RESIDENTIAL ACCREDIT LOANS, INC.
Company
RESIDENTIAL FUNDING CORPORATION
Master Servicer
Mortgage Pass-Through Certificates
Series 1996-QS7
$9,107,490.35 8.00% Class M-1 Certificates
$5,122,401.26 8.00% Class M-2 Certificates
$3,642,656.40 8.00% Class M-3 Certificates
Supplement date December 23, 1996
to
Prospectus Supplement dated November 21, 1996
and
Prospectus dated August 22, 1996
The Class M-1 Certificates, the Class M-2 Certificates and the Class
M-3 Certificates (collectively, the "Class M Certificates") will be purchased
from the Company by Credit Suisse First Boston Corporation (the "Underwriter"),
pursuant to an agreement (the "Underwriting Agreement") among the Company, the
Master Servicer and the Underwriter. The proceeds to the Company from the sale
of the Class M Certificates will be equal to $17,952,836.92, net of any expenses
payable by the Company.
The Underwriter intends to offer the Class M Certificates from time to time to
the public in negotiated transactions or otherwise at varying prices to be
determined at the time of sale. The Underwriter may effect such transactions by
selling the Class M Certificates to or through dealers. In connection with the
purchase and sale of the Class M Certificates, the Underwriter and any dealers
that may participate with the Underwriter in such resale of the Class M
Certificates may be deemed to have received compensation from the Company in the
form of discounts or commissions or, in the case of such dealers, compensation
from the Underwriter in the form of discounts, concessions or commissions. The
Underwriting Agreement provides that the Company will indemnify the Underwriter
against certain civil liabilities under the Securities Act of 1933, as amended,
or contribute to payments required to be made in respect thereof. There is
currently no secondary market for the Class M Certificates. There can be no
assurance that an active secondary market will develop, or if it does develop,
that it will continue.
THIS SUPPLEMENT MUST BE DELIVERED TOGETHER WITH THE PROSPECTUS
AND PROSPECTUS SUPPLEMENT REFERRED TO ABOVE, AND SHOULD BE READ
IN CONJUNCTION THEREWITH.
CREDIT SUISSE FIRST BOSTON
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The Mortgage Pool consists of 2,106 Mortgage Loans with an outstanding
aggregate principal balance as of December 1, 1996 (the "Reference Date"), after
deducting payments of principal due on such date, of $226,971,510.25.
The Certificate Principal Balances of the Class M-1 Certificates, the
Class M-2 Certificates, the Class M-3 Certificates, the Class B-1 Certificates,
the Class B-2 Certificates, and the Class B-3 Certificates after the December
26, 1996 Distribution Date, will be $9,107,490.35, $5,122,401.26, $3,642,656.40,
$1,821,278.24, $569,155.70 and $1,365,650.67, respectively. After the December
26, 1996 Distribution Date, the Class M-1 Certificates will evidence a Class M-1
Percentage of approximately 4.01%, the Class M-2 Certificates will evidence a
Class M-2 Percentage of approximately 2.26%, the Class M-3 Certificates will
evidence a Class M-3 Percentage of approximately 1.60%, the Class B-1
Certificates will evidence a Class B-1 Percentage of approximately 0.80%, the
Class B-2 Certificates will evidence a Class B-2 Percentage of approximately
0.25%, and the Class B-3 Certificates will evidence a Class B-3 Percentage of
approximately 0.60%.
As of the Reference Date, ninety-three Mortgage Loans, representing
4.2% of the Mortgage Loans were one month delinquent. As of the Reference Date,
none of the Mortgage Loans were two months or more delinquent or in foreclosure.
UNTIL MARCH 23, 1997, ALL DEALERS EFFECTING TRANSACTIONS IN THE CLASS M
CERTIFICATES, WHETHER OR NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED
TO DELIVER A PROSPECTUS (INCLUDING THE PROSPECTUS SUPPLEMENT AND THIS
SUPPLEMENT). THIS DELIVERY REQUIREMENT IS IN ADDITION TO THE OBLIGATION OF
DEALERS TO DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO
THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
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