Citicorp Mortgage Securities Inc – ‘424B3’ on 10/29/96

As of:  Tuesday, 10/29/96   ·   Accession #:  950130-96-4085   ·   File #:  33-66222

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Prospectus   —   Rule 424(b)(3)
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Document/Exhibit                   Description                      Pages   Size 

 1: 424B3       Prospectus                                           108    620K 

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                                                RULE NO. 424(b)(3)
                                                       REGISTRATION NO. 33-66222

SUBJECT TO COMPLETION--DATED OCTOBER 25, 1996 
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A         +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE   +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY  +
+OFFERS TO BUY BE ACCEPTED WITHOUT THE DELIVERY OF A FINAL PROSPECTUS          +
+SUPPLEMENT AND ACCOMPANYING PROSPECTUS. THIS PROSPECTUS SHALL NOT CONSTITUTE  +
+AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE    +
+ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION   +
+OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE    +
+SECURITIES LAWS OF ANY SUCH STATE.                                            +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
PROSPECTUS                                                                      

CITICORP MORTGAGE SECURITIES, INC.
REMIC PASS-THROUGH CERTIFICATES 

 Citicorp Mortgage Securities, Inc. (the "Issuer") may sell from time to time,
on terms to be determined at the time of sale, one or more series (each, a      
"Series") of certificates (the "Certificates") consisting of one or more        
classes (each, a "Class") evidencing ownership interests in a trust (the        
"Trust"), to be created by the Issuer, with respect to which one or more        
elections will be made to treat such Trust, or one or more segregated pools of  
assets within such Trust, as one or more real estate mortgage investment        
conduits (each, a "REMIC") under the Internal Revenue Code of 1986, as it may   
be amended from time to time (the "Code"). The property of each such REMIC will 
consist of a pool of assets (for each Series, a "Pool"), or interests in        
another REMIC consisting of a Pool, comprised primarily of mortgage loans or    
mortgage-backed certificates conveyed to such Trust by the Issuer. Any Class of 
Certificates may be divided into two or more subclasses (each, a "Subclass").   
The Certificates will consist of one or more Classes or Subclasses of regular   
interests (collectively, the "CitiCertificates"), and of one Class or one       
Subclass of residual interests with respect to each Pool (the "Residual         
Certificates"). Each Class or Subclass of Certificates will evidence beneficial 
ownership of a specified percentage (which may be 0%) or portion of future      
interest payments and a specified percentage (which may be 0%) or portion of    
future principal payments on the Mortgage Loans or Mortgage Certificates in the 
related Pool. One or more Classes or Subclasses of CitiCertificates may be      
subject to deferred distribution of interest ("Accrual CitiCertificates"). If   
so specified in the applicable Prospectus Supplement, a Series (a               
"Senior/Subordinated Series") may consist of one or more Classes or Subclasses  
of Certificates subordinate in right of distributions (the "Subordinated        
Certificates") to one or more other Classes or Subclasses (the "Senior          
Certificates"). If so specified in the applicable Prospectus Supplement, in     
addition to or in lieu of subordination, credit support may be provided for any 
Class of Certificates in the form of a guaranty issued by Citicorp or another   
guarantor (a "Guaranty"), letter of credit, mortgage pool insurance policy or   
another form of credit support as described herein and in the applicable        
Prospectus Supplement.                                                          

The applicable Prospectus Supplement will set forth the specific terms of   
each Class and/or Subclass of Certificates offered thereby, including (if       
applicable) the aggregate initial Stated Amount, the Stated Rate and the Last   
Scheduled Distribution Date for each such Class or Subclass; the terms of       
distribution of accrued interest on any Class or Subclass of Accrual            
CitiCertificates; the method used to calculate the aggregate amount of          
distributions in reduction of Stated Amount of any Class or Subclass of         
Certificates required to be made on each Distribution Date and the method of    
allocation thereof; the Distribution Dates; the characteristics of the Mortgage 
Loans or Mortgage Certificates comprising the Pool; whether more than one REMIC 
election will be made; the terms of any special distributions or early          
termination applicable to the Class or Subclass; the terms of any credit        
support provided for a Class or Subclass; the terms of any subordination        
provided in a Senior/Subordinated Series; the method of distribution of the     
Certificates; the terms of any distributions on Residual Certificates; and      
other specific terms of a Class or Subclass.                                    

Each Pool will consist of (i) fixed or adjustable interest rate mortgage    
loans ("Mortgage Loans") (a portion of the interest on each such Mortgage Loan  
may be retained by the Issuer or an affiliate of the Issuer) acquired by the    
Issuer (a) from Citicorp Mortgage, Inc. ("CMI"), Citibank, N.A. ("Citibank") or 
Citibank, Federal Savings Bank ("CFSB") or (b) from CitiMae, Inc. ("CitiMae")   
or one of its affiliates or a seller-servicer approved by CitiMae or one of its 
affiliates (collectively, the "CitiMae Originators") or (c) from another        
affiliate of the Issuer specified in the applicable Prospectus Supplement       
(collectively with CMI, Citibank and CFSB, the "Affiliated Originators") or (d) 
from unaffiliated seller-servicers (the "Third Party Originators" and           
collectively with the Affiliated Originators and the CitiMae Originators, the   
"Originators"), (which Mortgage Loans may be acquired by CMI and then acquired  
from CMI by the Issuer), (ii) mortgage-backed certificates previously issued by 
the Issuer or an affiliate of the Issuer and described in the applicable        
Prospectus Supplement ("Issuer Certificates"), (iii) certificates backed by     
Mortgage Loans (together with Issuer Certificates, "CitiMortgageCertificates"), 
and/or (iv) GNMA Certificates, FNMA Certificates and/or FHLMC Certificates      
(each as defined herein, and collectively, together with                        
CitiMortgageCertificates, the "Mortgage Certificates"), together with certain   
other assets described herein or as otherwise described in the Prospectus       
Supplement. The Mortgage Certificates may be guaranteed as to payment of        
principal and interest to the extent indicated herein and in the related        
Prospectus Supplement. The CitiMortgageCertificates may have the benefit of     
credit support to the extent provided herein and in the related Prospectus      
Supplement.                                                                     

THESE CERTIFICATES DO NOT REPRESENT AN OBLIGATION OF OR INTEREST IN THE     
ISSUER OR ANY OF ITS AFFILIATES EXCEPT AS SET FORTH BELOW. NEITHER THE          
CERTIFICATES, THE CITIMORTGAGE CERTIFICATES NOR THE UNDERLYING MORTGAGE LOANS   
ARE INSURED OR GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED        
STATES.                                                                         

----------  
THESE SECURITIES  HAVE NOT BEEN APPROVED  OR DISAPPROVED BY THE  SECURITIES AND 
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES 
AND EXCHANGE COMMISSION OR ANY  STATE SECURITIES COMMISSION PASSED UPON  THE
ACCURACY OR  ADEQUACY OF THIS PROSPECTUS OR THE  PROSPECTUS SUPPLEMENT. ANY 
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.                     

----------  
The Certificates may be sold by the Issuer through dealers or agents        
designated from time to time, through underwriting syndicates led by one or     
more managing underwriters or through one or more underwriters acting alone.    
See "Plans of Distribution." Affiliates of the Issuer may from time to time act 
as agents or underwriters in connection with the sale of the Certificates.      
Specific information with respect to the terms of offering of the Certificates  
offered thereby is set forth in the Prospectus Supplement.                      

THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE SALES OF CERTIFICATES UNLESS  
ACCOMPANIED BY A PROSPECTUS SUPPLEMENT.                                         

THE DATE OF THIS PROSPECTUS IS         , 1996.

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REPORTS TO CERTIFICATEHOLDERS 

The Issuer will provide or cause to be provided to holders of the           
Certificates (the "Certificateholders") of each Series periodic reports         
concerning the Pool underlying their respective Certificates. See "The Pooling  
Agreements--Reports to Certificateholders."                                     

ADDITIONAL INFORMATION  

Copies of FHLMC's most recent Offering Circular for FHLMC Certificates,     
FHLMC's Information Statement and most recent Supplement to such Information    
Statement and any quarterly report made available by FHLMC can be obtained by   
writing or calling the Investor Inquiry Department at 8200 Jones Branch Drive,  
McLean, Virginia 22102, telephone number (703) 450-3777 or (800) 336-FMPC.      
Copies of FNMA's most recent Prospectus for FNMA Certificates and FNMA's        
annual and quarterly reports as well as other financial information are         
available from the Vice President for Investor Relations of FNMA, 3900          
Wisconsin Avenue, N.W., Washington, D.C. 20016, telephone number (202) 752-     
7115. The Issuer does not and will not participate in the preparation of        
FHLMC's Offering Circulars, Information Statements or any Supplements thereto   
or any of its quarterly reports, FNMA's Prospectuses or any of its reports,     
financial statements or other information or GNMA's annual report.              

AVAILABLE INFORMATION 

The following information is provided if a Guaranty is issued by Citicorp   
and is part of a Pool. Citicorp is subject to the informational requirements    
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and    
in accordance therewith Citicorp currently files reports and other information  
with the Securities and Exchange Commission (the "Commission"). Information as  
of particular dates, concerning directors and officers, their remuneration,     
options granted to them, the principal holders of securities of Citicorp and    
any material interest of such persons in transactions with Citicorp, is         
disclosed in proxy statements distributed to stockholders of Citicorp and       
filed with the Commission. Such reports, proxy statements and other             
information can be inspected and copied at the public reference facilities of   
the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549; Citicorp      
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661; and       
Seven World Trade Center, 13th Floor, New York, New York 10048. Copies of such  
material can be obtained from the Public Reference Section of the Commission    
at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. The      
Commission also maintains a site on the World Wide Web at "http://www.sec.gov"  
at which users can view and download copies of reports, proxy statements and    
other information filed electronically through the Electronic Data Gathering,   
Analysis and Retrieval ("EDGAR") system. Citicorp files such reports, proxy     
statements and other information through the EDGAR system and therefore such    
materials should be available by logging onto the Commission's Web site. The    
Commission maintains computer terminals providing access to the EDGAR system    
at each of the offices referred to above. Such reports, proxy statements and    
other information concerning Citicorp also may be inspected at the offices of   
the New York Stock Exchange, the American Stock Exchange, the Midwest Stock     
Exchange and the Pacific Stock Exchange.                                        

ADDITIONAL DETAILED INFORMATION 

The Issuer intends to offer by subscription detailed mortgage loan          
information in machine readable format updated on a monthly basis (the          
"Detailed Information") with respect to each outstanding Series of              
Certificates. The Detailed Information will reflect payments made on the        
individual mortgage loans, including prepayments in full and in part made of    
such mortgage loans, as well as the liquidation of any such mortgage loans,     
and will identify various characteristics of the mortgage loans. For further    
information regarding the Detailed Information and subscriptions thereto,       
please contact Citicorp Mortgage, Inc., 15851 Clayton Road West, Ballwin,       
Missouri 63011, telephone number (314) 256-6446.                                

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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE 

If a Guaranty is issued by Citicorp and is part of a Pool, the following    
documents filed with the Commission by Citicorp are incorporated as of their    
respective filing dates in this Prospectus by reference:                        

(1) Annual Report and Form 10-K for the fiscal year ended December 31,  
1995, filed pursuant to Section 13 of the Exchange Act;                     

 (2) Financial Reviews and Form 10-Q for the quarters ended March 31, 1996
and June 30, 1996, filed pursuant to Section 13 of the Exchange Act; and    

(3) Current Reports on Form 8-K dated January 16, 1996, April 16, 1996, 
July 22, 1996 and October 15, 1996, filed pursuant to Section 13 of the     
Exchange Act.                                                               

If such a Guaranty is part of a Pool, all reports subsequently filed by     
Citicorp pursuant to Sections 13(a) and (c) of the Exchange Act, any            
definitive proxy or information statements filed pursuant to Section 14 of the  
Exchange Act in connection with any stockholders' meeting and any reports       
filed pursuant to Section 15(d) of the Exchange Act prior to the termination    
of the offering of the Certificates offered hereby shall be deemed to be        
incorporated by reference into this Prospectus and to be a part hereof.         

All documents filed by the Issuer with the Commission on behalf of the Pool 
referred to in the accompanying Prospectus Supplement pursuant to Section       
13(a), 13(c), 14 or 15(d) of the Exchange Act on or after the date of such      
Prospectus Supplement and prior to the termination of any offering of the       
Certificates issued by such Trust shall be incorporated by reference in this    
Prospectus and be a part of this Prospectus from the date of the filing of      
such documents. Any statement contained in a document incorporated by           
reference herein shall be modified or superseded for all purposes of this       
Prospectus to the extent that a statement contained herein (or in the           
accompanying Prospectus Supplement) or in any other subsequently filed          
document which also is incorporated by reference modifies or replaces such      
statement. Any such statement so modified or superseded shall not, except as    
modified or superseded, constitute a part of this Prospectus. Copies of the     
documents incorporated herein by reference will be provided to each person to   
whom this Prospectus is delivered upon written or oral request to Citicorp      
Mortgage Securities, Inc., 909 Third Avenue, New York, New York 10043,          
telephone number (212) 559-6727.                                                

Citicorp will provide without charge to each person, including any          
beneficial owner of Certificates, to whom this Prospectus is delivered, on the  
request of any such person, a copy of any or all of the foregoing documents     
incorporated herein by reference (other than exhibits to such documents).       
Written or telephone requests should be directed to Citicorp, 399 Park Avenue,  
New York, NY 10043, Attention: Investor Relations Department, telephone number  
(212) 559-2718.                                                                 

Each Series of Certificates will be issued under a separate Pooling and     
Servicing Agreement (each a "Pooling Agreement"), between the Issuer and the    
trustee for such Series (the "Trustee"), substantially in one of the forms      
(each, a "Form of Pooling Agreement") filed as an exhibit to the Registration   
Statement of which this Prospectus is a part (the "Registration Statement").    
The summaries of certain provisions of the Certificates and such Form of        
Pooling Agreement included in this Prospectus do not purport to be complete     
and are subject to, and qualified in their entirety by reference to, all of     
the provisions of the Form of Pooling Agreement, and the final Pooling          
Agreement executed in connection with the issuance of a Series. Section         
references herein are references to the Form of Pooling Agreement. When used    
in this Prospectus (as modified by the description in the related Prospectus    
Supplement), the summaries of certain provisions of the Form of Pooling         
Agreement also apply to the form of Pooling Agreement applicable to a Pool of   
Mortgage Loans underlying a CitiMortgageCertificate. Terms used but not         
defined herein have the meanings assigned to them in the Form of Pooling        
Agreement. References herein to the Trustee or the Issuer include, unless       
otherwise specified, any agents acting on behalf of the Trustee or any          
subcontractor of the Issuer, any of which agents or subcontractors may be the   
Issuer or one of its affiliates.                                                

The summaries included in this Prospectus generally describe the            
Certificates and related matters. Such summaries are subject to, and qualified  
in their entirety by reference to, the Prospectus Supplement describing a       

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particular Series. See "Index of Principal Definitions" for a listing of        
principal terms used herein and the page herein on which each such term is      
defined.                                                                        

NO PERSON HAS BEEN AUTHORIZED TO GIVE INFORMATION OR TO MAKE ANY            
REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND ANY            
PROSPECTUS SUPPLEMENT WITH RESPECT HERETO AND, IF GIVEN OR MADE, SUCH           
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON. THIS PROSPECTUS AND ANY  
PROSPECTUS SUPPLEMENT WITH RESPECT HERETO DO NOT CONSTITUTE AN OFFER TO SELL    
OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE              
CERTIFICATES OFFERED HEREBY AND THEREBY AND DO NOT CONSTITUTE AN OFFER OF THE   
CERTIFICATES TO ANY PERSON IN ANY STATE OR OTHER JURISDICTION IN WHICH SUCH     
OFFER WOULD BE UNLAWFUL. THE DELIVERY OF THIS PROSPECTUS AT ANY TIME DOES NOT   
IMPLY THAT INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS       
DATE.                                                                           

DESCRIPTION OF CERTIFICATES 

GENERAL                                                                         

The Certificates are issuable in one or more Series. The Certificates of    
each Series will evidence the entire beneficial ownership interest in the       
Trust as to which one or more elections will be made to treat all or a          
specified portion thereof (as specified in the related Prospectus Supplement)   
as one or more REMICs as defined in Code Section 860D. The Trust will consist   
of (i) such Mortgage Loans or Mortgage Certificates as from time to time are    
subject to the Pooling Agreement; (ii) such funds or assets as from time to     
time are deposited in the Certificate Account as described herein under         
Appendix A: "The Mortgage Loans and CitiMortgageCertificates--Payments on       
Mortgage Loans in Pools"; (iii) property acquired by foreclosure or deed in     
lieu of foreclosure of Mortgage Loans as from time to time are subject to the   
Pooling Agreement; (iv) any combination of Guaranty, letter of credit,          
mortgage pool insurance policy, one or more reserve funds and other form of     
credit support provided for such Series; and (v) any title insurance policy     
and hazard insurance policy maintained with respect to the Mortgaged            
Properties.                                                                     

Each Series will consist of one or more Classes or Subclasses of            
CitiCertificates representing "regular interests" in one or more REMICs within  
the meaning of Code Section 860G(a)(1) and one Class or one Subclass of         
Residual Certificates representing the "residual interest" with respect to      
each REMIC within the meaning of Code Section 860G(a)(2).                       

Each Series of Certificates will consist of Residual Certificates and of    
either (i) a single Class of CitiCertificates, (ii) two or more Classes of      
CitiCertificates, one or more Classes or Subclasses (the "Senior                
Certificates") of which will be senior in right of distributions to one or      
more of the other Classes or Subclasses (the "Subordinated Certificates") to    
the extent described in the related Prospectus Supplement (any such Series, a   
"Senior/Subordinated Series"); (iii) two or more Classes or Subclasses of       
CitiCertificates which differ as to the timing, sequential order, rate or       
amount of distributions of principal or interest or both, or as to which        
distribution of principal or interest or both on any Class or Subclass may be   
made upon the occurrence of specified events, in accordance with a formula or   
schedule, or on the basis of certain types of collections or from designated    
portions of the Pool, which CitiCertificates may be Accrual CitiCertificates;   
or (iv) other types of Classes or Subclasses of CitiCertificates as described   
in the related Prospectus Supplement. Credit support for a Series of            
CitiCertificates may be provided by a Guaranty, letter of credit, mortgage      
pool insurance policy, special hazard insurance policy, bankruptcy bond,        
surety insurance policy or a Reserve Fund as described herein and in the        
related Prospectus Supplement, or by the subordination of one or more Classes   
or Subclasses of CitiCertificates or Residual Certificates as described herein  
and in the related Prospectus Supplement, or by any combination of the          
foregoing. See "Description of Certificates--Credit Support."                   

The Issuer may sell certain Classes or Subclasses of Certificates of a      
Series, including one or more Classes or Subclasses of Subordinated             
Certificates or the Residual Certificates, by means of this Prospectus and a    

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Prospectus Supplement if, at the time of such sale, at least one nationally     
recognized statistical rating                                                   
organization has rated the Classes or Subclasses of Certificates of such        
Series in one of its generic rating categories which signifies investment       
grade. Typically, the four highest categories (within which there may be        
subcategories or gradations indicating relative standing) signify investment    
grade.                                                                          

The Issuer may sell certain Classes or Subclasses of Certificates of a      
Series, including one or more Classes or Subclasses of Subordinated             
Certificates or the one Class or one Subclass of Residual Certificates, in      
privately negotiated transactions exempt from registration under the            
Securities Act of 1933, as amended (the "Securities Act").                      

Unless otherwise specified in the related Prospectus Supplement, the        
CitiCertificates of specified Classes or Subclasses of a Series will be issued  
in the form of book entries on the records of The Depository Trust Company      
("DTC") and participating members thereof.                                      

Interest distributions and distributions in reduction of the Stated Amount  
with respect to Certificates of any Series will be made on the Distribution     
Dates for such Series (i) by check mailed to holders of such Certificates       
registered as such on the applicable Record Date at their addresses appearing   
on the Certificate Register, (ii) upon written request of a Certificateholder   
to the Trustee (or the paying agent), by wire transfer in immediately           
available funds to the account of such Certificateholder provided that such     
Certificateholder holds at least the minimum denomination specified in the      
applicable Prospectus Supplement and Pooling Agreement, or (iii) by such other  
means as are agreed upon by the paying agent and a Certificateholder;           
provided, however, that distributions in reduction of Stated Amount which       
reduce the Stated Amount of a Certificate to zero will be made only upon        
presentation and surrender of such Certificate at the office or agency of any   
paying agent for such Series, unless otherwise specified in the related         
Prospectus Supplement. Notice will be mailed before the Distribution Date on    
which the final distribution in reduction of Stated Amount on any Certificate   
is expected to be made to the holder of such Certificate.                       

The Trustee will include with each distribution on a CitiCertificate a      
statement showing, among other things, the allocation of such distribution to   
interest and reductions of Stated Amount and the remaining Stated Amount of a   
CitiCertificate of each Class or Subclass of that Series in the minimum         
denomination (or minimum permitted increment above such denomination, if less)  
specified in the related Prospectus Supplement (a "Single Certificate"). On     
each Distribution Date before a distribution is first made on a particular      
Class of Accrual CitiCertificates, the Trustee will also furnish to each        
holder of an Accrual CitiCertificate of such Class a statement showing (i) the  
interest accrued during the Interest Accrual Period applicable to such          
Distribution Date, (ii) the amount of accrued interest to be added to the       
Stated Amount thereof and (iii) the Stated Amount of such an Accrual            
CitiCertificate after giving effect to such addition to the Stated Amount       
thereof, in each case for an Accrual CitiCertificate which is a Single          
Certificate. In the case of a Pool that consists of Whole or Partial Pool       
Issuer Certificates, such statement will also show the outstanding and initial  
principal amounts of each such Issuer Certificate.                              

DISTRIBUTIONS TO CERTIFICATEHOLDERS                                             

General                                                                       

Beginning with the month next succeeding the month in which Certificates of 
a Series are originally issued, distributions of principal and interest         
thereon at the Stated Rate will be made on the 25th day of each month, or if    
such day is not a business day, the immediately following business day (each,   
a "Distribution Date"), or on such other date as may be specified in the        
related Prospectus Supplement, to the persons in whose names the Certificates   
are registered at the close of business on the last business day of the         
preceding month (the "Record Date"). Alternatively, if the related Prospectus   
Supplement so provides, distributions will be made at quarterly, semi-annual    
or other intervals, but at least annually. The amount of each distribution      
will be determined on the 18th day of the month of the related Distribution     
Date or, if such 18th day is not a business day, the immediately preceding      
business day (each, a "Determination Date") or such other date as may be        
specified in the related Prospectus Supplement.                                 

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Unless otherwise specified in the related Prospectus Supplement,            
distributions to Certificateholders of a Class or Subclass will be made pro     
rata among Certificateholders of such Class or Subclass. The manner in which    
any available credit support will be allocated among the Classes or Subclasses  
of Certificates in a Series will be specified in the related Prospectus         
Supplement.                                                                     

Distributions in reduction of Stated Amount of and in respect of interest   
on, the Certificates will be made by or on behalf of the Issuer out of, and     
only to the extent of, funds available for such purpose (the "Pool              
Distribution Amount") in the Certificate Account of the related Series. All     
distributions on the Certificates of each Series will be made on each           
Distribution Date for such Series from the Pool Distribution Amount in          
accordance with the terms described herein and in the related Prospectus        
Supplement, and as specified in the related Pooling Agreement.                  

Unless otherwise specified in the related Prospectus Supplement, for each   
Pool consisting of Mortgage Loans, the Pool Distribution Amount for a           
Distribution Date will be equal to the aggregate of all previously              
undistributed proceeds of payments on account of principal, including amounts   
received in respect of credit support, if any, and any payments or other        
recovery of principal on a Mortgage Loan which is received in advance of its    
scheduled due date and is not accompanied by an amount as to interest           
representing scheduled interest for any month subsequent to the month of        
prepayment (each, a "Principal Prepayment"), and interest, including any        
payments made from any related buydown subsidy account, in respect of the       
Mortgage Loans received and posted after the Cut-Off Date and before the        
related Determination Date, except in each case:                                

(i) payments which were due on or before the Cut-Off Date;              

(ii) any Principal Prepayment received during the month of distribution 
and any related payments of interest representing interest for the month of 
distribution or any portion thereof (which will be distributed the next     
month);                                                                     

(iii) payments which represent early receipt of scheduled payments of   
principal and interest due on a date or dates subsequent to the first day   
of the month of distribution;                                               

(iv) that portion of payments on account of interest (including payments
made from a buydown subsidy account established with respect to such        
Mortgage Loans) on the Mortgage Loans in the Pool in excess of interest at  
the Pass-Through Rate;                                                      

 (v) that portion of the proceeds of the liquidation of defaulted Mortgage
Loans which represents servicing compensation to the Issuer and is to be    
paid to the Issuer from the related Certificate Account to the extent       
described in Appendix A: "The Mortgage Loans and CitiMortgageCertificates-- 
Realization Upon Defaulted Mortgage Loans"; and                             

(vi) any other amount not to be included in the Pool Distribution Amount
pursuant to the related Pooling Agreement.                                  

Unless otherwise specified in the related Prospectus Supplement for each    
Pool consisting of Mortgage Certificates, the Pool Distribution Amount for a    
Distribution Date will equal all previously undistributed amounts received as   
principal and interest on such Mortgage Certificates in accordance with their   
terms on or prior to the related Determination Date (or, for                    
CitiMortgageCertificates, the Distribution Date).                               

Distributions of Interest                                                     

Unless otherwise specified in the related Prospectus Supplement, each Class 
or Subclass of Certificates entitled to a distribution of interest will be      
entitled to such interest at a per annum rate (the "Stated Rate") which may be  
fixed or, subject to federal income tax requirements, may vary over the life    
of the Certificates.                                                            

Unless otherwise specified in the related Prospectus Supplement, each Class 
or Subclass of Certificates of a Series, other than Accrual CitiCertificates,   
if any, will be entitled to receive distributions in respect of interest on     
each Distribution Date and will accrue interest on the outstanding Stated       
Amount of each such Class or Subclass of Certificates at the Stated Rate        
(calculated on the basis of a 360-day year of twelve 30-day months) and for     
the periods (each an "Interest Accrual Period") specified in the Prospectus     
Supplement. Accrual CitiCertificates will                                       

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accrue interest as described above but such accrued interest will not be        
distributed until the occurrence of the events specified in the related         
Prospectus Supplement. Prior to such time, the interest accrued but not         
distributed on the Accrual CitiCertificates will be added to the Stated Amount  
thereof on each Distribution Date.                                              

Distributions in Reduction of Stated Amount                                   

Each Certificate entitled to distributions representing principal payments  
on the Mortgage Loans or Mortgage Certificates included in the Pool underlying  
such Series will have a "Stated Amount" which, at any time will equal the       
maximum amount in respect of principal which the holder of such Certificate     
will be entitled to receive out of the future cash flow on the Mortgage Loans   
or the Mortgage Certificates, and other assets, if any, included in the Trust.  
The Prospectus Supplement will specify the method by which the amount of        
distributions in reduction of Stated Amount to be distributed to the            
Certificateholders on each Distribution Date (the "Certificate Distribution     
Amount") will be calculated and the manner in which the Certificate             
Distribution Amount will be allocated among the Classes or Subclasses entitled  
to distributions thereof. Distributions in reduction of the Stated Amount of    
Certificates will be made on each Distribution Date to the holders of the       
Certificates then entitled to receive such distributions until the aggregate    
amount of distributions have reduced the Stated Amount of each Certificate of   
a Class or Subclass to zero. The initial aggregate Stated Amount of all         
Classes or Subclasses of a Series may equal the aggregate outstanding           
principal amount of the related Mortgage Loans or Mortgage Certificates as of   
the applicable Cut-Off Date and, for each Class or Subclass, will be specified  
in the related Prospectus Supplement. Alternatively, the initial aggregate      
Stated Amount of all Classes or Subclasses of a Series of Certificates may      
equal the initial aggregate Pool Value of the related Mortgage Loans or         
Mortgage Certificates as of the applicable Cut-Off Date.                        

The aggregate "Pool Value" of the related Mortgage Loans or Mortgage        
Certificates will be the Stated Amount of the Certificates of that Series       
that, based on certain assumptions and regardless of any prepayments on such    
Mortgage Loans or Mortgage Certificates, can be supported by either the future  
scheduled payments on the Mortgage Loans included in the Pool or the mortgage   
loans underlying the Mortgage Certificates included in the Pool (with interest  
adjusted to the applicable Pass-Through Rate), or the proceeds of the           
Principal Prepayment of such Mortgage Loans or mortgage loans underlying the    
Mortgage Certificates, together with reinvestment income, if any, thereon at    
the rate and for the period specified in the related Prospectus Supplement      
and, if applicable, amounts available to be withdrawn from any Reserve Fund     
for such Series, as further or otherwise specified in the related Prospectus    
Supplement. In calculating Pool Values of Mortgage Certificates and Mortgage    
Loans included in the Pool, future distributions on a Mortgage Loan will be     
determined based on future scheduled payments (after giving effect to any       
Principal Prepayments previously received and posted) on such Mortgage Loan,    
and future distributions on a Mortgage Certificate will be determined either    
as if the underlying mortgage loans constituted a single mortgage loan having   
the highest mortgage rate and longest maturity of any mortgage loan underlying  
such Mortgage Certificate or separately for each mortgage loan underlying such  
Mortgage Certificate. Any similar Mortgage Loans or mortgage loans underlying   
Mortgage Certificates or any Mortgage Certificates that are backed by the same  
pool of mortgage loans, or similar pools of mortgage loans, may be aggregated   
into one or more groups (each, a "Pool Value Group"), each of which will be     
assigned an aggregate Pool Value calculated as if all such Mortgage Loans or    
mortgage loans in, or all mortgage loans underlying all the Mortgage            
Certificates in, the Pool Value Group constituted a single mortgage loan        
having the highest mortgage rate and longest maturity of any such mortgage      
loan for such Pool Value Group. There are a number of alternative means of      
determining the Pool Values of a Mortgage Certificate, Mortgage Loan or Pool    
Value Group, including determinations based on the discounted present value of  
the remaining scheduled distributions thereon and determinations based on the   
relationship between the Pass-Through Rates borne thereby and the Stated Rates  
of the related Series of Certificates.                                          

With respect to any Series as to which the initial Stated Amount of the     
Certificates is calculated on the basis of the Pool Values of the Mortgage      
Loans or the Mortgage Certificates, the Prospectus Supplement for each such     
Series will describe the method or methods (and related assumptions) used to    
determine the Pool Value of the Mortgage Certificates and Mortgage Loans or     
the Pool Value Groups securing such Series. In any event, the aggregate of the  
Pool Values of all the Mortgage Certificates and Mortgage Loans and all the     
Pool Value                                                                      

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Groups included in the Pool for a Series of Certificates will always be at      
least equal to the aggregate Stated Amount of the Certificates of such Series.  
The Certificate Distribution Amount with respect to a Series as to which the    
initial Stated Amount of the Certificates is calculated on the basis of the     
Pool Values of the Mortgage Loans or the Mortgage Certificates will generally   
be calculated on the basis of the decline in the aggregate Pool Values of the   
Mortgage Loans or Mortgage Certificates included in the Pool during the         
related Due Period, or as otherwise described in the related Prospectus         
Supplement.                                                                     

The Stated Amount of a Certificate will decline as a result of distributions
attributable to principal that are made to the holders of the Certificates      
and, to the extent described herein and in the related Prospectus Supplement,   
as a result of losses on the Mortgage Loans or Mortgage Certificates in the     
related Pool, to the extent that the credit support (including the amount of    
subordination provided to Senior Certificates in a Senior/Subordinated Series)  
provided for such Class or Subclass of Certificate is inadequate to cover such  
losses. The Stated Amount of a Certificate may increase in the case of Accrual  
CitiCertificates by interest accrued but not then distributable on such         
Accrual CitiCertificates, or, to the extent that a Pool consists of adjustable  
rate mortgages which provide for limitations on the amount by which monthly     
payments by a Mortgagor may be increased and changes in the interest rate on    
the Mortgage Loan are made more frequently than changes in the payment, if an   
increase in the interest rate on the Mortgage Loan is not covered by the        
amount of the related scheduled monthly payment.                                

The aggregate amount which will be distributed in reduction of Stated Amount
to holders of CitiCertificates of each Series then entitled thereto on any      
Distribution Date for such Series will equal, to the extent funds are           
available, the sum of (i) the aggregate Certificate Distribution Amount, (ii)   
the amount of interest, if any, accrued on any Accrual CitiCertificates of      
such Series during the related Interest Accrual Period but not then required    
to be distributed, such amount being added to the Stated Amount thereof, (iii)  
the applicable percentage of the Spread, if any, specified in the Prospectus    
Supplement and (iv) any amounts in reduction of Stated Amount previously        
distributable but not yet distributed.                                          

Unless otherwise specified in the related Prospectus Supplement, in the case
of CitiCertificates of any Series consisting of more than one Class, if the     
Amount Available under the credit support (including the amount of any          
subordination provided to Senior Certificates in a Senior/Subordinated Series)  
provided for such Series is inadequate to cover any loss on the Mortgage Loans  
with the result that there are insufficient funds on deposit in the             
Certificate Account on the next succeeding Distribution Date to pay the amount  
then distributable to any Class of CitiCertificates then entitled to receive    
distributions in reduction of Stated Amount (a "Loss Allocation Event"), then   
the amount then available for distribution in reduction of Stated Amount on     
such Distribution Date and each subsequent Distribution Date will be            
distributed on such Distribution Date pro rata to the holders of                
CitiCertificates of a Class then outstanding notwithstanding any priorities     
among Subclasses of such Class of CitiCertificates set forth in the related     
Prospectus Supplement and pro rata to the holders of each Class of              
CitiCertificates based on the outstanding Stated Amount of all Classes of       
CitiCertificates then outstanding. Any shortfalls of interest will be           
allocated on a pro rata basis based on the amount of interest then              
distributable (or allocable, in the case of each Class of Accrual               
CitiCertificates) to each Class. On or after the Distribution Date on which a   
Loss Allocation Event occurs, the Stated Amount of all Classes then             
outstanding will be reduced on a pro rata basis by the amount of any losses     
actually incurred with respect to the Mortgage Loans.                           

Funds available for distribution from the Certificate Account on a          
Distribution Date will include distributions on Mortgage Certificates in the    
Pool received in the related Due Period and payments received with respect to   
Mortgage Loans in the Pool in the related Due Period, as described herein. See  
Appendix A: "The Mortgage Loans and CitiMortgageCertificates--Payments on       
Mortgage Loans in Pools." Amounts remaining in the Certificate Account which    
are available for distribution, as so described, after payment of all amounts   
due to holders of CitiCertificates, and after payment of certain expenses       
therefrom, will be distributed to holders of Residual Certificates on a pro     
rata basis.                                                                     

The "Spread" with respect to a Distribution Date for a Series will be the   
excess of (a) the sum of (i) all distributions received on the Mortgage         
Certificates or Mortgage Loans (net of (1) any Servicing Compensation, and (2)  
in the case of Mortgage Loans, any distributions on such Mortgage Loans         
representing the receipt of (A)                                                 

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scheduled payments of principal and interest due on a date subsequent to the    
period (a "Due Period") beginning at the close of business on the last day of   
the preceding Due Period (or, in the case of the first Due Period, beginning    
at the close of business on the Cut-Off Date) and ending at the close of        
business on the business day preceding the Determination Date in respect of     
such Distribution Date, and (B) Principal Prepayments received during the       
month of the applicable Determination Date) included in the Pool for such       
Series in the Due Period preceding such Distribution Date, and, in the case of  
the first Due Period, any amount deposited in the Certificate Account on the    
Closing Date, (ii) income from reinvestment, if any, of such net distributions  
and any amount on deposit in the Reserve Fund and (iii) to the extent           
specified in the related Prospectus Supplement, the amount of cash withdrawn    
from any Reserve Fund or buydown subsidy account since the preceding            
Distribution Date for such Series (or since the Closing Date in the case of     
the first Distribution Date for such Series) and required to be deposited in    
the Certificate Account for such Series, over (b) the sum of (i) all interest   
distributed on the CitiCertificates of such Series or added to the Stated       
Amount of the Accrual CitiCertificates of such Series on such Distribution      
Date, (ii) the aggregate Certificate Distribution Amount for such Series with   
respect to such Distribution Date, (iii) if applicable to such Series, any      
Special Distributions in respect of such Series made since the preceding        
Distribution Date for such Series (or since the Closing Date in the case of     
the first Distribution Date for such Series), (iv) any reimbursements of        
payments under any credit support for such Series or Voluntary Advances with    
respect to such Distribution Date, (v) any amounts paid to the issuer of        
credit support and (vi) any REMIC Servicing Fee payable during the Due Period   
preceding such Distribution Date.                                               

Series of CitiCertificates having other than monthly Distribution Dates may 
receive special distributions ("Special Distributions") with respect to any     
period for which distributions are received on the related Mortgage Loans or    
Mortgage Certificates, other than such periods which include Distribution       
Dates, if, as a result of principal prepayments on the mortgage loans           
underlying the Mortgage Certificates or on the Mortgage Loans in the Pool for   
such Certificates or low reinvestment yields, or both, the Trustee determines,  
based on assumptions as to timing of receipt of distributions, reinvestment     
income and prepayment rates, among others, specified in the Pooling Agreement,  
that the amount of cash anticipated to be on deposit in the Certificate         
Account for such Series on the earlier of the next Distribution Date or the     
second succeeding Distribution Date for such Series may be less than the sum    
of interest distributions and distributions in reduction of Stated Amount that  
would be made on such date if it were a Distribution Date. Special              
Distributions on the CitiCertificates of a Series will be allocated in the      
same manner as would distributions on the next Distribution Date for such       
Series.                                                                         

CREDIT SUPPORT                                                                  

General                                                                       

Credit support may be provided with respect to one or more Classes or       
Subclasses of CitiCertificates or with respect to the assets in the related     
Trust. Credit support may be in the form of the subordination of one or more    
Classes or Subclasses of CitiCertificates of such Series to one or more other   
Classes or Subclasses of CitiCertificates, a limited guaranty issued by         
Citicorp or another guarantor, a letter of credit, a mortgage pool insurance    
policy, a special hazard insurance policy, a bankruptcy bond, a surety policy,  
the establishment of one or more reserve funds or any other form of credit      
support described in the applicable Prospectus Supplement, or any combination   
of the foregoing. Unless otherwise specified in the Prospectus Supplement,      
credit support will not provide protection against all risks of loss and will   
not guarantee repayment of the entire Stated Amount of the CitiCertificates     
and interest thereon. If losses occur which exceed the amount covered by        
credit support or which are not covered by the credit support, holders of the   
CitiCertificates will bear their allocable share of such deficiencies as        
described in the related Prospectus Supplement.                                 

Subordination                                                                 

If so specified in the related Prospectus Supplement, credit support for one
or more Classes or Subclasses of Senior Certificates in a Senior/Subordinated   
Series may include one or more Classes or Subclasses of Subordinated            
Certificates, such that distributions in respect of Scheduled Principal,        
Principal Prepayments, interest or any combination thereof that otherwise       
would have been payable to one or more Classes or Subclasses of Subordinated    
Certificates will instead be payable to holders of one or more Classes or       
Subclasses of Senior                                                            

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Certificates under the circumstances and to the extent specified in the         
related Prospectus Supplement. Such subordination provisions will have the      
effect of accelerating the amortization of the Senior Certificates and          
increasing the respective percentage ownership interest evidenced by the        
Subordinated Certificates in the related Trust, as well as preserving the       
availability of the subordination provided by the Subordinated Certificates.    

If so specified in the related Prospectus Supplement, delays in receipt of  
Scheduled Principal and losses on defaulted Mortgage Loans or mortgage loans    
underlying the Mortgage Certificates will be borne first by the various         
Classes or Subclasses of Subordinated Certificates under the circumstances and  
subject to the limitations specified in the related Prospectus Supplement,      
which will have the effect of increasing the respective percentage ownership    
interest of the Senior Certificates in the Trust. The aggregate distributions   
in respect of delinquent Scheduled Principal and the aggregate losses in        
respect of defaulted Mortgage Loans or mortgage loans underlying Mortgage       
Certificates which must be borne by each Class or Subclass of Subordinated      
Certificates at any one time or over the lives of the Certificates by virtue    
of the subordination and the amount of the distributions otherwise              
distributable to the Subordinated Certificateholders that will be               
distributable to the Senior Certificateholders on any Distribution Date may be  
limited as specified in the Prospectus Supplement (the "Subordination           
Amount"). If the aggregate distributions in respect of delinquent Scheduled     
Principal and/or the aggregate losses in respect of defaulted Mortgage Loans    
or mortgage loans underlying Mortgage Certificates were to exceed the total     
amounts payable and available for distribution to the Subordinated              
Certificateholders or, if applicable, were to exceed the specified maximum      
Subordination Amount, holders of the Senior Certificates could experience       
losses.                                                                         

The protection afforded to the Senior Certificateholders by the preferential
right of the Senior Certificateholders to receive current distributions from    
the Pool may be enhanced to the extent specified in the related Prospectus      
Supplement by the establishment and maintenance of one or more reserve          
accounts (each a "Subordination Reserve Fund") funded by the retention of all   
or any portion of distributions otherwise distributable to the holders of the   
Subordinated Certificates on any Distribution Date, by all or a portion of the  
Spread and/or by an initial deposit of the Issuer. Unless otherwise specified   
in the related Prospectus Supplement, the Subordination Reserve Fund will be    
included in the Trust. If specified in the Prospectus Supplement relating to a  
Series of Certificates, the Subordination Reserve Fund may be funded in any     
other manner acceptable to the rating agencies rating the Series of             
Certificates and consistent with an election to treat the Trust (or one or      
more segregated pools of assets therein) for such Series as one or more REMICs  
(as the case may be).                                                           

Eligible Investments for monies deposited in the Subordination Reserve Fund 
will be specified in the applicable Pooling Agreement and, unless otherwise     
provided in the related Prospectus Supplement, will mature no later than the    
next Distribution Date.                                                         

Holders of Subordinated Certificates of a Series will not be required to    
refund any amounts which have been properly distributed to them, regardless of  
whether there are sufficient funds to distribute to Senior Certificateholders   
the amounts to which they are later entitled.                                   

Limited Guaranty                                                              

If so specified in the Prospectus Supplement relating to a Series of        
Certificates, credit support may be provided by a Guaranty of Citicorp or       
another guarantor specified in such Prospectus Supplement. The coverage,        
amount and frequency of any reduction in coverage provided by a Guaranty will   
be set forth in the Prospectus Supplement relating to such Series.              

Letter of Credit                                                              

If so specified in the Prospectus Supplement relating to a Series of        
Certificates, credit support may be provided by the issuance of a letter of     
credit by the bank or financial institution specified in the applicable         
Prospectus Supplement. The coverage, amount and frequency of any reduction in   
coverage provided by a letter of credit issued with respect to a Series of      
Certificates will be set forth in the Prospectus Supplement relating to such    
Series.                                                                         

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Reserve Fund                                                                  

If so specified in the Prospectus Supplement relating to a Series of        
Certificates, a reserve fund (the "Reserve Fund") may be established with the   
Trustee by the Issuer. The manner of the funding of the Reserve Fund and the    
amount required from time to time to be on deposit therein will be set forth    
in the Prospectus Supplement.                                                   

Pool Insurance Policies                                                       

If so specified in the Prospectus Supplement relating to a Series of        
Certificates, the Issuer will obtain a pool insurance policy for the Mortgage   
Loans in the related Pool. The pool insurance policy will cover any loss        
(subject to the limitations described in a related Prospectus Supplement) by    
reason of default to the extent a related Mortgage Loan is not covered by any   
primary mortgage insurance policy. The amount and principal terms of any such   
coverage will be set forth in the Prospectus Supplement.                        

Special Hazard Insurance Policies                                             

If so specified in the related Prospectus Supplement, for each Series of    
Certificates as to which a pool insurance policy is provided, the Issuer will   
also obtain a special hazard insurance policy for the related Pool in the       
amount set forth in such Prospectus Supplement. The special hazard insurance    
policy will, subject to the limitations described in the applicable Prospectus  
Supplement, protect against loss by reason of damage to Mortgaged Properties    
caused by certain hazards not insured against under the standard form of        
hazard insurance policy for the respective states in which the Mortgaged        
Properties are located. The amount and principal terms of any such coverage     
will be set forth in the Prospectus Supplement.                                 

Mortgagor Bankruptcy Bond                                                     

If so specified in the applicable Prospectus Supplement, losses resulting   
from a bankruptcy proceeding relating to a mortgage affecting the Mortgage      
Loans in a Pool with respect to a Series of Certificates will be covered under  
a mortgagor bankruptcy bond (or any other instrument that will not result in a  
downgrading of the rating of the Certificates of a Series by the rating agency  
or rating agencies that rated such Series). Any mortgagor bankruptcy bond or    
such other instrument will provide for coverage in an amount meeting the        
criteria of the rating agency or rating agencies rating the Certificates of     
the related Series, which amount will be set forth in the related Prospectus    
Supplement. The amount and principal terms of any such coverage will be set     
forth in the Prospectus Supplement.                                             

Draws Under Credit Support Other Than Subordination                           

The obligation of the issuer of credit support to make payments under such  
credit support for the benefit of holders of Certificates shall be limited at   
any time to the amount available (the "Amount Available") at such time. The     
initial Amount Available shall be equal to the percentage specified in the      
Prospectus Supplement of the aggregate Adjusted Balance (as defined in          
Appendix A) of the related Mortgage Loans as of the applicable Cut-Off Date     
(the "Credit Support Percentage"). The Amount Available to be paid under any    
credit support may be subject to reduction commencing at the times and in the   
amounts described in the applicable Prospectus Supplement and Pooling           
Agreement. In addition, the Amount Available to be paid under any credit        
support for losses or delinquencies arising from certain causes may be limited  
to the extent set forth in the related Prospectus Supplement. To the extent     
set forth in the applicable Prospectus Supplement and in the event that more    
than one series of CitiMortgageCertificates underlies a Series of               
Certificates, credit support may cover two or more of the series of such        
CitiMortgageCertificates. This may be accomplished by the credit support on     
the individual series of CitiMortgageCertificates being consolidated or by      
credit support which relates to more than one of the series of                  
CitiMortgageCertificates and provides coverage for all such series of           
CitiMortgageCertificates up to the Credit Support Percentage specified in the   
Prospectus Supplement of the aggregate Adjusted Balance of the Mortgage Loans   
underlying such CitiMortgageCertificates.                                       

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The Issuer or the Servicer will be required to determine as of each         
Determination Date whether a payment under any credit support will be           
necessary on the next Distribution Date. The Issuer or the Servicer will        
advise the Trustee of such determination and make a demand for payment under    
the credit support to the issuer of credit support in accordance with the       
provisions of the credit support and the applicable Pooling Agreement, as       
described in the related Prospectus Supplement. The proceeds of such payments   
under the credit support will be deposited into the Certificate Account.        
Unless otherwise specified in the related Prospectus Supplement, payments       
received under the credit support will be applied first to reimburse Voluntary  
Advances.                                                                       

Payments made by an issuer of credit support pursuant to its obligations    
under the credit support to cover delinquencies will be allocated on a loan-    
by-loan basis to specific Mortgage Loans, and the payments will be reimbursed,  
as the specific Mortgagors make their delinquent payments, by monthly           
withdrawals from the Certificate Account as such delinquent installments are    
received. Remaining obligations under the credit support will be increased as   
such payments are reimbursed. In addition, payments made under the credit       
support to cover amounts in respect of interest distributed (but not received)  
with respect to Principal Prepayments will be reimbursed to the issuer of       
credit support from Servicing Compensation otherwise payable to the Issuer or   
the Servicer. The credit support will be increased to the extent of such        
reimbursement.                                                                  

If any Mortgage Loans become Liquidating Loans, the issuer of credit support
may, if so specified in the related Prospectus Supplement, be obligated to      
purchase from the Trustee such Liquidating Loans up to the amount of the        
remaining obligation under the credit support. The Servicer may make an         
advance of a payment (a "Purchase Amount Advance") in respect of a Liquidating  
Loan on behalf of the issuer of credit support in order to avoid demands or     
draws under such credit support. If at any time the issuer of credit support    
makes a payment or the Servicer makes a payment on its behalf in the amount of  
the full outstanding principal balance of and accrued interest on a             
Liquidating Loan (less any unreimbursed payments previously made under the      
credit support in respect of such Liquidating Loan), the issuer of credit       
support (or its designee) will be entitled to receive an assignment of such     
Liquidating Loan, and the issuer of credit support (or such designee) will      
thereafter own such Liquidating Loan free of any further obligation with        
respect thereto. Payments made with respect to such a Liquidating Loan will be  
reimbursed only from the proceeds (net of liquidation costs) of such            
Liquidating Loan. The remaining obligations under the credit support will be    
increased to the extent such payments are so reimbursed. To the extent the      
proceeds of liquidation of any Liquidating Loan acquired by the issuer of       
credit support in the manner described in this paragraph exceed the amount of   
payments made with respect thereto, in the case of a Guaranty issued by         
Citicorp, Citicorp will be entitled to retain such proceeds and in the case of  
other credit support, the Servicer will be entitled to such proceeds unless     
otherwise specified in the related Prospectus Supplement.                       

The term "Liquidating Loan" means: (a) each Mortgage Loan with respect to   
which foreclosure proceedings have been commenced (and the Mortgagor's right    
of reinstatement or redemption has expired), (b) each Mortgage Loan with        
respect to which the Issuer or the Servicer has agreed to accept a Transfer     
Instrument in lieu of foreclosure and in whole or partial satisfaction of the   
Mortgage Loan, and, if the Pool contains Cooperative Loans, Liquidating Loan    
will mean not only each Cooperative Loan as to which (a) or (b) is applicable   
but also (c) each Cooperative Loan with respect to which none of the interest   
or principal installments which became due and payable during the previous six  
months have been paid and (d) each Cooperative Loan with respect to which a     
court of competent jurisdiction has entered a final judgment reducing the       
scheduled monthly principal or interest installment payable on such             
Cooperative Loan. See Appendix A: "The Mortgage Loans and                       
CitiMortgageCertificates--Realization Upon Defaulted Mortgage Loans."           

If any Mortgage Loans become Liquidated Loans, the issuer of credit support 
may, if so specified in the Prospectus Supplement be obligated to pay the       
amount of any loss on such Liquidated Loan up to the amount of the remaining    
obligation under the credit support. The amount of any loss on a Liquidated     
Loan is equal to the excess of (a) the unpaid principal balance of such         
Liquidated Loan plus accrued interest thereon over (b) the liquidation          
proceeds, net of liquidation expenses, received with respect thereto. In the    
event that the amount of such a loss is not covered, in whole or in part, by    
any credit support, the loss will be allocated among the Certificates as        
specified in the related Prospectus Supplement.                                 

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The term "Liquidated Loan" means a Mortgage Loan with respect to which the  
related Mortgaged Property has been acquired, liquidated or foreclosed and      
with respect to which the Servicer or the Master Servicer, as the case may be,  
determines that all liquidation proceeds which it expects to recover have been  
recovered, or a Mortgage Loan with respect to which the related Mortgaged       
Property is retained or sold by the Mortgagor and for which the Servicer or     
the Master Servicer, as the case may be, has accepted payment from the          
Mortgagor in consideration for the release of the Mortgage in an amount which   
is less than the outstanding principal balance of such Mortgage Loan as a       
result of a determination by the Servicer or the Master Servicer, as the case   
may be, that the potential liquidation expenses with respect to such Mortgage   
Loan would exceed the amount by which the cash portion of such payment is less  
than the outstanding principal balance of such Mortgage Loan. See Appendix A:   
"The Mortgage Loans and CitiMortgageCertificates--Realization Upon Defaulted    
Mortgage Loans."                                                                

Prospective purchasers of Certificates must, in the event of default by     
Mortgagors, look to the credit of the issuer of credit support, to the extent   
of its obligations under the credit support. If the Amount Available under a    
credit support is exhausted, the Certificateholders of the related Series will  
bear all risks of delinquency and loss resulting from defaults by Mortgagors    
(including losses not covered by primary mortgage insurance) and from hazard    
losses not covered by the standard hazard insurance policies required to be     
maintained by the Mortgagors, and the Certificateholders must look primarily    
to the value of the properties securing defaulted Mortgage Loans for recovery   
of the outstanding principal and unpaid interest. See Appendix A: "The          
Mortgage Loans and CitiMortgageCertificates--Certain Legal Aspects of the       
Mortgage Loans." None of the issuer of any credit support, the Issuer nor the   
Servicer intends to advance its own funds with respect to any Series of         
Certificates or series of CitiMortgageCertificates, except (i) in the case of   
the issuer of credit support, to the limited extent of its obligations under    
such credit support and (ii) in the case of the Issuer or the Servicer, in      
certain circumstances involving recoverable costs of restoration of damaged     
property, as described under Appendix A: "The Mortgage Loans and                
CitiMortgageCertificates--Realization Upon Defaulted Mortgage Loans," and       
certain other costs as described therein under "--Servicing and Other           
Compensation and Payment of Expenses," and to make Voluntary Advances to the    
extent set forth in the related Prospectus Supplement.                          

LAST SCHEDULED DISTRIBUTION DATE                                                

The "Last Scheduled Distribution Date" for each Class of CitiCertificates of
a Series is the latest date on which (based on the assumptions set forth in     
the related Prospectus Supplement) the Stated Amount of such Class is expected  
to be reduced to zero. Since the rate of distributions in reduction of Stated   
Amount for each Series will depend on, among other things, the rate of payment  
(including prepayments) of the principal of the mortgage loans (which include,  
for purposes of this subsection, Mortgage Loans included directly in the Pool   
and mortgage loans underlying Mortgage Certificates) in the Pool for such       
Series, the actual last Distribution Date for any Class of CitiCertificates     
could occur significantly earlier than its Last Scheduled Distribution Date.    

The rate of payments on the Mortgage Loans in the Pool for any Series will  
depend on their particular characteristics, as well as on the prevailing level  
of interest rates from time to time and other economic factors, and no          
assurance can be given as to the actual prepayment experience of such mortgage  
loans. See Appendix A: "The Mortgage Loans and CitiMortgageCertificates--       
Prepayment Experience."                                                         

Weighted average life refers to the average amount of time that will elapse 
from the date of issuance of a Certificate until the Stated Amount of such      
Certificate has been reduced to zero. The weighted average life of the          
Certificates of a Series will be influenced by, among other things, the rate    
at which principal on the mortgage loans (which include, for purposes of this   
subsection, Mortgage Loans included directly in the Pool and mortgage loans     
underlying Mortgage Certificates) underlying or included in the Pool for such   
Certificates is paid, which may be in the form of scheduled amortization or     
prepayments (including prepayments and liquidations due to default, casualty,   
receipt of insurance proceeds, condemnation and the like).                      

Prepayments on mortgage loans are commonly measured relative to a prepayment
standard or model. Each Prospectus Supplement for CitiCertificates of any       
Series consisting of more than one Class of CitiCertificates will describe the  
payment standard or model used for the related Series and will contain tables   
setting forth the                                                               

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projected weighted average life of each Class of CitiCertificates of such       
Series and, to the extent distributions are not made pro rata among all         
Classes of CitiCertificates of such Series, the percentage of the Initial       
Stated Amount of each Class of CitiCertificates of such Series that would be    
outstanding on specified Distribution Dates for such Series based on the        
assumptions stated in such Prospectus Supplement, including assumptions that    
prepayments on the mortgage loans underlying or included in the Pool are made   
at rates corresponding to various percentages of the prepayment standard or     
model specified in such Prospectus Supplement.                                  

There is, however, no assurance that prepayment of mortgage loans underlying
or included in the Pool for any Series of Certificates will conform to any      
prepayment standard or model. The rate of principal prepayments on pools of     
mortgage loans is influenced by a variety of economic, geographic, social and   
other factors. In general, however, if prevailing interest rates fall           
significantly below the interest rates on the mortgage loans underlying or      
included in the Pool for a Series of Certificates, such mortgage loans are      
likely to be the subject of higher principal prepayments than if prevailing     
rates remain at or above the rates borne by such mortgage loans. It should be   
noted that certain Mortgage Certificates included in a Pool for a Series of     
Certificates may be backed by mortgage loans with different interest rates.     
Accordingly, the prepayment experience of these Mortgage Certificates will to   
some extent be a function of the mix of interest rates of the mortgage loans    
underlying such Mortgage Certificates. Furthermore, the stated pass-through     
rate of certain Mortgage Certificates may be two or more percentage points      
less than the Note Rates of the underlying mortgage loans. Other factors        
affecting prepayment of mortgage loans include changes in mortgagors' housing   
needs, job transfers, unemployment, mortgagors' net equity in the properties    
securing the mortgage loans and servicing decisions.                            

RESIDUAL CERTIFICATES                                                           

The Residual Certificates will represent "residual interests" in a REMIC    
within the meaning of Code Section 860G(a)(2). See "Certain Federal Income Tax  
Consequences." A Class of Residual Certificates with respect to a Pool will be  
issued simultaneously with the CitiCertificates of a Series. Such Residual      
Certificates may be sold together with or separately from such                  
CitiCertificates or may be retained, in whole or in part, by the Issuer or the  
related Originators and will represent the right to receive distributions as    
specified in the related Prospectus Supplement. In addition, at such time as    
the Stated Amount of each Class of CitiCertificates of such Series has been     
reduced to zero, the holders of the Residual Certificates will be the sole      
owners of each Pool and will have sole rights with respect to the Mortgage      
Certificates, Mortgage Loans and other assets included in such Pool, including  
the right to liquidate such Pool.                                               

THE SERVICER                                                                    

For each Series of Certificates, the Issuer will act as servicer (in such   
capacity, the "Servicer" or "servicer") with respect to Mortgage Loans          
purchased, directly or indirectly, by the Trust from CMI, Citibank or CFSB or   
their affiliates (the "Affiliated Originators" and such Mortgage Loans being    
herein referred to as "Affiliated Mortgage Loans") and, as master servicer (in  
such capacity, the "Servicer" or "master servicer") with respect to Mortgage    
Loans purchased, directly or indirectly, by the Trust (a) from CitiMae or its   
affiliates who purchased such mortgage loans from seller-servicers approved by  
CitiMae or from such seller-servicers ("CitiMae Originators" and such Mortgage  
Loans being herein referred to as "CitiMae Mortgage Loans"), or (b) from Third  
Party Originators, and will perform such functions as are described in the      
Pooling Agreement. The Issuer may delegate any of its duties under the Pooling  
Agreement to any corporation, including a corporation more than 50% of the      
stock of which is owned, directly or indirectly, by Citicorp. Unless otherwise  
disclosed in the related Prospectus Supplement, if the Mortgage Loans are       
included directly in the Pool, the Issuer intends to subcontract its duties as  
servicer with respect to the Affiliated Mortgage Loans to CMI (or its           
designated subservicer) and its duties as master servicer (a) with respect to   
the CitiMae Mortgage Loans, to CitiMae and (b) with respect to Mortgage Loans   
originated by Third Party Originators ("Third Party Loans") and sold by them    
on a servicing-retained basis, to a designated master servicer to be            
determined. Such delegation does not relieve the Issuer of its responsibility   
with respect to such duties. The Trustee may remove the servicer for failure    
to perform any of its duties under the Pooling Agreement if such failure        
continues unremedied for 60 days after written notice from the Trustee. The     
Issuer may not resign from its obligations and duties as servicer               

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under the Pooling Agreement except upon the determination, evidenced by an      
opinion of counsel, that its performance of such duties is no longer            
permissible under applicable law, or with the consent of the Trustee and of     
the holders of 66 2/3% of outstanding Certificates. The servicer will be        
entitled to servicing compensation for each Series as specified in the related  
Prospectus Supplement, which may include (i) a fee payable from the             
Certificate Account (a "REMIC Servicing Fee"), (ii) if Mortgage Loans are       
included directly in the Pool, a specified servicing rate equal to the          
difference between the Note Rate for each such Mortgage Loan and its Pass-      
Through Rate, as well as late payment charges, assumption fees, reinvestment    
income, if any, and other similar amounts set forth in the related Pooling      
Agreement and/or (iii) in the case of the CitiMae Mortgage Loans and Third      
Party Loans acquired on a servicing-retained basis, a master servicing fee      
("Servicing Compensation"). To the extent specified with respect to a Series    
in the related Prospectus Supplement, Servicing Compensation may be divided     
between "normal servicing compensation" and "additional servicing               
compensation." In the case of the CitiMae Mortgage Loans and Third Party Loans  
acquired on a servicing-retained basis, a fee may also be paid to third party   
subservicers or servicers (a "Servicing Fee"). The Pooling Agreement generally  
provides that the servicer shall not be subject to any liability to holders of  
Certificates other than by reason of its willful misfeasance, bad faith or      
gross negligence in the performance of its duties set forth in the Pooling      
Agreement. See "The Pooling Agreements."                                        

THE POOLS 

GENERAL                                                                         

Each Pool will consist of (i) Mortgage Loans and/or Mortgage Certificates or
other "regular interests" in another Pool to the extent specified in the        
related Prospectus Supplement, (ii) the amount of any assets including cash,    
if any, initially deposited in the Certificate Account, (iii) amounts           
deposited in any Reserve Fund described in the Prospectus Supplement, (iv)      
distributions on such Mortgage Certificates and/or Mortgage Loans (net of any   
servicing compensation) (v) any real estate acquired through foreclosure or     
similar proceeding and (vi) reinvestment earnings, if any, on such net          
distributions and deposits. Any Pool including Mortgage Loans among its assets  
will also include the interest of the Certificateholders in certain credit      
support and any insurance policies with respect to such Mortgage Loans. Pools   
for Series having monthly distributions are generally expected not to receive   
reinvestment earnings on distributions that are held in the Certificate         
Account. The Mortgage Certificates will be held by the Trustee or its nominee,  
and any Mortgage Loans included in any Pool will be held for the Trustee by a   
custodian, solely for the benefit of the related Series of Certificates.        

The following summaries of characteristics of the Mortgage Loans and the    
CitiMortgageCertificates are subject to and qualified by reference to Appendix  
A: "The Mortgage Loans and CitiMortgageCertificates."                           

MORTGAGE LOANS                                                                  

The Mortgage Loans included directly in a Pool or underlying                
CitiMortgageCertificates in a Pool will be mortgage loans secured by first      
liens on one- to four-family residential properties, and may be fixed rate or   
adjustable rate loans, or participations or other beneficial interests in such  
loans, which may provide for full amortization of principal, deferral of a      
portion of interest, balloon payments of principal or have such other           
characteristics as set forth in the related Prospectus Supplement. Properties   
securing Mortgage Loans may include leasehold interests in residential          
properties, the title to which is held by third party lessors. The Mortgage     
Loans may also contain cooperative apartment loans evidenced by promissory      
notes secured by security interests in shares issued by private, non-profit,    
cooperative housing corporations and in the related proprietary leases or       
occupancy agreements granting exclusive rights to occupy specified dwelling     
units in such cooperatives' buildings. Each Mortgage Loan will be selected and  
purchased by the Issuer for inclusion in the related Pool or will be selected   
by the Originator in connection with the issuance of a CitiMortgageCertificate  
from among those originated or acquired by an Originator in the ordinary        
course of business activities of the Originator or acquired from an affiliate   
of an Originator. Mortgage Loans in a Pool may be covered by a guaranty or      
certain other credit support, as described in the related Prospectus            
Supplement.                                                                     

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The Mortgage Loans will have original individual principal balances of no   
more than $2,500,000 and, except as otherwise set forth in the related          
Prospectus Supplement, original maturities of from 10 to 30 years. Fixed rate   
Mortgage Loans will be of a type specified in Appendix A.                       

Adjustable rate Mortgage Loans will bear interest at a rate which will be   
adjusted from time to time to equal (to the nearest eighth of a percent) a      
certain number of basis points over an index interest rate, as specified in     
Appendix A or the related Prospectus Supplement. Adjustments may be subject to  
limits on the magnitude of any one adjustment and on the magnitude of           
aggregate upward adjustments during the life of the Mortgage Loan. Adjustable   
rate Mortgage Loans may provide for deferral of a certain portion of interest   
and increases to the principal balances in order to limit the amount by which   
the scheduled monthly payments will increase following an increase in the rate  
of interest. The amount of the difference between the scheduled monthly         
payment and the monthly interest accrued at the Mortgage Rate is added to the   
unpaid principal balance of the Mortgage Loan and interest accrues on such      
added principal at the then-applicable Mortgage Rate from the date of such      
addition. Such an adjustment is referred to as "negative amortization".         
Negative amortization tends to lengthen the weighted average life of the        
Mortgage Loans and may cause payments near the maturity of the Mortgage Loan    
to be larger than the previously scheduled monthly payments unless the terms    
of the Mortgage Loan permit its maturity to be extended. The impact of any      
such negative amortization on Certificateholders will be set forth in the       
Prospectus Supplement.                                                          

If specified in the related Prospectus Supplement, adjustable rate Mortgage 
Loans included in a Pool may convert at some future time to fixed-rate          
mortgage loans. The details of such conversion features and the effect on the   
Pool will be described in the related Prospectus Supplement.                    

At the Cut-Off Date for a Pool that includes adjustable rate Mortgage Loans,
the Pool may contain adjustable rate Mortgage Loans which are newly originated  
and adjustable rate Mortgage Loans as to which one or more adjustments have     
occurred. Adjustable rate Mortgage Loans that have not had their first rate     
adjustment will generally bear interest at rates that are lower than the rate   
that would otherwise be produced by the sum of the applicable index and the     
number of basis points over such index used to compute the applicable mortgage  
rate for such Mortgage Loan.                                                    

If provided for in the applicable Prospectus Supplement, the Mortgage Loans 
in a Pool or the Mortgage Loans underlying CitiMortgageCertificates included    
in a Pool may be subject to temporary buydown plans ("Buydown Mortgage Loans")  
pursuant to which the monthly payments made by the Mortgagor during the early   
years of the Buydown Mortgage Loan will be less than the scheduled monthly      
payments on the Buydown Mortgage Loan, the resulting difference to be made up   
from buydown funds contributed by the Mortgagor, the Mortgagor's employer, the  
seller or the builder of the related Mortgaged Property or another source (i)   
at the time of origination of the Buydown Mortgage Loan or (ii) in some cases   
when buydown funds are contributed by an employer, on an annual basis. Unless   
otherwise specified in the applicable Prospectus Supplement and except for      
Buydown Mortgage Loans funded in accordance with clause (ii) above, the         
buydown funds will be placed on the Closing Date (as defined in the related     
Prospectus Supplement) in an account established and maintained with a          
depository by the Issuer or the Originator (or in the case of CitiMae Mortgage  
Loans, with the related subservicer), and amounts will be withdrawn monthly     
from such account promptly following receipt of the Mortgagor's monthly         
payment and deposited in the related Certificate Account. See "Description Of   
Certificates--Distributions to Certificateholders." Buydown funds with respect  
to any Series may be held in the same deposit account as buydown funds for all  
buydown mortgage loans serviced by the Issuer, the Originator or any            
subservicer. In the case of buydown funds contributed on an annual basis by     
the Mortgagor's employer, such buydown loans will generally have a buydown      
period of three years but may have a buydown period of up to five years. The    
employer may or may not be required to guarantee the payment of buydown funds   
even if the Mortgagor were no longer employed by such employer.                 

Unless otherwise specified in the related Prospectus Supplement, the        
original principal amount of each Mortgage Loan will be not more than 90% of    
the Original Value of the property securing such Mortgage Loan.                 

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Each Affiliated Mortgage Loan having an original principal amount exceeding     
90% of the Original Value of the Mortgaged Property will be covered by primary  
mortgage insurance against losses from default on such Mortgage Loan in an      
amount ranging from 12% to 30% of the principal amount of the Mortgage Loan     
outstanding from time to time. Such insurance will be in effect at least until  
the principal amount of the Mortgage Loan is reduced to 80% of its Original     
Value. Each CitiMae Mortgage Loan having an original balance exceeding 80% of   
the Original Value of the Mortgaged Property will be covered by primary         
mortgage insurance against losses from default on such mortgage loan in an      
amount ranging from 12% to 30% of the principal amount of the Mortgage Loan     
outstanding from time to time. Third Party Loans will be covered by primary     
mortgage insurance to the extent specified in the related Prospectus            
Supplement. See "Loan Underwriting Policies--Loan Underwriting Policies of the  
Affiliated Originators" and "--Loan Underwriting Policies of the CitiMae        
Originators."                                                                   

The properties securing Mortgage Loans may consist of detached houses,      
attached houses, row houses, individual units in planned unit developments,     
individual condominiums or other types of one- to four-family residences or     
interests in cooperatives (as defined in Appendix A). Although it is            
anticipated that such properties will be predominantly primary residences,      
they may include investment properties and vacation and second homes as well.   
Such properties may be located in any of the fifty United States, the District  
of Columbia or the Commonwealth of Puerto Rico.                                 

When the related Series of Certificates is issued the Issuer will assign the
Mortgage Loans without recourse to the Trustee for the benefit of the           
Certificateholders. The Issuer will, however, be required to repurchase any     
Mortgage Loans or Mortgage Certificates that do not conform in one or more      
material respects to the representations and warranties in the Pooling          
Agreement ("Non-Conforming Loans") within 180 days after notice from the        
Trustee that they are Non-Conforming Loans. The Issuer may substitute           
conforming Mortgage Loans or Mortgage Certificates for Non-Conforming Loans on  
or before the day that is 180 days following the Startup Day of the REMIC with  
respect to such Series. If, however, any Non-Conforming Loan would affect the   
status of the REMIC or subject the REMIC to tax, the Issuer must repurchase     
such Non-Conforming Loan or substitute a conforming Mortgage Loan therefor      
within the earlier of 90 days after notice from the Trustee that the Mortgage   
Loan is a Non-Conforming Loan or 180 days following the Startup Day. See "--    
Substitution of Mortgage Loans" below. The Startup Day generally will be the    
Closing Date (as defined in the related Prospectus Supplement). As servicer,    
the Issuer is responsible for administering and servicing the Mortgage Loans    
and Mortgage Certificates.                                                      

In connection with assignment of the Mortgage Loans to the Trustee, the     
Issuer will deliver to the Trustee (or a custodian acting on its behalf, which  
may be an affiliate of the Issuer) the Mortgage Note, the Mortgage with         
evidence of recording thereon, any other mortgage related documents, and        
assignments of the Mortgage by the Originator to the Trustee. Such assignments  
will generally be recorded after the Closing Date. See Appendix A: "The         
Mortgage Loans and CitiMortgageCertificates--Assignment of Mortgage Loans."     

MORTGAGE CERTIFICATES                                                           

CitiMortgageCertificates                                                      

This summary of CitiMortgageCertificates is subject to and qualified by     
reference to Appendix A: "The Mortgage Loans and CitiMortgageCertificates."     

Certificates evidencing fractional undivided interests in trusts will be    
created by each of the Originators with respect to which an election may be     
made to treat such trusts as REMICs under the Code. The property of such        
REMICs will consist of pools of Mortgage Loans originated or acquired by one    
of the Affiliated Originators or acquired by the Issuer. Such certificates      
will consist of one or more classes of regular interests and one class of       
residual interests. It is expected that the issuer of any                       
CitiMortgageCertificate will be the packager of the Mortgage Loans underlying   
such CitiMortgageCertificate and will act as the servicer or master servicer    
(in such capacity, the "Servicer" or "servicer") of such Mortgage Loans (or     
will subcontract with an affiliate to act as                                    

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subservicer). The Mortgage Loans may be covered by certain credit support       
described in the Prospectus Supplement.                                         

The form of pooling and servicing agreement pursuant to which the           
CitiMortgageCertificates will be issued will be substantially the same as the   
Pooling Agreement with respect to a Pool in which the Mortgage Loans were       
originated or acquired by an Affiliated Originator. The terms and provisions    
of the relevant Pooling Agreement described in this Prospectus (including the   
descriptions of distributions) would be applicable to any                       
CitiMortgageCertificate except that references to the Issuer will be deemed     
references to the relevant Affiliated Originator and references to the Pool     
will be deemed references to the Citibank Pool, the CMI Pool or the CFSB Pool,  
as the case may be.                                                             

The pool underlying a CitiMortgageCertificate will consist of the Mortgage  
Loans, such funds as from time to time are deposited in the Certificate         
Account for such CitiMortgageCertificate, property acquired by foreclosure or   
deed in lieu of foreclosure of a Mortgage Loan or Transfer Instrument (as       
defined below) as from time to time may be subject to the related Pooling       
Agreement, any credit support and any insurance policies with respect to the    
Mortgage Loans. For purposes of this Prospectus, a "Transfer Instrument" is a   
deed transferring an interest in property subject to a Mortgage or any          
assignment or other instrument of transfer transferring an interest in          
collateral (including shares of a cooperative and the related occupancy         
agreement or proprietary lease) securing a Mortgage Loan. Any default by any    
insurer under any such policy, any loss in excess of policy limits or any       
uninsured loss may adversely affect distributions on the                        
CitiMortgageCertificates to the Trustee for the related Series of               
Certificates, and may thus adversely affect distributions on such Certificates  
to the Certificateholders. Each Pooling Agreement with respect to the same      
Originator will contain substantially the same terms and conditions, except     
for the Pass-Through Rate or Stated Rate (as defined therein), the date of      
issuance of such series, the aggregate initial Adjusted Balance of Mortgage     
Loans evidenced by such series, the minimum fractional undivided interest       
represented by each CitiMortgageCertificate, the identity and address of the    
Trustee, the amount of the credit support and other minor variations. Pursuant  
to each Pooling Agreement, the Servicer will be responsible for servicing and   
administering the related Mortgage Loans, but may at any time subcontract its   
duties as servicer under any Pooling Agreement to any entity, including an      
entity more than 50% of the stock of which is owned, directly or indirectly,    
by Citicorp. With respect to Mortgage Loans acquired by the Trust from          
Citibank or CFSB, each of Citibank and CFSB intends to subcontract its duties   
as servicer under each Pooling Agreement under which it acts as servicer to     
CMI. CitiMortgageCertificates contained in a Pool may represent all or some of  
the regular interests in a REMIC. It is expected that CitiMortgageCertificates  
will be issued pursuant to participation or pooling and servicing agreements    
entered into from time to time between the related seller and the related       
certificate trustee or custodian. In addition, an affiliate of such seller or   
of the Issuer may be a servicer for such pool of mortgage loans. The mortgage   
loans underlying the CitiMortgageCertificates may be subserviced by one or      
more loan servicing institutions under the supervision of the servicer.         

It is expected that all collections received by the servicers on the        
mortgage loans (net of servicing fees to be retained by the servicers and such  
other amounts as may be specified in the related pooling and servicing          
agreement) will be deposited with the certificate trustee. Monthly              
distributions of the principal and interest components of such collections      
(adjusted to the stated rate or pass-through rate (as the case may be) borne    
by such CitiMortgageCertificate) will be made to the Trustee for the            
CitiMortgageCertificates of the related Series for deposit into the             
Certificate Account for such Series.                                            

The Issuer will provide to any Certificateholder, without charge, on written
request, a copy (without exhibits) of the Pooling Agreement for any series of   
CitiMortgageCertificates included in a Pool. Requests should be addressed to:   
Citicorp Mortgage Securities, Inc., 909 Third Avenue, New York, New York        
10043.                                                                          

Distributions of principal and interest on each series of                   
CitiMortgageCertificates will be made by the Trustee or a paying agent on the   
25th day (or if such 25th day is not a business day, no later than the          
business day immediately following the 25th day) of each calendar month to the  
Trustee as the person in whose name such CitiMortgageCertificates are           
registered at the close of business on the last business day of the preceding   
month.                                                                          

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The first such distribution date for each series of CitiMortgageCertificates    
will be specified in the applicable Prospectus Supplement. [The Pool may also   
contain a certificate evidencing an undivided interest in a trust comprised of  
Mortgage Loans as to which trust an election has not been made to treat the     
trust property as a REMIC. The terms and provisions of such certificate and     
any Pooling Agreement pursuant to which any such certificate is issued will be  
set forth in the related Prospectus Supplement.]                                

Issuer Certificates                                                           

This summary of Issuer Certificates is subject to and qualified by reference
to Appendix A: "the Mortgage Loans and CitiMortgageCertificates."               

The Pool with respect to any Series of Issuer Certificates may consist in   
whole or in part of Issuer Certificates initially issued to the public by the   
Issuer or an affiliate of the Issuer, and which represent all or a portion of   
the regular interests in a pool of mortgage loans originated or acquired by     
one or more of the Affiliated Originators or acquired by the Issuer ("Whole or  
Partial Pool Issuer Certificates"). Whole or Partial Pool Issuer Certificates   
included in a Pool may represent all or a portion of one or more classes or     
subclasses of one or more series of previously issued Issuer Certificates.      

Each Whole or Partial Pool Issuer Certificate will have been issued pursuant
to a pooling and servicing agreement between the related issuer, which is       
expected to be the Issuer, one or more Originators and/or affiliates of the     
Issuer, and the trustee for such series of CitiCertificates (the "Underlying    
Trustee"). Unless otherwise specified in the Prospectus Supplement, the terms   
of such pooling agreement will generally conform to those provided in the       
Pooling Agreement with respect to such Series of Certificates. See "The         
Pooling Agreements."                                                            

Certain of the mortgage loans underlying a series of Whole or Partial Pool  
Issuer Certificates may be covered by (i) individual policies of primary        
mortgage insurance insuring against all or a portion of any foreclosure losses  
on the particular mortgage loans covered thereby, (ii) subordination or         
guaranty arrangements and/or (iii) such other policies of insurance and other   
forms of credit support (including, without limitation, obligations to advance  
delinquent payments) as may be specified in the related Prospectus Supplement.  
Unless otherwise provided in the related Prospectus Supplement, no Whole or     
Partial Pool Issuer Certificate will be so insured or guaranteed.               

Unless otherwise provided in the related Prospectus Supplement, it is       
expected that all collections received by servicers with respect to the         
mortgage loans underlying each series of Whole or Partial Pool Issuer           
Certificates (net of servicing fees to be retained by such servicers and such   
other amounts as may be specified in the related pooling and servicing          
agreement), including monthly distributions of the principal and interest       
components of such collections (adjusted to the stated rate or pass-through     
rate (as the case may be) borne by such Whole or Partial Pool Issuer            
Certificate) will be distributed directly to the related Underlying Trustee.    

The Prospectus Supplement will specify, to the extent relevant and to the   
extent such information is reasonably available to the Issuer and the Issuer    
reasonably believes such information to be reliable, (i) the aggregate          
approximate principal amount and type of each class or subclass of Whole or     
Partial Pool Issuer Certificates to be included in the Pool; (ii) certain       
characteristics of the mortgage loans which comprise the underlying assets for  
each Whole or Partial Pool Issuer Certificate, on a pool by pool basis,         
including (a) the aggregate Adjusted Balance of such mortgage loans and the     
years of origination thereof, (b) if Converted Mortgage Loans (as defined in    
Appendix A) with an aggregate Adjusted Balance exceeding 10% of the aggregate   
Adjusted Balance of all mortgage loans in any pool underlying a Whole or        
Partial Pool Issuer Certificate were delivered, the aggregate Adjusted Balance  
of any such Converted Mortgage Loans, (c) the original loan-to-value ratios of  
the mortgage loans of each such pool, (d) the types of Mortgaged Properties     
securing the mortgage loans, (e) the geographic distribution of the Mortgaged   
Properties, prepared on a state-by-state basis for states where mortgage loans  
having an aggregate Adjusted Balance exceeding 10% of the aggregate Adjusted    
Balance of mortgage loans in the related Pool are located, (f) if Buydown       
Mortgage Loans                                                                  

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with an aggregate Adjusted Balance exceeding 10% of the aggregate Adjusted      
Balance of all mortgage loans in the related Pool were delivered, the           
aggregate Adjusted Balance of Buydown Mortgage Loans in the related Pool, (g)   
if loans on residential leasehold properties ("Leasehold Loans") with an        
aggregate Adjusted Balance exceeding 10% of the aggregate Adjusted Balance of   
all mortgage loans in the related Pool were delivered, the aggregate Adjusted   
Balance of Leasehold Loans in the related Pool and (h) if 15-year, fixed-rate   
tiered-payment mortgage loans originated by CFSB's California branches and      
providing for a prepayment penalty during the first 12 months following         
origination with an aggregate Adjusted Balance exceeding 10% of the aggregate   
Adjusted Balance of all mortgage loans in the related Pool were delivered, the  
aggregate Adjusted Balance of such mortgage loans in the related Pool; (iii)    
the maximum original term-to-stated maturity of each series of Whole or         
Partial Pool CitiCertificates; (iv) the weighted average term-to-stated         
maturity of each series of Whole or Partial Pool Issuer Certificates; (v) the   
pass-through rate for each class or subclass of Whole or Partial Pool Issuer    
Certificates; (vi) the weighted average pass-through rate of each Whole or      
Partial Pool Issuer Certificate; (vii) the servicer of the mortgage loans       
underlying each Whole or Partial Pool Issuer Certificate and the Underlying     
Trustee with respect to each Whole or Partial Pool Issuer Certificate; (viii)   
certain characteristics or credit enhancement, if any, such as reserve funds,   
insurance policies, letters of credit or guarantees, relating to the mortgage   
loans underlying each Whole or Partial Pool Issuer Certificate; (ix) the terms  
on which underlying mortgage loans for each Whole or Partial Pool Issuer        
Certificate may, or are required to, be repurchased prior to stated maturity;   
and (x) the terms on which substitute mortgage loans may be delivered to        
replace those initially deposited with each Underlying Trustee.                 

More specific information concerning each Whole or Partial Pool Issuer      
Certificate, the mortgage loans underlying each such Issuer Certificate, and    
related servicing, insurance, subordination and/or other credit support         
arrangements, if any, will be set forth in the related Prospectus Supplement.   

Agency Certificates                                                           

This summary of Agency Certificates is subject to and qualified by reference
to Appendix B: "The Agency Certificates."                                       

The Issuer may acquire for any Pool "fully-modified pass-through" mortgage- 
backed certificates ("GNMA Certificates") issued by private issuers and         
guaranteed by the Government National Mortgage Association ("GNMA"), Mortgage   
Participation Certificates ("FHLMC Certificates") guaranteed by the Federal     
Home Loan Mortgage Corporation ("FHLMC") and Mortgage Pass-Through              
Certificates ("FNMA Certificates") guaranteed by the Federal National Mortgage  
Association ("FNMA").                                                           

GNMA is a wholly-owned corporate instrumentality within the United States   
Department of Housing and Urban Development. GNMA is authorized to guarantee    
the timely payment of the principal of and interest on GNMA Certificates,       
which guarantee is backed by the full faith and credit of the United States.    
Any issuer which is unable to make payments on such GNMA Certificates as they   
become due is required to promptly notify GNMA and request payment by GNMA,     
whereupon GNMA will make such payment directly to the holders of such GNMA      
Certificates.                                                                   

FNMA is a federally chartered and privately owned corporation organized     
under the Federal National Mortgage Association Charter Act. FNMA purchases     
home mortgage loans with funds acquired in part from the sale of its            
Guaranteed Mortgage Pass-Through Certificates. FNMA guarantees that it will     
distribute to holders of FNMA Certificates their proportionate interests in     
passed-through payments of principal of and interest on the underlying loans    
(including principal prepayments).                                              

FHLMC is a corporate instrumentality of the United States created pursuant  
to Title III of the Emergency Home Finance Act of 1970, as amended. FHLMC       
purchases mortgage loans and participation interests in mortgage loans that     
meet certain statutory standards, and resells them in the form of FHLMC         
Certificates. FHLMC guarantees that it will distribute to holders of FHLMC      
Certificates their proportionate interests in passed-through payments of        
principal of and interest on the underlying loans.                              

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The guaranties of FNMA and FHLMC are backed only by the credit of FNMA and  
FHLMC, respectively. The full faith and credit of the United States is not      
pledged to payments that may be required under such guaranties. Neither the     
United States nor any agency thereof is required to finance FNMA's or FHLMC's   
operations or to assist FNMA or FHLMC in any manner.                            

CERTIFICATE ACCOUNT                                                             

The Trustee will, as to each Series of Certificates, establish and maintain 
a separate account or accounts, including any such account maintained by a      
paying agent (collectively, the "Certificate Account"), for the benefit of the  
Certificateholders. The Certificate Account may bear interest. Except with      
respect to the CitiMae Mortgage Loans and the Third Party Loans acquired on a   
servicing-retained basis, all payments (net of servicing fees) on the Mortgage  
Loans or Mortgage Certificates will be deposited directly into the Certificate  
Account as soon as practicable after receipt thereof but in any case within     
two business days of receipt and posting. The Pooling Agreement for each        
Series may authorize the Trustee to invest at the Issuer's discretion           
distributions received on the assets in a Pool (including Voluntary Advances    
and payments under the credit support) in certain investments ("Eligible        
Investments") that will qualify as "permitted investments" under Code Section   
860G(a)(5). Eligible Investments may be made by the Trustee upon instructions   
from the Issuer and, if made, will generally mature not later than the day      
preceding the next Distribution Date for such Series (or on such Distribution   
Date in the case of Eligible Investments which are the obligations of the       
Trustee). Eligible Investments include, among other investments, obligations    
of the United States or of any agency thereof, certificates of deposit,         
federal funds, time deposits and bankers' acceptances sold by eligible          
commercial banks (including affiliates of the Issuer such as Citibank), any     
other demand or time deposit or certificate of deposit fully insured by the     
Federal Deposit Insurance Corporation (the "FDIC") either through the Bank      
Insurance Fund (the "BIF") or the Savings Association Insurance Fund (the       
"SAIF"), commercial paper carrying the ratings specified in the related         
Pooling Agreement of each Rating Agency rating the Certificates of such Series  
that has rated such commercial paper, certain repurchase agreements of United   
States government securities with eligible commercial banks and certain         
guaranteed investment contracts.                                                

Unless otherwise set forth in the related Prospectus Supplement, all        
payments on Mortgage Loans and Mortgage Certificates, together with any         
reinvestment income thereon and any amounts withdrawn from any Reserve Fund     
for such Series and deposited into the Certificate Account for such Series,     
will be available to make distributions on the Certificates of such Series on   
the next succeeding Distribution Date or Special Distribution Date for such     
Series. Any funds remaining in the Certificate Account immediately following a  
Distribution Date (other than amounts representing early payments of            
installments of principal and interest on Mortgage Loans directly held in the   
Pool which are due on future Due Dates or Principal Prepayments) will be        
promptly distributed to the holders of the Residual Certificates.               

In the case of Mortgage Loans participating in a "prepayment program" (as   
described in Appendix A: "The Mortgage Loans and CitiMortgage Certificates--    
Payments on Mortgage Loans in Pools"), payments on such Mortgage Loans          
received under such a program will not be remitted to the Certificate Account   
until released for payment under the terms of such program.                     

MINIMUM PREPAYMENT AGREEMENT                                                    

The Issuer may enter into an agreement (a "Minimum Prepayment Agreement")   
with an institution meeting the criteria of the Rating Agency rating the        
related Series to enable the Trustee to make distributions of principal on the  
Certificates of such Series in accordance with a schedule set forth in the      
related Prospectus Supplement. Funds would be provided under the Minimum        
Prepayment Agreement in the event that aggregate scheduled principal payments   
and prepayments on the Mortgage Loans and/or Mortgage Certificates included in  
the related Pool were not sufficient to make distributions in reduction of the  
Stated Amount of such Certificates in accordance with such Minimum Prepayment   
Schedule. Such Minimum Prepayment Agreement may obligate the institution to     
purchase, from time to time, Mortgage Loans and/or Mortgage Certificates        
included in the Pool                                                            

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pursuant to a selection process set forth in such agreement for an amount       
specified in the related Prospectus Supplement.                                 

The related Prospectus Supplement will describe the terms and conditions of 
any Minimum Prepayment Agreement if a Minimum Prepayment Agreement is to be a   
part of the Pool.                                                               

MINIMUM REINVESTMENT AGREEMENT                                                  

The Issuer may enter into an agreement (a "Minimum Reinvestment Agreement") 
with an institution meeting the criteria of the Rating Agency rating the        
related Series. Amounts required to be deposited in any account or fund for a   
related Series will be invested pursuant to such agreement. If a Minimum        
Reinvestment Agreement is entered into with respect to a Series of              
Certificates, reinvestment earnings on funds in the Certificate Account will    
not belong to the Servicer as additional servicing compensation but will be     
available to make distributions on the Certificates in accordance with their    
terms. The applicable interest rates for funds invested under such agreement    
will be described in the related Prospectus Supplement if a Minimum             
Reinvestment Agreement is to be a part of the Pool.                             

COLLECTION OF PAYMENTS                                                          

The Mortgage Certificates included in a Pool for a Series of Certificates   
will be registered in the name of the Trustee or its nominee or, in the case    
of Mortgage Certificates issued only in book-entry form, with a member of the   
Federal Reserve System, so that in each case all distributions thereon will be  
made directly to such Trustee. The Mortgage Loans included in a Pool will be    
assigned to the Trustee and the related Mortgage Notes, endorsed to the         
Trustee or in blank, will be delivered to the Trustee or its custodian. The     
obligation of such Trustee to make distributions on the Certificates is         
limited to the amount of payments (net of servicing compensation) on the        
Mortgage Certificates and Mortgage Loans that were actually received by it      
unless the Issuer enters into a Minimum Prepayment Agreement. The Trustee may   
not assign, transfer, pledge or dispose of any assets in the Certificate        
Account for such Series, except to a successor Trustee with respect to such     
Series, the holders of the Residual Certificates or the holders of              
CitiCertificates for such Series as set forth in the Pooling Agreement. See     
"--Substitution of Mortgage Loans" below.                                       

SUBSTITUTION OF MORTGAGE LOANS                                                  

Subject to the limitations set forth in the Pooling Agreement, the Issuer   
may, on any day prior to 180 days after the settlement date of the related      
Series of Certificates (the "Startup Day") (or, if such day is not a Business   
Day, on the next previous Business Day) (or 90 days after discovery, if         
earlier, if the defect affects the status of the Mortgage Loan as a "qualified  
mortgage" for REMIC purposes), but solely in lieu of any obligation it may      
have to repurchase a Non-Conforming Loan, deliver to the Trustee other          
Mortgage Loans in substitution for any one or more Mortgage Loans included in   
the Pool. Any such substitute Mortgage Loan will be fully paid up on the        
substitution day and will have a principal balance on the substitution day      
that is at least equal to the principal balance on the substitution day of the  
Non-Conforming Loans for which it is substituted, an interest rate equal to or  
greater than that of such Non-Conforming Loans, an original term to maturity    
equal to that of such Non-Conforming Loans and a maturity date not earlier      
than one year prior to, and in no event later than, that of such Non-           
Conforming Loans. Substitutions of Mortgage Loans and/or Mortgage Certificates  
will be permitted in the event of breaches of representation and warranties     
with respect to any original Mortgage Loan and/or Mortgage Certificate or in    
the event the documentation with respect to any Mortgage Loan is determined by  
the Trustee to be incomplete. The period during which such substitution will    
be permitted generally will not exceed two years for pools from the date the    
related Series is issued.                                                       

The related Prospectus Supplement will describe any other conditions upon   
which Mortgage Loans and/or Mortgage Certificates may be substituted for        
Mortgage Loans and/or Mortgage Certificates initially included in the Pool.     

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CITICORP MORTGAGE SECURITIES, INC.  

The Issuer was incorporated in the State of Delaware on March 17, 1987 and  
is an indirect wholly owned subsidiary of Citicorp. It is not expected that     
the Issuer will have any business operations other than offering Certificates   
and related activities.                                                         

The principal executive offices of the Issuer are located at 909 Third      
Avenue, New York, New York 10043. Its telephone number is (212) 559-6727.       

THE ORIGINATORS 

CITICORP MORTGAGE, INC.                                                         

CMI is an indirect wholly owned mortgage banking subsidiary of Citicorp.    
CMI, with headquarters in St. Louis, Missouri, was incorporated under the laws  
of the State of Delaware on September 24, 1979. Since its formation, CMI has    
engaged in mortgage banking and other housing-related financing activities,     
and in July 1980, CMI commenced making mortgage loans. CMI derives income       
primarily from interest on mortgages which it owns, secondary mortgage market   
sales and mortgage loan servicing fees and mortgage origination fees and        
charges.                                                                        

CMI has been approved as a mortgagee and seller/servicer by several agencies
and instrumentalities, including the FHA, the Veterans Administration ("VA"),   
FNMA, GNMA and FHLMC. CMI's origination operations are subject to the           
operational guidelines and regulations of, as well as audits by, certain of     
these agencies.                                                                 

The principal executive offices of CMI are located at 750 Washington Blvd., 
Stamford, Connecticut 06091. Its telephone number is (800) 285-3000.            

CITIBANK, FEDERAL SAVINGS BANK                                                  

Citibank, Federal Savings Bank ("CFSB") is a federal savings bank with its  
executive offices in San Francisco, California. It was formed in 1982 in        
connection with the acquisition of Fidelity Savings & Loan Association. As of   
the end of December 31, 1990, Citibank, Federal Savings Bank (formerly          
Citicorp Savings of Illinois, A Federal Savings and Loan Association) and       
Citibank, Federal Savings Bank (formerly Citicorp Savings of Washington, D.C.,  
A Federal Savings and Loan Association), both wholly owned indirect             
subsidiaries of Citicorp, were merged into CFSB. As of March 31, 1993,          
Citibank, Federal Savings Bank (formerly Citicorp Savings of Florida, A         
Federal Savings and Loan Association), a wholly owned indirect subsidiary of    
Citicorp, was merged into CFSB. As of May 1, 1993 CFSB acquired the branches    
of Citibank (Maryland), N.A. and as of January 3, 1994, CFSB acquired the       
branches of Citibank (Florida), N.A.                                            

The deposits of CFSB are insured by the FDIC to the extent provided by law. 
Since 1982, CFSB has been either a direct or an indirect wholly-owned           
subsidiary of Citicorp. CFSB has been an active one- to four-family             
residential mortgage lender since 1983.                                         

Citibank Service Corporation, an affiliate of CFSB, acts as trustee with    
respect to substantially all deeds of trust relating to mortgaged property      
located in California securing mortgage loans originated or acquired by CFSB.   
Under California law, the functions of a trustee under a deed of trust are to   
foreclose upon the mortgaged property upon notification by the beneficiary of   
a delinquency and to execute full and partial reconveyances of such mortgaged   
property upon direction of the beneficiary.                                     

The principal executive offices of CFSB are located at 1 Sansome Street, San
Francisco, California 94104. Its telephone number is (415) 627-6000.            

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CITIBANK, N.A.                                                                  

Citibank is a commercial bank offering a wide range of banking services to  
its customers in the New York City metropolitan area and around the world.      

Citibank's deposits are insured by the FDIC to the extent provided by law.  
Since 1968, Citibank has been a wholly-owned subsidiary of Citicorp. Citibank   
has been an active one- to four-family residential real estate mortgage lender  
since 1960. Citibank has also been an active cooperative apartment lender.      
Citibank conducts such lending activities through its New York Banking Unit     
(the "NYBU"). Except in connection with mortgage pass-through certificates      
issued by it from time to time, Citibank has not engaged in any significant     
servicing activities on behalf of unaffiliated persons with respect to          
conventional residential mortgage or cooperative loans.                         

The NYBU is responsible for Citibank's consumer banking business within that
portion of the New York Metropolitan Area which includes the nine counties      
(Westchester, Nassau, Suffolk, Kings, Richmond, New York, Bronx, Rockland and   
Queens) within and surrounding New York City. Citibank offers a wide range of   
consumer banking products and services, including mortgage and cooperative      
apartment loans.                                                                

The principal executive offices of Citibank are located at 399 Park Avenue, 
New York, New York 10043. Its telephone number is (212) 559-1000.               

CITIMAE, INC.                                                                   

CitiMae, Inc. ("CitiMae"), a Delaware corporation and a wholly owned        
subsidiary of Citibank, is primarily engaged in the purchase and sale of        
mortgage loans, the performance of master servicing functions and the           
securitizing of mortgage loans. Its principal executive offices are located at  
399 Park Avenue, New York, New York 10043. Its telephone number is (212) 793-   
5880.                                                                           

At June 30, 1996, CitiMae master serviced mortgage loans, on behalf of      
Citibank, with principal balances of approximately $             . CitiMae      
enters into agreements with various approved servicers to perform, as           
independent contractors, certain servicing functions for Citibank, as master    
servicer. See "Loan Underwriting Policies--Loan Underwriting Policies of the    
CitiMae Originators."                                                           

Set forth below is a description of aspects of CitiMae's purchase program   
for Mortgage Loans eligible for inclusion in a Pool.                            

The Issuer will purchase Mortgage Loans either directly or indirectly from  
CitiMae or its affiliates or from approved sellers which may be affiliates of   
the Issuer or CitiMae. CitiMae or its affiliates has approved (or will          
approve) individual institutions as eligible sellers by applying certain        
criteria, including the seller's depth of mortgage origination experience,      
servicing experience and financial stability. From time to time, however,       
CitiMae or its affiliates may purchase Mortgage Loans from sellers which,       
while not meeting the generally applicable criteria, have been reviewed by it   
and found to be acceptable as sellers of Mortgage Loans.                        

Underwriting standards are intended to evaluate the Mortgagor's credit      
standing and repayment ability and the value and adequacy of the Mortgaged      
Property as collateral. Underwriting standards are applied in a standard        
procedure which complies with applicable federal and state laws and             
regulations.                                                                    

In determining the adequacy of the property as collateral, an appraisal is  
generally made of each property considered for financing. The appraiser is      
required to inspect the property and verify that it is in good condition and    
that construction, if new, has been completed. The appraisal is based on the    
appraiser's judgment of values, giving appropriate weight to both the market    
value of comparable homes and the cost of replacing the property.               

See also "Loan Underwriting Policies--Loan Underwriting Policies of the     
CitiMae Originators".                                                           

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If CitiMae Mortgage Loans are included in a Pool, the Issuer intends to     
enter into a Subservicing Agreement with CitiMae (the "Subservicer") pursuant   
to which the Subservicer will agree to perform certain functions for the        
Servicer relating to the purchase of the Mortgage Loans and the servicing and   
administering of the CitiMae Mortgage Loans. Under the Subservicing Agreement,  
the Subservicer will agree, among other things, to perform the Servicer's       
obligations with respect to the servicing of the CitiMae Mortgage Loans and     
the Servicer's servicing obligations under the Pooling Agreement which will     
include making advances to Certificateholders under circumstances in which the  
Servicer would be obligated to make such advances, and repurchasing Mortgage    
Loans from the Trustee where the Servicer would be obligated to so repurchase.  
Any actions of the Subservicer taken pursuant to the Subservicing Agreement     
will be for the Servicer with the same force and effect as though performed     
directly by the Servicer and the Servicer will at all times remain responsible  
for the performance of its duties under the Pooling Agreement. The Subservicer  
will be paid a fee by the Servicer for its services.                            

THIRD PARTY ORIGINATORS                                                         

If Third Party Loans having an aggregate Adjusted Balance exceeding 10% of  
the aggregate Adjusted Balance of the Mortgage Loans in a Pool are included in  
a Pool, the related Prospectus Supplement will identify the Third Party         
Originators of such Third Party Loans.                                          

Unless otherwise specified in the related Prospectus Supplement, each Third 
Party Originator will be required to satisfy the qualifications set forth in    
this paragraph. Each Third Party Originator must be an institution experienced  
in originating mortgage loans of the type contained in the related Pool in      
accordance with accepted practices and prudent guidelines. Each Third Party     
Originator must be a seller/servicer approved by FNMA, FHLMC or the FHA. Each   
Third Party Originator must be a savings and loan association, savings bank,    
commercial bank, credit union, insurance company or a mortgagee approved by     
the Secretary of Housing and Urban Development.                                 

LOAN UNDERWRITING POLICIES  

LOAN UNDERWRITING POLICIES OF THE AFFILIATED ORIGINATORS                        

Except as specifically noted below and except as may be specified in the    
applicable Prospectus Supplement, residential real estate mortgage loans        
originated or acquired from affiliated or unaffiliated third parties by the     
Affiliated Originators are subject to the same underwriting process. For        
certain residential mortgage loans the Affiliated Originators have contracted   
with or delegated the underwriting process to certain unaffiliated third        
parties. The underwriting process, which is described below, assesses the       
prospective borrower's ability to repay and the adequacy of the property as     
collateral for the loan requested. The loan underwriting policies of each       
Affiliated Originator require such Originator's loan underwriters to be         
satisfied that the value of the property being financed currently supports,     
and will likely support in the future, the outstanding loan balance with        
sufficient excess value to protect against minor adverse shifts in real estate  
values. In general, it is the policy of each Affiliated Originator not to make  
conventional one- to four-family real estate loans with more than 90% loan-to-  
value ratios. Unless otherwise specified in the related Prospectus Supplement,  
a Pool will not contain any Real Estate Loans with more than a 90% loan-to-     
value ratio. Since February 1993, it has been the policy of each Affiliated     
Originator not to make one- to four-family real estate loans with loan-to-      
value ratios above 80% without obtaining primary mortgage insurance.            

Each Affiliated Originator's real estate lending process for one- to four-  
family residential mortgage loans follows a standard procedure, established to  
comply with applicable federal and state laws and regulations. Initially, a     
prospective borrower is required to fill out an application designed to         
provide pertinent information about the prospective borrower, the property to   
be financed and the type of loan desired. As part of the description of the     
prospective borrower's financial condition, each Affiliated Originator          
requires a current balance sheet describing assets and liabilities and a        
statement of income and expenses, proof of income such as a                     

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paycheck stub or W-2 form (except for certain self-employed prospective         
borrowers), proof of liquid assets (required as of April 1991), telephone       
verification of employment (required as of April 1991), and a credit report     
which summarizes the prospective borrower's credit history with local           
merchants and lenders and any record of bankruptcy. Since February 1991, it     
has been the policy of each Affiliated Originator to obtain at least two        
credit reports (which may be in the form of a merged credit bureau report)      
with respect to a prospective borrower. Self-employed prospective borrowers     
are required to submit their federal income tax returns for the most recent     
two years and a separate statement of income and expenses. In the case of       
mortgage loans originated or acquired after July 1993 by the Affiliated         
Originators, facsimile copies of certain verification documents (such as bank   
statements and verification of employment) may be accepted in lieu of           
originals.                                                                      

If the proposed mortgage loan does not exceed 65% (prior to December 1992,  
such percentage could be up to 80%) of the value of the underlying property     
based on the lesser of the appraised value determined in an appraisal obtained  
by the Affiliated Originator at the origination of such mortgage loan or the    
sale price for such property (the "Original Value"), certain self-employed      
prospective borrowers may be exempt from some or all of the requirements that   
they provide financial statements, current federal income tax returns and       
proof of income. However, each Affiliated Originator during 1990 and 1991       
implemented as part of its underwriting policy that telephone verification of   
employment is required and, beginning in April 1991, proof of liquid assets,    
as described below. Certain high net worth prospective borrowers with ongoing   
banking relationships with Citicorp's Private Banking Group may be exempt from  
the employment verification process.                                            

Once the employment verification and the credit report are received, a      
determination is made as to whether the prospective borrower has sufficient     
monthly income available to meet the borrower's monthly obligations on the      
proposed loan and other expenses related to the residence as well as to meet    
other financial obligations and monthly living expenses. Each Affiliated        
Originator has established as lending guidelines that the mortgage payments,    
plus applicable real property taxes and any condominium or homeowner            
association common charges and hazard insurance, should not exceed 33% (34% in  
the case of ARMs) of the borrower's gross income, or that all monthly           
payments, including those mentioned above and other fixed obligations, such as  
car payments, should not exceed 38% of gross income. Where there are two        
individuals co-signing the mortgage note or documents, the income and debt of   
both are included in the computation. In the case of mortgage loans originated  
by the California branches of CFSB prior to June 1991, the actual mortgage      
payments may be higher due to a higher mortgage rate at the time the loan       
documents are prepared, but such mortgage rate generally will not exceed the    
anticipated rate used in such analysis by more than one percent. Often,         
however, other credit considerations may cause a loan underwriter to depart     
from these guidelines, and a loan underwriter may require additional            
information or further verification of information provided so as to            
compensate for the exception to the Affiliated Originator's lending             
guidelines.                                                                     

Since April 1991, each Affiliated Originator's underwriting policies have   
required it to make a determination as to whether the prospective borrower has  
sufficient liquid assets to acquire the property to be financed, taking into    
account, among other things, proceeds from the sale of any prior residence and  
cash on deposit in banks. This determination may be made from such evidence as  
the existence of a contract for sale of any prior residence and bank            
statements supplied by the prospective borrower.                                

Each Affiliated Originator requires an appraisal to be made of each property
to be financed, which may be a master appraisal in the case of bulk             
commitments. The appraisal is conducted by either an independent fee            
appraiser, a specially trained employee of the Affiliated Originator or an      
employee of an affiliate. The person conducting the appraisal personally        
visits the property and estimates its market value on the basis of comparable   
properties. Neither the independent appraisers nor employees receive any        
compensation dependent upon either the amount of the loan or its consummation.  
In normal practice, the Affiliated Originator's judgment of the appraisal       
determines the maximum amount which will be lent on the property. In            
connection with the refinancing of an existing mortgage originated or acquired  
by certain Affiliated Originators, such Originators may not cause a current     
appraisal of the underlying property to be prepared unless the then             
outstanding principal amount of the mortgage loan is increased by an amount in  
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refinanced transaction. In connection with the modification of an existing      
mortgage pursuant to a Modification Agreement, a current appraisal of the       
underlying property may not be prepared.                                        

Each Affiliated Originator obtains or causes to be obtained a search of the 
liens of record to which the property being financed is subject at the time of  
origination. Title insurance or, in lieu thereof, an attorney's opinion of      
title in those jurisdictions in which such practice is acceptable, is required  
in the case of all mortgage loans, except that with respect to Cooperative      
Loans, an Affiliated Originator does not require a borrower or the cooperative  
to obtain title insurance of any type or to obtain a title search of the        
property on which the cooperative apartment building is located.                

Since January 1995, each Affiliated Originator has used a credit scoring    
system as part of its underwriting process. This credit scoring system          
assesses the prospective borrower's ability to repay a mortgage loan based      
upon certain predetermined mortgage loan characteristics and credit risk        
factors. All prospective borrowers remain subject to verification of            
employment, income, assets and credit history, as described elsewhere herein.   
All credit scored loans are rated strong, satisfactory or inconclusive.         
Mortgage loans rated "strong" are not subjected to the normal loan              
underwriting process described herein, but are subject to verification of       
property value. Mortgage loans rated "satisfactory" or "inconclusive" are       
underwritten in accordance with the normal loan underwriting policies           
described herein.                                                               

An Affiliated Originator may originate Leasehold Loans. Leasehold Loans are 
approved in accordance with such Affiliated Originator's standard underwriting  
criteria. An ALTA leasehold title insurance policy is required, which contains  
no exceptions for any adjustable features of the lease. The title insurance     
policy must assure that the Affiliated Originator's first mortgage is not       
subordinate to any lien or encumbrance other than the land lease.               
Additionally, when deemed necessary, the California branches of CFSB require    
that a consent to assignment of lease and/or subordination agreement be         
obtained and recorded. Furthermore, each Affiliated Originator requires that    
the leasehold estate be assignable or transferable if it is subjected to the    
mortgage lien.                                                                  

The land lease should guarantee such Affiliated Originator's right to       
receive any notice of default by the borrower and the right to cure the         
default. Payments due pursuant to the land lease are taken into account in      
both debt ratio calculations in connection with the underwriting of such        
mortgage loans. Finally, each Affiliated Originator requires that the term of   
the lease must extend at least ten years longer than the scheduled maturity on  
the mortgage loan.                                                              

Prior to 1986, the Affiliated Originators did not generally make one- to    
four-family real estate loans with loan-to-value ratios above 80% unless such   
Affiliated Originator had obtained primary mortgage insurance coverage. From    
1986 through January 1993, each Affiliated Originator originated mortgage       
loans with loan-to-value ratios in excess of 80% but not more than 90% without  
obtaining primary mortgage insurance. Since February 1993, it has been the      
policy of each Affiliated Originator not to make one- to four-family real       
estate loans with loan-to-value ratios above 80% without obtaining primary      
mortgage insurance. Certain corporate relocation programs, offered by the       
Affiliated Originators to employees of certain approved corporations, permit    
single family real estate loans with loan-to-value ratios in excess of 80%      
without requiring primary mortgage insurance. For these loans, however, the     
applicable corporate employer generally guarantees the excess of the amount of  
the mortgage loan over the 80% loan-to-value amount. Certain other corporate    
relocation programs permit the providing of subordinate financing by the        
corporate employer at the time of the origination of the first priority         
mortgage loan by an Affiliated Originator.                                      

Each Affiliated Originator's underwriting standards are designed to evaluate
a borrower's credit standing and repayment ability and the value and adequacy   
of the mortgaged property as collateral. In the case of a Converted Mortgage    
Loan (as defined in Appendix A), the borrower's repayment ability will have     
been determined only at origination on the basis of such borrower's then-       
current income and obligations and interest rates for adjustable interest rate  
mortgage loans which, traditionally, have been lower than the interest rates    
charged by mortgage lenders on fixed interest rate mortgage loans. The          
borrowers at their exclusive options may elect to convert their mortgage loans  
into fixed interest rate loans or to continue with the adjustable interest      
rate                                                                            

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features. A borrower's conversion option is conditional only upon a review by   
the applicable Affiliated Originator of the loan payment history and payment    
of a conversion fee. It is possible that the fixed interest rate payable by     
the borrower upon conversion will be higher than the adjustable interest rate   
otherwise payable. In that event, the borrower's capacity to repay the loan     
may be reduced.                                                                 

Unless otherwise specified in the Prospectus Supplement, no ARM Pool will   
contain ARMs which provide for conversion options.                              

Each Affiliated Originator originates Buydown Mortgage Loans (as defined in 
"The Pools-Mortgage Loans"). Unless otherwise specified in the applicable       
Prospectus Supplement, (i) during the buydown period, each of the Buydown       
Mortgage Loans will provide for payments payable by the Mortgagor based on a    
hypothetical reduced interest rate (the "buydown mortgage rate") that will not  
have been more than 5% below the mortgage rate at origination, (ii) the annual  
increase in the buydown mortgage rate during the buydown period will not        
exceed 1% or in the case of tiered payment Mortgage Loans the annual increase   
in the mortgagors' monthly payment will increase as described in the "The       
Pools--Mortgage Loans" and (iii) the buydown period will not exceed three       
years in the case of Citibank Pools and Buydown Mortgage Loans originated by    
the Florida branches of CFSB, five years in the case of CMI Pools, and six      
years in the case of CFSB Pools (other than those Buydown Mortgage Loans        
originated by its Florida branches). For all Pools, with respect to Mortgage    
Loans originated prior to October 1, 1991, the maximum amount of the buydown    
funds that may be contributed by the seller or builder of the related           
Mortgaged Property is limited to 9% of the Original Value of the Mortgaged      
Property; with respect to Mortgage Loans originated on or after October 1,      
1991, the maximum amount of buydown funds that may be contributed by the        
seller or builder of the related Mortgaged Property is limited to 6% of the     
Original Value of the Mortgaged Property. These limitations do not apply to     
contributions from the Mortgagor or immediate relatives or the employer of the  
mortgagor. Except as may be otherwise indicated in the applicable Prospectus    
Supplement, the Mortgagor under each Buydown Mortgage Loan will have been       
qualified at an interest rate which is not more than 5% per annum below the     
current mortgage rate at origination. Accordingly, the repayment of a Buydown   
Mortgage Loan is dependent on the ability of the Mortgagor to make larger       
monthly payments after the buydown funds have been depleted and, for certain    
Buydown Mortgage Loans, while such funds are being depleted.                    

All the above described Affiliated Originators (other than Citibank)        
purchase mortgage loans originated by other parties. Except as may be           
otherwise specified in the applicable Prospectus Supplement, mortgage loans     
acquired from other parties, other than in a bulk purchase, are reviewed by     
such Affiliated Originators or by unaffiliated third parties under contracts    
with such Affiliated Originators for compliance with the above described        
underwriting criteria, and such Affiliated Originators have the right to        
reject loans which fail to conform to such criteria. In connection with an      
acquisition of mortgage loans in a bulk purchase, (i.e., loans aggregating      
more than $15,000,000) from a nationally recognized mortgage loan originator,   
the acquiring Affiliated Originator will review the selling originator's        
underwriting policies and procedures with a view to their compliance with such  
Affiliated Originator's or FNMA/FHLMC underwriting standards and, in addition,  
will conduct a limited mortgage loan file review.                               

LOAN UNDERWRITING POLICIES OF THE CITIMAE ORIGINATORS                           

Except as described below, each Mortgage Loan contributed to the Trust by a 
CitiMae Originator has satisfied the credit, appraisal and underwriting         
guidelines established by CitiMae or one of its affiliates, as set forth in     
its Sellers' Guide, which forms a part of the agreement pursuant to which       
unaffiliated loan originators sell mortgage loans to CitiMae or one of its      
affiliates. Such underwriting guidelines may be varied in cases deemed          
appropriate by CitiMae or one of its affiliates. To determine satisfaction of   
such underwriting guidelines, CitiMae or a loan reviewer reviewed the Mortgage  
Loans.                                                                          

CitiMae's underwriting guidelines are intended to evaluate the Mortgagor's  
credit standing and repayment ability and the value and adequacy of the         
Mortgaged Property as collateral. CitiMae's underwriting guidelines are         
applied in a standard procedure which complies with applicable federal and      
state laws and regulations.                                                     

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Initially, a prospective Mortgagor is required to fill out a detailed           
application designed to provide pertinent credit information. As part of the    
description of the Mortgagor's financial condition, the Mortgagor is required   
to provide a current balance sheet describing assets and liabilities and a      
statement of income and expenses, as well as an authorization to apply for a    
credit report which summarizes the Mortgagor's credit history with local        
merchants and lenders and any record of bankruptcy. In addition, an employment  
verification is obtained from the Mortgagor's employer wherein the employer     
reports the length of employment with that organization, the current salary,    
and an indication as to whether it is expected that the Mortgagor will          
continue such employment in the future. If a prospective Mortgagor is self-     
employed, the Mortgagor is required to submit copies of signed tax returns.     
The Mortgagor also authorizes deposit verification at all financial             
institutions where the Mortgagor has demand or savings accounts.                

Once the employment and deposit verifications and the credit report are     
received, a determination is made as to whether the prospective Mortgagor has   
sufficient monthly income available (i) to meet the Mortgagor's monthly         
obligations on the proposed mortgage loan and other expenses related to the     
Mortgaged Property (such as property taxes, hazard insurance and maintenance    
and utility costs) and (ii) to meet other financial obligations and monthly     
living expenses.                                                                

In determining the adequacy of the property as collateral, an independent   
appraisal is made of each property considered for financing. The appraiser is   
required to inspect the property and verify that it is in good condition and    
that construction, if new, has been completed. The appraisal is based on the    
appraiser's judgment of values, giving appropriate weight to both the market    
value of comparable homes and the cost of replacing the property.               

CitiMae and its affiliates employ alternative underwriting guidelines for   
certain qualifying mortgage loans underwritten by CitiMae and its affiliates.   
Depending on the facts and circumstances of a particular case, CitiMae may      
accept mortgage loans based upon limited documentation that eliminates the      
need for either income verification and/or asset verification. The objective    
of the limited documentation guidelines is to shift the emphasis of the         
underwriting process from the credit standing of the Mortgagor to the value     
and adequacy of the Mortgaged Property as collateral. A borrower(s) ability     
and willingness to repay a mortgage loan in a timely manner must be             
demonstrated by the quality, quantity and durability of income history,         
history of debt management and net worth accumulation. If greater than 10% of   
the Mortgage Loans by aggregate Adjusted Balance as of the Cut-Off Date were    
originated under limited documentation guidelines, the percentage of Mortgage   
Loans originated under such guidelines will be as provided in the Prospectus    
Supplement.                                                                     

Depending upon the facts and circumstances of a particular case, CitiMae or 
one of its affiliates may accept mortgage loans based upon seasoning and        
payment histories without obtaining standard underwriting documentation. The    
objective of the seasoned underwriting guidelines is to shift the emphasis of   
the underwriting process from the credit standing and repayment ability of the  
Mortgagor at the time of origination to the actual repayment performance of     
the related mortgage loan. If greater than 10% of the Mortgage Loans (by        
Adjusted Balance as of the Cut-Off Date) were originated under seasoned         
mortgage loan guidelines, the percentage of such Mortgage Loans by Adjusted     
Balance will be provided in the Prospectus Supplement.                          

LOAN UNDERWRITING STANDARDS OF THIRD PARTY ORIGINATORS                          

If Third Party Loans are included in a Pool, the underwriting policies and  
guidelines of the related Third Party Originators may not be identical to       
those set forth above for the Affiliated Originators or for CitiMae. As part    
of CMI's process in purchasing Third Party Loans, CMI will review the Third     
Party Loans to determine whether the Third Party Loans would generally conform  
to CMI's underwriting standards. The Third Party Loans will be credit scored    
and reunderwritten, in each case in whole or in part, by CMI in order to        
determine whether the underwriting process for the Third Party Loans            
adequately assessed the borrower's ability to repay and the adequacy of the     
property as collateral, based on CMI's underwriting standards.                  

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DELINQUENCY, FORECLOSURE AND LOSS CONSIDERATIONS AND EXPERIENCE 

LOSS AND DELINQUENCY CONSIDERATIONS                                             

There can be no assurance that the foreclosure and delinquency experience on
the Mortgage Loans underlying the CitiMortgageCertificates or the Certificates  
will be comparable to that set forth below. The Mortgage Loans underlying the   
CitiMortgageCertificates or the Certificates may have a different range of      
remaining maturities from those represented by the tables below. Furthermore,   
general economic conditions generally affect levels of delinquencies, defaults  
and foreclosures. Historically, delinquencies, defaults and foreclosures do     
not reach their peak until sometime after the lowest point in an economic       
cycle. Finally, the residential real estate market in a particular area could   
experience an overall decline in property values such that the then-current     
loan-to-value ratios of the Mortgage Loans underlying the                       
CitiMortgageCertificates or the Certificates could be higher, and could be      
substantially higher, than such ratios at origination. In addition, property    
values could decline to the point that the amounts owing on the Mortgage Loans  
underlying all or part of the CitiMortgageCertificates or the Certificates and  
any secondary financing on the related mortgaged properties could become equal  
to or greater than the value of such mortgaged properties. In that event, the   
actual rate of delinquencies and the number of foreclosures could be higher     
than those previously experienced. In addition, the costs and expenses of       
foreclosure, together with any damage to or deterioration of the Mortgaged      
Property, may result in a determination by the Servicer that foreclosure would  
not increase the net proceeds of liquidation available for distribution to      
Certificateholders. The Servicer is not required under the Pooling Agreement    
to expend its own funds to foreclose on a defaulted Mortgage Loan unless it     
generally determines that foreclosure would increase such net proceeds and its  
expenditures will be recoverable.                                               

In recent years, California, the New York Metropolitan Area and several     
other regions have experienced significant declines in housing prices. In       
addition, California and certain other regions have experienced natural         
disasters, such as earthquakes, fires, floods and hurricanes, which have        
adversely affected property values in the affected areas. Any direct damage to  
a mortgaged property securing a Mortgage Loan caused by such disasters, as      
well as any deterioration in housing prices or values or the existence of       
adverse economic conditions which adversely affect the ability of mortgagors    
to make timely and full payments on Mortgage Loans, may increase the            
likelihood of delinquencies, and the likelihood and magnitude of losses, on     
the Mortgage Loans, which may result in losses on the Certificates to the       
extent such losses are not covered by insurance or any credit enhancement.      
Such delinquencies or losses, if occurring, may increase the likelihood of      
foreclosures and prepayments on Mortgage Loans, which may in turn have an       
adverse effect on the yield of the Certificates or of certain classes of the    
CitiCertificates.                                                               

The Mortgaged Properties (as defined in Appendix A) may be located in "anti-
deficiency" states where, in general, a lender providing credit on a one- to    
four-family property may not seek a deficiency judgment against the Mortgagor   
but rather must look solely to the property for repayment in the event of       
foreclosure. Each Affiliated Originator's, CitiMae's and each Third Party       
Originator's underwriting standards in all states (including such anti-         
deficiency states) require underwriting officers to be satisfied that the       
value of the property being financed, as indicated by the appraisal, currently  
supports the outstanding loan balance. See Appendix A: "The Mortgage Loans and  
CitiMortgageCertificates--Certain Legal Aspects of the Mortgage Loans--Anti-    
Deficiency Legislation and Other Limitations on Lenders." However, there can    
be no assurance that property values will not decline after the Mortgage Loan   
is originated.                                                                  

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DELINQUENCY AND FORECLOSURE EXPERIENCE OF AFFILIATED ORIGINATORS' SERVICED      
PORTFOLIO                                                                       

The delinquency and foreclosure experience on the portfolio of one- to four-
family conventional residential first mortgage loans originated or acquired by  
the Affiliated Originators and certain other affiliates of CMI and serviced by  
CMI for the periods indicated is set forth in the following table. During the   
period covered in the table, this portfolio decreased from $39.0 billion on     
December 31, 1993 to $34.2 billion on September 30, 1996. CMI's total serviced  
portfolio includes both fixed and adjustable interest rate mortgage loans,      
including Buydown Mortgage Loans, tiered-payment mortgage loans, loans with     
stated maturities of 15 to 30 years and other types of mortgage loans having a  
variety of payment characteristics, and includes mortgage loans secured by      
mortgaged properties in geographic locations that may not be representative of  
the geographic distribution or concentration of the Mortgaged Properties        
securing the Mortgage Loans. There can be no assurance that the delinquency     
and foreclosure experience set forth below with respect to CMI's total          
serviced portfolio will be similar to the results that may be experienced with  
respect to the Mortgage Loans underlying the CitiMortgageCertificates or the    
Certificates.                                                                   

DELINQUENCY AND FORECLOSURE EXPERIENCE OF SERVICED PORTFOLIO  
OF ONE- TO FOUR-FAMILY RESIDENTIAL MORTGAGE LOANS (1) 

                                                        [Enlarge/Download Table]

                                  AS OF                   AS OF                   AS OF                   AS OF         
                            DECEMBER 31, 1993       DECEMBER 31, 1994       DECEMBER 31, 1995      SEPTEMBER 30, 1996   
                         ----------------------- ----------------------- ----------------------- -----------------------
                                     BY DOLLAR               BY DOLLAR               BY DOLLAR               BY DOLLAR  
                                     AMOUNT OF               AMOUNT OF               AMOUNT OF               AMOUNT OF  
                         BY NO. OF     LOANS     BY NO. OF    LOANS      BY NO. OF    LOANS      BY NO. OF    LOANS     
                           LOANS   (IN MILLIONS)   LOANS   (IN MILLIONS)   LOANS   (IN MILLIONS)   LOANS   (IN MILLIONS)
                         --------- ------------- --------- ------------- --------- ------------- --------- -------------
                                                                                                                        
Total Portfolio.........  388,748    $39,000.7    350,751    $35,590.9    330,529    $34,880.5    313,935    $34,152.7  
Period of Delinquen-                                                                                                    
 cy(/2/)                                                                                                                
  30-59 Days............   13,973    $ 1,406.1     12,309    $ 1,237.3     12,216    $ 1,213.7     10,209    $ 1,003.8  
  60-89 Days............    4,224    $   450.5      3,847    $   412.3      4,098    $   431.7      2,632    $   274.8  
  90 Days or more.......    6,870    $   902.5      5,967    $   740.4      5,724    $   676.2      3,419    $   396.4  
Total Loans Delinquent..   25,067    $ 2,759.1     22,123    $ 2,390.0     22,038    $ 2,321.6     16,260    $ 1,675.0  
Delinquency Ratio.......     6.45%        7.07%      6.31%        6.72%      6.67%        6.66%      5.18%        4.90% 
Foreclosures(/3/).......    9,920    $ 1,399.8      6,245    $   835.7      6,067    $   793.2      6,246    $   759.9  
Foreclosure Ratio.......     2.55%        3.59%      1.78%        2.35%      1.84%        2.27%      1.99%        2.23% 

--------                                                                        
(1) The table includes mortgage loans serviced by CMI and held by an            
 Originator, in its own portfolio, and certain affiliates' portfolios. The
table also includes mortgage loans serviced by CMI which have been      
packaged and sold to FNMA and FHLMC, in transactions pursuant to        
registration statements under the Securities Act and in transactions    
  exempt from the registration requirements of the Securities Act. The table
  does not include loans purchased strictly for servicing revenue or, in the
case of the Florida branches of CFSB, loans originated prior to the     
acquisition by the Citicorp group of the Florida branches of CFSB in    
January 1984. The portfolio includes cooperative loans. Since May 30,   
1994, CMI has transferred the servicing of 4,095 delinquent loans and   
loans in foreclosure totaling $580.0 million.                           
(2) The Period of Delinquency is based upon the number of days past due on a    
 contractual basis. No mortgage loan is considered delinquent for purposes
of this table until 30 days past due on a contractual basis.            
(3) The table shows mortgage loans for which foreclosure proceedings had been   
instituted at the dates indicated.                                      

Unless otherwise specified in the Prospectus Supplement, CMI will act as    
subservicer of the Mortgage Loans in the CMI Pools, CFSB Pools and Citibank     
Pools (each as defined in Appendix A).                                          

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DELINQUENCY, FORECLOSURE AND LOSS EXPERIENCE OF AFFILIATED ORIGINATORS'         
SECURITIZED PORTFOLIO                                                           

The delinquency, foreclosure and loss experience on the one- to four-family 
conventional residential first mortgage loans that were originated or acquired  
and subsequently sold by the Affiliated Originators, CMSI and certain other     
affiliates of CMI pursuant to registration statements under the Securities Act  
and serviced by CMI is set forth in the following tables for the periods        
indicated. During the period covered in the tables, this group of securitized   
mortgage loans decreased from $7.7 billion on December 31, 1993 to $5.6         
billion on September 30, 1996. CMI's total securitized portfolio includes both  
fixed and adjustable interest rate mortgage loans, including Buydown Mortgage   
Loans, tiered-payment mortgage loans, loans with stated maturities of 15 to 30  
years and other types of mortgage loans having a variety of payment             
characteristics, and includes mortgage loans secured by mortgaged properties    
in geographic locations that may not be representative of the geographic        
distribution or concentration of the Mortgaged Properties securing the          
Mortgage Loans.                                                                 

DELINQUENCY AND FORECLOSURE EXPERIENCE OF SECURITIZED 
ONE- TO FOUR-FAMILY RESIDENTIAL MORTGAGE LOANS  

                                                        [Enlarge/Download Table]

                                 AS OF                   AS OF                   AS OF                   AS OF         
                           DECEMBER 31, 1993       DECEMBER 31, 1994       DECEMBER 31, 1995      SEPTEMBER 30, 1996   
                        ----------------------- ----------------------- ----------------------- -----------------------
                                    BY DOLLAR               BY DOLLAR               BY DOLLAR               BY DOLLAR  
                                    AMOUNT OF               AMOUNT OF               AMOUNT OF               AMOUNT OF  
                        BY NO. OF     LOANS     BY NO. OF     LOANS     BY NO. OF     LOANS     BY NO. OF     LOANS    
                          LOANS   (IN MILLIONS)   LOANS   (IN MILLIONS)   LOANS   (IN MILLIONS)   LOANS   (IN MILLIONS)
                        --------- ------------- --------- ------------- --------- ------------- --------- -------------
                                                                                                                       
Total Portfolio........  58,312     $7,700.9     53,693     $7,376.5     48,182     $6,579.9     42,042     $5,610.6   
Period of                                                                                                              
 Delinquency(/1/)                                                                                                      
 30-59 Days............   2,193     $  281.2      1,885     $  235.2      1,768     $  206.9      1,400     $  162.5   
 60-89 Days............     667     $   89.1        578     $   80.1        578     $   73.2        363     $   43.2   
 90 Days or more.......   1,135     $  210.4      1,044     $  182.9        889     $  138.6        458     $   66.7   
Total Loans Delinquent.   3,995     $  580.7      3,507     $  498.2      3,235     $  418.7      2,221     $  272.4   
Delinquency Ratio......    6.85%        7.54%      6.53%        6.75%      6.71%        6.36%      5.28%        4.86%  
Foreclosures(/2/)......   1,944     $  350.6      1,621     $  288.3      1,302     $  217.8      1,144     $  175.7   
Foreclosure Ratio......    3.33%        4.55%      3.02%        3.91%      2.70%        3.31%      2.72%        3.13%  

--------                                                                        
(1) The Period of Delinquency is based upon the number of days past due on a    
 contractual basis. No mortgage loan is considered delinquent for purposes
of this table until 30 days past due on a contractual basis.            
(2) The table shows mortgage loans for which foreclosure proceedings had been   
instituted at the dates indicated.                                      

The following table indicates the level of cumulative net losses with       
respect to securities sold pursuant to the Registration Statements. The amount  
of net losses was computed by aggregating the amount of draws for net losses    
against applicable credit enhancement and the amount of net losses not covered  
by credit enhancement, as indicated in the reports to Certificateholders for    
the securities sold under the Registration Statements.                          

LOSS EXPERIENCE OF SECURITIES ISSUED  
PURSUANT TO THE REGISTRATION STATEMENTS 

                                                        [Enlarge/Download Table]

                                   CUMULATIVE               AGGREGATE STATED AMOUNT OF                      
                           NET LOSSES (MILLIONS)(/1/) SECURITIES ISSUED (MILLIONS)(/1/)(/2/) LOSS RATIO(/3/)
                           -------------------------- -------------------------------------- ---------------
                                                                                                            
As of December 31, 1993...           $108.6                         $23,560.1                      .46%     
As of December 31, 1994...            215.6                          25,470.6                      .85%     
As of December 31, 1995...            331.1                          25,857.4                     1.28%     
As of September 30, 1996..                                                                                  
                                      396.5                          25,857.4                     1.53%     

--------                                                                        
(1) Rounded to the nearest hundred thousand.                                    
(2) The Aggregate Stated Amount of securities issued represents securities      
issued which have had at least one Distribution Date.                   
(3) Loss Ratio represents cumulative net losses as a percentage of the          
aggregate Stated Amount of securities issued under the Registration     
Statements.                                                             

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There can be no assurance that the delinquency, foreclosure or historical   
loss experience indicated in the preceding tables with respect to CMI's total   
securitized portfolio will be similar to the results that may be experienced    
with respect to the Mortgage Loans underlying the CitiMortgageCertificates or   
the Certificates.                                                               

DELINQUENCY AND FORECLOSURE EXPERIENCE OF CITIMAE ORIGINATORS' PORTFOLIO        

Historically, a variety of factors including the appreciation of real estate
values have limited CitiMae's loss and delinquency experience on its portfolio  
of master serviced mortgage loans. There can be no assurance that factors       
beyond CitiMae's control, such as national or local economic conditions or      
downturns in the real estate markets of its lending areas, will not result in   
increased rates of delinquencies and foreclosure losses in the future.          

The following table summarizes the foreclosure and delinquency experience,  
respectively, on the dates indicated on conventional first trust deed or        
mortgage loans master serviced by CitiMae (other than (i) mortgage loans        
originated pursuant to underwriting standards specified by certain agencies of  
various states, which mortgage loans were not reviewed to determine if such     
standards conform with CitiMae's underwriting standards, but which loans are    
serviced by CitiMae and (ii) mortgage loans which have not been sold by         
CitiMae or an affiliate of CitiMae). No assurances can be given that the        
foreclosure and delinquency experience presented in the table below will be     
indicative of such experience on the Mortgage Loans:                            

                                                        [Enlarge/Download Table]

                            AT SEPTEMBER 30,          AT MARCH 31,          AT SEPTEMBER 30,          AT MARCH 31,      
                                  1994                    1995                    1995                    1996          
                         ----------------------- ----------------------- ----------------------- -----------------------
                                     BY DOLLAR               BY DOLLAR               BY DOLLAR               BY DOLLAR  
                                     AMOUNT OF               AMOUNT OF               AMOUNT OF               AMOUNT OF  
                         BY NO. OF     LOANS     BY NO. OF     LOANS     BY NO. OF     LOANS     BY NO. OF     LOANS    
                           LOANS   (IN MILLIONS)   LOANS   (IN MILLIONS)   LOANS   (IN MILLIONS)   LOANS   (IN MILLIONS)
                         --------- ------------- --------- ------------- --------- ------------- --------- -------------
                                                                                                                        
Total Portfolio.........  25,971     $4,758.6     27,233     $5,074.2     28,092     $5,124.3     27,969     $4,843.0   
Period of Delinquency                                                                                                   
  30-59 days............     623     $   73.1        590     $   84.5        814     $  123.2        913     $  110.9   
  60-89 days............     121     $   19.7        113     $   16.3        169     $   28.1        225     $   29.2   
  90 days or more.......     125     $   24.5         92     $   16.4        162     $   30.2        171     $   31.4   
Total Loan Delinquent...     869     $  117.3        795     $  117.2      1,145     $  181.5      1,309     $  171.5   
Delinquency Ratio.......    3.35%        2.46%      2.92%        2.31%      4.08%        3.54%      4.70%        3.54%  
Foreclosures............     253     $   52.2        271     $   54.8        261     $   52.2        331     $   65.7   
Foreclosure Ratio.......    0.97%        1.10%      1.00%        1.08%      0.93%        1.02%      1.20%        1.40%  
Total Loans Delinquent                                                                                                  
 and in Foreclosure.....   1,122     $  169.5      1,066     $  172.0      1,406     $  233.7      1,640     $  237.2   
Total Delinquency and                                                                                                   
 Foreclosure Ratio......    4.32%        3.56%      3.91%        3.39%      5.00%        4.56%      5.90%        4.90%  

The increase in the delinquency and foreclosure experience from March 31,   
1995 to September 30, 1995 indicated in the table above is primarily the        
result of an increase in delinquencies in CitiMae's Mortgage Loan portfolio     
during such period and delinquencies related to the change of servicers in      
connection with the consolidation of servicing for certain CitiMae Mortgage     
Loans from various servicers to one servicer. The percentage increases in the   
delinquency and foreclosure experience by number of loans from September 30,    
1995 to March 31, 1996 indicated in the table above are in part due to the      
fact that the mortgage loans serviced by CitiMae during such period were        
relatively more seasoned than the mortgage loans serviced by CitiMae in         
earlier periods and more seasoned loans tends to have a higher delinquency and  
loss rate than newly originated mortgage loans. In addition, prepayments        
experienced on such mortgage loans over such period were generally higher with  
respect to the larger and better quality mortgage loans.                        

DELINQUENCY AND FORECLOSURE EXPERIENCE OF THIRD PARTY ORIGINATORS' PORTFOLIOS   

If Third Party Loans originated by any one Third Party Originator have an   
aggregate Adjusted Balance exceeding 10% of the aggregate Adjusted Balance of   
the Mortgage Loans in a Pool, the related Prospectus Supplement will describe   
the delinquency and foreclosure experience of such Third Party Originator.      

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CITICORP  

Citicorp is a holding company incorporated under the laws of Delaware on    
December 4, 1967 whose principal subsidiary is Citibank, N.A. The principal     
office of Citicorp is located at 399 Park Avenue, New York, New York 10043;     
its telephone number is (212) 559-1000.                                         

Through its subsidiaries and affiliates, including the Issuer, CMI, CFSB,   
Citibank and CitiMae, Citicorp is a multinational financial services            
organization serving the financial needs of businesses, governments, financial  
institutions and individuals in the United States and throughout the world.     

USE OF PROCEEDS 

The net proceeds to be received by the Issuer from the sale of the          
Certificates are intended to be used for the purpose of originating or          
purchasing new residential mortgage loans from the Originators and for other    
general corporate purposes, which may include the repayment of indebtedness to  
Citicorp, its affiliates or unaffiliated parties. Certificates will be sold in  
Series from time to time. The timing and amount of such sales will be           
dependent upon a number of factors, including the volume of mortgage loans      
acquired by the Issuer, prevailing interest rates, availability of funds and    
general market conditions.                                                      

THE POOLING AGREEMENTS  

REPORTS TO CERTIFICATEHOLDERS                                                   

For each Series, the Trustee will include with each distribution to holders 
of CitiCertificates, and will send to holders of Residual Certificates, a       
statement prepared by the Issuer setting forth the following information (per   
Single Certificate, as to (i) through (iii) below):                             

(i) to each Certificateholder of a Class of CitiCertificates on which   
distributions in reduction of the Stated Amount are then being made, the    
amount of such payment which represents a reduction in the Stated Amount    
and the amount which represents interest, the amount, if any, which         
represents losses and the Stated Amount of a Single Certificate of each     
Class after giving effect to the reduction of Stated Amount on such         
Distribution Date;                                                          

(ii) to each Certificateholder of a Class of CitiCertificates on which a
distribution of interest only is then being made, the amount of such        
interest payment and the aggregate Stated Amount of Certificates            
outstanding of each Class after giving effect to reductions of Stated       
Amount, if any, made on such Distribution Date and on any Special           
Distribution Date occurring subsequent to the last such report and after    
including in the aggregate Stated Amount of Accrual CitiCertificates        
outstanding the amount of any accrued interest added to the Stated Amount   
thereof on such Distribution Date.                                          

(iii) to each holder of an Accrual CitiCertificate (but only if such    
holder shall not have received on such Distribution Date a distribution of  
interest equal to the entire amount of interest accrued on such             
CitiCertificate during the Interest Accrual Period with respect to such     
Distribution Date):                                                         

(A) the information contained in the report delivered pursuant to   
clause (ii) above,                                                      

(B) the interest accrued on a Single Certificate of such Class of   
Accrual CitiCertificates during the Interest Accrual Period with        
respect to such Distribution Date and added to the Stated Amount of     
such Accrual CitiCertificate, and                                       

(C) the Stated Amount of a Single Certificate of such Class of      
Accrual CitiCertificate after giving effect to the addition thereto of  
all interest accrued thereon during such Interest Accrual Period;       

(iv) the amount of servicing compensation received by the Issuer during 
the preceding Reporting Period and such other customary information as the  
Issuer deems necessary or desirable to enable Certificateholders to prepare 
their tax returns;                                                          

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(v) the book value of any real estate acquired by the Pool through      
foreclosure or otherwise;                                                   

(vi) the number and aggregate principal amount of Mortgage Loans        
delinquent 30 days and 60 or more days;                                     

(vii) the amount remaining under any form of credit support after giving
effect to the declining Amount Available and any payments thereunder and    
other amounts charged thereto on the applicable Distribution Date;          

(viii) the aggregate amount received in respect of Mortgage Loans and   
Mortgage Certificates during the related Due Period; and                    

(ix) the aggregate Adjusted Balance of the Mortgage Loans as of the last
day of the month next preceding the month of such distribution after giving 
effect to payments on the Mortgage Loans due on the related Due Date and    
Principal Prepayments distributed on the Distribution Date.                 

The Issuer will provide Certificateholders that are federally insured       
savings and loan associations with certain reports and with access to           
information and documentation regarding the Mortgage Loans evidenced by such    
Series sufficient to permit such associations to comply with applicable         
regulations of the Office of Thrift Supervision (the "OTS"), the successor to   
the Federal Home Loan Bank Board. (Section 3.05)                                

In addition to the foregoing, the Trustee shall file with the Internal      
Revenue Service and applicable state and local taxing authorities and furnish   
or make available to Certificateholders such statements or information at the   
times and in the manner as may be required by the Code or other tax laws and    
regulations in accordance with the Pooling Agreement.                           

EVIDENCE AS TO COMPLIANCE                                                       

The Pooling Agreement for each Series will provide that a firm of           
independent public accountants will furnish to the Trustee and to holders of a  
certain percentage of Certificates outstanding (i) on or before March 31, of    
each year, beginning with March 31 in the year which begins not less than       
three months after the date of the initial issuance of Certificates of that     
Series, a statement as to compliance with the Pooling Agreement relating to     
the servicing of the Affiliated Mortgage Loans and (ii) on or before September  
30, of each year, beginning with September 30 in the year which begins not      
less than three months after the date of initial issuance of Certificates of    
that Series, a statement as to compliance with the Pooling Agreement relating   
to the servicing of the CitiMae Mortgage Loans. (Section 3.09) The Pooling      
Agreement will also provide for delivery to the Trustee and to holders of a     
certain percentage of Certificates outstanding on or before March 31 and        
September 30, respectively, of each year with respect to the Affiliated         
Mortgage Loans and September 30 with respect to the CitiMae Mortgage Loans,     
beginning with March 31 and September 31, respectively, in the year which       
begins not less than three months after the date of the initial issuance of     
Certificates of that Series, a statement signed by an officer of the Issuer to  
the effect that the Issuer has fulfilled its obligations under such Pooling     
Agreement throughout the preceding year or, if there has been a default in the  
fulfillment of any such obligation, describing each such default. (Section      
11.01)                                                                          

Certificateholders may obtain copies of such statements by request in       
writing addressed to the Trustee.                                               

CERTAIN MATTERS REGARDING THE ISSUER AND CITICORP                               

The Pooling Agreement for each Series will provide that the Issuer may not  
resign from its obligations and duties as servicer thereunder, except upon a    
determination evidenced by an opinion of counsel that the Issuer's performance  
of such duties is no longer permissible under applicable law or upon the        
consent of the Trustee and holders of more than 66 2/3% of the Stated Amount    
of CitiCertificates and of more than 66 2/3% of the Percentage Interests of     
Residual Certificates then outstanding. No such resignation will become         
effective until the Trustee or a successor servicer has assumed the Issuer's    
obligations and duties under such Pooling Agreement. Citicorp's obligations     
under the Guaranty for any Series for which a Guaranty is provided for in the   
related Prospectus Supplement will, upon issuance thereof, be irrevocable;      
provided, however, that the Issuer may substitute in                            

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whole or in part another form of credit support for Citicorp's Guaranty, as     
described herein. See "--Amendment" below. (Section 6.04)                       

The Pooling Agreement will further provide that neither the Issuer nor      
Citicorp, if Citicorp has issued a Guaranty, nor any of their respective        
directors, officers, employees and agents, shall be under any liability to the  
Pool or the Certificateholders for taking any action or for refraining from     
taking any action pursuant to the Pooling Agreement, or for errors in           
judgment; provided, however, that neither the Issuer nor Citicorp, if Citicorp  
has issued a Guaranty, nor any such person will be protected against any        
liability which would otherwise be imposed by reason of willful misfeasance,    
bad faith or gross negligence in the performance of duties or by reason of      
reckless disregard of obligations and duties thereunder. In addition, the       
Pooling Agreement will provide that neither the Issuer nor Citicorp, if         
Citicorp has issued a Guaranty, is under any obligation to appear in,           
prosecute or defend any legal action which is not incidental to the Issuer's    
servicing responsibilities under the Pooling Agreement and which in its         
opinion may involve it in any expense or liability. The Issuer may, however,    
in its discretion undertake any such action which it may deem necessary or      
desirable in respect of the Pooling Agreement and the rights and duties of the  
parties thereto and the interests of the Certificateholders thereunder. In      
such event, the legal expenses and costs of such action and any liability       
resulting therefrom will be expenses, costs and liabilities of the Pool and     
the Issuer and Citicorp will be entitled to be reimbursed therefor out of the   
Certificate Account. (Section 6.03)                                             

The Issuer or Citicorp, if Citicorp has issued a Guaranty, and any of its   
directors, officers, employees or agents will be indemnified and held harmless  
by the Pool against any loss, liability or expense incurred in connection with  
any suit in equity, action at law or other proceedings, other than any loss,    
liability or expense incurred by reason of willful misfeasance, bad faith or    
gross negligence in the performance of duties or reckless disregard of          
obligations and duties under the Pooling Agreement. (Section 6.03) Any          
corporation into which the Issuer may be merged or consolidated, or any         
corporation resulting from any merger, conversion or consolidation to which     
the Issuer is a party, or any corporation succeeding to the business of the     
Issuer, or any entity, more than 50% of which is owned, directly or             
indirectly, by Citicorp, which assumes the obligations of the Issuer, will be   
the successor of the Issuer under the Pooling Agreement; provided that, in the  
event any such assumption is made, the Issuer will not be released from any of  
its obligations thereunder. (Section 6.02) The Issuer may at any time           
subcontract any duties under the Pooling Agreement to any entity, including an  
entity more than 50% of which is owned, directly or indirectly, by Citicorp.    
In the event of any such subcontract, the Issuer will remain responsible for    
the subcontractor's performance in accordance with the Pooling Agreement.       
(Section 6.06)                                                                  

EVENTS OF DEFAULT                                                               

Events of Default under the Pooling Agreement for each Series will consist  
of (i) any failure by the Issuer (a) to distribute to Certificateholders of     
that Series any required payment (assuming the Issuer is the paying agent) or   
(b) to pay over to the paying agent for distribution to Certificateholders of   
that Series any required payment (assuming the Issuer is not the paying         
agent), provided that any such failure in (a) or (b) may be remedied by making  
the required distribution to Certificateholders (A) within ten business days    
of receiving notice of any such failure if the Issuer distributed to            
Certificateholders or paid over to the paying agent less than the amount of     
such required payment due to an error in calculating the amount of such         
required payment and (B) within three business days of receiving notice if the  
Issuer did not distribute to Certificateholders or pay over to the paying       
agent the full amount in respect of such required payment for any reason other  
than that set forth in clause (A) above; (ii) any failure by the Issuer to      
repurchase any Mortgage Loan or Mortgage Certificate as required under the      
Pooling Agreement which continues unremedied for 60 business days after the     
giving of written notice of such failure to the Issuer by the Trustee, or the   
issuer of any form of credit support or to the Issuer and the Trustee by the    
holders of Certificates evidencing ownership interests aggregating not less     
than 66 2/3% of the Certificates; (iii) any failure by the Issuer duly to       
observe or perform in any material respect any of its other covenants or        
agreements in such Pooling Agreement, if such failure materially affects the    
rights of Certificateholders and continues unremedied for 60 days after the     
giving of written notice of such failure to the Issuer by the Trustee, or the   
issuer of any form of credit support or to the Issuer and the Trustee by the    
holders of Certificates evidencing ownership interests aggregating not less     
than 66 2/3% of the Certificates; and (iv) certain                              

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events of insolvency, readjustment of debt, marshalling of assets and           
liabilities or similar proceedings and certain actions by the Issuer            
indicating its insolvency, reorganization or inability to pay its obligations.  
(Section 7.01)                                                                  

RIGHTS UPON EVENT OF DEFAULT                                                    

As long as an Event of Default under the Pooling Agreement for any Series   
remains unremedied, the Trustee or holders of Certificates evidencing           
ownership interests aggregating not less than 66 2/3% of the Certificates may   
terminate all of the rights and obligations of the Issuer under such Pooling    
Agreement whereupon the Trustee will succeed to all the responsibilities,       
duties and liabilities of the Issuer under such Pooling Agreement and will be   
entitled to similar compensation arrangements. The Issuer shall be entitled to  
payment of certain amounts payable to it under the Pooling Agreement in         
respect of services rendered notwithstanding the termination of its activities  
as servicer. No such termination will affect in any manner the issuer's         
obligations under any credit support. In the event that the Trustee is          
unwilling or unable to act as servicer, it may appoint, or petition a court of  
competent jurisdiction for the appointment of, a housing and home finance       
institution with a net worth of at least $5,000,000 to act as successor         
servicer under such Pooling Agreement. The Trustee and such successor may       
agree upon the servicing compensation to be paid, which in no event may be      
greater than the Servicing Compensation to the Issuer under such Pooling        
Agreement. (Sections 7.01 and 7.02)                                             

No Certificateholder of any Series will have the right under the applicable 
Pooling Agreement to institute any proceeding with respect to such Pooling      
Agreement, unless such holder previously has given to the Trustee written       
notice of default and unless the holders of Certificates evidencing ownership   
interests aggregating not less than 66 2/3% of the Certificates 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 has neglected or refused to institute any such          
proceedings. (Section 10.03) However, the Trustee is under no obligation to     
exercise any of the trusts or powers vested in it by the Pooling Agreement for  
any Series or to make any investigation of matters arising thereunder or to     
institute, conduct or defend any litigation thereunder or in relation thereto   
at the request, order or direction of any of the Certificateholders, 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. (Section 8.02)                                              

AMENDMENT                                                                       

The Pooling Agreement and any form of credit support for each Series may be 
amended by the Issuer, the issuer of credit support and the Trustee, without    
Certificateholder consent, (i) to cure any ambiguity, (ii) to correct or        
supplement any provision therein which may be inconsistent with any other       
provision therein, (iii) to make any other provisions with respect to matters   
or questions arising under such Pooling Agreement or credit support which are   
not inconsistent with the provisions of such Pooling Agreement or credit        
support, as the case may be, including replacing such credit support (other     
than any Class or Classes of subordinated Certificates) in whole or in part by  
other forms of credit support as described herein or in the related Prospectus  
Supplement, (iv) to comply with any requirements imposed by the Code or any     
regulations thereunder, including any requirement relating to maintaining the   
status of the Trust (as defined in the related Prospectus Supplement) or        
applicable portion or portions of the property thereof as one or more REMICs,   
as the case may be, or (v) to establish a "qualified reserve fund" within the   
meaning of Code Section 860G(a)(7)(B). The Pooling Agreement and any form of    
credit support for each Series may also be amended by the Issuer, the issuer    
of the credit support and the Trustee, without Certificateholder consent, if    
the Issuer delivers an opinion of counsel acceptable to the Trustee to the      
effect that such amendment will not materially adversely affect the interests   
of the Certificateholders. The Pooling Agreement and any form of credit         
support for each Series may also be amended by the Issuer, the issuer of        
credit support and the Trustee with the consent of the holders of Certificates  
evidencing ownership interests aggregating not less than 66 2/3% of each        
Affected Class for the purpose of adding any provisions to or changing in any   
manner or eliminating any of the provisions of such Pooling Agreement or form   
of credit support or modifying in any manner the rights of Certificateholders   
of that Series; provided, however that no such amendment may (i) decrease in    
any manner the amount of, or delay the timing of, payments or distributions     
received on Mortgage Loans or Mortgage Certificates which are required to be    

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distributed in respect of any such Certificate without the consent of the       
holder of such Certificate or (ii) reduce the aforesaid percentage of           
Certificates, the holders of which are required to consent to any such          
amendment, without the consent of the holders of all Certificates of each       
Affected Class then outstanding. (Section 10.01)                                

LIST OF CERTIFICATEHOLDERS                                                      

If the Trustee is not then the Certificate Registrar, the Issuer will       
provide or cause to be provided to the Trustee within 15 days after receipt of  
its written request a list of the names and addresses of all                    
Certificateholders of record of a particular Series as of the most recent       
record date for payment of distributions to Certificateholders of that Series.  
Upon written request of three or more Certificateholders of record of a Series  
of Certificates, for purposes of communicating with other Certificateholders    
with respect to their rights under the Pooling Agreement for such Series, the   
Trustee will afford such Certificateholders access during business hours to     
the most recent list of Certificateholders of that Series held by the Trustee.  
If such list is as of a date more than 90 days prior to the date of receipt of  
such Certificateholders' request, the Trustee shall promptly request from the   
Issuer a current list and will afford such requesting Certificateholders        
access to such list promptly upon receipt. (Section 5.05)                       

No Pooling Agreement will provide for the holding of any annual or other    
meeting of Certificateholders.                                                  

TERMINATION; REPURCHASE OF MORTGAGE LOANS AND MORTGAGE CERTIFICATES             

The obligations of the Issuer and the Trustee created by the Pooling        
Agreement for each Series will terminate upon the earlier of (a) a complete     
liquidation of the Pool as described in the Pooling Agreement and (b) the       
later of (i) the maturity or other liquidation of the last Mortgage Loan or     
Mortgage Certificate subject thereto and the disposition of all property        
acquired upon foreclosure or by deed in lieu of foreclosure of any such         
Mortgage Loan or Mortgage Certificate and (ii) the payment to                   
Certificateholders of that Series of all amounts in the Certificate Account     
required to be paid to them pursuant to such Pooling Agreement. In no event,    
however, will the trust created by any Pooling Agreement continue beyond the    
expiration of 21 years from the death of the last survivor of the descendants   
of a certain person specified in such Pooling Agreement living at the date of   
such Pooling Agreement. For each series the Issuer will give or cause to be     
given written notice of termination of the Pooling Agreement to each            
Certificateholder, and the final distribution will be made only upon surrender  
and the cancellation of the Certificates at an office or agency of the Trustee  
specified in the notice of termination. (Section 9.01) Interest shall not       
accrue for the period of any delay in the payment of a Certificate resulting    
from the failure of a holder to surrender the Certificate in accordance         
herewith.                                                                       

The Pooling Agreement for each Series may permit, but not require, the      
Issuer or the holders of Residual Certificates to repurchase from the Pool for  
such Series, as part of a plan to complete liquidation of the Pool, all         
remaining Mortgage Loans and Mortgage Certificates and all property acquired    
in respect of such Mortgage Loans and Mortgage Certificates at a price equal    
to the sum of (i) 100% of the unpaid principal balance of such Mortgage Loans   
or Mortgage Certificates on the first day of the month of repurchase (after     
giving effect to payments of principal due on such first day), together with    
accrued interest thereon at the then applicable Pass-Through Rate to but not    
including the Due Date in the month in which the related distribution is made   
to Certificateholders, in the case of a repurchase by the Issuer after          
subtracting any unreimbursed payments under the credit support for such Series  
and any unreimbursed Voluntary Advances with respect to such Mortgage Loans     
(other than such payments or advances with respect to Liquidating Loans and     
interest in excess of the applicable Pass-Through Rate), and (ii) the current   
appraised value of acquired property. The exercise of such right and the        
related liquidation will effect early retirement of the Certificates of that    
Series, but such right so to repurchase is subject to (i) the aggregate         
Adjusted Balance of the Mortgage Loans or Mortgage Certificates for such        
Series at the time of repurchase being equal to or less than the percentage     
(generally 5%), specified in the applicable Prospectus Supplement and Pooling   
Agreement, of the aggregate Adjusted Balance of such Mortgage Loans or          
Mortgage Certificates as of the Cut-Off Date for that Series and (ii) such      
repurchase and related distributions (A) constituting a "qualified              
liquidation" within the meaning of Code Section 860F(a)(4)(A), (B)              

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not adversely affecting the REMIC status of each Pool and (C) not otherwise     
causing each such Pool to be subject to tax for the taxable year in which the   
repurchase occurs or any prior taxable year. (Section 9.01)                     

DUTIES OF THE TRUSTEE                                                           

The Trustee makes no representations as to the validity or sufficiency of   
the Pooling Agreement, the Certificates or of any Mortgage Loan or Mortgage     
Certificate or related document, and is not accountable for the use or          
application by the Issuer of any funds paid to it in respect of the             
Certificates, the Mortgage Loans or the Mortgage Certificates, or deposited     
into or withdrawn from the Certificate Account or the Servicing Account by the  
Issuer. The Trustee shall have no liability for any losses incurred as a        
result of (i) any failure of each Pool to qualify as a REMIC under the Code,    
(ii) any termination, inadvertent or otherwise, of each Pool's status as a      
REMIC or (iii) any "prohibited transaction" as defined in Code Section 860F(a)  
unless such losses were as a result of the Trustee's negligence, bad faith or   
failure to perform its duties under the Pooling Agreement. (Section 8.03) If    
no Event of Default has occurred, the Trustee is required to perform only       
those duties specifically required of it under the Pooling Agreement. However,  
upon receipt of the various certificates, reports or other instruments          
required to be furnished to it, the Trustee is required to examine them to      
determine whether they conform to the requirements of the Pooling Agreement.    
(Section 8.01)                                                                  

THE TRUSTEE                                                                     

The identity of the commercial bank, savings and loan association or trust  
company named as the Trustee for each Series of Certificates will be set forth  
in the applicable Prospectus Supplement. The commercial bank, savings and loan  
association or trust company serving as Trustee may have normal banking         
relationships with the Issuer or the Originators. In addition, for the purpose  
of meeting the legal requirements of certain local jurisdictions, the Issuer    
and the Trustee acting jointly shall have the power to appoint co-trustees or   
separate trustees of all or any part of the Pool relating to a particular       
Series of Certificates. In the event of such appointment, all rights, powers,   
duties and obligations conferred or imposed upon the Trustee by the Pooling     
Agreement relating to such Series shall be conferred or imposed upon the        
Trustee and each such separate trustee or co-trustee jointly, or, in any        
jurisdiction in which the Trustee shall be incompetent or unqualified to        
perform certain acts, singly upon such separate trustee or co-trustee who       
shall exercise and perform such rights, powers, duties and obligations solely   
at the direction of the Trustee. (Section 8.10) The Trustee may also appoint    
agents (which may include the Issuer and its affiliates) to perform any of the  
responsibilities of the Trustee, which agents shall have any or all of the      
rights, powers, duties and obligations of the Trustee conferred on them by      
such appointment, provided that the Trustee shall continue to be responsible    
for its duties and obligations under the Pooling Agreement.                     

The Trustee may resign at any time, in which event the Issuer will be       
obligated to appoint a successor Trustee. The Trustee may also be removed at    
any time (i) by the Issuer, (a) if the Trustee ceases to be eligible to         
continue as such under the Pooling Agreement or if the Trustee becomes          
insolvent, (b) if the Trustee breaches any of its duties under the Pooling      
Agreement which materially adversely affects the Certificateholders, (c) if     
through the performance or non-performance of certain actions by the Trustee,   
the rating assigned to the CitiCertificates would be lowered or (d) if the      
credit rating of the Trustee is downgraded to a level which would result in     
the rating assigned to the CitiCertificates to be lowered or (ii) by the        
holders of Certificates evidencing at least 50% of the current Stated Amount    
of CitiCertificates then outstanding and 50% of the Percentage Interests of     
the Residual Certificates. Upon becoming aware of such circumstances, the       
Issuer will be obligated to appoint a successor Trustee. 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.         
(Section 8.07)                                                                  

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ERISA CONSIDERATIONS  

The Employee Retirement Income Security Act of 1974, as amended ("ERISA"),  
imposes certain requirements on those employee benefit plans to which it        
applies ("Plans") and on those persons who are fiduciaries with respect to      
such Plans. In accordance with ERISA's general fiduciary standards, before      
investing in a Certificate a Plan fiduciary should determine whether such an    
investment is permitted under the governing Plan instruments and is             
appropriate for the Plan in view of its overall investment policy and the       
composition and diversification of its portfolio. Other provisions of ERISA     
and the Code prohibit certain transactions involving the assets of a Plan and   
persons who have certain specified relationships to the Plan ("parties in       
interest" within the meaning of ERISA or "disqualified persons" within the      
meaning of the Code). Thus, a Plan fiduciary considering an investment in       
Certificates should also consider whether such an investment might constitute   
or give rise to a prohibited transaction under ERISA or the Code. For purposes  
of the discussion, a person investing on behalf of an individual retirement     
account established under Code Section 408 (an "IRA") would be regarded as a    
fiduciary and the IRA as a Plan.                                                

An investment in Certificates by a Plan might result in the assets of the   
related Pool being deemed to constitute in whole or in part Plan assets, which  
in turn might mean that the Plan fiduciary who decided to invest in the         
Certificates had delegated asset management responsibility, and that certain    
underlying aspects of such investment, including the operation of such Pool,    
might be deemed prohibited transactions under ERISA and the Code. Neither       
ERISA nor the Code defines "plan assets." The U.S. Department of Labor has      
published regulations (the "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 Pool) for purposes of certain reporting, disclosure and       
fiduciary responsibility requirements, including the prohibited transaction     
provisions found in ERISA and the Code, if the Plan acquires an "equity         
interest" in such entity (such as by acquiring Certificates). The Issuer        
cannot predict in advance whether under the rules set forth in the Regulations  
an investing Plan's assets would be deemed to include an interest in the        
assets of a Pool or be deemed merely to include its interest in the             
Certificates, because of the factual nature of certain of these rules. For      
example, the Regulations state that the underlying assets of an entity will     
not be considered "plan assets" if, immediately after the most recent           
acquisition of any equity interest in the entity, whether or not from the       
issuer or an underwriter, less than 25% of the value of each class of equity    
interest is held by "benefit plan investors," which are defined as Plans,       
IRAs, and employee benefit plans not subject to ERISA (for example,             
governmental plans).                                                            

The Regulations provide that if a Plan acquires a "guaranteed governmental  
mortgage pool certificate," the Plan's assets include such certificate but do   
not include any of the mortgages underlying such certificate. The Regulations   
include in the definition of a "guaranteed governmental mortgage pool           
certificate" the types of FHLMC Certificates, GNMA Certificates and FNMA        
Certificates which may be included in a Pool underlying a Series of             
Certificates. Accordingly, even if such Mortgage Certificates included in a     
Pool were deemed to be in whole or in part assets of Plan investors, the        
mortgages underlying such Mortgage Certificates would not be treated as assets  
of such Plans and the operation of the pools containing such underlying         
mortgages would not give rise to prohibited transactions.                       

U.S. Department of Labor Prohibited Transaction Class Exemption 83-1 for    
Certain Transactions Involving Mortgage Pool Investment Trusts ("PTE 83-1")     
exempts certain transactions involving the creation, maintenance and            
termination of certain residential mortgage pools and the direct or indirect    
acquisition and holding of certain residential mortgage pool pass-through       
certificates by Plans, from treatment as potential prohibited transactions,     
whether or not the Plan's assets would be deemed to include an ownership        
interest in the mortgages in the mortgage pool, and whether or not such         
transactions would otherwise be prohibited under ERISA. PTE 83-1 sets forth     
certain "general conditions" and "specific conditions" to its applicability.    
The Issuer believes that such "general conditions" set forth in Section II of   
PTE 83-1 would be met with respect to the purchase and holding of Senior        
Certificates evidencing ownership interests in a Pool consisting of Real        
Estate Loans (as defined in Appendix A).                                        

It appears that PTE 83-1 might not apply to the purchase and holding of     
Senior Certificates evidencing ownership interests in a Pool consisting of      
Cooperative Loans (as defined in Appendix A) as well as Real Estate             

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Loans, of Certificates which constitute Residual Certificates, or of Senior     
Certificates which do not pass through both principal and interest.             

It is not clear whether PTE 83-1 applies to Senior Certificates evidencing  
an interest in a Pool of Mortgage Certificates as opposed to Real Estate        
Loans; when offering a Series of such Certificates, if it appears no other      
ERISA prohibited transaction exemption is applicable, the Issuer intends to     
only include in a Pool Mortgage Certificates which are "guaranteed              
governmental mortgage pool certificates," or Mortgage Certificates which        
themselves would meet the general conditions of PTE 83-1 if purchased directly  
by a Plan. Further, in such circumstances, the Issuer intends to structure the  
offering of any such Series of Certificates and the operations of the Pool and  
to take such other actions as are both reasonable and appropriate so as to      
reduce the risk of the occurrence of ERISA prohibited transactions should PTE   
83-1 be held inapplicable to the acquisition and holding of such Certificates.  

Several underwriters of mortgage-backed securities have applied for and     
obtained ERISA prohibited transaction exemptions which are in some respects     
broader than PTE 83-1. Such exemptions can only apply to mortgage-backed        
securities which, among other conditions, are sold in an offering with respect  
to which such underwriter serves as the sole or a managing underwriter, or as   
a selling or placement agent. Several other underwriters have applied for       
similar exemptions. If such an exemption might be applicable to a Series of     
Certificates, the related Prospectus Supplement will refer to such              
possibility.                                                                    

In view of the foregoing, before purchasing any Certificates, a Plan        
fiduciary should consult with its counsel and determine whether PTE 83-1        
applies to the creation, maintenance and termination of the Pool and the        
acquisition and holding of the Certificates, including whether the appropriate  
"specific conditions" set forth in Section I of PTE 83-1 as well as the         
"general conditions" of Section II would be met, and should consult the         
applicable Prospectus Supplement relating to such Series of Certificates,       
especially, but not only, the ERISA discussion, if any. If it is unclear to a   
Plan fiduciary and its counsel that PTE 83-1 would apply to the purchase and    
holding of the Certificates, because, for example, the Pool includes Mortgage   
Certificates, such fiduciary and its counsel should consider whether such       
Mortgage Certificates are "guaranteed governmental mortgage pool                
certificates," whether in such case PTE 83-1 would be applicable to the         
indirect acquisition and holding of the Mortgage Certificates, and whether any  
other ERISA prohibited transaction exemption is applicable or necessary.        

Certain affiliates of the Issuer, such as Citicorp, might be considered     
"parties in interest" or "disqualified persons" with respect to a Plan. If so,  
special caution ought to be exercised before a Plan purchases a Certificate in  
such circumstances. Certificates may not be purchased with the assets of a      
Plan if an affiliate of the Issuer or of the Trustee of a Pool either: (a) has  
investment discretion with respect to the investment of such assets; (b) has    
authority or responsibility to give, or regularly gives, investment advice      
with respect to such assets for a fee and pursuant to an agreement or           
understanding that such advice will serve as a primary basis for investment     
decisions with respect to such assets and that such advice will be based on     
the particular investment needs of the Plan; or (c) is an employer maintaining  
or contributing to such Plan. By agreeing to acquire a Certificate for a Plan,  
the fiduciary of any such Plan is representing and warranting to the            
Underwriter and the Issuer that the assets of the Plan to be used in            
connection with such purchase do not come within (a), (b) or (c) above.         

A governmental plan as defined in Section 3(32) of ERISA is not subject to  
ERISA, or Code Section 4975. However, such a governmental plan may be subject   
to a federal, state, or local law, which is, to a material extent, similar to   
the provisions of ERISA of Code Section 4975 ("Similar Law"). A fiduciary of a  
governmental plan should make its own determination as to the need for and the  
availability of any exemptive relief under Similar Law.                         

The purchase of a Residual Certificate by most varieties of ERISA Plans,    
governmental plans, and certain church plans (as defined in section 3(33) of    
ERISA) may give rise to "unrelated business taxable income" as described in     
Code Sections 511-515 and 860E. Further, prior to the purchase of Residual      
Certificates, a prospective purchaser may be required to provide an affidavit   
to a transferor that it is not a "disqualified organization," which term as     
defined herein includes certain tax-exempt entities not subject to Code         
Section 511,                                                                    

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including certain governmental plans, as discussed herein under the caption     
"Certain Federal Income Tax Consequences--Taxation of Residual Certificates--   
Tax-Related Restrictions on Transfer of Residual Certificates--Disqualified     
Organizations."                                                                 

Due to the complexity of the foregoing rules and the penalties imposed upon 
persons involved in prohibited transactions, it is particularly important that  
potential Plan investors consult with their counsel regarding the consequences  
under ERISA of their acquisition and ownership of Certificates. Unless          
otherwise specified in the related Prospectus Supplement, no assets of a Plan   
which is subject to ERISA may be invested in Subordinated Certificates.         

LEGAL INVESTMENT  

The Senior Certificates, and if so specified in the related Prospectus      
Supplement, the Subordinated Certificates and the Residual Certificates will    
constitute "mortgage related securities" for purposes of the Secondary          
Mortgage Market Enhancement Act of 1984, as amended (the "Enhancement Act"),    
so long as they are rated in one of the two highest rating categories by at     
least one nationally recognized statistical rating organization. As "mortgage   
related securities," they will be legal investments for persons, trusts,        
corporations, partnerships, associations, business trusts and business          
entities (including, but not limited to, state-chartered savings banks,         
commercial banks, savings and loan associations and insurance companies, as     
well as trustees and state government employee retirement systems) created      
pursuant to or existing under the laws of the United States or of any state     
(including the District of Columbia and Puerto Rico) 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. Pursuant to the Enhancement     
Act, a number of States enacted legislation on or before the October 3, 1991    
cutoff for such enactments, limiting to varying extents the ability of certain  
entities (in particular, insurance companies) to invest in "mortgage related    
securities," in most cases by requiring the affected investors to rely solely   
upon existing state law, and not the Enhancement Act. Accordingly, the          
investors affected by such legislation will be authorized to invest in the      
Senior Certificates, and if so specified in the related Prospectus Supplement,  
the Subordinated Certificates and the Residual Certificates, only to the        
extent provided in such legislation.                                            

The Enhancement Act 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    
in mortgage related securities without limitation as to the percentage of       
their assets represented thereby, federal credit unions may invest in mortgage  
related securities, and national banks may purchase mortgage related            
securities for their own account without regard to the limitations generally    
applicable to investment securities set forth in 12 U.S.C. Section 24           
(Seventh), subject in each case to such regulations as the applicable federal   
regulatory authority may prescribe. In this connection, federal credit unions   
should review National Credit Union Administration (the "NCUA") Letter to       
Credit Unions No. 96, as modified by Letter to Credit Unions No. 108, which     
includes guidelines to assist federal credit unions in making investment        
decisions for mortgage related securities. The NCUA has adopted rules,          
codified as 12 C.F.R. Section 703.5(f)-(k), which prohibit federal credit       
unions from investing in certain mortgage related securities (including         
securities such as certain Series, Classes or Subclasses of Certificates),      
except under limited circumstances.                                             

All depository institutions considering an investment in the Certificates   
should review the Federal Financial Institutions Examination Council's          
"Supervisory Policy Statement on Securities Activities" dated January 28,       
1992, as revised April 15, 1994 (the "Policy Statement"). The Policy            
Statement, which has been adopted by the Board of Governors of the Federal      
Reserve System, the FDIC, the Comptroller of the Currency and the OTS and by    
the NCUA (with certain modifications), prohibits depository institutions from   
investing in certain "high-risk mortgage securities" (including securities      
such as certain Series, Classes or Subclasses of Certificates), except under    
limited circumstances, and sets forth certain investment practices deemed to    
be unsuitable for regulated institutions.                                       

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Institutions whose investment activities are subject to regulation by       
federal or state authorities should review rules, policies and guidelines       
adopted from time to time by such authorities before purchasing any of the      
Certificates, as certain Series, Classes or Subclasses may be deemed            
unsuitable investments, or may otherwise be restricted, under such rules,       
policies or guidelines (in certain instances irrespective of the Enhancement    
Act).                                                                           

The foregoing does not take into consideration the applicability of         
statutes, rules, regulations, orders, guidelines or agreements generally        
governing investments made by a particular investor, including, but not         
limited to, "prudent investor" provisions, percentage-of-assets limits,         
provisions which may restrict or prohibit investment in securities which are    
not "interest-bearing" or "income-paying," and, with regard to any              
Certificates issued in book-entry form, provisions which may restrict or        
prohibit investments in securities which are issued in book-entry form.         

Except as to the status of Certificates as "mortgage related securities," no
representation is made as to the proper characterization of the Certificates    
for legal investment purposes, financial institution regulatory purposes, or    
other purposes, or as to the ability of particular investors to purchase        
Certificates under applicable legal investment restrictions. The uncertainties  
described above (and any unfavorable future determinations concerning legal     
investment or financial institution regulatory characteristics of the           
Certificates) may adversely affect the liquidity of the Certificates.           

Investors should consult with their own legal advisors in determining       
whether and to what extent the Certificates constitute legal investments for    
such investors.                                                                 

CERTAIN FEDERAL INCOME TAX CONSEQUENCES 

GENERAL                                                                         

The following is a general discussion of the anticipated material federal   
income tax consequences of the purchase, ownership and disposition of           
CitiCertificates and Residual Certificates. The discussion below does not       
purport to address all federal income tax consequences that may be applicable   
to particular categories of investors, some of which may be subject to special  
rules. The authorities on which this discussion is based are subject to change  
or differing interpretations, and any such change or interpretation could       
apply retroactively. The discussion reflects the applicable provisions of the   
Code, as well as regulations (the "REMIC Regulations") promulgated by the U.S.  
Department of the Treasury. Investors should consult their own tax advisors in  
determining the federal, state, local, and any other tax consequences to them   
of the purchase, ownership and disposition of CitiCertificates and Residual     
Certificates. For purposes of this tax discussion, references to                
"Certificateholder" or "holder" generally mean the beneficial owner of a        
CitiCertificate or Residual Certificate.                                        

With respect to each Series of CitiCertificates and Residual Certificates,  
an election will be made to treat the related Trust or one or more segregated   
pools of assets therein as one or more REMICs within the meaning of Code        
Section 860D. If an election is made to treat one or more segregated pools of   
assets within the Trust property as a REMIC, references to the "Trust" or the   
"REMIC" herein shall be deemed to refer to such portion or portions of the      
Trust property. An election may also be made to treat the trust in which        
CitiMortgageCertificates with respect to a Series represent an undivided        
interest as a REMIC. Qualification as a REMIC requires ongoing compliance with  
certain conditions. With respect to each Series of CitiCertificates and         
Residual Certificates (and, if applicable, CitiMortgageCertificates), Rona      
Daniels, Vice President and Tax Counsel of Citibank, N.A., has advised the      
Issuer that in her opinion, assuming (i) the making of an appropriate           
election, (ii) compliance with the Pooling Agreement, and (iii) compliance      
with any changes in the law, including any amendments to the Code or            
applicable Treasury regulations thereunder, the Trust (and, if applicable, the  
trust relating to the CitiMortgageCertificates) will qualify as a REMIC. In     
such case, the CitiCertificates will be considered to be "regular interests"    
in the REMIC and generally will be taxed as if they were newly originated debt  
instruments, and the Residual Certificates will be considered to be "residual   
interests" in the REMIC. The Prospectus Supplement for each Series of           
Certificates will indicate whether more than one REMIC election with respect    
to the property included in the related Trust will be made.                     

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STATUS OF CITICERTIFICATES AND RESIDUAL CERTIFICATES                            

Certificates held by a domestic building and loan association will          
constitute "a regular or residual interest in a REMIC" within the meaning of    
Code Section 7701(a)(19)(C)(xi) in the same proportion that the assets of the   
REMIC would be treated as "loans . . . secured by an interest in real           
property" within the meaning of Code Section 7701(a)(19)(C)(v) or as other      
assets described in Code Section 7701(a)(19)(C). Certificates held by a real    
estate investment trust will constitute "real estate assets" within the         
meaning of Code Section 856(c)(5)(A), and interest on the CitiCertificates and  
income with respect to Residual Certificates will be considered "interest on    
obligations secured by mortgages on real property or on interests in real       
property" within the meaning of Code Section 856(c)(3)(B) in the same           
proportion that, for both purposes, the assets and income of the REMIC would    
be so treated. If at all times 95% or more of the assets of the REMIC qualify   
for any of the foregoing treatments, the Certificates will qualify for the      
corresponding status in their entirety. It is anticipated that the              
Certificates will qualify for the foregoing treatments in their entirety. For   
purposes of Code Section 856(c)(5)(A), payments of principal and interest on    
the Mortgage Loans that are reinvested pending distribution to holders of       
Certificates qualify for such treatment. Where two REMICs are a part of a       
tiered structure they will be treated as one REMIC for purposes of the tests    
described above respecting asset ownership of more or less than 95%. In         
addition, if the assets of the REMIC include Buydown Mortgage Loans, it is      
possible that the percentage of such assets constituting "loans . . . secured   
by an interest in real property" for purposes of Code Section                   
7701(a)(19)(C)(v) may be required to be reduced by the amount of the related    
buydown subsidy accounts. Certificates held by a regulated investment company   
will not constitute "Government securities" within the meaning of Code Section  
851(b)(4)(A)(i). Certificates held by certain financial institutions will       
constitute "evidence of indebtedness" within the meaning of Code Section        
582(c)(1). The Small Business Job Protection Act of 1996 (the "SBJPA of 1996")  
repealed the reserve method for bad debts of domestic building and loan         
associations and mutual savings banks, and thus has eliminated the asset        
category of "qualifying real property loans" in former Code Section 593(d) for  
taxable years beginning after December 31, 1995. The requirement in the SBJPA   
of 1996 that such institutions must "recapture" a portion of their existing     
bad debt reserves is suspended if a certain portion of their assets are         
maintained in "residential loans" under Code Section 7701(a)(19)(C)(v), but     
only if such loans were made to acquire, construct or improve the related real  
property and not for the purpose of refinancing. However, no effort will be     
made to identify the portion of the Mortgage Loans of any Series meeting this   
requirement, and no representation is made in this regard.                      

QUALIFICATION AS A REMIC                                                        

In order for the Trust to qualify as a REMIC, there must be ongoing         
compliance on the part of the Trust with the requirements set forth in the      
Code. First, the Trust must fulfill an asset test, which requires that no more  
than a de minimis portion of the assets of the Trust (as of the close of the    
third calendar month beginning after the Startup Day and at all times           
thereafter) may consist of assets other than "qualified mortgages" and          
"permitted investments." The REMIC Regulations provide a safe harbor pursuant   
to which the de minimis requirement will be met if, at all times, the           
aggregate adjusted basis of the nonqualified assets is less than 1% of the      
aggregate adjusted basis of all the Trust's assets. An entity that fails to     
meet the safe harbor may nevertheless demonstrate that it holds no more than a  
de minimis amount of nonqualified assets. A REMIC must also adopt "reasonable   
arrangements" to prevent its residual interests from being held by              
"disqualified organizations" and must furnish applicable tax information to     
transferors that violate this requirement. See "--Taxation of Residual          
Certificates--Tax-Related Restrictions on Transfer of Residual Certificates--   
Disqualified Organizations" below.                                              

A qualified mortgage is any obligation that is principally secured by an    
interest in real property and that is either transferred to the REMIC on the    
Startup Day or is purchased by the REMIC within a three-month period            
thereafter pursuant to a fixed price contract in effect on the Startup Day.     
Qualified mortgages include whole mortgage loans or stripped portions thereof,  
certificates of beneficial ownership in a grantor trust that holds mortgage     
loans, such as the Mortgage Certificates, and regular interests in another      
REMIC, such as Mortgage Certificates in a trust as to which a REMIC election    
has been made. The REMIC Regulations specify that loans secured by timeshare    
interests and shares held by a tenant stockholder in a cooperative housing      
corporation can be qualified mortgages. A qualified mortgage includes a         
qualified replacement mortgage, which is any property                           

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that would have been treated as a qualified mortgage if it were transferred to  
the REMIC on the Startup Day and that is received either (i) in exchange for    
any qualified mortgage within a three-month period thereafter, or (ii) in       
exchange for a "defective obligation" within a two-year period thereafter. A    
"defective obligation" includes (i) a mortgage in default or as to which        
default is reasonably foreseeable, (ii) a mortgage as to which a customary      
representation or warranty made at the time of transfer to the REMIC has been   
breached, (iii) a mortgage that was fraudulently procured by the mortgagor,     
and (iv) a mortgage that was not in fact principally secured by real property   
(but only if such mortgage is disposed of within 90 days of discovery). A       
Mortgage Loan that is "defective" as described in clause (iv) that is not sold  
or, if within two years of the Startup Day, exchanged within 90 days of         
discovery, ceases to be a qualified mortgage after such 90 day period.          

Permitted investments include cash flow investments, qualified reserve      
assets, and foreclosure property. A cash flow investment is an investment,      
earning a return in the nature of interest, of amounts received on or with      
respect to qualified mortgages for a temporary period, not exceeding thirteen   
months, until the next scheduled distribution to holders of interests in the    
REMIC. A qualified reserve asset is any intangible property held for            
investment that is part of any reasonably required reserve maintained by the    
REMIC to provide for payments of expenses of the REMIC or to provide            
additional security for payments due on the regular or residual interests that  
otherwise may be delayed or defaulted upon because of a default or delinquency  
on the qualified mortgages, lower than expected reinvestment returns,           
prepayment interest shortfalls and certain other contingencies. The reserve     
fund will be disqualified if more than 30% of the gross income from the assets  
in such fund for the year is derived from the sale or other disposition of      
property held for less than three months, unless required to prevent a default  
on the regular interests caused by a default on one or more qualified           
mortgages. A reserve fund must be reduced "promptly and appropriately" as       
payments on the Mortgage Loans are received. Foreclosure property is real       
property acquired by the REMIC in connection with the default or imminent       
default of a qualified mortgage and generally held for not more than two        
years, with extensions granted by the Internal Revenue Service.                 

In addition to the foregoing requirements, the various interests in a REMIC 
also must meet certain requirements. All of the interests in a REMIC must be    
either of the following: (i) one or more classes of regular interests or (ii)   
a single class of residual interests on which distributions, if any, are made   
pro rata. A regular interest is an interest in a REMIC that is issued on the    
Startup Day with fixed terms, is designated as a regular interest, and          
unconditionally entitles the holder to receive a specified principal amount     
(or other similar amount), and provides that interest payments (or other        
similar amounts), if any, at or before maturity either are payable based on a   
fixed rate or a qualified variable rate, or consist of a specified, nonvarying  
portion of the interest payments on qualified mortgages. Such a specified       
portion may consist of a fixed number of basis points, a fixed percentage of    
the total interest or the difference between fixed and qualified variable       
rates on some or all of the qualified mortgages. The specified principal        
amount of a regular interest that provides for interest payments consisting of  
a specified, nonvarying portion of interest payments on qualified mortgages     
may be zero. A residual interest is an interest in a REMIC other than a         
regular interest that is issued on the Startup Day and is designated as a       
residual interest. An interest in a REMIC may be treated as a regular interest  
even if payments of principal with respect to such interest are subordinated    
to payments on other regular interests or the residual interest in the REMIC,   
and are dependent on the absence of defaults or delinquencies on qualified      
mortgages or permitted investments, lower than reasonably expected returns on   
permitted investments, unanticipated expenses incurred by the REMIC or          
prepayment interest shortfalls. Accordingly, the CitiCertificates of a Series   
will constitute one or more classes of regular interests, and the Residual      
Certificates of that Series will constitute a single class of residual          
interests on which distributions are made pro rata.                             

If an entity, such as the Trust, fails to comply with one or more of the    
ongoing requirements of the Code for REMIC status during any taxable year, the  
Code provides that the entity will not be treated as a REMIC for such year and  
thereafter. In this event, an entity with multiple classes of ownership         
interests may be treated as a separate association taxable as a corporation     
under Treasury regulations, and the CitiCertificates may be treated as equity   
interests therein. The Code authorizes the Treasury Department to issue         
regulations that address situations where failure to meet one or more of the    
requirements for REMIC status occurs inadvertently and in                       

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good faith, and disqualification of the REMIC would occur absent regulatory     
relief. Investors should be aware, however, that the Conference Committee       
Report to the Tax Reform Act of 1986 (the "1986 Act") indicates that the        
regulatory relief may be accompanied by sanctions, such as the imposition of a  
corporate tax on all or a portion of the REMIC's income for the period of time  
in which the requirements for REMIC status are not satisfied.                   

TAXATION OF CITICERTIFICATES                                                    

General                                                                       

In general, interest, original issue discount, and market discount on a     
CitiCertificate will be treated as ordinary income to a Certificateholder, and  
distributions in reduction of Stated Amount of a CitiCertificate will be        
treated as a return of capital to the extent of the Certificateholder's basis   
in the CitiCertificate. Each Certificateholder must use the accrual method of   
accounting with regard to CitiCertificates, regardless of the method of         
accounting otherwise used by such Certificateholder.                            

Original Issue Discount                                                       

All Accrual CitiCertificates will be, and certain of the CitiCertificates of
other Classes of a Series may be, issued with "original issue discount" within  
the meaning of Code Section 1273(a). Holders of any Class of CitiCertificates   
having original issue discount generally must include original issue discount   
in ordinary income for federal income tax purposes as it accrues, in            
accordance with a constant yield method that takes into account the             
compounding of interest, in advance of receipt of the cash attributable to      
such income. The following discussion is based in part on temporary and final   
Treasury regulations issued on February 2, 1994, as amended on April 14, 1996   
(the "OID Regulations") under Code Sections 1271 through 1273 and 1275 and in   
part on the provisions of the 1986 Act. Holders of CitiCertificates should be   
aware, however, that the OID Regulations do not adequately address certain      
issues relevant to prepayable securities, such as the CitiCertificates. To the  
extent such issues are not addressed in such regulations, the Issuer intends    
to apply the methodology described in the Conference Committee Report to the    
1986 Act. No assurance can be provided that the Internal Revenue Service will   
not take a different position as to those matters not currently addressed by    
the OID Regulations. Moreover, the OID Regulations include an anti-abuse rule   
allowing the Internal Revenue Service to apply or depart from the OID           
Regulations where necessary or appropriate to ensure a reasonable tax result    
in light of the applicable statutory provisions. A tax result will not be       
considered unreasonable under the anti-abuse rule in the absence of a           
substantial effect on the present value of a taxpayer's tax liability.          
Investors are advised to consult their own tax advisors as to the discussion    
herein and the appropriate method for reporting interest and original issue     
discount with respect to the CitiCertificates.                                  

Each CitiCertificate (except to the extent described below with respect to a
CitiCertificate on which distributions in reduction of Stated Amount are made   
in a single installment by lots of a specified Stated Amount upon the request   
of a Certificateholder or by random lot (a "Retail Class CitiCertificate"))     
will be treated as a single installment obligation for purposes of determining  
the original issue discount includible in a Certificateholder's income. The     
total amount of original issue discount on a CitiCertificate is the excess of   
the "stated redemption price at maturity" of the CitiCertificate over its       
"issue price." The issue price of a Class of CitiCertificates generally is the  
first price at which a substantial amount of CitiCertificates of such Class is  
sold to the public (excluding bond houses, brokers and underwriters). Although  
unclear under the OID Regulations, the Issuer intends to treat the issue price  
of a Class as to which there is no substantial sale as of the issue date or     
that is retained by the Issuer as the fair market value of that Class as of     
the issue date. The issue price of a CitiCertificate also includes any amount   
paid by the initial Certificateholder for accrued interest that relates to a    
period prior to the issue date of the CitiCertificate, unless the               
CitiCertificateholder elects on its federal income tax return to exclude such   
amount from the issue price and to recover it on the first Distribution Date.   
The stated redemption price at maturity of a CitiCertificate always includes    
its Initial Stated Amount. The stated redemption price at maturity generally    
will not include distributions of interest if such interest distributions       
constitute "qualified stated interest." Under the OID Regulations, qualified    
stated interest generally means interest payable                                

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at a single fixed rate or a qualified variable rate (as described below),       
provided that such interest distributions are unconditionally distributable at  
intervals of one year or less during the entire term of the CitiCertificates.   
Because there is no penalty or default remedy in the case of nonpayment of      
interest with respect to a CitiCertificate, it is possible that no interest on  
any Class of CitiCertificates will be treated as qualified stated interest.     
However, except as provided in the following three sentences or in the          
applicable Prospectus Supplement, because the underlying Mortgage Loans         
provide for remedies in the event of default, the Issuer intends to treat       
interest with respect to the CitiCertificates as qualified stated interest. No  
distributions on an Accrual CitiCertificate, or on other CitiCertificates with  
respect to which interest distributions may be deferred and added to the        
Stated Amount, will constitute qualified stated interest and, accordingly, the  
stated redemption price at maturity of such CitiCertificates includes not only  
their Initial Stated Amount but also all other distributions (whether           
denominated as accrued interest or current interest) to be received thereon.    
Likewise, the Issuer intends to treat an "interest only" class or a class on    
which interest is substantially disproportionate to its principal amount (a     
so-called "super-premium" class) as having no qualified stated interest. Where  
the interval between the issue date and the first Distribution Date on a        
CitiCertificate is shorter than the interval between subsequent Distribution    
Dates, the interest attributable to the additional days will be included in     
the stated redemption price at maturity.                                        

Under a de minimis rule, original issue discount on a CitiCertificate will  
be considered to be zero if such original issue discount is less than 0.25% of  
the stated redemption price at maturity of the CitiCertificate multiplied by    
the weighted average maturity of the CitiCertificate. For this purpose, the     
weighted average maturity of the CitiCertificate is computed as the sum of the  
amounts determined by multiplying the number of full years (i.e., rounding      
down partial years) from the issue date until each return of stated redemption  
price at maturity is scheduled to be made by a fraction, the numerator of       
which is the amount of each return of stated redemption price at maturity and   
the denominator of which is the stated redemption price at maturity of the      
CitiCertificate. The Conference Committee Report to the 1986 Act provides that  
the schedule of such distributions should be determined in accordance with the  
assumed rate of prepayment of the Mortgage Loans and Mortgage Certificates      
included in the Trust (the "Prepayment Assumption") and the anticipated         
reinvestment rate, if any, used in pricing the CitiCertificates. The            
Prepayment Assumption with respect to a Series of CitiCertificates will be set  
forth in the related Prospectus Supplement. Holders of CitiCertificates         
generally must report de minimis original issue discount pro rata as            
distributions of stated redemption price at maturity are received, and such     
income will be capital gain if the CitiCertificate is held as a capital asset.  
However, holders of CitiCertificates may elect to accrue all de minimis         
original issue discount, as well as market discount and market premium, under   
the constant yield method. See "--Election to Treat All Interest Under the      
Constant Yield Method" below.                                                   

A holder of a CitiCertificate generally must include in gross income for any
taxable year the sum of the "daily portions", as defined below, of the          
original issue discount on the CitiCertificate accrued during an accrual        
period for each day on which it holds the CitiCertificate, including the date   
of purchase but excluding the date of disposition. The Issuer will treat the    
monthly period ending on the day before each Distribution Date as the accrual   
period. With respect to each CitiCertificate, a calculation will be made of     
the original issue discount that accrues during each successive full accrual    
period (or shorter period from the date of original issue) that ends on the     
day before the related Distribution Date on the CitiCertificate. The            
Conference Committee Report to the 1986 Act states that the rate of accrual of  
original issue discount is intended to be based on the Prepayment Assumption.   
The original issue discount accruing in a full accrual period on a              
CitiCertificate would be the excess, if any, of (i) the sum of (a) the present  
value of all of the remaining distributions to be made on the CitiCertificate   
as of the end of that accrual period and (b) the distributions made on the      
CitiCertificate during the accrual period that are included in the              
CitiCertificate's stated redemption price at maturity, over (ii) the adjusted   
issue price of the CitiCertificate at the beginning of the accrual period. The  
present value of the remaining distributions referred to in the preceding       
sentence is calculated based on (i) the yield to maturity of the                
CitiCertificate as of the Startup Day, (ii) events (including actual            
prepayments) that have occurred prior to the end of the accrual period          
and(iii) the Prepayment Assumption. For these purposes, the adjusted issue      
price of a CitiCertificate at the beginning of any accrual period equals the    
issue price of the CitiCertificate, increased by the aggregate amount of        
original                                                                        

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issue discount with respect to the CitiCertificate that accrued in all prior    
accrual periods and reduced by the amount of distributions included in the      
CitiCertificate's stated redemption price at maturity that were made on the     
CitiCertificate attributable to such prior periods. The original issue          
discount accruing during any accrual period (as determined in this paragraph)   
will then be divided by the number of days in the period to determine the       
daily portion of original issue discount for each day in the period. With       
respect to an initial accrual period that is shorter than a full accrual        
period, the daily portions of original issue discount must be determined        
according to an appropriate allocation under any reasonable method.             

Under the method described above, the daily portions of original issue      
discount required to be included in income by a holder of a CitiCertificate     
generally will increase to take into account prepayments on the                 
CitiCertificates as a result of prepayments on the Mortgage Loans underlying    
the Mortgage Certificates or Mortgage Loans that exceed the Prepayment          
Assumption, and generally will decrease (but not below zero for any period) if  
the prepayments on the Mortgage Loans underlying the Mortgage Certificates or   
Mortgage Loans are slower than the Prepayment Assumption. An increase in        
prepayments on the Mortgage Loans with respect to a Series can result in both   
a change in the priority of principal payments with respect to certain Classes  
of CitiCertificates and either an increase or decrease in the daily portions    
of original issue discount with respect to such CitiCertificates.               

In the case of a Retail Class CitiCertificate, the Issuer intends to        
determine the yield to maturity of such CitiCertificate based upon the          
anticipated payment characteristics of the Class as a whole under the           
Prepayment Assumption. In general, the original issue discount accruing on      
each Retail Class CitiCertificate in a full accrual period would be its         
allocable share of the original issue discount with respect to the entire       
Class, as determined in accordance with the preceding paragraph. However, in    
the case of a distribution in reduction of the entire Stated Amount of any      
Retail Class CitiCertificate (or portion of such Stated Amount), (a) the        
remaining unaccrued original issue discount allocable to such CitiCertificate   
(or to such portion) will accrue at the time of such distribution, and (b) the  
accrual of original issue discount allocable to each remaining CitiCertificate  
of such Class (or the remaining Stated Amount of a Retail Class                 
CitiCertificate after a distribution in reduction of Stated Amount has been     
received) will be adjusted by reducing the present value of the remaining       
payments on such Class and the adjusted issue price of such Class to the        
extent attributable to the portion of the Stated Amount that was distributed.   
The Issuer believes that the foregoing treatment is consistent with the "pro    
rata prepayment" rules of the OID Regulations, but with the rate of accrual of  
original issue discount determined based on the Prepayment Assumption for the   
Class as a whole. Investors are advised to consult their tax advisors as to     
this treatment.                                                                 

Acquisition Premium                                                           

A purchaser of a CitiCertificate at a price greater than its adjusted issue 
price but less than its stated redemption price at maturity will be required    
to include in gross income the daily portions of the original issue discount    
on the CitiCertificate pro rata by a fraction, the numerator of which is the    
excess of its purchase price over such adjusted issue price and the             
denominator of which is the excess of the remaining stated redemption price at  
maturity over the adjusted issue price. Alternatively, such a subsequent        
purchaser may elect to treat all such acquisition premium under the constant    
yield method, as described under the heading "--Election to Treat All Interest  
Under the Constant Yield Method" below.                                         

Variable Rate CitiCertificates                                                

CitiCertificates may provide for interest based on a variable rate          
("Variable Rate CitiCertificates"). Under the OID Regulations, interest is      
treated as payable at a variable rate if, generally, (i) the issue price does   
not exceed the original principal balance by more than a specified amount and   
(ii) the interest compounds or is payable at least annually at current values   
of (a) one or more "qualified floating rates," (b) a single fixed rate and one  
or more qualified floating rates, (c) a single "objective rate," or (d) a       
single fixed rate and a single objective rate that is a "qualified inverse      
floating rate." A floating rate is a qualified floating rate if variations in   
the rate can reasonably be expected to measure contemporaneous variations in    
the cost of newly borrowed funds,                                               

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where such rate is subject to a multiple that is greater than 0.65 but not      
greater than 1.35. Such rate may also be increased or decreased by a fixed      
spread or subject to a fixed cap or floor, or a cap or floor that is not        
reasonably expected as of the issue date to affect the yield of the instrument  
significantly. An objective rate is any rate (other than a qualified floating   
rate) that is determined using a single fixed formula and that is based on      
objective financial or economic information, provided that such information is  
not (i) within the control of the issuer or a related party or (ii) unique to   
the circumstances of the issuer or a related party. A qualified inverse         
floating rate is a rate equal to a fixed rate minus a qualified floating rate   
that inversely reflects contemporaneous variations in the cost of newly         
borrowed funds; an inverse floating rate that is not a qualified inverse        
floating rate may nevertheless be an objective rate. A Class of                 
CitiCertificates may be issued under this Prospectus that does not have a       
variable rate under the foregoing rules, for example, a Class that bears        
different rates at different times during the period it is outstanding such     
that it is considered significantly "front-loaded" or "back-loaded" within the  
meaning of the OID Regulations. It is possible that such a Class may be         
considered to bear "contingent interest" within the meaning of the OID          
Regulations. The OID Regulations, as they relate to the treatment of            
contingent interest, are by their terms not applicable to CitiCertificates.     
However, if final regulations dealing with contingent interest with respect to  
CitiCertificates apply the same principles as the OID Regulations, such         
regulations may lead to different timing of income inclusion than would be the  
case under the OID Regulations. Furthermore, application of such principles     
could lead to the characterization of gain on the sale of contingent interest   
CitiCertificates as ordinary income. Investors should consult their tax         
advisors regarding the appropriate treatment of any CitiCertificates that do    
not pay interest at a fixed rate or variable rate as described in this          
paragraph.                                                                      

Under the REMIC Regulations, a CitiCertificate (i) bearing a rate that      
qualifies as a variable rate under the OID Regulations that is tied to current  
values of a variable rate (or the highest, lowest or average of two or more     
variable rates, including a rate based on the average cost of funds of one or   
more financial institutions), or a positive or negative multiple of such a      
rate (plus or minus a specified number of basis points) or that represents a    
weighted average of rates on some or all of the Mortgage Loans that bear        
either a fixed rate or a variable rate, including such a rate that is subject   
to one or more caps or floors, or (ii) bearing one or more such variable rates  
for one or more periods, and a different variable rate or fixed rate for other  
periods, qualifies as a regular interest in a REMIC. Accordingly, unless        
otherwise indicated in the applicable Prospectus Supplement, the Issuer         
intends to treat CitiCertificates that qualify as regular interests under this  
rule in the same manner as obligations bearing a variable rate for original     
issue discount reporting purposes.                                              

The amount of original issue discount with respect to a CitiCertificate     
bearing a variable rate of interest will accrue in the manner described above   
under "Original Issue Discount", with the yield to maturity and future          
distributions on such CitiCertificate generally to be determined by assuming    
that interest will be payable for the life of the CitiCertificate based on the  
initial rate (or, if different, the value of the applicable variable rate as    
of the pricing date). Unless otherwise specified in the applicable Prospectus   
Supplement, the Issuer intends to treat such variable interest as qualified     
stated interest, other than variable interest on an interest-only or super-     
premium Class, which will be treated as non-qualified stated interest           
includible in the stated redemption price at maturity. Ordinary income          
reportable for any period will be adjusted based on subsequent changes in the   
applicable interest rate index.                                                 

Although unclear under the OID Regulations, the Issuer intends to treat     
CitiCertificates bearing an interest rate that is a weighted average of the     
net interest rates on Mortgage Loans having fixed or adjustable rates as        
having qualified stated interest. In the case of adjustable rate Mortgage       
Loans, the applicable index used to compute interest on the Mortgage Loans in   
effect on the pricing date (or possibly the issue date) will be deemed to be    
in effect beginning with the period in which the first weighted average         
adjustment date occurring after the issue date occurs. Adjustments will be      
made in each accrual period either increasing or decreasing the amount of       
ordinary income reportable to reflect the actual Stated Rate on the             
CitiCertificates.                                                               

Deferred Interest                                                             

Any Deferred Interest (as defined in the Prospectus Supplement with respect 
to a Series) that accrues with respect to a Class of CitiCertificates will      
constitute income to the holders of such CitiCertificates prior to the          

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time distributions of cash with respect to such Deferred Interest are made.     
Under the OID Regulations, all interest payments on CitiCertificates that may   
have Deferred Interest must be treated as non-qualified stated interest         
payments and included in the stated redemption price at maturity of the         
CitiCertificates in computing original issue discount thereon.                  

Market Discount                                                               

A purchaser of a CitiCertificate also may be subject to the market discount 
rules of Code Sections 1276 through 1278. Under these Code sections and the     
principles applied by the OID Regulations in the context of original issue      
discount, "market discount" is the amount by which the purchaser's original     
basis in the CitiCertificate (i) is exceeded by the then-current principal      
amount of the CitiCertificate, or (ii) in the case of a CitiCertificate having  
original issue discount, is exceeded by the adjusted issue price of such        
CitiCertificate at the time of purchase, as described above. Such purchaser     
generally will be required to recognize ordinary income to the extent of        
accrued market discount on such CitiCertificate as distributions includible in  
the stated redemption price at maturity thereof are received, in an amount not  
exceeding any such distribution. Such market discount would accrue in a manner  
to be provided in Treasury regulations and should take into account the         
Prepayment Assumption. The Conference Committee Report of the 1986 Act          
provides that until such regulations are issued, such market discount would     
accrue either (i) on the basis of a constant interest rate, or (ii) in the      
ratio of stated interest allocable to the relevant period to the sum of the     
interest for such period plus the remaining interest as of the end of such      
period, or in the case of a CitiCertificate issued with original issue          
discount, in the ratio of original issue discount accrued for the relevant      
period to the sum of the original issue discount accrued for such period plus   
the remaining original issue discount as of the end of such period. Such        
purchaser also generally will be required to treat a portion of any gain on a   
sale or exchange of the CitiCertificate 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 as partial distributions in reduction of the stated redemption  
price at maturity were received. Such purchaser also will be required to defer  
deduction of a portion of the interest expense attributable to any              
indebtedness incurred or continued to purchase or carry the CitiCertificate.    
The deferred portion of the interest expense would not exceed the accrued       
market discount on the CitiCertificate for the taxable year. Any such deferred  
interest expense is, in general, allowed as a deduction not later than the      
year in which the related market discount income is recognized or the           
CitiCertificate is disposed of. As an alternative to the inclusion of market    
discount in income on the foregoing basis, the holder may elect 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, in      
which case the interest deferral rule will not apply. See "--Election to Treat  
All Interest Under the Constant Yield Method" below regarding an alternative    
manner in which such election may be deemed to be made.                         

By analogy to the OID Regulations, market discount with respect to a        
CitiCertificate will be considered to be zero if such market discount is less   
than 0.25% of the remaining stated redemption price at maturity of such         
CitiCertificate multiplied by the weighted average maturity of the              
CitiCertificate (determined as described above in the third paragraph under     
"Original Issue Discount") remaining after the date of purchase. It appears     
that de minimis market discount would be reported in a manner similar to de     
minimis original issue discount. See "--Original Issue Discount" above.         
Treasury regulations implementing the market discount rules have not yet been   
issued, and therefore investors should consult their own tax advisors           
regarding the application of these rules. Investors should also consult         
Revenue Procedure 92-67 concerning the elections to include market discount in  
income currently and to accrue market discount on the basis of the constant     
yield method.                                                                   

Premium                                                                       

A CitiCertificate purchased at a cost greater than its remaining stated     
redemption price at maturity generally is considered to be purchased at a       
premium. If a holder holds such CitiCertificate as a "capital asset" within     
the meaning of Code Section 1221, the holder may elect under Code Section 171   
to amortize such premium under the constant yield method. Such election will    
apply to all debt obligations acquired at a premium by the holder of a          
CitiCertificate held in that taxable year or thereafter, unless revoked with    
the permission of the Internal                                                  

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Revenue Service. The Conference Committee Report to the 1986 Act indicates a    
Congressional intent that the same rules that will apply to the accrual of      
market discount on installment obligations will also apply in amortizing bond   
premium under Code Section 171 on installment obligations such as the           
CitiCertificates, although it is unclear whether the alternatives to the        
constant yield method described above under "--Market Discount" are available.  
Amortizable bond premium will be treated as an offset to interest income on a   
CitiCertificate, rather than a separate deduction item. See "--Election to      
Treat All Interest Under the Constant Yield Method" below regarding an          
alternative manner in which the Code Section 171 election may be deemed to be   
made.                                                                           

Treatment of Losses                                                           

Holders of CitiCertificates will be required to report income with respect  
to the CitiCertificates on the accrual method of accounting, without giving     
effect to delays or reductions in distributions attributable to defaults or     
delinquencies on the Mortgage Loans, except to the extent it can be             
established that such losses are uncollectible. Accordingly, the holder of a    
CitiCertificate, particularly a Subordinated Certificate, may have income or    
may incur a diminution in cash flow as a result of a default or delinquency,    
but may not be able to take a deduction (subject to the discussion below) for   
the corresponding loss until a subsequent taxable year. In this regard,         
investors are cautioned that while they may generally cease to accrue interest  
income if it reasonably appears that the interest will be uncollectible, the    
Internal Revenue Service may take the position that original issue discount     
must continue to be accrued in spite of its uncollectibility until the debt     
instrument is disposed of in a taxable transaction or becomes worthless in      
accordance with the rules of Code Section 166.                                  

To the extent the rules of Code Section 166 regarding bad debts are         
applicable, it appears that holders of CitiCertificates that are corporations   
or that otherwise hold the CitiCertificates in connection with a trade or       
business should in general be allowed to deduct as an ordinary loss such loss   
with respect to principal sustained during the taxable year on account of any   
such CitiCertificates becoming wholly or partially worthless, and that, in      
general, holders of CitiCertificates that are not corporations and do not hold  
the CitiCertificates in connection with a trade or business will be allowed to  
deduct as a short term capital loss any loss sustained during the taxable year  
on account of a portion of any such CitiCertificates becoming wholly            
worthless. Although the matter is not free from doubt, such non-corporate       
holders of CitiCertificates should be allowed a bad debt deduction at such      
time as a loss is allocated to such Class of CitiCertificates to reflect        
losses resulting from any liquidated Mortgage Loans. The Internal Revenue       
Service, however, could take the position that non-corporate holders will be    
allowed a bad debt deduction to reflect such losses only after all the          
Mortgage Loans remaining in the Trust have been liquidated or the applicable    
Class of CitiCertificates has been otherwise retired. The Internal Revenue      
Service could also assert that losses on the CitiCertificates are deductible    
on some other method that may defer such deductions for all holders, such as    
reducing future cash flow for purposes of computing original issue discount.    
This may have the effect of creating "negative" original issue discount which   
would be deductible only against future positive original issue discount or     
otherwise upon termination of the Class. Holders of CitiCertificates are urged  
to consult their own tax advisors regarding the appropriate timing, amount and  
character of any loss sustained with respect to such CitiCertificates. While    
losses attributable to interest previously reported as income should be         
deductible as ordinary losses by both corporate and non-corporate holders, the  
Internal Revenue Service may take the position that losses attributable to      
accrued original issue discount may only be deducted as short-term capital      
losses by non-corporate holders not engaged in a trade or business. Special     
loss rules are applicable to banks and thrift institutions, including rules     
regarding reserves for bad debts. Such taxpayers are advised to consult their   
tax advisors regarding the treatment of losses on CitiCertificates.             

Election to Treat All Interest Under the Constant Yield Method                

A holder of a debt instrument such as a CitiCertificate may elect to treat  
all interest that accrues on the instrument using the constant yield method,    
with none of the interest being treated as qualified stated interest. For       
purposes of applying the constant yield method to a debt instrument subject to  
such an election, (i) "interest" includes stated interest, original issue       
discount, de minimis original issue discount, market discount and de            

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minimis market discount, as adjusted by any amortizable bond premium or         
acquisition premium and (ii) the debt instrument is treated as if the           
instrument were issued on the holder's acquisition date in the amount of the    
holder's adjusted basis immediately after acquisition. It is unclear whether,   
for this purpose, the initial prepayment assumption would continue to apply or  
if a new prepayment assumption as of the date of the holder's acquisition       
would apply. A holder generally may make such an election on an instrument by   
instrument basis or for a class or group of debt instruments. However, if the   
holder makes such an election with respect to a debt instrument with            
amortizable bond premium or with market discount, the holder is deemed to have  
made elections to amortize bond premium or to report market discount income     
currently as it accrues under the constant yield method, respectively, for all  
premium bonds held or market discount bonds acquired by the holder in the same  
taxable year or thereafter. The election is made on the holder's federal        
income tax return for the year in which the debt instrument is acquired and is  
irrevocable except with the approval of the Internal Revenue Service.           
Investors should consult their own tax advisors regarding the advisability of   
making such an election.                                                        

Sale or Exchange of CitiCertificates                                          

If a holder sells or exchanges a CitiCertificate, the holder will recognize 
gain or loss equal to the difference, if any, between the amount received and   
its adjusted basis in the CitiCertificate. The adjusted basis of a              
CitiCertificate generally will equal the cost of the CitiCertificate to the     
seller, increased by any original issue discount or market discount previously  
included in the seller's gross income with respect to the CitiCertificate, and  
reduced by the distributions in reduction of the Stated Amount of the           
CitiCertificate that were previously received by the seller by any amortized    
premium and by any deductible losses.                                           

Except as described above with respect to market discount, and except as    
provided in this paragraph, any gain or loss on the sale or exchange of a       
CitiCertificate realized by an investor who holds the CitiCertificate as a      
capital asset (within the meaning of Code Section 1221) will be capital gain    
or loss and will be long-term or short-term depending on whether the            
CitiCertificate has been held for the long-term capital gain holding period     
(currently more than one year). Such gain will be treated as ordinary income    
(i) if a CitiCertificate is held as part of a "conversion transaction" as       
defined in Code Section 1258(c), up to the amount of interest that would have   
accrued on the holder's net investment in the conversion transaction at 120%    
of the appropriate applicable Federal rate under Code Section 1274(d) in        
effect at the time the holder entered into the transaction minus any amount     
previously treated as ordinary income with respect to any prior disposition of  
property that was held as a part of such transaction, (ii) in the case of a     
non-corporate taxpayer, to the extent such taxpayer has made an election under  
Code Section 163(d)(4) to have net capital gains taxed as investment income at  
ordinary income rates, or (iii) to the extent that such gain does not exceed    
the excess, if any, of (a) the amount that would have been includible in the    
gross income of the holder if its yield on such CitiCertificate were 110% of    
the applicable Federal rate as of the date of purchase, over (b) the amount of  
income actually includible in the gross income of such holder with respect to   
such CitiCertificate. In addition, gain or loss recognized from the sale of a   
CitiCertificate by certain banks or thrift institutions will be treated as      
ordinary income or loss pursuant to Code Section 582(c). Capital gains of       
certain non-corporate taxpayers are subject to a lower maximum tax rate than    
ordinary income of such taxpayers. The maximum tax rate for corporations is     
the same with respect to both ordinary income and capital gains.                

TAXATION OF RESIDUAL CERTIFICATES                                               

Taxation of REMIC Income                                                      

Generally, the "daily portions" of REMIC taxable income or net loss will be 
includible directly on the federal income tax return of holders of Residual     
Certificates ("Residual Holders") as ordinary income or loss, and will not be   
taxed separately to the REMIC. The daily portions of REMIC taxable income or    
net loss for a Residual Holder are determined by allocating the REMIC's         
taxable income or net loss for each calendar quarter ratably to each day in     
such quarter and by allocating such daily portion among the Residual Holders    
in proportion to their respective holdings of Residual Certificates in the      
REMIC on such day. REMIC taxable income is                                      

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generally determined in the same manner as the taxable income of an individual  
using the accrual method of accounting, except that (i) the limitation on       
deductibility of investment interest expense and expenses for the production    
of income do not apply, (ii) all bad loans will be deductible as business bad   
debts, and (iii) the limitation on deductibility of interest and expenses       
related to tax-exempt income will apply. The REMIC's gross income includes      
interest, original issue discount income, and market discount income, if any,   
on the Mortgage Loans or the mortgage loans underlying the Mortgage             
Certificates owned by the REMIC, reduced by amortization of any premium on the  
Mortgage Loans or the mortgage loans underlying the Mortgage Certificates,      
plus amortization of premium on CitiCertificates issued at a premium, plus      
income on reinvestment of cash flows and reserve assets, plus any cancellation  
of indebtedness income upon allocation of realized losses to the                
CitiCertificates. The REMIC's deductions include interest and original issue    
discount expense on the CitiCertificates, servicing fees on the Mortgage Loans  
or the mortgage loans underlying the Mortgage Certificates, other               
administrative expenses and realized losses on the Mortgage Loans or Mortgage   
Certificates. The requirement that Residual Holders report their pro rata       
share of taxable income or net loss of the REMIC will continue until there are  
no Certificates of any Class of the related Series outstanding.                 

The taxable income recognized by a Residual Holder in any taxable year will 
be affected by, among other factors, the relationship between the timing of     
recognition of interest and original issue discount or market discount income   
or amortization of premium with respect to Mortgage Loans or the mortgage       
loans underlying the Mortgage Certificates, on the one hand, and the timing of  
deductions for interest (including original issue discount) or income from      
amortization of issue premium on the CitiCertificates, on the other hand. In    
the event that an interest in the Mortgage Loans or in the mortgage loans       
underlying a Mortgage Certificate is acquired by the REMIC at a discount, and   
one or more of such loans is prepaid, the Residual Holder may recognize         
taxable income without being entitled to receive a corresponding amount of      
cash because (i) the prepayment may be used in whole or in part to make         
distributions in reduction of Stated Amount of CitiCertificates, and (ii) the   
discount on the Mortgage Loans or underlying mortgage loans which is            
includible in income may exceed the deduction allowed upon such distributions   
on those CitiCertificates on account of any unaccrued original issue discount   
relating to those CitiCertificates. When there is more than one Class of        
CitiCertificates on which distributions in reduction of Stated Amount are made  
sequentially, this mismatching of income and deductions is particularly likely  
to occur in the early years following issuance of the CitiCertificates when     
distributions in reduction of Stated Amount are being made in respect of the    
earlier Classes of CitiCertificates to the extent such Classes are not issued   
with substantial discount. If taxable income attributable to such a             
mismatching is realized, in general, corresponding losses would be allowed in   
later years as distributions on the later Classes of CitiCertificates are       
made. Taxable income may also be greater in earlier years than in later years   
as a result of the fact that interest expense deductions, expressed as a        
percentage of the outstanding Stated Amount of the CitiCertificates, may        
increase over time as distributions in reduction of Stated Amount are made on   
the lower yielding Classes of CitiCertificates, whereas interest income with    
respect to any given Mortgage Loan or mortgage loans underlying a Mortgage      
Certificate will remain constant over time as a percentage of the outstanding   
principal amount of that loan. Consequently, Residual Holders must have         
sufficient other sources of cash to pay any federal, state, or local income     
taxes due as a result of such mismatching or unrelated deductions against       
which to offset such income, subject to the rules on "excess inclusions"        
discussed below. The timing of such mismatching of income and deductions        
described in this paragraph, if present with respect to a Series of             
CitiCertificates, may have a significant adverse effect upon a Residual         
Holder's after-tax rate of return. In addition, a Residual Holder's taxable     
income during certain periods may exceed the income reflected by such Residual  
Holder for such periods in accordance with generally accepted accounting        
principles. Investors should consult their own accountants concerning the       
accounting treatment of their investment in such Certificates.                  

Basis and Losses                                                              

The amount of any net loss of the REMIC that may be taken into account by   
the Residual Holder is limited to the adjusted basis of the Residual            
Certificate as of the close of the quarter (or time of disposition of the       
Residual Certificate, if earlier), determined without taking into account the   
net loss for the quarter. The initial adjusted basis of a purchaser of a        
Residual Certificate is the amount paid for such Residual Certificate. Such     

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adjusted basis will be increased by the amount of taxable income of the REMIC   
reportable by the Residual Holder and will be decreased (but not below zero),   
first, by a cash distribution from the REMIC and, second, by the amount of      
loss of the REMIC reportable by the Residual Holder. Any loss that is           
disallowed on account of this limitation may be carried over indefinitely by    
the Residual Holder for whom such loss was disallowed and may be used by such   
Residual Holder only to offset any income generated by the same REMIC.          

A Residual Holder will not be permitted to amortize directly the cost of its
Residual Certificate as an offset to its share of the taxable income of the     
related REMIC. However, that taxable income will not include cash received by   
the REMIC that represents a recovery of the REMIC's basis in its assets. Such   
recovery of basis by the REMIC will have the effect of amortization of the      
issue price of the Residual Certificates over their life. However, in view of   
the possible acceleration of the income of Residual Holders described above     
under "--Taxation of REMIC Income", the period of time over which such issue    
price is effectively amortized may be longer than the economic life of the      
Residual Certificates.                                                          

A Residual Certificate may have a negative value if the net present value of
anticipated tax liability exceeds the present value of anticipated cash flows.  
The REMIC Regulations appear to treat the issue price of such a residual        
interest as zero rather than such negative amount for purposes of determining   
the REMIC's basis in its assets. The preamble to the REMIC Regulations states   
that the Internal Revenue Service may provide future guidance on the proper     
tax treatment of payments made by the transferor of such a residual interest    
to induce the transferee to acquire the interest, and Residual Holders should   
consult their own tax advisors in this regard.                                  

To the extent that the initial adjusted basis of a Residual Holder (other   
than the original holder) in the Residual Certificate is greater than the       
corresponding portion of the REMIC's basis in the Mortgage Loans or Mortgage    
Certificates, the Residual Holder will not recover a portion of such basis      
until termination of the REMIC unless otherwise provided in subsequent          
legislation or future Treasury regulations. The REMIC Regulations currently in  
effect do not so provide. See "Treatment of Certain Items of REMIC Income and   
Expense-Market Discount" below regarding the basis of Mortgage Loans or         
Mortgage Certificates to the REMIC and "Sale or Exchange of a Residual          
Certificate" below regarding possible treatment of a loss upon termination of   
the REMIC as a capital loss.                                                    

Treatment of Certain Items of REMIC Income and Expense                        

Although the Issuer intends to compute REMIC income and expense in          
accordance with the Code and applicable regulations, the authorities regarding  
the determination of specific items of income and expense are subject to        
differing interpretations. The Issuer makes no representation as to the         
specific method that it will use for reporting income with respect to the       
Mortgage Loans and expenses with respect to the CitiCertificates and different  
methods could result in different timing of reporting of taxable income or net  
loss to Residual Holders or differences in capital gain versus ordinary         
income.                                                                         

Original Issue Discount and Premium. Generally, the REMIC's deductions for  
original issue discount and income or offset to interest (expense) from         
amortization of issue premium will be determined in the same manner as          
original issue discount income and premium amortization on CitiCertificates as  
described above under "--Taxation of CitiCertificates--Original Issue           
Discount," "--Variable Rate CitiCertificates" and "--Deferred Interest"         
without regard to the de minimis rule described therein, and "--Premium."       

Deferred Interest. Any Deferred Interest that accrues with respect to any   
adjustable rate Mortgage Loans held by the REMIC will constitute income to the  
REMIC and will be treated in a manner similar to the Deferred Interest that     
accrues with respect to CitiCertificates as described above under "--Taxation   
of CitiCertificates--Deferred Interest".                                        

Market Discount. The REMIC will have market discount income in respect of   
mortgage loans directly held by the REMIC or underlying a Mortgage Certificate  
if, in general, the basis of the REMIC allocable to such mortgage loans is      
exceeded by their unpaid principal balances. The REMIC's basis in such          
mortgage loans is                                                               

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their fair market value immediately after their transfer to the REMIC. The      
REMIC Regulations provide that such basis is equal in the aggregate to the      
issue prices of all regular and residual interests in the REMIC (or the fair    
market value thereof at the Closing Date in the case of a retained class). The  
accrued portion of such market discount would be recognized currently as an     
item of REMIC ordinary income in a manner similar to original issue discount.   
Market discount income generally should accrue in the manner described above    
under "--Taxation of CitiCertificates-Market Discount."                         

Premium. Generally, if the basis of the REMIC in mortgage loans held        
directly by the REMIC or underlying a Mortgage Certificate exceeds the unpaid   
principal balances of the mortgage loans, the REMIC will be considered to have  
acquired such mortgage loans at a premium equal to the amount of such excess.   
As stated above, the REMIC's basis in such mortgage loans is their fair market  
value immediately after their transfer to the REMIC, based on the aggregate of  
the issue prices (or the fair market values of retained classes) of the         
regular and residual interests in the REMIC. As described above under "--       
Taxation of CitiCertificates--Premium," a person who holds mortgage loans as    
capital assets under Code Section 1221 may elect under Code Section 171 to      
amortize premium on the mortgage loans described above that were originated     
after September 27, 1985 under the constant yield method. Amortizable bond      
premium will be treated as an offset to interest income on the mortgage loans,  
rather than as a separate deduction item. Because substantially all of the      
mortgagors on the mortgage loans described above are expected to be             
individuals, Code Section 171 will not be available for premium on mortgage     
loans originated on or prior to September 27, 1985. Premium with respect to     
such mortgage loans may be deductible in accordance with a reasonable method    
regularly employed by the holder of such mortgage loans. The allocation of      
such premium pro rata among principal payments should be considered a           
reasonable method; however, the Internal Revenue Service may argue that such    
premium should be allocated in a different manner, such as allocating such      
premium entirely to the final payment of principal.                             

Limitations on Offset or Exemption of REMIC Income                            

A portion (or all) of the REMIC taxable income includible in determining the
federal income tax liability of a Residual Holder will be subject to special    
treatment. That portion, referred to as the "excess inclusion," is equal to     
the excess of REMIC taxable income for the calendar quarter allocable to a      
Residual Certificate over the daily accruals for such quarterly period of (i)   
120% of the long term applicable Federal rate that would have applied to the    
Residual Certificate (if it were a debt instrument) on the Startup Day under    
Code Section 1274(d), multiplied by (ii) the adjusted issue price of such       
Residual Certificate at the beginning of such quarterly period. For this        
purpose, the adjusted issue price of a Residual Certificate at the beginning    
of a quarter is the issue price of the Residual Certificate, plus the amount    
of the daily accruals of REMIC income for all prior quarters, decreased by any  
distributions made with respect to such Residual Certificate prior to the       
beginning of such quarterly period. Accordingly, the portion of the REMIC's     
taxable income that will be treated as excess inclusions will be a larger       
portion of such income as the adjusted issue price of the Residual              
Certificates diminishes.                                                        

The portion of a Residual Holder's REMIC taxable income consisting of the   
excess inclusions generally may not be offset by other deductions, including    
net operating loss carry forwards, on such Residual Holder's return. However,   
net operating loss carryovers are determined without regard to excess           
inclusion income. Further, if the Residual Holder is an organization subject    
to the tax on unrelated business income imposed by Code Section 511, the        
Residual Holder's excess inclusions will be treated as unrelated business       
taxable income of such Residual Holder for purposes of Code Section 511. In     
addition, REMIC taxable income is subject to 30% withholding tax with respect   
to certain persons who are not U.S. Persons (as defined below under "Tax-       
Related Restrictions on Transfer of Residual Certificates-Foreign Investors"),  
and the portion thereof attributable to excess inclusions is not eligible for   
any reduction in the rate of withholding tax (by treaty or otherwise). See      
"Taxation of Certain Foreign Investors-Residual Certificates" below. Finally,   
if a real estate investment trust or regulated investment company owns a        
Residual Certificate, a portion (allocated under Treasury regulations yet to    
be issued) of dividends paid by the real estate investment trust or regulated   
investment company could not be offset by net operating losses of its           
shareholders, would constitute unrelated business taxable income for tax        
exempt shareholders, and would be ineligible for reduction of withholding to    
certain persons who are not U.S.                                                

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Persons. The SBJPA of 1996 has eliminated the special rule permitting Section   
593 institutions ("thrift institutions") to use net operating losses and other  
allowable deductions to offset their excess inclusion income from Residual      
Certificates that have "significant value" within the meaning of the REMIC      
Regulations, effective for taxable years beginning after December 31, 1995,     
except with respect to Residual Certificates continuously held by thrift        
institutions since November 1, 1995.                                            

In addition, the SBJPA of 1996 provides three rules for determining the     
effect of excess inclusions on the alternative minimum taxable income of a      
Residual Holder. First, alternative minimum taxable income for a Residual       
Holder is determined without regard to the special rule, discussed above, that  
taxable income cannot be less than excess inclusions. Second, a Residual        
Holder's alternative minimum taxable income for a taxable year cannot be less   
than the excess inclusions for the year. Third, the amount of any alternative   
minimum tax net operating loss deduction must be computed without regard to     
any excess inclusions. These rules are effective for taxable years beginning    
after December 31, 1986, unless a Residual Holder elects to have such rules     
apply only to taxable years beginning after August 20, 1996.                    

Tax-Related Restrictions on Transfer of Residual Certificates                 

Disqualified Organizations. If any legal or beneficial interest in a        
Residual Certificate is transferred to a Disqualified Organization (as defined  
below), a tax would be imposed in an amount equal to the product of (i) the     
present value of the total anticipated excess inclusions with respect to such   
Residual Certificate for periods after the transfer and (ii) the highest        
marginal federal income tax rate applicable to corporations. The REMIC          
Regulations provide that the anticipated excess inclusions are based on actual  
prepayment experience to the date of the transfer and projected payments based  
on the Prepayment Assumption. The present value rate equals the applicable      
Federal rate under Code Section 1274(d) as of the date of the transfer for a    
term ending with the last calendar quarter in which excess inclusions are       
expected to accrue. Such rate is applied to the anticipated excess inclusions   
from the end of the remaining calendar quarters in which they arise to the      
date of the transfer. Such a tax generally would be imposed on the transferor   
of the Residual Certificate, except that where such transfer is through an      
agent (including a broker, nominee or other middleman) for a Disqualified       
Organization, the tax would instead be imposed on such agent. However, a        
transferor of a 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. The tax also may be waived by the Internal Revenue     
Service if the Disqualified Organization promptly disposes of the Residual      
Certificate and the transferor pays income tax at the highest corporate rate    
on the excess inclusions for the period the Residual Certificate is actually    
held by the Disqualified Organization.                                          

In addition, if a "Pass-Through Entity" (as defined below) has excess       
inclusion income with respect to a Residual Certificate during a taxable year   
and a Disqualified Organization is the record holder of an equity interest in   
such entity, then a tax will be imposed on such entity equal to the product of  
(i) the amount of excess inclusions that are allocable to the interest in the   
Pass-Through Entity during the period such interest is held by such             
Disqualified Organization and (ii) the federal corporate income tax rate. Such  
tax would be deductible from the ordinary gross income of the Pass-Through      
Entity for the taxable year. The Pass-Through Entity would not be liable for    
such tax if it has received an affidavit from such record holder that it is     
not a Disqualified Organization or stating such holder's taxpayer               
identification number and, during the period such person is the record holder   
of the Residual Certificate, the Pass-Through Entity does not have actual       
knowledge that such affidavit is false.                                         

For these purposes, (i) "Disqualified Organization" means the United States,
any state or political subdivision thereof, any foreign government, any         
international organization, any agency or instrumentality of any of the         
foregoing (provided, that such term does not include an instrumentality if all  
of its activities are subject to tax and a majority of its board of directors   
is not selected by any such government entity), any cooperative organization    
furnishing electric energy or providing telephone service to persons in rural   
areas as described in Code Section 1381(a)(2)(C), and any organization (other   
than a farmers' cooperative described in Code Section                           

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521) that is exempt from taxation under the Code unless such organization is    
subject to the tax on unrelated business income imposed by Code Section 511,    
and (ii) "Pass-Through Entity" means any regulated investment company, real     
estate investment trust, common trust fund, partnership, trust or estate and    
certain corporations operating on a cooperative basis. Except as may be         
provided in Treasury regulations, any person holding an interest in a Pass-     
Through Entity as a nominee for another will, with respect to such interest,    
be treated as a Pass-Through Entity.                                            

The Pooling Agreement with respect to a Series will provide that no legal or
beneficial interest in a Residual Certificate may be transferred or registered  
unless (i) the proposed transferee provides to the transferor, CMSI and the     
Trustee an affidavit providing its taxpayer identification number and stating   
that such transferee is the beneficial owner of the Residual Certificate and    
is not a Disqualified Organization and that it is not purchasing such Residual  
Certificate on behalf of a Disqualified Organization (i.e., as a broker,        
nominee or middleman thereof), and (ii) the transferor provides a statement in  
writing to CMSI and the Trustee that it has no actual knowledge that such       
affidavit is false. Moreover, the Pooling Agreement will provide that any       
attempted or purported transfer in violation of these transfer restrictions     
will be null and void and will vest no rights in any purported transferee.      
Each Residual Certificate with respect to a Series will bear a legend           
referring to such restrictions on transfer, and each holder of a Residual       
Certificate will be deemed to have agreed, as a condition of ownership          
thereof, to any amendments to the related Pooling Agreement required under the  
Code or applicable Treasury regulations to effectuate the foregoing             
restrictions. Information necessary to compute an applicable excise tax must    
be furnished to the Internal Revenue Service and to the requesting party        
within 60 days of the request, and CMSI or the Trustee may charge a fee for     
computing and providing such information.                                       

Noneconomic Residual Interests. The REMIC Regulations permit the Internal   
Revenue Service to disregard certain transfers of Residual Certificates, in     
which case the transferor would continue to be treated as the owner of the      
Residual Certificates and thus would continue to be subject to tax on its       
allocable portion of the net income of the REMIC. Under the REMIC Regulations,  
a transfer of a "noneconomic residual interest" (as defined below) to a         
Residual Holder (other than a Residual Holder who is not a U.S. Person, as      
defined below under "Foreign Investors") is disregarded for all federal income  
tax purposes if a significant purpose of the transferor is to impede the        
assessment or collection of tax. A residual interest in a REMIC (including a    
residual interest with a positive value at issuance) is a "noneconomic          
residual interest" unless, at the time of the transfer, (i) the present value   
of the expected future distributions on the residual interest at least equals   
the product of the present value of the anticipated excess inclusions and the   
highest corporate income tax rate in effect for the year in which the transfer  
occurs, and (ii) the transferor reasonably expects that the transferee will     
receive distributions from the REMIC at or after the time at which taxes        
accrue on the anticipated excess inclusions in an amount sufficient to satisfy  
the accrued taxes on each excess inclusion. The anticipated excess inclusions   
and the present value rate are determined in the same manner as set forth       
above under "Disqualified Organizations." The REMIC Regulations explain that a  
significant purpose to impede the assessment or collection of tax exists if     
the transferor, at the time of the transfer, either knew or should have known   
that the transferee would be unwilling or unable to pay taxes due on its share  
of the taxable income of the REMIC. A safe harbor is provided if (i) the        
transferor conducted, at the time of the transfer, a reasonable investigation   
of the financial condition of the transferee and found that the transferee      
historically had paid its debts as they came due and found no significant       
evidence to indicate that the transferee would not continue to pay its debts    
as they came due in the future, and (ii) the transferee represents to the       
transferor that it understands that, as the holder of a noneconomic residual    
interest, the transferee may incur tax liabilities in excess of cash flows      
generated by the interest and that the transferee intends to pay taxes          
associated with holding the residual interest as they become due. The Pooling   
Agreement with respect to each Series of Certificates will require the          
transferee of a Residual Certificate to certify to the matters in the           
preceding sentence as part of the affidavit described above under the heading   
"Disqualified Organizations."                                                   

Foreign Investors. The REMIC Regulations provide that the transfer of a     
Residual Certificate that has "tax avoidance potential" to a "foreign person"   
will be disregarded for all federal tax purposes. This rule appears intended    
to apply to a transferee who is not a "U.S. Person" (as defined below), unless  
such transferee's income                                                        

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is effectively connected with the conduct of a trade or business within the     
United States. A Residual Certificate is deemed to have tax avoidance           
potential unless at the time of the transfer, (i) the future value of expected  
distributions equals at least 30% of the anticipated excess inclusions after    
the transfer, and (ii) the transferor reasonably expects that the transferee    
will receive sufficient distributions from the REMIC at or after the time at    
which the excess inclusions accrue (and prior to the end of the succeeding      
taxable year) for the accumulated withholding tax liability to be paid. If the  
non-U.S. Person transfers the Residual Certificate back to a U.S. Person, the   
transfer will be disregarded and the foreign transferor will continue to be     
treated as the owner unless arrangements are made so that the transfer does     
not have the effect of allowing the transferor to avoid tax on accrued excess   
inclusions.                                                                     

The Pooling Agreement and, if applicable, the Prospectus Supplement relating
to a Series, may provide that a Residual Certificate may not be purchased by    
or transferred to any person that is not a U.S. Person or may describe the      
circumstances and restrictions pursuant to which such a transfer may be made.   
The term "U.S. Person" means a citizen or resident of the United States, a      
corporation, partnership or other entity created or organized in or under the   
laws of the United States or any political subdivision thereof, an estate that  
is subject to U.S. federal income tax regardless of the source of its income    
or a trust, if, (a) for taxable years beginning after December 31, 1996 (or     
after August 20, 1996 if the trustee has made the applicable election), a       
court within the United States is able to exercise primary supervision over     
the administration of such trust, and one or more United States fiduciaries     
have the authority to control all substantial decisions of such trust, or (b)   
for all other taxable years, such trust is subject to U.S. federal income tax   
regardless of the source of its income.                                         

Sale or Exchange of a Residual Certificate                                    

Upon the sale or exchange of a Residual Certificate, the Residual Holder    
will recognize gain or loss equal to the excess, if any, of the amount          
realized over the adjusted basis (as described above under "--Taxation of       
Residual Certificates--Basis and Losses") of such Residual Holder in such       
Residual Certificate at the time of the sale or exchange. In addition to        
reporting the taxable income of the REMIC, a Residual Holder will have taxable  
income to the extent that any cash distribution to it from the REMIC exceeds    
such adjusted basis on that Distribution Date. Such income will be treated as   
gain from the sale or exchange of its Residual Certificate. It is possible      
that the termination of the REMIC may be treated as a sale or exchange of a     
Residual Holder's Residual Certificate, in which case, if the Residual Holder   
has an adjusted basis in its Residual Certificate remaining when its interest   
in the REMIC terminates, and if it holds such Residual Certificate as a         
capital asset under Code Section 1221, then it will recognize a capital loss    
at that time in the amount of such remaining adjusted basis.                    

Any gain on the sale of a Residual Certificate will be treated as ordinary  
income (i) if a Residual Certificate is held as part of a "conversion           
transaction" as defined in Code Section 1258(c), up to the amount of interest   
that would have accrued on the Residual Holder's net investment in the          
conversion transaction at 120% of the appropriate applicable Federal rate in    
effect at the time the Residual Holder entered into the transaction minus any   
amount previously treated as ordinary income with respect to any prior          
disposition of property that was held as a part of such transaction or (ii) in  
the case of a non-corporate taxpayer, to the extent such taxpayer has made an   
election under Code Section 163(d)(4) to have net capital gains taxed as        
investment income at ordinary income rates. In addition, gain or loss           
recognized from the sale of a Residual Certificate by certain banks or thrift   
institutions will be treated as ordinary income or loss pursuant to Code        
Section 582(c).                                                                 

The Conference Committee Report to the 1986 Act provides that, except as    
provided in Treasury regulations yet to be issued, the wash sale rules of Code  
Section 1091 will apply to dispositions of Residual Certificates where the      
seller of the Residual Certificate, during the period beginning six months      
before the sale or disposition of the residual interest and ending six months   
after such sale or disposition, acquires (or enters into any other transaction  
that results in the application of Code Section 1091) any residual interest in  
any REMIC or any interest in a "taxable mortgage pool" (such as a non-REMIC     
owner trust) that is economically comparable to a Residual Certificate.         

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Mark to Market Regulations                                                    

Prospective purchasers of the Residual Certificates should be aware that on 
January 3, 1995, the Internal Revenue Service released proposed regulations     
(the "Proposed Mark to Market Regulations") under Code Section 475 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    
of a dealer, except to the extent that the dealer has specifically identified   
a security as held for investment. The Proposed Mark to Market Regulations      
provide that, for purposes of this mark-to-market requirement, a Residual       
Certificate is not treated as a security and thus may not be marked to market.  
The Proposed Mark to Market Regulations apply to all Residual Certificates      
acquired on or after January 4, 1995.                                           

TAXES THAT MAY BE IMPOSED ON THE REMIC                                          

Prohibited Transactions                                                       

Income from certain transactions by the REMIC, called prohibited            
transactions, will not be part of the calculation of income or loss includible  
in the federal income tax returns of Residual Holders, but rather will be       
taxed directly to the REMIC at a 100% rate. Prohibited transactions generally   
include (i) the disposition of qualified mortgages other than for (a)           
substitution within two years of the Startup Day for a defective (including a   
defaulted) obligation (or the repurchase in lieu of substitution of a           
defective (including a defaulted) obligation at any time), or for any           
qualified mortgage within three months of the Startup Day, (b) foreclosure,     
default, or reasonably foreseeable default of a qualified mortgage, (c)         
bankruptcy or insolvency of the REMIC, or (d) a qualified (complete)            
liquidation, (ii) the receipt of income from assets that are not the type of    
mortgage loan or investments that the REMIC is permitted to hold, (iii) the     
receipt of compensation for services, or (iv) the receipt of gain from          
disposition of cash flow investments other than pursuant to a qualified         
liquidation. Notwithstanding (i) and (iv), it is not a prohibited transaction   
to sell REMIC property to prevent a default on a regular interest as a result   
of a default on qualified mortgages or to facilitate a clean-up call            
(generally, an optional termination made to save administrative costs when no   
more than a small percentage of the CitiCertificates is outstanding). The       
REMIC Regulations indicate that a substantial modification of a Mortgage Loan   
generally will not be treated as a disposition if it is occasioned by a         
default or reasonably foreseeable default, an assumption of the Mortgage Loan,  
the waiver of a due-on-sale clause or due-on-encumbrance clause, or the         
conversion of an interest rate by a mortgagor pursuant to the terms of a        
convertible adjustable rate Mortgage Loan.                                      

Contributions to the REMIC After the Startup Day                              

In general, the REMIC will be subject to tax at a 100% rate on the value of 
any property contributed to the REMIC after the Startup Day. Exceptions are     
provided for cash contributions to the REMIC (i) during the three months        
following the Startup Day, (ii) made to a qualified reserve fund by a Residual  
Holder, (iii) in the nature of a guarantee, (iv) made to facilitate a           
qualified liquidation or clean-up call, and (v) as otherwise permitted in       
Treasury regulations yet to be issued.                                          

Net Income from Foreclosure Property                                          

A REMIC will be 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. Generally, property          
acquired by deed in lieu of foreclosure would be treated as "foreclosure        
property" for a period of two years, with possible extensions. Net income from  
foreclosure property generally means gain from the sale of foreclosure          
property that is inventory property and gross income from foreclosure property  
other than qualifying rents and other qualifying income for a real estate       
investment trust.                                                               

LIQUIDATION OF THE REMIC                                                        

If a REMIC adopts a plan of complete liquidation within the meaning of Code 
Section 860F(a)(4)(A)(i), which may be accomplished by designating in the       
REMIC's final tax return a date on which such adoption is deemed to occur, and  
sells all of its assets (other than cash) within the 90-day period beginning    
on such date, the                                                               

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REMIC will not be subject to the prohibited transaction rules on the sale of    
its assets, provided that the REMIC credits or distributes in liquidation all   
of the sale proceeds plus its cash (other than amounts retained to meet         
claims) to holders of all Certificates within the 90-day period. An early       
termination of the Trust effected by a repurchase by the Issuer of all          
remaining Mortgage Loans or Mortgage Certificates when the adjusted balances    
thereof have declined to the percentage specified for a particular Series, and  
the distribution to holders of Certificates of the proceeds of such sale and    
any remaining assets of the REMIC, is contingent upon receipt of an opinion of  
counsel or other evidence that such repurchase and distribution will            
constitute a "qualified liquidation" within the meaning of Code Section         
860F(a)(4)(A) and will not adversely affect the REMIC status of the Trust.      

ADMINISTRATIVE MATTERS                                                          

As a REMIC, the Trust must maintain its books on a calendar year basis and  
must file federal income tax returns in a manner similar to a partnership for   
federal income tax purposes. The form for such returns is Form 1066, U.S. Real  
Estate Mortgage Investment Conduit Income Tax Return. The Trustee with respect  
to a Series will be required to sign the REMIC's annual returns. Treasury       
regulations provide that, except where there is a single Residual Holder for    
an entire taxable year, the REMIC will be subject to the procedural and         
administrative rules of the Code applicable to partnerships, including the      
determination of any adjustments to, among other things, items of REMIC         
income, gain, loss, deduction, or credit by the Internal Revenue Service in a   
unified administrative proceeding. As long as the Issuer remains a Residual     
Holder with respect to any portion of a Class of Residual Certificates, the     
Issuer will be obligated to act as "tax matters person," as defined in          
applicable Treasury regulations, with respect to the related Series. If the     
Issuer or an affiliate is not a Residual Holder, the Residual Holder holding    
the largest percentage of the Residual Certificates will be obligated to act    
as tax matters person and, by purchase of a Residual Certificate, will          
irrevocably designate the Issuer as its agent to act as tax matters person and  
agree to execute any documents required to effectuate the actions of the        
Issuer in its capacity as tax matters person. The tax matters person with       
respect to a Series will be, in order of priority, (i) the Issuer or an         
affiliate thereof, in its capacity as a holder of a Residual Certificate or as  
the agent of the holders of the Residual Certificates, and (ii) if the Issuer   
or an affiliate thereof is not a Residual Holder and is not permitted to act    
as tax matters person or as agent of the holders of Residual Certificates       
under applicable Treasury regulations, a Residual Holder or such other person   
as may be specified pursuant to Treasury regulations.                           

LIMITATIONS ON DEDUCTION OF CERTAIN EXPENSES                                    

An investor who is an individual, estate, or trust will be subject to       
limitation with respect to certain itemized deductions described in Code        
Section 67, to the extent that such deductions, in the aggregate, do not        
exceed two percent of the investor's adjusted gross income. In addition, Code   
Section 68 provides that itemized deductions otherwise allowable for a taxable  
year of an individual taxpayer will be reduced by the lesser of (i) 3% of the   
excess, if any, of adjusted gross income over $100,000 ($50,000 in the case of  
a married individual filing a separate return) (in each case, as adjusted for   
post-1991 inflation), or (ii) 80% of the amount of itemized deductions          
otherwise allowable for such year. In the case of a REMIC, such deductions may  
include Servicing Compensation (exclusive of Additional Servicing               
Compensation, if any) for the related Series, servicing fees paid to the        
Servicer, to the servicer of the Mortgage Loans, or to the issuer or guarantor  
of the Mortgage Certificates, or any similar expenses allocated to the REMIC    
with respect to a regular interest it holds in another REMIC. Such investors    
who hold Certificates either directly or indirectly through certain pass-       
through entities may have their pro rata share of such expenses allocated to    
them as additional gross income, but may be subject to such limitations on      
deductions. In addition, such expenses are not deductible at all for purposes   
of computing the alternative minimum tax, and may cause such investors to be    
subject to significant additional tax liability. Temporary Treasury             
regulations provide that such expenses and a corresponding additional amount    
of gross income generally are to be allocated entirely to holders of the        
Residual Certificates in the case of a REMIC that would not qualify as a fixed  
investment trust in the absence of a REMIC election. However, such additional   
income and limitations on deductions will apply to the allocable portion of     
such expenses to holders of CitiCertificates, as well as to holders of          
Residual Certificates, where such CitiCertificates are issued in a manner that  
is similar to pass-through certificates in a fixed investment trust. In         
general, such allocable portion will be                                         

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determined based on the ratio that a holder's income from the CitiCertificate,  
determined on a daily basis, bears to the income of all holders of              
CitiCertificates and Residual Certificates with respect to a REMIC. As a        
result, individuals, estates, or trusts holding CitiCertificates (either        
directly or indirectly through a grantor trust, partnership, S corporation,     
REMIC, or certain other pass-through entities described in the foregoing        
temporary Treasury regulations) may have taxable income in excess of the        
interest income at the Stated Rate on such CitiCertificates that are issued in  
a single class or otherwise consistently with fixed investment trust status or  
in excess of the amount of cash received for the related period on Residual     
Certificates. Unless indicated otherwise in the applicable Prospectus           
Supplement, all such expenses will be allocable to the Residual Certificates.   

TAXATION OF CERTAIN FOREIGN INVESTORS                                           

CitiCertificates                                                              

Interest, including original issue discount, distributable to holders of    
CitiCertificates who are non-resident aliens, foreign corporations or other     
Non-U.S. Persons (i.e., any person who is not a U.S. Person), will be           
considered "portfolio interest" and, therefore, generally will not be subject   
to 30% United States withholding tax provided that such Non-U.S. Person (i) is  
not a "10-percent shareholder" within the meaning of Code Section 871(h)(3)(B)  
or a controlled foreign corporation described in Code Section 881(c)(3)(C) and  
(ii) provides the Trustee, or the person who would otherwise be required to     
withhold tax from such distributions under Code Section 1441 or 1442, with an   
appropriate statement, signed under penalties of perjury, identifying the       
beneficial owner and stating, among other things, that the beneficial owner of  
the CitiCertificate is a Non-U.S. Person. If such statement, or any other       
required statement, is not provided, 30% withholding will apply unless reduced  
or eliminated pursuant to an applicable tax treaty or unless the interest is    
effectively connected with the conduct of a trade or business within the        
United States by such Non-U.S. Person. In the latter case, such Non-U.S.        
Person will be subject to United States federal income tax at regular rates.    
Investors who are Non-U.S. Persons should consult their own tax advisors        
regarding the specific tax consequences to them of owning a CitiCertificate.    

Residual Certificates                                                         

The Conference Committee Report to the 1986 Act indicates that amounts paid 
to Residual Holders who are Non-U.S. Persons are treated as interest for        
purposes of the 30% (or lower treaty rate) United States withholding tax.       
Treasury regulations provide that amounts distributed to Residual Holders may   
qualify as "portfolio interest," subject to the conditions described in         
"CitiCertificates" above, but only to the extent that (i) the Mortgage Loans    
or the mortgage loans underlying the Mortgage Certificates were issued after    
July 18, 1984 and (ii) the Trust or the segregated pool of assets therein (as   
to which a separate REMIC election will be made), to which the Residual         
Certificates relate, consists of obligations issued in "registered form"        
within the meaning of Code Section 163(f)(1). Generally, Mortgage Loans will    
not be, but Mortgage Certificates or CitiCertificates representing either       
regular interests in another Trust or a segregated pool of assets within the    
Trust will be, considered obligations issued in registered form. Furthermore,   
a Residual Holder will not be entitled to any exemption from the 30%            
withholding tax (or lower treaty rate) to the extent of that portion of REMIC   
taxable income that constitutes an "excess inclusion." See "--Taxation of       
Residual Certificates-- Limitations on Offset or Exemption of REMIC Income."    
If the amounts distributed to Residual Holders who are Non-U.S. Persons are     
effectively connected with the conduct of a trade or business within the        
United States by such Non-U.S. Persons, 30% (or lower treaty rate) withholding  
will not apply. Instead, the amounts paid to such Non-U.S. Persons will be      
subject to United States federal income tax at regular rates. If 30% (or lower  
treaty rate) withholding is applicable, such amounts generally will be taken    
into account for purposes of withholding only when paid or otherwise            
distributed (or when the Residual Certificate is disposed of under rules        
similar to withholding upon disposition of debt instruments that have original  
issue discount). See "--Taxation of Residual Certificates--Tax-Related          
Restrictions on Transfer of Residual Certificates--Foreign Investors," above    
concerning the disregard of certain transfers having "tax avoidance             
potential." Investors who are Non-U.S. Persons should consult their own tax     
advisors regarding the specific tax consequences to them of owning a Residual   
Certificate.                                                                    

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BACKUP WITHHOLDING                                                              

Distributions made on the CitiCertificates and proceeds from the sale of the
CitiCertificates to or through certain brokers may be subject to a "backup"     
withholding tax under Code Section 3406 of 31% of "reportable payments"         
(including interest distributions, original issue discount, and, under certain  
circumstances, distributions in reduction of Stated Amount) unless, in          
general, the holder of the CitiCertificate complies with certain reporting      
and/or certification procedures, including the provision of its taxpayer        
identification number to the Trustee, its agent or the broker who effected the  
sale of the CitiCertificate, or such Certificateholder is otherwise an exempt   
recipient under applicable provisions of the Code. Any amounts so withheld      
from distributions on the CitiCertificates would be refunded by the Internal    
Revenue Service or allowed as a credit against the holder's federal income tax  
liability.                                                                      

REPORTING REQUIREMENTS                                                          

Reports of accrued interest, original issue discount and information        
necessary to compute the accrual of market discount will be made annually to    
the Internal Revenue Service and to individuals, estates, non-exempt and non-   
charitable trusts, and partnerships who are either holders of record of         
CitiCertificates or beneficial owners who own CitiCertificates through a        
broker or middleman as nominee. All brokers, nominees and all other non-tax-    
exempt holders of record of CitiCertificates (including corporations, non-      
calendar year taxpayers, securities or commodities dealers, real estate         
investment trusts, investment companies, common trust funds, thrift             
institutions and charitable trusts) may request such information for any        
calendar quarter by telephone or in writing by contacting the person            
designated in Internal Revenue Service Publication 938 with respect to a        
particular Series of Certificates. Holders through nominees must request such   
information from the nominee.                                                   

The Internal Revenue Service's Form 1066, U.S. Real Estate Mortgage         
Investment Conduit Income Tax Return, has an accompanying Schedule Q,           
Quarterly Notice to Residual Interest Holders of REMIC Taxable Income or Net    
Loss Allocation. Treasury regulations require that Schedule Q be furnished by   
the REMIC to each Residual Holder by the last day of the month following each   
calendar quarter (41 days after the end of a quarter under proposed Treasury    
regulations) in which the REMIC is in existence.                                

Treasury regulations require that, in addition to the foregoing             
requirements, information must be furnished quarterly to Residual Holders and,  
if applicable, furnished annually to holders of CitiCertificates and filed      
annually with the Internal Revenue Service concerning Code Section 67 expenses  
(see "Limitations on Deduction of Certain Expenses" above) allocable to such    
holders. Furthermore, under such regulations, information must be furnished     
quarterly to Residual Holders, furnished annually to holders of                 
CitiCertificates, and filed annually with the Internal Revenue Service          
concerning the percentage of the REMIC's assets meeting the qualified asset     
tests described above under "Status of CitiCertificates and Residual            
Certificates."                                                                  

PLANS OF DISTRIBUTION 

Certificates are being offered hereby in Series (each Series evidencing a   
separate Pool) 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 public offering or   
purchase price of such Series, or the method by which such price is to be       
determined, and the net proceeds from such sale.                                

The Issuer 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 one or more of these methods:                  

1. By negotiated firm commitment underwriting and public re-offering by 
underwriters;                                                               

2. By placements by the Issuer with investors through dealers or agents;
and                                                                         

3. By secondary offerings by an affiliate thereof in any of the manners 
set forth above.                                                            

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If underwriters are used in a sale of any Certificates, 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 a fixed public offering price or at varying prices to be       
determined at the time of sale or at the time of commitment therefor. Firm      
commitment underwriting and public re-offering by underwriters may be done      
through underwriting syndicates led by one or more managing underwriters or     
through one or more firms acting alone. The specific managing underwriter or    
underwriters, if any, 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. The Prospectus  
Supplement will describe any discounts and commissions to be allowed or paid    
by the Issuer to the underwriters, any other items constituting underwriting    
compensation and any discounts and commissions to be allowed or paid to the     
dealers or agents. The obligations of the underwriters will be subject to       
certain conditions precedent. The underwriters with respect to a sale of        
Certificates will be obligated to purchase all such Certificates if any are     
purchased. The Issuer and Citicorp will indemnify the several underwriters      
against certain civil liabilities, including liabilities under the Securities   
Act of 1933.                                                                    

The Prospectus Supplement with respect to any Series of Certificates offered
other than through underwriters will contain information regarding the nature   
of such offering and any agreements to be entered into between the Issuer and   
dealers for the Certificates of such Series.                                    

Affiliates of the Issuer may act as agents or underwriters in connection    
with the sale of a Series of Certificates. Any affiliate of the Issuer so       
acting will be named, and its affiliation with the Issuer and Citicorp          
described, in the Prospectus Supplement with respect to such Series.            

The Issuer anticipates that the Certificates will be sold primarily to      
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 in connection   
with re-offers and sales by them of Certificates. Certificateholders should     
consult with their legal advisors in this regard prior to any such re-offer or  
sale.                                                                           

EXPERTS 

Consolidated financial statements of Citicorp and subsidiaries included in  
Citicorp's Annual Report and Form 10-K for 1995 have been incorporated herein   
by reference in reliance upon the report set forth therein of KPMG Peat         
Marwick LLP, independent certified public accountants, and upon the authority   
of said firm as experts in accounting and auditing. The report of KPMG Peat     
Marwick LLP covering the December 31, 1995 financial statements refers to the   
fact that in 1994 Citicorp adopted Statement of Financial Accounting Standards  
("SFAS") No. 112, "Employers' Accounting for Postemployment Benefits", SFAS     
No. 115, "Accounting for Certain Investments in Debt and Equity Securities",    
and FASB Interpretation No. 39, "Offsetting of Amounts Related to Certain       
Contracts", and in 1993 Citicorp adopted SFAS No. 106, "Employers' Accounting   
for Postretirement Benefits Other Than Pensions" and SFAS No. 109, "Accounting  
for Income Taxes."                                                              

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                                                                    APPENDIX A

THE MORTGAGE LOANS AND CITIMORTGAGECERTIFICATES 

This Appendix describes the Mortgage Loans contained in a Pool (including a 
pool underlying a CitiMortgageCertificate), certain pooling and servicing       
arrangements with respect to a Pool, the insurance arrangements in respect of   
such Mortgage Loans and additional material in connection therewith.            

Certain statements contained in this Appendix may be wholly or partly       
inapplicable to a particular Series of Certificates. Any material divergence    
from the following descriptions of the Mortgage Loans will be discussed in the  
applicable Prospectus Supplement. Section references herein preceded by "PA"    
refer to Pooling Agreement sections.                                            

THE MORTGAGE LOANS                                                              

General                                                                       

When used in this Appendix A, the term "Pool" refers to either a Pool       
consisting of Mortgage Loans or a pool of Mortgage Loans underlying a           
CitiMortgageCertificate. A Pool consisting in whole or in part of Mortgage      
Loans originated by Citibank as well as a pool of Mortgage Loans originated by  
Citibank and which underlie a CitiMortgageCertificate are each herein referred  
to as a "Citibank Pool," a Pool consisting in whole or in part of Mortgage      
Loans originated or acquired by CMI as well as a pool of Mortgage Loans         
originated or acquired by CMI and which underlie a CitiMortgageCertificate is   
herein referred to as a "CMI Pool," a Pool consisting in whole or in part of    
Mortgage Loans originated or acquired by CitiMae or its affiliates is referred  
to herein as a "CitiMae Pool," a Pool consisting in whole or in part of         
Mortgage Loans acquired by CMSI from other affiliates as well as a pool of      
Mortgage Loans acquired by CMSI from other affiliates and which underlie a      
CitiMortgageCertificate is herein referred to as a "CMSI Pool," a Pool          
consisting in whole or in part of Mortgage Loans originated or acquired by      
CFSB as well as a pool of Mortgage Loans originated or acquired by CFSB and     
which underlie a CitiMortgageCertificate is herein referred to as a "CFSB       
Pool" and a Pool consisting in whole or in part of Mortgage Loans originated    
by Third Party Originators as well as a pool of Mortgage Loans originated by    
Third Party Originators and which underlie a CitiMortgageCertificate is herein  
referred to as a "Third Party Pool." Each Pool may include either fixed         
interest rate Mortgage Loans (each such Pool, a "Fixed Rate Pool") or           
adjustable interest rate Mortgage Loans (each such Pool, an "ARM Pool"). A      
portion of the interest component of a Mortgage Loan may be retained by an      
Originator and not transferred to a Pool. The information contained herein in   
respect of CMI Pools applies generally to Mortgage Loans originated by other    
affiliates (except CitiMae) and contained in CMSI Pools and CMI Pools may       
include mortgage loans originated or acquired by CFSB or originated by          
Citibank. The information contained herein in respect of CitiMae Pools applies  
generally to the Mortgage Loans originated by CitiMae Originators in            
accordance with the terms of the CitiMae Sellers' Guide. Each Pool will         
include loans (the "Real Estate Loans") evidenced by promissory notes secured   
by first mortgages or deeds of trust on one-to four-family residences. A Pool   
may also contain, in addition to Real Estate Loans, cooperative apartment       
loans (the "Cooperative Loans") evidenced by promissory notes (the              
"Cooperative Notes") secured by security interests in shares issued by          
private, non-profit, cooperative housing corporations (the "Cooperatives") and  
in the related proprietary leases or occupancy agreements granting exclusive    
rights to occupy specific dwelling units in such cooperatives' buildings, (the  
one-to four-family residences and the shares issued by cooperatives are         
hereinafter referred to as the "Mortgaged Properties"). Unless otherwise        
provided in the Prospectus Supplement, the buildings owned by such              
cooperatives will be located in the New York Metropolitan Area in the States    
of New York and New Jersey, the Chicago Metropolitan Area in the State of       
Illinois and the Washington Metropolitan Area in the District of Columbia and   
the State of Maryland. The Mortgaged Properties may consist of (i) detached     
homes, (ii) attached homes (one-to four-family units having a common wall),     
(iii) units located in condominiums or planned unit developments and (iv) such  
other types of homes or units as are set forth in the Prospectus Supplement.    
The Mortgaged Properties may include investment properties and vacation and     
second homes, and may include leasehold interests. The                          

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Mortgaged Properties will be located in states as set forth in the Prospectus   
Supplement. Each Mortgage Loan will be selected by the Issuer from among those  
originated or acquired by the relevant Originator in the ordinary course of     
its business activities or acquired by the relevant Originator from another     
Originator.                                                                     

All Mortgage Loans will (i) have individual principal balances at           
origination of not more than $2,500,000, (ii) have monthly payments due on the  
first day of each month, (iii) be secured by Mortgaged Properties located in    
one of the fifty states of the United States, the District of Columbia, or the  
Commonwealth of Puerto Rico, (iv) be fixed rate or adjustable rate loans which  
may provide for full amortization of principal, deferral of a portion of        
interest, balloon payments of principal or have such other characteristics as   
set forth in the related Prospectus Supplement and (v) have original            
maturities as specified in the related Prospectus Supplement. Unless otherwise  
specified in the applicable Prospectus Supplement, the original principal       
amount of each Mortgage Loan will not be more than 90% of the Original Value    
of the related Mortgaged Property. The principal amount of the "loan," for      
purposes of computation of loan-to-value ratios, includes the amount of any     
part of an origination fee that is financed. The financed portion of the        
origination fee will be less than 5% of the loan amount in each case.           

Unless otherwise stated in the applicable Prospectus Supplement, a Pool may 
contain Real Estate Loans, the original terms of which were modified prior to   
their inclusion in such Pool pursuant to modification agreements (the           
"Modification Agreements") or pursuant to modification, consolidation and       
extension agreements (the "Consolidation Agreements"). A Modification           
Agreement generally alters only the stated annual interest rate and (as a       
result) the monthly payment amount for a Mortgage Loan. The terms of a          
Consolidation Agreement may alter any of the following: the type of Mortgage    
Loan, the identity of a borrower or borrowers, the stated annual interest rate  
or manner of determining such rate, the maturity date, the monthly payment      
amount or the principal amount of the obligation secured by the mortgage. The   
Consolidation Agreement amends the existing mortgage and the obligation         
secured thereby. If additional principal was advanced at the time of            
amendment, the Consolidation Agreement consolidates the new mortgage relating   
to the additional principal with the existing mortgage. With respect to Real    
Estate Loans, the terms of which were modified pursuant to Modification         
Agreements or Consolidation Agreements, whenever the terms "original,"          
"originated" or "origination" are used in this Prospectus or any Prospectus     
Supplement to describe certain characteristics of the Mortgage Loans on a       
particular date, generally such terms shall refer to such characteristics (a)   
in the case of Modification Agreements, at the original date of the extension   
of credit under such Mortgage Loan except for the stated annual interest rate   
and monthly payment as stated above and (b) in the case of Consolidation        
Agreements, at the date of the applicable Consolidation Agreement and as        
modified thereby.                                                               

It is anticipated that each Pool will consist predominantly of Mortgage     
Loans determined by the Issuer to be secured by the primary residence of the    
borrower (the "Mortgagor"). The sole basis for such determination will be       
either (i) the making of a representation by the Mortgagor at origination of    
the Mortgage Loan either that the underlying property will be used by the       
Mortgagor for a period of at least six months every year or that the Mortgagor  
intends to use the underlying property as a primary residence, or (ii) a        
finding that the address of the underlying Mortgaged Property is the            
Mortgagor's mailing address as reflected in the Originator's records. The       
aggregate Adjusted Balance (as defined below) of Mortgage Loans for which such  
determination shall have been made will be disclosed in the applicable          
Prospectus Supplement or, if not known at the time a Series is offered, set     
forth in a report on Form 8-K which will be filed with the Commission and made  
available to the CitiCertificateholders within 15 days of the initial issuance  
of a Series. In the case of Mortgage Loans which were assumed by a new          
borrower after origination, the representation made or the information given    
by the original Mortgagor at origination in respect of (i) and (ii) above is    
used to determine such disclosure in the related Prospectus Supplement and as   
set forth in a report on Form 8-K.                                              

The Issuer will represent that no Mortgage Loan in a Pool will be 30 days or
more past due as of the first day of the month during which the related Series  
is issued or has been 30 days or more past due more than once in the 12-month   
period immediately preceding such day and, in the event that such Pool          
consists in whole or in part of Issuer Certificates, the Issuer will make a     
representation as to delinquency information available with                     

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respect to the Mortgage Loans in which such Issuer Certificates evidence        
interests. For other representations to be made by the Issuer concerning the    
Mortgage Loans, see "Assignment of Mortgage Loans." In addition, at the date    
of initial issuance of any Series, the aggregate Adjusted Balance of the        
Mortgage Loans included in the related Pools will not be less than              
$20,000,000. As used herein, references to aggregate principal balances to be   
used for determining weighted averages, percentages for termination of the      
Pools, or credit support amounts (but not repurchase prices) shall mean the     
scheduled principal balances thereof as of the close of business on the first   
day of the applicable month (whether or not any scheduled payments have been    
received on subsequent days) less Principal Prepayments thereon or in respect   
thereof received or posted prior to the close of business on the business day   
preceding such first day (or, in the case of the Cut-Off Date, any Principal    
Prepayments thereon or in respect thereof received or posted prior to the       
close of business on the Cut-Off Date) (the "Adjusted Balance").                

Property securing a Mortgage Loan may be encumbered by a subordinated       
mortgage loan. Any such subordinated mortgage loan may have been originated by  
an Affiliated Originator, either at the time of origination of the Mortgage     
Loan or otherwise. The Prospectus Supplement will not include the amount of     
the subordinated loan in the loan-to-value calculation included therein. It is  
the policy of each Affiliated Originator to provide a subordinate loan in       
connection with the origination of the first priority Mortgage Loan only if     
the combined amount of such loans would result in a loan-to-value ratio of 90%  
or less. Primary mortgage insurance is generally not required for these loans.  
The proprietary lease or occupancy agreement securing a Cooperative Loan is     
generally subordinate to any blanket mortgage on the related cooperative        
apartment building and/or 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 the Mortgage Loans--Cooperatives."                                   

Mortgage Loans originated by Affiliated Originators and having original     
principal amounts exceeding 90% of Original Value will be covered, and          
Mortgage Loans having original principal balances exceeding 80% but not more    
than 90% of Original Value may be covered, by primary mortgage insurance        
against default until the outstanding principal amount is reduced to at least   
80% of Original Value through principal payments made by the Mortgagor or, in   
the case of CFSB Pools containing Mortgage Loans originated or acquired by the  
California and Florida branches of CFSB, until the outstanding principal        
amount thereof is less than or equal to 80% of either the Original Value        
through principal payments made by the Mortgagor or the value thereof as        
determined by a new appraisal delivered subsequent to origination. So long as   
it is in effect, such primary mortgage insurance will cover losses arising      
from a default up to an amount ranging from 12% to 30% of the principal amount  
of the Mortgage Loan outstanding from time to time. Prior to 1986, the          
Affiliated Originators did not generally make one- to four-family real estate   
loans with loan-to-value ratios above 80% unless such Originator had obtained   
primary mortgage insurance coverage. From 1986 through January 1993, each       
Affiliated Originator originated mortgage loans with loan-to-value ratios in    
excess of 80% but not more than 90% without obtaining primary mortgage          
insurance. Since February 1993, it has been the policy of each Affiliated       
Originator not to make one- to four-family real estate loans with loan-to-      
value ratios above 80% without obtaining primary mortgage insurance. The        
policy of CitiMae Originators is to require primary mortgage insurance for      
one-to-four family real estate loans with current loan-to-value ratios in       
excess of 80%.                                                                  

Each Prospectus Supplement will include, among other things, information, as
of the date of such Prospectus Supplement and to the extent then known to the   
Issuer, as to (i) the aggregate Adjusted Balance of the Mortgage Loans to be    
delivered into the related Pool and the years of origination thereof, (ii) if   
Converted Mortgage Loans with an aggregate Adjusted Balance exceeding 10% of    
the aggregate Adjusted Balance of all Mortgage Loans in the related Pool are    
to be delivered, the aggregate Adjusted Balance of any such Converted Mortgage  
Loans, (iii) the original loan-to-value ratios of the Mortgage Loans (which     
will not include the amount of any subordinated loan in such loan-to-value      
calculation), (iv) the types of Mortgaged Properties securing the Mortgage      
Loans, (v) the geographic distribution of the Mortgaged Properties, prepared    
on a state-by-state basis for states where Mortgage Loans having an aggregate   
Adjusted Balance exceeding 10% of the aggregate                                 

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Adjusted Balance of Mortgage Loans in the related Pool are located, (vi) if     
Buydown Mortgage Loans with an aggregate Adjusted Balance exceeding 10% of the  
aggregate Adjusted Balance of all Mortgage Loans in the related Pool are to be  
delivered, the aggregate Adjusted Balance of Buydown Mortgage Loans in the      
related Pool, (vii) if Leasehold Loans with an aggregate Adjusted Balance       
exceeding 10% of the aggregate Adjusted Balance of all Mortgage Loans in the    
related Pool are to be delivered, the aggregate Adjusted Balance of Leasehold   
Loans in the related Pool and (viii) if 15-year, fixed-rate tiered-payment      
Mortgage Loans originated by CFSB's California branches and providing for a     
prepayment penalty during the first 12 months following origination with an     
aggregate Adjusted Balance exceeding 10% of the aggregate Adjusted Balance of   
all Mortgage Loans in the related Pool are to be delivered, the aggregate       
Adjusted Balance of such Mortgage Loans in the related Pool. In the event       
specific information with respect to the Pool is not known at the time a        
Series is offered, more general information of the nature described above will  
be provided in such Prospectus Supplement and the specific information          
described above will be set forth in a report on Form 8-K which will be filed   
with the Securities and Exchange Commission and made available to               
Certificateholders of the Series within 15 days of the initial issuance of      
such Series.                                                                    

The Issuer will be responsible for administering and servicing the Mortgage 
Loans purchased, directly or indirectly, by the Trust from CMI, Citibank or     
CFSB or their affiliates (the "Affiliated Originators") and will act as master  
servicer with respect to Mortgage Loans purchased, directly or indirectly, by   
the Trust (a) from CitiMae or its affiliates who purchased mortgage loans from  
seller-servicers approved by CitiMae or from such seller-servicers ("CitiMae    
Originators") or (b) from Third Party Originators, and will perform such        
functions as are described in the Pooling Agreement. The Issuer may delegate    
any of its duties under the Pooling Agreement to any corporation, including a   
corporation more than 50% of the stock of which is owned, directly or           
indirectly, by Citicorp. Unless otherwise disclosed in the related Prospectus   
Supplement, if the Mortgage Loans are included directly in the Pool, the        
Issuer will subcontract its duties as servicer of the Affiliated Mortgage       
Loans to CMI (or its designated subservicer) and its duties as master servicer  
(a) with respect to the CitiMae Mortgage Loans to CitiMae and (b) with respect  
to the Third Party Loans sold by Third Party Originators on a servicer-         
retained basis, to the then-current servicers of such Third Party Loans (which  
will be qualified to so service the Third Party Loans in accordance with CMI's  
servicing guidelines). CitiMae will subcontract such duties to various third    
party servicers qualified to do so in accordance with CitiMae's servicing       
guidelines. Such delegation does not relieve the Issuer of its responsibility   
with respect to such duties (the Issuer and CMI in such capacity, the           
"Servicer" and CitiMae and such servicers of Third Party Loans, in such         
capacity, "Subservicer" or "Master Servicer"). The Servicer may at any time     
delegate or subcontract or assign any of its duties as servicer under any       
Pooling Agreement to any corporation, including a corporation more than 50% of  
the stock of which is owned, directly or indirectly, by Citicorp. In the event  
of any such delegation or subcontract, the Servicer will remain responsible     
for the delegee's or subcontractor's performance in accordance with the         
Pooling Agreement. A servicing fee will be paid to the Servicer with respect    
to each payment of interest received with respect to each Mortgage Loan. Such   
servicing fee paid to the Servicer may be in an amount equal to a fixed annual  
percentage as specified in the related Prospectus Supplement for all Mortgage   
Loans in such Pool of the outstanding principal balance of such Mortgage Loan   
on which interest is payable. In such event, the remainder of such interest,    
constituting interest at the mortgage rate for such Mortgage Loan (the "Note    
Rate") less such rate of servicing compensation (the "Pass-Through Rate" for    
such Mortgage Loan), is available for distributions of interest at the Stated   
Rate and distributions of principal to holders of the related                   
CitiMortgageCertificates, CitiCertificates and Residual Certificates, as        
applicable, and to pay any REMIC Servicing Fee or fee to the issuer of credit   
support. Alternatively, if so specified in the related Prospectus Supplement,   
the Pass-Through Rate may be the same (or calculated in the same manner) for    
each Mortgage Loan in the Pool, and the rate of servicing compensation with     
respect to each Mortgage Loan (equal to the difference between the Note Rate    
for such Mortgage Loan and such Pass-Through Rate) may differ among different   
Mortgage Loans or in the case of the CitiMae Mortgage Loans, the fee may be     
equal to an expense rate equal to a master servicing fee (the "Master           
Servicing Fee"), a servicing fee paid to various third party servicers (the     
"Servicing Fee") and a fee for other related expenses. The Servicer will be     
entitled to retain all late payment charges, assumption fees and similar        
charges, and all income or gain on funds held in the related Certificate        
Account referred to below, as additional servicing compensation. The Servicer   
will pay all expenses incurred in connection with the servicing of the          

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Mortgage Loans, including the fees of any subcontractor. See "--Servicing and   
Other Compensation and Payment of Expenses" below.                              

There can be no assurance that the foreclosure and delinquency experience on
the Mortgage Loans underlying the CitiCertificates or the Certificates will be  
comparable to that set forth under "Delinquency, Foreclosure and Loss           
Experience." If the residential real estate market should experience an         
overall decline in property values such that the outstanding balances of the    
Mortgage Loans and any secondary financing on the Mortgaged Properties or       
interests in cooperatives in a particular Pool become equal to or greater than  
the value of the Mortgaged Properties or interests in cooperatives subject to   
the Mortgage Loans included in such Pool, the actual rates of delinquencies,    
foreclosures and losses could be significantly higher than those now generally  
experienced in the mortgage lending industry. To the extent that such           
delinquencies, foreclosures and losses are not covered by obligations under     
any form of credit support, they will be borne by the holders of the related    
CitiCertificates.                                                               

Because the principal amounts of Mortgage Loans (other than ARMs (as defined
below) which provide for a portion of interest to be deferred and added to the  
principal balance of such ARMs) will decline monthly as principal payments,     
including prepayments, are received, the principal balance of each              
CitiMortgageCertificate in a series will decline correspondingly. The Stated    
Amount of each CitiCertificate will decline as described under "Description of  
Certificates" in the body of this Prospectus or in the related Prospectus       
Supplement.                                                                     

Fixed Rate Pools                                                              

A Fixed Rate Pool may contain any of the following types of fixed interest  
rate Mortgage Loans:                                                            

(i) fully amortizing Mortgage Loans providing for level monthly payments
of principal and interest;                                                  

 (ii) growing equity Mortgage Loans providing for initial monthly payments
based on a 10 to 30 year amortization schedule, with further provisions for 
scheduled annual payment increases at rates, unless otherwise specified in  
the applicable Prospectus Supplement, of not less than 3% or more than      
8.25% of the scheduled monthly payments during the preceding year, with the 
full amount of such increases being applied to principal;                   

(iii) tiered payment Mortgage Loans initially providing only for full   
payment of interest and payment of little or no principal for up to three   
years, with further provisions for annual Mortgagor payment increases,      
beginning in the second year, unless otherwise specified in the applicable  
Prospectus Supplement, of up to 7.5% of the monthly Mortgagor payments      
during the preceding year and continuing annually until monthly Mortgagor   
payments are adequate to amortize fully such Mortgage Loans over the        
remainder of the original terms;                                            

(iv) Mortgage Loans amortizing over a fixed number of years but which   
have a shorter term to maturity that causes the outstanding principal       
balance of the related Mortgage Loan to be due and payable at the end of a  
certain specified period;                                                   

(v) fully amortizing graduated-payment Mortgage Loans ("GPMs"), other   
than those described above, which provide for lower periodic payments, or   
for payments of interest only, during the early years of the term, followed 
by periodic payments of principal and interest that increase periodically   
at a predetermined rate until the Mortgage Loan is repaid or for a          
specified number of years, after which level periodic payments begin; or    

(vi) such other fixed rate Mortgage Loans having the characteristics set
forth in the related Prospectus Supplement.                                 

A Fixed Rate Pool may contain one or more Mortgage Loans each of which was  
originated as an adjustable interest rate Mortgage Loan but has been            
converted, at the sole option of the Mortgagor, into a fixed interest rate,     
fully amortizing Mortgage Loan providing for level monthly payments over a      
term not exceeding its                                                          

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remaining term to maturity (a "Converted Mortgage Loan"). Except as otherwise   
provided in this Prospectus and in the applicable Prospectus Supplement, a      
Converted Mortgage Loan at origination is subject to the same origination and   
underwriting guidelines as a comparable adjustable rate mortgage and such a     
Converted Mortgage Loan is not underwritten again at the time of its            
conversion. The Note Rate (and, accordingly, the scheduled monthly payments)    
on such a Converted Mortgage Loan may be higher or lower than the mortgage      
note rate at the time of origination of such Converted Mortgage Loan. No Fixed  
Rate Pool will contain Mortgage Loans which provide for negative amortization.  

ARM Pools                                                                     

ARM Pools will include only adjustable interest rate Mortgage Loans         
("ARMs"), each bearing interest at a Note Rate which adjusts periodically to a  
rate equal to the applicable Index (as defined below) plus the number of basis  
points specified in the Pooling Agreement or in the related mortgage note (the  
"Mortgage Margin" for such ARM), subject to any periodic rate ceiling           
("Periodic Ceiling") and periodic rate floor ("Periodic Floor") and any         
lifetime maximum note rate ("Maximum Note Rate") or a Maximum Note Rate and a   
lifetime minimum note rate ("Minimum Note Rate"), if applicable, as described   
below. Each adjusted Note Rate is generally rounded to the nearest 0.125%,      
subject to the applicability of a Minimum Note Rate and a Maximum Note Rate. A  
Periodic Ceiling limits the amount of any single periodic increase in the Note  
Rate and a Periodic Floor limits the amount of any single periodic decrease in  
the Note Rate. A Maximum Note Rate limits the amount of increases in the Note   
Rate over the life of an ARM and a Minimum Note Rate limits the amount of       
decreases in the Note Rate over the life of an ARM. Except with respect to      
ARMs with Minimum Note Rates, there is no minimum Note Rate to which the Note   
Rate in an ARM may adjust. The Note Rates of the ARMs in a given ARM Pool will  
adjust as described in the applicable Prospectus Supplement and an ARM Pool     
may contain ARMs with different adjustment dates. Certain ARMs may provide for  
periodic adjustments of scheduled monthly payments in order to amortize fully   
the Mortgage Loan by its stated maturity while other ARMs may permit that       
maturity to be extended or shortened in accordance with the portion of each     
payment that is applied to interest in accordance with the periodic Note Rate   
adjustments.                                                                    

Where an ARM provides for limitations on the amount by which monthly        
payments may be increased or changes to the Note Rate of the ARM are made more  
frequently than payment changes, it is possible that an increase in the Note    
Rate will not be covered by the amount of the scheduled monthly payment. In     
that case, the uncollected portion of interest will be deferred and added to    
the principal balance of the ARM.                                               

The amount of the difference between the scheduled monthly payment and the  
monthly interest accrued at the Mortgage Rate is added to the unpaid principal  
balance of the Mortgage Loan and interest accrues on such added principal at    
the then-applicable Mortgage Rate from the date of such addition. Such an       
adjustment is referred to as "negative amortization". Negative amortization     
tends to lengthen the weighted average life of the Mortgage Loans and may       
cause payments near the maturity of the Mortgage Loan to be larger than the     
previously scheduled monthly payments unless the terms of the Mortgage Loan     
permit its maturity to be extended. If a Pool includes Mortgage Loans that      
provide for negative amortization, the related Supplement will describe         
certain of the effects on holders of Certificates as of the preceding Record    
Date of such Series.                                                            

Prior to the first adjustment of the Note Rate on an ARM, the scheduled     
monthly payment by the Mortgagor is the amount which will fully amortize the    
principal balance of the ARM in equal installments over its remaining term and  
pay interest at the initial Note Rate. In the case of ARMs which provide for    
periodic adjustments of scheduled monthly payments, on the first day of the     
month following the month in which a Note Rate adjusts, the Mortgagor is        
required to begin making scheduled monthly payments in amounts which will       
fully amortize the principal balance of the ARM in equal installments over its  
remaining term and pay interest at the adjusted Note Rate except in the case    
of certain ARMs which provide for a deferral of a portion of interest, as       
described in the preceding paragraph. The Mortgagor under an ARM may have been  
qualified at an interest rate which is lower than the current interest rate at  
origination. Accordingly, the repayment of such ARM is dependent on the         
ability of the Mortgagor to make larger monthly payments after the initial      
Note Rate adjustment date.                                                      

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The applicable Prospectus Supplement will contain information respecting the
index (the "Index") utilized to adjust the Note Rates of ARMs, the Mortgage     
Margin, the frequency of interest rate and payment adjustments, the Periodic    
Ceiling, the Periodic Floor, the Maximum Note Rate, the Minimum Note Rate, if   
applicable, and provisions for deferred interest, if any. The ARMs included in  
a particular ARM Pool will be more fully described in the related Prospectus    
Supplement.                                                                     

YIELD CONSIDERATIONS                                                            

A description of yield considerations with respect to any Series of         
CitiCertificates, to the extent such considerations differ from those           
described below, will be set forth in the related Prospectus Supplement.        

The yield on any CitiCertificate or CitiMortgageCertificate will depend on  
the price paid, the effective interest rate of the CitiCertificate or           
CitiMortgageCertificate and the prepayment experience with respect to the       
Mortgage Loans underlying the related Series.                                   

Price                                                                         

Subject to the effect of the amount of interest payable in connection with  
prepayments as described below, prepayments of principal on the Mortgage Loans  
in a Pool will increase the yield on a related CitiCertificate or               
CitiMortgageCertificate purchased at a price less than the aggregate Adjusted   
Balance of the Mortgage Loans in a Pool represented by such CitiCertificate or  
CitiMortgageCertificate and will decrease the yield on a related                
CitiCertificate or CitiMortgageCertificate purchased at a price greater than    
the aggregate Adjusted Balance of the Mortgage Loans represented by such        
CitiCertificate or CitiMortgageCertificate.                                     

Effective Interest Rate                                                       

Interest on each Mortgage Loan is payable in arrears. Each monthly interest 
payment on a Mortgage Loan is calculated as 1/12 of the applicable Note Rate    
multiplied by the unpaid principal balance of such Mortgage Loan outstanding    
as of the first day of the month. The amount of such payments distributed       
monthly with respect to each Mortgage Loan will be similarly calculated on the  
basis of the Pass-Through Rate for such Mortgage Loan. The difference between   
the Note Rate and the Pass-Through Rate for a Mortgage Loan will be retained    
by the servicer as servicing compensation. See "--Servicing and Other           
Compensation and Payment of Expenses" below. If so indicated in the related     
Prospectus Supplement, a portion of the Note Rate may be retained by the        
applicable Originator or the Subservicer.                                       

The yield on a CitiCertificate or CitiMortgageCertificate will be slightly  
lower than the yield otherwise produced by the applicable fixed Stated Rate     
because, while interest will accrue on each Mortgage Loan from the first day    
of each month, the distribution of such interest at the applicable fixed        
Stated Rate will not be made until the applicable Distribution Date in the      
month following the end of the related period during which interest has         
accrued. Full or partial prepayments received and posted during any calendar    
month are passed through to holders of CitiCertificates or                      
CitiMortgageCertificates on the applicable Distribution Date immediately        
following such calendar month. In the case of the Affiliated Mortgage Loans,    
interest on such a full or partial prepayment will be paid at the Stated Rate   
for such entire calendar month (regardless of when during such month such       
prepayment is received) to the extent of Servicing Compensation (exclusive of   
any amount designated as "additional servicing compensation" in the related     
Prospectus Supplement) for such calendar month. In the case of the CitiMae      
Mortgage Loans, such an interest will be paid to the extent of the Master       
Servicing Fee. Therefore, to the extent such Servicing Compensation or the      
Master Servicing Fee, as applicable, equals or exceeds any shortfall in         
collections of interest on account of full or partial prepayments, principal    
prepayments will not affect the yield to holders of CitiCertificates or         
CitiMortgageCertificates, except as provided in the preceding sentence and      
under the heading "Price" above.                                                

To the extent the loan servicing and collection practices of any            
subcontractor or the timing and accruals of interest on principal prepayments   
vary from those disclosed in this paragraph, the applicable Prospectus          
Supplement will describe such differences.                                      

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Other Yield Considerations                                                    

The Note Rates on ARMs adjust periodically in response to movements in the  
Index. In connection with ARM Pools which provide for periodic adjustments to   
scheduled monthly payments, the first distribution on the related               
CitiCertificates or CitiMortgageCertificates reflecting a periodic adjustment   
to scheduled monthly payments on the underlying ARMs will be passed through to  
holders on the Distribution Date in the month following the month in which the  
Note Rate on an ARM is adjusted. Furthermore, unless otherwise described in     
the related Prospectus Supplement, adjustments in the Note Rates are based on   
the relevant Index most recently available as of the date 45 days prior to the  
date of the Note Rate adjustment. Accordingly, the yield to certificateholders  
of ARM pools will be adjusted on a delayed basis relative to movements in the   
Index. Furthermore, adjustments to the Note Rate on an ARM may be limited by a  
Minimum Note Rate, Maximum Note Rate, Periodic Floor and Periodic Ceiling. The  
following table illustrates the timing of the adjustments and receipt by        
Certificateholders of related distributions for a hypothetical ARM Pool         
containing ARMs having an adjustment date of July 1. All dates are assumed to   
be business days.                                                               

                                                        [Enlarge/Download Table]
                                                                                        
May 1................... --Index is published.                                          
July 1.................. --Note Rates are adjusted based on the May 15 Index.           
August 1................ --Mortgagors make the first adjusted monthly payments at the   
                          adjusted Note Rates.                                          
August 18............... --Determination Date.                                          
August 25............... --First payment to Certificateholders including interest at the
                          adjusted Pass-Through Rate which payment reflects the adjusted
                          scheduled monthly payments on the underlying ARMs.            

PREPAYMENT EXPERIENCE                                                           

The Mortgage Loans may be prepaid in full or in part at any time. The       
prepayment experience of the Mortgage Loans will affect the weighted average    
life of a series of CitiCertificates or CitiMortgage Certificates. Based on     
the Originators' experience with their own conventional fixed interest rate     
mortgage loan portfolios and public information with respect to the mortgage    
lending industry, the Issuer anticipates that a significant number of Mortgage  
Loans will be paid in full prior to their scheduled maturities. A number of     
factors, including homeowner mobility, economic conditions, enforceability of   
due-on-sale clauses, any prepayment penalty contained in the Mortgage Loans,    
mortgage market interest rates and the availability of mortgage funds, may      
influence prepayments. In general, due-on-sale clauses for Mortgage Loans will  
be enforced in a manner consistent with applicable law whenever such due-on-    
sale clauses are contained in the mortgage documents and such enforcement       
would not violate the contractual arrangements with the Mortgagors. See "--     
Certain Legal Aspects of the Mortgage Loans--Enforceability of Certain          
Provisions, Prepayment Charges and Prepayments" below.                          

Unless the Prospectus Supplement indicates otherwise, Mortgage Loans        
representing at least 90% of the aggregate Adjusted Balance of the Mortgage     
Loans in a Fixed Rate Pool will contain a due-on-sale clause permitting the     
mortgagee to accelerate the maturity of the Mortgage Loan upon conveyance by    
the Mortgagor of the Mortgaged Property. Generally, ARMs in an ARM Pool will    
contain a due-on-sale clause permitting the mortgagee to accelerate only in     
situations where its security may be impaired.                                  

Servicing institutions for loan pools are sometimes asked to refinance      
existing loans by accepting prepayments of loans and making new loans secured   
by the same property or assigning existing loans to new lenders, or by          
otherwise modifying the terms of existing mortgage loans. A mortgagor may be    
legally entitled to require a lender to grant such an assignment of a real      
estate loan. See "--Certain Legal Aspects of the Mortgage Loans--               
Enforceability of Certain Provisions, Prepayment Charges and Prepayments"       
below. The Issuer reserves the right to offer, at the request of a mortgagor,   
incentives such as favorable loan terms or reduced fees to encourage borrowers  
to refinance existing Mortgage Loans. The Issuer also reserves the right to     
offer, at the request of a mortgagor, to mortgagors modifications of the terms  
of existing Mortgage Loans as an alternative to refinancing, consistent with    
the REMIC provisions of the Code and the terms of the applicable Pooling        

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Agreement. Upon such modification, the Issuer will repurchase such Mortgage     
Loan from the Pool. The Issuer reserves the right to accept prepayments of      
Mortgage Loans in any Pool and to make new loans to the same borrowers or to    
refinance Real Estate Loans in any Pool pursuant to a Consolidation Agreement.  
Upon such refinancing or modification, either pursuant to a Consolidation       
Agreement or a Modification Agreement or through the extension of a new loan    
to the borrower, the refinanced or modified Mortgage Loan will be treated as    
fully prepaid and removed from the Pool. The principal balance of any such      
refinanced or modified Mortgage Loan together with interest accrued thereon at  
the applicable Pass-Through Rate through the last day of the month in which     
such refinancing occurred will be distributed to CitiCertificateholders or      
holders of the CitiMortgageCertificate, as the case may be, in the month        
following the refinancing or modification.                                      

The Servicer permits Mortgagors to participate in certain "prepayment       
programs" with unaffiliated service agencies. Under those programs, generally   
a Mortgagor makes 26 bi-weekly payments during a calendar year, each payment    
being in the amount of one-half of the Mortgagor's scheduled monthly principal  
and interest payment, resulting in 13 monthly payments being made per year.     
Twelve of these monthly payments are applied as such on each applicable Due     
Date. All of the thirteenth payment is applied as a curtailment in reduction    
of the outstanding principal balance of the Mortgage Loan, thus effecting a     
more rapid repayment of the Mortgage Loan and reducing the aggregate amount of  
accrued interest payable on such Mortgage Loan.                                 

See also "The Pooling Agreements--Termination; Repurchase of Mortgage Loans 
and Mortgage Certificates" in the body of this Prospectus for a description of  
the option to repurchase the Mortgage Loans or Mortgage Certificates in any     
Pool when the aggregate principal balance thereof is less than the percentage   
(generally 5%) specified in the applicable Prospectus Supplement of the         
aggregate Adjusted Balance thereof as of the Cut-Off Date for the related       
Series.                                                                         

ASSIGNMENT OF MORTGAGE LOANS                                                    

At the time of issuance of each Series of Certificates, the affiliate of the
Issuer originating or acquiring the Mortgage Loans in a Pool, other than a      
Pool which consists wholly of Issuer Certificates, will assign the Mortgage     
Loans to the Trustee, together with all principal and interest received on or   
with respect to such Mortgage Loans (if specified in the applicable Prospectus  
Supplement, a portion of the interest received on a Mortgage Loan may be        
retained by an Originator or a Subservicer) after the first day of the month    
of issuance of such Certificates (the "Cut-Off Date") other than principal and  
interest due and payable on or before the Cut-Off Date. Mortgage Loans          
underlying Issuer Certificates will have been so assigned to the Underlying     
Trustee at the time of issuance of such Issuer Certificates. The Trustee or     
its agent will, concurrently with such assignment, authenticate and deliver     
the Certificates evidencing such Series. Each Mortgage Loan will be identified  
in a schedule appearing as an exhibit to the Pooling Agreement. Such schedule   
will include information as to the Adjusted Balance of each Mortgage Loan as    
of the close of business on the Cut-Off Date, as well as information with       
respect to the Note Rate, the scheduled monthly payment of principal and        
interest, the maturity date or term and, if such Pool contains Cooperative      
Loans, the number of Mortgage Loans which are Cooperative Loans. (PA Section    
2.01)                                                                           

In addition, the Issuer or the affiliate of the Issuer originating or       
acquiring the Real Estate Loans in a Pool, other than a Pool which consists     
wholly of Issuer Certificates, will, as to each Real Estate Loan in such Pool,  
deliver to the Trustee (or to the custodian hereinafter referred to) the        
Mortgage Note endorsed either manually or by facsimile signature, any           
assumption, modification, buydown or conversion to fixed interest rate          
agreement, any certificate of primary mortgage insurance, a mortgage            
assignment in recordable form (except as provided below) and the original       
recorded Mortgage or, in the case of Cooperative Loans, the related             
Cooperative Note, the original security agreement, the proprietary lease or     
occupancy agreement, the recognition agreement, an executed financing           
statement (if required at origination under applicable law) and the relevant    
stock certificate and related blank stock powers; provided that, in instances   
where recorded documents cannot be delivered due to delays in connection with   
recording, the originator may deliver copies thereof and deliver the original   
recorded documents promptly upon receipt. In addition, in lieu of delivering a  
mortgage assignment in recordable form,                                         

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the originator may instead deliver a blanket assignment which will not be in    
recordable form, together with a power of attorney appointing the Trustee its   
attorney-in-fact to act for and on behalf of such originator in preparing,      
executing, delivering and recording in the name of the Trustee any and all      
instruments of assignment with respect to the Mortgages. Real Estate Loans      
that evidence interests in Issuer Certificates will have been so delivered to   
the Underlying Trustee at the time of issuance of such Issuer Certificates.     

The Originators expect to record or file assignments of the Mortgage Loans  
to the Trustee subsequent to the issuance of CitiMortgageCertificates or        
CitiCertificates, as the case may be, except in states where, as evidenced by   
an opinion of counsel, such recording is not required to protect the Trustee's  
interest in the Mortgage Loan. Such recordation or filing is not necessary to   
make the assignment of the Mortgage Loans to the related Trustee effective      
between such Trustee and the applicable Originator. However, if any of the      
Originators were to make a sale, assignment, satisfaction or discharge of any   
Mortgage Loans prior to recording or filing the assignment to such Trustee,     
the other parties to such sales, assignments, satisfactions or discharges       
might have rights superior to those of such Trustee. If any of the Originators  
were to do so without authority under the Pooling Agreement, it would be        
liable to the Pool or the holders of the related CitiCertificates or            
CitiMortgageCertificates. Moreover, if insolvency or receivership proceedings,  
as the case may be, relating to any of the Originators were commenced prior to  
such recording or filing, creditors of such Originator may be able to assert    
rights in the affected Mortgage Loans superior to those of such Trustee.        

The Trustee will review the above-mentioned documents (including any        
Mortgage Certificates) within 90 days of the delivery of such documents and     
shall promptly notify the Issuer if any document is not delivered or is found   
to be defective in any material respect. If the Issuer cannot deliver such      
document or cure such defect within 180 days (90 days if the defect affects     
the status of the Mortgage Loan as a "qualified mortgage" for REMIC purposes)   
after notice thereof, the Issuer will repurchase the related Mortgage Loan (or  
Mortgage Certificate) from the Trustee within 180 days (90 days if the defect   
affects the status of the Mortgage Loan as a "qualified mortgage" for REMIC     
purposes) after such notice at a price equal to the principal balance owed by   
the Mortgagor, plus accrued and unpaid interest thereon at the applicable       
Pass-Through Rate to the first day of the month following the month of          
repurchase, less any unreimbursed payments under any related Guaranty or other  
credit support and unreimbursed Voluntary Advances (as described below). Such   
repurchase will not diminish the amount available under any related Guaranty    
or other credit support and is deemed to be a reimbursement. Except as          
provided in the last sentence of this paragraph, this repurchase obligation     
constitutes the sole remedy available to the CitiCertificateholders or the      
Trustee against the Issuer for a material defect in a document relating to a    
Mortgage Loan. The Issuer will have certain rights to substitute Mortgage       
Loans or Mortgage Certificates in respect of a Pool. See "The Pools--           
Substitution of Mortgage Loans" in the body of this Prospectus. In respect of   
a Pool, the related Originator will be required to cure any defect in a         
document relating to, or repurchase, any Mortgage Loan which it originated or   
acquired and which is found defective or repurchased by the Issuer.             

In the Pooling Agreement the Issuer will represent and warrant to the       
related Trustee, among other things, that (i) the information set forth in the  
schedule of Mortgage Loans attached thereto is correct in all material          
respects, (ii) a lender's title and insurance policy or binder (or other        
satisfactory evidence of title) for each Real Estate Loan was issued on the     
date of origination thereof and each such policy or binder is valid and         
remains in full force and effect, (iii) at the date of initial issuance of the  
CitiCertificates, it has good title to the Mortgage Loans or the Mortgage       
Certificates and such Mortgage Loans or Mortgage Certificates are free of       
offsets, defenses or counterclaims and, in the case of Mortgage Certificates,   
free of liens, security interests and other encumbrances, (iv) at the date of   
initial issuance of the CitiCertificates, each Mortgage subject to such         
Pooling Agreement is a valid first lien on the property securing the related    
Mortgage Note (subject only to (a) the lien of current real property taxes and  
assessments, (b) covenants, conditions and restrictions, rights of way,         
easements and other matters of public record as of the date of the recording    
of such Mortgage, such exceptions appearing of record being acceptable to       
mortgage lending institutions generally or specifically reflected in the        
related appraisal, and (c) other matters to which like properties are commonly  
subject which do not materially interfere with the benefits of the security     
intended to be provided by the Mortgage) and such property is free of material  
damage and is in good repair, (v) if the Pool includes Cooperative Loans, at    
the date of the initial issuance of the                                         

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CitiCertificates, each security interest created by the cooperative security    
agreement is a valid first lien (subject only to the right of the related       
cooperative to cancel the shares and terminate the proprietary lease for        
unpaid assessments representing the borrower's pro rata share of the            
cooperative's payments for its blanket mortgage, current and future real        
property taxes, maintenance charges and other capital and ordinary expenses to  
which like collateral is commonly subject and for unpaid special assessments    
owed by the Mortgagor to the cooperative) on the collateral securing the        
related Cooperative Note, and the dwelling unit to which the Cooperative Loan   
relates is free of material damage and is in good repair (it being recognized   
by the parties to the Pooling Agreement that, while the Issuer warrants that    
each such security interest is a valid first lien on the collateral securing    
the related Cooperative Note, subject to the exceptions noted, the related      
proprietary lease and occupancy agreement may be subordinated or otherwise      
subject to the lien of any mortgage on the related cooperative building), (vi)  
at the applicable Cut-Off Date, no subject Mortgage Loan is 30 days or more     
past due or has been 30 days or more past due more than once in the 12-month    
period immediately preceding the Cut-Off Date and there are no delinquent tax   
or assessment liens against the property covered by the related Mortgage,       
(vii) at the date of initial issuance of the CitiCertificates, the portion of   
each Mortgage Loan, if any, which in the circumstances set forth under          
"General" above and in the applicable Prospectus Supplement should be insured   
by a private mortgage insurer is so insured and (viii) each Mortgage Loan at    
the time it was made complied in all material respects with applicable state    
and federal laws, including, without limitation, usury, equal credit            
opportunity and disclosure laws. In addition, the Issuer will warrant in        
respect of a Mortgage Loan in a Pool that (a) at the date of the initial        
issuance of the CitiCertificates, there is no mechanics' lien or claim for      
work, labor or material affecting the premises which is or may be prior to or   
equal with the lien of such Mortgage (except those insured by the related       
title insurance policy), (b) the original principal amount of each Mortgage     
Loan was not more than 95% of the Original Value of such Mortgage Loan and (c)  
the Mortgage Loans and Mortgage Certificates conform in all material respects   
with the descriptions thereof in this Prospectus and the Prospectus             
Supplement. Within 180 days of the discovery by the Issuer of a breach of any   
representation or warranty which materially and adversely affects the           
interests of the CitiCertificateholders, or its receipt of notice thereof from  
the Trustee (or within 90 days of discovery by the Issuer of a failure to       
conform to the representations and warranties in the Pooling Agreement that     
affects the status of a Mortgage Loan as a "qualified mortgage" for REMIC       
purposes), the Issuer will cure the breach or repurchase the Mortgage Loan (or  
Mortgage Certificate) or substitute a Mortgage Loan or Mortgage Certificate on  
the terms set forth in the preceding paragraph. Such repurchase will not        
diminish the amount available under any related Guaranty or other form of       
credit support. In addition, the Issuer will indemnify the Pool for any losses  
to such Pool not reimbursed by such repurchase. Such repurchase obligation and  
limited indemnity constitute the sole remedies available to the                 
CitiCertificateholders or the Trustee for any such breach. (PA Section 2.03)    
If Standard & Poor's Corporation ("S&P") initially assigns a rating to the      
CitiCertificates, then at any time that S&P's rating of Citicorp's long-term    
senior debt is below the rating S&P has assigned to the highest rated           
outstanding Class (or Subclass) of a particular Series of CitiCertificates,     
each related Trustee will be required either to maintain possession of the      
related Mortgage Notes or to appoint a custodian (which could be itself),       
which may not be an affiliate of the Issuer, to maintain possession of the      
related Mortgage Notes.                                                         

The Trustee will maintain possession of the documents relating to the       
Mortgage Loans; provided, however, each Trustee will be authorized to appoint   
a custodian or custodians, which may be an affiliate of the Issuer, except in   
the circumstances described in the preceding paragraph, to maintain possession  
of the documents relating to the Mortgage Loans. Such custodian may maintain    
all or part of the documents relating to the Mortgage Loans. Any custodian      
will keep such documents as such Trustee's agent under a custodial agreement.   

PAYMENTS ON MORTGAGE LOANS IN POOLS                                             

The Pooling Agreements will provide that the Issuer will establish and      
maintain with one or more depository banks, savings and loan associations or    
trust companies, any of which may be an affiliate of the Issuer (each, a        
"Depository"), one or more accounts (the "Certificate Account") in the name of  
the Trustee for the benefit of CitiCertificateholders. Amounts with respect to  
any Series may, at the option of the Issuer, be held in the same deposit        
account as amounts with respect to any other Series, provided that the rating   
by each nationally                                                              

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recognized statistical rating organization of each such Series is the same.     
For payments made on the Affiliated Mortgage Loans, the initial Depository      
will be Citibank (New York State), unless otherwise specified in the            
applicable Prospectus Supplement. For the Certificate Account related to the    
Affiliated Mortgage Loans, upon two weeks' prior written notice to the          
Trustee, CMSI may at any time and from time to time in its discretion transfer  
or direct the Trustee in writing to transfer the Certificate Account relating   
to the Affiliated Mortgage Loans to any Depository which meets any of the       
requirements as stated below. In the event that the long-term debt obligations  
of any Depository of the Certificate Account relating to the Affiliated         
Mortgage Loans shall be rated at less than A2 by Moody's Investors Service,     
Inc. ("Moody's"), or the short-term debt obligations of such depository shall   
be rated by S&P at less than A-1 or by Moody's at less than P-1, then within    
five Business Days of such reduction, CMSI shall (A) transfer or direct the     
Trustee in writing to transfer the Certificate Account relating to the          
Affiliated Mortgage Loans to a Depository the long-term debt obligations of     
which are not rated by Moody's at less than A2 and the short-term debt          
obligations of which are not rated at less than A-1 by S&P and P-1 by Moody's   
(the "Rating Requirements"), (B) establish another account in the corporate     
trust department of the Trustee or, if such Trustee has a long-term and short-  
term debt rating at least equal to the Rating Requirements, in any department   
of the Trustee (the "Alternative Certificate Account") and direct the Servicer  
to remit on a daily basis any funds deposited into the Certificate Account      
relating to the Affiliated Mortgage Loans to the Alternative Certificate        
Account, (C) (i) cause such Depository to pledge securities in the manner       
provided by applicable law or (ii) pledge or cause to be pledged securities,    
which shall be held by the Trustee or its agent free and clear of the lien of   
any third party, in a manner conferring on the Trustee a perfected first lien   
and otherwise reasonably satisfactory to the Trustee; such pledge in either     
case to secure such Depository's performance of its obligations in respect of   
the Certificate Account relating to the Affiliated Mortgage Loans to the        
extent, if any, that such obligation is not fully insured by the FDIC;          
provided, however, that prior to the day the Depository or CMSI, as the case    
may be, pledges the securities, CMSI and the Trustee shall have received the    
written assurance of each rating agency which assigned a rating to the          
CitiCertificates that the pledging of such securities and any arrangements or   
agreements relating thereto will not result in a reduction or withdrawal of     
the then-current rating of the CitiCertificates, (D) establish an account or    
accounts or enter into an agreement so that the existing Certificate Account    
relating to the Affiliated Mortgage Loans is supported by a letter of credit    
or some other form of credit support, which issuer of such letter of credit or  
other form of credit support has a long-term and short-term debt rating at      
least equal to the Rating Requirements; provided, however, that prior to the    
establishment of such an account or the entering into of such an agreement,     
CMSI and the Trustee shall have received written assurance from each rating     
agency which assigned a rating to the CitiCertificates that the establishment   
of such an account or the entering into of such an agreement so that the        
existing Certificate Account relating to the Affiliated Mortgage Loans is       
supported by a letter of credit or some other form of credit support will not   
result in a reduction or withdrawal of the then-current rating on the           
CitiCertificates or (E) make such other arrangements as to which CMSI and the   
Trustee have received prior written assurance from each rating agency which     
assigned a rating to the CitiCertificates that such arrangement will not        
result in a reduction or withdrawal of the then-current rating on the           
CitiCertificates. In the event that the rating on the CitiCertificates has      
been downgraded as a result of a rating downgrade of the Depository, for        
purposes of this paragraph, the then-current rating on the CitiCertificates     
shall be the rating assigned to the CitiCertificates prior to any such          
downgrade.                                                                      

For the Certificate Account relating to the CitiMae Mortgage Loans and the  
Third Party Loans, CMSI will establish and maintain accounts which are either   
(i) maintained with a depositary institution the obligations of which (or in    
the case of a depository institution that is the principal subsidiary of a      
holding company, the obligations of such holding company) are rated in one of   
the two highest rating categories by the Rating Agency that rated one or more   
classes of the related Series of Certificates, (ii) an account or accounts the  
deposits in which are fully insured by the FDIC, (iii) an account or accounts   
the deposits in which are insured by the FDIC to the limits established by the  
FDIC and the uninsured deposits in which are otherwise secured such that, as    
evidenced by an opinion of counsel, the Certificateholders have a claim with    
respect to the funds in such account or accounts, or a perfected first-         
priority security interest against any collateral securing such funds, that is  
superior to the claims of any other depositors or general creditors of the      
depository institution with which such account or accounts are maintained or    
(iv) an account or accounts otherwise acceptable to such Rating Agency.         

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The collateral eligible to secure amounts in the Certificate Account is         
limited to Eligible Investments consisting of United States government          
securities and other high-quality investments.                                  

Payments, or proceeds of payments, of the types listed below are to be      
deposited in the related Certificate Account for the related Series (other      
than payments in respect of principal and interest on the related Mortgage      
Loans due on or before the applicable Cut-Off Date):                            

(i) all scheduled payments of principal ("Scheduled Principal") and     
Principal Prepayments (defined to mean any payment or other recovery of     
principal on a Mortgage Loan which is received in advance of its scheduled  
due date and is not accompanied by any interest scheduled for payment in    
any month subsequent to the month of prepayment) on such Mortgage Loans;    

(ii) all payments on account of interest (including payments made from a
buydown subsidy account established with respect to such Mortgage Loans) on 
such Mortgage Loans, adjusted to the Pass-Through Rates for such Mortgage   
Loans;                                                                      

(iii) all payments under any credit support (unless such payments are   
made directly to a different account to be used for distributions to        
CitiCertificateholders by the paying agent for the CitiCertificates);       

(iv) all voluntary advances made as described below ("Voluntary         
Advances") or other payments made by the Servicer in respect of Liquidating 
Loans;                                                                      

 (v) all amounts received, by foreclosure or otherwise, in connection with
the liquidation of defaulted Mortgage Loans which have not been assigned to 
the issuer of credit support in consideration of payments under any such    
credit support, net of expenses incurred in connection with such            
liquidation;                                                                

(vi) all proceeds received under any title, hazard or other insurance   
policy covering any Mortgage Loan (including any deductible paid by the     
Issuer in lieu thereof as permitted by the Pooling Agreement), other than   
proceeds to be applied to the restoration or repair of the related          
property, or released to the Mortgagor in accordance with normal servicing  
procedures;                                                                 

(vii) all proceeds of any repurchase by the Issuer of Mortgage Loans as 
described under "Assignment of Mortgage Loans" or under "The Pooling        
Agreements--Termination; Repurchase of Mortgage Loans and Mortgage          
Certificates" in the body of this Prospectus (PA Section 3.10); and         

(viii) in connection with any Principal Prepayment, the amount required 
to be deposited by the Issuer as a reduction of servicing compensation      
pursuant to the Pooling Agreement, being the difference between 30 days of  
interest at the Pass-Through Rate on the amount of such Principal           
Prepayment and the amount of interest (adjusted to the Pass-Through Rate)   
actually due thereon for the month in which such Principal Prepayment was   
posted.                                                                     

Voluntary Advances, payments by the servicer in respect of Liquidating Loans
and payments under any related Guaranty or other form of credit support will    
be deposited in the Certificate Account not later than on the relevant          
Distribution Date. All other amounts will be deposited in the Certificate       
Account by the second business day next following the day of receipt and        
posting.                                                                        

Distributions on CitiCertificates will be made as provided in the body of   
this Prospectus and in the Prospectus Supplement. See "Description of           
Certificates." In addition, the Trustee (or such other paying agent as may be   
specified in the applicable Prospectus Supplement) will, to the extent of the   
obligations under credit support, include with any distributions to holders     
(i) an amount sufficient to cover delinquencies in scheduled payments of        
principal and interest, first from a Certificate Account Advance (as defined    
below), second from a Voluntary Advance and third, if necessary, from payments  
under the credit support, (ii) an amount sufficient to repurchase Liquidating   
Loans (either as a result of a demand or draw under the credit support or as a  
result of a payment by the servicer) and (iii) certain amounts in respect of    
Principal Prepayments to the extent not paid by the Issuer, all as described    
in the Prospectus Supplement. (PA Section 3.03)                                 

Provision is made for Voluntary Advances, Certificate Account Advances and  
other payments by the servicer in respect of Liquidating Loans on behalf of     
the issuer of credit support in order to avoid drawings on                      

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the credit support for relatively insignificant amounts. In the event the       
amount of delinquencies on Affiliated Mortgage Loans, CitiMae Mortgage Loans    
or Third Party Loans cannot be covered by an advance out of cash in the         
Certificate Account collected in relation to an Affiliated Mortgage Loan,       
CitiMae Mortgage Loan or Third Party Loans, respectively, being held for        
future distribution or withdrawal (a "Certificate Account Advance") the Issuer  
may, but is not obligated to, make Voluntary Advances to the extent that        
payments under credit support would otherwise be required. The Issuer intends   
to make Voluntary Advances to the extent that, were it not to do so, the        
issuer of the credit support would be liable for payments under such credit     
support. Any such advances will be reimbursable to the extent and in the        
manner payments under credit support would be reimbursed, all as described in   
the Prospectus Supplement.                                                      

Not later than three business days before each Distribution Date, the Issuer
will furnish or cause to be furnished a separate statement to the Trustee (and  
to any paying agent) (the information in such statement to be made available    
to the Trustee at other times by the Issuer on request) setting forth, among    
other things, the aggregate amount to be distributed on such Distribution Date  
on account of principal and interest, stated separately, the sources of such    
amount and information relating to the amount available under the credit        
support. (PA Section 3.19)                                                      

The following chart sets forth an example of the application of the         
foregoing provisions to a hypothetical CitiCertificate which represents an      
interest in a Pool consisting primarily of Mortgage Loans which is issued       
during January. The example would be applicable to any such CitiCertificate     
issued during any other month or any CitiMortgageCertificate. (All dates        
referred to are assumed to be business days).                                   

January 1............  Cut-Off Date. The initial principal balance of the Pool  
                     would be the aggregate Adjusted Balance of the Mortgage
                   Loans on January 1 after deducting principal payments
                   due on or before such date. Principal payments due on
                     January 1 and the accompanying interest payments, which
                     represent interest on December 1 balances, are not part
               of the Pool and will be retained by the Servicer.

January 1-January      Payment Period. Principal Prepayments posted during      
31...................  this period will, together with interest, if any,        
                    collected thereon (adjusted to the Pass-Through Rate),
                 be deposited in the Certificate Account and will be
                  passed through to CitiCertificateholders on February
               25. The Servicer collects interest on the prepaid
               amount to the date of prepayment and, for partial
                     prepayments, collects no interest on the prepaid amount
                     for the month of prepayment except, that in the case of
                    certain CitiMae Mortgage Loans a full month's interest
                     will be collected. Scheduled payments due on February 1
                  from Mortgagors will be deposited in the Certificate
                 Account as received. Such payments will include the
                     scheduled principal payments received, plus interest on
             such Mortgage Loans calculated on the January 1
                   principal balances thereof (after deducting from such
                   balances all partial prepayments of principal applied
as of January 1).                 

January 31...........  Record Date. Distributions on February 25 will be made   
                 to CitiCertificateholders of record at the close of
            business on the last business day of the month
              immediately preceding the month of distribution.

February 18..........  Determination Date. On the 18th day of the month, the    
                     Servicer determines the aggregate amount of funds which
                    are available to make distributions on February 25, as
                    described herein, determining separately the aggregate
                 amount available in the Certificate Account and the
                   amount available as Voluntary Advances or as payments
              under credit support to make such distributions.

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February 22..........                                                           
                 Notice Date. By this date, if CMI is not the paying
                    agent for such CitiCertificates, notice of the amounts
              to be distributed on February 25 is given to the
                     Trustee (and, if a person other than the Trustee is the
                   paying agent, to such paying agent). Such notice will
               indicate whether the obligations of any issuer of
        credit support are sufficient to cover all
             delinquencies. If they are, the distribution on
             February 25 will include an amount equal to the
                  principal and interest (adjusted to the Pass-Through
              Rates for the related Mortgage Loans) due on the
                    Mortgage Loans on February 1. If not, the distribution
                will include only those payments due on February 1
                 which have been actually received and posted before
                 February 18. In addition, in either case, Principal
                   Prepayments posted in January will be included in the
                     February 25 distribution together with interest thereon
                    for the entire month of January, adjusted to the Pass-
            Through Rate. The Servicer will deposit in the
               Certificate Account on February 24 the difference
                     between such interest on such Principal Prepayments for
                    such entire month and the amount of interest (adjusted
                 to the Pass-Through Rate) paid by the Mortgagors on
                     such Principal Prepayments; provided, however, that the
                   amount of such deposit shall not exceed (i) Servicing
                 Compensation (exclusive of any amount designated as
                "additional servicing compensation" in the related
                  Prospectus Supplement) with regard to the Affiliated
                   Mortgage Loans and (ii) the Master Servicing Fee with
   regard to the CitiMae Mortgage Loans.

February 25..........  Distribution Date. On February 25, the Trustee (or such  
                   other paying agent as may be specified in the related
                    Prospectus Supplement) will distribute the amounts set
                   forth in the notice to it on February 22 as available
               for distribution. If CMI is the paying agent, the
              Servicer will furnish or cause such notice to be
                    furnished to the Trustee on or before the Distribution
                  Date. If a payment due February 1 is received from a
                Mortgagor and posted on or after February 18 and a
                    Certificate Account Advance has been made with respect
                  to such payment, such payment will be deposited into
                     the Certificate Account as reimbursement therefor. If a
                     Voluntary Advance or a payment under credit Support has
           been made with respect to such payment from a
                 Mortgagor, the Servicer will withdraw the amount of
                    such payment from the Certificate Account to reimburse
                   the entity making the Voluntary Advance or the issuer
                  of any credit support. If no such advance or payment
                     has been made, such late payment will be passed through
                  to the CitiCertificateholder at the time of the next
distribution.                     

Succeeding months follow the above, except with respect to the Cut-Off Date.

COLLECTION AND OTHER SERVICING PROCEDURES                                       

Affiliated Mortgage Loans                                                     

The Issuer or the Servicer will make reasonable efforts to collect all      
payments called for under the Affiliated Mortgage Loans and shall, consistent   
with the Pooling Agreement, follow such collection procedures as it deems       
necessary or advisable. Consistent with the above, the Issuer or the Servicer   
may, in its discretion, (i) waive any late payment charge or any prepayment or  
other charge in connection with the prepayment of an Affiliated Mortgage Loan   
and (ii) arrange with a Mortgagor a schedule for the liquidation of             
delinquencies running for no more than 180 days after the applicable Due Date.  
Such arrangement will be made only upon determining that the coverage of such   
Mortgage Loan by any Primary Mortgage Insurance Policy will not be affected.    
In the event of any such arrangement, but only to the extent of an issuer's     
obligations under credit support, such issuer of credit support will honor      
requests for payment or otherwise distribute funds with respect to such an      
Affiliated Mortgage Loan during the scheduled period in accordance with the     
amortization schedule thereof and without regard to the temporary modification  
thereof.                                                                        

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If property subject to a Mortgage has been or is about to be conveyed by the
Mortgagor and the related Mortgage Loan includes a due-on-sale clause, the      
Issuer or the Servicer is generally obligated to accelerate the maturity of     
the Mortgage Loan. If it reasonably believes it is unable to enforce such due-  
on-sale clause, the Issuer or the Servicer will enter into an assumption and    
modification agreement with the person to whom such property has been or is     
about to be conveyed, upon receipt of assurance that the Primary Mortgage       
Insurance Policy covering such Mortgage Loan will not be affected, pursuant to  
which such person becomes liable under the Mortgage Note or the Cooperative     
Note and (except with respect to CFSB Pools) the original Mortgagor, to the     
extent permitted by applicable law, remains liable thereon. The mortgage rate   
borne by the related fixed rate Mortgage Note or Cooperative Note may not be    
decreased and the mortgage rate borne by the related adjustable rate Mortgage   
Note or Cooperative Note may not be changed in connection with any such         
assumption. The method for determining any increase in the mortgage rate will   
be provided for in the related fixed-rate Mortgage Note or Cooperative Note.    
Any fee collected by the Issuer or the Servicer for entering into any such      
assumption agreement will be retained by the Issuer or the Servicer, as         
additional servicing compensation. With regard to circumstances in which the    
Issuer or the Servicer may be unable to enforce due-on-sale clauses, see "--    
Certain Legal Aspects of the Mortgage Loans--Enforceability of Certain          
Provisions, Prepayment Charges and Prepayments."                                

In addition to a Certificate Account, the Issuer or the Servicer will       
maintain with a depository, expected to be Citibank (New York State), in the    
name of its Trustee, a servicing account (a "Servicing Account") with respect   
to each related Series (which account may include funds with respect to other   
similar mortgage pass-through certificates) and will deposit and retain         
therein all payments of taxes, assessments or comparable items received for     
the account of the Mortgagors relating to Affiliated Mortgage Loans.            
Withdrawals from any Servicing Account may be made only to effect payment of    
taxes, assessments or comparable items, to reimburse such party out of related  
collections for any cost incurred in paying taxes and assessments or otherwise  
preserving or protecting the value of the Mortgages, to refund to Mortgagors    
any amounts determined to be overages, to pay interest to Mortgagors on         
balances in such Servicing Account to the extent required by law and to clear   
and terminate such Servicing Account at the termination of the related Pooling  
Agreement. (PA Section 3.11)                                                    

The Issuer or the Servicer will exercise its best reasonable efforts to     
maintain and keep in full force and effect such primary mortgage insurance as   
specified under "General" above and in the related Prospectus Supplement for    
so long as such insurance is required pursuant to the Pooling Agreement as      
specified in such section and in such Prospectus Supplement. Primary mortgage   
insurance may be replaced by substantially equivalent insurance but only if     
(i) each nationally recognized statistical rating organization that initially   
rated the Series advises the Issuer that such replacement will not adversely    
affect the current rating of such Series or (ii) the claims-paying ability of   
the substitute primary mortgage insurance company is rated in the same, an      
equivalent or a higher category or categories as such Series by each such       
nationally recognized statistical rating organization.                          

CitiMae Mortgage Loans                                                        

Pursuant to the Pooling Agreement, the Servicer will be responsible for     
servicing and administering the CitiMae Mortgage Loans. The Servicer intends    
to perform such servicing and administrative functions principally through      
CitiMae, Inc., as Subservicer, which will act for and on behalf of the          
Servicer. See "The Originators--CitiMae, Inc." in the body of the Prospectus.   
The Subservicer has entered or will enter into contracts with approved          
servicers to perform, as independent contractors, certain servicing functions   
for the Servicer. One or more servicers which are affiliates of the Servicer    
may perform similar functions under other contracts with respect to the         
CitiMae Mortgage Loans originated by affiliates of CitiMae. The Servicer will   
at all times remain responsible for the performance of its duties under the     
Pooling Agreement.                                                              

The Servicer will agree to perform diligently all services and duties       
customary to the servicing by prudent mortgage lending institutions of          
mortgages of the same type as the Mortgage Loans in those jurisdictions where   
the related Mortgaged Properties are located. The duties to be performed by a   
servicer include collection and                                                 

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remittance of principal and interest payments, administration of mortgage       
escrow accounts, collection of insurance claims and, if necessary,              
foreclosure. The Servicer will monitor each servicer's performance and will     
have the right to remove a servicer of any CitiMae Mortgage Loan at any time    
for cause. In the event of any such termination, the Servicer would continue    
to be responsible for servicing such CitiMae Mortgage Loans and would           
designate a substitute servicer (which may include an affiliate of the          
Subservicer). During the period necessary to effect the transfer of the         
servicing functions to any such substitute servicer, or to the Servicer in the  
event the Servicer shall perform such servicing functions itself, the servicer  
who has been terminated shall continue to perform all of its duties and         
responsibilities with respect to the CitiMae Mortgage Loans serviced by it      
until such time as the Servicer notifies it of such transfer. The Servicer      
shall be entitled to retain the same servicing fee as was paid to the servicer  
in the event the Servicer shall elect to perform such servicing functions       
itself.                                                                         

The Servicer or the Subservicer will agree to proceed diligently to collect 
all payments called for under the Mortgage Notes. Consistent with the above,    
the Servicer or the Subservicer may, in its discretion, (i) waive any           
prepayment charge, assumption fee, late payment charge or any other charge in   
connection with the prepayment of a CitiMae Mortgage Loan and (ii) arrange      
with a Mortgagor a plan of relief, other than a modification or extension of    
the Mortgage, when appropriate rather than recommending liquidation. Such       
arrangement will be made only upon determining that the coverage of such        
CitiMae Mortgage Loan by any Primary Mortgage Insurance Policy will not be      
affected. In the event of any such arrangement, but only to the extent of the   
amount of any credit support, the provider of such credit support will honor    
requests for payment or otherwise distribute funds with respect to such         
CitiMae Mortgage Loan during the scheduled period in accordances with the       
amortization schedule thereof and without regard to the temporary modification  
thereof. In addition, in the event of any such arrangement, the Servicer's      
obligation to make Voluntary Advances on the related CitiMae Mortgage Loan      
shall continue during the scheduled period to the extent such Voluntary         
Advances are not made by the subservicer.                                       

Under the Pooling Agreement, the Servicer will be required to enforce "due- 
on-sale" clauses with respect to the CitiMae Mortgage Loans to the extent       
contemplated by the terms of the CitiMae Mortgage Loans and permitted by        
applicable law. Where an assumption of, or substitution of liability with       
respect to, a CitiMae Mortgage Loan is required by law, upon receipt of         
assurance that the Primary Mortgage Insurance Policy covering such CitiMae      
Mortgage Loan will not be affected, the Master Servicer may permit the          
assumption of a CitiMae Mortgage Loan, pursuant to which the Mortgagor would    
remain liable on the Mortgage Note, or a substitution of liability with         
respect to such Mortgage Loan, pursuant to which the new Mortgagor would be     
substituted for the original Mortgagor as being liable on the Mortgage Note.    
Any fees collected for entering into an assumption or substitution of           
liability agreement may be retained by the Servicer as additional servicing     
compensation. In connection with any assumption or substitution, the Mortgage   
Rate borne by the related Mortgage Note may not be changed.                     

The Pooling Agreement may require the Servicer to establish and maintain one
or more escrow accounts into which Mortgagors deposit amounts sufficient to     
pay taxes, assessments, hazard insurance premiums or comparable items.          
Withdrawals from the escrow accounts maintained for Mortgagors may be made to   
effect timely payments of taxes, assessments and hazard insurance premiums or   
comparable items, to reimburse the Servicer out of related assessments for      
maintaining hazard insurance, to refund to Mortgagors amounts determined to be  
overages, to remit to Mortgagors, if required, interest earned, if any, on      
balances in any of the escrow accounts, to repair or otherwise protect the      
Mortgaged Property and to clear and terminate any of the escrow accounts. The   
Servicer will be solely responsible for administration of the escrow accounts   
and will be expected to make advances to such account when a deficiency exists  
therein.                                                                        

The Issuer or the Servicer and any successor servicer appointed following an
Event of Default, will be required to maintain certain insurance covering       
errors and omissions in the performance of its obligations as servicer and      
certain fidelity bond coverage ensuring against losses through wrongdoing of    
its officers, employees and agents. (PA Section 6.07)                           

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Third Party Loans                                                             

Pursuant to the Pooling Agreement, the Servicer will be responsible for     
servicing and administering the Third Party Loans. The Servicer intends to      
perform such servicing and administrative functions principally through Third   
Party Originators, as Subservicers, with respect to Third Party Loans acquired  
on a servicing-retained basis. See "The Originators--Third Party Originators"   
herein. The Subservicer will act for and on behalf of the Servicer. The         
Servicer will at all times remain responsible for the performance of its        
duties under the Pooling Agreement.                                             

HAZARD INSURANCE                                                                

The Issuer or the Servicer will cause a hazard insurance policy to be       
maintained for each Real Estate Loan. The coverage of each such policy is       
required to be in an amount not less than the lesser of (x) the maximum         
insurable value (as established by the property insurer) of the improvements    
securing such Real Estate Loan if such amount is less than the unpaid           
principal balance of the Real Estate Loan, and (y) (i) the principal balance    
owing on such Real Estate Loan (if such amount is greater than or equal to 80%  
but is less than or equal to 100% of the insurable value) or (ii) 80% of the    
insurable value (if the principal balance on the Real Estate Loan is less than  
80% of the insurable value). As set forth above, all amounts collected by the   
Servicer under any hazard policy (except for amounts to be applied to the       
restoration or repair of property subject to the related Mortgage or property   
acquired by foreclosure or amounts released to the Mortgagor in accordance      
with normal servicing procedures) will be deposited in the applicable           
Certificate Account. In the event that the Servicer maintains a blanket policy  
insuring against hazard losses on all of the Mortgage Loans, it shall           
conclusively be deemed to have satisfied its obligation relating to the         
maintenance of hazard insurance. Such blanket policy may contain a deductible   
clause, in which case the Servicer will deposit in the Certificate Account all  
sums which would have been deposited therein but for such clause. The Servicer  
is required to maintain a fidelity bond and errors and omissions policy or      
their equivalent with respect to officers and employees which provide coverage  
against losses which may be sustained as a result of in officer's or            
employee's misappropriation of funds or errors and omissions in failing to      
maintain insurance, subject to certain limitations as to amount of coverage,    
deductible amounts, conditions, exclusions and exceptions in the form and       
amount specified in the Pooling Agreement.                                      

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 and hail, riot, strike and civil         
commotion, subject to the conditions and exclusions particularized in each      
policy. The policies relating to such Real Estate Loans will be underwritten    
by different insurers and therefore will not contain identical terms and        
conditions. 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     
mud flows), 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 property securing such a Real Estate Loan is     
located in a federally designated special flood hazard zone, the applicable     
Pooling Agreement will require that flood insurance be maintained.              

Most of the properties securing the Real Estate Loans will be covered by    
homeowners' insurance policies which, in addition to the standard form of fire  
and extended coverage, provide coverage for certain other risks. These          
homeowners' policies typically contain a "coinsurance" clause which in effect   
requires the insured 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    
insured's coverage falls below this specified percentage, then the insurer's    
liability in the event of a partial loss shall not exceed the lesser of (i)     
the actual cash value (generally defined as replacement cost at the time and    
place of loss, less physical depreciation) of the improvements damaged or       
destroyed 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 required to be maintained on the       
improvements securing such Real Estate Loans may decline, and since             
residential properties generally have historically appreciated in value over    
time, the effect of coinsurance in the event of partial loss may be that        
hazard insurance proceeds will be                                               

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insufficient to restore fully the damaged property. However, to the extent of   
the amount available to cover hazard losses under any Guaranty or other credit  
support, CitiCertificateholders will not suffer loss by reason of               
delinquencies or foreclosures following hazard losses, whether or not subject   
to coinsurance clauses.                                                         

The Issuer and the Servicer will not require that a hazard or flood         
insurance policy be maintained for any Cooperative Loan. Generally, the         
cooperative itself is responsible for maintenance of hazard insurance for the   
property owned by the cooperative, and the tenant-stockholders of that          
cooperative do not maintain individual hazard insurance policies. To the        
extent, however, a cooperative and the related borrower on a Cooperative Note   
do not maintain such insurance or do not maintain adequate coverage or any      
insurance proceeds are not applied to the restoration of the damaged property,  
damage to such borrower's cooperative apartment or such cooperative's building  
could significantly reduce the value of the collateral securing such            
Cooperative Note.                                                               

If an issuer's obligations under credit support are exhausted, and if a     
Mortgagor defaults on his obligations to make payments on a Mortgage Loan, the  
CitiCertificateholders will bear all risk of loss resulting from hazard losses  
not covered by hazard insurance.                                                

PRIMARY MORTGAGE INSURANCE                                                      

A Mortgage Loan secured by a Mortgaged Property having an LTV in excess of  
80% may or, in the case of a CitiMae Mortgage Loan, will have a policy (a       
"Primary Mortgage Insurance Policy") insuring against default all or a          
specified portion of the principal amount thereof in excess of such percentage  
of the value of the Mortgaged Property, as specified in the related Prospectus  
Supplement.                                                                     

Evidence of each Primary Mortgage Insurance Policy will be provided to the  
Trustee simultaneously with the transfer to the Trustee of the related          
Mortgage Loan. The Servicer, on behalf of itself, the Trustee and the           
Certificateholders, is required to present claims to the insurer under any      
Primary Mortgage Insurance Policy and to take such reasonable steps as are      
necessary to permit recovery thereunder with respect to defaulted Mortgage      
Loans. Amounts collected by the Servicer on behalf of the Servicer, the         
Trustee and the Certificateholders shall be deposited in the Certificate        
Account for distribution as set forth above. The Servicer will not cancel or    
refuse to renew any Primary Mortgage Insurance Policy required to be kept in    
force by the Pooling Agreement. (PA Section 3.10)                               

MAINTENANCE OF INSURANCE POLICIES; CLAIMS THEREUNDER AND OTHER REALIZATION      
UPON DEFAULTED MORTGAGE LOANS                                                   

The Servicer will exercise its best reasonable efforts to keep each Primary 
Mortgage Insurance Policy (if any) in full force and effect at least until the  
outstanding principal balance of the related Mortgage Note is equal to the      
percentage of the appraised value of the Mortgaged Property specified herein.   
The Servicer has agreed (or will agree) to pay the premium for each Primary     
Mortgage Insurance Policy on a timely basis in the event that the Mortgagor     
does not make such payments.                                                    

The Servicer, on behalf of the Trustee and Certificateholders, will present 
claims to the insurer under any applicable Primary Mortgage Insurance Policy    
and will take such reasonable steps as are necessary to permit recovery under   
such insurance policies respecting defaulted Mortgage Loans. As set forth       
above, all collections by the Servicer under such policies that are not         
applied to the restoration of the related Mortgage Property are to be           
deposited in the Certificate Account, subject to withdrawals as heretofore      
described.                                                                      

If any property securing a defaulted Mortgage Loan is damaged and proceeds, 
if any, from the related hazard insurance policy are insufficient to restore    
the damaged property to a condition sufficient to permit recovery under any     
applicable Primary Mortgage Insurance Policy, the Servicer will not be          
required to expend its own funds to restore the damaged property unless the     
Servicer determines (i) that such restoration will increase the proceeds to     
Certificateholders upon liquidation of the Mortgage Loan after reimbursement    
of the Servicer for its expenses and (ii) that such expenses will be            
recoverable to it through liquidation proceeds.                                 

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Regardless of whether recovery under any Primary Mortgage Insurance Policy  
is available or any further amount is payable under the credit support for a    
Series of Certificates, the Servicer is nevertheless obligated to follow such   
normal practices and procedures as it deems necessary or advisable to realize   
upon the defaulted Mortgage Loan. However, the Servicer is not required under   
the Pooling Agreement to expend its own funds to foreclose on a defaulted       
Mortgage Loan unless it generally determines that foreclosure would increase    
the net proceeds of liquidation available for distribution to                   
Certificateholders and its expenditures will be recoverable. If at any time no  
further amount is payable under the credit support for a Series of              
Certificates, and if the proceeds of any liquidation of the property securing   
the defaulted Mortgage Loan, if such property is liquidated, are less than the  
principal balance of the defaulted Mortgage Loans plus interest accrued         
thereon, Certificateholders will realize a loss in the amount of such           
difference plus the aggregate of unreimbursed advances of the Servicer with     
respect to such Mortgage Loan and expenses incurred by the Servicer in          
connection with such proceedings which are reimbursable under the Pooling       
Agreement.                                                                      

REALIZATION UPON DEFAULTED MORTGAGE LOANS                                       

If any Mortgage Loans become Liquidating Loans, an issuer of credit support 
may, if so specified in the related Prospectus Supplement, be obligated to      
purchase from the Trustee such Liquidating Loans up to the amount of its        
remaining obligations under the related credit support. The Servicer may pay    
the purchase price in respect of a Liquidating Loan on behalf of the issuer of  
credit support in order to avoid demands or draws under such credit support.    
If the ultimate net recovery is equal to or less than the unreimbursed          
payments under the related credit support with respect to the Mortgage Loan,    
the amount of an issuer's obligations under credit support will be replenished  
in an amount equal to the amount of such ultimate net recovery. In the event    
that the ultimate net recovery exceeds the unreimbursed payments, such excess   
will be retained, in the case of a Guaranty issued by Citicorp, by Citicorp as  
compensation for the issuance of such Guaranty, and in the case of other        
credit support, the Servicer will be entitled to such proceeds unless           
otherwise specified in the related Prospectus Supplement. Such excess will not  
be applied to replenish the remaining Amount Available under any credit         
support. Although a CitiCertificateholder will have no right to such excess     
proceeds, the previous reduction in an issuer's obligations under credit        
support with respect to that Series will have been fully restored.              

If a default occurs on a Mortgage Loan at a time when the amount of the     
remaining obligations under the related credit support is less than the         
purchase price of such Mortgage Loan, no payments under such credit support     
for the purchase of such Mortgage Loan or to cover delinquencies may be made    
with respect to such default unless otherwise provided in the related           
Prospectus Supplement. With respect to Liquidating Loans which are not          
purchased by or on behalf of the issuer of credit support, the Issuer or the    
Servicer will be obligated to follow such normal practices and procedures as    
it deems necessary or advisable to realize upon a defaulted Mortgage Loan.      
However, the Servicer is not required under the Pooling Agreement to expend     
its own funds to foreclose on a defaulted Mortgage Loan unless it generally     
determines that foreclosure would increase the net proceeds of liquidation      
available for distribution to Certificateholders and its expenditures will be   
recoverable. If the Servicer does choose to foreclose on a defaulted Mortgage   
Loan, the Issuer or the Servicer may (directly or through an assignee) sell     
the property at a foreclosure or trustee's or other sale, negotiate with the    
Mortgagor for a deed in lieu of foreclosure or, in the event a deficiency       
judgment is available against the Mortgagor or other person (see "--Certain     
Legal Aspects of Mortgage Loans--Anti-Deficiency Legislation and Other          
Limitations on Lenders" below for a description of the limited availability of  
deficiency judgments), foreclose against such property and proceed for the      
deficiency against the appropriate person. Although the Servicer may elect to   
pursue deficiency judgments on the Mortgage Loans, the Servicer is generally    
not required under the Pooling Agreement to do so, even if permitted by         
applicable law. In such circumstances, the holder of any CitiCertificate        
evidencing an interest in a Pool with a Liquidating Loan will realize a loss    
to the extent that the ultimate net recovery, after reimbursement to the        
Issuer or the Servicer of expenses incurred in connection with the liquidation  
of such Mortgage Loan, is less than the outstanding principal balance and       
accrued and unpaid interest thereon at the Pass-Through Rate for such Mortgage  
Loan. The Pooling Agreement with respect to a Series will require that any      
property acquired by the Servicer by deed in lieu of foreclosure with respect   
to a Liquidating Loan be administered so that it meets the definition of        
"foreclosure property" in Section 860G(a)(8) of the Code at all                 

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times, and so that no income from the rental or sale of such property will be   
"net income from foreclosure property" within the meaning of Code Section       
860G(c).                                                                        

Ordinarily, the holder of collateral acquired through foreclosure maximizes 
recovery by providing financing to a new purchaser. As to collateral securing   
a Cooperative Loan, any prospective purchaser will generally have to obtain     
the approval of the board of directors of the relevant cooperative before       
purchasing the shares and acquiring rights under the proprietary lease or       
occupancy agreement securing that Cooperative Loan. See "--Certain Legal        
Aspects of the Mortgage Loans--Foreclosure on Shares of Cooperatives" below.    
This approval is usually based on the purchaser's income and net worth and      
numerous other factors. The necessity of acquiring such approval could,         
however, limit the number of potential purchasers for those shares and          
otherwise limit the Issuer or the Servicer or the Issuer's or the Servicer's    
ability to sell, and realize the value of, those shares.                        

In general, a "tenant-stockholder" (as defined in Code Section 216(b)(2)) of
a corporation that qualifies as a "cooperative housing corporation" within the  
meaning of Code Section 216(b)(1) is allowed a deduction for amounts paid or    
accrued within his taxable year to the corporation representing his             
proportionate share of certain interest expenses and certain real estate taxes  
allowable as a deduction under Code Section 216(a) to the corporation under     
Code Sections 163 and 164. In order for a corporation to qualify under Code     
Section 216(b)(1) 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 Code Section 216(b)(1) 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 Code Section 216(a) with respect to those years.   
In view of the significance of the tax benefits accorded tenant-stockholders    
of a corporation that qualifies under Code Section 216(b)(1), the likelihood    
that such a failure would be permitted to continue over a period of years       
appears remote.                                                                 

If at any time no further amount is payable under the credit support for a  
Series of CitiCertificates, the Issuer or the Servicer may expend its own       
funds to restore property securing a Liquidating Loan included in such Series   
which has sustained uninsured damage, but only if it determines that such       
restoration will increase the proceeds to the CitiCertificateholders of         
liquidation of the Liquidating Loan after reimbursement of the Issuer or the    
Servicer for its expenses.                                                      

SERVICING AND OTHER COMPENSATION AND PAYMENT OF EXPENSES                        

The Issuer's or Servicer's primary compensation for its servicing activities
in respect of a Pool will come from the payment to it of a servicing fee. A     
servicing fee will be paid to the Issuer in respect of Mortgage Loans           
underlying a Pool as described under "Description of Certificates--The          
Servicer" in the body of this Prospectus. Such servicing fee paid to the        
Servicer in respect of a Pool may be in an amount equal to a fixed annual       
percentage as specified in the related Prospectus Supplement of the             
outstanding principal balance of such Mortgage Loans on which interest is       
payable. In such event, the rate of servicing compensation for each Mortgage    
Loan in a Pool will be fixed, and the Pass-Through Rates of the Mortgage Loans  
will differ based on different mortgage rates. Accordingly, the weighted        
average of the fixed Pass-Through Rates of the Mortgage Loans underlying any    
Series of CitiCertificates will vary each month based on the level of           
principal repayments (including prepayments) on the underlying fixed rate       
Mortgage Loans. In such event, because the rate of servicing compensation is    
fixed for each Mortgage Loan, disproportionate principal payments among         
Mortgage Loans bearing different mortgage rates in a Pool may affect the yield  
to the holder of a CitiCertificate, and accordingly, may affect the market      
value of such CitiCertificate. Alternatively, if so specified in the related    
Prospectus Supplement, the Pass-Through Rate may be the same (or calculated in  
the same manner) for each Mortgage Loan in the Pool, and the rate of servicing  
compensation with respect to each Mortgage Loan (equal                          

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to the difference between the mortgage rate for such Mortgage Loan and such     
Pass-Through Rate) may differ among different Mortgage Loans. In such event,    
disproportionate principal payments among Mortgage Loans bearing different      
mortgage rates in a Pool will not affect the weighted average Pass-Through      
Rate, but may affect the weighted average rate of servicing compensation. In    
addition, the rate of servicing compensation and the Pass-Through Rate may      
both differ among different Mortgage Loans. Additional information with         
respect to the Pass-Through Rates of the Mortgage Loans and the related rates   
of servicing compensation will be set forth in the related Prospectus           
Supplement. As principal payments are made on the Mortgage Loans, the portion   
of each monthly payment which represents interest will decline and thus the     
primary servicing compensation will ordinarily decrease as the Mortgage Loans   
amortize.                                                                       

In addition to its primary servicing compensation, the Issuer or Servicer   
will retain all prepayment charges, if any, assumption fees and late payment    
charges, all to the extent collected from Mortgagors, and has agreed to pay     
all such amounts over to any related subservicer. Based upon the Originators'   
experience and the experience of the residential financing industry generally   
with respect to conventional one- to four-family real estate mortgages, such    
as the Mortgage Loans, it appears that compensation to the Issuer from these    
additional sources will be negligible in amount.                                

The Issuer or the Servicer will be responsible (to the extent specified in  
the related Prospectus Supplement) for payment of interest in respect of        
prepayments of principal of the Mortgage Loans to be distributed to             
CitiCertificateholders in excess of the amount of such interest received from   
the Mortgagors.                                                                 

The Issuer or the Servicer will pay all expenses incurred in connection with
its servicing of the related Mortgage Loans (subject to limited reimbursement   
as described below), including, without limitation, payment of the fees and     
disbursements of the Trustee (to the extent such fees are not deducted from     
amounts received on the Mortgage Loans) and independent accountants, payments   
of all fees and expenses in connection with the realization upon defaulted      
Mortgage Loans, and payment of expenses incurred in connection with             
distributions and reports to CitiCertificateholders.                            

If no further amount is payable under the credit support for a Series, the  
Issuer or the Servicer will be entitled to reimbursement for certain expenses   
incurred by it in connection with the liquidation of defaulted Mortgage Loans,  
and the holders of CitiCertificates will suffer loss to the extent that the     
proceeds of the liquidation proceedings respecting any defaulted Mortgage       
Loan, after reimbursement of the Issuer's or the Servicer's expenses, are less  
than the principal balance of such Mortgage Loan. In addition, the Servicer     
will be entitled to reimbursement of certain expenditures made by it in         
connection with the preservation, protection or restoration of the security     
for a defaulted or foreclosed Mortgage Loan.                                    

CERTAIN LEGAL ASPECTS OF THE MORTGAGE LOANS                                     

Mortgages                                                                     

The Real Estate Loans will be secured by either mortgages or deeds of trust,
depending upon the prevailing practice in the state in which the property       
subject to a Real Estate Loan is located. A mortgage or a deed of trust         
creates a lien upon the real property encumbered by such instrument and         
represents the security for the repayment of an obligation that is customarily  
evidenced by a promissory note or a bond. It is not prior to the lien for real  
estate taxes and assessments and certain other liens. Priority with respect to  
mortgages and deeds of trust depends on their terms and generally on the order  
of recording with a state, county or municipal office. There are two parties    
to a mortgage, the mortgagor, who is the borrower/homeowner or the land         
trustee (as described below), 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 the case of a land trust, title to the property is held    
by a land trustee under a land trust agreement, while the borrower/homeowner    
is the beneficiary of the land trust; at origination of a mortgage loan, the    
borrower executes a separate undertaking to make payments on the mortgage       
note. The security arrangements for a living trust (also known as a family      
trust or inter vivos trust) are similar to those for                            

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a land trust, except that the borrower executes the mortgage note. Although a   
deed of trust is similar to a mortgage, a deed of trust formally has three      
parties, the trustor (similar to a mortgagor), who is the homeowner and may or  
may not be the borrower, the beneficiary (similar to a mortgagee), who is the   
lender, and the trustee, a third-party grantee. Under a deed of trust, the      
trustor 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. The mortgagee's authority under a mortgage and the trustee's        
authority under a deed of trust are governed by law, the express provisions of  
the mortgage or deed of trust, and, in some cases, the directions of the        
beneficiary.                                                                    

Cooperatives                                                                  

All cooperative apartments relating to the Cooperative Loans are located in 
the States of New York, New Jersey, Illinois and Maryland and in the District   
of Columbia. The private, non-profit, cooperative apartment corporation owns    
all the real property that comprises the project, including the land, separate  
dwelling units and all common areas. The cooperative is directly responsible    
for project management and, in most cases, payment of real estate taxes and     
hazard and liability insurance. If there is a blanket mortgage on the           
cooperative apartment building and/or underlying land, as is generally the      
case, the cooperative, as project mortgagor, is also responsible for meeting    
these mortgage obligations. A blanket mortgage is ordinarily incurred by the    
cooperative in connection with the construction or purchase of the              
cooperative's apartment building. The interest of the occupant under            
proprietary leases or occupancy agreements to which that cooperative is a       
party are generally subordinate to the interest of the holder of the blanket    
mortgage in that building. If the cooperative is unable to meet the payment     
obligations arising under its blanket mortgage, the mortgagee holding the       
blanket mortgage could foreclose on that mortgage and terminate all             
subordinate proprietary leases and occupancy agreements. Also, the blanket      
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 lump sum at final maturity. The inability of the cooperative to refinance   
this mortgage and its consequent inability to make such final payment could     
lead to foreclosure by the mortgagee providing the financing. A foreclosure in  
either event by the holder of the blanket mortgage could eliminate or           
significantly diminish the value of any collateral held by the lender who       
financed the purchase by an individual tenant-stockholder of cooperative        
shares or the collateral securing the Cooperative Loans.                        

The cooperative is owned by tenant-stockholders who, through ownership of   
stock, shares or membership certificates in the corporation, receive            
proprietary leases or occupancy agreements which confer exclusive rights to     
occupy specific units. Generally, a tenant-stockholder of a cooperative must    
make a monthly payment to the cooperative representing such tenant-             
stockholder's pro rata share of the cooperative's payments for its blanket      
mortgage, real property taxes, maintenance expenses and other capital or        
ordinary expenses. An ownership interest in a cooperative and accompanying      
occupancy rights is financed through a cooperative share loan evidenced by a    
promissory note and secured by a security interest in the occupancy agreement   
or proprietary lease and in the related cooperative shares. The lender 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 promissory 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.                                                  

Foreclosure on Mortgages                                                      

Foreclosure of a deed of trust is generally accomplished by a non-judicial  
trustee's sale under a specific provision in the deed of trust which            
authorizes the trustee to sell the property upon any default by the borrower    
under the terms of the note or deed of trust. In some states, the trustee 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 a notice of default and         

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notice of sale. In addition, the trustee in some states must provide notice to  
any other individual having an interest in the real property, including any     
junior lienholders. The trustor, borrower or any 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. Generally, state law controls the amount  
of foreclosure expenses and costs, including attorney's fees, which may be      
recovered by a lender. If the deed of trust is not reinstated, 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 state      
laws require that a copy of the notice of sale be posted on the property or     
the courthouse door of the county in which the property is located, recorded    
and sent to all parties having an interest in the real property.                

An action to foreclose a mortgage is an action to recover the mortgage debt 
by enforcing the mortgagee's rights under the mortgage. It is regulated by      
statutes and rules and subject throughout to the court's equitable powers. In   
Texas, for example, it is necessary to give both notice of intent to            
accelerate as well as notice of acceleration of an installment note.            
Generally, a mortgagor is bound by the terms of the mortgage note and the       
mortgage as made and cannot be relieved from his default. However, since a      
foreclosure action is equitable in nature and is addressed to a court of        
equity, the court may relieve a mortgagor of a default and deny the mortgagee   
foreclosure on proof that the mortgagor's default was neither wilful nor in     
bad faith and that the mortgagee's action was such as to establish a waiver,    
or fraud, bad faith, oppressive or unconscionable conduct as to warrant a       
court of equity to refuse affirmative relief to the mortgagee. Under certain    
circumstances a court of equity may relieve the mortgagor from an entirely      
technical default where such default was not willful.                           

A foreclosure action is subject to most of the delays and expenses of other 
lawsuits if defenses or counterclaims are interposed, sometimes requiring up    
to several years to complete. Substantial delays and expenses may be incurred   
if the defaulting mortgagor files a petition under the federal bankruptcy laws  
prior to the initiation of a foreclosure action or during its pendency.         
Moreover, recent judicial decisions suggest that a non-collusive, regularly     
conducted foreclosure sale may be challenged as a fraudulent conveyance,        
regardless of the parties' intent, if a court determines that the sale was for  
less than fair consideration and such sale occurred while the mortgagor was     
insolvent and within one year (or within the statute of limitations if the      
trustee in bankruptcy elects to proceed under state fraudulent conveyance law)  
of the filing of bankruptcy. Similarly, a suit against the debtor on the        
mortgage note or bond may take several years.                                   

In case of foreclosure under either a mortgage or a deed of trust, the sale 
by the referee or other designated officer or by the trustee is a public sale.  
However, because of the difficulty potential third party purchasers at the      
sale 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 the   
foreclosure sale. Rather, it is common for the lender to purchase the property  
from the trustee or referee for an amount equal to the principal amount of the  
mortgage or deed of trust plus accrued and unpaid interest and the expenses of  
foreclosure. Thereafter, the lender will assume the burdens of ownership,       
including obtaining casualty insurance, paying real estate taxes and making     
such repairs at its own expense as are necessary to render the property         
suitable for sale. The lender will commonly 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.     
Any loss may be reduced by the receipt of any mortgage insurance proceeds. The  
Servicer is not required under the Pooling Agreement to expend its own funds    
to foreclose on a defaulted Mortgage Loan unless it generally determines that   
foreclosure would increase the net proceeds of liquidation available for        
distribution to Certificateholders and its expenditures will be recoverable.    
There may be circumstances, for example, the possibility of incurring           
liability for environmental damage or a substantial decline in the value of     
the underlying property, which would cause the Servicer to elect not to         
foreclose on a defaulted Mortgage Loan.                                         

Foreclosure of a mortgage is accomplished in New York, New Jersey and       
Florida in most cases, and in Illinois in all cases, by an action in            
foreclosure culminating in a judicial sale (or, in the case of Illinois, a      
judicially approved sale) of the real property by a court-appointed referee,    
sales agent or other official following                                         

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a judgment of foreclosure. The purposes of a foreclosure action are to enable   
the mortgagee to realize upon its security and to bar the mortgagor, persons    
with liens subordinate to the foreclosing mortgagee, and certain other persons  
with interests in the real property from their statutory rights and "equity of  
redemption." The doctrine of equity of redemption provides that, until the      
property covered by a mortgage has been sold in accordance with a properly      
conducted foreclosure and foreclosure sale, those having an equity of           
redemption may redeem the property by paying the entire debt with interest      
and, in the event that a foreclosure action is pending, the costs of such       
action. Those having a statutory right or equity of redemption must be made     
parties and duly summoned to the foreclosure action in order for their          
statutory right or equity of redemption to be barred.                           

In Connecticut a court in its discretion may order either a foreclosure by  
judicial sale or strict foreclosure. Generally, Connecticut courts grant        
strict foreclosure unless the court upon the motion of a party or upon its own  
motion determines that the net value of the mortgaged property is materially    
in excess of the debt being foreclosed. If a court orders strict foreclosure,   
it will establish a "law day" for each defendant in the foreclosure action.     
The period of time between the entry of the judgment of foreclosure and the     
first law day will be set by the court. The first law day will be for the       
owner of the mortgaged property, and then, in sequence, there will be a law     
day for each party having a lien on, or other interest in, the mortgaged        
property which is junior to the foreclosing mortgagee's interest, in inverse    
order of their priority. Unless a party assigned a prior law day redeems by     
paying the debt due the foreclosing mortgagee in full, each party will have     
the right on his law day to redeem the mortgaged property by paying off the     
foreclosing mortgagee; after redemption, the redeeming party will own the       
mortgaged property subject to any other liens or interests as to which a law    
day has not passed. If a party fails to redeem on his law day, his rights in    
the mortgaged property are extinguished. If no party redeems, the foreclosing   
mortgagee becomes the owner of the mortgaged property, subject to other liens   
or interests which are prior to the mortgage foreclosed or as to which the      
holders thereof were not parties to the foreclosure action. If the court        
orders foreclosure by sale rather than strict foreclosure, a committee is       
appointed by the court to sell the mortgaged property at auction. The proceeds  
of the sale will then be distributed first to pay the costs of the sale and     
then to satisfy the debts of the parties in the order of their priority to the  
extent the proceeds permit.                                                     

Upon foreclosure of a Connecticut mortgage, a mortgagor who is unemployed or
under-employed may, in certain circumstances, be granted a stay of the          
foreclosure proceedings not to exceed six months, and a restructuring of the    
mortgage debt to add unpaid interest and certain other charges to the           
outstanding principal amount of the debt. The total amount of the restructured  
debt may not exceed the larger of the original mortgage debt or 90% of the      
fair market value at the time of restructuring and the restructured payments    
must be made over the remaining portion of the original term of the mortgage.   

In California, foreclosure can be judicial or nonjudicial. The primary      
distinction between a judicial and a nonjudicial foreclosure is that in the     
case of a judicial sale a deficiency judgment may be obtained while in the      
case of the latter it may not. However, because of anti-deficiency legislation  
with respect to purchase-money deeds of trust, the Issuer will, in almost all   
instances, pursue nonjudicial foreclosure. A second difference between          
judicial and nonjudicial foreclosure is that in the case of the former the      
trustor may redeem the property by paying the amount bid at the sale for a      
period of three months or one year after the sale, depending upon whether the   
proceeds of the sale were sufficient to pay the lender in full, and the         
purchaser at the sale, whether it be the lender or a third party, may not have  
possession of the property until expiration of the redemption period.           

Following the entry of judgment in judicial foreclosure, the clerk of the   
court issues a writ of special execution directing the sheriff to sell the      
subject property at a sheriff's sale. Following the sheriff's sale, the         
mortgagor has the right to redeem the property by paying the amount bid at the  
sheriff's sale plus statutory interest (a) if the property is both abandoned    
and not used primarily for agricultural or grazing purposes, within thirty      
days of the date of the sheriff's sale, or (b) if the property is not           
abandoned or is used primarily for agricultural or grazing purposes, within     
six months after the date of the sheriff's sale. If the mortgagor does not      
redeem, the senior creditor having a lien on the property may redeem within     
successive five-day periods after the time allowed the prior lienholder,        
according to the priority of liens.                                             

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A lender may accept a deed in lieu of foreclosure instead of pursuing either
judicial or nonjudicial foreclosure. By accepting a deed in lieu of             
foreclosure, the lender takes the property back subject to any junior liens,    
which would be subordinated or released of record.(1)                           

In addition, California law can delay foreclosure and collection of late    
charges if a lender participates in the sale of credit disability insurance in  
connection with one of its loans and the borrower suffers a disability.         

In Illinois, a borrower in a mortgage foreclosure suit is granted the right 
to reinstate a mortgage prior to the expiration of ninety days from the date    
the court obtains jurisdiction over all mortgagors in respect of the property   
subject to such mortgage foreclosure. In the event such right is exercised,     
the delinquent borrower is required to pay only the actual delinquency costs    
and reasonable attorney fees, but not any amount which is due as a result of    
any acceleration provisions in the note evidencing the debt. As a result, the   
borrower may unilaterally reinstate the mortgage loan and terminate the         
foreclosure proceedings. In addition, when the lender bids less than the total  
debt at the judicial sale, Illinois law provides the borrower with a special    
30-day right of redemption in the foreclosure of a single-family residence.     
Upon exercise of such right, the borrower need only redeem by paying the        
amount of the sale price, plus interest and costs, and not the deficiency.      

Foreclosure on Shares of Cooperatives                                         

The cooperative shares owned by the tenant-stockholder and pledged to the   
lender 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, and may be canceled 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 apartment building incurred by such tenant-       
stockholder. The proprietary lease or occupancy agreement generally permits     
the cooperative to terminate such lease or agreement in the event an obligor    
fails to make payments or defaults in the performance of covenants required     
thereunder. Typically, the lender and the cooperative enter into a recognition  
agreement which 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 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 cooperative apartment,        
subject, however, to the cooperative's right to sums due under such             
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 value of the collateral below   
the outstanding principal balance of the cooperative loan and accrued and       
unpaid interest thereon.                                                        

Recognition agreements also provide that in the event of a foreclosure on a 
cooperative loan, the lender must obtain the approval or consent of the         
cooperative as required by the proprietary lease before transferring            
--------                                                                        
(1) Even a transfer at a nonjudicial foreclosure sale has been held by one      
  federal court of appeals to constitute a fraudulent conveyance. The United
States Court of Appeals for the Ninth Circuit (in which California is   
located), however, has held to the contrary. Amendments to the federal  
bankruptcy laws addressed this conflict, at least in the bankruptcy     
  context (as opposed to a state court fraudulent conveyance claim), but not
with complete clarity. It is probable that a court would interpret these
amendments to permit challenging a nonjudicial foreclosure sale as a    
  fraudulent conveyance if the property is worth significantly more than the
amount paid at the sale. Citibank Service Corporation, a subsidiary of  
 CFSB doing business as Citibank Insurance Agency, sells such insurance in
  connection with Mortgage Loans originated by CFSB. Finally, in California,
  the borrower has until 5 days before a trustee sale to reinstate the loan.

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the cooperative shares or assigning the proprietary lease. Generally, the       
lender is not limited in any rights it may have to dispossess the tenant-       
stockholders.                                                                   

In New York and New Jersey, foreclosure on the cooperative shares is        
accomplished by a 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 foreclosure 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    
foreclosure. Generally, a sale conducted according to the usual practice of     
banks selling similar collateral 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.                 

The Servicer is not required under the Pooling Agreement to expend its own  
funds to foreclose on a defaulted Mortgage Loan unless it generally determines  
that foreclosure would increase the net proceeds of liquidation available for   
distribution to Certificateholders and its expenditures will be recoverable.    
There may be circumstances, for example, the possibility of incurring           
liability for environmental damage or a substantial decline in the value of     
the underlying property, which would cause the Servicer to elect not to         
foreclose on a defaulted Mortgage Loan.                                         

Rights of Redemption                                                          

In some states, after sale pursuant to a deed of trust or foreclosure of a  
mortgage, the trustor or mortgagor and foreclosed junior lienors are given a    
statutory period in which to redeem the property from the foreclosure sale.     
The right of redemption should be distinguished from the equity of redemption,  
which is a nonstatutory right that must be exercised prior to 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 right   
of redemption would defeat the title of any purchaser from the lender           
subsequent to foreclosure or sale under a deed of trust. Consequently, the      
practical effect of a right of redemption is to force the lender to retain the  
property and pay the expenses of ownership until the redemption period has      
run. In some states, there is no right to redeem property after a trustee's     
sale under a deed of trust or after a foreclosure action.                       

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 or a mortgagee under a mortgage. In      
some states, statutes limit the right of the beneficiary or mortgagee to        
obtain a deficiency judgment against the borrower following foreclosure or      
sale under a deed of trust. A deficiency judgment is a personal judgment        
against the former borrower equal 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. Other statutes require the beneficiary or mortgagee to       
exhaust the security afforded under a deed of trust or mortgage by foreclosure  
in an attempt to satisfy the full debt before bringing a personal action        
against the borrower. Finally, other statutory provisions limit any deficiency  
judgment against the former borrower following a judicial sale to the excess    
of the outstanding debt over the fair market value of the property at the time  
of the public sale. The purpose of these statutes is generally to prevent a     
beneficiary or a mortgagee from obtaining a large deficiency judgment against   
the former borrower as a result of low or no bids at the judicial sale.         

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Although the Servicer may elect to pursue deficiency judgments on the       
Mortgage Loans, the Servicer is generally not required under the Pooling        
Agreement to do so, even if permitted by applicable law.                        

For Mortgage Loans Secured by Property in New York. Section 1371 of the New 
York Real Property Actions and Proceedings Law provides that no award of a      
deficiency judgment can be made unless the court has personal jurisdiction      
over the defendant. Moreover, if no motion for a deficiency judgment is made    
within 90 days of the consummation of the sale by the delivery of the deed to   
the purchaser, the proceeds of the foreclosure sale, regardless of the amount,  
are deemed in full satisfaction of the mortgage debt and no right to recover    
any deficiency in any action or proceeding exists. Section 1301 of the same     
law limits the mortgagee's right to bring separate actions for the mortgage     
debt and for foreclosure. While the foreclosure action is pending, or after     
final judgment for the plaintiff therein, no other action may be commenced or   
maintained to recover any part of the mortgage debt without leave of the court  
in which the foreclosure action was brought. A deficiency judgment is limited   
to an amount equal to the judgment amount in the foreclosure action, less (i)   
the fair and reasonable market value of the mortgaged property as of the date   
of the foreclosure sale or such nearest earlier date as there shall have been   
any market value thereof as determined by the court or (ii) the sale price of   
the property at the foreclosure sale, whichever shall be the higher.            

Section 254-b of the New York Real Property Law also places a limitation on 
the mortgagee with respect to late payment charges. Where the mortgage          
contains a provision giving the mortgagee the right to collect a late payment   
charge on any installment that has become due and remains unpaid, such charge   
cannot be more than 2% of the delinquent installment and cannot be imposed on   
any installment paid within 15 days of the due date. In addition, late payment  
charges cannot be deducted from the regular installment payments; they must be  
separately charged and collected by the mortgagee.                              

In New York the mortgagee of a loan on a residential leasehold property can 
foreclose such mortgage by maintaining a traditional equitable foreclosure      
action. Any rent or taxes paid by the mortgagee following default by the        
mortgagor may be added to the unpaid balance of the mortgage debt upon          
foreclosure. A judgment of foreclosure of a leasehold, however, results in a    
public auction only if the mortgage expressly so provides, whereas judgment of  
foreclosure on a real property mortgage would result in a public auction in     
all cases. In the absence of an express provision, in a leasehold mortgage,     
the mortgagee can only recover a money judgment. In this event, the mortgagee   
may follow traditional enforcement procedures. In addition to enforcement of    
judgment remedies, the leasehold interest may then be subject to a post-        
judgment sale pursuant to an execution.                                         

For Mortgage Loans Secured by Property in New Jersey. Under New Jersey law  
(N.J.S.A. 2A:50-1 et seq.) an action for deficiency judgment must be commenced  
within three months from the date of the foreclosure sale of a mortgaged        
premises. In a deficiency action, judgment will be rendered only for the        
balance due on the debt and interest and costs of the action. The obligor       
under the note may file an answer in the action for deficiency, disputing the   
amount of the deficiency sued for. The court will determine the amount of the   
deficiency by deducting from the debt the amount determined as the fair market  
value of the premises.                                                          

For Mortgage Loans Secured by Property in Connecticut. If the mortgagee took
title to the mortgaged property under strict foreclosure but the mortgaged      
property had value lower than the debt, Connecticut law permits the mortgagee   
to move for a deficiency judgment in the amount of the difference within 30     
days after the redemption period has expired. If there was foreclosure by sale  
and the proceeds of sale were insufficient to discharge the mortgage debt in    
full, the mortgagee may obtain a deficiency judgment for the difference. If,    
however, the sales price is less than the value of the mortgaged property as    
found by the court, one half of the difference between such value and the       
sales price must be credited against the deficiency claim of the person who     
sought foreclosure by sale.                                                     

For Mortgage Loans Secured by Property in California. The rule in California
commonly known as the "one-action rule" provides that a lender must include     
all claims in one action and must foreclose its security before seeking to      
impose any personal liability. The anti-deficiency rules limit the recovery of  
personal judgments. If a foreclosure is conducted by way of a nonjudicial       
foreclosure sale, California law prohibits the                                  

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recovery of a deficiency judgment. In addition, a deficiency judgment is        
prohibited even if judicial foreclosure is pursued when a lender finances the   
purchase price of residential real property and the property has four or fewer  
units and is occupied by the purchaser. Because most mortgage loans fall into   
this category, the Issuer intends to pursue nonjudicial foreclosure. While it   
is possible to sue the borrower for any fraud or waste, it generally is not     
practical to do so.                                                             

For Mortgage Loans Secured by Property in Texas. In Texas most foreclosures 
are non-judicial. However, it is necessary to give both notice of intent to     
accelerate as well as notice of acceleration of the installment note unless     
proper waiver language is included in the note. If the real property is used    
as the debtor's residence, the debtor must be given at least 20 days to cure    
the default before the entire debt is due and notice of sale is given. Any      
suit for a deficiency judgment must be brought within two years after the date  
of foreclosure. During the pendency of such suit, the debtor has the right to   
request the court to determine the fair market value of the property            
foreclosed upon. In the event the court determines that the fair market value   
of the property is greater than the bid price paid at foreclosure, the debtor   
is entitled to an offset against the deficiency claim in the amount by which    
the fair market value exceeds the bid price.                                    

For Mortgage Loans Secured by Property in Illinois. In Illinois, if the     
price at the foreclosure sale is less than the total amount adjudicated due in  
the judgment of foreclosure plus costs incurred at the time of judicial sale,   
the mortgagee may obtain deficiency judgment against the mortgagor provided     
that there is personal jurisdiction over the mortgagor.                         

For Mortgage Loans Secured by Property in Florida. Under Florida law, if the
amount bid for the mortgaged property at the foreclosure sale is less than the  
debt, the mortgagee may seek a deficiency judgment, either as part of the       
foreclosure action or in a separate action on the note. The decision whether    
to grant a deficiency judgment sought as part of the foreclosure action lies    
within the sound judicial discretion of the court. No award of a deficiency     
judgment can be made, either as part of or separately from the foreclosure      
action, unless the court has personal jurisdiction over the defendant.          

For Cooperative Loans. Generally, Article 9 of the UCC governs foreclosure  
on cooperative shares and the related proprietary lease or occupancy agreement  
in New York or New Jersey. Some courts have interpreted section 9-504 of the    
UCC to prohibit a deficiency award unless the creditor establishes that the     
sale 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 conducted in a commercially reasonable manner.                   

Section 254-b of the New York Real Property Law relating to late payment    
charges, as discussed above, also applies to a note evidencing a cooperative    
loan.                                                                           

For all Mortgage Loans. In addition to laws limiting or prohibiting         
deficiency judgments, numerous other 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 security. For example, numerous statutory provisions under the United  
States Bankruptcy Code, 11 U.S.C. Sections 101 et seq., (the "Bankruptcy        
Code") may interfere with or affect the ability of the Servicer to obtain       
payment of a Mortgage Loan, to realize upon collateral and/or to enforce a      
deficiency judgment. For example, under federal bankruptcy law, virtually all   
actions (including foreclosure actions and deficiency judgment proceedings)     
are automatically stayed upon the filing of a bankruptcy petition, and often    
no interest or principal payments are made during the course of the bankruptcy  
proceeding. In a case under the Bankruptcy Code, the secured party is           
precluded from foreclosing without authorization from the bankruptcy court. In  
addition, a court with federal bankruptcy jurisdiction may permit a debtor      
through his or her Chapter 11 or Chapter 13 plan to cure a monetary default in  
respect of a Mortgage Loan 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 foreclosure sale had yet occurred)     
prior to the filing of the debtor's petition. Some courts with federal          
bankruptcy jurisdiction have approved plans, based on the                       

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particular facts of the case, that effected the curing of a mortgage loan       
default by paying arrearages over a number of years.                            

If a Mortgage Loan is secured by property not consisting solely of the      
debtor's principal residence, the Bankruptcy Code also permits such Mortgage    
Loan to be modified. Such modifications may include reducing the amount of      
each monthly payment, changing the rate of interest, altering the repayment     
schedule, and reducing the lender's security interest to the value of the       
property, thus leaving the lender in the position of a general unsecured        
creditor for the difference between the value of the property and the           
outstanding balance of the Mortgage Loan. Some courts have permitted such       
modifications when the Mortgage Loan is secured both by the debtor's principal  
residence and by personal property.                                             

If a court relieves a borrower's obligation to repay amounts otherwise due  
on a Mortgage Loan, the Servicer will not be required to advance such amounts,  
and any loss in respect thereof will be borne by the Certificateholders.        

The Code provides priority to certain tax liens over the lien of the        
mortgage or deed of trust. The laws of some states provide priority to certain  
tax liens over the lien of the mortgage or deed of trust. Numerous federal and  
some state consumer protection laws impose substantive requirements upon        
mortgage lenders in connection with the origination, servicing, and             
enforcement of mortgage loans. These laws include the federal Truth in Lending  
Act, Real Estate Settlement Procedures Act, Equal Credit Opportunity Act, Fair  
Credit Billing Act, Fair Debt Collection Practices Act, Fair Credit Reporting   
Act, and related statutes and regulations. These federal laws and state laws    
impose specific statutory liabilities upon lenders who originate or service     
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.               

Enforceability of Certain Provisions, Prepayment Charges and Prepayments      

Unless the Prospectus Supplement indicates otherwise, Mortgage Loans        
representing at least 90% of the aggregate Adjusted Balance of the Mortgage     
Loans in a Fixed Rate Pool will contain due-on-sale clauses. Generally, ARMs    
in an ARM Pool will contain due-on-sale clauses permitting the mortgagee to     
accelerate only in situations where its security may be impaired. These         
clauses permit the lender to accelerate the maturity of the loan if the         
borrower sells, transfers or conveys the property or, in the case of a land     
trust, the beneficial interest therein is transferred. The enforceability of    
these clauses has been impaired in various ways in certain states by statute    
or decisional law. The ability of mortgage lenders and their assignees and      
transferees to enforce due-on-sale clauses was addressed by the Garn-St         
Germain Depository Institutions Act of 1982 (the "Garn-St Germain Act") which   
was enacted on October 15, 1982. This legislation, subject to certain           
exceptions, preempts state constitutional, statutory and case law that          
prohibits the enforcement of due-on-sale clauses. Exempted from this            
preemption are mortgage loans (originated other than by federal savings and     
loan associations and federal savings banks) that were made or assumed during   
the period beginning on the date certain states ("Window Period States"), by    
statute or final appellate court decision having statewide effect, prohibited   
the exercise of due-on-sale clauses and ending on October 15, 1982 ("Window     
Period Loans"). Due-on-sale clauses contained in mortgage loans originated by   
federal savings and loan associations or federal savings banks are fully        
enforceable pursuant to regulations of the Federal Home Loan Bank Board (now    
OTS) which preempt state law restrictions on the enforcement of due-on-sale     
clauses. Mortgage loans originated by such institutions are therefore not       
deemed to be Window Period Loans.                                               

Though neither the Garn-St Germain Act nor the Federal Home Loan Bank Board 
regulations promulgated thereunder actually names the Window Period States,     
FHLMC has taken the position, in prescribing mortgage loan servicing standards  
with respect to mortgage loans which it has purchased, that the Window Period   
States are: Arizona, Arkansas, California, Colorado, Florida, Georgia, Iowa,    
Michigan, Minnesota, New Mexico, Utah and Washington. In regulations issued on  
November 8, 1983, the Comptroller of the Currency indicated that certain        
mortgage loans which were originated by national banks prior to October 15,     
1982 and which were secured by property located in the states listed above      
were Window Period Loans. These regulations limit the applicability of state    
law restrictions on the enforcement of due-on-sale clauses with respect to      
Window Period                                                                   

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Loans originated by national banks. The National Credit Union Administration    
issued final regulations on December 3, 1982, providing that due-on-sale        
clauses contained in Window Period Loans originated by federal credit unions    
are fully enforceable, notwithstanding state law restrictions. Under the Garn-  
St Germain Act, unless a Window Period State took action by October 15, 1985,   
the end of the Window Period, to further regulate enforcement of due-on-sale    
clauses, such clauses would become enforceable even in Window Period Loans.     
Four of the Window Period States (Minnesota, Michigan, New Mexico and Utah)     
have taken actions which restrict the enforceability of due-on-sale clauses in  
Window Period Loans beyond October 15, 1985. The actions taken vary among such  
states. The Garn-St Germain Act also set forth nine specific instances in       
which no mortgage lender covered by the Garn-St Germain Act may exercise a      
due-on-sale clause, notwithstanding the fact that a transfer of the property    
may have occurred. 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 underlying a Series and the  
number of such Mortgage Loans which may be outstanding until maturity. Upon     
foreclosure, courts have imposed general equitable principles. The equitable    
principles are generally designed to relieve the borrower from the legal        
effect of his 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 substituted their judgment for   
the lender's judgment and 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 a lender to foreclose if the default under the mortgage instrument is not    
monetary, such as the borrower's failure to adequately maintain the property    
or the borrower's execution of a second mortgage or deed of trust affecting     
the property. Finally, some courts have been faced with the issue of whether    
federal or state constitutional provisions reflecting due process concerns for  
adequate notice require that borrowers under deeds of trust or mortgages        
receive notices in addition to the statutorily prescribed minimums. 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      
mortgage having a power of sale, does not involve sufficient state action to    
afford constitutional protections to the borrower.                              

All conventional single-family Mortgage Loans originated by Citibank may be 
prepaid in full or in part at any time, without penalty.                        

New Jersey statutes (N.J.S.A. 46:10B-2,3) provide that most New Jersey      
residential mortgage loans may be prepaid in full at any time without penalty,  
and that partial prepayments may be made in an amount not exceeding 33 1/3% of  
the face amount of the mortgage loan in any six-month period without penalty.   

California law regarding prepayment penalties is very complex. Whether a    
lender can enforce a prepayment penalty depends in the first instance upon      
whether the documents give the borrower the right to prepay or the lender the   
right to charge a prepayment penalty. Other considerations are the date the     
loan was originated, the amount of the loan, whether the loan was a fixed-rate  
or a variable-rate loan, the kind of property securing the loan and when the    
borrower wishes to make the prepayment. Federal savings and loan law prohibits  
the imposition of prepayment penalties upon the exercise of a due-on-sale       
clause or the failure to approve an assumption by a qualified transferee and    
the subsequent transfer by the borrower of the property to that transferee and  
prepayment of the loan in full.                                                 

Beginning on January 15, 1991, CFSB's California branches' standard forms   
for 15-year fixed-rate tiered-payment Mortgage Loans provide for a penalty for  
full or partial prepayment of up to six months' interest during the first 12    
months following origination.                                                   

In Illinois, whenever the annual rate of interest exceeds 8% for a loan     
secured by residential real estate, it is unlawful to provide for a prepayment  
penalty.                                                                        

Most conventional single-family mortgage loans originated by the Florida    
branches of CFSB may be prepaid in full or in part without penalty. The         
regulations of the Federal Home Loan Bank Board prohibit the                    

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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 to a   
refinancing lender.                                                             

Under New York law, a prepayment penalty may not be charged on any loan     
secured by a one- to six-family residence occupied by the owner or              
certificates of stock in a cooperative corporation, where the interest rate     
exceeds 6% per annum, if prepayment is made on or after one year from the       
making of the loan.                                                             

Applicability of Usury Laws                                                   

Title V of the Depository Institutions Deregulation and Monetary Control Act
of 1980, enacted in March 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 OTS as successor to the Federal Home Loan Bank Board  
is authorized to issue rules and regulations and to publish interpretations     
governing implementation of Title V. The statute authorized the states to       
reimpose interest rate limits by adopting, before April 1, 1983, a law or       
constitutional provision which expressly rejects an 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 and/or to limit discount points or other       
charges.                                                                        

The Issuer has been advised by counsel that a court interpreting Title V    
would hold that Mortgage Loans related to a Series originated on or after       
January 1, 1980 are subject to federal preemption. Therefore, in a state that   
has not taken the requisite action to reject application of Title V or to       
adopt a provision limiting discount points or other charges prior to            
origination of such Mortgage Loans, any such limitation under such state's      
usury law would not apply to such Mortgage Loans.                               

In any state in which application of Title V has been expressly rejected or 
a provision limiting discount points or other charges is adopted, no Mortgage   
Loans related to a Series originated after the date of such state action will   
be eligible for inclusion in a Pool if such mortgage loans bear interest or     
provide for discount points or charges in excess of permitted levels. No        
mortgage loan related to a Series originated prior to January 1, 1980 will      
bear interest or provide for discount points or charges in excess of permitted  
levels.                                                                         

Adjustable Interest Rate Mortgage Loans                                       

Adjustable interest rate mortgage loans originated by non-federally         
chartered lenders have historically been subject 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 complied 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, state-chartered banks may originate              
"alternative mortgage instruments" (including adjustable rate mortgage loans)   
in accordance with regulations promulgated by the Comptroller of the Currency   
with respect to origination of alternative mortgage instruments by national     
banks; 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 all other non-federally chartered      
housing creditors, including state-chartered savings and loan associations;     
and state-chartered savings banks and mortgage banking companies may originate  
alternative mortgage instruments in accordance with the regulations             
promulgated by the Federal Home Loan Bank Board (now OTS) with respect to       
origination of alternative mortgage instruments by federal savings and loan     
associations. Title VIII 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.                              

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The Issuer has been advised by its counsel that it is their opinion that a  
court interpreting Title VIII would hold that adjustable interest rate          
mortgage loans which were originated by state-chartered lenders before the      
date of enactment of any state law or constitutional provision rejecting        
applicability of Title VIII would not be subject to state laws imposing         
restrictions or prohibitions on the ability of state-chartered lenders to       
originate alternative mortgage instruments.                                     

All of the ARMs which were originated by a state-chartered lender after the 
enactment of a state law or constitutional provision rejecting the              
applicability of Title VIII complied with applicable state law. All of the      
ARMs which were originated by federally chartered lenders or which were         
originated by state-chartered lenders prior to enactment of a state law or      
constitutional provision rejecting the applicability of Title VIII were         
originated in compliance with all applicable federal regulations.               

ENVIRONMENTAL CONSIDERATIONS                                                    

Under the federal Comprehensive Environmental Response Compensation and     
Liability Act, as amended ("CERCLA"), and under state law in certain states, a  
secured party which takes a deed in lieu of foreclosure, purchases a mortgaged  
property at a foreclosure sale or operates a mortgaged property may become      
liable in certain circumstances for the costs of remedial action ("Cleanup      
Costs") if hazardous wastes or hazardous substances have been released or       
disposed of on the property. Such Cleanup Costs may be substantial. Under the   
laws of certain states, failure to perform the remediation required or          
demanded by the state of any condition or circumstance that (i) may pose an     
imminent or substantial endangerment to the public health or welfare or the     
environment, (ii) may result in a release or threatened release of any          
hazardous substances, or (iii) may give rise to any environmental claim or      
demand may give rise to a lien on the property to ensure the reimbursement of   
Cleanup Costs (a "Superlien"). All subsequent liens on such property are        
subordinated to such Superlien and, in some states, even prior recorded liens   
are subordinated to such Superliens. In the latter states, the security         
interest of the Trustee in a property that is subject to such a Superlien       
could be adversely affected.                                                    

The state of the law is currently unclear as to whether and under what      
circumstances Cleanup Costs, or the obligation to take remedial actions, could  
be imposed on a secured lender such as the Trust. Under the laws of some        
states and under CERCLA, a lender may be liable as an "owner or operator" for   
costs of addressing releases or threatened releases of hazardous substances on  
a mortgaged property if such lender or its agents or employees have             
participated in the management of the operations of the borrower, even though   
the environmental damage or threat was caused by a prior owner or current       
owner or operator or other third party. Excluded from CERCLA's definition of    
"owner or operator," however, is a person "who without participating in the     
management of the facility, holds indicia of ownership primarily to protect     
his security interest" (the "secured-creditor exemption"). This exemption for   
holders of a security interest such as a secured lender applies only when the   
lender seeks to protect its security interest in the contaminated facility or   
property. Thus, if a lender's activities begin to encroach on the actual        
management of such facility or property, the lender faces potential liability   
as an "owner or operator" under CERCLA. Similarly, when a lender forecloses     
and takes title to a contaminated facility or property, the lender may incur    
potential CERCLA liability in various circumstances, including among others,    
when it holds the facility or property as an investment (including leasing the  
facility or property to a third party), fails to market the property in a       
timely fashion or fails to properly address environmental conditions at the     
property or facility.                                                           

A decision in May 1990 of the United States Court of Appeals for the        
Eleventh Circuit in United States v. Fleet Factors Corp. very narrowly          
construed CERCLA's secured-creditor exemption. The court's opinion suggests     
that a lender need not have involved itself in the day-to-day operations of     
the facility or participated in decisions relating to hazardous waste to be     
liable under CERCLA; rather, liability could attach to a lender if its          
involvement with the management of the facility is broad enough to support the  
inference that the lender had the capacity to influence the borrower's          
treatment of hazardous waste. The court added that a lender's capacity to       
influence such decisions could be inferred from the extent of its involvement   
in the facility's financial management. A subsequent decision by the United     
States Court of Appeals for the Ninth Circuity in In re                         

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Bergose Metal Corp., apparently disagreeing with, but not expressly             
contradicting, the Fleet Factors court, held that a secured lender had no       
liability absent "some actual management of the facility" on the part of the    
lender. On April 29, 1992, the United States Environmental Protection Agency    
(the "EPA") issued a final rule interpreting and delineating CERCLA's secured-  
creditor exemption and the range of permissible actions that may be undertaken  
by a holder of a contaminated facility without exceeding the bounds of the      
secured-creditor exemption. On February 4, 1994, the United States Court of     
Appeals for the District of Columbia Circuit in Kelley v. EPA invalidated the   
EPA rule. As a result of the Kelley case, the state of the law with respect to  
the secured-creditor exemption remains unclear. In addition, even if the EPA    
rule or a replacement were to be reinstated, the EPA rule or its replacement    
would not necessarily affect the potential for liability in actions by either   
a state or a private party under CERCLA or in actions under other federal or    
state laws which may impose liability on "owners or operators" but do not       
incorporate the secured-creditor exemption. Traditionally, residential          
mortgage lenders have not taken steps to evaluate whether hazardous wastes or   
hazardous substances are present with respect to any mortgaged property prior   
to the origination of the mortgage loan or prior to foreclosure or accepting a  
deed-in-lieu of foreclosure. Accordingly, neither the Issuer nor any            
Originator has made such evaluations prior to the origination of the Mortgage   
Loans nor does the Issuer require that such evaluations be made by originators  
who have sold the Mortgage Loans to it. Neither the Issuer nor the Servicer is  
required to undertake any such evaluations prior to foreclosure or accepting a  
deed-in-lieu of foreclosure. The Issuer does not make any representations or    
warranties or assume any liability with respect to the absence or effect to     
hazardous wastes or hazardous substances on any Mortgaged Property or any       
casualty resulting from the presence or effect of hazardous wastes or           
hazardous substances.                                                           

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                                                                    APPENDIX B

THE AGENCY CERTIFICATES 

This Appendix describes GNMA, FHLMC, FNMA, their respective Mortgage        
Certificates, the underlying mortgage loans and certain related matters.        

GNMA                                                                            

The Government National Mortgage Association ("GNMA") is a wholly-owned     
corporate instrumentality of the United States within the Department of         
Housing and Urban Development. Section 306(g) of Title III of the National      
Housing Act of 1934, as amended (the "Housing Act"), authorizes GNMA to         
guarantee the timely payment of the principal of and interest on certificates   
("GNMA Certificates") that are based on and backed by, and represent an         
interest in, a pool of mortgage loans insured by the Federal Housing            
Administration ("FHA") under the Housing Act ("FHA Loans") or Title V of the    
Housing Act of 1949, or partially guaranteed by the United States Veterans      
Administration ("VA") under the Servicemen's Readjustment Act of 1944, as       
amended, or Chapter 37 of Title 38, United States Code or by pools of other     
eligible mortgage loans.                                                        

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 guaranty under this subsection." In order to      
meet its obligations under such guaranty, GNMA is authorized, under Section     
306(d) of the Housing Act, to borrow from the United States Treasury in an      
amount which is at any time sufficient to enable GNMA, with no limitations as   
to amount, to perform its obligations under its guarantee.                      

GNMA CERTIFICATES                                                               

All of the GNMA Certificates will be "fully modified pass-through" mortgage-
backed certificates issued and serviced by issuers approved by GNMA or by FNMA  
as a seller-servicer of FHA Loans or VA Loans or by both entities. The          
mortgage loans underlying GNMA Certificates may consist of FHA Loans secured    
by mortgages on one-to four-family residential properties or multifamily        
residential properties, mortgage loans partially guaranteed by the VA ("VA      
Loans"), and other mortgage loans eligible for inclusion in mortgage pools      
underlying GNMA Certificates which may be level payment mortgage loans          
(including "buydown" mortgage loans) or graduated payment mortgage loans each   
secured by a first lien on a one-to four-family residential property.           

Except in the case of GNMA Certificates backed by graduated payment mortgage
loans, each GNMA Certificate provides for the payment by or on behalf of the    
issuer of the GNMA Certificate to the registered holder of such GNMA            
Certificate of monthly payments of principal and interest equal to the          
registered holder's proportionate interest in the aggregate amount of the       
monthly scheduled principal and interest payments on each underlying eligible   
mortgage loan, less servicing and guaranty fees aggregating the excess of the   
interest on such eligible mortgage loans over the pass-through rate of such     
GNMA Certificate. In addition, each payment to a GNMA Certificateholder will    
include proportionate pass-through payments to such holder of any prepayments   
of principal of the mortgage loan underlying the GNMA Certificate, and the      
holder's proportionate interest in the remaining principal balance in the       
event of a foreclosure or other disposition of any such mortgage loan.          

GNMA Certificates may be issued under either the GNMA I program ("GNMA I    
Certificates") or the GNMA II program ("GNMA II Certificates"). Although the    
holder of a GNMA Certificate has essentially the same rights with respect to a  
GNMA Certificate issued under either program, a principal difference between    
the two programs is that under the GNMA I program payments will be made         
directly by the issuer of the GNMA I Certificate to the registered holder,      
while under the GNMA II program payments will be made to the registered holder  
through Chemical Bank as paying agent. A further difference between the two     
programs is that under the GNMA I program single issuer approach, an            
individual GNMA issuer assembles a pool of mortgages against which it issues    
and markets GNMA I Certificates, while under the GNMA II program multiple       
issuer pools may be formed through the aggregation of loan packages of more     
than one GNMA issuer. Under this option, packages submitted by various GNMA     
issuers for a particular issue date and interest rate are aggregated into a     
single pool                                                                     

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which backs a single issue of GNMA II Certificates. However, single issuer      
pools may be formed under the GNMA II program as well.                          

If specified in the related Prospectus Supplement, GNMA Certificates        
included in the Pool for a Series of CitiCertificates may be held on deposit    
at the Participants Trust Company ("PTC"), a limited trust company organized    
under the banking laws of the State of New York. PTC operates a private         
sector, industry owned depository and settlement facility for book-entry        
transfer of interests in GMNA Certificates. Distribution of principal of and    
interest on such GNMA Certificate held through PTC will be credited by PTC to   
the PTC participant to whose account the GNMA is credited.                      

All mortgage loans underlying a particular GNMA I Certificate must have the 
same annual interest rate (except for pools of mortgages secured by mobile      
homes). The annual interest rate on each GNMA I Certificate is 50 basis points  
less than the annual interest rate on the mortgage loans included in the pool   
of mortgages backing such GNMA I Certificate.                                   

Mortgages underlying a particular GNMA II Certificate may have annual       
interest rates that vary from each other by up to 100 basis points. The annual  
interest rate on each GNMA II Certificate will be between 50 basis points and   
150 basis points per annum less than the highest annual interest rate on the    
mortgage loans included in the pool of mortgages backing such GNMA II           
Certificate.                                                                    

All of the GNMA Certificates included in the Pool for a Series of           
Certificates will have original maturities of not more than 30 years (but may   
have original maturities of substantially less than 30 years). In general,      
GNMA requires that at least 90% of the original principal amount of the         
mortgage pool underlying a GNMA Certificate must be mortgage loans with         
maturities of 20 years or more. However, in certain circumstances GNMA          
Certificates may be backed by pools of mortgage loans at least 90% of the       
original principal amount of which have original maturities of at least 15      
years.                                                                          

Each mortgage loan underlying a GNMA Certificate, at the time GNMA issues   
its guarantee commitment, must be originated no more than 12 months prior to    
such commitment date.                                                           

The GNMA Certificates do not constitute a liability of, or evidence any     
recourse against, the issuer of the GNMA Certificates, the issuer of a Series   
of CitiCertificates or any affiliates thereof, and the only recourse of a       
registered holder of GNMA Certificates, such as the Trustee, is to enforce the  
guaranty of GNMA.                                                               

GNMA will have approved the issuance of each of the GNMA Certificates       
included in the Pool for a Series of CitiCertificates in accordance with a      
guaranty agreement between GNMA and the servicer of the mortgage loans          
underlying such GNMA Certificate, which is the issuer of the GNMA               
Certificates. Pursuant to such agreement, such issuer is required to advance    
its own funds in order to make timely payments of all amounts due on the GNMA   
Certificate, even if the payments received by such issuer on the mortgage       
loans backing the GNMA Certificate are less than the amounts due on such GNMA   
Certificate. If such issuer is unable to make payments on a GNMA Certificate    
as it becomes due, it must promptly notify GNMA and request GNMA to make such   
payment. Upon such notification and request, GNMA will make such payments       
directly to the registered holder of the GNMA Certificate. In the event no      
payment is made by such issuer and such issuer fails to notify and request      
GNMA to make such payment, the registered holder of the GNMA Certificate has    
recourse only against GNMA to obtain such payment. The Trustee or its nominee,  
as registered holder of the GNMA Certificates included in the Pool for a        
Series of CitiCertificates, is entitled to proceed directly against GNMA under  
the terms of the guaranty agreement or contract relating to such GNMA           
Certificates for any amounts that are not paid when due under each GNMA         
Certificate.                                                                    

The GNMA Certificates included in the Pool for a Series of CitiCertificates 
may have other characteristics and terms, different from those described        
above, so long as such GNMA Certificates and underlying mortgage loans meet     
the criteria of the rating agency or agencies rating the CitiCertificates of    
such Series. Such GNMA Certificates and underlying mortgage loans will be       
described in the related Prospectus Supplement.                                 

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FHLMC                                                                           

The Federal Home Loan Mortgage Corporation ("FHLMC") is a corporate         
instrumentality of the United States created pursuant to Title III of the       
Emergency Home Finance Act of 1970, as amended (the "FHLMC Act"). FHLMC's       
common stock is owned by the Federal Home Loan Banks. FHLMC was established     
primarily for the purpose of increasing the availability of mortgage credit     
for the financing of urgently needed housing. It seeks to provide an enhanced   
degree of liquidity for residential mortgage investments primarily by           
assisting in the development of secondary markets for conventional mortgages.   
The principal activity of FHLMC currently consists of the purchase of first     
lien conventional residential mortgage loans or participation interests in      
such mortgage loans and the resale of the mortgage loans so purchased in the    
form of mortgage securities. All mortgage loans purchased by FHLMC must meet    
certain standards set forth in the FHLMC Act. FHLMC is confined to purchasing,  
so far as practicable, conventional mortgage loans and participation interests  
therein which it deems to be of such quality, type and class that generally     
meet the purchase standards imposed by private institutional mortgage           
investors.                                                                      

FHLMC CERTIFICATES                                                              

Each FHLMC Certificate represents an undivided interest in a group of       
mortgages ("FHLMC Certificate Group").                                          

Mortgage loans underlying the FHLMC Certificates included in the Pool for a 
Series of CitiCertificates will consist of fixed rate mortgage loans with       
original terms to maturity of between 10 and 30 years. Each such mortgage loan  
must meet the applicable standards set forth in the FHLMC Act. A FHLMC          
Certificate Group may include whole loans, participation interests in whole     
loans and undivided interests in whole loans and/or participations comprising   
another FHLMC Certificate Group.                                                

With respect to certain FHLMC Certificates ("Original PCs"), the period     
between the first day of the month in which the Certificate is issued and the   
initial payment date in respect of the Certificate is approximately 75 days.    
With respect to other FHLMC Certificates ("Gold PCs"), the period between the   
first day of the month in which the Certificate is issued and the initial       
payment date in respect of the Certificate is approximately 45 days. In         
addition to the shorter payment delay, Gold PCs differ from Original PCs in     
that the record date for payments of principal and interest on a Gold PC is     
the last day of the month immediately preceding the month in which the related  
payment date occurs, whereas the record date for payments of principal and      
interest on an Original PC is the last day of the second month preceding the    
month in which the payment date occurs.                                         

FHLMC guarantees to each registered holder of a FHLMC Certificate the timely
payment of interest at the rate provided for by such FHLMC Certificate on the   
registered holder's pro rata share of the unpaid principal balance outstanding  
on the related mortgage loans, whether or not received. FHLMC also guarantees   
to each registered holder of a FHLMC Certificate the ultimate collection by     
such holder of all principal on the related mortgage loans, without any offset  
or deduction, to the extent of such holder's pro rata share thereof, but does   
not, except with respect to Gold PCs or if and to the extent specified in the   
Prospectus Supplement relating to a Series of CitiCertificates secured by       
Original PCs, guarantee the timely payment of scheduled principal. Pursuant to  
its guarantees, FHLMC indemnifies holders of FHLMC Certificates against any     
diminution in principal by reason of charges for property repairs, maintenance  
and foreclosure. FHLMC may remit the amount due on account of its guarantee of  
collection of principal at any time after default on an underlying mortgage     
loan, but not later than (i) 30 days following foreclosure sale, (ii) 30 days   
following payment of the claim by any mortgage insurer, or (iii) 30 days        
following the expiration of any right of redemption, whichever occurs later,    
but in any event no later than one year after demand has been made upon the     
mortgagor for accelerated payment of principal. In taking actions regarding     
the collection of principal after default on the mortgage loans underlying      
FHLMC Certificates, including the timing of demand for acceleration, FHLMC      
reserves the right to exercise its servicing judgment with respect to the       
mortgages in the same manner as for mortgages which it has purchased but not    
sold.                                                                           

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FHLMC Certificates are not guaranteed by the United States or by any Federal
Home Loan Bank and do not constitute debts or obligations of the United States  
or any Federal Home Loan Bank. The obligations of FHLMC under its guarantee     
are obligations solely of FHLMC and are not backed by, nor entitled to, the     
full faith and credit of the United States.                                     

Registered holders of FHLMC Certificates are entitled to receive their      
monthly pro rata share of all principal payments on the underlying mortgage     
loans received by FHLMC, including any scheduled principal payments, full and   
partial payments of principal, and principal received by FHLMC by virtue of     
condemnation, insurance or foreclosure, and repurchases of the mortgages by     
FHLMC or the sellers of the mortgages. FHLMC is required to remit to each       
registered FHLMC Certificateholder its pro rata share of principal payments on  
the underlying mortgage loans, interest at the FHLMC Certificate rate and any   
other sums (such as prepayment fees), within 60 days of the date on which such  
payments are deemed to have been received by FHLMC.                             

Under FHLMC's Cash Program, prior to June 1987 there was no limitation on   
the amount by which interest rates on the mortgage loans underlying a FHLMC     
Certificate may exceed the interest rate on the FHLMC Certificate. Under such   
program, FHLMC purchases groups of whole mortgage loans from sellers at         
specified percentages of their unpaid principal balances, adjusted for accrued  
or prepaid interest, which, when applied to the interest rate of the mortgage   
loans purchased, results in the yield (expressed as a percentage) required by   
FHLMC. The required yield, which includes a minimum servicing fee retained by   
the servicer, is calculated using the outstanding principal balance of the      
mortgage loans, an assumed term and a prepayment period as determined by        
FHLMC. No loan is purchased by FHLMC at greater than 100% of the outstanding    
principal balance. The range of interest rates on the mortgage loans in a       
FHLMC Certificate Group under the Cash Program formed prior to June 1987 will   
vary since mortgage loans are purchased and assigned to a FHLMC Certificate     
Group based upon their yield to FHLMC rather than on the interest rate on the   
mortgage loans. Since June 1987, the range of interest rates on the mortgage    
loans and participations in a FHLMC Certificate Group comprised of 15-and 30-   
year fixed-rate single family mortgage loans bought by FHLMC under the Cash     
Program is restricted to one percentage point. Moreover, the lowest coupon on   
any mortgage loan in the FHLMC Certificate Group is greater than or equal to    
the annual pass-through rate on the related FHLMC Certificate, and the highest  
mortgage interest rate is not more than two percentage points above such pass-  
through rate. Under FHLMC's Guarantor Program, the annual pass-through rate on  
a FHLMC Certificate is established based upon the lowest interest rate on the   
underlying mortgage loans, minus a minimum servicing fee and the amount of      
FHLMC's management and guarantee income as agreed upon between the seller and   
FHLMC. For certain FHLMC Certificate Groups formed under the Guarantor Program  
prior to December 1987, the range between the lowest and highest annual         
interest rates on the mortgage loans in a FHLMC Certificate Group may not       
exceed two percentage points; beginning in December 1987, such range may not    
exceed one percentage point.                                                    

FHLMC Certificates duly presented for registration of transfer on or before 
the last business day of a month are registered effective as of the first day   
of that month. The first remittance check to a registered holder of a FHLMC     
Certificate will be mailed so as to be received normally by the 15th day of     
the second month following the month in which the purchaser became a            
registered holder of the FHLMC Certificate. Thereafter checks will be mailed    
monthly to the registered holder so as to be received normally by the 15th day  
of each month. The Federal Reserve Bank of New York maintains book-entry        
accounts with respect to FHLMC Certificates sold by FHLMC on or after January   
2, 1985, and makes payments of interest and principal each month to the         
registered holders thereof in accordance with such holders' instructions.       

See "Additional Information" in the body of the Prospectus for the          
availability of further information respecting FHLMC and FHLMC Certificates.    

The FHLMC Certificates included in the Pool for a Series of CitiCertificates
may have other characteristics and terms, different from those described        
above, so long as such FHLMC Certificates and underlying mortgage loans meet    
the criteria of the rating agency or agencies rating the CitiCertificates of    
such Series. Such FHLMC Certificates and underlying mortgage loans will be      
described in the related Prospectus Supplement.                                 

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FNMA                                                                            

FNMA is a federally chartered and privately owned corporation organized and 
existing under the Federal National Mortgage Association Charter Act, as        
amended (the "Charter Act"). FNMA 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.                             

FNMA provides funds to the mortgage market primarily by purchasing home     
mortgage loans from lenders, thereby replenishing their funds for additional    
lending. FNMA acquires funds to purchase loans from many capital market         
investors that may not ordinarily invest in mortgage loans, thereby expanding   
the total amount of funds available for housing and, by operating nationwide,   
FNMA helps to redistribute mortgage funds from capital-surplus to capital-      
short areas. In addition, FNMA issues mortgage-backed securities primarily in   
exchange for pools of mortgage loans from lenders.                              

Although the Secretary of the Treasury of the United States has             
discretionary authority to advance funds to FNMA, neither the United States     
government nor any agency or instrumentality thereof is obligated to assume     
FNMA's obligations or assist FNMA in any manner.                                

FNMA CERTIFICATES                                                               

FNMA Certificates represent fractional undivided interests in a pool of     
mortgage loans formed by FNMA. Each mortgage loan must meet the applicable      
standards of the FNMA purchase program. Mortgage loans comprising a pool are    
either provided by FNMA from its own portfolio or purchased pursuant to the     
criteria of the FNMA purchase program.                                          

Mortgage loans underlying FNMA Certificates included in the Pool for a      
Series of CitiCertificates will consist of conventional mortgage loans, FHA     
Loans or VA Loans. The original maturities of substantially all of the          
conventional, level payment mortgage loans underlying a FNMA Certificate are    
expected to be between either 8 and 15 years or 20 and 30 years. The original   
maturities of substantially all of the level payment FHA Loans or VA Loans are  
expected to be 30 years.                                                        

Mortgage loans underlying a FNMA Certificate may have annual interest rates 
that vary by as much as two percentage points from each other. The rate of      
interest payable on a FNMA Certificate is equal to the lowest interest rate of  
any mortgage loan in the related pool, less a specified minimum annual          
percentage representing servicing compensation and FNMA's guaranty fee. Under   
a regular servicing option (pursuant to which the mortgagee or other servicer   
assumes the entire risk of foreclosure losses), the annual interest rates on    
the mortgage loan underlying a FNMA Certificate will be between 50 basis        
points and 250 basis points greater than the annual interest rate for the FNMA  
Certificates; and under a special servicing option (pursuant to which FNMA      
assumes the entire risk for foreclosure losses), the annual interest rates on   
the mortgage loans underlying a FNMA Certificate will generally be between 55   
basis points and 255 basis points greater than the annual FNMA Certificate      
interest rate.                                                                  

FNMA guarantees to each registered holder of a FNMA Certificate that it will
distribute amounts representing scheduled principal and interest (at the rate   
provided for by such FNMA Certificate) on the mortgage loans in the pool        
represented by such FNMA Certificate, whether or not received, and the full     
principal amount of any foreclosed or other finally liquidated mortgage loan,   
whether or not such principal amount is actually recovered. The obligations of  
FNMA under its guarantees are obligations solely of FNMA and are not backed     
by, nor entitled to, the full faith and credit of the United States. Although   
the Secretary of the Treasury of the United States has discretionary authority  
to lend FNMA up to $2.25 billion outstanding at any time, neither the United    
States nor any agency thereof is obligated to finance FNMA's operations or to   
assist FNMA in any other manner. If FNMA were unable to satisfy its             
obligations, distributions to holders of FNMA Certificates would consist        
solely of payments and other recoveries on the underlying mortgage loans and,   
accordingly, monthly distributions to holders of FNMA Certificates would be     
affected by delinquent payments and defaults on such mortgage loans.            

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Unless otherwise specified in the Prospectus Supplement relating to a Series
of CitiCertificates, FNMA Certificates evidencing interests in pools of         
mortgage loans formed on or after May 1, 1985 are available in book-entry form  
only and will not be convertible to definitive form. Distributions of           
principal and interest on each FNMA Certificate will be made by FNMA on the     
25th day of each month to the persons in whose name the FNMA Certificate is     
entered on the books of the Federal Reserve Bank (or registered in the FNMA     
Certificate register in the case of fully registered FNMA Certificates) as of   
the close of business on the last day of the preceding month. With respect to   
FNMA Certificates issued in book-entry form, distributions thereon will be      
made by wire, and with respect to fully registered FNMA Certificates,           
distributions thereon will be made by check.                                    

See "Additional Information" in the body of the Prospectus for the          
availability of further information respecting FNMA and FNMA Certificates.      

The FNMA Certificates included in the Pool for a Series of CitiCertificates 
may have other characteristics and terms, different from those described        
above, so long as such FNMA Certificates and underlying mortgage loans meet     
the criteria of the rating agency or agencies rating the CitiCertificates of    
such Series. Such FNMA Certificates and underlying mortgage loans will be       
described in the related Prospectus Supplement.                                 

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INDEX OF PRINCIPAL DEFINITIONS

                                                                [Download Table]

TERM                                                                        PAGE
----                                                                        ----
                                                                                
Accrual CitiCertificates...................................................    1
Acquisition Premium........................................................   48
Adjusted Balance...........................................................  A-3
Affiliated Mortgage Loans..................................................   14
Affiliated Originators.....................................................    1
Alternative Certificate Account............................................ A-12
Amount Available...........................................................   11
ARM Pool...................................................................  A-1
ARMs.......................................................................  A-6
BIF........................................................................   21
Buydown Mortgage Loans.....................................................   16
Certificate Account........................................................    1
Certificate Account Advance................................................ A-14
Certificate Distribution Amount............................................    7
Certificateholders.........................................................    2
Certificates...............................................................    1
CFSB.......................................................................    1
CFSB Pool..................................................................  A-1
Charter Act................................................................  B-5
Citibank...................................................................    1
Citibank Pool..............................................................  A-1
CitiCertificates...........................................................    1
Citicorp...................................................................   34
CitiMae....................................................................    1
CitiMae Mortgage Loans.....................................................   14
CitiMae Originators........................................................    1
CitiMae Pool...............................................................  A-1
CitiMortgageCertificates...................................................    1
Class......................................................................    1
Cleanup Costs.............................................................. A-33
CMI........................................................................    1
CMI Pool...................................................................  A-1
CMSI Pool..................................................................  A-1
Code.......................................................................    1
Commission.................................................................    2
Consolidation Agreements...................................................  A-2
Converted Mortgage Loan....................................................  A-6
Cooperative Loans..........................................................  A-1
Cooperative Notes..........................................................  A-1
Cooperatives...............................................................  A-1
Credit Support Percentage..................................................   11
Cut-Off Date...............................................................  A-9
Deferred Interest..........................................................   49
Depository................................................................. A-11
Detailed Information.......................................................    2
Determination Date.........................................................    5
Disqualified Organization..................................................   56
Distribution Date..........................................................    5
DTC........................................................................    5

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                                                                [Download Table]

TERM                                                                        PAGE
----                                                                        ----
                                                                                
Due Period.................................................................    9
Eligible Investments.......................................................   21
Enhancement Act............................................................   42
EPA........................................................................ A-34
ERISA......................................................................   40
Events of Default..........................................................   36
Exchange Act...............................................................    2
FDIC.......................................................................   21
FHA........................................................................  B-1
FHA Loans..................................................................  B-1
FHLMC......................................................................   20
FHLMC Act..................................................................  B-3
FHLMC Certificate Group....................................................  B-3
FHLMC Certificates.........................................................   20
Fixed Rate Pool............................................................  A-1
FNMA.......................................................................   20
FNMA Certificates..........................................................   20
Foreign Investors..........................................................   57
Form of Pooling Agreement..................................................    3
Garn-St Germain Act........................................................ A-30
GNMA.......................................................................   20
GNMA Certificates..........................................................   20
GNMA I Certificates........................................................  B-1
GNMA II Certificates.......................................................  B-1
Gold PCS...................................................................  B-3
GPMs.......................................................................  A-5
Guaranty...................................................................    1
Housing Act................................................................  B-1
Index......................................................................  A-7
Interest Accrual Period....................................................    6
IRA........................................................................   40
Issuer.....................................................................    1
Issuer Certificates........................................................    1
Last Scheduled Distribution Date...........................................   13
Leasehold Loans............................................................   20
Letter of Credit...........................................................   10
Limited Guaranty...........................................................   10
Liquidating Loan...........................................................   12
Loss Allocation Event......................................................    8
Market Discount............................................................   50
Master Servicing Fee.......................................................  A-4
Maximum Note Rate..........................................................  A-6
Minimum Note Rate..........................................................  A-6
Minimum Prepayment Agreement...............................................   21
Minimum Reinvestment Agreement.............................................   22
Modification Agreements....................................................  A-2
Moody's.................................................................... A-12
Mortgage Certificates......................................................    2
Mortgage Loans.............................................................    1
Mortgage Margin............................................................  A-6
Mortgaged Properties.......................................................  A-1

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                                                                [Download Table]

TERM                                                                        PAGE
----                                                                        ----
                                                                                
Mortgagor..................................................................  A-2
Mortgagor Bankruptcy Bond..................................................   11
NCUA.......................................................................   42
1986 Act...................................................................   46
Non-Conforming Loans.......................................................   17
Noneconomic Residual Interests.............................................   57
Non-U.S. Person............................................................   61
Note Rate..................................................................  A-4
Notice Date................................................................ A-15
NYBU.......................................................................   24
OID Regulations............................................................   46
Original Issue Discount....................................................   50
Original PCS...............................................................  B-3
Original Value.............................................................   26
Originators................................................................    1
OTS........................................................................   35
Pass-Through Entity........................................................   56
Pass-Through Rate..........................................................  A-4
Payment Period............................................................. A-14
Periodic Ceiling...........................................................  A-6
Periodic Floor.............................................................  A-5
Plans......................................................................   40
Policy Statement...........................................................   42
Pool.......................................................................    1
Pool Distribution Amount...................................................    6
Pool Insurance Policies....................................................   11
Pool Value.................................................................    7
Pool Value Group...........................................................    7
Pooling Agreement..........................................................    3
Premium....................................................................   50
Prepayment Assumption......................................................   47
Primary Mortgage Insurance Policy.......................................... A-19
Principal Prepayment.......................................................    6
Proposed Mark to Market Regulations........................................   59
Prospectus Supplement......................................................  A-3
PTC........................................................................  B-2
PTE 83-l...................................................................   40
Purchase Amount Advance....................................................   12
Rating Requirements........................................................ A-12
Real Estate Loans..........................................................  A-1
Record Date................................................................    5
Registration Statement.....................................................    3
Regulations................................................................   40
REMIC......................................................................    1
REMIC Regulations..........................................................   43
REMIC Servicing Fee........................................................   15
Reserve Fund...............................................................   11
Residual Certificates......................................................    1
Residual Holders...........................................................   52
Retail Class CitiCertificate...............................................   46

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                                                                [Download Table]

TERM                                                                        PAGE
----                                                                        ----
                                                                                
SAIF.......................................................................   21
SBJPA of 1996..............................................................   44
Scheduled Principal........................................................ A-13
Securities Act.............................................................    5
Senior Certificates........................................................    1
Senior/Subordinated Series.................................................    1
Series.....................................................................    1
Servicer...................................................................   14
Servicing Account.......................................................... A-16
Servicing Compensation.....................................................   15
Servicing Fee..............................................................   15
SFAS.......................................................................   63
Similar Law................................................................   41
Single Certificate.........................................................    5
Special Distributions......................................................    9
Special Hazard Insurance Policies..........................................   11
Spread.....................................................................    8
S&P........................................................................ A-11
Startup Day................................................................   22
Stated Amount..............................................................    7
Stated Rate................................................................    6
Subclass...................................................................    1
Subordinated Certificates..................................................    1
Subordination Amount.......................................................   10
Subordination Reserve Fund.................................................   10
Subservicer................................................................   25
Superlien.................................................................. A-33
Third Party Loans..........................................................   14
Third Party Originators....................................................    1
Third Party Pool...........................................................  A-1
Title V.................................................................... A-32
Title VIII................................................................. A-32
Transfer Instrument........................................................   18
Trust......................................................................    1
Trustee....................................................................    3
UCC........................................................................ A-27
Underlying Trustee.........................................................   19
U.S. Person................................................................   58
VA.........................................................................   23
VA Loans...................................................................  B-1
Variable Rate CitiCertificates.............................................   48
Voluntary Advances......................................................... A-13
Whole or Partial Pool Issuer Certificates..................................   19
Window Period Loans........................................................ A-30
Window Period States....................................................... A-30

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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRE- 
SENTATIONS OTHER THAN THOSE CONTAINED IN THE PROSPECTUS OR THIS PROSPECTUS      
SUPPLEMENT AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT  
BE RELIED UPON. NEITHER THE PROSPECTUS NOR THIS PROSPECTUS SUPPLEMENT CONSTI-   
TUTES AN OFFER TO SELL OR A SOLICITATION OF ANY OFFER TO BUY ANY SECURITIES     
OTHER THAN THE OFFERED CITICERTIFICATES DESCRIBED IN THIS PROSPECTUS SUPPLE-    
MENT OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY THE OFFERED     
CITICERTIFICATES TO ANY PERSON IN ANY STATE OR OTHER JURISDICTION IN WHICH      
SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL. NEITHER THE DELIVERY OF THE PRO-  
SPECTUS NOR THIS PROSPECTUS SUPPLEMENT NOR ANY SALE MADE THEREUNDER OR HEREUN-  
DER AT ANY TIME IMPLIES THAT INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUB-  
SEQUENT TO THE DATE HEREOF OR THEREOF.                                          

----------- 

TABLE OF CONTENTS 
PROSPECTUS SUPPLEMENT 

                                                                [Download Table]

                                                                           PAGE
                                                                           ----
                                                                               
Summary of Prospectus and Prospectus Supplement...........................     
Description of the Pool and the Mortgaged Properties......................     
Risk Factors for Purchasers of Offered Class B CitiCertificates and Class      
 A-6 CitiCertificates.....................................................     
Description of the Offered CitiCertificates...............................     
ERISA Considerations......................................................     
Legal Investment..........................................................     
Plan of Distribution......................................................     
Legal Matters.............................................................     
Incorporation of Certain Documents by Reference...........................     
Index of Principal Definitions in Prospectus Supplement...................     

                                  PROSPECTUS                                   

Reports to Certificateholders.............................................   2 
Additional Information....................................................   2 
Available Information.....................................................   2 
Additional Detailed Information...........................................   2 
Incorporation of Certain Documents by Reference...........................   3 
Description of Certificates...............................................   4 
The Pools.................................................................  15 
Citicorp Mortgage Securities, Inc. .......................................  23 
The Originators...........................................................  23 
Loan Underwriting Policies................................................  25 
Delinquency, Foreclosure and Loss Considerations                               
 and Experience...........................................................  30 
Citicorp..................................................................  34 
Use of Proceeds...........................................................  34 
The Pooling Agreements....................................................  34 
ERISA Considerations......................................................  40 
Legal Investment..........................................................  42 
Certain Federal Income Tax Consequences...................................  43 
Plans of Distribution.....................................................  62 
Experts...................................................................  63 
Appendix A: The Mortgage Loans and CitiMortgageCertificates                    
Appendix B:The Agency Certificates                                             
Index of Principal Definitions                                                 

------------------------------------------------------------------------------- 
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$[    ] 
(APPROXIMATE) 

CITICORP MORTGAGE 
SECURITIES, INC.  
(PACKAGER AND SERVICER) 

REMIC PASS-THROUGH CERTIFICATES SERIES 1996-1 

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

PROSPECTUS SUPPLEMENT 

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

DONALDSON, LUFKIN & JENRETTE  
SECURITIES CORPORATION                                    

Dated November   , 1996 

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

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
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