.38 1.31 8.732 116.9 65.42 74.76 70.21
Virginia 1.23 1.90 1.54 8.386 116.7 49.20 79.86 66.92
Virgin Islands 1.30 1.30 1.30 9.010 116.0 59.87 59.87 59.87
South Carolina 1.24 1.24 1.24 8.250 116.0 77.24 77.24 77.24
Connecticut 1.25 1.27 1.26 8.398 116.3 67.21 77.32 70.46
Nevada 1.20 1.33 1.25 8.237 114.8 77.68 79.52 78.87
Washington 1.26 1.32 1.29 8.151 115.9 57.94 66.55 61.95
Oregon 1.71 1.90 1.84 8.480 114.4 49.20 57.50 51.73
New Hampshire 1.21 1.43 1.30 8.089 114.3 63.89 80.07 73.74
Indiana 1.24 1.90 1.51 8.227 113.2 42.81 73.42 61.00
West Virginia 1.20 1.90 1.52 8.586 115.2 49.20 76.33 63.87
Kansas 1.90 1.90 1.90 8.370 112.0 49.20 49.20 49.20
Alaska 1.37 1.37 1.37 8.480 114.0 60.46 60.46 60.46
Iowa 1.21 1.24 1.22 7.911 114.9 72.40 72.79 72.58
Missouri 1.90 1.90 1.90 8.370 112.0 49.20 49.20 49.20
Mississippi 1.07 1.07 1.07 8.390 118.0 65.63 65.63 65.63
Idaho 1.36 1.36 1.36 8.040 116.0 71.43 71.43 71.43
Total/Avg./Wtd.
Avg./Min/Max: 1.07x 3.17x 1.36x 8.338% 115.0 42.81% 81.75% 69.20%
</TABLE>
- -------
(a) If a Mortgage Loan is secured by properties in multiple states, it
is treated as multiple Mortgage Loans each of which is allocated a
cut-off balance based on the allocated loan amount.
A-16
<PAGE>
DISTRIBUTION OF REMAINING AMORTIZATION TERMS(A)
<TABLE>
<CAPTION>
PERCENTAGE
OF
RANGE OF AGGREGATE MINIMUM MAXIMUM AVERAGE
REMAINING NUMBER OF CUT-OFF CUT-OFF CUT-OFF CUT-OFF
AMORTIZATION MORTGAGE CUT-OFF DATE DATE DATE DATE DATE
TERMS (MOS) LOANS BALANCE BALANCE BALANCE BALANCE BALANCE
- ---------------- ----------- -------------- ------------ -------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Interest Only 1 $ 14,600,000 1.65% $14,600,000 $14,600,000 $14,600,000
171 - 190 2 3,170,530 0.36 983,877 2,186,653 1,585,265
251 - 270 2 6,838,943 0.77 1,796,101 5,042,842 3,419,471
271 - 290 1 434,534 0.05 434,534 434,534 434,534
291 - 310 13 97,557,570 11.01 946,421 46,224,611 7,504,428
311 - 330 1 1,394,821 0.16 1,394,821 1,394,821 1,394,821
331 - 360 117 762,354,254 86.01 1,097,197 48,443,653 6,515,848
--- ------------ ------
Total/Avg./Wtd.
Avg./Min/Max: 137 $886,350,652 100.00% $ 434,534 $48,443,653 $ 6,469,713
=== ============ ======
<CAPTION>
WEIGHTED WEIGHTED
MINIMUM MAXIMUM AVERAGE AVERAGE WEIGHTED
RANGE OF DEBT DEBT DEBT WEIGHTED REMAINING MINIMUM MAXIMUM AVERAGE
REMAINING SERVICE SERVICE SERVICE AVERAGE TERM TO CUT-OFF CUT-OFF CUT-OFF
AMORTIZATION COVERAGE COVERAGE COVERAGE MORTGAGE MATURITY DATE DATE DATE
TERMS (MOS) RATIO RATIO RATIO RATE (MOS.) LTV LTV LTV
- ---------------- ---------- ---------- ---------- ---------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Interest Only 1.43x 1.43x 1.43x 8.330% 58.0 69.86% 69.86% 69.86%
171 - 190 1.17 1.28 1.25 8.766 176.8 52.47 57.54 55.97
251 - 270 1.25 1.49 1.31 9.024 118.7 53.61 69.56 65.37
271 - 290 1.32 1.32 1.32 9.625 113.0 62.08 62.08 62.08
291 - 310 1.16 1.90 1.63 8.611 113.9 42.81 77.31 56.72
311 - 330 2.55 2.55 2.55 9.520 113.0 56.93 56.93 56.93
331 - 360 1.07 3.17 1.33 8.293 116.0 43.20 81.75 70.91
Total/Avg./Wtd.
Avg./Min/Max: 1.07x 3.17x 1.36x 8.338% 115.0 42.81% 81.75% 69.20%
</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 1 $ 14,600,000 1.65% $14,600,000 $14,600,000 $14,600,000
84 - 120 130 834,213,877 94.12 434,534 48,443,653 6,417,030
121 - 180 6 37,536,775 4.23 983,877 29,425,174 6,256,129
--- ------------ ------
Total/Avg./Wtd.
Avg./Min/Max: 137 $886,350,652 100.00% $ 434,534 $48,443,653 $ 6,469,713
=== ============ ======
<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 1.43x 1.43x 1.43x 8.330% 58.0 69.86% 69.86% 69.86%
84 - 120 1.07 3.17 1.36 8.348 115.2 42.81 81.75 69.50
121 - 180 1.17 1.47 1.42 8.116 132.2 52.47 72.07 62.35
Total/Avg./Wtd.
Avg./Min/Max: 1.07x 3.17x 1.36x 8.338% 115.0 42.81% 81.75% 69.20%
</TABLE>
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 1 $ 14,600,000 1.65% $14,600,000 $14,600,000 $14,600,000
71 - 90 1 6,389,543 0.72 6,389,543 6,389,543 6,389,543
91 - 110 5 31,888,778 3.60 2,236,195 11,395,492 6,377,756
111 - 120 124 795,935,555 89.80 434,534 48,443,653 6,418,835
121 - 130 4 34,366,245 3.88 1,246,427 29,425,174 8,591,561
171 - 190 2 3,170,530 0.36 983,877 2,186,653 1,585,265
--- ------------ ------
Total/Avg./Wtd.
Avg./Min/Max: 137 $886,350,652 100.00% $ 434,534 $48,443,653 $ 6,469,713
=== ============ ======
<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 1.43x 1.43x 1.43x 8.330% 58.0 69.86% 69.86% 69.86%
71 - 90 1.25 1.25 1.25 9.150 81.0 74.12 74.12 74.12
91 - 110 1.19 1.90 1.42 7.866 107.9 56.44 73.10 64.50
111 - 120 1.07 3.17 1.36 8.361 115.8 42.81 81.75 69.67
121 - 130 1.23 1.47 1.44 8.056 128.1 61.95 72.07 62.94
171 - 190 1.17 1.28 1.25 8.766 176.8 52.47 57.54 55.97
Total/Avg./Wtd.
Avg./Min/Max: 1.07x 3.17x 1.36x 8.338% 115.0 42.81% 81.75% 69.20%
</TABLE>
- -------
(a) 91 Mortgage Loans representing 62.31% of the Aggregate Cut-Off Date
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.
A-17
<PAGE>
DISTRIBUTION OF PREPAYMENT PROVISION
<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>
Lockout/Defeasance 135 $884,932,240 99.84% $946,421 $48,443,653 $6,555,054
Lockout/Greater YM or
1% 1 983,877 0.11 983,877 983,877 983,877
Lockout/Declining Fee 1 434,534 0.05 434,534 434,534 434,534
--- ------------ ------
Total/Avg./Wtd.
Avg./Min/Max: 137 $886,350,652 100.00% $434,534 $48,443,653 $6,469,713
=== ============ ======
<CAPTION>
WEIGHTED WEIGHTED
MINIMUM MAXIMUM AVERAGE AVERAGE WEIGHTED
DEBT DEBT DEBT WEIGHTED REMAINING MINIMUM MAXIMUM AVERAGE
SERVICE SERVICE SERVICE AVERAGE TERM TO CUT-OFF CUT-OFF CUT-OFF
COVERAGE COVERAGE COVERAGE MORTGAGE MATURITY DATE DATE DATE
PREPAYMENT PROVISION RATIO RATIO RATIO RATE (MOS) LTV LTV LTV
- ----------------------- ---------- ---------- ---------- ---------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Lockout/Defeasance 1.07x 3.17x 1.36x 8.337% 115.0 42.81% 81.75% 69.23%
Lockout/Greater YM or
1% 1.17 1.17 1.17 9.000 174.0 52.47 52.47 52.47
Lockout/Declining Fee 1.32 1.32 1.32 9.625 113.0 62.08 62.08 62.08
Total/Avg./Wtd.
Avg./Min/Max: 1.07x 3.17x 1.36x 8.338% 115.0 42.81% 81.75% 69.20%
</TABLE>
A-18
<PAGE>
PREPAYMENT PROVISIONS*
<TABLE>
<CAPTION>
PREPAYMENT RESTRICTIONS MARCH 2000 MARCH 2001 MARCH 2002 MARCH 2003 MARCH 2004 MARCH 2005 MARCH 2006 MARCH 2007
- ------------------------- ------------ ------------ ------------ ------------ ------------ ------------ ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Locked out 100.00% 100.00% 100.00% 6.88% 0.14% 0.09% 0.09% 0.08%
Defeasance 0.00 0.00 0.00 93.12 99.86 99.86 99.86 99.87
Yield maintenance 0.00 0.00 0.00 0.00 0.00 0.05 0.05 0.05
------ ------ ------ ------ ------ ------ ------ ------
3.00 - 3.99% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
2.00 - 2.99% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
1.00 - 1.99% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Open 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
------ ------ ------ ------ ------ ------ ------ ------
Total 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
UPB ($MM) 886.35 879.88 872.61 864.46 855.80 831.58 821.11 803.74
% of Initial UPB 100.00% 99.27% 98.45% 97.53% 96.55% 93.82% 92.64% 90.68%
------ ------ ------ ------ ------ ------ ------ ------
</TABLE>
<TABLE>
<CAPTION>
PREPAYMENT RESTRICTIONS MARCH 2008 MARCH 2009 MARCH 2010 MARCH 2011 MARCH 2012 MARCH 2013 MARCH 2014
- ------------------------- ------------ ------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Locked out 0.08% 0.07% 0.00% 0.00% 0.00% 0.00% 0.00%
Defeasance 99.88 98.65 98.59 70.07 70.75 72.25 77.99
Yield maintenance 0.05 0.05 0.00 0.00 0.00 0.00 0.00
------ ------ ------ ------ ------ ------ ------
3.00 - 3.99% 0.00 0.00 1.41 0.00 0.00 0.00 0.00
2.00 - 2.99% 0.00 0.00 0.00 29.93 0.00 0.00 0.00
1.00 - 1.99% 0.00 0.00 0.00 0.00 29.25 27.75 0.00
Open 0.00 1.23 0.00 0.00 0.00 0.00 22.01
------ ------ ------ ------ ------ ------ ------
Total 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
UPB ($MM) 791.61 763.60 32.06 1.22 0.93 0.62 0.27
% of Initial UPB 89.31% 86.15% 3.62% 0.14% 0.11% 0.07% 0.03%
------ ------ ------ ------ ------ ------ ------
</TABLE>
- -------
* Assuming no prepayments and the maturity assumptions described under
"Yield and Maturity Considerations" in this prospectus supplement.
A-19
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
<TABLE>
ANNEX B
<CAPTION>
<S> <C> <C>
ABN AMRO GMAC COMMERCIAL MORTGAGE SECURITIES, INC. Statement Date: 04/17/2000
LaSalle Bank N.A. GMAC COMMERCIAL MORTGAGE CORPORATION, AS SERVICER Payment Date: 04/17/2000
135 S. LaSalle Street Suite 1625 COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES Prior Payment: NA
Chicago, IL 60674-4107 SERIES 2000-C1 Next Payment: 05/15/2000
Record Date: 03/31/2000
ABN AMRO ACCT: 12-3456-78-9
Administrator: Analyst:
<CAPTION>
REPORTING PACKAGE TABLE OF CONTENTS
====================================================================================================================================
================================================ ================================================= =============================
<S> <C> <C>
Page(s)
Issue Id: REMIC Certificate Report Closing Date:
ASAP #: Bond Interest Reconciliation First Payment Date:
Monthly Data File Name: Cash Reconciliation Summary Assumed Final Payment Date:
15 Month Historical Loan Status Summary
================================================ 15 Month Historical =============================
Payoff/Loss Summary
Historical Collateral Level
Prepayment Report Delinquent
Loan Detail Mortgage Loan
Characteristics Loan Level
Detail Specially Serviced
Report Modified Loan Detail
Realized Loss Detail
Appraisal Reduction Detail
=================================================
==================================================================================================================
CONTACT INFORMATION
------------------------------------------------------------------------------------------------------------------
DEPOSITOR:
UNDERWRITER:
MASTER SERVICER:
SPECIAL SERVICER:
RATED BY:
==================================================================================================================
=====================================================================
---------------------------------------------------------------------
INFORMATION IS AVAILABLE FOR THIS ISSUE FROM THE FOLLOWING SOURCES
---------------------------------------------------------------------
LaSalle Web Site www.lnbabs.com
Servicer Website www.servicer.com
LaSalle Bulletin Board (714) 282-3990
LaSalle "ASAP" Fax Back System (714) 282-5518
LaSalle Factor Line (800) 246-5761
=====================================================================
====================================================================================================================================
03/02/2000 - 09:05 (MXXX-MXXX) (C) 2000 LaSalle Bank N.A.
</TABLE>
B-1
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
ABN AMRO GMAC COMMERCIAL MORTGAGE SECURITIES, INC. Statement Date: 04/17/2000
LaSalle Bank N.A. GMAC COMMERCIAL MORTGAGE CORPORATION, AS SERVICER Payment Date: 04/17/2000
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES Prior Payment: NA
WAC: SERIES 2000-C1 Next Payment: 05/15/2000
WA Life Term: Record Date: 03/31/2000
WA Amort Term: ABN AMRO ACCT: 12-3456-78-9
Current Index:
Next Index:
====================================================================================================================================
Original Opening Principal Principal Negative Closing Interest Interest Pass-Through
Class Face Value (1) Balance Payment Adj. or Loss Amortization Balance Payment Adjustment Rate (2)
CUSIP Per 1,000 Per 1,000 Per 1,000 Per 1,000 Per 1,000 Per 1,000 Per 1,000 Per 1,000 Next Rate (3)
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
====================================================================================================================================
Total P&I Payment 0.00
=========================
</TABLE>
Notes: (1) N denotes notional balance not included in total
(2) Interest Paid minus Interest Adjustment minus Deferred
Interest equals Accrual
(3) Estimated
03/02/2000 - 09:05 (MXXX-MXXX) (C) 2000 LaSalle Bank N.A.
B-2
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
ABN AMRO GMAC COMMERCIAL MORTGAGE SECURITIES, INC. Statement Date: 04/17/2000
LaSalle Bank N.A. GMAC COMMERCIAL MORTGAGE CORPORATION, AS SERVICER Payment Date: 04/17/2000
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES Prior Payment: NA
SERIES 2000-C1 Next Payment: 05/15/2000
Record Date: 03/31/2000
ABN AMRO ACCT: 12-3456-78-9
BOND INTEREST RECONCILIATION
<CAPTION>
====================================================================================================================================
Deductions Additions
---------------------------------------- ------------------------------------------
Accrual Accrued Add. Deferred & Prior Prepay- Other
------------ Certificate Allocable Trust Accretion Interest Int. Short- ment Interest
Class Method Days Interest PPIS Expense(1) Interest Losses falls Due Penalties Proceeds(2)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
-------------------------------------------------------------------------------------------
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
====================================================================================================================================
</TABLE>
===============================================================================
Remaining
Distributable Interest Outstanding Credit Support
Certificate Payment Interest ---------------------
Interest Amount Shortfalls Original Current(3)
- -------------------------------------------------------------------------------
- -----------------------------------------
0.00 0.00 0.00
===============================================================================
(1) Additional Trust Expenses are fees allocated directly to the bond resulting
in a deduction to accrued interest and not carried as an outstanding
shortfall.
(2) Other Interest Proceeds include default interest, PPIE, interest due on
outstanding losses, interest due on outstanding shortfalls and recoveries
of interest.
(3) Determined as follows: (A) the ending balance of all the classes less (B)
the sum of (i) the ending balance of the class and (ii) the ending balance
of all classes which are not subordinate to the class divided by (A).
03/02/2000 - 09:05 (MXXX-MXXX) (C) 2000 LaSalle Bank N.A.
B-3
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
ABN AMRO GMAC COMMERCIAL MORTGAGE SECURITIES, INC. Statement Date: 04/17/2000
LaSalle Bank N.A. GMAC COMMERCIAL MORTGAGE CORPORATION, AS SERVICER Payment Date: 04/17/2000
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES Prior Payment: NA
SERIES 2000-C1 Next Payment: 05/15/2000
Record Date: 03/31/2000
ABN AMRO ACCT: 12-3456-78-9
<CAPTION>
CASH RECONCILIATION SUMMARY
====================================================================================================================================
<S> <C> <C>
- ------------------------------------ -------------------------------------- -----------------------------------------------
INTEREST SUMMARY SERVICING FEE SUMMARY PRINCIPAL SUMMARY
- ----------------------------- ------------------------------ --------------------------------------
Current Scheduled Interest Current Servicing Fees SCHEDULED PRINCIPAL:
Less Deferred Interest Plus Fees Advanced for PPIS Current Scheduled Principal
Plus Advance Interest Less Reduction for PPIS Advanced Scheduled Principal
Plus Unscheduled Interest Plus Unscheduled Servicing Fees -----------------------------------------------
PPIS Reducing Scheduled Interest -------------------------------------- Scheduled Principal Distribution
Less Total Fees Paid To Servicer Total Servicing Fees Paid -----------------------------------------------
Plus Fees Advanced for PPIS -------------------------------------- UNSCHEDULED PRINCIPAL:
Less Fee Strips Paid by Servicer ----------------------
Less Misc. Fees & Expenses -------------------------------------- Curtailments
Less Non Recoverable Advances PPIS SUMMARY Prepayments in Full
- ------------------------------------ -------------------------------------- Liquidation Proceeds
Interest Due Trust Gross PPIS Repurchase Proceeds
- ------------------------------------ Reduced by PPIE Other Principal Proceeds
Less Trustee Fee Reduced by Shortfalls in Fees -----------------------------------------------
Less Fee Strips Paid by Trust Reduced by Other Amounts Unscheduled Principal Distribution
Less Misc. Fees Paid by Trust -------------------------------------- -----------------------------------------------
- ------------------------------------ PPIS Reducing Scheduled Interest Remittance Principal
Remittance Interest -------------------------------------- -----------------------------------------------
- ------------------------------------ PPIS Reducing Servicing Fee
-------------------------------------- ------------------------------------------------
PPIS Due Certificate Servicer Wire Amount
-------------------------------------- -----------------------------------------------
--------------------------------------------------------
POOL BALANCE SUMMARY
--------------------------------------------------------
Balance Count
--------------------------------------------------------
Beginning Pool
Scheduled Principal Distribution
Unscheduled Principal Distribution
Deferred Interest
Liquidations
Repurchases
Ending Pool
--------------------------------------------------------
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
ADVANCES
--------
PRIOR OUTSTANDING CURRENT PERIOD RECOVERED ENDING OUTSTANDING
Principal Interest Principal Interest Principal Interest Principal Interest
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------
====================================================================================================================================
</TABLE>
03/02/2000 - 09:05 (MXXX-MXXX) (C) 2000 LaSalle Bank N.A.
B-4
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
ABN AMRO GMAC COMMERCIAL MORTGAGE SECURITIES, INC. Statement Date: 04/17/2000
LaSalle Bank N.A. GMAC COMMERCIAL MORTGAGE CORPORATION, AS SERVICER Payment Date: 04/17/2000
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES Prior Payment: NA
SERIES 2000-C1 Next Payment: 05/15/2000
Record Date: 03/31/2000
ABN AMRO ACCT: 12-3456-78-9
<CAPTION>
ASSET BACKED FACTS ~15 MONTH HISTORICAL LOAN STATUS SUMMARY
============== ======================================================================= ============================================
Delinquency Aging Categories Special Event Categories(1)
Distribution Delinq 1 Month Delinq 2 Months Delinq 3+ Months Foreclosure REO Modifications Specially Serviced Bankruptcy
Date # Balance # Balance # Balance # Balance # Balance # Balance # Balance # Balance
- -------------- ----------------------------------------------------------------------- --------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
04/17/00
- -------------- ----------------------------------------------------------------------- --------------------------------------------
- -------------- ----------------------------------------------------------------------- --------------------------------------------
- -------------- ----------------------------------------------------------------------- --------------------------------------------
- -------------- ----------------------------------------------------------------------- --------------------------------------------
- -------------- ----------------------------------------------------------------------- --------------------------------------------
- -------------- ----------------------------------------------------------------------- --------------------------------------------
- -------------- ----------------------------------------------------------------------- --------------------------------------------
- -------------- ----------------------------------------------------------------------- --------------------------------------------
- -------------- ----------------------------------------------------------------------- --------------------------------------------
- -------------- ----------------------------------------------------------------------- --------------------------------------------
- -------------- ----------------------------------------------------------------------- --------------------------------------------
============== ======================================================================= ============================================
(1) Note: Modification, Specially Serviced & Bankruptcy Totals are Included in
the Appropriate Delinquency Aging Category
Page 5 of 19
</TABLE>
03/02/2000 - 09:05 (MXXX-MXXX)(C) 2000 LaSalle Bank N.A.
B-5
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
ABN AMRO GMAC COMMERCIAL MORTGAGE SECURITIES, INC. Statement Date: 04/17/2000
LaSalle Bank N.A. GMAC COMMERCIAL MORTGAGE CORPORATION, AS SERVICER Payment Date: 04/17/2000
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES Prior Payment: NA
SERIES 2000-C1 Next Payment: 05/15/2000
Record Date: 03/31/2000
ABN AMRO ACCT: 12-3456-78-9
<CAPTION>
ASSET BACKED FACTS ~15 MONTH HISTORICAL PAYOFF/LOSS SUMMARY
====================================================================================================================================
Distribution Ending Pool(1) Payoffs(2) Penalties Appraisal Reduct.(2) Liquidations(2) Realized Losses(2)
----------------------------------------------------------------------------------------------------------------------
Date # Balance # Balance # Amount # Balance # Balance # Amount
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
04/17/00
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
====================================================================================================================================
</TABLE>
=====================================
Remaining Term Curr Weighted Avg.
- -------------------------------------
Life Amort. Coupon Remit
- -------------------------------------
- -------------------------------------
- -------------------------------------
- -------------------------------------
- -------------------------------------
- -------------------------------------
- -------------------------------------
- -------------------------------------
- -------------------------------------
- -------------------------------------
- -------------------------------------
=====================================
(1) Percentage based on pool as of cutoff. (2) Percentage based on pool as
of beginning of period.
03/02/2000 - 09:05 (MXXX-MXXX) (C) 2000 LaSalle Bank N.A.
B-6
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
ABN AMRO GMAC COMMERCIAL MORTGAGE SECURITIES, INC. Statement Date: 04/17/2000
LaSalle Bank N.A. GMAC COMMERCIAL MORTGAGE CORPORATION, AS SERVICER Payment Date: 04/17/2000
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES Prior Payment: NA
SERIES 2000-C1 Next Payment: 05/15/2000
Record Date: 03/31/2000
ABN AMRO ACCT: 12-3456-78-9
<CAPTION>
HISTORICAL COLLATERAL LEVEL PREPAYMENT REPORT
============ =============================================== ===================== ================== ==============================
Remaining Term
Disclosure Distribution Initial Payoff Penalty Prepayment Maturity Property -------------- Note
Control # Date Balance Code Amount Amount Date Date Type State DSCR Life Amort. Rate
- ------------ ----------------------------------------------- --------------------- ------------------ ------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
============ =============================================== ===================== ================== ==============================
CUMULATIVE 0 0
==================
</TABLE>
03/02/2000 - 09:05 (MXXX-MXXX) (C) 2000 LaSalle Bank N.A.
B-7
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
ABN AMRO GMAC COMMERCIAL MORTGAGE SECURITIES, INC. Statement Date: 04/17/2000
LaSalle Bank N.A. GMAC COMMERCIAL MORTGAGE CORPORATION, AS SERVICER Payment Date: 04/17/2000
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES Prior Payment: NA
SERIES 2000-C1 Next Payment: 05/15/2000
Record Date: 03/31/2000
ABN AMRO ACCT: 12-3456-78-9
<CAPTION>
DELINQUENT LOAN DETAIL
====================================================================================================================================
Paid Outstanding Out. Property Special
Disclosure Doc Thru Current P&I P&I Protection Advance Servicer Foreclosure Bankruptcy REO
Control # Date Advance Advances** Advances Description(1) Transfer Date Date Date Date
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
====================================================================================================================================
A. P&I Advance - Loan in Grace Period
B. P&I Advance - Late Payment but less than one month delinq
1. P&I Advance - Loan delinquent 1 month
2. P&I Advance - Loan delinquent 2 months
3. P&I Advance - Loan delinquent 3 months or More
4. Matured Balloon/Assumed Scheduled Payment
====================================================================================================================================
</TABLE>
** Outstanding P&I Advances include the current period P&I Advance
03/02/2000 - 09:05 (MXXX-MXXX) (C) 2000 LaSalle Bank N.A.
B-8
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
ABN AMRO GMAC COMMERCIAL MORTGAGE SECURITIES, INC. Statement Date: 04/17/2000
LaSalle Bank N.A. GMAC COMMERCIAL MORTGAGE CORPORATION, AS SERVICER Payment Date: 04/17/2000
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES Prior Payment: NA
SERIES 2000-C1 Next Payment: 05/15/2000
Record Date: 03/31/2000
ABN AMRO ACCT: 12-3456-78-9
</TABLE>
MORTGAGE LOAN CHARACTERISTICS
DISTRIBUTION OF PRINCIPAL BALANCES
==========================================================================
Weighted Average
Current Scheduled # of Scheduled % of --------------------------
Balances Loans Balance Balance Term Coupon DSCR
==========================================================================
==========================================================================
0 0 0.00%
==========================================================================
Average Scheduled Balance
Maximum Scheduled Balance
Minimum Scheduled Balance
DISTRIBUTION OF MORTGAGE INTEREST RATES
==========================================================================
Weighted Average
Current Mortgage # of Scheduled % of ---------------------------
Interest Rate Loans Balance Balance Term Coupon DSCR
==========================================================================
0 0 0.00%
==========================================================================
Minimum Mortgage Interest Rate 10.0000%
Maximum Mortgage Interest Rate 10.0000%
DISTRIBUTION OF REMAINING TERM (BALLOON)
==========================================================================
Weighted Average
Balloon # of Scheduled % of -------------------------
Mortgage Loans Loans Balance Balance Term Coupon DSCR
==========================================================================
0 to 60
61 to 120
121 to 180
181 to 240
241 to 360
==========================================================================
0 0 0.00%
==========================================================================
Minimum Remaining Term 0
Maximum Remaining Term 0
DISTRIBUTION OF REMAINING TERM (FULLY AMORTIZING)
===========================================================================
Weighted Average
Fully Amortizing # of Scheduled % of ------------------------
Mortgage Loans Loans Balance Balance Term Coupon DSCR
===========================================================================
===========================================================================
0 0 0.00%
===========================================================================
Minimum Remaining Term
Maximum Remaining Term
03/02/2000 - 09:05 (MXXX-MXXX) (C) 2000 LaSalle Bank N.A.
B-9
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
ABN AMRO GMAC COMMERCIAL MORTGAGE SECURITIES, INC. Statement Date: 04/17/2000
LaSalle Bank N.A. GMAC COMMERCIAL MORTGAGE CORPORATION, AS SERVICER Payment Date: 04/17/2000
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES Prior Payment: NA
SERIES 2000-C1 Next Payment: 05/15/2000
Record Date: 03/31/2000
ABN AMRO ACCT: 12-3456-78-9
</TABLE>
MORTGAGE LOAN CHARACTERISTICS
DISTRIBUTION OF DSCR (CURRENT)
================================================================================
Debt Service # of Scheduled % of
Coverage Ratio Loans Balance Balance WAMM WAC DSCR
================================================================================
================================================================================
0 0 0.00%
================================================================================
Maximum DSCR
Minimum DSCR
DISTRIBUTION OF DSCR (CUTOFF)
================================================================================
Debt Service # of Scheduled % of
Coverage Ratio Loans Balance Balance WAMM WAC DSCR
================================================================================
================================================================================
0 0 0.00%
================================================================================
Maximum DSCR 0.00
Minimum DSCR 0.00
GEOGRAPHIC DISTRIBUTION
================================================================================
# of Scheduled % of
State Loans Balance Balance WAMM WAC DSCR
================================================================================
================================================================================
0 0.00%
================================================================================
03/02/2000 - 09:05 (MXXX-MXXX) (C) 2000 LaSalle Bank N.A.
B-10
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
ABN AMRO GMAC COMMERCIAL MORTGAGE SECURITIES, INC. Statement Date: 04/17/2000
LaSalle Bank N.A. GMAC COMMERCIAL MORTGAGE CORPORATION, AS SERVICER Payment Date: 04/17/2000
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES Prior Payment: NA
SERIES 2000-C1 Next Payment: 05/15/2000
Record Date: 03/31/2000
ABN AMRO ACCT: 12-3456-78-9
</TABLE>
MORTGAGE LOAN CHARACTERISTICS
DISTRIBUTION OF PROPERTY TYPES
================================================================================
# of Scheduled % of
Property Types Loans Balance Balance WAMM WAC DSCR
================================================================================
================================================================================
0 0 0.00%
================================================================================
DISTRIBUTION OF LOAN SEASONING
================================================================================
# of Scheduled % of
Number of Years Loans Balance Balance WAMM WAC DSCR
================================================================================
================================================================================
0 0 0.00%
================================================================================
DISTRIBUTION OF AMORTIZATION TYPE
================================================================================
Current Scheduled # of Scheduled % of
Balances Loans Balance Balance WAMM WAC DSCR
================================================================================
================================================================================
================================================================================
DISTRIBUTION OF YEAR LOANS MATURING
================================================================================
# of Scheduled % of
Year Loans Balance Balance WAMM WAC DSCR
================================================================================
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009 & Longer
================================================================================
0 0 0.00%
================================================================================
(1) For adjustable mortgage loans where a minimum rate does not exist the gross
margin was used.
03/02/2000 - 09:05 (MXXX-MXXX)(C) 2000 LaSalle Bank N.A.
B-11
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
ABN AMRO GMAC COMMERCIAL MORTGAGE SECURITIES, INC. Statement Date: 04/17/2000
LaSalle Bank N.A. GMAC COMMERCIAL MORTGAGE CORPORATION, AS SERVICER Payment Date: 04/17/2000
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES Prior Payment: NA
SERIES 2000-C1 Next Payment: 05/15/2000
Record Date: 03/31/2000
ABN AMRO ACCT: 12-3456-78-9
<CAPTION>
LOAN LEVEL DETAIL
====================================================================================================================================
Operating Ending Spec. Loan
Disclosure Property Statement Maturity Principal Note Scheduled Mod. Serv ASER Status
Control # Grp Type State DSCR NOI Date Date Balance Rate P&I Flag Flag Flag Code(1)
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
====================================================================================================================================
W/Avg 0.00 0 0 0
====================================================================================================================================
</TABLE>
Prepayment
==================================
Amount Penalty Date
==================================
==================================
0 0
==================================
================================================================================
* NOI and DSCR, if available and reportable under the terms of the trust
agreement, are based on information obtained from the related borrower, and
no other party to the agreement shall be held liable for the accuracy or
methodology used to determine such figures.
- --------------------------------------------------------------------------------
(1) Legend:
A. P&I Adv - in Grace Period
B. P&I Adv - less thab one month delinq
1. P&I Adv - delinquent 1 month
2. P&I Adv - delinquent 2 months
3. P&I Adv - delinquent 3+ months
4. Mat. Balloon/Assumed P&I
5. Prepaid in Full
6. Specially Serviced
7. Foreclosure
8. Bankruptcy
9. REO
10. DPO
11. Modification
================================================================================
03/02/2000 - 09:05 (MXXX-MXXX) (C) 2000 LaSalle Bank N.A.
B-12
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
ABN AMRO GMAC COMMERCIAL MORTGAGE SECURITIES, INC. Statement Date: 04/17/2000
LaSalle Bank N.A. GMAC COMMERCIAL MORTGAGE CORPORATION, AS SERVICER Payment Date: 04/17/2000
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES Prior Payment: NA
SERIES 2000-C1 Next Payment: 05/15/2000
Record Date: 03/31/2000
ABN AMRO ACCT: 12-3456-78-9
<CAPTION>
SPECIALLY SERVICED (PART I) ~ LOAN DETAIL
====================================================================================================================================
Disclosure Transfer Balance Note Maturity Remaining Term Property NOI
Control # Date Scheduled Actual Rate Date Life Amort. Type State NOI DSCR Date
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
====================================================================================================================================
</TABLE>
03/02/2000 - 09:05 (MXXX-MXXX) (C) 2000 LaSalle Bank N.A.
B-13
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
ABN AMRO GMAC COMMERCIAL MORTGAGE SECURITIES, INC. Statement Date: 04/17/2000
LaSalle Bank N.A. GMAC COMMERCIAL MORTGAGE CORPORATION, AS SERVICER Payment Date: 04/17/2000
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES Prior Payment: NA
SERIES 2000-C1 Next Payment: 05/15/2000
Record Date: 03/31/2000
ABN AMRO ACCT: 12-3456-78-9
<CAPTION>
SPECIALLY SERVICED LOAN DETAIL (PART II) ~ SERVICER COMMENTS
====================================================================================================================================
Disclosure Resolution
Control # Strategy Comments
====================================================================================================================================
<S> <C> <C>
====================================================================================================================================
</TABLE>
03/02/2000 - 09:05
(MXXX-MXXX) (C) 2000 LaSalle Bank N.A.
B-14
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
ABN AMRO GMAC COMMERCIAL MORTGAGE SECURITIES, INC. Statement Date: 04/17/2000
LaSalle Bank N.A. GMAC COMMERCIAL MORTGAGE CORPORATION, AS SERVICER Payment Date: 04/17/2000
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES Prior Payment: NA
SERIES 2000-C1 Next Payment: 05/15/2000
Record Date: 03/31/2000
ABN AMRO ACCT: 12-3456-78-9
<CAPTION>
MODIFIED LOAN DETAIL
====================================================================================================================================
Disclosure Modification Modification Modification
Control # Date Code Description
====================================================================================================================================
<S> <C> <C> <C>
====================================================================================================================================
</TABLE>
03/02/2000 - 09:05 (MXXX-MXXX) (C) 2000 LaSalle Bank N.A.
B-15
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
ABN AMRO GMAC COMMERCIAL MORTGAGE SECURITIES, INC. Statement Date: 04/17/2000
LaSalle Bank N.A. GMAC COMMERCIAL MORTGAGE CORPORATION, AS SERVICER Payment Date: 04/17/2000
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES Prior Payment: NA
SERIES 2000-C1 Next Payment: 05/15/2000
Record Date: 03/31/2000
ABN AMRO ACCT: 12-3456-78-9
<CAPTION>
REALIZED LOSS DETAIL
====================================================================================================================================
Beginning Gross Proceeds Aggregate Net Net Proceeds
Distribution Disclosure Appraisal Appraisal Scheduled Gross as a % of Liquidation Liquidation as a % of Realized
Period Control # Date Value Balance Proceeds Sched Principal Expenses * Proceeds Sched. Balance Loss
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
CURRENT TOTAL 0.00 0.00 0.00 0.00 0.00
CUMULATIVE 0.00 0.00 0.00 0.00 0.00
====================================================================================================================================
</TABLE>
* Aggregate liquidation expenses also include outstanding P&I advances and
unpaid servicing fees, unpaid trustee fees, etc..
03/02/2000 - 09:05
(MXXX-MXXX) (C) 2000 LaSalle Bank N.A.
B-16
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
ABN AMRO GMAC COMMERCIAL MORTGAGE SECURITIES, INC. Statement Date: 04/17/2000
LaSalle Bank N.A. GMAC COMMERCIAL MORTGAGE CORPORATION, AS SERVICER Payment Date: 04/17/2000
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES Prior Payment: NA
SERIES 2000-C1 Next Payment: 05/15/2000
Record Date: 03/31/2000
ABN AMRO ACCT: 12-3456-78-9
<CAPTION>
APPRAISAL REDUCTION DETAIL
======================= ====================== ================================== ======================= ======= ==================
Remaining Term Appraisal
Disclosure Appraisal Scheduled Reduction Note Maturity ---------------- Property ------------------
Control # Red. Date Balance Amount Rate Date Life Amort. Type State DSCR Value Date
======================= ====================== ================================== ======================= ======= ==================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
======================= ====================== ================================== ======================= ======= ==================
</TABLE>
03/02/2000 - 09:05 (MXXX-MXXX) (C) 2000 LaSalle Bank N.A.
B-17
<PAGE>
<TABLE>
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
MORTGAGE PASS-THROUGH CERTIFICATES SERIES 2000-C1
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>
30 DAYS DELINQUENT
60 DAYS DELINQUENT
90 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, TBD - To Be Determined etc...)
It is possible to combine the status codes if the loan is going in more than one direction. (i.e. FCL/Mod, BK/Mod, BK/FCL/DPO)
**App - Appraisal, BPO - Broker opinion, Int. - Internal Value
- ------------------------------------------------------------------------------------------------------------------------------------
*** How to determine the cap rate is agreed upon by Underwriter and special servicer - to be provided by a third party.
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- -----------------------------------------------
LTM
MATURITY NOI LTM LTM TRANSFER
DATE DATE NOI DSCR DATE COMMENTS
- -----------------------------------------------
<S> <C> <C> <C> <C> <C>
- -----------------------------------------------
- -----------------------------------------------
- -----------------------------------------------
</TABLE>
B-18
<PAGE>
<TABLE>
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
MORTGAGE PASS-THROUGH CERTIFICATES SERIES 2000-C1
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>
TOTAL FOR ALL LOANS:
TOTAL FOR LOANS IN CURRENT MONTH:
# OF LOANS $BALANCE
Modifications: $0.00
Maturity Date Extensions: 0 $0.00
-----------------------------------
Total: 0 $0.00
* 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) COMMENTS
- -----------------------------------------------------------
<C> <C> <C> <C> <C>
- -----------------------------------------------------------
</TABLE>
B-19
<PAGE>
<TABLE>
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
MORTGAGE PASS-THROUGH CERTIFICATES SERIES 2000-C1
HISTORICAL LOSS ESTIMATE REPORT (REO SOLD OR DISCOUNTED PAYOFF)
AS OF ____________________
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
% LATEST
RECOVERED APPRAISAL EFFECTIVE NET AMT. TOTAL
PROSPECTUS SHORT PROPERTY FROM OR BROKER'S DATE OF SALES RECEIVED SCHEDULED P&I TOTAL
ID NAME 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>
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL ALL LOANS: 0% $ - $ - $ - $ - $ - $ -
CURRENT MONTH ONLY:
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL CURRENT MONTH: $ - $ - $ - $ - $ - $ -
<CAPTION>
- ---------------------------------------------------------------------------
DATE
ACTUAL DATE MINOR TOTAL LOSS
LOSSES LOSS MINOR ADJ. LOSS % OF
SERVICING NET PASSED PASSED ADJ. TO PASSED WITH SCHEDULED
FEES PROCEEDS THRU THRU TRUST THRU ADJUSTMENT BALANCE
- ---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------
$ - $ - $ -
- ---------------------------------------------------------------------------
$ - $ - $ -
- ---------------------------------------------------------------------------
$ - $ - $ -
- ---------------------------------------------------------------------------
$ - $ - $ -
- ---------------------------------------------------------------------------
$ - $ - $ - $ - $ - 0%
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
$ - $ - $ - $ -
</TABLE>
B-20
<PAGE>
<TABLE>
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
MORTGAGE PASS-THROUGH CERTIFICATES SERIES 2000-C1
REO STATUS REPORT
AS OF ____________________
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
SHORT TOTAL OTHER
NAME SQ FT PAID SCHEDULED P&I TOTAL ADVANCES CURRENT CAP
PROSPECTUS (WHEN PROPERTY OR THRU LOAN ADVANCES EXPENSES (TAXES TOTAL MONTHLY RATE
ID APPROPRIATE) TYPE CITY STATE UNITS DATE BALANCE TO DATE TO DATE & ESCROW) EXPOSURE P&I ASSIGN
- ----------------------------------------------------------------------------------------------------------------------------------
<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
- ----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
VALUE APPRAISAL TOTAL
USING BPO OR LOSS USING ESTIMATED APPRAISAL REO PENDING
VALUATION NOI & INTERNAL 92% APPR. RECOVERY REDUCTION TRANSFER ACQUISITION RESOLUTION
DATE CAP RATE VALUE** OR BPO (F) % REALIZED DATE DATE DATE COMMENTS
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
B-21
<PAGE>
<TABLE>
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
MORTGAGE PASS-THROUGH CERTIFICATES SERIES 2000-C1
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>
Total: $
*LTM - Last 12 months either trailing or last annual
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
B-22
<PAGE>
<TABLE>
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
MORTGAGE PASS-THROUGH CERTIFICATES SERIES 2000-C1
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 $ (1) Info as % Total $ (1)
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
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:
(1) DSCR should match to Operating Statement and is calculated in accordance with the Pooling and Servicing Agreement.
(2) Net change should compare the latest year to the underwriting year
- -----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- -------------------------------------------------------------------------------------
PRECEDING ANNUAL OPERATING TRAILING FINANCIAL
INFORMATION INFORMATION NET CHANGE
- -------------------------------------------------------------------------------------
AS OF _______ NORMALIZED MONTH REPORTED ACTUAL PRECEDING & BASIS
Financial FS FS %
Info as % Total $ (1) Start End Total $ % % Total (1)
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-23
<PAGE>
<TABLE>
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
SERIES 2000-C1
OPERATING STATEMENT ANALYSIS
AS OF ______________________
<CAPTION>
PROPERTY OVERVIEW
<S> <C> <C> <C> <C> <C> <C> <C>
LB Control Number
Current Balance/Paid to Date
Property Name
Property Type
Property Address, City, State
Net Rentable Square Feet
Year Built/Year Renovated
Year of Operations UNDERWRITING 199_ 199_ 199_ TRAILING
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. -------------------------------------------------------------------------------------
Period Ended Underwriting 199_ 199_ 199_ 9_ Trailing** 199_-Base 199_-199_
Statement Classification Base Line Normalized Normalized Normalized as of / /9_ Variance Variance
Rental Income (Category 1) -------------------------------------------------------------------------------------
Rental Income (Category 2)
Rental Income (Category 3)
Pass Through/Escalations
Other Income
EFFECTIVE GROSS INCOME $0.00 $0.00 $0.00 $0.00 $0.00 % %
-------------------------------------------------------------------------------------
Normalized - Full year Financial statements that have been reviewed by the
underwriter or Servicer
-------------------------------------------------------------------------------------
** Servicer will not be expected to "Normalize" these YTD numbers.
-------------------------------------------------------------------------------------
OPERATING EXPENSES:
Real Estate Taxes
Property Insurance
Utilities
General & Administration
Repairs and Maintenance
Management Fees
Payroll & Benefits Expense
Advertising & Marketing
Professional Fees
Other Expenses
Ground Rent
TOTAL OPERATING EXPENSES $0.00 $0.00 $0.00 $0.00 $0.00 % %
OPERATING EXPENSE RATIO
NET OPERATING INCOME $0.00 $0.00 $0.00 $0.00 $0.00
Leasing Commissions
Tenant Improvements
Replacement Reserve
TOTAL CAPITAL ITEMS $0.00 $0.00 $0.00 $0.00 $0.00 $0.00
N.O.I. AFTER CAPITAL ITEMS $0.00 $0.00 $0.00 $0.00 $0.00
DEBT SERVICE (PER SERVICER) $0.00 $0.00 $0.00 $0.00 $0.00
CASH FLOW AFTER DEBT SERVICE $0.00 $0.00 $0.00 $0.00 $0.00
DSCR: (NOI/Debt Service)
DSCR: (AFTER RESERVES\CAP EXP.)
SOURCE OF FINANCIAL DATA:
(ie. operating statements, financial statements, tax return, other)
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 needs to be broken down, differently whenever possible for each property type as follows: Retail: 1) Base Rent
2)Percentage rents on cashflow
Hotel: 1)Room Revenue 2)Food/Beverage Nursing Home: 1)Private 2) Medicaid 3) Medicare
INCOME: COMMENT
EXPENSE: COMMENT
CAPITAL ITEMS: COMMENT
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
B-24
<PAGE>
<TABLE>
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
SERIES 2000-C1
NOI ADJUSTMENT WORKSHEET
FOR FISCAL YEAR ENDED ______________________
<CAPTION>
PROPERTY OVERVIEW
<S> <C> <C> <C> <C> <C> <C> <C>
LB Control Number
Current Balance/Paid to Date
Property Name
Property Type
Property Address, City, State
Net Rentable Square Feet
Year Built/Year Renovated
Year of Operations UNDERWRITING 199_ 199_ 199_ TRAILING
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. -------------------------------------------------------------------------------------
Period Ended Underwriting 199_ 199_ 199_ 9_ Trailing** 199_-Base 199_-199_
Statement Classification Base Line Normalized Normalized Normalized as of / /9_ Variance Variance
Rental Income (Category 1) -------------------------------------------------------------------------------------
Rental Income (Category 2)
Rental Income (Category 3)
Pass Through/Escalations
Other Income
EFFECTIVE GROSS INCOME $0.00 $0.00 $0.00 $0.00 $0.00 % %
-------------------------------------------------------------------------------------
Normalized - Full year Financial statements that have been reviewed by the
underwriter or Servicer
-------------------------------------------------------------------------------------
** Servicer will not be expected to "Normalize" these YTD numbers.
-------------------------------------------------------------------------------------
OPERATING EXPENSES:
Real Estate Taxes
Property Insurance
Utilities
General & Administration
Repairs and Maintenance
Management Fees
Payroll & Benefits Expense
Advertising & Marketing
Professional Fees
Other Expenses
Ground Rent
TOTAL OPERATING EXPENSES $0.00 $0.00 $0.00 $0.00 $0.00 % %
OPERATING EXPENSE RATIO
NET OPERATING INCOME $0.00 $0.00 $0.00 $0.00 $0.00
Leasing Commissions
Tenant Improvements
Replacement Reserve
TOTAL CAPITAL ITEMS $0.00 $0.00 $0.00 $0.00 $0.00 $0.00
N.O.I. AFTER CAPITAL ITEMS $0.00 $0.00 $0.00 $0.00 $0.00
DEBT SERVICE (PER SERVICER) $0.00 $0.00 $0.00 $0.00 $0.00
CASH FLOW AFTER DEBT SERVICE $0.00 $0.00 $0.00 $0.00 $0.00
DSCR: (NOI/Debt Service)
DSCR: (AFTER RESERVES\CAP EXP.)
SOURCE OF FINANCIAL DATA:
(ie. operating statements, financial statements, tax return, other)
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 needs to be broken down, differently whenever possible for each property type as follows: Retail: 1) Base Rent
2)Percentage rents on cashflow
Hotel: 1)Room Revenue 2)Food/Beverage Nursing Home: 1)Private 2) Medicaid 3) Medicare
INCOME: COMMENT
EXPENSE: COMMENT
CAPITAL ITEMS: COMMENT
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
B-25
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<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.
MARCH 3, 2000
STRUCTURAL AND COLLATERAL TERM SHEET
$802,144,000 (APPROXIMATE BALANCE)
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 2000-C1
APPROXIMATE SECURITIES STRUCTURE:
- ---------------------------------
<TABLE>
<CAPTION>
APPROXIMATE EXPECTED CREDIT EXPECTED EXPECTED
EXPECTED RATING FACE/NOTIONAL SUPPORT WEIGHTED AVERAGE PAYMENT
CLASS (a) MOODY'S/FITCH AMOUNT (MM) (% OF UPB) LIFE (YEARS) (b) WINDOW
- ---------------------------------------------------------------------------------------------------------
PUBLICLY OFFERED CLASSES
<S> <C> <C> <C> <C> <C>
X (c) Aaa/AAA $886.4 N/A 9.12 4/00 - 1/15
A1 Aaa/AAA 125.9 24.75 5.71 4/00 - 5/09
A2 Aaa/AAA 541.1 24.75 9.57 5/09 - 12/09
B Aa2/AA 37.7 20.50 9.81 12/09 - 1/10
C A2/A 42.1 15.75 9.83 1/10 - 1/10
D A3/A- 8.9 14.75 9.83 1/10 - 1/10
E Baa2/BBB 31.0 11.25 9.83 1/10 - 1/10
F Baa3/BBB- 15.5 9.50 9.83 1/10 - 1/10
PRIVATELY OFFERED CLASSES (d)
- ---------------------------------------------------------------------------------------------------------
G
H
J
K
L
M
N
TOTAL SECURITIES: $886.4
- ---------------------------------------------------------------------------------------------------------
</TABLE>
(a) Class A1 is expected to have a fixed pass-through rate. Classes A2 through
E are expected to have a fixed pass-through rate subject to a cap equal to
the weighted average Net Mortgage Pass-Through Rate. Class F 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) Notional amount on interest only class. (d) Not offered hereby.
KEY FEATURES:
- -------------
Lead Managers: Goldman, Sachs & Co.
Deutsche Banc Alex. Brown
Selling Group: Newman and Associates, Inc.
Mortgage Loan Sellers: GMAC Commercial Mortgage
Corporation (45.85%)
Archon Financial, L.P. (GSMC) (34.55%)
German American Capital Corporation (DB) (19.60%)
Master Servicer: GMAC Commercial Mortgage Corporation
Special Servicer: GMAC Commercial Mortgage Corporation
Trustee: LaSalle Bank National Association
Launch: March 8, 2000
Pricing: March 9, 2000
Closing: March 16, 2000
Cut-Off Date: March 1st, 5th and 10th
Distribution Date: 15th of each month, or following business day
(commencing April 17, 2000)
Payment Delay: 14 days
ERISA Eligible: Classes A1, A2 and X are expected to be ERISA
eligible subject to certain conditions for
eligibility.
SMMEA Eligible: Classes A1, A2, B and X are expected to be SMMEA
securities upon issuance.
Structure: Sequential pay
Day Count: 30/360
Tax Treatment: REMIC
Rated Final Distribution TBD
Date:
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:
- -----------------
Initial Pool Balance: $886,350,652
Number of Mortgage Loans: 137
Number of Mortgaged Properties: 179
Average Cut-Off Date Balance: $6,469,713
Weighted Average Current Mortgage Rate: 8.338%
Weighted Average U/W DSCR (a): 1.36x
Weighted Average Cut-Off Date LTV Ratio (a): 69.20%
Weighted Average Remaining Term to Maturity (months): 115.0 months
Weighted Average Remaining Amortization Term (months): 341.9 months
Weighted Average Seasoning (months): 4.41 months
Balloon Loans as % of Total (b): 99.64%
Single Largest Loan as % of Total: 5.47%
Five Largest Loans as % of Total: 21.60%
Ten Largest Loans as % of Total: 32.02%
(a) All DSCR and LTV information presented herein is generally calculated as
though any related earnout reserve had been applied to reduce or defease
the primary balance of the mortgage loan.
(b) Includes 11 ARD loans totaling $124.1 mm and 14.0% of the pool Cut-Off date
balance.
TEN LARGEST LOANS OR SPONSORS
- -----------------------------
<TABLE>
<CAPTION>
CURRENT % BY
LOAN BALANCE UPB LTV DSCR PROPERTY TYPE
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
80 Lafayette Street $48,443,653 5.47% 66.27% 1.29x Multifamily
Equity Inns Portfolio 48,129,553 5.43 48.95 1.90 Lodging
First Union Tower 36,959,753 4.17 67.82 1.34 Office
World Savings Center 29,425,174 3.32 61.95 1.47 Office
Freeman Webb Portfolio 28,500,000 3.22 78.49 1.20 Multifamily
Minnesota Industrial Venture (a) 26,942,535 3.04 78.65 1.25 Industrial/Office
Vista Way Apartments 18,904,581 2.13 79.77 1.20 Multifamily
Citation Club on Palmer Ranch 17,050,000 1.92 74.13 1.21 Multifamily
Maverick Creek Villas 14,871,558 1.68 70.15 1.24 Multifamily
Boardwalk Shopping Center 14,600,000 1.65 69.86 1.43 Retail
---------- ---- ----- ----
TOTAL/WTD. AVG. $283,826,807 32.02% 67.25% 1.40X
- -------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
(a) Includes $22.97 million Minnesota Industrial Venture and $3.97 million
related sponsor loan.
SELECTED LOAN DATA:
- -------------------
NUMBER OF CUT-OFF DATE BALANCE
GEOGRAPHIC MORTGAGED ---------------------------------------
DISTRIBUTION PROPERTIES (MM) % BY UPB WTD. AVG. DSCR
- -----------------------------------------------------------------------
New York 17 $112.1 12.65% 1.36x
California 13 104.2 11.76 1.38
Texas 22 90.9 10.25 1.37
Florida 15 82.0 9.26 1.26
Minnesota 18 52.2 5.89 1.28
Other (a) 94 444.9 50.19 1.38
---- ------- ------- ----
TOTAL/WTD. AVG. 179 $886.4 100.00% 1.36X
- -----------------------------------------------------------------------
NUMBER OF CUT-OFF DATE BALANCE
MORTGAGED ------------------------------------
PROPERTY TYPE PROPERTIES (MM) % BY UPB WTD. AVG. DSCR
- --------------------------------------------------------------------
Multifamily 40 $290.9 32.82% 1.31x
Office 35 213.5 24.08 1.38
Retail 37 158.3 17.86 1.31
Industrial 35 132.1 14.90 1.30
Lodging 23 61.2 6.90 1.84
Mixed Use 4 20.3 2.29 1.28
Mobile Home Park 2 5.1 0.58 1.21
Special Purpose 3 5.0 0.56 1.27
---- ------- ------- ----
TOTAL/WTD. AVG. 179 $886.4 100.00% 1.36X
- --------------------------------------------------------------------
NUMBER OF CUT-OFF DATE BALANCE
PREPAYMENT MORTGAGED ------------------------------------
RESTRICTIONS LOANS (MM) % BY UPB WTD. AVG. DSCR
- ----------------------------------------------------------------------------
Lockout/Defeasance 135 $884.9 99.84% 1.36x
Lockout/Greater YM or 1% 1 1.0 0.11 1.17
Lockout/Declining Fee 1 0.4 0.05 1.32
--- ------ ------ ----
TOTAL/WTD. AVG. 137 $886.4 100.00% 1.36X
- ----------------------------------------------------------------------------
(a) Includes 28 states and the U.S Virgin Islands.
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.
C-1
<PAGE>
ALL INFORMATION IN THIS TERM SHEET, WHETHER REGARDING THE ASSETS BACKING ANY
SECURITIES DISCUSSED HEREIN OR OTHERWISE, WILL BE SUPERSEDED BY THE INFORMATION
CONTAINED IN ANY FINAL PROSPECTUS FOR ANY SECURITIES ACTUALLY SOLD TO YOU.
- --------------------------------------------------------------------------------
COLLATERAL TERM SHEET
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
STRUCTURAL OVERVIEW
- --------------------------------------------------------------------------------
o 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 and N certificates.
-- In case the principal balance of the Class N, M, L, K, J, H, G, F, E,
D, C, 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.
o 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.
o 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.
o All Classes will pay interest on a 30/360 basis.
o Principal Losses will be allocated in reverse alphabetical order to Class
N, M, L, K, J, H, G, F, E, D, C, B, and then pro rata to Class A1 and A2.
o The Master Servicer will cover net prepayment interest shortfalls, provided
that with respect to any loans with due dates on or preceding the related
determination date the Master Servicer will only cover net prepayment
interest shortfalls up to the Master Servicing fee 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.
o Shortfalls resulting from Master Servicer and Special Servicer
modifications, Special Servicer compensation or other extraordinary trust
fund expenses will be allocated in reverse alphabetical order to classes of
outstanding regular Certificates other than to the Class X.
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.
C-2
<PAGE>
ALL INFORMATION IN THIS TERM SHEET, WHETHER REGARDING THE ASSETS BACKING ANY
SECURITIES DISCUSSED HEREIN OR OTHERWISE, WILL BE SUPERSEDED BY THE INFORMATION
CONTAINED IN ANY FINAL PROSPECTUS FOR ANY SECURITIES ACTUALLY SOLD TO YOU.
- --------------------------------------------------------------------------------
COLLATERAL TERM SHEET
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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:
o 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)
------------------------------------------------------------------
o The remaining percentage of such prepayment premiums and yield
maintenance amounts will be allocated to the Class X Certificates.
o 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.
C-3
<PAGE>
ALL INFORMATION IN THIS TERM SHEET, WHETHER REGARDING THE ASSETS BACKING ANY
SECURITIES DISCUSSED HEREIN OR OTHERWISE, WILL BE SUPERSEDED BY THE INFORMATION
CONTAINED IN ANY FINAL PROSPECTUS FOR ANY SECURITIES ACTUALLY SOLD TO YOU.
- --------------------------------------------------------------------------------
COLLATERAL TERM SHEET
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PREPAYMENT PROFILE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PREPAYMENT RESTRICTION ASSUMING NO PREPAYMENT OF PRINCIPAL (A) (B)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
PREPAYMENT MARCH MARCH MARCH MARCH MARCH MARCH MARCH MARCH
RESTRICTIONS 2000 2001 2002 2003 2004 2005 2006 2007
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Locked out 100.00% 100.00% 100.00% 6.88% 0.14% 0.09% 0.09% 0.08%
Defeasance 0.00 0.00 0.00 93.12 99.86 99.86 99.86 99.87
Yield Maintenance 0.00 0.00 0.00 0.00 0.00 0.05 0.05 0.05
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 0.00
- ------------------------------------------------------------------------------------------------------------------------------------
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) 886.35 879.88 872.61 864.46 855.80 831.58 821.11 803.74
% OF INITIAL UPB 100.00% 99.27% 98.45% 97.53% 96.55% 93.82 92.64 90.68
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
PREPAYMENT MARCH MARCH MARCH MARCH MARCH MARCH MARCH
RESTRICTIONS 2008 2009 2010 2011 2012 2013 2014
- ------------------------------------------------------------------------------------------------------------------------------------
Locked out 0.08% 0.07% 0.00% 0.00% 0.00% 0.00% 0.00%
Defeasance 99.88 98.65 98.59 70.07 70.75 72.25 77.99
Yield Maintenance 0.05 0.05 0.00 0.00 0.00 0.00 0.00
3.00 - 3.99% 0.00 0.00 1.41 0.00 0.00 0.00 0.00
2.00 - 2.99% 0.00 0.00 0.00 29.93 0.00 0.00 0.00
1.00 - 1.99% 0.00 0.00 0.00 0.00 29.25 27.75 0.00
- ------------------------------------------------------------------------------------------------------------------------------------
Open 0.00 1.23 0.00 0.00 0.00 0.00 22.01
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
UPB ($MM) 791.61 763.60 32.06 1.22 0.93 0.62 0.27
% OF INITIAL UPB 89.31 86.15 3.62 0.14 0.11 0.07% 0.03%
- ------------------------------------------------------------------------------------------------------------------------------------
</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.
C-4
<PAGE>
ALL INFORMATION IN THIS TERM SHEET, WHETHER REGARDING THE ASSETS BACKING ANY
SECURITIES DISCUSSED HEREIN OR OTHERWISE, WILL BE SUPERSEDED BY THE INFORMATION
CONTAINED IN ANY FINAL PROSPECTUS FOR ANY SECURITIES ACTUALLY SOLD TO YOU.
- --------------------------------------------------------------------------------
COLLATERAL TERM SHEET
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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 5.71 5.70 5.70 5.69 5.65
A2 9.57 9.56 9.55 9.53 9.37
B 9.81 9.79 9.76 9.75 9.58
C 9.83 9.83 9.83 9.81 9.61
D 9.83 9.83 9.83 9.83 9.66
E 9.83 9.83 9.83 9.83 9.66
F 9.83 9.83 9.83 9.83 9.73
- --------------------------------------------------------------------------------
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.
C-5
<PAGE>
ALL INFORMATION IN THIS TERM SHEET, WHETHER REGARDING THE ASSETS BACKING ANY
SECURITIES DISCUSSED HEREIN OR OTHERWISE, WILL BE SUPERSEDED BY THE INFORMATION
CONTAINED IN ANY FINAL PROSPECTUS FOR ANY SECURITIES ACTUALLY SOLD TO YOU.
- --------------------------------------------------------------------------------
COLLATERAL TERM SHEET
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
DISTRIBUTION OF CUT-OFF DATE BALANCES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
WEIGHTED
PERCENTAGE AVERAGE WEIGHTED
OF WEIGHTED REMAINING AVERAGE
NUMBER OF AGGREGATE WEIGHTED AVERAGE TERM TO CUT-OFF
RANGE OF CUT-OFF DATE MORTGAGE CUT-OFF DATE CUT-OFF AVERAGE CUT-OFF AVERAGE MORTGAGE MATURITY DATE LTV
BALANCES LOANS BALANCE DATE BALANCE DATE BALANCE DSCR RATE (MOS) RATIO
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$434,534 - 499,999 1 $434,534 0.05% $434,534 1.32x 9.625% 113.0 62.08%
500,000 - 999,999 2 1,930,298 0.22 965,149 1.30 8.956 145.6 58.97
1,000,000 - 1,999,999 17 26,389,365 2.98 1,552,316 1.37 8.547 117.1 67.06
2,000,000 - 2,999,999 24 59,172,886 6.68 2,465,537 1.33 8.404 118.7 72.32
3,000,000 - 3,999,999 21 73,894,278 8.34 3,518,775 1.38 8.421 116.4 68.53
4,000,000 - 4,999,999 18 81,501,713 9.20 4,527,873 1.30 8.361 114.7 70.82
5,000,000 - 5,999,999 8 43,125,968 4.87 5,390,746 1.38 8.098 115.2 67.88
6,000,000 - 6,999,999 9 58,252,364 6.57 6,472,485 1.52 8.600 111.7 67.64
7,000,000 - 7,999,999 3 21,388,711 2.41 7,129,570 1.30 8.623 116.3 72.18
8,000,000 - 8,999,999 11 92,387,044 10.42 8,398,822 1.33 8.223 115.2 71.19
9,000,000 - 9,999,999 2 19,232,254 2.17 9,616,127 1.32 8.474 114.0 71.24
10,000,000 - 11,999,999 7 78,791,259 8.89 11,255,894 1.33 8.354 114.3 68.43
12,000,000 - 13,999,999 4 51,898,287 5.86 12,974,572 1.23 8.456 117.0 74.43
14,000,000 - 16,999,999 2 29,471,558 3.33 14,735,779 1.33 8.118 88.8 70.01
17,000,000 - 19,999,999 2 35,954,581 4.06 17,977,290 1.20 7.919 115.5 77.10
20,000,000 - 24,999,999 1 22,972,361 2.59 22,972,361 1.25 8.550 118.0 78.94
$25,000,000 - 49,999,999 5 189,553,191 21.39 37,910,638 1.46 8.271 117.1 63.58
--- ------------ ------ ---------- ---- ----- ----- -----
TOTAL/WTD. AVG. 137 $886,350,652 100.00% $6,469,713 1.36X 8.338% 115.0 69.20%
===========================================================================================================
</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.
C-6
<PAGE>
ALL INFORMATION IN THIS TERM SHEET, WHETHER REGARDING THE ASSETS BACKING ANY
SECURITIES DISCUSSED HEREIN OR OTHERWISE, WILL BE SUPERSEDED BY THE INFORMATION
CONTAINED IN ANY FINAL PROSPECTUS FOR ANY SECURITIES ACTUALLY SOLD TO YOU.
- --------------------------------------------------------------------------------
COLLATERAL TERM SHEET
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
DISTRIBUTION OF MORTGAGED PROPERTIES BY STATE (A)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
WEIGHTED
AVERAGE WEIGHTED
PERCENTAGE WEIGHTED REMAINING AVERAGE
NUMBER OF OF AGGREGATE WEIGHTED AVERAGE TERM TO CUT-OFF
MORTGAGED CUT-OFF DATE CUT-OFF DATE AVERAGE CUT-OFF AVERAGE MORTGAGE MATURITY DATE LTV
PROPERTY STATE PROPERTIES BALANCE BALANCE DATE BALANCE DSCR RATE (MOS) RATIO
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
New York 17 $112,116,525 12.65% $6,595,090 1.36x 8.270% 115.6 64.82%
California 13 104,230,421 11.76 8,017,725 1.38 8.203 119.4 66.90
Texas 22 90,858,492 10.25 4,129,931 1.37 8.458 108.4 68.94
Florida 15 82,046,915 9.26 5,469,794 1.26 8.235 113.3 74.24
Minnesota 18 52,198,112 5.89 2,899,895 1.28 8.546 116.9 75.90
Maryland 5 52,093,556 5.88 10,418,711 1.57 8.786 117.0 64.29
New Jersey 8 39,439,075 4.45 4,929,884 1.45 8.269 113.2 67.76
Michigan 6 33,652,307 3.80 5,608,718 1.25 8.477 115.6 73.88
Tennessee 5 32,572,806 3.67 6,514,561 1.29 7.810 114.6 74.83
Georgia 6 29,079,438 3.28 4,846,573 1.26 8.306 115.0 72.46
Arizona 7 23,281,205 2.63 3,325,886 1.45 8.277 114.8 65.68
Pennsylvania 6 22,470,680 2.54 3,745,113 1.25 8.406 114.5 74.31
Illinois 3 22,305,288 2.52 7,435,096 1.49 8.393 114.7 67.22
Colorado 4 22,044,005 2.49 5,511,001 1.38 8.451 116.4 67.14
Ohio 6 19,874,912 2.24 3,312,485 1.41 8.298 116.5 69.96
Delaware 2 17,048,924 1.92 8,524,462 1.33 7.844 115.6 78.77
North Carolina 3 15,442,354 1.74 5,147,451 1.25 8.086 114.5 71.76
Massachusetts 2 14,378,390 1.62 7,189,195 1.31 8.732 116.9 70.21
Virginia 5 12,050,559 1.36 2,410,112 1.54 8.386 116.7 66.92
Virgin Islands 2 11,955,484 1.35 5,977,742 1.30 9.010 116.0 59.87
South Carolina 1 11,373,287 1.28 11,373,287 1.24 8.250 116.0 77.24
Connecticut 2 10,102,735 1.14 5,051,368 1.26 8.398 116.3 70.46
Nevada 2 9,936,797 1.12 4,968,399 1.25 8.237 114.8 78.87
Washington 2 7,707,131 0.87 3,853,566 1.29 8.151 115.9 61.95
Oregon 2 7,553,473 0.85 3,776,737 1.84 8.480 114.4 51.73
New Hampshire 2 5,719,458 0.65 2,859,729 1.30 8.089 114.3 73.74
Indiana 2 4,695,070 0.53 2,347,535 1.51 8.227 113.2 61.00
West Virginia 2 4,375,398 0.49 2,187,699 1.52 8.586 115.2 63.87
Kansas 2 3,968,629 0.45 1,984,315 1.90 8.370 112.0 49.20
Alaska 1 3,688,040 0.42 3,688,040 1.37 8.480 114.0 60.46
Iowa 3 3,073,949 0.35 1,024,650 1.22 7.911 114.9 72.58
Missouri 1 1,795,805 0.20 1,795,805 1.90 8.370 112.0 49.20
Mississippi 1 1,775,000 0.20 1,775,000 1.07 8.390 118.0 65.63
Idaho 1 1,446,431 0.16 1,446,431 1.36 8.040 116.0 71.43
--- ------------ ------ ---------- ----- ------ ----- ------
TOTAL/WTD. AVG. 179 $886,350,652 100.0% $4,951,680 1.36X 8.338% 115.0 69.20%
===============================================================================================================
</TABLE>
- --------------------------------------------------------------------------------
(a) If a Mortgage Loan is secured by properties in multiple states, it is
treated as multiple Mortgage Loans each of which is allocated a cut-off
balance based on the allocated loan amount.
This material is for your private information and we are not soliciting any
action based upon it. This material is not to be construed as an offer to sell
or the solicitation of any offer to buy any security in any jurisdiction where
such an offer or solicitation would be illegal. This material is based on
information that we consider reliable, but we do not represent that it is
accurate or complete and it should not be relied upon as such. By accepting this
material the recipient agrees that it will not distribute or provide the
material to any other person. The information contained in this material may be
based on assumptions regarding market conditions and other matters as reflected
therein. We make no representations regarding the reasonableness of such
assumptions or the likelihood that any of such assumptions will coincide with
actual market conditions or events, and this material should not be relied upon
for such purposes. We and our affiliates, officers, directors, partners and
employees, including persons involved in the preparation or issuance of this
material may, from time to time, have long or short positions in, and buy and
sell, the securities mentioned therein or derivatives thereof (including
options). This material may be filed with the Securities and Exchange Commission
(the "SEC") and incorporated by reference into an effective registration
statement previously filed with the SEC under Rule 415 of the Securities Act of
1933, including in cases where the material does not pertain to securities that
are ultimately offered for sale pursuant to such registration statement.
Information contained in this material is current as of the date appearing on
this material only. Information in this material regarding any assets backing
any securities discussed herein supersedes all prior information regarding such
assets. All information in this Term Sheet, whether regarding the assets backing
any securities discussed herein or otherwise, will be superseded by the
information contained in any final prospectus for any securities actually sold
to you.
This material is furnished to you by 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.
C-7
<PAGE>
ALL INFORMATION IN THIS TERM SHEET, WHETHER REGARDING THE ASSETS BACKING ANY
SECURITIES DISCUSSED HEREIN OR OTHERWISE, WILL BE SUPERSEDED BY THE INFORMATION
CONTAINED IN ANY FINAL PROSPECTUS FOR ANY SECURITIES ACTUALLY SOLD TO YOU.
- --------------------------------------------------------------------------------
COLLATERAL TERM SHEET
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
DISTRIBUTION OF MORTGAGED PROPERTIES BY STATE
- --------------------------------------------------------------------------------
[THE NARRATIVE AND/OR TABULAR INFORMATION BELOW IS A FAIR AND ACCURATE
DESCRIPTION OF GRAPHIC OR IMAGE MATERIAL OMITTED FOR THE
PURPOSE OF EDGAR FILING.]
WA 0.87% OR 0.85%
ID 0.16% NV 1.12%
CA 11.76% AK 0.42%
AZ 2.63% CO 2.49%
KS 0.45% TX 10.25%
MN 5.89% IO 0.35%
MO 0.20% IL 2.52%
MS 0.20% MI 3.80%
IN 0.53% TN 3.67%
OH 2.24% WV 0.49%
NY 12.65% PA 2.54%
VA 1.36% NC 1.74%
SC 1.28% GA 3.28%
FL 9.26% NH 0.65%
MA 1.62% CT 1.14%
NJ 4.45% DE 1.92%
MD 5.88% U.S. Virgin Islands 1.35%
[THE NARRATIVE AND/OR TABULAR INFORMATION BELOW IS A FAIR AND ACCURATE
DESCRIPTION OF GRAPHIC OR IMAGE MATERIAL OMITTED FOR THE
PURPOSE OF EDGAR FILING.]
Other (a) 36.07%
New York 12.65%
California 11.76%
Texas 10.25%
Florida 9.26%
Minnesota 5.89%
Maryland 5.88%
New Jersey 4.45%
Michigan 3.80%
(a) includes 25 states and the U.S. Virgin Islands
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.
C-8
<PAGE>
ALL INFORMATION IN THIS TERM SHEET, WHETHER REGARDING THE ASSETS BACKING ANY
SECURITIES DISCUSSED HEREIN OR OTHERWISE, WILL BE SUPERSEDED BY THE INFORMATION
CONTAINED IN ANY FINAL PROSPECTUS FOR ANY SECURITIES ACTUALLY SOLD TO YOU.
- --------------------------------------------------------------------------------
COLLATERAL TERM SHEET
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
DISTRIBUTION OF PROPERTY TYPES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
WEIGHTED
AVERAGE WEIGHTED
PERCENTAGE WEIGHTED REMAINING AVERAGE
NUMBER OF CUT-OFF DATE OF AGGREGATE WEIGHTED AVERAGE TERM TO CUT-OFF
MORTGAGED BALANCE CUT-OFF DATE AVERAGE AVERAGE MORTGAGE MATURITY DATE LTV
PROPERTY TYPE PROPERTIES BALANCE BALANCE CUT-OFF DATE DSCR RATE (MOS) RATIO
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Multifamily 40 $290,934,812 32.82% $7,273,370 1.31x 8.011% 115.7 73.17%
Office 35 213,476,252 24.08 6,099,321 1.38 8.398 116.2 66.28
Retail 37 158,312,596 17.86 4,278,719 1.31 8.649 111.3 69.07
Industrial 35 132,092,589 14.90 3,774,074 1.30 8.452 116.4 72.74
Lodging 23 61,174,378 6.90 2,659,756 1.84 8.545 112.7 51.71
Mixed Use 4 20,271,784 2.29 5,067,946 1.28 8.601 115.6 71.70
Mobile Home Park 2 5,108,120 0.58 2,554,060 1.21 8.300 117.0 78.09
Special Purpose 3 4,980,121 0.56 1,660,040 1.27 8.379 127.9 68.74
--- ------------ ------ ---------- ---- ----- ----- -----
TOTAL/WTD. AVG. 179 $886,350,652 100.00% $4,951,680 1.36X 8.338% 115.0 69.20%
==============================================================================================================
</TABLE>
- --------------------------------------------------------------------------------
[THE NARRATIVE AND/OR TABULAR INFORMATION BELOW IS A FAIR AND ACCURATE
DESCRIPTION OF GRAPHIC OR IMAGE MATERIAL OMITTED FOR THE
PURPOSE OF EDGAR FILING.]
Other 3.43%
Multifamily 32.82%
Office 24.08%
Retail 17.86%
Industrial 14.90%
Lodging 6.90%
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.
C-9
<PAGE>
ALL INFORMATION IN THIS TERM SHEET, WHETHER REGARDING THE ASSETS BACKING ANY
SECURITIES DISCUSSED HEREIN OR OTHERWISE, WILL BE SUPERSEDED BY THE INFORMATION
CONTAINED IN ANY FINAL PROSPECTUS FOR ANY SECURITIES ACTUALLY SOLD TO YOU.
- --------------------------------------------------------------------------------
COLLATERAL TERM SHEET
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
DISTRIBUTION OF UNDERWRITTEN NCF DEBT SERVICE COVERAGE RATIOS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
WEIGHTED
AVERAGE WEIGHTED
PERCENTAGE WEIGHTED REMAINING AVERAGE
RANGE OF DEBT NUMBER OF OF AGGREGATE AVERAGE WEIGHTED AVERAGE TERM TO CUT-OFF
SERVICE MORTGAGE CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE AVERAGE MORTGAGE MATURITY DATE LTV
COVERAGE RATIOS LOANS BALANCE BALANCE BALANCE DSCR RATE (MOS) RATIO
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1.00 - 1.10 2 $5,735,682 0.65% $2,867,841 1.09x 8.466% 114.5 71.91%
1.11 - 1.20 16 132,507,175 14.95 8,281,698 1.19 8.175 115.9 77.62
1.21 - 1.30 64 393,935,889 44.44 6,155,248 1.25 8.325 115.7 72.09
1.31 - 1.40 27 152,965,666 17.26 5,665,395 1.35 8.572 116.3 68.73
1.41 - 1.50 13 90,649,425 10.23 6,973,033 1.45 8.261 110.0 66.69
1.51 - 1.60 3 13,878,955 1.57 4,626,318 1.55 8.503 116.3 63.95
1.61 - 1.70 2 14,573,353 1.64 7,286,676 1.66 8.784 117.2 48.87
1.71 - 1.80 1 2,300,000 0.26 2,300,000 1.71 8.730 120.0 57.50
1.81 - 1.90 6 67,935,216 7.66 11,322,536 1.89 8.198 112.2 50.05
2.21 - 2.30 1 3,994,697 0.45 3,994,697 2.27 8.070 118.0 48.72
2.51 - 3.17 2 7,874,596 0.89 3,937,298 3.06 8.088 114.6 45.63
--- ------------ ------ ---------- ---- ----- ----- -----
TOTAL/WTD. AVG. 137 $886,350,652 100.00% $6,469,713 1.36X 8.338% 115.0 69.20%
==================================================================================================================
</TABLE>
- --------------------------------------------------------------------------------
DISTRIBUTION OF CUT-OFF DATE LOAN TO VALUE AT ORIGINATION RATIOS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
WEIGHTED
AVERAGE WEIGHTED
NUMBER PERCENTAGE WEIGHTED REMAINING AVERAGE
OF OF AGGREGATE AVERAGE AVERAGE TERM TO CUT-OFF
RANGE OF CUT-OFF DATE MORTGAGE CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE WEIGHTED MORTGAGE MATURITY DATE LTV
LOAN-TO-VALUE RATIOS LOANS BALANCE BALANCE BALANCE AVERAGE DSCR RATE (MOS) RATIO
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
30.1 - 50.0 8 $81,845,184 9.23% $10,230,648 1.97x 8.332% 113.7 48.17%
50.1 - 60.0 12 52,143,373 5.88 4,345,281 1.49 8.631 118.9 57.60
60.1 - 65.0 15 101,300,658 11.43 6,753,377 1.38 8.331 118.2 62.94
65.1 - 70.0 22 170,313,407 19.22 7,741,519 1.32 8.490 111.8 67.33
70.1 - 75.0 38 197,920,241 22.33 5,208,427 1.27 8.375 114.3 72.79
75.1 - 80.0 40 277,668,728 31.33 6,941,718 1.24 8.167 116.0 78.25
80.1 - 85.0 2 5,159,060 0.58 2,579,530 1.19 8.407 116.7 80.62
--- ------------ ------ ---------- ---- ----- ----- -----
TOTAL/WTD. AVG. 137 $886,350,652 100.00% $6,469,713 1.36X 8.338% 115.0 69.20%
============================================================================================================
</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.
C-10
<PAGE>
ALL INFORMATION IN THIS TERM SHEET, WHETHER REGARDING THE ASSETS BACKING ANY
SECURITIES DISCUSSED HEREIN OR OTHERWISE, WILL BE SUPERSEDED BY THE INFORMATION
CONTAINED IN ANY FINAL PROSPECTUS FOR ANY SECURITIES ACTUALLY SOLD TO YOU.
- --------------------------------------------------------------------------------
COLLATERAL TERM SHEET
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
DISTRIBUTION OF MORTGAGE INTEREST RATES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
WEIGHTED
AVERAGE WEIGHTED
PERCENTAGE OF WEIGHTED REMAINING AVERAGE
NUMBER OF AGGREGATE AVERAGE WEIGHTED AVERAGE TERM TO CUT-OFF
RANGE OF MORTGAGE CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE AVERAGE MORTGAGE MATURITY DATE LTV
MORTGAGE RATES LOANS BALANCE BALANCE BALANCE DSCR RATE (MOS) RATIO
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
7.5001 - 7.7500 7 $57,022,848 6.43% $8,146,121 1.40x 7.680% 113.6 71.56%
7.7501 - 8.0000 15 128,457,239 14.49 8,563,816 1.41 7.869 118.6 70.39
8.0001 - 8.2500 28 194,813,600 21.98 6,957,629 1.31 8.127 114.9 70.66
8.2501 - 8.5000 38 239,255,588 26.99 6,296,200 1.40 8.386 111.2 67.99
8.5001 - 8.7500 23 133,529,389 15.07 5,805,626 1.32 8.610 118.1 70.05
8.7501 - 9.0000 13 46,021,763 5.19 3,540,136 1.32 8.866 118.7 67.35
9.0001 - 9.2500 7 73,636,208 8.31 10,519,458 1.35 9.047 114.5 66.44
9.2501 - 9.5000 4 11,784,664 1.33 2,946,166 1.35 9.429 118.5 62.33
9.5001 - 9.6250 2 1,829,355 0.21 914,677 2.26 9.545 113.0 58.15
--- ------------ ------ ---------- ---- ----- ----- -----
TOTAL/WTD. AVG. 137 $886,350,652 100.00% $6,469,713 1.36X 8.338% 115.0 69.20%
===============================================================================================================
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
DISTRIBUTION OF REMAINING AMORTIZATION TERMS (A)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
WEIGHTED
AVERAGE WEIGHTED
PERCENTAGE OF WEIGHTED REMAINING AVERAGE
RANGE OF REMAINING NUMBER OF AGGREGATE AVERAGE WEIGHTED AVERAGE TERM TO CUT-OFF
AMORTIZATION TERMS MORTGAGE CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE AVERAGE MORTGAGE MATURITY DATE LTV
(MOS) LOANS BALANCE BALANCE BALANCE DSCR RATE (MOS) RATIO
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Interest Only 1 $14,600,000 1.65% $14,600,000 1.43x 8.330% 58.0 69.86%
171 - 190 2 3,170,530 0.36 1,585,265 1.25 8.766 176.8 55.97
251 - 270 2 6,838,943 0.77 3,419,471 1.31 9.024 118.7 65.37
271 - 290 1 434,534 0.05 434,534 1.32 9.625 113.0 62.08
291 - 310 13 97,557,570 11.01 7,504,428 1.63 8.611 113.9 56.72
311 - 330 1 1,394,821 0.16 1,394,821 2.55 9.520 113.0 56.93
331 - 360 117 762,354,254 86.01 6,515,848 1.33 8.293 116.0 70.91
--- ------------ ------ ---------- ---- ----- ----- -----
TOTAL/WTD. AVG. 137 $886,350,652 100.00% $6,469,713 1.36X 8.338% 115.0 69.20%
==============================================================================================================
</TABLE>
- --------------------------------------------------------------------------------
(a) 91 loans representing 62.31% of the Aggregate Cut-Off Date Balance accrue
interest on an Actual/360 basis but have a monthly payment calculated on a
30/360 schedule. Accordingly, the actual amortization term is longer for
these loans than the stated amortization term reflected in the table above.
This material is for your private information and we are not soliciting any
action based upon it. This material is not to be construed as an offer to sell
or the solicitation of any offer to buy any security in any jurisdiction where
such an offer or solicitation would be illegal. This material is based on
information that we consider reliable, but we do not represent that it is
accurate or complete and it should not be relied upon as such. By accepting this
material the recipient agrees that it will not distribute or provide the
material to any other person. The information contained in this material may be
based on assumptions regarding market conditions and other matters as reflected
therein. We make no representations regarding the reasonableness of such
assumptions or the likelihood that any of such assumptions will coincide with
actual market conditions or events, and this material should not be relied upon
for such purposes. We and our affiliates, officers, directors, partners and
employees, including persons involved in the preparation or issuance of this
material may, from time to time, have long or short positions in, and buy and
sell, the securities mentioned therein or derivatives thereof (including
options). This material may be filed with the Securities and Exchange Commission
(the "SEC") and incorporated by reference into an effective registration
statement previously filed with the SEC under Rule 415 of the Securities Act of
1933, including in cases where the material does not pertain to securities that
are ultimately offered for sale pursuant to such registration statement.
Information contained in this material is current as of the date appearing on
this material only. Information in this material regarding any assets backing
any securities discussed herein supersedes all prior information regarding such
assets. All information in this Term Sheet, whether regarding the assets backing
any securities discussed herein or otherwise, will be superseded by the
information contained in any final prospectus for any securities actually sold
to you.
This material is furnished to you by 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.
C-11
<PAGE>
ALL INFORMATION IN THIS TERM SHEET, WHETHER REGARDING THE ASSETS BACKING ANY
SECURITIES DISCUSSED HEREIN OR OTHERWISE, WILL BE SUPERSEDED BY THE INFORMATION
CONTAINED IN ANY FINAL PROSPECTUS FOR ANY SECURITIES ACTUALLY SOLD TO YOU.
- --------------------------------------------------------------------------------
COLLATERAL TERM SHEET
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
DISTRIBUTION OF ORIGINAL TERMS TO MATURITY
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
WEIGHTED
PERCENTAGE AVERAGE WEIGHTED
OF WEIGHTED REMAINING AVERAGE
NUMBER OF AGGREGATE AVERAGE WEIGHTED AVERAGE TERM TO CUT-OFF
RANGE OF ORIGINAL TERM TO MORTGAGE CUT-OFF DATE CUT-OFF CUT-OFF DATE AVERAGE MORTGAGE MATURITY DATE LTV
MATURITY (MOS) LOANS BALANCE DATE BALANCE BALANCE DSCR RATE (MOS) RATIO
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
60 - 83 1 $14,600,000 1.65% $14,600,000 1.43x 8.330% 58.0 69.86%
84 - 120 130 834,213,877 94.12 6,417,030 1.36 8.348 115.2 69.50
121 - 180 6 37,536,775 4.23 6,256,129 1.42 8.116 132.2 62.35
--- ------------ ------ ---------- ---- ----- ----- -----
TOTAL/WTD. AVG. 137 $886,350,652 100.00% $6,469,713 1.36X 8.338% 115.0 69.20%
==========================================================================================================
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
DISTRIBUTION OF REMAINING TERMS TO MATURITY
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
WEIGHTED
PERCENTAGE AVERAGE WEIGHTED
OF WEIGHTED REMAINING AVERAGE
NUMBER OF AGGREGATE AVERAGE WEIGHTED AVERAGE TERM TO CUT-OFF
RANGE OF REMAINING TERMS MORTGAGE CUT-OFF DATE CUT-OFF CUT-OFF DATE AVERAGE MORTGAGE MATURITY DATE LTV
TO MATURITY (MOS) LOANS BALANCE DATE BALANCE BALANCE DSCR RATE (MOS) RATIO
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
51 - 70 1 $14,600,000 1.65% $14,600,000 1.43x 8.330% 58.0 69.86%
71 - 90 1 6,389,543 0.72 6,389,543 1.25 9.150 81.0 74.12
91 - 110 5 31,888,778 3.60 6,377,756 1.42 7.866 107.9 64.50
111 - 120 124 795,935,555 89.80 6,418,835 1.36 8.361 115.8 69.67
121 - 130 4 34,366,245 3.88 8,591,561 1.44 8.056 128.1 62.94
171 - 190 2 3,170,530 0.36 1,585,265 1.25 8.766 176.8 55.97
--- ------------ ------ ---------- ---- ----- ----- -----
TOTAL/WTD. AVG. 137 $886,350,652 100.00% $6,469,713 1.36X 8.338% 115.0 69.20%
=========================================================================================================
</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.
C-12
<PAGE>
ALL INFORMATION IN THIS TERM SHEET, WHETHER REGARDING THE ASSETS BACKING ANY
SECURITIES DISCUSSED HEREIN OR OTHERWISE, WILL BE SUPERSEDED BY THE INFORMATION
CONTAINED IN ANY FINAL PROSPECTUS FOR ANY SECURITIES ACTUALLY SOLD TO YOU.
- --------------------------------------------------------------------------------
COLLATERAL TERM SHEET
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
DISTRIBUTION OF AMORTIZATION TYPES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
WEIGHTED
PERCENTAGE AVERAGE WEIGHTED
OF WEIGHTED REMAINING AVERAGE
NUMBER OF AGGREGATE AVERAGE WEIGHTED AVERAGE TERM TO CUT-OFF
MORTGAGE CUT-OFF DATE CUT-OFF CUT-OFF DATE AVERAGE MORTGAGE MATURITY DATE LTV
AMORTIZATION TYPE LOANS BALANCE DATE BALANCE BALANCE DSCR RATE (MOS) RATIO
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balloon 124 $759,109,247 85.64% $6,121,849 1.33x 8.293% 114.7 70.63%
Hyperamortizing 11 124,070,875 14.00 11,279,170 1.55 8.607 115.3 60.83
Fully Amortizing 2 3,170,530 0.36 1,585,265 1.25 8.766 176.8 55.97
--- ------------ ------ ---------- ---- ----- ----- -----
TOTAL/WTD. AVG. 137 $886,350,652 100.00% $6,469,713 1.36X 8.338% 115.0 69.20%
=========================================================================================================
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
DISTRIBUTION OF PREPAYMENT PROVISIONS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
WEIGHTED
PERCENTAGE AVERAGE WEIGHTED
OF WEIGHTED REMAINING AVERAGE
NUMBER OF AGGREGATE AVERAGE WEIGHTED AVERAGE TERM TO CUT-OFF
MORTGAGE CUT-OFF DATE CUT-OFF CUT-OFF DATE AVERAGE MORTGAGE MATURITY DATE LTV
AMORTIZATION TYPE LOANS BALANCE DATE BALANCE BALANCE DSCR RATE (MOS) RATIO
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Lockout/Defeasance 135 $884,932,240 99.84% $6,555,054 1.36x 8.337% 115.0 69.23%
Lockout/Greater YM or 1% 1 983,877 0.11 983,877 1.17 9.000 174.0 52.47
Lockout/Declining Fee 1 434,534 0.05 434,534 1.32 9.625 113.0 62.08
--- ------------ ------ ---------- ---- ----- ----- -----
TOTAL/WTD. AVG. 137 $886,350,652 100.00% $6,469,713 1.36X 8.338% 115.0 69.20%
=========================================================================================================
</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.
C-13
<PAGE>
ALL INFORMATION IN THIS TERM SHEET, WHETHER REGARDING THE ASSETS BACKING ANY
SECURITIES DISCUSSED HEREIN OR OTHERWISE, WILL BE SUPERSEDED BY THE INFORMATION
CONTAINED IN ANY FINAL PROSPECTUS FOR ANY SECURITIES ACTUALLY SOLD TO YOU.
- --------------------------------------------------------------------------------
COLLATERAL TERM SHEET
80 LAFAYETTE STREET
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
LOAN INFORMATION
- --------------------------------------------------------------------------------
ORIGINAL CUT-OFF DATE
-------- ------------
PRINCIPAL BALANCE: $48,576,876 $48,443,653
% OF POOL BY UPB 5.47%
ORIGINATOR: GMACCM
NOTE DATE: October 14, 1999
INTEREST RATE: 8.135%
AMORTIZATION: 30 years
MATURITY DATE: November 10, 2009
BORROWER/SPONSOR: The Borrower is a single purpose,
bankruptcy remote entity.
CALL PROTECTION: Prepayment lockout; U.S. Treasury
defeasance.
CROSS-COLLATERALIZATION/ No/No
DEFAULT:
ADDITIONAL FINANCING: None.
CASH MANAGEMENT: Soft Lockbox in place springing to a
Hard Lockbox upon an Event of Default.
MONTHLY RESERVES: Debt Service - $600,000 upfront;
$18,181.82 first 33 months
Replacement - $4,350
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PROPERTY INFORMATION
- --------------------------------------------------------------------------------
SINGLE ASSET/PORTFOLIO: Single Asset
PROPERTY TYPE: Multifamily/Student Housing
LOCATION: New York, New York
YEAR BUILT / RENOVATED: 1915 / 1999
THE COLLATERAL: A 17-story multifamily apartment
building located in downtown New
York. There are 261 residential
apartments comprising 253,999
square feet and 8,150 square feet
of first-floor retail. All the
residential units are master
leased to New York University for
student housing through 2002 with
five one-year extension options.
PROPERTY MANAGEMENT: Coral Realty, LLC
CURRENT OCCUPANCY (10/2/99): 100%
UNDERWRITTEN NET CASH FLOW: $5,656,662
APPRAISED VALUE: $73,100,000
APPRAISAL DATE: August 16, 1999
CUT-OFF DATE LOAN/UNITS: $185,608
CUT-OFF DATE LTV: 66.27%
BALLOON LTV: 58.60%
UWNCF DSCR: 1.29x
- --------------------------------------------------------------------------------
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.
C-14
<PAGE>
ALL INFORMATION IN THIS TERM SHEET, WHETHER REGARDING THE ASSETS BACKING ANY
SECURITIES DISCUSSED HEREIN OR OTHERWISE, WILL BE SUPERSEDED BY THE INFORMATION
CONTAINED IN ANY FINAL PROSPECTUS FOR ANY SECURITIES ACTUALLY SOLD TO YOU.
- --------------------------------------------------------------------------------
COLLATERAL TERM SHEET
EQUITY INNS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
LOAN/PARTICIPATION INFORMATION
- --------------------------------------------------------------------------------
ORIGINAL CUT-OFF DATE
-------- ------------
PRINCIPAL BALANCE
LOANS: $97,020,000 $96,259,106
PARTICIPATION: $48,510,000 $48,129,553
(% OF LOANS) (50%) (50%)
% OF POOL BY UPB: 5.43%
ORIGINATOR: GMACCM
NOTE DATE: June 16, 1999
INTEREST RATE: 8.37%
AMORTIZATION: 25 years
ARD DATE: July 1, 2009
BORROWER/SPONSOR: Two single purpose, bankruptcy remote
entities affiliated with Equity Inns
Inc., a publicly traded real estate
investment trust (NYSE: ENN).
CALL PROTECTION: Prepayment lockout; U.S. Treasury
defeasance.
RELEASE PRICE: After the lockout period, Borrowers
may partially defease the Loan to
obtain the release of an individual
property. To release a property, the
Borrowers must defease 125% of the
loan amount originally allocated to
the property. Further, the UWNCF DSCR
for the remaining properties must be
greater than or equal to 1.90x.
CROSS-COLLATERALIZATION/ Yes/Yes.
DEFAULT:
ADDITIONAL FINANCING: None.
CASH MANAGEMENT: Hard Lockbox.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PROPERTY INFORMATION
- --------------------------------------------------------------------------------
SINGLE ASSET/PORTFOLIO: Portfolio
PROPERTY TYPE: Lodging
THE COLLATERAL: 5 AmeriSuites, 3 Homewood Suites,
6 Hampton Inns and 5 Residence
Inns lodging properties containing
a total of 2,453 rooms and located
in 13 states. Each of the
properties is leased to and
managed by an affiliate of either
Prime Hospitality Corp. or
Interstate Hotels Management, Inc.
SUBSTITUTION: The Borrowers may substitute
"like-kind" collateral without
penalty after the prepayment
lockout period. Substitution is
limited to $25 million in
collateral value per substitution
and $50 million in the aggregate.
Any substitution is also subject
to maintenance of a minimum LTV of
55% and receipt of confirmation
from the Rating Agencies that such
substitution will not effect the
ratings for any Class.
LESSEES: Five of the properties are leased
by an affiliate of Prime
Hospitality Corp., an owner,
manager and franchisor of hotels.
The Prime affiliate manages each
of the five properties.
The remaining 14 properties are leased by
affiliates of Interstate Hotels Management, Inc.,
a publicly traded company (NASDAQ: IHCO). The
Interstate affiliates manage all but three of the
properties, which are managed under contract by a
third party.
UNDERWRITTEN NET CASH
FLOW $17,808,502 / $8,904,251
LOANS/PARTICIPATION:
APPRAISED VALUE
LOANS/PARTICIPATION: $196,800,000 / $98,400,000
APPRAISAL DATE: April 1, 1999
CUT-OFF DATE BALANCE
PER ROOM
LOANS/PARTICIPATION: $39,242 / $19,621
CUT-OFF DATE LTV: 48.95%
BALLOON LTV: 40.34%
UWNCF DSCR: 1.90x
- ------------------------------------------------------------------
This material is for your private information and we are not soliciting any
action based upon it. This material is not to be construed as an offer to sell
or the solicitation of any offer to buy any security in any jurisdiction where
such an offer or solicitation would be illegal. This material is based on
information that we consider reliable, but we do not represent that it is
accurate or complete and it should not be relied upon as such. By accepting this
material the recipient agrees that it will not distribute or provide the
material to any other person. The information contained in this material may be
based on assumptions regarding market conditions and other matters as reflected
therein. We make no representations regarding the reasonableness of such
assumptions or the likelihood that any of such assumptions will coincide with
actual market conditions or events, and this material should not be relied upon
for such purposes. We and our affiliates, officers, directors, partners and
employees, including persons involved in the preparation or issuance of this
material may, from time to time, have long or short positions in, and buy and
sell, the securities mentioned therein or derivatives thereof (including
options). This material may be filed with the Securities and Exchange Commission
(the "SEC") and incorporated by reference into an effective registration
statement previously filed with the SEC under Rule 415 of the Securities Act of
1933, including in cases where the material does not pertain to securities that
are ultimately offered for sale pursuant to such registration statement.
Information contained in this material is current as of the date appearing on
this material only. Information in this material regarding any assets backing
any securities discussed herein supersedes all prior information regarding such
assets. All information in this Term Sheet, whether regarding the assets backing
any securities discussed herein or otherwise, will be superseded by the
information contained in any final prospectus for any securities actually sold
to you.
This material is furnished to you by 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.
C-15
<PAGE>
ALL INFORMATION IN THIS TERM SHEET, WHETHER REGARDING THE ASSETS BACKING ANY
SECURITIES DISCUSSED HEREIN OR OTHERWISE, WILL BE SUPERSEDED BY THE INFORMATION
CONTAINED IN ANY FINAL PROSPECTUS FOR ANY SECURITIES ACTUALLY SOLD TO YOU.
- --------------------------------------------------------------------------------
COLLATERAL TERM SHEET
EQUITY INNS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
COLLATERAL DETAILS
- ------------------------------------------------------------------------------------------------------------
ALLOCATED CUT-OFF DATE ALLOCATED CUT-OFF
PROPERTY CITY STATE # UNITS PARTICIPATION AMOUNT DATE LOAN AMOUNT
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Residence Inn Portland Oregon 168 $5,253,473.16 $10,506,946.32
- ------------------------------------------------------------------------------------------------------------
Residence Inn Princeton New Jersey 208 $4,945,904.39 $9,891,808.78
- ------------------------------------------------------------------------------------------------------------
Homewood Suites Phoenix Arizona 124 $3,537,040.95 $7,074,081.90
- ------------------------------------------------------------------------------------------------------------
Residence Inn Eagan Minnesota 120 $3,224,511.38 $6,449,022.76
- ------------------------------------------------------------------------------------------------------------
Amerisuites Glen Allen Virginia 126 $2,683,785.63 $5,367,571.26
- ------------------------------------------------------------------------------------------------------------
Residence Inn Tucson Arizona 128 $2,644,099.33 $5,288,198.66
- ------------------------------------------------------------------------------------------------------------
Hampton Inn Memphis Tennessee 126 $2,356,373.70 $4,712,747.40
- ------------------------------------------------------------------------------------------------------------
Residence Inn Tinton Falls New Jersey 96 $2,331,569.77 $4,663,139.54
- ------------------------------------------------------------------------------------------------------------
Amerisuites Columbus Ohio 126 $2,306,765.83 $4,613,531.66
- ------------------------------------------------------------------------------------------------------------
Hampton Inn Northville Michigan 125 $2,202,589.31 $4,405,178.62
- ------------------------------------------------------------------------------------------------------------
Hampton Inn Overland Park Kansas 134 $2,187,706.95 $4,375,413.90
- ------------------------------------------------------------------------------------------------------------
Homewood Suites San Antonio Texas 123 $2,053,765.71 $4,107,531.42
- ------------------------------------------------------------------------------------------------------------
Hampton Inn Morgantown West Virginia 108 $2,009,118.63 $4,018,237.26
- ------------------------------------------------------------------------------------------------------------
Amerisuites Indianapolis Indiana 126 $1,904,942.11 $3,809,884.22
- ------------------------------------------------------------------------------------------------------------
Hampton Inn Kansas City Missouri 120 $1,795,804.80 $3,591,609.60
- ------------------------------------------------------------------------------------------------------------
Amerisuites Overland Park Kansas 126 $1,780,922.44 $3,561,844.88
- ------------------------------------------------------------------------------------------------------------
Amerisuites Memphis Tennessee 128 $1,716,432.21 $3,432,864.42
- ------------------------------------------------------------------------------------------------------------
Homewood Suites Sharonville Ohio 111 $1,646,981.20 $3,293,962.40
- ------------------------------------------------------------------------------------------------------------
Hampton Inn Richardson Texas 130 $1,547,765.46 $3,095,530.92
- ------------------------------------------------------------------------------------------------------------
</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.
C-16
<PAGE>
ALL INFORMATION IN THIS TERM SHEET, WHETHER REGARDING THE ASSETS BACKING ANY
SECURITIES DISCUSSED HEREIN OR OTHERWISE, WILL BE SUPERSEDED BY THE INFORMATION
CONTAINED IN ANY FINAL PROSPECTUS FOR ANY SECURITIES ACTUALLY SOLD TO YOU.
- --------------------------------------------------------------------------------
COLLATERAL TERM SHEET
LOAN UNION TOWER
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
LOAN INFORMATION
- --------------------------------------------------------------------------------
ORIGINAL CUT-OFF DATE
-------- ------------
PRINCIPAL BALANCE: $37,000,000 $36,959,753
% OF POOL BY UPB 4.17%
ORIGINATOR: German American Capital Corporation
NOTE DATE: December 30, 1999
INTEREST RATE: 9.03%
AMORTIZATION: 30 years
ARD DATE: January 1, 2010
BORROWER/SPONSOR: The Borrower is a single purpose, bankruptcy remote
entity sponsored by Trammell Crow.
CALL PROTECTION: Prepayment lockout; U.S. Treasury
defeasance.
CROSS-COLLATERALIZATION/ No/No
DEFAULT:
MEZZANINE LOAN: There is a $5.8 million fully
subordinated mezzanine loan made by
First Union that is secured solely by
partnership interests in the Borrower.
CASH MANAGEMENT: Hard Lockbox in place.
MONTHLY RESERVES: TI/LC - $18,750 ($2.5 million upfront;
Cap: $2.725 million; Minimum:
$1.9 million)
Replacement: $6,295.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PROPERTY INFORMATION
- --------------------------------------------------------------------------------
SINGLE ASSET/PORTFOLIO: Single Asset
PROPERTY TYPE: Office
LOCATION: Baltimore, Maryland
YEAR BUILT: 1985
THE COLLATERAL: A 19-story, 377,684 square foot
office building located in the
central business district of
Baltimore. Tenants include First
Union (Moody's: A1/S&P: A+),
Price Waterhouse and Salomon Smith
Barney (Moody's: A1/S&P: A).
PROPERTY MANAGEMENT: TC Mid Atlantic, Inc., an
affiliate of the Borrower
CURRENT OCCUPANCY (12/12/99): 88%
UNDERWRITTEN NET CASH FLOW: $4,792,223
APPRAISED VALUE: $54,500,000
APPRAISAL DATE: December 7, 1999
CUT-OFF DATE LOAN/SF: $97.86
CUT-OFF DATE LTV: 67.82%
ARD BALLOON LTV: 62.15%
UWNCF DSCR: 1.34x
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FIVE LARGEST TENANTS
- --------------------
SQUARE PRECENTAGE OF DATE OF
TENANT FOOTAGE LEASED TOTAL LEASABLE AREA LEASE EXPIRATION
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
First Union National Bank 103,259 27.34% 09/30/2014
- ------------------------------------------------------------------------------------------------
Whiteford, Taylor and Preston 78,116 20.68% 01/31/2006
- ------------------------------------------------------------------------------------------------
Development Design Group, Inc. (a) 31,247 8.27% 3/31/2003
- ------------------------------------------------------------------------------------------------
McGuire, Woods, Battle 28,758 7.61% 2/28/2009
- ------------------------------------------------------------------------------------------------
Credit Suisse First Boston Corp. (a) 19,455 5.15% 11/30/2005
- ------------------------------------------------------------------------------------------------
</TABLE>
(a) Both Development Design Group, Inc. and Credit Suisse First Boston Corp.
sublease their space from First Union National Bank. In total, First Union
National Bank master leases 73,691 SF (19.5% of GLA) that is subleased to
seven tenants.
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.
C-17
<PAGE>
ALL INFORMATION IN THIS TERM SHEET, WHETHER REGARDING THE ASSETS BACKING ANY
SECURITIES DISCUSSED HEREIN OR OTHERWISE, WILL BE SUPERSEDED BY THE INFORMATION
CONTAINED IN ANY FINAL PROSPECTUS FOR ANY SECURITIES ACTUALLY SOLD TO YOU.
- --------------------------------------------------------------------------------
COLLATERAL TERM SHEET
WORLD SAVING CENTER
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
LOAN INFORMATION
- --------------------------------------------------------------------------------
ORIGINAL CUT-OFF DATE
-------- ------------
PRINCIPAL BALANCE: $29,500,000 $29,425,174
% OF POOL BY UPB 3.32%
ORIGINATOR: Archon Financial, L.P.
NOTE DATE: October 4, 1999
INTEREST RATE: 7.91%
AMORTIZATION: 30 years
MATURITY DATE: November 1, 2010
BORROWER/SPONSOR: Prentiss Properties Acquisition
Partnership, the primary operating
entity of Prentiss Properties Trust, a
publicly traded real estate investment
trust (NYSE: PP).
CALL PROTECTION: Prepayment lockout; U.S. Treasury
defeasance.
CROSS-COLLATERALIZATION/ No/No
DEFAULT:
ADDITIONAL FINANCING: None.
CASH MANAGEMENT: Hard Lockbox in place.
MONTHLY RESERVES TI/LC $2,083 ($25,000 in year one
increasing by $25,000 annually to a
cap of $200,000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PROPERTY INFORMATION
- --------------------------------------------------------------------------------
SINGLE ASSET/PORTFOLIO: Single Asset
PROPERTY TYPE: Office
LOCATION: Oakland, California
YEAR BUILT: 1986
THE COLLATERAL: A 17-story 270,485 square foot
office building with a 3-level
subterranean parking garage
located in downtown Oakland. The
two largest tenants are World
Savings and Loan (Moody's: A1/
S&P: A+) and Burnham & Brown.
PROPERTY MANAGEMENT: An affiliate of the borrower
CURRENT OCCUPANCY (12/31/99): 100%
UNDERWRITTEN NET CASH FLOW: $3,783,774
APPRAISED VALUE: $47,500,000
APPRAISAL DATE: September 1, 1999
CUT-OFF DATE LOAN/SF: $108.79
CUT-OFF DATE LTV: 61.95%
BALLOON LTV: 54.41%
UWNCF DSCR: 1.47x
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FIVE LARGEST TENANTS
- --------------------
SQUARE PRECENTAGE OF DATE OF
TENANT FOOTAGE LEASED TOTAL LEASABLE AREA LEASE EXPIRATION
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
World Savings & Loan 147,517 54.54% 12/31/2007
- ------------------------------------------------------------------------------------------------
Burnham & Brown 48,891 18.08% 12/14/2004
- ------------------------------------------------------------------------------------------------
Carol Williams 14,207 5.25% 01/31/2003
- ------------------------------------------------------------------------------------------------
Robbins, Plamer, Allen 13,907 5.14% 07/31/2003
- ------------------------------------------------------------------------------------------------
Lawrence Johnson 11,707 4.33% 04/21/2002
- ------------------------------------------------------------------------------------------------
</TABLE>
This material is for your private information and we are not soliciting any
action based upon it. This material is not to be construed as an offer to sell
or the solicitation of any offer to buy any security in any jurisdiction where
such an offer or solicitation would be illegal. This material is based on
information that we consider reliable, but we do not represent that it is
accurate or complete and it should not be relied upon as such. By accepting this
material the recipient agrees that it will not distribute or provide the
material to any other person. The information contained in this material may be
based on assumptions regarding market conditions and other matters as reflected
therein. We make no representations regarding the reasonableness of such
assumptions or the likelihood that any of such assumptions will coincide with
actual market conditions or events, and this material should not be relied upon
for such purposes. We and our affiliates, officers, directors, partners and
employees, including persons involved in the preparation or issuance of this
material may, from time to time, have long or short positions in, and buy and
sell, the securities mentioned therein or derivatives thereof (including
options). This material may be filed with the Securities and Exchange Commission
(the "SEC") and incorporated by reference into an effective registration
statement previously filed with the SEC under Rule 415 of the Securities Act of
1933, including in cases where the material does not pertain to securities that
are ultimately offered for sale pursuant to such registration statement.
Information contained in this material is current as of the date appearing on
this material only. Information in this material regarding any assets backing
any securities discussed herein supersedes all prior information regarding such
assets. All information in this Term Sheet, whether regarding the assets backing
any securities discussed herein or otherwise, will be superseded by the
information contained in any final prospectus for any securities actually sold
to you.
This material is furnished to you by 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.
C-18
<PAGE>
ALL INFORMATION IN THIS TERM SHEET, WHETHER REGARDING THE ASSETS BACKING ANY
SECURITIES DISCUSSED HEREIN OR OTHERWISE, WILL BE SUPERSEDED BY THE INFORMATION
CONTAINED IN ANY FINAL PROSPECTUS FOR ANY SECURITIES ACTUALLY SOLD TO YOU.
- --------------------------------------------------------------------------------
COLLATERAL TERM SHEET
FREEMAN WEBB PORTFOLIO
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
LOAN INFORMATION
- --------------------------------------------------------------------------------
ORIGINAL CUT-OFF DATE
-------- ------------
PRINCIPAL BALANCE: $28,500,000 $28,500,000
% OF POOL BY UPB 3.22%
ORGINATOR: GMACCM
NOTE DATE: October 1, 1999
INTEREST RATE: 7.73%
AMORTIZATION: 30 Years (24-month Interest only, then
Amortizing)
MATURITY DATE: October 10, 2009
BORROWER/SPONSOR: The Borrower is a single purpose,
bankruptcy remote entity.
CALL PROTECTION: Prepayment lockout; U.S. Treasury
defeasance.
CROSS-COLLATERALIZATION/ No/No
DEFAULT:
ADDITIONAL FINANCING: None.
CASH MANAGEMENT: None
MONTHLY RESERVES: Replacement: $14,816
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PROPERTY INFORMATION
- --------------------------------------------------------------------------------
SINGLE ASSET/PORTFOLIO: Portfolio
PROPERTY TYPE: Multifamily
LOCATION: Nashville, Knoxville & Madison, TN
YEAR BUILT / RENOVATED: 1972 to 1983 / 1997 to 1999
THE COLLATERAL: Three multifamily complexes;
British Woods Apartments consists
of 263 units in 22 garden-style
apartment buildings. Windovar
Apartments consists of 271 units
contained within 23 two, three and
four-story buildings. Highland
Ridge Apartments consists of 280
units in 17 garden-style apartment
buildings.
PROPERTY MANAGEMENT: Freeman Webb Company Realtors
OCCUPANCY (7/31/99): 94%
UNDERWRITTEN NET CASH FLOW: $2,964,503
APPRAISED VALUE: $36,310,000
APPRAISAL DATE: August 9, 1999
CUT-OFF DATE LOAN/UNITS: $35,012.29
CUT-OFF DATE LTV: 78.49%
BALLOON LTV: 71.26%
UWNCF DSCR: 1.20x
- --------------------------------------------------------------------------------
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.
C-19
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<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-C1
(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, Luxembourg or Euroclear. The global securities will be tradeable as
home market instruments in both the European and U.S. domestic markets. Initial
settlement and all secondary trades will settle in same day funds. Terms used
but not defined in this Annex D have the meanings assigned to them in the
prospectus supplement and the prospectus.
Secondary market trading between investors holding global securities
through Clearstream, Luxembourg 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, Luxembourg or
Euroclear and DTC participants holding certificates will be effected on a
delivery-against-payment basis through the respective depositaries of
Clearstream, Luxembourg 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, Luxembourg
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,
Luxembourg 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, Luxembourg or Euroclear
Participants. Secondary market trading between Clearstream, Luxembourg
participants or Euroclear participants will be settled using the procedures
applicable to conventional eurobonds in same-day funds.
Trading between DTC seller and Clearstream, Luxembourg or Euroclear
purchaser. When global securities are to be transferred from the account of a
DTC participant to the account of a Clearstream, Luxembourg participant or a
Euroclear participant, the purchaser will send instructions to Clearstream,
Luxembourg or Euroclear through a Clearstream, Luxembourg participant or
Euroclear participant at least one business day before settlement. Clearstream,
Luxembourg 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,
Luxembourg 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, Luxembourg or Euroclear cash debit will be
valued instead as of the actual settlement date.
Clearstream, Luxembourg 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,
Luxembourg or Euroclear. Under this approach, they may take on credit exposure
to Clearstream, Luxembourg or Euroclear until the global securities are
credited to their accounts one day later.
As an alternative, if Clearstream, Luxembourg or Euroclear has extended a
line of credit to them, Clearstream, Luxembourg 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,
Luxembourg 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, Luxembourg 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, Luxembourg
participants or
D-2
<PAGE>
Euroclear participants. The sale proceeds will be available to the DTC seller
on the settlement date. Thus, to the DTC participant a cross-market transaction
will settle no differently than a trade between two DTC participants.
Trading between Clearstream, Luxembourg or Euroclear seller and DTC
purchaser. Due to time zone differences in their favor, Clearstream, Luxembourg
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, Luxembourg or
Euroclear through a Clearstream, Luxembourg participant or Euroclear
participant at least one business day before settlement. In these cases,
Clearstream, Luxembourg 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,
Luxembourg participant or Euroclear participant the following day, and receipt
of the cash proceeds in the Clearstream, Luxembourg 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, Luxembourg 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, Luxembourg participant's or
Euroclear participant's account would instead be valued as of the actual
settlement date. Finally, day traders that use Clearstream, Luxembourg or
Euroclear and that purchase global securities from DTC participants for
delivery to Clearstream, Luxembourg 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, Luxembourg or Euroclear for one day
(until the purchase side of the day trade is reflected in their Clearstream,
Luxembourg 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, Luxembourg 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, Luxembourg
participant or Euroclear participant.
U.S. FEDERAL INCOME TAX DOCUMENTATION REQUIREMENTS
A beneficial owner of global securities holding securities through
Clearstream, Luxembourg 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
D-3
<PAGE>
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 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 MARCH 3, 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 650 Dresher 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.
2
<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 ....................................................... 11
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 ......................................................... 18
Yield and Maturity Considerations .............................................. 18
Pass-Through Rate ............................................................ 18
Purchase Price Consideration ................................................. 19
Payment Delays ............................................................... 19
Shortfalls in Collections of Interest ........................................ 19
The Effects of Prepayments on Yield .......................................... 20
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 ................................ 28
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 .......................... 34
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
The Pooling and Servicing Agreements ........................................... 36
Assignment of Mortgage Loans; Repurchases .................................... 36
Representations and Warranties; Repurchases .................................. 39
Collection and other Servicing Procedures .................................... 40
Sub-Servicers ................................................................ 42
Special Servicers ............................................................ 43
Certificate Account .......................................................... 43
Realization Upon Defaulted Mortgage Loans .................................... 46
Hazard Insurance Policies .................................................... 49
Due-on-Sale and Due-on-Encumbrance Provisions ................................ 50
Servicing Compensation and Payment of Expenses ............................... 50
Evidence as to Compliance .................................................... 51
Matters Regarding the Master Servicer and the Depositor ...................... 52
Events of Default ............................................................ 53
Rights Upon Event of Default ................................................. 54
Amendment .................................................................... 55
The Trustee .................................................................. 56
Duties of the Trustee ........................................................ 56
Matters Regarding the Trustee ................................................ 57
Resignation and Removal of the Trustee ....................................... 57
Description of Credit Support .................................................. 58
Subordinate Certificates ..................................................... 58
Insurance or Guarantees for Mortgage Loans ................................... 59
Letter of Credit ............................................................. 59
Certificate Insurance and Surety Bonds ....................................... 59
Reserve Funds ................................................................ 60
Credit Support for MBS ....................................................... 60
Legal Aspects of Mortgage Loans ................................................ 60
Types of Mortgage Instruments ................................................ 61
Leases and Rents ............................................................. 61
Personalty ................................................................... 62
Foreclosure .................................................................. 62
Bankruptcy Laws .............................................................. 66
Environmental Considerations ................................................. 68
Due-on-Sale and Due-on-Encumbrance ........................................... 70
Subordinate Financing ........................................................ 71
Default Interest and Limitations on Prepayments .............................. 71
Applicability of Usury Laws .................................................. 71
Soldiers' and Sailors' Civil Relief Act of 1940 .............................. 72
Federal Income Tax Consequences ................................................ 73
REMICs ..................................................................... 74
Grantor Trust .............................................................. 94
State and Other Tax Consequences ............................................... 105
ERISA Considerations ........................................................... 105
Plan Asset Regulations ..................................................... 105
Prohibited Transaction Exemption ........................................... 106
Representation from Investing Plans ........................................ 109
Tax Exempt Investors ....................................................... 110
Legal Investment ............................................................... 110
Use of Proceeds ................................................................ 112
Method of Distribution ......................................................... 112
Legal Matters .................................................................. 114
Financial Information .......................................................... 114
Where You Can Find Additional Information ...................................... 114
Reports to Certificateholders .................................................. 115
Incorporation of Information by Reference ...................................... 115
Rating ......................................................................... 115
Glossary ....................................................................... 116
</TABLE>
ii
<PAGE>
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
"The Mortgage Loans--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
and--Special Servicers" in this prospectus.
3
<PAGE>
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 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
4
<PAGE>
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.
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," "Mortgage
Loans--Credit Support" and "--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.
5
<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 FIND The underwriters may assist in resales of
AN INVESTOR TO PURCHASE YOUR certificates, but they are not required to do
CERTIFICATES 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 BE The certificates will represent interests only
PAID FROM TRUST ASSETS 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 AND Each trust generally will consist of a smaller
MULTIFAMILY MORTGAGE LOANS IS number of higher balance loans than would a
RISKIER THAN INVESTMENT IN pool of single-family loans of comparable
SINGLE-FAMILY MORTGAGE LOANS aggregrate unpaid principal 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
6
<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--Mortgage
Loans--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.
7
<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 and
PRESENT VALUE OF PROCEEDS TO otherwise modify mortgage loans that are in
CERTIFICATEHOLDERS 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.
8
<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 WILL The price you paid for your certificates and
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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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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ASSIGNMENTS OF LEASES AND If a mortgaged property is subject to leases,
RENTS MAY AFFECT PAYMENTS TO related mortgage loan typically will be secured
CERTIFICATEHOLDERS 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 mortgage
SUBJECT THE MORTGAGED PROPERTY loan may be subject to environmental risks.
TO LIENS OR IMPOSE COSTS ON Under some state laws, contamination of real
THE PROPERTY OWNER 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 116 in this prospectus.
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
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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,
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
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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 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
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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 Subject to Risks" and "--Balloon Payments; Borrower Default."
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
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for 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
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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,
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
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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 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
Loans--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."
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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
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.
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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 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
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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 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 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,
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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;
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
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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 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
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o provides for constant scheduled payments even if its mortgage rate has been
adjusted.
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 "--Yield and
Prepayment Considerations" above.
Foreclosures and Payment Plans.
The number of foreclosures and the principal amount of the mortgage loans
that are foreclosed in relation to the number and principal amount of mortgage
loans that are repaid in accordance with their terms will affect the weighted
average lives of those mortgage loans and, accordingly, the weighted average
lives of and yields on the certificates of the related series. Servicing
decisions made 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.
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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.
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 650 Dresher Road,
Horsham, Pennsylvania 19044. Its telephone number is (215) 328-3164. The
depositor does not have, nor is it expected in the future to have, any
significant assets.
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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 650 Dresher 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
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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 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.
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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 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,
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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 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,
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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. 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.
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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. 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;
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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;
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 clauses (1)-(3) 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.
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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.
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
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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.
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.
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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
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
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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.
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
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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;
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
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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.
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.
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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.
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
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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 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;
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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."
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:
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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:
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
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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 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
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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;
(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
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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 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;
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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.
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
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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.
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.
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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 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.
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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.
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:
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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.
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:
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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 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
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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 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
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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.
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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 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
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the extent specified in the related prospectus supplement, the rights of the
holders of subordinate certificates to receive distributions from the
certificate account on any distribution date will be subordinated to the
corresponding rights of the holders of 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
Trusts--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
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prospectus. A mortgage creates a lien upon, or grants a title interest in, the
real property covered thereby, and represents the security for the repayment of
the indebtedness customarily evidenced by a promissory note.
The priority of the lien created or interest granted 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
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require that the lender take possession of the property or obtain a
court-appointed receiver or both before becoming entitled to collect the rents.
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.
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A foreclosure action is subject to most of the delays and expenses of
other lawsuits if defenses are raised or counterclaims are interposed, and
sometimes requires several years to complete.
Judicial Foreclosure.
A judicial foreclosure proceeding is conducted in a court having
jurisdiction over the mortgaged property. 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
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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 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 Subject to
Risks."
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
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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 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
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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 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.
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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 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
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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
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
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"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 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.
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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."
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
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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 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.
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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 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.
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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 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,
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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 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
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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
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 would permit you to
elect to accrue de minimis OID into income currently based on a constant yield
method. See "--Taxation of Owners of REMIC Regular Certificates--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.
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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.
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.
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
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premium in income as interest, based on a constant yield method. If this
election were made for a REMIC 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 and
possibly for instruments acquired before the election. 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
"--Taxation of Owners of REMIC Regular Certificates--Premium" below. Each of
these elections to accrue interest, discount and premium for a certificate on a
constant yield method or as interest would be irrevocable.
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 "--Taxation of Owners of REMIC Regular Certificates--Original Issue
Discount" above. This treatment would 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
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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 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 "--Taxation of Owners of REMIC Regular
Certificates--Market Discount" above. The committee report states that the same
rules that apply to accrual of market discount, which 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
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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 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
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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 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 "--Taxation of Owners of REMIC Regular Certificates--OID." 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
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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.
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 "--Taxation of Owners of REMIC Regular
Certificates--Original Issue Discount," except that the de minimis rule and the
adjustments for subsequent holders of REMIC regular certificates, including any
other class of REMIC certificates constituting regular interests in the REMIC
not offered 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
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would be amortized under a constant yield method in a manner analogous to the
method of accruing OID described above under "--Taxation of Owners of REMIC
Regular Certificates--Original Issue Discount."
As a general rule, the taxable income of a REMIC will be determined in the
same manner as if the REMIC were an individual having the calendar year as its
taxable year and using the accrual method of accounting. However, no item of
income, gain, loss or deduction allocable to a prohibited transaction will be
taken into account. See "--Prohibited Transactions Tax and Other Taxes" below.
Further, the limitation on miscellaneous itemized deductions imposed on
individuals by Section 67 of the Code, which allows 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.
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
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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--General"
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 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.
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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 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.
Noneconomic REMIC Residual Certificates. Under the REMIC Regulations,
transfers of "noneconomic" REMIC residual certificates will be disregarded for
all federal income tax purposes if "a significant purpose of the transfer was
to enable the transferor to impede the assessment or collection of tax." If 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
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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--REMIC
Residual Certificates" below for additional restrictions on transfers of REMIC
residual certificates to foreign persons.
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, Section 68 of the Code provides that the amount of
itemized deductions otherwise allowable for an individual whose adjusted gross
income exceeds a specified amount will be reduced by the lesser of 3% of the
excess of the individual's adjusted gross income over the specified amount or
80% of the amount of itemized deductions otherwise allowable for the taxable
year. The amount of additional taxable income reportable by REMIC
certificateholders that are subject to the limitations of either Section 67 or
Section 68 of the Code may be substantial. In addition, in determining the
alternative minimum taxable income of a holder of a
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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 "--Taxation
of Owners of REMIC Residual Certificates--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. Currently, the maximum tax rate on ordinary income and short term
capital gains for individuals is 39.6% and the maximum tax rate for long term
capital gains of individuals is 20%. There is no rate differential for
corporations. 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
"--Taxation of Owners of REMIC Regular Certificates--Market Discount" and
"--Premium."
REMIC certificates will be "evidences of indebtedness" within the meaning
of Section 582(c)(1) of the Code, so that gain or loss recognized from the sale
of a REMIC certificate by a bank or thrift institution to which 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
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interest in a REMIC or any similar interest in a "taxable mortgage pool," as
defined in Section 7701(i) of the Code, during the period beginning six months
before, and ending six months after, the date of 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 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. Unless otherwise disclosed in the
related prospectus supplement, it is not anticipated that any REMIC will
recognize net income from foreclosure property subject to federal income tax.
Unless otherwise disclosed in the related prospectus supplement, it is not
anticipated that any material state or local income or franchise tax will be
imposed on any REMIC.
Unless otherwise stated in the related prospectus supplement, and to the
extent permitted by then applicable laws, any prohibited transactions tax,
contributions tax, tax on net income from foreclosure property or state or
local income or franchise tax that may be imposed on the REMIC will be borne by
the related master servicer, special servicer, manager or trustee in any case
out of its own funds, provided that 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.
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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 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.
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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 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
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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 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 "--Taxation of Owners of REMIC Regular
Certificates--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.
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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 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 fiduciaries 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 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.
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GRANTOR TRUST
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 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, Section 68 of the Code provides that the amount of itemized
deductions otherwise allowable for an individual whose adjusted gross income
exceeds a specified amount will be reduced by the lesser of 3% of the excess of
the individual's adjusted gross income over the specified amount or 80% of the
amount of itemized deductions otherwise allowable for the taxable year. The
amount of additional taxable income reportable by holders of grantor trust
fractional interest certificates who are subject to the limitations of either
Section 67 or Section 68 of the Code may be substantial. Further,
certificateholders, other than corporations, subject to the alternative minimum
tax may not deduct miscellaneous itemized deductions in determining 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
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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 "--Taxation of Owners of Grantor
Trust Fractional Interest Certificates--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 than qualified
stated interest, if any, as well as the certificate's share of reasonable
servicing fees and other expenses. See "--Taxation of Owners of Grantor Trust
Fractional Interest Certificates--If Stripped Bond Rules Do Not Apply" for a
definition of qualified stated interest. In general, the amount of 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
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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. Regulations could be adopted applying those provisions to the
grantor trust fractional interest certificates. It is unclear whether those
provisions would be applicable to the grantor trust fractional interest
certificates or whether use of a reasonable prepayment assumption may be
required or permitted without reliance on these rules. It is also uncertain, if
a prepayment assumption is used, whether the assumed prepayment rate would be
determined based on conditions at the time of the first sale of the grantor
trust fractional interest certificate or 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, whether 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.
If a prepayment assumption is not used, when a mortgage loan prepays in
full, if your grantor trust fractional interest certificate was acquired at a
discount or a premium, you will generally recognize ordinary income or loss
equal to the difference between the portion of the prepaid principal amount of
the mortgage loan that is allocable to the certificate and the portion of the
adjusted basis of the certificate that is allocable to your interest in the
mortgage loan. If a prepayment assumption is used, it appears that no separate
item of income or loss should be recognized upon a prepayment. Instead, a
prepayment should be treated as a partial payment of the stated redemption
price of the grantor trust fractional interest certificate and accounted for
under a method similar to that described for taking account of OID on REMIC
regular certificates. See "--REMICs--Taxation of Owners of REMIC Regular
Certificates--Original Issue Discount." It is unclear whether any other
adjustments would be required to reflect differences between an assumed
prepayment rate and the actual rate of prepayments.
In the absence of statutory or administrative clarification, it is
currently intended to base information reports or returns to the IRS and
certificateholders in
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transactions subject to the stripped bond rules on a prepayment assumption that
will be disclosed in the related prospectus supplement and on a constant yield
computed using a representative initial offering price for each class of
certificates. However, neither the depositor nor any other person will make any
representation that the mortgage loans will in fact prepay at a rate conforming
to 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 original bond is no more
than one percentage point lower than the gross interest rate payable on the
original mortgage loan, before subtracting any servicing fee or any
stripped coupon.
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 "--Taxation of
Owners of Grantor Trust Fractional Interest Certificates--If Stripped Bond
Rules Do Not Apply" and "--Market Discount" below.
If Stripped Bond Rules Do Not Apply. Subject to the discussion below on
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. The OID rules will apply, even if the stripped bond rules do not
apply, to a grantor trust fractional interest certificate if it evidences an
interest in mortgage loans issued with OID.
The OID, if any, on the mortgage loans will equal the difference between
the stated redemption price of the mortgage loans and their issue price. In
general, the issue price of a mortgage loan will be the amount received by the
borrower from the lender under the terms of the mortgage loan, less any points
paid by the borrower, and the stated redemption price of a mortgage loan will
equal its principal amount, unless the mortgage loan provides for an initial
teaser, or below-market interest rate.
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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 "--Taxation of
Owners of REMIC Regular Certificates--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 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.
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Market Discount. If the stripped bond rules do not apply to a grantor
trust fractional interest certificate, you may be subject to the market
discount rules of the Code if 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 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 "--Taxation of Owners of REMIC Regular Interests--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--Taxation of Owners of REMIC Regular Certificates--Original Issue
Discount" above with the exception that it is less likely that a prepayment
assumption will be used in the application of these rules to the mortgage
loans.
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Further, under the rules described in "--REMICs--Taxation of Owners of
REMIC Regular Certificates--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 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--Taxation of Owners of
REMIC Regular Certificates--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 "--Taxation of
Owners of Grantor Trust Fractional Interest Certificates--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 Proposed Contingent Payment Rules" below and assumes
that the holder of a grantor trust strip certificate will not own any grantor
trust fractional interest certificates.
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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.
As noted above, the Code requires that a prepayment assumption be used in
computing the accrual of OID on some categories of debt instruments, and that
adjustments be made in the amount and rate of accrual of this OID when
prepayments do not conform to the prepayment assumption. Regulations could be
adopted applying those provisions to the grantor trust strip certificates. It
is unclear whether those provisions would be applicable to the grantor trust
strip certificates or whether use of a prepayment assumption may be required or
permitted in the absence of any regulations. It is also uncertain, if a
prepayment assumption is used, whether the assumed prepayment rate would be
determined based on conditions at the time of the first sale of the grantor
trust strip certificate or, 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,
or if the prepayment assumption is not used, 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.
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Possible Application of Proposed Contingent Payment Rules. The coupon
stripping rules generally treat stripped coupons as newly issued debt
instruments to each purchaser. If payments on the grantor trust strip
certificates would cease if the mortgage loans were prepaid in full, the
grantor trust strip certificates could be considered to be debt instruments
providing for contingent payments. Under the OID Regulations, debt instruments
providing for contingent payments are not subject to the same rules as debt
instruments providing for noncontingent payments. Treasury regulations were
promulgated on contingent payment debt instruments, but it appears that the
grantor trust strip certificates, due to their similarity to other
mortgage-backed securities, such as REMIC regular interests, that are expressly
exempted from the application of the proposed regulations, may also be excepted
from the proposed regulations. Like the OID Regulations, the proposed
regulations do not specifically address securities like the grantor trust strip
certificates that are subject to the stripped bond rules of the Code.
If the contingent payment rules under the proposed regulations were to
apply, you would be required to apply the noncontingent bond method. Under the
noncontingent bond method, the issuer of a grantor trust strip certificate
determines a projected payment schedule on which interest will accrue. You
would be bound by the issuer's projected payment schedule. The projected
payment schedule consists of all noncontingent payments and a projected amount
for each contingent payment based on the comparable yield of the grantor trust
strip certificate. The projected amount of each payment is determined so that
the payment schedule reflects the comparable yield. The projected amount of
each payment must reasonably reflect the relative expected values of the
payments to be received by you in the manner prescribed by the regulations. The
comparable yield is generally the yield at which the issuer would issue a fixed
rate debt instrument with terms and conditions similar to those of the grantor
trust strip certificates, including the level of subordination, term, timing of
payments and general market conditions. 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.
Assuming that a prepayment assumption were used, if the proposed
regulations or their principles were applied to grantor trust strip
certificates, the amount of income reported on these certificates would be
substantially similar to that described under "Taxation of Owners of Grantor
Trust Strip Certificates."
You should consult your tax advisor concerning the application of the
contingent payment rules to the grantor trust strip certificates.
Sales of Grantor Trust Certificates.
Any gain or loss, equal to the difference between the amount realized on
the sale or exchange of a grantor trust certificate and its adjusted basis,
recognized on the sale or exchange of a grantor trust certificate will be
capital gain or loss if you hold the grantor trust certificate as a capital
asset, except for any amount of accrued and unrecognized market discount, which
will be treated as ordinary income, and, in the case of banks and other
financial institutions, except as provided under Section 582(c) of the Code.
The adjusted basis of a grantor trust certificate generally
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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. Currently, the maximum tax rate
for individuals on ordinary income and short-term capital gains is 39.6% and
the maximum tax rate for long-term capital gains of individuals is 20%. There
is no rate differential for corporations. In addition, the distinction between
a capital gain or loss and ordinary income or loss remains relevant for other
purposes.
Gain or loss from the sale of a grantor trust certificate may be partially
or wholly ordinary and not capital in 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. Furthermore, a portion of any gain that might
otherwise be capital gain may be treated as ordinary income if the grantor
trust certificate is held as part of a "conversion transaction" within the
meaning of Section 1258 of the Code. A conversion transaction generally is one
in which the taxpayer has taken two or more positions in the same or similar
property that reduce or eliminate market risk, if substantially all of the
taxpayer's return is attributable to the time value of the taxpayer's net
investment in the transaction. The amount of gain realized in a conversion
transaction that is recharacterized as ordinary income generally will not
exceed the amount of interest that would have accrued on the taxpayer's net
investment at 120% of the appropriate applicable Federal rate at the time the
taxpayer enters into the conversion transaction, subject to reduction for prior
inclusion of interest and other ordinary income items from the transaction.
Finally, a taxpayer may elect to have net capital gain taxed at ordinary
income rates rather than capital gains rates 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 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,
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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.
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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.
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.
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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 the Code.
PROHIBITED TRANSACTION EXEMPTION
On March 29, 1994, the DOL issued an individual exemption (Prohibited
Transaction Exemption 94-29, 59 FR 14674) 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 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 860 D 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.
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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 Structured Rating Group, Moody's Investors Service, Inc.,
Duff & Phelps Credit Rating Co. or IBCA.
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 and 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.
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.
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 certificates insured or guaranteed by
Federal Agricultural Mortgage Corporation,
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,
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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.
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.
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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" within the meaning of Section 3(14) of ERISA, or a
"disqualified person" within the meaning of Section 4975(e)(2) of the Code,
with respect to an investing plan by virtue of providing services to the plan,
or by virtue of having certain specified relationships to 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.
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,
Parts 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
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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 proposed 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 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--Taxation of Owners of REMIC
Residual Certificates-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
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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 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
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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.
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.
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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 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.
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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.
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.
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.
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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.
650 Dresher Road
Horsham, Pennsylvania 19044
(215) 328-3164
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.
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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.
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.
117
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"GMAC00C1.xls" is a Microsoft Excel*, Version 5.0 spreadsheet that
provides in electronic format certain information shown in Annex A in the
prospectus supplement. In Annex A, 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. No
dealer, salesman or other person has been authorized to give any information or
to make any representations not contained in this prospectus supplement and the
prospectus and, if given or made, such information or representations must not
be relied upon as having been authorized by the depositor or by the
underwriters. This prospectus supplement and the prospectus do not constitute
an offer to sell, or a solicitation of an offer to buy, the securities offered
hereby to anyone in any jurisdiction in which the person making such offer or
solicitation is not qualified to do so or to anyone to whom it is unlawful to
make any such offer or solicitation. Neither the delivery of this prospectus
supplement and the prospectus nor any sale made hereunder shall, under any
circumstances, create an implication that information in this prospectus
supplement or therein is correct as of any time since the date of this
prospectus.
<PAGE>
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No dealer, salesman or other person has been authorized to give any
information or to make any representations not contained in this prospectus
supplement and the prospectus and, if given or made, such information or
representations must not be relied upon as having been authorized by the
depositor or by the underwriters. This prospectus supplement and the prospectus
do not constitute an offer to sell, or a solicitation of an offer to buy, the
securities offered hereby to anyone in any jurisdiction in which the person
making such offer or solicitation is not qualified to do so or to anyone to
whom it is unlawful to make any such offer or solicitation. Neither the
delivery of this prospectus supplement and the prospectus nor any sale made
hereunder shall, under any circumstances, create an implication that
information in this prospectus supplement or therein is correct as of any time
since the date of this prospectus.
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
PAGE
------
Summary ......................................... S-7
Risk Factors .................................... S-14
Description of the Mortgage Pool ................ S-40
Servicing of the Mortgage Loans ................. S-68
Description of the Certificates ................. S-79
Yield and Maturity Considerations ............... S-99
Federal Income Tax Consequences ................. S-114
Method of Distribution .......................... S-117
Legal Matters ................................... S-118
Ratings ......................................... S-118
Legal Investment ................................ S-120
ERISA Considerations ............................ S-120
Annex A--Characteristics of the Mortgage
Loans ........................................ A-1
Annex B--Form of Statement to
Certificateholders and Servicer Reports ...... B-1
Annex C--Structural and Collateral Term
Sheet ........................................ C-1
Annex D--Global Clearance, Settlement
and Tax Documentation Procedures ............. D-1
PROSPECTUS
Prospectus Supplement ........................... 3
Summary of Prospectus ........................... 3
Risk Factors .................................... 6
Description of the Trust Funds .................. 11
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 ................... 58
Legal Aspects of Mortgage Loans ................. 60
Federal Income Tax Consequences ................. 73
State and Other Tax Consequences ................ 105
ERISA Considerations ............................ 110
Legal Investment ................................ 110
Use of Proceeds ................................. 110
Method of Distribution .......................... 112
Legal Matters ................................... 114
Financial Information ........................... 114
Rating .......................................... 115
Glossary ........................................ 116
$802,144,000
(Approximate)
GMAC COMMERCIAL
MORTGAGE SECURITIES, INC.
MORTGAGE PASS-THROUGH
CERTIFICATES, SERIES 2000-C1
---------------------------------------
PROSPECTUS SUPPLEMENT
---------------------------------------
GOLDMAN, SACHS & CO.
DEUTSCHE BANC ALEX. BROWN
NEWMAN AND ASSOCIATES, INC.
as a member of the selling party
March , 2000
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