Bank of America Mortgage Securities Inc – ‘POS AM’ on 2/12/98

As of:  Thursday, 2/12/98   ·   Accession #:  950149-98-182   ·   File #:  333-34225

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Post-Effective Amendment
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: POS AM      Post-Effective Amendment No. 1 to Form S-3           161    890K 
 2: EX-24.2     Powers of Attorney                                     5     13K 

POS AM   —   Post-Effective Amendment No. 1 to Form S-3
Document Table of Contents

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 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 12, 1998

                                                      REGISTRATION NO. 333-34225
================================================================================

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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

POST-EFFECTIVE

AMENDMENT NO. 1 

TO

FORM S-3
REGISTRATION STATEMENT
UNDER 
THE SECURITIES ACT OF 1933

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

BA MORTGAGE SECURITIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

                                                                [Download Table]
                                                                    
            DELAWARE                          94-324470             
(STATE OR OTHER JURISDICTION OF            (I.R.S. EMPLOYER         
 INCORPORATION OR ORGANIZATION)          IDENTIFICATION NO.)        

     345 MONTGOMERY STREET            CHERYL SOROKIN, SECRETARY     
   LOWER LEVEL #2, UNIT #8152           BANK OF AMERICA CENTER      
SAN FRANCISCO, CALIFORNIA 94104         555 CALIFORNIA STREET       
         (415) 622-3676            SAN FRANCISCO, CALIFORNIA 94104  
 (ADDRESS AND TELEPHONE NUMBER              (415) 622-3530          
OF PRINCIPAL EXECUTIVE OFFICES)  (NAME, ADDRESS AND TELEPHONE NUMBER
                                        OF AGENT FOR SERVICE)       

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

Copies to:

                                                        [Enlarge/Download Table]
                                                                                              
     ANDREA B. GOLDENBERG              DANIEL G. WEISS                 RALPH C. WALKER        
   BANKAMERICA CORPORATION         BANKAMERICA CORPORATION              MARK R. LEVIE         
   555 SOUTH FLOWER STREET          555 CALIFORNIA STREET       ORRICK, HERRINGTON & SUTCLIFFE
    8TH FLOOR, UNIT #4362                UNIT #03017                  400 SANSOME STREET      
LOS ANGELES, CALIFORNIA 90071  SAN FRANCISCO, CALIFORNIA 94104     SAN FRANCISCO, CA 94111    
        (213) 228-5678                  (415) 622-9688                  (415) 773-5955        

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

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after the effective date of this Registration Statement.
================================================================================

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PROSPECTUS SUPPLEMENT                                                           

(TO PROSPECTUS DATED           , 19  )                                          

$                      (APPROXIMATE)

BA MORTGAGE SECURITIES, INC.
DEPOSITOR 

BANK OF AMERICA, FSB

MASTER SERVICER 

MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 19   -   

[$           % CLASS A-1 CERTIFICATES 
$           % CLASS A-2 CERTIFICATES
$           % CLASS A-3 CERTIFICATES
$           % CLASS A-4 CERTIFICATES
$           VARIABLE RATE CLASS A-5 CERTIFICATES
$           % CLASS M CERTIFICATES
$           % CLASS R CERTIFICATES

   The Series 19  -  Mortgage Pass-Through Certificates (the "Certificates")
will consist of the following Classes: (i) the Class A-1 Certificates, Class A-2
Certificates, Class A-3 Certificates, (ii) Class A-4 Certificates (the "Fixed   
Strip Certificates"), (iii) Class A-5 Certificates (the "Variable Strip         
Certificates"; together with the Class A-1 Certificates, Class A-2 Certificates,
Class A-3 Certificates and Fixed Strip Certificates, the "Senior Certificates"),
(iv) Class R Certificates (the "Residual Certificates") and (v) [  ] Classes of 
subordinate Certificates which are designated as the Class M Certificates and   
the Class B Certificates (together, the "Subordinate Certificates"). [Only the  
Senior Certificates, the Class M Certificates and the Residual Certificates     
(collectively, the "Offered Certificates") are offered hereby.] [Only the Senior
Certificates and the Class M Certificates (collectively, the "Offered           
Certificates") are offered hereby.]                                             

   SEE "RISK FACTORS" ON [PAGE S-18 HEREIN AND ON] PAGE 10 IN THE PROSPECTUS
FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED BEFORE PURCHASING 
[ANY CLASS OF OFFERED] CERTIFICATES.                                            

PROCEEDS FROM THE ASSETS IN THE RELATED TRUST FUND WILL BE THE ONLY SOURCE OF   
PAYMENTS ON THE CERTIFICATES OF EACH SERIES. THE CERTIFICATES DO NOT REPRESENT  
AN OBLIGATION OF OR INTEREST IN THE DEPOSITOR, BANKAMERICA CORPORATION, BANK OF 
AMERICA, FSB OR ANY OF THEIR AFFILIATES. NEITHER THE CERTIFICATES NOR THE       
UNDERLYING MORTGAGE LOANS OR OTHER ASSETS OF A TRUST FUND ARE INSURED OR        
GUARANTEED BY ANY GOVERNMENTAL AGENCY.                                          

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 SUPPLEMENT OR THE PROSPECTUS. ANY 
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. 

[This Prospectus Supplement and the related Prospectus may be used by 
BancAmerica Robertson Stephens, an affiliate of the Depositor and the Master    
Servicer, in connection with offers and sales related to secondary market       
transactions in the [Offered] Certificates. BancAmerica Robertson Stephens may  
act as principal or agent in such transactions. Such sales will be made at      
prices related to prevailing market prices at the time of sale or otherwise.]   

The [Offered] Certificates will be purchased from the Depositor by the
Underwriter[s] and will be offered by the Underwriter[s] from time to time to   
the public in negotiated transactions or otherwise at varying prices to be      
determined at the time of sale. The proceeds to the Depositor from the sale of  
the [Offered] Certificates will be equal to      % of the initial aggregate     
principal balance of the [Offered] Certificates, plus accrued interest thereon  
from               1, 19  (the "Cut-off Date"), net of any expenses payable by  
the Depositor. The [Offered] Certificates are offered by the Underwriter[s]     
subject to prior sale, when, as and if delivered to and accepted by the         
Underwriter[s] and subject to certain other conditions. The Underwriter[s]      
reserve[s] the right to withdraw, cancel or modify such offer and to reject any 
order in whole or in part. It is expected that delivery of the Certificates will
be made on or about               , 19  at the office of             , [city and
state of offices where delivery is to be made] against payment therefor in      
immediately available funds.                                                    
                                                  (Cover continued on next page)

[Name of Underwriters]

The date of this Prospectus Supplement is               , 19  . 

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(cover page continued)                                                          

    The Certificates will evidence the entire beneficial ownership interest in
a trust fund (the "Trust Fund") consisting primarily of a pool of conventional  
[fixed] [adjustable] rate one- to four-family first mortgage loans (the         
"Mortgage Loans")[, exclusive of the Retained Yield (as defined herein under    
"POOLING AGREEMENT -- Servicing And Other Compensation and Payment of Expenses; 
Retained Yield"),] to be deposited by BA Mortgage Securities, Inc. (the         
"Depositor") into the Trust Fund for the benefit of the Certificateholders. The 
Mortgage Loans were [originated] [acquired from                ] by             
           (the "Seller"). The Depositor will acquire the Mortgage Loans
from the Seller on the Delivery Date. The Mortgage Loans will be serviced by    
Bank of America, FSB (the "Master Servicer"). [The Senior Certificates in the   
aggregate and the Class M Certificates will evidence initial undivided interests
of approximately   % and   %, respectively, in the Trust Fund.] Certain         
characteristics of the Mortgage Loans are described herein under "DESCRIPTION OF
THE MORTGAGE POOL."                                                             

     [A limited amount of losses on the Mortgage Loans will initially be covered
by [description of credit enhancement] (the "[name of credit enhancement]") to  
be issued by                (the "               "). The maximum amount         
available to be drawn under the [name of credit enhancement] will initially be  
equal to approximately   % of the aggregate principal balance of the Mortgage   
Loans as of           , 19  (the "Cut-off Date") and will be subject to         
reduction as claims are made thereunder. As described herein under "DESCRIPTION 
OF CREDIT ENHANCEMENT," the Master Servicer is required to use its best         
reasonable efforts to maintain the [name of credit enhancement] during the term 
of the Pooling Agreement (as defined herein under "POOLING AGREEMENT"), unless  
coverage under the [name of credit enhancement] has been exhausted through the  
payment of claims.]                                                             

  [The interest rates on the Mortgage Loans (each, a "Mortgage Rate") will
change [semi-]annually based on the Index (as defined herein under "DESCRIPTION 
OF THE MORTGAGE POOL -- General") and the respective Note Margins described     
herein under "DESCRIPTION OF THE MORTGAGE POOL," subject to certain periodic and
lifetime limitations, as described more fully herein under "DESCRIPTION OF THE  
MORTGAGE POOL."]                                                                

   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 PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES  
EFFECTIVE. THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS TO WHICH IT RELATES    
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.                                    

   Distributions on the Certificates will be made on the   day of each month
or, if such day is not a business day, then on the next succeeding business day 
commencing on           , 19  (each, a "Distribution Date"). [As more fully     
described herein under "DESCRIPTION OF THE CERTIFICATES -- Interest             
Distributions" interest distributions on the Certificates will be based on the  
principal balance of the Mortgage Loans and the then applicable Weighted Average
Adjustable Pass-Through Rate, which will equal the weighted average of the      
Mortgage Rates on the Mortgage Loans, net of the related servicing [and         
subservicing] fees [and Retained Yield] (as to each Mortgage Loan, the "Net     
Mortgage Rate"), for the month preceding such Distribution Date. The initial    
Weighted Average Adjustable Pass-Through Rate for the Certificates will be   %  
per annum. The Weighted Average Adjustable Pass-Through Rate on the Certificates
may increase or decrease from month to month. Distributions in respect of       
principal of the Certificates will be made as described herein under            
"DESCRIPTION OF THE CERTIFICATES -- Principal Distributions."] [As more fully   
described herein under "DESCRIPTION OF THE CERTIFICATES -- Interest             
Distributions" interest distributions on the Offered Certificates will be based 
on the Certificate Principal Balance thereof (or the Notional Amount, as defined
herein under "DESCRIPTION OF THE CERTIFICATES -- Interest Distributions" in the 
case of the Variable Strip Certificates) and the then applicable Pass-Through   

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(cover page continued)                                                          

Rate thereof, which will be variable for the Variable Strip Certificates and    
fixed for all other Classes of Certificates. Distributions in respect of        
principal of the Offered Certificates will be allocated among the various       
Classes of the Offered Certificates as described herein under "DESCRIPTION OF   
THE CERTIFICATES -- Principal Distributions." The rights of the holders of the  
Class B Certificates to receive distributions with respect to the Mortgage Loans
will be subordinated to the rights of the holders of the Offered Certificates,  
and the right of the holders of the Class M Certificates to receive             
distributions with respect to the Mortgage Loans will be subordinated to the    
right of the holders of the Senior Certificates and the Residual Certificates,  
to the extent described herein under "DESCRIPTION OF THE                        
CERTIFICATES -- Allocation of Losses; Subordination."] [Certain losses incurred 
due to defaults on the Mortgage Loans that are not covered by the Subordinate   
Certificates will be allocated on a pro rata basis between the Class A-1 and    
Class A-4 Certificates (the "Tiered Certificates") and the Class A-2, Class A-3 
and Variable Strip Certificates. Any such losses so allocated to the Tiered     
Certificates will be allocated to the Class A-4 Certificates until the          
Certificate Principal Balance thereof is reduced to zero, and then to the Class 
A-1 Certificates.]                                                              

[Certain Mortgage Loans provide that, at the option of the related    
Mortgagors, the adjustable rate on such Mortgage Loans may be converted to a    
fixed rate (the "Convertible Mortgage Loans"), provided that certain conditions 
have been satisfied. Upon notification from a Mortgagor of such Mortgagor's     
intent to convert from an adjustable rate to a fixed rate and prior to the      
conversion of any such Mortgage Loan (a "Converting Mortgage Loan"), the Master 
Servicer will be obligated to [purchase the] [act as remarketing agent with     
respect to such Converting Mortgage Loan and, in such capacity, to use its best 
efforts to arrange for the sale of such] Converting Mortgage Loan at a net price
of par plus accrued interest thereon (the "Conversion Price"). In the event that
the Master Servicer does not [purchase] [sell] a Converting or Converted        
Mortgage Loan (as defined herein under "DESCRIPTION OF THE MORTGAGE POOL --     
General"), the Mortgage Pool will thereafter include both fixed rate and        
adjustable rate Mortgage Loans. See "CERTAIN YIELD AND PREPAYMENT               
CONSIDERATIONS" herein.]                                                        

     The Master Servicer's only obligations with respect to the Certificates are
its contractual obligations under the terms of the Pooling Agreement.           

     The yield to maturity on the [Offered] Certificates will depend on the rate
of payment of principal (including prepayments, defaults[,] [and] liquidations  
[and purchases of Converting Mortgage Loans and Converted Mortgage Loans]) on   
the Mortgage Loans. [The Mortgage Loans may be prepaid in full or in part at any
time without penalty.] The yield to investors on the [Offered] Certificates will
be adversely affected by any shortfalls in interest collected on the Mortgage   
Loans due to prepayments, liquidations or otherwise. [The yield to investors on 
the Variable Strip Certificates and, in particular, on the Fixed Strip          
Certificates, will be extremely sensitive to the rate of principal payments     
(including prepayments) and defaults on the Mortgage Loans and may fluctuate    
significantly over time. A rapid rate of principal payments on the Mortgage     
Loans could result in the failure of such investors to recover their initial    
investments.] See "CERTAIN YIELD AND PREPAYMENT CONSIDERATIONS" herein and      
"YIELD CONSIDERATIONS" in the Prospectus.                                       

There is currently no secondary market for the [Offered] Certificates.
          (the "Underwriter[s]") intend[s] to make a secondary market in the
[Offered] Certificates but [is] [are] not obligated to do so. There can be no   
assurance that a secondary market for the Certificates will develop or, if it   
does develop, that it will continue. The [Offered] Certificates will not be     
listed on any securities exchange.                                              

   It is a condition of the issuance of the [Offered] Certificates that they
be rated "     " by             and "     " by             .                    

[An] [No] election will be made to treat the Trust Fund underlying the
Certificates as a real estate mortgage investment conduit ("REMIC") for federal 
income tax purposes. [Each Class of Senior Certificates and the Class M         
Certificates will constitute "regular interests" in the REMIC. The Class R      
Certificates will constitute the sole Class of "residual interests" in the      
REMIC. See "FEDERAL INCOME TAX CONSEQUENCES" herein and in the Prospectus."]    

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     THE [OFFERED] CERTIFICATES OFFERED BY THIS PROSPECTUS SUPPLEMENT CONSTITUTE
[PART OF] A SEPARATE SERIES OF CERTIFICATES BEING OFFERED BY THE DEPOSITOR      
PURSUANT TO ITS PROSPECTUS DATED               , 19  , OF WHICH THIS PROSPECTUS 
SUPPLEMENT IS A PART AND WHICH ACCOMPANIES THIS PROSPECTUS SUPPLEMENT. THE      
PROSPECTUS CONTAINS IMPORTANT INFORMATION REGARDING THIS OFFERING WHICH IS NOT  
CONTAINED HEREIN, AND PROSPECTIVE INVESTORS ARE URGED TO READ THE PROSPECTUS AND
THIS PROSPECTUS SUPPLEMENT IN FULL. SALES OF THE CERTIFICATES MAY NOT BE        
CONSUMMATED UNLESS THE PURCHASER HAS RECEIVED BOTH THIS PROSPECTUS SUPPLEMENT   
AND THE PROSPECTUS.                                                             

 UNTIL 90 DAYS AFTER THE DATE OF THIS PROSPECTUS SUPPLEMENT, ALL DEALERS
EFFECTING TRANSACTIONS IN THE CERTIFICATES, WHETHER OR NOT PARTICIPATING IN THIS
DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS SUPPLEMENT AND THE        
PROSPECTUS TO WHICH IT RELATES. THIS DELIVERY REQUIREMENT IS IN ADDITION TO THE 
OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS SUPPLEMENT AND PROSPECTUS WHEN    
ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR           
SUBSCRIPTIONS.                                                                  

CAPITALIZED TERMS USED IN THIS PROSPECTUS SUPPLEMENT AND NOT OTHERWISE
DEFINED HEREIN HAVE THE MEANINGS ASSIGNED IN THE PROSPECTUS. AN INDEX INDICATING
WHERE CERTAIN TERMS USED IN THE PROSPECTUS ARE DEFINED APPEARS AT THE END OF THE
PROSPECTUS UNDER THE CAPTION "INDEX OF PRINCIPAL DEFINITIONS."                  

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SUMMARY 

The following summary is qualified in its entirety by reference to the
detailed information appearing elsewhere herein and in the Prospectus.          

Title of Securities........  Mortgage Pass-Through Certificates, Series 19  -  .

Depositor..................  BA Mortgage Securities, Inc. (the "Depositor"), a  
                          wholly-owned subsidiary of Bank of America, FSB.
                See "THE DEPOSITOR" in the Prospectus.

Master Servicer............  Bank of America, FSB (the "Master Servicer"), a    
                            wholly-owned subsidiary of BankAmerica Corporation
                        ("BankAmerica"). See "POOLING AGREEMENT -- The
                    Master Servicer" herein and "MORTGAGE LOAN
                        PROGRAM -- Residential Mortgage Loan Servicing
                          Activities" and "-- Delinquency, Foreclosure and
             Loss Experience" in the Prospectus.

Trustee....................                      , a national banking           
      association (the "Trustee").

Cut-off Date...............                      , 19  .                        

Delivery Date..............  On or about                     , 19  .            

The Mortgage Pool..........  The Mortgage Pool will consist of [fixed]          
                        [adjustable] rate, [fully-amortizing] [, level
                        monthly payment] mortgage loans (the "Mortgage
                       Loans")[, exclusive of the Retained Yield (as
       defined herein under "POOLING
                           AGREEMENT -- Servicing and Other Compensation and
                     Payment of Expenses; Retained Yield")]. The
                         Mortgage Loans were [originated] [acquired from
                                               ] by                     (the
                            "Seller"). The Depositor will acquire the Mortgage
                         Loans from the Seller on the Delivery Date. The
                           aggregate principal balance of the Mortgage Loans
                      as of the Cut-off Date will be approximately
$          .          

                          The Mortgage Loans are secured by first liens on
                         one- to four-family residential real properties
                      [and, in the case of      Mortgage Loans, an
                             interest in shares isued by a cooperative apartment
                        corporation and the related proprietary lease]
                            (each, a "Mortgaged Property"). The Mortgage Loans
                            have terms to maturity of   years from the date of
                           origination and a weighted average remaining term
                            to stated maturity of approximately   months as of
the Cut-off Date.     

                            [The Mortgage Loans will bear interest at Mortgage
                         Rates of at least      % per annum but not more
                        than      % per annum, with a weighted average
                            Mortgage Rate of approximately      % per annum as
                          of the Cut-off Date.] [The Mortgage Rate on each
             Mortgage Loan will adjust [monthly]
                      [semi-][annually] on its Adjustment Date (as
                           defined herein under "DESCRIPTION OF THE MORTGAGE
                           POOL -- General"), with corresponding adjustments
                             in the amount of monthly payments, to equal the sum
                            (rounded as described herein under "DESCRIPTION OF
                     THE MORTGAGE POOL -- General") of the Index
                             described below and a fixed percentage set forth in
                        the related Mortgage Note (the "Note Margin").
                           However, (i) on any Adjustment Date such Mortgage
                           Rate may not increase or decrease by more than 1%
                           (the "Periodic Rate Cap"), and (ii) over the life
                           of such Mortgage Loan, such Mortgage Rate may not
                        exceed the related maximum Mortgage Rate (such
                             maximum Mortgage Rate is equal to the Mortgage Rate
at origination        

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                      plus a lifetime rate cap (the "Lifetime Rate
                         Cap")); which maximum Mortgage Rates will range
                         from      % to      % and (iii) with respect to
                        approximately      % of the Mortgage Loans, by
                             aggregate principal balance as of the Cut-off Date,
                            over the life of such Mortgage Loan, such Mortgage
                         Rate may not be lower than the minimum Mortgage
                           Rate. The difference between the Mortgage Rate on
                           each Mortgage Loan at origination and the minimum
                            Mortgage Rate on such Mortgage Loan will equal the
                          lifetime rate floor (the "Lifetime Rate Floor").
                           The minimum Mortgage Rates will range from      %
                         to      %. Accordingly, changes in the Weighted
                       Average Adjustable Pass-Through Rate will not
                           necessarily correspond to changes in the Index or
                            other prevailing interest rates. Additionally, the
                          initial Mortgage Rates in effect on the Mortgage
                        Loans will likely be lower than the sum of the
                            Index and related Note Margin that would have been
                        applicable at origination. Because the maximum
                             Mortgage Rate on any Mortgage Loan is determined by
                           adding the Lifetime Rate Cap to the Mortgage Rate
                             at origination, the maximum rate on a Mortgage Loan
                           will likely be less than the sum of the Index and
                            the Note Margin that would have been applicable at
                             origination plus the Lifetime Rate Cap. No Mortgage
                          Loan provides for payment caps on any Adjustment
                         Date which would result in deferred interest or
                             negative amortization. The Mortgage Loans will bear
                           interest at Mortgage Rates of at least      % per
                             annum but not more than      % per annum, as of the
Cut-off Date.]        

                          For a further description of the Mortgage Loans,
                        see "DESCRIPTION OF THE MORTGAGE POOL" herein.

[The Index.................  As of any Adjustment Date with respect to any      
                    Mortgage Loan, the Index applicable to the
                            determination of the related Mortgage Rate will be
                      a rate equal to [the twelve-month average of
                         monthly yields on actively traded U.S. Treasury
                           Securities adjusted to a constant maturity of one
                           year] [the weekly average of the secondary market
                             interest rates on six-month negotiable certificates
                             of deposit] [the average of interbank offered rates
                           for six-month U.S. dollar-denominated deposits in
                         the London Market] [the cost of funds of member
                           institutions of the Federal Home Loan Bank of San
                            Francisco] as most recently available   days prior
                to the Adjustment Date (the "Index").]

[Conversion of Mortgage                                                         
Loans....................  Approximately      % of the Mortgage Loans, by   
                             aggregate principal balance as of the Cut-off Date,
                           are Convertible Mortgage Loans. Upon notification
                        from a Mortgagor of such Mortgagor's intent to
                             convert from an adjustable rate to a fixed rate and
                     prior to the conversion thereof, the Master
                           Servicer will be obligated to [purchase the] [act
                   as remarketing agent with respect to such
                            Converting Mortgage Loan and, in such capacity, to
                         use its best efforts to arrange for the sale of
                          such] Converting Mortgage Loan at a net price of
                            par plus accrued interest thereon (the "Conversion
                             Price"). In the event that the Master Servicer does
                        not [purchase][sell] a Converting or Converted
                          Mortgage Loan, the Mortgage Pool will thereafter
                     include both fixed-rate and adjustable-rate
                           Mortgage Loans. See "CERTAIN YIELD AND PREPAYMENT
  CONSIDERATIONS" herein.]

The [Offered]                                                                   
Certificates...............  The Certificates will evidence the entire          
                            beneficial ownership interest in a trust fund (the
                            "Trust Fund") consisting primarily of the Mortgage

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                      Pool[, exclusive of the Retained Yield]. The
                           Certificates will be issued pursuant to a Pooling
                        Agreement, to be dated as of the Cut-off Date,
                           among the Depositor, the Master Servicer, and the
            Trustee (the "Pooling Agreement").

                           [The Senior Certificates will evidence an initial
                             interest of approximately      % in the Trust Fund.
                           The Class M Certificates will evidence an initial
                             interest of approximately      % in the Trust Fund.
                          The Offered Certificates will have the following
                      Pass-Through Rates and Certificate Principal
          Balances as of the Cut-off Date:

                                                                [Download Table]
                                                                
Class A-1 Certificates...............        %         $        
Class A-2 Certificates...............        %         $        
Class A-3 Certificates...............        %         $        
Class A-4 Certificates...............        %         $        
Class A-5 Certificates...............  Variable Rate   $        
Class M Certificates.................        %         $        
Class R Certificates.................        %         $       ]

Pass-Through Rate on the                                                        
[Offered] Certificates...  [The Pass-Through Rate on all Classes of the     
                             Offered Certificates, other than the Variable Strip
                          Certificates, is fixed. The Pass-Through Rate on
                 the Variable Strip Certificates on each
                            Distribution Date will equal the weighted average,
                    as determined on the Due Date in the month
                             preceding the month in which such Distribution Date
                        occurs, of the Pool Strip Rates on each of the
                            Mortgage Loans.] [The Pass-Through Rate applicable
                             to the Certificates in respect of each Distribution
                         Date will equal the weighted average of the Net
                          Mortgage Rates on the outstanding Mortgage Loans
                             for the month preceding such Distribution Date. The
                          initial weighted Average Adjustable Pass-Through
                         Rate will be      % per annum. The Net Mortgage
                             Rate on each Mortgage Loan is equal to the Mortgage
                            Rate thereon minus the per annum rate at which the
                          related master and primary servicing fees accrue
                            (the "Servicing Fee Rate") [and the per annum rate
                             at which the Retained Yield referred to below under
                   "POOLING AGREEMENT -- Servicing and Other
                        Compensation and Payment of Expenses; Retained
                        Yield" accrues].] [The Pool Strip Rates on the
                             Mortgage Loans range between      % and      %. The
                         initial Pass-Through Rate on the Variable Strip
                Certificates is approximately      %.]

Denominations..............  The [Offered] Certificates will be offered in      
                      registered form, in minimum denominations of
                            $          and integral multiples of $          in
                             excess thereof [with one Certificate evidencing the
                            authorized minimum denomination plus the remainder
                           of the aggregate initial principal balance of all
of the Certificates]. 

                           [The                Certificates ("DTC Registered
                           Certificates") are issuable in book-entry form in
                           minimum denominations of approximately $[       ]
                     and integral multiples of $       in excess
                          thereof, and will be represented by certificates
                           registered in the name of Cede & Co. ("Cede"), as
                             the nominee of the depository, The Depository Trust
                         Company ("DTC" and, together with any successor
                          depository, the "Depository"), which will be the
                   "Certificateholder" of the DTC Registered
                             Certificates, as such term is used herein. A person
                 acquiring an interest in DTC Registered
                      Certificates (a "Beneficial Owner") will not

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                           be entitled to receive a certificate representing
                     such Beneficial Owner's interest in the DTC
                          Registered Certificates except in the event that
                          Definitive Certificates (as defined herein under
                           "DESCRIPTION OF THE CERTIFICATES -- General") are
                       issued for all Certificates under the limited
                          circumstances described in the Prospectus. Until
                           such time, the rights of Beneficial Owners may be
                          exercised only through DTC and its participating
                      organizations, except as otherwise specified
         herein. See "DESCRIPTION OF THE
                            CERTIFICATES -- Book-Entry Registration of Certain
                      Certificates" herein and "DESCRIPTION OF THE
                      CERTIFICATES -- Form of Certificates" in the
Prospectus.]          

Interest Distributions.....  [Holders of each Class of Offered Certificates will
                           be entitled to receive distributions in an amount
                       equal to the Accrued Certificate Interest (as
                           defined below) on such Class on each Distribution
                           Date, to the extent of the Available Distribution
                             Amount (as defined herein under "DESCRIPTION OF THE
                             CERTIFICATES -- Available Distribution Amount") for
 such Distribution Date.

                        With respect to any Distribution Date, Accrued
                          Certificate Interest will be equal to (a) in the
                           case of each Class of Offered Certificates, other
                           than the Variable Strip Certificates, one month's
                       interest accrued on the Certificate Principal
                           Balance of the Certificates of such Class, at the
                         Pass-Through Rate on such Class, and (b) in the
                      case of the Variable Strip Certificates, one
                             month's interest accrued on the Notional Amount (as
                           defined below) of the Variable Strip Certificates
                          at the then applicable Pass-Through Rate on such
                             Class for such Distribution Date; in each case less
                    any interest shortfalls not covered by the
                             Subordination (as defined herein under "DESCRIPTION
                      OF THE CERTIFICATES -- Allocation of Losses;
                       Subordination"), including any Net Prepayment
                         Interest Shortfall (as defined and allocated as
                    described herein under "DESCRIPTION OF THE
                           CERTIFICATES -- Interest Distributions") for such
Distribution Date.    

                   The Notional Amount of the Variable Strip
                         Certificates as of any date of determination is
                      equal to the aggregate Certificate Principal
                     Balance of the Certificates of all Classes,
                            including the Subordinate Certificates, as of such
date.                 

                      If the Available Distribution Amount for any
                             Distribution Date is less than the aggregate amount
                        of Accrued Certificate Interest required to be
                             distributed on the Senior Certificates on such date
                          (the "Senior Interest Distribution Amount"), the
                         shortfall will be allocated among each affected
                             Class as described herein under "DESCRIPTION OF THE
               CERTIFICATES -- Allocation of Losses;
                           Subordination" [(the portion of such shortfall so
                      allocated to the Tiered Certificates will be
                          allocated first to the Class A-4 Certificates to
                           the extent described herein under "DESCRIPTION OF
                   THE CERTIFICATES -- Allocation of Losses;
                       Subordination"), and will be distributable to
                        holders of the Certificates of such Classes on
                         subsequent Distribution Dates, to the extent of
                             available funds. Any such amount so carried forward
  will not bear interest].

                          [Holders of the Certificates will be entitled to
                        receive distributions allocable to interest in
                             proportion to their respective Percentage Interests
                      (as defined herein under "DESCRIPTION OF THE
CERTIFI-              

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                   CATES -- Interest Distributions") on each
                       Distribution Date, to the extent of available
                            funds, in an aggregate amount equal to one month's
                           interest, at the then applicable Weighted Average
                        Adjustable Pass-Through Rate, on the principal
                           balance of the Certificates outstanding as of the
                        close of business on the immediately preceding
                        Distribution Date, subject to reduction in the
                          event of any full and partial prepayments or any
                         interest shortfalls not covered by the [name of
                      credit enhancement] (as defined herein under
                         "DESCRIPTION OF CREDIT ENHANCEMENT") as well as
                          certain losses and delinquencies on the Mortgage
                             Loans as described herein under "DESCRIPTION OF THE
               CERTIFICATES -- Allocation of Losses;
                 Subordination". See "DESCRIPTION OF THE
                            CERTIFICATES -- Interest Distributions" herein and
in the Prospectus.]   

Compensating Interest......  With respect to prepayments in full or in part, the
                           Master Servicer is obligated to reduce its Master
                           Servicing Fee to the extent necessary to fund any
                        Prepayment Interest Shortfall (adjusted to the
                         related Net Mortgage Rate) on each Distribution
                             Date but only to the extent of its Master Servicing
                         Fee therefor. The amount so passed through will
                     hereinafter be referred to as "Compensating
                 Interest." Compensating Interest on any
                          Distribution Date will be allocated [to] [among]
                            the holders of [all Classes of] [the] Certificates
                  [(including the Subordinate and Residual
                        Certificates), in proportion to the respective
                          amounts of Accrued Certificate Interest for such
                         Distribution Date on each such Class] [pro rata
                          based on distributions of interest to be made on
                          such Distribution Date]. See "DESCRIPTION OF THE
                     CERTIFICATES -- Interest Distributions" and
                       "CERTAIN YIELD AND PREPAYMENT CONSIDERATIONS"
herein.               

Principal Distributions....  [Holders of the Senior Certificates will be        
                           entitled to receive on each Distribution Date, in
                        the manner and priority set forth herein under
                       "DESCRIPTION OF THE CERTIFICATES -- Principal
                             Distributions", to the extent of the portion of the
                           Available Distribution Amount remaining after the
                            Senior Interest Distribution Amount is distributed
                      to the holders of the Senior Certificates, a
                            distribution allocable to principal which will, as
                           more fully described herein under "DESCRIPTION OF
                       THE CERTIFICATES -- Principal Distributions",
                       include (i) the Senior Percentage (as defined
                           below) of scheduled principal payments due on the
                            Mortgage Loans and of the principal portion of any
                          unscheduled collections of principal (other than
                       mortgagor prepayments and amounts received in
                         connection with a Final Disposition (as defined
          herein under "DESCRIPTION OF THE
                        CERTIFICATES -- Principal Distributions") of a
                        Mortgage Loan described in clause (ii) below),
                           including repurchases of the Mortgage Loans, (ii)
                       in connection with the Final Disposition of a
                             Mortgage Loan that did not incur any Excess Special
                    Hazard Losses, Excess Fraud Losses, Excess
                        Bankruptcy Losses and Extraordinary Losses (as
                  defined herein under "DESCRIPTION OF THE
               CERTIFICATES -- Allocation of Losses;
                           Subordination"), an amount equal to the lesser of
                           (a) the Senior Percentage of the Stated Principal
                          Balance (as defined herein under "DESCRIPTION OF
                          THE CERTIFICATES -- Principal Distributions") of
                           such Mortgage Loan and (b) the Senior Accelerated
                          Distribution Percentage (as defined herein under
                       "DESCRIPTION OF THE CERTIFICATES -- Principal
                     Distributions") of the related collections,
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                          Proceeds and Liquidation Proceeds, to the extent
                       applied as recoveries of principal; (iii) the
                        Senior Accelerated Distribution Percentage (as
                          defined below) of mortgagor prepayments and (iv)
                             the Excess Subordinate Principal Amount (as defined
          herein under "DESCRIPTION OF THE
                            CERTIFICATES -- Principal Distributions"), if any,
                      for such Distribution Date. Distributions in
                            respect of principal of the Senior Certificates on
                        any Distribution Date will be allocated to the
                         Classes then entitled to such distributions, as
                   described herein. See "DESCRIPTION OF THE
                          CERTIFICATES -- Principal Distributions" herein.

                     Holders of the Class M Certificates will be
                            entitled to receive a distribution of principal on
                      each Distribution Date, to the extent of the
                      portion of the Available Distribution Amount
                         remaining after (i) distributions in respect of
                             interest and principal to the holders of the Senior
                         Certificates [and distributions of the Retained
                            Yield], (ii) reimbursement for certain Advances to
                        the Master Servicer and (iii) distributions in
                           respect of interest to the holders of the Class M
                            Certificates. Such principal distributions will be
                            made as to the Class M Certificates in the amounts
                    described herein under "DESCRIPTION OF THE
                   CERTIFICATES -- Principal Distributions".

                 The Senior Percentage initially will be
                           approximately    % and will be recalculated after
                          each Distribution Date as described herein under
                       "DESCRIPTION OF THE CERTIFICATES -- Principal
                          Distributions" to reflect the entitlement of the
                          holders of the Senior Certificates to subsequent
                          distributions allocable to principal. The Senior
                      Accelerated Distribution Percentage for each
                           Distribution Date occurring during the first five
                            years after the Delivery Date will equal        %.
                    Commencing in           , 19  , the Senior
                          Accelerated Distribution Percentage will decline
                      annually, subject to certain limitations, in
                             accordance with the schedule described herein under
                       "DESCRIPTION OF THE CERTIFICATES -- Principal
                           Distributions" until, commencing in             ,
                  it will equal the then applicable Senior
                     Percentage; however, the Senior Accelerated
                      Distribution Percentage will be 100% for any
                        Distribution Date on which the then applicable
                       Senior Percentage is greater than the initial
                    Senior Percentage. See "DESCRIPTION OF THE
               CERTIFICATES -- Allocation of Losses;
 Subordination" herein.]

                     [Principal payments (including prepayments)
                       received on the Mortgage Loans will be passed
                             through on each Distribution Date to holders of the
                        Certificates in proportion to their respective
                       Percentage Interests. See "DESCRIPTION OF THE
                             CERTIFICATES -- Principal Distributions" herein and
in the Prospectus.]   

Advances...................  The Master Servicer is required to make advances   
                        ("Advances") to holders of the Certificates in
                         respect of delinquent payments of principal and
                         interest on the Mortgage Loans, but only if the
                           Master Servicer believes that the amount advanced
                         will be recoverable from subsequent payments or
                       collections (including Insurance Proceeds and
                         Liquidation Proceeds) in respect of the related
                      Mortgage Loan and subject to the limitations
                   described herein. See "DESCRIPTION OF THE
                     CERTIFICATES -- Advances" herein and in the
Prospectus.           

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[Credit Enhancement]                                                            
[Allocation of Losses;                                                          
Subordination]...........  Neither the [Offered] Certificates nor the       
                          underlying Mortgage Loans or other assets of the
                     Trust Fund are insured or guaranteed by any
                          governmental agency or instrumentality or by the
                             Depositor, the Master Servicer, Bank America or any
                             of their affiliates. [A limited amount of losses on
                         the Mortgage Loans will be covered initially by
                            [description of credit enhancement] (the "[name of
               credit enhancement]") to be issued by
                          (the "            ") in favor of the Trustee for
                             the benefit of the holders of the Certificates. The
                            maximum amount available under the [name of credit
                          enhancement] to cover losses with respect to the
                             Mortgage Loans will initially equal $          (the
                       initial "Available Amount") which is equal to
                       approximately    % of the aggregate principal
                         balance of the Mortgage Loans as of the Cut-off
                           Date. The Available Amount is subject to periodic
        reduction as described herein.

                            The [name of credit enhancement] will cover losses
                        on the Mortgage Loans from [Defaulted Mortgage
                          Losses], [Special Hazard Losses], [Fraud Losses]
                         and [Bankruptcy Losses] (each as defined in the
                             Prospectus). [Coverage] [Amounts that may be drawn]
                         under the [name of credit enhancement] to cover
                            [Special Hazard Losses] [Fraud Losses] [Bankruptcy
                       Losses] are initially limited to $          ,
                          $          and $          , respectively. All of
                       the foregoing amounts are subject to periodic
                             reduction as described herein under "DESCRIPTION OF
                             CREDIT ENHANCEMENT." Any [draws] [claims] under the
                         [name of credit enhancement], including [draws]
                             [claims] for [Special Hazard Losses] [Fraud Losses]
                       [Bankruptcy Losses] will reduce the Available
                       Amount. The [name of credit enhancement] will
                      expire on             , 19  , unless earlier
                             terminated or extended in accordance with its terms
                           or replaced in a manner as herein described under
              "DESCRIPTION OF CREDIT ENHANCEMENT."

                           In the event losses on Mortgage Loans occur which
                             are not covered by the [name of credit enhancement]
                            or any replacement credit enhancement, such losses
                         will be borne by the Certificateholders [in the
                  order of priority described herein]. See
                      "DESCRIPTION OF CREDIT ENHANCEMENT" herein.]

                      [Subject to the limitations set forth below,
                       Realized Losses on the Mortgage Loans will be
                            allocated to the Subordinate Certificates prior to
                          allocation to the Senior Certificates and to the
                         Class B Certificates prior to allocation to the
                             Class M Certificates. The subordination provided to
                    the Senior Certificates by the Subordinate
                  Certificates and provided to the Class M
                             Certificates by the Class B Certificates will cover
                    Realized Losses on the Mortgage Loans from
                           Defaulted Mortgage Losses, Special Hazard Losses,
                             Fraud Losses and Bankruptcy Losses (each as defined
                      in the Prospectus). The aggregate amounts of
                       Realized Losses which may be allocated to the
                          Subordinate Certificates to cover Special Hazard
                        Losses, Fraud Losses and Bankruptcy Losses are
                          initially limited to $          , $          and
                         $          , respectively. All of the foregoing
                      amounts are subject to periodic reduction as
                    described herein under "DESCRIPTION OF THE
               CERTIFICATES -- Allocation of Losses;
                      Subordination". In the event the Certificate
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                          Subordinate Certificates is reduced to zero, all
                        additional losses will be borne by the Class M
                            Certificateholders until the Certificate Principal
                           Balance of the Class M Certificates is reduced to
                            zero and then to the Senior Certificateholders. In
                           addition, any Special Hazard Losses, Fraud Losses
                           and Bankruptcy Losses in excess of the respective
                           amounts of coverage therefor will be borne by the
                        holders of Senior Certificates and Subordinate
                        Certificates on a pro rata basis. [Any Default
                             Losses (as defined herein under "DESCRIPTION OF THE
               CERTIFICATES -- Allocation of Losses;
                            Subordination") incurred on the Mortgage Loans and
                             not covered by the Subordinate Certificates will be
                             allocated on a pro rata basis between the Class A-1
                 and Class A-4 Certificates (the "Tiered
                         Certificates") and the Class A-2, Class A-3 and
                         Variable Strip Certificates. Any such losses so
                      allocated to the Tiered Certificates will be
                             allocated first to the Class A-4 Certificates until
                      the Certificate Principal Balance thereof is
                   reduced to zero and then to the Class A-1
                       Certificates. However, the credit enhancement
                             provided to the Class A-1 Certificates by the Class
                         A-4 Certificates will in no event cover Special
                            Hazard Losses, Bankruptcy Losses or Fraud Losses.]
                             Because principal distributions are paid to certain
                     Classes of Senior Certificates before other
                            Classes, holders of Classes of Senior Certificates
                           having a later priority of payment bear a greater
                        risk of such losses than holders of Classes of
                           Senior Certificates having earlier priorities for
                            distribution of principal. See "DESCRIPTION OF THE
               CERTIFICATES -- Allocation of Losses;
 Subordination" herein.]

[Subordinate                                                                    
Certificates...............  The Class M Certificates and Class B Certificates  
                         (together, the "Subordinate Certificates") have
                             aggregate initial Certificate Principal Balances of
                   approximately $          and $          ,
                     respectively, evidencing an initial Class M
                            Percentage and Class B Percentage of approximately
                                % and      %, respectively, and Pass-Through
                            Rates of      % and      % respectively. The Class
                          B Certificates are not being offered hereby. The
                         Depositor expects that the Class B Certificates
                         will be privately placed directly or indirectly
                  with one or more institution investors.]

[Residual Certificates.....  [The Class R Certificates (the "Residual           
                      Certificates") have no Certificate Principal
                         Balance and no Pass-Through Rate.] [The Class R
                            Certificates (the "Residual Certificates") have an
                            aggregate initial Certificate Principal Balance of
                           approximately             and a Pass-Through Rate
                            of      %.] In addition, the Residual Certificates
                represent the right to receive certain
                        distributions, if any, of amounts which are in
                             excess of the amounts required to be distributed to
                          all other Classes of Certificates, including the
                            Subordinate Certificates, following the retirement
                          of [the] [all of the Senior Certificates and the
                  Subordinate] Certificates. [The Residual
                     Certificates are not being offered hereby.]

Optional Termination.......  At its option, on any Distribution Date when the   
                         principal balance of the Mortgage Loans is less
                             than [5][10]% of the aggregate principal balance of
                        the Mortgage Loans as of the Cut-off Date, the
                            Master Servicer or the Depositor may purchase from
                         the Trust Fund all remaining Mortgage Loans and
                  other assets thereof at a price equal to
                                        and thereby effect early retirement of
        the Certificates. See "POOLING

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                           AGREEMENT -- Termination" herein and "THE POOLING
                      AGREEMENT -- Termination" in the Prospectus.

Special Prepayment                                                              
Considerations...........  The rate of principal payments on the [Offered]  
                           Certificates collectively will depend on the rate
                     and timing of principal payments (including
                        prepayments, defaults and liquidations) on the
                             Mortgage Loans. As is the case with mortgage-backed
                          securities generally, the [Offered] Certificates
                       are subject to substantial inherent cash-flow
                         uncertainties because the Mortgage Loans may be
                         prepaid at any time. Generally, when prevailing
                            interest rates are increasing, prepayment rates on
                         mortgage loans tend to decrease, resulting in a
                            reduced return of principal to investors at a time
                           when reinvestment at such higher prevailing rates
                         would be desirable. Conversely, when prevailing
                           interest rates are declining, prepayment rates on
                         mortgage loans tend to increase, resulting in a
                            greater return of principal to investors at a time
                           when reinvestment at comparable yields may not be
possible.             

                     [The multiple Class structure of the Senior
                   Certificates results in the allocation of
                             prepayments among certain Classes as follows [to be
   included as appropriate]:

                            [Sequentially paying Classes: [All] Classes of the
                    Senior Certificates are subject to various
                          priorities for payment of principal as described
                          herein under "DESCRIPTION OF THE CERTIFICATES --
                            Principal Distributions". Distributions on Classes
                       having an earlier priority of payment will be
                             immediately affected by the prepayment speed of the
                          Mortgage Loans early in the life of the Mortgage
                             Pool. Distribution on Classes with a later priority
                         of payment will not be directly affected by the
                          prepayment speed until such time as principal is
                            distributable on such Classes; however, the timing
                            of commencement of principal distributions and the
                        weighted average lives of such Classes will be
                           affected by the prepayment speed experienced both
                        before and after the commencement of principal
         distributions on such Classes.]

                           [PAC Certificates: Principal distributions on the
                     PAC Certificates will be payable in amounts
                           determined based on schedules as described herein
                             under "DESCRIPTION OF THE CERTIFICATES -- Principal
                            Distributions", provided that the prepayment speed
                          of the Mortgage Loans each month remains between
                           approximately      % SPA and      % SPA. However,
                       as discussed herein under "DESCRIPTION OF THE
                          CERTIFICATES -- Principal Distributions", actual
                             principal distributions may be greater or less than
                           the described amounts. If the prepayment speed of
                        the Mortgage Loans is consistently higher than
                                 % of SPA, then the Companion Certificates, as
                          defined below, will be retired before all of the
                       PAC Certificates are retired, and the rate of
                          principal distributions and the weighted average
                             lives of the remaining PAC Certificates will become
                        significantly more sensitive to changes in the
                    prepayment speed of the Mortgage Loans and
                            principal distribution thereon will be more likely
                 to deviate from the described amounts.]

                           [TAC Certificates: Principal distributions on the
                     TAC Certificates will be payable in amounts
                           determined based on schedules as described herein
                             under "DESCRIPTION OF THE CERTIFICATES -- Principal
                        Distributions", if the prepayment speed of the
Mortgage Loans were   

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                        to remain at a constant level of approximately
                             % SPA. However, as discussed herein under
                       "DESCRIPTION OF THE CERTIFICATES -- Principal
                            Distributions", actual principal distributions are
                       likely to deviate from the described amounts,
                       because it is highly unlikely that the actual
                           prepayment speed of the Mortgage Loans each month
                             will remain at or near      % SPA. If the Companion
                        Certificates are retired before all of the TAC
                         Certificates are retired, the rate of principal
                             distributions and the weighted average lives of the
                remaining TAC Certificates will become
                        significantly more sensitive to changes in the
                     prepayment speed of the Mortgage Loans, and
                             principal distributions thereon will be more likely
                 to deviate from the described amounts.]

                             [Companion Certificates: Because of the application
                          of amounts available for principal distributions
                           among the Senior Certificates in any given month,
                         first to the [PAC] [TAC] Certificates up to the
                     described amounts and then to the Companion
                           Certificates, the rate of principal distributions
                         and the weighted average lives of the Companion
                             Certificates will be extremely sensitive to changes
                            in the prepayment speed of the Mortgage Loans. The
                 weighted average lives of the Companion
                           Certificates will be significantly more sensitive
                         to changes in the prepayment speed than that of
                             either the [PAC] [TAC] Certificates or a fractional
                    undivided interest in the Mortgage Loans.]

                            [Subordination features: As described herein under
                       "DESCRIPTION OF THE CERTIFICATES -- Principal
                         Distributions", during certain periods all or a
                          disproportionately large percentage of principal
                             prepayments on the Mortgage Loans will be allocated
                           among the Senior Certificates, and during certain
                    periods none or a disproportionately small
                    percentage (or, as compared to the Class B
                Certificates during certain periods, a
                      disproportionately large percentage) of such
                        prepayments will be distributed on the Class M
                         Certificates. As a result, the weighted average
                            lives of the Class M Certificates will be extended
                      and, as a relative matter, the subordination
                         afforded the Senior Certificates by the Class M
                 Certificates (together with the Class B
                   Certificates) will be increased. [Similar
                        descriptions to be added to other classes with
   subordination features.]]

 See "DESCRIPTION OF THE
                         CERTIFICATES -- Distributions of Principal" and
                       "CERTAIN YIELD AND PREPAYMENT CONSIDERATIONS"
              herein, and "MATURITY AND PREPAYMENT
            CONSIDERATIONS" in the Prospectus.

Special Yield                                                                   
Considerations.............  [The yield to maturity on the Certificates will    
                             depend on the rate and timing of principal payments
                             (including prepayments, defaults, liquidations [and
                           purchases of Mortgage Loans converting to a fixed
                        rate]) on the Mortgage Loans, as well as other
                             factors such as changes in the Index, provisions of
                             the Mortgage Loans limiting changes in the Mortgage
                             Rates and the purchase price for such Certificates.
                           The Weighted Average Adjustable Pass-Through Rate
                         will be reduced to the extent that prepayments,
                           liquidations and purchases occur at a faster rate
                             for Mortgage Loans having higher Net Mortgage Rates
                           than for Mortgage Loans having lower Net Mortgage
                            Rates. [The yield to investors on the Certificates
                      will be adversely affected by any allocation
                          thereto of prepayment interest shortfalls on the
                           Mortgage Loans, which are expected to result from
                          the distribution of interest only to the date of

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                             prepayment (rather than a full month's interest) in
                           connection with prepayments in full, and the lack
                          of any distribution of interest on the amount of
   any partial prepayments.]

                           See "CERTAIN YIELD AND PREPAYMENT CONSIDERATIONS"
                   herein, and "YIELD CONSIDERATIONS" in the
Prospectus.]          

                            [The yield to maturity on each respective Class of
                             the Senior Certificates will depend on the rate and
                 timing of principal payments (including
                        prepayments, defaults and liquidations) on the
                           Mortgage Loans and the allocation thereof (and of
                         any losses on the Mortgage Loans) to reduce the
                            Certificate Principal Balance (or Notional Amount)
                             of such Class, as well as other factors such as the
                             Pass-Through Rate (and any adjustments thereto) and
                        the purchase price for such Certificates. [The
                   yield to investors on any Class of Senior
                        Certificates will be adversely affected by any
                   allocation thereto of prepayment interest
                     shortfalls on the Mortgage Loans, which are
                     expected to result from the distribution of
                         interest only to the date of prepayment (rather
                          than a full month's interest) in connection with
                  prepayments in full, and the lack of any
                       distribution of interest on the amount of any
partial prepayments.] 

                          In general, if a Class of Senior Certificates is
                            purchased at a premium and principal distributions
                            thereon occur at a rate faster than anticipated at
                           the time of purchase, the investor's actual yield
                            to maturity will be lower than that assumed at the
                            time of purchase. Conversely, if a Class of Senior
                     Certificates is purchased at a discount and
                         principal distributions thereon occur at a rate
                           slower than that assumed at the time of purchase,
                         the investor's actual yield to maturity will be
                 lower than that originally anticipated.

                            The Senior Certificates were structured based on a
                       number of assumptions, including a prepayment
                             assumption of      % SPA and weighted average lives
                         corresponding thereto as set forth herein under
                        "SPECIAL PREPAYMENT CONSIDERATIONS." The yield
                            assumptions for the respective Classes that are to
                             be offered hereunder will vary as determined at the
time of sale.         

                     [The multiple Class structure of the Senior
                             Certificates causes the yield of certain Classes to
                     be particularly sensitive to changes in the
                          prepayment speed of the Mortgage Loans and other
                factors, as follows [to be included as
appropriate]:]        

                          [Interest strip and inverse floater Classes: The
                           yield to investors on the [identify Classes] will
                          be extremely sensitive to the rate and timing of
                             principal payments on the Mortgage Loans (including
                            prepayments, defaults and liquidations), which may
                            fluctuate significantly over time. A rapid rate of
                        principal payments on the Mortgage Loans could
                             result in the failure of investors in the [identify
                           interest strip and inverse floater strip Classes]
                            to recover their initial investments, and a slower
                            than anticipated rate of principal payments on the
                            Mortgage Loans could adversely affect the yield to
                      investors on the [identify non-strip inverse
floater Classes].]    

                          [Variable Strip Certificates: In addition to the
                    foregoing, the yield on the Variable Strip
                            Certificates will be materially adversely affected
to a                  

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                            greater extent than the yields on the other Senior
                        Certificates if the Mortgage Loans with higher
                        Mortgage Rates prepay faster than the Mortgage
                             Loans with lower Mortgage Rates, because holders of
                        the Variable Strip Certificates generally have
                          rights to relatively larger portions of interest
                             payments on the Mortgage Loans with higher Mortgage
                          Rates than on Mortgage Loans with lower Mortgage
Rates.]               

                      [Adjustable rate (including inverse floater)
                            Classes: The yields on the [identify floating rate
                          Classes] will be sensitive, and the yield on the
                    [identify inverse floater Classes] will be
                           extremely sensitive, to fluctuations in the level
                      of [the index]. The Pass-Through Rate on the
                      [identify inverse floater Classes] will vary
                             inversely with, and at a multiple of, [the index].]

                            [Inverse floater companion Classes: In addition to
                       the foregoing, in the event of relatively low
                           prevailing interest rates (including [the index])
                            and relatively high rates of principal prepayments
                         over an extended period, while investors in the
                          [identify inverse floater companion Classes] may
                           then be experiencing a high current yield on such
                            Certificates, such yield may be realized only over
                            a relatively short period, and it is unlikely that
                       such investors would be able to reinvest such
                         principal prepayments on such Certificates at a
comparable yield.]    

                           [Subordination features: The yield to maturity on
                    the Class M Certificates will be extremely
                             sensitive to losses due to defaults on the Mortgage
                            Loans (and the timing thereof), to the extent such
                             losses are not covered by the Class B Certificates,
                          because the entire amount of such losses (rather
                            than a pro rata portion thereof) will be allocable
                            to the Class [M] Certificates, as described herein
   under "DESCRIPTION OF THE
               CERTIFICATES -- Allocation of Losses;
                           Subordination". [Similar descriptions to be added
                          for other Classes with subordination features.]]

                         [Residual Certificates: Holders of the Residual
                            Certificates are entitled to receive distributions
                             of principal and interest as described herein under
                       "DESCRIPTION OF THE CERTIFICATES -- Principal
                  Distributions"; however, holders of such
                            Certificates may have tax liabilities with respect
                         to their Certificates during the early years of
                            their term that substantially exceed the principal
                           and interest payable thereon during such periods.
                             [In addition, such distributions will be reduced to
                           the extent that they are subject to United States
           federal income tax withholding.]]

               See "CERTIFICATE YIELD AND PREPAYMENT
                 CONSIDERATIONS" [, especially "-- Yield
                        Considerations," "-- Yield Considerations" and
                        "-- Additional Yield Considerations Applicable
                           Solely to the Residual Certificates" and "FEDERAL
                      INCOME TAX CONSEQUENCES"] herein, and "YIELD
            CONSIDERATIONS" in the Prospectus.

Federal Income Tax                                                              
Consequences.............  [An election will be made to treat the Trust Fund
                         as a real estate mortgage investment conduit (a
                          "REMIC"). Upon the issuance of the Certificates,
                            Orrick, Herrington & Sutcliffe LLP, counsel to the
                          Depositor, will deliver its opinion generally to
                       the effect that, assuming compliance with all
                             provisions of the Pooling Agreement, the Trust Fund
will                  

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                             qualify as a REMIC under Sections 860A through 860G
                            of the Internal Revenue Code of 1986 (the "Code").

                     The assets of the REMIC will consist of the
                          Mortgage Loans and the other assets in the Trust
                        Fund. The Offered Certificates (other than the
                            Class R Certificates) will be regular interests in
                           the REMIC and will be treated as debt instruments
                           of the REMIC for federal income tax purposes. The
                    Class R Certificates will be the "residual
  interests" in the REMIC.

                        For federal income tax reporting purposes, the
                                  Certificates will not be treated as having
                       been issued with original issue discount. The
                 Certificates may, and the
                                    Certificates will, be treated as having been
                         issued with original issue discount for federal
                       income tax reporting purposes. The prepayment
                         assumption that will be used in determining the
                         rate of accrual of market discount and original
                             issue discount for federal income tax purposes will
                           be equal to        % SPA (as defined herein under
                            "CERTAIN YIELD AND PREPAYMENT CONSIDERATIONS"). No
                             representation is made that the Mortgage Loans will
                   prepay at that rate or at any other rate.

                       For further information regarding the federal
                            income tax consequences of investing in the Senior
                             Certificates, see "FEDERAL INCOME TAX CONSEQUENCES"
       herein and in the Prospectus.

                           [No election will be made to treat the Trust Fund
                          as a real estate mortgage investment conduit for
                           federal income tax purposes. Orrick, Herrington &
                        Sutcliffe LLP , counsel to the Depositor, will
                          deliver its opinion generally to the effect that
                        the Trust Fund will be classified as a grantor
                            trust under the Internal Revenue Code of 1986 (the
                             "Code"), and not as a partnership or an association
                          taxable as a corporation. For federal income tax
                             purposes, the Certificateholders will be treated as
                           owners of stripped bonds, see "FEDERAL INCOME TAX
                           CONSEQUENCES -- Grantor Trust Fractional Interest
              Certificates" in the Prospectus. The
                          Certificateholders will therefore be required to
                          include their yield with respect to the Mortgage
                         Loans in gross income as it accrues, based on a
                      constant yield method in accordance with the
                        original issue discount rules, which may be in
                             advance of the receipt of cash attributable to such
                income. In the absence of statutory or
                         administrative clarification, it is intended to
                base information returns or reports to
                             Certificateholders and the Internal Revenue Service
                             on the use of a prepayment assumption of      % CPR
                      (as defined herein under "FEDERAL INCOME TAX
                    CONSEQUENCES -- Special Tax Considerations
                     Applicable to Residual Certificates") and a
                       representative initial offering price for the
                        Certificates in computing such constant yield.
                     However, no representation is made that the
                           Mortgage Loans will prepay at that rate or at any
                             other rate. Certificateholders should consult their
                             tax advisors as to the proper treatment of original
                      issue discount on the Mortgage Loans and the
                             application of the stripped bond rules. For further
                      information regarding the federal income tax
                            consequences of investing in the Certificates, see
                             "FEDERAL INCOME TAX CONSEQUENCES" herein and in the
Prospectus.]          

ERISA Considerations.......  See "ERISA CONSIDERATIONS" herein and in the       
Prospectus.           

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Rating.....................  It is a condition of the issuance of the [Offered] 
                            Certificates that they be rated at least "       "
         by                          and
        "                         " by
                                             . [RATINGS ON THE
                           CERTIFICATES WILL NOT REPRESENT ANY ASSESSMENT OF
                            THE MASTER SERVICER'S ABILITY TO [PURCHASE] [SELL]
                         CONVERTING MORTGAGE LOANS OR CONVERTED MORTGAGE
                           LOANS. In the event that the Master Servicer does
                           not [purchase] [sell] a Converting Mortgage Loans
                      or Converted Mortgage Loan, investors in the
                            Certificates might suffer a lower than anticipated
                           yield.] A security rating is not a recommendation
                            to buy, sell or hold securities and may be subject
                      to revision or withdrawal at any time by the
                          assigning rating organization. A security rating
                          does not address the frequency of prepayments of
                        Mortgage Loans, or the corresponding effect on
                            yield to investors. [The rating of the Fixed Strip
                          Certificates or Variable Strip Certificates does
                         not address the possibility that the holders of
                             such Certificates may fail to recover their initial
                        investment.] See "CERTAIN YIELD AND PREPAYMENT
                        CONSIDERATIONS" and "RATING" herein and "YIELD
            CONSIDERATIONS" in the Prospectus.

Legal Investment...........  The Certificates will constitute "mortgage related 
                            securities" for purposes of the Secondary Mortgage
                             Market Enhancement Act of 1984 ("SMMEA") so long as
                       they are rated in at least the second highest
                 rating category by a Rating Agency. The
                            Certificates will not constitute "mortgage related
                         securities" for purposes of SMMEA. Institutions
                          whose investment activities are subject to legal
                             investment laws and regulations, regulatory capital
                          requirements or review by regulatory authorities
                             may be subject to restrictions on investment in the
                        [Offered] Certificates and should consult with
                             their legal advisors. See "LEGAL INVESTMENT" herein
                           and "LEGAL INVESTMENT MATTERS" in the Prospectus.

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RISK FACTORS

  [Risks Presented by Convertible Mortgage Loans.  Certain of the Mortgage
Loans allow the Mortgagors to convert the adjustable rates on such Mortgage     
Loans to a fixed rate at some point during the life of such Mortgage Loans (each
such Mortgage Loan, a "Convertible Mortgage Loan"), generally during the period 
from one to twelve years subsequent to the date of origination, depending upon  
the length of the initial adjustment period. See "THE MORTGAGE POOLS -- The     
Mortgage Loans" in the Prospectus and "DESCRIPTION OF THE MORTGAGE POOL" herein.
Convertible Mortgage Loans are a relatively new type of mortgage loan. The      
Depositor is not aware of any publicly available statistics that set forth      
conversion experience or forecasts of conversion of such loans over an extended 
period of time, and its experience with respect to such loans is insufficient to
draw any conclusions with respect to the expected conversion rates. When, as    
required by the Pooling Agreement, the Master Servicer [purchases a] [acts as a 
remarketing agent with respect to such Converting Mortgage Loan and, in such    
capacity arranges for the sale of a] Converting Mortgage Loan, the effect on the
Certificateholders is similar to a Principal Prepayment in full of such Mortgage
Loan. Consequently, the conversion of a Mortgage Loan will generally result in  
the prepayment of principal with respect to the Mortgage Pool. Because          
Mortgagors may attempt to limit the risk of a higher mortgage interest rate     
during periods of rising interest rates by exercising the option to convert     
Mortgage Loans and thereby "lock-in" a fixed rate, the yield on the Certificates
may be affected by such conversions at time when prepayments generally would not
be expected. Also, as described above, Mortgagors may attempt to "lock-in" a    
fixed rate in a declining interest-rate environment and may elect to do so      
through the conversion feature.                                                 

The rate at which Mortgagors exercise their conversion rights and the 
resulting [purchase] [sale] of the related Mortgage Loans by the Master Servicer
will affect the rate of payment of principal of, and hence the effective yield  
on the Certificates. The effective yield on the Certificates would also be      
affected by the failure of the Master Servicer to [purchase] [sell] such        
Mortgage Loans.]                                                                

[Risk of Higher Delinquencies Associated with Underwriting            
Standards.  Certain of the Mortgage Loans were acquired from Unaffiliated       
Sellers as described in the Prospectus under the heading "MORTGAGE LOAN         
PROGRAM." Such Sellers utilize their own underwriting standards which may vary  
substantially from FNMA or FHLMC guidelines and the Guides utilized by          
Affiliated Sellers, as described in the Prospectus under the heading "MORTGAGE  
LOAN PROGRAM." Mortgage Loans originated by Unaffiliated Sellers under such     
underwriting standards may experience rates of delinquency, foreclosure and     
bankruptcy that are higher than mortgage loans originated under the Guides or   
FNMA or FHLMC guidelines.]                                                      

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DESCRIPTION OF THE MORTGAGE POOL* 

GENERAL                                                                         

The Mortgage Pool will consist of Mortgage Loans with an aggregate    
principal balance outstanding as of the Cut-off Date, after deducting payments  
of principal due on such date, of approximately $          . The Mortgage Pool  
will consist of conventional [fully-amortizing] [, level monthly payment] first 
Mortgage Loans with [fixed] [adjustable] interest rates which have terms to     
maturity of not less than   years from the date of origination.                 

     All of the Mortgage Loans were [originated] [acquired from             ] by
the Seller, as more fully described herein and in the Prospectus. [Approximately
% and    % of the Mortgage Loans, by aggregate principal balance as of the
Cut-off Date, are or will be subserviced by             .]                      

    Pursuant to the terms of the Pooling Agreement, the Depositor shall assign
the representations and warranties relating to the Mortgage Loans made by the   
Seller to the Trustee for the benefit of the Certificateholders as of the       
Delivery Date. To the extent that the Seller is not able to repurchase a        
Mortgage Loan in the event of a breach of its representations and warranties    
with respect to such Mortgage Loan, neither the Depositor [, the Master         
Servicer] nor any of [their] [its] affiliates will be required to repurchase    
such Mortgage Loan. If there was fraud in the origination of such Mortgage Loans
a limited amount of losses on such Mortgage Loans will be covered by the        
[Subordination (as defined herein) provided by the Class M Certificates and     
Class B Certificates as described herein under "DESCRIPTION OF THE              
CERTIFICATES -- Allocation of Losses; Subordination."] [[name of credit         
enhancement] as described herein under "DESCRIPTION OF CREDIT ENHANCEMENT."]    

 [FOR ARM LOAN MORTGAGE POOLS -- The Mortgage Rate on each Mortgage Loan
will adjust [monthly] [semi-]annually on a date specified in the related        
Mortgage Note (the "Adjustment Date"). For approximately    % of the Mortgage   
Loans, by aggregate principal balance as of the Cut-off Date, the first         
Adjustment Date occurred prior to the Cut-off Date.]                            

    [FOR ARM LOAN MORTGAGE POOLS -- On each Adjustment Date, the Mortgage Rate
on a Mortgage Loan will be adjusted to equal the sum (rounded to the next       
highest multiple of    %) of (a) a rate per annum equal to [description of      
applicable index to be provided] (the "Index") and as most recently available as
of the day      days prior to such Adjustment Date or, in the event that such   
Index is no longer                                                              

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

* The description herein of the Mortgage Pool and the Mortgaged Properties is   
 based upon the Mortgage Loans expected to be included in the Mortgage Pool at
the time the [Offered] Certificates are issued, using the principal balances
of such Mortgage Loans at the close of business on the Cut-off Date, after  
  deducting the scheduled principal payments due on or before such date, whether
or not actually received. All references herein to "principal balance" refer
  to the principal balance as of the Cut-off Date, unless otherwise specifically
stated or required by the context. References herein to percentages of      
Mortgage Loans refer in each case to the approximate percentage of the      
aggregate principal balance of all Mortgage Loans, based on the outstanding 
principal balances of the Mortgage Loans after giving effect to scheduled   
principal payments due on or prior to the Cut-off Date, whether or not      
received. References to weighted averages refer, in each case, to weighted  
averages by principal balance as of the Cut-off Date of the related Mortgage
Loans (determined as described in the preceding sentence). Prior to the     
 issuance of the Certificates, Mortgage Loans may be removed from the Mortgage
  Pool as a result of Principal Prepayments in full, delinquencies or otherwise.
 In such event, other Mortgage Loans may be included in the Mortgage Pool. The
actual Mortgage Pool at the time the [Offered] Certificates are issued will 
not vary by more than 5%, based on the principal balances of the Mortgage   
Loans constituting the Mortgage Pool at such time, from the Mortgage Pool   
  described herein. The Depositor believes that the information set forth herein
 with respect to the Mortgage Pool is representative of the characteristics of
  the Mortgage Pool as it will actually be constituted at the time the [Offered]
Certificates are issued, although the range of Mortgage Rates and certain   
  other characteristics of the Mortgage Loans in the Mortgage Pool may vary. See
"-- Additional Information" herein.                                         

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available, an index selected by the Master Servicer and reasonably acceptable to
the Trustee that is based on comparable information, and (b) the related Note   
Margin, subject to the following limitations. The Mortgage Rate on the Mortgage 
Loan on any Adjustment Date may not increase or decrease by more than the       
Periodic Rate Cap applicable to such Mortgage Loan and, over the life of such   
Mortgage Loan, generally may not exceed the Mortgage Rate at origination plus   
the Lifetime Rate Cap, or be less than the Mortgage Rate at origination minus   
any Lifetime Rate Floor, applicable to such Mortgage Loan. No Mortgage Loan     
provides for payment caps on any Adjustment Date which would result in deferred 
interest or negative amortization. Effective with the first payment due date on 
a Mortgage Loan after an Adjustment Date therefor, the monthly principal and    
interest payment will be adjusted to an amount that will fully amortize the then
outstanding principal balance of such Mortgage Loan at its stated maturity and  
pay interest at the adjusted Mortgage Rate. Because the amortization schedule of
each Mortgage Loan will be recalculated [monthly] [semi-]annually, any partial  
prepayments thereof will not reduce the term to maturity of such Mortgage Loan. 
An increase in the Mortgage Rate on a Mortgage Loan will result in a larger     
monthly payment and in a larger percentage of such monthly payment being        
allocated to interest and a smaller percentage being allocated to principal, and
conversely, a decrease in the Mortgage Rate on the Mortgage Loan will result in 
a lower monthly payment and in a larger percentage of each monthly payment being
allocated to principal and a smaller percentage being allocated to interest.]   

 [Description of source and availability of Index to be provided for ARM
Loan Mortgage Pools.]                                                           

   [FOR ARM LOAN MORTGAGE POOLS -- Listed below are the historical values of
the Index since 1991. Such values may fluctuate significantly over time and may 
not increase or decrease in a constant pattern from period to period. The       
following does not purport to be representative of future values of the Index.  
No assurance can be given as to the Index value to be applied on any future     
Adjustment Date.                                                                

HISTORICAL LEVELS OF [NAME OF INDEX]

                                                        [Enlarge/Download Table]

                  MONTH                      1992      1993      1994      1995      1996      1997  
-----------------------------------------  --------  --------  --------  --------  --------  --------
                                                                                                     
January..................................                                                            
February.................................                                                            
March....................................                                                            
April....................................                                                            
May......................................                                                            
June.....................................                                                            
July.....................................                                                            
August...................................                                                            
September................................                                                            
October..................................                                                            
November.................................                                                            
December.................................                                                            

  [FOR ARM LOAN MORTGAGE POOLS -- The initial Mortgage Rate in effect on a
Mortgage Loan generally will be lower than the sum of the Index that would have 
been applicable at origination and the Note Margin. Absent a decline in the     
Index subsequent to origination of a Mortgage Loan, the related Mortgage Rate   
will generally increase on the first Adjustment Date following origination of   
such Mortgage Loan. The repayment of such Mortgage Loans will be dependent on   
the ability of the Mortgagor to make larger Monthly Payments following          
adjustments of the Mortgage Rate. Moreover, because the maximum Mortgage Rate on
any Mortgage Loan is determined by adding the Lifetime Rate Cap to the Mortgage 
Rate at origination, irrespective of the Index that would have been applicable  
at origination, the maximum Mortgage Rate on a Mortgage Loan will generally be  
less than the sum of the Index and the Note Margin that would have been         
applicable at origination plus the Lifetime Rate Cap. Mortgage Loans that have  
the same initial Mortgage Rate may not always bear interest at the same Mortgage
Rate because the Mortgage Loans may have different                              

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Adjustment Dates (and the Mortgage Rate therefore may reflect different Index   
values), different Note Margins, different Lifetime Rate Caps and different     
Lifetime Rate Floors, if any.]                                                  

[FOR ARM LOAN MORTGAGE POOLS WITH CONVERTIBLE MORTGAGE LOANS --       
Approximately    % of the Mortgage Loans, by aggregate principal balance as of  
the Cut-off Date, are Convertible Mortgage Loans. The first month in which any  
of the Mortgage Loans could convert was             ,      and the last month in
which any of the Mortgage Loans may convert is             ,      . Upon        
conversion, the monthly payments of principal and interest will be adjusted to  
provide for full amortization at scheduled maturity. Upon notification from a   
Mortgagor of such Mortgagor's intent to convert from an adjustable rate to a    
fixed rate and prior to the conversion thereof, the Master Servicer will be     
obligated to [purchase the Converting Mortgage Loan] [act as remarketing agent  
with respect to such Converting Mortgage Loan and, in such capacity, to use its 
best efforts to arrange for the sale of such Converting Mortgage Loan at the    
Conversion Price]. For a discussion of how the purchase of Converting Mortgage  
Loans will affect the rate of payment of principal of, and hence the effective  
yield on, the Certificates, see "RISK FACTORS" and "CERTAIN YIELD AND PREPAYMENT
CONSIDERATIONS" herein.                                                         

In the event that the Master Servicer fails to [purchase] [sell] a    
Converting Mortgage Loan or any such Mortgage Loan following its conversion (a  
"Converted Mortgage Loan"), neither the Depositor, the Master Servicer or any of
their affiliates nor any other entity is obligated to purchase or arrange for   
the purchase of any Converted Mortgage Loan. Any such Converted Mortgage Loan   
will remain in the Mortgage Pool as a fixed-rate Mortgage Loan and will result  
in the Mortgage Pool having both fixed rate and adjustable rate Mortgage Loans. 
For a discussion of the effect on the yield to Certificateholders of such       
Converted Mortgage Loans remaining in the Mortgage Pool, see "CERTAIN YIELD AND 
PREPAYMENT CONSIDERATIONS" herein.                                              

Following the purchase of any Converting Mortgage Loan or Converted   
Mortgage Loan as described above, the purchaser will be entitled to receive an  
assignment from the Trustee of such Mortgage Loan and the purchaser will        
thereafter own such Mortgage Loan free of any further obligation to the Trustee 
or the Certificateholders with respect thereto.]                                

    The Principal Balance of any Mortgage Loan as of any time of determination
is the principal balance of such Mortgage Loan remaining to be paid by the      
Mortgagor at the close of business on the Cut-off Date, after deduction of all  
payments due on or before the Cut-off Date whether or not paid, reduced by all  
amounts distributed to Certificateholders with respect to such Mortgage Loan and
reported to them as allocable to principal, including the principal components  
of any Advances (as described below under "DESCRIPTION OF THE                   
CERTIFICATES -- Advances").                                                     

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    [FOR ARM LOAN MORTGAGE POOLS -- The Mortgage Loans will have approximately
the following characteristics as of the Cut-off Date:                           

                                                                [Download Table]
                                                  
Number of Mortgage Loans.....................     
Weighted Average Adjustable Pass-Through          
  Rate(1)                                         
Mortgage Rates:                                   
  Weighted Average...........................     
  Range......................................     
Range of Net Mortgage Rates..................     
Note Margins:                                     
  Weighted Average...........................     
  Range......................................     
Net Note Margin(2)...........................     
Maximum Mortgage Rates:                           
  Weighted Average...........................     
  Range......................................     
Maximum Net Mortgage Rates(3):                    
  Weighted Average...........................     
  Range......................................     
Weighted Average Months to Next Adjustment        
  Date after               , 19  (4).........     

---------------                                                                 
(1) The Weighted Average Adjustable Pass-Through Rate is equal to the weighted  
average of the Net Mortgage Rates on the Mortgage Loans.                

(2) The Net Note Margin is the Note Margin on each Mortgage Loan minus the      
Servicing Fee Rate [and the rate at which the Retained Yield accrues].  

(3) The difference between the maximum Net Mortgage Rate and the Net Mortgage   
Rate as of the Cut-off Date may be less than the Lifetime Rate Cap.     

(4) The Weighted Average Months to the next Adjustment Date is equal to the     
weighted average of the number of months until the Adjustment Date next 
following               , 19  .]                                        

The Mortgage Loans in the Mortgage Pool will have the following       
characteristics as of the Cut-off Date (except as otherwise indicated).         
Percentages of the Mortgage Pool are percentages of the aggregate principal     
balance of the Mortgage Loans having such characteristics relative to the       
aggregate principal balance of all Mortgage Loans in the Mortgage Pool):        

[FOR FIXED RATE MORTGAGE LOAN POOLS -- MORTGAGE RATES 

                                                        [Enlarge/Download Table]

                                                 NUMBER OF     PRINCIPAL  PERCENTAGE OF
               MORTGAGE RATES                  MORTGAGE LOANS   BALANCE   MORTGAGE POOL
---------------------------------------------  --------------  ---------  -------------
                                                                                       
     %.......................................                  $                    %  

                                                   -------      --------      ------   
          Total..............................                  $                    %  
                                                   =======      ========      ======   

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

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ORIGINAL MORTGAGE LOAN PRINCIPAL BALANCES 

                                                        [Enlarge/Download Table]

                                                                UNPAID                 
           ORIGINAL MORTGAGE LOAN                NUMBER OF     PRINCIPAL  PERCENTAGE OF
              PRINCIPAL BALANCE                MORTGAGE LOANS   BALANCE   MORTGAGE POOL
---------------------------------------------  --------------  ---------  -------------
                                                                                       
     %.......................................                  $                    %  

                                                   -------      --------      ------   
          Total..............................                  $                    %  
                                                   =======      ========      ======   

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

ORIGINAL LOAN-TO-VALUE RATIOS 

                                                        [Enlarge/Download Table]

                LOAN-TO-VALUE                    NUMBER OF     PRINCIPAL  PERCENTAGE OF
                  RATIO(%)                     MORTGAGE LOANS   BALANCE   MORTGAGE POOL
---------------------------------------------  --------------  ---------  -------------
                                                                                       
     %.......................................                  $                    %  

                                                   -------      --------      ------   
          Total..............................                  $                    %  
                                                   =======      ========      ======   

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

GEOGRAPHIC DISTRIBUTIONS OF MORTGAGED PROPERTIES

                                                        [Enlarge/Download Table]

                                                                UNPAID                 
                                                 NUMBER OF     PRINCIPAL  PERCENTAGE OF
                    STATE                      MORTGAGE LOANS   BALANCE   MORTGAGE POOL
---------------------------------------------  --------------  ---------  -------------
                                                                                       
     ........................................                  $                    %  

Other(1).....................................                                          
                                                   -------      --------      ------   
          Total..............................                  $                    %  
                                                   =======      ========      ======   

---------------                                                                 
(1) Other includes states and the District of Columbia with under 3%            
concentrations individually.                                            

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

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MORTGAGED PROPERTY TYPES

                                                        [Enlarge/Download Table]

                                                         NUMBER OF     PRINCIPAL  PERCENTAGE OF
                    PROPERTY TYPE                      MORTGAGE LOANS   BALANCE   MORTGAGE POOL
-----------------------------------------------------  --------------  ---------  -------------
                                                                                               
Single-family detached...............................                  $                    %  
Planned Unit Developments (detached).................                                          
Two- to four-family units............................                                          
Condo Low-Rise (less than 5 stories).................                                          
Condo Mid-Rise (5 to 8 stories)......................                                          
Condo High-Rise (9 stories or more)..................                                          
Townhouse............................................                                          
Planned Unit Developments (attached).................                                          
Cooperative Units....................................                                          
Leasehold............................................                                          
                                                           -------      --------      ------   
          Total:.....................................                  $                    %  
                                                           =======      ========      ======   

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

   None of the Mortgage Loans in the Mortgage Pool will have been originated
prior to               , 19  or will have a scheduled maturity later than       
           ,      . No Mortgage Loan will have an unexpired term to stated
maturity as of the Cut-off Date of less than      months. The weighted average  
remaining term to stated maturity of the Mortgage Loans as of the Cut-off Date  
will be approximately                                                           
months.                                                                         

As of the Cut-off Date, no Mortgage Loan will be one month or more    
delinquent in payment of principal and interest.                                

                Mortgage Loans, constituting      % of the Mortgage Pool, will
be Buydown Mortgage Loans.                                                      

   Approximately      % of the Mortgage Loans were equity refinance mortgage
loans made to mortgagors who used less than the entire amount of the proceeds to
refinance an existing mortgage loan. The weighted average Loan-to-Value Ratio at
origination of such Mortgage Loans, as of the Cut-off Date, is approximately    
   %. Approximately      % of the Mortgage Loans were made to Mortgagors who
used the entire proceeds to refinance an existing Mortgage Loan. The weighted   
average Loan-to-Value Ratio at origination of such Mortgage Loans, as of the    
Cut-off Date, is approximately      %.                                          

     Approximately      % of the Mortgage Loans provide for deferred interest or
negative amortization.                                                          

Approximately      % of the Mortgage Loans will have been underwritten
under the Rapid Processing Program described in the Prospectus under "MORTGAGE  
LOAN PROGRAM -- Underwriting Standards." The weighted average Loan-to-Value     
Ratio at origination of the Mortgage Loans in the Mortgage Pool which were      
underwritten under the Rapid Processing Program will be approximately      %.   
Approximately      % of the Mortgage Loans underwritten under the Rapid         
Processing Program will be secured by Mortgaged Properties located in           
California. See "POOLING AGREEMENT -- The Master Servicer" herein.              

   Approximately      % of the Mortgage Loans will be secured by vacation or
second homes. Approximately      % of the Mortgage Loans will be secured by     
non-owner-occupied residences.                                                  

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   [FOR ARM LOAN MORTGAGE POOLS -- The following table sets forth the number
and aggregate principal balance as of the Cut-off Date of Mortgage Loans having 
their next Adjustment Dates in the month described therein. The table also      
indicates the approximate percentage of Mortgage Loans with an Adjustment Date  
in each such month.                                                             

                                                        [Enlarge/Download Table]

                                                                             PERCENTAGE OF
                MONTH OF                    NUMBER OF         AGGREGATE      MORTGAGE POOL
            ADJUSTMENT DATE               MORTGAGE LOANS  PRINCIPAL BALANCE     BALANCE   
----------------------------------------  --------------  -----------------  -------------
                                                                                          
                                                              $                      %    

                                              -------           -------       -------     
          Total:........................                      $                      %]   
                                              =======           =======       =======     

   [FOR ARM LOAN MORTGAGE POOLS -- The following table sets forth the number
and average original principal balance of Mortgage Loans having original        
principal balances in the ranges described therein, as of the Cut-off Date. The 
table also indicates the approximate weighted average Mortgage Rate and the     
approximate weighted average Loan-to-Value Ratio at origination of the Mortgage 
Loans in each given range, as of the Cut-off Date. Such weighted average        
Loan-to-Value Ratio of the Mortgage Loans is equal to the average of the        
Loan-to-Value Ratios at origination.                                            

                                                        [Enlarge/Download Table]

                                                                                          WEIGHTED AVERAGE
                                                                                              ORIGINAL    
                                       NUMBER OF     AVERAGE ORIGINAL   WEIGHTED AVERAGE   LOAN-TO-VALUE  
    ORIGINAL PRINCIPAL BALANCE       MORTGAGE LOANS  PRINCIPAL BALANCE   MORTGAGE RATE         RATIO      
-----------------------------------  --------------  -----------------  ----------------  ----------------
                                                                                                          

          Total, Average or                                                                               
            Weighted Average.......                      $                        %                 %     
                                     ============     ============      =============     =============   

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

 [Certain aspects of the Cooperative Loans included in the Mortgage Pool
differ from those of other types of Mortgage Loans. See "CERTAIN LEGAL ASPECTS  
OF MORTGAGE LOANS -- The Mortgage Loans -- Cooperative Loans" in the            
Prospectus.]                                                                    

PRIMARY MORTGAGE INSURANCE AND PRIMARY HAZARD INSURANCE                         

     Each Mortgage Loan is required to be covered by a standard hazard insurance
policy (a "Primary Hazard Insurance Policy"). In addition, each Mortgage Loan   
with a Loan-to-Value Ratio at origination in excess of 80% is required to be    
covered by a primary mortgage insurance policy covering the amount of such      
Mortgage Loan in excess of 75% of the value of the related Mortgaged Property   
used in determining such Loan-to-Value Ratio (a "Primary Insurance Policy").    
Approximately           % of the Mortgage Loans, by aggregate principal balance 
as of the Cut-off Date, were required to be covered by Primary Insurance        
Policies and, to the best of the Depositor's knowledge, such Mortgage Loans are 
so covered. Substantially all of such Primary Insurance Policies were issued by 
                              (together with the other primary mortgage guaranty
insurers for the Mortgage Loans, the "Primary Insurers"). The Master Servicer   
shall keep or cause to be kept in full force and effect each such Primary       
Insurance Policy until the principal balance of the related Mortgage Loan       
secured by a Mortgaged Property is reduced to 80% or less of the appraised value
in the case of such a Mortgage Loan having a Loan-to-Value Ratio at origination 
in excess of 80%, provided that such Primary Insurance Policy was in place as of
the Cut-off Date and the Depositor had knowledge of such Primary Insurance      
Policy. [In the event that the Depositor gains knowledge that as of the Closing 
Date, a Mortgage Loan had a Loan-to-Value Ratio at origination in excess of 80% 
and was not the subject of a Primary Insurance Policy and that such Mortgage    
Loan has a then current Loan-to-Value Ratio in excess of 80%, then the Master   
Servicer is required to use its reasonable efforts to obtain and maintain a     
Primary Insurance Policy to the extent that such a policy is obtainable at a    
reasonable price.] Each Primary Insurer                                         

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has a claims-paying ability currently acceptable to the Rating Agencies that    
have been requested to rate the Certificates; however, there is no assurance as 
to the actual ability of any Primary Insurer to pay claims. See "PRIMARY        
MORTGAGE INSURANCE, HAZARD INSURANCE; CLAIMS THEREUNDER" in the Prospectus.     

ADDITIONAL INFORMATION                                                          

A Current Report on Form 8-K will be available to purchasers of the   
[Offered] Certificates and will be filed, together with the Pooling Agreement,  
with the Securities and Exchange Commission within fifteen days after the       
initial issuance of the [Offered] Certificates. In the event Mortgage Loans are 
removed from or added to the Mortgage Pool as set forth in the footnote on page 
S-19, such removal or addition will be noted in the Current Report on Form 8-K. 

DESCRIPTION OF THE CERTIFICATES 

GENERAL                                                                         

  [The Series 19   Mortgage Pass-Through Certificates (the "Certificates")
will consist of the following Classes: (i) the Class A-1 Certificates, Class A-2
Certificates, Class A-3 Certificates, (ii) Class A-4 Certificates (the "Fixed   
Strip Certificates"), (iii) Class A-5 Certificates (the "Variable Strip         
Certificates"; together with the Class A-1 Certificates, Class A-2 Certificates,
Class A-3 Certificates and Fixed Strip Certificates, the "Senior Certificates"),
(iv) Class R Certificates (the "Residual Certificates") and (v) [  ] Classes of 
Subordinate Certificates which are designated as the Class M Certificates and   
the Class B Certificates (together, the "Subordinate Certificates"). The        
Certificates will evidence in the aggregate the entire beneficial ownership in  
the Trust Fund. The Trust Fund will consist of (i) the Mortgage Loans[,         
exclusive of the Depositor's rights in and to the Retained Yield with respect to
each Mortgage Loan]; (ii) such assets as from time to time are identified as    
deposited in respect of the Mortgage Loans in the Custodial Account and in the  
Certificate Account and belonging to the Trust Fund; (iii) property acquired by 
foreclosure of such Mortgage Loans or deed in lieu of foreclosure; [and] (iv)   
any applicable Primary Insurance Policies and Primary Hazard Insurance Policies 
and all proceeds thereof; [and (v) the [name of credit enhancement] (or any     
alternate form of credit support substituted therefor) and all proceeds thereof,
other than any amount drawn thereunder and deposited in a reserve fund.]        

   [The                     Certificates (the "DTC Registered Certificates")
will be issued, maintained and transferred on the book-entry records of DTC and 
its Participants. The DTC Registered Certificates will be issued in minimum     
denominations of $[          ] and integral multiples of $1 in excess thereof.] 
The Certificates will be issued in registered, certificated form in minimum     
denominations of $          and integral multiples of $          in excess      
thereof, except for one           Certificate, evidencing the sum of an         
authorized denomination thereof and the remainder of the aggregate initial      
Certificate Principal Balance of such Class of Certificates. The Residual       
Certificates will be issued in registered, certificated form in minimum         
denominations of a 20% Percentage Interest, except as otherwise set forth herein
under "FEDERAL INCOME TAX CONSEQUENCES."                                        

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

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BOOK-ENTRY REGISTRATION OF CERTAIN CERTIFICATES                                 

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

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

 None of the Depositor, the Master Servicer or the Trustee will have any
liability for any actions taken by DTC or its nominee, including, without       
limitation, actions for any aspect of the records relating to or payments made  
on account of beneficial ownership interests in the DTC Registered Certificates 
held by Cede, as nominee for DTC, or for maintaining, supervising or reviewing  
any records relating to such beneficial ownership interests.                    

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

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

For additional information regarding DTC and the DTC Registered       
Certificates, see "DESCRIPTION OF THE CERTIFICATES -- Form of Certificates" in  
the Prospectus.]                                                                

AVAILABLE DISTRIBUTION AMOUNT                                                   

   The "Available Distribution Amount" for any Distribution Date is equal to
(i) the aggregate amount of scheduled payments on the Mortgage Loans due on the 
related Due Date and received on or prior to the related Determination Date,    
after deduction of the related master servicing fees and any subservicing fees  
(collectively, the "Servicing Fees"), (ii) certain unscheduled payments,        
including Mortgagor prepayments on the Mortgage Loans, Insurance Proceeds,      
Liquidation Proceeds and proceeds from repurchases of and substitutions for the 
Mortgage Loans occurring during the preceding calendar month and (iii) all      
Advances made for such Distribution Date, in each case net of amounts           
reimbursable therefrom to the Master Servicer                                   

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and any Subservicer. In addition to the foregoing amounts, with respect to      
unscheduled collections, not including Mortgagor prepayments, the Master        
Servicer may elect to treat such amounts as included in the Available           
Distribution Amount for the Distribution Date in the month of receipt, but is   
not obligated to do so. As described herein under "-- Principal Distributions," 
any such amount with respect to which such election is so made shall be treated 
as having been received on the last day of the preceding calendar month for the 
purposes of calculating the amount of principal and interest distributions to   
any Class of Certificates. With respect to any Distribution Date, (i) the Due   
Date is the first day of the month in which such Distribution Date occurs and   
(ii) the Determination Date is the   th day of the month in which such          
Distribution date occurs or, if such day is not a business day, the immediately 
succeeding business day.                                                        

INTEREST DISTRIBUTIONS                                                          

[FOR ARM LOAN MORTGAGE POOLS -- Interest distributions to holders of  
Certificates will be made on each Distribution Date based on their respective   
Percentage Interests. The undivided Percentage Interest of a Certificate will be
equal to the percentage obtained by dividing the initial principal balance of   
such Certificate by the aggregate initial principal balance of all Certificates,
which will equal the aggregate principal balance of the Mortgage Loans as of the
Cut-off Date.                                                                   

Holders of Certificates will be entitled to receive distributions of  
interest on each Distribution Date, to the extent of the Available Distribution 
Amount, in an aggregate amount equal to one month's interest, at the then       
applicable Weighted Average Adjustable Pass-Through Rate on the principal       
balance of the Mortgage Loans outstanding as of the close of business on the    
immediately preceding Distribution Date (or, in the case of the first           
Distribution Date, outstanding as of the Cut-off Date), subject to reduction in 
the event of any interest shortfalls not covered by the [name of credit         
enhancement], including any Net Prepayment Interest Shortfalls (as defined      
below), as well as the interest portions of Realized Losses (including Special  
Hazard Losses in excess of the Special Hazard Amount ("Excess Special Hazard    
Losses"), Fraud Losses in excess of the Fraud Loss Amount ("Excess Fraud        
Losses"), Bankruptcy Losses in excess of the Bankruptcy Loss Amount ("Excess    
Bankruptcy Losses") and losses occasioned by war, civil insurrection, certain   
governmental actions, nuclear reaction and certain other risks ("Extraordinary  
Losses")) not covered by the [name of credit enhancement]. The Weighted Average 
Adjustable Pass-Through Rate for any Distribution Date will equal the average of
the Net Mortgage Rates (expressed as a percentage rounded to four decimal       
places) on the Mortgage Loans (weighted by the principal balances of such       
Mortgage Loans as of the Due Date occurring in the preceding month). Subject to 
the following limitations, for each period beginning on the related Adjustment  
Date therefor, the Net Mortgage Rate on a Mortgage Loan will equal the sum of   
the Index (rounded to the nearest multiple of        %) and the Net Note Margin.
The Net Note Margin for each Mortgage Loan will be        %. The Net Mortgage   
Rate on any Mortgage Loan on any Adjustment Date may not increase or decrease by
more than the Periodic Rate Cap, and the Net Mortgage Rate on any Mortgage Loan 
will not exceed the maximum Net Mortgage Rate (the "Maximum Net Mortgage Rate") 
applicable to such Mortgage Loan as specified in the Pooling Agreement. The     
difference between the Net Mortgage Rate as of the Cut-off Date and the Maximum 
Net Mortgage Rate will not exceed, and may be less than, the Lifetime Rate Cap. 
With respect to each Mortgage Loan, the Net Mortgage Rate is the rate per annum 
equal to the Mortgage Rate for such Mortgage Loan, net of the Servicing Fee Rate
[and the per annum rate at which the Retained Yield accrues]. See "DESCRIPTION  
OF THE MORTGAGE POOL" and "POOLING AGREEMENT -- Servicing and Other Compensation
and Payment of Expenses;" herein.]                                              

[FOR FIXED RATE MORTGAGE LOAN POOLS -- Holders of each Class of       
Certificates will be entitled to receive distributions in an amount equal to the
Accrued Certificate Interest on such Class on each Amount for such Distribution 
Date[, provided however, in the case of the Tiered Certificates, that following 
the Credit Support Depletion Date such distributions shall be made in the       
priority set forth in the   th paragraph under the heading "Principal           
Distributions"]. With respect to any Distribution Date, Accrued Certificate     
Interest will be equal to (a) in the case of each Class of Offered Certificates 
other than the Variable Strip Certificates, one month's interest accrued on the 
Certificate Principal Balance of the Certificates of such Class at the          
Pass-Through Rate on such Class and (b) in the case of the Variable Strip       
Certificates, one month's interest accrued on the Notional Amount (as defined   
below) of the Certificates of                                                   

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such Class at the then applicable Pass-Through Rate on such Class for such      
Distribution Date; in each case less interest shortfalls, if any, for such      
Distribution Date not covered by the Subordination provided by the Subordinate  
Certificates, including in each case (i) any Net Prepayment Interest Shortfall  
(as defined below), (ii) the interest portions of Realized Losses (including    
Special Hazard Losses in excess of the Special Hazard Amount ("Excess Special   
Hazard Losses"), Fraud Losses in excess of the Fraud Loss Amount ("Excess Fraud 
Losses"), Bankruptcy Losses in excess of the Bankruptcy Amount ("Excess         
Bankruptcy Losses") and losses occasioned by war, civil insurrection, certain   
governmental actions, nuclear reaction and certain other risks ("Extraordinary  
Losses")) not covered by the Subordination [(which with respect to the pro rata 
portion thereof allocated to the Tiered Certificates, to the extent such losses 
are Default Losses, will be allocated first to the Class A-4 Certificates and   
then to the Class A-1 Certificates)] (iii) the interest portion of any Advances 
that were made with respect to delinquencies that were ultimately determined to 
be Excess Special Hazard Losses, Excess Fraud Losses, Excess Bankruptcy Losses  
or Extraordinary Losses and (iv) any other interest shortfalls not covered by   
Subordination, including interest shortfalls relating to the Relief Act (as     
defined in the Prospectus) or similar legislation or regulations, all allocated 
as described below. The Variable Strip Certificates will not receive any        
interest distributions with respect to their Certificate Principal Balance.     
Accrued Certificate Interest is calculated on the basis of a 360-day year       
consisting of twelve 30-day months.                                             

  The Notional Amount of the Variable Strip Certificates as of any date of
determination is equal to the aggregate Certificate Principal Balance of the    
Certificates of all Classes, including the Subordinate Certificates, as of such 
date.                                                                           

     If the Available Distribution Amount for any Distribution Date is less than
the aggregate amount of the Accrued Certificate Interest required to be         
distributed on the Senior Certificates on such date (the "Senior Interest       
Distribution Amount"), the shortfall will be allocated among the holders of all 
Classes of Senior Certificates pro rata based on the Accrued Certificate        
Interest of each such Distribution Date, and will be distributable to holders of
the Certificates of such Classes, on subsequent Distribution Dates, to the      
extent of available funds, provided, however, that following the Credit Support 
Depletion Date distributions will be made to the Tiered Certificates in the     
priority set forth in the eighth paragraph under the heading "PRINCIPAL         
DISTRIBUTIONS" and therefore the pro rata portion of such shortfall that is     
allocated to the Tiered Certificates will be allocated first to the Class A-4   
Certificates. Shortfalls could occur, for example, if loses realized on the     
Mortgage Loans in the Trust Fund were exceptionally high and were concentrated  
in a particular month and if advances by the Master Servicer did not cover the  
shortfall. Any such amount so carried forward will not bear interest.           

     The Pass-Through Rate on each Class of Offered Certificates, other than the
Variable Strip Certificates, is set forth on the cover hereof and is fixed for  
each Distribution Date. The Pass-Through Rate on the Fixed Strip Certificates is
equivalent to a fixed interest rate of approximately        % on the aggregate  
Certificate Principal Balance of all of the Class A-1 and Fixed Strip           
Certificates. The Pass-Through Rate on the Variable Strip Certificates for each 
Distribution Date will equal the weighted average, as determined as of the Due  
Date in the month preceding the month in which such Distribution Date occurs, of
the Pool Strip Rates on each of the Mortgage Loans in the Mortgage Pool. The    
Pool Strip Rate on any Mortgage Loan is equal to the Net Mortgage Rate thereon  
minus        %. The Net Mortgage Rate on each Mortgage Loan is equal to the     
Mortgage Rate thereon minus the Servicing Fee Rate. The initial Pass-Through    
Rate on the Class A-5 Certificates is approximately        %.                   

 As described herein, the Accrued Certificate Interest allocable to each
Class of Offered Certificates is based on the Certificate Principal Balance     
thereof or in the case of the Variable Strip Certificates, on the Notional      
Amount. The Certificate Principal Balance of any Certificate as of any date of  
determination is equal to the initial Certificate Principal Balance thereof,    
reduced by the aggregate of (a) all amounts allocable to principal previously   
distributed with respect to such Certificate and (b) any reductions in the      
Certificate Principal Balance thereof deemed to have occurred in connection with
allocations of Realized Losses (as defined herein) in the manner described      
herein. The Notional Amount of the Variable Strip Certificates as of any date of
determination is equal to the aggregate Certificate Principal Balance of the    
Certificates of all Classes (including the Variable Strip Certificates, Residual
Certificates and Subordinate Certificates) as of                                

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such date. Reference to the Notional Amount of a Variable Strip Certificate is  
solely for convenience in certain calculations and does not represent the right 
to receive any distributions allocable to principal other than such Class's     
initial Certificate Principal Balance.]                                         

     The Prepayment Interest Shortfall for any Distribution Date is equal to the
aggregate shortfall, if any, in collections of interest (adjusted to the related
Net Mortgage Rates) resulting from Mortgagor prepayments on the Mortgage Loans  
during the preceding calendar month. Such shortfalls will result because        
interest on prepayments in full is paid only to the date of prepayment, and no  
interest is paid on prepayments in part, as such prepayments are applied to     
reduce the outstanding principal balance of the related Mortgage Loan as of the 
Due Date in the month of prepayment. The Net Prepayment Interest Shortfall for  
any Distribution Date is the Prepayment Interest Shortfall for such Distribution
Date not funded by the Master Servicer as Compensating Interest. The Net        
Prepayment Interest Shortfall, the interest portions of Realized Losses not     
covered by the [name of credit enhancement] [Subordination] interest shortfalls 
relating to the Relief Act (as defined herein) or similar legislation and other 
interest shortfalls not covered by the [name of credit enhancement]             
[Subordination] on any Distribution Date will be allocated [to] [among] the     
holders of [all Classes of] [the] Certificates [(including the Subordinate and  
Residual Certificates), in proportion to the respective amounts of Accrued      
Certificate Interest for such Distribution Date on each such Class] [pro rata   
based on distributions of interest to be made on such Distribution Date], before
taking into account any such reduction [(except with respect to interest        
portions of such Realized Losses that are Default Losses that are allocated as  
described in the fourth preceding paragraph)].                                  

PRINCIPAL DISTRIBUTIONS                                                         

[FOR ARM LOAN MORTGAGE POOLS -- Holders of the Certificates will be   
entitled to receive on each Distribution Date, to the extent of available funds 
after distributions of interest as set forth above, an amount equal to the      
"Principal Distribution Amount" for such Distribution Date, which will equal the
sum of: (a) the principal portion of any Advances for such Distribution Date;   
(b) any amount required to be paid by the Master Servicer due to the operation  
of a deductible clause in any blanket policy maintained by it to cover hazard   
losses on the Mortgage Loans as described in the Prospectus under "PRIMARY      
MORTGAGE INSURANCE, HAZARD INSURANCE; CLAIMS THEREUNDER"; (c) all payments in   
respect of the Mortgage Loans on account of principal (including, without       
limitation, Principal Prepayments, the principal portion of any Liquidation     
Proceeds and Insurance Proceeds, the principal portion of proceeds from         
repurchased Mortgage Loans and the principal portion of proceeds from the sale  
of Converting Mortgage Loans and Converted Mortgage Loans) on deposit in the    
Custodial Account on the Determination Date immediately preceding such          
Distribution Date, except (i) Liquidation Proceeds, Insurance Proceeds (other   
than draws or payments under the [name of credit enhancement]) and Principal    
Prepayments received during the month in which such Distribution Date occurs    
(unless such amounts are deemed to have been received in the prior month        
pursuant to the Pooling Agreement as described below), (ii) scheduled payments  
of principal due on a date or dates subsequent to the first day of the month in 
which such Distribution Date occurs, (iii) late payments of principal which have
been the subject of a previous Advance or Advances that have not been reimbursed
to the Master Servicer (on behalf of itself or on behalf of any Subservicer) and
(iv) an amount equal to liquidation expenses incurred by the Master Servicer to 
the extent not reimbursed from related Liquidation Proceeds; and (d) all amounts
required to be deposited in the Certificate Account on the Business Day         
immediately preceding such Distribution Date, with respect to draws or payments 
under the [name of credit enhancement] which are allocable to payments on       
account of principal of the Mortgage Loans, except for payments of principal    
which have been the subject of a previous Advance or Advances and which are     
eligible for withdrawal in reimbursement to the Master Servicer or any          
Subservicer.                                                                    

    Distributions for any Distribution Date will be reduced if net Liquidation
Proceeds or net Insurance Proceeds (including receipt of any amounts payable as 
described below under "DESCRIPTION OF CREDIT ENHANCEMENT") received on a        
defaulted Mortgage Loan during the month preceding the month in which such      
Distribution Date occurs are less than the outstanding principal balance of such
Mortgage Loan, plus interest thereon at the related Net Mortgage Rate. If an    
Advance by the Master Servicer was previously made in respect of a defaulted    
Mortgage Loan, any late payments of principal and interest,                     

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Insurance Proceeds and Liquidation Proceeds remitted to the Master Servicer     
relating to such Mortgage Loan will be subject to withdrawal by the Master      
Servicer from the Custodial Account in reimbursement to itself for such Advance 
prior to being made available to the Certificateholders. To the extent that an  
Advance is not made, the distributions for such Distribution Date will be       
reduced accordingly. Reimbursement of the Master Servicer or the Depositor for  
any other advances or expenses reimbursable to either as described in the       
Prospectus, out of amounts otherwise distributable to the Certificateholders,   
will also reduce the distributions for the related Distribution Date.           
Distributions for any Distribution Date will be reduced to the extent that      
losses on any Mortgage Loans in the Mortgage Pool are not covered by the [name  
of credit enhancement] or any substitute form of credit enhancement.]           

   [FOR FIXED RATE MORTGAGE LOAN POOLS -- Holders of the Senior Certificates
will be entitled to receive on each Distribution Date, to the extent of the     
portion of the Available Distribution Amount remaining after the Senior Interest
Distribution Amount is distributed to such holders, a distribution allocable to 
principal in the following amount:                                              

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

            (1) the principal portion of the all scheduled monthly payments on
       the Mortgage Loans due on the related Due Date, whether or not received
 on or prior to the related Determination Date, less the principal
    portion of Debt Service Reductions (as defined below) which together
    with other Bankruptcy Losses are in excess of the Bankruptcy Amount;

            (2) the principal portion of all proceeds of the repurchase of any
  Mortgage Loan as required by any applicable Mortgage Loan Purchase
Agreement during the preceding calendar month;                  

        (3) the principal portion of all other unscheduled collections
 received during the preceding calendar month (other than full and
       partial Principal Prepayments made by the respective mortgagors and any
   amounts received in connection with a Final Disposition (as defined
        below) of a Mortgage Loan described in clause (ii) below), to the extent
applied as recoveries of principal;                             

        (ii) in connection with the Final Disposition of a Mortgage Loan (x)
   that occurred in the preceding calendar month and (y) that did not result
     in any Excess Special Hazard Losses, Excess Fraud Losses, Excess Bankruptcy
  Losses or Extraordinary Losses, an amount equal to the lesser of (a) the
   then-applicable Senior Percentage of the Stated Principal Balance of such
   Mortgage Loan and (b) the then-applicable Senior Accelerated Distribution
Percentage (as defined below) of the related collections, including   
Insurance Proceeds and Liquidation Proceeds to the extent applied as  
recoveries of principal;                                              

        (iii) the then applicable Senior Accelerated Distribution Percentage
    of the aggregate of all full and partial Principal Prepayments made by the
respective Mortgagors during the preceding calendar month;            

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

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

Holders of the Class M Certificates will be entitled to receive a     
distribution of principal on each Distribution Date, to the extent of the       
portion of the Available Distribution Amount remaining after (i) distributions  
in respect of interest and principal to the holders of the Senior Certificates  
[and distributions of the Retained Yield], (ii) reimbursement for certain       
Advances to the Master Servicer and (iii) distributions in respect of interest  
to the holders of the Class M Certificates. Such principal distributions will be
made as to the Class M Certificates in the amounts described herein.            

  With respect to any Distribution Date on which the Certificate Principal
Balance of the most subordinate Class or Classes of Certificates then           
outstanding is to be reduced to zero and on which Realized Losses are to be     
allocated to such Class or Classes, the "Excess Subordinate Principal Amount" is
equal to the amount, if any, by which (i) the amount that would otherwise be    
distributable in respect of principal on such Class or                          

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Classes of Certificates on such Distribution Date is greater than (ii) the      
excess, if any, of the aggregate of the Certificate Principal Balance of such   
Class or Classes of Certificates immediately prior to such Distribution Date    
over the aggregate amount of Realized Losses to be allocated to such Class or   
Classes of Certificates on such Distribution Date.                              

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

The "Stated Principal Balance" of any Mortgage Loan as of any date of 
determination is equal to the principal balance thereof as of the Cut-off Date, 
after application of all scheduled principal payments due on or before the      
Cut-off Date, whether or not received, reduced by all amounts allocable to      
principal that have been distributed to Certificateholders with respect to such 
Mortgage Loan on or before such date, and as further reduced to the extent that 
Classes of Certificates on or before the date of determination.                 

  The Senior Percentage, which initially will equal approximately    % and
will in no event exceed 100%, will be adjusted for each Distribution Date to be 
the percentage equal to the aggregate Certificate Principal Balance of the      
Senior Certificates immediately prior to such Distribution Date divided by the  
aggregate Stated Principal Balance of all of the Mortgage Loans immediately     
prior to such Distribution Date. The Subordinate Percentage as of any date of   
determination is equal to 100% minus the Senior Percentage as of such date.     

  The Senior Accelerated Distribution Percentage for any Distribution Date
occurring during the first five years following the Delivery Date after the     
Delivery Date will equal 100%. Thereafter, the Senior Accelerated Distribution  
Percentage will be subject to gradual reduction as described in the following   
paragraph. This disproportionate allocation of certain unscheduled payments in  
respect of principal will have the effect of accelerating the amortization of   
the Senior Certificates while, in the absence of Realized Losses allocated to   
the Subordinate Certificates, increasing the proportionate interest in the Trust
Fund evidenced by the Subordinate Certificates. Increasing the proportionate    
interest of the Subordinate Certificates relative to that of the Senior         
Certificates is intended to preserve the availability of the subordination      
provided by the Subordinate Certificates.                                       

  The Senior Accelerated Distribution Percentage for any Distribution Date
occurring after the first five years will be as follows: for any Distribution   
Date falling in the sixth year after the Delivery Date, the Senior Percentage   
for such Distribution Date plus 70% of the Subordinate Percentage (as defined   
below) for such Distribution Date; for any Distribution Date falling in the     
seventh year after the Delivery Date, the Senior Percentage for such            
Distribution Date plus 60% of the Subordinate Percentage for such Distribution  
Date; for any Distribution Date falling in the eighth year after the Delivery   
Date, the Senior Percentage for such Distribution Date plus 40% of the          
Subordinate Percentage for such Distribution Date; for any Distribution Date    
falling in the ninth year after the Delivery Date, the Senior Percentage for    
such Distribution Date plus 20% of the Subordinate Percentage for such          
Distribution Date; and for any Distribution Date thereafter, the Senior         
Percentage for such Distribution Date (unless on any such Distribution Date the 
Senior Percentage exceeds the initial Senior Percentage, in which case the      
Senior Accelerated Distribution Percentage for such Distribution Date will once 
again equal 100%). The scheduled reductions in the Senior Accelerated           
Distribution percentage occurring in the sixth and subsequent years after the   
Delivery Date will be postponed on the Distribution Date on which such reduction
is scheduled to occur if certain criteria regarding the delinquency and loss    
experience of the Mortgage Loans are not met. See "SUBORDINATION" in the        
Prospectus.                                                                     

   On each Distribution Date occurring prior to the Credit Support Depletion
Date, (i) the product of (a) the Senior Principal Distribution Amount times (b) 
the Variable Strip Percentage (as defined below) will be distributed in         
reduction Certificates, and (ii) the excess of the Senior Principal Distribution
Amount over the amount described in clause (i) of Certificates as follows:      
first, concurrently to the Class A-1 and Class A-4 Certificates, with the amount
to be distributed allocated as between such Classes on a pro rata basis in      
proportion to the respective Certificate Principal Balances thereof, until the  
Certificate Principal Balance of each such Class is reduced to zero; second, to 
the Class A-2 Certificates until the Certificate Principal Balance              

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thereof is reduced to zero; and third, to the Class A-3 Certificates until the  
Certificate Principal Balance thereof is reduced to zero.                       

On each Distribution Date occurring on or after the Credit Support    
Depletion Date, all priorities relating to sequential distributions in respect  
of principal among the various Classes of Certificates will be disregarded, and 
the Senior Principal Distribution Amount will be distributed to all Classes of  
Certificates pro rata in accordance with their respective outstanding           
Certificate Principal Balances; provided, that the aggregate amount             
distributable to the Class A-1 and Class A-4 Certificates (the "Tiered          
Certificates") in respect of Accrued Certificate Interest thereof and in respect
of their pro rata portion of the Senior Principal Distribution Amount shall be  
distributed among the Tiered Certificates in the amounts and priority as        
follows: first to the Class A-1 Certificates, up to an amount equal to the      
Accrued Certificate Interest thereon; second to the Class A-1 Certificates, up  
to an amount equal to the Optimal Principal Distribution Amount thereof (as     
defined below) in reduction of the Certificate Principal Balance thereof; third 
to the Class A-4 Certificates, up to an amount equal to the Accrued Certificate 
Interest thereon; and fourth to the Class A-4 Certificates the remainder of the 
amount so distributable among the Tiered Certificates.                          

     The "Credit Support Depletion Date" is the first Distribution Date on which
the Senior Percentage equals 100%, with respect to any Distribution Date, the   
"Variable Strip Percentage" is equal to a fraction, expressed as a percentage,  
the numerator of which is the Certificate Principal Balance of the Variable     
Strip Certificates as of the Cut-off Date and the denominator of which is the   
aggregate Certificate Principal Balance of all Classes of Senior Certificates as
of the Cut-off Date. The "Optimal Principal Distribution Amount" is equal to the
product of (a) the then applicable Optimal Percentage and (b) the amounts       
described in clauses (i), (ii) and (iii) of the eighth preceding paragraph. The 
"Optimal Percentage" is equal to a fraction, expressed as a percentage, the     
numerator of which is the aggregate Certificate Principal Balance of the Class  
A-1 Certificates immediately prior to the applicable Distribution Date and the  
denominator of which is the aggregate Certificate Principal Balance of all      
Senior Certificates immediately prior to such Distribution Date.]               

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

[ALLOCATION OF LOSSES; SUBORDINATION                                            

Any Realized Losses which are not Excess Special Hazard Losses, Excess
Fraud Losses, Excess Bankruptcy Losses or Extraordinary Losses will be allocated
first to the Class B Certificates until the Certificate Principal Balance of the
Class B Certificates has been reduced to zero, then to the Class M Certificates 
until the Certificate Principal Balance of the Class M Certificates has been    
reduced to zero, and then except as provided below on a pro rata basis to the   
Senior Certificates based on their then outstanding Certificate Principal       
Balance or the Accrued Certificate Interest thereon, as applicable. Any         
allocation of a Realized Loss (other than a Debt Service Reduction) to a Senior 
Certificate will be made by reducing the Certificate Principal Balance thereof, 
in the case of the principal portion of such Realized Loss, and the Accrued     
Certificate Interest thereon, in the case of the interest portion of such       
Realized Loss, by the amount so allocated as of the Distribution Date occurring 
in the month following the calendar month in which such Realized Loss was       
incurred. Allocations of Realized Losses which are Default Losses (as defined   
below) to Senior Certificates will be made on a pro rata basis, based on their  
then outstanding Certificate Principal Balances, or the Accrued Certificate     
Interest thereon, as applicable, between the Tiered Certificates and the Class  
A-2, Class A-3 and Variable Strip Certificates. Any such Realized Losses so     
allocated to the Tiered Certificates will be allocated first to the Class A-4   
Certificates until the Certificate Principal Balance thereof is reduced to zero 
and then to the Class A-1 Certificates. "Default Losses" are Realized Losses    
that are attributable to the Mortgagor's failure to make any payment of         
principal or interest as required under the                                     

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Mortgage Note, and do not include Special Hazard Losses (or any other loss      
resulting from damage to a Mortgaged Property), Bankruptcy Losses, Fraud Losses,
or other losses of a type not covered by the Subordination. Allocations of Debt 
Service Reductions to the Subordinate Certificates will result from the priority
of distributions to the Senior Certificateholders of the Available Distribution 
Amount as described under the captions "Interest Distributions" and "Principal  
Distributions" herein. An allocation of the interest portion of a Realized Loss 
as well as the principal portion of Debt Service Reductions will not be treated 
as Subordination, as such term is defined herein, until an amount in respect    
thereof has been actually disbursed to the Senior Certificateholders or the     
Class M Certificateholders, as applicable. Any Excess Special Hazard Losses,    
Excess Fraud Losses, Excess Bankruptcy Losses, or the Class M                   
Certificateholders, as applicable Extraordinary Losses or other losses of a type
not covered by Subordination will be allocated on a pro rata basis among the    
Senior Certificates, [, the Retained Yield (in the case of the interest portion 
of any such Realized Losses)] and the Subordinate Certificates (any such which  
are allocated to the Senior Certificates will be allocated without priority     
among the various Classes of Senior Certificates).                              

 With respect to any defaulted Mortgage Loan that is finally liquidated,
through foreclosure sale, disposition of the related Mortgaged Property if      
acquired on behalf of the Certificateholders by deed in lieu of foreclosure, or 
otherwise, the amount of loss realized, if any, will equal the portion of the   
Stated Principal Balance remaining, if any, plus interest thereon through the   
last day of the month in which such Mortgage Loan was finally liquidated, after 
application of all amounts recovered (net of amounts reimbursable to the Master 
Servicer or any Subservicer for Advances and expenses; including attorneys'     
fees) towards interest and principal owing on the Mortgage Loan. Such amount of 
loss realized and any Special Hazard Losses, Fraud Losses and Bankruptcy Losses 
are referred to herein as "Realized Losses." As used herein, "Debt Service      
Reductions" means reductions in the amount of monthly payments due to certain   
bankruptcy proceedings, but does not include any forgiveness of principal.      

   In order to maximize the likelihood of distribution in full of the Senior
Interest Distribution Amount and the Senior Principal Distribution Amount,      
holders of Senior Certificates will have a prior right, on each Distribution    
Date, to the Available Distribution Amount, to the extent necessary to satisfy  
the Senior Interest Distribution Amount and the Senior Principal Distribution   
Amount. The Senior Principal Distribution Amount is subject to adjustment on    
each Distribution Date to reflect the then applicable Senior Percentage and the 
Senior Accelerated Distribution Percentage, as described herein under "Principal
Distributions," each of which may be increased (to not more than 100%) in the   
event of delinquencies or Realized Losses on the Mortgage Loans. The application
of the Senior Accelerated Distribution Percentage when it exceeds the Senior    
Percentage to determine the Senior Principal Distribution Amount, together with 
amounts, if any, paid on Senior Certificates in respect of Unrecovered Senior   
Portions, will accelerate the amortization of the Senior Certificates relative  
to the actual amortization of the Mortgage Loans. To the extent that the Senior 
Certificates are amortized faster than the Mortgage Loans, the percentage       
interest evidenced by the Senior Certificates in the Trust Fund will be         
decreased (with a corresponding increase in the interest in the Trust Fund      
evidenced by the Subordinate Certificates), thereby increasing, as a relative   
matter, the Subordination afforded by the Subordinate Certificates. Similarly,  
holders of Class A-1 Certificates will have a prior right, on each Distribution 
Date occurring on or after the Credit Support Depletion Date, to that portion of
the Available Distribution Amount allocated to the Tiered Certificates, to the  
extent necessary to satisfy the Accrued Certificate Interest on the Class A-1   
Certificates and the Optimal Principal Distribution Amount. Therefore, any      
shortfalls in the amounts that would otherwise be distributable to Class A-1    
Certificateholders, whether resulting from Mortgage Loan delinquencies or       
Realized Losses will be borne by the holders of the Class A-4 Certificates.     

  The total amount of Realized Losses which may be allocated solely to the
Subordinate Certificates through the operation of the subordination provisions  
described above ("Subordination") in connection with Special Hazard Losses (the 
"Special Hazard Amount") will equal $          less the sum of (A) any amounts  
allocated solely to the Subordinate Certificates through Subordination in       
respect of Special Hazard Losses and (B) the Adjustment Amount. The Adjustment  
Amount on each anniversary of the Cut-off Date will be equal to the amount, if  
any, by which the Special Hazard Amount, without giving effect to the deduction 
of the Adjustment Amount for such anniversary, exceeds the greater of (i) 1%    
(or, if greater than                                                            

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1%, the highest percentage of Mortgage Loans, by principal balance, in any      
California zip code area) times the aggregate principal balance of all of the   
Mortgage Loans in the Mortgage Pool on such anniversary and (ii) twice the      
principal balance of the single Mortgage Loan in the Mortgage Pool having the   
largest principal balance. As used in this Prospectus Supplement, "Special      
Hazard Losses" has the same meaning set forth in the Prospectus except that     
Special Hazard Losses will not include and the Subordination will not cover     
Extraordinary Losses and Special Hazard Losses will not exceed the lesser of the
cost of repair or replacement of the related Mortgaged Properties.              

The total amount of Realized Losses which may be allocated to the     
Subordinate Certificates in connection with Fraud Losses (the "Fraud Loss       
Amount") from Subordination shall initially be equal to $          . As of any  
date of determination after the Cut-off Date the Fraud Loss Amount shall equal  
(X) prior to the first anniversary of the Cut-off Date an amount equal to    %  
of the aggregate principal balance of all of the Mortgage Loans as of the       
Cut-off Date minus the aggregate amounts allocated solely to the Subordinate    
Certificates through Subordination with respect to Fraud Losses up to such date 
of determination, and (Y) from the first through fifth anniversary of the       
Cut-off Date, an amount equal to (1) the lesser of (a) the Fraud Loss Amount as 
of the most recent anniversary of the Cut-off Date and (b)    % of the aggregate
principal balance of all of the Mortgage Loans as of the most recent anniversary
of the Cut-off Date minus (2) the aggregate amounts allocated solely to the     
Subordinate Certificates through Subordination with respect to Fraud Losses     
since the most recent anniversary of the Cut-off Date up to such date of        
determination. After the fifth anniversary of the Cut-off Date the Fraud Loss   
Amount shall be zero and no allocation solely to the Subordinate Certificates   
through Subordination shall be made with respect to Fraud Losses.               

  The total amount of Realized Losses which may be allocated solely to the
Subordinate Certificates in connection with Bankruptcy Losses (the "Bankruptcy  
Amount") from Subordination will equal $          less the sum of any amounts   
allocated solely to the Subordinate Certificates through Subordination for such 
losses up to such date of determination. As of any day of determination on or   
after the first anniversary of the Cut-off Date, the Bankruptcy Amount will     
equal the excess, if any, of (1) the lesser of (a) the Bankruptcy Amount as of  
the business day next preceding the most recent anniversary of the Cut-off Date 
(the "Relevant Anniversary") and (b) the greater of (A) an amount calculated    
pursuant to the terms of the Pooling Agreement, which amount as calculated will 
provide for a reduction in the Bankruptcy Amount, if delinquency rates and      
losses on the Mortgage Loans do not exceed certain levels as set forth in the   
Pooling Agreement and (B) the excess of (i) the aggregate of all monthly        
payments on the largest Mortgage Loan in the Mortgage Pool secured by a         
non-primary residence over the remaining term of such Mortgage Loan over (ii)   
the aggregate of all monthly payments that would be made on such Mortgage Loan  
over such remaining term if the related Mortgage Rate were equal to 6% per      
annum, over (2) the aggregate amount of Bankruptcy Losses allocated solely to   
the Subordinate Certificate through Subordination since such anniversary.       

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

ADVANCES                                                                        

  Prior to each Distribution Date, the Master Servicer is required to make
Advances (out of its own funds, advances made by a Subservicer, or funds held in
the Custodial Account (as described in the Prospectus) for future distribution  
or withdrawal) with respect to any payments of principal and interest (net of   
the related Servicing Fees [and the Retained Yield]) which were due on the      
Mortgage Loans on the immediately preceding Due Date and delinquent on the      
business day next preceding the related Determination Date, but only if the     
Master Servicer believes that the amount advanced will be recoverable from      
related late collections,                                                       

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Insurance Proceeds [(including [draws on] [payments under] the [name of credit  
enhancement)] [or] [,] Liquidation Proceeds [or amounts otherwise payable to the
holders of the Subordinate Certificates].                                       

   The purpose of making such Advances is to maintain a regular cash flow to
the Certificateholders, rather than to guarantee or insure against losses. The  
Master Servicer will not be required to make any Advances with respect to       
reductions in the amount of the monthly payments on the Mortgage Loans due to   
Debt Service Reductions or the application of the Relief Act or similar         
legislation. Any failure by the Master Servicer to make an Advance as required  
under the Pooling Agreement will constitute an Event of Default thereunder, in  
which case the Trustee, as successor Master Servicer, will be obligated to make 
any such advance, in accordance with the terms of the Pooling Agreement.        

All Advances will be reimbursable to the Master Servicer on a first   
priority basis from [either (a)] late collections, Insurance Proceeds           
[(including [draws on] [payments under] the [name of credit enhancement)] and   
Liquidation Proceeds from the Mortgage Loan as to which such unreimbursed       
Advance was made [or (b) as to any Advance that remains unreimbursed following  
the final liquidation of the related Mortgage Loan, from amounts otherwise      
distributable on the Subordinate Certificates; provided however that only the   
Subordinate Percentage of such Advances are reimbursable from amounts otherwise 
distributable on the Subordinate Certificates in the event that such Advances   
were made with respect to delinquencies which ultimately were determined to be  
Excess Special Hazard Losses, Excess Fraud Losses, Excess Bankruptcy Losses or  
Extraordinary Losses and the Senior Percentage of such Advances which may not be
so reimbursed from amounts otherwise distributable on the Subordinate           
Certificates may be reimbursed to the Master Servicer out of any funds in the   
Custodial Account or Certificate Account prior to distributions on the Senior   
Certificates. In the latter event, the aggregate amount otherwise distributable 
on the Senior Certificates will be reduced by an amount equal to the Senior     
Percentage of such Advances.] In addition, [if the Certificate Principal Balance
of the Subordinate Certificates has been reduced to zero,] any Advances         
previously made which are deemed by the Master Servicer to be nonrecoverable    
from related late collections, Insurance Proceeds [(including [draws on]        
[payments under] the [name of credit enhancement])] and Liquidation Proceeds may
be reimbursed to the Master Servicer out of any funds in the Custodial Account  
or Certificate Account prior to distributions on the Senior Certificates.       

CERTAIN YIELD AND PREPAYMENT CONSIDERATIONS 

    The effective yield to the holders of [Offered] Certificates will be lower
than the yield otherwise produced by the applicable [Weighted Average           
Adjustable] Pass-Through Rate and purchase price because monthly distributions  
will not be made to such holders until the   th day (or if such day is not a    
business day, then on the next succeeding business day) of the month following  
the month in which interest accrues on the Mortgage Loans (without any          
additional distributions of interest or earnings thereon in respect of such     
delay). See "YIELD CONSIDERATIONS" in the Prospectus.                           

The yield to maturity and the aggregate amount of distributions on the
[Offered] Certificates will be directly related to the rate of payment of       
principal on the Mortgage Loans. Such yield may be adversely affected by a      
higher or lower than anticipated rate of payment of principal on the Mortgage   
Loans in the Trust Fund. The rate of payment of principal on such Mortgage Loans
will in turn be affected by the amortization schedules of the Mortgage Loans    
[(which will change periodically as described above)], the rate of principal    
prepayments thereon by the Mortgagors, liquidations of defaulted Mortgage Loans 
and purchases of Mortgage Loans due to certain breaches of representations [or  
the conversion of Convertible Mortgage Loans. The principal component of the    
monthly payments on the Mortgage Loans may change on each related Adjustment    
Date.] [The Mortgage Loans may be prepaid by the Mortgagors at any time without 
payment of any prepayment fee or penalty.] All of the Mortgage Loans contain    
due-on-sale clauses. In addition, the amortization schedule of a Mortgage Loan  
may be changed in connection with the receipt of a partial prepayment thereon,  
provided however that such changes will not include a change in the maturity    
date of the related Mortgage Loan. See "Description of the Mortgage             
Pool -- General" herein. [As described under "DESCRIPTION OF THE                
CERTIFICATES -- Principal Distributions" herein, all or a disproportionate      

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percentage of principal prepayments on the Mortgage Loans will be distributed to
the Senior Certificates during not less than the first nine years after the     
Delivery Date.]                                                                 

Factors affecting prepayment of mortgage loans include changes in     
mortgagors' housing needs, job transfers, mortgage market interest rates,       
unemployment, mortgagors' net equity in the mortgaged properties, changes in the
value of the mortgaged properties and servicing decisions. If prevailing        
mortgage rates fell significantly below the Mortgage Rates on the Mortgage      
Loans, the rate of prepayment (and refinancing) would be expected to increase.  
Conversely, if prevailing mortgage rates rose significantly above the Mortgage  
Rates on the Mortgage Loans, the rate of prepayment on the Mortgage Loans would 
be expected to decrease. There can be no certainty as to the rate of prepayments
on[, or conversions of,] the Mortgage Loans during any period or over the life  
of the Certificates.] [However, in the event that substantial numbers of        
Mortgagors exercise their conversion rights, and the Master Servicer [purchases]
[sells] the Converting and Converted Mortgage Loans, the Mortgage Pool will     
experience substantial prepayment of principal.]                                

[The yield to maturity on the Variable Strip Certificates and, in     
particular, on the Fixed Strip Certificates, which Classes are expected to be   
sold at substantial premiums, will be extremely sensitive to both the timing of 
receipt of prepayments and the overall rate of principal prepayments and        
defaults on the Mortgage Loans, which rate may fluctuate significantly from time
to time. The yield to maturity on the Fixed Strip Certificates is particularly  
sensitive to the rate of principal payments because the Certificate Principal   
Balance of the Fixed Strip Certificates is paid down on a pro rata basis with   
the Certificate Principal Balance of the Class A-1 Certificates and Class A-4   
Certificates before distributions to other Classes of Senior Certificates. The  
yields to investors on all of the Offered Certificates will also be adversely   
affected by any interest shortfalls of a type not covered by Subordination,     
including Net Prepayment Interest Shortfalls. In addition, holders of Variable  
Strip Certificates generally have rights to relatively larger portions of       
interest payments on Mortgage Loans with higher Mortgage Rates; thus, the yield 
on the Variable Strip Certificates will be materially adversely affected to a   
greater extent than on the other Senior Certificates if the Mortgage Loans with 
the higher Mortgage Rates prepay faster than the rate assumed by investors.     
There can be no assurance that the Mortgage Loans will prepay at any particular 
rate or that the cash flows on the Fixed Strip Certificates or Variable Strip   
Certificates will conform to the cash flows described herein. Investors in the  
Fixed Strip Certificates and Variable Strip Certificates should fully consider  
the associated risks, including the risk that a rapid rate of prepayments on the
Mortgage Loans could result in the failure of such investors to fully recover   
their investments.                                                              

     Because the Mortgage Rates on the Mortgage Loans and the Pass-Through Rates
on the Offered Certificates (other than the Variable Strip Certificates) are    
fixed, such rates will not change in response to changes in market interest     
rates. The Pass-Through Rate on the Variable Strip Certificates is based on the 
weighted average of the Pool Strip Rates on the Mortgage Loans, and such rates  
will also not change in response to changes in market interest rates.           
Accordingly, if market interest rates or market yields for securities similar to
the Offered Certificates were to rise, the market value of the Offered          
Certificates may decline. In addition, if prevailing mortgage rates fell        
significantly below the Mortgage Rates on the Mortgage Loans, the rate of       
prepayments (including refinancings) would be expected to increase. Conversely, 
if prevailing mortgage rates rose significantly above the Mortgage Rates on the 
Mortgage Loans, the rate of prepayment on the Mortgage Loans would be expected  
to decrease.                                                                    

 The rate of defaults on the Mortgage Loans will also affect the rate of
payment of principal on the Mortgage Loans. In general, defaults on mortgage    
loans are expected to occur with greater frequency in their early years. The    
rate of default on mortgage loans which are equity refinance mortgage loans may 
be higher than for other types of Mortgage Loans. Prepayments, liquidations and 
purchases of the Mortgage Loans will result in distributions to                 
Certificateholders of principal amounts which would otherwise be distributed    
over the remaining terms of the Mortgage Loans. Furthermore, the rate of        
prepayments, defaults and liquidations on the Mortgage Loans will be affected by
the general economic condition of the region of the country in which the related
Mortgaged Properties are located. The risk of delinquencies and loss is greater 
and prepayments are less likely in regions where a weak or deteriorating economy
exists, as may be evidenced by, among other factors, increasing unemployment or 
falling property values. See "MATURITY AND PREPAYMENT CONSIDERATIONS" in the    
Prospectus. Since the rates of payment of principal on the Mortgage Loans will  

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depend on future events and on a variety of factors (as described more fully    
herein and in the Prospectus under "YIELD CONSIDERATIONS" and "MATURITY AND     
PREPAYMENT CONSIDERATIONS"), no assurance can be given as to such rate or the   
rate of principal prepayments on the Certificates.                              

   [The periodic increase in the interest paid by the Mortgagor of a Buydown
Mortgage Loan during or at the end of the applicable Buydown Period may create a
greater financial burden for the Mortgagor, who might not have otherwise        
qualified for a mortgage under the applicable lender's underwriting guidelines, 
and may accordingly increase the risk of default with respect to the related    
Mortgage Loan. See "MORTGAGE LOAN PROGRAM -- Underwriting Standards" in the     
Prospectus.]                                                                    

 The amount of interest otherwise payable to holders of the Certificates
will be reduced by any interest shortfalls not covered by Subordination,        
including Net Prepayment Interest Shortfalls. Such shortfalls will not be offset
by a reduction in the Servicing Fees payable to the Master Servicer or          
otherwise. Net Prepayment Interest Shortfalls on any Distribution Date will be  
allocated [to] [among] the holders of [all Classes of] [the] Certificates       
[(including the Subordinate and Residual Certificates), in proportion to the    
respective amounts of accrued Certificate Interest for such Distribution Date on
each such Class] [pro rata based on distributions of interest to be made on such
Distribution Date]. See "YIELD CONSIDERATIONS" in the Prospectus and            
"DESCRIPTION OF THE CERTIFICATES -- Interest Distributions" for a discussion of 
the effect of principal prepayments on the Mortgage Loans on the yield to       
maturity of the Certificates and certain possible shortfalls in the collection  
of interest.                                                                    

The timing of changes in the rate of prepayments, liquidations and    
repurchases of the Mortgage Loans may significantly affect an investor's actual 
yield to maturity, even if the average rate of principal payments experienced   
over time is consistent with an investor's expectation. Because all or a        
disproportionate percentage of principal prepayments will be allocated to the   
Senior Certificates during not less than the first nine years after the Delivery
Date, the rate of prepayments on the Mortgage Loans during this period may      
significantly affect the yield to maturity of the Offered Certificates.         

   In addition, the yield to maturity of the Certificates will depend on the
price paid by the holders of the Certificates and the related Pass-Through Rate.
The extent to which the yield to maturity of a Certificate may vary from the    
anticipated yield thereon will depend upon the degree to which it is purchased  
at a discount or premium and the degree to which the timing of payments thereon 
is sensitive to prepayments. Because principal distributions are paid to certain
Classes of Offered Certificates before other Classes, holders of Classes of     
Offered Certificates having a later priority of payment bear a greater risk of  
losses than holders of Classes of Offered Certificates having earlier priorities
for distribution of principal. In addition, the Class A-4 Certificates bear a   
greater risk of losses than the other Tiered Certificates because Default Losses
on the Mortgage Loans not covered by the Subordination which are allocated to   
the Tiered Certificates are allocated first to the Class A-4 Certificates prior 
to allocation to the Class A-1 Certificates to the extent described herein. For 
additional considerations relating to the yield on the Certificates, see YIELD  
CONSIDERATIONS" and "MATURITY AND PREPAYMENT CONSIDERATIONS" in the Prospectus. 

The assumed final Distribution Date with respect to each Class of     
Certificates is             , 20  . The assumed final Distribution Date is the  
Distribution Date immediately following the latest scheduled maturity date of   
any Mortgage Loan in the Mortgage Pool.                                         

     Weighted average life refers to the average amount of time that will elapse
from the date of issuance of a security until a dollar amount in payment of     
principal equal to the original principal balance of such security (less losses)
is distributed to the investor. The weighted average life of the Certificates   
will be influenced by among other things, the rate at which principal of the    
Mortgage Loans is paid, which may be in the form of scheduled amortization,     
prepayments or liquidations.                                                    

Prepayments on mortgage loans are commonly measured relative to a     
prepayment standard or model. The model used in this Prospectus Supplement, the 
standard prepayment assumption ("SPA"), represents an assumed rate of prepayment
each month relative to the then outstanding principal balance of a pool of new  
mortgage loans. A prepayment assumption of 100% SPA assumes constant prepayment 
rates of 0.2% per annum of the then outstanding principal balance of such       
mortgage loans in the first month of the life of the                            

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mortgage loans and an additional 0.2% per annum in each month thereafter until  
the thirtieth month. Beginning in the thirtieth month and in each month         
thereafter during the life of the mortgage loans, 100% SPA assumes a constant   
prepayment rate of 6% per annum each month. As used in the table below, "0% SPA"
assumes prepayment rates equal to 0% of SPA. Correspondingly,    % SPA" assumes 
prepayment rates equal to    % of SPA, and so forth. SPA does not purport to be 
a historical description of prepayment experience or a prediction of the        
anticipated rate of prepayment of any pool of mortgage loans, including the     
Mortgage Loans.                                                                 

 The table set forth below has been prepared on the basis of assumptions
regarding the characteristics of the Mortgage Loans and of the Certificates as  
follows: (i) as of the date of issuance of the Certificates, the aggregate      
principal balance of the Mortgage Loans is approximately $          and each    
Mortgage Loan has a Mortgage Rate of    %, an original term of   months, a      
remaining term to maturity of   months, and a related Servicing Fee of    %,    
(ii) the scheduled monthly payment for each Mortgage Loan has been based on its 
outstanding balance, interest rate and remaining term to maturity, such that the
Mortgage Loan will amortize in amounts sufficient for repayment thereof by its  
remaining term to maturity, (iii) in the aggregate, the Senior Certificates     
represent an initial interest of    % in the Mortgage Loans, (iv) the Senior    
Certificates will have the following Pass-Through Rates and initial Certificate 
Principal Balances as of the Cut-off Date; Class A-1,    %, $          ; Class  
A-2,    %, $          , Class A-3,    %, $          , Class A-4,    %,          
$          , Class A-5,    %, $          (v) the Subordinate Certificates       
represent an initial interest of    % in the Mortgage Loans, have a Pass-Through
Rate of    % and have an initial Certificate Principal Balance of approximately 
$          , (vi) the Seller, the Master Servicer or the Depositor will not     
repurchase any Mortgage Loan, as described under "MORTGAGE LOAN                 
PROGRAM -- Representations by Sellers" and "DESCRIPTION OF THE                  
CERTIFICATES -- Assignment of the Mortgage Loans" in the Prospectus, and the    
Master Servicer and the Depositor will not exercise their options to purchase   
the Mortgage Loans and thereby cause a termination of the Trust Fund, (vii)     
there are no delinquencies and principal payments on the Mortgage Loans will be 
timely received at the respective percentages of SPA set forth in the table,    
(viii) there is no Net Prepayment Interest Shortfall or any other interest      
shortfall in any month, (ix) and (x) there are no additional ongoing Trust Fund 
expenses payable out of the Trust Fund. SOME OF THE FOREGOING ASSUMPTIONS       
REGARDING THE CHARACTERISTICS OF THE MORTGAGE LOANS AND THE CERTIFICATES DIFFER 
FROM THE ACTUAL CHARACTERISTICS THEREOF.                                        

   The discrepancies between the assumptions used in constructing the tables
and the actual characteristics of the Mortgage Loans and the Certificates       
underscore the hypothetical nature of the table beginning on page S-  , which is
provided to give a general sense of principal cash flows under varying          
prepayment scenarios. Likewise, it is very unlikely that the Mortgage Loans will
prepay at a constant level of SPA until maturity or that all of the Mortgage    
Loans will prepay at the same level of SPA. Any difference between such         
assumptions and the actual characteristics of the Mortgage Loans or of the      
Certificates, or the actual prepayment experience of the Mortgage Loans may     
result in percentages of the initial Certificate Principal Balance outstanding  
and weighted average lives of the Classes of Senior Certificates different from 
those shown. Moreover, the diverse remaining terms to maturity of the Mortgage  
Loans could produce slower or faster principal distributions than indicated in  
the table at the various constant percentages of SPA specified, even if the     
weighted average remaining term to maturity of the Mortgage Loans is   months.  

The assumed Pass-Through Rate on the Fixed Strip Certificates was     
calculated to be approximately equal to (i) the excess, as of the Cut-off Date, 
of (a)    % aggregate assumed Certificate Principal Balances of the Tiered      
Certificates, over (b) the sum of (1)    % of the assumed Certificate Principal 
Balance of the Class A-1 Certificates and (2)    % of the assumed Certificate   
Principal Balance of the Class A-4 Certificates divided by (ii) the assumed     
Certificate Principal Balance of the Fixed Strip Certificates.                  

 Based upon the foregoing assumptions, the following table indicates the
projected weighted average life of each Class of Senior Certificates and sets   
forth the percentages of the initial Certificate Principal Balance of each such 
Class of Senior Certificates that would be outstanding after each of the dates  
shown at various percentages of SPA.                                            

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PERCENT OF INITIAL CERTIFICATE PRINCIPAL BALANCE
OUTSTANDING AT THE FOLLOWING PERCENTAGES OF SPA 

                                                        [Enlarge/Download Table]

                                     CLASS A-1                         CLASS A-2                         CLASS A-3            
                          -------------------------------   -------------------------------   ------------------------------- 
                                                                                                                              
DISTRIBUTION DATE........    %      %      %      %      %     %      %      %      %      %     %      %      %      %      %
Initial Percentage.......                                                                                                     

---------------                                                                 
Weighted Average Life in Years (**) . . . .                                     

*  Indicates a number that is greater than zero but less than .5%.              

** The weighted average life of a Certificate of any Class is determined by (i) 
multiplying the amount of each distribution in reduction of Certificate   
Principal Balance by the number of years from the date of issuance of the 
Certificate to the related Distribution Date, (ii) adding the results, and
(iii) dividing the sum by the initial Certificate Principal Balance of the
Certificate.                                                              

FIXED STRIP CERTIFICATES AND VARIABLE STRIP CERTIFICATES YIELD CONSIDERATIONS   

 The following tables indicate the sensitivity of the yield on the Fixed
Strip Certificates and Variable Strip Certificates to various rates of          
prepayment by projecting the monthly aggregate payments of principal and        
interest on the Fixed Strip Certificates and Variable Strip Certificates and the
corresponding pre-tax yields on a corporate bond equivalent basis, based on     
distributions being made on the Mortgage Loans that are assumed to be included  
in the Trust Fund, as described in the assumptions stated in clauses (i) through
(x) of the fourth paragraph preceding the table commencing on page S-           
(including the assumptions regarding the characteristics of the Mortgage Loans  
and the Certificates, which differ in certain respects from the actual          
characteristics thereof), and assuming, further, that (i) principal prepayments 
on the Mortgage Loans will be received at the respective percentages of SPA set 
forth in the following table, (ii) the Certificates will be purchased on        
      , 19  , and (iii) payments on the Fixed Strip Certificates and the
Variable Strip Certificates will be received on the   th Day of each month,     
commencing           , 19  .                                                    

PRE-TAX YIELD TO MATURITY ON THE FIXED STRIP CERTIFICATES 
AND THE VARIABLE STRIP CERTIFICATES AT THE FOLLOWING PERCENTAGES OF SPA 

                                                        [Enlarge/Download Table]

                                                              FIXED STRIP CERTIFICATES       
                                                         ----------------------------------- 
                                                                                             
Assumed Purchase Price..................................    %       %       %       %       %

                                                        [Enlarge/Download Table]

                                                             VARIABLE STRIP CERTIFICATES     
                                                         ----------------------------------- 
                                                                                             
Assumed Purchase Price..................................    %       %       %       %       %

The pre-tax yield set forth in the preceding tables were calculated by
determining the monthly discount rates which, when applied to the assumed       
streams of cash flows to be paid on the Fixed Strip Certificates and Variable   
Strip Certificates, would cause the discounted present value of such assumed    
streams of cash flows to equal the assumed purchase prices listed as percentages
of the original Certificate Principal Balances in the table for the Fixed Strip 
Certificates and Variable Strip Certificates, respectively. Yields shown are    
corporate bond equivalent and are based on the assumed prices given in the      
tables. The prices shown do not include accrued interest but an amount of       
accrued interest consistent with the assumptions was computed and was used to   
arrive at these yields. Implicit in the use of any discounted present value or  
internal rate of return calculation such as these in the assumption that cash   
flows are reinvested at the discount rate or internal rate of return. Thus,     
these calculations do not take into account the different interest rates at     
which investors may be able to reinvest funds received by them as distributed on
the Fixed Strip Certificates or Variable Strip Certificates. Consequently these 
yields do not purport to reflect the return on any investment in the Fixed Strip
Certificates or Variable Strip Certificates when such reinvestment rates are    
considered.                                                                     

     The preceding tables are based on a set of assumptions that vary from other
information provided herein. The differences between such assumptions and the   
actual characteristics of the Mortgage Loans and of the Certificates may result 
in actual yields being different from those shown in such tables. For example,  
the Pass-                                                                       

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Through Rate on the Fixed Strip Certificates is chosen to be approximately      
equivalent to the formula given in the second paragraph immediately preceding   
the table entitled "Percent of Initial Certificate Principal Balance            
Outstanding." This formula references various Certificate Principal Balances for
the purposes of making the computations for the subsequent tables. The actual   
Pass-Through Rate computed by applying the formula using actual Certificate     
Principal Balances may vary from these assumptions. Likewise, the Pass-Through  
Rate on the Variable Strip Certificates, which is assumed to be fixed throughout
the life of the Certificates, will actually be likely to change from one period 
to the next, and the rate assumed may be different from the actual initial      
Pass-Through Rate on the Variable Strip Certificates. Such discrepancies between
assumed and actual characteristics underscore the hypothetical nature of the    
tables, which are provided to give a general sense of the sensitivity of yields 
in varying prepayment scenarios.                                                

 Notwithstanding the assumed prepayment rates reflected in the preceding
table, it is highly unlikely that the Mortgage Loans will prepay at a constant  
rate until maturity or that all of the Mortgage Loans will be prepaid according 
to one particular pattern. For this reason, and because the timing of cash flows
is critical to determining yields, the pre-tax yields on the Fixed Strip        
Certificates and Variable Strip Certificates are likely to differ from those    
shown in such table, even if all of the Mortgage Loans prepay at the indicated  
percentages of SPA over any given time period or over the entire life of the    
Certificates. No representation is made as to the actual rate of principal      
payment on the Mortgage Loans for any period or over the life of the            
Certificates or as to the yield on the Certificates. In addition, the various   
remaining terms to maturity of the Mortgage Loans could produce slower or faster
principal distributions than indicated in the preceding tables at the various   
constant percentages of SPA specified, even if the weighted average remaining   
term to maturity of the Mortgage Loans is months. Investors are urged to make   
their investment decisions based on their determinations as to anticipated rates
of prepayment under a variety of scenarios.                                     

  [Certain of the Mortgage Loans provide that the Mortgagors may, during a
specified period of time, convert the adjustable rate of such Mortgage Loans to 
a fixed rate. The Depositor is not aware of any publicly available statistics   
that set forth principal prepayment or conversion experience or prepayment or   
conversion forecasts of adjustable rate mortgage loans over an extended period  
of time, and its experience with respect to adjustable rate mortgages is        
insufficient to draw any conclusions with respect to the expected prepayment or 
conversion rates on the adjustable rate Mortgage Loans included in the Mortgage 
Pool. The rate of payments (including prepayments) on pools of mortgage loans is
influenced by a variety of economic, geographic, social and other factors. As is
the case with conventional fixed rate mortgage loans, adjustable rate mortgage  
loans may be subject to a greater rate of principal prepayments or purchases due
to their conversion to fixed interest rate loans in a low interest rate         
environment. For example, if prevailing interest rates fall significantly,      
adjustable rate mortgage loans could be subject to higher prepayment and        
conversion rates than if prevailing interest rates remain constant because the  
availability of fixed rate or other adjustable rate mortgage loans at           
competitive interest rates may encourage Mortgagors to refinance their          
adjustable rate mortgages to "lock in" a lower fixed interest rate or take      
advantage of the availability of such other adjustable rate mortgage loans, or, 
in the case of convertible adjustable rate mortgage loans, to exercise their    
option to convert the adjustable interest rates to fixed interest rates. The    
conversion feature may also be exercised in a rising interest rate environment  
as Mortgagors attempt to limit their risk of higher rates. Such a rising        
interest rate environment may also result in an increase in the rate of defaults
on the Mortgage Loans. In the event that the Master Servicer [purchases] [sells]
Converting or Converted Mortgage Loans, a Mortgagor's exercise of the conversion
option will result in a pro rata distribution of the principal portion thereof  
to the Certificateholders, as described herein. Alternatively, to the extent the
Master Servicer fails in its obligation to [purchase] [sell] Converting Mortgage
Loans, as described herein, the Mortgage Pool will include fixed rate Mortgage  
Loans, which will have the effect of limiting the extent to which the Weighted  
Average Adjustable Pass-Through Rate can increase or decrease in accordance with
changes in the Index and accordingly may affect the yield to                    
Certificateholders.]                                                            

  The existence of Periodic Rate Caps, Lifetime Rate Caps and any Lifetime
Rate Floors also will affect the likelihood of prepayments resulting from       
refinancing and the exercise of the conversion option. Although the Mortgage    
Rates on the Mortgage Loans will adjust periodically, such increases and        
decreases will be limited by the Periodic Rate Caps, Lifetime Rate Caps and any 
Lifetime Rate Floors on each Mortgage Loan                                      

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and will be based on the Index (which may not rise and fall consistently with   
mortgage interest rates) plus the related Note Margins (which may be different  
from the prevailing margins on other mortgage loans). As a result, the Mortgage 
Rates on the Mortgage Loans at any time may not equal the prevailing rates for  
other adjustable rate loans and accordingly, the rate of prepayment may be lower
or higher than would otherwise be anticipated.                                  

With respect to those Mortgage Loans having Lifetime Rate Floors, if  
prevailing mortgage rates were to fall below the minimum Mortgage Rates, the    
rate of prepayment on such Mortgage Loans may be expected to increase and such  
Mortgage Loans may prepay at a rate higher than would otherwise be anticipated  
for adjustable rate mortgage loans.                                             

    All of the Mortgage Loans are assumable under certain circumstances if, in
the sole judgment of the Master Servicer or any applicable Subservicer, the     
prospective purchaser of a Mortgaged Property is creditworthy and the security  
for such Mortgage Loan is not impaired by the assumption. The extent to which   
the Mortgage Loans are assumed by purchasers of the Mortgaged Properties rather 
than prepaid by the related mortgagors in connection with the sales of the      
Mortgaged Properties will affect the weighted average life of the Certificates  
and may result in a prepayment experience on the Mortgage Loans that differs    
from that on other conventional mortgage loans.                                 

The yield to maturity of the Certificates will depend on the rate of  
payment of principal (including principal prepayments, purchases of Mortgage    
Loans which are Converting Mortgage Loans or Converted Mortgage Loans or in     
respect of which a breach of a representation or warranty has occurred, and     
liquidation of defaulted Mortgage Loans) on the Mortgage Loans, the price paid  
by the holders of Certificates and the Weighted Average Adjustable Pass-Through 
Rate in effect from time to time. Such yield may be adversely affected by a     
higher or lower than anticipated rate of prepayments on the Mortgage Loans.     
Because the Weighted Average Adjustable Pass-Through Rate at any time is the    
weighted average of the Net Mortgage Rates on the Mortgage Loans, the Weighted  
Average Adjustable Pass-Through Rate (and the yield on the Certificates) will be
reduced as a result of prepayments, liquidations and purchases at a faster rate 
for Mortgage Loans having higher Net Mortgage Rates as opposed to Mortgage Loans
having lower Net Mortgage Rates. Because Mortgage Loans having higher Net       
Mortgage Rates generally have higher Mortgage Rates, such Mortgage Loans are    
generally more likely to be prepaid at a faster rate under most circumstances   
than are Mortgage Loans having lower Net Mortgage Rates.                        

The rate of default on the Mortgage Loans will also affect the rate of
payment of principal on the Mortgage Loans. In general, defaults on mortgage    
loans are expected to occur with greater frequency in their early years,        
although little data is available with respect to the rate of default on        
adjustable rate mortgage loans. Increases in the monthly payments to an amount  
in excess of the preceding monthly payment required at the time of origination  
may result in a default rate higher than that on level payment mortgage loans.  
Furthermore, the Mortgagor under each Mortgage Loan was qualified on the basis  
of the Mortgage Rate in effect at origination. The repayment of such Mortgage   
Loans will be dependent on the ability of the Mortgagor to make larger monthly  
payments following adjustments of the Mortgage Rate. The rate of default on     
Mortgage Loans which are equity refinance mortgage loans may be higher than for 
other types of Mortgage Loans.                                                  

   Prepayments, liquidations and purchases of the Mortgage Loans will result
in distributions to Certificateholders of principal amounts which would         
otherwise be distributed over the remaining terms of the Mortgage Loans.        
Furthermore, the rate of prepayments, defaults and liquidations on, or          
conversions of, the Mortgage Loans will be affected by the general economic     
condition of the region of the country where the related Mortgaged Properties   
are located. The risk of delinquencies and loss is greater and prepayments are  
less likely in regions where a weak or deteriorating economy exists, as may be  
evidenced by increasing unemployment or falling property values. See "MATURITY  
AND PREPAYMENT CONSIDERATIONS" in the Prospectus. Since the rates of payment of 
principal on the Mortgage Loans will depend on future events and a variety of   
factors (as described more fully herein and in the Prospectus under "YIELD      
CONSIDERATIONS" and "MATURITY AND PREPAYMENT CONSIDERATIONS"), no assurance can 
be given as to such rate or the rate of principal prepayments on the            
Certificates.                                                                   

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    [The amount of interest passed through to holders of the Certificates will
be reduced by shortfalls in collections of interest resulting from full or      
partial principal prepayments or otherwise, which will not be offset by a       
reduction in the Servicing Fees payable to the Master Servicer or otherwise. See
"YIELD CONSIDERATIONS" in the Prospectus and "DESCRIPTION OF THE                
CERTIFICATES -- Distributions" herein for a discussion of the effect of         
principal prepayments on the Mortgage Loans on the yield to maturity of the     
Certificates.]                                                                  

The timing of changes in the rate of prepayments, liquidations and    
repurchases of the Mortgage Loans may significantly affect an investor's actual 
yield to maturity, even if the average rate of principal payments experienced   
over time is consistent with an investor's expectation.                         

   In addition, the yield to maturity of the Certificates will depend on the
price paid by holders of the Certificates. If any Certificate is purchased at   
initial issuance at a discount and the rate of prepayments on the Mortgage Loans
is lower than that originally anticipated, the purchaser's yield to maturity    
will be lower than that assumed at the time of purchase. Conversely, if any     
Certificate is purchased at initial issuance at a premium and the rate of       
prepayments on the Mortgage Loans is higher than that originally anticipated,   
the purchaser's yield to maturity will be lower than that assumed at the time of
purchase.                                                                       

    The first distribution on the Certificates reflecting an adjustment to the
scheduled monthly payments on a related Mortgage Loan will be passed through to 
holders of Certificates on the second Distribution Date following the date on   
which the adjustment to such Mortgage Rate was made. Furthermore, adjustments in
the Net Mortgage Rates are based on the Index as reported      days prior to the
Adjustment Date. Accordingly, the yield to Certificateholders will be adjusted  
on a delayed basis relative to movements in the Index. Although the Net Mortgage
Rate of each Mortgage Loan will be adjusted pursuant to the Index, such rate is 
subject to the Periodic Rate Cap and is also limited by the Lifetime Rate Cap   
and any Lifetime Rate Floor applicable to such Mortgage Loan. With respect to   
certain Mortgage Loans the difference between the Net Mortgage Rate as of the   
Cut-off Date and the maximum Net Mortgage Rate will be less than the Lifetime   
Rate Cap. Therefore, if the Index changes substantially between Adjustment      
Dates, the Net Mortgage Rate may be lower than if the Net Mortgage Rate could be
adjusted based on the Index without such caps.                                  

   A number of factors affect the performance of the Index and may cause the
Index to move in a manner different from other indices. To the extent that the  
Index may reflect changes in the general level of interest rates less quickly   
than other indices, in a period of rising interest rates, increases in the yield
to Certificateholders due to such rising interest rates may occur later than    
that which would be produced by other indices, and in a period of declining     
rates, the Index may remain higher than other market interest rates which may   
result in a higher level of prepayments of Mortgage Loans which adjust in       
accordance with the Index than mortgage loans which adjust in accordance with   
other indices.]                                                                 

  For additional considerations relating to the yield on the Certificates,
see "YIELD CONSIDERATIONS" and "MATURITY AND PREPAYMENT CONSIDERATIONS" in the  
Prospectus.                                                                     

[YIELD CONSIDERATIONS RELATING TO THE CLASS M CERTIFICATES                      

    The following tables indicate the sensitivity of the yields to maturity on
the Class M Certificates to various rates of prepayment and varying levels of   
aggregate Realized Losses by projecting the monthly aggregate cash flows on the 
Class M Certificates and computing the corresponding pre-tax yields to maturity 
on a corporate bond equivalent basis. The tables are based on the assumptions   
described in the fourth paragraph preceding the table entitled "Percent of      
Initial Certificate Principal Balance Outstanding at the Following Percentages  
of SPA" under the heading "CERTAIN YIELD AND PREPAYMENT                         
CONSIDERATIONS -- General" herein, including the assumptions regarding the      
characteristics and performance of the Mortgage Loans, which differ from the    
actual characteristics and performance thereof, and assuming further that (i)   
defaults and final liquidations occur on the last day of each month at the      
respective SDA percentages set forth in the tables, (ii) each liquidation       
results in a Realized Loss allocable to principal equal to the percentage       
indicated (the "Loss Severity Percentage") times the principal balances of the  
Mortgage Loans assumed to be liquidated, (iii) there are no delinquencies on the
Mortgage Loans, and principal                                                   

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payments on the Mortgage Loans (other than those on Mortgage Loans assumed to be
liquidated) will be timely received together with prepayments, if any, at the   
respective constant percentages of SPA set forth in the tables before giving    
effect to defaults in such periods, (iv) there are no Excess Special Hazard     
Losses, Excess Fraud Losses, Excess Bankruptcy Losses or Extraordinary Losses,  
and (v) the purchase prices of the Class M Certificates will be $          ,    
including accrued interest. Investors should also consider the possibility that 
aggregate losses incurred may not in fact be materially reduced by higher       
prepayment speeds because mortgage loans that would otherwise ultimately default
and be liquidated may be less likely to be prepaid. Any differences between such
assumptions and the actual characteristics and performance of the Mortgage Loans
and of the Certificates may result in yields different from those shown in such 
tables. Discrepancies between assumed and actual characteristics and performance
underscore the hypothetical nature of the tables, which are provided only to    
give a general sense of the sensitivity of yields in varying Realized Loss and  
prepayment scenarios.                                                           

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

CLASS M CERTIFICATES

                                                        [Enlarge/Download Table]

PERCENTAGE OF                                                                                          
     SDA            LOSS SEVERITY PERCENTAGE                        PERCENTAGE OF SPA                  
-------------  -----------------------------------  -------------------------------------------------- 
                                                                                                       
        %      N/A................................        %          %          %          %          %
        %      %..................................        %          %          %          %          %
        %      %..................................        %          %          %          %          %
        %      %..................................        %          %          %          %          %

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

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

                                                        [Enlarge/Download Table]

                                                                AGGREGATE REALIZED LOSSES              
                                                    -------------------------------------------------- 
PERCENTAGE OF                                                                                          
     SDA            LOSS SEVERITY PERCENTAGE                        PERCENTAGE OF SPA                  
-------------  -----------------------------------  -------------------------------------------------- 
                                                                                                       
        %      %..................................        %          %          %          %          %
        %      %..................................        %          %          %          %          %
        %      %..................................        %          %          %          %          %
        %      %..................................        %          %          %          %          %

   Notwithstanding the assumed Percentages of SDA, Loss Severity Percentages
and prepayment rates reflected in the preceding tables, it is highly unlikely   
that the Mortgage Loans will be prepaid or that Realized Losses will be incurred
according to one particular pattern. For this reason, and because the timing of 
cash flows is critical to determining yields, the pre-tax yields to maturity on 
the Class M Certificates are likely to differ from those shown in the tables.   
There can be no assurance that the Mortgage Loans will prepay at any particular 
rate or that Realized Losses will be incurred at any particular level or that   
the yields on the Class M Certificates will conform to the yields described     
herein. Moreover, the various remaining terms to maturity of the Mortgage Loans 
could produce slower or faster principal distributions than indicated in the    
preceding                                                                       

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tables at the various constant percentages of SPA specified, even if the        
weighted average remaining term to maturity of the Mortgage Loans is as         
assumed.]                                                                       

POOLING AGREEMENT 

GENERAL                                                                         

The Certificates will be issued pursuant to a Pooling and Servicing   
Agreement (the "Pooling Agreement") dated as of             , 19  , among the   
Depositor, the Master Servicer and the Trustee. Reference is made to the        
Prospectus for important information additional to that set forth herein        
regarding the terms and conditions of the Pooling Agreement and the [Offered]   
Certificates. [The Trustee will appoint                         to serve as     
Custodian in connection with the Certificates]. The [Offered] Certificates will 
be transferable and exchangeable at the corporate trust office of the Trustee,  
which will serve as Certificate Registrar and Paying Agent. The Depositor will  
provide a prospective or actual Certificateholder without charge, on written    
request, a copy (without exhibits) of the Pooling Agreement. Requests should be 
addressed to BA Mortgage Securities, Inc., 345 Montgomery Street, Lower Level   
#2, Unit #8152, San Francisco, California, 94104, Attention: Rebecca Cull.      

THE MASTER SERVICER                                                             

  Bank of America, FSB, the corporate parent of the Depositor, will act as
master servicer for the Certificates pursuant to the Pooling Agreement. For a   
general description of Bank of America, FSB and its activities, as well as      
certain information regarding its delinquency, foreclosure and loss experience  
on the portfolio of one- to four-family first mortgage loans owned by Affiliated
Sellers and serviced or subserviced by it, see "MORTGAGE LOAN PROGRAM -- Bank of
America, FSB," "-- Residential Mortgage Loan Servicing Activities" and          
"-- Delinquency, Foreclosure and Loss Experience" in the Prospectus.            

SERVICING AND OTHER COMPENSATION AND PAYMENT OF EXPENSES[; RETAINED YIELD]      

   The Servicing Fees for each Mortgage Loan are payable out of the interest
payments on such Mortgage Loan. The Servicing Fees in respect of each Mortgage  
Loan will be at least    % and not more than    % per annum of the outstanding  
principal balance of each Mortgage Loan. The Servicing Fees consist of (a)      
servicing compensation payable to any Master Servicer in respect of its master  
servicing activities, and (b) subservicing and other related compensation       
payable to any Subservicer (including such compensation paid to the Master      
Servicer as the direct servicer of a Mortgage Loan for which there is no        
Subservicer). The primary compensation to be paid to the Master Servicer in     
respect of its master servicing activities will be    % per annum of the        
outstanding principal balance of each Mortgage Loan (the "Master Servicing      
Fee"). As described more fully in the Prospectus, a Subservicer, or the Master  
Servicer if it is the direct servicer of a Mortgage Loan, is entitled to        
servicing compensation in a minimum amount equal to    % per annum of the       
outstanding principal balance of each Mortgage Loan serviced by it (the "Primary
Servicing Fee"). The Master Servicer is obligated to pay certain ongoing        
expenses associated with the Trust Fund and incurred by the Master Servicer in  
connection with its responsibilities under the Pooling Agreement[, including the
expenses of the [name of credit enhancement] and any substitute credit support].
See "THE POOLING AGREEMENT -- Servicing and Other Compensation and Payment of   
Expenses; Retained Yield" in the Prospectus for information regarding other     
possible compensation to the Master Servicer and Subservicers and for           
information regarding expenses payable by the Master Servicer.                  

   [Pursuant to the terms of the Pooling Agreement, the Master Servicer will
be obligated to remit to the Depositor or its designee, a portion of the        
interest collected on each Mortgage Loan (the "Retained Yield"). The rate at    
which the Retained Yield on each Mortgage Loan accrues will be equal to    % per
annum.]                                                                         

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TERMINATION                                                                     

The circumstances under which the obligations created by the Pooling  
Agreement will terminate in respect of the Certificates are described in "THE   
POOLING AGREEMENT -- Termination; Retirement of Certificates" in the Prospectus.
The Master Servicer or the Depositor will have the option to purchase all       
remaining Mortgage Loans and other assets in the Trust Fund, thereby effecting  
early retirement of the Certificates, but such option will not be exercisable   
until such time as the aggregate principal balance of the Mortgage Loans as of  
the Distribution Date on which the purchase proceeds are to be distributed to   
the Certificateholders is less than [5] [10]% of the aggregate principal balance
of the Mortgage Loans as of the Cut-off Date. Any such purchase of Mortgage     
Loans and other assets of the Trust Fund shall be made at a price equal to the  
sum of (a) 100% of the unpaid principal balance of each Mortgage Loan (or the   
fair market value of the related underlying Mortgaged Properties with respect to
defaulted Mortgage Loans as to which title to such Mortgaged Properties has been
acquired if such fair market value is less than such unpaid principal balance)  
(net of any unreimbursed Advance attributable to principal) plus (b) accrued    
interest thereon at the [Net] [Weighted Average Pass-Through] Rate to, but not  
including, the first day of the month of repurchase.                            

    Upon presentation and surrender of the Certificates in connection with the
termination of the Trust Fund under the circumstances described above, the      
holders of [each Class of Offered][the] Certificates will receive[, in          
proportion to their respective Percentage Interests, an amount equal to the sum 
of the principal balances of the Mortgage Loans plus one month's accrued        
interest thereon at the then applicable Weighted Average Adjustable Pass-Through
Rate.] [An amount equal to the Certificate Principal Balance of such Class plus 
one month's interest thereon (or with respect to the Variable Strip             
Certificates, one month's interest on the Notional Amount) at the applicable    
Pass-Through Rate plus any previously unpaid Accrued Certificate Interest.] An  
amount equal to the Certificate Principal Balance of such Class plus one month's
interest thereon (or with respect to the Variable Strip Certificates, one       
month's interest on the Notional Amount) at the applicable Pass-Through Rate    
plus any previously unpaid Accrued Certificate Interest.]                       

[DESCRIPTION OF CREDIT ENHANCEMENT

GENERAL                                                                         

All of the Mortgage Loans are the subject of credit support coverage  
provided by the [name of credit enhancement]. In addition, each Mortgage Loan is
covered by a Primary Hazard Insurance Policy as described under "PRIMARY        
MORTGAGE INSURANCE, HAZARD INSURANCE; CLAIMS THEREUNDER" in the Prospectus. See 
also "DESCRIPTION OF THE MORTGAGE POOL -- Primary Mortgage Insurance" herein.]  

[Description of types and amounts of losses covered by any applicable 
credit enhancement, procedures and conditions to filing claims or making draws  
under any applicable credit enhancement, any rights of the Master Servicer to   
substitute a different form of credit enhancement for any initial form of credit
enhancement and a general description of the credit enhancement provider        
(including financial statements of credit enhancement provider if credit        
enhancement is material) and its activities.]                                   

FEDERAL INCOME TAX CONSEQUENCES 

   [With respect to the Offered Certificates, Orrick, Herrington & Sutcliffe
LLP, counsel to the Depositor ("Special Tax Counsel"), are of the opinion that, 
assuming compliance with all provisions of the Pooling Agreement, for federal   
income tax purposes, the Trust Fund will qualify as a REMIC under the Code. The 
following general discussion of the anticipated federal income tax consequences 
of the purchase, ownership and disposition of the Offered Certificates together 
with the discussion under the heading "FEDERAL INCOME TAX                       
CONSEQUENCES -- REMICs" in the Prospectus represents the opinion of Special Tax 
Counsel, subject to any qualifications set forth herein and therein. Special Tax
Counsel have prepared or reviewed the statements in this Prospectus Supplement  
under the heading "FEDERAL INCOME TAX                                           

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CONSEQUENCES" and in the Prospectus under the heading "FEDERAL INCOME TAX       
CONSEQUENCES -- REMICs," and are of the opinion that such statements are correct
in all material respects. Such statements are intended as an explanatory        
discussion of the possible effects of the classification of the Trust Fund as a 
REMIC for federal income tax purposes on investors generally and of related tax 
matters affecting investors generally, but do not purport to furnish information
in the level of detail or with attention to an investor's specific tax          
circumstances that would be provided by an investor's own tax advisor.          
Accordingly, each investor is advised to consult its own tax advisors with      
regard to the tax consequences to it of investing in the Offered Certificates.  

    For federal income tax purposes, the Class R Certificates will be the sole
class of "residual interests" in the Trust Fund and the Offered Certificates    
(other than the Residual Certificates) and Class B Certificates will represent  
ownership of "regular interests" in the Trust Fund and will generally be treated
as representing ownership of debt instruments of the Trust Fund. See "FEDERAL   
INCOME TAX CONSEQUENCES -- REMICs" in the Prospectus.                           

     The             Certificates will not be treated as having been issued with
original issue discount for federal income tax reporting purposes. The          
Certificates may, and the      Certificates will, be treated as having been     
issued with original issue discount for federal income tax reporting purposes.  
The prepayment assumption that will be used in determining the rate of accrual  
of original issue discount, market discount and premium, if any, for federal    
income tax purposes will be based on the assumption that subsequent to the date 
of any determination the Mortgage Loans will prepay at a rate equal to    % SPA.
No representation is made that the Mortgage Loans will prepay at that rate or at
any other rate. See "FEDERAL INCOME TAX CONSEQUENCES -- REMICs -- Taxation of   
Owners of REMIC Regular Certificates -- Original Issue Discount" in the         
Prospectus.                                                                     

If the method for computing original issue discount described in the  
Prospectus results in a negative amount for any period with respect to a        
Certificateholder (in particular, the Variable Strip Certificateholders), the   
amount of original issue discount allocable to such period would be zero and    
such Certificateholder will be permitted to offset such negative amount only    
against future original issue discount (if any) attributable to such            
Certificates. Although the matter is not free from doubt, a Variable Strip      
Certificateholder may be permitted to deduct a loss to the extent that his or   
her respective remaining basis in such Certificate exceeds the maximum amount of
future payments to which such Certificateholder is entitled, assuming no further
prepayments of the Mortgage Loans. Any such loss might be treated as a capital  
loss.                                                                           

  Although they are unclear on the issue, in certain circumstances the OID
Regulations appear to permit the holder of a debt instrument to recognize       
original issue discount under a method that differs from that used by the       
issuer. Accordingly, it is possible that the holder of a Certificate may be able
to select a method for recognizing original issue discount that differs from    
that used by the Master Servicer in preparing reports to the Certificateholders 
and the IRS. See "FEDERAL INCOME TAX CONSEQUENCES -- REMICs -- Taxation of      
Owners of REMIC Regular Certificates -- Original Issue Discount" in the         
Prospectus.                                                                     

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

 The Offered Certificates will be treated as assets described in Section
7701(a)(19)(C) of the Code and "real estate assets" under Section 856(c)(5)(A)  
of the Code generally in the same proportion that the assets of the Trust Fund  
would be so treated. In addition, interest on the Offered Certificates will be  
treated as "interest on obligations secured by mortgages on real property" under
Section 856(c)(3)(B) of the Code generally to the extent that such Offered      
Certificates are treated as "real estate assets" under Section 856(c)(5)(A) of  
the Code. Moreover, the Offered Certificates (other than the Residual           
Certificates) will be "qualified mortgages" within the meaning of Section       
860G(a)(3) of the Code. However, prospective investors                          

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in Offered Certificates that will be generally treated as assets described in   
Section 860G(a)(3) of the Code should note that, notwithstanding such treatment,
any repurchase of such a Certificate pursuant to the right of the Master        
Servicer or the Depositor to repurchase such Offered Certificates may adversely 
affect any REMIC that holds such Offered Certificates if such repurchase is made
under circumstances giving rise to a Prohibited Transaction Tax. See "THE       
POOLING AGREEMENT -- Termination" herein and "FEDERAL INCOME TAX                
CONSEQUENCES -- REMICs -- Characterization of Investments in REMIC Certificates"
in the Prospectus.                                                              

  For further information regarding the federal income tax consequences of
investing in the Offered Certificates, see "FEDERAL INCOME TAX                  
CONSEQUENCES -- REMICs" in the Prospectus.                                      

SPECIAL TAX CONSIDERATIONS APPLICABLE TO RESIDUAL CERTIFICATES                  

    The IRS has issued regulations under the provisions of the Code related to
REMICs (the "REMIC Regulations") that significantly affect holders of Residual  
Certificates. The REMIC Regulations impose restrictions on the transfer or      
acquisition of certain residual interests, including the Residual Certificates. 
In addition, the REMIC Regulations contain restrictions that apply to the       
transfer of "noneconomic" residual interests to United States persons. Pursuant 
to the Pooling Agreement, the Residual Certificates may not be transferred to   
non-United States persons.                                                      

    The REMIC Regulations provide that a transfer to a United States person of
"noneconomic" residual interests will be disregarded for all federal income tax 
purposes, and that the purported transferor of "noneconomic" residual interests 
will continue to remain liable for any taxes due with respect to the income on  
such residual interests, unless "no significant purpose of the transfer was to  
impede the assessment or collection of tax." Based on the REMIC Regulations, the
Residual Certificates may constitute noneconomic residual interests during some 
or all of their terms for purposes of the REMIC Regulations and, accordingly,   
unless no significant purpose of a transfer is to impede the assessment or      
collection of tax, transfers of the Residual Certificates may be disregarded and
purported transferors may remain liable for any taxes due with respect to the   
income on the Residual Certificates. All transfers of the Residual Certificates 
will be subject to certain restrictions under the terms of the Pooling Agreement
that are intended to reduce the possibility of any such transfer being          
disregarded to the extent that the Residual Certificates constitute noneconomic 
residual interests. See "FEDERAL INCOME TAX CONSEQUENCES -- REMICs -- Taxation  
of Owners of REMIC Residual Certificates -- Noneconomic REMIC Residual          
Certificates" in the Prospectus.                                                

The Residual Certificateholders may be required to report an amount of
taxable income with respect to the earlier accrual periods of the Trust Fund's  
term that significantly exceeds the amount of cash distributions received by    
such Class Residual Certificateholders from the Trust Fund with respect to such 
periods. Furthermore, the tax on such income may exceed the cash distributions  
with respect to such periods. Consequently, Residual Certificateholders should  
have other sources of funds sufficient to pay any federal income taxes due in   
the earlier years of the Trust Funds' term as a result of their ownership of the
Residual Certificates. In addition, the required inclusion of this amount of    
taxable income during the Trust Fund's earlier accrual periods and the deferral 
of corresponding tax losses or deductions until later accrual periods or until  
the ultimate sale or disposition of a Residual Certificate (or possibly later   
under the "wash sale" rules of Section 1091 of the Code) may cause the Residual 
Certificateholders' after-tax rate of return to be zero or negative even if the 
Residual Certificateholders' pre-tax rate of return is positive. that is, on a  
present value basis, the Residual Certificateholders' resulting tax liabilities 
could substantially exceed the sum of any tax benefits and the amount of any    
cash distributions on such Residual Certificates over their life.               

 The Master Servicer will be designated as the "tax matters person" with
respect to the Trust Fund as defined in the REMIC Provisions (as defined in the 
Prospectus), and in connection therewith will be required to hold not less than 
0.01% of the Residual Certificates.                                             

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

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  For further information regarding the federal income tax consequences of
investing in the Residual Certificates, see "CERTAIN YIELD AND PREPAYMENT       
CONSIDERATION -- Additional Yield Considerations Applicable Solely to the       
Residual Certificates" herein and " FEDERAL INCOME TAX                          
CONSEQUENCES -- REMICs -- Taxation of Owners of REMIC Residual Certificates" in 
the Prospectus.]                                                                

     [No election will be made to treat the Trust Fund as a real estate mortgage
investment conduit for federal income tax purposes. Orrick, Herrington &        
Sutcliffe LLP, counsel to the Depositor ("Special Tax Counsel"), are of the     
opinion that the Trust Fund will be classified as a grantor trust under Subpart 
E, Part I of Subchapter J of the Code, and not as a partnership or an           
association taxable as a corporation. The following general discussion of the   
anticipated federal income tax consequences of the purchase, ownership and      
disposition of the Offered Certificates together with the discussion under the  
heading "FEDERAL INCOME TAX CONSEQUENCES -- Grantor Trust Funds" in the         
Prospectus represents the opinion of Special Tax Counsel, subject to any        
qualifications set forth herein and therein. Special Tax Counsel have prepared  
or reviewed the statements in this Prospectus Supplement under the heading      
"FEDERAL INCOME TAX CONSEQUENCES" and in the Prospectus under the heading       
"FEDERAL INCOME TAX CONSEQUENCES -- Grantor Trust Funds," and are of the opinion
that such statements are correct in all material respects. Such statements are  
intended as an explanatory discussion of the possible effects of the            
classification of the Trust Fund as a grantor trust for federal income tax      
purposes on investors generally and of related tax matters affecting investors  
generally, but do not purport to furnish information in the level of detail or  
with attention to an investor's specific tax circumstances that would be        
provided by an investor's own tax advisor. Accordingly, each investor is advised
to consult its own tax advisors with regard to the tax consequences to it of    
investing in the Offered Certificates.                                          

    Taxpayers and preparers of tax returns (including those filed by any REMIC
or other issuer) should be aware that under applicable Treasury regulations a   
provider of advice on specific issues of law is not considered an income tax    
return preparer unless the advice is (i) given with respect to events that have 
occurred at the time the advice is rendered and is not given with respect to the
consequences of contemplated actions, and (ii) is directly relevant to the      
determination of any entry on a tax return. Accordingly, taxpayers should       
consult their own tax advisors and tax return preparers regarding the           
preparation of any item on a tax return, even where the anticipated tax         
treatment has been discussed herein.                                            

     Each Certificateholder will generally be treated as an owner of an interest
in the Mortgage Loans, which will be treated as an interest in "stripped bonds".
Accordingly, the Certificateholders will be required to include their yield with
respect to the Mortgage Loans in gross income as it accrues, based on a constant
yield method in accordance with the original issue discount rules, which may    
result in income being recognized for tax purposes in advance of the receipt of 
cash attributable to such income. See "FEDERAL INCOME TAX                       
CONSEQUENCES -- Grantor Trust Funds -- TAXATION OF OWNERS OF GRANTOR TRUST      
FRACTIONAL INTEREST CERTIFICATES -- IF STRIPPED BOND RULES APPLY" in the        
Prospectus.                                                                     

     In the absence of statutory or administrative clarification, it is intended
that information returns or reports to Certificateholders and the Internal      
Revenue Service (the "IRS") will be based on the use of a prepayment assumption 
of   % [SPA.] [of the Constant Prepayment Rate ("CPR")] and on a representative 
initial offering price for the Certificates in computing the constant yield.    
[The Constant Prepayment Rate or CPR represents a constant assumed rate of      
prepayment each month relative to the outstanding principal balance of a pool of
mortgage loans for the life of such mortgage loans.] However, no representation 
is made that the Mortgage Loans will in fact prepay at that rate or at any other
rate and Certificateholders should bear in mind that the use of a representative
initial offering price will mean that such information returns or reports, even 
if otherwise accepted as accurate by the IRS, will in any event be accurate only
as to the initial Certificateholders. The Certificateholders should consult     
their own tax advisors as to the proper treatment of their investment in the    
Mortgage Loans under the stripped bond rules.                                   

  The Certificates will represent interests in "real estate assets" within
the meaning of Section 856(c)(5)(A) of the Code and "loans . . . secured by an  
interest in real property" within the meaning of                                

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Section 7701(a)(19)(C)(v) of the Code, and the interest thereon will be treated 
as "interest on obligations secured by mortgages on real property" within the   
meaning of Section 856(c)(3)(B) of the Code. In addition, the Certificates will 
be "qualified mortgages" within the meaning of Section 860G(a)(3)(A) of the     
Code. See "FEDERAL INCOME TAX CONSEQUENCES -- Grantor Trust                     
Funds -- Characterization of Investments in Grantor Trust                       
Certificates -- Grantor Trust Fractional Interest Certificates" in the          
Prospectus.                                                                     

  For further information regarding the federal income tax consequences of
investing in the Certificates, see "FEDERAL INCOME TAX CONSEQUENCES-Grantor     
Trust Funds" in the Prospectus.]                                                

METHOD OF DISTRIBUTION

     Subject to the terms and conditions set forth in the Underwriting Agreement
dated           , 19  , the Underwriter[s] [has] [have] agreed to purchase and  
the Depositor has agreed to sell to the Underwriter[s] [the] [each class of     
Offered] Certificates.                                                          

The Underwriting Agreement provides that the obligation of the        
Underwriter[s] to pay for and accept delivery of the [Offered] Certificates is  
subject to, among other things, the receipt of certain legal opinions and to the
conditions, among others, that no stop order suspending the effectiveness of the
Depositor's Registration Statement shall be in effect, and that no proceedings  
for such purpose shall be pending before or threatened by the Securities and    
Exchange Commission.                                                            

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

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

 [BancAmerica Robertson Stephens, an Underwriter, is an affiliate of the
Depositor and the Master Servicer.]                                             

[This Prospectus Supplement and the related Prospectus may be used by 
BancAmerica Robertson Stephens, an affiliate of the Depositor and the Master    
Servicer, in connection with offers and sales related to secondary market       
transactions in the [Offered] Certificates. BancAmerica Robertson Stephens may  
act as principal or agent in such transactions. Such sales will be made at      
prices related to prevailing market prices at the time of sale or otherwise.]   

There can be no assurance that a secondary market for the [Offered]   
Certificates will develop or, if it does develop, that it will continue. The    
primary source of information available to investors concerning the [Offered]   
Certificates will be the monthly statements discussed in the Prospectus under   
"DESCRIPTION OF THE CERTIFICATES -- Reports to Certificateholders," which will  
include information as to the outstanding principal balance of the [Offered]    
Certificates and the status of the applicable form of credit enhancement. There 
can be no assurance that any additional information regarding the [Offered]     
Certificates will be available through any other source. In addition, the       
Depositor is not aware of any source through which price information about the  
[Offered] Certificates will be generally available on an ongoing basis. The     
limited                                                                         

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nature of such information regarding the [Offered] Certificates may adversely   
affect the liquidity of the [Offered] Certificates, even if a secondary market  
for the [Offered] Certificates becomes available.                               

LEGAL OPINIONS

    Certain legal matters relating to the Certificates will be passed upon for
the Depositor by Orrick, Herrington & Sutcliffe LLP, San Francisco, California  
and for the Underwriter by                     .                                

RATING

   It is a condition to the issuance of the [Offered] Certificates that they
be rated not lower than "          " by                     [and                
"                    " by                         ].                            

    The ratings of           on mortgage pass-through certificates address the
likelihood of the receipt by certificateholders of all distributions on the     
underlying mortgage loans to which they are entitled.           ratings on      
pass-through certificates do not represent any assessment of the likelihood that
principal prepayments will be made by mortgagors or the degree to which such    
prepayments might differ from that originally anticipated. [          ratings on
pass-through certificates do not represent any assessment of the Master         
Servicer's ability to [purchase] [sell] Converting Mortgage Loans or Converted  
Mortgage Loans. In the event that the Master Servicer [purchases] [sells] a     
Converting or Converted Mortgage Loan, investors might suffer a lower than      
anticipated yield.] The rating does not address the possibility that            
Certificateholders might suffer a lower than anticipated yield.                 

   The Depositor has not requested a rating on the [Offered] Certificates by
any rating agency other than           [and           ]. However, there can be  
no assurance as to whether any other rating agency will rate the [Offered]      
Certificates, or, if it does, what rating would be assigned by any such other   
rating agency. A rating on the [Offered] Certificates by another rating agency, 
if assigned at all, may be lower than the rating assigned to the [Offered]      
Certificates by           and           .                                       

   A security rating is not a recommendation to buy, sell or hold securities
and may be subject to revision or withdrawal at any time by the assigning rating
organization. Each security rating should be evaluated independently of any     
other security rating. The rating of the Fixed Strip Certificates or Variable   
Strip Certificates does not address the possibility that the holders of such    
Certificates may fail to fully recover their initial investment. In the event   
that the rating initially assigned to the [Offered] Certificates is subsequently
lowered for any reason, no person or entity is obligated to provide any         
additional support or credit enhancement with respect to the [Offered]          
Certificates.                                                                   

LEGAL INVESTMENT

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

    The Depositor makes no representation as to the proper characterization of
[any Class of the Offered] [the] Certificates for legal investment or other     
purposes, or as to the ability of particular investors to purchase [any Class of
the Offered] [the] Certificates under applicable legal investment restrictions. 
These uncertainties may affect the liquidity of [any Class of Offered] [the]    
Certificates. Accordingly, all institutions whose investment activities are     
subject to legal investment laws and regulations, regulatory capital            
requirements or review by regulatory authorities should consult with their legal
advisors in determining whether and to what extent [any Class of the Offered]   
[the] Certificates constitutes a legal investment or is subject to investment,  
capital or other restrictions.                                                  

See "LEGAL INVESTMENT MATTERS" in the Prospectus.                     

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ERISA CONSIDERATIONS

     Any fiduciary or other Plan Asset Investor that proposes to use Plan Assets
to acquire any [Offered] Certificates should consult with its counsel with      
respect to the potential consequences under the Employee Retirement Income      
Security Act of 1974, as amended ("ERISA"), and Section 4975 of the Internal    
Revenue Code of 1986, as amended (the "Code"), of the acquisition and ownership 
of such Certificates with Plan Assets. See "ERISA CONSIDERATIONS" in the        
Prospectus.                                                                     

PROHIBITED TRANSACTION CLASS EXEMPTIONS                                         

To qualify for exemption under PTCE 83-1 (see "ERISA                  
CONSIDERATIONS -- Prohibited Transaction Class Exemptions" in the Prospectus), a
Certificate (i) must entitle its holder to more than nominal pass-through       
payments of both principal and interest from the Mortgage Loans and (ii) must   
not be subordinated to other Classes of Certificates with respect to the right  
to receive payments in the event of defaults or delinquencies on the underlying 
Mortgage Loans. See "ERISA CONSIDERATIONS -- Prohibited Transaction Class       
Exemption 83-1" in the Prospectus.                                              

[Because the                               Certificates, which are    
subordinated to the extent specified herein (see "DESCRIPTION OF THE            
CERTIFICATES -- Subordination and Allocation of Losses" herein), and the        
Residual Certificates do not qualify for exemption under PTCE 83-1, exemptive   
relief will not be available under PTCE 83-1 to Plans or other persons that use 
Plan Assets to acquire such Certificates from the prohibited transaction rules  
of ERISA and Section 4975 of the Code. However, other prohibited transaction    
class exemptions issued by the U.S. Department of Labor may apply with respect  
to such Certificates. See "ERISA CONSIDERATIONS -- Prohibited Transaction Class 
Exemption 83-1" in the Prospectus.]                                             

[UNDERWRITER'S PTE]                                                             

    [                                (the "Underwriter") is the recipient of a
final prohibited transaction exemption (the "Underwriter's PTE") which may      
afford protection from violations under Section 406 and 407 of ERISA and Section
4975 of the Code for Plans or Plan Asset Investors that acquire [Offered]       
Certificates [(other than the                               or Residual         
Certificates)]. Plans or Plan Asset Investors that acquire [Offered]            
Certificates [(other than the                               or Residual         
Certificates)] may be eligible for protection under the Underwriter's PTE if:   

         (a) The [Class of such] Certificates acquired with Plan Assets is not
    subordinated to other Classes of Certificates with respect to the right to
     receive payment in the event of defaults or delinquencies on the underlying
Mortgage Loans;                                                       

       (b) The Plan or Plan Asset Investor is an "accredited investor" (as
     defined in Rule 501(a)(1) of Regulation D under the Securities Act of 1933,
as amended (the "Act"));                                              

    (c) At the time of such acquisition, the [Class of] Certificates
     acquired by the Plan or Plan Asset Investor has received a rating in one of
    the three highest generic rating categories from Standard & Poor's Ratings
Services, Moody's Investors Service, Inc. Duff & Phelps, Inc. or Fitch
IBCA, Inc.;                                                           

       (d) The Trustee is not an affiliate of any member of the Restricted
Group (as defined in paragraph (3) below);                            

          (e) The [Offered] Certificates evidence ownership in Trust Assets that
 do not include subordinate certificates backed by mortgages or mortgage
    participations (unless interest and principal payable with respect to such
mortgage certificates are guaranteed by the GNMA, FHLMC or FNMA);     

         (f) The acquisition of such Certificates with Plan Assets is on terms
(including the price paid for the Certificates) that are at least as  
   favorable to the Plan or Plan Asset Investor as they would be in an arm's
length transaction with an unrelated party; and                       

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          (g) The sum of all payments made to and retained by the Underwriter in
   connection with the distribution of such Certificates represents not more
     than reasonable compensation for underwriting such Certificates; the sum of
    all payments made to and retained by the Depositor pursuant to the sale of
the Mortgage Loans to the Trust Fund represents not more than the fair
     market value of the Mortgage Loans; and the sum of all payments made to and
 retained by the Master Servicer and any Subservicer represents not more
   than reasonable compensation for its services under the Pooling Agreement
and reimbursement of its reasonable expenses in connection therewith. 

  In addition, the Underwriter's PTE will not provide exemptive relief for
certain transactions prohibited by Section 406(b) of ERISA or Section           
4975(c)(1)(E) or (F) of the Code with may result from apply to a Plan's         
investment in Certificates if:                                                  

         (1) The Plan's investment in any [Class of such] Certificates exceeds
25% of the outstanding Certificates [of that Class] at the time of    
acquisition;                                                          

          (2) Immediately after such acquisition, 25% or more of the Plan Assets
with respect to which the fiduciary or other Plan Asset Investor has  
discretionary authority or renders investment advice are invested in  
    certificates evidencing interests in trusts sponsored or containing assets
sold or serviced by the same entity;                                  

    (3) The Plan is sponsored by the Depositor, the Underwriter, the
    Trustee, the Master Servicer, any Subservicer, any Pool, Special Hazard or
Primary Insurer or the obligor under any credit support mechanism, a  
Mortgagor with respect to obligations constituting more than 5% of the
  aggregate unamortized principal balance of the Trust Fund on the Closing
Date (a "Major Obligor"), or any of their affiliates (together, the   
"Restricted Group");                                                  

      (4) The fiduciary or other Plan Asset Investor responsible for the
  decision to invest any Plan Assets, or any of its affiliates, is a Major
Obligor; or                                                           

    (5) In the case of an acquisition in connection with the initial
issuance of Certificates, at least 50% of [each Class of] [the]       
Certificates in which Plans have invested is acquired by persons      
    independent of the members of the Restricted Group and at least 50% of the
    aggregate interest in the Trust Fund is acquired by persons independent of
the Restricted Group.                                                 

Whether the conditions of the Underwriter's PTE will be satisfied with
respect to [Offered] Certificates [(other than the                              
Certificates and the Residual Certificates, for which the   
Underwriter's PTE will not afford protection) of a particular Class] will depend
upon the facts and circumstances existing at the time Plan Assets are used to   
acquire Certificates [of that Class]. Any fiduciary or other Plan Asset Investor
that proposes to use Plan Assets to acquire such Certificates in reliance upon  
the Underwriter's PTE should determine whether such acquisition will satisfy all
applicable conditions and consult with its counsel regarding other factors that 
may affect the applicability of the Underwriter's PTE.]                         

  [Because the                               Certificates and the Residual
Certificates will not qualify for the exemptions under PTCE 83-1 [or the        
Underwriter's PTE], transfers of such Certificates to any Plan or Plan Asset    
Investor will not be registered unless the transferee provides an opinion of    
counsel satisfactory to the Trustee and the Depositor that the purchase of any  
such Certificate by, on behalf of or with Plan Assets of any Plan is permissible
under applicable law, will not constitute or result in a non-exempt prohibited  
transaction under ERISA or Section 4975 of the Code, and will not subject the   
Master Servicer, the Depositor or the Trustee to any obligation in addition to  
those undertaken in the Pooling Agreement.]                                     

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PROSPECTUS                                                                      

BA MORTGAGE SECURITIES, INC.
MORTGAGE PASS-THROUGH CERTIFICATES

   BA Mortgage Securities, Inc. (the "Depositor") intends to sell from time to
time, as described in the related Prospectus Supplement and 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 beneficial ownership interests in a trust (the "Trust       
Fund"), to be created by the Depositor.                                         

The property of each Trust Fund will consist of a segregated pool (a    
"Mortgage Pool") of conventional one- to four-family residential first mortgage 
loans (the "Mortgage Loans") which Mortgage Loans, if so specified in the       
related Prospectus Supplement, may include cooperative apartment loans          
("Cooperative Loans"), or interests therein and related assets conveyed to such 
Trust Fund by the Depositor. The Depositor will acquire the assets of any       
Mortgage Pool from Bank of America, FSB and/or one or more other affiliated or  
unaffiliated institutions specified in the applicable Prospectus Supplement     
(collectively, the "Sellers"). Each Mortgage Pool will consist of one or more of
the various types of Mortgage Loans described herein under the caption "THE     
MORTGAGE POOLS." The general characteristics of the Mortgage Loans to be        
evidenced by the Certificates of a Series will be set forth in the related      
Prospectus Supplement.                                                          

Each Class of Certificates of any Series will represent the right, which
right may be senior or subordinate to the rights of one or more other Classes of
the Certificates for such Series, to receive a specified portion of payments of 
principal or interest (or both) on the Mortgage Loans in the related Trust Fund 
in the manner described herein and in the related Prospectus Supplement. A      
Series may include one or more Classes of Certificates entitled to principal    
distributions, with disproportionate, nominal or no interest distributions, or  
to interest distributions, with disproportionate, nominal or no principal       
distributions. A Series may include two or more Classes of Certificates which   
differ as to the timing, sequential order, priority of payment, rate of interest
or amount of distributions of principal or interest or both.                    

 The Depositor's only obligations with respect to a Series of Certificates
will be pursuant to certain representations and warranties made by the          
Depositor. The master servicer (the "Master Servicer") for each Series of       
Certificates will be Bank of America, FSB. The principal obligations of the     
Master Servicer will be pursuant to its contractual servicing obligations (which
include its limited obligation to make certain advances in the event of         
delinquencies in payment on the Mortgage Loans). See "DESCRIPTION OF THE        
CERTIFICATES."                                                                  

  If so specified in the related Prospectus Supplement, the Trust Fund for a
Series of Certificates may include any one or any combination of a mortgage pool
insurance policy, letter of credit, bankruptcy bond, special hazard insurance   
policy, certificate insurance policy, reserve fund or other form of credit      
support. In addition to or in lieu of the foregoing, credit enhancement may be  
provided by means of subordination. See "DESCRIPTION OF CREDIT ENHANCEMENTS."   

  One or more separate elections may be made to treat a Trust Fund as a real
estate mortgage investment conduit ("REMIC") for federal income tax purposes. If
applicable, the Prospectus Supplement for a Series of Certificates will specify 
which Class or Classes of the related Series of Certificates will be considered 
to be regular interests in the related REMIC and which Class of Certificates or 
other interests will be designated as the residual interest in the related      
REMIC. See "FEDERAL INCOME TAX CONSEQUENCES" herein.                            

  SEE "RISK FACTORS" ON PAGE 10 HEREIN FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED BEFORE PURCHASING CERTIFICATES OF ANY SERIES.         

PROCEEDS FROM THE ASSETS IN THE RELATED TRUST FUND WILL BE THE ONLY SOURCE OF   
PAYMENTS ON THE CERTIFICATES OF EACH SERIES. THE CERTIFICATES DO NOT REPRESENT  
AN OBLIGATION OF OR INTEREST IN THE DEPOSITOR, BANKAMERICA CORPORATION, BANK OF 
AMERICA, FSB OR ANY OF THEIR AFFILIATES. NEITHER THE CERTIFICATES NOR THE       
UNDERLYING MORTGAGE LOANS OR OTHER ASSETS OF A TRUST FUND ARE INSURED OR        
GUARANTEED BY ANY GOVERNMENTAL AGENCY                                           

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. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE. 

Offers of the Certificates may be made through one or more different    
methods, including offerings through underwriters, as more fully described under
"METHODS OF DISTRIBUTION" herein and in the related Prospectus Supplement.      
BancAmerica Robertson Stephens, an affiliate of the Depositor and the Master    
Servicer, may from time to time act as agents or underwriters in connection with
the sale of the Certificates. This Prospectus and the related Prospectus        
Supplement may be used by BancAmerica Robertson Stephens in connection with     
offers and sales related to secondary market transactions in any Series of      
Certificates. BancAmerica Robertson Stephens may act as principal or agent in   
such transactions. Such sales will be made at prices related to prevailing      
market prices at the time of sale or otherwise.                                 

 There will be no secondary market for any Series of Certificates prior to
the offering thereof. The Certificates will not be listed on any securities     
exchange. There can be no assurance that a secondary market for any of the      
Certificates will develop or, if it does develop, that it will continue.        

  This Prospectus may not be used to consummate sales of Certificates unless
accompanied by a Prospectus Supplement. An index indicating where certain terms 
used herein are defined appears at the end of the Prospectus under the caption  
"INDEX OF PRINCIPAL DEFINITIONS."                                               

THE DATE OF THIS PROSPECTUS IS          , 1998. 

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TABLE OF CONTENTS 

                                                        [Enlarge/Download Table]

                                                                                       PAGE
                                                                                       ----
                                                                                           
PROSPECTUS SUPPLEMENT.................................................................   3 
AVAILABLE INFORMATION.................................................................   3 
REPORTS TO CERTIFICATEHOLDERS.........................................................   3 
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE.......................................   3 
SUMMARY OF PROSPECTUS.................................................................   5 
RISK FACTORS..........................................................................  10 
THE MORTGAGE POOLS....................................................................  12 
THE DEPOSITOR.........................................................................  15 
MORTGAGE LOAN PROGRAM.................................................................  15 
DESCRIPTION OF THE CERTIFICATES.......................................................  23 
SUBORDINATION.........................................................................  37 
DESCRIPTION OF CREDIT ENHANCEMENTS....................................................  39 
PRIMARY MORTGAGE INSURANCE, HAZARD INSURANCE; CLAIMS THEREUNDER.......................  45 
THE POOLING AGREEMENT.................................................................  49 
YIELD CONSIDERATIONS..................................................................  53 
MATURITY AND PREPAYMENT CONSIDERATIONS................................................  55 
CERTAIN LEGAL ASPECTS OF MORTGAGE LOANS AND RELATED MATTERS...........................  57 
FEDERAL INCOME TAX CONSEQUENCES.......................................................  64 
STATE AND OTHER TAX CONSEQUENCES......................................................  90 
ERISA CONSIDERATIONS..................................................................  90 
LEGAL INVESTMENT MATTERS..............................................................  93 
USE OF PROCEEDS.......................................................................  95 
METHODS OF DISTRIBUTION...............................................................  95 
RATING................................................................................  96 
LEGAL MATTERS.........................................................................  96 
FINANCIAL INFORMATION.................................................................  96 
ADDITIONAL INFORMATION................................................................  96 
INDEX OF PRINCIPAL DEFINITIONS........................................................  97 

 UNTIL 90 DAYS AFTER THE DATE OF EACH SUPPLEMENT TO THIS PROSPECTUS, ALL
DEALERS EFFECTING TRANSACTIONS IN THE REGISTERED SECURITIES COVERED BY SUCH     
SUPPLEMENT, WHETHER OR NOT PARTICIPATING IN THE DISTRIBUTION THEREOF, MAY BE    
REQUIRED TO DELIVER SUCH SUPPLEMENT AND THIS PROSPECTUS. THIS IS IN ADDITION TO 
THE OBLIGATION OF DEALERS TO DELIVER A SUPPLEMENT AND PROSPECTUS WHEN ACTING AS 
UNDERWRITERS OF SECURITIES COVERED BY SUCH SUPPLEMENT AND WITH RESPECT TO THEIR 
UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.                                             

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY  
REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND EACH SUPPLEMENT
TO THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION    
MUST NOT BE RELIED UPON. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR
A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE CERTIFICATES    
OFFERED HEREBY, NOR 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; HOWEVER, IF ANY MATERIAL CHANGE OCCURS WHILE   
THIS PROSPECTUS IS REQUIRED BY LAW TO BE DELIVERED, THIS PROSPECTUS WILL BE     
AMENDED OR SUPPLEMENTED ACCORDINGLY.                                            

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PROSPECTUS SUPPLEMENT 

     The Prospectus Supplement relating to the Certificates of each Series to be
offered hereunder will, among other things, set forth with respect to such      
Certificates, as appropriate: (i) a description of the Class or Classes of      
Certificates and the Pass-Through Rate or method of determining the amount of   
interest, if any, to be passed through to each such Class; (ii) the aggregate   
initial principal amount and Distribution Dates relating to such Series, the    
method used to calculate the aggregate amount of principal to be distributed    
with respect to the Certificates of such Series on each Distribution Date, the  
order of the application of principal distributions to the respective Classes   
and the allocation of principal to be so applied, and, if applicable, the       
initial and final scheduled Distribution Dates for each Class; (iii) information
as to the assets comprising the Trust Fund, including the general               
characteristics of the Mortgage Loans included therein and, if applicable,      
included in the Trust Fund; (iv) the circumstances, if any, under which the     
Trust Fund may be subject to early termination; (v) additional information with 
respect to the plan of distribution of such Certificates; (vi) whether a REMIC  
election will be made and designation of the regular interests and residual     
interests; (vii) the aggregate original percentage ownership interest in the    
Trust Fund to be evidenced by each Class of Certificates; (viii) information as 
to the Trustee; and (ix) information as to the nature and extent of             
subordination with respect to any Class of Certificates that is subordinate in  
right of payment to any other Class.                                            

AVAILABLE INFORMATION 

  The Depositor has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement under the Securities Act of 1933, as     
amended, with respect to the Certificates. This Prospectus and the Prospectus   
Supplement relating to each Series of Certificates contain summaries of the     
material terms of the documents referred to herein and therein, but do not      
contain all of the information set forth in the Registration Statement of which 
this Prospectus is a part. For further information, reference is made to such   
Registration Statement and the exhibits thereto. In addition, the Depositor will
be subject to the information requirements of the Securities Exchange Act of    
1934, as amended, and in accordance therewith, will file reports and other      
information with the Commission. Such Registration Statement, the exhibits      
thereto and any reports or other information filed with the Commission can be   
inspected and copied at prescribed rates at the public reference facilities     
maintained by the Commission at its Public Reference Section, 450 Fifth Street, 
N.W., Washington, D.C. 20549, and at its Regional Offices located as follows:   
Midwest Regional Office, Northwestern Atrium Center, 500 West Madison Avenue,   
Chicago, Illinois 60661-2511; and Northeast Regional Office, 7 World Trade      
Center, Suite 1300, New York, New York 10048. In addition, such Registration    
Statement, the exhibits thereto and any reports or other information filed with 
the Commission through its Electronic Data Gathering, Analysis, and Retrieval   
system are publicly available through the Commission's Web site                 
(http://www.sec.gov).                                                           

REPORTS TO CERTIFICATEHOLDERS 

     The trustee for each Series of Certificates (the "Trustee") will provide or
cause to be provided to holders of the Certificates (the "Certificateholders")  
of such Series monthly reports concerning the Mortgage Pool underlying their    
respective Certificates. See "DESCRIPTION OF THE CERTIFICATES -- Reports to     
Certificateholders" herein.                                                     

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE 

All documents filed or caused to be filed by the Depositor with the   
Commission relating to the offering of Certificates referred to in the          
accompanying Prospectus Supplement pursuant to Section 13(a), 13(c), 14 or 15(d)
of the Securities Exchange Act of 1934, prior to the termination of any offering
of the Certificates described in such Prospectus Supplement, shall be           
incorporated by reference in this Prospectus and be a part of this Prospectus   
from the date of the filing of such documents. Copies of the documents          
incorporated herein by reference, other than the exhibits to such documents,    
unless such exhibits are specifically incorporated by reference in such         
documents, will be provided to each person to whom this Prospectus and the      
related Prospectus Supplement is delivered in connection with the offering of   
one or more Classes of Certificates upon written or oral request of such person.
Requests should be directed to: BA Mortgage Securities, Inc.,                   

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345 Montgomery Street, Lower Level #2, Unit #8152, San Francisco, California    
94104, Attention: David M. Grout, telephone number (415) 622-3676.              

 Each Series of Certificates will be issued under a separate Pooling and
Servicing Agreement (each a "Pooling Agreement"), among the Depositor, the      
Master Servicer and the trustee for such Series (the "Trustee"), substantially  
in the form (the "Form of Pooling Agreement") filed as an exhibit to the        
Registration Statement of which this Prospectus is a part. 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. An index indicating where certain  
terms used herein are defined appears at the end of this Prospectus. Terms used 
but not defined herein have the meanings assigned to them in the Form of Pooling
Agreement. References herein to the Master Servicer, the Trustee or the         
Depositor include, unless otherwise specified, any agents acting on behalf of   
the Master Servicer, the Trustee or the Depositor, any subcontractor of the     
Master Servicer, the Trustee or the Depositor, any of which agents or           
subcontractors may be the Depositor or one of its affiliates.                   

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SUMMARY OF PROSPECTUS 

The following summary is qualified in its entirety by reference to the
detailed information appearing elsewhere in this Prospectus and by reference to 
the information with respect to each Series of Certificates contained in the    
Prospectus Supplement to be prepared and delivered in connection with the       
offering of such Series. Capitalized terms used in this summary that are not    
otherwise defined shall have the meanings ascribed thereto in this Prospectus.  

Title of Certificates...........   Mortgage Pass-Through Certificates, issuable 
                     in Series (the "Certificates").

Depositor.......................   BA Mortgage Securities, Inc., a wholly-owned 
                                  subsidiary of Bank of America, FSB. See "THE
 DEPOSITOR."

Master Servicer.................   Bank of America, FSB. See "MORTGAGE LOAN     
PROGRAM -- Bank of America, FSB" and "THE POOLING AGREEMENT -- Certain Matters  
                           Regarding the Master Servicer and the
 Depositor."

Trustee.........................   The trustee (the "Trustee") for each Series  
                              of Certificates will be specified in the
                    related Prospectus Supplement.

Description of Certificates.....   Each Series of Certificates will include one 
                                or more Classes of Certificates which will
                           represent in the aggregate the entire
                                   beneficial ownership interest in a segregated
                                   pool (a "Mortgage Pool") of conventional one-
                               to four-family residential first mortgage
                                 loans (the "Mortgage Loans") which Mortgage
                           Loans, if so specified in the related
                        Prospectus Supplement, may include
                               cooperative apartment loans ("Cooperative
                               Loans"), or interests therein and related
                               assets (collectively, a "Trust Fund") and
                              will be issued pursuant to a pooling and
                                  servicing agreement among the Depositor, the
                              Trustee and the Master Servicer (each, a
                                "Pooling Agreement"). Except for any Strip
                            Certificates (defined in the following
                                 paragraph), each Series of Certificates, or
                                   Class of Certificates in the case of a Series
                                  consisting of two or more Classes, will have
                                a stated principal balance (a "Certificate
                                 Principal Balance") and will be entitled to
                          distributions of interest based on a
                               specified interest rate or rates (each, a
                                   "Pass-Through Rate"). Each Series or Class of
                       Certificates may have a different
                              Pass-Through Rate, which may be a fixed,
                                  variable or adjustable Pass-Through Rate, or
                         any combination of two or more such
                                Pass-Through Rates. The related Prospectus
                                   Supplement will specify the Pass-Through Rate
                          or Rates for each Series or Class of
                               Certificates, or the initial Pass-Through
                                  Rate or Rates and the method for determining
                                 subsequent changes to the Pass-Through Rate
or Rates. 

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                                 A Series may include one or more Classes of
                                  Certificates ("Strip Certificates") entitled
                          (i) to principal distributions, with
                              disproportionate, nominal or no interest
                        distributions, or (ii) to interest
                                   distributions, with disproportionate, nominal
                                   or no principal distributions. In addition, a
                               Series may include two or more Classes of
                             Certificates which differ as to timing,
                            sequential order, priority of payment,
                                  Pass-Through Rate or amount of distributions
                                of principal or interest or both, or as to
                                  which distributions of principal or interest
                               or both on any Class may be made upon the
                                   occurrence of specified events, in accordance
                                 with a schedule or formula, or on the basis
                                of collections from designated portions of
                                 the Mortgage Pool, which Series may include
                                   one or more Classes of Certificates ("Accrual
                                Certificates") as to which certain accrued
                                 interest will not be distributed but rather
                                will be added to the Certificate Principal
                                   Balance thereof on each Distribution Date, as
                                  hereinafter defined, in the manner described
                           in the related Prospectus Supplement.

                              If so provided in the related Prospectus
                              Supplement, a Series of Certificates may
                                 include one or more Classes of Certificates
                               (collectively, the "Senior Certificates")
                             which are senior to one or more Classes
                     (collectively, the "Subordinate
                          Certificates") in respect of certain
                                 distributions of principal and interest and
                                 allocations of losses on Mortgage Loans. In
                             addition, certain Classes of Senior (or
                                Subordinate) Certificates may be senior to
                              other Classes of Senior (or Subordinate)
                                   Certificates in respect of such distributions
or losses.

                                  As to each Series, one or more elections may
                                  be made to treat the related Trust Fund or a
                                  designated portion thereof as a "real estate
                                mortgage investment conduit" or "REMIC" as
                                  defined in the Internal Revenue Code of 1986
                           (the "Code"). See "DESCRIPTION OF THE
    CERTIFICATES."

                                   Proceeds from the assets in the related Trust
                                 Fund will be the only source of payments on
                          the Certificates of each Series. The
                                 Certificates do not represent an obligation
                                  of or interest in the Depositor, BankAmerica
                                   Corporation ("BankAmerica"), Bank of America,
                                 FSB or any of their affiliates. Neither the
                              Certificates nor the underlying Mortgage
                                   Loans or other assets of a Trust Fund will be
                               guaranteed or insured by any governmental
                         agency or instrumentality or by the
                                  Depositor, BankAmerica, Bank of America, FSB
                 or any of their affiliates.

The Mortgage Pools..............   Each Trust Fund will consist of Mortgage     
                                   Loans or interests therein and related assets
                                   secured by first liens on one- to four-family
                                   residential properties, located in any one of
                               the 50 states or the District of Columbia
                                (the "Mortgaged Properties"). The Mortgage
                           Loans will have been purchased by the
                                Depositor from Bank of America, FSB and/or
                                  one or more other affiliated or unaffiliated
                              institutions specified in the applicable
                              Prospectus Supplement (collectively, the
                                 "Sellers") on or before the date of initial
                       issuance of the related Series of
                                Certificates. See "MORTGAGE LOAN PROGRAM."
              For a description of the

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                                  types of Mortgage Loans that may be included
                              in the Mortgage Pools, see "THE MORTGAGE
                   POOLS -- The Mortgage Loans."

                          A Current Report on Form 8-K will be
                                 available upon request to purchasers of the
                                related Series of Certificates and will be
                              filed, together with the related Pooling
                                   Agreement, with the Commission within fifteen
                       days after such initial issuance.

Interest Distributions..........   Except as otherwise specified in the related 
                                   Prospectus Supplement, interest on each Class
                                of Certificates of each Series, other than
                                Strip Certificates or Accrual Certificates
                              (prior to the time when accrued interest
                                   becomes payable thereon), will be remitted at
                                 the applicable Pass-Through Rate (which may
                                be a fixed, variable or adjustable rate or
                              any combination thereof) on such Class's
                                   outstanding Certificate Principal Balance, on
                           the 25th day (or if such day is not a
                                business day, the next succeeding business
                                   day) of each month, commencing with the month
                                   following the month in which the Cut-off Date
                              (as defined in the applicable Prospectus
                               Supplement) occurs (each, a "Distribution
                                 Date"). Distributions, if any, with respect
                               to interest on Strip Certificates will be
                                 made on each Distribution Date as described
                          herein and in the related Prospectus
                                  Supplement. Interest that has accrued but is
                                 not yet payable on any Accrual Certificates
                               will be added to the principal balance of
                               such Class on each Distribution Date, and
                                  will thereafter bear interest. Distributions
                               of interest with respect to any Series of
                                   Certificates (or accruals thereof in the case
                                  of Accrual Certificates), or with respect to
                                  one or more Classes included therein, may be
                                  reduced to the extent of interest shortfalls
                               not covered by advances or the applicable
                                  form of credit support, including shortfalls
                            (a "Prepayment Interest Shortfall") in
                               collections of a full month's interest in
                             connection with prepayments. See "YIELD
                             CONSIDERATIONS" and "DESCRIPTION OF THE
    CERTIFICATES."

Principal Distributions.........   Except as otherwise specified in the related 
                      Prospectus Supplement, principal
                               distributions on the Certificates of each
                                 Series will be payable on each Distribution
                                 Date, commencing with the Distribution Date
                                   in the month following the month in which the
                                Cut-off Date occurs, to the holders of the
                                  Certificates of such Series, or of the Class
                              or Classes of Certificates then entitled
                                 thereto, on a pro rata basis among all such
                                   Certificates or among the Certificates of any
                                   such Class, in proportion to their respective
                                 outstanding Certificate Principal Balances,
                             or in the priority and manner otherwise
                         specified in the related Prospectus
                            Supplement. Strip Certificates with no
                            Certificate Principal Balance will not
                         receive distributions in respect of
                                principal. Distributions of principal with
                               respect to any Series of Certificates, or
                                  with respect to one or more Classes included
                              therein, may be reduced to the extent of
                                   certain delinquencies not covered by advances
                                  or losses not covered by the applicable form
                              of credit enhancement. See "THE MORTGAGE
                              POOLS," "MATURITY AND PREPAYMENT CONSID-

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                       ERATIONS" and "DESCRIPTION OF THE
    CERTIFICATES."

Subordination...................   If specified in the related Prospectus       
                                   Supplement, credit support to provide partial
                              coverage for certain defaults and losses
                                 relating to the Mortgage Loans with respect
                               to one or more Classes of Certificates in
                           Series may be provided in the form of
                                  subordination of one or more Classes of such
                                   Series under which losses are first allocated
                           to any Subordinate Certificates up to
                                   specified limits. To the extent not set forth
                                   herein, the amount and types of coverage, the
                            terms of any subordination and related
                          information will be set forth in the
                                   Prospectus Supplement relating to a Series of
                        Certificates. See "SUBORDINATION."

Credit Enhancements.............   If specified in the related Prospectus       
                                Supplement, the Trust Fund with respect to
                                any Series of Certificates may include any
                                   one or any combination of a letter of credit,
                             mortgage pool insurance policy, special
                          hazard insurance policy, certificate
                                insurance policy, bankruptcy bond, reserve
                             fund or other type of credit support to
                                   provide partial coverage for certain defaults
                                and losses relating to the Mortgage Loans.
                             Any form of credit enhancement may have
                             certain limitations and exclusions from
                                  coverage thereunder, which will be described
                                  in the related Prospectus Supplement. Losses
                                   not covered by any form of credit enhancement
                                 will be borne by the holders of the related
                                   Certificates (or certain Classes thereof). To
                                 the extent not set forth herein, the amount
                                  and types of coverage, the identification of
                                   any entity providing the coverage and related
                          information will be set forth in the
                                   Prospectus Supplement relating to a Series of
                              Certificates. See "DESCRIPTION OF CREDIT
   ENHANCEMENT."

Advances........................   The Master Servicer will be obligated to make
                                 certain advances with respect to delinquent
                                   scheduled payments on the Mortgage Loans, but
                                 only to the extent that the Master Servicer
                        believes that such amounts will be
                                recoverable by it. Any advance made by the
                                Master Servicer with respect to a Mortgage
                                  Loan is recoverable by it as provided herein
               under "DESCRIPTION OF THE
                           CERTIFICATES -- Advances" either from
                                  recoveries on the specific Mortgage Loan or,
                              with respect to any advance subsequently
                                   determined to be nonrecoverable, out of funds
                                   otherwise distributable to the holders of the
                               related Series of Certificates, which may
                       include the holders of any Senior
                  Certificates of such Series.
                                Certificateholders will be notified of the
                                amounts of any advances made by the Master
                          Servicer or recovery of any advances
                                 previously made and subsequently determined
                         to be nonrecoverable in the monthly
                               distribution report to Certificateholders
                                described herein under "DESCRIPTION OF THE
                CERTIFICATES -- Reports to
          Certificateholders."

Optional Termination............   If specified in the applicable Prospectus    
                          Supplement, the Master Servicer, the
                             Depositor or the holder of the residual
                                  interest in a REMIC may at its option effect
         early retirement of

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                                   a Series of Certificates through the purchase
                                   of the assets in the related Trust Fund under
                                   the circumstances and in the manner set forth
                            herein under "THE POOLING AGREEMENT --
                                  Termination; Retirement of Certificates" and
                           in the related Prospectus Supplement.

Rating..........................   At the date of issuance, as to each Series,  
                                 each Class of Certificates offered by means
                                   of this Prospectus and the related Prospectus
                                Supplement will be rated at the request of
                              the Depositor in one of the four highest
                                 rating categories by one or more nationally
                                   recognized statistical rating agencies (each,
                                 a "Rating Agency"). See "RATING" herein and
                           in the related Prospectus Supplement.

Legal Investment................   If so specified in the related Prospectus    
                            Supplement, each Class of Certificates
                                 offered by means of this Prospectus and the
                                 related Prospectus Supplement that is rated
                                 in one of the two highest rating categories
                                   by at least one Rating Agency will constitute
                                   "mortgage related securities" for purposes of
                                   the Secondary Mortgage Market Enhancement Act
                              of 1984 ("SMMEA"). See "LEGAL INVESTMENT
      MATTERS" herein.

ERISA Considerations............   Fiduciaries of employee benefit plans and    
                        certain other retirement plans and
                                   arrangements, including individual retirement
                              accounts and annuities, Keogh plans, and
                              collective investment funds and separate
                             accounts in which such plans, accounts,
                                  annuities or arrangements are invested, that
                                   are subject to the Employee Retirement Income
                                 Security Act of 1974, as amended ("ERISA"),
                                  or Section 4975 of the Code (each, a "Plan")
                              should carefully review with their legal
                                 advisors whether the purchase or holding of
                                   Certificates could give rise to a transaction
                            that is prohibited or is not otherwise
                               permissible either under ERISA or Section
                                4975 of the Code. Investors are advised to
                                consult their counsel and to review "ERISA
             CONSIDERATIONS" herein.

Federal Income Tax                                                              
Consequences..................   Certificates of each Series offered hereby 
                          will constitute either (i) interests
                               ("Grantor Trust Certificates") in a Trust
                           Fund treated as a grantor trust under
                                applicable provisions of the Code, or (ii)
                         "regular interests" ("REMIC Regular
                            Certificates") or "residual interests"
                                ("REMIC Residual Certificates") in a Trust
                              Fund, or a portion thereof, treated as a
                                   REMIC under Sections 860A through 860G of the
Code.     

                                Investors are advised to consult their tax
                                advisors and to review "FEDERAL INCOME TAX
                             CONSEQUENCES" herein and in the related
            Prospectus Supplement.

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RISK FACTORS

 Investors should consider, among other things, the following factors in
connection with the purchase of the Certificates:                               

  Limited Liquidity. There can be no assurance that a secondary market for
the Certificates of any Series will develop or, if it does develop, that it will
provide Certificateholders with liquidity of investment or that it will continue
for the life of the Certificates of any Series. The Prospectus Supplement for   
any Series of Certificates may indicate that an underwriter specified therein   
intends to establish a secondary market in such Certificates; however, no       
underwriter will be obligated to do so and offerings may be effected hereunder  
without participation by any underwriter. The Certificates will not be listed on
any securities exchange. Consequently, the ability of Certificateholders to sell
Certificates may be adversely affected.                                         

    Limited Obligations. The Certificates will not represent an interest in or
obligation of the Depositor, BankAmerica Corporation ("BankAmerica"), Bank of   
America, FSB or any of their affiliates. The only obligations of the foregoing  
entities with respect to the Certificates or the Mortgage Loans will be (i) the 
obligations (if any) of any such entity pursuant to certain limited             
representations and warranties made with respect to the Mortgage Loans sold by  
it and (ii) the Master Servicer's servicing obligations under the related       
Pooling Agreement (including its limited obligation to make certain advances in 
the event of delinquencies on the Mortgage Loans, but only to the extent deemed 
recoverable), and, if and to the extent expressly described in the related      
Prospectus Supplement, certain limited obligations of the Master Servicer in    
connection with an obligation under the Pooling Agreement to purchase or act as 
remarketing agent with respect to a Convertible Mortgage Loan upon conversion to
a fixed rate Mortgage Loan. Neither the Certificates nor the underlying Mortgage
Loans will be guaranteed or insured by any governmental agency or               
instrumentality, or by the Depositor, BankAmerica, Bank of America, FSB or any  
of their affiliates. Proceeds of the assets included in the related Trust Fund  
for each Series of Certificates (including the Mortgage Loans and any form of   
credit enhancement) will be the sole source of payments on the Certificates, and
there will be no recourse to the Depositor, BankAmerica, Bank of America, FSB or
any other entity in the event that such proceeds are insufficient or otherwise  
unavailable to make all payments provided for under the Certificates. In the    
event losses exceed the amount of coverage provided by any form of credit       
enhancement or losses of a type not covered by any credit enhancement occur,    
such losses will be borne by the holders of the related Certificates (or certain
Classes thereof).                                                               

Limitations, Reduction and Substitution of Credit Enhancements. With  
respect to each Series of Certificates, credit enhancement may be provided in   
limited amounts to cover certain types of losses on the underlying Mortgage     
Loans. Credit enhancement will be provided in one or more of the forms referred 
to herein, including, but not limited to: subordination of other Classes of     
Certificates of the same Series; a Letter of Credit; a Mortgage Pool Insurance  
Policy; a Special Hazard Insurance Policy; a Certificate Insurance Policy; a    
Bankruptcy Bond; a Reserve Fund; or any combination thereof. See "SUBORDINATION"
and "DESCRIPTION OF CREDIT ENHANCEMENTS" herein. Regardless of the form of      
credit enhancement provided, the amount of coverage will be limited in amount   
and in most cases will be subject to periodic reduction in accordance with a    
schedule or formula. Furthermore, such credit enhancements may provide only very
limited coverage as to certain types of losses or risks, and may provide no     
coverage as to certain other types of losses or risks. All or a portion of the  
credit enhancement for any Series of Certificates will generally be permitted to
be reduced, terminated or substituted for, if each applicable Rating Agency     
indicates that the then-current rating thereof will not be adversely affected.  
The rating of any Series of Certificates by any applicable Rating Agency may be 
lowered following the initial issuance thereof as a result of the downgrading of
the obligations of any applicable credit support provider, or as a result of    
losses on the related Mortgage Loans in excess of the levels contemplated by    
such Rating Agency at the time of its initial rating analysis. Neither the      
Depositor, BankAmerica, Bank of America, FSB nor any of their affiliates will   
have any obligation to replace or supplement any credit enhancement, or to take 
any other action to maintain any rating of any Series of Certificates. In the   
event losses exceed the amount of coverage provided by any credit enhancement or
losses of a type not covered by any credit enhancement occur, such losses will  
be borne by the holders of the related Certificates (or certain Classes         
thereof). See "DESCRIPTION OF CREDIT ENHANCEMENTS -- Reduction of Credit        
Enhancement."                                                                   

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Sensitivity of Mortgage Loan Collections to Residential Real Estate   
Values. An investment in securities such as the Certificates which generally    
represent interests in mortgage loans may be affected by, among other things, a 
decline in real estate values. No assurance can be given that values of the     
Mortgaged Properties (as defined herein) have remained or will remain at their  
levels on the dates of origination of the related Mortgage Loans. 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, in a particular Mortgage Pool  
become equal to or greater than the value of the Mortgaged Properties, the      
actual rates of delinquencies, foreclosures and losses could be higher than     
those now generally experienced in the mortgage lending industry. To the extent 
that such losses are not covered by the applicable credit enhancement, holders  
of Certificates of the Series evidencing interests in the related Mortgage Pool 
will bear all risk of loss resulting from default by Mortgagors and will have to
look primarily to the value of the Mortgaged Properties for recovery of the     
outstanding principal and unpaid interest on the defaulted Mortgage Loans.      

Sensitivity of Mortgage Loan Collections to Changes in Interest       
Rates. Certain of the types of loans which may be included in the Mortgage Pools
may involve additional uncertainties not present in traditional types of loans. 
For example, certain of the Mortgage Loans provide for escalating or variable   
payments by the borrower under the Mortgage Loan (the "Mortgagor"), as to which 
the Mortgagor is generally qualified on the basis of the initial payment amount.
In some instances, the Mortgagors may not be able to make their loan payments as
such payments increase and thus the likelihood of default will increase. In the 
event losses exceed the amount of coverage provided by any form of credit       
enhancement or losses of a type not covered by any credit enhancement occur,    
such losses will be borne by the holders of the related Certificates (or certain
Classes thereof).                                                               

   Geographic Concentration of Mortgage Loans. Certain geographic regions of
the United States from time to time will experience weaker regional economic    
conditions and housing markets, and, consequently, will experience higher rates 
of loss and delinquency than will be experienced on mortgage loans generally.   
For example, a region's economic condition and housing market may be directly,  
or indirectly, adversely affected by natural disasters or civil disturbances    
such as earthquakes, hurricanes, floods, eruptions or riots. The economic impact
of any of these types of events may also be felt in areas beyond the region     
immediately affected by the disaster or disturbance. The Mortgage Loans         
underlying certain Series of Certificates may be concentrated in these regions, 
and such concentration may present risk considerations in addition to those     
generally present for similar mortgage-backed securities without such           
concentration. Certificateholders of any Series as to which the related Mortgage
Loans are concentrated in adversely affected regions may experience losses or   
shortfalls in payments that are greater than those that would be experienced    
absent such concentrations.                                                     

     Failure of Sellers to Repurchase Mortgage Loans in the Event of a Breach of
a Representation or Warranty. Any Mortgage Loan for which a breach of a         
representation or warranty exists will remain in the related Trust Fund in the  
event that a Seller is unable, or disputes its obligation, to repurchase such   
Mortgage Loan. In such event, any resulting losses will be borne by the related 
form of credit enhancement, to the extent available. In the event losses exceed 
the amount of coverage provided by any form of credit enhancement or losses of a
type not covered by any credit enhancement occur, such losses will be borne by  
the holders of the related Certificates (or certain Classes thereof).           

     Yield and Prepayment Uncertainty. The yield to maturity of the Certificates
of each Series will depend on the rate and timing of principal payments         
(including prepayments, liquidations due to defaults, and repurchase) on the    
Mortgage Loans and the price paid by Certificateholders. Such yield may be      
adversely affected by a higher or lower than anticipated rate of prepayments on 
the related Mortgage Loans. The yield to maturity on Strip Certificates will be 
extremely sensitive to the rate of prepayments on the related Mortgage Loans. In
addition, the yield to maturity on certain other types of Classes of            
Certificates, including Accrual Certificates, Certificates with a Pass-Through  
Rate which fluctuates inversely with an index or certain other Classes in a     
Series including more than one Class of Certificates, may be relatively more    
sensitive to the rate of prepayment on the related Mortgage Loans than other    
Classes of Certificates. Prepayments are influenced by a number of factors,     
including prevailing mortgage market interest rates, local and regional economic

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conditions and homeowner mobility. See "YIELD CONSIDERATIONS" and "MATURITY AND 
PREPAYMENT CONSIDERATIONS" herein.                                              

THE MORTGAGE POOLS

GENERAL                                                                         

   Each Mortgage Pool will consist of conventional Mortgage Loans, minus any
portion of the interest payable thereon retained by the Depositor or a Seller   
(the "Retained Yield"), if any, evidenced by promissory notes (the "Mortgage    
Notes") secured by first mortgages or first deeds of trust or other similar     
security instruments (the "Mortgages") creating a first lien on one- to         
four-family residential properties (the "Mortgaged Properties"), or interests in
such Mortgage Loans. The Mortgaged Properties will consist primarily of         
owner-occupied attached or detached single-family dwelling units, two- to       
four-family dwelling units, condominiums, townhouses, row houses, individual    
units in planned-unit developments and certain other dwelling units, and the    
fee, leasehold or other interests in the underlying real property. The Mortgaged
Properties may include vacation, second and non-owner-occupied homes. If        
specified in the Prospectus Supplement relating to a Series of Certificates, a  
Mortgage Pool may contain cooperative apartment loans ("Cooperative Loans")     
evidenced by promissory notes ("Cooperative Notes") secured by securities       
interests in shares issued by private cooperative housing corporations (each, a 
"Cooperative") and in the related proprietary leases or occupancy agreements    
granting exclusive rights to occupy specific dwelling units in the related      
buildings. As used herein, unless the context indicates otherwise, "Mortgage    
Loans" includes Cooperative Loans, "Mortgaged Properties" includes shares in the
related Cooperative and the related proprietary leases or occupancy agreements  
securing Cooperative Notes, "Mortgage Notes" includes Cooperative Notes and     
"Mortgage" includes a security agreement with respect to a Cooperative Note.    

 Each Mortgage Loan will be selected by the Depositor for inclusion in a
Mortgage Pool from among those originated by Bank of America, FSB or another    
affiliate of the Depositor (each, an "Affiliated Seller") or purchased either   
directly or through its affiliates from banks, savings associations, mortgage   
bankers, investment banking firms, the FDIC and other mortgage loan originators 
or sellers not affiliated with the Depositor ("Unaffiliated Sellers"), all as   
described below under "MORTGAGE LOAN PROGRAM." Affiliated Sellers and           
Unaffiliated Sellers are collectively referred to herein as "Sellers". The      
characteristics of the Mortgage Loans are as described in the related Prospectus
Supplement. Other mortgage loans available for purchase by the Depositor may    
have characteristics which would make them eligible for inclusion in a Mortgage 
Pool but were not selected for inclusion in such Mortgage Pool.                 

  Each Series of Certificates will evidence interests in one Mortgage Pool
including Mortgage Loans having an aggregate principal balance of not less than 
approximately $10,000,000 as of the Cut-off Date. Each Certificate will evidence
an interest in only the related Mortgage Pool and corresponding Trust Fund, and 
not in any other Mortgage Pool or Trust Fund.                                   

THE MORTGAGE LOANS                                                              

     All of the Mortgage Loans in a Mortgage Pool will (i) have monthly payments
due on the first of each month, (ii) be secured by Mortgaged Properties located 
in any of the 50 states or the District of Columbia and (iii) be of one of the  
following types of mortgage loans described or referred to in paragraphs        
numbered (1) through (4):                                                       

      (1) Fixed-rate, fully-amortizing mortgage loans (which may include
     mortgage loans converted from adjustable-rate mortgage loans) providing for
 level monthly payments of principal and interest over the terms of such
Mortgage Loans;                                                       

     (2) Fully-amortizing adjustable-rate mortgage loans ("ARM Loans")
having an original term to maturity of not more than 40 years, with a 
     related interest rate (a "Mortgage Rate") which generally adjusts initially
 either one, three or six months or one, three, five, seven or ten years
     subsequent to the initial payment date, and thereafter at either one-month,
six-month, one-year or other intervals (with                          

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    corresponding adjustments in the amount of monthly payments) over the term
  of the mortgage loan to equal the sum of a fixed percentage set forth in
  the related Mortgage Note (the "Note Margin") and an index*. The related
  Prospectus Supplement will set forth the relevant index and the highest,
  lowest and weighted average Note Margin with respect to the ARM Loans in
the related Mortgage Pool. The related Prospectus Supplement will also
   indicate any periodic or lifetime limitations on changes in any per annum
  Mortgage Rate at the time of any adjustment. If specified in the related
    Prospectus Supplement, an ARM Loan may include a provision that allows the
   Mortgagor to convert the adjustable Mortgage Rate to a fixed rate at some
     point during the term of such ARM Loan generally during the period from one
to twelve years subsequent to the initial payment date;               

      (3) Mortgage Loans having an original term to maturity of not more
than 30 years with a Mortgage Rate which adjusts initially five years 
subsequent to the initial payment date, and thereafter at one-month,  
   six-month, one-year or other intervals (with corresponding adjustments in
     the amount of monthly payments) over the term of the mortgage loan to equal
 the sum of the related Note Margin and Index, and providing for monthly
  payments of interest only prior to the date of the initial Mortgage Rate
adjustment and monthly payments of principal and interest thereafter  
    sufficient to fully-amortize the Mortgage Loans over their remaining terms
 to maturity ("Net 5 Loans"). The related Prospectus Supplement will set
    forth the relevant index and the highest, lowest and weighted average Note
  Margin with respect to the Net 5 Loans in the related Mortgage Pool. The
   related Prospectus Supplement will also indicate any periodic or lifetime
  limitations on changes in any per annum Mortgage Rate at the time of any
adjustment; or                                                        

      (4) Balloon mortgage loans ("Balloon Loans"), which are fixed-rate
     mortgage loans having original terms to maturity of generally five or seven
     years as described in the related Prospectus Supplement, with level monthly
payments of principal and interest based on a 30-year amortization    
    schedule. The amount of the monthly payment will remain constant until the
  maturity date, upon which date the full outstanding principal balance on
such Balloon Loan will be due and payable (such amount, the "Balloon  
Amount").                                                             

   Certain information, including information regarding loan-to-value ratios
(each, a "Loan-to-Value Ratio") at origination of the Mortgage Loans underlying 
each Series of Certificates, will be supplied in the related Prospectus         
Supplement. The Loan-to-Value Ratio at origination is defined generally as the  
ratio, expressed as a percentage, of the principal amount of the Mortgage Loan  
at origination to the lesser of (x) the appraised value determined in an        
appraisal obtained at origination of such Mortgage Loan and (y) the sales price 
for the related Mortgaged Property. The lesser of the items described in (x) and
(y) of the preceding sentence is hereinafter referred to as the "Appraised      
Value."                                                                         

    The Mortgage Loans may be "equity refinance" Mortgage Loans, as to which a
portion of the proceeds are used to refinance an existing mortgage loan, and the
remaining proceeds may be retained by the Mortgagor or used for purposes        
unrelated to the Mortgaged Property. Alternatively, the Mortgage Loans may be   
"rate and term refinance" Mortgage Loans, as to which substantially all of the  
proceeds (net of related costs incurred by the Mortgagor) are used to refinance 
an existing mortgage loan or loans (which may include a junior lien) primarily  
in order to change the interest rate or other terms thereof. The Mortgage Loans 
may be mortgage loans which have been consolidated and/or have had various terms
changed, mortgage loans which                                                   

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

* The index (the "Index") for a particular Mortgage Pool will be specified in   
the related Prospectus Supplement and may include one of the following      
indices: (i) the twelve-month average of monthly yields on actively traded  
  U.S. Treasury securities adjusted to a constant maturity of one year, (ii) the
weekly average yield on U.S. Treasury securities adjusted to a constant     
maturity of one year, (iii) the weekly average of the secondary market      
interest rates on six-month negotiable certificates of deposit, (iv) the    
average of interbank offered rates for six-month U.S. dollar-denominated    
deposits in the London market, or (v) the monthly weighted average cost of  
 funds for member institutions of the Federal Home Loan Bank of San Francisco,
 each calculated as of a date prior to each scheduled interest rate adjustment
date which will be specified in the related Prospectus Supplement.          

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have been converted from adjustable rate mortgage loans to fixed rate mortgage  
loans, or construction loans which have been converted to permanent mortgage    
loans. The Mortgagors may be required to or have the option to make payments by 
means of automatic debits from their checking or savings accounts. In addition, 
a Mortgaged Property may be subject to secondary financing at the time of       
origination of the Mortgage Loan or thereafter.                                 

   If provided for in the related Prospectus Supplement, a Mortgage Pool may
contain ARM Loans which allow the Mortgagors to convert the adjustable rates on 
such Mortgage Loans to a fixed rate at some point during the life of such       
Mortgage Loans (each such Mortgage Loan, a "Convertible Mortgage Loan"),        
generally during the period from one to twelve years subsequent to the date of  
origination, depending upon the length of the initial adjustment period. If     
specified in the related Prospectus Supplement, upon any conversion, the        
Depositor or the Master Servicer, Seller or a third party may have the          
obligation or the option to purchase the converted Mortgage Loan as and to the  
extent set forth in the related Prospectus Supplement. If specified in the      
related Prospectus Supplement, the Depositor or the Master Servicer (or another 
party specified therein) may agree to act as remarketing agent with respect to  
such converted Mortgage Loans and, in such capacity, to use its best efforts to 
arrange for the sale of converted Mortgage Loans in the event that such party   
does not exercise its option to purchase such converted Mortgage Loans. Upon the
failure of any party to fulfill its obligation or exercise its option to        
purchase any such converted Mortgage Loan or the inability of any remarketing   
agent to arrange for the sale of the converted Mortgage Loan, the related       
Mortgage Pool will thereafter include both fixed rate and adjustable rate       
Mortgage Loans. In addition, the Prospectus Supplement relating to any Series of
Certificates may specify other arrangements relating to the Convertible Loans   
upon their conversion.                                                          

If provided for in the related Prospectus Supplement, certain of the  
Mortgage Loans 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 Mortgage Loan (the "Buydown Period") will be less than the   
scheduled monthly payments on the Mortgage Loan, the resulting difference to be 
made up from (i) an amount (such amount, exclusive of investment earnings       
thereon, being hereinafter referred to as "Buydown Funds") contributed by the   
seller of the Mortgaged Property or another source and placed in a custodial    
account (the "Buydown Account"), (ii) if the Buydown Funds are contributed on a 
present value basis, investment earnings on such Buydown Funds or (iii)         
additional buydown funds to be contributed over time by the Mortgagor's employer
or another source. The applicable Prospectus Supplement or Current Report on    
Form 8-K will contain information with respect to any Buydown Mortgage Loans,   
including information on the interest rate initially payable by the Mortgagor,  
increases in the interest rate paid by the Mortgagor over the term of the       
related Buydown Mortgage Loan and the length of the Buydown Period.             

The Prospectus Supplement for each Series of Certificates will contain
information as to the type of Mortgage Loans which will be included in the      
related Mortgage Pool. Each Prospectus Supplement applicable to a Series of     
Certificates will include certain information, generally as of the Cut-off Date 
and to the extent then available to the Depositor, on an approximate basis, as  
to (i) the aggregate principal balance of the Mortgage Loans, (ii) the type of  
property securing the Mortgage Loans, (iii) the original terms to maturity of   
the Mortgage Loans, (iv) the range of principal balances of the Mortgage Loans  
at origination, (v) the earliest origination date and latest maturity date of   
the Mortgage Loans, (vi) the Loan-to-Value Ratios of the Mortgage Loans, (vii)  
the Mortgage Rate or range of Mortgage Rates borne by the Mortgage Loans, (viii)
if any of the Mortgage Loans are ARM Loans or Net 5 Loans, the applicable Index,
the range of Note Margins and the weighted average Note Margin, (ix) the        
geographical distribution of the Mortgage Loans, (x) the number and aggregate   
principal balance of Buydown Mortgage Loans, if applicable, and (xi) the percent
of ARM Loans which are convertible to fixed-rate mortgage loans, if applicable. 

 A Current Report on Form 8-K will be available to the Purchasers of the
related Series of Certificates at or before the initial issuance of such Series 
of Certificates and will be filed, together with the related Pooling Agreement, 
with the Securities and Exchange Commission within fifteen days after the       
initial issuance of such Certificates. In the event that Mortgage Loans are     
added to or deleted from the Trust Fund after the date of the related Prospectus
Supplement, such addition or deletion will be noted in the Current Report on    
Form 8-K. In addition, specific information with respect to the Mortgage Loans  
in a particular Mortgage Pool and any                                           

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applicable credit enhancements which is not included in the related Prospectus  
Supplement will generally be included in such Current Report on Form 8-K.       

     The Depositor will cause the Mortgage Loans constituting each Mortgage Pool
to be assigned to the Trustee named in the related Prospectus Supplement, for   
the benefit of the holders of all of the Certificates of a Series. The Master   
Servicer will service the Mortgage Loans pursuant to a Pooling Agreement and    
will receive a fee for such services. See "MORTGAGE LOAN PROGRAM" and           
"DESCRIPTION OF THE CERTIFICATES." Certain Mortgage Loans may be serviced for   
the Master Servicer by other mortgage servicing institutions ("Subservicers"),  
which may be affiliates of the Depositor and the Master Servicer. With respect  
to those Mortgage Loans serviced by the Master Servicer through a Subservicer,  
the Master Servicer will remain liable for its servicing obligations under the  
related Pooling Agreement as if the Master Servicer alone were servicing such   
Mortgage Loans.                                                                 

  As specified in the related Prospectus Supplement, (i) the Depositor may
assign certain limited representations and warranties regarding the Mortgage    
Loans, and (ii) the Depositor may have made certain limited representations and 
warranties regarding the Mortgage Loans. The Depositor's assignment of the      
Mortgage Loans to the Trustee will be without recourse. See "DESCRIPTION OF THE 
CERTIFICATES -- Assignment of Mortgage Loans." The Master Servicer's obligations
with respect to the Mortgage Loans will consist principally of its contractual  
servicing obligations under the related Pooling Agreement (including its        
obligation to enforce certain purchase and other obligations of Sellers and     
Subservicers, if any, as more fully described herein under "MORTGAGE LOAN       
PROGRAM--Representations and Warranties by Sellers," and "DESCRIPTION OF THE    
CERTIFICATES -- Assignment of Mortgage Loans," and its obligation to make       
certain cash advances in the event of delinquencies in payments on or with      
respect to the Mortgage Loans in amounts described herein under "DESCRIPTION OF 
THE CERTIFICATES -- Advances"). The obligation of the Master Servicer to make   
advances will be limited to amounts which the Master Servicer believes          
ultimately would be reimbursable out of the proceeds of liquidation of the      
Mortgage Loans or any applicable form of credit support. See "DESCRIPTION OF THE
CERTIFICATES -- Advances."                                                      

THE DEPOSITOR 

    The Depositor was incorporated in the State of Delaware on May 6, 1996 and
filed a Certificate of Amendment of Certificate of Incorporation changing its   
name to "BA Mortgage Securities, Inc." on August 23, 1996. Bank of America, FSB 
acquired, subject to regulatory approval, all of the outstanding stock of the   
Depositor from its affiliate, Bank of America National Trust and Savings        
Association ("Bank of America NT&SA"), on January 1, 1998. It is not expected   
that the Depositor will have any business operations other than offering        
Certificates and related similar activities.                                    

The principal executive offices of the Depositor are located at 345   
Montgomery Street, Lower Level #2, Unit #8152, San Francisco, California 94104. 
The Depositor's telephone number is (415) 622-3676.                             

MORTGAGE LOAN PROGRAM 

The Depositor will purchase the Mortgage Loans, either directly or    
indirectly through its affiliates, from Sellers. The Mortgage Pools may consist 
of Mortgage Loans purchased from Affiliated Sellers, Unaffiliated Sellers or    
both Unaffiliated Sellers and Affiliated Sellers. A description of Bank of      
America, FSB is given below under "-- Bank of America, FSB," and the Prospectus 
Supplement related to any Series of Certificates for which the underlying       
Mortgage Pool contains a substantial number of Mortgage Loans purchased from any
other Affiliated Seller will describe such Affiliated Seller. The Mortgage Loans
purchased from Affiliated Sellers will generally have been originated in        
accordance with the underwriting standards of the Affiliated Sellers, as        
described below under "-- Underwriting Standards."                              

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   The Prospectus Supplement related to any Series of Certificates for which
the underlying Mortgage Pool contains a substantial number of Mortgage Loans    
purchased from an Unaffiliated Seller will describe such Unaffiliated Seller.   
The Mortgage Loans purchased from Unaffiliated Sellers may have been originated 
in accordance with underwriting standards that vary substantially from those    
used by Affiliated Sellers. See "-- Underwriting Standards" and                 
"-- Qualifications of Unaffiliated Sellers" below.                              

BANK OF AMERICA, FSB                                                            

With more than $14 billion in assets as of September 30, 1997, Bank of
America, FSB, a subsidiary of BankAmerica Corporation, originates and services  
home loans nationwide through retail, wholesale, and other specialized channels,
and originates and services manufactured housing loans throughout the United    
States. In addition, Bank of America, FSB's Community Development Division      
finances affordable housing projects and offers government-guaranteed small     
business loans in 11 states.                                                    

Bank of America, FSB's deposits are insured by the Federal Deposit    
Insurance Corporation (the "FDIC") to the extent provided by law. Bank of       
America, FSB has been approved as a mortgagee and Seller/Servicer by the        
Department of Housing and Urban Development, the Veterans Administration, the   
Government National Mortgage Association ("GNMA"), the Federal National Mortgage
Association ("FNMA") and Federal Home Loan Mortgage Corporation ("FHLMC"). Bank 
of America, FSB has been an active one- to four-family residential real estate  
mortgage lender since 1992. It originates both fixed and adjustable rate loans  
throughout the United States. See "-- Residential Mortgage Loan Servicing       
Activities" and "-- Delinquency, Foreclosure and Loss Experience" for a         
description of Bank of America, FSB's loan servicing operations and activities. 

     Bank of America, FSB's headquarters is located in Portland, Oregon, and its
administrative offices are located at 555 California Street, San Francisco,     
California 94104 (telephone 415-622-2220).                                      

UNDERWRITING STANDARDS                                                          

The Affiliated Sellers have written, and are continuously updating,   
underwriting guides for the origination of one- to four-family residential first
mortgage loans (as modified from time to time, the "Guides"). The underwriting  
standards as set forth in the Guides are continuously revised based on          
prevailing conditions in the residential mortgage market, evolving credit       
standards of the Affiliated Sellers and the investment market for residential   
mortgage loans.                                                                 

   The underwriting standards set forth in the Guides are intended to assess
the prospective borrower's ability and willingness to repay the debt and the    
adequacy of the property as collateral for the loan requested. Credit policies  
of the Affiliated Sellers require that loan underwriters be satisfied that the  
value of the property being financed supports the outstanding loan balance with 
sufficient value at loan origination to mitigate the effects of adverse shifts  
in real estate values. The emphasis, however, remains on the borrowers' ability 
to repay debt.                                                                  

 The real estate lending processes of the Affiliated Sellers for one- to
four-family mortgage loans follow standard procedures, designed to comply with  
applicable federal and state laws and regulations. Initially, a prospective     
borrower is required to complete a detailed application designed to provide to  
the underwriter pertinent information about the prospective borrower, the       
property to be financed and the type of loan desired. Information regarding the 
property to be financed may be provided by the prospective borrower after the   
applicable Affiliated Seller has approved, subject to review of the property to 
be financed, a loan to the prospective borrower. As part of the description of  
the prospective borrower's financial condition, the Affiliated Sellers generally
require a description of assets and liabilities and income and expenses and     
obtain a credit report which summarizes the prospective borrower's credit       
history with merchants and lenders and any public                               

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records, such as bankruptcy. In most cases, employment verification is obtained 
providing current and historical income information. Such employment            
verification is obtained either through the applicable Affiliated Seller's      
analysis of the prospective borrower's W-2 forms for the most recent two years  
and year-to-date earnings statement or most recent two years' tax returns or    
from the prospective borrower's employer, wherein the employer reports the      
length of employment and current salary with that organization. Self-employed   
prospective borrowers generally are required to submit their federal tax returns
for the past two years plus year-to-date financial statements if the loan       
application is made 120 days or longer after the end of the most recent tax year
for which a federal tax return was provided. In general, an employment          
verification is obtained, and with respect to certain loans, a telephonic       
employment confirmation is obtained by the Affiliated Seller.                   

  Beginning in April 1994, the Affiliated Sellers began using an automated
process to assist in making credit decisions on certain residential real estate 
loans. A prospective borrower's credit history is assigned a score based on     
standard criteria designed to predict the possibility of a default by the       
prospective borrower on a mortgage loan. An application from a prospective      
borrower whose score indicates a high probability of default will receive       
scrutiny from a senior underwriter who may override a decision based on the     
credit score. An application from a prospective borrower whose score indicates a
low probability of default is subject to less stringent underwriting guidelines 
and documentation standards to verify the information in the application.       

   With respect to most mortgage loans originated by the Affiliated Sellers,
once the employment verification (or confirmation) and the credit report are    
received by the underwriter considering the loan application, 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. The Affiliated Sellers have established
as general lending guidelines that the mortgage payments plus applicable real   
property taxes, condominium or homeowner association common charges, hazard     
insurance premiums and premiums on any Primary Mortgage Insurance Policy (as    
defined herein) generally should not exceed 33% of the borrower's gross income, 
and that all monthly payments, including those mentioned above and other        
obligations, such as car payments, generally should not exceed 38% of gross     
income. However, other credit considerations may cause an underwriter to depart 
from (or not consider) these guidelines. The Affiliated Sellers follow standard 
exceptions procedures pursuant to which underwriters generally have delegated   
authority to approve or recommend the approval of loan applications when certain
lending guidelines are not met, including when the ratios of the borrower's     
housing and fixed expenses to gross income exceed 40%. Where there are two      
individuals co-signing any mortgage note, the income and payment obligations of 
both may be included in the computation. With respect to ARM Loans with Mortgage
Rates that adjust initially five or more years after their origination and Net 5
Loans, these ratios are calculated using the initial Mortgage Rates. With       
respect to all other ARM Loans, these ratios are generally calculated using the 
fully-indexed Mortgage Rate.                                                    

   Prior to final loan approval a prospective borrower generally is expected
to have liquid assets sufficient to cover the down-payment, closing costs and   
cash reserves that could be used to pay future housing expenses in a depository 
or related account of the borrower. However, the Affiliated Sellers generally do
not require prospective borrowers to have such liquid assets when they originate
refinance loans.                                                                

An appraisal is made of each property to be financed. The appraisal is
conducted by either a staff appraiser of the applicable Affiliated Seller, or in
some instances, an independent fee appraiser licensed in the jurisdiction where 
such property is located. Generally, as part of the loan origination process,   
the appraiser personally visits the property and estimates its market value on  
the basis of comparable properties and other factors.                           

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     The Affiliated Sellers have generally not made one- to four-family mortgage
loans having Loan-to-Value Ratios above 80% unless they have obtained or caused 
the borrowers to obtain Primary Mortgage Insurance Policies.                    

The Mortgaged Properties may be located in states where, in general, a
lender providing credit on a single-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. See "CERTAIN LEGAL ASPECTS OF THE        
MORTGAGE LOANS -- Anti-Deficiency Legislation and Other Limitations on Lenders."
The underwriting standards contained in the Guides applicable to all states     
(including anti-deficiency states) require that the value of the property being 
financed, as indicated by the appraisal, currently supports and is anticipated  
to support in the future the outstanding loan balance, although there can be no 
assurance that such value will support the loan balance in the future.          

     In addition, the Depositor will purchase Mortgage Loans which may not fully
conform to the underwriting standards set forth in the Guides. Certain of the   
Mortgage Loans will be purchased either directly or through an affiliate of the 
Depositor in negotiated transactions, and such negotiated transactions may be   
governed by agreements ("Master Commitments") relating to ongoing purchases of  
Mortgage Loans by the Depositor or such affiliate of the Depositor, from        
Unaffiliated Sellers who will represent that the Mortgage Loans have been       
originated in accordance with underwriting standards agreed to by the Depositor 
or such affiliate of the Depositor. The Depositor or an affiliate of the        
Depositor will generally review only a sample of the Mortgage Loans in any      
delivery of such Mortgage Loans from the related Unaffiliated Seller for credit 
quality.                                                                        

   The underwriting standards utilized in negotiated transactions and Master
Commitments with Unaffiliated Sellers may vary substantially from the           
underwriting standards set forth in the Guides. Such underwriting standards are 
generally intended to provide an underwriter with information to evaluate the   
borrower's repayment ability and the adequacy of the Mortgaged Property as      
collateral. Due to the variety of underwriting standards and review procedures  
that may be applicable to the Mortgage Loans included in any Mortgage Pool, the 
related Prospectus Supplement generally will not distinguish among the various  
underwriting standards applicable to the Mortgage Loans nor describe any review 
for compliance with applicable underwriting standards performed by the Depositor
or an affiliate of the Depositor. Moreover, there can be no assurance that every
Mortgage Loan was originated in conformity with the applicable underwriting     
standards in all material respects, or that the quality or performance of       
Mortgage Loans underwritten pursuant to varying standards as described above    
will be equivalent under all circumstances.                                     

QUALIFICATION OF UNAFFILIATED SELLERS                                           

    Each Unaffiliated Seller must be an institution experienced in originating
and servicing Mortgage Loans of the type contained in the related Mortgage Pool 
in accordance with practices and guidelines which are substantially similar to  
the Guides, must maintain satisfactory facilities to originate and service those
Mortgage Loans, must be a seller/servicer approved by either FNMA or FHLMC and  
must be a mortgagee approved by the Federal Housing Administration or an        
institution the deposit accounts in which are insured by the FDIC. In addition, 
the Depositor will evaluate the financial condition of each Unaffiliated Seller.
However, the Depositor makes no representation regarding the financial condition
of any such Unaffiliated Seller.                                                

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REPRESENTATIONS AND WARRANTIES BY SELLERS                                       

     As specified in the related Prospectus Supplement, (i) each Seller may have
made representations and warranties in respect of the Mortgage Loans sold by    
such Seller to the Depositor which the Depositor will assign to the related     
Trust Fund on the date of initial issuance of the related Series of             
Certificates, and (ii) the Depositor may have made representations and          
warranties in respect of each Mortgage Loan on the date of initial issuance of  
the related Series of Certificates. Such representations and warranties         
generally include, among other things, that at the time of the sale by the      
Depositor of each Mortgage Loan to the applicable Trust Fund: (i) the           
information set forth in the schedule of Mortgage Loans is true and correct in  
all material respects; (ii) except in the case of Cooperative Loans, title      
insurance (or in the case of Mortgaged Properties located in areas where such   
policies are generally not available, an attorney's certificate of title) and   
any required hazard and primary mortgage insurance were effective at the        
origination of each Mortgage Loan, and each policy (or certificate of title)    
remains in full force and effect; (iii) the Seller has good title to each such  
Mortgage Loan and such Mortgage Loan was subject to no offsets, defenses or     
counterclaims except as may be provided under the Relief Act and except to the  
extent that any buydown agreement exists for a Buydown Mortgage Loan; (iv)      
except in the case of Cooperative Loans, each Mortgage is a valid first lien on 
an unencumbered estate in fee simple or leasehold interest in the Mortgaged     
Property (subject only to (a) liens for current real property taxes and special 
assessments, (b) covenants, conditions and restrictions, rights of way,         
easements and other matters of public record as of the date of recording of such
Mortgage, such exceptions appearing of record being acceptable to mortgage      
lending institutions generally or specifically reflected in the mortgage        
originator's appraisal, (c) exceptions set forth in the title insurance policy  
covering such Mortgaged Property and (d) 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); (v) each Mortgaged Property  
is free from material damage and in generally good repair, except for ordinary  
wear and tear; (vi) there are no delinquent tax or assessment liens against the 
Mortgaged Property; (vii) if a Primary Mortgage Insurance Policy is required    
with respect to a Mortgage Loan, such Mortgage Loan is the subject of such a    
policy; (viii) each Mortgage Loan was made in compliance with all applicable    
local, state and federal laws in all material respects; and (ix) that the       
Mortgage Note and documents relating to each Mortgage Loan are genuine and that 
each is the legal, valid and binding obligation of the maker thereof, subject to
certain customary exceptions.                                                   

If the Mortgage Loans include Cooperative Loans, representations and  
warranties with respect to title insurance or hazard insurance will not be      
given. Generally, a Cooperative itself is responsible for the maintenance of    
hazard insurance for property owned by such Cooperative, and the borrowers      
(tenant-stockholders) of such Cooperative do not maintain hazard insurance on   
their individual dwelling units. Title Insurance is not obtained for Cooperative
Loans because such loans are not secured by real property. See "CERTAIN LEGAL   
ASPECTS OF MORTGAGE LOANS AND RELATED MATTERS -- Cooperative Loans."            

In the event of a breach of a Seller's representation or warranty that
materially adversely affects the interests of the Certificateholders in a       
Mortgage Loan, the related Seller will be obligated to cure such breach or      
repurchase or substitute another Mortgage Loan for such Mortgage Loan as        
described below. Promptly upon becoming aware of any breach of a representation 
or warranty which materially and adversely affects the interests of the         
Certificateholders with respect to a Mortgage Loan or Mortgage Loans, the Master
Servicer shall be required to provide notice to the related Seller and request  
that such Seller either cure such breach or repurchase or substitute another    
Mortgage Loan for such Mortgage Loan. However, there can be no assurance that a 
Seller will honor its obligation to cure such breach or repurchase or substitute
another Mortgage Loan for any Mortgage Loan as to which such a breach of a      
representation or warranty arises.                                              

    If a Seller cannot cure a breach of any representation or warranty made by
it in respect of a Mortgage Loan which materially and adversely affects the     
interests of the Certificateholders in such Mortgage Loan within 90 days after  
notice from the Master Servicer, such Seller will be obligated to purchase such 
Mortgage Loan. The Purchase Price for any such Mortgage Loan will be equal to   
the principal balance thereof as of the                                         

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date of purchase plus accrued and unpaid interest to the first day of the month 
following the month of repurchase at the Pass-Through Rate. If specified in the 
related Prospectus Supplement, as to any such Mortgage Loan required to be      
purchased by the related Seller as provided above, rather than repurchase the   
Mortgage Loan, the related Seller may, at its sole option, remove such Mortgage 
Loan (a "Deleted Mortgage Loan") from the Trust Fund and substitute in its place
another Mortgage Loan of like kind (a "Qualified Substitute Mortgage Loan");    
however, such substitution must be effected within 120 days of the date of the  
initial issuance of the Certificates with respect to a Trust Fund for which no  
REMIC election is to be made. With respect to a Trust Fund for which a REMIC    
election is to be made, such substitution of a defective Mortgage Loan must be  
effected within two years of the date of the initial issuance of the            
Certificates, and may not be made if such substitution would cause the Trust    
Fund to not qualify as a REMIC or result in a prohibited transaction tax under  
the Internal Revenue Code of 1986 (the "Code"). Any Qualified Substitute        
Mortgage Loan generally will, on the date of substitution, (i) have an          
outstanding principal balance, after deduction of the principal portion of the  
monthly payment due in the month of substitution, not in excess of the          
outstanding principal balance of the Deleted Mortgage Loan (the amount of any   
shortfall to be deposited in a custodial account (the "Custodial Account") in   
the month of substitution for distribution to the Certificateholders), (ii) have
a Mortgage Rate and a Net Mortgage Rate not less than (and not more than one    
percentage point greater than) the Mortgage Rate and Net Mortgage Rate,         
respectively, of the Deleted Mortgage Loan as of the date of substitution, (iii)
have a Loan-to-Value Ratio at the time of substitution no higher than that of   
the Deleted Mortgage Loan at the time of substitution, (iv) have a remaining    
term to maturity not greater than (and not more than one year less than) that of
the Deleted Mortgage Loan, and (v) comply with all of the representations and   
warranties set forth in the related mortgage loan purchase agreement as of the  
date of substitution. (Section 2.04) The related Pooling Agreement may include  
additional requirements relating to ARM Loans, Net 5 Loans or other specific    
types of Mortgage Loans, or additional provisions relating to meeting the       
foregoing requirements on an aggregate basis where a number of substitutions    
occur contemporaneously. This substitution or repurchase obligation constitutes 
the sole remedy available to the Certificateholders or the Trustee for any such 
breach.                                                                         

RESIDENTIAL MORTGAGE LOAN SERVICING ACTIVITIES                                  

Residential mortgage loans originated by the Affiliated Sellers, or   
purchased from Unaffiliated Sellers, including the Mortgage Loans, are serviced 
currently by Bank of America, FSB at either its servicing facility located in   
Cypress, California (the "Cypress Center") or its servicing facility located in 
Richmond, Virginia (the "Richmond Center"). Bank of America, FSB acquired the   
Cypress Center from Bank of America NT&SA on January 1, 1998. On September 30,  
1997, the Cypress Center was servicing approximately 443,000 mortgage loans with
an aggregate principal balance of $54,370,000,000 and the Richmond Center was   
servicing approximately 409,000 mortgage loans with an aggregate principal      
balance of $35,660,000,000.                                                     

The Cypress Center and Richmond Center are responsible for answering  
customers inquiries, receiving loan payments, reporting to investors,           
maintaining hazard insurance or a blanket hazard policy, monitoring payment of  
taxes, assessments and, when applicable, Primary Mortgage Insurance Policies,   
and all mortgage accounting and record keeping. The Cypress Center and Richmond 
Center also are responsible for collection efforts on delinquent residential    
mortgage loans and foreclosures thereon. Separate units exist within affiliates 
of BankAmerica to manage and dispose of other real estate owned.                

    Because both Centers service loans for governmental and quasi-governmental
agencies of the U.S. Government, the Centers are regularly examined by Bank of  
America, FSB's internal and external auditors and periodically by FNMA, FHLMC,  
GNMA, the Office of Thrift Supervision ("OTS") and the Department of Housing and
Urban Development. Certain financial records of Bank of America, FSB relating to
its mortgage servicing activities are reviewed annually by its independent      
public accountants.                                                             

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DELINQUENCY, FORECLOSURE AND LOSS EXPERIENCE                                    

    The delinquency, foreclosure and loss experience on the portfolios of one-
to four-family first mortgage loans owned by Bank of America, FSB and Bank of   
America NT&SA and serviced or subserviced by Bank of America, FSB are set forth 
in the following table.* The delinquency, foreclosure and loss experience       
indicated excludes certain loans originated by private banking units of Bank of 
America, FSB's affiliates. The portfolio of mortgage loans serviced or          
subserviced by Bank of America, FSB includes both fixed and adjustable interest 
rate mortgage loans, including Buydown Mortgage Loans, loans with stated        
maturities of 15 to 40 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, foreclosure 
and loss experience set forth below with respect to the portfolio of one- to    
four-family first mortgage loans owned by Bank of America, FSB and Bank of      
America NT&SA and serviced or subserviced by Bank of America, FSB will be       
similar to the results that may be experienced with respect to the Mortgage     
Loans underlying any Series of Certificates.                                    

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

* The delinquency, foreclosure and loss experience indicated includes the       
delinquency, foreclosure and loss experience on mortgage loans owned by Bank
  of America NT&SA and serviced by it prior to January 1, 1998. Bank of America,
FSB acquired the Cypress Center on January 1, 1998. In addition, the        
delinquency, foreclosure and loss experience set forth for 1997 includes    
certain mortgage loans, with an aggregate principal balance that does not   
exceed 15% of the total portfolio by dollar amount for any period indicated,
that are owned by an affiliate of Bank of America, FSB (other than Bank of  
America NT&SA) and serviced or subserviced by Bank of America, FSB.         

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DELINQUENCY, FORECLOSURE AND LOSS EXPERIENCE

                                                        [Enlarge/Download Table]

                                              AT OR FOR THE YEAR ENDED DECEMBER 31,                                            
                           ---------------------------------------------------------------------------       AT OR FOR THE     
                                                                                                        NINE-MONTH PERIOD ENDED
                                    1994                      1995                      1996              SEPTEMBER 30, 1997   
                           -----------------------   -----------------------   -----------------------  -----------------------
                                       BY DOLLAR                 BY DOLLAR                 BY DOLLAR                BY DOLLAR  
                             BY        AMOUNT OF       BY        AMOUNT OF       BY        AMOUNT OF      BY        AMOUNT OF  
                           NO. OF        LOANS       NO. OF        LOANS       NO. OF        LOANS      NO. OF        LOANS    
                            LOANS    (IN MILLIONS)    LOANS    (IN MILLIONS)    LOANS    (IN MILLIONS)   LOANS    (IN MILLIONS)
                           -------   -------------   -------   -------------   -------   -------------  -------   -------------
                                                                                                                               
Total Portfolio........... 176,254     $25,619.6     174,863     $26,335.1     149,178     $27,832.2    171,210     $31,302.8  
Average Portfolio                                                                                                              
  Balance(1).............. 174,462      25,364.7     178,221      26,308.5     160,712      27,105.7    184,752      33,202.6  
Period of Delinquency                                                                                                          
  31 to 59 days...........   2,318         299.2       2,728         367.5       2,613         366.2      3,554         475.7  
  60 to 89 days...........     653          98.4         779         118.3         662          96.7        946         131.9  
  90 days or more(2)......   1,021         195.2         877         161.7         613          98.3        790         110.9  
                              ----        ------        ----        ------                    ------    --------       ------  
Total Delinquent Loans....   3,992     $   592.8       4,384     $   647.5       3,888     $   561.2      5,290     $   718.5  
Delinquency Ratio.........    2.26%         2.31%       2.51%         2.46%       2.61%         2.02%      3.09%         2.30% 
Foreclosures Pending(3)...     693     $   162.9       1,101     $   216.0         904     $   160.4      1,046     $   171.9  
Foreclosure Ratio.........    0.39%         0.64%       0.63%         0.82%       0.61%         0.58%      0.61%         0.55% 
Losses(4).................     975     $   101.6       1,286     $   112.6       1,832     $    98.8      1,061     $    42.7  
Loss Ratio(5).............    0.56%         0.40%       0.72%         0.43%       1.14%         0.36%      0.77%         0.17% 
Excess Recovery(6)........      (7)           (7)         13     $     0.2          54     $     0.5         48     $     0.6  

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

(1) Average Portfolio Balance for the period indicated is based on end of month 
balances divided by the number of months in the period indicated.       

(2) Does not include Foreclosures Pending.                                      

(3) Includes mortgage loans for which foreclosure proceedings had been          
    instituted and title to which had not been acquired by Bank of America, FSB,
    Bank of America NT&SA, a third party or by an insurer at the date indicated.

(4) Losses are the sum of losses less net gains (Excess Recoveries) on all      
    mortgage loans liquidated during the period indicated. Loss for any mortgage
loan is equal to the difference between (a) the sum of the outstanding  
principal balance plus accrued interest, lost interest income accrued at
    Bank of America, FSB's internal reinvestment rate or Bank of America NT&SA's
   internal reinvestment rate, as applicable, from the date such mortgage loan
became a REO mortgage loan until the date it was liquidated, Servicing  
   Advances and all liquidation expenses related to such mortgage loan and (b)
all amounts received in connection with the liquidation of the related  
mortgaged property. Losses are included in the year in which they were  
expensed or written down.                                               

(5) Loss Ratios are computed by dividing the Losses during the period indicated 
by the Average Portfolio Balance during such period.                    

(6) Excess Recovery is calculated only with the respect to defaulted mortgage   
    loans as to which the liquidation of the related mortgaged property resulted
    in recoveries in excess of the sum of the outstanding principal balance plus
 accrued interest thereon, Servicing Advances and all liquidation expenses
related to such mortgage loan.                                          

(7) Excess Recovery cannot be computed for the indicated period.                

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DESCRIPTION OF THE CERTIFICATES 

GENERAL                                                                         

     Each Series of Certificates will be issued pursuant to a Pooling Agreement,
similar to the form filed as an exhibit to the Registration Statement of which  
this Prospectus is a part. Each Pooling Agreement will be filed with the        
Securities and Exchange Commission as an exhibit to a Current Report on Form    
8-K. The following summaries (together with additional summaries under "THE     
POOLING AGREEMENT" below) describe certain provisions relating to the           
Certificates common to each Pooling Agreement. References in this Prospectus to 
the relevant articles, sections and exhibits of the applicable Pooling Agreement
appear in parenthesis. The summaries do not purport to be complete and are      
subject to, and are qualified in their entirety by reference to, all of the     
provisions of the Pooling Agreement for each Trust Fund and the related         
Prospectus Supplement. Wherever particular sections or defined terms of the     
Pooling Agreement are referred to herein, such sections or defined terms are    
thereby incorporated herein by reference.                                       

    Certificates of each Series covered by a particular Pooling Agreement will
evidence specified beneficial ownership interests in a separate Trust Fund      
created pursuant to such Pooling Agreement. (Article I and Sections 5.01 and    
5.02) A Trust Fund will consist of, to the extent provided in the Pooling       
Agreement: (i) such Mortgage Loans (and the related mortgage documents) or      
interests therein underlying a particular Series of Certificates as from time to
time are subject to the Pooling Agreement (exclusive of any Retained Yield      
(described below)); (ii) such assets including, without limitation, all payments
and collections in respect of the Mortgage Loans due after the related Cut-off  
Date, as from time to time are identified as deposited in respect thereof in the
Custodial Account and in the related Certificate Account; (iii) property        
acquired by foreclosure of such Mortgage Loans or deed in lieu of foreclosure;  
(iv) hazard insurance policies and Primary Mortgage Insurance Policies, if any, 
and certain proceeds thereof; and (v) any combination, as and to the extent     
specified in the related Prospectus Supplement, of a Letter of Credit, Mortgage 
Pool Insurance Policy, Special Hazard Insurance Policy, Certificate Insurance   
Policy, Bankruptcy Bond or other type of credit enhancement as described under  
"DESCRIPTION OF CREDIT ENHANCEMENTS." To the extent that any Trust Fund includes
certificates of interest or participations in Mortgage Loans, the related       
Prospectus Supplement will describe the material terms and conditions of such   
certificates or participations. (Article I)                                     

    Each Series of Certificates may consist of any one or a combination of the
following: (i) a single Class of Certificates; (ii) two or more Classes of      
Certificates, one or more Classes of which will be senior ("Senior              
Certificates") in right of payment to one or more of the other Classes          
("Subordinate Certificates"), and as to which certain Classes of Senior (or     
Subordinate) Certificates may be senior to other Classes of Senior (or          
Subordinate) Certificates, as described in the respective Prospectus Supplement 
(any such Series, a "Senior/Subordinate Series"); (iii) two or more Classes of  
Certificates, one or more Classes ("Strip Certificates") of which will be       
entitled to (a) principal distributions, with disproportionate, nominal or no   
interest distributions or (b) interest distributions, with disproportionate,    
nominal or no principal distributions; (iv) two or more Classes of Certificates 
which differ as to the timing, sequential order, rate, pass-through rate or     
amount of distributions of principal or interest or both, or as to which        
distributions of principal or interest or both on any Class may be made upon the
occurrence of specified events, in accordance with a schedule or formula        
(including "planned amortization Classes" and "targeted amortization Classes"), 
or on the basis of collections from designated portions of the Mortgage Pool,   
which Series may include one or more Classes of Certificates ("Accrual          
Certificates") with respect to which certain accrued interest will not be       
distributed but rather will be added to the principal balance thereof on each   
Distribution Date for the period described in the related Prospectus Supplement;
or (v) other types of Classes of Certificates, as described in the related      
Prospectus Supplement. Credit support for each Series of Certificates will be   
provided by a Mortgage Pool Insurance Policy, Special Hazard Insurance Policy,  
Certificate Insurance Policy, Bankruptcy Bond, Letter of Credit, Reserve Fund or
other credit enhancement as described under "DESCRIPTION OF CREDIT              
ENHANCEMENTS," by the subordination of one or more Classes of Certificates as   
described under "SUBORDINATION" or by any combination of the foregoing, as      
specified in the Prospectus Supplement applicable for such Series.              

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If so specified in the Prospectus Supplement relating to a Series of  
Certificates, one or more elections may be made to treat the related Trust Fund,
or designated portion thereof, as a REMIC. If such an election is made with     
respect to a Series of Certificates, one of the Classes of Certificates will be 
designated as evidencing the sole Class of "residual interests" in each related 
REMIC, as defined in the Code; alternatively, a separate Class of ownership     
interests will evidence such residual interests. All other Classes of           
Certificates in such Series will constitute "regular interests" in the related  
REMIC, as defined in the Code and will be designated as such. As to each Series,
all Certificates offered hereby will be rated in one of the four highest rating 
categories by one or more Rating Agencies. As to each Series of Certificates as 
to which a REMIC election is to be made, the Depositor, or such other person    
specified in the related Prospectus Supplement, will be obligated to take       
certain specified actions required in order to comply with applicable laws and  
regulations.                                                                    

FORM OF CERTIFICATES                                                            

   If so specified in the related Prospectus Supplement, one or more Classes
of Certificates of a Series will be issued as physical certificates in fully    
registered form only in the denominations specified in the related Prospectus   
Supplement, and will be transferable and exchangeable at the corporate trust    
office of the Certificate Registrar named in the related Prospectus Supplement. 
(Section 5.02) No service charge will be made for any registration of exchange  
or transfer of Certificates, but the Trustee may require payment of a sum       
sufficient to cover any tax or other governmental charge. (Section 5.02) The    
term "Certificateholder" or "Holder" as used herein refers to the entity whose  
name appears on the records of the Certificate Registrar (or, if applicable, the
Transfer Agent) as the registered holder thereof.                               

   If so specified in the related Prospectus Supplement, one or more Classes
of Certificates of a Series ("Book-Entry Certificates") may be initially        
represented by one or more certificates registered in the name of The Depository
Trust Company ("DTC") or other securities depository and be available only in   
the form of book-entries. Any Book-Entry Certificates will initially be         
registered in the name of Cede & Co., the nominee of DTC. Certificateholders may
also hold Certificates of a Series through CEDEL or Euroclear (in Europe), if   
they are participants in such systems or indirectly through organizations that  
are participants in such systems. CEDEL and Euroclear will hold omnibus         
positions on behalf of their participants through customers' certificates       
accounts in CEDEL's and Euroclear's names on the books of their respective      
Depositaries which in turn will hold such positions in customers' certificates  
accounts in the Depositaries' names on the books of DTC. Citibank, N.A.         
("Citibank"), will act as depositary for CEDEL and Morgan Guaranty Trust Company
of New York ("Morgan") will act as depositary for Euroclear (in such capacities,
the "Depositaries").                                                            

Transfers between DTC participants will occur in the ordinary way in  
accordance with DTC rules. Transfers between CEDEL Participants and Euroclear   
Participants will occur in the ordinary way in accordance with their applicable 
rules and operating procedures.                                                 

Cross-market transfers between persons holding directly or indirectly 
through DTC, on the one hand, and directly or indirectly through CEDEL or       
Euroclear Participants, on the other, will be effected in DTC in accordance with
DTC rules on behalf of the relevant European international clearing system by   
its Depositary; however, such cross-market transactions will require delivery of
instructions to the relevant European international clearing system by the      
counterparty in such system in accordance with its rules an procedures and      
within its established deadlines (European time). The relevant European         
international clearing system will, if the transaction meets its settlement     
requirements, deliver instructions to its Depositary to take action to effect   
final settlement on its behalf by delivering or receiving certificates in DTC,  
and making or receiving payment in accordance with normal procedures for        
same-day funds settlement applicable to DTC. CEDEL Participants and Euroclear   
Participants may not deliver instructions directly to the Depositaries.         

     Because of time-zone differences, credits of certificates received in CEDEL
or Euroclear as a result of a transaction with a DTC participant will be made   
during subsequent certificates settlement processing and dated the business day 
following the DTC settlement date. Such credits or any transactions in such     
certificates settled during such processing will be reported to the relevant    
Euroclear or CEDEL participant on such business day. Cash received in CEDEL or  
Euroclear as a result of sales of certificates by or through a CEDEL Participant
or a Euroclear Participant to a DTC Participant will be received with value on  
the DTC settlement                                                              

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date but will be available in the relevant CEDEL or Euroclear cash account only 
as of the business day following settlement in DTC. For information with respect
to tax documentation procedures relating to the Certificates, see "FEDERAL      
INCOME TAX CONSEQUENCES -- Prohibited Transactions and Other Possible REMIC     
Taxes -- Foreign Investors in REMIC Certificates" herein.                       

DTC is a limited-purpose trust company organized under the laws of the
State of New York, a member of the Federal Reserve System, a "clearing          
corporation" within the meaning of the New York Uniform Commercial Code, and a  
"clearing agency" registered pursuant to the provisions of Section 17A of the   
Securities Exchange Act of 1934, as amended. DTC accepts securities for deposit 
from its participating organizations ("Participants") and facilitates the       
clearance and settlement of securities transactions between Participants in such
securities through electronic book-entry changes in accounts of Participants,   
thereby eliminating the need for physical movement of certificates. Participants
include securities brokers and dealers, banks and trust companies and clearing  
corporations and may include certain other organizations. Indirect access to the
DTC system is also available to others such as banks, brokers, dealers and trust
companies that clear through or maintain a custodial relationship with a        
Participant, either directly or indirectly ("Indirect Participants").           

Beneficial owners ("Owners") that are not Participants but desire to  
purchase, sell or otherwise transfer ownership of Book-Entry Certificates may do
so only through Participants (unless and until Definitive Certificates, as      
defined below, are issued). In addition, Owners will receive all distributions  
of principal of, and interest on, the Book-Entry Certificates from the Trustee  
or any Trustee, as the case may be, through DTC and Participants. Owners will   
not receive or be entitled to receive certificates representing their respective
interests in the Book-Entry Certificates, except under the limited circumstances
described below.                                                                

    Unless and until Definitive Certificates (as defined below) are issued, it
is anticipated that the only "holder" of Book-Entry Certificates of any Series  
will be Cede & Co., as nominee of DTC. Owners will only be permitted to exercise
the rights of holders indirectly through Participants and DTC.                  

     While any Book-Entry Certificates of a Series are outstanding (except under
the circumstances described below), under the rules, regulations and procedures 
creating and affecting DTC and its operations (the "Rules"), DTC is required to 
make book-entry transfers among Participants on whose behalf it acts with       
respect to the Book-Entry Certificates and is required to receive and transmit  
distributions of principal of, and interest on, the Book-Entry Certificates.    
Participants with whom Owners have accounts with respect to Book-Entry          
Certificates are similarly required to make book-entry transfers and receive and
transmit such distributions on behalf of their respective Owners. Accordingly,  
although Owners will not possess certificates, the Rules provide a mechanism by 
which Owners will receive distributions and will be able to transfer their      
interests.                                                                      

 Unless and until Definitive Certificates are issued, Owners who are not
Participants may transfer ownership of Book-Entry Certificates of a Series only 
through Participants by instructing such Participants to transfer Book-Entry    
Certificates, by book-entry transfer, through DTC for the account of the        
purchasers of such Book-Entry Certificates, which account is maintained with    
their respective Participants. Under the Rules and in accordance with DTC's     
normal procedures, transfers of ownership of Book-Entry Certificates will be    
executed through DTC and the accounts of the respective Participants at DTC will
be debited and credited. Similarly, the respective Participants will make debits
or credits, as the case may be, on their records on behalf of the selling and   
purchasing Owners.                                                              

  Book-Entry Certificates of a Series will be issued in registered form to
Owners, or their nominees, rather than to DTC (such Book-Entry Certificates     
being referred to herein as "Definitive Certificates") only under the           
circumstances provided in the related Pooling Agreement, which generally will   
include, except if otherwise provided therein, if (i) the Depositor advises the 
Trustee in writing that DTC is no longer willing or able to discharge properly  
its responsibilities as nominee and depository with respect to the Book-Entry   
Certificates of such Series and the Trustee and the Depositor are unable to     
locate a qualified successor, (ii) the Depositor, at its sole option, elects to 
terminate the book-entry system through DTC or (iii) after the occurrence of an 
event of default under the Pooling Agreement, a majority of the aggregate       
Percentage Interest of any Class of Certificates of such Series advises DTC in  
writing that the continuation of a book-entry system through DTC                

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(or a successor thereto) to the exclusion of any physical certificates being    
issued to Owners is no longer in the best interests of Owners of such Class of  
Certificates. Upon issuance of Definitive Certificates of a Series to Owners,   
such Book-Entry Certificates will be transferable directly (and not exclusively 
on a book-entry basis) and registered holders will deal directly with the       
Trustee with respect to transfers, notices and distributions.                   

DTC has advised the Master Servicer and the Depositor that, unless and
until Definitive Certificates are issued, DTC will take any action permitted to 
be taken by a holder only at the direction of one or more Participants to whose 
DTC accounts the Certificates are credited. DTC has advised the Master Servicer 
and the Depositor that DTC will take such action with respect to any Percentage 
Interests of the Book-Entry Certificates of a Series only at the direction of   
and on behalf of such Participants with respect to such Percentage Interests of 
the Book-Entry Certificates. DTC may take actions, at the direction of the      
related Participants, with respect to some Book-Entry Certificates which        
conflict with actions taken with respect to other Book-Entry Certificates.      

    Centrale de Livraison de Valeurs Mobilieres S.A. ("CEDEL") is incorporated
under the laws of Luxembourg as a professional depository. CEDEL holds          
securities for its participating organizations ("CEDEL Participants") and       
facilitates the clearance and settlement of securities transactions between     
CEDEL Participants through electronic book-entry changes in accounts of CEDEL   
Participants, thereby eliminating the need for physical movement of securities. 
Transactions may be settled in CEDEL in any of 28 currencies, including United  
States dollars. CEDEL provides to its Participants, among other things, services
for safekeeping, administration, clearance and settlement of internationally    
traded securities and securities lending and borrowing. CEDEL interfaces with   
domestic markets in several countries. As a professional depository, CEDEL is   
subject to regulation by the Luxembourg Monetary Institute. CEDEL Participants  
are recognized financial institutions around the world including underwriters,  
securities brokers and dealers, banks, trust companies, clearing corporations   
and certain other organizations and may include any underwriters, agents or     
dealers with respect to a Series of Certificates offered hereby. Indirect access
to CEDEL is also available to others, such as banks, brokers, dealers and trust 
companies that clear through or maintain a custodial relationship with a CEDEL  
Participant, either directly or indirectly.                                     

   The Euroclear System ("Euroclear") was created in 1968 to hold securities
for participants of the Euroclear System ("Euroclear Participants") and to clear
and settle transactions between Euroclear Participants through simultaneous     
electronic book-entry delivery against payment, thereby eliminating the need for
physical movement of certificates and any risk from lack of simultaneous        
transfers of securities and cash. Transactions may now be settled in any of 27  
currencies, including United States dollars. The Euroclear System includes      
various other services, including securities lending and borrowing, and         
interfaces with domestic markets in several countries generally similar to the  
arrangements for cross-market transfers with DTC described above. The Euroclear 
System is operated by Morgan Guaranty Trust Company of New York, Brussels,      
Belgium office (the "Euroclear Operator"), under contract with Euroclear        
Clearance System S.C., a Belgian cooperative corporation (the "Euroclear        
Cooperative"). All operations are conducted by the Euroclear Operator, and all  
Euroclear securities clearance accounts and Euroclear cash accounts are accounts
with the Euroclear Operator, not the Euroclear Cooperative. The Euroclear       
Cooperative establishes policy for Euroclear on behalf of Euroclear             
Participants. Euroclear Participants include banks (including central banks),   
securities brokers and dealers with respect to a Series of Certificates offered 
hereby. Indirect access to Euroclear is also available to other firms that clear
through or maintain a custodial relationship with a Euroclear Participant,      
either directly or indirectly.                                                  

The Euroclear Operator is the Belgian branch of a New York banking    
corporation that is a member bank of the Federal Reserve System. As such, it is 
regulated and examined by the Board of Governors of the Federal Reserve System  
and the New York State Banking Department, as well as the Belgian Banking       
Commission.                                                                     

Certificates clearance accounts and cash accounts with the Euroclear  
Operator are governed by the Terms and Conditions Governing Use of Euroclear and
the related Operating Procedures of Euroclear and applicable Belgian law        
(collectively, the "Terms and Conditions"). The Terms and Conditions govern     
transfers of securities and cash within Euroclear, withdrawals of securities and
cash from Euroclear and                                                         

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receipts of payments with respect to securities in the Euroclear. All securities
in Euroclear are held on a fungible basis without attribution of specific       
certificates to specific securities clearance accounts. The Euroclear Operator  
acts under the Terms and Conditions only on behalf of Euroclear Participants,   
and has no record of or relationship with persons holding through Euroclear     
Participants.                                                                   

    Distributions with respect to Certificates held through CEDEL or Euroclear
will be credited to the cash accounts of CEDEL Participants or Euroclear        
Participants in accordance with the relevant systems' rules and procedures, to  
the extent received by its Depositary. Such distributions will be subject to tax
reporting in accordance with relevant United States tax laws and regulations.   
See "FEDERAL INCOME TAX CONSEQUENCES" herein. CEDEL or the Euroclear Operator,  
as the case may be, will take any other action permitted to be taken by a       
Certificateholder under the Pooling Agreement or the relevant Supplement on     
behalf of a CEDEL Participant or Euroclear Participant only in accordance with  
its relevant rules and procedures and subject to its Depositary's ability to    
effect such actions on its behalf through DTC.                                  

ASSIGNMENT OF MORTGAGE LOANS                                                    

 At the time of issuance of a Series of Certificates, the Depositor will
cause the Mortgage Loans being included in the related Trust Fund to be assigned
to the Trustee (or its nominee), together with all principal and interest       
received on or with respect to such Mortgage Loans after the Cut-off Date, other
than principal and interest due on or before the Cut-off Date. If specified in  
the related Prospectus Supplement, the Depositor or a Seller may retain the     
Retained Yield, if any, for itself or transfer the same to others. (Sections    
2.01 and 3.10) The Trustee will, concurrently with such assignment, deliver a   
Series of Certificates to the Depositor in exchange for the Mortgage Loans.     
(Section 2.05) Each Mortgage Loan will be identified in a schedule appearing as 
an exhibit to the related Pooling Agreement. Such schedule will include, among  
other things, information as to the principal balance of each Mortgage Loans as 
of the Cut-off Date, as well as information respecting the Mortgage Rate, the   
currently scheduled monthly payment of principal and interest, the maturity of  
the Mortgage Note and the Loan-to-Value Ratio at origination (without regard to 
any secondary financing). (Article I)                                           

   In addition, the Depositor will, as to each Mortgage Loan, deliver to the
Trustee (or to the custodian described below) the Mortgage Note (and any        
modification or amendment thereto) endorsed without recourse either in blank or 
to the order of the Trustee (or its nominee), the Mortgage with evidence of     
recording indicated thereon or, in the case of a Cooperative Loan, on the       
related financing statement (except for any Mortgage not returned from the      
public recording office) an assignment in recordable form of the Mortgage (or,  
with respect to a Cooperative Loan, an assignment of the related proprietary    
lease or occupancy agreement) and, if applicable, any riders or modifications to
such Mortgage Note and Mortgage, together with certain other documents at such  
times as set forth in the related Pooling Agreement. Such assignments may be    
blanket assignments covering Mortgages secured by Mortgaged Properties located  
in the same county, if permitted by law. In the event that, with respect to any 
Mortgage Loan, the Depositor cannot deliver the Mortgage or any assignment with 
evidence of recording thereon concurrently with the execution and delivery of   
the related Pooling Agreement because of a delay caused by the public recording 
office, the Depositor will deliver or cause to be delivered to the Trustee or   
the custodian a true and correct photocopy of such Mortgage or assignment. The  
Depositor will deliver or cause to be delivered to the Trustee or the custodian 
such Mortgage or assignment with evidence of recording indicated thereon after  
receipt thereof from the public recording office or from the related Seller.    
Assignments of the Mortgage Loans to the Trustee (or its nominee) will be       
recorded in the appropriate public recording office, except in states where, in 
the opinion of counsel acceptable to the Trustee, such recording is not required
to protect the Trustee's interests in the Mortgage Loan against the claim of any
subsequent transferee or any successor to or creditor of the Depositor or the   
originator of such Mortgage Loan. (Section 2.01)                                

The Trustee (or the custodian hereinafter referred to) will hold such 
documents in trust for the benefit of the Certificateholders, and generally will
review such documents within 45 days after receipt thereof in the case of       
documents delivered concurrently with the execution and delivery of the related 
Pooling Agreement, and within the time period specified in the related Pooling  
Agreement in the case of all other documents delivered. If any such document is 
found to be missing or defective in any material respect, the Trustee (or       

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such custodian) shall promptly so notify the Master Servicer and the Depositor, 
the former of which shall notify the related Seller. If the Seller does not cure
the omission or defect within 60 days after notice is given to the Master       
Servicer, the Seller will be obligated to purchase within 90 days of such notice
the related Mortgage Loan from the Trustee at its Purchase Price (or, if so     
specified in the related Prospectus Supplement, will be permitted to substitute 
for such Mortgage Loan under the conditions specified herein and in the related 
Prospectus Supplement). The Master Servicer will be obligated to enforce this   
obligation of the Seller to the extent described above under "MORTGAGE LOAN     
PROGRAM -- Representations and Warranties by Sellers" but subject to the        
provisions described below under "-- Realization Upon Defaulted Mortgage Loans."
There can be no assurance that the applicable Seller will fulfill its obligation
to purchase any Mortgage Loan as described above. Neither the Master Servicer   
nor the Depositor will be obligated to purchase or substitute for such Mortgage 
Loan if the Seller defaults on its obligation to do so. This obligation to      
purchase or substitute for any such Mortgage Loan constitutes the sole remedy   
available to the Certificateholders or the Trustee for omission of, or a        
material defect in, a constituent document. Any Mortgage Loan not so purchased  
or substituted for shall remain in the related Trust Fund.                      

The Trustee will be authorized at any time to appoint one or more     
custodians pursuant to a custodial agreement to hold title to the Mortgage      
Loans, to maintain possession of and, if applicable, to review the documents    
relating to the Mortgage Loans as the agent of the Trustee. The identity of any 
such custodian to be appointed on the date of initial issuance of the           
Certificates will be set forth in the related Prospectus Supplement. Except as  
specified in the following paragraph, such custodian may not be an affiliate of 
the Depositor or the Master Servicer. (Section 8.11)                            

If specified in the Prospectus Supplement related to a Series of      
Certificates, during the period that any Class of Certificates of that Series   
are outstanding and so long as the ratings of the long-term senior unsecured    
debt of BankAmerica Corporation satisfy the rating conditions set forth in the  
Prospectus Supplement, the Master Servicer identified in the Prospectus         
Supplement will hold the original documentation relating to each Mortgage Loan, 
including the related Mortgage Note and Mortgage (such original documentation,  
the "Mortgage File"), as custodian and agent for the Trustee. If BankAmerica's  
long-term senior unsecured debt rating does not satisfy the above-described     
conditions, the Mortgage Files will be delivered to the Trustee or an           
independent custodian on behalf of the Trustee within 90 days of the date such  
conditions are not satisfied. Under the related Pooling Agreement, the Trustee  
will be appointed attorney-in-fact for the Depositor with power to prepare,     
execute and record assignments of the Mortgages in the event that the Depositor 
fails to do so on a timely basis. See "RISK FACTORS -- Creditors' Rights and    
Bankruptcy Considerations" in the applicable Prospectus Supplement for a        
description of the risks to Certificateholders with respect to any such Series. 

     Pursuant to each Pooling Agreement, the Master Servicer, either directly or
through Subservicers, will service and administer the Mortgage Loans assigned to
the Trustee as more fully set forth below.                                      

RETAINED YIELD                                                                  

    For certain Series of Certificates, the Depositor or a Seller may retain a
portion of the interest payable on each Mortgage Loan (the "Retained Yield").   
The Retained Yield will either be set as a fixed rate or will be calculated by  
subtracting the Master Servicing Fee and the Pass-Through Rate from the Mortgage
Rate. Any such Retained Yield and any earnings from reinvestments thereof will  
not be part of the Trust Fund.                                                  

PAYMENTS ON MORTGAGE LOANS; DEPOSITS TO CERTIFICATE ACCOUNT                     

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

          (i) all payments on account of principal, including principal payments
     received in advance of the date on which the related monthly payment is due
(the "Due Date") ("Principal Prepayments"), on the Mortgage Loans     
comprising a Trust Fund;                                              

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

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

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

      (v) all proceeds of any Mortgage Loan in such Trust Fund purchased
(or, in the case of a substitution, certain amounts representing a    
principal adjustment) by the Depositor, any Seller or any other person
pursuant to the terms of the Pooling Agreement. See "MORTGAGE LOAN    
     PROGRAM -- Representations and Warranties by Sellers" and "-- Assignment of
Mortgage Loans" above;                                                

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

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

  In addition to the Custodial Account, the Master Servicer will establish
and maintain, in the name of the Trustee for the benefit of the holders of each 
Series of Certificates, an account for the disbursement of payments on the      
Mortgage Loans evidenced by each Series of Certificates (the "Certificate       
Account"). Both the Custodial Account and the Certificate Account must be either
(i) maintained with a depository institution whose debt obligations at the time 
of any deposit therein are rated by the Rating Agency or Agencies that rated one
or more Classes of Certificates of the related Series not less than a specified 
level comparable to the rating category of such Certificates, (ii) an account or
accounts the deposits in which are fully insured to the limits established by   
the FDIC, provided that any deposits not so insured shall be otherwise          
maintained such that, as evidenced by an opinion of counsel, the                
Certificateholders have a claim with respect to the funds in such accounts or a 
perfected first priority security interest in any collateral securing such funds
that is superior to the claims of any other depositors or creditors of the      
depository institution with which such accounts are maintained, (iii) in the    
case of the Certificate Account, a trust account or accounts maintained at the  
Trustee, or (iv) such other account or accounts acceptable to the Rating Agency 
or Agencies that rated one or more Classes of Certificates of such Series (an   
"Eligible Account"). The collateral that is eligible to secure amounts in an    
Eligible Account is limited to certain permitted investments, which are         
generally limited to United States government securities and other investments  
that are rated, at the time of acquisition, in one of the categories permitted  
by the related Pooling Agreement ("Permitted Investments"). (Article I and      
Section 3.07) A Certificate Account may be maintained as an interest-bearing or 
a non-interest-bearing account, or funds therein may be invested in Permitted   
Investments as described below. The Custodial Account may contain funds relating
to more than one Series of Mortgage Pass-Through Certificates as well as        
payments received on other mortgage loans serviced or master serviced by the    
Master Servicer that have been deposited into the Custodial Account.            

Not later than the business day preceding each Distribution Date (the 
"Certificate Account Deposit Date"), the Master Servicer will withdraw from the 
Custodial Account and deposit into the applicable Certificate Account, in       
immediately available funds, the amount to be distributed therefrom to          
Certificateholders on such Distribution Date. The Master Servicer or the Trustee
will also deposit or cause to be                                                

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deposited into the Certificate Account the amount of any advances made by the   
Master Servicer as described herein under "Advances," any payments under any    
Letter of Credit, any amounts required to be transferred to the Certificate     
Account from a Reserve Fund, as described under "Credit Enhancements" below, any
amounts required to be paid by the Master Servicer out of its own funds due to  
the operation of a deductible clause in any blanket policy maintained by the    
Master Servicer to cover hazard losses on the Mortgage Loans as described under 
"PRIMARY MORTGAGE INSURANCE, HAZARD INSURANCE; CLAIMS THEREUNDER" below and any 
other amounts as specifically set forth in the related Pooling Agreement.       

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

Funds on deposit in the Custodial Account may be invested in Permitted
Investments maturing in general not later than the business day preceding the   
next Distribution Date and funds on deposit in the related Certificate Account  
may be invested in Permitted Investments maturing, in general, no later than the
Distribution Date. All income and gain realized from any such investment will be
for the account of the Master Servicer. The amount of any loss incurred in      
connection with any such investment must be deposited in the Custodial Account  
or in the Certificate Account, as the case may be, by the Master Servicer out of
its own funds upon realization of such loss. (Sections 3.07 and 4.01).          

With respect to each Buydown Mortgage Loan, the Master Servicer will  
deposit the related Buydown Funds provided to it in a Buydown Account which will
comply with the requirements set forth herein with respect to a Custodial       
Account. The terms of Buydown Mortgage Loans will provide for the contribution  
of Buydown Funds in an amount equal to or exceeding either (i) the total        
payments to be made from such funds pursuant to the related buydown plan or (ii)
if such Buydown Funds are to be deposited on a discounted basis, that amount of 
Buydown Funds which, together with investment earnings thereon at a rate that   
will support the scheduled level of payments due under the Buydown Mortgage     
Loan. Neither the Master Servicer nor the Depositor will be obligated to add to 
any such discounted Buydown Funds any of its own funds should investment        
earnings prove insufficient to maintain the scheduled level of payments. To the 
extent that any such insufficiency is not recoverable from the Mortgagor or, in 
an appropriate case, from the Seller, distributions to Certificateholders may be
affected. With respect to each Buydown Mortgage Loan, the Master Servicer will  
withdraw from the Buydown Account and remit to the Custodial Account on or      
before the date specified in the Subservicing Agreement described above the     
amount, if any, of the Buydown Funds (and, if applicable, investment earnings   
thereon) for each Buydown Mortgage Loan that, when added to the amount due from 
the Mortgagor on such Buydown Mortgage Loan, equals the full monthly payment    
which would be due on the Buydown Mortgage Loan if it were not subject to the   
buydown plan. The Buydown Funds will in no event be a part of the related Trust 
Fund.                                                                           

   If the Mortgagor on a Buydown Mortgage Loan prepays such Mortgage Loan in
its entirety during the Buydown Period, the Master Servicer will withdraw from  
the Buydown Account and remit to the Mortgagor or such other designated party in
accordance with the related buydown plan any Buydown Funds remaining in the     
Buydown Account. Generally, if a prepayment by a Mortgagor during the Buydown   
Period together with Buydown Funds will result in full prepayment of a Buydown  
Mortgage Loan, the Master Servicer will be required to withdraw from the Buydown
Account and deposit in the Custodial Account the Buydown Funds and investment   
earnings thereon, if any, which together with such prepayment will result in a  
prepayment in full. Any Buydown Funds so remitted to the Master Servicer in     
connection with a prepayment described in the preceding sentence will be deemed 
to reduce the amount that would be required to be paid by the Mortgagor to repay
fully the related Mortgage Loan if the Mortgage Loan were not subject to the    
buydown plan. Any investment earnings remaining in the Buydown Account after    
prepayment or after termination of the Buydown Period will be remitted to the   
related Mortgagor or such other designated party pursuant to the agreement      
relating to each Buydown Mortgage Loan (the "Buydown Agreement"). If the        
Mortgagor defaults during the Buydown Period with respect to a Buydown Mortgage 
Loan and the property securing such Buydown Mortgage Loan is sold in liquidation
(either by the Master Servicer, the Primary Mortgage Insurer, the insurer under 
the Mortgage Pool Insurance Policy (the "Pool Insurer") or any other insurer),  
the Master                                                                      

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Servicer will withdraw from the Buydown Account the Buydown Funds and all       
investment earnings thereon, if any, and deposit the same in the Custodial      
Account or pay the same to the Primary Mortgage Insurer or the Pool Insurer if  
the Mortgaged Property is transferred to such insurer and such insurer pays all 
of the loss incurred in respect of such default.                                

WITHDRAWALS FROM THE CUSTODIAL ACCOUNT                                          

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

         (i) to make deposits to the Certificate Account in the amounts and in
    the manner provided in the Pooling Agreement and described in "Payments on
Mortgage Loans; Deposits to Certificate Account";                     

    (ii) to reimburse itself or any Subservicer for Advances, or for
amounts advanced in respect of taxes, insurance premiums or similar   
   expenses ("Servicing Advances") as to any Mortgaged Property, out of late
    payments or collections on the related Mortgage Loan with respect to which
such Advances or Servicing Advances were made;                        

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

  (iv) to pay to itself as additional servicing compensation any
   investment income on funds deposited in the Custodial Account, and, if so
     provided in the Pooling Agreement, any profits realized upon disposition of
   a Mortgaged Property acquired by deed in lieu of foreclosure or otherwise
allowed under the Pooling Agreement;                                  

      (v) to pay to the Seller all amounts received with respect to each
  Mortgage Loan repurchased pursuant to the terms of the Pooling Agreement
and not required to be distributed as of the date on which the related
Purchase Price is determined;                                         

  (vi) to pay the Depositor or the Seller, as applicable, or its
assignee all amounts constituting Retained Yield, if any, out of      
collections or payments which represent interest on each Mortgage Loan
    (including any Mortgage Loan as to which title to the underlying Mortgaged
Property was acquired);                                               

   (vii) to reimburse itself or any Subservicer for any Advance or
    Servicing Advance previously made which the Master Servicer has determined
to not be ultimately recoverable from Liquidation Proceeds, Insurance 
     Proceeds or otherwise (a "Nonrecoverable Advance"), subject, in the case of
a Senior/Subordinate Series, to certain limitations set forth in the  
Pooling Agreement as described in the related Prospectus Supplement;  

          (viii) to reimburse itself or the Depositor for certain other expenses
incurred for which it or the Depositor is entitled to reimbursement or
  against which it or the Depositor is indemnified pursuant to the Pooling
Agreement; and                                                        

  (ix) to clear the Custodial Account of amounts relating to the
corresponding Mortgage Loans in connection with the termination of the
    Trust Fund pursuant to the Pooling Agreement, as described in "THE POOLING
AGREEMENT -- Termination; Retirement of Certificates." (Section 3.10) 

DISTRIBUTIONS                                                                   

   Beginning on the Distribution Date in the month next succeeding the month
in which the Cut-off Date occurs (or such other date as may be set forth in the 
related Prospectus Supplement) for a Series of Certificates, distributions of   
principal and interest (or, where applicable, of principal only or interest     
only) on each Class of Certificates entitled thereto will be made either by the 
Trustee, the Master Servicer acting on behalf of the Trustee or a paying agent  
appointed by the Trustee (the "Paying Agent"), to the persons who are registered
as the Holders of such Certificates at the close of business on the last        
business day of the preceding month (the "Record Date") in proportion to their  
respective Percentage Interests. If so specified in the                         

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related Prospectus Supplement, interest which accrues and is not payable on a   
Class of Certificates will be added to the principal balance of each Certificate
of such Class in proportion to its Percentage Interest. The undivided percentage
interest (the "Percentage Interest") represented by a Certificate of a          
particular Class will be equal to the percentage obtained by dividing the       
initial principal balance or notional amount of such Certificate by the         
aggregate initial amount or notional balance of all the Certificates of such    
Class. Distributions will be made in immediately available funds (by wire       
transfer or otherwise) to the account of a Certificateholder at a bank or other 
entity having appropriate facilities therefor, if such Certificateholder has so 
notified the Trustee, the Master Servicer or the Paying Agent, as the case may  
be, and the applicable Pooling Agreement provides for such form of payment, or  
by check mailed to the address of the person entitled thereto as it appears on  
the Certificate Register; provided, however, that the final distribution in     
retirement of the Certificates will be made only upon presentation and surrender
of the Certificates at the office or agency of the Trustee specified in the     
notice to Certificateholders of such final distribution. (Article I and Sections
4.01 and 9.01)                                                                  

PRINCIPAL AND INTEREST ON THE CERTIFICATES                                      

  The method of determining, and the amount of, distributions of principal
and interest (or, where applicable, of principal only or interest only) on a    
particular Series of Certificates will be described in the related Prospectus   
Supplement. Distributions of interest on each Class of Certificates will be made
prior to distributions of principal thereon. Each Class of Certificates (other  
than certain Classes of Strip Certificates) may have a different Pass-Through   
Rate, which may be a fixed, variable or adjustable Pass-Through Rate, or any    
combination of two or more such Pass-Through Rates. The related Prospectus      
Supplement will specify the Pass-Through Rate or Rates for each Class, or the   
initial Pass-Through Rate or Rates and the method for determining the           
Pass-Through Rate or Rates. If so specified in the related Prospectus           
Supplement, interest on any Class of Certificates for any Distribution Date may 
be limited to the extent of available funds for such Distribution Date. Interest
on the Certificates will be calculated on the basis of a 360-day year consisting
of twelve 30-day months.                                                        

    On each Distribution Date for a Series of Certificates, the Trustee or the
Master Servicer on behalf of the Trustee will distribute or cause the Paying    
Agent to distribute, as the case may be, to each holder of record on the Record 
Date of a Class of Certificates, an amount equal to the Percentage Interest     
represented by the Certificate held by such holder multiplied by such Class's   
Distribution Amount. The Distribution Amount for a Class of Certificates for any
Distribution Date will be the portion, if any, of the Principal Distribution    
Amount (as defined in the related Prospectus Supplement) allocable to such Class
for such Distribution Date, as described in the related Prospectus Supplement,  
plus, if such Class is entitled to payments of interest on such Distribution    
Date, one month's interest at the applicable Pass-Through Rate on the principal 
balance or notional balance of such Class specified in the applicable Prospectus
Supplement, less certain interest shortfalls, as specified in the Prospectus    
Supplement, which generally will include (i) any Deferred Interest added to the 
principal balance of the Mortgage Loans and/or the outstanding balance of one or
more Classes of Certificates on the related Due Date, (ii) any other interest   
shortfalls (including, without limitation, shortfalls resulting from application
of the Relief Act or similar legislation or regulations as in effect from time  
to time) allocable to Certificateholders which are not covered by advances or   
the applicable credit enhancement and (iii) shortfalls (a "Prepayment Interest  
Shortfall") in collections of interest on Mortgage Loans resulting from         
Mortgagor prepayments during the month preceding the month of distribution to   
the extent such Prepayment Interest Shortfall is not paid by the Master Servicer
as Compensating Interest (as defined in the related Prospectus Supplement), in  
each case in such amount that is allocated to such Class on the basis set forth 
in the Prospectus Supplement.                                                   

    In the case of a Series of Certificates which includes two or more Classes
of Certificates, the timing, sequential order, priority of payment or amount of 
distributions in respect of principal, and any schedule or formula or other     
provisions applicable to the determination thereof (including distributions     
among multiple Classes of Senior Certificates or Subordinate Certificates) of   
each such Class shall be as set forth in the related Prospectus Supplement.     
Distributions in respect of principal of any Class of Certificates will be made 
on a pro rata basis among all of the Certificates of such Class.                

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    Except as otherwise provided in the related Pooling Agreement, on or prior
to the 15th day (or if such day is not a business day, the next succeeding      
business day) of the month of distribution (the "Determination Date"), the      
Master Servicer will determine the amounts of principal and interest which will 
be passed through to Certificateholders on the immediately succeeding           
Distribution Date. Prior to the close of business on the business day next      
succeeding each Determination Date, the Master Servicer will furnish a statement
to the Trustee (the information in such statement to be made available to       
Certificateholders by the Master Servicer on request) setting forth, among other
things, the amount to be distributed on the next succeeding Distribution Date.  

ADVANCES                                                                        

 The Master Servicer will agree to advance (either out of its own funds,
funds advanced to it by Subservicers or funds being held in the Custodial       
Account for future distribution to the holders of such Certificates), for the   
benefit of the holders of the Certificates of the related Series, on or before  
each Distribution Date, an amount equal to the aggregate of all scheduled       
payments of principal (other than any Balloon Amount in the case of a Balloon   
Loan) and interest at the applicable Pass-Through Rate or Net Mortgage Rate, as 
the case may be (an "Advance"), which were delinquent as of the close of        
business on the business day preceding the related Determination Date on the    
Mortgage Loans in the related Mortgage Pool, but only to the extent that such   
advances would, in the judgment of the Master Servicer, be recoverable out of   
late payments by the Mortgagors, Liquidation Proceeds, Insurance Proceeds or    
otherwise. (Article I and Sections 3.07 and 4.04)                               

    The Master Servicer will make such advances in order to maintain a regular
flow of scheduled interest and principal payments to holders of the relevant    
Classes of Certificates; such advances do not represent an obligation of the    
Master Servicer to guarantee or insure against losses. If advances have been    
made by the Master Servicer from cash being held for future distribution to     
Certificateholders, the Master Servicer will replace such funds on or before any
future Distribution Date to the extent that funds in the applicable Certificate 
Account on such Distribution Date would be less than payments required to be    
made to Certificateholders on such date. Any Master Servicer funds advanced as  
described above will be reimbursable to the Master Servicer out of recoveries on
the related Mortgage Loans for which such amounts were advanced (e.g., late     
payments made by the related Mortgagor, any related Liquidation Proceeds,       
proceeds of any applicable form of credit enhancement, or proceeds of any       
Mortgage Loan purchased by a Seller under the circumstances described above).   
Such advances by the Master Servicer will also be reimbursable to the Master    
Servicer (or Subservicer) from cash otherwise distributable to                  
Certificateholders to the extent that the Master Servicer shall determine that  
any such advances previously made are not ultimately recoverable from proceeds  
of the applicable Mortgage Loan. The Master Servicer will also be obligated to  
make advances for the purpose of protecting any Mortgaged Property or the Trust 
Fund's security interest therein, including certain taxes and insurance premiums
not paid by Mortgagors on a timely basis, but only to the extent that such      
advances would, in the judgment of the Master Servicer, be recoverable out of   
Liquidation Proceeds or other proceeds of the related Mortgage Loan. Funds so   
advanced will also be reimbursable to the Master Servicer from cash otherwise   
distributable to Certificateholders to the extent that the Master Servicer shall
determine that any such advances previously made are not ultimately recoverable 
from proceeds of the applicable Mortgage Loan. Notwithstanding the foregoing, if
the Master Servicer exercises its option, if any, to purchase the assets of a   
Trust Fund as described under "THE POOLING AGREEMENT -- Termination; Retirement 
of Certificates" below, the Master Servicer will be deemed to have been         
reimbursed for all related advances previously made by it and not theretofore   
reimbursed to it. The Master Servicer's obligation to make advances may be      
supported as described in the related Pooling Agreement. In the event that the  
short-term or long-term obligations of the provider of such support are         
downgraded by a Rating Agency rating the related Certificates or if any         
collateral supporting such obligation is not performing or is removed pursuant  
to the terms of any agreement described in the related Prospectus Supplement,   
the Certificates may also be downgraded. (Article I and Sections 3.08, 3.10 and 
4.04)                                                                           

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REPORTS TO CERTIFICATEHOLDERS                                                   

 With each distribution to Certificateholders of a particular Class, the
Trustee will forward or cause to be forwarded to each holder of record of such  
Class of Certificates a statement or statements with respect to the related     
Trust Fund setting forth the information specifically described in the related  
Pooling Agreement, which generally will include the following as applicable     
except as otherwise provided therein:                                           

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

        (ii) the amount, if any, of such distribution allocable to interest,
and, with respect to a Senior/Subordinate Series of Certificates, the 
  amount, if any, of any shortfall in the amount of interest and principal
distributed;                                                          

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

       (iv) with respect to a Series consisting of two or more Classes the
     outstanding principal balance or notional amount of each Class after giving
effect to the distribution of principal on such Distribution Date;    

        (v) the number and aggregate principal balances of Mortgage Loans in
     the related Mortgage Pool that are delinquent (a) one month, (b) two months
and (c) three months, and that are in foreclosure;                    

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

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

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

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

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

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

Each amount set forth pursuant to clause (i) and (ii) above will be   
expressed as a dollar amount per Single Certificate. As to a particular Class of
Certificates, a "Single Certificate" generally will evidence a Percentage       
Interest obtained by dividing $1,000 by the initial principal balance or        
notional balance of all the Certificates of such Class, except as otherwise     
provided in the related Pooling Agreement. In addition to the information       
described above, reports to Certificateholders will contain such other          
information as is set forth in the applicable Pooling Agreement, which may      
include, without limitation, information as to Advances, reimbursements to      
Subservicers and the Master Servicer and losses borne by the related Trust Fund.
In addition, within a reasonable period of time after the end of each calendar  
year, the Master Servicer will furnish a report to each holder of record of a   
Class of Certificates at any time during such calendar year which, among other  
things, will include information as to the aggregate of amounts reported        
pursuant to clauses (i) and (ii) above for such calendar year or, in the event  
such person was a holder of record of a Class of Certificates during a portion  
of such calendar year, for the applicable portion of such a year. (Section 4.02 
or 4.03)                                                                        

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COLLECTION AND OTHER SERVICING PROCEDURES                                       

    The Master Servicer, directly or through Subservicers, as the case may be,
will make reasonable efforts to collect all payments required under the Mortgage
Loans and will, consistent with the Pooling Agreement and any Letter of Credit, 
Mortgage Pool Insurance Policy, Certificate Insurance Policy, Primary Mortgage  
Insurance Policy, Bankruptcy Bond or applicable alternative credit enhancement  
arrangements, follow such collection procedures as it would employ in its good  
faith business judgment and which are normal and usual in its general mortgage  
servicing activities. Consistent with the foregoing, the Master Servicer may in 
its discretion (i) waive payments of interest or principal, (ii) accept a deed  
in lieu of foreclosure, (iii) waive any late payment charge or any prepayment   
charge or penalty interest in connection with the prepayment of a Mortgage Loan 
or (iv) extend the Due Date for payments due on a Mortgage Loan, provided,      
however, that the Master Servicer shall first determine that any such action    
will not impair the coverage of any related insurance policy or materially      
adversely affect the lien of the related Mortgage.                              

     In any case in which property subject to a Mortgage Loan (other than an ARM
Loan described below) is being conveyed by the Mortgagor, the Master Servicer,  
directly or through a Subservicer, shall in general be obligated, to the extent 
it has knowledge of such conveyance, to exercise its rights to accelerate the   
maturity of such Mortgage Loan under any due-on-sale clause applicable thereto, 
but only if the exercise of such rights is permitted by applicable law and only 
to the extent it would not adversely affect or jeopardize coverage under any    
Primary Mortgage Insurance Policy or applicable credit enhancement arrangements.
The original Mortgagor may be released from liability on a Mortgage Loan if the 
Master Servicer or Subservicer shall have determined in good faith that such    
release will not adversely affect the collectability of the Mortgage Loan. An   
ARM Loan may be assumed if such ARM Loan is by its terms assumable and if, in   
the reasonable judgment of the Master Servicer or the Subservicer, the proposed 
transferee of the related Mortgaged Property establishes its ability to repay   
the loan and the security for such ARM Loan would not be impaired by the        
assumption. If a Mortgagor transfers the Mortgaged Property subject to an ARM   
Loan without consent, such ARM Loan may be declared due and payable. Any fee    
collected by the Master Servicer or Subservicer for entering into an assumption 
or substitution of liability agreement will be retained by the Master Servicer  
or Subservicer as additional servicing compensation. See "CERTAIN LEGAL ASPECTS 
OF MORTGAGE LOANS AND RELATED MATTERS -- Enforceability of Certain Provisions"  
herein. In connection with any such assumption, the Mortgage Rate borne by the  
related Mortgage Note may not be altered. Mortgagors may, from time to time,    
request partial releases of the Mortgaged Properties, easements, consents to    
alteration or demolition and other similar matters. The Master Servicer or the  
related Subservicer may approve such a request if it has determined, exercising 
its good faith business judgment in the same manner as it would if it were the  
owner of the related Mortgage Loan, that such approval will not adversely affect
the security for, and the timely and full collectability of, the related        
Mortgage Loan. Any fee collected by the Master Servicer or the Subservicer for  
processing such request will be retained by the Master Servicer or Subservicer  
as additional servicing compensation. (Section 3.13)                            

    The Master Servicer is required to maintain a fidelity bond and errors and
omissions policy with respect to its officers and employees and other persons   
acting on behalf of the Master Servicer in connection with its activities under 
the Pooling Agreement. (Section 3.12)                                           

REALIZATION UPON DEFAULTED MORTGAGE LOANS                                       

In the event that title to any Mortgaged Property is acquired in      
foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale  
will be issued to the Trustee or to its nominee on behalf of Certificateholders 
of the related Series. Notwithstanding any such acquisition of title and        
cancellation of the related Mortgage Loan, such Mortgage Loan (an "REO Mortgage 
Loan") will be considered for most purposes to be an outstanding Mortgage Loan  
held in the Trust Fund until such time as the Mortgaged Property is sold and all
recoverable Liquidation Proceeds and Insurance Proceeds have been received with 
respect to such defaulted Mortgage Loan (a "Liquidated Mortgage Loan"). For     
purposes of calculations of amounts distributable to Certificateholders in      
respect of an REO Mortgage Loan, the amortization schedule in effect at the time
of any such acquisition of title (before any adjustment thereto by reason of any
bankruptcy or any similar proceeding or any moratorium or similar waiver or     
grace period) will be deemed to have                                            

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continued in effect (and, in the case of an ARM Loan, such amortization schedule
will be deemed to have adjusted in accordance with any interest rate changes    
occurring on any adjustment date therefor) so long as such REO Mortgage Loan is 
considered to remain in the Trust Fund. Any Mortgaged Property so acquired by   
the Trust Fund must be disposed of, if a REMIC election has been made, in       
accordance with applicable federal income tax regulations and consistent with   
the status of the Trust Fund as a REMIC. Any income (net of expenses and other  
than gains described below) received by the Master Servicer or a Subservicer on 
such Mortgaged Property prior to its disposition will be deposited in the       
Custodial Account upon such disposition and will be available at such time to   
the extent provided in the related Pooling Agreement, for making payments to    
Certificateholders. (Section 3.14)                                              

    With respect to a Mortgage Loan in default, the Master Servicer may pursue
foreclosure (or similar remedies) concurrently with pursuing any remedy for a   
breach of a representation and warranty. However, the Master Servicer is not    
required to continue to pursue both such remedies if it determines that one such
remedy is more likely to result in a greater recovery. Upon the first to occur  
of final liquidation (by foreclosure or otherwise) and a repurchase or          
substitution pursuant to a breach of a representation and warranty, such        
Mortgage Loan will be removed from the related Trust Fund if it has not been    
removed previously. The Master Servicer may elect to treat a defaulted Mortgage 
Loan as having been finally liquidated if substantially all amounts expected to 
be received in connection therewith have been received. Any additional          
liquidation expenses relating to such Mortgage Loan thereafter incurred will be 
reimbursable to the Master Servicer (or any Subservicer) from any amounts       
otherwise distributable to holders of Certificates of the related Series, or may
be offset by any subsequent recovery related to such Mortgage Loan.             
Alternatively, for purposes of determining the amount of related Liquidation    
Proceeds to be distributed to Certificateholders, the amount of any Realized    
Loss (as defined under "SUBORDINATION" herein) or the amount required to be     
drawn under any applicable form of credit support, the Master Servicer may take 
into account minimal amounts of additional receipts expected to be received, as 
well as estimated additional liquidation expenses expected to be incurred in    
connection with such defaulted Mortgage Loan. With respect to certain Series of 
Certificates, if so provided in the related Prospectus Supplement, the          
applicable form of credit enhancement may provide, to the extent of coverage    
thereunder, that a defaulted Mortgage Loan or REO Mortgage Loan will be removed 
from the Trust Fund prior to the final liquidation thereof. In the case of a    
Senior/Subordinate Series, if a final liquidation of a Mortgage Loan resulted in
a Realized Loss and within two years thereafter the Master Servicer receives a  
subsequent recovery specifically related to such Mortgage Loan (in connection   
with a related breach of a representation or warranty or otherwise), such       
subsequent recovery shall be distributed to current Certificateholders of the   
Class or Classes to which such Realized Loss was allocated (with the amounts to 
be distributed allocated among such Classes in the same proportions as such     
Realized Loss was allocated), provided that no such distribution shall result in
distributions on the Certificates of any such Class in excess of the total      
amounts of principal and interest that would have been distributable thereon if 
such Mortgage Loan had been liquidated with no Realized Loss. In the case of a  
Series of Certificates other than a Senior/Subordinate Series, if so provided in
the related Prospectus Supplement, the applicable form of credit enhancement may
provide for reinstatement subject to certain conditions in the event that,      
following the final liquidation of a Mortgage Loan and a draw under such credit 
enhancement, subsequent recoveries are received. If a defaulted Mortgage Loan or
REO Mortgage Loan is not so removed from the Trust Fund, then, upon the final   
liquidation thereof, if a loss is realized which is not covered by any          
applicable form of credit enhancement or other insurance, the Certificateholders
will bear such loss. However, if a gain results from the final liquidation of an
REO Mortgage Loan which is not required by law to be remitted to the related    
Mortgagor, the Master Servicer will be entitled to retain such gain as          
additional servicing compensation. For a description of the Master Servicer's   
obligations to maintain and make claims under applicable forms of credit        
enhancement and insurance relating to the Mortgage Loans, see "DESCRIPTION OF   
CREDIT ENHANCEMENTS" and "PRIMARY MORTGAGE INSURANCE, HAZARD INSURANCE; CLAIMS  
THEREUNDER."                                                                    

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SUBORDINATION 

 A Senior/Subordinate Series of Certificates will consist of one or more
Classes of Senior Certificates and one or more Classes of Subordinate           
Certificates, as specified in the related Prospectus Supplement. Subordination  
of the Subordinate Certificates of any Senior/Subordinate Series of Certificates
will be effected by the following method, unless an alternative method is       
specified in the related Prospectus Supplement. In addition, certain Classes of 
Senior (or Subordinated Certificates may be senior to other Classes of Senior   
(or Subordinate) Certificates, as specified in the related Prospectus           
Supplement, in which case the following discussion is qualified in its entirety 
by reference to the related Prospectus Supplement with respect to the various   
priorities and other rights as among the various Classes of Senior Certificates 
or Subordinate Certificates, as the case may be.                                

  With respect to any Senior/Subordinate Series of Certificates, the total
amount available for distribution on each Distribution Date, as well as the     
method for allocating such amount among the various Classes of Certificates     
included in such Series, will be described in the related Prospectus Supplement.
Generally, the amount available for distribution will be allocated first to     
interest on the Senior Certificates of such Series, and then to principal of the
Senior Certificates up to the amounts determined as specified in the related    
Prospectus Supplement, prior to allocation to the Subordinate Certificates of   
such Series.                                                                    

    In the event of any Realized Losses on Mortgage Loans not in excess of the
limitations described below, other than Extraordinary Losses, the rights of the 
Subordinate Certificateholders to receive distributions with respect to the     
Mortgage Loans will be subordinate to the rights of the Senior                  
Certificateholders. With respect to any defaulted Mortgage Loan that is finally 
liquidated, through foreclosure sale, disposition of the related Mortgaged      
Property if acquired by deed in lieu of foreclosure, or otherwise, the amount of
loss realized, if any (as more fully described in the related Pooling Agreement,
a "Realized Loss"), will equal the portion of the Stated Principal Balance      
remaining after application of all amounts recovered (net of amounts            
reimbursable to the Master Servicer for related Advances and expenses) towards  
interest and principal owing on the Mortgage Loan. With respect to a Mortgage   
Loan the principal balance of which has been reduced in connection with         
bankruptcy proceedings, the amount of such reduction will be treated as a       
Realized Loss.                                                                  

     Except as noted below, Realized Losses will be allocated to the Subordinate
Certificates of the related Series, until the Certificate Principal Balance (as 
defined in the related Prospectus Supplement) of such Subordinate Certificates  
thereof has been reduced to zero. Additional Realized Losses, if any, will be   
allocated to the Senior Certificates (or, if such Series includes more than one 
Class of Senior Certificates, either on a pro rata basis among all of the Senior
Certificates in proportion to their respective outstanding Certificate Principal
Balances or as otherwise provided in the related Prospectus Supplement).        

   With respect to certain Realized Losses resulting from physical damage to
Mortgaged Properties which are generally of the same type as are covered under a
Special Hazard Insurance Policy, the amount thereof that may be allocated to the
Subordinate Certificates of the related Series may be limited to an amount (the 
"Special Hazard Amount") specified in the related Prospectus Supplement. See    
"DESCRIPTION OF CREDIT ENHANCEMENTS -- Special Hazard Insurance Policies." If   
so, any Special Hazard Losses in excess of the Special Hazard Amount will be    
allocated among all outstanding Classes of Certificates of the related Series,  
either on a pro rata basis in proportion to their outstanding Certificate       
Principal Balances, regardless of whether any Subordinate Certificates remain   
outstanding, or as otherwise provided in the related Prospectus Supplement. The 
respective amounts of other specified types of losses (including Fraud Losses   
and Bankruptcy Losses) that may be borne solely by the Subordinate Certificates 
may be similarly limited to an amount (with respect to Fraud Losses, the "Fraud 
Loss Amount" and with respect to Bankruptcy Losses, the "Bankruptcy Amount"),   
and the Subordinate Certificates may provide no coverage with respect to certain
other specified types of losses, as described in the related Prospectus         
Supplement, in which case such losses would be allocated on a pro rata basis    
among all outstanding Classes of Certificates. Each of the Special Hazard       
Amount, Fraud Loss Amount and Bankruptcy Amount may be subject to periodic      
reductions under provisions described in the related Prospectus Supplement. Each
such amount may be subject to further reduction or termination, without the     
consent of the Certificateholders, upon the written confirmation from each      
applicable Rating Agency that the then-current rating of the related Series of  
Certificates will not be adversely affected thereby.                            

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  Generally, any allocation of a Realized Loss (including a Special Hazard
Loss) to a Certificate in a Senior/Subordinate Series will be made by reducing  
the Certificate Principal Balance thereof as of the Distribution Date following 
the calendar month in which such Realized Loss was incurred. If so provided in  
the related Prospectus Supplement, in the event of certain Realized Losses, the 
Senior Certificateholders may be entitled to receive a distribution of          
principal, to be paid from and to the extent of funds otherwise distributable to
the Subordinate Certificateholders, equal to the product of the then applicable 
Senior Percentage (as defined below) and the amount, if any, by which (i) the   
Stated Principal Balance of the related Mortgage Loan exceeds (ii) the total    
amount of the related unscheduled recovery which is allocable to principal (as  
more fully described in the related Pooling Agreement, the "Unrecovered Senior  
Portion"). Payments to the Senior Certificateholders in respect of any          
Unrecovered Senior Portion on any Distribution Date will only be made with      
respect to Realized Losses incurred in connection with Mortgage Loans that were 
finally liquidated during the preceding calendar month, and will not be made as 
to any Special Hazard Losses in excess of the Special Hazard Amount, Fraud      
Losses in excess of the Fraud Loss Amount or Bankruptcy Losses in excess of the 
Bankruptcy Amount (or other specified types of losses in excess of any          
applicable coverage limitations), if applicable. See "DESCRIPTION OF CREDIT     
ENHANCEMENTS -- Special Hazard Insurance Policies." As with any other           
distribution of principal, any payment to the holders of Senior Certificates    
attributable to an Unrecovered Senior Portion will be applied to reduce the     
Certificate Principal Balance thereof. At any given time, the percentage of the 
Certificate Principal Balances of all of the Certificates evidenced by the      
Senior Certificates is the "Senior Percentage," determined in the manner set    
forth in the related Prospectus Supplement. The "Stated Principal Balance" of   
any Mortgage Loan as of any date of determination is equal to the principal     
balance thereof as of the Cut-off Date, after application of all scheduled      
principal payments due on or before the Cut-off Date whether or not received,   
reduced by all amounts allocable to principal that are distributed to           
Certificateholders on or before the date of determination, and as further       
reduced to the extent that any Realized Loss thereon has been allocated to one  
or more Classes of Certificates on or before the date of determination.         

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

If so provided in the related Prospectus Supplement, certain amounts  
otherwise payable on any Distribution Date to holders of Subordinate            
Certificates may be deposited into a reserve fund. Amounts held in any reserve  
fund may be applied as described under "DESCRIPTION OF CREDIT                   
ENHANCEMENTS -- Reserve Funds" and in the related Prospectus Supplement.        

   In lieu of the foregoing provisions, subordination may be effected in the
following manner, or in any other manner as may be described in the related     
Prospectus Supplement. The rights of the holders of Subordinate Certificates to 
receive any or a specified portion of distributions with respect to the Mortgage
Loans may be subordinated to the extent of the amount set forth in the related  
Prospectus Supplement (the "Subordinate Amount"). As specified in the related   
Prospectus Supplement, the Subordinate Amount may be subject to reduction based 
upon the amount of losses borne by the holders of the Subordinate Certificates  
as a result of such subordination, a specified schedule or such other method of 
reduction as such Prospectus Supplement                                         

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may specify. If so specified in the related Prospectus Supplement, additional   
credit support for this form of subordination may be provided by the            
establishment of a reserve fund for the benefit of the holders of the Senior    
Certificates (which may, if such Prospectus Supplement so provides, initially be
funded by a cash deposit) into which certain distributions otherwise allocable  
to the holders of the Subordinate Certificates may be placed; such funds would  
thereafter be available to cure shortfalls in distributions to holders of the   
Senior Certificates.                                                            

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

DESCRIPTION OF CREDIT ENHANCEMENTS

     Credit support with respect to each Series of Certificates may be comprised
of one or more of the following components. Each component will have a dollar   
limit and will provide coverage with respect to Realized Losses that are (i)    
attributable to the Mortgagor's failure to make any payment of principal or     
interest as required under the Mortgage Note, but not including Special Hazard  
Losses, Extraordinary Losses or other losses resulting from damage to a         
Mortgaged Property, Bankruptcy Losses or Fraud Losses (any such loss, a         
"Defaulted Mortgage Loss"); (ii) of a type generally covered by a Special Hazard
Insurance Policy (as defined below) (any such loss, a "Special Hazard Loss");   
(iii) attributable to certain actions which may be taken by a bankruptcy court  
in connection with a Mortgage Loan, including a reduction by a bankruptcy court 
of the principal balance of or the Mortgage Rate on a Mortgage Loan or an       
extension of its maturity (any such loss, a "Bankruptcy Loss"); and (iv)        
incurred on defaulted Mortgage Loans as to which there was fraud in the         
origination of such Mortgage Loans (any such loss, a "Fraud Loss"). Defaulted   
Mortgage Losses, Special Hazard Losses, Bankruptcy Losses and Fraud Losses in   
excess of the amount of coverage provided therefor and losses occasioned by war,
civil insurrection, certain governmental actions, nuclear reaction and certain  
other risks ("Extraordinary Losses") will not be covered. To the extent that the
credit enhancement for any Series of Certificates is exhausted, the             
Certificateholders will bear all further risks of loss not otherwise insured    
against.                                                                        

As set forth below and in the applicable Prospectus Supplement, (i)   
coverage with respect to Defaulted Mortgage Losses may be provided by one or    
more of a Letter of Credit, a Certificate Insurance Policy or a Mortgage Pool   
Insurance Policy, (ii) coverage with respect to Special Hazard Losses may be    
provided by one or more of a Letter of Credit, a Certificate Insurance Policy or
a Special Hazard Insurance Policy (any instrument, to the extent providing such 
coverage, a "Special Hazard Instrument"), (iii) coverage with respect to        
Bankruptcy Losses may be provided by one or more of a Letter of Credit, a       
Certificate Insurance Policy or a Bankruptcy Bond and (iv) coverage with respect
to Fraud Losses may be provided by one or more of a Letter of Credit, a         
Certificate Insurance Policy, Mortgage Pool Insurance Policy or mortgage        
repurchase bond. In addition, if provided in the applicable Prospectus          
Supplement, in lieu of or in addition to any or all of the foregoing            
arrangements, credit enhancement may be in the form of a Reserve Fund to cover  
such losses, in the form of subordination of one or more Classes of Subordinate 
Certificates to provide credit support to one or more Classes of Senior         
Certificates as described under "SUBORDINATION," or in the form of the          
applicable Seller's agreement to repurchase certain mortgage loans, which       
obligation may be supported by a Letter of Credit, surety bonds or other types  
of insurance policies, certain other secured or unsecured corporate guarantees  
or in such other form as may be described in the related Prospectus Supplement, 
or in the form of a combination of two or more of the foregoing. The credit     
support may be provided by an assignment of the right to receive certain cash   
amounts, a deposit of cash into a Reserve Fund or other pledged assets, or by   
banks, insurance companies, guarantees or any combination thereof identified in 
the applicable Prospectus Supplement.                                           

The amounts and type of credit enhancement arrangement as well as the 
provider thereof (the "Credit Enhancer"), if applicable, with respect to each   
Series of Certificates will be set forth in the related Prospectus Supplement.  
The Pooling Agreement or other documents may be modified in connection with the 
provisions of any credit enhancement arrangement to provide for reimbursement   
rights, control rights or other provisions                                      

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that may be required by the Credit Enhancer. To the extent provided in the      
applicable Prospectus Supplement and the Pooling Agreement, the credit          
enhancement arrangements may be periodically modified, reduced and substituted  
for based on the aggregate outstanding principal balance of the Mortgage Loans  
covered thereby. See "DESCRIPTION OF CREDIT ENHANCEMENTS -- Reduction or        
Substitution of Credit Enhancement." If specified in the applicable Prospectus  
Supplement, credit support for a Series of Certificates may cover one or more   
other Series of Certificates.                                                   

The descriptions of any insurance policies or bonds described in this 
Prospectus or any Prospectus Supplement and the coverage thereunder do not      
purport to be complete and are qualified in their entirety by reference to the  
actual forms of such policies, copies of which will be filed as an exhibit to a 
Current Report on Form 8-K within 15 days of issuance of the Certificates of    
such Series.                                                                    

LETTER OF CREDIT                                                                

    If any component of credit enhancement as to any Series of Certificates is
to be provided by a letter of credit (the "Letter of Credit"), a bank (the      
"Letter of Credit Bank") will deliver to the Trustee an irrevocable Letter of   
Credit. The Letter of Credit may also provide for the payment of advances which 
the Master Servicer would be obligated to make with respect to delinquent       
monthly mortgage payments. The Letter of Credit Bank and certain information    
with respect thereto, as well as the amount available under the Letter of Credit
with respect to each component of credit enhancement, will be specified in the  
applicable Prospectus Supplement. The Letter of Credit will expire on the       
expiration date set forth in the related Prospectus Supplement, unless earlier  
terminated or extended in accordance with its terms. A copy of any Letter of    
Credit for a Series will be filed with the Commission as an exhibit to a Current
Report on Form 8-K within 15 days of the issuance of the Certificates of such   
Series.                                                                         

MORTGAGE POOL INSURANCE POLICIES                                                

   If so specified in the related Prospectus Supplement, an insurance policy
covering Defaulted Mortgage Losses (a "Mortgage Pool Insurance Policy") will be 
obtained for a particular Series of Certificates. Each Mortgage Pool Insurance  
Policy will, subject to the limitations described in the applicable Prospectus  
Supplement, cover Defaulted Mortgage Losses in an amount equal to a percentage  
specified in the applicable Prospectus Supplement of the aggregate principal    
balance of the Mortgage Loans on the Cut-off Date. As set forth under           
"Maintenance of Credit Enhancement," the Master Servicer will use its best      
reasonable efforts to maintain the Mortgage Pool Insurance Policy and to present
claims thereunder to the Pool Insurer on behalf of itself, the Trustee and the  
Certificateholders. The Mortgage Pool Insurance Policies, however, are not      
blanket policies against loss, since claims thereunder may only be made         
respecting particular defaulted Mortgage Loans and only upon satisfaction of    
certain conditions precedent, which typically include, among other things, that 
(i) any required Primary Mortgage Insurance Policy is in effect for the         
defaulted Mortgage Loan and a claim thereunder has been submitted and settled,  
(ii) hazard insurance on the property securing any such Mortgage Loan has been  
kept in force and real estate taxes and other protection and preservation       
expenses have been paid by the Master Servicer, (iii) if there has been physical
loss or damage to the applicable Mortgaged Property, it has been restored to its
condition (reasonable wear and tear excepted) at the Cut-off Date and (iv) the  
insured has acquired good and merchantable title to the applicable Mortgaged    
Property free and clear of liens except certain permitted encumbrances, as more 
fully described in the applicable Prospectus Supplement. The Mortgage Pool      
Insurance Policies may not cover losses due to a failure to pay or denial of a  
claim under a Primary Mortgage Insurance Policy, irrespective of the reason     
therefor. A copy of any Mortgage Pool Insurance Policy for a Series will be     
filed with the Commission as an exhibit to a Current Report on Form 8-K within  
15 days of the issuance of the Certificates of such Series.                     

SPECIAL HAZARD INSURANCE POLICIES                                               

  If so provided in the related Prospectus Supplement, an insurance policy
covering Special Hazard Losses (a "Special Hazard Insurance Policy") will be    
obtained for a particular Series of Certificates. Each Special Hazard Insurance 
Policy will, subject to limitations and satisfaction of certain conditions      
precedent described in the applicable Prospectus Supplement, protect holders of 
the related Series of Certificates from (i) losses                              

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due to direct physical damage to a Mortgaged Property other than any loss of a  
type covered by a hazard insurance policy or a flood insurance policy, if       
applicable, and (ii) losses from partial damage caused by reason of the         
application of the co-insurance clauses contained in hazard insurance policies  
("Special Hazard Losses"). See "PRIMARY MORTGAGE INSURANCE, HAZARD INSURANCE;   
CLAIMS THEREUNDER." A Special Hazard Insurance Policy will not cover losses     
occasioned by war, civil insurrection, certain governmental actions, errors in  
design, faulty workmanship or materials (except under certain circumstances),   
nuclear reaction, chemical contamination, waste by the Mortgagor and certain    
other risks. A copy of any Special Hazard Insurance Policy for a Series will be 
filed with the Commission as an exhibit to a Current Report on Form 8-K within  
15 days of the issuance of the Certificates of such Series.                     

As indicated under "DESCRIPTION OF THE CERTIFICATES -- Assignment of  
Mortgage Loans" above and to the extent set forth in the applicable Prospectus  
Supplement, coverage in respect of Special Hazard Losses for a Series of        
Certificates may be provided, in whole or in part, by a type of Special Hazard  
Instrument other than a Special Hazard Insurance Policy.                        

BANKRUPTCY BONDS                                                                

   In the event of a personal bankruptcy of a Mortgagor, it is possible that
the bankruptcy court may establish the value of the Mortgaged Property of such  
Mortgagor at an amount less than the then outstanding principal balance of the  
Mortgage Loan secured by such Mortgaged Property (a "Deficient Valuation"). The 
amount of the secured debt could then be reduced to such value, and, thus, the  
holder of such Mortgage Loan would become an unsecured creditor to the extent   
the outstanding principal balance of such Mortgage Loan exceeds the value       
assigned to the Mortgaged Property by the bankruptcy court. In addition, certain
other modifications of the terms of a Mortgage Loan can result from a bankruptcy
proceeding, including a reduction in the amount of the Monthly Payment on the   
related Mortgage Loan (a "Debt Service Reduction"; Debt Service Reductions and  
Deficient Valuations, collectively referred to herein as "Bankruptcy Losses").  
See "CERTAIN LEGAL ASPECTS OF MORTGAGE LOANS AND RELATED MATTERS -- Anti-       
Deficiency Legislation and Other Limitations on Lenders." Any Bankruptcy Bond to
provide coverage for Bankruptcy Losses for proceedings under the federal        
Bankruptcy Code obtained by the Depositor for a Trust Fund will be issued by an 
insurer named in the applicable Prospectus Supplement. The level of coverage    
under each Bankruptcy Bond will be set forth in the applicable Prospectus       
Supplement. A copy of any Bankruptcy Bond for a Series will be filed with the   
Commission as an exhibit to a Current Report on Form 8-K within 15 days of the  
issuance of the Certificates of such Series.                                    

CERTIFICATE INSURANCE POLICIES                                                  

    If so provided in the related Prospectus Supplement, one or more insurance
policies (each, a "Certificate Insurance Policy") will be obtained for a        
particular Series of Certificates guaranteeing timely distributions of interest 
and full distributions of principal on the basis of a schedule of principal     
distributions set forth in or determined in the manner specified in the related 
Prospectus Supplement for such Series or for one or more Classes of Certificates
of such Series. If so specified in the related Prospectus Supplement, a         
Certificate Insurance Policy will also guarantee against any payment made to a  
Certificateholder which is subsequently treated as a "voidable preference"      
payment under the Bankruptcy Code. A copy of any Certificate Insurance Policy   
for a Series will be filed with the Commission as an exhibit to a Current Report
on Form 8-K within 15 days of the issuance of the Certificates of such Series.  

RESERVE FUNDS                                                                   

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

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

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

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

MAINTENANCE OF CREDIT ENHANCEMENT                                               

  If a Letter of Credit, Certificate Insurance Policy or alternate form of
credit enhancement has been obtained for a Series of Certificates, the Master   
Servicer will be obligated under the applicable Pooling Agreement to exercise   
its best reasonable efforts to keep or cause to be kept such Letter of Credit,  
Certificate Insurance Policy or alternate form of credit support in full force  
and effect throughout the term of such Pooling Agreement, unless coverage       
thereunder has been exhausted through payment of claims or otherwise, or        
substitution therefor is made as described below under "Reduction or            
Substitution of Credit Enhancement." If a Letter of Credit obtained for a Series
of Certificates is scheduled to expire prior to the date the final distribution 
on such Certificates is made and coverage under such Letter of Credit has not   
been exhausted and no substitution has occurred, the Trustee will draw the      
amount available under the Letter of Credit and maintain such amount in trust   
for such Certificateholders.                                                    

If a Mortgage Pool Insurance Policy has been obtained for a Series of 
Certificates, the Master Servicer will be obligated under the applicable Pooling
Agreement to exercise its best reasonable efforts to keep each Mortgage Pool    
Insurance Policy (or an alternate form of credit support) in full force and     
effect throughout the term of such Pooling Agreement, unless coverage thereunder
has been exhausted through payment of claims or until such Mortgage Pool        
Insurance Policy is replaced in accordance with the terms of such Pooling       
Agreement. The Master Servicer or the Trustee, as specified in the related      
Prospectus Supplement, will agree to pay from collections received on the       
Mortgage Loans the premiums for each Mortgage Pool Insurance Policy on a timely 
basis. In the event the Pool Insurer ceases to be a Qualified Insurer (such term
being defined to mean a private mortgage guaranty insurance company duly        
qualified as such under the laws of the state of its incorporation and each     
state having jurisdiction over the insurer in connection with the Mortgage Pool 
Insurance Policy and approved as an insurer by FHLMC, FNMA or any successor     
entity) because it ceases to be qualified under any such law to transact such   
insurance business or coverage is terminated for any reason other than          
exhaustion of such coverage, the Master Servicer will use its best reasonable   
efforts to obtain from another Qualified Insurer a replacement insurance policy 
comparable to the Mortgage Pool Insurance Policy with a total coverage equal to 
the then outstanding coverage of such Mortgage Pool Insurance Policy, provided  
that, if the cost of the replacement policy is greater than the cost of such    
Mortgage Pool Insurance Policy, the coverage of the replacement policy will,    
unless otherwise agreed to by the Depositor, be reduced to a level such that its
premium rate does not exceed the premium rate on such Mortgage Pool Insurance   
Policy. In the event that the Pool Insurer ceases to be a Qualified Insurer     
because it ceases to be approved as an                                          

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insurer by FHLMC, FNMA or any successor entity, the Master Servicer will agree  
to review, not less often than annually, the financial condition of the Pool    
Insurer and will monitor the credit ratings of the Pool Insurer, in each case   
with a view toward determining whether recoveries under the Mortgage Pool       
Insurance Policy are jeopardized for reasons related to the financial condition 
of the Pool Insurer. If the Master Servicer determines that recoveries are so   
jeopardized, it has agreed to exercise its best reasonable efforts to obtain    
from another Qualified Insurer a replacement insurance policy as described      
above, subject to the same cost limit. Any losses associated with any reduction 
or withdrawal in rating by an applicable Rating Agency shall be borne by the    
Certificateholders. (Article I and Section 3.11)                                

     In lieu of the Master Servicer's obligation to maintain a Letter of Credit,
Mortgage Pool Insurance Policy, Certificate Insurance Policy or other form of   
credit enhancement as provided above, the Master Servicer may obtain a          
substitute Letter of Credit, Mortgage Pool Insurance Policy, Certificate        
Insurance Policy or an alternate form of credit enhancement. If the Master      
Servicer obtains such a substitute Letter of Credit, Mortgage Pool Insurance    
Policy, Certificate Insurance Policy or other form of credit enhancement, it    
will maintain and keep such Letter of Credit, Mortgage Pool Insurance Policy,   
Certificate Insurance Policy or alternate form of credit enhancement in full    
force and effect as provided herein. Prior to its obtaining any substitute      
Letter of Credit, Mortgage Pool Insurance Policy, Certificate Insurance Policy  
or alternate form of credit enhancement, the Master Servicer will obtain written
confirmation from the Rating Agency or Agencies that rated the related Series of
Certificates that the substitution of such Mortgage Pool Insurance Policy,      
Letter of Credit, Certificate Insurance Policy or alternate form of credit      
enhancement for the existing credit enhancement will not adversely affect the   
then-current ratings assigned to such Certificates by such Rating Agency or     
Agencies.                                                                       

If a Special Hazard Instrument has been obtained for a Series of      
Certificates, the Master Servicer will also be obligated under the applicable   
Pooling Agreement to exercise its best reasonable efforts to maintain and keep  
such Special Hazard Instrument in full force and effect throughout the term of  
such Pooling Agreement, unless coverage thereunder has been exhausted through   
payment of claims or otherwise or substitution therefor is made as described    
below under "Reduction or Substitution of Credit Enhancement." If the Special   
Hazard Instrument takes the form of a Special Hazard Insurance Policy, such     
policy will provide coverage against risks of the type described herein under   
"DESCRIPTION OF CREDIT ENHANCEMENTS -- Special Hazard Insurance Policies." The  
Master Servicer may obtain a substitute Special Hazard Instrument for the       
existing Special Hazard Instrument if prior to such substitution the Master     
Servicer obtains written confirmation from the Rating Agency or Agencies that   
rated the Certificates that such substitution shall not adversely affect the    
then-current ratings assigned to the Certificates by such Rating Agency or      
Agencies. (Sections 3.12 and 3.16)                                              

  If a Bankruptcy Bond has been obtained for a Series of Certificates, the
Master Servicer will be obligated under the applicable Pooling Agreement to     
exercise its best reasonable efforts to maintain and keep such Bankruptcy Bond  
in full force and effect throughout the term of such Pooling Agreement, unless  
coverage thereunder has been exhausted through payment of claims or substitution
therefor is made as described below under "Reduction or Substitution of Credit  
Enhancement." The Master Servicer may obtain a substitute Bankruptcy Bond or    
other credit enhancement for the existing Bankruptcy Bond if prior to such      
substitution the Master Servicer obtains written confirmation from the Rating   
Agency or Agencies that rated the Certificates that such substitution shall not 
adversely affect the then-current ratings assigned to the Certificates by such  
Rating Agency or Agencies. (Sections 3.16 and 3.21) See "DESCRIPTION OF CREDIT  
ENHANCEMENTS -- Bankruptcy Bonds."                                              

The Master Servicer, on behalf of itself, the Trustee and             
Certificateholders, will provide the Trustee information required for the       
Trustee to draw under the Letter of Credit and will present claims to each Pool 
Insurer, to the issuer of each Special Hazard Insurance Policy or other Special 
Hazard Instrument, to the issuer of each Bankruptcy Bond and, in respect of     
defaulted Mortgage Loans for which there is no Subservicer, to each Primary     
Mortgage Insurer and take such reasonable steps as are necessary to permit      
recovery under such Letter of Credit, Certificate Insurance Policies or other   
insurance policies or comparable coverage respecting defaulted Mortgage Loans or
Mortgage Loans which are the subject of a bankruptcy proceeding. As set forth   
above, all collections by the Master Servicer under any Mortgage Pool Insurance 

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Policy, any Primary Mortgage Insurance Policy or any Bankruptcy Bond and, where 
the related property has not been restored, any Special Hazard Instrument, are  
to be deposited initially in the Custodial Account and ultimately in the        
Certificate Account, subject to withdrawal as described above. All draws under  
any Letter of Credit or Certificate Insurance Policy will be initially deposited
in the Certificate Account. In those cases in which a Mortgage Loan is serviced 
by a Subservicer, the Subservicer, on behalf of itself, the Trustee and the     
Certificateholders will present claims to the Primary Mortgage Insurer, and all 
collections thereunder shall initially be deposited in a segregated account     
generally comparable to the Custodial Account. (Sections 3.11, 3.12, 3.21 and   
4.01)                                                                           

     If any property securing a defaulted Mortgage Loan is damaged and proceeds,
if any, from the related hazard insurance policy or any applicable Special      
Hazard Instrument are insufficient to restore the damaged property to a         
condition sufficient to permit recovery under any Letter of Credit, Mortgage    
Pool Insurance Policy or any related Primary Mortgage Insurance Policy, the     
Master Servicer is not required to expend its own funds to restore the damaged  
property unless it determines (i) that such restoration will increase the       
proceeds to one or more Classes of Certificateholders on liquidation of the     
Mortgage Loan after reimbursement of the Master Servicer for its expenses and   
(ii) that such expenses will be recoverable by it through Liquidation Proceeds  
or Insurance Proceeds. If recovery under any Letter of Credit, Mortgage Pool    
Insurance Policy, other credit enhancement or any related Primary Mortgage      
Insurance Policy is not available because the Master Servicer has been unable to
make the above determinations, has made such determinations incorrectly or      
recovery is not available for any other reason, the Master Servicer is          
nevertheless obligated to follow such normal practices and procedures (subject  
to the preceding sentence) as it deems necessary or advisable to realize upon   
the defaulted Mortgage Loan and in any such event is entitled to reimbursement  
of its expenses in connection with such restoration prior to payments to        
Certificateholders. (Section 3.14)                                              

The failure of the Master Servicer to maintain a Letter of Credit,    
Certificate Insurance Policy, Mortgage Pool Insurance Policy, Special Hazard    
Instrument, Bankruptcy Bond or other form of credit enhancement under any       
applicable Pooling Agreement, as provided above, which continues unremedied for 
30 days (15 days in the case of a failure to pay the required premium) after the
giving of written notice of such failure to the Master Servicer by the Trustee  
or the Depositor, or to the Master Servicer, the Depositor and the Trustee by   
the holders of any Class of Certificates of the related Series evidencing not   
less than 25% of the aggregate Percentage Interest constituting such Class, will
constitute an Event of Default by the Master Servicer under such Pooling        
Agreement. See "THE POOLING AGREEMENT -- Rights Upon Event of Default" for a    
discussion of the rights of the Depositor, the Trustee and the Certificateholder
during an Event of Default.                                                     

REDUCTION OR SUBSTITUTION OF CREDIT ENHANCEMENT                                 

The amount of credit support provided pursuant to any of the credit   
enhancements (including, without limitation, a Mortgage Pool Insurance Policy,  
Special Hazard Insurance Policy, Certificate Insurance Policy, Bankruptcy Bond, 
Letter of Credit, Reserve Fund, or any alternative form of credit enhancement)  
may be reduced under certain specified circumstances. In most cases, the amount 
available pursuant to any credit enhancement will be subject to periodic        
reduction in accordance with a schedule or formula on a nondiscretionary basis  
pursuant to the terms of the related Pooling Agreement. Additionally, in most   
cases, such credit support (and any replacements therefor) may be replaced,     
reduced or terminated, and the formula used in calculating the amount of        
coverage with respect to Bankruptcy Losses, Special Hazard Losses or Fraud      
Losses may be changed, without the consent of the Certificateholders, upon the  
written assurance from each applicable Rating Agency that the then-current      
rating of the related Series of Certificates will not be adversely affected.    
Furthermore, in the event that the credit rating of any obligor under any       
applicable credit enhancement is downgraded, the credit rating of the related   
Certificates may be downgraded to a corresponding level, and the Master Servicer
will be obligated to obtain replacement credit support in order to restore the  
rating of the Certificates only to the extent specified in the related          
Prospectus Supplement. The Master Servicer will also be permitted to replace    
such credit support with other credit enhancement instruments issued by obligors
whose credit ratings are equivalent to such downgraded level and in lower       
amounts which would satisfy such downgraded level, provided that the            
then-current rating of the related Series of Certificates is maintained. Where  
the credit support is in the form of a Reserve Fund, a permitted reduction in   
the amount                                                                      

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of credit enhancement will result in a release of all or a portion of the assets
in the Reserve Fund to the Depositor, the Master Servicer or such other person  
that is entitled thereto. Any assets so released will not be available for      
distributions in future periods.                                                

PRIMARY MORTGAGE INSURANCE, HAZARD INSURANCE; CLAIMS THEREUNDER 

     Each Mortgage Loan (other than any Cooperative Loan) will be required to be
covered by a hazard insurance policy (as described below) and, if required as   
described below, a Primary Mortgage Insurance Policy. Cooperative Loans         
generally will not be covered by a hazard insurance policy insuring the         
individual dwelling unit as the related Cooperative typically is responsible for
the maintenance of hazard insurance for property owned by such Cooperative. The 
following is only a brief description of certain insurance policies and does not
purport to summarize or describe all of the provisions of these policies. Such  
insurance is subject to underwriting and approval of individual Mortgage Loans  
by the respective insurers, unless such underwriting and approval authority has 
been delegated to the applicable lender. The descriptions of any insurance      
policies described in this Prospectus or any Prospectus Supplement and the      
coverage thereunder do not purport to be complete and are qualified in their    
entirety by reference to such forms of policies, sample copies of which are     
available upon request.                                                         

PRIMARY MORTGAGE INSURANCE POLICIES                                             

    Each Mortgage Loan having a Loan-to-Value Ratio at origination of over 80%
is required by the Depositor to be covered by a primary mortgage guaranty       
insurance policy (a "Primary Mortgage Insurance Policy") insuring against       
default on such Mortgage Loan up to at least the minimum amount required to be  
covered by FNMA and FHLMC, unless and until the principal balance of the        
Mortgage Loan is reduced to a level that would produce a Loan-to-Value Ratio    
equal to or less than 80%, and the applicable Seller will represent and warrant 
that, to the best of such Seller's knowledge, such Mortgage Loans are so        
covered. The Mortgagor with respect to each Mortgage Loan covered by a Primary  
Mortgage Insurance Policy will be required to pay the premiums allocable to such
Mortgage Loan under any applicable Primary Mortgage Insurance Policy. However,  
the foregoing standard may vary significantly depending on the characteristics  
of the Mortgage Loans and the applicable underwriting standards. A Mortgage Loan
will not be considered to be an exception to the foregoing standard if no       
Primary Mortgage Insurance Policy was obtained at origination but the Mortgage  
Loan has amortized to below an 80% Loan-to-Value Ratio level as of the          
applicable Cut-off Date. In addition, the Master Servicer will have the ability 
to cancel any Primary Mortgage Insurance Policy if the Loan-to-Value Ratio of   
the Mortgage Loan is reduced below a specified percentage, which typically will 
be either 75% or 80%, either based on an appraisal of the Mortgaged Property    
after the related Cut-off Date or as a result of principal payments that reduce 
the principal balance of the Mortgage Loan after such Cut-off Date, or if       
necessary to comply with applicable law.                                        

   While the terms and conditions of the Primary Mortgage Insurance Policies
issued by one primary mortgage guaranty insurer (a "Primary Mortgage Insurer")  
will differ from those in Primary Mortgage Insurance Policies issued by other   
Primary Mortgage Insurers, each Primary Mortgage Insurance Policy will in       
general provide substantially the following coverage. The amount of the loss as 
calculated under a Primary Mortgage Insurance Policy covering a Mortgage Loan   
(herein referred to as the "Loss") will generally consist of the unpaid         
principal amount of such Mortgage Loan and accrued and unpaid interest thereon  
and limited reimbursement of certain expenses, less (i) rents or other payments 
collected or received by the insured (other than the proceeds of hazard         
insurance) that are derived from the related Mortgaged Property, (ii) hazard    
insurance proceeds in excess of the amount required to restore such Mortgaged   
Property and which have not been applied to the payment of the Mortgage Loan,   
(iii) amounts expended but not approved by the Primary Mortgage Insurer, (iv)   
claim payments previously made on such Mortgage Loan and (v) unpaid premiums and
certain other amounts.                                                          

    The Primary Mortgage Insurer will generally be required to pay either: (i)
the insured percentage of the Loss; (ii) the entire amount of the Loss, after   
receipt by the Primary Mortgage Insurer of good and merchantable title to, and  
possession of, the Mortgaged Property; or (iii) at the option of the Primary    

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Mortgage Insurer under certain Primary Mortgage Insurance Policies, the sum of  
the delinquent monthly payments plus any advances made by the insured, both to  
the date of the claim payment and, thereafter, monthly payments in the amount   
that would have become due under the Mortgage Loan if it had not been discharged
plus any advances made by the insured until the earlier of (a) the date the     
Mortgage Loan would have been discharged in full if the default had not occurred
or (b) an approved sale.                                                        

     As conditions precedent to the filing or payment of a claim under a Primary
Mortgage Insurance Policy, in the event of default by the Mortgagor, the insured
will typically be required, among other things, to: (i) advance or discharge (a)
hazard insurance premiums and (b) as necessary and approved in advance by the   
Primary Mortgage Insurer, real estate taxes, protection and preservation        
expenses and foreclosure and related costs; (ii) in the event of any physical   
loss or damage to the Mortgaged Property, have the Mortgaged Property restored  
to at least its condition at the effective date of the Primary Mortgage         
Insurance Policy (ordinary wear and tear excepted); and, if requested by the    
Primary Mortgage Insurer, (iii) tender to the Primary Mortgage Insurer good and 
merchantable title to, and possession of, the Mortgaged Property. Because the   
Master Servicer will not be required to make Servicing Advances deemed to be    
nonrecoverable, conditions (i) and (ii) above may not be satisfied with respect 
to some claims under the Primary Mortgage Insurance Policies. In any such event,
Losses that would otherwise have been recoverable under the applicable Primary  
Mortgage Insurance Policy may not be paid under such policy and, as a result,   
will be borne by the Certificateholders.                                        

   For any Certificates offered hereunder, the Master Servicer will maintain
or cause any applicable Subservicer to maintain in full force and effect and to 
the extent coverage is available a Primary Mortgage Insurance Policy with regard
to each Mortgage Loan for which such coverage is required under the standard    
described above, provided that such Primary Mortgage Insurance Policy was in    
place as of the Cut-off Date and the Master Servicer had knowledge of such      
Primary Mortgage Insurance Policy. In the event that the Master Servicer gains  
knowledge that as of the Closing Date, a Mortgage Loan had a Loan-to-Value Ratio
at origination in excess of 80% and was not the subject of a Primary Mortgage   
Insurance Policy (and was not included in any exception to such standard        
disclosed in the related Prospectus Supplement) and that such Mortgage Loan has 
a then current Loan-to-Value Ratio in excess of 80%, then the Master Servicer is
required to use its reasonable efforts to obtain and maintain a Primary Mortgage
Insurance Policy to the extent that such a policy is obtainable at a reasonable 
price. The Master Servicer will not cancel or refuse to renew any such Primary  
Mortgage Insurance Policy in effect at the time of the initial issuance of a    
Series of Certificates that is required to be kept in force under the applicable
Pooling Agreement unless the replacement Primary Mortgage Insurance Policy for  
such cancelled or non-renewed policy is maintained with an insurer whose        
claims-paying ability is acceptable to the Rating Agency or Agencies that rated 
such Series of Certificates for mortgage pass-through certificates having a     
rating equal to or better than the then-current ratings of such Series of       
Certificates. (Section 3.11) The premiums allocable to a Mortgage Loan covered  
by any Primary Mortgage Insurance Policy, to the extent not paid by the related 
Mortgagor, will be reimbursed to the Master Servicer from collections on the    
Mortgage Pool. For further information regarding the extent of coverage under   
any Mortgage Pool Insurance Policy or Primary Mortgage Insurance Policy, see    
"DESCRIPTION OF CREDIT ENHANCEMENTS -- Mortgage Pool Insurance Policies."       

HAZARD INSURANCE POLICIES                                                       

    The terms of the Mortgage Loans (other than Cooperative Loans and Mortgage
Loans secured by condominium apartments) require each Mortgagor to maintain a   
hazard insurance policy with extended coverage customary in the state in which  
the related Mortgaged Property is located for their Mortgage Loan. Additionally,
the Pooling Agreement for each Series of Certificates will require the Master   
Servicer to cause to be maintained for each Mortgage Loan a hazard insurance    
policy providing for no less than the coverage of the standard form of fire     
insurance policy with extended coverage customary in the state in which the     
property is located. Such coverage generally will be in an amount equal to the  
lesser of the principal balance owing on such Mortgage Loan or 100% of the      
insurable value of the improvements securing the Mortgage Loan except that, if  
generally available, such coverage must not be less than the minimum amount     
required under the terms thereof to fully compensate for any damage or loss on a
replacement cost basis. The ability of the                                      

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Master Servicer to ensure that hazard insurance proceeds are appropriately      
applied may be dependent on its being named as an additional insured or loss    
payee under any hazard insurance policy and under any flood insurance policy    
referred to below, or upon the extent to which information in this regard is    
furnished to the Master Servicer by Mortgagors or Subservicers.                 

    As set forth above, all amounts collected by the Master Servicer under any
hazard policy (except for amounts to be applied to the restoration or repair of 
the Mortgaged Property or released to the Mortgagor in accordance with the      
Master Servicer's normal servicing procedures) will be deposited initially in   
the Custodial Account and ultimately in the Certificate Account, subject to     
permitted withdrawals. The Pooling Agreement provides that the Master Servicer  
may satisfy its obligation to cause hazard policies to be maintained by         
maintaining a blanket policy insuring against losses on the Mortgage Loans. If  
such blanket policy contains a deductible clause, the Master Servicer will      
deposit in the Custodial Account or the applicable Certificate Account all sums 
which would have been deposited therein but for such clause.                    

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

   The hazard insurance policies covering the Mortgaged Properties typically
contain a co-insurance clause 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, such clause generally provides that the insurer's         
liability in the event of partial loss does not exceed the greater of (i) the   
replacement cost of the improvements damaged or destroyed less physical         
depreciation or (ii) such proportion of the loss as the amount of insurance     
carried bears to the specified percentage of the full replacement cost of such  
improvements.                                                                   

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

     Under the terms of the Mortgage Loans, Mortgagors are generally required to
present claims to insurers under hazard insurance policies maintained on the    
Mortgaged Properties. The Master Servicer, on behalf of the Trustee and         
Certificateholders, is obligated to present claims under any Special Hazard     
Insurance Policy or other Special Hazard Instrument and any blanket insurance   
policy insuring against hazard losses on the                                    

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Mortgaged Properties. However, the ability of the Master Servicer to present    
such claims is dependent upon the extent to which information in this regard is 
furnished to the Master Servicer or the Subservicers by Mortgagors. (Section    
3.12)                                                                           

   Hazard insurance and flood insurance generally will not be maintained for
any Cooperative Loan or Mortgage Loan secured by a condominium apartment. With  
respect to a Cooperative Loan, generally the Cooperative itself is responsible  
for the maintenance of hazard insurance for the property owned by the           
Cooperative, and the tenant-stockholders of the Cooperative do not maintain     
individual hazard insurance policies. To the extent, however, that a Cooperative
and the related borrower on a Cooperative Loan 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. With respect to a Mortgage Loan secured by a condominium      
apartment, the condominium owner's association for the related building         
generally is responsible for maintenance of hazard insurance for such building, 
and the condominium owners do not maintain individual hazard insurance policies.
To the extent that a borrower who is the owner of a condominium apartment and   
the related condominium owner's association 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 condominium      
apartment or the related building could significantly reduce the value of the   
Mortgaged Property.                                                             

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THE POOLING AGREEMENT 

     As described above under "DESCRIPTION OF THE CERTIFICATES -- General," each
Series of Certificates will be issued pursuant to a Pooling Agreement as        
described in that section. The following summaries describe certain additional  
provisions common to each Pooling Agreement.                                    

SERVICING AND OTHER COMPENSATION AND PAYMENT OF EXPENSES; RETAINED YIELD        

   The principal servicing compensation to be paid to the Master Servicer in
respect of its master servicing activities for each Series of Certificates will 
be equal to the percentage per annum described in the related Prospectus        
Supplement (which may vary under certain circumstances) of the outstanding      
principal balance of each Mortgage Loan, and such compensation will be retained 
by it from collections of interest on such Mortgage Loan in the related Trust   
Fund (after provision has been made for the payment of interest at the          
applicable Pass-Through Rate to Certificateholders and for the payment of any   
Retained Yield) at the time such collections are deposited into the applicable  
Custodial Account. As compensation for its servicing duties, a Subservicer or,  
if there is no Subservicer, the Master Servicer will be entitled to a monthly   
servicing fee as described in the related Prospectus Supplement, which may vary 
under certain circumstances from the amounts described in the Prospectus        
Supplement. Certain Subservicers, in their capacity as Sellers, may also be     
entitled to Retained Yield as additional compensation for the sale of the       
applicable Mortgage Loans.                                                      

   The Master Servicer will pay or cause to be paid certain ongoing expenses
associated with each Trust Fund and incurred by it in connection with its       
responsibilities under the Pooling Agreement, including, without limitation,    
payment of any fee or other amount payable in respect of any alternative credit 
enhancement arrangements, payment of the fees and disbursements of the Trustee, 
any custodian appointed by the Trustee, the Certificate Registrar and any Paying
Agent, and payment of expenses incurred in enforcing the obligations of         
Subservicers and Sellers. The Master Servicer will be entitled to reimbursement 
of expenses incurred in enforcing the obligations of Subservicers and Sellers   
under certain limited circumstances. In addition, as described above under      
"DESCRIPTION OF THE CERTIFICATES -- Advances," the Master Servicer will be      
entitled to reimbursements for certain expenses incurred by it in connection    
with Liquidated Mortgage Loans and in connection with the restoration of        
Mortgaged Properties, such right of reimbursement being prior to the rights of  
Certificateholders to receive any related Liquidation Proceeds (including       
Insurance Proceeds).                                                            

     The Prospectus Supplement for a Series of Certificates will specify whether
there will be any Retained Yield. Any such Retained Yield will be a specified   
portion of the interest payable on each Mortgage Loan in a Mortgage Pool. Any   
such Retained Yield will be established on a loan-by-loan basis and the amount  
thereof with respect to each Mortgage Loan in a Mortgage Pool will be specified 
on an exhibit to the related Pooling Agreement. Any Retained Yield in respect of
a Mortgage Loan will represent a specified portion of the interest payable      
thereon and will not be part of the related Trust Fund. Any partial recovery of 
interest in respect of a Mortgage Loan will be allocated between the owners of  
any Retained Yield and the holders of Classes of Certificates entitled to       
payments of interest as provided in the Prospectus Supplement and the applicable
Pooling Agreement.                                                              

EVIDENCE AS TO COMPLIANCE                                                       

   Each Pooling Agreement will provide that on or before a specified date in
each year, beginning the first such date that is at least a specified number of 
months after the Cut-off Date, a firm of independent public accountants will    
furnish a statement to the Depositor and the Trustee to the effect that, on the 
basis of an examination by such firm conducted substantially in compliance with 
the Uniform Single Audit Program for Mortgage Bankers or the Audit Program for  
Mortgages serviced for FHLMC, the servicing of mortgage loans under agreements  
(including the related Pooling Agreement) substantially similar to each other   
was conducted in compliance with such agreements except for such significant    
exceptions or errors in records that, in the opinion of the firm, the Uniform   
Single Audit Program for Mortgage Bankers or the Audit Program for Mortgages    
serviced for FHLMC requires it to report. (Section 3.19)                        

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Each Pooling Agreement will also provide for delivery (on or before a 
specified date in each year) to the Trustee of an annual statement signed by an 
officer of the Master Servicer to the effect that the Master Servicer has       
fulfilled in all material respects its obligations under the Pooling Agreement  
throughout the preceding year or, if there has been a material default in the   
fulfillment of any such obligation, such statement shall specify each such known
default and the nature and status thereof. Such statement may be provided as a  
single form making the required statements as to more than one Pooling          
Agreement. (Section 3.18)                                                       

  Copies of the annual statement of the Master Servicer may be obtained by
Certificateholders without charge upon written request to the Trustee.          

CERTAIN MATTERS REGARDING THE MASTER SERVICER AND THE DEPOSITOR                 

     The Pooling Agreement for each Series of Certificates will provide that the
Master Servicer may not resign from its obligations and duties thereunder except
upon a determination that performance of such duties is no longer permissible   
under applicable law or except in connection with a permitted transfer of       
servicing. No such resignation will become effective until the Trustee or a     
successor servicer has assumed the Master Servicer's obligations and duties     
under the Pooling Agreement. (Section 6.04)                                     

   Each Pooling Agreement will also provide that, except as set forth below,
neither the Master Servicer, the Depositor, nor any director, officer, employee 
or agent of the Master Servicer or the Depositor will be under any liability to 
the Trust Fund or the Certificateholders for any action taken or for refraining 
from the taking of any action in good faith pursuant to the Pooling Agreement,  
or for errors in judgment; provided, however, that neither the Master Servicer, 
the Depositor, nor any such person will be protected against any liability which
would otherwise be imposed by reason of willful misfeasance, bad faith or gross 
negligence in the performance of duties or by reason of reckless disregard of   
obligations and duties thereunder. Each Pooling Agreement will further provide  
that the Master Servicer, the Depositor, and any director, officer, employee or 
agent of the Master Servicer or the Depositor is entitled to indemnification by 
the Trust Fund and will be held harmless against any loss, liability or expense 
incurred in connection with any legal action relating to the Pooling Agreement  
or the related Series of Certificates, other than any loss, liability or expense
related to any specific Mortgage Loan or Mortgage Loans (except any such loss,  
liability or expense otherwise reimbursable pursuant to the Pooling Agreement)  
and any loss, liability or expense incurred by reason of willful misfeasance,   
bad faith or gross negligence in the performance of duties thereunder or by     
reason of reckless disregard of obligations and duties thereunder. In addition, 
each Pooling Agreement will provide that neither the Master Servicer nor the    
Depositor will be under any obligation to appear in, prosecute or defend any    
legal or administrative action that is not incidental to its respective duties  
under the Pooling Agreement and which in its opinion may involve it in any      
expense or liability. The Master Servicer or the Depositor may, however, in its 
discretion undertake any such action which it may deem necessary or desirable   
with respect to the Pooling 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 Trust Fund and the     
Master Servicer or the Depositor, as the case may be, will be entitled to be    
reimbursed therefor out of funds otherwise distributable to Certificateholders. 
(Section 6.03)                                                                  

  Any person into which the Master Servicer may be merged or consolidated,
any person resulting from any merger or consolidation to which the Master       
Servicer is a party or any person succeeding to the business of the Master      
Servicer will be the successor of the Master Servicer under the Pooling         
Agreement, provided that (i) such person is qualified to service mortgage loans 
on behalf of FNMA or FHLMC and (ii) such merger, consolidation or succession    
does not adversely affect the then-current rating of the Classes of Certificates
of the related Series that have been rated. In addition, notwithstanding the    
prohibition on its resignation, the Master Servicer may assign its rights under 
a Pooling Agreement to any person to whom the Master Servicer is transferring a 
substantial portion of its mortgage servicing portfolio, provided clauses (i)   
and (ii) above are satisfied and such person is reasonably satisfactory to the  
Depositor and the Trustee. In the case of any such assignment, the Master       
Servicer will be released from its obligations under such Pooling Agreement,    
exclusive of liabilities and obligations incurred by it prior to the time of    
such assignment. (Section 6.02)                                                 

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EVENTS OF DEFAULT                                                               

 Events of Default under the Pooling Agreement in respect of a Series of
Certificates will include, without limitation, (i) any failure by the Master    
Servicer to make a required deposit to the Certificate Account or, if the Master
Servicer is the Paying Agent, to distribute to the holders of any Class of      
Certificates of such Series any required payment which continues unremedied for 
5 days after the giving of written notice of such failure to the Master Servicer
by the Trustee or the Depositor, or to the Master Servicer, the Depositor and   
the Trustee by the holders of Certificates of such Class evidencing not less    
than 25% of the aggregate Percentage Interests constituting such Class; (ii) any
failure by the Master Servicer duly to observe or perform in any material       
respect any other of its covenants or agreements in the Pooling Agreement with  
respect to such Series of Certificates which continues unremedied for 30 days   
(15 days in the case of a failure to pay the premium for any insurance policy   
which is required to be maintained under the Pooling Agreement) after the giving
of written notice of such failure to the Master Servicer by the Trustee or the  
Depositor, or to the Master Servicer, the Depositor and the Trustee by the      
holders of any Class of Certificates of such Series evidencing not less than 25%
of the aggregate Percentage Interests constituting such Class; and (iii) certain
events of insolvency, readjustment of debt, marshalling of assets and           
liabilities or similar proceedings regarding the Master Servicer and certain    
actions by the Master Servicer indicating its insolvency or inability to pay its
obligations. (Section 7.01)                                                     

RIGHTS UPON EVENT OF DEFAULT                                                    

    So long as an Event of Default remains unremedied, either the Depositor or
the Trustee may, and at the direction of the holders of Certificates evidencing 
not less than 51% of the aggregate undivided interests (or, if so specified in  
the related Prospectus Supplement, voting rights) in the related Trust Fund     
(except as otherwise provided for in the related Pooling Agreement with respect 
to the Credit Enhancer) the Trustee shall, by written notification to the Master
Servicer and to the Depositor or the Trustee, as applicable, terminate all of   
the rights and obligations of the Master Servicer under the Pooling Agreement   
covering such Trust Fund and in and to the Mortgage Loans and the proceeds      
thereof, whereupon the Trustee or, upon notice to the Depositor and with the    
Depositor's consent, its designee will succeed to all responsibilities, duties  
and liabilities of the Master Servicer under such Pooling Agreement and will be 
entitled to similar compensation arrangements. In the event that the Trustee    
would be obligated to succeed the Master Servicer but is unwilling so to act, it
may appoint (or if it is unable so to act, it shall appoint) or petition a court
of competent jurisdiction for the appointment of, a FNMA- or FHLMC-approved     
mortgage servicing institution with a net worth of at least $10,000,000 to act  
as successor to the Master Servicer under the Pooling Agreement. Pending such   
appointment, the Trustee is obligated to act in such capacity. The Trustee and  
such successor may agree upon the servicing compensation to be paid, which in no
event may be greater than the compensation to the initial Master Servicer under 
the Pooling Agreement. (Sections 7.01 and 7.02)                                 

No Certificateholder will have any right under a Pooling Agreement to 
institute any proceeding with respect to such Pooling Agreement (except as      
otherwise provided for in the related Pooling Agreement with respect to the     
Credit Enhancer) unless such holder previously has given to the Trustee written 
notice of default and the continuance thereof and unless the holders of         
Certificates of any Class evidencing not less than 25% of the aggregate         
Percentage Interests constituting such Class have made written request upon the 
Trustee to institute such proceeding in its own name as Trustee thereunder and  
have offered to the Trustee reasonable indemnity and the Trustee for 60 days    
after receipt of such request and indemnity has neglected or refused to         
institute any such proceeding. (Section 11.03) However, the Trustee will be     
under no obligation to exercise any of the trusts or powers vested in it by the 
Pooling Agreement or to institute, conduct or defend any litigation thereunder  
or in relation thereto at the request, order or direction of any of the holders 
of Certificates covered by such Pooling Agreement, unless such                  
Certificateholders have offered to the Trustee reasonable security or indemnity 
against the costs, expenses and liabilities which may be incurred therein or    
thereby. (Section 8.02)                                                         

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AMENDMENT                                                                       

     Each Pooling Agreement may be amended by the Depositor, the Master Servicer
and the Trustee, without the consent of any of the holders of Certificates      
covered by such Pooling Agreement, (i) to cure any ambiguity, (ii) to correct or
supplement any provision therein which may be inconsistent with any other       
provision therein or to correct any error, (iii) to change the timing and/or    
nature of deposits in the Custodial Account or the Certificate Account or to    
change the name in which the Custodial Account is maintained; provided that (a) 
the Certificate Account Deposit Date would in no event be later than the related
Distribution Date, (b) such change would not adversely affect in any material   
respect the interests of any Certificateholder, as evidenced by an opinion of   
counsel, and (c) such change would not adversely affect the then-current rating 
of any rated Classes of Certificates, as evidenced by a letter from each        
applicable Rating Agency, (iv) if a REMIC election has been made with respect to
the related Trust Fund, to modify, eliminate or add to any of its provisions (A)
to such extent as shall be necessary to maintain the qualification of the Trust 
Fund as a REMIC or to avoid or minimize the risk of imposition of any tax on the
related Trust Fund, provided that the Trustee has received an Opinion of Counsel
to the effect that (a) such action is necessary or desirable to maintain such   
qualification or to avoid or minimize such risk, and (b) such action will not   
adversely affect in any material respect the interests of any holder of         
Certificates covered by the Pooling Agreement, or (B) to restrict the transfer  
of the REMIC Residual Certificates, provided that the Depositor has determined  
that the then-current ratings of the Classes of the Certificates that have been 
rated will not be adversely affected, as evidenced by a letter from each        
applicable Rating Agency, and that any such amendment will not give rise to any 
tax with respect to the transfer of the REMIC Residual Certificates to a        
non-Permitted Transferee, (v) to make any other provisions with respect to      
matters or questions arising under such Pooling Agreement which are not         
materially inconsistent with the provisions thereof, provided that such action  
will not adversely affect in any material respect the interests of any          
Certificateholder, or (vi) to amend specified provisions that are not material  
to holders of any Class of Certificates offered hereunder.                      

The Pooling Agreement may also be amended by the Depositor, the Master
Servicer and the Trustee (except as otherwise provided for in the related       
Pooling Agreement with respect to the Credit Enhancer) with the consent of the  
holders of Certificates of each Class affected thereby evidencing, in each case,
not less than 66% of the aggregate Percentage Interests constituting such Class 
for the purpose of adding any provisions to or changing in any manner or        
eliminating any of the provisions of such Pooling Agreement or of modifying in  
any manner the rights of the holders of Certificates covered by such Pooling    
Agreement, except that no such amendment may (i) reduce in any manner the amount
of, or delay the timing of, payments received on Mortgage Loans which are       
required to be distributed on a Certificate of any Class without the consent of 
the holder of such Certificate or (ii) reduce the aforesaid percentage of       
Certificates of any Class the holders of which are required to consent to any   
such amendment without the consent of the holders of all Certificates of such   
Class covered by such Pooling Agreement then outstanding.                       

Notwithstanding the foregoing, if a REMIC election has been made with 
respect to the related Trust Fund, the Trustee will not be entitled to consent  
to any amendment to a Pooling Agreement without having first received an Opinion
of Counsel to the effect that such amendment or the exercise of any power       
granted to the Master Servicer, the Depositor or the Trustee in accordance with 
such amendment will not result in the imposition of a tax on the related Trust  
Fund or cause such Trust Fund to fail to qualify as a REMIC. (Section 11.01)    

TERMINATION; RETIREMENT OF CERTIFICATES                                         

The obligations created by the Pooling Agreement for each Series of   
Certificates (other than certain limited payment and notice obligations of the  
Trustee and the Depositor, respectively) will terminate upon the payment to     
Certificateholders of that Series of all amounts held in the Certificate Account
or by the Master Servicer and required to be paid to them pursuant to such      
Pooling Agreement following the earlier of (i) the final payment or other       
liquidation or disposition (or any advance with respect thereto) of the last    
Mortgage Loan subject thereto and all property acquired upon foreclosure or deed
in lieu of foreclosure of any such Mortgage Loan and (ii) the purchase by the   
Master Servicer or the Depositor or, if specified in the related Prospectus     
Supplement, by the holder of the REMIC Residual Certificates (see "FEDERAL      
INCOME                                                                          

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TAX CONSEQUENCES" below) from the Trust Fund for such Series of all remaining   
Mortgage Loans and all property acquired in respect of such Mortgage Loans. In  
no event, however, will the trust created by the Pooling Agreement continue     
beyond the expiration of 21 years from the death of the survivor of certain     
persons named in such Pooling Agreement. Written notice of termination of the   
Pooling Agreement will be given to each Certificateholder, and the final        
distribution will be made only upon surrender and cancellation of the           
Certificates at an office or agency appointed by the Trustee which will be      
specified in the notice of termination. (Section 9.01) If the Certificateholders
are permitted to terminate the trust under the applicable Pooling Agreement, a  
penalty may be imposed upon the Certificateholders based upon the fee that would
be foregone by the Master Servicer because of such termination.                 

 Any such purchase of Mortgage Loans and property acquired in respect of
Mortgage Loans evidenced by a Series of Certificates shall be made at the option
of the Master Servicer or the Depositor or, if applicable, the holder of the    
REMIC Residual Certificates at the price specified in the related Prospectus    
Supplement. The exercise of such right will effect early retirement of the      
Certificates of that Series, but the right of the Master Servicer or the        
Depositor or, if applicable, such holder to so purchase is subject to the       
aggregate principal balance of the Mortgage Loans for that Series as of the     
Distribution Date on which the purchase proceeds are to be distributed to       
Certificateholders being less than the percentage specified in the related      
Prospectus Supplement of the aggregate principal balance of the Mortgage Loans  
at the Cut-off Date for that Series. The Prospectus Supplement for each Series  
of Certificates will set forth the amounts that the holders of such Certificates
will be entitled to receive upon such early retirement. Such early termination  
may adversely affect the yield to holders of certain Classes of such            
Certificates. If a REMIC election has been made, the termination of the related 
Trust Fund will be effected in a manner consistent with applicable federal      
income tax regulations and its status as a REMIC. (Sections 9.01 and 9.02)      

THE TRUSTEE                                                                     

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

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

YIELD CONSIDERATIONS

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

Each monthly interest payment on a Mortgage Loan will be calculated as
one-twelfth of the applicable Mortgage Rate multiplied by the principal balance 
of such Mortgage Loan outstanding as of the first day of the month prior to the 
month in which the Distribution Date for the related Series of Certificates     
occurs, after giving effect to the payment of principal due on such first day,  
subject to any Deferred Interest. The amount of such payments with respect to   
each Mortgage Loan distributed (or accrued in the case of Deferred Interest or  
Accrual Certificates) monthly to holders of a Class of Certificates entitled to 
payments of interest will be similarly calculated on the basis of such Class's  
specified percentage of each such payment of interest (or                       

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accrual in the case of Accrual Certificates) and will be expressed as a fixed,  
adjustable or variable Pass-Through Rate payable on the outstanding principal   
balance or notional amount of such Certificate, or any combination of such      
Pass-Through Rates, calculated as described herein and in the related Prospectus
Supplement. Holders of Strip Certificates or a Class of Certificates having a   
Pass-Through Rate that varies based on the weighted average Mortgage Rate of the
underlying Mortgage Loans will be affected by disproportionate prepayments and  
repurchases of Mortgage Loans having higher Net Mortgage Rates or rates         
applicable to the Strip Certificates, as applicable.                            

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

    A Class of Certificates may be entitled to payments of interest at a fixed
Pass-Through Rate, a variable Pass-Through Rate or adjustable Pass-Through Rate,
or any combination of such Pass-Through Rates, each as specified in the related 
Prospectus Supplement. A variable Pass-Through Rate may be calculated based on  
the weighted average of the Mortgage Rates (net of servicing fees and any       
Retained Yield (each, a "Net Mortgage Rate")) of the related Mortgage Loans for 
the month preceding the Distribution Date if so specified in the related        
Prospectus Supplement. As will be described in the related Prospectus           
Supplement, the aggregate payments of interest on a Class of Certificates, and  
the yield to maturity thereon, will be affected by the rate of payment of       
principal on the Certificates (or the rate of reduction in the notional balance 
of Certificates entitled only to payments of interest) and, in the case of      
Certificates evidencing interests in ARM Loans or Net 5 Loans, by changes in the
Net Mortgage Rates on the ARM Loans or Net 5 Loans, as applicable. See "MATURITY
AND PREPAYMENT CONSIDERATIONS" below. The yield on the Certificates will also be
affected by liquidations of Mortgage Loans following Mortgagor defaults and by  
purchases of Mortgage Loans in the event of breaches of representations made in 
respect of such Mortgage Loans by the Sellers, or conversions of ARM Loans to a 
fixed interest rate. See "MORTGAGE LOAN PROGRAM -- Representations and          
Warranties by Sellers" and "Descriptions of the Certificates -- Assignment of   
Mortgage Loans" above.                                                          

    In general, if a Class of Certificates is purchased at initial issuance at
a premium and payments of principal on the related Mortgage Loans occur at a    
rate faster than anticipated at the time of purchase, the purchaser's actual    
yield to maturity will be lower than that assumed at the time of purchase.      
Conversely, if a Class of Certificates is purchased at initial issuance at a    
discount and payments of principal on the related Mortgage Loans occur at a rate
slower than that assumed at the time of purchase, the purchaser's actual yield  
to maturity will be lower than that originally anticipated. The effect of       
principal prepayments, liquidations and purchases on yield will be particularly 
significant in the case of a Series of Certificates having a Class entitled to  
payments of interest only or to payments of interest that are disproportionately
high relative to the principal payments to which such Class is entitled. Such a 
Class will likely be sold at a substantial premium to its principal balance and 
any faster than anticipated rate of prepayments will adversely affect the yield 
to holders thereof. In certain circumstances extremely rapid prepayments may    
result in the failure of such holders to recoup their original investment. In   
addition, the yield to maturity on certain other types of Classes of            
Certificates, including Accrual Certificates, Certificates with a Pass-Through  
Rate which fluctuates inversely with or at a multiple of an index or certain    
other Classes in a Series including more than one Class of Certificates, may be 
relatively more sensitive to the rate of prepayment on the related Mortgage     
Loans than other Classes of Certificates. See "RISK FACTORS -- Yield and        
Prepayment Uncertainty" above.                                                  

   The timing of changes in the rate of principal payments on or repurchases
of the Mortgage Loans may significantly affect an investor's actual yield to    
maturity, even if the average rate of principal payments experienced over time  
is consistent with an investor's expectation. In general, the earlier a         
prepayment of principal on the underlying Mortgage Loans or a repurchase        
thereof, the greater will be the effect on an investor's yield to maturity. As a
result, the effect on an investor's yield of principal payments and repurchases 
occurring at a rate higher (or lower) than the rate anticipated by the investor 
during the period immediately                                                   

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following the issuance of a Series of Certificates would not be fully offset by 
a subsequent like reduction (or increase) in the rate of principal payments.    

     When a full prepayment is made on a Mortgage Loan, the Mortgagor is charged
interest on the principal amount of the Mortgage Loan so prepaid for the number 
of days in the month actually elapsed up to the date of the prepayment, at a    
daily rate determined by dividing the Mortgage Rate by 365. Unless otherwise    
specified in the related Prospectus Supplement, the effect of prepayments in    
full will be to reduce the amount of interest paid in the following month to    
holders of Certificates entitled to payments of interest because interest on the
principal amount of any Mortgage Loan so prepaid will be paid only to the date  
of prepayment rather than for a full month. A partial prepayment of principal is
applied so as to reduce the outstanding principal balance of the related        
Mortgage Loan as of the first day of the month in which such partial prepayment 
is received. As a result, the effect of a partial prepayment on a Mortgage Loan 
will be to reduce the amount of interest passed through to holders of           
Certificates in the month following the receipt of such partial prepayment by an
amount equal to one month's interest at the applicable Pass-Through Rate or Net 
Mortgage Rate, as the case may be, on the prepaid amount to the extent such     
shortfalls in interest are not paid to the Certificateholders by the Master     
Servicer as Compensating Interest (as defined in the related Prospectus         
Supplement). If specified in the related Prospectus Supplement, such shortfalls 
in collections of a full month's interest in connection with prepayments (a     
"Prepayment Interest Shortfall") will be paid to the Certificateholders by the  
Master Servicer as Compensating Interest to the extent described in such        
Prospectus Supplement. See "DESCRIPTION OF THE CERTIFICATES -- Interest         
Distributions" and "CERTAIN YIELD AND PREPAYMENT CONSIDERATIONS" in the related 
Prospectus Supplement. Neither full nor partial principal prepayments are passed
through until the month following receipt. See "MATURITY AND PREPAYMENT         
CONSIDERATIONS."                                                                

  The rate of defaults on the Mortgage Loans will also affect the rate and
timing of principal payments on the Mortgage Loans and thus the yield on the    
Certificates. In general, defaults on mortgage loans are expected to occur with 
greater frequency in their early years. The rate of default on Mortgage Loans   
which are refinance mortgage loans, and on Mortgage Loans with high             
Loan-to-Value Ratios, may be higher than for other types of Mortgage Loans.     
Furthermore, the rate and timing of prepayments, defaults and liquidations on   
the Mortgage Loans will be affected by the general economic condition of the    
region of the country in which the related Mortgaged Properties are located. The
risk of delinquencies and loss is greater and prepayments are less likely in    
regions where a weak or deteriorating economy exists, as may be evidenced by,   
among other factors, increasing unemployment or falling property values.        

    For each Mortgage Pool, if all necessary advances are made and if there is
no unrecoverable loss on any Mortgage Loan, the net effect of each distribution 
respecting interest will be to pass-through to each holder of a Class of        
Certificates entitled to payments of interest an amount which is equal to one   
month's interest at the applicable Pass-Through Rate on such Class's principal  
balance or notional balance, as adjusted downward to reflect any decrease in    
interest caused by any principal prepayments and the addition of any Deferred   
Interest to the principal balance of any Mortgage Loan. See "DESCRIPTION OF THE 
CERTIFICATE -- Principal and Interest on the Certificates."                     

MATURITY AND PREPAYMENT CONSIDERATIONS

As indicated above under "THE MORTGAGE POOLS," the original terms to  
maturity of the Mortgage Loans in a given Mortgage Pool will vary depending upon
the type of Mortgage Loans included in such Mortgage Pool. The Prospectus       
Supplement for a Series of Certificates will contain information with respect to
the types and maturities of the Mortgage Loans in the related Mortgage Pool. The
Mortgage Loans may be prepaid without penalty in full or in part at any time.   
The prepayment experience of the Mortgage Loans in a Mortgage Pool will affect  
the life and yield of the related Series of Certificates. For a discussion of   
the prepayment risks associated with any Series of Certificates for which the   
related Mortgage Pool contains Convertible Mortgage Loans, see "RISK            
FACTORS -- Risks Presented by Convertible Mortgage Loans" and "DESCRIPTION OF   
THE MORTGAGE POOL" in the related Prospectus Supplement.                        

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    With respect to Balloon Loans, payment of the Balloon Amount (which, based
on the amortization schedule of such Mortgage Loans, is expected to be a        
substantial amount) will generally depend on the Mortgagor's ability to obtain  
refinancing of such Mortgage Loans or to sell the Mortgaged Property prior to   
the maturity of the Balloon Loan. The ability to obtain refinancing will depend 
on a number of factors prevailing at the time refinancing or sale is required,  
including, without limitation, real estate values, the Mortgagor's financial    
situation, prevailing mortgage loan interest rates, the Mortgagor's equity in   
the related Mortgaged Property, tax laws and prevailing general economic        
conditions. Neither the Seller or the Depositor, Bank of America, FSB nor any of
their affiliates will be obligated to refinance or repurchase any Mortgage Loan 
or to sell the Mortgaged Property.                                              

 A number of factors, including homeowner mobility, economic conditions,
enforceability of due-on-sale clauses, mortgage market interest rates,          
solicitations and the availability of mortgage funds, affect prepayment         
experience. The Mortgage Loans (other than ARM Loans) will contain due-on-sale  
provisions permitting the mortgagee to accelerate the maturity of the Mortgage  
Loan upon sale or certain transfers by the Mortgagor of the underlying Mortgaged
Property. The Master Servicer will generally enforce any due-on-sale clause to  
the extent it has knowledge of the conveyance or proposed conveyance of the     
underlying Mortgaged Property and it is entitled to do so under applicable law, 
provided, however, that the Master Servicer will not take any action in relation
to the enforcement of any due-on-sale provision which would adversely affect or 
jeopardize coverage under any applicable insurance policy. An ARM Loan is       
assumable under certain conditions if the proposed transferee of the related    
Mortgaged Property establishes its ability to repay the Mortgage Loan and, in   
the reasonable judgment of the Master Servicer or any related Subservicer, the  
security for the ARM Loan would not be impaired by the assumption. The extent to
which ARM Loans are assumed by purchasers of the Mortgaged Properties rather    
than prepaid by the related Mortgagors in connection with the sales of the      
Mortgaged Properties will affect the weighted average life of the related Series
of Certificates. See "DESCRIPTION OF THE CERTIFICATES -- Collection and Other   
Servicing Procedures" and "Certain Legal Aspects of the Mortgage Loans and      
Related Matters -- Enforceability of Certain Provisions" for a description of   
certain provisions of the Pooling Agreement and certain legal developments that 
may affect the prepayment experience on the Mortgage Loans.                     

At the request of the Mortgagor, the Master Servicer may allow the    
refinancing of a Mortgage Loan in any Trust Fund by accepting prepayments       
thereon and permitting a new loan secured by a mortgage on the same property. In
the event of such a refinancing, the new loan would not be included in the      
related Trust Fund and, therefore, such refinancing would have the same effect  
as a prepayment in full of the related Mortgage Loan. The Master Servicer may,  
from time to time, implement programs designed to encourage refinancing. Such   
programs may include, without limitation, modifications of existing loans,      
general or targeted solicitations, the offering of pre-approved applications,   
reduced origination fees or closing costs, or other financial incentives. In    
addition, the Master Servicer may encourage the refinancing of Mortgage Loans,  
including defaulted Mortgage Loans, that would permit creditworthy borrowers to 
assume the outstanding indebtedness of such Mortgage Loans.                     

    All statistics known to the Depositor that have been compiled with respect
to prepayment experience on mortgage loans indicate that while some mortgage    
loans may remain outstanding until their stated maturities, a substantial number
will be paid prior to their respective stated maturities.                       

     Although the Mortgage Rates on ARM Loans and Net 5 Loans will be subject to
periodic adjustments, such adjustments generally will, as specified in the      
related Prospectus Supplement, (i) not increase or decrease such Mortgage Rates 
by more than a stated percentage amount on each adjustment date, (ii) not       
increase such Mortgage Rates over a fixed percentage amount during the life of  
any ARM Loan and (iii) be based on an index (which may not rise and fall        
consistently with mortgage interest rates) plus the related Note Margin (which  
may be different from margins being used at the time for newly originated       
adjustable rate mortgage loans). As a result, the Mortgage Rates on the ARM     
Loans or Net 5 Loans, as applicable, in a Mortgage Pool at any time may not     
equal the prevailing rates for similar, newly originated mortgage loans. In     
certain rate environments, the prevailing rates on fixed-rate mortgage loans may
be sufficiently low in relation to the then-current Mortgage Rates on ARM Loans 
or Net 5 Loans that the rate of prepayment may increase                         

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as a result of refinancings. There can be no certainty as to the rate of        
prepayments on the Mortgage Loans during any period or over the life of any     
Series of Certificates.                                                         

  Under certain circumstances, the Master Servicer or the Depositor or, if
specified in the related Prospectus Supplement, the holders of the REMIC        
Residual Certificates may have the option to purchase the Mortgage Loans in a   
Trust Fund. See "THE POOLING AGREEMENT -- Termination; Retirement of            
Certificates."                                                                  

CERTAIN LEGAL ASPECTS OF MORTGAGE LOANS AND RELATED MATTERS 

 The following discussion contains summaries of certain legal aspects of
mortgage loans that are general in nature. Because such legal aspects are       
governed in part by state law (which laws may differ substantially from state to
state), the summaries do not purport to be complete, to reflect the laws of any 
particular state or to encompass the laws of all states in which the Mortgaged  
Properties may be situated. If the Mortgaged Properties relating to a Series of 
Certificates are concentrated in a particular state or states, the related      
Prospectus Supplement will contain a summary of relevant laws of such state or  
states to the extent such laws are not addressed generally in the following     
discussion. The summaries are qualified in their entirety by reference to the   
applicable federal and state laws governing the Mortgage Loans.                 

GENERAL                                                                         

     The Mortgage Loans (other than Cooperative Loans) will be secured by either
deeds of trust or mortgages, depending upon the prevailing practice in the state
in which the related Mortgaged Property is located. In some states, a mortgage  
or deed of trust creates a lien upon the real property encumbered by the        
mortgage. In other states, the mortgage or deed of trust conveys legal title to 
the property to the mortgagee subject to a condition subsequent (i.e., the      
payment of the indebtedness secured thereby). It is not prior to the lien for   
real estate taxes and assessments and other charges imposed under governmental  
police powers. Priority with respect to such instruments depends on their terms 
and in some cases on the terms of separate subordination or inter-creditor      
agreements, and generally on the order of recordation of the mortgage in the    
appropriate recording office. There are two parties to a mortgage, the          
mortgagor, who is the borrower and homeowner, and the mortgagee, who is the     
lender. Under the mortgage instrument, the mortgagor delivers to the mortgagee a
note or bond and the mortgage. In the case of a land trust, there are three     
parties because title to the property is held by a land trustee under a land    
trust agreement of which the borrower is the beneficiary; at origination of a   
mortgage loan, the borrower executes a separate undertaking to make payments on 
the mortgage note. Although a deed of trust is similar to a mortgage, a deed of 
trust has three parties: the trustor, who is the borrower/homeowner; the        
beneficiary, who is the lender; and a third-party grantee called the trustee.   
Under a deed of trust, the borrower grants the property, irrevocably until the  
debt is paid, in trust, generally with a power of sale, to the trustee to secure
payment of the obligation. The trustee's authority under a deed of trust and the
mortgagee's authority under a mortgage are governed by the law of the state in  
which the real property is located, the express provisions of the deed of trust 
or mortgage and, in certain deed of trust transactions, the directions of the   
beneficiary. A Mortgage Pool may also contain Cooperative Loans which are       
described below under "-- Cooperative Loans."                                   

COOPERATIVE LOANS                                                               

If specified in the Prospectus Supplement relating to a Series of     
Certificates, the Mortgage Loans may include Cooperative Loans. Each promissory 
note (a "Cooperative Note") evidencing a Cooperative Loan will be secured by a  
security interest in shares issued by the related private cooperative housing   
corporation (a "Cooperative") that owns the related apartment building, which is
a corporation entitled to be treated as a housing cooperative under federal tax 
law, and in the related proprietary lease or occupancy agreement granting       
exclusive rights to occupy a specific dwelling unit in the Cooperative's        
building. The security agreement will create a lien upon, or grant a security   
interest in, the Cooperative shares and proprietary lease or occupancy          
agreement, the priority of which will depend on the terms of the particular     
security agreement as well as the order of recordation of the agreement (or the 
filing of the financing statements related thereto) in                          

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the appropriate recording office or the taking of possession of the Cooperative 
shares, depending on the law of the state in which the Cooperative is located.  
Such a lien or security interest is not, in general, prior to liens in favor of 
the Cooperative for unpaid assessments or common charges.                       

Unless otherwise specified in the related Prospectus Supplement, all  
Cooperative buildings relating to the Cooperative Loans are located in the      
States of New York and New Jersey. Generally, each Cooperative owns in fee or   
has a leasehold interest in all the real property and owns in fee or leases the 
building and all separate dwelling units therein. The Cooperative is directly   
responsible for property management and, in most cases, payment of real estate  
taxes, other governmental impositions and hazard and liability insurance. If    
there is an underlying mortgage (or mortgages) on the Cooperative's building or 
underlying land, as is generally the case, or an underlying lease of the land,  
as is the case in some instances, the Cooperative, as mortgagor or lessee, as   
the case may be, is also responsible for fulfilling such mortgage or rental     
obligations. An underlying mortgage loan is ordinarily obtained by the          
Cooperative in connection with either the construction or purchase of the       
Cooperative's building or the obtaining of capital by the Cooperative. The      
interest of the occupant under proprietary leases or occupancy agreements as to 
which that Cooperative is the landlord is generally subordinate to the interest 
of the holder of an underlying mortgage and to the interest of the holder of a  
land lease. If the Cooperative is unable to meet the payment obligations (i)    
arising under an underlying mortgage, the mortgagee holding an underlying       
mortgage could foreclose on that mortgage and terminate all subordinate         
proprietary leases and occupancy agreements or (ii) arising under its land      
lease, the holder of the landlord's interest under the land lease could         
terminate it and all subordinate proprietary leases and occupancy agreements. In
addition, an underlying mortgage on a Cooperative may provide financing in the  
form of a mortgage that does not fully amortize, with a significant portion of  
principal being due in one final payment at maturity. The inability of the      
Cooperative to refinance a mortgage and its consequent inability to make such   
final payment could lead to foreclosure by the mortgagee. Similarly, a land     
lease has an expiration date and the inability of the Cooperative to extend its 
term or, in the alternative, to purchase the land, could lead to termination of 
the Cooperative's interest in the property and termination of all proprietary   
leases and occupancy agreements. In either event, a foreclosure by the holder of
an underlying mortgage or the termination of the underlying lease could         
eliminate or significantly diminish the value of any collateral held by the     
lender who financed the purchase by an individual tenant-stockholder of shares  
of the Cooperative or, in the case of the Mortgage Loans, the collateral        
securing the Cooperative Loans.                                                 

Each Cooperative is owned by shareholders (referred to as             
tenant-stockholders) who, through ownership of stock or shares in the           
Cooperative, receive proprietary leases or occupancy agreements which confer    
exclusive rights to occupy specific dwellings. Generally, a tenant-stockholder  
of a Cooperative must make a monthly maintenance payment to the Cooperative     
pursuant to the proprietary lease, which maintenance payment represents such    
tenant-stockholder's pro rata share of the Cooperative's payments for its       
underlying mortgage, real property taxes, maintenance expenses and other capital
or ordinary expenses. An ownership interest in a Cooperative and accompanying   
occupancy rights may be financed through a Cooperative Loan evidenced by a      
Cooperative Note and secured by an assignment of and a security interest in the 
occupancy agreement or proprietary lease and a security interest in the related 
shares of the related Cooperative. The lender generally takes possession of the 
share certificate and a counterpart of the proprietary lease or occupancy       
agreement and a financing statement covering the proprietary lease or occupancy 
agreement and the Cooperative shares is filed in the appropriate state and local
offices to perfect the lender's interest in its collateral. Subject to the      
limitations discussed below, upon default of the tenant-stockholder, the lender 
may sue for judgment on the Cooperative Note, dispose of the collateral at a    
public or private sale or otherwise proceed against the collateral or           
tenant-stockholder as an individual as provided in the security agreement       
covering the assignment of the proprietary lease or occupancy agreement and the 
pledge of Cooperative shares. See "-- Foreclosure on Shares of Cooperatives"    
below.                                                                          

TAX ASPECTS OF COOPERATIVE OWNERSHIP                                            

    In general, a "tenant-stockholder" (as defined in Section 216(b)(2) of the
Code) of a corporation that qualifies as a "cooperative housing corporation"    
within the meaning of Section 216(b)(1) of the Code is allowed a deduction for  
amounts paid or accrued within his or her taxable year to the corporation       
representing                                                                    

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his or her proportionate share of certain interest expenses and certain real    
estate taxes allowable as deductions to the corporation under Section 163 and   
164 of the Code. In order for a corporation to qualify under Section 216(b)(1)  
of the Code for the taxable year to which such interest and tax deductions      
relate, such section requires, among other things, that at least 80% of the     
gross income of the corporation be derived from its tenant-stockholders. By     
virtue of this requirement, the status of a corporation for purposes of Section 
216(b)(1) of the Code must be determined on a year-to-year basis. Consequently, 
there can be no assurance that Cooperatives relating to the Cooperative Loans   
will qualify under such section for any particular year. In the event that such 
a Cooperative fails to qualify for one or more years, the value of the          
collateral securing any related Cooperative Loans could be significantly        
impaired because no deduction would be allowable to tenant-stockholders under   
Section 216(a) of the Code with respect to those years. In view of the          
significance of the tax benefits accorded tenant-stockholders of a corporation  
that qualifies under Section 216(b)(1) of the Code, the likelihood that such a  
failure would be permitted to continue over a period of years appears remote.   

FORECLOSURE                                                                     

Although a deed of trust may also be foreclosed by judicial action,   
foreclosure of a deed of trust is generally accomplished by a nonjudicial       
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 addition to any notice requirements      
contained in a 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 notice of default and notice of sale. In       
addition, in some states, the trustee must provide notice to any other          
individual having an interest of record in the real property, including any     
junior lienholders. If the deed of trust is not reinstated within a specified   
period, a notice of sale must be posted in a public place and, in most states,  
published for a specific period of time in one or more newspapers. In addition, 
some states' laws require that a copy of the notice of sale be posted on the    
property and sent to all parties having an interest of record in the real       
property.                                                                       

 Foreclosure of a mortgage generally is accomplished by judicial action.
Generally, the action is initiated by the service of legal pleadings upon all   
parties having an interest of record in the real property. Delays in completion 
of the foreclosure may result from difficulties in locating and serving         
necessary parties, including borrowers located outside the jurisdiction in which
the mortgaged property is located. If the mortgagee's right to foreclose is     
contested, the legal proceedings necessary to resolve the issue can be          
time-consuming.                                                                 

     In some states, the borrower-trustor has the right to reinstate the loan at
any time following default until shortly before the trustee's sale. In general, 
in such states, the borrower, or any other person having a junior encumbrance on
the real estate, may, during a reinstatement period, cure the default by paying 
the entire amount in arrears plus the costs and expenses incurred in enforcing  
the obligation.                                                                 

    In the case of foreclosure under either a mortgage or a deed of trust, the
sale by the referee or other designated officer or by the trustee generally is a
public sale. However, because of the difficulty a potential buyer at the sale   
would have in determining the exact status of title and because the physical    
condition of the property may have deteriorated during the foreclosure          
proceedings, it is uncommon for a third party to purchase the property at a     
foreclosure sale. Rather, it is common for the lender to purchase the property  
from the trustee or referee for a credit bid less than or equal to the unpaid   
principal amount of the mortgage or deed of trust, accrued and unpaid interest  
and the expense of foreclosure. Generally, state law controls the amount of     
foreclosure costs and expenses, including attorneys' fees, which may be         
recovered by a lender. Thereafter, subject to the right of the borrower in some 
states to remain in possession during the redemption period, the lender will    
assume the burdens of ownership, including obtaining hazard insurance and making
such repairs at its own expense as are necessary to render the property suitable
for sale. Generally, the lender will obtain the services of a real estate broker
and pay the broker's commission in connection with the sale of the property.    
Depending upon market conditions, the ultimate proceeds of the sale of the      
property may not equal the lender's investment in the property and, in some     
states, the lender may be entitled to a deficiency judgment. Any loss may be    
reduced by the receipt of any mortgage insurance proceeds or other forms of     
credit enhancement for a Series of Certificates. See "DESCRIPTION OF CREDIT     
ENHANCEMENTS."                                                                  

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FORECLOSURE ON SHARES OF COOPERATIVES                                           

   The Cooperative shares owned by the tenant-stockholder, together with the
rights of the tenant-stockholder under the proprietary lease or occupancy       
agreement, are pledged to the lender and are, in almost all cases, subject to   
restrictions on transfer as set forth in the Cooperative's certificate of       
incorporation and by-laws, as well as in the proprietary lease or occupancy     
agreement. The proprietary lease or occupancy agreement, even while pledged, may
be cancelled by the Cooperative for failure by the tenant-stockholder to pay    
maintenance or other obligations or charges owed by such tenant-stockholder,    
including mechanics' liens against the Cooperative's building incurred by such  
tenant-stockholder. Generally, maintenance and other obligations and charges    
arising under a proprietary lease or occupancy agreement which are owed to the  
Cooperative are made liens upon the shares to which the proprietary lease or    
occupancy agreement relates. In addition, the proprietary lease or occupancy    
agreement generally permits the Cooperative to terminate such lease or agreement
in the event the borrower defaults in the performance of covenants thereunder.  
Typically, the lender and the Cooperative enter into a recognition agreement    
which, together with any lender protection provisions contained in the          
proprietary lease or occupancy agreement, establishes the rights and obligations
of both parties in the event of a default by the tenant-stockholder on its      
obligations under the proprietary lease or occupancy agreement. A default by the
tenant-stockholder under the proprietary lease or occupancy agreement will      
usually constitute a default under the security agreement between the lender and
the tenant-stockholder.                                                         

  The recognition agreement generally provides that, in the event that the
tenant-stockholder has defaulted under the proprietary lease or occupancy       
agreement, the Cooperative will take no action to terminate such lease or       
agreement until the lender has been provided with notice of and an opportunity  
to cure the default. The recognition agreement typically provides that if the   
proprietary lease or occupancy agreement is terminated, the Cooperative will    
recognize the lender's lien against proceeds from a sale of the shares and the  
proprietary lease or occupancy agreement allocated to the dwelling, subject,    
however, to the Cooperative's right to sums due under such proprietary lease or 
occupancy agreement or which have become liens on the shares relating to the    
proprietary lease or occupancy agreement. The total amount owed to the          
Cooperative by the tenant-stockholder, which the lender generally cannot        
restrict and does not monitor, could reduce the amount realized upon a sale of  
the collateral below the outstanding principal balance of the Cooperative Loan  
and accrued and unpaid interest thereon.                                        

    Recognition agreements also generally provide that in the event the lender
succeeds to the tenant-stockholder's shares and proprietary lease or occupancy  
agreements as the result of realizing upon its collateral for a Cooperative     
Loan, the lender must obtain the approval or consent of the board of directors  
of the Cooperative as required by the proprietary lease before transferring the 
Cooperative shares and assigning the proprietary lease. Such approval or consent
is usually based on the prospective purchaser's income and net worth, among     
other factors, and may significantly reduce the number of potential purchasers, 
which could limit the ability of the lender to sell and realize upon the value  
of the collateral. Generally, the lender is not limited in any rights it may    
have to dispossess the tenant-stockholder.                                      

Because of the nature of Cooperative Loans, lenders do not require the
tenant-stockholder (i.e., the borrower) to obtain title insurance of any type.  
Consequently, the existence of any prior liens or other imperfections of title  
affecting the Cooperative's building or real estate also may adversely affect   
the marketability of the shares allocated to the dwelling unit in the event of  
foreclosure.                                                                    

   A foreclosure on the Cooperative shares is accomplished by public sale in
accordance with the provisions of Article 9 of the Uniform Commercial Code (the 
"UCC") and the security agreement relating to those shares. Article 9 of the UCC
requires that a sale be conducted in a "commercially reasonable" manner. Whether
a sale has been conducted in a "commercially reasonable" manner will depend on  
the facts in each case. In determining commercial reasonableness, a court will  
look to the notice given the debtor and the method, manner, time, place and     
terms of the sale and the sale price. Generally, a sale conducted according to  
the usual practice of creditors selling similar collateral 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                     

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recognition agreement, however, generally provides that the lender's right to   
reimbursement is subject to the right of the Cooperative corporation to receive 
sums due under the proprietary lease or occupancy agreement. If there are       
proceeds remaining, the lender must account to the tenant-stockholder for the   
surplus. Conversely, if a portion of the indebtedness remains unpaid, the       
tenant-stockholder is generally responsible for the deficiency. See             
"-- Anti-Deficiency Legislation and Other Limitations on Lenders" below.        

RIGHTS OF REDEMPTION                                                            

    In some states, after sale pursuant to a deed of trust or foreclosure of a
mortgage, the borrower and foreclosed junior lienors or other parties are given 
a statutory period (generally ranging from six months to two years) in which to 
redeem the property from the foreclosure sale. In some states, redemption may   
occur only upon payment of the entire principal balance of the loan, accrued    
interest and expenses of foreclosure. In other states, redemption may be        
authorized if the former borrower pays only a portion of the sums due. The      
effect of a statutory right of redemption is to diminish the ability of the     
lender to sell the foreclosed property. The rights of redemption would defeat   
the title of any purchaser subsequent to foreclosure or sale under a deed of    
trust. Consequently, the practical effect of the redemption right is to force   
the lender to maintain the property and pay the expenses of ownership until the 
redemption period has expired.                                                  

ANTI-DEFICIENCY LEGISLATION AND OTHER LIMITATIONS ON LENDERS                    

     Certain states have imposed statutory prohibitions which limit the remedies
of a beneficiary under a deed of trust or a mortgagee under a mortgage. In some 
states (including California), statutes limit the right of the beneficiary or   
mortgagee to obtain a deficiency judgment against the borrower following        
foreclosure. A deficiency judgment is a personal judgment against the former    
borrower equal in most cases to the difference between the net amount realized  
upon the public sale of the real property and the amount due to the lender. In  
the case of a Mortgage Loan secured by a property owned by a trust where the    
Mortgage Note is executed on behalf of the trust, a deficiency judgment against 
the trust following foreclosure or sale under a deed of trust, even if          
obtainable under applicable law, may be of little value to the mortgagee or     
beneficiary if there are no trust assets against which such deficiency judgment 
may be executed. Some state 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. In certain other states, the lender has the option of bringing a  
personal action against the borrower on the debt without first exhausting such  
security; however in some of these states, the lender, following judgment on    
such personal action, may be deemed to have elected a remedy and may be         
precluded from exercising remedies with respect to the security. Consequently,  
the practical effect of the election requirement, in those states permitting    
such election, is that lenders will usually proceed against the security first  
rather than bringing a personal action against the borrower.                    

     Finally, in certain other states, statutory provisions limit any deficiency
judgment against the borrower following a foreclosure to the excess of the      
outstanding debt over the fair value of the property at the time of the public  
sale. The purpose of these statutes is generally to prevent a beneficiary or    
mortgagee from obtaining a large deficiency judgment against the former borrower
as a result of low or no bids at the judicial sale.                             

   Generally, Article 9 of the UCC governs foreclosure on Cooperative shares
and the related proprietary lease or occupancy agreement. Some courts have      
interpreted Article 9 to prohibit or limit a deficiency award in certain        
circumstances, including circumstances where the disposition of the collateral  
(which, in the case of a Cooperative Loan, would be the shares of the           
Cooperative and the related proprietary lease or occupancy agreement) was not   
conducted in a commercially reasonable manner.                                  

    In addition to laws limiting or prohibiting deficiency judgments, numerous
other federal and state statutory provisions, including the federal bankruptcy  
laws and state laws affording relief to debtors, may interfere with or affect   
the ability of the secured mortgage lender to realize upon its collateral and/or
enforce a deficiency judgment. For example, under the federal bankruptcy law,   
all actions against the debtor, the debtor's property and any co-debtor are     
automatically stayed upon the filing of a bankruptcy petition. Moreover, a court
having federal bankruptcy jurisdiction may permit a debtor through its Chapter  
11 or                                                                           

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Chapter 13 rehabilitative plan to cure a monetary default in respect of a       
mortgage loan on a debtor's residence by paying arrearages within a reasonable  
time period and reinstating the original mortgage loan payment schedule, even   
though the lender accelerated the mortgage loan and final judgment of           
foreclosure had been entered in state court prior to the filing of the debtor's 
petition. Some courts with federal bankruptcy jurisdiction have approved plans, 
based on the particular facts of the reorganization case, that effected the     
curing of a mortgage loan default by paying arrearages over a number of years.  

  Courts with federal bankruptcy jurisdiction have also indicated that the
terms of a mortgage loan secured by property which is not the principal         
residence of the debtor may be modified. These courts have allowed modifications
that include reducing the amount of each monthly payment, changing the rate of  
interest, altering the repayment schedule, forgiving all or a portion of the    
debt and reducing the lender's security interest to the value of the residence, 
thus leaving the lender a general unsecured creditor for the difference between 
the value of the residence and the outstanding balance of the loan. Courts with 
federal bankruptcy jurisdiction similarly may be able to modify the terms of a  
Cooperative Loan. Generally, however, the terms of a mortgage loan secured only 
by a mortgage on real property that is the debtor's principal residence may not 
be modified pursuant to a plan confirmed pursuant to Chapter 11 or Chapter 13   
except with respect to mortgage payment arrearages, which may be cured within a 
reasonable time period.                                                         

 Certain tax liens arising under the Code may, in certain circumstances,
have priority over the lien of a mortgage or deed of trust. This may have the   
effect of delaying or interfering with the enforcement of rights with respect to
a defaulted Mortgage Loan. In addition, substantive requirements are imposed    
upon mortgage lenders in connection with the origination and the servicing of   
mortgage loans by numerous federal and some state consumer protection laws.     
These laws include the federal Truth-in-Lending Act, Real Estate Settlement     
Procedures Act, Equal Credit Opportunity Act, Fair Credit Billing Act, Fair     
Credit Reporting Act and related statutes. These laws impose specific statutory 
liabilities upon lenders who originate mortgage loans and who fail to comply    
with the provisions of the law. In some cases, this liability may affect        
assignees of the mortgage loans.                                                

ENVIRONMENTAL LEGISLATION                                                       

    Real property pledged as security to a lender may be subject to unforeseen
environmental risks. Most environmental statutes create obligations for any     
party that can be classified as the "owner" or "operator" of a "facility"       
(referring to both operating facilities and to real property). Under the laws of
some states and under the federal Comprehensive Environmental Response,         
Compensation and Liability Act of 1980, a lender may be liable, as an "owner" or
"operator," for costs arising out of releases or threatened releases of         
hazardous substances that require remedy at a mortgaged property, if agents or  
employees of the lender have become sufficiently involved in the operations of  
the borrower or, subsequent to a foreclosure, in the management of the property.
Such liability may arise regardless of whether the environmental damage or      
threat was caused by a prior owner.                                             

    Under federal and certain state laws, contamination of a property may give
rise to a lien on the property to assure the payment of clean-up costs. Under   
federal law and in several states, such a lien has priority over the lien of an 
existing mortgage against such property. If a lender is or becomes directly     
liable for environmental remediation as an "owner" following a foreclosure, it  
may be precluded from bringing an action for contribution against the owner or  
operator who created the environmental hazard. Such clean-up costs may be       
substantial. It is possible that such costs could become a liability of the     
related Trust Fund and occasion a loss to Certificateholders in certain         
circumstances described above if such remedial costs were incurred.             

     At the time the Mortgage Loans were originated, no environmental assessment
or a very limited environment assessment of the Mortgaged Properties will have  
been conducted.                                                                 

ENFORCEABILITY OF CERTAIN PROVISIONS                                            

 The Mortgage Loans generally contain due-on sale clauses. These clauses
permit the lender to accelerate the maturity of the loan if the borrower sells, 
transfers or conveys the property. The enforceability of these clauses has been 
the subject of legislation or litigation in many states, and in some cases the  
enforceability of                                                               

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these clauses was limited or denied. However, the Garn-St Germain Depository    
Institutions Act of 1982 (the "Garn-St Germain Act") preempts state             
constitutional, statutory and case law that prohibit the enforcement of         
due-on-sale clauses and permits lenders to enforce these clauses in accordance  
with their terms, subject to certain limited exceptions. The Garn-St Germain Act
does "encourage" lenders to permit assumption of loans at the original rate of  
interest or at some other rate less than the average of the original rate and   
the market rate.                                                                

    The Garn-St Germain Act also sets forth nine specific instances in which a
mortgage lender covered by the Garn-St Germain Act may not exercise a           
due-on-sale clause, notwithstanding the fact that a transfer of the mortgaged   
property may have occurred. These include intra-family transfers, certain       
transfers by operation of law, leases of fewer than three years and the creation
of a junior encumbrance. Regulations promulgated under the Garn-St Germain Act  
also prohibit the imposition of a prepayment penalty upon the acceleration of a 
loan pursuant to a due-on-sale clause.                                          

     The inability to enforce a due-on-sale clause may result in a mortgage loan
bearing an interest rate below the current market rate being assumed by a new   
home buyer rather than being paid off, which may have an impact upon the average
life of the Mortgage Loans and the number of Mortgage Loans which may be        
outstanding until maturity.                                                     

   Upon foreclosure, courts have imposed general equitable principles. These
equitable principles are generally designed to relieve the borrower from the    
legal effect of 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 required that lenders reinstate  
loans or recast payment schedules in order to accommodate borrowers who are     
suffering from temporary financial disability. In other cases, courts have      
limited the right of the lender to foreclose if the default under the mortgage  
instrument is not monetary, such as the borrower failing to adequately maintain 
the property or the borrower executing a second mortgage or deed of trust       
affecting the property. Finally, some courts have been faced with the issue of  
whether or not federal or state constitutional provisions reflecting due process
concerns for adequate notice require that borrowers under deeds of trust or     
mortgages receive notices in addition to the statutorily prescribed minimum. For
the most part, these cases have upheld the notice provisions as being reasonable
or have found that the sale by a trustee under a deed of trust, or under a      
mortgage having a power of sale, does not involve sufficient state action to    
afford constitutional protections to the borrower.                              

APPLICABILITY OF USURY LAWS                                                     

  Title V of the Depository Institutions Deregulation and Monetary Control
Act of 1980 ("Title V"), provides that state usury limitations shall not apply  
to certain types of residential first mortgage loans originated by certain      
lenders after March 31, 1980. A similar federal statute was in effect with      
respect to mortgage loans made during the first three months of 1980. The Office
of Thrift Supervision is authorized to issue rules and regulations and to       
publish interpretations governing implementation of Title V. The statute        
authorized any state to reimpose interest rate limits by adopting, before April 
1, 1983, a law or constitutional provision which expressly rejects application  
of the federal law. In addition, even where Title V is not so rejected, any     
state is authorized by the law to adopt a provision limiting discount points or 
other charges on mortgage loans covered by Title V. Certain states have taken   
action to reimpose interest rate limits or to limit discount points or other    
charges.                                                                        

As indicated above under "MORTGAGE LOAN PROGRAM -- Representations and
Warranties by Sellers," each Seller of a Mortgage Loan will have represented    
that each Mortgage Loan sold by it was originated in compliance with then       
applicable state laws, including usury laws, in all material respects. However, 
the Mortgage Rates on the Mortgage Loans will be subject to applicable usury    
laws as in effect from time to time.                                            

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ALTERNATIVE MORTGAGE INSTRUMENTS                                                

    Alternative mortgage instruments, including adjustable rate mortgage loans
and early ownership mortgage loans, originated by non-federally chartered       
lenders have historically been subjected to a variety of restrictions. Such     
restrictions differed from state to state, resulting in difficulties in         
determining whether a particular alternative mortgage instrument originated by a
state-chartered lender was in compliance with applicable law. These difficulties
were alleviated substantially as a result of the enactment of Title VIII of the 
Garn-St Germain Act ("Title VIII"). Title VIII provides that, notwithstanding   
any state law to the contrary, (i) state-chartered banks may originate          
alternative mortgage instruments in accordance with regulations promulgated by  
the Comptroller of the Currency with respect to origination of alternative      
mortgage instruments by national banks, (ii) state-chartered credit unions may  
originate alternative mortgage instruments in accordance with regulations       
promulgated by the National Credit Union Administration with respect to         
origination of alternative mortgage instruments by federal credit unions and    
(iii) all other non-federally chartered housing creditors, including            
state-chartered savings and loan associations, state-chartered savings banks and
mutual savings banks and mortgage banking companies, may originate alternative  
mortgage instruments in accordance with the regulations promulgated by the      
Federal Home Loan Bank Board, predecessor to the Office of Thrift Supervision,  
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.                         

SOLDIERS' AND SAILORS' CIVIL RELIEF ACT OF 1940                                 

    Under the terms of the Soldiers' and Sailors' Civil Relief Act of 1940, as
amended (the "Relief Act"), a borrower who enters military service after the    
origination of such borrower's mortgage loan (including a borrower who was in   
reserve status and is called to active duty after origination of the mortgage   
loan), may not be charged interest (including fees and charges) above an annual 
rate of 6% during the period of such borrower's active duty status, unless a    
court orders otherwise upon application of the lender. The Relief Act applies to
borrower who are members of the Army, Navy, Air Force, Marines, National Guard, 
Reserves, Coast Guard, and officers of the U.S. Public Health Service assigned  
to duty with the military. Because the Relief Act applies to borrowers who enter
military service (including reservists who are called to active duty) after     
origination of the related mortgage loan, no information can be provided as to  
the number of mortgage loans that may be affected by the Relief Act. With       
respect to Mortgage Loans included in a Trust Fund, application of the Relief   
Act would adversely affect, for an indeterminate period of time, the ability of 
the Master Servicer to collect full amounts of interest on certain of the       
Mortgage Loans. Any shortfall in interest collections resulting from the        
application of the Relief Act or similar legislation or regulations, which would
not be recoverable from the related Mortgage Loans, would result in a reduction 
of the amounts distributable to the holders of the related Certificates, and    
would not be covered by Advances or any form of credit enhancement provided in  
connection with the related Series of Certificates. In addition, the Relief Act 
imposes limitations that would impair the ability of the Master Servicer to     
foreclose on an affected Mortgage Loan during the Mortgagor's period of active  
duty status, and, under certain circumstances, during an additional three month 
period thereafter. Thus, in the event that the Relief Act or similar legislation
or regulations applies to any Mortgage Loan which goes into default, there may  
be delays in payment and losses on the related Certificates in connection       
therewith. Any other interest shortfalls, deferrals or forgiveness of payments  
on the Mortgage Loans resulting from similar legislation or regulations may     
result in delays in payments or losses to Certificateholders of the related     
Series.                                                                         

FEDERAL INCOME TAX CONSEQUENCES 

GENERAL                                                                         

The following is a general discussion of anticipated material federal 
income tax consequences of the purchase, ownership and disposition of the       
Certificates offered hereunder. This discussion is directed solely to           
Certificateholders that hold the Certificates as "capital assets" within the    
meaning of Section 1221 of the                                                  

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Code and does not purport to discuss all federal income tax consequences that   
may be applicable to particular categories of investors, some of which (such as 
banks, insurance companies and foreign investors) may be subject to special     
rules. Section 1221 of the Code defines "capital assets" generally as property  
other than (i) property held for sale to customers or (ii) real, tangible       
personal, property used in a trade or business. Further, the authorities on     
which this discussion, and the opinion referred to below, are based are subject 
to change or differing interpretations, which could apply retroactively.        
Taxpayers and preparers of tax returns (including those filed by any REMIC or   
other issuer) should be aware that under applicable Treasury regulations a      
provider of advice on specific issues of law is not considered an income tax    
return preparer unless the advice (i) is given with respect to events that have 
occurred at the time the advice is rendered and is not given with respect to the
consequences of contemplated actions, and (ii) is directly relevant to the      
determination of an entry on a tax return. Accordingly, taxpayers should consult
their own tax advisors and tax return preparers regarding the preparation of any
item on a tax return, even where the anticipated tax treatment has been         
discussed herein. In addition to the federal income tax consequences described  
herein, potential investors should consider the state and local tax             
consequences, if any, of the purchase, ownership and disposition of the         
Certificates. See "STATE AND OTHER TAX CONSEQUENCES." Certificateholders are    
advised to consult their own tax advisors concerning the federal, state, local  
or other tax consequences to them of the purchase, ownership and disposition of 
the Certificates offered hereunder. Additional material income tax consequences 
may be set forth in the related Prospectus Supplement.                          

 The following discussion addresses securities of two general types: (i)
certificates ("Grantor Trust Certificates") representing interests in a Trust   
Fund ("Grantor Trust Fund") which the Master Servicer will covenant not to elect
to have treated as a real estate mortgage investment conduit ("REMIC"), and (ii)
certificates ("REMIC Certificates") representing interests in a Trust Fund, or a
portion thereof, which the Master Servicer will covenant to elect to have       
treated as a REMIC under Sections 860A through 860G (the "REMIC Provisions") of 
the Code. The Prospectus Supplement for each Series of Certificates will        
indicate whether a REMIC election (or elections) will be made for the related   
Trust Fund and, if such an election is to be made, will identify all "regular   
interests" and "residual interests" in the REMIC. For purposes of this tax      
discussion, references to a "Certificateholder" or a "holder" are to the        
beneficial owner of a Certificate.                                              

     The following discussion is based in part upon the rules governing original
issue discount that are set forth in Sections 1271-1273 and 1275 of the Code and
in the Treasury regulations issued thereunder (the "OID Regulations"), and in   
part upon the REMIC Provisions and the Treasury regulations issued thereunder   
(the "REMIC Regulations"). The OID Regulations, which are effective with respect
to debt instruments issued on or after April 4, 1994, do not adequately address 
certain issues relevant to, and in some instances provide that they are not     
applicable to, securities such as the Certificates.                             

GRANTOR TRUST FUNDS                                                             

Classification of Grantor Trust Funds                                 

With respect to each Series of Grantor Trust Certificates, Orrick,    
Herrington & Sutcliffe LLP, counsel to the Depositor ("Special Tax Counsel"), is
of the opinion that, assuming compliance with all provisions of the related     
Pooling Agreement, the related Grantor Trust Fund will be Classified as a       
grantor trust under subpart E, part I of subchapter J of the Code and not as a  
partnership or an association taxable as a corporation. Accordingly, each holder
of a Grantor Trust Certificate generally will be treated as the owner of an     
interest in the Mortgage Loans included in the Grantor Trust Fund. The following
general discussion of the anticipated federal income tax consequences of the    
purchase, ownership and disposition of the Grantor Trust Certificates together  
with the discussion, if any, under the heading "FEDERAL INCOME TAX CONSEQUENCES"
in the Prospectus Supplement represents the opinion of Special Tax Counsel,     
subject to any qualifications set forth herein and therein. Special Tax Counsel 
have prepared or reviewed the statements in this Prospectus under the heading   
"FEDERAL INCOME TAX CONSEQUENCES" and in the Prospectus Supplement under the    
heading "FEDERAL INCOME TAX CONSEQUENCES," if any, and are of the opinion that  
such statements are correct in all material respects. A copy of the opinion of  
Special Tax Counsel relating to such statements will be included in a Current   
Report on Form 8-K filed prior to the Delivery Date with                        

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respect to any Series of Grantor Trust Certificates. Such statements are        
intended as an explanatory discussion of the possible effects of the            
classification of the Trust Fund as a grantor trust for federal income tax      
purposes on investors generally and of related tax matters affecting investors  
generally, but do not purport to furnish information in the level of detail or  
with attention to an investor's specific tax circumstances that would be        
provided by an investor's own tax advisor. Accordingly, each investor is advised
to consult its own tax advisors with regard to the tax consequences to it of    
investing in the Grantor Trust Certificates.                                    

For purposes of the following discussion, a Grantor Trust Certificate 
representing an undivided equitable ownership interest in the principal of the  
Mortgage Loans constituting the related Grantor Trust Fund, together with       
interest thereon at a pass-through rate, will be referred to as a "Grantor Trust
Fractional Interest Certificate." A Grantor Trust Certificate representing      
ownership of all or a portion of the difference between interest paid on the    
Mortgage Loans constituting the related Grantor Trust Fund (net of normal       
administration fees and any Retained Yield) and interest paid to the holders of 
Grantor Trust Fractional Interest Certificates issued with respect to such      
Grantor Trust Fund will be referred to as a "Grantor Trust Strip Certificate." A
Grantor Trust Strip Certificate may also evidence a nominal ownership interest  
in the principal of the Mortgage Loans constituting the related Grantor Trust   
Fund.                                                                           

CHARACTERIZATION OF INVESTMENTS IN GRANTOR TRUST CERTIFICATES                   

Grantor Trust Fractional Interest Certificates                        

In the case of Grantor Trust Fractional Interest Certificates, if so  
specified in the related Prospectus Supplement and subject to the discussion    
below with respect to Buydown Mortgage Loans, Grantor Trust Fractional Interest 
Certificates will represent interests in (i) "loans . . . secured by an interest
in real property" within the meaning of Section 7701(a)(19)(C)(v) of the Code;  
(ii) "obligation[s] (including any participation or certificate of beneficial   
ownership therein) which . . . [are] principally secured by an interest in real 
property" within the meaning of Section 860G(a)(3)(A) of the Code; and (iii)    
"real estate assets" within the meaning of Section 856(c)(4)(A) of the Code. In 
addition, if so specified in the related Prospectus Supplement, interest on     
Grantor Trust Fractional Interest Certificates will be considered "interest on  
obligations secured by mortgages on real property or on interests in real       
property" within the meaning of Section 856(c)(3)(B) of the Code. Special Tax   
Counsel provides no assurances as to the treatment of Grantor Trust Fractional  
Interest Certificates under the Code provisions described in this paragraph,    
except to the extent specified in the related Prospectus Supplement.            

 The assets constituting certain Grantor Trust Funds may include Buydown
Mortgage Loans. The characterization of an investment in Buydown Mortgage Loans 
will depend upon the precise terms of the related Buydown Agreement, but to the 
extent that such Buydown Mortgage Loans are secured by a bank account or other  
personal property, they may not be treated in their entirety as assets described
in the foregoing sections of the Code. No directly applicable precedents exist  
with respect to the federal income tax treatment or the characterization of     
investments in Buydown Mortgage Loans. Accordingly, holders of Grantor Trust    
Certificates should consult their own tax advisors with respect to the          
characterization of investments in Grantor Trust Certificates representing an   
interest in a Grantor Trust Fund that includes Buydown Mortgage Loans.          

Grantor Trust Strip Certificates                                      

    Even if Grantor Trust Strip Certificates evidence an interest in a Grantor
Trust Fund consisting of Mortgage Loans that are "qualifying real property      
loans" within the meaning of Section 593(d) of the Code and "real estate assets"
within the meaning of Section 856(c)(4)(A) of the Code, and the interest on     
which is "interest on obligations secured by mortgages on real property" within 
the meaning of Section 856(c)(3)(B) of the Code, it is unclear whether the      
Grantor Trust Strip Certificates, and the income therefrom, will be so          
characterized. However, the policies underlying such sections (namely, to       
encourage or require investments in mortgage loans by thrift institutions and   
real estate investment trusts) may suggest that such characterization is        
appropriate. Counsel to the Depositor will not deliver any opinion on these     
questions. Prospective purchasers to which such characterization of an          
investment in Grantor Trust Strip Certificates is                               

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material should consult their tax advisors regarding whether the Grantor Trust  
Strip Certificates, and the income therefrom, will be so characterized.         

    The Grantor Trust Strip Certificates will be "obligation[s] (including any
participation or certificate of beneficial ownership therein) which . . . [are] 
principally secured by an interest in real property" within the meaning of      
Section 860G(a)(3)(A) of the Code.                                              

Taxation of Owners of Grantor Trust Fractional Interest Certificates  

Holders of a particular Series of Grantor Trust Fractional Interest   
Certificates generally will be required to report on their federal income tax   
returns their shares of the entire income from the Mortgage Loans (including    
amounts used to pay reasonable servicing fees and other expenses) and will be   
entitled to deduct their shares of any such reasonable servicing fees and other 
expenses. Because of stripped interests, market or original issue discount, or  
premium, the amount includible in income on account of a Grantor Trust          
Fractional Interest Certificate may differ significantly from the amount        
distributable thereon representing interest on the Mortgage Loans. Under Section
67 of the Code, an individual, estate or trust holding a Grantor Trust          
Fractional Interest Certificate directly or through certain pass-through        
entities will be allowed a deduction for such reasonable servicing fees and     
expenses only to the extent that the aggregate of such holder's miscellaneous   
itemized deductions exceeds two percent of such holder's adjusted gross income. 
In addition, Section 68 of the Code provides that the amount of itemized        
deductions otherwise allowable for an individual whose adjusted gross income    
exceeds a specified amount will be reduced by the lesser of (i) 3% of the excess
of the individual's adjusted gross income over such amount or (ii) 80% of the   
amount of itemized deductions otherwise allowable for the taxable year. The     
amount of additional taxable income reportable by holders of Grantor Trust      
Fractional Interest Certificates who are subject to the limitations of either   
Section 67 or Section 68 of the Code may be substantial. Further,               
Certificateholders (other than corporations) subject to the alternative minimum 
tax may not deduct miscellaneous itemized deductions in determining such        
holder's alternative minimum taxable income. Although it is not entirely clear, 
it appears that in transactions in which multiple Classes of Grantor Trust      
Certificates (including Grantor Trust Strip Certificates) are issued, such fees 
and expenses should be allocated among the Classes of Grantor Trust Certificates
using a method that recognizes that each such Class benefits from the related   
services. In the absence of statutory or administrative clarification as to the 
method to be used, it currently is intended to base information returns or      
reports to the Internal Revenue Service (the "IRS") and Certificateholders on a 
method that allocates such expenses among Classes of Grantor Trust Certificates 
with respect to each period based on the distributions made to each such Class  
during that period.                                                             

The federal income tax treatment of Grantor Trust Fractional Interest 
Certificates of any Series will depend on whether they are subject to the       
"stripped bond" rules of Section 1286 of the Code. Grantor Trust Fractional     
Interest Certificates may be subject to those rules if (i) a Class of Grantor   
Trust Strip Certificates is issued as part of the same Series of Certificates or
(ii) the Depositor or any of its affiliates retains (for its own account or for 
purposes of resale) a right to receive a specified portion of the interest      
payable on the Mortgage Loans. Further, the IRS has ruled that an unreasonably  
high servicing fee retained by a seller or servicer will be treated as a        
retained ownership interest in mortgages that constitutes a stripped coupon. For
purposes of determining what constitutes reasonable servicing fees for various  
types of mortgages the IRS has established certain "safe harbors." The servicing
fees paid with respect to the Mortgage Loans for certain Series of Grantor Trust
Certificates may be higher than the "safe harbors" and, accordingly, may not    
constitute reasonable servicing compensation. The related Prospectus Supplement 
will include information regarding servicing fees paid to the Master Servicer,  
any subservicer or their respective affiliates necessary to determine whether   
the preceding "safe harbor" rules apply.                                        

If Stripped Bond Rules Apply                                          

  If the stripped bond rules apply, each Grantor Trust Fractional Interest
Certificate will be treated as having been issued with "original issue discount"
within the meaning of Section 1273(a) of the Code, subject, however, to the     
discussion below regarding the treatment of certain stripped bonds as market    
discount bonds and the discussion regarding de minimis market discount. See     
"-- Taxation of Owners of Grantor Trust                                         

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Fractional Interest Certificates -- Market Discount." Under the stripped bond   
rules, the holder of a Grantor Trust Fractional Interest Certificate (whether a 
cash or accrual method taxpayer) will be required to report interest income from
its Grantor Trust Fractional Interest Certificate for each month in an amount   
equal to the income that accrues on such Certificate in that month calculated   
under a constant yield method, in accordance with the rules of the Code relating
to original issue discount.                                                     

The original issue discount on a Grantor Trust Fractional Interest    
Certificate will be the excess of such Certificate's stated redemption price    
over its issue price. The issue price of a Grantor Trust Fractional Interest    
Certificate as to any purchaser will be equal to the price paid by such         
purchaser for the Grantor Trust Fractional Interest Certificate. The stated     
redemption price of a Grantor Trust Fractional Interest Certificate will be the 
sum of all payments to be made on such Certificate, as well as such             
Certificate's share of reasonable servicing fees and other expenses, other than 
payments of "qualified stated interest," if any. See "-- Taxation of Owners of  
Grantor Trust Fractional Interest Certificates -- If Stripped Bond Rules Do Not 
Apply" for a definition of "qualified stated interest." In general, the amount  
of such income that accrues in any month would equal the product of such        
holder's adjusted basis in such Grantor Trust Fractional Interest Certificate at
the beginning of such month (see "Sales of Grantor Trust Certificates") and the 
yield of such Grantor Trust Fractional Interest Certificate to such holder. Such
yield would be computed at the rate (assuming compounding based on the regular  
interval between payment dates) that, if used to discount the holder's share of 
future payments on the Mortgage Loans, would cause the present value of those   
future payments to equal the price at which the holder purchased such           
Certificate. In computing yield under the stripped bond rules, a                
Certificateholder's share of future payments on the Mortgage Loans will not     
include any payments made in respect of any ownership interest in the Mortgage  
Loans retained by the Depositor, the Master Servicer, any subservicer or their  
respective affiliates, but will include such Certificateholder's share of any   
reasonable servicing fees and other expenses.                                   

Section 1272(a)(6) of the Code requires (i) the use of a reasonable   
prepayment assumption in accruing original issue discount and (ii) adjustments  
in the accrual of original issue discount when prepayments do not conform to the
prepayment assumption with respect to the Grantor Trust Fractional Interest     
Certificates. It is uncertain whether the assumed prepayment rate should be     
determined based on conditions at the time of the first sale of the Grantor     
Trust Fractional Interest Certificate or, with respect to any subsequent holder,
at the time of purchase of the Grantor Trust Fractional Interest Certificate by 
that holder. Certificateholders are advised to consult their own tax advisors   
concerning reporting original issue discount in general and, in particular, how 
a prepayment assumption should be used in reporting original issue discount with
respect to Grantor Trust Fractional Interest Certificates.                      

    In the case of a Grantor Trust Fractional Interest Certificate acquired at
a price equal to the principal amount of the Mortgage Loans allocable to such   
Certificate, the use of a prepayment assumption will not ordinarily have any    
significant effect on the yield used in calculating accruals of interest income.
In the case, however, of a Grantor Trust Fractional Interest Certificate        
acquired at a discount or premium (that is, at a price less than or greater than
such principal amount, respectively), the use of a prepayment assumption will   
increase or decrease such yield, and thus accelerate or decelerate,             
respectively, the reporting of income.                                          

When a Mortgage Loan prepays in full, it appears that the holder of a 
Grantor Trust Fractional Interest Certificate acquired at a discount or a       
premium generally will not recognize a separate item of income or loss. Instead,
a prepayment should be treated as a partial payment of the stated redemption    
price of the Grantor Trust Fractional Interest Certificate and accounted for    
under a method similar to that described for taking account of original issue   
discount on REMIC Regular Certificates. See "-- REMICs -- Taxation of Owners of 
REMIC Regular Certificates -- Original Issue Discount." It is unclear what      
adjustments will be required to reflect differences between an assumed          
prepayment rate and the actual rate of prepayments.                             

In the absence of statutory or administrative clarification, it is    
currently intended to base information reports or returns to the IRS and        
Certificateholders in transactions subject to the stripped bond rules on a      
prepayment assumption (the "Prepayment Assumption") that will be disclosed in   
the related Prospectus Supplement and on a constant yield computed using a      
representative initial offering price for each Class of Certificates. However,  
neither the Depositor nor the Master Servicer will make any representation that 
the                                                                             

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Mortgage Loans will in fact prepay at a rate conforming to such Prepayment      
Assumption or any other rate and Certificateholders should bear in mind that the
use of a representative initial offering price will mean that such information  
returns or reports, even if otherwise accepted as accurate by the IRS, will in  
any event be accurate only as to the initial Certificateholders of each Series  
who bought at that price.                                                       

    Under Treasury regulation Section 1.1286-1T, certain stripped bonds are to
be treated as market discount bonds and, accordingly, any purchaser of such a   
bond is to account for any discount on the bond as market discount rather than  
original issue discount. This treatment only applies, however, if immediately   
after the most recent disposition of the bond by a person stripping one or more 
coupons from the bond and disposing of the bond or coupon (i) there is no       
original issue discount (or only a de minimis amount of original issue discount)
or (ii) the annual stated rate of interest payable on the original bond is no   
more than one percentage point lower than the gross interest rate payable on the
original mortgage loan (before subtracting any servicing fee or any stripped    
coupon). If interest payable on a Grantor Trust Fractional Interest Certificate 
is more than one percentage point lower than the gross interest rate payable on 
the Mortgage Loans, the related Prospectus Supplement will disclose that fact.  
If the original issue discount or market discount on a Grantor Trust Fractional 
Interest Certificate determined under the stripped bond rules is less than 0.25%
of the stated redemption price multiplied by the weighted average maturity of   
the Mortgage Loans, then such original issue discount or market discount will be
considered to be de minimis. Original issue discount or market discount of only 
a de minimis amount will be included in income in the same manner as de minimis 
original issue and market discount described in "-- Taxation of Owners of       
Grantor Trust Fractional Interest Certificates -- If Stripped Bond Rules Do Not 
Apply" and "-- Market Discount."                                                

If Stripped Bond Rules Do Not Apply                                   

     Subject to the discussion below on original issue discount, if the stripped
bond rules do not apply to a Grantor Trust Fractional Interest Certificate, the 
Certificateholder will be required to report its share of the interest income on
the Mortgage Loans in accordance with such Certificateholder's normal method of 
accounting.                                                                     

   Recently enacted amendments to Section 1272(a)(6) of the Code require the
use of a prepayment assumption in determining the existence and accrual of      
original issue discount associated with pools of debt instruments whose yield   
may be affected by prepayments. No regulations have been issued interpreting the
application of this provision to securities such as the Grantor Trust Fractional
Interest Certificates nor do the committee reports prepared by those            
Congressional committees that examined such provision in the course of its      
enactment provide guidance as to its intended application to such securities. In
the absence of such guidance, various interpretations are possible. For example,
the provision could be interpreted as requiring the pool of mortgage loans      
underlying the Grantor Trust Fractional Interest Certificates to be segregated  
into two subpools consisting respectively of those mortgage loans that had      
original issue discount upon their origination (the "OID Pool") and those       
mortgage loans that did not have original issue discount upon their origination 
(the "Non-OID Pool"). A holder of a Grantor Trust Fractional Interest           
Certificate would be required to report its share of the interest income on the 
Mortgage Loans in the Non-OID Pool in accordance with such holder's normal      
method of accounting and, to the extent that the portion of its purchase price  
for such Certificates properly allocable to its interest in the Non-OID Pool    
were less than its share of the aggregate principal amount of the Mortgage Loans
in the Non-OID Pool, would be subject to the Market Discount rules described    
below under "Market Discount" or "REMICS -- Taxation of Owners of REMIC Regular 
Certificates -- Market Discount." Such holder would be required to treat the    
portion of its Certificate representing an interest in the OID Pool as a single 
debt instrument issued on the Closing Date with original issue discount equal to
its pro-rata share of the aggregate of the unaccrued original issue discount on 
the Mortgage Loans in the OID Pool as of such date and subject to the rules for 
reporting original issue discount described under "REMICS -- Taxation of Owners 
of REMIC Regular Certificates -- Original Issue Discount." To the extent that   
the portion of such holder's purchase price for its Certificate properly        
allocable to the OID Pool represented a discount greater than such holder's     
pro-rata share of the aggregate original issue discount on the Mortgage Loans in
the OID Pool, such holder would be subject to the Market Discount Rules         

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described below under "REMICS -- Taxation of Owners of REMIC Regular            
Certificates -- Market Discount."                                               

 Alternatively, a Grantor Trust Fractional Interest Certificate could be
treated as a single debt instrument issued on the Closing Date and subject to   
the rules described under "REMICS -- Taxation of Owners of REMIC Regular        
Certificates -- Original Issue Discount" and "-- Market Discount." Other        
interpretations of the application of the original issue discount rules to      
Grantor Trust Fractional Interest Certificates are possible. Investors are urged
to consult their tax advisors concerning the application and effect of such     
rules on their investment in such Certificates.                                 

The Trustee will provide to any holder of a Grantor Trust Fractional  
Interest Certificate such information as such holder may reasonably request from
time to time with respect to original issue discount accruing on Grantor Trust  
Fractional Interest Certificates. See "Grantor Trust Reporting" below.          

Market Discount                                                       

 If the stripped bond rules do not apply to the Grantor Trust Fractional
Interest Certificate, a Certificateholder may be subject to the market discount 
rules of Sections 1276 through 1278 of the Code. The amendment to Section       
1272(a)(6) of the Code described under "-- Stripped Bond Rules Do Not Apply,"   
above, could be interpreted as requiring the use of a prepayment assumption in  
connection with the determination, accrual and inclusion in income of market    
discount. If such a requirement were applicable, a Grantor Trust Fractional     
Interest Certificate would probably be treated as a single aggregate debt       
instrument to which the rules described under "REMICS -- Taxation of Owners of  
REMIC Regular Certificates -- Market Discount" would apply. Alternatively, if   
the requirement of a prepayment assumption were not applicable, the rules       
described in the succeeding paragraphs of this section would be applicable      
either on a Mortgage-Loan-by-Mortgage-Loan basis or on such a basis with respect
to the Non-OID Pool and on an aggregate basis with respect to the OID Pool.     
Other interpretations of the effect of the amendment to Section 1272(a)(6) on   
the determination and accrual of market discount are possible. Investors are    
advised to consult their tax advisors concerning the application of the market  
discount rules to Grantor Trust Fractional Interest Certificates.               

    If a prepayment assumption generally is not required in the application of
the market discount rules to pools of debt instruments, a Grantor Trust         
Fractional Interest Certificate may be subject to the market discount rules to  
the extent an interest in a Mortgage Loan is considered to have been purchased  
at a "market discount," that is, in the case of a Mortgage Loan issued without  
original issue discount, at a purchase price less than its remaining stated     
redemption price (as defined above), or in the case of a Mortgage Loan issued   
with original issue discount, at a purchase price less than its adjusted issue  
price (as defined above). If market discount is in excess of a de minimis amount
(as described below), the holder generally will be required to include in income
in each month the amount of such discount that has accrued (under the rules     
described in the next paragraph) through such month that has not previously been
included in income, but limited, in the case of the portion of such discount    
that is allocable to any Mortgage Loan, to the payment of stated redemption     
price on such Mortgage Loan that is received by (or, in the case of accrual     
basis Certificateholders, due to) the Trust Fund in that month. A               
Certificateholder may elect to include market discount in income currently as it
accrues (under a constant yield method based on the yield of the Certificate to 
such holder) rather than including it on a deferred basis in accordance with the
foregoing. If made, such election will apply to all market discount bonds       
acquired by such Certificateholder during or after the first taxable year to    
which such election applies. In addition, the OID Regulations would permit a    
Certificateholder to elect to accrue all interest, discount (including de       
minimis market or original issue discount) and premium in income as interest,   
based on a constant yield method. If such an election were made with respect to 
a Mortgage Loan with market discount, the Certificateholder would be deemed to  
have made an election to include market discount in income currently with       
respect to all other debt instruments having market discount that such          
Certificateholder acquires during the taxable year of the election and          
thereafter, and possibly previously acquired instruments. Similarly, a          
Certificateholder that made this election for a Certificate acquired at a       
premium would be deemed to have made an election to amortize bond premium with  
respect to all debt instruments having amortizable bond premium that such       
Certificateholder owns or acquires. See "-- REMICs -- Taxation of Owners of     
REMIC Regular Certificates -- Premium" below. Each of these elections           

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to accrue interest, discount and premium with respect to a Certificate on a     
constant yield method or as interest is irrevocable.                            

Section 1276(b)(3) of the Code specifically authorizes the Treasury   
Department to issue regulations providing for the method for accruing market    
discount on debt instruments, the principal of which is payable in more than one
installment. Until such time as regulations are issued by the Treasury          
Department, certain rules described in the Conference Committee Report (the     
"Committee Report") accompanying the Tax Reform Act of 1986 will apply. Under   
those rules, in each accrual period market discount on the Mortgage Loans should
accrue, at the Certificateholder's option: (i) on the basis of a constant yield 
method, (ii) in the case of a Mortgage Loan issued without original issue       
discount, in an amount that bears the same ratio to the total remaining market  
discount as the stated interest paid in the accrual period bears to the total   
stated interest remaining to be paid on the Mortgage Loan as of the beginning of
the accrual period, or (iii) in the case of a Mortgage Loan issued with original
issue discount, in an amount that bears the same ratio to the total remaining   
market discount as the original issue discount accrued in the accrual period    
bears to the total original issue discount remaining at the beginning of the    
accrual period. The prepayment assumption, if any, used in calculating the      
accrual of original issue discount is to be used in calculating the accrual of  
market discount. The effect of using a prepayment assumption could be to        
accelerate the reporting of such discount income. Because the regulations       
referred to in this paragraph have not been issued, it is not possible to       
predict what effect such regulations might have on the tax treatment of a       
Mortgage Loan purchased at a discount in the secondary market.                  

Since the Mortgage Loans will provide for periodic payments of stated 
redemption price, such discount may be required to be included in income at a   
rate that is not significantly slower than the rate at which such discount would
be included in income if it were original issue discount.                       

     Market discount with respect to Mortgage Loans generally will be considered
to be de minimis if it is not greater than or equal to 0.25% of the stated      
redemption price of the Mortgage Loans multiplied by the number of complete     
years to maturity remaining after the date of its purchase. In interpreting a   
similar rule with respect to original issue discount on obligations payable in  
installments, the OID Regulations refer to the weighted average maturity of     
obligations, and it is likely that the same rule will be applied with respect to
market discount, presumably taking into account the prepayment assumption used, 
if any. The effect of using a prepayment assumption could be to accelerate the  
reporting of such discount income. If market discount is treated as de minimis  
under the foregoing rule, it appears that actual discount would be treated in a 
manner similar to original issue discount of a de minimis amount. See           
"-- REMICS -- Taxation of Owners of REMIC Regular Certificates -- Original Issue
Discount."                                                                      

   Further, under the rules described in "-- REMICs -- Taxation of Owners of
REMIC Regular Certificates -- Market Discount," below, any discount that is not 
original issue discount and exceeds a de minimis amount may require the deferral
of interest expense deductions attributable to accrued market discount not yet  
includible in income, unless an election has been made to report market discount
currently as it accrues.                                                        

Premium                                                               

If a Certificateholder is treated as acquiring the underlying Mortgage
Loans at a premium, that is, at a price in excess of their remaining stated     
redemption price, such Certificateholder may elect under Section 171 of the Code
to amortize such premium using a constant yield method. Amortizable premium is  
treated as an offset to interest income on the related Mortgage Loans rather    
than as a separate interest deduction. Premium allocable to Mortgage Loans for  
which an amortization election is not made should be allocated among the        
payments on the Mortgage Loan representing stated redemption price and be       
allowed as an ordinary deduction as such -- payments are made (or, for a        
Certificateholder using the accrual method of accounting, when such payments are
due).                                                                           

   It is unclear whether a prepayment assumption should be used in computing
amortization of premium allowable under Section 171 of the Code. If premium is  
not subject to amortization using a prepayment assumption and a Mortgage Loan   
prepays in full, the holder of a Grantor Trust Fractional Interest Certificate  
acquired at a premium should recognize a loss, equal to the difference between  
the portion of the prepaid                                                      

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principal amount of the Mortgage Loan that is allocable to the Certificate and  
the portion of the adjusted basis of the Certificate that is allocable to the   
Mortgage Loan. If a prepayment assumption is used to amortize such premium, it  
appears that such a loss would be unavailable. Instead, if a prepayment         
assumption is used, a prepayment should be treated as a partial payment of the  
stated redemption price of the Grantor Trust Fractional Interest Certificate and
accounted for under a method similar to that described for taking account of    
original issue discount on REMIC Regular Certificates. See                      
"-- REMICs -- Taxation of Owners of REMIC Regular Certificates--Original Issue  
Discount." It is unclear what adjustments would be required to reflect          
differences between an assumed prepayment rate and the actual rate of           
prepayments.                                                                    

Taxation of Owners of Grantor Trust Strip Certificates                

   The "stripped coupon" rules of Section 1286 of the Code will apply to the
Grantor Trust Strip Certificates. Except as described above in "-- Taxation of  
Owners of Grantor Trust Fractional Interest Certificates -- If Stripped Bond    
Rules Apply," no regulations or published rulings under Section 1286 of the Code
have been issued and some uncertainty exists as to how it will be applied to    
securities such as the Grantor Trust Strip Certificates. Accordingly, holders of
Grantor Trust Strip Certificates should consult their own tax advisors          
concerning the method to be used in reporting income or loss with respect to    
such Certificates.                                                              

The OID Regulations do not apply to "stripped coupons," although they 
provide general guidance as to how the original issue discount sections of the  
Code will be applied. In addition, the discussion below is subject to the       
discussion under "Possible Application of Proposed Contingent Payment Rules" and
assumes that the holder of a Grantor Trust Strip Certificate will not own any   
Grantor Trust Fractional Interest Certificates.                                 

  Under the stripped coupon rules, it appears that original issue discount
will be required to be accrued in each month on the Grantor Trust Strip         
Certificates based on a constant yield method. In effect, each holder of Grantor
Trust Strip Certificates would include as interest income in each month an      
amount equal to the product of such holder's adjusted basis in such Grantor     
Trust Strip Certificate at the beginning of such month and the yield of such    
Grantor Trust Strip Certificate to such holder. Such yield would be calculated  
based on the price paid for that Grantor Trust Strip Certificate by its holder  
and the payments remaining to be made thereon at the time of the purchase, plus 
an allocable portion of the servicing fees and expenses to be paid with respect 
to the Mortgage Loans. See "-- Taxation of Owners of Grantor Trust Fractional   
Interest Certificates -- If Stripped Bond Rules Apply" above.                   

 Section 1272(a)(6) of the Code requires that a prepayment assumption be
used in computing the accrual of original issue discount with respect to the    
Grantor Trust Strip Certificates, and that adjustments be made in the amount and
rate of accrual of such discount when prepayments do not conform to such        
prepayment assumption. It is uncertain whether the assumed prepayment rate      
should be determined based on conditions at the time of the first sale of the   
Grantor Trust Strip Certificate or, with respect to any subsequent holder, at   
the time of purchase of the Grantor Trust Strip Certificate by that holder.     

The accrual of income on the Grantor Trust Strip Certificates will be 
significantly slower using a prepayment assumption than if yield were computed  
assuming no prepayments. In the absence of statutory or administrative          
clarification, it currently is intended to base information returns or reports  
to the IRS and Certificateholders on the Prepayment Assumption disclosed in the 
related Prospectus Supplement and on a constant yield computed using a          
representative initial offering price for each Class of Certificates. However,  
neither the Depositor nor the Master Servicer will make any representation that 
the Mortgage Loans will in fact prepay at a rate conforming to the Prepayment   
Assumption or at any other rate and Certificateholders should bear in mind that 
the use of a representative initial offering price will mean that such          
information returns or reports, even if otherwise accepted as accurate by the   
IRS, will in any event be accurate only as to the initial Certificateholders of 
each Series who bought at that price. Prospective purchasers of the Grantor     
Trust Strip Certificates should consult their own tax advisors regarding the use
of the Prepayment Assumption.                                                   

It is unclear under what circumstances, if any, the prepayment of a   
Mortgage Loan will give rise to a loss to the holder of a Grantor Trust Strip   
Certificate. If a Grantor Trust Strip Certificate is treated as a single        

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instrument (rather than an interest in discrete mortgage loans) and the effect  
of prepayments is taken into account in computing yield with respect to such    
Grantor Trust Strip Certificate, it appears that no loss may be available as a  
result of any particular prepayment unless prepayments occur at a rate          
sufficiently faster than the Prepayment Assumption to assure that the holder of 
such Certificate will not recover its initial purchase price together with      
previously accrued original issue discount. However, if a Grantor Trust Strip   
Certificate is treated as an interest in discrete Mortgage Loans then when a    
Mortgage Loan is prepaid, the holder of a Grantor Trust Strip Certificate should
be able to recognize a loss equal to the portion of the adjusted issue price of 
the Grantor Trust Strip Certificate that is allocable to such Mortgage Loan.    

Possible Application of Contingent Payment Rules                      

 The coupon stripping rules' general treatment of stripped coupons is to
regard them as newly issued debt instruments in the hands of each purchaser. To 
the extent that payments on the Grantor Trust Strip Certificates would cease if 
the Mortgage Loans were prepaid in full, the Grantor Trust Strip Certificates   
could be considered to be debt instruments providing for contingent payments.   
Under the OID Regulations, debt instruments providing for contingent payments   
are not subject to the same rules as debt instruments providing for             
noncontingent payments. As in the case of the OID Regulations generally, the    
regulations addressing contingent payment debt instruments do not specifically  
address securities, such as the Grantor Trust Strip Certificates, that are      
subject to the stripped bond rules of Section 1286 of the Code.                 

  If the contingent payment rules under the OID Regulations were to apply,
the holder of a Grantor Trust Strip Certificate would be required to apply a    
"noncontingent bond method." Under that method, the issuer of a Grantor Trust   
Strip Certificate would determine a projected payment schedule with respect to  
such Grantor Trust Strip Certificate. Holders of Grantor Trust Strip            
Certificates would be bound by the issuer's projected payment schedule, which   
would consist of all noncontingent payments and a projected amount for each     
contingent payment based on the projected yield (as described below) of the     
Grantor Trust Strip Certificate. The projected amount of each payment would be  
determined so that the projected payment schedule reflected the projected yield 
reasonably expected to be received by the holder of a Grantor Trust Strip       
Certificate. The projected yield referred to above would be a reasonable rate,  
not less than the "applicable Federal rate" that, as of the issue date,         
reflected general market conditions, the credit quality of the issuer, and the  
terms and conditions of the Mortgage Loans. The holder of a Grantor Trust Strip 
Certificate would be required to include as interest income in each month the   
adjusted issue price of the Grantor Trust Strip Certificate at the beginning of 
the period multiplied by the projected yield, and would add to, or subtract     
from, such income any variation between the payment actually received in such   
month and the payment originally projected to be made in such month.            

Certificateholders should consult their tax advisors concerning the   
possible application of the contingent payment rules to the Grantor Trust Strip 
Certificates.                                                                   

Sales of Grantor Trust Certificates                                   

 Except as described below, any gain or loss recognized on the sale of a
Grantor Trust Certificate generally will be capital gain or loss, and will be   
equal to the difference between the amount realized on the sale of a Grantor    
Trust Certificate and its adjusted basis. The adjusted basis of a Grantor Trust 
Certificate generally will equal its cost, increased by any income (including   
original issue discount and market discount income) recognized by the seller and
reduced (but not below zero) by any previously reported losses, amortized       
premium and distributions with respect to such Grantor Trust Certificate.       

    Gain or loss from the sale of a Grantor Trust Certificate may be partially
or wholly ordinary and not capital in certain circumstances. Gain attributable  
to accrued and unrecognized market discount will be treated as ordinary income, 
as will gain or loss recognized by banks and other financial institutions       
subject to Section 582(c) of the Code. Furthermore, a portion of any gain that  
might otherwise be capital gain may be treated as ordinary income to the extent 
that the Grantor Trust Certificate is held as part of a "conversion transaction"
within the meaning of Section 1258 of the Code. A conversion transaction        
generally is one in which the taxpayer has taken two or more positions in       
Certificates or similar property that reduce or eliminate                       

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market risk, if substantially all of the taxpayer's return is attributable to   
the time value of the taxpayer's net investment in such transaction. The amount 
of gain realized in a conversion transaction that is recharacterized as ordinary
income generally will not exceed the amount of interest that would have accrued 
on the taxpayer's net investment at 120% of the appropriate "applicable Federal 
rate" (which rate is computed and published monthly by the IRS) at the time the 
taxpayer enters into the conversion transaction, subject to appropriate         
reduction for prior inclusion of interest and other ordinary income items from  
the transaction. Finally, a taxpayer may elect to have net capital gain taxed at
ordinary income rates rather than capital gains rates in order to include such  
net capital gain in total net investment income for that taxable year, for      
purposes of the limitation on the deduction of interest on indebtedness incurred
to purchase or carry property held for investment to a taxpayer's net investment
income.                                                                         

Grantor Trust Reporting                                               

     The Trustee will furnish to each holder of a Grantor Trust Certificate with
each distribution a statement setting forth the amount of such distribution     
allocable to principal on the underlying Mortgage Loans and to interest thereon 
at the related Pass-Through Rate. In addition, within a reasonable time after   
the end of each calendar year, based on information provided by the Master      
Servicer, the Trustee will furnish to each Certificateholder during such year   
such customary factual information as the Trustee deems necessary or desirable  
to enable holders of Grantor Trust Certificates to prepare their tax returns and
will furnish comparable information to the IRS as and when required by law to do
so. Because the rules for accruing discount and amortizing premium with respect 
to the Grantor Trust Certificates are uncertain in various respects, there is no
assurance the IRS will agree with the Trustee's information reports of such     
items of income and expense. Moreover, such information reports, even if        
otherwise accepted as accurate by the IRS, will in any event be accurate only as
to the initial Certificateholders who bought their Certificates at the          
representative initial offering price used in preparing such reports.           

Backup Withholding                                                    

  In general, the rules described in "-- REMICs -- Backup Withholding with
Respect to REMIC Certificates" will also apply to Grantor Trust Certificates.   

Foreign Investors                                                     

  In general, the discussion with respect to REMIC Regular Certificates in
"-- REMICs -- Foreign Investors in REMIC Certificates -- REMIC Regular          
Certificates" applies to Grantor Trust Certificates.                            

    To the extent that interest on a Grantor Trust Certificate would be exempt
under Sections 871(h)(1) and 881(c) of the Code from United States withholding  
tax, and the Grantor Trust Certificate is not held in connection with a         
Certificateholder's trade or business in the United States, such Grantor Trust  
Certificate will not be subject to United States estate taxes in the estate of a
non-resident alien individual.                                                  

REMICS                                                                          

Classification of REMICs                                              

 With respect to each Series of REMIC Certificates, Orrick, Herrington &
Sutcliffe, counsel to the Depositor ("Special Tax Counsel"), is of the opinion  
that, assuming compliance with all provisions of the related Pooling Agreement, 
the related Trust Fund (or each applicable portion thereof) will qualify as a   
REMIC and the REMIC Certificates offered with respect thereto will be considered
to evidence ownership of "regular interests" ("REMIC Regular Certificates") or  
"residual interests" ("REMIC Residual Certificates") in that REMIC within the   
meaning of the REMIC Provisions. The following general discussion of the        
anticipated federal income tax consequences of the purchase, ownership and      
disposition of the REMIC Certificates together with the discussion, if any,     
under the heading "FEDERAL INCOME TAX CONSEQUENCES" in the Prospectus Supplement
represents the opinion of Special Tax Counsel, subject to any qualifications set
forth herein and therein. Special Tax Counsel have prepared or reviewed the     
statements in this prospectus under the heading "FEDERAL INCOME TAX             
CONSEQUENCES" and in the Prospectus                                             

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Supplement under the heading "FEDERAL INCOME TAX CONSEQUENCES," if any, and are 
of the opinion that such statements are correct in all material respects. A copy
of the opinion of Special Tax Counsel relating to such statements will be       
included in a Current Report on Form 8-K filed prior to the Delivery Date with  
respect to any Series of REMIC Certificates. Such statements are intended as an 
explanatory discussion of the possible effects of the classification of the     
Trust Fund as a REMIC for federal income tax purposes on investors generally and
of related tax matters affecting investors generally, but do not purport to     
furnish information in the level of detail or with attention to an investor's   
specific tax circumstances that would be provided by an investor's own tax      
advisor. Accordingly, each investor is advised to consult its own tax advisors  
with regard to the tax consequences to it of investing in the REMIC             
Certificates.                                                                   

    If an entity electing to be treated as a REMIC fails to comply with one or
more of the ongoing requirements of the Code for such status during any taxable 
year, the Code provides that the entity will not be treated as a REMIC for such 
year and thereafter. In that event, such entity may be taxable as a separate    
corporation under Treasury regulations, and the related REMIC Certificates may  
not be accorded the status or given the tax treatment described below. Although 
the Code authorizes the Treasury Department to issue regulations providing      
relief in the event of an inadvertent termination of REMIC status, no such      
regulations have been issued. Any such relief, moreover, may be accompanied by  
sanctions, such as the imposition of a corporate tax on all or a portion of the 
Trust Fund's income for the period in which the requirements for such status are
not satisfied. The Pooling Agreement with respect to each REMIC will include    
provisions designed to maintain the Trust Fund's status as a REMIC under the    
REMIC Provisions. It is not anticipated that the status of any Trust Fund as a  
REMIC will be terminated.                                                       

Characterization of Investments in REMIC Certificates                 

    In general, the REMIC Certificates will be "real estate assets" within the
meaning of Section 856(c)(5)(A) of the Code and assets described in Section     
7701(a)(19)(C) of the Code in the same proportion that the assets of the REMIC  
underlying such Certificates would be so treated. Moreover, if 95% or more of   
the assets of the REMIC qualify for any of the foregoing treatments at all times
during a calendar year, the REMIC Certificates will qualify for the             
corresponding status in their entirety for that calendar year. Interest         
(including original issue discount) on the REMIC Regular Certificates and income
allocated to the Class of REMIC Residual Certificates will be interest described
in Section 856(c)(3)(B) of the Code to the extent that such Certificates are    
treated as "real estate assets" within the meaning of Section 856(c)(4)(A) of   
the Code. In addition, the REMIC Regular Certificates will be "qualified        
mortgages" within the meaning of Section 860G(a)(3)(C) of the Code if           
transferred to another REMIC on its startup day in exchange for regular or      
residual interests therein. The determination as to the percentage of the       
REMIC's assets that constitute assets described in the foregoing sections of the
Code will be made with respect to each calendar quarter based on the average    
adjusted basis of each category of the assets held by the REMIC during such     
calendar quarter. The Master Servicer will report those determinations to       
Certificateholders in the manner and at the times required by applicable        
Treasury regulations.                                                           

The assets of the REMIC will include, in addition to Mortgage Loans,  
payments on Mortgage Loans held pending distribution on the REMIC Certificates  
and property acquired by foreclosure held pending sale, and may include amounts 
in reserve accounts. It is unclear whether property acquired by foreclosure held
pending sale and amounts in reserve accounts would be considered to be part of  
the Mortgage Loans, or whether such assets (to the extent not invested in assets
described in the foregoing sections) otherwise would receive the same treatment 
as the Mortgage Loans for purposes of all of the foregoing sections. In         
addition, in some instances Mortgage Loans may not be treated entirely as assets
described in the foregoing sections. If so, the related Prospectus Supplement   
will describe the Mortgage Loans that may not be so treated. The REMIC          
Regulations do provide, however, that payments on Mortgage Loans held pending   
distribution are considered part of the Mortgage Loans for purposes of Section  
856(c)(4)(A) of the Code.                                                       

Tiered REMIC Structures                                               

  For certain Series of REMIC Certificates, two or more separate elections
may be made to treat designated portions of the related Trust Fund as REMICs    
("Tiered REMICs") for federal income tax                                        

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purposes. Upon the issuance of any such Series of REMIC Certificates, Orrick,   
Herrington & Sutcliffe LLP, counsel to the Depositor, will deliver their opinion
generally to the effect that, assuming compliance with all provisions of the    
related Pooling Agreement, the Tiered REMICs will each qualify as a REMIC and   
the REMIC Certificates issued by the Tiered REMICs, respectively, will be       
considered to evidence ownership of REMIC Regular Certificates or REMIC Residual
Certificates in the related REMIC within the meaning of the REMIC Provisions.   

   Solely for purposes of determining whether the REMIC Certificates will be
"real estate assets" within the meaning of Section 856(c)(4)(A) of the Code and 
"loans secured by an interest in real property" under Section 7701(a)(19)(C) of 
the Code, and whether the income on such Certificates is interest described in  
Section 856(c)(3)(B) of the Code, the Tiered REMICs will be treated as one      
REMIC.                                                                          

TAXATION OF OWNERS OF REMIC REGULAR CERTIFICATES                                

General                                                               

   Except as otherwise stated in this discussion, REMIC Regular Certificates
will be treated for federal income tax purposes as debt instruments issued by   
the REMIC and not as ownership interests in the REMIC or its assets. Moreover,  
holders of REMIC Regular Certificates that otherwise report income under a cash 
method of accounting will be required to report income with respect to REMIC    
Regular Certificates under an accrual method.                                   

Original Issue Discount                                               

Certain REMIC Regular Certificates may be issued with "original issue 
discount" within the meaning of Section 1273(a) of the Code. Any holders of     
REMIC Regular Certificates issued with original issue discount generally will be
required to include original issue discount in income as it accrues, in         
accordance with the method described below, in advance of the receipt of the    
cash attributable to such income. In addition, Section 1272(a)(6) of the Code   
provides special rules applicable to REMIC Regular Certificates and certain     
other debt instruments issued with original issue discount. Regulations have not
been issued under that section.                                                 

The Code requires that a prepayment assumption be used with respect to
Mortgage Loans held by a REMIC in computing the accrual of original issue       
discount on REMIC Regular Certificates issued by that REMIC, and that           
adjustments be made in the amount and rate of accrual of such discount to       
reflect differences between the actual prepayment rate and the prepayment       
assumption. The prepayment assumption is to be determined in a manner prescribed
in Treasury regulations; as noted above, those regulations have not been issued.
The Committee Report indicates that the regulations will provide that the       
prepayment assumption used with respect to a REMIC Regular Certificate must be  
the same as that used in pricing the initial offering of such REMIC Regular     
Certificate. The prepayment assumption used by the Master Servicer in reporting 
original issue discount for each Series of REMIC Regular Certificates (the      
"Prepayment Assumption") will be consistent with this standard and will be      
disclosed in the related Prospectus Supplement. However, neither the Depositor  
nor the Master Servicer will make any representation that the Mortgage Loans    
will in fact prepay at a rate conforming to the Prepayment Assumption or at any 
other rate.                                                                     

     The original issue discount, if any, on a REMIC Regular Certificate will be
the excess of its stated redemption price at maturity over its issue price. The 
issue price of a particular Class of REMIC Regular Certificates will be the     
first cash price at which a substantial amount of REMIC Regular Certificates of 
that Class is sold (excluding sales to bond houses, brokers and underwriters).  
If less than a substantial amount of a particular Class of REMIC Regular        
Certificates is sold for cash on or prior to the date of their initial issuance 
(the "Closing Date"), the issue price for such Class will be treated as the fair
market value of such Class on the Closing Date. Under the OID Regulations, the  
stated redemption price of a REMIC Regular Certificate is equal to the total of 
all payments to be made on such Certificate other than "qualified stated        
interest." "Qualified stated interest" includes interest that is unconditionally
payable at least annually at a single fixed rate, or in the case of a variable  
rate debt instrument, at a "qualified floating rate," an "objective rate," a    
combination of a single fixed rate and one or more "qualified floating rates" or
one "qualified inverse floating                                                 

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rate," or a combination of "qualified floating rates" that generally does not   
operate in a manner that accelerates or defers interest payments on such REMIC  
Regular Certificate.                                                            

In the case of REMIC Regular Certificates bearing adjustable interest 
rates, the determination of the total amount of original issue discount and the 
timing of the inclusion thereof will vary according to the characteristics of   
such REMIC Regular Certificates. If the original issue discount rules apply to  
such Certificates, the related Prospectus Supplement will describe the manner in
which such rules will be applied by the Master Servicer with respect to those   
Certificates in preparing information returns to the Certificateholders and the 
IRS.                                                                            

     Certain Classes of the REMIC Regular Certificates may provide for the first
interest payment with respect to such Certificates to be made more than one     
month after the date of issuance, a period which is longer than the subsequent  
monthly intervals between interest payments. Assuming the "accrual period" (as  
defined below) for original issue discount is each monthly period that ends on a
Distribution Date, in some cases, as a consequence of this "long first accrual  
period," some or all interest payments may be required to be included in the    
stated redemption price of the REMIC Regular Certificate and accounted for as   
original issue discount. Because interest on REMIC Regular Certificates must in 
any event be accounted for under an accrual method, applying this analysis would
result in only a slight difference in the timing of the inclusion in income of  
the yield on the REMIC Regular Certificates.                                    

   In addition, if the accrued interest to be paid on the first Distribution
Date is computed with respect to a period that begins prior to the Closing Date,
a portion of the purchase price paid for a REMIC Regular Certificate will       
reflect such accrued interest. In such cases, information returns to the        
Certificateholders and the IRS will be based on the position that the portion of
the purchase price paid for the interest accrued with respect to periods prior  
to the Closing Date is treated as part of the overall cost of such REMIC Regular
Certificate (and not as a separate asset the cost of which is recovered entirely
out of interest received on the next Distribution Date) and that portion of the 
interest paid on the first Distribution Date in excess of interest accrued for a
number of days corresponding to the number of days from the Closing Date to the 
first Distribution Date should be included in the stated redemption price of    
such REMIC Regular Certificate. However, the OID Regulations state that all or  
some portion of such accrued interest may be treated as a separate asset the    
cost of which is recovered entirely out of interest paid on the first           
Distribution Date. It is unclear how an election to do so would be made under   
the OID Regulations and whether such an election could be made unilaterally by a
Certificateholder.                                                              

     Notwithstanding the general definition of original issue discount, original
issue discount on a REMIC Regular Certificate will be considered to be de       
minimis if it is less than 0.25% of the stated redemption price of the REMIC    
Regular Certificate multiplied by its weighted average maturity. For this       
purpose, the weighted average maturity of the REMIC Regular Certificate is      
computed as the sum of the amounts determined, as to each payment included in   
the stated redemption price of such REMIC Regular Certificate, by multiplying   
(i) the number of complete years (rounding down for partial years) from the     
issue date until such payment is expected to be made (presumably taking into    
account the Prepayment Assumption) by (ii) a fraction, the numerator of which is
the amount of the payment, and the denominator of which is the stated redemption
price at maturity of such REMIC Regular Certificate. Under the OID Regulations, 
original issue discount of only a de minimis amount (other than de minimis      
original issue discount attributable to a so-called "teaser" interest rate or an
initial interest holiday) will be included in income as each payment of stated  
principal is made, based on the product of the total amount of such de minimis  
original issue discount and a fraction, the numerator of which is the amount of 
such principal payment and the denominator of which is the outstanding stated   
principal amount of the REMIC Regular Certificate. The OID Regulations also     
would permit a Certificateholder to elect to accrue de minimis original issue   
discount into income currently based on a constant yield method. See "Taxation  
of Owners of REMIC Regular Certificates -- Market Discount" for a description of
such election under the OID Regulations.                                        

     If original issue discount on a REMIC Regular Certificate is in excess of a
de minimis amount, the holder of such Certificate must include in ordinary gross
income the sum of the "daily portions" of original issue discount for each day  
during its taxable year on which it held such REMIC Regular Certificate,        

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including the purchase date but excluding the disposition date. In the case of  
an original holder of a REMIC Regular Certificate, the daily portions of        
original issue discount will be determined as follows.                          

   As to each "accrual period," which in general is the period corresponding
to the period between Distribution Dates or other interest compounding period, a
calculation will be made of the portion of the original issue discount that     
accrued during such accrual period. The portion of original issue discount that 
accrues in any accrual period will equal the excess, if any, of (i) the sum of  
(A) the present value, as of the end of the accrual period, of all of the       
distributions remaining to be made on the REMIC Regular Certificate, if any, in 
future periods and (B) the distributions made on such REMIC Regular Certificate 
during the accrual period of amounts included in the stated redemption price,   
over (ii) the adjusted issue price of such REMIC Regular Certificate at the     
beginning of the accrual period. The present value of the remaining             
distributions referred to in the preceding sentence will be calculated (i)      
assuming that distributions on the REMIC Regular Certificate will be received in
future periods based on the Mortgage Loans being prepaid at a rate equal to the 
Prepayment Assumption and (ii) using a discount rate equal to the original yield
to maturity of the Certificate. For these purposes, the original yield to       
maturity of the Certificate will be calculated based on its issue price and     
assuming that distributions on the Certificate will be made in all accrual      
periods based on the Mortgage Loans being prepaid at a rate equal to the        
Prepayment Assumption. The adjusted issue price of a REMIC Regular Certificate  
at the beginning of any accrual period will equal the issue price of such       
Certificate, increased by the aggregate amount of original issue discount that  
accrued with respect to such Certificate in prior accrual periods, and reduced  
by the amount of any distributions made on such REMIC Regular Certificate in    
prior accrual periods of amounts included in its stated redemption price. The   
original issue discount accruing during any accrual period, computed as         
described above, will be allocated ratably to each day during the accrual period
to determine the daily portion of original issue discount for such day.         

   A subsequent purchaser of a REMIC Regular Certificate that purchases such
Certificate at a price (excluding any portion of such price attributable to     
accrued qualified stated interest) less than its remaining stated redemption    
price will also be required to include in gross income the daily portions of any
original issue discount with respect to such Certificate. However, each such    
daily portion will be reduced, if such cost is in excess of its "adjusted issue 
price," in proportion to the ratio such excess bears to the aggregate original  
issue discount remaining to be accrued on such REMIC Regular Certificate. The   
adjusted issue price of a REMIC Regular Certificate on any given day equals the 
sum of (i) the adjusted issue price (or, in the case of the first accrual       
period, the issue price) of such Certificate at the beginning of the accrual    
period which includes such day and (ii) the daily portions of original issue    
discount for all days during such accrual period prior to such day.             

Market Discount                                                       

    A Certificateholder that purchases a REMIC Regular Certificate at a market
discount, that is, in the case of a REMIC Regular Certificate issued without    
original issue discount, at a purchase price less than its remaining stated     
principal amount, or in the case of a REMIC Regular Certificate issued with     
original issue                                                                  
discount, at a purchase price less than its adjusted issue price will recognize 
income upon receipt of each distribution representing stated redemption price.  
In particular, under Section 1276 of the Code such a Certificateholder generally
will be required to allocate the portion of each such distribution representing 
stated redemption price first to accrued market discount not previously included
in income, and to recognize ordinary income to that extent. A Certificateholder 
may elect to include market discount in income currently as it accrues rather   
than including it on a deferred basis in accordance with the foregoing. If made,
such election will apply to all market discount bonds acquired by such          
Certificateholder on or after the first day of the first taxable year to which  
such election applies. In addition, the OID Regulations permit a                
Certificateholder to elect to accrue all interest, discount (including de       
minimis market or original issue discount) and premium in income as interest,   
based on a constant yield method. If such an election were made with respect to 
a REMIC Regular Certificate with market discount, the Certificateholder would be
deemed to have made an election to include market discount in income currently  
with respect to all other debt instruments having market discount that such     
Certificateholder acquires during the taxable year of the election or           
thereafter, and possibly previously acquired instruments. Similarly, a          
Certificateholder that made this election for a Certificate that is             

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acquired at a premium would be deemed to have made an election to amortize bond 
premium with respect to all debt instruments having amortizable bond premium    
that such Certificateholder owns or acquires. See "Taxation of Owners of REMIC  
Regular Certificates -- Premium." Each of these elections to accrue interest,   
discount and premium with respect to a Certificate on a constant yield method or
as interest would be irrevocable.                                               

   However, market discount with respect to a REMIC Regular Certificate will
be considered to be de minimis for purposes of Section 1276 of the Code if such 
market discount is less than 0.25% of the remaining stated redemption price of  
such REMIC Regular Certificate multiplied by the number of complete years to    
maturity remaining after the date of its purchase. In interpreting a similar    
rule with respect to original issue discount on obligations payable in          
installments, the OID Regulations refer to the weighted average maturity of     
obligations, and it is likely that the same rule will be applied with respect to
market discount, presumably taking into account the Prepayment Assumption. If   
market discount is treated as de minimis under this rule, it appears that the   
actual discount would be treated in a manner similar to original issue discount 
of a de minimis amount. See "Taxation of Owners of REMIC Regular                
Certificates -- Original Issue Discount." Such treatment would result in        
discount being included in income at a slower rate than discount would be       
required to be included in income using the method described above.             

Section 1276(b)(3) of the Code specifically authorizes the Treasury   
Department to issue regulations providing for the method for accruing market    
discount on debt instruments, the principal of which is payable in more than one
installment. Until regulations are issued by the Treasury Department, certain   
rules described in the Committee Report apply. The Committee Report indicates   
that in each accrual period market discount on REMIC Regular Certificates should
accrue, at the Certificateholder's option: (i) on the basis of a constant yield 
method, (ii) in the case of a REMIC Regular Certificate issued without original 
issue discount, in an amount that bears the same ratio to the total remaining   
market discount as the stated interest paid in the accrual period bears to the  
total amount of stated interest remaining to be paid on the REMIC Regular       
Certificate as of the beginning of the accrual period, or (iii) in the case of a
REMIC Regular Certificate issued with original issue discount, in an amount that
bears the same ratio to the total remaining market discount as the original     
issue discount accrued in the accrual period bears to the total original issue  
discount remaining on the REMIC Regular Certificate at the beginning of the     
accrual period. Moreover, the Prepayment Assumption used in evaluating the      
accrual of original issue discount is to be used in calculating the accrual of  
market discount. Because the regulations referred to in this paragraph have not 
been issued, it is not possible to predict what effect such regulations might   
have on the tax treatment of a REMIC Regular Certificate purchased at a discount
in the secondary market.                                                        

    To the extent that REMIC Regular Certificates provide for monthly or other
periodic distributions throughout their term, the effect of these rules may be  
to require market discount to be includible in income at a rate that is not     
significantly slower than the rate at which such discount would accrue if it    
were original issue discount. Moreover, in any event a holder of a REMIC Regular
Certificate generally will be required to treat a portion of any gain on the    
sale or exchange of such Certificate as ordinary income to the extent of the    
market discount accrued to the date of disposition under one of the foregoing   
methods, less any accrued market discount previously reported as ordinary       
income.                                                                         

Further, under Section 1277 of the Code a holder of a REMIC Regular   
Certificate may be required to defer a portion of its interest deductions for   
the taxable year attributable to any indebtedness incurred or continued to      
purchase or carry a REMIC Regular Certificate purchased with market discount.   
For these purposes, the de minimis rule referred to above applies. Any such     
deferred interest expense would not exceed the market discount that accrues     
during such taxable year and is, in general, allowed as a deduction not later   
than the year in which such market discount is includible in income. If such    
holder elects to include market discount in income currently as it accrues on   
all market discount instruments acquired by such holder in that taxable year or 
thereafter, the interest deferral rule described above will not apply.          

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Premium                                                               

   A REMIC Regular Certificate purchased at a cost (excluding any portion of
such cost attributable to accrued qualified stated interest) greater than its   
remaining stated redemption price will be considered to be purchased at a       
premium. The holder of such a REMIC Regular Certificate may elect under Section 
171 of the Code to amortize such premium under the constant yield method over   
the life of the Certificate. If made, such an election will apply to all debt   
instruments having amortizable bond premium that the holder owns or subsequently
acquires. Amortizable premium will be treated as an offset to interest income on
the related REMIC Regular Certificate, rather than as a separate interest       
deduction. The OID Regulations also permit Certificateholders to elect to       
include all interest, discount and premium in income based on a constant yield  
method, further treating the Certificateholder as having made the election to   
amortize premium generally. See "Taxation of Owners of REMIC Regular            
Certificates -- Market Discount." The Committee Report states that the same     
rules that apply to accrual of market discount (which rules will require use of 
a Prepayment Assumption in accruing market discount with respect to REMIC       
Regular Certificates without regard to whether such Certificates have original  
issue discount) will also apply in amortizing bond premium under Section 171 of 
the Code.                                                                       

Realized Losses                                                       

    Under Section 166 of the Code, both corporate holders of the REMIC Regular
Certificates and noncorporate holders of the REMIC Regular Certificates that    
acquire such Certificates in connection with a trade or business should be      
allowed to deduct, as ordinary losses, any losses sustained during a taxable    
year in which their Certificates become wholly or partially worthless as the    
result of one or more realized losses on the Mortgage Loans. However, it appears
that a noncorporate holder that does not acquire a REMIC Regular Certificate in 
connection with a trade or business will not be entitled to deduct a loss under 
Section 166 of the Code until such holder's Certificate becomes wholly worthless
(i.e., until its outstanding principal balance has been reduced to zero) and    
that the loss will be characterized as a short-term capital loss.               

Each holder of a REMIC Regular Certificate will be required to accrue 
interest and original issue discount with respect to such Certificate, without  
giving effect to any reductions in distributions attributable to defaults or    
delinquencies on the Mortgage Loans or the Underlying Certificates until it can 
be established that any such reduction ultimately will not be recoverable. As a 
result, the amount of taxable income reported in any period by the holder of a  
REMIC Regular Certificate could exceed the amount of economic income actually   
realized by the holder in such period. Although the holder of a REMIC Regular   
Certificate eventually will recognize a loss or reduction in income attributable
to previously accrued and included income that, as the result of a realized     
loss, ultimately will not be realized, the law is unclear with respect to the   
timing and character of such loss or reduction in income.                       

TAXATION OF OWNERS OF REMIC RESIDUAL CERTIFICATES                               

General                                                               

   As residual interests, the REMIC Residual Certificates will be subject to
tax rules that differ significantly from those that would apply if the REMIC    
Residual Certificates were treated for federal income tax purposes as direct    
ownership interests in the Mortgage Loans or as debt instruments issued by the  
REMIC.                                                                          

A holder of a REMIC Residual Certificate generally will be required to
report its daily portion of the taxable income or, subject to the limitations   
noted in this discussion, the net loss of the REMIC for each day during a       
calendar quarter that such holder owned such REMIC Residual Certificate. For    
this purpose, the taxable income or net loss of the REMIC will be allocated to  
each day in the calendar quarter ratably using a "30 days per month/90 days per 
quarter/360 days per year" convention. The daily amounts will then be allocated 
among the REMIC Residual Certificateholders in proportion to their respective   
ownership interests on such day. Any amount included in the gross income or     
allowed as a loss of any REMIC Residual Certificateholder by virtue of this     
allocation will be treated as ordinary income or loss. The taxable income of the
REMIC will be determined under the rules described below in "Taxable Income of  
the REMIC" and will be taxable to the REMIC Residual Certificateholders without 
regard to the timing or amount of cash                                          

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distributions by the REMIC until the REMIC terminates. Ordinary income derived  
from REMIC Residual Certificates will be "portfolio income" for purposes of the 
taxation of taxpayers subject to limitations under Section 469 of the Code on   
the deductibility of "passive losses."                                          

  A holder of a REMIC Residual Certificate that purchased such Certificate
from a prior holder of such Certificate also will be required to report on its  
federal income tax return amounts representing its daily portion of the taxable 
income (or net loss) of the REMIC for each day that it holds such REMIC Residual
Certificate. These daily portions generally will equal the amounts of taxable   
income or net loss determined as described above. The Committee Report indicates
that certain modifications of the general rules may be made, by regulations,    
legislation or otherwise, to reduce (or increase) the income or loss of a holder
of a REMIC Residual Certificateholder that purchased such REMIC Residual        
Certificate from a prior holder of such Certificate at a price greater than (or 
less than) the adjusted basis (as defined below) such REMIC Residual Certificate
would have had in the hands of an original holder of such Certificate. The REMIC
Regulations, however, do not provide for any such modifications.                

Any payments received by a holder of a REMIC Residual Certificate in  
connection with the acquisition of such REMIC Residual Certificate will be taken
into account in determining the income of such holder for federal income tax    
purposes. Although it appears likely that any such payment would be includible  
in income immediately upon its receipt, the IRS might assert that such payment  
should be included in income over time according to an amortization schedule or 
according to some other method. Because of the uncertainty concerning the       
treatment of such payments, holders of REMIC Residual Certificates should       
consult their tax advisors concerning the treatment of such payments for income 
tax purposes.                                                                   

    The amount of income REMIC Residual Certificateholders will be required to
report (or the tax liability associated with such income) may exceed the amount 
of cash distributions received from the REMIC for the corresponding period.     
Consequently, REMIC Residual Certificateholders should have other sources of    
funds sufficient to pay any federal income taxes due as a result of their       
ownership of REMIC Residual Certificates or unrelated deductions against which  
income may be offset, subject to the rules relating to "excess inclusions,"     
residual interests without "significant value" and "noneconomic" residual       
interests discussed below. The fact that the tax liability associated with the  
income allocated to REMIC Residual Certificateholders may exceed the cash       
distributions received by such REMIC Residual Certificateholders for the        
corresponding period may significantly adversely affect such REMIC Residual     
Certificateholders' after-tax rate of return.                                   

Taxable Income of the REMIC                                           

 The taxable income of the REMIC will equal the income from the Mortgage
Loans and other assets of the REMIC plus any cancellation of indebtedness income
due to the allocation of realized losses to REMIC Regular Certificates, less the
deductions allowed to the REMIC for interest (including original issue discount 
and reduced by the amortization of any premium received on issuance) on the     
REMIC Regular Certificates (and any other Class of REMIC Certificates           
constituting "regular interests" in the REMIC not offered hereby), amortization 
of any premium on the Mortgage Loans, bad debt deductions with respect to the   
Mortgage Loans and, except as described below, for servicing, administrative and
other expenses.                                                                 

For purposes of determining its taxable income, the REMIC will have an
initial aggregate basis in its assets equal to their fair market value          
immediately after their transfer to the REMIC. For this purpose, the Master     
Servicer intends to treat the fair market value of the Mortgage Loans as being  
equal to the aggregate issue prices of the REMIC Regular Certificates and REMIC 
Residual Certificates. Such aggregate basis will be allocated among the Mortgage
Loans collectively and the other assets of the REMIC in proportion to their     
respective fair market values. The issue price of any REMIC Certificates offered
hereby will be determined in the manner described above under "-- Taxation of   
Owners of REMIC Regular Certificates -- Original Issue Discount." Accordingly,  
if one or more Classes of REMIC Certificates are retained initially rather than 
sold, the Master Servicer may be required to estimate the fair market value of  
such interests in order to determine the basis of the REMIC in the Mortgage     
Loans and other property held by the REMIC.                                     

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    Subject to the possible application of the de minimis rules, the method of
accrual by the REMIC of original issue discount income and market discount      
income with respect to Mortgage Loans that it holds will be equivalent to the   
method of accruing original issue discount income for REMIC Regular             
Certificateholders (that is, under the constant yield method taking into account
the Prepayment Assumption). However, a REMIC that acquires loans at a market    
discount must include such discount in income currently, as it accrues, on a    
constant interest basis. See "-- Taxation of Owners of REMIC Regular            
Certificates" above, which describes a method of accruing discount income that  
is analogous to that required to be used by a REMIC as to Mortgage Loans with   
market discount that it holds.                                                  

A Mortgage Loan will be deemed to have been acquired with discount (or
premium) to the extent that the REMIC's basis therein, determined as described  
in the preceding paragraph, is less than (or greater than) its stated redemption
price. Any such discount will be includible in the income of the REMIC as it    
accrues, in advance of receipt of the cash attributable to such income, under a 
method similar to the method described above for accruing original issue        
discount on the REMIC Regular Certificates. It is anticipated that each REMIC   
will elect under Section 171 of the Code to amortize any premium on the Mortgage
Loans. Premium on any Mortgage Loan to which such election applies may be       
amortized under a constant yield method, presumably taking into account a       
Prepayment Assumption.                                                          

     The REMIC will be allowed deductions for interest (including original issue
discount) on the REMIC Regular Certificates (including any other Class of REMIC 
Certificates constituting "regular interests" in the REMIC not offered hereby)  
equal to the deductions that would be allowed if the REMIC Regular Certificates 
(including any other Class of REMIC Certificates constituting "regular          
interests" in the REMIC not offered hereby) were indebtedness of the REMIC.     
Original issue discount will be considered to accrue for this purpose as        
described above under "-- Taxation of Owners of REMIC Regular                   
Certificates -- Original Issue Discount," except that the de minimis rule and   
the adjustments for subsequent holders of REMIC Regular Certificates (including 
any other Class of Certificates constituting "regular interests" in the REMIC   
not offered hereby) described therein will not apply.                           

    If a Class of REMIC Regular Certificates is issued at a price in excess of
the stated redemption price of such Class (such excess, "Issue Premium"), the   
net amount of interest deductions that are allowed the REMIC in each taxable    
year with respect to the REMIC Regular Certificates of such Class will be       
reduced by an amount equal to the portion of the Issue Premium that is          
considered to be amortized or repaid in that year. Although the matter is not   
entirely certain, it is likely that Issue Premium would be amortized under a    
constant yield method in a manner analogous to the method of accruing original  
issue discount described above under "-- Taxation of Owners of REMIC Regular    
Certificates -- Original Issue Discount."                                       

As a general rule, the taxable income of the REMIC is required to be  
determined in the same manner as if the REMIC were an individual having the     
calendar year as its taxable year and using the accrual method of accounting.   
However, no item of income, gain, loss or deduction allocable to a prohibited   
transaction will be taken into account. See "-- Prohibited Transactions and     
Other Possible REMIC Taxes" below. Further, the limitation on miscellaneous     
itemized deductions imposed on individuals by Section 67 of the Code (which     
allows such deductions only to the extent they exceed in the aggregate two      
percent of the taxpayer's adjusted gross income) will not be applied at the     
REMIC level so that the REMIC will be allowed deductions for servicing,         
administrative and other non-interest expenses in determining its taxable       
income. All such expenses will be allocated as a separate item to the holders of
REMIC Certificates, subject to the limitation of Section 67 of the Code. See    
"-- Possible Pass-Through of Miscellaneous Itemized Deductions." If the         
deductions allowed to the REMIC exceed its gross income for a calendar quarter, 
such excess will be the net loss for the REMIC for that calendar quarter.       

Basis Rules, Net Losses and Distributions                             

 The adjusted basis of a REMIC Residual Certificate will be equal to the
amount paid for such REMIC Residual Certificate, increased by amounts included  
in the income of the REMIC Residual Certificateholder and decreased (but not    
below zero) by distributions made, and by net losses allocated, to such REMIC   
Residual Certificateholder.                                                     

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    A REMIC Residual Certificateholder is not allowed to take into account any
net loss for any calendar quarter to the extent such net loss exceeds such REMIC
Residual Certificateholder's adjusted basis in its REMIC Residual Certificate as
of the close of such calendar quarter (determined without regard to such net    
loss). Any loss that is not currently deductible by reason of this limitation   
may be carried forward indefinitely to future calendar quarters and, subject to 
the same limitation, may be used only to offset income from the REMIC Residual  
Certificate. The ability of REMIC Residual Certificateholders to deduct net     
losses may be subject to additional limitations under the Code, as to which     
REMIC Residual Certificateholders should consult their tax advisors.            

Any distribution on a REMIC Residual Certificate will be treated as a 
non-taxable return of capital to the extent it does not exceed the holder's     
adjusted basis in such REMIC Residual Certificate. To the extent a distribution 
on a REMIC Residual Certificate exceeds such adjusted basis, it will be treated 
as gain from the sale of such REMIC Residual Certificate. Holders of certain    
REMIC Residual Certificates may be entitled to distributions early in the term  
of the related REMIC under circumstances in which their bases in such REMIC     
Residual Certificates will not be sufficiently large that such distributions    
will be treated as nontaxable returns of capital. Their bases in such REMIC     
Residual Certificates will initially equal the amount paid for such REMIC       
Residual Certificates and will be increased by their allocable shares of taxable
income of the Trust Fund. However, such basis increases may not occur until the 
end of the calendar quarter, or perhaps the end of the calendar year, with      
respect to which such REMIC taxable income is allocated to the REMIC Residual   
Certificateholders. To the extent such REMIC Residual Certificateholders'       
initial bases are less than the distributions to such REMIC Residual            
Certificateholders, and increases in such initial bases either occur after such 
distributions or (together with their initial bases) are less than the amount of
such distributions, gain will be recognized to such REMIC Residual              
Certificateholders on such distributions and will be treated as gain from the   
sale of their REMIC Residual Certificates.                                      

The effect of these rules is that a Residual Certificateholder may not
amortize its basis in a REMIC Residual Certificate, but may only recover its    
basis through distributions, through the deduction of its share of any net      
losses of the REMIC or upon the sale of its REMIC Residual Certificate. See     
"-- Sales of REMIC Certificates." For a discussion of possible modifications of 
these rules that may require adjustments to income of a holder of a REMIC       
Residual Certificate other than an original holder in order to reflect any      
difference between the cost of such REMIC Residual Certificate to such holder   
and the adjusted basis such REMIC Residual Certificate would have had in the    
hands of the original holder, see "-- Taxation of Owners of REMIC Residual      
Certificates -- General."                                                       

Excess Inclusions                                                     

   Any "excess inclusions" with respect to a REMIC Residual Certificate will
be subject to federal income tax in all events.                                 

In general, the "excess inclusions" with respect to a REMIC Residual  
Certificate for any calendar quarter will be the excess, if any, of (i) the sum 
of the daily portions of REMIC taxable income allocable to such REMIC Residual  
Certificate over (ii) the sum of the "daily accruals" (as defined below) for    
each day during such quarter that such REMIC Residual Certificate was held by   
such REMIC Residual Certificateholder. The daily accruals of a REMIC Residual   
Certificateholder will be determined by allocating to each day during a calendar
quarter its ratable portion of the product of the "adjusted issue price" of the 
REMIC Residual Certificate at the beginning of the calendar quarter and 120% of 
the "long-term Federal rate" in effect on the Closing Date. For this purpose,   
the adjusted issue price of a REMIC Residual Certificate as of the beginning of 
any calendar quarter will be equal to the issue price of the REMIC Residual     
Certificate, increased by the sum of the daily accruals for all prior quarters  
and decreased (but not below zero) by any distributions made with respect to    
such REMIC Residual Certificate before the beginning of such quarter. The issue 
price of a REMIC Residual Certificate is the initial offering price to the      
public (excluding bond houses and brokers) at which a substantial amount of the 
REMIC Residual Certificates were sold. The "long-term Federal rate" is an       
average of current yields on Treasury securities with a remaining term of       
greater than nine years, computed and published monthly by the IRS.             

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    For REMIC Residual Certificateholders, an excess inclusion (i) will not be
permitted to be offset by deductions, losses or loss carryovers from other      
activities, (ii) will be treated as "unrelated business taxable income" to an   
otherwise tax-exempt organization and (iii) will not be eligible for any rate   
reduction or exemption under any applicable tax treaty with respect to the 30%  
United States withholding tax imposed on distributions to REMIC Residual        
Certificateholders that are foreign investors. See, however, "-- Foreign        
Investors in REMIC Certificates," below. In addition, excess inclusions are not 
permitted to be offset by the alternative tax net operating loss deduction and  
alternative minimum taxable income may not be less than the taxpayer's excess   
inclusions.                                                                     

Although it has not done so, the Treasury has authority to issue      
regulations that would treat the entire amount of income accruing on a REMIC    
Residual Certificate as an excess inclusion if the REMIC Residual Certificates  
are considered not to have "significant value." The REMIC Regulations provide   
that in order to be treated as having significant value, the REMIC Residual     
Certificates must have an aggregate issue price at least equal to two percent of
the aggregate issue prices of all of the related REMIC's Regular and Residual   
Certificates. In addition, based on the Prepayment Assumption, the anticipated  
weighted average life of the REMIC Residual Certificates must equal or exceed 20
percent of the anticipated weighted average life of the REMIC, based on the     
Prepayment Assumption and on any required or permitted clean up calls or        
required qualified liquidation provided for in the REMIC's organizational       
documents. If the Treasury issues regulations pursuant to its authority, the    
related Prospectus Supplement will disclose whether offered REMIC Residual      
Certificates may be considered to have "significant value" under the REMIC      
Regulations; provided, however, that any disclosure that a REMIC Residual       
Certificate will have "significant value" will be based upon certain            
assumptions, and the Depositor will make no representation that a REMIC Residual
Certificate will have "significant value" for purposes of the above-described   
rules.                                                                          

In the case of any REMIC Residual Certificates held by a real estate  
investment trust, the aggregate excess inclusions with respect to such REMIC    
Residual Certificates, reduced (but not below zero) by the real estate          
investment trust taxable income (within the meaning of Section 857(b)(2) of the 
Code, excluding any net capital gain), will be allocated among the shareholders 
of such trust in proportion to the dividends received by such shareholders from 
such trust, and any amount so allocated will be treated as an excess inclusion  
with respect to a REMIC Residual Certificate as if held directly by such        
shareholder. Treasury regulations yet to be issued could apply a similar rule to
regulated investment companies, common trust funds and certain cooperatives; the
REMIC Regulations currently do not address this subject.                        

Noneconomic REMIC Residual Certificates                               

Under the REMIC Regulations, transfers of "noneconomic" REMIC Residual
Certificates will be disregarded for all federal income tax purposes if "a      
significant purpose of the transfer was to enable the transferor to impede the  
assessment or collection of tax." If such transfer is disregarded, the purported
transferor will continue to remain liable for any taxes due with respect to the 
income on such "noneconomic" REMIC Residual Certificate. The REMIC Regulations  
provide that a REMIC Residual Certificate is noneconomic unless, based on the   
Prepayment Assumption and on any required or permitted clean up calls, or       
required qualified liquidation provided for in the REMIC's organizational       
documents, (1) the present value of the expected future distributions           
(discounted using the "applicable Federal rate" for obligations whose term ends 
on the close of the last quarter in which excess inclusions are expected to     
accrue with respect to the REMIC Residual Certificate, which rate is computed   
and published monthly by the IRS) on the REMIC Residual Certificate equals at   
least the present value of the expected tax on the anticipated excess           
inclusions, and (2) the transferor reasonably expects that the transferee will  
receive distributions with respect to the REMIC Residual Certificate at or after
the time the taxes accrue on the anticipated excess inclusions in an amount     
sufficient to satisfy the accrued taxes. Accordingly, all transfers of REMIC    
Residual Certificates that may constitute noneconomic residual interests will be
subject to certain restrictions under the terms of the related Pooling Agreement
that are intended to reduce the possibility of any such transfer being          
disregarded. Such restrictions will require each party to a transfer to provide 
an affidavit that no purpose of such transfer is to impede the assessment or    
collection of tax, including certain representations as to the financial        
condition of the prospective transferee, as to which the transferor also is     
required to make a reasonable investigation to                                  

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determine such transferee's historic payment of its debts and ability to        
continue to pay its debts as they come due in the future. Prior to purchasing a 
REMIC Residual Certificate, prospective purchasers should consider the          
possibility that a purported transfer of such REMIC Residual Certificate by such
a purchaser to another purchaser at some future date may be disregarded in      
accordance with the above-described rules which would result in the retention of
tax liability by such purchaser.                                                

The related Prospectus Supplement will disclose whether offered REMIC 
Residual Certificates may be considered "noneconomic" residual interests under  
the REMIC Regulations; provided, however, that any disclosure that a REMIC      
Residual Certificate will not be considered "noneconomic" will be based upon    
certain assumptions, and the Depositor will make no representation that a REMIC 
Residual Certificate will not be considered "noneconomic" for purposes of the   
above-described rules. See "-- Foreign Investors in REMIC Certificates -- REMIC 
Residual Certificates" below for additional restrictions applicable to transfers
of certain REMIC Residual Certificates to foreign persons.                      

Mark-to-Market Rules                                                  

On December 24, 1996, the IRS released final regulations (the         
"MARK-TO-MARKET REGULATIONS") relating to the requirement that a securities     
dealer mark to market securities held for sale to customers. This mark-to-market
requirement applies to all securities owned by a dealer, except to the extent   
that the dealer has specifically identified a security as held for investment.  
The Mark-to-Market Regulations provide that for purposes of this mark-to-market 
requirement, a REMIC Residual Certificate acquired on or after January 4, 1995  
is not treated as a security and thus may not be marked to market. Prospective  
purchasers of a REMIC Residual Certificate should consult their tax advisors    
regarding the possible application of the mark-to-market requirement to REMIC   
Residual Certificates.                                                          

Possible Pass-Through of Miscellaneous Itemized Deductions            

    Fees and expenses of a REMIC generally will be allocated to the holders of
the related REMIC Residual Certificates. The applicable Treasury regulations    
indicate, however, that in the case of a REMIC that is similar to a single class
grantor trust, all or a portion of such fees and expenses should be allocated to
the holders of the related REMIC Regular Certificates. The related Prospectus   
Supplement will so indicate if a related Trust Fund constitutes such a "single  
class REMIC," in which case such fees and expenses will be allocated to holders 
of the related REMIC Regular Certificates.                                      

   With respect to REMIC Residual Certificates or REMIC Regular Certificates
the holders of which receive an allocation of fees and expenses in accordance   
with the preceding discussion, if any holder thereof is an individual, estate or
trust, or a "pass-through entity" beneficially owned by one or more individuals,
estates or trusts, (i) an amount equal to such individual's, estate's or trust's
share of such fees and expenses will be added to the gross income of such holder
and (ii) such individual's, estate's or trust's share of such fees and expenses 
will be treated as a miscellaneous itemized deduction allowable subject to the  
limitation of Section 67 of the Code, which permits such deductions only to the 
extent they exceed in the aggregate two percent of a taxpayer's adjusted gross  
income. In addition, Section 68 of the Code provides that the amount of itemized
deductions otherwise allowable for an individual whose adjusted gross income    
exceeds a specified amount will be reduced by the lesser of (i) 3% of the excess
of the individual's adjusted gross income over such amount or (ii) 80% of the   
amount of itemized deductions otherwise allowable for the taxable year. The     
amount of additional taxable income reportable by REMIC Certificateholders that 
are subject to the limitations of either Section 67 or Section 68 of the Code   
may be substantial. Furthermore, in determining the alternative minimum taxable 
income of such a holder of a REMIC Certificate that is an individual, estate or 
trust, or a "pass-through entity" beneficially owned by one or more individuals,
estates or trusts, no deduction will be allowed for such holder's allocable     
portion of servicing fees and other miscellaneous itemized deductions of the    
REMIC, even though an amount equal to the amount of such fees and other         
deductions will be included in such holder's gross income. Accordingly, such    
REMIC Certificates may not be appropriate investments for individuals, estates, 
or trusts, or pass-through entities beneficially owned by one or more           
individuals, estates or trusts. Such prospective investors should consult       
carefully with their tax advisors prior to making an investment in such         
Certificates.                                                                   

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Sales of REMIC Certificates                                           

If a REMIC Certificate is sold, the selling Certificateholder will    
recognize gain or loss equal to the difference between the amount realized on   
the sale and its adjusted basis in the REMIC Certificate. The adjusted basis of 
a REMIC Regular Certificate generally will equal the cost of such REMIC Regular 
Certificate to such Certificateholder, increased by income reported by such     
Certificateholder with respect to such REMIC Regular Certificate (including     
original issue discount and market discount income) and reduced (but not below  
zero) by distributions on such REMIC Regular Certificate received by such       
Certificateholder and by any amortized premium. The adjusted basis of a REMIC   
Residual Certificate will be determined as described under "-- Taxation of      
Owners of REMIC Residual Certificates -- Basis Rules, Net Losses and            
Distributions." Except as described below, any such gain or loss generally will 
be capital gain or loss. The Code as of the date of this Prospectus provides for
a top marginal tax rate of 39.6% for individuals and a maximum marginal rate for
long-term capital gains of individuals of 28%. No such rate differential exists 
for corporations. In addition, the distinction between a capital gain or loss   
and ordinary income or loss remains relevant for other purposes.                

   Gain from the sale of a REMIC Regular Certificate that might otherwise be
capital gain will be treated as ordinary income to the extent such gain does not
exceed the excess, if any, of (i) the amount that would have been includible in 
the seller's income with respect to such REMIC Regular Certificate had income   
accrued thereon at a rate equal to 110% of the "applicable Federal rate"        
(generally, a rate based on an average of current yields on Treasury securities 
having a maturity comparable to that of the Certificate, which rate is computed 
and published monthly by the IRS), determined as of the date of purchase of such
REMIC Regular Certificate, over (ii) the amount of ordinary income actually     
includible in the seller's income prior to such sale. In addition, gain         
recognized on the sale of a REMIC Regular Certificate by a seller who purchased 
such REMIC Regular Certificate at a market discount will be taxable as ordinary 
income to the extent of any accrued and previously unrecognized market discount 
that accrued during the period the Certificate was held. See "-- Taxation of    
Owners of REMIC Regular Certificates -- Market Discount."                       

   REMIC Certificates will be "evidences of indebtedness" within the meaning
of Section 582(c)(1) of the Code, so that gain or loss recognized from the sale 
of a REMIC Certificate by a bank or thrift institution to which such section    
applies will be ordinary income or loss.                                        

 A portion of any gain from the sale of a REMIC Regular Certificate that
might otherwise be capital gain may be treated as ordinary income to the extent 
that such Certificate is held as part of a "conversion transaction" within the  
meaning of Section 1258 of the Code. A conversion transaction generally is one  
in which the taxpayer has taken two or more positions in Certificates or similar
property that reduce or eliminate market risk, if substantially all of the      
taxpayer's return is attributable to the time value of the taxpayer's net       
investment in such transaction. The amount of gain so realized in a conversion  
transaction that is recharacterized as ordinary income generally will not exceed
the amount of interest that would have accrued on the taxpayer's net investment 
at 120% of the appropriate "applicable Federal rate" (which rate is computed and
published monthly by the IRS) at the time the taxpayer enters into the          
conversion transaction, subject to appropriate reduction for prior inclusion of 
interest and other ordinary income items from the transaction.                  

  Finally, a taxpayer may elect to have net capital gain taxed at ordinary
income rates rather than capital gains rates in order to include such net       
capital gain in total net investment income for the taxable year, for purposes  
of the limitation on the deduction of interest on indebtedness incurred to      
purchase or carry property held for investment to a taxpayer's net investment   
income.                                                                         

    Except as may be provided in Treasury regulations yet to be issued, if the
seller of a REMIC Residual Certificate reacquires the Certificate, any other    
residual interest in a REMIC or any similar interest in a "taxable mortgage     
pool" (as defined in Section 7701(i) of the Code) within six months of the date 
of such sale, the sale will be subject to the "wash sale" rules of Section 1091 
of the Code. In that event, any loss realized by the REMIC Residual             
Certificateholder on the sale will not be deductible, but instead will be added 
to such REMIC Residual Certificateholder's adjusted basis in the newly-acquired 
asset.                                                                          

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PROHIBITED TRANSACTIONS AND OTHER POSSIBLE REMIC TAXES                          

  The Code imposes a tax on REMICs equal to 100% of the net income derived
from "prohibited transactions" (a "Prohibited Transactions Tax"). In general,   
subject to certain specified exceptions a prohibited transaction means the      
disposition of a Mortgage Loan, the receipt of income from a source other than a
Mortgage Loan or certain other permitted investments, the receipt of            
compensation for services, or gain from the disposition of an asset purchased   
with the payments on the Mortgage Loans for temporary investment pending        
distribution on the REMIC Certificates. It is not anticipated that any REMIC    
will engage in any prohibited transactions in which it would recognize a        
material amount of net income.                                                  

   In addition, certain contributions to a REMIC made after the day on which
the REMIC issues all of its interests could result in the imposition of a tax on
the REMIC equal to 100% of the value of the contributed property (a             
"Contributions Tax"). Each Pooling Agreement will include provisions designed to
prevent the acceptance of any contributions that would be subject to such tax.  

     REMICs also are subject to federal income tax at the highest corporate rate
on "net income from foreclosure property," determined by reference to the rules 
applicable to real estate investment trusts. "Net income from foreclosure       
property" generally means gain from the sale of a foreclosure property that is  
inventory property and gross income from foreclosure property other than        
qualifying rents and other qualifying income for a real estate investment trust.
It is not anticipated that any REMIC will recognize "net income from foreclosure
property" subject to any material federal income tax.                           

To the extent permitted by then applicable laws, any Prohibited       
Transactions Tax, Contributions Tax, tax on "net income from foreclosure        
property" or state or local income or franchise tax that may be imposed on the  
REMIC will be borne by the Master Servicer or Trustee in either case out of its 
own funds, provided that the Master Servicer or the Trustee, as the case may be,
has sufficient assets to do so, and provided further that such tax arises out of
a breach of the Master Servicer's or the Trustee's obligations, as the case may 
be, under the related Pooling Agreement and in respect of compliance with       
applicable laws and regulations. Any such tax not borne by the Master Servicer  
or the Trustee will be payable out of the related Trust Fund resulting in a     
reduction in amounts payable to holders of the related REMIC Certificates.      

     Tax and Restrictions on Transfers of REMIC Residual Certificates to Certain
Organizations                                                                   

If a REMIC Residual Certificate is transferred to a "disqualified     
organization" (as defined below), a tax would be imposed in an amount           
(determined under the REMIC Regulations) equal to the product of (i) the present
value (discounted using the "applicable Federal rate" for obligations whose term
ends on the close of the last quarter in which excess inclusions are expected to
accrue with respect to the Certificate, which rate is computed and published    
monthly by the IRS) of the total anticipated excess inclusions with respect to  
such REMIC Residual Certificate for periods after the transfer and (ii) the     
highest marginal federal income tax rate applicable to corporations. The        
anticipated excess inclusions must be determined as of the date that the REMIC  
Residual Certificate is transferred and must be based on events that have       
occurred up to the time of such transfer, the Prepayment Assumption and any     
required or permitted clean up calls or required liquidation provided for in the
REMIC's organizational documents. Such a tax generally would be imposed on the  
transferor of the REMIC Residual Certificate, except that where such transfer is
through an agent for a disqualified organization, the tax would instead be      
imposed on such agent. However, a transferor of a REMIC Residual Certificate    
would in no event be liable for such tax with respect to a transfer if the      
transferee furnishes to the transferor an affidavit that the transferee is not a
disqualified organization and, as of the time of the transfer, the transferor   
does not have actual knowledge that such affidavit is false. Moreover, an entity
will not qualify as a REMIC unless there are reasonable arrangements designed to
ensure that (i) residual interests in such entity are not held by disqualified  
organizations and (ii) information necessary for the application of the tax     
described herein will be made available. Restrictions on the transfer of REMIC  
Residual Certificates and certain other provisions that are intended to meet    
this requirement will be included in the Pooling Agreement, including provisions
(i) requiring any transferee of a REMIC Residual Certificate to provide an      
affidavit representing that it is not a "disqualified organization" and is not  
acquiring the REMIC Residual Certificate on behalf of a "disqualified           
organization," undertaking to maintain such status and                          

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agreeing to obtain a similar affidavit from any person to whom it shall transfer
the REMIC Residual Certificate, (ii) providing that any transfer of a REMIC     
Residual Certificate to a "disqualified person" shall be null and void and (iii)
granting to the Master Servicer the right, without notice to the holder or any  
prior holder, to sell to a purchaser of its choice any REMIC Residual           
Certificate that shall become owned by a "disqualified organization" despite (i)
and (ii) above.                                                                 

In addition, if a "pass-through entity" (as defined below) includes in
income excess inclusions with respect to a REMIC Residual Certificate, and a    
disqualified organization is the record holder of an interest in such entity,   
then a tax will be imposed on such entity equal to the product of (i) the amount
of excess inclusions on the REMIC Residual Certificate that are allocable to the
interest in the pass-through entity held by such disqualified organization and  
(ii) the highest marginal federal income tax rate imposed on corporations. A    
pass-through entity will not be subject to this tax for any period, however, if 
each record holder of an interest in such pass-through entity furnishes to such 
pass-through entity (i) such holder's social security number and a statement    
under penalties of perjury that such social security number is that of the      
record holder or (ii) a statement under penalties of perjury that such record   
holder is not a disqualified organization.                                      

For these purposes, a "disqualified organization" means (i) the United
States, any State or political subdivision thereof, any foreign government, any 
international organization, or any agency or instrumentality of the foregoing   
(but would not include instrumentalities described in Section 168(h)(2)(D) of   
the Code or the Federal Home Loan Mortgage Corporation), (ii) any organization  
(other than a cooperative described in Section 521 of the Code) that is exempt  
from federal income tax, unless it is subject to the tax imposed by Section 511 
of the Code or (iii) any organization described in Section 1381(a)(2)(C) of the 
Code. For these purposes, a "pass-through entity" means any regulated investment
company, real estate investment trust, trust, partnership or certain other      
entities described in Section 860E(e)(6) of the Code. In addition, a person     
holding an interest in a pass-through entity as a nominee for another person    
will, with respect to such interest, be treated as a pass-through entity.       

Termination                                                           

  A REMIC will terminate immediately after the Distribution Date following
receipt by the REMIC of the final payment in respect of the Mortgage Loans or   
upon a sale of the REMIC's assets following the adoption by the REMIC of a plan 
of complete liquidation. The last distribution on a REMIC Regular Certificate   
will be treated as a payment in retirement of a debt instrument. In the case of 
a REMIC Residual Certificate, if the last distribution on such REMIC Residual   
Certificate is less than the REMIC Residual Certificateholder's adjusted basis  
in such Certificate, such REMIC Residual Certificateholder should be treated as 
realizing a loss equal to the amount of such difference, and such loss may be   
treated as a capital loss.                                                      

Reporting and Other Administrative Matters                            

     Solely for purposes of the administrative provisions of the Code, the REMIC
will be treated as a partnership and Residual Certificateholders will be treated
as partners. The Master Servicer will file REMIC federal income tax returns on  
behalf of the related REMIC, will be designated as and will act as the "tax     
matters person" with respect to the REMIC in all respects, and generally will   
hold at least a nominal amount of REMIC Residual Certificates.                  

 As the tax matters person, the Master Servicer will, subject to certain
notice requirements and various restrictions and limitations, generally have the
authority to act on behalf of the REMIC and the REMIC Residual                  
Certificateholders in connection with the administrative and judicial review of 
items of income, deduction, gain or loss of the REMIC, as well as the REMIC's   
Classification. REMIC Residual Certificateholders will generally be required to 
report such REMIC items consistently with their treatment on the related REMIC's
tax return and may in some circumstances be bound by a settlement agreement     
between the Master Servicer, as tax matters person, and the IRS concerning any  
such REMIC item. Adjustments made to the REMIC tax return may require a REMIC   
Residual Certificateholder to make corresponding adjustments on its return, and 
an audit of the REMIC's tax return, or the adjustments resulting from such an   
audit, could                                                                    

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result in an audit of a REMIC Residual Certificateholder's return. No REMIC will
be registered as a tax shelter pursuant to Section 6111 of the Code because it  
is not anticipated that any REMIC will have a net loss for any of the first five
taxable years of its existence. Any person that holds a REMIC Residual          
Certificate as a nominee for another person may be required to furnish to the   
related REMIC, in a manner to be provided in Treasury regulations, the name and 
address of such person and other information.                                   

   Reporting of interest income, including any original issue discount, with
respect to REMIC Regular Certificates is required annually, and may be required 
more frequently under Treasury regulations. These information reports generally 
are required to be sent to individual holders of REMIC Regular Interests and the
IRS; holders of REMIC Regular Certificates that are corporations, trusts,       
securities dealers and certain other non-individuals will be provided interest  
and original issue discount income information and the information set forth in 
the following paragraph upon request in accordance with the requirements of the 
applicable regulations. The information must be provided by the later of 30 days
after the end of the quarter for which the information was requested, or two    
weeks after the receipt of the request. The REMIC must also comply with rules   
requiring a REMIC Regular Certificate issued with original issue discount to    
disclose on its face certain information including the amount of original issue 
discount and the issue date, and requiring such information to be reported to   
the IRS. Reporting with respect to the REMIC Residual Certificates, including   
income, excess inclusions, investment expenses and relevant information         
regarding qualification of the REMIC's assets will be made as required under the
Treasury regulations, generally on a quarterly basis.                           

As applicable, the REMIC Regular Certificate information reports will 
include a statement of the adjusted issue price of the REMIC Regular Certificate
at the beginning of each accrual period. In addition, the reports will include  
information required by regulations with respect to computing the accrual of any
market discount. Because exact computation of the accrual of market discount on 
a constant yield method requires information relating to the holder's purchase  
price that the Master Servicer will not have, such regulations only require that
information pertaining to the appropriate proportionate method of accruing      
market discount be provided. See "Taxation of Owners of REMIC Regular           
Certificates -- Market Discount."                                               

     The responsibility for complying with the foregoing reporting rules will be
borne by the Master Servicer. The Prospectus Supplement related to any Series of
Certificates will specify the manner in which Certificateholders may request any
information with respect to the returns described in Section 1.6049-7(e)(2) of  
the Treasury regulations.                                                       

Backup Withholding With Respect to REMIC Certificates                 

  Payments of interest and principal, as well as payments of proceeds from
the sale of REMIC Certificates, may be subject to the "backup withholding tax"  
under Section 3406 of the Code at a rate of 31% if recipients of such payments  
fail to furnish to the payor certain information, including their taxpayer      
identification numbers, or otherwise fail to establish an exemption from such   
tax. Any amounts deducted and withheld from a distribution to a recipient would 
be allowed as a credit against such recipient's federal income tax. Furthermore,
certain penalties may be imposed by the IRS on a recipient of payments that is  
required to supply information but that does not do so in the proper manner.    

Foreign Investors in REMIC Certificates                               

    A REMIC Regular Certificateholder that is not a "United States person" (as
defined below) and is not subject to federal income tax as a result of any      
direct or indirect connection to the United States in addition to its ownership 
of a REMIC Regular Certificate will not be subject to United States federal     
income or withholding tax in respect of a distribution on a REMIC Regular       
Certificate, provided that the holder complies to the extent necessary with     
certain identification requirements (including delivery of a statement, signed  
by the Certificateholder under penalties of perjury, certifying that such       
Certificateholder is not a United States person and providing the name and      
address of such Certificateholder). For these purposes, "United States person"  
means a citizen or resident of the United States, a corporation, partnership or 
other entity created or organized in, or under the laws of, the United States or
any political subdivision thereof, or an estate or trust whose income from      
sources without the United States is includible in gross income for United      
States                                                                          

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federal income tax purposes regardless of its connection with the conduct of a  
trade or business within the United States. It is possible that the IRS may     
assert that the foregoing tax exemption should not apply with respect to a REMIC
Regular Certificate held by a REMIC Residual Certificateholder that owns        
directly or indirectly a 10% or greater interest in the REMIC Residual          
Certificates. If the holder does not qualify for exemption, distributions of    
interest, including distributions in respect of accrued original issue discount,
to such holder may be subject to a tax rate of 30%, subject to reduction under  
any applicable tax treaty.                                                      

   In addition, the foregoing rules will not apply to exempt a United States
shareholder of a controlled foreign corporation from taxation on such United    
States shareholder's allocable portion of the interest income received by such  
controlled foreign corporation.                                                 

    Further, it appears that a REMIC Regular Certificate would not be included
in the estate of a nonresident alien individual and would not be subject to     
United States estate taxes. However, Certificateholders who are non-resident    
alien individuals should consult their tax advisors concerning this question.   

New Withholding Regulations                                           

    The Treasury Department has issued new regulations (the "New Regulations")
which make certain modifications to the withholding, backup withholding and     
information reporting rules described above. The New Regulations attempt to     
unify certification requirements and modify reliance standards. The New         
Regulations will generally be effective for payments made after December 31,    
1998, subject to certain transition rules. Prospective investors are urged to   
consult their own tax advisors regarding the New Regulations.                   

STATE AND OTHER TAX CONSEQUENCES

  In addition to the federal income tax consequences described in "FEDERAL
INCOME TAX CONSEQUENCES", potential investors should consider the state and     
local tax consequences of the acquisition, ownership, and disposition of the    
Certificates offered hereunder. State tax law may differ substantially from the 
corresponding federal tax law, and the discussion above does not purport to     
describe any aspect of the tax laws of any state or other jurisdiction.         
Therefore, prospective investors should consult their own tax advisors with     
respect to the various tax consequences of investments in the certificates      
offered hereunder.                                                              

ERISA CONSIDERATIONS

    The Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
imposes certain fiduciary and prohibited transaction restrictions on employee   
pension and welfare benefit plans subject to ERISA ("ERISA Plans"). Section 4975
of the Code imposes similar prohibited transaction restrictions on tax-qualified
retirement plans described in Section 401(a) of the Code ("Qualified Retirement 
Plans") and on Individual Retirement Accounts ("IRAs") described in Section 408 
of the Code (collectively, "Tax-Favored Plans"). In accordance with the general 
fiduciary standards of ERISA, an ERISA Plan fiduciary should consider whether an
investment in the Certificates is permitted by the documents and instruments    
governing the Plan, consistent with the Plan's overall investment policy and    
appropriate in view of the composition of its investment portfolio.             

   Certain employee benefit plans, such as governmental plans (as defined in
Section 3(32) of ERISA) and certain church plans (as defined in Section 3(33) of
ERISA), are not subject to the ERISA requirements discussed herein. Accordingly,
assets of such plans may be invested in Certificates without regard to the ERISA
considerations described below, subject to the provisions of applicable federal 
and state law. Any such plan that is a Qualified Retirement Plan and exempt from
taxation under Sections 401(a) and 501(a) of the Code, however, is subject to   
the prohibited transaction rules set forth in Section 503 of the Code.          

     Section 406 of ERISA and Section 4975 of the Code prohibit a broad range of
transactions involving "plan assets" of ERISA Plans and Tax-Favored Plans       
(collectively, "Plans") and persons ("parties in interest" under ERISA or       
"disqualified persons" under the Code (collectively, "Parties in Interest")) who

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have certain specified relationships to the Plans, unless a statutory or        
administrative exemption is available. Certain Parties in Interest who          
participate in a prohibited transaction may be subject to a penalty or an excise
tax imposed pursuant to Section 502(i) of ERISA or Section 4975 of the Code,    
unless a statutory or administrative exemption is available.                    

PLAN ASSET REGULATIONS                                                          

     Investments of Plan Assets (as defined below) in Certificates may cause the
underlying Mortgage Loans included in a Trust Fund to be deemed "plan assets" of
investing Plans. The U.S. Department of Labor (the "DOL") has promulgated       
regulations (the "DOL Regulations") concerning whether or not the assets of a   
Plan would be deemed to include an interest in the underlying assets of an      
entity (such as a Trust Fund), for purposes of applying the general fiduciary   
responsibility provisions of ERISA and the prohibited transaction provisions of 
ERISA and Section 4975 of the Code, when a Plan acquires an "equity interest"   
(such as a Certificate) in such entity. Because of the factual nature of certain
of the rules set forth in the DOL Regulations, Plan Assets either may be deemed 
to include an interest in the assets of a Trust Fund or may be deemed merely to 
include its interest in the Certificates. Therefore, neither Plans nor such     
entities should acquire or hold Certificates in reliance upon the availability  
of any exception under the DOL Regulations. For purposes of this Section "ERISA 
CONSIDERATIONS," the term "Plan Assets" or "assets of a Plan" has the meaning   
specified in the DOL Regulations and includes an undivided interest in the      
underlying assets of certain entities in which a Plan invests.                  

   The prohibited transaction provisions of Section 406 of ERISA and Section
4975 of the Code may apply to a Trust Fund and cause the Depositor, the Master  
Servicer, any Subservicer, the Trustee, the obligor under any credit enhancement
mechanism or certain affiliates thereof, to be considered or become Parties in  
Interest with respect to an investing Plan or a Plan holding an interest in an  
investing entity whose assets include Plan Assets (a "Plan Asset Investor"). If 
so, the acquisition or holding of Certificates by, on behalf of or with Plan    
Assets of any Plan could also give rise to a prohibited transaction under ERISA 
and/or Section 4975 of the Code, unless some statutory or administrative        
exemption is available. Certificates acquired by a Plan would constitute assets 
of that Plan. Under the DOL Regulations, the Trust Fund, including the Mortgage 
Loans and the other assets held in the Trust Fund, may also be deemed to be     
assets of each Plan that acquires Certificates. Special caution should be       
exercised before Plan Assets are used to acquire a Certificate in such          
circumstances, especially if, with respect to such assets, the Depositor, the   
Master Servicer, any Subservicer, the Trustee, the obligor under any credit     
enhancement mechanism or an affiliate thereof either (i) has investment         
discretion with respect to the investment of such Plan Assets or (ii) has       
authority or responsibility to give (or regularly gives) investment advice with 
respect to such Plan Assets for a fee pursuant to an agreement or understanding 
that such advice will serve as a primary basis for investment decisions with    
respect to such Plan Assets.                                                    

Any person who has discretionary authority or control respecting the  
management or disposition of Plan Assets, and any person who provides investment
advice with respect to such assets for a fee (in the manner described above), is
a fiduciary of the investing Plan. If the Mortgage Loans were to constitute Plan
Assets, then any party exercising management or discretionary control regarding 
those assets may be deemed to be a Plan "fiduciary," and thus subject to the    
fiduciary requirements of ERISA and the prohibited transaction provisions of    
ERISA and Section 4975 of the Code with respect to any investing Plan. In       
addition, if the Mortgage Loans were to constitute Plan Assets, then the        
acquisition or holding of Certificates by, on behalf of or with Plan Assets, as 
well as the operation of the Trust Fund, may constitute or result in a          
prohibited transaction under ERISA and/or Section 4975 of the Code.             

PROHIBITED TRANSACTION CLASS EXEMPTION 83-1                                     

   Prohibited Transaction Class Exemption ("PTCE") 83-1 (Class Exemption for
Certain Transactions Involving Mortgage Pool Investment Trusts) permits, subject
to certain conditions, certain transactions involving the creation, maintenance 
and termination of certain residential mortgage pools and the acquisition and   
holding of certain residential mortgage pool pass-through certificates by Plan  
Asset Investors, regardless of whether (a) the mortgage pool is exempt from     
"plan asset" treatment under the DOL Regulations or                             

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(b) the transactions would otherwise be prohibited under ERISA or Section 4975  
of the Code. If the general conditions (described below) of PTCE 83-1 are       
satisfied, an investment by a Plan in Certificates (1) will be exempt from the  
prohibitions of Section 406(a) of ERISA and Sections 4975(c)(1)(A)-(D) of the   
Code (relating generally to Plan Asset transactions involving Parties in        
Interest who are not fiduciaries) if the Certificates are purchased at no more  
than fair market value, and (2) will be exempt from the prohibitions of Sections
406(b)(1) and (2) of ERISA and Sections 4975(c)(1)(E) and (F) of the Code       
(relating generally to Plan Asset transactions with fiduciaries) if, in         
addition, the purchase is approved by an independent fiduciary, the Plan Asset  
Investor pays no more for the Certificates than would be paid in an arm's length
transaction with an unrelated party, no sales commission is paid to the         
Depositor as Mortgage Pool sponsor, the Plan Asset Investor does not purchase   
more than 25% of the Certificates of the applicable Series, and at least 50% of 
the Certificates of that Series is purchased by persons independent of the      
Depositor, the Trustee and the obligor under any credit enhancement mechanism,  
as applicable.                                                                  

   PTCE 83-1 sets forth three general conditions which must be satisfied for
any transaction to be eligible for exemption: (1) the existence of a pool       
trustee who is not an affiliate of the pool sponsor; (2) the maintenance of a   
system of insurance or other protection for the pooled mortgage loans and       
property securing such loans, and for indemnifying certificateholders against   
reductions in pass-through payments due to property damage or defaults in loan  
payments; and (3) a limitation on the amount of the payment retained by the pool
sponsor, together with other funds inuring to its benefit, to not more than     
adequate consideration for selling the mortgage loans plus reasonable           
compensation for services provided by the pool sponsor to the mortgage pool.    

  The Trustee for each Series will be unaffiliated with the Depositor, and
the first general condition of PTCE 83-1 will be satisfied for each such Series.
With respect to the second general condition of PTCE 83-1, the Depositor intends
to use its best efforts to establish for each Series of Certificates an         
insurance, indemnification, subordination or other method of credit support     
which will adequately protect the Mortgage Pools and indemnify Senior           
Certificateholders of the applicable Series against pass-through payment        
reductions resulting from property damage or defaults in loan payments. See     
"DESCRIPTION OF CREDIT ENHANCEMENTS." The amount, method and description of the 
credit support method applicable to a Series of Certificates will be set forth  
in the related Prospectus Supplement. With respect to the third general         
condition of PTCE 83-1, the Depositor intends to use its best efforts to        
establish for each Series a compensation method which will produce for the      
Depositor total compensation which will not exceed adequate consideration for   
forming the Mortgage Pool, selling the Certificates and fulfilling any duties   
owed the Mortgage Pool by the Depositor under the applicable Pooling Agreement. 
However, the Depositor does not guarantee that its credit support and           
compensation methods will be sufficient to meet the second and third general    
conditions (described above) with respect to any Series.                        

    As indicated in the two preceding paragraphs, the continued maintenance of
a system of insurance or other protection for the pooled mortgage loans and     
property securing such loans, and for indemnifying certificateholders against   
reductions in pass-through payments due to property damage or defaults in loan  
payments, is one of the three general conditions that must be satisfied for any 
transaction involving a Mortgage Pool to remain eligible for exemption by PTCE  
83-1 from the prohibited transaction rules of ERISA and Section 4975 of the     
Code. If the credit support method established for any Series is cancelled or   
terminated, or if the credit support is reduced to such an extent that its      
coverage amount is less than the greater of (a) 1% of the aggregate unpaid      
principal balance of the Mortgage Loans or (b) the unpaid principal balance of  
the largest single Mortgage Loan (see "DESCRIPTION OF CREDIT ENHANCEMENTS"),    
then the Mortgage Pool relating to that Series may no longer satisfy the general
conditions of PTCE 83-1. In such event, the exemption from the prohibited       
transaction rules afforded by PTCE 83-1 may no longer be available.             

   One or more Series of Certificates may be offered to Plan Asset Investors
through a forward delivery commitment contract, which is a contract for the     
purchase of Certificates to be delivered at an agreed future settlement date.   
PTCE 83-1 permits the sale of Certificates to a Plan Asset Investor pursuant to 
such a contract, provided that the forward delivery commitment is expressly     
approved by a fiduciary who is independent of the Depositor, the Trustee, the   
obligor under any credit enhancement mechanism, as                              

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applicable, and their respective affiliates, and who has the authority to manage
and control the Plan Assets being committed for investment in the Certificates. 

 PTCE 83-1 will not provide exemptive relief with respect to a Series of
Certificates evidencing interests in a Trust Fund that includes Cooperative     
Loans. If a Series of Certificates is subdivided into two or more Classes which 
are entitled to disproportionate allocations of the principal and interest      
payments on the Mortgage Loans, the availability of the exemption afforded by   
PTCE 83-1 may be adversely affected, as described in the applicable Prospectus  
Supplement. Moreover, if any Class of Certificates is entitled to pass-through  
payments of principal (but no or only nominal interest) or interest (but no or  
only nominal principal), PTCE 83-1 will not exempt holders of the Class of      
Certificates from the prohibited transaction rules of ERISA and Section 4975 of 
the Code.                                                                       

OTHER EXEMPTIONS                                                                

    If for any reason PTCE 83-1 does not provide an exemption for a particular
Certificateholder who is a Plan or a Plan Asset Investor, one of five other     
prohibited transaction class exemptions issued by the DOL might apply, i.e.,    
PTCE 96-23 (Class Exemption for Plan Asset Transactions Determined by In-House  
Asset Managers), PTCE 95-60 (Class Exemption for Certain Transactions Involving 
Insurance Company General Accounts), PTCE 91-38 (Class Exemption for Certain    
Transactions Involving Bank Collective Investment Funds), PTCE 90-1 (Class      
Exemption for Certain Transactions Involving Insurance Company Pooled Separate  
Accounts) or PTCE 84-14 (Class Exemption for Plan Asset Transactions Determined 
by Independent Qualified Professional Asset Managers). There can be no assurance
that any of these class exemptions will apply with respect to any particular    
Plan or Plan Asset Investor or, even if it were to apply, that the exemption    
would apply to all transactions involving the Mortgage Pool. In addition, the   
underwriter with respect to a particular Series may be the recipient of a final 
prohibited transaction exemption which, if so specified in the applicable       
Prospectus Supplement, may accord a Plan or a Plan Asset Investor protection    
from violations of the prohibited transaction rules of ERISA and Section 4975 of
the Code if the Plan or Plan Asset Investor satisfies the conditions described  
in the applicable Prospectus Supplement.                                        

TAX EXEMPT INVESTORS                                                            

    A Plan that is exempt from federal income taxation pursuant to Section 501
of the Code (a "Tax Exempt Investor") nonetheless will be subject to federal    
income taxation to the extent that its income is "unrelated business taxable    
income" ("UBTI") within the meaning of Section 512 of the Code. All "excess     
inclusions" of a REMIC allocated to a REMIC Residual Certificate held by a      
Tax-Exempt Investor will be considered UBTI and thus will be subject to federal 
income tax. See "FEDERAL INCOME TAX CONSEQUENCES -- Taxation of Owners of REMIC 
Residual Certificates -- Excess Inclusions."                                    

CONSULTATION WITH COUNSEL                                                       

     Any fiduciary or other Plan Asset Investor that proposes to acquire or hold
Certificates on behalf of or with Plan Assets of any Plan should consult with   
its counsel with respect to the potential applicability of the fiduciary        
responsibility provisions of ERISA and the prohibited transaction provisions of 
ERISA and Section 4975 of the Code to the proposed investment and the           
availability of PTCE 83-1 or any other prohibited transaction exemption.        

LEGAL INVESTMENT MATTERS

Each Class of Certificates offered by means of this Prospectus and the
related Prospectus Supplement will be rated at the date of issuance in one of   
the four highest rating categories by at least one Rating Agency. If so         
specified in the related Prospectus Supplement each such Class that is rated in 
one of the two highest rating categories by at least one Rating Agency will     
constitute "mortgage related securities" for purposes of the Secondary Mortgage 
Market Enhancement Act of 1984 ("SMMEA"), and, as such, will be legal           
investments for persons, trusts, corporations, partnerships, associations,      
business trusts and business entities (including depository institutions, life  
insurance companies and pension funds) created pursuant to or existing          

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under the laws of the United States or of any State whose authorized investments
are subject to state regulation to the same extent that, under applicable law,  
obligations issued by or guaranteed as to principal and interest by the United  
States or any agency or instrumentality thereof constitute legal investments for
such entities.                                                                  

    Under SMMEA, if a State enacted legislation on or prior to October 3, 1991
specifically limiting the legal investment authority of any such entities with  
respect to "mortgage related securities," such securities will constitute legal 
investments for entities subject to such legislation only to the extent provided
therein. Certain States have enacted legislation which overrides the preemption 
provisions of SMMEA. SMMEA provides, however, that in no event will the         
enactment of any such legislation affect the validity of any contractual        
commitment to purchase, hold or invest in "mortgage related securities," or     
require the sale or other disposition of such securities, so long as such       
contractual commitment was made or such securities acquired prior to the        
enactment of such legislation.                                                  

  SMMEA also amended the legal investment authority of federally-chartered
depository institutions as follows: federal savings and loan associations and   
federal savings banks may invest in, sell or otherwise deal with "mortgage      
related securities" without limitation as to the percentage of their assets     
represented thereby, federal credit unions may invest in such securities, and   
national banks may purchase such securities for their own account without regard
to the limitations generally applicable to investment securities set forth in 12
U.S.C. 24 (Seventh), subject in each case to such regulations as the applicable 
federal regulatory authority may prescribe.                                     

The Federal Financial Institutions Examination Council has issued a   
supervisory policy statement (the "Policy Statement") applicable to all         
depository institutions, setting forth guidelines for and significant           
restrictions on investments in "high-risk mortgage securities." The Policy      
Statement has been adopted by the Federal Reserve Board, the Office of the      
Comptroller of the Currency, the FDIC and the OTS with an effective date of     
February 10, 1992. The Policy Statement generally indicates that a mortgage     
derivative product will be deemed to be high risk if it exhibits greater price  
volatility than a standard fixed rate 30-year mortgage security. According to   
the Policy Statement, prior to purchase, a depository institution will be       
required to determine whether a mortgage derivative product that it is          
considering acquiring is high-risk, and if so that the proposed acquisition     
would reduce the institution's overall interest rate risk. Reliance on analysis 
and documentation obtained from a securities dealer or other outside party      
without internal analysis by the institution would be unacceptable. There can be
no assurance as to which Classes of Certificates will be treated as high-risk   
under the Policy Statement.                                                     

     The predecessor to the OTS issued a bulletin, entitled "Mortgage Derivative
Products and Mortgage Swaps," which is applicable to thrift institutions        
regulated by the OTS. The bulletin established guidelines for the investment by 
savings institutions in certain "high-risk" mortgage derivative securities and  
limitations on the use of such securities by insolvent, undercapitalized or     
otherwise "troubled" institutions. According to the bulletin, such "high-risk"  
mortgage derivative securities include securities having certain specified      
characteristics, which may include certain Classes of Certificates. In addition,
the National Credit Union Administration has issued regulations governing       
federal credit union investments which prohibit investment in certain specified 
types of securities, which may include certain Classes of Certificates. Similar 
policy statements have been issued by regulators having jurisdiction over other 
types of depository institutions.                                               

     Certain Classes of Certificates offered hereby, including any Class that is
not rated in one of the two highest rating categories by at least one Rating    
Agency, will not constitute "mortgage related securities" for purposes of SMMEA.
Any such Class of Certificates will be identified in the related Prospectus     
Supplement. Prospective investors in such Classes of Certificates, in           
particular, should consider the matters discussed in the following paragraph.   

    There may be other restrictions on the ability of certain investors either
to purchase certain Classes of Certificates or to purchase any Class of         
Certificates representing more than a specified percentage of the investors'    
assets. The Depositor will make no representations as to the proper             
characterization of any Class of Certificates for legal investment or other     
purposes, or as to the ability of particular investors to purchase any Class of 
Certificates under applicable legal investment restrictions. These uncertainties
may adversely affect                                                            

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the liquidity of any Class of Certificates. Accordingly, all investors whose    
investment activities are subject to legal investment laws and regulations,     
regulatory capital requirements or review by regulatory authorities should      
consult with their own legal advisors in determining whether and to what extent 
the Certificates of any Class constitute legal investments or are subject to    
investment, capital or other restrictions, and, if applicable, whether SMMEA has
been overridden in any jurisdiction relevant to such investor.                  

USE OF PROCEEDS 

Substantially all of the net proceeds to be received from the sale of 
Certificates will be applied by the Depositor to finance the purchase of, or to 
repay short-term loans incurred to finance the purchase of, the Mortgage Loans  
underlying the Certificates or will be used by the Depositor for general        
corporate purposes. The Depositor expects that it will make additional sales of 
securities similar to the Certificates from time to time, but the timing and    
amount of any such additional offerings will be dependent upon a number of      
factors, including the volume of mortgage loans purchased by the Depositor,     
prevailing interest rates, availability of funds and general market conditions. 

METHODS OF DISTRIBUTION 

   The Certificates offered hereby and by the related Prospectus Supplements
will be offered in Series through one or more of the methods described below.   
The Prospectus Supplement prepared for each Series will describe the method of  
offering being utilized for that Series and will state the net proceeds to the  
Depositor from such sale.                                                       

The Depositor intends that Certificates will be offered through the   
following methods from time to time and that offerings may be made concurrently 
through more than one of these methods or that an offering of a particular      
Series of Certificates may be made through a combination of two or more of these
methods. Such methods are as follows:                                           

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

          2. By placements by the Depositor with institutional investors through
dealers; and                                                          

          3. By direct placements by the Depositor with institutional investors.

If underwriters are used in a sale of any Certificates (other than in 
connection with an underwriting on a best efforts basis), such Certificates will
be acquired by the underwriters for their own account and may be resold from    
time to time in one or more transactions, including negotiated transactions, at 
fixed public offering prices or at varying prices to be determined at the time  
of sale or at the time of commitment therefor. The managing underwriter or      
underwriters 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. BancAmerica Robertson Stephens, an 
affiliate of the Depositor and the Master Servicer, may participate as an       
underwriter in the offering of the Certificates.                                

   In connection with the sale of the Certificates, underwriters may receive
compensation from the Depositor or from purchasers of the Certificates in the   
form of discounts, concessions or commissions. Underwriters and dealers         
participating in the distribution of the Certificates may be deemed to be       
underwriters in connection with such Certificates, and any discounts or         
commissions received by them from the Depositor and any profit on the resale of 
Certificates by them may be deemed to be underwriting discounts and commissions 
under the Securities Act of 1933, as amended.                                   

This Prospectus and the related Prospectus Supplement may be used by  
BancAmerica Robertson Stephens in connection with offers and sales related to   
secondary market transactions in any Series of Certificates. BancAmerica        
Robertson Stephens may act as principal or agent in such transactions. Such     
sales will be made at prices related to prevailing market prices at the time of 
sale or otherwise.                                                              

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     It is anticipated that the underwriting agreement pertaining to the sale of
any Series of Certificates will provide that the obligations of the underwriters
will be subject to certain conditions precedent, that the underwriters will be  
obligated to purchase all such Certificates if any are purchased (other than in 
connection with an underwriting on a best efforts basis) and that, in limited   
circumstances, the Depositor will indemnify the several underwriters and the    
underwriters will indemnify the Depositor against certain civil liabilities,    
including liabilities under the Securities Act of 1933, as amended, or will     
contribute to payments required to be made in respect thereof.                  

    The Prospectus Supplement with respect to any Series offered by placements
through dealers will contain information regarding the nature of such offering  
and any agreements to be entered into between the Depositor and purchasers of   
Certificates of such Series.                                                    

    Purchasers of Certificates, including dealers, may, depending on the facts
and circumstances of such purchases, be deemed to be "underwriters" within the  
meaning of the Securities Act of 1933, as amended, in connection with reoffers  
and sales by them of Certificates. Holders of Certificates should consult with  
their legal advisors in this regard prior to any such reoffer or sale.          

RATING

It is a condition to the issuance of the Certificates of each Series  
offered hereby and by the related Prospectus Supplement that they shall have    
been rated in one of the four highest rating categories by one or more          
nationally recognized statistical rating agencies (each, a "Rating Agency")     
specified in the related Prospectus Supplement.                                 

 Ratings on mortgage pass-through certificates address the likelihood of
receipt by certificateholders of all distributions on the underlying mortgage   
loans. These ratings address the structural, legal and issuer-related aspects   
associated with such certificates, the nature of the underlying mortgage loans  
and the credit quality of the guarantor, if any. Ratings on mortgage            
pass-through certificates do not represent any assessment of the likelihood of  
principal prepayments by mortgagors or of the degree by which such prepayments  
might differ from those originally anticipated. As a result, certificateholders 
might suffer a lower than anticipated yield, and, in addition, holders of       
stripped pass-through certificates in extreme cases might fail to recoup their  
initial investments.                                                            

   A security rating is not a recommendation to buy, sell or hold securities
and may be subject to revision or withdrawal at any time by the assigning rating
organization. Each security rating should be evaluated independently of any     
other security rating.                                                          

LEGAL MATTERS 

Certain legal matters will be passed upon for the Depositor by Orrick,
Herrington & Sutcliffe LLP, San Francisco, California.                          

FINANCIAL INFORMATION 

     The Depositor has determined that its financial statements are not material
to the offering made hereby.                                                    

ADDITIONAL INFORMATION

     This Prospectus, together with the Prospectus Supplement for each Series of
Certificates, contains a summary of the material terms of the applicable        
exhibits to the Registration Statement and the documents referred to herein and 
therein. Copies of such exhibits are on file at the offices of the Securities   
and Exchange Commission in Washington, D.C., and may be obtained at rates       
prescribed by the Commission upon request to the Commission and may be          
inspected, without charge, at the Commission's offices. In addition, such       
Registration Statement, the exhibits thereto and any reports or other           
information filed with the Commission through its Electronic Data Gathering,    
Analysis, and Retrieval System are publicly available through the Commission's  
Web site (http://www.sec.gov).                                                  

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INDEX OF PRINCIPAL DEFINITIONS

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                                                                                       PAGE 
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Accrual Certificates..................................................................     6
Advance...............................................................................    33
Affiliated Seller.....................................................................    12
Appraised Value.......................................................................    13
ARM Loans.............................................................................    12
Balloon Amount........................................................................    13
Baloon Loans..........................................................................    13
Bank of America NT&SA.................................................................    15
BankAmerica...........................................................................     6
Bankruptcy Amount.....................................................................    37
Bankruptcy Loss.......................................................................    39
Book-Entry Certificates...............................................................    24
Buydown Account.......................................................................    14
Buydown Agreement.....................................................................    30
Buydown Funds.........................................................................    14
Buydown Mortgage Loans................................................................    14
Buydown Period........................................................................    14
CEDEL.................................................................................    26
CEDEL Participants....................................................................    26
Certificate Account...................................................................    29
Certificate Account Deposit Date......................................................    29
Certificate Insurance Policy..........................................................    41
Certificate Principal Balance.........................................................     5
Certificateholder.....................................................................    24
Certificateholders....................................................................     3
Certificates..........................................................................     1
Citibank..............................................................................    24
Class.................................................................................     1
Closing Date..........................................................................    76
Code..................................................................................     6
Commission............................................................................     3
Committee Report......................................................................    71
Contributions Tax.....................................................................    87
Convertible Mortgage Loan.............................................................    14
Cooperative...........................................................................    12
Cooperative Loans.....................................................................    12
Cooperative Notes.....................................................................    12
Credit Enhancer.......................................................................    39
Custodial Account.....................................................................    20
Cypress Center........................................................................    20
Debt Service Reduction................................................................    41
Defaulted Mortgage Loss...............................................................    39
Deficient Valuation...................................................................    41
Definitive Certificates...............................................................    25
Deleted Mortgage Loan.................................................................    20

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                                                        [Enlarge/Download Table]

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Depositaries..........................................................................    24
Depositor.............................................................................     1
Determination Date....................................................................    33
Distribution Date.....................................................................     7
DOL...................................................................................    91
DOL Regulations.......................................................................    91
Due Date..............................................................................    29
Eligible Account......................................................................    29
ERISA.................................................................................     9
ERISA Plans...........................................................................    90
Euroclear.............................................................................    26
Euroclear Cooperative.................................................................    26
Euroclear Operator....................................................................    26
Euroclear Participants................................................................    26
Extraordinary Losses..................................................................    39
FDIC..................................................................................    16
FHA...................................................................................    16
FHLMC.................................................................................    16
FNMA..................................................................................    16
Form of Pooling Agreement.............................................................     4
Fraud Loss............................................................................    39
Fraud Loss Amount.....................................................................    37
Garn-St Germain Act...................................................................    63
GNMA..................................................................................    16
Grantor Trust Certificates............................................................ 9, 65
Grantor Trust Fractional Interest Certificate.........................................    66
Grantor Trust Fund....................................................................    65
Grantor Trust Strip Certificate.......................................................    66
Guides................................................................................    16
Holder................................................................................    25
Index.................................................................................    13
Indirect Participants.................................................................    25
Insurance Proceeds....................................................................    29
IRAs..................................................................................    90
IRS...................................................................................    67
Issue Premium.........................................................................    82
Letter of Credit......................................................................    40
Letter of Credit Bank.................................................................    40
Liquidated Mortgage Loan..............................................................    35
Liquidation Proceeds..................................................................    29
Loan-to-Value Ratio...................................................................    13
Loss..................................................................................    45
Mark-to-Market Regulations............................................................    85
Master Commitments....................................................................    18
Master Servicer.......................................................................     1
Morgan................................................................................    24
Mortgage File.........................................................................    28
Mortgage Loans........................................................................     1

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                                                                                       PAGE 
                                                                                       -----
                                                                                            
Mortgage Notes........................................................................    12
Mortgage Pool.........................................................................     1
Mortgage Pool Insurance Policy........................................................    40
Mortgage Rate.........................................................................    12
Mortgaged Properties..................................................................     6
Mortgages.............................................................................    12
Mortgagor.............................................................................    11
Net 5 Loans...........................................................................    13
Net Mortgage Rate.....................................................................    54
Non-OID Pool..........................................................................    69
Nonrecoverable Advance................................................................    31
Note Margin...........................................................................    13
OID Pool..............................................................................    69
OID Regulations.......................................................................    65
OTS...................................................................................    20
Owners................................................................................    25
Participants..........................................................................    25
Parties in Interest...................................................................    90
Pass-Through Rate.....................................................................     5
Paying Agent..........................................................................    31
Percentage Interest...................................................................    32
Permitted Investments.................................................................    29
Plan..................................................................................     9
Plan Asset Investor...................................................................    91
Plan Assets...........................................................................    91
Plans.................................................................................    90
Policy Statement......................................................................    94
Pool Insurer..........................................................................    30
Pooling Agreement.....................................................................     4
Prepayment Assumption.................................................................    68
Prepayment Interest Shortfall.........................................................     7
Primary Mortgage Insurance Policy.....................................................    45
Primary Mortgage Insurer..............................................................    45
Principal Prepayments.................................................................    28
Prohibited Transactions Tax...........................................................    87
PTCE..................................................................................    91
Qualified Retirement Plans............................................................    90
Qualified Substitute Mortgage Loan....................................................    20
Rating Agency.........................................................................     9
Realized Loss.........................................................................    37
Record Date...........................................................................    31
Relief Act............................................................................    64
REMIC.................................................................................    65
REMIC Certificates....................................................................    65
REMIC Provisions......................................................................    65
REMIC Regular Certificates............................................................    74
REMIC Regulations.....................................................................    65
REMIC Residual Certificates...........................................................    74

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                                                                                       PAGE 
                                                                                       -----
                                                                                            
REO Mortgage Loan.....................................................................    35
Reserve Fund..........................................................................    41
Retained Yield........................................................................    12
Richmond Center.......................................................................    20
Rules.................................................................................    25
Sellers...............................................................................  1, 6
Senior Certificates...................................................................     6
Senior Percentage.....................................................................    38
Senior/Subordinate Series.............................................................    23
Series................................................................................     1
Servicing Advances....................................................................    31
Single Certificate....................................................................    34
SMMEA.................................................................................     9
Special Hazard Amount.................................................................    37
Special Hazard Instrument.............................................................    39
Special Hazard Insurance Policy.......................................................    40
Special Hazard Loss...................................................................    39
Stated Principal Balance..............................................................    38
Strip Certificates....................................................................     6
Subordinate Amount....................................................................    38
Subordinate Certificates..............................................................     6
Subservicers..........................................................................    15
Tax Exempt Investor...................................................................    93
Tax-Favored Plans.....................................................................    90
Terms and Conditions..................................................................    26
Tiered REMICs.........................................................................    75
Title V...............................................................................    63
Title VIII............................................................................    64
Trust Fund............................................................................     1
Trustee...............................................................................     3
UBTI..................................................................................    93
UCC...................................................................................    60
Unaffiliated Sellers..................................................................    12
Unrecovered Senior Portion............................................................    38

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======================================================                          

NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS     
SUPPLEMENT AND THE PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR        
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE        
DEPOSITOR OR BY THE UNDERWRITER. THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS  
DO NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, THE   
SECURITIES OFFERED HEREBY TO ANYONE IN ANY JURISDICTION IN WHICH THE PERSON     
MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM
IT IS UNLAWFUL TO MAKE ANY SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF  
THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL,
UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT INFORMATION HEREIN OR       
THEREIN IS CORRECT AS OF ANY TIME SINCE THE DATE OF THIS PROSPECTUS SUPPLEMENT  
OR THE PROSPECTUS.                                                              

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

TABLE OF CONTENTS 

                                                                [Download Table]

                                                   PAGE 
                                                   -----
                                                        
                 PROSPECTUS SUPPLEMENT                  
SUMMARY..........................................     S-
RISK FACTORS.....................................     S-
DESCRIPTION OF THE MORTGAGE POOL.................     S-
DESCRIPTION OF THE CERTIFICATES..................     S-
CERTAIN YIELD AND PREPAYMENT CONSIDERATIONS......     S-
POOLING AGREEMENT................................     S-
[DESCRIPTION OF CREDIT ENHANCEMENT...............     S-
FEDERAL INCOME TAX CONSEQUENCES..................     S-
METHOD OF DISTRIBUTION...........................     S-
LEGAL OPINIONS...................................     S-
RATING...........................................     S-
LEGAL INVESTMENT.................................     S-
ERISA CONSIDERATIONS.............................     S-
                       PROSPECTUS                       
PROSPECTUS SUPPLEMENT............................      3
AVAILABLE INFORMATION............................      3
REPORTS TO CERTIFICATEHOLDERS....................      3
INCORPORATION OF CERTAIN DOCUMENTS BY                   
  REFERENCE......................................      3
SUMMARY OF PROSPECTUS............................      5
RISK FACTORS.....................................     10
THE MORTGAGE POOLS...............................     12
THE DEPOSITOR....................................     15
MORTGAGE LOAN PROGRAM............................     15
DESCRIPTION OF THE CERTIFICATES..................     23
SUBORDINATION....................................     37
DESCRIPTION OF CREDIT ENHANCEMENTS...............     39
PRIMARY MORTGAGE INSURANCE, HAZARD INSURANCE;           
  CLAIMS THEREUNDER..............................     45
THE POOLING AGREEMENT............................     49
YIELD CONSIDERATIONS.............................     53
MATURITY AND PREPAYMENT CONSIDERATIONS...........     55
CERTAIN LEGAL ASPECTS OF MORTGAGE LOANS AND             
  RELATED MATTERS................................     57
FEDERAL INCOME TAX CONSEQUENCES..................     64
STATE AND OTHER TAX CONSEQUENCES.................     90
ERISA CONSIDERATIONS.............................     90
LEGAL INVESTMENT MATTERS.........................     93
USE OF PROCEEDS..................................     95
METHODS OF DISTRIBUTION..........................     95
RATING...........................................     96
LEGAL MATTERS....................................     96
FINANCIAL INFORMATION............................     96
ADDITIONAL INFORMATION...........................     96
INDEX OF PRINCIPAL DEFINITIONS...................     97

======================================================                          

======================================================                          
BA MORTGAGE 
SECURITIES, INC.
$                     (APPROXIMATE) 

MORTGAGE PASS-THROUGH 
CERTIFICATES

SERIES 19   -   
------------------------
PROSPECTUS SUPPLEMENT 
------------------------

[NAME OF UNDERWRITER(S)]
                , 19
======================================================                          

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PART II 

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.                           

The following table sets forth expenses expected to be incurred in    
connection with the issuance and distribution of the Certificates being         
registered, other than underwriting discounts and commissions. All such         
expenses, except for the filing fee, are estimated.                             

                                                                [Download Table]
                                                                                    
Registration Fee......................................................... $  606,061
Trustee's Fees and Expenses..............................................     40,000
Accounting Fees and Expenses.............................................    240,000
Printing and Engraving Expenses..........................................    240,000
Rating Agency Fees.......................................................  1,100,000
Legal Fees and Expenses..................................................    500,000
Miscellaneous............................................................    300,000
  Total.................................................................. $3,026,061

ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.                             

  Subsection (a) of Section 145 of the General Corporation Law of Delaware
empowers a corporation to indemnify any person who was or is a party or is      
threatened to be made a party to any threatened, pending or completed action,   
suit or proceeding, whether civil, criminal, administrative or investigative    
(other than an action by or in the right of the corporation) by reason of the   
fact that he is or was a director, employee or agent of the corporation or is or
was serving at the request of the corporation as a director, officer, employee  
or agent of another corporation, partnership, joint venture, trust or other     
enterprise, against expenses (including attorneys' fees), judgments, fines and  
amounts paid in settlement actually and reasonably incurred by him in connection
with such action, suit or proceeding if he acted in good faith and in a manner  
he reasonably believed to be in or not opposed to the best interests of the     
corporation, and, with respect to any criminal action or proceeding, had no     
cause to believe his conduct was unlawful.                                      

Subsection (b) of Section 145 empowers a corporation to indemnify any 
person who was or is a party or is threatened to be made a party to any         
threatened, pending or completed action or suit by or in the right of the       
corporation to procure a judgment in its favor by reason of the fact that such  
person acted in any of the capacities set forth above, against expense          
(including attorneys' fees) actually and reasonably incurred by him in          
connection with the defense or settlement of such action or suit if he acted in 
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the corporation and except that no indemnification may be made
in respect to any claim, issue or matter as to which such person shall have been
adjudged to be liable to the corporation unless and only to the extent that the 
Court of Chancery or the court in which such action or suit was brought shall   
determine that despite the adjudication of liability such person is fairly and  
reasonably entitled to indemnity for such expenses which the court shall deem   
proper.                                                                         

Section 145 further provides that to the extent a director, officer,  
employee or agent of a corporation has been successful in the defense of any    
action, suit or proceeding referred to in subsections (a) and (b) or in the     
defense of any claim, issue or matter therein, he shall be indemnified against  
expenses (including attorneys' fees) actually and reasonably incurred by him in 
connection therewith; that indemnification or advancement of expenses provided  
for by Section 145 shall not be deemed exclusive of any other rights to which   
the indemnified party may be entitled; and empowers the corporation to purchase 
and maintain insurance on behalf of a director, officer, employee or agent of   
the corporation against any liability asserted against him or incurred by him in
any such capacity or arising out of his status as such whether or not the       
corporation would have the power to indemnify him against such liabilities under
Section 145.                                                                    

  The By-Laws of the Registrant provide, in effect, that to the extent and
under the circumstances permitted by subsections (a) and (b) of Section 145 of  
the General Corporation Law of the State of Delaware, the Registrant (i) shall  
indemnify and hold harmless each person who was or is a party or is             

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threatened to be made a party to any action, suit or proceeding described in    
subsections (a) and (b) by reason of the fact that he is or was a director or   
officer, or his testator or intestate is or was a director or officer of the    
Registrant, against expenses, judgments, fines and amounts paid in settlement,  
and (ii) shall indemnify and hold harmless each person who was or is a party or 
is threatened to be made a party to any such action, suit or proceeding if such 
person is or was serving at the request of the Registrant as a director,        
officer, employee or agent of another corporation, partnership, joint venture,  
trust or other enterprise.                                                      

     There is directors' and officers' liability insurance presently outstanding
which insures directors and officers of BankAmerica Corporation and certain of  
its subsidiaries, including the Registrant. The policies cover loss for which   
BankAmerica Corporation or any of such subsidiaries shall be required or        
permitted by law to indemnify directors and officers and which result from      
claims made against such directors or officers based upon the commission of     
wrongful acts in the performance of their duties. The policies also cover losses
which the directors or officers must pay as the result of claims brought against
them based upon the commission of wrongful acts in the performance of their     
duties and for which they are not indemnified by BankAmerica Corporation or any 
of such subsidiaries. The losses covered by the policies are subject to certain 
exclusions and do not include fines or penalties imposed by law or other matters
uninsurable under the law. The policies contain certain provisions regarding    
deductibles.                                                                    

The Pooling and Servicing Agreements will provide that no director,   
officer, employee or agent of the Registrant is liable to the Trust Fund or the 
Certificateholders, except for such person's own willful misfeasance, bad faith,
gross negligence in the performance of duties or reckless disregard of          
obligations and duties. The Pooling and Servicing Agreements will further       
provide that, with the exceptions stated above, a director, officer, employee or
agent of the Registrant is entitled to be indemnified against any loss,         
liability or expense incurred in connection with legal action relating to such  
Pooling and Servicing Agreements and related Certificates other than such       
expenses related to particular Mortgage Loans.                                  

     Any underwriters who execute an Underwriting Agreement in the form filed as
Exhibit 1.1 to this Registration Statement will agree to indemnify the          
Registrant's directors and its officers who signed this Registration Statement  
against certain liabilities which might arise under the Securities Act of 1933  
from certain information furnished to the Registrant by or on behalf of such    
indemnifying party.                                                             

ITEM 16.  EXHIBITS.                                                             

                                                        [Enlarge/Download Table]

EXHIBIT                                                                                    
NUMBER                                 DESCRIPTION OF EXHIBIT                              
------   ----------------------------------------------------------------------------------
                                                                                           
  1.1    Form of Underwriting Agreement. (incorporated by reference to Exhibit 1.1 to      
         Registrant's Registration Statement on Form S-3 (Registration No. 333-05201)).    
  4.1    Form of Pooling and Servicing Agreement (incorporated by reference to Exhibit 4.1 
         to Registrant's Registration Statement on Form S-3 (Registration No. 333-05201)). 
  5.1    Opinion of Orrick, Herrington & Sutcliffe LLP as to the legality of the           
         Certificates.*                                                                    
  8.1    Opinion of Orrick, Herrington & Sutcliffe LLP as to certain tax matters.*         
 23.1    Consents of Orrick, Herrington & Sutcliffe LLP (included in Exhibits 5.1 and 8.1  
         hereto).*                                                                         
 24.1    Powers of Attorney executed in connection with Registrant's                       
         Registration Statement on Form S-3 (Registration No. 333-34225).*                 
 24.2    Powers of Attorney executed in connection with Post-Effective                     
         Amendment No. 1 to Registrant's Registration Statement on Form S-3                
         (Registration No. 333-34225).                                                     

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

* Previously filed.                                                             

ITEM 17.  UNDERTAKINGS.                                                         

A.  Undertakings Pursuant to Rule 415.                                      

The undersigned Registrant hereby undertakes:                         

     (1) To file, during any period in which offers or sales are being
 made, a post-effective amendment to this Registration Statement: (i) to
   include any prospectus required by Section 10(a)(3) of the Securities Act
of 1933; (ii) to reflect in the prospectus any facts or events arising
    after the effective date of the Registration Statement (or the most recent
    post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the    
    Registration Statement; and (iii) to include any material information with
respect to the plan of distribution not previously                    

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disclosed in the Registration Statement or any material change to such
information in the Registration Statement; provided, however, that the
     undertakings set forth in clauses (i) and (ii) above shall not apply if the
    information required to be included in a post-effective amendment by those
   clauses is contained in periodic reports filed by the Registrant pursuant
    to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that
are incorporated by reference in this Registration Statement.         

    (2) That, for the purpose of determining any liability under the
    Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered 
   therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.                         

          (3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the     
termination of the offering.                                          

B. Undertaking in respect of indemnification.                               

     Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the  
Registrant pursuant to the provisions referred to in Item 15 above, or          
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as        
expressed in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the     
Registrant of expenses incurred or paid by a director, officer or controlling   
person of the Registrant in the successful defense of any action, suit or       
proceeding) is asserted by such director, officer or controlling person in      
connection with the securities being registered, the Registrant will, unless in 
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such         
indemnification by it is against public policy as expressed in the Act and will 
be governed by the final adjudication of such issue.                            

C. Undertaking pursuant to Item 512(b).                                     

The undersigned Registrant hereby undertakes that, for purposes of    
determining any liability under the Securities Act of 1933, each filing of the  
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the    
Securities Exchange Act of 1934 that is incorporated by reference in the        
Registration Statement shall be deemed to be a new registration statement       
relating to the securities offered herein, and the offering of such securities  
at that time shall be deemed to be the initial bona fide offering thereof.      

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SIGNATURES

     PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT,
BA MORTGAGE SECURITIES, INC., A CORPORATION ORGANIZED AND EXISTING UNDER THE    
LAWS OF DELAWARE, CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT   
MEETS ALL OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS   
POST-EFFECTIVE AMENDMENT NO. 1 TO THIS REGISTRATION STATEMENT TO BE SIGNED ON   
ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY AND COUNTY
OF SAN FRANCISCO, STATE OF CALIFORNIA, ON THE 30TH DAY OF JANUARY, 1998.        

                                BA MORTGAGE SECURITIES, INC.

                                 By     /s/ ARTHUR D. RINGWALD
                                            ------------------------------------
                                           Arthur D. Ringwald,
                                            Chairman of the Board, Chief
                                             Executive Officer
                                            and President (Principal Executive
                                            Officer)
                                            and Director

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS      
POST-EFFECTIVE AMENDMENT NO. 1 TO THIS REGISTRATION STATEMENT HAS BEEN SIGNED   
BELOW BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE DATE INDICATED.     

                                                        [Enlarge/Download Table]

                   SIGNATURE                                       TITLE                   
-----------------------------------------------  ------------------------------------------
                                                                                           
            /s/ ARTHUR D. RINGWALD               Chairman of the Board, Chief Executive    
-----------------------------------------------    Officer and President (Principal        
              Arthur D. Ringwald                   Executive Officer) and Director         

              JOHN D. KELLEGHAN*                                                           
-----------------------------------------------  Chief Financial Officer (Principal        
               John D. Kelleghan                   Financial and Accounting Officer)       

Directors:                                                                                 
          Jacquelin Legorreta Erdman*                                                      
                James G. Jones*                                                            
                Claus H. Lund*                                                             
               Shaun M. Maguire*                                                           

*By: /s/ ANDREA B. GOLDENBERG                                                              
     ------------------------------------------                                            
            Andrea B. Goldenberg                                                           
            Attorney-in-Fact                                                               

Dated: January 30, 1998                                                         

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INDEX TO EXHIBITS 

                                                                [Download Table]

EXHIBIT                                                                             
NUMBER                            DESCRIPTION OF EXHIBIT                            
------   -------------------------------------------------------------------------  
                                                                                    
  1.1    Form of Underwriting Agreement (incorporated by reference to Exhibit 1.1   
         to Registrant's Registration Statement on Form S-3 (Registration No.       
         333-05201)).                                                               
  4.1    Form of Pooling and Servicing Agreement (incorporated by reference to      
         Exhibit 4.1 to Registrant's Registration Statement on Form S-3             
         (Registration No. 333-05201)).                                             
  5.1    Opinion of Orrick, Herrington & Sutcliffe LLP as to the legality of the    
         Certificates.*                                                             
  8.1    Opinion of Orrick, Herrington & Sutcliffe LLP as to certain tax matters.*  
 23.1    Consents of Orrick, Herrington & Sutcliffe LLP (included in Exhibits 5.1   
         and 8.1 hereto).*                                                          
 24.1    Powers of Attorney executed in connection with Registrant's                
         Registration Statement on Form S-3 (Registration No. 333-34225).*          
 24.2    Powers of Attorney executed in connection with Post-Effective              
         Amendment No. 1 to Registrant's Registration Statement on Form S-3         
         (Registration No. 333-34225).                                              

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

* Previously filed.                                                             

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘POS AM’ Filing		Date		First		Last			Other Filings
		12/31/98		145					10-K
Filed on:		2/12/98		1
		1/30/98		160
		1/1/98		70		76
		9/30/97		71		77			8-K
		12/24/96		140
		8/23/96		70
		5/6/96		70
		1/4/95		140
		4/4/94		120
		2/10/92		149
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