RESIDENTIAL ACCREDIT LOANS INC
424B5, 2000-08-25
ASSET-BACKED SECURITIES
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<PAGE>

Prospectus supplement dated August 24, 2000 (to prospectus dated March 24, 1999)

                                  $266,622,370

                        RESIDENTIAL ACCREDIT LOANS, INC.
                                   DEPOSITOR

                        RESIDENTIAL FUNDING CORPORATION
                                MASTER SERVICER

        MORTGAGE ASSET-BACKED PASS-THROUGH CERTIFICATES, SERIES 2000-QS9

--------------------------------------------------------------------------------
  YOU SHOULD CONSIDER CAREFULLY THE RISK FACTORS BEGINNING ON PAGE S-9 IN THIS
  PROSPECTUS SUPPLEMENT.

  The certificates will represent ownership interests only in the trust
  created for Series 2000-QS9 and will not represent ownership interests in or
  obligations of Residential Accredit Loans, Inc., Residential Funding
  Corporation or any of their affiliates.

  This prospectus supplement may be used to offer and sell the certificates
  offered hereby only if accompanied by the prospectus.

--------------------------------------------------------------------------------

OFFERED CERTIFICATES

The trust created for the Series 2000-QS9 certificates will consist primarily of
a pool of conventional one- to four-family residential first mortgage loans. The
trust will issue twenty-one classes of certificates. Eighteen of these classes
of certificates are offered hereby, consisting of fifteen classes of senior
certificates and three classes of Class M Certificates. You can find a list of
these classes, together with their principal balances, pass-through rates and
certain other characteristics, on page S-4 of this prospectus supplement.

CREDIT ENHANCEMENT

In addition to the offered certificates, the trust will issue three classes of
Class B Certificates, which are not offered by this prospectus supplement. The
Class B Certificates are subordinated to and provide credit enhancement for the
offered certificates to the extent described in this prospectus supplement. The
Class M Certificates are subordinated to and provide credit enhancement for the
senior certificates and any class of Class M Certificates with a higher payment
priority to the extent described in this prospectus supplement.

UNDERWRITING

Salomon Smith Barney Inc. will offer to the public the Class A-1 Certificates
through Class A-10 Certificates, Class HJ Certificates, the Class M Certificates
and 99.99% of the Class R-I and Class R-II Certificates at varying prices to be
determined at the time of sale. Salomon Smith Barney Inc.'s commission will be
the difference between the price it pays to the depositor for such underwritten
certificates and the amount it receives from the sale of such underwritten
certificates to the public. The proceeds to the depositor from the sale of such
underwritten certificates to Salomon Smith Barney Inc. will be approximately
99.44% of the principal balance of such underwritten certificates plus accrued
interest, before deducting expenses. See 'Method of Distribution' in this
prospectus supplement.

The depositor may offer the Class A-P and Class A-V Certificates to the public
from time to time, directly or through an underwriter or agent, in negotiated
transactions or otherwise at varying prices which will be determined at the time
of sale. The proceeds to the depositor from any sale of the Class A-P or Class
A-V Certificates will equal the difference between the price paid to the
depositor for such certificates and the sum of the depositor's related expenses
and the compensation paid to any underwriter or agent.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF 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 ATTORNEY GENERAL OF
THE STATE OF NEW YORK HAS NOT PASSED ON OR ENDORSED THE MERITS OF THIS OFFERING.
ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.

                              SALOMON SMITH BARNEY
                                  UNDERWRITER








<PAGE>

              IMPORTANT NOTICE ABOUT INFORMATION PRESENTED IN THIS
             PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS

We provide information to you about the offered certificates in two separate
documents that provide progressively more detail:

         the accompanying prospectus, which provides general information, some
         of which may not apply to your series of certificates; and

         this prospectus supplement, which describes the specific terms of your
         series of certificates.

IF THE DESCRIPTION OF YOUR CERTIFICATES IN THIS PROSPECTUS SUPPLEMENT DIFFERS
FROM THE RELATED DESCRIPTION IN THE ACCOMPANYING PROSPECTUS, YOU SHOULD RELY ON
THE INFORMATION IN THIS PROSPECTUS SUPPLEMENT.

You can find a listing of the pages where capitalized terms used both in the
prospectus and this prospectus supplement are defined under the caption 'Index
of Principal Definitions' beginning on page 96 in the accompanying prospectus.

The depositor's principal offices are located at 8400 Normandale Lake Boulevard,
Suite 600, Minneapolis, Minnesota 55437, and its telephone number is
(952) 832-7000.

             TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                         PAGE
                                         ----
<S>                                      <C>
Summary.................................  S-3
Risk Factors............................  S-9
    Risk of Loss........................  S-9
    Limited Obligations................. S-10
    Liquidity Risks..................... S-11
    Special Yield and Prepayment
      Considerations.................... S-11
Introduction............................ S-17
Description of the Mortgage Pool........ S-17
    General............................. S-17
    Mortgage Pool Characteristics....... S-17
    Standard Hazard Insurance and
      Primary Mortgage Insurance........ S-22
    The Program......................... S-23
    Residential Funding................. S-24
    Additional Information.............. S-24
Description of the Certificates......... S-25
    General............................. S-25
    Book-Entry Registration of Certain
      of the Offered Certificates....... S-26
    Available Distribution Amount....... S-27
    Interest Distributions.............. S-27
    Principal Distributions on the
      Senior Certificates............... S-30
    Principal Distributions on the
      Retail Certificates............... S-38
    Principal Distributions on the Class
      M Certificates.................... S-41
    Allocation of Losses;
      Subordination..................... S-43
    Advances............................ S-46
Certain Yield and Prepayment
  Considerations........................ S-46
    General............................. S-46
    Principal Only Certificate and
      Interest Only Certificate Yield
      Considerations.................... S-57
    Class M-2 and Class M-3 Certificate
      Yield Considerations.............. S-58
    Additional Yield Considerations
      Applicable Solely to the Residual
      Certificates...................... S-60
Pooling and Servicing Agreement......... S-61
    General............................. S-61
    The Master Servicer................. S-61
    Servicing and Other Compensation and
      Payment of Expenses............... S-62
    Voting Rights....................... S-63
    Termination......................... S-63
Certain Federal Income Tax
  Consequences.......................... S-64
    Special Tax Considerations
      Applicable to Residual
      Certificates...................... S-65
    New Withholding Regulations......... S-66
Method of Distribution.................. S-66
Legal Opinions.......................... S-67
Ratings................................. S-67
Legal Investment........................ S-68
ERISA Considerations.................... S-68
Annex I: ERISA Representation Letter....  A-1
</TABLE>

                       S-2








<PAGE>

                                    SUMMARY

    The following summary is a very general overview of the certificates offered
hereby and does not contain all of the information that you should consider in
making your investment decision. To understand the terms of the offered
certificates, you should read carefully this entire document and the
accompanying prospectus.

<TABLE>
<S>                                         <C>
Title of securities.......................  Mortgage Asset-Backed Pass-Through
                                            Certificates, Series 2000-QS9.
Depositor.................................  Residential Accredit Loans, Inc., an affiliate
                                            of Residential Funding Corporation.
Master servicer...........................  Residential Funding Corporation.
Trustee...................................  Bankers Trust Company.
Mortgage pool.............................  1,752 fixed-rate mortgage loans with an
                                            aggregate principal balance of approximately
                                            $270,408,105 as of the cut-off date, secured
                                            by first liens on one- to four-family
                                            residential properties.
Cut-off date..............................  August 1, 2000.
Closing date..............................  On or about August 30, 2000.
Distribution dates........................  Beginning in September 2000, on the 25th of
                                            each month or if the 25th is not a business
                                            day, on the next business day.
Scheduled final distribution date.........  August 25, 2030. The actual final distribution
                                            date could be substantially earlier.
Form of certificates......................  Book-entry: Class A-1 through Class A-10
                                            Certificates, Class HJ Certificates and
                                            Class M Certificates. Physical: Class A-P,
                                            Class A-V and Class R Certificates.
                                            See 'Description of the Certificates --
                                            Book-Entry Registration of Certain of
                                            the Offered Certificates' in this prospectus
                                            supplement.
Minimum denominations.....................  Class A-1, Class A-2, Class A-4, Class A-5,
                                            Class A-9, Class A-P and Class M-1
                                            Certificates: $25,000.
                                            Class A-3, Class A-6, Class A-7, Class A-8 and
                                            Class A-10 Certificates: $1,000.
                                            Class HJ Certificates: $2,000,000 notional
                                            amount.
                                            Class M-2 and Class M-3 Certificates:
                                            $250,000.
                                            Class A-V and Class R Certificates: 20%
                                            percentage interest.
Legal investment..........................  When issued, the Class A, Class R and
                                            Class M-1 Certificates will, and the
                                            Class M-2 and Class M-3 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 and the prospectus.
</TABLE>

                                      S-3





<PAGE>

                              OFFERED CERTIFICATES
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------
                            INITIAL       PASS-
                           PRINCIPAL     THROUGH  INITIAL RATING
CLASS                       BALANCE       RATE    (FITCH/S&P)(1)               DESIGNATION
----------------------------------------------------------------------------------------------------------
<S>                       <C>            <C>      <C>              <C>
CLASS A CERTIFICATES AND
CLASS HJ CERTIFICATES:
----------------------------------------------------------------------------------------------------------
          A-1             $ 92,256,000    7.75%       AAA/AAA             Senior/PAC/Fixed Rate
----------------------------------------------------------------------------------------------------------
           HJ             $          0(2) 0.25%       AAA/AAA        Senior/Interest Only/Fixed Rate
----------------------------------------------------------------------------------------------------------
          A-2             $ 75,000,000    8.00%       AAA/AAA      Senior/Accretion Directed/Fixed Rate
----------------------------------------------------------------------------------------------------------
          A-3             $  1,903,000    8.00%       AAA/AAA           Senior/Fixed Rate/Retail
----------------------------------------------------------------------------------------------------------
          A-4             $ 21,500,000    8.00%       AAA/AAA           Senior/Fixed Rate/Lockout
----------------------------------------------------------------------------------------------------------
          A-5             $  1,075,000    8.00%       AAA/AAA      Senior/Accrual/Companion/Fixed Rate
----------------------------------------------------------------------------------------------------------
          A-6             $    750,000    8.00%       AAA/AAA           Senior/Fixed Rate/Retail
----------------------------------------------------------------------------------------------------------
          A-7             $  2,500,000    8.00%       AAA/AAA           Senior/Fixed Rate/Retail
----------------------------------------------------------------------------------------------------------
          A-8             $  5,597,000    8.00%       AAA/AAA           Senior/Fixed Rate/Retail
----------------------------------------------------------------------------------------------------------
          A-9             $ 45,320,000    8.00%       AAA/AAA               Senior/Fixed Rate
----------------------------------------------------------------------------------------------------------
          A-10            $  4,680,000    8.00%       AAA/AAA           Senior/Fixed Rate/Retail
----------------------------------------------------------------------------------------------------------
          A-P             $    221,970    0.00%       AAA/AAA             Senior/Principal Only
                                        Variable
----------------------------------------------------------------------------------------------------------
          A-V             $          0    Rate        AAA/AAA      Senior/Interest Only/Variable Rate
----------------------------------------------------------------------------------------------------------
Total Class A
Certificates and
Class HJ Certificates:   $250,802,970
----------------------------------------------------------------------------------------------------------
CLASS R CERTIFICATES:
----------------------------------------------------------------------------------------------------------
          R-I             $        100    8.00%       AAA/AAA          Senior/Residual/Fixed Rate
----------------------------------------------------------------------------------------------------------
          R-II            $        100    8.00%       AAA/AAA          Senior/Residual/Fixed Rate
----------------------------------------------------------------------------------------------------------
Total senior
certificates:             $250,803,170
----------------------------------------------------------------------------------------------------------
CLASS M CERTIFICATES:
----------------------------------------------------------------------------------------------------------
          M-1             $  9,329,300    8.00%        AA/NA              Mezzanine/Fixed Rate
----------------------------------------------------------------------------------------------------------
          M-2             $  3,380,200    8.00%        A/NA               Mezzanine/Fixed Rate
----------------------------------------------------------------------------------------------------------
          M-3             $  3,109,700    8.00%       BBB/NA              Mezzanine/Fixed Rate
----------------------------------------------------------------------------------------------------------
Total Class M
Certificates:             $ 15,819,200
----------------------------------------------------------------------------------------------------------
Total offered
certificates:             $266,622,370
----------------------------------------------------------------------------------------------------------
                                     NON-OFFERED CERTIFICATES(3)
----------------------------------------------------------------------------------------------------------
CLASS B CERTIFICATES:
----------------------------------------------------------------------------------------------------------
          B-1             $  1,757,600    8.00%        BB/NA             Subordinate/Fixed Rate
----------------------------------------------------------------------------------------------------------
          B-2             $    811,200    8.00%        B/NA              Subordinate/Fixed Rate
----------------------------------------------------------------------------------------------------------
          B-3             $  1,216,935    8.00%        NA/NA             Subordinate/Fixed Rate
----------------------------------------------------------------------------------------------------------
Total Class B
Certificates:             $  3,785,735
----------------------------------------------------------------------------------------------------------
Total offered and
non-offered
certificates:             $270,408,105
----------------------------------------------------------------------------------------------------------
</TABLE>

(1) See 'Ratings' in this prospectus supplement.
(2) The initial notional amount of the Class HJ Certificates is approximately
    $92,256,000.
(3) The information presented for non-offered certificates is provided solely to
    assist your understanding of the offered certificates.

OTHER INFORMATION:
CLASS A-V:
------------------
Variable Rate: Varies according to the weighted average of the excess of the net
mortgage rate on each mortgage loan over 8.00%.

The Class A-V Certificates do not have a principal balance. For the purpose of
calculating interest payments, interest will accrue on a notional amount
initially equal to $270,408,105.

                                      S-4





<PAGE>

THE TRUST

The depositor will establish a trust with respect to the Series 2000-QS9
Certificates, pursuant to a pooling and servicing agreement, dated as of
August 1, 2000, among the depositor, the master servicer and the trustee. On the
closing date, the depositor will deposit the pool of mortgage loans described
below into the trust.

Each Series 2000-QS9 Certificate will represent a partial ownership interest in
the trust. Distributions of interest and/or principal on the certificates will
be made only from payments received in connection with the mortgage loans
described below.

THE MORTGAGE POOL

The mortgage loans to be deposited into the trust have the following
characteristics as of the cut-off date:

<TABLE>
<CAPTION>
------------------------------------------------------------
                                               WEIGHTED
                                RANGE          AVERAGE
                                -----          --------
 <S>                    <C>                    <C>
 Principal balance        $14,985 to $833,641  $154,343*
 Mortgage rate            7.0000% to 10.5000%  9.2772%
 Remaining term to maturity
  (months)                         236 to 360      358
 *Indicates average principal balance.
------------------------------------------------------------
</TABLE>

The mortgage loans were originated using less stringent underwriting standards
than the underwriting standards applied by certain other first mortgage loan
purchase programs, such as those of Fannie Mae, Freddie Mac or the depositor's
affiliate, Residential Funding Mortgage Securities I, Inc.

For additional information regarding the mortgage pool see 'Description of the
Mortgage Pool' in this prospectus supplement.

DISTRIBUTIONS ON THE OFFERED CERTIFICATES

Subservicers will collect monthly payments of principal and interest on the
mortgage loans. Each month, the subservicers will retain their subservicing fee
and forward the remainder of the collections, including unscheduled payments, to
the master servicer. After retaining its master servicing fee and amounts that
reimburse the subservicer or master servicer for reimbursable expenses and
advances, the master servicer will forward all collections on the mortgage
loans, together with any advances that it makes for delinquent mortgage
payments, to the trustee.

The aggregate amount of such monthly collections and advances is described under
the heading 'Description of the Certificates -- Available Distribution Amount'
in this prospectus supplement.

Distributions to certificateholders will be made from available amounts as
follows:

--------------------------------------------------------
                         Step 1
        Distribution of interest to the Class A
         Certificates (other than the Class A-P
        Certificates), Class HJ Certificates and
                  Class R Certificates
--------------------------------------------------------

--------------------------------------------------------
                         Step 2
       Distribution of principal to the Class A-P
                    Certificates(1)
--------------------------------------------------------

--------------------------------------------------------
                         Step 3
        Distribution of principal to the Class A
         Certificates (other than the Class A-P
      Certificates and Class A-V Certificates) and
                Class R Certificates(2)
--------------------------------------------------------

--------------------------------------------------------
                         Step 4
    Payment to master servicer in respect of certain
                 unreimbursed advances
--------------------------------------------------------

--------------------------------------------------------
                         Step 5
                  Distribution to the
      Class M Certificates in the following order:
         Interest to the Class M-1 Certificates
        Principal to the Class M-1 Certificates
         Interest to the Class M-2 Certificates
        Principal to the Class M-2 Certificates
         Interest to the Class M-3 Certificates
        Principal to the Class M-3 Certificates
--------------------------------------------------------

--------------------------------------------------------
                         Step 6
     Distribution of interest and principal to the
                  Class B Certificates
--------------------------------------------------------

--------------------------------------------------------
                         Step 7
       Distribution of any remaining funds to the
                Class R Certificates(3)
--------------------------------------------------------

                                      S-5





<PAGE>

(1) The Class A-P Certificates represent rights to receive only a certain
    portion of the principal received in respect of each mortgage loan that has
    a net mortgage rate of less than 8.00%, as described in 'Description of the
    Certificates -- Principal Distributions on the Senior Certificates' in this
    prospectus supplement.

(2) Not all outstanding classes of Class A Certificates will receive principal
    distributions on each distribution date.

(3) It is very unlikely that any distributions will be made to the Class R
    Certificates under Step 7.

The amount of interest owed to each class of certificates (other than the
Class A-P Certificates) on each distribution date will generally equal:

     the pass-through rate set forth above for that class of certificates

                                   MULTIPLIED BY

     the principal balance (or notional amount) of that class of certificates as
     of the day immediately prior to the related distribution date

                                   MULTIPLIED BY

     1/12th

                                       MINUS

     the pro rata share of certain interest shortfalls allocated to that class.

Interest on the Class A-5 Certificates will accrue and be added to the principal
balance of that class until the outstanding principal balance of the Class A-2
Certificates has been reduced to zero or, if earlier, until the outstanding
principal balance of the Class M and Class B Certificates has been reduced to
zero.

See 'Description of the Certificates -- Interest Distributions' in this
prospectus supplement.

Principal distributions on the certificates entitled to principal distributions
will be allocated among the various classes of offered certificates as described
under 'Description of the Certificates -- Principal Distributions on the Senior
Certificates' and ' -- Principal Distributions on the Class M Certificates' in
this prospectus supplement. Until the distribution date in September 2005, all
principal prepayments on the mortgage loans will be distributed to the Class A
Certificates (other than the Class A-V Certificates) and Class R Certificates,
unless the principal balances of such certificates (other than the Class A-P
Certificates) have been reduced to zero. Not all outstanding Class A
Certificates will receive principal on each distribution date. The Class HJ
Certificates and the A-V Certificates are not entitled to receive any principal
distributions.

See 'Description of the Certificates -- Principal Distributions on the Senior
Certificates' in this prospectus supplement.

CREDIT ENHANCEMENT

ALLOCATION OF LOSSES. Except as described below, if Class M Certificates or
Class B Certificates remain outstanding, losses on the mortgage loans will be
allocated first to the outstanding class of Class M Certificates or Class B
Certificates with the lowest payment priority, and the other classes of
certificates will not bear any portion of such losses.

If none of the Class M Certificates or Class B Certificates remain outstanding,
losses will be allocated among the Class A Certificates (other than the
Class A-P Certificates), Class HJ and Class R Certificates, in proportion to
their respective remaining principal balances or accrued interest. A special
allocation provision applies to the Class A-P Certificates.

Not all losses will be allocated in the priority set forth above. Losses due to
natural disasters such as floods and earthquakes, fraud by a mortgagor,
bankruptcy of a mortgagor or certain other extraordinary events will be
allocated as described above only up to specified amounts. Losses of these types
in excess of the specified amount will, in general, be allocated to all
outstanding classes of certificates pro rata in proportion to their remaining
principal balances or accrued interest. Therefore, the Class M Certificates and
Class B

                                      S-6





<PAGE>

Certificates do not act as credit enhancement for the Class A, Class HJ and
Class R Certificates for such losses.

Losses on each mortgage loan having a net mortgage rate of less than 8.00% that
are allocable to the Class A, Class HJ and Class R Certificates will be
allocated first to the Class A-P Certificates in an amount based on the
percentage of each such mortgage loan represented by the Class A-P Certificates.
The remainder of such losses will be allocated as described above.

See 'Description of the Certificates -- Allocation of Losses; Subordination' in
this prospectus supplement.

PRIORITY OF DISTRIBUTIONS. The priority in which distributions are made to
certificateholders also provides credit enhancement for certain classes of
certificates. The priority of distribution is shown in the chart on page S-5.
This manner of distributions ensures that any shortfall (other than specified
amounts of certain types of losses described in this prospectus supplement under
'Description of the Certificates -- Allocation of Losses; Subordination') in
amounts owed on the certificates is borne first by the most subordinate class of
certificates.

Allocating all or a disproportionately large portion of principal prepayments
and other unscheduled payments of principal to the Class A Certificates and
Class R Certificates in the early years of the mortgage pool provides additional
credit enhancement for the Class A, Class HJ and Class R Certificates by
preserving a greater portion of the principal balances of the Class M
Certificates and Class B Certificates for absorption of losses.

ADVANCES

For any month, if the master servicer receives no payment on a mortgage loan or
a payment that is less than the full scheduled payment, the master servicer will
advance its own funds to cover that shortfall. However, the master servicer will
make such advance only if it determines that such advance will be recoverable
from future payments or collections on that mortgage loan.

See 'Description of the Certificates -- Advances' in this prospectus supplement.

OPTIONAL TERMINATION

On any distribution date on which the aggregate outstanding principal balance of
the mortgage loans is less than 10% of their aggregate principal balance as of
the cut-off date, the master servicer or the depositor may, but will not be
required to:

     purchase from the trust all remaining mortgage loans and thereby cause an
     early retirement of the certificates; or

     purchase all the certificates.

An optional purchase of the outstanding certificates will cause the outstanding
principal balance of the certificates to be paid in full with accrued interest.
However, there will be no reimbursement of principal reductions or related
interest that resulted from losses allocated to the certificates. An optional
purchase of the remaining mortgage loans may cause the holders of one or more
classes of certificates to receive less than their outstanding principal balance
plus accrued interest.

See 'Pooling and Servicing Agreement -- Termination' in this prospectus
supplement and 'The Pooling and Servicing Agreement -- Termination; Retirement
of Certificates' in the prospectus.

RATINGS

When issued, the offered certificates will receive ratings which are not lower
than those set forth in the table on page S-4 of this prospectus supplement. The
ratings

                                      S-7





<PAGE>

on the offered certificates address the likelihood that the holders of the
offered certificates will receive all distributions on the underlying mortgage
loans to which they are entitled. A security rating is not a recommendation to
buy, sell or hold a security and is subject to change or withdrawal at any time
by the assigning rating agency. The ratings also do not address the rate of
principal prepayments on the mortgage loans. For example, the rate of
prepayments, if different than originally anticipated, could adversely affect
the yield realized by holders of the offered certificates or cause holders of
the Class HJ Certificates and Class A-V Certificates to fail to recover fully
their initial investments.

See 'Ratings' in this prospectus supplement.

LEGAL INVESTMENT

When issued, the Class A, Class HJ, Class R and Class M-1 Certificates will, and
the Class M-2 and Class M-3 Certificates will not, be 'mortgage related
securities' for purposes of the Secondary Mortgage Market Enhancement Act of
1984. You should consult your legal advisors in determining whether and to what
extent the offered certificates constitute legal investments for you.

See 'Legal Investment' in this prospectus supplement for important information
concerning possible restrictions on ownership of the offered certificates by
regulated institutions.

ERISA CONSIDERATIONS

The Class A Certificates and Class HJ Certificates may be eligible for purchase
by persons investing assets of employee benefit plans or individual retirement
accounts, subject to important considerations. Sales of the Class M Certificates
and the Class R Certificates to most such plans or retirement accounts are
prohibited, except as may be permitted under an exemption available to insurance
companies using general accounts.

See 'ERISA Considerations' in this prospectus supplement and in the prospectus.

TAX STATUS

For federal income tax purposes, the depositor will elect to treat the trust as
two real estate mortgage investment conduits. The certificates, other than the
Class R Certificates, will represent ownership of regular interests in one of
the two real estate mortgage investment conduits. Such certificates will
generally be treated as representing ownership of debt for federal income tax
purposes. Certificateholders will be required to include in income all interest
and original issue discount, if any, on such certificates in accordance with the
accrual method of accounting regardless of the certificateholders' usual methods
of accounting. For federal income tax purposes, each class of the Class R
Certificates will be the residual interest in one of the two real estate
mortgage investment conduits.

For further information regarding the federal income tax consequences of
investing in the offered certificates, including important information regarding
the tax treatment of the Class R Certificates, see 'Certain Federal Income Tax
Consequences' in this prospectus supplement and in the prospectus.

                                      S-8








<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 the prepayment, credit, liquidity and market risks associated with
that class.

    The offered certificates are complex securities. You should 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 and tolerance
for risk.

    You should carefully consider, among other things, the following factors in
connection with the purchase of the offered certificates:

<TABLE>
<S>                          <C>
RISK OF LOSS

Underwriting standards may   The mortgage loans have been originated using underwriting standards that
affect risk of loss on the   are less stringent than the underwriting standards applied by certain
mortgage loans.              other first mortgage loan purchase programs, such as those of Fannie Mae,
                             Freddie Mac or the depositor's affiliate, Residential Funding Mortgage
                             Securities I, Inc. Applying less stringent underwriting standards creates
                             additional risks that losses on the mortgage loans will be allocated to
                             certificateholders.

                             Examples include:

                               mortgage loans secured by non-owner occupied properties;

                               mortgage loans with relatively high loan-to-value ratios (i.e., the
                               amount of the loan at origination is 80% or more of the value of the
                               mortgaged property);

                               mortgage loans with loan-to-value ratios greater than 80% at origination
                               with no mortgage insurance;

                               mortgage loans made to borrowers who are United States citizens employed
                               abroad or citizens and residents of a foreign country;

                               mortgage loans made to borrowers who have high debt-to-income ratios
                               (i.e., the amount of other debt the borrower owes represents a large
                               portion of his or her income); and

                               mortgage loans made to borrowers whose income is not required to be
                               disclosed or verified.

                             See 'The Trusts -- The Mortgage Loans -- Underwriting Policies' and
                             'Certain Legal Aspects of Mortgage Loans and Contracts' in the
                             prospectus.
</TABLE>

                                      S-9





<PAGE>

<TABLE>
<S>                          <C>
Geographic concentration     Another risk associated with investing in securities backed by a pool of
may affect risk of loss on   mortgage loans is created by any concentration of the related mortgaged
the mortgage loans.          properties in one or more geographic regions. If the regional economy or
                             housing market of any state (or any other region) having a significant
                             concentration of the properties underlying the mortgage loans weakens,
                             the mortgage loans related to properties in that region may experience
                             high rates of loss and delinquency, resulting in losses to
                             certificateholders. A region's economic condition and housing market may
                             be adversely affected by a variety of events, including natural disasters
                             such as earthquakes, hurricanes, floods and eruptions, and civil
                             disturbances such as riots. The economic impact of any such events may
                             also be felt in areas beyond the region immediately affected by the
                             disaster or disturbance. The properties underlying the mortgage loans may
                             be concentrated in these regions. Such concentration may result in
                             greater losses to certificateholders than those generally present for
                             similar mortgage-backed securities without such concentration.

                             See 'Description of the Mortgage Pool -- Mortgage Pool Characteristics'
                             in this prospectus supplement.

Credit enhancement is        The only credit enhancement for the Class A, Class HJ and Class R
limited to the               Certificates will be the subordination provided by the Class M
subordination provided by    Certificates and Class B Certificates. The only credit enhancement for
classes with lower payment   the Class M Certificates will be the subordination provided by the Class
priorities.                  B Certificates and by any class of Class M Certificates with a lower
                             payment priority. Therefore, if the aggregate principal balance of the
                             Class B Certificates is reduced to zero, subsequent losses will be
                             allocated to the Class M-3, Class M-2 and Class M-1 Certificates, in that
                             order, in each case until the principal balance of such class has been
                             reduced to zero.

                             See 'Summary -- Credit Enhancement' and 'Description of the
                             Certificates -- Allocation of Losses; Subordination' in this prospectus
                             supplement.

LIMITED OBLIGATIONS

Payments on the mortgage     The certificates represent interests only in the Series 2000-QS9 trust.
loans are the only source    The certificates do not represent an interest in or obligation of the
of payments on the offered   depositor, the master servicer or any of their affiliates. If proceeds
certificates.                from the assets of the Series 2000-QS9 trust are not sufficient to make
                             all payments provided for under the pooling and servicing agreement,
                             investors will have no recourse to the depositor, the master servicer or
                             any other entity, and will incur losses.
</TABLE>

                                      S-10





<PAGE>

<TABLE>
<S>                          <C>
LIQUIDITY RISKS

An investor may have to      A secondary market for the offered certificates may not develop. Even if
hold its offered             a secondary market does develop, it may not continue or it may be
certificates to their        illiquid. Illiquidity means an investor may not be able to find a buyer
maturity because of          to buy its securities readily or at prices that will enable the investor
difficulty in reselling the  to realize a desired yield. Illiquidity can have a severely adverse
offered certificates.        effect on the market value of the offered certificates. Any class of
                             offered certificates may experience illiquidity, although generally
                             illiquidity is more likely for classes that are especially sensitive to
                             prepayment, credit or interest rate risk, or that have been structured to
                             meet the investment requirements of limited categories of investors.

SPECIAL YIELD AND PREPAYMENT CONSIDERATIONS

An investor's yield to       The yield to maturity on each class of offered certificates will depend
maturity will depend on      on a variety of factors, including:
various factors.
                               the rate and timing of principal payments on the mortgage loans
                               (including prepayments, defaults and liquidations, and repurchases due
                               to breaches of representations or warranties);

                               the pass-through rate for that class;

                               interest shortfalls due to mortgagor prepayments; and

                               the purchase price of that class.

                             In general, if a class of certificates is purchased at a price higher
                             than its outstanding principal balance and principal distributions on
                             such class occur faster than assumed at the time of purchase, the yield
                             will be lower than anticipated. Conversely, if a class of certificates is
                             purchased at a price lower than its outstanding principal balance and
                             principal distributions on that class occur more slowly than assumed at
                             the time of purchase, the yield will be lower than anticipated.

The rate of prepayments on   Since mortgagors can generally prepay their mortgage loans at any time,
the mortgage loans will be   the rate and timing of principal distributions on the offered
affected by various          certificates are highly uncertain. Generally, when market interest rates
factors.                     increase, borrowers are less likely to prepay their mortgage loans. Such
                             reduced prepayments could result in a slower return of principal to
                             holders of the offered certificates at a time when they may be able to
                             reinvest such funds at a higher rate of interest than the pass-through
                             rate on their class of certificates. Conversely, when market interest
                             rates decrease, borrowers are generally more likely to prepay their
                             mortgage loans. Such increased prepayments could result in a faster
                             return of principal to holders of the
</TABLE>

                                      S-11





<PAGE>

<TABLE>
<S>                          <C>
                             offered certificates at a time when they may not be able to reinvest such
                             funds at an interest rate as high as the pass-through rate on their class
                             of certificates.

                             Refinancing programs, which may involve soliciting all or some of the
                             mortgagors to refinance their mortgage loans, may increase the rate of
                             prepayments on the mortgage loans.

                             See 'Maturity and Prepayment Considerations' in the prospectus.

Each class of offered        The offered certificates have different yield considerations and
certificates has different   different sensitivities to the rate and timing of principal
prepayment and yield         distributions. The following is a general discussion of certain yield
considerations.              considerations and prepayment sensitivities of certain classes.

                             See 'Certain Yield and Prepayment Considerations' in this prospectus
                             supplement.

Class A Certificates         The Class A Certificates are subject to various priorities for payment of
                             principal as described herein. Distributions of principal on the Class A
                             Certificates having an earlier priority of payment will be affected by
                             the rate and timing of principal prepayments and defaults on the mortgage
                             loans early in the life of the mortgage pool. Those classes of Class A
                             Certificates with a later priority of payment will be affected by the
                             rates of prepayment of the mortgage loans experienced both before and
                             after the commencement of principal distributions on such classes.

                             See 'Description of the Certificates -- Principal Distributions on the
                             Senior Certificates' in this prospectus supplement.

Class A-1 Certificates       The Class A-1 Certificates will generally receive payments of principal
                             on each distribution date in amounts determined by using the table in
                             this prospectus supplement entitled 'Planned Principal Balances and
                             Contingent Class A-2 Certificate Principal Balance Schedule,' assuming
                             that the rate of prepayments on the mortgage loans are within a range as
                             described under 'Description of the Certificates -- Principal
                             Distributions on the Senior Certificates.' However, if prepayments occur
                             at a rate below such range, the amount of funds available for
                             distribution of principal on the Class A-1 Certificates may not be
                             sufficient to reduce the principal balance of that class to the amounts
                             set forth in the table, and the weighted average life of the Class A-1
                             Certificates will be extended. Conversely, if prepayments occur at a rate
                             above that range, and if the principal balance of certain classes of
                             certificates as described under 'Description of Certificates -- Certain
                             Yield and Prepayment Considerations -- General,' are reduced to zero, the
</TABLE>

                                      S-12





<PAGE>

<TABLE>
<S>                          <C>
                             principal balance of the Class A-1 Certificates may be reduced below the
                             amounts set forth in the table, and the weighted average life of the
                             Class A-1 Certificates will be reduced.

Class HJ Certificates        Investors in the Class HJ Certificates should be aware that the yield on
                             the Class HJ Certificates will be extremely sensitive to the rate and
                             timing of principal payments on the mortgage loans, and that rate may
                             fluctuate significantly over time. A faster than expected rate of
                             principal payments on the mortgage loans will have an adverse effect on
                             the yield to investors in the Class HJ Certificates and could result in
                             their failure to fully recover their initial investments.

Class A-2 Certificates       To the extent available, the Class A-2 Certificates will receive payments
                             of principal on each distribution date in amounts sufficient to reduce
                             its principal balance to the amount set forth in the table in this
                             prospectus supplement entitled 'Planned Principal Balances and Contingent
                             Class A-2 Certificate Principal Balance Schedule.' However, investors in
                             the Class A-2 Certificates should be aware that they may receive
                             substantially more or less than the amount specified in such schedule on
                             any distribution date.

                             Investors in the Class A-2 Certificates should be aware that, if the
                             principal balance of the Class A-5 Certificates is reduced to zero, the
                             Class A-2 Certificates may receive varying distributions of principal on
                             each distribution date to the extent necessary to stabilize the amount of
                             principal needed to reduce the principal balance of the Class A-1
                             Certificates to the amounts set forth in the table herein entitled
                             'Planned Principal Balances and Contingent Class A-2 Certificate
                             Principal Balance Schedule.' As a result, the Class A-2 Certificates will
                             likely experience price and yield volatility. Investors should consider
                             whether such volatility is suitable to their investment needs.

Class A-3, Class A-6,        The Class A-3, Class A-6, Class A-7, Class A-8 and Class A-10
Class A-7, Class A-8 and     Certificates will receive a portion of principal payments after certain
Class A-10 Certificates      other classes of Class A Certificates have received principal payments.
                             Therefore, an investor's yield on such certificates will be sensitive to
                             the rate and timing of such distributions and such certificates would not
                             be an appropriate investment for any investor requiring a distribution of
                             a particular amount of principal or interest on a specific date or dates.

                             IN ADDITION TO THE CONSIDERATIONS SET FORTH ABOVE, INVESTORS IN THE CLASS
                             A-3, CLASS A-6, CLASS A-7, CLASS A-8 AND CLASS A-10 CERTIFICATES SHOULD
                             BE AWARE THAT SUCH CERTIFICATES MAY NOT BE AN
</TABLE>

                                      S-13





<PAGE>

<TABLE>
<S>                          <C>
                             APPROPRIATE INVESTMENT FOR ALL PROSPECTIVE INVESTORS.

                             Investors in the Class A-3, Class A-6, Class A-7, Class A-8 and Class
                             A-10 Certificates should be aware that payments of principal on such
                             Certificates will be allocated according to a random lot procedure.
                             Therefore, it is highly uncertain that payments will be made to investors
                             on the date desired by such investor.

                             See 'Description of the Certificates -- Principal Distributions on the
                             Retail Certificates' in this prospectus supplement.

                             Investors in the Class A-3, Class A-6, Class A-7, Class A-8 and Class
                             A-10 Certificates should be aware that such certificates have a later
                             priority of payment with respect to principal in relation to some of the
                             other classes of Class A Certificates. Therefore, such certificates are
                             particularly sensitive to the rate and timing of principal prepayments.
                             In addition, holders of any class of Class A Certificates with a later
                             priority of principal payments bear a greater risk of loss than holders
                             of Class A Certificates with an earlier priority of principal payments
                             because the certificate principal balances of the Class M and Class B
                             Certificates could be reduced to zero before the Class A Certificates are
                             retired.

                             See 'Description of the Certificates -- Interest Distributions' in this
                             prospectus supplement.

Class A-4 Certificates       It is not expected that the Class A-4 Certificates will receive any
                             distributions of principal until the distribution date in September 2005.
                             Until the distribution date in September 2009, the Class A-4 Certificates
                             are expected to receive a portion of principal payments that is smaller
                             than its pro rata share of principal payments. Investors should consider
                             whether such volatility is suitable to their investment needs.

Class A-5 Certificates       Investors in the Class A-5 Certificates should be aware that the Class
                             A-5 Certificates may receive varying distributions of principal on each
                             distribution date to the extent necessary to stabilize the amount of
                             principal needed to reduce the principal balances of the Class A-1
                             Certificates to the amounts set forth in the table herein entitled
                             'Planned Principal Balances and Contingent Class A-2 Certificate
                             Principal Balance Schedule' and the principal balances of the Class A-2
                             Certificates to the amounts set forth in the table herein entitled
                             'Planned Principal Balances and Contingent Class A-2 Certificate
                             Principal Balance Schedule.' Due to the companion nature of the Class A-5
                             Certificates, those certificates will likely experience price and yield
                             volatility. Investors should
</TABLE>

                                      S-14





<PAGE>

<TABLE>
<S>                          <C>
                             consider whether such volatility is suitable to their investment needs.

                             Because the Class A-5 Certificates are not entitled to receive any
                             distributions of interest for an extended period as described herein
                             under 'Description of the Certificates -- Interest Distributions,' the
                             Class A-5 Certificates will likely experience greater price and yield
                             volatility than would mortgage pass-through certificates that are
                             otherwise similar but which are entitled to current distributions of
                             interest. Investors should consider whether such volatility is suitable
                             to their investment needs.

Class A-P Certificates       The Class A-P Certificates will receive a portion of the principal
                             payments only from mortgage loans that have net mortgage rates lower than
                             8.00% per annum. Therefore, the yield on the Class A-P Certificates will
                             be extremely sensitive to the rate and timing of principal prepayments
                             and defaults on the mortgage loans that have net mortgage rates lower
                             than 8.00% per annum.

                             Investors in the Class A-P Certificates should be aware that mortgage
                             loans with lower mortgage rates are less likely to be prepaid than
                             mortgage loans with higher mortgage rates. If prepayments of principal on
                             the mortgage loans that have net mortgage rates lower than 8.00% per
                             annum occur at a rate slower than an investor assumed at the time of
                             purchase, the investor's yield will be lower than anticipated.

Class A-V Certificates       The Class A-V Certificates will receive a portion of the interest
                             payments only from mortgage loans that have net mortgage rates higher
                             than 8.00% per annum. Therefore, the yield on the Class A-V Certificates
                             will be extremely sensitive to the rate and timing of principal
                             prepayments and defaults on mortgage loans that have net mortgage rates
                             higher than 8.00% per annum.

                             Investors in the Class A-V Certificates should be aware that mortgage
                             loans with higher mortgage rates are more likely to be prepaid than
                             mortgage loans with lower mortgage rates. If prepayments on the mortgage
                             loans that have net mortgage rates higher than 8.00% per annum occur at a
                             rate faster than an investor assumed at the time of purchase, the
                             investor's yield will be lower than anticipated. Investors in the
                             Class A-V Certificates should fully consider the risk that a rapid rate
                             of prepayments on the mortgage loans that have net mortgage rates higher
                             than 8.00% per annum could result in their failure to fully recover their
                             investments.

Class M Certificates         Losses on the mortgage loans will be allocated among the certificates in
                             the manner described herein. The yield to investors in the Class M
                             Certificates will be sensitive to the rate and timing of losses on the
                             mortgage loans. Losses (other than specified amounts of certain types of
</TABLE>

                                      S-15





<PAGE>

<TABLE>
<S>                          <C>
                             losses described herein) will be allocated to the most subordinate class
                             of Class M Certificates or Class B Certificates outstanding.

                             See 'Summary -- Credit Enhancement -- Allocation of Losses' and
                             'Description of the Certificates -- Allocation of Losses; Subordination'
                             in this prospectus supplement.

                             It is not expected that the Class M Certificates will receive any
                             distributions of principal prepayments until the distribution date in
                             September 2005. After that date, all or a disproportionately large
                             portion of principal prepayments on the mortgage loans may be allocated
                             to the Class A Certificates (other than the Class A-P Certificates) and
                             Class R Certificates, and none or a disproportionately small portion of
                             principal prepayments may be paid to the holders of the Class M
                             Certificates and Class B Certificates. As a result, the weighted average
                             lives of the Class M Certificates may be longer than would otherwise be
                             the case.

The recording of mortgages   The mortgages or assignments of mortgage for some of the mortgage loans
in the name of MERS may      have been or may be recorded in the name of Mortgage Electronic
affect the yield on the      Registration Systems, Inc., or MERS, solely as nominee for the originator
certificates.                and its successors and assigns. Subsequent assignments of those mortgages
                             are registered electronically through the MERS'r' System. However, if
                             MERS discontinues the MERS'r' System and it becomes necessary to record
                             an assignment of the mortgage to the trustee, then any related expenses
                             shall be paid by the trust and will reduce the amount available to pay
                             principal of and interest on the outstanding class or classes of
                             certificates with the lowest payment priorities.

                             The recording of mortgages in the name of MERS is a new practice in the
                             mortgage lending industry. Public recording officers and others may have
                             limited, if any, experience with lenders seeking to foreclose mortgages,
                             assignments of which are registered with MERS. Accordingly, delays and
                             additional costs in commencing, prosecuting and completing foreclosure
                             proceedings and conducting foreclosure sales of the mortgaged properties
                             could result. Those delays and additional costs could in turn delay the
                             distribution of liquidation proceeds to the certificateholders and
                             increase the amount of losses on the mortgage loans.

                             For additional information regarding MERS and the MERS'r' System, see
                             'Description of the Mortgage Pool -- Mortgage Pool Characteristics' and
                             'Certain Yield and Prepayment Considerations' in this prospectus
                             supplement and 'Description of the Certificates -- Assignment of Mortgage
                             Loans' in the prospectus.
</TABLE>

                                      S-16








<PAGE>

                                  INTRODUCTION

    Residential Accredit Loans, Inc. (the 'DEPOSITOR') will establish a trust
(the 'TRUST') with respect to Series 2000-QS9 on or about August 30, 2000 (the
'CLOSING DATE'), pursuant to a series supplement, dated as of August 1, 2000
(the 'CUT-OFF DATE'), and the standard terms of pooling and servicing agreement,
dated as of December 1, 1999 (collectively, the 'POOLING AND SERVICING
AGREEMENT'), among the Depositor, Residential Funding Corporation (the 'MASTER
SERVICER') and Bankers Trust Company, a New York banking corporation (the
'TRUSTEE'). On the Closing Date, the Depositor will deposit into the Trust a
pool of mortgage loans (the 'MORTGAGE POOL') secured by one- to four-family
residential properties with terms to maturity of not more than 30 years.

                        DESCRIPTION OF THE MORTGAGE POOL

GENERAL

    The Mortgage Pool will consist of approximately 1,752 mortgage loans (the
'MORTGAGE LOANS') having an aggregate principal balance outstanding as of the
Cut-off Date, after deducting payments of principal due on such date, of
approximately $270,408,105. The Mortgage Loans are secured by first liens on fee
simple or leasehold interests in one- to four-family residential real properties
(each, a 'MORTGAGED PROPERTY'). The Mortgage Pool will consist of conventional,
fixed-rate, fully-amortizing, level monthly payment Mortgage Loans with original
terms to maturity of not more than 30 years. With respect to Mortgage Loans that
have been modified, references herein to the date of origination shall be deemed
to be to the date of the most recent modification. All percentages of the
Mortgage Loans described herein are approximate percentages (except as otherwise
indicated) by aggregate principal balance as of the Cut-off Date.

    All of the Mortgage Loans were purchased by the Depositor through its
affiliate Residential Funding Corporation ('RESIDENTIAL FUNDING') from
Unaffiliated Sellers as described herein and in the Prospectus, except in the
case of 18.2% of the Mortgage Loans, which were purchased by the Depositor from
HomeComings Financial Network, Inc. ('HOMECOMINGS'), an affiliate of the
Depositor. No Unaffiliated Seller sold more than 10.1% of the Mortgage Loans to
Residential Funding. 63.8% and of the Mortgage Loans are being or will be
subserviced by HomeComings. All of the Mortgage Loans were generally
underwritten in conformity with or in a manner generally consistent with the
Program. See ' -- The Program' below.

    The Depositor and Residential Funding will make certain limited
representations and warranties regarding the Mortgage Loans as of the date of
issuance of the Certificates. The Depositor and Residential Funding will be
required to repurchase or substitute for any Mortgage Loan as to which a breach
of its representations and warranties with respect to such Mortgage Loan occurs
if such breach materially and adversely affects the interests of the
Certificateholders in any such Mortgage Loan and such Mortgage Loan is not
otherwise repurchased by the related Mortgage Collateral Seller. The Depositor,
as assignee of Residential Funding, will also assign to the Trustee for the
benefit of the Certificateholders certain of its rights, title and interest in
any agreement relating to the transfer and assignment of the Mortgage Loans to
the Depositor by Residential Funding, including certain representations and
warranties made by the Mortgage Collateral Sellers. Insofar as any such
agreement relates to the representations and warranties made by the related
Mortgage Collateral Seller in respect of such Mortgage Loan and any remedies
provided thereunder for any breach of such representations and warranties, such
right, title and interest may be enforced by the Master Servicer on behalf of
the Trustee and the Certificateholders. However, neither the Depositor nor
Residential Funding will be required to repurchase or substitute for any
Mortgage Loan in the event of a breach of its representations and warranties
with respect to such Mortgage Loan if the substance of any such breach also
constitutes fraud in the origination of such affected Mortgage Loan.

MORTGAGE POOL CHARACTERISTICS

    None of the Mortgage Loans will have been originated prior to October 4,
1998, or will have a maturity date later than August 1, 2030. No Mortgage Loan
will have a remaining term to maturity as of the Cut-off Date of less than 236
months. The weighted average remaining term to maturity of the Mortgage Loans as
of the Cut-off Date will be approximately 358 months. The weighted average
original term to maturity of the Mortgage Loans as of the Cut-off Date will be
approximately 360 months. As used herein, 'remaining term to maturity'

                                      S-17





<PAGE>

means, as of any date of determination and with respect to any Mortgage Loan,
the number of months equaling the number of scheduled monthly payments,
including any Balloon Payment, necessary to reduce the then-current Stated
Principal Balance of such Mortgage Loan to zero, assuming the related Mortgagor
will make all scheduled monthly payments, but no prepayments, on such Mortgage
Loan thereafter.

    As of the Cut-off Date, none of the Mortgage Loans will be 30 or more days
delinquent in payment of principal and interest. For a description of the
methodology used to categorize mortgage loans as delinquent, see 'Pooling and
Servicing Agreement - The Master Servicer' herein.

    None of the Mortgage Loans will be Buy-Down Mortgage Loans.

    No Mortgage Loan provides for deferred interest or negative amortization.

    None of the Mortgage Loans will have been made to International Borrowers.

    76 Mortgage Loans, representing 4.15% of the aggregate principal balance of
the Mortgage Loans, provide for payment of a prepayment charge for partial
prepayments and prepayments in full (other than a prepayment occurring upon the
sale of property securing a Mortgage Loan) made within up to five years
following the origination of such Mortgage Loan, in an amount equal to six
months' advance interest on the amount of the prepayment that, when added to all
other amounts prepaid during the twelve-month period immediately preceding the
date of prepayment, exceeds twenty percent (20%) of the original principal
amount of the Mortgage Loan. Prepayment charges received on the Mortgage Loans
will not be available for distribution on the Certificates. See 'Certain Yield
and Prepayment Considerations' in this Prospectus Supplement and 'Certain Legal
Aspects of the Mortgage Loans and Contracts -- Default Interest and Limitations
on Prepayments' in the Prospectus.

    The original Mortgages for some of the Mortgage Loans have been, or in the
future may be, at the sole discretion of the Master Servicer, recorded in the
name of Mortgage Electronic Registration Systems, Inc., or MERS, solely as
nominee for the originator and its successors and assigns, and subsequent
assignments of those mortgages have been, or in the future may be, at the sole
discretion of the Master Servicer, registered electronically through the MERS'r'
System. In some other cases, the original Mortgage was recorded in the name of
the originator of the Mortgage Loan, record ownership was later assigned to
MERS, solely as nominee for the owner of the Mortgage Loan, and subsequent
assignments of the Mortgage were, or in the future may be, at the sole
discretion of the Master Servicer, registered electronically through the MERS'r'
System. For each of these Mortgage Loans, MERS serves as mortgagee of record on
the Mortgage solely as a nominee in an administrative capacity on behalf of the
Trustee, and does not have any interest in the Mortgage Loan.

    Set forth below is a description of certain additional characteristics of
the Mortgage Loans as of the Cut-off Date (expressed as a percentage of the
outstanding aggregate principal balance of the Mortgage Loans having such
characteristics relative to the outstanding aggregate principal balance of all
Mortgage Loans). Unless otherwise specified, all principal balances of the
Mortgage Loans are as of the Cut-off Date and are rounded to the nearest dollar.

                                      S-18





<PAGE>

                       CREDIT SCORE OF THE MORTGAGE LOANS

<TABLE>
<CAPTION>
                                                     NUMBER OF                            PERCENT OF
CREDIT SCORE RANGE                                 MORTGAGE LOANS   PRINCIPAL BALANCE   MORTGAGE LOANS
------------------                                 --------------   -----------------   --------------
<S>                                                <C>              <C>                 <C>
600 - 619........................................          3          $    533,914            0.20%
620 - 639........................................         77             8,949,481            3.31
640 - 659........................................        107            14,115,046            5.22
660 - 679........................................        165            24,164,066            8.94
680 - 699........................................        336            56,869,347           21.03
700 - 719........................................        286            46,072,269           17.04
720 - 739........................................        275            41,632,957           15.40
740 - 759........................................        224            36,707,193           13.57
760 - 779........................................        168            25,064,024            9.27
780 - 799........................................         87            13,017,103            4.81
800 or Greater...................................         22             3,194,550            1.18
Subtotal with Credit Score.......................      1,750           270,319,950           99.97
Not Available (1)................................          2                88,155            0.03
                                                       -----          ------------          ------
    Total........................................      1,752          $270,408,105          100.00%
                                                       -----          ------------          ------
                                                       -----          ------------          ------
</TABLE>
---------
(1) Mortgage Loans indicated as having a Credit Score that is 'not available'
    include certain Mortgage Loans where the Credit Score was not provided by
    the related Program Seller and Mortgage Loans where no credit history can be
    obtained for the related Mortgagor.

                     OCCUPANCY TYPES OF THE MORTGAGE LOANS

<TABLE>
<CAPTION>
                                                     NUMBER OF                            PERCENT OF
OCCUPANCY                                          MORTGAGE LOANS   PRINCIPAL BALANCE   MORTGAGE LOANS
---------                                          --------------   -----------------   --------------
<S>                                                <C>              <C>                 <C>
Primary Residence................................      1,046          $194,244,612           71.83%
Second/Vacation..................................         38             4,153,702            1.54
Non Owner-occupied...............................        668            72,009,790           26.63
                                                       -----          ------------          ------
    Total........................................      1,752          $270,408,105          100.00%
                                                       -----          ------------          ------
                                                       -----          ------------          ------
</TABLE>

                  MORTGAGE LOAN PURPOSE OF THE MORTGAGE LOANS

<TABLE>
<CAPTION>
                                                     NUMBER OF                            PERCENT OF
LOAN PURPOSE                                       MORTGAGE LOANS   PRINCIPAL BALANCE   MORTGAGE LOANS
------------                                       --------------   -----------------   --------------
<S>                                                <C>              <C>                 <C>
Purchase.........................................      1,251          $191,937,883           70.98%
Rate/Term Refinance..............................        171            29,041,667           10.74
Equity Refinance.................................        330            49,428,555           18.28
                                                       -----          ------------          ------
    Total........................................      1,752          $270,408,105          100.00%
                                                       -----          ------------          ------
                                                       -----          ------------          ------
</TABLE>

    The weighted average Loan-to-Value Ratio at origination of rate and term
refinance Mortgage Loans will be 71.83%. The weighted average Loan-to-Value
Ratio at origination of equity refinance Mortgage Loans will be 72.75%.

                                      S-19





<PAGE>

                 MORTGAGED PROPERTY TYPES OF THE MORTGAGE LOANS

<TABLE>
<CAPTION>
                                                     NUMBER OF                            PERCENT OF
PROPERTY TYPE                                      MORTGAGE LOANS   PRINCIPAL BALANCE   MORTGAGE LOANS
-------------                                      --------------   -----------------   --------------
<S>                                                <C>              <C>                 <C>
Single-family detached...........................      1,007          $165,608,250           61.24%
Planned Unit Developments (detached).............        175            33,509,268           12.39
Two- to four-family units........................        413            52,512,912           19.42
Condo Low-Rise (less than 5 stories).............         97             9,542,349            3.53
Condo Mid-Rise (5 to 8 stories)..................          7               874,106            0.32
Condotel (1-4 stories)...........................          1                82,464            0.03
Condotel (5-8 stories)...........................          1                83,905            0.03
Pre-cut/Panelized Home...........................          1               125,000            0.05
Condo High-Rise (9 stories or more)..............          6               788,379            0.29
Townhouse........................................          9             1,175,906            0.43
Townhouse (2 to 4 family units)..................         10             1,736,443            0.64
Planned Unit Developments (attached).............         23             4,133,253            1.53
Leasehold........................................          2               235,871            0.09
                                                       -----          ------------          ------
    Total........................................      1,752          $270,408,105          100.00%
                                                       -----          ------------          ------
                                                       -----          ------------          ------
</TABLE>

     GEOGRAPHIC DISTRIBUTION OF MORTGAGED PROPERTIES OF THE MORTGAGE LOANS

<TABLE>
<CAPTION>
                                                     NUMBER OF                            PERCENT OF
STATE                                              MORTGAGE LOANS   PRINCIPAL BALANCE   MORTGAGE LOANS
-----                                              --------------   -----------------   --------------
<S>                                                <C>              <C>                 <C>
California.......................................        244          $ 56,934,943           21.06%
Texas............................................        149            17,519,682            6.48
Florida..........................................        136            17,273,110            6.39
Illinois.........................................         74            15,189,423            5.62
New York.........................................         75            12,726,965            4.71
Colorado.........................................         66            12,717,656            4.70
New Jersey.......................................         78            12,114,912            4.48
Arizona..........................................         83            11,896,110            4.40
Massachusetts....................................         66            11,638,491            4.30
Georgia..........................................         74            10,338,657            3.82
Other (1)........................................        707            92,058,156           34.04
                                                       -----          ------------          ------
    Total........................................      1,752          $270,408,105          100.00%
                                                       -----          ------------          ------
                                                       -----          ------------          ------
</TABLE>
---------
(1) Other includes states and the District of Columbia with under 3%
    concentrations individually.

    No more than 0.4% of the Mortgage Loans will be secured by Mortgaged
Properties located in any one zip code area in California and no more than 0.7%
of the Mortgage Loans will be secured by Mortgaged Properties located in any one
zip code area outside California.

            MORTGAGE LOAN DOCUMENTATION TYPES OF THE MORTGAGE LOANS

<TABLE>
<CAPTION>
                                                     NUMBER OF                            PERCENT OF
DOCUMENTATION TYPE                                 MORTGAGE LOANS   PRINCIPAL BALANCE   MORTGAGE LOANS
------------------                                 --------------   -----------------   --------------
<S>                                                <C>              <C>                 <C>
Full Documentation...............................        948          $121,514,652           44.94%
Reduced Documentation............................        804           148,893,453           55.06
                                                       -----          ------------          ------
    Total........................................      1,752          $270,408,105          100.00%
                                                       -----          ------------          ------
                                                       -----          ------------          ------
</TABLE>

    The weighted average Loan-to-Value Ratio at origination of the Mortgage
Loans which were underwritten under a reduced loan documentation program will be
74.44%. No more than 22.8% of such reduced loan documentation Mortgage Loans
will be secured by Mortgaged Properties located in California. For purposes of
the above table, Reduced Documentation includes Mortgage Loans which were
underwritten under a no stated income or no income/no asset program. See 'The
Program -- Underwriting Policies' herein.

                                      S-20





<PAGE>

                      MORTGAGE RATES OF THE MORTGAGE LOANS

<TABLE>
<CAPTION>
                                                     NUMBER OF                            PERCENT OF
MORTGAGE RATES (%)                                 MORTGAGE LOANS   PRINCIPAL BALANCE   MORTGAGE LOANS
------------------                                 --------------   -----------------   --------------
<S>                                                <C>              <C>                 <C>
 7.000 -  7.124..................................          1          $    468,822            0.17%
 7.125 -  7.249..................................          1                86,361            0.03
 7.250 -  7.374..................................          1               341,327            0.13
 7.500 -  7.624..................................          1               111,678            0.04
 7.625 -  7.749..................................          1               271,780            0.10
 7.750 -  7.874..................................          1               172,778            0.06
 8.000 -  8.124..................................          3               491,419            0.18
 8.125 -  8.249..................................          1               292,116            0.11
 8.250 -  8.374..................................          9             1,929,967            0.71
 8.375 -  8.499..................................         26             4,095,119            1.51
 8.500 -  8.624..................................         42             6,873,430            2.54
 8.625 -  8.749..................................         53             9,968,217            3.69
 8.750 -  8.874..................................         94            18,082,269            6.69
 8.875 -  8.999..................................        155            28,845,626           10.67
 9.000 -  9.124..................................        142            22,873,840            8.46
 9.125 -  9.249..................................         79            13,679,363            5.06
 9.250 -  9.374..................................        173            28,839,739           10.67
 9.375 -  9.499..................................        157            25,936,963            9.59
 9.500 -  9.624..................................        219            31,303,376           11.58
 9.625 -  9.749..................................        133            20,414,059            7.55
 9.750 -  9.874..................................        127            15,768,436            5.83
 9.875 -  9.999..................................        173            21,833,820            8.07
10.000 - 10.124..................................         65             7,230,403            2.67
10.125 - 10.249..................................         75             7,951,335            2.94
10.250 - 10.374..................................         14             1,724,596            0.64
10.375 - 10.499..................................          4               713,006            0.26
10.500 - 10.624..................................          2               108,260            0.04
                                                       -----          ------------          ------
    Total........................................      1,752          $270,408,105          100.00%
                                                       -----          ------------          ------
                                                       -----          ------------          ------
</TABLE>

    As of the Cut-off Date, the weighted average Mortgage Rate of the Mortgage
Loans will be approximately 9.2772% per annum.

                 NET MORTGAGE RATES OF DISCOUNT MORTGAGE LOANS

<TABLE>
<CAPTION>
                                                     NUMBER OF                            PERCENT OF
NET MORTGAGE RATE (%)                              MORTGAGE LOANS   PRINCIPAL BALANCE   MORTGAGE LOANS
---------------------                              --------------   -----------------   --------------
<S>                                                <C>              <C>                 <C>
6.720%...........................................         1           $  468,822.00          0.17%
6.845%...........................................         1               86,361.00          0.03
6.970%...........................................         1              341,327.00          0.13
7.220%...........................................         1              111,678.00          0.04
7.345%...........................................         1              271,780.00          0.10
7.470%...........................................         1              172,778.00          0.06
7.720%...........................................         3              491,419.00          0.18
7.845%...........................................         3            1,039,140.00          0.38
7.970%...........................................        10            2,299,743.00          0.85
                                                         --           -------------          ----
    Total........................................        22           $5,283,048.00          1.95%
                                                         --           -------------          ----
                                                         --           -------------          ----
</TABLE>

    As of the Cut-off Date, the weighted average of the Discount Fractions of
the Discount Mortgage Loans was approximately 4.20155024%.

                                      S-21





<PAGE>

        ORIGINAL MORTGAGE LOAN PRINCIPAL BALANCES OF THE MORTGAGE LOANS

<TABLE>
<CAPTION>
ORIGINAL MORTGAGE                                    NUMBER OF                            PERCENT OF
LOAN BALANCE                                       MORTGAGE LOANS   PRINCIPAL BALANCE   MORTGAGE LOANS
------------                                       --------------   -----------------   --------------
<S>                                                <C>              <C>                 <C>
$     0 - 100,000................................        714          $ 47,457,402           17.55%
100,001 - 200,000................................        608            86,365,159           31.94
200,001 - 300,000................................        254            63,364,641           23.43
300,001 - 400,000................................        109            37,627,717           13.92
400,001 - 500,000................................         39            18,019,390            6.66
500,001 - 600,000................................         10             5,515,455            2.04
600,001 - 700,000................................         15             9,721,203            3.60
700,001 - 800,000................................          2             1,503,498            0.56
800,001 - 900,000................................          1               833,641            0.31
                                                       -----          ------------          ------
    Total........................................      1,752          $270,408,105          100.00%
                                                       -----          ------------          ------
                                                       -----          ------------          ------
</TABLE>

    As of the Cut-off Date, the average unpaid principal balance of the Mortgage
Loans will be approximately $154,343.

               ORIGINAL LOAN-TO-VALUE RATIO OF THE MORTGAGE LOANS

<TABLE>
<CAPTION>
ORIGINAL                                             NUMBER OF                            PERCENT OF
LOAN-TO-VALUE RATIO (%)                            MORTGAGE LOANS   PRINCIPAL BALANCE   MORTGAGE LOANS
-----------------------                            --------------   -----------------   --------------
<S>                                                <C>              <C>                 <C>
 0.01 - 50.00....................................         70          $ 10,460,002            3.87%
50.01 - 55.00....................................         25             4,050,878            1.50
55.01 - 60.00....................................         48            12,255,966            4.53
60.01 - 65.00....................................         55             9,037,063            3.34
65.01 - 70.00....................................        116            17,939,375            6.63
70.01 - 75.00....................................        174            32,018,508           11.84
75.01 - 80.00....................................        551            97,328,323           35.99
80.01 - 85.00....................................         57             8,074,393            2.99
85.01 - 90.00....................................        585            68,724,673           25.42
90.01 - 95.00....................................         71            10,518,923            3.89
                                                       -----          ------------          ------
    Total........................................      1,752          $270,408,105          100.00%
                                                       -----          ------------          ------
                                                       -----          ------------          ------
</TABLE>

    The weighted average Loan-to-Value Ratio at origination of the Mortgage
Loans will be approximately 78.43%.

    In connection with the Mortgage Loans secured by a leasehold interest, the
related Mortgage Collateral Seller shall have represented to the Depositor that,
among other things: the use of leasehold estates for residential properties is
an accepted practice in the area where the related Mortgaged Property is
located; residential property in such area consisting of leasehold estates is
readily marketable; the lease is recorded and no party is in any way in breach
of any provision of such lease; the leasehold is in full force and effect and is
not subject to any prior lien or encumbrance by which the leasehold could be
terminated or subject to any charge or penalty; and the remaining term of the
lease does not terminate less than ten years after the maturity date of such
Mortgage Loan.

STANDARD HAZARD INSURANCE AND PRIMARY MORTGAGE INSURANCE

    Each Mortgage Loan is required to be covered by a standard hazard insurance
policy. In addition, to the best of the Depositor's knowledge, except with
respect to one Mortgage Loan representing approximately 0.03% of the Mortgage
Loans, each Mortgage Loan with a Loan-to-Value Ratio at origination in excess of
80% will be insured by a primary mortgage insurance policy (a 'PRIMARY INSURANCE
POLICY') covering at least 30% of the principal balance of the Mortgage Loan at
origination if the Loan-to-Value Ratio is between 95.00% and 90.01%, at least
25% of the balance if the Loan-to-Value Ratio is between 90.00% and 85.01% and
at least 12% of the balance if the Loan-to-Value Ratio is between 85.00% and
80.01%.

    Substantially all of such Primary Insurance Policies were issued by General
Electric Mortgage Insurance Corporation, PMI Mortgage Insurance Company,
Mortgage Guaranty Insurance Corporation, United Guaranty Residential Insurance
Company, Commonwealth Mortgage Assurance Corporation or Republic Mortgage

                                      S-22





<PAGE>

Insurance Company (collectively, the 'PRIMARY INSURERS'). Each Primary Insurer
has a claims paying-ability currently acceptable to the Rating Agencies that
have been requested to rate the Certificates; however, there is no assurance as
to the actual ability of any Primary Insurer to pay claims. See 'Insurance
Policies on Mortgage Loans or Contracts -- Standard Hazard Insurance on
Mortgaged Properties' and ' -- Primary Mortgage Insurance Policies' in the
Prospectus.

THE PROGRAM

    General. Residential Funding commenced its Expanded Criteria Mortgage
Program (the 'PROGRAM') primarily for the purchase of mortgage loans that
generally would not qualify for other first mortgage purchase programs such as
those run by Fannie Mae or Freddie Mac or by Residential Funding in connection
with securities issued by the Depositor's affiliate, Residential Funding
Mortgage Securities I, Inc. Examples include mortgage loans secured by non-owner
occupied properties, mortgage loans made to borrowers whose income is not
required to be provided or verified, mortgage loans with higher Loan-to-Value
Ratios or mortgage loans made to borrowers whose ratios of debt service on the
mortgage loan to income and total debt service on borrowings to income are
higher than for such other programs. Borrowers may be International Borrowers.
The Mortgage Loans also include mortgage loans secured by smaller or larger
parcels of land; mortgage loans secured by units in 'condotels,' which generally
provide the services of commercial hotels for residential occupants of units
owned by the borrowers as vacation or investment properties; mortgage loans with
higher Loan-to-Value Ratios than in such other programs and mortgage loans with
Loan-to-Value Ratios over 80% that do not require primary mortgage insurance.
See ' -- Program Underwriting Standards,' below. The inclusion of such Mortgage
Loans may present certain risks that are not present in such other programs. The
Program is administered by Residential Funding on behalf of the Depositor.

    Qualifications of Program Sellers. Each Program Seller has been selected by
Residential Funding on the basis of criteria set forth in Residential Funding's
Program Seller Guide (as applicable to the Program, the 'PROGRAM SELLER GUIDE').
See 'The Trusts -- Mortgage Collateral Sellers' in the Prospectus.

    Program Underwriting Standards. In accordance with the Program Seller Guide,
the Program Seller is required to review an application designed to provide to
the original lender pertinent credit information concerning the mortgagor. As
part of the description of the mortgagor's financial condition, each mortgagor
is required to furnish information (which may have been supplied solely in such
application) with respect to its assets, liabilities, income (except as
described below), credit history and employment history, and to furnish an
authorization to apply for a credit report which summarizes the borrower's
credit history with local merchants and lenders and any record of bankruptcy.
The mortgagor may also be required to authorize verifications of deposits at
financial institutions where the mortgagor had demand or savings accounts. In
the case of non-owner occupied properties, income derived from the mortgaged
property may be considered for underwriting purposes. With respect to mortgaged
property consisting of a vacation or second home, generally no income derived
from the property is considered for underwriting purposes.

    Based on the data provided in the application and certain verifications (if
required), a determination is made by the original lender that the mortgagor's
monthly income (if required to be stated) will be sufficient to enable the
mortgagor to meet its monthly obligations on the mortgage loan and other
expenses related to the property (such as property taxes, utility costs,
standard hazard insurance and other fixed obligations other than housing
expenses). Generally, scheduled payments on a mortgage loan during the first
year of its term plus taxes and insurance and all scheduled payments on
obligations that extend beyond ten months (including those mentioned above and
other fixed obligations) equal no more than specified percentages of the
prospective mortgagor's gross income. The originator may also consider the
amount of liquid assets available to the mortgagor after origination.

    Certain of the Mortgage Loans have been originated under 'reduced
documentation' or 'no stated income' programs which require less documentation
and verification than do traditional 'full documentation' programs. Generally,
under a 'reduced documentation' program, no verification of a mortgagor's stated
income is undertaken by the originator. Under a 'no stated income' program,
certain borrowers with acceptable payment histories will not be required to
provide any information regarding income and no other investigation regarding
the borrower's income will be undertaken. Under a 'no income/no asset' program,
no verification of a mortgagor's income or assets is undertaken by the
originator. The underwriting for such mortgage loans may be based primarily or
entirely on an appraisal of the Mortgaged Property and the Loan-to-Value Ratio
at origination.

                                      S-23





<PAGE>

    The adequacy of the mortgaged property as security for repayment of the
related mortgage loan generally is determined by an appraisal in accordance with
appraisal procedure guidelines set forth in the Program Seller Guide. Appraisers
may be staff appraisers employed by the originator. The appraisal procedure
guidelines generally require the appraiser or an agent on its behalf to
personally inspect the property and to verify whether the property is in good
condition and that construction, if new, has been substantially completed. The
appraiser is required to consider a market data analysis of recent sales of
comparable properties and, when deemed applicable, an analysis based on income
generated from the property, or replacement cost analysis based on the current
cost of constructing or purchasing a similar property. In certain instances, the
Loan-to-Value Ratio is based on the appraised value as indicated on a review
appraisal conducted by the Mortgage Collateral Seller or originator.

    Prior to assigning the Mortgage Loans to the Depositor, Residential Funding
reviewed the underwriting documentation for substantially all of the Mortgage
Loans and, in such cases, determined that the Mortgage Loans were originated
generally in accordance with or in a manner generally consistent with the
underwriting standards set forth in the Program Seller Guide.

    Because of the program criteria and underwriting standards described above,
the Mortgage Loans may experience greater rates of delinquency, foreclosure and
loss than mortgage loans required to satisfy more stringent underwriting
standards.

RESIDENTIAL FUNDING

    Residential Funding will be responsible for master servicing the Mortgage
Loans. Such responsibilities will include the receipt of funds from
Subservicers, the reconciliation of servicing activity with respect to the
Mortgage Loans, investor reporting, remittances to the Trustee to accommodate
distributions to Certificateholders, follow up with Subservicers with respect to
Mortgage Loans that are delinquent or for which servicing decisions may need to
be made, management and liquidation of mortgaged properties acquired by
foreclosure or deed in lieu of foreclosure, notices and other responsibilities
as detailed in the Pooling and Servicing Agreement.

    Residential Funding and its affiliates are active purchasers of
non-conforming mortgage loans and have sold a substantial amount of mortgage
loans that do not present certain of the special risk factors presented by the
Mortgage Loans as described herein. Residential Funding serves as the master
servicer for transactions backed by most of such mortgage loans. As a result of
the program criteria and underwriting standards of the Mortgage Loans, however,
the Mortgage Loans may experience rates of delinquency, foreclosure and loss
that are higher than those experienced by other pools of mortgage loans for
which Residential Funding acts as master servicer.

ADDITIONAL INFORMATION

    The description in this Prospectus Supplement of the Mortgage Pool and the
Mortgaged Properties is based upon the Mortgage Pool as constituted at the close
of business on the Cut-off Date, as adjusted for the scheduled principal
payments due on or before such date. Prior to the issuance of the Offered
Certificates (as defined below), Mortgage Loans may be removed from the Mortgage
Pool as a result of incomplete documentation or otherwise, if the Depositor
deems such removal necessary or appropriate. A limited number of other mortgage
loans may be added to the Mortgage Pool prior to the issuance of the Offered
Certificates. The Depositor believes that the information set forth herein will
be substantially representative of the characteristics of the Mortgage Pool as
it will be constituted at the time the Offered Certificates are issued, although
the range of Mortgage Rates and maturities and certain other characteristics of
the Mortgage Loans in the Mortgage Pool may vary.

    A Current Report on Form 8-K, together with the Pooling and Servicing
Agreement, will be filed with the Securities and Exchange Commission within
fifteen days after the initial issuance of the Offered Certificates. In the
event Mortgage Loans are removed from or added to the Mortgage Pool as set forth
in the preceding paragraph, such removal or addition will be noted in the
Current Report on Form 8-K.

                                      S-24








<PAGE>

                        DESCRIPTION OF THE CERTIFICATES

GENERAL

    The Series 2000-QS9 Mortgage Asset-Backed Pass-Through Certificates will
include the following fifteen classes (the 'SENIOR CERTIFICATES'): (i) Class A-1
Certificates (the 'PAC CERTIFICATES'); (ii) Class A-2 Certificates (the
'ACCRETION DIRECTED CERTIFICATES'); (iii) Class A-3 Certificates, Class A-6
Certificates, Class A-7 Certificates, Class A-8 Certificates and Class A-10
Certificates (collectively, the 'RETAIL CERTIFICATES'); (iv) Class A-4
Certificates (the 'LOCKOUT CERTIFICATES'); (v) Class A-5 Certificates (the
'ACCRUAL COMPANION CERTIFICATES'); (vi) Class A-9 Certificates; (vii) Class A-P
Certificates (the 'PRINCIPAL ONLY CERTIFICATES'); (viii) Class HJ Certificates
(the 'FIXED STRIP CERTIFICATES'); (ix) Class A-V Certificates (the 'VARIABLE
STRIP CERTIFICATES' and, together with the Class HJ Certificates, the 'INTEREST
ONLY CERTIFICATES'); and (x) Class R-I Certificates and Class R-II Certificates
(together, the 'RESIDUAL CERTIFICATES'). The Class A-1 Certificates through
Class A-10 Certificates, Interest Only Certificates and Principal Only
Certificates are collectively referred to herein as the 'CLASS A CERTIFICATES.'
In addition to the Senior Certificates, the Series 2000-QS9 Mortgage
Asset-Backed Pass-Through Certificates will also include six classes of
subordinate certificates which are designated as the Class M-1 Certificates,
Class M-2 Certificates and Class M-3 Certificates (collectively, the 'CLASS M
CERTIFICATES') and the Class B-1 Certificates, Class B-2 Certificates and
Class B-3 Certificates (collectively, the 'CLASS B CERTIFICATES' and, together
with the Class M Certificates and Senior Certificates, the 'CERTIFICATES'). Only
the Senior Certificates and Class M Certificates (together, the 'OFFERED
CERTIFICATES') are offered hereby.

    The Certificates will evidence the entire beneficial ownership interest in
the Trust. The Trust will consist of: (i) the Mortgage Loans; (ii) such assets
as from time to time are identified as deposited in respect of the Mortgage
Loans in the Custodial Account and in the Certificate Account and belonging to
the Trust; (iii) property acquired by foreclosure of such Mortgage Loans or deed
in lieu of foreclosure; (iv) any applicable Primary Insurance Policies and
Primary Hazard Insurance Policies; (v) the Rounding Account; and (vi) all
proceeds of any of the foregoing.

    The Senior Certificates will evidence in the aggregate an initial beneficial
ownership interest of approximately 92.75% in the Trust. The Class M-1,
Class M-2, Class M-3, Class B-1, Class B-2 and Class B-3 Certificates will
evidence in the aggregate an initial beneficial ownership interest of
approximately 3.45%, 1.25%, 1.15%, 0.65%, 0.30% and 0.45%, respectively, in the
Trust.

    The Principal Only Certificates will be entitled to payments based on the
Discount Fraction of the Discount Mortgage Loans. A 'DISCOUNT MORTGAGE LOAN' is
any Mortgage Loan with a Net Mortgage Rate less than 8.00% per annum. With
respect to each Discount Mortgage Loan, the 'DISCOUNT FRACTION' is equal to a
fraction, expressed as a percentage, the numerator of which is 8.00% minus the
Net Mortgage Rate for such Discount Mortgage Loan and the denominator of which
is 8.00%. The Mortgage Loans other than the Discount Mortgage Loans are referred
to herein as the 'NON-DISCOUNT MORTGAGE LOANS.'

    The Offered Certificates (other than the Principal Only, Variable Strip and
Residual Certificates) (together, the 'DTC REGISTERED CERTIFICATES') will be
available only in book-entry form through the facilities of DTC. The DTC
Registered Certificates will be issued, maintained and transferred on the
book-entry records of DTC and its Participants. The Principal Only, Variable
Strip and Residual Certificates will be issued in registered, certificated form.
The DTC Registered Certificates (other than the Fixed Strip Certificates and the
Retail Certificates) will be issued in minimum denominations (by principal
balance) of $25,000 (or $250,000, in the case of the Class M-2 Certificates and
Class M-3 Certificates) and integral multiples of $1 in excess thereof. The
Fixed Strip Certificates will be issued in book-entry form in minimum
denominations representing an initial Notional Amount of $2,000,000. The Retail
Certificates will be issued in minimum denominations of $1,000 and integral
multiples of $1,000 in excess thereof. The Principal Only Certificates will be
issued in minimum denominations of $25,000 and integral multiples of $1,000 in
excess thereof, except for one Principal Only Certificate evidencing the sum of
an authorized denomination thereof and the remainder of the aggregate initial
Certificate Principal Balance of such class of Certificates. The Variable Strip
Certificates and Residual Certificates will be issued in minimum denominations
of a 20% Percentage Interest, except, in the case of one Residual Certificate,
as otherwise set forth herein under 'Certain Federal Income Tax Consequences'
and, in the case of the Variable Strip Certificates, as otherwise set forth
herein under ' -- Interest Distributions.'

                                      S-25





<PAGE>

    The DTC Registered Certificates will be represented by one or more
certificates registered in the name of the nominee of DTC. The Depositor has
been informed by DTC that DTC's nominee will be Cede & Co. ('CEDE'). No
Beneficial Owner will be entitled to receive a certificate of such class in
fully registered, certificated form (a 'DEFINITIVE CERTIFICATE'), except as set
forth in the Prospectus under 'Description of the Certificates -- Form of
Certificates.' Unless and until Definitive Certificates are issued for the DTC
Registered Certificates under the limited circumstances described herein, all
references to actions by Certificateholders with respect to the DTC Registered
Certificates shall refer to actions taken by DTC upon instructions from its
Participants, and all references herein to distributions, notices, reports and
statements to Certificateholders with respect to the DTC Registered Certificates
shall refer to distributions, notices, reports and statements to DTC or Cede, as
the registered holder of the DTC Registered Certificates, for distribution to
Beneficial Owners by DTC in accordance with DTC procedures.

BOOK-ENTRY REGISTRATION OF CERTAIN OF THE OFFERED CERTIFICATES

    General. Beneficial Owners that are not Participants or Indirect
Participants but desire to purchase, sell or otherwise transfer ownership of, or
other interests in, the related DTC Registered Certificates may do so only
through Participants and Indirect Participants. In addition, Beneficial Owners
will receive all distributions of principal of and interest on the related DTC
Registered Certificates from the Paying Agent through DTC and Participants.
Accordingly, Beneficial Owners may experience delays in their receipt of
payments. Unless and until Definitive Certificates are issued for the related
DTC Registered Certificates, it is anticipated that the only registered
Certificateholder of such DTC Registered Certificates will be Cede, as nominee
of DTC. Beneficial Owners will not be recognized by the Trustee or the Master
Servicer as Certificateholders, as such term is used in the Pooling and
Servicing Agreement, and Beneficial Owners will be permitted to receive
information furnished to Certificateholders and to exercise the rights of
Certificateholders only indirectly through DTC, its Participants and Indirect
Participants.

    Under the rules, regulations and procedures creating and affecting DTC and
its operations (the 'RULES'), DTC is required to make book-entry transfers of
DTC Registered Certificates among Participants and to receive and transmit
distributions of principal of, and interest on, such DTC Registered
Certificates. Participants and Indirect Participants with which Beneficial
Owners have accounts with respect to such DTC Registered Certificates similarly
are required to make book-entry transfers and receive and transmit such
distributions on behalf of their respective Beneficial Owners. Accordingly,
although Beneficial Owners will not possess physical certificates evidencing
their interests in the DTC Registered Certificates, the Rules provide a
mechanism by which Beneficial Owners, through their Participants and Indirect
Participants, will receive distributions and will be able to transfer their
interests in the DTC Registered Certificates.

    None of the Depositor, the Master Servicer or the Trustee 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 DTC Registered Certificates
held by Cede, as nominee for DTC, or for maintaining, supervising or reviewing
any records relating to such beneficial ownership interests.

    Definitive Certificates. Definitive Certificates will be issued to
Beneficial Owners or their nominees, respectively, rather than to DTC or its
nominee, only under the limited conditions set forth in the Prospectus under
'Description of the Certificates -- Form of Certificates.'

    Upon the occurrence of an event described in the Prospectus in the fourth
paragraph under 'Description of the Certificates -- Form of Certificates,' the
Trustee is required to notify, through DTC, Participants who have ownership of
DTC Registered Certificates as indicated on the records of DTC of the
availability of Definitive Certificates for their DTC Registered Certificates.
Upon surrender by DTC of the definitive certificates representing the DTC
Registered Certificates and upon receipt of instructions from DTC for
re-registration, the Trustee will reissue the DTC Registered Certificates as
Definitive Certificates issued in the respective principal amounts owned by
individual Beneficial Owners, and thereafter the Trustee and the Master Servicer
will recognize the holders of such Definitive Certificates as Certificateholders
under the Pooling and Servicing Agreement.

    For additional information regarding DTC and the DTC Registered
Certificates, see 'Description of the Certificates -- Form of Certificates' in
the Prospectus.

                                      S-26





<PAGE>

AVAILABLE DISTRIBUTION AMOUNT

    The 'AVAILABLE DISTRIBUTION AMOUNT' for any Distribution Date will be equal
to the sum of (i) the aggregate amount of scheduled payments on the Mortgage
Loans due during the related Due Period and received on or prior to the related
Determination Date, after deduction of the related master servicing fees and any
subservicing fees (collectively, the 'SERVICING FEES'), (ii) certain unscheduled
payments, including Mortgagor prepayments on the Mortgage Loans, Insurance
Proceeds, Liquidation Proceeds and proceeds from repurchases of and
substitutions for the Mortgage Loans occurring during the preceding calendar
month and (iii) all Advances made for such Distribution Date, in each case, net
of amounts reimbursable therefrom to the Master Servicer and any Subservicer. In
addition to the foregoing amounts, with respect to unscheduled collections, not
including Mortgagor prepayments, the Master Servicer may elect to treat such
amounts as included in the Available Distribution Amount for the Distribution
Date in the month of receipt, but is not obligated to do so. As described herein
under ' -- Principal Distributions on the Senior Certificates,' any such amount
with respect to which such election is so made shall be treated as having been
received on the last day of the preceding calendar month for the purposes of
calculating the amount of principal and interest distributions to any class of
Certificates. Distributions will be made on the 25th day of each month (or, if
such 25th day is not a business day, on the next succeeding business day),
commencing in September 2000 (each, a 'DISTRIBUTION DATE'). With respect to any
Distribution Date, (i) with respect to any Mortgage Loan, the 'DUE PERIOD' is
the period commencing on the second day of the month prior to the month in which
such Distribution Date occurs and ending on the first day of the month in which
such Distribution Date occurs, and a 'DUE DATE' is the date during the related
Due Period on which scheduled payments are due and (ii) with respect to the
Certificates, the 'DETERMINATION DATE' is the 20th day of the month in which
such Distribution Date occurs or, if such day is not a business day, the
immediately succeeding business day.

INTEREST DISTRIBUTIONS

    Holders of each class of Senior Certificates (other than the Principal Only
Certificates and, until the Accretion Termination Date, the Accrual Companion
Certificates) will be entitled to receive interest distributions in an amount
equal to the Accrued Certificate Interest on such class on each Distribution
Date to the extent of the Available Distribution Amount for such Distribution
Date. The aggregate amount of the interest on the Senior Certificates payable on
any Distribution Date, including the Accrual Distribution Amount (as defined
below), is referred to herein as the 'SENIOR INTEREST DISTRIBUTION AMOUNT.'

    Holders of each class of Class M Certificates will be entitled to receive
interest distributions in an amount equal to the Accrued Certificate Interest on
such class on each Distribution Date, to the extent of the Available
Distribution Amount for such Distribution Date after distributions of interest
and principal to the Senior Certificates, reimbursements for certain Advances to
the Master Servicer and distributions of interest and principal to any class of
Class M Certificates having a higher payment priority.

    With respect to any Distribution Date, 'ACCRUED CERTIFICATE INTEREST' will
be equal to (a) in the case of each class of Offered Certificates (other than
the Principal Only Certificates, which are not entitled to distributions of
interest, and Interest Only Certificates), interest accrued during the related
Interest Accrual Period on the Certificate Principal Balance of the Certificates
of such class immediately prior to such Distribution Date at the per annum rate
at which interest accrues on such class (the 'PASS-THROUGH RATE') and (b) in the
case of the Interest Only Certificates, interest accrued during the related
Interest Accrual Period on the Notional Amount thereof immediately prior to such
Distribution Date at the then-applicable Pass-Through Rate on such class for
such Distribution Date, in each case less interest shortfalls from the Mortgage
Loans, if any, allocated thereto for such Distribution Date to the extent not
covered with respect to the Senior Certificates by the Subordination provided by
the Class B Certificates and Class M Certificates and, with respect to the
Class M Certificates to the extent not covered by the Subordination provided by
the Class B Certificates and any class or classes of Class M Certificates having
a lower payment priority, including in each case:

        (i) any Prepayment Interest Shortfall (as defined below) to the extent
    not covered by the Master Servicer as described below;

        (ii) the interest portions of Realized Losses (including Special Hazard
    Losses in excess of the Special Hazard Amount ('EXCESS SPECIAL HAZARD
    LOSSES'), Fraud Losses in excess of the Fraud Loss Amount ('EXCESS FRAUD
    LOSSES'), Bankruptcy Losses in excess of the Bankruptcy Amount ('EXCESS
    BANKRUPTCY

                                      S-27





<PAGE>

    LOSSES') and losses occasioned by war, civil insurrection, certain
    governmental actions, nuclear reaction and certain other risks
    ('EXTRAORDINARY LOSSES')) not allocated through Subordination;

        (iii) the interest portion of any Advances that were made with respect
    to delinquencies that were ultimately determined to be Excess Special Hazard
    Losses, Excess Fraud Losses, Excess Bankruptcy Losses or Extraordinary
    Losses; and

        (iv) any other interest shortfalls not covered by Subordination,
    including interest shortfalls relating to the Relief Act or similar
    legislation or regulations, all allocated as described below.

Such reductions will be allocated among the holders of all classes of
Certificates in proportion to the respective amounts of Accrued Certificate
Interest that would have been payable on such Distribution Date absent such
reductions. In the case of each class of Class M Certificates, Accrued
Certificate Interest on such class will be further reduced by the allocation of
the interest portion of certain losses thereto, if any, as described below under
' -- Allocation of Losses; Subordination.' Accrued Certificate Interest on each
class of Senior Certificates will be distributed on a pro rata basis. Accrued
Certificate Interest on each class of Certificates is calculated on the basis of
a 360-day year consisting of twelve 30-day months. The Principal Only
Certificates are not entitled to distributions of interest.

    On or prior to the Accretion Termination Date (as defined below), interest
shortfalls to be allocated to the Accrual Companion Certificates will be
allocated by reducing the amount that is added to the Certificate Principal
Balance thereof in respect of Accrued Certificate Interest on such Distribution
Date. This reduction will correspond to a reduction in the amount available to
be distributed in respect of principal on the applicable Distribution Date to
the holders of the Accretion Directed Certificates to the extent such
Certificates would have been entitled to such amounts.

    The 'ACCRETION TERMINATION DATE' is the earlier to occur of (i) the
Distribution Date on which the aggregate Certificate Principal Balance of the
Accretion Directed Certificates has been reduced to zero and (ii) the Credit
Support Depletion Date. On each Distribution Date preceding the Accretion
Termination Date, an amount equal to the amount of Accrued Certificate Interest
on the Accrual Companion Certificates for such date will be added to the
Certificate Principal Balance thereof, and such amount will be distributed to
the holders of the Accretion Directed Certificates in reduction of the
Certificate Principal Balance thereof, in the order of priority described
herein, until the Certificate Principal Balance thereof has been reduced to
zero. On the Accretion Termination Date, the Accrued Certificate Interest on the
Accrual Companion Certificates for such date will be payable to the holders of
the Accretion Directed Certificates as a distribution of principal until the
Certificate Principal Balance thereof has been reduced to zero, any such amount
will be added to the Certificate Principal Balance of the Accrual Companion
Certificates, and any remaining amount of Accrued Certificate Interest will be
paid to the holders of the Accrual Companion Certificates as a distribution of
interest on such Distribution Date; provided, however, if the Accretion
Termination Date is the Credit Support Depletion Date, the entire amount of
Accrued Certificate Interest for such date will be payable to the holders of the
Accrual Companion Certificates as a distribution of interest on such
Distribution Date. The amount of Accrued Certificate Interest on the Accrual
Companion Certificates that is added to the Certificate Principal Balance
thereof is referred to herein as the 'ACCRUAL DISTRIBUTION AMOUNT'. Any amount
so added to the Certificate Principal Balance of the Accrual Companion
Certificates will thereafter accrue interest at a rate of 8.00% per annum.

    The 'INTEREST ACCRUAL PERIOD' for all classes of Certificates is the
calendar month preceding the month in which the Distribution Date occurs.

    The 'PREPAYMENT INTEREST SHORTFALL' for any Distribution Date is equal to
the aggregate shortfall, if any, in collections of interest (adjusted to the
related Net Mortgage Rates) resulting from Mortgagor prepayments on the Mortgage
Loans during the preceding calendar month. Such shortfalls will result because
interest on prepayments in full is distributed only to the date of prepayment,
and because no interest is distributed on prepayments in part, as such
prepayments in part are applied to reduce the outstanding principal balance of
the related Mortgage Loans as of the Due Date in the month of prepayment.
However, with respect to any Distribution Date, any Prepayment Interest
Shortfalls resulting from prepayments in full during the preceding calendar
month will be offset by the Master Servicer, but only to the extent such
Prepayment Interest Shortfalls do not exceed an amount equal to the lesser of
(a) one-twelfth of 0.125% of the Stated Principal Balance (as defined herein) of
the Mortgage Loans immediately preceding such Distribution Date and (b) the sum
of the

                                      S-28





<PAGE>

master servicing fee payable to the Master Servicer in respect of its master
servicing activities and reinvestment income received by the Master Servicer on
amounts payable with respect to such Distribution Date. Prepayment Interest
Shortfalls resulting from partial prepayments will not be offset by the Master
Servicer from master servicing compensation or otherwise. No assurance can be
given that the master servicing compensation available to cover Prepayment
Interest Shortfalls resulting from prepayments in full will be sufficient
therefor. See 'Pooling and Servicing Agreement -- Servicing and Other
Compensation and Payment of Expenses' herein.

    If on any Distribution Date the Available Distribution Amount is less than
Accrued Certificate Interest on the Senior Certificates for such Distribution
Date, the shortfall will be allocated among the holders of all classes of Senior
Certificates in proportion to the respective amounts of Accrued Certificate
Interest for such Distribution Date. In addition, the amount of any such
interest shortfalls that are covered by Subordination (specifically, interest
shortfalls not described in clauses (i) through (iv) in the fifth preceding
paragraph) will be unpaid interest and will be distributable to holders of the
Certificates of such classes entitled to such amounts on subsequent Distribution
Dates, to the extent of available funds after interest distributions as required
herein. Such shortfalls could occur, for example, if delinquencies on the
Mortgage Loans were exceptionally high and were concentrated in a particular
month and Advances by the Master Servicer did not cover the shortfall. Any such
amounts so carried forward will not bear interest. Any interest shortfalls will
not be offset by a reduction in the servicing compensation of the Master
Servicer or otherwise, except to the limited extent described in the preceding
paragraph with respect to Prepayment Interest Shortfalls resulting from
prepayments in full.

    The Pass-Through Rates on all classes of Offered Certificates (other than
the Variable Strip Certificates) are fixed and are set forth in the table on
page S-4 hereof.

    The Pass-Through Rate on the Variable Strip Certificates on each
Distribution Date will equal the weighted average, as of the Due Date during the
related Due Period, of the Pool Strip Rates on each of the Mortgage Loans,
weighted on the basis of the Stated Principal Balances of such Mortgage Loans
immediately preceding such Distribution Date. The 'POOL STRIP RATE' on any
Mortgage Loan is equal to the Net Mortgage Rate thereon minus 8.00% (but not
less than 0.00%) per annum. As of the Cut-off Date, the Pool Strip Rates on the
Mortgage Loans ranged between 0.00% and 2.17% per annum. The 'NET MORTGAGE RATE'
on each Mortgage Loan is equal to the Mortgage Rate thereon minus the rate per
annum at which the related master servicing and subservicing fees accrue (the
'SERVICING FEE RATE'). The initial Pass-Through Rate on the Variable Strip
Certificates is 0.9491% per annum.

    As described herein, the Accrued Certificate Interest allocable to each
class of Certificates entitled to distributions in respect of interest is based
on the Certificate Principal Balance thereof or, in the case of the Interest
Only Certificates, on the related Notional Amount thereof. The 'CERTIFICATE
PRINCIPAL BALANCE' of any Offered Certificate as of any date of determination is
equal to the initial Certificate Principal Balance thereof (plus, in the case of
the Accrual Companion Certificates, the Accrual Distribution Amount), reduced by
the aggregate of (a) all amounts allocable to principal previously distributed
with respect to such Certificate and (b) any reductions in the Certificate
Principal Balance thereof deemed to have occurred in connection with allocations
of Realized Losses in the manner described herein, provided that, after the
Certificate Principal Balances of the Class B Certificates have been reduced to
zero, the Certificate Principal Balance of any Certificate of the class of
Class M Certificates outstanding with the lowest payment priority shall equal
the percentage interest evidenced thereby multiplied by the excess, if any, of
(i) the then aggregate Stated Principal Balance of all of the Mortgage Loans
over (ii) the then aggregate Certificate Principal Balance of all other classes
of Certificates then outstanding, not taking into consideration any reduction in
the Certificate Principal Balances of the Retail Certificates due to a
withdrawal of funds from the related Rounding Account. As of any date of
determination, the 'NOTIONAL AMOUNT' of the Fixed Strip Certificates is equal to
the Certificate Principal Balance of the PAC Certificates. As of any date of
determination, the Notional Amount of the Variable Strip Certificates will be
equal to the aggregate Stated Principal Balance of the Mortgage Loans. At the
option of the initial holder of the Variable Strip Certificates, the Variable
Strip Certificates may be exchanged by such holder for one or more Variable
Strip Certificates that represent, in the aggregate, the Pool Strip Rates on
each of the Mortgage Loans as of such date, and the Pass-Through Rate and
Notional Amount of each Variable Strip Certificate so exchanged will be based on
the Pool Strip Rates and Stated Principal Balances of the Mortgage Loans
corresponding to such Variable Strip Certificate. Reference to a Notional Amount
with respect to any Interest Only Certificate is solely for convenience in
certain calculations and does not represent the right to receive any
distributions allocable to principal.

                                      S-29





<PAGE>

PRINCIPAL DISTRIBUTIONS ON THE SENIOR CERTIFICATES

    Except as provided below, holders of the Senior Certificates (other than the
Interest Only Certificates, which are not entitled to receive distributions in
respect of principal, and the Principal Only Certificates) will be entitled to
receive on each Distribution Date, in the priority set forth herein and to the
extent of the portion of the Available Distribution Amount remaining after the
Senior Interest Distribution Amount and the Principal Only Distribution Amount
(as defined below) have been distributed, a distribution allocable to principal
equal to the sum of the following:

        (i) the product of (A) the then-applicable Senior Percentage (as defined
    below) and (B) the aggregate of the following amounts:

           (a) the principal portion of all scheduled monthly payments on the
       Mortgage Loans (other than the related Discount Fraction of the principal
       portion of such payments, with respect to each Discount Mortgage Loan)
       due during the related Due Period, whether or not received on or prior to
       the related Determination Date, less the principal portion of related
       Debt Service Reductions (other than the related Discount Fraction of the
       principal portion of such Debt Service Reductions with respect to each
       Discount Mortgage Loan), which together with other Bankruptcy Losses are
       in excess of the Bankruptcy Amount;

           (b) the principal portion of all proceeds of the repurchase of a
       Mortgage Loan (or, in the case of a substitution, certain amounts
       representing a principal adjustment) (other than the related Discount
       Fraction of the principal portion of such proceeds, with respect to each
       Discount Mortgage Loan), as required by the Pooling and Servicing
       Agreement during the preceding calendar month; and

           (c) the principal portion of all other unscheduled collections
       received during the preceding calendar month (other than full and partial
       Mortgagor prepayments and any amounts received in connection with a Final
       Disposition (as defined below) of a Mortgage Loan described in clause
       (ii) below), to the extent applied as recoveries of principal (other than
       the related Discount Fraction of the principal portion of such
       unscheduled collections, with respect to each Discount Mortgage Loan);

        (ii) in connection with the Final Disposition of a Mortgage Loan (x)
    that occurred in the preceding calendar month and (y) that did not result in
    any Excess Special Hazard Losses, Excess Fraud Losses, Excess Bankruptcy
    Losses or Extraordinary Losses, an amount equal to the lesser of:

           (a) the then-applicable Senior Percentage of the Stated Principal
       Balance of such Mortgage Loan (other than the related Discount Fraction
       of such Stated Principal Balance, with respect to a Discount Mortgage
       Loan); and

           (b) the then-applicable Senior Accelerated Distribution Percentage
       (as defined below) of the related unscheduled collections, including
       Insurance Proceeds and Liquidation Proceeds, to the extent applied as
       recoveries of principal (other than the portion of such collections, with
       respect to a Discount Mortgage Loan, included in clause (iii) of the
       definition of 'Principal Only Distribution Amount' below);

        (iii) the then-applicable Senior Accelerated Distribution Percentage of
    the aggregate of all full and partial Mortgagor prepayments (other than the
    related Discount Fraction of such Mortgagor prepayments, with respect to
    each Discount Mortgage Loan) made during the preceding calendar month;

        (iv) any portion of the Excess Subordinate Principal Amount (as defined
    below) for such Distribution Date; and

        (v) any amounts allocable to principal for any previous Distribution
    Date (calculated pursuant to clauses (i) through (iii) above) that remain
    undistributed to the extent that any such amounts are not attributable to
    Realized Losses which were allocated to the Class M Certificates or Class B
    Certificates.

    With respect to any Distribution Date, the lesser of (a) the balance of the
Available Distribution Amount remaining after the Senior Interest Distribution
Amount and the amount required to be paid to the holders of the Principal Only
Certificates have been distributed, and (b) the sum of the amounts described in
clauses (i) through (v) of the immediately preceding paragraph is hereinafter
referred to as the 'SENIOR PRINCIPAL DISTRIBUTION AMOUNT.'

                                      S-30





<PAGE>

    With respect to any Distribution Date on which the Certificate Principal
Balance of the most subordinate class or classes of Certificates then
outstanding is to be reduced to zero and on which Realized Losses are to be
allocated to such class or classes, the 'EXCESS SUBORDINATE PRINCIPAL AMOUNT' is
equal to the amount, if any, by which (i) the amount that would otherwise be
distributable in respect of principal on such class or classes of Certificates
on such Distribution Date is greater than (ii) the excess, if any, of the
aggregate Certificate Principal Balance of such class or classes of Certificates
immediately prior to such Distribution Date over the aggregate amount of
Realized Losses to be allocated to such class or classes of Certificates on such
Distribution Date, as reduced by any amount calculated pursuant to clause (v) of
the definition of 'Principal Only Distribution Amount.'

    Holders of the Principal Only Certificates will be entitled to receive on
each Distribution Date (a) prior to the Credit Support Depletion Date, to the
extent of the excess, if any, of the Available Distribution Amount remaining
after the Senior Interest Distribution Amount is distributed, a distribution
allocable to principal (the 'PRINCIPAL ONLY DISTRIBUTION AMOUNT') equal to the
aggregate of:

        (i) the related Discount Fraction of the principal portion of the
    scheduled monthly payment on each Discount Mortgage Loan due during the
    related Due Period, whether or not received on or prior to the related
    Determination Date, less the Discount Fraction of the principal portion of
    any related Debt Service Reductions which together with other Bankruptcy
    Losses are in excess of the Bankruptcy Amount;

        (ii) the related Discount Fraction of the principal portion of all
    unscheduled collections on each Discount Mortgage Loan received during the
    preceding calendar month (other than amounts received in connection with a
    Final Disposition of a Discount Mortgage Loan described in clause (iii)
    below), including full and partial Mortgagor prepayments, repurchases of
    Discount Mortgage Loans (or, in the case of a substitution, certain amounts
    representing a principal adjustment) as required by the Pooling and
    Servicing Agreement, Liquidation Proceeds and Insurance Proceeds, to the
    extent applied as recoveries of principal;

        (iii) in connection with the Final Disposition of a Discount Mortgage
    Loan that did not result in any Excess Special Hazard Losses, Excess Fraud
    Losses, Excess Bankruptcy Losses or Extraordinary Losses, an amount equal to
    the lesser of (a) the applicable Discount Fraction of the Stated Principal
    Balance of such Discount Mortgage Loan immediately prior to such
    Distribution Date and (b) the aggregate amount of collections on such
    Discount Mortgage Loan to the extent applied as recoveries of principal;

        (iv) any amounts allocable to principal for any previous Distribution
    Date (calculated pursuant to clauses (i) through (iii) above) that remain
    undistributed; and

        (v) with respect to each Final Disposition of a Discount Mortgage Loan
    in connection with such Distribution Date or any prior Distribution Date, to
    the extent that the amount included under clause (iii) above for such
    Distribution Date was less than the amount described in (a) under clause
    (iii) above (each such shortfall, a 'PRINCIPAL ONLY COLLECTION SHORTFALL'),
    an amount equal to the aggregate of the Principal Only Collection
    Shortfalls, less any amounts paid pursuant to this clause (v) on a prior
    Distribution Date, until paid in full; provided that distributions pursuant
    to this clause (v) shall only be made to the extent of Eligible Funds (as
    described below) on any Distribution Date, and

(b) on or after the Credit Support Depletion Date, an amount equal to the
Discount Fraction of the principal portion of scheduled payments and unscheduled
collections received or advanced in respect of Discount Mortgage Loans.

    A 'FINAL DISPOSITION' of a defaulted Mortgage Loan is deemed to have
occurred upon a determination by the Master Servicer that it has received all
Insurance Proceeds, Liquidation Proceeds and other payments or cash recoveries
which the Master Servicer reasonably and in good faith expects to be finally
recoverable with respect to such Mortgage Loan.

    'ELIGIBLE FUNDS' on any Distribution Date means the portion, if any, of the
Available Distribution Amount remaining after reduction by the sum of the Senior
Interest Distribution Amount, the Senior Principal Distribution Amount
(determined without regard to clause (iv) of the definition thereof), the
Principal Only Distribution Amount (determined without regard to clause (v) of
the definition thereof) and the aggregate amount of Accrued Certificate Interest
on the Class M, Class B-1 and Class B-2 Certificates. Notwithstanding anything
herein to the contrary, any distribution in respect of any Principal Only
Collection Shortfall, to the extent not covered by any amounts otherwise
distributable to the Class B-3 Certificates, will result in a reduction

                                      S-31





<PAGE>

of the amount of principal distributions on such Distribution Date on
(i) first, the Class B-1 Certificates and Class B-2 Certificates and
(ii) second, the Class M Certificates, in each case in reverse order of their
payment priority.

    The 'STATED PRINCIPAL BALANCE' of any Mortgage Loan as of any date of
determination is equal to the principal balance thereof as of the Cut-off Date,
after application of all scheduled principal payments due on or before the
Cut-off Date, whether or not received, reduced by all amounts allocable to
principal that have been distributed to Certificateholders with respect to such
Mortgage Loan on or before such date, and as further reduced to the extent that
any Realized Loss thereon has been allocated to one or more classes of
Certificates on or before the date of determination.

    The 'SENIOR PERCENTAGE,' which initially will equal approximately 92.74% and
will in no event exceed 100%, will be recalculated for each Distribution Date to
be the percentage equal to the aggregate Certificate Principal Balance of the
Senior Certificates (other than the Principal Only Certificates) immediately
prior to such Distribution Date divided by the aggregate Stated Principal
Balance of all of the Mortgage Loans (other than the Discount Fraction of the
Discount Mortgage Loans) immediately prior to such Distribution Date. The
'SUBORDINATE PERCENTAGE,' which initially will equal approximately 7.26%, will
be recalculated for each Distribution Date to be the percentage equal to 100%
minus the Senior Percentage as of such date. The initial Senior Percentage is
less than the initial percentage interest in the Trust evidenced by the Senior
Certificates because such percentage is calculated without regard to either the
Certificate Principal Balance of the Principal Only Certificates or the Discount
Fraction of the Stated Principal Balance of each Discount Mortgage Loan.

    The 'SENIOR ACCELERATED DISTRIBUTION PERCENTAGE' for any Distribution Date
occurring prior to the Distribution Date in September 2005 will equal 100%. The
Senior Accelerated Distribution Percentage for any Distribution Date occurring
after the first five years following the Closing Date will be as follows:

        (i) for any Distribution Date during the sixth year after the Closing
    Date, the Senior Percentage for such Distribution Date plus 70% of the
    Subordinate Percentage for such Distribution Date;

        (ii) for any Distribution Date during the seventh year after the Closing
    Date, the Senior Percentage for such Distribution Date plus 60% of the
    Subordinate Percentage for such Distribution Date;

        (iii) for any Distribution Date during the eighth year after the Closing
    Date, the Senior Percentage for such Distribution Date plus 40% of the
    Subordinate Percentage for such Distribution Date;

        (iv) for any Distribution Date during the ninth year after the Closing
    Date, the Senior Percentage for such Distribution Date plus 20% of the
    Subordinate Percentage for such Distribution Date; and

        (v) for any Distribution Date thereafter, the Senior Percentage for such
    Distribution Date;

provided, however, that if on any Distribution Date the Senior Percentage
exceeds the initial Senior Percentage, the Senior Accelerated Distribution
Percentage for such Distribution Date will once again equal 100%.

    Notwithstanding the foregoing, any scheduled reduction to the Senior
Accelerated Distribution Percentage described above shall not be made as of any
Distribution Date unless either

        (a) (i) (X) the outstanding principal balance of the Mortgage Loans
    delinquent 60 days or more averaged over the last six months, as a
    percentage of the aggregate outstanding Certificate Principal Balance of the
    Class M Certificates and Class B Certificates, is less than 50% or (Y) the
    outstanding principal balance of the Mortgage Loans delinquent 60 days or
    more averaged over the last six months, as a percentage of the aggregate
    outstanding principal balance of all Mortgage Loans averaged over the last
    six months, does not exceed 2%, and

        (ii) Realized Losses on the Mortgage Loans to date for such Distribution
    Date, if occurring during the sixth, seventh, eighth, ninth or tenth year
    (or any year thereafter) after the Closing Date, are less than 30%, 35%,
    40%, 45% or 50%, respectively, of the sum of the initial Certificate
    Principal Balances of the Class M Certificates and Class B Certificates (the
    'ORIGINAL SUBORDINATE PRINCIPAL BALANCE');

or

        (b) (i) the outstanding principal balance of the Mortgage Loans
    delinquent 60 days or more averaged over the last six months, as a
    percentage of the aggregate outstanding principal balance of all Mortgage
    Loans averaged over the last six months, does not exceed 4%, and

                                      S-32





<PAGE>

        (ii) Realized Losses on the Mortgage Loans to date for such Distribution
    Date, if occurring during the sixth, seventh, eighth, ninth or tenth year
    (or any year thereafter) after the Closing Date are less than 10%, 15%, 20%,
    25% or 30%, respectively, of the Original Subordinate Principal Balance.

Notwithstanding any of the foregoing, upon reduction of the Certificate
Principal Balances of the Senior Certificates (other than the Principal Only
Certificates), to zero, the Senior Accelerated Distribution Percentage will
equal 0%. See 'Subordination' in the Prospectus.

    The 'LOCKOUT PERCENTAGE' for any Distribution Date occurring prior to the
Distribution Date in September 2005 will be 0%. The Lockout Percentage for any
Distribution Date occurring after the first five years following the Closing
Date will be as follows: for any Distribution Date during the sixth year after
the Closing Date, 30%; for any Distribution Date during the seventh year after
the Closing Date, 40%; for any Distribution Date during the eighth year after
the Closing Date, 60%; for any Distribution Date during the ninth year after the
Closing Date, 80%; and for any Distribution Date thereafter, 100%.

    Distributions of principal on the Senior Certificates on each Distribution
Date will be made (after distribution of the Senior Interest Distribution Amount
(other than the Accrual Distribution Amount) as described under ' -- Interest
Distributions'), as follows:

        (a) Prior to the occurrence of the Credit Support Depletion Date (as
    defined below),

        (i) the Principal Only Distribution Amount shall be distributed to the
    Principal Only Certificates until the Certificate Principal Balance thereof
    has been reduced to zero;

        (ii) the Accrual Distribution Amount shall be distributed to the
    Accretion Directed Certificates, without regard to the amount set forth in
    the table entitled 'Planned Principal Balances and Contingent Class A-2
    Certificate Principal Balance Schedule' for such Distribution Date, until
    the Certificate Principal Balance thereof has been reduced to zero; and

        (iii) the Senior Principal Distribution Amount shall be distributed,
    concurrently, as follows:

           (A) 19.9536118432% of such amount shall be distributed, sequentially,
       to the Class A-9 Certificates and Class A-10 Certificates, in that order,
       in each case until the Certificate Principal Balance thereof has been
       reduced to zero; and

           (B) 80.0463881568% of such amount shall be distributed in the
       following order of priority:

               (1) first, to the Lockout Certificates, the Lockout Percentage of
           the Lockout Certificates' pro rata share (based on the Certificate
           Principal Balance thereof relative to the aggregate Certificate
           Principal Balance of all classes of Senior Certificates (other than
           the Class A-9, Class A-10 and Principal Only Certificates)) of the
           Senior Principal Distribution Amount, until the Certificate Principal
           Balance thereof has been reduced to zero;

               (2) second, sequentially to the Class R-I Certificates and Class
           R-II Certificates, in that order, in each case until the Certificate
           Principal Balance thereof has been reduced to zero;

               (3) third, to the PAC Certificates, until the Certificate
           Principal Balance thereof has been reduced to the Planned Principal
           Balance for such Distribution Date;

               (4) fourth, to the Class A-2 Certificates, until the Certificate
           Principal Balance thereof, after taking into account the allocation
           of the Accrual Distribution Amount, has been reduced to the amount
           set forth in the table entitled 'Planned Principal Balances and
           Contingent Class A-2 Certificate Principal Balance Schedule' for such
           Distribution Date;

               (5) fifth, to the Accrual Companion Certificates, until the
           Certificate Principal Balance thereof has been reduced to zero;

               (6) sixth, to the Class A-2 Certificates (without regard to the
           amount set forth in the table entitled 'Planned Principal Balances
           and Contingent Class A-2 Certificate Principal Balance Schedule' for
           such Distribution Date), until the Certificate Principal Balance
           thereof, after taking into account the allocation of the Accrual
           Distribution Amount and the payment of principal made in accordance
           with clause (4) above, has been reduced to zero;

               (7) seventh, to the PAC Certificates (without regard to the
           Planned Principal Balance for such Distribution Date), until the
           Certificate Principal Balance thereof has been reduced to zero;

                                      S-33





<PAGE>

               (8) eighth, sequentially, to the Class A-3, Class A-6, Class A-7
           and Class A-8 Certificates, in that order, in each case until the
           Certificate Principal Balance thereof has been reduced to zero; and

               (9) ninth, to the Lockout Certificates, until the Certificate
           Principal Balance thereof has been reduced to zero.

        (b) On or after the occurrence of the Credit Support Depletion Date, all
    priorities relating to distributions as described above in respect of
    principal among the various classes of Senior Certificates (other than the
    Principal Only Certificates) will be disregarded, the Senior Principal
    Distribution Amount will be distributed to the remaining Senior Certificates
    (other than the Principal Only Certificates) pro rata in accordance with
    their respective outstanding Certificate Principal Balances, the Senior
    Interest Distribution Amount will be distributed as described under
    ' -- Interest Distributions,' and an amount equal to the Discount Fraction
    of the principal portion of scheduled payments and unscheduled collections
    received or advanced in respect of Discount Mortgage Loans will be
    distributed to the Principal Only Certificates.

        (c) After the reduction of the Certificate Principal Balances of the
    Senior Certificates (other than the Principal Only Certificates) to zero but
    prior to the Credit Support Depletion Date, the Senior Certificates (other
    than the Principal Only Certificates) will be entitled to no further
    distributions of principal thereon and the Available Distribution Amount
    will be paid solely to the holders of the Variable Strip, Principal Only,
    Class M and Class B Certificates, in each case as described herein.

    The 'CREDIT SUPPORT DEPLETION DATE' is the first Distribution Date on which
the Certificate Principal Balances of the Class M Certificates and Class B
Certificates have been reduced to zero.

    The following table sets forth for each Distribution Date the Planned
Principal Balances for the PAC Certificates and the 'Contingent Class A-2
Certificate Principal Balance Schedule' as described above. There is no
assurance that sufficient funds will be available on any Distribution Date to
reduce the Certificate Principal Balances of the PAC Certificates to the Planned
Principal Balance and the Class A-2 Certificates to the amounts set forth in the
table entitled 'Planned Principal Balances and Contingent Class A-2 Certificate
Principal Balance Schedule' for such Distribution Date, or that distributions
thereon will not be made in excess of such amounts for such Distribution Date.

                                      S-34





<PAGE>

   PLANNED PRINCIPAL BALANCES AND CONTINGENT CLASS A-2 CERTIFICATE PRINCIPAL
                                BALANCE SCHEDULE

<TABLE>
<CAPTION>
                                                CLASS A-1                      CONTINGENT CLASS A-2
PAYMENT DATE                            PLANNED PRINCIPAL BALANCES    CERTIFICATE PRINCIPAL BALANCE SCHEDULE
------------                            --------------------------    --------------------------------------
<S>                                     <C>                          <C>
Initial Balance.......................        $92,256,000.00                      $75,000,000.00
September, 2000.......................         91,808,333.00                       74,168,971.77
October, 2000.........................         91,300,612.31                       73,196,120.87
November, 2000........................         90,733,264.54                       72,083,048.24
December, 2000........................         90,106,566.63                       70,831,879.35
January, 2001.........................         89,420,845.75                       69,445,264.08
February, 2001........................         88,677,611.60                       67,929,309.38
March, 2001...........................         87,877,277.73                       66,287,571.54
April, 2001...........................         87,020,306.34                       64,524,107.05
May, 2001.............................         86,107,207.87                       62,643,462.43
June, 2001............................         85,138,540.58                       60,650,661.42
July, 2001............................         84,173,514.27                       58,697,721.88
August, 2001..........................         83,212,113.30                       56,784,027.27
September, 2001.......................         82,254,322.11                       54,908,970.15
October, 2001.........................         81,300,125.21                       53,071,952.02
November, 2001........................         80,349,507.16                       51,272,383.24
December, 2001........................         79,402,452.60                       49,509,682.86
January, 2002.........................         78,458,946.21                       47,783,278.49
February, 2002........................         77,518,972.75                       46,092,606.21
March, 2002...........................         76,582,517.05                       44,437,110.43
April, 2002...........................         75,649,563.99                       42,816,243.77
May, 2002.............................         74,720,098.51                       41,229,466.93
June, 2002............................         73,794,105.63                       39,676,248.58
July, 2002............................         72,871,570.41                       38,156,065.25
August, 2002..........................         71,952,477.99                       36,668,401.22
September, 2002.......................         71,036,813.57                       35,212,748.38
October, 2002.........................         70,124,562.39                       33,788,606.15
November, 2002........................         69,215,709.79                       32,395,481.36
December, 2002........................         68,310,241.13                       31,032,888.14
January, 2003.........................         67,408,141.86                       29,700,347.81
February, 2003........................         66,509,397.48                       28,397,388.79
March, 2003...........................         65,613,993.55                       27,123,546.47
April, 2003...........................         64,721,915.69                       25,878,363.13
May, 2003.............................         63,833,149.59                       24,661,387.86
June, 2003............................         62,947,680.99                       23,472,176.41
July, 2003............................         62,065,495.68                       22,310,291.13
August, 2003..........................         61,186,579.54                       21,175,300.85
September, 2003.......................         60,310,918.47                       20,066,780.82
October, 2003.........................         59,438,498.47                       18,984,312.58
November, 2003........................         58,569,305.56                       17,927,483.90
December, 2003........................         57,703,325.84                       16,895,888.65
January, 2004.........................         56,840,545.48                       15,889,126.77
February, 2004........................         55,980,950.68                       14,906,804.10
March, 2004...........................         55,124,527.72                       13,948,532.39
April, 2004...........................         54,271,262.92                       13,013,929.12
May, 2004.............................         53,421,142.67                       12,102,617.50
June, 2004............................         52,574,153.42                       11,214,226.32
July, 2004............................         51,730,281.67                       10,348,389.92
August, 2004..........................         50,889,513.97                        9,504,748.05
September, 2004.......................         50,051,836.95                        8,682,945.87
</TABLE>

                                                  (table continued on next page)

                                      S-35





<PAGE>

(table continued from previous page)

<TABLE>
<CAPTION>
                                                CLASS A-1                      CONTINGENT CLASS A-2
PAYMENT DATE                            PLANNED PRINCIPAL BALANCES    CERTIFICATE PRINCIPAL BALANCE SCHEDULE
------------                            --------------------------    --------------------------------------
<S>                                     <C>                          <C>
October, 2004.........................        $49,217,237.28                      $ 7,882,633.80
November, 2004........................         48,385,701.68                        7,103,467.48
December, 2004........................         47,557,216.94                        6,345,107.68
January, 2005.........................         46,731,769.90                        5,607,220.25
February, 2005........................         45,909,347.46                        4,889,476.00
March, 2005...........................         45,089,936.58                        4,191,550.66
April, 2005...........................         44,273,524.25                        3,513,124.83
May, 2005.............................         43,460,097.55                        2,853,883.85
June, 2005............................         42,649,643.59                        2,213,517.77
July, 2005............................         41,842,149.56                        1,591,721.29
August, 2005..........................         41,037,602.66                          988,193.66
September, 2005.......................         40,288,284.15                          526,961.89
October, 2005.........................         39,541,832.95                           82,697.04
November, 2005........................         38,798,236.47                                0.00
December, 2005........................         38,057,482.18                                0.00
January, 2006.........................         37,319,557.58                                0.00
February, 2006........................         36,584,450.25                                0.00
March, 2006...........................         35,852,147.81                                0.00
April, 2006...........................         35,122,637.94                                0.00
May, 2006.............................         34,395,908.36                                0.00
June, 2006............................         33,671,946.84                                0.00
July, 2006............................         32,950,741.23                                0.00
August, 2006..........................         32,232,279.40                                0.00
September, 2006.......................         31,533,471.64                                0.00
October, 2006.........................         30,837,331.46                                0.00
November, 2006........................         30,143,846.92                                0.00
December, 2006........................         29,453,006.14                                0.00
January, 2007.........................         28,764,797.30                                0.00
February, 2007........................         28,079,208.61                                0.00
March, 2007...........................         27,396,228.34                                0.00
April, 2007...........................         26,715,844.82                                0.00
May, 2007.............................         26,038,046.41                                0.00
June, 2007............................         25,362,821.54                                0.00
July, 2007............................         24,690,158.68                                0.00
August, 2007..........................         24,020,046.33                                0.00
September, 2007.......................         23,385,291.68                                0.00
October, 2007.........................         22,752,914.76                                0.00
November, 2007........................         22,122,904.46                                0.00
December, 2007........................         21,495,249.75                                0.00
January, 2008.........................         20,869,939.60                                0.00
February, 2008........................         20,246,963.07                                0.00
March, 2008...........................         19,626,309.24                                0.00
April, 2008...........................         19,007,967.24                                0.00
May, 2008.............................         18,391,926.25                                0.00
June, 2008............................         17,778,175.47                                0.00
July, 2008............................         17,166,704.19                                0.00
August, 2008..........................         16,557,501.71                                0.00
September, 2008.......................         15,981,832.64                                0.00
October, 2008.........................         15,408,207.27                                0.00
November, 2008........................         14,836,615.61                                0.00
</TABLE>

                                                  (table continued on next page)

                                      S-36





<PAGE>

(table continued from previous page)

<TABLE>
<CAPTION>
                                                CLASS A-1                      CONTINGENT CLASS A-2
PAYMENT DATE                            PLANNED PRINCIPAL BALANCES    CERTIFICATE PRINCIPAL BALANCE SCHEDULE
------------                            --------------------------    --------------------------------------
<S>                                     <C>                          <C>
December, 2008........................        $14,267,047.73                      $         0.00
January, 2009.........................         13,699,493.73                                0.00
February, 2009........................         13,133,943.76                                0.00
March, 2009...........................         12,570,387.98                                0.00
April, 2009...........................         12,008,816.63                                0.00
May, 2009.............................         11,449,219.95                                0.00
June, 2009............................         10,891,588.23                                0.00
July, 2009............................         10,335,911.82                                0.00
August, 2009..........................          9,782,181.07                                0.00
September, 2009.......................          9,259,856.74                                0.00
October, 2009.........................          8,739,210.81                                0.00
November, 2009........................          8,220,234.74                                0.00
December, 2009........................          7,702,920.05                                0.00
January, 2010.........................          7,187,258.28                                0.00
February, 2010........................          6,673,240.97                                0.00
March, 2010...........................          6,160,859.74                                0.00
April, 2010...........................          5,650,106.20                                0.00
May, 2010.............................          5,140,971.99                                0.00
June, 2010............................          4,633,448.80                                0.00
July, 2010............................          4,127,528.34                                0.00
August, 2010..........................          3,623,202.33                                0.00
September, 2010.......................          3,120,462.54                                0.00
October, 2010.........................          2,619,300.75                                0.00
November, 2010........................          2,119,708.78                                0.00
December, 2010........................          1,621,678.48                                0.00
January, 2011.........................          1,125,201.71                                0.00
February, 2011........................            630,270.36                                0.00
March, 2011...........................            136,876.38                                0.00
April, 2011 and thereafter............                  0.00                                0.00
</TABLE>

    The Planned Principal Balances and the amounts set forth in the Contingent
Class A-2 Certificate Principal Balance Schedule for each Distribution Date set
forth in the table above were calculated based on certain assumptions, including
the assumption that prepayments on the Mortgage Loans occur each month at a
constant level between approximately 30% of the Prepayment Assumption and
approximately 45% of the Prepayment Assumption with respect to the PAC
Certificates and that prepayments on the Mortgage Loans occur at a constant
level of approximately 100% of the Prepayment Assumption with respect to the
Class A-2 Certificates. The performance of the Mortgage Loans may differ from
the assumptions used in determining those amounts. The Planned Principal
Balances and the amounts set forth in the Contingent Class A-2 Certificate
Principal Balance Schedule set forth in the table above are final and binding
regardless of any error or alleged error in making such calculations.

    There can be no assurance that funds available for distributions of
principal in reduction of the Certificate Principal Balances of the PAC
Certificates will be sufficient or will not be in excess of amounts needed to
reduce such Certificate Principal Balances to the Planned Principal Balance for
any Distribution Date. Distributions in reduction of the Certificate Principal
Balance of the PAC Certificates may commence significantly earlier (other than
as to a class for which the above table reflects a distribution on the first
Distribution Date) or later than the first Distribution Date for such class
shown in the table above. Distributions of principal in reduction of the
Certificate Principal Balance of the PAC Certificates may end significantly
earlier or later than the last Distribution Date for such class shown in the
above table. See 'Prepayment and Yield Considerations' herein for a further
discussion of the assumptions used to produce the above table and the effect of
prepayments on the Mortgage Loans on the rate of payments of principal and on
the weighted average lives of such Certificates.

                                      S-37





<PAGE>

    There can be no assurance that funds available for distributions of
principal in reduction of the Certificate Principal Balance of the Class A-2
Certificates will be sufficient or will not be in excess of amounts needed to
reduce such Certificate Principal Balance to the amounts set forth in the table
entitled 'Planned Principal Balances and Contingent Class A-2 Certificate
Principal Balance Schedule' for any Distribution Date. Distributions in
reduction of the Certificate Principal Balance of the Class A-2 Certificates may
commence significantly later than the first Distribution Date for such class
shown in the table above. Distributions of principal in reduction of the
Certificate Principal Balance of the Class A-2 Certificates may end
significantly earlier or later than the last Distribution Date for such class
shown in the above table. See 'Prepayment and Yield Considerations' herein for a
further discussion of the effect of prepayments on the Mortgage Loans on the
rate of payments of principal and on the weighted average lives of such
Certificates.

    The Master Servicer may elect to treat Insurance Proceeds, Liquidation
Proceeds and other unscheduled collections (not including prepayments by the
Mortgagors) received in any calendar month as included in the Available
Distribution Amount for the Mortgage Loans and the Senior Principal Distribution
Amount for the Distribution Date in the month of receipt, but is not obligated
to do so. If the Master Servicer so elects, such amounts will be deemed to have
been received (and any related Realized Loss shall be deemed to have occurred)
on the last day of the month prior to the receipt thereof.

PRINCIPAL DISTRIBUTIONS ON THE RETAIL CERTIFICATES

    General: Beneficial Owners of each class of Retail Certificates have the
right to request that distributions of principal be made with respect to their
Certificates on any Distribution Date on which such class of Certificates is
entitled to receive distributions of principal. As to distributions of principal
among holders of the Retail Certificates of a particular class, Deceased Holders
(as defined below) who request distributions will be entitled to first priority,
and Beneficial Owners of that class of Retail Certificates other than Deceased
Holders (the 'LIVING HOLDERS') who request distributions will be entitled to a
second priority.

    Prospective Beneficial Owners in a class of Retail Certificates should be
aware that distributions of principal on such Certificates may be significantly
earlier or later than the date that may be desired by such Beneficial Owner. All
such requested distributions are subject to the priorities described below under
' -- Priority of Requested Distributions' and are further subject to the
limitation that they be made (i) only in lots equal to integral multiples of
$1,000 of initial Certificate Principal Balance (each $1,000 initial Certificate
Principal Balance, an 'INDIVIDUAL RETAIL CERTIFICATE') and (ii) only to the
extent that the portion of the Senior Principal Distribution Amount allocated to
the related class of Retail Certificates on the applicable Distribution Date
(plus any amounts available from the related Rounding Account) provides
sufficient funds for such requested distributions. To the extent that amounts
available for distributions in respect of principal on a class of Retail
Certificates on any Distribution Date exceed the aggregate amount of the
requests made by Deceased Holders and Living Holders for principal distributions
applicable to such Distribution Date, such excess amounts will be distributed to
the Beneficial Owners of that class of Retail Certificates by random lot, as
described below under ' -- Mandatory Distributions of Principal on the Retail
Certificates.'

    On each Distribution Date on which amounts are available for distributions
in reduction of the Certificate Principal Balances of any class of Retail
Certificates, the aggregate amount allocable to such distributions for such
class will be rounded upward, as necessary, to an amount equal to an integral
multiple of $1,000, except as provided below, in accordance with the limitations
set forth herein. Such rounding will be accomplished on the first Distribution
Date on which distributions of principal on a class of Retail Certificates are
made by withdrawing, from a non-interest bearing account to be established on
the Closing Date for such class of Retail Certificates with a $999.99 deposit by
the Underwriter (each such account, a 'ROUNDING ACCOUNT'), the amount of funds,
if any, needed to round the amount otherwise available for such distribution
with respect to such class of Retail Certificates upward to the next higher
integral multiple of $1,000. On each succeeding Distribution Date on which
distributions of principal on the Retail Certificates are to be made, the
aggregate amount allocable to the Retail Certificates will be applied first to
repay any funds withdrawn from the related Rounding Account on the prior
Distribution Date, and then the remainder of such allocable amount, if any, will
be similarly rounded upward through another withdrawal from the related Rounding
Account and distributed in reduction of the respective Certificate Principal
Balance of the Retail Certificates. This process will continue on succeeding
Distribution Dates until the respective Certificate Principal Balance of such
class of Retail Certificates has been reduced to zero. Thus, the aggregate
distribution made in reduction of the Certificate

                                      S-38





<PAGE>

Principal Balance of any class of Retail Certificates on each Distribution Date
may be slightly more or less than would be the case in the absence of such
rounding procedures, but such difference will be no more than $999.99 on any
Distribution Date. Under no circumstances will the sum of all distributions made
in reduction of the Certificate Principal Balance of any class of Retail
Certificates, through any Distribution Date, be less than the sum of such
distributions that would have resulted in the absence of such rounding
procedures. The Class R-I Certificates will be entitled to any amount remaining
in any Rounding Account after the Certificate Principal Balance of the related
class of Retail Certificates has been reduced to zero.

    Notwithstanding any provisions herein to the contrary, on each Distribution
Date following the first Distribution Date on which any Realized Losses are
allocated to the Retail Certificates, distribution in reduction of the
Certificate Principal Balance of a class of Retail Certificates will be made pro
rata among the holders of that class of Retail Certificates in accordance with
their respective outstanding Certificate Principal Balances and will not be made
in integral multiples of $1,000 or pursuant to requested distributions or
mandatory distributions by random lot.

    There is no assurance that a Beneficial Owner of a Retail Certificate who
has submitted a request for such distribution will receive such distribution at
any particular time after such distribution is requested, since there can be no
assurance that funds will be available for making such distributions on any
particular Distribution Date, or, even if funds are available for making
principal distributions on the Retail Certificates, that such distributions will
be made to any particular Beneficial Owner whether such Beneficial Owner is a
Deceased Holder or a Living Holder. Also, due to the procedure for mandatory
distributions described below under ' -- Mandatory Distributions of Principal on
the Retail Certificates,' there can be no assurance that on any Distribution
Date on which the funds available for distribution in respect of principal of
the Retail Certificates exceed the aggregate amount of distributions requested
by Beneficial Owners of Certificates of such class, any particular Beneficial
Owner will receive a principal distribution from such excess funds. THUS, THE
TIMING OF DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE WITH
RESPECT TO ANY PARTICULAR RETAIL CERTIFICATE, WHETHER OR NOT THE SUBJECT OF A
REQUEST FOR DISTRIBUTION BY A DECEASED HOLDER OR A LIVING HOLDER, IS HIGHLY
UNCERTAIN AND MAY BE MADE EARLIER OR LATER THAN THE DATE THAT MAY BE DESIRED BY
A BENEFICIAL OWNER OF SUCH CERTIFICATE.

    Priority of Requested Distributions: Subject to the limitations described
herein, including the timing and the order of the receipt of the request for
distributions as described below under ' -- Procedure for Requested
Distributions,' Beneficial Owners of the Retail Certificates have the right to
request that distributions be made in reduction of the Certificate Principal
Balance of such Certificates. On each Distribution Date on which distributions
in reduction of the Certificate Principal Balance of any class of Retail
Certificates are made, such distributions will be made in the following order of
priority among Beneficial Owners of such class: (i) any request by a Deceased
Holder, in an amount up to but not exceeding $100,000 per request; and (ii) any
request by a Living Holder, in an amount up to but not exceeding $10,000 per
request. Thereafter, distributions will be made as provided in clauses (i) and
(ii) above up to a second $100,000 and $10,000, respectively. This sequence of
priorities will be repeated for each request for principal distributions made by
the Beneficial Owners of that class of Retail Certificates until all such
requests have been honored.

    Procedure for Requested Distributions: Under the current procedures of DTC,
a Beneficial Owner may request that distributions in reduction of the
Certificate Principal Balance of its Retail Certificates be made on a
Distribution Date by delivering a written request therefor to the Participant or
Indirect Participant that maintains the Beneficial Owner's account with respect
to that class of Retail Certificates so that such request is received by the
Trustee from DTC on DTC's 'participant terminal system' on or before the Record
Date for such Distribution Date. In the case of a request on behalf of a
Deceased Holder, appropriate evidence of death and any tax waivers are required
to be forwarded to the Participant under separate cover. Furthermore, such
requests of Deceased Holders that are incomplete may not be honored by the
Participant. The Participant shall forward a certification satisfactory to the
Trustee certifying the death of the Beneficial Owner and the receipt of the
appropriate death and tax waivers. The Participant should in turn make the
request of DTC (or, in the case of an Indirect Participant, such firm must
notify the related Participant of such request, which Participant should make
the request of DTC) on DTC's participant terminal system. The Trustee will not
accept a request from a Person other than DTC. DTC may establish such procedures
as it deems fair and equitable to establish the order of receipt of requests for
such distributions received by it on the same day. None of the Master Servicer,
the Depositor or the Trustee shall be liable for any delay by DTC, any
Participant or any Indirect Participant in the delivery of requests for
distributions or withdrawals of such requests to the Trustee or for any changes
made to

                                      S-39





<PAGE>

the procedures described herein by DTC, any Participant or any Indirect
Participant. Requests for distributions are to be honored in the order of their
receipt (subject to the priorities described above). The exact procedures to be
followed by the Trustee for purposes of determining the order of receipt of such
requests will be those established from time to time by DTC. Requests for
distributions of principal received by DTC and forwarded to the Trustee on DTC's
participant terminal system after the Record Date for such Distribution Date and
requests for principal distributions received in a timely manner but not
accepted with respect to a given Distribution Date, will be treated as requests
for distributions on the next succeeding Distribution Date and each succeeding
Distribution Date thereafter until each request is accepted or is withdrawn as
described below. Each request for distributions in reduction of the Certificate
Principal Balance of a Retail Certificate submitted by a Beneficial Owner
thereof will be held on DTC's participant terminal system until such request has
been accepted by the Trustee or has been withdrawn by the Participant in
writing. Each Individual Retail Certificate covered by such request will
continue to bear interest at the related Pass-Through Rate through the Interest
Accrual Period related to such Distribution Date.

    A 'DECEASED HOLDER' is a Beneficial Owner of a Retail Certificate who was a
natural person living at the time such holder's interest was acquired and whose
executor or other authorized representative causes to be furnished to the
Participant, evidence of death satisfactory to the Participant, and any tax
waivers requested by the Participant. The Participant shall forward
certification satisfactory to the Trustee certifying the death of the Beneficial
Owner and the receipt of the appropriate death and tax waivers. Retail
Certificates beneficially owned by tenants by the entirety, joint tenants or
tenants in common will be considered to be beneficially owned by a single owner.
The death of a tenant by the entirety, joint tenant or tenant in common will be
deemed to be the death of the Beneficial Owner, and the Retail Certificates so
beneficially owned will be eligible to request priority with respect to
distributions in reduction of the Certificate Principal Balance thereof, subject
to the limitations stated herein. The Retail Certificates beneficially owned by
a trust will be considered to be beneficially owned by each beneficiary of the
trust to the extent of such beneficiary's beneficial interest therein, but in no
event will a trust's beneficiaries collectively be deemed to be Beneficial
Owners of a number of Individual Retail Certificates greater than the number of
Individual Retail Certificates of a particular class of Retail Certificates of
which such trust is the owner. The death of a beneficiary of a trust will be
deemed to be the death of a Beneficial Owner of the Retail Certificates
beneficially owned by the trust but only to the extent of such beneficiary's
beneficial interest in such trust. The death of an individual who was a tenant
by the entirety, joint tenant or tenant in common in a tenancy which is the
beneficiary of a trust will be deemed to be the death of the beneficiary of the
trust. The death of a person who, during his or her lifetime, was entitled to
substantially all of the beneficial ownership interests in Retail Certificates
will be deemed to be the death of the Beneficial Owner of such Certificates
regardless of the registration of ownership, if such beneficial interest can be
established to the satisfaction of the Participant. Such beneficial interest
will be deemed to exist in typical cases of street name or nominee ownership,
ownership by a trustee, ownership under the Uniform Gift to Minors Act and
community property or other joint ownership arrangements between a husband and
wife. Beneficial interest shall include the power to sell, transfer or otherwise
dispose of a Retail Certificate and the right to receive the proceeds therefrom,
as well as interest and distributions of principal with respect thereto. As used
in this Prospectus Supplement, a request for a distribution in reduction of the
Certificate Principal Balance of a Retail Certificate by a Deceased Holder shall
mean a request by the personal representative, surviving tenant by the entirety,
surviving joint tenant or a surviving tenant in common of the Deceased Holder.

    With respect to Retail Certificates as to which Beneficial Owners have
requested distributions to be made on a particular Distribution Date and on
which distributions of principal are being made, the Trustee will notify DTC
prior to such Distribution Date whether, and the extent to which, such
Certificates have been accepted for distributions. Participants and Indirect
Participants holding Retail Certificates are required to forward such notices to
the Beneficial Owners of such Certificates. Individual Retail Certificates that
have been accepted for a distribution will be due and payable on the applicable
Distribution Date and will cease to bear interest after the Interest Accrual
Period related to such Distribution Date.

    Any Beneficial Owner of a Retail Certificate who has requested a
distribution may withdraw its request by so notifying in writing the Participant
or Indirect Participant that maintains such Beneficial Owner's account. In the
event that such account is maintained by an Indirect Participant, such Indirect
Participant must notify the related Participant which in turn must forward the
withdrawal of such request, on DTC's participant terminal system. If such notice
of withdrawal of a request for distribution has not been received on DTC's
participant terminal system on or before the Record Date for such Distribution
Date, the previously made request for

                                      S-40





<PAGE>

distribution will be irrevocable with respect to the making of distributions in
reduction of the Certificate Principal Balance of such Retail Certificate on the
applicable Distribution Date.

    Mandatory Distributions of Principal on the Retail Certificates: To the
extent, if any, that distributions in reduction of the Certificate Principal
Balance of a class of Retail Certificates on a Distribution Date exceed the
outstanding Certificate Principal Balance of that class of Retail Certificates
with respect to which distribution requests have been received by the applicable
Record Date, additional Retail Certificates in lots equal to Individual Retail
Certificates for that class will be selected to receive principal distributions
in accordance with the then-applicable established random lot procedures of DTC,
and the then-applicable established procedures of the Participants and Indirect
Participants, which may or may not be by random lot. No prior notice will be
provided by the Depositor, the Master Servicer or the Trustee to the Beneficial
Owners of the Retail Certificates for such distributions made by random lot.
Investors may ask such Participants or Indirect Participants what allocation
procedures they use. Participants and Indirect Participants holding Retail
Certificates selected for mandatory distributions of principal are required to
provide notice of such mandatory distributions to the affected Beneficial
Owners.

PRINCIPAL DISTRIBUTIONS ON THE CLASS M CERTIFICATES

    Holders of each class of Class M Certificates will be entitled to receive on
each Distribution Date, to the extent of the Available Distribution Amount
remaining after (a) the sum of the Senior Interest Distribution Amount, the
Principal Only Distribution Amount and the Senior Principal Distribution Amount
is distributed to holders of the Senior Certificates, (b) reimbursement is made
to the Master Servicer for certain Advances remaining unreimbursed following the
final liquidation of the related Mortgage Loan to the extent described below
under ' -- Advances,' (c) the aggregate amount of Accrued Certificate Interest
and principal required to be distributed to any class of Class M Certificates
having a higher payment priority on such Distribution Date is distributed to
holders of such class of Class M Certificates and (d) the aggregate amount of
Accrued Certificate Interest required to be distributed to such class of
Class M Certificates on such Distribution Date is distributed to such Class M
Certificates, a distribution allocable to principal in the sum of the following:

        (i) the product of (A) the then applicable related Class M Percentage
    (as defined below) and (B) the aggregate of the following amounts:

           (1) the principal portion of all scheduled monthly payments on the
       Mortgage Loans (other than the related Discount Fraction of the principal
       portion of such payments with respect to a Discount Mortgage Loan) due
       during the related Due Period, whether or not received on or prior to the
       related Determination Date, less the principal portion of Debt Service
       Reductions (other than the related Discount Fraction of the principal
       portion of such Debt Service Reductions with respect to a Discount
       Mortgage Loan) which together with other Bankruptcy Losses are in excess
       of the Bankruptcy Amount;

           (2) the principal portion of all proceeds of the repurchase of a
       Mortgage Loan (other than the related Discount Fraction of the principal
       portion of such proceeds with respect to a Discount Mortgage Loan) (or,
       in the case of a substitution, certain amounts representing a principal
       adjustment) as required by the Pooling and Servicing Agreement during the
       preceding calendar month; and

           (3) the principal portion of all other unscheduled collections
       received during the preceding calendar month (other than full and partial
       Mortgagor prepayments and any amounts received in connection with a Final
       Disposition of a Mortgage Loan described in clause (ii) below), to the
       extent applied as recoveries of principal (other than the related
       Discount Fraction of the principal amount of such unscheduled
       collections, with respect to a Discount Mortgage Loan);

        (ii) such class's pro rata share, based on the Certificate Principal
    Balance of each class of Class M Certificates and Class B Certificates then
    outstanding, of all amounts received in connection with the Final
    Disposition of a Mortgage Loan (other than the related Discount Fraction of
    such amounts with respect to a Discount Mortgage Loan) (x) that occurred
    during the preceding calendar month and (y) that did not result in any
    Excess Special Hazard Losses, Excess Fraud Losses, Excess Bankruptcy Losses
    or Extraordinary Losses, to the extent applied as recoveries of principal
    and to the extent not otherwise payable to the Senior Certificates;

                                      S-41





<PAGE>

        (iii) the portion of full and partial Mortgagor prepayments (other than
    the Discount Fraction of such Mortgagor prepayments with respect to a
    Discount Mortgage Loan) made by the respective Mortgagors during the
    preceding calendar month allocable to such class of Class M Certificates as
    described below;

        (iv) if such class is the most senior class of Certificates then
    outstanding, an amount equal to the Excess Subordinate Principal Amount, if
    any; and

        (v) any amounts allocable to principal for any previous Distribution
    Date (calculated pursuant to clauses (i) through (iii) above) that remain
    undistributed to the extent that any such amounts are not attributable to
    Realized Losses which were allocated to any class of Class M Certificates
    with a lower payment priority or the Class B Certificates.

    References herein to 'payment priority' of the Class M Certificates refer to
a payment priority among such classes as follows: first, to the Class M-1
Certificates; second, to the Class M-2 Certificates; and third, to the
Class M-3 Certificates.

    As to each class of Class M Certificates, on any Distribution Date, any
Accrued Certificate Interest thereon remaining unpaid from any previous
Distribution Date will be distributable to the extent of available funds.
Notwithstanding the foregoing, if the Certificate Principal Balances of the
Class B Certificates have been reduced to zero, on any Distribution Date, with
respect to the class of Class M Certificates outstanding on such Distribution
Date with the lowest payment priority, Accrued Certificate Interest thereon
remaining unpaid from any previous Distribution Date (except in the limited
circumstances provided in the Pooling and Servicing Agreement) will not be
distributable.

    All Mortgagor prepayments not otherwise distributable to the Senior
Certificates will be allocated on a pro rata basis among the class of Class M
Certificates with the highest payment priority then outstanding and each other
class of Class M Certificates and Class B Certificates for which certain loss
levels established for such class in the Pooling and Servicing Agreement have
not been exceeded. The related loss level on any Distribution Date would not be
exceeded as to any Class M-2, Class M-3 or Class B Certificates, respectively,
only if the sum of the current percentage interests in the Mortgage Pool
evidenced by such class and each class, if any, subordinate thereto were at
least equal to the sum of the initial percentage interests in the Mortgage Pool
evidenced by such class and each class, if any, subordinate thereto.

    The Class M-1, Class M-2 and Class M-3 Percentages (each, a 'CLASS M
PERCENTAGE'), which initially will equal approximately 3.45%, 1.25% and 1.15%,
respectively, and will in no event exceed 100%, will each be adjusted for each
Distribution Date to be the percentage equal to the Certificate Principal
Balance of the related class of Class M Certificates immediately prior to such
Distribution Date divided by the aggregate Stated Principal Balance of all of
the Mortgage Loans (other than the related Discount Fraction of each Discount
Mortgage Loan) immediately prior to such Distribution Date. The initial
Class M-1, Class M-2 and Class M-3 Percentages are greater than the initial
percentage interests in the Trust evidenced by the Class M-1, Class M-2 and
Class M-3 Certificates, respectively, because the Class M-1, Class M-2 and
Class M-3 Percentages are calculated without regard to the Discount Fraction of
the Stated Principal Balance of each Discount Mortgage Loan.

    As stated above under ' -- Principal Distributions on the Senior
Certificates,' the Senior Accelerated Distribution Percentage will be 100%
during the first five years after the Closing Date (unless the Certificate
Principal Balances of the Senior Certificates (other than the Principal Only
Certificates) are reduced to zero before the end of such period), and will
thereafter equal 100% whenever the Senior Percentage exceeds the initial Senior
Percentage. Furthermore, as set forth herein, the Senior Accelerated
Distribution Percentage will exceed the Senior Percentage during the sixth
through ninth years following the Closing Date, and scheduled reductions to the
Senior Accelerated Distribution Percentage are subject to postponement based on
the loss and delinquency experience of the Mortgage Loans. Accordingly, each
class of the Class M Certificates will not be entitled to any Mortgagor
prepayments for at least the first five years after the Closing Date (unless the
Certificate Principal Balances of the Senior Certificates (other than the
Principal Only Certificates) have been reduced to zero before the end of such
period), and may receive no Mortgagor prepayments or a disproportionately small
portion of Mortgagor prepayments relative to the related Class M Percentage
during certain periods thereafter. See ' -- Principal Distributions on the
Senior Certificates' herein.

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<PAGE>

ALLOCATION OF LOSSES; SUBORDINATION

    The Subordination provided to the Senior Certificates by the Class B
Certificates and Class M Certificates and the Subordination provided to each
class of Class M Certificates by the Class B Certificates and by any class of
Class M Certificates subordinate thereto will cover Realized Losses on the
Mortgage Loans that are Defaulted Mortgage Losses, Fraud Losses, Bankruptcy
Losses and Special Hazard Losses (as defined herein). Any such Realized Losses
that are not Excess Special Hazard Losses, Excess Fraud Losses, Excess
Bankruptcy Losses or Extraordinary Losses will be allocated as follows: first,
to the Class B Certificates; second, to the Class M-3 Certificates; third, to
the Class M-2 Certificates; and fourth, to the Class M-1 Certificates, in each
case until the Certificate Principal Balance of such class of Certificates has
been reduced to zero; and thereafter, if any such Realized Loss is on a Discount
Mortgage Loan, to the Principal Only Certificates in an amount equal to the
related Discount Fraction of the principal portion of such Realized Loss, and
the remainder of such Realized Losses on the Discount Mortgage Loans and the
entire amount of such Realized Losses on Non-Discount Mortgage Loans will be
allocated among all the remaining classes of Senior Certificates (other than the
Principal Only Certificates) on a pro rata basis. An allocation of a Realized
Loss on a 'pro rata basis' among two or more classes of Certificates means an
allocation to each such class of Certificates (i) on the basis of its then
outstanding Certificate Principal Balance prior to giving effect to
distributions to be made on such Distribution Date in the case of an allocation
of the principal portion of a Realized Loss, or (ii) based on the Accrued
Certificate Interest thereon in respect of such Distribution Date in the case of
an allocation of the interest portion of a Realized Loss; provided that, in
determining the Certificate Principal Balance of the Accrual Companion
Certificates for the purpose of allocating any portion of a Realized Loss
thereto, the Certificate Principal Balance of such Certificates shall be deemed
to be the lesser of (i) the original Certificate Principal Balance of such
Certificates and (ii) the Certificate Principal Balance of such Certificates
prior to giving effect to distributions to be made on such Distribution Date.

    Any allocation of a Realized Loss (other than a Debt Service Reduction) to a
Certificate will be made by reducing the Certificate Principal Balance thereof,
in the case of the principal portion of such Realized Loss, in each case until
the Certificate Principal Balance of such class has been reduced to zero, and
the Accrued Certificate Interest thereon, in the case of the interest portion of
such Realized Loss, by the amount so allocated as of the Distribution Date
occurring in the month following the calendar month in which such Realized Loss
was incurred. In addition, any such allocation of a Realized Loss to a Class M
Certificate may also be made by operation of the payment priority to the Senior
Certificates set forth under ' -- Principal Distributions on the Senior
Certificates' and any class of Class M Certificates with a higher payment
priority. As used herein, 'SUBORDINATION' refers to the provisions discussed
above for the sequential allocation of Realized Losses among the various
classes, as well as all provisions effecting such allocations including the
priorities for distribution of cash flows in the amounts described herein.

    As described in the Prospectus, under certain circumstances the Master
Servicer may permit the modification of a defaulted Mortgage Loan to reduce the
applicable Mortgage Rate or to reduce the outstanding principal amount thereof
(a 'SERVICING MODIFICATION'). Any such principal reduction shall constitute a
Realized Loss at the time of such reduction, and the amount by which each
Monthly Payment is reduced by any such Mortgage Rate reduction shall constitute
a Realized Loss in the month in which each such reduced Monthly Payment is due.
Servicing Modification reductions shall be allocated when incurred (as provided
above) in the same manner as other Realized Losses as described herein. Any
Advances made on any Mortgage Loan will be reduced to reflect any related
Servicing Modifications previously made. No Servicing Modification will have the
effect of reducing the Mortgage Rate below the sum of the Servicing Fee Rate and
the excess of the Net Mortgage Rate on such Mortgage Loan over 8.00% per annum.
As used herein, the Mortgage Rate and Net Mortgage Rate as to any Mortgage Loan
will not be reduced by any Servicing Modification.

    Allocations of the principal portion of Debt Service Reductions to each
class of Class M Certificates and Class B Certificates will result from the
priority of distributions of the Available Distribution Amount as described
herein, which distributions shall be made first to the Senior Certificates,
second to the Class M Certificates in the order of their payment priority and
third to the Class B Certificates.

    An allocation of the interest portion of a Realized Loss as well as the
principal portion of Debt Service Reductions will not reduce the level of
Subordination, as such term is defined herein, until an amount in respect
thereof has been actually disbursed to the Senior Certificateholders or the
Class M Certificateholders, as applicable. The holders of the Offered
Certificates will not be entitled to any additional payments with respect to

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<PAGE>

Realized Losses from amounts otherwise distributable on any classes of
Certificates subordinate thereto (except in limited circumstances in respect of
any Excess Subordinate Principal Amount, or in the case of Principal Only
Collection Shortfalls, to the extent of Eligible Funds). Accordingly, the
Subordination provided to the Senior Certificates (other than the Principal Only
Certificates) and to each class of Class M Certificates by the respective
classes of Certificates subordinate thereto with respect to Realized Losses
allocated on any Distribution Date will be effected primarily by increasing the
Senior Percentage, or the respective Class M Percentage, of future distributions
of principal of the remaining Mortgage Loans. Because the Discount Fraction of
each Discount Mortgage Loan will not change over time, the protection from
losses provided to the Principal Only Certificates by the Class M Certificates
and Class B Certificates is limited to the prior right of the Principal Only
Certificates to receive distributions in respect of principal as described
herein. Furthermore, principal losses on the Mortgage Loans that are not covered
by Subordination will be allocated to the Principal Only Certificates only to
the extent they occur on a Discount Mortgage Loan and only to the extent of the
related Discount Fraction of such losses. Such allocation of principal losses on
the Discount Mortgage Loans may result in such losses being allocated in an
amount that is greater or less than would have been the case had such losses
been allocated in proportion to the Certificate Principal Balance of the
Principal Only Certificates. Thus, the Senior Certificates (other than the
Principal Only Certificates) will bear the entire amount of losses that are not
allocated to the Class M Certificates and Class B Certificates (other than the
amount allocable to the Principal Only Certificates), which losses will be
allocated among all classes of Senior Certificates (other than the Principal
Only Certificates) as described herein.

    Because the Principal Only Certificates are entitled to receive in
connection with the Final Disposition of a Discount Mortgage Loan, on any
Distribution Date, an amount equal to all unpaid Principal Only Collection
Shortfalls to the extent of Eligible Funds on such Distribution Date, shortfalls
in distributions of principal on any class of Class M Certificates could occur
under certain circumstances, even if such class is not the most subordinate
class of Certificates then outstanding.

    Any Excess Special Hazard Losses, Excess Fraud Losses, Excess Bankruptcy
Losses, Extraordinary Losses or other losses of a type not covered by
Subordination on the Mortgage Loans will be allocated to the Principal Only
Certificates in an amount equal to the Discount Fraction of the principal
portion of any such loss on a Discount Mortgage Loan, and the remainder of such
losses will be allocated on a pro rata basis among the Senior Certificates
(other than the Principal Only Certificates), Class M Certificates and Class B
Certificates.

    With respect to any defaulted Mortgage Loan that is finally liquidated,
through foreclosure sale, disposition of the related Mortgaged Property if
acquired on behalf of the Certificateholders by deed in lieu of foreclosure, or
otherwise, the amount of loss realized, if any, will equal the portion of the
Stated Principal Balance remaining, if any, plus interest thereon through the
last day of the month in which such Mortgage Loan was finally liquidated, after
application of all amounts recovered (net of amounts reimbursable to the Master
Servicer or the related Subservicer for Advances and expenses, including
attorneys' fees) towards interest and principal owing on the Mortgage Loan. Such
amount of loss realized and any Special Hazard Losses, Fraud Losses and
Bankruptcy Losses are referred to herein as 'REALIZED LOSSES.'

    In order to maximize the likelihood of distribution in full of the Senior
Interest Distribution Amount, Principal Only Distribution Amount and Senior
Principal Distribution Amount, on each Distribution Date, holders of Senior
Certificates have a right to distributions of the Available Distribution Amount
that is prior to the rights of the holders of the Class M Certificates and
Class B Certificates, to the extent necessary to satisfy the Senior Interest
Distribution Amount, Principal Only Distribution Amount and Senior Principal
Distribution Amount. Similarly, holders of the Class M Certificates have a right
to distributions of the Available Distribution Amount prior to the rights of
holders of the Class B Certificates, and holders of any class of Class M
Certificates with a higher payment priority have a right to distributions of the
Available Distribution Amount prior to the rights of holders of any class of
Class M Certificates with a lower payment priority.

    The application of the Senior Accelerated Distribution Percentage (when it
exceeds the Senior Percentage) to determine the Senior Principal Distribution
Amount will accelerate the amortization of the Senior Certificates (other than
the Principal Only Certificates), in the aggregate, relative to the actual
amortization of the Mortgage Loans. The Principal Only Certificates will not
receive more than the Discount Fraction of any unscheduled payment relating to a
Discount Mortgage Loan. To the extent that the Senior Certificates (other than
the Principal Only Certificates) are amortized faster than the Mortgage Loans,
in the absence of offsetting Realized Losses allocated to the Class M
Certificates and Class B Certificates, the percentage interest evidenced by such

                                      S-44





<PAGE>

Senior Certificates in the Trust will be decreased (with a corresponding
increase in the interest in the Trust evidenced by the Class M Certificates and
Class B Certificates), thereby increasing, relative to their respective
Certificate Principal Balances, the Subordination afforded the Senior
Certificates by the Class M Certificates and Class B Certificates collectively.
In addition, if losses on the Mortgage Loans exceed the amounts described above
under ' -- Principal Distributions on the Senior Certificates,' a greater
percentage of full and partial Mortgagor prepayments will be allocated to the
Senior Certificates (other than the Principal Only Certificates) than would
otherwise be the case, thereby accelerating the amortization of such Senior
Certificates relative to the Class M Certificates and Class B Certificates.

    The priority of payments (including Mortgagor prepayments) among the Class M
Certificates, as described herein, also has the effect during certain periods,
in the absence of losses, of decreasing the percentage interest evidenced by any
class of Class M Certificates with a higher payment priority, thereby
increasing, relative to its Certificate Principal Balance, the Subordination
afforded to such class of the Class M Certificates by the Class B Certificates
and any class of Class M Certificates with a lower payment priority.

    The aggregate amount of Realized Losses that may be allocated in connection
with Special Hazard Losses (the 'SPECIAL HAZARD AMOUNT') through Subordination
shall initially be equal to $2,704,081. As of any date of determination
following the Cut-off Date, the Special Hazard Amount shall equal $2,704,081
less the sum of (A) any amounts allocated through Subordination in respect of
Special Hazard Losses and (B) the Adjustment Amount. The 'ADJUSTMENT AMOUNT'
will be equal to an amount calculated pursuant to the terms of the Pooling and
Servicing Agreement. As used in this Prospectus Supplement, 'SPECIAL HAZARD
LOSSES' has the same meaning set forth in the Prospectus, except that Special
Hazard Losses will not include and the Subordination will not cover
Extraordinary Losses, and Special Hazard Losses will not exceed the lesser of
the cost of repair or replacement of the related Mortgaged Properties.

    The aggregate amount of Realized Losses which may be allocated in connection
with Fraud Losses (the 'FRAUD LOSS AMOUNT') through Subordination shall
initially be equal to $5,408,162. As of any date of determination after the
Cut-off Date, the Fraud Loss Amount shall equal (X) prior to the first
anniversary of the Cut-off Date an amount equal to 2.00% of the aggregate
principal balance of all of the Mortgage Loans as of the Cut-off Date minus the
aggregate amounts allocated through Subordination with respect to Fraud Losses
up to such date of determination, and (Y) from the first to the fifth
anniversary of the Cut-off Date, an amount equal to (1) the lesser of (a) the
Fraud Loss Amount as of the most recent anniversary of the Cut-off Date and
(b) 1.00% of the aggregate principal balance of all of the Mortgage Loans as of
the most recent anniversary of the Cut-off Date minus (2) the aggregate amounts
allocated through Subordination with respect to Fraud Losses since the most
recent anniversary of the Cut-off Date up to such date of determination. On and
after the fifth anniversary of the Cut-off Date, the Fraud Loss Amount shall be
zero and Fraud Losses shall not be allocated through Subordination.

    The aggregate amount of Realized Losses which may be allocated in connection
with Bankruptcy Losses (the 'BANKRUPTCY AMOUNT') through Subordination will
initially be equal to $160,000. As of any date of determination prior to the
first anniversary of the Cut-off Date, the Bankruptcy Amount will equal $160,000
less the sum of any amounts allocated through Subordination for such losses up
to such date of determination. As of any date of determination on or after the
first anniversary of the Cut-off Date, the Bankruptcy Amount will equal the
excess, if any, of (1) the lesser of (a) the Bankruptcy Amount as of the
business day next preceding the most recent anniversary of the Cut-off Date and
(b) an amount calculated pursuant to the terms of the Pooling and Servicing
Agreement, which amount as calculated will provide for a reduction in the
Bankruptcy Amount, over (2) the aggregate amount of Bankruptcy Losses allocated
solely to the Class M Certificates or Class B Certificates through Subordination
since such anniversary.

    Notwithstanding the foregoing, the provisions relating to Subordination will
not be applicable in connection with a Bankruptcy Loss so long as the Master
Servicer has notified the Trustee in writing that the Master Servicer is
diligently pursuing any remedies that may exist in connection with the
representations and warranties made regarding the related Mortgage Loan and
either (A) the related Mortgage Loan is not in default with regard to payments
due thereunder or (B) delinquent payments of principal and interest under the
related Mortgage Loan and any premiums on any applicable Primary Hazard
Insurance Policy and any related escrow payments in respect of such Mortgage
Loan are being advanced on a current basis by the Master Servicer or a
Subservicer.

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<PAGE>

    The Special Hazard Amount, Fraud Loss Amount and Bankruptcy Amount are
subject to further reduction as described in the Prospectus under
'Subordination.'

ADVANCES

    Prior to each Distribution Date, the Master Servicer is required to make
Advances which were due on the Mortgage Loans on the immediately preceding Due
Date and delinquent on the business day next preceding the related Determination
Date.

    Such Advances are required to be made only to the extent they are deemed by
the Master Servicer to be recoverable from related late collections, Insurance
Proceeds, Liquidation Proceeds or amounts otherwise payable to the holders of
the Class B Certificates or Class M Certificates. The purpose of making such
Advances is to maintain a regular cash flow to the Certificateholders, rather
than to guarantee or insure against losses. The Master Servicer will not be
required to make any Advances with respect to reductions in the amount of the
monthly payments on the Mortgage Loans due to Debt Service Reductions or the
application of the Relief Act or similar legislation or regulations. Any failure
by the Master Servicer to make an Advance as required under the Pooling and
Servicing Agreement will constitute an Event of Default thereunder, in which
case the Trustee, as successor Master Servicer, will be obligated to make any
such Advance, in accordance with the terms of the Pooling and Servicing
Agreement.

    All Advances will be reimbursable to the Master Servicer on a first priority
basis from either (a) late collections, Insurance Proceeds and Liquidation
Proceeds from the Mortgage Loan as to which such unreimbursed Advance was made
or (b) as to any Advance that remains unreimbursed in whole or in part following
the final liquidation of the related Mortgage Loan, from any amounts otherwise
distributable on any of the Class B Certificates or Class M Certificates;
provided, however, that any such Advances that were made with respect to
delinquencies which ultimately were determined to be Excess Special Hazard
Losses, Excess Fraud Losses, Excess Bankruptcy Losses or Extraordinary Losses
are reimbursable to the Master Servicer out of any funds in the Custodial
Account prior to distributions on any of the Certificates and the amount of such
losses will be allocated as described herein. In addition, if the Certificate
Principal Balances of the Class M Certificates and Class B Certificates have
been reduced to zero, any Advances previously made which are deemed by the
Master Servicer to be nonrecoverable from related late collections, Insurance
Proceeds and Liquidation Proceeds may be reimbursed to the Master Servicer out
of any funds in the Custodial Account prior to distributions on the Senior
Certificates. The effect of these provisions on any class of the Class M
Certificates is that, with respect to any Advance which remains unreimbursed
following the final liquidation of the related Mortgage Loan, the entire amount
of the reimbursement for such Advance will be borne first by the holders of the
Class B Certificates or any class of Class M Certificates having a lower payment
priority to the extent that such reimbursement is covered by amounts otherwise
distributable to such classes, and then by the holders of such class of Class M
Certificates (except as provided above) to the extent of the amounts otherwise
distributable to them.

                  CERTAIN YIELD AND PREPAYMENT CONSIDERATIONS

GENERAL

    The yields to maturity and the aggregate amount of distributions on the
Offered Certificates will be affected by the rate and timing of principal
payments on the Mortgage Loans and the amount and timing of Mortgagor defaults
resulting in Realized Losses. Such yields may be adversely affected by a higher
or lower than anticipated rate of principal payments on the Mortgage Loans in
the Trust. The rate of principal payments on such Mortgage Loans will in turn be
affected by the amortization schedules of the Mortgage Loans, the rate and
timing of Mortgagor prepayments, liquidations of defaulted Mortgage Loans and
purchases of Mortgage Loans due to certain breaches of representations and
warranties. The timing of changes in the rate of prepayments, liquidations and
purchases of the Mortgage Loans may, and the timing of Realized Losses will,
significantly affect the yield to an investor, even if the average rate of
principal payments experienced over time is consistent with an investor's
expectation. In addition, the rate of prepayments of the Mortgage Loans, the
average credit quality of the Mortgagors and the yield to investors on the
Certificates may be affected by certain refinancing programs, which may include
general or targeted solicitations, as described under 'Maturity and Prepayment
Considerations' in the Prospectus. Since the rate and timing of principal
payments on the Mortgage Loans will depend on future events and on a variety of
factors (as described herein and in the Prospectus under 'Yield

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<PAGE>

Considerations' and 'Maturity and Prepayment Considerations'), no assurance can
be given as to such rate or the timing of principal payments on the Offered
Certificates.

    The Mortgage Loans generally may be prepaid by the Mortgagors at any time
without payment of any prepayment fee or penalty, although a portion of the
Mortgage Loans may provide for payment of a prepayment charge, which may have a
substantial effect on the rate of prepayment. See 'Description of the Mortgage
Pool -- Mortgage Pool Characteristics.' Some states' laws restrict the
imposition of prepayment charges even when the mortgage loans expressly provide
for the collection of those charges. As a result, it is possible that prepayment
charges may not be collected even on mortgage loans that provide for the payment
of these charges. The Mortgage Loans generally contain due-on-sale clauses.
Factors affecting prepayment (including defaults and liquidations) of mortgage
loans include changes in mortgagors' housing needs, job transfers, unemployment,
mortgagors' net equity in the mortgaged properties, changes in the value of the
mortgaged properties, mortgage market interest rates, solicitations and
servicing decisions. In addition, if prevailing mortgage rates fell
significantly below the Mortgage Rates on the Mortgage Loans, the rate of
prepayments (including refinancings) would be expected to increase. Conversely,
if prevailing mortgage rates rose significantly above the Mortgage Rates on the
Mortgage Loans, the rate of prepayments on the Mortgage Loans would be expected
to decrease.

    As described under 'Description of the Certificates -- Principal
Distributions on the Senior Certificates' and ' -- Principal Distributions on
the Class M Certificates' herein, during certain periods all or a
disproportionately large percentage of Mortgagor prepayments on the Mortgage
Loans will be allocated among the Senior Certificates (other than the Interest
Only Certificates and the Principal Only Certificates), and during certain
periods no Mortgagor prepayments or a disproportionately small portion of
Mortgagor prepayments on the Mortgage Loans will be distributed to each class of
Class M Certificates. The Class M Certificates will not be entitled to receive
any distributions of Mortgagor prepayments prior to the Distribution Date
occurring in September 2005 unless the Certificate Principal Balances of the
Senior Certificates (other than the Principal Only Certificates) have been
reduced to zero, as further described herein. To the extent that no Mortgagor
prepayments or a disproportionately small percentage of Mortgagor prepayments
are distributed to the Class M Certificates, the Subordination afforded the
Senior Certificates by the Class M Certificates (together with the Class B
Certificates), in the absence of offsetting Realized Losses allocated thereto,
will be increased, and the weighted average lives of the Class M Certificates
will be longer than may otherwise be the case. In addition to the foregoing, if
on any Distribution Date, the loss level established for the Class M-2
Certificates or Class M-3 Certificates is exceeded and a class of Class M
Certificates having a higher payment priority is then outstanding, the
Class M-2 Certificates or Class M-3 Certificates, as the case may be, will not
receive distributions in respect of Mortgagor prepayments on such Distribution
Date. Prepayments, liquidations and purchases of the Mortgage Loans will result
in distributions to holders of the Offered Certificates of principal amounts
which would otherwise be distributed over the remaining terms of the Mortgage
Loans.

    The rate of defaults on the Mortgage Loans will also affect the rate and
timing of principal payments on the Mortgage Loans. In general, defaults on
mortgage loans are expected to occur with greater frequency in their early
years. The rate of default on Mortgage Loans that are secured by non-owner
occupied properties, Mortgage Loans made to borrowers whose income is not
required to be provided or verified, Mortgage Loans with higher Loan-to-Value
Ratios and Mortgage Loans made to borrowers with higher debt-to-income ratios,
may be higher than for other types of Mortgage Loans. As a result of the program
criteria and underwriting standards applicable to the Mortgage Loans, the
Mortgage Loans may experience rates of delinquency, foreclosure, bankruptcy and
loss that are higher than those experienced by mortgage loans that satisfy the
standards applied by Fannie Mae and Freddie Mac first mortgage loan purchase
programs, or by Residential Funding for the purpose of acquiring mortgage loans
to collateralize securities issued by Residential Funding Mortgage
Securities I, Inc. See 'Description of the Mortgage Pool -- The Program' herein.
Furthermore, the rate and timing of prepayments, defaults and liquidations on
the Mortgage Loans will be affected by the general economic condition of the
region of the country in which the related Mortgaged Properties are located. The
risk of delinquencies and loss is greater and prepayments are less likely in
regions where a weak or deteriorating economy exists, as may be evidenced by,
among other factors, increasing unemployment or falling property values. See
'Maturity and Prepayment Considerations' in the Prospectus.

    The recording of mortgages in the name of MERS is a new practice in the
mortgage lending industry. The Depositor expects that the Master Servicer or
applicable subservicer will be able to commence foreclosure proceedings on the
Mortgaged Properties, when necessary and appropriate; however, public recording
officers and others may have limited, if any, experience with lenders seeking to
foreclose mortgages, assignments of

                                      S-47





<PAGE>

which are registered with MERS. Accordingly, delays and additional costs in
commencing, prosecuting and completing foreclosure proceedings and conducting
foreclosure sales of the Mortgaged Properties could result. Those delays and
additional costs could in turn delay the distribution of liquidation proceeds to
the Certificateholders and increase the amount of Realized Losses on the
Mortgage Loans. In addition, if, as a result of MERS discontinuing or becoming
unable to continue operations in connection with the MERS'r' System, it becomes
necessary to remove any Mortgage Loan from registration on the MERS'r' System
and to arrange for the assignment of the related Mortgages to the Trustee, then
any related expenses shall be reimbursable by the Trust to the Master Servicer,
which will reduce the amount available to pay principal of and interest on the
outstanding Class or Classes of Certificates with the lowest payment priorities.
For additional information regarding the recording of Mortgages in the name of
MERS see 'Description of the Certificates -- Assignment of Mortgage Loans' in
the prospectus.

    After the Certificate Principal Balances of the Class B Certificates have
been reduced to zero, the yield to maturity on the class of Class M Certificates
then outstanding with the lowest payment priority will be extremely sensitive to
losses on the Mortgage Loans (and the timing thereof) because the entire amount
of losses that are covered by Subordination will be allocated to such class of
Class M Certificates. See ' -- Class M-2 and Class M-3 Certificate Yield
Considerations' below. Furthermore, because principal distributions are paid to
certain classes of Senior Certificates and Class M Certificates before other
classes, holders of classes having a later priority of payment bear a greater
risk of losses than holders of classes having earlier priorities of distribution
of principal.

    As described under 'Description of the Certificates -- Allocation of Losses;
Subordination' and ' -- Advances,' amounts otherwise distributable to holders of
one or more classes of the Class M Certificates may be made available to protect
the holders of the Senior Certificates and holders of any Class M Certificates
with a higher payment priority against interruptions in distributions due to
certain Mortgagor delinquencies, to the extent not covered by Advances. Such
delinquencies may affect the yields to investors on such classes of the Class M
Certificates, and, even if subsequently cured, may affect the timing of the
receipt of distributions by the holders of such classes of Class M Certificates.
Furthermore, the Principal Only Certificates will share in the principal portion
of Realized Losses on the Mortgage Loans only to the extent that they are
incurred with respect to Discount Mortgage Loans and only to the extent of the
related Discount Fraction; thus, after the Class B Certificates and the Class M
Certificates are retired or in the case of Excess Special Hazard Losses, Excess
Fraud Losses, Excess Bankruptcy Losses and Extraordinary Losses, the Senior
Certificates (other than the Principal Only Certificates) may be affected to a
greater extent by losses on Non-Discount Mortgage Loans than losses on Discount
Mortgage Loans. In addition, a higher than expected rate of delinquencies or
losses will also affect the rate of principal payments on one or more classes of
the Class M Certificates if it delays the scheduled reduction of the Senior
Accelerated Distribution Percentage or affects the allocation of prepayments
among the Class M Certificates and Class B Certificates.

    Because the Mortgage Rates on the Mortgage Loans and the Pass-Through Rates
on the Offered Certificates (other than the Variable Strip Certificates) are
fixed, such rates will not change in response to changes in market interest
rates. The Pass-Through Rate on the Variable Strip Certificates is based on the
weighted average of the Pool Strip Rates on the Mortgage Loans and such Pool
Strip Rates will not change in response to changes in market interest rates.
Accordingly, if market interest rates or market yields for securities similar to
the Offered Certificates were to rise, the market value of the Offered
Certificates may decline.

    The amount of interest otherwise payable to holders of the Offered
Certificates will be reduced by any interest shortfalls to the extent not
covered by Subordination or by the Master Servicer as described herein,
including Prepayment Interest Shortfalls and, in the case of each class of the
Class M Certificates, the interest portions of Realized Losses allocated solely
to such class of Certificates. Such shortfalls will not be offset by a reduction
in the Servicing Fees payable to the Master Servicer or otherwise, except as
described herein with respect to certain Prepayment Interest Shortfalls. See
'Description of the Certificates -- Interest Distributions' herein for a
discussion of certain possible shortfalls in the collection of interest.

    In addition, the yield to maturity on each class of the Offered Certificates
will depend on, among other things, the price paid by the holders of the Offered
Certificates and the related Pass-Through Rate. The extent to which the yield to
maturity of an Offered Certificate is sensitive to prepayments will depend, in
part, upon the degree to which it is purchased at a discount or premium. In
general, if a class of Offered Certificates is purchased at a premium and
principal distributions thereon occur at a rate faster than assumed at the time
of purchase, the investor's actual yield to maturity will be lower than
anticipated at the time of purchase.

                                      S-48





<PAGE>

Conversely, if a class of Offered Certificates is purchased at a discount and
principal distributions thereon occur at a rate slower than assumed at the time
of purchase, the investor's actual yield to maturity will be lower than
anticipated at the time of purchase. For additional considerations relating to
the yield on the Certificates, see 'Yield Considerations' and 'Maturity and
Prepayment Considerations' in the Prospectus.

    The multiple class structure of the Offered Certificates causes the yield of
certain classes to be particularly sensitive to changes in the rates of
prepayment of the related Mortgage Loans and other factors, as follows:

    Sequentially Paying Certificates: The Senior Certificates (other than the
Principal Only Certificates and Interest Only Certificates) are subject to
various priorities for payment of principal as described herein. Distributions
of principal on classes having an earlier priority of payment will be affected
by the rates of prepayment of the Mortgage Loans early in the life of the
Mortgage Pool. The timing of commencement of principal distributions and the
weighted average lives of classes of Certificates with a later priority of
payment will be affected by the rates of prepayment of the Mortgage Loans both
before and after the commencement of principal distributions on such classes.
Holders of any class of Senior Certificates with a longer weighted average life
bear a greater risk of loss than holders of Senior Certificates with a shorter
weighted average life because the Certificate Principal Balances of the Class M
and Class B Certificates could be reduced to zero before the Senior Certificates
are retired.

    PAC Certificates: The PAC Certificates have been structured so that
principal distributions generally will be made thereon in the amounts determined
by using the table described herein, assuming that prepayments on the Mortgage
Loans occur each month at a constant level within a range which is between
approximately 30% of the Prepayment Assumption and approximately 45% of the
Prepayment Assumption (the 'PAC TARGETED RANGE'), and based on certain other
assumptions.

    There can be no assurance that funds available for distribution of principal
on the PAC Certificates will result in the Certificate Principal Balances
equaling the applicable Planned Principal Balance for any Distribution Date. To
the extent that prepayments occur at a level below the PAC Targeted Range, the
funds available for principal distributions on the PAC Certificates on each
Distribution Date may be insufficient to reduce the Certificate Principal
Balance of the PAC Certificates to the Planned Principal Balance for such
Distribution Date, and the weighted average life of the PAC Certificates may be
extended. Conversely, to the extent that prepayments occur at a level above the
PAC Targeted Range, after the Certificate Principal Balances of the Class A-2
Certificates and the Accrual Companion Certificates have been reduced to zero,
the Certificate Principal Balance of the PAC Certificates may be reduced below
the Planned Principal Balance and the weighted average life of the PAC
Certificates may be reduced. In addition, the averaging of high and low
Mortgagor prepayment rates, even if the average prepayment level is within the
PAC Targeted Range, will not ensure the distribution on the PAC Certificates of
an amount that will result in the Certificate Principal Balance equaling the
Planned Principal Balance on any Distribution Date because the balance of the
related Senior Principal Distribution Amount remaining after distributions on
the PAC Certificates will be distributed on each Distribution Date and therefore
will not be available for distributions on the PAC Certificates on later
Distribution Dates.

    Investors in the PAC Certificates should be aware that the stabilization
provided by the Class A-2 Certificates and the Accrual Companion Certificates is
sensitive to the rate of Mortgagor prepayments on the Mortgage Loans, and that
the Certificate Principal Balances of such Certificates may be reduced to zero
significantly earlier than anticipated. The sum of the aggregate initial
Certificate Principal Balances of the Class A-2 Certificates and the Accrual
Companion Certificates is equal to approximately 82.46% of the initial
Certificate Principal Balance of the PAC Certificates.

    It is very unlikely that the Mortgage Loans will prepay at any particular
constant rate. Furthermore, the Planned Principal Balances set forth in the
table under 'Description of the Certificates -- Principal Distributions on the
Senior Certificates' were calculated based on certain assumptions which may
differ from the actual performance of the Mortgage Loans. The actual prepayment
rates experienced on the Mortgage Loans that will result in the Certificate
Principal Balance of the PAC Certificates equaling the Planned Principal
Balances set forth in such table may differ from the rates used to calculate
such amounts. The prepayment rates that will result in the Certificate Principal
Balances of the PAC Certificates equaling such amounts may vary over time as a
result of the actual prepayment experience of the Mortgage Loans. Moreover,
because the Planned Principal Balances were calculated using certain assumptions
regarding the Mortgage Loans, the actual prepayment behavior of the individual
Mortgage Loans could be such that the amount available for distributions of
principal in reduction of the Certificate Principal Balance of the PAC
Certificates may not result in the Certificate

                                      S-49





<PAGE>

Principal Balance thereof equaling the Planned Principal Balances even if the
prepayment experience of the Mortgage Loans was at a constant speed within the
PAC Targeted Range.

    Accretion Directed Certificates and Accrual Companion Certificates: To the
extent available, the Accretion Directed Certificates will receive payments of
principal on each Distribution Date in amounts sufficient to reduce its
Certificate Principal Balance to the amount set forth in the table entitled
'Planned Principal Balances and Contingent Class A-2 Certificate Principal
Balance Schedule.' However, investors in the Accretion Directed Certificates
should be aware that, due to the priorities of principal payments set forth
herein, they may receive substantially more or less than the amount set forth in
the table entitled 'Planned Principal Balances and Contingent Class A-2
Certificate Principal Balance Schedule' on any Distribution Date. In addition,
after the Certificate Principal Balance of the Accrual Companion Certificates
has been reduced to zero, the Accretion Directed Certificates will receive the
entire portion of the Senior Principal Distribution Amount that is in excess of
the amounts applied (i) to reduce the Certificate Principal Balance of the PAC
Certificates to the applicable Planned Principal Balance for any Distribution
Date and (ii) to pay the distribution of principal required to be made on the
Class A-9, Class A-10, Lockout and the Residual Certificates. Accordingly, the
Accretion Directed Certificates will likely experience price and yield
volatility. Investors should consider whether such volatility is suitable to
their investment needs.

    On and prior to the Accretion Termination Date, holders of the Accretion
Directed Certificates will receive as monthly principal distributions the
Accrual Distribution Amount. On or prior to the Accretion Termination Date,
interest shortfalls allocated to the Accrual Companion Certificates will reduce
the amount added to the Certificate Principal Balance of such Certificates in
respect of interest accrued thereon and will result in a corresponding reduction
of the amount available for distributions in respect of principal on the
Accretion Directed Certificates. Furthermore, because such interest shortfalls
will result in the Certificate Principal Balance of the Accrual Companion
Certificates being less than it otherwise would be, the amount of interest that
will accrue in the future on the Accrual Companion Certificates and be available
for distributions in respect of principal in respect of the Accretion Directed
Certificates will be reduced. Accordingly, the weighted average life of the
Accretion Directed Certificates would be extended.

    Investors in the Accretion Directed Certificates should be aware that the
stabilization provided by the Accrual Companion Certificates is sensitive to the
rate of Mortgagor prepayments on the Mortgage Loans, and that the Certificate
Principal Balance of such Accrual Companion Certificates may be reduced to zero
significantly earlier than anticipated. The initial Certificate Principal
Balance of the Accrual Companion Certificates is approximately 1.43% of the
aggregate initial Certificate Principal Balance of the Accretion Directed
Certificates.

    In addition, investors in the Accrual Companion Certificates should also be
aware that the Accretion Termination Date may be later (or earlier) than
otherwise anticipated if prepayments occur slower (or faster) than anticipated.
Investors in the Accrual Companion Certificates should be aware that the
Accretion Termination Date could be different from that assumed at the time of
purchase. Because the Accrual Companion Certificates are not entitled to receive
any distributions of interest (other than as described herein) until the
occurrence of the Accretion Termination Date, such Certificates will likely
experience greater price and yield volatility than would mortgage pass-through
certificates that are otherwise similar but which are entitled to current
distributions of interest. Investors should consider whether such volatility is
suitable to their investment needs.

    The Accrual Companion Certificates will receive monthly principal
distributions only from amounts included in the Senior Principal Distribution
Amount that are in excess of the amounts applied (i) to pay the amount required
to be distributed to the Class A-9 Certificates and Class A-10 Certificates,
(ii) to reduce the Certificate Principal Balance of the PAC Certificates to the
applicable Planned Principal Balance for any Distribution Date, (iii) to reduce
the Certificate Principal Balance of the Class A-2 Certificates to the amount
set forth in the table entitled 'Planned Principal Balances and Contingent
Class A-2 Certificate Principal Balance' for any Distribution Date, and (iv) to
pay the distribution of principal required to be made on the Lockout
Certificates, based on their Lockout Percentage, and the Residual Certificates.
Furthermore, the Accrual Companion Certificates will receive the entire Senior
Principal Distribution Amount remaining after those distributions, until the
Certificate Principal Balance of such Certificates has been reduced to zero. Due
to the companion nature of the Accrual Companion Certificates, such Certificates
will likely experience price and yield volatility. Investors should consider
whether such volatility is suitable to their needs.

                                      S-50





<PAGE>

    Retail Certificates: IN ADDITION TO THE CONSIDERATIONS SET FORTH ABOVE,
INVESTORS IN THE RETAIL CERTIFICATES SHOULD BE AWARE THAT SUCH CERTIFICATES MAY
NOT BE AN APPROPRIATE INVESTMENT FOR ALL PROSPECTIVE INVESTORS. The Retail
Certificates would not be an appropriate investment for any investor requiring a
distribution of a particular amount of principal or interest on a specific date
or dates or an otherwise predictable stream of cash payments. The timing of such
distributions may have a significant effect on an investor's yield on such
Certificates if the Certificate is purchased at a discount or a premium.

    Investors in the Retail Certificates also should be aware that distributions
of principal to the Retail Certificates will be allocated by DTC according to a
random lot procedure (except as provided herein under 'Description of the
Certificates -- Principal Distributions on the Retail Certificates'). Due to
this random lot procedure, there can be no assurance that on any Distribution
Date, any holder of a Retail Certificate will receive a principal distribution.
Thus, the timing of distributions in reduction of the Certificate Principal
Balance with respect to any particular Retail Certificate, even if a request for
distribution has been made as provided herein under 'Description of the
Certificates -- Principal Distributions on the Retail Certificates,' is highly
uncertain and may be earlier or later than the date that may be desired by such
Certificateholder.

    Furthermore, investors in the Retail Certificates should be aware that
because such Certificates have a later priority of payment with respect to
principal in relation to some of the other classes of Senior Certificates, the
effect on the market value of the Retail Certificates of changes in market
interest rates or market yields for similar securities will be greater than
would be the effect of such changes on other classes of Senior Certificates with
earlier priorities of payment entitled to principal distributions. Furthermore,
this later payment priority also makes the Retail Certificates particularly
sensitive to the rate and timing of principal prepayments on the related
Mortgage Loans. If prepayments on the related Mortgage Loans occur at a higher
rate than anticipated, the weighted average life of the Retail Certificates may
be shortened. Conversely, if prepayments on the related Mortgage Loans occur at
a lower rate than anticipated, the weighted average life of the Retail
Certificates may be extended. In addition, holders of any class of Class A
Certificates with a later priority of principal payments bear a greater risk of
loss than holders of Class A Certificates with an earlier priority of principal
payments because the Certificate Principal Balances of the Class M Certificates
and Class B Certificates could be reduced to zero before the Class A
Certificates are retired.

    Lockout Certificates: Investors in the Lockout Certificates should be aware
that because the Lockout Certificates will not receive any payments of principal
prior to the Distribution Date occurring in September 2005 and until the
Distribution Date occurring in September 2009 may receive a disproportionately
small portion of such principal (unless the Certificate Principal Balances of
the Senior Certificates (other than the Lockout Certificates and Principal Only
Certificates) have been reduced to zero), the weighted average life of the
Lockout Certificates may be longer than would be the case if the Lockout
Certificates were entitled to receive their pro rata share of principal
payments, and the effect on the market value of the Lockout Certificates of
changes in the market interest rates or market yields for similar securities may
be greater than for other classes of Senior Certificates entitled to such
distributions. Furthermore, if the Certificate Principal Balances of the Senior
Certificates (other than the Lockout Certificates and the Principal Only
Certificates) have been reduced to zero, the Lockout Certificates may receive a
disproportionately large portion of Mortgagor prepayments made during the
preceding calendar month to the extent not paid to Principal Only Certificates.

    Assumed Final Distribution Date: The assumed final Distribution Date with
respect to each class of Offered Certificates is August 25, 2030, which date is
the Distribution Date immediately following the latest scheduled maturity date
for any Mortgage Loan. No event of default, change in the priorities for
distribution among the various classes or other provisions under the Pooling and
Servicing Agreement will arise or become applicable solely by reason of the
failure to retire the entire Certificate Principal Balance of any class of
Certificates on or before its assumed final Distribution Date.

    Weighted Average Life: Weighted average life refers to the average amount of
time that will elapse from the date of issuance of a security to the date of
distribution to the investor of each dollar distributed in reduction of
principal of such security. The weighted average lives of the Offered
Certificates will be influenced by, among other things, the rate at which
principal of the Mortgage Loans is paid, which may be in the form of scheduled
amortization, prepayments or liquidations.

    Prepayments on mortgage loans are commonly measured relative to a prepayment
standard or model. The prepayment model used in preparing the tables below (the
'PREPAYMENT ASSUMPTION') represents an assumed rate of prepayment each month
relative to the then outstanding principal balance of a pool of new mortgage

                                      S-51





<PAGE>

loans. A 100% Prepayment Assumption assumes a constant prepayment rate ('CPR')
of 4.0% per annum of the then outstanding principal balance of such mortgage
loans in the first month of the life of the mortgage loans and an additional
1.090909% per annum in each month thereafter until the twelfth month. Beginning
in the twelfth month and in each month thereafter during the life of the
mortgage loans, a 100% Prepayment Assumption assumes a CPR of 16.0% per annum
each month. As used in the table below, a 0% Prepayment Assumption assumes
prepayment rates equal to 0% of the Prepayment Assumption (no prepayments).
Correspondingly, a 200% Prepayment Assumption assumes prepayment rates equal to
200% of the Prepayment Assumption, and so forth. The Prepayment Assumption does
not purport to be a historical description of prepayment experience or a
prediction of the anticipated rate of prepayment of any pool of mortgage loans,
including the Mortgage Loans.

    The table captioned 'Percent of Initial Certificate Principal Balance
Outstanding at the Following Percentages of the Prepayment Assumption' has been
prepared on the basis of certain assumptions as described below regarding the
weighted average characteristics of the Mortgage Loans that are expected to be
included in the Trust as described under 'Description of the Mortgage Pool'
herein and the performance thereof. The table assumes, among other things, that:
(i) as of the date of issuance of the Offered Certificates, the Mortgage Loans
have the following characteristics:

<TABLE>
<CAPTION>
                                                           DISCOUNT       NON-DISCOUNT
                                                        MORTGAGE LOANS   MORTGAGE LOANS
                                                        --------------   --------------
<S>                                                     <C>              <C>
Aggregate principal balance...........................  $5,283,048.08    $265,125,056.98
Mortgage Rate.........................................   7.9967242514%            9.3027%
Servicing Fee Rate....................................   0.3328482707%            0.3347%
Original term to maturity (months)....................            359                360
Remaining term to maturity (months)...................            352                358
</TABLE>

(ii) the scheduled monthly payment for each Mortgage Loan has been based on its
outstanding balance, mortgage rate and remaining term to maturity, such that the
Mortgage Loan will amortize in amounts sufficient for repayment thereof over its
remaining term to maturity; (iii) none of the Unaffiliated Sellers, the Master
Servicer or the Depositor will repurchase any Mortgage Loan, as described under
'Mortgage Loan Program -- Representations by Sellers' and 'Description of the
Certificates -- Assignment of the Mortgage Loans' in the Prospectus, and neither
the Master Servicer nor the Depositor exercises any option to purchase the
Mortgage Loans and thereby cause a termination of the Trust; (iv) there are no
delinquencies or Realized Losses on the Mortgage Loans, and principal payments
on the Mortgage Loans will be timely received together with prepayments, if any,
at the constant percentage of the Prepayment Assumption set forth in the table;
(v) there is no Prepayment Interest Shortfall or any other interest shortfall in
any month; (vi) payments on the Certificates will be received on the 25th day of
each month, commencing in September 2000; (vii) payments on the Mortgage Loans
earn no reinvestment return; (viii) there are no additional ongoing Trust
expenses payable out of the Trust; and (ix) the Certificates will be purchased
on August 30, 2000 (collectively, the 'STRUCTURING ASSUMPTIONS').

    The actual characteristics and performance of the Mortgage Loans will differ
from the assumptions used in constructing the table set forth below, which is
hypothetical in nature and is provided only to give a general sense of how the
principal cash flows might behave under varying prepayment scenarios. For
example, it is very unlikely that the Mortgage Loans will prepay at a constant
level of the Prepayment Assumption until maturity, or that all of the Mortgage
Loans will prepay at the same level of the Prepayment Assumption. Moreover, the
diverse remaining terms to maturity and Mortgage Rates of the Mortgage Loans
could produce slower or faster principal distributions than indicated in the
table at the various constant percentages of the Prepayment Assumption
specified, even if the weighted average remaining term to maturity and weighted
average Mortgage Rate of the Mortgage Loans are as assumed. Any difference
between such assumptions and the actual characteristics and performance of the
Mortgage Loans, or actual prepayment or loss experience, will affect the
percentages of initial Certificate Principal Balances outstanding over time and
the weighted average lives of the classes of Offered Certificates.

    Subject to the foregoing discussion and assumptions, the following table
indicates the weighted average life of each class of Offered Certificates (other
than the Interest Only and the Residual Certificates), and sets forth the
percentages of the initial Certificate Principal Balance of each such class of
Offered Certificates that would be outstanding after each of the Distribution
Dates shown at various constant percentages of the Prepayment Assumption.

                                      S-52








<PAGE>

 PERCENT OF INITIAL CERTIFICATE PRINCIPAL BALANCE OUTSTANDING AT THE FOLLOWING
                  PERCENTAGES OF THE PREPAYMENT ASSUMPTION

<TABLE>
<CAPTION>
                                 CLASS A-1                          CLASS A-2                          CLASS A-3
                      --------------------------------   --------------------------------   --------------------------------
DISTRIBUTION DATE      0%    50%    100%   150%   200%    0%    50%    100%   150%   200%    0%    50%    100%   150%   200%
-----------------      --    ---    ----   ----   ----    --    ---    ----   ----   ----    --    ---    ----   ----   ----
<S>                   <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>
Initial Percentage..   100%  100%   100%   100%   100%    100%  100%   100%   100%   100%    100%  100%   100%   100%   100%
August 25, 2001.....    99    90     90     90     90     100    93     76     60     42     100   100    100    100    100
August 25, 2002.....    97    78     78     78     67     100    85     49     17      0     100   100    100    100    100
August 25, 2003.....    95    66     66     57     29     100    78     28      0      0     100   100    100    100    100
August 25, 2004.....    93    55     55     30      3      99    72     13      0      0     100   100    100    100    100
August 25, 2005.....    91    44     44     10      0      99    67      1      0      0     100   100    100    100      0
August 25, 2006.....    89    35     33      0      0      99    63      0      0      0     100   100    100     41      0
August 25, 2007.....    87    26     22      0      0      99    60      0      0      0     100   100    100      0      0
August 25, 2008.....    84    18     14      0      0      99    58      0      0      0     100   100    100      0      0
August 25, 2009.....    82    11      9      0      0      98    57      0      0      0     100   100    100      0      0
August 25, 2010.....    79     4      5      0      0      98    57      0      0      0     100   100    100      0      0
August 25, 2011.....    75     0      2      0      0      98    54      0      0      0     100   100    100      0      0
August 25, 2012.....    72     0      0      0      0      98    46      0      0      0     100   100     97      0      0
August 25, 2013.....    68     0      0      0      0      97    40      0      0      0     100   100      0      0      0
August 25, 2014.....    64     0      0      0      0      97    33      0      0      0     100   100      0      0      0
August 25, 2015.....    59     0      0      0      0      97    27      0      0      0     100   100      0      0      0
August 25, 2016.....    54     0      0      0      0      96    22      0      0      0     100   100      0      0      0
August 25, 2017.....    49     0      0      0      0      96    17      0      0      0     100   100      0      0      0
August 25, 2018.....    43     0      0      0      0      95    12      0      0      0     100   100      0      0      0
August 25, 2019.....    36     0      0      0      0      95     7      0      0      0     100   100      0      0      0
August 25, 2020.....    29     0      0      0      0      94     3      0      0      0     100   100      0      0      0
August 25, 2021.....    21     0      0      0      0      94     0      0      0      0     100   100      0      0      0
August 25, 2022.....    12     0      0      0      0      93     0      0      0      0     100   100      0      0      0
August 25, 2023.....     2     0      0      0      0      92     0      0      0      0     100   100      0      0      0
August 25, 2024.....     0     0      0      0      0      81     0      0      0      0     100    17      0      0      0
August 25, 2025.....     0     0      0      0      0      66     0      0      0      0     100     0      0      0      0
August 25, 2026.....     0     0      0      0      0      50     0      0      0      0     100     0      0      0      0
August 25, 2027.....     0     0      0      0      0      31     0      0      0      0     100     0      0      0      0
August 25, 2028.....     0     0      0      0      0      12     0      0      0      0     100     0      0      0      0
August 25, 2029.....     0     0      0      0      0       0     0      0      0      0     100     0      0      0      0
August 25, 2030.....     0     0      0      0      0       0     0      0      0      0       0     0      0      0      0
Weighted Average
 Life (in years)**..  15.3   4.8    4.7    3.2    2.4    24.9  10.0    2.2    1.3    0.9    29.3  23.7   12.5    6.0    4.2
</TABLE>
---------
 * Indicates a number that is greater than zero but less than 0.5%.
** The weighted average life of a Certificate of any class is determined by
   (i) multiplying the amount of each net distribution of Certificate Principal
   Balance by the number of years from the date of issuance of the Certificate
   to the related Distribution Date, (ii) adding the results, and (iii) dividing
   the sum by the aggregate of the net distributions described in (i) above.

THIS TABLE HAS BEEN PREPARED BASED ON THE STRUCTURING ASSUMPTIONS (INCLUDING THE
ASSUMPTIONS REGARDING THE CHARACTERISTICS AND PERFORMANCE OF THE MORTGAGE LOANS
WHICH DIFFER FROM THE ACTUAL CHARACTERISTICS AND PERFORMANCE THEREOF) AND SHOULD
BE READ IN CONJUNCTION THEREWITH.

(Table continued on next page.)

                                      S-53





<PAGE>

 PERCENT OF INITIAL CERTIFICATE PRINCIPAL BALANCE OUTSTANDING AT THE FOLLOWING
                    PERCENTAGES OF THE PREPAYMENT ASSUMPTION

<TABLE>
<CAPTION>
                                 CLASS A-4                          CLASS A-5                          CLASS A-6
                      --------------------------------   --------------------------------   --------------------------------
DISTRIBUTION DATE      0%    50%    100%   150%   200%    0%    50%    100%   150%   200%    0%    50%    100%   150%   200%
-----------------      --    ---    ----   ----   ----    --    ---    ----   ----   ----    --    ---    ----   ----   ----
<S>                   <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>
Initial Percentage..   100%  100%   100%   100%   100%    100%  100%   100%   100%   100%    100%  100%   100%   100%   100%
August 25, 2001.....   100   100    100    100    100     108   108    108      0      0     100   100    100    100    100
August 25, 2002.....   100   100    100    100    100     117   117    117      0      0     100   100    100    100    100
August 25, 2003.....   100   100    100    100    100     127   127    127      0      0     100   100    100    100    100
August 25, 2004.....   100   100    100    100    100     138   138    138      0      0     100   100    100    100    100
August 25, 2005.....   100   100    100    100     86     149   149    149      0      0     100   100    100    100      0
August 25, 2006.....   100    97     94     90     43     161   161      0      0      0     100   100    100    100      0
August 25, 2007.....    99    93     86     77     18     175   175      0      0      0     100   100    100      0      0
August 25, 2008.....    98    88     76     62      6     189   189      0      0      0     100   100    100      0      0
August 25, 2009.....    97    81     65     46      2     205   205      0      0      0     100   100    100      0      0
August 25, 2010.....    96    73     54     34      1     222   222      0      0      0     100   100    100      0      0
August 25, 2011.....    94    66     44     26      1     240   240      0      0      0     100   100    100      0      0
August 25, 2012.....    92    60     36     19      1     260   260      0      0      0     100   100    100      0      0
August 25, 2013.....    90    53     30     14      *     282   282      0      0      0     100   100     91      0      0
August 25, 2014.....    87    48     24     11      *     305   305      0      0      0     100   100      0      0      0
August 25, 2015.....    85    43     20      8      *     331   331      0      0      0     100   100      0      0      0
August 25, 2016.....    82    38     16      6      *     358   358      0      0      0     100   100      0      0      0
August 25, 2017.....    79    34     13      4      *     388   388      0      0      0     100   100      0      0      0
August 25, 2018.....    76    30     11      3      *     420   420      0      0      0     100   100      0      0      0
August 25, 2019.....    72    26      8      2      *     455   455      0      0      0     100   100      0      0      0
August 25, 2020.....    68    23      7      2      *     493   493      0      0      0     100   100      0      0      0
August 25, 2021.....    63    19      5      1      *     534   468      0      0      0     100   100      0      0      0
August 25, 2022.....    59    16      4      1      *     578   247      0      0      0     100   100      0      0      0
August 25, 2023.....    53    14      3      1      *     626    43      0      0      0     100   100      0      0      0
August 25, 2024.....    47    11      2      *      *     678     0      0      0      0     100   100      0      0      0
August 25, 2025.....    41     9      2      *      *     734     0      0      0      0     100     0      0      0      0
August 25, 2026.....    34     7      1      *      *     795     0      0      0      0     100     0      0      0      0
August 25, 2027.....    26     5      1      *      *     861     0      0      0      0     100     0      0      0      0
August 25, 2028.....    18     3      *      *      *     932     0      0      0      0     100     0      0      0      0
August 25, 2029.....     8     1      *      *      *     295     0      0      0      0     100     0      0      0      0
August 25, 2030.....     0     0      0      0      0       0     0      0      0      0       0     0      0      0      0
Weighted Average
 Life (in years)**..  22.2  14.9   11.6    9.6    6.2    28.9  22.0    5.4    0.1    0.1    29.4  24.4   13.2    6.2    4.3

</TABLE>
---------
 * Indicates a number that is greater than zero but less than 0.5%.
** The weighted average life of a Certificate of any class is determined by
   (i) multiplying the amount of each net distribution of Certificate Principal
   Balance by the number of years from the date of issuance of the Certificate
   to the related Distribution Date, (ii) adding the results, and (iii) dividing
   the sum by the aggregate of the net distributions described in (i) above.

THIS TABLE HAS BEEN PREPARED BASED ON THE STRUCTURING ASSUMPTIONS (INCLUDING THE
ASSUMPTIONS REGARDING THE CHARACTERISTICS AND PERFORMANCE OF THE MORTGAGE LOANS
WHICH DIFFER FROM THE ACTUAL CHARACTERISTICS AND PERFORMANCE THEREOF) AND SHOULD
BE READ IN CONJUNCTION THEREWITH.

(Table continued from previous page and continued on next page.)

                                      S-54





<PAGE>

 PERCENT OF INITIAL CERTIFICATE PRINCIPAL BALANCE OUTSTANDING AT THE FOLLOWING
                   PERCENTAGES OF THE PREPAYMENT ASSUMPTION

<TABLE>
<CAPTION>
                                 CLASS A-7                          CLASS A-8                          CLASS A-9
                      --------------------------------   --------------------------------   --------------------------------
DISTRIBUTION DATE      0%    50%    100%   150%   200%    0%    50%    100%   150%   200%    0%    50%    100%   150%   200%
-----------------      --    ---    ----   ----   ----    --    ---    ----   ----   ----    --    ---    ----   ----   ----
<S>                   <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>
Initial Percentage..   100%  100%   100%   100%   100%    100%  100%   100%   100%   100%    100%  100%   100%   100%   100%
August 25, 2001.....   100   100    100    100    100     100   100    100    100    100      99    92     85     78     71
August 25, 2002.....   100   100    100    100    100     100   100    100    100    100      98    83     68     54     42
August 25, 2003.....   100   100    100    100    100     100   100    100    100    100      98    74     53     36     22
August 25, 2004.....   100   100    100    100    100     100   100    100    100    100      97    66     41     23      9
August 25, 2005.....   100   100    100    100      0     100   100    100    100      0      96    58     31     13      0
August 25, 2006.....   100   100    100    100      0     100   100    100    100      0      94    52     23      6      0
August 25, 2007.....   100   100    100      0      0     100   100    100     58      0      93    46     17      1      0
August 25, 2008.....   100   100    100      0      0     100   100    100      8      0      92    40     12      0      0
August 25, 2009.....   100   100    100      0      0     100   100    100      0      0      90    35      8      0      0
August 25, 2010.....   100   100    100      0      0     100   100    100      0      0      89    31      5      0      0
August 25, 2011.....   100   100    100      0      0     100   100    100      0      0      87    27      2      0      0
August 25, 2012.....   100   100    100      0      0     100   100    100      0      0      85    23      0      0      0
August 25, 2013.....   100   100    100      0      0     100   100    100      0      0      83    20      0      0      0
August 25, 2014.....   100   100     64      0      0     100   100    100      0      0      80    17      0      0      0
August 25, 2015.....   100   100     10      0      0     100   100    100      0      0      78    14      0      0      0
August 25, 2016.....   100   100      0      0      0     100   100     85      0      0      75    11      0      0      0
August 25, 2017.....   100   100      0      0      0     100   100     69      0      0      71     9      0      0      0
August 25, 2018.....   100   100      0      0      0     100   100     55      0      0      68     6      0      0      0
August 25, 2019.....   100   100      0      0      0     100   100     44      0      0      64     4      0      0      0
August 25, 2020.....   100   100      0      0      0     100   100     35      0      0      60     2      0      0      0
August 25, 2021.....   100   100      0      0      0     100   100     27      0      0      55     1      0      0      0
August 25, 2022.....   100   100      0      0      0     100   100     21      0      0      50     0      0      0      0
August 25, 2023.....   100   100      0      0      0     100   100     16      0      0      45     0      0      0      0
August 25, 2024.....   100   100      0      0      0     100   100     12      0      0      39     0      0      0      0
August 25, 2025.....   100    68      0      0      0     100   100      9      0      0      32     0      0      0      0
August 25, 2026.....   100     0      0      0      0     100    99      6      0      0      25     0      0      0      0
August 25, 2027.....   100     0      0      0      0     100    70      4      0      0      17     0      0      0      0
August 25, 2028.....   100     0      0      0      0     100    44      2      0      0       8     0      0      0      0
August 25, 2029.....   100     0      0      0      0     100    19      1      0      0       0     0      0      0      0
August 25, 2030.....     0     0      0      0      0       0     0      0      0      0       0     0      0      0      0
Weighted Average
 Life (in years)**..  29.5  25.3   14.3    6.4    4.4    29.7  27.8   19.4    7.3    4.6    20.2   7.6    4.0    2.6    2.0

</TABLE>
---------
 * Indicates a number that is greater than zero but less than 0.5%.
** The weighted average life of a Certificate of any class is determined by
   (i) multiplying the amount of each net distribution of Certificate Principal
   Balance by the number of years from the date of issuance of the Certificate
   to the related Distribution Date, (ii) adding the results, and (iii) dividing
   the sum by the aggregate of the net distributions described in (i) above.

THIS TABLE HAS BEEN PREPARED BASED ON THE STRUCTURING ASSUMPTIONS (INCLUDING THE
ASSUMPTIONS REGARDING THE CHARACTERISTICS AND PERFORMANCE OF THE MORTGAGE LOANS
WHICH DIFFER FROM THE ACTUAL CHARACTERISTICS AND PERFORMANCE THEREOF) AND SHOULD
BE READ IN CONJUNCTION THEREWITH.

(Table continued from previous page and continued on next page.)

                                      S-55





<PAGE>

 PERCENT OF INITIAL CERTIFICATE PRINCIPAL BALANCE OUTSTANDING AT THE FOLLOWING
                    PERCENTAGES OF THE PREPAYMENT ASSUMPTION

<TABLE>
<CAPTION>
                                 CLASS A-10                         CLASS A-P                   CLASSES M-1, M-2 AND M-3
                      --------------------------------   --------------------------------   --------------------------------
DISTRIBUTION DATE      0%    50%    100%   150%   200%    0%    50%    100%   150%   200%    0%    50%    100%   150%   200%
-----------------      --    ---    ----   ----   ----    --    ---    ----   ----   ----    --    ---    ----   ----   ----
<S>                   <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>
Initial Percentage..   100%  100%   100%   100%   100%    100%  100%   100%   100%   100%    100%  100%   100%   100%   100%
August 25, 2001.....   100   100    100    100    100      99    92     84     77     69      99    99     99     99     99
August 25, 2002.....   100   100    100    100    100      98    83     70     58     47      99    99     99     99     99
August 25, 2003.....   100   100    100    100    100      97    76     58     43     31      98    98     98     98     98
August 25, 2004.....   100   100    100    100    100      96    69     48     33     21      97    97     97     97     97
August 25, 2005.....   100   100    100    100     99      95    63     40     24     14      96    96     96     96     96
August 25, 2006.....   100   100    100    100     50      93    57     33     18      9      95    93     90     88     85
August 25, 2007.....   100   100    100    100     21      92    52     27     14      6      94    89     83     78     72
August 25, 2008.....   100   100    100     74      7      90    47     23     10      4      93    83     74     65     56
August 25, 2009.....   100   100    100     53      2      89    42     19      8      3      91    77     63     51     41
August 25, 2010.....   100   100    100     39      2      87    38     15      6      2      90    69     52     38     27
August 25, 2011.....   100   100    100     29      1      85    34     13      4      1      88    63     43     29     18
August 25, 2012.....   100   100     99     22      1      83    31     10      3      1      86    56     35     21     12
August 25, 2013.....   100   100     81     16      *      81    27      8      2      1      84    51     29     16      8
August 25, 2014.....   100   100     66     12      *      78    24      7      2      *      82    45     24     12      5
August 25, 2015.....   100   100     54      9      *      75    22      6      1      *      80    41     19      9      4
August 25, 2016.....   100   100     44      7      *      72    19      4      1      *      77    36     16      6      2
August 25, 2017.....   100   100     35      5      *      69    17      4      1      *      74    32     13      5      2
August 25, 2018.....   100   100     29      3      *      66    15      3      *      *      71    28     10      3      1
August 25, 2019.....   100   100     23      3      *      62    13      2      *      *      68    25      8      2      1
August 25, 2020.....   100   100     18      2      *      58    11      2      *      *      64    21      6      2      *
August 25, 2021.....   100   100     14      1      *      54     9      1      *      *      60    18      5      1      *
August 25, 2022.....   100    90     11      1      *      49     8      1      *      *      55    16      4      1      *
August 25, 2023.....   100    75      8      1      *      44     6      1      *      *      50    13      3      1      *
August 25, 2024.....   100    62      6      *      *      38     5      1      *      *      44    11      2      *      *
August 25, 2025.....   100    49      5      *      *      32     4      *      *      *      38     8      2      *      *
August 25, 2026.....   100    37      3      *      *      26     3      *      *      *      32     6      1      *      *
August 25, 2027.....   100    27      2      *      *      19     2      *      *      *      25     5      1      *      *
August 25, 2028.....   100    17      1      *      *      11     1      *      *      *      17     3      *      *      *
August 25, 2029.....    84     7      *      *      *       3     *      *      *      *       8     1      *      *      *
August 25, 2030.....     0     0      0      0      0       0     0      0      0      0       0     0      0      0      0
Weighted Average
 Life (in years)**..  29.4  25.2   16.5   10.3    6.3    19.9   9.2    5.3    3.6    2.6    21.1  14.3   11.3    9.7    8.7

</TABLE>
---------
 * Indicates a number that is greater than zero but less than 0.5%.
** The weighted average life of a Certificate of any class is determined by
   (i) multiplying the amount of each net distribution of Certificate Principal
   Balance by the number of years from the date of issuance of the Certificate
   to the related Distribution Date, (ii) adding the results, and (iii) dividing
   the sum by the aggregate of the net distributions described in (i) above.

THIS TABLE HAS BEEN PREPARED BASED ON THE STRUCTURING ASSUMPTIONS (INCLUDING THE
ASSUMPTIONS REGARDING THE CHARACTERISTICS AND PERFORMANCE OF THE MORTGAGE LOANS
WHICH DIFFER FROM THE ACTUAL CHARACTERISTICS AND PERFORMANCE THEREOF) AND SHOULD
BE READ IN CONJUNCTION THEREWITH.

(Table continued from previous page.)

                                      S-56








<PAGE>

PRINCIPAL ONLY CERTIFICATE AND INTEREST ONLY CERTIFICATE YIELD CONSIDERATIONS

    The amounts payable with respect to the Principal Only Certificates derive
only from principal payments on the Discount Mortgage Loans. As a result, the
yield on the Principal Only Certificates will be adversely affected by slower
than expected payments of principal (including prepayments, defaults and
liquidations) on the Discount Mortgage Loans.

    The yield to maturity on the Variable Strip Certificates will be extremely
sensitive to both the timing of receipt of prepayments and the overall rate of
principal prepayments and defaults on the Non-Discount Mortgage Loans, which
rate may fluctuate significantly over time. Investors in the Variable Strip
Certificates should fully consider the risk that a rapid rate of prepayments on
the Non-Discount Mortgage Loans could result in the failure of such investors to
recover fully their investments. Because the Pool Strip Rates on the Discount
Mortgage Loans equal 0.00%, the yield to investors on the Variable Strip
Certificates will not be affected by prepayments on the Discount Mortgage Loans.

    The yield to maturity on the Fixed Strip Certificates will be extremely
sensitive to both the timing of receipt of prepayments and the overall rate of
principal prepayments and defaults on the Mortgage Loans to the extent those
payments and defaults affect the timing of payments and amount of losses applied
to reduce the Certificate Principal Balance of the PAC Certificates.

    The following tables indicate the sensitivity of the pre-tax yield to
maturity on the Principal Only Certificates and Interest Only Certificates to
various constant rates of prepayment on the Mortgage Loans by projecting the
monthly aggregate payments on the Principal Only Certificates and Interest Only
Certificates and computing the corresponding pre-tax yields to maturity on a
corporate bond equivalent basis, based on the Structuring Assumptions, including
the assumptions regarding the characteristics and performance of the Mortgage
Loans, which differ from the actual characteristics and performance thereof and
assuming the aggregate purchase prices set forth below (which include accrued
interest, if any). Any differences between such assumptions and the actual
characteristics and performance of the Mortgage Loans and of the Principal Only
Certificates and Variable Strip Certificates may result in yields being
different from those shown in such tables. Discrepancies between assumed and
actual characteristics and performance underscore the hypothetical nature of the
tables, which are provided only to give a general sense of the sensitivity of
yields in varying prepayment scenarios.

           PRE-TAX YIELDS TO MATURITY OF THE FIXED STRIP CERTIFICATES
           AT THE FOLLOWING PERCENTAGES OF THE PREPAYMENT ASSUMPTION

<TABLE>
<CAPTION>
        ASSUMED PURCHASE PRICE   0%      50%    100%    150%    200%
        ----------------------   --      ---    ----    ----    ----
        <S>                     <C>     <C>     <C>     <C>     <C>
               $479,859         51.4%   36.1%   35.8%   26.3%   11.9%
</TABLE>

         PRE-TAX YIELDS TO MATURITY OF THE PRINCIPAL ONLY CERTIFICATES
           AT THE FOLLOWING PERCENTAGES OF THE PREPAYMENT ASSUMPTION

<TABLE>
<CAPTION>
        ASSUMED PURCHASE PRICE   0%    50%    100%   150%    200%
        ----------------------   --    ---    ----   ----    ----
        <S>                     <C>    <C>    <C>    <C>     <C>
               $150,940         2.0%   4.8%   8.8%   13.4%   18.5%
</TABLE>

         PRE-TAX YIELDS TO MATURITY OF THE VARIABLE STRIP CERTIFICATES
           AT THE FOLLOWING PERCENTAGES OF THE PREPAYMENT ASSUMPTION

<TABLE>
<CAPTION>
        ASSUMED PURCHASE PRICE   0%      50%    100%    150%    200%
        ----------------------   --      ---    ----    ----    ----
        <S>                     <C>     <C>     <C>     <C>    <C>
              $8,192,722        32.5%   24.0%   15.0%   5.6%   (4.2)%
</TABLE>

    Each pre-tax yield to maturity set forth in the preceding tables was
calculated by determining the monthly discount rate which, when applied to the
assumed stream of cash flows to be paid on the Principal Only Certificates and
Interest Only Certificates, would cause the discounted present value of such
assumed stream of cash flows to equal the assumed purchase price listed in the
applicable table. Accrued interest, if any, is included in the assumed purchase
price and is used in computing the corporate bond equivalent yields shown. These
yields do not take into account the different interest rates at which investors
may be able to reinvest funds received by them as distributions on the Principal
Only Certificates and Interest Only Certificates, and thus do

                                      S-57





<PAGE>

not reflect the return on any investment in the Principal Only Certificates and
Interest Only Certificates when any reinvestment rates other than the discount
rates are considered.

    Notwithstanding the assumed prepayment rates reflected in the preceding
tables, it is highly unlikely that the Mortgage Loans will be prepaid according
to one particular pattern. For this reason, and because the timing of cash flows
is critical to determining yields, the pre-tax yields to maturity on the
Principal Only Certificates and Interest Only Certificates are likely to differ
from those shown in the tables, even if the average prepayment rate on all of
the Mortgage Loans equals the constant percentages of the Prepayment Assumption
indicated in the tables above over any given time period or over the entire life
of the Certificates. A lower than anticipated rate of principal prepayments on
the Discount Mortgage Loans will have a material adverse effect on the yield to
maturity of the Principal Only Certificates. The rate and timing of principal
prepayments on the Discount Mortgage Loans may differ from the rate and timing
of principal prepayments on the Mortgage Pool. In addition, because the Discount
Mortgage Loans have Net Mortgage Rates that are lower than the Net Mortgage
Rates of the Non-Discount Mortgage Loans, and because Mortgage Loans with lower
Net Mortgage Rates are likely to have lower Mortgage Rates, the Discount
Mortgage Loans are generally likely to prepay under most circumstances at a
slower rate than the Non-Discount Mortgage Loans. Holders of the Variable Strip
Certificates generally have rights to relatively larger portions of interest
payments on Mortgage Loans with higher Mortgage Rates; thus, the yield on the
Variable Strip Certificates will be adversely affected to a greater extent than
on the other Offered Certificates if the Mortgage Loans with higher Mortgage
Rates prepay faster than the Mortgage Loans with lower Mortgage Rates. Because
Mortgage Loans having higher Pool Strip Rates generally have higher Mortgage
Rates, such Mortgage Loans are generally more likely to be prepaid under most
circumstances than are Mortgage Loans having lower Pool Strip Rates.

    There can be no assurance that the Mortgage Loans will prepay at any
particular rate or that the yield on the Principal Only Certificates and
Interest Only Certificates will conform to the yields described herein.
Moreover, the various remaining terms to maturity and Mortgage Rates of the
Mortgage Loans could produce slower or faster principal distributions than
indicated in the preceding table at the various constant percentages of the
Prepayment Assumption specified, even if the weighted average remaining term to
maturity and the weighted average Mortgage Rate of the Mortgage Loans are as
assumed. Investors are urged to make their investment decisions based on their
determinations as to anticipated rates of prepayment under a variety of
scenarios. Investors in the Interest Only Certificates should fully consider the
risk that a rapid rate of prepayments on the Mortgage Loans could result in the
failure of such investors to recover fully their investments.

    For additional considerations relating to the yield on the Certificates, see
'Yield Considerations' and 'Maturity and Prepayment Considerations' in the
Prospectus.

CLASS M-2 AND CLASS M-3 CERTIFICATE YIELD CONSIDERATIONS

    If the aggregate Certificate Principal Balance of the Class B Certificates
has been reduced to zero, the yield to maturity on the Class M-3 Certificates
will become extremely sensitive to losses on the Mortgage Loans (and the timing
thereof) that are covered by Subordination, because the entire amount of such
losses will be allocated to the Class M-3 Certificates. The aggregate initial
Certificate Principal Balance of the Class B Certificates is equal to
approximately 1.40% of the aggregate principal balance of the Mortgage Loans as
of the Cut-off Date. If the Certificate Principal Balances of the Class B
Certificates and Class M-3 Certificates have been reduced to zero, the yield to
maturity on the Class M-2 Certificates will become extremely sensitive to losses
on the Mortgage Loans (and the timing thereof) that are covered by
Subordination, because the entire amount of such losses will be allocated to the
Class M-2 Certificates. The aggregate initial Certificate Principal Balance of
the Class M-3 Certificates and Class B Certificates is equal to approximately
2.55% of the aggregate principal balance of the Mortgage Loans as of the Cut-off
Date.

    Defaults on mortgage loans may be measured relative to a default standard or
model. The model used in this Prospectus Supplement, the standard default
assumption ('SDA'), represents an assumed rate of default each month relative to
the then outstanding performing principal balance of a pool of new mortgage
loans. A default assumption of 100% SDA assumes constant default rates of 0.02%
per annum of the then outstanding principal balance of such mortgage loans in
the first month of the life of the mortgage loans and an additional 0.02% per
annum in each month thereafter until the 30th month. Beginning in the 30th month
and in each month thereafter through the 60th month of the life of the mortgage
loans, 100% SDA assumes a constant

                                      S-58





<PAGE>

default rate of 0.60% per annum each month. Beginning in the 61st month and in
each month thereafter through the 120th month of the life of the mortgage loans,
100% SDA assumes that the constant default rate declines each month by 0.0095%
per annum, and that the constant default rate remains at 0.03% per annum in each
month after the 120th month. For the purposes of the tables below, it is assumed
that there is no delay between the default and liquidation of the mortgage
loans. As used in the table below, '0% SDA' assumes default rates equal to 0% of
SDA (no defaults). Correspondingly, '100% SDA' assumes default rates equal to
100% of SDA, and so forth. SDA does not purport to be a historical description
of default experience or a prediction of the anticipated rate of default of any
pool of mortgage loans, including the Mortgage Loans.

    The following tables indicate the sensitivity of the yield to maturity on
the Class M-2 Certificates and Class M-3 Certificates to various rates of
prepayment and varying levels of aggregate Realized Losses by projecting the
monthly aggregate cash flows on the Class M-2 Certificates and Class M-3
Certificates and computing the corresponding pre-tax yield to maturity on a
corporate bond equivalent basis. The tables are based on the Structuring
Assumptions (except assumption (iv)), including the assumptions regarding the
characteristics and performance of the Mortgage Loans, which differ from the
actual characteristics and performance thereof, and assuming further that
(i) defaults and final liquidations on the Mortgage Loans occur on the last day
of each month at the respective SDA percentages set forth in the tables,
(ii) each liquidation results in a Realized Loss allocable to principal equal to
the percentage indicated (the 'LOSS SEVERITY PERCENTAGE') multiplied by the
principal balances of the Mortgage Loans assumed to be liquidated, (iii) there
are no delinquencies on the Mortgage Loans, and principal payments on the
Mortgage Loans (other than those on Mortgage Loans assumed to be liquidated)
will be timely received together with prepayments, if any, at the respective
constant percentages of the Prepayment Assumption set forth in the table,
(iv) there are no Excess Special Hazard Losses, Excess Fraud Losses, Excess
Bankruptcy Losses or Extraordinary Losses, (v) clauses (a)(i), (b)(i) and
(b)(ii) in the definition of Senior Accelerated Distribution Percentage are not
applicable and (vi) the purchase prices of the Class M-2 Certificates and
Class M-3 Certificates will be $3,354,569 and $2,902,569, respectively,
including accrued interest. Investors should also consider the possibility that
aggregate losses incurred may not in fact be materially reduced by higher
prepayment speeds because mortgage loans that would otherwise ultimately default
and be liquidated may be less likely to be prepaid. In addition, investors
should be aware that the following table is based upon the assumption that the
Class M-2 Certificates and Class M-3 Certificates are priced at a discount.
Since prepayments will occur at par, the yield on the Class M-2 Certificates and
Class M-3 Certificates may increase due to such prepayments, even if losses
occur. Any differences between such assumptions and the actual characteristics
and performance of the Mortgage Loans and of the Certificates may result in
yields different from those shown in such tables. Discrepancies between assumed
and actual characteristics and performance underscore the hypothetical nature of
the tables, which are provided only to give a general sense of the sensitivity
of yields in varying Realized Loss and prepayment scenarios.

                SENSITIVITY OF PRE-TAX YIELD TO MATURITY OF THE
               CLASS M-2 CERTIFICATES AND CLASS M-3 CERTIFICATES
                       TO PREPAYMENTS AND REALIZED LOSSES

                             CLASS M-2 CERTIFICATES

<TABLE>
<CAPTION>
                                    PERCENTAGE OF THE PREPAYMENT ASSUMPTION
                    LOSS SEVERITY   ----------------------------------------
PERCENTAGE OF SDA    PERCENTAGE        0%       50%    100%    150%    200%
-----------------    ----------        --       ---    ----    ----    ----
<S>                 <C>             <C>        <C>     <C>     <C>     <C>
        0%               N/A           8.23%   8.25%   8.26%   8.27%   8.28%
      100%               30%           8.23%   8.25%   8.26%   8.27%   8.28%
      200%               30%           8.23%   8.25%   8.26%   8.27%   8.28%
      300%               30%           1.69%   8.24%   8.26%   8.28%   8.28%
      400%               30%         (19.37)%  4.37%   8.27%   8.27%   8.28%
</TABLE>

                                      S-59





<PAGE>

                             CLASS M-3 CERTIFICATES

<TABLE>
<CAPTION>
                                       PERCENTAGE OF THE PREPAYMENT ASSUMPTION
                    LOSS SEVERITY   ---------------------------------------------
PERCENTAGE OF SDA    PERCENTAGE        0%        50%       100%     150%    200%
-----------------    ----------        --        ---       ----     ----    ----
<S>                 <C>             <C>        <C>        <C>       <C>     <C>
        0%               N/A           8.90%      9.06%     9.18%   9.27%   9.34%
      100%               30%           8.90%      9.08%     9.19%   9.27%   9.34%
      200%               30%          (0.23)%     7.60%     9.19%   9.27%   9.34%
      300%               30%         (26.29)%    (3.38)%    6.20%   9.28%   9.35%
      400%               30%         (39.58)%   (29.63)%   (1.22)%  6.47%   9.35%
</TABLE>

    Each pre-tax yield to maturity set forth in the preceding tables was
calculated by determining the monthly discount rate which, when applied to the
assumed stream of cash flows to be paid on the Class M-2 Certificates or
Class M-3 Certificates, as applicable, would cause the discounted present value
of such assumed stream of cash flows to equal the assumed purchase price
referred to above, and converting such rate to a corporate bond equivalent
yield. Accrued interest is included in the assumed purchase price and is used in
computing the corporate bond equivalent yields shown. These yields do not take
into account the different interest rates at which investors may be able to
reinvest funds received by them as distributions on the Class M-2 Certificates
or Class M-3 Certificates, and thus do not reflect the return on any investment
in the Class M-2 Certificates or Class M-3 Certificates when any reinvestment
rates other than the discount rates set forth in the preceding tables are
considered.

    The following table sets forth the amount of Realized Losses that would be
incurred with respect to the Certificates in the aggregate under each of the
scenarios in the preceding tables, expressed as a percentage of the aggregate
outstanding principal balance of the Mortgage Loans as of the Cut-off Date:

                           AGGREGATE REALIZED LOSSES

<TABLE>
<CAPTION>
                                     PERCENTAGE OF THE PREPAYMENT ASSUMPTION
                    LOSS SEVERITY   ------------------------------------------
PERCENTAGE OF SDA    PERCENTAGE       0%      50%      100%     150%     200%
-----------------    ----------       --      ---      ----     ----     ----
<S>                 <C>             <C>      <C>      <C>      <C>      <C>
      100%               30%        1.19%    0.82%    0.59%    0.43%    0.32%
      200%               30%        2.33%    1.61%    1.16%    0.85%    0.64%
      300%               30%        3.44%    2.38%    1.72%    1.26%    0.94%
      400%               30%        4.50%    3.12%    2.26%    1.67%    1.25%
</TABLE>

    Notwithstanding the assumed percentages of SDA, loss severity percentage and
prepayment rates reflected in the preceding table, it is highly unlikely that
the Mortgage Loans will be prepaid or that Realized Losses will be incurred
according to one particular pattern. For this reason, and because the timing of
cash flows is critical to determining yields, the actual pre-tax yields to
maturity on the Class M-2 Certificates and Class M-3 Certificates are likely to
differ from those shown in the tables. There can be no assurance that the
Mortgage Loans will prepay at any particular rate or that Realized Losses will
be incurred at any particular level or that the yield on the Class M-2
Certificates or Class M-3 Certificates will conform to the yields described
herein. Moreover, the various remaining terms to maturity and Mortgage Rates of
the Mortgage Loans could produce slower or faster principal distributions than
indicated in the preceding tables at the various constant percentages of the
Prepayment Assumption specified, even if the weighted average remaining term to
maturity and weighted average Mortgage Rate of the Mortgage Loans are as
assumed.

    Investors are urged to make their investment decisions based on their
determinations as to anticipated rates of prepayment and Realized Losses under a
variety of scenarios. Investors in the Class M-2 Certificates and particularly
in the Class M-3 Certificates should fully consider the risk that Realized
Losses on the Mortgage Loans could result in the failure of such investors to
recover fully their investments. For additional considerations relating to the
yield on the Certificates, see 'Yield Considerations' and 'Maturity and
Prepayment Considerations' in the Prospectus.

ADDITIONAL YIELD CONSIDERATIONS APPLICABLE SOLELY TO THE RESIDUAL CERTIFICATES

    The Residual Certificateholders' after-tax rate of return on their Residual
Certificates will reflect their pre-tax rate of return, reduced by the taxes
required to be paid with respect to the Residual Certificates. Holders of
Residual Certificates may have tax liabilities with respect to their Residual
Certificates during the early years of

                                      S-60





<PAGE>

the Trust's term that substantially exceed any distributions payable thereon
during any such period. In addition, holders of Residual Certificates may have
tax liabilities with respect to their Residual Certificates the present value of
which substantially exceeds the present value of distributions payable thereon
and of any tax benefits that may arise with respect thereto. Accordingly, the
after-tax rate of return on the Residual Certificates may be negative or may
otherwise be significantly adversely affected. The timing and amount of taxable
income attributable to the Residual Certificates will depend on, among other
things, the timing and amounts of prepayments and losses experienced with
respect to the Mortgage Pool.

    The Residual Certificateholders should consult their tax advisors as to the
effect of taxes and the receipt of any payments made to such holders in
connection with the purchase of the Residual Certificates on after-tax rates of
return on the Residual Certificates. See 'Certain Federal Income Tax
Consequences' herein and in the Prospectus.

                        POOLING AND SERVICING AGREEMENT

GENERAL

    The Certificates will be issued pursuant to a Series Supplement, dated as of
August 1, 2000, to the Standard Terms of Pooling and Servicing Agreement
(collectively, the 'POOLING AND SERVICING AGREEMENT') dated as of December 1,
1999, among the Depositor, the Master Servicer, and Bankers Trust Company, as
Trustee. Reference is made to the Prospectus for important information in
addition to that set forth herein regarding the terms and conditions of the
Pooling and Servicing Agreement and the Offered Certificates. The Trustee will
appoint Wells Fargo Bank Minnesota, N.A. to serve as Custodian in connection
with the Certificates. The Offered Certificates will be transferable and
exchangeable at the corporate trust office of the Trustee, which will serve as
Certificate Registrar and Paying Agent. The Depositor will provide a prospective
or actual Certificateholder, without charge, on written request, a copy (without
exhibits) of the Pooling and Servicing Agreement. Requests should be addressed
to the President, Residential Accredit Loans, Inc., 8400 Normandale Lake
Boulevard, Suite 600, Minneapolis, Minnesota 55437. Pursuant to the Pooling and
Servicing Agreement, transfers of Residual Certificates are prohibited to any
non-United States person. Transfers of certain of the Certificates, including
the Residual Certificates, are also subject to additional transfer restrictions
as set forth in the Pooling and Servicing Agreement. See 'Certain Federal Income
Tax Consequences' herein and 'Certain Federal Income Tax Consequences --
REMICs -- Tax and Restrictions on Transfers of REMIC Residual Certificates to
Certain Organizations' and ' -- Taxation of Owners of REMIC Residual
Certificates -- Noneconomic REMIC Residual Certificates' in the Prospectus.
In addition to the circumstances described in the Prospectus, the Depositor
may terminate the Trustee for cause under certain circumstances. See
'The Pooling and Servicing Agreement -- The Trustee' in the Prospectus.

THE MASTER SERVICER

    Residential Funding, an indirect wholly owned subsidiary of GMAC Mortgage
and an affiliate of the Depositor, will act as master servicer for the
Certificates pursuant to the Pooling and Servicing Agreement. For a general
description of Residential Funding and its activities, see 'Residential Funding
Corporation' in the Prospectus and 'Description of the Mortgage Pool --
Residential Funding' herein.

    The following tables set forth certain information concerning the
delinquency experience (including pending foreclosures) on one- to four-family
residential mortgage loans that generally complied with Residential Funding's
Expanded Criteria Mortgage Program at the time of purchase by Residential
Funding and were being master serviced by Residential Funding on December 31,
1998, December 31, 1999 and June 30, 2000. As used herein, a loan is considered
to be '30 to 59 days' or '30 or more days' delinquent when a payment due on any
due date remains unpaid as of the close of business on the last business day
immediately prior to the next following monthly due date. The determination as
to whether a loan falls into this category is made as of the close of business
on the last business day of each month. Delinquency information presented herein
as of the Cut-off Date is determined and prepared as of the close of business on
the last business day immediately prior to the Cut-off Date.

                                      S-61





<PAGE>

          EXPANDED CRITERIA MORTGAGE PROGRAM DELINQUENCY EXPERIENCE(1)

<TABLE>
<CAPTION>
                                 AT DECEMBER 31, 1998     AT DECEMBER 31, 1999        AT JUNE 30, 2000
                                ----------------------   -----------------------   -----------------------
                                 BY NO.     BY DOLLAR     BY NO.      BY DOLLAR     BY NO.      BY DOLLAR
                                   OF       AMOUNT OF       OF        AMOUNT OF       OF        AMOUNT OF
                                  LOANS       LOANS        LOANS        LOANS        LOANS        LOANS
                                  -----       -----        -----        -----        -----        -----
                                  (DOLLAR AMOUNTS IN       (DOLLAR AMOUNTS IN        (DOLLAR AMOUNTS IN
                                      THOUSANDS)               THOUSANDS)                THOUSANDS)
<S>                             <C>         <C>          <C>         <C>           <C>         <C>
Total Loan Portfolio..........   76,924     $8,429,618    92,149     $10,513,716    99,577     $11,565,698
Period of Delinquency
    30 to 59 days.............    1,540        174,003     1,602         192,517     1,671         197,424
    60 to 89 days.............      246         30,876       236          28,610       276          36,637
    90 days or more(2)........      187         22,627       307          35,045       386          47,624
Foreclosures Pending..........      189         25,594       273          32,685       312          36,662
                                 ------     ----------    ------     -----------    ------     -----------
Total Delinquent Loans........    2,162     $  253,101     2,418     $   288,858     2,645     $   318,346
                                 ------     ----------    ------     -----------    ------     -----------
                                 ------     ----------    ------     -----------    ------     -----------
Percent of Loan Portfolio.....    2.811%         3.003%    2.624%          2.747%    2.656%          2.753%
</TABLE>
---------
(1) The table relates only to the mortgage loans referred to above.
(2) Does not include foreclosures pending.

      EXPANDED CRITERIA MORTGAGE PROGRAM REDUCED DOCUMENTATION DELINQUENCY
                                 EXPERIENCE(1)

<TABLE>
<CAPTION>
                                 AT DECEMBER 31, 1998     AT DECEMBER 31, 1999       AT JUNE 30, 2000
                                ----------------------   ----------------------   ----------------------
                                 BY NO.     BY DOLLAR     BY NO.     BY DOLLAR     BY NO.     BY DOLLAR
                                   OF       AMOUNT OF       OF       AMOUNT OF       OF       AMOUNT OF
                                  LOANS       LOANS        LOANS       LOANS        LOANS       LOANS
                                  -----       -----        -----       -----        -----       -----
                                  (DOLLAR AMOUNTS IN       (DOLLAR AMOUNTS IN       (DOLLAR AMOUNTS IN
                                      THOUSANDS)               THOUSANDS)               THOUSANDS)
<S>                             <C>         <C>          <C>         <C>          <C>         <C>
Total Loan Portfolio..........   30,537     $3,992,586    37,066     $5,021,100    40,885     $5,591,408
Period of Delinquency
    30 to 59 days.............      475         65,878       573         83,679       599         83,096
    60 to 89 days.............       88         13,991        65         11,033        89         13,586
    90 days or more(2)........       53          8,349        77         13,377       114         18,733
Foreclosures Pending..........       73         12,204        80         12,263        78         13,392
                                 ------     ----------    ------     ----------    ------     ----------
Total Delinquent Loans........      689     $  100,422       795     $  120,353       880     $  128,806
                                 ------     ----------    ------     ----------    ------     ----------
                                 ------     ----------    ------     ----------    ------     ----------
Percent of Loan Portfolio.....    2.256%         2.515%    2.145%         2.397%    2.152%         2.304%
</TABLE>
---------
(1) The table relates only to the mortgage loans referred to above.
(2) Does not include foreclosures pending.

    There can be no assurance that the delinquency and foreclosure experience
set forth above will be representative of the results that may be experienced
with respect to the Mortgage Loans.

SERVICING AND OTHER COMPENSATION AND PAYMENT OF EXPENSES

    The Servicing Fees for each Mortgage Loan are payable out of the interest
payments on such Mortgage Loan. The Servicing Fees in respect of each Mortgage
Loan will be at least 0.28% per annum and not more than 0.71% per annum of the
outstanding principal balance of such Mortgage Loan with a weighted average
Servicing Fee of approximately 0.3347% per annum. The Servicing Fees consist of
(a) servicing compensation payable to the Master Servicer in respect of its
master servicing activities and (b) subservicing and other related compensation
payable to the Subservicer (including such compensation paid to the Master
Servicer as the direct servicer of a Mortgage Loan for which there is no
Subservicer). The primary compensation to be paid to the Master Servicer in
respect of its master servicing activities will be at least 0.03% per annum and
not more than 0.08% per annum of the outstanding principal balance of each
Mortgage Loan, with a weighted average master servicing compensation of
approximately 0.079% per annum. As described in the Prospectus, a Subservicer is
entitled to servicing compensation in a minimum amount equal to 0.25% per annum
of the outstanding principal balance of each Mortgage Loan serviced by it. The
Master Servicer is obligated to pay certain ongoing expenses associated with the
Trust and incurred by the Master Servicer in connection with its
responsibilities under the

                                      S-62





<PAGE>

Pooling and Servicing Agreement. See 'Description of the Certificates -- Spread'
and ' - Servicing and Administration of Mortgage Collateral -- Servicing
Compensation and Payment of Expenses' in the Prospectus for information
regarding other possible compensation to the Master Servicer and Subservicers
and for information regarding expenses payable by the Master Servicer.

VOTING RIGHTS

    Certain actions specified in the Prospectus that may be taken by holders of
Certificates evidencing a specified percentage of all undivided interests in the
Trust may be taken by holders of Certificates entitled in the aggregate to such
percentage of the Voting Rights. 97% of all Voting Rights will be allocated
among all holders of the Certificates (other than the Interest Only Certificates
and Residual Certificates) in proportion to their then outstanding Certificate
Principal Balances, 1% of all Voting Rights will be allocated among the holders
of the Fixed Strip Certificates, 1% of all Voting Rights will be allocated among
the holders of the Variable Strip Certificates, 0.5% of all Voting Rights will
be allocated among the holders of the Class R-I Certificates and 0.5% of all
Voting Rights will be allocated among the holders of the Class R-II
Certificates, in proportion to the Percentage Interests evidenced by their
respective Certificates. The Pooling and Servicing Agreement will be subject to
amendment without the consent of the holders of the Residual Certificates in
certain circumstances.

TERMINATION

    The circumstances under which the obligations created by the Pooling and
Servicing Agreement will terminate in respect of the Offered Certificates are
described in 'The Pooling and Servicing Agreement -- Termination; Retirement of
Certificates' in the Prospectus. The Master Servicer or the Depositor will have
the option, on any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than 10% of the aggregate principal
balance of the Mortgage Loans as of the Cut-off Date, either (i) to purchase all
remaining Mortgage Loans and other assets in the Trust, thereby effecting early
retirement of the Offered Certificates or (ii) to purchase, in whole but not in
part, the Certificates. Any such purchase of Mortgage Loans and other assets of
the Trust shall be made at a price equal to the sum of (a) 100% of the unpaid
principal balance of each Mortgage Loan (or the fair market value of the related
underlying Mortgaged Properties with respect to defaulted Mortgage Loans as to
which title to such Mortgaged Properties has been acquired if such fair market
value is less than such unpaid principal balance) (net of any unreimbursed
Advance attributable to principal) as of the date of repurchase plus
(b) accrued interest thereon at the Net Mortgage Rate to, but not including, the
first day of the month in which such repurchase price is distributed.
Distributions on the Certificates in respect of any such optional termination
will be paid, first, to the Senior Certificates, second, to the Class M
Certificates in the order of their payment priority and, third, to the Class B
Certificates. The proceeds of any such distribution may not be sufficient to
distribute the full amount to each class of Certificates if the purchase price
is based in part on the fair market value of the underlying Mortgaged Property
and such fair market value is less than 100% of the unpaid principal balance of
the related Mortgage Loan. Any such purchase of the Certificates will be made at
a price equal to 100% of the Certificate Principal Balance thereof plus (except
with respect to the Principal Only Certificates) interest thereon (or with
respect to the Interest Only Certificates, on the related Notional Amount
thereof) for the immediately preceding Interest Accrual Period at the
then-applicable Pass-Through Rate and any previously unpaid Accrued Certificate
Interest. Upon the purchase of such Certificates or at any time thereafter, at
the option of the Master Servicer or the Depositor, the Mortgage Loans may be
sold, thereby effecting a retirement of the Certificates and the termination of
the Trust, or the Certificates so purchased may be held or resold by the Master
Servicer or the Depositor.

    Upon presentation and surrender of the Offered Certificates in connection
with the termination of the Trust or a purchase of Certificates under the
circumstances described above, the holders of the Offered Certificates will
receive an amount equal to the Certificate Principal Balance of such class plus
interest thereon for the immediately preceding Interest Accrual Period at the
then-applicable Pass-Through Rate (or, with respect to the Interest Only
Certificates, interest for the immediately preceding Interest Accrual Period on
the related Notional Amount thereof), plus any previously unpaid Accrued
Certificate Interest (reduced, as described above, in the case of the
termination of the Trust resulting from a purchase of all the assets of the
Trust).

                                      S-63





<PAGE>

                    CERTAIN FEDERAL INCOME TAX CONSEQUENCES

    Upon the issuance of the Offered Certificates, Orrick, Herrington &
Sutcliffe LLP, counsel to the Depositor, will deliver its opinion generally to
the effect that, assuming compliance with all provisions of the Pooling and
Servicing Agreement, for federal income tax purposes, REMIC I and REMIC II will
each qualify as a REMIC under the Code.

    For federal income tax purposes, (a) the Class R-I Certificates will
constitute the sole class of 'residual interests' in REMIC I, (b) the
Class R-II Certificates will constitute the sole class of 'residual interests'
in REMIC II, and (c) each class of Senior Certificates (other than the Residual
Certificates), the Class M Certificates and Class B Certificates will represent
ownership of 'regular interests' in REMIC II and will generally be treated as
debt instruments of the REMIC II. See 'Certain Federal Income Tax Consequences
-- REMICs' in the Prospectus.

    For federal income tax reporting purposes, the Class HJ, Class A-5,
Class A-P, Class A-V and Class M-3 Certificates will be treated as having been
issued with original issue discount. The Class A-4, Class A-10, Class M-1 and
Class M-2 Certificates may be treated as having been issued with original issue
discount. All other classes of Offered Certificates will not be treated as
having been issued with original issue discount for federal income tax reporting
purposes. The prepayment assumption that will be used in determining the rate of
accrual of original issue discount, market discount and premium, if any, for
federal income tax purposes will be based on the assumption that, subsequent to
the date of any determination the Mortgage Loans will prepay at a rate equal to
100% of the Prepayment Assumption. No representation is made that the Mortgage
Loans will prepay at that rate or at any other rate. See 'Certain Federal Income
Tax Consequences -- General' and ' -- REMICs -- Taxation of Owners of REMIC
Regular Certificates -- Original Issue Discount' in the Prospectus.

    The OID Regulations suggest that original issue discount with respect to
securities such as the Variable Strip Certificates that represent multiple
uncertificated REMIC regular interests, in which ownership interests will be
issued simultaneously to the same buyer, should be computed on an aggregate
method. In the absence of further guidance from the IRS, original issue discount
with respect to the uncertificated regular interests represented by the Variable
Strip Certificates will be reported to the IRS and the Certificateholders on an
aggregate method based on a single overall constant yield and the prepayment
assumption stated above, treating all such uncertificated regular interests as a
single debt instrument as set forth in the OID Regulations.

    If the method for computing original issue discount described in the
Prospectus results in a negative amount for any period with respect to a
Certificateholder, the amount of original issue discount allocable to such
period would be zero and such Certificateholder will be permitted to offset such
negative amount only against future original issue discount (if any)
attributable to such Certificates.

    In certain circumstances OID Regulations permit the holder of a debt
instrument to recognize original issue discount under a method that differs from
that used by the issuer. Accordingly, it is possible that the holder of a
Certificate may be able to select a method for recognizing original issue
discount that differs from that used by the entity identified as the REMIC
Administrator in the Pooling and Servicing Agreement (the 'REMIC ADMINISTRATOR')
in preparing reports to the Certificateholders and the IRS.

    Certain classes of the Offered Certificates may be treated for federal
income tax purposes as having been issued at a premium. Whether any holder of
such a class of Certificates will be treated as holding a certificate with
amortizable bond premium will depend on such Certificateholder's purchase price
and the distributions remaining to be made on such Certificate at the time of
its acquisition by such Certificateholder. Holders of such classes of
Certificates should consult their tax advisors regarding the possibility of
making an election to amortize such premium. See 'Certain Federal Income Tax
Consequences -- REMICs -- Taxation of Owners of REMIC Regular Certificates' and
' -- Premium' in the Prospectus.

    The Offered Certificates will be treated as assets described in
Section 7701(a)(19)(C) of the Code and 'real estate assets' under
Section 856(c)(4)(A) of the Code generally in the same proportion that the
assets of the Trust would be so treated. In addition, interest on the Offered
Certificates will be treated as 'interest on obligations secured by mortgages on
real property' under Section 856(c)(3)(B) of the Code generally to the extent
that such Offered Certificates are treated as 'real estate assets' under
Section 856(c)(4)(A) of the Code. Moreover, the Offered Certificates (other than
the Residual Certificates) will be 'qualified mortgages' within the meaning of
Section 860G(a)(3) of the Code if transferred to another REMIC on its startup
day in exchange for a regular or residual interest therein. However, prospective
investors in Offered Certificates that will be generally

                                      S-64





<PAGE>

treated as assets described in Section 860G(a)(3) of the Code should note that,
notwithstanding such treatment, any repurchase of such a Certificate pursuant to
the right of the Master Servicer or the Depositor to repurchase such Offered
Certificates may adversely affect any REMIC that holds such Offered Certificates
if such repurchase is made under circumstances giving rise to a Prohibited
Transaction Tax. See 'Pooling and Servicing Agreement -- Termination' herein and
'Certain Federal Income Tax Consequences -- REMICs -- Characterization of
Investments in REMIC Certificates' in the Prospectus.

    For further information regarding federal income tax consequences of
investing in the Offered Certificates, see 'Certain Federal Income Tax
Consequences -- REMICs' in the Prospectus.

SPECIAL TAX CONSIDERATIONS APPLICABLE TO RESIDUAL CERTIFICATES

    The IRS has issued REMIC Regulations under the provisions of the Code that
significantly affect holders of Residual Certificates. The REMIC Regulations
impose restrictions on the transfer or acquisition of certain residual
interests, including the Residual Certificates. In addition, the REMIC
Regulations contain restrictions that apply to the transfer of 'noneconomic'
residual interests to United States persons. The Pooling and Servicing Agreement
includes certain other provisions regarding the transfer of Residual
Certificates, including (i) the requirement that any transferee of a Residual
Certificate provide an affidavit representing that such transferee (a) is not a
'disqualified organization,' (b) is not acquiring the Residual Certificate on
behalf of a 'disqualified organization' and (c) will maintain such status and
will obtain a similar affidavit from any person to whom such transferee shall
subsequently transfer a Residual Certificate, (ii) a provision that any transfer
of a Residual Certificate to a 'disqualified person' shall be null and void and
(iii) a grant to the Master Servicer of the right, without notice to the holder
or any prior holder, to sell to a purchaser of its choice any Residual
Certificate that shall become owned by a 'disqualified organization' despite (i)
and (ii) above. In addition, pursuant to the Pooling and Servicing Agreement,
the Residual Certificates may not be transferred to non-United States persons.

    Excess inclusions are expected to be equal to all or virtually all of the
taxable income includible by holders of the Residual Certificates. See 'Certain
Federal Income Tax Consequences -- REMICs -- Taxation of Owners of REMIC
Residual Certificates -- Excess Inclusions' in the Prospectus.

    The REMIC Regulations also provide that a transfer to a United States person
of 'noneconomic' residual interests will be disregarded for all federal income
tax purposes, and that the purported transferor of 'noneconomic' residual
interests will continue to remain liable for any taxes due with respect to the
income on such residual interests, unless 'no significant purpose of the
transfer was to impede the assessment or collection of tax.' Based on the REMIC
Regulations, the Residual Certificates may constitute noneconomic residual
interests during some or all of their terms for purposes of the REMIC
Regulations and, accordingly, unless no significant purpose of a transfer is to
impede the assessment or collection of tax, transfers of the Residual
Certificates may be disregarded and purported transferors may remain liable for
any taxes due with respect to the income on the Residual Certificates. All
transfers of the Residual Certificates will be subject to certain restrictions
under the terms of the Pooling and Servicing Agreement that are intended to
reduce the possibility of any such transfer being disregarded to the extent that
the Residual Certificates constitute noneconomic residual interests. The IRS has
issued proposed changes to the REMIC regulations that would add to the
conditions necessary to assure that a transfer of a noneconomic residual
interest would be respected. The proposed additional condition would require
that the amount received by the transferee be no less on a present value basis
than the present value of the net tax detriment attributable to holding residual
interest reduced by the present value of the projected payments to be received
on the residual interest. The change is proposed to be effective for transfers
of residual interests occurring after February 4, 2000. See 'Certain Federal
Income Tax Consequences -- REMICs -- Taxation of Owners of REMIC Residual
Certificates -- Noneconomic REMIC Residual Certificates' in the Prospectus.

    The Class R-II Certificateholders may be required to report an amount of
taxable income with respect to the earlier accrual periods of the term of
REMIC II that significantly exceeds the amount of cash distributions received by
such Class R-II Certificateholders from the related REMIC with respect to such
periods. Furthermore, the tax on such income may exceed the cash distributions
with respect to such periods. Consequently, Class R-II Certificateholders should
have other sources of funds sufficient to pay any federal income taxes due in
the earlier years of REMIC II's term as a result of their ownership of the
Class R-II Certificates. In addition, the required inclusion of this amount of
taxable income during REMIC II's earlier

                                      S-65





<PAGE>

accrual periods and the deferral of corresponding tax losses or deductions until
later accrual periods or until the ultimate sale or disposition of a Class R-II
Certificate (or possibly later under the 'wash sale' rules of Section 1091 of
the Code) may cause the Class R-II Certificateholders' after-tax rate of return
to be zero or negative even if the Class R-II Certificateholders' pre-tax rate
of return is positive. That is, on a present value basis, the Class R-II
Certificateholders' resulting tax liabilities could substantially exceed the sum
of any tax benefits and the amount of any cash distributions on such Class R-II
Certificates over their life.

    An individual, trust or estate that holds (whether directly or indirectly
through certain pass-through entities) a Residual Certificate, particularly a
Class R-I Certificate, may have significant additional gross income with respect
to, but may be subject to limitations on the deductibility of, servicing and
trustee's fees and other administrative expenses properly allocable to the
related REMIC in computing such Certificateholder's regular tax liability and
will not be able to deduct such fees or expenses to any extent in computing such
Certificateholder's alternative minimum tax liability. See 'Certain Federal
Income Tax Consequences -- REMICs -- Taxation of Owners of REMIC Residual
Certificates -- Possible Pass-Through of Miscellaneous Itemized Deductions' in
the Prospectus. Such expenses will be allocated for federal income tax
information reporting purposes entirely to the Class R-I Certificates and not
the Class R-II Certificates. However, it is possible that the IRS may require
all or some portion of such fees and expenses to be allocable to the Class R-II
Certificates. See 'Certain Federal Income Tax Consequences -- REMICs -- Taxation
of Owners of REMIC Residual Certificates -- Possible Pass-Through of
Miscellaneous Itemized Deductions' in the Prospectus.

    Residential Funding will be designated as the 'tax matters person' with
respect to REMIC I and REMIC II as defined in the REMIC Provisions, and in
connection therewith will be required to hold not less than 0.01% of each of the
Class R-I Certificates and Class R-II Certificates.

    Purchasers of the Residual Certificates are strongly advised to consult
their tax advisors as to the economic and tax consequences of investment in such
Residual Certificates.

    For further information regarding the federal income tax consequences of
investing in the Residual Certificates, see 'Certain Yield and Prepayment
Considerations -- Additional Yield Considerations Applicable Solely to the
Residual Certificates' herein and 'Certain Federal Income Tax Consequences --
REMICs -- Taxation of Owners of REMIC Residual Certificates' in the Prospectus.

NEW WITHHOLDING REGULATIONS

    The Treasury Department has issued new regulations (the 'NEW REGULATIONS')
which make certain modifications to the withholding, backup withholding and
information reporting rules described above. The New Regulations attempt to
unify certification requirements and modify reliance standards. The New
Regulations will generally 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.

                             METHOD OF DISTRIBUTION

    Subject to the terms and conditions set forth in an Underwriting Agreement,
dated August 24, 2000 (the 'UNDERWRITING AGREEMENT'), Salomon Smith Barney Inc.
(the 'UNDERWRITER') has agreed to purchase and the Depositor has agreed to sell
the Senior Certificates (other than the Principal Only Certificates and Variable
Strip Certificates) and the Class M Certificates (the 'UNDERWRITTEN
CERTIFICATES'), except that a de minimis portion of the Residual Certificates
will be retained by Residential Funding, and such portion is not offered hereby.
It is expected that delivery of the Underwritten Certificates (other than the
Residual Certificates) will be made only in book-entry form through the Same Day
Funds Settlement System of DTC, and that the delivery of the underwritten
Residual Certificates will be made at the offices of the Underwriter, New York,
New York, on or about August 30, 2000, against payment therefor in immediately
available funds.

    In connection with the Underwritten Certificates, the Underwriter has
agreed, subject to the terms and conditions set forth in the Underwriting
Agreement, to purchase all of the Underwritten Certificates if any of the
Underwritten Certificates are purchased thereby.

    The Underwriting Agreement provides that the obligation of the Underwriter
to pay for and accept delivery of the Underwritten Certificates is subject to,
among other things, the receipt of certain legal opinions and to the conditions,
among others, that no stop order suspending the effectiveness of the Depositor's
Registration

                                      S-66





<PAGE>

Statement shall be in effect, and that no proceedings for such purpose shall be
pending before or threatened by the Securities and Exchange Commission.

    The distribution of the Underwritten Certificates by the 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 sale. Proceeds to the
Depositor from the sale of the Underwritten Certificates, before deducting
expenses payable by the Depositor, will be approximately 99.44% of the aggregate
Certificate Principal Balance of the Underwritten Certificates plus accrued
interest thereon from the Cut-off Date. The Underwriter may effect such
transactions by selling the Underwritten Certificates to or through dealers, and
such dealers may receive compensation in the form of underwriting discounts,
concessions or commissions from the underwriters for whom they act as agent. In
connection with the sale of the Underwritten Certificates, the Underwriter may
be deemed to have received compensation from the Depositor in the form of
underwriting compensation. The Underwriter and any dealers that participate with
the Underwriter in the distribution of the Underwritten Certificates may be
deemed to be underwriters and any profit on the resale of the Underwritten
Certificates positioned by them may be deemed to be underwriting discounts and
commissions under the Securities Act of 1933, as amended.

    The Underwriting Agreement provides that the Depositor will indemnify the
Underwriter, and that under limited circumstances the Underwriter will indemnify
the Depositor, against certain civil liabilities under the Securities Act of
1933, as amended, or contribute to payments required to be made in respect
thereof.

    The Principal Only and Variable Strip Certificates may be offered by the
Depositor from time to time directly or through an underwriter or agent in one
or more negotiated transactions, or otherwise, at varying prices to be
determined at the time of sale. Proceeds to the Depositor from any sale of the
Principal Only and Variable Strip Certificates will equal the purchase price
paid by the purchaser thereof, net of any expenses payable by the Depositor and
any compensation payable to any such underwriter or agent.

    There is currently no secondary market for the Offered Certificates. The
Underwriter intends to make a secondary market in the Underwritten Certificates
but is not obligated to do so. There can be no assurance that a secondary market
for the Offered Certificates will develop or, if it does develop, that it will
continue. The Offered Certificates will not be listed on any securities
exchange.

    The primary source of information available to investors concerning the
Offered Certificates will be the monthly statements discussed in the Prospectus
under 'Description of the Certificates -- Reports to Certificateholders,' which
will include information as to the outstanding principal balance of the Offered
Certificates. There can be no assurance that any additional information
regarding the Offered Certificates will 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 generally available on an
ongoing basis. The limited nature of such information regarding the Offered
Certificates may adversely affect the liquidity of the Offered Certificates,
even if a secondary market for the Offered Certificates becomes available.

                                 LEGAL OPINIONS

    Certain legal matters relating to the Certificates will be passed upon for
the Depositor by Orrick, Herrington & Sutcliffe LLP, New York, New York and for
the Underwriter by Brown & Wood LLP, New York, New York.

                                    RATINGS

    It is a condition to the issuance of the Senior Certificates that they be
rated 'AAA' by Standard & Poor's, a division of The McGraw-Hill Companies, Inc.
('STANDARD & POOR'S') and Fitch, Inc. ('FITCH'). It is a condition to the
issuance of the Class M-1, Class M-2 and Class M-3 Certificates that they be
rated not lower than 'AA,' 'A' and 'BBB,' respectively, by Fitch.

    The ratings assigned by Standard & Poor's to mortgage pass-through
certificates address the likelihood of the receipt by Certificateholders of
payments required under the Pooling and Servicing Agreement. Standard & Poor's
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 in the mortgage pool is adequate to make payments
required under the Certificates. Standard & Poor's rating on the Certificates
does not, however,

                                      S-67





<PAGE>

constitute a statement regarding frequency of prepayments on the mortgages. See
'Certain Yield and Prepayment Considerations' herein.

    The ratings assigned by Fitch to mortgage pass-through certificates also
address the likelihood of the receipt by Certificateholders of all distributions
to which such Certificateholders are entitled. The rating process addresses the
structural and legal aspects associated with the Certificates, including the
nature of the underlying mortgage loans. The ratings assigned to mortgage
pass-through certificates do not represent any assessment of the likelihood or
rate of principal prepayments. The ratings do not address the possibility that
Certificateholders might suffer a lower than anticipated yield. The rating on
the Principal Only Certificates only addresses the return of the Certificate
Principal Balance thereof. The rating on the Residual Certificates only
addresses the return of the Certificate Principal Balance thereof and interest
thereon at the Pass-Through Rate.

    The Depositor has not requested a rating on the Senior Certificates by any
rating agency other than Standard & Poor's and Fitch or on the Class M
Certificates by any rating agency other than Fitch. However, there can be no
assurance as to whether any other rating agency will rate the Senior
Certificates or Class M Certificates, or, if it does, what rating would be
assigned by any such other rating agency. A rating on the Certificates by
another rating agency, if assigned at all, may be lower than the ratings
assigned to the Senior Certificates by Standard & Poor's and Fitch and the
Class M Certificates by Fitch.

    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. The ratings of the Interest Only Certificates do not
address the possibility that the holders of such Certificates may fail to fully
recover their initial investments. In the event that the ratings initially
assigned to the Offered Certificates are subsequently lowered for any reason, no
person or entity is obligated to provide any additional support or credit
enhancement with respect to the Offered Certificates.

                                LEGAL INVESTMENT

    The Class A Certificates, Residual Certificates and Class M-1 Certificates
will constitute 'mortgage related securities' for purposes of SMMEA so long as
they are rated in at least the second highest rating category by one of the
Rating Agencies, and, as such, are legal investments for certain entities to the
extent provided in SMMEA. SMMEA provides, however, that states could override
its provisions on legal investment and restrict or condition investment in
mortgage related securities by taking statutory action on or prior to
October 3, 1991. Certain states have enacted legislation which overrides the
preemption provisions of SMMEA. The Class M-2 Certificates and Class M-3
Certificates will not constitute 'mortgage related securities' for purposes of
SMMEA.

    The Depositor makes no representations as to the proper characterization of
any class of the Offered Certificates for legal investment or other purposes, or
as to the ability of particular investors to purchase any class of the Offered
Certificates under applicable legal investment restrictions. These uncertainties
may adversely affect the liquidity of any class of Offered Certificates.
Accordingly, 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 any class of the Offered Certificates constitutes a
legal investment or is subject to investment, capital or other restrictions.

    See 'Legal Investment Matters' in the Prospectus.

                              ERISA CONSIDERATIONS

    Any Plan, any insurance company (whether through its general or separate
accounts) or any other person investing 'Plan Assets' of any Plan, as defined
under 'ERISA Considerations -- Plan Asset Regulations' in the Prospectus, should
carefully review with its legal advisors whether the purchase or holding of
Offered Certificates could give rise to a transaction prohibited or not
otherwise permissible under ERISA or Section 4975 of the Code. The purchase or
holding of the Offered Certificates (other than the Class M Certificates or
Residual Certificates) by or on behalf of, or with 'Plan Assets' of, a Plan may
qualify for exemptive relief under the Exemption, as described under 'ERISA
Considerations -- Prohibited Transaction Exemptions' in the Prospectus. However,
the Exemption contains a number of conditions which must be met

                                      S-68





<PAGE>

for the Exemption to apply, including the requirement that any such 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, as amended.

    Insurance companies contemplating the investment of general account assets
in the Offered Certificates should consult with their legal advisors with
respect to the applicability of Section 401(c) of ERISA, as described under
'ERISA Considerations -- Insurance Company General Accounts' in the Prospectus.
The DOL issued final regulations under Section 401(c) which were published in
the Federal Register on January 5, 2000, but these final regulations are
generally not applicable until July 5, 2001.

    Because the exemptive relief afforded by the Exemption (or any similar
exemption that might be available) will not likely apply to the purchase, sale
or holding of the Class M Certificates, no Class M Certificate (or any interest
therein) may be acquired or held by any Plan, any trustee or other person acting
on behalf of any Plan, or any other person using 'Plan Assets' to effect such
acquisition or holding (each, a 'Plan Investor') unless (i) such acquirer or
holder is an insurance company, (ii) the source of funds used to acquire or hold
such Certificate (or interest therein) is an 'insurance company general account'
(as defined in U.S. Department of Labor Prohibited Transaction Class Exemption
('PTCE') 95-60), and (iii) the conditions set forth in Sections I and III of
PTCE 95-60 have been satisfied. Each Beneficial Owner of a Class M Certificate
(or any interest therein) shall be deemed to have represented, by virtue of its
acquisition or holding of such Certificate (or interest therein), that either
(i) it is not a Plan Investor or (ii) (1) it is an insurance company, (2) the
source of funds used to acquire or hold such Certificate (or interest therein)
is an 'insurance company general account' (as such term is defined in
PTCE 95-60), and (3) the conditions set forth in Sections I and III of
PTCE 95-60 have been satisfied.

    If any Class M Certificate (or any interest therein) is acquired or held in
violation of the provisions of the preceding paragraph, the next preceding
permitted Beneficial Owner will be treated as the Beneficial Owner of such
Class M Certificate, retroactive to the date of transfer to the purported
Beneficial Owner. Any purported Beneficial Owner whose acquisition or holding of
any such Certificate (or interest therein) was effected in violation of the
provisions of the preceding paragraph shall indemnify and hold harmless the
Depositor, the Trustee, the Master Servicer, any Subservicer and the Trust from
and against any and all liabilities, claims, costs or expenses incurred by such
parties as a result of such acquisition or holding.

    Investors in the Class M Certificates are urged to obtain from a transferee
of any such Certificate a certification of such transferee's eligibility to
purchase such Certificates in the form of the representation letter attached
hereto as Annex I.

    Because the exemptive relief afforded by the Exemption (or any similar
exemption that might be available) also will not likely apply to the purchase,
sale or holding of the Residual Certificates, transfers of such Certificates to
any Plan Investor will not be registered by the Trustee unless the transferee
provides the Depositor, the Trustee and the Master Servicer with an opinion of
counsel satisfactory to the Depositor, the Trustee and the Master Servicer,
which opinion will not be at the expense of the Depositor, the Trustee or the
Master Servicer, that the purchase of such Certificates by or on behalf of such
Plan Investor is permissible under applicable law, will not constitute or result
in a non-exempt prohibited transaction under ERISA or Section 4975 of the Code
and will not subject the Depositor, the Trustee or the Master Servicer to any
obligation in addition to those undertaken in the Pooling and Servicing
Agreement.

    Any fiduciary or other investor of Plan Assets that proposes to acquire or
hold the Offered Certificates on behalf of or with Plan Assets of any Plan
should consult with its counsel with respect to: (i) whether the specific and
general conditions and the other requirements in the Exemption would be
satisfied, or whether any other prohibited transaction exemption would apply,
and (ii) the potential applicability of the general fiduciary responsibility
provisions of ERISA and the prohibited transaction provisions of ERISA and
Section 4975 of the Code to the proposed investment. See 'ERISA Considerations'
in the Prospectus.

    The sale of any of the Offered Certificates to a Plan is in no respect a
representation by the Depositor or the Underwriter that such an investment meets
all relevant legal requirements with respect to investments by Plans generally
or any particular Plan, or that such an investment is appropriate for Plans
generally or any particular Plan.

                                      S-69








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<PAGE>

                                                                         ANNEX I

                          ERISA REPRESENTATION LETTER

                                       [date]

Residential Funding Corporation
8400 Normandale Lake Boulevard, Suite 600
Minneapolis, Minnesota 55437

Residential Accredit Loans, Inc.
8400 Normandale Lake Boulevard, Suite 600
Minneapolis, Minnesota 55437

Bankers Trust Company
1761 East St. Andrew Place
Santa Ana, California 92705-4394

    Re: Residential Accredit Loans, Inc.
        Mortgage Pass-Through Certificates, Series 2000-QS9, Class M-

Dear Ladies and Gentlemen:

    [        ] (the 'Purchaser') intends to purchase from [        ] (the
'Seller') $[     ] initial Certificate Principal Balance of the above-referenced
certificates (the 'Certificates'), issued pursuant to the Series Supplement,
dated as of August 1, 2000, to the Standard Terms of Pooling and Servicing
Agreement (collectively, the 'Pooling and Servicing Agreement') dated as of
December 1, 1999, among Residential Accredit Loans, Inc., as seller (the
'Company'), Residential Funding Corporation, as master servicer (the 'Master
Servicer') and Bankers Trust Company, as trustee (the 'Trustee'). All terms used
herein and not otherwise defined shall have the meanings set forth in the
Pooling and Servicing Agreement.

    The Purchaser hereby certifies, represents and warrants to, and covenants
with the Company, the Trustee and the Master Servicer that, either:

        (a) The Purchaser is not an employee benefit or other plan subject to
    the prohibited transaction provisions of the Employee Retirement Income
    Security Act of 1974, as amended ('ERISA'), or Section 4975 of the Internal
    Revenue Code of 1986, as amended (a 'Plan'), or any other person (including
    an investment manager, a named fiduciary or a trustee of any Plan) acting,
    directly or indirectly, on behalf of or purchasing any Certificate with
    'plan assets' of any Plan within the meaning of the U.S. Department of Labor
    ('DOL') regulation at 29 C.F.R.'SS'2510.3-101; or

        (b) The Purchaser is an insurance company, the source of funds to be
    used by which to purchase the Certificates is an 'insurance company general
    account' (as such term is defined in DOL Prohibited Transaction Class
    Exemption ('PTCE') 95-60), and the conditions set forth in Sections I and
    III of PTCE 95-60 have been satisfied.

    In addition, the Purchaser hereby certifies, represents and warrants to, and
covenants with, the Company, the Trustee and the Master Servicer that the
Purchaser will not transfer the Certificates to any Plan or person unless such
Plan or person meets the requirements set forth in either (a) or (b) above.

                                          Very truly yours,

                                          By: __________________________________

                                          Name: ________________________________

                                          Title: _______________________________

                                      A-1









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<PAGE>



Prospectus

MORTGAGE ASSET-BACKED AND MANUFACTURED HOUSING CONTRACT PASS-THROUGH
CERTIFICATES

RESIDENTIAL ACCREDIT LOANS, INC.
Depositor

YOU SHOULD CAREFULLY CONSIDER THE RISK FACTORS DISCUSSED IN THE ACCOMPANYING
PROSPECTUS SUPPLEMENT UNDER THE HEADING 'RISK FACTORS.'

The certificates of any series offered by this prospectus and the accompanying
prospectus supplement will represent ownership interests only in the trust
created for such series and will not represent ownership interests in or
obligations of Residential Accredit Loans, Inc., Residential Funding Corporation
or any of their affiliates.

This prospectus may be used to offer and sell the certificates only if
accompanied by the related prospectus supplement.

The depositor may periodically establish trusts to issue certificates
representing interests in such trusts that consist primarily of certain mortgage
collateral as described in this prospectus and in the prospectus supplement. The
certificates will be issued in series and each series of certificates will
represent interests in a different trust established by the depositor.

OFFERED CERTIFICATES

The certificates in a series will represent interests in a trust and will be
paid only from the assets of that trust. The certificates may consist of
multiple classes of certificates, and, if so, each class may:

      receive a specified fixed or variable rate of interest;

      have a higher or lower priority relative to other classes in the series
      with respect to distributions of principal and/or interest from the trust
      and/or allocations of any losses;

      receive distributions of principal only or interest only; and

      have a specified form of credit enhancement.

You can find specific information regarding each class of offered certificates
in the related prospectus supplement.

MORTGAGE COLLATERAL

Each trust will consist primarily of one or more of the following types of
mortgage collateral grouped into one or more mortgage pools that are described
in detail in the prospectus supplement and include:

      mortgage loans or other similar security interests secured by first liens
      on one- to four-family residential properties;

      manufactured housing conditional sale contracts and installment sale
      contracts secured by manufactured homes;

      whole or partial participations in, or mortgage pass-through certificates
      representing interests in, mortgage loans or contracts; and

      mortgage securities issued or guaranteed by Ginnie Mae, Fannie Mae or
      Freddie Mac as described herein.

CREDIT ENHANCEMENT

If so specified in the related prospectus supplement, credit enhancement for a
series of securities may include any one or any combination of a financial
guaranty insurance policy, mortgage pool insurance policy, letter of credit,
bankruptcy bond, special hazard insurance policy, reserve fund or one or more
classes of subordinate certificates. In addition to or in lieu of the foregoing,
credit enhancement may be provided by means of overcollateralization of the
certificates, to the extent the principal balance of the mortgage loans is
greater than the principal balance of the certificates.

UNDERWRITING

The certificates may be offered to the public through different methods as
described in 'Methods of Distribution' in this Prospectus.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE CERTIFICATES OR DETERMINED THAT
THIS PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

March 24, 1999

<PAGE>

      IMPORTANT NOTICE ABOUT INFORMATION PRESENTED IN THIS PROSPECTUS AND
                       THE RELATED PROSPECTUS SUPPLEMENT

     We provide information to you about the certificates in two separate
documents that provide progressively more detail:

      this prospectus, which provides general information, some of which may not
      apply to your series of certificates; and

      the accompanying prospectus supplement, which describes the specific terms
      of your series of certificates.

IF THE DESCRIPTION OF YOUR CERTIFICATES IN THIS PROSPECTUS DIFFERS FROM THE
RELATED DESCRIPTION IN THE RELATED PROSPECTUS SUPPLEMENT, YOU SHOULD RELY ON THE
INFORMATION IN THE RELATED PROSPECTUS SUPPLEMENT.

You should rely only on the information provided in this prospectus and the
related prospectus supplement, including the information incorporated by
reference. See 'Additional Information,' 'Reports to Certificateholders' and
'Incorporation of Certain Information by Reference' in this Prospectus. You can
request information incorporated by reference from Residential Accredit Loans,
Inc. by calling us at (612) 832-7000 or writing to us at 8400 Normandale Lake
Boulevard, Suite 600, Minneapolis, Minnesota 55437. 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 do not claim the
accuracy of the information in this prospectus or the related prospectus
supplement as of any date other than the dates stated on their respective
covers.

You can find a listing of the pages where capitalized terms used in this
prospectus are defined under the caption 'Index of Principal Definitions'
beginning on page 96.

                           ------------------------

                                       2

<PAGE>
                 TABLE OF CONTENTS
<TABLE>
<CAPTION>
                                                  PAGE
                                                  ----
<S>                                               <C>
Introduction....................................    4
The Trusts......................................    4
     General....................................    4
     The Mortgage Loans.........................    5
     The Contracts..............................   13
     The Agency Securities......................   13
     Mortgage Collateral Sellers................   15
     Representations with Respect to Mortgage
       Collateral...............................   15
     Repurchases of Mortgage Collateral.........   16
     Limited Right of Substitution..............   17
Description of the Certificates.................   19
     General....................................   19
     Form of Certificates.......................   19
     Assignment of Mortgage Loans...............   21
     Assignment of Contracts....................   22
     Review of Mortgage Loan or Contract
       Documents................................   23
     Assignment of Agency Securities............   23
     Spread.....................................   23
     Payments on Mortgage Collateral............   24
     Withdrawals from the Custodial Account.....   26
     Distributions..............................   27
     Advances...................................   29
     Prepayment Interest Shortfalls.............   30
     Reports to Certificateholders..............   30
     Servicing and Administration of Mortgage
       Collateral...............................   31
     Realization Upon Defaulted Property........   35
Subordination...................................   37
     General....................................   37
     Overcollateralization......................   38
Description of Credit Enhancement...............   39
     General....................................   39
     Letters of Credit..........................   40
     Mortgage Pool Insurance Policies...........   40
     Special Hazard Insurance Policies..........   41
     Bankruptcy Bonds...........................   42
     Reserve Funds..............................   42
     Certificate Insurance Policies; Surety
       Bonds....................................   43
     Maintenance of Credit Enhancement..........   43
     Reduction or Substitution of Credit
       Enhancement..............................   44
Other Financial Obligations Related to the
     Certificates...............................   44
     Swaps and Yield Supplement Agreements......   44
     Purchase Obligations.......................   45
Insurance Policies on Mortgage Loans or
  Contracts.....................................   45
     Primary Mortgage Insurance Policies........   45
     Standard Hazard Insurance on Mortgaged
       Properties...............................   46
     Standard Hazard Insurance on Manufactured
       Homes....................................   47
     FHA Mortgage Insurance.....................   48
     VA Mortgage Guaranty.......................   48
The Depositor...................................   49
Residential Funding Corporation.................   49
The Pooling and Servicing Agreement.............   50
     Servicing and Administration...............   50
     Events of Default..........................   50
     Rights Upon Event of Default...............   50
     Amendment..................................   51
     Termination; Retirement of Certificates....   52
     The Trustee................................   53
Yield Considerations............................   53
Maturity And Prepayment Considerations..........   56
Certain Legal Aspects of Mortgage Loans and
  Contracts.....................................   60
     The Mortgage Loans.........................   60
     The Contracts..............................   67
     Environmental Legislation..................   69
     Soldiers' and Sailors' Civil Relief Act of
       1940.....................................   70
     Default Interest and Limitations on
       Prepayments..............................   71
     Forfeitures in Drug and RICO Proceedings...   71
     Negative Amortization Loans................   71
Certain Federal Income Tax Consequences.........   72
     General....................................   72
     REMICs.....................................   72
State and Other Tax Consequences................   87
ERISA Considerations............................   87
     Plan Asset Regulations.....................   88
     Prohibited Transaction Exemption...........   88
     Insurance Company General
       Accounts.................................   90
     Representation from Investing Plans........   91
     Tax-Exempt Investors.......................   91
     Consultation with Counsel..................   91
Legal Investment Matters........................   92
Use of Proceeds.................................   93
Methods of Distribution.........................   93
Legal Matters...................................   94
Financial Information...........................   94
Additional Information..........................   94
Reports to Certificateholders...................   95
Incorporation of Certain Information by
  Reference.....................................   95
Index of Principal Definitions..................   96
</TABLE>

<PAGE>
                                  INTRODUCTION

     The Mortgage Asset-Backed and Manufactured Housing Contract Pass-Through
Certificates (the 'CERTIFICATES') offered hereby may be sold from time to time
in series, as described in the related supplement to the Prospectus (each, a
'PROSPECTUS SUPPLEMENT'). Each series of Certificates will represent in the
aggregate the entire beneficial ownership interest, excluding any interest
retained by Residential Accredit Loans, Inc. (the 'DEPOSITOR') or any other
entity specified in the related Prospectus Supplement, in a trust consisting
primarily of a segregated pool of one- to four-family, residential first
mortgage loans (the 'MORTGAGE LOANS'), manufactured housing conditional sales
contracts and installment loan agreements (the 'CONTRACTS') or interests therein
(which may include Agency Securities) (collectively with the Mortgage Loans and
Contracts, the 'MORTGAGE COLLATERAL') acquired by the Depositor from one or more
affiliated or unaffiliated institutions. Each series of Certificates will be
issued pursuant to a pooling and servicing agreement (a 'POOLING AND SERVICING
AGREEMENT') or a trust agreement (each, a 'TRUST AGREEMENT') among the
Depositor, the trustee (the 'TRUSTEE') and master servicer, if any (the 'MASTER
SERVICER') or certificate administrator (the 'CERTIFICATE ADMINISTRATOR'), if
any, specified in the related Prospectus Supplement.

                                   THE TRUSTS

GENERAL

     The Mortgage Collateral and other assets described below and in the related
Prospectus Supplement will be held in trust (each, a 'TRUST') for the benefit of
the holders of the related series of Certificates and the Excess Spread, if any,
pursuant to a Pooling and Servicing Agreement or a Trust Agreement as described
herein and in the related Prospectus Supplement. A Trust for a series of
Certificates may include Mortgage Collateral that consists of one or more of the
following: (1) a pool of Mortgage Loans, or whole or partial participations in
Mortgage Loans ( a 'MORTGAGE POOL'), secured by first liens on one- to
four-family residential properties, including shares of cooperative housing
corporations and proprietary leases for cooperative apartment units (together
with Manufactured Homes, 'MORTGAGED PROPERTIES'); (2) a pool of Contracts, or
whole or partial participations in Contracts (a 'CONTRACT POOL') secured by
manufactured homes (each, a 'MANUFACTURED HOME'); (3) a pool of mortgage
pass-through certificates, including Agency Securities, representing whole or
partial interests in pools of Mortgage Loans, Contracts or Agency Securities (a
'SECURITIES POOL'); and (4) certain other related property conveyed by the
Depositor. 'AGENCY SECURITIES' will include any mortgage pass-through securities
(a) guaranteed and/or issued by the Government National Mortgage Association
('GINNIE MAE' and such securities, 'GINNIE MAE SECURITIES'), (b) issued by the
Federal Home Loan Mortgage Corporation ('FREDDIE MAC' and such securities,
'FREDDIE MAC SECURITIES') or (c) issued by the Federal National Mortgage
Association ('FANNIE MAE' and such securities, 'FANNIE MAE SECURITIES'). The
Mortgaged Properties may be located in any of the 50 States, the District of
Columbia or the Commonwealth of Puerto Rico (the 'PUERTO RICO MORTGAGE LOANS').
The Mortgage Collateral will be purchased by the Depositor directly or
indirectly from sellers (the 'MORTGAGE COLLATERAL SELLERS'), which may include
(i) affiliates of the Depositor including Residential Funding Corporation
('RESIDENTIAL FUNDING') and GMAC Mortgage Corporation, or (ii) sellers
unaffiliated with the Depositor. See 'The Trusts -- Mortgage Collateral
Sellers.'

     Each Trust may also include (i) the amounts required to be held from time
to time in a trust account (the 'CERTIFICATE ACCOUNT'), into which payments in
respect of the Mortgage Collateral may be deposited, which account will be
maintained by the Master Servicer, a Servicer, the Trustee or the Certificate
Administrator, as the case may be, pursuant to the Pooling and Servicing
Agreement or Trust Agreement, (ii) if so specified in the related Prospectus
Supplement, a trust account (the 'CUSTODIAL ACCOUNT') into which amounts to be
deposited in the Certificate Account may be deposited on a periodic basis prior
to deposit in the Certificate Account, (iii) any Mortgaged Property which
initially secured a Mortgage Loan or Contract and that is acquired by
foreclosure or deed in lieu of foreclosure and certain proceeds from the
disposition of any related Additional Collateral or Pledged Assets, or from the
Surety Bond, if any, (iv) hazard insurance policies and Primary Insurance
Policies, if any, and certain proceeds thereof; and (v) if so specified in the
related Prospectus Supplement, one or more other cash accounts, insurance
policies or other forms of credit enhancement with respect to the Certificates,
the Mortgage Collateral or all or any part of the Trust, required to be
maintained pursuant to the related Pooling and Servicing Agreement or Trust
Agreement. See 'Description of Credit Enhancement.' To the extent that any Trust
includes certificates of interest or participations in Mortgage Loans,

                                       4

<PAGE>
the related Prospectus Supplement will describe the material terms and
conditions of such certificates or participations.

     Each Certificate will evidence the interest specified in the related
Prospectus Supplement in a Trust, containing a Mortgage Pool, Contract Pool,
Securities Pool or any combination thereof, having the aggregate principal
balance as of the date (the 'CUT-OFF DATE') specified in the related Prospectus
Supplement. Certificateholders of a series will have interests only in such
Mortgage Pool, Contract Pool or Securities Pool or combination thereof and will
have no interest in the Mortgage Pool, Contract Pool or Securities Pool created
with respect to any other series of Certificates.

     The related Prospectus Supplement may identify one or more entities as
servicers (each, a 'SERVICER') for a series of Certificates evidencing interests
in Mortgage Loans or Contracts or, if so provided in the related Prospectus
Supplement, an entity may act as Master Servicer with respect to a series of
Certificates. The Master Servicer or any Servicer, as applicable, may service
the Mortgage Loans or Contracts through one or more Subservicers. See
'Description of the Certificates -- Servicing and Administration of Mortgage
Collateral.' In addition to or in lieu of the Master Servicer or Servicer for a
series of Certificates, the related Prospectus Supplement may identify a
Certificate Administrator for the Trust. The Certificate Administrator may be
the Master Servicer, or an affiliate of the Master Servicer or the Depositor.
The related Prospectus Supplement will identify an entity that will serve as
Trustee for a series of Certificates. The Trustee will be authorized to appoint
a custodian (a 'CUSTODIAN') pursuant to a custodial agreement to maintain
possession of and review documents relating to the Mortgage Collateral as the
agent of the Trustee. The identity of such Custodian, if any, will be set forth
in the related Prospectus Supplement.

     The following is a brief description of the Mortgage Collateral expected to
be included in the Trusts. If specific information respecting the Mortgage
Collateral is not known to the Depositor at the time Certificates are initially
offered, more general information of the nature described below will be provided
in the Prospectus Supplement, and specific information will be set forth in a
Current Report on Form 8-K (a 'FORM 8-K') to be filed with the Securities and
Exchange Commission (the 'COMMISSION') within fifteen days after the initial
issuance of such Certificates. A copy of the Pooling and Servicing Agreement or
Trust Agreement, as applicable, with respect to each series will be an exhibit
to the Form 8-K. A schedule of Mortgage Collateral will be an exhibit to the
related Pooling and Servicing Agreement or Trust Agreement.

THE MORTGAGE LOANS

     Unless otherwise stated in the related Prospectus Supplement, the Mortgage
Loans included in a Trust for a series will have been originated by or on behalf
of either (i) savings and loan associations, savings banks, commercial banks,
credit unions, insurance companies or similar institutions which are supervised
and/or examined by a federal or state authority, or (ii) HUD-approved
mortgagees. If so specified in the related Prospectus Supplement, the Mortgage
Collateral Sellers may include state or local government housing finance
agencies. Each Mortgage Loan will be selected by the Depositor for inclusion in
a Mortgage Pool from those purchased by the Depositor from Affiliated Sellers
or, either directly or through its affiliates, including HomeComings Financial
Network, Inc., GMAC Mortgage Corporation and Residential Funding, from
Unaffiliated Sellers, all as described in the related Prospectus Supplement. If
a Mortgage Pool is composed of Mortgage Loans acquired by the Depositor directly
from Unaffiliated Sellers, the related Prospectus Supplement will specify the
extent of Mortgage Loans so acquired. The characteristics of the Mortgage Loans
will be as described in the related Prospectus Supplement. The Mortgage Loans
purchased by the Depositor from a Mortgage Collateral Seller will be selected by
the Depositor. Other mortgage loans available for purchase by the Depositor may
have had characteristics that would have made them eligible for inclusion in a
Mortgage Pool, but were not selected by the Depositor for inclusion in such
Mortgage Pool.

     If so stated in the related Prospectus Supplement, all or a portion of the
Mortgage Loans that underlie a series of Certificates may have been purchased by
the Depositor, either directly, or indirectly through Residential Funding or
other affiliates, from Mortgage Collateral Sellers under Residential Funding's
Expanded Criteria Loan Program (the 'PROGRAM') as described below (such Mortgage
Loans, the 'PROGRAM LOANS').

     The Mortgage Loans may include mortgage loans insured by the Federal
Housing Administration (the 'FHA' and such loans, 'FHA LOANS'), a division of
the United States Department of Housing and Urban Development ('HUD'), mortgage
loans partially guaranteed by the Veterans Administration (the 'VA' and such
loans, 'VA LOANS') and mortgage loans not insured or guaranteed by the FHA or VA
('CONVENTIONAL

                                       5

<PAGE>
LOANS'). The Mortgage Loans may have fixed interest rates or adjustable interest
rates ('MORTGAGE RATES'). The Mortgage Loans may include (i) Mortgage Loans with
fixed level payments; (ii) Mortgage Loans pursuant to which the monthly payments
by the Mortgagor during the early years of the related Mortgage are less than
the amount of interest that would otherwise be payable thereon, with the
interest not so paid added to the outstanding principal balance of such Mortgage
Loan ('GPM LOANS'); (iii) Mortgage Loans subject to temporary buy-down plans
('BUY-DOWN MORTGAGE LOANS'), pursuant to which the monthly payments made by the
Mortgagor during the early years of the Mortgage Loan will be less than the
scheduled monthly payments on the Mortgage Loan; (iv) Mortgage Loans that
provide for the reduction of the interest rate based on the payment performance
of the Mortgage Loans; (v) Mortgage Loans that provide for payment every other
week during the term thereof ('BI-WEEKLY LOANS'); (vi) Mortgage Loans that
experience negative amortization; (vii) Mortgage Loans that require a larger
payment of principal upon maturity (a 'BALLOON AMOUNT') that may be all or a
portion of the principal thereof ('BALLOON LOANS'); or (viii) Mortgage Loans
with other payment characteristics as described below or in the related
Prospectus Supplement.

     The Mortgage Loans may include either (i) Mortgage Loans secured by
mortgages, deeds of trust, deeds to secure debt or other similar security
instruments (collectively, 'MORTGAGES') creating first liens on the related
Mortgaged Properties or (ii) Mortgage Loans ('COOPERATIVE LOANS'), each of which
is secured by an assignment by the borrower of a security interest in shares
issued by a private, non-profit, cooperative housing corporation (any such
corporation, a 'COOPERATIVE') and the related proprietary lease or occupancy
agreement granting exclusive rights to occupy specific units within the
apartment building owned by a Cooperative ('COOPERATIVE DWELLINGS').

     The borrowers under the Mortgage Loans (the 'MORTGAGORS') may be United
States citizens living in the United States or one of the following types of
borrowers (collectively, 'INTERNATIONAL BORROWERS'): (i) United States citizens
employed abroad; (ii) non-permanent resident aliens employed in the United
States; or (iii) persons who are citizens and residents of a country other than
the United States, including foreign corporations formed for the purpose of
owning real estate.

     If so specified in the related Prospectus Supplement, a Mortgage Pool will
contain Mortgage Loans (the 'ADDITIONAL COLLATERAL LOANS') purchased from
Unaffiliated Sellers (each, an 'ADDITIONAL COLLATERAL LOAN SELLER'), that have
Loan-to-Value Ratios at origination in excess of 80% but not greater than 100%
and are secured, in addition to the related Mortgaged Property and in lieu of
any primary mortgage insurance, by additional collateral which will consist of
(i) a security interest in financial assets owned by the Mortgagor (which will
consist of securities, insurance policies, annuities, certificates of deposit,
cash, accounts or similar assets) and/or (ii) a third party guarantee (usually
by a relative of the Mortgagor), which in turn is secured by a security interest
in financial assets (as described in above) or residential property owned by the
guarantor. The collateral referred to in clauses (i) and (ii) above is herein
referred to as 'ADDITIONAL COLLATERAL.' The amount of Additional Collateral for
any Mortgage Loan generally will not exceed 30% of the principal amount of such
Mortgage Loan (the 'ADDITIONAL COLLATERAL REQUIREMENT'), and the requirement to
maintain Additional Collateral will generally terminate when the Loan-to-Value
Ratio of the Mortgage Loan is reduced to a predetermined level (which generally
shall not be more than 75%) as a result of a reduction in the loan amount caused
by principal payments by the Mortgagor or an increase in the appraised value of
the related Mortgaged Property. The Additional Collateral Loan Seller or the
related Subservicer, as applicable, will be required, in accordance with the
Master Servicer's servicing guidelines or its normal servicing procedures,
respectively, to attempt to realize on any such Additional Collateral if the
related Additional Collateral Loan is liquidated upon default. The right to
receive proceeds from the realization of Additional Collateral upon any such
liquidation will be assigned to the related Trustee. No assurance can be given
as to the amount of proceeds, if any, that might be realized by the Additional
Collateral Loan Seller from such Additional Collateral and thereafter remitted
to the Trustee. Unless otherwise specified in the related Prospectus Supplement,
Ambac Assurance Corporation or another insurance company (whose claims-paying
ability is rated in the highest long-term rating category by each Rating Agency
rating the applicable series of Certificates) will have issued a limited purpose
surety bond insuring any deficiency in the amounts realized by the Additional
Collateral Loan Seller from the liquidation of Additional Collateral, up to the
amount of the Additional Collateral Requirement. For additional considerations
concerning the Additional Collateral Loans, see 'Certain Legal Aspects of
Mortgage Loans and Contracts -- The Mortgage Loans -- Anti-Deficiency
Legislation and Other Limitations on Lenders' herein.

     If so specified in the related Prospectus Supplement, a Mortgage Pool may
include Mortgage Loans (the 'PLEDGED ASSET MORTGAGE LOANS') that have
Loan-to-Value Ratios at origination of up to 100% and are

                                       6

<PAGE>
secured, in addition to the related Mortgaged Property, by funds (the 'PLEDGED
ASSETS') pledged by a limited liability company. The limited liability company
is a special purpose entity formed for the purpose of holding and pledging to
the owner of each Pledged Asset Mortgage Loan the Pledged Assets, which funds
will have been remitted to the limited liability company at the direction of or
for the benefit of the Mortgagor. The amount of the Pledged Assets (the 'PLEDGED
AMOUNT') will be determined by the Mortgage Collateral Seller in accordance with
its underwriting standards, but generally will not be more than an amount that,
if applied to reduce the original principal balance of the Mortgage Loan, would
reduce such principal balance to less than 70% of the Appraised Value of the
Mortgaged Property. If, following a default by the Mortgagor and the liquidation
of the related Mortgaged Property, there remains a loss on the related Mortgage
Loan, the limited liability company will be required to pay the amount of such
loss, up to the Pledged Amount for such Mortgage Loan. If the Mortgagor becomes
a debtor in a bankruptcy proceeding, there is a significant risk that the
Pledged Assets will not be available to be paid to the Certificateholders. At
the Mortgagor's request, and subject to certain conditions, the Pledged Assets
may be applied as a partial prepayment of the Mortgage Loan. The Pledged Assets
will be released, and will no longer be available to cover a loss on a Mortgage
Loan, if the outstanding principal balance of the Mortgage Loan has been reduced
by the amount of the Pledged Amount.

     If so specified in the related Prospectus Supplement, a Mortgage Pool may
include Mortgage Loans that have been modified (each, a 'MODIFIED MORTGAGE
LOAN'). Such modifications may include conversions from an adjustable to a fixed
Mortgage Rate (discussed below) or other changes in the related mortgage note.
If a Mortgage Loan is a Modified Mortgage Loan, references to origination
generally shall be deemed to be references to the date of modification.

     The Mortgaged Properties may consist of detached individual dwellings,
cooperative dwellings, individual condominiums, townhouses, duplexes, row
houses, modular pre-cut/panelized housing, individual units or two-to four-unit
dwellings in planned unit developments, two- to four-family dwellings and other
attached dwelling units. Each Mortgaged Property (other than a Cooperative
Dwelling) will be located on land owned in fee simple by the Mortgagor or, if
specified in the related Prospectus Supplement, land leased by the Mortgagor.
Attached dwellings may include structures where each Mortgagor owns the land
upon which the unit is built with the remaining adjacent land owned in common,
or dwelling units subject to a proprietary lease or occupancy agreement in an
apartment building owned by a Cooperative. The proprietary lease or occupancy
agreement securing a Cooperative Loan is generally subordinate to any blanket
mortgage on the related cooperative apartment building or on the underlying
land. Additionally, in the case of a Cooperative Loan, the proprietary lease or
occupancy agreement is subject to termination and the cooperative shares are
subject to cancellation by the Cooperative if the tenant-stockholder fails to
pay maintenance or other obligations or charges owed by such tenant-stockholder.
See 'Certain Legal Aspects of Mortgage Loans and Contracts.'

     The Mortgaged Properties may be owner occupied or non-owner occupied and
may include vacation homes, second homes and investment properties. The
percentage of Mortgage Loans that are owner-occupied will be disclosed in the
related Prospectus Supplement. The basis for any statement that a given
percentage of the Mortgage Loans are secured by Mortgaged Properties that are
owner-occupied will be one or more of the following: (i) the making of a
representation by the Mortgagor at origination of a Mortgage Loan that the
Mortgagor intends to use the Mortgaged Property as a primary residence, (ii) a
representation by the originator of the Mortgage Loan (which representation may
be based solely on (i) above) or (iii) the fact that the mailing address for the
Mortgagor is the same as the address of the Mortgaged Property; and any
representation and warranty in the related Pooling and Servicing Agreement
regarding owner-occupancy may be based solely on such information. To the extent
specified in the related Prospectus Supplement, the Mortgaged Properties may
include vacation homes, second homes and non-owner-occupied investment
properties. Mortgage Loans secured by investment properties (including two- to
four-unit dwellings) may also be secured by an assignment of leases and rents
and operating or other cash flow guarantees relating to the Mortgage Loans. The
percentage of Mortgage Loans made to International Borrowers will also be
disclosed in the related Prospectus Supplement.

     Additional information, including information regarding loan-to-value
ratios (each, a 'LOAN-TO-VALUE RATIO') at origination (unless otherwise
specified in the related Prospectus Supplement) of the Mortgage Loans underlying
each series of Certificates, will also be supplied in the related Prospectus
Supplement. In the case of purchase money Mortgage Loans, the Loan-to-Value
Ratio is defined generally as the ratio, expressed as a percentage, of the
principal amount of the Mortgage Loan at origination to the lesser of (1) the
appraised value determined in an appraisal obtained at origination of such
Mortgage Loan and (2) the sales price for the related Mortgaged Property, except
that in the case of certain employee or preferred customer loans, the
denominator of

                                       7

<PAGE>
such ratio may be the sales price. In the case of certain non-purchase money
Mortgage Loans including refinance, modified or converted Mortgage Loans, the
Loan-to-Value Ratio at origination is defined generally as the ratio, expressed
as a percentage, of the principal amount of such Mortgage Loan to either the
appraised value determined in an appraisal obtained at the time of refinancing,
modification or conversion or, if no such appraisal has been obtained, the value
of the related Mortgaged Property which value generally will be supported by
either (i) a representation by the related Mortgage Collateral Seller (as
described below) as to such value, (ii) a broker's price opinion, automated
appraisal, drive-by appraisal or other certification of value, (iii) an
appraisal obtained within twelve months prior to such refinancing, modification
or conversion or, under the streamlined refinancing program described herein, an
appraisal obtained within 24 months prior to such refinancing, (iv) the sales
price, if the Mortgaged Property was purchased within the previous twelve
months, or (v) with respect to a Contract made in connection with the
Mortgagor's purchase of a Manufactured Home, generally the sales price of the
Manufactured Home or the amount determined by a professional appraiser. The
denominator of the ratio described in the preceding sentence or the second
preceding sentence, as the case may be, is hereinafter referred to as the
'APPRAISED VALUE.' Certain Mortgage Loans that are subject to negative
amortization will have Loan-to-Value Ratios that will increase after origination
as a result of such negative amortization. In the case of seasoned Mortgage
Loans, the appraisals upon which Loan-to-Value Ratios have been calculated may
no longer be accurate valuations of the Mortgaged Properties. Certain Mortgaged
Properties may be located in regions where property values have declined
significantly since the time of origination. In addition, a Loan-to-Value
calculation does not take into account any secondary financing. Under the
Depositor's underwriting standards, a Mortgage Collateral Seller is generally
permitted to provide secondary financing to a Mortgagor contemporaneously with
the origination of a Mortgage Loan, provided that the combined Loan-to-Value
Ratio is not greater than 100%. Secondary financing is readily available and may
be obtained by a Mortgagor from a lender including the Mortgage Collateral
Seller at any time (including at origination).

     The Mortgage Loans may be 'equity refinance' Mortgage Loans, as to which a
portion of the proceeds are used to refinance an existing mortgage loan, and the
remaining proceeds may be retained by the Mortgagor or used for purposes
unrelated to the Mortgaged Property. Alternatively, the Mortgage Loans may be
'rate and term refinance' Mortgage Loans, as to which substantially all of the
proceeds (net of related costs incurred by the Mortgagor) are used to refinance
an existing mortgage loan or loans (which may include a junior lien) primarily
in order to change the interest rate or other terms thereof. The Mortgage Loans
may be mortgage loans that have been consolidated and/or have had various terms
changed, mortgage loans that have been converted from adjustable rate mortgage
loans to fixed rate mortgage loans, or construction loans which have been
converted to permanent mortgage loans. In addition, a Mortgaged Property may be
subject to secondary financing at the time of origination of the Mortgage Loan
or thereafter.

     If so specified in the related Prospectus Supplement, a portion of the
proceeds of a Mortgage Loan may be held by the originator and used to reimburse
the Mortgagor for certain costs of construction of or improvements to the
related Mortgaged Property. The Appraised Value of any such Mortgaged Property
will be based on the assumption that such construction has been completed. If
the construction is not completed, the actual value of the related Mortgaged
Property could be adversely affected and, even if the escrowed proceeds are
applied to reduce the principal balance of the Mortgage Loan, the actual
loan-to-value ratio of the Mortgage Loan could be higher than that assumed at
the time of origination of the Mortgage Loan. In addition, the application of
any unused proceeds could cause the rate of payment of principal on such
Mortgage Loan to be faster than that assumed.

     Mortgage Loans that have adjustable Mortgage Rates ('ARM LOANS') generally
will provide for a fixed initial Mortgage Rate until the first date on which
such Mortgage Rate is to be adjusted. Thereafter, the Mortgage Rate is subject
to periodic adjustment as described in the related Prospectus Supplement,
subject to the applicable limitations, based on changes in an index* described
in the applicable Prospectus Supplement, to a rate equal to the Index plus a
fixed percentage spread over the Index established contractually for each ARM

------------
* The index (the 'INDEX') for a particular Mortgage Pool will be specified in
  the related Prospectus Supplement and may include one of the following
  indexes: (i) the weekly average yield on U.S. Treasury securities adjusted to
  a constant maturity of either three months, six months or one year, (ii) the
  weekly auction average investment yield of U.S. Treasury bills of six months,
  (iii) the daily Bank Prime Loan rate made available by the Federal Reserve
  Board, (iv) the cost of funds of member institutions for the Federal Home Loan
  Bank of San Francisco, or (v) the interbank offered rates for U.S. dollar
  deposits in the London market, each calculated as of a date prior to each
  scheduled interest rate adjustment date which will be specified in the related
  Prospectus Supplement.

                                       8

<PAGE>
Loan at the time of its origination (the 'NOTE MARGIN'). The initial Mortgage
Rate on an ARM Loan may be lower than the sum of the then-applicable Index and
the Note Margin for such ARM Loan.

     ARM Loans have features that provide different investment considerations
than fixed-rate mortgage loans. In particular, adjustable mortgage rates can
cause payment increases that may exceed some Mortgagors' capacity to cover such
payments. However, to the extent specified in the related Prospectus Supplement,
an ARM Loan may provide that its Mortgage Rate may not be adjusted to a rate
above the applicable maximum Mortgage Rate (the 'MAXIMUM MORTGAGE RATE') or
below the applicable minimum Mortgage Rate (the 'MINIMUM MORTGAGE RATE'), if
any, for such ARM Loan. In addition, to the extent specified in the related
Prospectus Supplement, certain of the ARM Loans may provide for limitations on
the maximum amount by which their mortgage rates may adjust for any single
adjustment period (the 'PERIODIC CAP'). Some ARM Loans provide for limitations
on the amount of scheduled payments of principal and interest.

     Certain ARM Loans may be subject to negative amortization from time to time
prior to their maturity (such ARM Loans, 'NEG-AM ARM LOANS'). Such negative
amortization may result from either the adjustment of the Mortgage Rate on a
more frequent basis than the adjustment of the scheduled payment or the
application of a cap on the size of the scheduled payment. In the first case,
negative amortization results if an increase in the Mortgage Rate occurs prior
to an adjustment of the scheduled payment on the related Mortgage Loan and such
increase causes accrued monthly interest on the Mortgage Loan to exceed the
scheduled payment. In the second case, negative amortization results if an
increase in the Mortgage Rate causes accrued monthly interest on a Mortgage Loan
to exceed the limit on the size of the scheduled payment on such Mortgage Loan.
In the event that the scheduled payment is not sufficient to pay the accrued
monthly interest on a Neg-Am ARM Loan, the amount of accrued monthly interest
that exceeds the scheduled payment on such Mortgage Loans (the 'DEFERRED
INTEREST') is added to the principal balance of such ARM Loan and is to be
repaid from future scheduled payments. Neg-Am ARM Loans do not provide for the
extension of their original stated maturity to accommodate changes in their
Mortgage Rate. The related Prospectus Supplement will specify whether the ARM
Loans underlying a series are Neg-Am ARM Loans.

     A Mortgage Pool may contain ARM Loans which allow the Mortgagors to convert
the adjustable rates on such Mortgage Loans to a fixed rate at one or more
specified periods during the life of such Mortgage Loans (each, a 'CONVERTIBLE
MORTGAGE LOAN'), generally not later than ten years subsequent to the date of
origination. If specified in the related Prospectus Supplement, upon any
conversion, the Depositor will repurchase or Residential Funding, the applicable
Servicer or Subservicer or a third party will purchase the converted Mortgage
Loan as and to the extent set forth in the related Prospectus Supplement.
Alternatively, if specified in the related Prospectus Supplement, the Depositor
or Residential Funding (or another party specified therein) may agree to act as
remarketing agent with respect to such converted Mortgage Loans and, in such
capacity, to use its best efforts to arrange for the sale of converted Mortgage
Loans under specified conditions. Upon the failure of any party so obligated to
purchase any such converted Mortgage Loan, the inability of any remarketing
agent to arrange for the sale of the converted Mortgage Loan and the
unwillingness of such remarketing agent to exercise any election to purchase the
converted Mortgage Loan for its own account, the related Mortgage Pool will
thereafter include both fixed rate and adjustable rate Mortgage Loans.

     If specified in the related Prospectus Supplement, certain of the Mortgage
Loans may be Buy-Down Mortgage Loans pursuant to which the monthly payments made
by the Mortgagor during the early years of the Mortgage Loan (the 'BUY-DOWN
PERIOD') will be less than the scheduled monthly payments on the Mortgage Loan,
the resulting difference to be made up from (i) an amount (such amount,
exclusive of investment earnings thereon, being hereinafter referred to as
'BUY-DOWN FUNDS') contributed by the seller of the Mortgaged Property or another
source and placed in an escrow account, (ii) if the Buy-Down Funds are
contributed on a present value basis, investment earnings on such Buy-Down Funds
or (iii) additional buydown funds to be contributed over time by the Mortgagor's
employer or another source.

     The related Prospectus Supplement will provide material information
concerning the types and characteristics of the Mortgage Loans included in a
Trust as of the related Cut-off Date. In the event that Mortgage Loans are added
to or deleted from the Trust after the date of the related Prospectus Supplement
and prior to the Closing Date for the related series of Certificates, the final
characteristics of the Mortgage Pool will be noted in the Form 8-K.

     Under the Pooling and Servicing Agreement for each series of Certificates,
the Depositor will cause the Mortgage Loans constituting each Mortgage Pool to
be assigned to the Trustee for such series of Certificates, for

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the benefit of the holders of all such Certificates. Such assignment of the
Mortgage Loans to the Trustee will be without recourse. See 'Description of the
Certificates -- Assignment of Mortgage Loans.'

  Underwriting Policies

     The Depositor generally expects that the originator of each of the Mortgage
Loans will have applied, consistent with applicable federal and state laws and
regulations, underwriting procedures intended to evaluate the borrower's credit
standing and repayment ability and/or the value and adequacy of the related
property as collateral. If so specified in the related Prospectus Supplement,
all or a portion of the Mortgage Loans constituting the Mortgage Pool for a
series of Certificates may have been acquired either directly or indirectly by
the Depositor through the Program. Any FHA Loans or VA Loans will have been
originated in compliance with the underwriting policies of the FHA or VA,
respectively. The underwriting criteria applied by the originators of the
Mortgage Loans included in a Mortgage Pool may vary significantly among Mortgage
Collateral Sellers. The related Prospectus Supplement will describe generally
certain aspects of the underwriting criteria, to the extent known by the
Depositor, that were applied by the originators of such Mortgage Loans. The
Depositor generally will have less detailed information concerning the
origination of seasoned Mortgage Loans than it will have concerning
newly-originated Mortgage Loans.

     General Standards. Generally, each Mortgagor will have been required to
complete an application designed to provide to the original lender pertinent
credit information concerning the Mortgagor. As part of the description of the
Mortgagor's financial condition, such Mortgagor will have furnished information
(which may be supplied solely in such application) with respect to its assets,
liabilities, income (except as described below), credit history, employment
history and personal information, and furnished an authorization to apply for a
credit report which summarizes the borrower's credit history with local
merchants and lenders and any record of bankruptcy. The Mortgagor may also have
been required to authorize verifications of deposits at financial institutions
where the Mortgagor had demand or savings accounts. In the case of investment
properties and two-to four-unit dwellings, income derived from the Mortgaged
Property may have been considered for underwriting purposes, in addition to the
income of the Mortgagor from other sources. With respect to Mortgaged Property
consisting of vacation or second homes, no income derived from the property
generally will have been considered for underwriting purposes. In the case of
certain borrowers with acceptable payment histories, no income will be required
to be stated (or verified) in connection with the loan application.

     Certain information, including the 'CREDIT SCORES' for certain of the
Mortgagors, may be set forth in the related Prospectus Supplement. Credit Scores
are obtained by many mortgage lenders in connection with their assessment of
mortgage loan applications. Credit Scores assist in determining the
credit-worthiness of the borrower. In addition, Credit Scores may be obtained by
Residential Funding after the origination of a Mortgage Loan if the Seller does
not provide to Residential Funding a Credit Score. Credit Scores are obtained
from credit reports provided by various credit reporting organizations, each of
which may employ differing computer models and methodologies. The Credit Score
is designed to assess a borrower's credit history at a single point in time,
using objective information currently on file for the borrower at a particular
credit reporting organization. Information used to create a Credit Score may
include, among other things, payment history, delinquencies on accounts, levels
of outstanding indebtedness, length of credit history, types of credit, and
bankruptcy experience. Credit Scores generally range from 350 to 840, with
higher scores indicating an individual with a more favorable credit history
compared to an individual with a lower score. However, a Credit Score purports
only to be a measurement of the relative degree of risk a borrower represents to
a lender at a single point in time, i.e., a borrower with a higher score is
statistically expected to be less likely to default in payment than a borrower
with a lower score. In addition, it should be noted that Credit Scores were
developed to indicate a level of default probability over a two-year period,
which does not correspond to the life of a mortgage loan. Mortgage loans
generally amortize over a 15 to 30 year period. Furthermore, Credit Scores were
not developed specifically for use in connection with mortgage loans, but for
consumer loans in general, and assess only the borrower's past credit history.
Therefore, a Credit Score does not take into consideration the differences
between mortgage loans and consumer loans generally, or the specific
characteristics of the related mortgage loan (for example, the Loan-to-Value
Ratio, the collateral for the mortgage loan, or the debt to income ratio of the
related borrower). There can be no assurance that the Credit Scores of the
Mortgagors will be an accurate predictor of the likelihood of repayment of the
related Mortgage Loans or that any Mortgagor's Credit Score would not be lower
if obtained as of the date of the related Prospectus Supplement.

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     If so specified in the related Prospectus Supplement, a Mortgage Pool may
include Mortgage Loans that have been underwritten pursuant to a streamlined
documentation refinancing program, as set forth in the Program Seller Guide.
Such program permits certain mortgage loans to be refinanced with only limited
verification or updating of the underwriting information that was obtained at
the time that the original mortgage loan was originated. For example, a new
appraisal of a Mortgaged Property may not be required if the related original
mortgage loan was originated up to 24 months prior to the refinancing. In
addition, a Mortgagor's income may not be verified, although continued
employment is required to be verified. In certain circumstances, a Mortgagor may
be permitted to borrow up to 105% of the outstanding principal amount of the
original mortgage loan. Each Mortgage Loan underwritten pursuant to this program
will be treated as having been underwritten pursuant to the same underwriting
documentation program as the mortgage loan that it refinanced, including for
purposes of the disclosure in the related Prospectus Supplement.

     As described in the related Prospectus Supplement, certain Mortgage Loans
may have been originated under 'limited documentation' or 'no documentation'
programs which require less documentation and verification than do traditional
'full documentation' programs. Generally, under such a program, minimal
investigation into the Mortgagor's credit history and income profile is
undertaken by the originator and such underwriting may be based primarily or
entirely on an appraisal of the Mortgaged Property and the Loan-to-Value Ratio
at origination.

     The adequacy of the Mortgaged Property as security for repayment of the
related Mortgage Loan will generally have been determined by an appraisal in
accordance with pre-established appraisal procedure guidelines for appraisals
established by or acceptable to the originator. Appraisers may be staff
appraisers employed by the originator or independent appraisers selected in
accordance with pre-established guidelines established by the originator. The
appraisal procedure guidelines generally will have required the appraiser or an
agent on its behalf to personally inspect the property and to verify whether the
property was in good condition and that construction, if new, had been
substantially completed. The appraisal generally will have been based upon a
market data analysis of recent sales of comparable properties and, when deemed
applicable, an analysis based on income generated from the property or a
replacement cost analysis based on the current cost of constructing or
purchasing a similar property.

     The underwriting standards applied by an originator generally require that
the underwriting officers be satisfied that the value of the property being
financed, as indicated by an appraisal or other acceptable valuation method,
currently supports and is anticipated to support in the future the outstanding
loan balance. In fact, certain states where the Mortgaged Properties may be
located have 'anti-deficiency' laws requiring, in general, that lenders
providing credit on single family property look solely to the property for
repayment in the event of foreclosure. See 'Certain Legal Aspects of Mortgage
Loans and Contracts.' Any of these factors could change nationwide or merely
could affect a locality or region in which all or some of the Mortgaged
Properties are located. However, declining values of real estate, as experienced
recently in certain regions, or increases in the principal balances of certain
Mortgage Loans, such as GPM Loans and Neg-Am ARM Loans, could cause the
principal balance of some or all of the Mortgage Loans to exceed the value of
the Mortgaged Properties.

     Based on the data provided in the application, certain verifications (if
required) and the appraisal or other valuation of the Mortgaged Property, a
determination will have been made by the original lender that the Mortgagor's
monthly income (if required to be stated) would be sufficient to enable the
Mortgagor to meet its monthly obligations on the Mortgage Loan and other
expenses related to the property (such as property taxes, utility costs,
standard hazard and primary mortgage insurance and, if applicable, maintenance
fees and other levies assessed by a Cooperative) and other fixed obligations
other than housing expenses. The originator's guidelines for Mortgage Loans
generally will specify that scheduled payments on a Mortgage Loan during the
first year of its term plus taxes and insurance (including primary mortgage
insurance) and all scheduled payments on obligations that extend beyond one year
(including those mentioned above and other fixed obligations) would generally
equal no more than specified percentages of the prospective Mortgagor's gross
income. The originator may also consider the amount of liquid assets available
to the Mortgagor after origination.

     The level of review by Residential Funding, if any, will vary depending on
a number of factors. Residential Funding, on behalf of the Depositor, generally
will review a portion of the Mortgage Loans constituting the Mortgage Pool for a
series of Certificates for conformity with the applicable underwriting standards
and to assess the likelihood of repayment of the Mortgage Loan from the various
sources for such repayment, including

                                       11

<PAGE>
the Mortgagor, the Mortgaged Property, and primary mortgage insurance, if any.
In reviewing seasoned Mortgage Loans (those which have been outstanding for more
than 12 months), Residential Funding may also take into consideration the
Mortgagor's actual payment history in assessing a Mortgagor's current ability to
make payments on the Mortgage Loan. In addition, Residential Funding may conduct
additional procedures to assess the current value of the Mortgaged Properties.
Such procedures may consist of drive by appraisals or real estate broker's price
opinions. The Depositor may also consider a specific area's housing value
trends. These alternative valuation methods are not generally as reliable as the
type of mortgagor financial information or appraisals that are generally
obtained at origination. Residential Funding may also consider the applicable
Credit Score of the related Mortgagor. The underwriting criteria applicable to
any program under which the Mortgage Loans may be originated and reviewed may
provide that qualification for the loan, or the availability of certain loan
features (such as maximum loan amount, maximum Loan-to-Value Ratio, property
type and use, and documentation level) may depend on the borrower's credit
score.

     With respect to the Depositor's underwriting standards, as well as any
other underwriting standards that may be applicable to any Mortgage Loans, such
underwriting standards generally include a set of specific criteria pursuant to
which the underwriting evaluation is made. However, the application of such
underwriting standards does not imply that each specific criterion was satisfied
individually. Rather, a Mortgage Loan will be considered to be originated in
accordance with a given set of underwriting standards if, based on an overall
qualitative evaluation, the loan is in substantial compliance with such
underwriting standards. For example, a Mortgage Loan may be considered to comply
with a set of underwriting standards, even if one or more specific criteria
included in such underwriting standards were not satisfied, if other factors
compensated for the criteria that were not satisfied or if the Mortgage Loan is
considered to be in substantial compliance with the underwriting standards.

     The Program. The underwriting standards with respect to Program Loans will
generally conform to those published in Residential Funding's Seller Guide (as
applicable to the Program Loans, the 'PROGRAM SELLER GUIDE'), as modified from
time to time. The Program Seller Guide will set forth general underwriting
standards relating to mortgage loans, which are generally less stringent than
underwriting standards applicable to mortgage loans originated under other first
mortgage loan purchase programs such as those run by Fannie Mae or Freddie Mac
or by the Depositor's affiliate, Residential Funding, for the purpose of
collateralizing securities issued by Residential Funding Mortgage Securities I,
Inc. For example, Program Loans may include mortgage loans with higher
Loan-to-Value Ratios, larger principal balances, mortgage loans secured by
smaller or larger parcels of land or by investment properties, mortgage loans
with Loan-to-Value Ratios in excess of 80% that do not require primary mortgage
insurance, mortgage loans made to International Borrowers, and mortgage loans
made to borrowers that are self-employed or are not required to state their
income. The underwriting standards set forth in the Program Seller Guide are
revised based on changing conditions in the residential mortgage market and the
market for the Depositor's mortgage pass-through certificates and may also be
waived by Residential Funding from time to time. The Prospectus Supplement for
each series of Certificates secured by Program Loans will set forth the general
underwriting criteria applicable to such Mortgage Loans.

     A portion of Program Loans generally will be reviewed by Residential
Funding or by a designated third party for compliance with applicable
underwriting criteria. Certain of the Program Loans may be purchased in
negotiated transactions (which may be governed by agreements relating to ongoing
purchases of Program Loans by Residential Funding) ('MASTER COMMITMENTS'), from
Program Sellers who will represent that Program Loans have been originated in
accordance with underwriting standards agreed to by Residential Funding. Certain
other Program Loans will be purchased from Program Sellers who will represent
that Program Loans were originated pursuant to underwriting standards determined
by a mortgage insurance company or third party origination system acceptable to
Residential Funding. Residential Funding may accept a certification from such
insurance company as to a Program Loan's insurability in a mortgage pool as of
the date of certification as evidence of a Program Loan conforming to applicable
underwriting standards. Such certifications will likely have been issued before
the purchase of the Program Loan by Residential Funding or the Depositor.

     FHA and VA Programs. With respect to FHA Loans and VA Loans, traditional
underwriting guidelines used by the FHA and the VA, as the case may be, which
were in effect at the time of origination of each such Mortgage Loan will have
generally been applied.

                                       12

<PAGE>
THE CONTRACTS

  General

     The Trust for a series may include a Contract Pool evidencing interests in
Contracts originated by one or more manufactured housing dealers, or such other
entity or entities described in the related Prospectus Supplement. The Contracts
may be conventional Contracts or Contracts insured by the FHA ('FHA CONTRACTS')
or partially guaranteed by the VA ('VA CONTRACTS'). Each Contract will be
secured by a manufactured home (each, a 'MANUFACTURED HOME'), but generally not
the property on which such home is situated. Unless otherwise specified in the
related Prospectus Supplement, the Contracts will be fully amortizing.

     The Manufactured Homes securing the Contracts will consist of 'manufactured
homes' within the meaning of 42 U.S.C. 'SS' 5402(6), which are treated as
'single family residences' for the purposes of the 'real estate mortgage
investment conduit' ('REMIC') provisions of the Internal Revenue Code of 1986,
as amended (the 'CODE'). Accordingly, a Manufactured Home will be a structure
built on a permanent chassis, which is transportable in one or more sections and
customarily used at a fixed location, has a minimum of 400 square feet of living
space and minimum width in excess of 8 1/2 feet and is designed to be used as a
dwelling with or without a permanent foundation when connected to the required
utilities, and includes the plumbing, heating, air conditioning, and electrical
systems contained therein.

     The related Prospectus Supplement will provide information concerning the
types or characteristics of the Contracts included in a Trust as of the related
Cut-off Date. In the event that Contracts are added to or deleted from the Trust
after the date of the related Prospectus Supplement, the final characteristics
of the Contract Pool will be noted in the Form 8-K.

  Underwriting Policies

     Conventional Contracts will comply with the underwriting policies of the
applicable originator or Mortgage Collateral Seller, which will be described in
the related Prospectus Supplement. With respect to FHA Contracts and VA
Contracts, traditional underwriting guidelines used by the FHA and the VA, as
the case may be, which were in effect at the time of origination of each such
Contract will generally have been applied.

     With respect to a Contract made in connection with the Mortgagor's purchase
of a Manufactured Home, the Appraised Value is generally the sales price of the
Manufactured Home or the amount determined by a professional appraiser. The
appraiser must personally inspect the Manufactured Home and prepare a report
which includes market data based on recent sales of comparable Manufactured
Homes and, when deemed applicable, a replacement cost analysis based on the
current cost of a similar Manufactured Home. The Loan-to-Value Ratio for a
Contract generally will be equal to the original principal amount of the
Contract divided by the lesser of the Appraised Value or the sales price for the
Manufactured Home; however, unless otherwise specified in the related Prospectus
Supplement, an appraisal of the Manufactured Home will not be required.

THE AGENCY SECURITIES

  Government National Mortgage Association

     Ginnie Mae is a wholly-owned corporate instrumentality of the United States
within HUD. Section 306(g) of Title III of the National Housing Act of 1934, as
amended (the 'HOUSING ACT'), authorizes Ginnie Mae to guarantee the timely
payment of the principal of and interest on certificates representing interests
in a pool of mortgages (i) insured by the FHA, under the Housing Act or under
Title V of the Housing Act of 1949, or (ii) partially guaranteed by the VA under
the Servicemen's Readjustment Act of 1944, as amended, or under Chapter 37 of
Title 38, United States Code.

     Section 306(g) of the Housing Act provides that 'the full faith and credit
of the United States is pledged to the payment of all amounts which may be
required to be paid under any guarantee under this subsection.' In order to meet
its obligations under any such guarantee, Ginnie Mae may, under Section 306(d)
of the Housing Act, borrow from the United States Treasury an amount that is at
any time sufficient to enable Ginnie Mae to perform its obligations under its
guarantee. See 'Additional Information' for the availability of further
information regarding Ginnie Mae and Ginnie Mae Securities.

                                       13

<PAGE>
  Ginnie Mae Securities

     Unless otherwise specified in the related Prospectus Supplement, each
Ginnie Mae Security relating to a series (which may be a 'GINNIE MAE I
CERTIFICATE' or a 'GINNIE MAE II CERTIFICATE' as referred to by Ginnie Mae) will
be a 'fully modified pass-through' mortgage-backed certificate issued and
serviced by a mortgage banking company or other financial concern approved by
Ginnie Mae, except with respect to any stripped mortgage backed securities
guaranteed by Ginnie Mae or any REMIC securities issued by Ginnie Mae. The
characteristics of any Ginnie Mae Securities included in the Trust for a series
of Certificates will be set forth in the related Prospectus Supplement.

  Federal Home Loan Mortgage Corporation

     Freddie Mac is a corporate instrumentality of the United States created
pursuant to Title III of the Emergency Home Finance Act of 1970, as amended (the
'FREDDIE MAC ACT'). Freddie Mac was established primarily for the purpose of
increasing the availability of mortgage credit for the financing of needed
housing. The principal activity of Freddie Mac currently consists of purchasing
first-lien, conventional, residential mortgage loans or participation interests
in such mortgage loans and reselling the mortgage loans so purchased in the form
of guaranteed mortgage securities, primarily Freddie Mac Securities. In 1981,
Freddie Mac initiated its Home Mortgage Guaranty Program under which it
purchases mortgage loans from sellers with Freddie Mac Securities representing
interests in the mortgage loans so purchased. All mortgage loans purchased by
Freddie Mac must meet certain standards set forth in the Freddie Mac Act.
Freddie Mac is confined to purchasing, so far as practicable, mortgage loans
that it deems to be of such quality and type as to meet generally the purchase
standards imposed by private institutional mortgage investors. See 'Additional
Information' for the availability of further information regarding Freddie Mac
and Freddie Mac Securities. Neither the United States nor any agency thereof is
obligated to finance Freddie Mac's operations or to assist Freddie Mac in any
other manner.

  Freddie Mac Securities

     Unless otherwise specified in the related Prospectus Supplement, each
Freddie Mac Security relating to a series will represent an undivided interest
in a pool of mortgage loans that typically consists of conventional loans (but
may include FHA Loans and VA Loans) purchased by Freddie Mac, except with
respect to any stripped mortgage backed securities issued by Freddie Mac. Each
such pool will consist of mortgage loans (i) substantially all of which are
secured by one- to four-family residential properties or (ii) if specified in
the related Prospectus Supplement, secured by five or more family residential
properties. The characteristics of any Freddie Mac Securities included in the
Trust for a series of Certificates will be set forth in the related Prospectus
Supplement.

  Federal National Mortgage Association

     Fannie Mae is a federally chartered and privately owned corporation
organized and existing under the Federal National Mortgage Association Charter
Act (12 U.S.C. 'SS' 1716 et seq.). It is the nation's largest supplier of
residential mortgage funds. Fannie Mae was originally established in 1938 as a
United States government agency to provide supplemental liquidity to the
mortgage market and was transformed into a stockholder-owned and privately
managed corporation by legislation enacted in 1968. Fannie Mae provides funds to
the mortgage market primarily by purchasing home mortgage loans from local
lenders, thereby replenishing their funds for additional lending. See
'Additional Information' for the availability of further information respecting
Fannie Mae and Fannie Mae Securities. Although the Secretary of the Treasury of
the United States has authority to lend Fannie Mae up to $2.25 billion
outstanding at any time, neither the United States nor any agency thereof is
obligated to finance Fannie Mae's operations or to assist Fannie Mae in any
other manner.

  Fannie Mae Securities

     Unless otherwise specified in the related Prospectus Supplement, each
Fannie Mae Security relating to a series will represent a fractional undivided
interest in a pool of mortgage loans formed by Fannie Mae, except with respect
to any stripped mortgage backed securities issued by Fannie Mae. Mortgage loans
underlying Fannie Mae Securities will consist of (i) fixed, variable or
adjustable rate conventional mortgage loans or (ii) fixed-rate FHA Loans or VA
Loans. Such mortgage loans may be secured by either one- to four-family or

                                       14

<PAGE>
multi-family residential properties. The characteristics of any Fannie Mae
Securities included in the Trust for a series of Certificates will be set forth
in the related Prospectus Supplement.

MORTGAGE COLLATERAL SELLERS

     The Mortgage Collateral to be included in a Trust will be purchased by the
Depositor directly or indirectly through Residential Funding or other affiliates
from Mortgage Collateral Sellers that may be (a) banks, savings and loan
associations, mortgage bankers, investment banking firms, insurance companies,
the Federal Deposit Insurance Corporation (the 'FDIC') and other mortgage loan
originators or sellers not affiliated with the Depositor (each, an 'UNAFFILIATED
SELLER') or (b) HomeComings Financial Network, Inc. and GMAC Mortgage
Corporation and its affiliates (each, an 'AFFILIATED SELLER'). Such purchases
may occur by one or more of the following methods: (i) one or more direct or
indirect purchases from Unaffiliated Sellers, which may occur simultaneously
with the issuance of the Certificates or which may occur over an extended period
of time; (ii) one or more direct or indirect purchases through the Program; or
(iii) one or more purchases from Affiliated Sellers. Certain of the Mortgage
Loans may be purchased pursuant to Master Commitments. The Prospectus Supplement
for a series of Certificates will disclose the method or methods used to acquire
the Mortgage Collateral for such series. The Depositor may issue one or more
classes of Certificates to a Mortgage Collateral Seller as consideration for the
purchase of the Mortgage Collateral securing such series of Certificates, if so
described in the related Prospectus Supplement.

     The Mortgage Collateral Sellers that participate in the Program (each, a
'PROGRAM SELLER') will have been selected by Residential Funding on the basis of
criteria set forth in the Program Seller Guide. A Program Seller may be an
affiliate of the Depositor and the Depositor presently anticipates that GMAC
Mortgage Corporation and HomeComings Financial Network, Inc., each an affiliate
of the Depositor, will be Program Sellers. Except in the case of the FDIC and
investment banking firms, each Program Seller will have been approved by
Residential Funding for participation in Residential Funding's loan purchase
programs. In determining whether to approve a seller for participation in the
loan purchase program, Residential Funding generally will consider, among other
things, the financial status (including the net worth) of the seller, the
previous experience of the seller in originating mortgage loans, the prior
delinquency and loss experience of the seller, the underwriting standards
employed by the seller and the quality control and, if applicable, the servicing
operations established by the seller. There can be no assurance that any Program
Seller presently meets any qualifications or will continue to meet any
qualifications at the time of inclusion of mortgage loans sold by it in the
Trust for a series of Certificates, or thereafter. If a Program Seller becomes
subject to the direct or indirect control of the FDIC or if a Program Seller's
net worth, financial performance or delinquency and foreclosure rates are
adversely impacted, such institution may continue to be treated as a Program
Seller. Any such event may adversely affect the ability of any such Program
Seller to repurchase Mortgage Collateral in the event of a breach of a
representation or warranty which has not been cured. See ' -- Repurchases of
Mortgage Collateral' below.

REPRESENTATIONS WITH RESPECT TO MORTGAGE COLLATERAL

     Mortgage Collateral Sellers generally will make certain limited
representations and warranties with respect to the Mortgage Collateral that they
sell directly or indirectly to the Depositor. The Depositor will assign to the
Trustee for the benefit of the related Certificateholders all of its right,
title and interest in each agreement pursuant to which it purchased any item of
Mortgage Collateral from a Mortgage Collateral Seller, to the extent such
agreement relates to (i) the representations and warranties made by a Mortgage
Collateral Seller or Residential Funding, as the case may be, in respect of such
item of Mortgage Collateral and (ii) any remedies provided for any breach of
such representations and warranties.

     With respect to any Mortgage Loan (including Program Loans) or Contract
constituting a part of the Trust, unless otherwise disclosed in the related
Prospectus Supplement, Residential Funding generally will represent and warrant
that: (i) as of the Cut-off Date, the information set forth in a listing of the
related Mortgage Loan or Contract was true and correct in all material respects;
(ii) except in the case of Cooperative Loans, a policy of title insurance was
effective or attorney's certificate was received at origination, and each policy
remained in full force and effect on the date of sale of the related Mortgage
Loan or Contract to the Depositor; (iii) to the best of Residential Funding's
knowledge, if required by applicable underwriting standards, the Mortgage Loan
or Contract is the subject of a Primary Insurance Policy; (iv) Residential
Funding had good title to the Mortgage Loan or Contract and the Mortgage Loan or
Contract is not subject to offsets, defenses or counterclaims except

                                       15

<PAGE>
as may be provided under the Relief Act and except with respect to any buydown
agreement for a Buy-Down Mortgage Loan; (v) each Mortgaged Property is free of
material damage and in good repair; (vi) each Mortgage Loan complied in all
material respects with all applicable local, state and federal laws at the time
of origination; (vii) the Mortgage Loan or Contract was not 30 or more days
delinquent in payment of principal and interest as of the related Cut-off Date
and was not so delinquent more than once during the twelve-month period prior to
the Cut-off Date; and (viii) there is no delinquent tax or assessment lien
against the related Mortgaged Property.

     In the event of a breach of a representation or warranty made by
Residential Funding that materially adversely affects the interests of the
Certificateholders in the Mortgage Loan or Contract, Residential Funding will be
obligated to repurchase any such Mortgage Loan or Contract or substitute for
such Mortgage Loan or Contract as described below. In addition, unless otherwise
specified in the related Prospectus Supplement, Residential Funding will be
obligated to repurchase or substitute for any Mortgage Loan as to which it is
discovered that the related Mortgage does not create a valid first lien on, or
in the case of a Contract a perfected security interest in, the related
Mortgaged Property (or, with respect to a Cooperative Loan, the related shares
of stock and proprietary lease), subject only to (a) liens of real property
taxes and assessments not yet due and payable, (b) covenants, conditions and
restrictions, rights of way, easements and other matters of public record as of
the date of recording of such Mortgage and certain other permissible title
exceptions and (c) other encumbrances to which like properties are commonly
subject which do not materially adversely affect the value, use, enjoyment or
marketability of the Mortgaged Property. In addition, unless otherwise specified
in the related Prospectus Supplement, with respect to any Mortgage Loan or
Contract as to which the Depositor delivers to the Trustee an affidavit
certifying that the original Mortgage Note or Contract has been lost or
destroyed, if such Mortgage Loan or Contract subsequently is in default and the
enforcement thereof or of the related Mortgage or Contract is materially
adversely affected by the absence of the original Mortgage Note or Contract,
Residential Funding will be obligated to repurchase or substitute for such
Mortgage Loan or Contract in the manner described below. However, unless
otherwise set forth in the related Prospectus Supplement, Residential Funding
will not be required to repurchase or substitute for any Mortgage Loan or
Contract if the circumstances giving rise to such requirement also constitute
fraud in the origination of the related Mortgage Loan or Contract. Furthermore,
because the listing of the related Mortgage Collateral generally contains
information with respect to the Mortgage Collateral as of the Cut-off Date,
prepayments and, in certain limited circumstances, modifications to the interest
rate and principal and interest payments may have been made with respect to one
or more of the related items of Mortgage Collateral between the Cut-off Date and
the Closing Date. Neither Residential Funding nor any Seller will be required to
repurchase or substitute for any item of Mortgage Collateral as a result of any
such prepayment or modification.

     All of the representations and warranties of a Mortgage Collateral Seller
in respect of an item of Mortgage Collateral will have been made as of the date
on which such Mortgage Collateral Seller sold the Mortgage Collateral to the
Depositor or Residential Funding or one of their affiliates. The date as of
which such representations and warranties were made generally will be a date
prior to the date of issuance of the related series of Certificates. A
substantial period of time may elapse between the date as of which the
representations and warranties were made and the date of issuance of the related
series of Certificates. The Mortgage Collateral Seller's repurchase obligation
(or, if specified in the related Prospectus Supplement, limited substitution
option) will not arise if, after the sale of the related Mortgage Collateral, an
event occurs that would have given rise to such an obligation had the event
occurred prior to such period.

REPURCHASES OF MORTGAGE COLLATERAL

     If a Mortgage Collateral Seller or Residential Funding, as the case may be,
cannot cure a breach of any representation or warranty made by it in respect of
an item of Mortgage Collateral within 90 days after notice from the Master
Servicer, the Servicer, the Certificate Administrator or the Trustee, and such
breach materially and adversely affects the interests of the Certificateholders
in such item of Mortgage Collateral, such Mortgage Collateral Seller or
Residential Funding, as the case may be, will be obligated to purchase such item
of Mortgage Collateral at a price set forth in the related Pooling and Servicing
Agreement or Trust Agreement. Likewise, as described under 'Description of the
Certificates -- Review of Mortgage Loan or Contract Documents,' if the Depositor
or the Mortgage Collateral Seller, as applicable, cannot cure certain
documentary defects with respect to a Mortgage Loan or Contract, the Depositor
or the Mortgage Collateral Seller, as applicable, will be required to repurchase
such item of Mortgage Collateral. Unless otherwise specified in the

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<PAGE>
related Prospectus Supplement, the 'PURCHASE PRICE' for any such item of
Mortgage Collateral will be equal to the principal balance thereof as of the
date of purchase plus accrued and unpaid interest to the first day of the month
following the month of repurchase (less the amount, expressed as a percentage
per annum, payable in respect of servicing or administrative compensation and
the Excluded Spread, if any). In certain limited cases, a substitution may be
made in lieu of such repurchase obligation. See ' -- Limited Right of
Substitution' below.

     The Master Servicer, the Servicer or the Certificate Administrator, as
applicable, will be required under the applicable Pooling and Servicing
Agreement or Trust Agreement to enforce this repurchase obligation, or the
substitution right described below, for the benefit of the Trustee and the
Certificateholders, using practices it would employ in its good faith business
judgment and which are normal and usual in its general mortgage servicing
activities; provided, however, that this purchase or substitution obligation
will not become an obligation of the Master Servicer in the event the Seller or
Residential Funding, as the case may be, fails to honor such obligation. The
Master Servicer will be entitled to reimbursement for any costs and expenses
incurred in pursuing such a purchase or substitution obligation, including but
not limited to any costs or expenses associated with litigation. If, as a result
of a breach of representation or warranty, a Mortgage Collateral Seller is
required, but fails, to repurchase the related Mortgage Collateral, the
Depositor or Residential Funding will only be required to repurchase such
Mortgage Collateral if the Depositor or Residential Funding has assumed such
representations and warranties. Consequently, such Mortgage Collateral will
remain in the related Trust and any related losses not borne by any applicable
credit enhancement will be borne by Certificateholders. If the Mortgage
Collateral Seller fails to honor its repurchase or substitution obligation, such
obligation will not become an obligation of Residential Funding, the Master
Servicer or Servicer (although Residential Funding, the Master Servicer or
Servicer may have an independent obligation to repurchase or substitute for such
Mortgage Collateral). In instances where a Mortgage Collateral Seller is unable
or disputes its obligation to repurchase affected Mortgage Collateral, the
Master Servicer or Servicer, using practices it would employ in its good faith
business judgment and which are normal and usual in its general mortgage
servicing activities, may negotiate and enter into settlement agreements with
such Mortgage Collateral Seller that could provide for, among other things, the
repurchase of only a portion of the affected Mortgage Collateral. Any such
settlement could lead to losses on the Mortgage Collateral which would be borne
by the related Certificateholders. In accordance with the above described
practices, the Master Servicer or Servicer will not be required to enforce any
purchase obligation of a Mortgage Collateral Seller arising from any
misrepresentation by the Mortgage Collateral Seller, if the Master Servicer or
Servicer determines in the reasonable exercise of its business judgment that the
matters related to such misrepresentation did not directly cause or are not
likely to directly cause a loss on the related Mortgage Collateral. Unless
otherwise specified in the related Prospectus Supplement, the foregoing
repurchase obligations and the limited right of substitution (described below)
will constitute the sole remedies available to Certificateholders or the Trustee
for a breach of any representation by a Mortgage Collateral Seller in its
capacity as a seller of Mortgage Collateral, or for any other event giving rise
to such obligations as described above.

     The Depositor and Residential Funding generally monitor which Mortgage
Collateral Sellers are under the control of the FDIC, or are insolvent,
otherwise in receivership or conservatorship or financially distressed. Such
Mortgage Collateral Sellers may not be able or permitted to repurchase Mortgage
Collateral for which there has been a breach of representation or warranty.
Moreover, any such Mortgage Collateral Seller may make no representations or
warranties with respect to Mortgage Collateral sold by it. The FDIC (either in
its corporate capacity or as receiver for a depository institution), may also be
a Mortgage Collateral Seller, in which event neither the FDIC nor the related
depository institution may make representations or warranties with respect to
the Mortgage Collateral sold, or only limited representations or warranties may
be made (for example, that the related legal documents are enforceable). The
FDIC may have no obligation to repurchase any Mortgage Collateral for a breach
of a representation or warranty.

LIMITED RIGHT OF SUBSTITUTION

     In the case of a Mortgage Loan or Contract required to be repurchased from
the Trust (a 'REPURCHASED MORTGAGE LOAN' or a 'REPURCHASED CONTRACT,'
respectively) the related Mortgage Collateral Seller or Residential Funding, as
applicable, may substitute a new Mortgage Loan or Contract (a 'QUALIFIED
SUBSTITUTE MORTGAGE LOAN' or a 'QUALIFIED SUBSTITUTE CONTRACT,' respectively)
for the Repurchased Mortgage Loan or Contract that was removed from the Trust,
during the limited time period described below. Any such substitution

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<PAGE>
must be effected within 120 days of the date of the issuance of the Certificates
with respect to a Trust for which no REMIC election is to be made. With respect
to a Trust for which a REMIC election is to be made, except as otherwise
provided in the related Prospectus Supplement, such substitution must be
effected within two years of the date of the issuance of the Certificates, and
may not be made if such substitution would cause the Trust to fail to qualify as
a REMIC or result in a prohibited transaction tax under the Code.

     Except as otherwise provided in the related Prospectus Supplement, any
Qualified Substitute Mortgage Loan or Qualified Substitute Contract generally
will, on the date of substitution: (i) have an outstanding principal balance,
after deduction of the principal portion of the monthly payment due in the month
of substitution, not in excess of the outstanding principal balance of the
Repurchased Mortgage Loan or Repurchased Contract; (ii) have a Mortgage Rate and
a Net Mortgage Rate not less than (and not more than one percentage point
greater than) the Mortgage Rate and Net Mortgage Rate, respectively, of the
Repurchased Mortgage Loan or Repurchased Contract as of the date of
substitution; (iii) have a Loan-to-Value Ratio at the time of substitution no
higher than that of the Repurchased Mortgage Loan or Repurchased Contract; (iv)
have a remaining term to maturity not greater than (and not more than one year
less than) that of the Repurchased Mortgage Loan or Repurchased Contract; (v) be
secured by Mortgaged Property located in the United States, unless the
Repurchased Mortgage Loan was a Puerto Rico Mortgage Loan, in which case the
Qualified Substitute Mortgage Loan may be a Puerto Rico Mortgage Loan; and (vi)
comply with all of the representations and warranties set forth in the related
Pooling and Servicing Agreement as of the date of substitution. In the event the
outstanding principal balance of a Qualified Substitute Mortgage Loan or
Qualified Substitute Contract is less than the outstanding principal balance of
the related Repurchased Mortgage Loan or Repurchased Contract, the amount of
such shortfall shall be deposited into the Custodial Account in the month of
substitution for distribution to the related Certificateholders. The related
Pooling and Servicing Agreement may include additional requirements relating to
ARM Loans or other specific types of Mortgage Loans or Contracts, or additional
provisions relating to meeting the foregoing requirements on an aggregate basis
where a number of substitutions occur contemporaneously. Unless otherwise
specified in the related Prospectus Supplement, a Mortgage Collateral Seller
will have no option to substitute for a Mortgage Loan or Contract that it is
obligated to repurchase in connection with a breach of a representation and
warranty.

                                       18

<PAGE>
                        DESCRIPTION OF THE CERTIFICATES

GENERAL

     The Certificates will be issued in series. Each series of Certificates (or,
in certain instances, two or more series of Certificates) will be issued
pursuant to a Pooling and Servicing Agreement or, in the case of Certificates
backed by Agency Securities, a Trust Agreement, similar to one of the forms
filed as an exhibit to the registration statement under the Securities Act of
1933, as amended, with respect to the Certificates (the 'REGISTRATION
STATEMENT') of which this Prospectus is a part. Each Pooling and Servicing
Agreement or Trust Agreement will be filed with the Commission as an exhibit to
a Form 8-K. The following summaries (together with additional summaries under
'The Pooling and Servicing Agreement' below) describe certain provisions
relating to the Certificates common to each Pooling and Servicing Agreement or
Trust Agreement. All references herein to a 'Pooling and Servicing Agreement'
and any discussion of the provisions thereof will also apply to Trust
Agreements. The 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 Trust and the related Prospectus
Supplement.

     If so specified in the related Prospectus Supplement, a series of
Certificates may consist of any one or a combination of the following: (i) a
single class of Certificates; (ii) two or more classes of Certificates, of which
one or more classes of Certificates (collectively, the 'SENIOR CERTIFICATES')
are senior in right of payment to one or more other classes of Certificates
(collectively, the 'SUBORDINATE CERTIFICATES'), and among which certain classes
of Senior Certificates may be senior to other classes of Senior Certificates, or
certain classes of Subordinate Certificates (collectively, the 'MEZZANINE
CERTIFICATES') may be senior to other classes of Subordinate Certificates, in
each case as described in the related Prospectus Supplement (any such series, a
'SENIOR/SUBORDINATE SERIES'); (iii) one or more classes of Certificates (each, a
'STRIP CERTIFICATE') that will be entitled to (a) principal distributions, with
disproportionate, nominal or no interest distributions or (b) interest
distributions, with disproportionate, nominal or no principal distributions;
(iv) two or more classes of Certificates that differ as to the timing,
sequential order, rate, pass-through rate or amount of distributions of
principal or interest or both, or as to which distributions of principal or
interest or both on any class may be made upon the occurrence of specified
events, in accordance with a schedule or formula (including 'planned
amortization classes' and 'targeted amortization classes'), or on the basis of
collections from designated portions of the Mortgage Pool or Contract Pool,
which series may include one or more classes of Certificates ('ACCRUAL
CERTIFICATES') with respect to which certain accrued interest will not be
distributed but rather will be added to the principal balance thereof on each
Distribution Date for the period described in the related Prospectus Supplement;
or (v) other types of classes of Certificates, as described in the related
Prospectus Supplement. Credit support for each series of Certificates will be
provided by a Mortgage Pool Insurance Policy, Special Hazard Insurance Policy,
Bankruptcy Bond, Letter of Credit, Reserve Fund, Certificate Insurance Policy,
Overcollateralization, or other credit enhancement as described under
'Description of Credit Enhancement,' or by the subordination of one or more
classes of Certificates as described under 'Subordination' or by any combination
of the foregoing.

FORM OF CERTIFICATES

     As specified in the related Prospectus Supplement, the Certificates of each
series will be issued either as physical certificates or in book-entry form. If
issued as physical certificates, the Certificates will be in fully registered
form only in the denominations specified in the related Prospectus Supplement,
and will be transferable and exchangeable at the corporate trust office of the
person appointed under the related Pooling and Servicing Agreement to register
the Certificates (the 'CERTIFICATE REGISTRAR'). No service charge will be made
for any registration of exchange or transfer of Certificates, but the Trustee
may require payment of a sum sufficient to cover any tax or other governmental
charge. The term 'CERTIFICATEHOLDER' as used herein refers to the entity whose
name appears on the records of the Certificate Registrar (or, if applicable, a
transfer agent) as the registered holder thereof, except as otherwise indicated
in the related Prospectus Supplement.

     If issued in book-entry form, certain classes of a series of Certificates
will be initially issued through the book-entry facilities of The Depository
Trust Company ('DTC'), or Cedelbank ('CEDEL'), or the Euroclear System
('EUROCLEAR') (in Europe) if they are participants of such systems, or
indirectly through organizations which are participants in such systems, or
through such other depository or facility as may be specified in the

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<PAGE>
related Prospectus Supplement. As to any such class of Certificates so issued
('BOOK-ENTRY CERTIFICATES'), the record holder of such Certificates will be
DTC's nominee. Cedel and Euroclear will hold omnibus positions on behalf of
their participants through customers' securities accounts in Cedel's and
Euroclear's names on the books of their respective depositaries (the
'DEPOSITARIES'), which in turn will hold such positions in customers' securities
accounts in the depositaries' names on the books of DTC.

     DTC is a limited-purpose trust company organized under the laws of the
State of New York, which holds securities for its participating organizations
('DTC PARTICIPANTS,' and together with the Cedel and Euroclear participating
organizations, 'PARTICIPANTS') and facilitates the clearance and settlement of
securities transactions between Participants through electronic book-entry
changes in the accounts of Participants. Participants include securities brokers
and dealers, banks, trust companies and clearing corporations and may include
certain other organizations. Other institutions that are not Participants but
clear through or maintain a custodial relationship with Participants (such
institutions, 'INDIRECT PARTICIPANTS') have indirect access to DTC's clearance
system.

     Unless otherwise specified in the related Prospectus Supplement, no person
acquiring an interest in any Book-Entry Certificate (each such person, a
'BENEFICIAL OWNER') will be entitled to receive a Certificate representing such
interest in registered, certificated form, unless either (i) DTC ceases to act
as depository in respect thereof and a successor depository is not obtained, or
(ii) the Depositor elects in its sole discretion to discontinue the registration
of such Certificates through DTC. Prior to any such event, Beneficial Owners
will not be recognized by the Trustee or the Master Servicer as holders of the
related Certificates for purposes of the Pooling and Servicing Agreement, and
Beneficial Owners will be able to exercise their rights as owners of such
Certificates only indirectly through DTC, Participants and Indirect
Participants. Any Beneficial Owner that desires to purchase, sell or otherwise
transfer any interest in Book-Entry Certificates may do so only through DTC,
either directly if such Beneficial Owner is a Participant or indirectly through
Participants and, if applicable, Indirect Participants. Pursuant to the
procedures of DTC, transfers of the beneficial ownership of any Book-Entry
Certificates will be required to be made in minimum denominations specified in
the related Prospectus Supplement. The ability of a Beneficial Owner to pledge
Book-Entry Certificates to persons or entities that are not Participants in the
DTC system, or to otherwise act with respect to such Certificates, may be
limited because of the lack of physical certificates evidencing such
Certificates and because DTC may act only on behalf of Participants.

     Because of time zone differences, the securities account of a Cedel or
Euroclear participant as a result of a transaction with a DTC Participant (other
than a depositary holding on behalf of Cedel or Euroclear) will be credited
during a subsequent securities settlement processing day (which must be a
business day for Cedel or Euroclear, as the case may be) immediately following
the DTC settlement date. Such credits or any transactions in such securities
settled during such processing will be reported to the relevant Euroclear
Participant or Cedel Participants on such business day. Cash received in Cedel
or Euroclear as a result of sales of securities by or through a Cedel
Participant or Euroclear Participant to a DTC Participant (other than the
depositary for Cedel or Euroclear) will be received with value on the DTC
settlement date, but will be available in the relevant Cedel 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 Cedel Participants and 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 Cedel
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 Depositaries; however, such cross market
transactions will require delivery of instructions to the relevant European
international clearing system by the counterparty in such system in accordance
with its rules and procedures and within its established deadlines (European
time). The relevant European international clearing system will, if the
transaction meets its settlement requirements, deliver instructions to its
Depositary 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. Cedel
Participants and Euroclear Participants may not deliver instructions directly to
the Depositaries.

     Cedel, a professional depository, holds securities for its participating
organizations ('CEDEL PARTICIPANTS') and facilitates the clearance and
settlement of securities transactions between Cedel Participants through
electronic book-entry changes in accounts of Cedel Participants, thereby
eliminating the need for physical

                                       20

<PAGE>
movement of certificates. As a professional depository, Cedel is subject to
regulation by the Luxembourg Monetary Institute.

     Euroclear was created to hold securities for participants of Euroclear
('EUROCLEAR PARTICIPANTS') and to clear and settle transactions between
Euroclear Participants through simultaneous electronic book-entry delivery
against payment, thereby eliminating the need for physical movement of
certificates and any risk from lack of simultaneous transfers of securities and
cash. Euroclear is operated by the Brussels, Belgium office of Morgan Guaranty
Trust Company of New York (the 'EUROCLEAR OPERATOR'), under contract with
Euroclear Clearance Systems S.C., a Belgian co-operative corporation (the
'CLEARANCE COOPERATIVE'). All operations are conducted by the Euroclear
Operator, and all Euroclear securities clearance accounts and Euroclear cash
accounts are accounts with the Euroclear Operator, not the Clearance
Cooperative. The Clearance Cooperative establishes policy for Euroclear on
behalf of Euroclear Participants. The Euroclear Operator is the Belgian branch
of a New York banking corporation which is a member bank of the Federal Reserve
System. As such, it is regulated and examined by the Board of Governors of the
Federal Reserve System and the New York State Banking Department, as well as the
Belgian Banking Commission. Securities clearance accounts and cash accounts with
the Euroclear Operator are governed by the Terms and Conditions Governing Use of
Euroclear and the related Operating Procedures of the Euroclear System and
applicable Belgian law (collectively, the 'TERMS AND CONDITIONS'). The Terms and
Conditions govern transfers of securities and cash within Euroclear, withdrawals
of securities and cash from Euroclear, and receipts of payments with respect to
securities in Euroclear. All securities in Euroclear are held on a fungible
basis without attribution of specific certificates to specific securities
clearance accounts.

     Distributions in respect of the Book-Entry Certificates will be forwarded
by the Trustee to DTC, and DTC will be responsible for forwarding such payments
to Participants, each of which will be responsible for disbursing such payments
to the Beneficial Owners it represents or, if applicable, to Indirect
Participants. Accordingly, Beneficial 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
Book-Entry Certificates under the Pooling and Servicing Agreement only at the
direction of one or more Participants to whose account the Book-Entry
Certificates are credited and whose aggregate holdings represent no less than
any minimum amount of Percentage Interests or voting rights required therefor.
DTC may take conflicting actions with respect to any action of
Certificateholders of any Class to the extent that Participants authorize such
actions. None of the Master Servicer, 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
Book-Entry Certificates, or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interests.

ASSIGNMENT OF MORTGAGE LOANS

     At the time of issuance of a series of Certificates, the Depositor will
cause the Mortgage Loans being included in the related Trust to be assigned to
the Trustee or its nominee (which may be the Custodian), together with all
principal and interest received on or with respect to such Mortgage Loans after
the Cut-off Date (other than principal and interest due on or before the Cut-off
Date and any Excluded Spread). The Trustee will, concurrently with such
assignment, deliver a series of Certificates to the Depositor in exchange for
the Mortgage Loans. Each Mortgage Loan will be identified in a schedule
appearing as an exhibit to the related Pooling and Servicing Agreement. Such
schedule will include, among other things, information as to the principal
balance of each Mortgage Loan as of the Cut-off Date, as well as information
respecting the Mortgage Rate, the currently scheduled monthly payment of
principal and interest, the maturity of the Mortgage Note and the Loan-to-Value
Ratio at origination or modification (without regard to any secondary
financing).

     In addition, the Depositor will, as to each Mortgage Loan other than a
Mortgage Loan underlying any Agency Securities, deliver to the Trustee (or to
the Custodian) the legal documents relating to such Mortgage Loan that are in
possession of the Depositor, which may include: (i) the note evidencing such
Mortgage Loan (the 'MORTGAGE NOTE') (and any modification or amendment thereto)
endorsed without recourse either in blank or to the order of the Trustee (or its
nominee); (ii) the Mortgage (except for any Mortgage not returned from the
public recording office) with evidence of recording indicated thereon or, in the
case of a Cooperative Loan, the respective security agreements and any
applicable UCC financing statements; (iii) an assignment in recordable form of
the Mortgage, or evidence that the Mortgage is held for the Trustee through the
MERS'r' System (or,

                                       21

<PAGE>
with respect to a Cooperative Loan, an assignment of the respective security
agreements, any applicable UCC financing statements, recognition agreements,
relevant stock certificates, related blank stock powers and the related
proprietary leases or occupancy agreements); and (iv) if applicable, any riders
or modifications to such Mortgage Note and Mortgage, together with certain other
documents at such times as set forth in the related Pooling and Servicing
Agreement. Such assignments may be blanket assignments covering Mortgages
secured by Mortgaged Properties located in the same county, if permitted by law.
If so provided in the related Prospectus Supplement, the Depositor may not be
required to deliver one or more of such documents if such documents are missing
from the files of the party from whom such Mortgage Loans were purchased.
Notwithstanding the foregoing, a Trust may include Mortgage Loans where the
original Mortgage Note is not delivered to the Trustee if the Depositor delivers
to the Trustee or the 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. With respect to such Mortgage Loans, the Trustee (or its
nominee) may not be able to enforce the Mortgage Note against the related
borrower. Residential Funding will agree to repurchase or substitute for such a
Mortgage Loan in certain circumstances. See 'The Trusts -- Representations with
Respect to Mortgage Collateral.'

     In the event that, with respect to any Mortgage Loan, the Depositor cannot
deliver the Mortgage or any 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 Trustee or the
Custodian a true and correct photocopy of such Mortgage or assignment. The
Depositor will deliver or cause to be delivered to the Trustee or the Custodian
such Mortgage or assignment with evidence of recording indicated thereon after
receipt thereof from the public recording office or from the related Servicer or
Subservicer.

     If so specified in the related Prospectus Supplement, and subject to the
rules of membership of Merscorp, Inc. and/or Mortgage Electronic Registration
Systems, Inc. (together, 'MERS'), assignments of the mortgages for the Mortgage
Loans in the related Trust will be registered electronically through Mortgage
Electronic Registration Systems, Inc. (the 'MERS'r' SYSTEM'). With respect to
Mortgage Loans registered through the MERS'r' System, MERS shall serve as
mortgagee of record solely as a nominee in an administrative capacity on behalf
of the Trustee and shall not have any interest in any such Mortgage Loans.

     With respect to any Puerto Rico Mortgage Loans, the Mortgages with respect
to such Mortgage Loans either (i) secure a specific obligation for the benefit
of a specified person (a 'DIRECT PUERTO RICO MORTGAGE') or (ii) secure an
instrument transferable by endorsement (an 'ENDORSABLE PUERTO RICO MORTGAGE').
Endorsable Puerto Rico Mortgages do not require an assignment to transfer the
related lien. Rather, transfer of such mortgages follows an effective
endorsement of the related Mortgage Note and, therefore, delivery of the
assignment referred to in clause (iii) of the second preceding paragraph would
be inapplicable. Direct Puerto Rico Mortgages, however, require an assignment to
be recorded with respect to any transfer of the related lien and such assignment
would be delivered to the Trustee (or the Custodian).

     Assignments of the Mortgage Loans to the Trustee will be recorded in the
appropriate public recording office, except for mortgages held under the MERS'r'
System or in states where, in the opinion of counsel acceptable to the Trustee,
such recording is not required to protect the Trustee's interests in the
Mortgage Loan against the claim of any subsequent transferee or any successor to
or creditor of the Depositor or the originator of such Mortgage Loan, or except
as otherwise specified in the related Prospectus Supplement.

ASSIGNMENT OF CONTRACTS

     The Depositor will cause the Contracts constituting the Contract Pool to be
assigned to the Trustee or its nominee (which may be the Custodian), together
with principal and interest due on or with respect to the Contracts after the
Cut-off Date, but not including principal and interest due on or before the
Cut-off Date or any Excluded Spread. Each Contract will be identified in a
schedule appearing as an exhibit to the Pooling and Servicing Agreement. Such
schedule will specify, with respect to each Contract, among other things: the
original principal amount and the adjusted principal balance as of the close of
business on the Cut-off Date; the Mortgage Rate; the current scheduled monthly
level payment of principal and interest; and the maturity date of the Contract.

     In addition, the Depositor, the Servicer or the Master Servicer, as to each
Contract, will deliver or cause to be delivered to the Trustee, or, as specified
in the related Prospectus Supplement, the Custodian, the original

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<PAGE>
Contract and copies of documents and instruments related to each Contract and
the security interest in the Manufactured Home securing each Contract. The
Depositor, the Master Servicer or the Servicer will cause a UCC-1 financing
statement to be executed by the Depositor identifying the Trustee as the secured
party and identifying all Contracts as collateral. However, unless otherwise
specified in the related Prospectus Supplement, the Contracts will not be
stamped or otherwise marked to reflect their assignment from the Depositor to
the Trust and no recordings or filings will be made in the jurisdictions in
which the Manufactured Homes are located. See 'Certain Legal Aspects of Mortgage
Loans and Contracts -- The Contracts.'

REVIEW OF MORTGAGE LOAN OR CONTRACT DOCUMENTS

     The Trustee or the Custodian will hold such documents in trust for the
benefit of the Certificateholders and, generally within 45 days after receipt
thereof, will review such documents. Unless otherwise provided in the related
Prospectus Supplement, if any such document is found to be defective in any
material respect, the Trustee or such Custodian shall immediately notify the
Master Servicer or the Servicer, if any, and the Depositor, and if so specified
in the related Prospectus Supplement, the Master Servicer, the Servicer or the
Trustee shall immediately notify the Mortgage Collateral Seller. If the Mortgage
Collateral Seller (or, if so specified in the related Prospectus Supplement, the
Depositor) cannot cure such defect within 60 days (or within such other period
specified in the related Prospectus Supplement) after notice of the defect is
given to the Mortgage Collateral Seller (or, if applicable, the Depositor), the
Mortgage Collateral Seller (or, if applicable, the Depositor) will, not later
than 90 days after such notice (or within such other period specified in the
related Prospectus Supplement), either repurchase the related Mortgage Loan or
Contract or any property acquired in respect thereof from the Trustee or
substitute for such Mortgage Loan or Contract, a new Mortgage Loan or Contract
in accordance with the standards set forth herein. See 'The
Trusts -- Repurchases of Mortgage Collateral.' Unless otherwise specified in the
related Prospectus Supplement, the obligation to repurchase or substitute for a
Mortgage Loan or Contract constitutes the sole remedy available to the
Certificateholders or the Trustee for a material defect in a constituent
document.

ASSIGNMENT OF AGENCY SECURITIES

     The Depositor will transfer, convey and assign to the Trustee or its
nominee (which may be the Custodian) all right, title and interest of the
Depositor in the Agency Securities and other property to be included in the
Trust for a series. Such assignment will include all principal and interest due
on or with respect to the Agency Securities after the Cut-off Date (as defined
in the related Prospectus Supplement) (except for any Excluded Spread). The
Depositor will cause the Agency Securities to be registered in the name of the
Trustee or its nominee, and the Trustee will concurrently authenticate and
deliver the Certificates. Unless otherwise specified in the related Prospectus
Supplement, the Trustee will not be in possession of or be assignee of record of
any underlying assets for any Agency Security. Each Agency Security will be
identified in a schedule appearing as an exhibit to the related Pooling and
Servicing Agreement, which will specify as to each Agency Security the original
principal amount and outstanding principal balance as of the Cut-off Date; the
annual pass-through rate or interest rate for each Agency Security conveyed to
the Trustee.

SPREAD

     The Depositor, the Master Servicer or any of their affiliates, or such
other entity as may be specified in the related Prospectus Supplement may retain
or be paid a portion of interest due with respect to the related Mortgage
Collateral. The payment of any such portion of interest will be disclosed in the
related Prospectus Supplement. This payment may be in addition to any other
payment (such as the Servicing Fee) that any such entity is otherwise entitled
to receive with respect to the Mortgage Collateral. Any such payment in respect
of the Mortgage Collateral will represent a specified portion of the interest
payable thereon and, as specified in the related Prospectus Supplement, will
either be part of the assets transferred to the related Trust (the 'EXCESS
SPREAD') or will be excluded from the assets transferred to the related Trust
(the 'EXCLUDED SPREAD'). The interest portion of a Realized Loss and any partial
recovery of interest in respect of the Mortgage Collateral will be allocated
between the owners of any Excess Spread or Excluded Spread and the
Certificateholders entitled to payments of interest as provided in the
applicable Pooling and Servicing Agreement.

                                       23

<PAGE>
PAYMENTS ON MORTGAGE COLLATERAL

     The Trustee or the Master Servicer, if any, will, as to each series of
Certificates, establish and maintain in trust the Certificate Account which will
be a separate account that may be interest bearing or non-interest bearing in
the name of the Trustee, maintained with a depository institution and in a
manner acceptable to the nationally recognized statistical rating agency or
agencies (each, a 'RATING AGENCY') maintaining a rating on the Certificates of
such series. If permitted by each such Rating Agency, a Certificate Account may
contain funds relating to one or more series of Certificates.

     The Trustee, the Servicer or the Master Servicer, if any, will establish a
Custodial Account which will be a separate trust account, into which payments on
the Mortgage Collateral for such series may be transferred on a periodic basis
and from which funds may be transferred to the Certificate Account in order to
make payments to Certificateholders. The Custodial Account may contain funds
relating to more than one series of Certificates as well as payments received on
other mortgage loans serviced or master serviced by the Master Servicer or the
Servicer, as applicable. Amounts held in the Certificate Account or a Custodial
Account may be invested in Permitted Investments. See ' -- Collection of
Payments on Mortgage Loans and Contracts' below. In addition, if so stated in
such Prospectus Supplement, one or more other trust accounts, including any
Reserve Funds, will be established into which cash, certificates of deposit or
letters of credit, or a combination thereof, will be deposited by the Depositor,
if such assets are required to make timely distributions with respect to the
Certificates of a series, are required as a condition to the rating of such
Certificates or are required in order to provide for certain contingencies as
described in the related Prospectus Supplement.

  Collection of Payments on Mortgage Loans and Contracts

     Each Servicer or the Master Servicer, if any, will be required to deposit
into the Custodial Account (unless otherwise specified in the related Prospectus
Supplement) all amounts enumerated in the following paragraph in respect of the
Mortgage Loans or Contracts serviced by it, less the Servicing Fee and Excluded
Spread, if any.

     The Servicer or Master Servicer, as applicable, will deposit or will cause
to be deposited into the Custodial Account certain payments and collections
received by it subsequent to the Cut-off Date (other than payments due on or
before the Cut-off Date), as specifically set forth in the related Pooling and
Servicing Agreement, which (except as otherwise provided therein) generally will
include the following:

          (i) all payments on account of principal of the Mortgage Loans or
     Contracts comprising a Trust;

          (ii) all payments on account of interest on the Mortgage Loans
     comprising such Trust, net of the portion of each payment thereof retained
     by the Servicer or Subservicer, if any, as Excluded Spread, its servicing
     or other compensation;

          (iii) all amounts (net of unreimbursed liquidation expenses and
     insured expenses incurred, and unreimbursed Servicing Advances made, by the
     related Servicer or Subservicer) received and retained in connection with
     the liquidation of any defaulted Mortgage Loan or Contract, by foreclosure
     or otherwise ('LIQUIDATION PROCEEDS'), including all proceeds of any
     Special Hazard Insurance Policy, Bankruptcy Bond, Mortgage Pool Insurance
     Policy, Contract Pool Insurance Policy, Primary Insurance Policy and any
     title, hazard or other insurance policy covering any Mortgage Loan or
     Contract in such Trust (together with any payments under any Letter of
     Credit, 'INSURANCE PROCEEDS') or proceeds from any alternative arrangements
     established in lieu of any such insurance and described in the applicable
     Prospectus Supplement, other than proceeds to be applied to the restoration
     of the related property or released to the Mortgagor in accordance with the
     Master Servicer's or Servicer's normal servicing procedures;

          (iv) any Buy-Down Funds (and, if applicable, investment earnings
     thereon) required to be paid to Certificateholders, as described below;

          (v) all proceeds of any Mortgage Loan or Contract in such Trust
     purchased (or, in the case of a substitution, certain amounts representing
     a principal adjustment) by the Master Servicer, the Depositor, Residential
     Funding, any Subservicer or Mortgage Collateral Seller or any other person
     pursuant to the terms of the Pooling and Servicing Agreement. See 'The
     Trusts -- Representations with Respect to Mortgage Collateral' and
     ' -- Repurchases of Defective Mortgage Collateral' herein;

          (vi) any amount required to be deposited by the Master Servicer in
     connection with losses realized on investments of funds held in the
     Custodial Account, as described below; and

                                       24

<PAGE>
          (vii) any amounts required to be transferred from the Certificate
     Account to the Custodial Account.

     Both the Custodial Account and the Certificate Account must be either (i)
maintained with a depository institution whose debt obligations at the time of
any deposit therein are rated by any Rating Agency that rated any Certificates
of the related series not less than a specified level comparable to the rating
category of such Certificates, (ii) an account or accounts the deposits in which
are fully insured to the limits established by the FDIC, provided that any
deposits not so insured shall be otherwise maintained such that, as evidenced by
an opinion of counsel, the Certificateholders have a claim with respect to the
funds in such accounts or a perfected first priority security interest in any
collateral securing such funds that is superior to the claims of any other
depositors or creditors of the depository institution with which such accounts
are maintained, (iii) in the case of the Custodial Account, a trust account or
accounts maintained in either the corporate trust department or the corporate
asset services department of a financial institution which has debt obligations
that meet certain rating criteria, (iv) in the case of the Certificate Account,
a trust account or accounts maintained with the Trustee or (v) such other
account or accounts acceptable to any applicable Rating Agency (an 'ELIGIBLE
ACCOUNT'). The collateral that is eligible to secure amounts in an Eligible
Account is limited to certain permitted investments, which are generally limited
to United States government securities and other investments that are rated, at
the time of acquisition, in one of the categories permitted by the related
Pooling and Servicing Agreement ('PERMITTED INVESTMENTS').

     Unless otherwise set forth in the related Prospectus Supplement, not later
than the business day preceding each Distribution Date, the Master Servicer or
Servicer, as applicable, will withdraw from the Custodial Account and deposit
into the applicable Certificate Account, in immediately available funds, the
amount to be distributed therefrom to Certificateholders on such Distribution
Date. The Master Servicer, the Servicer or the Trustee, as applicable, will also
deposit or cause to be deposited into the Certificate Account: (i) the amount of
any advances made by the Master Servicer or the Servicer as described herein
under ' -- Advances,' (ii) any payments under any Letter of Credit, and any
amounts required to be transferred to the Certificate Account from a Reserve
Fund, as described under 'Description of Credit Enhancement' below, (iii) any
amounts required to be paid by the Master Servicer or Servicer out of its own
funds due to the operation of a deductible clause in any blanket policy
maintained by the Master Servicer or Servicer to cover hazard losses on the
Mortgage Loans as described under 'Insurance Policies on Mortgage Loans or
Contracts' below, (iv) any distributions received on any Agency Securities
included in the Trust and (v) any other amounts as set forth in the related
Pooling and Servicing Agreement.

     The portion of any payment received by the Master Servicer or the Servicer
in respect of a Mortgage Loan that is allocable to Excess Spread or Excluded
Spread, as applicable, will generally be deposited into the Custodial Account,
but any Excluded Spread will not be deposited in the Certificate Account for the
related series of Certificates and will be distributed as provided in the
related Pooling and Servicing Agreement.

     Funds on deposit in the Custodial Account may be invested in Permitted
Investments maturing in general not later than the business day preceding the
next Distribution Date and funds on deposit in the related Certificate Account
may be invested in Permitted Investments maturing, in general, no later than the
Distribution Date. Unless otherwise specified in the related Prospectus
Supplement, all income and gain realized from any such investment will be for
the account of the Servicer or the Master Servicer as additional servicing
compensation. The amount of any loss incurred in connection with any such
investment must be deposited in the Custodial Account or in the Certificate
Account, as the case may be, by the Servicer or the Master Servicer out of its
own funds upon realization of such loss.

  Collection of Payments on Agency Securities

     The Trustee or the Certificate Administrator, as specified in the related
Prospectus Supplement, will deposit in the Certificate Account all payments on
the Agency Securities as they are received after the Cut-off Date. If the
Trustee has not received a distribution with respect to any Agency Security by
the second business day after the date on which such distribution was due and
payable, the Trustee will request the issuer or guarantor, if any, of such
Agency Security to make such payment as promptly as possible and legally
permitted. The Trustee may take such legal action against such issuer or
guarantor as the Trustee deems appropriate under the circumstances, including
the prosecution of any claims in connection therewith. The reasonable legal fees
and expenses incurred by the Trustee in connection with the prosecution of such
legal action will be reimbursable to the Trustee out of the proceeds of any such
action and will be retained by the Trustee prior to the deposit of any

                                       25

<PAGE>
remaining proceeds in the Certificate Account pending distribution thereof to
the Certificateholders of the affected series. In the event that the Trustee has
reason to believe that the proceeds of any such legal action may be insufficient
to cover its projected legal fees and expenses, the Trustee will notify such
Certificateholders that it is not obligated to pursue any such available
remedies unless adequate indemnity for its legal fees and expenses is provided
by such Certificateholders.

WITHDRAWALS FROM THE CUSTODIAL ACCOUNT

     The Servicer or the Master Servicer, as applicable, may, from time to time,
make withdrawals from the Custodial Account for certain purposes, as
specifically set forth in the related Pooling and Servicing Agreement, which
(except as otherwise provided therein) generally will include the following:

          (i) to make deposits to the Certificate Account in the amounts and in
     the manner provided in the Pooling and Servicing Agreement and described
     above under ' -- Payments on Mortgage Collateral;'

          (ii) to reimburse itself or any Subservicer for Advances, or for
     amounts advanced in respect of taxes, insurance premiums or similar
     expenses incurred in connection with acquiring by foreclosure or deed in
     lieu of foreclosure property securing a Mortgage Loan, including, if the
     Master Servicer and any affiliate of the Master Servicer provides services
     such as appraisals and brokerage services that are customarily provided by
     persons other than servicers of mortgage loans, reasonable compensation for
     such services ('SERVICING ADVANCES') as to any such Mortgaged Property, out
     of late payments, Insurance Proceeds, Liquidation Proceeds, any proceeds in
     respect of any REO Mortgage Loan or collections on the Mortgage Loan or
     Contract with respect to which such Advances or Servicing Advances were
     made;

          (iii) to pay to itself or any Subservicer unpaid Servicing Fees and
     subservicing fees, out of payments or collections of interest on each
     Mortgage Loan or Contract;

          (iv) to pay to itself as additional servicing compensation any
     investment income on funds deposited in the Custodial Account, any amounts
     remitted by Subservicers as interest in respect of partial prepayments on
     the Mortgage Loans or Contracts, and, if so provided in the Pooling and
     Servicing Agreement, any profits realized upon disposition of property
     securing a Mortgage Loan acquired by deed in lieu of foreclosure or
     repossession or otherwise allowed under the Pooling and Servicing
     Agreement;

          (v) to pay to itself, a Subservicer, Residential Funding, the
     Depositor or the Mortgage Collateral Seller all amounts received with
     respect to each Mortgage Loan or Contract purchased, repurchased or removed
     pursuant to the terms of the Pooling and Servicing Agreement and not
     required to be distributed as of the date on which the related Purchase
     Price is determined;

          (vi) to pay the Depositor or its assignee, or any other party named in
     the related Prospectus Supplement, all amounts allocable to the Excluded
     Spread, if any, out of collections or payments which represent interest on
     each Mortgage Loan or Contract (including any Mortgage Loan or Contract as
     to which title to the underlying Mortgaged Property was acquired);

          (vii) to reimburse itself or any Subservicer for any Advance
     previously made which the Master Servicer has determined to not be
     ultimately recoverable from Liquidation Proceeds, Insurance Proceeds or
     otherwise (a 'NONRECOVERABLE ADVANCE'), subject to any limitations set
     forth in the Pooling and Servicing Agreement as described in the related
     Prospectus Supplement;

          (viii) to reimburse itself or the Depositor for certain other expenses
     incurred for which it or the Depositor is entitled to reimbursement
     (including reimbursement in connection with enforcing any repurchase,
     substitution or indemnification obligation of any Seller) or against which
     it or the Depositor is indemnified pursuant to the Pooling and Servicing
     Agreement;

          (ix) to withdraw any amount deposited in the Custodial Account that
     was not required to be deposited therein; and

          (x) to clear the Custodial Account of amounts relating to the
     corresponding Mortgage Loans or Contracts in connection with the
     termination of the Trust pursuant to the Pooling and Servicing Agreement,
     as described in 'The Pooling and Servicing Agreement -- Termination;
     Retirement of Certificates.'

                                       26

<PAGE>
DISTRIBUTIONS

     Distributions of principal and interest (or, where applicable, of principal
only or interest only) on each class of Certificates entitled thereto will be
made on the 25th day (or, if such day is not a business day, the next business
day) of each month, commencing in the month following the month in which the
Cut-off Date, occurs or such other date as may be specified in the related
Prospectus Supplement (each, a 'DISTRIBUTION DATE') either by the Trustee, the
Master Servicer or the Certificate Administrator acting on behalf of the Trustee
or a paying agent appointed by the Trustee (the 'PAYING AGENT'). Such
distributions will be made to the persons who are registered as the holders of
such Certificates at the close of business on the last business day of the
preceding month (the 'RECORD DATE'). Distributions will be made in immediately
available funds (by wire transfer or otherwise) to the account of a
Certificateholder at a bank or other entity having appropriate facilities
therefor, if such Certificateholder has so notified the Trustee, the Master
Servicer, the Certificate Administrator or the Paying Agent, as the case may be,
and the applicable Pooling and Servicing Agreement or Trust Agreement provides
for such form of payment, or by check mailed to the address of the person
entitled thereto as it appears on the Certificate Register. The final
distribution in retirement of the Certificates will be made only upon
presentation and surrender of the Certificates at the office or agency of the
Trustee specified in the notice to Certificateholders. Distributions will be
made to each Certificateholder in accordance with such holder's Percentage
Interest in a particular class. The 'PERCENTAGE INTEREST' represented by a
Certificate of a particular class will be equal to the percentage obtained by
dividing the initial principal balance or notional amount of such Certificate by
the aggregate initial amount or notional balance of all the Certificates of such
class.

  Principal and Interest on the Certificates

     The method of determining, and the amount of, distributions of principal
and interest (or, where applicable, of principal only or interest only) on a
particular series of Certificates will be described in the related Prospectus
Supplement. Distributions of interest on each class of Certificates will be made
prior to distributions of principal thereon. Each class of Certificates (other
than certain classes of Strip Certificates) may be entitled to different
distributions of interest based on a specified interest rate or rates (each, a
'PASS-THROUGH RATE'), which may be a fixed, variable or adjustable Pass-Through
Rate, or any combination of two or more such Pass-Through Rates. The related
Prospectus Supplement will specify the Pass-Through Rate or Rates for each
class, or the initial Pass-Through Rate or Rates and the method for determining
the Pass-Through Rate or Rates. Unless otherwise specified in the related
Prospectus Supplement, interest on the Certificates will accrue during each
calendar month and will be payable on the Distribution Date in the following
calendar month. Unless otherwise specified in the related Prospectus Supplement,
interest on the Certificates will be calculated on the basis of a 360-day year
consisting of twelve 30-day months.

     On each Distribution Date for a series of Certificates, the Trustee or the
Master Servicer or the Certificate Administrator on behalf of the Trustee will
distribute or cause the Paying Agent to distribute, as the case may be, to each
holder of record on the Record Date of a class of Certificates, an amount equal
to the Percentage Interest represented by the Certificate held by such holder
multiplied by such class's Distribution Amount. The 'DISTRIBUTION AMOUNT' for a
class of Certificates for any Distribution Date will be the portion, if any, of
the amount to be distributed to such class for such Distribution Date in respect
of principal, plus, if such class is entitled to payments of interest on such
Distribution Date, interest accrued during the related interest accrual period
at the applicable Pass-Through Rate on the principal balance or notional amount
of such class specified in the applicable Prospectus Supplement, less certain
interest shortfalls, which generally will include (i) any Deferred Interest
added to the principal balance of the Mortgage Loans and/or the outstanding
balance of one or more classes of Certificates on the related Due Date, (ii) any
other interest shortfalls (including, without limitation, shortfalls resulting
from application of the Relief Act or similar legislation or regulations as in
effect from time to time) allocable to Certificateholders which are not covered
by advances or the applicable credit enhancement and (iii) unless otherwise
specified in the related Prospectus Supplement, Prepayment Interest Shortfalls,
in each case in such amount that is allocated to such class on the basis set
forth in the Prospectus Supplement.

     In the case of a series of Certificates which includes two or more classes
of Certificates, the timing, sequential order, priority of payment or amount of
distributions in respect of principal, and any schedule or formula or other
provisions applicable to the determination thereof (including distributions
among multiple classes of Senior Certificates or Subordinate Certificates) shall
be set forth in the related Prospectus Supplement.

                                       27

<PAGE>
Distributions in respect of principal of any class of Certificates will be made
on a pro rata basis among all of the Certificates of such class unless otherwise
set forth in the related Prospectus Supplement.

     Except as otherwise provided in the related Pooling and Servicing
Agreement, on or prior to the 20th day (or, if such day is not a business day,
the next business day) of the month of distribution (the 'DETERMINATION DATE'),
the Master Servicer or the Certificate Administrator, as applicable, will
determine the amounts of principal and interest which will be passed through to
Certificateholders on the succeeding Distribution Date. Prior to the close of
business on the business day succeeding each Determination Date, the Master
Servicer or the Certificate Administrator, as applicable, will furnish a
statement to the Trustee (the information in such statement to be made available
to Certificateholders by the Master Servicer or the Certificate Administrator,
as applicable, on request) setting forth, among other things, the amount to be
distributed on the next succeeding Distribution Date.

  Example of Distributions

     The following chart sets forth an example of the flow of funds as it would
relate to a hypothetical series of Certificates issued, and with a Cut-off Date
occurring, in March 1999:

<TABLE>
<CAPTION>
              DATE                 NOTE                      DESCRIPTION
              ----                 -----                     -----------

<S>                                <C>    <C>
March 1..........................  (A)    Cut-off Date.
March 2-31.......................  (B)    The Servicers or the Subservicers, as applicable, receive any
                                          Principal Prepayments.
March 31.........................  (C)    Record Date.
March 2-April 1..................  (D)    The due dates on which scheduled payments and Mortgage Loans or
                                          Contracts are due (each, a 'DUE DATE' and collectively, the
                                          'DUE PERIOD').
April 16.........................  (E)    The Master Servicer or the Servicer, as applicable, receives
                                          scheduled payments of principal and interest due during the
                                          related Due Period and received or advanced by Servicers or
                                          Subservicers.
April 20.........................  (F)    Determination Date.
April 26.........................  (G)    Distribution Date.
</TABLE>

Succeeding months follow the pattern of (B) through (G), except that for
succeeding months (B) will also include the first day of such month. Certain
series of Certificates may have different prepayment periods, Cut-off Dates,
Record Dates, Due Periods, remittance dates, Determination Dates and/or
Distribution Dates than those set forth above.

------------

(A) The initial principal balance of the Mortgage Pool or Contract Pool will be
    the aggregate principal balance of the Mortgage Loans or Contracts at the
    close of business on March 1, after deducting principal payments due on or
    before such date. Those principal payments due on or before March 1, and the
    accompanying interest payments, and any Principal Prepayments received as of
    the close of business on March 1 are not part of the Mortgage Pool or
    Contract Pool and will not be passed through to Certificateholders.

(B) Any principal payments received in advance of the scheduled Due Date for a
    Mortgage Loan and not accompanied by a payment of interest for any period
    following the date of payment ('PRINCIPAL PREPAYMENTS') may be received at
    any time during this period and will be remitted to the Master Servicer or
    Servicer as described in (E) below for distribution to Certificateholders as
    described in (F) below. When a Mortgage Loan or Contract is prepaid in full,
    interest on the amount prepaid is collected from the Mortgagor only to the
    date of payment. Partial Principal Prepayments are applied so as to reduce
    the principal balances of the related Mortgage Loans or Contracts as of the
    first day of the month in which the payments are made; no interest will be
    paid to Certificateholders in respect of such prepaid amounts for the month
    in which such partial Principal Prepayments were received.

(C) Distributions on April 26 (because April 25, 1999 is not a business day)
    will be made to Certificateholders of record at the close of business on
    March 31.

                                       28

<PAGE>
(D) Scheduled principal and interest payments are due from Mortgagors.

(E) Payments due from Mortgagors during the related Due Period will be deposited
    by the Subservicers in subservicing accounts or Servicers in collection
    accounts (or will be otherwise managed in a manner acceptable to the Rating
    Agencies) as received and will include the scheduled principal payments plus
    interest on the principal balances immediately prior to such payments. Funds
    required to be remitted from the collection accounts or the subservicing
    accounts to the Master Servicer or the Servicer, as applicable, will be so
    remitted on April 16 (because April 18, 1999 is not a business day) together
    with any required Advances by the Servicer or the Subservicers (except that
    Principal Prepayments in full and certain Principal Prepayments in part
    received by Subservicers during the month of March will have been remitted
    to the Master Servicer or the Servicer, as applicable, within five business
    days of receipt).

(F) On April 20, the Master Servicer or the Certificate Administrator, if any,
    will determine the amounts of principal and interest which will be passed
    through on April 26 to the holders of each class of Certificates. The Master
    Servicer or the Certificate Administrator, if any, will be obligated to
    distribute those payments due during the related Due Period which have been
    received from Servicers or Subservicers prior to and including April 16, as
    well as all Principal Prepayments received on Mortgage Loans in March (with
    interest adjusted to the Pass-Through Rates applicable to the respective
    classes of Certificates and reduced on account of Principal Prepayments as
    described above). Distributions to the holders of Senior Certificates, if
    any, on April 26 may include certain amounts otherwise distributable to the
    holders of the related Subordinate Certificates, amounts withdrawn from any
    Reserve Fund and amounts advanced by the Master Servicer or the Servicer
    under the circumstances described in 'Subordination' and ' -- Advances.'

(G) On April 26, the amounts determined on April 20 will be distributed to
    Certificateholders.

     If provided in the related Prospectus Supplement, the Distribution Date
with respect to any series of Certificates as to which the Trust includes Agency
Securities may be a specified date or dates other than the 25th day of each
month in order to allow for the receipt of distributions on such Agency
Securities.

ADVANCES

     Unless otherwise specified in the related Prospectus Supplement, the Master
Servicer or the applicable Servicer will agree to advance (either out of its own
funds, funds advanced to it by Servicers or Subservicers, as applicable, or
funds being held in the Custodial Account for future distribution), for the
benefit of the related Certificateholders, on or before each Distribution Date,
an amount equal to the aggregate of all scheduled payments of principal (other
than any Balloon Amount in the case of a Balloon Loan) and interest at the
applicable Pass-Through Rate or Net Mortgage Rate, as the case may be (an
'ADVANCE'), which were delinquent as of the close of business on the business
day preceding the related Determination Date on the related Mortgage Loans or
Contracts, but only to the extent that such Advances would, in the judgment of
the Master Servicer or the Servicer, be recoverable out of late payments by the
Mortgagors, Liquidation Proceeds, Insurance Proceeds or otherwise. If a Trust
includes Agency Securities, any advancing obligations with respect to underlying
Mortgage Loans or Contracts will be pursuant to the terms of such Agency
Securities and may differ from the provisions relating to Advances described
herein.

     Advances are intended to maintain a regular flow of scheduled interest and
principal payments to related Certificateholders. Such Advances do not represent
an obligation of the Master Servicer or the Servicer to guarantee or insure
against losses. If Advances have been made by the Master Servicer or Servicer
from cash being held for future distribution to Certificateholders, such funds
will be required to be replaced on or before any future Distribution Date to the
extent that funds in the Certificate Account on such Distribution Date would be
less than payments required to be made to Certificateholders. Any Advances will
be reimbursable to the Master Servicer or Servicer out of recoveries on the
related Mortgage Loans or Contracts for which such amounts were advanced (e.g.,
late payments made by the related Mortgagor, any related Liquidation Proceeds
and Insurance Proceeds, proceeds of any applicable form of credit enhancement or
proceeds of any Mortgage Collateral purchased by the Depositor, Residential
Funding, a Subservicer or a Mortgage Collateral Seller under the circumstances
described above). Such Advances will also be reimbursable from cash otherwise
distributable to Certificateholders to the extent that the Master Servicer or
Servicer shall determine that any such Advances previously made are not
ultimately recoverable as described above. With respect to any
Senior/Subordinate Series, so long as the related Subordinate Certificates
remain outstanding and subject to certain limitations with

                                       29

<PAGE>
respect to Special Hazard Losses, Fraud Losses, Bankruptcy Losses and
Extraordinary Losses, such Advances may also be reimbursable out of amounts
otherwise distributable to holders of the Subordinate Certificates, if any. The
Master Servicer or the Servicer will also be obligated to make Servicing
Advances, to the extent recoverable out of Liquidation Proceeds or otherwise, in
respect of certain taxes and insurance premiums not paid by Mortgagors on a
timely basis. Funds so advanced will be reimbursable to the Master Servicer or
Servicer to the extent permitted by the Pooling and Servicing Agreement. The
Master Servicer's or Servicer's obligation to make Advances may be supported by
another entity, a letter of credit or other method as may be described in the
related Pooling and Servicing Agreement. In the event that the short-term or
long-term obligations of the provider of such support are downgraded by a Rating
Agency rating the related Certificates or if any collateral supporting such
obligation is not performing or is removed pursuant to the terms of any
agreement described in the related Prospectus Supplement, the Certificates may
also be downgraded.

PREPAYMENT INTEREST SHORTFALLS

     When a Mortgagor prepays a Mortgage Loan or Contract in full between
scheduled Due Dates for such Mortgage Loan or Contract, the Mortgagor pays
interest on the amount prepaid only to but not including the date on which such
Principal Prepayment is made. Similarly, Liquidation Proceeds from a Mortgaged
Property will not include interest for any period after the date on which the
liquidation took place. The shortfall between a full month's interest due with
respect to a Mortgage Loan or Contract and the amount of interest paid or
recovered with respect thereto in the event of a prepayment or liquidation is
referred to as a 'PREPAYMENT INTEREST SHORTFALL.' If so specified in the related
Prospectus Supplement, to the extent funds are available from the Servicing Fee,
the Servicer or Master Servicer may make an additional payment to
Certificateholders with respect to any Mortgage Loan or Contract that was
prepaid in full during the related prepayment period equal to the amount, if
any, necessary to assure that, on the related Distribution Date, the Available
Distribution Amount would include with respect to each such Mortgage Loan or
Contract an amount equal to interest at the Mortgage Rate (less the Servicing
Fee and Excluded Spread, if any) for such Mortgage Loan or Contract from the
date of such prepayment to the related Due Date (such amount, 'COMPENSATING
INTEREST'). Compensating Interest may be limited to the aggregate amount (or any
portion thereof) of the Servicing Fee received by the Servicer or Master
Servicer in that month in relation to the Mortgage Loans or Contracts, or in any
other manner, and, if so limited, may not be sufficient to cover the Prepayment
Interest Shortfall. If so disclosed in the related Prospectus Supplement,
Prepayment Interest Shortfalls may be applied to reduce interest otherwise
payable with respect to one or more classes of Certificates of a series. See
'Yield Considerations.'

REPORTS TO CERTIFICATEHOLDERS

     On each Distribution Date, the Master Servicer or the Certificate
Administrator, as applicable, will forward or cause to be forwarded to each
Certificateholder of record a statement or statements with respect to the
related Trust setting forth the information described in the related Pooling and
Servicing Agreement. Except as otherwise provided in the related Pooling and
Servicing Agreement, such information generally will include the following (as
applicable):

          (i) the amount, if any, of such distribution allocable to principal;

          (ii) the amount, if any, of such distribution allocable to interest
     and the amount, if any, of any shortfall in the amount of interest and
     principal;

          (iii) the aggregate unpaid principal balance of the Mortgage
     Collateral after giving effect to the distribution of principal on such
     Distribution Date;

          (iv) the outstanding principal balance or notional amount of each
     class of Certificates after giving effect to the distribution of principal
     on such Distribution Date;

          (v) based on the most recent reports furnished by Servicers or
     Subservicers, the number and aggregate principal balances of any items of
     Mortgage Collateral in the related Trust that are delinquent (a) one month,
     (b) two months and (c) three months, and that are in foreclosure;

          (vi) the book value of any property acquired by such Trust through
     foreclosure or grant of a deed in lieu of foreclosure;

          (vii) the balance of the Reserve Fund, if any, at the close of
     business on such Distribution Date;

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          (viii) the Senior Percentage, if applicable, after giving effect to
     the distributions on such Distribution Date;

          (ix) the amount of coverage under any Letter of Credit, Mortgage Pool
     Insurance Policy or other form of credit enhancement covering default risk
     as of the close of business on the applicable Determination Date and a
     description of any credit enhancement substituted therefor;

          (x) if applicable, the Special Hazard Amount, Fraud Loss Amount and
     Bankruptcy Amount as of the close of business on the applicable
     Distribution Date and a description of any change in the calculation of
     such amounts;

          (xi) in the case of Certificates benefiting from alternative credit
     enhancement arrangements described in a Prospectus Supplement, the amount
     of coverage under such alternative arrangements as of the close of business
     on the applicable Determination Date; and

          (xii) with respect to any series of Certificates as to which the Trust
     includes mortgage pass-through certificates representing whole or partial
     interests in pools of Mortgage Loans, Contracts or Agency Securities,
     certain additional information as required under the related Pooling and
     Servicing Agreement.

     Each amount set forth pursuant to clause (i) or (ii) above will be
expressed as a dollar amount per Single Certificate. As to a particular class of
Certificates, a 'SINGLE CERTIFICATE' generally will evidence a Percentage
Interest obtained by dividing $1,000 by the initial principal balance or
notional balance of all the Certificates of such class, except as otherwise
provided in the related Pooling and Servicing Agreement. In addition to the
information described above, reports to Certificateholders will contain such
other information as is set forth in the applicable Pooling and Servicing
Agreement, which may include, without limitation, information as to Advances,
reimbursements to Subservicers, Servicers and the Master Servicer and losses
borne by the related Trust.

     In addition, within a reasonable period of time after the end of each
calendar year, the Master Servicer or the Certificate Administrator, as
applicable, will furnish a report to each person that was a holder of record of
any class of Certificates at any time during such calendar year. Such report
will include information as to the aggregate of amounts reported pursuant to
clauses (i) and (ii) above for such calendar year or, in the event such person
was a holder of record of a class of Certificates during a portion of such
calendar year, for the applicable portion of such year.

SERVICING AND ADMINISTRATION OF MORTGAGE COLLATERAL

  General

     The Master Servicer, the Certificate Administrator or any Servicer, as
applicable, that is a party to a Pooling and Servicing Agreement, will be
required to perform the services and duties specified in the related Pooling and
Servicing Agreement. The duties to be performed by the Master Servicer or each
Servicer, subject to the general supervision by the Master Servicer or the
Certificate Administrator, if any, will include the customary functions of a
servicer, including collection of payments from Mortgagors; maintenance of any
primary mortgage insurance, hazard insurance and other types of insurance;
processing of assumptions or substitutions; attempting to cure delinquencies;
supervising foreclosures; inspection and management of Mortgaged Properties
under certain circumstances; and maintaining accounting records relating to the
Mortgage Collateral. Each Servicer or the Master Servicer, if any, may be
obligated, under certain circumstances, to make Advances in respect of
delinquent installments of principal of and interest on Mortgage Loans or
Contracts and in respect of certain taxes and insurance premiums not paid on a
timely basis by Mortgagors, as described under ' -- Advances' above. With
respect to any series of Certificates for which the Trust includes Agency
Securities, the Master Servicer's or Certificate Administrator's servicing and
administration obligations will be set forth in the related Prospectus
Supplement.

     Pursuant to each Pooling and Servicing Agreement, each Servicer or the
Master Servicer, if there are no Servicers for the related series, may enter
into Subservicing agreements (each, a 'SUBSERVICING AGREEMENT') with one or more
Subservicers (each, a 'SUBSERVICER') who will agree to perform certain functions
for the Servicer or Master Servicer relating to the servicing and administration
of the Mortgage Loans or Contracts included in the Trust relating to such
Subservicing Agreement. Under any Subservicing Agreement, each Subservicer, will
agree, among other things, to perform some or all of the Servicer's or the
Master Servicer's

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servicing obligations, including but not limited to, making Advances to the
related Certificateholders. The Servicer or the Master Servicer, as applicable,
will remain liable for its servicing obligations that are delegated to a
Subservicer as if such Servicer or the Master Servicer alone were servicing such
Mortgage Loans or Contracts.

  Collection and Other Servicing Procedures

     Each Servicer or the Master Servicer, as applicable, will make reasonable
efforts to collect all payments called for under the Mortgage Loans or Contracts
and will, consistent with the related Pooling and Servicing Agreement and any
applicable insurance policy or other credit enhancement, follow such collection
procedures as it follows with respect to mortgage loans or contracts serviced by
it that are comparable to the Mortgage Loans or Contracts. The Servicer or the
Master Servicer may, in its discretion, waive any prepayment charge in
connection with the prepayment of a Mortgage Loan or extend the due dates for
payments due on a Mortgage Note or Contract, provided that the insurance
coverage for such Mortgage Loan or Contract or any coverage provided by any
alternative credit enhancement will not be adversely affected.

     In connection with any significant partial prepayment of a Mortgage Loan,
the Master Servicer, to the extent not inconsistent with the terms of the
Mortgage Note and local law and practice, may permit the Mortgage Loan to be
re-amortized such that the monthly payment is recalculated as an amount that
will fully amortize the remaining principal amount thereof by the original
maturity date based on the original Mortgage Rate, provided that such
re-amortization shall not be permitted if it would constitute a modification of
the Mortgage Loan for federal income tax purposes.

     The Master Servicer, any Servicer or one or more Subservicers with respect
to a given Trust may establish and maintain an escrow account (the 'ESCROW
ACCOUNT') in which Mortgagors will be required to deposit amounts sufficient to
pay taxes, assessments, certain mortgage and hazard insurance premiums and other
comparable items. Withdrawals from any such Escrow Account may be made to effect
timely payment of taxes, assessments, mortgage and hazard insurance, to refund
to Mortgagors amounts determined to be owed, to pay interest on balances in any
such Escrow Account, if required, to repair or otherwise protect the Mortgaged
Properties and to clear and terminate such account. The Master Servicer or any
Servicer or Subservicer, as the case may be, will be responsible for the
administration of each such Escrow Account and will be obligated to make
advances to such accounts when a deficiency exists therein. The Master Servicer,
Servicer or Subservicer will be entitled to reimbursement for any such advances
from the related collection account.

     Other duties and responsibilities of each Servicer, the Master Servicer and
the Certificate Administrator are described above under ' -- Payments on
Mortgage Collateral.'

  Servicing Compensation and Payment of Expenses

     Each Servicer, the Master Servicer or the Certificate Administrator, as
applicable, will be paid compensation for the performance of its servicing
obligations, which compensation will be part of the servicing fee (the
'SERVICING FEE') specified in the related Prospectus Supplement. Any Subservicer
will be entitled to receive a portion of the Servicing Fee. Except as otherwise
provided in the related Prospectus Supplement, the Servicer or the Master
Servicer, if any, will deduct the Servicing Fee with respect to the Mortgage
Loans or Contracts underlying the Certificates of a Series in an amount to be
specified in the related Prospectus Supplement. The Servicing Fee may be fixed
or variable. In addition to the Servicing Fee, unless otherwise specified in the
related Prospectus Supplement, the Master Servicer, any Servicer or the relevant
Subservicers, if any, will be entitled to servicing compensation in the form of
assumption fees, late payments charges or excess proceeds following disposition
of property in connection with defaulted Mortgage Loans or Contracts and any
earnings on investments held in the Certificate Account or any Custodial
Account. Any Excluded Spread retained by a Mortgage Collateral Seller, the
Master Servicer, or any Servicer or Subservicer will not constitute part of the
Servicing Fee. Notwithstanding the foregoing, with respect to a series of
Certificates as to which the Trust includes Agency Securities, the compensation
payable to the Master Servicer or Certificate Administrator for servicing and
administering such Agency Securities on behalf of the holders of such
Certificates may be based on a percentage per annum described in the related
Prospectus Supplement of the outstanding balance of such Agency Securities and
may be retained from distributions of interest thereon, if so specified in the
related Prospectus Supplement.

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     Unless otherwise specified in the related Prospectus Supplement, the
Servicer, the Master Servicer or the Certificate Administrator will pay from the
Servicing Fee (i) the fees of any Subservicers, (ii) certain expenses incurred
in connection with the servicing of the Mortgage Loans or Contracts, including,
without limitation, payment of certain of the insurance policy premiums, fees or
other amounts payable for any alternative credit enhancement, reimbursement of
expenses incurred in connection with a foreclosure or deed in lieu of
foreclosure upon a Mortgaged Property, payment of the fees and disbursements of
the Trustee (and any Custodian selected by the Trustee), the Certificate
Registrar, any Paying Agent, independent accountants and payment of expenses
incurred in enforcing the obligations of Subservicers, Servicers and Mortgage
Collateral Sellers and (iii) expenses related to the preparation of reports to
Certificateholders. Certain of these expenses may be reimbursable from
Liquidation Proceeds or insurance policies and, in the case of enforcement of
the obligations of Subservicers, from any recoveries in excess of amounts due
with respect to the related Mortgage Loans or Contracts or from specific
recoveries of costs. The related Pooling and Servicing Agreement may provide
that the Certificate Administrator, the Master Servicer, and any Servicer and
Subservicer may obtain their respective fees by deducting them from amounts
otherwise required to be deposited into the related collection account.

     The related Trust will suffer no loss by reason of the expenses of the
Servicer or Master Servicer described above to the extent claims are fully paid
from amounts in any Reserve Fund, any related insurance policies, the
Liquidation Proceeds, any proceeds in respect of an REO Mortgage Loan (with
respect to expenses incurred in connection with a foreclosure or deed in lieu of
foreclosure) or any applicable alternative credit enhancement described in the
related Prospectus Supplement. In the event, however, that claims are either not
made or are not fully paid from such sources, the related Trust will suffer a
loss to the extent that Liquidation Proceeds, after reimbursement of the
expenses of the Master Servicer or any Servicer or Subservicer, are less than
the principal balance of and accrued interest on the related Mortgage Loan or
Contract. In addition, the Master Servicer or any Servicer or Subservicer, as
applicable, will be entitled to reimbursement of expenditures incurred by it in
connection with the restoration of Mortgaged Property, such right of
reimbursement being prior to the rights of the Certificateholders to receive any
payments from any Reserve Fund or from any related Insurance Proceeds,
Liquidation Proceeds or any proceeds of alternative credit enhancement.

  Evidence as to Compliance

     Each Pooling and Servicing Agreement will provide that the Master Servicer
or Certificate Administrator, as appropriate, will, with respect to each series
of Certificates, deliver to the Trustee, on or before the date in each year
specified in the related Pooling and Servicing Agreement, an officer's
certificate stating that (i) a review of the activities of the Master Servicer
(or the Certificate Administrator) during the preceding calendar year relating
to its servicing of mortgage loans and its performance under pooling and
servicing agreements, including such Pooling and Servicing Agreement has been
made under the supervision of such officer, (ii) to the best of such officer's
knowledge, based on such review, the Master Servicer (or the Certificate
Administrator) has complied in all material respects with the minimum servicing
standards set forth in the Uniform Single Attestation Program for Mortgage
Bankers and has fulfilled all its obligations under such Pooling and Servicing
Agreement throughout such year, or, if there has been material noncompliance
with such servicing standards or a material default in the fulfillment of any
such obligation, such statement shall include a description of such
noncompliance or specify each such default known to such officer and the nature
and status thereof and (iii) to the best of such officer's knowledge, each
Subservicer has complied in all material respects with the minimum servicing
standards set forth in the Uniform Single Attestation Program for Mortgage
Bankers and has fulfilled all of its material obligations under its Subservicing
Agreement in all material respects throughout such year, or, if there has been
material noncompliance with such servicing standards or a material default in
the fulfillment of such obligations, such statement shall include a description
of such noncompliance or specify each such default, as the case may be, known to
such officer and the nature and status thereof. In addition, each Pooling and
Servicing Agreement will provide that the Master Servicer or the Certificate
Administrator, as the case may be, will cause a firm of independent public
accountants which is a member of the American Institute of Certified Public
Accountants to furnish a report stating its opinion that, on the basis of an
examination conducted by such firm substantially in accordance with standards
established by the American Institute of Certified Public Accountants, the
assertions made regarding compliance with the minimum servicing standards set
forth in the Uniform Single Attestation Program for Mortgage Bankers during the
preceding calendar year are fairly stated in all material respects, subject to
such exceptions and other qualifications that, in the opinion of such firm, such

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<PAGE>
accounting standards require it to report. In rendering such statement, such
firm may rely, as to matters relating to the direct servicing of mortgage loans
by Subservicers, on comparable statements prepared in connection with
examinations conducted in similar manners.

  Certain Other Matters Regarding Servicing

     Each Servicer, the Master Servicer or the Certificate Administrator, as
applicable, may not resign from its obligations and duties under the related
Pooling and Servicing Agreement unless each Rating Agency has confirmed in
writing that the resignation will not qualify, reduce or cause to be withdrawn
the then current ratings on the Certificates or upon a determination that its
duties thereunder are no longer permissible under applicable law. No such
resignation will become effective until the Trustee or a successor servicer or
administrator has assumed the Servicer's, the Master Servicer's or the
Certificate Administrator's obligations and duties under such Pooling and
Servicing Agreement. A Servicer, the Master Servicer or the Certificate
Administrator, as applicable, may be removed upon the occurrence of certain
Events of Default described below under 'The Pooling and Servicing
Agreement -- Events of Default' and ' -- Rights Upon Event of Default.'

     Each Pooling and Servicing Agreement will also provide that neither the
Servicer, the Master Servicer or the Certificate Administrator, nor any
director, officer, employee or agent thereof, will be under any liability to the
Trust or the Certificateholders for any action taken or for restraining from
taking any action in good faith pursuant to the Pooling and Servicing Agreement,
or for errors in judgment. However, neither the Servicer, the Master Servicer or
the Certificate Administrator nor any such person will be protected against any
liability which would otherwise be imposed by reason of the failure to perform
its obligations in compliance with any standard of care set forth in the Pooling
and Servicing Agreement. The Servicer, the Master Servicer or the Certificate
Administrator, as applicable, may, in its discretion, undertake any such action
that 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
interest of the Certificateholders thereunder. In such event, the legal expenses
and costs of such action and any liability resulting therefrom will be expenses,
costs and liabilities of the Trust and the Servicer, the Master Servicer or the
Certificate Administrator will be entitled to be reimbursed therefor out of
funds otherwise distributable to Certificateholders.

     The Master Servicer or Servicer may in its discretion (i) waive any late
payment charge or any prepayment charge or penalty interest in connection with
the prepayment of a Mortgage Loan or Contract and (ii) extend the Due Date for
payments due on a Mortgage Loan or Contract, if the Master Servicer or Servicer
has determined that any such waiver or extension will not impair the coverage of
any related insurance policy, materially adversely affect the lien of the
related Mortgage or, if a REMIC election has been made with respect to the
Trust, adversely affect such REMIC status. The Master Servicer or Servicer may
also waive or modify any term of a Mortgage Loan so long as the Master Servicer
or Servicer has determined that such waiver or modification is not materially
adverse to any Certificateholders, taking into account any estimated loss that
may result absent such action.

     The Master Servicer will be required to maintain a fidelity bond and errors
and omissions policy with respect to its officers and employees and other
persons acting on behalf of the Master Servicer in connection with its
activities under the Pooling and Servicing Agreement.

     A Servicer, the Master Servicer or the Certificate Administrator may have
other business relationships with the Depositor, any Mortgage Collateral Seller
or their affiliates.

  Special Servicing and Special Servicing Agreements

     The Pooling and Servicing Agreement for a series of Certificates may name a
special servicer (a 'SPECIAL SERVICER'), which will be responsible for the
servicing of certain delinquent Mortgage Loans or Contracts. The Special
Servicer may have discretion to extend relief to certain Mortgagors whose
payments become delinquent. The Special Servicer may be permitted to grant a
period of temporary indulgence to a Mortgagor or may enter into a repayment plan
providing for repayment of arrearages by such Mortgagor, in each case without
the prior approval of the Master Servicer or the Servicer. Other types of
forbearance may require the approval of the Master Servicer or Servicer, as
applicable.

     In addition, the Master Servicer may enter into various agreements with
holders of one or more classes of Subordinate Certificates or of a class of
securities representing interests in one or more classes of Subordinate

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Certificates. Pursuant to the terms of such agreements, such holder may, with
respect to certain delinquent Mortgage Loans:

          (a) instruct the Master Servicer to commence or delay foreclosure
     proceedings, provided that the holder deposits a specified amount of cash
     with the Master Servicer which will be available for distribution to
     Certificateholders in the event that liquidation proceeds are less than
     they otherwise may have been had the Master Servicer acted pursuant to its
     normal servicing procedures;

          (b) instruct the Master Servicer to purchase such Mortgage Loans from
     the Trust prior to the commencement of foreclosure proceedings at the
     Purchase Price and to resell such Mortgage Loans to such holder, in which
     case any subsequent loss with respect to such Mortgage Loans will not be
     allocated to the Certificateholders;

          (c) become, or designate a third party to become, a Subservicer with
     respect to such Mortgage Loans so long as (i) the Master Servicer has the
     right to transfer the subservicing rights and obligations of such Mortgage
     Loans to another Subservicer at any time and (ii) such holder (or its
     servicing designee) is required to service the Mortgage Loans according to
     the Master Servicer's servicing guidelines; or

          (d) other types of special servicing arrangements that are described
     in the related Prospectus Supplement.

  Enforcement of 'Due-on-Sale' Clauses

     Unless otherwise specified in the related Prospectus Supplement, when any
Mortgaged Property relating to a Mortgage Loan or Contract (other than an ARM
Loan described below) is about to be conveyed by the Mortgagor, the Master
Servicer or the Servicer, as applicable, directly or through a Subservicer, to
the extent it has knowledge of such proposed conveyance, generally will be
obligated to exercise the Trustee's rights to accelerate the maturity of such
Mortgage Loan or Contract under any due-on-sale clause applicable thereto. A
due-on-sale clause will be enforced only if the exercise of such rights is
permitted by applicable law and only to the extent it would not adversely affect
or jeopardize coverage under any Primary Insurance Policy or applicable credit
enhancement arrangements. See 'Certain Legal Aspects of Mortgage Loans and
Contracts -- The Mortgage Loans -- Enforceability of Certain Provisions' and
' -- The Contracts -- `Due-on-Sale' Clauses.' If the Master Servicer, Servicer
or Subservicer is prevented from enforcing a due-on-sale clause under applicable
law or if the Master Servicer, Servicer or Subservicer determines that it is
reasonably likely that a legal action would be instituted by the related
Mortgagor to avoid enforcement of such due-on-sale clause, the Master Servicer,
Servicer or Subservicer will enter into an assumption and modification agreement
with the person to whom such property has been or is about to be conveyed,
pursuant to which such person becomes liable under the Mortgage Note or Contract
subject to certain specified conditions. The original Mortgagor may be released
from liability on a Mortgage Loan or Contract if the Master Servicer, Servicer
or Subservicer shall have determined in good faith that such release will not
adversely affect the collectability of the Mortgage Loan or Contract. In the
event of the sale of a Mortgaged Property subject to an ARM Loan, such ARM Loan
may be assumed if it is by its terms assumable and if, in the reasonable
judgment of the Master Servicer, Servicer or Subservicer, the proposed
transferee of the related Mortgaged Property establishes its ability to repay
the loan and the security for such ARM Loan would not be impaired by the
assumption. If a Mortgagor transfers the Mortgaged Property subject to an ARM
Loan without consent, such ARM Loan may be declared due and payable. In
connection with any such assumption, the Mortgage Rate borne by the related
Mortgage Note or Contract may not be altered. 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,
Servicer or Subservicer may approve such a request if it has determined,
exercising its good faith business judgment, that such approval will not
adversely affect the security for, and the timely and full collectability of,
the related Mortgage Loan or Contract. Any fee collected by the Master Servicer,
Servicer or Subservicer for entering into an assumption or substitution of
liability agreement or for processing a request for partial release of the
Mortgaged Property generally will be retained by the Master Servicer, Servicer
or Subservicer as additional servicing compensation.

REALIZATION UPON DEFAULTED PROPERTY

     In the event that title to any Mortgaged Property is acquired in
foreclosure or by deed in lieu of foreclosure (or, in the case of Contracts in
certain states, by repossession of the related Manufactured Home), the deed or

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certificate of sale will be issued to the Trustee or to its nominee on behalf of
Certificateholders. Notwithstanding any such acquisition of title and
cancellation of the related Mortgage Loan or Contract, such Mortgage Loan (an
'REO MORTGAGE LOAN') or Contract (an 'REO CONTRACT') will be considered for most
purposes to be an outstanding Mortgage Loan or Contract held in the Trust until
such time as the Mortgaged Property is sold and all recoverable Liquidation
Proceeds and Insurance Proceeds have been received with respect to such
defaulted Mortgage Loan (a 'LIQUIDATED MORTGAGE LOAN') or Contract (a
'LIQUIDATED CONTRACT'). For purposes of calculations of amounts distributable to
Certificateholders in respect of an REO Mortgage Loan or an REO Contract, the
amortization schedule in effect at the time of any such acquisition of title
(before any adjustment thereto by reason of any bankruptcy or any similar
proceeding or any moratorium or similar waiver or grace period) will be deemed
to have continued in effect (and, in the case of an ARM Loan, such amortization
schedule will be deemed to have adjusted in accordance with any interest rate
changes occurring on any adjustment date therefor) so long as such REO Mortgage
Loan or REO Contract is considered to remain in the Trust. If a REMIC election
has been made, any Mortgaged Property so acquired by the Trust must be disposed
of in accordance with applicable federal income tax regulations and consistent
with the status of the Trust as a REMIC. To the extent provided in the related
Pooling and Servicing Agreement, any income (net of expenses and other than
gains described below) received by the Subservicer, Servicer or Master Servicer
on such Mortgaged Property prior to its disposition will be deposited in the
Custodial Account upon receipt and will be available at such time for making
payments to Certificateholders.

     With respect to a Mortgage Loan or Contract in default, the Master Servicer
or Servicer may pursue foreclosure (or similar remedies) concurrently with
pursuing any remedy for a breach of a representation and warranty. However, the
Master Servicer or Servicer is not required to continue to pursue both such
remedies if it determines that one such remedy is more likely to result in a
greater recovery. If such Mortgage Loan is an Additional Collateral Loan, the
Master Servicer (or the related Subservicer) may proceed against the related
Mortgaged Property or the related Additional Collateral first or may proceed
against both concurrently (as permitted by applicable law and the terms under
which such Additional Collateral is held, including any third-party guarantee).
Upon the first to occur of final liquidation and a repurchase or substitution
pursuant to a breach of a representation and warranty, such Mortgage Loan or
Contract will be removed from the related Trust. The Master Servicer or Servicer
may elect to treat a defaulted Mortgage Loan or Contract as having been finally
liquidated if substantially all amounts expected to be received in connection
therewith have been received. Any additional liquidation expenses relating to
such Mortgage Loan or Contract thereafter incurred will be reimbursable to the
Master Servicer or Servicer (or any Subservicer) from any amounts otherwise
distributable to the related Certificateholders, or may be offset by any
subsequent recovery related to such Mortgage Loan or Contract. Alternatively,
for purposes of determining the amount of related Liquidation Proceeds to be
distributed to Certificateholders, the amount of any Realized Loss or the amount
required to be drawn under any applicable form of credit enhancement, the Master
Servicer or Servicer may take into account minimal amounts of additional
receipts expected to be received, as well as estimated additional liquidation
expenses expected to be incurred in connection with such defaulted Mortgage Loan
or Contract.

     With respect to certain series of Certificates, if so provided in the
related Prospectus Supplement, the applicable form of credit enhancement may
provide, to the extent of coverage thereunder, that a defaulted Mortgage Loan or
Contract or REO Mortgage Loan or REO Contract will be removed from the Trust
prior to the final liquidation thereof. In addition, the Master Servicer or
Servicer may have the option to purchase from the Trust any defaulted Mortgage
Loan or Contract after a specified period of delinquency. Unless otherwise
specified in the related Prospectus Supplement, if a final liquidation of a
Mortgage Loan or Contract resulted in a Realized Loss and within two years
thereafter the Master Servicer or Servicer receives a subsequent recovery
specifically related to such Mortgage Loan or Contract (in connection with a
related breach of a representation or warranty or otherwise), such subsequent
recovery shall be distributed to the then-current Certificateholders of any
outstanding class to which such Realized Loss was allocated (with the amounts to
be distributed allocated among such classes in the same proportions as such
Realized Loss was allocated), provided that no such distribution shall result in
distributions on the Certificates of any such class in excess of the total
amount of the Realized Loss that was allocated to such class. In the case of a
series of Certificates other than a Senior/Subordinate Series, if so provided in
the related Prospectus Supplement, the applicable form of credit enhancement may
provide for reinstatement subject to certain conditions in the event that,
following the final liquidation of a Mortgage Loan or Contract and a draw under
such credit enhancement, subsequent recoveries are received. If a defaulted
Mortgage Loan or Contract or REO Mortgage Loan or REO Contract is not so

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removed from the Trust, then, upon the final liquidation thereof, if a loss is
realized which is not covered by any applicable form of credit enhancement or
other insurance, the Certificateholders will bear such loss. However, if a gain
results from the final liquidation of an REO Mortgage Loan or REO Contract which
is not required by law to be remitted to the related Mortgagor, the Master
Servicer or the Servicer will be entitled to retain such gain as additional
servicing compensation unless the related Prospectus Supplement provides
otherwise. For a description of the Certificate Administrator's, the Master
Servicer's or the Servicer's obligations to maintain and make claims under
applicable forms of credit enhancement and insurance relating to the Mortgage
Loans or Contracts, see 'Description of Credit Enhancement' and 'Insurance
Policies on Mortgage Loans or Contracts.'

     For a discussion of legal rights and limitations associated with the
foreclosure of a Mortgage Loan or Contract, see 'Certain Legal Aspects of
Mortgage Loans and Contracts.'

     The Master Servicer or the Certificate Administrator, as applicable, will
deal with any defaulted Agency Securities in the manner set forth in the related
Prospectus Supplement.

                                 SUBORDINATION

GENERAL

     A Senior/Subordinate Series of Certificates will consist of one or more
classes of Senior Certificates and one or more classes of Subordinate
Certificates, as set forth in the related Prospectus Supplement. Subordination
of the Subordinate Certificates of any Senior/Subordinate Series will be
effected by the following method, unless an alternative method is specified in
the related Prospectus Supplement. In addition, certain classes of Senior (or
Subordinate) Certificates may be senior to other classes of Senior (or
Subordinate) Certificates, as specified in the related Prospectus Supplement.
With respect to any Senior/Subordinate Series, the total amount available for
distribution on each Distribution Date, as well as the method for allocating
such amount among the various classes of Certificates included in such series,
will be described in the related Prospectus Supplement. Generally, with respect
to any such series, the amount available for distribution will be allocated
first to interest on the Senior Certificates and then to principal of the Senior
Certificates up to the amounts described in the related Prospectus Supplement,
prior to allocation of any amounts to the Subordinate Certificates.

     With respect to any defaulted Mortgage Loan or Contract that is finally
liquidated, the amount of loss realized, if any (as described in the related
Pooling and Servicing Agreement, a 'REALIZED LOSS'), will equal the portion of
the Stated Principal Balance remaining after application of all amounts
recovered (net of amounts reimbursable to the Master Servicer or Servicer for
related Advances and expenses) towards interest and principal owing on the
Mortgage Loan. With respect to a Mortgage Loan or Contract, the principal
balance of which has been reduced in connection with bankruptcy proceedings, the
amount of such reduction will be treated as a Realized Loss. If so provided in
the Pooling and Servicing Agreement, the Master Servicer may be permitted, under
certain circumstances, to purchase any Mortgage Loan that is three or more
months delinquent in payments of principal and interest, at the Purchase Price.
If so specified in the related Prospectus Supplement, any Realized Loss incurred
in connection with any such Mortgage Loan will be passed through to the then
outstanding Certificateholders of the related series in the same manner as
Realized Losses on Mortgage Loans that have not been so purchased.

     In the event of any Realized Losses not in excess of the limitations
described below (other than Extraordinary Losses), the rights of the Subordinate
Certificateholders to receive distributions will be subordinate to the rights of
the Senior Certificateholders.

     Except as noted below, Realized Losses will be allocated to the Subordinate
Certificates of the related series until the outstanding principal balance
thereof has been reduced to zero. Additional Realized Losses, if any, will be
allocated to the Senior Certificates. If such series includes more than one
class of Senior Certificates, such additional Realized Losses will be allocated
either on a pro rata basis among all of the Senior Certificates in proportion to
their respective outstanding principal balances or as otherwise provided in the
related Prospectus Supplement.

     With respect to certain Realized Losses resulting from physical damage to
Mortgaged Properties which are generally of the same type as are covered under a
Special Hazard Insurance Policy, the amount thereof that may be allocated to the
Subordinate Certificates of the related series may be limited to an amount (the
'SPECIAL HAZARD AMOUNT') specified in the related Prospectus Supplement. See
'Description of Credit Enhancement --

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Special Hazard Insurance Policies.' If so, any Special Hazard Losses in excess
of the Special Hazard Amount will be allocated among all outstanding classes of
Certificates of the related series, either on a pro rata basis in proportion to
their outstanding principal balances, or as otherwise provided in the related
Prospectus Supplement. The respective amounts of other specified types of losses
(including Fraud Losses and Bankruptcy Losses) that may be borne solely by the
Subordinate Certificates may be similarly limited to an amount (with respect to
Fraud Losses, the 'FRAUD LOSS AMOUNT' and with respect to Bankruptcy Losses, the
'BANKRUPTCY AMOUNT'), and the Subordinate Certificates may provide no coverage
with respect to certain other specified types of losses, as described in the
related Prospectus Supplement, in which case such losses would be allocated on a
pro rata basis among all outstanding classes of Certificates. Each of the
Special Hazard Amount, Fraud Loss Amount and Bankruptcy Amount may be subject to
periodic reductions and may be subject to further reduction or termination,
without the consent of the Certificateholders, upon the written confirmation
from each applicable Rating Agency that the then-current rating of the related
series of Certificates will not be adversely affected thereby.

     Generally, any allocation of a Realized Loss (including a Special Hazard
Loss) to a Certificate will be made by reducing the outstanding principal
balance thereof as of the Distribution Date following the calendar month in
which such Realized Loss was incurred. At any given time, the percentage of the
outstanding principal balances of all of the Certificates evidenced by the
Senior Certificates is the 'SENIOR PERCENTAGE,' determined in the manner set
forth in the related Prospectus Supplement. The 'STATED PRINCIPAL BALANCE' of
any item of Mortgage Collateral as of any date of determination is equal to the
principal balance thereof as of the Cut-off Date, after application of all
scheduled principal payments due on or before the Cut-off Date, whether received
or not, reduced by all amounts allocable to principal that are distributed to
Certificateholders on or before the date of determination, and as further
reduced to the extent that any Realized Loss thereon has been allocated to any
Certificates on or before such date.

     As set forth above, the rights of holders of the various classes of
Certificates of any series to receive distributions of principal and interest is
determined by the aggregate outstanding principal balance of each such class
(or, if applicable, the related notional amount). The outstanding principal
balance of any Certificate will be reduced by all amounts previously distributed
on such Certificate in respect of principal and by any Realized Losses allocated
thereto. If there are no Realized Losses or Principal Prepayments on any item of
Mortgage Collateral, the respective rights of the holders of Certificates of any
series to future distributions generally would not change. However, to the
extent set forth in the related Prospectus Supplement, holders of Senior
Certificates may be entitled to receive a disproportionately larger amount of
prepayments received during certain specified periods, which will have the
effect (absent offsetting losses) of accelerating the amortization of the Senior
Certificates and increasing the respective percentage ownership interest
evidenced by the Subordinate Certificates in the related Trust (with a
corresponding decrease in the Senior Percentage), thereby preserving the
availability of the subordination provided by the Subordinate Certificates. In
addition, as set forth above, certain Realized Losses generally will be
allocated first to Subordinate Certificates by reduction of the outstanding
principal balance thereof, which will have the effect of increasing the
respective ownership interest evidenced by the Senior Certificates in the
related Trust.

     If so provided in the related Prospectus Supplement, certain amounts
otherwise payable on any Distribution Date to holders of Subordinate
Certificates may be deposited into a Reserve Fund. Amounts held in any Reserve
Fund may be applied as described under 'Description of Credit
Enhancement -- Reserve Funds' and in the related Prospectus Supplement.

     With respect to any Senior/Subordinate Series, the terms and provisions of
the subordination may vary from those described above. Any such variation and
any additional credit enhancement will be described in the related Prospectus
Supplement.

OVERCOLLATERALIZATION

     If so specified in the related Prospectus Supplement, interest collections
on the Mortgage Collateral may exceed interest payments on the Certificates for
the related Distribution Date. To the extent such excess interest is applied as
principal payments on the Certificates, the effect will be to reduce the
principal balance of the Certificates relative to the outstanding balance of the
Mortgage Loans, thereby creating 'OVERCOLLATERALIZATION' and additional
protection to the Certificateholders, as specified in the related Prospectus
Supplement.

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                       DESCRIPTION OF CREDIT ENHANCEMENT

GENERAL

     Credit support with respect to each series of Certificates may be comprised
of one or more of the following components. Each component will have a dollar
limit and will provide coverage with respect to Realized Losses that are (i)
attributable to the Mortgagor's failure to make any payment of principal or
interest as required under the Mortgage Note or Contract, but not including
Special Hazard Losses, Extraordinary Losses or other losses resulting from
damage to a Mortgaged Property, Bankruptcy Losses or Fraud Losses (any such
losses, 'DEFAULTED MORTGAGE LOSSES'); (ii) of a type generally covered by a
Special Hazard Insurance Policy (any such losses, 'SPECIAL HAZARD LOSSES');
(iii) attributable to certain actions which may be taken by a bankruptcy court
in connection with a Mortgage Loan, including a reduction by a bankruptcy court
of the principal balance of or the Mortgage Rate on a Mortgage Loan or Contract
or an extension of its maturity (any such losses, 'BANKRUPTCY LOSSES'); and
(iv) incurred on defaulted Mortgage Loans or Contracts as to which there was
fraud in the origination of such Mortgage Loans or Contracts (any such losses,
'FRAUD LOSSES').

     Unless otherwise specified in the related Prospectus Supplement, credit
support will not provide protection against all risks of loss and will not
guarantee repayment of the entire outstanding principal balance of the
Certificates and interest thereon. If losses occur which exceed the amount
covered by credit support or which are not covered by the credit support,
Certificateholders will bear their allocable share of deficiencies. In
particular, Defaulted Mortgage Losses, Special Hazard Losses, Bankruptcy Losses
and Fraud Losses in excess of the amount of coverage provided therefor and
losses occasioned by war, civil insurrection, certain governmental actions,
nuclear reaction and certain other risks ('EXTRAORDINARY LOSSES') will not be
covered. To the extent that the credit enhancement for any series of
Certificates is exhausted, the Certificateholders will bear all further risks of
loss not otherwise insured against.

     As set forth below and in the related Prospectus Supplement, (i) coverage
with respect to Defaulted Mortgage Losses may be provided by a Mortgage Pool
Insurance Policy or Contract Pool Insurance Policy, (ii) coverage with respect
to Special Hazard Losses may be provided by a Special Hazard Insurance Policy,
(iii) coverage with respect to Bankruptcy Losses may be provided by a Bankruptcy
Bond and (iv) coverage with respect to Fraud Losses may be provided by a
Mortgage Pool Insurance Policy or mortgage repurchase bond. In addition, if so
specified in the applicable Prospectus Supplement, in lieu of or in addition to
any or all of the foregoing arrangements, credit enhancement may be in the form
of a Reserve Fund to cover such losses, in the form of subordination of one or
more classes of Certificates or Overcollateralization, each as described under
'Subordination,' or in the form of a Certificate Insurance Policy, a Letter of
Credit, surety bonds or other types of insurance policies, certain other secured
or unsecured corporate guarantees or in such other form as may be described in
the related Prospectus Supplement, or in the form of a combination of two or
more of the foregoing. The credit support may be provided by an assignment of
the right to receive certain cash amounts, a deposit of cash into a Reserve Fund
or other pledged assets, or by banks, insurance companies, guarantees or any
combination thereof identified in the related Prospectus Supplement. Credit
support may also be provided in the form of an insurance policy covering the
risk of collection and adequacy of any Additional Collateral provided in
connection with any Additional Collateral Loan, subject to the limitations set
forth in any such insurance policy. As set forth in the Pooling and Servicing
Agreement, credit support may apply to all of the Mortgage Loans or to certain
Mortgage Loans contained in a Mortgage Pool.

     Each Prospectus Supplement will include a description of (a) the amount
payable under the credit enhancement arrangement, if any, provided with respect
to a series, (b) any conditions to payment thereunder not otherwise described
herein, (c) the conditions under which the amount payable under such credit
support may be reduced and under which such credit support may be terminated or
replaced and (d) the material provisions of any agreement relating to such
credit support. Additionally, each such Prospectus Supplement will set forth
certain information with respect to the issuer of any third-party credit
enhancement.

     The descriptions of any insurance policies, bonds or other instruments
described in this Prospectus or any Prospectus Supplement and the coverage
thereunder do not purport to be complete and are qualified in their entirety by
reference to the actual forms of such policies, copies of which will be exhibits
to the Current Report on Form 8-K to be filed with the Commission in connection
with the issuance of the related series of Certificates.

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<PAGE>
LETTERS OF CREDIT

     If any component of credit enhancement as to any series of Certificates is
to be provided by a letter of credit (the 'LETTER OF CREDIT'), a bank (the
'LETTER OF CREDIT BANK') will deliver to the Trustee an irrevocable Letter of
Credit. The Letter of Credit may provide direct coverage with respect to the
Mortgage Collateral. The Letter of Credit Bank, the amount available under the
Letter of Credit with respect to each component of credit enhancement, the
expiration date of the Letter of Credit, and a more detailed description of the
Letter of Credit will be specified in the related Prospectus Supplement. On or
before each Distribution Date, the Letter of Credit Bank will be required to
make certain payments after notification from the Trustee, to be deposited in
the related Certificate Account with respect to the coverage provided thereby.
The Letter of Credit may also provide for the payment of Advances.

MORTGAGE POOL INSURANCE POLICIES

     Any pool-wide insurance policy covering losses on Mortgage Loans (each, a
'MORTGAGE POOL INSURANCE POLICY') obtained by the Depositor for a Trust will be
issued by the insurer named in the related Prospectus Supplement (the 'POOL
INSURER'). Each Mortgage Pool Insurance Policy, subject to the limitations
described below and in the Prospectus Supplement, if any, will cover Defaulted
Mortgage Losses in an amount specified in the applicable Prospectus Supplement.
As set forth under ' -- Maintenance of Credit Enhancement' below, the Master
Servicer, Servicer or Certificate Administrator, as applicable, will use its
best reasonable efforts to maintain the Mortgage Pool Insurance Policy and to
present claims thereunder to the Pool Insurer on behalf of itself, the Trustee
and the Certificateholders. The Mortgage Pool Insurance Policies, however, are
not blanket policies against loss, since claims thereunder may only be made
respecting particular defaulted Mortgage Loans and only upon satisfaction of
certain conditions precedent described below. Unless specified in the related
Prospectus Supplement, the Mortgage Pool Insurance Policies may not cover losses
due to a failure to pay or denial of a claim under a Primary Insurance Policy,
irrespective of the reason therefor.

     Each Mortgage Pool Insurance Policy will provide that no claims may be
validly presented thereunder unless, among other things, (i) any required
Primary Insurance Policy is in effect for the defaulted Mortgage Loan and a
claim thereunder has been submitted and settled, (ii) hazard insurance on the
property securing such Mortgage Loan has been kept in force and real estate
taxes and other protection and preservation expenses have been paid by the
Master Servicer, Servicer or Subservicer, (iii) if there has been physical loss
or damage to the Mortgaged Property, it has been restored to its condition
(reasonable wear and tear excepted) at the Cut-off Date and (iv) the insured has
acquired good and merchantable title to the Mortgaged Property free and clear of
liens except certain permitted encumbrances. Upon satisfaction of these
conditions, the Pool Insurer will have the option either (a) to purchase the
property securing the defaulted Mortgage Loan at a price equal to the
outstanding principal balance thereof plus accrued and unpaid interest at the
applicable Mortgage Rate to the date of purchase and certain expenses incurred
by the Master Servicer, Servicer or Subservicer on behalf of the Trustee and
Certificateholders, or (b) to pay the amount by which the sum of the outstanding
principal balance of the defaulted Mortgage Loan plus accrued and unpaid
interest at the Mortgage Rate to the date of payment of the claim and the
aforementioned expenses exceeds the proceeds received from an approved sale of
the Mortgaged Property, in either case net of certain amounts paid or assumed to
have been paid under any related Primary Insurance Policy. Certificateholders
will experience a shortfall in the amount of interest payable on the related
Certificates in connection with the payment of claims under a Mortgage Pool
Insurance Policy because the Pool Insurer is only required to remit unpaid
interest through the date a claim is paid rather than through the end of the
month in which such claim is paid. In addition, the Certificateholders will also
experience losses with respect to the related Certificates in connection with
payments made under a Mortgage Pool Insurance Policy to the extent that the
Master Servicer, Servicer or Subservicer expends funds to cover unpaid real
estate taxes or to repair the related Mortgaged Property in order to make a
claim under a Mortgage Pool Insurance Policy, as those amounts will not be
covered by payments under such policy and will be reimbursable to the Master
Servicer, Servicer or Subservicer from funds otherwise payable to the
Certificateholders. If any Mortgaged Property securing a defaulted Mortgage Loan
is damaged and proceeds, if any (see ' -- Special Hazard Insurance Policies'
below for risks which are not covered by such policies), from the related hazard
insurance policy or applicable Special Hazard Instrument are insufficient to
restore the damaged property to a condition sufficient to permit recovery under
the Mortgage Pool Insurance Policy, the Master Servicer, Servicer or Subservicer
is not required to expend its own funds to restore the damaged property unless
it determines that (a) such restoration

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<PAGE>
will increase the proceeds to Certificateholders on liquidation of the Mortgage
Loan after reimbursement of the Master Servicer, Servicer or Subservicer for its
expenses and (b) such expenses will be recoverable by it through Liquidation
Proceeds or Insurance Proceeds.

     Unless otherwise specified in the related Prospectus Supplement, a Mortgage
Pool Insurance Policy (and certain Primary Insurance Policies) will likely not
insure against loss sustained by reason of a default arising from, among other
things, (i) fraud or negligence in the origination or servicing of a Mortgage
Loan, including misrepresentation by the Mortgagor, the Mortgage Collateral
Seller or other persons involved in the origination thereof, or (ii) failure to
construct a Mortgaged Property in accordance with plans and specifications.
Depending upon the nature of the event, a breach of representation made by a
Mortgage Collateral Seller may also have occurred. Such a breach, unless
otherwise specified in the related Prospectus Supplement, would not give rise to
a repurchase obligation on the part of the Depositor or Residential Funding.

     The original amount of coverage under each Mortgage Pool Insurance Policy
will be reduced over the life of the related series of Certificates by the
aggregate amount of claims paid less the aggregate of the net amounts realized
by the Pool Insurer upon disposition of all foreclosed properties. The amount of
claims paid includes certain expenses incurred by the Master Servicer, Servicer
or Subservicer as well as accrued interest on delinquent Mortgage Loans to the
date of payment of the claim. See 'Certain Legal Aspects of Mortgage Loans and
Contracts -- Foreclosure.' Accordingly, if aggregate net claims paid under any
Mortgage Pool Insurance Policy reach the original policy limit, coverage under
that Mortgage Pool Insurance Policy will be exhausted and any further losses
will be borne by the related Certificateholders. In addition, unless the Master
Servicer or Servicer determines that an Advance in respect of a delinquent
Mortgage Loan would be recoverable to it from the proceeds of the liquidation of
such Mortgage Loan or otherwise, the Master Servicer or Servicer would not be
obligated to make an Advance respecting any such delinquency since the Advance
would not be ultimately recoverable to it from either the Mortgage Pool
Insurance Policy or from any other related source. See 'Description of the
Certificates -- Advances.'

     Since each Mortgage Pool Insurance Policy will require that the property
subject to a defaulted Mortgage Loan be restored to its original condition prior
to claiming against the Pool Insurer, such policy will not provide coverage
against hazard losses. As set forth under 'Insurance Policies on Mortgage Loans
or Contracts -- Standard Hazard Insurance on Mortgaged Properties,' the hazard
policies covering the Mortgage Loans typically exclude from coverage physical
damage resulting from a number of causes and, even when the damage is covered,
may afford recoveries which are significantly less than full replacement cost of
such losses. Additionally, no coverage in respect of Special Hazard Losses,
Fraud Losses or Bankruptcy Losses will cover all risks, and the amount of any
such coverage will be limited. See ' -- Special Hazard Insurance Policies'
below. As a result, certain hazard risks will not be insured against and may be
borne by Certificateholders.

     Contract Pools may be covered by pool insurance policies (each, a 'CONTRACT
POOL INSURANCE POLICY') that are similar to the Mortgage Pool Insurance Policies
described above.

SPECIAL HAZARD INSURANCE POLICIES

     Any insurance policy covering Special Hazard Losses (a 'SPECIAL HAZARD
INSURANCE POLICY') obtained for a Trust will be issued by the insurer named in
the related Prospectus Supplement (the 'SPECIAL HAZARD INSURER'). Each Special
Hazard Insurance Policy, subject to limitations described below and in the
related Prospectus Supplement, if any, will protect the related
Certificateholders from Special Hazard Losses which are (i) losses due to direct
physical damage to a Mortgaged Property other than any loss of a type covered by
a hazard insurance policy or a flood insurance policy, if applicable, and (ii)
losses from partial damage caused by reason of the application of the
co-insurance clauses contained in hazard insurance policies. See 'Insurance
Policies on Mortgage Loans or Contracts.' A Special Hazard Insurance Policy will
not cover losses occasioned by war, civil insurrection, certain governmental
actions, errors in design, faulty workmanship or materials (except under certain
circumstances), nuclear reaction, chemical contamination or waste by the
Mortgagor. Aggregate claims under a Special Hazard Insurance Policy will be
limited to the amount set forth in the related Pooling and Servicing Agreement
and will be subject to reduction as set forth in such related Pooling and
Servicing Agreement. A Special Hazard Insurance Policy will provide that no
claim may be paid unless hazard and, if applicable, flood insurance on the
property securing the Mortgage Loan or Contract has been kept in force and other
protection and preservation expenses have been paid by the Master Servicer or
Servicer.

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<PAGE>
     Subject to the foregoing limitations, a Special Hazard Insurance Policy
will provide that, where there has been damage to property securing a foreclosed
Mortgage Loan (title to which has been acquired by the insured) and to the
extent such damage is not covered by the hazard insurance policy or flood
insurance policy, if any, maintained by the Mortgagor or the Master Servicer,
Servicer or Subservicer, the insurer will pay the lesser of (i) the cost of
repair or replacement of such property or (ii) upon transfer of the property to
the insurer, the unpaid principal balance of such Mortgage Loan or Contract at
the time of acquisition of such property by foreclosure or deed in lieu of
foreclosure, plus accrued interest at the Mortgage Rate to the date of claim
settlement and certain expenses incurred by the Master Servicer, Servicer or
Subservicer with respect to such property. If the property is transferred to a
third party in a sale approved by the Special Hazard Insurer, the amount that
the Special Hazard Insurer will pay will be the amount under (ii) above reduced
by the net proceeds of the sale of the property. If the unpaid principal balance
plus accrued interest and certain expenses is paid by the Special Hazard
Insurer, the amount of further coverage under the related Special Hazard
Insurance Policy will be reduced by such amount less any net proceeds from the
sale of the property. Any amount paid as the cost of repair of the property will
further reduce coverage by such amount. Restoration of the property with the
proceeds described under (i) above will satisfy the condition under each
Mortgage Pool Insurance Policy or Contract Pool Insurance Policy that the
property be restored before a claim under such policy may be validly presented
with respect to the defaulted Mortgage Loan or Contract secured by such
property. The payment described under (ii) above will render presentation of a
claim in respect of such Mortgage Loan or Contract under the related Mortgage
Pool Insurance Policy or Contract Pool Insurance Policy unnecessary. Therefore,
so long as a Mortgage Pool Insurance Policy or Contract Pool Insurance Policy
remains in effect, the payment by the insurer under a Special Hazard Insurance
Policy of the cost of repair or of the unpaid principal balance of the related
Mortgage Loan or Contract plus accrued interest and certain expenses will not
affect the total Insurance Proceeds paid to Certificateholders, but will affect
the relative amounts of coverage remaining under the related Special Hazard
Insurance Policy and Mortgage Pool Insurance Policy or Contract Pool Insurance
Policy.

     To the extent set forth in the related Prospectus Supplement, coverage in
respect of Special Hazard Losses for a series of Certificates may be provided,
in whole or in part, by a type of special hazard coverage other than a Special
Hazard Insurance Policy or by means of a representation of the Depositor or
Residential Funding.

BANKRUPTCY BONDS

     In the event of a personal bankruptcy of a Mortgagor, a bankruptcy court
may establish the value of the Mortgaged Property of such Mortgagor (and, if
specified in the related Prospectus Supplement, any related Additional
Collateral) at an amount less than the then outstanding principal balance of the
Mortgage Loan or Contract secured by such Mortgaged Property (such difference, a
'DEFICIENT VALUATION'). The amount of the secured debt could then be reduced to
such value and, thus, the holder of such Mortgage Loan or Contract would become
an unsecured creditor to the extent the outstanding principal balance of such
Mortgage Loan or Contract exceeds the value assigned to the Mortgaged Property
(and any related Additional Collateral) by the bankruptcy court. In addition,
certain other modifications of the terms of a Mortgage Loan or Contract can
result from a bankruptcy proceeding, including a reduction in the amount of the
Monthly Payment on the related Mortgage Loan, but not any permanent forgiveness
of principal (a 'DEBT SERVICE REDUCTION'). See 'Certain Legal Aspects of
Mortgage Loans and Contracts -- Mortgage Loans -- Anti-Deficiency Legislation
and Other Limitations on Lenders.' Any Bankruptcy Bond to provide coverage for
Bankruptcy Losses resulting from proceedings under the federal Bankruptcy Code
obtained for a Trust will be issued by an insurer named in the related
Prospectus Supplement. The level of coverage under each Bankruptcy Bond will be
set forth in the related Prospectus Supplement.

RESERVE FUNDS

     If so specified in the related Prospectus Supplement, the Depositor will
deposit or cause to be deposited in an account (a 'RESERVE FUND') any
combination of cash or Permitted Investments in specified amounts, or any other
instrument satisfactory to the Rating Agency or Agencies, which will be applied
and maintained in the manner and under the conditions specified in such
Prospectus Supplement. In the alternative or in addition to such deposit, to the
extent described in the related Prospectus Supplement, a Reserve Fund may be
funded through application of all or a portion of amounts otherwise payable on
any related Subordinate Certificates,

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from the Excess Spread, Excluded Spread or otherwise. To the extent that the
funding of the Reserve Fund is dependent on amounts otherwise payable on related
Subordinate Certificates, Excess Spread, Excluded Spread or other cash flows
attributable to the related Mortgage Loans or on reinvestment income, the
Reserve Fund may provide less coverage than initially expected if the cash flows
or reinvestment income on which such funding is dependent are lower than
anticipated. With respect to any series of Certificates as to which credit
enhancement includes a Letter of Credit, if so specified in the related
Prospectus Supplement, under certain circumstances the remaining amount of the
Letter of Credit may be drawn by the Trustee and deposited in a Reserve Fund.
Amounts in a Reserve Fund may be distributed to Certificateholders, or applied
to reimburse the Master Servicer or Servicer for outstanding Advances, or may be
used for other purposes, in the manner and to the extent specified in the
related Prospectus Supplement. Unless otherwise specified in the related
Prospectus Supplement, any such Reserve Fund will not be deemed to be part of
the related Trust. A Reserve Fund may provide coverage to more than one series
of Certificates, if set forth in the related Prospectus Supplement.

     Unless otherwise specified in the related Prospectus Supplement, the
Trustee will have a perfected security interest for the benefit of the
Certificateholders in the assets in the Reserve Fund. However, to the extent
that the Depositor, any affiliate thereof or any other entity has an interest in
any Reserve Fund, in the event of the bankruptcy, receivership or insolvency of
such entity, there could be delays in withdrawals from the Reserve Fund and the
corresponding payments to the Certificateholders. Such delays could adversely
affect the yield to investors on the related Certificates.

     Amounts deposited in any Reserve Fund for a series will be invested in
Permitted Investments by, or at the direction of, and for the benefit of a
Servicer, the Master Servicer, the Certificate Administrator or any other person
named in the related Prospectus Supplement.

CERTIFICATE INSURANCE POLICIES; SURETY BONDS

     If so specified in the related Prospectus Supplement, the Depositor may
obtain one or more certificate insurance policies (each, a 'CERTIFICATE
INSURANCE POLICY'), one or more surety bonds (each, a 'SURETY BOND'), or one or
more guarantees, issued by insurers or other parties acceptable to the Rating
Agency or Agencies rating the Certificates offered, as specified in the related
Prospectus Supplement, insuring the holders of one or more classes of
Certificates the payment of amounts due in accordance with the terms of such
class or classes of Certificates. Any Certificate Insurance Policy, Surety Bond
or guaranty will have the characteristics described in, and will be subject to
such limitations and exceptions set forth in, the related Prospectus Supplement.

MAINTENANCE OF CREDIT ENHANCEMENT

     If credit enhancement has been obtained for a series of Certificates, the
Master Servicer, the Servicer or the Certificate Administrator will be obligated
to exercise its best reasonable efforts to keep or cause to be kept such credit
enhancement in full force and effect throughout the term of the applicable
Pooling and Servicing Agreement or Trust Agreement, unless coverage thereunder
has been exhausted through payment of claims or otherwise, or substitution
therefor is made as described below under ' -- Reduction or Substitution of
Credit Enhancement.' The Master Servicer, the Servicer or the Certificate
Administrator, as applicable, on behalf of itself, the Trustee and
Certificateholders, will be required to provide information required for the
Trustee to draw under any applicable credit enhancement.

     Unless otherwise specified in the related Prospectus Supplement, the Master
Servicer, the Servicer or the Certificate Administrator will agree to pay the
premiums for each Mortgage Pool Insurance Policy, Contract Pool Insurance
Policy, Special Hazard Insurance Policy, Bankruptcy Bond, Certificate Insurance
Policy or Surety Bond, as applicable, on a timely basis. In the event the
related insurer ceases to be a 'QUALIFIED INSURER' because it ceases to be
qualified under applicable law to transact such insurance business or coverage
is terminated for any reason other than exhaustion of such coverage, the Master
Servicer, the Servicer or the Certificate Administrator will use its best
reasonable efforts to obtain from another Qualified Insurer a comparable
replacement insurance policy or bond with a total coverage equal to the then
outstanding coverage of such policy or bond. If the cost of the replacement
policy is greater than the cost of such policy or bond, the coverage of the
replacement policy or bond will, unless otherwise agreed to by the Depositor, be
reduced to a level such that its premium rate does not exceed the premium rate
on the original insurance policy. In the event

                                       43

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that the Pool Insurer ceases to be a Qualified Insurer because it ceases to be
approved as an insurer by Freddie Mac, Fannie Mae or any successor entity, the
Master Servicer, the Servicer or the Certificate Administrator, as applicable,
will review, not less often than monthly, the financial condition of the Pool
Insurer with a view toward determining whether recoveries under the Mortgage
Pool Insurance Policy or Contract Pool Insurance Policy are jeopardized for
reasons related to the financial condition of the Pool Insurer. If the Master
Servicer, the Servicer or the Certificate Administrator determines that
recoveries are so jeopardized, it will exercise its best reasonable efforts to
obtain from another Qualified Insurer a replacement insurance policy as
described above, subject to the same cost limit. Any losses in market value of
the Certificates associated with any reduction or withdrawal in rating by an
applicable Rating Agency shall be borne by the Certificateholders.

     If any property securing a defaulted Mortgage Loan or Contract is damaged
and proceeds, if any, from the related hazard insurance policy or any applicable
Special Hazard Insurance Policy are insufficient to restore the damaged property
to a condition sufficient to permit recovery under any Letter of Credit,
Mortgage Pool Insurance Policy, Contract Pool Insurance Policy or any related
Primary Insurance Policy, the Master Servicer or the Servicer, as applicable, is
not required to expend its own funds to restore the damaged property unless it
determines (i) that such restoration will increase the proceeds to one or more
classes of Certificateholders on liquidation of the Mortgage Loan after
reimbursement of the Master Servicer or the Servicer, as applicable, for its
expenses and (ii) that such expenses will be recoverable by it through
Liquidation Proceeds or Insurance Proceeds. If recovery under any Letter of
Credit, Mortgage Pool Insurance Policy, Contract Pool Insurance Policy, other
credit enhancement or any related Primary Insurance Policy is not available
because the Master Servicer or the Servicer, as applicable, has been unable to
make the above determinations, has made such determinations incorrectly or
recovery is not available for any other reason, the Master Servicer or the
Servicer, as applicable, is nevertheless obligated to follow such normal
practices and procedures (subject to the preceding sentence) as it deems
necessary or advisable to realize upon the defaulted Mortgage Loan and in the
event such determination has been incorrectly made, is entitled to reimbursement
of its expenses in connection with such restoration.

REDUCTION OR SUBSTITUTION OF CREDIT ENHANCEMENT

     Unless otherwise specified in the Prospectus Supplement, the amount of
credit support provided with respect to any series of Certificates may be
reduced under certain specified circumstances. In most cases, the amount
available as credit support will be subject to periodic reduction on a
non-discretionary basis in accordance with a schedule or formula set forth in
the related Pooling and Servicing Agreement or Trust Agreement. Additionally, in
most cases, such credit support may be replaced, reduced or terminated, and the
formula used in calculating the amount of coverage with respect to Bankruptcy
Losses, Special Hazard Losses or Fraud Losses may be changed, without the
consent of the Certificateholders, upon the written assurance from each
applicable Rating Agency that the then-current rating of the related series of
Certificates will not be adversely affected thereby. Furthermore, in the event
that the credit rating of any obligor under any applicable credit enhancement is
downgraded, the credit rating of each class of the related Certificates may be
downgraded to a corresponding level, and, unless otherwise specified in the
related Prospectus Supplement, the Master Servicer, the Servicer or the
Certificate Administrator, as applicable, will not be obligated to obtain
replacement credit support in order to restore the rating of the Certificates.
The Master Servicer, the Servicer or the Certificate Administrator, as
applicable, will also be permitted to replace such credit support with other
credit enhancement instruments issued by obligors whose credit ratings are
equivalent to such downgraded level and in lower amounts which would satisfy
such downgraded level, provided that the then-current rating of each class of
the related series of Certificates is maintained. Where the credit support is in
the form of a Reserve Fund, a permitted reduction in the amount of credit
enhancement will result in a release of all or a portion of the assets in the
Reserve Fund to the Depositor, the Master Servicer or such other person that is
entitled thereto. Any assets so released will not be available for distributions
in future periods.

            OTHER FINANCIAL OBLIGATIONS RELATED TO THE CERTIFICATES

SWAPS AND YIELD SUPPLEMENT AGREEMENTS

     The Trustee on behalf of the Trust may enter into interest rate swaps and
related caps, floors and collars to minimize the risk of Certificateholders from
adverse changes in interest rates (collectively, 'SWAPS'), and other

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yield supplement agreements or similar yield maintenance arrangements that do
not involve swap agreements or other notional principal contracts (collectively,
'YIELD SUPPLEMENT AGREEMENTS').

     An interest rate Swap is an agreement between two parties
('COUNTERPARTIES') to exchange a stream of interest payments on an agreed
hypothetical or 'notional' principal amount. No principal amount is exchanged
between the Counterparties to an interest rate Swap. In the typical Swap, one
party agrees to pay a fixed rate on a notional principal amount, while the
Counterparty pays a floating rate based on one or more reference interest rates
such as the London Interbank Offered Rate ('LIBOR'), a specified bank's prime
rate or U.S. Treasury Bill rates. Interest rate Swaps also permit Counterparties
to exchange a floating rate obligation based upon one reference interest rate
(such as LIBOR) for a floating rate obligation based upon another referenced
interest rate (such as U.S. Treasury Bill rates).

     The Swap market has grown substantially in recent years with a significant
number of banks and financial service firms acting both as principals and as
agents utilizing standardized Swap documentation. Caps, floors and collars are
more recent innovations, and they are less liquid than other Swaps.

     Yield Supplement Agreements may be entered into to supplement the interest
rate or rates on one or more classes of the Certificates of any series.

     There can be no assurance that the Trust will be able to enter into or
offset Swaps or enter into Yield Supplement Agreements at any specific time or
at prices or on other terms that are advantageous. In addition, although the
terms of the Swaps and Yield Supplement Agreements may provide for termination
under certain circumstances, there can be no assurance that the Trust will be
able to terminate a Swap or Yield Supplement Agreement when it would be
economically advantageous to the Trust to do so.

PURCHASE OBLIGATIONS

     Certain types of Mortgage Collateral and certain classes of Certificates of
any series, as specified in the related Prospectus Supplement, may be subject to
a purchase obligation (a 'PURCHASE OBLIGATION') that would become applicable on
one or more specified dates, or upon the occurrence of one or more specified
events, or on demand made by or on behalf of the applicable Certificateholders.
A Purchase Obligation may be in the form of a conditional or unconditional
purchase commitment, liquidity facility, maturity guaranty, put option or demand
feature. The terms and conditions of each Purchase Obligation, including the
purchase price, timing and payment procedure, will be described in the related
Prospectus Supplement. A Purchase Obligation with respect to Mortgage Collateral
may apply to that Mortgage Collateral or to the related Certificates. Each
Purchase Obligation may be a secured or unsecured obligation of the provider
thereof, which may include a bank or other financial institution or an insurance
company. Each Purchase Obligation will be evidenced by an instrument delivered
to the Trustee for the benefit of the applicable Certificateholders of the
related series. Each Purchase Obligation with respect to Mortgage Collateral
will be payable solely to the Trustee for the benefit of the Certificateholders
of the related series. Other Purchase Obligations may be payable to the Trustee
or directly to the holders of the Certificates to which such obligations relate.

               INSURANCE POLICIES ON MORTGAGE LOANS OR CONTRACTS

     Each Mortgage Loan or Contract will be required to be covered by a hazard
insurance policy (as described below) and, in certain cases, a Primary Insurance
Policy. In addition, FHA Loans and VA Loans will be covered by the government
mortgage insurance programs described below. The descriptions of any insurance
policies set forth in this Prospectus or any Prospectus Supplement and the
coverage thereunder do not purport to be complete and are qualified in their
entirety by reference to such forms of policies.

PRIMARY MORTGAGE INSURANCE POLICIES

     Unless otherwise specified in the related Prospectus Supplement, (i) each
Mortgage Loan having a Loan-to-Value Ratio at origination of over 80% (except in
the case of certain borrowers with acceptable credit histories) will be covered
by a primary mortgage guaranty insurance policy (a 'PRIMARY INSURANCE POLICY')
insuring against default on such Mortgage Loan as to at least the principal
amount thereof exceeding 75% of the Appraised Value of the Mortgaged Property at
origination of the Mortgage Loan, unless and until the principal balance of the
Mortgage Loan is reduced to a level that would produce a Loan-to-Value Ratio
equal to or less

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<PAGE>
than 80%, and (ii) the Depositor or the related Mortgage Collateral Seller will
represent and warrant that, to the best of such entity's knowledge, such
Mortgage Loans are so covered. Unless otherwise specified in the Prospectus
Supplement, the Depositor will have the ability to cancel any Primary Insurance
Policy if the Loan-to-Value Ratio of the Mortgage Loan is reduced below 80% (or
a lesser specified percentage) based on an appraisal of the Mortgaged Property
after the related Closing Date or as a result of principal payments that reduce
the principal balance of the Mortgage Loan after such Closing Date. Mortgage
Loans which are subject to negative amortization will only be covered by a
Primary Insurance Policy if such coverage was so required upon their
origination, notwithstanding that subsequent negative amortization may cause
such Mortgage Loan's Loan-to-Value Ratio (based on the then-current balance) to
subsequently exceed the limits which would have required such coverage upon
their origination. Primary Insurance Policies may be required to be obtained and
paid for by the Mortgagor, or may be paid for by the Servicer.

     While the terms and conditions of the Primary Insurance Policies issued by
one primary mortgage guaranty insurer (a 'PRIMARY INSURER') will differ from
those in Primary Insurance Policies issued by other Primary Insurers, each
Primary Insurance Policy generally will pay either: (i) the insured percentage
of the loss on the related Mortgaged Property; (ii) the entire amount of such
loss, after receipt by the Primary Insurer of good and merchantable title to,
and possession of, the Mortgaged Property; or (iii) at the option of the Primary
Insurer under certain Primary Insurance Policies, the sum of the delinquent
monthly payments plus any advances made by the insured, both to the date of the
claim payment and, thereafter, monthly payments in the amount that would have
become due under the Mortgage Loan if it had not been discharged plus any
advances made by the insured until the earlier of (a) the date the Mortgage Loan
would have been discharged in full if the default had not occurred or (b) an
approved sale. The amount of the loss as calculated under a Primary Insurance
Policy covering a Mortgage Loan will generally consist of the unpaid principal
amount of such Mortgage Loan and accrued and unpaid interest thereon and
reimbursement of certain expenses, less (i) rents or other payments received by
the insured (other than the proceeds of hazard insurance) that are derived from
the related Mortgaged Property, (ii) hazard insurance proceeds received by the
insured in excess of the amount required to restore such Mortgaged Property and
which have not been applied to the payment of the Mortgage Loan, (iii) amounts
expended but not approved by the Primary Insurer, (iv) claim payments previously
made on such Mortgage Loan and (v) unpaid premiums and certain other amounts.

     As conditions precedent to the filing or payment of a claim under a Primary
Insurance Policy, in the event of default by the Mortgagor, the insured will
typically be required, among other things, to: (i) advance or discharge (a)
hazard insurance premiums and (b) as necessary and approved in advance by the
Primary Insurer, real estate taxes, protection and preservation expenses and
foreclosure and related costs; (ii) in the event of any physical loss or damage
to the Mortgaged Property, have the Mortgaged Property restored to at least its
condition at the effective date of the Primary Insurance Policy (ordinary wear
and tear excepted); and (iii) tender to the Primary Insurer good and
merchantable title to, and possession of, the Mortgaged Property.

     The Pooling and Servicing Agreement for a series generally will require
that, to the extent that coverage is available and for so long as a Primary
Insurance Policy is required to be maintained, the Master Servicer or Servicer
shall maintain, or cause to be maintained, coverage under a Primary Insurance
Policy to the extent such coverage was in place on the Cut-off Date and the
Master Servicer had knowledge of such Primary Insurance Policy. In the event
that the Depositor gains knowledge that, as of the Closing Date, a Mortgage Loan
had a Loan-to-Value Ratio at origination in excess of 80% and was not the
subject of a Primary Insurance Policy (and was not included in any exception to
such standard disclosed in the related Prospectus Supplement) and that such
Mortgage Loan has a then current Loan-to-Value Ratio in excess of 80%, then the
Master Servicer or the Servicer is required to use its reasonable efforts to
obtain and maintain a Primary Insurance Policy to the extent that such a policy
is obtainable at a reasonable price.

     Any primary mortgage insurance or primary credit insurance policies
relating to Contracts will be described in the related Prospectus Supplement.

STANDARD HAZARD INSURANCE ON MORTGAGED PROPERTIES

     The terms of the Mortgage Loans (other than Cooperative Loans) require each
Mortgagor to maintain a hazard insurance policy covering the related Mortgaged
Property and providing for coverage at least equal to that of the standard form
of fire insurance policy with extended coverage customary in the state in which
the property is located.

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     Such coverage generally will be in an amount equal to the lesser of the
principal balance of such Mortgage Loan or 100% of the insurable value of the
improvements securing the Mortgage Loan. The Pooling and Servicing Agreement
will provide that the Master Servicer or Servicer shall cause such hazard
policies to be maintained or shall obtain a blanket policy insuring against
losses on the Mortgage Loans. The ability of the Master Servicer or Servicer to
ensure that hazard insurance proceeds are appropriately applied may be dependent
on its being named as an additional insured under any hazard insurance policy
and under any flood insurance policy referred to below, or upon the extent to
which information in this regard is furnished to the Master Servicer or the
Servicer by Mortgagors or Subservicers.

     In general, the standard form of fire and extended coverage policy covers
physical damage to or destruction of the improvements on the property by fire,
lightning, explosion, smoke, windstorm, hail, riot, strike and civil commotion,
subject to the conditions and exclusions specified in each policy. The policies
relating to the Mortgage Loans will be underwritten by different insurers under
different state laws in accordance with different applicable state forms and
therefore will not contain identical terms and conditions, the basic terms
thereof are dictated by respective state laws. Such policies typically do not
cover any physical damage resulting from the following: war, revolution,
governmental actions, floods and other water-related causes, earth movement
(including earthquakes, landslides and mudflows), nuclear reactions, wet or dry
rot, vermin, rodents, insects or domestic animals, theft and, in certain cases,
vandalism. The foregoing list is merely indicative of certain kinds of uninsured
risks and is not intended to be all-inclusive. Where the improvements securing a
Mortgage Loan are located in a federally designated flood area at the time of
origination of such Mortgage Loan, the Pooling and Servicing Agreement generally
requires the Master Servicer or Servicer to cause to be maintained for each such
Mortgage Loan serviced, flood insurance (to the extent available) in an amount
equal in general to the lesser of the amount required to compensate for any loss
or damage on a replacement cost basis or the maximum insurance available under
the federal flood insurance program.

     The hazard insurance policies covering the Mortgaged Properties typically
contain a co-insurance clause that in effect requires the related Mortgagor at
all times to carry insurance of a specified percentage (generally 80% to 90%) of
the full replacement value of the improvements on the property in order to
recover the full amount of any partial loss. If the related Mortgagor's coverage
falls below this specified percentage, such clause generally provides that the
insurer's liability in the event of partial loss does not exceed the greater of
(i) the replacement cost of the improvements damaged or destroyed less physical
depreciation or (ii) such proportion of the loss as the amount of insurance
carried bears to the specified percentage of the full replacement cost of such
improvements.

     Since the amount of hazard insurance that Mortgagors are required to
maintain on the improvements securing the Mortgage Loans may decline as the
principal balances owing thereon decrease, and since residential properties have
historically appreciated in value over time, hazard insurance proceeds could be
insufficient to restore fully the damaged property in the event of a partial
loss. See 'Subordination' above for a description of when subordination is
provided, the protection (limited to the Special Hazard Amount as described in
the related Prospectus Supplement) afforded by such subordination, and
'Description of Credit Enhancement -- Special Hazard Insurance Policies' for a
description of the limited protection afforded by any Special Hazard Insurance
Policy against losses occasioned by hazards which are otherwise uninsured
against.

STANDARD HAZARD INSURANCE ON MANUFACTURED HOMES

     The terms of the Pooling and Servicing Agreement will require the Servicer
or the Master Servicer, as applicable, to cause to be maintained with respect to
each Contract one or more Standard Hazard Insurance Policies which provide, at a
minimum, the same coverage as a standard form fire and extended coverage
insurance policy that is customary for manufactured housing, issued by a company
authorized to issue such policies in the state in which the Manufactured Home is
located, and in an amount which is not less than the maximum insurable value of
such Manufactured Home or the principal balance due from the Mortgagor on the
related Contract, whichever is less. Such coverage may be provided by one or
more blanket insurance policies covering losses on the Contracts resulting from
the absence or insufficiency of individual Standard Hazard Insurance Policies.
If a Manufactured Home's location was, at the time of origination of the related
Contract, within a federally designated flood area, the Servicer or the Master
Servicer also will be required to maintain flood insurance.

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     If the Servicer or the Master Servicer repossesses a Manufactured Home on
behalf of the Trustee, the Servicer or the Master Servicer will either (i)
maintain at its expense hazard insurance with respect to such Manufactured Home
or (ii) indemnify the Trustee against any damage to such Manufactured Home prior
to resale or other disposition.

FHA MORTGAGE INSURANCE

     The Housing Act authorizes various FHA mortgage insurance programs. Some of
the Mortgage Loans may be insured under either Section 203(b), Section 234 or
Section 235 of the Housing Act. Under Section 203(b), FHA insures mortgage loans
of up to 30 years' duration for the purchase of one- to four-family dwelling
units. Mortgage Loans for the purchase of condominium units are insured by FHA
under Section 234. Loans insured under these programs must bear interest at a
rate not exceeding the maximum rate in effect at the time the loan is made, as
established by HUD, and may not exceed specified percentages of the lesser of
the appraised value of the property and the sales price, less seller paid
closing costs for the property, up to certain specified maximums. In addition,
FHA imposes initial investment minimums and other requirements on mortgage loans
insured under the Section 203(b) and Section 234 programs.

     Under Section 235, assistance payments are paid by HUD to the mortgagee on
behalf of eligible mortgagors for as long as the mortgagors continue to be
eligible for the payments. To be eligible, a mortgagor must be part of a family,
have income within the limits prescribed by HUD at the time of initial
occupancy, occupy the property and meet requirements for recertification at
least annually.

     The regulations governing these programs provide that insurance benefits
are payable either (i) upon foreclosure (or other acquisition of possession) and
conveyance of the mortgaged premises to HUD or (ii) upon assignment of the
defaulted mortgage loan to HUD. The FHA insurance that may be provided under
these programs upon the conveyance of the home to HUD is equal to 100% of the
outstanding principal balance of the mortgage loan, plus accrued interest, as
described below, and certain additional costs and expenses. When entitlement to
insurance benefits results from assignment of the mortgage loan to HUD, the
insurance payment is computed as of the date of the assignment and includes the
unpaid principal amount of the mortgage loan plus mortgage interest accrued and
unpaid to the assignment date.

     When entitlement to insurance benefits results from foreclosure (or other
acquisition of possession) and conveyance, the insurance payment is equal to the
unpaid principal amount of the mortgage loan, adjusted to reimburse the
mortgagee for certain tax, insurance and similar payments made by it and to
deduct certain amounts received or retained by the mortgagee after default, plus
reimbursement not to exceed two-thirds of the mortgagee's foreclosure costs. Any
FHA insurance relating to Contracts underlying a series of Certificates will be
described in the related Prospectus Supplement.

VA MORTGAGE GUARANTY

     The Servicemen's Readjustment Act of 1944, as amended, permits a veteran
(or, in certain instances, his or her spouse) to obtain a mortgage loan guaranty
by the VA covering mortgage financing of the purchase of a one-to four-family
dwelling unit to be occupied as the veteran's home at an interest rate not
exceeding the maximum rate in effect at the time the loan is made, as
established by HUD. The program has no limit on the amount of a mortgage loan,
requires no down payment from the purchaser and permits the guaranty of mortgage
loans with terms, limited by the estimated economic life of the property, up to
30 years. The maximum guaranty that may be issued by the VA under this program
is 50% of the original principal amount of the mortgage loan up to a certain
dollar limit established by the VA. The liability on the guaranty is reduced or
increased pro rata with any reduction or increase in the amount of indebtedness,
but in no event will the amount payable on the guaranty exceed the amount of the
original guaranty. Notwithstanding the dollar and percentage limitations of the
guaranty, a mortgagee will ordinarily suffer a monetary loss only when the
difference between the unsatisfied indebtedness and the proceeds of a
foreclosure sale of mortgaged premises is greater than the original guaranty as
adjusted. The VA may, at its option, and without regard to the guaranty, make
full payment to a mortgagee of the unsatisfied indebtedness on a mortgage upon
its assignment to the VA.

     Since there is no limit imposed by the VA on the principal amount of a
VA-guaranteed mortgage loan but there is a limit on the amount of the VA
guaranty, additional coverage under a Primary Mortgage Insurance Policy may be
required by the Depositor for VA loans in excess of certain amounts. The amount
of any such

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additional coverage will be set forth in the related Prospectus Supplement. Any
VA guaranty relating to Contracts underlying a series of Certificates will be
described in the related Prospectus Supplement.

                                 THE DEPOSITOR

     The Depositor is an indirect wholly-owned subsidiary of GMAC Mortgage
Group, Inc. ('GMAC MORTGAGE'), which is a wholly-owned subsidiary of General
Motors Acceptance Corporation. The Depositor was incorporated in the State of
Delaware in August 1995. The Depositor was organized for the purpose of
acquiring mortgage loans and contracts and issuing securities backed by such
mortgage loans or contracts. The Depositor anticipates that it will in many
cases have acquired Mortgage Loans indirectly through Residential Funding, which
is also an indirect wholly-owned subsidiary of GMAC Mortgage. The Depositor does
not have, nor is it expected in the future to have, any significant assets.

     The Certificates do not represent an interest in or an obligation of the
Depositor. The Depositor's only obligations with respect to a series of
Certificates will be pursuant to certain limited representations and warranties
made by the Depositor or as otherwise provided in the related Prospectus
Supplement.

     The Depositor maintains its principal office at 8400 Normandale Lake
Boulevard, Suite 600, Minneapolis, Minnesota 55437. Its telephone number is
(612) 832-7000.

                        RESIDENTIAL FUNDING CORPORATION

     Unless otherwise specified in the related Prospectus Supplement,
Residential Funding, an affiliate of the Depositor, will act as the Master
Servicer or Certificate Administrator for each series of Certificates.

     Residential Funding buys conventional mortgage loans under several loan
purchase programs from mortgage loan originators or sellers nationwide that meet
its seller/servicer eligibility requirements and services mortgage loans for its
own account and for others. Residential Funding's principal executive offices
are located at 8400 Normandale Lake Boulevard, Suite 600, Minneapolis, Minnesota
55437. Its telephone number is (612) 832-7000. Residential Funding conducts
operations from its headquarters in Minneapolis and from offices located in
California, Florida, Georgia, Maryland and New York. At December 31, 1998,
Residential Funding was master servicing a first lien loan portfolio of
approximately $54.8 billion and a second lien loan portfolio of approximately
$3.0 billion.

     Residential Funding's delinquency, foreclosure and loan loss experience as
of the end of the most recent calendar quarter for which such information is
available on the portfolio of loans for which it acts as master servicer and
that were originated generally in accordance with the Program will be summarized
in each Prospectus Supplement relating to a Mortgage Pool for which Residential
Funding will act as master servicer. There can be no assurance that such
experience will be representative of the results that may be experienced with
respect to any particular series of Certificates.

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                      THE POOLING AND SERVICING AGREEMENT

     As described above under 'Description of the Certificates -- General,' each
series of Certificates will be issued pursuant to a Pooling and Servicing
Agreement or, if the Trust for a series of Certificates contains Agency
Securities, a Trust Agreement. The discussion below covers Pooling and Servicing
Agreements, but its terms are also generally applicable to Trust Agreements. The
following summaries describe certain additional provisions common to each
Pooling and Servicing Agreement and are qualified entirely by reference to the
actual terms of the Pooling and Servicing Agreement for a series of
Certificates.

SERVICING AND ADMINISTRATION

     The Pooling and Servicing Agreement for a series of Certificates will set
forth the party responsible for performing servicing functions for such series
which may be the Master Servicer or one or more Servicers. If there is more than
one Servicer and there is no Master Servicer, a Certificate Administrator may be
party to the Pooling and Servicing Agreement. The Certificate Administrator will
not be responsible for servicing Mortgage Loans or Contracts and instead will
perform certain specified administrative and reporting functions with regard to
the Trust. In addition, if the Trust for a series of Certificates contains
Agency Securities, generally the Certificate Administrator will perform
collection, administrative and reporting functions pursuant to a Trust Agreement
and no Master Servicer or Servicer will be appointed for such series.

     The Master Servicer or any Servicer for a series of Certificates generally
will perform the functions set forth under 'Description of the
Certificates -- Servicing and Administration of Mortgage Collateral' above.

EVENTS OF DEFAULT

     Events of Default under the Pooling and Servicing Agreement in respect of a
series of Certificates, unless otherwise specified in the Prospectus Supplement,
will include: (i) in the case of a Trust including Mortgage Loans or Contracts,
any failure by the Certificate Administrator, the Master Servicer or a Servicer
(if such Servicer is a party to the Pooling and Servicing Agreement) to make a
required deposit to the Certificate Account or, if the Certificate Administrator
or the Master Servicer is the Paying Agent, to distribute to the holders of any
class of Certificates of such series any required payment which continues
unremedied for five days after the giving of written notice of such failure to
the Master Servicer or the Certificate Administrator, as applicable, by the
Trustee or the Depositor, or to the Master Servicer, the Certificate
Administrator, the Depositor and the Trustee by the holders of Certificates of
such class evidencing not less than 25% of the aggregate Percentage Interests
constituting such class; (ii) any failure by the Master Servicer or the
Certificate Administrator, as applicable, duly to observe or perform in any
material respect any other of its covenants or agreements in the Pooling and
Servicing Agreement with respect to such series of Certificates which continues
unremedied for 30 days (15 days in the case of a failure to pay the premium for
any insurance policy which is required to be maintained under the Pooling and
Servicing Agreement) after the giving of written notice of such failure to the
Master Servicer or the Certificate Administrator, as applicable, by the Trustee
or the Depositor, or to the Master Servicer, the Certificate Administrator, the
Depositor and the Trustee by the holders of any class of Certificates of such
series evidencing not less than 25% (33% in the case of a Trust including Agency
Securities) of the aggregate Percentage Interests constituting such class; and
(iii) certain events of insolvency, readjustment of debt, marshalling of assets
and liabilities or similar proceedings regarding the Master Servicer or the
Certificate Administrator, as applicable, and certain actions by the Master
Servicer or the Certificate Administrator indicating its insolvency or inability
to pay its obligations. A default pursuant to the terms of any Agency Securities
included in any Trust will not constitute an Event of Default under the related
Pooling and Servicing Agreement.

RIGHTS UPON EVENT OF DEFAULT

     So long as an Event of Default remains unremedied, either the Depositor or
the Trustee may, and, at the direction of the holders of Certificates evidencing
not less than 51% of the aggregate voting rights in the related Trust, the
Trustee shall, by written notification to the Master Servicer or the Certificate
Administrator, as applicable, and to the Depositor or the Trustee, terminate all
of the rights and obligations of the Master Servicer or the Certificate
Administrator under the Pooling and Servicing Agreement (other than any rights
of the Master Servicer or the Certificate Administrator as Certificateholder)
covering such Trust and in and to the Mortgage Collateral and the proceeds
thereof, whereupon the Trustee or, upon notice to the Depositor and with the

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Depositor's consent, its designee will succeed to all responsibilities, duties
and liabilities of the Master Servicer or the Certificate Administrator under
such Pooling and Servicing Agreement (other than the obligation to purchase
Mortgage Collateral under certain circumstances) and will be entitled to similar
compensation arrangements. In the event that the Trustee would be obligated to
succeed the Master Servicer but is unwilling so to act, it may appoint (or if it
is unable so to act, it shall appoint) or petition a court of competent
jurisdiction for the appointment of, a Fannie Mae or Freddie Mac approved
mortgage servicing institution with a net worth of at least $10,000,000 to act
as successor to the Master Servicer under the Pooling and Servicing Agreement
(unless otherwise set forth in the Pooling and Servicing Agreement). Pending
such appointment, the Trustee is obligated to act in such capacity. The Trustee
and such successor may agree upon the servicing compensation to be paid, which
in no event may be greater than the compensation to the initial Master Servicer
or the Certificate Administrator under the Pooling and Servicing Agreement.

     No Certificateholder will have any right under a Pooling and Servicing
Agreement to institute any proceeding with respect to such Pooling and Servicing
Agreement unless such holder previously has given to the Trustee written notice
of default and the continuance thereof and unless the holders of Certificates of
any class evidencing not less than 25% of the aggregate Percentage Interests
constituting such class have made written request upon the Trustee to institute
such proceeding in its own name as Trustee thereunder and have offered to the
Trustee reasonable indemnity and the Trustee for 60 days after receipt of such
request and indemnity has neglected or refused to institute any such proceeding.
However, the Trustee will be under no obligation to exercise any of the trusts
or powers vested in it by the Pooling and Servicing Agreement or to institute,
conduct or defend any litigation thereunder or in relation thereto at the
request, order or direction of any of the holders of Certificates covered by
such Pooling and Servicing Agreement, unless such Certificateholders have
offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which may be incurred therein or thereby.

AMENDMENT

     Each Pooling and Servicing Agreement may be amended by the Depositor, the
Master Servicer, the Certificate Administrator or any Servicer, as applicable,
and the Trustee, without the consent of the related Certificateholders: (i) to
cure any ambiguity; (ii) to correct or supplement any provision therein which
may be inconsistent with any other provision therein or to correct any error;
(iii) to change the timing and/or nature of deposits in the Custodial Account or
the Certificate Account or to change the name in which the Custodial Account is
maintained (except that (a) deposits to the Certificate Account may not occur
later than the related Distribution Date, (b) such change may not adversely
affect in any material respect the interests of any Certificateholder, as
evidenced by an opinion of counsel, and (c) such change may not adversely affect
the then-current rating of any rated classes of Certificates, as evidenced by a
letter from each applicable Rating Agency); (iv) if a REMIC election has been
made with respect to the related Trust, to modify, eliminate or add to any of
its provisions (a) to the extent necessary 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 (1) such action is necessary or desirable to maintain such
qualification or to avoid or minimize such risk and (2) such action will not
adversely affect in any material respect the interests of any related
Certificateholder or (b) to modify the provisions regarding the transferability
of the REMIC Residual Certificates, provided that the Depositor has determined
that such change would not adversely affect the applicable ratings of any
classes of the Certificates, as evidenced by a letter from each applicable
Rating Agency, and that any such amendment will not give rise to any tax with
respect to the transfer of the REMIC Residual Certificates to a non-permitted
transferee; (v) to make any other provisions with respect to matters or
questions arising under such Pooling and Servicing Agreement which are not
materially inconsistent with the provisions thereof, so long as such action will
not adversely affect in any material respect the interests of any
Certificateholder; or (vi) to amend any provision that is not material to
holders of any class of related Certificates.

     The Pooling and Servicing Agreement may also be amended by the Depositor,
the Master Servicer, the Certificate Administrator or any Servicer, as
applicable, and the Trustee with the consent of the holders of Certificates of
each class affected thereby evidencing, in each case, not less than 66% of the
aggregate Percentage Interests constituting such class for the purpose of adding
any provisions to or changing in any manner or eliminating any of the provisions
of such Pooling and Servicing Agreement or of modifying in any manner the rights
of the related Certificateholders, except that no such amendment may (i) reduce
in any manner

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the amount of, or delay the timing of, payments received on Mortgage Collateral
which are required to be distributed on a Certificate of any class without the
consent of the holder of such Certificate or (ii) reduce the percentage of
Certificates of any class the holders of which are required to consent to any
such amendment unless the holders of all Certificates of such class have
consented to the change in such percentage.

     Notwithstanding the foregoing, if a REMIC election has been made with
respect to the related Trust, the Trustee will not be entitled to consent to any
amendment to a Pooling and Servicing Agreement without having first received an
opinion of counsel to the effect that such amendment or the exercise of any
power granted to the Master Servicer, the Certificate Administrator, any
Servicer, the Depositor or the Trustee in accordance with such amendment will
not result in the imposition of a material tax on the related Trust or cause
such Trust to fail to qualify as a REMIC.

TERMINATION; RETIREMENT OF CERTIFICATES

     The obligations created by the Pooling and Servicing Agreement for each
series of Certificates (other than certain limited payment and notice
obligations of the Trustee and the Depositor, respectively) will terminate upon
the payment to the related Certificateholders of all amounts held in the
Certificate Account or by the Master Servicer or any Servicer and required to be
paid to Certificateholders following the earlier of (i) the final payment or
other liquidation or disposition (or any advance with respect thereto) of the
last item of Mortgage Collateral subject thereto and all property acquired upon
foreclosure or deed in lieu of foreclosure of any Mortgage Loan or Contract and
(ii) the purchase by the Master Servicer, the Certificate Administrator, a
Servicer or the Depositor or, if specified in the related Prospectus Supplement,
by the holder of the REMIC Residual Certificates (see 'Certain Federal Income
Tax Consequences' below) from the Trust for such series of all remaining
Mortgage Collateral and all property acquired in respect of such Mortgage
Collateral. In addition to the foregoing, the Master Servicer, the Certificate
Administrator or the Depositor may have the option to purchase, in whole but not
in part, the Certificates specified in the related Prospectus Supplement in the
manner set forth in the related Prospectus Supplement. Upon the purchase of such
Certificates or at any time thereafter, at the option of the Master Servicer,
the Certificate Administrator or the Depositor, the Mortgage Collateral may be
sold, thereby effecting a retirement of the Certificates and the termination of
the Trust, or the Certificates so purchased may be held or resold by the Master
Servicer, the Certificate Administrator or the Depositor. Written notice of
termination of the Pooling and Servicing Agreement will be given to each
Certificateholder, and the final distribution will be made only upon surrender
and cancellation of the Certificates at an office or agency appointed by the
Trustee which will be specified in the notice of termination. If the
Certificateholders are permitted to terminate the trust under the applicable
Pooling and Servicing Agreement, a penalty may be imposed upon the
Certificateholders based upon the fee that would be foregone by the Master
Servicer, the Certificate Administrator or a Servicer, as applicable, because of
such termination.

     Any such purchase of Mortgage Collateral and property acquired in respect
of Mortgage Collateral evidenced by a series of Certificates shall be made at
the option of the Master Servicer, the Certificate Administrator, a Servicer,
the Depositor or, if applicable, the holder of the REMIC Residual Certificates
at the price specified in the related Prospectus Supplement. The exercise of
such right will effect early retirement of the Certificates of that series, but
the right of any such entity to purchase the Mortgage Collateral and related
property will be subject to the criteria, and will be at the price, set forth in
the related Prospectus Supplement. Such early termination may adversely affect
the yield to holders of certain classes of such Certificates. If a REMIC
election has been made, the termination of the related Trust will be effected in
a manner consistent with applicable federal income tax regulations and its
status as a REMIC.

     In addition to the optional repurchase of the property in the related Trust
described above, if so specified in the related Prospectus Supplement, a holder
of a class of Certificates of the related series (the 'CALL CLASS') will have
the right, solely at its discretion, to terminate the related Trust and thereby
effect early retirement of the Certificates of such series, on any Distribution
Date after the 12th Distribution Date following the date of initial issuance of
the related series of Certificates and until such date as the optional
termination rights of the Master Servicer and the Depositor become exercisable.
The Call Class will not be offered under the Prospectus Supplement. Any such
call will be of the entire Trust at one time; multiple calls with respect to any
series of Certificates will not be permitted. In such case, the holders of the
Certificates will be paid a price equal to 100% of the principal balance of such
Certificates as of the day of such purchase plus accrued interest thereon at the
applicable Pass-Though Rate (the 'CALL PRICE'). To exercise such call, the Call
Class holder must remit to the

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related Trustee for distribution to the Certificateholders funds equal to the
Call Price. If such funds are not deposited with the related Trustee, the
Certificates of such series will remain outstanding. In addition, in the case of
a Trust for which a REMIC election or elections have been made, such termination
will be effected in a manner consistent with applicable Federal income tax
regulations and its status as a REMIC. In connection with a call by the Call
Class, the final payment to the Certificateholders will be made upon surrender
of the related Certificates to the Trustee. Once the Certificates have been
surrendered and paid in full, there will not be any further liability to
Certificateholders.

THE TRUSTEE

     The Trustee under each Pooling and Servicing Agreement will be named in the
related Prospectus Supplement. The commercial bank or trust company serving as
Trustee may have normal banking relationships with the Depositor and/or its
affiliates, including Residential Funding.

     The Trustee may resign at any time, in which event the Depositor will be
obligated to appoint a successor trustee. The Depositor may also remove the
Trustee if the Trustee ceases to be eligible to continue as such under the
Pooling and Servicing Agreement or if the Trustee becomes insolvent. Upon
becoming aware of such circumstances, the Depositor will be obligated to appoint
a successor Trustee. The Trustee may also be removed at any time by the holders
of Certificates evidencing not less than 51% of the aggregate voting rights in
the related Trust. 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.

                              YIELD CONSIDERATIONS

     The yield to maturity of a Certificate will depend on the price paid by the
holder for such Certificate, the Pass-Through Rate on any such Certificate
entitled to payments of interest (which Pass-Through Rate may vary if so
specified in the related Prospectus Supplement) and the rate and timing of
principal payments (including prepayments, defaults, liquidations and
repurchases) on the Mortgage Collateral and the allocation thereof to reduce the
principal balance of such Certificate (or notional amount thereof, if
applicable).

     The amount of interest payments with respect to each item of Mortgage
Collateral distributed (or accrued in the case of Deferred Interest or Accrual
Certificates) monthly to holders of a class of Certificates entitled to payments
of interest will be calculated on the basis of such class's specified percentage
of each such payment of interest (or accrual in the case of Accrual
Certificates) and will be expressed as a fixed, adjustable or variable
Pass-Through Rate payable on the outstanding principal balance or notional
amount of such Certificate, or any combination of such Pass-Through Rates,
calculated as described herein and in the related Prospectus Supplement. See
'Description of the Certificates -- Distributions.' Holders of Strip
Certificates or a class of Certificates having a Pass-Through Rate that varies
based on the weighted average net interest rate of the underlying Mortgage
Collateral will be affected by disproportionate prepayments and repurchases of
Mortgage Collateral having higher amounts payable to the Strip Certificates or
higher net interest rates, as applicable.

     The effective yield to maturity to each holder of Certificates entitled to
payments of interest will be below that otherwise produced by the applicable
Pass-Through Rate and purchase price of such Certificate because, while interest
will accrue on each Mortgage Loan or Contract from the first day of each month,
the distribution of such interest will be made on the 25th day (or, if such day
is not a business day, the next succeeding business day) of the month following
the month of accrual or, in the case of a Trust including Agency Certificates,
such other day that is specified in the related Prospectus Supplement.

     A class of Certificates may be entitled to payments of interest at a fixed,
variable or adjustable Pass-Through Rate, or any combination of such
Pass-Through Rates, as specified in the related Prospectus Supplement. A
variable Pass-Through Rate may be calculated based on the weighted average of
the Mortgage Rates (net of Servicing Fees and any Certificate Administrator fee,
Excess Spread or Excluded Spread (each, a 'NET MORTGAGE RATE')) of the related
Mortgage Collateral for the month preceding the Distribution Date, by reference
to an index or otherwise. The aggregate payments of interest on a class of
Certificates, and the yield to maturity thereon, will be affected by the rate of
payment of principal on the Certificates (or the rate of reduction in the
notional amount of Certificates entitled to payments of interest only) and, in
the case of Certificates evidencing interests in ARM Loans, by changes in the
Net Mortgage Rates on the ARM Loans. See 'Maturity and Prepayment
Considerations' below. The yield on the Certificates will also be affected by
liquidations of Mortgage Loans or Contracts following Mortgagor defaults and by
purchases of Mortgage Collateral in the

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event of breaches of representations made in respect of such Mortgage Collateral
by the Depositor, the Master Servicer and others, or conversions of ARM Loans to
a fixed interest rate. See 'The Trusts -- Representations with Respect to
Mortgage Collateral.'

     In general, if a Certificate is purchased at a premium over its face amount
and payments of principal on the related Mortgage Collateral occur at a rate
faster than anticipated at the time of purchase, the purchaser's actual yield to
maturity will be lower than that assumed at the time of purchase. Conversely, if
a class of Certificates is purchased at a discount from its face amount and
payments of principal on the related Mortgage Collateral occur at a rate slower
than that assumed at the time of purchase, the purchaser's actual yield to
maturity will be lower than that originally anticipated. If Strip Certificates
are issued evidencing a right to payments of interest only or disproportionate
payments of interest, a faster than expected rate of principal prepayments on
the Mortgage Collateral will negatively affect the total return to investors in
any such Certificates. If Strip Certificates are issued evidencing a right to
payments of principal only or disproportionate payments of principal, a slower
than expected rate of principal payments on the Mortgage Collateral could
negatively affect the anticipated yield on such Strip Certificates. If
Certificates with either of the foregoing characteristics are issued, the total
return to investors of such Certificates will be extremely sensitive to such
prepayments. In addition, the total return to investors of Certificates
evidencing a right to distributions of interest at a rate that is based on the
weighted average Net Mortgage Rate of the Mortgage Collateral from time to time
will be adversely affected by principal prepayments on Mortgage Collateral with
Mortgage Rates higher than the weighted average Mortgage Rate on the Mortgage
Collateral. In general, mortgage loans or manufactured housing contracts with
higher Mortgage Rates prepay at a faster rate than mortgage loans or
manufactured housing contracts with lower Mortgage Rates. The yield on a class
of Strip Certificates that is entitled to receive a portion of principal or
interest from each item of Mortgage Collateral in a Trust will be affected by
any losses on the Mortgage Collateral because of the effect on timing and amount
of payments. In certain circumstances, rapid prepayments may result in the
failure of such holders to recoup their original investment. In addition, the
yield to maturity on certain other types of classes of Certificates, including
Accrual Certificates, Certificates with a Pass-Through Rate that fluctuates
inversely with or at a multiple of an index or certain other classes in a series
including more than one class of Certificates, may be relatively more sensitive
to the rate of prepayment on the related Mortgage Collateral than other classes
of Certificates.

     The rate of defaults on the Mortgage Loans or Contracts will affect the
rate and timing of principal prepayments on such Mortgage Collateral and, thus,
the yield on the Certificates. Defaults on the Mortgage Loans or Contracts may
lead to Realized Losses upon foreclosure and liquidation. To the extent Realized
Losses are not covered by any credit enhancement, they will be allocated to
Certificates as described in the related Prospectus Supplement and, accordingly,
will affect the yield on such Certificates. In general, defaults on mortgage
loans or manufactured housing contracts are expected to occur with greater
frequency in their early years.

     In addition, the rate and timing of prepayments, defaults and liquidations
on the Mortgage Loans or Contracts will be affected by the general economic
condition of the region of the country or the locality in which the related
Mortgaged Properties are located. The risk of delinquencies and loss is greater
and prepayments are less likely in regions where a weak or deteriorating economy
exists, as may be evidenced by, among other factors, increasing unemployment or
falling property values. The yield on any class of Certificates and the timing
of principal payments thereon may also be affected by certain modifications or
actions that may be approved by the Master Servicer or a Special Servicer as
described herein under 'Description of the Certificates -- Servicing and
Administration of Mortgage Collateral -- Collection and Other Servicing
Procedures' and ' -- Special Servicing and Special Servicing Agreements' in
connection with a Mortgage Loan that is in default (or if a default is
reasonably foreseeable).

     Mortgage Loans or Contracts may have been originated using underwriting
standards that are less stringent than the underwriting standards applied by
other first mortgage loan purchase programs such as those run by Fannie Mae or
Freddie Mac or by the Company's affiliate, Residential Funding, for the purpose
of collateralizing securities issued by Residential Funding Mortgage Securities
I, Inc. The rate of default on refinance, limited documentation or no
documentation mortgage loans, and on mortgage loans or manufactured housing
contracts with higher Loan-to-Value Ratios, borrowers whose income is not
required to be stated in the loan application, and mortgage loans with
Loan-to-Value Ratios over 80% that do not require primary mortgage insurance,
may be higher than on other mortgage loans or manufactured housing contracts.
Likewise, the rate of

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default on mortgage loans or manufactured housing contracts that are secured by
investment properties or mortgaged properties with smaller or larger parcels of
land or mortgage loans that are made to International Borrowers may be higher
than on other mortgage loans or manufactured housing contracts. In addition,
Manufactured Homes may decline in value even in areas where real estate values
generally have not declined. The risk of loss on Puerto Rico Mortgage Loans may
be greater than Mortgage Loans that are secured by properties located in the
United States. See 'Certain Legal Aspects of Mortgage Loans and Contracts.'

     The timing of changes in the rate of principal payments on or repurchases
of the Mortgage Collateral may significantly affect an investor's actual yield
to maturity, even if the average rate of principal payments experienced over
time is consistent with an investor's expectation. In general, the earlier a
prepayment of principal on the Mortgage Collateral or a repurchase thereof, the
greater will be the effect on an investor's yield to maturity. As a result, the
effect on an investor's yield of principal payments and repurchases occurring at
a rate higher (or lower) than the rate anticipated by the investor during the
period immediately following the issuance of a series of Certificates would not
be fully offset by a subsequent like reduction (or increase) in the rate of
principal payments.

     When a full prepayment is made on a Mortgage Loan or Contract, the
Mortgagor is charged interest on the principal amount of the Mortgage Loan or
Contract so prepaid for the number of days in the month actually elapsed up to
the date of the prepayment, at a daily rate determined by dividing the Mortgage
Rate by 365. Unless otherwise specified in the related Prospectus Supplement,
prepayments in full or final liquidations will reduce the amount of interest
distributed in the following month to holders of Certificates entitled to
distributions of interest because the resulting Prepayment Interest Shortfall
will not be covered by Compensating Interest. See 'Description of the
Certificates -- Prepayment Interest Shortfalls.' Unless otherwise specified in
the related Prospectus Supplement, a partial prepayment of principal is applied
so as to reduce the outstanding principal balance of the related Mortgage Loan
or Contract as of the first day of the month in which such partial prepayment is
received. As a result, unless otherwise specified in the related Prospectus
Supplement, the effect of a partial prepayment on a Mortgage Loan or Contract
will be to reduce the amount of interest distributed to holders of Certificates
in the month following the receipt of such partial prepayment by an amount equal
to one month's interest at the applicable Pass-Through Rate or Net Mortgage
Rate, as the case may be, on the prepaid amount. See 'Description of the
Certificates -- Prepayment Interest Shortfalls.' Neither full or partial
principal prepayments nor Liquidation Proceeds will be distributed until the
Distribution Date in the month following receipt. See 'Maturity and Prepayment
Considerations.'

     With respect to certain ARM Loans, the Mortgage Rate at origination may be
below the rate that would result from the sum of the then-applicable Index and
Note Margin. Under the applicable underwriting standards, the Mortgagor under
each Mortgage Loan or Contract generally will be qualified on the basis of the
Mortgage Rate in effect at origination and not the higher rate that would be
produced by the sum of the Index and Note Margin. The repayment of any such
Mortgage Loan or Contract may thus be dependent on the ability of the Mortgagor
to make larger level monthly payments following the adjustment of the Mortgage
Rate. In addition, the periodic increase in the amount paid by the Mortgagor of
a Buy-Down Mortgage Loan during or at the end of the applicable Buy-Down Period
may create a greater financial burden for the Mortgagor, who might not have
otherwise qualified for a mortgage under the applicable underwriting guidelines,
and may accordingly increase the risk of default with respect to the related
Mortgage Loan.

     If so specified in the related Prospectus Supplement, a Trust may contain
Neg-Am ARM Loans with fluctuating Mortgage Rates that adjust more frequently
than the monthly payment with respect to such Mortgage Loans or Contracts.
During a period of rising interest rates as well as immediately after
origination, the amount of interest accruing on the principal balance of such
Mortgage Loans may exceed the amount of the minimum scheduled monthly payment
thereon. As a result, a portion of the accrued interest on Neg-Am ARM Loans may
become Deferred Interest which will be added to the principal balance thereof
and will bear interest at the applicable Mortgage Rate. The addition of any such
Deferred Interest to the principal balance of any related class of Certificates
will lengthen the weighted average life thereof and may adversely affect yield
to holders thereof. In addition, with respect to certain Neg-Am ARM Loans,
during a period of declining interest rates, it might be expected that each
minimum scheduled monthly payment on such a Mortgage Loan would exceed the
amount of scheduled principal and accrued interest on the principal balance
thereof, and since such excess will be applied to reduce the principal balance
of the related class or classes of Certificates, the weighted average life of
such Certificates will be reduced and may adversely affect yield to holders
thereof.

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     If so specified in the related Prospectus Supplement, a Trust may contain
GPM Loans or Buy-Down Mortgage Loans which have monthly payments that increase
during the first few years following origination. Mortgagors generally will be
qualified for such loans on the basis of the initial monthly payment. To the
extent that the related Mortgagor's income does not increase at the same rate as
the monthly payment, such a loan may be more likely to default than a mortgage
loan with level monthly payments.

     If so specified in the related Prospectus Supplement, a Trust may contain
Balloon Loans which require a single payment of a Balloon Amount. The payment of
Balloon Amounts may result in a lower yield on Certificates than would be the
case if all such Mortgage Collateral was fully-amortizing because the maturity
of a Balloon Loan occurs earlier than that for a fully-amortizing Mortgage Loan
due to the payment of a Balloon Amount. Balloon Loans also pose a greater risk
of default than fully-amortizing Mortgage Loans because Mortgagors are required
to pay the Balloon Amount upon maturity. A Mortgagor's ability to pay a Balloon
Amount may depend on its ability to refinance the related Mortgaged Property.

     If credit enhancement for a series of Certificates is provided by a Letter
of Credit, insurance policy or bond that is issued or guaranteed by an entity
that suffers financial difficulty, such credit enhancement may not provide the
level of support that was anticipated at the time an investor purchased its
Certificate. In the event of a default under the terms of such a Letter of
Credit, insurance policy or bond, any Realized Losses on the Mortgage Collateral
not covered by such credit enhancement will be applied to a series of
Certificates in the manner described in the related Prospectus Supplement and
may reduce an investor's anticipated yield to maturity.

     For each Mortgage Pool, if all necessary Advances are made and if there is
no unrecoverable loss on any Mortgage Loan, the net effect of each distribution
respecting interest will be to pass-through to each holder of a class of
Certificates entitled to payments of interest an amount which is equal to one
month's interest at the applicable Pass-Through Rate on such class's principal
balance or notional balance, as adjusted downward to reflect any decrease in
interest caused by any principal prepayments and the addition of any Deferred
Interest to the principal balance of any Mortgage Loan. See 'Description of the
Certificates -- Distributions -- Principal and Interest on the Certificates.'

     The related Prospectus Supplement may set forth other factors concerning
the Mortgage Collateral securing a series of Certificates or the structure of
such series that will affect the yield on such Certificates.

                     MATURITY AND PREPAYMENT CONSIDERATIONS

     As indicated above under 'The Trusts,' the original terms to maturity of
the Mortgage Collateral in a given Trust will vary depending upon the type of
Mortgage Collateral included in such Trust. The Prospectus Supplement for a
series of Certificates will contain information with respect to the types and
maturities of the Mortgage Collateral in the related Trust. The prepayment
experience, the timing and rate of repurchases and the timing and amount of
liquidations with respect to the related Mortgage Loans or Contracts will affect
the life and yield of the related series of Certificates.

     Prepayments on mortgage loans and manufactured housing contracts are
commonly measured relative to a prepayment standard or model. The Prospectus
Supplement for each series of Certificates may describe one or more such
prepayment standards or models and may contain tables setting forth the
projected yields to maturity on each class of Certificates or the weighted
average life of each class of Certificates and the percentage of the original
principal amount of each class of Certificates of such series that would be
outstanding on specified payment dates for such series based on the assumptions
stated in such Prospectus Supplement, including assumptions that prepayments on
the Mortgage Collateral are made at rates corresponding to various percentages
of the prepayment standard or model specified in the related Prospectus
Supplement. There is no assurance that prepayment of the Mortgage Collateral
underlying a series of Certificates will conform to any level of the prepayment
standard or model specified in the related Prospectus Supplement.

     A number of factors, including homeowner mobility, economic conditions,
changes in mortgagors' housing needs, job transfers, unemployment, mortgagors'
net equity in the properties securing the mortgages, servicing decisions,
enforceability of due-on-sale clauses, mortgage market interest rates, mortgage
recording taxes, solicitations, the availability of mortgage funds, and the
obtaining of secondary financing by the Mortgagor, may affect prepayment
experience. The rate of prepayment with respect to conventional fixed-rate
mortgage loans and contracts has fluctuated significantly in recent years. In
general, however, if prevailing interest rates fall

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significantly below the Mortgage Rates on the Mortgage Loans or Contracts
underlying a series of Certificates, the prepayment rate of such Mortgage Loans
or Contracts is likely to be higher than if prevailing rates remain at or above
the rates borne by such Mortgage Loans or Contracts. It should be noted that
Certificates of a certain series may evidence an interest in Mortgage Loans or
Contracts with different Mortgage Rates. Accordingly, the prepayment experience
of these Certificates will to some extent be a function of the range of interest
rates of such Mortgage Loans or Contracts. The Depositor is not aware of any
historical prepayment experience with respect to mortgage loans secured by
properties located in Puerto Rico and, accordingly, prepayments on such loans
may not occur at the same rate or be affected by the same factors as other
mortgage loans.

     Unless otherwise specified in the related Prospectus Supplement, all
Mortgage Loans (other than ARM Loans) will contain due-on-sale provisions
permitting the mortgagee to accelerate the maturity of the Mortgage Loan upon
sale or certain transfers by the Mortgagor of the underlying Mortgaged Property.
Unless the related Prospectus Supplement indicates otherwise, the Master
Servicer will generally enforce any due-on-sale clause to the extent it has
knowledge of the conveyance or proposed conveyance of the underlying Mortgaged
Property and it is entitled to do so under applicable law, provided, however,
that the Master Servicer will not take any action in relation to the enforcement
of any due-on-sale provision which would adversely affect or jeopardize coverage
under any applicable insurance policy. An ARM Loan is assumable under certain
conditions if the proposed transferee of the related Mortgaged Property
establishes its ability to repay the Mortgage Loan and, in the reasonable
judgment of the Master Servicer or the related Subservicer, the security for the
ARM Loan would not be impaired by the assumption. The extent to which ARM Loans
are assumed by purchasers of the Mortgaged Properties rather than prepaid by the
related Mortgagors in connection with the sales of the Mortgaged Properties will
affect the weighted average life of the related series of Certificates. See
'Description of the Certificates' and 'Certain Legal Aspects of Mortgage Loans
and Contracts.'

     Unless otherwise specified in the related Prospectus Supplement, all of the
Mortgage Loans or Contracts may be prepaid without penalty in full or in part at
any time. The terms of the related Pooling and Servicing Agreement generally
will require the Servicer or Master Servicer, as the case may be, to enforce any
due-on-sale clause to the extent it has knowledge of the conveyance or the
proposed conveyance of the underlying Mortgaged Property and to the extent
permitted by applicable law, except that any enforcement action that would
impair or threaten to impair any recovery under any related insurance policy
will not be required or permitted. See 'Description of the
Certificates -- Servicing and Administration of Mortgage Collateral --
Enforcement of `Due-on-Sale' Clauses' and 'Certain Legal Aspects of Mortgage
Loans and Contracts -- The Mortgage Loans -- Enforceability of Certain
Provisions' and ' -- The Contracts' for a description of certain provisions of
each Pooling and Servicing Agreement and certain legal aspects that may affect
the prepayment rate of Mortgage Loans or Contracts.

     Certain types of Mortgage Collateral included in a Trust may have
characteristics that make it more likely to default than collateral provided for
mortgage pass-through certificates from other mortgage purchase programs. The
Depositor anticipates including 'limited documentation' and 'no documentation'
Mortgage Loans and Contracts, Puerto Rico Mortgage Loans and Mortgage Loans and
Contracts that were made to International Borrowers, secured by investment
properties and have other characteristics not present in such other programs.
Such Mortgage Collateral may be susceptible to a greater risk of default and
liquidation than might otherwise be expected by investors in the related
Certificates. See 'Yield Considerations.'

     In addition, certain Mortgage Securities included in a Mortgage Pool may be
backed by underlying Mortgage Loans having differing interest rates.
Accordingly, the rate at which principal payments are received on the related
Certificates will, to a certain extent, depend on the interest rates on such
underlying Mortgage Loans.

     A Subservicer or the Master Servicer may, from time to time, implement
refinancing or modification programs designed to encourage refinancing. A
Subservicer or the Master Servicer, including an affiliate of the Master
Servicer, may also aggressively pursue refinancing or loan modification programs
that could require little or no cost and significantly decreased documentation
from the borrower. Such programs may include, without limitation, general or
targeted solicitations, the offering of pre-approved applications, reduced
origination fees or closing costs, or other financial incentives. Targeted
solicitations may be based on a variety of factors, including the credit of the
borrower, the location of the mortgaged property, or the Subservicer's or Master
Servicer's judgment as to the likelihood of a borrower refinancing. In addition,
Subservicers or the Master Servicer may encourage assumptions of Mortgage Loans,
including defaulted Mortgage Loans, under which creditworthy

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borrowers assume the outstanding indebtedness of such Mortgage Loans which may
be removed from the related Mortgage Pool. As a result of such programs, with
respect to the Mortgage Pool underlying any Trust (i) the rate of principal
prepayments of the Mortgage Loans in such Mortgage Pool may be higher than would
otherwise be the case, (ii) the average credit or collateral quality of the
Mortgage Loans remaining in the Mortgage Pool may decline and (iii) weighted
average interest rate on the Mortgage Loans that remain in the Trust may be
lower, thus reducing the rate of prepayments on the Mortgage Loans in the
future. In addition, a Subservicer may allow the refinancing of a Mortgage Loan
by accepting prepayments thereon and permitting a new loan secured by a mortgage
on the same property, which may be originated by the Subservicer or the Master
Servicer or any of their respective affiliates or by an unrelated entity. In the
event of such a refinancing, the new loan would not be included in the related
Trust and, therefore, such refinancing would have the same effect as a
prepayment in full of the related Mortgage Loan.

     All statistics known to the Depositor that have been compiled with respect
to prepayment experience on mortgage loans indicate that while some mortgage
loans may remain outstanding until their stated maturities, a substantial number
will be paid prior to their respective stated maturities.

     There are no uniform statistics compiled for prepayments of contracts
relating to Manufactured Homes. Prepayments on manufactured housing contracts
may be influenced by a variety of economic, geographic, social and other facts,
including repossessions, aging, seasonality and interest rate fluctuations.
Other factors affecting prepayment of manufactured housing contracts include
changes in housing needs, job transfers, unemployment and servicing decisions.
An investment in Certificates evidencing interests in Contracts may be affected
by, among other things, a downturn in regional or local economic conditions.
These regional or local economic conditions are often volatile, and historically
have affected the delinquency, loan loss and repossession experience of the
Contracts. To the extent that losses on the Contracts are not covered by any
credit enhancement, holders of the Certificates of a series evidencing interests
in such Contracts will bear all risk of loss resulting from default by
Mortgagors and will have to look primarily to the value of the Manufactured
Homes, which generally depreciate in value, for recovery of the outstanding
principal and unpaid interest of the defaulted Contracts. See 'The Trusts -- The
Contracts.'

     While most manufactured housing contracts will contain 'due-on-sale'
provisions permitting the holder of the contract to accelerate the maturity of
the contract upon conveyance by the Mortgagor, the Master Servicer, Servicer or
Subservicer, as applicable, may permit proposed assumptions of contracts where
the proposed buyer of the Manufactured Home meets the underwriting standards
described above. Such assumption would have the effect of extending the average
life of the contract. FHA Loans, FHA Contracts, VA Loans and VA Contracts are
not permitted to contain 'due-on-sale' clauses, and are freely assumable.

     Although the Mortgage Rates on ARM Loans will be subject to periodic
adjustments, such adjustments generally will (i) not increase or decrease such
Mortgage Rates by more than a fixed percentage amount on each adjustment date,
(ii) not increase such Mortgage Rates over a fixed percentage amount during the
life of any ARM Loan and (iii) be based on an index (which may not rise and fall
consistently with mortgage interest rates) plus the related Note Margin (which
may be different from margins being used at the time for newly-originated
adjustable rate mortgage loans). As a result, the Mortgage Rates on the ARM
Loans in a Trust at any time may not equal the prevailing rates for similar,
newly originated adjustable rate mortgage loans. In certain rate environments,
the prevailing rates on fixed-rate mortgage loans may be sufficiently low in
relation to the then-current Mortgage Rates on ARM Loans that the rate of
prepayment may increase as a result of refinancings. There can be no certainty
as to the rate of prepayments on the Mortgage Collateral during any period or
over the life of any series of Certificates.

     With respect to Balloon Loans, payment of the Balloon Amount (which, based
on the amortization schedule of such Mortgage Loans is expected to be a
substantial amount) will generally depend on the Mortgagor's ability to obtain
refinancing of such a Mortgage Loan or to sell the Mortgaged Property prior to
the maturity of the Balloon Loan. The ability to obtain refinancing will depend
on a number of factors prevailing at the time refinancing or sale is required,
including, without limitation, real estate values, the Mortgagor's financial
situation, prevailing mortgage loan interest rates, the Mortgagor's equity in
the related Mortgaged Property, tax laws and prevailing general economic
conditions. Unless otherwise specified in the related Prospectus Supplement,
none of the Depositor, the Master Servicer, a Servicer, a Subservicer, a
Mortgage Collateral Seller nor any of their affiliates will be obligated to
refinance or repurchase any Mortgage Loan or to sell the Mortgaged Property.

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     No assurance can be given that the value of the Mortgaged Property securing
a Mortgage Loan or Contract has remained or will remain at the level existing on
the date of origination. If the residential real estate market should experience
an overall decline in property values such that the outstanding balances of the
Mortgage Loans or Contracts and any secondary financing on the Mortgaged
Properties in a particular Mortgage Pool or Contract Pool become equal to or
greater than the value of the Mortgaged Properties, the actual rates of
delinquencies, foreclosures and losses could be higher than those now generally
experienced in the mortgage lending industry. In addition, the value of property
securing Cooperative Loans and the delinquency rates with respect to Cooperative
Loans could be adversely affected if the current favorable tax treatment of
cooperative tenant stockholders were to become less favorable. See 'Certain
Legal Aspects of Mortgage Loans and Contracts.'

     To the extent that losses resulting from delinquencies, losses and
foreclosures or repossession of Mortgaged Property with respect to Mortgage
Loans or Contracts included in a Trust for a series of Certificates are not
covered by the methods of credit enhancement described herein under 'Description
of Credit Enhancement' or in the related Prospectus Supplement, such losses will
be borne by holders of the Certificates of such series. Even where credit
enhancement covers all Realized Losses resulting from delinquency and
foreclosure or repossession, the effect of foreclosures and repossessions may be
to increase prepayment experience on the Mortgage Collateral, thus reducing
average weighted life and affecting yield to maturity. See 'Yield
Considerations.'

     Under certain circumstances, the Master Servicer, a Servicer, the Depositor
or, if specified in the related Prospectus Supplement, the holders of the REMIC
Residual Certificates may have the option to purchase the Mortgage Loans in a
Trust. See 'The Pooling and Servicing Agreement -- Termination; Retirement of
Certificates.' Any such repurchase will shorten the weighted average lives of
the related Certificates.

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             CERTAIN LEGAL ASPECTS OF MORTGAGE LOANS AND CONTRACTS

     The following discussion contains summaries of certain legal aspects of
mortgage loans and manufactured housing contracts that are general in nature.
Because such legal aspects are governed in part by state law (which laws may
differ substantially from state to state), 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 Mortgaged Properties may be situated. The summaries
are qualified in their entirety by reference to the applicable federal and state
laws governing the Mortgage Loans or Contracts.

THE MORTGAGE LOANS

  General

     The Mortgage Loans (other than Cooperative Loans) will be secured by deeds
of trust, mortgages or deeds to secure debt depending upon the prevailing
practice in the state in which the related Mortgaged Property is located. In
some states, a mortgage, deed of trust or deed to secure debt creates a lien
upon the related real property. In other states, the mortgage, deed of trust or
deed to secure debt conveys legal title to the property to the mortgagee subject
to a condition subsequent (i.e., the payment of the indebtedness secured
thereby). Such instruments are not prior to the lien for real estate taxes and
assessments and other charges imposed under governmental police powers. Priority
with respect to such instruments depends on their terms and in some cases on the
terms of separate subordination or inter-creditor agreements, and generally on
the order of recordation of the mortgage, deed of trust or deed to secure debt
in the appropriate recording office. There are two parties to a mortgage, the
mortgagor, who is the borrower and homeowner, and the mortgagee, who is the
lender. Under the mortgage instrument, the mortgagor delivers to the mortgagee a
note or bond and the mortgage. In certain states, three parties may be involved
in a mortgage financing when title to the property is held by a land trustee who
is the land trustee under a land trust agreement of which the borrower is the
beneficiary. At origination of such a mortgage loan, the land trustee, as fee
owner of the property, executes the mortgage and the borrower executes (1) a
separate undertaking to make payments on the mortgage note and (2) an assignment
of leases and rents. Although a deed of trust is similar to a mortgage, a deed
of trust has three parties: the trustor, who is the borrower/homeowner; the
beneficiary, who is the lender; and a third-party grantee called the trustee.
Under a deed of trust, the borrower grants the property, irrevocably until the
debt is paid, in trust, generally with a power of sale, to the trustee to secure
payment of the obligation. A deed to secure debt typically has two parties,
pursuant to which the borrower, or grantor, conveys title to the real property
to the grantee, or lender, generally with a power of sale, until such time as
the debt is repaid. The trustee's authority under a deed of trust, the grantee's
authority under a deed to secure debt and the mortgagee's authority under a
mortgage are governed by the law of the state in which the real property is
located, the express provisions of the deed of trust, mortgage or deed to secure
debt and, in certain deed of trust, transactions, the directions of the
beneficiary.

  Cooperative Loans

     If specified in the Prospectus Supplement relating to a series of
Certificates, the Mortgage Loans may include Cooperative Loans. Each Cooperative
Note evidencing a Cooperative Loan will be secured by a security interest in
shares issued by the related Cooperative that owns the related apartment
building, which is a corporation entitled to be treated as a housing cooperative
under federal tax law, and in the related proprietary lease or occupancy
agreement granting exclusive rights to occupy a specific dwelling unit in the
Cooperative's building. The security agreement will create a lien upon, or grant
a security interest in, the Cooperative shares and proprietary leases or
occupancy agreements, the priority of which will depend on, among other things,
the terms of the particular security agreement as well as the order of
recordation of the agreement (or the filing of the financing statements related
thereto) in the appropriate recording office or the taking of possession of the
Cooperative shares, depending on the law of the state in which the Cooperative
is located. Such a lien or security interest is not, in general, prior to liens
in favor of the cooperative corporation for unpaid assessments or common
charges.

     Unless otherwise specified in the related Prospectus Supplement, all
Cooperative buildings relating to the Cooperative Loans are located in the State
of New York. Generally, each Cooperative owns in fee or has a leasehold interest
in all the real property and owns in fee or leases the building and all separate
dwelling units therein. The Cooperative is directly responsible for property
management and, in most cases, payment of real

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estate taxes, other governmental impositions and hazard and liability insurance.
If there is an underlying mortgage (or mortgages) on the Cooperative's building
or underlying land, as is generally the case, or an underlying lease of the
land, as is the case in some instances, the Cooperative, as mortgagor or lessee,
as the case may be, is also responsible for fulfilling such mortgage or rental
obligations. An underlying mortgage loan is ordinarily obtained by the
Cooperative in connection with either the construction or purchase of the
Cooperative's building or the obtaining of capital by the Cooperative. The
interest of the occupant under proprietary leases or occupancy agreements as to
which that Cooperative is the landlord is generally subordinate to the interest
of the holder of an underlying mortgage and to the interest of the holder of a
land lease. If the Cooperative is unable to meet the payment obligations (i)
arising under an underlying mortgage, the mortgagee holding an underlying
mortgage could foreclose on that mortgage and terminate all subordinate
proprietary leases and occupancy agreements or (ii) arising under its land
lease, the holder of the landlord's interest under the land lease could
terminate it and all subordinate proprietary leases and occupancy agreements. In
addition, an underlying mortgage on a Cooperative may provide financing in the
form of a mortgage that does not fully amortize, with a significant portion of
principal being due in one final payment at maturity. The inability of the
Cooperative to refinance a mortgage and its consequent inability to make such
final payment could lead to foreclosure by the mortgagee. Similarly, a land
lease has an expiration date and the inability of the Cooperative to extend its
term or, in the alternative, to purchase the land, could lead to termination of
the Cooperative's interest in the property and termination of all proprietary
leases and occupancy agreements. In either event, a foreclosure by the holder of
an underlying mortgage or the termination of the underlying lease could
eliminate or significantly diminish the value of any collateral held by the
lender who financed the purchase by an individual tenant-stockholder of shares
of the Cooperative or, in the case of the Mortgage Loans, the collateral
securing the Cooperative Loans.

     Each Cooperative is owned by shareholders (referred to as
tenant-stockholders) who, through ownership of stock or shares in the
Cooperative, receive proprietary leases or occupancy agreements which confer
exclusive rights to occupy specific dwellings. Generally, a tenant-stockholder
of a Cooperative must make a monthly rental payment to the Cooperative pursuant
to the proprietary lease, which rental payment represents such
tenant-stockholder's pro rata share of the Cooperative's payments for its
underlying mortgage, real property taxes, maintenance expenses and other capital
or ordinary expenses. An ownership interest in a Cooperative and accompanying
occupancy rights may be financed through a Cooperative Loan evidenced by a
Cooperative Note and secured by an assignment of and a security interest in the
occupancy agreement or proprietary lease and a security interest in the related
shares of the related Cooperative. The lender generally takes possession of the
share certificate and a counterpart of the proprietary lease or occupancy
agreement and a financing statement covering the proprietary lease or occupancy
agreement and the Cooperative shares is filed in the appropriate state and local
offices to perfect the lender's interest in its collateral. Subject to the
limitations discussed below, upon default of the tenant-stockholder, the lender
may sue for judgment on the Cooperative Note, dispose of the collateral at a
public or private sale or otherwise proceed against the collateral or
tenant-stockholder as an individual as provided in the security agreement
covering the assignment of the proprietary lease or occupancy agreement and the
pledge of Cooperative shares. See ' -- Foreclosure on Shares of Cooperatives'
below.

  Tax Aspects of Cooperative Ownership

     In general, a 'tenant-stockholder' (as defined in Section 216(b)(2) of the
Code) of a corporation that qualifies as a 'cooperative housing corporation'
within the meaning of Section 216(b)(1) of the Code is allowed a deduction for
amounts paid or accrued within his or her taxable year to the corporation
representing his or her proportionate share of certain interest expenses and
certain real estate taxes allowable as a deduction under Section 216(a) of the
Code to the corporation under Sections 163 and 164 of the Code. In order for a
corporation to qualify under Section 216(b)(1) of the Code for its taxable year
in which such items are allowable as a deduction to the corporation, such
section requires, among other things, that at least 80% of the gross income of
the corporation be derived from its tenant-stockholders. By virtue of this
requirement, the status of a corporation for purposes of Section 216(b)(1) of
the Code must be determined on a year-to-year basis. Consequently, there can be
no assurance that Cooperatives relating to the Cooperative Loans will qualify
under such section for any particular year. In the event that such a Cooperative
fails to qualify for one or more years, the value of the collateral securing any
related Cooperative Loans could be significantly impaired because no deduction
would be allowable to tenant-stockholders under Section 216(a) of the Code with
respect to those years. In view of the significance of the tax benefits accorded
tenant-stockholders of a corporation that qualifies

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under Section 216(b)(1) of the Code, the likelihood that such a failure would be
permitted to continue over a period of years appears remote.

  Foreclosure on Mortgage Loans

     Although a deed of trust or a deed to secure debt may also be foreclosed by
judicial action, foreclosure of a deed of trust or a deed to secure debt is
generally accomplished by a non-judicial trustee's or grantee's, as applicable,
sale under a specific provision in the deed of trust or deed to secure debt
which authorizes the trustee or grantee, as applicable, to sell the property
upon any default by the borrower under the terms of the note or deed of trust or
deed to secure debt. In addition to any notice requirements contained in a deed
of trust or deed to secure debt, in some states, the trustee or grantee, as
applicable, must record a notice of default and send a copy to the
borrower/trustor and to any person who has recorded a request for a copy of
notice of default and notice of sale. In addition, in some states, the trustee
or grantee, as applicable, must provide notice to any other individual having an
interest of record in the real property, including any junior lienholders. If
the deed of trust or deed to secure debt is not reinstated within a specified
period, a notice of sale must be posted in a public place and, in most states,
published for a specific period of time in one or more newspapers. In addition,
some states' laws require that a copy of the notice of sale be posted on the
property and sent to all parties having an interest of record in the real
property.

     Foreclosure of a mortgage generally is accomplished by judicial action.
Generally, the action is initiated by the service of legal pleadings upon all
parties having an interest of record in the real property. Delays in completion
of the foreclosure may result from difficulties in locating and serving
necessary parties, including borrowers, such as International Borrowers, located
outside the jurisdiction in which the mortgaged property is located.
Difficulties in foreclosing on mortgaged properties owned by International
Borrowers may result in increased foreclosure costs, which may reduce the amount
of proceeds from the liquidation of the related mortgage loan available to be
distributed to the Certificateholders of the related series. If the mortgagee's
right to foreclose is contested, the legal proceedings necessary to resolve the
issue may be time-consuming.

     In some states, the borrower-trustor has the right to reinstate the loan at
any time following default until shortly before the trustee's sale. In general,
in such states, the borrower, or any other person having a junior encumbrance on
the real estate, may, during a reinstatement period, cure the default by paying
the entire amount in arrears plus the costs and expenses incurred in enforcing
the obligation.

     In the case of foreclosure under a mortgage, a deed of trust or deed to
secure debt, the sale by the referee or other designated officer or by the
trustee or grantee, as applicable, is a public sale. However, because of the
difficulty a potential buyer at the sale would have in determining the exact
status of title and because the physical condition of the property may have
deteriorated during the foreclosure proceedings, it is uncommon for a third
party to purchase the property at a foreclosure sale. Rather, it is common for
the lender to purchase the property from the trustee or grantee, as applicable,
or referee for a credit bid less than or equal to the unpaid principal amount of
the mortgage or deed of trust or deed to secure debt, accrued and unpaid
interest and the expense of foreclosure. Generally, state law controls the
amount of foreclosure costs and expenses, including attorneys' fees, which may
be recovered by a lender. Thereafter, subject to the right of the borrower in
some states to remain in possession during the redemption period, the lender
will assume the burdens of ownership, including obtaining hazard insurance and
making such repairs at its own expense as are necessary to render the property
suitable for sale. Generally, the lender will obtain the services of a real
estate broker and pay the broker's commission in connection with the sale 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 and, in some
states, the lender may be entitled to a deficiency judgment. See
' -- Anti-Deficiency Legislation and Other Limitations on Lenders' below. In
some cases, a deficiency judgment may be pursued in lieu of foreclosure. Any
loss may be reduced by the receipt of any mortgage insurance proceeds or other
forms of credit enhancement for a series of Certificates. See 'Description of
Credit Enhancement.'

  Foreclosure on Mortgaged Properties Located in the Commonwealth of Puerto Rico

     Under the laws of the Commonwealth of Puerto Rico the foreclosure of a real
estate mortgage usually follows an ordinary 'civil action' filed in the Superior
Court for the District where the mortgaged property is located. If the defendant
does not contest the action filed, a default judgment is rendered for the
plaintiff and the

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mortgaged property is sold at public auction, after publication of the sale for
two weeks, by posting written notice in three public places in the municipality
where the auction will be held, in the tax collection office and in the public
school of the municipality where the mortgagor resides, if known. If the
residence of the mortgagor is not known, publication in one of the newspapers of
general circulation in the Commonwealth must be made at least once a week for
two weeks. There may be as many as three public sales of the mortgaged property.
If the defendant contests the foreclosure, the case may be tried and judgment
rendered based on the merits of the case.

     There are no redemption rights after the public sale of a foreclosed
property under the laws of the Commonwealth. Commonwealth law provides for a
summary proceeding for the foreclosure of a mortgage, but it is very seldom used
because of concerns regarding the validity of such actions. The process may be
expedited if the mortgagee can obtain the consent of the defendant to the
execution of a deed in lieu of foreclosure.

     Under Commonwealth law, in the case of the public sale upon foreclosure of
a mortgaged property that (a) is subject to a mortgage loan that was obtained
for a purpose other than the financing or refinancing of the acquisition,
construction or improvement of such property and (b) is occupied by the
mortgagor as his principal residence, the mortgagor of such property has a right
to be paid the first $1,500 from the proceeds obtained on the public sale of
such property. The mortgagor can claim this sum of money from the mortgagee at
any time prior to the public sale or up to one year after such sale. Such
payment would reduce the amount of sales proceeds available to satisfy the
Mortgage Loan and may increase the amount of the loss.

  Foreclosure on Shares of Cooperatives

     The Cooperative shares owned by the tenant-stockholder, together with the
rights of the tenant-stockholder under the proprietary lease or occupancy
agreement, are pledged to the lender and are, in almost all cases, subject to
restrictions on transfer as set forth in the Cooperative's certificate of
incorporation and by-laws, as well as in the proprietary lease or occupancy
agreement. The proprietary lease or occupancy agreement, even while pledged, may
be cancelled by the Cooperative for failure by the tenant-stockholder to pay
rent or other obligations or charges owed by such tenant-stockholder, including
mechanics' liens against the Cooperative's building incurred by such
tenant-stockholder. Generally, rent and other obligations and charges arising
under a proprietary lease or occupancy agreement which are owed to the
Cooperative are made liens upon the shares to which the proprietary lease or
occupancy agreement relates. In addition, the proprietary lease or occupancy
agreement generally permits the Cooperative to terminate such lease or agreement
in the event the borrower defaults in the performance of covenants thereunder.
Typically, the lender and the Cooperative enter into a recognition agreement
which, together with any lender protection provisions contained in the
proprietary lease or occupancy agreement, establishes the rights and obligations
of both parties in the event of a default by the tenant-stockholder on its
obligations under the proprietary lease or occupancy agreement. A default by the
tenant-stockholder under the proprietary lease or occupancy agreement will
usually constitute a default under the security agreement between the lender and
the tenant-stockholder.

     The recognition agreement generally provides that, in the event that the
tenant-stockholder has defaulted under the proprietary lease or occupancy
agreement, the Cooperative will take no action to terminate such lease or
agreement until the lender has been provided with notice of and an opportunity
to cure the default. The recognition agreement typically provides that if the
proprietary lease or occupancy agreement is terminated, the Cooperative will
recognize the lender's lien against proceeds from a sale of the shares and the
proprietary lease or occupancy agreement allocated to the dwelling, subject,
however, to the Cooperative's right to sums due under such proprietary lease or
occupancy agreement or which have become liens on the shares relating to the
proprietary lease or occupancy agreement. The total amount owed to the
Cooperative by the tenant-stockholder, which the lender generally cannot
restrict and does not monitor, could reduce the amount realized upon a sale of
the collateral below the outstanding principal balance of the Cooperative Loan
and accrued and unpaid interest thereon.

     Recognition agreements also generally provide that in the event the lender
succeeds to the tenant-shareholder's shares and proprietary lease or occupancy
agreement as the result of realizing upon its collateral for a Cooperative Loan,
the lender must obtain the approval or consent of the board of directors of the
Cooperative as required by the proprietary lease before transferring the
Cooperative shares and assigning the proprietary lease. Such approval or consent
is usually based on the prospective purchaser's income and net worth, among
other factors, and may significantly reduce the number of potential purchasers,
which could limit

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the ability of the lender to sell and realize upon the value of the collateral.
Generally, the lender is not limited in any rights it may have to dispossess the
tenant-stockholder.

     Because of the nature of Cooperative Loans, lenders do not require the
tenant-stockholder (i.e., the borrower) to obtain title insurance of any type.
Consequently, the existence of any prior liens or other imperfections of title
affecting the Cooperative's building or real estate also may adversely affect
the marketability of the shares allocated to the dwelling unit in the event of
foreclosure.

     A foreclosure on the Cooperative shares is accomplished by public sale in
accordance with the provisions of Article 9 of the Uniform Commercial Code (the
'UCC') and the security agreement relating to those shares. Article 9 of the UCC
requires that a sale be conducted in a 'commercially reasonable' manner. Whether
a sale has been conducted in a 'commercially reasonable' manner will depend on
the facts in each case. In determining commercial reasonableness, a court will
look to the notice given the debtor and the method, manner, time, place and
terms of the sale and the sale price. Generally, a sale conducted according to
the usual practice of creditors selling similar collateral in the same area will
be considered reasonably conducted.

     Article 9 of the UCC provides that the proceeds of the sale will be applied
first to pay the costs and expenses of the sale and then to satisfy the
indebtedness secured by the lender's security interest. The recognition
agreement, however, generally provides that the lender's right to reimbursement
is subject to the right of the Cooperative corporation to receive sums due under
the proprietary lease or occupancy agreement. If there are proceeds remaining,
the lender must account to the tenant-stockholder for the surplus. Conversely,
if a portion of the indebtedness remains unpaid, the tenant-stockholder is
generally responsible for the deficiency. See ' -- Anti-Deficiency Legislation
and Other Limitations on Lenders' below.

  Rights of Redemption

     In some states, after sale pursuant to a deed of trust, or a deed to secure
debt or foreclosure of a mortgage, the borrower and foreclosed junior lienors or
other parties are given a statutory period (generally ranging from six months to
two years) in which to redeem the property from the foreclosure sale. In some
states, redemption may occur only upon payment of the entire principal balance
of the loan, accrued interest and expenses of foreclosure. In other states,
redemption may be authorized 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. The rights of redemption
would defeat the title of any purchaser subsequent to foreclosure or sale under
a deed of trust or a deed to secure debt. 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.

  Anti-Deficiency Legislation and Other Limitations on Lenders

     Certain states have imposed statutory prohibitions which limit the remedies
of a beneficiary under a deed of trust, a mortgagee under a mortgage or a
grantee under a deed to secure debt. In some states (including California),
statutes limit the right of the beneficiary, mortgagee or grantee to obtain a
deficiency judgment against the borrower following foreclosure. A deficiency
judgment is a personal judgment against the former borrower equal in most cases
to the difference between the net amount realized upon the public sale of the
real property and the amount due to the lender. In the case of a Mortgage Loan
secured by a property owned by a trust where the Mortgage Note is executed on
behalf of the trust, a deficiency judgment against the trust following
foreclosure or sale under a deed of trust or deed to secure debt, even if
obtainable under applicable law, may be of little value to the beneficiary,
grantee or mortgagee if there are no trust assets against which such deficiency
judgment may be executed. In addition, a deficiency judgment against a borrower
who resides outside of the jurisdiction in which the property is located may be
difficult to obtain because, unless a court orders otherwise, service of process
must be effected by personal delivery. Some state statutes require the
beneficiary, grantee or mortgagee to exhaust the security afforded under a deed
of trust, deed to secure debt or mortgage by foreclosure in an attempt to
satisfy the full debt before bringing a personal action against the borrower. In
certain other states, the lender has the option of bringing a personal action
against the borrower on the debt without first exhausting such security;
however, in some of these states, the lender, following judgment on such
personal action, may be deemed to have elected a remedy and may be precluded
from exercising remedies with respect to the security. Consequently, the
practical effect of the election requirement, in those states permitting

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such election, is that lenders will usually proceed against the security first
rather than bringing a personal action against the borrower. Finally, in certain
other states, statutory provisions limit any deficiency judgment against the
borrower following a foreclosure to the excess of the outstanding debt over the
fair value of the property at the time of the public sale. The purpose of these
statutes is generally to prevent a beneficiary, grantee or mortgagee from
obtaining a large deficiency judgment against the borrower as a result of low or
no bids at the judicial sale.

     Generally, Article 9 of the UCC governs foreclosure on Cooperative Shares
and the related proprietary lease or occupancy agreement. Some courts have
interpreted Article 9 to prohibit or limit a deficiency award in certain
circumstances, including circumstances where the disposition of the collateral
(which, in the case of a Cooperative Loan, would be the shares of the
Cooperative and the related proprietary lease or occupancy agreement) was not
conducted in a commercially reasonable manner.

     In addition to laws limiting or prohibiting deficiency judgments, numerous
other federal and state statutory provisions, including the federal bankruptcy
laws and state laws affording relief to debtors, may interfere with or affect
the ability of the secured mortgage lender to realize upon its collateral and/or
enforce a deficiency judgment. For example, under the federal bankruptcy law,
all actions against the debtor, the debtor's property and any co-debtor are
automatically stayed upon the filing of a bankruptcy petition. Moreover, a court
having federal bankruptcy jurisdiction may permit a debtor through its Chapter
11 or Chapter 13 rehabilitative plan to cure a monetary default in respect of a
mortgage loan on such debtor's residence by paying arrearages within a
reasonable time period and reinstating the original mortgage loan payment
schedule, even though the lender accelerated the mortgage loan and final
judgment of foreclosure had been entered in state court (provided no sale of the
residence had yet occurred) prior to the filing of the debtor's petition. Some
courts with federal bankruptcy jurisdiction have approved plans, based on the
particular facts of the reorganization case, that effected the curing of a
mortgage loan default by paying arrearages over a number of years.

     Courts with federal bankruptcy jurisdiction have also indicated that the
terms of a mortgage loan secured by property which is not the principal
residence of the debtor may be modified. These courts have allowed modifications
that include reducing the amount of each monthly payment, changing the rate of
interest, altering the repayment schedule, forgiving all or a portion of the
debt and reducing the lender's security interest to the value of the residence,
thus leaving the lender a general unsecured creditor for the difference between
the value of the residence and the outstanding balance of the loan. Generally,
however, the terms of a mortgage loan secured only by a mortgage on real
property that is the debtor's principal residence may not be modified pursuant
to a plan confirmed pursuant to Chapter 13 except with respect to mortgage
payment arrearages, which may be cured within a reasonable time period. Courts
with federal bankruptcy jurisdiction similarly may be able to modify the terms
of a Cooperative Loan.

     Certain tax liens arising under the Code may, in certain circumstances,
have priority over the lien of a mortgage, deed to secure debt or deed of trust.
This may have the effect of delaying or interfering with the enforcement of
rights with respect to a defaulted Mortgage Loan.

     In addition, substantive requirements are imposed upon mortgage lenders in
connection with the origination and the servicing of mortgage loans by numerous
federal and some state consumer protection laws. These laws include the federal
Truth-in-Lending Act, Real Estate Settlement Procedures Act, Equal Credit
Opportunity Act, Fair Credit Billing Act, Fair Credit Reporting Act and related
statutes. These federal laws impose specific statutory liabilities upon lenders
who originate mortgage loans and who fail to comply with the provisions of the
law. In some cases, this liability may affect assignees of the mortgage loans.

     Certain of the Mortgage Loans may be subject to special rules, disclosure
requirements and other provisions that were added to the federal
Truth-in-Lending Act by the Homeownership and Equity Protection Act of 1994
(such Mortgage Loans, 'HIGH COST LOANS'), if such Mortgage Loans were originated
on or after October 1, 1995, are not mortgage loans made to finance the purchase
of the mortgaged property and have interest rates or origination costs in excess
of certain prescribed levels. Purchasers or assignees of any High Cost Loan,
including any Trust, could be liable for all claims and subject to all defenses
arising under such provisions that the borrower could assert against the
originator thereof. Remedies available to the borrower include monetary
penalties, as well as rescission rights if the appropriate disclosures were not
given as required.

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  Enforceability of Certain Provisions

     Unless the Prospectus Supplement indicates otherwise, the Mortgage Loans
generally contain due-on-sale clauses. These clauses permit the lender to
accelerate the maturity of the loan if the borrower sells, transfers or conveys
the property. The enforceability of these clauses has been the subject of
legislation or litigation in many states, and in some cases the enforceability
of these clauses has been limited or denied. However, the Garn-St Germain
Depository Institutions Act of 1982 (the 'GARN-ST GERMAIN ACT'), preempts state
constitutional, statutory and case law that prohibit the enforcement of
due-on-sale clauses and permits lenders to enforce these clauses in accordance
with their terms, subject to certain limited exceptions. The Garn-St Germain Act
does 'encourage' lenders to permit assumption of loans at the original rate of
interest or at some other rate less than the average of the original rate and
the market rate.

     The Garn-St Germain Act also sets forth nine specific instances in which a
mortgage lender covered by the Garn-St Germain Act may not exercise a
due-on-sale clause, notwithstanding the fact that a transfer of the property may
have occurred. These include intra-family transfers, certain transfers by
operation of law, leases of fewer than three years and the creation of a junior
encumbrance. Regulations promulgated under the Garn-St Germain Act also prohibit
the imposition of a prepayment penalty upon the acceleration of a loan pursuant
to a due-on-sale clause.

     The inability to enforce a due-on-sale clause may result in a mortgage loan
bearing an interest rate below the current market rate being assumed by a new
home buyer rather than being paid off, which may have an impact upon the average
life of the Mortgage Loans and the number of Mortgage Loans which may be
outstanding until maturity.

     Upon foreclosure, courts have imposed general equitable principles. These
equitable principles are generally designed to relieve the borrower from the
legal effect of its defaults under the loan documents. Examples of judicial
remedies that have been fashioned include judicial requirements that the lender
undertake affirmative and expensive actions to determine the causes for the
borrower's default and the likelihood that the borrower will be able to
reinstate the loan. In some cases, courts have required that lenders reinstate
loans or recast payment schedules in order to accommodate borrowers who are
suffering from temporary financial disability. In other cases, courts have
limited the right of the lender to foreclose if the default under the mortgage
instrument is not monetary, such as the borrower failing to adequately maintain
the property. Finally, some courts have been faced with the issue of whether or
not federal or state constitutional provisions reflecting due process concerns
for adequate notice require that borrowers under deeds of trust, deeds to secure
debt or mortgages receive notices in addition to the statutorily prescribed
minimum. For the most part, these cases have upheld the notice provisions as
being reasonable or have found that the sale by a trustee under a deed of trust,
or under a deed to secure a debt or a mortgagee having a power of sale, does not
involve sufficient state action to afford constitutional protections to the
borrower.

  Applicability of Usury Laws

     Title V of the Depository Institutions Deregulation and Monetary Control
Act of 1980 ('TITLE V'), provides that state usury limitations shall not apply
to certain types of residential first mortgage loans originated by certain
lenders after March 31, 1980. A similar federal statute was in effect with
respect to mortgage loans made during the first three months of 1980. The Office
of Thrift Supervision (the 'OTS') is authorized to issue rules and regulations
and to publish interpretations governing implementation of Title V. The statute
authorized any state to impose interest rate limits by adopting, before April 1,
1983, a law or constitutional provision which expressly rejects application of
the federal law. In addition, even where Title V is not so rejected, any state
is authorized by the law to adopt a provision limiting discount points or other
charges on mortgage loans covered by Title V. Certain states have taken action
to reimpose interest rate limits or to limit discount points or other charges.

     Unless otherwise set forth in the related Prospectus Supplement, each
Mortgage Collateral Seller, or another specified party, will have represented
that each Mortgage Loan was originated in compliance with then applicable state
laws, including usury laws, in all material respects. However, the Mortgage
Rates on the Mortgage Loans will be subject to applicable usury laws as in
effect from time to time.

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  Alternative Mortgage Instruments

     Alternative mortgage instruments, including adjustable rate mortgage loans
and early ownership mortgage loans, originated by non-federally chartered
lenders, have historically been subjected to a variety of restrictions. Such
restrictions differed from state to state, resulting in difficulties in
determining whether a particular alternative mortgage instrument originated by a
state-chartered lender was in compliance with applicable law. These difficulties
were alleviated substantially as a result of the enactment of Title VIII of the
Garn-St Germain Act ('TITLE VIII'). Title VIII provides that, notwithstanding
any state law to the contrary, (i) state-chartered banks may originate
alternative mortgage instruments in accordance with regulations promulgated by
the Comptroller of the Currency with respect to the origination of alternative
mortgage instruments by national banks, (ii) state-chartered credit unions may
originate alternative mortgage instruments in accordance with regulations
promulgated by the National Credit Union Administration with respect to
origination of alternative mortgage instruments by federal credit unions and
(iii) all other non-federally chartered housing creditors, including
state-chartered savings and loan associations, state-chartered savings banks and
mutual savings banks and mortgage banking companies, may originate alternative
mortgage instruments in accordance with the regulations promulgated by the
Federal Home Loan Bank Board, predecessor to the OTS, with respect to
origination of alternative mortgage instruments by federal savings and loan
associations. Title VIII also provides that any state may reject applicability
of the provisions of Title VIII by adopting, prior to October 15, 1985, a law or
constitutional provision expressly rejecting the applicability of such
provisions. Certain states have taken such action.

THE CONTRACTS

  General

     A Contract evidences both (a) the obligation of the Mortgagor to repay the
loan evidenced thereby and (b) the grant of a security interest in the
Manufactured Home to secure repayment of such loan. Certain aspects of both
features of the Contracts are described below.

  Security Interests in Manufactured Homes

     The law governing perfection of a security interest in a Manufactured Home
varies from state to state. Security interests in manufactured homes may be
perfected either by notation of the secured party's lien on the certificate of
title or by delivery of the required documents and payments of a fee to the
state motor vehicle authority, depending on state law. In some non-title states,
perfection pursuant to the provisions of the UCC is required. The lender, the
Servicer or the Master Servicer may effect such notation or delivery of the
required documents and fees, and obtain possession of the certificate of title,
as appropriate under the laws of the state in which any Manufactured Home
securing a Contract is registered. In the event the Master Servicer, the
Servicer or the lender fails to effect such notation or delivery, or files the
security interest under the wrong law (for example, under a motor vehicle title
statute rather than under the UCC, in a few states), the Certificateholders may
not have a first priority security interest in the Manufactured Home securing a
Contract. As manufactured homes have become larger and often have been attached
to their sites without any apparent intention to move them, courts in many
states have held that manufactured homes, under certain circumstances, may
become subject to real estate title and recording laws. As a result, a security
interest in a manufactured home could be rendered subordinate to the interests
of other parties claiming an interest in the home under applicable state real
estate law. In order to perfect a security interest in a manufactured home under
real estate laws, the holder of the security interest must record a mortgage,
deed of trust or deed to secure debt, as applicable, under the real estate laws
of the state where the manufactured home is located. These filings must be made
in the real estate records office of the county where the manufactured home is
located. Unless otherwise provided in the related Prospectus Supplement,
substantially all of the Contracts will contain provisions prohibiting the
Mortgagor from permanently attaching the Manufactured Home to its site. So long
as the Mortgagor does not violate this agreement and a court does not hold that
the Manufactured Home is real property, a security interest in the Manufactured
Home will be governed by the certificate of title laws or the UCC, and the
notation of the security interest on the certificate of title or the filing of a
UCC financing statement will be effective to maintain the priority of the
seller's security interest in the Manufactured Home. If, however, a Manufactured
Home is permanently attached to its site or if a court determines that a
Manufactured Home is real property, other parties

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could obtain an interest in the Manufactured Home which is prior to the security
interest originally retained by the Mortgage Collateral Seller and transferred
to the Depositor. In certain cases, the Master Servicer or the Servicer, as
applicable, may be required to perfect a security interest in the Manufactured
Home under applicable real estate laws. If such real estate recordings are not
required and if any of the foregoing events were to occur, the only recourse of
the Certificateholders would be against the Mortgage Collateral Seller pursuant
to its repurchase obligation for breach of representations or warranties.

     The Depositor will assign its security interests in the Manufactured Homes
to the Trustee on behalf of the Certificateholders. See 'Description of the
Certificates -- Assignment of Contracts.' Unless otherwise specified in the
related Prospectus Supplement, if a Manufactured Home is governed by the
applicable motor vehicle laws of the relevant state neither the Depositor nor
the Trustee will amend the certificates of title to identify the Trustee as the
new secured party. Accordingly, the Depositor or such other entity as may be
specified in the Prospectus Supplement will continue to be named as the secured
party on the certificates of title relating to the Manufactured Homes. However,
there exists a risk that, in the absence of an amendment to the certificate of
title, such assignment of the security interest may not be held effective
against subsequent purchasers of a Manufactured Home or subsequent lenders who
take a security interest in the Manufactured Home or creditors of the assignor.

     If the owner of a Manufactured Home moves it to a state other than the
state in which such Manufactured Home initially is registered and if steps are
not taken to re-perfect the Trustee's security interest in such state, the
security interest in the Manufactured Home will cease to be perfected. While in
many circumstances the Trustee would have the opportunity to re-perfect its
security interest in the Manufactured Home in the state of relocation, there can
be no assurance that the Trustee will be able to do so.

     When a Mortgagor under a Contract sells a Manufactured Home, the Trustee,
or the Servicer or the Master Servicer on behalf of the Trustee, must surrender
possession of the certificate of title or will receive notice as a result of its
lien noted thereon and accordingly will have an opportunity to require
satisfaction of the related lien before release of the lien.

     Under the laws of most states, liens for repairs performed on a
Manufactured Home take priority over a perfected security interest. The
applicable Mortgage Collateral Seller generally will represent that it has no
knowledge of any such liens with respect to any Manufactured Home securing
payment on any Contract. However, such liens could arise at any time during the
term of a Contract. No notice will be given to the Trustee or Certificateholders
in the event such a lien arises and such lien would not give rise to a
repurchase obligation on the part of the party specified in the Pooling and
Servicing Agreement.

     To the extent that Manufactured Homes are not treated as real property
under applicable state law, contracts generally are 'chattel paper' as defined
in the UCC in effect in the states in which the Manufactured Homes initially
were registered. Pursuant to the UCC, the sale of chattel paper is treated in a
manner similar to perfection of a security interest in chattel paper. Under the
Pooling and Servicing Agreement, the Master Servicer or the Depositor, as the
case may be, will transfer physical possession of the Contracts to the Trustee
or its Custodian. In addition, the Master Servicer will make an appropriate
filing of a UCC-1 financing statement in the appropriate states to give notice
of the Trustee's ownership of the Contracts. Unless otherwise specified in the
related Prospectus Supplement, the Contracts will not be stamped or marked
otherwise to reflect their assignment from the Depositor to the Trustee.
Therefore, if a subsequent purchaser were able to take physical possession of
the Contracts without notice of such assignment, the Trustee's interest in the
Contracts could be defeated. To the extent that Manufactured Homes are treated
as real property under applicable state law, Contracts will be treated in a
manner similar to that described above with regard to Mortgage Loans. See
' -- The Mortgage Loans' above.

  Enforcement of Security Interests in Manufactured Homes

     The Servicer or the Master Servicer on behalf of the Trustee, to the extent
required by the related Pooling and Servicing Agreement, may take action to
enforce the Trustee's security interest with respect to Contracts in default by
repossession and sale of the Manufactured Homes securing such defaulted
Contracts. So long as the Manufactured Home has not become subject to real
estate law, a creditor generally can repossess a Manufactured Home securing a
Contract by voluntary surrender, by 'self-help' repossession that is 'peaceful'
or, in the absence of voluntary surrender and the ability to repossess without
breach of the peace, by judicial

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process. The UCC and consumer protection laws in most states place restrictions
on repossession sales, including requiring prior notice to the debtor and
commercial reasonableness in effecting such a sale. The debtor may also have a
right to redeem the Manufactured Home at or before resale.

     Certain statutory provisions, including federal and state bankruptcy and
insolvency laws and general equitable principles, may limit or delay the ability
of a lender to repossess and resell collateral or enforce a deficiency judgment.
For a discussion of deficiency judgments, see ' -- The Mortgage
Loans -- Anti-Deficiency Legislation and Other Limitations on Lenders' above.

  Consumer Protection Laws

     If the transferor of a consumer credit contract is also the seller of goods
that give rise to the transaction (and, in certain cases, related lenders and
assignees), the 'HOLDER-IN-DUE-COURSE' rule of the Federal Trade Commission is
intended to defeat the ability of such transferor to transfer such contract free
of notice of claims by the debtor thereunder. The effect of this rule is to
subject the assignee of such a contract to all claims and defenses that the
debtor could assert against the seller of goods. Liability under this rule is
limited to amounts paid under a Contract; however, the Mortgagor also may be
able to assert the rule to set off remaining amounts due as a defense against a
claim brought against such Mortgagor. Numerous other federal and state consumer
protection laws impose requirements applicable to the origination and lending
pursuant to the Contracts, including the Truth in Lending Act, the Federal Trade
Commission Act, the Fair Credit Billing Act, the Fair Credit Reporting Act, the
Equal Credit Opportunity Act, the Fair Debt Collection Practices Act and the
Uniform Consumer Credit Code. In the case of some of these laws, the failure to
comply with their provisions may affect the enforceability of the related
Contract.

  'Due-on-Sale' Clauses

     The Contracts, in general, prohibit the sale or transfer of the related
Manufactured Homes without the consent of the Depositor, the Master Servicer or
the Servicer and permit the acceleration of the maturity of the Contracts by the
Depositor, the Master Servicer or the Servicer upon any such sale or transfer
that is not consented to. Unless otherwise specified in the related Prospectus
Supplement, the Depositor, the Master Servicer or the Servicer generally will
permit most transfers of Manufactured Homes and not accelerate the maturity of
the related Contracts. In certain cases, the transfer may be made by a
delinquent Mortgagor in order to avoid a repossession proceeding with respect to
a Manufactured Home.

     In the case of a transfer of a Manufactured Home after which the Depositor
desires to accelerate the maturity of the related Contract, the Depositor's
ability to do so will depend on the enforceability under state law of the
'due-on-sale' clause. The Garn-St Germain Act preempts, subject to certain
exceptions and conditions, state laws prohibiting enforcement of 'due-on-sale'
clauses applicable to the Manufactured Homes. In some states the Depositor or
the Master Servicer may be prohibited from enforcing a 'due-on-sale' clause in
respect of certain Manufactured Homes.

  Applicability of Usury Laws

     Title V provides that, subject to certain conditions, state usury
limitations shall not apply to any loan that is secured by a first lien on
certain kinds of manufactured housing. For a discussion of Title V, see ' -- The
Mortgage Loans -- Applicability of Usury Laws' above. Unless otherwise specified
in the related Pooling and Servicing Agreement, each Mortgage Collateral Seller,
or another specified party, will represent that all of the Contracts comply with
applicable usury laws.

ENVIRONMENTAL LEGISLATION

     Real property pledged as security to a lender may be subject to unforeseen
environmental risks. Most environmental statutes create obligations for any
party that can be classified as the 'owner' or 'operator' of a 'facility'
(referring to both operating facilities and to real property). Under the laws of
some states and under the federal Comprehensive Environmental Response,
Compensation and Liability Act of 1980 ('CERCLA'), a lender may be liable, as an
'owner' or 'operator,' for costs arising out of releases or threatened releases
of hazardous substances that require remedy at a mortgaged property, if agents
or employees of the lender have

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become sufficiently involved in the operations of the borrower or, subsequent to
a foreclosure, in the management of the property. Such liability may arise
regardless of whether the environmental damage or threat was caused by a prior
owner.

     Under federal and certain state laws, contamination of a property may give
rise to a lien on the property to assure the payment of costs of clean-up. Under
federal law and in several states, such a lien has priority over the lien of an
existing mortgage against such property. If a lender is or becomes directly
liable following a foreclosure, it may be precluded from bringing an action for
contribution against the owner or operator who created the environmental hazard.
Such clean-up costs may be substantial. It is possible that such costs could
become a liability of the related Trust and occasion a loss to
Certificateholders in certain circumstances described above if such remedial
costs were incurred.

     The Asset Conservation, Lender Liability and Deposit Insurance Act of 1996
(the 'CONSERVATION ACT') amended, among other things, the provisions of CERCLA
with respect to lender liability and the secured creditor exemption. The
Conservation 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 mortgaged property. The
Conservation 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 mortgagor's environmental
compliance and hazardous substance handling and disposal practices, or assumes
day-to-day management of substantially all of the operational functions of the
mortgaged property. The Conservation 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.

     Traditionally, many residential mortgage lenders have not taken steps to
evaluate whether contaminants are present with respect to any mortgaged property
prior to origination of the mortgage loan or prior to foreclosure or accepting a
deed-in-lieu of foreclosure. Neither the Depositor nor any Master Servicer will
be required by any agreement to undertake any such evaluations prior to
foreclosure or accepting a deed-in-lieu of foreclosure. The Depositor does not
make any representations or warranties or assume any liability with respect to
the absence or effect of contaminants on any Mortgaged Property or any casualty
resulting from the presence or effect of contaminants. However, the Master
Servicer will not be obligated to foreclose on any Mortgaged Property or accept
a deed-in-lieu of foreclosure if it knows or reasonably believes that there are
material contaminated conditions on such property. A failure so to foreclosure
may reduce the amounts available to Certificateholders of the related series.

     Except as otherwise specified in the applicable Prospectus Supplement, at
the time the Mortgage Loans or Contracts were originated, no environmental
assessment or a very limited environment assessment of the Mortgaged Properties
will have been conducted.

SOLDIERS' AND SAILORS' CIVIL RELIEF ACT OF 1940

     Under the terms of the Soldiers' and Sailors' Civil Relief Act of 1940, as
amended (the 'RELIEF ACT'), a borrower who enters military service after the
origination of such borrower's mortgage loan or contract (including a borrower
who was in reserve status and is called to active duty after origination of the
mortgage loan or contract), may not be charged interest (including fees and
charges) above an annual rate of 6% during the period of such borrower's active
duty status, unless a court orders otherwise upon application of the lender. The
Relief Act applies to borrowers who are members of the Air Force, Army, Marines,
Navy, National Guard, Reserves or Coast Guard, and officers of the U.S. Public
Health Service assigned to duty with the military. Because the Relief Act
applies to borrowers who enter military service (including reservists who are
called to active duty) after origination of the related mortgage loan or
contract, no information can be provided as to the number of Mortgage Loans or
Contracts that may be affected by the Relief Act. With respect to Mortgage Loans
or Contracts included in a Trust, application of the Relief Act would adversely
affect, for an indeterminate period of time, the ability of the Servicer or the
Master Servicer, as applicable, to collect full amounts of interest on such
Mortgage Collateral. Any shortfall in interest collections resulting from the
application of the Relief Act or similar legislation or regulations, which would
not be recoverable from the related Mortgage Loans or

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Contracts, would result in a reduction of the amounts distributable to the
holders of the related Certificates, and would not be covered by Advances or any
form of credit enhancement provided in connection with the related series of
Certificates. In addition, the Relief Act imposes limitations that would impair
the ability of the Servicer or the Master Servicer, as applicable, to foreclose
on an affected Mortgage Loan or Contract during the Mortgagor's period of active
duty status, and, under certain circumstances, during an additional three month
period thereafter. Thus, in the event that the Relief Act or similar legislation
or regulations applies to any Mortgage Loan or Contract which goes into default,
there may be delays in payment and losses on the related Certificates in
connection therewith. Any other interest shortfalls, deferrals or forgiveness of
payments on the Mortgage Loans or Contracts resulting from similar legislation
or regulations may result in delays in payments or losses to Certificateholders
of the related series.

DEFAULT INTEREST AND LIMITATIONS ON PREPAYMENTS

     Notes and mortgages may contain provisions that obligate the borrower to
pay a late charge or additional interest if payments are not timely made, and in
some circumstances, may prohibit prepayments for a specified period and/or
condition prepayments upon the borrower's payment of prepayment fees or yield
maintenance penalties. In certain states, there are or may be specific
limitations upon the late charges which a lender may collect from a borrower for
delinquent payments. Certain states also limit the amounts that a lender may
collect from a borrower as an additional charge if the loan is prepaid. In
addition, the enforceability of provisions that provide for prepayment fees or
penalties upon an involuntary prepayment is unclear under the laws of many
states. Most conventional single-family mortgage loans may be prepaid in full or
in part without penalty. The regulations of the Federal Home Loan Bank Board, as
succeeded by the OTS, prohibit the imposition of a prepayment penalty or
equivalent fee for or in connection with the acceleration of a loan by exercise
of a due-on-sale clause. A mortgagee to whom a prepayment in full has been
tendered may be compelled to give either a release of the mortgage or an
instrument assigning the existing mortgage. The absence of a restraint on
prepayment, particularly with respect to Mortgage Loans having higher mortgage
rates, may increase the likelihood of refinancing or other early retirements of
the Mortgage Loans.

FORFEITURES IN DRUG AND RICO PROCEEDINGS

     Federal law provides that property owned by persons convicted of
drug-related crimes or of criminal violations of the Racketeer Influenced and
Corrupt Organizations ('RICO') statute can be seized by the government if the
property was used in, or purchased with the proceeds of, such crimes. Under
procedures contained in the Comprehensive Crime Control Act of 1984 (the 'CRIME
CONTROL ACT'), the government may seize the property even before conviction. The
government must publish notice of the forfeiture proceeding and may give notice
to all parties 'known to have an alleged interest in the property,' including
the holders of mortgage loans.

     A lender may avoid forfeiture of its interest in the property if it
establishes that: (i) its mortgage was executed and recorded before commission
of the crime upon which the forfeiture is based, or (ii) the lender was, at the
time of execution of the mortgage, 'reasonably without cause to believe' that
the property was used in, or purchased with the proceeds of, illegal drug or
RICO activities.

NEGATIVE AMORTIZATION LOANS

     A recent case held that state restrictions on the compounding of interest
are not preempted by the provisions of the Depository Institutions Deregulation
and Monetary Control Act of 1980 ('DIDMC') and as a result, a mortgage loan that
provided for negative amortization violated New Hampshire's requirement that
first mortgage loans provide for computation of interest on a simple interest
basis. The court did not address the applicability of the Alternative Mortgage
Transaction Parity Act of 1982, which authorizes a lender to make residential
mortgage loans that provide for negative amortization. As a result, the
enforceability of compound interest on mortgage loans that provide for negative
amortization is unclear. The case, which was decided by the First Circuit Court
of Appeals, is binding authority only on Federal District Courts in Maine, New
Hampshire, Massachusetts, Rhode Island and Puerto Rico.

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                    CERTAIN FEDERAL INCOME TAX CONSEQUENCES

GENERAL

     The following is a general discussion of certain anticipated material
federal income tax consequences of the purchase, ownership and disposition of
the Certificates offered hereunder. This discussion has been prepared with the
advice of Orrick, Herrington & Sutcliffe LLP, Thacher Proffitt & Wood and
Stroock & Stroock & Lavan LLP, counsel to the Depositor. This discussion is
directed solely to Certificateholders that hold the Certificates as capital
assets within the meaning of Section 1221 of the Code and does not purport to
discuss all federal income tax consequences that may be applicable to particular
categories of investors, some of which (such as banks, insurance companies and
foreign investors) may be subject to special rules. In addition, the authorities
on which this discussion, and the opinion referred to below, are based are
subject to change or differing interpretations, which could apply retroactively.
Taxpayers and preparers of tax returns (including those filed by any REMIC or
other issuer) should be aware that under applicable Treasury regulations a
provider of advice on specific issues of law is not considered an income tax
return preparer unless the advice (i) is given with respect to events that have
occurred at the time the advice is rendered and is not given with respect to the
consequences of contemplated actions, and (ii) is directly relevant to the
determination of an entry on a tax return. Accordingly, taxpayers should consult
their tax advisors and tax return preparers regarding the preparation of any
item on a tax return, even where the anticipated tax treatment has been
discussed herein or in a Prospectus Supplement. In addition to the federal
income tax consequences described herein, potential investors should consider
the state and local tax consequences, if any, of the purchase, ownership and
disposition of the Certificates. See 'State and Other Tax Consequences.'
Certificateholders are advised to consult their tax advisors concerning the
federal, state, local or other tax consequences to them of the purchase,
ownership and disposition of the Certificates offered hereunder.

     The following discussion addresses certificates (the 'REMIC CERTIFICATES')
representing interests in a Trust, or a portion thereof, which the Master
Servicer or Certificate Administrator, as applicable, will covenant to elect to
have treated as a REMIC under Sections 860A through 860G (the 'REMIC
PROVISIONS') of the Code. The Prospectus Supplement for each series of
Certificates will indicate whether a REMIC election (or elections) will be made
for the related Trust and, if such an election is to be made, will identify all
'regular interests' and 'residual interests' in the REMIC. If a REMIC election
will not be made for a Trust, the federal income consequences of the purchase,
ownership and disposition of the related Certificates will be set forth in the
related Prospectus Supplement. For purposes of this tax discussion, references
to a 'Certificateholder' or a 'holder' are to the beneficial owner of a
Certificate.

     The following discussion is based in part upon the rules governing original
issue discount that are set forth in Sections 1271 through 1273 and Section 1275
of the Code and in the Treasury regulations issued thereunder (the 'OID
REGULATIONS'), and in part upon the REMIC Provisions and the Treasury
regulations issued thereunder (the 'REMIC REGULATIONS'). The OID Regulations,
which are effective with respect to debt instruments issued on or after April 4,
1994, do not adequately address certain issues relevant to, and in some
instances provide that they are not applicable to, securities such as the
Certificates.

REMICS

  Classification of REMICs

     Upon the issuance of each series of REMIC Certificates, Orrick, Herrington
& Sutcliffe LLP, Thacher Proffitt & Wood or Stroock & Stroock & Lavan LLP,
counsel to the Depositor, will deliver their opinion generally to the effect
that, assuming compliance with all provisions of the related Pooling and
Servicing Agreement or Trust Agreement, the related Trust (or each applicable
portion thereof) will qualify as a REMIC and the REMIC Certificates offered with
respect thereto will be considered to evidence ownership of 'regular interests'
('REMIC REGULAR CERTIFICATES') or 'residual interests' ('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 ongoing requirements of the Code for such status during any taxable
year, the Code provides that the entity will not be treated as a REMIC for such
year and thereafter. In that event, such entity may be taxable as a separate
corporation under Treasury regulations, and the related REMIC Certificates may
not be accorded the status or

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given the tax treatment described below. Although the Code authorizes the
Treasury Department to issue regulations providing relief in the event of an
inadvertent termination of REMIC status, no such regulations have been issued.
Any such relief, moreover, may be accompanied by sanctions, such as the
imposition of a corporate tax on all or a portion of the Trust's income for the
period in which the requirements for such status are not satisfied. The Pooling
and Servicing Agreement or Trust Agreement, with respect 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 terminated.

  Characterization of Investments in REMIC Certificates

     In general, the REMIC Certificates will be 'real estate assets' within the
meaning of Section 856(c)(4)(A) of the Code and assets described in Section
7701(a)(19)(C) of the Code in the same proportion that the assets of the REMIC
underlying such Certificates would be so treated. Moreover, if 95% or more of
the assets of the REMIC qualify for any of the foregoing treatments at all times
during a calendar year, the REMIC Certificates will qualify for the
corresponding status in their entirety for that calendar year. Interest
(including original issue discount) on the REMIC Regular Certificates and income
allocated to the class of REMIC Residual Certificates will be interest described
in Section 856(c)(3)(B) of the Code to the extent that such Certificates are
treated as 'real estate assets' within the meaning of Section 856(c)(4)(A) of
the Code. In addition, the REMIC Regular Certificates will be 'qualified
mortgages' within the meaning of Section 860G(a)(3)(C) of the Code if
transferred to another REMIC on its startup day in exchange for regular or
residual interests therein. The determination as to the percentage of the
REMIC's assets that constitute assets described in the foregoing sections of the
Code will be made with respect to each calendar quarter based on the average
adjusted basis of each category of the assets held by the REMIC during such
calendar quarter. The Master Servicer or the Certificate Administrator, as
applicable, will report those determinations to Certificateholders in the manner
and at the times required by applicable Treasury regulations.

     The assets of the REMIC will include, in addition to Mortgage Collateral,
payments on Mortgage Collateral held pending distribution on the REMIC
Certificates and property acquired by foreclosure held pending sale, and may
include amounts in reserve accounts. It is unclear whether property acquired by
foreclosure held pending sale and amounts in reserve accounts would be
considered to be part of the Mortgage Collateral, or whether such assets (to the
extent not invested in assets described in the foregoing sections) otherwise
would receive the same treatment as the Mortgage Collateral for purposes of all
of the foregoing sections. In addition, in some instances Mortgage Collateral
(including Additional Collateral Loans) may not be treated entirely as assets
described in the foregoing sections. If the assets of a REMIC include Additional
Collateral Loans, the non-real property collateral, while itself not an asset of
the REMIC, could cause the Mortgage Collateral not to qualify for one or more of
such characterizations. If so, the related Prospectus Supplement will describe
the Mortgage Collateral (including Additional Collateral Loans) that may not be
so treated. The REMIC Regulations do provide, however, that payments on Mortgage
Collateral held pending distribution are considered part of the Mortgage
Collateral for purposes of Section 856(c)(4)(A) of the Code.

  Tiered REMIC Structures

     For certain series of REMIC Certificates, two or more separate elections
may be made to treat designated portions of the related Trust as REMICs ('TIERED
REMICS') for federal income tax purposes. Upon the issuance of any such series
of REMIC Certificates, Orrick, Herrington & Sutcliffe LLP, Thacher Proffitt &
Wood or Stroock & Stroock & Lavan LLP, counsel to the Depositor, will deliver
their opinion generally to the effect that, assuming compliance with all
provisions of the related Pooling and Servicing Agreement or Trust Agreement,
the Tiered REMICs will each qualify as a REMIC and the REMIC Certificates issued
by the Tiered REMICs, respectively, 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.

     Solely for purposes of determining whether the REMIC Certificates will be
'real estate assets' within the meaning of Section 856(c)(4)(A) of the Code, and
'loans secured by an interest in real property' under Section 7701(a)(19)(C) of
the Code, and whether the income on such Certificates is interest described in
Section 856(c)(3)(B) of the Code, the Tiered REMICs will be treated as one
REMIC.

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  Taxation of Owners of REMIC Regular Certificates

     General. Except as otherwise stated in this discussion, REMIC Regular
Certificates will be treated for federal income tax purposes as debt instruments
issued by the REMIC and not as ownership interests in the REMIC or its assets.
Moreover, holders of REMIC Regular Certificates that otherwise report income
under a cash method of accounting will be required to report income with respect
to REMIC Regular Certificates under an accrual method.

     Original Issue Discount. Certain REMIC Regular Certificates may be issued
with 'original issue discount' within the meaning of Section 1273(a) of the
Code. Any holders of REMIC Regular Certificates issued with original issue
discount generally will be required to include original issue discount in income
as it accrues, in accordance with the method described below, in advance of the
receipt of the cash attributable to such income. In addition, Section 1272(a)(6)
of the Code provides special rules applicable to REMIC Regular Certificates and
certain other debt instruments issued with original issue discount. Regulations
have not been issued under that section.

     The Code requires that a prepayment assumption be used with respect to
Mortgage Collateral held by a REMIC in computing the accrual of original issue
discount on REMIC Regular Certificates issued by that REMIC, and that
adjustments be made in the amount and rate of accrual of such discount to
reflect differences between the actual prepayment rate and the prepayment
assumption. The prepayment assumption is to be determined in a manner prescribed
in Treasury regulations; as noted above, those regulations have not been issued.
The Conference Committee Report (the 'COMMITTEE REPORT') accompanying the Tax
Reform Act of 1986 indicates that the regulations will provide that the
prepayment assumption used with respect to a REMIC Regular Certificate must be
the same as that used in pricing the initial offering of such REMIC Regular
Certificate. The Prepayment Assumption used by the Master Servicer or the
Certificate Administrator, as applicable, in reporting original issue discount
for each series of REMIC Regular Certificates will be consistent with this
standard and will be disclosed in the related Prospectus Supplement. However,
neither the Depositor, the Master Servicer nor the Certificate Administrator
will make any representation that the Mortgage Collateral will in fact prepay at
a rate conforming to the Prepayment Assumption or at any other rate.

     The original issue discount, if any, on a REMIC Regular Certificate will be
the excess of its stated redemption price at maturity over its issue price. The
issue price of a particular class of REMIC Regular Certificates will be the
first cash price at which a substantial amount of REMIC Regular Certificates of
that class is sold (excluding sales to bond houses, brokers and underwriters).

     If less than a substantial amount of a particular class of REMIC Regular
Certificates is sold for cash on or prior to the date of their initial issuance
(the 'CLOSING DATE'), the issue price for such class will be treated as the fair
market value of such class on the Closing Date. Under the OID Regulations, the
stated redemption price of a REMIC Regular Certificate is equal to the total of
all payments to be made on such Certificate other than 'qualified stated
interest.' 'Qualified stated interest' includes interest that is unconditionally
payable at least annually at a single fixed rate, or in the case of a variable
rate debt instrument, 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 generally does not operate in a manner that accelerates or defers
interest payments on such REMIC Regular Certificate.

     In the case of REMIC Regular Certificates bearing adjustable interest
rates, the determination of the total amount of original issue discount and the
timing of the inclusion thereof will vary according to the characteristics of
such REMIC Regular Certificates. If the original issue discount rules apply to
such Certificates, the related Prospectus Supplement will describe the manner in
which such rules will be applied by the Master Servicer or the Certificate
Administrator, as applicable, with respect to those Certificates in preparing
information returns to the Certificateholders and the Internal Revenue Service
('IRS').

     Certain classes of the REMIC Regular Certificates may provide for the first
interest payment with respect to such Certificates to be made more than one
month after the date of issuance, a period which is longer than the subsequent
monthly intervals between interest payments. Assuming the 'accrual period' (as
defined herein) for original issue discount is each monthly period that ends on
a Distribution Date, in some cases, as a consequence of this 'long first accrual
period,' some or all interest payments may be required to be included in the
stated redemption price of the REMIC Regular Certificate and accounted for as
original issue discount. Because interest on REMIC Regular Certificates must in
any event be accounted for under an accrual method, applying

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this analysis would result in only a slight difference in the timing of the
inclusion in income of the yield on the REMIC Regular Certificates.

     In addition, if the accrued interest to be paid on the first Distribution
Date is computed with respect to a period that begins prior to the Closing Date,
a portion of the purchase price paid for a REMIC Regular Certificate will
reflect such accrued interest. In such cases, information returns to the
Certificateholders and the IRS will be based on the position that the portion of
the purchase price paid for the interest accrued with respect to periods prior
to the Closing Date is treated as part of the overall cost of such REMIC Regular
Certificate (and not as a separate asset the cost of which is recovered entirely
out of interest received on the next Distribution Date) and that portion of the
interest paid on the first Distribution Date in excess of interest accrued for a
number of days corresponding to the number of days from the Closing Date to the
first Distribution Date should be included in the stated redemption price of
such REMIC Regular Certificate. However, the OID Regulations state that all or
some portion of such accrued interest may be treated as a separate asset the
cost of which is recovered entirely out of interest paid on the first
Distribution Date. It is unclear how an election to do so would be made under
the OID Regulations and whether such an election could be made unilaterally by a
Certificateholder.

     Notwithstanding the general definition of original issue discount, original
issue discount on a REMIC Regular Certificate will be considered to be de
minimis if it is less than 0.25% of the stated redemption price of the REMIC
Regular Certificate multiplied by its weighted average maturity. For this
purpose, the weighted average maturity of the REMIC Regular Certificate is
computed as the sum of the amounts determined, as to each payment included in
the stated redemption price of such REMIC Regular Certificate, by multiplying
(i) the number of complete years (rounding down for partial years) from the
issue date until such payment is expected to be made (presumably taking into
account the Prepayment Assumption) by (ii) a fraction, the numerator of which is
the amount of the payment, and the denominator of which is the stated redemption
price at maturity of such REMIC Regular Certificate. Under the OID Regulations,
original issue discount of only a de minimis amount (other than de minimis
original issue discount attributable to a so-called 'teaser' interest rate or an
initial interest holiday) will be included in income as each payment of stated
principal is made, based on the product of the total amount of such de minimis
original issue discount and a fraction, the numerator of which is the amount of
such principal payment and the denominator of which is the outstanding stated
principal amount of the REMIC Regular Certificate. The OID Regulations also
permit a Certificateholder to elect to accrue de minimis original issue discount
into income currently based on a constant yield method. See ' -- Market
Discount' for a description of such election under the OID Regulations.

     If original issue discount on a REMIC Regular Certificate is in excess of a
de minimis amount, the holder of such Certificate must include in ordinary gross
income the sum of the 'daily portions' of original issue discount for each day
during its taxable year on which it held such REMIC Regular Certificate,
including the purchase date but excluding the disposition date. In the case of
an original holder of a REMIC Regular Certificate, the daily portions of
original issue discount will be determined as follows.

     As to each 'accrual period,' that is, unless otherwise stated in the
related Prospectus Supplement, each period that ends on a date that corresponds
to a Distribution Date and begins on the first day following the immediately
preceding accrual period (or in the case of the first such period, begins on the
Closing Date), a calculation will be made of the portion of the original issue
discount that accrued during such accrual period. The portion of original issue
discount that accrues in any accrual period will equal the excess, if any, of
(i) the sum of (A) the present value, as of the end of the accrual period, of
all of the distributions remaining to be made on the REMIC Regular Certificate,
if any, in future periods and (B) the distributions made on such REMIC Regular
Certificate during the accrual period of amounts included in the stated
redemption price, over (ii) the adjusted issue price of such REMIC Regular
Certificate at the beginning of the accrual period. The present value of the
remaining distributions referred to in the preceding sentence will be calculated
(1) assuming that distributions on the REMIC Regular Certificate will be
received in future periods based on the Mortgage Collateral being prepaid at a
rate equal to the Prepayment Assumption and (2) using a discount rate equal to
the original yield to maturity of the Certificate. For these purposes, the
original yield to maturity of the Certificate will be calculated based on its
issue price and assuming that distributions on the Certificate will be made in
all accrual periods based on the Mortgage Collateral being prepaid at a rate
equal to the Prepayment Assumption. The adjusted issue price of a REMIC Regular
Certificate at the beginning of any accrual period will equal the issue price of
such Certificate, increased by the aggregate amount of original issue discount
that accrued with

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respect to such Certificate in prior accrual periods, and reduced by the amount
of any distributions made on such REMIC Regular Certificate in prior accrual
periods of amounts included in its stated redemption price. The original issue
discount accruing during any accrual period, computed as described above, will
be allocated ratably to each day during the accrual period to determine the
daily portion of original issue discount for such day.

     The OID Regulations suggest that original issue discount with respect to
securities that represent multiple uncertificated REMIC regular interests, in
which ownership interests will be issued simultaneously to the same buyer and
which may be required under the related Pooling and Servicing Agreement to be
transferred together, should be computed on an aggregate method. In the absence
of further guidance from the IRS, original issue of multiple uncertificated
REMIC regular interests will be reported to the IRS and the Certificateholders
on an aggregate method based on a single overall constant yield and the
prepayment assumption stated in the related Prospectus Supplement, treating all
such uncertificated regular interests as a single debt instrument as set forth
in the OID Regulations, so long as the Pooling and Servicing Agreement requires
that such uncertificated regular interests be transferred together.

     A subsequent purchaser of a REMIC Regular Certificate that purchases such
Certificate at a cost (excluding any portion of such cost attributable to
accrued qualified stated interest) less than its remaining stated redemption
price will also be required to include in gross income the daily portions of any
original issue discount with respect to such Certificate. However, each such
daily portion will be reduced, if such cost is in excess of its 'adjusted issue
price,' in proportion to the ratio such excess bears to the aggregate original
issue discount remaining to be accrued on such REMIC Regular Certificate. The
adjusted issue price of a REMIC Regular Certificate on any given day equals (i)
the adjusted issue price (or, in the case of the first accrual period, the issue
price) of such Certificate at the beginning of the accrual period which includes
such day plus (ii) the daily portions of original issue discount for all days
during such accrual period prior to such day minus (iii) any payments other than
qualified stated interest payments made during such accrual period prior to such
day with respect to such Certificate.

     Market Discount. A Certificateholder that purchases a REMIC Regular
Certificate at a market discount, that is, in the case of a REMIC Regular
Certificate issued without original issue discount, at a purchase price less
than its remaining stated principal amount, or in the case of a REMIC Regular
Certificate issued with original issue discount, at a purchase price less than
its adjusted issue price will recognize income upon receipt of each distribution
representing stated redemption price. In particular, under Section 1276 of the
Code such a Certificateholder generally will be required to allocate the portion
of each such distribution representing stated redemption price first to accrued
market discount not previously included in income, and to recognize ordinary
income to that extent. A Certificateholder may elect to include market discount
in income currently as it accrues rather than including it on a deferred basis
in accordance with the foregoing. If made, such election will apply to all
market discount bonds acquired by such Certificateholder on or after the first
day of the first taxable year to which such election applies. In addition, the
OID Regulations permit a Certificateholder to elect to accrue all interest,
discount (including de minimis market or original issue discount) and premium in
income as interest, based on a constant yield method. If such an election were
made with respect to a REMIC Regular Certificate with market discount, the
Certificateholder would be deemed to have made an election to include currently
market discount in income with respect to all other debt instruments having
market discount that such Certificateholder acquires during the taxable year of
the election or thereafter, and possibly previously acquired instruments.
Similarly, a Certificateholder that made this election for a Certificate that is
acquired at a premium would be deemed to have made an election to amortize bond
premium with respect to all debt instruments having amortizable bond premium
that such Certificateholder owns or acquires. See ' -- Premium.' Each of these
elections to accrue interest, discount and premium with respect to a Certificate
on a constant yield method or as interest may not be revoked without the consent
of the IRS.

     However, market discount with respect to a REMIC Regular Certificate will
be considered to be de minimis for purposes of Section 1276 of the Code if such
market discount is less than 0.25% of the remaining stated redemption price of
such REMIC Regular Certificate multiplied by the number of complete years to
maturity remaining after the date of its purchase. In interpreting a similar
rule with respect to original issue discount on obligations payable in
installments, the OID Regulations refer to the weighted average maturity of
obligations, and it is likely that the same rule will be applied with respect to
market discount, presumably taking into account the Prepayment Assumption. If
market discount is treated as de minimis under this rule, it appears that

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the actual discount would be treated in a manner similar to original issue
discount of a de minimis amount. See ' -- Original Issue Discount.' Such
treatment may result in discount being included in income at a slower rate than
discount would be required to be included in income using the method described
above.

     Section 1276(b)(3) of the Code specifically authorizes the Treasury
Department to issue regulations providing for the method for accruing market
discount on debt instruments, the principal of which is payable in more than one
installment. Until regulations are issued by the Treasury Department, certain
rules described in the Committee Report apply. The Committee Report indicates
that in each accrual period market discount on REMIC Regular Certificates should
accrue, at the Certificateholder's option: (i) on the basis of a constant yield
method, (ii) in the case of a REMIC Regular Certificate issued without original
issue discount, in an amount that bears the same ratio to the total remaining
market discount as the stated interest paid in the accrual period bears to the
total amount of stated interest remaining to be paid on the REMIC Regular
Certificate as of the beginning of the accrual period, or (iii) in the case of a
REMIC Regular Certificate issued with original issue discount, in an amount that
bears the same ratio to the total remaining market discount as the original
issue discount accrued in the accrual period bears to the total original issue
discount remaining on the REMIC Regular Certificate at the beginning of the
accrual period. Moreover, the Prepayment Assumption used in calculating the
accrual of original issue discount is to be used in calculating the accrual of
market discount. Because the regulations referred to in this paragraph have not
been issued, it is not possible to predict what effect such regulations might
have on the tax treatment of a REMIC Regular Certificate purchased at a discount
in the secondary market.

     To the extent that REMIC Regular Certificates provide for monthly or other
periodic distributions throughout their term, the effect of these rules may be
to require market discount to be includible in income at a rate that is not
significantly slower than the rate at which such discount would accrue if it
were original issue discount. Moreover, in any event a holder of a REMIC Regular
Certificate generally will be required to treat a portion of any gain on the
sale or exchange of such Certificate as ordinary income to the extent of the
market discount accrued to the date of disposition under one of the foregoing
methods, less any accrued market discount previously reported as ordinary
income.

     In addition, under Section 1277 of the Code, a holder of a REMIC Regular
Certificate may be required to defer a portion of its interest deductions for
the taxable year attributable to any indebtedness incurred or continued to
purchase or carry a REMIC Regular Certificate purchased with market discount.
For these purposes, the de minimis rule referred to above applies. Any such
deferred interest expense would not exceed the market discount that accrues
during such taxable year and is, in general, allowed as a deduction not later
than the year in which such market discount is includible in income. If such
holder elects to include market discount in income currently as it accrues on
all market discount instruments acquired by such holder in that taxable year or
thereafter, the interest deferral rule described above will not apply.

     Premium. A REMIC Regular Certificate purchased at a cost (excluding any
portion of such cost attributable to accrued qualified stated interest) greater
than its remaining stated redemption price will be considered to be purchased at
a premium. The holder of such a REMIC Regular Certificate may elect under
Section 171 of the Code to amortize such premium under the constant yield method
over the life of the Certificate. If made, such an election will apply to all
debt instruments having amortizable bond premium that the holder owns or
subsequently acquires. Amortizable premium will be treated as an offset to
interest income on the related REMIC Regular Certificate, rather than as a
separate interest deduction. The OID Regulations also permit Certificateholders
to elect to include all interest, discount and premium in income based on a
constant yield method, further treating the Certificateholder as having made the
election to amortize premium generally. See ' -- Market Discount.' The Committee
Report states that the same rules that apply to accrual of market discount
(which rules will require use of a Prepayment Assumption in accruing market
discount with respect to REMIC Regular Certificates without regard to whether
such Certificates have original issue discount) will also apply in amortizing
bond premium under Section 171 of the Code.

     Realized Losses. Under Section 166 of the Code, both corporate holders of
the REMIC Regular Certificates and noncorporate holders of the REMIC Regular
Certificates that acquire such Certificates in connection with a trade or
business should be allowed to deduct, as ordinary losses, any losses sustained
during a taxable year in which their Certificates become wholly or partially
worthless as the result of one or more Realized Losses on the Mortgage
Collateral. 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

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Code until such holder's Certificate becomes wholly worthless (i.e., until its
outstanding principal balance has been reduced to zero) and that the loss will
be characterized as a short-term capital loss.

     Each holder of a REMIC Regular Certificate will be required to accrue
interest and original issue discount with respect to such Certificate, without
giving effect to any reductions in distributions attributable to defaults or
delinquencies on the Mortgage Collateral or the Agency Certificates until it can
be established that any such reduction ultimately will not be recoverable. As a
result, the amount of taxable income reported in any period by the holder of a
REMIC Regular Certificate could exceed the amount of economic income actually
realized by the holder in such period. Although the holder of a REMIC Regular
Certificate eventually will recognize a loss or reduction in income attributable
to previously accrued and included income that, as the result of a realized
loss, ultimately will not be realized, the law is unclear with respect to the
timing and character of such loss or reduction in income.

  Taxation of Owners of REMIC Residual Certificates

     General. As residual interests, the REMIC Residual Certificates will be
subject to tax rules that differ significantly from those that would apply if
the REMIC Residual Certificates were treated for federal income tax purposes as
direct ownership interests in the Mortgage Collateral or as debt instruments
issued by the REMIC.

     A holder of a REMIC Residual Certificate generally will be required to
report its daily portion of the taxable income or, subject to the limitations
noted in this discussion, the net loss of the REMIC for each day during a
calendar quarter that such holder owned such REMIC Residual Certificate. For
this purpose, the taxable income or net loss of the REMIC will be allocated to
each day in the calendar quarter ratably using a '30 days per month/90 days per
quarter/360 days per year' convention unless otherwise disclosed in the related
Prospectus Supplement. The daily amounts will then be allocated among the REMIC
Residual Certificateholders in proportion to their respective ownership
interests on such day. Any amount included in the gross income or allowed as a
loss of any REMIC Residual Certificateholder by virtue of this allocation 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.'

     A holder of a REMIC Residual Certificate that purchased such Certificate
from a prior holder of such Certificate also will be required to report on its
federal income tax return amounts representing its daily portion of the taxable
income (or net loss) of the REMIC for each day that it holds such REMIC Residual
Certificate. These daily portions 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 or loss of a holder
of a REMIC Residual Certificateholder that purchased such REMIC Residual
Certificate from a prior holder of such Certificate at a price greater than (or
less than) the adjusted basis (as defined herein) such REMIC Residual
Certificate would have had in the hands of an original holder of such
Certificate. The REMIC Regulations, however, do not provide for any such
modifications.

     Any payments received by a holder of a REMIC Residual Certificate in
connection with the acquisition of such REMIC Residual Certificate will be taken
into account in determining the income of such holder for federal income tax
purposes. Although it appears likely that any such payment would be includible
in income immediately upon its receipt, the IRS might assert that such payment
should be included in income over time according to an amortization schedule or
according to some other method. Because of the uncertainty concerning the
treatment of such payments, holders of REMIC Residual Certificates should
consult their tax advisors concerning the treatment of such payments for income
tax purposes.

     The amount of income REMIC Residual Certificateholders will be required to
report (or the tax liability associated with such income) may exceed the amount
of cash distributions received from the REMIC for the corresponding period.
Consequently, REMIC Residual Certificateholders should have other sources of
funds sufficient to pay any federal income taxes due as a result of their
ownership of REMIC Residual Certificates or unrelated deductions against which
income may be offset, subject to the rules relating to 'excess inclusions' and
'noneconomic' residual interests discussed below. The fact that the tax
liability associated with the income

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allocated to REMIC Residual Certificateholders may exceed the cash distributions
received by such REMIC Residual Certificateholders for the corresponding period
may significantly adversely affect such REMIC Residual Certificateholders'
after-tax rate of return.

     Taxable Income of the REMIC. The taxable income of the REMIC will equal the
income from the Mortgage Collateral and other assets of the REMIC plus any
cancellation of indebtedness income due to the allocation of realized losses to
REMIC Regular Certificates, less the deductions allowed to the REMIC for
interest (including original issue discount and reduced by the amortization of
any premium received on issuance) on the REMIC Regular Certificates (and any
other class of REMIC Certificates constituting 'regular interests' in the REMIC
not offered hereby), amortization of any premium on the Mortgage Collateral, bad
debt deductions with respect to the Mortgage Collateral 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 their fair market value
immediately after their transfer to the REMIC. For this purpose, the Master
Servicer or the Certificate Administrator, as applicable, intends to treat the
fair market value of the Mortgage Collateral as being equal to the aggregate
issue prices of the REMIC Regular Certificates and REMIC Residual Certificates.
Such aggregate basis will be allocated among the Mortgage Collateral
collectively and the other assets of the REMIC in proportion to their respective
fair market values. The issue price of any REMIC Certificates offered hereby
will be determined in the manner described above under ' -- Taxation of Owners
of REMIC Regular Certificates -- Original Issue Discount.' Accordingly, if one
or more classes of REMIC Certificates are retained initially rather than sold,
the Master Servicer or the Certificate Administrator, as applicable, may be
required to estimate the fair market value of such interests in order to
determine the basis of the REMIC in the Mortgage Collateral and other property
held by the REMIC.

     Subject to the possible application of the de minimis rules, the method of
accrual by the REMIC of original issue discount income and market discount
income with respect to Mortgage Collateral that it holds will be equivalent to
the method of accruing original issue discount income for REMIC Regular
Certificateholders (that is, under the constant yield method taking into account
the Prepayment Assumption). However, a REMIC that acquires Mortgage Collateral
at a market discount must include such 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 of accruing discount income that
is analogous to that required to be used by a REMIC as to Mortgage Collateral
with market discount that it holds.

     An item of Mortgage Collateral will be deemed to have been acquired with
discount (or premium) to the extent that the REMIC's basis therein, determined
as described in the preceding paragraph, is less than (or greater than) its
stated redemption price. Any such discount will be includible in the income of
the REMIC as it accrues, in advance of receipt of the cash attributable to such
income, under a method similar to the method described above for accruing
original issue discount on the REMIC Regular Certificates. It is anticipated
that each REMIC will elect under Section 171 of the Code to amortize any premium
on the Mortgage Collateral. Premium on any item of Mortgage Collateral to which
such election applies may be amortized under a constant yield method, presumably
taking into account a Prepayment Assumption.

     A REMIC will be allowed deductions for interest (including original issue
discount) on the REMIC Regular Certificates (including any other class of REMIC
Certificates constituting 'regular interests' in the REMIC not offered hereby)
equal to the deductions that would be allowed if the REMIC Regular Certificates
(including any other class of REMIC Certificates constituting 'regular
interests' in the REMIC not offered hereby) were indebtedness of the REMIC.
Original issue discount will be considered to accrue for this purpose as
described above under ' -- Taxation of Owners of REMIC Regular
Certificates -- Original Issue Discount,' except that the de minimis rule and
the adjustments for subsequent holders of REMIC Regular Certificates (including
any other class of Certificates constituting 'regular interests' in the REMIC
not offered hereby) described therein will not apply.

     If a class of REMIC Regular Certificates is issued at a price in excess of
the stated redemption price of such class (such excess, 'ISSUE PREMIUM'), the
net amount of interest deductions that are allowed the REMIC in each taxable
year with respect to the REMIC Regular Certificates of such class will be
reduced by an amount equal to the portion of the Issue Premium that is
considered to be amortized or repaid in that year. Although the matter is not
entirely certain, it is likely that Issue Premium would be amortized under a
constant yield method

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in a manner analogous to the method of accruing original issue discount
described above under ' -- Taxation of Owners of REMIC Regular
Certificates -- Original Issue Discount.'

     As a general rule, the taxable income of the 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 and Other Possible REMIC
Taxes' below. Further, the limitation on miscellaneous itemized deductions
imposed on individuals by Section 67 of the Code (which allows such deductions
only to the extent they exceed in the aggregate two percent of the taxpayer's
adjusted gross income) will not be applied at the REMIC level so that the REMIC
will be allowed deductions for servicing, administrative and other non-interest
expenses in determining its taxable income. All such expenses will be allocated
as a separate item generally to the holders of REMIC Residual Certificates,
subject to the limitation of Section 67 of the Code. See ' -- Possible
Pass-Through of Miscellaneous Itemized Deductions' below. If the deductions
allowed to the REMIC exceed its gross income for a calendar quarter, such excess
will be the net loss for the REMIC for that calendar quarter.

     Basis Rules, Net Losses and Distributions. The adjusted basis of a REMIC
Residual Certificate will be equal to the amount paid for such REMIC Residual
Certificate, increased by amounts included in the income of the related
Certificateholder and decreased (but not below zero) by distributions made, and
by net losses allocated, to such Certificateholder.

     A REMIC Residual Certificateholder is not allowed to take into account any
net loss for any calendar quarter to the extent such net loss exceeds such REMIC
Residual Certificateholder's adjusted basis in its REMIC Residual Certificate as
of the close of such calendar quarter (determined without regard to such net
loss). Any loss that is not currently deductible by reason of this limitation
may be carried forward indefinitely to future calendar quarters and, subject to
the same limitation, may be used only to offset income from the REMIC Residual
Certificate. The ability of holders of REMIC Residual Certificates to deduct net
losses may be subject to additional limitations under the Code, as to which such
Certificateholders should consult their tax advisors.

     Any distribution on a REMIC Residual Certificate will be treated as a
non-taxable return of capital to the extent it does not exceed the holder's
adjusted basis in such REMIC Residual Certificate. To the extent a distribution
on a REMIC Residual Certificate exceeds such adjusted basis, it will be treated
as gain from the sale of such REMIC Residual Certificate. Holders of certain
REMIC Residual Certificates may be entitled to distributions early in the term
of the related REMIC under circumstances in which their bases in such REMIC
Residual Certificates will not be sufficiently large that such distributions
will be treated as nontaxable returns of capital. Their bases in such REMIC
Residual Certificates will initially equal the amount paid for such REMIC
Residual Certificates and will be increased by their allocable shares of taxable
income of the Trust. However, such basis increases may not occur until the end
of the calendar quarter, or perhaps the end of the calendar year, with respect
to which such REMIC taxable income is allocated to the holders of REMIC Residual
Certificates. To the extent such Certificateholders' initial bases are less than
the distributions to such REMIC Residual Certificateholders, and increases in
such initial bases either occur after such distributions or (together with their
initial bases) are less than the amount of such distributions, gain will be
recognized to such Certificateholders on such distributions and will be treated
as gain from the sale of their REMIC Residual Certificates.

     The effect of these rules is that a Certificateholder may not amortize its
basis in a REMIC Residual Certificate, but may only recover its basis through
distributions, through the deduction of its share of any net losses of the REMIC
or upon the sale of its REMIC Residual Certificate. See ' -- Sales of REMIC
Certificates' below. For a discussion of possible modifications of these rules
that may require adjustments to income of a holder of a REMIC Residual
Certificate other than an original holder in order to reflect any difference
between the cost of such REMIC Residual Certificate to such holder and the
adjusted basis such REMIC Residual Certificate would have had in the hands of
the original holder, see ' -- General' above.

     Excess Inclusions. Any 'excess inclusions' with respect to a REMIC Residual
Certificate will be subject to federal income tax in all events.

     In general, the 'excess inclusions' with respect to a REMIC Residual
Certificate for any calendar quarter will be the excess, if any, of (i) the sum
of the daily portions of REMIC taxable income allocable to such REMIC Residual
Certificate over (ii) the sum of the 'daily accruals' (as defined herein) for
each day during such quarter that such REMIC Residual Certificate was held by
such REMIC Residual Certificateholder. The

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daily accruals of a REMIC Residual Certificateholder will be determined by
allocating to each day during a calendar quarter its ratable portion of the
product of the 'adjusted issue price' of the REMIC Residual Certificate at the
beginning of the calendar quarter and 120% of the 'long-term federal rate' in
effect on the Closing Date. For this purpose, the adjusted issue price of a
REMIC Residual Certificate as of the beginning of any calendar quarter will be
equal to the issue price of the REMIC Residual Certificate, increased by the sum
of the daily accruals for all prior quarters and decreased (but not below zero)
by any distributions made with respect to such REMIC Residual Certificate before
the beginning of such quarter. The issue price of a REMIC Residual Certificate
is the initial offering price to the public (excluding bond houses, brokers and
underwriters) at which a substantial amount of the REMIC Residual Certificates
were sold. If less than a substantial amount of a particular class of REMIC
Residual Certificates is sold for cash on or prior to the Closing Date, the
issue price of such class will be treated as the fair market value of such class
on the Closing Date. 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.

     For REMIC Residual Certificateholders, an excess inclusion (i) will not be
permitted to be offset by deductions, losses or loss carryovers from other
activities, (ii) will be treated as 'unrelated business taxable income' to an
otherwise tax-exempt organization and (iii) will not be eligible for any rate
reduction or exemption under any applicable tax treaty with respect to the 30%
United States withholding tax imposed on distributions to REMIC Residual
Certificateholders that are foreign investors. See, however, ' -- Foreign
Investors in REMIC Certificates' below. Furthermore, for purposes of the
alternative minimum tax, (i) excess inclusions will not be permitted to be
offset by the alternative tax net operating loss deduction and (ii) alternative
minimum taxable income may not be less than the taxpayer's excess inclusions;
provided, however, that for purposes of (ii), alternative minimum taxable income
is determined without regard to the special rule that taxable income cannot be
less than excess inclusions. The latter rule has the effect of preventing
nonrefundable tax credits from reducing the taxpayer's income tax to an amount
lower than the alternative minimum tax on excess inclusions.

     In the case of any REMIC Residual Certificates held by a real estate
investment trust, the aggregate excess inclusions with respect to such REMIC
Residual Certificates, reduced (but not below zero) by the real estate
investment trust taxable income (within the meaning of Section 857(b)(2) of the
Code, excluding any net capital gain), will be allocated among the shareholders
of such trust in proportion to the dividends received by such shareholders from
such trust, and any amount so allocated will be treated as an excess inclusion
with respect to a REMIC Residual Certificate as if held directly by such
shareholder. Treasury regulations yet to be issued could apply a similar rule to
regulated investment companies, common trust funds and certain cooperatives; the
REMIC Regulations currently do not address this subject.

     Noneconomic REMIC Residual Certificates. Under the REMIC Regulations,
transfers of 'noneconomic' REMIC Residual Certificates will be disregarded for
all federal income tax purposes if 'a significant purpose of the transfer was to
enable the transferor to impede the assessment or collection of tax.' If such
transfer is disregarded, the purported transferor will continue to remain liable
for any taxes due with respect to the income on such 'noneconomic' REMIC
Residual Certificate. The REMIC Regulations provide that a REMIC Residual
Certificate is noneconomic unless, based on the Prepayment Assumption and on any
required or permitted clean up calls, or required qualified liquidation provided
for in the REMIC's organizational documents, (1) the present value of the
expected future distributions (discounted using the 'applicable federal rate'
for obligations whose term ends on the close of the last quarter in which excess
inclusions are expected to accrue with respect to the REMIC Residual
Certificate, which rate is computed and published monthly by the IRS) on the
REMIC Residual Certificate equals at least the present value of the expected tax
on the anticipated excess inclusions, and (2) the transferor reasonably expects
that the transferee will receive distributions with respect to the REMIC
Residual Certificate at or after the time the taxes accrue on the anticipated
excess inclusions in an amount sufficient to satisfy the accrued taxes.
Accordingly, all transfers of REMIC Residual Certificates that may constitute
noneconomic residual interests will be subject to certain restrictions under the
terms of the related Pooling and Servicing Agreement or Trust Agreement that are
intended to reduce the possibility of any such transfer being disregarded. Such
restrictions will require each party to a transfer to provide an affidavit that
no purpose of such transfer is to impede the assessment or collection of tax,
including certain representations as to the financial condition of the
prospective transferee, as to which the transferor also is required to make a
reasonable investigation to determine such transferee's historic payment of its
debts and ability to continue to pay its debts as they come due in the future.
Prior to purchasing a REMIC Residual Certificate, prospective

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purchasers should consider the possibility that a purported transfer of such
REMIC Residual Certificate by such a purchaser to another purchaser at some
future date may be disregarded in accordance with the above-described rules
which would result in the retention of tax liability by such purchaser.

     The related Prospectus Supplement will disclose whether offered REMIC
Residual Certificates may be considered 'noneconomic' residual interests under
the REMIC Regulations. Any such disclosure that a REMIC Residual Certificate
will not be considered 'noneconomic' will be based upon certain assumptions, and
the Depositor will make no representation that a REMIC Residual Certificate will
not be considered 'noneconomic' for purposes of the above-described rules. See
' -- Foreign Investors in REMIC Certificates' below for additional restrictions
applicable to transfers of certain REMIC Residual Certificates to foreign
persons.

     Mark-to-Market Rules. On December 24, 1996, the IRS released final
regulations (the 'MARK-TO-MARKET REGULATIONS') relating to the requirement that
a securities dealer mark to market securities held for sale to customers. This
mark-to-market requirement applies to all securities owned by a dealer, except
to the extent that the dealer has specifically identified a security as held for
investment. The Mark-to-Market Regulations provide that for purposes of this
mark-to-market requirement, a REMIC Residual Certificate acquired on or after
January 4, 1995 is not treated as a security and thus may not be marked to
market.

     Possible Pass-Through of Miscellaneous Itemized Deductions. Fees and
expenses of a REMIC generally will be allocated to the holders of the related
REMIC Residual Certificates. The applicable Treasury regulations indicate,
however, that in the case of a REMIC that is similar to a single class grantor
trust, all or a portion of such fees and expenses should be allocated to the
holders of the related REMIC Regular Certificates. Unless otherwise stated in
the related Prospectus Supplement, such fees and expenses will be allocated to
holders of the related REMIC Residual Certificates in their entirety and not to
the holders of the related REMIC Regular Certificates.

     With respect to REMIC Residual Certificates or REMIC Regular Certificates
the holders of which receive an allocation of fees and expenses in accordance
with the preceding discussion, if any holder thereof is an individual, estate or
trust, or a 'pass-through entity' beneficially owned by one or more individuals,
estates or trusts, (i) an amount equal to such individual's, estate's or trust's
share of such fees and expenses will be added to the gross income of such holder
and (ii) such individual's, estate's or trust's share of such fees and expenses
will be treated as a miscellaneous itemized deduction allowable subject to the
limitation of Section 67 of the Code, which permits such deductions only to the
extent they exceed in the aggregate two percent of a taxpayer's adjusted gross
income. In addition, Section 68 of the Code provides that the amount of itemized
deductions otherwise allowable for an individual whose adjusted gross income
exceeds a specified amount will be reduced by the lesser of (i) 3% of the excess
of the individual's adjusted gross income over such amount or (ii) 80% of the
amount of itemized deductions otherwise allowable for the taxable year. The
amount of additional taxable income reportable by REMIC Certificateholders that
are subject to the limitations of either Section 67 or Section 68 of the Code
may be substantial. Furthermore, in determining the alternative minimum taxable
income of such a holder of a REMIC Certificate that is an individual, estate or
trust, or a 'pass-through entity' beneficially owned by one or more individuals,
estates or trusts, no deduction will be allowed for such holder's allocable
portion of servicing fees and other miscellaneous itemized deductions of the
REMIC, even though an amount equal to the amount of such fees and other
deductions will be included in such holder's gross income. Accordingly, such
REMIC Certificates may not be appropriate investments for individuals, estates,
or trusts, or pass-through entities beneficially owned by one or more
individuals, estates or trusts. Such prospective investors should consult with
their tax advisors prior to making an investment in such Certificates.

  Sales of REMIC Certificates

     If a REMIC Certificate is sold, the selling Certificateholder will
recognize gain or loss equal to the difference between the amount realized on
the sale and its adjusted basis in the REMIC Certificate. The adjusted basis of
a REMIC Regular Certificate generally will equal the cost of such REMIC Regular
Certificate to such Certificateholder, increased by income reported by such
Certificateholder with respect to such REMIC Regular Certificate (including
original issue discount and market discount income) and reduced (but not below
zero) by distributions on such REMIC Regular Certificate received by such
Certificateholder and by any amortized premium. The adjusted basis of a REMIC
Residual Certificate will be determined as described under ' -- Taxation of
Owners of REMIC Residual Certificates -- Basis Rules, Net Losses and
Distributions' above. Except as described below, any such gain or loss generally
will be capital gain or loss.

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     Gain from the sale of a REMIC Regular Certificate that might otherwise be
capital gain will be treated as ordinary income to the extent such gain does not
exceed the excess, if any, of (i) the amount that would have been includible in
the seller's income with respect to such REMIC Regular Certificate had income
accrued thereon at a rate equal to 110% of the 'applicable federal rate'
(generally, a rate based on an average of current yields on Treasury securities
having a maturity comparable to that of the Certificate, which rate is computed
and published monthly by the IRS), determined as of the date of purchase of such
REMIC Regular Certificate, over (ii) the amount of ordinary income actually
includible in the seller's income prior to such sale. In addition, gain
recognized on the sale of a REMIC Regular Certificate by a seller who purchased
such REMIC Regular Certificate at a market discount will be taxable as ordinary
income to the extent of any accrued and previously unrecognized market discount
that accrued during the period the Certificate was held. See ' -- Taxation of
Owners of REMIC Regular Certificates -- Market Discount' above.

     REMIC Certificates will be 'evidences of indebtedness' within the meaning
of Section 582(c)(1) of the Code, so that gain or loss recognized from the sale
of a REMIC Certificate by a bank or thrift institution to which such section
applies will be ordinary income or loss.

     A portion of any gain from the sale of a REMIC Regular Certificate that
might otherwise be capital gain may be treated as ordinary income to the extent
that such Certificate is held as part of a 'conversion transaction' within the
meaning of Section 1258 of the Code. A conversion transaction generally is one
in which the taxpayer has taken two or more positions in Certificates or similar
property that reduce or eliminate market risk, if substantially all of the
taxpayer's return is attributable to the time value of the taxpayer's net
investment in such transaction. The amount of gain so realized in a conversion
transaction that is recharacterized as ordinary income generally will not exceed
the amount of interest that would have accrued on the taxpayer's net investment
at 120% of the appropriate 'applicable federal rate' (which rate is computed and
published monthly by the IRS) at the time the taxpayer enters into the
conversion transaction, subject to appropriate reduction for prior inclusion of
interest and other ordinary income items from the transaction.

     Finally, a taxpayer may elect to have net capital gain taxed at ordinary
income rates rather than capital gains rates in order to include such net
capital gain in total net investment income for the taxable year, for purposes
of the limitation on the deduction of interest on indebtedness incurred to
purchase or carry property held for investment to a taxpayer's net investment
income.

     Except as may be provided in Treasury regulations yet to be issued, if the
seller of a REMIC Residual Certificate reacquires the Certificate, any other
residual interest in a REMIC (and possibly a 'financial asset securitization
investment trust' within the meaning of Section 860L of the Code. (a 'FASIT'))
or any similar interest in a 'taxable mortgage pool' (as defined in Section
7701(i) of the Code) within six months of the date of such sale, the sale will
be subject to the 'wash sale' rules of Section 1091 of the Code. In that event,
any loss realized by the REMIC Residual Certificateholder on the sale will not
be deductible, but instead will be added to such REMIC Residual
Certificateholder's adjusted basis in the newly-acquired asset.

  Prohibited Transactions and Other Possible REMIC Taxes

     The Code imposes a tax on REMICs equal to 100% of the net income derived
from 'prohibited transactions' (the 'PROHIBITED TRANSACTIONS TAX'). In general,
subject to certain specified exceptions a prohibited transaction means the
disposition of an item of Mortgage Collateral, the receipt of income from a
source other than an item of Mortgage Collateral or certain other permitted
investments, the receipt of compensation for services, or gain from the
disposition of an asset purchased with the payments on the Mortgage Collateral
for temporary investment pending distribution on the REMIC Certificates. It is
not anticipated that any REMIC will engage in any prohibited transactions in
which it would recognize a material amount of net income.

     In addition, certain contributions to a REMIC made after the day on which
the REMIC issues all of its interests could result in the imposition of a tax on
the REMIC equal to 100% of the value of the contributed property (the
'CONTRIBUTIONS TAX'). Each Pooling and Servicing Agreement or Trust Agreement
will include provisions designed to prevent the acceptance of any contributions
that would be subject to such tax.

     REMICs also are subject to federal income tax at the highest corporate rate
on 'net income from foreclosure property,' determined by reference to the rules
applicable to real estate investment trusts. 'Net income from foreclosure
property' generally means gain from the sale of a foreclosure property that is

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inventory property and gross income from foreclosure property other than
qualifying rents and other qualifying income for a real estate investment trust.

     Unless otherwise disclosed in the related Prospectus Supplement, it is not
anticipated that any 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, the Certificate Administrator or the Trustee in
either case out of its own funds, provided that the Master Servicer, the
Certificate Administrator or the Trustee, as the case may be, has sufficient
assets to do so, and provided further that such tax arises out of a breach of
the Master Servicer's, the Certificate Administrator's or the Trustee's
obligations, as the case may be, under the related Pooling and Servicing
Agreement or Trust Agreement and in respect of compliance with applicable laws
and regulations. Any such tax not borne by the Master Servicer, the Certificate
Administrator or the Trustee will be payable out of the related Trust resulting
in a reduction in amounts payable to holders of the REMIC Certificates.

  Tax and Restrictions on Transfers of REMIC Residual Certificates to Certain
Organizations

     If a REMIC Residual Certificate is transferred to a 'disqualified
organization' (as defined below), a tax would be imposed in an amount
(determined under the REMIC Regulations) equal to the product of (i) the present
value (discounted using the 'applicable federal rate' for obligations whose term
ends on the close of the last quarter in which excess inclusions are expected to
accrue with respect to the Certificate, which rate is computed and published
monthly by the IRS) of the total anticipated excess inclusions with respect to
such REMIC Residual Certificate for periods after the transfer and (ii) the
highest marginal federal income tax rate applicable to corporations. The
anticipated excess inclusions must be determined as of the date that the REMIC
Residual Certificate is transferred and must be based on events that have
occurred up to the time of such transfer, the Prepayment Assumption and any
required or permitted clean up calls or required liquidation provided for in the
REMIC's organizational documents. Such a tax generally would be imposed on the
transferor of the REMIC Residual Certificate, except that where such transfer is
through an agent for a disqualified organization, the tax would instead be
imposed on such agent. However, a transferor of a REMIC Residual Certificate
would in no event be liable for such tax with respect to a transfer if the
transferee furnishes to the transferor an affidavit that the transferee is not a
disqualified organization and, as of the time of the transfer, the transferor
does not have actual knowledge that such affidavit is false. Moreover, an entity
will not qualify as a REMIC unless there are reasonable arrangements designed to
ensure that (i) residual interests in such entity are not held by disqualified
organizations and (ii) information necessary for the application of the tax
described herein will be made available. Restrictions on the transfer of REMIC
Residual Certificates and certain other provisions that are intended to meet
this requirement will be included in the Pooling and Servicing Agreement or
Trust Agreement, including provisions (a) requiring any transferee of a REMIC
Residual Certificate to provide an affidavit representing that it is not a
'disqualified organization' and is not acquiring the REMIC Residual Certificate
on behalf of a 'disqualified organization,' undertaking to maintain such status
and agreeing to obtain a similar affidavit from any person to whom it shall
transfer the REMIC Residual Certificate, (b) providing that any transfer of a
REMIC Residual Certificate to a 'disqualified person' shall be null and void and
(c) granting to the Master Servicer or the Certificate Administrator, as
applicable, the right, without notice to the holder or any prior holder, to sell
to a purchaser of its choice any REMIC Residual Certificate that shall become
owned by a 'disqualified organization' despite (a) and (b) above.

     In addition, if a 'pass-through entity' (as defined below) includes in
income excess inclusions with respect to a REMIC Residual Certificate, and a
disqualified organization is the record holder of an interest in such entity,
then a tax will be imposed on such entity equal to the product of (i) the amount
of excess inclusions on the REMIC Residual Certificate that are allocable to the
interest in the pass-through entity held by such disqualified organization and
(ii) the highest marginal federal income tax rate imposed on corporations. A
pass-through entity will not be subject to this tax for any period, however, if
each record holder of an interest in such pass-through entity furnishes to such
pass-through entity (i) such holder's social security number and a statement
under penalties of perjury that such social security number is that of the
record holder or (ii) a statement under penalties of perjury that such record
holder is not a disqualified organization. For taxable years beginning after
December 31, 1997, notwithstanding the preceding two sentences, in the case of a
REMIC

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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 second preceding sentence 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 (i) the United
States, any State or political subdivision thereof, any foreign government, any
international organization, or any agency or instrumentality of the foregoing
(but would not include instrumentalities described in Section 168(h)(2)(D) of
the Code or Freddie Mac), (ii) any organization (other than a cooperative
described in Section 521 of the Code) that is exempt from federal income tax,
unless it is subject to the tax imposed by Section 511 of the Code or (iii) any
organization described in Section 1381(a)(2)(C) of the Code. For these purposes,
a 'pass-through entity' means any regulated investment company, real estate
investment trust, trust, partnership or certain other entities described in
Section 860E(e)(6) of the Code. In addition, a person holding an interest in a
pass-through entity as a nominee for another person will, with respect to such
interest, be treated as a pass-through entity.

  Termination

     A REMIC will terminate immediately after the Distribution Date following
receipt by the REMIC of the final payment in respect of the Mortgage Collateral
or upon a sale of the REMIC's assets following the adoption by the REMIC of a
plan of complete liquidation. The last distribution on a REMIC Regular
Certificate will be treated as a payment in retirement of a debt instrument. In
the case of a REMIC Residual Certificate, if the last distribution on such REMIC
Residual Certificate is less than the Certificateholder's adjusted basis in such
Certificate, such Certificateholder should be treated as realizing a loss equal
to the amount of such difference, and such loss may be treated as a capital
loss.

  Reporting and Other Administrative Matters

     Solely for purposes of the administrative provisions of the Code, the REMIC
will be treated as a partnership and holders of REMIC Residual Certificates will
be treated as partners. Unless otherwise stated in the related Prospectus
Supplement, the Master Servicer or the Certificate Administrator, as applicable,
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 in
all respects, and may hold a nominal amount of REMIC Residual Certificates.

     As the tax matters person, the Master Servicer or the Certificate
Administrator, as applicable, subject to certain notice requirements and various
restrictions and limitations, generally will have the authority to act on behalf
of the REMIC and the holders of REMIC Residual Certificates in connection with
the administrative and judicial review of items of income, deduction, gain or
loss of the REMIC, as well as the REMIC's classification. Holders of REMIC
Residual Certificates generally will be required to report such REMIC items
consistently with their treatment on the related REMIC's tax return and may in
some circumstances be bound by a settlement agreement between the Master
Servicer or the Certificate Administrator, as applicable, as tax matters person,
and the IRS concerning any such REMIC item. Adjustments made to the REMIC tax
return may require a holder of a REMIC Residual Certificate to make
corresponding adjustments on its return, and an audit of the REMIC's tax return,
or the adjustments resulting from such an audit, could result in an audit of
such Certificateholder's return. No REMIC will be registered as a tax shelter
pursuant to Section 6111 of the Code because it is not anticipated that any
REMIC will have a net loss for any of the first five taxable years of its
existence. Any person that holds a REMIC Residual Certificate as a nominee for
another person may be required to furnish to the related REMIC, in a manner to
be provided in Treasury regulations, the name and address of such person and
other information.

     Reporting of interest income, including any original issue discount, with
respect to REMIC Regular Certificates is required annually, and may be required
more frequently under Treasury regulations. These information reports generally
are required to be sent to individual holders of REMIC Regular Interests and the
IRS; holders of REMIC Regular Certificates that are corporations, trusts,
securities dealers and certain other non-individuals will be provided interest
and original issue discount income information and the information set forth in
the following paragraph upon request in accordance with the requirements of the
applicable regulations.

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The information must be provided by the later of 30 days after the end of the
quarter for which the information was requested, or two weeks after the receipt
of the request. The REMIC must also comply with rules requiring a REMIC Regular
Certificate issued with original issue discount to disclose on its face certain
information including the amount of original issue discount and the issue date,
and requiring such information to be reported to the IRS. Reporting with respect
to the REMIC Residual Certificates, including income, excess inclusions,
investment expenses and relevant information regarding qualification of the
REMIC's assets will be made as required under the Treasury regulations,
generally on a quarterly basis.

     As applicable, the REMIC Regular Certificate information reports will
include a statement of the adjusted issue price of the REMIC Regular Certificate
at the beginning of each accrual period. In addition, the reports will include
information required by regulations with respect to computing the accrual of any
market discount. Because exact computation of the accrual of market discount on
a constant yield method requires information relating to the holder's purchase
price that the Master Servicer or the Certificate Administrator will not have,
such regulations only require that information pertaining to the appropriate
proportionate method of accruing market discount be provided. See ' -- Taxation
of Owners of REMIC Regular Certificates -- Market Discount.'

     The responsibility for complying with the foregoing reporting rules will be
borne by the Master Servicer or the Certificate Administrator.
Certificateholders may request any information with respect to the returns
described in Section 1.6049-7(e)(2) of the Treasury regulations. Such request
should be directed to the Master Servicer or the Certificate Administrator, as
applicable, at Residential Funding Corporation, 8400 Normandale Lake Boulevard,
Suite 600, Minneapolis, Minnesota 55437.

  Backup Withholding with Respect to REMIC Certificates

     Payments of interest and principal, as well as payments of proceeds from
the sale of REMIC Certificates, may be subject to the 'backup withholding tax'
under Section 3406 of the Code at a rate of 31% if recipients of such payments
fail to furnish to the payor certain information, including their taxpayer
identification numbers, or otherwise fail to establish an exemption from such
tax. Any amounts deducted and withheld from a distribution to a recipient would
be allowed as a credit against such recipient's federal income tax. Furthermore,
certain penalties may be imposed by the IRS on a recipient of payments that is
required to supply information but that does not do so in the proper manner.

  Foreign Investors in REMIC Certificates

     A REMIC Regular Certificateholder that is not a 'United States person' 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 be subject to United States federal income or withholding
tax in respect of a distribution on a REMIC Regular Certificate, provided that
the holder complies to the extent necessary with certain identification
requirements (including delivery of a statement, signed by the Certificateholder
under penalties of perjury, certifying that such Certificateholder is not a
United States person and providing the name and address of such
Certificateholder). For these purposes, 'UNITED STATES PERSON' means a citizen
or resident of the United States, a corporation, partnership (or other entity
treated as a corporation or partnership) created or organized in, or under the
laws of, the United States, any state thereof or the District of Columbia
(except, in the case of a partnership, to the extent provided in regulations),
or an estate whose income is subject to United States federal income tax
regardless of its source, or a trust if a court within the United States is able
to exercise primary supervision over the administration of the trust and one or
more United States persons has the authority to control all substantial
decisions of the trust. To the extent prescribed in regulations by the Secretary
of the Treasury, which regulations have not yet been finalized, a trust which
was in existence on August 20, 1996 (other than a trust treated as owned by the
grantor under subpart E of part I of subchapter J of chapter 1 of the Code), and
which was treated as a United States person on August 19, 1996, may elect to
continue to be treated as a United States person notwithstanding the previous
sentence. It is possible that the IRS may assert that the foregoing tax
exemption should not apply with respect to a REMIC Regular Certificate held by a
Certificateholder that owns directly or indirectly a 10% or greater interest in
the REMIC Residual Certificates. If the holder does not qualify for exemption,
distributions of interest, including distributions in respect of accrued
original issue discount, to such holder may be subject to a tax rate of 30%,
subject to reduction under any applicable tax treaty.

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     In addition, the foregoing rules will not apply to exempt a United States
shareholder of a controlled foreign corporation from taxation on such United
States shareholder's allocable portion of the interest income received by such
controlled foreign corporation.

     Further, it appears that a REMIC Regular Certificate would not be included
in the estate of a non-resident alien individual and would not be subject to
United States estate taxes. However, Certificateholders who are non-resident
alien individuals should consult their tax advisors concerning this question.

     Unless otherwise stated in the related Prospectus Supplement, transfers of
REMIC Residual Certificates to investors that are not United States persons will
be prohibited under the related Pooling and Servicing Agreement or Trust
Agreement.

  New Withholding Regulations

     The Treasury Department has issued new regulations (the 'NEW REGULATIONS')
which make certain modifications to the withholding, backup withholding and
information reporting rules described above. The New Regulations attempt to
unify certification requirements and modify reliance standards. The New
Regulations will generally be effective for payments made after December 31,
1999, subject to certain transition rules. Prospective investors are urged to
consult their tax advisors regarding the New Regulations.

                        STATE AND OTHER TAX CONSEQUENCES

     In addition to the federal income tax consequences described in 'Certain
Federal Income Tax Consequences,' potential investors should consider the state
and local tax consequences of the acquisition, ownership, and disposition of the
Certificates offered. State tax law may differ substantially from the
corresponding federal tax law, and the discussion above does not purport to
describe any aspect of the tax laws of any state or other jurisdiction.
Therefore, prospective investors should consult their tax advisors with respect
to the various tax consequences of investments in the Certificates offered
hereby.

                              ERISA CONSIDERATIONS

     Sections 404 and 406 of the Employee Retirement Income Security Act, as
amended ('ERISA') impose certain fiduciary and prohibited transaction
restrictions on employee pension and welfare benefit plans subject to ERISA
('ERISA PLANS') and on certain other retirement plans and arrangements,
including individual retirement accounts and annuities, Keogh plans, bank
collective investment funds and insurance company general and separate accounts
in which such ERISA Plans are invested. Section 4975 of the Code imposes
essentially the same prohibited transaction restrictions on tax-qualified
retirement plans described in Section 401(a) of the Code and on individual
retirement accounts described in Section 408 of the Code (collectively,
'TAX-FAVORED PLANS').

     Certain employee benefit plans, such as governmental plans (as defined in
Section 3(32) of ERISA) and, if no election has been made under Section 410(d)
of the Code, church plans (as defined in Section 3(33) of ERISA), are not
subject to the ERISA requirements discussed herein. Accordingly, assets of such
plans may be invested in Certificates without regard to the ERISA considerations
described below, subject to the provisions of applicable federal and state law.
Any such plan that is a tax-qualified plan and exempt from taxation under
Sections 401(a) and 501(a) of the Code, however, is subject to the prohibited
transaction rules set forth in Section 503 of the Code.

     In addition to imposing general fiduciary requirements, including those of
investment prudence and diversification and the requirement that a Plan's
investment be made in accordance with the documents governing the Plan, Section
406 of ERISA and Section 4975 of the Code prohibit a broad range of transactions
involving 'plan assets' of ERISA Plans and Tax-Favored Plans (collectively,
'PLANS') and persons ('PARTIES IN INTEREST' under ERISA or 'Disqualified
Persons' under the Code, collectively, 'PARTIES IN INTEREST') who have certain
specified relationships to the Plans, unless a statutory or administrative
exemption is available. Certain Parties in Interest that participate in a
prohibited transaction may be subject to a penalty (or an excise tax) imposed
pursuant to Section 502(i) of ERISA or Section 4975 of the Code, unless a
statutory or administrative exemption is available with respect to any such
transaction.

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PLAN ASSET REGULATIONS

     An investment of Plan Assets in Certificates may cause the underlying
Mortgage Loans, Contracts, Agency Securities or any other assets included in a
Trust to be deemed 'plan assets' of such Plan. The U.S. Department of Labor (the
'DOL') has promulgated regulations at 29 C.F.R. Section 2510.3-101 (the 'DOL
REGULATIONS') concerning whether or not a Plan's assets would be deemed to
include an interest in the underlying assets of an entity (such as a Trust), for
purposes of applying the general fiduciary responsibility provisions of ERISA
and the prohibited transaction provisions of ERISA and Section 4975 of the Code,
when a Plan acquires an 'equity interest' (such as a Certificate) in such
entity. Because of the factual nature of certain of the rules set forth in the
DOL Regulations, Plan Assets either may be deemed to include an interest in the
assets of an entity (such as a Trust) or may be deemed merely to include a
Plan's interest in the instrument evidencing such equity interest (such as a
Certificate). Therefore, neither Plans nor such entities should acquire or hold
Certificates in reliance upon the availability of any exception under the DOL
Regulations. For purposes of this section, the term 'plan assets' ('PLAN
ASSETS') or 'assets of a Plan' has the meaning specified in the DOL Regulations
and includes an undivided interest in the underlying assets of certain entities
in which a Plan invests.

     The prohibited transaction provisions of Section 406 of ERISA and Section
4975 of the Code may apply to a Trust and cause the Depositor, the Master
Servicer, the Certificate Administrator, any Servicer, any Subservicer, the
Trustee, the obligor under any credit enhancement mechanism or certain
affiliates thereof to be considered or become Parties in Interest with respect
to an investing Plan (or of a Plan holding an interest in such an entity). If
so, the acquisition or holding of Certificates by or on behalf of the investing
Plan could also give rise to a prohibited transaction under ERISA and/or Section
4975 of the Code, unless some statutory or administrative exemption is
available. Certificates acquired by a Plan would be assets of that Plan. Under
the DOL Regulations, a Trust, including the Mortgage Loans, Contracts, Agency
Securities or any other assets held in such Trust, may also be deemed to be
assets of each Plan that acquires Certificates. Special caution should be
exercised before Plan Assets are used to acquire a Certificate in such
circumstances, especially if, with respect to such Plan Assets, the Depositor,
the Master Servicer, the Certificate Administrator, any Servicer, any
Subservicer, the Trustee, the obligor under any credit enhancement mechanism or
an affiliate thereof either (i) has investment discretion with respect to the
investment of such Plan Assets; or (ii) has authority or responsibility to give
(or regularly gives) investment advice with respect to Plan Assets for a fee
pursuant to an agreement or understanding that such advice will serve as a
primary basis for investment decisions with respect to such Plan Assets.

     Any person who has discretionary authority or control respecting the
management or disposition of Plan Assets, and any person who provides investment
advice with respect to such Plan Assets for a fee (in the manner described
above), is a fiduciary of the investing Plan. If the Mortgage Loans, Contracts,
Agency Securities or any other assets in a Trust were to constitute Plan Assets,
then any party exercising management or discretionary control with respect to
those Plan Assets may be deemed to be a Plan 'fiduciary,' and thus subject to
the fiduciary requirements of ERISA and the prohibited transaction provisions of
ERISA and Section 4975 of the Code with respect to any investing Plan. In
addition, if the Mortgage Loans, Contracts, Agency Securities or any other
assets in a Trust were to constitute Plan Assets, then the acquisition or
holding of Certificates by, or on behalf of a Plan or with Plan Assets, as well
as the operation of such Trust, may constitute or result in a prohibited
transaction under ERISA and the Code.

PROHIBITED TRANSACTION EXEMPTION

     The DOL issued an individual exemption, Prohibited Transaction Exemption
('PTE') 94-29, 59 Fed. Reg. 14674 (March 29, 1994), as amended by PTE 97-34, 62
Fed. Reg. 39021 (July 21, 1997) (the 'EXEMPTION'), to Residential Funding and
certain of its affiliates, which generally exempts from the application of the
prohibited transaction provisions of Section 406 of ERISA, and the excise taxes
imposed on such prohibited transactions pursuant to Section 4975(a) and (b) of
the Code, certain transactions, among others, relating to the servicing and
operation of pools of certain secured obligations, such as Mortgage Loans,
Contracts or Agency Securities, which are held in a trust and the purchase, sale
and holding of pass-through certificates issued by such a trust as to which (i)
the Depositor or any of its affiliates is the sponsor if any entity which has
received from the DOL an individual prohibited transaction exemption which is
similar to the Exemption is the sole underwriter, or manager or co-manager of
the underwriting syndicate or a seller or placement agent, or (ii) the Depositor
or an affiliate is the underwriter or placement agent, provided that certain

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conditions set forth in the Exemption are satisfied. For purposes of this
section, the term 'UNDERWRITER' shall include (a) the Depositor and certain of
its affiliates, (b) any person directly or indirectly, through one or more
intermediaries, controlling, controlled by or under common control with the
Depositor and certain of its affiliates, (c) any member of the underwriting
syndicate or selling group of which a person described in (a) or (b) is a
manager or co-manager with respect to a class of Certificates, or (d) any entity
which has received an exemption from the DOL relating to Certificates which is
similar to the Exemption.

     The Exemption sets forth six general conditions which must be satisfied for
a transaction involving the purchase, sale and holding of Certificates to be
eligible for exemptive relief thereunder. First, the acquisition of Certificates
by a Plan or with Plan Assets must be on terms that are at least as favorable to
the Plan as they would be in an arm's-length transaction with an unrelated
party. Second, the Exemption only applies to Certificates evidencing rights and
interests that are not subordinated to the rights and interests evidenced by the
other Certificates of the same trust. Third, at the time of acquisition by a
Plan or with Plan Assets, the Certificates must be rated in one of the three
highest generic rating categories by Standard & Poor's, a division of The
McGraw-Hill Companies, Inc., Moody's Investors Service, Inc., Duff & Phelps
Credit Rating Co. or Fitch IBCA, Inc. (collectively, the 'EXEMPTION RATING
AGENCIES'). Fourth, the Trustee cannot be an affiliate of any other member of
the 'RESTRICTED GROUP' which consists of any Underwriter, the Depositor, the
Master Servicer, the Certificate Administrator, any Servicer, any Subservicer,
the Trustee and any mortgagor with respect to assets of a Trust constituting
more than 5% of the aggregate unamortized principal balance of the assets in the
related Trust as of the date of initial issuance of the Certificates. Fifth, the
sum of all payments made to and retained by the Underwriters must represent not
more than reasonable compensation for underwriting the Certificates; the sum of
all payments made to and retained by the Depositor pursuant to the assignment of
the assets to the related Trust must represent not more than the fair market
value of such obligations; and the sum of all payments made to and retained by
the Master Servicer, the Certificate Administrator, any Servicer or any
Subservicer must represent not more than reasonable compensation for such
person's services under the related Pooling and Servicing Agreement or Trust
Agreement and reimbursement of such person's reasonable expenses in connection
therewith. Sixth, the Exemption states that the investing Plan or Plan Asset
investor must be an accredited investor as defined in Rule 501(a)(1) of
Regulation D of the Commission under the Securities Act of 1933, as amended. In
addition, except as otherwise specified in the related Prospectus Supplement,
the exemptive relief afforded by the Exemption may not apply to any Certificates
where the related Trust contains a Swap.

     The Exemption also requires that each Trust meet the following
requirements: (i) the Trust must consist solely of assets of the type that have
been included in other investment pools; (ii) certificates evidencing interests
in such other investment pools must have been rated in one of the three highest
categories of one of the Exemption Rating Agencies for at least one year prior
to the acquisition of Certificates by or on behalf of a Plan or with Plan
Assets; and (iii) certificates in such other investment pools must have been
purchased by investors other than Plans for at least one year prior to any
acquisition of Certificates by or on behalf of a Plan or with Plan Assets.

     A fiduciary of or other investor of Plan Assets contemplating purchasing a
Certificate must make its own determination that the general conditions set
forth above will be satisfied with respect to such Certificate.

     If the general conditions of the Exemption are satisfied, the Exemption may
provide an exemption from the restrictions imposed by Sections 406(a) and 407(a)
of ERISA, as well as 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 Certificates by a
Plan or with Plan Assets. However, no exemption is provided from the
restrictions of Sections 406(a)(1)(E) and 406(a)(2) of ERISA for the acquisition
or holding of a Certificate by a Plan or with Plan Assets of an Excluded Plan by
any person who has discretionary authority or renders investment advice with
respect to Plan Assets of such Excluded Plan. For purposes of the Certificates,
an 'EXCLUDED PLAN' is a Plan sponsored by any member of the Restricted Group.

     If certain specific conditions of the Exemption are also satisfied, the
Exemption may provide an exemption from the restrictions imposed by Sections
406(b)(1) and (b)(2) of ERISA, as well as the taxes imposed by Sections 4975(a)
and (b) of the Code by reason of Section 4975(c)(1)(E) of the Code, in
connection with (1) the direct or indirect sale, exchange or transfer of
Certificates in the initial issuance of Certificates between the Depositor or an
Underwriter and a Plan when the person who has discretionary authority or
renders investment

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advice with respect to the investment of the relevant Plan Assets in the
Certificates is (a) a mortgagor with respect to 5% or less of the fair market
value of the assets of a Trust or (b) an affiliate of such a person, (2) the
direct or indirect acquisition or disposition in the secondary market of
Certificates by a Plan or with Plan Assets and (3) the holding of Certificates
by a Plan or with Plan Assets.

     Additionally, if certain specific conditions of the Exemption are
satisfied, the Exemption may provide an exemption from the restrictions imposed
by Sections 406(a), 406(b) and 407(a) of ERISA, as well as 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 Mortgage Pools and Contract Pools. The Depositor expects that the specific
conditions of the Exemption required for this purpose will be satisfied with
respect to the Certificates so that the Exemption would provide an exemption
from the restrictions imposed by Sections 406(a) and (b) of ERISA, as well as
the excise taxes imposed by Sections 4975(a) and (b) of the Code by reason of
Section 4975(c) of the Code, for transactions in connection with the servicing,
management and operation of the Mortgage Pools and Contract Pools, provided that
the general conditions of the Exemption are satisfied.

     The Exemption also may provide an exemption from the restrictions imposed
by Sections 406(a) and 407(a) of ERISA, as well as the taxes imposed by Section
4975(a) and (b) of the Code by reason of Sections 4975(c)(1)(A) through (D) of
the Code, if such restrictions are deemed to otherwise apply merely because a
person is deemed to be a Party in Interest with respect to an investing Plan (or
a Plan holding interests in the investing entity holding Plan Assets) by virtue
of providing services to the Plan or such Plan Assets (or by virtue of having
certain specified relationships to such a person) solely as a result of the
Plan's ownership of Certificates.

     Before purchasing a Certificate, a fiduciary or other investor of Plan
Assets should itself confirm that (a) the Certificates constitute 'certificates'
for purposes of the Exemption and (b) the specific and general conditions set
forth in the Exemption and the other requirements set forth in the Exemption
would be satisfied. In addition to making its own determination as to the
availability of the exemptive relief provided in the Exemption, the fiduciary or
other investor of Plan Assets should consider its general fiduciary obligations
under ERISA in determining whether to purchase any Certificates with Plan
Assets.

     Any fiduciary or other investor of Plan Assets that proposes to purchase
Certificates on behalf of a Plan or with Plan Assets should consult with its
counsel with respect to the potential applicability of ERISA and the Code to
such investment and the availability of the Exemption or any other prohibited
transaction exemption in connection therewith. In particular, in connection with
a contemplated purchase of Certificates representing a beneficial ownership
interest in a pool of single-family residential first Mortgage Loans or Agency
Certificates, such fiduciary or other Plan Asset investor should consider the
availability of the Exemption or Prohibited Transaction Class Exemption ('PTCE')
83-1 ('PTCE 83-1') for certain transactions involving mortgage pool investment
trusts. However, PTCE 83-1 does not provide exemptive relief with respect to
Certificates evidencing interests in Trusts that include Cooperative Loans or
certain types of mortgage securities, or which contain a Swap. In addition, such
fiduciary or other Plan Asset investor should consider the availability of other
class exemptions granted by the DOL, which provide relief from certain of the
prohibited transaction provisions of ERISA and the related excise tax provisions
of Section 4975 of the Code, including Sections I and III of PTCE 95-60,
regarding transactions by insurance company general accounts. The related
Prospectus Supplement may contain additional information regarding the
application of the Exemption, PTCE 83-1, PTCE 95-60 or other DOL class
exemptions with respect to the Certificates offered thereby. There can be no
assurance that any of these exemptions will apply with respect to any particular
Plan's or other Plan Asset investor's investment in the Certificates or, even if
an exemption were deemed to apply, that any exemption would apply to all
prohibited transactions that may occur in connection with such an investment.

INSURANCE COMPANY GENERAL ACCOUNTS

     In addition to any exemptive relief that may be available under PTCE 95-60
for the purchase and holding of the Certificates by an insurance company general
account, the Small Business Job Protection Act of 1996 added a new Section
401(c) to ERISA, which provides certain exemptive relief from the provisions of
Part 4 of Title I of ERISA and Section 4975 of the Code, including the
prohibited transaction restrictions imposed by ERISA and the related excise
taxes imposed by Section 4975 of the Code, for transactions involving an
insurance company general account. Pursuant to Section 401(c) of ERISA, the DOL
issued proposed regulations on

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December 22, 1997, but final regulations (the '401(c) REGULATIONS') have not
been issued as of the date hereof. The 401(c) Regulations are to provide
guidance for the purpose of determining, in cases where insurance policies or
annuity contracts supported by an insurer's general account are issued to or for
the benefit of a Plan on or before December 31, 1998, which general account
assets constitute Plan Assets. Section 401(c) of ERISA generally provides that,
until the date which is 18 months after the 401(c) Regulations become final, no
person shall be subject to liability under Part 4 of Title I of ERISA and
Section 4975 of the Code on the basis of a claim that the assets of an insurance
company general account constitute Plan Assets, unless (i) as otherwise provided
by the Secretary of Labor in the 401(c) Regulations to prevent avoidance of the
regulations or (ii) an action is brought by the Secretary of Labor for certain
breaches of fiduciary duty which would also constitute a violation of federal or
state criminal law. Any assets of an insurance company general account which
support insurance policies or annuity contracts issued to a Plan after December
31, 1998 or issued to Plans on or before December 31, 1998 for which the
insurance company does not comply with the 401(c) Regulations may be treated as
Plan Assets. In addition, because Section 401(c) does not relate to insurance
company separate accounts, separate account assets are still treated as Plan
Assets of any Plan invested in such separate account. Insurance companies
contemplating the investment of general account assets in the Certificates
should consult with their legal counsel with respect to the applicability of
Sections I and III of PTCE 95-60 and Section 401(c) of ERISA, including the
general account's ability to continue to hold the Certificates after the date
which is 18 months after the date the 401(c) Regulations become final.

REPRESENTATION FROM INVESTING PLANS

     The exemptive relief afforded by the Exemption will not apply to the
purchase, sale or holding of any class of Subordinate Certificates or REMIC
Residual Certificates. To the extent Certificates are Subordinate Certificates
or the related Trust contains a Swap, except as otherwise specified in the
related Prospectus Supplement, transfers of such Certificates to a Plan, to a
trustee or other person acting on behalf of any Plan, or to any other person
using Plan Assets to effect such acquisition will not be registered by the
Trustee unless the transferee provides the Depositor, the Trustee and the Master
Servicer with an opinion of counsel satisfactory to the Depositor, the Trustee
and the Master Servicer, which opinion will not be at the expense of the
Depositor, the Trustee or the Master Servicer that the purchase of such
Certificates by or on behalf of such Plan or with Plan Assets is permissible
under applicable law, will not constitute or result in any non-exempt prohibited
transaction under ERISA or Section 4975 of the Code and will not subject the
Depositor, the Trustee or the Master Servicer to any obligation in addition to
those undertaken in the Pooling and Servicing Agreement. In lieu of such opinion
of counsel, except as otherwise specified in the related Prospectus Supplement,
the transferee may provide a certification of facts substantially to the effect
that the purchase of such Certificates by or on behalf of such Plan or with Plan
Assets is permissible under applicable law, will not constitute or result in a
non-exempt prohibited transaction under ERISA or Section 4975 of the Code, will
not subject the Depositor, the Trustee or the Master Servicer to any obligation
in addition to those undertaken in the Pooling and Servicing Agreement, and the
following conditions are met: (a) the source of funds used to purchase such
Certificates is an 'insurance company general account' (as such term is defined
in PTCE 95-60), and (b) the conditions set forth in Sections I and III of PTCE
95-60 have been satisfied as of the date of the acquisition of such
Certificates.

TAX-EXEMPT INVESTORS

     A Plan that is exempt from federal income taxation pursuant to Section 501
of the Code (a 'TAX-EXEMPT INVESTOR') nonetheless will be subject to federal
income taxation to the extent that its income is 'unrelated business taxable
income' ('UBTI') within the meaning of Section 512 of the Code. All 'excess
inclusions' of a REMIC allocated to a REMIC Residual Certificate held by a
Tax-Exempt Investor will be considered UBTI and thus will be subject to federal
income tax. See 'Certain Federal Income Tax Consequences -- Taxation of Owners
of REMIC Residual Certificates -- Excess Inclusions.'

CONSULTATION WITH COUNSEL

     There can be no assurance that the Exemption or any other DOL exemption
will apply with respect to any particular Plan that acquires the Certificates
or, even if all of the conditions specified therein were satisfied, that the
exemption would apply to all transactions involving a Trust. Prospective Plan
investors should consult with

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their legal counsel concerning the impact of ERISA and the Code and the
potential consequences to their specific circumstances prior to making an
investment in the Certificates.

     Any fiduciary or other investor of Plan Assets that proposes to acquire or
hold Certificates on behalf of or with Plan Assets of any Plan should consult
with its counsel with respect to the potential applicability of the fiduciary
responsibility provisions of ERISA and the prohibited transaction provisions of
ERISA and Section 4975 of the Code to the proposed investment and the
availability of exemptive relief under the Exemption, PTCE 83-1, Sections I and
III of PTCE 95-60 or any other DOL class exemption.

                            LEGAL INVESTMENT MATTERS

     Each class of Certificates offered hereby and by the related Prospectus
Supplement will be rated at the date of issuance in one of the four highest
rating categories by at least one Rating Agency. If so specified in the related
Prospectus Supplement, certain classes that are, and continue to be, rated in
one of the two highest rating categories by at least one nationally recognized
statistical rating organization will constitute 'mortgage related securities'
for purposes of the Secondary Mortgage Market Enhancement Act of 1984, as
amended ('SMMEA'), and, as such, will be legal investments for persons, trusts,
corporations, partnerships, associations, business trusts and business entities
(including depository institutions, life insurance companies and pension funds)
created pursuant to or existing under the laws of the United States or of any
State whose authorized investments are subject to state regulation 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 such entities. Under SMMEA, if a State
enacted legislation on or prior to October 3, 1991 specifically limiting the
legal investment authority of any such entities with respect to 'mortgage
related securities,' such securities will constitute legal investments for
entities subject to such legislation only to the extent provided therein.
Certain States enacted legislation which overrides the preemption provisions of
SMMEA. SMMEA provides, however, that in no event will the enactment of any such
legislation affect the validity of any contractual commitment to purchase, hold
or invest in 'mortgage related securities,' or require the sale or other
disposition of such securities, so long as such contractual commitment was made
or such securities acquired prior to the enactment of such legislation.

     SMMEA also amended the legal investment authority of federally-chartered
depository institutions as follows: federal savings and loan associations and
federal savings banks may invest in, sell or otherwise deal with 'mortgage
related securities' without limitation as to the percentage of their assets
represented thereby, federal credit unions may invest in such securities, and
national banks may purchase such securities for their own account without regard
to the limitations generally applicable to investment securities set forth in 12
U.S.C. 'SS' 24 (Seventh), subject in each case to such regulations as the
applicable federal regulatory authority may prescribe.

     On April 23, 1998, the Federal Financial Institutions Examination Council
issued a revised supervisory policy statement (the '1998 POLICY STATEMENT')
applicable to all depository institutions, setting forth guidelines for and
significant restrictions on investments in 'high-risk mortgage securities.' The
1998 Policy Statement has been adopted by the Federal Reserve Board, the Office
of the Comptroller of the Currency, the FDIC and the OTS with an effective date
of May 26, 1998. The 1998 Policy Statement rescinded a 1992 policy statement
that had required, prior to purchase, a depository institution to determine
whether a mortgage derivative product that it was considering acquiring was
high-risk and, if so, required that its acquisition would reduce the
institution's overall interest rate risk. The 1998 Policy Statement eliminated
constraints on investing in certain 'high-risk' mortgage derivative products and
substituted broader guidelines for evaluating and monitoring investment risk.

     The OTS has issued Thrift Bulletin 13a, entitled 'Management of Interest
Rate Risk, Investment Securities, and Derivatives Activities' ('TB 13a'), which
is effective as of December 1, 1998 and applies to thrift institutions regulated
by the OTS. One of the primary purposes of TB 13a is to require thrift
institutions, prior to taking any investment position, to conduct (i) a
pre-purchase portfolio sensitivity analysis for any 'significant transaction'
involving securities or financial derivatives, and (ii) a pre-purchase price
sensitivity analysis of any 'complex security' or financial derivative. For the
purposes of TB 13a, 'complex security' includes, among other things, any
collateralized mortgage obligation or REMIC security, other than any 'plain
vanilla' mortgage pass-through security (that is, securities that are part of a
single class of securities in the related pool that are non-callable and do not
have any special features). One or more classes of Certificates offered hereby
and by the related Prospectus Supplement may be viewed as 'complex securities'.
The OTS recommends that while a thrift

                                       92

<PAGE>
institution should conduct its own in-house pre-acquisition analysis, it may
rely on an analysis conducted by an independent third-party as long as
management understands the analysis and its key assumptions. Further, TB 13a
recommends that the use of 'complex securities with high price sensitivity' be
limited to transactions and strategies that lower a thrift institution's
portfolio interest rate risk. TB 13a warns that investment in complex securities
by thrift institutions that do not have adequate risk measurement, monitoring
and control systems may be viewed by OTS examiners as an unsafe and unsound
practice.

     Prospective investors in the Certificates, including in particular the
classes of Certificates that do not constitute 'mortgage related securities' for
purposes of SMMEA, should consider the matters discussed in the following
paragraph.

     There may be other restrictions on the ability of certain investors either
to purchase certain classes of Certificates or to purchase any class of
Certificates representing more than a specified percentage of the investors'
assets. The Depositor will make no representations as to the proper
characterization of any class of Certificates for legal investment or other
purposes, or as to the ability of particular investors to purchase any class of
Certificates under applicable legal investment restrictions. These uncertainties
may adversely affect the liquidity of any class of 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 own legal advisors in determining whether
and to what extent the Certificates of any class constitute legal investments or
are subject to investment, capital or other restrictions, and, if applicable,
whether SMMEA has been overridden in any jurisdiction relevant to such investor.

                                USE OF PROCEEDS

     Unless otherwise specified in the related Prospectus Supplement,
substantially all of the net proceeds to be received from the sale of
Certificates will be applied by the Depositor to finance the purchase of, or to
repay short-term loans incurred to finance the purchase of, the Mortgage
Collateral underlying the Certificates or will be used by the Depositor for
general corporate purposes. The Depositor expects that it will make additional
sales of securities similar to the Certificates from time to time, but the
timing and amount of any such additional offerings will be dependent upon a
number of factors, including the volume of mortgage loans, contracts or mortgage
securities purchased by the Depositor, prevailing interest rates, availability
of funds and general market conditions.

                            METHODS OF DISTRIBUTION

     The Certificates offered hereby and by the related Prospectus Supplements
will be offered in series through one or more of the methods described below.
The Prospectus Supplement prepared for each series will describe the method of
offering being utilized for that series and will state the net proceeds to the
Depositor from such sale.

     The Depositor intends that 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 a particular
series of Certificates may be made through a combination of two or more of these
methods. Such methods are as follows:

     1. by negotiated firm commitment or best efforts underwriting and public
re-offering by underwriters;

     2. by placements by the Depositor with institutional investors through
dealers; and

     3. by direct placements by the Depositor with institutional investors.

     In addition, if specified in the related Prospectus Supplement, a series of
Certificates may be offered in whole or in part to the Seller of the related
Mortgage Collateral that would comprise the Trust for such Certificates.

     If underwriters are used in a sale of any Certificates (other than in
connection with an underwriting on a best efforts basis), such Certificates will
be acquired by the underwriters for their own account and may be resold from
time to time in one or more transactions, including negotiated transactions, at
fixed public offering prices or at varying prices to be determined at the time
of sale or at the time of commitment therefor. Such underwriters may be
broker-dealers affiliated with the Depositor whose identities and relationships
to the Depositor will be as set forth in the related Prospectus Supplement. The
managing underwriter or underwriters

                                       93




<PAGE>
with respect to the offer and sale of a particular series of Certificates will
be set forth on the cover of the Prospectus Supplement relating to such series
and the members of the underwriting syndicate, if any, will be named in such
Prospectus Supplement.

     In connection with the sale of the Certificates, underwriters may receive
compensation from the Depositor or from purchasers of the Certificates in the
form of discounts, concessions or commissions. Underwriters and dealers
participating in the distribution of the Certificates may be deemed to be
underwriters in connection with such Certificates, and any discounts or
commissions received by them from the Depositor and any profit on the resale of
Certificates by them may be deemed to be underwriting discounts and commissions
under the Securities Act of 1933, as amended.

     It is anticipated that the underwriting agreement pertaining to the sale of
any series of Certificates will provide that the obligations of the underwriters
will be subject to certain conditions precedent, that the underwriters will be
obligated to purchase all such Certificates if any are purchased (other than in
connection with an underwriting on a best efforts basis) and that, in limited
circumstances, the Depositor will indemnify the several underwriters and the
underwriters will indemnify the Depositor against certain civil liabilities,
including liabilities under the Securities Act of 1933, as amended, or will
contribute to payments required to be made in respect thereof.

     The Prospectus Supplement with respect to any series offered by placements
through dealers will contain information regarding the nature of such offering
and any agreements to be entered into between the Depositor and purchasers of
Certificates of such series.

     The Depositor anticipates that the Certificates offered hereby will be sold
primarily to institutional investors or sophisticated non-institutional
investors. Purchasers of Certificates, including dealers, may, depending on the
facts and circumstances of such purchases, be deemed to be 'underwriters' within
the meaning of the Securities Act of 1933, as amended, in connection with
reoffers and sales by them of Certificates. Holders of Certificates should
consult with their legal advisors in this regard prior to any such reoffer or
sale.

                                 LEGAL MATTERS

     Certain legal matters, including certain federal income tax matters, will
be passed upon for the Depositor by Orrick, Herrington & Sutcliffe LLP, New
York, New York, Thacher Proffitt & Wood, New York, New York or Stroock & Stroock
& Lavan LLP, New York, New York, as specified in the Prospectus Supplement.

                             FINANCIAL INFORMATION

     The Depositor has determined that its financial statements are not material
to the offering made hereby. The Certificates do not represent an interest in or
an obligation of the Depositor. The Depositor's only obligations with respect to
a series of Certificates will be to repurchase certain items of Mortgage
Collateral upon any breach of certain limited representations and warranties
made by the Depositor, or as otherwise provided in the applicable Prospectus
Supplement.

                             ADDITIONAL INFORMATION

     The Depositor has filed the Registration Statement with respect to the
Certificates with the Commission. The Depositor is also subject to certain of
the information requirements of the Securities Exchange Act of 1934, as amended
(the 'EXCHANGE ACT'), and, accordingly, will file reports thereunder with the
Commission. The Registration Statement and the exhibits thereto, and reports and
other information filed by the Depositor pursuant to the Exchange Act can be
inspected and copied at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, and at certain of
its Regional Offices located as follows: Chicago Regional Office, Citicorp
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511; and
Northeast Regional Office, 7 World Trade Center, Suite 1300, New York, New York
10048 and electronically through the Commission's Electronic Data Gathering,
Analysis and Retrieval System at the Commission's Web Site (http://www.sec.gov).

                                       94



<PAGE>

                         REPORTS TO CERTIFICATEHOLDERS

     Monthly reports which contain information concerning the Trust Fund for a
series of Certificates will be sent by or on behalf of the Master Servicer or
the Trustee to each holder of record of the Certificates of the related series.
See 'Description of the Certificates -- Reports to Certificateholders.' Reports
forwarded to holders will contain financial information that has not been
examined or reported upon by an independent certified public accountant. The
Depositor will file with the Commission such periodic reports with respect to
the trust for a series of certificates as are required under the Exchange Act.

               INCORPORATION OF CERTAIN INFORMATION BY REFERENCE

     With respect to each series of Certificates offered hereby, there are
incorporated herein and in the related Prospectus Supplement by reference all
documents and reports filed or caused to be filed by the Company pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, prior to the termination
of the offering of the related series of Certificates, that relate specifically
to such series of Certificates. The Depositor will provide or cause to be
provided without charge to each person to whom this Prospectus and related
Prospectus Supplement is delivered in connection with the offering of one or
more classes of such series of Certificates, upon written or oral request of
such person, a copy of any or all such reports incorporated herein by reference,
in each case to the extent such reports relate to one or more of such classes of
such series of Certificates, other than the exhibits to such documents, unless
such exhibits are specifically incorporated by reference in such documents.
Requests should be directed in writing to Residential Accredit Loans, Inc., 8400
Normandale Lake Boulevard, Suite 600, Minneapolis, Minnesota 55437, or by
telephone at (612) 832-7000.

                                       95

<PAGE>
                         INDEX OF PRINCIPAL DEFINITIONS
<TABLE>
<CAPTION>
                                                  PAGE
                                                  ----
<S>                                               <C>
1998 Policy Statement..........................    92
401(c) Regulations.............................    91
Accrual Certificates...........................    19
Additional Collateral..........................     6
Additional Collateral Loan Seller..............     6
Additional Collateral Loans....................     6
Additional Collateral Requirement..............     6
Advance........................................    29
Affiliated Seller..............................    15
Agency Securities..............................     4
Appraised Value................................     8
ARM Loans......................................     8
Balloon Amount.................................     6
Balloon Loans..................................     6
Bankruptcy Amount..............................    38
Bankruptcy Losses..............................    39
Beneficial Owner...............................    20
Bi-Weekly Loans................................     6
Book-Entry Certificates........................    20
Buy-Down Funds.................................     9
Buy-Down Mortgage Loans........................     6
Buy-Down Period................................     9
Call Class.....................................    52
Call Price.....................................    52
Cedel..........................................    19
Cedel Participants.............................    20
CERCLA.........................................    69
Certificate Account............................     4
Certificate Administrator......................     4
Certificate Insurance Policy...................    43
Certificate Registrar..........................    19
Certificateholder..............................    19
Certificates...................................     4
Clearance Cooperative..........................    21
Closing Date...................................    74
Code...........................................    13
Commission.....................................     5
Committee Report...............................    74
Compensating Interest..........................    30
Conservation Act...............................    70
Contract Pool..................................     4
Contract Pool Insurance Policy.................    41
Contracts......................................     4
Contributions Tax..............................    83
Conventional Loans.............................     5
Convertible Mortgage Loan......................     9
Cooperative....................................     6
Cooperative Dwellings..........................     6
Cooperative Loans..............................     6
Cooperative Note...............................    80
Counterparties.................................    45
Credit Scores..................................    10

<CAPTION>
                                                  PAGE
                                                  ----
<S>                                               <C>
Crime Control Act..............................    71
Custodial Account..............................     4
Custodian......................................     5
Cut-off Date...................................     5
Debt Service Reduction.........................    42
Defaulted Mortgage Losses......................    39
Deferred Interest..............................     9
Deficient Valuation............................    42
Depositaries...................................    20
Depositor......................................     4
Determination Date.............................    28
DIDMC..........................................    71
Direct Puerto Rico Mortgage....................    22
Distribution Amount............................    27
Distribution Date..............................    27
DOL............................................    88
DOL Regulations................................    88
DTC............................................    19
DTC Participants...............................    20
Due Date.......................................    28
Due Period.....................................    28
Eligible Account...............................    25
Endorsable Puerto Rico Mortgage................    22
ERISA..........................................    87
ERISA Plans....................................    87
Escrow Account.................................    32
Euroclear......................................    19
Euroclear Operator.............................    21
Euroclear Participants.........................    21
Excess Spread..................................    23
Exchange Act...................................   128
Excluded Plan..................................    89
Excluded Spread................................    23
Exemption......................................    88
Exemption Rating Agencies......................    89
Extraordinary Losses...........................    39
Fannie Mae.....................................     4
Fannie Mae Securities..........................     4
FDIC...........................................    15
FHA............................................     5
FHA Contracts..................................    13
FHA Loans......................................     5
Form 8-K.......................................     5
Fraud Loss Amount..............................    38
Fraud Losses...................................    39
Freddie Mac....................................     4
Freddie Mac Act................................    14
Freddie Mac Securities.........................     4
Garn-St Germain Act............................    66
Ginnie Mae.....................................     4
Ginnie Mae I Certificate.......................    14
Ginnie Mae II Certificate......................    14
</TABLE>

                           96


<PAGE>
<TABLE>
<CAPTION>
                                                  PAGE
                                                  ----

<S>                                               <C>
Ginnie Mae Securities..........................     4
GMAC Mortgage..................................    49
GPM Loans......................................     6
High Cost Loans................................    65
Holder-in-Due-Course...........................    69
Housing Act....................................    13
HUD............................................     5
Index..........................................     8
Indirect Participants..........................    20
Insurance Proceeds.............................    24
International Borrowers........................     6
IRS............................................    74
Issue Premium..................................    79
Letter of Credit...............................    40
Letter of Credit Bank..........................    40
LIBOR..........................................    45
Liquidated Contract............................    36
Liquidated Mortgage Loan.......................    36
Liquidation Proceeds...........................    24
Loan-to-Value Ratio............................     7
Manufactured Home..............................     4
Mark-to-Market Regulations.....................    82
Master Commitments.............................    12
Master Servicer................................     4
Maximum Mortgage Rate..........................     9
MERS...........................................    22
MERS'r'System..................................    22
Mezzanine Certificates.........................    19
Minimum Mortgage Rate..........................     9
Modified Mortgage Loan.........................     7
Mortgage Collateral............................     4
Mortgage Collateral Seller.....................     4
Mortgage Loans.................................     4
Mortgage Note..................................    21
Mortgage Pool..................................     4
Mortgage Pool Insurance Policy.................    40
Mortgaged Properties...........................     4
Mortgage Rates.................................     6
Mortgages......................................     6
Mortgagors.....................................     6
Neg-Am ARM Loans...............................     9
Net Mortgage Rate..............................    53
New Regulations................................    87
Nonrecoverable Advance.........................    26
Note Margin....................................     9
OID Regulations................................    72
OTS............................................    66
Overcollateralization..........................    38
Participants...................................    20
Parties in Interest............................    87
Pass-Through Rate..............................    27
Paying Agent...................................    27
Percentage Interest............................    27
Periodic Cap...................................     9
<CAPTION>
                                                  PAGE
                                                  ----
<S>                                               <C>
Permitted Investments..........................    25
Plan Assets....................................    88
Plans..........................................    87
Pledged Amount.................................     7
Pledged Asset Mortgage Loans...................     6
Pledged Assets.................................     7
Pool Insurer...................................    40
Pooling and Servicing Agreement................     4
Prepayment Interest Shortfall..................    30
Primary Insurance Policy.......................    45
Primary Insurer................................    46
Principal Prepayments..........................    28
Program........................................     5
Program Loans..................................     5
Program Seller.................................    15
Program Seller Guide...........................    12
Prohibited Transactions Tax....................    83
Prospectus Supplement..........................     4
PTCE 83-1......................................    90
PTCE...........................................    90
PTE............................................    88
Puerto Rico Mortgage Loans.....................     4
Purchase Obligations...........................    45
Purchase Price.................................    19
Qualified Insurer..............................    43
Qualified Substitute Contract..................    17
Qualified Substitute Mortgage Loan.............    17
Rating Agency..................................    24
Realized Loss..................................    37
Record Date....................................    27
Registration Statement.........................    19
Relief Act.....................................    70
REMIC..........................................    13
REMIC Certificates.............................    72
REMIC Provisions...............................    72
REMIC Regular Certificates.....................    72
REMIC Regulations..............................    72
REMIC Residual Certificates....................    72
REO Contract...................................    36
REO Mortgage Loan..............................    36
Repurchased Contract...........................    17
Repurchased Mortgage Loan......................    17
Reserve Fund...................................    42
Residential Funding............................     4
Restricted Group...............................    89
RICO...........................................    71
Securities Pool................................     4
Senior Certificates............................    19
Senior Percentage..............................    38
Senior/Subordinate Series......................    19
Servicer.......................................     5
Servicing Advances.............................    26
Servicing Fee..................................    32
Single Certificate.............................    31
</TABLE>

                            97

<PAGE>
<TABLE>
<CAPTION>
                                                  PAGE
                                                  ----
<S>                                               <C>
SMMEA..........................................    92
Special Hazard Amount..........................    37
Special Hazard Insurance Policy................    41
Special Hazard Insurer.........................    41
Special Hazard Losses..........................    39
Special Servicer...............................    34
Stated Principal Balance.......................    38
Strip Certificates.............................    19
Subordinate Certificates.......................    19
Subservicer....................................    31
Subservicing Agreement.........................    31
Surety Bond....................................    43
Swaps..........................................    44
Tax-Exempt Investor............................    91
Tax-Favored Plans..............................    87
TB 13a.........................................    92
<CAPTION>
                                                  PAGE
                                                  ----
<S>                                               <C>
Terms and Conditions...........................    21
Tiered REMICs..................................    73
Title V........................................    66
Title VIII.....................................    67
Trust..........................................     4
Trust Agreement................................     4
Trustee........................................     4
UBTI...........................................    91
UCC............................................    64
Unaffiliated Seller............................    15
Underwriter....................................    89
United States person...........................    86
VA.............................................     5
VA Contracts...................................    13
VA Loans.......................................     5
Yield Supplement Agreements....................    45
</TABLE>

                         98


                        STATEMENT OF DIFFERENCES

The registered trademark symbol shall be expressed as..................'r'






















<PAGE>

                        RESIDENTIAL ACCREDIT LOANS, INC.

                                  $266,622,370


                MORTGAGE ASSET-BACKED PASS-THROUGH CERTIFICATES

                                SERIES 2000-QS9



                             PROSPECTUS SUPPLEMENT



                              SALOMON SMITH BARNEY
                                  UNDERWRITER


YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED OR INCORPORATED BY REFERENCE
IN THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING 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 REPRESENT THE ACCURACY OF THE INFORMATION IN THIS PROSPECTUS SUPPLEMENT AND
THE ACCOMPANYING PROSPECTUS ONLY AS OF THE DATES ON THEIR RESPECTIVE COVERS.

Dealers will be required to deliver a prospectus supplement and prospectus
when acting as underwriters of the certificates offered hereby and with
respect to their unsold allotments or subscriptions. In addition, all
dealers selling the offered certificates, whether or not participating
in this offering, may be required to deliver a prospectus supplement and
prospectus until November 24, 2000.



                           STATEMENT OF DIFFERENCES
                           ------------------------

The registered trademark symbol shall be expressed as ....................'r'
The section symbol shall be expressed as .................................'SS'



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