<PAGE>
Filed Pursuant to Rule 424(b)(5)
Registration File No.: 333-45256
THE INFORMATION IN THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS
IS NOT COMPLETE AND MAY BE CHANGED. WE MAY NOT SELL THESE SECURITIES UNTIL WE
DELIVER A FINAL PROSPECTUS SUPPLEMENT AND ACCOMPANYING PROSPECTUS. THIS
PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS ARE NOT AN OFFER TO SELL
NOR ARE THEY SEEKING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE
OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED NOVEMBER 20, 2000
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED NOVEMBER 20, 2000
$1,128,114,000 (APPROXIMATE)
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
Depositor
GMAC COMMERCIAL MORTGAGE CORPORATION
Servicer
SERIES 2000-C3 MORTGAGE PASS-THROUGH CERTIFICATES
-------------------------- THE CERTIFICATES WILL CONSIST OF:
| YOU SHOULD CONSIDER |
| CAREFULLY THE RISK | o The 5 classes of offered certificates
| FACTORS BEGINNING ON | described in the table on page S-5.
| PAGE S-18 IN THIS |
| PROSPECTUS SUPPLEMENT | o 18 additional classes of private
| AND PAGE 6 IN THE | certificates, 17 of which are subordinated
| PROSPECTUS. | to, and provide credit enhancement for, the
| The certificates | offered certificates. The private
| represent interests | certificates are not offered by this
| only in the trust | prospectus supplement.
| created for Series |
| 2000-C3. They do not | THE ASSETS UNDERLYING THE CERTIFICATES WILL
| represent interests in | INCLUDE:
| or obligations of |
| GMAC Commercial | o A pool of 175 fixed rate, monthly pay
| Mortgage Securities, | mortgage loans secured by first priority
| Inc., GMAC | liens on 197 commercial and multifamily
| Commercial Mortgage | residential properties. The mortgage pool
| Corporation or any of | will have an initial pool balance of
| their affiliates. | approximately $1,274,707,224.
| This prospectus |
| supplement may be | CREDIT ENHANCEMENT:
| used to offer and sell |
| the offered certificates | o The subordination of certificates other than
| only if accompanied | the Class A-1 and A-2 certificates will
| by the prospectus. | provide credit enhancement to the Class A-1
-------------------------- and A-2 certificates. Each class of
subordinated certificates will provide credit
enhancement to subordinated certificates with
earlier alphabetical class designations.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED THE OFFERED CERTIFICATES OR DETERMINED THAT THIS
PROSPECTUS SUPPLEMENT OR THE PROSPECTUS IS ACCURATE OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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
DEUTSCHE BANC ALEX. BROWN GOLDMAN, SACHS & CO.
NOVEMBER , 2000
<PAGE>
[THE NARRATIVE AND/OR TABULAR INFORMATION BELOW IS A FAIR AND ACCURATE
DESCRIPTION OF GRAPHIC OR IMAGE MATERIAL OMITTED FOR THE
PURPOSE OF EDGAR FILING.]
[MAP OF UNITED STATES]
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
--------------------------------------------------------------------------------
Mortgage Pass-Through Certificates, Series 2000-C3
Washington New Mexico South Carolina Rhode Island Michigan
6 properties 2 properties 3 properties 3 properties 4 properties
$23,804,587 $8,810,794 $16,420,526 $1,897,538 $24,134,678
1.87% of total 0.69% of total 1.29% of total 0.15% of total 1.89% of total
Oregon Texas North Carolina Connecticut Wisconsin
2 properties 28 properties 7 properties 8 properties 1 property
$6,835,978 $123,280,284 $37,813,320 $41,967,857 $2,919,727
0.54% of total 9.67% of total 2.97% of total 3.29% of total 0.23% of total
California Mississippi Kentucky Massachusetts Illinois
19 properties 1 property 2 properties 5 properties 7 properties
$126,030,393 $839,427 $3,394,377 $37,446,311 $18,578,346
9.89% of total 0.07% of total 0.27% of total 2.94% of total 1.46% of total
Nevada Tennessee Virginia Vermont Minnesota
6 properties 1 property 6 properties 1 properties 6 properties
$49,806,601 $2,672,175 $125,025,894 $5,185,037 $27,330,181
3.91% of total 0.21% of total 9.81% of total 0.41% of total 2.14% of total
Utah Alabama Maryland Pennsylvania Iowa
1 property 1 property 6 properties 10 properties 3 properties
$6,495,813 $2,925,669 $43,562,322 $45,039,347 $1,330,212
0.51% of total 0.23% of total 3.42% of total 3.53% of total 0.10% of total
Arizona Florida New Jersey Ohio Missouri
7 properties 18 properties 6 properties 2 properties 1 property
$160,602,136 $136,608,723 $27,649,482 $6,327,527 $1,995,716
12.60% of total 10.72% of total 2.17% of total 0.50% of total 0.16% of total
Colorado Georgia New York Indiana Idaho
3 properties 5 properties 14 properties 1 properties 1 property
$53,814,748 $24,003,721 $72,889,659 $872,266 $6,395,852
4.22% of total 1.88% of total 5.72% of total 0.07% of total 0.50% of total
Distribution of Property Types
[PIE CHART]
Retail 40.97%
Multifamily 30.54%
Office 15.69%
Lodging 7.44%
Industrial 3.60%
Other 1.76%
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
mortgage properties, each of which is allocated a cut-off date balance based on
the mortgaged properties' allocated principal amounts.
[ ] [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-C3 TRANSACTION .................................... S-8
Relevant Parties and Important Dates ................................... S-8
The Mortgage Pool ...................................................... S-8
Geographic Concentrations of the Mortgaged Properties .................. S-9
Property Types ......................................................... S-9
Prepayment or Call Protection Provided by the Mortgage Loans ........... S-10
Payment Terms of the Mortgage Loans .................................... S-10
Companion Loans ........................................................ S-10
Intercreditor Agreements ............................................... S-10
The Certificates ....................................................... S-11
Certificate Designations ............................................... S-11
Initial Certificate Balances of the Certificates ....................... S-11
Distributions on the Offered Certificates .............................. S-12
Subordination of Classes of Certificates ............................... S-13
Allocation of Losses and Expenses to Classes of Certificates ........... S-14
Advances Made by the Servicer .......................................... S-14
Optional Termination of the Trust ...................................... S-15
Book-Entry Registration ................................................ S-15
Denominations .......................................................... S-15
Yield and Prepayment Considerations .................................... S-15
Legal Investment in the Certificates ................................... S-16
ERISA Considerations for Certificateholders ............................ S-16
Tax Status of the Certificates ......................................... S-16
Ratings on the Certificates ............................................ S-16
RISK FACTORS ............................................................. S-18
DESCRIPTION OF THE MORTGAGE POOL ......................................... S-48
Calculations of Interest ............................................... S-48
Balloon Loans .......................................................... S-48
ARD Loans .............................................................. S-49
Amortization of Principal .............................................. S-50
Due Dates .............................................................. S-50
Defeasance ............................................................. S-50
Prepayment Provisions .................................................. S-51
S-2
<PAGE>
PAGE
----
Related Borrowers, Cross-Collateralized Mortgage Loans and
Mortgage Loans Collateralized by Multiple Properties ............... S-51
Due-on-Sale and Due-on-Encumbrance Provisions ......................... S-52
Secured Subordinate Financing.......................................... S-52
Unsecured Subordinate and Mezzanine Financing............ ............. S-53
Ground Leases ......................................................... S-53
Loan Documentation .................................................... S-54
Significant Mortgage Loans ............................................ S-54
The Arizona Mills Loan ................................................ S-54
The MacArthur Center Loan ............................................. S-57
The 1999 Broadway Loan ................................................ S-63
The Drucker & Faulk Multifamily Portfolio Loans ....................... S-64
The AmeriSuites Loan .................................................. S-65
The Sellers and Originators ........................................... S-70
Underwriting Matters .................................................. S-71
Hazard, Liability and Other Insurance ................................. S-73
Earnouts and Additional Collateral Loans .............................. S-73
Assignment of the Mortgage Loans; Repurchases and Substitutions ....... S-74
Representations and Warranties; Repurchases ........................... S-75
Pool Characteristics; Changes in Mortgage Pool ........................ S-79
SERVICING OF THE MORTGAGE LOANS ......................................... S-81
The Servicer .......................................................... S-81
Servicing Standard .................................................... S-81
Specially Serviced Mortgage Loans ..................................... S-82
Termination of the Servicer for Specially Serviced Mortgage
Loans and REO Properties ............................................ S-83
Servicing and Other Compensation and Payment of Expenses .............. S-84
Modifications, Waivers, Amendments and Consents ....................... S-87
Enforcement of ARD Loans .............................................. S-89
Sale of Defaulted Mortgage Loans ...................................... S-89
REO Properties ........................................................ S-90
Inspections; Collection of Operating Information ...................... S-91
THE INTERCREDITOR AGREEMENTS, COMPANION LOANS AND LOAN GROUPS ........... S-91
Allocation of Payments Between Mortgage Loans and Companion Loans ..... S-91
Directions to Servicers ............................................... S-93
Assignment of Companion Holder Rights ................................. S-93
Purchase of Loan Group by the Class S Certificateholders .............. S-94
Deposits into Collection Account and Subaccounts ...................... S-94
Collection Account .................................................... S-95
THE POOLING AND SERVICING AGREEMENT ..................................... S-95
Realization Upon Defaulted Mortgage Loans ............................. S-98
Due-on-Sale and Due-on-Encumbrance Provisions ......................... S-100
Certain Matters Regarding the Servicer and the Depositor .............. S-100
Intercreditor Matters Concerning Loan Groups .......................... S-101
DESCRIPTION OF THE CERTIFICATES ......................................... S-103
Denominations ......................................................... S-103
Book-Entry Registration of the Offered Certificates ................... S-104
Certificate Balances and Notional Amounts ............................. S-107
Pass-Through Rates .................................................... S-107
S-3
<PAGE>
PAGE
----
Distributions ........................................................ S-108
Distributions of Prepayment Premiums ................................. S-111
Distributions of Excess Interest...................................... S-112
Distributions of Excess Liquidation Proceeds ......................... S-112
Treatment of REO Properties .......................................... S-112
Interest Reserve Account ............................................. S-113
Subordination; Allocation of Losses and Expenses ..................... S-113
P&I Advances ......................................................... S-115
Appraisal Reductions ................................................. S-116
Reports to Certificateholders; Available Information ................. S-118
Information Available Electronically ................................. S-120
Other Information .................................................... S-121
Voting Rights ........................................................ S-122
Termination; Retirement of Certificates .............................. S-122
The Trustee and Fiscal Agent ......................................... S-123
YIELD AND MATURITY CONSIDERATIONS ...................................... S-124
Yield Considerations ................................................. S-124
Factors that Affect the Rate and Timing of Payments and Defaults ..... S-125
Delay in Payment of Distributions .................................... S-126
Unpaid Distributable Certificate Interest ............................ S-126
Weighted Average Life ................................................ S-126
Price/Yield Tables ................................................... S-132
FEDERAL INCOME TAX CONSEQUENCES ........................................ S-136
Original Issue Discount and Premium .................................. S-136
New Withholding Regulations .......................................... S-137
Characterization of Investments in Offered Certificates .............. S-138
METHOD OF DISTRIBUTION.................................................. S-138
LEGAL MATTERS .......................................................... S-140
RATINGS ................................................................ S-140
LEGAL INVESTMENT ....................................................... S-140
ERISA CONSIDERATIONS ................................................... S-141
GLOSSARY ............................................................... S-143
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
S-4
<PAGE>
SUMMARY OF SERIES 2000-C3 MORTGAGE PASS-THROUGH
CERTIFICATES AND POOL CHARACTERISTICS
THE SERIES 2000-C3 MORTGAGE PASS-THROUGH CERTIFICATES
<TABLE>
<CAPTION>
APPROXIMATE INITIAL APPROXIMATE
ORIGINAL PRINCIPAL PERCENT OF PASS- WEIGHTED AVG. PRINCIPAL
RATINGS OR NOTIONAL CREDIT THROUGH LIFE (3) WINDOW (4)
CLASS FITCH/MOODY'S AMOUNT (1) SUPPORT (2) RATE (IN YEARS) (MONTH/YEAR)
----- ------------- ---------- ----------- ---- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
X(5)
A-1 AAA/Aaa $148,566,000 21.25% %(8) 5.68 1/01 - 4/10
A-2 AAA/Aaa $855,265,000 21.25% %(8) 9.74 4/10 - 11/10
B AA+/Aa2 $ 54,175,000 17.00% %(9) 9.92 11/10 - 11/10
C A+/A2 $ 57,361,000 12.50% %(9) 9.92 11/10 - 11/10
D A/A3 $ 12,747,000 11.50% %(9) 9.92 11/10 - 11/10
E(5)
F(5)
G(5)
H(5)
J(5)
K(5)
L(5)
M(5)
N(5)
O(5)
P(5)
S-AM (11)(5)
S-MAC-1 (11)(5)
S-MAC-2 (11)(5)
</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 percent of credit support reflects the aggregate certificate balances
of all classes of certificates (other than the Class S certificates) that
will be subordinate to each class on the date the certificates are
issued, expressed as a percentage of the initial pool balance.
(3) 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 September,
2035.
(4) The principal window is the period during which each class would receive
distributions of principal assuming that there are no prepayments on the
mortgage loans and according to the maturity assumptions described under
"Yield and Maturity Considerations" in this prospectus supplement. The
principal window for the Class X certificates is the period during which
that class would have an outstanding notional balance, based on the same
assumptions.
S-5
<PAGE>
(5) This class is not offered by this prospectus supplement.
(6) 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.
(7) 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."
(8) The pass-through rate for the Class A-1 and A-2 certificates is a fixed
rate.
(9) Lesser of the specified fixed rate or weighted average net mortgage rate.
(10) Weighted average net mortgage rate.
(11) References to certificates, classes of certificates or certificateholders
in this prospectus supplement include the Class S certificates and
certificateholders except as otherwise provided herein.
S-6
<PAGE>
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 December, 2000. All weighted averages set forth below are
based on the balances of the mortgage loans in the mortgage pool as of that
date. The balance of each mortgage loan as of the due date for any mortgage
loan in December, 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. Each of the AmeriSuites loans and the MacArthur
Center loans consist of a mortgage loan and one or more companion loans that
are subordinated to the respective mortgage loan under the terms of an
intercreditor agreement. Together, each set of mortgage loans and companion
mortgage loans are referred to as a loan group. The initial pool balance and
the mortgage pool include only:
o the mortgage loan (and none of the companion loans) in each loan group,
and
o each of the other mortgage loans not included in a loan group.
Accordingly, all numerical and statistical information provided herein
with respect to the initial mortgage pool and mortgage pool is presented and
calculated solely with respect to the mortgage loans (and none of the companion
loans) in such loan group and each of the other mortgage loans not included in
a loan group.
SERIES 2000-C3 MORTGAGE POOL CHARACTERISTICS
<TABLE>
<CAPTION>
CHARACTERISTICS ENTIRE MORTGAGE POOL
--------------- --------------------
<S> <C>
Initial pool balance .................................... $1,274,707,224
Number of mortgage loans ................................ 175
Number of mortgaged properties .......................... 197
Average balance as of the cut-off date .................. $7,284,041
Range of mortgage rates as of the cut-off date .......... 7.437% to 9.630%
Weighted average mortgage rate .......................... 8.147%
Weighted average remaining term to maturity or
anticipated repayment date ............................ 119.1 months
Weighted average debt service coverage ratio ............ 1.43x
Weighted average loan-to-value ratio .................... 68.58%
</TABLE>
The calculation of loan-to-value ratio and debt service coverage ratio is
described in Annex A to this prospectus supplement. In the case of each loan
group, DSCR and LTV have been calculated only with respect to the related
mortgage loan and not any related companion loans. The mortgage rate for the
mortgage loan and companion loans in the MacArthur Center loan group have not
been established as of the date of this preliminary prospectus supplement and
have been estimated for purposes of calculating debt service coverage ratios
and weighted average mortgage rates in this prospectus supplement. Accordingly,
the debt service coverage ratios and weighted average net mortgage rates herein
are subject to change.
S-7
<PAGE>
SUMMARY OF SERIES 2000-C3 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>
-------------------------------------------------------------------------------------------
RELEVANT PARTIES AND IMPORTANT DATES
<S> <C> <C>
TITLE OF SERIES: Series 2000-C3 Mortgage CUT-OFF DATES: December 1, and
Pass-Through Certificates December 5, 2000
THE ISSUER: GMAC Commercial Mortgage DISTRIBUTION DATE: The 15th day
Securities, Inc. Series 2000-C3 of each month or, if the 15th day
Trust formed to issue the is not a business day, the
mortgage pass-through immediately succeeding
certificates and to acquire the business day, beginning on
mortgage pool and the January 16, 2001.
companion loans.
DEPOSITOR: GMAC Commercial Mortgage CLOSING DATE: On or about
Securities, Inc. December 14, 2000.
200 Witmer Road
Horsham, Pennsylvania DETERMINATION DATE: The 5th
19044-8015 day of each month or, if the 5th
(215) 328-4622 day is not a business day, the
immediately succeeding business
ORIGINATORS: Archon Financial, L.P.; day.
Residential Funding
Corporation; GMAC COLLECTION PERIOD: For any
Commercial Mortgage distribution date, the period that
Corporation; and German begins immediately following the
American Capital Corporation determination date in the prior
calendar month and continues
SELLERS: GMAC Commercial Mortgage through and includes the
Corporation; German American determination date in the
Capital Corporation; and calendar month in which that
Goldman Sachs Mortgage distribution date occurs. The first
Company collection period, however, for
each mortgage loan begins
SERVICER: GMAC Commercial Mortgage immediately following its cut-off
Corporation date.
TRUSTEE: LaSalle Bank National
Association
FISCAL AGENT: ABN AMRO Bank N.V.
-------------------------------------------------------------------------------------------
</TABLE>
THE MORTGAGE POOL
The mortgage pool will consist of 175 mortgage loans including two mortgage
loans that, together with one or more related companion loans, are secured by
one or more related mortgaged properties. Each of these two mortgage loans and
the one or more related companion loans are referred to collectively as a loan
group. The initial pool balance and the mortgage pool only include the mortgage
loan (and not the companion loan) in each loan group and each other mortgage
loan that is not included in a loan group. The assets of the trust consist of,
among other things, the mortgage loans and the companion loans. Each of the
mortgage
S-8
<PAGE>
loans and companion loans is secured by first mortgage liens on real property
interests held by mortgagors that own or lease the mortgaged properties. The
mortgaged properties are used for commercial or multifamily residential
purposes. In the case of each loan group, reference to a mortgage loan or the
mortgage pool in this prospectus supplement excludes the related companion
loans unless otherwise provided. See "The Intercreditor Agreements, Companion
Loans and Loan Groups" in this prospectus supplement.
GMAC Commercial Mortgage Corporation originated 54 of the mortgage loans or
33.68% of the initial pool balance. One of such mortgage loans or 2.34% of the
initial pool balance was sold by GMAC Commercial Mortgage Corporation to
Goldman Sachs Mortgage Company. Residential Funding Corporation originated 51
of the mortgage loans or 13.83% of the initial pool balance, all of which were
acquired by GMAC Commercial Mortgage Corporation. German American Capital
Corporation originated or acquired 29 of the mortgage loans or 24.53% of the
initial pool balance. Archon Financial, L.P. originated 41 of the mortgage
loans or 27.96% of the initial pool balance, all of which were acquired by
Goldman Sachs Mortgage Company. The mortgage loans were originated between
December 16, 1999 and October 27, 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, divided by the aggregate pool balance,
and excludes the companion loans. 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, and excludes the companion loans. 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. See also "Description of the Mortgage Pool" in
this prospectus supplement.
GEOGRAPHIC CONCENTRATIONS OF THE MORTGAGED PROPERTIES
The mortgaged properties are located in 35 states. The following table lists
the number and percentage of mortgaged properties that are located in the five
states with the highest concentrations of mortgaged properties.
<TABLE>
<CAPTION>
NUMBER OF PERCENTAGE OF
MORTGAGED INITIAL POOL
PROPERTY STATE PROPERTIES BALANCE
-------------- ---------- -------
<S> <C> <C>
Arizona 7 12.60%
Florida 18 10.72%
California 19 9.89%
Virginia 6 9.81%
Texas 28 9.67%
</TABLE>
PROPERTY TYPES
The following table lists the number and percentage of mortgaged properties
that are operated for each indicated purpose.
S-9
<PAGE>
<TABLE>
<CAPTION>
NUMBER OF PERCENTAGE OF
MORTGAGED INITIAL POOL
PROPERTY TYPE PROPERTIES BALANCE
------------- ---------- -------
<S> <C> <C>
Retail 52 40.97%
Multifamily 72 30.54%
Office 33 15.69%
Lodging 18 7.44%
Industrial 14 3.60%
Mixed Use 1 0.74%
Mobile Home Park 4 0.61%
Self-Storage 3 0.40%
</TABLE>
PREPAYMENT OR 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 four 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.
COMPANION LOANS
The companion loans will be serviced and administered by the servicer and the
special servicer pursuant to the pooling and servicing agreement, which
generally provides that the companion loans will be serviced in a manner
similar to the mortgage loans. Each such companion loan is secured by the first
mortgage of the related loan group and, after a monetary default or special
servicing event with respect to the related mortgage loan, is generally
subordinate to the related mortgage loan. The respective holders of the Class S
certificates will be entitled to receive distributions of principal, interest
and other amounts made solely with respect to the related companion loan. The
holders of the related Class S certificates would experience losses of
principal and interest before the holders of the offered certificates in the
event of default and liquidation of the related loan group. Holders of the
Class S certificates will have the right to purchase their related loan group
from the trust under certain default circumstances.
INTERCREDITOR AGREEMENTS
Each of the MacArthur Center loan group and the AmeriSuites loan group consists
of a mortgage loan and one or more companion loans that are each evidenced by
two or more separate mortgage notes, each of which is included in the trust,
and together are referred to as a loan group. In its capacity as holder of each
mortgage loan in a loan group, the related seller entered into an intercreditor
agreement that establishes the terms and conditions under which the companion
loan is subordinated to the related mortgage loan. Each of these mortgage loans
and companion loans will be deposited in the trust fund by the depositor,
subject to the related intercreditor agreement.
Pursuant to each intercreditor agreement, the right of the holder of each
companion loan to receive payments is subordinated to the payment rights of the
holder of the mortgage loan in such loan group. Prior to the occurrence of a
monetary default or special servicing event with respect to a loan group, each
of the mortgage loan and companion loan will be entitled to a
S-10
<PAGE>
pro rata allocation of principal and interest payments made in respect of the
related loan group. These allocations will be made after payment of certain
additional servicing compensation to the servicer and the reimbursement of
expenses of enforcement or expenses incurred in connection with the enforcement
of any mortgage loan repurchase obligation against the mortgage loan seller
together with interest thereon at the reimbursement rate to the extent included
in the purchase price paid for such mortgage loan, the foregoing referred to as
shared costs. See "The Intercreditor Agreements, Companion Loans and Loan
Groups--Allocation of Payments Between Mortgage Loans and Companion Loans."
Following the occurrence and continuance of a monetary default or special
servicing event with respect to the related loan group, after payment of shared
costs, all payments of interest and principal on the companion loan will be
subordinated to all payments due on the mortgage loan, other than default
charges and prepayment premiums. See "The Intercreditor Agreements, Companion
Loans and Loan Groups--Allocation of Payments Between Mortgage Loans and
Companion Loans."
The holders of the Class S certificates will not be entitled, in such capacity,
to participate directly in decisions regarding the administration of the
related companion loans, such as granting waivers, consents, and amendments to
the related mortgagor, sending default and acceleration notices, initiating
enforcement actions or foreclosure proceedings or negotiating the terms of any
workout.
Each of the initial holders of the companion loans, on behalf of itself and its
successors and assigns, has assigned to the holder of the related mortgage loan
any voting rights such initial holder of the companion loan may have in
connection with the bankruptcy of a mortgagor.
THE CERTIFICATES
Your certificates represent the right to a portion of the collections on the
trust's assets. The certificates represent all of the beneficial ownership
interests in the trust. The offered certificates are the only securities
offered through this prospectus supplement. The private certificates are not
offered by this prospectus supplement.
CERTIFICATE DESIGNATIONS
We refer to the certificates by the following designations:
<TABLE>
<S> <C>
---------------------------------------------
Designation Related Class(es)
---------------------------------------------
Offered Classes A-1, A-2, B, C
certificates and D
---------------------------------------------
Senior Classes X, A-1, and A-2
certificates
---------------------------------------------
Interest only Class X
certificates
---------------------------------------------
Subordinate Classes B, C, D, E, F, G,
certificates H, J, K, L, M, N,
O and P
---------------------------------------------
Residual Classes R-I, R-II
certificates and R-III
---------------------------------------------
REMIC Classes X, A-1, A-2, B,
regular C, D, E, F, G, H, J, K,
certificates L, M, N, O and P
---------------------------------------------
Class S Class S-AM, S-MAC-1
certificates and S-MAC-2
---------------------------------------------
</TABLE>
INITIAL CERTIFICATE BALANCES OF THE CERTIFICATES
The aggregate principal balance of the certificates (other than the Class S
S-11
<PAGE>
certificates) issued by the trust will be approximately $1,274,707,223, but may
vary upward or downward by no more than 5%.
The senior certificates will comprise approximately 78.75% and the subordinate
certificates will comprise approximately 21.25% of the initial aggregate
certificate balance of the certificates (other than the Class S 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.
In addition to the certificates, the trust fund will also issue the Class S-AM
certificates which will be entitled to receive certain amounts distributed with
respect to the companion loan for the Amerisuites loan group and the Class
S-MAC-1 and Class S-MAC-2 certificates that will be entitled to receive such
amounts distributed with respect to the MacArthur loan group. Unless otherwise
noted, all references in this prospectus supplement to any mortgage loans do
not include the companion loans.
The holder of the related Class S certificates will not have the right to
enforce the mortgagee's rights upon a default under its loan group, but will
have the right to purchase the related loan group under certain limited
circumstances as described under "Servicing of the Mortgage Loans--Sale of
Defaulted Mortgage Loans" in this prospectus supplement. For more information
regarding the relationship between the mortgage loan and companion loan that
comprise each loan group, see "The Intercreditor Agreements, Companion Loans
and Loan Groups" in this prospectus supplement.
DISTRIBUTIONS ON THE OFFERED CERTIFICATES
The trustee will make distributions to certificateholders (other than the Class
S certificateholders) on each distribution date in the order of priority
described below.
Until paid in full, each class of offered certificates will be entitled to
receive monthly distributions of interest.
The borrowers are required to make payments of interest and principal on the
mortgage loans and companion loans to the servicer. Collections and other
amounts allocable to the companion loans are held separately for distribution
to the related Class S certificateholders. The servicer will deduct its
servicing fee and other amounts required by the pooling and servicing agreement
and send the remainder to the trustee. See "The Pooling and Servicing
Agreement" in this prospectus supplement. After deducting its trustee fee, the
trustee will distribute the available certificate distribution amount to the
certificateholders (other than the Class S certificateholders) as follows:
------------------------------------------
Amount available to certificateholders
------------------------------------------
|
------------------------------------------
Step 1
Distribution of interest to the
senior certificates
------------------------------------------
|
S-12
<PAGE>
------------------------------------------
Step 2
Distribution of principal to the
Class A-1 and A-2 certificates
------------------------------------------
|
------------------------------------------
Step 3
Distribution of the
amount of interest due and
principal due each class of the
subordinate certificates. These
distributions are made in
the priority of the alphabetic
order of the subordinate certificates
and as described below.
------------------------------------------
|
------------------------------------------
Step 4
Any remaining funds to the
residual certificates
------------------------------------------
Distributions of interest and principal are not made to a class of certificates
if its certificate balance has been reduced to zero. However, realized losses
or additional trust fund expenses allocated to reduce the certificate balance
of a class of certificates may be reimbursed if the amount available for
distribution is sufficient. See "Description of the Certificates--Distributions"
for a discussion of the amount available for distribution and the priorities and
amounts of distributions on the certificates. Because payments are made in the
order described above, there may not be sufficient funds to make each of the
payments described above after making distributions with a higher priority.
Funds may be insufficient if the trust experiences realized losses, 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. The Class S certificates provide credit enhancement to the senior
and
S-13
<PAGE>
subordinate certificates only to the extent the related companion loan is
subordinated to the mortgage loan in the related loan group.
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, trustee or fiscal agent;
o extraordinary expenses, such as indemnification and reimbursements paid
to the trustee, and
o loan specific expenses incurred because of defaults on mortgage loans or
to remediate environmental conditions on mortgaged properties.
Losses and additional trust fund expenses will be allocated to the certificates
by deducting those losses from the certificate balances of the certificates
without making any payments to the certificateholders. In general, losses and
additional trust fund expenses are allocated to the certificates if the
aggregate outstanding principal balance of the mortgage loans plus the
companion 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 (other than the Class S certificates) will be
reduced as shown in the following chart:
-----------------------------------------
Step 1
Reduce the certificate balances of
the Class P, Class O, Class N, Class M,
Class L, Class K, Class J, Class
H, Class G, Class F, Class E,
Class D, Class C
and Class B certificates
to zero, in that order
-----------------------------------------
|
-----------------------------------------
Step 2
Reduce the certificate balances of
the Class A-1 and A-2 certificates
to zero
-----------------------------------------
Any reductions in the certificate balances of the certificates (other than the
Class S 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. Losses on either of the loan groups will be allocated to the
related Class S certificate to the extent of its certificate balance, before
being allocated as set forth above.
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, other
than a companion loan, that is less than the
S-14
<PAGE>
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 make
these P&I advances on any companion loan or Class S certificate.
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 and the companion loans. Neither the
servicer, nor the depositor, however, are required to do so. If the servicer or
depositor does purchase the mortgage loans and the companion loans, the
outstanding principal balance of the certificates will be paid in full,
together with accrued interest. See "Description of the
Certificates--Certificate Balances and Notional Amounts" and "--Termination;
Retirement of Certificates."
BOOK-ENTRY REGISTRATION
Generally, the offered certificates will be available only in book entry form
through the facilities of The Depository Trust Company in the United States or
through 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 are offered in minimum denominations of $25,000 each
and multiples of $1 in excess thereof.
YIELD AND PREPAYMENT CONSIDERATIONS
The yield to maturity of each class of certificates will depend upon:
o the purchase price of the certificates;
o the applicable pass-through rate;
o the characteristics of the mortgage loans; and
o the rate and timing of payments on the mortgage loans.
For a discussion of special yield and prepayment considerations applicable to
S-15
<PAGE>
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 CERTIFICATE-HOLDERS
If the considerations described under "ERISA Considerations" in this prospectus
supplement and in the accompanying prospectus are satisfied, the Class A, Class
B, Class C, Class D, Class E, Class F and Class G 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 a
regular interest in a REMIC and 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 mortgage
pool and the companion loans that make up the trust as three separate real
estate mortgage investment conduits. Except to the extent they represent the
right to excess interest, the certificates, other than the residual
certificates, will represent ownership of regular interests in one of these
real estate mortgage investment conduits. For federal income tax purposes, the
residual certificates will be the residual interests in the real estate
mortgage investment conduits.
For further information regarding the federal income tax consequences of
investing in the offered certificates, see "Federal Income Tax Consequences" in
this prospectus supplement and in the accompanying prospectus.
RATINGS ON THE CERTIFICATES
The offered certificates are required to receive ratings from Fitch, Inc. and
Moody's Investors Service, Inc. that are not lower than those indicated under
"Summary of Series 2000-C3 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
S-16
<PAGE>
September, 2035. 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. See "Ratings" in this prospectus supplement.
S-17
<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 (other than the Class S certificates)
will 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. Some of the mortgage loans are
S-18
<PAGE>
secured by cash reserves or other credit
enhancement that, if certain leasing-related or
other conditions are met, may be applied to
partially defease or prepay the related
mortgage loan, in the case of two mortgage
loans, without payment of a prepayment premium
or yield maintenance payment. See "Description
of the Mortgage Pool--Earnouts and Additional
Collateral Loans" and "Annex A" to this
prospectus supplement. For a discussion of the
impact on the yields of the certificates of the
rate of delinquency, loss and prepayment on the
mortgage rates and factors that affect those
rates, see "Yield and Maturity Considerations"
and "Description of the
Certificates--Subordination; Allocation of
Losses and Expenses" in this prospectus
supplement and "Risk Factors," and "Yield and
Maturity 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 An affiliate of the servicer expects to acquire
OCCUR WHEN CERTIFICATEHOLDERS some of the subordinate certificates including
OF VARIOUS CLASSES HAVE a portion of the Class P certificates and the
DIFFERING INTERESTS Class S-AM certificates. The affiliate's
ownership of certificates could cause a
conflict between the servicer's duties as
servicer and its affiliate's interest as a
holder of a certificate, especially if actions
would have a disproportionate effect on one or
more classes of certificates. One action over
which the servicer has considerable latitude is
determining whether to liquidate or modify
defaulted mortgage loans. The servicer may also
waive provisions in ARD loans that would
require the payment of excess interest or the
S-19
<PAGE>
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
special servicer. The servicer's affiliate may
hold more than 50% of the voting rights
allocated to that specified class. As a
result, the interests of the servicer's
affiliate may conflict with those of other
certificateholders that desire to replace the
servicer of specially serviced mortgage loans
and foreclosure properties. For example, the
servicer's affiliate could seek to reduce its
potential loss from a troubled mortgage loan
by deferring foreclosure or other legal action
in an attempt to maximize future proceeds. As
a result, the trust may ultimately receive a
smaller amount of proceeds from that mortgage
loan as a result of that deferral.
The servicer is, however, required to
administer the mortgage loans in accordance
with the servicing standards without regard to
ownership of any certificate by it or any of
its affiliates.
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.
LOAN GROUP STRUCTURE CREATES The mortgagors on the loan groups are obligated
ADDITIONAL RISKS to pay interest and principal during the term
of the loan and to repay the entire principal
balance of the related mortgage loan and
companion loan. As a result of the
subordination of the companion loan, the trust
is subject to additional risks, including:
o the risk that the necessary maintenance of
the mortgaged property could be deferred to
allow the mortgagor to pay the required debt
S-20
<PAGE>
service on the companion loan and that the
value of the mortgaged property may fall as
a result; and
o the risk that it may be more difficult for
the mortgagor to refinance the loan group or
to sell the mortgaged property for purposes
of making any balloon payment on the entire
balance of the loan group upon the maturity
of the loan group.
See "Description of the Mortgage Pool--
Significant Mortgage Loans--The Arizona Mills
Loan" and "--The MacArthur Center Loan" in
this prospectus supplement.
ADVERSE ENVIRONMENTAL The trust could become liable for an
CONDITIONS ON A 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 25 of the mortgaged
properties, which constitute 2.48% of the
initial pool balance. In each case where a
"Phase I" environmental assessment was not
performed, the related mortgaged property is
covered by an environmental insurance policy.
None of the environmental assessments revealed
material adverse environmental conditions or
circumstances affecting any mortgaged
property, except those cases:
o in which the adverse conditions were
remediated or abated before the date of
issuance of the certificates;
o in which an operations and maintenance plan
or periodic monitoring of the mortgaged
property or nearby properties was
recommended;
o involving a leaking underground storage tank
or groundwater contamination at a nearby
property that had not yet materially
affected the mortgaged property and for
which a responsible party either has been
identified under applicable law or was then
conducting remediation of the related
condition;
o in which groundwater, soil or other
contamination was identified or suspected,
and a responsible party either has been
identified under applicable law or was then
conducting
S-21
<PAGE>
remediation of the related condition, or 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.
Environmental insurance was obtained for 28 of
the mortgage loans. 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 ON THE of mortgage loans secured by mortgaged
MORTGAGE LOANS properties are listed in the table under
"Summary of Series 2000-C3 Transaction--
Geographic Concentrations of the Mortgaged
Properties." Any deterioration in the real
estate market or economy or events in that
state or region,
S-22
<PAGE>
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
non-recourse loan, only the mortgaged property,
and not the other assets of the borrower, is
available to satisfy the debt. Even if the
mortgage loan documents permit recourse to the
borrower or a guarantor, the trust may not be
able to ultimately collect the amount due under
that mortgage loan. Any resulting losses may
reduce your payments and yield on your
certificates.
Consequently, you should consider payment on
each mortgage loan to depend primarily on the
sufficiency of the cash flow from the related
mortgaged property or properties. At scheduled
maturity or upon acceleration of maturity
after a default, payment depends primarily on
the market value of the mortgaged property or
the ability of the borrower to refinance the
mortgaged property. See "Legal Aspects of
Mortgage Loans--Foreclosure--Anti-Deficiency
Legislation" in the prospectus.
THE SELLER OF A MORTGAGE LOAN The seller of each mortgage loan will be the
IS THE ONLY ENTITY MAKING only person making representations and
REPRESENTATIONS AND WARRANTIES warranties on that mortgage loan. Neither the
ON THAT MORTGAGE LOAN depositor nor any of its affiliates will be
obligated to repurchase a mortgage loan upon a
breach of a seller's representations and
warranties or any document defects if the
applicable seller defaults on its obligation to
repurchase a mortgage loan. The applicable
seller may not have the financial ability to
effect these repurchases. Any resulting
S-23
<PAGE>
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" in this prospectus supplement.
BALLOON PAYMENTS MAY INCREASE 143 mortgage loans, which represent 71.38% 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 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
Considerations" in this prospectus supplement
and "Risk Factors--Investment in commercial
S-24
<PAGE>
and multifamily mortgage loans is riskier than
investment in single-family mortgage loans"
and "Yield and Maturity Considerations" in the
prospectus.
IF BORROWERS DO NOT MAKE ARD 30 of the mortgage loans, which represent
PAYMENTS, THE WEIGHTED AVERAGE 28.32% of the initial pool balance are ARD
ARD LIFE OF YOUR CLASS OF loans. loans have anticipated repayment dates
CERTIFICATES MAY BE EXTENDED prior to their maturity dates. The failure of a
borrower to prepay an ARD loan by its
anticipated repayment date will likely extend
the weighted average life of any class of
certificates that would receive a distribution
of the prepayment. The ability of a borrower to
prepay an ARD loan by its anticipated repayment
date typically depends on its ability either to
refinance the ARD loan or to sell the mortgaged
property. The provisions for accelerated
amortization and a higher interest rate after
the anticipated repayment date of an ARD loan
are intended to provide a borrower with an
incentive to pay the mortgage loan in full on
or before its anticipated repayment date, but
this incentive may not be sufficient. To the
extent the borrower on an ARD loan makes
payments of interest accrued at a rate of
interest higher than the normal mortgage
interest rate, the excess interest will be
distributed to the holders of the Class P
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.
RISKS PARTICULAR TO RETAIL
PROPERTIES:
A SIGNIFICANT TENANT CEASING 52 mortgaged properties, securing mortgage
TO OPERATE AT A RETAIL loans that represent 40.97% of the initial pool
PROPERTY COULD ADVERSELY balance, are retail properties.
AFFECT ITS VALUE AND CASH FLOW
A significant tenant ceasing to do business at
a retail property could result in realized
losses on the mortgage loans that may be
allocated to your certificates. The loss of a
significant tenant may be the result of the
tenant's voluntary decision not to renew a
lease or to terminate it in accordance with
its terms, the bankruptcy or insolvency of the
tenant, the tenant's general cessation of
business activities or other reasons. There is
no guarantee that any tenants will
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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
properties. Significant tenants or anchor
tenants at a retail property play an important
part in generating customer traffic and making
a retail properties 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. 4 of the
mortgaged properties representing 0.71% 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.
The bankruptcy of, or financial difficulties
affecting, a major tenant may adversely affect
a borrower's ability to make its mortgage loan
payments. Approximately 14.9% of the gross
leasable area of the MacArthur Center property
is currently leased to Regal Cinemas Inc.
("Regal"). Base rent and additional rent
received from Regal account for approximately
5% of the total base rent collected by the
MacArthur Center borrower on the MacArthur
Center property. In a Form 10-Q, dated
September 28, 2000, filed by Regal with the
Securities and Exchange Commission, Regal
stated that it is currently in default of
certain financial covenants contained in its
senior credit facilities and its
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equipment financing term note. Regal further
stated that, accordingly, each of those
lenders has the right to accelerate the
maturity of all of its outstanding
indebtedness, which together totals
approximately $1.02 billion, and Regal does
not have the ability to fund the accelerated
maturity of this indebtedness. According to
the Form 10-Q, Regal has engaged financial
advisers and is currently evaluating a
long-term financial plan to address various
alternatives and liquidity requirements which
may provide for a potential restructuring,
recapitalization or a bankruptcy
reorganization. In recent months, many similar
companies operating large chains of cinemas
have sought protection from creditors under
Chapter 11 of the U.S. Bankruptcy Code.
Although, to the knowledge of GSMC, no payment
default has occurred under the Regal lease, no
assurance can be given regarding Regal's
financial condition, its ability to continue
to make lease payments to the MacArthur Center
borrower or whether or not it will file for
bankruptcy protection.
In order to mitigate the effect of a potential
disruption in lease payments by Regal due to
its financial condition, the MacArthur Center
loan requires that a reserve be established by
the MacArthur Center borrower upon the
occurrence of certain events. See "Description
of the Mortgage Pool--Significant Mortgage
Loans--The MacArthur Center Loan--Modified
Lockbox; Certain Reserves" in this prospectus
supplement. While such reserve may help to
protect the lender, there can be no assurance
that the amount of such reserve will be
sufficient to offset any losses incurred by
the MacArthur Center borrower.
LEASES AT CERTAIN RETAIL Leases at certain mortgaged properties,
PROPERTIES CONTAIN EARLY including the properties securing the Arizona
TERMINATION OR CO-TENANCY Mills loan and the MacArthur Center loan, may
PROVISIONS THAT COULD REDUCE contain co-tenancy provisions where the tenancy
CASH FLOW FROM TENANTS or the tenant's payment of rent may be
conditioned upon the tenancy of one or more
anchor tenants or other major tenants, or upon
the continuance of a specified occupancy rate
at the mortgaged property. These provisions may
affect a borrower's ability to make its
mortgage loan payments. Approximately 39.7% of
the gross
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leasable area of the MacArthur Center property
is subject to leases which contain provisions
that entitle either the respective tenant or
the MacArthur Center borrower, or in certain
cases, the tenant only, to terminate their
leases prior to the expiration date to the
extent sales thresholds identified in the
respective lease are not met. See "Description
of the Mortgage Pool--Significant Mortgage
Loans--The MacArthur Center Loan--The
MacArthur Center Property" in this prospectus
supplement.
As described under "Description of the
Mortgage Pool--Significant Mortgage Loans--The
MacArthur Center Loan--Modified Lockbox;
Certain Reserves" in this prospectus
supplement, the MacArthur Center loan requires
certain reserves to be established if the debt
service coverage ratio falls below established
limits. There can be no assurance that the
amount of these reserves will be sufficient to
offset any loss of rental income that may be
suffered by the MacArthur Center borrower if
these tenants elect to terminate their leases.
Approximately 2.9% of the gross leasable area
at the Arizona Mills property is subject to
leases under which the respective tenant is
entitled to a reduction in rent to the extent
that sales or occupancy thresholds are not met
or that a specified number of major tenants
are no longer in occupancy. An additional 2.7%
of the gross leasable area at the Arizona
Mills property is subject to leases under
which the respective tenant is entitled to,
among other things, terminate the respective
lease or cease operations to the extent that
certain occupancy thresholds are not met or a
specified number of major tenants are no
longer in occupancy.
RETAIL PROPERTIES ARE Changes in consumer preferences and market
VULNERABLE TO CHANGES IN demographics may adversely affect the value and
CONSUMER PREFERENCES 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 with respect to value-oriented retail
properties, such properties may contain
tenants that sell discounted, "last season"
or close out merchandise, or may have
higher than average seasonal tenant sales,
cash flows and occupancy levels;
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 VALUE Catalogue retailers, home shopping networks,
AND CASH FLOW FROM RETAIL the internet, telemarketing and outlet centers
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.
THEATER TENANTS HAVE Certain of the mortgaged properties, including
PARTICULAR RISKS the MacArthur Center property and the Arizona
Mills property, have theaters as part of the
mortgaged property. These properties are
exposed to certain unique risks. Significant
factors determining the value of a theater
property include:
o the strength and experience of the
operator;
o its ability to secure film license
agreements for first-run movies; and
o its ability to maintain high attendance
levels.
Theater operators are also highly reliant on
sales of food and beverages to attendees.
Physical attributes of the building will also
impact property value. These physical
attributes include:
o number of screens;
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o the size of individual auditoriums within
the theater;
o quality and modernity of sound and
projection systems; and
o quality and comfort of individual theaters
and common areas (including box office,
lobby and concessions area).
The performance of a theater property can be
impacted by the quality, size and proximity of
competitive theater properties and the
relative appeal of films being screened at
other theater properties within the market. In
recent years, the theater industry has
experienced a high level of construction of
new theaters and an increase in competition
among theater operators. This has caused some
operators to experience financial
difficulties, resulting in downgrades in their
credit ratings and, in certain cases,
bankruptcy filings. The theater industry is
highly dependent on the quality and popularity
of films being produced by film production
companies both in the United States and
overseas; a slowdown in movie production or
decrease in the appeal of films being produced
can negatively impact the value of a theater
property. The theater industry is also subject
to competitive distribution channels. These
competitive distribution channels include:
o cable and satellite television;
o videotape and videodisk sales and rentals;
and
o electronic distribution via the internet.
RISKS PARTICULAR TO
MULTIFAMILY PROPERTIES:
REDUCTIONS IN OCCUPANCY AND 72 mortgaged properties, securing mortgage
RENT LEVELS ON MULTIFAMILY loans that represent 30.54% of the initial pool
PROPERTIES COULD ADVERSELY balance, are multifamily rental properties. A
AFFECT THEIR VALUE AND CASH decrease in occupancy or rent levels at these
FLOW properties could result in realized losses on
the mortgage loans. Occupancy and rent levels
at a multifamily property may be adversely
affected by:
o local, regional or national economic
conditions, which may limit the amount of
rent that can be charged for rental units
or result in a reduction in timely rent
payments;
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o construction of additional housing units in
the same market;
o local military base or industrial/business
closings;
o developments at local colleges and
universities;
o national, regional and local politics,
including current or future rent
stabilization and rent control laws and
agreements;
o trends in the senior housing market;
o the level of mortgage interest rates, which
may encourage tenants in multifamily rental
properties to purchase housing; and
o a lack of amenities, unattractive physical
attributes or bad reputation of the
mortgaged property.
STUDENT HOUSING CONCENTRATIONS Certain of the mortgaged properties, are
MAY AFFECT CASH FLOW OF A student housing properties or have high
MULTIFAMILY PROPERTY concentrations of student tenants. With respect
to one mortgaged property securing a mortgage
loan that represents 2.35% of the initial pool
balance, such mortgage loan is secured by a
property in which all of the residential units
are master leased to New York University. See
"-- Losses may be caused by tenant credit risk
on the mortgage loans" below. 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 or are leased;
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;
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<PAGE>
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.
RESTRICTIONS IMPOSED ON Tax credit, city, state and federal housing
MULTIFAMILY PROPERTIES BY subsidies, rent stabilization or similar
GOVERNMENT PROGRAMS COULD ALSO programs may apply to multifamily properties.
ADVERSELY AFFECT THEIR VALUE The limitations and restrictions imposed by
AND CASH FLOW these programs could 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 33 mortgaged properties, securing mortgage
BUSINESSES OR CHANGES IN loans that represent 15.69% of the initial pool
DEMOGRAPHIC CONDITIONS COULD balance, are office properties.
ADVERSELY AFFECT THE VALUE
AND CASH FLOW FROM OFFICE Economic decline in the businesses operated by
PROPERTIES the tenants of office properties may increase
the likelihood that the tenants may be unable
to pay their rent, which could result in
realized losses on the mortgage loans. A
number of economic and demographic factors may
adversely affect the value of office
properties, including:
o the quality of the tenants in the building;
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o the physical attributes of the building in
relation to competing buildings;
o access to transportation;
o the availability of tax benefits;
o the strength and stability of businesses
operated by the tenant or tenants;
o the desirability of the location for
business; and
o the cost of refitting office space for a
new tenant, which is often significantly
higher than the cost of refitting other
types of properties for new tenants.
These risks may be increased if rental revenue
depends on a single tenant, if the property is
owner-occupied or if there is a significant
concentration of tenants in a particular
business or industry. One mortgaged property
representing 0.10% of the initial pool balance
is secured by a single tenant office property.
For a description of risk factors relating to
single tenant properties, see "--Losses may be
caused by tenant credit risk on the mortgage
loans" below.
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 or rental revenues could result in realized
losses on the mortgage loans. A property's age,
condition, design (such as floor sizes and
layout), location, access to transportation and
ability to offer amenities to its tenants,
including sophisticated building systems (such
as fiber optic cables, satellite communications
or other base building technological features)
may affect the properties' ability to compete
with office properties in the same market.
RISKS PARTICULAR TO INDUSTRIAL
PROPERTIES:
CHANGES IN ECONOMIC AND 14 mortgaged properties, securing mortgage
DEMOGRAPHIC CONDITIONS COULD loans that represent 3.60% 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
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<PAGE>
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. 3 of the mortgaged properties
representing 1.09% of the initial pool balance
are secured by single tenant industrial
properties. For a description of risk factors
relating to office properties, see "--Economic
decline in tenant businesses or changes in
demographic conditions could adversely affect
the value and cash flow from office
properties," and for a description of risk
factors relating to single tenant properties,
see "--Losses may be caused by tenant credit
risk on the mortgage loans" below.
Restrictions imposed by site characteristics
could also adversely affect the value and cash
flow from industrial properties.
Site characteristics at industrial properties
may impose restrictions that may limit the
properties' suitability for tenants, affect
the value of the properties and contribute to
losses on the mortgage loans that may be
allocated to your class of certificates. Site
characteristics which affect the value of an
industrial property include:
o clear heights;
o column spacing;
o number of bays and bay depths;
o truck turning radius;
o divisibility;
o zoning restrictions; and
o overall functionality and accessibility.
An industrial property also requires
availability of labor sources, proximity to
supply sources and customers, and
accessibility to rail lines, major roadways
and other distribution channels.
Restrictions imposed by increased
environmental risks could also adversely
affect the value and cash flow from industrial
properties
Properties used for many industrial purposes
are more prone to environmental concerns than
other property types. For a description of
risk factors relating to environmental risks,
see
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<PAGE>
"--Adverse environmental conditions on a
mortgaged property may reduce or delay your
payments" above.
RISKS PARTICULAR TO HOSPITALITY
PROPERTIES:
REDUCTIONS IN ROOM RATES OR 18 mortgaged properties, securing mortgage
OCCUPANCY AT A HOSPITALITY loans that represent 7.44% 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.
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 Limited service hospitality properties have
lower barriers to entry than other types of
hospitality properties, and over-building
could occur.
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
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<PAGE>
important. If the franchisee defaults on
its debt, the trustee may be unable to use
the franchise license without the consent
of the franchisor due to restrictions on
transfers imposed by the franchise license
agreements.
LIMITED ALTERNATIVE USES OF 8 mortgaged properties, securing mortgage loans
OTHER PROPERTY TYPES COULD that represent approximately 1.76% of the
ADVERSELY AFFECT THEIR VALUE initial pool balance, are mixed use properties
AND CASH FLOW or other property types that have limited
alternative uses. These limited alternative
uses could result in realized losses on the
mortgage loans that may be allocated to your
class of certificates. Mortgage loans secured
by other property types, including mixed use
properties, may pose risks not associated with
mortgage loans secured by liens on other types
of income producing mortgaged properties.
RISKS ASSOCIATED WITH TENANTS
GENERALLY:
LOSSES MAY BE CAUSED BY Cash flow or value of a mortgaged property
TENANT CREDIT RISK ON THE could be reduced if tenants are unable to meet
MORTGAGE 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.
These risks may be increased when the property
is a single tenant property, is owner-occupied
or is leased to relatively few tenants. 8 of
the
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<PAGE>
mortgaged properties representing 1.90% of the
initial pool balance are secured by single
tenant properties.
VOLATILITY OF BUSINESS OF Technology and internet start-up companies have
TECHNOLOGY/INTERNET START-UP recently experienced a variety of factors that
TENANTS MAY ADVERSELY AFFECT tend to make their businesses relatively
TENANT CASH FLOW volatile. Many of these companies have little
or no operating history, their owners and
management are often inexperienced and such
companies may be heavily dependent on obtaining
venture capital financing. In addition,
technology and internet start-up companies
often require significant build-out costs
related to special technology which may
adversely affect the ability of the landlord to
relet the properties.
Recently, some of the publicly-traded
technology companies have suffered significant
stock price declines, further demonstrating
the relatively volatile nature of such
companies and the risks that technology and
internet start-up companies may pose as
tenants of the properties. The relative
instability of these tenants may cause you to
experience losses on your certificates.
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" to this prospectus supplement for
information regarding the expiration of leased
space for certain mortgaged properties.
If leases are not renewed at all or are not
renewed on favorable terms, the trust may
experience realized losses on the mortgage
loans that may be allocated to your class of
certificates.
Even if borrowers successfully relet vacated
space, the costs associated with reletting,
including tenant improvements, leasing
commissions and free rent, can exceed the
amount of any reserves maintained for that
purpose and reduce cash flow from the
mortgaged properties. Although many of the
mortgage loans require the borrower to
maintain escrows for leasing expenses, there
is no guarantee that these reserves will be
sufficient. See "--Leases at certain retail
properties contain
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<PAGE>
early termination or co-tenancy provisions that
could reduce cash flow from tenants" and "Annex
A--Characteristics of the Mortgage
Loans--Certain Reserves" for information
regarding certain of these reserves.
TENANT BANKRUPTCY ENTAILS The bankruptcy or insolvency of a major tenant,
RISKS 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 under
the lease for the periods before the bankruptcy
petition or earlier surrender of the leased
premises that are unrelated to the rejection,
plus the greater of one year's rent or 15% of
the remaining reserved rent, but not more than
three years' rent. Even if provisions in the
lease prohibit assignment, in a bankruptcy, the
tenant may assign the lease to another entity
that could be less creditworthy than the tenant
may have been at the time of origination of the
mortgage loan. See "Legal Aspects of Mortgage
Loans" in the prospectus.
LOSSES MAY BE CAUSED BY Losses may be realized on the mortgage loans
INADEQUATE PROPERTY MANAGEMENT that may be allocated to your class of
certificates if property management is
inadequate. Property managers are normally
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
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<PAGE>
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
o affiliates of the managers or the
borrowers, or the managers or the borrowers
or both, may also own other properties,
including competing properties.
LOSSES MAY RESULT IF THE An appraisal was conducted for each mortgaged
SERVICER IS UNABLE TO SELL property in connection with the origination of
A MORTGAGED PROPERTY SECURING the related mortgage loan or thereafter, and
A DEFAULTED MORTGAGE LOAN FOR the loan-to-value ratios as of the cut-off date
ITS APPRAISED VALUE referred to in this prospectus supplement are
based on the appraisals. If the servicer
forecloses on a mortgaged property and realizes
liquidation proceeds that are less than the
appraised value, a realized loss on the
mortgage loan could result that may be
allocated to your class of certificates.
Appraisals are not guarantees of present or
future value. Appraisals seek to establish the
amount a typically motivated buyer would pay a
typically motivated seller as of a designated
date. This amount could be significantly
higher than the amount obtained from the sale
of a mortgaged property under a distress or
liquidation sale at a subsequent date. If a
borrower defaults on a mortgage loan, the
servicer may be unable to sell the related
mortgaged property for its appraised value.
Appraisals are estimates of value at the time
of the appraisal based on the analysis and
opinion of the appraiser. The values of the
mortgaged
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<PAGE>
properties may have changed significantly
since the appraisal was performed. Most
appraisals have not been updated since the
mortgage loan was originated.
SUBORDINATE FINANCING ON THE None of the mortgaged properties are known by
MORTGAGED PROPERTY MAY INCREASE the depositor to be encumbered by subordinate
RISKS debt (other than the companion loans). 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.
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.
The mortgage loans known as the MacArthur
Center loan and the Amerisuites loan are
secured by one or more mortgaged properties
that also secure the related companion loan,
which is subordinated to the related mortgage
loan.
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 RISKS 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
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borrower or the availability of proceeds from
the operation of the property to fund items
such as replacements, tenant improvements or
other capital expenditures. The value of the
equity in the borrower held by the sponsoring
entities of the borrower could also be
adversely affected by the existence of
mezzanine indebtedness or other obligations.
There is a risk that any holder of mezzanine
debt may attempt to use its rights as owner of
the mezzanine loan to protect itself against
an exercise of rights by the lender under the
mortgage loan. For a description of mezzanine
debt relating to the mortgaged properties see
"Description of the Mortgage Pool--Unsecured
Subordinate or Mezzanine Financing" in this
prospectus supplement.
LIMITS ON SUBORDINATION OF Each of the companion loans is subordinated to
COMPANION LOANS the related mortgage loan. However, payments of
principal and interest on a companion loan are
not subordinated to payments of principal and
interest on any other mortgage loan in the
trust. Even though, as a result of default or
delinquency on a mortgage loan, other than a
mortgage loan in a loan group, there are
insufficient funds to pay principal and
interest on all of the certificates, payments
of principal and interest will continue to be
made to the holders of the companion loans. See
"Description of the Certificates--
Subordination; Allocation of Losses and
Expenses" in this prospectus supplement.
RELATED BORROWERS MAY MAKE Some borrowers under the mortgage loans are
LOSSES ON THE MORTGAGE LOANS affiliated or under common control with one
MORE SEVERE another. When borrowers are related, any
adverse circumstances relating to one borrower
or its affiliates, and affecting one mortgage
loan or mortgaged property, also can affect the
related borrower's mortgage loans or mortgaged
properties which could make losses more likely
or more severe or both than would be the case
if there were no related borrowers.
For example, a borrower that owns or controls
several mortgaged properties and experiences
financial difficulty at one mortgaged property
might defer maintenance at other mortgaged
properties to satisfy current expenses of the
mortgaged property experiencing financial
difficulty. Alternatively, the borrower could
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attempt to avert foreclosure by filing a
bankruptcy petition. The bankruptcy or
insolvency of a borrower or its affiliate
could have an adverse effect on the operation
of all of the mortgaged properties of that
borrower and its affiliates and on the ability
of those mortgaged properties to produce
sufficient cash flow to make required payments
on the mortgage loans. The insufficiency of
cash flows could result in realized losses on
the mortgage loans that may be allocated to
your class of certificates. See "Description
of the Mortgage Pool--Significant Mortgage
Loans--The Arizona Mills Loan" and "--The
MacArthur Center Loan" and "Description of the
Mortgage Pool--Related Borrowers,
Cross-Collateralized Mortgage Loans and
Mortgage Loans Collateralized by Multiple
Properties" in this prospectus supplement and
"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
SEVERE they are cross-collateralized, have outstanding
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. See
"Description of the Mortgage Pool--Significant
Mortgage Loans --The Arizona Mills Loan" and
"--The MacArthur Center Loan" in this
prospectus supplement.
LOSSES COULD RESULT FROM 17 mortgage loans, representing 7.95% of the
LIMITATION ON ENFORCEABILITY OF initial pool balance, are cross-collateralized
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
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a borrower to secure repayment of another
borrower's mortgage loan could be voided if a
court were to determine that:
o the borrower was insolvent at the time of
granting the lien, was rendered insolvent
by the granting of the lien, or was left
with inadequate capital or was unable to
pay its debts as they matured; and
o when it allowed its mortgaged property to
be encumbered by a lien securing the entire
indebtedness represented by the other
mortgage loan, the borrower did not receive
fair consideration or reasonably equivalent
value in return.
The additional security provided by
cross-collateralization would not be available
if a court determines that the grant was a
fraudulent conveyance. If a creditor were to
successfully assert a fraudulent conveyance
claim it could result in realized losses on
the mortgage loans that may be allocated to
your class of certificates. See "Legal Aspects
of Mortgage Loans-- Bankruptcy Laws" in the
prospectus and "Description of the Mortgage
Pool--Related Borrowers, Cross-Collateralized
Mortgage Loans 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.
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STATE LAW LIMITATIONS Some jurisdictions, including California, have
ON 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 servicer will
be required to consider these factors in
deciding which alternatives to pursue after a
default.
BANKRUPTCY RULES MAY LIMIT THE Operation of the federal bankruptcy code and
ABILITY OF A LENDER TO ENFORCE related state laws may interfere with the
REMEDIES ability of a lender to foreclose upon a
mortgaged property and to take other actions to
enforce its remedies against the borrower or
the mortgaged property. For a description of
risks related to bankruptcy, see "Legal Aspects
of Mortgage Loans--Bankruptcy Laws" in the
prospectus.
INCREASES IN GROUND RENTS MAY 3 mortgaged properties securing mortgage loans,
ADVERSELY AFFECT A BORROWER'S which represent 10.49% of the initial pool
ABILITY TO MAKE PAYMENTS UNDER balance, are subject solely to the lien of a
A RELATED MORTGAGE LOAN AND mortgage on the applicable borrower's leasehold
CAUSE REALIZED LOSSES ON THE interest under a ground lease. One mortgaged
MORTGAGE LOANS property securing a mortgage loan, which
represents 0.38% of the initial pool balance,
is subject to the lien of either a mortgage on
both the borrower's leasehold interest and the
borrower's fee simple interest in the remaining
portion of the mortgaged property.
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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 of the
ground lease, including renewals. The ground
lessee, however, is not entitled to enforce
the obligation of the ground lessor to provide
any services required under the ground lease.
If a ground lessee/borrower in bankruptcy
rejected any or all of its ground leases, the
leasehold mortgagee would have the right to
succeed to the ground lessee/borrower's
position under the lease only if the ground
lessor had specifically granted the mortgagee
that right. If the ground lessor and the
ground lessee/borrower are involved in
concurrent bankruptcy proceedings, the trustee
may be unable to enforce the bankrupt ground
lessee/borrower's obligation to refuse to
treat a ground lease rejected by a bankrupt
ground lessor as terminated. If this happened,
a ground lease could be terminated
notwithstanding lender protection provisions
contained therein or in the mortgage. If the
borrower's leasehold were to be terminated
after a lease default, the leasehold mortgagee
would lose its security.
Each of the ground leases related to the
mortgage loans that are not secured by the
related fee interest, 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.
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o It contains certain other protective
provisions typically included in a
"mortgageable" ground lease.
See "Description of the Mortgage Pool--Ground
Leases" and "--Significant Mortgage Loans--The
MacArthur Center Loan" 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 ON delays and shortfalls. These delays or
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 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
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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 REDUCE and fines imposed by the Americans with
PAYMENTS TO CERTIFICATEHOLDERS Disabilities Act of 1990, the amount available
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
fines by the federal government or an award of
damages to private litigants.
LITIGATION MAY REDUCE PAYMENTS Legal proceedings may be pending and, from time
TO CERTIFICATEHOLDERS 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-143 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. Each of the AmeriSuites mortgage loan and the MacArthur Center
mortgage loan consist of a mortgage loan and one or more companion loans that
are subordinated to the respective mortgage loan under the terms of an
intercreditor agreement. Together, each set of mortgage loans and companion
mortgage loans are referred to as a loan group. The initial pool balance and
the mortgage pool include only:
o the mortgage loan (and none of the companion loans) in each loan group,
and
o each of the other mortgage loans not included in a loan group.
Accordingly, all numerical and statistical information provided herein
with respect to the initial pool balance and the mortgage pool is presented and
calculated solely with respect to the mortgage loans (and none of the companion
loans) in such loan group and each of the other mortgage loans not included in
a loan group. However, in the case of each loan group, all references to
"mortgaged property" in this prospectus supplement include the entire mortgaged
property securing such loan group.
CALCULATIONS OF INTEREST
172 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 and have a
monthly payment calculated on the basis of a 360-day year consisting of twelve
30-day months. One mortgage loan accrues interest on the basis of a 365-day
year and the actual number of days elapsed and has a monthly payment calculated
on the basis of a 360-day year consisting of twelve 30-day months. One mortgage
loan accrues interest on the basis of a 360-day year consisting of twelve
30-day months for the 9 months of an interest only period following the cut-off
date, and subsequently accrues interest calculated on the basis of a 360-day
year and the actual number of days elapsed, and has 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. One mortgage loan accrues interest and has a
monthly payment calculated on the basis of a 360-day year consisting of twelve
30-day months.
In addition, 3 mortgage loans, which represent 4.39% 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
143 of the mortgage loans, which represent approximately 71.38% 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
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<PAGE>
loans. 3 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. 2 of the mortgage loans, which represent approximately 0.30%
of the initial pool balance, are fully amortizing.
ARD LOANS
30 of the mortgage loans, which represent approximately 28.32% 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 than some minimum debt service and
specified property expenses will be applied to the payment of principal on the
ARD loan and, after its principal balance has been reduced to zero, to the
payment of accrued and unpaid excess interest.
The failure to pay excess interest will not constitute a default under the
ARD loans before the related maturity date. Unpaid excess interest will, except
where limited by applicable law, continue to accrue interest at the revised
rate. Any excess interest received on an ARD loan will be distributed to the
holders of the Class P certificates.
As of or shortly after the anticipated repayment date, borrowers under ARD
loans will be required to enter into a lockbox agreement whereby all revenue
will be deposited directly into a designated lockbox account controlled by the
servicer. From and after the anticipated repayment date, in addition to paying
interest at the mortgage rate and principal based on the amortization schedule,
the related borrower typically will be required to apply all remaining monthly
cash flow from the related mortgaged property to pay the following amounts in
the following order of priority:
(1) payments to required escrow funds;
(2) payment of operating expenses under the terms of an annual budget
approved by the servicer;
(3) payment of approved extraordinary operating expenses or capital
expenses not a part of the approved annual budget or allotted for in
any escrow fund;
(4) principal on the mortgage loan until the principal is paid in full;
and
(5) excess interest.
ARD loans typically prohibit the related borrower from prepaying the
mortgage loan before or, in some cases, until a specified date before, the
anticipated repayment date. At that time, the borrower may prepay the ARD loan,
in whole or in part, without payment of a penalty or yield maintenance in the
form of a prepayment premium.
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AMORTIZATION OF PRINCIPAL
In addition to the balloon loans and the ARD loans, the mortgage pool
includes 2 fully amortizing mortgage loans, which represent 0.30% of the
initial pool balance.
DUE DATES
A due date is the date in the month on which a monthly payment on a
mortgage loan is first due. 151 of the mortgage loans, which represent 75.22%
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. 24 of the mortgage loans, which represent 24.78% of the initial
pool balance, provide for due dates on the fifth day of each month. See
"Servicing of the Mortgage Loans--Servicing and Other Compensation and Payment
of Expenses" in this prospectus supplement.
None of the mortgage loans provide for a grace period for the payment of
monthly payments of more than 15 days.
DEFEASANCE
All but 4 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 loan and any companion loan to and, including that due
date,
o all other sums due under the mortgage loan and any companion
loan, excluding scheduled interest or principal payments not yet
due and owing, and
o any costs and expenses related to the release,
(2) delivers or pledges defeasance collateral to the trustee
o that consists of direct, non-callable obligations of, or
non-callable obligations, fully guaranteed as to timely payment
by, the United States of America; and
o that provides payments:
o on or before all successive scheduled payment dates from
that due date to the related maturity date, or anticipated
repayment date in the case of any ARD loan, and
o in an amount equal to or greater than the scheduled payments
due on those dates under the mortgage loan and companion
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.
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The related mortgaged property will be released from the lien of the
mortgage loan and any companion loan and the defeasance collateral will be
substituted as the collateral securing the mortgage loan and any companion 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. See "Legal Aspects of
Mortgage Loans--Default Interest and Limitations on Prepayments" in the
prospectus.
In most cases, no prepayment premium will be payable upon any mandatory
prepayment of a mortgage loan caused by a casualty or condemnation. No
prepayment premium will be payable with the repurchase of a mortgage loan by a
seller for a breach of representation or warranty or any failure to deliver any
related documentation on the part of that seller. No prepayment premium will be
payable with the purchase of all of the mortgage loans and any REO properties
in connection with the termination of the trust fund or with the purchase of
defaulted mortgage loans by the servicer or any holder or holders of
certificates evidencing a majority interest in the controlling class. See
"--Assignment of the Mortgage Loans; 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
17 mortgage loans, which represent 7.95% of the initial pool balance, are
cross-collateralized mortgage loans among groups of related borrowers. 7
mortgage loans, other than the cross-collateralized mortgage loans, which
represent 7.16% 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 175, while the total number of
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mortgaged properties in the mortgage pool is 197. 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 3.87% of the initial pool
balance. In addition, the Arizona Mills borrower and the MacArthur Center
borrower share a common equityholder. The common equityholder is The Taubman
Realty Group Limited Partnership, which is controlled by Taubman Centers, Inc.,
a publicly-traded corporation.
DUE-ON-SALE AND DUE-ON-ENCUMBRANCE PROVISIONS
All of the mortgage loans and loan groups 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 or loan group 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 the mortgage may have under a
due-on-sale or due-on-encumbrance clause to accelerate payment of the related
mortgage loan or loan group or to withhold its consent to the transfer or
encumbrance of the mortgaged property. See "--Significant Mortgage Loans--The
MacArthur Center Loan" and "--The AmeriSuites Loan" in this prospectus
supplement and "The Pooling and Servicing Agreements--Due-on-Sale and
Due-on-Encumbrance Provisions" and "Legal Aspects of Mortgage
Loans--Due-on-Sale and Due-on-Encumbrance" in the prospectus.
SECURED SUBORDINATE FINANCING
No mortgaged properties are known to be encumbered by subordinated debt
that is not part of the mortgage pool. All of the mortgage loans either
prohibit the borrower from encumbering the mortgaged property with additional
secured debt or will require
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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 Mortgage Loans known as the MacArthur Center loan and the Amerisuites
loan are secured by one or more mortgaged properties that also secure a related
mortgage loan that is also included in the trust and is referred to as a
companion loan. See "Significant Mortgage Loans--The MacArthur Center Loan" and
"--The Amerisuites Loan" in this prospectus supplement.
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. See
"--Significant Mortgage Loans--The Arizona Mills Loan" and "--The MacArthur
Center Loan," each of which allow certain unsecured financing.
The following table indicates those mortgaged properties that are known to
the depositor that have mezzanine debt secured by equity interests in the
borrower, the initial principal amount of the mezzanine debt and the cut-off
date principal balances of the related mortgage loans.
MEZZANINE DEBT
<TABLE>
<CAPTION>
INITIAL
PRINCIPAL
AMOUNT OF
CONTROL LOAN CUT-OFF DATE % OF INITIAL POOL MEZZANINE
NUMBER NUMBER PROPERTY NAME BALANCE BALANCE FINANCING
------ ------ ------------- ------- ------- ---------
<S> <C> <C> <C> <C> <C>
9 DBM10478 Copper Canyon Apartments $25,472,358 2.00% $1,100,000
42 991091254 Windover of Fort Pierce Apartments $ 2,943,612 0.23% (a)
54 991091255 Windover Health Club Apartments $ 5,712,604 0.45% (a)
68 991091256 Windover of Melbourne Apartments $ 6,805,233 0.53% (a)
100 991091257 Windover Golden Pointe $ 4,794,596 0.38% (a)
27 DBM12721 Napa Valley Apartments $12,174,928 0.96% $ 780,000
29 28997 Hillside Village Shopping Center $12,029,212 0.94% $ 300,000
51 28492 Vistas at Northbrook $ 6,085,660 0.48% $ 619,111
</TABLE>
--------------
(a) The equity interests in each of the four borrowers for these four
cross-collateralized and cross-defaulted loans has been pledged to
secure a single mezzanine loan with an initial principal amount of
$1,850,000.
Additional debt, in any form, may cause a diversion of funds from property
maintenance and increase the likelihood that the borrower will become the
subject of a bankruptcy proceeding.
Except as described above, the depositor has not been able to confirm
whether the respective borrowers under the mortgage loans have any other debt
outstanding.
See "Risk Factors--Subordinate financing on the mortgaged property may
increase risks" and "--Mezzanine debt secured by equity in the borrower may
increase risks" in this prospectus supplement and "Legal Aspects of Mortgage
Loans--Subordinate Financing" in the prospectus.
S-53
<PAGE>
GROUND LEASES
3 mortgaged properties securing mortgage loans, which represent 10.49% of
the initial pool balance, are subject solely to the lien of a mortgage on the
applicable borrower's leasehold interest in such mortgaged property.
One mortgaged property securing a mortgage loan, which represents 0.38% of
the initial pool balance, is subject to the lien of 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 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 "Description of the Mortgage
Pool--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 Arizona Mills Loan
The Arizona Mills Loan. The "Arizona Mills loan" representing 11.44% of
the initial pool balance was originated by GMACCM on October 2, 2000 and a 50%
participation interest was concurrently sold to GSMC. The Arizona Mills loan
has a principal balance as of the cut-off date of approximately $145,831,430.
The Arizona Mills loan is a balloon loan evidenced by a promissory note in the
amount of $146,000,000 with a maturity date of October 5, 2010 and is secured
by, among other things, a fee deed of trust security agreement and assignment
of leases and rents encumbering a regional mall located in Tempe, Arizona. The
Arizona Mills borrower is Arizona Mills, L.L.C., a Delaware limited liability
company which is a special purpose, bankruptcy remote entity affiliated with
The Mills Corporation, Taubman Centers, Inc. and Simon Property Group, all
publicly-traded corporations listed on the New York Stock Exchange under the
symbols "MLS", "TCO" and "SPG", respectively.
Payment and prepayment terms for the Arizona Mills loan are set forth on
Annex A.
The Arizona Mills Property. The Arizona Mills property is a single level,
enclosed, value-oriented regional destination mall located in Tempe, Arizona, a
city centrally located in the greater Phoenix, Arizona area. The Arizona Mills
property was built in 1997 and consists of approximately 1,230,001 net rentable
square feet. The Arizona Mills property had an occupancy rate of 97.0% as of
November 20, 2000.
The following table summarizes the breakdown of gross leasable area, or
"GLA" and annualized per square foot or "SF" base rent information for the ten
largest tenants at the Arizona Mills property:
S-54
<PAGE>
ARIZONA MILLS
TEN LARGEST TENANTS BASED ON GROSS LEASABLE AREA
<TABLE>
<CAPTION>
LEASE ANNUALIZED APPROXIMATE
EXPIRATION TENANT % OF BASE RENT ANNUALIZED % OF TOTAL
TENANT NAME DATE GLA (SF) GLA PER SF BASE RENT BASE RENT
----------- ---- -------- --- ------ --------- ---------
<S> <C> <C> <C> <C> <C> <C>
J.C. Penney 11/30/2012 104,697 8.51% $ 4.75 $ 497,311.00 2.33%
Harkins Great Mall Cinema 11/19/2012 92,320 7.51% $ 14.06 $ 1,298,118.00 6.09%
Burlington Coat Factory 1/31/2013 80,426 6.54% $ 5.00 $ 402,130.00 1.89%
Oshmans Supersport 1/31/2013 65,013 5.29% $ 7.85 $ 510,352.00 2.39%
Linens & Things 1/31/2013 40,057 3.26% $ 12.00 $ 480,684.00 2.25%
Gameworks 11/30/2007 37,348 3.04% $ 16.49 $ 615,818.00 2.89%
Off 5th Saks Fifth Ave 11/19/2012 34,716 2.82% $ 7.00 $ 243,012.00 1.14%
Marshalls 11/30/2007 31,315 2.55% $ 9.50 $ 297,493.00 1.40%
Virgin Megastore 1/31/2009 30,822 2.51% $ 16.83 $ 518,734.00 2.43%
Ross Dress For Less 1/31/2008 29,845 2.43% $ 9.96 $ 297,340.00 1.39%
------- ----- -------------- -----
Totals/Avg. 546,559 44.46% $ 5,160,992.00 24.20%
======= ===== ============== =====
</TABLE>
The following table summarizes information related to the expiration of
tenant leases at the Arizona Mills property:
ARIZONA MILLS
LEASE EXPIRATION SCHEDULE(1)
<TABLE>
<CAPTION>
APPROXIMATE
NUMBER OF EXPIRING % OF ANNUALIZED % OF TOTAL
YEAR LEASES SF TOTAL SF BASE RENT BASE RENT
---- ------ -- -------- --------- ---------
<S> <C> <C> <C> <C> <C>
2000 6 18,768 1.53% $ 503,407 2.36%
2001 7 13,799 1.12% $ 367,208 1.72%
2002 52 172,245 14.00% $ 3,767,929 17.68%
2003 25 90,611 7.37% $ 2,045,536 9.60%
2004 13 36,757 2.99% $ 942,206 4.42%
2005 7 19,254 1.57% $ 621,370 2.91%
2006 5 39,984 3.25% $ 691,374 3.24%
2007 17 171,234 13.92% $ 2,996,820 14.06%
2008 9 45,225 3.68% $ 842,737 3.95%
2009 4 61,381 4.99% $ 1,134,065 5.32%
2010+ 16 534,972 43.49% $ 6,727,076 31.56%
Vacant 8 25,771 2.10% $ 677,621 3.18%
-- ------- ------ ----------- ------
Total 169 1,230,001 100.00% $21,317,349 100.00%
=== ========= ====== =========== ======
</TABLE>
----------
(1) Assuming sales, occupancy and tenancy thresholds are satisfied in each
lease and no related termination rights are exercised.
Defeasance. The Arizona Mills borrower may obtain the release of the
Arizona Mills property from the lien of the mortgage by exercising a defeasance
option on or after the second anniversary of the closing date of the
certificates.
Value. The Arizona Mills loan has a cut-off date LTV of 58.33%. An
appraisal performed in August, 2000 determined a value for the Arizona Mills
property of $250,000,000.
Underwritten NCF and DSC Ratio. The Arizona Mills loan has an underwritten
NCF DSCR of 1.58x and an underwritten NCF of $20,097,142.
S-55
<PAGE>
Lockbox. All rents payable by the tenants of the Arizona Mills property
are required to be deposited into a lockbox account under lender's control
pursuant to a lockbox account agreement. Funds in the lockbox account will be
allocated to pay debt service on the Arizona Mills loan and to fund any or all
of the following: taxes, insurance, replacement and tenant improvement and
leasing commission reserves. Any funds remaining in the lockbox account will be
released to the Arizona Mills borrower until the occurrence of an event of
default under the Arizona Mills loan.
Tenant Improvement and Leasing Commission Reserve. At loan closing, the
Arizona Mills borrower funded a $1,117,478 reserve for the completion of tenant
improvements pursuant to the terms of certain leases at the Arizona Mills
property. In addition, on each monthly payment date following a triggering
event (defined below), the Arizona Mills borrower must make a monthly deposit
of $108,333.33 into a tenant improvement and leasing commission reserve. In
addition, after a triggering event, borrower must also deposit all lease
termination fees, damage claims or similar amounts paid by each tenant
occupying space at the Arizona Mills property. A "triggering event" means the
occurrence of either of the following: (i) the occupancy level at the Arizona
Mills property is less than 85% for any calendar quarter or (ii) the annualized
net operating income based on the three (3) month period immediately preceding
the date of such calculation is less than $18,300,000. These monthly deposits
are required until the balance in the tenant improvement and leasing commission
reserve equals: (A) $1,300,000 for each of the calendar years 2000, 2001, 2004,
2005, 2006, 2009 and 2010 or (B) $2,000,000 for each of the calendar years
2002, 2003, 2007 and 2008. Once the applicable balance is achieved, the Arizona
Mills borrower is not required to make additional monthly deposits unless the
balance in the tenant improvement and leasing commission reserve falls below
the applicable balance set forth in the immediately preceding sentence. If the
annualized net operating income based upon the three month period immediately
preceding the date of such calculation is greater than $19,900,000, the lender
will release the tenant improvement and leasing commission reserve to the
Arizona Mills borrower and no further monthly deposits will be required until
the occurrence of another triggering event.
Out Parcel Release. The lease of one tenant at the Arizona Mills property,
the Rusty Pelican, contains an option to purchase the related out parcel. In
the event that the tenant exercises the option, the Arizona Mills borrower
agrees to, among other things, (a) pay to the lender a release price of
$1,125,000, together with a prepayment premium on such release price equal to
the greater of 3% or yield maintenance, (b) obtain a confirmation from the
rating agencies that the release will not result in a qualification, downgrade
or withdrawal of the certificates and (c) pay lender's costs and expenses in
connection with such release.
Property Management. The Arizona Mills property is managed by MTS Services
of Tempe, LLC, an affiliate of the Arizona Mills loan borrower. The property
manager has subordinated its contractual right to management fees to the lien
of the related security agreement.
Transfer of Ownership Interests. The Arizona Mills loan documents permit
transfers of up to 49%, in the aggregate, of interests in the Arizona Mills
borrower provided that, among other things, (i) there is no continuing default,
(ii) The Mills Limited Partnership continues to hold (a) a controlling interest
in the Arizona Mills borrower of not less than 25% and a 100% interest in the
managing member of the Arizona Mills borrower, (iii) if such transfers are to
persons other than The Mills
S-56
<PAGE>
Limited Partnership, The Taubman Realty Group Limited Partnership or Simon
Property Group, L.P., the confirmation of the rating agencies that any such
transfer will not result in a qualification, downgrade or withdrawal of the
ratings assigned to the certificates, (iv) the Arizona Mills borrower pays all
costs of the lender in connection with any such transfer and (v) if required by
the lender or the rating agencies, an updated substantive non-consolidation
opinion with respect to any such transfer. In addition, in connection with a
one-time assumption of the Arizona Mills property, the lender may not
unreasonably withhold its consent to such transfer if certain other
requirements contained in the loan documents are met and the transfer is made
to a transferee which is a wholly-owned subsidiary of certain categories of
institutional investors as provided for in the loan documents.
Permitted Financing. The Arizona Mills borrower is permitted to incur up
to $3,000,000 of debt secured by personal property at the Arizona Mills
property, provided that such financing, together with any trade payables
incurred in the ordinary course of business by the Arizona Mills borrower, does
not exceed four percent (4%) of the then outstanding principal balance of the
Arizona Mills loan.
The MacArthur Center Loan
The MacArthur Center Loan. The "MacArthur Center loan," representing 7.92%
of the initial pool balance, was originated by Archon Financial, L.P. on
October 19, 2000 (and subsequently purchased by GSMC) and has a principal
balance as of the cut-off date of approximately $101,000,000. The MacArthur
Center loan is a balloon loan and has a maturity date of October 1, 2010. The
MacArthur Center loan, together with the "MacArthur Center companion loans,"
are secured by a leasehold mortgage encumbering an anchored regional shopping
center located in downtown Norfolk, Virginia. The MacArthur Center loan and the
MacArthur Center companion loans (together, the "MacArthur Center loans") are
cross-defaulted. The MacArthur Center companion loans are owned by the trust
and have an aggregate principal balance of $43,883,791. The MacArthur Center
borrower is MacArthur Shopping Center LLC, a Delaware limited liability company
which is a special purpose, bankruptcy remote entity affiliated with Taubman
Centers, Inc., a publicly-traded corporation listed on the New York Stock
Exchange under the symbol "TCO."
The MacArthur Center borrower may not prepay the MacArthur Center loans
until July 1, 2010. Pursuant to an intercreditor agreement, the right of the
holder of the MacArthur Center companion loans to receive payments is
subordinated to the payment rights of the trust with respect to the MacArthur
Center loan. Prior to a monetary default under the applicable loan document or
if the MacArthur Center loan becomes specially serviced, principal and interest
received with respect to the MacArthur Center loans will be applied first to
pay interest and principal due on the MacArthur Center loan, second to pay
interest and principal due on the MacArthur Center companion loans and then to
pay principal on the MacArthur Center loans pro rata, based on their respective
principal balances. Upon the occurrence of a monetary default or if the
MacArthur Center loan becomes specially serviced, principal and interest
received with respect to the MacArthur Center loans will be applied to pay (i)
accrued and unpaid interest on the MacArthur Center loan, (ii) principal on the
MacArthur Center loan until its principal balance has been paid in full, (iii)
accrued and unpaid interest on the MacArthur Center companion loans and
principal on the MacArthur Center companion loans until their principal balance
has been paid in full, (iv) any prepayment premiums due on the MacArthur Center
loan and (v) any
S-57
<PAGE>
prepayment premiums due on the MacArthur Center loan and any prepayment
premiums due on the MacArthur Center companion loans. Other payment and
prepayment terms for the MacArthur Center loans are described on Annex A.
The MacArthur Center Property. The MacArthur Center property is an
enclosed, three-level urban shopping mall with approximately 150 mall shops, a
food court and kiosks. The property consists of approximately 450,094 square
feet of gross leasable area utilized as mall shops and cart space and 78,752
square feet of gross leasable area utilized as a movie theater, for a total
gross leasable area, excluding the anchor stores, of 528,846 square feet. The
MacArthur Center is anchored by Dillard's and Nordstrom. Additionally, a 1.59
acre anchor pad which has not yet been developed is currently also collateral
for the MacArthur Center loans. The land underlying Nordstrom is ground leased
by Nordstrom from the Norfolk Redevelopment and Housing Authority and the
improvements occupied by Nordstrom are owned by Nordstrom and neither the land
nor the improvements are part of the collateral for the MacArthur Center loans.
The land on which the Dillard's improvements are located is part of the
collateral for the MacArthur Center loans and is sub-leased by Dillard's from
the MacArthur Center borrower for a nominal annual rental payment. The
improvements on the Dillard's parcel are owned by Dillard's and are not part of
the collateral for the MacArthur Center loans. MacArthur Center opened in March
1999. The MacArthur Center borrower indicates in the monthly sales report for
August 31, 2000 that the mall shops had approximate average sales per square
foot of $315 for the twelve-month period ended August 31, 2000. As of September
6, 2000, the MacArthur Center property, excluding the anchor tenants, was 90%
occupied.
The following table summarizes the breakdown of the gross leaseable area,
or "GLA," and base rent information of mall shop tenants at the MacArthur
Center property:
TEN LARGEST MALL SHOP TENANTS(1)
<TABLE>
<CAPTION>
LEASE EARLIEST ANNUALIZED APPROXIMATE
EXPIRATION TERMINATION TENANT % OF BASE RENT ANNUALIZED % OF TOTAL
TENANT NAME DATE DATE(2) GLA GLA PER SF BASE RENT BASE RENT
----------- ---- ------- --- --- ------ --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
The Rainforest Cafe 5/31/09 12/08/00 15,980 3.0% $ 26.91 $ 430,000 2.6%
Foot Locker 3/11/09 N/A 14,711 2.8% $ 45.00 $ 661,995 4.0%
Waves 1/31/09 N/A 10,000 1.9% $ 25.00 $ 250,000 1.5%
Restoration Hardware 1/31/12 N/A 10,000 1.9% $ 20.00 $ 200,000 1.2%
Z Gallerie 3/31/09 1/31/02 9,500 1.8% $ 20.00 $ 190,000 1.2%
Pottery Barn 1/31/09 1/31/02 9,000 1.7% $ 20.00 $ 180,000 1.1%
Kincaid's Fish & Chop Shop 3/11/14 3/11/03 9,000 1.7% $ 15.69 $ 141,210 0.9%
Abercrombie & Fitch 5/31/09 6/13/02 7,595 1.4% $ 20.00 $ 151,900 0.9%
Castaldi's Market 7/31/14 1/31/11 7,027 1.3% $ 26.33 $ 185,000 1.1%
Mikasa 4/30/09 1/31/03 6,752 1.3% $ 26.00 $ 175,552 1.1%
------ ---- ---------- ----
Totals/Avg. 99,565 18.8% $2,565,657 15.7%
====== ==== ========== ====
</TABLE>
----------
(1) Based on gross leaseable area; does not include anchors and
non-traditional mall shop tenants: Regal Cinema, Inc. and Jeepers!
(2) Assuming sales thresholds identified in the respective lease are not met
and termination rights are exercised at the earliest opportunity.
S-58
<PAGE>
Regal Cinemas, Inc. ("Regal") leases approximately 78,752 square feet,
representing approximately 14.9% of GLA. Base rent received from Regal accounts
for approximately 5% of the total base rent collected by the MacArthur Center
borrower on the MacArthur Center property. The Regal lease expires on January
31, 2020. See "Risk Factors--A significant tenant ceasing to operate at a
retail property could adversely affect the property's value and cash flow" in
this prospectus supplement and "--Modified Lockbox; Certain Reserves" below.
Jeepers! leases approximately 20,000 square feet, representing
approximately 3.8% of total GLA. Base rent received from Jeepers! accounts for
less than 1% of the total base rent collected by the MacArthur Center borrower
on the MacArthur Center property. The Jeepers! lease expires on January 31,
2007.
As reflected in the table below, leases totaling approximately 188,746
square feet, representing approximately 35.7% of the GLA, contain provisions
that entitle either of the respective tenant or the MacArthur Center borrower
to terminate its lease during a specified period prior to the expiration date
to the extent sales thresholds identified in the respective lease are not met.
Additionally, leases totalling approximately 28,461 square feet, representing
approximately 5.4% of the GLA, contain provisions that entitle only the
respective tenant to terminate its lease during a specified period prior to the
expiration date to the extent sales thresholds identified in the respective
lease are not met. See "--Modified Lockbox; Certain Reserves" below.
The following table summarizes information related to the expiration and
termination dates of leases of the MacArthur Center property:
LEASE EXPIRATION & TERMINATION SCHEDULE
<TABLE>
<CAPTION>
LEASE EXPIRATION SCHEDULE LEASE EXPIRATION AND TERMINATION SCHEDULE(1)
-------------------------------------------------------------- -------------------------------------------------------------
APPROXIMATE
EXPIRING % TOTAL ANNUALIZED % OF TOTAL TOTAL EXPIRING/ % TOTAL ANNUALIZED % OF TOTAL
YEAR GLA GLA BASE RENT RENT TERM GLA GLA BASE RENT BASE RENT
-------- ---------- --------- -------------- ------------ ----------------- ----------- -------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
2000 1,368 0.3% $ 76,000 0.5% 17,348 3.3% $ 506,00 3.1%
2001 0 0.0% 0 0.0% 2,509 0.5% $ 98,200 0.6%
2002 100 0.0% $ 75,000 0.5% 83,064 15.7% $ 2,454,780 15.0%
2003 1,040 0.2% $ 80,000 0.5% 81,396 15.4% $ 3,003,846 18.3%
2004 3,749 0.7% $ 338,000 2.1% 27,167 5.1% $ 1,192,296 7.3%
2005 15,158 2.9% $ 941,287 5.7% 15,158 2.9% $ 941,287 5.7%
2006 7,190 1.4% $ 359,000 2.2% 3,092 0.6% $ 149,000 0.9%
2007 58,609 11.1% $ 1,975,979 12.1% 42,131 8.0% $ 1,257,469 7.7%
2008 10,598 2.0% $ 549,460 3.4% 5,076 1.0% $ 257,500 1.6%
2009 246,655 46.6% $ 8,768,942 53.6% 94,196 17.8% $ 3,938,586 24.1%
2010+ 184,379 34.9% $ 3,210,568 19.6% 157,709 29.8% $ 2,575,272 15.7%
vacant
space
------- ----- ----------- ------ ------- ------ ----------- ------
Totals/
Avg. 528,846 100.0% $16,374,236 100.00% 528,846 100.00% $16,374,236 100.00%
======= ===== =========== ====== ======= ====== =========== ======
</TABLE>
----------
(1) Assuming sales thresholds identified in the respective lease are not met
and termination rights are exercised at the earliest opportunity.
Pursuant to an agreement with the Norfolk Redevelopment and Housing
Authority, the MacArthur Center borrower operates and maintains two parking
garages
S-59
<PAGE>
located adjacent to MacArthur Center providing approximately 4,604 parking
spaces. The MacArthur Center borrower has pledged to the lender as additional
security its right to operate and maintain these garages, and the Norfolk
Redevelopment and Housing Authority has agreed to permit the lender to succeed
the MacArthur Center borrower if the lender were to foreclose.
The MacArthur Center Ground Lease. The MacArthur Center borrower holds a
leasehold interest in the land underlying the MacArthur Center pursuant to a
lease with the Norfolk Redevelopment and Housing Authority. The lease term of
the MacArthur Center ground lease commenced in March 1999 and ends on May 12,
2049, with 5 consecutive renewal options of 10 years each. The terms of the
ground lease provide for annual rental payments as follows:
o 1st Lease Year $200,000 per year
o 2nd Lease Year $300,000 per year
o 3rd Lease Year $400,000 per year
o 4th Lease Year $500,000 per year
o 5th Lease Year $515,000 per year
with $15,000 annual increases for each year after the fifth year. The terms of
the ground lease provide that the lessor must give the lender notice and an
opportunity to cure a default by the MacArthur Center borrower. Pursuant to the
terms of the ground lease, the lender may foreclose upon the MacArthur Center
borrower's leasehold interest without the lessor's consent and without any
obligation to assume the ground lease and may assign the ground lease without
the lessor's consent to any assignee at any time thereafter. The lessor is not
permitted to modify, amend, cancel or accept a surrender of the ground lease or
allow the MacArthur Center borrower to terminate the ground lease without prior
written consent of the lender.
Construction, Operation and Reciprocal Easement Agreement. The
construction, operation and reciprocal easement agreement among the MacArthur
Center borrower, Nordstrom, Inc., Dillard Department Stores, Inc. and Norfolk
Redevelopment and Housing Authority provides for, among other things, operating
cost contributions and covenants to operate. Under these operating covenants,
Nordstrom has agreed to operate until March 2019 under "Nordstrom" or an
acceptable trade name and Dillard's has agreed to operate until March 2014
under "Dillard's" or an acceptable trade name.
In the event of a casualty or condemnation of the MacArthur Center
property, the MacArthur Center borrower is required under the operating
agreement to rebuild the MacArthur Center property. Consequently, the lender
would be required to make any condemnation awards or insurance proceeds
available for restoration and would not be entitled to utilize these amounts to
prepay the MacArthur Center loans.
Defeasance. The MacArthur Center borrower may obtain the release of the
MacArthur Center property from the lien of the mortgage by exercising a
defeasance option on or after the second anniversary of the delivery date of
the certificates.
Value. The MacArthur Center loan has a 46.5% cut-off date LTV and the
MacArthur Center loan, together with the MacArthur Center companion loans, has
a cut-off date LTV of 66.8%. An appraisal performed by Cushman & Wakefield,
Inc. in September 2000 determined a value for the MacArthur Center property of
$217,000,000.
S-60
<PAGE>
Underwritten NCF and DSC Ratio. The MacArthur Center loan has an
underwritten NCF DSCR of 2.17x and an underwritten NCF of $18,387,396 and the
MacArthur Center loan, together with the MacArthur Center companion loans have
an underwritten NCF DSCR of 1.48x.
Modified Lockbox; Certain Reserves. All rents payable by tenants at the
MacArthur Center property are required to be deposited into a lockbox account.
Prior to a default under the MacArthur Center loans and for so long as DSCR on
the MacArthur Center property is not less than 1.23x, all funds in the lockbox
account will be released to the MacArthur Center borrower.
The MacArthur Center borrower will not be required to fund reserves for
ground rent, taxes, insurance and capital improvements as long as the DSCR for
the MacArthur Center property is at least 1.23x. If the DSCR on the MacArthur
Center property for the MacArthur Center loans is less than 1.23x, the
MacArthur Center borrower will not receive any funds from the lockbox account
until after (1) payment of all amounts then due under the MacArthur Center
loans and (2) deposit by the MacArthur Center borrower of all required reserves
for ground rents, taxes, insurance, capital improvements and tenant
improvements and leasing commissions. In addition, for so long as a default
exists, the lender may apply all funds in the lockbox account to the
obligations of the MacArthur Center borrower under the MacArthur Center loans.
Additionally, the MacArthur Center borrower is required to fund a tenant
improvement and leasing commission reserve in the monthly amount of $55,416.67
if the DSCR is at any time less than 1.28x for a twelve-month period.
The requirement that the MacArthur Center borrower fund reserves for
ground rent, taxes, insurance, capital improvements and tenant improvements and
leasing commissions will terminate after the DSCR increases to at least 110% of
the DSCR at the time the reserves were required subject to a minimum of 1.30x
for two consecutive calendar quarters.
At any time prior to December 31, 2003, the MacArthur Center borrower is
required to deliver a $2,800,000 letter of credit or fund a reserve in such
amount in six monthly installments after the earliest to occur of: (i) the
Regal Cinema tenant fails to pay the monthly minimum rent due for more than 45
days, (ii) Regal fails to pay any other amounts due under the Regal lease for
more than 90 days unless Regal contests such other amounts in good faith, (iii)
Regal ceases operations at the MacArthur Center property or (iv) a voluntary or
involuntary bankruptcy petition is filed with respect to Regal and the DSCR for
the MacArthur Center property is less than 1.40x. These reserves can be
released after December 31, 2003, upon the satisfaction of certain conditions
in the MacArthur Center loan documents.
At any time prior to December 31, 2003, the MacArthur Center borrower is
required to deliver a $400,000 letter of credit or fund a reserve in such
amount after the earliest to occur of (i) the Rainforest Cafe tenant to pay the
monthly minimum rent for more than 45 days, (ii) Rainforest fails to pay any
other amounts due under the Rainforest lease for more than 90 days unless
Rainforest contests such amount in good faith, (iii) Rainforest ceases
operations at MacArthur Center or (iv) the Rainforest lease has been
terminated. These reserves can be released after December 31, 2003, upon the
satisfaction of certain conditions in the MacArthur Center loan documents.
Property Management. The MacArthur Center property is managed by The
Taubman Company Limited Partnership, an affiliate of the MacArthur Center bor-
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<PAGE>
rower. The property manager has subordinated its contractual right to
management fees to the lien of the related security instrument.
Third Anchor. As of the date of origination of the MacArthur Center loans,
the MacArthur Center property included a third undeveloped anchor pad. The
lender is obligated to release the pad for the construction and operation of an
anchor store without consideration upon satisfaction of certain conditions in
connection with its development. There can be no assurances that the third
anchor pad will be developed.
Permitted Financing. The MacArthur borrower is permitted to incur up to
(i) $2,500,000 of debt incurred in connection with financing fixtures,
equipment or personal property secured only by the fixtures, equipment or
personal property at the MacArthur Center property, (ii) $4,000,000 in trade
payables incurred in the ordinary course of business and (iii) indebtedness
incurred in connection with any letter of credit delivered with respect to the
reserves.
Transfer of Ownership Interest. The MacArthur Center loans permit the
transfer of the MacArthur Center property upon satisfaction of certain
conditions set forth in the MacArthur Center loan documents, including that (i)
there is no continuing default, and (ii) if the MacArthur Center property is to
be transferred to a person which is not at least 50% owned and controlled by
The Taubman Realty Group Limited Partnership ("TRG"), an affiliate of the
MacArthur Center borrower, a confirmation from the rating agencies that the
transfer will not result in a downgrade, withdrawal or qualification of the
ratings assigned to the certificates. Transfers of the direct or indirect
ownership interests in the sole member of the MacArthur Center borrower are
permitted upon satisfaction of certain conditions set forth in the MacArthur
Center loan documents, including, among other things, that (i) there is no
continuing default, (ii) after giving effect to the transfer, general
partnership interests of at least 50% of the partnership interests in the sole
member of the MacArthur Center borrower are owned by TRG, a person which is at
least 50% owned and controlled by TRG or another person who satisfies certain
requirements set forth in the MacArthur Center loan documents, (iii) the sole
member of the MacArthur Center borrower is controlled by such entity as
described in (ii) above, and (iv) prior to the transfer of any of the general
partnership interests in the sole member of the MacArthur Center borrower by
such entity as described in (ii) above, delivery of a confirmation from the
rating agencies that such transfer will not result in a qualification,
downgrade or withdrawal of the ratings assigned to the certificates.
The 1999 Broadway Loan
The 1999 Broadway Loan. The "1999 Broadway loan" representing 3.92% of the
initial pool balance was originated by an affiliate of GACC on October 20,
2000, and has a principal balance as of the cut-off date of $50,000,000. The
1999 Broadway loan is an ARD loan with an anticipated repayment date of
November 1, 2010 and a maturity date of November 1, 2030. The 1999 Broadway
loan is secured by, among other things, a deed of trust and security agreement
encumbering an office building and parking garage in Denver, Colorado. The 1999
Broadway Loan was made to 1999 Broadway LLC, a special purpose, bankruptcy
remote Delaware limited liability company. The proceeds of the 1999 Broadway
loan were used to refinance the 1999 Broadway property. The equity owners of
the 1999 Broadway borrower were previously involved in a bankruptcy
reorganization relating to the 1999 Broadway property.
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<PAGE>
Payment and prepayment terms for the 1999 Broadway loan are set forth on
Annex A to this prospectus supplement.
The 1999 Broadway Property. The 1999 Broadway property consists of a
43-story office tower comprised of approximately 635,737 square feet of office
space. The 1999 Broadway property was built in 1985. The office space at the
1999 Broadway property was 96.00% occupied as of September, 2000.
The following table summarizes the breakdown of the gross leasable area
and base rent information for the five largest tenants at the 1999 Broadway
property:
FIVE LARGEST TENANTS
<TABLE>
<CAPTION>
APPROXIMATE ANNUALIZED
LEASE TENANT % OF % OF TOTAL BASE RENT
TENANT NAME EXPIRATION GLA (SF) GLA BASE RENT PER SF
----------- ---------- -------- --- --------- ------
<S> <C> <C> <C> <C> <C>
Columbine JDS Systems, Inc. 12/31/2008 100,420 15.80% 12.87% $ 14.60
GSA(1) 10/14/2003 97,970 15.41% 17.26% $ 20.06
Lucent Technologies, Inc. 12/31/2005 72,979 11.48% 12.79% $ 19.96
US West Communications, Inc.(2) 12/31/2002 688,448 10.77% 11.34% $ 18.87
H.S. Resources, Inc. 6/14/2003 52,749 8.30% 7.21% $ 23.90
---------- ------- ----- ----- -------
Totals 392,566 61.75% 12.92% $ 18.95
======= ===== ===== =======
</TABLE>
(1) Four departments of the General Services Administration occupy space in the
property--the Department of Labor, the Peace Corps, the Federal Tax Court
and the Office of Surface Mining. The table reflects aggregate space of the
GSA leases, the earliest of which expires in 10/14/03.
(2) Aggregated space reflects multiple US West leases, the earliest of which
expires in 12/31/02.
The following table summarizes information related to the expiration of
the leases of the 1999 Broadway property:
LEASE EXPIRATION SCHEDULE
<TABLE>
<CAPTION>
NUMBER OF ANNUALIZED % OF TOTAL
YEAR LEASES EXPIRING SF % OF TOTAL SF BASE RENT BASE RENT
---- ------ ----------- ------------- --------- ---------
<S> <C> <C> <C> <C> <C>
2000 4 9,303 1.46% $ 126,252 1.17%
2001 4 8,160 1.28% $ 127,625 1.18%
2002 6 72,873 11.46% $ 1,283,156 11.91%
2003 12 75,703 11.91% $ 1,237,937 11.49%
2004 7 117,378 18.46% $ 1,917,630 17.79%
2005 4 90,091 14.17% $ 1,783,236 16.55%
2006 1 960 0.15% $ 22,560 0.21%
2007 1 4,778 0.75% $ 78,747 0.73%
2008 5 148,535 23.36% $ 2,282,123 21.17%
2009 2 25,448 4.00% $ 475,669 4.41%
2010+ 3 58,910 9.27% $ 1,442,704 13.39%
Vacant 23,618 3.71% $ 613,832 5.70%
------- ------ ----------- ------
Totals 49 635,757 100.00% $10,777,639 100.00%
== ======= ====== =========== ======
</TABLE>
Defeasance. The 1999 Broadway borrower may obtain the release of the 1999
Broa dway property from the lien of the security instrument by exercising a
defeasance option on or after the second anniversary of the closing date of the
certificates.
Value. The 1999 Broadway loan has a cut-off date LTV of 63.25% An
appraisal performed on September 2, 2000 determined a value for the 1999
Broadway property of $79,000,000.
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<PAGE>
Underwritten NCF and DSC Ratio. The 1999 Broadway loan has an underwritten
NCF of $6,499,426 and underwritten NCF DSCR of 1.48x.
Lockbox. All rents payable by tenants of the 1999 Broadway property are
required to be deposited directly into a lockbox account controlled by the
servicer.
Rollover Reserve. On each monthly payment date, the 1999 Broadway borrower
is required to deposit $70,047 into a rollover reserve account to be used for
tenant improvements and up-front leasing commissions required to retain or
replace existing tenants at the 1999 Broadway property.
PMC Reserve. The 1999 Broadway borrower funded the PMC reserve, in the
amount of $1,005,500, at loan closing. The reserve will be released to the 1999
Broadway borrower after certain conditions are met, including, among other
things, that the PMC International tenant, is in occupancy and has paid three
consecutive months of base rent.
Property Management. The 1999 Broadway property is managed by Winthrop
Management, LLC, ("Winthrop") an affiliate of the 1999 Broadway borrower.
Winthrop has subordinated its contractual right to management fees to the lien
of the security instrument.
The Drucker & Faulk Multifamily Portfolio Loans
The Drucker & Faulk Multifamily Portfolio Loans. The "Drucker & Faulk
multifamily portfolio loans" consist of 3 mortgage loans representing 3.87% of
the initial pool balance, were originated by Archon Financial, L.P. on
September 29, 2000. The Drucker & Faulk multifamily portfolio loans have an
aggregate principal balance as of the cut-off date of $49,291,990. The Drucker
& Faulk multifamily portfolio loans are not cross-collateralized or
cross-defaulted. The Drucker & Faulk multifamily portfolio are balloon loans
with a maturity date of October 1, 2010 and are secured by, among other things,
fee mortgages encumbering a 600-unit and a 276-unit multifamily complex, each
located in Orlando, Florida and a 253-unit multifamily complex located in
Morrisville, North Carolina.
The Harbor Pointe Apartments Property. The Harbor Pointe Apartments
property is a multifamily complex with 600 units. The property was built in
1984, with additional units constructed in 1987, and as of September, 2000, was
92% occupied.
The Brittany at Waterford Lakes Property. The Brittany at Waterford Lakes
Apartments property is a multifamily complex with 276 units. The property was
built in 1999 and as of September, 2000, was 98% occupied.
The Cross Timbers Apartments Property. The Cross Timbers Apartments
property is a multifamily complex with 253 units. The first phase was built in
1994 and the second phase was completed in 1998 and as of September, 2000, was
94% occupied.
The borrowers with respect to the Harbor Pointe Apartments loan are Level
Associates, L.P. and Shire II Associates Limited Partnership, holding as
tenants in common. Shire Associates II Limited Partnership additionally owns an
undivided 52% interest in an unrelated property and Level Associates, L.P. also
owns the Brittany at Waterford Lakes property and is the related borrower.
Neither of Level Associates, L.P. nor Shire II Associates Limited Partnership
are single purpose entities but each has covenanted in the respective loan
agreements not to acquire any property not owned at the time of origination of
the Drucker & Faulk multifamily portfolio loans. The borrower with respect to
the Cross Timbers Apartment loan is a newly-formed bankruptcy remote, single
purpose entity.
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<PAGE>
Payment and prepayment terms for each of the Drucker & Faulk multifamily
portfolio loans are set forth on "Annex A" to this prospectus supplement.
Defeasance. The borrower under each Drucker & Faulk multifamily portfolio
loan may obtain the release of the respective property from the lien of the
mortgage by exercising a defeasance option on or after the second anniversary
of the closing date of the certificates.
Value; Underwritten NCF and DSC Ratio. The following table summarizes
information relating to the underwriting and origination of the Drucker & Faulk
multifamily portfolio loans:
<TABLE>
<CAPTION>
CUT-OFF
DATE APPRAISAL APPRAISAL NCF UNDERWRITTEN
MORTGAGE LOAN LTV DATE VALUE DSCR NCF LOAN AMOUNT
------------- --- ---- ----- ---- --- -----------
<S> <C> <C> <C> <C> <C> <C>
Harbor Pointe
Apartments Loan 76.6% August 31, 2000 $24,000,000 1.25x $2,009,715 $18,378,727
Brittany at Waterford
Lakes Loan 75.4% August 31, 2000 $21,000,000 1.33x $1,813,550 $15,831,186
Cross Timbers
Apartments Loan 78.6% September 14, 2000 $19,200,000 1.23x $1,599,931 $15,082,077
</TABLE>
Property Management. The Drucker & Faulk multifamily portfolio properties
are managed by Drucker & Faulk, an affiliate of each of the respective
borrowers, which has subordinated its contractual right to management fees to
the lien of the respective security instruments.
The AmeriSuites Loan
The AmeriSuites Loan. The AmeriSuites loan (the "AmeriSuites loan")
represents 2.47% of the initial pool balance, was originated by GMACCM on
October 20, 2000 and has a principal balance as of the cut-off date of
approximately $31,468,201. The AmeriSuites loan is an ARD loan evidenced by a
promissory note in the amount of $36,000,000 with an anticipated repayment date
of November 1, 2010 and a maturity date of November 1, 2025. The AmeriSuites
loan is secured by eight fee mortgages or deeds of trust and security
agreements and assignments of leases and rents on seven limited service hotels
and one extended stay hotel located in eight states. The AmeriSuites loan and
the AmeriSuites companion loan (together, the "AmeriSuites loans") are
cross-defaulted. The AmeriSuites companion loan is owned by the trust. The
AmeriSuites loans were made to EQI Financing Partnership V, L.P., a single
purpose, bankruptcy remote entity 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".
The AmeriSuites borrower may not prepay the AmeriSuites loans until August
1, 2010. Pursuant to an intercreditor agreement, the right of the holder of the
AmeriSuites companion loan to receive payments is subordinated to the payment
rights of the trust with respect to the AmeriSuites loan. Prior to a monetary
default, or the occurrence of a special servicing event with respect to the
AmeriSuites loan, principal and interest received with respect to the
AmeriSuites loans will be applied first to pay interest and principal due on
the AmeriSuites loan, second to pay interest and principal due on the
AmeriSuites companion loan and then to pay principal on the AmeriSuites loans
pro rata based on their respective principal balances. During the continuance
of a monetary default, or if the AmeriSuites loan becomes a specially serviced
mortgage loan, principal
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<PAGE>
and interest received with respect to the AmeriSuites loans will be applied to
(i) accrued and unpaid interest on the AmeriSuites loan, (ii) principal on the
AmeriSuites loan until its principal balance has been paid in full, (iii)
accrued and unpaid interest on the AmeriSuites companion loan, (iv) principal
on the AmeriSuites companion loan until its principal balance has been paid in
full, (v) any prepayment premiums due on the AmeriSuites loan and (vi) any
prepayment premiums due on the AmeriSuites companion loan, in that order. As of
the cut-off date, the holder of the AmeriSuites companion loan is expected to
be an affiliate of the servicer. Other payment and prepayment terms for the
AmeriSuites loans are described on Annex A.
The AmeriSuites Properties. The AmeriSuites properties consist of 7
limited service hotel properties and one extended stay hotel located in eight
states and described in the table below. 6 of the hotels are operated under the
AmeriSuites name, one of the hotels is operated under the Residence Inn name
and one is operated under the Homewood Suites name. All of the hotels were
constructed between 1986 and 1997. The AmeriSuites properties range in size
from 92 rooms to 128 rooms and have a total of 965 rooms.
The following table summarizes certain occupancy and rental information
concerning the AmeriSuites loans.
OCCUPANCY AND RENTAL INFORMATION
<TABLE>
<CAPTION>
NO. OF YEAR YEAR
HOTEL NAME LOCATION ROOMS BUILT RENOVATED
---------- -------- ----- ----- ---------
<S> <C> <C> <C> <C>
AmeriSuites -- Birmingham Hoover, AL 128 1997 NAP
AmeriSuites Uptown
-- Albuquerque Albuquerque, NM 128 1997 NAP
AmeriSuites -- Linthicum
Heights Linthicum Heights, MD 128 1996 NAP
AmeriSuites -- Tampa Tampa, FL 126 1994 NAP
AmeriSuites -- Flagstaff Flagstaff, AZ 117 1993 1999
AmeriSuites -- Forest Park Forest Park, OH 126 1992 1998-1999
Homewood Suites --
Germantown Germantown, TN 92 1996 NAP
Residence Inn -- Somers Point Somers Point, NJ 120 1986 1998-1999
---
Totals 965
===
<CAPTION>
AVERAGE
OCCUPANCY ALLOCATED
HOTEL NAME RATE(1) ADR(1)(2) REVPAR(1)(3) LOAN AMOUNT(4)
---------- ------- --------- ------------ --------------
<S> <C> <C> <C> <C>
AmeriSuites -- Birmingham 69.4% $ 67.30 $ 46.69 $ 2,925,668
AmeriSuites Uptown
-- Albuquerque 79.6% $ 68.49 $ 54.52 $ 5,314,629
AmeriSuites -- Linthicum
Heights 83.4% $ 86.81 $ 72.40 $ 5,678,262
AmeriSuites -- Tampa 72.4% $ 94.59 $ 68.52 $ 6,721,957
AmeriSuites -- Flagstaff 71.7% $ 60.52 $ 43.39 $ 1,223,763
AmeriSuites -- Forest Park 62.2% $ 72.33 $ 44.99 $ 2,211,515
Homewood Suites --
Germantown 66.1% $ 86.64 $ 57.28 $ 2,672,175
Residence Inn -- Somers Point 75.8% $ 105.21 $ 79.75 $ 4,720,230
---- -------- ------- -----------
Totals 72.82% $ 80.00 $ 58.46 $31,468,201
===== ======== ======= ===========
</TABLE>
----------
(1) Calculated for the twelve month period ended August, 2000
(2) Average daily rate
(3) Revenue per available room
(4) Allocated loan amounts do not include the companion loan.
Property Management. The six AmeriSuites hotels are leased by the
AmeriSuites borrower to Oradell Holding Corp., a subsidiary of Prime
Hospitality Corp., under operating leases. Each operating lease has a term that
expires on either December 31, 2007 or June 30, 2008. Prime Hospitality Corp.
is an owner, manager and franchisor of hotels, and is publicly traded on the
NYSE under the symbol "PDQ." No management fee is payable with respect to any
of the six AmeriSuites hotels.
The Homewood Suites property in Germantown, Tennessee is leased to
Crossroads/ Future Company, L.L.C., a subsidiary of Interstate Hotels
Management, Inc. under an
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<PAGE>
operating lease that expires on June 25, 2012. Interstate Hotels Management,
Inc. is a publicly traded company listed on the NASDAQ under the symbol "IHCO."
The property is managed by Crossroads Hospitality Company, LLC, an affiliate of
the operating lessee, under a management agreement that will expire on June 25,
2012. The manager is entitled to receive a base management fee of 6% of gross
operating revenues under the agreement.
Each of the operating leases for Oradell and Crossroads/Future has been
subordinated to the applicable AmeriSuites security instrument pursuant to a
subordination, nondisturbance and attornment agreement. Each agreement grants
the lender the right to receive notice from the applicable tenant of defaults
by the borrower under the lease, and grants the lender rights to cure such
defaults. Subject to the lender's obligation to recognize a non-defaulting
tenant upon foreclosure of the security instrument, the agreement subordinates
the tenant's leasehold interest to that of the lender. Each agreement prohibits
amendment of the lease without the lender's consent and, in the case of the
Crossroads/Future agreement, casualty proceeds and condemnation awards are made
available for the restoration of the Homewood Suites property.
The Residence Inn property in Somers Point, New Jersey is managed by
MeriStar Management Company, L.L.C., a subsidiary of MeriStar Resorts and
Hotels, Inc. under a month-to-month management agreement. MeriStar Resorts and
Hotels, Inc. is a publicly traded company listed on the NASDAQ under the symbol
"MMH." The manager is entitled to receive a base management fee of 5% of gross
operating revenues under the agreement.
Each of the managers of the Homewood Suites and Residence Inn properties
has entered into agreements with the lender wherein, its contractual right to a
management fee is subordinate to the lien of the applicable security instrument
to the extent that such manager, among other things, charges a management fee
in excess of 5% of gross operating revenues. In addition, each agreement is
subordinated to the operating lease and the agreement will be terminated in the
event of the termination of the related operating lease.
The AmeriSuites borrower need not obtain the lender's consent to a change
in management at an AmeriSuites property if the new manager is a nationally
known "qualified manager" and the management agreement is in the form specified
in the applicable loan documents; otherwise the AmeriSuites borrower must
obtain confirmation from the rating agencies that the change in management will
not result in a withdrawal, downgrade or qualification of the ratings assigned
to the certificates.
Defeasance. The AmeriSuites borrower may obtain the release of all of the
AmeriSuites properties from the liens of the security instruments by exercising
a defeasance option on or after the second anniversary of the delivery date.
Release and Substitutions. On or after the second anniversary of the
delivery date, the AmeriSuites borrower may obtain the release of an individual
property provided that, among other things, (i) there is no continuing default;
(ii) the lender determines that DSCR for the remaining properties that are not
released is equal to the greater of (a) the DSCR for all of the AmeriSuites
properties as of loan closing and (b) the DSCR for all of the AmeriSuites
properties, including the property to be released, for the immediately
preceding 12 months; (iii) the AmeriSuites borrower partially defeases the loan
in the amount of 125% of the allocated loan group amount for the property to be
released; and (iv) the rating agencies confirm that the release will not result
in a withdrawal, downgrade or qualification of the ratings on the certificates.
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<PAGE>
In addition, on or after the second anniversary of the delivery date but
before the ARD, the AmeriSuites borrower may obtain a release of any
AmeriSuites property upon the substitution of its ownership interest in another
hospitality property for each property released, provided that, among other
things, (i) there is no continuing default under the AmeriSuites loan; (ii) the
lender receives an appraisal reflecting that the value of the substitute
property is equal to or greater than 105% of the value of the released
property; (iii) the DSCR, after giving effect to the release and substitution,
is equal to the greater of (a) the DSCR for all of the AmeriSuites properties
as of loan closing and (b) the DSCR for all of the AmeriSuites properties,
including the property to be released, immediately preceding the release; (iv)
the NOI for the substitute property does not show a downward trend over the
three years prior to the substitution; (v) the NOI and DSCR for the substitute
property are greater than 105% of the NOI and DSCR for the released property;
(vi) the lender receives a Phase I environmental report on the substitute
property; and (vii) a confirmation from the rating agencies that the
substitution will not result in a withdrawal, downgrade or qualification of the
ratings on the certificates.
Lockbox. All rents payable under the operating leases at the AmeriSuites
properties and other sums payable with respect to the properties are required
to be deposited into a lockbox account. Prior to a default under the
AmeriSuites loan, funds in the lockbox account are transferred periodically to
a borrower-controlled account by the lockbox bank. For and during such time as
(i) the DSCR on the AmeriSuites properties is less than 1.45x, (ii) any
AmeriSuites property is not maintained in accordance with any property
improvement program requirements of the related management or franchise
agreement, or (iii) the occurrence of the ARD or a default, the lender will
control the lockbox and payments from the lockbox will be made in the priority
set forth in the note or certain other loan documents.
Out Parcel. The AmeriSuites borrower may obtain a release of an unimproved
portion of the Tampa, Florida property provided that, among other things, (i)
there is no continuing default on the AmeriSuites loan, (ii) the AmeriSuites
borrower pays lender's out of pocket costs and expenses in connection with the
release, (iii) the Tampa, Florida property complies with all applicable zoning
and other laws after the release and (iv) the lender receives an opinion of tax
counsel that the release of the out parcel does not constitute a "significant
modification" under relevant tax rules.
Value. The AmeriSuites loan has a 44.45% cut-off date LTV and the
AmeriSuites loan, together with the AmeriSuites companion loan, has a 50.80%
cut-off date LTV. Appraisals performed in August, 2000 determined an aggregate
value for the AmeriSuites properties of $70,800,000.
Underwritten NCF and DSC Ratio. The AmeriSuites loan has an underwritten
NCF DSCR of 2.03x, and an underwritten NCF of $ 6,175,617 and the AmeriSuites
loan, together with the AmeriSuites companion loan, have an underwritten NCF
DSCR of 1.81x.
Franchise Agreements. Each of the AmeriSuites properties is operated under
a hotel franchise agreement that grants a license to operate the hotel as part
of a nationally-recognized chain.
The six hotel properties leased to Oradell are licensed to operate as
AmeriSuites under separate franchise agreements between Oradell and AmeriSuites
Franchising, Inc., each of which are each coterminous with the applicable
operating lease. Each
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<PAGE>
franchise agreement may be renewed for a successive ten year term upon payment
of a renewal fee and also grants Oradell an exclusive area of operation. Under
the franchise agreements, Oradell is required to pay various fees based upon
gross room sales including a continuing royalty of 4%, 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 Oradell. The letter
also gives the lender or a subsequent holder of the security instrument 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.
The Somers Point, New Jersey property is licensed to operate as a
Residence Inn by Marriott. The franchise agreement for the property expires on
August 25, 2001. The applicable 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 4% 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 property
as a Residence Inn 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, the subsequent owner may apply for a new
Residence Inn franchise agreement that will be processed in accordance with
then prevailing franchisee requirements.
The property leased to Crossroads/Future is licensed to operate as a
Homewood Suites hotel pursuant to a franchise agreement between the lessee and
Promus Hotels, Inc. which expires on May 6, 2016. Fees under these franchise
agreements include a 4% continuing royalty and 4% marketing/reservation
contribution, each calculated on gross room revenues. "Comfort letters"
delivered to the lender give notice and cure rights to the lender and give
lender or the trust the right, upon foreclosure or deed in lieu thereof, to
enter into a replacement franchise agreement for the balance of the term upon
payment of a nominal fee. A subsequent owner other than the lender or the trust
may apply for a new franchise agreement with Promus that will be processed in
accordance with then prevailing franchisee requirements.
Replacement Reserve. The AmeriSuites borrower is required to fund a
replacement reserve in the amount of 4% of operating revenues if the DSCR is
less than 1.45x for a 12-month period.
Effect of REIT Modernization Act. The REIT Modernization Act (the "RMA")
which was enacted in 1999, provides that, effective January 1, 2001, real
estate investment trusts such as Equity Inns, Inc. may own a taxable REIT
subsidiary ("TRS") that can lease the property from its affiliated REIT so long
as an eligible independent contractor operates and manages the property. The
RMA is intended to permit companies such as Equity Inns, Inc. to generate new
income without disqualifying the company from REIT status. The security
instruments and related documents for the AmeriSuites properties contain
certain provisions to allow the AmeriSuites borrower to take advantage of the
benefits of the RMA beginning in 2001.
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<PAGE>
The AmeriSuites borrower may enter into a new operating lease with or
permit a transfer of the lessee's interest under the existing operating lease
to a bankruptcy remote, single purpose TRS provided that, among other things,
(i) the rent payable under the operating lease with the TRS qualifies under the
RMA and other relevant tax rules; (ii) the operating lease with the TRS is
substantially on the terms set forth in the form attached to the loan
documents; (iii) the TRS has agreed to subordinate its operating lease to the
lien of the applicable security instrument; (iv) the TRS enters into a new
management agreement with a manager that is (A) an eligible independent
contractor under the RMA and other relevant tax rules; (B) the manager is a
nationally known qualified manager as specified in the loan documents; and (C)
the manager has agreed, with certain exceptions, to subordinate its contractual
right to management fees to the lien of the applicable security instrument; and
(v) the borrower delivers to the lender acceptable organizational documents and
a non-consolidation opinion relating to the TRS. In connection with any such
creation or transfer of an operating lease to a TRS, the AmeriSuites borrower
may amend or enter into a new franchise agreement with the existing franchisor.
All revenue from an AmeriSuites property which is subject to an operating lease
to a TRS is required to be deposited into the lockbox account by the property
manager.
Debt Service Reserve Escrow Fund. The AmeriSuites borrower deposited with
lender a $73,112 debt service reserve at closing as additional security for the
AmeriSuites loan, to be released at such time as the lessee's interest under
the operating lease for the Homewood Suites property is transferred to a TRS or
to a bankruptcy remote, single purpose entity unaffiliated with the AmeriSuites
borrower which otherwise qualifies as a lessee under the loan documents. It is
a default under the AmeriSuites loan documents if this transfer does not take
place on or before March 1, 2001.
THE SELLERS AND ORIGINATORS
GMACCM. GMAC Commercial Mortgage Corporation, a California corporation, is
an indirect wholly-owned subsidiary of GMAC Mortgage Group, Inc., which is a
wholly-owned direct subsidiary of General Motors Acceptance Corporation. GMACCM
is also an affiliate of the depositor. Some of the mortgage loans sold by
GMACCM to the depositor were originated by Residential Funding Corporation, an
affiliate of GMACCM and the depositor. The principal offices of GMACCM are
located at 200 Witmer Road, Horsham, Pennsylvania 19044. Its telephone number
is (215) 328-4622.
GACC. German American Capital Corporation, a Maryland corporation, is a
wholly-owned subsidiary of Deutsche Bank North America Holding Corp., which is
a wholly-owned subsidiary of Deutsche Bank AG, a German corporation. GACC is
also an affiliate of Deutsche Bank Securities Inc., one of the underwriters.
GACC engages primarily in the business of purchasing and holding mortgage loans
pending securitization, repackaging or other disposition. GACC also acts from
time to time as the originator of mortgage loans. Although GACC purchases and
sells mortgage loans for its own account, it does not act as a broker or dealer
in connection with any such mortgage loans. The principal offices of GACC are
located at 31 West 52nd Street, New York, New York 10019. Its telephone number
is (212) 469-7280.
GSMC. Goldman Sachs Mortgage Company, a New York limited partnership, is
an affiliate of Goldman, Sachs & Co., one of the underwriters. GSMC engages
primarily in the business of acquiring and depositing mortgage assets in trusts
in exchange for
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certificates evidencing interests in such trusts and selling or otherwise
distributing such certificates. The mortgage loans and companion 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.
Residential Funding Corporation. Residential Funding Corporation is a
Delaware corporation and an affiliate of GMACCM, one of the sellers, and the
depositor. Residential Funding Corporation maintains its principal office at
8400 Normandale Lake Boulevard, Suite 600, Minneapolis, Minnesota 55437 and its
telephone number is (612) 832-7000.
Archon. Archon Financial, a Delaware limited partnership, is an affiliate
of Goldman Sachs Mortgage Company, one of the sellers. The mortgage loans
originated by Archon were sold by GSMC. The principal offices of Archon
Financial are located at 600 East Las Colinas Blvd., Suite 800, Irving, Texas
75039 and its telephone number is (972) 501-3900.
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 and Insurance
"Phase I" environmental site assessments or updates of previously
conducted assessments were performed on all but 25 of the mortgaged properties,
which constitute 2.48% of the initial pool balance. In each case where a "Phase
I" environmental assessment was not performed, such property is covered by an
environmental insurance policy. "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 8 of the mortgaged properties which represent 3.58%
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 on a mortgaged property may
reduce or delay your payments."
28 mortgage loans that represent 2.64% of the initial pool balance,
environmental insurance was obtained from an affiliate of American
International Group, Inc. for each mortgage loan for which the underlying
mortgaged property or properties were not subject to an environmental
assessment. Each environmental insurance policy insures the trust fund against
losses resulting from certain known and unknown environmental conditions at the
related mortgaged property or properties during the applicable policy period.
Subject to certain conditions and exclusions, the insurance policies generally
provide coverage against (i) losses resulting from default under the applicable
mortgage loan, up to the outstanding balance of the mortgage loan, if on-site
environmental
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conditions are discovered at the mortgaged property during the policy period
and no foreclosure of the mortgaged property has taken place, (ii) losses from
third-party claims against the lender during the policy period for bodily
injury, property damage or clean-up costs resulting from environmental
conditions at or emanating from the mortgaged property and (iii) after
foreclosure, costs of clean-up of environmental conditions discovered during
the policy period to the extent required by applicable law, including any court
order or other governmental directive.
The information contained in this prospectus supplement is based on the
environmental assessments and has not been independently verified by the
depositor, the sellers, the servicer, the underwriters or any of their
respective affiliates.
Property Condition Assessments
Inspections or updates of previously conducted inspections of all of the
mortgaged properties were conducted in connection with the origination or the
purchase of the related mortgage loan by independent licensed engineers or
architects or both. For all but 8 of the mortgaged properties, which secure
mortgage loans representing 2.88% 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 8 of the mortgaged properties, which secures
mortgage loans representing 2.69% of the initial pool balance, the appraisals
were performed during the 12-month period before the cut-off date. The
appraised value of the related mortgaged property or properties is greater than
the original principal balance of the related mortgage loan or the aggregate
original principal balance of any set of cross-collateralized loans. All
appraisals were conducted by an independent appraiser that is state certified
or designated as a member of the Appraisal Institute. The appraisal for all but
2 mortgaged properties, which constitute 0.78% 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 securing a defaulted mortgage
loan 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.
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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,
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, 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 accompa-
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nied by payment of a prepayment premium or yield maintenance payment. For a
description of the cash reserves or letters of credit and related earnout
information, see "Annex A" to this prospectus supplement.
ASSIGNMENT OF THE MORTGAGE LOANS; REPURCHASES AND SUBSTITUTIONS
On or before the closing date the depositor will acquire the mortgage
loans, and the companion 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 and companion loans,
without recourse, to the trustee for the benefit of the holders of the
certificates or the Class S certificates, as applicable.
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 and companion loans
sold by that seller to the depositor, to the trustee:
o the original mortgage note, endorsed, without recourse, in blank or to
the order of the trustee;
o the original or a copy of the mortgage(s), together with originals or
copies of any intervening assignments of the document(s), in each case
with evidence of recording thereon unless the document(s) have not
been returned by the applicable recorder's office;
o the original or a copy of any assignment(s) of rents and leases, if
the assignment is a document separate from the mortgage, together with
originals or copies of any intervening assignments, in each case with
evidence of recording thereon, unless the document(s) have not been
returned by the applicable recorder's office;
o an assignment of each mortgage in blank or in favor of the trustee, in
recordable form;
o an assignment of any assignment(s) of rents and leases, if the item is
a document separate from the mortgage, in blank or in favor of the
trustee, in recordable form;
o any UCC financing statements and related original assignments to the
trustee;
o an original or copy of the related lender's title insurance policy,
or, if a title insurance policy has not yet been issued, a commitment
for title insurance "marked-up" at the closing of the mortgage loan;
and
o when relevant, the ground lease or a copy.
If the seller cannot deliver the original mortgage note for any mortgage
loan or companion 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 or companion 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
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any assignments of rents and leases to be completed in the name of the trustee
if delivered in blank and submitted for recording in the real property records
of the appropriate jurisdictions, subject to receipt of the applicable
recording information.
If the trustee determines that any of the required documents were not
delivered or that any document is defective, and the omission or defect
materially and adversely affects the value of the related mortgage loan or the
interests of certificateholders in the mortgage loan, the applicable seller
will have 90 days after the earlier of discovery or 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 and interest on such advances. That
seller's repurchase or substitution obligation will be the sole remedy
available to the certificateholders and the trustee. If the applicable seller
repurchases a mortgage loan after more than 180 days following its receipt of
notice of a material breach of a representation or warranty, the applicable
seller will be required to pay a 1% liquidation fee. 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
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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.
(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
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necessary repairs and maintenance) and the seller has no actual notice
of the commencement of a proceeding for the condemnation of all or any
material portion of the mortgaged property.
(9) At origination, the mortgage loan complied in all material respects
with all applicable usury laws.
(10) The proceeds of the mortgage loan have been fully disbursed and there
is no requirement for future advances.
(11) The mortgage note and mortgage for the mortgage loan and all other
documents and instruments evidencing, guaranteeing, insuring or
otherwise securing the mortgage loan have been duly and properly
executed by the parties thereto, and each is the legal, valid and
binding obligation of its maker, subject to any applicable
non-recourse provisions and any applicable state anti-deficiency
legislation, enforceable in accordance with its terms, except as
enforcement may be limited by bankruptcy, insolvency, reorganization,
redemption, fraudulent conveyance, receivership, moratorium or other
laws relating to or affecting the rights of creditors generally and by
general principles of equity regardless of whether the enforcement is
considered in a proceeding in equity or at law.
(12) All improvements upon the mortgaged property are insured against loss
by hazards of extended coverage in an amount, with a customary
deductible, at least equal to the lesser of the outstanding balance of
the mortgage loan and 100% of the full replacement cost of the
improvements located on the mortgaged property, and the related hazard
insurance policy contains appropriate endorsements to avoid the
application of co-insurance provisions and does not permit reduction
in insurance proceeds for depreciation.
(13) The mortgaged property was the subject of one or more environmental
site assessments or an update of a previously conducted assessment,
which was performed on behalf of the seller, or for which the related
report was delivered to the seller in connection with its origination
or acquisition of the mortgage loan; and the seller, having made no
independent inquiry other than reviewing the resulting report(s) or
employing an environmental consultant to perform that assessment(s) or
both, has no knowledge of any material and adverse environmental
condition or circumstance affecting the mortgaged property that was
not disclosed in the related report(s).
(14) The mortgage loan is not cross-collateralized with a mortgage loan
other than a related companion loan or 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 mechanic's 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.
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(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.
(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
o 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 the earlier of
discovery or 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
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years following the delivery date, substitute a replacement mortgage loan for
the affected mortgage loan within that 90-day period and pay any substitution
shortfall amount. See "--Assignment of the Mortgage Loans; Repurchases and
Substitutions" above. 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.
With respect to any repurchase of the Arizona Mills loan, pursuant to the
terms and conditions of the GMACCM mortgage loan purchase agreement and the
GSMC mortgage loan purchase agreement, if either the interest in the Arizona
Mills loan conveyed under the GMACCM mortgage loan purchase agreement or the
interest in the Arizona Mills loan conveyed under the GSMC mortgage loan
purchase agreement is required to be repurchased because of a breach of a
representation and warranty, the trustee is entitled to require that both such
interests to be repurchased concurrently by the respective mortgage loan
sellers. The applicable mortgage loan sellers will maintain the right to
deliver a qualifying substitute mortgage loan in lieu of repurchase with
respect to their respective interests in the Arizona Mills loan.
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 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.
Each of the AmeriSuites loan group and the MacArthur Center loan group
consist of a mortgage loan and one or more companion loans that are
subordinated to the respective mortgage loan under the terms of an
intercreditor agreement. Together, each set of mortgage loans and companion
mortgage loans are referred to as a loan group. The initial pool balance and
the mortgage pool include only:
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o the mortgage loan (and none of the companion loans) in each loan
group, and
o each of the other mortgage loans not included in a loan group.
Accordingly, all numerical and statistical information provided herein
with respect to the initial mortgage pool and mortgage pool is presented and
calculated solely with respect to the mortgage loans (and none of the companion
loans) in such loan group and each of the other mortgage loans not included in
a loan group. See "Description of the Mortgage Pool--Significant Mortgage
Loans--The MacArthur Center Loan" and "--The Amerisuites Loan" and "The
Intercreditor Agreements, Companion Loans and Loan Groups" in this prospectus
supplement.
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SERVICING OF THE MORTGAGE LOANS
This servicer will be responsible for the servicing and administration of
all the mortgage loans; however, the holder or holders of certificates
evidencing a majority interest in the controlling class will be entitled to
terminate substantially all the rights and duties of the servicer in respect of
specially serviced mortgage loans that are included in the trust and to appoint
a replacement to perform such duties under the same terms and conditions as
applicable to the servicer. See "--Termination of the Servicer for Specially
Serviced Mortgage Loans and REO Properties" and "--REO Properties".
In general, the companion loans will be serviced and administered under
the pooling and servicing agreement as though they were mortgage loans except
that no P&I advances will be made for any delinquent principal and or interest
payments. If a companion loan becomes specially serviced, then the related
mortgage loan will become a specially serviced mortgage loan.
THE SERVICER
As of October 31, 2000, GMAC Commercial Mortgage Corporation had a total
commercial and multifamily mortgage loan servicing portfolio of approximately
$81 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" and to the section captioned
"The Pooling and Servicing Agreement" in this prospectus supplement, 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 and companion loans. The servicer, either directly or
through sub-servicers, will be required to service and administer the mortgage
loans and the companion 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 or
companion loans in accordance with the related intercreditor agreement,
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 or companion 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 or companion
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 or loan group, 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;
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o for the circumstances described in clauses (3), (5), (6) and (7) of
the preceding paragraph, the circumstances cease to exist in the good
faith and reasonable judgment of the servicer;
o for the circumstances described in clause (4) of the preceding
paragraph, the default is cured; and
o for the circumstances described in clause (8) of the preceding
paragraph, the proceedings are terminated.
The servicer will be required to service and administer the respective
groups of related cross-collateralized mortgage loans as a single mortgage loan
as it deems necessary and appropriate, consistent with the servicing standard.
If any cross-collateralized mortgage loan, including any loan group, 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 (other than the Class S 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 P certificates. It is anticipated that the servicer or an affiliate will
acquire some subordinate certificates, including the Class P 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
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o an opinion of counsel to the effect that the designation of the
replacement to serve as replacement special servicer is in compliance
with the pooling and servicing agreement, that the designated
replacement will be bound by the terms of the pooling and servicing
agreement and that the pooling and servicing agreement will be
enforceable against the designated replacement in accordance with its
terms, except as enforcement may be limited by bankruptcy, insolvency,
reorganization, receivership, moratorium or other laws relating to or
affecting the rights of creditors generally and by general principles
of equity in a proceeding in equity or at law.
The servicer will resign from its duties in respect of specially serviced
mortgage loans and REO properties simultaneously with the designated
replacement's becoming the replacement special servicer under the pooling and
servicing agreement. Any replacement special servicer may be similarly replaced
by the holder or holders of certificates entitled to more than 50% of the
voting rights allocated to the controlling class.
A replacement special servicer will possess rights and obligations
comparable to those of a master servicer described in the prospectus under "The
Pooling and Servicing Agreements--Sub-Servicers," "--Evidence as to Compliance"
and "--Matters Regarding the Master Servicer and the Depositor." A replacement
special servicer will also be 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 may act solely in the interests of the certificateholders
of the controlling class, as the case may be, 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.
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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 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 to
this prospectus supplement. A portion of the servicing fee received by the
servicer is to be paid to the trustee in respect of its trustee activities and
to the special servicer as a special servicing standby fee. A portion of the
servicing fee on the mortgage loans identified on Annex A as loan numbers
09-0001370, 09-0001375, 09-0001376, 09-0001380, 09-0001381, 09-0001391 and
09-0001407 is to be paid to the related sub-servicer of these mortgage loans
and may be retained by Archon Financial, L.P. if that sub-servicer is
terminated. The servicing fee will be computed on the same basis and the same
principal amount as any related interest payment due or deemed due on the
related mortgage loan is computed.
Special Servicing Fees
The special servicing fee will accrue solely for each specially serviced
mortgage loan and each mortgage loan for which the related mortgaged property
has become an REO property. The special servicing fee will accrue at a rate
equal to 0.25% per annum, on the same basis and the same principal amount as
any related interest payment due or deemed due on the mortgage loan is
computed, and will be payable monthly from general collections on the mortgage
loans then on deposit in the collection 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, which includes any condemnation 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
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special servicer or any holder of certificates evidencing a majority interest
in the controlling class, 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 or the repurchase of the mortgage loan by a seller as a result of a
material breach of a representation or warranty that occurs within 180 days of
notice of such breach to the applicable seller. 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.
Loan Groups
In the case of the loan groups, the special servicing fee, the liquidation
fee and the workout fee will be calculated based upon principal and interest in
respect of the loan group and will be payable on each distribution date, first,
from amounts paid on the related loan group and allocated to the related
companion loan and second, from general collections on the mortgage loans then
on deposit in the mortgage loan subaccount.
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 cover, out of its own funds, any balloon payment
interest shortfalls and prepayment interest shortfalls incurred on the mortgage
loans, but not on any companion loan 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
collection 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 other fees payable to
the special servicer and, except as otherwise described above, workout fees
otherwise payable to the servicer for performing those duties. A replacement
special servicer will also be entitled to any default interest actually
collected on the mortgage loans that is allocable to the period that the
mortgage loan constituted a specially serviced mortgage loan and that is not
allocable to cover interest on any advances made on the mortgage loan.
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The servicer and any replacement special servicer will be required to pay
their respective overhead and general and administrative expenses incurred as a
result of servicing activities under the pooling and servicing agreement,
including the fees of any sub-servicers retained by it. The servicer and any
replacement special servicer will not be entitled to reimbursement for these
expenses unless expressly provided in the pooling and servicing agreement.
Servicing advances will be reimbursable from future payments and other
collections, including in the form of related proceeds consisting of
liquidation proceeds, insurance proceeds and condemnation proceeds, in any
event on or in respect of the related mortgage loan or REO property. Servicing
advances generally include customary, reasonable and necessary out-of-pocket
costs and expenses incurred by the servicer or a replacement special servicer
as a result of the servicing of a mortgage loan after a default, delinquency or
other unanticipated event or a mortgage loan on which a default is imminent, or
in connection with the administration of any REO property. Servicing advances
and P&I advances are referred to as advances.
The servicer and any replacement special servicer will each be permitted
to pay, or to direct the payment of, some servicing expenses directly out of
the collection 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
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substitution of collateral securing, and permit the release of the borrower on
or any guarantor of any mortgage loan or any companion 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 or loan group that
would affect the amount or timing of any related payment of principal,
interest or other amount payable thereunder or affect the obligation
of the related borrower to pay a prepayment premium or permit a
principal prepayment during the applicable lockout period or, in the
servicer's good faith and reasonable judgment, would materially impair
the security for the mortgage loan or loan group or reduce the
likelihood of timely payment of amounts due thereon, unless, in the
servicer's judgment, a material default on the mortgage loan or loan
group has occurred or a default in respect of payment on the mortgage
loan or loan group 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 September,
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 or companion 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 or companion 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 or companion
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 or loan group, 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
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(5) with limited exceptions, the servicer may not release any collateral
securing an outstanding mortgage loan or loan group;
provided that:
o the limitations, conditions and restrictions in clauses (1)
through (4) above will not apply to any modification of any term
of any mortgage loan or loan group that is required under the
terms of the mortgage loan or loan group in effect on the
delivery date or that is solely within the control of the related
borrower, and
o the servicer will not be required to oppose the confirmation of a
plan in any bankruptcy or similar proceeding involving a
borrower, if in its reasonable and good faith judgment,
opposition would not ultimately prevent the confirmation of the
plan or a plan that is substantially similar.
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 and, in the case of a
loan group, certain of the related Class S certificateholders a right to
purchase from the trust a defaulted mortgage loan or loan group that is subject
to foreclosure proceedings. If the servicer has determined, in its good faith
and reasonable judgment, that any defaulted mortgage loan or loan group 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 and, if applicable,
the applicable Class S certificateholder, of its right to purchase such
mortgage loan or loan group. The right of the holders of the controlling class
to purchase any defaulted loan group will, for a limited period of time, be
subject to the prior right of the applicable Class S certificateholders. Any
holder or holders of certificates evidencing a majority interest in the
controlling class or, in the case of a loan group, the applicable Class S
certificateholders, may purchase that defaulted mortgage loan or loan group
from the trust for a price equal to the purchase price. If those
certificateholders have not purchased the defaulted mortgage loan or loan group
within 15 days after they received notice, either the servicer or any
replacement special servicer may purchase that defaulted mortgage loan or loan
group 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 or loan group, the servicer may offer to sell the defaulted mortgage loan
or loan group 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
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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 or loan group for less
than the purchase price unless it is the highest bid received and at least two
other offers are received from independent third parties. See also "The Pooling
and Servicing Agreements--Realization Upon Defaulted Mortgage Loans" in the
prospectus.
REO PROPERTIES
The servicer will be obligated to or may contract with a third party to
operate and manage any mortgaged property acquired as REO property in a manner
that would, in its good faith and reasonable judgment and to the extent
commercially feasible, maximize the trust's net after-tax proceeds from the REO
property. After the servicer reviews the operation of the REO property and
consults with the trustee to determine the trust's federal income tax reporting
position for income it is anticipated that the trust would derive from the
property, the servicer could determine that it would not be commercially
feasible to manage and operate the property in a manner that would avoid the
imposition of a tax on "net income from foreclosure property" within the
meaning 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
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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 collection account. The servicer and the replacement
special servicer, however, may retain permitted reserves in the REO account.
INSPECTIONS; COLLECTION OF OPERATING INFORMATION
The servicer is required to or may contract with a third party to perform
physical inspections of each mortgaged property at least once every two years
or, if the related mortgage loan has a then-current balance greater than
$2,000,000, at least once every year. In addition, the servicer, subject to
statutory limitations or limitations in the related loan documents, is required
to perform a physical inspection of each mortgaged property as soon as
practicable after the mortgage loan becomes a specially serviced mortgage loan.
The servicer will be required to prepare or cause to be prepared a written
report of each inspection performed that describes the condition of the
mortgaged property.
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.
THE INTERCREDITOR AGREEMENTS, COMPANION LOANS
AND LOAN GROUPS
The following summaries describe certain provisions relating to the
intercreditor agreements and the companion loans. The summaries do not purport
to be complete and are subject, and qualified in their entirety by reference,
to the provisions of the intercreditor agreements. When particular provisions
or terms used in the intercreditor agreements are referred to herein, the
actual provisions, including definitions of terms, are deemed to be
incorporated herein by reference.
The relationship between the companion loan and the mortgage loan that
make up a loan group was created pursuant to an intercreditor agreement. The
trust will acquire the mortgage loan and companion loan in each loan group and,
subject to the intercreditor agreement, will be the holder of the companion
loans.
ALLOCATION OF PAYMENTS BETWEEN MORTGAGE LOANS AND COMPANION LOANS
Pursuant to each intercreditor agreement, to the extent described below,
the right of each companion loan or companion loans to receive payments with
respect to the related loan group is subordinated to the payment rights of the
holder of the mortgage loan in such loan group. Prior to the occurrence of a
monetary event of default or special servicing event with respect to a loan
group, after payment of certain additional
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servicing compensation to the servicer and the reimbursement of expenses of
enforcement or expenses incurred in connection with the enforcement of any
repurchase obligation against the applicable mortgage loan seller together with
interest thereon at the reimbursement rate to the extent included in the
purchase price paid for such mortgage loan, which are referred to as shared
costs, amounts received on the loan group will be paid:
o first, in respect of interest on the mortgage loan;
o second, in respect of the mortgage loan, scheduled principal payments
on the mortgage loan, if any, due with respect to the mortgage loan;
o third, in respect of interest on each companion loan;
o fourth, in respect of scheduled principal payments on each companion
loan, if any, due with respect to each companion loan;
o fifth, any unscheduled principal payment on the loan group shall be
paid in respect of the mortgage loan and each companion loan on a pro
rata basis in accordance with their respective percentage interests;
o sixth, any prepayment premium, to the extent actually paid, shall be
paid in respect of the mortgage loan and each companion loan in the
same proportion as bear the respective amounts payable to each when
the prepayment premium for the mortgage loan and each companion loan
is separately computed on the prepaid amounts of the stated principal
balance of the mortgage loan and the stated principal balance of each
companion loan and the respective interest rates; and
o seventh, if any excess amount is paid by the mortgagor, and not
otherwise applied in accordance with the above clauses, such amount
shall be paid in respect of the mortgage loan and each companion loan:
first, in respect of the mortgage loan up to the amount of any
unreimbursed costs and expenses paid by the trust with respect to
the loan group pursuant to the pooling and servicing agreement or
the related intercreditor agreement, and second, in respect of
the companion loan up to the amount of any unreimbursed costs and
expenses borne by the related Class S certificateholders with
respect to the loan group pursuant to the pooling and servicing
agreement or the related intercreditor agreement, and any
remaining in respect of the mortgage loan and the companion loan
in accordance with their respective percentage interests.
Following the occurrence and continuance of a mortgage event of default
with respect to the related loan group, after payment of shared costs, all
payments, of whatever nature, on the companion loan or companion loans will be
subordinated to all payments due on the mortgage loan, other than default
charges. Amounts received with respect to such loan group will be paid:
o first, in respect of the mortgage loan, interest on the mortgage loan;
o second, in respect of the mortgage loan, in an amount equal to the
principal balance of the mortgage loan, until such amount has been
paid in full;
o third, in respect of each companion loan in an amount equal to the
interest on the principal balance of each companion loan;
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o fourth, in respect of the companion loan in an amount equal to the
principal balance of each companion loan, until such principal amount
has been paid in full;
o fifth, in respect of the mortgage loan, any prepayment premium
attributable to the mortgage loan, to the extent actually paid,
computed on the prepaid amounts of the principal balance of the
mortgage loan and the mortgage loan's interest rate;
o sixth, in respect of each companion loan, any prepayment premium
attributable to each companion loan, to the extent actually paid,
computed on the prepaid amounts of the principal balance of the
companion loan and each companion loan's interest rate;
o seventh, any default interest in excess of the interest paid in
accordance with clauses first and fourth above on (x) first, in
respect of the mortgage loan at the applicable default rate and (y)
then in respect of each companion loan at the applicable default rate;
and
o eighth, if any excess amount is paid by the mortgagor, and not
otherwise applied in accordance with the above clauses, such amount
shall be paid in respect of the holder of the mortgage loan and each
companion loan:
first, in respect of the mortgage loan up to the amount of any
unreimbursed costs and expenses paid by the trust with respect to
the loan group pursuant to the pooling and servicing agreement or
the related intercreditor agreement, and second, in respect of
the companion loan up to the amount of any unreimbursed costs and
expenses borne by the related Class S certificateholders with
respect to the loan group pursuant to the pooling and servicing
agreement or the related intercreditor agreement, and any
remaining in respect of the mortgage loan and the companion loan
in accordance with their respective percentage interests.
DIRECTIONS TO SERVICERS
The holders of any companion loan will not be entitled, in such capacity,
to participate directly in decisions regarding the administration of the
related loan group such as granting waivers, consents, and amendments to the
mortgagor, sending default and acceleration notices, initiating enforcement
actions or foreclosure proceedings or negotiating the terms of any workout.
ASSIGNMENT OF COMPANION HOLDER RIGHTS
The initial holder of each companion loan agreed in the related
intercreditor agreement on behalf of itself and its successors and assigns that
the holder of the related mortgage loan may exercise any rights under the
pooling and servicing agreement in a manner that may be adverse to the
interests of such companion holder. Generally, the holder of the mortgage loan
in a loan group has the exclusive authority with respect to the administration
of, and exercise of rights and remedies with respect to, the loan group,
including the sole authority,
o with respect to the voting of all claims regarding the loan group in
any bankruptcy or insolvency proceedings,
o to call or waive any mortgage events of default, accelerate the loan
group or institute any foreclosure action, and
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o except as set forth in the pooling and servicing agreement, the holder
of any companion loan has no voting, consent or other rights
whatsoever with respect to the mortgage loan holder's administration
of, or exercise of its rights and remedies with respect to, the loan
group.
The initial holder of any companion loan on behalf of itself and its
successors and assigns, assigns and conveys in its related intercreditor
agreement to the holder of the related mortgage loan any rights it has to,
o call or cause the holder of the mortgage loan to call a mortgage event
of default under the loan group,
o exercise any remedies with respect to the loan group or the mortgagor,
including, filing or causing the holder of the mortgage loan to file
any bankruptcy petition against the mortgagor, or
o vote any claims with respect to the loan group in any bankruptcy,
insolvency or similar type of proceeding of the mortgagor.
The initial holder of any companion loan has also assigned to the holder
of the mortgage loan the right to vote all its claims, including the right to
approve or reject any plan of reorganization, in any bankruptcy, insolvency or
other similar proceedings, whether voluntary or involuntary, with respect to
the mortgagor on such loan group. As provided in the pooling and servicing
agreement, the trustee, at the direction of the special servicer (such
direction and approval to be given in accordance with the servicing standard
and giving effect and due consideration to the senior nature of the mortgage
loan and the subordinated nature of any companion loans, and rights of the
holders thereof and the obligation of the servicer to give due consideration to
the maximization of the proceeds from the enforcement of remedies in respect of
the mortgaged properties), will represent the rights of both the holder of the
mortgage loan and the holder of the related companion loan in any such
proceedings. The servicer will be entitled to retain counsel in connection with
the giving of such directions and approvals. The fees and disbursements of any
such counsel will constitute a servicing advance.
PURCHASE OF LOAN GROUP BY THE CLASS S CERTIFICATEHOLDERS
Pursuant to the pooling and servicing agreement, if a loan group becomes a
defaulted loan group, certain holders of the Class S certificateholders may
purchase the loan group from the trust at a price equal to the sum of (A) the
applicable stated principal balance of the related mortgage loan (without
reduction for any unreimbursed P&I advances) plus the unpaid principal balance
of the companion loan, (B) accrued and unpaid interest thereon at the mortgage
rate or rates applicable to such loan group up to, but excluding, the due date
in the collection period including the date of purchase (without reduction for
any unreimbursed P&I advances), (C) any unreimbursed servicing advances and
advances under the related intercreditor agreement allocable to the related
loan group, and (D) any related accrued and unpaid advance interest, plus any
related expenses. The Class S certificateholder will be entitled to receive a
distribution in respect of the portion of such purchase price attributable to
the related companion loan.
DEPOSITS INTO COLLECTION ACCOUNT AND SUBACCOUNTS
After satisfaction of all shared costs in respect of each loan group,
amounts received with respect to such loan group and on deposit in the
collection account with respect to
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such loan group will be allocated between the mortgage loan subaccount and the
companion subaccount in accordance with the respective entitlements in respect
of the mortgage loan and the companion loan pursuant to the intercreditor
provisions described above.
COLLECTION ACCOUNT
References in this prospectus supplement and the prospectus to the
Certificate Account should be read as references to the collection account as
used in this prospectus supplement. The servicer will establish and maintain or
cause to be established and maintained the collection account as an eligible
account on behalf of the certificateholders, and the funds held therein may be
invested pending each succeeding distribution date. Collection proceeds
received in respect of mortgage loans other than those included in loan groups
will be deposited into the mortgage loan subaccount. The collection account
will further consist of subaccounts
o relating to any companion loan, a companion subaccount, which
subaccount will be held on behalf of the Class S certificates, and
o relating to the mortgage loans, the mortgage loan subaccount.
Any interest or other income earned on funds in a collection account will
be paid to the servicer or the trustee as additional compensation.
THE POOLING AND SERVICING AGREEMENT
The certificates will be issued under the pooling and servicing agreement.
The parties to the pooling and servicing agreement are the depositor, the
servicer, the trustee, and the fiscal agent. Under the pooling and servicing
agreement, there will be established a collection account, which will have a
mortgage loan subaccount and companion loan subaccounts. On each master
servicer remittance date, prior to making the allocations between the mortgage
loan subaccount and related companion subaccount in the case of any loan group,
the master servicer will withdraw shared costs from the collection account as
described in "The Intercreditor Agreements, Companion Loans and Loan
Groups--Allocation of Payments Between Mortgage Loans and Companion Loans"
above. After any such withdrawal and allocation to the mortgage loan
subaccount, the servicer or the trustee may make withdrawals from the mortgage
loan subaccount for any of the following purposes:
(i) to make deposits in the certificate distribution account for
distributions to the certificateholders (other than the Class S
certificateholders) on each distribution date;
(ii) to pay the servicer (x) any servicing fees allocable to the trust
not previously retained thereby and, if applicable, any servicing
fees payable in respect of any related companion loan, to the
extent unpaid after application of amounts allocated to any related
companion subaccount, such payments to be made out of payments and
other collections of interest on the particular related mortgage
loans as to which such fees were earned and (y) any default charges
not applied to pay advance interest under clause (iv) below;
(iii) to reimburse the servicer, the trustee or the fiscal agent for
unreimbursed advances made by it with respect to mortgage loans and
properties acquired in respect thereof, such reimbursement to be
made out of amounts that
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represent late payments collected on the particular mortgage loans,
liquidation proceeds, condemnation proceeds and insurance proceeds
collected on the particular mortgage loans and properties, and net
income collected on the particular properties, with respect to
which such advances were made in each case, if applicable, to the
extent not reimbursed by application of amounts deposited in any
related companion subaccount, or if in the judgment of the servicer
or such other person, as applicable, such advances will not be
recoverable from such amounts, such reimbursement to be made from
amounts collected on other mortgage loans;
(iv) to pay the servicer, the trustee or the fiscal agent interest
accrued on the advances described in clause (iii) above incurred by
it while such remain outstanding and unreimbursed to the extent
unpaid by application of amounts deposited in any related companion
subaccount, first, by application of any default charges received
on the mortgage loan as to which the advance was made, and then, at
or following the time the servicer, trustee or fiscal agent is
reimbursed for such advance, by application of collections on any
of the mortgage loans and related properties;
(v) to pay for costs and expenses incurred for environmental site
assessments performed with respect to mortgaged properties that
constitute security for defaulted mortgage loans, and for any
containment, clean-up or remediation of hazardous wastes and
materials present on such mortgaged properties, as described under
"--Realization Upon Defaulted Mortgage Loans" to the extent that
such amounts are unpaid by application of amounts on deposit in the
related companion subaccount in the case of any loan group;
(vi) to reimburse the servicer, the depositor, the trustee, the fiscal
agent or any of their respective directors, officers, employees and
agents, as the case may be, for certain expenses, costs and
liabilities incurred thereby, as and to the extent described in
this prospectus supplement under "--Certain Matters Regarding the
Servicer and the Depositor" and in the prospectus under "--Certain
Matters Regarding the Trustee" to the extent that such amounts are
unpaid by application of amounts on deposit in the related
companion subaccount in the case of any loan group;
(vii) to pay the portion of the fees of the trustee attributable to the
mortgage loan;
(viii) to pay the servicer, interest and investment income earned in
respect of amounts held in the mortgage loan subaccount as
additional compensation;
(ix) to pay any servicing expenses not otherwise required to be advanced
by the servicer to the extent that such amounts are unpaid by
application of amounts on deposit in the related companion
subaccount in the case of any loan group;
(x) to pay any federal, state or local taxes imposed on the trust or
its assets or transactions, as and to the extent described under
"Federal Income Tax Consequences--REMICs--Taxation of Owners of
REMIC Residual Certificates--Prohibited Transactions Tax and Other
Taxes" in the prospectus to the extent that such amounts are unpaid
by application of amounts on deposit in the related companion
subaccount in the case of any loan group;
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(xi) to pay for the cost of various opinions of counsel obtained
pursuant to the pooling and servicing agreement for the benefit of
certificateholders to the extent that such amounts are unpaid by
application of amounts on deposit in the related companion
subaccount in the case of any loan group;
(xii) to make any other withdrawals permitted by the pooling and
servicing agreement; and
(xiii) to clear and terminate the mortgage loan subaccount upon the
termination of the trust.
On each master servicer remittance date, prior to making the allocations
between the mortgage loan subaccount and related companion subaccount in the
case of any loan group, the master servicer will withdraw shared costs from the
collection account as described in "The Intercreditor Agreements, Companion
Loans and Loan Groups--Allocation of Payments Between Mortgage Loans and
Companion Loans" above. After any such withdrawal and the allocation of amounts
to the related companion loan subaccount, with respect to each loan group, the
servicer may make withdrawals from the related companion subaccount for any of
the following purposes:
(i) to make deposits in the applicable companion distribution accounts
for distributions to the related Class S certificateholder on each
Distribution Date;
(ii) to pay the servicer any servicing fees allocable to the related
companion loan not previously retained thereby and any fees payable
to the trustee with respect to the related companion loan;
(iii) to reimburse the servicer, the trustee or the fiscal agent for the
related companion loan's ratable share of any unreimbursed
servicing advances out of amounts that represent liquidation
proceeds, condemnation proceeds and insurance proceeds collected on
the particular loan group and net income collected on the
particular related properties, and if in the judgment of the
servicer or such other person, as applicable, any servicing
advances or any P&I advances made with respect to such loan group
will not be recoverable from such amounts, to reimburse the
servicer, the trustee or the fiscal agent for the entire amount of
any such servicing advances or P&I advances from any amounts
collected in respect of such loan group or the related properties;
(iv) to pay the servicer, the trustee or the fiscal agent interest
accrued on the advances described in clause (iii) above incurred by
it while such remain outstanding and unreimbursed, first, by
application of any default charges received on the companion loan
as to which the advance was made, and then, at or following the
time the servicer, trustee or fiscal agent is reimbursed for such
advance, by application of collections on such loan group and
related properties;
(v) to pay for costs and expenses incurred for environmental site
assessments performed with respect to the mortgaged properties that
constitute security for such defaulted loan group, and for any
containment, clean-up or remediation of hazardous wastes and
materials present on the related properties, as described under
"--Realization Upon Defaulted Mortgage Loans";
(vi) to reimburse the servicer, the depositor, the trustee, the fiscal
agent or any of their respective directors, officers, employees and
agents, as the case may be,
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for certain expenses, costs and liabilities incurred thereby, as
and to the extent described in this prospectus supplement under
"--Certain Matters Regarding the Servicer and the Depositor" and in
the prospectus under "--Certain Matters Regarding the Trustee," any
such reimbursement that does not relate to a specific companion
loan being payable pro rata, on the basis of the amounts otherwise
payable in respect of each companion loan, by application of
amounts due in respect of the related companion loan and any such
reimbursement that relates to a specific companion loan being
payable solely from the related companion subaccount;
(vii) to pay the servicer, interest and investment income earned in
respect of amounts with respect to the related companion loan held
in the companion subaccount as additional compensation;
(viii) to pay any servicing expenses not otherwise required to be advanced
by the servicer with respect to the related loan group;
(ix) to pay for the related companion loan's ratable portion of the cost
of various opinions of counsel obtained pursuant to the pooling and
servicing agreement in respect of the companion loans;
(x) to pay any federal, state or local taxes imposed on the trust or
its assets or transactions, as and to the extent described under
"Federal Income Tax Consequences--REMICs--Taxation of Owners of
REMIC Residual Certificates--Prohibited Transactions Tax and Other
Taxes" in the prospectus to the extent that such amounts are unpaid
by application of amounts on deposit in the related companion
subaccount in the case of any loan group to the extent allocable to
such loan group;
(xi) to make any other withdrawals permitted by the pooling and
servicing agreement; and
(xii) to clear and terminate the related companion subaccount upon the
termination of the trust.
REALIZATION UPON DEFAULTED MORTGAGE LOANS
If a default on a mortgage loan has occurred or, in the servicer's
judgment, a payment default is imminent, the servicer, on behalf of the trust,
may at any time institute foreclosure proceedings, exercise any power of sale
contained in the related mortgage, obtain a deed in lieu of foreclosure, or
otherwise acquire title to the related mortgaged property, by operation of law
or otherwise. The servicer may not, however, acquire title to any mortgaged
property, have a receiver of rents appointed with respect to any mortgaged
property or take any other action with respect to any mortgaged property that
would cause the trustee, for the benefit of the certificateholders, or any
other specified person to be considered to hold title to, to be a
"mortgagee-in-possession" of, or to be an "owner" or an "operator" of such
mortgaged property within the meaning of certain federal environmental laws,
unless the servicer has previously received a report prepared by a person who
regularly conducts environmental audits, which report will be an expense of the
trust, and either:
(i) such report indicates that (a) the mortgaged property is in
compliance with applicable environmental laws and regulations and
(b) there are no circumstances or conditions present at the
mortgaged property that have resulted in
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any contamination for which investigation, testing, monitoring,
containment, clean-up or remediation could be required under any
applicable environmental laws and regulations; or
(ii) the servicer, based solely, as to environmental matters and related
costs, on the information set forth in such report, determines that
taking such actions as are necessary to bring the mortgaged
property into compliance with applicable environmental laws and
regulations and/or taking the actions contemplated by clause (i)(b)
above, is reasonably likely to produce a greater recovery, taking
into account the time value of money, rather than not taking such
actions. See "Legal Aspects of Mortgage Loans--Environmental
Considerations" in the prospectus.
If the environmental testing contemplated above establishes that either of
the conditions set forth in clauses (i) and (ii) above has not been satisfied
with respect to any mortgaged property securing a defaulted mortgage loan, then
the special servicer will take such action as it deems to be in the best
economic interest of the trust and the related companion holder, other than
proceeding to acquire title to the mortgaged property. Upon notice to the
servicer of the necessity to take such actions, any expenditure associated with
such actions taken will be paid as a servicing advance unless such expenditure
would constitute a nonrecoverable advance. The servicer will not be obligated
to take such action or not take such action unless such person agrees to
indemnify the servicer with respect to such action or inaction, and neither the
trustee nor the servicer will be obligated to take such action or not take such
action at the direction of the certificateholders unless the certificateholders
agree to indemnify the trustee or the servicer, as the case may be, with
respect to such action or inaction. The servicer will not take any action or
refrain from taking any action at the direction of any person if to do so would
not be in accordance with the servicing standard.
If title to any mortgaged property is acquired by the trust, the servicer,
on behalf of the trust, will be required to sell the mortgaged property within
three full years after the taxable year of acquisition, unless (i) the IRS
grants an extension of time to sell such property or (ii) the trustee receives
an opinion of independent counsel to the effect that the holding of an interest
in the property by the trust, for longer than such period will not result in
the imposition of a tax on the trust or cause the trust to fail to qualify as a
REMIC under the Code at any time that any certificate is outstanding. Subject
to the foregoing and any other tax-related limitations, the servicer will
generally be required to attempt to sell any mortgaged property so acquired on
the same terms and conditions it would if it were the owner. The servicer will
also be required to ensure that the mortgaged property is administered so that
it constitutes "foreclosure property" within the meaning of Code Section
860G(a)(8) at all times, that the sale of such property does not result in the
receipt by the trust 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), with
respect to such property. If the trust acquires title to any mortgaged
property, the servicer, on behalf of the trust, may retain an independent
contractor to manage and operate such property. The retention of an independent
contractor, however, will not relieve the servicer of its obligation to manage
such mortgaged property as required under the pooling and servicing agreement.
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If liquidation proceeds collected with respect to a defaulted mortgage
loan are less than the outstanding principal balance of the defaulted mortgage
loan or loan group plus interest accrued thereon plus the aggregate amount of
reimbursable expenses incurred by the servicer in connection with such mortgage
loan or loan group, then the trust will realize a loss in the amount of such
shortfall which will first be borne by the trust. See "Description of the
Certificates--Subordination; Allocation of Losses and Expenses." The servicer
will be entitled to reimbursement out of the liquidation proceeds recovered on
any defaulted mortgage loan or loan group, prior to the distribution of such
liquidation proceeds to certificateholders and, of amounts that represent
unpaid servicing compensation in respect of the mortgage loan, unreimbursed
servicing expenses incurred with respect to the mortgage loan or loan group and
any unreimbursed advances of delinquent payments made with respect to the
mortgage loan or loan group. In addition, amounts otherwise distributable on
the certificates and the related companion loan may be further reduced by
interest payable to the servicer on such servicing expenses and advances.
If any mortgaged property suffers damage such that the proceeds, if any,
of the related hazard insurance policy are insufficient to restore fully the
damaged property, the servicer will not be required to expend its own funds to
effect such restoration unless it determines (i) that such restoration will
increase the proceeds to certificateholders on liquidation of the mortgage loan
after reimbursement of the servicer for its expenses and (ii) that such
expenses will be recoverable by it from related insurance proceeds,
condemnation proceeds and liquidation proceeds.
DUE-ON-SALE AND DUE-ON-ENCUMBRANCE PROVISIONS
All of the mortgage loans contain due-on-sale and due on encumbrance
clauses that, with limited exceptions, entitle the lender to accelerate payment
of the mortgage loan upon any sale or other transfer or encumbrance of the
related mortgaged property made without the lender's consent, other than as
permitted under the mortgage loan documents. The servicer will determine
whether to exercise any right the trust, if any, may have under any such
provision in a manner consistent with the servicer's normal servicing
procedures. The 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" in the prospectus and "Description of the Mortgage
Pool--Due-on-Sale and Due-on-Encumbrance Provisions" in this prospectus
supplement.
CERTAIN MATTERS REGARDING THE SERVICER AND THE DEPOSITOR
The servicer is an affiliate of the depositor and has other normal
business relationships with the depositor or the depositor's affiliates. The
pooling and servicing agreement provides that the servicer may not resign from
its obligations and duties thereunder except upon a determination that
performance of such duties is no longer permissible under applicable law or
except in connection with a permitted transfer of servicing. No such
resignation will become effective until the trustee or a successor servicer has
assumed the servicer's obligations and duties under the pooling and servicing
agreement. The pooling and servicing agreement will also provide that, except
as set forth below, neither the servicer nor the depositor, nor any director,
officer, employee or agent of the servicer or the depositor will be under any
liability to the trust, or the certificateholders for any action taken or for
refraining from the taking of any action in good faith pursuant to the pooling
and servicing agreement, or for errors in
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judgment; provided, however, that neither the servicer, the depositor, nor any
such person will be protected against any liability which would otherwise be
imposed by reason of willful misfeasance, bad faith or negligence in the
performance of duties or by reason of reckless disregard of obligations and
duties thereunder. The pooling and servicing agreement further provides that
the servicer, the depositor, and any director, officer, employee or agent of
the servicer or the depositor is entitled to indemnification from certain
losses, liability and expenses from amounts otherwise distributable in respect
of the mortgage loans, except that, in the case of claims or legal, equitable
or administrative actions relating to a loan group or related mortgaged
property, such indemnification will be made first from amounts otherwise
distributable to the related Class S certificateholders, other than any loss,
liability or expense incurred by reason of willful misfeasance, bad faith or
negligence in the performance of their respective duties thereunder or by
reckless disregard of obligations and duties thereunder.
Such indemnification will survive any termination, resignation or removal
of the servicer as master servicer or special servicer, as the case may be,
under or any termination of the pooling and servicing agreement. In addition,
the pooling and servicing agreement provides that neither the servicer nor the
depositor will be under any obligation to appear in, prosecute or defend any
legal or administrative action that is not incidental to its respective duties
under the pooling and servicing agreement and which in its opinion may involve
it in any expense or liability. The servicer or the depositor may, however, in
its discretion undertake any such action which it may deem necessary or
desirable with respect to the pooling and servicing agreement and the rights
and duties of the parties thereto and the interests of the certificateholders
thereunder. In such event, the legal expenses and costs of such action and any
liability resulting therefrom will be expenses, costs and liabilities payable
from the trust, to the servicer or the depositor, as the case may be.
Any person into which the servicer may be merged or consolidated, any
person resulting from any merger or consolidation to which the servicer is a
party or any person succeeding to the business of the servicer will be the
successor of the servicer under the pooling and servicing agreement, provided
that,
o such person is qualified to service mortgage loans on behalf of FNMA
or FHLMC, and
o such merger, consolidation or succession does not adversely affect the
then-current ratings of the classes of certificates that have been
rated.
In addition, notwithstanding the prohibition on its resignation, the
servicer may assign its rights under the pooling and servicing agreement to any
person to whom the servicer is transferring a substantial portion of its
mortgage servicing portfolio, provided the two bullet points above are
satisfied. In the case of any such assignment, the servicer will be released
from its obligations under the pooling and servicing agreement, other than
liabilities and obligations incurred by it prior to the time of such
assignment.
INTERCREDITOR MATTERS CONCERNING LOAN GROUPS
As described under "The Intercreditor Agreements, Companion Loans and Loan
Groups--Assignment of Companion Holder Rights," each initial companion holder,
on behalf of itself and its successors and assigns, has assigned to the holder
of the mortgage loan any voting rights such companion holder may have in
connection with the bankruptcy of a mortgagor. The trustee, at the direction of
the special servicer, such
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direction and approval to be given in accordance with the servicing standard
and giving effect and due consideration to the senior nature of the mortgage
loans and the subordinated nature of the companion loans, and rights of the
holders thereof and the obligation of the servicer to give due consideration to
the maximization of the proceeds from the enforcement of remedies in respect of
the mortgaged properties, will represent the rights of both the trust and such
companion holder in any such proceedings. The servicer will be entitled to
retain counsel in connection with the giving of such directions and approvals.
The fees and disbursements of any such counsel will constitute a servicing
advance.
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DESCRIPTION OF THE CERTIFICATES
References to certificates, classes of certificates and certificateholders
in this prospectus supplement include the Class S certificates and
certificateholders unless otherwise noted. The certificates and the Class S
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 the companion 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 distribution
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 the companion 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 and the companion loans.
DENOMINATIONS
The trust will offer the offered certificates in minimum denominations of
$25,000 and multiples of $1 in excess thereof.
Each class of offered certificates will initially be represented by one or
more global certificates registered in the name of the nominee of DTC. The
depositor has been informed by DTC that DTC's nominee initially will be Cede &
Co. No certificate owner will be entitled to receive a definitive certificate
representing its interest in a class of offered certificates, except as
described below under "--Book-Entry Registration of the Offered
Certificates--Definitive Certificates."
Unless and until definitive certificates are issued in respect of any
class of offered certificates, all references to actions by holders of the
offered certificates will refer to actions taken by DTC upon instructions
received from the related certificate owners through its participants, and all
references in this prospectus supplement to payments, notices, reports and
statements to holders of the offered certificates will refer to payments,
notices, reports and statements to DTC or Cede & Co., as the registered holder
of the offered certificates, for distribution to the related certificate owners
through its participants under DTC's procedures. Until definitive certificates
are issued for any class of offered certificates, interests in those
certificates will be transferred on the book-entry records of DTC and its
participants. The certificate owners may hold their certificates through DTC,
in the United States, or Clearstream, 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 (other than the Class S certificates). The Class X certificates will
have an initial notional amount of $1,274,707,223 (subject to a variance of
plus or minus 5%) and will consist of 16 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 and Class A-2
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 B, Class C and Class D
certificates for any distribution date will be equal to the lesser of the
specified fixed rate described in footnote 9 on page S-5 and the Weighted
Average Net Mortgage Rate for that distribution date.
The pass-through rates applicable to the Class E, Class F and Class G
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 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 (other than the Class S 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 H, Class J, Class K, Class L, Class
M, Class N, Class O and Class P 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.
The pass-through rate applicable to the Class S-AM, S-MAC-1 and S-MAC-2
certificates for any distribution date will be fixed.
No class of REMIC residual certificates will have a specified pass-through
rate.
If any mortgage loan or companion 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
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accrues in respect of the REMIC regular certificates, then, for purposes of
calculating pass-through rates, the net mortgage rate of that mortgage loan or
companion loan for any one-month period before a related due date will be equal
to:
o the annualized rate at which interest would have to accrue on the
mortgage loan or companion 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 or companion loan during that
one-month period at the related mortgage rate minus the related
servicing fee rate for that mortgage loan or companion 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 or companion 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 or companion 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
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certificateholder that surrendered the certificate at the address last shown on
the books of the trustee. All distributions made on a class of certificates
will be allocated pro rata among those certificates based on their respective
percentage interests in that class.
The Available Certificate Distribution Amount
References in this prospectus supplement and the prospectus to the
Available Distribution Amount should be read as references to the Available
Certificate Distribution Amount as used in this prospectus supplement. The
amount of funds that will be available for distribution to certificateholders
(other than the Class S certificateholders) on each distribution date is the
Available Certificate Distribution Amount for that distribution date. See "The
Pooling and Servicing Agreements--Certificate Account" in the prospectus.
Application of the Available Certificate Distribution Amount
On each distribution date, the trustee will apply the Available
Certificate 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 Certificate 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 Certificate 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
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o the remaining portion, if any, of the Principal Distribution
Amount for that distribution date, or, on the final
distribution date resulting from the termination of the
trust, up to an amount equal to the then-outstanding
certificate balance of that class of certificates; and
o third, to distributions for purposes of reimbursement, up to an
amount equal to all realized losses and additional trust
expenses, if any, previously allocated to that class of
certificates and for which no reimbursement has previously been
paid; and
(5) the remaining portion, if any, of the Available Certificate
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 and Prepayment Interest Shortfalls incurred on the mortgage loans
and companion loans during the related collection period. However, for mortgage
loans and companion 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 attributable to the
mortgage loans, if any, for each distribution date will be allocated on that
distribution date among each class of REMIC regular certificates (other than
the Class S 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;
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o the stated maturity date of any balloon loan that has a due date after
the determination date in any month; or
o any mortgage loan for which the related mortgaged property or
properties have become REO property or properties.
The assumed monthly payment deemed due on any balloon loan on its stated
maturity date and on any successive due date that it remains or is deemed to
remain outstanding will equal the monthly payment that would have been due on
that date if the related balloon payment had not come due, but rather the
mortgage loan had continued to amortize in accordance with the balloon loan's
amortization schedule, if 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. There is no assumed monthly
payment regarding any companion loan.
DISTRIBUTIONS OF PREPAYMENT PREMIUMS
Any prepayment premium actually collected on a mortgage loan (other than a
companion 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, Class F and Class G 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
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H.15(519) for the constant maturity treasury having a maturity coterminous with
the maturity date or anticipated repayment date of that mortgage loan as of the
determination date. If there is no discount rate for instruments having a
maturity coterminous with the remaining term to maturity or anticipated
repayment date, where applicable, of the mortgage loan, then the discount rate
will be equal to the linear interpolation of the yields of the constant
maturity treasuries with maturities next longer and shorter than the remaining
term to maturity or anticipated repayment date. For some of the mortgage loans,
the discount rate is a semiannual rate.
The prepayment premiums, if any, collected on the mortgage loans during
any collection period may not be sufficient to fully compensate
certificateholders of any class for any loss in yield attributable to the
related prepayments of principal.
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 or loan group secured by mortgaged property that is
acquired on behalf 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 REO 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 in accordance
with the pooling and servicing agreement and any intercreditor agreement 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. See "The Intercreditor Agreements, Companion Loans
and Loan Groups."
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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 (other
than Class S certificates which will have a separate interest reserve account).
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 or actual/365 basis, as
applicable, an amount equal to one day's interest at the related mortgage rate,
net of any servicing fee, on the stated principal balance for that mortgage
loan as of the immediately preceding due date, to the extent a monthly payment
or P&I advance is made on that mortgage loan. Amounts so deposited in any
January, if applicable, and February are referred to as 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 collection 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. The rights of the holders of the Class S certificates to receive
distributions of amounts collected in respect of the related companion loan
will be subordinated to the amounts due on the related mortgage loan and to the
extent described in this prospectus supplement, to the rights of the holders of
the senior certificates and the subordinate certificates. 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 Certificate Distribution
Amount on each distribution date in the order of priority described under
"--Distributions--Application of the Available Certificate 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 plus the outstanding principal balance
of any companion loans 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 P, Class O, Class N, Class M, Class L, Class
K, Class J, Class H, Class G, Class F, Class E, Class D, Class C and Class B
certificates will be reduced, sequentially in that order until the deficit or
the related certificate balance
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of that class is reduced to zero, whichever occurs first; provided that the
certificate balances of the applicable Class S certificates will be reduced
before the certificates of any other class to the extent of any realized loss
or unpaid additional trust fund expenses on the related companion loan but only
to the extent any such deficit is attributable to the related mortgage loan. 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 (except
in the case of the Class S certificates) will also have the effect of reducing
the notional amount of the Class X certificates.
Realized losses are losses on the mortgage loans arising from the
inability of the servicer to collect all amounts due and owing under the
mortgage loan, including by reason of the fraud or bankruptcy of a borrower or
a casualty of any nature at a mortgaged property, to the extent not covered by
insurance.
The realized loss on a liquidated mortgage loan or loan group, 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 or loan group
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 or loan group 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. No
liquidation proceeds will be allocable to any Class S certificates until the
trust, as holder of the related mortgage loan, has received all principal and
interest due thereon.
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 indem-
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nities and reimbursements to a replacement special servicer comparable
to those for the servicer as described under "The Pooling and
Servicing Agreements--Matters Regarding the Master Servicer and the
Depositor" in the prospectus and federal, state and local taxes, and
tax-related expenses, payable out of the trust as described under
"Servicing of the Mortgage Loans--REO Properties" in this prospectus
supplement and "Federal Income Tax Consequences--REMICs--Prohibited
Transactions Tax and Other Taxes" in the prospectus,
o any amounts expended on behalf of the trust to remediate an adverse
environmental condition at any mortgaged property securing a defaulted
mortgage loan. See "The Pooling and Servicing Agreements--Realization
Upon Defaulted Mortgage Loans" in the prospectus, and
o any other expense of the trust not specifically included in the
calculation of realized loss for which there is no corresponding
collection from a borrower or reimbursement from amounts distributable
in respect of any companion loan.
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 companion 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 the replacement
thereof as provided in the pooling and servicing agreement, funds held in the
collection account that are not required to be part of the Available
Certificate Distribution Amount for that distribution date. Any funds advanced
from the collection 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 the product of
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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 (x) in the case of any
mortgage loan the appraisal reduction amount, and (y) in the case of a
loan group, any excess of the appraisal reduction amount over the
stated principal balance of the related companion loan, 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 "The Pooling and Servicing Agreement"
above.
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 advance is
determined to be nonrecoverable, together with the reimbursement of that
advance, out of any amounts then on deposit in the collection 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.
None of the servicer, the trustee or the fiscal agent will make a P&I
advance with respect to amounts due with respect to the companion loan, or with
respect to any mortgage loan that is part of a loan group if such mortgage loan
has been acquired by the related Class S certificateholder. The Servicer will
be entitled to be reimbursed from amounts distributable in respect of the
companion loans for any servicing advances made in respect of the related
mortgaged properties. See "The Intercreditor Agreements, Companion Loans and
Loan Groups--Purchase of Loan Group by the Class S Certificateholders."
APPRAISAL REDUCTIONS
A mortgage loan or loan group will become a required appraisal loan upon
the earliest of
o the date on which the mortgage loan or loan group becomes a modified
mortgage loan,
o the 90th day following the occurrence of any uncured delinquency in
monthly payments on the mortgage loan, or the related companion loan,
o the date on which a receiver is appointed and continues in that
capacity for a mortgaged property securing the mortgage loan, and
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o the date on which a mortgaged property securing the mortgage loan
becomes an REO property.
Within 30 days of a mortgage loan becoming a required appraisal loan, or
longer period if the servicer is diligently and in good faith proceeding to
obtain the appraisal, the servicer is required to obtain an appraisal of the
related mortgaged property from an independent MAI-designated appraiser,
provided that if the mortgage loan has a principal balance of less than
$2,000,000 at that time, a desktop estimation of value may be substituted for
the required appraisal. No appraisal will be required if an appraisal was
obtained within the prior twelve months unless the servicer determines that
such appraisal is materially inaccurate. The cost of the appraisal will be
advanced by the servicer and will be reimbursed to the servicer as a servicing
advance.
As a result of this appraisal, the servicer may determine that an
appraisal reduction amount exists on the required appraisal loan. The appraisal
reduction amount for any required appraisal loan will be an amount, calculated
as of the determination date immediately succeeding the date on which the
appraisal is obtained, equal to the excess, if any, of the sum of:
(1) the stated principal balance of the required appraisal loan or loan
group,
(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 or
loan group 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 or loan group 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,
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.
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
or loan group. No update is required for a mortgage loan or loan group that has
become a corrected mortgage loan and has remained current for twelve
consecutive monthly payments, and for which no other
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special servicing event or other event that would cause the mortgage loan or
loan group 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 or loan group 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 or any companion loan, other than, or in
addition to, bringing current monthly payments on that mortgage loan
or companion 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 companion loan or
reduces the likelihood of timely payment of amounts due on that
mortgage loan or companion 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 a 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 and certain information concerning the companion loans. 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 certificateholder, the following
trustee reports, substantially in the forms provided in Annex B to this
prospectus supplement, 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 the caption "Characteristics of the
Mortgage Loans," calculated, where applicable, on the basis of the
most recent relevant information provided by the borrowers to the
servicer and by the servicer to the trustee, and presented in a
loan-by-loan and tabular format substantially similar to the formats
utilized in Annex A to this prospectus supplement.
(2) A delinquent loan status report including those mortgage loans or
companion 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.
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(3) A historical loan modification report including those mortgage loans
or companion 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 or companion loan,
showing its original and the revised terms.
(4) A historical loss estimate report including as of the close of
business on the immediately preceding determination date,
o the aggregate amount of liquidation proceeds and liquidation
expenses, both for the collection period ending on that
determination date and for all prior collection periods, and
o the amount of realized losses occurring both during that
collection period and historically, set forth on a mortgage
loan-by-mortgage loan basis.
(5) An REO status report including for each REO property included in the
trust as of the close of business on the immediately preceding
determination date,
o the acquisition date of that REO property,
o the amount of income collected on that REO property, net of
related expenses, and other amounts, if any, received on that REO
property during the collection period ending on that
determination date, and
o the value of the REO property based on the most recent appraisal
or other valuation thereof available to the servicer as of that
date of determination, including any prepared internally by the
servicer.
(6) A servicer watch list including a list of mortgage loans or companion
loans that have experienced a material decrease in debt service
coverage or a loss of or bankruptcy of the largest tenant of which the
servicer has actual knowledge, or that are approaching maturity.
None of these reports will include any information that the servicer
regards as confidential. Neither the servicer nor the trustee will be
responsible for the accuracy or completeness of any information supplied to it
by a borrower or other third party that is included in any reports, statements,
materials or information prepared or provided by the servicer or the trustee,
as applicable. Some information will be made available to certificateholders by
electronic transmission as may be agreed upon between the depositor and the
trustee.
Before each distribution date, the servicer will deliver to the trustee by
electronic means:
o a comparative financial status report containing substantially the
content provided in Annex B, including the occupancy, revenue, net
operating income and debt service coverage ratio for each mortgage
loan or companion loan, 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:
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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 or companion
loan; and
o a CMSA periodic loan file containing information on the mortgage loans
and companion loans and the mortgaged properties.
In addition, the servicer is also required to perform for each mortgaged
property and REO property:
o Within 30 days after receipt of a quarterly operating statement, if
any, beginning with the calendar quarter ended December 31, 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 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
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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:
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
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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
(other than the Class S 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 P,
Class O, Class N, Class M, Class L, Class K, Class J, Class H, Class G, Class
F, Class E, Class D, Class C, Class B and Class A certificates (pro rata
between the A-1 and A-2 certificates) in that order, solely for purposes of
calculating voting rights.
TERMINATION; RETIREMENT OF CERTIFICATES
The obligations created by the pooling and servicing agreement will
terminate following the earliest of:
o the final payment, or advance of that payment, or other liquidation of
the last mortgage loan, loan group or REO property in the trust, 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 companion 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 and the
companion loans, exclusive of mortgage loans for which the related
mortgaged properties have become REO properties, then included in the
trust; plus
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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, and
companion loan, as applicable, 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, companion 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 collection 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
Certificate 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.
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-C3.
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 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
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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, 2000, 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
anticipated during any particular period would not be fully offset by a
subsequent like reduction or increase in the rate of principal payments during
a later period.
Applicable Pass-Through Rate
The pass-through rate for each class of offered certificates will be as
specified in "Description of the Certificates--Pass-Through Rates." The yield
on the offered certificates, other than the Class A-1 and Class A-2
certificates, will be sensitive to changes in the relative composition of the
mortgage loans as a result of scheduled amortization, voluntary prepayments,
liquidations of mortgage loans following default and repurchases of mortgage
loans. Losses or payments of principal on the mortgage loans with higher net
mortgage rates could result in a reduction in the Weighted Average Net Mortgage
Rate and, to the extent that the Weighted Average Net Mortgage Rate is reduced
below the specified fixed rate for the Class B, Class C and Class D
certificates, reducing the pass-through rates on those classes of offered
certificates.
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<PAGE>
See "Description of the Mortgage Pool" in this prospectus supplement and
"--Yield Considerations--Rate and Timing of Principal Payments on the Mortgage
Loans" below.
Actual Performance of the Mortgage Loans
The yield to holders of the offered certificates will also depend on the
extent to which holders are required to bear the effects of any losses or
shortfalls on the mortgage loans. Losses and other shortfalls on the mortgage
loans will be borne as described in "Description of the Certificates--
Subordination; Allocation of Losses and Expenses" and "Risk Factors--Allocations
of losses on the mortgage loans will reduce your payments and yield on your
certificates."
Rate and Timing of Principal 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 and the allocation of such amounts under any related
intercreditor agreement. 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 "--Earnout Loans
and Additional Collateral Loans" in this prospectus supplement. Defaults on the
mortgage loans, particularly at or near their stated maturity dates, may result
in significant delays in payments of principal on the mortgage loans, and,
accordingly, on the principal balance certificates, while work-outs are
negotiated or foreclosures are 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 demograph-
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<PAGE>
ics 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--Earnout Loans and Additional Collateral
Loans" in this prospectus supplement and "Risk Factors" and "Yield and Maturity
Considerations--The Effects of Prepayments on Yield" in the prospectus.
The rate of prepayment on the mortgage 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" 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 Certificate Distribution Amount" in this prospectus
supplement, if the portion of the available distribution amount distributable in
respect of interest on any class of offered certificates on any distribution
date is less than the distributable certificate interest then payable for that
class, the shortfall will be distributable to holders of that class of
certificates on subsequent distribution dates, to the extent of available funds.
Any shortfall will not bear interest, however, and will therefore negatively
affect the yield to maturity of that class of certificates for so long as it is
outstanding.
WEIGHTED AVERAGE LIFE
The weighted average life of a certificate refers to the average amount of
time that will elapse from the date of its issuance until each dollar allocable
to principal of that certificate is distributed to the holder of that
certificate. 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
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<PAGE>
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
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 (including the
companion loans) 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 (in the
case of the Amerisuites loan and the MacArthur Center loan as
scheduled in their
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<PAGE>
related mortgage note as being due and payable), are timely received
on the applicable due date each month beginning in January, 2001;
(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 repurchased or 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 January, 2001;
(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;
(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 December 14, 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 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
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<PAGE>
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
and Class D certificates and the percentage of the initial certificate balance
of each class of certificates that would be outstanding after the closing date
and each of the distribution dates shown under the applicable assumptions at
the indicated CPR percentages.
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<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
December 15, 2001 .................... 94 94 94 94 94
December 15, 2002 .................... 86 86 86 86 86
December 15, 2003 .................... 79 79 79 79 79
December 15, 2004 .................... 70 70 70 70 70
December 15, 2005 .................... 60 60 60 60 60
December 15, 2006 .................... 50 50 50 50 50
December 15, 2007 .................... 39 39 39 39 39
December 15, 2008 .................... 27 27 27 27 27
December 15, 2009 .................... 14 14 13 12 4
December 15, 2010 .................... 0 0 0 0 0
Weighted Average Life
(in years) .......................... 5.68 5.68 5.67 5.67 5.64
First Principal Payment Date ......... 01/15/01 01/15/01 01/15/01 01/15/01 01/15/01
Last Principal Payment Date .......... 04/15/10 04/15/10 03/15/10 02/15/10 01/15/10
</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
December 15, 2001 ..................... 100 100 100 100 100
December 15, 2002 ..................... 100 100 100 100 100
December 15, 2003 ..................... 100 100 100 100 100
December 15, 2004 ..................... 100 100 100 100 100
December 15, 2005 ..................... 100 100 100 100 100
December 15, 2006 ..................... 100 100 100 100 100
December 15, 2007 ..................... 100 100 100 100 100
December 15, 2008 ..................... 100 100 100 100 100
December 15, 2009 ..................... 100 100 100 100 100
December 15, 2010 ..................... 0 0 0 0 0
Weighted Average Life
(in years) ........................... 9.74 9.73 9.72 9.69 9.51
First Principal Payment Date .......... 04/15/10 04/15/10 03/15/10 02/15/10 01/15/10
Last Principal Payment Date ........... 11/15/10 10/15/10 10/15/10 10/15/10 08/15/10
</TABLE>
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<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
December 15, 2001 .................... 100 100 100 100 100
December 15, 2002 .................... 100 100 100 100 100
December 15, 2003 .................... 100 100 100 100 100
December 15, 2004 .................... 100 100 100 100 100
December 15, 2005 .................... 100 100 100 100 100
December 15, 2006 .................... 100 100 100 100 100
December 15, 2007 .................... 100 100 100 100 100
December 15, 2008 .................... 100 100 100 100 100
December 15, 2009 .................... 100 100 100 100 100
December 15, 2010 .................... 0 0 0 0 0
Weighted Average Life
(in years) .......................... 9.92 9.91 9.89 9.84 9.67
First Principal Payment Date ......... 11/15/10 10/15/10 10/15/10 10/15/10 08/15/10
Last Principal Payment Date .......... 11/15/10 11/15/10 11/15/10 11/15/10 08/15/10
</TABLE>
PERCENTAGES OF THE INITIAL CERTIFICATE BALANCE OF
THE CLASS C CERTIFICATES AT 0% CPR DURING LOCKOUT,
DEFEASANCE, YIELD MAINTENANCE AND PENALTY PERIOD AND OTHERWISE AT INDICATED CPR
<TABLE>
<CAPTION>
PREPAYMENT ASSUMPTION (CPR)
------------------------------------------------------------------------
DATE 0% CPR 25% CPR 50% CPR 75% CPR 100% CPR
---- ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Closing Date .......................... 100 100 100 100 100
December 15, 2001 ..................... 100 100 100 100 100
December 15, 2002 ..................... 100 100 100 100 100
December 15, 2003 ..................... 100 100 100 100 100
December 15, 2004 ..................... 100 100 100 100 100
December 15, 2005 ..................... 100 100 100 100 100
December 15, 2006 ..................... 100 100 100 100 100
December 15, 2007 ..................... 100 100 100 100 100
December 15, 2008 ..................... 100 100 100 100 100
December 15, 2009 ..................... 100 100 100 100 100
December 15, 2010 ..................... 0 0 0 0 0
Weighted Average Life
(in years) ........................... 9.92 9.92 9.92 9.92 9.67
First Principal Payment Date .......... 11/15/10 11/15/10 11/15/10 11/15/10 08/15/10
Last Principal Payment Date ........... 11/15/10 11/15/10 11/15/10 11/15/10 08/15/10
</TABLE>
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<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
December 15, 2001 .................... 100 100 100 100 100
December 15, 2002 .................... 100 100 100 100 100
December 15, 2003 .................... 100 100 100 100 100
December 15, 2004 .................... 100 100 100 100 100
December 15, 2005 .................... 100 100 100 100 100
December 15, 2006 .................... 100 100 100 100 100
December 15, 2007 .................... 100 100 100 100 100
December 15, 2008 .................... 100 100 100 100 100
December 15, 2009 .................... 100 100 100 100 100
December 15, 2010 .................... 0 0 0 0 0
Weighted Average Life
(in years) .......................... 9.92 9.92 9.92 9.92 9.67
First Principal Payment Date ......... 11/15/10 11/15/10 11/15/10 11/15/10 08/15/10
Last Principal Payment Date .......... 11/15/10 11/15/10 11/15/10 11/15/10 08/15/10
</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,
under the maturity assumptions.
The yields provided in the following tables were calculated by determining
the monthly discount rates which, when applied to the assumed stream of cash
flows to be paid on each class of offered certificates, would cause the
discounted present value of the assumed stream of cash flows as of December 14,
2000 to equal the assumed purchase prices, plus accrued interest at the
applicable pass-through rate on page S-5 from and including December 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.
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<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-133
<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>
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<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>
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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 proposed
regulations, all of which may change, possibly retroactively. To the extent
that the following summary relates to matters of law or legal conclusions with
respect thereto, the summary represents the opinion of 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," "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 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 P
certificates, in addition to evidencing REMIC regular interests, will also
evidence undivided beneficial
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<PAGE>
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 a rate based on the
lesser of a fixed rate or a rate based on the weighted average mortgage rate,
it is not entirely clear that the method intended to be used by the trust fund
in reporting that interest (i.e., as "qualified stated interest") would be
recognized by the IRS. Prospective purchasers of the offered certificates are
advised to consult their tax advisors concerning the tax treatment of the
certificates.
See "Federal Income Tax Consequences--REMICs--Taxation of Owners of REMIC
Regular Certificates--Original Issue Discount" in the prospectus.
The OID Regulations in some circumstances permit the holder of a debt
instrument to recognize original issue discount under a method that differs
from that of the issuer. Accordingly, it is possible that holders of
certificates may be able to select a method for recognizing original issue
discount that differs from that used by the trustee in preparing reports to
certificateholders and the IRS. Prospective investors are advised to consult
their tax advisors concerning the treatment of any original issue discount on
purchased certificates.
Prepayment premiums collected on the mortgage loans will be distributed to
the holders of each class of certificates entitled to the prepayment premiums
as described in this prospectus supplement. It is not clear under the Code when
the amount of a prepayment premium should be taxed to the holder of a class of
certificates entitled to a prepayment premium. For federal income tax reporting
purposes, prepayment premiums will be treated as income to the holders of a
class of certificates entitled to prepayment premiums only after the servicer's
actual receipt of a prepayment premium that the class of certificates is
entitled to under the terms of the pooling and servicing agreement. It appears
that prepayment premiums are to be treated as ordinary income rather than
capital gain. However, the correct characterization of that income is not clear
and certificateholders should consult their tax advisors concerning the
treatment of prepayment premiums.
Some classes of certificates may be treated for federal income tax
purposes as having been issued at a premium. Whether any holder of a class of
certificates will be treated as holding a certificate with amortizable bond
premium will depend on the certificateholder's purchase price and the
distributions remaining to be made on the certificate at the time of its
acquisition by the certificateholder. Holders of each affected class of
certificates should consult their tax advisors regarding the possibility of
making an election to amortize that premium. See "Federal Income Tax
Consequences--REMICs--Taxation of Owners of REMIC Regular
Certificates--Premium" in the prospectus.
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
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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 P certificateholders' right to receive excess interest will be
treated as "stripped coupons" under Section 1286 of the Code. Because excess
interest will arise on the ARD loans only if, contrary to the prepayment
assumption utilized in determining the rate of accrual of original issue
discount as described above, they do not prepay on their related anticipated
repayment dates, for federal income tax information reporting purposes it will
initially be assumed that no excess interest will be paid. Consequently, excess
interest will not be reported as income in federal income tax information
reports sent to certificateholders entitled thereto until excess interest
actually accrues. Similarly, no portion of that holders' purchase price of
their certificates will be treated as allocable to their right to receive
possible distributions of excess interest. However, the Internal Revenue
Service might conceivably disagree with this treatment and assert that
additional income should be accrued for projected possible payments of excess
interest in advance of its actual accrual, that additional original issue
discount income should be accrued for the affected certificates, or both. Class
P 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 on or
about November , 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 December , 2000, against
payment therefor in immediately available funds.
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ALLOCATION TABLE
<TABLE>
<CAPTION>
UNDERWRITER CLASS A-1 CLASS A-2 CLASS B CLASS C CLASS D
----------- ----------- ----------- --------- --------- --------
<S> <C> <C> <C> <C> <C>
Deutsche Bank Securities Inc.
Goldman, Sachs & Co. .......
--- --- --- --- ---
Total ...................... 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 offering agreement
provides that, in specified circumstances, the purchase commitment of the
nondefaulting underwriter may be increased or the underwriting may be
terminated.
Under the underwriting agreement, each underwriter must pay for and accept
delivery of its certificates provided that specified conditions are met,
including the receipt of legal opinions, that no stop order suspending the
effectiveness of the depositor's registration statement is in effect, and that
no proceedings for that purpose are pending before or threatened by the SEC.
The distribution of the offered certificates by any underwriter may be
effected from time to time in one or more negotiated transactions, or
otherwise, at varying prices to be determined at the time of the sale. Proceeds
to the depositor from the sale of the offered certificates, before deducting
expenses payable by the depositor to the underwriters, will be approximately %
of the aggregate certificate balance of the offered certificates, plus accrued
interest. Each underwriter may effect transactions by selling its certificates
to or through dealers. Dealers may receive compensation in the form of
underwriting discounts, concessions or commissions from the underwriter for
whom they act as agent. In connection with the sale of the offered
certificates, each underwriter may be deemed to have received compensation from
the depositor in the form of underwriting compensation. Each underwriter and
any dealers that participate with the underwriter in the distribution of the
offered certificates may be deemed to be underwriters and any profit on the
resale of the offered certificates positioned by them may be deemed to be
underwriting discounts and commissions under the Securities Act of 1933.
Deutsche Bank Securities Inc. is an affiliate of GACC and Goldman, Sachs &
Co. is an affiliate of GSMC and Archon Financial, L.P.
The depositor will indemnify the underwriters, and under limited
circumstances the underwriters will severally and not jointly indemnify the
depositor against specified civil liabilities under the Securities Act of 1933
or contribute to payments to be made in respect thereof.
A secondary market for the offered certificates may not develop and, if it
does develop, it may not continue. The primary source of ongoing information
available to investors concerning the offered certificates will be the trustee
reports discussed in this prospectus supplement under "Description of the
Certificates--Reports to 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
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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-C3 Mortgage Pass-Through Certificates and Pool Characteristics." The
ratings of the offered certificates address the likelihood of the timely
receipt by holders thereof of all payments of interest, other than excess
interest, to which they are entitled on each distribution date and the ultimate
receipt by holders thereof of all payments of principal to which they are
entitled, if any, by the September, 2035 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.
Any rating agency not requested to rate the offered certificates may
nonetheless issue any rating to any class thereof. A rating assigned to any
class of offered certificates by a rating agency that has not been requested by
the depositor to do so may be lower than the ratings assigned by any rating
agency rating that class.
You should evaluate the ratings on the offered certificates independently
from similar ratings on other types of securities. A security rating is not a
recommendation to buy, sell or hold a security and may be changed or withdrawn
at any time by the assigning rating agency.
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
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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, Class B, Class C, Class D, Class E,
Class F or Class G 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 PTE 97-34, 62 Fed. Reg. 39021 (1997)) and PTE 2000-58, 65 Fed. Reg. 67765
(2000). To qualify for the exemption, however, a number of conditions must be
met, including the requirement that the plan must be an "accredited investor"
as defined in Rule 501(a)(1) of Regulation D of the Securities and Exchange
Commission under the Securities Act of 1933, and that at the time of
acquisition, the certificates must be rated in one of the top four generic
rating categories by at least one rating agency. In addition, because the
exemption does not apply to certificates rated below the top four generic
rating categories, neither the exemption nor any similar exemption issued to
the underwriters will apply to the Class A, Class B, Class C, Class D, Class E,
Class F or Class G certificates.
As a result, if you purchase a Class A, Class B, Class C or Class D, Class
E, Class F or Class G certificate or any interest in these certificates, you
will be deemed to have represented by your purchase that either:
o you are not a plan and you are not purchasing your certificates on
behalf of, or with "plan assets" of, any plan or
o your purchase of any of those certificates on behalf of, or with "plan
assets" of, any plan is permissible under applicable law, will not
result in any non-exempt prohibited transaction under ERISA or Section
4975 of the Code, and will not
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subject the depositor, the trustee or the servicer to any obligation
in addition to those undertaken in the pooling and servicing
agreement, and the following conditions are met:
(1) the source of funds that you used to purchase your certificate is
an "insurance company general account" as defined in PTCE 95-60
and
(2) the conditions of Sections I and III of PTCE 95-60 have been
satisfied as of the date of the acquisition of your certificates.
See "ERISA Considerations--Representation From Investing Plans"
in the prospectus.
If you are an insurance company and you would like to invest your general
account assets in the offered certificates, you should consult with your legal
advisors about whether Section 401(c) of ERISA, as described under "ERISA
Considerations--Representation From Investing Plans" in the prospectus, may
apply to you. On January 5, 2000, the DOL published final regulations under
Section 401(c) that will generally become applicable on July 5, 2001.
If you are a plan fiduciary or other person considering whether to
purchase an offered certificate on behalf of or with "plan assets" of a plan,
you should consult with your counsel about whether the fiduciary responsibility
provisions of ERISA and the prohibited transaction provisions of ERISA and
Section 4975 of the Code may apply to your investment, and whether the
exemption or any other prohibited transaction exemption may be available in
connection with your purchase. See "ERISA Considerations" in the prospectus.
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GLOSSARY
AVAILABLE CERTIFICATE DISTRIBUTION AMOUNT--The Available Certificate
Distribution Amount for any distribution date will generally equal:
(1) all amounts on deposit in the mortgage loan subaccount and the
certificate 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 and allocated to the mortgage loan
subaccount;
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 mortgage loan subaccount or the
certificate distribution account, as the case may be, 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 and Balloon Payment 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 "Description of the
Certificates--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
on a balloon mortgage loan 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 on a
balloon mortgage loan 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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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 or
companion 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 or
companion loan will be determined without regard to any modification, waiver or
amendment of the terms of the mortgage loan or companion 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 Shortfal.
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 (other than any companion loan) for
their respective due dates occurring during the same calendar month as
that distribution date;
(2) all voluntary principal prepayments received on the mortgage loans
(other than any companion loan) during the related collection period;
(3) for any balloon loan (other than any companion loan) for which the
stated maturity date occurred, or any ARD loan for which the
anticipated repayment date occurred, during or before the related
collection period, any payment of principal, exclusive of any
voluntary principal prepayment and any amount described in clause (4)
below, made by or on behalf of the related borrower during the related
collection period, net of any portion of 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
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that were identified and applied by the servicer as recoveries of
principal and allocable to any companion loan, 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 (other than any companion 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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ANNEX A
CHARACTERISTICS OF THE MORTGAGE LOANS
The schedule and tables appearing in this Annex A set forth certain
information for the mortgage loans and mortgaged properties. The information is
presented, where applicable, as of the cut-off date for each mortgage loan and
the related mortgaged properties. The statistics in such schedule and tables
were derived, in many cases, from information and operating statements
furnished by or on behalf of the respective borrowers. The information and
operating statements were generally unaudited and have not been independently
verified by the depositor or the underwriters or any of their respective
affiliates or any other person. The sum of the amounts in any column of any of
the tables of this Annex A may not equal the indicated total under such column
due to rounding.
Net income for a mortgaged property as determined in accordance with
generally accepted accounting principles would not be the same as the stated
underwritten net cash flow for such mortgaged property as provided in the
following schedule or tables. In addition, underwritten net cash flow is not a
substitute for or comparable to operating income as determined in accordance
with generally accepted accounting principles as a measure of the results of a
property's operations or a substitute for cash flows from operating activities
determined in accordance with GAAP as a measure of liquidity. No representation
is made as to the future net cash flow of the mortgaged properties, nor is the
underwritten net cash flow provided in this prospectus supplement for any
mortgaged property intended to represent such future net cash flow.
In the schedule and tables provided in this Annex A, for mortgage loans
evidenced by one mortgage note, but secured by multiple mortgaged properties,
for some purposes, separate amounts for each such related mortgaged property
are shown.
DEFINITIONS
For purposes of the prospectus supplement, including the schedule and
tables in this Annex A, the indicated terms have the following meanings, as
modified, by reference to the "Certain Loan Payment Terms" below and footnotes
to the schedules that follow:
1. "Underwritten net cash flow," "underwritten NCF" or "UW NCF" for any
mortgaged property, means an estimate of cash flow available for debt service
in a typical year of stable, normal operations. Generally, it is the estimated
revenue derived from the use and operation of such mortgaged property less the
sum of estimated (a) operating expenses (such as utilities, administrative
expenses, repairs and maintenance, management and franchise fees and
advertising), (b) fixed expenses (such as insurance, real estate taxes and, if
applicable, ground lease payments), (c) 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. In the case of the
AmeriSuites loan and the MacArthur Center loan, annual debt service is the
amount as scheduled in the related note as being due and payable for such
period.
3. "UW NCF DSCR," "underwritten NCF DSCR," "debt service coverage ratio,"
"DSC Ratio" or "DSCR" means, for any mortgage loan, (a) the underwritten net
cash flow for the mortgaged property, divided by (b) the annual debt service
for such mortgage loan, assuming for the purposes of this Annex A, except as
otherwise indicated, in the case of the mortgage loans providing for earnout
reserves (which, if the conditions for release are not met by a certain date,
would be used to partially prepay or defease the mortgage loan), that the
principal balance of the mortgage loan is reduced by the amount of the earnout.
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
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<PAGE>
material leases that are scheduled to expire during the loan term and that
provide for above-market rents and/or that may be difficult to replace), a debt
service coverage ratio may not be a reliable indicator of a property's ability
to service the mortgage debt over the entire remaining loan term. The
underwritten NCF DSCRs are presented in this prospectus supplement for
illustrative purposes only and, as discussed above, are limited in their
usefulness in assessing the current, or predicting the future, ability of a
mortgaged property to generate sufficient cash flow to repay the related
mortgage loan. As a result, no assurance can be given, and no representation is
made, that the underwritten NCF DSCRs accurately reflect that ability. The
underwritten NCF DSCR for the interest-only mortgage loans is based on the
payment due after the interest-only period, and for the step amortization
mortgage loans is based on the payment due as of the cut-off date or the
payment due after the interest-only period, as applicable.
4. "Appraised value" means, for any mortgaged property, the appraiser's
adjusted value as stated in the most recent third-party appraisal available to
the depositor. In some cases, the appraiser's adjusted value takes into account
certain repairs or stabilization of operations. In some cases in which the
appraiser assumed the completion of repairs, such repairs were, generally,
either completed before the delivery date or the seller has taken reserves
sufficient to complete such repairs. No representation is made that any such
value would approximate either the value that would be determined in a current
appraisal of the related mortgaged property or the amount that would be
realized upon a sale.
5. "Cut-off date loan-to-value ratio," "loan-to-value ratio," "cut-off
date LTV," "current LTV" or "CLTV" means, with respect to any mortgage loan,
(a) the cut-off date balance of that mortgage loan (except as otherwise
indicated, net of earnout reserves or additional collateral, if applicable)
divided by (b) the appraised value of the mortgaged property or mortgaged
properties. For mortgage loans for which earnout reserves have been
established, cut-off date loan-to-value ratio is shown assuming that the
earnout is not achieved, except as otherwise indicated.
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.
A-3
<PAGE>
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.
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 21015. The mortgage loan requires monthly payments of interest
only (calculated using actual/360 interest accrual method) from October 5, 2000
through September 5, 2002. Commencing on October 5, 2002 and continuing through
maturity, monthly payments of principal and interest in the amount of
$225,555.63 are required.
Loan Number 27395. The mortgage loan requires monthly payments of interest
only (calculated using actual/360 interest accrual method) from August 5, 2000
through May 5, 2001. Commencing on June 5, 2001 and continuing through
maturity, monthly payments of principal and interest in the amount $95,638.53
are required.
Loan Number 11029240. The mortgage loan requires monthly payments of
interest only in the amount of $88,214.58 from October 1, 2000 through
September 1, 2001. Commencing on October 1, 2001 and continuing through
maturity, monthly payments of principal and interest in the amount of
$96,948.79 are required.
CERTAIN RESERVES
Loan Number 27443. The mortgage loan requires an initial deposit of $100
into the replacement reserve. Beginning December 1, 2000 and on the first day
of each
A-4
<PAGE>
subsequent calendar month through April 1, 2001, borrower is paying $8,000 per
month into the replacement reserve. Commencing on May 1, 2001 and thereafter, a
monthly payment is based on 1/12th of 5% of gross revenues from the property
during the immediately preceding calendar year.
Loan Number 28269. The mortgage loan requires an initial deposit of $100
into the replacement reserve. Commencing on October 1, 2001 and thereafter, the
monthly payment is based on 1/12th of 5% of gross revenues from the property
during the immediately preceding calendar year.
Loan Number 28270. The mortgage loan requires an initial deposit of $1,000
into the replacement reserve. The borrower is paying $10,926.17 per month into
the replacement reserve through April 1, 2001. Commencing on May 1, 2001 the
monthly payment is based on 1/12th of 5% of gross revenues from the property
during the immediately preceding calendar year.
Loan Number 28491. The mortgage loan requires monthly payments of
$6,351.51 per month into the replacement reserve through April 1, 2001.
Commencing on May 1, 2001 the monthly payment is based on 1/12th of 4% of gross
revenues from the property during the immediately preceding calendar year.
Loan Number 28493. The mortgage loan requires an initial deposit of $1,000
into the replacement reserve. The borrower is paying $7,400 per month into the
replacement reserve through April 1, 2001. Commencing on May 1, 2001 the
monthly payment is based on 1/12th of 4% of gross revenues from the property
during the immediately preceding calendar year.
Loan Number 28497. The mortgage loan requires an initial deposit of $1000
into the replacement reserve. Beginning September 1, 2000 and on the first day
of each subsequent calendar month through April 1, 2001, borrower is paying
$6,900 per month into the replacement reserve. Commencing on May 1, 2001 the
monthly payment is based on 1/12th of 4% of gross revenues from the property
during the immediately preceding calendar year.
Loan Number 28499. The mortgage loan requires an initial deposit of $1,000
into the replacement reserve. The borrower is paying $7,500 per month into the
replacement reserve through April 1, 2001, which is 4% of total gross revenues.
Commencing on May 1, 2001 the monthly payment is based on 1/12th of 4% of gross
revenues from the property during the immediately preceding calendar year.
Loan Number 28640. The mortgage loan requires an initial deposit of $2,000
into the replacement reserve. The borrower is paying $8,000 per month into the
replacement reserve beginning January 2001 through April 2001. Commencing on
May 1, 2001, the monthly payment will be 1/12th of 4% of gross revenues based
on the operation of the property during the immediately preceding calendar
year.
Loan Number 29734. The mortgage loan requires monthly payments equal to
1/12th of 4% of annual Operating Revenues as calculated both on an aggregate
basis for all properties and on an individual basis for each property into the
replacement reserve. The borrower shall not be required to make such
replacement reserve deposit so long as the DSCR has not fallen below 1.48x and
within twenty (20) days following the end of each calendar quarter, the
borrower provides Lender with reports of the expenditures made by the borrower
for the replacements for each property during such calendar quarter. If the
actual expenditures made by the borrower are less than the replacements budget
for that quarter, the borrower must deposit the difference into the replacement
reserve.
A-5
<PAGE>
Loan Number DBM8915. The mortgage loan requires ongoing monthly deposits
of $21,964 into the tenant improvement and leasing commission reserve, and
$3,248 into the replacement reserve.
Loan Number DBM11332. The mortgage loan requires ongoing monthly deposits
of $10,200 into the replacement reserve.
Loan Number DBM12838. The mortgage loan requires ongoing monthly deposits
of $16,000 into the replacement reserve.
Loan Number DBM12916. The mortgage loan requires an initial deposit of
$323,858 into the immediate repairs reserve, and ongoing monthly deposits of
$26,581 into the tenant improvement and leasing commission reserve, and $3,744
into the replacement reserve.
Loan Number DBM13744. The mortgage loan requires an initial deposit of
$177,750 into the immediate repairs reserve, and ongoing monthly deposits of
$5,284 into the tenant improvement and leasing commission reserve, and $1,647
into the replacement reserve.
Loan Number DBM13840. The mortgage loan requires ongoing monthly deposits
of $70,048 into the tenant improvement and leasing commission reserve, and
$10,596 into the replacement reserve.
Loan Number DBM13892. The mortgage loan requires an initial deposit of
$396,125 into the immediate repairs reserve, and ongoing monthly deposits of
$4,158 into the replacement reserve.
Loan Number DBM14180. The mortgage loan requires an initial deposit of
$115,250 into the immediate repairs reserve, and ongoing monthly deposits of
$5,167 in the replacement reserve.
Loan No. 09-0001388. The mortgage loan requires an initial deposit of
$266,000 into the tenant improvement and leasing commissions account. All funds
will be released upon receipt of a tenant estoppel certificate signed by
tenant.
Loan No. 09-0001367. The mortgage loan requires an initial deposit of
$1,020,000 into the tenant improvement and leasing commissions account for
tenant improvements under certain leases. In addition, monthly deposits may be
required up to a certain amount. The mortgage loan also requires an initial
deposit of $80,000 that will be released upon receipt of a tenant estoppel
certificate.
Loan No. 09-0001381. The mortgage loan requires an initial deposit of
$900,000 for the tenant improvement of the space leased to certain tenants.
Upon receipt of executed tenant estoppel and lien waivers, the borrower may
request a release of such amounts.
Loan No. 09-0001334. The mortgage loan requires an initial deposit of
$435,500 and monthly deposits of $2,000 into the tenant improvement and leasing
commissions account. The borrower may request a release of such amounts upon
(1) execution of a new or renewal lease with respect to certain tenants upon
certain terms specified in the related loan documents and (2) receipt of a
tenant estoppel certificate.
Loan No. 09-0001385. The mortgage loan requires an initial deposit of
$73,563 in respect of leasing commissions and a deposit of $286,757 in respect
of tenant improvements into an escrow account. Upon execution of all lien
waivers this deposit will be released. Also collected at closing was a deposit
of $36,514. All funds will be released upon receipt of a tenant estoppel
certificate signed by tenant.
A-6
<PAGE>
Loan No. 09-0001369. The mortgage loan requires an initial deposit of
$386,061 into the tenant improvement and leasing commissions account to be used
for tenant improvements required under certain leases which will be released
upon receipt of tenant estoppel certificates. Additionally, the borrower is
required to make monthly deposits of $4,167 for tenant improvement and leasing
commission obligations beginning October 1, 2005 and must post an irrevocable
and unconditional standby letter of credit in the amount of $250,000 prior to
November 15, 2009.
Loan No. 09-0001404. The mortgage loan requires an initial deposit of
$65,000 into the tenant improvement and leasing commissions account which will
be released upon receipt of an executed tenant estoppel certificate.
Loan No. 09-0001390. The mortgage loan requires an initial deposit of
$83,475 into the tenant improvement and leasing commissions account.
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 all but two of the earnout loans listed
below, the earliest date on which any amounts may be so applied is set forth
beneath the caption "Earliest Defeasance or Prepay Date." For each of these
earnout loans, the underwritten NCF DSCRs and CLTVs shown in this prospectus
supplement and on the foldout pages in this Annex A are calculated based on the
principal balance of those mortgage loans net of the related earnout amount.
Those underwritten DSCRs and CLTVs are also shown beneath the caption "Net of
Earnout Underwritten NCF DSCR" and "Net of Earnout LTV" in the table below. The
amounts beneath the captions "Full Balance Cut-Off Date LTV" and "Full Balance
Cut-Off Date NCF DSCR" are calculated based on a principal balance of those
mortgage loans that includes the related earnout amount. The following table
sets forth certain information regarding the earnout loans:
<TABLE>
<CAPTION>
FULL LOAN NET OF
CONTROL LOAN EARNOUT CURRENT AMOUNT EARNOUT
NUMBER NO. AMOUNT BALANCE LTV LTV
------ --- ------ ------- --- ---
<S> <C> <C> <C> <C> <C>
59 2476 $ 232,000 $ 5,393,921 72.89% 69.76%
33 2730 $ 400,000 $ 9,579,724 69.42% 66.52%
94 2823 $ 500,000 $ 3,194,811 72.61% 61.25%
20 2949 $ 400,000 $14,939,887 79.89% 77.75%
143 01102924 $ 130,300 $ 1,297,834 68.31% 61.45%
57 DBM10207 $1,215,000 $ 5,546,720 67.64% 67.64%
117 DBM13977 $ 250,000 $ 7,098,749 69.96% 69.96%
<CAPTION>
FULL LOAN NET OF IF PREPAY,
CONTROL AMOUNT EARNOUT NCF EARNOUT DEFEASE/ YIELD MAINT.
NUMBER DSCR DSCR DATE PREPAY APPLIC.
------ ---- ---- ---- ------ -------
<S> <C> <C> <C> <C> <C>
59 1.15x 1.20x 3/25/01 Prepay Yes
33 1.23x 1.28x 1/26/01 Prepay Yes
94 1.11x 1.31x 9/19/01 Prepay No
20 1.23x 1.26x 8/1/2001 Prepay Yes
143 1.39x 1.55x 12/23/00 Prepay Yes
57 1.29x 1.29x 11/1/2010 Defease/Prepay Yes
117 1.32x 1.32x 12/31/2007 Prepay No
</TABLE>
A-7
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
ANNEX A
CHARACTERISTICS OF THE MORTGAGE LOANS
<TABLE>
<CAPTION>
CONTROL
NUMBER LOAN SELLER LOAN NUMBER PROPERTY NAME
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<S> <C> <C> <C>
1 GMACCM 24082 Arizona Mills
2 GMACCM GSMC 1 MacArthur Center
3 Deutsche Bank DBM13840 1999 Broadway Building
4 GMACCM 29734 Amerisuites/Residence Inn Portfolio
4a GMACCM 29734-A AmeriSuites - Birmingham
4b GMACCM 29734-B AmeriSuites Uptown - Albuquerque
4c GMACCM 29734-C AmeriSuites - Linthicum Heights
4d GMACCM 29734-D AmeriSuites - Tampa
4e GMACCM 29734-E AmeriSuites - Flagstaff
4f GMACCM 29734-F AmeriSuites - Forest Park
4g GMACCM 29734-G Homewood Suites - Germantown
4h GMACCM 29734-H Residence Inn - Somers Point
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5 Deutsche Bank DBM13657 201 East 14th - Coral Tower
6 GMACCM 21015 St. Croix Apartments at Pelican Marsh
7 Deutsche Bank DBM12838 Coral Gate Apartments
8 GMACCM 28723 Lichtenstein Retail Portfolio
8a GMACCM 28723-A Hale Road Plaza
8b GMACCM 28723-B Christmas Tree Shops Plaza
8c GMACCM 28723-C Bernie's Plaza
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9 Deutsche Bank DBM14078 Copper Canyon Apartments
10 Deutsche Bank DBM13207 201 East 86th Street
11 GMACCM 28450 Governor's Square Apartments
12 Archon Financial 09-0001378 Poinsettia Plaza/Main Retail Plaza
13 Archon Financial 09-0001401 Harbor Pointe Apartments
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14 Deutsche Bank DBM9716 A-C Development Portfolio
14a Deutsche Bank DBM9716-A Georgetown Square Shopping Center
14b Deutsche Bank DBM9716-B Lake Murray Shopping Center
14c Deutsche Bank DBM9716-C Litchfield Market Village
14d Deutsche Bank DBM9716-D Piggly Wiggly
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15 Deutsche Bank DBM8915 Maryland Trade Center III
16 Archon Financial 09-0001403 Brittany at Waterford Lakes Apartments
17 Archon Financial 09-0001392 Uptown Center
18 Archon Financial 09-0001388 Long Beach Town Square
19 Archon Financial 09-0001402 Cross Timbers Apartments
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20 GMACCM 29497 Briargrove Plaza Shopping Center
21 RFC 991091618 Valley Creek Office Property
22 Deutsche Bank DBM11332 Colonial Townhouse
23 RFC 11029238 Athens Promenade
24 RFC 11029240 DeZavala Oaks Apartments
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25 GMACCM 27395 Bound Brook Apartments
26 Deutsche Bank DBM12916 B & O Building
27 Deutsche Bank DBM12721 Napa Valley Apartments
28 RFC 991091621 Courtyard by Marriott - Orange
29 GMACCM 28997 Hillside Village Shopping Center
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30 Archon Financial 09-0001380 One North Main
31 GMACCM 28269 Holiday Inn-Pittsburgh Airport
32 Archon Financial 09-0001412 International Business Park IV
33 GMACCM 27302 Fairfax Circle Shopping Center
34 Archon Financial 09-0001367 East Town Center
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35 RFC 991091659 Avanex II
36 Archon Financial 09-0001399 1200 Pacific Avenue
37 Archon Financial 09-0001381 Winchester Meadows
38 RFC 991091630 Porter Square Galleria
39 Archon Financial 09-0001398 Waterview Apartments
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40 RFC 991091620 Courtyard by Marriott - Westborough
41 Deutsche Bank DBM12603 Dominion Plaza
42 RFC 991091256 Windover of Melbourne Apartments
43 Deutsche Bank DBM12582 Ridge Carlton Apartments
44 Deutsche Bank DBM13891 Whisper Hollow
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45 RFC 991091662 Park Colony Apartments
46 Deutsche Bank DBM13933 265 East Office Building
47 Archon Financial 09-0001385 Pioneer Plaza I & II
48 Deutsche Bank DBM14180 Chandler's Mill Apartments
49 Deutsche Bank DBM13255 Industry Hills Business Park
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50 GMACCM 28270 Courtyard by Marriott
51 GMACCM 28492 Vistas at Northbrook
52 Archon Financial 09-0001365 Belle Mill Landing
53 GMACCM 28640 Fairfield Inn by Marriott
54 RFC 991091255 Windover Health Club Apartments
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55 Deutsche Bank DBM13573 Pineridge Shopping Center
56 Archon Financial 09-0001369 Valley High Business Center
57 Deutsche Bank DBM10207 Dove Canyon Plaza
58 RFC 11029222 The Willows Apartments
59 GMACCM 24767 Villages at McClintock
------------------------------------------------------------------------------------------------------------------------------------
60 GMACCM 28491 TownePlace Suites by Marriott
61 GMACCM 28350 Bay Shore Retail Center
62 Archon Financial 09-0001386 Hillsdale Office Center
63 GMACCM 28616 Waterford at Summit View Apartments
64 GMACSLP 01-1026848 Bongiovanni Apartment Portfolio
64a GMACSLP 01-1026848-A 2100 Westbury Court Apartments
64b GMACSLP 01-1026848-B 2110 Westbury Court Apartments
64c GMACSLP 01-1026848-C 3506 Newkirk Avenue Apartments
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65 Deutsche Bank DBM12720 Pennyfield Estates
66 Archon Financial 09-0001391 Crystal Lake Apartments
67 RFC 11029255 Fowler Plaza
68 RFC 991091257 Windover Golden Pointe
69 Deutsche Bank DBM13574 Kelley Corner
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70 RFC 991091664 Bluffs IV
71 GMACSLP 01-1027968 2911 Florence Avenue Retail
72 Archon Financial 09-0001334 Home-Kim Group
73 Archon Financial 09-0001397 Greencastle Market Place
74 Deutsche Bank DBM13892 High Point Apartments
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75 GMACCM 28493 Courtyard by Marriott
76 Deutsche Bank DBM13744 Powerline Business Center
77 Archon Financial 09-0001387 Hanke Building
78 Archon Financial 09-0001407 Sierra Town Center
79 Archon Financial 09-0001382 Sequoia Grove
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80 Archon Financial 09-0001349 Little River Square Shopping Center
81 GMACCM 28499 Courtyard by Marriott (MI)
82 GMACSLP 01-1027711 Parkview Professional Building
83 GMACCM 28497 Fairfield Inn by Marriott (TX)
84 Archon Financial 09-0001376 Arizona Corporate Center
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85 GMACCM 29297 Amtech Systems Corporation Facility
86 GMACSLP 01-1026840 Kendall Apartment Portfolio
86a GMACSLP 01-1026840-A 39th Street Apartments
86b GMACSLP 01-1026840-B Sutton Place Apartments
86c GMACSLP 01-1026840-C Winston Drive Apartments
86d GMACSLP 01-1026840-D 25th Street Apartments
86e GMACSLP 01-1026840-E Kennedy Drive Apartments
86f GMACSLP 01-1026840-F Loganwood Apartments
------------------------------------------------------------------------------------------------------------------------------------
87 Archon Financial 09-0001396 Cardinal Plaza Shopping Center
88 RFC 991091661 Linens & Things
89 Archon Financial 09-0001366 Mill Plain Court Apartments
90 GMACCM 27443 Microtel Inn & Suites (Maryland)
91 RFC 991091652 Wellington Mobile Home Park
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92 RFC 991091668 Suncrest Village Apartments
93 Deutsche Bank DBM13675 77 Arkay & 89 Cabot
93a Deutsche Bank DBM13675-A 77 Arkay Drive
93b Deutsche Bank DBM13675-B 89 Cabot Court
94 GMACCM 28233 Bainbridge Self-Storage
------------------------------------------------------------------------------------------------------------------------------------
95 Archon Financial 09-0001411 Garden Court Apartments
96 Archon Financial 09-0001375 Varnell Crossing Shopping Center
97 Archon Financial 09-0001404 South Hill Park Professional Center
98 RFC 11029223 Best Buy Mankato
99 GMACCM 28394 Pine Circle Townhomes
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100 RFC 991091254 Windover of Fort Pierce Apartments
101 Archon Financial 09-0001373 Muir Heights Apartments
102 RFC 991091647 Metro Park Complex
103 Archon Financial 09-0001400 Granite Industrial Center
104 Archon Financial 09-0001410 Durango Crossing Shopping Center
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105 Archon Financial 09-0001394 One Summerside Place
106 Archon Financial 09-0001393 Shepherd Hills Center
107 GMACSLP 01-1026670 Island Mall
108 RFC 991091633 Route One Crossing
109 RFC 991091653 Riverbend MHP
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110 Deutsche Bank DBM12529 Shiels Medical Center Plaza I & II
111 Archon Financial 09-0001408 Alder Square Office Building
112 GMACCM 27764 Timberlake Courts Apartments
113 Deutsche Bank DBM13456 First Banister and Banister Place
114 RFC 991091657 Eckerd Drug/Children's Hospital
------------------------------------------------------------------------------------------------------------------------------------
115 RFC 991091654 Beacon Commons
116 Deutsche Bank DBM12485 Brightleaf Shopping Center
117 Deutsche Bank DBM13977 Madison Springs Plaza
118 RFC 11029256 Mission Square Retail Center
119 GMACSLP 01-1025159 Highland Park Apartments
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120 GMACSLP 01-1026870 Ashley Apartment Building
121 Archon Financial 09-0001370 Thomasville Furniture Showroom
122 Archon Financial 09-0001374 7419-7431 Lindbergh Drive
123 GMACSLP 01-1028013 Carlton Heights Apartments
124 Archon Financial 09-0001372 Insight AirCenter
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125 RFC 991091632 Louis Brandman and Sons
126 RFC 991091646 Empire Building
127 RFC 991091669 Courtyard Park
128 RFC 991091631 Lansdale & Five Points Apartments
129 Archon Financial 09-0001390 Cavalier Office Park - Building B
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130 GMACSLP 01-1027426 Colonial Apartments
131 GMACCM 27963 University Avenue Office Building
132 Archon Financial 09-0001389 Cavalier Office Park - Building A
133 GMACSLP 01-1024923 Trinity Towers, Brittany Apartments, Wagner Apts
133a GMACSLP 01-1024923-A Trinity Towers Apartments
133b GMACSLP 01-1024923-B Brittany Apartments
133c GMACSLP 01-1024923-C Wagner Apartments
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134 RFC 991091622 Federal Plaza Shopping Center
135 RFC 991091666 Parkwood Square Shopping Center
136 Deutsche Bank DBM13480 Alhambra Mobile Home Park
137 RFC 991091626 Carrollton/Del-Mar Apartments
138 RFC 991091624 Grand Manor Apartments
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139 GMACCM 27587 Airline Medical Office
140 GMACSLP 01-1027758 171 - 181 Market Street Office
141 GMACCM 27965 Congress Avenue Office Park I
142 RFC 991091635 Ath-Dara
143 RFC 11029249 Bridgewater Mews
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144 Deutsche Bank DBM13324 Foothills Business Park
145 RFC 991091644 Descanso Plaza Apartments
146 GMACSLP 01-1027009 Hudson Place Apartments
147 GMACSLP 01-1025837 Greenville Shopping Center
148 GMACCM 26252 Hunt Club Apartments
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149 GMACCM 28267 El Camino Real Courtyards
150 RFC 991091619 Bluebird Apartments
151 RFC 991091628 Wexford Apartments
152 GMACSLP 01-1026862 Beach AC Mini-Storage
153 GMACSLP 01-1026872 Palmetto Medical Park
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154 GMACCM 28261 Arcadia Business Center
155 RFC 991091627 South Lamar Retail
156 RFC 991091663 Wheatley Plaza Apartments
157 GMACSLP 01-1024063 100 East Main Office
158 GMACSLP 01-1027024 Patriot Self Storage
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159 GMACCM 27964 Beach Professional Plaza
160 GMACSLP 01-1027879 374 South 5th Street Apartments
161 RFC 991091645 210-230 West Nyack Road
162 GMACSLP 01-1023747 Independent Packaging Industrial Building
163 GMACCM 28992 Brentstone Apartments
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164 RFC 991091650 Metacom Apartments
165 RFC 991091634 Oak Apartments
166 RFC 991091649 Metacom Retail
167 GMACSLP 01-1028782 367 South 5th Street Multifamily
168 RFC 11029241 La Comercia
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169 RFC 991091623 Plant City Shopping Center
170 GMACSLP 01-1028014 Fairfield Apartments
171 RFC 991091655 Southern Acres MHP
172 RFC 991091651 Willow Lane Apartments
173 RFC 991091665 Huffmeister Plaza
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174 RFC 991091625 Belmont Square
175 RFC 991091658 15-17 Massasoit Ave.
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</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CONTROL
NUMBER PROPERTY TYPE ADDRESS
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1 Anchored Retail 5000 Arizona Mills Circle
2 Anchored Retail 300 Monticello Avenue
3 Office 1999 Broadway
4 Lodging
4a Lodging 2980 Highway 150
4b Lodging 6901 Arvada Avenue, N.E.
4c Lodging 940 International Drive
4d Lodging 4811 West Main Street
4e Lodging 2455 South Beulah Boulevard
4f Lodging 12001 Chase Plaza Drive
4g Lodging 7855 Wolf River Parkway
4h Lodging 900 Mays Landing Road
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5 Multifamily 201 East 14th Street
6 Multifamily 4600 St. Croix Lane
7 Multifamily 6990 N.W. 186th Street
8 Anchored Retail
8a Anchored Retail 120 Hale Road
8b Anchored Retail 1505 South Washington Street
8c Anchored Retail 40 Cumberland Avenue
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9 Multifamily 5055 West Hacienda Avenue
10 Retail 201 East 86th Street
11 Multifamily 520 P Street, 1451 3rd Street
12 Anchored Retail 4250-4360 East Main Street & 4687-4731 Telephone Road
13 Multifamily 5757 Five Flags Boulevard
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14 Anchored Retail
14a Anchored Retail 821 King George Boulevard
14b Anchored Retail 760 US Highway 378
14c Anchored Retail 115 Willbrook Boulevard
14d Anchored Retail 1338 North Way (US Hwy 17)
-----------------------------------------------------------------------------------------------------------------------------------
15 Office 7501 Greenway Center Drive
16 Multifamily 701 Brittany Lakes Lane
17 Office 2626 Howell Street
18 Anchored Retail 3978 Cherry Avenue
19 Multifamily 900 Golden Horseshoe Circle
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20 Anchored Retail 6100 - 6154 Westheimer Road
21 Office 8301, 8401, & 8501 Golden Valley Road
22 Multifamily 29 Foster Drive
23 Anchored Retail 3640-3660 Atlanta Highway
24 Multifamily 6033 DeZavala Road
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25 Multifamily West Union Avenue
26 Office 2 North Charles
27 Multifamily 1349 Horizon Ridge Parkway
28 Lodging 136 Marsh Hill Road
29 Anchored Retail 6441 E. Mockingbird Lane
-----------------------------------------------------------------------------------------------------------------------------------
30 Office 101 North Main Street
31 Lodging 1406 Beers School Road
32 Office 6504 International Parkway
33 Retail 9629-9703 Lee Highway
34 Anchored Retail 2090 Lincoln Highway East
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35 Industrial 40949 Encyclopedia Circle
36 Mixed Use 1200 Pacific Avenue
37 Anchored Retail 40335-40355 Winchester Road
38 Retail One Porter Square
39 Multifamily 220 First Street
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40 Lodging 3 Technology Drive
41 Anchored Retail 333 Dominion Blvd./1620 Cedar Road
42 Multifamily 2255 Friday Court #225
43 Multifamily 7373 Ridge Avenue
44 Multifamily 3300 Parker Lane
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45 Multifamily 9127 N. Potter Road
46 Office 265 East 100 South Street
47 Office 1109 & 1211 W. Myrtle
48 Multifamily 6350 MeadowVista
49 Industrial 15940-16056 Amar Rd., 15940-16063 Kaplan Avenue
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50 Lodging 2700 Hoppe Trail
51 Multifamily 619 West Orlando Avenue
52 Anchored Retail 94 West Belle Mill Road
53 Lodging 2750 Slater Road
54 Multifamily 5496 Fitness Circle
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55 Anchored Retail 1788 East Broad Avenue
56 Office 3535-3625 40th Avenue Northwest
57 Retail 31911-31991 Dove Canyon Drive
58 Multifamily 49330 Carlos Road
59 Multifamily 1701 East Don Carlos Avenue
-----------------------------------------------------------------------------------------------------------------------------------
60 Lodging 66 Zephyr Road
61 Retail 3845 Bayshore Road
62 Office 1291 & 1295 East Hillsdale Boulevard
63 Multifamily 8301 Presidents Drive
64 Multifamily
64a Multifamily 2100 Westbury Court
64b Multifamily 2110 Westbury Court
64c Multifamily 3506 Newkirk Avenue
-----------------------------------------------------------------------------------------------------------------------------------
65 Multifamily 10 Pennyfield Avenue
66 Multifamily 1600-1768 Crystal Lake Drive
67 Retail 2301 East Fowler Avenue
68 Multifamily 2555 Friday Court #225
69 Anchored Retail 230 Kelly Street
-----------------------------------------------------------------------------------------------------------------------------------
70 Office 6305 & 6309 Carpinteria Avenue
71 Retail 2911 Florence Avenue
72 Industrial 10103 Residency Road
73 Anchored Retail N. Antrim Way (Route 11) at Walter Avenue
74 Multifamily 2400 Wickersham Lane
-----------------------------------------------------------------------------------------------------------------------------------
75 Lodging 80 Northeast Loop 410
76 Industrial 5601 North Powerline Road
77 Office 1110-1130 Main Street
78 Anchored Retail 2020 Craig Road
79 Multifamily 900-986 Podva Road
-----------------------------------------------------------------------------------------------------------------------------------
80 Anchored Retail 1312 West Granthan Street
81 Lodging 1592 Mall Drive
82 Office 1800 Rockaway Avenue
83 Lodging 88 Northeast Loop 410
84 Industrial 531 & 561 E. Elliot Rd and 574 E. Alamo Dr.
-----------------------------------------------------------------------------------------------------------------------------------
85 Industrial 8600 Jefferson Street, NE
86 Multifamily
86a Multifamily 975, 1005, 1015 39th Street
86b Multifamily 1832 - 1836 Sutton Court
86c Multifamily 3370 - 3400 Winston Drive
86d Multifamily 3902 25th Street
86e Multifamily 2005 - 2007 Kennedy Drive
86f Multifamily 2104 18th Avenue
-----------------------------------------------------------------------------------------------------------------------------------
87 Anchored Retail 1419 East Andrews Avenue
88 Retail 3200 Mall Loop Drive
89 Multifamily 16410 SE 5th Street
90 Lodging 1170 Winterson Road
91 Mobile Home Park 245 Lancaster Drive
-----------------------------------------------------------------------------------------------------------------------------------
92 Multifamily 10901 & 11061 Village Bend Lane
93 Various
93a Office 77 Arkay Drive
93b Industrial 89 Cabot Court
94 Self-Storage 9300 Sportsman Club Road NE
-----------------------------------------------------------------------------------------------------------------------------------
95 Multifamily 119 19th Ave. E
96 Anchored Retail 3901 Cleveland Highway
97 Office 702 South Hill Park Drive
98 Anchored Retail 1895 Adam Street
99 Multifamily 7102-7196 Lodgepole Drive, SE
-----------------------------------------------------------------------------------------------------------------------------------
100 Multifamily 2476 Atlantis Drive
101 Multifamily 2129 Muir Field Road
102 Industrial 333 Metro Park
103 Industrial 3625-3775 West Teco Avenue
104 Anchored Retail 1145 S. Camino Del Rio
-----------------------------------------------------------------------------------------------------------------------------------
105 Office 5999 Summerside Drive
106 Office 5930, 5940 & 5980 Hamilton Blvd.
107 Retail 1425 McCulloch Boulevard
108 Retail 108 Newbury Street (Route 1)
109 Mobile Home Park 7535 Northeast River Road
-----------------------------------------------------------------------------------------------------------------------------------
110 Office 2731 & 2811 Lemmon Avenue
111 Office 1404 South Central Avenue
112 Multifamily 125 Interstate Highway 10 North
113 Office 3816 So.1st St.& 3809 So.2nd St.
114 Anchored Retail 2604 - 2606 Route 130 North
-----------------------------------------------------------------------------------------------------------------------------------
115 Multifamily 5629-5669 Beacon Street
116 Anchored Retail 220 East Marlboro Road
117 Anchored Retail 25285 Madison Avenue
118 Retail 9735 Old St. Augustine Road
119 Multifamily 6622 - 6766 North Fessenden Street
-----------------------------------------------------------------------------------------------------------------------------------
120 Multifamily 4954 West Pine Boulevard
121 Anchored Retail 11705 Carolina Place Parkway
122 Industrial 7419-7431 Lindbergh Drive
123 Multifamily 8206 Bunche Drive
124 Industrial 6845 Escondido Street
-----------------------------------------------------------------------------------------------------------------------------------
125 Retail 173 Main Street and 10 Catherine Street
126 Multifamily 1231 Walnut Street
127 Multifamily 4201 Oglethorpe Street
128 Multifamily 2713, 2719 Azalea Gardens Rd & 1209-1213 Norview Ave
129 Office 51 Cavalier Boulevard
-----------------------------------------------------------------------------------------------------------------------------------
130 Multifamily 165 Pearl Street
131 Office 7373 University Avenue
132 Office 47 Cavalier Boulevard
133 Multifamily
133a Multifamily 34 - 38 Vernon Street
133b Multifamily 44 New Britain Avenue
133c Multifamily 59 Webster Street
-----------------------------------------------------------------------------------------------------------------------------------
134 Retail 1924-1960 S. Federal Highway
135 Retail 3010 Highway 30 West
136 Mobile Home Park 109 East Monterey Drive
137 Multifamily 1600 & 1610 Belt Line Drive
138 Multifamily 7405 W 123rd Street
-----------------------------------------------------------------------------------------------------------------------------------
139 Office 5990 Airline Drive
140 Office 171 - 181 Market Street
141 Office 1760 N. Congress Avenue
142 Multifamily 83-93 S. Lansdowne Avenue
143 Office 1952 Route 22 East
-----------------------------------------------------------------------------------------------------------------------------------
144 Industrial 16006 - 16016 Foothill Boulevard
145 Multifamily 11102 East 16th Avenue
146 Multifamily 5605, 5610, 5611, 5612 Hudson Street; 1517-1519 Matilda St.
147 Retail 2715 Traders Road
148 Multifamily 2211 West Hickory Street
-----------------------------------------------------------------------------------------------------------------------------------
149 Office 250 El Camino Real
150 Multifamily 900 - 908 Rice Street
151 Multifamily 430 Elm Street
152 Self-Storage 101 Central Road
153 Office 22023 State Road 7
-----------------------------------------------------------------------------------------------------------------------------------
154 Office 735 W. Duarte Road
155 Retail 2300 South Lamar Boulevard
156 Multifamily 5600 Market Street
157 Office 100 East Main Street and 101 East Water Street
158 Self-Storage 1144 Sigman Road
-----------------------------------------------------------------------------------------------------------------------------------
159 Office 12362 Beach Boulevard
160 Multifamily 374 South 5th Street
161 Industrial 210 - 230 West Nyack Road
162 Industrial 303 North Curry Pike
163 Multifamily 2712 Bartlett Avenue
-----------------------------------------------------------------------------------------------------------------------------------
164 Multifamily 400R Metacom Avenue
165 Multifamily 8904-8914 Temple Terrace Highway
166 Retail 390 Metacom Avenue
167 Multifamily 367 South 5th Street
168 Retail 5805 Lyons Avenue
-----------------------------------------------------------------------------------------------------------------------------------
169 Retail 1705-1707 Jim Redman Parkway
170 Multifamily 100 South Bowser Road
171 Mobile Home Park 3334 East Southern Avenue
172 Multifamily 3101-3111 Willow Lane
173 Retail 11302 Huffmeister Road
-----------------------------------------------------------------------------------------------------------------------------------
174 Retail 6347-6359 West Belmont Avenue
175 Multifamily 15-17 Massasoit Ave.
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CROSS
CONTROL COLLATERALIZED
NUMBER CITY STATE ZIP CODE GROUPS
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1 Tempe Arizona 85282
2 Norfolk Virginia 23510
3 Denver Colorado 80202
4
4a Hoover Alabama 35244
4b Albuquerque New Mexico 87110
4c Linthicum Heights Maryland 21090
4d Tampa Florida 33607
4e Flagstaff Arizona 86001
4f Forest Park Ohio 45240
4g Germantown Tennessee 38138
4h Somers Point New Jersey 08244
------------------------------------------------------------------------------------------------------------------------------------
5 New York New York 10003
6 Naples Florida 34109
7 Miami Florida 33015
8
8a Manchester Connecticut 06040
8b North Attleboro Massachusetts 02760
8c North Attleboro Massachusetts 02760
------------------------------------------------------------------------------------------------------------------------------------
9 Las Vegas Nevada 89118
10 New York New York 11028
11 Sacramento California 95814
12 Ventura California 93033
13 Orlando Florida 32822
------------------------------------------------------------------------------------------------------------------------------------
14
14a Savannah Georgia 31419
14b Lexington South Carolina 29072
14c Pawley's Island South Carolina 29585
14d Darien Georgia 31305
------------------------------------------------------------------------------------------------------------------------------------
15 Greenbelt Maryland 20770
16 Orlando Florida 32828
17 Dallas Texas 75204
18 Long Beach California 90807
19 Morrisville North Carolina 27560
------------------------------------------------------------------------------------------------------------------------------------
20 Houston Texas 77057
21 Golden Valley Minnesota 55427
22 Willimantic Connecticut 06226
23 Athens Georgia 30606
24 San Antonio Texas 78249
------------------------------------------------------------------------------------------------------------------------------------
25 Bound Brook New Jersey 08805
26 Baltimore Maryland 21201
27 Henderson Nevada 89012
28 Orange Connecticut 06477
29 Dallas Texas 75214
------------------------------------------------------------------------------------------------------------------------------------
30 Ann Arbor Michigan 48104
31 Moon Township Pennsylvania 15108
32 Plano Texas 75093
33 Fairfax Virginia 22031
34 East Lampeter Township Pennsylvania 17576
------------------------------------------------------------------------------------------------------------------------------------
35 Fremont California 94538
36 Santa Cruz California 95060
37 Temecula California 92591
38 Cambridge Massachusetts 02140
39 Kirkland Washington 98033
------------------------------------------------------------------------------------------------------------------------------------
40 Westborough Massachusetts 01581
41 Chesapeake Virginia 23322
42 West Melbourne Florida 32904 Group C
43 Philadelphia Pennsylvania 19128
44 Austin Texas 78741 Group F
------------------------------------------------------------------------------------------------------------------------------------
45 Des Plaines Illinois 60016
46 Salt Lake City Utah 84111
47 Boise Idaho 83702
48 Corpus Christi Texas 78414
49 City of Industry California 91744
------------------------------------------------------------------------------------------------------------------------------------
50 Round Rock Texas 78681
51 Normal Illinois 61761
52 Red Bluff California 96080
53 Morrisville North Carolina 27560
54 Orlando Florida 32839 Group C
------------------------------------------------------------------------------------------------------------------------------------
55 Rockingham North Carolina 28379
56 Rochester Minnesota 55901
57 Trabuco Canyon California 92679
58 Chesterfield Township Michigan 48045
59 Tempe Arizona 85281
------------------------------------------------------------------------------------------------------------------------------------
60 Williston Vermont 05495
61 Lower Township New Jersey 08204
62 Foster City California 94404
63 Swatara Township Pennsylvania 17111
64
64a Brooklyn New York 11225
64b Brooklyn New York 11225
64c Brooklyn New York 11225
------------------------------------------------------------------------------------------------------------------------------------
65 Bronx New York 10465
66 Corvallis Oregon 97333
67 Tampa Florida 33612
68 West Melbourne Florida 32904 Group C
69 Lake City South Carolina 29560
------------------------------------------------------------------------------------------------------------------------------------
70 Carpinteria California 93013
71 Los Angeles California 90255
72 Manassas Virginia 20110
73 Greencastle Pennsylvania 17225
74 Austin Texas 78741 Group F
------------------------------------------------------------------------------------------------------------------------------------
75 San Antonio Texas 78216
76 Fort Lauderdale Florida 33309
77 Cincinnati Ohio 45210
78 North Los Vegas Nevada 89031
79 Danville California 94526
------------------------------------------------------------------------------------------------------------------------------------
80 Goldsboro North Carolina 27530
81 Benton Harbor Michigan 49022
82 Hewlett New York 11557
83 San Antonio Texas 78216
84 Chandler Arizona 85225
------------------------------------------------------------------------------------------------------------------------------------
85 Albuquerque New Mexico 87113
86
86a Bettendorf Iowa 52722
86b Bettendorf Iowa 52722
86c Bettendorf Iowa 52722
86d Moline Illinois 61265
86e East Moline Illinois 61244
86f Moline Illinois 61265
------------------------------------------------------------------------------------------------------------------------------------
87 Henderson North Carolina 27536
88 Joliet Illinois 60432
89 Vancouver Washington 98684
90 Linthicum Maryland 21090
91 Reno Nevada 89506
------------------------------------------------------------------------------------------------------------------------------------
92 Houston Texas 77072
93
93a Hauppauge New York 11788
93b Hauppauge New York 11788
94 Bainbridge Island Washington 98110
------------------------------------------------------------------------------------------------------------------------------------
95 Seattle Washington 98112
96 Varnell Georgia 30721
97 Puyallup Washington 98373
98 Mankato Minnesota 56001
99 Grand Rapids Michigan 49548
------------------------------------------------------------------------------------------------------------------------------------
100 Ft. Pierce Florida 34981 Group C
101 Madison Wisconsin 53719
102 Rochester New York 14623
103 Las Vegas Nevada 89103
104 Durango Colorado 81301
------------------------------------------------------------------------------------------------------------------------------------
105 Dallas Texas 75252
106 Wescosville Pennsylvania 18106
107 Lake Havasu City Arizona 92083
108 Peabody Massachusetts 01960
109 Otsego Minnesota 55330
------------------------------------------------------------------------------------------------------------------------------------
110 Dallas Texas 75204
111 Kent Washington 98032
112 Beaumont Texas 77707
113 Austin Texas 78704
114 Cinnaminson New Jersey 08077
------------------------------------------------------------------------------------------------------------------------------------
115 Pittsburgh Pennsylvania 15217
116 Farmville North Carolina 27828
117 Murrieta California 92562
118 Jacksonville Florida 32257
119 Portland Oregon 97203
------------------------------------------------------------------------------------------------------------------------------------
120 St. Louis Missouri 63108
121 Pineville North Carolina 28134
122 Gaithersburg Maryland 20879
123 Dallas Texas 75243 Group B
124 Las Vegas Nevada 89119
------------------------------------------------------------------------------------------------------------------------------------
125 Norwalk Connecticut 06851
126 Philadelphia Pennsylvania 19107
127 Hyattsville Maryland 20781
128 Norfolk Virginia 23513
129 Florence Kentucky 41042
------------------------------------------------------------------------------------------------------------------------------------
130 Seymour Connecticut 06483
131 La Mesa California 92041 Group A
132 Florence Kentucky 41042
133
133a Hartford Connecticut 06106
133b Hartford Connecticut 06106
133c Hartford Connecticut 06106
------------------------------------------------------------------------------------------------------------------------------------
134 Stuart Florida 34994 Group D
135 Huntsville Texas 77340
136 Globe Arizona 85501
137 Carrollton Texas 75211
138 Apple Valley Minnesota 55124
------------------------------------------------------------------------------------------------------------------------------------
139 Houston Texas 77076
140 Paterson New Jersey 07505
141 West Palm Beach Florida 33409 Group A
142 Lansdowne Pennsylvania 19050
143 Bridgewater New Jersey 08807
------------------------------------------------------------------------------------------------------------------------------------
144 Irwindale California 91706
145 Aurora Colorado 80010
146 Dallas Texas 75206
147 Greenville Texas 75402
148 Denton Texas 76201
------------------------------------------------------------------------------------------------------------------------------------
149 Tustin California 92780
150 St. Paul Minnesota 55117
151 Pottstown Pennsylvania 19464
152 Indian Harbor Beach Florida 32937
153 Boca Raton Florida 33428
------------------------------------------------------------------------------------------------------------------------------------
154 Arcadia California 91007
155 Austin Texas 78704
156 Houston Texas 77020
157 Charlottesville Virginia 22902
158 Conyers Georgia 30012
------------------------------------------------------------------------------------------------------------------------------------
159 Stanton California 90680 Group A
160 Brooklyn New York 11211
161 West Nyack New York 10960
162 Bloomington Indiana 47404
163 Pascagoula Mississippi 39567
------------------------------------------------------------------------------------------------------------------------------------
164 Bristol Rhode Island 02809 Group E
165 Tampa Florida 33637
166 Bristol Rhode Island 02809 Group E
167 Brooklyn New York 11211
168 Houston Texas 77020
------------------------------------------------------------------------------------------------------------------------------------
169 Plant City Florida 33566 Group D
170 Richardson Texas 75081 Group B
171 Phoenix Arizona 85040
172 Bronx(Pelham Bay) New York 10461
173 Houston Texas 77065
------------------------------------------------------------------------------------------------------------------------------------
174 Chicago Illinois 60618
175 Bristol Rhode Island 02809
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
% OF AGGREGATE CUMULATIVE % OF
CONTROL ORIGINAL CUT-OFF DATE INITIAL POOL INITIAL POOL
NUMBER RELATED GROUPS BALANCE ($) BALANCE ($) BALANCE BALANCE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1 146,000,000 145,831,430 11.44 11.44
2 101,000,000 101,000,000 7.92 19.36
3 50,000,000 49,966,246 3.92 23.28
4 31,500,000 31,468,201 2.47 25.75
4a
4b
4c
4d
4e
4f
4g
4h
------------------------------------------------------------------------------------------------------------------------------------
5 30,000,000 29,978,826 2.35 28.10
6 29,800,000 29,800,000 2.34 30.44
7 28,400,000 28,340,494 2.22 32.67
8 Group 1 28,350,000 28,331,922 2.22 34.89
8a
8b
8c
------------------------------------------------------------------------------------------------------------------------------------
9 25,500,000 25,472,358 2.00 36.89
10 20,000,000 19,986,797 1.57 38.45
11 19,600,000 19,556,631 1.53 39.99
12 19,500,000 19,457,892 1.53 41.51
13 Group 8 18,400,000 18,378,727 1.44 42.96
------------------------------------------------------------------------------------------------------------------------------------
14 18,273,900 18,243,221 1.43 44.39
14a
14b
14c
14d
------------------------------------------------------------------------------------------------------------------------------------
15 18,100,000 18,068,851 1.42 45.81
16 Group 8 15,850,000 15,831,186 1.24 47.05
17 15,280,000 15,252,319 1.20 48.24
18 15,200,000 15,174,418 1.19 49.43
19 Group 8 15,100,000 15,082,077 1.18 50.62
------------------------------------------------------------------------------------------------------------------------------------
20 14,950,000 14,939,887 1.17 51.79
21 14,000,000 13,947,530 1.09 52.88
22 14,000,000 13,976,203 1.10 53.98
23 13,300,000 13,286,010 1.04 55.02
24 13,150,000 13,150,000 1.03 56.05
------------------------------------------------------------------------------------------------------------------------------------
25 Group 1 12,960,000 12,960,000 1.02 57.07
26 12,800,000 12,786,275 1.00 58.07
27 12,200,000 12,174,928 0.96 59.03
28 Group 4 12,190,000 12,123,647 0.95 59.98
29 12,050,000 12,029,212 0.94 60.92
------------------------------------------------------------------------------------------------------------------------------------
30 11,890,000 11,882,403 0.93 61.86
31 10,500,000 10,481,894 0.82 62.68
32 10,350,000 10,343,223 0.81 63.49
33 9,600,000 9,579,724 0.75 64.24
34 9,500,000 9,480,693 0.74 64.98
------------------------------------------------------------------------------------------------------------------------------------
35 9,500,000 9,477,053 0.74 65.73
36 9,465,800 9,455,001 0.74 66.47
37 9,000,000 8,990,766 0.71 67.18
38 8,885,000 8,833,493 0.69 67.87
39 8,700,000 8,694,103 0.68 68.55
------------------------------------------------------------------------------------------------------------------------------------
40 Group 4 8,630,000 8,583,025 0.67 69.22
41 7,280,000 7,272,151 0.57 69.79
42 6,820,000 6,805,233 0.53 70.33
43 6,700,000 6,688,696 0.52 70.85
44 6,600,000 6,593,077 0.52 71.37
------------------------------------------------------------------------------------------------------------------------------------
45 6,500,000 6,483,295 0.51 71.88
46 6,500,000 6,495,813 0.51 72.39
47 6,400,000 6,395,852 0.50 72.89
48 6,160,000 6,153,139 0.48 73.37
49 6,150,000 6,139,726 0.48 73.85
------------------------------------------------------------------------------------------------------------------------------------
50 6,100,000 6,083,592 0.48 74.33
51 6,100,000 6,085,660 0.48 74.81
52 5,840,000 5,828,362 0.46 75.27
53 5,800,000 5,786,500 0.45 75.72
54 5,725,000 5,712,604 0.45 76.17
------------------------------------------------------------------------------------------------------------------------------------
55 5,570,000 5,566,570 0.44 76.60
56 5,550,000 5,540,752 0.43 77.04
57 5,550,000 5,546,720 0.44 77.47
58 5,480,000 5,470,868 0.43 77.90
59 5,400,000 5,393,921 0.42 78.33
------------------------------------------------------------------------------------------------------------------------------------
60 5,200,000 5,185,037 0.41 78.73
61 5,100,000 5,094,598 0.40 79.13
62 5,000,000 4,994,856 0.39 79.53
63 5,000,000 4,996,645 0.39 79.92
64 4,975,000 4,965,197 0.39 80.31
64a
64b
64c
------------------------------------------------------------------------------------------------------------------------------------
65 4,975,000 4,965,878 0.39 80.70
66 4,850,000 4,840,999 0.38 81.08
67 4,808,000 4,803,377 0.38 81.45
68 4,805,000 4,794,596 0.38 81.83
69 4,800,000 4,797,044 0.38 82.21
------------------------------------------------------------------------------------------------------------------------------------
70 4,700,000 4,677,703 0.37 82.57
71 4,650,000 4,641,273 0.36 82.94
72 4,500,000 4,482,939 0.35 83.29
73 4,500,000 4,491,743 0.35 83.64
74 4,450,000 4,445,332 0.35 83.99
------------------------------------------------------------------------------------------------------------------------------------
75 Group 2 4,400,000 4,385,061 0.34 84.33
76 4,200,000 4,195,643 0.33 84.66
77 4,125,000 4,116,011 0.32 84.99
78 4,100,000 4,097,353 0.32 85.31
79 4,016,000 4,011,196 0.31 85.62
------------------------------------------------------------------------------------------------------------------------------------
80 3,850,000 3,839,200 0.30 85.92
81 Group 2 3,800,000 3,786,431 0.30 86.22
82 3,765,000 3,755,960 0.29 86.51
83 Group 2 3,700,000 3,687,438 0.29 86.80
84 3,550,000 3,546,317 0.28 87.08
------------------------------------------------------------------------------------------------------------------------------------
85 3,500,000 3,496,165 0.27 87.36
86 3,450,000 3,443,562 0.27 87.63
86a
86b
86c
86d
86e
86f
------------------------------------------------------------------------------------------------------------------------------------
87 3,400,000 3,396,048 0.27 87.89
88 3,400,000 3,388,080 0.27 88.16
89 3,300,000 3,296,462 0.26 88.42
90 3,300,000 3,288,994 0.26 88.67
91 3,260,000 3,253,412 0.26 88.93
------------------------------------------------------------------------------------------------------------------------------------
92 3,225,000 3,217,979 0.25 89.18
93 3,201,000 3,197,651 0.25 89.43
93a
93b
94 3,200,000 3,194,811 0.25 89.68
------------------------------------------------------------------------------------------------------------------------------------
95 3,195,000 3,192,777 0.25 89.93
96 3,150,000 3,146,768 0.25 90.18
97 3,080,000 3,077,983 0.24 90.42
98 3,000,000 2,995,161 0.23 90.66
99 3,000,000 2,994,976 0.23 90.89
------------------------------------------------------------------------------------------------------------------------------------
100 2,950,000 2,943,612 0.23 91.12
101 2,925,000 2,919,727 0.23 91.35
102 2,900,000 2,884,745 0.23 91.58
103 2,860,000 2,854,794 0.22 91.80
104 2,640,000 2,638,236 0.21 92.01
------------------------------------------------------------------------------------------------------------------------------------
105 2,530,000 2,527,346 0.20 92.21
106 2,500,000 2,493,148 0.20 92.40
107 2,480,000 2,475,119 0.19 92.60
108 2,428,000 2,416,032 0.19 92.79
109 2,400,000 2,391,847 0.19 92.98
------------------------------------------------------------------------------------------------------------------------------------
110 2,400,000 2,396,207 0.19 93.16
111 2,350,000 2,348,452 0.18 93.35
112 2,275,000 2,270,127 0.18 93.53
113 2,243,000 2,241,573 0.18 93.70
114 2,242,000 2,236,920 0.18 93.88
------------------------------------------------------------------------------------------------------------------------------------
115 2,200,000 2,195,529 0.17 94.05
116 2,150,000 2,146,217 0.17 94.22
117 2,100,000 2,098,749 0.16 94.38
118 2,015,000 2,009,661 0.16 94.54
119 2,000,000 1,994,979 0.16 94.70
------------------------------------------------------------------------------------------------------------------------------------
120 2,000,000 1,995,716 0.16 94.85
121 2,000,000 1,996,709 0.16 95.01
122 2,000,000 1,996,126 0.16 95.17
123 1,960,000 1,955,735 0.15 95.32
124 1,955,000 1,953,756 0.15 95.47
------------------------------------------------------------------------------------------------------------------------------------
125 1,900,000 1,881,300 0.15 95.62
126 1,791,000 1,784,821 0.14 95.76
127 1,750,000 1,743,813 0.14 95.90
128 1,730,000 1,718,602 0.13 96.03
129 Group 9 1,720,000 1,717,155 0.13 96.17
------------------------------------------------------------------------------------------------------------------------------------
130 1,700,000 1,696,238 0.13 96.30
131 1,685,000 1,682,107 0.13 96.43
132 Group 9 1,680,000 1,677,221 0.13 96.56
133 1,580,000 1,572,308 0.12 96.69
133a
133b
133c
------------------------------------------------------------------------------------------------------------------------------------
134 1,510,000 1,503,586 0.12 96.80
135 1,500,000 1,495,877 0.12 96.92
136 1,500,000 1,499,181 0.12 97.04
137 1,482,000 1,475,493 0.12 97.16
138 Group 7 1,380,000 1,376,391 0.11 97.26
------------------------------------------------------------------------------------------------------------------------------------
139 1,350,000 1,349,161 0.11 97.37
140 1,342,000 1,339,900 0.11 97.47
141 1,340,000 1,337,700 0.10 97.58
142 1,336,000 1,330,267 0.10 97.68
143 1,300,000 1,297,834 0.10 97.79
------------------------------------------------------------------------------------------------------------------------------------
144 1,255,000 1,252,909 0.10 97.88
145 1,219,000 1,210,266 0.09 97.98
146 1,200,000 1,196,844 0.09 98.07
147 1,160,000 1,157,388 0.09 98.16
148 1,100,000 1,092,670 0.09 98.25
------------------------------------------------------------------------------------------------------------------------------------
149 1,100,000 1,098,192 0.09 98.34
150 Group 7 1,100,000 1,078,500 0.08 98.42
151 1,100,000 1,095,911 0.09 98.51
152 1,000,000 993,364 0.08 98.58
153 1,000,000 998,030 0.08 98.66
------------------------------------------------------------------------------------------------------------------------------------
154 1,000,000 998,471 0.08 98.74
155 1,000,000 995,843 0.08 98.82
156 1,000,000 995,926 0.08 98.90
157 977,000 972,478 0.08 98.97
158 955,000 951,204 0.07 99.05
------------------------------------------------------------------------------------------------------------------------------------
159 950,000 948,369 0.07 99.12
160 Group 3 940,000 938,394 0.07 99.20
161 920,000 904,541 0.07 99.27
162 875,000 872,266 0.07 99.33
163 840,000 839,427 0.07 99.40
------------------------------------------------------------------------------------------------------------------------------------
164 Group 10 800,000 798,215 0.06 99.46
165 790,000 786,737 0.06 99.53
166 Group 10 735,000 732,028 0.06 99.58
167 Group 3 723,000 721,765 0.06 99.64
168 665,000 664,045 0.05 99.69
------------------------------------------------------------------------------------------------------------------------------------
169 655,000 652,218 0.05 99.74
170 640,000 638,819 0.05 99.79
171 635,000 632,405 0.05 99.84
172 591,000 589,904 0.05 99.89
173 550,000 546,974 0.04 99.93
------------------------------------------------------------------------------------------------------------------------------------
174 510,000 507,960 0.04 99.97
175 Group 10 368,000 367,295 0.03 100.00
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MORTGAGE INTEREST ORIGINAL INTEREST
CONTROL RATE SERVICING ACCRUAL ONLY PERIOD
NUMBER (%) FEE RATE (%) METHOD AMORTIZATION TYPE (MOS.)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1 7.89500 0.0318 Actual / 360 Amortizing Balloon
2 7.43700 0.0318 Actual / 360 Amortizing Balloon
3 7.97000 0.0518 Actual / 360 Hyper-Amortizing
4 8.44385 0.1268 Actual / 360 Hyper-Amortizing
4a
4b
4c
4d
4e
4f
4g
4h
------------------------------------------------------------------------------------------------------------------------------------
5 7.75000 0.0518 Actual / 360 Hyper-Amortizing
6 8.33000 0.0818 Actual / 360 Interest Only ,Then Amortizing 24
7 8.28000 0.0518 Actual / 360 Hyper-Amortizing
8 8.25000 0.1268 Actual / 360 Amortizing Balloon
8a
8b
8c
------------------------------------------------------------------------------------------------------------------------------------
9 8.13000 0.0518 Actual / 360 Hyper-Amortizing
10 8.08000 0.0518 Actual / 360 Hyper-Amortizing
11 8.08000 0.0768 Actual / 360 Amortizing Balloon
12 8.17000 0.0518 Actual / 360 Amortizing Balloon
13 7.89000 0.0518 Actual / 360 Amortizing Balloon
------------------------------------------------------------------------------------------------------------------------------------
14 8.29000 0.0518 Actual / 360 Hyper-Amortizing
14a
14b
14c
14d
------------------------------------------------------------------------------------------------------------------------------------
15 8.19000 0.0518 Actual / 360 Hyper-Amortizing
16 7.79000 0.0518 Actual / 360 Amortizing Balloon
17 7.98000 0.0518 Actual / 360 Amortizing Balloon
18 8.28000 0.0518 Actual / 360 Amortizing Balloon
19 7.79000 0.0518 Actual / 360 Amortizing Balloon
------------------------------------------------------------------------------------------------------------------------------------
20 7.96000 0.0518 Actual / 360 Amortizing Balloon
21 8.73000 0.0868 Actual / 360 Hyper-Amortizing
22 8.24000 0.0518 Actual / 360 Amortizing Balloon
23 8.24000 0.0868 Actual / 360 Hyper-Amortizing
24 8.05000 0.0868 Actual / 360 Interest Only ,Then Amortizing 12
------------------------------------------------------------------------------------------------------------------------------------
25 8.06000 0.1268 Actual / 360 Interest Only ,Then Amortizing 10
26 8.17000 0.0518 Actual / 360 Amortizing Balloon
27 8.35000 0.0518 Actual / 360 Amortizing Balloon
28 8.93000 0.0868 Actual / 360 Hyper-Amortizing
29 8.18000 0.1268 Actual / 360 Amortizing Balloon
------------------------------------------------------------------------------------------------------------------------------------
30 8.24000 0.0818 Actual / 360 Amortizing Balloon
31 8.45000 0.1268 Actual / 360 Hyper-Amortizing
32 8.12000 0.1218 Actual / 360 Amortizing Balloon
33 8.45000 0.1268 Actual / 360 Amortizing Balloon
34 8.39000 0.0518 Actual / 360 Amortizing Balloon
------------------------------------------------------------------------------------------------------------------------------------
35 8.41000 0.0868 Actual / 360 Hyper-Amortizing
36 7.94000 0.0518 Actual / 360 Amortizing Balloon
37 8.33000 0.1018 Actual / 360 Amortizing Balloon
38 8.43000 0.0868 Actual / 360 Amortizing Balloon
39 7.95000 0.0518 Actual / 360 Amortizing Balloon
------------------------------------------------------------------------------------------------------------------------------------
40 8.93000 0.0868 Actual / 360 Hyper-Amortizing
41 8.15000 0.0518 Actual / 360 Hyper-Amortizing
42 8.16000 0.0868 Actual / 360 Amortizing Balloon
43 8.27000 0.0518 Actual / 360 Amortizing Balloon
44 8.25000 0.0518 Actual / 360 Amortizing Balloon
------------------------------------------------------------------------------------------------------------------------------------
45 8.20000 0.0868 Actual / 360 Amortizing Balloon
46 8.20000 0.0518 Actual / 360 Hyper-Amortizing
47 8.17000 0.1018 Actual / 360 Amortizing Balloon
48 8.03000 0.0518 Actual / 360 Amortizing Balloon
49 8.31000 0.0518 Actual / 360 Amortizing Balloon
------------------------------------------------------------------------------------------------------------------------------------
50 8.50000 0.1268 Actual / 360 Hyper-Amortizing
51 8.50000 0.1268 Actual / 360 Amortizing Balloon
52 8.46000 0.0518 Actual / 360 Amortizing Balloon
53 9.25000 0.1268 Actual / 360 Hyper-Amortizing
54 8.16000 0.0868 Actual / 360 Amortizing Balloon
------------------------------------------------------------------------------------------------------------------------------------
55 8.42000 0.0518 Actual / 360 Hyper-Amortizing
56 8.32000 0.0518 Actual / 360 Amortizing Balloon
57 8.62000 0.0518 Actual / 360 Hyper-Amortizing
58 8.32000 0.0868 Actual / 360 Amortizing Balloon
59 7.99000 0.1268 Actual / 360 Amortizing Balloon
------------------------------------------------------------------------------------------------------------------------------------
60 8.75000 0.1268 Actual / 365 Hyper-Amortizing
61 8.21500 0.1268 Actual / 360 Amortizing Balloon
62 8.32000 0.0518 Actual / 360 Amortizing Balloon
63 8.00000 0.1268 Actual / 360 Amortizing Balloon
64 8.50000 0.1268 Actual / 360 Amortizing Balloon
64a
64b
64c
------------------------------------------------------------------------------------------------------------------------------------
65 8.75000 0.0518 Actual / 360 Amortizing Balloon
66 7.88000 0.0518 Actual / 360 Amortizing Balloon
67 8.56000 0.0868 Actual / 360 Amortizing Balloon
68 8.16000 0.0868 Actual / 360 Amortizing Balloon
69 8.42000 0.0518 Actual / 360 Hyper-Amortizing
------------------------------------------------------------------------------------------------------------------------------------
70 8.91000 0.0868 Actual / 360 Amortizing Balloon
71 8.67000 0.1268 Actual / 360 Amortizing Balloon
72 8.69000 0.1018 Actual / 360 Amortizing Balloon
73 8.14000 0.0518 Actual / 360 Amortizing Balloon
74 8.25000 0.0518 Actual / 360 Amortizing Balloon
------------------------------------------------------------------------------------------------------------------------------------
75 8.56250 0.1268 Actual / 360 Hyper-Amortizing
76 8.29000 0.0518 Actual / 360 Amortizing Balloon
77 8.36000 0.1218 Actual / 360 Amortizing Balloon
78 8.19000 0.0518 Actual / 360 Amortizing Balloon
79 7.76000 0.0518 Actual / 360 Amortizing Balloon
------------------------------------------------------------------------------------------------------------------------------------
80 8.71000 0.0518 Actual / 360 Amortizing Balloon
81 8.31250 0.1268 Actual / 360 Hyper-Amortizing
82 8.43000 0.1268 Actual / 360 Amortizing Balloon
83 8.56250 0.1268 Actual / 360 Hyper-Amortizing
84 8.29000 0.0818 Actual / 360 Amortizing Balloon
------------------------------------------------------------------------------------------------------------------------------------
85 8.09000 0.1268 Actual / 360 Amortizing Balloon
86 8.69000 0.1268 Actual / 360 Amortizing Balloon
86a
86b
86c
86d
86e
86f
------------------------------------------------------------------------------------------------------------------------------------
87 7.87000 0.0518 Actual / 360 Amortizing Balloon
88 8.36000 0.0868 Actual / 360 Hyper-Amortizing
89 8.17000 0.0518 Actual / 360 Amortizing Balloon
90 8.65000 0.1268 Actual / 360 Hyper-Amortizing
91 8.41000 0.0868 Actual / 360 Amortizing Balloon
------------------------------------------------------------------------------------------------------------------------------------
92 8.14000 0.0868 Actual / 360 Amortizing Balloon
93 8.26000 0.0518 Actual / 360 Amortizing Balloon
93a
93b
94 8.75000 0.1268 Actual / 360 Amortizing Balloon
------------------------------------------------------------------------------------------------------------------------------------
95 7.82000 0.0518 Actual / 360 Amortizing Balloon
96 8.33000 0.0818 Actual / 360 Amortizing Balloon
97 8.12000 0.0518 Actual / 360 Amortizing Balloon
98 8.45000 0.0868 Actual / 360 Amortizing Balloon
99 8.30000 0.1268 Actual / 360 Amortizing Balloon
------------------------------------------------------------------------------------------------------------------------------------
100 8.16000 0.0868 Actual / 360 Fully Amortizing
101 8.00000 0.0518 Actual / 360 Amortizing Balloon
102 8.44000 0.0868 Actual / 360 Amortizing Balloon
103 8.18000 0.0518 Actual / 360 Amortizing Balloon
104 8.02000 0.0518 Actual / 360 Amortizing Balloon
------------------------------------------------------------------------------------------------------------------------------------
105 8.25000 0.0518 Actual / 360 Amortizing Balloon
106 8.40000 0.0518 Actual / 360 Amortizing Balloon
107 9.06000 0.1268 Actual / 360 Amortizing Balloon
108 8.76000 0.0868 Actual / 360 Amortizing Balloon
109 8.56000 0.0868 Actual / 360 Amortizing Balloon
------------------------------------------------------------------------------------------------------------------------------------
110 8.53000 0.0518 Actual / 360 Amortizing Balloon
111 8.09000 0.0518 Actual / 360 Amortizing Balloon
112 8.20000 0.1268 Actual / 360 Amortizing Balloon
113 8.26000 0.0518 Actual / 360 Hyper-Amortizing
114 8.62000 0.0868 Actual / 360 Amortizing Balloon
------------------------------------------------------------------------------------------------------------------------------------
115 8.39000 0.0868 Actual / 360 Amortizing Balloon
116 8.10000 0.0518 Actual / 360 Hyper-Amortizing
117 8.58000 0.0518 Actual / 360 Amortizing Balloon
118 8.58000 0.0868 Actual / 360 Amortizing Balloon
119 8.28000 0.1268 Actual / 360 Amortizing Balloon
------------------------------------------------------------------------------------------------------------------------------------
120 8.20000 0.1268 Actual / 360 Amortizing Balloon
121 8.37000 0.1118 Actual / 360 Amortizing Balloon
122 8.56000 0.1018 Actual / 360 Amortizing Balloon
123 8.75000 0.1268 Actual / 360 Amortizing Balloon
124 8.26000 0.0518 Actual / 360 Amortizing Balloon
------------------------------------------------------------------------------------------------------------------------------------
125 8.90000 0.0868 Actual / 360 Hyper-Amortizing
126 8.41500 0.0868 Actual / 360 Amortizing Balloon
127 7.87000 0.0868 Actual / 360 Amortizing Balloon
128 8.01000 0.0868 Actual / 360 Amortizing Balloon
129 8.35000 0.1218 Actual / 360 Amortizing Balloon
------------------------------------------------------------------------------------------------------------------------------------
130 8.08000 0.1268 Actual / 360 Amortizing Balloon
131 8.20000 0.1268 Actual / 360 Amortizing Balloon
132 8.35000 0.1218 Actual / 360 Amortizing Balloon
133 8.82000 0.1268 Actual / 360 Amortizing Balloon
133a
133b
133c
------------------------------------------------------------------------------------------------------------------------------------
134 8.42000 0.0868 Actual / 360 Amortizing Balloon
135 8.78000 0.0868 Actual / 360 Amortizing Balloon
136 9.00000 0.0518 Actual / 360 Amortizing Balloon
137 8.28000 0.0868 Actual / 360 Amortizing Balloon
138 8.14000 0.0868 Actual / 360 Amortizing Balloon
------------------------------------------------------------------------------------------------------------------------------------
139 8.37500 0.1268 Actual / 360 Amortizing Balloon
140 8.57000 0.2518 Actual / 360 Amortizing Balloon
141 8.20000 0.1268 Actual / 360 Amortizing Balloon
142 8.39000 0.0868 Actual / 360 Amortizing Balloon
143 8.32000 0.0868 Actual / 360 Amortizing Balloon
------------------------------------------------------------------------------------------------------------------------------------
144 8.32000 0.0518 Actual / 360 Amortizing Balloon
145 8.37000 0.0868 Actual / 360 Amortizing Balloon
146 8.12000 0.1268 Actual / 360 Amortizing Balloon
147 8.64000 0.2518 Actual / 360 Amortizing Balloon
148 8.73000 0.1268 Actual / 360 Amortizing Balloon
------------------------------------------------------------------------------------------------------------------------------------
149 8.37500 0.1268 Actual / 360 Amortizing Balloon
150 8.10000 0.0868 Actual / 360 Amortizing Balloon
151 8.11000 0.0868 Actual / 360 Amortizing Balloon
152 8.75000 0.2518 Actual / 360 Amortizing Balloon
153 8.50000 0.2518 Actual / 360 Amortizing Balloon
------------------------------------------------------------------------------------------------------------------------------------
154 8.66000 0.1268 Actual / 360 Amortizing Balloon
155 8.54000 0.0868 Actual / 360 Amortizing Balloon
156 8.63500 0.0868 Actual / 360 Amortizing Balloon
157 9.00000 0.2518 Actual / 360 Amortizing Balloon
158 8.75000 0.2518 Actual / 360 Amortizing Balloon
------------------------------------------------------------------------------------------------------------------------------------
159 8.20000 0.1268 Actual / 360 Amortizing Balloon
160 8.22000 0.2518 Actual / 360 Amortizing Balloon
161 9.63000 0.0868 Actual / 360 Fully Amortizing
162 8.77000 0.1268 Actual / 360 Amortizing Balloon
163 7.92000 0.1268 Actual / 360 Amortizing Balloon
------------------------------------------------------------------------------------------------------------------------------------
164 8.67000 0.0868 Actual / 360 Amortizing Balloon
165 8.57000 0.0868 Actual / 360 Amortizing Balloon
166 8.67000 0.0868 Actual / 360 Amortizing Balloon
167 8.22000 0.2518 Actual / 360 Amortizing Balloon
168 8.90000 0.0868 Actual / 360 Amortizing Balloon
------------------------------------------------------------------------------------------------------------------------------------
169 8.42000 0.0868 Actual / 360 Amortizing Balloon
170 9.25000 0.2518 Actual / 360 Amortizing Balloon
171 8.62000 0.0868 Actual / 360 Amortizing Balloon
172 8.71000 0.0868 Actual / 360 Amortizing Balloon
173 8.88000 0.0868 Actual / 360 Amortizing Balloon
------------------------------------------------------------------------------------------------------------------------------------
174 8.72000 0.0868 Actual / 360 Amortizing Balloon
175 9.14000 0.0868 Actual / 360 Amortizing Balloon
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ORIGINAL
REMAINING TERM TO REMAINING ORIGINAL REMAINING
CONTROL INTEREST ONLY MATURITY TERM TO AMORTIZATION TERM AMORTIZATION TERM
NUMBER PERIOD (MOS.) (MOS.) MATURITY (MOS.) (MOS.) (MOS.)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1 120 118 360 358
2 119 118 360 359
3 120 119 360 359
4 120 119 300 299
4a
4b
4c
4d
4e
4f
4g
4h
------------------------------------------------------------------------------------------------------------------------------------
5 120 119 360 359
6 21 180 177 360 360
7 120 116 360 356
8 120 119 360 359
8a
8b
8c
------------------------------------------------------------------------------------------------------------------------------------
9 120 118 360 358
10 120 119 360 359
11 120 116 360 356
12 120 116 360 356
13 120 118 360 358
------------------------------------------------------------------------------------------------------------------------------------
14 120 117 360 357
14a
14b
14c
14d
------------------------------------------------------------------------------------------------------------------------------------
15 120 117 360 357
16 120 118 360 358
17 120 117 360 357
18 120 117 360 357
19 120 118 360 358
------------------------------------------------------------------------------------------------------------------------------------
20 120 119 360 359
21 120 112 360 352
22 120 117 360 357
23 120 118 360 358
24 9 132 129 360 360
------------------------------------------------------------------------------------------------------------------------------------
25 5 118 113 360 360
26 120 118 360 358
27 120 116 360 356
28 120 113 300 293
29 120 117 360 357
------------------------------------------------------------------------------------------------------------------------------------
30 120 119 360 359
31 120 118 300 298
32 120 119 360 359
33 120 116 354 350
34 120 116 360 356
------------------------------------------------------------------------------------------------------------------------------------
35 120 115 360 355
36 120 118 360 358
37 120 118 360 358
38 120 109 360 349
39 120 119 360 359
------------------------------------------------------------------------------------------------------------------------------------
40 120 113 300 293
41 120 118 360 358
42 120 116 360 356
43 120 117 360 357
44 120 118 360 358
------------------------------------------------------------------------------------------------------------------------------------
45 120 115 360 355
46 120 119 360 359
47 120 119 360 359
48 120 118 360 358
49 120 117 360 357
------------------------------------------------------------------------------------------------------------------------------------
50 120 117 300 297
51 161 156 360 355
52 120 116 360 356
53 120 117 300 297
54 120 116 360 356
------------------------------------------------------------------------------------------------------------------------------------
55 120 119 360 359
56 120 117 360 357
57 120 119 360 359
58 120 117 360 357
59 120 118 360 358
------------------------------------------------------------------------------------------------------------------------------------
60 120 117 300 297
61 120 118 360 358
62 120 118 360 358
63 180 179 360 359
64 120 116 360 356
64a
64b
64c
------------------------------------------------------------------------------------------------------------------------------------
65 120 116 360 356
66 120 117 360 357
67 120 118 360 358
68 120 116 360 356
69 120 119 360 359
------------------------------------------------------------------------------------------------------------------------------------
70 120 110 360 350
71 120 116 360 356
72 120 112 360 352
73 120 118 300 298
74 120 118 360 358
------------------------------------------------------------------------------------------------------------------------------------
75 120 116 300 296
76 120 118 360 358
77 120 118 276 274
78 120 119 360 359
79 120 118 360 358
------------------------------------------------------------------------------------------------------------------------------------
80 120 114 360 354
81 120 116 300 296
82 120 115 360 355
83 120 116 300 296
84 120 118 360 358
------------------------------------------------------------------------------------------------------------------------------------
85 120 118 360 358
86 120 116 360 356
86a
86b
86c
86d
86e
86f
------------------------------------------------------------------------------------------------------------------------------------
87 120 118 360 358
88 120 113 360 353
89 120 118 360 358
90 120 116 300 296
91 120 116 360 356
------------------------------------------------------------------------------------------------------------------------------------
92 120 116 360 356
93 120 118 360 358
93a
93b
94 120 118 300 298
------------------------------------------------------------------------------------------------------------------------------------
95 120 119 360 359
96 120 118 360 358
97 120 119 360 359
98 120 117 360 357
99 120 117 360 357
------------------------------------------------------------------------------------------------------------------------------------
100 120 116 360 356
101 120 117 360 357
102 120 114 300 294
103 120 118 300 298
104 120 119 360 359
------------------------------------------------------------------------------------------------------------------------------------
105 120 118 360 358
106 120 117 300 297
107 120 115 360 355
108 120 114 300 294
109 120 116 300 296
------------------------------------------------------------------------------------------------------------------------------------
110 120 117 360 357
111 120 119 360 359
112 120 116 360 356
113 120 119 360 359
114 120 115 360 355
------------------------------------------------------------------------------------------------------------------------------------
115 120 116 360 356
116 120 117 360 357
117 120 119 360 359
118 120 117 300 297
119 120 115 360 355
------------------------------------------------------------------------------------------------------------------------------------
120 120 116 360 356
121 120 117 360 357
122 120 116 360 356
123 60 55 360 355
124 120 119 360 359
------------------------------------------------------------------------------------------------------------------------------------
125 120 113 240 233
126 120 113 360 353
127 120 114 360 354
128 120 113 300 293
129 120 117 360 357
------------------------------------------------------------------------------------------------------------------------------------
130 120 116 360 356
131 120 117 360 357
132 120 117 360 357
133 120 114 300 294
133a
133b
133c
------------------------------------------------------------------------------------------------------------------------------------
134 120 114 324 318
135 120 114 360 354
136 120 119 360 359
137 120 115 300 295
138 120 115 360 355
------------------------------------------------------------------------------------------------------------------------------------
139 120 119 360 359
140 120 117 360 357
141 120 117 360 357
142 120 115 300 295
143 120 117 360 357
------------------------------------------------------------------------------------------------------------------------------------
144 120 117 360 357
145 120 112 300 292
146 120 115 360 355
147 120 115 360 355
148 120 112 300 292
------------------------------------------------------------------------------------------------------------------------------------
149 120 117 360 357
150 180 173 180 173
151 120 116 300 296
152 120 112 300 292
153 120 116 360 356
------------------------------------------------------------------------------------------------------------------------------------
154 120 117 360 357
155 120 115 300 295
156 120 115 300 295
157 120 110 360 350
158 120 115 300 295
------------------------------------------------------------------------------------------------------------------------------------
159 120 117 360 357
160 120 117 360 357
161 180 173 180 173
162 120 115 324 319
163 120 119 360 359
------------------------------------------------------------------------------------------------------------------------------------
164 120 115 360 355
165 120 115 300 295
166 120 115 300 295
167 120 117 360 357
168 120 117 360 357
------------------------------------------------------------------------------------------------------------------------------------
169 120 114 324 318
170 60 55 360 355
171 120 115 300 295
172 120 116 360 356
173 120 113 300 293
------------------------------------------------------------------------------------------------------------------------------------
174 120 115 300 295
175 120 115 360 355
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CONTROL MATURITY DATE BALLOON OR ARD
NUMBER ORIGINATION DATE OR ARD BALANCE ($) PREPAYMENT PROVISION
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1 10/02/00 10/05/10 130,216,379 Lock/25_Defeasance/91_0%/4
2 10/19/00 10/01/10 89,000,429 Lock/25_Defeasance/90_0%/4
3 10/20/00 11/01/10 44,666,462 Lock/25_Defeasance/91_0%/4
4 10/20/00 11/01/10 26,137,643 Lock/24_Defeasance/92_0%/4
4a
4b
4c
4d
4e
4f
4g
4h
-----------------------------------------------------------------------------------------------------------------------------------
5 10/11/00 11/01/10 26,658,076 Lock/49_Defeasance/67_0%/4
6 08/22/00 09/05/15 25,366,642 Lock/26_Defeasance/152_0%/2
7 07/31/00 08/01/10 25,562,116 Lock/28_Defeasance/88_0%/4
8 10/13/00 11/05/10 25,492,959 Lock/24_Defeasance/94_0%/2
8a
8b
8c
-----------------------------------------------------------------------------------------------------------------------------------
9 09/28/00 10/01/10 22,870,699 Lock/26_Defeasance/90_0%/4
10 10/19/00 11/01/10 17,913,215 Lock/25_Defeasance/91_0%/4
11 07/31/00 08/05/10 17,559,192 Lock/27_Defeasance/91_0%/2
12 07/28/00 08/01/10 17,506,604 Lock/28_Defeasance/88_0%/4
13 09/29/00 10/01/10 16,408,856 Lock/26_Defeasance/90_0%/4
-----------------------------------------------------------------------------------------------------------------------------------
14 08/30/00 09/01/10 16,448,307 Lock/27_Defeasance/89_0%/4
14a
14b
14c
14d
-----------------------------------------------------------------------------------------------------------------------------------
15 08/31/00 09/01/10 16,254,070 Lock/27_Defeasance/89_0%/4
16 09/29/00 10/01/10 14,100,618 Lock/26_Defeasance/90_0%/4
17 08/28/00 09/01/10 13,653,954 Lock/27_> of YM or 1%/89_0%/4
18 08/18/00 09/01/10 13,678,339 Lock/27_Defeasance/89_0%/4
19 09/29/00 10/01/10 13,433,397 Lock/26_Defeasance/90_0%/4
-----------------------------------------------------------------------------------------------------------------------------------
20 10/27/00 11/05/10 13,352,088 Lock/24_Defeasance/94_0%/2
21 03/30/00 04/01/10 12,731,100 Lock/32_Defeasance/84_0%/4
22 08/11/00 09/01/10 12,586,823 Lock/27_Defeasance/89_0%/4
23 09/27/00 10/01/10 11,959,313 Lock/26_Defeasance/90_0%/4
24 08/23/00 09/01/11 11,770,948 Lock/27_Defeasance/101_0%/4
-----------------------------------------------------------------------------------------------------------------------------------
25 08/04/00 05/05/10 11,798,839 Lock/28_Defeasance/88_0%/2
26 09/20/00 10/01/10 11,490,959 Lock/26_Defeasance/90_0%/4
27 07/25/00 08/01/10 10,998,634 Lock/28_Defeasance/88_0%/4
28 04/28/00 05/01/10 10,311,851 Lock/31_Defeasance/85_0%/4
29 09/01/00 09/05/10 10,818,558 Lock/26_Defeasance/93_0%/1
-----------------------------------------------------------------------------------------------------------------------------------
30 10/03/00 11/01/10 10,689,282 Lock/25_Defeasance/91_0%/4
31 09/08/00 10/01/10 8,763,445 Lock/47_Defeasance/66_0%/7
32 10/16/00 11/01/10 9,278,807 Lock/25_Defeasance/91_0%/4
33 07/27/00 08/05/10 8,623,449 Lock/27_Defeasance/91_0%/2
34 07/07/00 08/01/10 8,572,364 Lock/28_Defeasance/88_0%/4
-----------------------------------------------------------------------------------------------------------------------------------
35 06/09/00 07/01/10 8,578,074 Lock/29_Defeasance/87_0%/4
36 09/26/00 10/01/10 8,451,609 Lock/26_Defeasance/90_0%/4
37 09/18/00 10/01/10 8,109,611 Lock/26_Defeasance/90_0%/4
38 12/16/99 01/01/10 8,026,449 Lock/35_Defeasance/81_0%/4
39 10/10/00 11/01/10 7,768,257 Lock/31_> of YM or 1%/85_0%/4
-----------------------------------------------------------------------------------------------------------------------------------
40 04/28/00 05/01/10 7,300,351 Lock/31_Defeasance/85_0%/4
41 09/18/00 10/01/10 6,532,425 Lock/26_Defeasance/90_0%/4
42 07/31/00 08/01/10 6,121,388 Lock/27_Defeasance/90_0%/3
43 08/16/00 09/01/10 6,027,876 Lock/27_Defeasance/89_0%/4
44 09/22/00 10/01/10 5,936,073 Lock/26_Defeasance/90_0%/4
-----------------------------------------------------------------------------------------------------------------------------------
45 06/30/00 07/01/10 5,840,785 Lock/29_Defeasance/87_0%/4
46 10/12/00 11/01/10 5,838,171 Lock/25_Defeasance/91_0%/4
47 10/10/00 11/01/10 5,744,338 Lock/25_Defeasance/91_0%/4
48 09/29/00 10/01/10 5,511,817 Lock/26_Defeasance/90_0%/4
49 08/30/00 09/01/10 5,538,155 Lock/27_Defeasance/89_0%/4
-----------------------------------------------------------------------------------------------------------------------------------
50 08/18/00 09/01/10 5,097,255 Lock/48_Defeasance/70_0%/2
51 06/28/00 12/05/13 5,177,333 Lock/28_Defeasance/131_0%/2
52 07/20/00 08/01/10 5,278,156 Lock/28_Defeasance/88_0%/4
53 08/02/00 09/01/10 4,944,952 Lock/36_Defeasance/82_0%/2
54 07/31/00 08/01/10 5,138,555 Lock/27_Defeasance/90_0%/3
-----------------------------------------------------------------------------------------------------------------------------------
55 10/06/00 11/01/10 5,028,232 Lock/25_Defeasance/91_0%/4
56 08/28/00 09/01/10 4,998,996 Lock/27_Defeasance/89_0%/4
57 10/05/00 11/01/10 5,032,761 Lock/25_Defeasance/91_0%/4
58 08/07/00 09/01/10 4,935,946 Lock/27_Defeasance/89_0%/4
59 09/25/00 10/05/10 4,827,193 Lock/25_Defeasance/93_0%/2
-----------------------------------------------------------------------------------------------------------------------------------
60 08/10/00 09/01/10 4,277,619 Lock/47_Defeasance/71_0%/2
61 09/20/00 10/05/10 4,583,238 Lock/25_Defeasance/91_0%/4
62 09/15/00 10/01/10 4,504,303 Lock/26_Defeasance/90_0%/4
63 10/26/00 11/05/15 3,993,588 Lock/24_Defeasance/154_0%/2
64 07/21/00 08/01/10 4,500,449 Lock/28_Defeasance/88_0%/4
64a
64b
64c
------------------------------------------------------------------------------------------------------------------------------------
65 07/17/00 08/01/10 4,525,617 Lock/28_Defeasance/88_0%/4
66 08/28/00 09/01/10 4,323,513 Lock/27_Defeasance/89_0%/4
67 09/05/00 10/01/10 4,355,031 Lock/26_Defeasance/90_0%/4
68 07/31/00 08/01/10 4,312,796 Lock/27_Defeasance/90_0%/3
69 10/06/00 11/01/10 4,333,126 Lock/25_Defeasance/91_0%/4
------------------------------------------------------------------------------------------------------------------------------------
70 01/14/00 02/01/10 4,290,373 Lock/34_Defeasance/82_0%/4
71 07/24/00 08/01/10 4,222,500 Lock/28_Defeasance/88_0%/4
72 03/03/00 04/01/10 4,088,517 Lock/35_Defeasance/81_0%/4
73 09/26/00 10/01/10 3,723,197 Lock/26_Defeasance/90_0%/4
74 09/22/00 10/01/10 4,002,353 Lock/26_Defeasance/90_0%/4
------------------------------------------------------------------------------------------------------------------------------------
75 07/31/00 08/01/10 3,683,953 Lock/35_Defeasance/82_0%/3
76 09/22/00 10/01/10 3,780,999 Lock/26_Defeasance/90_0%/4
77 09/22/00 10/01/10 3,270,753 Lock/26_Defeasance/90_0%/4
78 10/16/00 11/01/10 3,681,682 Lock/25_Defeasance/91_0%/4
79 09/13/00 10/01/10 3,570,139 Lock/26_Defeasance/90_0%/4
------------------------------------------------------------------------------------------------------------------------------------
80 05/04/00 06/01/10 3,499,328 Lock/30_Defeasance/86_0%/4
81 07/31/00 08/01/10 3,159,567 Lock/35_Defeasance/82_0%/3
82 06/30/00 07/01/10 3,401,179 Lock/29_Defeasance/87_0%/4
83 07/31/00 08/01/10 3,097,869 Lock/35_Defeasance/82_0%/3
84 09/26/00 10/01/10 3,195,844 Lock/26_Defeasance/90_0%/4
------------------------------------------------------------------------------------------------------------------------------------
85 09/25/00 10/05/10 3,136,162 Lock/25_Defeasance/93_0%/2
86 07/17/00 08/01/10 3,134,211 Lock/28_Defeasance/88_0%/4
86a
86b
86c
86d
86e
86f
------------------------------------------------------------------------------------------------------------------------------------
87 09/08/00 10/01/10 3,030,610 Lock/26_Defeasance/90_0%/4
88 04/28/00 05/01/10 3,066,674 Lock/31_Defeasance/85_0%/4
89 09/21/00 10/01/10 2,962,513 Lock/26_Defeasance/90_0%/4
90 08/01/00 08/01/10 2,769,603 Lock/35_Defeasance/81_0%/4
91 07/18/00 08/01/10 2,943,018 Lock/28_Defeasance/88_0%/4
------------------------------------------------------------------------------------------------------------------------------------
92 07/06/00 08/01/10 2,893,288 Lock/28_Defeasance/88_0%/4
93 09/15/00 10/01/10 2,879,663 Lock/26_Defeasance/90_0%/4
93a
93b
94 09/19/00 10/05/10 2,692,827 Lock/25_Defeasance/93_0%/2
------------------------------------------------------------------------------------------------------------------------------------
95 10/13/00 11/01/10 2,843,919 Lock/25_Defeasance/91_0%/4
96 09/06/00 10/01/10 2,838,364 Lock/26_Defeasance/90_0%/4
97 10/13/00 11/01/10 2,761,231 Lock/25_Defeasance/91_0%/4
98 08/10/00 09/01/10 2,710,189 Lock/27_Defeasance/89_0%/4
99 08/25/00 09/05/10 2,700,917 Lock/26_Defeasance/92_0%/2
------------------------------------------------------------------------------------------------------------------------------------
100 07/31/00 08/01/10 2,647,815 Lock/27_Defeasance/90_0%/3
101 08/10/00 09/01/10 2,614,976 Lock/27_Defeasance/89_0%/4
102 05/31/00 06/01/10 2,419,982 Lock/30_Defeasance/86_0%/4
103 09/21/00 10/01/10 2,368,988 Lock/26_Defeasance/90_0%/4
104 10/16/00 11/01/10 2,361,193 Lock/25_Defeasance/91_0%/4
------------------------------------------------------------------------------------------------------------------------------------
105 09/07/00 10/01/10 2,275,496 Lock/26_Defeasance/87_0%/7
106 08/29/00 09/01/10 2,083,258 Lock/27_Defeasance/89_0%/4
107 06/13/00 07/01/10 2,271,748 Lock/29_Defeasance/87_0%/4
108 05/26/00 06/01/10 2,043,985 Lock/30_Defeasance/83_0%/7
109 07/19/00 08/01/10 2,009,291 Lock/28_Defeasance/88_0%/4
------------------------------------------------------------------------------------------------------------------------------------
110 08/07/00 09/01/10 2,172,071 Lock/27_Defeasance/89_0%/4
111 10/16/00 11/01/10 2,105,297 Lock/25_Defeasance/91_0%/4
112 08/01/00 08/05/10 2,043,869 Lock/27_Defeasance/91_0%/2
113 10/10/00 11/01/10 2,017,423 Lock/25_Defeasance/91_0%/4
114 06/30/00 07/01/10 2,034,064 Lock/29_Defeasance/87_0%/4
------------------------------------------------------------------------------------------------------------------------------------
115 07/28/00 08/01/10 1,985,179 Lock/28_Defeasance/88_0%/4
116 08/24/00 09/01/10 1,926,668 Lock/27_Defeasance/89_0%/4
117 10/10/00 11/01/10 1,902,589 Lock/49_Defeasance/67_0%/4
118 08/17/00 09/01/10 1,687,476 Lock/27_Defeasance/89_0%/4
119 06/12/00 07/01/10 1,800,515 Lock/29_Defeasance/87_0%/4
------------------------------------------------------------------------------------------------------------------------------------
120 07/31/00 08/01/10 1,796,807 Lock/28_Defeasance/88_0%/4
121 08/31/00 09/01/10 1,803,505 Lock/27_Defeasance/89_0%/4
122 07/21/00 08/01/10 1,811,674 Lock/28_Defeasance/88_0%/4
123 06/14/00 07/01/05 1,890,875 Lock/29_Defeasance/27_0%/4
124 10/11/00 11/01/10 1,758,386 Lock/25_Defeasance/91_0%/4
------------------------------------------------------------------------------------------------------------------------------------
125 04/24/00 05/01/10 1,381,561 Lock/31_Defeasance/85_0%/4
126 04/20/00 05/01/10 1,617,454 Lock/48_> of YM or 1%/68_0%/4
127 05/31/00 06/01/10 1,560,007 Lock/30_Defeasance/86_0%/4
128 04/10/00 05/01/10 1,426,507 Lock/31_Defeasance/85_0%/4
129 08/24/00 09/01/10 1,550,306 Lock/27_Defeasance/89_0%/4
------------------------------------------------------------------------------------------------------------------------------------
130 07/06/00 08/01/10 1,522,990 Lock/28_Defeasance/88_0%/4
131 08/31/00 09/05/10 1,513,508 Lock/26_Defeasance/92_0%/2
132 08/24/00 09/01/10 1,514,251 Lock/27_Defeasance/89_0%/4
133 05/11/00 06/01/10 1,332,265 Lock/30_Defeasance/86_0%/4
133a
133b
133c
------------------------------------------------------------------------------------------------------------------------------------
134 05/08/00 06/01/10 1,307,547 Lock/30_Defeasance/86_0%/4
135 05/19/00 06/01/10 1,365,480 Lock/30_Defeasance/86_0%/4
136 10/13/00 11/01/10 1,371,528 Lock/25_Defeasance/91_0%/4
137 06/14/00 07/01/10 1,231,390 Lock/29_Defeasance/87_0%/4
138 06/02/00 07/01/10 1,238,301 Lock/29_Defeasance/87_0%/4
------------------------------------------------------------------------------------------------------------------------------------
139 10/06/00 11/05/10 1,217,442 Lock/24_Defeasance/94_0%/2
140 08/16/00 09/01/10 1,215,639 Lock/27_Defeasance/89_0%/4
141 08/31/00 09/05/10 1,203,620 Lock/26_Defeasance/92_0%/2
142 06/27/00 07/01/10 1,113,512 Lock/29_Defeasance/87_0%/4
143 08/23/00 09/01/10 1,170,936 Lock/27_Defeasance/89_0%/4
------------------------------------------------------------------------------------------------------------------------------------
144 08/14/00 09/01/10 1,130,403 Lock/27_Defeasance/89_0%/4
145 03/29/00 04/01/10 1,015,298 Lock/32_Defeasance/84_0%/4
146 06/22/00 07/01/10 1,076,275 Lock/29_Defeasance/87_0%/4
147 06/20/00 07/01/10 1,052,886 Lock/29_Defeasance/87_0%/4
148 03/13/00 04/05/10 925,322 Lock/31_Defeasance/87_0%/2
------------------------------------------------------------------------------------------------------------------------------------
149 08/03/00 09/05/10 992,042 Lock/26_Defeasance/92_0%/2
150 04/24/00 05/01/15 26,964 Lock/31_Defeasance/145_0%/4
151 07/14/00 08/01/10 909,387 Lock/28_Defeasance/88_0%/4
152 03/22/00 04/01/10 841,659 Lock/32_Defeasance/84_0%/4
153 07/31/00 08/01/10 904,614 Lock/28_Defeasance/88_0%/4
------------------------------------------------------------------------------------------------------------------------------------
154 08/07/00 09/05/10 907,660 Lock/26_Defeasance/92_0%/2
155 06/22/00 07/01/10 836,948 Lock/48_5%/12_4%/12_3%/12_2%/12_1%/20_0%/4
156 06/30/00 07/01/10 839,139 Lock/29_Defeasance/87_0%/4
157 01/10/00 02/01/10 893,579 Lock/34_Defeasance/82_0%/4
158 06/08/00 07/01/10 803,898 Lock/29_Defeasance/87_0%/4
------------------------------------------------------------------------------------------------------------------------------------
159 08/31/00 09/05/10 853,312 Lock/26_Defeasance/92_0%/2
160 08/16/00 09/01/10 844,723 Lock/27_Defeasance/89_0%/4
161 04/11/00 05/01/15 32,279 Lock/31_Defeasance/145_0%/4
162 06/15/00 07/01/10 764,575 Lock/29_Defeasance/87_0%/4
163 10/26/00 11/05/10 749,501 Lock/24_Defeasance/94_0%/2
------------------------------------------------------------------------------------------------------------------------------------
164 06/22/00 07/01/10 726,613 Lock/29_Defeasance/87_0%/4
165 06/14/00 07/01/10 661,737 Lock/29_Defeasance/87_0%/4
166 06/22/00 07/01/10 617,359 Lock/29_Defeasance/87_0%/4
167 08/16/00 09/01/10 649,717 Lock/27_Defeasance/89_0%/4
168 08/29/00 09/01/10 606,774 Lock/27_Defeasance/89_0%/4
------------------------------------------------------------------------------------------------------------------------------------
169 05/08/00 06/01/10 567,182 Lock/30_Defeasance/86_0%/4
170 06/14/00 07/01/05 620,199 Lock/29_Defeasance/27_0%/4
171 06/22/00 07/01/10 532,634 Lock/29_Defeasance/87_0%/4
172 07/07/00 08/01/10 537,142 Lock/28_Defeasance/88_0%/4
173 04/17/00 05/01/10 464,635 Lock/31_Defeasance/85_0%/4
------------------------------------------------------------------------------------------------------------------------------------
174 06/07/00 07/01/10 428,957 Lock/29_Defeasance/87_0%/4
175 06/22/00 07/01/10 337,673 Lock/29_Defeasance/87_0%/4
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ANNUAL
CONTROL DEBT UNDERWRITTEN NET UNDERWRITTEN NET UNDERWRITTEN NCF
NUMBER SERVICE ($) OPERATING INCOME ($) CASH FLOW ($) DSCR (X)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1 12,727,546 21,229,756 20,097,142 1.58
2 8,488,139 19,048,453 18,387,396 2.17
3 4,390,046 7,418,786 6,499,426 1.48
4 3,041,865 6,175,617 6,175,617 2.03
4a 554,895 554,895
4b 1,012,147 1,012,147
4c 1,081,828 1,081,828
4d 1,281,608 1,281,608
4e 280,899 280,899
4f 518,783 518,783
4g 547,109 547,109
4h 898,348 898,348
------------------------------------------------------------------------------------------------------------------------------------
5 2,579,084 3,838,140 3,786,951 1.47
6 2,706,668 3,284,585 3,212,585 1.19
7 2,567,508 3,412,925 3,220,925 1.25
8 2,555,809 3,437,911 3,213,387 1.26
8a 1,260,886 1,174,774
8b 1,197,442 1,119,983
8c 979,583 918,630
------------------------------------------------------------------------------------------------------------------------------------
9 2,273,113 2,897,239 2,810,239 1.24
10 1,774,438 2,232,559 2,199,754 1.24
11 1,738,949 2,145,968 2,085,568 1.20
12 1,744,821 2,404,088 2,260,451 1.30
13 1,603,253 2,147,115 2,009,715 1.25
------------------------------------------------------------------------------------------------------------------------------------
14 1,653,599 2,135,576 2,038,201 1.23
14a 527,853 507,459
14b 423,758 405,461
14c 950,961 901,459
14d 233,004 223,822
------------------------------------------------------------------------------------------------------------------------------------
15 1,622,598 2,304,138 2,058,371 1.27
16 1,367,877 1,868,750 1,813,550 1.33
17 1,342,875 1,896,954 1,736,296 1.29
18 1,374,159 1,791,655 1,726,092 1.26
19 1,303,151 1,650,531 1,599,931 1.23
------------------------------------------------------------------------------------------------------------------------------------
20 1,311,375 1,719,326 1,612,380 1.26
21 1,319,258 1,731,892 1,589,008 1.20
22 1,260,947 1,663,591 1,561,591 1.24
23 1,197,900 1,576,487 1,495,597 1.25
24 1,163,385 1,497,534 1,427,134 1.23
------------------------------------------------------------------------------------------------------------------------------------
25 1,147,662 1,525,934 1,441,934 1.26
26 1,145,318 1,805,815 1,466,394 1.28
27 1,110,163 1,420,808 1,360,808 1.23
28 1,220,572 1,892,506 1,719,563 1.41
29 1,079,224 1,423,831 1,299,618 1.20
------------------------------------------------------------------------------------------------------------------------------------
30 1,070,904 1,449,612 1,334,086 1.25
31 1,010,344 1,475,881 1,475,881 1.46
32 921,747 1,366,733 1,216,796 1.32
33 884,949 1,207,902 1,084,333 1.28
34 867,690 1,403,597 1,287,728 1.48
------------------------------------------------------------------------------------------------------------------------------------
35 869,300 1,174,481 1,118,577 1.29
36 828,734 1,169,129 1,100,215 1.33
37 817,450 1,043,700 1,016,023 1.24
38 814,532 1,110,212 1,069,264 1.31
39 762,414 970,839 961,239 1.26
------------------------------------------------------------------------------------------------------------------------------------
40 864,113 1,336,950 1,210,495 1.40
41 650,175 814,973 802,226 1.23
42 609,666 894,644 829,644 1.36
43 605,149 772,852 731,852 1.21
44 595,003 783,075 722,575 1.21
------------------------------------------------------------------------------------------------------------------------------------
45 583,248 936,603 876,375 1.50
46 583,248 865,970 778,059 1.33
47 572,659 791,459 722,496 1.26
48 543,945 725,907 663,907 1.22
49 557,551 804,765 716,574 1.29
------------------------------------------------------------------------------------------------------------------------------------
50 589,426 871,278 871,278 1.48
51 562,845 706,325 664,325 1.18
52 536,869 755,309 696,061 1.30
53 596,042 846,634 846,634 1.42
54 511,780 705,914 655,914 1.28
------------------------------------------------------------------------------------------------------------------------------------
55 510,157 911,742 839,237 1.65
56 503,625 704,231 662,207 1.31
57 517,771 725,179 665,682 1.29
58 497,273 672,694 623,444 1.25
59 475,028 591,863 546,613 1.20
------------------------------------------------------------------------------------------------------------------------------------
60 513,172 748,292 748,292 1.46
61 458,270 690,171 591,431 1.29
62 453,716 819,117 733,001 1.62
63 440,259 539,804 513,404 1.17
64 459,041 602,687 551,433 1.20
64a 243,228 223,978
64b 291,574 266,570
64c 67,884 60,884
------------------------------------------------------------------------------------------------------------------------------------
65 469,660 578,914 567,664 1.21
66 422,192 542,732 525,092 1.24
67 446,088 624,260 558,628 1.25
68 429,538 579,338 532,338 1.24
69 439,633 623,084 598,943 1.36
------------------------------------------------------------------------------------------------------------------------------------
70 450,160 613,033 563,269 1.25
71 435,794 576,333 549,831 1.26
72 422,506 661,611 620,263 1.47
73 421,801 557,402 541,563 1.28
74 401,176 546,869 500,669 1.25
------------------------------------------------------------------------------------------------------------------------------------
75 427,386 696,489 696,489 1.63
76 380,057 566,750 484,181 1.27
77 404,362 553,918 498,373 1.23
78 367,550 501,646 481,474 1.31
79 345,586 483,906 476,306 1.38
------------------------------------------------------------------------------------------------------------------------------------
80 362,136 508,965 447,197 1.23
81 361,440 747,684 747,684 2.07
82 345,156 466,697 434,195 1.26
83 359,393 573,060 573,060 1.59
84 321,238 492,488 437,903 1.36
------------------------------------------------------------------------------------------------------------------------------------
85 310,820 564,459 521,184 1.68
86 323,922 455,140 416,782 1.29
86a 104,577 93,277
86b 33,875 31,592
86c 33,575 29,392
86d 19,201 17,288
86e 48,205 45,118
86f 215,708 200,116
------------------------------------------------------------------------------------------------------------------------------------
87 295,687 395,727 382,343 1.29
88 309,678 396,362 391,511 1.26
89 295,277 365,974 353,014 1.20
90 322,883 635,232 635,232 1.97
91 298,307 375,103 369,203 1.24
------------------------------------------------------------------------------------------------------------------------------------
92 287,753 420,619 391,119 1.36
93 288,847 416,949 363,525 1.26
93a 187,226 164,752
93b 229,723 198,773
94 315,703 358,170 349,372 1.31
------------------------------------------------------------------------------------------------------------------------------------
95 276,529 336,232 331,132 1.20
96 286,107 360,008 350,735 1.23
97 274,298 375,394 343,634 1.25
98 275,534 364,996 354,146 1.29
99 271,722 338,306 327,106 1.20
------------------------------------------------------------------------------------------------------------------------------------
100 263,712 375,322 345,322 1.31
101 257,551 344,928 327,042 1.27
102 278,813 469,050 390,668 1.40
103 268,993 415,048 382,050 1.42
104 232,899 310,385 296,985 1.28
------------------------------------------------------------------------------------------------------------------------------------
105 228,084 331,623 288,795 1.27
106 239,550 388,876 329,618 1.38
107 240,742 339,645 305,884 1.27
108 239,738 330,842 300,863 1.25
109 233,071 371,280 355,123 1.52
------------------------------------------------------------------------------------------------------------------------------------
110 222,060 335,724 278,599 1.25
111 208,694 296,232 258,658 1.24
112 204,137 370,532 314,872 1.54
113 202,400 299,716 263,806 1.30
114 209,161 272,954 262,471 1.25
------------------------------------------------------------------------------------------------------------------------------------
115 200,939 259,455 254,205 1.27
116 191,113 308,629 270,081 1.41
117 195,197 276,736 258,480 1.32
118 196,009 283,393 244,442 1.25
119 180,810 260,636 242,636 1.34
------------------------------------------------------------------------------------------------------------------------------------
120 179,461 222,677 217,177 1.21
121 182,333 273,974 272,519 1.49
122 185,561 272,703 250,297 1.35
123 185,032 313,384 286,884 1.55
124 176,412 236,014 220,952 1.25
------------------------------------------------------------------------------------------------------------------------------------
125 203,673 278,854 252,510 1.24
126 163,962 218,910 209,276 1.28
127 152,192 255,851 230,834 1.52
128 160,367 227,259 200,091 1.25
129 156,515 210,494 194,881 1.25
------------------------------------------------------------------------------------------------------------------------------------
130 150,827 207,296 192,796 1.28
131 151,196 252,970 227,879 1.51
132 152,875 207,568 193,889 1.27
133 156,781 258,012 233,073 1.49
133a 117,024 106,274
133b 83,764 75,574
133c 57,224 51,224
------------------------------------------------------------------------------------------------------------------------------------
134 141,865 204,164 177,174 1.25
135 141,992 189,992 178,907 1.26
136 144,832 204,011 198,131 1.37
137 140,575 198,425 180,425 1.28
138 123,132 162,777 153,777 1.25
------------------------------------------------------------------------------------------------------------------------------------
139 123,132 195,229 153,174 1.24
140 124,626 183,055 153,847 1.23
141 120,239 203,207 179,617 1.49
142 127,908 183,658 168,808 1.32
143 117,966 189,158 163,997 1.55
------------------------------------------------------------------------------------------------------------------------------------
144 113,883 161,774 144,949 1.27
145 116,510 177,683 160,883 1.38
146 106,869 144,319 133,319 1.25
147 108,417 142,502 131,279 1.21
148 108,344 166,079 144,079 1.33
------------------------------------------------------------------------------------------------------------------------------------
149 100,329 193,082 152,348 1.52
150 126,909 153,717 145,467 1.15
151 102,843 154,169 131,189 1.28
152 98,657 142,648 139,849 1.42
153 92,270 135,892 127,769 1.38
------------------------------------------------------------------------------------------------------------------------------------
154 93,634 137,139 118,695 1.27
155 96,951 141,566 128,477 1.33
156 97,721 157,448 134,614 1.38
157 94,334 132,406 118,047 1.25
158 94,218 137,116 133,251 1.41
------------------------------------------------------------------------------------------------------------------------------------
159 85,244 162,679 129,997 1.52
160 84,505 131,976 121,726 1.44
161 116,150 158,174 138,894 1.20
162 84,745 127,353 107,699 1.27
163 73,402 111,201 95,865 1.31
------------------------------------------------------------------------------------------------------------------------------------
164 74,975 102,890 96,890 1.29
165 76,783 106,028 95,831 1.25
166 72,034 101,489 91,259 1.27
167 64,997 95,670 87,840 1.35
168 63,636 87,591 79,556 1.25
------------------------------------------------------------------------------------------------------------------------------------
169 61,537 100,342 76,714 1.25
170 63,181 90,394 84,394 1.34
171 61,976 83,776 81,426 1.31
172 55,590 75,774 70,024 1.26
173 54,846 96,075 77,645 1.42
------------------------------------------------------------------------------------------------------------------------------------
174 50,190 75,657 65,847 1.31
175 35,978 49,980 45,072 1.25
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CONTROL CROSS COLLATERALIZED ORIGINAL ORIGINAL CUT-OFF DATE
NUMBER DSCR (X) APPRAISAL VALUE ($) APPRAISAL DATE LTV (%)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1 250,000,000 08/30/00 58.33
2 217,000,000 09/13/00 46.54
3 79,000,000 09/02/00 63.25
4 70,800,000 44.45
4a 7,400,000 08/07/00
4b 10,100,000 08/03/00
4c 12,300,000 08/14/00
4d 13,400,000 08/25/00
4e 5,500,000 08/07/00
4f 5,300,000 08/16/00
4g 4,900,000 08/21/00
4h 11,900,000 08/28/00
------------------------------------------------------------------------------------------------------------------------------------
5 45,900,000 09/13/00 65.31
6 40,000,000 06/15/00 74.50
7 36,000,000 05/24/00 78.72
8 37,800,000 74.95
8a 14,300,000 07/07/00
8b 12,900,000 06/19/00
8c 10,600,000 06/19/00
------------------------------------------------------------------------------------------------------------------------------------
9 32,500,000 06/21/00 78.38
10 26,200,000 06/30/00 76.29
11 28,770,000 06/12/00 67.98
12 24,500,000 06/13/00 79.42
13 24,000,000 08/31/00 76.58
------------------------------------------------------------------------------------------------------------------------------------
14 23,425,000 77.88
14a 5,675,000 06/08/00
14b 4,525,000 05/25/00
14c 10,400,000 06/27/00
14d 2,825,000 06/07/00
------------------------------------------------------------------------------------------------------------------------------------
15 25,000,000 08/10/00 72.28
16 21,000,000 08/31/00 75.39
17 19,100,000 06/02/00 79.86
18 19,000,000 08/01/00 79.87
19 19,200,000 09/14/00 78.55
------------------------------------------------------------------------------------------------------------------------------------
20 18,700,000 09/18/00 77.75
21 18,900,000 11/19/99 73.80
22 18,400,000 06/29/00 75.96
23 20,900,000 12/31/00 63.57
24 17,150,000 07/03/00 76.68
------------------------------------------------------------------------------------------------------------------------------------
25 16,200,000 03/15/00 80.00
26 18,000,000 08/02/00 71.03
27 16,350,000 07/12/00 74.46
28 17,000,000 03/23/00 71.32
29 15,250,000 07/26/00 78.88
------------------------------------------------------------------------------------------------------------------------------------
30 15,000,000 07/21/00 79.22
31 14,450,000 06/01/00 72.54
32 14,475,000 08/24/00 71.46
33 13,800,000 04/28/00 66.52
34 13,000,000 06/08/00 72.93
------------------------------------------------------------------------------------------------------------------------------------
35 12,800,000 04/25/00 74.04
36 13,800,000 08/18/00 68.51
37 11,300,000 07/10/00 79.56
38 12,200,000 08/04/99 72.41
39 12,500,000 08/01/00 69.55
------------------------------------------------------------------------------------------------------------------------------------
40 12,300,000 03/01/00 69.78
41 9,100,000 08/01/00 79.91
42 1.30 8,800,000 06/29/00 77.33
43 8,750,000 06/30/00 76.44
44 1.23 8,580,000 08/20/00 76.84
------------------------------------------------------------------------------------------------------------------------------------
45 9,300,000 05/29/00 69.71
46 8,880,000 09/19/00 73.15
47 8,500,000 09/01/00 75.25
48 7,700,000 07/28/00 79.91
49 8,400,000 07/10/00 73.09
------------------------------------------------------------------------------------------------------------------------------------
50 7,800,000 05/25/00 77.99
51 7,175,000 01/24/00 84.82
52 7,500,000 03/22/00 77.71
53 8,100,000 07/01/00 71.44
54 1.30 7,270,000 06/29/00 78.58
------------------------------------------------------------------------------------------------------------------------------------
55 8,300,000 09/13/00 67.07
56 7,375,000 10/15/00 75.13
57 8,200,000 06/05/00 67.64
58 6,900,000 06/15/00 79.29
59 7,400,000 05/22/00 69.76
------------------------------------------------------------------------------------------------------------------------------------
60 8,100,000 07/01/00 64.01
61 7,000,000 06/09/00 72.78
62 8,850,000 07/23/00 56.44
63 5,900,000 08/04/00 84.69
64 6,800,000 73.02
64a 2,500,000 02/24/00
64b 3,400,000 02/24/00
64c 900,000 02/24/00
------------------------------------------------------------------------------------------------------------------------------------
65 7,150,000 05/15/00 69.45
66 6,150,000 07/12/00 78.72
67 6,100,000 07/07/00 78.74
68 1.30 6,175,000 06/29/00 77.65
69 6,400,000 09/14/00 74.95
------------------------------------------------------------------------------------------------------------------------------------
70 7,630,000 11/12/99 61.31
71 6,700,000 06/08/00 69.27
72 6,290,000 02/01/00 71.27
73 5,800,000 09/01/00 77.44
74 1.23 6,120,000 08/02/00 72.64
------------------------------------------------------------------------------------------------------------------------------------
75 7,100,000 06/09/00 61.76
76 5,800,000 09/05/00 72.34
77 5,600,000 08/16/00 73.50
78 5,250,000 09/05/00 78.04
79 6,610,000 07/27/00 60.68
------------------------------------------------------------------------------------------------------------------------------------
80 5,000,000 03/21/00 76.78
81 7,000,000 06/05/00 54.09
82 4,850,000 04/27/00 77.44
83 5,600,000 06/09/00 65.85
84 4,450,000 08/08/00 79.69
------------------------------------------------------------------------------------------------------------------------------------
85 5,850,000 06/21/00 59.76
86 4,595,000 74.94
86a 1,050,000 05/20/00
86b 365,000 05/20/00
86c 360,000 05/20/00
86d 180,000 04/06/00
86e 490,000 04/06/00
86f 2,150,000 05/12/00
------------------------------------------------------------------------------------------------------------------------------------
87 4,250,000 05/05/00 79.91
88 4,800,000 03/07/00 70.58
89 4,300,000 04/26/00 76.66
90 5,800,000 02/23/00 56.71
91 4,300,000 06/08/00 75.66
------------------------------------------------------------------------------------------------------------------------------------
92 4,375,000 05/12/00 73.55
93 4,600,000 69.51
93a 1,900,000 08/01/00
93b 2,700,000 08/01/00
94 4,400,000 07/18/00 61.25
------------------------------------------------------------------------------------------------------------------------------------
95 4,525,000 09/01/00 70.56
96 3,950,000 08/01/00 79.67
97 4,100,000 08/09/00 75.07
98 3,900,000 07/05/00 76.80
99 3,940,000 06/30/00 76.01
------------------------------------------------------------------------------------------------------------------------------------
100 1.30 3,925,000 06/23/00 75.00
101 3,710,000 04/25/00 78.70
102 4,125,000 02/08/00 69.93
103 5,250,000 07/10/00 54.38
104 3,550,000 08/14/00 74.32
------------------------------------------------------------------------------------------------------------------------------------
105 3,340,000 05/23/00 75.67
106 3,200,000 07/15/00 77.91
107 4,200,000 02/22/00 58.93
108 3,310,000 12/23/99 72.99
109 3,800,000 07/06/00 62.94
------------------------------------------------------------------------------------------------------------------------------------
110 3,500,000 05/23/00 68.46
111 3,150,000 09/01/00 74.55
112 3,500,000 05/19/00 64.86
113 3,050,000 08/09/00 73.49
114 3,000,000 03/20/00 74.56
------------------------------------------------------------------------------------------------------------------------------------
115 2,750,000 08/01/00 79.84
116 3,275,000 06/19/00 65.53
117 3,000,000 08/26/00 69.96
118 2,900,000 07/02/00 69.30
119 3,095,000 12/20/99 64.46
------------------------------------------------------------------------------------------------------------------------------------
120 2,600,000 07/12/00 76.76
121 2,800,000 07/28/00 71.31
122 3,200,000 06/12/00 62.38
123 1.50 2,575,000 04/26/00 75.95
124 2,650,000 07/19/00 73.73
------------------------------------------------------------------------------------------------------------------------------------
125 2,700,000 11/17/99 69.68
126 2,750,000 11/11/99 64.90
127 2,900,000 03/07/00 60.13
128 2,180,000 02/22/00 78.83
129 2,200,000 09/01/00 78.05
------------------------------------------------------------------------------------------------------------------------------------
130 2,200,000 04/15/00 77.10
131 1.51 2,515,000 05/11/00 66.88
132 2,200,000 09/01/00 76.24
133 1,950,000 80.63
133a 850,000 10/08/99
133b 620,000 02/29/00
133c 480,000 02/29/00
------------------------------------------------------------------------------------------------------------------------------------
134 1.25 2,120,000 02/18/00 70.92
135 2,025,000 11/22/99 73.87
136 2,100,000 04/05/00 71.39
137 2,150,000 03/22/00 68.63
138 1,750,000 03/13/00 78.65
------------------------------------------------------------------------------------------------------------------------------------
139 2,350,000 06/02/00 57.41
140 1,850,000 05/01/00 72.43
141 1.51 2,000,000 05/22/00 66.88
142 1,800,000 05/10/00 73.90
143 1,900,000 05/20/00 61.45
------------------------------------------------------------------------------------------------------------------------------------
144 1,900,000 06/12/00 65.94
145 1,625,000 01/21/00 74.48
146 1,510,000 03/22/00 79.26
147 1,730,000 05/03/00 66.90
148 1,800,000 01/08/00 60.70
------------------------------------------------------------------------------------------------------------------------------------
149 2,175,000 06/02/00 50.49
150 1,630,000 03/13/00 66.17
151 1,500,000 04/06/00 73.06
152 1,350,000 01/15/00 73.58
153 1,500,000 01/14/00 66.54
------------------------------------------------------------------------------------------------------------------------------------
154 1,600,000 06/21/00 62.40
155 1,460,000 04/08/00 68.21
156 1,395,000 04/20/00 71.39
157 1,350,000 08/21/99 72.04
158 1,470,000 04/06/00 64.71
------------------------------------------------------------------------------------------------------------------------------------
159 1.51 1,930,000 05/22/00 49.14
160 1,400,000 05/05/00 67.03
161 1,500,000 12/28/99 60.30
162 1,400,000 03/03/00 62.30
163 1,100,000 08/16/00 76.31
------------------------------------------------------------------------------------------------------------------------------------
164 1.28 1,000,000 03/22/00 79.82
165 1,050,000 04/20/00 74.93
166 1.28 1,000,000 03/22/00 73.20
167 1,050,000 05/05/00 68.74
168 950,000 06/09/00 69.90
------------------------------------------------------------------------------------------------------------------------------------
169 1.25 920,000 02/22/00 70.89
170 1.50 850,000 04/26/00 75.16
171 985,000 02/21/00 64.20
172 820,000 04/11/00 71.94
173 775,000 02/11/00 70.58
------------------------------------------------------------------------------------------------------------------------------------
174 860,000 12/08/99 59.07
175 460,000 03/22/00 79.85
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SCHEDULED
CONTROL MATURITY OR ARD CROSS COLLATERALIZED
NUMBER DATE LTV (%) LTV RATIO (%) YEAR BUILT YEAR RENOVATED
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1 52.09 1997
2 41.01 1999
3 56.54 1985
4 36.92
4a 1997
4b 1997
4c 1996
4d 1994
4e 1993 1999 (Partial)
4f 1992 1998/1999
4g 1996
4h 1986 1998/1999
----------------------------------------------------------------------------------------------------------------------------------
5 58.08 1999/2000
6 63.42 1999
7 71.01 1977 1993
8 67.44
8a 1964 1994
8b 1994 1998
8c 1999
----------------------------------------------------------------------------------------------------------------------------------
9 70.37 1999
10 68.37 1987 2000
11 61.03 1972/1976 1998/1999
12 71.46 1981/1993
13 68.37 1984/1987
----------------------------------------------------------------------------------------------------------------------------------
14 70.22
14a 1999
14b 1999
14c 1999
14d 1998
----------------------------------------------------------------------------------------------------------------------------------
15 65.02 1989
16 67.15 1999
17 71.49 1998
18 71.99 1999
19 69.97 1994/1998
----------------------------------------------------------------------------------------------------------------------------------
20 71.4 1963 1998
21 67.36 1998
22 68.41 1965/1971
23 57.22 1999
24 68.64 1999
----------------------------------------------------------------------------------------------------------------------------------
25 72.83 1945 Various
26 63.84 1905 1984
27 67.27 1998
28 60.66 1997
29 70.94 1954 1992
----------------------------------------------------------------------------------------------------------------------------------
30 71.26 1986
31 60.65 1973 1999/2000
32 64.1 1998
33 62.49 1964 1992
34 65.94 1975 1994/1995 / 1997/1998
----------------------------------------------------------------------------------------------------------------------------------
35 67.02 2000
36 61.24 1998
37 71.77 1999
38 65.79 1989
39 62.15 2000
----------------------------------------------------------------------------------------------------------------------------------
40 59.35 1997
41 71.78 2000
42 69.56 77.42 1982/1985
43 68.89 1968
44 69.19 75.15 1983
----------------------------------------------------------------------------------------------------------------------------------
45 62.8 1965 1980/1981
46 65.75 1952/1959 1985
47 67.58 1994/1999/2000
48 71.58 1983 1997
49 65.93 1980/1988 1999
----------------------------------------------------------------------------------------------------------------------------------
50 65.35 1998
51 72.16 1997
52 70.38 1982
53 61.05 1998
54 70.68 77.42 1987
----------------------------------------------------------------------------------------------------------------------------------
55 60.58 1986/1993
56 67.78 2000
57 61.38 1990
58 71.54 1986
59 65.23 1971/1972
----------------------------------------------------------------------------------------------------------------------------------
60 52.81 1999
61 65.47 1988 1990
62 50.9 1973 1995
63 67.69 1999
64 66.18
64a 1928 1997/2000
64b 1928 1997/2000
64c 1931 2000
----------------------------------------------------------------------------------------------------------------------------------
65 63.3 1999
66 70.3 1999
67 71.39 1981
68 69.84 77.42 1985
69 67.71 1991
----------------------------------------------------------------------------------------------------------------------------------
70 56.23 1998
71 63.02 2000
72 65 mid-1980's/1996
73 64.19 1999
74 65.4 75.15 1979
----------------------------------------------------------------------------------------------------------------------------------
75 51.89 1996
76 65.19 1985/1986
77 58.41 1870/1899 1980's/1996/1999
78 70.13 2000
79 54.01 2000
----------------------------------------------------------------------------------------------------------------------------------
80 69.99 1988 1996
81 45.14 1988 1995
82 70.13 1989
83 55.32 1996 1998/1999
84 71.82 1986
----------------------------------------------------------------------------------------------------------------------------------
85 53.61 1993 1996
86 68.21
86a 1977
86b 1967
86c 1976
86d 1977
86e 1964
86f 1970
----------------------------------------------------------------------------------------------------------------------------------
87 71.31 2000
88 63.89 1999
89 68.9 1998
90 47.75 1998
91 68.44 1991 1994
----------------------------------------------------------------------------------------------------------------------------------
92 66.13 1985 1998
93 62.6
93a 1982 1994
93b 1983 1994
94 61.2 1999
----------------------------------------------------------------------------------------------------------------------------------
95 62.85 2000
96 71.86 1999
97 67.35 1999
98 69.49 1993 1999
99 68.55 1999
----------------------------------------------------------------------------------------------------------------------------------
100 67.46 77.42 1986
101 70.48 1988
102 58.67 1978
103 45.12 2000
104 66.51 1998/1999
----------------------------------------------------------------------------------------------------------------------------------
105 68.13 1984
106 65.1 1983/1985
107 54.09 1987
108 61.75 1960 1980
109 52.88 1972
----------------------------------------------------------------------------------------------------------------------------------
110 62.06 1969/1970 1993/1998
111 66.83 1989
112 58.4 1972/1974 1997/1998
113 66.15 1973/1983 2000
114 67.8 2000
----------------------------------------------------------------------------------------------------------------------------------
115 72.19 1912 2000
116 58.83 1988
117 63.42 1999
118 58.19 1985
119 58.17 1972 1999
----------------------------------------------------------------------------------------------------------------------------------
120 69.11 1916 2000
121 64.41 2000
122 56.61 1989/1990
123 73.43 75.76 1963 1997
124 66.35 1999
----------------------------------------------------------------------------------------------------------------------------------
125 51.17 1967
126 58.82 1900 1996
127 53.79 1947 1993
128 65.44 1984
129 70.47 1999/2000
----------------------------------------------------------------------------------------------------------------------------------
130 69.23 1970
131 60.18 62.64 1972
132 68.83 1999
133 68.32
133a 1969 2000
133b 1968 1999
133c 1965 1999
----------------------------------------------------------------------------------------------------------------------------------
134 61.68 70.91 1977 1999
135 67.43 1999
136 65.31 1969/1987/1988/1994
137 57.27 1962 1999
138 70.76 1974
----------------------------------------------------------------------------------------------------------------------------------
139 51.81 1989
140 65.71 1920
141 60.18 62.64 1988
142 61.86 1929
143 61.63 1989
----------------------------------------------------------------------------------------------------------------------------------
144 59.49 1981/1982 1997
145 62.48 1971
146 71.28 1948/1963 1998/1999
147 60.86 1999
148 51.41 1965/1970 1999
----------------------------------------------------------------------------------------------------------------------------------
149 45.61 1978
150 1.65 1921 1990
151 60.63 1972
152 62.35 1967 1980
153 60.31 1994
----------------------------------------------------------------------------------------------------------------------------------
154 56.73 1964
155 57.33 1999
156 60.15 1963 1989
157 66.19 1914 1987
158 54.69 1998
----------------------------------------------------------------------------------------------------------------------------------
159 44.21 62.64 1981
160 60.34 1914 1995
161 2.15 1971 1995
162 54.61 1966 1999
163 68.14 1973 1996/1999
----------------------------------------------------------------------------------------------------------------------------------
164 72.66 76.65 1982
165 63.02 1982 1997
166 61.74 76.65 1983 1984
167 61.88 1912 1995
168 63.87 1967 1999
----------------------------------------------------------------------------------------------------------------------------------
169 61.65 70.91 1984
170 72.96 75.76 1963 1997/1998
171 54.07 1950
172 65.51 1964
173 59.95 1978
----------------------------------------------------------------------------------------------------------------------------------
174 49.88 1983
175 73.41 1950 1983
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CUT-OFF DATE
BALANCE PER
CONTROL UNITS, BEDS SQ. FT., UNIT, BED,
NUMBER ROOMS, SQFT UNIT DESCRIPTION PAD OR ROOM ($) OCCUPANCY (%) OCCUPANCY DATE
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1 1,230,001 Sq Ft 119 98 11/20/00
2 528,846 Sq Ft 191 90 09/06/00
3 635,737 Sq Ft 79 96 09/01/00
4 965 Rooms 32,610
4a 128 Rooms 73 08/31/00
4b 128 Rooms 84 08/31/00
4c 128 Rooms 87 08/31/00
4d 126 Rooms 74 08/31/00
4e 117 Rooms 75 08/31/00
4f 126 Rooms 62 08/31/00
4g 92 Rooms 69 08/31/00
4h 120 Rooms 80 08/31/00
----------------------------------------------------------------------------------------------------------------------------------
5 91 Units 329,438 100 09/28/00
6 360 Units 82,778 96 09/22/00
7 768 Units 36,902 96 08/24/00
8 269,107 Sq Ft 105
8a 111,933 Sq Ft 100 08/01/00
8b 97,874 Sq Ft 100 08/01/00
8c 59,300 Sq Ft 100 08/01/00
----------------------------------------------------------------------------------------------------------------------------------
9 435 Units 58,557 95 09/20/00
10 36,756 Sq Ft 544 100 10/18/00
11 302 Units 64,757 98 07/28/00
12 153,069 Sq Ft 127 98 06/30/00
13 600 Units 30,631 92 09/19/00
----------------------------------------------------------------------------------------------------------------------------------
14 167,177 Sq Ft 109
14a 39,218 Sq Ft 100 08/22/00
14b 39,218 Sq Ft 100 08/22/00
14c 62,740 Sq Ft 98 08/22/00
14d 26,001 Sq Ft 100 08/22/00
----------------------------------------------------------------------------------------------------------------------------------
15 185,613 Sq Ft 97 99 07/31/00
16 276 Units 57,359 98 09/18/00
17 107,262 Sq Ft 142 100 08/23/00
18 113,369 Sq Ft 134 100 08/15/00
19 253 Units 59,613 94 09/18/00
----------------------------------------------------------------------------------------------------------------------------------
20 112,287 Sq Ft 133 89 10/01/00
21 128,185 Sq Ft 109 96 06/28/00
22 408 Units 34,255 98 07/10/00
23 132,859 Sq Ft 100 80 09/19/00
24 352 Units 37,358 97 06/28/00
----------------------------------------------------------------------------------------------------------------------------------
25 336 Units 38,571 99 09/21/00
26 224,626 Sq Ft 57 95 09/15/00
27 240 Units 50,729 95 07/12/00
28 121 Rooms 100,195 79 03/31/00
29 165,417 Sq Ft 73 99 08/08/00
----------------------------------------------------------------------------------------------------------------------------------
30 114,354 Sq Ft 104 97 09/01/00
31 255 Rooms 41,105 78 04/30/00
32 106,323 Sq Ft 97 100 10/16/00
33 126,708 Sq Ft 76 94 10/01/00
34 305,870 Sq Ft 31 97 06/28/00
----------------------------------------------------------------------------------------------------------------------------------
35 91,332 Sq Ft 104 100 06/06/00
36 75,943 Sq Ft 125 100 07/21/00
37 74,338 Sq Ft 121 100 09/01/00
38 53,777 Sq Ft 164 94 09/28/00
39 48 Units 181,127 98 08/01/00
----------------------------------------------------------------------------------------------------------------------------------
40 98 Rooms 87,582 77 03/31/00
41 63,733 Sq Ft 114 100 08/17/00
42 260 Units 26,174 92 07/10/00
43 164 Units 40,785 95 08/01/00
44 220 Units 29,969 97 09/06/00
----------------------------------------------------------------------------------------------------------------------------------
45 239 Units 27,127 100 06/27/00
46 82,134 Sq Ft 79 100 10/01/00
47 62,611 Sq Ft 102 100 10/02/00
48 248 Units 24,811 96 09/05/00
49 150,032 Sq Ft 41 97 08/01/00
----------------------------------------------------------------------------------------------------------------------------------
50 113 Rooms 53,837 77 05/31/00
51 168 Units 36,224 96 08/29/00
52 91,178 Sq Ft 64 93 07/11/00
53 112 Rooms 51,665 72 06/30/00
54 200 Units 28,563 98 07/10/00
----------------------------------------------------------------------------------------------------------------------------------
55 168,775 Sq Ft 33 99 10/10/00
56 59,838 Sq Ft 93 100 08/28/00
57 70,440 Sq Ft 79 96 10/05/00
58 197 Units 27,771 98 07/25/00
59 181 Units 29,801 95 08/10/00
----------------------------------------------------------------------------------------------------------------------------------
60 95 Rooms 54,579 98 08/31/00
61 106,088 Sq Ft 48 83 08/01/00
62 39,192 Sq Ft 127 100 07/19/00
63 132 Units 37,853 96 08/25/00
64 199 Units 24,951
64a 77 Units 100 10/01/00
64b 94 Units 100 10/01/00
64c 28 Units 100 10/01/00
----------------------------------------------------------------------------------------------------------------------------------
65 45 Units 110,353 100 07/17/00
66 98 Units 49,398 91 07/01/00
67 57,173 Sq Ft 84 92 07/31/00
68 188 Units 25,503 93 07/10/00
69 135,962 Sq Ft 35 100 05/18/00
----------------------------------------------------------------------------------------------------------------------------------
70 33,104 Sq Ft 141 100 06/06/00
71 27,974 Sq Ft 166 100 07/12/00
72 139,600 Sq Ft 32 85 10/25/00
73 64,200 Sq Ft 70 98 09/26/00
74 168 Units 26,460 98 09/06/00
----------------------------------------------------------------------------------------------------------------------------------
75 78 Rooms 56,219 83 08/30/00
76 82,342 Sq Ft 51 96 08/28/00
77 66,922 Sq Ft 62 100 09/22/00
78 28,368 Sq Ft 144 95 09/25/00
79 38 Units 105,558 100 08/31/00
----------------------------------------------------------------------------------------------------------------------------------
80 118,120 Sq Ft 33 88 07/01/00
81 98 Rooms 38,637 72 08/30/00
82 25,765 Sq Ft 146 100 07/01/00
83 120 Rooms 30,729 73 08/30/00
84 65,630 Sq Ft 54 95 07/24/00
----------------------------------------------------------------------------------------------------------------------------------
85 74,747 Sq Ft 47 100 08/22/00
86 140 Units 24,597
86a 36 Units 92 06/30/00
86b 8 Units 88 06/30/00
86c 8 Units 100 06/30/00
86d 6 Units 100 06/30/00
86e 12 Units 100 06/30/00
86f 70 Units 93 07/12/00
----------------------------------------------------------------------------------------------------------------------------------
87 50,000 Sq Ft 68 100 05/01/00
88 32,268 Sq Ft 105 100 04/18/00
89 72 Units 45,784 100 06/06/00
90 110 Rooms 29,900 81 07/31/00
91 118 Pads 27,571 100 07/05/00
----------------------------------------------------------------------------------------------------------------------------------
92 118 Units 27,271 98 05/31/00
93 55,511 Sq Ft 58
93a 20,541 Sq Ft 100 09/01/00
93b 34,970 Sq Ft 100 09/01/00
94 58,705 Sq Ft 54 76 10/04/00
----------------------------------------------------------------------------------------------------------------------------------
95 34 Units 93,905 100 09/19/00
96 43,600 Sq Ft 72 97 09/06/00
97 25,756 Sq Ft 120 98 09/19/00
98 30,725 Sq Ft 97 100 07/13/00
99 56 Units 53,482 95 08/01/00
----------------------------------------------------------------------------------------------------------------------------------
100 120 Units 24,530 95 07/12/00
101 66 Units 44,238 98 07/01/00
102 76,286 Sq Ft 38 91 04/01/00
103 57,974 Sq Ft 49 100 07/12/00
104 16,800 Sq Ft 157 90 09/06/00
----------------------------------------------------------------------------------------------------------------------------------
105 34,262 Sq Ft 74 100 07/05/00
106 44,335 Sq Ft 56 100 08/18/00
107 29,325 Sq Ft 84 100 09/01/00
108 26,069 Sq Ft 93 100 05/19/00
109 199 Pads 12,019 100 06/01/00
----------------------------------------------------------------------------------------------------------------------------------
110 41,916 Sq Ft 57 92 07/31/00
111 25,575 Sq Ft 92 100 08/15/00
112 220 Units 10,319 97 06/01/00
113 31,440 Sq Ft 71 97 10/04/00
114 16,908 Sq Ft 132 100 07/01/00
----------------------------------------------------------------------------------------------------------------------------------
115 21 Units 104,549 100 07/15/00
116 92,910 Sq Ft 23 77 10/03/00
117 19,213 Sq Ft 109 89 08/23/00
118 34,430 Sq Ft 58 100 08/01/00
119 72 Units 27,708 94 04/30/00
----------------------------------------------------------------------------------------------------------------------------------
120 22 Units 90,714 100 07/13/00
121 14,546 Sq Ft 137 100 07/25/00
122 45,725 Sq Ft 44 100 06/01/00
123 106 Units 18,450 99 07/31/00
124 20,743 Sq Ft 94 100 07/01/00
----------------------------------------------------------------------------------------------------------------------------------
125 22,915 Sq Ft 82 100 04/24/00
126 30 Units 59,494 97 04/14/00
127 94 Units 18,551 97 05/01/00
128 96 Units 17,902 97 03/01/00
129 18,192 Sq Ft 94 100 07/01/00
----------------------------------------------------------------------------------------------------------------------------------
130 58 Units 29,245 95 06/27/00
131 37,407 Sq Ft 45 85 06/30/00
132 18,120 Sq Ft 93 100 07/01/00
133 97 Units 16,209
133a 43 Units 100 09/01/00
133b 30 Units 100 09/01/00
133c 24 Units 100 09/01/00
----------------------------------------------------------------------------------------------------------------------------------
134 22,120 Sq Ft 68 93 04/20/00
135 10,249 Sq Ft 146 87 05/09/00
136 72 Pads 20,822 97 09/07/00
137 72 Units 20,493 100 04/22/00
138 36 Units 38,233 100 05/16/00
----------------------------------------------------------------------------------------------------------------------------------
139 33,626 Sq Ft 40 100 08/01/00
140 33,000 Sq Ft 41 100 08/12/00
141 21,160 Sq Ft 63 100 09/26/00
142 54 Units 24,635 100 06/02/00
143 16,527 Sq Ft 79 100 08/01/00
----------------------------------------------------------------------------------------------------------------------------------
144 29,956 Sq Ft 42 100 09/30/00
145 56 Units 21,612 98 03/31/00
146 44 Units 27,201 96 09/18/00
147 12,900 Sq Ft 90 100 09/01/00
148 88 Units 12,417 97 08/01/00
----------------------------------------------------------------------------------------------------------------------------------
149 23,860 Sq Ft 46 100 06/01/00
150 31 Units 34,790 97 04/08/00
151 60 Units 18,265 93 07/01/00
152 18,661 Sq Ft 53 99 06/15/00
153 7,008 Sq Ft 142 100 09/24/00
----------------------------------------------------------------------------------------------------------------------------------
154 16,802 Sq Ft 59 100 09/24/00
155 14,570 Sq Ft 68 100 06/14/00
156 108 Units 9,222 99 06/02/00
157 17,471 Sq Ft 56 83 09/01/00
158 38,650 Sq Ft 25 89 08/07/00
----------------------------------------------------------------------------------------------------------------------------------
159 31,918 Sq Ft 30 86 06/30/00
160 41 Units 22,888 100 08/07/00
161 29,200 Sq Ft 31 100 01/12/00
162 46,600 Sq Ft 19 100 05/25/00
163 54 Units 15,545 100 09/01/00
----------------------------------------------------------------------------------------------------------------------------------
164 24 Units 33,259 100 04/01/00
165 33 Units 23,841 97 04/17/00
166 10,500 Sq Ft 70 100 04/01/00
167 29 Units 24,888 100 08/07/00
168 8,530 Sq Ft 78 100 08/01/00
----------------------------------------------------------------------------------------------------------------------------------
169 19,800 Sq Ft 33 100 04/18/00
170 24 Units 26,617 100 06/30/00
171 47 Pads 13,455 96 06/01/00
172 23 Units 25,648 100 07/01/00
173 15,391 Sq Ft 36 90 07/01/00
----------------------------------------------------------------------------------------------------------------------------------
174 8,053 Sq Ft 63 100 05/22/00
175 17 Units 21,606 100 03/01/00
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ANNUAL
CONTROL REQUIRED ANNUAL
NUMBER OWNERSHIP INTEREST LOCKBOX RESERVES ($) REQUIRED TI/LC ($)
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1 Fee Simple Hard 184,500 1,300,000
2 Leasehold Hard
3 Fee Simple Hard 127,147 840,575
4 Hard
4a Fee Simple
4b Fee Simple
4c Fee Simple
4d Fee Simple
4e Fee Simple
4f Fee Simple
4g Fee Simple
4h Fee Simple
------------------------------------------------------------------------------------------------------------------------------
5 Fee Simple Hard 30,288
6 Fee Simple 72,000
7 Fee Simple Soft 192,000
8 Soft 40,366 174,175
8a Fee Simple
8b Fee Simple
8c Fee Simple
------------------------------------------------------------------------------------------------------------------------------
9 Fee Simple Soft 87,000
10 Leasehold Hard 7,347
11 Fee Simple 60,400
12 Fee Simple 29,083 41,000
13 Fee Simple 137,400
------------------------------------------------------------------------------------------------------------------------------
14 Hard 25,077 37,489
14a Fee Simple
14b Fee Simple
14c Fee Simple
14d Fee Simple
------------------------------------------------------------------------------------------------------------------------------
15 Fee Simple Hard 38,979 263,570
16 Fee Simple 55,200
17 Fee Simple 11,127
18 Fee Simple 16,555
19 Fee Simple 50,600
------------------------------------------------------------------------------------------------------------------------------
20 Fee Simple 19,089
21 Fee Simple 19,252 55,008
22 Fee Simple 122,400
23 Fee Simple 19,929
24 Fee Simple 52,800
------------------------------------------------------------------------------------------------------------------------------
25 Fee Simple 84,000
26 Leasehold 44,925 318,972
27 Fee Simple 48,000
28 Fee Simple 172,478
29 Fee Simple Soft 24,816 99,396
------------------------------------------------------------------------------------------------------------------------------
30 Fee Simple 17,157 84,996
31 Fee Simple Springing
32 Fee Simple 13,300 110,400
33 Fee Simple 31,680 75,000
34 Fee Simple 30,504 180,000
------------------------------------------------------------------------------------------------------------------------------
35 Fee Simple 18,266
36 Fee Simple 11,073
37 Fee Simple 2,330
38 Fee Simple 5,332 29,328
39 Fee Simple 9,600
------------------------------------------------------------------------------------------------------------------------------
40 Fee Simple 125,460
41 Fee Simple Hard 9,560
42 Fee Simple Soft 65,000
43 Fee Simple 40,750
44 Fee Simple 63,580
------------------------------------------------------------------------------------------------------------------------------
45 Fee Simple 60,228
46 Fee Simple Hard 16,427 80,046
47 Fee Simple 6,261 45,000
48 Fee Simple 62,000
49 Fee Simple 25,505 50,011
------------------------------------------------------------------------------------------------------------------------------
50 Fee Simple Springing 131,114
51 Fee Simple 33,600
52 Fee Simple 29,719
53 Fee Simple Springing 96,000
54 Fee Simple Soft 50,000
------------------------------------------------------------------------------------------------------------------------------
55 Fee Simple Springing 16,877 60,000
56 Fee Simple Hard 5,973
57 Fee Simple Soft 13,088 49,080
58 Fee Simple 49,250
59 Fee Simple Springing 45,250
------------------------------------------------------------------------------------------------------------------------------
60 Fee Simple Springing 76,218
61 Fee Simple 27,168 56,028
62 Fee Simple 7,856
63 Fee Simple 26,539
64 29,850
64a Fee Simple
64b Fee Simple
64c Fee Simple
------------------------------------------------------------------------------------------------------------------------------
65 Fee Simple Springing 11,250
66 Fee Simple 17,640
67 Fee Simple 17,724 25,156
68 Fee Simple Soft 47,000
69 Both Fee Simple and Leasehold Springing 20,394 28,516
------------------------------------------------------------------------------------------------------------------------------
70 Fee Simple 6,537 29,748
71 Fee Simple 23,352
72 Fee Simple 13,961 24,000
73 Fee Simple 12,840
74 Fee Simple 49,896
------------------------------------------------------------------------------------------------------------------------------
75 Fee Simple Springing 88,800
76 Fee Simple 19,762 63,403
77 Fee Simple 6,692 24,000
78 Fee Simple 3,404
79 Fee Simple 8,004
------------------------------------------------------------------------------------------------------------------------------
80 Fee Simple 30,629
81 Fee Simple Springing 90,000
82 Fee Simple 25,000
83 Fee Simple Springing 82,800
84 Fee Simple 16,407 32,400
------------------------------------------------------------------------------------------------------------------------------
85 Fee Simple Hard
86 38,358
86a Fee Simple
86b Fee Simple
86c Fee Simple
86d Fee Simple
86e Fee Simple
86f Fee Simple
------------------------------------------------------------------------------------------------------------------------------
87 Fee Simple 5,000
88 Fee Simple
89 Fee Simple 12,960
90 Fee Simple Springing 96,000
91 Fee Simple 5,960
------------------------------------------------------------------------------------------------------------------------------
92 Fee Simple 21,712
93 11,102 36,295
93a Fee Simple
93b Fee Simple
94 Fee Simple 5,865
------------------------------------------------------------------------------------------------------------------------------
95 Fee Simple 5,100
96 Fee Simple 4,360
97 Fee Simple 2,576 7,500
98 Fee Simple
99 Fee Simple 11,196
------------------------------------------------------------------------------------------------------------------------------
100 Fee Simple Soft 30,000
101 Fee Simple 17,886
102 Fee Simple 11,443 34,329
103 Fee Simple 5,797 24,000
104 Fee Simple 1,680 10,008
------------------------------------------------------------------------------------------------------------------------------
105 Fee Simple 6,167 16,680
106 Fee Simple 8,112 25,008
107 Fee Simple 29,256
108 Fee Simple 3,931 26,069
109 Fee Simple 16,158
------------------------------------------------------------------------------------------------------------------------------
110 Fee Simple 8,547 41,028
111 Fee Simple 7,157 12,000
112 Fee Simple
113 Fee Simple Springing 6,287 25,276
114 Fee Simple 2,536
------------------------------------------------------------------------------------------------------------------------------
115 Fee Simple 5,250
116 Fee Simple Hard 13,937 24,000
117 Fee Simple 3,840 8,460
118 Fee Simple 12,739
119 Fee Simple 12,960
------------------------------------------------------------------------------------------------------------------------------
120 Fee Simple 3,300
121 Fee Simple Springing 1,455
122 Fee Simple 4,573 13,332
123 Fee Simple 21,000
124 Fee Simple 2,074 12,000
------------------------------------------------------------------------------------------------------------------------------
125 Fee Simple 1,833 22,908
126 Fee Simple 8,134
127 Fee Simple 25,017
128 Fee Simple 27,168
129 Fee Simple 1,819 5,004
------------------------------------------------------------------------------------------------------------------------------
130 Fee Simple 8,700
131 Fee Simple 5,611 19,480
132 Fee Simple 1,812 24,204
133 16,320
133a Fee Simple
133b Fee Simple
133c Fee Simple
------------------------------------------------------------------------------------------------------------------------------
134 Fee Simple 6,000 21,900
135 Fee Simple 1,537 10,800
136 Fee Simple 6,080
137 Fee Simple Soft 18,000
138 Fee Simple 9,000
------------------------------------------------------------------------------------------------------------------------------
139 Fee Simple 5,044 27,910
140 Fee Simple 9,666 17,386
141 Fee Simple 5,290 18,300
142 Fee Simple 14,850
143 Fee Simple 4,455
------------------------------------------------------------------------------------------------------------------------------
144 Fee Simple Hard 7,489 11,084
145 Fee Simple 16,500
146 Fee Simple 11,000
147 Fee Simple 8,760
148 Fee Simple 21,996
------------------------------------------------------------------------------------------------------------------------------
149 Fee Simple 4,772 34,598
150 Fee Simple
151 Fee Simple 22,980
152 Fee Simple
153 Fee Simple 7,008
------------------------------------------------------------------------------------------------------------------------------
154 Fee Simple 2,520 19,104
155 Fee Simple 2,186
156 Fee Simple 22,833
157 Fee Simple
158 Fee Simple 3,865
------------------------------------------------------------------------------------------------------------------------------
159 Fee Simple 7,022 25,660
160 Fee Simple 10,250
161 Fee Simple 5,840 13,440
162 Fee Simple
163 Fee Simple 15,336
------------------------------------------------------------------------------------------------------------------------------
164 Fee Simple Hard
165 Fee Simple 10,197
166 Fee Simple Hard 9,216
167 Fee Simple 7,830
168 Fee Simple 1,284
------------------------------------------------------------------------------------------------------------------------------
169 Fee Simple 6,000 11,940
170 Fee Simple 3,600
171 Fee Simple
172 Fee Simple
173 Fee Simple 3,711
------------------------------------------------------------------------------------------------------------------------------
174 Fee Simple 1,208
175 Fee Simple Hard
------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CONTROL LARGEST TENANT LARGEST TENANT
NUMBER LARGEST TENANT SQ FT LEASE EXPIRATION
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1 J.C. Penney 104,697 11/30/12
2 Regal Cinemas 78,752 01/31/20
3 Columbine JDS Systems, Inc. 100,420 12/31/08
4
4a
4b
4c
4d
4e
4f
4g
4h
------------------------------------------------------------------------------------------------------------------------------------
5 New York University 98,522 08/31/10
6
7
8
8a Christmas Tree Shops 57,776 09/30/13
8b Christmas Tree Shops 51,074 05/20/18
8c Bernie's Audio Video 21,450 08/31/09
------------------------------------------------------------------------------------------------------------------------------------
9
10 Related Management Company 21,137 02/28/11
11
12 Ross Stores 30,000 01/31/06
13
------------------------------------------------------------------------------------------------------------------------------------
14
14a Piggly Wiggly 33,218 09/28/19
14b Piggly Wiggly 33,218 02/27/19
14c Piggly Wiggly 35,300 03/30/19
14d Piggly Wiggly 26,001 11/30/18
------------------------------------------------------------------------------------------------------------------------------------
15 Federal Data Systems 66,746 12/31/04
16
17 Lane Gorman Trubitt, LLP 24,565 06/30/08
18 Ralph's 57,155 01/31/19
19
------------------------------------------------------------------------------------------------------------------------------------
20 Sun & Ski Sports 26,138 04/30/09
21 Custom Research 29,618 08/31/08
22
23 Barnes & Noble 22,050 02/28/15
24
------------------------------------------------------------------------------------------------------------------------------------
25
26 CSX 70,592 05/31/05
27
28
29 Stein Mart #123 37,177 11/06/06
------------------------------------------------------------------------------------------------------------------------------------
30 Miller, Canfield, Paddock 18,397 07/31/03
31
32 Netensity, Inc. 24,798 06/30/05
33 Bowl America 34,425 07/31/01
34 K-Mart 89,445 03/31/02
------------------------------------------------------------------------------------------------------------------------------------
35 Avanex Corporation 91,332 04/14/10
36 Lutris Technologies Inc. 28,199 12/31/03
37 Ralphs Grocery Store 51,028 02/28/19
38 Softhome, Inc. 16,499 09/11/13
39
------------------------------------------------------------------------------------------------------------------------------------
40
41 Farm Fresh 46,933 04/01/20
42
43
44
------------------------------------------------------------------------------------------------------------------------------------
45
46 Sisna 10,829 05/31/07
47 Regence Blue Shield of Idaho 25,038 08/31/06
48
49 TCM Supply Corporation 8,460 08/14/05
------------------------------------------------------------------------------------------------------------------------------------
50
51
52 Food 4 Less #5 42,275 12/01/14
53
54
------------------------------------------------------------------------------------------------------------------------------------
55 Wal-Mart 65,904 11/17/06
56 Lakeview Technology, Inc. 22,032 04/30/10
57 Gold's Gym (D&B Enterprises) 19,964 08/31/10
58
59
------------------------------------------------------------------------------------------------------------------------------------
60
61 Ames 43,020 02/28/19
62 Prime Pay Northern 5,290 06/14/02
63
64
64a
64b
64c
------------------------------------------------------------------------------------------------------------------------------------
65
66
67 Pier 1 Imports 9,400 02/29/08
68
69 Wal-Mart 89,612 11/26/11
------------------------------------------------------------------------------------------------------------------------------------
70 Islands Publishing 12,769 09/30/01
71 Lucy's LaundryMart 6,448 03/31/10
72 Home-Guard Window Warehouse 45,800 02/28/13
73 Food Lion 33,000 04/01/20
74
------------------------------------------------------------------------------------------------------------------------------------
75
76 Goldcoast Autotronics, Inc. 6,782 09/30/04
77 Ohio Blood Plasma Inc. 20,475 02/29/04
78 Big 5 10,032 04/30/16
79
------------------------------------------------------------------------------------------------------------------------------------
80 Food Lion 37,920 10/14/16
81
82 Jonart Realty 7,205 10/31/01
83
84 Maxim Integrated Prod 15,581 12/31/02
------------------------------------------------------------------------------------------------------------------------------------
85 Amtech Systems Corporation 74,747 09/21/15
86
86a
86b
86c
86d
86e
86f
------------------------------------------------------------------------------------------------------------------------------------
87 Food Lion 33,000 04/11/20
88 Linens & Things 32,336 01/31/20
89
90
91
------------------------------------------------------------------------------------------------------------------------------------
92
93
93a Dental World Center 3,482 01/31/06
93b HD Systems, Inc. 9,970 11/30/03
94
------------------------------------------------------------------------------------------------------------------------------------
95
96 Food Lion 33,000 09/01/19
97 St. Joseph's 7,700 09/30/08
98 Best Buy 30,725 06/30/20
99
------------------------------------------------------------------------------------------------------------------------------------
100
101
102 Safe Passage PCSI 6,656 05/31/01
103 Desert Collectibles 5,559 06/01/05
104 Saddle Up Western Wear 3,700 08/31/05
------------------------------------------------------------------------------------------------------------------------------------
105 PBS&J 15,572 09/30/03
106 CQ2 Direct, Inc. 3,750 04/01/03
107 Shugrue's 10,516 12/31/06
108 East West Mortgage 6,188 02/28/07
109
------------------------------------------------------------------------------------------------------------------------------------
110 Drs. Mike and Art deLarios - Plaza I 6,194 08/31/03
111 King County Health 13,350 09/14/04
112
113 Austin Regional Clinic 11,771 12/31/07
114 Eckerd's 10,908 06/01/20
------------------------------------------------------------------------------------------------------------------------------------
115
116 Food Lion 28,200 01/09/08
117 Physical Rehabilitation Network 5,600 04/30/07
118 O'Malley's Bar 5,400 11/30/01
119
------------------------------------------------------------------------------------------------------------------------------------
120
121 Thomasville Furniture 14,546
122 Office Works 23,225 06/17/04
123
124 Adspace Networks, Inc. 10,253 09/30/05
------------------------------------------------------------------------------------------------------------------------------------
125 Louis Brandman & Sons 22,915 03/31/15
126
127
128
129 Parkway Products 7,690 10/15/06
------------------------------------------------------------------------------------------------------------------------------------
130
131 IOL Medical Services 15,522 05/31/05
132 AP Technoglass 12,830 08/31/05
133
133a
133b
133c
------------------------------------------------------------------------------------------------------------------------------------
134 Blockbuster Video 6,720 12/31/04
135 Pizza Hut 2,400 11/30/04
136
137
138
------------------------------------------------------------------------------------------------------------------------------------
139 Cypresswood Clinic Association 6,963 12/31/02
140 Passaic County Legal Aid 7,000 10/30/05
141 South College 21,160 12/31/01
142
143 First Security Service 3,176 07/31/04
------------------------------------------------------------------------------------------------------------------------------------
144 Southland Business Bank 8,458 12/31/09
145
146
147 Army/Navy Recruiting 3,600 02/28/01
148
------------------------------------------------------------------------------------------------------------------------------------
149 Gill Kveen 2,968 11/30/02
150
151
152
153 Arvida 3,112 12/31/02
------------------------------------------------------------------------------------------------------------------------------------
154 Master Systems 2,706 06/30/01
155 Texas Fulton 5,580 01/14/05
156
157 Gibson Management 3,012 05/31/02
158
------------------------------------------------------------------------------------------------------------------------------------
159 Monterrey Park College 7,359 05/31/03
160
161 Eastern State Tire 14,500 04/30/11
162 Independent Packaging 46,600 12/31/09
163
------------------------------------------------------------------------------------------------------------------------------------
164
165
166 Cumberland Farms 3,000 02/28/04
167
168 Radio Shack 2,625 08/31/04
------------------------------------------------------------------------------------------------------------------------------------
169 Time Out Sports Grill 4,600 12/31/01
170
171
172
173 Circle A 2,434 01/31/03
------------------------------------------------------------------------------------------------------------------------------------
174 Carson Insurance 1,930 11/30/03
175
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
CERTAIN CHARACTERISTICS OF THE MULTIFAMILY LOANS
<TABLE>
<CAPTION>
CONTROL LOAN
ID NUMBER PROPERTY NAME CITY
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
5 DBM13657 201 East 14th - Coral Tower New York
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
6 21015 St. Croix Apartments at Pelican Marsh Naples
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
7 DBM12838 Coral Gate Apartments Miami
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
9 DBM14078 Copper Canyon Apartments Las Vegas
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
11 28450 Governor's Square Apartments Sacramento
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
13 09-0001401 Harbor Pointe Apartments Orlando
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
16 09-0001403 Brittany at Waterford Lakes Apartments Orlando
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
19 09-0001402 Cross Timbers Apartments Morrisville
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
22 DBM11332 Colonial Townhouse Willimantic
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
24 11029240 DeZavala Oaks Apartments San Antonio
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
25 27395 Bound Brook Apartments Bound Brook
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
27 DBM12721 Napa Valley Apartments Henderson
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
39 09-0001398 Waterview Apartments Kirkland
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
42 991091256 Windover of Melbourne Apartments West Melbourne
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
43 DBM12582 Ridge Carlton Apartments Philadelphia
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
44 DBM13891 Whisper Hollow Austin
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
45 991091662 Park Colony Apartments Des Plaines
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
48 DBM14180 Chandler's Mill Apartments Corpus Christi
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
51 28492 Vistas at Northbrook Normal
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
54 991091255 Windover Health Club Apartments Orlando
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
58 11029222 The Willows Apartments Chesterfield Township
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
59 24767 Villages at McClintock Tempe
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
63 28616 Waterford at Summit View Apartments Swatara Township
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
65 DBM12720 Pennyfield Estates Bronx
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
64 01-1026848 Bongiovanni Apartment Portfolio
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
64a 01-1026848-A 2100 Westbury Court Apartments Brooklyn
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
64b 01-1026848-B 2110 Westbury Court Apartments Brooklyn
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
64c 01-1026848-C 3506 Newkirk Avenue Apartments Brooklyn
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
66 09-0001391 Crystal Lake Apartments Corvallis
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
68 991091257 Windover Golden Pointe West Melbourne
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
74 DBM13892 High Point Apartments Austin
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
79 09-0001382 Sequoia Grove Danville
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
86 01-1026840 Kendall Apartment Portfolio
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
86a 01-1026840-A 39th Street Apartments Bettendorf
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
86b 01-1026840-B Sutton Place Apartments Bettendorf
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
86c 01-1026840-C Winston Drive Apartments Bettendorf
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
86d 01-1026840-D 25th Street Apartments Moline
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
86e 01-1026840-E Kennedy Drive Apartments East Moline
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
86f 01-1026840-F Loganwood Apartments Moline
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
89 09-0001366 Mill Plain Court Apartments Vancouver
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
92 991091668 Suncrest Village Apartments Houston
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
95 09-0001411 Garden Court Apartments Seattle
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
99 28394 Pine Circle Townhomes Grand Rapids
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
100 991091254 Windover of Fort Pierce Apartments Ft. Pierce
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
101 09-0001373 Muir Heights Apartments Madison
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
112 27764 Timberlake Courts Apartments Beaumont
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
115 991091654 Beacon Commons Pittsburgh
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
120 01-1026870 Ashley Apartment Building St. Louis
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
119 01-1025159 Highland Park Apartments Portland
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
123 01-1028013 Carlton Heights Apartments Dallas
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
126 991091646 Empire Building Philadelphia
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
127 991091669 Courtyard Park Hyattsville
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
128 991091631 Lansdale & Five Points Apartments Norfolk
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
130 01-1027426 Colonial Apartments Seymour
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
133 01-1024923 Trinity Towers, Brittany and Wagner Apartments
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
133a 01-1024923-A Trinity Towers Apartments Hartford
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
133b 01-1024923-B Brittany Apartments Hartford
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
133c 01-1024923-C Wagner Apartments Hartford
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
137 991091626 Carrollton/Del-Mar Apartments Carrollton
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
138 991091624 Grand Manor Apartments Apple Valley
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
142 991091635 Ath-Dara Lansdowne
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
145 991091644 Descanso Plaza Apartments Aurora
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
146 01-1027009 Hudson Place Apartments Dallas
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
151 991091628 Wexford Apartments Pottstown
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
148 26252 Hunt Club Apartments Denton
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
150 991091619 Bluebird Apartments St. Paul
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
156 991091663 Wheatley Plaza Apartments Houston
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
160 01-1027879 374 South 5th Street Apartments Brooklyn
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
163 28992 Brentstone Apartments Pascagoula
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
164 991091650 Metacom Apartments Bristol
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
165 991091634 Oak Apartments Tampa
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
167 01-1028782 367 South 5th Street Multifamily Brooklyn
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
170 01-1028014 Fairfield Apartments Richardson
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
172 991091651 Willow Lane Apartments Bronx (Pelham Bay)
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
175 991091658 15-17 Massasoit Avenue Bristol
--------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CUT-OFF
CUT-OFF DATE DATE BALANCE
COUNTY STATE ZIP CODE BALANCE ($) PER UNIT ($)
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
New York NY 10003 29,978,826 329,438
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
Collier FL 34109 29,800,000 82,778
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
Dade FL 33015 28,340,494 36,902
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
Clark NV 89118 25,472,358 58,557
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
Sacramento CA 95814 19,556,631 64,757
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
Orange FL 32822 18,378,727 30,631
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
Orange FL 32828 15,831,186 57,359
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
Wake NC 27560 15,082,077 59,613
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
Tolland and Windham CT 06226 13,976,203 34,255
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
Bexar TX 78249 13,150,000 37,358
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
Somerset NJ 08805 12,960,000 38,571
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
Clark NV 89012 12,174,928 50,729
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
King WA 98033 8,694,103 181,127
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
Brevard FL 32904 6,805,233 26,174
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
Philadelphia PA 19128 6,688,696 40,785
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
Travis TX 78741 6,593,077 29,969
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
Cook IL 60016 6,483,295 27,127
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
Nueces TX 78414 6,153,139 24,811
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
McLean IL 61761 6,085,660 36,224
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
Orange FL 32839 5,712,604 28,563
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
Macomb MI 48045 5,470,868 27,771
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
Maricopa AZ 85281 5,393,921 29,801
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
Dauphin PA 17111 4,996,645 37,853
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
Bronx NY 10465 4,965,878 110,353
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
4,965,197 24,951
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
Kings NY 11225
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
Kings NY 11225
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
Kings NY 11225
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
Benton OR 97333 4,840,999 49,398
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
Brevard FL 32904 4,794,596 25,503
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
Travis TX 78741 4,445,332 26,460
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
Contra Costa CA 94526 4,011,196 105,558
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
3,443,562 24,597
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
Scott IA 52722
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
Scott IA 52722
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
Scott IA 52722
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
Rock Island IL 61265
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
Rock Island IL 61244
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
Rock Island IL 61265
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
Clark WA 98684 3,296,462 45,784
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
Harris TX 77072 3,217,979 27,271
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
King County WA 98112 3,192,777 93,905
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
Kent MI 49548 2,994,976 53,482
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
St. Lucie FL 34981 2,943,612 24,530
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
Dane WI 53719 2,919,727 44,238
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
Jefferson TX 77707 2,270,127 10,319
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
Allegheny PA 15217 2,195,529 104,549
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
St. Louis MO 63108 1,995,716 90,714
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
Multnomah OR 97203 1,994,979 27,708
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
Dallas TX 75243 1,955,735 18,450
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
Pennsylvania PA 19107 1,784,821 59,494
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
Prince Georges MD 20781 1,743,813 18,551
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
City of Norfolk VA 23513 1,718,602 17,902
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
New Haven CT 06483 1,696,238 29,245
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
1,572,308 16,209
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
Hartford CT 6106
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
Hartford CT 6106
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
Hartford CT 6106
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
Dallas TX 75211 1,475,493 20,493
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
Dakota MN 55124 1,376,391 38,233
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
Delaware PA 19050 1,330,267 24,635
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
Adams CO 80010 1,210,266 21,612
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
Dallas TX 75206 1,196,844 27,201
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
Montgomery PA 19464 1,095,911 18,265
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
Denton TX 76201 1,092,670 12,417
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
Ramsey MN 55117 1,078,500 34,790
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
Harris TX 77020 995,926 9,222
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
Kings NY 11211 938,394 22,888
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
Jackson MS 39567 839,427 15,545
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
Bristol RI 02809 798,215 33,259
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
Hillsborough FL 33637 786,737 23,841
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
Kings NY 11211 721,765 24,888
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
Dallas TX 75081 638,819 26,617
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
Bronx NY 10461 589,904 25,648
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
Bristol RI 02809 367,295 21,606
--------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
STUDIOS 1 BEDROOM 2 BEDROOM
AVG RENT AVG RENT AVG RENT
UTILITIES PAID BY TENANT # UNITS PER MO. ($) # UNITS PER MO. ($) # UNITS PER MO. ($)
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Gas/Electricity/Cable 0 0 26 0 52 0
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
Electricity 0 0 72 799 216 999
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
Water/Electricity/Cable 99 577 428 684 216 840
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
Water/Gas/Electricity/Cable 0 0 182 715 192 879
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
Electricity/Cable 0 0 159 821 113 1112
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
Electricity 0 0 319 516 281 594
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
Electricity 0 0 80 738 156 858
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
Gas/Electricity 0 0 86 728 139 892
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
Electricity 0 0 272 533 136 600
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
Electricity 0 0 176 552 160 675
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
Gas/Electricity/Cable 0 0 228 650 108 750
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
Electricity 0 0 112 653 112 778
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
Electricity 0 0 17 1472 31 2487
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
Water/Electricity/Cable 0 0 84 469 168 529
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
Electricity/Cable 0 0 95 634 69 747
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
Electricity/Cable 0 0 164 562 56 797
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
Electricity 0 0 163 762 75 919
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
Water/Gas/Electricity/Cable 0 0 160 499 88 638
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
Gas/Electricity/Cable 0 0 0 0 72 605
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
Water/Electricity/Cable 40 475 60 550 80 633
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
Electricity 22 387 139 536 36 648
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
Gas/Electricity/Cable 24 521 8 575 149 615
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
Gas/Electricity/Cable 0 0 0 0 62 500
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
0 0 0 0 15 1192
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
0 0 54 532 17 617
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
23 443 54 480 0 0
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
0 0 0 0 28 519
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
Electricity 0 0 12 555 70 656
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
Water/Electricity 0 0 60 489 120 519
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
Electricity/Cable 0 0 152 587 16 825
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
Gas/Electricity 0 0 0 0 38 1476
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
Gas/Electricity 0 0 8 395 28 455
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
Water/Gas/Electricity/Cable/Trash 0 0 0 0 8 556
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
Electricity 0 0 0 0 8 556
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
Gas/Electricity 0 0 0 0 6 449
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
Gas/Electricity 0 0 0 0 12 541
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
Electricity 0 0 40 410 22 510
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
Electricity 0 0 16 572 48 668
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
Electricity 0 0 0 0 118 666
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
Water/Gas/Electricity/Sewer 0 0 29 961 5 1475
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
Gas/Electricity/Cable 0 0 0 0 0 0
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
Water/Electricity/Cable 0 0 40 485 80 565
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
Electricity 0 0 44 0 22 0
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
Gas/Electricity/Cable 2 250 147 350 71 445
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
Gas/Electricity 0 0 0 0 0 0
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
Electricity 0 0 3 773 18 1350
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
0 0 13 485 58 540
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
0 0 0 0 106 550
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
Electricity 0 0 30 700 0 0
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
0 0 47 595 47 710
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
Electricity 0 0 66 401 30 459
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
Electricity 0 0 34 540 24 675
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
Electricity 0 0 43 495 0 0
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
Electricity 0 0 30 484 0 0
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
Electricity 0 0 24 478 0 0
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
0 0 40 523 32 625
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
Electricity 0 0 7 489 17 565
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
Gas/Electricity 0 0 41 513 13 695
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
Electricity 0 0 39 477 17 610
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
0 0 28 656 16 745
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
Electricity 5 428 20 472 35 535
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
Cable 2 350 76 450 10 580
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
Electricity 16 482 15 533 0 0
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
Gas/Electricity 0 0 0 0 108 397
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
Gas/Electricity 0 0 17 612 21 795
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
Gas/Electricity/Cable 0 0 18 380 36 495
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
Electricity 0 0 1 400 15 560
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
Water/Electricity 0 0 0 0 33 474
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
Gas/Electricity 0 0 9 675 18 735
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
0 0 0 0 24 625
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
Electricity 0 0 20 569 3 475
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
Electricity 0 0 10 423 7 480
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
3 BEDROOM 4 BEDROOM 5 BEDROOM NUMBER
AVG RENT AVG RENT AVG RENT OF
# UNITS PER MO. ($) # UNITS PER MO. ($) # UNITS PER MO. ($) ELEVATORS
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
13 0 0 0 0 0 2
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
72 1299 0 0 0 0 0
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
25 1035 0 0 0 0 6
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
61 1055 0 0 0 0 0
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
30 1238 0 0 0 0 9
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
0 0 0 0 0 0 0
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
40 1040 0 0 0 0 0
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
28 1114 0 0 0 0 0
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
0 0 0 0 0 0 0
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
16 885 0 0 0 0 0
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
0 0 0 0 0 0 0
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
16 983 0 0 0 0 0
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
0 0 0 0 0 0 1
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
8 715 0 0 0 0 0
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
0 0 0 0 0 0 2
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
0 0 0 0 0 0 0
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
1 1360 0 0 0 0 0
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
0 0 0 0 0 0 0
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
96 650 0 0 0 0 0
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
20 779 0 0 0 0 0
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
0 0 0 0 0 0 0
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
0 0 0 0 0 0 0
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
70 701 0 0 0 0 0
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
30 1554 0 0 0 0 0
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
6 724 0 0 0 0 1
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
17 151 0 0 0 0 1
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
0 0 0 0 0 0 1
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
15 852 1 950 0 0 0
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
8 715 0 0 0 0 0
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
0 0 0 0 0 0 0
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
0 0 0 0 0 0 0
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
0 0 0 0 0 0 0
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
0 0 0 0 0 0 0
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
0 0 0 0 0 0 0
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
0 0 0 0 0 0 0
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
0 0 0 0 0 0 0
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
8 575 0 0 0 0 0
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
8 807 0 0 0 0 0
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
0 0 0 0 0 0 0
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
0 0 0 0 0 0 1
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
56 806 0 0 0 0 0
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
0 0 0 0 0 0 0
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
0 0 0 0 0 0 0
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
0 0 0 0 0 0 0
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
21 1418 0 0 0 0 0
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
1 3500 0 0 0 0 0
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
1 685 0 0 0 0 0
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
0 0 0 0 0 0 0
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
0 0 0 0 0 0 1
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
0 0 0 0 0 0 0
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
0 0 0 0 0 0 0
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
0 0 0 0 0 0 0
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
0 0 0 0 0 0 1
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
0 0 0 0 0 0 1
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
0 0 0 0 0 0 1
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
0 0 0 0 0 0 0
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
12 719 0 0 0 0 0
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
0 0 0 0 0 0 0
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
0 0 0 0 0 0 0
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
0 0 0 0 0 0 0
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
0 0 0 0 0 0 0
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
0 0 0 0 0 0 0
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
0 0 0 0 0 0 1
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
0 0 0 0 0 0 0
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
2 970 0 0 0 0 0
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
0 0 0 0 0 0 0
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
8 650 0 0 0 0 0
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
0 0 0 0 0 0 0
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
2 649 0 0 0 0 0
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
0 0 0 0 0 0 0
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
0 0 0 0 0 0 0
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
0 0 0 0 0 0 0
--------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
DISTRIBUTION OF CUT-OFF DATE PRINCIPAL BALANCES
<TABLE>
<CAPTION>
PERCENTAGE
OF
NUMBER AGGREGATE MINIMUM MAXIMUM AVERAGE
CUT-OFF DATE OF CUT-OFF CUT-OFF CUT-OFF CUT-OFF
BALANCE MORTGAGED CUT-OFF DATE DATE DATE DATE DATE
DISTRIBUTION LOANS BALANCE BALANCE BALANCE BALANCE BALANCE
---------------------------- ----------- ----------------- ------------ --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
$367,295 - 499,999 1 $ 367,295 0.03% $ 367,295 $ 367,295 $ 367,295
500,000 - 999,999 23 18,679,381 1.47 507,960 998,471 812,147
1,000,000 - 1,999,999 33 50,554,656 3.97 1,078,500 1,996,709 1,531,959
2,000,000 - 2,999,999 21 52,478,177 4.12 2,009,661 2,995,161 2,498,961
3,000,000 - 3,999,999 18 61,206,038 4.80 3,077,983 3,839,200 3,400,335
4,000,000 - 4,999,999 18 82,702,845 6.49 4,011,196 4,996,645 4,594,603
5,000,000 - 5,999,999 10 55,125,932 4.32 5,094,598 5,828,362 5,512,593
6,000,000 - 6,999,999 10 63,924,083 5.01 6,083,592 6,805,233 6,392,408
7,000,000 - 7,999,999 1 7,272,151 0.57 7,272,151 7,272,151 7,272,151
8,000,000 - 8,999,999 4 35,101,387 2.75 8,583,025 8,990,766 8,775,347
9,000,000 - 9,999,999 4 37,992,471 2.98 9,455,001 9,579,724 9,498,118
10,000,000 - 11,999,999 3 32,707,519 2.57 10,343,223 11,882,403 10,902,506
12,000,000 - 13,999,999 9 116,433,805 9.13 12,029,212 13,976,203 12,937,089
14,000,000 - 16,999,999 5 76,279,887 5.98 14,939,887 15,831,186 15,255,977
17,000,000 - 19,999,999 6 113,692,119 8.92 18,068,851 19,986,797 18,948,687
25,000,000 - 49,999,999 7 223,358,047 17.52 25,472,358 49,966,246 31,908,292
50,000,000 - 145,831,430 2 246,831,430 19.36 101,000,000 145,831,430 123,415,715
-- -------------- ------
Total/Avg./Wtd.
Avg./Min/Max: 175 $1,274,707,224 100.00% $ 367,295 $145,831,430 $ 7,284,041
=== ============== ======
<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>
$367,295 - 499,999 1.25x 1.25x 1.25x 9.140% 115.0 79.85% 79.85% 79.85%
500,000 - 999,999 1.20 1.52 1.33 8.653 116.0 49.14 79.82 68.15
1,000,000 - 1,999,999 1.15 1.55 1.33 8.386 114.5 50.49 80.63 70.31
2,000,000 - 2,999,999 1.20 1.54 1.32 8.369 116.8 54.38 79.84 71.26
3,000,000 - 3,999,999 1.20 2.07 1.40 8.337 116.7 54.09 79.91 70.92
4,000,000 - 4,999,999 1.17 1.63 1.31 8.361 120.4 56.44 84.69 71.85
5,000,000 - 5,999,999 1.20 1.65 1.35 8.455 117.4 64.01 79.29 72.43
6,000,000 - 6,999,999 1.18 1.50 1.30 8.257 121.0 69.71 84.82 76.40
7,000,000 - 7,999,999 1.23 1.23 1.23 8.150 118.0 79.91 79.91 79.91
8,000,000 - 8,999,999 1.24 1.40 1.30 8.408 114.8 69.55 79.56 72.89
9,000,000 - 9,999,999 1.28 1.48 1.34 8.298 116.2 66.52 74.04 70.49
10,000,000 - 11,999,999 1.25 1.46 1.34 8.269 118.7 71.46 79.22 74.63
12,000,000 - 13,999,999 1.20 1.41 1.25 8.327 117.0 63.57 80.00 73.94
14,000,000 - 16,999,999 1.23 1.33 1.27 7.959 117.8 75.39 79.87 78.26
17,000,000 - 19,999,999 1.20 1.30 1.25 8.116 117.2 67.98 79.42 75.06
25,000,000 - 49,999,999 1.19 2.03 1.43 8.148 126.2 44.45 78.72 67.55
50,000,000 - 145,831,430 1.58 2.17 1.82 7.708 118.0 46.54 58.33 53.51
Total/Avg./Wtd.
Avg./Min/Max: 1.15x 2.17x 1.43x 8.147% 119.1 44.45% 84.82% 68.58%
</TABLE>
A-13
<PAGE>
DISTRIBUTION OF PROPERTY TYPES
<TABLE>
<CAPTION>
PERCENTAGE
OF
NUMBER AGGREGATE MINIMUM MAXIMUM AVERAGE
OF CUT-OFF CUT-OFF CUT-OFF CUT-OFF
MORTGAGED CUT-OFF DATE DATE DATE DATE DATE
PROPERTY TYPE PROPERTIES BALANCE BALANCE BALANCE BALANCE BALANCE
------------------ ------------ ----------------- ------------ ------------- --------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Retail 52 $ 522,224,773 40.97% $ 507,960 $145,831,430 $10,042,784
Multifamily 72 389,271,657 30.54 134,895 29,978,826 5,406,551
Office 33 200,045,888 15.69 948,369 49,966,246 6,061,997
Lodging 18 94,859,820 7.44 1,223,763 12,123,647 5,269,990
Industrial 14 45,933,861 3.60 872,266 9,477,053 3,280,990
Mixed Use 1 9,455,001 0.74 9,455,001 9,455,001 9,455,001
Mobile Home Park 4 7,776,844 0.61 632,405 3,253,412 1,944,211
Self-Storage 3 5,139,379 0.40 951,204 3,194,811 1,713,126
-- -------------- ------
Total/Avg./Wtd.
Avg./Min/Max: 197 $1,274,707,224 100.00% $ 134,895 $145,831,430 $ 6,470,595
=== ============== ======
<CAPTION>
WEIGHTED WEIGHTED
MINIMUM MAXIMUM AVERAGE AVERAGE WEIGHTED
DEBT DEBT DEBT WEIGHTED REMAINING MINIMUM MAXIMUM AVERAGE
SERVICE SERVICE SERVICE AVERAGE TERM TO CUT-OFF CUT-OFF CUT-OFF
COVERAGE COVERAGE COVERAGE MORTGAGE MATURITY DATE DATE DATE
PROPERTY TYPE RATIO RATIO RATIO RATE (MOS) LTV LTV LTV
------------------ ---------- ---------- ---------- ---------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Retail 1.20x 2.17x 1.54x 8.021% 117.5 46.54% 79.91% 64.72%
Multifamily 1.15 1.55 1.27 8.128 123.0 60.13 84.82 74.68
Office 1.20 1.62 1.34 8.209 117.5 49.14 79.86 70.33
Lodging 1.40 2.07 1.69 8.632 116.7 44.45 77.99 60.59
Industrial 1.20 1.68 1.35 8.389 117.4 54.38 79.69 69.94
Mixed Use 1.33 1.33 1.33 7.940 118.0 68.51 68.51 68.51
Mobile Home Park 1.24 1.52 1.36 8.587 116.5 62.94 75.66 69.99
Self-Storage 1.31 1.42 1.35 8.750 116.3 61.25 73.58 64.27
Total/Avg./Wtd.
Avg./Min/Max: 1.15x 2.17x 1.43x 8.147% 119.1 44.45% 84.82% 68.58%
</TABLE>
A-14
<PAGE>
DISTRIBUTION OF ANNUALIZED DEBT SERVICE COVERAGE RATIOS (NCF)
<TABLE>
<CAPTION>
PERCENTAGE
OF
NUMBER AGGREGATE MINIMUM MAXIMUM AVERAGE
RANGE OF DEBT OF CUT-OFF CUT-OFF CUT-OFF CUT-OFF
SERVICE COVERAGE MORTGAGE CUT-OFF DATE DATE DATE DATE DATE
RATIOS LOANS BALANCE BALANCE BALANCE BALANCE BALANCE
------------------ ---------- ----------------- ------------ --------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
1.11 - 1.19 4 $ 41,960,805 3.29% $ 1,078,500 $ 29,800,000 $ 10,490,201
1.20 - 1.29 99 610,308,747 47.88 367,295 28,340,494 6,164,735
1.30 - 1.39 33 136,686,398 10.72 507,960 19,457,892 4,142,012
1.40 - 1.49 20 158,374,808 12.42 546,974 49,966,246 7,918,740
1.50 - 1.59 11 169,390,189 13.29 948,369 145,831,430 15,399,108
1.60 - 1.69 4 18,442,651 1.45 3,496,165 5,566,570 4,610,663
1.90 - 1.99 1 3,288,994 0.26 3,288,994 3,288,994 3,288,994
2.00 - 2.09 2 35,254,632 2.77 3,786,431 31,468,201 17,627,316
2.10 - 2.19 1 101,000,000 7.92 101,000,000 101,000,000 101,000,000
-- -------------- ------
Total/Avg./Wtd.
Avg./Min/Max: 175 $1,274,707,224 100.00% $ 367,295 $145,831,430 $ 7,284,041
=== ============== ======
<CAPTION>
WEIGHTED WEIGHTED
MINIMUM MAXIMUM AVERAGE AVERAGE WEIGHTED
DEBT DEBT DEBT WEIGHTED REMAINING MINIMUM MAXIMUM AVERAGE
RANGE OF DEBT SERVICE SERVICE SERVICE AVERAGE TERM TO CUT-OFF CUT-OFF CUT-OFF
SERVICE COVERAGE COVERAGE COVERAGE COVERAGE MORTGAGE MATURITY DATE DATE DATE
RATIOS RATIO RATIO RATIO RATE (MOS) LTV LTV LTV
------------------ ---------- ---------- ---------- ---------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1.11 - 1.19 1.15x 1.19x 1.19x 8.309% 174.1 66.17% 84.82% 77.00%
1.20 - 1.29 1.20 1.29 1.25 8.237 117.3 57.41 80.00 75.04
1.30 - 1.39 1.30 1.38 1.33 8.209 116.5 59.07 79.69 73.55
1.40 - 1.49 1.40 1.49 1.46 8.268 117.2 54.38 80.63 67.34
1.50 - 1.59 1.50 1.59 1.57 7.955 117.0 49.14 75.95 59.31
1.60 - 1.69 1.62 1.68 1.64 8.364 117.8 56.44 67.07 61.54
1.90 - 1.99 1.97 1.97 1.97 8.650 116.0 56.71 56.71 56.71
2.00 - 2.09 2.03 2.07 2.03 8.430 118.7 44.45 54.09 45.49
2.10 - 2.19 2.17 2.17 2.17 7.437 118.0 46.54 46.54 46.54
Total/Avg./Wtd.
Avg./Min/Max: 1.15x 2.17x 1.43x 8.147% 119.1 44.45% 84.82% 68.58%
</TABLE>
A-15
<PAGE>
DISTRIBUTION OF MORTGAGE INTEREST RATES
<TABLE>
<CAPTION>
PERCENTAGE
OF
NUMBER AGGREGATE MINIMUM MAXIMUM AVERAGE
RANGE OF OF CUT-OFF CUT-OFF CUT-OFF CUT-OFF
MORTGAGE MORTGAGE CUT-OFF DATE DATE DATE DATE DATE
INTEREST RATES LOANS BALANCE BALANCE BALANCE BALANCE BALANCE
----------------- ---------- ----------------- ------------ --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
7.2501 - 7.5000 1 $ 101,000,000 7.92% $101,000,000 $101,000,000 $101,000,000
7.5001 - 7.7500 1 29,978,826 2.35 29,978,826 29,978,826 29,978,826
7.7501 - 8.0000 18 324,765,529 25.48 839,427 145,831,430 18,042,529
8.0001 - 8.2500 50 352,726,473 27.67 721,765 28,331,922 7,054,529
8.2501 - 8.5000 54 325,690,210 25.55 652,218 31,468,201 6,031,300
8.5001 - 8.7500 34 93,069,078 7.30 507,960 13,947,530 2,737,326
8.7501 - 9.0000 12 37,304,834 2.93 546,974 12,123,647 3,108,736
9.0001 - 9.2500 4 9,267,732 0.73 367,295 5,786,500 2,316,933
9.5001 - 9.6300 1 904,541 0.07 904,541 904,541 904,541
-- -------------- ------
Total/Avg./Wtd.
Avg./Min/Max: 175 $1,274,707,224 100.00% $ 367,295 $145,831,430 $ 7,284,041
=== ============== ======
<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
MORTGAGE COVERAGE COVERAGE COVERAGE MORTGAGE MATURITY DATE DATE DATE
INTEREST RATES RATIO RATIO RATIO RATE (MOS) LTV LTV LTV
----------------- ---------- ---------- ---------- ---------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
7.2501 - 7.5000 2.17x 2.17x 2.17x 7.437% 118.0 46.54% 46.54% 46.54%
7.5001 - 7.7500 1.47 1.47 1.47 7.750 119.0 65.31 65.31 65.31
7.7501 - 8.0000 1.17 1.58 1.44 7.907 119.1 58.33 84.69 65.91
8.0001 - 8.2500 1.15 1.68 1.27 8.159 118.0 49.14 80.00 74.57
8.2501 - 8.5000 1.18 2.07 1.37 8.364 122.9 44.45 84.82 71.54
8.5001 - 8.7500 1.20 1.97 1.35 8.661 114.2 56.71 79.82 69.37
8.7501 - 9.0000 1.24 1.49 1.35 8.904 113.1 61.31 80.63 70.01
9.0001 - 9.2500 1.25 1.42 1.37 9.195 112.1 58.93 79.85 68.69
9.5001 - 9.6300 1.20 1.20 1.20 9.630 173.0 60.30 60.30 60.30
Total/Avg./Wtd.
Avg./Min/Max: 1.15x 2.17x 1.43x 8.147% 119.1 44.45% 84.82% 68.58%
</TABLE>
A-16
<PAGE>
DISTRIBUTION OF AMORTIZATION TYPES
<TABLE>
<CAPTION>
PERCENTAGE
OF
NUMBER AGGREGATE MINIMUM MAXIMUM AVERAGE
OF CUT-OFF CUT-OFF CUT-OFF CUT-OFF
MORTGAGE CUT-OFF DATE DATE DATE DATE DATE
AMORTIZATION TYPE LOANS BALANCE BALANCE BALANCE BALANCE BALANCE
-------------------- ---------- ----------------- ------------ ------------- --------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Amortizing Balloon 143(1) $ 909,896,397 71.38% $ 367,295 $145,831,430 $ 6,362,912
Hyperamortizing 30 360,962,673 28.32 1,881,300 49,966,246 12,032,089
Fully Amortizing 2 3,848,154 0.30 904,541 2,943,612 1,924,077
---- -------------- ------
Total/Avg./Wtd.
Avg./Min/Max: 175 $1,274,707,224 100.00% $ 367,295 $145,831,430 $ 7,284,041
==== ============== ======
<CAPTION>
WEIGHTED WEIGHTED
MINIMUM MAXIMUM AVERAGE AVERAGE WEIGHTED
DEBT DEBT DEBT WEIGHTED REMAINING MINIMUM MAXIMUM AVERAGE
SERVICE SERVICE SERVICE AVERAGE TERM TO CUT-OFF CUT-OFF CUT-OFF
COVERAGE COVERAGE COVERAGE MORTGAGE MATURITY DATE DATE DATE
AMORTIZATION TYPE RATIO RATIO RATIO RATE (MOS) LTV LTV LTV
-------------------- ---------- ---------- ---------- ---------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Amortizing Balloon 1.15x 2.17x 1.43x 8.091% 119.8 46.54% 84.82% 68.56%
Hyperamortizing 1.20 2.07 1.42 8.287 117.4 44.45 79.91 68.60
Fully Amortizing 1.20 1.31 1.28 8.506 129.4 60.30 75.00 71.54
Total/Avg./Wtd.
Avg./Min/Max: 1.15x 2.17x 1.43x 8.147% 119.1 44.45% 84.82% 68.58%
</TABLE>
(1) Figure includes three loans with interest only periods as more particularly
described elsewhere in this Annex A.
A-17
<PAGE>
DISTRIBUTION OF CUT-OFF DATE LOAN TO VALUE RATIOS
<TABLE>
<CAPTION>
PERCENTAGE
OF
RANGE OF NUMBER AGGREGATE MINIMUM MAXIMUM AVERAGE
CUT-OFF DATE 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>
40.1 - 45.0 1 $ 31,468,201 2.47% $31,468,201 $ 31,468,201 $31,468,201
45.1 - 50.0 2 101,948,369 8.00 948,369 101,000,000 50,974,185
50.1 - 55.0 3 7,739,417 0.61 1,098,192 3,786,431 2,579,806
55.1 - 60.0 7 161,943,684 12.70 507,960 145,831,430 23,134,812
60.1 - 65.0 20 103,637,169 8.13 632,405 49,966,246 5,181,858
65.1 - 70.0 31 151,049,107 11.85 664,045 29,978,826 4,872,552
70.1 - 75.0 49 274,130,616 21.51 546,974 29,800,000 5,594,502
75.1 - 80.0 59 430,136,048 33.74 367,295 28,340,494 7,290,441
80.1 - 85.0 3 12,654,613 0.99 1,572,308 6,085,660 4,218,204
-- -------------- ------
Total/Avg./Wtd.
Avg./Min/Max: 175 $1,274,707,224 100.00% $ 367,295 $145,831,430 $ 7,284,041
=== ============== ======
<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>
40.1 - 45.0 2.03x 2.03x 2.03x 8.444% 119.0 44.45% 44.45% 44.45%
45.1 - 50.0 1.52 2.17 2.16 7.444 118.0 46.54 49.14 46.56
50.1 - 55.0 1.42 2.07 1.75 8.272 116.9 50.49 54.38 53.69
55.1 - 60.0 1.24 1.97 1.58 7.952 117.9 56.44 59.76 58.27
60.1 - 65.0 1.20 1.63 1.42 8.220 118.0 60.13 64.90 62.96
65.1 - 70.0 1.15 1.65 1.35 8.220 117.5 65.31 69.96 67.76
70.1 - 75.0 1.19 1.49 1.29 8.392 122.9 70.56 75.00 73.17
75.1 - 80.0 1.20 1.55 1.26 8.159 117.2 75.07 80.00 77.97
80.1 - 85.0 1.17 1.49 1.21 8.342 159.9 80.63 84.82 84.25
Total/Avg./Wtd.
Avg./Min/Max: 1.15x 2.17x 1.43x 8.147% 119.1 44.45% 84.82% 68.58%
</TABLE>
A-18
<PAGE>
DISTRIBUTION OF MORTGAGED PROPERTIES BY STATE
<TABLE>
<CAPTION>
PERCENTAGE
OF
NUMBER AGGREGATE MINIMUM MAXIMUM AVERAGE
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>
Arizona 7 $ 160,602,136 12.60% $ 632,405 $145,831,430 $22,943,162
Florida 18 136,608,723 10.72 652,218 29,800,000 7,589,374
California 19 126,030,393 9.89 948,369 19,556,631 6,633,179
Virginia 6 125,025,894 9.81 972,478 101,000,000 20,837,649
Texas 28 123,280,284 9.67 546,974 15,252,319 4,402,867
New York 14 72,889,659 5.72 589,904 29,978,826 5,206,404
Colorado 3 53,814,748 4.22 1,210,266 49,966,246 17,938,249
Nevada 6 49,806,601 3.91 1,953,756 25,472,358 8,301,100
Pennsylvania 10 45,039,347 3.53 1,095,911 10,481,894 4,503,935
Maryland 6 43,562,322 3.42 1,743,813 18,068,851 7,260,387
Connecticut 8 41,967,857 3.29 387,030 13,976,203 5,245,982
North Carolina 7 37,813,320 2.97 1,996,709 15,082,077 5,401,903
Massachusetts 5 37,446,311 2.94 2,416,032 9,668,831 7,489,262
New Jersey 6 27,649,482 2.17 1,297,834 12,960,000 4,608,247
Minnesota 6 27,330,181 2.14 1,078,500 13,947,530 4,555,030
Michigan 4 24,134,678 1.89 2,994,976 11,882,403 6,033,670
Georgia 5 24,003,721 1.88 951,204 13,286,010 4,800,744
Washington 6 23,804,587 1.87 2,348,452 8,694,103 3,967,431
Illinois 7 18,578,346 1.46 134,895 6,483,295 2,654,049
South Carolina 3 16,420,526 1.29 3,524,037 8,099,445 5,473,509
New Mexico 2 8,810,794 0.69 3,496,165 5,314,629 4,405,397
Oregon 2 6,835,978 0.54 1,994,979 4,840,999 3,417,989
Utah 1 6,495,813 0.51 6,495,813 6,495,813 6,495,813
Idaho 1 6,395,852 0.50 6,395,852 6,395,852 6,395,852
Ohio 2 6,327,527 0.50 2,211,515 4,116,011 3,163,763
Vermont 1 5,185,037 0.41 5,185,037 5,185,037 5,185,037
Kentucky 2 3,394,377 0.27 1,677,221 1,717,155 1,697,188
Alabama 1 2,925,669 0.23 2,925,669 2,925,669 2,925,669
Wisconsin 1 2,919,727 0.23 2,919,727 2,919,727 2,919,727
Tennessee 1 2,672,175 0.21 2,672,175 2,672,175 2,672,175
Missouri 1 1,995,716 0.16 1,995,716 1,995,716 1,995,716
Rhode Island 3 1,897,538 0.15 367,295 798,215 632,513
Iowa 3 1,330,212 0.10 269,789 786,886 443,404
Indiana 1 872,266 0.07 872,266 872,266 872,266
Mississippi 1 839,427 0.07 839,427 839,427 839,427
-- -------------- ------
Total/Avg./Wtd.
Avg./Min/Max: 197 $1,274,707,224 100.00% $ 134,895 $145,831,430 $ 6,470,595
=== ============== ======
<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>
Arizona 1.20x 2.03x 1.56x 7.942% 118.0 44.45% 79.69% 59.23%
Florida 1.19 2.03 1.30 8.195 130.0 44.45 78.74 74.53
California 1.20 1.62 1.29 8.275 116.5 49.14 79.87 71.95
Virginia 1.23 2.17 2.00 7.621 117.5 46.54 79.91 51.54
Texas 1.20 1.63 1.30 8.206 117.3 57.41 79.91 74.93
New York 1.20 1.47 1.34 8.086 118.7 60.30 77.44 70.17
Colorado 1.28 1.48 1.47 7.981 118.8 63.25 74.48 64.05
Nevada 1.23 1.42 1.25 8.215 117.5 54.38 78.38 75.66
Pennsylvania 1.17 1.48 1.35 8.313 123.7 64.90 84.69 75.44
Maryland 1.27 2.03 1.44 8.256 117.3 44.45 72.28 66.17
Connecticut 1.24 1.49 1.31 8.487 116.0 69.68 80.63 74.30
North Carolina 1.23 1.65 1.35 8.255 117.5 65.53 79.91 74.59
Massachusetts 1.25 1.40 1.30 8.481 114.9 69.78 74.95 73.04
New Jersey 1.23 2.03 1.41 8.236 115.5 44.45 80.00 70.92
Minnesota 1.15 1.52 1.26 8.547 116.5 62.94 78.65 73.39
Michigan 1.20 2.07 1.37 8.277 117.8 54.09 79.29 74.89
Georgia 1.23 1.41 1.25 8.286 117.6 63.57 79.67 69.67
Washington 1.20 1.31 1.25 8.106 118.7 61.25 76.66 70.76
Illinois 1.18 1.50 1.32 8.397 128.2 59.07 84.82 75.12
South Carolina 1.23 1.36 1.27 8.328 117.6 74.95 77.88 77.02
New Mexico 1.68 2.03 1.89 8.303 118.6 44.45 59.76 50.53
Oregon 1.24 1.34 1.27 7.997 116.4 64.46 78.72 74.56
Utah 1.33 1.33 1.33 8.200 119.0 73.15 73.15 73.15
Idaho 1.26 1.26 1.26 8.170 119.0 75.25 75.25 75.25
Ohio 1.23 2.03 1.51 8.389 118.3 44.45 73.50 63.35
Vermont 1.46 1.46 1.46 8.750 117.0 64.01 64.01 64.01
Kentucky 1.25 1.27 1.26 8.350 117.0 76.24 78.05 77.16
Alabama 2.03 2.03 2.03 8.444 119.0 44.45 44.45 44.45
Wisconsin 1.27 1.27 1.27 8.000 117.0 78.70 78.70 78.70
Tennessee 2.03 2.03 2.03 8.444 119.0 44.45 44.45 44.45
Missouri 1.21 1.21 1.21 8.200 116.0 76.76 76.76 76.76
Rhode Island 1.25 1.29 1.27 8.761 115.0 73.20 79.85 77.27
Iowa 1.29 1.29 1.29 8.690 116.0 74.94 74.94 74.94
Indiana 1.27 1.27 1.27 8.770 115.0 62.30 62.30 62.30
Mississippi 1.31 1.31 1.31 7.920 119.0 76.31 76.31 76.31
Total/Avg./Wtd.
Avg./Min/Max: 1.15x 2.17x 1.43x 8.147% 119.1 44.45% 84.82% 68.58%
</TABLE>
A-19
<PAGE>
DISTRIBUTION OF REMAINING AMORTIZATION TERMS
<TABLE>
<CAPTION>
PERCENTAGE
OF
RANGE OF NUMBER AGGREGATE MINIMUM MAXIMUM AVERAGE
REMAINING 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>
171 - 190 2 $ 1,983,041 0.16% $ 904,541 $ 1,078,500 $ 991,520
231 - 250 1 1,881,300 0.15 1,881,300 1,881,300 1,881,300
271 - 290 1 4,116,011 0.32 4,116,011 4,116,011 4,116,011
291 - 310 35 134,234,558 10.53 507,960 31,468,201 3,835,273
311 - 330 3 3,028,070 0.24 652,218 1,503,586 1,009,357
331 - 360 133 1,129,464,245 88.61 367,295 145,831,430 8,492,212
--- -------------- ------
Total/Avg./Wtd.
Avg./Min/Max: 175 $1,274,707,224 100.00% $ 367,295 $145,831,430 $7,284,041
=== ============== ======
<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>
171 - 190 1.15x 1.20x 1.17x 8.798% 173.0 60.30% 66.17% 63.49%
231 - 250 1.24 1.24 1.24 8.900 113.0 69.68 69.68 69.68
271 - 290 1.23 1.23 1.23 8.360 118.0 73.50 73.50 73.50
291 - 310 1.25 2.07 1.59 8.585 116.4 44.45 80.63 63.34
311 - 330 1.25 1.27 1.26 8.521 114.3 62.30 70.92 68.43
331 - 360 1.17 2.17 1.41 8.091 119.4 46.54 84.82 69.19
Total/Avg./Wtd.
Avg./Min/Max: 1.15x 2.17x 1.43x 8.147% 119.1 44.45% 84.82% 68.58%
</TABLE>
A-20
<PAGE>
DISTRIBUTION OF ORIGINAL TERM TO MATURITY
<TABLE>
<CAPTION>
PERCENTAGE
OF
NUMBER AGGREGATE MINIMUM MAXIMUM AVERAGE
RANGE OF 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 2 $ 2,594,554 0.20% $638,819 $ 1,955,735 $1,297,277
84 - 120 167 1,216,097,324 95.40 367,295 145,831,430 7,282,020
121 - 180 6 56,015,346 4.39 904,541 29,800,000 9,335,891
--- -------------- ------
Total/Avg./Wtd.
Avg./Min/Max: 175 $1,274,707,224 100.00% $367,295 $145,831,430 $7,284,041
=== ============== ======
<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 1.34x 1.55x 1.50x 8.873% 55.0 75.16% 75.95% 75.76%
84 - 120 1.20 2.17 1.44 8.140 117.2 44.45 80.63 68.19
121 - 180 1.15 1.23 1.20 8.270 163.5 60.30 84.82 76.65
Total/Avg./Wtd.
Avg./Min/Max: 1.15x 2.17x 1.43x 8.147% 119.1 44.45% 84.82% 68.58%
</TABLE>
A-21
<PAGE>
DISTRIBUTION OF REMAINING TERMS TO MATURITY
<TABLE>
<CAPTION>
PERCENTAGE
OF
NUMBER AGGREGATE MINIMUM MAXIMUM AVERAGE
RANGE OF 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 2 $ 2,594,554 0.20% $ 638,819 $ 1,955,735 $ 1,297,277
91 - 110 3 14,483,673 1.14 972,478 8,833,493 4,827,891
111 - 120 164 1,201,613,650 94.27 367,295 145,831,430 7,326,913
121 - 130 1 13,150,000 1.03 13,150,000 13,150,000 13,150,000
151 - 170 1 6,085,660 0.48 6,085,660 6,085,660 6,085,660
171 - 190 4 36,779,686 2.89 904,541 29,800,000 9,194,921
--- -------------- ------
Total/Avg./Wtd.
Avg./Min/Max: 175 $1,274,707,224 100.00% $ 367,295 $145,831,430 $ 7,284,041
=== ============== ======
<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 1.34x 1.55x 1.50x 8.873% 55.0 75.16% 75.95% 75.76%
91 - 110 1.25 1.31 1.29 8.623 109.4 61.31 72.41 68.80
111 - 120 1.20 2.17 1.44 8.134 117.3 44.45 80.63 68.19
121 - 130 1.23 1.23 1.23 8.050 129.0 76.68 76.68 76.68
151 - 170 1.18 1.18 1.18 8.500 156.0 84.82 84.82 84.82
171 - 190 1.15 1.20 1.19 8.310 177.1 60.30 84.69 75.29
Total/Avg./Wtd.
Avg./Min/Max: 1.15x 2.17x 1.43x 8.147% 119.1 44.45% 84.82% 68.58%
</TABLE>
A-22
<PAGE>
DISTRIBUTION OF PREPAYMENT PROVISIONS
<TABLE>
<CAPTION>
PERCENTAGE
OF
NUMBER AGGREGATE MINIMUM MAXIMUM AVERAGE
OF CUT-OFF CUT-OFF CUT-OFF CUT-OFF
MORTGAGE CUT-OFF DATE DATE DATE DATE DATE
PREPAYMENT PROVISION LOANS BALANCE BALANCE BALANCE BALANCE BALANCE
------------------------- ---------- ----------------- ------------ ------------- --------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Defeasance 171 $1,247,980,138 97.90% $ 367,295 $145,831,430 $7,298,129
Greater of YM or 1% UPB 3 25,731,243 2.02 1,784,821 15,252,319 8,577,081
Declining Fee 1 995,843 0.08 995,843 995,843 995,843
--- -------------- ------
Total/Avg./Wtd.
Avg./Min/Max: 175 $1,274,707,224 100.00% $ 367,295 $145,831,430 $7,284,041
=== ============== ======
<CAPTION>
WEIGHTED WEIGHTED
MINIMUM MAXIMUM AVERAGE AVERAGE WEIGHTED
DEBT DEBT DEBT WEIGHTED REMAINING MINIMUM MAXIMUM AVERAGE
SERVICE SERVICE SERVICE AVERAGE TERM TO CUT-OFF CUT-OFF CUT-OFF
COVERAGE COVERAGE COVERAGE MORTGAGE MATURITY DATE DATE DATE
PREPAYMENT PROVISION RATIO RATIO RATIO RATE (MOS) LTV LTV LTV
------------------------- ---------- ---------- ---------- ---------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Defeasance 1.15x 2.17x 1.43x 8.150% 119.2 44.45% 84.82% 68.44%
Greater of YM or 1% UPB 1.26 1.29 1.28 8.000 117.4 64.90 79.86 75.34
Declining Fee 1.33 1.33 1.33 8.540 115.0 68.21 68.21 68.21
Total/Avg./Wtd.
Avg./Min/Max: 1.15x 2.17x 1.43x 8.147% 119.1 44.45% 84.82% 68.58%
</TABLE>
A-23
<PAGE>
<TABLE>
ANNEX B
<CAPTION>
<S> <C> <C>
ABN AMRO GMAC COMMERCIAL MORTGAGE SECURITIES, INC. Statement Date:
LaSalle Bank N.A. GMAC COMMERCIAL MORTGAGE CORPORATION, AS SERVICER Payment Date:
135 S. LaSalle Street Suite 1625 COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES Prior Payment:
Chicago, IL 60674-4107 SERIES 2000-C3 Next Payment:
Record Date:
ABN AMRO ACCT: XX-XXXX-XX-X
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
=====================================================================
====================================================================================================================================
11/15/2000 - 08:51 (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:
LaSalle Bank N.A. GMAC COMMERCIAL MORTGAGE CORPORATION, AS SERVICER Payment Date:
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES Prior Payment:
WAC: SERIES 2000-C3 Next Payment:
WA Life Term: Record Date:
WA Amort Term: ABN AMRO ACCT: XX-XXXX-XX-X
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
11/15/2000 - 08:51 (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:
LaSalle Bank N.A. GMAC COMMERCIAL MORTGAGE CORPORATION, AS SERVICER Payment Date:
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES Prior Payment:
SERIES 2000-C3 Next Payment:
Record Date:
ABN AMRO ACCT: XX-XXXX-XX-X
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).
11/15/2000 - 08:51 (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:
LaSalle Bank N.A. GMAC COMMERCIAL MORTGAGE CORPORATION, AS SERVICER Payment Date:
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES Prior Payment:
SERIES 2000-C3 Next Payment:
Record Date:
ABN AMRO ACCT: XX-XXXX-XX-X
<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>
11/15/2000 - 08:51 (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:
LaSalle Bank N.A. GMAC COMMERCIAL MORTGAGE CORPORATION, AS SERVICER Payment Date:
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES Prior Payment:
SERIES 2000-C3 Next Payment:
Record Date:
ABN AMRO ACCT: XX-XXXX-XX-X
<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>
01/00/00
-------------- ----------------------------------------------------------------------- --------------------------------------------
-------------- ----------------------------------------------------------------------- --------------------------------------------
-------------- ----------------------------------------------------------------------- --------------------------------------------
-------------- ----------------------------------------------------------------------- --------------------------------------------
-------------- ----------------------------------------------------------------------- --------------------------------------------
-------------- ----------------------------------------------------------------------- --------------------------------------------
-------------- ----------------------------------------------------------------------- --------------------------------------------
-------------- ----------------------------------------------------------------------- --------------------------------------------
-------------- ----------------------------------------------------------------------- --------------------------------------------
-------------- ----------------------------------------------------------------------- --------------------------------------------
-------------- ----------------------------------------------------------------------- --------------------------------------------
============== ======================================================================= ============================================
</TABLE>
(1) Note: Modification, Specially Serviced & Bankruptcy Totals are Included in
the Appropriate Delinquency Aging Category
11/15/2000 - 08:51 (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:
LaSalle Bank N.A. GMAC COMMERCIAL MORTGAGE CORPORATION, AS SERVICER Payment Date:
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES Prior Payment:
SERIES 2000-C3 Next Payment:
Record Date:
ABN AMRO ACCT: XX-XXXX-XX-X
<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.
11/15/2000 - 08:51 (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:
LaSalle Bank N.A. GMAC COMMERCIAL MORTGAGE CORPORATION, AS SERVICER Payment Date:
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES Prior Payment:
SERIES 2000-C3 Next Payment:
Record Date:
ABN AMRO ACCT: XX-XXXX-XX-X
<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>
11/15/2000 - 08:51 (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:
LaSalle Bank N.A. GMAC COMMERCIAL MORTGAGE CORPORATION, AS SERVICER Payment Date:
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES Prior Payment:
SERIES 2000-C3 Next Payment:
Record Date:
ABN AMRO ACCT: XX-XXXX-XX-X
<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
11/15/2000 - 08:51 (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:
LaSalle Bank N.A. GMAC COMMERCIAL MORTGAGE CORPORATION, AS SERVICER Payment Date:
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES Prior Payment:
SERIES 2000-C3 Next Payment:
Record Date:
ABN AMRO ACCT: XX-XXXX-XX-X
</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 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
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
11/15/2000 - 08:51 (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:
LaSalle Bank N.A. GMAC COMMERCIAL MORTGAGE CORPORATION, AS SERVICER Payment Date:
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES Prior Payment:
SERIES 2000-C3 Next Payment:
Record Date:
ABN AMRO ACCT: XX-XXXX-XX-X
</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%
================================================================================
11/15/2000 - 08:51 (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:
LaSalle Bank N.A. GMAC COMMERCIAL MORTGAGE CORPORATION, AS SERVICER Payment Date:
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES Prior Payment:
SERIES 2000-C3 Next Payment:
Record Date:
ABN AMRO ACCT: XX-XXXX-XX-X
</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.
11/15/2000 - 08:51 (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:
LaSalle Bank N.A. GMAC COMMERCIAL MORTGAGE CORPORATION, AS SERVICER Payment Date:
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES Prior Payment:
SERIES 2000-C3 Next Payment:
Record Date:
ABN AMRO ACCT: XX-XXXX-XX-X
<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 than one month delinq
1. P&I Adv - delinquent 1 month
2. P&I Adv - delinquent 2 months
3. P&I Adv - delinquent 3+ months
4. Mat. Balloon/Assumed P&I
5. Prepaid in Full
6. Specially Serviced
7. Foreclosure
8. Bankruptcy
9. REO
10. DPO
11. Modification
================================================================================
11/15/2000 - 08:51 (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:
LaSalle Bank N.A. GMAC COMMERCIAL MORTGAGE CORPORATION, AS SERVICER Payment Date:
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES Prior Payment:
SERIES 2000-C3 Next Payment:
Record Date:
ABN AMRO ACCT: XX-XXXX-XX-X
<CAPTION>
SPECIALLY SERVICED (PART I) ~ LOAN DETAIL
====================================================================================================================================
Balance Remaining Term
Disclosure Transfer ----------------- Note Maturity --------------- 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>
11/15/2000 - 08:51 (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:
LaSalle Bank N.A. GMAC COMMERCIAL MORTGAGE CORPORATION, AS SERVICER Payment Date:
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES Prior Payment:
SERIES 2000-C3 Next Payment:
Record Date:
ABN AMRO ACCT: XX-XXXX-XX-X
<CAPTION>
SPECIALLY SERVICED LOAN DETAIL (PART II) ~ SERVICER COMMENTS
====================================================================================================================================
Disclosure Resolution
Control # Strategy Comments
====================================================================================================================================
<S> <C> <C>
====================================================================================================================================
</TABLE>
11/15/2000 - 08:51 (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:
LaSalle Bank N.A. GMAC COMMERCIAL MORTGAGE CORPORATION, AS SERVICER Payment Date:
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES Prior Payment:
SERIES 2000-C3 Next Payment:
Record Date:
ABN AMRO ACCT: XX-XXXX-XX-X
<CAPTION>
MODIFIED LOAN DETAIL
====================================================================================================================================
Disclosure Modification Modification Modification
Control # Date Code Description
====================================================================================================================================
<S> <C> <C> <C>
====================================================================================================================================
</TABLE>
11/15/2000 - 08:51 (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:
LaSalle Bank N.A. GMAC COMMERCIAL MORTGAGE CORPORATION, AS SERVICER Payment Date:
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES Prior Payment:
SERIES 2000-C3 Next Payment:
Record Date:
ABN AMRO ACCT: XX-XXXX-XX-X
<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.
11/15/2000 - 08:51 (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:
LaSalle Bank N.A. GMAC COMMERCIAL MORTGAGE CORPORATION, AS SERVICER Payment Date:
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES Prior Payment:
SERIES 2000-C3 Next Payment:
Record Date:
ABN AMRO ACCT: XX-XXXX-XX-X
<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>
11/15/2000 - 08:51 (MXXX-MXXX) (C) 2000 LaSalle Bank N.A.
B-17
<PAGE>
<TABLE>
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
SERIES 2000-C3
DELINQUENT LOAN STATUS REPORT
AS OF ____________________
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
SHORT TOTAL OTHER
NAME SQ FT PAID SCHEDULED P&I TOTAL ADVANCES CURRENT CURRENT
PROSPECTUS (WHEN PROPERTY OR THRU LOAN ADVANCES EXPENSES (TAXES & TOTAL MONTHLY INTEREST
ID APPROPRIATE) TYPE CITY STATE UNITS DATE BALANCE TO DATE TO DATE ESCROW) EXPOSURE P&I RATE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
90 + DAYS DELINQUENT
60 DAYS DELINQUENT
30 DAYS DELINQUENT
CURRENT & AT SPECIAL SERVICER
FCL - Foreclosure
LTM - Latest 12 Months either Last Annual or Trailing 12 months
*Workout Strategy should match the CSSA Loan file using abreviated words in place of a code number such as (FCL - In Foreclosure,
MOD - Modification, DPO - Discount Payoff, NS - Note Sale, BK - Bankrupcy, PP - Payment Plan)
It is possible to combine the status codes if the loan is going in more than one direction. (i.e. FCL/Mod, BK/Mod, BK/FCL/DPO)
**App - Appraisal, BPO - Broker opinion, Int. - Internal Value
*** How to determine the cap rate is agreed upon by Underwriter and servicers - to be provided by a third party.
------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
-----------------------------------------------
LTM ***CAP VALUE USING
MATURITY NOI LTM LTM RATE NOI & CAP
DATE DATE NOI DSCR ASSIGNED RATE
-----------------------------------------------
<S> <C> <C> <C> <C> <C>
-----------------------------------------------
-----------------------------------------------
-----------------------------------------------
</TABLE>
B-18
<PAGE>
<TABLE>
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
SERIES 2000-C3
DELINQUENT LOAN STATUS REPORT
AS OF ____________________
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
APPRAISAL TOTAL
BPO OR LOSS USING APPRAISAL SHORT NAME
VALUATION INTERNAL 90% APPR. OR ESTIMATED REDUCTION PROSPECTUS (WHEN PROPERTY TRANSFER RESOLUTION
DATE VALUE** BPO (1) RECOVERY % REALIZED ID APPROPRIATE) TYPE CITY STATE DATE DATE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
--------------------------------------
FCL EXPECTED
START FCL SALE WORKOUT
DATE DATE STRATEGY COMMENTS
--------------------------------------
<S> <C> <C> <C>
--------------------------------------
</TABLE>
B-19
<PAGE>
<TABLE>
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
SERIES 2000-C3
HISTORICAL LOAN MODIFICATION REPORT
AS OF ____________________
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
BALANCE WHEN BALANCE AT THE
SENT TO EFFECTIVE DATE # MTHS
PROSPECUTS MOD / EFFECT SPECIAL OF OLD FOR RATE NEW OLD
ID CITY STATE EXTENSION FLAG DATE SERVICER REHABILITATION RATE CHANGE RATE OLD P&I NEW P&I MATURITY
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
THIS REPORT IS HISTORICAL
Information is as of modification. Each line it should not change in the future. Only new modifications should be added.
TOTAL FOR ALL LOANS:
TOTAL FOR LOANS IN CURRENT MONTH:
# OF LOANS $BALANCE
Modifications:
Maturity Date Extensions:
Total:
* The information in these columns is from a particular point in time and should not change on this report once assigned.
(1) Actual principal loss taken by bonds
(2) Expected future loss due to a rate reduction. This is just an estimate calculated at the time of the modification.
------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
-----------------------------------------------------------
(2)
TOTAL # (1) EST. FUTURE
MTHS FOR REALIZED INTEREST LOSS
NEW CHANGE OF LOSS TO TO TRUST $
MATURITY MOD TRUST $ (RATE REDUCTION) COMMENT
-----------------------------------------------------------
<C> <C> <C> <C> <C>
-----------------------------------------------------------
</TABLE>
B-20
<PAGE>
<TABLE>
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
SERIES 2000-C3
HISTORICAL LOSS ESTIMATE REPORT (REO SOLD OR DISCOUNTED PAYOFF)
AS OF ____________________
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------------
SHORT % LATEST
NAME RECEIVED APPRAISAL EFFECT NET AMT TOTAL
PROSPECTUS (WHEN PROPERTY FROM OR BROKER'S DATE OF SALES RECEIVED SCHEDULED P&I TOTAL
ID APPROPRIATE TYPE CITY STATE SALE OPINION SALE PRICE FROM SALE BALANCE ADVANCED EXPENSES
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
THIS REPORT IS HISTORICAL
All information is fromthe liquidation due and does not need to be updated.
TOTAL ALL LOANS:
CURRENT MONTH ONLY:
----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
---------------------------------------------------------------------------
DATE
ACTUAL DATE MINOR TOTAL LOSS
SERVICING LOSSES LOSS MINOR ADJ LOSS % OF
FEES NET PASSED PASSED ADJ TO PASSED WITH SCHEDULED
EXPENSE PROCEEDS THRU THRU TRUST THRU ADJUSTMENT BALANCE
---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------
</TABLE>
B-21
<PAGE>
<TABLE>
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
SERIES 2000-C3
REO STATUS REPORT
AS OF ____________________
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
SHORT TOTAL OTHER
NAME SQ FT PAID SCHEDULED P&I TOTAL ADVANCES CURRENT
PROSPECTUS (WHEN PROPERTY OR THRU LOAN ADVANCES EXPENSES (TAXES TOTAL MONTHLY MATURITY
ID APPROPRIATE)(C) TYPE CITY STATE UNITS DATE BALANCE TO DATE TO DATE & ESCROW) EXPOSURE P&I DATE
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
(1) Use the following codes; App. - Appraisal, BPO - Brokers Opinion, Int - Internal Value
*** How to determine the cap rate is agreed upon by Underwriter and servicers - to be provided by a third party.
-----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------------
CAP VALUE APPRAISAL TOTAL
LTM LTM RATE USING BPO OR LOSS USING ESTIMATED APPRAISAL REO PENDING
NOI NOI/ ASSIGN VALUATION NOI & INTERNAL 92% APPR. RECOVERY REDUCTION TRANSFER ACQUISITION RESOLUTION
DATE DSC *** DATE CAP RATE VALUE** OR BPO (F) % REALIZED DATE DATE DATE COMMENTS
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
----------------------------------------------------------------------------------------------------------------
</TABLE>
B-22
<PAGE>
<TABLE>
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
SERIES 2000-C3
SERVICER WATCH LIST
AS OF ____________________
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
S4 S55 S61 S57 S58 P7 P8 P11 P54
------------------------------------------------------------------------------------------------------------------------------------
SHORT NAME SCHEDULED MATURITY LTM* COMMENT/ REASON
PROSPECTUS ID (WHEN APPROPRIATE) PROPERTY TYPE CITY STATE LOAN BALANCE PAID THRU DATE DATE DSCR ON WATCH LIST
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
List all loans on watch list and reason sorted in decending balance order.
Total: $
*LTM - Last 12 months either trailing or last annual
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
B-23
<PAGE>
<TABLE>
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
SERIES 2000-C3
COMPARATIVE FINANCIAL STATUS REPORT
AS OF ____________________
<CAPTION>
ORIGINAL UNDERWRITING 2ND PRECEDING ANNUAL OPERATING
INFORMATION INFORMATION
-----------------------------------------------------------------------------------------------------------------------------------
BASIS YEAR AS OF _______ NORMALIZED
Last
Property Scheduled Paid Annual Financial Financial
Prospectus Inspect Loan Thru Debt Info as % Total $ Info as % Total $
ID City State Date Balance Date Service of Date Occ Revenue NOI DSCR of Date Occ Revenue NOI DSCR
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
yy/mm yy/mm yy/mm
List all loans currently in deal with or without information to smallest loan.
Total: $ $ WA $ $ WA WA $ $ WA
-----------------------------------------------------------------------------------------------------------------------------------
Received Required
Financial Information: Loans Balance Loans Balance
# % $ % # % $ %
Current Full Year:
Current Full Yr. received with DSC (less than) 1:
Prior Full Year:
Prior Full Yr. received with DSC (less than) 1:
Quarterly Financials:
(1) Net change should compare the latest year to the underwriting year
-----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
-------------------------------------------------------------------------------------
PRECEDING ANNUAL OPERATING YTD OR TRAILING FINANCIAL
INFORMATION INFORMATION NET CHANGE
-------------------------------------------------------------------------------------
AS OF _______ NORMALIZED MONTH REPORTED "ACTUAL" PRECEDING & BASIS
Financial FS FS %
Info as % Total $ Start End Total $ % % Total
of Date Occ Revenue NOI DSCR Date Date Revenue NOI DSC Occ Revenue DSC
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
yy/mm yy/mm yy/mm
WA $ $ WA WA $ $ WA WA $ WA
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
</TABLE>
B-24
<PAGE>
<TABLE>
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
SERIES 2000-C3
OPERATING STATEMENT ANALYSIS
AS OF ______________________
<CAPTION>
PROPERTY OVERVIEW
<S> <C> <C> <C> <C> <C> <C> <C>
Control Number
Current Balance/Paid to Date
Property Name
Property Type
Property Address, City, State
Net Rentable Square Feet
Year Built/Year Renovated
Year of Operations UNDERWRITING 199_ 199_ 200_ YTD
Occupancy Rate *
Average Rental Rate
* Occupancy rates are year end or the ending date of the financial statement
for the period.
NO. OF MOS.
-------------------------------------------------------------------------------------
INCOME: PRIOR YEAR CURRENT YR.
Number of Mos. -------------------------------------------------------------------------------------
Period Ended Underwriting 199_ 199_ 2000 200_ Trailing** 199_-Base 199_-199_
Statement Classification Base Line Normalized Normalized Normalized as of / / 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 need to be broken down whenever possible differently for each property type as follows: Retail: 1) Base Rent
2)Percentage rents on cashflow
Hotel: 1)Room Revenue 2)Food/Beverage Nursing Home: 1)Private 2) Medicaid 3) Medicare
INCOME: COMMENT
EXPENSE: COMMENT
CAPITAL ITEMS: COMMENT
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
B-25
<PAGE>
<TABLE>
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
SERIES 2000-C3
NOI ADJUSTMENT WORKSHEET FOR "YEAR"
AS OF ______________________
<CAPTION>
PROPERTY OVERVIEW
<S> <C> <C> <C> <C> <C> <C> <C>
Control Number
Current Balance/Paid to Date
Property Name
Property Type
Property Address, City, State
Net Rentable Square Feet
Year Built/Year Renovated
Year of Operations BORROWER ADJUSTMENT NORMALIZED
Occupancy Rate *
Average Rental Rate
* Occupancy rates are year end or the ending date of the financial statement
for the period.
INCOME: "YEAR"
Number of Mos. Annualized -------------------------------------------------------------------------------------
Period Ended BORROWER
Statement Classification ACTUAL ADJUSTMENT NORMALIZED
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
-------------------------------------------------------------------------------------
Normalized - Full year Financial statements that have been reviewed by the
underwriter or Servicer
OPERATING EXPENSES:
Real Estate Taxes
Property Insurance
Utilities
Repairs and Maintenance
Management Fees
Payroll & Benefits Expense
Advertising & Marketing
Professional Fees
Other Expenses
Ground Rent
TOTAL OPERATING EXPENSES $0.00 $0.00 $0.00
OPERATING EXPENSE RATIO
NET OPERATING INCOME $0.00 $0.00 $0.00
Leasing Commissions
Tenant Improvements
Replacement Reserve
TOTAL CAPITAL ITEMS $0.00 $0.00 $0.00
N.O.I. AFTER CAPITAL ITEMS $0.00 $0.00 $0.00
DEBT SERVICE (PER SERVICER) $0.00 $0.00 $0.00
CASH FLOW AFTER DEBT SERVICE $0.00 $0.00 $0.00
DSCR: (NOI/Debt Service)
DSCR: (AFTER RESERVES\CAP EXP.)
SOURCE OF FINANCIAL DATA:
(ie. operating statements, financial statements, tax return, other)
NOTES AND ASSUMPTIONS:
----------------------------------------------------------------------------------------------------------------------------------
This report should be completed by the Servicer for any "Normalization" of the Borrowers numbers.
The "Normalized" column is used in the Operating Statement Analysis Report.
This report may vary depending on the property type and because of the way information may vary in each borrowers statement.
INCOME: COMMENT
EXPENSE: COMMENT
CAPITAL ITEMS: COMMENT
</TABLE>
B-26
<PAGE>
ANNEX C
ALL INFORMATION IN THIS TERM SHEET, WHETHER REGARDING THE ASSETS BACKING ANY
SECURITIES DISCUSSED HEREIN OR OTHERWISE, WILL BE SUPERSEDED BY THE INFORMATION
CONTAINED IN ANY FINAL PROSPECTUS FOR ANY SECURITIES ACTUALLY SOLD TO YOU.
STRUCTURAL AND COLLATERAL TERM SHEET
$1,128,114,000 (APPROXIMATE BALANCE) NOVEMBER 20, 2000
GMAC COMMERCIAL MORTGAGE SECURITIES, INC.
MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 2000-C3
APPROXIMATE SECURITIES STRUCTURE:
<TABLE>
<CAPTION>
APPROXIMATE EXPECTED CREDIT EXPECTED EXPECTED
EXPECTED RATING FACE/NOTIONAL SUPPORT WEIGHTED AVERAGE LIFE PAYMENT
CLASS (a) FITCH/MOODY'S AMOUNT (MM) (% OF UPB) (YEARS) (b) WINDOW (b)
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PUBLICLY OFFERED CLASSES
--------------------------------------------------------------------------------------------------------------------------------
A1 AAA/Aaa $148.6 21.25% 5.7 01/01 - 04/10
A2 AAA/Aaa 855.3 21.25 9.7 04/10 - 11/10
B AA/Aa2 54.2 17.00 9.9 11/10 - 11/10
C A/A2 57.4 12.50 9.9 11/10 - 11/10
D A-/A3 12.7 11.50 9.9 11/10 - 11/10
--------------------------------------------------------------------------------------------------------------------------------
PRIVATELY OFFERED CLASSES (c)
--------------------------------------------------------------------------------------------------------------------------------
E BBB/Baa2 35.1 8.75
F BBB-/Baa3 19.1 7.25
G BBB-/NR 8.0 6.63
H BB+/Ba1 9.9 5.85
J BB/Ba2 25.5 3.85
K BB-/Ba3 4.5 3.50
L B+/B1 9.6 2.75
M B/B2 15.9 1.50
N B-/B3 3.2 1.25
O CCC/Caa2 3.2 1.00
P NR/NR 12.8 --
X(d) AAA/Aaa 1,274.7
S
TOTAL SECURITIES: $1,274.7
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Classes A1 and A2 are expected to have fixed pass-through rates. Classes B
through D are expected to have fixed pass-through rates subject to a cap
equal to the weighted average Net Mortgage Pass-Through Rate.
(b) Calculated at 0% CPR, assuming no balloon payment extension and that ARD
Loans pay in full on Anticipated Repayment Dates.
(c) Not offered hereby.
(d) Notional amount on interest only class.
KEY FEATURES:
Lead Managers: Deutsche Banc Alex. Brown
Goldman, Sachs & Co.
Originators: GMAC Commercial Mortgage Corporation (33.68%)
Archon Financial, L.P. (GSMC) (27.96%)
German American Capital Corporation (DB) (24.53%)
Residential Funding Corporation (13.83%)
Collateral: 175 Mortgage Loans ($1,274,707,224)
Master Servicer: GMAC Commercial Mortgage Corporation
Special Servicer: GMAC Commercial Mortgage Corporation
Trustee: LaSalle National Bank Association
Launch: November 2000
Pricing: November 2000
Closing: December 14th, 2000
Cut-Off Date: December 1st and 5th
Distribution Date: 15th of each month, or following business day
(commencing January 16, 2001)
Payment Delay: 15 days
ERISA Eligible: Classes A through D are expected to be
ERISA eligible subject to certain conditions for
eligibility.
SMMEA Eligible: Classes A1, A2, and B are expected to be SMMEA
securities upon issuance.
Structure: Sequential pay
Day Count: 30/360
Tax Treatment: REMIC
Rated Final Distribution Date: September 2035
Clean up Call: 1.0%
Minimum Denominations: Publicly Offered Classes: $25,000 & $1
Delivery: DTC
COLLATERAL FACTS:
Cut-Off Date Loan Principal Balance: $1,274,707,224
Number of Mortgage Loans / Properties: 175 / 197
Average Mortgage Loan Cut-Off Date Balance: $7,284,041
Weighted Average Current Mortgage Rate: 8.147%
Weighted Average Loan U/W DSCR (a): 1.43x
Weighted Average Loan Cut-Off Date LTV Ratio (a): 68.58%
Weighted Average Remaining Term to Maturity (months): 119.1
Weighted Average Remaining Amortization Term (months): 350.3
Prepayment Lockout / Defeasance as % of Total: 97.90%
Balloon Loans as % of Total (b) 99.70%
Single Largest Asset as % of Total: 11.44%
Five Largest Assets as % of Total: 29.62%
Ten Largest Assets as % of Total: 40.75%
(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 ARD loans totaling $361 mm and 28.32% of the Mortgage Loan Cut-Off
date balance.
TEN LARGEST LOANS OR SPONSORS:
<TABLE>
<CAPTION>
LOAN OR SPONSOR CURRENT % BY LOAN
(SHADOW RATING - FITCH/MOODY'S) BALANCE POOL UPB LTV DSCR PROPERTY TYPE
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Arizona Mills (BBB/Baa2) $145,831,430 11.44% 58.33% 1.58x Retail
MacArthur Center (AA+/Aa3) 101,000,000 7.92 46.54 2.17 Retail
1999 Broadway 49,966,246 3.92 63.25 1.48 Office
Drucker & Faulk Multifamily Portfolio 49,291,990 3.87 76.80 1.27 Multifamily
AmeriSuites (BBB-/Baa3) 31,468,201 2.47 44.45 2.03 Lodging
201 East 14th Street 29,978,826 2.35 65.31 1.47 Multifamily
St. Croix Apartments 29,800,000 2.34 74.50 1.19 Multifamily
Coral Gate Apartments 28,340,494 2.22 78.72 1.25 Multifamily
Lichtenstein Retail Portfolio 28,331,922 2.22 74.95 1.26 Retail
Copper Canyon 25,472,358 2.00 78.38 1.24 Multifamily
---------- ------
TOTAL/WTD. AVG. $519,481,467 40.75% 61.76% 1.60x
----------------------------------------------------------------------------------------------------------------------
</TABLE>
SELECTED LOAN DATA:
<TABLE>
<CAPTION>
NUMBER OF LOAN POOL CUT-OFF DATE BALANCE
MORTGAGED ------------------------------------------------------------------------
GEOGRAPHIC DISTRIBUTION PROPERTIES (MM) % BY UPB WTD. AVG. DSCR
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Arizona 7 $160.6 12.60% 1.56
Florida 18 136.6 10.72 1.30
California 19 126.0 9.89 1.29
Virginia 6 125.0 9.81 2.00
Texas 28 123.3 9.67 1.30
New York 14 72.9 5.72 1.34
Other (a) 105 530.3 41.60 1.35
----- ----- -------
TOTAL/WTD. AVG. 197 $1,274.7 100.00% 1.43X
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Includes 29 states.
<TABLE>
<CAPTION>
NUMBER OF LOAN POOL CUT-OFF DATE BALANCE
MORTGAGED ------------------------------------------------------------------------
PROPERTY TYPE PROPERTIES (MM) % BY UPB WTD. AVG. DSCR
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Retail (a) 52 $522.2 40.97% 1.54x
Multifamily 72 389.3 30.54 1.27
Office 33 200.0 15.69 1.34
Lodging (b) 18 94.9 7.44 1.69
Industrial 14 45.9 3.60 1.35
Other 8 22.4 1.76 1.35
TOTAL/WTD. AVG. 197 $1,274.7 100.00% 1.43X
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Includes 31 properties for a total of $443.3 million (34.78% of UPB) that
are Anchored Retail.
(b) Eight Lodging properties (2.47% of UPB) comprise the investment grade
AmeriSuites loan
<TABLE>
<CAPTION>
LOAN POOL CUT-OFF DATE BALANCE
NUMBER -----------------------------------------------------------------------
PREPAYMENT RESTRICTIONS OF LOANS (MM) % BY UPB WTD. AVG. DSCR
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Lockout/Defeasance 171 $1,248.0 97.90% 1.43x
Lockout/Greater of YM or 1% 3 25.7 2.02 1.28
Lockout/Declining Fee 1 1.0 0.08 1.33
TOTAL/WTD. AVG. 175 $1,274.7 100.00% 1.43X
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
ALL CALCULATIONS CONTAINED HEREIN ARE BASED SOLELY ON THE SENIOR MORTGAGE LOAN
WITH RESPECT TO THE MACARTHUR CENTER AND AMERISUITES LOAN GROUPS.
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>
ANNEX C
ALL INFORMATION IN THIS TERM SHEET, WHETHER REGARDING THE ASSETS BACKING ANY
SECURITIES DISCUSSED HEREIN OR OTHERWISE, WILL BE SUPERSEDED BY THE INFORMATION
CONTAINED IN ANY FINAL PROSPECTUS FOR ANY SECURITIES ACTUALLY SOLD TO YOU.
--------------------------------------------------------------------------------
COLLATERAL TERM SHEET
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
STRUCTURAL OVERVIEW
--------------------------------------------------------------------------------
For purposes of calculating principal distributions of the Certificates:
-- Available principal will be allocated sequentially to the Class A1,
A2, B, C, D, E, F, G, H, J, K, L, M, N, O and P certificates, except
as described below with respect to any certificates issued with
respect to the companion loans.
-- In case the principal balance of the Class P, O, N, M, L, K, J, H, G,
F, E, D, C, and B, in that order, have been reduced to zero due to the
allocation of principal losses, then Class A1 and A2 will be allocated
principal pro rata.
Class X will be entitled to receive payments of interest only and will not
receive any payments of principal. Class X will be entitled to payments of
interest pro rata (based on interest entitlements) with the Class A1 and A2
certificates each month.
Each Class will be subordinate to the Class A1, A2, and X and to each Class
with an earlier alphabetic designation than such Class, except as described
below with respect to the certificates issued with respect to the companion
loans. Each of the Class A1, A2, and X Certificates will be of equal
priority.
All Classes will pay interest on a 30/360 basis.
Principal Losses will be allocated in reverse alphabetical order to Class
P, O, N, M, L, K, J, H, G, F, E, D, C, B, and then pro rata to Class A1 and
A2, except as described below with respect to any certificates issued with
respect to the companion loans.
The Master Servicer will cover net prepayment interest shortfalls on the
loans 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. Net prepayment interest shortfalls
(after application of prepayment interest excesses on the mortgage and
companion loans and other Servicer coverage from the Master Servicing Fee)
will be allocated pro-rata (based on interest entitlements) to all regular
Certificates.
Shortfalls resulting from Master Servicer and Special Servicer
modifications, Special Servicer compensation or other extraordinary trust
fund expenses will be allocated in reverse alphabetical order to classes of
outstanding regular Certificates other than to the Class X, except as
described below with respect to any certificates issued with respect to the
companion loans.
Any certificates issued with respect to the companion loans will receive
principal and interest distributions only from the companion loan(s) for
the AmeriSuites loan group and the MacArthur Center loan group,
respectively. Prior to an event of default, the rights of any companion
loan to receive distributions of either principal or interest are generally
pari-passu with the related senior mortgage loan. After the occurrence and
continuance of an event of default on either loan group, the rights of the
related companion loan(s) to receive distributions of either principal or
interest will be subordinate to those of the related senior mortgage loan.
Losses with respect to any loan group will generally be first allocated to
the related companion loan(s) and then to the related senior mortgage loan.
This material is for your private information and we are not soliciting any
action based upon it. This material is not to be construed as an offer to sell
or the solicitation of any offer to buy any security in any jurisdiction where
such an offer or solicitation would be illegal. This material is based on
information that we consider reliable, but we do not represent that it is
accurate or complete and it should not be relied upon as such. By accepting this
material the recipient agrees that it will not distribute or provide the
material to any other person. The information contained in this material may be
based on assumptions regarding market conditions and other matters as reflected
therein. We make no representations regarding the reasonableness of such
assumptions or the likelihood that any of such assumptions will coincide with
actual market conditions or events, and this material should not be relied upon
for such purposes. We and our affiliates, officers, directors, partners and
employees, including persons involved in the preparation or issuance of this
material may, from time to time, have long or short positions in, and buy and
sell, the securities mentioned therein or derivatives thereof (including
options). This material may be filed with the Securities and Exchange Commission
(the "SEC") and incorporated by reference into an effective registration
statement previously filed with the SEC under Rule 415 of the Securities Act of
1933, including in cases where the material does not pertain to securities that
are ultimately offered for sale pursuant to such registration statement.
Information contained in this material is current as of the date appearing on
this material only. Information in this material regarding any assets backing
any securities discussed herein supersedes all prior information regarding such
assets. All information in this Term Sheet, whether regarding the assets backing
any securities discussed herein or otherwise, will be superseded by the
information contained in any final prospectus for any securities actually sold
to you.
This material is furnished to you by 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>
ANNEX C
ALL INFORMATION IN THIS TERM SHEET, WHETHER REGARDING THE ASSETS BACKING ANY
SECURITIES DISCUSSED HEREIN OR OTHERWISE, WILL BE SUPERSEDED BY THE INFORMATION
CONTAINED IN ANY FINAL PROSPECTUS FOR ANY SECURITIES ACTUALLY SOLD TO YOU.
--------------------------------------------------------------------------------
COLLATERAL TERM SHEET
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
ALLOCATION OF PREPAYMENT PREMIUMS (a)
--------------------------------------------------------------------------------
ALLOCATION OF PREPAYMENT PREMIUMS:
Prepayment premiums and yield maintenance amounts with respect to all loans
other than the companion loans will be allocated between the related
Certificates then entitled to principal distributions and the Class X
Certificates as follows:
A percentage of all prepayment premiums and yield maintenance amounts with
respect to all loans will be allocated to each class of the Certificates
then entitled to principal distributions, which percentage will be equal to
the product of (a) the percentage of the total principal distribution that
such Class receives, and (b) a percentage (which can be no greater than
100%), the numerator of which is the excess, if any, of the Pass-Through
Rate of the Class of Certificates currently receiving principal over the
relevant Discount Rate, and the denominator of which is the excess, if any,
of the Mortgage Rate of the related Mortgage Loan over the Discount Rate.
-------------------------------------------------------------------
Prepayment (Pass-Through Rate - Discount Rate)
Premium Allocation = ---------------------------------------
Percentage (Mortgage Rate - Discount Rate)
-------------------------------------------------------------------
The remaining percentage of such prepayment premiums and yield maintenance
amounts will be allocated to the Class X Certificates.
In general, this formula provides for an increase in the allocation of
prepayment premiums and yield maintenance premiums to the Certificates then
entitled to principal distributions relative to the Class X Certificates as
Discount Rates decrease and a decrease in the allocation to such Classes as
Discount Rates rise.
Allocation of Prepayment Premiums Example
Discount Rate Fraction Methodology:
Mortgage Rate = 8%
Bond Class Rate = 6%
Treasury Rate = 5%
% of Principal Distributed to Class = 100%
BOND CLASS ALLOCATION CLASS X ALLOCATION
--------------------------------------------------------------------------------
6% - 5% x 100% = 33 1/3% Receives excess premiums = 66 2/3% thereof
-------
8% - 5%
(a) For further information regarding the allocation of prepayment premiums,
refer to the Prospectus Supplement.
This material is for your private information and we are not soliciting any
action based upon it. This material is not to be construed as an offer to sell
or the solicitation of any offer to buy any security in any jurisdiction where
such an offer or solicitation would be illegal. This material is based on
information that we consider reliable, but we do not represent that it is
accurate or complete and it should not be relied upon as such. By accepting this
material the recipient agrees that it will not distribute or provide the
material to any other person. The information contained in this material may be
based on assumptions regarding market conditions and other matters as reflected
therein. We make no representations regarding the reasonableness of such
assumptions or the likelihood that any of such assumptions will coincide with
actual market conditions or events, and this material should not be relied upon
for such purposes. We and our affiliates, officers, directors, partners and
employees, including persons involved in the preparation or issuance of this
material may, from time to time, have long or short positions in, and buy and
sell, the securities mentioned therein or derivatives thereof (including
options). This material may be filed with the Securities and Exchange Commission
(the "SEC") and incorporated by reference into an effective registration
statement previously filed with the SEC under Rule 415 of the Securities Act of
1933, including in cases where the material does not pertain to securities that
are ultimately offered for sale pursuant to such registration statement.
Information contained in this material is current as of the date appearing on
this material only. Information in this material regarding any assets backing
any securities discussed herein supersedes all prior information regarding such
assets. All information in this Term Sheet, whether regarding the assets backing
any securities discussed herein or otherwise, will be superseded by the
information contained in any final prospectus for any securities actually sold
to you.
This material is furnished to you by Goldman, Sachs & Co. and Deutsche Bank
Securities, Inc. and not by the issuer of the securities. Goldman, Sachs & Co.
and Deutsche Bank Securities, Inc. are acting as the lead managers and neither
of these parties are acting as agent for the issuer or its affiliates in
connection with the proposed transaction. Neither the issuer nor any of its
affiliates has prepared or taken part in the preparation of these materials and
neither makes any representation as to the accuracy of these materials.
C-3
<PAGE>
ANNEX C
ALL INFORMATION IN THIS TERM SHEET, WHETHER REGARDING THE ASSETS BACKING ANY
SECURITIES DISCUSSED HEREIN OR OTHERWISE, WILL BE SUPERSEDED BY THE INFORMATION
CONTAINED IN ANY FINAL PROSPECTUS FOR ANY SECURITIES ACTUALLY SOLD TO YOU.
--------------------------------------------------------------------------------
COLLATERAL TERM SHEET
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
PREPAYMENT PROFILE
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
PREPAYMENT RESTRICTION ASSUMING NO PREPAYMENT OF PRINCIPAL (a) (b)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
PREPAYMENT JANUARY JANUARY JANUARY JANUARY JANUARY JANUARY JANUARY JANUARY
RESTRICTIONS 2001 2002 2003 2004 2005 2006 2007 2008
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Locked out 100.00% 100.00% 7.09% 4.42% 0.00% 0.00% 0.00% 0.00%
Defeasance 0.00 0.00 91.71 93.70 97.90 97.90 97.90 97.89
Greater of 1% or Yield Maintenance 0.00 0.00 1.20 1.88 2.02 2.03 2.03 2.03
------------------------------------------------------------------------------------------------------------------------------------
Sub-Total 100.00 100.00 100.00 100.00 99.92 99.92 99.92 99.92
------------------------------------------------------------------------------------------------------------------------------------
5% or Greater 0.00 0.00 0.00 0.00 0.08 0.00 0.00 0.00
4.00 - 4.99% 0.00 0.00 0.00 0.00 0.00 0.08 0.00 0.00
3.00 - 3.99% 0.00 0.00 0.00 0.00 0.00 0.00 0.08 0.00
2.00 - 2.99% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.08
1.00 - 1.99% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
(less than) 1% 0.00 0.00 0.00 0.00 0.00 0.00 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%
Balance of Mortgage Loans ($mm) 1,274.71 1,265.15 1,254.61 1,243.02 1,230.73 ,214.59 1,199.79 1,183.73
% OF CUTOFF BALANCE 100.00% 99.25% 98.42% 97.51% 96.55% 95.28% 94.12% 92.86%
------------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------
PREPAYMENT JANUARY JANUARY JANUARY JANUARY JANUARY JANUARY JANUARY
RESTRICTIONS 2009 2010 2011 2012 2013 2014 2015
-----------------------------------------------------------------------------------------------------------------------
Locked out 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Defeasance 97.89 94.92 100.00 100.00 100.00 100.00 100.00
Greater of 1% or Yield Maintenance 2.03 2.03 0.00 0.00 0.00 0.00 0.00
-----------------------------------------------------------------------------------------------------------------------
Sub-Total 99.93 96.96 100.00 100.00 100.00 100.00 100.00
-----------------------------------------------------------------------------------------------------------------------
5% or Greater 0.00 0.00 0.00 0.00 0.00 0.00 0.00
4.00 - 4.99% 0.00 0.00 0.00 0.00 0.00 0.00 0.00
3.00 - 3.99% 0.00 0.00 0.00 0.00 0.00 0.00 0.00
2.00 - 2.99% 0.00 0.00 0.00 0.00 0.00 0.00 0.00
1.00 - 1.99% 0.07 0.07 0.00 0.00 0.00 0.00 0.00
(less than) 1% 0.00 0.00 0.00 0.00 0.00 0.00 0.00
-----------------------------------------------------------------------------------------------------------------------
Open 0.00 2.97 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%
Balance of Mortgage Loans ($mm) 1,166.57 1,147.65 50.35 37.70 36.90 30.85 30.03
% OF CUTOFF BALANCE 91.52% 90.03% 3.95% 2.96% 2.90% 2.42% 2.36%
-----------------------------------------------------------------------------------------------------------------------
</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>
ANNEX C
ALL INFORMATION IN THIS TERM SHEET, WHETHER REGARDING THE ASSETS BACKING ANY
SECURITIES DISCUSSED HEREIN OR OTHERWISE, WILL BE SUPERSEDED BY THE INFORMATION
CONTAINED IN ANY FINAL PROSPECTUS FOR ANY SECURITIES ACTUALLY SOLD TO YOU.
--------------------------------------------------------------------------------
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 5.68 5.68 5.67 5.67 5.64
A2 9.74 9.73 9.72 9.69 9.51
B 9.92 9.91 9.89 9.84 9.67
C 9.92 9.92 9.92 9.92 9.67
D 9.92 9.92 9.92 9.92 9.67
-------------------------------------------------------------------------------
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>
ANNEX C
ALL INFORMATION IN THIS TERM SHEET, WHETHER REGARDING THE ASSETS BACKING ANY
SECURITIES DISCUSSED HEREIN OR OTHERWISE, WILL BE SUPERSEDED BY THE INFORMATION
CONTAINED IN ANY FINAL PROSPECTUS FOR ANY SECURITIES ACTUALLY SOLD TO YOU.
--------------------------------------------------------------------------------
COLLATERAL TERM SHEET
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
DISTRIBUTION OF CUT-OFF DATE BALANCES
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
WEIGHTED
AVERAGE WEIGHTED
PERCENTAGE WEIGHTED REMAINING AVERAGE
NUMBER OF OF AGGREGATE WEIGHTED AVERAGE TERM TO CUT-OFF
RANGE OF CUT-OFF DATE MORTGAGE CUT-OFF DATE CUT-OFF DATE AVERAGE CUT-OFF AVERAGE MORTGAGE MATURITY DATE LTV
BALANCES LOANS BALANCE BALANCE DATE BALANCE DSCR RATE (MOS) RATIO
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
367,295 - 499,999 1 367,295 0.03% 367,295 1.25x 9.140% 115.0 79.85%
500,000 - 999,999 23 18,679,381 1.47 812,147 1.33 8.653 116.0 68.15
1,000,000 - 1,999,999 33 50,554,656 3.97 1,531,959 1.33 8.386 114.5 70.31
2,000,000 - 2,999,999 21 52,478,177 4.12 2,498,961 1.32 8.369 116.8 71.26
3,000,000 - 3,999,999 18 61,206,038 4.80 3,400,335 1.40 8.337 116.7 70.92
4,000,000 - 4,999,999 18 82,702,845 6.49 4,594,603 1.31 8.361 120.4 71.85
5,000,000 - 5,999,999 10 55,125,932 4.32 5,512,593 1.35 8.455 117.4 72.43
6,000,000 - 6,999,999 10 63,924,083 5.01 6,392,408 1.30 8.257 121.0 76.40
7,000,000 - 7,999,999 1 7,272,151 0.57 7,272,151 1.23 8.150 118.0 79.91
8,000,000 - 8,999,999 4 35,101,387 2.75 8,775,347 1.30 8.408 114.8 72.89
9,000,000 - 9,999,999 4 37,992,471 2.98 9,498,118 1.34 8.298 116.2 70.49
10,000,000 - 11,999,999 3 32,707,519 2.57 10,902,506 1.34 8.269 118.7 74.63
12,000,000 - 13,999,999 9 116,433,805 9.13 12,937,089 1.25 8.327 117.0 73.94
14,000,000 - 16,999,999 5 76,279,887 5.98 15,255,977 1.27 7.959 117.8 78.26
17,000,000 - 19,999,999 6 113,692,119 8.92 18,948,687 1.25 8.116 117.2 75.06
20,000,000 - 49,999,999 7 223,358,047 17.52 31,908,292 1.43 8.148 126.2 67.55
50,000,000 - 145,831,430 2 246,831,430 19.36 123,415,715 1.82 7.708 118.0 53.51
----- ------------- -------
TOTAL/WTD. AVG. 175 1,274,707,224 100.00% 7,284,041 1.43X 8.147% 119.1 68.58%
=== ============= =======
------------------------------------------------------------------------------------------------------------------------------------
</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>
ANNEX C
ALL INFORMATION IN THIS TERM SHEET, WHETHER REGARDING THE ASSETS BACKING ANY
SECURITIES DISCUSSED HEREIN OR OTHERWISE, WILL BE SUPERSEDED BY THE INFORMATION
CONTAINED IN ANY FINAL PROSPECTUS FOR ANY SECURITIES ACTUALLY SOLD TO YOU.
--------------------------------------------------------------------------------
COLLATERAL TERM SHEET
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
DISTRIBUTION OF MORTGAGED PROPERTIES BY STATE (a)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
WEIGHTED
AVERAGE WEIGHTED
PERCENTAGE OF WEIGHTED REMAINING AVERAGE
NUMBER OF AGGREGATE CUT- WEIGHTED AVERAGE TERM TO CUT-OFF
MORTGAGED CUT-OFF DATE 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>
Arizona 7 $160,602,136 12.60% $22,943,162 1.56x 7.942% 118.0 59.23%
Florida 18 136,608,723 10.72 7,589,374 1.30 8.195 130.0 74.53
California 19 126,030,393 9.89 6,633,179 1.29 8.275 116.5 71.95
Virginia 6 125,025,894 9.81 20,837,649 2.00 7.621 117.5 51.54
Texas 28 123,280,284 9.67 4,402,867 1.30 8.206 117.3 74.93
New York 14 72,889,659 5.72 5,206,404 1.34 8.086 118.7 70.17
Colorado 3 53,814,748 4.22 17,938,249 1.47 7.981 118.8 64.05
Nevada 6 49,806,601 3.91 8,301,100 1.25 8.215 117.5 75.66
Pennsylvania 10 45,039,347 3.53 4,503,935 1.35 8.313 123.7 75.44
Maryland 6 43,562,322 3.42 7,260,387 1.44 8.256 117.3 66.17
Connecticut 8 41,967,857 3.29 5,245,982 1.31 8.487 116.0 74.30
North Carolina 7 37,813,320 2.97 5,401,903 1.35 8.255 117.5 74.59
Massachusetts 5 37,446,311 2.94 7,489,262 1.30 8.481 114.9 73.04
New Jersey 6 27,649,482 2.17 4,608,247 1.41 8.236 115.5 70.92
Minnesota 6 27,330,181 2.14 4,555,030 1.26 8.547 116.5 73.39
Michigan 4 24,134,678 1.89 6,033,670 1.37 8.277 117.8 74.89
Georgia 5 24,003,721 1.88 4,800,744 1.25 8.286 117.6 69.67
Washington 6 23,804,587 1.87 3,967,431 1.25 8.106 118.7 70.76
Illinois 7 18,578,346 1.46 2,654,049 1.32 8.397 128.2 75.12
South Carolina 3 16,420,526 1.29 5,473,509 1.27 8.328 117.6 77.02
New Mexico 2 8,810,794 0.69 4,405,397 1.89 8.303 118.6 50.53
Oregon 2 6,835,978 0.54 3,417,989 1.27 7.997 116.4 74.56
Utah 1 6,495,813 0.51 6,495,813 1.33 8.200 119.0 73.15
Idaho 1 6,395,852 0.50 6,395,852 1.26 8.170 119.0 75.25
Ohio 2 6,327,527 0.50 3,163,763 1.51 8.389 118.3 63.35
Vermont 1 5,185,037 0.41 5,185,037 1.46 8.750 117.0 64.01
Kentucky 2 3,394,377 0.27 1,697,188 1.26 8.350 117.0 77.16
Alabama 1 2,925,669 0.23 2,925,669 2.03 8.444 119.0 44.45
Wisconsin 1 2,919,727 0.23 2,919,727 1.27 8.000 117.0 78.70
Tennessee 1 2,672,175 0.21 2,672,175 2.03 8.444 119.0 44.45
Missouri 1 1,995,716 0.16 1,995,716 1.21 8.200 116.0 76.76
Rhode Island 3 1,897,538 0.15 632,513 1.27 8.761 115.0 77.27
Iowa 3 1,330,212 0.10 443,404 1.29 8.690 116.0 74.94
Indiana 1 872,266 0.07 872,266 1.27 8.770 115.0 62.30
Mississippi 1 839,427 0.07 839,427 1.31 7.920 119.0 76.31
----- -------------- --------
TOTAL/AVG./WTD. 197 $1,274,707,224 100.00% $6,470,595 1.43X 8.147% 119.1 68.58%
------------------------------------------------------------------------------------------------------------------------------------
</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>
ANNEX C
ALL INFORMATION IN THIS TERM SHEET, WHETHER REGARDING THE ASSETS BACKING ANY
SECURITIES DISCUSSED HEREIN OR OTHERWISE, WILL BE SUPERSEDED BY THE INFORMATION
CONTAINED IN ANY FINAL PROSPECTUS FOR ANY SECURITIES ACTUALLY SOLD TO YOU.
--------------------------------------------------------------------------------
COLLATERAL TERM SHEET
--------------------------------------------------------------------------------
[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 MS MA
1.87% 0.07% 2.94%
OR MI RI
0.54% 1.89% 0.15%
ID IN CT
0.50% 0.07% 3.29%
CA KY NJ
9.89% 0.27% 2.17%
NV TN MD
3.91% 0.21% 3.42%
UT AL
0.51% 0.23%
AZ OH
12.60% 0.50%
CO NY
4.22% 5.72%
NM PA
0.69% 3.53%
TX VA
9.67% 9.81%
MN NC
2.14% 2.97%
IA SC
0.10% 1.29%
MO GA
0.16% 1.88%
WI FL
0.23% 10.72%
IL VT
1.46% 0.41%
[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.]
Maryland Other (a)
3.42% 26.52%
Pennsylvania Arizona
3.53% 12.60%
Nevada Florida
3.91% 10.72%
Colorado California
4.22% 9.89%
New York Virginia
5.72% 9.81%
Texas
9.67%
(a) Other includes 25 states.
This material is for your private information and we are not soliciting any
action based upon it. This material is not to be construed as an offer to sell
or the solicitation of any offer to buy any security in any jurisdiction where
such an offer or solicitation would be illegal. This material is based on
information that we consider reliable, but we do not represent that it is
accurate or complete and it should not be relied upon as such. By accepting this
material the recipient agrees that it will not distribute or provide the
material to any other person. The information contained in this material may be
based on assumptions regarding market conditions and other matters as reflected
therein. We make no representations regarding the reasonableness of such
assumptions or the likelihood that any of such assumptions will coincide with
actual market conditions or events, and this material should not be relied upon
for such purposes. We and our affiliates, officers, directors, partners and
employees, including persons involved in the preparation or issuance of this
material may, from time to time, have long or short positions in, and buy and
sell, the securities mentioned therein or derivatives thereof (including
options). This material may be filed with the Securities and Exchange Commission
(the "SEC") and incorporated by reference into an effective registration
statement previously filed with the SEC under Rule 415 of the Securities Act of
1933, including in cases where the material does not pertain to securities that
are ultimately offered for sale pursuant to such registration statement.
Information contained in this material is current as of the date appearing on
this material only. Information in this material regarding any assets backing
any securities discussed herein supersedes all prior information regarding such
assets. All information in this Term Sheet, whether regarding the assets backing
any securities discussed herein or otherwise, will be superseded by the
information contained in any final prospectus for any securities actually sold
to you.
This material is furnished to you by 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>
ANNEX C
ALL INFORMATION IN THIS TERM SHEET, WHETHER REGARDING THE ASSETS BACKING ANY
SECURITIES DISCUSSED HEREIN OR OTHERWISE, WILL BE SUPERSEDED BY THE INFORMATION
CONTAINED IN ANY FINAL PROSPECTUS FOR ANY SECURITIES ACTUALLY SOLD TO YOU.
--------------------------------------------------------------------------------
COLLATERAL TERM SHEET
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
DISTRIBUTION OF PROPERTY TYPES
--------------------------------------------------------------------------------
<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 TYPE PROPERTIES BALANCE BALANCE DATE BALANCE DSCR RATE (MOS) RATIO
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Retail (a) 52 $522,224,773 40.97% $10,042,784 1.54x 8.021% 117.5 64.72%
Multifamily 72 389,271,657 30.54 5,406,551 1.27 8.128 123.0 74.68
Office 33 200,045,888 15.69 6,061,997 1.34 8.209 117.5 70.33
Lodging (b) 18 94,859,820 7.44 5,269,990 1.69 8.632 116.7 60.59
Industrial 14 45,933,861 3.60 3,280,990 1.35 8.389 117.4 69.94
Mixed Use 1 9,455,001 0.74 9,455,001 1.33 7.940 118.0 68.51
Mobile Home Park 4 7,776,844 0.61 1,944,211 1.36 8.587 116.5 69.99
Self-Storage 3 5,139,379 0.40 1,713,126 1.35 8.750 116.3 64.27
--- -------------- ------
TOTAL/WTD. AVG. 197 $1,274,707,224 100.00% $6,470,595 1.43X 8.147% 119.1 68.58%
=== ============== ======
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Includes 31 properties for a total of $443.3 million (34.78% of Aggregate
Cut-Off Date Balance) that are Anchored Retail.
(b) Eight Lodging properties (2.47% of Aggregate Cut-Off Date Balance) comprise
the investment grade AmeriSuites loan.
(c) Other includes one Mixed Use property, four Mobile Home properties and
three Self-Storage properties.
[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.]
Industrial
3.60%
Lodging (b)
7.44%
Other (c)
1.76%
Office
15.69%
Retail (a)
40.97%
Multifamily
30.54%
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>
ANNEX C
ALL INFORMATION IN THIS TERM SHEET, WHETHER REGARDING THE ASSETS BACKING ANY
SECURITIES DISCUSSED HEREIN OR OTHERWISE, WILL BE SUPERSEDED BY THE INFORMATION
CONTAINED IN ANY FINAL PROSPECTUS FOR ANY SECURITIES ACTUALLY SOLD TO YOU.
--------------------------------------------------------------------------------
COLLATERAL TERM SHEET
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
DISTRIBUTION OF UNDERWRITTEN NCF DEBT SERVICE COVERAGE RATIOS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
WEIGHTED
AVERAGE WEIGHTED
RANGE OF DEBT PERCENTAGE WEIGHTED REMAINING AVERAGE
SERVICE NUMBER OF OF AGGREGATE WEIGHTED AVERAGE TERM TO CUT-OFF
COVERAGE MORTGAGE CUT-OFF DATE CUT-OFF DATE AVERAGE CUT-OFF AVERAGE MORTGAGE MATURITY DATE LTV
RATIOS LOANS BALANCE BALANCE DATE BALANCE DSCR RATE (MOS) RATIO
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1.11 - 1.19x 4 $41,960,805 3.29% $10,490,201 1.19x 8.309% 174.1 77.00%
1.20 - 1.29 99 610,308,747 47.88 6,164,735 1.25 8.237 117.3 75.04
1.30 - 1.39 33 136,686,398 10.72 4,142,012 1.33 8.209 116.5 73.55
1.40 - 1.49 20 158,374,808 12.42 7,918,740 1.46 8.268 117.2 67.34
1.50 - 1.59 11 169,390,189 13.29 15,399,108 1.57 7.955 117.0 59.31
1.60 - 1.69 4 18,442,651 1.45 4,610,663 1.64 8.364 117.8 61.54
1.90 - 1.99 1 3,288,994 0.26 3,288,994 1.97 8.650 116.0 56.71
2.00 - 2.09 2 35,254,632 2.77 17,627,316 2.03 8.430 118.7 45.49
2.10 - 2.19 1 101,000,000 7.92 101,000,000 2.17 7.437 118.0 46.54
--- -------------- ------
TOTAL/WTD. AVG. 175 $1,274,707,224 100.00% $7,284,041 1.43X 8.147% 119.1 68.58%
=== ============== ======
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
--------------------------------------------------------------------------------
DISTRIBUTION OF CUT-OFF DATE LOAN TO VALUE AT ORIGINATION RATIOS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
WEIGHTED
AVERAGE WEIGHTED
PERCENTAGE WEIGHTED REMAINING AVERAGE
RANGE OF CUT- NUMBER OF OF AGGREGATE WEIGHTED AVERAGE TERM TO CUT-OFF
OFF DATE LOAN- MORTGAGE CUT-OFF DATE CUT-OFF DATE AVERAGE CUT-OFF AVERAGE MORTGAGE MATURITY DATE LTV
TO-VALUE RATIOS LOANS BALANCE BALANCE DATE BALANCE DSCR RATE (MOS) RATIO
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
40.1 - 45.0% 1 $31,468,201 2.47% $31,468,201 2.03x 8.444% 119.0 44.45%
45.1 - 50.0 2 101,948,369 8.00 50,974,185 2.16 7.444 118.0 46.56
50.1 - 55.0 3 7,739,417 0.61 2,579,806 1.75 8.272 116.9 53.69
55.1 - 60.0 7 161,943,684 12.70 23,134,812 1.58 7.952 117.9 58.27
60.1 - 65.0 20 103,637,169 8.13 5,181,858 1.42 8.220 118.0 62.96
65.1 - 70.0 31 151,049,107 11.85 4,872,552 1.35 8.220 117.5 67.76
70.1 - 75.0 49 274,130,616 21.51 5,594,502 1.29 8.392 122.9 73.17
75.1 - 80.0 59 430,136,048 33.74 7,290,441 1.26 8.159 117.2 77.97
80.1 - 85.0 3 12,654,613 0.99 4,218,204 1.21 8.342 159.9 84.25
--- -------------- -------
TOTAL/WTD. AVG. 175 $1,274,707,224 100.00% $7,284,041 1.43X 8.147% 119.1 68.58%
=== ============= ======
------------------------------------------------------------------------------------------------------------------------------------
</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>
ANNEX C
ALL INFORMATION IN THIS TERM SHEET, WHETHER REGARDING THE ASSETS BACKING ANY
SECURITIES DISCUSSED HEREIN OR OTHERWISE, WILL BE SUPERSEDED BY THE INFORMATION
CONTAINED IN ANY FINAL PROSPECTUS FOR ANY SECURITIES ACTUALLY SOLD TO YOU.
--------------------------------------------------------------------------------
COLLATERAL TERM SHEET
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
DISTRIBUTION OF MORTGAGE INTEREST RATES
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
WEIGHTED
AVERAGE WEIGHTED
PERCENTAGE WEIGHTED REMAINING AVERAGE
NUMBER OF OF AGGREGATE WEIGHTED AVERAGE TERM TO CUT-OFF
RANGE OF MORTGAGE CUT-OFF DATE CUT-OFF DATE AVERAGE CUT-OFF AVERAGE MORTGAGE MATURITY DATE LTV
MORTGAGE RATES LOANS BALANCE BALANCE DATE BALANCE DSCR RATE (MOS) RATIO
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
7.2501 - 7.5000 1 $101,000,000 7.92% $101,000,000 2.17x 7.437% 118.0 46.54%
7.5001 - 7.7500 1 29,978,826 2.35 29,978,826 1.47 7.750 119.0 65.31
7.7501 - 8.0000 18 324,765,529 25.48 18,042,529 1.44 7.907 119.1 65.91
8.0001 - 8.2500 50 352,726,473 27.67 7,054,529 1.27 8.159 118.0 74.57
8.2501 - 8.5000 54 325,690,210 25.55 6,031,300 1.37 8.364 122.9 71.54
8.5001 - 8.7500 34 93,069,078 7.30 2,737,326 1.35 8.661 114.2 69.37
8.7501 - 9.0000 12 37,304,834 2.93 3,108,736 1.35 8.904 113.1 70.01
9.0001 - 9.2500 4 9,267,732 0.73 2,316,933 1.37 9.195 112.1 68.69
9.5001 - 9.6300 1 904,541 0.07 904,541 1.20 9.630 173.0 60.30
--- -------------- ------
TOTAL/WTD. AVG. 175 $1,274,707,224 100.00% $7,284,041 1.43X 8.147% 119.1 68.58%
=== ============= ======
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
--------------------------------------------------------------------------------
DISTRIBUTION OF REMAINING AMORTIZATION TERMS (a)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
WEIGHTED
AVERAGE WEIGHTED
PERCENTAGE WEIGHTED REMAINING AVERAGE
RANGE OF REMAINING NUMBER OF OF AGGREGATE WEIGHTED AVERAGE TERM TO CUT-OFF
AMORTIZATION TERMS MORTGAGE CUT-OFF DATE CUT-OFF DATE AVERAGE CUT-OFF AVERAGE MORTGAGE MATURITY DATE LTV
(MOS) LOANS BALANCE BALANCE DATE BALANCE DSCR RATE (MOS) RATIO
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
171 - 190 2 $1,983,041 0.16% $991,520 1.17x 8.798% 173.0 63.49%
231 - 250 1 1,881,300 0.15 1,881,300 1.24 8.900 113.0 69.68
271 - 290 1 4,116,011 0.32 4,116,011 1.23 8.360 118.0 73.50
291 - 310 35 134,234,558 10.53 3,835,273 1.59 8.585 116.4 63.34
311 - 330 3 3,028,070 0.24 1,009,357 1.26 8.521 114.3 68.43
331 - 360 133 1,129,464,245 88.61 8,492,212 1.41 8.091 119.4 69.19
--- ------------- -----
TOTAL/WTD. AVG. 175 $1,274,707,224 100.00% $7,284,041 1.43X 8.147% 119.1 68.58%
=== ============= ======
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) 174 loans representing 92.08% of the Aggregate Cut-Off Date Balance accrue
interest on an Actual/360 or an Acutal/365 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>
ANNEX C
ALL INFORMATION IN THIS TERM SHEET, WHETHER REGARDING THE ASSETS BACKING ANY
SECURITIES DISCUSSED HEREIN OR OTHERWISE, WILL BE SUPERSEDED BY THE INFORMATION
CONTAINED IN ANY FINAL PROSPECTUS FOR ANY SECURITIES ACTUALLY SOLD TO YOU.
--------------------------------------------------------------------------------
COLLATERAL TERM SHEET
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
DISTRIBUTION OF ORIGINAL TERMS TO MATURITY
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
WEIGHTED
AVERAGE WEIGHTED
PERCENTAGE WEIGHTED REMAINING AVERAGE
NUMBER OF OF AGGREGATE WEIGHTED AVERAGE TERM TO CUT-OFF
RANGE OF ORIGINAL TERM MORTGAGE CUT-OFF DATE CUT-OFF DATE AVERAGE CUT-OFF AVERAGE MORTGAGE MATURITY DATE LTV
TO MATURITY (MOS) LOANS BALANCE BALANCE DATE BALANCE DSCR RATE (MOS) RATIO
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
60 - 83 2 $2,594,554 0.20% $1,297,277 1.50x 8.873% 55.0 75.76%
84 - 120 167 1,216,097,324 95.40 7,282,020 1.44 8.140 117.2 68.19
121 - 180 6 56,015,346 4.39 9,335,891 1.20 8.270 163.5 76.65
--- -------------- ------
TOTAL/WTD. AVG. 175 $1,274,707,224 100.00% $7,284,041 1.43X 8.147% 119.1 68.58%
=== ============= ======
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
--------------------------------------------------------------------------------
DISTRIBUTION OF REMAINING TERMS TO MATURITY
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
WEIGHTED
AVERAGE WEIGHTED
PERCENTAGE WEIGHTED REMAINING AVERAGE
NUMBER OF OF AGGREGATE WEIGHTED AVERAGE TERM TO CUT-OFF
RANGE OF REMAINING MORTGAGE CUT-OFF DATE CUT-OFF DATE AVERAGE CUT-OFF AVERAGE MORTGAGE MATURITY DATE LTV
TERMS TO MATURITY (MOS) LOANS BALANCE BALANCE DATE BALANCE DSCR RATE (MOS) RATIO
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
51 - 70 2 $2,594,554 0.20% $1,297,277 1.50x 8.873% 55.0 75.76%
91 - 110 3 14,483,673 1.14 4,827,891 1.29 8.623 109.4 68.80
111 - 120 164 1,201,613,650 94.27 7,326,913 1.44 8.134 117.3 68.19
121 - 130 1 13,150,000 1.03 13,150,000 1.23 8.050 129.0 76.68
151 - 170 1 6,085,660 0.48 6,085,660 1.18 8.500 156.0 84.82
171 - 190 4 36,779,686 2.89 9,194,921 1.19 8.310 177.1 75.29
--- -------------- ------
TOTAL/WTD. AVG. 175 $1,274,707,224 100.00% $7,284,041 1.43X 8.147% 119.1 68.58%
=== ============== ======
------------------------------------------------------------------------------------------------------------------------------------
</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>
ANNEX C
ALL INFORMATION IN THIS TERM SHEET, WHETHER REGARDING THE ASSETS BACKING ANY
SECURITIES DISCUSSED HEREIN OR OTHERWISE, WILL BE SUPERSEDED BY THE INFORMATION
CONTAINED IN ANY FINAL PROSPECTUS FOR ANY SECURITIES ACTUALLY SOLD TO YOU.
--------------------------------------------------------------------------------
COLLATERAL TERM SHEET
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
DISTRIBUTION OF AMORTIZATION TYPES
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
WEIGHTED
AVERAGE WEIGHTED
PERCENTAGE WEIGHTED REMAINING AVERAGE
NUMBER OF OF AGGREGATE WEIGHTED AVERAGE TERM TO CUT-OFF
MORTGAGE CUT-OFF DATE CUT-OFF DATE AVERAGE CUT-OFF AVERAGE MORTGAGE MATURITY DATE LTV
AMORTIZATION TYPE LOANS BALANCE BALANCE DATE BALANCE DSCR RATE (MOS) RATIO
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Amortizing Balloon 143 $909,896,397 71.38% $6,362,912 1.43x 8.091% 119.8 68.56%
Hyperamortizing 30 360,962,673 28.32 12,032,089 1.42 8.287 117.4 68.60
Fully Amortizing 2 3,848,154 0.30 1,924,077 1.28 8.506 129.4 71.54
--- -------------- ------
TOTAL/WTD. AVG. 175 $1,274,707,224 100.00% $7,284,041 1.43X 8.147% 119.1 68.58%
=== ============= ======
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
--------------------------------------------------------------------------------
DISTRIBUTION OF PREPAYMENT PROVISIONS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
WEIGHTED
AVERAGE WEIGHTED
PERCENTAGE WEIGHTED REMAINING AVERAGE
NUMBER OF OF AGGREGATE WEIGHTED AVERAGE TERM TO CUT-OFF
MORTGAGE CUT-OFF DATE CUT-OFF DATE AVERAGE CUT-OFF AVERAGE MORTGAGE MATURITY DATE LTV
PREPAYMENT PROVISION LOANS BALANCE BALANCE DATE BALANCE DSCR RATE (MOS) RATIO
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Defeasance 171 $1,247,980,138 97.90% $7,298,129 1.43x 8.150% 119.2 68.44%
Greater of YM or 1% UPB 3 25,731,243 2.02 8,577,081 1.28 8.000 117.4 75.34
Declining Fee 1 995,843 0.08 995,843 1.33 8.540 115.0 68.21
--- --------- ------
TOTAL/WTD. AVG. 175 $1,274,707,224 100.00% $7,284,041 1.43X 8.147% 119.1 68.58%
=== ============= ======
------------------------------------------------------------------------------------------------------------------------------------
</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>
ANNEX C
ALL INFORMATION IN THIS TERM SHEET, WHETHER REGARDING THE ASSETS BACKING ANY
SECURITIES DISCUSSED HEREIN OR OTHERWISE, WILL BE SUPERSEDED BY THE INFORMATION
CONTAINED IN ANY FINAL PROSPECTUS FOR ANY SECURITIES ACTUALLY SOLD TO YOU.
--------------------------------------------------------------------------------
COLLATERAL TERM SHEET
ARIZONA MILLS
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
MORTGAGE LOAN INFORMATION
--------------------------------------------------------------------------------
ORIGINAL CUT-OFF DATE
PRINCIPAL BALANCE: $146,000,000 $145,831,430
% OF POOL BY UPB 11.44%
ORIGINATOR: GMACCM and GSMC
NOTE DATE: October 2, 2000
INTEREST RATE: 7.895%
AMORTIZATION: 30 years
MATURITY DATE: October 5, 2010
BORROWER/SPONSOR: The Borrower is Arizona
Mills, LLC a
bankruptcy-remote SPE
sponsored by Mills
Corporation (NYSE: MLS),
Taubman Realty Group (NYSE:
TCO) (BBB-/Ba2 - S&P/Moody's)
and Simon Property Group
(NYSE: SPG) (BBB+/Baa1 -
S&P/Moody's).
CALL PROTECTION: Prepayment lockout; U.S. Treasury
defeasance.
CROSS-COLLATERALIZATION/ NAP/NAP
DEFAULT:
ADDITIONAL FINANCING: In addition to trade payables
incurred in the ordinary
course of business, the
borrower may incur up to
$3,000,000 of debt secured by
personal property at the
Arizona Mills property, such
that the aggregate amount of
such additional debt does not
exceed 4.0% of the outstanding
principal balance of the
Arizona Mills loan.
CASH MANAGEMENT: Hard Lockbox
MONTHLY RESERVES Real Estate Tax Reserve: $259,442.83
Insurance Reserve: $5,392.33
Replacement Reserve: $15,375.00
Initial TI/LC Reserve: $1,117,478.99
In addition, a monthly TI/LC
Reserve of $108,333.33 will
be collected after certain
trigger events.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
PROPERTY INFORMATION
--------------------------------------------------------------------------------
SINGLE ASSET/PORTFOLIO: Single Asset
PROPERTY TYPE: Anchored Retail, Regional Mall
LOCATION: Tempe, AZ
YEAR BUILT / RENOVATED: 1997/NAP
THE COLLATERAL: The loan is secured by a 1.23 million square
foot value-oriented regional mall anchored by
J.C. Penney, Oshmans Supersport, Burlington
Coat Factory and Harkins Great Mall Cinema and
located in Tempe, AZ.
PROPERTY MANAGEMENT: The property is managed by the Mills
Corporation, an affiliate of the Borrower.
CURRENT OCCUPANCY (11/20/00): 97.9%
UNDERWRITTEN NET CASH FLOW: $20,097,142
APPRAISED VALUE: $250,000,000
APPRAISAL DATE: August 30, 2000
CUT-OFF DATE LOAN/SF: $118.56
CUT-OFF DATE LTV: 58.33%
BALLOON LTV: 52.09%
UWNCF DSCR: 1.58x
--------------------------------------------------------------------------------
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>
ANNEX C
ALL INFORMATION IN THIS TERM SHEET, WHETHER REGARDING THE ASSETS BACKING ANY
SECURITIES DISCUSSED HEREIN OR OTHERWISE, WILL BE SUPERSEDED BY THE INFORMATION
CONTAINED IN ANY FINAL PROSPECTUS FOR ANY SECURITIES ACTUALLY SOLD TO YOU.
--------------------------------------------------------------------------------
COLLATERAL TERM SHEET
ARIZONA MILLS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------
ANCHORS
----------------------------------------------------------------------------------------------------------------
SQUARE % OF TOTAL LEASE 7/98 TO 6/99 7/99 TO 6/00 OCCUPANCY
TENANT FEET NRA EXPIRATION SALES PSF SALES PSF COST
----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
JC Penney (a) 104,697 8.51% 11/30/2012 $246 $237 2.3%
----------------------------------------------------------------------------------------------------------------
Harkins Theater 92,320 7.51 11/19/2012 142 162 9.1
----------------------------------------------------------------------------------------------------------------
Burlington Coat Factory 80,426 6.54 1/31/2013 134 149 3.8
----------------------------------------------------------------------------------------------------------------
Oshman's Supersport 65,013 5.29 1/31/2013 97 118 5.6
----------------------------------------------------------------------------------------------------------------
TOTAL/WEIGHTED AVERAGE 342,456 27.84% $163 $174 5.1%
----------------------------------------------------------------------------------------------------------------
</TABLE>
(a) JC Penney is rated BBB/Baa2/BBB- by S&P/Moody's/Fitch
--------------------------------------------------------------------------------
NEXT FIVE LARGEST RETAIL TENANTS
--------------------------------------------------------------------------------
TENANT SQUARE FEET % OF TOTAL NRA LEASE EXPIRATION
--------------------------------------------------------------------------------
Linens & Things 40,057 3.26% 1/31/2013
--------------------------------------------------------------------------------
Gameworks 37,348 3.04 11/30/2007
--------------------------------------------------------------------------------
Off 5th (Saks) (b) 34,716 2.82 11/19/2012
--------------------------------------------------------------------------------
Marshall's 31,315 2.55 11/30/2007
--------------------------------------------------------------------------------
Virgin Megastore 30,822 2.51 1/31/2009
--------------------------------------------------------------------------------
TOTAL/WEIGHTED AVERAGE 174,258 14.17%
--------------------------------------------------------------------------------
(b) Saks, inc. is rated BB+/Baa3/BBB- by S&P/Moody's/Fitch
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>
ANNEX C
ALL INFORMATION IN THIS TERM SHEET, WHETHER REGARDING THE ASSETS BACKING ANY
SECURITIES DISCUSSED HEREIN OR OTHERWISE, WILL BE SUPERSEDED BY THE INFORMATION
CONTAINED IN ANY FINAL PROSPECTUS FOR ANY SECURITIES ACTUALLY SOLD TO YOU.
--------------------------------------------------------------------------------
COLLATERAL TERM SHEET
MACARTHUR CENTER
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SENIOR MORTGAGE LOAN INFORMATION
--------------------------------------------------------------------------------
ORIGINAL CUT-OFF DATE
PRINCIPAL BALANCE: $101,000,000 $101,000,000
% OF POOL BY UPB: 7.92%
ORIGINATOR: Archon Financial, LP
NOTE DATE: October 19, 2000
INTEREST RATE: 7.437%
AMORTIZATION: 30 years
ARD DATE: October 1, 2010
BORROWER/SPONSOR: The Borrower, MacArthur Shopping Center, LLC, is
sponsored by the Taubman Realty Group (NYSE: TCO).
CALL PROTECTION: Prepayment lockout; U.S. Treasury defeasance.
CROSS-COLLATERALIZATION/ NAP/Yes, Cross Defaulted with the $44 million
DEFAULT: MacArthur Companion loans
ADDITIONAL FINANCING: In addition to the senior mortgage loan, there are
two companion loans secured by the first mortgage of
the related loan group with an aggregate cut-off date
principal balance of $43,883,791. These loans are
fully subordinate to the related senior mortgage
loan. In addition, the Borrower may incur up to (i)
$2,500,000 of debt secured by fixtures, equipment, or
personal property at the MacArthur Center property,
and (ii) $4,000,000 of trade payables incurred in the
ordinary course of business.
CASH MANAGEMENT: Hard Lockbox
RESERVES: $665,000 per annum for TI/LC's if the Loan Group DSCR
based on adjusted NOI, as tested quarterly, falls
below 1.28x;
Ground lease rent, tax and insurance reserves if the
Loan Group DSCR based on adjusted NOI, as tested
quarterly, falls below 1.23x;
The Borrower is required to fund a reserve or post
letters of credit in the amount of (I) $2.8 million
and (ii) $400,000 if Regal Cinemas or Rainforest Cafe
fails to pay rent or ceases operations. In addition,
with respect to Regal, the reserve is triggered if
Regal files bankruptcy and debt service coverage at
the Property falls below 1.40x.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
PROPERTY INFORMATION
--------------------------------------------------------------------------------
SINGLE ASSET/PORTFOLIO: Single Asset
PROPERTY TYPE: Anchored Retail, Regional Mall
LOCATION: Norfolk, VA
YEAR BUILT / RENOVATED: 1999 / NAP
THE COLLATERAL: A 942,668, three-level urban regional retail
center anchored by Nordstrom and Dillard's and
located in downtown Norfolk, VA. The anchor
improvements are independently owned and are not
part of the collateral for the loan. Total Mall
Shop GLA equal 528,846 square feet.
PROPERTY MANAGEMENT: The property is managed by Taubman Company, L.P.,
an affiliate of the Borrower.
CURRENT OCCUPANCY (09/06/00): 90.4%
UNDERWRITTEN NET CASH FLOW: $18,387,394
APPRAISED VALUE: $217,000,000
APPRAISAL DATE: September 13, 2000
CUT-OFF DATE LOAN /
MALL SHOP GLA: $190.98
CUT-OFF DATE LTV: 46.54%
BALLOON LTV: 41.01%
UWNCF DSCR: 2.17x
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
LOAN GROUP INFORMATION
--------------------------------------------------------------------------------
LOAN GROUP CUT-OFF DATE
PRINCIPAL BALANCE: $144,883,791
LOAN GROUP CUT-OFF DATE
PRINCIPAL BALANCE / MALL SHOP
GLA: $274.15
LOAN GROUP INTEREST RATE: 7.59%
LOAN GROUP UWNCF DSCR: 1.48x
LOAN GROUP CUT-OFF DATE LTV: 66.77%
--------------------------------------------------------------------------------
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>
ANNEX C
ALL INFORMATION IN THIS TERM SHEET, WHETHER REGARDING THE ASSETS BACKING ANY
SECURITIES DISCUSSED HEREIN OR OTHERWISE, WILL BE SUPERSEDED BY THE INFORMATION
CONTAINED IN ANY FINAL PROSPECTUS FOR ANY SECURITIES ACTUALLY SOLD TO YOU.
--------------------------------------------------------------------------------
COLLATERAL TERM SHEET
MACARTHUR CENTER
--------------------------------------------------------------------------------
------------------------------------------------------------------------------
ANCHORS (a)
------------------------------------------------------------------------------
TENANT SQUARE FEET % OF TOTAL GLA S&P / MOODY'S CREDIT RATING
------------------------------------------------------------------------------
Nordstrom's 160,200 17.0% A / A2
------------------------------------------------------------------------------
Dillard's 253,616 26.9 BBB- / Baa3
------------------------------------------------------------------------------
TOTAL/WEIGHTED
AVERAGE 413,816 43.9%
------------------------------------------------------------------------------
--------------------------------------------------------------------------------
FIVE LARGEST RETAIL TENANTS
-------------------------------------------------------------------------------
TENANT SQUARE FEET % OF TOTAL GLA (b) LEASE EXPIRATION
-------------------------------------------------------------------------------
The Rainforest Cafe 15,980 3.7% 5/31/2009
-------------------------------------------------------------------------------
Foot Locker 14,711 3.4% 3/31/2009
-------------------------------------------------------------------------------
Waves 10,000 2.3% 1/31/2009
-------------------------------------------------------------------------------
Restoration Hardware 10,000 2.3% 1/31/2012
-------------------------------------------------------------------------------
Z Gallerie 9,500 2.2% 3/31/2009
-------------------------------------------------------------------------------
(a) The Anchor Tenants are independently owned and are not part of the
collateral for the loan
(b) Based on Mall Shop GLA and does not include Regal Cinema, Inc. (78,752 sf)
and Jeepers! (20,001 sf)
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>
ANNEX C
ALL INFORMATION IN THIS TERM SHEET, WHETHER REGARDING THE ASSETS BACKING ANY
SECURITIES DISCUSSED HEREIN OR OTHERWISE, WILL BE SUPERSEDED BY THE INFORMATION
CONTAINED IN ANY FINAL PROSPECTUS FOR ANY SECURITIES ACTUALLY SOLD TO YOU.
--------------------------------------------------------------------------------
COLLATERAL TERM SHEET
1999 BROADWAY
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
MORTGAGE LOAN INFORMATION
--------------------------------------------------------------------------------
ORIGINAL CUT-OFF DATE
PRINCIPAL BALANCE: $50,000,000 $49,966,246
% OF POOL BY UPB 3.92%
ORIGINATOR: German American Capital Corporation
NOTE DATE: October 20, 2000
INTEREST RATE: 7.97%
AMORTIZATION: 30 years
ARD DATE: November 1, 2010
BORROWER/SPONSOR: The Borrower is 1999 Broadway, LLC, a bankruptcy
remote SPE sponsored by Winthrop Financial
Associates.
CALL PROTECTION: Prepayment lockout; U.S. Treasury defeasance.
CROSS-COLLATERALIZATION/ NAP/NAP
DEFAULT:
ADDITIONAL FINANCING: None
CASH MANAGEMENT: Hard Lockbox
MONTHLY RESERVES TI/LC: $70,047.92
Replacement Reserve: $10,595.58
Real Estate Taxes: $61,525.71
Insurance: $5,166.90
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
PROPERTY INFORMATION
--------------------------------------------------------------------------------
SINGLE ASSET/PORTFOLIO: Single Asset
PROPERTY TYPE: Office
LOCATION: Denver, CO
YEAR BUILT / RENOVATED: 1985/NAP
THE COLLATERAL: The loan is secured by a 635,737 square foot,
43-story office building located in the central
business district of Denver, CO.
PROPERTY MANAGEMENT: The property is managed by Winthrop Management,
LLC, an affiliate of the Borrower.
CURRENT OCCUPANCY (9/1/00): 96.0%
UNDERWRITTEN NET CASH FLOW: $6,499,426
APPRAISED VALUE: $79,000,000
APPRAISAL DATE: September 2, 2000
CUT-OFF DATE LOAN/SF: $78.60
CUT-OFF DATE LTV: 63.25%
BALLOON LTV: 56.54%
UWNCF DSCR: 1.48x
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
FIVE LARGEST TENANTS
--------------------------------------------------------------------------------
TENANT SQUARE FEET % OF TOTAL NRA LEASE EXPIRATION
--------------------------------------------------------------------------------
Columbine JDS Systems, Inc. 100,420 15.80% 12/31/08
--------------------------------------------------------------------------------
GSA (a) 97,970 15.41 10/14/03
--------------------------------------------------------------------------------
Lucent Technologies, Inc. 72,979 11.48 12/31/05
--------------------------------------------------------------------------------
US West Communications, Inc. (b) 68,448 10.77 12/31/02
--------------------------------------------------------------------------------
H.S. Resources, Inc. 52,749 8.30 6/14/03
--------------------------------------------------------------------------------
TOTAL/WEIGHTED AVERAGE 392,566 61.75%
--------------------------------------------------------------------------------
(a) Four departments of the GSA occupy space at the property - the Department
of Labor, the Peace Corps, the Federal Tax Court and the Office of Surface
Mining. The table reflects the combined space under each of the GSA leases,
the earliest of which expires in 10/14/03
(b) Aggregated space reflecting multiple US West leases, the earliest of which
expires in 12/31/02
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>
ANNEX C
ALL INFORMATION IN THIS TERM SHEET, WHETHER REGARDING THE ASSETS BACKING ANY
SECURITIES DISCUSSED HEREIN OR OTHERWISE, WILL BE SUPERSEDED BY THE INFORMATION
CONTAINED IN ANY FINAL PROSPECTUS FOR ANY SECURITIES ACTUALLY SOLD TO YOU.
--------------------------------------------------------------------------------
COLLATERAL TERM SHEET
DRUCKER & FAULK MULTIFAMILY PORTFOLIO
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
MORTGAGE LOAN INFORMATION
--------------------------------------------------------------------------------
ORIGINAL CUT-OFF DATE
PRINCIPAL BALANCE: $49,350,000 $49,291,990
% OF POOL BY UPB 3.87%
ORGINATOR: Archon Financial, LP
NOTE DATE: September 29, 2000
INTEREST RATE: 7.79-7.89%
AMORTIZATION: 30 Years
MATURITY DATE: October 1, 2010
BORROWER/SPONSOR: Three loans made to borrowers with a related sponsor.
CALL PROTECTION: Prepayment lockout; U.S. Treasury defeasance.
CROSS-COLLATERALIZATION/
DEFAULT: Loans are not cross-collateralized or cross-defaulted.
ADDITIONAL FINANCING: None
CASH MANAGEMENT: None
MONTHLY RESERVES: Replacement: $20,266.67
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
PROPERTY INFORMATION
--------------------------------------------------------------------------------
SINGLE ASSET/PORTFOLIO: 3 Loan Portfolio
PROPERTY TYPE: Multifamily
LOCATION: Orlando, FL (2) & Morrisville, NC
YEAR BUILT / RENOVATED: 1984 & 1987, 1994 & 1998, and 1999 / NAP
THE COLLATERAL: The loans are secured by three multifamily
properties with a total of 1,129 units, two of
which are located in Orlando, FL and one of which
is located in Morrisville, NC.
PROPERTY MANAGEMENT: The properties are managed by Drucker & Faulk, an
affiliate of the Borrower
AGGREGATE OCCUPANCY
(9/18 - 9/19/00): 94.5%
AGGREGATE UNDERWRITTEN NET $5,423,196
CASH FLOW:
APPRAISED VALUE: $64,200,000
APPRAISAL DATE: August 31 & September 14, 2000
CUT-OFF DATE LOAN/UNITS: $43,660
CUT-OFF DATE LTV: 76.80%
BALLOON LTV: 68.47%
UWNCF DSCR: 1.27x
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COLLATERAL DETAILS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PROPERTY/LOCATION CUT-OFF DATE BALANCE APPRAISED VALUE LTV UNITS OCCUPANCY
-----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Harbor Pointe Apartments
Orlando, FL $18,378,727 $24,000,000 76.58% 600 92.0%
-----------------------------------------------------------------------------------------------------------------------
Brittany at Waterford Lakes
Orlando, FL 15,831,186 21,000,000 75.39 276 98.0
-----------------------------------------------------------------------------------------------------------------------
Cross Timbers Apartments
Morrisville, NC 15,082,076 19,200,000 78.55 253 94.0
-----------------------------------------------------------------------------------------------------------------------
TOTAL/WEIGHTED AVERAGE $49,291,990 $64,200,000 76.80% 1129 94.5%
-----------------------------------------------------------------------------------------------------------------------
</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-19
<PAGE>
ANNEX C
ALL INFORMATION IN THIS TERM SHEET, WHETHER REGARDING THE ASSETS BACKING ANY
SECURITIES DISCUSSED HEREIN OR OTHERWISE, WILL BE SUPERSEDED BY THE INFORMATION
CONTAINED IN ANY FINAL PROSPECTUS FOR ANY SECURITIES ACTUALLY SOLD TO YOU.
--------------------------------------------------------------------------------
COLLATERAL TERM SHEET
AMERISUITES
--------------------------------------------------------------------------------
ORIGINAL CUT-OFF DATE
PRINCIPAL BALANCE: $31,500,000 $31,468,201
% OF POOL BY UPB 2.47%
ORIGINATOR: GMACCM
NOTE DATE: October 19, 2000
INTEREST RATE: 8.44385%
AMORTIZATION: 25 years
MATURITY DATE: November 1, 2010
BORROWER/SPONSOR: The Borrower is EQI Financing V, LP, a single
purpose, bankruptcy-remote entity sponsored by
Equity Inns, Inc. (NYSE: ENN).
CALL PROTECTION: Prepayment lockout for twenty-four months; U.S.
Treasury defeasance there after
CROSS-COLLATERALIZATION/
DEFAULT: Yes / Yes
ADDITIONAL FINANCING: There is an additional companion loan secured by
the first mortgage of the related loan pair with a
cut-off date principal balance $4,495,457. This
loan is fully subordinate to the related senior
mortgage loan.
CASH MANAGEMENT: Hard Lockbox
RESERVES: Monthly Tax: $87,087.83
Debt Service: $73,112.22
Replacement: 4% of operating revenues if
trailing twelve-month
DSCR falls below 1.45x
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
PROPERTY INFORMATION
--------------------------------------------------------------------------------
SINGLE ASSET/PORTFOLIO: Portfolio
PROPERTY TYPE: Hospitality
LOCATION: Various
YEAR BUILT / RENOVATED: 1986-1997/1998-1999
THE COLLATERAL: The loan is secured by eight hotels with a total
of 965 units located throughout the United States.
PROPERTY MANAGEMENT: Six of the properties are managed by Prime
Hospitality Corp. One is managed by Interstate
Hotels Management, Inc. One is managed by Meristar
Management Company, LLC.
CURRENT OCCUPANCY (9/1/00): 74.6%
UNDERWRITTEN NET CASH FLOW: $6,175,617
APPRAISED VALUE: $70,800,000
APPRAISAL DATE: August, 2000
CUT-OFF DATE LOAN/UNIT: $32,610
CUT-OFF DATE LTV: 44.45%
BALLOON LTV: 36.92%
UWNCF DSCR: 2.03x
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
LOAN GROUP INFORMATION
--------------------------------------------------------------------------------
LOAN GROUP CUT-OFF DATE PRINCIPAL BALANCE: $35,963,658
LOAN GROUP CUT-OFF DATE PRINCIPAL BALANCE/UNIT: $37,268
LOAN GROUP INTEREST RATE: 8.25%
LOAN GROUP UWNCF DSCR: 1.81x
LOAN GROUP CUT-OFF DATE LTV: 50.80%
--------------------------------------------------------------------------------
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-20
<PAGE>
ANNEX C
ALL INFORMATION IN THIS TERM SHEET, WHETHER REGARDING THE ASSETS BACKING ANY
SECURITIES DISCUSSED HEREIN OR OTHERWISE, WILL BE SUPERSEDED BY THE INFORMATION
CONTAINED IN ANY FINAL PROSPECTUS FOR ANY SECURITIES ACTUALLY SOLD TO YOU.
--------------------------------------------------------------------------------
COLLATERAL TERM SHEET
AMERISUITES
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COLLATERAL DETAILS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------------------
PROPERTY CITY STATE # OF UNITS YEAR BUILT OCCUPANCY (a) ADR (a) CUT-OFF DATE BALANCE
---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
AmeriSuites Tampa Tampa Florida 126 1994 72.4% $94.59 6,721,957
--------------------------------------------------------------------------------------------------------------------------------
AmeriSuites Linthicum Heights Linthicum Maryland 128 1996 83.4 86.81 5,678,262
--------------------------------------------------------------------------------------------------------------------------------
AmeriSuites Albuquerque Albuquerque New Mexico 128 1997 79.6 68.49 5,314,629
--------------------------------------------------------------------------------------------------------------------------------
Residence Inn Somers Point Somers Point New Jersey 120 1986 75.8 105.21 4,720,230
--------------------------------------------------------------------------------------------------------------------------------
AmeriSuites Birmingham Hoover Alabama 128 1997 69.4 67.30 2,925,668
--------------------------------------------------------------------------------------------------------------------------------
Homewood Suites Germantown Germantown Tennessee 92 1996 66.1 86.64 2,672,175
--------------------------------------------------------------------------------------------------------------------------------
AmeriSuites Forest Park Forest Park Ohio 126 1992 62.2 72.33 2,211,515
--------------------------------------------------------------------------------------------------------------------------------
AmeriSuites Flagstaff Flagstaff Arizona 117 1993 71.7 60.52 1,223,763
--------------------------------------------------------------------------------------------------------------------------------
TOTAL/WEIGHTED AVERAGE 965 74.6% $80.00 $31,468,201
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Occupancy and ADR as of 8/00
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-21
<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-C3
(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 tradable as
home market instruments in both the European and U.S. domestic markets. Initial
settlement and all secondary trades will settle in same day funds. Terms used
but not defined in this Annex D have the meanings assigned to them in the
prospectus supplement and the prospectus.
Secondary market trading between investors holding global securities
through Clearstream, 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-8BEN). 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-8BEN (Certificate of Foreign Status
of Beneficial Owner for United States Withholding) or substitute form. If the
information shown on Form W-8BEN changes, a new Form W-8BEN must be filed
within 30 days of that change.
Exemption for non-U.S. Persons with effectively connected income (Form
W-8ECI). 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 W-8ECI) (Certificate of Foreign
Person's Claim for Exemption From Withholding 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 W-8BEN). 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
W-8BEN (Certificate of Foreign Status of Beneficial Owner for United States
Withholding) or substitute form. Form W-8BEN 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 W-8BEN or a Form W-8ECI 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-8BEN is effective for three calendar
years and Form W-8ECI is effective for three calendar years.
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 NOVEMBER 20, 2000
<PAGE>
IMPORTANT NOTICE ABOUT INFORMATION PRESENTED IN THIS
PROSPECTUS AND THE ACCOMPANYING PROSPECTUS SUPPLEMENT
We provide information to you about the certificates in two separate
documents that progressively provide more detail:
o this prospectus, which provides general information, some of which may
not apply to your series of certificates; and
o the accompanying prospectus supplement, which describes the specific
terms of your series of certificates, including:
o the timing of interest and principal payments;
o financial and other information about the mortgage loans;
o any credit enhancement for each class;
o the ratings for each class; and
o the method for selling the certificates.
THE PROSPECTUS AND THE PROSPECTUS SUPPLEMENT, TOGETHER, PROVIDE A
DESCRIPTION OF THE MATERIAL TERMS OF YOUR CERTIFICATES. YOU SHOULD RELY ON THE
INFORMATION IN THE PROSPECTUS SUPPLEMENT TO THE EXTENT IT PROVIDES A MORE
SPECIFIC DESCRIPTION OF YOUR CERTIFICATES.
You should rely only on the information provided in this prospectus and
the accompanying prospectus supplement, including the information incorporated
by reference. You can request information incorporated by reference from GMAC
Commercial Mortgage Securities, Inc. at (215) 328-4622 or 200 Witmer Road,
Horsham, Pennsylvania 19044-8015. See "Where You Can Find Additional
Information" and "Incorporation of Information by Reference" in this
prospectus. We have not authorized anyone to provide you with different
information. We are not offering the certificates in any state where the offer
is not permitted.
We include cross-references in this prospectus and the accompanying
prospectus supplement to captions in these materials where you can find further
related discussions. The following table of contents and the table of contents
included in the accompanying prospectus supplement provide the pages on which
these captions are located.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
PROSPECTUS SUMMARY ...................... 3
The Mortgage Asset Pools and
Other Assets of the Trusts ....... 3
The Mortgage Loan Sellers ........... 3
The Master Servicer, the Special
Servicer and the
Administration of the Trusts ..... 3
The Certificates .................... 4
Distributions to the
Certificateholders ............... 4
Interest ............................ 4
Principal ........................... 5
Credit Support and Cash Flow
Agreements ....................... 5
Ratings ............................. 5
RISK FACTORS ............................ 6
It may not be possible to find an
investor to purchase your
certificates ..................... 6
The certificates will only be paid
from trust assets ................ 6
The certificates are not
guaranteed ....................... 6
Investment in commercial and
multifamily mortgage loans is
riskier than investment in
single-family mortgage loans ..... 6
Modifications to mortgage loans
or extensions of the maturity
date agreed to by the servicer
may not ultimately increase the
present value of proceeds to
certificateholders ............... 8
Credit support is limited ........... 8
Each class of certificates will
have different yield and
prepayment considerations ........ 9
Assignments of leases and rents
may affect payments to
certificateholders ............... 11
Environmental conditions may
subject the mortgaged property
to liens or impose costs on the
property owner ................... 11
DESCRIPTION OF THE TRUST ................ 12
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Mortgage Loans ...................... 12
Default and Loss Considerations
for the Mortgage Loans .............. 13
Payment Provisions of the
Mortgage Loans ................... 14
Mortgage Loan Information in
prospectus supplements .............. 15
MBS ................................. 16
Certificate Accounts ................ 17
Cash Flow Agreements ................ 17
YIELD AND MATURITY
CONSIDERATIONS ......................... 18
Pass-Through Rate ................... 18
Purchase Price Consideration ........ 18
Payment Delays ...................... 19
Shortfalls in Collections of
Interest ......................... 19
The Effects of Prepayments on
Yield ............................ 19
Weighted Average Life and
Maturity ......................... 21
Other Factors Affecting Yield,
Weighted Average Life and
Maturity ......................... 23
THE DEPOSITOR ........................... 25
GMAC COMMERCIAL
MORTGAGE CORPORATION ................... 26
DESCRIPTION OF THE
CERTIFICATES ........................... 26
Distributions ....................... 27
Distributions of Interest on the
Certificates ....................... 27
Distributions of Principal of the
Certificates ....................... 29
Allocation of Losses and
Shortfalls ....................... 30
Advances in Respect of
Delinquencies .................... 30
Reports to Certificateholders ....... 31
Termination; Retirement of
Certificates ..................... 33
Book-Entry Registration and
Definitive Certificates .......... 33
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
THE POOLING AND
SERVICING AGREEMENTS ..................... 36
Assignment of Mortgage Loans;
Repurchases .......................... 36
Representations and Warranties;
Repurchases ............................. 38
Collection and other Servicing
Procedures ........................... 39
Sub-Servicers ......................... 42
Special Servicers ..................... 42
Certificate Account ................... 43
Realization Upon Defaulted
Mortgage Loans ..................... 46
Hazard Insurance Policies ............. 48
Due-on-Sale and
Due-on-Encumbrance Provisions ...... 49
Servicing Compensation and
Payment of Expenses ................ 49
Evidence as to Compliance ............. 50
Matters Regarding the Master
Servicer and the Depositor ......... 51
Events of Default ..................... 52
Rights Upon Event of Default .......... 53
Amendment ............................. 54
The Trustee ........................... 55
Duties of the Trustee ................. 55
Matters Regarding the Trustee ......... 56
Resignation and Removal of the
Trustee ............................ 56
DESCRIPTION OF CREDIT
SUPPORT .................................. 57
Subordinate Certificates .............. 57
Insurance or Guarantees for
Mortgage Loans ..................... 58
Letter of Credit ...................... 58
Certificate Insurance and Surety
Bonds .............................. 58
Reserve Funds ......................... 59
Credit Support for MBS ................ 59
LEGAL ASPECTS OF
MORTGAGE LOANS ........................... 59
Types of Mortgage Instruments ......... 60
Leases and Rents ...................... 60
Personalty ............................ 61
Foreclosure ........................... 61
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Bankruptcy Laws ....................... 65
Environmental Considerations .......... 67
Due-on-Sale and
Due-on-Encumbrance ................. 69
Subordinate Financing ................. 69
Default Interest and Limitations
on Prepayments ..................... 70
Applicability of Usury Laws ........... 70
Soldiers' and Sailors' Civil Relief
Act of 1940 ........................ 70
FEDERAL INCOME TAX
CONSEQUENCES ............................. 72
REMICs ................................ 73
Grantor Trusts ........................ 92
STATE AND OTHER TAX
CONSEQUENCES ............................. 102
ERISA CONSIDERATIONS ...................... 102
Plan Asset Regulations ................ 103
Prohibited Transaction
Exemption .......................... 103
Representation from Investing
Plans .............................. 107
Tax Exempt Investors .................. 107
LEGAL INVESTMENT .......................... 108
USE OF PROCEEDS ........................... 110
METHOD OF DISTRIBUTION .................... 110
LEGAL MATTERS ............................. 111
FINANCIAL INFORMATION ..................... 111
WHERE YOU CAN FIND
ADDITIONAL
INFORMATION .............................. 112
REPORTS TO
CERTIFICATEHOLDERS ....................... 112
INCORPORATION OF
INFORMATION BY
REFERENCE ................................ 112
RATING .................................... 113
GLOSSARY .................................. 114
</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
"Description of the Trust--Payment Provisions of the Mortgage Loans" in this
prospectus.
The mortgage assets for each series of certificates also may include or consist
of mortgage-backed securities. These mortgage-backed securities will represent
an interest in, or will be secured by a pledge of, one or more mortgage loans
that conform to the descriptions of the mortgage loans in this prospectus. See
"Description of the Trust--MBS" in this prospectus.
The mortgage loans will be secured by first or junior liens on multifamily
residential properties or commercial properties. The mortgage loans may be
secured by liens on real estate projects under construction. See "Description
of the Mortgage Pool" in your prospectus supplement for a description of the
mortgage asset pool applicable to your series of certificates.
THE MORTGAGE LOAN SELLERS
The depositor will purchase the mortgage loans for each series of certificates
from the mortgage asset seller or sellers specified in your prospectus
supplement. Some or all of the mortgage loans in any trust may have been
originated by GMAC Commercial Mortgage Corporation, another affiliate of the
depositor or the depositor. See "Description of the Trust--Mortgage Loans" in
this prospectus.
THE MASTER SERVICER, THE SPECIAL SERVICER
AND THE ADMINISTRATION OF THE TRUSTS
If a trust includes mortgage loans, then your prospectus supplement will name
the servicer or the master servicer for that trust. The master servicer for any
series of certificates may be GMAC Commercial Mortgage Corporation or another
affiliate of the depositor. If a trust includes mortgage loans, then your
prospectus supplement will also name any special servicer for that trust or
will describe the circumstances under which a special servicer may be appointed
or replaced.
The master servicer may also be the special servicer for that series and, in
that dual capacity, would be referred to as the servicer. A special servicer
for any series may be an affiliate of the depositor, the master servicer or an
underwriter. See "GMAC Commercial Mortgage Corporation" and "The Pooling and
Servicing Agreements-- Matters Regarding the Master Servicer and the Depositor"
in this prospectus.
If a trust includes mortgage-backed securities, then your prospectus supplement
will name the entity responsible for administering those mortgage-backed
securities. If an entity
3
<PAGE>
other than the trustee or the master servicer is the mortgage-backed securities
administrator, that entity will be referred to as the manager in this
prospectus. The manager for any series of certificates may be an affiliate of
either the depositor or the master servicer. See your prospectus supplement for
a description of the servicing and administration of the mortgage-backed
certificates and the trust related to your certificates.
THE CERTIFICATES
Each trust will issue a series of certificates. A series of certificates may
consist of a single class of certificates entitled to all of the principal and
interest up to a specified rate on the mortgage assets in the related trust.
Alternatively, a series of certificates may consist of multiple classes. If the
series of certificates has multiple classes, the prospectus supplement for that
series will set forth for each class of certificates:
o the initial principal balance if that class receives principal;
o the initial interest rate if that class receives interest;
o whether that class is subordinated;
o whether each class will receive distributions from all or a portion of
the mortgage loans; and
o any other characteristics of that class and any limitations on the
payments to be made to each class of certificates. See "Description of
the Certificates" in this prospectus.
DISTRIBUTIONS TO THE CERTIFICATEHOLDERS
Principal and interest will be paid on a distribution date which may occur
monthly or on other scheduled dates over the life of the certificates. The
distribution date or dates for each will be described in the related prospectus
supplement.
INTEREST
Each certificate of a series will be entitled to receive payments of interest
to the extent described in the accompanying prospectus supplement. If a series
of certificates consists of more than one class, each class may differ in,
among other things:
o priority in receiving interest payments;
o payment dates;
o interest rates; or
o methods for computing interest.
Each class of certificates may have a fixed or variable interest rate. Some
classes may not be entitled to receive any distributions of interest. Some
classes may not be entitled to distributions of interest until after the
occurrence of specific events, such as the retirement of one or more other
classes of certificates. The interest that is accrued on these certificates
will either be added to their certificate balance or otherwise deferred as
described in your prospectus supplement. Distributions of interest on some
classes may be reduced to the extent of delinquencies, losses or other
contingencies described in this prospectus and in your prospectus supplement.
See "Risk Factors--Each class of certificates will have different yield and
prepayment considerations," "Yield and Maturity Considerations-- Shortfalls in
Collections of Interest" and "Description of the Certificates-- Distributions
of Interest on the Certificates" in this prospectus.
4
<PAGE>
PRINCIPAL
Each certificate of a series will be entitled to receive payments of principal
as described in your prospectus supplement. If a series of certificates
consists of more than one class, each class may differ in, among other things:
o its priority of principal payments;
o periods during which certificateholders receive principal payments;
o the amount of scheduled principal it is entitled to receive on each
payment date; or
o the amount of prepayments it is entitled to receive on each payment
date.
NOT ALL CERTIFICATES WILL RECEIVE PRINCIPAL ON EACH DISTRIBUTION DATE AND SOME
CLASSES MAY NOT BE ENTITLED TO RECEIVE ANY DISTRIBUTIONS OF PRINCIPAL.
CREDIT SUPPORT AND CASH FLOW
AGREEMENTS
One or more classes of certificates in a series may be protected in part by
some form of credit support.
The accompanying prospectus supplement will provide the following information:
o whether credit support covers any classes of certificates;
o the type, amount and extent of coverage;
o the identity of any entity providing the coverage; and
o the terms of any subordination.
Any credit enhancement will be limited and certificateholders will bear any
losses allocated after the credit enhancement coverage for a particular class
is depleted. See "Risk Factors-- Credit support is limited," "Description of
Credit Support" and "Description of the Trust--Cash Flow Agreements" in this
prospectus.
RATINGS
At issuance, each class of offered certificates will be rated not lower than
investment grade by one or more nationally recognized statistical rating
agencies. See "Rating" in this prospectus and in your prospectus supplement.
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 AN The underwriters may assist in resales of
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 trustestablished 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 aggregate 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--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
PRESENT VALUE OF PROCEEDS TO and otherwise modify mortgage loans that are
CERTIFICATEHOLDERS in default or as to which a payment default is
reasonably foreseeable. See "The Pooling and
Servicing Agreements--Realization Upon
Defaulted Mortgage Loans" in this prospectus.
There is no guarantee, however, that an
extension or modification will in fact
increase the present value of receipts from,
or proceeds of, the affected mortgage loans.
See "Description of the Mortgage Pool" in the
accompanying prospectus supplement for a
description of these or other types of special
risk loans in the mortgage asset pool
applicable to your certificates.
CREDIT SUPPORT IS LIMITED The prospectus supplement for your series of
certificates may specify that credit support
will provide protection against losses on the
underlying mortgage assets up to specified
amounts and for the benefit of specified
classes of certificates. If any losses are
incurred on the mortgage loans that are not
covered by the credit enhancement for your
class of certificates, you will bear the risk
of these losses. See "Credit Support" in your
prospectus supplement for a description of any
forms of credit support that apply to your
certificates.
Although credit support is intended to reduce
the likelihood of temporary shortfalls on the
certificates, you should be aware that:
o The amount of coverage usually is
limited.
o The amount of coverage usually will be
reduced over time according to a schedule
or formula.
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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
HAVE DIFFERENT YIELD AND and the rate of principal payments on
PREPAYMENT CONSIDERATIONS the 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
RENTS MAY AFFECT PAYMENTS leases, the related mortgage loan
TO CERTIFICATEHOLDERS typically will be secured by an
assignment of leases and rents. Under
this assignment, the borrower assigns
its right under the leases to the
lender and upon default, the lender is
entitled to collect rents.
Some state laws may require the lender
to take possession of the mortgaged
property and obtain a judicial
appointment of a receiver before the
lender is entitled to collect rents.
The lender's ability to collect rents
also may be adversely affected if
bankruptcy or similar proceedings are
commenced by or against a borrower. If
a lender is prevented or delayed in
collecting rents, payments on your
certificates may be reduced or delayed
See "Legal Aspects of Mortgage
Loans--Leases and Rents" in this
prospectus.
ENVIRONMENTAL CONDITIONS MAY Real property pledged as security for a
SUBJECT THE MORTGAGED mortgage loan may be subject to
PROPERTY LIENS OR IMPOSE environmental risks. Under TO some
COSTS ON THE PROPERTY state laws, contamination of real
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 114 in this prospectus.
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DESCRIPTION OF THE TRUST
Each series of certificates will represent in the aggregate the entire
beneficial ownership interest in a trust to be formed by the depositor. The
primary assets of each trust will be mortgage loans or a combination of
mortgage loans and mortgage-backed securities or MBS. Each mortgage asset will
be selected by the depositor for inclusion in a trust from among those
purchased, either directly or indirectly, from a mortgage asset seller. The
mortgage asset seller may or may not be the originator of that mortgage loan or
the issuer of that MBS. The discussion below under the heading "--Mortgage
Loans," unless otherwise noted, applies equally to mortgage loans underlying
any MBS included in a particular trust.
MORTGAGE LOANS
The mortgage loans will be evidenced by promissory notes secured by
mortgages, deeds of trust or similar security instruments that create first or
junior liens on fee or leasehold estates in properties consisting of:
o multifamily properties that are residential properties consisting of five
or more rental or cooperatively-owned dwelling units in high-rise,
mid-rise or garden apartment buildings or other residential structures, or
o commercial properties that are office buildings, retail stores and
establishments, hotels or motels, nursing homes, hospitals or other health
care-related facilities, mobile home parks, warehouse facilities,
mini-warehouse facilities, self-storage facilities, industrial plants,
parking lots, mixed use or other types of income-producing properties or
unimproved land.
The multifamily properties may include mixed commercial and residential
structures and apartment buildings owned by private cooperative housing
corporations. Each mortgage will create a lien on a borrower's fee estate in a
mortgaged property. If a mortgage creates a lien on a borrower's leasehold
estate in a property, then the term of any leasehold will exceed the term of
the mortgage note by the period specified in the related prospectus supplement.
The originator of any mortgage loan may be the depositor, GMAC Commercial
Mortgage Corporation, another affiliate of the depositor, an affiliate of the
underwriter or an unrelated party.
Mortgage assets for a series of certificates may include mortgage loans
secured by junior liens. The loans secured by the related senior liens may not
be included in the mortgage pool. The primary risk to holders of mortgage loans
secured by junior liens is the possibility that adequate funds will not be
received in connection with a foreclosure of the related senior liens to
satisfy fully both the senior liens and the mortgage loan.
Mortgage assets for a series of certificates may include mortgage loans
made on the security of real estate projects under construction. In that case,
the related prospectus supplement will describe the procedures and timing for
making disbursements from construction reserve funds as portions of the related
real estate project are completed. In addition, the mortgage assets for a
particular series of certificates may include mortgage loans that are
delinquent or non-performing as of the date the certificates are issued. The
related prospectus supplement will include as to each delinquent or
non-performing mortgage loan,
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o available information as to the period of the delinquency or
non-performance;
o any forbearance arrangement then in effect;
o the condition of the related mortgaged property; and
o the ability of the mortgaged property to generate income to service the
mortgage debt.
DEFAULT AND LOSS CONSIDERATIONS FOR THE MORTGAGE LOANS
Lenders typically look to the Debt Service Coverage Ratio of a loan
secured by income-producing property as an important factor in evaluating the
likelihood of default on the loan.
Annual debt service means for any mortgage loan, 12 times the monthly
payment in effect as of the cut-off date or, for any mortgage loans that pay
interest only for a period of time, 12 times the monthly payment in effect at
the end of the interest only period.
The Underwritten Cash Flow of a mortgaged property will fluctuate over
time and may or may not be sufficient to cover debt service on the mortgage
loan at any given time. As the primary source of the operating revenues of a
non-owner occupied, income-producing property, rental income, and for a
mortgage loan secured by a cooperative apartment building, maintenance payments
from tenant-stockholders of a cooperative, may be affected by the condition of
the applicable real estate market or area economy or both. In addition,
properties typically leased, occupied or used on a short-term basis, such as
some health care-related facilities, hotels and motels, and mini-warehouse and
self-storage facilities, tend to be affected more rapidly by changes in market
or business conditions than do properties typically leased for longer periods,
such as warehouses, retail stores, office buildings and industrial plants.
Commercial properties may be owner-occupied or leased to a small number of
tenants. As a result, the Underwritten Cash Flow of a commercial property may
depend substantially on the financial condition of the borrower or a tenant,
and mortgage loans secured by liens on those properties may pose a greater
likelihood of default and loss than loans secured by liens on multifamily
properties or on multi-tenant commercial properties.
Increases in operating expenses due to the general economic climate or
economic conditions in a locality or industry segment, such as increases in
interest rates, real estate tax rates, energy costs, labor costs and other
operating expenses, and to changes in governmental rules, regulations and
fiscal policies, may also affect the likelihood of default on a mortgage loan.
In some cases leases of mortgaged properties may provide that the lessee,
rather than the borrower/landlord, is responsible for payment of operating
expenses. However, the existence of net of expense provisions will result in
stable Underwritten Cash Flow to the borrower/landlord only to the extent that
the lessee is able to absorb operating expense increases while continuing to
make rent payments.
Lenders also look to the Loan-to-value Ratio of a mortgage loan as a
factor in evaluating the likelihood of loss if a property must be liquidated
following a default.
Unless more specifically described in the related prospectus supplement,
the value of a mortgaged property will be its fair market value determined in
an appraisal
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obtained by the originator at the origination of the loan. The lower the
Loan-to-value Ratio, the greater the borrower's equity in a mortgaged property,
and the greater the incentive of the borrower to perform under the terms of the
related mortgage loan to protect its equity and the greater the cushion
provided to the lender against loss on liquidation following a default.
Loan-to-value Ratios will not necessarily constitute an accurate measure
of the likelihood of liquidation loss in a pool of mortgage loans. For example,
the value of a mortgaged property as of the date of initial issuance of the
related series of certificates may be less than the value determined at loan
origination, and will likely continue to fluctuate from time to time based upon
factors including changes in economic conditions and the real estate market.
Moreover, even when current, an appraisal is not necessarily a reliable
estimate of value.
Appraised values of income-producing properties are typically based on:
o the market comparison method based on recent resale values of comparable
properties at the date of the appraisal;
o the cost replacement method based on the cost of replacing the property at
that date;
o the income capitalization method based on a projection of value of the
property's projected net cash flow; or
o a selection from or interpolation of the values derived from these
methods.
Each of these appraisal methods can present analytical difficulties. It is
often difficult to find truly comparable properties that have recently been
sold; the replacement cost of a property may have little to do with its current
market value; and income capitalization is inherently based on inexact
projections of income and expense and the selection of an appropriate
capitalization rate and discount rate. Where more than one of these appraisal
methods are used and provide significantly different results, an accurate
determination of value and, correspondingly, a reliable analysis of the
likelihood of default and loss, is even more difficult.
Although there may be multiple methods for determining the value of a
mortgaged property, value will in all cases be affected by property
performance. As a result, if a mortgage loan defaults because the income
generated by the related mortgaged property is insufficient to cover operating
costs and expenses and pay debt service, then the value of the mortgaged
property will also be affected and a liquidation loss may occur.
While the depositor believes that the considerations described above are
important factors in assessing credit risk on loans secured by liens on
income-producing real estate, there can be no assurance that all of these
factors will in fact have been prudently considered by the originators of the
mortgage loans, or that, for a particular mortgage loan, they are complete or
relevant. See "Risk Factors--Investment in commercial and multifamily mortgage
loans is riskier than investment in single-family mortgage loans."
PAYMENT PROVISIONS OF THE MORTGAGE LOANS
To the extent specified in the related prospectus supplement, all of the
mortgage loans will have had original terms to maturity of not more than 40
years and provide for
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scheduled payments of principal, interest or both, to be made on specified due
dates that occur monthly, quarterly, semi-annually or annually.
A mortgage loan:
o may provide for no accrual of interest or for accrual of interest at a
mortgage rate that is fixed over its term, that adjusts from time to time
or that may be converted at the borrower's election from an adjustable to
a fixed mortgage rate or from a fixed to an adjustable mortgage rate,
o may provide for level payments to maturity or for payments that adjust
from time to time to accommodate changes in the mortgage rate or to
reflect the occurrence of specific events, and may permit negative
amortization,
o may be fully amortizing or may be partially amortizing or non-amortizing,
with a balloon payment due on its stated maturity date, and
o may prohibit prepayments over its term or for a specified lock-out period
which ends on a lock-out date or may require payment of a prepayment
premium consisting of a premium or a yield maintenance penalty in
connection with prepayments, or both, in each case as described in the
related prospectus supplement.
A mortgage loan may also contain an equity participation provision that
entitles the lender to a share of appreciation in value of the related
mortgaged property, or profits realized from the operation or disposition of
the mortgaged property or the benefit, if any, resulting from the refinancing
of the mortgage loan.
MORTGAGE LOAN INFORMATION IN PROSPECTUS SUPPLEMENTS
Each prospectus supplement will contain information about the mortgage
loans in the related trust, which may include the following:
o the aggregate outstanding principal balance and the largest, smallest and
average outstanding principal balance of the mortgage loans,
o the type or types of property that provide security for repayment of the
mortgage loans,
o the earliest and latest origination date and maturity date of the mortgage
loans,
o the original and remaining terms to maturity of the mortgage loans, or
ranges of assigned and remaining terms to maturity, and the weighted
average original and remaining terms to maturity of the mortgage loans,
o the Loan-to-value Ratios of the mortgage loans either at origination or as
of a more recent date, or the range of Loan-to-value Ratios, and the
weighted average of the Loan-to-value Ratios,
o the mortgage rates borne by the mortgage loans, or range of mortgage
rates, and the weighted average mortgage rate borne by the mortgage loans,
o for mortgage loans with adjustable mortgage rates or ARM loans, the index
or indices upon which the adjustments are based, the adjustment dates, the
range of gross margins and the weighted average gross margin, and any
limits on mortgage rate adjustments at the time of any adjustment and over
the life of the mortgage loan,
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o information regarding the payment characteristics of the mortgage loans,
such as balloon payment and other amortization provisions, lock-out
periods and prepayment premiums,
o the Debt Service Coverage Ratios of the mortgage loans either at
origination or as of a more recent date, or the range of Debt Service
Coverage Ratios, and the weighted average of the Debt Service Coverage
Ratios,
o the geographic distribution of the mortgaged properties on a
state-by-state basis, and
o information describing material provisions of leases and the nature of
tenants of the mortgaged properties.
If the depositor is unable to provide the specific information described above
at the time offered certificates of a series are initially offered, more
general information of the nature described above will be provided in the
related prospectus supplement. Specific information will be provided in a
report which will be available to purchasers of those certificates at or before
their initial issuance and prior to sales of the offered certificates and will
be filed as part of a Current Report on Form 8-K with the SEC within fifteen
days following the issuance.
MBS
MBS may include:
o private-label mortgage participations, mortgage pass-through certificates
or other mortgage-backed securities that are not guaranteed or insured by
the United States or any agency or instrumentality of the United States;
or
o certificates insured or guaranteed by the Federal Home Loan Mortgage
Corporation or FHLMC, the Federal National Mortgage Association or the
Governmental National Mortgage Association or the Federal Agricultural
Mortgage Corporation. To the extent described in the related prospectus
supplement, each MBS will evidence an interest in, or will be secured by a
pledge of, mortgage loans that conform to the descriptions of the mortgage
loans contained in this prospectus.
Any MBS will have been issued under an MBS agreement consisting of a
participation and servicing agreement, a pooling and servicing agreement, an
indenture or similar agreement. Either or both of the issuer of the MBS and the
servicer of the underlying mortgage loans will have entered into the MBS
agreement, with a trustee, or, in the alternative, with the original purchaser
or purchasers of the MBS.
The MBS may have been issued in one or more classes with characteristics
similar to the classes of certificates described in this prospectus.
Distributions on the MBS will be made by the MBS issuer, the MBS servicer or
the MBS trustee on the dates specified in the related prospectus supplement.
The MBS issuer or the MBS servicer or another person specified in the related
prospectus supplement may have the right or obligation to repurchase or
substitute assets underlying the MBS after a specified date or under other
circumstances specified in the related prospectus supplement.
Reserve funds, subordination or other credit support similar to that
described for the certificates under "Description of Credit Support" may have
been provided for the
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MBS. The type, characteristics and amount of credit support, if any, will be a
function of the characteristics of the underlying mortgage loans and other
factors and usually will have been established on the basis of the requirements
of any nationally recognized statistical rating agency that may have assigned a
rating to the MBS, or by the initial purchasers of the MBS.
The prospectus supplement for a series of certificates that evidence
interests in MBS will specify, to the extent available,
o the aggregate approximate initial and outstanding principal amount and
type of the MBS to be included in the trust,
o the original and remaining term to stated maturity of the MBS, if
applicable,
o the pass-through or bond rate of the MBS or the formula for determining
those rates,
o the payment characteristics of the MBS,
o the MBS issuer, MBS servicer and MBS trustee, as applicable,
o a description of the credit support, if any,
o the circumstances under which the related underlying mortgage loans, or
the MBS themselves, may be purchased before their maturity,
o the terms on which mortgage loans may be substituted for those originally
underlying the MBS,
o the type of mortgage loans underlying the MBS and, to the extent available
to the depositor and appropriate under the circumstances, other
information about the underlying mortgage loans described under
"--Mortgage Loan Information in prospectus supplements," and
o the characteristics of any cash flow agreements that relate to the MBS.
CERTIFICATE ACCOUNTS
Each trust will include one or more certificate accounts established and
maintained on behalf of the certificateholders. All payments and collections
received or advanced or the mortgage assets and other assets in the trust will
be deposited into the certificate account(s) to the extent described in this
prospectus and in the related prospectus supplement. See "The Pooling and
Servicing Agreements--Certificate Account."
CASH FLOW AGREEMENTS
If so provided in the prospectus supplement for a series of certificates,
the related trust will include guaranteed investment contracts under which
moneys held in the funds and accounts established for the series will be
invested at a specified rate. The trust may also include other agreements, such
as interest rate exchange agreements, interest rate cap or floor agreements, or
other agreements designed to reduce the effects of interest rate fluctuations
on the mortgage assets on one or more classes of certificates. The principal
terms of any cash flow agreement, including provisions relating to the timing,
manner and amount of payments thereunder and provisions relating to the
termination
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thereof, will be described in the related prospectus supplement. The related
prospectus supplement will also identify the obligor under the cash flow
agreement.
YIELD AND MATURITY CONSIDERATIONS
The yield on any certificate offered hereby will depend on the price paid
by the holder, the pass-through rate of interest at which the certificate
accrues interest and the amount and timing of distributions on the certificate.
See "Risk Factors--Each class of certificates will have different yield and
prepayment considerations." The following discussion contemplates a trust that
consists solely of mortgage loans. While the characteristics and behavior of
mortgage loans underlying an MBS can be expected to have the same effect on the
yield to maturity and weighted average life of a class of certificates as will
the characteristics and behavior of comparable mortgage loans, the effect may
differ due to the payment characteristics of the MBS. If a trust includes MBS,
the related prospectus supplement will discuss the effect, if any, that the
payment characteristics of the MBS may have on the yield to maturity and
weighted average lives of the offered certificates of the related series.
PASS-THROUGH RATE
The certificates of any class within a series may have a fixed, variable
or adjustable pass-through rate, which may or may not be based upon the
interest rates borne by the mortgage loans in the related trust. The prospectus
supplement for any series of certificates will specify the pass-through rate
for each class of offered certificates of the series or, in the case of a class
of offered certificates with a variable or adjustable pass-through rate, the
method of determining the pass-through rate, as well as the effect, if any, of
the prepayment of any mortgage loan on the pass-through rate of one or more
classes of offered certificates.
The prospectus supplement will also indicate whether the distributions of
interest on the offered certificates of any class will be dependent, in whole
or in part, on the performance of any obligor under any cash flow agreement
consisting of:
o guaranteed investment contracts under which moneys held in the funds and
accounts established for the related series will be invested at a
specified rate; or
o other agreements, such as interest rate exchange agreements, interest rate
cap or floor agreements, or other agreements designed to reduce the
effects of interest rate fluctuation on the mortgage assets or on one or
more classes of certificates.
PURCHASE PRICE CONSIDERATION
The extent to which the yield to maturity of a class of offered
certificates of any series may vary from the anticipated yield will depend upon
the degree to which they are purchased at a discount or premium and when, and
to what degree, payments of principal on the mortgage loans in the related
trust are in turn distributed on those certificates or, in the case of a class
of stripped interest certificates, result in the reduction of the notional
amount thereof. You should consider, in the case of any offered certificate
purchased at a discount, the risk that a slower than anticipated rate of
principal payments on the mortgage loans in the related trust could result in
an actual yield to you that is lower than the anticipated yield. You should
also consider, in the case
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of any offered certificate purchased at a premium, the risk that a faster than
anticipated rate of principal payments on those mortgage loans could result in
an actual yield to you that is lower than the anticipated yield. In addition,
if you purchase an offered certificate at a discount or premium, and principal
payments are made in reduction of the principal balance or notional amount of
your offered certificates at a rate slower or faster than the rate you
anticipated during any particular period, the consequent adverse effects on
your yield would not be fully offset by a subsequent like increase or decrease
in the rate of principal payments.
PAYMENT DELAYS
For each series of certificates, a period of time will elapse between the
date upon which payments on the mortgage loans in the related trust are due and
the distribution date on which the payments are passed through to
certificateholders. That delay will effectively reduce the yield that would
otherwise be produced if payments on the mortgage loans were distributed to
certificateholders on the date they were due.
SHORTFALLS IN COLLECTIONS OF INTEREST
When a principal prepayment in full or in part is made on a mortgage loan,
the borrower is typically charged interest on the amount of the prepayment only
through the date of the prepayment, instead of through the due date for the
next succeeding scheduled payment. However, interest accrued and distributable
on any series of certificates on any distribution date will typically
correspond to interest accrued on the mortgage loans to their respective due
dates during the related due period. As more specifically described in the
prospectus supplement for a series of certificates, a due period will be a
specified time period running from a specified day of one month to the
immediately preceding day of the next month, inclusive. All scheduled payments
on the mortgage loans in the related trust that are due during a given due
period will, to the extent received by a specified date called the
determination date or otherwise advanced by the related master servicer or
other specified person, be distributed to the holders of the certificates of
the series on the next distribution date. Consequently, if a prepayment on any
mortgage loan is distributable to certificateholders on a particular
distribution date, but the prepayment is not accompanied by interest thereon to
the due date for that mortgage loan in the related due period, then the
interest charged to the borrower net of servicing and administrative fees may
be less than the corresponding amount of interest accrued and otherwise payable
on the certificates of the related series. To the extent that any prepayment
interest shortfall is allocated to a class of offered certificates, the yield
on that class will be adversely affected. The prospectus supplement for each
series of certificates will describe the manner in which any shortfalls will be
allocated among the classes of certificates of that series. The related
prospectus supplement will also describe any amounts available to offset
shortfalls.
THE EFFECTS OF PREPAYMENTS ON YIELD
A certificate's yield to maturity will be affected by the rate of
principal payments on the mortgage loans in the related trust and the
allocation of those payments to reduce the principal balance or notional
amount, if applicable, of the certificate. The rate of
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principal payments on the mortgage loans in any trust will be affected by the
amortization schedules thereof. In the case of ARM loans, amortization
schedules may change periodically to accommodate adjustments to the mortgage
rates of those loans, the dates on which any balloon payments are due, and the
rate of principal prepayments. Because the rate of principal prepayments on the
mortgage loans in any trust will depend on future events and a variety of
factors, no assurance can be given as to that rate.
Principal prepayments include:
o voluntary prepayments by borrowers;
o prepayments resulting from liquidations of mortgage loans due to
defaults, casualties or condemnations affecting the mortgaged
properties; and
o purchases of mortgage loans out of the related trust.
A lower than anticipated rate of principal prepayments on the mortgage
loans in the related trust will negatively affect the yield to investors in any
class of certificates that are stripped principal certificates. A higher than
anticipated rate of principal prepayments on those mortgage loans will
negatively affect the yield to investors in any class of certificates that are
stripped interest certificates. In general, the notional amount of a class of
stripped interest certificates will either be based on the principal balances
of some or all of the mortgage assets in the related trust or equal to the
initial stated principal amounts or certificate balance of one or more of the
other classes of certificates of the same series. If the offered certificates
of a series include any stripped interest certificates, the related prospectus
supplement will include a table showing the effect of various constant assumed
levels of prepayment on yields on those certificates. The purpose of the tables
are to illustrate the sensitivity of yields to various constant assumed
prepayment rates and are not intended to predict, or to provide information
that will enable you to predict, yields or prepayment rates.
The depositor is not aware of any publicly available or authoritative
statistics that relate to the historical prepayment experience of a group of
multifamily or commercial mortgage loans. However, the extent of prepayments of
principal of the mortgage loans in any trust may be affected by a number of
factors, including:
o the availability of mortgage credit,
o the relative economic vitality of the area in which the mortgaged
properties are located,
o the quality of management of the mortgaged properties,
o the servicing of the mortgage loans,
o possible changes in tax laws, and
o other opportunities for investment.
In addition, the rate of principal payments on the mortgage loans in any
trust may be affected by
o the existence of lock-out periods;
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o requirements that principal prepayments be accompanied by prepayment
premiums; and
o the extent to which those prepayment premium provisions may be
practicably enforced.
To the extent enforceable, prepayment premium provisions could constitute
either an absolute prohibition in the case of a lock-out period or a
disincentive in the case of a prepayment premium to a borrower's voluntarily
prepaying its mortgage loan.
The rate of prepayment on a pool of mortgage loans is likely to be
affected by prevailing market interest rates for mortgage loans of a comparable
type, term and risk level. When the prevailing market interest rate is below
the interest rate specified in the mortgage loan, a borrower may have an
increased incentive to refinance its mortgage loan. Even in the case of ARM
loans, as prevailing market interest rates decline, and without regard to
whether the mortgage rates on those ARM loans decline in a manner consistent
therewith, the related borrowers may have an increased incentive to refinance
for purposes of either converting to a fixed rate loan and thereby locking in
the rate or taking advantage of a different index, margin or rate cap or floor
on another adjustable rate mortgage loan.
Depending on prevailing market interest rates, the outlook for market
interest rates and economic conditions, some borrowers may sell mortgaged
properties to realize their equity therein, to meet cash flow needs or to make
other investments. In addition, some borrowers may be motivated by federal and
state tax laws, which are subject to change, to sell mortgaged properties
before the exhaustion of tax depreciation benefits. The depositor makes no
representation as to the particular factors that will affect the prepayment of
the mortgage loans in any trust, as to the relative importance of those
factors, as to the percentage of the principal balance of those mortgage loans
that will be paid as of any date or as to the overall rate of prepayment on
those mortgage loans.
WEIGHTED AVERAGE LIFE AND MATURITY
The rate at which principal payments are received on the mortgage loans in
any trust will affect the ultimate maturity and the weighted average life of
one or more classes of the certificates of the series. Unless more specifically
described in the related prospectus supplement, weighted average life refers to
the average amount of time that will elapse from the date of issuance of an
instrument until each dollar allocable as principal of that instrument is
repaid to the investor.
The weighted average life and maturity of a class of certificates of any
series will be influenced by the rate at which principal on the related
mortgage loans, whether in the form of scheduled amortization or prepayments is
paid to that class. For this purpose, the term prepayment includes voluntary
prepayments, liquidations due to default and purchases of mortgage loans out of
the related trust. Prepayment rates on loans are commonly measured relative to
a prepayment standard or model, such as the Constant Prepayment Rate or CPR
prepayment model or the Standard Prepayment Assumption or SPA prepayment model.
CPR represents an assumed constant rate of prepayment each month expressed as
an annual percentage relative to the then outstanding principal balance of a
pool of loans for the life of those loans. SPA represents an assumed variable
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rate of prepayment each month expressed as an annual percentage of the then
outstanding principal balance of a pool of loans, with different prepayment
assumptions often expressed as percentages of SPA. For example, a prepayment
assumption of 100% of SPA assumes prepayment rates of 0.2% per annum of the
then outstanding principal balance of those loans in the first month of the
life of the loans and an additional 0.2% per annum in each month thereafter
until the thirtieth month. Beginning in the thirtieth month, and in each month
thereafter during the life of the loans, 100% of SPA assumes a constant
prepayment rate of 6% per annum each month.
Neither CPR nor SPA nor any other prepayment model or assumption purports
to be a historical description of prepayment experience or a prediction of the
anticipated rate of prepayment of any particular pool of loans. Moreover, the
CPR and SPA models were developed based upon historical prepayment experience
for single-family loans. As a result, it is unlikely that the prepayment
experience of the mortgage loans included in any trust will conform to any
particular level of CPR or SPA.
The prospectus supplement for each series of certificates will contain
tables, if applicable, specifying the projected weighted average life of each
class of offered certificates of that series and the percentage of the initial
certificate balance of each class that would be outstanding on specified
distribution dates based on the assumptions stated in the prospectus
supplement. The assumptions will include assumptions that prepayments on the
related mortgage loans are made at rates corresponding to various percentages
of CPR or SPA, or at other rates specified in that prospectus supplement. The
tables and assumptions will illustrate the sensitivity of the weighted average
lives of the certificates to various assumed prepayment rates and will not be
intended to predict, or to provide information that will enable investors to
predict, the actual weighted average lives of the certificates.
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OTHER FACTORS AFFECTING YIELD, WEIGHTED AVERAGE LIFE AND MATURITY
Balloon Payments; Extensions of Maturity.
Some or all of the mortgage loans included in a trust may require that
balloon payments be made at maturity. Because the ability of a borrower to make
a balloon payment typically will depend upon its ability either to refinance
the loan or to sell the related mortgaged property, mortgage loans that require
balloon payments may default at maturity, or the maturity of a mortgage loan
may be extended in connection with a workout. In the case of defaults, recovery
of proceeds may be delayed by, among other things, bankruptcy of the borrower
or adverse conditions in the market where the property is located. To minimize
losses on defaulted mortgage loans, the master servicer or a special servicer,
to the extent and under the circumstances set forth in this prospectus and in
the related prospectus supplement, may be authorized to modify mortgage loans
that are in default or as to which a payment default is imminent. Any defaulted
balloon payment or modification that extends the maturity of a mortgage loan
may delay distributions of principal on a class of offered certificates and
thereby extend the weighted average life of those certificates and, if those
certificates were purchased at a discount, reduce the yield thereon.
Negative Amortization.
The weighted average life of a class of certificates can be affected by
mortgage loans that permit negative amortization to occur. A mortgage loan that
provides for the payment of interest calculated at a rate lower than the rate
at which interest accrues on the loan would, in the case of an ARM loan, be
expected during a period of increasing interest rates to amortize at a slower
rate and perhaps not at all than if interest rates were declining or were
remaining constant. A slower rate of mortgage loan amortization would
correspondingly be reflected in a slower rate of amortization for one or more
classes of certificates of the related series. In addition, negative
amortization on one or more mortgage loans in any trust may result in negative
amortization on the certificates of the related series. The related prospectus
supplement will describe, if applicable, the manner in which negative
amortization in respect of the mortgage loans in any trust is allocated among
the respective classes of certificates of the related series. The portion of
any mortgage loan negative amortization allocated to a class of certificates
may result in a deferral of some or all of the interest payable thereon, which
deferred interest may be added to the certificate balance thereof. Accordingly,
the weighted average lives of mortgage loans that permit negative amortization
and that of the classes of certificates to which any negative amortization
would be allocated or that would bear the effects of a slower rate of
amortization on the mortgage loans may increase as a result of that feature.
Negative amortization also may occur in respect of an ARM loan that:
o limits the amount by which its scheduled payment may adjust in response to
a change in its mortgage rate,
o provides that its scheduled payment will adjust less frequently than its
mortgage rate, or
o provides for constant scheduled payments even if its mortgage rate has
been adjusted.
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Conversely, during a period of declining interest rates, the scheduled
payment on a mortgage loan may exceed the amount necessary to amortize the loan
fully over its remaining amortization schedule and pay interest at the then
applicable mortgage rate, thereby resulting in the accelerated amortization of
the mortgage loan. Any acceleration in amortization of its principal balance
will shorten the weighted average life of a mortgage loan and, correspondingly,
the weighted average lives of those classes of certificates entitled to a
portion of the principal payments on that mortgage loan.
The extent to which the yield on any offered certificate will be affected
by the inclusion in the related trust of mortgage loans that permit negative
amortization, will depend upon whether that offered certificate was purchased
at a premium or a discount and the extent to which the payment characteristics
of those mortgage loans delay or accelerate the distributions of principal on
that certificate or, in the case of a stripped interest certificate, delay or
accelerate the reduction of the notional amount thereof. See "--The Effects of
Prepayments on Yield" above.
Foreclosures and Payment Plans.
The number of foreclosures and the principal amount of the mortgage loans
that are foreclosed in relation to the number and principal amount of mortgage
loans that are repaid in accordance with their terms will affect the weighted
average lives of those mortgage loans and, accordingly, the weighted average
lives of and yields on the certificates of the related series. Servicing
decisions made for the mortgage loans, including the use of payment plans
before a demand for acceleration and the restructuring of mortgage loans in
bankruptcy proceedings or otherwise, may also have an effect upon the payment
patterns of particular mortgage loans and on the weighted average lives of and
yields on the certificates of the related series.
Losses and Shortfalls on the Mortgage Assets.
The yield to holders of the offered certificates of any series will
directly depend on the extent to which those holders are required to bear the
effects of any losses or shortfalls in collections arising out of defaults on
the mortgage loans in the related trust and the timing of those losses and
shortfalls. The earlier that any loss or shortfall occurs, usually the greater
will be the negative effect on yield for any class of certificates that is
required to bear its effects.
The amount of any losses or shortfalls in collections on the mortgage
assets in any trust, to the extent not covered or offset by draws on any
reserve fund or under any instrument of credit support, will be allocated among
the respective classes of certificates of the related series in the priority
and manner, and subject to the limitations, specified in the related prospectus
supplement. As described in the related prospectus supplement, allocations may
be effected by a reduction in the entitlements to interest and certificate
balances of one or more of those classes of certificates, or by establishing a
priority of payments among those classes of certificates or both.
The yield to maturity on a class of subordinate certificates may be
extremely sensitive to losses and shortfalls in collections on the mortgage
loans in the related trust.
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Additional Certificate Amortization.
In addition to entitling the holders thereof to a specified portion, which
may, during specified periods, range from none to all, of the principal
payments received on the mortgage assets in the related trust, one or more
classes of certificates of any series, including one or more classes of offered
certificates of that series, may provide for distributions of principal from:
o amounts attributable to interest accrued but not currently distributable
on one or more classes of accrual certificates on which distributions of
interest may not commence until the occurrence of specific events, such as
the retirement of one or more other classes of certificates,
o Excess Funds or
o any other amounts described in the related prospectus supplement.
The amortization of any class of certificates out of the sources described
in the preceding paragraph would shorten the weighted average life of those
certificates and, if those certificates were purchased at a premium, reduce the
yield on those certificates. The related prospectus supplement will discuss the
relevant factors to be considered in determining whether distributions of
principal of any class of certificates out of those sources is likely to have
any material effect on the rate at which the certificates are amortized and the
yield to be realized on the certificates.
Optional Early Termination.
If provided in the related prospectus supplement, the master servicer, the
depositor or the holder of the residual interest in a REMIC may at its option
either effect early retirement of a series of certificates through the purchase
of the assets in the related trust or purchase, in whole but not in part, the
certificates specified in the related prospectus supplement. The optional
termination would occur under the circumstances and in the manner described
under "Description of the Certificates--Termination; Retirement of
Certificates" in this prospectus and in the related prospectus supplement. Any
early retirement of a class of offered certificates would shorten their
weighted average life and, if those certificates were purchased at premium,
reduce the yield realized on those certificates.
THE DEPOSITOR
GMAC Commercial Mortgage Securities, Inc. is a wholly-owned subsidiary of
GMAC Commercial Mortgage Corporation which is an indirect wholly-owned
subsidiary of GMAC Mortgage Group, Inc., a Michigan corporation. The depositor
was incorporated in the State of Delaware on June 22, 1995. The depositor was
organized for the purpose of serving as a private secondary mortgage market
conduit. The depositor maintains its principal office at 200 Witmer Road,
Horsham, Pennsylvania 19044. Its telephone number is (215) 328-3164. The
depositor does not have, nor is it expected in the future to have, any
significant assets.
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GMAC COMMERCIAL MORTGAGE CORPORATION
Unless we tell you otherwise in the related prospectus supplement, GMAC
Commercial Mortgage Corporation, an affiliate of GMAC Commercial Mortgage
Corporation and a corporation duly organized and existing under the laws of the
State of California, will act as the master servicer or manager for each series
of certificates.
GMAC Commercial Mortgage Corporation originates mortgage loans through its
own originating network and buys mortgage loans primarily through its branch
network and also from mortgage loan originators or sellers nationwide. GMAC
Commercial Mortgage Corporation services mortgage loans for its own account and
for others. GMAC Commercial Mortgage Corporation's principal executive offices
are located at 200 Witmer Road, Horsham, Pennsylvania 19044. Its telephone
number is (215) 328-4622. GMAC Commercial Mortgage Corporation conducts
operations from its headquarters in Pennsylvania and from offices located in
California, Colorado, the District of Columbia, Illinois, Michigan, Minnesota,
Missouri, Nebraska, New York, Ohio, Texas, Virginia, Washington and Wisconsin.
DESCRIPTION OF THE CERTIFICATES
Each series of certificates will represent the entire beneficial ownership
interest in the trust created under the related pooling and servicing agreement
or other agreement specified in the related prospectus supplement. Either
agreement is referred to as a pooling and servicing agreement. The certificates
of each series may consist of one or more classes of certificates that:
o provide for the accrual of interest on the certificate balance or notional
amount at a fixed, variable or adjustable rate;
o constitute senior certificates or subordinate certificates;
o constitute stripped interest certificates or stripped principal
certificates;
o provide for distributions of interest or principal that begins only after
the occurrence of specified events, such as the retirement of one or more
other classes of certificates of the series;
o provide for distributions of principal to be made, from time to time or
for designated periods, at a rate that is faster or slower than the rate
at which payments or other collections of principal are received on the
mortgage assets in the related trust;
o provide for distributions of principal to be made, subject to available
funds, based on a specified principal payment schedule or other
methodology; or
o provide for distributions based on collections on the mortgage assets in
the related trust attributable to prepayment premiums and equity
participations.
A class of certificates may have two or more component parts that each
have different characteristics. For example, a class of certificates may have a
certificate balance on which it accrues interest at a fixed, variable or
adjustable rate. The same class of certificates may also have features of a
stripped interest certificate that entitles its holders to distributions of
interest accrued on a notional amount at a different fixed, variable or
adjustable rate. In addition, a class of certificates may accrue interest on
one
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portion of its certificate balance at one fixed, variable or adjustable rate
and on another portion of its certificate balance at a different fixed,
variable or adjustable rate.
Each class of offered certificates of a series will be issued in minimum
denominations corresponding to the principal balances or, in case of classes of
stripped interest certificates or REMIC residual certificates, notional amounts
or percentage interests, specified in the related prospectus supplement. One or
more classes of offered certificates of any series may be issued as definitive
certificates in fully registered, definitive form or may be offered as
book-entry certificates in book-entry format through the facilities of The
Depository Trust Company or DTC. If issued as definitive certificates, the
offered certificates of each series may be transferred or exchanged at the
location specified in the related prospectus supplement, without the payment of
any service charges, other than any tax or other governmental charge payable in
connection therewith. Any transfer or exchange of the certificates must comply
with any restrictions on transfer described in the related prospectus
supplement. Interests in a class of book-entry certificates will be transferred
on the book-entry records of DTC and its participating organizations.
DISTRIBUTIONS
The trustee will make distributions on the certificates of each series on
each distribution date from the Available Distribution Amount for that series
on that distribution date. The distribution date for a series of certificates
will be a specified day of each month, or, if that day is not a business day,
the next business day, beginning in the month specified in the related
prospectus supplement.
To the extent specified in the related prospectus supplement,
distributions on the certificates of each series, other than the final
distribution in retirement of any certificate, will be made to the persons in
whose names the certificates are registered at the close of business on the
record date or last business day of the month preceding the month in which the
applicable distribution date occurs. All distributions on each class of
certificates on each distribution date will be allocated pro rata among the
outstanding certificates in the class in proportion to the respective
percentage interests evidenced thereby to the extent specified in the related
prospectus supplement. Payments may be made by wire transfer in immediately
available funds to the account of a certificateholder at a bank or other entity
having appropriate facilities, if the certificateholder has provided the person
required to make the payments with wiring instructions no later than the
related record date or another date specified in the related prospectus
supplement and the certificateholder holds certificates in any requisite amount
or denomination specified in the related prospectus supplement. Otherwise,
payments will be made by check mailed to the address of the certificateholder
as it appears on the certificate register. However, the final distribution in
retirement of any class of certificates, whether definitive certificates or
book-entry certificates, will be made only upon presentation and surrender of
the certificates at the location specified in the notice to certificateholders
of the final distribution.
DISTRIBUTIONS OF INTEREST ON THE CERTIFICATES
Each class of certificates of each series, other than stripped principal
certificates that are entitled to distributions of principal, with
disproportionate, nominal or no
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distributions of interest and other than some classes of REMIC residual
certificates that have no pass-through rate, may have a different pass-through
rate, which in each case may be fixed, variable or adjustable. The related
prospectus supplement will specify the pass-through rate or, in the case of a
variable or adjustable pass-through rate, the method for determining the
pass-through rate, for each class. Interest on the certificates of each series
will be calculated on the basis described in the related prospectus supplement.
A class of accrual certificates will be entitled to distributions of
accrued interest beginning only on the distribution date, or under the
circumstances, specified in the related prospectus supplement. Some classes of
stripped principal certificates or REMIC residual certificates are not entitled
to any distributions of interest. Distributions of interest on all other
classes of certificates will be made on each distribution date based on the
Accrued Certificate Interest for that class and that distribution date, to the
extent of the portion of the Available Distribution Amount allocable to that
class on that distribution date.
Before the time interest is distributable on any class of accrual
certificates, the amount of Accrued Certificate Interest otherwise
distributable on that class will be added to the certificate balance thereof on
each distribution date or otherwise deferred as described in the related
prospectus supplement.
Stripped interest certificates are entitled to distributions of interest,
with disproportionate, nominal or no distributions or principal. To the extent
described in the related prospectus supplement, the Accrued Certificate
Interest for each distribution date on a class of stripped interest
certificates will be calculated like the Accrued Certificate Interest for other
classes except that it will accrue on a notional amount rather than a
certificate balance. The notional amount is either based on the principal
balances of some or all of the mortgage assets in the related trust or equal to
the certificate balances of one or more other classes of certificates of the
same series. Reference to a notional amount for a class of stripped interest
certificates is solely for convenience in making calculations and does not
represent the right to receive any distributions of principal.
The amount of Accrued Certificate Interest that is otherwise distributable
on, or, in the case of accrual certificates, that may otherwise be added to the
certificate balance of, one or more classes of the certificates of a series may
be reduced to the extent that any prepayment interest shortfalls, as described
under "Yield and Maturity Considerations--Shortfalls in Collections of
Interest," exceed the amount of any sums that are applied to offset the amount
of those shortfalls. The particular manner in which the shortfalls will be
allocated among some or all of the classes of certificates of that series will
be specified in the related prospectus supplement.
The related prospectus supplement will also describe the extent to which
the amount of Accrued Certificate Interest that is otherwise distributable on,
or, in the case of accrual certificates, that may otherwise be added to the
certificate balance of, a class of offered certificates may be reduced as a
result of any other contingencies. These contingencies include delinquencies,
losses and deferred interest on or in respect of the mortgage assets in the
related trust. Unless otherwise provided in the related prospectus
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supplement, any reduction in the amount of Accrued Certificate Interest
otherwise distributable on a class of certificates by reason of the allocation
to that class of a portion of any deferred interest on or in respect of the
mortgage assets in the related trust will result in a corresponding increase in
the certificate balance of that class. See "Risk Factors--Each class of
certificates will have different yield and prepayment considerations" and
"Yield and Maturity Considerations--Shortfalls in Collections of Interest."
DISTRIBUTIONS OF PRINCIPAL OF THE CERTIFICATES
Each class of certificates of each series, other than some classes of
stripped interest certificates and some classes of REMIC residual certificates,
will have a certificate balance. The certificate balance for a class, at any
time, will equal the then maximum amount that the holders of certificates of
that class will be entitled to receive as principal out of the future cash flow
on the mortgage assets and other assets included in the related trust. The
outstanding certificate balance of a class of certificates will be reduced by
distributions of principal made to that class. If provided in the related
prospectus supplement, the outstanding certificate balance of a class will be
reduced further by any losses incurred on the related mortgage assets allocated
to that class.
The outstanding certificate balance of a class of certificates may be
increased as a result of any deferred interest on or for the related mortgage
assets being allocated to that class. The outstanding certificate balance of
each class of accrual certificates will be increased before the distribution
date on which distributions of interest thereon are required to begin, by the
amount of any Accrued Certificate Interest on that class, as reduced by any
prepayment interest shortfalls.
Except to the extent specified in the related prospectus supplement, the
initial aggregate certificate balance of all classes of a series of
certificates will not be greater than the aggregate outstanding principal
balance of the related mortgage assets as of a specified cut-off date, after
taking into account all scheduled payments due on or before that date, whether
or not received. The initial certificate balance of each class of a series of
certificates will be specified in the related prospectus supplement. To the
extent described in the related prospectus supplement, distributions of
principal on a series of certificates will be made on each distribution date to
the holders of the class or classes of certificates of that series entitled
thereto until the certificate balances of those certificates have been reduced
to zero. Distributions of principal on one or more classes of certificates may
be made at a rate that is faster than the rate at which payments or other
collections of principal are received on the mortgage assets in the related
trust. Distributions of principal on one or more classes of certificates may
not begin until the occurrence of specific events, such as the retirement of
one or more other classes of certificates of the same series, or may be made at
a rate that is slower than the rate at which payments or other collections of
principal are received on the mortgage assets in the related trust.
Distributions of principal on one or more controlled amortization classes of
certificates may be made, subject to available funds, based on a specified
principal payment schedule. Distributions of principal on one or more companion
classes of certificates may be contingent on the specified principal payment
schedule for a controlled amortization class of the same series and the rate at
which payments and other collections of principal on the mortgage assets in the
related trust are received.
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Distributions of principal of any class of offered certificates will be made on
a pro rata basis among all of the certificates of that class or on another
basis specified in the related prospectus supplement.
ALLOCATION OF LOSSES AND SHORTFALLS
The amount of any losses or shortfalls in collections on the mortgage
assets in any trust, to the extent not covered by any credit support, will be
allocated among the respective classes of certificates of the related series in
the priority and manner specified in the related prospectus supplement. The
allocations may be effected by a reduction in the entitlements to interest or
the certificate balances of one or more classes of certificates, or both, or by
establishing a priority of payments among those classes of certificates. See
"Description of Credit Support."
ADVANCES IN RESPECT OF DELINQUENCIES
If provided in the related prospectus supplement and, if a trust includes
mortgage loans, the master servicer, a special servicer, the trustee, the
fiscal agent, if any, any provider of credit support or any other specified
person may be obligated to advance, or have the option of advancing an amount
up to the aggregate of any payments of principal, other than the principal
portion of any balloon payments, and interest that were due on or for those
mortgage loans during the related due period and were delinquent on the related
determination date. The person responsible will make advances on or before each
distribution date, from its own funds or from Excess Funds held in the related
certificate account that are not part of the Available Distribution Amount for
the related series of certificates for that distribution date.
Advances are intended to maintain a regular flow of scheduled interest and
principal payments to holders of the class or classes of certificates entitled
to receive those amounts, rather than to guarantee or insure against losses.
Consistent with this principle, all advances made out of an entity's own funds
will be reimbursable out of related proceeds consisting of liquidation
proceeds, insurance proceeds and condemnation proceeds on the mortgage loans on
which payments are delinquent and any credit support or other specific sources
that are identified in the related prospectus supplement. One source, in the
case of a series that includes one or more classes of subordinate certificates,
is collections on other mortgage assets in the related trust that would
otherwise be distributable to the holders of one or more classes of the
subordinate certificates. No advance will be required to be made by a master
servicer, special servicer, fiscal agent or trustee if, in the judgment of that
person, the advance would not be recoverable from related proceeds or another
specifically identified source. If previously made by a master servicer,
special servicer, fiscal agent or trustee, a nonrecoverable advance will be
reimbursable from any amounts in the related certificate account prior to any
distributions being made to the related series of certificateholders.
If advances have been made by a master servicer, special servicer, fiscal
agent, trustee or other entity from Excess Funds in a certificate account, that
person will be required to replace those funds in the certificate account on
any future distribution date to the extent that funds in the certificate
account on that distribution date are less than payments required to be made to
the related series of certificateholders on that date.
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The obligation of a master servicer, special servicer, fiscal agent, trustee or
other entity to make advances may be secured by a cash advance reserve fund or
a surety bond. If applicable, information regarding the characteristics of, and
the identity of any obligor on, any surety bond, will be provided in the
related prospectus supplement.
If provided in the related prospectus supplement, any entity making
advances will be entitled to receive interest on advances for a specified
period during which the advances are outstanding at the rate specified in the
prospectus supplement. The entity making advances will be entitled to payment
of that interest periodically from general collections on the mortgage loans in
the related trust before any payment to the related series of
certificateholders or as described in the prospectus supplement.
The prospectus supplement for any series of certificates evidencing an
interest in a trust that includes MBS will describe any comparable advancing
obligation of a party to the related pooling and servicing agreement or of a
party to the related MBS agreement.
REPORTS TO CERTIFICATEHOLDERS
On each distribution date, together with the distribution to the holders
of each class of the offered certificates of a series, a master servicer,
manager or trustee, as provided in the related prospectus supplement, will
forward to each holder, a distribution date statement that will set forth,
among other things, in each case to the extent applicable and to the extent
described in the related prospectus supplement:
o the amount of that distribution to holders of that class of offered
certificates that was applied to reduce the certificate balance thereof;
o the amount of that distribution to holders of that class of offered
certificates that was applied to pay Accrued Certificate Interest;
o the amount, if any, of that distribution to holders of that class of
offered certificates that was allocable to:
o prepayment premiums; and
o payments for equity participations;
o the amount, if any, by which that distribution is less than the amounts to
which holders of that class of offered certificates are entitled;
o if the related trust includes mortgage loans, the aggregate amount of
advances included in that distribution;
o if the related trust includes mortgage loans, the amount of servicing
compensation received by the related master servicer, and, if payable
directly out of the related trust, by any special servicer and any
sub-servicer;
o if the related trust includes MBS, the amount of administrative
compensation received by the REMIC administrator;
o information regarding the aggregate principal balance of the related
mortgage assets on or about that distribution date;
o if the related trust includes mortgage loans, information regarding the
number and aggregate principal balance of those mortgage loans that are
delinquent;
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o if the related trust includes mortgage loans, information regarding the
aggregate amount of losses incurred and principal prepayments made on
those mortgage loans during the related Prepayment Period;
o the certificate balance or notional amount, as the case may be, of that
class of certificates at the close of business on that distribution
date--separately identifying any reduction in the certificate balance or
notional amount due to the allocation of any losses on the related
mortgage assets, any increase in the certificate balance or notional
amount due to the allocation of any negative amortization in respect of
the related mortgage assets and any increase in the certificate balance of
a class of accrual certificates, if any, if Accrued Certificate Interest
has been added to that balance;
o if that class of offered certificates has a variable pass-through rate or
an adjustable pass-through rate, the pass-through rate applicable thereto
for that distribution date and, if determinable, for the next succeeding
distribution date;
o the amount deposited in or withdrawn from any reserve fund on that
distribution date, and the amount remaining on deposit in that reserve
fund as of the close of business on that distribution date;
o if the related trust includes one or more instruments of credit support,
such as a letter of credit, an insurance policy or a surety bond, the
amount of coverage under each instrument as of the close of business on
that distribution date; and
o the amount of credit support being afforded by any classes of subordinate
certificates.
In the case of information furnished under the first three points above,
the amounts will be expressed as a dollar amount per minimum denomination of
the relevant class of offered certificates or as a percentage. The prospectus
supplement for each series of certificates may describe additional information
to be included in reports to the holders of the offered certificates of that
series.
Within a reasonable period of time after the end of each calendar year,
the master servicer, manager or trustee for a series of certificates, as the
case may be, will, upon request, furnish to each person who at any time during
the calendar year was a holder of an offered certificate of that series a
statement containing the information provided in the first three points above,
aggregated for that calendar year or the applicable portion thereof during
which that person was a certificateholder. This obligation will be deemed to
have been satisfied to the extent that substantially comparable information is
provided under any requirements of the Internal Revenue Code of 1986 as are
from time to time in force. See, however, "--Book-Entry Registration and
Definitive Certificates" below.
If the trust for a series of certificates includes MBS, the ability of the
related master servicer, manager or trustee, as the case may be, to include in
any distribution date statement information regarding the mortgage loans
underlying the MBS will depend on the reports received for the MBS. In such
cases, the related prospectus supplement will describe the loan-specific
information to be included in the distribution date statements that will be
forwarded to the holders of the offered certificates of that series in
connection with distributions made to them.
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TERMINATION; RETIREMENT OF CERTIFICATES
The obligations created by the pooling and servicing agreement for each
series of certificates, other than limited payment and notice obligations of
the applicable parties, will terminate upon the payment to certificateholders
of that series of all amounts held in the certificate account or by the master
servicer and required to be paid to them under the pooling and servicing
agreement following the earlier of:
o the final payment or other liquidation or disposition, or any advance made
for the last mortgage asset in the trust for that series or of any
property acquired upon foreclosure or deed in lieu of foreclosure of any
mortgage loan in the trust for that series, and
o the purchase by the master servicer, the depositor or, if specified in the
related prospectus supplement, by the holder of the REMIC residual
certificates from the trust for that series of all remaining mortgage
assets therein and property, if any, acquired in respect of the mortgage
loans therein. See "Federal Income Tax Consequences" below.
In addition to the foregoing, the master servicer or the depositor will
have the option to purchase, in whole but not in part, the certificates
specified in the related prospectus supplement in the manner provided in the
related prospectus supplement. Upon the purchase of those certificates or at
any time thereafter, at the option of the master servicer or the depositor, the
mortgage assets may be sold, the certificates retired and the trust terminated,
or the certificates so purchased may be held or resold by the master servicer
or the depositor. In no event, however, will the trust created continue beyond
the expiration of 21 years from the death of the survivor of the persons named
in the pooling and servicing agreement. If the certificateholders are permitted
to terminate the trust under the applicable pooling and servicing agreement, a
penalty may be imposed upon the certificateholders based upon the fee that
would be foregone by the master servicer and any special servicer because of
the termination.
Any purchase of mortgage assets and other property will be made at the
option of the master servicer, the depositor or, if applicable, the holder of
the REMIC residual certificates at the price specified in the related
prospectus supplement. Before the right to purchase can be exercised, however,
the aggregate principal balance of the mortgage assets for that series must be
less than the percentage specified in the related prospectus supplement of the
aggregate principal balance of the mortgage assets at the cut-off date for that
series. The prospectus supplement for each series of certificates will describe
the amounts that the holders of those certificates will be entitled to receive
upon early retirement. Early termination may adversely affect the yield to
holders of some classes of certificates. If a REMIC election has been made, the
termination of the related trust will be effected in a manner consistent with
applicable federal income tax regulations and its status as a REMIC.
BOOK-ENTRY REGISTRATION AND DEFINITIVE CERTIFICATES
If so provided in the prospectus supplement for a series of certificates,
one or more classes of the offered certificates of the series will be offered
in book-entry format through the facilities of DTC, and each class so offered
will be represented by one or more global certificates registered in the name
of DTC or its nominee.
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DTC is a limited-purpose trust company organized under the New York
Banking Law, a "banking corporation" within the meaning of the New York Banking
Law, a member of the Federal Reserve System, a "clearing corporation" within
the meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered under the provisions of Section 17A of the Exchange Act. DTC was
created to hold securities for its participating organizations and facilitate
the clearance and settlement of securities transactions between participants
through electronic computerized book-entry changes in their accounts, thereby
eliminating the need for physical movement of securities certificates. Direct
participants maintain accounts with DTC and include securities brokers and
dealers, banks, trust companies and clearing corporations and other
organizations. DTC is owned by a number of its direct participants and by the
New York Stock Exchange, Inc., the American Stock Exchange, Inc. and the
National Association of Securities Dealers, Inc. Access to the DTC system also
is available to other indirect participants, such as banks, brokers, dealers
and trust companies that clear through or maintain a custodial relationship
with a direct participant, either directly or indirectly. The rules applicable
to DTC and its participants are on file with the SEC.
Purchases of book-entry certificates under the DTC system must be made by
or through direct participants, which will receive a credit for the book-entry
certificates on DTC's records. The ownership interest of each actual purchaser
of a book-entry certificate or certificate owner is in turn to be recorded on
the direct and indirect participants' records. Certificate owners will not
receive written confirmation from DTC of their purchases, but certificate
owners are expected to receive written confirmations providing details of those
transactions, as well as periodic statements of their holdings, from the direct
or indirect participant through which each certificate owner entered into the
transaction. Transfers of ownership interest in the book-entry certificates are
to be accomplished by entries made on the books of participants acting on
behalf of certificate owners. Certificate owners will not receive certificates
representing their ownership interests in the book-entry certificates, except
if use of the book-entry system for the book-entry certificates of any series
is discontinued as described below.
DTC has no knowledge of the actual certificate owners of the book-entry
certificates. DTC's records reflect only the identity of the direct
participants to whose accounts the certificates are credited, which may or may
not be the certificate owners. The participants will remain responsible for
keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to direct
participants, by direct participants to indirect participants, and by direct
participants and indirect participants to certificate owners will be governed
by arrangements among them, subject to any statutory or regulatory requirements
as may be in effect from time to time.
Distributions on the book-entry certificates will be made to DTC. DTC's
practice is to credit direct participants' accounts on the related distribution
date in accordance with their respective holdings shown on DTC's records unless
DTC has reason to believe that it will not receive payment on that date.
Disbursement of distributions by participants to certificate owners will be
governed by standing instructions and customary practices, as is the case with
securities held for the accounts of customers in bearer form or registered in
"street name", and will be the responsibility of each participant, and not of
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DTC, the depositor or any trustee or master servicer, consistent with any
statutory or regulatory requirements as may be in effect from time to time.
Under a book-entry system, certificate owners may receive payments after the
related distribution date.
Unless otherwise provided in the related prospectus supplement, the only
"certificateholder," as the term is used in the related pooling and servicing
agreement, of book-entry certificates will be the nominee of DTC, and the
certificate owners will not be recognized as certificateholders under the
pooling and servicing agreement. Certificate owners will be permitted to
exercise the rights of certificateholders under the related pooling and
servicing agreement only indirectly through the participants who in turn will
exercise their rights through DTC. The depositor is informed that DTC will take
action permitted to be taken by a certificateholder under a pooling and
servicing agreement only at the direction of one or more participants to whose
account with DTC interests in the book-entry certificates are credited.
Because DTC can act only on behalf of participants, who in turn act on
behalf of indirect participants and certificate owners, the ability of a
certificate owner to pledge its interest in book-entry certificates to persons
or entities that do not participate in the DTC system, or otherwise take
actions in respect of its interest in book-entry certificates, may be limited
due to the lack of a physical certificate evidencing that interest.
If provided in the related prospectus supplement, certificates initially
issued in book-entry form will be issued as definitive certificates to
certificate owners or their nominees, rather than to DTC or its nominee, only
if:
o the depositor advises the trustee in writing that DTC is no longer willing
or able to discharge properly its responsibilities as depository for those
certificates and the depositor is unable to locate a qualified successor
or
o the depositor, at its option, elects to terminate the book-entry system
through DTC for those certificates.
Upon the occurrence of either of the events described in the preceding
sentence, DTC will be required to notify all participants of the availability
through DTC of definitive certificates. Upon surrender by DTC of the
certificate or certificates representing a class of book-entry certificates,
together with instructions for registration, the trustee for the related series
or other designated party will be required to issue to the certificate owners
identified in those instructions the definitive certificates to which they are
entitled, and thereafter the holders of those definitive certificates will be
recognized as certificateholders under the related pooling and servicing
agreement.
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THE POOLING AND SERVICING AGREEMENTS
The certificates of each series will be issued under a pooling and
servicing agreement. The parties to a pooling and servicing agreement will
typically include the depositor, the trustee, the master servicer and, in some
cases, a special servicer appointed as of the date of the pooling and servicing
agreement. A pooling and servicing agreement that relates to a trust that
includes MBS may include a manager as a party, but may not include a master
servicer or other servicer as a party. All parties to each pooling and
servicing agreement under which certificates of a series are issued will be
identified in the related prospectus supplement. An affiliate of the depositor,
or the mortgage asset seller or an affiliate thereof, may perform the functions
of a special servicer, manager or a master servicer called either a servicer or
master servicer. Any party to a pooling and servicing agreement or any
affiliate thereof may own certificates issued under that agreement.
A form of a pooling and servicing agreement has been filed as an exhibit
to the registration statement of which this prospectus is a part. However, the
provisions of each pooling and servicing agreement will vary depending upon the
nature of the certificates to be issued thereunder and the nature of the
related trust. The following summaries describe provisions that may appear in a
pooling and servicing agreement under which certificates that evidence
interests in mortgage loans will be issued. The prospectus supplement for a
series of certificates will describe any provision of the related pooling and
servicing agreement that materially differs from the description thereof
contained in this prospectus and, if the related trust includes MBS, will
summarize all of the material provisions of the related pooling and servicing
agreement. These summaries do not purport to be complete and are subject to,
and are qualified in their entirety by reference to, all of the provisions of
the pooling and servicing agreement for each series of certificates and the
description of those provisions in the related prospectus supplement.
The depositor will provide a copy of the pooling and servicing agreement,
without exhibits, that relates to any series of certificates without charge
upon written request of a holder of a certificate of that series addressed to
it at its principal executive offices specified under "The Depositor".
ASSIGNMENT OF MORTGAGE LOANS; REPURCHASES
At the time of issuance of any series of certificates, the depositor will
assign, or cause to be assigned, to the designated trustee the mortgage loans
to be included in the related trust, together with, to the extent described in
the related prospectus supplement, all principal and interest to be received on
or for those mortgage loans after the cut-off date, other than principal and
interest due on or before the cut-off date. The trustee will, concurrently with
that assignment, deliver the certificates to, or at the direction of, the
depositor in exchange for the mortgage loans and the other assets to be
included in the trust for that series. Each mortgage loan will be identified in
a schedule appearing as an exhibit to the related pooling and servicing
agreement. The schedule will include detailed information that pertains to each
mortgage loan included in the related trust, which information will typically
include:
o the address of the related mortgaged property and type of property;
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o the mortgage rate and, if applicable, the applicable index, gross margin,
adjustment date and any rate cap information;
o the original and remaining term to maturity;
o the original amortization term; and
o the original and outstanding principal balance.
In addition, to the extent provided in the related prospectus supplement,
the depositor will, as to each mortgage loan to be included in a trust,
deliver, or cause to be delivered, to the related trustee or to a custodian
appointed by the trustee:
o the mortgage note endorsed, without recourse, either in blank or to the
order of the trustee or its nominee, the mortgage with evidence of
recording indicated thereon, except for any mortgage not returned from the
public recording office;
o an assignment, which may be a blanket assignment covering mortgages on
mortgaged properties located in the same county if permitted by law, of
the mortgage in blank or to the trustee or its nominee in recordable form,
together with any intervening assignments of the mortgage with evidence of
recording thereon, except for any assignment not returned from the public
recording office; and
o if applicable, any riders or modifications to the mortgage note and
mortgage, together with other documents at the times provided in the
related pooling and servicing agreement.
A trust may include mortgage loans where the original mortgage note is not
delivered to the trustee if the depositor delivers, or causes to be delivered,
to the related trustee or custodian a copy or a duplicate original of the
mortgage note, together with an affidavit certifying that the original thereof
has been lost or destroyed. In addition, if the depositor cannot deliver, for
any mortgage loan, the mortgage or any intervening assignment with evidence of
recording thereon concurrently with the execution and delivery of the related
pooling and servicing agreement because of a delay caused by the public
recording office, the depositor will deliver, or cause to be delivered, to the
related trustee or custodian a true and correct photocopy of the mortgage or
assignment as submitted for recording. The depositor will deliver, or cause to
be delivered to the related trustee or custodian the mortgage or assignment
with evidence of recording after receipt from the public recording office. If
the depositor cannot deliver, for any mortgage loan, the mortgage or any
intervening assignment with evidence of recording concurrently with the
execution and delivery of the related pooling and servicing agreement because
the mortgage or assignment has been lost, the depositor will deliver, or cause
to be delivered, to the related trustee or custodian a true and correct
photocopy of that mortgage or assignment with evidence of recording.
As specified in the related prospectus supplement, assignments of mortgage
to the trustee or its nominee will be recorded in the appropriate public
recording office, except in states where, in the opinion of counsel acceptable
to the trustee, the recording is not required to protect the trustee's
interests in the mortgage loan against the claim of any subsequent transferee
or any successor to or creditor of the depositor or the originator of the
mortgage loan.
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The trustee or a custodian appointed by the trustee for a series of
certificates will be required to review the mortgage loan documents delivered
to it within a specified period of days after receipt, and the trustee or
custodian will hold those documents in trust for the benefit of the
certificateholders of that series. Unless we tell you otherwise in the related
prospectus supplement, if any mortgage loan document is found to be missing or
defective, and the omission or defect, as the case may be, materially and
adversely affects the interests of the certificateholders of the related
series, the trustee or custodian will be required to notify the master servicer
and the depositor, and one of them will be required to notify the relevant
mortgage asset seller. If the mortgage asset seller cannot deliver the document
or cure the defect within a specified number of days after receipt of the
notice, then, except as otherwise specified below or in the related prospectus
supplement, the mortgage asset seller will be obligated to repurchase the
related mortgage loan from the trustee.
If so provided in the prospectus supplement for a series of certificates,
a mortgage asset seller, instead of repurchasing a mortgage loan for which
there is missing or defective loan documentation, will have the option,
exercisable upon specific conditions or within a specified period after initial
issuance of the series of certificates, to replace that mortgage loan with one
or more other mortgage loans. Any replacement of a mortgage loan must comply
with standards that will be described in the prospectus supplement. This
repurchase or substitution obligation will constitute the sole remedy to
holders of the certificates of any series or to the related trustee on their
behalf for missing or defective mortgage asset documentation when the related
prospectus supplement provides for additional remedies. Neither the depositor
nor, unless it is the mortgage asset seller, the master servicer will be
obligated to purchase or replace a mortgage loan if a mortgage asset seller
defaults on its obligation to do so.
The trustee will be authorized at any time to appoint one or more
custodians under a custodial agreement to hold title to the mortgage loans in
any trust and to maintain possession and review the documents relating to those
mortgage loans as the agent of the trustee. The identity of any custodian to be
appointed on the date of initial issuance of the certificates will be provided
in the related prospectus supplement. Any custodian may be an affiliate of the
depositor or the master servicer.
REPRESENTATIONS AND WARRANTIES; REPURCHASES
To the extent provided in the prospectus supplement for a series of
certificates, the depositor will, for each mortgage loan in the related trust,
make or assign, or cause to be made or assigned, representations and warranties
made by a warranting party covering, for example:
o the accuracy of the information for the mortgage loan on the schedule of
mortgage loans appearing as an exhibit to the related pooling and
servicing agreement;
o the enforceability of the related mortgage note and mortgage and the
existence of title insurance insuring the lien priority of the related
mortgage;
o the warranting party's title to the mortgage loan and the authority of the
warranting party to sell the mortgage loan; and
o the payment status of the mortgage loan.
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It is expected that in most cases the warranting party will be the
mortgage asset seller; however, the warranting party may also be an affiliate
of the mortgage asset seller, the depositor or an affiliate of the depositor,
the master servicer, a special servicer or another person acceptable to the
depositor. The warranting party, if other than the mortgage asset seller, will
be identified in the related prospectus supplement.
If provided in the related prospectus supplement, the master servicer or
the trustee or both will be required to notify promptly any warranting party of
any breach of any representation or warranty made by it in respect of a
mortgage loan that materially and adversely affects the interests of the
certificateholders of the related series. If the warranting party cannot cure
the breach within a specified period following the date on which it was
notified of the breach, then, if provided in the related prospectus supplement,
it will be obligated to repurchase the mortgage loan from the trustee at the
applicable Purchase Price.
If provided in the related prospectus supplement, a warranting party,
instead of repurchasing a mortgage loan for which a breach has occurred, will
have the option to replace the mortgage loan with one or more other mortgage
loans, in accordance with standards that will be described in the prospectus
supplement. This option will be exercisable upon the conditions and within the
time period specified in the related prospectus supplement. This repurchase or
substitution obligation will constitute the sole remedy available to holders of
the certificates of any series or to the related trustee on their behalf for a
breach of representation and warranty by a warranting party unless the related
prospectus supplement provides for additional remedies. Unless it is the
warranting party, neither the depositor nor the master servicer will be
obligated to purchase or replace a mortgage loan if a warranting party defaults
on its obligation to do so.
Representations and warranties may be made in respect of a mortgage loan
as of a date before the date upon which the related series of certificates is
issued, and therefore may not address events that may occur following the date
as of which they were made. The date as of which the representations and
warranties regarding the mortgage loans in any trust were made will be
specified in the related prospectus supplement.
COLLECTION AND OTHER SERVICING PROCEDURES
As more specifically described in the related prospectus supplement, the
master servicer for any mortgage pool, directly or through sub-servicers, will
be obligated under the related pooling and servicing agreement to service and
administer the mortgage loans in that mortgage pool. The master servicer will
act for the benefit of the related certificateholders, in accordance with
applicable law and with the terms of the pooling and servicing agreement, the
mortgage loans and any instrument of credit support included in the related
trust. Subject to these servicing obligations, the master servicer will have
full power and authority to do any and all things in connection with the
servicing and administration that it may deem necessary and desirable.
As part of its servicing duties, a master servicer will be required to
make reasonable efforts to collect all payments called for under the terms and
provisions of the mortgage loans that it services and will be obligated to
follow the collection procedures as it would follow for mortgage loans that are
comparable to the mortgage loans and held for its
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own account. These procedures must be consistent with the terms of the related
pooling and servicing agreement and not impair recovery under any instrument of
credit support included in the related trust. Consistent with these servicing
obligations, the master servicer will be permitted to waive any prepayment
premium, late payment charge or other charge in connection with any mortgage
loan to the extent provided in the related prospectus supplement.
Under a pooling and servicing agreement, a master servicer or special
servicer will be granted discretion to extend relief to mortgagors whose
payments become delinquent. To the extent provided in the related prospectus
supplement, if a material default occurs or a payment default is reasonably
foreseeable on a mortgage loan, the master servicer or special servicer will be
permitted, subject to any specific limitations provided in the related pooling
and servicing agreement and described in the related prospectus supplement, to
modify, waive or amend any term of the mortgage loan. These modifications,
waivers or amendments may include deferring payments, extending the stated
maturity date or otherwise adjusting the payment schedule. Each modification,
waiver or amendment must be reasonably likely to produce a greater recovery on
the mortgage loan on a present value basis than would liquidation and will not
adversely affect the coverage under any applicable instrument of credit
support.
A mortgagor's failure to make required mortgage loan payments may mean
that operating income is insufficient to service the mortgage debt, or may
reflect the diversion of that income from the servicing of the mortgage debt.
In addition, a mortgagor that is unable to make mortgage loan payments may also
be unable to make timely payment of taxes and otherwise to maintain and insure
the related mortgaged property. In general, the master servicer will be
required:
o to monitor any mortgage loan that is in default;
o evaluate whether the causes of the default can be corrected over a
reasonable period without significant impairment of the value of the
related mortgaged property;
o initiate corrective action in cooperation with the mortgagor if cure is
likely;
o inspect the related mortgaged property; and
o take other actions as it deems necessary and appropriate.
A significant period of time may elapse before the master servicer is able
to assess the success of any corrective action or the need for additional
initiatives. The time within which the master servicer can make the initial
determination of appropriate action, evaluate the success of corrective action,
develop additional initiatives, institute foreclosure proceedings and actually
foreclose or accept a deed to a mortgaged property in lieu of foreclosure on
behalf of the certificateholders of the related series may vary considerably.
The variation will depend on the particular mortgage loan, the mortgaged
property, the mortgagor, the presence of an acceptable party to assume the
mortgage loan and the laws of the jurisdiction in which the mortgaged property
is located. If a mortgagor files a bankruptcy petition, the master servicer may
not be permitted to accelerate the maturity of the mortgage loan or to
foreclose on the related mortgaged property for a considerable period of time.
See "Legal Aspects of Mortgage Loans--Bankruptcy Laws."
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Mortgagors may, from time to time, request partial releases of the
mortgaged properties, easements, consents to alteration or demolition and other
similar matters. The master servicer may approve a request if it has
determined, exercising its business judgment in the same manner as it would if
it were the owner of the related mortgage loan, that the approval will not
adversely affect the security for, or the timely and full collectibility of,
the related mortgage loan. The master servicer will not approve a request if a
REMIC election has been made and the request would, in the opinion of
independent counsel, result in the imposition of a tax on the trust or cause
the trust or any designated portion thereof to fail to qualify as a REMIC under
the Code at any time that any certificate is outstanding. Any fee collected by
the master servicer for processing the request will be retained by the master
servicer as additional servicing compensation.
For mortgage loans secured by junior liens on the related mortgaged
properties, to the extent provided in the related prospectus supplement, the
master servicer will be required to file, or cause to be filed, of record a
request for notice of any action by a superior lienholder under the senior lien
for the protection of the related trustee's interest. This request for notice
will be filed where permitted by local law and whenever applicable state law
does not require that a junior lienholder be named as a party defendant in
foreclosure proceedings to foreclose the junior lienholder's equity of
redemption. To the extent provided in the related prospectus supplement, the
master servicer also will be required to notify any superior lienholder in
writing of the existence of the mortgage loan and request notification of any
action described below to be taken against the mortgagor or the mortgaged
property by the superior lienholder. If the master servicer is notified that
any superior lienholder:
o has accelerated or intends to accelerate the obligations secured by the
related senior lien;
o has declared or intends to declare a default under the mortgage or the
promissory note secured thereby; or
o has filed or intends to file an election to have the related mortgaged
property sold or foreclosed,
then, to the extent provided in the related prospectus supplement, the master
servicer will be required to take, on behalf of the related trust, whatever
actions are necessary to protect the interests of the related
certificateholders or to preserve the security of the related mortgage loan or
both, subject to the application of the REMIC provisions.
Unless we tell you otherwise in the related prospectus supplement, the
master servicer will be required to advance the necessary funds to cure the
default or reinstate the senior lien, if the advance is in the best interests
of the related certificateholders and the master servicer determines the
advances are recoverable out of payments on or proceeds of the related mortgage
loan.
The master servicer for any trust, directly or through sub-servicers, will
also be required to perform various other customary functions of a servicer of
mortgage loans, including:
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o maintaining escrow or impound accounts, if required under the related
pooling and servicing agreement, for payment of taxes, insurance premiums,
ground rents and similar items, or otherwise monitoring the timely payment
of those items;
o attempting to collect delinquent payments;
o supervising foreclosures;
o negotiating modifications;
o conducting property inspections on a periodic or other basis; managing or
overseeing the management of REO properties or mortgaged properties
acquired on behalf of the trust through foreclosure, deed-in-lieu of
foreclosure or otherwise; and
o maintaining servicing records relating to the mortgage loans.
To the extent provided in the related prospectus supplement, the master
servicer will be responsible for filing and settling claims in respect of
particular mortgage loans under any applicable instrument of credit support.
See "Description of Credit Support."
SUB-SERVICERS
A master servicer may delegate its servicing obligations in respect of the
mortgage loans it services to one or more third-party sub-servicers. To the
extent specified in the related prospectus supplement, the master servicer will
remain obligated under the related pooling and servicing agreement. A
sub-servicer for any series of certificates may be an affiliate of the
depositor or master servicer. To the extent specified in the related prospectus
supplement, each sub-servicing agreement between a master servicer and a
sub-servicer will provide for servicing of the applicable mortgage loans
consistent with the related pooling and servicing agreement. A master servicer
will be required to monitor the performance of sub-servicers retained by it and
will have the right to remove a sub-servicer retained by it at any time it
considers the removal to be in the best interests of certificateholders.
Unless otherwise provided in the related prospectus supplement, a master
servicer will be solely liable for all fees owed by it to any sub-servicer,
even if the master servicer's compensation under the related pooling and
servicing agreement is insufficient to pay those fees. Each sub-servicer will
be reimbursed by the master servicer that retained it for expenditures which it
makes, to the same extent the master servicer would be reimbursed under a
pooling and servicing agreement. See "--Certificate Account" and "--Servicing
Compensation and Payment of Expenses."
SPECIAL SERVICERS
One or more special servicers may be a party to the related pooling and
servicing agreement or may be appointed by the master servicer or another
specified party. A special servicer for any series of certificates may be an
affiliate of the depositor or the master servicer and may hold, or be
affiliated with the holder of, subordinate certificates of the series. A
special servicer may be entitled to any of the rights, and subject to any of
the obligations, described in this prospectus for a master servicer. In
general, a special servicer's duties will relate to defaulted mortgage loans,
including instituting foreclosures and negotiating work-outs. The related
prospectus supplement will describe the rights, obligations and compensation of
any special servicer for a particular series of
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certificates. The master servicer will be liable for the performance of a
special servicer only if, and to the extent, provided in the related prospectus
supplement. The master servicer may be appointed the special servicer.
CERTIFICATE ACCOUNT
For each trust that includes mortgage loans, the master servicer, the
trustee or a special servicer will establish and maintain a certificate account
that will comply with the standards of each rating agency that has rated any
one or more classes of certificates of the related series. A certificate
account may be maintained as an interest-bearing or a non-interest-bearing
account and the funds held in the account may be invested pending each
succeeding distribution date in permitted investments consisting of United
States government securities and other obligations that are acceptable to each
rating agency that has rated any one or more classes of certificates of the
related series. To the extent provided in the related prospectus supplement,
any interest or other income earned on funds in a certificate account will be
paid to the related master servicer, trustee or special servicer, if any, as
additional compensation. A certificate account may be maintained with the
related master servicer, special servicer or mortgage asset seller or with a
depository institution that is an affiliate of any of them or of the depositor
if the account complies with applicable rating agency standards. If permitted
by each applicable rating agency, a certificate account may contain funds
relating to more than one series of mortgage pass-through certificates and
other funds representing payments on mortgage loans owned by the related master
servicer or special servicer, or serviced by either of them on behalf of
others.
Deposits.
To the extent described in the related prospectus supplement, the
following payments and collections received or made by the master servicer, the
trustee or any special servicer after the cut-off date, other than payments due
on or before the cut-off date, are to be deposited in the certificate account
for each trust that includes mortgage loans. Each deposit will be made within a
specified period following receipt:
(1) all payments of principal, including principal prepayments, on the
mortgage loans;
(2) all payments of interest on the mortgage loans, including any default
interest collected, in each case net of any portion retained by the
master servicer or any special servicer as its servicing compensation or
as compensation to the trustee;
(3) all insurance proceeds received under any hazard, title or other
insurance policy that provides coverage for a mortgaged property or the
related mortgage loan, other than proceeds applied to the restoration of
the property or released to the related borrower;
(4) all condemnation proceeds received in connection with the condemnation or
other governmental taking of all or any portion of a mortgaged property,
other than proceeds applied to the restoration of the property or
released to the related borrower;
(5) any other amounts disposition proceeds received and retained in
connection with the liquidation of defaulted mortgage loans or property
acquired by foreclosure or otherwise;
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(6) together with the net operating income, less reasonable reserves for
future expenses, derived from the operation of any mortgaged properties
acquired by the trust through foreclosure or otherwise;
(7) any amounts paid under any instrument or drawn from any fund that
constitutes credit support for the related series of certificates;
(8) any advances made for delinquent scheduled payments of principal and
interest on the mortgage loans;
(9) any amounts paid under any cash flow agreement;
(10) all proceeds of the purchase of any mortgage loan, or REO property by the
depositor, any mortgage asset seller or any other specified person as
described under "--Assignment of Mortgage Loans; Repurchases" and
"--Representations and Warranties; Repurchases," all proceeds of the
purchase of any defaulted mortgage loan as described under "--Realization
Upon Defaulted Mortgage Loans," and all proceeds of any mortgage asset
purchased as described under "Description of the
Certificates--Termination; Retirement of Certificates", together with
insurance proceeds, condemnation proceeds and disposition proceeds,
liquidation proceeds;
(11) to the extent that any item does not constitute additional servicing
compensation to the master servicer or a special servicer and is not
otherwise retained by the depositor or another specified person, any
payments on account of modification or assumption fees, late payment
charges, prepayment premiums or equity participations for the mortgage
loans;
(12) all payments required to be deposited in the certificate account for any
deductible clause in any blanket insurance policy described under
"--Hazard Insurance Policies";
(13) any amount required to be deposited by the master servicer or the trustee
to cover losses realized on investments for the benefit of the master
servicer or the trustee, as the case may be, of funds held in the
certificate account; and
(14) any other amounts required to be deposited in the certificate account as
described in the related prospectus supplement.
Withdrawals.
To the extent described in the related prospectus supplement, a master
servicer, trustee or special servicer may make withdrawals from the certificate
account for a trust that includes mortgage loans for any of the following
purposes:
o to make distributions to the certificateholders on each distribution date;
o to pay the master servicer or a special servicer any servicing fees out of
payments and other collections of interest on the particular mortgage
loans on which those fees were earned;
o to pay costs and expenses incurred by the trust for environmental site
assessments performed for mortgaged properties that constitute security
for defaulted mortgage
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loans, and for any containment, clean-up or remediation of hazardous
wastes and materials present on those mortgaged properties, as described
under "--Realization Upon Defaulted Mortgage Loans";
o to reimburse the master servicer, the depositor, the trustee, or any of
their respective directors, officers, employees and agents for specified
expenses, costs and liabilities incurred by them, as described under
"--Matters Regarding the Master Servicer and the Depositor" and "--Matters
Regarding the Trustee";
o to the extent described in the related prospectus supplement, to pay the
fees of the trustee and any provider of credit support;
o to the extent described in the related prospectus supplement, to reimburse
prior draws on any form of credit support;
o to pay the master servicer, a special servicer or the trustee, as
appropriate, interest and investment income earned in respect of amounts
held in the certificate account as additional compensation;
o to pay any servicing expenses not otherwise required to be advanced by the
master servicer, a special servicer or any other specified person;
o if one or more elections have been made to treat the trust or designated
portions thereof as a REMIC, to pay any federal, state or local taxes
imposed on the trust or its assets or transactions, as described under
"Federal Income Tax Consequences--REMICs--Prohibited Transactions Tax and
Other Taxes;"
o to pay the cost of various opinions of counsel obtained under the related
pooling and servicing agreement for the benefit of certificateholders;
o to make any other withdrawals described in the related prospectus
supplement; and
o to clear and terminate the certificate account upon the termination of the
trust.
To the extent provided in the related prospectus supplement, withdrawals
from the certificate account can also be made to reimburse the master servicer,
a special servicer or any other specified person for unreimbursed advances of
delinquent scheduled payments of principal and interest made by it, and
specified unreimbursed servicing expenses incurred by it, for mortgage loans in
the trust and REO properties. This reimbursement is available from amounts that
represent late payments and liquidation proceeds on the particular mortgage
loans on which advances were made, and net income collected on any REO
properties for which the advances were made or the expenses were incurred.
Reimbursements of advances can also be made from amounts drawn under any form
of credit support. If in the judgment of the person making the advance, those
advances or expenses or both will not be recoverable from those amounts, the
reimbursement will be available from amounts collected on other mortgage loans
in the same trust or to the extent described in the related prospectus
supplement, only from that portion of amounts collected on those other mortgage
loans that is otherwise distributable on one or more classes of subordinate
certificates of the related series.
To the extent described in the related prospectus supplement, withdrawals
can also be made to pay the master servicer, a special servicer or any other
specified person interest accrued on these advances and servicing expenses
while they remain outstanding and unreimbursed.
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REALIZATION UPON DEFAULTED MORTGAGE LOANS
If a default on a mortgage loan has occurred or, in the master servicer's
judgment, a payment default is imminent, the master servicer, on behalf of the
trustee, may at any time
o institute foreclosure proceedings,
o exercise any power of sale contained in the related mortgage,
o obtain a deed in lieu of foreclosure, or
o otherwise acquire title to the related mortgaged property, by operation of
law or otherwise.
Except to the extent specified in the related prospectus supplement,
unless the master servicer has previously received a report prepared by a
person who regularly conducts environmental audits, the master servicer may not
acquire title to any mortgaged property or take any other action relating to
any mortgaged property that would cause the trustee, for the benefit of the
related series of certificateholders, or any other specified person to hold
title to, to be a "mortgagee-in-possession" of, or to be an "owner" or an
"operator" of the mortgaged property within the meaning of federal
environmental laws. The environmental report will be an expense of the trust,
and the report must indicate that either:
(1) (A) the mortgaged property is in compliance with applicable environmental
laws and regulations and (B) there are no circumstances or conditions
present at the mortgaged property that have resulted in any contamination
for which investigation, testing, monitoring, containment, clean-up or
remediation could be required under any applicable environmental laws and
regulations; or
(2) the master servicer, based solely, as to environmental matters and
related costs, on the information provided in the report, determines that
taking actions as are necessary to bring the mortgaged property into
compliance with applicable environmental laws and regulations and/or
taking the actions contemplated by clause (1)(B) above, is reasonably
likely to produce a greater recovery, taking into account the time value
of money, than not taking the actions. See "Legal Aspects of Mortgage
Loans--Environmental Considerations."
A pooling and servicing agreement may grant to any or all of the master
servicer, a special servicer, a provider of credit support and the holder or
holders of classes of the related series of certificates a right of first
refusal to purchase from the trust, at a predetermined Purchase Price any
mortgage loan on which a specified number of scheduled payments are delinquent.
The predetermined Purchase Price will be specified on the prospectus supplement
if it is insufficient to fully cover all amounts due on the related mortgage
loan. In addition, to the extent provided in the related prospectus supplement,
the master servicer may offer to sell any defaulted mortgage loan if the master
servicer determines, consistent with its normal servicing procedures, that a
sale would produce a greater recovery, taking into account the time value of
money, than would liquidation of the related mortgaged property. If the master
servicer does not sell the mortgage loan, it will proceed against the related
mortgaged property, subject to the discussion below.
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If title to any mortgaged property is acquired by a trust as to which a
REMIC election has been made, the master servicer, on behalf of the trust, will
be required to sell the mortgaged property within three full years after the
taxable year of acquisition or within another period specified in the related
prospectus supplement, unless:
o the IRS grants an extension of time to sell the property or
o the trustee receives an opinion of independent counsel to the effect that
the holding of the property by the trust for longer than that period will
not result in the imposition of a tax on the trust or cause the trust, or
any designated portion thereof, to fail to qualify as a REMIC under the
Code at any time that any certificate is outstanding.
Subject to this and any other tax-related limitations, the master servicer
will generally be required to attempt to sell any REO property on the same
terms and conditions it would if it were the owner. To the extent provided in
the related prospectus supplement, if title to any mortgaged property is
acquired by a trust as to which a REMIC election has been made, the master
servicer will also be required to ensure that the mortgaged property is
administered so that it constitutes "foreclosure property" within the meaning
of Code Section 860G(a)(8) at all times, that the sale of the property does not
result in the receipt by the trust of any income from non-permitted assets as
described in Code Section 860F(a)(2)(B), and that the trust does not derive any
"net income from foreclosure property" within the meaning of Code Section
860G(c)(2), for the property. If the trust acquires title to any mortgaged
property, the master servicer, on behalf of the trust, may retain an
independent contractor to manage and operate the property. The retention of an
independent contractor, however, will not relieve the master servicer of its
obligation to manage the mortgaged property as required under the related
pooling and servicing agreement.
If liquidation proceeds collected on a defaulted mortgage loan are less
than the outstanding principal balance of the defaulted mortgage loan plus
interest accrued on that mortgage loan plus the aggregate amount of
reimbursable expenses incurred by the master servicer related to that mortgage
loan, then the trust will realize a loss in the amount of the shortfall to the
extent that the shortfall is not covered by any instrument or fund constituting
credit support. The master servicer will be entitled to reimbursement from the
liquidation proceeds recovered on any defaulted mortgage loan, of any:
o amounts that represent unpaid servicing compensation for the mortgage
loan,
o unreimbursed servicing expenses incurred on the mortgage loan, and
o any unreimbursed advances of delinquent payments made on the mortgage
loan.
The master servicer will be entitled to receive these reimbursements
before any distributions of liquidation proceeds are made to
certificateholders. In addition, if provided in the related prospectus
supplement, amounts otherwise distributable on the certificates may be further
reduced by interest payable to the master servicer on any servicing expenses
and advances.
If any mortgaged property suffers damage and the proceeds, if any, of the
related hazard insurance policy are insufficient to restore fully the damaged
property, the
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master servicer will not be required to expend its own funds to restore the
property unless, and to the extent not otherwise provided in the related
prospectus supplement, it determines that:
o the restoration will increase the proceeds to certificateholders on
liquidation of the mortgage loan after reimbursement of the master
servicer for its expenses, and
o the expenses will be recoverable by it from related insurance proceeds,
condemnation proceeds, liquidation proceeds or amounts drawn on any
instrument or fund constituting credit support.
HAZARD INSURANCE POLICIES
Unless we tell you otherwise in the related prospectus supplement, each
pooling and servicing agreement will require the master servicer to use
reasonable efforts to cause each mortgage loan borrower to maintain a hazard
insurance policy that provides for the coverage as is required under the
related mortgage if the mortgage permits the holder of the mortgage to dictate
to the borrower the insurance coverage to be maintained on the related
mortgaged property, the coverage as is consistent with the master servicer's
normal servicing procedures. The coverage will typically be in an amount equal
to the lesser of the principal balance owing on the mortgage loan and the
replacement cost of the related mortgaged property.
The ability of a master servicer to assure that insurance proceeds are
appropriately applied may be dependent upon its being named as an additional
insured under any insurance policy and upon whether information concerning
covered losses is furnished by borrowers. All amounts collected by a master
servicer under any insurance policy covering the mortgaged property, except for
amounts to be applied to the restoration or repair of the mortgaged property or
released to the borrower consistent with the master servicer's normal servicing
procedures or the terms and conditions of the related mortgage and mortgage
note, will be deposited in the related certificate account.
The pooling and servicing agreement may provide that the master servicer
may satisfy its obligation to cause each borrower to maintain a hazard
insurance policy by maintaining a blanket policy insuring against hazard losses
on all of the mortgage loans in a trust. If the blanket policy contains a
deductible clause, the master servicer will be required, if a casualty covered
by the blanket policy occurs, to deposit in the related certificate account all
additional sums that would have been deposited in that account under an
individual policy but were not because of the deductible clause.
The standard form of fire and extended coverage policy covers physical
damage to or destruction of the improvements of the property by fire,
lightning, explosion, smoke, windstorm and hail, and riot, strike and civil
commotion, subject to the conditions and exclusions specified in each policy.
Although the policies covering the mortgaged properties will be underwritten by
different insurers under different state laws and different applicable state
forms, policies typically do not cover any physical damage resulting from war,
revolution, governmental actions, floods and other water-related causes, earth
movement, including earthquakes, landslides and mudflows, wet or dry rot,
vermin and domestic animals. As a result, a mortgaged property may not be
insured for losses arising from any of these causes unless the related mortgage
specifically requires, or permits the holder thereof to require, that coverage.
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The hazard insurance policies covering the mortgaged properties will
typically contain co-insurance clauses that in effect require an insured at all
times to carry insurance of a specified percentage of typically 80% to 90% of
the full replacement value of the improvements on the property to recover the
full amount of any partial loss. If the insured's coverage falls below this
specified percentage, the clauses typically provide that the insurer's
liability if there is a partial loss does not exceed the lesser of:
o the replacement cost of the improvements less physical depreciation; and
o the proportion of the loss that the amount of insurance carried bears to
the specified percentage of the full replacement cost of the improvements.
DUE-ON-SALE AND DUE-ON-ENCUMBRANCE PROVISIONS
Some of the mortgage loans may contain a due-on-sale clause that entitles
the lender to accelerate payment of the mortgage loan upon any sale or other
transfer of the related mortgaged property made without the lender's consent.
Some of the mortgage loans may also contain a due-on-encumbrance clause that
entitles the lender to accelerate the maturity of the mortgage loan upon the
creation of any other lien or encumbrance upon the mortgaged property. Unless
otherwise provided in the related prospectus supplement, the master servicer
will determine whether to exercise any right the trustee may have under any
due-on-sale provision in a manner consistent with the master servicer's normal
servicing procedures. To the extent provided in the related prospectus
supplement, the master servicer will be entitled to retain as additional
servicing compensation any fee collected in connection with the permitted
transfer of a mortgaged property. See "Legal Aspects of Mortgage
Loans--Due-on-Sale and Due-on-Encumbrance."
SERVICING COMPENSATION AND PAYMENT OF EXPENSES
As described in the related prospectus supplement, a master servicer's
primary servicing compensation for a series of certificates will come from the
periodic payment to it of a specified portion of the interest payments on each
mortgage loan in the related trust. Because this compensation is based on a
percentage of the principal balance of each mortgage loan outstanding from time
to time, it will decrease with the amortization of the mortgage loans.
A master servicer's compensation may also include:
o an additional specified portion of the interest payments on each defaulted
mortgage loan serviced by the master servicer;
o a fixed percentage of some or all of the collections and proceeds received
on any defaulted mortgage loan for which it negotiated a work-out or that
it liquidated; and
o any other amounts specified in the related prospectus supplement.
To the extent provided in the related prospectus supplement, the master
servicer may retain, as additional compensation, all or a portion of late
payment charges, prepayment premiums, modification fees and other fees
collected from borrowers and any interest or other income that may be earned on
funds held in the certificate account. Any sub-servicer will receive a portion
of the master servicer's compensation as its sub-servicing compensation.
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In addition to amounts payable to any sub-servicer, a master servicer may
be required, to the extent provided in the related prospectus supplement, to
pay from amounts that represent its servicing compensation specified expenses
incurred in the administration of the related trust, including:
o payment of the fees and disbursements of independent accountants,
o payment of fees and disbursements of the trustee and any custodians, and
o payment of expenses incurred related to distributions and delivery of
reports to certificateholders.
Other expenses, including expenses related to mortgage loan defaults and
liquidations and, to the extent so provided in the related prospectus
supplement, interest on these expenses at the rate specified therein, and the
fees of any special servicer, may be borne by the trust.
Servicing advances will be reimbursable from future payments and other
collections, including related proceeds, in any event on or in respect of the
related mortgage loan or REO property. Servicing advances include customary,
reasonable and necessary out-of-pocket costs and expenses incurred by the
servicer or a replacement special servicer as a result of the servicing of a
mortgage loan after a default, delinquency or other unanticipated event or a
mortgage loan on which a default is imminent, or in connection with the
administration of any REO property.
EVIDENCE AS TO COMPLIANCE
Each pooling and servicing agreement will require that on or before a
specified date in each year, beginning the first specified date that is at
least a specified number of months after the cut-off date, a firm of
independent public accountants will furnish a statement to the related trustee
regarding the servicing of the mortgage loans. The statement will be to the
effect that, on the basis of an examination by that firm conducted
substantially in compliance with the Uniform Single Attestation Program for
Mortgage Bankers established by the Mortgage Bankers Association of America for
the servicing of commercial and multifamily mortgage loans or the Audit Program
for Mortgages serviced for FHLMC, the servicing of mortgage loans under the
agreements, including the related pooling and servicing agreement,
substantially similar to each other was conducted in compliance with the
agreements except for significant exceptions or errors in records that, in the
opinion of the firm, the Uniform Single Audit Program for Mortgage Bankers or
the Audit Program for mortgages serviced for FHLMC requires it to report. In
rendering its statement the firm may rely, regarding the matters relating to
the direct servicing of mortgage loans by sub-servicers, upon comparable
statements for examinations conducted substantially in compliance with the
Uniform Single Audit Program for Mortgage Bankers or the Audit Program for
mortgages serviced for FHLMC, rendered within one year of that statement, of
firms of independent public accountants for those sub-servicers which also have
been the subject of an examination.
Each pooling and servicing agreement will also provide that, on or before
a specified date in each year, beginning the first specified date that is at
least a specified number of months after the cut-off date, the master servicer
will deliver to the trustee
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a statement regarding its servicing. The statement will be signed by one or
more of its officers and be to the effect that, to the best knowledge of that
officer, the master servicer has fulfilled in all material respects its
obligations under the pooling and servicing agreement throughout the preceding
year. If, however, there has been a material default in the fulfillment of any
of its obligations, the statement will specify each known default and the
nature and status of the default. The statement may be provided as a single
form making the required statements for more than one pooling and servicing
agreement.
If provided in the related prospectus supplement, copies of the annual
accountants' statement and the annual statement of officers of a master
servicer may be obtained by certificateholders upon written request to the
trustee.
MATTERS REGARDING THE MASTER SERVICER AND THE DEPOSITOR
Any master servicer may have other normal business relationships with the
depositor or the depositor's affiliates. To the extent provided in the related
prospectus supplement, the master servicer for that series will not be
permitted to resign from its obligations and duties under the pooling and
servicing agreement unless performance of those duties is no longer permissible
under applicable law or unless there is a permitted transfer of servicing. No
resignation of the master servicer will become effective until the trustee or a
successor servicer has assumed the master servicer's obligations and duties
under the pooling and servicing agreement.
To the extent provided in the related prospectus supplement, each pooling
and servicing agreement will provide that neither the master servicer, the
depositor, nor any director, officer, employee or agent of the master servicer
or the depositor will be under any liability to the trust or the
certificateholders for any action taken or for refraining from taking any
action in good faith under the pooling and servicing agreement, or for errors
in judgment. No person, however, will be protected against any liability which
would otherwise be imposed by reason of willful misfeasance, bad faith or
negligence in the performance of duties or by reason of reckless disregard of
its obligations and duties.
To the extent provided in the related prospectus supplement, each pooling
and servicing agreement will further provide that the master servicer, the
depositor, and any director, officer, employee or agent of the master servicer
or the depositor is entitled to indemnification by the trust and will be held
harmless against any loss, liability or expense incurred in connection with any
legal action relating to the pooling and servicing agreement or the related
series of certificates, other than any loss, liability or expense related to
any specific mortgage loan or mortgage loans. No person, however, will be
protected against any loss, liability or expense otherwise reimbursable under
the pooling and servicing agreement or any loss, liability or expense incurred
by reason of willful misfeasance, bad faith or negligence in the performance of
duties thereunder or by reason of reckless disregard of obligations and duties
thereunder.
In addition, each pooling and servicing agreement will provide that
neither the master servicer nor the depositor will be obligated to appear in,
prosecute or defend any legal or administrative action that is not incidental
to its respective duties under the pooling and servicing agreement and that in
its opinion may involve it in any expense or liability. The master servicer or
the depositor may, however, in its discretion, undertake
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an action that it deems necessary or desirable for the rights and duties of the
parties to the pooling and servicing agreement and the interests of the
certificateholders. The legal expenses and costs of those actions and any
resulting liability will be covered by the trust, and the master servicer or
the depositor, as the case may be, will be reimbursed out of funds otherwise
distributable to certificateholders.
If provided in the related pooling and servicing agreement, any person
into which the master servicer may be merged or consolidated, any person
resulting from any merger or consolidation to which the master servicer is a
party or any person succeeding to the business of the master servicer will be
the successor of the master servicer under the pooling and servicing agreement,
provided that:
(1) the person is qualified to service mortgage loans on behalf of Federal
National Mortgage Association or FHLMC; and
(2) the merger, consolidation or succession does not adversely affect the
then-current ratings of the classes of certificates of the related series
that have been rated.
Notwithstanding the prohibition on its resignation, the master servicer
may assign its rights under the pooling and servicing agreement to any person
to whom the master servicer is transferring a substantial portion of its
mortgage servicing portfolio, provided clauses (1) and (2) above are satisfied.
The master servicer will then be released from its obligations under the
pooling and servicing agreement, other than liabilities and obligations
incurred by it before the time of the assignment.
EVENTS OF DEFAULT
If provided in the related prospectus supplement, events of default under
the pooling and servicing agreement in respect of a series of certificates,
will include:
o failure by the master servicer to make a required deposit to the
certificate account or, if the master servicer is so required, to
distribute to the holders of any class of certificates of the series any
required payment, for 5 or more days after written notice of the failure
is given to the master servicer by the trustee or the depositor; or to the
master servicer, the depositor and the trustee by the holders of
certificates of the class evidencing 25% or more of the aggregate
percentage interests of that class;
o failure by the master servicer duly to observe or perform in any material
respect any other of its covenants or agreements in the pooling and
servicing agreement for that series of certificates that continues
unremedied for 30 days after written notice of the failure is given to the
master servicer by the trustee or the depositor; or to the master
servicer, the depositor and the trustee by the holders of any class of
certificates of the series evidencing 25% or more of the aggregate
percentage interests of that class; and
o specified events of insolvency, readjustment of debt, marshaling of assets
and liabilities or similar proceedings regarding the master servicer and
specified actions by the master servicer indicating its insolvency or
inability to pay its obligations.
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Material variations to the foregoing events of default, other than to add
thereto or to make them more restrictive, will be specified in the related
prospectus supplement. A default under the terms of any MBS included in any
trust will not constitute an event of default under the related pooling and
servicing agreement.
RIGHTS UPON EVENT OF DEFAULT
As long as an event of default remains unremedied, either the depositor or
the trustee may, and at the direction of the holders of certificates evidencing
51% or more of the aggregate undivided interests, or, if so specified in the
related prospectus supplement, voting rights, in the related trust, the trustee
will, by written notification to the master servicer and to the depositor or
the trustee, as applicable, terminate all of the rights and obligations of the
master servicer under the pooling and servicing agreement covering that trust
and in and to the related mortgage loans and the proceeds thereof, other than
any rights of the master servicer as certificateholder and other than any
rights of the master servicer to payment or reimbursement for previously earned
servicing fees and outstanding advances. Then, the trustee or, upon notice to
the depositor and with the depositor's consent, its designee will succeed to
all responsibilities, duties and liabilities of the master servicer under that
pooling and servicing agreement, other than the obligation to purchase mortgage
loans, and will be entitled to similar compensation arrangements.
If the trustee would be obligated, but is unwilling to succeed the master
servicer, it may appoint, or if it is unable so to act, it shall appoint, or
petition a court of competent jurisdiction for the appointment of, a Federal
National Mortgage Association- or FHLMC-approved mortgage servicing institution
with a net worth of at least $10,000,000 to act as successor to the master
servicer under the pooling and servicing agreement, unless otherwise provided
in the pooling and servicing agreement. Pending the appointment, the trustee is
obligated to act in that capacity. The trustee and the successor may agree upon
the servicing compensation to be paid, which may not be greater than the
compensation to the initial master servicer under the pooling and servicing
agreement.
No certificateholder will have any right under a pooling and servicing
agreement to institute any proceeding under that pooling and servicing
agreement unless:
o the holder previously gave the trustee written notice of default and the
continuance thereof; and
o the holders of certificates of any class evidencing 25% or more of the
aggregate percentage interests constituting that class have:
o made written request upon the trustee to institute that proceeding in
its own name as trustee;
o offered to the trustee reasonable indemnity; and
o for 60 days after receipt of the request and indemnity, the trustee
has neglected or refused to institute the proceeding.
However, the trustee will be under no obligation to exercise any of the
trusts or powers vested in it by the pooling and servicing agreement or to
institute, conduct or
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defend any litigation under or in relation to it at the request, order or
direction of any of the holders of certificates covered by that pooling and
servicing agreement, unless those certificateholders have offered to the
trustee reasonable security or indemnity against the related costs, expenses
and liabilities that may be incurred.
AMENDMENT
Each pooling and servicing agreement may be amended by its parties,
without the consent of any of the certificateholders covered by that pooling
and servicing agreement,
(1) to cure any ambiguity,
(2) to correct or supplement any provision that may be inconsistent with any
other provision in the agreement or to correct any error,
(3) to change the timing, the nature or both, of deposits in the certificate
account, provided that:
o the change would not adversely affect in any material respect the
interests of any certificateholder, as evidenced by an opinion of
counsel; and
o the change would not adversely affect the then-current rating of any
rated classes of certificates, as evidenced by a letter from each
applicable rating agency,
(4) if a REMIC election has been made for the related trust, to modify,
eliminate or add to any of its provisions
o to the extent necessary or desirable to maintain the qualification of
the trust as a REMIC or to avoid or minimize the risk of imposition
of any tax on the related trust, provided that the trustee has
received an opinion of counsel to the effect that:
o the action is necessary or desirable to maintain the
qualification or to avoid or minimize that risk, and
o the action will not adversely affect in any material respect the
interests of any certificateholder covered by the pooling and
servicing agreement, or
o to restrict the transfer of the REMIC residual certificates, provided
that:
o the depositor has determined that the then-current ratings of
the classes of the certificates that have been rated will not be
adversely affected, as evidenced by a letter from each
applicable rating agency, and
o that the amendment will not give rise to any tax on the transfer
of the REMIC residual certificates to a non-permitted
transferee,
(5) to make any other provisions as to matters or questions arising under the
pooling and servicing agreement or any other change, provided that the
action will not adversely affect in any material respect the interests of
any certificateholder, or
(6) to amend specified provisions that are not material to holders of any
class of offered certificates.
Unless more specifically described in the related prospectus supplement,
the parties to a pooling and servicing agreement may amend it with the consent
of the holders of
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certificates of each class affected thereby evidencing, in each case, 66% or
more of the aggregate percentage interests constituting that class. The
amendment may be for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of that pooling and servicing
agreement or of modifying in any manner the rights of the certificateholders
covered by that pooling and servicing agreement, except that the amendment may
not:
o reduce in any manner the amount of, or delay the timing of, payments
received on mortgage loans that are required to be distributed on a
certificate of any class without the consent of the holder of that
certificate; or
o reduce the percentage of certificates of any class the holders of
which are required to consent to the amendment without the consent of
the holders of all certificates of that class covered by that pooling
and servicing agreement then outstanding.
Notwithstanding the foregoing, if a REMIC election has been made for the
related trust, the trustee will not be required to consent to any amendment to
a pooling and servicing agreement without having first received an opinion of
counsel to the effect that the amendment or the exercise of any power granted
to the master servicer, the depositor, the trustee or any other specified
person in accordance with the amendment will not result in the imposition of a
tax on the related trust or cause the trust to fail to qualify as a REMIC.
THE TRUSTEE
The trustee under each pooling and servicing agreement will be named in
the related prospectus supplement. The commercial bank, national banking
association, banking corporation or trust company that serves as trustee may
have typical banking relationships with the depositor and its affiliates.
DUTIES OF THE TRUSTEE
The trustee for each series of certificates will make no representation as
to the validity or sufficiency of the related pooling and servicing agreement,
the certificates or any underlying mortgage asset or related document. The
trustee will not be accountable for the use or application by or on behalf of
any master servicer or special servicer of any funds paid to the master
servicer or special servicer in respect of the certificates or the underlying
mortgage assets. If no event of default has occurred and is continuing, the
trustee for each series of certificates will be required to perform only those
duties specifically required under the related pooling and servicing agreement.
However, upon receipt of any of the various certificates, reports or other
instruments required to be furnished to it under the related pooling and
servicing agreement, a trustee will be required to examine those documents and
to determine whether they conform to the requirements of the agreement.
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MATTERS REGARDING THE TRUSTEE
To the extent described in the related prospectus supplement, the fees and
normal disbursements of any trustee may be the expense of the related master
servicer or other specified person or may be required to be borne by the
related trust.
Unless more specifically described in the related prospectus supplement,
the trustee for each series of certificates will be entitled to
indemnification, from amounts held in the certificate account for that series,
for any loss, liability or expense incurred by the trustee in connection with
the trustee's acceptance or administration of its trusts under the related
pooling and servicing agreement. Indemnification, however, will not extend to
any loss, liability or expense incurred by reason of willful misfeasance, bad
faith or negligence on the part of the trustee in the performance of its
obligations and duties under the agreement, or by reason of its reckless
disregard of those obligations or duties.
Unless more specifically described in the related prospectus supplement,
the trustee for each series of certificates will be entitled to execute any of
its trusts or powers under the related pooling and servicing agreement or
perform any of its duties under the agreement either directly or by or through
agents or attorneys.
RESIGNATION AND REMOVAL OF THE TRUSTEE
The trustee may resign at any time. The depositor will then be obligated
to appoint a successor trustee. The depositor may also remove the trustee and
appoint a successor trustee if the trustee ceases to be eligible to continue as
trustee under the pooling and servicing agreement or if the trustee becomes
insolvent. The holders of certificates evidencing 51% or more of the aggregate
undivided interests, or, if so specified in the related prospectus supplement,
voting rights, in the related trust may remove the trustee at any time. Any
resignation or removal of the trustee and appointment of a successor trustee
will not become effective until acceptance of the appointment by the successor
trustee.
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DESCRIPTION OF CREDIT SUPPORT
Credit support may be provided for one or more classes of the certificates
of any series, or for the related mortgage assets. Credit support may be in the
form of:
o a letter of credit,
o the subordination of one or more classes of certificates,
o the use of a pool insurance policy or guarantee insurance,
o the establishment of one or more reserve funds,
o another method of credit support described in the related prospectus
supplement, or
o any combination of these.
To the extent provided in the related prospectus supplement, any of the
forms of credit support may provide credit enhancement for one or more classes
or series.
Unless more specifically described in the related prospectus supplement
for a series of certificates, the credit support will not provide protection
against all risks of loss and will not guarantee payment to certificateholders
of all amounts to which they are entitled under the related pooling and
servicing agreement. If losses or shortfalls occur that exceed the amount
covered by the related credit support or that are of a type not covered by that
credit support, certificateholders will bear their allocable share of
deficiencies. Moreover, if a form of credit support covers the offered
certificates of more than one series and losses on the related mortgage assets
exceed the amount of the credit support, it is possible that the holders of
offered certificates of one or more series will be disproportionately benefited
by the credit support to the detriment of the holders of offered certificates
of one or more other series.
If credit support is provided for one or more classes of certificates of a
series, or for the related mortgage assets, the related prospectus supplement
will include a description of:
o the nature and amount of coverage under the credit support,
o any conditions to payment thereunder not otherwise described in this
prospectus,
o the conditions, if any, under which the amount of coverage under the
credit support may be reduced and under which the credit support may be
terminated or replaced, and
o the material provisions relating to the credit support.
The related prospectus supplement will provide information regarding the
obligor, if any, under any instrument of credit support. See "Risk
Factors--Credit support is limited."
SUBORDINATE CERTIFICATES
One or more classes of certificates of a series may be subordinate to one
or more other classes of certificates in entitlement to distributions on the
certificates. To the extent specified in the related prospectus supplement, the
rights of the holders of subordinate certificates to receive distributions from
the certificate account on any
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distribution date will be subordinated to the corresponding rights of the
holders of classes that are senior in entitlement. If so provided in the
related prospectus supplement, the subordination of a class may apply only if
specific types of losses or shortfalls occur. The related prospectus supplement
will provide information concerning the method and amount of subordination
provided by a class or classes of subordinate certificates in a series and the
circumstances under which the subordination will be available.
If the mortgage assets in any trust are divided into separate groups, each
supporting a separate class or classes of certificates of the related series,
credit support may be provided by cross-support provisions requiring that
distributions be made on senior certificates evidencing interests in one group
of mortgage assets before distributions on subordinate certificates evidencing
interests in a different group of mortgage assets within the trust. The
prospectus supplement for a series that includes a cross-support provision will
describe the manner and conditions for applying those provisions.
INSURANCE OR GUARANTEES FOR MORTGAGE LOANS
Mortgage loans included in a trust may be covered for some default risks
by insurance policies or guarantees. The related prospectus supplement will
describe the nature of the default risks and the extent of any coverage.
LETTER OF CREDIT
Deficiencies in amounts otherwise payable on certificates in a series or
classes may be covered by one or more letters of credit, issued by a bank or
other financial institution. Under a letter of credit, the letter of credit
bank will be obligated to honor draws thereunder in an aggregate fixed dollar
amount, net of unreimbursed payments thereunder, generally equal to a
percentage specified in the related prospectus supplement of the aggregate
principal balance of the mortgage assets on the related cut-off date or of the
initial aggregate certificate balance of one or more classes of certificates.
The letter of credit may permit draws only if specific types of losses and
shortfalls occur. The amount available under the letter of credit will, in all
cases, be reduced to the extent of the unreimbursed payments thereunder and may
otherwise be reduced as described in the related prospectus supplement. The
obligations of the letter of credit bank under the letter of credit for a
series of certificates will expire at the earlier of the date specified in the
related prospectus supplement or the termination of the trust.
CERTIFICATE INSURANCE AND SURETY BONDS
Deficiencies in amounts otherwise payable on certificates in a series or
classes may be covered by insurance policies or surety bonds provided by one or
more insurance companies or sureties. Those instruments may cover, for one or
more classes of certificates of the related series, timely distributions of
interest or distributions of principal on the basis of a schedule of principal
distributions provided in or determined in the manner specified in the related
prospectus supplement. The related prospectus supplement will describe any
limitations on the draws that may be made under any instrument.
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RESERVE FUNDS
Deficiencies in amounts otherwise payable on certificates in a series or
classes may be covered, to the extent of available funds, by one or more
reserve funds in which cash, a letter of credit, permitted investments, a
demand note or a combination thereof will be deposited, in the amounts
specified in the related prospectus supplement. The reserve fund for a series
may also be funded over time by a specified amount of some collections received
on the related mortgage assets.
Amounts on deposit in any reserve fund for a series will be applied for
the purposes, in the manner, and to the extent specified in the related
prospectus supplement. Reserve funds may be established to provide protection
only against specific types of losses and shortfalls. Following each
distribution date, amounts in a reserve fund in excess of any amount required
to be maintained therein may be released from the reserve fund under the
conditions and to the extent specified in the related prospectus supplement.
Amounts deposited in any reserve fund may be invested in permitted
investments. Unless more specifically described in the related prospectus
supplement, any reinvestment income or other gain from those investments will
be credited to the related reserve fund for that series, and any loss resulting
from those investments will be charged to that reserve fund. However, the
income may be payable to any related master servicer or another service
provider as additional compensation for its services. The reserve fund, if any,
for a series will not be a part of the trust unless we tell you otherwise in
the related prospectus supplement.
CREDIT SUPPORT FOR MBS
Any MBS included in the related trust or the related underlying mortgage
loans or both may be covered by one or more of the types of credit support
described in this prospectus. The related prospectus supplement will specify,
as to each form of credit support, the information indicated above for each
type of credit support, to the extent that information is material and
available.
LEGAL ASPECTS OF MORTGAGE LOANS
The following discussion contains general summaries of some legal aspects
of loans secured by commercial and multifamily residential properties. Because
these legal aspects are governed by applicable state law, which laws may differ
substantially, the summaries do not purport to be complete, to reflect the laws
of any particular state, or to encompass the laws of all states in which the
security for the mortgage loans, or mortgage loans underlying any MBS, is
situated. Accordingly, the summaries are qualified in their entirety by
reference to the applicable laws of those states. See "Description of the
Trust--Mortgage Loans." For purposes of the following discussion, mortgage loan
includes a mortgage loan underlying an MBS.
Each mortgage loan will be evidenced by a note or bond and secured by an
instrument granting a security interest in real property, which may be a
mortgage, deed of trust or a deed to secure debt, depending upon the prevailing
practice and law in the state in which the related mortgaged property is
located. Mortgages, deeds of trust and deeds to secure debt are collectively
referred to as mortgages in this prospectus. A
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mortgage creates a lien upon, or grants a title interest in, the real property
covered thereby, and represents the security for the repayment of the
indebtedness customarily evidenced by a promissory note.
The priority of the lien created or interest granted may depend on:
o the terms of the mortgage,
o the terms of separate subordination agreements or intercreditor agreements
with others that hold interests in the real property,
o the knowledge of the parties to the mortgage, and
o the order of recordation of the mortgage in the appropriate public
recording office.
The lien of a recorded mortgage will generally be subordinate to
later-arising liens for real estate taxes and assessments and other charges
imposed under governmental police powers.
TYPES OF MORTGAGE INSTRUMENTS
There are two parties to a mortgage: a mortgagor that is the borrower and
usually the owner of the subject property and a mortgagee that is the lender.
In contrast, a deed of trust is a three-party instrument, among a trustor that
is the equivalent of a borrower, a trustee to whom the real property is
conveyed, and a beneficiary that is the lender for whose benefit the conveyance
is made. Under a deed of trust, the trustor grants the property, irrevocably
until the debt is paid, in trust and typically with a power of sale, to the
trustee to secure repayment of the indebtedness evidenced by the related note.
A deed to secure debt typically has two parties, under which the borrower,
or grantor, conveys title to the real property to the grantee, or lender,
typically with a power of sale, until the debt is repaid. If the borrower is a
land trust, there is an additional party because legal title to the property is
held by a land trustee under a land trust agreement for the benefit of the
borrower. At origination of a mortgage loan involving a land trust, the
borrower may execute a separate undertaking to make payments on the mortgage
note. The land trustee is not personally liable for the mortgage note
obligation. The mortgagee's authority under a mortgage, the trustee's authority
under a deed of trust and the grantee's authority under a deed to secure debt
are governed by the express provisions of the related instrument, the law of
the state in which the real property is located, federal laws and, in some deed
of trust transactions, the directions of the beneficiary.
LEASES AND RENTS
Mortgages that encumber income-producing property often contain an
assignment of rents and leases and may be accompanied by a separate assignment
of rents and leases, under which the borrower assigns to the lender the
borrower's right, title and interest as landlord under each lease and the
income derived therefrom, while, unless rents are to be paid directly to the
lender, retaining a revocable license to collect the rents for so long as there
is no default. If the borrower defaults, the license terminates and the lender
is entitled to collect the rents. Local law may require that the lender take
possession of the property or obtain a court-appointed receiver or both before
becoming entitled to collect the rents.
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In most states, hotel and motel room rates are considered accounts
receivable under the Uniform Commercial Code; in cases where hotels or motels
constitute loan security, the rates are usually pledged by the borrower as
additional security for the loan. In general, the lender must file financing
statements to perfect its security interest in the room rates and must file
continuation statements, usually every five years, to maintain perfection of
the security interest. Mortgage loans secured by hotels or motels may be
included in a trust even if the security interest in the room rates was not
perfected or the requisite UCC filings were allowed to lapse. Even if the
lender's security interest in room rates is perfected under applicable
non-bankruptcy law, it will usually be required to commence a foreclosure
action or otherwise take possession of the property to enforce its rights to
collect the room rates following a default. In the bankruptcy setting, however,
the lender will be stayed from enforcing its rights to collect room rates, but
those room rates, in light of revisions to the Bankruptcy Code which are
effective for all bankruptcy cases commenced on or after October 22, 1994,
constitute cash collateral and therefore cannot be used by the bankruptcy
debtor without a hearing or lender's consent and unless the lender's interest
in the room rates is given adequate protection. Adequate protection may take
the form of cash payment for otherwise encumbered funds or a replacement lien
on unencumbered property, in either case equal in value to the amount of room
rates that the debtor proposes to use, or other similar relief. See
"--Bankruptcy Laws."
PERSONALTY
In the case of some types of mortgaged properties, such as hotels, motels
and nursing homes, personal property, to the extent owned by the borrower and
not previously pledged, may constitute a significant portion of the property's
value as security. The creation and enforcement of liens on personal property
are governed by the UCC. Accordingly, if a borrower pledges personal property
as security for a mortgage loan, the lender usually must file UCC financing
statements to perfect its security interest therein, and must file continuation
statements, usually every five years, to maintain that perfection. Mortgage
loans secured in part by personal property may be included in a trust even if
the security interest in the personal property was not perfected or the
requisite UCC filings were allowed to lapse.
FORECLOSURE
Foreclosure is a legal procedure that allows the lender to recover its
mortgage debt by enforcing its rights and available legal remedies under the
mortgage. If the borrower defaults in payment or performance of its obligations
under the note or mortgage, the lender has the right to institute foreclosure
proceedings to sell the real property at public auction to satisfy the
indebtedness.
Foreclosure procedures vary from state to state. Two primary methods of
foreclosing a mortgage are judicial foreclosure, involving court proceedings,
and non-judicial foreclosure under a power of sale granted in the mortgage
instrument. Other foreclosure procedures are available in some states, but they
are either infrequently used or available only in limited circumstances.
A foreclosure action is subject to most of the delays and expenses of
other lawsuits if defenses are raised or counterclaims are interposed, and
sometimes requires several years to complete.
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Judicial Foreclosure.
A judicial foreclosure proceeding is conducted in a court having
jurisdiction over the mortgaged property. Typically, the action is initiated by
the service of legal pleadings upon all parties having a subordinate interest
of record in the real property and all parties in possession of the property,
under leases or otherwise, whose interests are subordinate to the mortgage.
Delays in completion of the foreclosure may occasionally result from
difficulties in locating defendants. When the lender's right to foreclose is
contested, the legal proceedings can be time-consuming. Upon successful
completion of a judicial foreclosure proceeding, the court typically issues a
judgment of foreclosure and appoints a referee or other officer to conduct a
public sale of the mortgaged property, the proceeds of which are used to
satisfy the judgment. Sales are made in accordance with procedures that vary
from state to state.
Equitable and Other Limitations on Enforceability of Provisions.
United States courts have traditionally imposed general equitable
principles to limit the remedies available to lenders in foreclosure actions.
These principles are designed to relieve borrowers from the effects of mortgage
defaults perceived as harsh or unfair. Relying on these principles, a court may
alter the specific terms of a loan to the extent it considers necessary to
prevent or remedy an injustice, undue oppression or overreaching, or may
require the lender to undertake affirmative actions to determine the cause of
the borrower's default and the likelihood that the borrower will be able to
reinstate the loan. In some cases, courts have substituted their judgment for
the lender's and have required that lenders reinstate loans or recast payment
schedules to accommodate borrowers who are suffering from a temporary financial
disability. In other cases, courts have limited the right of the lender to
foreclose in the case of a nonmonetary default, such as a failure to adequately
maintain the mortgaged property or an impermissible further encumbrance of the
mortgaged property. Finally, some courts have addressed the issue of whether
federal or state constitutional provisions reflecting due process concerns for
adequate notice require that a borrower receive notice in addition to
statutorily-prescribed minimum notice. For the most part, these cases have
upheld the reasonableness of the notice provisions or have found that a public
sale under a mortgage providing for a power of sale does not involve sufficient
state action to trigger constitutional protections.
In addition, some states may have statutory protection such as the right
of the borrower to reinstate mortgage loans after commencement of foreclosure
proceedings but before a foreclosure sale.
Non-Judicial Foreclosure/Power of Sale.
In states permitting non-judicial foreclosure proceedings, foreclosure of
a deed of trust is typically accomplished by a non-judicial trustee's sale
under a power of sale typically granted in the deed of trust. A power of sale
may also be contained in any other type of mortgage instrument if applicable
law so permits. A power of sale under a deed of trust allows a non-judicial
public sale to be conducted typically following a request from the
beneficiary/lender to the trustee to sell the property upon default by the
borrower and after notice of sale is given in accordance with the terms of the
mortgage and applicable state law. In some states, before the sale, the trustee
under the deed of
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trust must record a notice of default and notice of sale and send a copy to the
borrower and to any other party who has recorded a request for a copy of a
notice of default and notice of sale. In addition, in some states the trustee
must provide notice to any other party having an interest of record in the real
property, including junior lienholders. A notice of sale must be posted in a
public place and, in most states, published for a specified period of time in
one or more newspapers. The borrower or junior lienholder may then have the
right, during a reinstatement period required in some states, to cure the
default by paying the entire actual amount in arrears, without regard to the
acceleration of the indebtedness, plus the lender's expenses incurred in
enforcing the obligation. In other states, the borrower or the junior
lienholder is not provided a period to reinstate the loan, but has only the
right to pay off the entire debt to prevent the foreclosure sale. Typically,
state law governs the procedure for public sale, the parties entitled to
notice, the method of giving notice and the applicable time periods.
Public Sale.
A third party may be unwilling to purchase a mortgaged property at a
public sale because of the difficulty in determining the exact status of title
to the property due to, among other things, redemption rights that may exist
and because of the possibility that physical deterioration of the property may
have occurred during the foreclosure proceedings. Therefore, it is common for
the lender to purchase the mortgaged property for an amount equal to the
secured indebtedness and accrued and unpaid interest plus the expenses of
foreclosure, in which event the borrower's debt will be extinguished, or for a
lesser amount to preserve its right to seek a deficiency judgment if it is
available under state law and under the terms of the mortgage loan documents.
The mortgage loans, however, are expected to be non-recourse. See "Risk
Factors--Investment in commercial and multifamily mortgage loans is riskier
than investment in single-family mortgage loans."
Thereafter, subject to the borrower's right in some states to remain in
possession during a redemption period, the lender will become the owner of the
property and have both the benefits and burdens of ownership, including the
obligation to pay debt service on any senior mortgages, to pay taxes, to obtain
casualty insurance and to make repairs as are necessary to render the property
suitable for sale. The costs of operating and maintaining a commercial or
multifamily residential property may be significant and may be greater than the
income derived from that property. The lender also will commonly obtain the
services of a real estate broker and pay the broker's commission in connection
with the sale or lease of the property. Depending upon market conditions, the
ultimate proceeds of the sale of the property may not equal the lender's
investment in the property. Moreover, because of the expenses associated with
acquiring, owning and selling a mortgaged property, a lender could realize an
overall loss on a mortgage loan even if the mortgaged property is sold at
foreclosure, or resold after it is acquired through foreclosure, for an amount
equal to the full outstanding principal amount of the loan plus accrued
interest.
The holder of a junior mortgage that forecloses on a mortgaged property
does so subject to senior mortgages and any other prior liens, and may be
obliged to keep senior mortgage loans current to avoid foreclosure of its
interest in the property. In addition, if the foreclosure of a junior mortgage
triggers the enforcement of a due-on-sale clause
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contained in a senior mortgage, the junior mortgagee could be required to pay
the full amount of the senior mortgage indebtedness or face foreclosure.
Rights of Redemption.
The purposes of a foreclosure action are to enable the lender to realize
upon its security and to bar the borrower, and all persons who have interests
in the property that are subordinate to that of the foreclosing lender, from
exercise of their equity of redemption. The doctrine of equity of redemption
provides that, until the property encumbered by a mortgage has been sold in
accordance with a properly conducted foreclosure and foreclosure sale, those
having interests that are subordinate to that of the foreclosing lender have an
equity of redemption and may redeem the property by paying the entire debt with
interest. Those having an equity of redemption must be made parties and joined
in the foreclosure proceeding in order for their equity of redemption to be
terminated.
The equity of redemption is a common-law, non-statutory right which should
be distinguished from post-sale statutory rights of redemption. In some states,
after sale under a deed of trust or foreclosure of a mortgage, the borrower and
foreclosed junior lienors are given a statutory period in which to redeem the
property. In some states, statutory redemption may occur only upon payment of
the foreclosure sale price. In other states, redemption may be permitted if the
former borrower pays only a portion of the sums due. The effect of a statutory
right of redemption is to diminish the ability of the lender to sell the
foreclosed property because the exercise of a right of redemption would defeat
the title of any purchaser through a foreclosure. Consequently, the practical
effect of the redemption right is to force the lender to maintain the property
and pay the expenses of ownership until the redemption period has expired. In
some states, a post-sale statutory right of redemption may exist following a
judicial foreclosure, but not following a trustee's sale under a deed of trust.
Anti-Deficiency Legislation.
Some or all of the mortgage loans may be nonrecourse loans, as to which
recourse in the case of default will be limited to the mortgaged property and
other assets, if any, that were pledged to secure the mortgage loan. However,
even if a mortgage loan by its terms provides for recourse to the borrower's
other assets, a lender's ability to realize upon those assets may be limited by
state law. For example, in some states a lender cannot obtain a deficiency
judgment against the borrower following foreclosure or sale under a deed of
trust. A deficiency judgment is a personal judgment against the former borrower
equal to the difference between the net amount realized upon the public sale of
the real property and the amount due to the lender. Other statutes may require
the lender to exhaust the security afforded under a mortgage before bringing a
personal action against the borrower. In other states, the lender has the
option of bringing a personal action against the borrower on the debt without
first exhausting that security; however, in some of those states, the lender,
following judgment on the personal action, may be deemed to have elected a
remedy and thus may be precluded from foreclosing upon the security.
Consequently, lenders in those states where an election of remedy provision
exists will usually proceed first against the security. Finally, other
statutory provisions, designed to protect borrowers from exposure to large
deficiency judgments
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that might result from bidding at below-market values at the foreclosure sale,
limit any deficiency judgment to the excess of the outstanding debt over the
fair market value of the property at the time of the sale.
Leasehold Considerations.
Mortgage loans may be secured by a mortgage on the borrower's leasehold
interest in a ground lease. Leasehold mortgage loans are subject to risks not
associated with mortgage loans secured by a lien on the fee estate of the
borrower. The most significant of these risks is that if the borrower's
leasehold were to be terminated upon a lease default, the leasehold mortgagee
would lose its security. This risk may be lessened if the ground lease requires
the lessor to give the leasehold mortgagee notices of lessee defaults and an
opportunity to cure them, permits the leasehold estate to be assigned to and by
the leasehold mortgagee or the purchaser at a foreclosure sale, and contains
other protective provisions typically included in a mortgageable ground lease.
Some mortgage loans, however, may be secured by ground leases which do not
contain these provisions.
Cross-Collateralization.
Mortgage loans may be secured by more than one mortgage covering
properties located in more than one state. Because of various state laws
governing foreclosure or the exercise of a power of sale and because, in
general, foreclosure actions are brought in state court and the courts of one
state cannot exercise jurisdiction over property in another state, it may be
necessary upon a default under a cross-collateralized mortgage loan to
foreclose on the related mortgages in a particular order rather than
simultaneously to ensure that the lien of the mortgages is not impaired or
released.
BANKRUPTCY LAWS
Operation of the Bankruptcy Code and related state laws may interfere with
or affect the ability of a lender to realize upon collateral or to enforce a
deficiency judgment. For example, under the Bankruptcy Code, virtually all
actions, including foreclosure actions and deficiency judgment proceedings, to
collect a debt are automatically stayed upon the filing of the bankruptcy
petition and, often, no interest or principal payments are made during the
course of the bankruptcy case. The delay and the consequences thereof caused by
the automatic stay can be significant. Also, under the Bankruptcy Code, the
filing of a petition in bankruptcy by or on behalf of a junior lienor may stay
the senior lender from taking action to foreclose out the junior lien.
Under the Bankruptcy Code, if specific substantive and procedural
safeguards protective of the lender are met, the amount and terms of a mortgage
loan secured by a lien on property of the debtor may be modified under some
circumstances. For example, the outstanding amount of the loan may be reduced
to the then-current value of the property, with a corresponding partial
reduction of the amount of lender's security interest, under a confirmed plan
or lien avoidance proceeding, thus leaving the lender a general unsecured
creditor for the difference between that value and the outstanding balance of
the loan. Other modifications may include the reduction in the amount of each
scheduled payment, by means of a reduction in the rate of interest or an
alteration of the repayment schedule or both, with or without affecting the
unpaid principal
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balance of the loan, or by an extension, or shortening, of the term to
maturity. Some bankruptcy courts have approved plans, based on the particular
facts of the reorganization case, that effected the cure of a mortgage loan
default by paying arrearage over a number of years. Also, a bankruptcy court
may permit a debtor, through its rehabilitative plan, to reinstate a loan
mortgage payment schedule even if the lender has obtained a final judgment of
foreclosure before the filing of the debtor's petition.
Federal bankruptcy law may also have the effect of interfering with or
affecting the ability of a secured lender to enforce the borrower's assignment
of rents and leases related to the mortgaged property. Under the Bankruptcy
Code, a lender may be stayed from enforcing the assignment, and the legal
proceedings necessary to resolve the issue could be time-consuming, with
resulting delays in the lender's receipt of the rents. Recent amendments to the
Bankruptcy Code, however, may minimize the impairment of the lender's ability
to enforce the borrower's assignment of rents and leases. In addition to the
inclusion of hotel revenues within the definition of cash collateral as noted
previously in the section entitled "--Leases and Rents," the amendments provide
that a pre-petition security interest in rents or hotel revenues is designed to
overcome those cases holding that a security interest in rents is unperfected
under the laws of some states until the lender has taken some further action,
such as commencing foreclosure or obtaining a receiver before activation of the
assignment of rents.
If a borrower's ability to make payment on a mortgage loan is dependent on
its receipt of rent payments under a lease of the related property, that
ability may be impaired by the commencement of a bankruptcy case relating to a
lessee under the lease. Under the Bankruptcy Code, the filing of a petition in
bankruptcy by or on behalf of a lessee results in a stay in bankruptcy against
the commencement or continuation of any state court proceeding for past due
rent, for accelerated rent, for damages or for a summary eviction order with
respect to a default under the lease that occurred before the filing of the
lessee's petition. In addition, the Bankruptcy Code provides that a trustee or
debtor-in-possession may, subject to approval of the court,
o assume the lease and retain it or assign it to a third party, or
o reject the lease.
If the lease is assumed, the trustee or debtor-in-possession, or assignee,
if applicable, must cure any defaults under the lease, compensate the lessor
for its losses and provide the lessor with "adequate assurance" of future
performance. These remedies may be insufficient, and any assurances provided to
the lessor may, in fact, be inadequate. If the lease is rejected, the lessor
will be treated as an unsecured creditor as to its claim for damages for
termination of the lease. The Bankruptcy Code also limits a lessor's damages
for lease rejection to the rent reserved by the lease, without regard to
acceleration, for the greater of one year, or 15%, not to exceed three years,
of the remaining term of the lease.
Under federal and most state fraudulent conveyance statutes, a lien
granted by a borrower to secure repayment of another borrower's mortgage loan
could be voided if a court were to determine that:
o the borrower was insolvent at the time of granting the lien, was rendered
insolvent by the granting of the lien, or was left with inadequate capital
or was unable to pay its debts as they matured; and
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o when it allowed its mortgaged property to be encumbered by a lien securing
the entire indebtedness represented by the other mortgage loan, the
borrower did not receive fair consideration or reasonably equivalent value
in return.
ENVIRONMENTAL CONSIDERATIONS
A lender may be subject to environmental risks when taking a security
interest in real property. Of particular concern may be properties that are or
have been used for industrial, manufacturing, military or disposal activity.
Environmental risks include the possible diminution of the value of a
contaminated property or, as discussed below, potential liability for clean-up
costs or other remedial actions that could exceed the value of the property or
the amount of the lender's loan. A lender may decide to abandon a contaminated
mortgaged property as collateral for its loan rather than foreclose and risk
liability for clean-up costs.
Superlien Laws.
Under the laws of many states, contamination on a property may give rise
to a lien on the property for clean-up costs. In several states, that lien has
priority over all existing liens, including those of existing mortgages. In
these states, the lien of a mortgage may lose its priority to a "superlien."
CERCLA.
The federal Comprehensive Environmental Response, Compensation and
Liability Act of 1980 or CERCLA, imposes strict liability on present and past
"owners" and "operators" of contaminated real property for the costs of
clean-up. A secured lender may be liable as an "owner" or "operator" of a
contaminated mortgaged property if agents or employees of the lender have
participated in the management of the mortgaged property or the operations of
the borrower. Liability may exist even if the lender did not cause or
contribute to the contamination and regardless of whether the lender has
actually taken possession of a mortgaged property through foreclosure, deed in
lieu of foreclosure or otherwise. Moreover, liability is not limited to the
original or unamortized principal balance of a loan or to the value of the
property securing a loan. Excluded from CERCLA's definition of "owner" or
"operator," however, is a person "who without participating in the management
of the facility, holds indicia of ownership primarily to protect his security
interest." This is the so called "secured creditor exemption."
The Asset Conservation, Lender Liability and Deposit Insurance Act of 1996
or the Act amended, among other things, the provisions of CERCLA for lender
liability and the secured creditor exemption. The Act offers substantial
protection to lenders by defining the activities in which a lender can engage
and still have the benefit of the secured creditor exemption. In order for a
lender to be deemed to have participated in the management of a mortgaged
property, the lender must actually participate in the operational affairs of
the property of the borrower. The Act provides that "merely having the capacity
to influence, or unexercised right to control" operations does not constitute
participation in management. A lender will lose the protection of the secured
creditor exemption only if it exercises decision-making control over the
borrower's environmental compliance and hazardous substance handling and
disposal practices, or
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assumes day-to-day management of all operational functions of the mortgaged
property. The Act also provides that a lender will continue to have the benefit
of the secured creditor exemption even if it forecloses on a mortgaged
property, purchases it at a foreclosure sale or accepts a deed-in-lieu of
foreclosure provided that the lender seeks to sell the mortgaged property at
the earliest practicable commercially reasonable time on commercially
reasonable terms.
Other Federal and State Laws.
Many states have statutes similar to CERCLA, and not all of those statutes
provide for a secured creditor exemption. In addition, under federal law, there
is potential liability relating to hazardous wastes and underground storage
tanks under the federal Resource Conservation and Recovery Act or RCRA.
In addition, the definition of "hazardous substances" under CERCLA
specifically excludes petroleum products. Subtitle I of RCRA governs
underground petroleum storage tanks. Under the Act the protections accorded to
lenders under CERCLA are also accorded to the holders of security interests in
underground storage tanks. It should be noted, however, that liability for
cleanup of petroleum contamination may be governed by state law, which may not
provide for any specific protection for secured creditors.
In a few states, transfers of some types of properties are conditioned
upon cleanup of contamination before transfer. In these cases, a lender that
becomes the owner of a property through foreclosure, deed in lieu of
foreclosure or otherwise, may be required to clean up the contamination before
selling or otherwise transferring the property.
Beyond statute-based environmental liability, there exist common law
causes of action, for example, actions based on nuisance or on toxic tort
resulting in death, personal injury or damage to property, related to hazardous
environmental conditions on a property. While it may be more difficult to hold
a lender liable in those cases, unanticipated or uninsured liabilities of the
borrower may jeopardize the borrower's ability to meet its loan obligations.
Additional Considerations.
The cost of remediating hazardous substance contamination at a property
can be substantial. If a lender becomes liable, it can bring an action for
contribution against the owner or operator who created the environmental
hazard, but that individual or entity may be without substantial assets.
Accordingly, it is possible that those costs could become a liability of the
trust and result in a loss to certificateholders.
To reduce the likelihood of a loss, unless we tell you otherwise in the
related prospectus supplement, the pooling and servicing agreement will provide
that the master servicer, acting on behalf of the trustee, may not acquire
title to a mortgaged property or take over its operation unless the master
servicer, based solely, as to environmental matters, on a report prepared by a
person who regularly conducts environmental audits, has made the determination
that it is appropriate to do so, as described under "The Pooling and Servicing
Agreements--Realization Upon Defaulted Mortgage Loans."
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If a lender forecloses on a mortgage secured by a property, the operations
on which are subject to environmental laws and regulations, the lender will be
required to operate the property in accordance with those laws and regulations.
Compliance may entail substantial expense, especially in the case of industrial
or manufacturing properties.
In addition, a lender may be obligated to disclose environmental
conditions on a property to government entities and to prospective buyers,
including prospective buyers at a foreclosure sale or following foreclosure.
Disclosure may decrease the amount that prospective buyers are willing to pay
for the affected property, sometimes substantially, and thereby decrease the
ability of the lender to recoup its investment in a loan upon foreclosure.
Environmental Site Assessments.
In most cases, an environmental site assessment of each mortgaged property
will have been performed in connection with the origination of the related
mortgage loan or at some time before the issuance of the related certificates.
Environmental site assessments, however, vary considerably in their content,
quality and cost. Even when adhering to good professional practices,
environmental consultants will sometimes not detect significant environmental
problems because to do an exhaustive environmental assessment would be far too
costly and time-consuming to be practical.
DUE-ON-SALE AND DUE-ON-ENCUMBRANCE
Some of the mortgage loans may contain due-on-sale and due-on-encumbrance
clauses that purport to permit the lender to accelerate the maturity of the
loan if the borrower transfers or encumbers the related mortgaged property. In
recent years, court decisions and legislative actions placed substantial
restrictions on the right of lenders to enforce those clauses in many states.
However, the Garn-St Germain depository Institutions Act of 1982 generally
preempts state laws that prohibit the enforcement of due-on-sale clauses and
permits lenders to enforce these clauses in accordance with their terms,
subject to some limitations as provided in the Garn Act and the regulations
promulgated thereunder. Accordingly, a master servicer may nevertheless have
the right to accelerate the maturity of a mortgage loan that contains a
due-on-sale provision upon transfer of an interest in the property, without
regard to the master servicer's ability to demonstrate that a sale threatens
its legitimate security interest.
SUBORDINATE FINANCING
The terms of some of the mortgage loans may not restrict the ability of
the borrower to use the mortgaged property as security for one or more
additional loans, or the restrictions may be unenforceable. Where a borrower
encumbers a mortgaged property with one or more junior liens, the senior lender
is subjected to additional risk. First, the borrower may have difficulty
servicing and repaying multiple loans. Moreover, if the subordinate financing
permits recourse to the borrower, as is frequently the case, and the senior
loan does not, a borrower may have more incentive to repay sums due on the
subordinate loan. Second, acts of the senior lender that prejudice the junior
lender or impair the junior lender's security may create a superior equity in
favor of the junior lender. For example, if the borrower and the senior lender
agree to an increase in the principal amount of or the interest rate payable on
the senior loan, the senior
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lender may lose its priority to the extent any existing junior lender is harmed
or the borrower is additionally burdened. Third, if the borrower defaults on
either or both of the senior loan and any junior loan or loans, the existence
of junior loans and actions taken by junior lenders can impair the security
available to the senior lender and can interfere with or delay the taking of
action by the senior lender. Moreover, the bankruptcy of a junior lender may
operate to stay foreclosure or similar proceedings by the senior lender.
DEFAULT INTEREST AND LIMITATIONS ON PREPAYMENTS
Notes and mortgages may contain provisions that obligate the borrower to
pay a late charge or additional interest if payments are not timely made, and
in some circumstances, may prohibit prepayments for a specified period or
condition prepayments upon the borrower's payment of prepayment fees or yield
maintenance penalties or both. In some states, there are or may be specific
limitations upon the late charges which a lender may collect from a borrower
for delinquent payments. Some states also limit the amounts that a lender may
collect from a borrower as an additional charge if the loan is prepaid. In
addition, the enforceability of provisions that provide for prepayment fees or
penalties upon an involuntary prepayment is unclear under the laws of many
states.
APPLICABILITY OF USURY LAWS
Title V of the Depository Institutions Deregulation and Monetary Control
Act of 1980 provides that state usury limitations do not apply to some types of
residential, including multifamily, first mortgage loans originated by
specified lenders after March 31, 1980. Title V authorized any state to
reimpose interest rate limits by adopting, before April 1, 1983, a law or
constitutional provision that expressly rejects application of the federal law.
In addition, even where Title V is not so rejected, any state is authorized by
the law to adopt a provision limiting discount points or other charges on
mortgage loans covered by Title V. Some states have taken action to reimpose
interest rate limits or to limit discount points or other charges or both.
No mortgage loan originated in any state in which application of Title V
has been expressly rejected or a provision limiting discount points or other
charges has been adopted, will, if originated after that rejection or adoption,
be eligible for inclusion in a trust unless:
o the mortgage loan provides for the interest rate, discount points and
charges as are permitted in that state, or
o the mortgage loan provides that its terms are to be construed in
accordance with the laws of another state under which the interest rate,
discount points and charges would not be usurious and the borrower's
counsel has rendered an opinion that the choice of law provision would be
given effect.
SOLDIERS' AND SAILORS' CIVIL RELIEF ACT OF 1940
Under the terms of the Soldiers' and Sailors' Civil Relief Act of 1940, a
borrower who enters military service after the origination of the borrower's
mortgage loan, including a borrower who was in reserve status and is called to
active duty after
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origination of the mortgage loan, may not be charged interest, including fees
and charges, above an annual rate of 6% during the period of the borrower's
active duty status, unless a court orders otherwise upon application of the
lender. The Relief Act applies to individuals who are members of the Army,
Navy, Air Force, Marines, National Guard, Reserves, Coast Guard and officers of
the U.S. Public Health Service assigned to duty with the military. Because the
Relief Act applies to individuals who enter military service, including
reservists who are called to active duty, after origination of the related
mortgage loan, no information can be provided as to the number of loans with
individuals as borrowers that may be affected by the Relief Act.
Application of the Relief Act would adversely affect, for an indeterminate
period of time, the ability of a master servicer or special servicer to collect
full amounts of interest on affected mortgage loans. Any shortfalls in interest
collections resulting from the application of the Relief Act would result in a
reduction of the amounts distributable to the holders of the related series of
certificates, and would not be covered by advances or, unless we tell you
otherwise in the related prospectus supplement, any form of credit support
provided in connection with the certificates. In addition, the Relief Act
imposes limitations that would impair the ability of a master servicer or
special servicer to foreclose on an affected mortgage loan during the
borrower's period of active duty status, and, under some circumstances, during
an additional three month period thereafter.
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FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of the material federal income tax consequences
of the purchase, ownership and disposition of offered certificates. The summary
is based on current provisions of the Internal Revenue Code of 1986, called the
Code, as well as Treasury regulations and administrative and judicial rulings
and practice. The current tax laws and regulations, rulings and court decisions
may be changed, possibly retroactively. Any of these changes could alter or
modify the validity of the statements and conclusions set forth below. This
summary does not address all federal income tax matters that may be relevant to
particular holders. For example, it does not address all relevant tax
consequences to investors subject to special rules under the federal income tax
laws, such as
o banks,
o insurance companies,
o tax-exempt organizations,
o electing large partnerships,
o dealers in securities or currencies,
o mutual funds,
o REITs,
o RICs,
o S corporations,
o estates and trusts,
o investors that hold the certificates as part of a hedge, straddle,
integrated or conversion transaction, or
o holders whose "functional currency" is not the United States dollar.
Additionally, this summary is addressed only to original purchasers of the
certificates who are United States investors, and who hold the certificates as
capital assets within the meaning of Section 1221 of the Code. Further, it does
not address alternative minimum tax consequences or the indirect effects on the
holders of equity interests in an entity that is a beneficial owner of the
certificates. We recommend that you consult your own tax advisers about the
federal, state, local, or other tax consequences of the purchase, ownership and
disposition of the certificates.
The master servicer or the trustee may elect to have a trust, or a portion
of the trust, treated as a "real estate mortgage investment conduit", called a
REMIC under Sections 860A through 860G of the Code, referred to in this summary
as the REMIC Provisions. Beneficial ownership interests in a trust that has
made a REMIC election are referred to in this summary as REMIC certificates,
and are divided into regular interests, called REMIC regular certificates and
residual interests, called REMIC residual certificates. The prospectus
supplement for each series of certificates will indicate whether a REMIC
election(s) will be made for the related trust and, if an election is to be
made, will identify all regular interests and residual interests in the
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REMIC. If a REMIC election will not be made for a trust, the federal income tax
consequences of the purchase, ownership and disposition of the related
certificates will be provided in the related prospectus supplement. In the
following summary, references to a certificateholder or a holder are to the
beneficial owner of a certificate.
The following discussion applies only to offered certificates. Further,
this discussion applies only if the mortgage assets held by a trust consisting
solely of mortgage loans. If other mortgage assets, including REMIC
certificates and mortgage pass-through certificates, are to be held by a trust,
the tax consequences of the inclusion of these assets will be disclosed in the
related prospectus supplement. In addition, if cash flow agreements, other than
guaranteed investment contracts, are included in a trust, the tax consequences
associated with these cash flow agreements also will be disclosed in the
related prospectus supplement. See "Description of the Trust--Cash Flow
Agreements."
Additionally, the following discussion is based in part upon the rules
governing original issue discount, called "OID", that are provided in Sections
1271-1273 and 1275 of the Code and in the Treasury regulations issued
thereunder, called the "OID Regulations," and in part upon the "REMIC
Provisions" and the Treasury regulations issued thereunder, called the "REMIC
Regulations." The OID Regulations do not adequately address some issues
relevant to, and in some instances provide that they are not applicable to,
securities like the certificates.
REMICS
Classification of REMICs.
Upon the issuance of each series of REMIC certificates, counsel to the
depositor will deliver its opinion that, assuming compliance with all
provisions of the related pooling and servicing agreement, the related trust,
or each applicable portion of the trust, will qualify as a REMIC and the REMIC
certificates issued by the REMIC will be considered to evidence ownership of
REMIC regular certificates or REMIC residual certificates in that REMIC within
the meaning of the REMIC Provisions.
If an entity electing to be treated as a REMIC fails to comply with one or
more of the requirements for REMIC status during any taxable year, the entity
will not be treated as a REMIC for that year or for any following year. If the
electing entity is not a REMIC, the entity may be taxable as a corporation
under Treasury regulations, and the related REMIC certificates may not be
accorded the status or given the tax treatment described below. Although the
Code authorizes the Treasury Department to issue regulations providing relief
if there is an inadvertent termination of REMIC status, these regulations have
not been issued. If relief is provided, it may be accompanied by sanctions,
including the imposition of a corporate tax on all or a portion of the trust's
income for the period in which the requirements for REMIC status are not
satisfied. The pooling and servicing agreement related to each REMIC will
include provisions designed to maintain the trust's status as a REMIC under the
REMIC Provisions. It is not anticipated that the status of any trust as a REMIC
will be inadvertently terminated.
Tiered REMIC Structures.
For some series of REMIC Certificates, two or more separate elections may
be made to treat portions of the trust as REMICs, called "Tiered REMICs," for
federal
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income tax purposes. Upon the issuance of any series of REMIC Certificates
representing an interest in a Tiered REMIC, counsel to the depositor will
deliver its opinion that, assuming compliance with all provisions of the
related pooling and servicing agreement, the Tiered REMICs will each qualify as
a REMIC and the REMIC certificates issued by the Tiered REMICs will be
considered to evidence ownership of REMIC regular certificates or REMIC
residual certificates in the related REMIC within the meaning of the REMIC
Provisions.
Taxation of Owners of REMIC Regular Certificates.
Except as otherwise stated in this discussion, the certificates of each
series that constitute regular interests in a REMIC, called REMIC regular
certificates, will be treated for federal income tax purposes as debt
instruments issued by the REMIC and not as ownership interests in the REMIC or
its assets. Further, if you are a holder of a REMIC regular certificate, and
you otherwise report income under a cash method of accounting, you will be
required to report income for REMIC regular certificates under an accrual
method.
Original Issue Discount. Some REMIC regular certificates may be issued
with OID, within the meaning of Section 1273(a) of the Code. If you hold REMIC
regular certificates issued with OID, you will generally be required to include
OID in income as it accrues, under the method described below, in advance of
the receipt of the cash on that income. In addition, the Code provides special
rules for REMIC regular certificates and other debt instruments issued with
OID. Regulations have not been issued under these rules.
The Code requires that a prepayment assumption be used for mortgage loans
held by a REMIC in computing the accrual of OID on REMIC regular certificates
issued by that REMIC, and that adjustments be made in the amount and rate of
accrual of the OID to reflect differences between the actual prepayment rate
and the prepayment assumption. The prepayment assumption is to be determined in
a manner prescribed in Treasury regulations. As noted above, those regulations
have not been issued. The conference committee report accompanying the Tax
Reform Act of 1986, called the committee report, indicates that the regulations
will provide that the prepayment assumption used for a REMIC regular
certificate must be the same as that used in pricing the initial offering of
the REMIC regular certificate. The prepayment assumption used in reporting OID
for each series of REMIC regular certificates will be consistent with this
standard and will be disclosed in the related prospectus supplement. However,
neither the depositor nor any other person will make any representation that
the mortgage loans will in fact prepay at a rate conforming to the prepayment
assumption or at any other rate.
The OID, if any, on a REMIC regular certificate will be the excess of its
stated redemption price at maturity over its issue price. The issue price of a
class of REMIC regular certificates will be the first cash price at which a
substantial amount of REMIC regular certificates of that class is sold,
excluding sales to bond houses, brokers and underwriters. If less than a
substantial amount of a class of REMIC regular certificates is sold for cash on
or before the date of their initial issuance, the closing date, the issue price
for that class will be the fair market value of that class on the closing date.
Under
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Code provisions and the OID Regulations, the stated redemption price of a REMIC
regular certificate is equal to the total of all payments to be made on the
certificate other than qualified stated interest. Qualified stated interest is
interest that is unconditionally payable at least annually at a single fixed
rate, or at a qualified floating rate, an objective rate, a combination of a
single fixed rate and one or more qualified floating rates or one qualified
inverse floating rate, or a combination of qualified floating rates that does
not operate in a manner that accelerates or defers interest payments on the
REMIC regular certificate.
In the case of REMIC regular certificates with adjustable interest rates,
the determination of the total amount of OID and the timing of the inclusion of
that OID will vary according to the characteristics of the REMIC regular
certificates. If the OID rules apply to the certificates, the related
prospectus supplement will describe the manner in which the OID rules will be
applied to those certificates in preparing information returns for the
certificateholders and the IRS.
Some classes of the REMIC regular certificates may provide for the first
interest payment on those certificates to be made more than one month after the
date of issuance, a longer period than the remaining monthly intervals between
interest payments. Assuming the accrual period defined below for OID is each
monthly period that ends on a distribution date, in some cases, as a
consequence of this long first accrual period, some or all interest payments
may be required to be included in the stated redemption price of the REMIC
regular certificate and accounted for as OID. Because interest on REMIC regular
certificates must be accounted for under an accrual method, applying this
analysis would result in only a slight difference in the timing of the
inclusion in income of the yield on the REMIC regular certificates.
In addition, if the accrued interest to be paid on the first distribution
date is computed for a period that begins before the closing date, a portion of
the purchase price paid for a REMIC regular certificate will reflect this
accrued interest. If the purchase price includes this accrued interest,
information returns provided to you and to the IRS will be based on the
position that the portion of the purchase price paid for the interest accrued
for periods before the closing date is part of the overall cost of the REMIC
regular certificate, and not as a separate asset the cost of which is recovered
entirely out of interest received on the next distribution date, and that
portion of the interest paid on the first distribution date in excess of
interest accrued for a number of days corresponding to the number of days from
the closing date to the first distribution date should be included in the
stated redemption price of the REMIC regular certificate. However, the OID
Regulations state that all or some portion of this accrued interest may be
treated as a separate asset the cost of which is recovered entirely out of
interest paid on the first distribution date. It is unclear how an election to
do so would be made under the OID Regulations and whether this election could
be made unilaterally by a certificateholder.
OID on a REMIC regular certificate will be considered to be de minimis if
it is less than 0.25% of the stated redemption price of the REMIC regular
certificate multiplied by its weighted average life. The weighted average life
of the REMIC regular certificate is computed as the sum of the amounts
determined, for payment included in the stated redemption price of the REMIC
regular certificate, by multiplying
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o the number of complete years, rounding down for partial years, from the
issue date until the payment is expected to be made, presumably taking
into account the prepayment assumption, by
o a fraction, the numerator of which is the amount of the payment, and the
denominator of which is the stated redemption price at maturity of the
REMIC regular certificate.
Under the OID Regulations, OID of only a de minimis amount, other than de
minimis OID attributable to a so-called "teaser" interest rate or an initial
interest holiday, will be included in income as each payment of stated
principal is made, based on the product of the total amount of this de minimis
OID and a fraction, the numerator of which is the amount of the principal
payment and the denominator of which is the outstanding stated principal amount
of the REMIC regular certificate. The OID Regulations also permit you to elect
to accrue de minimis OID into income currently based on a constant yield
method. See "--Market Discount" for a description of this election under the
OID Regulations.
If OID on a REMIC regular certificate is in excess of a de minimis amount,
you must include in ordinary gross income the sum of the daily portions of OID
for each day during your taxable year that you held the REMIC regular
certificate, including the purchase date but excluding the disposition date. In
the case of an original holder of a REMIC regular certificate, the daily
portions of OID will be determined as described in the next two paragraphs.
As to each accrual period, meaning, unless otherwise stated in the related
prospectus supplement, each period that ends on a date that corresponds to a
distribution date and begins on the first day following the immediately
preceding accrual period, or in the case of the first accrual period, begins on
the closing date, a calculation will be made of the portion of the OID that
accrued during the accrual period. The portion of OID that accrues in any
accrual period will equal the excess, if any, of
o the sum of
o the present value, as of the end of the accrual period, of all of the
distributions remaining to be made on the REMIC regular certificate,
if any, in future periods, and
o the distributions made on the REMIC regular certificate during the
accrual period of amounts included in the stated redemption price,
over
o the adjusted issue price of the REMIC regular certificate at the beginning
of the accrual period.
The present value of the remaining distributions referred to in the
preceding sentence will be calculated:
o assuming that distributions on the REMIC regular certificate will be
received in future periods based on the mortgage loans being prepaid
at a rate equal to the prepayment assumption, and
o using a discount rate equal to the original yield to maturity of the
certificate.
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For these purposes, the original yield to maturity of the certificate will
be calculated based on its issue price and assuming that distributions on the
certificate will be made in all accrual periods based on the mortgage loans
being prepaid at a rate equal to the prepayment assumption. The adjusted issue
price of a REMIC regular certificate at the beginning of any accrual period
will equal the issue price of the certificate, increased by the aggregate
amount of OID that accrued for the certificate in prior accrual periods, and
reduced by the amount of any distributions made on the REMIC regular
certificate in prior accrual periods of amounts included in the state
redemption price. The OID accruing during any accrual period, computed as
described above, will be allocated ratably to each day during the accrual
period to determine the daily portion of OID for each day.
A subsequent purchaser of a REMIC regular certificate that purchases the
certificate at a cost, excluding any portion of the cost attributable to
accrued qualified stated interest, less than its remaining stated redemption
price will also be required to include in gross income the daily portions of
any OID for the certificate. However, each daily portion will be reduced, if
the cost is in excess of its "adjusted issue price," in proportion to the ratio
this excess bears to the aggregate OID remaining to be accrued on the REMIC
regular certificate. The adjusted issue price of a REMIC regular certificate on
any given day equals the sum of:
o the adjusted issue price, or, in the case of the first accrual period, the
issue price, of the certificate at the beginning of the accrual period
which includes that day, and
o the daily portions of OID for all days during the accrual period before
that day, less
o any payments other than qualified stated interest payments made during the
accrual period before that day.
If the method for computing original issue discount results in a negative
amount for any period with respect to a certificateholder, the amount of
original issue discount allocable to that period would be zero and the
certificateholder will be permitted to offset that negative amount only against
future original issue discount (if any) attributable to the certificates.
Market Discount. If you purchase a REMIC regular certificate at a market
discount, meaning, in the case of a REMIC regular certificate issued without
OID, at a purchase price less than its remaining stated principal amount, or in
the case of a REMIC regular certificate issued with OID, at a purchase price
less than its adjusted issue price, you will recognize gain upon receipt of
each distribution representing stated redemption price. In particular, under
Section 1276 of the Code you will generally be required to allocate the portion
of each distribution representing stated redemption price first to accrued
market discount not previously included in income, and to recognize ordinary
income to that extent. You may elect to include market discount in income
currently as it accrues rather than including it on a deferred basis as
prescribed in the preceding sentence. If made, this election will apply to all
market discount bonds acquired by you on or after the first day of the first
taxable year to which the election applies. In addition, the OID Regulations
permit you to elect to accrue all interest, discount, including de minimis
market discount or OID, and premium in income as interest, based on a constant
yield method. If this election were made for a REMIC
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regular certificate with market discount, you would be deemed to have made an
election to include market discount in income currently for all other debt
instruments having market discount that you acquire during the taxable year of
the election or any following year. Similarly, if you made this election for a
certificate that is acquired at a premium, you would be deemed to have made an
election to amortize bond premium for all debt instruments having amortizable
bond premium that you own or acquire. See "--Premium" below. Each of these
elections to accrue interest, discount and premium for a certificate on a
constant yield method or as interest may not be revoked without the consent of
the IRS.
However, the market discount on a REMIC regular certificate will be
considered de minimis for purposes of Section 1276 of the Code if the market
discount is less than 0.25% of the remaining stated redemption price of the
REMIC regular certificate multiplied by the number of complete years to
maturity after the date of its purchase. Under a similar rule regarding OID on
obligations payable in installments, the OID Regulations refer to the weighted
average maturity of obligations, and it is likely that the same rule would
apply for market discount, presumably taking into account the prepayment
assumption. If market discount is treated as de minimis under this rule, it
appears that the discount would be treated in a manner similar to de minimis
OID. See "--Original Issue Discount" above. This treatment may result in the
inclusion of discount in income more slowly than discount would be included in
income using the method described above.
Section 1276(b)(3) of the Code authorizes the Treasury Department to issue
regulations providing the method for accruing market discount on debt
instruments with principal payable in installments. Until regulations are
issued, certain rules described in the committee report apply. The committee
report indicates that in each accrual period market discount on REMIC regular
certificates should accrue, at your option:
o on the basis of a constant yield method,
o in the case of a REMIC regular certificate issued without OID, in an
amount that bears the same ratio to the total remaining market discount as
the stated interest paid in the accrual period bears to the total amount
of stated interest remaining to be paid on the REMIC regular certificate
as of the beginning of the accrual period, or
o in the case of a REMIC regular certificate issued with OID, in an amount
that bears the same ratio to the total remaining market discount as the
OID accrued in the accrual period bears to the total OID remaining on the
REMIC regular certificate at the beginning of the accrual period.
Further, the prepayment assumption used in calculating the accrual of OID
is also used in calculating the accrual of market discount. Because the
regulations described in this paragraph have not been issued, it is not
possible to predict what effect these regulations might have on the tax
treatment of a REMIC regular certificate purchased at a discount in the
secondary market.
The effect of these rules on REMIC regular certificates which provide for
monthly or other periodic distributions throughout their term may be to require
market discount
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to be included in income at a rate that is not significantly slower than the
rate at which the discount would accrue if it were OID. In any event, you will
generally be required to treat a portion of any gain on the sale or exchange of
the certificate as ordinary income equal to the amount of the market discount
accrued to the date of disposition under one of the methods described above,
less any accrued market discount previously reported as ordinary income.
Further, under Section 1277 of the Code you may be required to defer a
portion of your interest deductions for the taxable year attributable to any
indebtedness incurred or continued to purchase or carry a REMIC regular
certificate purchased with market discount. For these purposes, the de minimis
rule referred to above applies. Any deferred interest expense would not exceed
the market discount that accrues during the taxable year and is, in general,
allowed as a deduction not later than the year in which the market discount is
includible in income. If you elect to include market discount in income
currently as it accrues on all market discount instruments you acquire in that
taxable year or thereafter, the interest deferral rule described above will not
apply.
Premium. A REMIC regular certificate purchased at a cost, excluding any
amount attributable to accrued qualified stated interest, greater than its
remaining stated redemption price will be considered to be purchased at a
premium. In this event, you may elect under Section 171 of the Code to amortize
the premium under the constant yield method over the life of the certificate.
If made, the election will apply to all debt instruments with amortizable bond
premium that you own or subsequently acquire. Amortizable premium will be
treated as an offset to interest income on the related debt instrument, and not
as a separate interest deduction. The OID Regulations also permit you to elect
to include all interest, discount and premium in income based on a constant
yield method, further treating you as having made the election to amortize
premium generally. See "--Market Discount" above. The committee report states
that the same rules that apply to accrual of market discount, which require use
of a prepayment assumption in accruing market discount on REMIC Regular
Certificates without regard to whether the certificates have OID, will also
apply in amortizing bond premium under Section 171 of the Code.
Realized Losses. Under Section 166 of the Code, both corporate holders of
the REMIC regular certificates and noncorporate holders of the REMIC regular
certificates that acquire the certificates in connection with a trade or
business should be allowed to deduct, as ordinary losses, any losses sustained
during a taxable year in which their certificates become wholly or partially
worthless as the result of one or more realized losses on the mortgage loans.
However, it appears that a noncorporate holder that does not acquire a REMIC
regular certificate in connection with a trade or business will not be entitled
to deduct a loss under Section 166 of the Code until the holder's certificate
becomes wholly worthless, i.e., until its outstanding principal balance has
been reduced to zero, and that the loss will be characterized as a short-term
capital loss.
Each holder of a REMIC regular certificate will be required to accrue
interest and OID for the certificate, without giving effect to any reductions
in distributions attributable to defaults or delinquencies on the mortgage
loans or the underlying certificates until it can be established that any of
these reductions ultimately will not be recoverable. As a result, the amount of
taxable income reported in any period by the
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holder of a REMIC regular certificate could exceed the amount of economic
income actually realized by the holder in the period. Although the holder of a
REMIC regular certificate eventually will recognize a loss or reduction in
income attributable to previously accrued and included income that, as the
result of a realized loss, ultimately will not be realized, the law is unclear
as to the timing and character of this loss or reduction in income.
Taxation of Owners of REMIC Residual Certificates.
The certificates of each series that constitute the residual interests in
a REMIC, called REMIC residual certificates, will be subject to tax rules that
differ significantly from those that would apply if the REMIC residual
certificates were treated for federal income tax purposes as direct ownership
interests in the mortgage loans or as debt instruments issued by the REMIC.
As a holder of a REMIC residual certificate, you will generally be
required to report your daily portion of the taxable income or, subject to the
limitations noted in this discussion, the net loss of the REMIC for each day
during a calendar quarter that you owned the REMIC residual certificate. For
this purpose, the taxable income or net loss of the REMIC will be allocated to
each day in the calendar quarter ratably using a "30 days per month/90 days per
quarter/360 days per year" convention unless otherwise disclosed in the related
prospectus supplement. The daily amounts so allocated will then be allocated
among the REMIC residual certificateholders in proportion to their respective
ownership interests on that day. Any amount included in the gross income or
allowed as a loss of any REMIC residual certificateholder by virtue of this
paragraph will be treated as ordinary income or loss. The taxable income of the
REMIC will be determined under the rules described below in "--Taxable Income
of the REMIC" and will be taxable to the REMIC residual certificateholders
without regard to the timing or amount of cash distributions by the REMIC.
Ordinary income derived from REMIC residual certificates will be "portfolio
income" for purposes of the taxation of taxpayers subject to limitations under
Section 469 of the Code on the deductibility of "passive losses."
If you purchased your REMIC residual certificate from a prior holder of
the certificate, you will also be required to report on your federal income tax
return amounts representing your daily share of the taxable income, or net
loss, of the REMIC for each day that you hold the REMIC residual certificate.
Those daily amounts generally will equal the amounts of taxable income or net
loss determined as described above. The committee report indicates that certain
modifications of the general rules may be made, by regulations, legislation or
otherwise to reduce, or increase, the income of a REMIC residual
certificateholder that purchased its REMIC residual certificate from a prior
holder of the certificate at a price greater than, or less than, the adjusted
basis defined below, such REMIC residual certificate would have had in the
hands of an original holder of the certificate. The REMIC Regulations, however,
do not provide for these modifications.
Any payments received by you in connection with the acquisition of the
REMIC residual certificate will be taken into account in determining your
income for federal income tax purposes. Although it appears likely that any of
these payments would be
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includible in income immediately upon its receipt, the IRS might assert that
the payment should be included in income over time according to an amortization
schedule or according to some other method. Because of the uncertainty
concerning the treatment of these payments, holders of REMIC residual
certificates should consult their tax advisors concerning the treatment of
these payments for income tax purposes.
The amount of income you will be required to report, or the tax liability
associated with this income, may exceed the amount of cash distributions
received from the REMIC for the corresponding period. Consequently, you should
have other sources of funds sufficient to pay any federal income taxes due as a
result of your ownership of REMIC residual certificates or unrelated deductions
against which income may be offset, subject to the rules relating to excess
inclusions, residual interests without significant value and noneconomic
residual interests discussed below. The fact that the tax liability associated
with the income allocated to you may exceed the cash distributions received by
you for the corresponding period may significantly adversely affect your
after-tax rate of return.
Taxable Income of the REMIC. The taxable income of the REMIC will equal
the income from the mortgage loans and other assets of the REMIC plus any
cancellation of indebtedness income due to the allocation of realized losses to
REMIC regular certificates, less the deductions allowed to the REMIC for
interest, including OID, and reduced by any premium on issuance, on the REMIC
regular certificates, and on any other class of REMIC Certificates constituting
regular interests in the REMIC not offered hereby, amortization of any premium
on the mortgage loans, bad debt losses on the mortgage loans and, except as
described below, for servicing, administrative and other expenses.
For purposes of determining its taxable income, the REMIC will have an
initial aggregate basis in its assets equal to the sum of the issue prices of
all REMIC certificates, or, if a class of REMIC certificates is not sold
initially, their fair market values. That aggregate basis will be allocated
among the mortgage loans and the other assets of the REMIC in proportion to
their respective fair market values. The issue price of any REMIC certificates
offered by this prospectus will be determined in the manner described above
under "--Original Issue Discount." The issue price of a REMIC certificate
received in exchange for an interest in the mortgage loans or other property
will equal the fair market value of the interests in the mortgage loans or
other property. Accordingly, if one or more classes of REMIC certificates are
retained initially rather than sold, the master servicer or the trustee may be
required to estimate the fair market value of the interests to determine the
basis of the REMIC in the mortgage loans and other property held by the REMIC.
Subject to possible application of the de minimis rules, the method of
accrual by the REMIC of OID income and market discount income on mortgage loans
that it holds will be equivalent to the method for accruing OID income for
holders of REMIC regular certificates, that is, under the constant yield method
taking into account the prepayment assumption. However, a REMIC that acquires
loans at a market discount must include the market discount in income
currently, as it accrues, on a constant yield basis. See "--Taxation of Owners
of REMIC Regular Certificates" above, which describes a method for accruing
discount income that is analogous to that required to be used by a REMIC
holding mortgage loans with market discount.
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A mortgage loan will be deemed to have been acquired with discount, or
premium, to the extent that the REMIC's basis in the mortgage loan, determined
as described in the preceding paragraph, is less than, or greater than, its
stated redemption price. Any discount will be includible in the income of the
REMIC as it accrues, in advance of receipt of the cash attributable to that
income, under a method similar to the method described above for accruing OID
on the REMIC regular certificates. It is anticipated that each REMIC will elect
to amortize any premium on the mortgage loans. Premium on any mortgage loan to
which an election applies may be amortized under a constant yield method,
presumably taking into account a prepayment assumption. Further, an election
would not apply to any mortgage loan originated on or before September 27,
1985. Instead, premium on these mortgage loans should be allocated among the
principal payments on those loans and be deducted by the REMIC as those
payments become due or upon the prepayment of the mortgage loan.
A REMIC will be allowed deductions for interest, including OID, on the
REMIC regular certificates, and including any other class of REMIC certificates
constituting regular interests in the REMIC not offered by this prospectus,
equal to the deductions that would be allowed if the REMIC regular
certificates, including any other class of REMIC certificates constituting
regular interests in the REMIC not offered by this prospectus, were
indebtedness of the REMIC. OID will be considered to accrue for this purpose as
described above under "--Original Issue Discount," except that the de minimis
rule and the adjustments for subsequent holders of REMIC regular certificates,
including any other class of REMIC certificates constituting regular interests
in the REMIC not offered by this prospectus described in that section will not
apply.
If a class of REMIC regular certificates is issued at a price in excess of
the stated redemption price of that class, with this excess being called issue
premium, the net amount of interest deductions that are allowed the REMIC in
each taxable year on the REMIC regular certificates of that class will be
reduced by an amount equal to the portion of the issue premium that is
considered to be amortized or repaid in that year. Although the matter is not
entirely certain, it is likely that issue premium would be amortized under a
constant yield method in a manner analogous to the method of accruing OID
described above under "--Original Issue Discount."
As a general rule, the taxable income of a REMIC will be determined in the
same manner as if the REMIC were an individual having the calendar year as its
taxable year and using the accrual method of accounting. However, no item of
income, gain, loss or deduction allocable to a prohibited transaction will be
taken into account. See "--Prohibited Transactions Tax and Other Taxes" below.
Further, the limitation on miscellaneous itemized deductions imposed on
individuals by Section 67 of the Code, which allows these deductions only to
the extent they exceed in the aggregate two percent of the taxpayer's adjusted
gross income, will not be applied at the REMIC level so that the REMIC will be
allowed deductions for servicing, administrative and other non-interest
expenses in determining its taxable income. All of these expenses will be
allocated as a separate item to the holders of REMIC Certificates, subject to
the limitation of Section 67 of the Code. See "--Possible Pass-Through of
Miscellaneous Itemized Deductions" below. If the deductions allowed to the
REMIC exceed its gross income for a calendar quarter, this excess will be the
net loss for the REMIC for that calendar quarter.
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Basis Rules, Net Losses and Distributions. The adjusted basis of a REMIC
residual certificate will be equal to the amount paid for the REMIC residual
certificate, increased by amounts included in your income with respect to a
REMIC residual certificate and decreased, but not below zero, by distributions
made, and by net losses allocated, to you.
You will not be allowed to take into account any net loss for any calendar
quarter in the amount that the net loss exceeds your adjusted basis in your
REMIC residual certificate as of the close of the calendar quarter, determined
without regard to the net loss. Any loss that is not currently deductible by
reason of this limitation may be carried forward indefinitely to future
calendar quarters and, subject to the same limitation, may be used only to
offset income from the REMIC residual certificate. Your ability to deduct net
losses may be subject to additional limitations under the Code. You should
consult your tax advisor about these limitations.
Any distribution on a REMIC residual certificate will be treated as a
non-taxable return of capital to the extent it does not exceed your adjusted
basis in the REMIC residual certificate. To the extent a distribution on a
REMIC residual certificate exceeds its adjusted basis, it will be treated as
gain from the sale of the REMIC residual certificate. You may be entitled to
distributions early in the term of a REMIC in which you own certain REMIC
residual certificates under circumstances in which your bases in the REMIC
residual certificates will not be sufficiently large that the distributions
will be treated as non-taxable returns of capital. Your bases in the REMIC
residual certificates will initially equal the amount paid for the REMIC
residual certificates and will be increased by your allocable shares of taxable
income of the REMIC. However, these bases increases may not occur until the end
of the calendar quarter, or perhaps the end of the calendar year, for which the
REMIC taxable income is allocated to you. To the extent your initial bases are
less than the distributions to you, and increases in your initial bases either
occur after the distributions or, together with your initial bases, are less
than the amount of the distributions, gain will be recognized to you on the
distributions and will be treated as gain from the sale of your REMIC residual
certificates.
The effect of these rules is that you may not amortize your basis in a
REMIC residual certificate, but may only recover your basis through
distributions, through the deduction of any net losses of the REMIC or upon the
sale of your REMIC residual certificate. See "--Sales of REMIC Certificates"
below. For a discussion of possible modifications of these rules that may
require adjustments to income of a holder of a REMIC residual certificate other
than an original holder to reflect any difference between the cost of the REMIC
residual certificate to the REMIC residual certificateholder and the adjusted
basis the REMIC residual certificate would have in the hands of an original
holder see "--Taxation of Owners of REMIC Residual Certificates" above.
Excess Inclusions. Any excess inclusions for a REMIC residual certificate
will be subject to federal income tax in all events.
In general, the excess inclusions for a REMIC residual certificate for any
calendar quarter will be the excess, if any, of the daily portions of REMIC
taxable income
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allocable to the REMIC residual certificate over the sum of the daily accruals
for each day during the quarter that the REMIC residual certificate was held by
you. Your daily accruals will be determined by allocating to each day during a
calendar quarter your ratable portion of the product of the adjusted issue
price of the REMIC residual certificate at the beginning of the calendar
quarter and 120% of the "long-term Federal rate" in effect on the closing date.
For this purpose, the adjusted issue price of a REMIC residual certificate as
of the beginning of any calendar quarter will be equal to its issue price
increased by the sum of the daily accruals for all prior quarters and
decreased, but not below zero, by any distributions on the REMIC residual
certificate before the beginning of the quarter. The issue price of a REMIC
residual certificate is the initial offering price to the public, excluding
bond houses and brokers, at which a substantial amount of the REMIC residual
certificates were sold. The "long-term Federal rate" is an average of current
yields on Treasury securities with a remaining term of greater than nine years,
computed and published monthly by the IRS. Although it has not done so, the
Treasury has authority to issue regulations that would treat the entire amount
of income accruing on a REMIC residual certificate as an excess inclusion if
the REMIC residual certificates are considered not to have "significant value."
For REMIC residual certificateholders, excess inclusions:
o will not be permitted to be offset by deductions, losses or loss
carryovers from other activities,
o will be treated as unrelated business taxable income to an otherwise
tax-exempt organization, and
o will not be eligible for any rate reduction or exemption under any
applicable tax treaty as to the 30% United States withholding tax imposed
on distributions to REMIC residual certificateholders that are foreign
investors. See, however, "--Foreign Investors in REMIC Certificates"
below.
Additionally, for purposes of the alternative minimum tax, excess
inclusions will not be permitted to be offset by the alternative tax net
operating loss deduction, and alternative minimum taxable income (which, for
this specific purpose is determined without regard to the special rule that
taxable income cannot be less than excess inclusions) may not be less than the
taxpayer's excess inclusions. The latter rule has the effect of preventing
non-refundable tax credits from reducing the taxpayer's income tax to an amount
lower than the tentative minimum tax on excess inclusions.
In the case of any REMIC residual certificates held by a real estate
investment trust, called a REIT, the aggregate excess inclusions for those
REMIC residual certificates, reduced, but not below zero, by the REIT taxable
income within the meaning of Section 857(b)(2) of the Code, excluding any net
capital gain, will be allocated among the shareholders of the REIT in
proportion to the dividends received by those shareholders from the REIT, and
any amount so allocated will be treated as an excess inclusion on a REMIC
residual certificate as if held directly by the shareholder. Treasury
regulations yet to be issued could apply a similar rule to regulated investment
companies, common trust and some cooperatives; the REMIC Regulations currently
do not address this subject.
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Noneconomic REMIC Residual Certificates. Under the REMIC Regulations,
transfers of "noneconomic" REMIC residual certificates will be disregarded for
all federal income tax purposes if "a significant purpose of the transfer was
to enable the transferor to impede the assessment or collection of tax."
Recently proposed regulations (which would apply retroactively) would amend a
safe harbor for determining whether such a significant purpose existed with
respect to a transfer of a residual interest. This regulation would now
require, in very general terms, that the present value of the amounts received
by the transferee (from the transferor) and from holding the residual interest
(including the present value of the resulting tax benefits) at least equal the
present value of the tax liabilities arising from holding the residual
interest. If a transfer is disregarded, the purported transferor will continue
to remain liable for any taxes due on the income on a noneconomic REMIC
residual certificate. The REMIC Regulations provide that a REMIC residual
certificate is noneconomic unless, based on the prepayment assumption and on
any required or permitted clean up calls, or required liquidation provided for
in the REMIC's organizational documents:
o the present value of the expected future distributions, discounted using
the applicable Federal rate for obligations whose term ends on the close
of the last quarter in which excess inclusions are expected to accrue on
the REMIC residual certificate, and which rate is computed and published
monthly by the IRS, on the REMIC residual certificate equals at least the
present value of the expected tax on the anticipated excess inclusions,
and
o the transferor reasonably expects that the transferee will receive
distributions on the REMIC residual certificate at or after the time the
taxes accrue on the anticipated excess inclusions in an amount sufficient
to satisfy the accrued taxes.
Accordingly, all transfers of REMIC residual certificates that may
constitute noneconomic residual interests will be subject to restrictions under
the terms of the related pooling and servicing agreement that are intended to
reduce the possibility of any transfer being disregarded. These restrictions
will require each party to a transfer to provide an affidavit that no purpose
of the transfer is to impede the assessment or collection of tax, including
representations as to the financial condition of the prospective transferee. In
this regard, the transferor is also required to make a reasonable investigation
to determine the transferee's historic payment of its debts and ability to
continue to pay its debts as they come due in the future. Before purchasing a
REMIC residual certificate, prospective purchasers should consider the
possibility that a purported transfer of a REMIC residual certificate by the
purchaser to another purchaser at some future date may be disregarded in
accordance with these rules, resulting in the retention of tax liability by the
purchaser.
The related prospectus supplement will disclose whether offered REMIC
residual certificates may be considered noneconomic residual interests under
the REMIC Regulations; provided, however, that any disclosure that a REMIC
residual certificate will not be considered noneconomic will be based upon
assumptions, and the depositor will make no representation that a REMIC
residual certificate will not be considered noneconomic for purposes of the
above-described rules. See "--Foreign Investors in REMIC Certificates" below
for additional restrictions on transfers of REMIC residual certificates to
foreign persons.
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Mark-to-Market Rules. On December 23, 1996, the IRS released final
regulations called the mark-to-market Regulations, relating to the requirement
that a securities dealer mark to market securities held for sale to customers.
This mark-to-market requirement applies to all securities owned by a dealer,
unless the dealer has specifically identified a security as held for
investment. The mark-to-market Regulations provide that, for purposes of this
mark-to-market requirement, a REMIC residual certificate is not treated as a
security and thus may not be marked to market.
Possible Pass-Through of Miscellaneous Itemized Deductions. Fees and
expenses of a REMIC generally will be allocated to the holders of the REMIC
residual certificates of that REMIC. The applicable Treasury regulations
indicate, however, that as to a REMIC that is similar to a single class grantor
trust, all or a portion of those fees and expenses should be allocated to the
holders of the REMIC regular certificates. Unless otherwise stated in the
related prospectus supplement, these fees and expenses will be allocated to
holders of the REMIC residual certificates in their entirety and not to the
holders of the REMIC regular certificates.
For holders of REMIC residual certificates or REMIC regular certificates
that receive an allocation of fees and expenses in accordance with the
preceding discussion and that is an individual, estate or trust, or a
"pass-through entity" beneficially owned by one or more individuals, estates or
trusts, an amount equal to the individual's, estate's or trust's share of the
fees and expenses will be added to the gross income of the holder, and the
individual's, estate's or trust's share of the fees and expenses will be
treated as a miscellaneous itemized deduction allowable subject to the
limitation of Section 67 of the Code, which permits these deductions only to
the extent they exceed in the aggregate two percent of a taxpayer's adjusted
gross income. In addition, itemized deductions are further restricted by other
sections of the Code. The amount of additional taxable income reportable by
REMIC certificateholders that are subject to the limitations of either Section
67 or other sections of the Code may be substantial. In addition, in
determining the alternative minimum taxable income of a holder of a REMIC
Certificate that is an individual, estate or trust, or a "pass-through entity"
beneficially owned by one or more individuals, estates or trusts, no deduction
will be allowed for that holder's allocable portion of servicing fees and other
miscellaneous itemized deductions of the REMIC, even though an amount equal to
the amount of those fees and other deductions will be included in the holder's
gross income. Accordingly, these REMIC certificates may not be appropriate
investments for individuals, estates, or trusts, or pass-through entities
beneficially owned by one or more individuals, estates or trusts. Any of these
investors should consult with their tax advisors before making an investment in
the certificates.
Sales of REMIC Certificates. If you sell a REMIC certificate, you will
recognize gain or loss equal to the difference between the amount realized on
the sale and your adjusted basis in the REMIC certificate. The adjusted basis
of a REMIC regular certificate generally will equal your cost for the REMIC
regular certificate, increased by income on the REMIC regular certificate
reported by you, including original issue discount and market discount income,
and reduced, but not below zero, by distributions on the REMIC regular
certificate received by you and by any amortized premium. The adjusted basis of
a REMIC residual certificate will be determined as described under
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"--Basis Rules, Net Losses and Distributions." Except as provided in the
following four paragraphs, any gain or loss from a sale will be capital gain or
loss, provided the REMIC certificate is held as a capital asset within the
meaning of Section 1221 of the Code. Generally, you will receive long-term
capital gain treatment on the sale of a REMIC regular certificate if you have
held the certificate for at least 12 months.
Gain from the sale of a REMIC regular certificate that might otherwise be
capital gain will be treated as ordinary income in the amount by which the gain
does not exceed the excess, if any, of the amount that would have been
includible in your income with respect to the REMIC regular certificate
assuming that income had accrued thereon at a rate equal to 110% of the
applicable Federal rate determined as of the date of purchase of the REMIC
regular certificate, over the amount of ordinary income actually includible in
your income before the sale. In addition, gain recognized on the sale of a
REMIC regular certificate that you purchased at a market discount will be
taxable as ordinary income in an amount not exceeding the portion of the
discount that accrued during the period you held the REMIC certificate, reduced
by any market discount included in income under the rules described above under
"--Market Discount" and "--Premium."
REMIC certificates will be "evidences of indebtedness" within the meaning
of Section 582(c)(1) of the Code, so that gain or loss recognized from the sale
of a REMIC certificate by a bank or thrift institution to which that section
applies will be ordinary income or loss.
Except as may be provided in Treasury regulations yet to be issued, if you
sell and reacquire a REMIC residual certificate, or you acquire any other
residual interest in a REMIC (and possibly a FASIT) or any similar interest in
a "taxable mortgage pool," as defined in Section 7701(i) of the Code, during
the period beginning six months before, and ending six months after, the date
of that sale, the sale will be subject to the "wash sale" rules of Section 1091
of the Code. In that event, any loss you realize on the sale will not be
deductible, but instead will be added to your adjusted basis in the
newly-acquired asset.
Prohibited Transactions Tax and Other Taxes. The Code imposes a tax on
REMICs equal to 100% of the net income derived from "prohibited transactions"
called a prohibited transactions tax. In general, subject to specified
exceptions, a prohibited transaction includes the disposition of a mortgage
loan, the receipt of income from a source other than a mortgage loan or other
permitted investments, the receipt of compensation for services, or gain from
the disposition of an asset purchased with the payments on the mortgage loans
for temporary investment pending distribution on the REMIC certificates. It is
not anticipated that any REMIC will engage in any prohibited transactions in
which it would recognize a material amount of net income.
In addition, some contributions to a REMIC made after the day on which the
REMIC issues all of its interests could result in the imposition of a tax on
the REMIC equal to 100% of the value of the contributed property, called a
contributions tax. Each pooling and servicing agreement will include provisions
designed to prevent the acceptance of any contributions that would be subject
to this tax.
REMICs also are subject to federal income tax at the highest corporate
rate on net income from foreclosure property, determined by reference to the
rules applicable to
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REITs. Net income from foreclosure property generally includes gain from the
sale of a foreclosure property that is inventory property and gross income from
foreclosure property other than qualifying rents and other qualifying income
for a REIT. The pooling and servicing agreement provides that a special
servicer shall cause or permit to be earned with respect to any REO property
any "net income from foreclosure property" that is subject to tax by reason of
the REMIC provisions only if it has determined that the earning of such income
on a net after-tax basis could reasonably be expected to result in a greater
recovery on behalf of the certificateholders than an alternative method of
operation or rental of such property that would not be subject to such a tax.
Unless otherwise disclosed in the related prospectus supplement, it is not
anticipated that any material state or local income or franchise tax will be
imposed on any REMIC.
Unless otherwise stated in the related prospectus supplement, and to the
extent permitted by then applicable laws, any prohibited transactions tax,
contributions tax, tax on net income from foreclosure property or state or
local income or franchise tax that may be imposed on the REMIC will be borne by
the related master servicer, special servicer, manager or trustee in any case
out of its own funds, provided that person has sufficient assets to do so, and
provided further that the tax arises out of a breach of that person's
obligations under the related pooling and servicing agreement and in respect of
compliance with applicable laws and regulations. Any tax not borne by a master
servicer, special servicer, manager or trustee will be charged against the
related trust resulting in a reduction in amounts payable to holders of the
related REMIC certificates.
Tax and Restrictions on Transfers of REMIC Residual Certificates to
Certain Organizations. If a REMIC residual certificate is transferred to a
disqualified organization (as defined below), a tax would be imposed in an
amount equal to the product of:
o the present value, discounted using the applicable Federal rate, computed
and published monthly by the IRS, for obligations whose term ends on the
close of the last quarter in which excess inclusions are expected to
accrue on the REMIC residual certificate, of the total anticipated excess
inclusions for the REMIC residual certificate for periods after the
transfer, and
o the highest marginal federal income tax rate applicable to corporations.
The anticipated excess inclusions must be determined as of the date that
the REMIC residual certificate is transferred and must be based on events that
have occurred up to the time of the transfer, the prepayment assumption and any
required or permitted clean up calls or required liquidation provided for in
the REMIC's organizational documents. If imposed, this tax generally would be
imposed on the transferor of the REMIC residual certificate, except that where
the transfer is through an agent for a disqualified organization, the tax would
instead be imposed on the agent. However, a transferor of a REMIC residual
certificate would in no event be liable for this tax on a transfer if the
transferee furnishes to the transferor an affidavit that the transferee is not
a disqualified organization and, as of the time of the transfer, the transferor
does not have actual knowledge that the affidavit is false. Further, an entity
will not qualify as a REMIC unless there are reasonable arrangements designed
to ensure that residual
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interests in the entity are not held by disqualified organizations and
information necessary for the application of the tax described in this
paragraph will be made available. Restrictions on the transfer of REMIC
residual certificates and other provisions intended to meet this requirement
will be included in each pooling and servicing agreement, and will be discussed
in any prospectus supplement relating to the offering of any REMIC residual
certificate.
In addition, if a pass-through entity includes in income excess inclusions
with respect to a REMIC residual certificate, and a disqualified organization
is the record holder of an interest in that entity, then a tax will be imposed
on that entity equal to the product of:
o the amount of excess inclusions on the REMIC residual certificate that are
allocable to the interest in the pass-through entity held by the
disqualified organization, and
o the highest marginal federal income tax rate imposed on corporations.
A pass-through entity will not be subject to this tax for any period,
however, if each record holder of an interest in the pass-through entity
furnishes to the pass-through entity the holder's social security number and a
statement under penalties of perjury that social security number is that of the
record holder or a statement under penalties of perjury that the record holder
is not a disqualified organization. For taxable years beginning after December
31, 1997, notwithstanding the preceding two sentences, in the case of a REMIC
residual certificate held by an "electing large partnership," all interests in
such partnership shall be treated as held by disqualified organizations
(without regard to whether the record holders of the partnership furnish
statements described in the preceding sentence) and the amount that is subject
to tax under the preceding paragraph is excluded from the gross income of the
partnership allocated to the partners (in lieu of allocating to the partners a
deduction for such tax paid by the partners).
For these purposes, a disqualified organization means:
o the United States, any State or political subdivision of the United
States, any foreign government, any international organization, or any
agency or instrumentality of the entities just listed, but would not
include instrumentalities described in Section 168(h)(2)(D) of the Code or
the Federal Home Loan Mortgage Corporation,
o any organization, other than a cooperative described in Section 521 of the
Code, that is exempt from federal income tax, unless it is subject to the
tax imposed by Section 511 of the Code, or
o any organization described in Section 1381(a)(2)(C) of the Code.
For these purposes, a pass-through entity means any regulated investment
company, REIT, trust, partnership or other entities described in Section
860E(e)(6) of the Code. In addition, a person holding an interest in a
pass-through entity as a nominee for another person will be treated as a
pass-through entity for these purposes.
Termination. A REMIC will terminate immediately after the distribution
date following receipt by the REMIC of the final payment in respect of the
mortgage loans or upon a sale of the REMIC's assets following the adoption by
the REMIC of a plan of complete liquidation. The last distribution on a REMIC
regular certificate will be
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treated as a payment in retirement of a debt instrument. If the last
distribution on a REMIC residual certificate is less than the REMIC residual
certificateholder's adjusted basis in the certificate, the REMIC residual
certificateholder should, but may not, be treated as realizing a loss equal to
the amount of the difference, and the loss may be treated as a capital loss.
Reporting and Other Administrative Matters. For purposes of the
administrative provisions of the Code only, the REMIC will be treated as a
partnership and REMIC residual certificateholders will be treated as partners.
Unless otherwise stated in the related prospectus supplement, the trustee or
the master servicer, which generally will hold at least a nominal amount of
REMIC residual certificates, will file REMIC federal income tax returns on
behalf of the related REMIC, and will be designated as and will act as the tax
matters person for the REMIC.
As the tax matters person, the trustee or the master servicer, subject to
notice requirements and various restrictions and limitations, generally will
have the authority to act on behalf of the REMIC and on behalf of you for any
administrative and judicial review of items of income, deduction, gain or loss
of the REMIC, as well as the REMIC's classification. You will generally be
required to report these REMIC items consistently with their treatment on the
REMIC's tax return and you may in some circumstances be bound by a settlement
agreement between the trustee or the master servicer, as tax matters person,
and the IRS concerning any REMIC item. Adjustments made to the REMIC tax return
may require you to make corresponding adjustments on your return, and an audit
of the REMIC's tax return, or the adjustments resulting from an audit, could
result in an audit of your return. No REMIC will be registered as a tax shelter
under Section 6111 of the Code because it is not anticipated that any REMIC
will have a net loss for any of the first five taxable years of its existence.
Any person that holds a REMIC residual certificate as a nominee for another
person may be required to furnish to the related REMIC, in a manner to be
provided in Treasury regulations, the name and address of that person and other
information.
Reporting of interest income, including any OID, on any REMIC regular
certificates is required annually, and may be required more frequently under
Treasury regulations. These information reports generally are required to be
sent to individual holders of REMIC regular interests and the IRS; holders of
REMIC regular certificates that are corporations, trusts, securities dealers
and some other non-individuals will be provided interest and OID income
information and the information provided in the following paragraph upon
request in accordance with the requirements of the applicable regulations. The
information must be provided by the later of 30 days after the end of the
quarter for which the information was requested, or two weeks after the receipt
of the request. The REMIC must also comply with rules requiring a REMIC regular
certificate issued with OID to disclose on its face the amount of OID and the
issue date, and requiring this information to be reported to the IRS. Reporting
for REMIC residual certificates, including income, excess inclusions,
investment expenses and relevant information regarding qualification of the
REMIC's assets will be made as required under the Treasury regulations,
generally on a quarterly basis.
As applicable, the REMIC regular certificate information reports will
include a statement of the adjusted issue price of the REMIC regular
certificate at the beginning
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of each accrual period. In addition, the reports will include information
required by regulations for computing the accrual of any market discount.
Because exact computation of the accrual of market discount on a constant yield
method would require information about the holder's purchase price that the
REMIC may not have, the regulations only require that information about the
appropriate method of accruing market discount be provided. See "--Market
Discount."
Unless we tell you otherwise in the related prospectus supplement, the
responsibility for complying with the reporting rules discussed above will be
borne by either the trustee or the master servicer.
Backup Withholding with Respect to REMIC Certificates.
Payments of interest and principal, as well as payments of proceeds from
the sale of REMIC certificates, may be subject to a backup withholding tax at a
rate of 31% if you fail to furnish to the payor information, including your
taxpayer identification numbers, or otherwise fail to establish an exemption
from this tax. Any amounts deducted and withheld from a distribution to you
would be allowed as a credit against your federal income tax. Penalties may be
imposed on you by the IRS if you fail to supply required information in the
proper manner. We advise you to consult your tax advisors about the backup
withholding tax rules, including your eligibility for, and the procedure for
obtaining, exemption from this tax.
Foreign Investors in REMIC Certificates.
A REMIC regular certificateholder that is not a "United States Person" and
is not subject to federal income tax as a result of any direct or indirect
connection to the United States in addition to its ownership of a REMIC regular
certificate will not, unless otherwise disclosed in the related prospectus
supplement, be subject to United States federal income or withholding tax on a
distribution on a REMIC regular certificate, provided that the holder complies
with identification requirements, including delivery of a statement, signed by
the certificateholder under penalties of perjury, certifying that the
Certificateholder is not a United States Person and providing the name and
address of the certificateholder. For these purposes, "United States Person"
means:
o a citizen or resident of the United States,
o a corporation, partnership or other entity treated as a corporation
or a partnership created or organized in, or under the laws of, the
United States or any political subdivision of the United States,
o an estate whose income is subject to United States income tax
regardless of its source, or
o a trust if a court within the United States is able to exercise
primary supervision over the administration of the trust and one or
more United States persons have the authority to control all
substantial decisions of the trust.
It is possible that the IRS may assert that the tax exemption discussed
above should not apply to a REMIC regular certificate held by a REMIC residual
certificateholder that owns directly or indirectly a 10% or greater interest in
the REMIC residual
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certificates. If the holder does not qualify for exemption, distributions of
interest, including distributions in respect of accrued OID, to the holder may
be subject to a tax rate of 30%, unless reduced by an applicable tax treaty.
In addition, these rules will not apply to exempt a United States
shareholder of a controlled foreign corporation from taxation on the United
States shareholder's allocable portion of the interest income received by the
controlled foreign corporation.
Further, it appears that a REMIC regular certificate would not be included
in the estate of a non-resident alien individual and would not be subject to
United States estate taxes. However, certificateholders who are non-resident
alien individuals should consult their tax advisors concerning this question.
Unless otherwise stated in the related prospectus supplement, transfers of
REMIC residual certificates to investors that are not United States Persons
will be prohibited under the related pooling and servicing agreement.
GRANTOR TRUSTS
Classification of Grantor Trusts.
Counsel to the depositor will deliver its opinion upon issuance of each
series of grantor trust certificates, to the effect that, assuming compliance
with all provisions of the related pooling and servicing agreement, the related
grantor trust will be classified as a grantor trust under subpart E, part I of
subchapter J of the Code and not as a partnership or an association taxable as
a corporation. Accordingly, each holder of a grantor trust certificate
generally will be treated as the owner of an interest in the mortgage loans
included in the grantor trust.
For purposes of the following discussion, a grantor trust certificate
representing an undivided equitable ownership interest in the principal of the
mortgage loans constituting the related grantor trust, together with interest
thereon at a pass-through rate, will be referred to as a "grantor trust
fractional interest certificate." A grantor trust certificate representing
ownership of all or a portion of the difference between interest paid on the
mortgage loans constituting the related grantor trust, net of normal
administration fees, and interest paid to the holders of grantor trust
fractional interest certificates will be referred to as a "grantor trust strip
certificate." A grantor trust strip certificate may also evidence a nominal
ownership interest in the principal of the mortgage loans constituting the
related grantor trust.
Taxation of Owners of Grantor Trust Fractional Interest Certificates.
As a holder of a grantor trust fractional interest certificate, you will
generally be required to report on your federal income tax return your share of
the entire income from the mortgage loans and will be entitled to deduct your
share of any reasonable servicing fees and other expenses. Because of stripped
interests, market discount, OID, or premium, the amount includible in income on
a grantor trust fractional interest certificate may differ significantly from
the amount distributable on that certificate from interest on the mortgage
loans. Under Section 67 of the Code, an individual, estate or trust holding a
grantor trust fractional interest certificate directly or through certain
pass-through entities will be allowed a deduction for reasonable servicing fees
and
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expenses only in the amount of the holder's aggregate miscellaneous itemized
deductions less two percent of the holder's adjusted gross income. In addition,
itemized deductions are further restricted by other sections of the Code. The
amount of additional taxable income reportable by holders of grantor trust
fractional interest certificates who are subject to the limitations of either
Section 67 or other sections of the Code may be substantial. Further,
certificateholders, other than corporations, subject to the alternative minimum
tax may not deduct miscellaneous itemized deductions in determining the
holder's alternative minimum taxable income. Although it is not entirely clear,
it appears that in transactions in which multiple classes of grantor trust
certificates, including grantor trust strip certificates, are issued, fees and
expenses should be allocated among the classes of grantor trust certificates
using a method that recognizes that each class of certificates benefits from
the services. In the absence of statutory or administrative clarification as to
the method to be used, it is currently intended to base information returns or
reports to the IRS and certificateholders on a method that allocates expenses
among classes of grantor trust certificates for each period based on the
distributions made to each class during that period.
The federal income tax treatment of grantor trust fractional interest
certificates of any series will depend on whether they are subject to the
stripped bond rules of Section 1286 of the Code. Grantor trust fractional
interest certificates may be subject to those rules if a class of grantor trust
strip certificates is issued as part of the same series of certificates or the
depositor or any of its affiliates retains a right to receive a specified
portion of the interest payable on a mortgage asset. Further, the IRS has ruled
that an unreasonably high servicing fee retained by a seller or servicer will
be treated as a retained ownership interest in mortgages that constitutes a
stripped coupon. The IRS has established safe harbors for purposes of
determining what constitutes reasonable servicing fees for various types of
mortgages. The servicing fees paid for servicing of the mortgage loans for some
series of grantor trust certificates may be higher than the safe harbors and,
accordingly, may not constitute reasonable servicing compensation. The related
prospectus supplement will include information regarding servicing fees paid to
a master servicer, a special servicer, any sub-servicer or their respective
affiliates necessary to determine whether the preceding safe harbor rules
apply.
If Stripped Bond Rules Apply. If the stripped bond rules apply, each
grantor trust fractional interest certificate will be treated as having been
issued with OID, subject, however, to the discussion below regarding the
treatment of some stripped bonds as market discount bonds and the discussion
regarding de minimis market discount. See "--Market Discount" below. Under the
stripped bond rules, you will be required to report interest income from your
grantor trust fractional interest certificate for each month in an amount equal
to the income that accrues on the certificate in that month calculated under a
constant yield method, in accordance with the rules of the Code relating to
OID.
The OID on a grantor trust fractional interest certificate will be the
excess of the certificate's stated redemption price over its issue price. The
issue price of a grantor trust fractional interest certificate will be equal to
the price you paid for the grantor trust fractional interest certificate. The
stated redemption price of a grantor trust fractional interest certificate will
be the sum of all payments to be made on the certificate, other
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than qualified stated interest, if any, as well as the certificate's share of
reasonable servicing fees and other expenses. See "--If Stripped Bond Rules Do
Not Apply" for a definition of qualified stated interest. In general, the
amount of income that accrues in any month would equal the product of your
adjusted basis in the grantor trust fractional interest certificate at the
beginning of the month (see "--Sales of Grantor Trust Certificates" below) and
your yield on the grantor trust fractional interest certificate. The yield
would be computed as the rate, compounded based on the regular interval between
payment dates, that, if used to discount your share of future payments on the
mortgage loans, would cause the present value of those future payments to equal
your price for the certificate. In computing yield under the stripped bond
rules, your share of future payments on the mortgage loans will not include any
payments made on any ownership interest in the mortgage loans retained by the
depositor, a master servicer, a special servicer, any sub-servicer or their
respective affiliates, but will include your share of any reasonable servicing
fees and other expenses.
Section 1272(a)(6) of the Code requires the use of a reasonable prepayment
assumption in accruing OID and adjustments in the accrual of OID when
prepayments do not conform to the prepayment assumption, for some categories of
debt instruments. Such categories include any pool of debt instruments the
yield on which may be affected by reason of prepayments. Accordingly, it
appears that Section 1272(a)(6) would apply to the certificates. It is unclear
whether the assumed prepayment rate would be determined based on conditions at
the time of the first sale of the grantor trust fractional interest certificate
or at the time of purchase of the grantor trust fractional interest certificate
by each specific holder. You are advised to consult your tax advisor about OID
in general and, in particular, how a prepayment assumption should be used in
reporting OID with respect to grantor trust fractional interest certificates.
In the case of a grantor trust fractional interest certificate acquired at
a price equal to the principal amount of the mortgage loans allocable to that
certificate, the use of a prepayment assumption generally would not have any
significant effect on the yield used in calculating accruals of interest
income. However, for a grantor trust fractional interest certificate acquired
at a discount or premium, the use of a reasonable prepayment assumption would
increase or decrease the yield, and thus accelerate or decelerate,
respectively, the reporting of income.
When a mortgage loan prepays in full, it appears that no separate item of
income or loss should be recognized upon a prepayment. Instead, a prepayment
should be treated as a partial payment of the stated redemption price of the
grantor trust fractional interest certificate and accounted for under a method
similar to that described for taking account of OID on REMIC regular
certificates. See "--REMICs--Original Issue Discount." It is unclear whether
any other adjustments would be required to reflect differences between an
assumed prepayment rate and the actual rate of prepayments.
In the absence of statutory or administrative clarification, it is
currently intended to base information reports or returns to the IRS and
certificateholders in transactions subject to the stripped bond rules on a
prepayment assumption that will be disclosed in the related prospectus
supplement and on a constant yield computed using a representative initial
offering price for each class of certificates. However, neither the depositor
nor any other person will make any representation that the mortgage loans will
in fact
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prepay at a rate conforming to the prepayment assumption or any other rate and
you should be aware that the use of a representative initial offering price
will mean that information returns or reports, even if otherwise accepted as
accurate by the IRS, will be accurate only as to the initial certificateholders
of each series who bought at that price.
Under Treasury regulation Section 1.1286-1(b), some stripped bonds are to
be treated as market discount bonds and, accordingly, any purchaser of these
bonds is to account for any discount on the bond as market discount rather than
OID. This treatment only applies, however, if immediately after the most recent
disposition of the bond by a person stripping one or more coupons from the bond
and disposing of the bond or coupon:
o there is no OID, or only a de minimis amount of OID, or
o the annual stated rate of interest payable on the stripped bond is no more
than one percentage point lower than the gross interest rate payable on
the original mortgage loan, before subtracting any servicing fee or any
stripped coupon.
The related prospectus supplement will disclose whether interest payable
on a grantor trust fractional interest certificate is more than one percentage
point lower than the gross interest rate payable on the mortgage loans. If the
OID or market discount on a grantor trust fractional interest certificate
determined under the stripped bond rules is less than 0.25% of the stated
redemption price multiplied by the weighted average maturity of the mortgage
loans, then this OID or market discount will be considered de minimis. OID or
market discount of only a de minimis amount will be included in income in the
same manner as de minimis OID and market discount described in "--If Stripped
Bond Rules Do Not Apply" and "--Market Discount" below.
If Stripped Bond Rules Do Not Apply. Subject to the discussion below on
OID, if the stripped bond rules do not apply to a grantor trust fractional
interest certificate, you will be required to report your share of the interest
income on the mortgage loans in accordance with your normal method of
accounting.
Recently enacted amendments to Section 1272(a)(6) of the Code require the
use of a prepayment assumption in determining the existence and accrual of
original issue discount associated with pools of debt instruments whose yield
may be affected by prepayments. No regulations have been issued interpreting
the application of this provision to securities such as the grantor trust
fractional interest certificates nor do the committee reports prepared by those
Congressional committees that examined such provision in the course of its
enactment provide guidance as to its intended application to such securities.
In the absence of such guidance, various interpretations are possible. For
example, the provision could be interpreted as requiring the pool of mortgage
loans underlying the grantor trust fractional interest certificates to be
segregated into two subpools consisting respectively of those mortgage loans
that had original issue discount upon their origination and those mortgage
loans that did not have original issue discount upon their origination. If so
interpreted, you would be required to report your share of the interest income
on the mortgage loans in the non-OID pool in accordance with your normal method
of accounting and, to the extent that the portion of your purchase price for
such certificates properly allocable to your interest in the non-OID pool were
less
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than its share of the aggregate principal amount of the mortgage loans in the
non-OID pool, you would be subject to the market discount rules described above
under "REMICs--Market Discount" or below, under "--Market Discount." In that
event, you would be required to treat the portion of your certificate
representing an interest in the OID pool as a single debt instrument issued on
the closing date with original issue discount equal to its pro rata share of
the aggregate of the unaccrued original issue discount on the mortgage loans in
the OID pool as of such date and subject to the rules for reporting original
issue discount described under "REMICs--Original Issue Discount." To the extent
that the portion of your purchase price for your certificate properly allocable
to the OID pool represented a discount greater than your pro rata share of the
aggregate original issue discount on the mortgage loans in the OID pool, you
would be subject to the market discount rules described above under "REMICs--
Market Discount."
Alternatively, a grantor trust fractional interest certificate could be
treated as a single debt instrument issued on the closing date and subject to
the rules described under "REMICs--Original Issue Discount" and "--Market
Discount." Other interpretations of the application of the original issue
discount rules to grantor trust fractional interest certificates are possible.
You are urged to consult your tax advisor concerning the application and effect
of such rules on your investment in such certificates.
The trustee will provide to any holder of a grantor trust fractional
interest certificate such information as such holder may reasonably request
from time to time with respect to original issue discount accruing on grantor
trust fractional interest certificates. See "--Grantor Trust Reporting" below.
The determination as to whether OID will be considered to be de minimis
will be calculated using the same test as in the REMIC discussion. See
"--REMICs--Original Issue Discount" above.
In the case of mortgage loans with adjustable or variable interest rates,
the related prospectus supplement will describe the manner that the OID rules
will be applied to those mortgage loans by the trustee or master servicer, in
preparing information returns to you and to the IRS.
If OID is in excess of a de minimis amount, all OID with respect to a
mortgage loan will be required to be accrued and reported in income each month,
based on a constant yield. The OID Regulations suggest that no prepayment
assumption is appropriate in computing the yield on prepayable obligations
issued with OID. In the absence of statutory or administrative clarification,
it currently is not intended to base information reports or returns to you and
to the IRS on the use of a prepayment assumption in transactions not subject to
the stripped bond rules. However, a prepayment assumption may be required for
computing yield on all mortgage-backed securities. You are advised to consult
your own tax advisors about the use of a prepayment assumption in reporting OID
on grantor trust fractional interest certificates. The prospectus supplement
for each series will specify whether and in what manner the OID rules will
apply to mortgage loans in each series.
If you purchased a grantor trust fractional interest certificate at a cost
less than the certificate's allocable portion of the aggregate remaining stated
redemption price of the
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mortgage loans held in the related trust, you will also be required to include
in gross income the certificate's daily portions of any OID on the mortgage
loans. However, each daily portion will be reduced, if your cost for the
grantor trust fractional interest certificate is in excess of the certificate's
allocable portion of the aggregate adjusted issue prices of the mortgage loans
held in the related trust, approximately in proportion to the ratio the excess
bears to the certificate's allocable portion of the aggregate OID remaining to
be accrued on the mortgage loans. The adjusted issue price of a mortgage loan
on any given day equals the sum of:
o the adjusted issue price, or, in the case of the first accrual period, the
issue price, of that mortgage loan at the beginning of the accrual period
that includes that day, and
o the daily portions of OID for all days during the accrual period before
that day.
The adjusted issue price of a mortgage loan at the beginning of any
accrual period will equal the issue price of that mortgage loan, increased by
the aggregate amount of OID on that mortgage loan that accrued in prior accrual
periods, and reduced by the amount of any payments made on that mortgage loan
in prior accrual periods of amounts included in its stated redemption price.
Unless otherwise provided in the related prospectus supplement, the
trustee or master servicer, will provide to any holder of a grantor trust
fractional interest certificate any information as the holder may reasonably
request from time to time about OID accruing on grantor trust fractional
interest certificates. See "--Grantor Trust Reporting" below.
Market Discount. If the stripped bond rules do not apply to the grantor
trust fractional interest certificate, you may be subject to the market
discount rules of the Code. The amendment to Section 1272(a)(6) of the Code
described under "--If Stripped Bond Rules Do Not Apply" above, could be
interpreted as requiring the use of a prepayment assumption in connection with
the determination, accrual and inclusion in income of market discount. If such
a requirement were applicable, a grantor trust fractional interest certificate
would probably be treated as a single aggregate debt instrument to which the
rules described under "REMICs--Market Discount" would apply. Alternatively, if
the requirement of a prepayment assumption were not applicable, the rules
described in the succeeding paragraphs of this section would be applicable
either on a mortgage loan-by-mortgage loan basis or on such a basis with
respect to the non-OID pool and on an aggregate basis with respect to the OID
pool. Other interpretations of the effect of the amendment to Section
1272(a)(6) on the determination and accrual of market discount are possible.
You are advised to consult your tax advisor concerning the application of the
market discount rules to grantor trust fractional interest certificates.
If a prepayment assumption generally is not required in the application of
the market discount rules to pools of debt instruments, a grantor trust
fractional interest certificate may be subject to the market discount rules to
the extent an interest in a mortgage loan is considered to have been purchased
at a market discount, that is, for a mortgage loan issued without OID, at a
purchase price less than its remaining stated redemption price, or for a
mortgage loan issued with OID, at a purchase price less than its adjusted issue
price. If market discount is in excess of a de minimis amount, you will
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generally be required to include in income in each month the amount of discount
that has accrued through that month that has not previously been included in
income, but limited, in the case of the portion of that discount that is
allocable to any mortgage loan, to the payment of stated redemption price on
the mortgage loan that is received by, or, for accrual basis
certificateholders, due to, the trust in that month. You may elect to include
market discount in income currently as it accrues under a constant yield method
based on the yield of the certificate to you rather than including it on a
deferred basis in accordance with this paragraph under rules similar to those
described in "--REMICs--Market Discount" above.
The Treasury Department is authorized to issue regulations on the method
for accruing market discount on debt instruments, the principal of which is
payable in installments. Until regulations are issued, rules described in the
committee report apply. Under those rules, in each accrual period, market
discount on the mortgage loans should accrue, at the holder's option:
o on the basis of a constant yield method,
o in the case of a mortgage loan issued without OID, in an amount that bears
the same ratio to the total remaining market discount as the stated
interest paid in the accrual period bears to the total stated interest
remaining to be paid on the mortgage loan as of the beginning of the
accrual period, or
o in the case of a mortgage loan issued with OID, in an amount that bears
the same ratio to the total remaining market discount as the OID accrued
in the accrual period bears to the total OID remaining at the beginning of
the accrual period.
The prepayment assumption, if any, used in calculating the accrual of OID
is to be used in calculating the accrual of market discount. The effect of
using a prepayment assumption could be to accelerate the reporting of discount
income. Because the regulations referred to in this paragraph have not been
issued, it is not possible to predict what effect these regulations might have
on the tax treatment of a mortgage loan purchased at a discount in the
secondary market.
Because the mortgage loans will provide for periodic payments of stated
redemption price, any discount may be required to be included in income at a
rate that is not significantly slower than the rate at which the discount would
be included in income if it were OID.
Market discount on mortgage loans considered to be de minimis will be
includible in income under de minimis rules similar to those described in
"--REMICs--Original Issue Discount" above with the exception that it is unclear
whether a prepayment assumption will be used in the application of these rules
to the mortgage loans.
Further, under the rules described in "--REMICs--Market Discount," any
discount that is not OID and exceeds a de minimis amount may require the
deferral of interest expense deductions attributable to accrued market discount
not yet includible in income, unless an election has been made to report market
discount currently as it accrues.
Premium. If you are treated as acquiring the underlying mortgage loans at
a premium, that is, at a price in excess of their remaining stated redemption
price, you
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may elect to amortize using a constant yield method the portion of the premium
allocable to mortgage loans originated after September 27, 1985. Amortizable
premium is treated as an offset to interest income on the related debt
instrument, rather than as a separate interest deduction. However, premium
allocable to mortgage loans originated before September 28, 1985 or to mortgage
loans for which an amortization election is not made, should be allocated among
the payments of stated redemption price on the mortgage loan and be allowed as
a deduction as these payments are made, or, for a certificateholder using the
accrual method of accounting, when these payments are due.
It is unclear whether a prepayment assumption should be used in computing
amortization of premium. If premium is not subject to amortization using a
prepayment assumption and a mortgage loan prepays in full, if you hold a
grantor trust fractional interest certificate acquired at a premium, you should
recognize a loss equal to the difference between the portion of the prepaid
principal amount of the mortgage loan that is allocable to the certificate and
the portion of the adjusted basis of the certificate that is allocable to the
mortgage loan. If a prepayment assumption is used to amortize the premium, it
appears that this loss would be unavailable. Instead, if a prepayment
assumption is used, a prepayment should be treated as a partial payment of the
stated redemption price of the grantor trust fractional interest certificate
and accounted for under a method similar to that described for taking account
of OID on REMIC regular certificates. See "--REMICs--Original Issue Discount."
It is unclear whether any other adjustments would be required for differences
between the prepayment assumption and the actual rate of prepayments.
Taxation of Owners of Grantor Trust Strip Certificates.
The stripped coupon rules of Section 1286 of the Code will apply to the
grantor trust strip certificates. Except as described above in "--If Stripped
Bond Rules Apply," no regulations or published rulings under these rules have
been issued and some uncertainty exists as to how it will be applied to
securities like the grantor trust strip certificates. Accordingly, you should
consult your tax advisor about the method for reporting income or loss on
grantor trust strip certificates.
The OID Regulations do not apply to stripped coupons, although they
provide general guidance as to how the OID sections of the Code will be
applied. In addition, the discussion below is subject to the discussion under
"--Possible Application of Contingent Payment Rules" below and assumes that the
holder of a grantor trust strip certificate will not own any grantor trust
fractional interest certificates.
Under the stripped coupon rules, it appears that OID will be required to
be accrued in each month on the grantor trust strip certificates based on a
constant yield method. In effect, you would include as interest income in each
month an amount equal to the product of your adjusted basis in the grantor
trust strip certificate at the beginning of the month and the yield of the
grantor trust strip certificate to you. This yield would be calculated based on
the price you paid for that grantor trust strip certificate and the payments
remaining to be made on the certificate at the time of the purchase, plus an
allocable portion of the servicing fees and expenses to be paid on the mortgage
loans. See "--Taxation of Owners of Grantor Trust Fractional Interest
Certificates--If Stripped Bond Rules Apply" above.
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As noted above, the Code requires that a prepayment assumption be used in
computing the accrual of OID on debt instruments the yield on which may be
affected by reason of prepayment, and that adjustments be made in the amount
and rate of accrual of this OID when prepayments do not conform to the
prepayment assumption. Accordingly, it appears that Section 1272(a)(6) would
apply to the grantor trust strip certificates. It is also unclear whether the
assumed prepayment rate would be determined based on conditions at the time of
the first sale of the grantor trust strip certificate or, at the time of
purchase of the grantor trust strip certificate by each specific holder.
The accrual of income on the grantor trust strip certificates will be
significantly slower if a prepayment assumption is permitted to be made than if
yield is computed assuming no prepayments. In the absence of statutory or
administrative clarification, it currently is intended to base information
returns or reports to the IRS and to you on the prepayment assumption disclosed
in the related prospectus supplement and on a constant yield computed using a
representative initial offering price for each class of certificates. However,
neither the depositor nor any other person will make any representation that
the mortgage loans will in fact prepay at a rate conforming to the prepayment
assumption or at any other rate and you should be aware that the use of a
representative initial offering price will mean that information returns or
reports, even if otherwise accepted as accurate by the IRS, will be accurate
only as to the initial certificateholders of each series who bought at that
price. You should consult your tax advisor regarding the use of the prepayment
assumption.
It is unclear under what circumstances, if any, the prepayment of a
mortgage loan will give rise to a loss to you. If a grantor trust strip
certificate is treated as a single instrument, rather than an interest in
discrete mortgage loans, and the effect of prepayments is taken into account in
computing yield on the grantor trust strip certificate, it appears that no loss
may be available as a result of any particular prepayment unless prepayments
occur at a rate faster than the prepayment assumption. However, if a grantor
trust strip certificate is treated as an interest in discrete mortgage loans,
then when a mortgage loan is prepaid, you should be able to recognize a loss
equal to the portion of the adjusted issue price of the grantor trust strip
certificate that is allocable to the prepaid mortgage loan.
Possible Application of Contingent Payment Rules. The contingent payment
rules do not apply to any debt instrument that is subject to Section
1272(a)(6). As noted above in "--If Stripped Bond Rules Apply," Section
1272(a)(6) applies to any pool of debt instruments the yield on which may be
affected by reason of prepayments. Section 1272(a)(6) also applies to any debt
instrument if payments under such debt instrument may be accelerated by reason
of prepayments of other obligations securing such debt instrument. Accordingly,
it appears that the contingent payment rules will not apply to the grantor
trust strip certificates.
If the contingent payment rules under the OID Regulations were to apply,
the issuer of a grantor trust strip certificate would determine a projected
payment schedule with respect to such grantor trust strip certificate. You
would be bound by the issuer's projected payment schedule, which would consist
of all noncontingent payments and a projected amount for each contingent
payment based on the projected yield (as described below) of the grantor trust
strip certificate. The projected amount of each
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payment would be determined so that the projected payment schedule reflected
the projected yield reasonably expected to be received by the holder of a
grantor trust strip certificate. The projected yield referred to above would be
a reasonable rate, not less than the "applicable Federal rate" that, as of the
issue date, reflected general market conditions, the credit quality of the
issuer, and the terms and conditions of the mortgage loans. You would be
required to include as interest income in each month the adjusted issue price
of the grantor trust strip certificate at the beginning of the period
multiplied by the projected yield, and would add to, or subtract from, such
income any variation between the payment actually received in such month and
the payment originally projected to be made in such month. In addition, income
that might otherwise be capital gain may be recharacterized as ordinary income.
You should consult your tax advisor concerning the possible application of
the contingent payment rules to the grantor trust strip certificates.
Sales of Grantor Trust Certificates.
Except as provided below, any gain or loss recognized on the sale or
exchange of a grantor trust certificate (equal to the difference between the
amount realized on the sale or exchange of a grantor trust certificate and its
adjusted basis) will be capital gain or loss if you hold the grantor trust
certificate as a capital asset. The adjusted basis of a grantor trust
certificate generally will equal its cost, increased by any income you reported
on the grantor trust certificate, including OID and market discount income, and
reduced, but not below zero, by any previously reported losses, any amortized
premium and by any distributions on the grantor trust certificate. Capital
losses may not, in general, be offset against ordinary income.
Gain or loss from the sale of a grantor trust certificate may be partially
or wholly ordinary and not capital in some circumstances. Gain attributable to
accrued and unrecognized market discount will be treated as ordinary income, as
will gain or loss recognized by banks and other financial institutions subject
to Section 582(c) of the Code. In addition, if the contingent payment rules
applied, certain income realized upon the sale of a certificate may be
characterized as ordinary.
Finally, a taxpayer may elect to have net capital gain taxed at ordinary
income rates rather than capital gains rates to include the net capital gain in
total net investment income for that taxable year. A taxpayer would make this
election for purposes of the rule that limits the deduction of interest on
indebtedness incurred to purchase or carry property held for investment to a
taxpayer's net investment income.
Grantor Trust Reporting.
Unless otherwise provided in the related prospectus supplement, the
trustee or master servicer will furnish to you with each distribution a
statement setting forth the amount of the distribution allocable to principal
and to interest at the related pass-through rate on the underlying mortgage
loans. In addition, the trustee or master servicer will furnish, within a
reasonable time after the end of each calendar year, to you provided you held a
grantor trust certificate at any time during the year, information regarding
the amount of servicing compensation received by the master servicer, the
special servicer or any sub-servicer, and other customary factual information
as the
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depositor or the reporting party deems necessary or desirable to enable you to
prepare your tax returns and will furnish comparable information to the IRS as
and when required by law to do so. Because the rules for accruing discount and
amortizing premium on the grantor trust certificates are uncertain, there is no
assurance the IRS will agree with the trustee's or master servicer's,
information reports of these items of income and expense. Additionally, the
information reports, even if otherwise accepted as accurate by the IRS, will be
accurate only as to the initial certificateholders that bought their
certificates at the initial offering price used in preparing the reports.
Backup Withholding.
In general, the rules described in "--REMICs--Backup Withholding with
Respect to REMIC Certificates" will also apply to grantor trust certificates.
Foreign Investors.
In general, the discussion with respect to REMIC regular certificates in
"--REMICs--Foreign Investors in REMIC Certificates" applies to grantor trust
certificates except that grantor trust certificates will, unless otherwise
disclosed in the related prospectus supplement, be eligible for exemption from
U.S. withholding tax, subject to the conditions described in that discussion,
only if the related mortgage loans were originated after July 18, 1984.
If the interest on a grantor trust certificate would be exempt under
Sections 871(h)(1) and 881(c) of the Code from United States withholding tax,
and the grantor trust certificate is not held in connection with a
certificateholder's trade or business in the United States, the grantor trust
certificate will not be subject to United States estate taxes in the estate of
a non-resident alien individual.
STATE AND OTHER TAX CONSEQUENCES
In addition to the federal income tax consequences described in "Federal
Income Tax Consequences," you should consider the state and local tax
consequences of the acquisition, ownership and disposition of the offered
certificates. State tax law may differ substantially from the corresponding
federal law, and the discussion above does not purport to describe any aspect
of the income tax laws of any state or other jurisdiction. Therefore, you
should consult your own tax advisors about the various tax consequences of
investments in the offered certificates.
ERISA CONSIDERATIONS
The Employee Retirement Income Security Act of 1974 or "ERISA" and the
Code impose requirements on employee benefit plans and on other retirement
plans and arrangements, including individual retirement accounts and annuities,
Keogh plans and some entities in which the plans have invested, such as
collective investment funds, insurance company separate accounts, and some
insurance company general accounts. We refer to the plans collectively, as
"benefit plans." In addition, ERISA imposes duties on persons who are
fiduciaries of plans subject to ERISA in connection with the investment of plan
assets. Governmental plans and some church plans are not subject to ERISA
requirements but are subject to the provisions of other applicable federal and
state law which may be substantially similar to ERISA and the Code.
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ERISA imposes on plan fiduciaries general fiduciary requirements,
including those of investment prudence and diversification and the requirement
that a benefit plan's investments be made in accordance with the documents
governing the benefit plan. In addition, Section 406 of ERISA and Section 4975
of the Code prohibit a broad range of transactions involving assets of a
benefit plan and persons called "parties in interest," who have specified
relationships to the benefit plan. Unless an exemption is available, a benefit
plan's purchase or holding of a certificate may result in a prohibited
transaction if any of the depositor, the trustee, the master servicer, the
manager, the special servicer or a sub-servicer is a party in interest with
respect to that benefit plan. If a party in interest participates in a
prohibited transaction that is not exempt, it may be subject to excise tax and
other liabilities under ERISA and the Code.
PLAN ASSET REGULATIONS
If a benefit plan purchases offered certificates, the underlying mortgage
loans, MBS and other assets included in the related trust may be deemed "plan
assets" of that benefit plan. A regulation of the United States Department of
Labor or "DOL" at 29 C.F.R. Section 2510.3-101 provides that when a benefit
plan acquires an equity interest in an entity, the plan's assets include both
the equity interest and an undivided interest in each of the underlying assets
of the entity, unless some exceptions not applicable here apply, or unless the
equity participation in the entity by "benefit plan investors," i.e., benefit
plans and some employee benefit plans not subject to ERISA or the Code, is not
"significant," both as defined in the regulation. Equity participation in a
trust will be significant on any date if immediately after the most recent
acquisition of any certificate, 25% or more of any class of certificates is
held by benefit plan investors.
Any person who has discretionary authority or control respecting the
management or disposition of benefit plan assets, and any person who provides
investment advice with respect to benefit plan assets for a fee, is a fiduciary
of the investing benefit plan. If the mortgage loans, MBS and other assets
included in a trust constitute benefit plan assets, then any party exercising
management or discretionary control regarding those assets, such as the master
servicer, the special servicer, any sub-servicer, the manager, the trustee, the
obligor under any credit enhancement mechanism, or certain affiliates of those
parties may be deemed to be a plan "fiduciary" and may be subject to the
fiduciary responsibility and prohibited transaction provisions of ERISA and
Section 4975 of the Code with respect to the investing plan. In addition, if
the mortgage loans, MBS and other assets included in a trust constitute plan
assets, the purchase of certificates by, on behalf of or with assets of a plan,
as well as the operation of the trust, may result in a prohibited transaction
under ERISA or Section 4975 of the Code.
PROHIBITED TRANSACTION EXEMPTION
On March 29, 1994, the DOL issued an individual exemption (Prohibited
Transaction Exemption 94-29, 59 FR 14675) to certain of the depositor's
affiliates, which was amended by two additional exemptions dated July 21, 1997
(Prohibited Transaction Exemption 97-34, 62 FR 39021) and November 13, 2000
(Prohibited Transaction Exemption 2000-58, 65 FR 67765). We refer to these
three 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,
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relating to the servicing and operation of mortgage pools and the purchase,
sale and holding of mortgage pass-through securities or securities denominated
as debt instruments that represent interests in an investment pool, 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 seven 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 may be
subordinated to the rights and interests evidenced by the other
certificates of the same trust only if the offered certificates are issued
in a designated transaction, which requires that the assets of the trust
consist of certain types of consumer receivables, including certain
mortgage obligations secured by real property.
o the offered certificates, at the time of acquisition by or with assets of
a plan, must be rated in one of the three (or, for designated
transactions, four) highest generic rating categories by Standard & Poor's
Ratings Services, a division of The McGraw-Hill Companies, Inc., Moody's
Investors Service, Inc., or Fitch.
o the trustee cannot be an affiliate of any member of the "restricted group"
which consists of any underwriter, the depositor, the master servicer, any
special servicer, any sub-servicer, any obligor under any credit
enhancement mechanism, any manager, any mortgagor with respect to the
assets constituting the related trust constituting more than 5% of the
aggregate unamortized principal balance of the trust assets in the related
trust as of the date of initial issuance of the certificates, and their
affiliates.
o the sum of all payments made to and retained by the underwriters must
represent not more than reasonable compensation for underwriting the
certificates; the sum of all payments made to and retained by the
depositor under the assignment of the trust assets to the related trust
must represent not more than the fair market value of these obligations;
and the sum of all payments made to and retained by the master servicer,
any special servicer, any sub-servicer and any manager must represent not
more than reasonable compensation for the person's services under the
related pooling and servicing agreement and reimbursement of that person's
reasonable expenses in connection therewith.
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o the investing benefit plan must be an accredited investor as defined in
Rule 501(a)(1) of Regulation D under the Securities Act.
o for certain types of issuers, the governing documents must contain
provisions intended to protect the issuer's assets from creditors of the
sponsor.
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 (or, for designated transactions, four) highest categories of one of
the rating agencies specified above for at least one year before the
acquisition of certificates by or with assets of a plan; and
o certificates in other investment pools must have been purchased by
investors other than plans for at least one year before any acquisition of
certificates by or with assets of a plan.
In addition, the exemption requires that the corpus of the trust consist
solely of some types of assets, including mortgage obligations such as those in
the trusts and property which had secured those obligations. However, it is not
clear whether some certificates that may be offered by this prospectus would
constitute "certificates" for purposes of the exemption, including but not
limited to:
o certificates evidencing an interest in mortgage loans secured by liens on
real estate projects under construction,
o certificates evidencing an interest in a trust including equity
participations,
o certificates evidencing an interest in a trust including cash flow
agreements.
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
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taxes imposed by Sections 4975(a) and (b) of the Code by reason of Section
4975(c)(1)(E) of the Code, in connection with the direct or indirect sale,
exchange or transfer of certificates in the initial issuance of certificates
between the depositor or an underwriter and a benefit plan when the fiduciary
of that benefit plan is also a mortgagor, only if, among other requirements,
o the fiduciary, or its affiliate, is a mortgagor with respect to 5% or less
of the fair market value of the trust assets and is otherwise not a member
of the restricted group;
o a benefit plan's investment in offered certificates does not exceed 25% of
all of the offered certificates outstanding at the time of the
acquisition;
o immediately after the acquisition, no more than 25% of the assets of the
benefit plan are invested in certificates representing an interest in
trusts, including the relevant trust, containing assets sold or serviced
by the master servicer; and
o in the case of the acquisition of the offered certificates in connection
with their initial issuance, at least 50% of the offered certificates are
acquired by persons independent of the restricted group and at least 50%
of the aggregate interest in the trust is acquired by persons independent
of the restricted group.
Further, the exemption may provide relief from the restrictions imposed by
Sections 406(a), 406(b) and 407 of ERISA, and the taxes imposed by Sections
4975(a) and (b) of the Code by reason of Section 4975(c) of the Code, for
transactions in connection with the servicing, management and operation of the
pools of mortgage assets. This relief requires that, in addition to the general
requirements described above, (a) transactions are carried out in accordance
with the terms of a binding pooling and servicing agreement and (b) the pooling
and servicing agreement is provided to, or described in all material respects
in the prospectus or private placement memorandum provided to, investing
benefit plans before their purchase of offered certificates issued by the
trust. The depositor expects these specific conditions will be satisfied with
respect to the certificates.
The exemption also may provide relief from the restrictions imposed by
Sections 406(a) and 407(a) of ERISA, and the taxes imposed by Sections 4975(a)
and (b) of the Code by reason of Sections 4975(c)(1)(A) through (D) of the
Code, if restrictions would otherwise apply merely because a person is deemed
to be a party in interest, with respect to an investing plan by virtue of
providing services to the plan, or by virtue of having certain specified
relationships to that person, solely as a result of the plan's ownership of
certificates.
Before purchasing an offered certificate, if you are a fiduciary or other
investor of plan assets, you should confirm for yourself:
o that the certificates constitute "certificates" for purposes of the
exemption, and
o that the specific and general conditions required by the exemption and the
other requirements provided in the exemption are satisfied.
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
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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 four rating categories by at least one
rating agency at the time of purchase, unless the benefit plan is an insurance
company general account that represents and warrants that it is eligible for,
and meets all of the requirements of, Sections I and III of Prohibited
Transaction Class Exemption ("PTCE") 95-60, which are described below.
Investors in offered certificates should consider the possibility that the
rating of a security may change during the period the security is held. If the
rating were to decline below BBB--, the security could no longer be re-sold to
a benefit plan under the exemption.
The exemption does not provide relief for the purchase, sale or holding of
classes of offered certificates rated below the top four rating categories. The
trustee will not register transfers of such offered certificates to you if you
are a benefit plan, if you are acting on behalf of any benefit plan, or if you
are using plan assets to effect that acquisition unless you represent and
warrant that:
o the source of funds used to purchase those certificates is an "insurance
company general account" as that term is defined in PTCE 95-60, and
o that general account is eligible for, and satisfies all of the conditions
of Sections I and III of PTCE 95-60 as of the date of the acquisition of
those certificates.
In addition to making your own determination that exemptive relief is
available under the exemption, you should consider your general fiduciary
obligations under ERISA in determining whether to purchase any offered
certificates with assets of a benefit plan. You should also consider whether
other class exemptions granted by the DOL may provide relief from some of the
prohibited transaction provisions of ERISA and the related excise tax
provisions of Section 4975 of the Code. For example, as noted above, Sections I
and III of PTCE 95-60, regarding transactions by insurance company general
accounts, may provide relief in some cases. Insurance company general accounts
should also consider the possible impact of Section 401(c) of ERISA and the
final regulations under that section. The prospectus supplement with respect to
a series of certificates may contain additional information regarding the
application of the exemption, PTCE 95-60 or any other DOL exemption, with
respect to the certificates offered by that prospectus supplement.
If you are a fiduciary or other plan investor and you would like to
purchase offered certificates on behalf of or with assets of a plan, you should
consult with your counsel about whether ERISA and the Code impose restrictions
on the investment, and whether the exemption or any other prohibited
transaction exemption may provide relief from those restrictions. These
exemptions may not apply to your investment in the certificates. Even if an
exemption does apply, it may not apply to all prohibited transactions that may
occur in connection with an investment.
TAX EXEMPT INVESTORS
A "tax-exempt investor" or a plan that is exempt from federal income
taxation under Section 501 of the Code nonetheless will be subject to federal
income taxation to
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the extent that its income is "unrelated business taxable income" ("UBTI")
within the meaning of Section 512 of the Code. All "excess inclusions" of a
REMIC allocated to a REMIC Residual Certificate held by a tax-exempt investor
will be considered UBTI and thus will be subject to federal income tax. See
"Federal Income Tax Consequences--Excess Inclusions."
LEGAL INVESTMENT
If so specified in the related prospectus supplement, the offered
certificates will constitute "mortgage related securities" for purposes of the
Secondary Mortgage Market Enhancement Act of 1984 or SMMEA. Accordingly,
investors whose investment authority is subject to legal restrictions should
consult their legal advisors to determine whether and to what extent the
offered certificates constitute legal investments for them.
Usually, only classes of offered certificates that:
o are rated in one of the two highest rating categories by one or more
rating agencies and
o are part of a series evidencing interests in a trust consisting of loans
secured by a single parcel of real estate upon which is located a dwelling
or mixed residential and commercial structure, such as some multifamily
loans, and originated by types of originators specified in SMMEA,
will be "mortgage related securities" for purposes of SMMEA. "Mortgage related
securities" are legal investments to the same extent that, under applicable
law, obligations issued by or guaranteed as to principal and interest by the
United States or any agency or instrumentality thereof constitute legal
investments for persons, trusts, corporations, partnerships, associations,
business trusts and business entities, including depository institutions,
insurance companies and pension funds created under or existing under the laws
of the United States or of any state, the authorized investments of which are
subject to state regulation. Under SMMEA, if a state enacted legislation before
October 3, 1991 that specifically limits the legal investment authority of any
such entities as to "mortgage related securities," offered certificates would
constitute legal investments for entities subject to that legislation only to
the extent provided in the legislation.
SMMEA also amended the legal investment authority of federally chartered
depository institutions as follows: federal savings and loan associations and
federal savings banks may invest in, sell or otherwise deal with "mortgage
related securities" without limitation as to the percentage of their assets
represented thereby, federal credit unions may invest in such securities, and
national banks may purchase such securities for their own account without
regard to the limitations generally applicable to investment securities
provided in 12 U.S.C. 24 (Seventh), subject in each case to such regulations as
the applicable federal regulatory authority may prescribe.
Upon the issuance of final implementing regulations under the Riegle
Community Development and Regulatory Improvement Act of 1994 and subject to any
limitations the regulations may impose, a modification of the definition of
"mortgage related securities" will become effective to expand the types of
loans to which such securities
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may relate to include loans secured by "one or more parcels of real estate upon
which is located one or more commercial structures." In addition, the related
legislative history states that this expanded definition includes multifamily
residential loans secured by more than one parcel of real estate upon which is
located more than one structure. Until September 23, 2001 any state may enact
legislation limiting the extent to which "mortgage related securities" under
this expanded definition would constitute legal investments under that state's
laws.
The Federal Financial Institutions Examination Council has issued a
supervisory policy statement applicable to all depository institutions, setting
forth guidelines for and significant restrictions on investments in "high-risk
mortgage securities." The policy statement has been adopted by the Federal
Reserve Board, the Office of the Comptroller of the Currency, the FDIC and the
OTS. The policy statement indicates that a mortgage derivative product will be
deemed to be high risk if it exhibits greater price volatility than a standard
fixed rate thirty-year mortgage security. According to the policy statement,
before purchase, a depository institution will be required to determine whether
a mortgage derivative product that it is considering acquiring is high-risk,
and if so that the proposed acquisition would reduce the institution's overall
interest rate risk. Reliance on analysis and documentation obtained from a
securities dealer or other outside party without internal analysis by the
institution would be unacceptable. There can be no assurance as to which
classes of certificates, including offered certificates, will be treated as
high-risk under the policy statement.
The predecessor to the Office of Thrift Supervision or OTS issued a
bulletin, entitled, "Mortgage Derivative Products and Mortgage Swaps," which is
applicable to thrift institutions regulated by the OTS. The bulletin
established guidelines for the investment by savings institutions in
"high-risk" mortgage derivative securities and limitations on the use of such
securities by insolvent, undercapitalized or otherwise "troubled" institutions.
According to the bulletin, "high-risk" mortgage derivative securities include
securities having certain specified characteristics, which may include some
classes of offered certificates. In addition, the National Credit Union
Administration has issued regulations governing federal credit union
investments which prohibit investment in certain specified types of securities,
which may include some classes of offered certificates. Similar policy
statements have been issued by regulators having jurisdiction over other types
of depository institutions.
There may be other restrictions on the ability of investors either to
purchase some classes of offered certificates or to purchase any class of
offered certificates representing more than a specified percentage of the
investor's assets. The depositor will make no representations as to the proper
characterization of any class of offered certificates for legal investment or
other purposes, or as to the ability of particular investors to purchase any
class of offered certificates under applicable legal investment restrictions.
These uncertainties may adversely affect the liquidity of any class of offered
certificates. Accordingly, all investors whose investment activities are
subject to legal investment laws and regulations, regulatory capital
requirements or review by regulatory authorities should consult with their
legal advisors in determining whether and to what extent the offered
certificates of any class constitute legal investments or are subject to
investment, capital or other restrictions.
109
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USE OF PROCEEDS
The net proceeds to be received from the sale of the certificates of any
series will be applied by the depositor to the purchase of trust assets or will
be used by the depositor for general corporate purposes. The depositor expects
to sell the certificates from time to time, but the timing and amount of
offerings of certificates will depend on a number of factors, including the
volume of mortgage assets acquired by the depositor, prevailing interest rates,
availability of funds and general market conditions.
METHOD OF DISTRIBUTION
The certificates offered by this prospectus and by the related prospectus
supplements will be offered in series through one or more of the methods
described below. The prospectus supplement for each series will describe the
method of offering for that series and will state the net proceeds to the
depositor from the sale.
The depositor intends that offered certificates will be offered through
the following methods from time to time and that offerings may be made
concurrently through more than one of these methods or that an offering of the
offered certificates of a particular series may be made through a combination
of two or more of the following methods:
o by negotiated firm commitment or best efforts underwriting and public
re-offering by underwriters;
o by placements by the depositor with institutional investors through
dealers; and
o by direct placements by the depositor with institutional investors.
In addition, the offered certificates of a series may be offered in whole
or in part to the seller of the related mortgage assets that would comprise the
trust for those certificates or to one or more of its affiliates.
If underwriters are used in a sale of any offered certificates, other than
in connection with an underwriting on a best efforts basis, the certificates
will be acquired by the underwriters for their own account and may be resold
from time to time in one or more transactions, including negotiated
transactions, at fixed public offering prices or at varying prices to be
determined at the time of sale or at the time of commitment therefor. The
underwriters may be broker-dealers affiliated with the depositor whose
identities and relationships to the depositor will be as provided in the
related prospectus supplement. The depositor or the underwriters may sell
certificates to affiliates of the depositor. The related prospectus supplement
will identify those affiliates and the method or methods by which the
affiliates may resell those certificates. The managing underwriter or
underwriters for the offer and sale of offered certificates of a particular
series will be set forth on the cover of the prospectus supplement relating to
that series and the members of the underwriting syndicate, if any, will be
named in the prospectus supplement.
In connection with the sale of offered certificates, underwriters may
receive compensation from the depositor or from purchasers of the offered
certificates in the form of discounts, concessions or commissions. Underwriters
and dealers participating in the distribution of the offered certificates may
be deemed to be underwriters in connection with those certificates, and any
discounts or commissions received by them
110
<PAGE>
from the depositor and any profit on the resale of offered certificates by them
may be deemed to be underwriting discounts and commissions under the Securities
Act.
It is anticipated that the underwriting agreement pertaining to the sale
of the offered certificates of any series will provide that the obligations of
the underwriters will be subject to conditions precedent, that the underwriters
will be obligated to purchase all of those certificates if any are purchased,
other than in connection with an underwriting on a best efforts basis, and
that, in limited circumstances, the depositor will indemnify the several
underwriters, and the underwriters will indemnify the depositor against
specified civil liabilities, including liabilities under the Securities Act, or
will contribute to payments required to be made in respect thereof.
The prospectus supplement for any series offered by placements through
dealers will contain information regarding the nature of the offering and any
agreements to be entered into between the depositor and purchasers of offered
certificates of that series.
The depositor anticipates that the certificates offered hereby will be
sold primarily to institutional investors. Purchasers of offered certificates,
including dealers, may, depending on the facts and circumstances of the
purchases, be deemed to be "underwriters" within the meaning of the Securities
Act, in connection with reoffers and sales by them of offered certificates.
Holders of offered certificates should consult with their legal advisors in
this regard before any reoffer or sale.
If and to the extent required by applicable law or regulation, this
prospectus and the applicable prospectus supplement will also be used by Newman
and Associates, Inc., an affiliate of the depositor, after the completion of
the offering in connection with offers and sales related to market-making
transactions in the offered securities in which Newman and Associates, Inc. act
as principal. Sales will be made at negotiated prices determined at the time of
sales.
LEGAL MATTERS
Unless we tell you otherwise in the related prospectus supplement, certain
legal matters in connection with the certificates of each series, including
certain federal income tax consequences, will be passed upon for the depositor
by Mayer, Brown & Platt, New York, New York or Orrick, Herrington & Sutcliffe
LLP, New York, New York.
FINANCIAL INFORMATION
A new trust will be formed for each series of certificates, and no trust
will engage in any business activities or have any assets or obligations before
the issuance of the related series of certificates. Accordingly, no financial
statements for any trust will be included in this prospectus or in the related
prospectus supplement. The depositor has determined that its financial
statements will not be material to the offering of any offered certificates.
111
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WHERE YOU CAN FIND ADDITIONAL INFORMATION
The depositor has filed a registration statement with the Commission
relating to the certificates. This prospectus is part of the registration
statement, but the registration statement includes additional information.
We will file with the Commission all required annual, monthly and special
Commission reports, as well as other information about the trusts.
You may read and copy any reports, statements or other information we file
at the Commission's Public Reference Room at 450 Fifth Street, N.W.,
Washington, D.C. 20549. You may obtain information on the operation of the
Public Reference Room by calling the Commission at 1-800-732-0330. You can also
request copies of these documents, upon payment of a duplicating fee, by
writing to the Commission. The Commission also maintains an Internet site that
contains reports, proxy and information statements, and other information
regarding issuers that file electronically with the Commission. The address of
the Commission's Internet site is www.sec.gov.
REPORTS TO CERTIFICATEHOLDERS
Monthly statements will be sent to you by the master servicer, manager or
trustee, as applicable. These statements will keep you informed about the trust
for your series of certificates. See "Description of the Certificates--Reports
to Certificateholders." These monthly reports will present financial
information that no independent certified public accountant will have examined.
INCORPORATION OF INFORMATION BY REFERENCE
The Commission allows us to "incorporate by reference" information we file
with it, which means that we can disclose important information to you by
referring you to documents which contain that information. Exhibits to these
documents may be omitted, unless the exhibits are specifically incorporated by
reference in the documents. Information incorporated in this prospectus by
reference is considered to be part of this prospectus. Certain information that
we will file with the Commission in the future will automatically update the
information in this prospectus. In all cases, you should rely on the later
information over different information included in this prospectus or the
prospectus supplement. We incorporate by reference any future annual, monthly
and special Commission reports filed by or on behalf of the trust until we
terminate our offering of the certificates. At your request, we will send you
copies of these documents and reports at no charge. Send your written request
to:
GMAC Commercial Mortgage Securities, Inc.
200 Witmer Road
Horsham, Pennsylvania 19044
(215) 328-3164
112
<PAGE>
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.
113
<PAGE>
GLOSSARY
ACCRUED CERTIFICATE INTEREST--For each class of certificates, other than
some classes of stripped interest certificates and some REMIC residual
certificates, the Accrued Certificate Interest for each distribution date will
be equal to interest at the applicable pass-through rate accrued for a
specified period, generally the most recently ended calendar month, on the
outstanding certificate balance of that class of certificates immediately
before that distribution date.
AVAILABLE DISTRIBUTION AMOUNT--As more specifically described in the
related prospectus supplement, the Available Distribution Amount for any series
of certificates and any distribution date will refer to the total of all
payments or other collections or advances made by the servicer in lieu of those
payments on the mortgage assets and any other assets included in the related
trust that are available for distribution to the holders of certificates of
that series on that date.
DEBT SERVICE COVERAGE RATIO--Unless more specifically described in the
related prospectus supplement, the debt service coverage ratio means, for any
mortgage loan, or for a mortgage loan evidenced by one mortgage note, but
secured by multiple mortgaged properties,
o the Underwritten Cash Flow for the mortgaged property or mortgaged
properties, divided by
o the annual debt service for the mortgage loan.
EXCESS FUNDS--Unless we tell you otherwise in the related prospectus
supplement, Excess Funds will, generally, represent that portion of the amounts
distributable in respect of the certificates of any series on any distribution
date that represent
o interest received or advanced on the mortgage assets in the related trust
that is in excess of the interest currently accrued on the certificates of
that series, or
o prepayment premiums, payments from equity participations or any other
amounts received on the mortgage assets in the related trust that do not
constitute interest thereon or principal thereof.
LOAN-TO-VALUE RATIO--Unless more specifically described in the related
prospectus supplement, the Loan-to-value Ratio of a mortgage loan at any given
time is the ratio expressed as a percentage of
o the then outstanding principal balance of the mortgage loan and any loans
senior to the mortgage loan that are secured by the related mortgaged
property; to
o the value of the related mortgaged property.
PREPAYMENT PERIOD--The Prepayment Period is the specified period,
generally corresponding to the related due period, during which prepayments and
other unscheduled collections on the mortgage loans in the related trust must
be received to be distributed on a particular distribution date.
PURCHASE PRICE--The Purchase Price will be equal to either the unpaid
principal balance of the mortgage loan, together with accrued but unpaid
interest through a date on or about the date of purchase, or another price
specified in the related prospectus supplement.
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UNDERWRITTEN CASH FLOW--Underwritten Cash Flow for any mortgaged property
is an estimate of cash flow available for debt service in a typical year of
stable, normal operations. Unless more specifically described in the related
prospectus supplement, it is the estimated revenue derived from the use and
operation of the mortgaged property less the sum of
o estimated operating expenses, such as utilities, administrative expenses,
repairs and maintenance, management and franchise fees and advertising;
o fixed expenses, such as insurance, real estate taxes and, if applicable,
ground lease payments; and
o capital expenditures and reserves for capital expenditures, including
tenant improvement costs and leasing commissions.
Underwritten cash flow generally does not reflect interest expense and
non-cash items, such as depreciation and amortization.
UNDIVIDED PERCENTAGE INTEREST--The Undivided Percentage Interest for an
offered certificate of a particular class will be equal to the percentage
obtained by dividing the initial principal balance or notional amount of the
certificate by the initial certificate balance or notional amount of that
class.
115
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"GMAC00C3.xls" is a Microsoft Excel*, Version 5.0 spreadsheet that
provides in electronic format certain information shown in Annex A in the
prospectus supplement. In addition, the spreadsheet provides certain
information detailing the changes in the amount of monthly payments with regard
to certain mortgage loans.
Open the file as you would normally open a spreadsheet in Microsoft Excel.
After the file is opened, a screen will appear requesting a password. Please
"click" the "read only" option. At that point, a securities law legend will be
displayed. READ THE LEGEND CAREFULLY. To view the data, see the worksheets
labeled "Annex A" and "MF Schedule," respectively.
----------
* Microsoft Excel is a registered trademark of Microsoft Corporation.
<PAGE>
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No dealer, salesman or other person has been authorized to give any
information or to make any representations not contained in this prospectus
supplement and the prospectus and, if given or made, such information or
representations must not be relied upon as having been authorized by the
depositor or by the underwriters. This prospectus supplement and the prospectus
do not constitute an offer to sell, or a solicitation of an offer to buy, the
securities offered hereby to anyone in any jurisdiction in which the person
making such offer or solicitation is not qualified to do so or to anyone to
whom it is unlawful to make any such offer or solicitation. Neither the
delivery of this prospectus supplement and the prospectus nor any sale made
hereunder shall, under any circumstances, create an implication that
information in this prospectus supplement or therein is correct as of any time
since the date of this prospectus.
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
------
<S> <C>
Summary of Series 2000-C3 Transaction ........... S-8
Risk Factors .................................... S-18
Description of the Mortgage Pool ................ S-48
Servicing of the Mortgage Loans ................. S-81
The Intercreditor Agreements, Companion
Loans and Loan Groups ........................ S-91
The Pooling and Servicing Agreement ............. S-95
Description of the Certificates ................. S-103
Yield and Maturity Considerations ............... S-124
Federal Income Tax Consequences ................. S-136
Method of Distribution .......................... S-138
Legal Matters ................................... S-140
Ratings ......................................... S-140
Legal Investment ................................ S-140
ERISA Considerations ............................ S-141
Glossary ........................................ S-143
Annex A--Characteristics of the Mortgage
Loans ........................................ A-1
Annex B--Form of Statement to
Certificateholders and Servicer Reports ...... B-1
Annex C--Structural and Collateral Term
Sheet ........................................ C-1
Annex D--Global Clearance, Settlement and
Tax Documentation Procedures ................. D-1
PROSPECTUS
Prospectus Summary .............................. 3
Risk Factors .................................... 6
Description of the Trust ........................ 12
Yield and Maturity Considerations ............... 18
The Depositor ................................... 25
GMAC Commercial Mortgage Corporation............. 26
Description of the Certificates ................. 26
The Pooling and Servicing Agreements ............ 36
Description of Credit Support ................... 57
Legal Aspects of Mortgage Loans ................. 59
Federal Income Tax Consequences ................. 72
State and Other Consequences .................... 102
ERISA Considerations ............................ 102
Legal Investment ................................ 108
Use of Proceeds ................................. 110
Method of Distribution .......................... 110
Legal Matters ................................... 111
Financial Information ........................... 111
Where You Can Find Additional
Information .................................. 112
Reports to Certificateholders ................... 112
Incorporation of Information by Reference ....... 112
Rating .......................................... 113
Glossary ........................................ 114
</TABLE>
$1,128,114,000
(Approximate)
GMAC COMMERCIAL
MORTGAGE SECURITIES, INC.
MORTGAGE PASS-THROUGH
CERTIFICATES, SERIES 2000-C3
-----------------------------------------------------
PROSPECTUS SUPPLEMENT
-----------------------------------------------------
DEUTSCHE BANC ALEX. BROWN
GOLDMAN, SACHS & CO.
November , 2000
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