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pdfGINNIE MAE MULTICLASS SECURITIES PROGRAM
Government National Mortgage Association
[
GINNIE MAE®
MULTICLASS SECURITIES GUIDE
Part V:
Ginnie Mae Multiclass Securities Transactions:
Callable Securities
April 1, 2008
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
MULTICLASS SECURITIES GUIDE
(April 1, 2008 Edition)
Page
PART I: GINNIE MAE MULTICLASS SECURITIES TRANSACTIONS:
GUIDELINES AND SELECTED TRANSACTION DOCUMENTS
A.
INTRODUCTION TO THE GINNIE MAE MULTICLASS SECURITIES PROGRAM .......................... I-1
B.
TRANSACTION GUIDELINES FOR THE GINNIE MAE MULTICLASS SECURITIES PROGRAM
C.
1.
General Overview .......................................................................................................................... I-2
2.
Transaction Information Web-Based Application - e-Access........................................................ I-3
3.
Ginnie Mae Multiclass Securities Program Conventions............................................................... I-4
4.
Ginnie Mae Multiclass Securities Transaction Participants........................................................... I-5
5.
Trust Counsel’s Responsibilities.................................................................................................... I-6
6.
Post-Closing Matters with respect to Ginnie Mae Multiclass Securities Transactions .................. I-7
GINNIE MAE REMIC AND MX TRANSACTION DOCUMENTS
1.
Form of Transaction Initiation Letter (with attached Financial Advisor Checklist for
Sponsor) for REMIC and MX Transactions .................................................................................. I-8
2.
Sponsor Agreement for REMIC and MX Transactions
a.
Form of Sponsor Agreement for REMIC and MX Transactions ..................................... I-9
b.
Standard Sponsor Provisions for REMIC and MX Transactions (including Supplemental
Statement, Sponsor Certification and Accountants’ Certification) ................................ I-10
3.
Base Offering Circular for Single Family REMIC and MX Transactions ................................... I-11
4.
Form of Offering Circular Supplement for Single Family REMIC and MX Transactions .......... I-12
5.
Form of Transfer Affidavit for REMIC Transactions .................................................................. I-13
6.
Form of Guaranty Agreement for Single Family REMIC and MX Transactions ........................ I-14
7.
Accountants’ Agreed-Upon Procedures Reports for Single Family REMIC and MX
Transactions
a.
Form of Accountants’ Agreed-Upon Procedures Report for Single Family REMIC and
MX transactions concerning the Offering Circular........................................................ I-15
i
b.
8.
E.
Accountants’ Agreed-Upon Procedures Report for Single Family REMIC and MX
Transactions as of Closing Date .................................................................................... I-16
Form of Closing Flow of Funds Instruction Letter for REMIC and MX Transactions................ I-17
GLOSSARY............................................................................................................................................... I-18
PART II: GINNIE MAE MULTICLASS SECURITIES TRANSACTIONS:
ADDITIONAL SELECTED TRANSACTION DOCUMENTS
A.
INTRODUCTION.......................................................................................................................................II-1
B.
CLOSING CHECKLIST AND TABLE OF CONTENTS FOR REMIC TRANSACTIONS ....................II-2
C.
TRUST AGREEMENTS FOR REMIC TRANSACTIONS
D.
E.
F.
1.
Form of Trust Agreement for REMIC Trusts (including Form of Waiver Agreement)................II-3
2.
REMIC Standard Trust Provisions................................................................................................II-4
3.
Form of MX Trust Agreement ......................................................................................................II-5
4.
MX Standard Trust Provisions......................................................................................................II-6
TRANSFER OF GINNIE MAE CERTIFICATES AND CREATION OF REMIC SECURITIES
1.
Form of Trustee’s Receipt and Safekeeping Agreement for REMIC Transactions ......................II-7
2.
Form of Issuance Statement for REMIC and MX Transactions ...................................................II-8
LEGAL OPINIONS for REMIC and MX Transactions
1.
Form of Transaction Opinion of Trust Counsel for REMIC and MX Transactions......................II-9
2.
Form of Opinion of Sponsor for REMIC and MX Transactions.................................................II-10
3.
Form of Tax Opinions of Trust Counsel for REMIC and MX Transactions
a.
Single REMIC ..............................................................................................................II-11
b.
Double REMIC: One Residual Security .......................................................................II-12
c.
Double REMIC: Two Residual Securities ....................................................................II-13
d.
MX (Grantor) Trust ......................................................................................................II-14
4.
Form of Opinion of Trustee’s Counsel for REMIC and MX Transactions.................................II-15
5.
Opinion of HUD General Counsel..............................................................................................II-16
GINNIE MAE REMIC TRUST ADMINISTRATION AND TAX REPORTING...................................II-17
ii
PART III: GINNIE MAE PLATINUM SECURITIES TRANSACTIONS
PART IV: GINNIE MAE MULTIFAMILY TRANSACTIONS:
MULTIFAMILY TRANSACTION DOCUMENTS*
A.
GENERAL OVERVIEW: MULTIFAMILY TRANSACTIONS ............................................................. IV-1
B.
GINNIE MAE MULTIFAMILY TRANSACTION DOCUMENTS........................................................ IV-2
1.
Form of Offering Circular Supplement for Multifamily Transactions........................................ IV-3
4.
Multifamily Base Offering Circular............................................................................................ IV-4
5.
Form of Guaranty Agreement for Multifamily Transactions ...................................................... IV-5
6.
Accountants’ Agreed-Upon Procedures Reports for Multifamily Transactions
a.
Form of Accountants’ Agreed-Upon Procedures Report concerning the Offering Circular
for Multifamily Transactions ...................................................................................................... IV-6
b.
Agreed-Upon Procedures Report as of Closing Date for Multifamily Transactions .... IV-7
* For multifamily transactions, additional transaction documents found in Parts I and II of the Multiclass
Securities Guide must be delivered, including the Transaction Initiation Letter, Sponsor Agreement, Transfer
Affidavit, Closing Flow of Funds Instruction Letter, Supplemental Statement, if applicable, REMIC Trust
Agreement, MX Trust Agreement, if applicable, Trustee’s Receipt and Safekeeping Agreement and the Issuance
Statement. In addition, opinions of counsel found in Part II of the Multiclass Securities Guide must be delivered,
including the Transaction Opinion, Sponsor Opinion, relevant Tax Opinions, Trustee’s Opinion and Opinion of
HUD General Counsel.
PART V: GINNIE MAE MULTICLASS SECURITIES TRANSACTIONS:
CALLABLE SECURITIES
A.
GENERAL OVERVIEW: CALLABLE TRANSACTIONS .....................................................................V-1
B.
GINNIE MAE CALLABLE TRANSACTION DOCUMENTS
1.
Form of Offering Circular for Callable Securities ........................................................................V-2
2.
Form of Trust Agreement for Callable Trusts...............................................................................V-3
3.
Standard Trust Provisions for Callable Trusts ..............................................................................V-4
4.
Form of Sponsor Agreement for Callable Trusts ..........................................................................V-5
5.
Standard Sponsor Provisions for Callable Trusts..........................................................................V-6
6.
Form of Ginnie Mae Callable Securities Guaranty Agreement ....................................................V-7
7.
Form of Transaction Initiation Letter for Callable Securities .......................................................V-8
iii
8.
Form of Accountant’s Agreed-Upon Procedures Report Concerning the Offering Circular
for Callable Securities...................................................................................................................V-9
9.
Form of Trustee’s Receipt and Safekeeping Agreement for Callable Securities ........................V-10
10.
Form of Issuance Statement for Callable Securities ...................................................................V-11
11.
Form of Transaction Opinion of Trust Counsel for Callable Securities......................................V-12
12.
Form of Tax Opinion of Trust Counsel for Callable Securities ..................................................V-13
13.
Form of Opinion of Sponsor for Callable Securities...................................................................V-14
14.
Form of Opinion of Trustee’s Counsel for Callable Securities ...................................................V-15
15.
Form of Accountants’ Agreed-Upon Procedures Report as of the Closing Date for
Callable Securities.......................................................................................................................V-16
16.
Form of Closing Flow of Funds Instruction Letter for Callable Securities.................................V-17
17.
Form of Closing Checklist and Table of Contents for Callable Securities..................................V-18
PART VI: GINNIE MAE MULTICLASS SECURITIES TRANSACTIONS:
STRIPPED MORTGAGE-BACKED SECURITIES (“SMBS”)
A.
GENERAL OVERVIEW: SMBS TRANSACTIONS ............................................................................. VI-1
B.
GINNIE MAE SMBS TRANSACTION DOCUMENTS
1.
Pricing Checklist for SMBS Transactions .................................................................................. VI-2
2.
Standard Sponsor Provisions for SMBS Transactions ................................................................ VI-3
3.
Form of Sponsor Agreement for SMBS Transactions ................................................................ VI-4
4.
Base Offering Circular for SMBS Transactions.......................................................................... VI-5
5.
Form of Offering Circular Supplement for SMBS Transactions ................................................ VI-6
6.
Form of Accountants’ Agreed-Upon Procedures Report concerning the Offering Circular
for SMBS Transactions............................................................................................................................VI-7
7.
Form of Guaranty Agreement for SMBS Transactions............................................................... VI-8
8.
Form of Issuance Statement for SMBS Transactions.................................................................. VI-9
9.
Form of Trustee’s Receipt and Safekeeping Agreement for SMBS Transactions .................... VI-10
10.
Form of Closing Flow of Funds Letter for SMBS Transactions ............................................... VI-11
11.
Form of Trust Agreement for SMBS Transactions ................................................................... VI-12
12.
Standard Trust Provisions for Ginnie Mae SMBS Trusts ......................................................... VI-13
iv
13.
Form of Form of Transaction Opinion of Trust Counsel for SMBS Transactions.................... VI-14
14.
Form of Opinion of Sponsor for SMBS Transactions............................................................... VI-15
15.
Form of Tax Opinion of Trust Counsel for SMBS Transactions .............................................. VI-16
16.
Form of Opinion of Trustee’s Counsel for SMBS Transactions ............................................... VI-17
17.
Form of Accountants’ Agreed-Upon Procedures Report as of Closing Date for SMBS
Transactions .............................................................................................................................. VI-18
v
GENERAL OVERVIEW: CALLABLE TRANSACTIONS
INTRODUCTORY STATEMENT
Ginnie Mae provides for the guarantee of Callable Securities under the Ginnie Mae
Multiclass Securities Program. The requirements of the Ginnie Mae Multiclass Securities
Program are set forth in the Ginnie Mae Multiclass Securities Guide (the “Guide”), which
consists of six parts. Refer to Part I of the Guide for an introduction to, and transaction
guidelines for, the Ginnie Mae Multiclass Securities Program generally. This Part V of the
Guide relates to the issuance of a Callable Series and provides for modifications of the
transaction guidelines for such issuance. Capitalized terms that are used but not defined herein
have the meanings ascribed thereto in the Glossary contained in Part I of the Guide.
The Standard Trust Provisions for Callable Trusts and Standard Sponsor Provisions for
Callable Trusts are contained in this Part V. For issuances of Callable Securities, the related
transaction parties are required to use the forms of documents specifically related to callable
transactions contained in this Part V. Any changes to any transaction documents will require
prior approval by Ginnie Mae and Ginnie Mae’s Legal Advisors.
This Part V of the Guide also provides information regarding associated fees and
important Ginnie Mae policy regarding Callable Trusts and the inclusion of Callable Class
Securities in Ginnie Mae REMIC Trusts.
CALLABLE TRUSTS
Each Callable Series of Securities will consist of one or more paired Classes: a “Call
Class” and a “Callable Class.” The Securities will evidence interests in separate trusts (each, a
“Callable Trust”). As described in the Offering Circular, the assets of each Callable Trust will
consist of Ginnie Mae Platinum Certificates, Ginnie Mae MBS Certificates or Underlying
Certificates that have not been designated as Increased Minimum Denomination Classes
(“Permitted Underlying Certificates”). The assets of any Callable Trust may be subdivided into
separate groups, each of which may relate to a separate pair of Call and Callable Class Securities.
Each Series of Call and Callable Class Securities will be issued pursuant to a separate
Callable Trust Agreement which will incorporate the terms of the Standard Trust Provisions for
Callable Trusts. As further described therein, the Callable Class Securities will be entitled to all
distributions on the related Ginnie Mae Platinum Certificates, Ginnie Mae MBS Certificates or
Permitted Underlying Certificates (other than any amounts allocable to the payment of Trustees
Fees). The Call Class Securities will evidence the right to direct the Trustee to redeem the
related Callable Class Securities on the terms provided therein. Upon any such redemption, the
Holder of the Call Class Securities will be entitled to receive from the Callable Trust the related
Ginnie Mae Platinum Certificates, Ginnie Mae MBS Certificates or Permitted Underlying
Certificates in exchange for the Call Class and the payment of the Redemption Amount and
Exchange Fee. The Call and Callable Class Securities and the terms and conditions of each
redemption and exchange are described in detail in the Offering Circular for Callable Trusts in
this Part V.
V-1-1
The Callable Class Securities will be guaranteed as to timely distribution of principal and
interest by Ginnie Mae. Additionally, Ginnie Mae will guarantee to the Holder of each Call
Class Security all amounts in respect of principal and interest, if any, due such Security on the
related Redemption Date which represents distributions of principal and interest as provided in
the related Trust Agreement.
Callable Class Securities constitute “eligible collateral” for purposes of Ginnie Mae’s
Multiclass regulations, and as such may be conveyed by Sponsors to Ginnie Mae REMIC Trusts.
FEES AND EXPENSES
1.
Trustee’s Fees. For all “stand-alone” Callable Trusts (i.e., if the Callable Class is
not deposited in a Ginnie Mae REMIC Trust concurrently upon issuance), provision for the
payment of Trustee’s Fees shall be made by the conveyance to a Callable Trust of Ginnie Mae
Platinum Certificates, Ginnie Mae MBS Certificates or Permitted Underlying Certificates with a
principal balance in excess of the Class Principal Balance of the related Callable Class. Under
such arrangement, the Trustee will be entitled to a proportionate share of monthly payments of
principal and interest on the Trust Assets. Upon redemption of the related Callable Class, the
Trust Assets, including the excess portion, will be conveyed to the Holder of the Call Class.
If a Callable Class is conveyed to a Ginnie Mae REMIC Trust upon issuance, the Sponsor
may utilize the above arrangement exclusively or in combination with a similar arrangement at
the REMIC level. Please note, however, that in cases in which multiple Callable Classes are
issued in a Series (i.e., the Callable Trust is divided into Trust Asset Groups) and are not each
conveyed to a Ginnie Mae REMIC Trust, provision for the payment of Trustee’s Fees in respect
of each “stand-alone” Callable Class (i.e., those not conveyed to a Ginnie Mae REMIC Trust)
must be made at the Callable Trust level as described in the preceding paragraph.
2.
Exchange Fee. Upon any redemption exercised by the Holder of the Call Class,
an Exchange Fee will be payable to the Trustee no later than 11:00 a.m. (Eastern time) on the
third business day preceding the last day of the month preceding the month of the proposed
redemption. The “Exchange Fee” for any redemption will equal the greater of (i) $5,000 or
(ii) the lesser of $15,000 or 1/32 of 1% of the outstanding principal balance of the applicable
Callable Class.
3.
Guaranty Fee. Ginnie Mae will be entitled to a Guaranty Fee payable at the
settlement (i.e., the Closing Date) of each Callable Trust. The Guaranty Fee will equal the
greater of (x) the sum of 0.02% of the first $200,000,000 of Original Class Principal Balance of
the related Callable Class (or Classes) and 0.01% for any additional amounts; and (y) $40,000.
GINNIE MAE POLICIES REGARDING THE SECURITIES
In connection with offerings of Ginnie Mae Callable Securities, Ginnie Mae has
determined that:
• No Callable Class may be subject to redemption until the twelfth Distribution
Date for such Class unless Ginnie Mae approval has been obtained. Ginnie Mae
approval will not be given for any Callable Class to be subject to redemption
V-1-2
before the sixth Distribution Date for such Class. Any Callable Class Security
that is redeemable before the twelfth Distribution Date will be deemed an
Increased Minimum Denomination Class and, thus, will be required to be issued
in a minimum denomination that results in a minimum purchase price of
$100,000;
• No Callable Class may be redeemed unless the Trustee has determined, in the
manner provided in the Callable Trust Agreement, that the market value of the
Ginnie Mae Platinum Certificates, Ginnie Mae MBS Certificates or Underlying
Certificates included in the Callable Trust exceed the outstanding principal
balance of such Callable Class.
• In the event a Callable Class is included in a Ginnie Mae REMIC Trust, the entity
serving as Trustee for the Callable Trust must also serve in such capacity for the
REMIC Trust; and
• In the event a Callable Class is included in a Ginnie Mae REMIC Trust (or a Trust
Asset Group thereof), the Ginnie Mae REMIC Trust (or Trust Asset Group) may
not issue a Principal Only Security with an initial Class Principal Balance in
excess of 10% of the Class Principal Balance of the Callable Class included in
such Callable Trust (or Trust Asset Group).
• In cases in which a Callable Class is being included in a Ginnie Mae REMIC
Trust and the related Call Class is being sold to an investor by the Sponsor,
additional copies of the related Offering Circular must be distributed to investors
in the Call Class.
V-1-3
FORM OF OFFERING CIRCULAR FOR CALLABLE SECURITIES
V-2-0
Offering Circular
$[
]
Government National Mortgage Association
GINNIE MAE®
Guaranteed Callable Pass-Through Securities
Ginnie Mae Callable Trust 20[ ] -C[ ]
The Securities
The Trust will issue the Classes of
Securities listed on the front cover of
this offering circular supplement.
The Ginnie Mae Guaranty
Ginne Mae will guarantee the timely
payment of principal and interest on
the securities. The Ginnie Mae
Guaranty is backed by the full faith
and credit of the United States of
America.
The Trust and its Assets
Class of
REMIC Securities
[Security Group 1]
A1.....................................
B1.....................................
.....................................….
[Security Group 2]
..........................................
.....................................….
.....................................….
[Security Group 3]
..........................................
..........................................
..........................................
Residual
[R][RR]........................…...
(1)
(2)
(3)
[(4)
Original
Principal
Balance(1)
Interest
Rate
Class
Type(2)
Initial
Redemptio
n Date
CUSIP
Number
Final
Distribution
Date(3)
[(4)] [Callable]
[(2)]
[Call]
[(2)]
0
0.0
NPR
NPR
Subject to increase as described under “Increase in Size” in this Supplement.
The Call Class Securities are not issued with principal balances and are not entitled to payments of any interest.
See “Yield, Maturity and Prepayment Considerations — Final Distribution Date” in this Offering Circular.
See “Terms Sheet - Interest Rates” in this Supplement.]
The Trust will own [(1)] [Ginnie Mae
Platinum Certificates] [, (2)] Ginnie
Mae Certificates] [and] [(3)] [a]
[certain
previously
issued
certificate[s]].
The securities may not be suitable investments for you. You should consider carefully the
risks of investing in them.
See "Risk Factors" beginning on page [ ] which highlights some of these risks.
The Sponsor will offer the securities from time to time in negotiated transactions at varying prices. We expect the
closing date to be [
], 20[ ] .
You should read the Base Offering Circular as well as this Supplement.
The securities are exempt from registration under the Securities Act of 1933 and are “exempted securities” under
the Securities Exchange Act of 1934.
[SPONSOR]
The date of this Offering Circular Supplement is [
], 20[ ].
V-2-1
AVAILABLE INFORMATION
You should purchase the securities only if you have read and understood:
•
•
•
this Offering Circular[;]
[[in the case of the Group [ ] securities,] the Base Offering Circular [for Ginnie Mae
Platinum Certificates (the “Base Offering Circular”) and the Offering Circular
Supplement thereto applicable to the underlying Ginnie Mae Platinum Certificates (the
“Offering Circular Supplement,” and together with the Base Offering Circular, the
“Ginnie Mae Platinum Offering Circular”)] [; and]
[[in the case of the Group [ ] securities,] [each] [the] disclosure document relating to
the underlying certificate[s] (the “Underlying Certificate Disclosure Document[s]”)
[attached to this Supplement as Exhibit [ ]].]
The [Base Offering Circular] [Ginnie Mae Platinum Offering Circular] [and] [the
Underlying Certificate Disclosure Document[s]]* [is] [are] available on Ginnie Mae’s website
located at http://www.ginniemae.gov.
If you do not have access to the internet, call The Bank of New York, which will act as
information agent for the Trust, at (800) 234-GNMA, to order copies of the Ginnie Mae
Platinum Offering Circular.
[Please consult the standard abbreviations of Class Types included in the Base Offering
Circular as Appendix I and the Glossary included in the Base Offering Circular as Appendix
II for definitions of capitalized terms.]
TABLE OF CONTENTS
Page
Terms Sheet ................................................. 3
Risk Factors ................................................. 5
The Trust [Assets] [MBS] ...........................8
Ginnie Mae Guaranty ................................ 10
Description of the Securities .....................10
Yield, Maturity and Prepayment
Considerations.......................................14
Certain Federal Income Tax
Consequences........................................ 21
ERISA Matters ..........................................23
Legal Investment Considerations .............. 24
Plan of Distribution ................................... 24
Page
Increase in Size.......................................... 24
Legal Matters............................................. 24
[Exhibit A: Underlying Certificate[s]... A-1]
[Exhibit B: Cover Page[s][,] [and]
Terms Sheet[s] [and Schedule I]
[,] [if applicable,] from
Underlying Certificate
Disclosure Document[s] .... B-1]∗
∗ Note to Trust Counsel: This language should be included for
underlying certificates which have been issued at least one
month prior to the issuance of the Callable Securities.
2
V-2-2
TERMS SHEET
This terms sheet contains selected information for quick reference only. You should read
this Offering Circular, particularly “Risk Factors,” and each of the other documents listed
under “Available Information.”
Sponsor: [
]
Trustee: [
]
Tax Administrator: The Trustee
Closing Date: [
], 20[ ]
Distribution Date[s]: [For the Group [ ] Securities,][The 16th day of each month or, if the
16th day is not a Business Day, the first Business Day thereafter, commencing in [
] 20[
].] [For the Group [ ] Securities,][The 20th day of each month or, if the 20th day is not a
Business Day, the first Business Day thereafter, commencing in
20[ ].]
Redemption and Exchange: The Holder of [the] [a] Call Class Security will have the right
to direct the Trustee to redeem the [related] Callable Class Securities, in whole but not in part,
on any Distribution Date (the “Redemption Date”) on or after the Initial Redemption Date.
Only one Holder is permitted to hold [the] [a] Call Class Security at any time. Upon
redemption of [the] [a] Callable Class, the amount payable to the Holders of such Class will
equal the Class Principal Balance thereof plus accrued and unpaid interest thereon to the
Redemption Date, calculated as set forth under “Description of the Securities—Redemption
and Exchange” in this Offering Circular.
Initial Redemption Date: The Distribution Date occurring in _____________, 20[ ].
Trust Assets:
[Trust Asset
Group]
1
2
3
Trust Asset Type[1]
Ginnie Mae [I]
Ginnie Mae [II]
[Underlying
Certificate[s]]
Certificate
Rate
Original Term
To Maturity
(in years)
%
%
[30]
[15]
(2)
(2)
[1
With respect to Trust Asset Groups consisting of Ginnie Mae Platinum Certificates, the Trust Asset Type refers to the
Ginnie Mae MBS Certificates underlying the Ginnie Mae Platinum Certificates].
[2
Certain information regarding the underlying certificate[s] is set forth in Exhibit A to this Offering Circular.]
[Characteristics of the Mortgage Loans Underlying the Trust Assets: See Exhibit A to
this Offering Circular for certain information regarding the characteristics of the Mortgage
Loans included in the Underlying Trust.]
[Security Groups: This series of Securities consists of multiple Security Groups (each, a
“Group”), as shown on the inside front cover of this Offering Circular. Payments on each
Security Group will be based solely on payments on the Trust Asset Group with the same
numerical designation.]
3
V-2-3
Assumed Characteristics of the Mortgage Loans Underlying the [Group [ ]] Trust
Assets1:
Principal
Balance2
Weighted Average
Remaining Term to
Maturity (in
months)
Weighted Average
Loan Age
(in months)
[Weighted
Average]
Mortgage Rate[3]
$
Group 1 Trust Assets
$
%
%
%
%
$
Group 2 Trust Assets
$
$
1
2
[3
As of [
], 20[ ].
[Does not include] [Includes] Trust Assets that will be added to pay the Trustee Fee.
The Mortgage Loans underlying the [Group [ ]] Trust Assets may bear interest at rates ranging from 0.25%
to 1.50% per annum above the related Certificate Rate.]
The actual remaining terms to maturity [and loan ages] [, loan ages and [, in the case of the
Group [ ] Trust Assets] Mortgage Rates] of many of the Mortgage Loans will differ from the
weighted averages shown above, perhaps significantly. See “The Trust Assets” in this
Offering Circular. [See Exhibit A to this Offering Circular for certain information regarding
the characteristics of the Mortgage Loans included in the [related] Underlying Trust[s].]
Issuance of Securities: The Callable Class Securities will initially be issued in book-entry
form through the book-entry system of the U.S. Federal Reserve Banks (the “Fed Wire Book
Entry System”). The Call Class Securities will be issued in fully registered, certificated form.
See “Description of the Securities – Form of Securities” in this Supplement.
Increased Minimum Denomination Classes: [None] [Each] [[The] Callable Class that is
redeemable within less than twelve months.] See “Description of the Securities — Form of
Securities” in this Offering Circular.
Interest Rates: The Callable Class Securities will bear interest at the per annum Interest Rate
shown on the front cover of this Offering Circular. The Call Class Securities are not entitled
to any interest, and no amounts will be distributable thereon, except as described in this
Offering Circular.
Allocation of Principal: On each Distribution Date [for a Security Group], [a percentage of
the Principal Distribution Amount will be applied to the Trustee Fee, and the remainder of] the
Principal Distribution Amount [(the “Adjusted Principal Distribution Amount”)] will be
distributed to the related Callable Class Securities until the Class Principal Balance thereof has
been reduced to zero. The Call Class Securities are not issued with a Class Principal Balance, and
no amounts will be distributable thereon, except as described under “Description of the Securities—
Redemption and Exchange” in this Offering Circular.
4
V-2-4
RISK FACTORS
You should purchase securities only if you understand and are able to bear the
associated risks. The risks applicable to your investment depend on the principal and interest
type of your securities. This section highlights certain of these risks.
The rate of principal payments on the
underlying mortgage loans will affect
the rate of principal payments on your
securities. The rate at which you will
receive principal payments will depend
largely on the rate of principal payments,
including prepayments, on the mortgage
loans underlying the related trust Assets.
We expect the rate of principal payments
on the underlying mortgage loans to vary.
Borrowers generally may prepay their
mortgage loans at any time without
penalty.
•
In addition, if your securities are purchased
at a significant premium, you could lose
money on your investment if prepayments
occur at a rapid rate.
Under certain circumstances, a Ginnie
Mae issuer has the right to repurchase a
defaulted mortgage loan from the related
pool of mortgage loans underlying a
particular Ginnie Mae MBS Certificate,
the effect of which would be comparable
to a prepayment of such mortgage loan.
At its option and without Ginnie Mae’s
prior consent, a Ginnie Mae issuer may
repurchase any mortgage loan at an
amount equal to par less any amounts
previously advanced by such issuer in
connection with its responsibilities as
servicer of such mortgage loan to the
extent that (i) in the case of a mortgage
loan included in a pool of mortgage loans
underlying a Ginnie Mae MBS Certificate
issued on or before December 1, 2002,
such mortgage loan has been delinquent
for four consecutive months, and at least
one delinquent payment remains uncured
or (ii) in the case of a mortgage loan
included in a pool of mortgage loans
underlying a Ginnie Mae MBS Certificate
issued on or after January 1, 2003, no
payment has been made on such mortgage
loan for three consecutive months. Any
such repurchase will result in prepayment
of the principal balance or reduction in the
notional balance of the securities
Callable class securities are subject to
redemption prior to their final
distribution date.
A callable class
security is subject to redemption on any
distribution date on or after the initial
redemption date. A redemption of callable
class securities is more likely to occur to
the extent that prevailing mortgage interest
rates have declined or the market value of
the [related] trust assets otherwise exceeds
the aggregate principal balance of the
callable class securities. The existence of
redemption risk may diminish significantly
the ability of the holder to sell a callable
class at a premium. The value of a callable
class security, and accordingly the value of
its related call class security, may fluctuate
significantly depending on the prevailing
interest rates.
Rates of principal payments and the
occurrence and timing of any
redemption can reduce your yield. The
yield on your securities probably will be
lower than you expect if:
•
are faster than you expected (or an
early redemption occurs), or
you bought your securities at a
discount and principal payments
are slower than you expected (and a
redemption does not occur).
you bought your securities at a
premium and principal payments
5
V-2-5
certificate[s] [included in trust asset group
[ ]] are support classes that are entitled to
receive principal distributions only if
scheduled payments have been made on
other specified classes of the related
underlying series [(or if specified classes
have been retired)]. Accordingly, the
underlying certificate[s] may receive no
principal distributions for extended periods
of time or may receive principal payments
that vary widely from period to period.]
ultimately backed by such mortgage loan.
No assurances can be given as to the
timing or frequency of such repurchases.
An investment in the securities is subject
to significant reinvestment risk. The rate
of principal payments on your securities is
uncertain. You may be unable to reinvest
the payments on your securities at the
same returns provided by the securities.
Lower prevailing interest rates may result
in an unexpected return of principal. In
that interest rate climate, higher yielding
reinvestment opportunities may be limited.
Conversely, higher prevailing interest rates
may result in slower returns of principal
and you may not be able to take advantage
of
higher
yielding
investment
opportunities. The final payment on your
security may occur much earlier than the
final distribution date.
[As described in the [related] underlying
disclosure document[s], the principal
entitlement of certain [of the]
underlying certificate[s] on any payment
date is calculated on the basis of
schedules; no assurance can be given
that the underlying certificates will
adhere to their schedules.]
[[This supplement contains no information
as to whether [the] [an] underlying
certificate[s] [has] [have] adhered to [any
applicable] principal balance schedules,
whether any related supporting classes
remain outstanding or whether the
underlying certificate[s] otherwise] [has]
[have] performed as originally anticipated.
Additional information as to the
underlying certificate[s] may be obtained
by performing an analysis of current
principal factors of the underlying
certificates in light of applicable
information contained in the [related]
underlying
certificate
disclosure
documents.]]∗]
[The rate of principal payments on the
underlying certificate[s] will directly
affect the rate of principal payments on
the [group [ ]] securities. The underlying
certificate[s] will be sensitive [in varying
degrees] to:
•
•
the rate of payments of principal
(including prepayments) of the
related mortgage loans, and
the priorities for the distribution of
principal among the classes of the
[related] underlying series.
[As described in the [related] underlying
certificate disclosure document[s], [certain
of] the underlying certificate[s] [included
in trust asset group [ ]] are not entitled to
distributions of principal until certain
classes of the related underlying series
have been retired and, accordingly,
distributions of principal of the related
mortgage loans for extended periods may
be applied to the distribution of principal
of those classes of certificates having
priority over the underlying certificate[s].]
[In addition, [certain of] the underlying
The securities may not be a suitable
investment for you. The securities may
not be suitable investments for all
investors, [especially the group [ ]
securities] [and] in particular, call class
∗ Note to Trust Counsel: This language should be
inserted to the extent that the underlying certificates
were issued at least one month prior to the issuance
of the Callable Securities.
6
V-2-6
securities may not be suitable investments
for individual investors.
In addition, although the sponsor intends to
make a market for the purchase and sale of
the securities after their initial issuance, it
has no obligation to do so. There is no
assurance that a secondary market will
develop, that any secondary market will
continue, or that the price at which you can
sell an investment in any class will enable
you to realize a desired yield on that
investment.
The actual characteristics of the
underlying mortgage loans will affect
the weighted average lives and yields of
your securities.
The yield and
prepayment tables in this supplement are
based on assumed characteristics which are
likely to be different from the actual
characteristics. As a result, the yields on
your securities could be lower than you
expected, even if the mortgage loans
prepay at the constant prepayment rates set
forth in the applicable table.
You will bear the market risks of your
investment. The market values of the
classes are likely to fluctuate. These
fluctuations may be significant and could
result in significant losses to you.
It is highly unlikely that the underlying
mortgage loans will prepay at any of the
prepayment rates assumed in this
supplement, or at any constant prepayment
rate.
The secondary markets for mortgagerelated securities have experienced periods
of illiquidity and can be expected to do so
in the future. Illiquidity can have a
severely adverse effect on the prices of
classes that are especially sensitive to
prepayment, redemption, or interest rate
risk or that have been structured to meet
the investment requirements of limited
categories of investors.
You are encouraged to consult advisors
regarding the financial, legal, tax and other
aspects of an investment in the securities.
You should not purchase the securities of
any class unless you understand and are
able to bear the prepayment, yield,
liquidity, market and any redemption risks
associated with that class.
7
V-2-7
THE TRUST ASSETS
General
The Sponsor intends to acquire the Trust Assets in privately negotiated transactions prior to
the Closing Date and to sell them to the Trust according to the terms of a Trust Agreement
between the Sponsor and the Trustee. The Sponsor will make certain representations and
warranties with respect to the Trust Assets. All Trust Assets[, regardless of whether the assets
consist of [Trust MBS], [or] [the] [an] [Underlying Certificates[s]], will evidence, directly or
indirectly, Ginnie Mae Certificates.
[The assets of the Trust consist of “fully modified pass-through” certificates (“Ginnie Mae
MBS Certificates”) as to which Ginnie Mae has guaranteed the timely payment of principal and
interest pursuant to the [Ginnie Mae I or] Ginnie Mae II Program [(“Ginnie Mae I MBS
Certificates” and] “Ginnie Mae II MBS Certificates,” [respectively]).]
[The Trust MBS [(Group[s] [1] [and] [2]]
[The Trust MBS] [The] Group [1] Trust Assets ] are either:
1. Ginnie Mae I MBS Certificates guaranteed by Ginnie Mae, or
2. Ginnie Mae Platinum Certificates backed by Ginnie Mae I MBS Certificates and
guaranteed by Ginnie Mae.
Each Mortgage Loan underlying a Ginnie Mae I MBS Certificate bears interest at a Mortgage
Rate 0.50% per annum greater than the related Certificate Rate. The difference between the
Mortgage Rate and the Certificate Rate is used to pay the related servicers of the Mortgage
Loans a monthly servicing fee and Ginnie Mae a fee for its guaranty of the Ginnie Mae I MBS
Certificate of 0.44% per annum and 0.06% per annum, respectively, of the outstanding principal
balance of the Mortgage Loan.]
[The Trust MBS] [The Group 2 Trust Assets] are either
1. Ginnie Mae II MBS Certificates guaranteed by Ginnie Mae, or
2. Ginnie Mae Platinum Certificates backed by Ginnie Mae II MBS Certificates and
guaranteed by Ginnie Mae.
Each Mortgage Loan underlying a Ginnie Mae II MBS Certificate issued prior to July 1, 2003
bears interest at a Mortgage Rate 0.50% to 1.50% per annum greater than the related Certificate
Rate. Each Mortgage Loan underlying a Ginnie Mae II MBS Certificate issued on or after July 1,
2003 bears interest at a Mortgage Rate 0.25% to 0.75% per annum greater than the related
Certificate Rate. Ginnie Mae receives a fee (the “Ginnie Mae Certificate Guaranty Fee”) for its
guaranty of each Ginnie Mae II MBS Certificate of 0.06% per annum of the outstanding
principal balance of each related Mortgage Loan. The difference between (a) the Mortgage Rate
and (b) the sum of the Certificate Rate and the Ginnie Mae Certificate Guaranty Fee is used to
pay the related servicers of the Mortgage Loans a monthly servicing fee.]
8
V-2-8
[The Underlying Certificates[s] [(Group[3])]
The Group [3] Trust Assets [consists of an] [are] Underlying Certificate[s] that
represent[s] beneficial ownership interests in [a] [one or more] separate trust[s], the assets of
which evidence direct or indirect beneficial ownership interests in certain Ginnie Mae
Certificates. [Each] [The] Underlying Certificate constitutes all or a portion of a class of
[separate] Series of certificates described in [excerpts of] the [related] Underlying Certificate
Disclosure Document attached as Exhibit [ ], in this Offering Circular. [Investors are cautioned
that material changes in facts and circumstances may have occurred since the date of [the] [each]
Underlying Certificate Disclosure Document, including changes in prepayment rates, prevailing
interest rates and other economic factors, which may limit the usefulness of, and be directly
contrary to the assumptions used in preparing the information included in, the offering
document.]*
[Each] [The] Underlying Certificate provides for monthly distributions and is further
described in the table contained in Exhibit A in this Offering Circular. The table also sets forth
information regarding approximate weighted average remaining terms to maturity, loan ages and
mortgage rates of the Mortgage Loans underlying the related Ginnie Mae Certificates.]
The Mortgage Loans
The Mortgage Loans underlying the [Underlying Certificates] [Group [ ]] [Trust Assets] are
expected to have, on a weighted average basis, the characteristics set forth in [Exhibit A to this
Offering Circular] the [Terms Sheet under “Assumed Characteristics of the Mortgage Loans
Underlying the [Group [ ]] Trust Assets.”] [The Mortgage Loans underlying the Underlying
Certificates are expected to have, on a weighted average basis, the characteristics set forth in
Exhibit A to this Offering Circular.]The Mortgage Loans will consist of first lien, single-family,
fixed rate, residential mortgage loans that are insured or guaranteed by the Federal Housing
Administration, the United States Department of Veterans Affairs, Rural Development or the
United States Department of Housing and Urban Development (“HUD”).
[Specific information regarding the characteristics of the Mortgage Loans is not available.
For purposes of this Offering Circular, certain assumptions have been made regarding the
remaining terms to maturity [and loan ages] [, loan ages and [, in the case of the Group [ ] Trust
Assets,] Mortgage Rates] of the Mortgage Loans. However, the actual remaining terms to
maturity [and loan ages] [, loan ages and [, in the case of the Group [ ] Trust Assets,] Mortgage
Rates] of many of the Mortgage Loans will differ from the characteristics assumed, perhaps
significantly. This will be the case even if the weighted average characteristics of the Mortgage
Loans are the same as the assumed characteristics. Small differences in the characteristics of the
Mortgage Loans can have a significant effect on the weighted average lives and yields of the
Securities. See “Risk Factors” and “Yield, Maturity and Prepayment Considerations” in this
Offering Circular.]
* Note to Trust Counsel: This footnote should be included to the extent that the underlying certificates constitute previously
issued certificates that are themselves backed by previously issued certificates.
9
V-2-9
[Trustee Fee
[The Sponsor will contribute certain Ginnie Mae Certificates in respect of the fee to be paid
to the Trustee (the “Trustee Fee”).] On each Distribution Date, the Trustee will retain [a fixed
percentage of] all principal and interest distributions received on specified Trust Assets in
payment of its fee.]
GINNIE MAE GUARANTY
The Government National Mortgage Association (“Ginnie Mae”), a wholly-owned corporate
instrumentality of the United States of America within HUD, guarantees the timely payment of
principal and interest on the Securities. Ginnie Mae also guarantees to the Holder of [each] [the]
Call Class Security all amounts, if any, due thereon on the [related] Redemption Date,
representing principal and interest as described in this Offering Circular. The General Counsel
of HUD has provided an opinion to the effect that Ginnie Mae has the authority to guarantee
multiclass securities and that Ginnie Mae guaranties will constitute general obligations of the
United States, for which the full faith and credit of the United States is pledged.
DESCRIPTION OF THE SECURITIES
General
The description of the Securities contained in this Supplement is not complete and is subject
to, and is qualified in its entirety by reference to, all of the provisions of the Trust Agreement.
Form of Securities
The Callable Class Securities initially will be issued and maintained, and may only be
transferred only on the Fedwire Book-Entry System. Beneficial Owners of Book-Entry
Securities will ordinarily hold these Securities through one or more financial intermediaries, such
as banks, brokerage firms and securities clearing organizations which are eligible to maintain
book-entry accounts with the Federal Reserve Bank of New York. By request accompanied by
the payment of a transfer fee of $25,000 per physical certificate to be issued, a Beneficial Owner
may receive a Callable Class Security in certificated form.
The Callable Class Securities [(other than the Increased Minimum Denomination Class[es])]
will be issued in minimum dollar denominations of initial principal balance of $1,000 and
integral multiples of $1 in excess of $1,000. [The Increased Minimum Denomination Class[es]
will be issued in minimum denominations that equal [(i)] $100,000 in initial principal or notional
balance [or (ii) the initial principal or notional balance if such balance is less than $100,000].
NOTE TO COUNSEL: [If the initial principal balance is less than $50,000 the minimum
denominations may be set equal to such balance].
[Each] [The] Call Class will be issued as a single certificated, fully registered security,
representing the entire interest in such class, and may be transferred or exchanged at the
Corporate Trust Office of the Trustee. Only one Holder is permitted to hold the Call Class at any
time. The Trustee may impose a service charge upon Holders for any registration of exchange or
transfer of certificated securities, and the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge incurred in connection with any transfer.
10
V-2-10
Distributions
Distributions on the Callable Class Securities will be made on each Distribution Date as
specified under “Terms Sheet - Distribution Date[s]” in this Offering Circular. On each
[related] Distribution Date, the Distribution Amount will be distributed to the Holders of record
as of the close of business on the last Business Day of the calendar month immediately preceding
the month in which the Distribution Date occurs. Beneficial Owners of Book-Entry Securities
will receive distributions through credits to accounts maintained for their benefit on the books
and records of the appropriate financial intermediaries. The "Distribution Amount" for each
Distribution Date will be the aggregate of the Principal Distribution Amount and Interest
Distribution Amount for that date. For purposes hereof, a “Business Day” is a day other than (a)
a Saturday or Sunday, (b) a day on which the banking institutions in the state of New York are
authorized or obligated by law or executive order to remain closed or (c) a Federal legal public
holiday. Except as described under "—Redemption and Exchange," no amounts will be
distributable to the Call Class Securities.
Interest Distributions
The amount of interest (the “Interest Distribution Amount”) to be distributed on [each] [the]
Callable Class on any Distribution Date will equal interest accrued for the related Accrual Period
on the Class Principal Balance thereof immediately before that Distribution Date at the interest
specified on the front cover.
The Accrual Period will be the calendar month preceding the Distribution Date.
•
Interest will be calculated on the basis of a 360-day year consisting of twelve 30-day
months.
•
Interest distributable on any Class for any Distribution Date will consist of 30 days’
interest on its Class Principal Balance as of the related Record Date.
•
Investors can calculate the amount of interest to be distributed on each Class of Securities
for any Distribution Date by using the Class Factors published in the preceding month.
See “— Class Factors” below.
Principal Distributions
•
The Principal Distribution Amount [for each Distribution Date] [for each Security Group]
will be distributed to the Holders of the [related] Callable Class Securities. The "Principal
Distribution Amount" for each Distribution Date [and each Group] represents the aggregate of
amounts in respect of principal received on the [related] Trust Assets on the distribution date for
such Trust Assets occurring in the month of such Distribution Date[, net of the principal portion
of amounts allocable to the Excess MBS Portion in payment of the monthly Trustee’s Fee];
except that, in the event that the factor for any Trust Asset (each, a “Certificate Factor”) is not
available on the date specified in the Trust Agreement, no amounts in respect of principal for
such Trust Asset will be distributable to the related Callable Class Securities on the following
Distribution Date. [“Excess MBS Portion” refers to the excess of the principal balance of the
[related] Trust Asset over the Class Principal Balance of the [related] Callable Class.] Investors
can calculate the amount of principal to be distributed with respect to any Distribution Date by
using the Class Factors published in the preceding and current months. See “— Class Factors”
below.
11
V-2-11
Redemption and Exchange
The Holder of [each] [the] Call Class will have the right to direct the Trustee to cause the
redemption of the [related] Callable Class Securities, in whole but not in part, on any
Distribution Date on or after the Initial Redemption Date. However such a redemption may be
effected only if, as of the time specified in the Trust Agreement on the date the Trustee receives
notice from the Holder of the [related] Call Class directing such redemption, the related Trust
Assets have a market value in excess of their outstanding principal balance. The determination
by the Trustee of the market value, in accordance with the Trust Agreement, will (in the absence
of manifest error) be final and binding. Each redemption of Callable Class Securities will be
made at the Redemption Price (defined below) for such securities.
The Holder of [a] [the] Call Class Security proposing to effect a redemption may notify the
Trustee at any time during the month preceding redemption but must do so no later than 11:00
a.m. Eastern time on the third Business Day preceding the last calendar day of such month (each,
a “Redemption Notice Date”). Any such notice is required to be delivered to the Trustee in
writing at its Corporate Trust Office [address]. The Trustee may be contacted by telephone at [
], and by fax at [
]. Any notice received after 11:00 a.m. will be deemed to be
received on the next following Business Day before 11:00 a.m.
No later than the applicable Redemption Notice Date, the Holder of the [applicable] Call
Class Security must surrender its Call Class Security to the Trustee and deposit a fee (the
“Exchange Fee”) and the Redemption Amount with the Trustee. The “Redemption Amount”
will equal the sum of:
the outstanding principal balance of the [related] Trust Assets based on the Certificate
Factors published for such [related] Trust Assets for the month prior to the month of
redemption, and
•
an amount equal to the interest that would be payable on the [related] Callable Class
Securities for the period from the first day of the month of redemption to the Redemption
Date, calculated on the basis of its Interest Rate and Class Factor published in the month
preceding redemption.
The Exchange Fee for any redemption will equal the greater of:
•
$5,000 or
•
the lesser of $15,000 or 1/32 of 1% of the outstanding principal balance of the
[applicable] Callable Class Securities.
•
Upon delivery of the Redemption Amount and the Exchange Fee, surrender of the Call Class
Security to the Trustee and determination of a satisfactory market value for the Trust Assets as
described above, the notice of redemption and exchange will become irrevocable and redemption
of the Callable Class will be made on the Distribution Date in the month following the month of
the related Redemption Notice Date.
On the Redemption Date, the Trustee will redeem each [applicable] Callable Class Security
by distributing the Redemption Price equal to the sum of:
(a)
100% of the outstanding principal balance of such Callable Class Security;
12
V-2-12
(b)
accrued interest at the Interest Rate borne by such Callable Class Security for the
Accrual Period preceding such Redemption Date, based on its outstanding
principal balance; and
(c)
additional accrued interest at the [related] Interest Rate for the period from the
first day of the month of redemption to the Redemption Date, calculated on a
reduced principal balance determined on the basis of the “Class Factor” for the
Callable Class Securities that would have been published in the month of
redemption were no redemption to occur.
Distribution of the Redemption Price in respect of the [related] Callable Class Securities on
the Redemption Date will be in lieu of any distribution of principal and interest that would
otherwise be made on that date.
Subject to the conditions described above, the Trustee will deliver the [related] Trust Assets
to the Holder of the Call Class Security on the first Business Day of the month of redemption. In
addition, on the Redemption Date, the Trustee will remit to the Holder of the Call Class the sum
of:
•
•
the positive difference, if any, of the Redemption Amount paid by such Holder and the
distributions received on the [related] Trust Assets in the month of redemption [(net[, if
applicable,][ of the Trustee Fee payable to the Trustee on such date)] less the Redemption
Price for the Callable Class Securities and
investment earnings, if any, on the Redemption Amount (which, following deposit, is
expected to be invested by the Trustee in short-term Treasury obligations).
Amounts distributable to the Holder of [a] [the] Call Class Security on a Redemption Date
will constitute principal or interest to the extent of the source of such amounts, as provided in the
Trust Agreement.
Class Factors
The Trustee will calculate and make available for [each Class of] [the] Callable Class
Securities, no later than the day preceding the [applicable] Distribution Date, the factor (carried
out to eight decimal places) that when multiplied by the original Class Principal Balance of that
Class, determines the Class Principal Balance after giving effect to the distribution of principal to
be made on the Securities on that Distribution Date (each, a “Class Factor”).
•
•
•
•
The Class Factor for any Class of Securities for the month following the issuance of the
Securities will reflect its remaining Class Principal Balance after giving effect to any
principal distribution to be made on the Distribution Date occurring in that month.
The Class Factor for each Class for the month of issuance is 1.00000000.
Based on the Class Factors published in the preceding and current month (and Interest
Rates), investors in any Class can calculate the amount of principal and interest to be
distributed to that Class.
Investors may obtain current Class Factors on Ginnie Mae’s Multiclass Securities eAccess located on Ginnie Mae’s website (“e-Access”).
13
V-2-13
Termination
The Trustee, at its option, may purchase or cause the sale of the Trust Assets (unless the
Holder of a Call Class Security has previously tendered its notice of redemption) and thereby
terminate the Trust on any Distribution Date on which the aggregate of the Class Principal
Balances of the Securities is less than 1% of the aggregate original Class Principal Balances of
the Securities.
Upon any termination of the Trust, the Holder of any outstanding Callable Class Security
will be entitled to receive that Holder’s allocable share of the Class Principal Balance of that
Class plus any accrued and unpaid interest thereon at the applicable Interest Rate.
Upon any such termination, no amounts will be distributable with respect to the Call Class
Securities.
YIELD, MATURITY AND PREPAYMENT CONSIDERATIONS
General
The prepayment experience of the Mortgage Loans underlying the related Trust Assets will
affect the Weighted Average Lives of and the yields realized by investors in the [related]
Securities.
•
•
The Mortgage Loans do not contain “due-on-sale” provisions, and any Mortgage Loan
may be prepaid in full or in part at any time without penalty.
The rate of payments (including prepayments and payments in respect of liquidations) on
the Mortgage Loans is dependent on a variety of economic, geographic, social and other
factors, including prevailing market interest rates and general economic factors.
The rate of prepayments with respect to single-family mortgage loans has fluctuated
significantly in recent years. Although there is no assurance that prepayment patterns for the
Mortgage Loans will conform to patterns for more traditional types of conventional fixed-rate
mortgage loans, generally:
•
•
if mortgage interest rates fall materially below the Mortgage Rates on any of the
Mortgage Loans (giving consideration to the cost of refinancing), the rate of prepayment
of those Mortgage Loans would be expected to increase; and
if mortgage interest rates rise materially above the Mortgage Rates on any of the
Mortgage Loans, the rate of prepayment of those Mortgage Loans would be expected to
decrease.
In addition, following any Mortgage Loan default and the subsequent liquidation of the
underlying Mortgaged Property, the principal balance of the Mortgage Loan will be distributed
through a combination of liquidation proceeds, advances from the related Ginnie Mae Issuer and,
to the extent necessary, proceeds of Ginnie Mae’s guaranty of the Trust Assets. As a result,
defaults experienced on the Mortgage Loans will accelerate the distribution of principal of the
Securities.
Under certain circumstances, the Trustee has the option to purchase the Trust Assets,
thereby effecting early retirement of the Securities. See “Description of the Securities —
Termination” in this Offering Circular.
14
V-2-14
In addition, the Callable Class Securities are subject to redemption. See “Risk Factors —
Callable class securities are subject to redemption prior to their final distribution date.”
Assumability
Each Mortgage Loan may be assumed, subject to HUD review and approval upon the sale of
the related Mortgaged Property.
Final Distribution Date
The Final Distribution Date for each Callable Class Security, which is set forth on the front
cover of this Supplement, is the latest date on which the related Class Principal Balance will be
reduced to zero.
•
The actual retirement of any Security may occur earlier than its Final Distribution Date
(as a result of the occurrence of a redemption or otherwise).
•
According to the terms of the Ginnie Mae Guaranty, Ginnie Mae will guarantee payment
in full of the Class Principal Balance of the Callable Class Securities no later than their
[respective] Final Distribution Date.
Modeling Assumptions
The tables that follow have been prepared on the basis of [the characteristics of the
Underlying Certificate[s], the priorities of distributions on the Underlying Certificate[s] and] the
following assumptions (the “Modeling Assumptions”), among others:
1.
[The Mortgage Loans underlying the [Group [ ]] Trust Assets have the assumed
characteristics shown under “Assumed Characteristics of the Mortgage Loans
Underlying the [Group [ ] ] Trust Assets” in the Terms Sheet, except in the case of
information set forth under the 0% PSA Prepayment Assumption Rate, for which each
Mortgage Loan [underlying a [Group [ ]] Trust Assets is assumed to have an original
and a remaining term to maturity of [360] months and each Mortgage Loan underlying
a Group [ ] Trust Asset] is assumed to have an original and a remaining term to
maturity of [180] months and each Mortgage Loan underlying a Group [ ] Trust Asset
is assumed to have a Mortgage Rate of 1.50% per annum higher than the related
Certificate Rate.]
2.
The Mortgage Loans prepay at the constant percentages of PSA (described below)
shown in the related table.
3.
Distributions on the [Group 1] [,] [and] [Group 2][,] Securities are always received on
the [16th day of the month] [,] [and] [the 20th day of the month], [respectively,]
whether or not a Business Day, commencing in [ ], 20[ ].
4.
A termination of the Trust [ or the Underlying Trust[s]] does not occur.
5.
The Closing Date for the Securities is [
6.
No expenses or fees are paid by the Trust [other than the Trustee Fee.]
7.
[Distributions on the Underlying Certificate[s] are made as described in the related
Underlying Certificate Disclosure Document[s].]
15
], 20[ ].
V-2-15
8.
[Except as otherwise indicated, no redemption of the Callable Class Securities occurs
as described under “Description of the Securities — Redemption and Exchange” in
this Offering Circular.]
When reading the tables and the related text, investors should bear in mind that the
Modeling Assumptions, like any other stated assumptions, are unlikely to be entirely consistent
with actual experience.
•
•
For example, most of the Mortgage Loans will not have the characteristics assumed,
many Distribution Dates will occur on a Business Day after the [16th] [20th] of the
month [16th or 20th day of the month, as applicable], a redemption may occur and the
Trustee may cause a termination of the Trust as described under “Description of the
Securities—Termination” in this Offering Circular.
In addition, distributions on the Securities are based on Certificate Factors, which may
not reflect actual receipts on the Trust Assets.
Decrement Tables
Prepayments of mortgage loans are commonly measured by a prepayment standard or
model. The model used in this Offering Circular (“PSA”) is the standard prepayment
assumption model of The Securities Industry and Financial Market Association. PSA represents
an assumed rate of prepayment each month relative to the then outstanding principal balance of
the Mortgage Loans to which the model is applied.
The decrement tables set forth below are based on the assumption that the Mortgage Loans
prepay at the indicated percentages of PSA (the “PSA Prepayment Assumption Rates”). As used
in the table, each of the PSA Prepayment Assumption Rates reflects a percentage of the 100%
PSA assumed prepayment rate. The Mortgage Loans will not prepay at any of the PSA
Prepayment Assumption Rates and the timing of changes in the rate of prepayments
actually experienced on the Mortgage Loans will not follow the pattern described for the
PSA assumption.
The decrement tables set forth below illustrate the percentage of the original Class Principal
Balance of the Callable Class Securities that would remain outstanding following the distribution
made each specified month, based on the assumption that the [related] Mortgage Loans prepay at
the PSA Prepayment Assumption Rates. The percentages set forth in the following decrement
tables have been rounded to the nearest whole percentage (including rounding down to zero).
The decrement tables also indicate the Weighted Average Life of each Class under each
PSA Prepayment Assumption Rate. The Weighted Average Life of each Class is calculated by:
(a) multiplying the net reduction, if any, of the Class Principal Balance from one
Distribution Date to the next Distribution Date by the number of years from the date of
issuance thereof to the related Distribution Date,
(b) summing the results, and
(c) dividing the sum by the aggregate amount of the assumed net reductions in principal
balance referred to in clause (a).
The Weighted Average Lives are likely to vary, perhaps significantly, from those set
forth in the tables below due to the differences between the actual characteristics of the
Mortgage Loans underlying the [related] Trust Assets and the Modeling Assumptions.
16
V-2-16
Percentages of Original Class Principal Balances
and Weighted Average Lives
Distribution Date
Initial Percent . . . . . . . . . . . . . . .
[Month] [ ] . . . . . . . . . . . . . . .
[Month] [ ] . . . . . . . . . . . . . . .
[Month] [ ] . . . . . . . . . . . . . . .
[Month] [ ] . . . . . . . . . . . . . . .
[Month] [ ] . . . . . . . . . . . . . . .
[Month] [ ] . . . . . . . . . . . . . . .
[Month] [ ] . . . . . . . . . . . . . . .
[Month] [ ] . . . . . . . . . . . . . . .
[Month] [ ] . . . . . . . . . . . . . . .
[Month] [ ] . . . . . . . . . . . . . . .
[Month] [ ] . . . . . . . . . . . . . . .
[Month] [ ] . . . . . . . . . . . . . . .
[Month] [ ] . . . . . . . . . . . . . . .
[Month] [ ] . . . . . . . . . . . . . . .
[Month] [ ] . . . . . . . . . . . . . . .
[Month] [ ] . . . . . . . . . . . . . . .
[Month] [ ] . . . . . . . . . . . . . . .
[Month] [ ] . . . . . . . . . . . . . . .
[Month] [ ] . . . . . . . . . . . . . . .
[Month] [ ] . . . . . . . . . . . . . . .
[Month] [ ] . . . . . . . . . . . . . . .
[Month] [ ] . . . . . . . . . . . . . . .
[Month] [ ] . . . . . . . . . . . . . . .
[Month] [ ] . . . . . . . . . . . . . . .
[Month] [ ] . . . . . . . . . . . . . . .
[Month] [ ] . . . . . . . . . . . . . . .
[Month] [ ] . . . . . . . . . . . . . . .
[Month] [ ] . . . . . . . . . . . . . . .
[Month] [ ] . . . . . . . . . . . . . . .
[Month] [ ] . . . . . . . . . . . . . . .
Weighted Average Life (years) . . . . .
Distribution Date
Initial Percent . . . . . . . . . . . . . . .
[Month] [ ] . . . . . . . . . . . . . . .
[Month] [ ] . . . . . . . . . . . . . . .
[Month] [ ] . . . . . . . . . . . . . . .
[Month] [ ] . . . . . . . . . . . . . . .
[Month] [ ] . . . . . . . . . . . . . . .
[Month] [ ] . . . . . . . . . . . . . . .
[Month] [ ] . . . . . . . . . . . . . . .
[Month] [ ] . . . . . . . . . . . . . . .
[Month] [ ] . . . . . . . . . . . . . . .
[Month] [ ] . . . . . . . . . . . . . . .
[Month] [ ] . . . . . . . . . . . . . . .
[Month] [ ] . . . . . . . . . . . . . . .
[Month] [ ] . . . . . . . . . . . . . . .
[Month] [ ] . . . . . . . . . . . . . . .
[Month] [ ] . . . . . . . . . . . . . . .
[Month] [ ] . . . . . . . . . . . . . . .
[Month] [ ] . . . . . . . . . . . . . . .
[Month] [ ] . . . . . . . . . . . . . . .
[Month] [ ] . . . . . . . . . . . . . . .
[Month] [ ] . . . . . . . . . . . . . . .
[Month] [ ] . . . . . . . . . . . . . . .
[Month] [ ] . . . . . . . . . . . . . . .
[Month] [ ] . . . . . . . . . . . . . . .
[Month] [ ] . . . . . . . . . . . . . . .
[Month] [ ] . . . . . . . . . . . . . . .
[Month] [ ] . . . . . . . . . . . . . . .
[Month] [ ] . . . . . . . . . . . . . . .
[Month] [ ] . . . . . . . . . . . . . . .
[Month] [ ] . . . . . . . . . . . . . . .
[Month] [ ] . . . . . . . . . . . . . . .
Weighted Average Life (years) . . . . .
[Security Group 1]
PSA Prepayment Assumption Rates
Class A1
%
%
0%
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[Security Group 2]
PSA Prepayment Assumption Rates
Class A2
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17
V-2-17
Yield Considerations
An investor seeking to maximize yield should make a decision whether to invest in any
Security based on the anticipated yield of that Security resulting from its purchase price, the
investor’s own projection of Mortgage Loan prepayment rates under a variety of scenarios [,]
[and] [in the case of the Group [ ] Securities], [the investor’s own projection of [principal]
payment rates on the Underlying Certificates[s] under a variety of scenarios] [and] the likelihood
and timing of any redemption or the yield of any Security. No representation is made
regarding Mortgage Loan prepayment rates, [Underlying Certificate payment rates], the
likelihood or timing of any redemption or the yield of any Class.
Prepayments: Effect on Yields
In the case of Callable Class Securities, the yields to investors will be sensitive in varying
degrees to the rate of prepayments on the [related] Mortgage Loans.
•
•
In the case of Callable Class Securities purchased at a premium, faster than anticipated
rates of principal payments or an early redemption could result in actual yields to
investors that are lower than the anticipated yields.
In the case of Callable Class Securities purchased at a discount, slower than anticipated
rates of principal payments or the absence of a redemption could result in actual yields to
investors that are lower than the anticipated yields.
See “Risk Factors — Rates of principal payments and the occurrence and timing of any
redemption can reduce your yield” in this Offering Circular.
Rapid rates of prepayments on the Mortgage Loans or a redemption are likely to coincide
with periods of low prevailing interest rates.
During periods of low prevailing interest rates, the yields at which an investor may be able
to reinvest amounts received as principal payments on the investor’s Callable Class of Securities
may be lower than the yield on such securities.
Slow rates of prepayments on the Mortgage Loans and the absence of a redemption are
likely to coincide with periods of high prevailing interest rates.
During periods of high prevailing interest rates, the amount of principal payments available
to an investor for reinvestment at those high rates may be relatively low.
The Mortgage Loans will not prepay at any constant rate until maturity, nor will all of the
Mortgage Loans [underlying any Trust Asset Group] prepay at the same rate at any one time.
The timing of changes in the rate of prepayments may affect the actual yield to an investor, even
if the average rate of principal prepayments is consistent with the investor’s expectation. In
general, the earlier a prepayment of principal (including as a result of a redemption) on the
Mortgage Loans, the greater the effect on an investor’s yield. As a result, the effect on an
investor’s yield of principal prepayments occurring at a rate higher (or lower) than the rate
anticipated by the investor during the period immediately following the Closing Date is not
likely to be offset by a later equivalent reduction (or increase) in the rate of principal
prepayments.
Payment Delay: Effect on Yields
The effective yield on the Callable Class Securities will be less than the yield otherwise
produced by its Interest Rate and purchase price because 30 days’ interest will be payable on
18
V-2-18
such Securities even though interest began to accrue approximately [46] [or] [50] days earlier [,
as applicable] and, except upon a redemption of the Callable Class, which will not bear interest
during such delay.
[LIBOR: Effect on Yields
Low levels of LIBOR can reduce the yield on the Callable Class Securities. See “Terms
Sheet-Interest Rates” in Exhibit B.]
Weighted Average Life and Yield Tables
The following tables show the weighted average lives (in years) and the pre-tax yields to
maturity on a corporate bond equivalent basis of the Callable Class Securities at various constant
percentages of PSA and various redemption scenarios.
The Mortgage Loans will not prepay at any constant rate until maturity. Moreover, it is
likely that the Mortgage Loans will experience actual prepayment rates that differ from those of
the Modeling Assumptions. In addition, no assurance can be made as to the likelihood or timing
of any redemption. Therefore, the actual pre-tax yield of any Class may differ from those
shown in the applicable table below for that Class even if the Class is purchased at the
assumed price shown.
The yields were calculated by
1. determining the monthly discount rates that, when applied to the applicable assumed
streams of cash flows to be paid on the applicable Class, would cause the discounted
present value of the assumed streams of cash flows to equal the assumed purchase price
of that Class plus accrued interest, and
2. converting the monthly rates to corporate bond equivalent rates.
These calculations do not take into account variations that may occur in the interest rates at
which investors may be able to reinvest funds received by them as distributions on their
Securities and consequently do not purport to reflect the return on any investment in any Class
when those reinvestment rates are considered.
The information set forth in the following table[s] was prepared on the basis of the Modeling
Assumptions and the assumption[s] that [(1) a redemption of the Callable Class either does not
occur or occurs on the Indicated Redemption Date, (2) Interest is paid through the day preceding
such Redemption Date and [(3)] the aggregate purchase price of the Callable Class Securities
(expressed as a percentage of its original Class Principal Balance) plus accrued interest is as
indicated in the [related] table. The assumed purchase price is not necessarily that at which
actual sales will occur.
Sensitivity of Class [A1] Securities to Prepayments
Weighted Average Lives and Pre-Tax Yields
Price:
*
PSA Prepayment Assumption Rates
%
%
%
%
%
Redemption Date
19
V-2-19
[Date]
Weighted Average
LifePre-Tax Yield
[Date]
Weighted Average
LifePre-Tax Yield
[Date]
Weighted Average
LifePre-Tax Yield
[Date]
Weighted Average
LifePre-Tax Yield
[Date]
Weighted Average
LifePre-Tax Yield
No Redemption
Weighted Average
LifePre-Tax Yield
*
The price does not include accrued interest. Accrued interest has been added to such price in calculating the
yields set forth in the table.
Redemption Date
Sensitivity of Class [A2] Securities to Prepayments
Weighted Average Lives and Pre-Tax Yields
Price:
*
PSA Prepayment Assumption Rates
%
%
%
%
%
[Date]
Weighted Average
LifePre-Tax Yield
[Date]
Weighted Average
LifePre-Tax Yield
[Date]
Weighted Average
LifePre-Tax Yield
[Date]
Weighted Average
LifePre-Tax Yield
[Date]
Weighted Average
LifePre-Tax Yield
No Redemption
Weighted Average
LifePre-Tax Yield
*
The price does not include accrued interest. Accrued interest has been added to such price in calculating the
yields set forth in the table.
20
V-2-20
CERTAIN FEDERAL INCOME TAX CONSEQUENCES [TO BE UPDATED BY TAX
COUNSEL]
General
The following is a general discussion of the material federal income tax consequences to
beneficial owners of the purchase, ownership, and disposition of the Securities. This discussion
is based upon laws, regulations, rulings, and judicial decisions, now in effect, all of which are
subject to change. This discussion does not purport to discuss all federal tax consequences
applicable to all categories of investors, some of which may be subject to special rules. Investors
should consult their own tax advisors in determining the federal, state, local, and any other tax
consequences to them of the purchase, ownership, and disposition of Securities.
U.S. Treasury Circular 230 Notice
The discussion contained in this Offering Circular as to certain federal tax
consequences is not intended or written to be used, and cannot be used, for the purpose of
avoiding United States federal penalties.
Such discussion is written to support the
promotion or marketing of the transaction or matters addressed in the Offering Circular.
Each taxpayer to whom such transactions or matters are being promoted, marketed or
recommended should seek advice based on its particular circumstances from an
independent tax adviser.
In the opinion of [Trust Counsel], each owner of a Callable Class Security will be treated for
federal income tax purposes as the owner of a portion of a trust classified as a grantor trust under
subpart E, part I of subchapter J of the Internal Revenue Code of 1986, as amended (the “Code”).
Neither the trust, nor any portion of the trust to which any particular Security relates, will be
treated as a business entity classified as a corporation or as a partnership. An owner of a Call
Class Security, as is more fully explained below, will be treated as owning a call option on the
underlying Trust Assets.
The Callable Class Securities
Status. An owner of an interest in Callable Class Securities will be treated as (i) having
purchased an undivided interest in the [related] Trust Assets, and (ii) as having written a call
option on such undivided interest at the time of the purchase of the Callable Class Securities. An
owner of Callable Class Securities will be treated as having written the call option to the holder
of the [related] Call Class Security in exchange for an option premium in an amount equal to the
fair market value of the call option.
Allocations. An owner of an interest in Callable Class Securities should be considered to
have purchased its interest in those Callable Class Securities for an amount equal to the sum of
the actual purchase price paid for the Callable Class Securities plus the amount of the option
premium the owner is deemed to have received from the owner of the related Call Class
Security. Consequently, an owner of Callable Class Securities will have a basis in those Callable
Class Securities that will be greater than the purchase price paid directly by the owner to acquire
the Callable Class Securities.
When an owner sells an interest in Callable Class Securities, the owner will be deemed to
have sold its interest in the [related] Trust Assets for a total price equal to the sum of the sales
21
V-2-21
price received from the purchaser for its interest in the Callable Class Securities plus the fair
market value of the call option at the time of sale. The owner would, at the same time, be
deemed to have made a payment to the purchaser in an amount equal to the fair market value of
the option because the purchaser will have assumed the owner’s obligation under the call option.
Consequently, the amount realized by the owner upon the sale of Callable Class Securities will
be greater than the purchase price paid directly by the purchaser.
Taxation of Call Option Premium. An owner of Callable Class Securities will not be
required to include immediately in income the option premium that such owner is deemed to
have received upon the purchase of Callable Class Securities. Instead, the owner must account
for such premium when the call rights represented by the [related] Call Class Security are
exercised, or when those rights lapse, or when those rights are otherwise terminated with respect
to the owner.
An owner of Callable Class Securities will include option premium in income as short-term
capital gain when the option lapses. The principal balance of the Trust Assets to which the
Callable Class Securities and the Call Class Security relate likely will be reduced over time
through principal payments. Under existing authorities, it is not entirely clear whether the rights
held by the owner of a Call Class Security would be deemed to lapse as the underlying Trust
Assets pay down. The Tax Administrator will assume that the rights represented by a Call Class
Security lapse proportionately as principal (including both scheduled and unscheduled payments)
is paid on the underlying Trust Assets. Thus, the Tax Administrator will treat an owner of
Callable Class Securities as recognizing option premium income over time in proportion to
principal payments made on the underlying Trust Assets. There is no assurance that the Internal
Revenue Service (the “IRS”) would agree with this methodology. Each owner of Callable Class
Securities is urged to consult its own tax advisor on these matters.
If an owner of a Call Class Security exercises its rights to acquire the underlying Trust
Assets, an owner of the [related] Callable Class Securities would include in its amount realized
from the sale of the underlying Trust Assets an amount equal to the unamortized portion of the
option premium. If an owner transfers its interest in Callable Class Securities, the transfer will
be treated as a closing transaction with respect to the call option the owner is deemed to have
written. As a result, the owner will recognize a short-term capital gain or loss equal to the
difference between the unamortized amount of option premium and the amount the owner is
deemed to pay to be relieved from the obligation under the option.
The Call Class Securities
Status. An owner of a Call Class Security will be treated as having purchased a call option
on the Trust Assets for an option premium in an amount equal to the price paid for such Call
Class Security. If an owner of a Call Class Security acquired an interest in the [related] Callable
Class Securities, the call option likely would be treated as having been proportionately
extinguished for at least as long as the owner of the Call Class Security held an interest in the
related Callable Class Securities. Thus, an owner who owned both the Call Class Security and
the [related] Callable Class Securities would be treated as owning the underlying Trust Assets.
Taxation of Call Option Premium. Because the price paid by the owner of the Call Class
Security to purchase the Class will be treated as an option premium for the right to acquire the
Trust Assets, it will be added to the purchase price paid for the underlying Trust Assets upon
22
V-2-22
exercise of the rights granted to the owner of the Call Class Security if those rights are exercised.
The owner of the Call Class Security will recognize a loss as the call rights lapse. For a
discussion of when those call rights are deemed to lapse, see ⎯ “The Callable Class Securities
— Taxation of Call Option Premium.” If the Trust Assets to be acquired by the owner of the
Call Class Security upon exercise of the call option would be capital assets in the owner’s hands,
then the loss recognized on lapse of the option would be a capital loss.
Application of the Straddle Rules
With respect to an owner of Callable Class Securities, the IRS might take the position that
the owner’s interest in the underlying Trust Assets and the call option constitute positions in a
straddle. If this position were sustained, the straddle rules of section 1092 of the Code would
apply. Under those rules, an owner selling its interest in the Callable Class Securities would be
treated as selling its interest in the underlying Trust Assets at a gain or loss. Such gain or loss
would be short-term because the owner’s holding period would be tolled. Additionally, the
straddle rules might require an owner to capitalize, rather than deduct, interest and carrying
charges allocable to the owner’s interest in Callable Class Securities. Further, if the IRS were to
take the position that an owner’s interest in the Trust Assets and the call option constituted a
conversion transaction as well as a straddle, then a portion of the gain with respect to the Trust
MBS or the call option might be characterized as ordinary income. Each owner of Callable
Class Securities is urged to consult its own tax advisor regarding these matters.
ERISA MATTERS
Ginnie Mae guarantees distributions of principal and interest with respect to the Callable
Class Securities. The Ginnie Mae Guaranty is supported by the full faith and credit of the United
States of America. The Callable Class Securities will qualify as “guaranteed governmental
mortgage pool certificates” within the meaning of a Department of Labor regulation, the effect of
which is to provide that mortgage loans underlying a “guaranteed governmental mortgage pool
certificate” will not be considered assets of an employee benefit plan subject to the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”) solely by reason of the Plan’s
purchase and holding of that certificate.
The redemption right in respect of [each] [the] Call Class and the exercise thereof might be
treated under ERISA as principal transactions between the beneficial owners of the Callable
Class Securities and such beneficial owner of the Call Class. Thus, in theory, the acquisition or
exercise of the redemption right as described herein by the Holder of a Call Class could be
characterized under certain circumstances as an ERISA prohibited transaction between a Plan
and a “party in interest” (assuming that such Plan holds the related Callable or Call Class and
such “party in interest” or Disqualified organization holds the related Call or Callable Class),
unless an ERISA prohibited transaction exemption, such as PTE 84-14 (for Transactions by
Independent Qualified Professional Asset Managers), is applicable. A Call Class may be
deemed to be an option to acquire a guaranteed governmental mortgage pool certificate rather
than such a certificate. ERISA plan fiduciaries should consult with their counsel concerning
these issues.
Governmental plans and certain church plans, while not subject to the fiduciary
responsibility provisions of ERISA or the prohibited transaction provisions of ERISA and the
Code, may nevertheless be subject to local, state or other federal laws that are substantially
23
V-2-23
similar to the foregoing provisions of ERISA and the Code. Fiduciaries of any such plans should
consult with their counsel before purchasing any of the Securities.
Plan Investors should consult with their advisors, however, to determine whether the
purchase, holding, or resale of a Security could give rise to a transaction that is prohibited
or is not otherwise permissible under either ERISA or the Code.
LEGAL INVESTMENT CONSIDERATIONS
Institutions whose investment activities are subject to legal investment laws and regulations
or to review by certain regulatory authorities may be subject to restrictions on investment in the
Securities. No representation is made about the proper characterization of any Security for
legal investment or other purposes, or about the permissibility of the purchase by
particular investors of any Class under applicable legal investment restrictions.
Investors should consult their own legal advisors regarding applicable investment
restrictions and the effect of any restrictions on the liquidity of the Securities prior to
investing in the Securities.
PLAN OF DISTRIBUTION
Subject to the terms and conditions of the Sponsor Agreement, the Sponsor has agreed to
purchase all of the Securities if any are sold and purchased. [The Sponsor proposes [to convey
the Callable Class Securities to a Ginnie Mae REMIC Trust and to offer [each] [the] Call Class
to the public from time to time for sale in negotiated transactions at varying prices to be
determined at the time of sale, plus accrued interest.] [The Sponsor proposes to offer [each] [the]
Callable Class Security and [each] [the] Call Class, to the public from time to time for sale in
negotiated transactions at varying prices to be determined at the time of sale, plus accrued
interest.] (The Sponsor may effect these transactions by sales to or through certain securities
dealers. These dealers may receive compensation in the form of discounts, concessions or
commissions from the Sponsor and/or commissions from any purchasers for which they act as
agents. Some of the Securities may be sold through dealers in relatively small sales. In the usual
case, the commission charged on a relatively small sale of securities will be a higher percentage
of the sales price than that charged on a large sale of securities.
INCREASE IN SIZE
Before the Closing Date, Ginnie Mae, the Trustee and the Sponsor may agree to increase the
size of this offering. In that event, the [Group [ ] ]Securities will have the same characteristics as
described in this Offering Circular, except that the original Class Principal Balance of [each]
[the] Callable Class will increase by the same proportion. The Trust Agreement, the Final Data
Statement and the Supplemental Statement, if any, will reflect any increase in the size of the
transaction.
LEGAL MATTERS
Certain legal matters will be passed upon for Ginnie Mae by [Thacher Proffitt & Wood LLP,
[New York]] [and the Law Offices of Joseph C. Reid, P.A., New York, New York] [Hunton &
Williams LLP]; [and Harrell & Chambliss LLP, Richmond, Virginia] for the Trust by
,
,
; and for the Trustee by ,
.
24
V-2-24
Exhibit A
Underlying Certificate[s]
[Trust Asset
Group [or
Subgroup]]
Issuer
Series
Class
Issue
Date
CUSIP
Number
Interest
Rate
Interest
Type(1)
Final
Distributio
n Date
Principal
Type(1)
Original
Principal
or
Notional
Balance
of Class
Underlying
Certificate
Factor(2)
Principal
or
Notional
Balance
in the
Trust
Percentage
of Class in
Trust
Approximat
e Weighted
Average
Coupon of
Mortgage
Loans
Approximat
e Weighted
Average
Remaining
Term to
Maturity of
Mortgage
Loans (in
months)
Approximat
e Weighted
Average
Loan Age of
Mortgage
Loans (in
months)
(3)
(1)
(2)
[(3)
[(4)
A-1
As defined under “Class Types” in Appendix I to the Base Offering Circular.
Underlying Certificate Factors are as of [
] 20[ ].
MX Class.]
These Underlying Certificate[s] bear[s] interest during their respective interest accrual periods, subject to the applicable maximum and minimum interest
rates, as further described in the related Underlying Certificate Disclosure Documents, excerpts of which are attached as Exhibit B to this Offering
Circular.]
[(5) Trust Asset Group[s] [ ] [Class [ ]] [is] [are] backed by [a] previously issued REMIC Certificate[s] from [certain] Ginnie Mae REMIC Offering Circular
Trust[s], copies of the cover page[s] and Terms Sheet[s] from which are [included] [attached as] Exhibit B [as follows] [to this Offering Circular.]∗
[(6) The approximate weighted average characteristics of the Mortgage Loans underlying Trust Asset Group [ ] Are as follows: ]
Ginnie Mae [
]
Approximate Weighted
Average Coupon of
Mortgage Loans
Approximate Weighted
Average Remaining Term
to Maturity
Approximate Weighted Average Loan Age of
Mortgage Loans (in months)
V-2-25
∗ Note to Trust Counsel: This footnote should be included to the extent that the underlying certificates are issued at least one month prior to the issuance of the Callable Securities.
Ginnie
Mae
I or II
Exhibit B∗
Cover Page[s][,] [and] Terms Sheet[s] [and Schedule I[, if applicable,]]
from Underlying Certificate Disclosure Document[s]
∗ Note to Trust Counsel: See footnote on the Table of Contents page.
26
V-2-26
Exhibit C*
Underlying Certificate Disclosure Documents
* Note to Trust Counsel: This footnote should be included to the extent that the underlying certificates are issued at least one
month prior to the issuance of the Callable Securities.
27
V-2-27
$[
]
Government National
Mortgage Association
GINNIE MAE®
Guaranteed Callable Pass-Through Securities
Ginnie Mae Callable Trust 20[ ]-[ ]
____________________________________________
OFFERING CIRCULAR
[
], 20[ ]
___________________________________________
[SPONSOR]
28
V-2-28
FORM OF TRUST AGREEMENT FOR CALLABLE TRUSTS
V-3-0
______________________________________________________________________________
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
GUARANTEED CALLABLE PASS-THROUGH SECURITIES
CALLABLE TRUST, SERIES 20__-C__
______________________________
TRUST AGREEMENT
between
__________________________,
as Sponsor
and
____________________________,
as Trustee
DATED AS OF
____________ __, 20__
______________________________________________________________________________
V-3-1
TRUST AGREEMENT
THIS TRUST AGREEMENT (the “Trust Agreement”), dated as of __________ __,
20__, is entered into by and between __________, a __________ ___________ (the “Sponsor”),
and __________, a __________ _________, _____________, as trustee (the “Trustee”)
Section 1.
Standard Trust Provisions. The Standard Trust Provisions for Callable Trusts,
dated [
] (“the Standard Trust Provisions”) are herein incorporated by reference and shall be
considered a part of this Trust Agreement as if set forth herein in full.
Section 2.
Defined Terms. Capitalized terms used and not otherwise defined herein shall
have the meanings assigned to them in the glossary contained in the Ginnie Mae Multiclass
Securities Guide, and as supplemented by both the Terms Sheet in the Offering Circular attached
hereto as Schedule C and the definitions set forth below:
Book-Entry Securities: The Securit[y][ies] identified as [a] Callable Class[es] in the
Issuance Statement attached hereto as Exhibit 1.
Call Class Security: [The Class B1 [and Class B2] Securities.] [For each Securities
Group, the Class B Securities for such Securities Group.]
Callable Class Securities: [The Class A1 [and Class A2] Securities.]
Securities Group, the Class A Securities for such Securities Group.]
[For each
Closing Date: ____________ __, 20__.
Corporate Trust Office: _____________________________.
Distribution Date: [[For the Group 1 Securities, the] [The] 16th day of each month or, if
the 16th day is not a Business Day, the first Business Day thereafter, commencing in
______________, 20__.] [[For the Group 2 Securities,] [The] the 20th day of each month or, if
the 20th day is not a Business Day, the first Business Day following the 20th day, commencing
in _____________, 20__.]
Final Data Statement: The statement attached to the Accountants’ Agreed-Upon
Procedures Report as of the Closing Date as Schedule A, a copy of which is attached hereto.
[The Final Data Statement separately identifies the [Trust Assets in each Trust Asset Group]
[Trust Asset underlying the Securities] [and the Group T Trust Assets].]
Ginnie Mae Guaranty Fee: [Note to Trust Counsel: The Ginnie Mae Guaranty Fee shall
be the greater of (x) the sum of 0.02% of the first $200,000,000 of Original Class Principal
Balance of the related Callable Class (or Classes) and 0.01% of any additional amounts; and (y)
$40,000.]
Group [1] [T] Trust Assets: The Trust Assets [underlying Security Group [1][T].]
[identified as such in the Final Data Statement.]
[Group [2] Trust Assets: The Trust Assets underlying Security Group [2].]
V-3-2
Increased Minimum Denomination Class[es]: [None.] [Class[es] ___________.]
Initial Redemption Date: The Distribution Date occurring in
, 20 .
Offering Circular: The Offering Circular for Ginnie Mae Callable Trust 20__ -C__.
Redemption Amount: As defined in the Offering Circular.
Redemption Price: As defined in the Offering Circular.
Registrar: The Trustee.
[Security Group [1]: The Class A1 and Class B1 Securities.]
[Security Group [2]: The Class A2 and Class B2 Securities.]
Sponsor: The entity identified as such on the cover page hereof.
Sponsor Agreement: The Sponsor Agreement relating to Ginnie Mae Callable Trust
20__-C__, by and between the Sponsor and Ginnie Mae, dated ____________ __, 20__.
Tax Administrator: The Trustee.
Trust: The Ginnie Mae Callable Trust created pursuant to the Trust Agreement.
Trust Assets: Collectively, the certificates listed in the Final Data Statement.
Trust Counsel: ______________________________.
Trustee: The entity identified as such on the cover page hereof, or its successor in
interest, or any successor trustee appointed as herein provided.
Trustee Fee: [ ] [All] principal and interest distributions received on the Group [ ] Trust
Assets [and [
of] all principal and interest distributions received on the Group [ ] Trust
Assets] [None].
Trust Fund: The corpus of the trust established hereby, consisting of: (a) the Trust Assets
and all distributions thereon on or after the first day of the month following the month in which
the Closing Date occurs, (b) all of the Sponsor’s right, title and interest in, but none of Sponsor’s
obligations under, the Sponsor Agreement, (c) the Trust Accounts, and (d) any proceeds of the
foregoing.
Section 3.
Conveyance to the Trustee. In consideration of all of the Securities issued
hereunder, the receipt of which is hereby acknowledged by the Sponsor, the Sponsor does hereby
sell, assign, transfer and convey to the Trustee, in trust for the benefit of the Holders, all of the
Sponsor’s right, title and interest in and to the Trust Fund.
Section 4.
Acceptance by the Trustee. By its execution of this Trust Agreement, the
Trustee acknowledges receipt of the Trust Fund and declares that it holds and will hold the Trust
V-3-3
Fund in trust for the exclusive use and benefit of all present and future Holders pursuant to the
terms of this Trust Agreement. The Trustee represents and warrants that the Trustee holds the
Trust Assets through the facilities of the Book-Entry Depository, which has credited the Trust
Assets to the Trustee Limited Purpose Account, (b) the information relating to the Trust Assets
set forth on the Final Data Statement conforms to information provided to the Trustee by the
Book-Entry Depository, (c) the Trustee acquired the Trust Assets on behalf of the Trust from the
Sponsor in good faith, for value, and without notice or knowledge of any adverse claim, lien,
charge, encumbrance or security interest (including, without limitation, federal tax liens or liens
arising under ERISA), (d) except as permitted in this Trust Agreement, the Trustee has not and
will not, in any capacity, assert any claim or interest in the Trust Assets, and (e) the Trustee has
not encumbered or transferred its right, title or interest in the Trust Assets.
Section 5.
The Securities.
(a)
The Securities will be designated generally as the Ginnie Mae Guaranteed
Callable Pass-Through Securities, Series 20__-C_. The aggregate principal amount of
Securities that may be executed and delivered under this Trust Agreement is limited to
$___________, except for Securities executed and delivered upon registration of, or
transfer of, or in exchange for, or in lieu of, other Securities. The (i) designation,
(ii) Original Class Principal Balance, (iii) Interest Rate, (iv) Final Distribution Date,
(v) Initial Redemption Date and (vi) CUSIP Number for each Class are set forth in the
table on the cover page of the Offering Circular, attached hereto as Schedule B.
(b)
Each Class of Securities issued in certificated form shall be substantially
in the form of the related Exhibit attached hereto.
(c)
The Book-Entry Securities shall be issued in book-entry form in the
denominations specified in the Issuance Statement attached hereto as Exhibit 1.
[(d)
The Increased Minimum Denomination Class[es] shall be offered in the
following minimum denomination[s]: $
for Class
and $
for Class .]
Section 6.
Distributions to Holders. On each Distribution Date [with respect to a Security
Group], the Trustee (or the Paying Agent on behalf of the Trustee) shall withdraw the Class
Distribution Amount [for that Security Group] from the Trust Accounts in accordance with
Section 3.04 of the Standard Trust Provisions and shall distribute the [that] Distribution Amount
in the following manner:
(i)
The Callable Class Securities shall receive interest for the related Accrual
Period at the [respective] Interest Rate[s] set forth in Schedule B; and
(ii)
The Principal Distribution Amount for such Distribution Date [and
Security Group] shall be distributed to the [related] Callable Class Securities.
Section 7.
Modification of Standard Trust Provisions. The following modifications of the
Standard Trust Provisions shall apply to this Agreement:
[NONE]
[NOTE TO TRUST COUNSEL: Insert other modifications, if necessary]
V-3-4
Section 8.
Schedules and Exhibits. Each of the Schedules and Exhibits attached hereto or
referenced herein is incorporated herein by reference.
* * * * *
V-3-5
IN WITNESS WHEREOF, the Sponsor and the Trustee have caused this Trust
Agreement to be duly executed by their respective officers thereunto duly authorized as of the
day and year first above written.
[SPONSOR]
By: _____________________________________
Its: _____________________________________
[TRUSTEE], as Trustee
By: _____________________________________
Its: _____________________________________
V-3-6
STATE OF [NEW YORK]
COUNTY OF [NEW YORK]
)
) ss.:
)
The foregoing instrument was acknowledged before me in the County of [New York,
New York,] this ____ day of ______________, 20__, by _______________________,
_____________ of ______________________, a __________________ corporation, on behalf
of the corporation.
_______________________________
Notary Public
My Commission expires: _________________
V-3-7
STATE OF [NEW YORK]
COUNTY OF [NEW YORK]
)
) ss.:
)
The foregoing instrument was acknowledged before me in the County of [New York,
New York], this ____ day of ________________, 20__, by ________________, ____________
of _______________________, a ___________________ banking corporation, on behalf of the
corporation.
_______________________________
Notary Public
My Commission expires: _________________
V-3-8
LIST OF SCHEDULES AND EXHIBITS
Schedule A:
Schedule B:
Schedule C:
Copy of the Final Data Statement [NOTE TO
TRUST COUNSEL: This is a photocopy of
Schedule A to the Accountants’ Closing Letter.]
Front Cover of Offering Circular
Terms Sheet to Offering Circular
Exhibit 1:
Exhibit [B1]:
Exhibit [B2]:
Issuance Statement
Form of Class [B1] Security
Form of Class [B2] Security
V-3-9
STANDARD TRUST PROVISIONS FOR CALLABLE TRUSTS
V-4-0
STANDARD TRUST PROVISIONS
FOR CALLABLE TRUSTS
______________________________
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
GUARANTEED CALLABLE PASS-THROUGH SECURITIES
______________________________
April 1, 2008 Edition
V-4-1
TABLE OF CONTENTS
ARTICLE I
ESTABLISHMENT OF TRUST
Section 1.01.
Section 1.02.
Section 1.03.
Section 1.04.
Section 1.05.
Section 1.06.
Establishment of Trust. .........................................................................................5
Sale of Trust Assets. .............................................................................................5
Registration of Trust Assets..................................................................................5
Delivery of Securities. ..........................................................................................5
Board Approval of Trust Agreement. ...................................................................6
Separate Grantor Trusts. .......................................................................................6
ARTICLE II
THE SECURITIES
Section 2.01. The Securities........................................................................................................6
Section 2.02. Registration of Transfer and Exchange of Securities. ..........................................8
Section 2.03. Mutilated, Destroyed, Lost or Stolen Securities. ..................................................8
ARTICLE III
DISTRIBUTIONS ON THE SECURITIES
Section 3.01.
Section 3.02.
Section 3.03.
Section 3.04.
Section 3.05.
Section 3.06.
Section 3.07.
Section 3.08.
Establishment of Accounts. ..................................................................................9
Certificate and Class Factors. .............................................................................10
Payments on the Trust Assets. ............................................................................11
Distributions on the Securities. ...........................................................................11
Reconciliation Process. .......................................................................................14
Appointment of Information Agent. ...................................................................14
Annual Reports. ..................................................................................................14
Operational Guidelines. ......................................................................................14
ARTICLE IV
REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 4.01. Representations and Warranties of the Sponsor
Section 4.02. Representations and Warranties of the Trustee
Section 4.03. Sponsor Breach; Repurchase Obligation; Substitution.......................................16
ARTICLE V
CONCERNING THE TRUSTEE
Section 5.01. Duties of Trustee.................................................................................................17
Section 5.02. Certain Matters Affecting the Trustee. ...............................................................17
V-4-2
Section 5.03.
Section 5.04.
Section 5.05.
Section 5.06.
Section 5.07.
Section 5.08.
Section 5.09.
Section 5.10.
Section 5.11.
Section 5.12.
Trustee Not Liable for Securities........................................................................18
Trustee May Own Securities...............................................................................19
Payment of Trustee’s Fees and Expenses. ..........................................................19
Eligibility Requirements for Trustee. .................................................................19
Resignation and Removal of the Trustee. ...........................................................20
Successor Trustee................................................................................................21
Appointment of Co-Trustee. ...............................................................................22
Merger or Consolidation of Trustee....................................................................22
Indemnification of HUD and Ginnie Mae. .........................................................22
Performance Reviews by Ginnie Mae. ...............................................................22
ARTICLE VI
TERMINATION
Section 6.01. Termination by the Trustee.................................................................................23
Section 6.02. Termination of Agreement..................................................................................24
Section 6.03. Termination Account. .........................................................................................24
ARTICLE VII
REDEMPTION AND EXCHANGE
Section 7.01. Redemption. ........................................................................................................24
Section 7.02. Exchange.............................................................................................................25
Section 7.03. Exchange Fee; Investment Earnings on Redemption Amount. ..........................26
ARTICLE VIII
MISCELLANEOUS PROVISIONS
Section 8.01.
Section 8.02.
Section 8.03.
Section 8.04.
Section 8.05.
Section 8.06.
Section 8.07.
Section 8.08.
Section 8.09.
Section 8.10.
Section 8.11.
Section 8.12.
Limitation of Rights of Holders..........................................................................26
Control by Holders..............................................................................................26
Amendment of Trust Agreements.......................................................................26
Persons Deemed Owners. ...................................................................................27
Third-Party Beneficiary; Ginnie Mae Subrogation.............................................27
Preemption. .........................................................................................................27
Governing Law. ..................................................................................................28
Successors. ..........................................................................................................28
Headings. ............................................................................................................28
Notice and Demand.............................................................................................28
Severability of Provisions. ..................................................................................29
Counterparts........................................................................................................29
V-4-3
ARTICLE IX
TAX ADMINISTRATOR
Section 9.01. Tax Administration. ............................................................................................30
Section 9.02. Resignation and Removal of the Tax Administrator. .........................................31
Exhibit 1
Exhibit 2
Exhibit 3
Form of Callable Class Security
Form of Call Class Security
Form of Economic Representation Letter of Sponsor
V-4-4
STANDARD TRUST PROVISIONS
FOR CALLABLE TRUSTS
THESE STANDARD TRUST PROVISIONS FOR CALLABLE TRUSTS are to be
incorporated by reference in each Trust Agreement entered into by and between a Sponsor and a
Trustee in connection with each Callable Series of Ginnie Mae’s Guaranteed Callable PassThrough Securities and shall apply to each such Callable Series except as otherwise provided in
the related Trust Agreement. Capitalized terms used and not otherwise defined herein shall have
the meanings set forth in the related Trust Agreement and glossary of the Ginnie Mae Multiclass
Securities Guide in effect as of the date of the Trust Agreement, except that the term “Trust”
shall mean “Callable Trust” and the term “Trust Agreement” shall mean “Callable Trust
Agreement.”
ARTICLE I
ESTABLISHMENT OF TRUST
Section 1.01. Establishment of Trust.
As of the Closing Date, the Sponsor will establish the Trust by depositing the Trust
Assets identified in the related Trust Agreement with the Trust, and the Trust will issue the
Securities, representing the entire beneficial ownership interest in the Trust, to the Sponsor as
consideration for the Trust Assets.
Section 1.02. Sale of Trust Assets.
The deposit of Trust Assets by a Sponsor to a Trust pursuant to the related Trust
Agreement shall occur upon the Closing Date for such Callable Series and shall constitute a sale,
assignment, transfer and conveyance by the Sponsor to the Trust of all right, title and interest in
such Trust Assets as of the first day of the month of the Closing Date, notwithstanding any
provision of federal or state law to the contrary.
Section 1.03. Registration of Trust Assets.
Each Trust Asset included in each Trust will be registered in the name of the Book-Entry
Depository, or its nominees, for the benefit of the Trustee. The books and records of the BookEntry Depository will reflect the Trustee as registered holder of the related Trust Asset, and the
books and records of the Trustee will reflect that it holds the Trust Assets as Trustee of the
related Trust for the benefit of the Holders of the Securities of that Trust.
Section 1.04. Delivery of Securities.
Simultaneously with the execution and delivery of the Trust Agreement, the Trustee shall
deliver to the Sponsor the Securities.
V-4-5
Section 1.05. Board Approval of Trust Agreement.
Prior to the execution of the Trust Agreement and the establishment of the Trust, the
Trustee’s board of directors, its duly appointed loan committee, duly appointed trust committee,
or duly authorized officer, as the case may be, shall approve the Trust Agreement in accordance
with the Trustee’s organizational documents and any applicable state or federal regulation,
including, to the extent applicable and without limitation, 12 C.F.R. §§ 9.7 and 550.5, each as
amended from time to time, and such approval shall be reflected in the minutes of the Trustee’s
board or committee, as applicable. The Trustee shall maintain the Trust Agreement as an official
record of the Trustee from the time the Trust Agreement is executed.
Section 1.06. Separate Grantor Trusts.
The arrangement pursuant to which each pair of Callable and Call Classes are created
pursuant to the Trust Agreement, and pursuant to which the related Trust Assets will be
administered, shall be treated as a separate grantor trust under subpart E, part I of subchapter J of
the Code and the provisions of the related Trust Agreement shall be interpreted in a manner
consistent with such treatment.
ARTICLE II
THE SECURITIES
Section 2.01. The Securities.
(a)
Securities. The Securities shall be designated in the Trust Agreement. Each
Callable Series shall consist of at least one pair of corresponding Call and Callable Class
Securities. The Securities, in the aggregate, represent the entire beneficial ownership in the
Trust. Unless otherwise indicated in the Trust Agreement, the Callable Class Securities are set
forth on the Issuance Statement attached as Exhibit 1 to the Trust Agreement. The Call Class
Securities shall be issued substantially in the forms of Exhibit 1 hereto and shall be executed and
authenticated by the Trustee on behalf of the Trust.
(b)
Forms and Denominations of Securities. Unless otherwise specified in the Trust
Agreement, all Callable Class Securities shall be Book-Entry Securities, registered in the name
of the Book-Entry Depository or its nominee. No person acquiring a beneficial ownership
interest in the Callable Class Securities shall be entitled to receive a physical certificate
representing such ownership interest. Callable Class Securities (other than those that represent
interests in Increased Minimum Denomination Classes) shall be issuable in minimum
denominations representing initial principal balances of $1,000 and integral multiples of $1 in
excess of $1,000. Increased Minimum Denomination Classes, if any, shall be issuable in
minimum denominations as provided in the related Trust Agreement. Notwithstanding the
foregoing, for each Class of Book-Entry Securities, one Certificated Security may be issued in a
different name and denomination, as the Sponsor shall instruct in writing, as necessary to
represent the remainder of the Original Class Principal Balance of such Class. Such Certificated
Security shall be issued in substantially the form of Exhibit 2 hereto, and shall be executed and
authenticated by the Trustee on behalf of the Trust. Unless otherwise specified in the Trust
V-4-6
Agreement, Call Class Securities shall be issued as a single security in certificated fully
registered form. Each Call Class shall be issued without a Class Principal Balance and shall not
bear interest. Each Call Class may be held by no more than one Holder at any time.
(c)
Method of Distribution. Distributions on the Securities shall be made by the
Trustee on each Distribution Date (or, with respect to Certificated Securities, the Business Day
following each Distribution Date) to each Holder as of the related Record Date. Subject to
Section 8.04, distributions on the Book-Entry Securities shall be made through the facilities of
the Book-Entry Depository pursuant to instructions provided by the Trustee and/or the
Information Agent. Distributions on any Certificated Security shall be made by check mailed to
the Holder thereof at its address reflected in the Register as of the related Record Date or (ii)
upon receipt by the Trustee of a written request of a Holder accompanied by the appropriate
wiring instructions at least five Business Days prior to a Record Date, by wire transfer of
immediately available funds on the Business Day following the related and each subsequent
Distribution Date, to the account of such Holder, if such Holder holds Securities having
aggregate initial principal balances of at least $5,000,000. Notwithstanding the foregoing, the
final distribution in retirement of any Certificated Security will be made only upon presentation
and surrender of the certificate at the Corporate Trust Office. In the event of a principal or
interest payment error, the Trustee shall, pursuant to Ginnie Mae’s instructions, effect
corrections by the adjustment of payments to be made on future Distribution Dates.
(d)
Authorization, Execution, Authentication and Delivery of Securities. Certificated
Securities shall be executed by manual or facsimile signature by an authorized officer of the
Trustee, on behalf of the Trust, under the Trustee’s seal imprinted thereon (which may be a
facsimile). Certificated Securities bearing the manual or facsimile signatures of individuals who
were at any time authorized officers of the Trustee shall bind the Trustee, notwithstanding that
such individuals or any of them have ceased to hold such offices prior to the authentication and
delivery of such Certificated Securities or did not hold such offices at the date of such
Certificated Securities. No Certificated Security shall represent entitlement to any benefit under
the related Trust Agreement, or be valid for any purpose, unless there appears on such
Certificated Security a certificate of authentication substantially in the form provided for herein,
executed by the Trustee by manual signature, and such certificate of authentication upon any
Certificated Security shall be conclusive evidence, and the only evidence, that such Certificated
Security has been duly authenticated and delivered hereunder. All Certificated Securities shall
be dated the date of their authentication, except that Securities issued on the Closing Date shall
be dated as of the Closing Date. Book-Entry Securities shall be dated as of the date of their
issuance.
The manual execution of the Trust Agreement by an authorized officer of each of the
Trustee and the Sponsor shall be conclusive evidence that the Book-Entry Securities and the
Uncertificated Securities have been duly and validly authorized and validly issued by the Trustee
and are entitled to the benefits of the Trust Agreement.
Delivery of Book-Entry Securities occurs when the Registrar registers the transferee as
the registered owner of such Security. On the Closing Date, the Registrar shall register the
Book-Entry Depository as the registered owner of the Book-Entry Securities.
V-4-7
Upon execution and delivery of the Guaranty Agreement with respect to each Trust,
Ginnie Mae authorizes the issuance of the Securities, each of which is entitled to the benefits of
the following Ginnie Mae Guaranty. Each Certificated Security shall bear the following Ginnie
Mae Guaranty:
GUARANTY: THE GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION, PURSUANT TO SECTION 306(g) OF THE NATIONAL
HOUSING ACT, GUARANTEES THE TIMELY PAYMENT OF PRINCIPAL
AND INTEREST ON THIS SECURITY IN ACCORDANCE WITH THE
TERMS AND CONDITIONS SET FORTH HEREIN AND IN THE RELATED
TRUST AGREEMENT. THE FULL FAITH AND CREDIT OF THE UNITED
STATES OF AMERICA IS PLEDGED TO THE PAYMENT OF ALL
AMOUNTS THAT MAY BE REQUIRED TO BE PAID UNDER THIS
GUARANTY.
Section 2.02. Registration of Transfer and Exchange of Securities.
The Trustee shall keep one or more offices or agencies at which, subject to such
reasonable regulations as it may prescribe, the Trustee or another Person designated by the
Trustee and approved by Ginnie Mae shall be the Registrar and shall maintain a Register and
provide for the registration, transfer and exchange of Securities as herein provided.
Upon surrender for registration of transfer of any Certificated Security at the office of the
Trustee maintained for such purpose and upon satisfaction of the conditions set forth below in
this Section 2.02, the Trustee shall promptly execute, authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Securities of a like Class, tenor and
aggregate Percentage Interest.
At the option of the Holders, Certificated Securities may be exchanged for other
Securities of authorized denominations or Percentage Interests of like tenor and of a like
aggregate denomination or Percentage Interest, upon surrender of the Securities to be exchanged
at the office maintained for such purpose. Whenever any Certificated Securities are surrendered
for exchange the Trustee shall execute, authenticate and deliver the Securities that the Holder
making the exchange is entitled to receive. Every Certificated Security presented or surrendered
for transfer or exchange shall be duly endorsed (if so required by the Trustee) by, or be
accompanied by a written instrument of transfer in form satisfactory to the Trustee duly executed
by, the holder thereof or his attorney duly authorized in writing.
The Trustee may assess an appropriate service charge for any exchange or transfer of any
Certificated Security. The Trustee may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer or exchange of any
Security. The Trustee shall cancel and destroy all Certificated Securities surrendered for transfer
and exchange according to its standard procedures.
Section 2.03. Mutilated, Destroyed, Lost or Stolen Securities.
If (a) any mutilated Certificated Security is surrendered to the Trustee, or the Trustee
receives evidence to its satisfaction of the destruction, loss or theft of any Certificated Security,
V-4-8
and (b) there is delivered to the Trustee such security or indemnity as may be required by it to
save it harmless, then, in the absence of notice to the Trustee that such security has been acquired
by a bona fide purchaser, the Trustee shall promptly execute, authenticate and deliver, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen Certificated Security, a
new Certificated Security of like tenor, Class and Percentage Interest. Upon the issuance of any
new Certificated Security under this Section, the Trustee may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in relation thereto
and any other expenses (including the fees and expenses of the Trustee and its counsel)
connected therewith. Any duplicate Certificated Security issued pursuant to this Section shall
constitute complete and indefeasible evidence of ownership in the Trust, as if originally issued,
regardless of whether the lost, stolen or destroyed Certificated Security shall be found at any
time.
ARTICLE III
DISTRIBUTIONS ON THE SECURITIES
Section 3.01. Establishment of Accounts.
(a)
Book-Entry Depository Accounts. The Trustee shall maintain a Book-Entry
Depository Account with the Book-Entry Depository and, if any Permitted Underlying
Certificates are held through book-entry facilities other than the Book-Entry Depository, a Trust
Asset Depository Account at each applicable Trust Asset Depository. With respect to each
Trust, the Trustee shall account for funds in and all deposits to and withdrawals from the BookEntry Depository Account separately and on a Trust-by-Trust basis, clearly identifying the
Segregated Portion thereof.
(b)
Collection Account. The Trustee shall maintain an Eligible Account (the
“Collection Account”) for the purposes provided in Section 3.01(b) hereof. With respect to each
Trust, the Trustee shall account for funds in and all deposits to and withdrawals from the
Collection Account separately and on a Trust-by-Trust basis, clearly identifying the Segregated
Portions thereof. The depository records of the Trustee, or, as the case may be, the depository
institution or trust company at which the Collection Account is to be maintained, shall reflect in
respect of the Collection Account (i) that the Trustee, as depositor, is acting in a fiduciary
capacity on behalf of the Holders of Securities in respect of the Trust and Ginnie Mae, (ii) the
names and respective interest of such Holders and Ginnie Mae and (iii) that such Holders may be
acting in a fiduciary capacity for others.
(c)
Variance Account. With respect to each Trust, the Trustee shall establish and
maintain a separate Variance Account, which will be an Eligible Account. Amounts will be
credited to the Variance Account and withdrawals will be made from the Variance Account as
specified in Section 3.04. The Variance Account shall not be an asset of the Trust, and the
owner of the Variance Account solely for federal income tax purposes (and not for any other
purpose) will be Ginnie Mae. The depository records of the Trustee, or, as the case may be, the
depository institution or trust company at which the Variance Account is to be established, shall
reflect in respect of the (i) Variance Account that the Trustee, as depositor, is acting in a
fiduciary capacity on behalf of the Holders of Securities in respect of the Trust, (ii) the names
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and respective interests of such Holders, and (iii) that such Holders may be acting in a fiduciary
capacity for others. The Trustee shall invest amounts held in the Variance Account in Eligible
Investments approved by Ginnie Mae.
(d)
Board Approval. Prior to the establishment of any Trust Account, the board of
directors, a duly appointed loan committee, duly appointed trust committee, or duly authorized
officer, as the case may be, of the Trustee, or the depository institution or trust company at which
such Trust Account is to be established, as the case may be, shall approve the establishment of
such Trust Account in accordance with the organizational documents of such institution and any
applicable state or federal regulation, including, to the extent applicable and without limitation
12 C.F.R. §§ 9.7 and 550.5, each as amended from time to time, and such approval shall be
reflected in the minutes of such board (or committee), as applicable. The Trustee, or, as the case
may be, the depository institution or trust company at which any Trust Account is to be
established, shall maintain the Trust Agreement as an official record from the time of its
execution.
(e)
Segregated Portions. With respect to each Trust, each Trust Account required to
be established or maintained in accordance with this Trust Agreement shall include, and where
applicable a reference to such Trust Account herein or in the related Trust Agreement shall be
understood to be a reference to, a Segregated Portion of such Trust Account corresponding to the
related Trust.
Section 3.02. Certificate and Class Factors.
(a)
Certificate Factors. The Trustee shall use its reasonable best efforts to obtain the
Certificate Factors for the Trust MBS and the Underlying Certificate Factors for Permitted
Underlying Certificates on or before 10:00 a.m. Eastern Standard Time on the second Business
Day (or the third Business Day in the case of Trust MBS that are Ginnie Mae II Certificates)
preceding the related Distribution Date. In the event any Certificate Factors for the Trust MBS
or any Underlying Certificate Factors are not published or otherwise available as specified in the
preceding sentence, the Trustee shall immediately notify the Information Agent and Ginnie Mae
and follow the procedures in Section 3.02(b) hereof.
(b)
Unavailability of Certificate Factors or Underlying Certificate Factors. In the
event that the Underlying Certificate Factor for any Underlying Certificate or Certificate Factor
with respect to any Trust MBS has not been made available to the Trustee by 10:00 a.m. Eastern
Standard Time on the second Business Day (or the third Business Day in the case of Trust Assets
that are Ginnie Mae II Certificates) preceding a Distribution Date, unless otherwise directed by
Ginnie Mae, the Trustee shall assume for purposes hereof that such factors have not changed
from the preceding Ginnie Mae Certificate Payment Date or Underlying Certificate Payment
Date. As a result, the Principal Distribution Amount in respect of any Underlying Certificate (or
Trust Assets constituting a Ginnie Mae Platinum Certificate) described in the preceding sentence
shall be calculated on the basis of such assumed (i.e., unchanged) factors, with the effect that no
amounts in respect of principal attributable to such Underlying Certificate (or Ginnie Mae
Platinum Certificate) shall be distributable on the related Securities on the related Distribution
Date.
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(c)
Class Factors. Based on the Certificate Factors (subject to Section 3.02(b)), the
Trustee shall calculate the Class Factors, the Principal Distribution Amount and the Interest
Distribution Amount for the Distribution Date. The Trustee shall report the Class Factor for each
Callable Class (and other information as requested by Ginnie Mae from time to time) to the
Information Agent no later than 6:00 p.m. Eastern Standard Time on the second Business Day
preceding the Distribution Date; except that, in the case of a Class for which the related Trust
MBS evidence Ginnie Mae II MBS Certificates, the Class Factor for such Class, and any
Certificate Factor shall be reported by the Trustee to the Information Agent no later than
6:00 p.m. Eastern Standard Time on the third Business Day preceding the Distribution Date.
Section 3.03. Payments on the Trust Assets.
On each Ginnie Mae Certificate Payment Date and Underlying Certificate Payment Date,
as applicable, (i) the Book-Entry Depository shall be entitled to receive all payments in respect
of the Trust Assets held through the facilities of the Book-Entry Depository and (ii) each Trust
Asset Depositor shall be entitled to all payments in respect of the remaining Trust Assets held
through the facilities of such Trust Asset Depository and shall credit the related Trust Asset
Depository Account with all such amounts. In each case, such amounts shall be held by the
applicable depository, in trust for the exclusive benefit of the Trustee as the Holder of the Trust
Assets. All amounts received in respect of the Trust Assets shall be deposited by the close of
business on the date of receipt in the Collection Account for retention until the next Distribution
Date for the related Securities; provided, however, if the Ginnie Mae Certificate Payment Date or
Underlying Certificate Payment Date coincides with the Distribution Date for the related
Securities (i./e. such amount will be received and distributed on the same day), then such
amounts shall be immediately deposited into the Collection Account upon receipt of such funds,
and the Trustee shall immediately wire transfer such amounts to the Book-Entry Depository
Account for distribution pursuant to Sections 3.04(d) and (f) hereof.
Section 3.04. Distributions on the Securities.
(a)
Distribution Date Statement. No later than 2:00 p.m. Eastern Standard Time on
the first Business Day following each Distribution Date, the Trustee shall provide to the
Information Agent a Distribution Date Statement in such form as is approved by the Trustee and
Ginnie Mae. Each Distribution Date Statement will specify (i) the Trustee Fee payable, (ii)
amounts distributed on such Distribution Date as principal and interest on the Book-Entry
Securities from amounts on deposit in the Book-Entry Depository Account and (iii) amounts
distributed on such Distribution Date as principal and interest on the Certificated Securities from
amounts on deposit in the Collection Account.
(b)
Distribution Shortfall. No later than 10:00 a.m. Eastern Standard Time on the
Distribution Date the Book-Entry Depository shall determine the amount, if any, by which (A)
the amounts distributable as principal and interest on the Book-Entry Securities on such
Distribution Date, exceed (B) the positive amounts on deposit in the Book-Entry Depository
Account with respect to such Distribution Date (the “Depository Shortfall Amount”). The BookEntry Depository immediately shall notify Ginnie Mae of the amount of such deficiency, and the
account or accounts to which Ginnie Mae should transfer such amounts. In the event that there
are sufficient amounts in the Variance Account to cover the Depository Shortfall Amount, the
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Trustee shall withdraw the Depository Shortfall Amount from the Variance Account and wire
transfer such amount to the Book-Entry Depository Account no later than 10:00 a.m. Eastern
Standard Time, and shall immediately inform Ginnie Mae of any such transfer. Not later than
10:00 a.m. Eastern Standard Time on the Business Day preceding each Distribution Date the
Trustee shall determine the amount, if any, by which (A) the sum of (l) the amounts distributable
as principal and interest on the Certificated Securities on such Distribution Date and (2) the
Trustee Fee payable on such Distribution Date exceeds (B) the positive amount, if any, by which
(1) the amounts received on the Trust Assets on the related Ginnie Mae Certificate Payment Date
exceed (2) the amounts distributable as principal and interest on the Book-Entry Securities on
such Distribution Date (the “Certificated Shortfall Amount” and, together with the Depository
Shortfall Amount, the “Distribution Shortfall Amount”). If the Certificated Shortfall Amount is
greater than the amounts remaining on deposit in the Variance Account as of such Distribution
Date, the Trustee immediately shall notify Ginnie Mae of the amount of such deficiency, and the
account or accounts to which Ginnie Mae should transfer such amounts. In the event that there
are sufficient amounts in the Variance Account to cover the Certificated Shortfall Amount, the
Trustee shall withdraw the Certificated Shortfall Amount from the Variance Account and wire
transfer such account to the Collection Account no later than 10:00 a.m. Eastern Standard Time ,
and shall immediately inform Ginnie Mae of any such transfer.
Notwithstanding the above, on the Redemption Date the Trustee shall determine if funds
are due to Ginnie Mae for prior period advances or if funds are due from Ginnie Mae for interest
shortfalls. These amounts will be settled with Ginnie Mae prior to any distributions to Holders
on the Redemption Date. Ginnie Mae will not fund any shortfalls arising on the Redemption
Date; any such shortfalls are to be funded from the Redemption Amount.
(c)
Withdrawals from Book-Entry Depository Account. On each Distribution Date,
the Trustee shall withdraw from the Book-Entry Depository Account the excess, if any, of the
amount on deposit in such Book-Entry Depository Account over the amounts distributable as
principal and interest on the Book-Entry Securities for such Distribution Date and immediately
shall deposit such excess to the Variance Account, except for the sum of (i) any amounts
distributable on the Certificated Securities on such Distribution Date, which amounts shall be
deposited in the Collection Account, (ii) the amount of the Trustee Fee payable on such
Distribution Date and (iii) prior period Book-Entry Depository adjustments advanced by Ginnie
Mae.
(d)
Book-Entry Securities. The Trustee hereby directs the Book-Entry Depository to
withdraw from the Book-Entry Depository Account on each Distribution Date all amounts held
in such account, to the extent distributable as principal and interest on the Book-Entry Securities
on that Distribution Date. On each Distribution Date, the Book-Entry Depository will credit the
accounts of its record owners of such Book-Entry Securities in accordance with the standard
procedures of the Book-Entry Depository.
(e)
Certificated Securities. On the Business Day following each Distribution Date,
the Trustee shall distribute from the Collection Account all amounts distributable on the
Certificated Securities to the Holders thereof.
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(f)
Distributions. On each Distribution Date (or, with respect to Certificated
Securities, on the Business Day following each Distribution Date), the Trustee (and/or the BookEntry Depository on behalf of and pursuant to the instructions of the Trustee) shall make such
distributions on the Securities issued in respect of any Trust as shall be provided in the related
Trust Agreement. Any distributions or accruals of interest made on a Distribution Date on the
Securities issued in respect of a particular Trust shall be at the Interest Rate set forth in or as
otherwise described in the related Trust Agreement and in respect of the related Accrual Period.
(g)
Allocations of Distributions. The Holders of any Class entitled to receive
distributions on any Distribution Date shall receive such distributions on a pro rata basis among
the Securities of such Class based on the principal balance, notional balance or percentage
interest of such Securities. All distributions of principal on the Securities issued in respect of a
particular Trust shall be made as provided in the related Trust Agreement. Unless otherwise
indicated in the Trust Agreement, all distributions made on any Security on any Distribution
Date shall be applied first to any interest payable thereon on such Distribution Date and then to
any principal thereof.
(h)
Interest Accrual. Unless otherwise provided in the related Trust Agreement or
Section 7.01, the amount of interest accrued on each Class during an Accrual Period and to be
distributed thereon on the related Distribution Date shall be 1/12th of the applicable Interest Rate
multiplied by the Class Principal Balance of such Class prior to the distribution of principal on
such Distribution Date. Interest on the Securities will be computed on the basis of a 360-day
year consisting of twelve 30-day months.
(i)
Ginnie Mae Guaranty. With respect to each Callable Series, pursuant to the
Guaranty Agreement, Ginnie Mae, in exchange for the Ginnie Mae Guaranty Fee, has guaranteed
to each Holder of a (i) Callable Class Security the timely payment of principal and interest on
such Security in accordance with the terms of the applicable Trust Agreement; and (ii) Call Class
Security all amounts in respect of principal and interest, if any, due such Holder on the related
Redemption Date.
(j)
Ginnie Mae Guaranty Payments. If the Book-Entry Depository and/or the Trustee
discovers that payments on the Trust Assets underlying a Callable Series together with any
available funds (including any such funds in the Variance Account) will be inadequate to
distribute principal and interest to the Securities of such Callable Series on any Distribution Date
in accordance with the terms of the Trust Agreement, the Book-Entry Depository and/or the
Trustee, as the case may be, promptly shall inform Ginnie Mae and the Information Agent that a
Ginnie Mae Guaranty Payment must be made. In that event, Ginnie Mae (or its agent) will
transfer the amount of the shortfall to the Book-Entry Depository Account or Collection
Account, as applicable, in immediately available funds in accordance with Section 3.04(b)
hereof. At Ginnie Mae’s option, Ginnie Mae may instruct the Person designated by the Trustee
and acceptable to Ginnie Mae as the Person to hold funds on behalf of the Trustee (which Person
initially shall be The Bank of New York) to transfer such amount. In addition, if on the Final
Distribution Date of any Callable Class, the funds available to be distributed on such Class are
insufficient to reduce the Class Principal Balance of such Callable Class to zero, Ginnie Mae
shall make a Ginnie Mae Guaranty Payment in the amount of such insufficiency. In the event
that Ginnie Mae makes any Ginnie Mae Guaranty Payment to reduce the Class Principal Balance
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of any Callable Class to zero on its Final Distribution Date, such Class shall continue to be
treated as outstanding for all purposes, and Ginnie Mae shall be deemed to have purchased the
related Class and will be entitled to all subsequent distributions on such Class. For the avoidance
of doubt, the powers of the Trustee under the Trust Agreement include the right to take all
necessary and appropriate actions to enforce the Ginnie Mae Guaranty in accordance with the
terms hereof, to the extent that Ginnie Mae fails to make any required payment pursuant to the
Ginnie Mae Guaranty.
(k)
Separate Application of Payments. The application of payments pursuant to
Section 3.03 and this Section 3.04 shall be made separately in respect of each Trust, and each
reference to a Trust Account shall be understood to refer to the Segregated Portion of such
account corresponding to each Trust created hereunder.
(l)
Trustee Fee. On the Business Day following each Distribution Date, the Trustee
shall withdraw for its own account from the Collection Account, the Trustee Fee, if any, and any
investment earnings payable with respect to such Distribution Date.
Section 3.05. Reconciliation Process.
After a Distribution Date, at the request of Ginnie Mae, the Trustee shall reconcile
payments in accordance with The Ginnie Mae Multiclass Operational Guidelines. Such
reconciliation may involve credits and charges to one or more Trust Accounts.
Section 3.06. Appointment of Information Agent.
Except as otherwise provided in the Trust Agreement, at the direction of Ginnie Mae, the
Trustee of each Trust has appointed The Bank of New York to be the Information Agent. Ginnie
Mae has reserved the right to substitute at any time another Person as the Information Agent.
Section 3.07. Annual Reports.
Within a reasonable period of time after the end of each calendar year (but in no event
later than sixty days after the end of such calendar year), the Trustee shall furnish or cause to be
furnished to Ginnie Mae and to each Person who at any time during the calendar year was the
Holder of a Security a statement containing the amount of distributions allocable to principal and
the amount allocable to interest.
Section 3.08. Operational Guidelines.
Ginnie Mae has established operational guidelines designed to assist the operational
departments of the Trustee, the Book-Entry Depository, the Information Agent and Ginnie Mae
in complying with the requirements of this Article III. Ginnie Mae has reserved the right,
consistent with law, to alter or waive any of the requirements of the operational guidelines or to
institute other requirements as it deems appropriate. The Trustee hereby agrees to comply with
the Ginnie Mae Multiclass Operational Guidelines, as amended.
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ARTICLE IV
REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 4.01. Representations and Warranties of the Sponsor. The Sponsor hereby
represents and warrants as follows:
(a)
The Trust Agreement constitutes the legal, valid and binding agreement of the
Sponsor, enforceable against it in accordance with its terms, subject to bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors’ rights generally and to
general principles of equity regardless whether enforcement is sought in a proceeding in equity
or at law;
(b)
Neither the execution and delivery by the Sponsor of the Trust Agreement, nor the
consummation by the Sponsor of the transactions therein contemplated, nor compliance by the
Sponsor with the provisions thereof, will conflict with or result in a breach of, or constitute a
default under, any of the provisions of the articles of incorporation or by-laws of the Sponsor or
any law, governmental rule or regulation or any judgment, decree or order binding on the
Sponsor or any of its properties, or any of the provisions of any indenture, mortgage, deed of
trust, contract or other instrument to which the Sponsor is a party or by which it is bound, or
(ii) result in the creation of any lien, charge, or encumbrance upon any of its properties pursuant
to the terms of any such indenture, mortgage, deed of trust, contract or other instrument;
(c)
The information set forth in the Final Data Statement for such Callable Series
with respect to each Trust Asset is true and correct in all material respects as of the Closing Date;
(d)
The representations and warranties made by the Sponsor in the Sponsor
Agreement are true and correct in all material respects at and as of the Closing Date with the
same effect as if made on the Closing Date; and
(e)
The Sponsor has complied with all the agreements (including, without limitation,
the covenants in the Sponsor Agreement) and satisfied all the conditions on its part to be
performed or satisfied at or prior to the Closing Date.
It is understood and agreed that the representations and warranties set forth in this
Section 4.01 shall survive delivery of the Trust Assets to the Trustee and shall inure to the
benefit of the Trustee and Ginnie Mae notwithstanding any restrictive or qualified endorsement
or assignment. Upon the discovery by the Sponsor or the Trustee of a breach of the foregoing
representations and warranties, the party discovering such breach shall give prompt written
notice to the other party to the Trust Agreement and to Ginnie Mae, and in no event later than
two Business Days from the date of such discovery.
Section 4.02. Representations and Warranties of the Trustee. The Trustee hereby
represents and warrants as follows:
(a)
The Trustee acknowledges and declares that it holds and will hold the Trust MBS
identified on the Final Data Statement, and that it has agreed to hold all documents delivered to it
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with respect to such Trust Asset and all assets of the Trust in trust for the exclusive use and
benefit of all present and future Holders and, to the extent provided herein, Ginnie Mae.
(b)
The Trustee acquired the Trust Asset on behalf of the Trust from the Sponsor in
good faith, for value, and without notice or knowledge of any adverse claim, lien, charge,
encumbrance or security interest (including, without limitation, any federal tax liens or liens
arising under ERISA), (ii) except as permitted in the Trust Agreement, has not and will not, in
any capacity, assert any claim or interest in the Trust Asset and will hold (or its agent will hold)
such Trust Asset and the proceeds thereof in trust pursuant to the terms of the Trust Agreement,
and (iii) has not encumbered or transferred its right, title or interest in the Trust Asset.
(c)
On the Closing Date, the Trustee shall deliver to the Sponsor and Ginnie Mae a
certificate certifying that the Trustee (or an agent thereof) is in possession of the Trust Asset for
such Callable Series.
Section 4.03. Sponsor Breach; Repurchase Obligation; Substitution.
(a)
Within 90 days of the earlier of Sponsor’s discovery or notice to the Sponsor of
any breach by the Sponsor of any of its representations, warranties or covenants under a Sponsor
Agreement or the related Trust Agreement which breach, in the judgment of the Trustee or
Ginnie Mae, materially and adversely affects the value of any Trust Asset or the interest of the
Trust therein, the Sponsor shall (i) cure such breach, (ii) remove such affected Trust Asset from
the Trust and substitute one or more Ginnie Mae Platinum Certificates, Ginnie Mae MBS
Certificates or Permitted Underlying Certificates (A) bearing interest at the same rate as the
replaced Trust Asset, (B) with an aggregate outstanding principal balance equal to the
outstanding principal balance of the replaced Trust Asset, as reflected in the records of the Trust,
(C) with a maturity date no later than the maturity date of the replaced Trust Asset and no earlier
than six months prior to the maturity date of the replaced Trust Asset, (D) that are entitled to
payments on the following Ginnie Mae Certificate Payment Date (which shall be the same
Ginnie Mae Certificate Payment Date on which the replaced Trust Asset was payable) and (E)
that otherwise conform to the requirements of the Trust Agreement, or (iii) with the consent of
Ginnie Mae purchase the affected Trust Asset from the Trust; provided, however, that any such
substitution pursuant to clause (ii) above shall occur within the two-year period beginning on the
Closing Date unless an Opinion of Counsel addressed to and satisfactory to Ginnie Mae is
delivered to the effect that such substitution (x) will not cause the related Trust to fail to qualify
as a grantor trust for federal income tax purposes and (y) in the event the related Callable
Security is held by a REMIC, will not cause such REMIC to fail to qualify as a REMIC for
federal income tax purposes or result in the imposition of tax on such REMIC pursuant to Code
section 860F(a) or 860G(d).
(b)
The Sponsor shall effect a purchase of Trust Asset from the Trust by depositing
with the Trustee cash in an amount equal to the sum of (i) the then outstanding principal balance
of the Trust Asset to be purchased, as reflected in the records of the Trustee, plus (ii) interest on
that amount at the Certificate Rate for the period from the date on which the Trust ceases to be
entitled to distributions of interest on the repurchased Trust Asset through the next succeeding
Accounting Date. The Sponsor shall effect any substitution of a Trust Asset by depositing with
the Trust each Ginnie Mae Certificate to be substituted.
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ARTICLE V
CONCERNING THE TRUSTEE
Section 5.01. Duties of Trustee.
The Trustee undertakes to perform such duties and only such duties as are specifically set
forth in the related Trust Agreement. The Trustee, upon receipt of any and all resolutions,
certificates, statements, opinions, reports, documents, orders or other instruments furnished to the
Trustee that are specifically required to be furnished pursuant to any provision of such Trust
Agreement, or that may be furnished to the Trustee at its request, shall examine them to
determine whether they conform to the requirements of such Trust Agreement.
No provision of any Trust Agreement shall be construed to relieve the Trustee of such
Trust from liability for its own negligent action, its own negligent failure to act or its own
misconduct; provided, however, that:
(a)
The duties and obligations of the Trustee shall be determined solely by the
express provisions of the related Trust Agreement, the Trustee shall not be liable except for the
performance of such duties and obligations as are specifically set forth in the related Trust
Agreement, and no implied covenants or obligations shall be read into the related Trust
Agreement against the Trustee;
(b)
The Trustee shall not be personally liable for an error of judgment made in good
faith by a Responsible Officer or Responsible Officers of the Trustee, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts;
(c)
The Trustee shall not be personally liable with respect to any action taken or
suffered or omitted to be taken by it in good faith in accordance with the direction of Ginnie Mae
as to the time, method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the Trustee, under a Trust Agreement.
(d)
The Trustee with respect to any Trust shall not be personally liable with respect to
any action taken or suffered or omitted to be taken by it in good faith in accordance with the
direction of Holders of a Callable Series evidencing Percentage Interests aggregating not less
than 25% of each Class of Securities in such Callable Series effected thereby as to the
enforcement by the Trustee of the Ginnie Mae Guaranty.
The Information Agent shall not be deemed to be the agent of the Trustee, but rather the
agent of Ginnie Mae. The Trustee shall not be liable for any loss, liability or damage to any
Trust attributable to the acts or omissions of the Information Agent.
Section 5.02. Certain Matters Affecting the Trustee.
Except as otherwise provided in Section 5.01, with respect to any Callable Series:
(a)
The Trustee may request (at its sole expense, except as otherwise provided herein)
and rely conclusively upon and shall be protected in acting or refraining from acting upon any
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resolution, officers’ certificate, certificate of auditors or any other certificate, statement,
instrument, opinion, report, notice, request, consent, order, appraisal, bond or other paper,
Transfer Affidavit, communication or document prima facie in proper form and believed by it to
be genuine and to have been signed or presented by the proper party or parties;
(b)
The Trustee may consult with counsel, and any Opinion of Counsel shall be full
and complete authorization and protection from liability in respect of any action taken or
suffered or omitted by it hereunder in good faith and in accordance with such Opinion of
Counsel;
(c)
The Trustee shall be under no obligation to exercise any of the trusts or powers
vested in it by the related Trust Agreement or to institute, conduct or defend any litigation
thereunder or in relation thereto at the request, order or direction of Ginnie Mae or any of the
Holders of such Callable Series, pursuant to the provisions of the Trust Agreement, unless (i)
such directing party has offered to the Trustee reasonable security or indemnity against the costs,
expenses (including the fees and disbursements of Trustee’s counsel), and liabilities that may be
incurred by the Trustee with respect thereto or (ii) the need for or desirability of such institution,
conduct or defense results from the negligence of the Trustee;
(d)
The Trustee shall not be personally liable for any action taken or suffered or
omitted to be taken by it in good faith and believed by it to be authorized or within the discretion
or rights or powers conferred upon it by a Trust Agreement;
(e)
The Trustee shall not be bound to make any investigation into the facts or matters
stated in any resolution, certificate, statement, instrument, opinion, report, notice, request,
consent, order, approval, bond or other paper, communications or document, unless requested in
writing so to do by Ginnie Mae or the Holders of a Callable Series evidencing Percentage
Interests aggregating not less than 50% of all Callable Class Securities in such Callable Series
and the Holder of the related Call Class; provided, however, that the reasonable expense of such
investigation shall be paid by the party requesting the investigation, and the Trustee may require
reasonable indemnity against the costs, expenses or liabilities likely to be incurred by it in the
making of such investigation as a condition to proceeding;
(f)
The Trustee may execute any of the trusts or powers under any Trust Agreement
or perform any duties thereunder either directly or by or through agents or attorneys;
(g)
The Trustee may rely conclusively on all calculations and other information
provided to it by Ginnie Mae, the Information Agent or any other agent of Ginnie Mae; and
(h)
The Trustee shall not be obligated to post a bond or other form of surety in
connection with its service or status as Trustee under a Trust Agreement.
Section 5.03. Trustee Not Liable for Securities.
The Trustee makes no representations as to the validity or sufficiency of any Trust
Agreement or of any Securities (except that each Trust Agreement has been duly executed and is
binding on the Trustee and the Certificated Securities of each Callable Series shall be duly and
validly authenticated and delivered by the Trustee and the Book-Entry Securities of each
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Callable Series shall be duly and validly authorized and delivered by the Trustee) or of any Trust
Asset or any document related to any of the foregoing.
The Trustee shall have no responsibility or accountability with respect to the sufficiency
or adequacy of the following: (a) the Trust Asset and Ginnie Mae Guaranty to generate funds
necessary to make required payments on the Securities or (b) any Offering Circular or other
securities filings or reports required to be filed by any federal, state or local securities regulatory
authority, including but not limited to the United States Securities and Exchange Commission.
Section 5.04. Trustee May Own Securities.
The Trustee in its individual or any other capacity may become the owner or pledgee of
Securities, and may transact banking or trust business with Ginnie Mae, any Sponsor, the BookEntry Depository, any Beneficial Owner or any other Trustee with the same rights it would have
if it were not Trustee.
Section 5.05. Payment of Trustee’s Fees and Expenses.
With respect to the Distribution Date or Distribution Dates in each month, the Trustee
shall be paid compensation for all services rendered by it in the execution of the trusts created by
the Trust Agreement and in the exercise and performance of any of its powers and duties under
the Trust Agreement (which compensation shall not be limited by any provision of law in regard
to the compensation of a trustee of an express trust) in an amount equal to the Trustee Fee, if
any.
Section 5.06. Eligibility Requirements for Trustee.
The Trustee under any Trust Agreement must have been approved in writing by Ginnie
Mae to serve as Trustee under such Trust Agreement and at all times (a) must be organized and
doing business under the laws of the state of its incorporation or the United States of America,
(b) must be authorized under such laws to exercise corporate trust powers, (c) must have a (or
must be a member of a consolidated bank or financial holding company which has) combined
capital and surplus which meets the requirements as prescribed by Ginnie Mae from time to time
pursuant to a written notice provided by Ginnie Mae to the Trustee, (d) must be a member
depository institution of the FRS and (e) must be an entity subject to supervision or examination
by federal or state authority and (f) unless otherwise approved by Ginnie Mae, must have a long
term unsecured debt obligation rating from Moody’s Investors Inc. of at least Aa3 and a short
term debt or commercial paper rating from Standard & Poor’s Ratings Services, a division of
The McGraw Hill Companies, Inc. of at least A-1. In addition, neither the Trustee nor any
officer or professional working on the subject matter of the Trust may be currently suspended or
debarred by any governmental agency, nor may such Persons have been convicted of, or found
liable in a civil action for, fraud, forgery, bribery, falsification or destruction of records, making
false statements or any other offense indicating a lack of business integrity that seriously and
directly could affect the responsibility of the Trustee, or such officer or professional.
If the Trustee publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the purposes of this
Section the combined capital and surplus of the Trustee shall be deemed to be its combined
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capital and surplus as set forth in its most recent report of condition so published. If at any time
the Trustee ceases to be eligible in accordance with the provisions of this Section, the Trustee
shall notify Ginnie Mae in writing immediately and, if Ginnie Mae requests, shall resign
immediately in the manner and with the effect specified in Section 5.07 hereof.
Section 5.07. Resignation and Removal of the Trustee.
The Trustee may resign as Trustee of any Trust at any time and be discharged from the
trusts created under the related Trust Agreement by giving written notice thereof to Ginnie Mae
and upon appointment of a successor trustee pursuant to Section 5.08. Upon receiving such
notice of resignation, Ginnie Mae may appoint a successor trustee. If no successor trustee shall
have been so appointed and have accepted appointment within 90 days after the giving of such
notice of resignation, the resigning Trustee may petition any court of competent jurisdiction for
the appointment of a successor trustee acceptable to Ginnie Mae.
Ginnie Mae may remove the Trustee for cause at any time. For the purposes of this
Section “cause” shall mean one of the following:
(a)
The Trustee’s ceasing to be eligible in accordance with the provisions of
Section 5.06 hereof and failing to resign after written request therefor by Ginnie Mae or its
agent;
(b)
The Trustee’s inability to take any actions required under a Trust Agreement;
(c)
The Trustee’s failure to observe or perform any of its covenants set forth in the
related Trust Agreement;
(d)
A court or regulatory authority having jurisdiction in the premises, including
without limitation the FDIC and any similar state authority, entering a decree or order for relief
in respect of the Trustee in an involuntary case under any bankruptcy, insolvency, receivership,
conservatorship or other similar law or regulation, state or federal, now or hereafter in effect, or
appointing a receiver, conservator, assignee, trustee, custodian, sequestrator or other similar
official for the Trustee or for all or any substantial part of its property, or order the winding up or
liquidation of its affairs;
(e)
The Trustee’s commencing a voluntary case under any applicable bankruptcy,
insolvency, receivership, conservatorship or other similar law or regulation, state or federal, now
or hereafter in effect, or consenting to or acquiescing in the entry of an order for relief in an
involuntary case under any such law, or consenting to or acquiescing in the appointment of or
taking of possession by a receiver, conservator, liquidator, assignee, trustee, custodian,
sequestrator or other similar official for the Trustee or for all or any substantial part of its
property, or making a general assignment for the benefit of creditors, or the Trustee’s generally
failing to pay its debts as they become due;
(f)
The discovery that any Location-Based Tax, other tax or other charge levied or
threatened to be levied against a Trust on account of the situs of the Trustee could be avoided by
the appointment of a successor trustee, to the extent that Ginnie Mae determines that such tax or
other change may not be adequately covered by the Trustee; or
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(g)
The removal for cause of the Trustee as the trustee of any trust that has issued
securities guaranteed by Ginnie Mae.
Any resignation or removal of the Trustee and appointment of a successor trustee
pursuant to any of the provisions of this Section shall become effective upon acceptance of
appointment by the successor trustee as provided in Section 5.08 hereof but in no event shall
become effective until a successor has been appointed and has accepted the duties of the Trustee.
Any liability of the Trustee under a Trust Agreement arising prior to such termination shall
survive such termination.
To the extent that a successor trustee is entitled to receive reasonable compensation in
excess of compensation payable to the Trustee under the related Trust Agreement, the Trustee
shall indemnify Ginnie Mae and the Trust for the amount of such excess and shall provide such
security for such indemnity as Ginnie Mae may require.
Section 5.08. Successor Trustee.
Any successor trustee appointed to serve as Trustee of a Trust as provided in Section 5.07
hereof shall execute, acknowledge and deliver to Ginnie Mae and its predecessor trustee an
instrument accepting such appointment under the related Trust Agreement, and thereupon the
resignation or removal of the predecessor trustee shall become effective and such successor
trustee, without any further act, deed or conveyance, shall become fully vested with all the rights,
powers, duties and obligations of its predecessor under the Trust Agreement, with the same
effect as if originally named as trustee therein. The predecessor trustee shall immediately deliver
to the successor trustee all documents and statements held by it under the applicable Trust
Agreement, and the predecessor trustee shall execute and deliver such instruments and do such
other things as may reasonably be required for more fully and certainly vesting and confirming
in the successor trustee all such rights, powers, duties and obligations. The predecessor trustee
shall perform the duties and obligations imposed on it in this Section irrespective of any stay
arising from, any injunction or other process issued pursuant to, and any restriction or limitation
imposed by any bankruptcy, insolvency, receivership, conservatorship or other similar law or
regulation, state or federal, now or hereafter in effect, including without limitation 11 U.S.C.
§§ 105, 362 and 18 U.S.C. §§ 1821, 1823, each as amended from time to time. In the event the
predecessor trustee fails to perform the duties and obligations imposed on it in this Section,
Ginnie Mae may take any action it deems necessary or advisable to cause the performance of
such duties and obligations.
No successor trustee shall accept appointment as provided in this Section unless at the
time of such acceptance such successor trustee is eligible under the provisions of Section 5.06
hereof.
Upon acceptance of appointment by a successor trustee as provided in this Section, the
successor trustee shall mail notice of the succession of such trustee hereunder to all Holders at
their addresses as shown in the Register.
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Section 5.09. Appointment of Co-Trustee.
The Trustee shall be permitted to appoint a Person that either meets the eligibility
requirements to act as a Trustee hereunder or otherwise has been approved in writing by Ginnie
Mae to act as co-trustee with respect to the Trust. Any such co-trustee may perform any of the
duties and obligations of the Trustee hereunder, provided, however, that any such appointment of
any co-trustee shall not relieve the Trustee of any of its obligations and duties hereunder. The
Trustee shall continue to remain liable for the performance of all such duties and obligations
hereunder (including the obligation to indemnify Ginnie Mae pursuant to Section 5.11, 5.12),
irrespective of the appointment of any co-trustee to perform such duties or obligations on behalf
of the Trustee.
Section 5.10. Merger or Consolidation of Trustee.
Any corporation into which a Trustee may be merged or converted or with which it may
be consolidated or any corporation resulting from any merger, conversion or consolidation to
which such Trustee may be a party, or any corporation succeeding to the business of such
Trustee, shall be the successor of such Trustee under the related Trust Agreement without the
execution or filing of any paper or any further act on the part of any of the parties to the Trust
Agreement, provided such corporation is eligible under the provisions of Section 5.06 hereof.
Section 5.11. Indemnification of HUD and Ginnie Mae.
The Trustee for each Trust shall indemnify and hold harmless HUD and Ginnie Mae
(including each official, officer, employee and agent of HUD and Ginnie Mae) from and against
any and all losses, claims, demands, liabilities, or expenses (including, without limitation, all
attorneys’ fees and related charges and expenses) resulting, directly or indirectly, from any
Trustee default or other failure to perform under the related Trust Agreement. Without limiting
the foregoing, Ginnie Mae’s right to indemnification hereunder shall include the right to
reimbursement of any and all amounts paid by Ginnie Mae to any Holder of such Callable Series
as a result of any failure of the Trustee properly to calculate the amount of any required
distribution to any such Holder or to cause the proper distributions to be made to any such
Holder, together with interest thereon at a rate equal to the yield on three-month Treasury
securities.
Section 5.12. Performance Reviews by Ginnie Mae.
At its sole discretion, and from time to time, Ginnie Mae shall have the right to undertake
a full performance review of the Trustee and any subcontractors retained by the Trustee. Any
such review may involve the on site inspection of the Trustee’s (or any subcontractor’s) facilities
and the review of any books, records or documents of the Trustee (or any subcontractor) which
relate to the performance by the Trustee (or any subcontractor) of its duties hereunder. In
connection with any such review and inspection, the Trustee agrees to make available to Ginnie
Mae appropriate officers of the Trustee (or any subcontractor) and to otherwise cooperate with
such an undertaking by Ginnie Mae.
Section 5.13 Voting of the Permitted Underlying Certificates.
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In the event that a vote of the holders of Permitted Underlying Certificates is required
pursuant to the trust agreement governing any Underlying Trust, the Trustee shall vote in respect
of the Underlying Certificate in a manner that, in its sole judgment, is consistent with the best
interests of the holders of such Underlying Certificate. Notwithstanding the preceding sentence,
the Trustee shall not have a right to vote, under this Section 5.13, in any case where the exercise
of such right would constitute a variation of the investment of the Holders for purposes of United
States Treasury Regulation section 301.7701-4(c), and shall instead abstain from voting in such
instance.
ARTICLE VI
TERMINATION
Section 6.01. Termination by the Trustee.
On any Distribution Date on which the aggregate of the Class Principal Balances of the
Securities in a particular Callable Series, after giving effect to distributions otherwise to be made
on that date, is less than 1% of the aggregate of the Original Class Principal Balances, the
Trustee may (except to the extent the Holder of the related Call Class shall have previously given
notice to effect a redemption), but shall not be obligated to, effect a termination of the related
Trust and retirement of the related Securities by purchasing (or causing the sale to one or more
third parties of) all of the Trust Asset remaining in the Trust and depositing into the Book-Entry
Depository Account the Termination Price therefor.
The Trustee promptly shall mail notice of any termination to be caused by its purchase of
the Trust’s assets to Holders not earlier than the fifteenth day and not later than the twentieth day
of the month preceding the month of the final distribution. The notice shall specify (a) the final
Distribution Date (which shall be the next Distribution Date) upon which the Holders may
surrender their Certificated Securities to the Trustee for payment of the final distribution and
cancellation, (b) the office of the Registrar at which Holders may surrender their Certificated
Securities, (c) the amount of any final payment and (d) that the Record Date otherwise applicable
to that Distribution Date is not applicable because final distributions will be made only upon
presentation and surrender of the Certificated Securities at the office or agency of the Registrar
specified in the notice. The Trustee shall give this notice to Ginnie Mae at the time the notice is
given to Holders, and shall deposit the Termination Price into the Book-Entry Depository
Account no later than 10:00 a.m. eastern time on the final Distribution Date.
Upon presentation and surrender of the Certificated Securities pursuant to such a notice,
the Trustee shall, to the extent of available funds, cause to be distributed on the final Distribution
Date to Holders of any Certificated Securities, in proportion to their respective Percentage
Interests, an amount equal to the applicable Class Principal Balance, if any, together with any
accrued and unpaid interest thereon at the applicable Interest Rate.
With respect to the Book-Entry Securities, the Trustee shall, to the extent of available
funds, cause to be distributed on the Final Distribution Date to Holders of any Book-Entry
Securities, in proportion to their respective Percentage Interests, an amount equal to the
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applicable Class Principal Balance, if any, together with any accrued interest thereon at the
applicable Interest Rate.
Notwithstanding the foregoing, no amounts shall be distributable to Holders of Call Class
Securities upon any termination pursuant to this Article VI.
Section 6.02. Termination of Agreement
The respective obligations and responsibilities of the Sponsor and the Trustee created by
the Trust Agreement (other than the obligation of the Trustee to make certain payments to
Holders after the final Distribution Date and the obligation of the Trustee to send certain notices
as set forth herein) shall terminate upon (a) the payment of all principal and accrued interest on
the Securities and all other amounts due and owing by the Trustee under such Trust Agreement
and (b) the last action required to be taken by the Trustee on the final Distribution Date pursuant
to this Article VI following the earlier of (i) the purchase by the Trustee of all Trust Asset
remaining in the Trust pursuant to Section 6.01 hereof at a price equal to the Termination Price
and (ii) the final payment or other liquidation (or any advance with respect thereto) of the last
Trust Asset remaining in the Trust; provided, however, that in no event shall the Trust created
hereby continue beyond the expiration of 21 years less one day from the death of the last
survivor of the descendants of Joseph P. Kennedy, the late ambassador of the United States to the
Court of St. James’s, living on the date hereof.
Section 6.03. Termination Account.
If all of the Holders do not surrender their Certificated Securities for final payment and
cancellation on or before the final Distribution Date, the Trustee, on the final Distribution Date,
shall withdraw all funds remaining in the Trust Accounts and shall credit those remaining funds
to the Holders who did not surrender their Securities by depositing such funds in a Termination
Account for the benefit of such Holders, and the Trustee shall give a second written notice to the
remaining Holders to surrender their Securities for cancellation and receive the final distribution
with respect thereto. If within one year after the sending of the second notice all the Securities
shall not have been surrendered for cancellation, the Trustee shall take appropriate steps, at the
direction of Ginnie Mae, if Ginnie Mae chooses to provide direction, or may appoint an agent to
take appropriate steps, to contact the remaining Holders concerning surrender of their Securities,
and the cost thereof shall be paid out of the funds on deposit in the Termination Account. The
Trustee shall not invest or owe interest on funds in the Termination Account. The Trustee shall
maintain the Termination Account for five years, subject to applicable laws of escheatment, after
which time the assets shall be transferred to Ginnie Mae.
ARTICLE VII
REDEMPTION AND EXCHANGE
Section 7.01. Redemption.
As to any Callable Series or Security Group, the Holder of the related Call Class Security
shall have the right to direct the Trustee to redeem the related Callable Class, in whole but not in
part, on any Distribution Date commencing with the Initial Redemption Date.
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The amount payable by the Trustee in respect of any Callable Class Securities upon
redemption shall be equal to the related Redemption Price. The Trustee shall redeem the
Callable Class Securities only if (i) as of 11:30 a.m. (Eastern time) on the date the Trustee
receives notice from the Holder of the related Call Class directing the Trustee to redeem, the
related Trust Assets have a market value (exclusive of accrued interest) in excess of their
outstanding principal balance and (ii) the Trustee shall have received from the Holder of the Call
Class the Redemption Amount, the related Exchange Fee as provided below and the Call Class
Security (assigned to the Trustee). For purposes of clause (i) above, the “market value” of Trust
Asset shall be determined by reference to bid quotations obtained by the Trustee as of 11:30 a.m.
(Eastern time) on the date the Trustee receives notice of the intention to direct a redemption. Bid
quotations shall be obtained by the Trustee from the display identified as “TBA2” as posted
electronically by the Bloomberg Financial News Service; provided, however, in the event that
such quotations are not available or are believed inaccurate, the Trustee shall request that Ginnie
Mae (or its agent) (i) obtain bid quotations from three reputable dealers experienced in pricing
assets comparable to the Trust Asset; and (ii) calculate an average of such quotations. The
determination by the Trustee (or Ginnie Mae) of the market value as described above shall (in
the absence of manifest error) be final and binding.
The Holder of a Call Class Security proposing to effect a redemption and exchange as of
any Distribution Date may so notify the Trustee in writing at the Corporate Trust Office, on any
Business Day during the month preceding the month of redemption but shall do so no later than
11:00 a.m. (Eastern time) on the third Business Day preceding the last calendar day of the month
preceding the month of the proposed redemption. Any such notice delivered to the Trustee after
11:00 a.m. (Eastern time) on any Business Day shall be deemed to have been received prior to
11:00 a.m. (Eastern time) on the following Business Day. No later than the third Business Day
preceding the last calendar day of the month preceding the month of the proposed redemption the
Holder of the Call Class shall deposit with the Trustee the applicable Redemption Amount and
Exchange Fee and deliver to the Trustee the Call Class Security (assigned to the Trustee in form
satisfactory to the Trustee). Upon determination of a satisfactory market value and delivery of
the Redemption Amount, Exchange Fee and Call Class Security, the notice of redemption and
exchange shall become irrevocable and redemption of the related Callable Class Securities shall
be made on the following Distribution Date (each, a “Redemption Date”). The Trustee shall
distribute the Redemption Price to the Holders of the related Callable Class Securities, pro rata,
on the Redemption Date. Such distribution shall be in lieu of any distribution of principal and
interest that would otherwise be made on that date.
The Trustee shall notify Ginnie Mae and the Information Agent of a redemption when the
notice of redemption and exchange becomes irrevocable.
Section 7.02. Exchange.
On the first Business Day of the month of redemption, the Trustee shall deliver to the
Holder of the Call Class Security the related Trust Asset. In addition, on the Redemption Date,
the Trustee shall remit to the Holder of the Call Class (a) the excess of (i) the Redemption
Amount paid to the Trustee by the Holder of the Call Class and the distributions received on the
related Trust Asset in the month of redemption (net of any Trustee Fee payable to the Trustee on
the Redemption Date) over (ii) the Redemption Price for the Callable Class and (b) any interest
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earnings on the Redemption Amount as described in Section 7.03. For purposes hereof, any such
amounts distributed in respect of the Call Class shall constitute interest, to the extent they
represent investment earnings or interest payments on the Trust Asset, or principal, to the extent
they represent principal payments on the Trust Asset.
Section 7.03. Exchange Fee; Investment Earnings on Redemption Amount.
Upon receipt of the Exchange Fee and Redemption Amount, the Trustee shall (i) be
entitled to retain the Exchange Fee for its own account, and (ii) deposit the Redemption Amount
in an Eligible Account. Amounts on deposit in such Eligible Account shall be invested by the
Trustee in Eligible Investments.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
Section 8.01. Limitation of Rights of Holders.
The death or incapacity of any person having an interest, beneficial or otherwise, in a
Security shall not operate to terminate any Trust Agreement, nor entitle the legal representatives
or heirs of such person or any Holder for such person to claim an accounting, take any action or
bring any proceeding in any court for a partition or winding up of any Trust, nor otherwise affect
the rights, obligations and liabilities of the parties hereto or any of them.
Section 8.02. Control by Holders.
Except as otherwise provided in the Trust Agreement, no Holder in any Callable Series
shall have any right to vote or in any manner otherwise control the administration, operation and
management of any Trust, or the obligations of the parties hereto, nor shall anything herein set
forth, or contained in the terms of the Securities, be construed so as to constitute the Holders
from time to time as partners or members of an association; nor shall a Holder be under any
liability to any third person by reason of any action taken by the parties to this Trust Agreement
pursuant to any provision hereof.
Section 8.03. Amendment of Trust Agreements.
(a)
Any Trust Agreement may, with the consent of Ginnie Mae, and shall, at the
request of Ginnie Mae, be amended from time to time by the Trustee without the consent of the
Sponsor or any Holder or Holders to cure any ambiguity, to correct or supplement any provision
herein which may be inconsistent with any other provision herein, or to make any other
provisions with respect to this Trust Agreement, provided that any such amendment shall not
effect a change in the Termination Price, Distribution Dates, Record Dates, Accounting Dates,
terms of optional terminations or redemptions, the Ginnie Mae Guaranty or other payment terms
established by the Trust Agreement for the Callable Series which adversely affects in any
material respect the interests of any Holder and shall not impose an additional obligation on any
party who has not consented to such amendment; or (ii) except as provided in Section 8.03(b)
below, to make any other changes that Ginnie Mae requests.
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(b)
Notwithstanding any other provision herein, without the consent of each Holder
who may be adversely affected, the related Trust Agreement may not be amended to impair or
affect the right of such Holder to receive payment of principal and interest (including any
payment under the Ginnie Mae Guaranty in respect thereof) or to institute suit for the
enforcement of any such payment, all as herein provided, on or after the respective due date of
such payment. Notwithstanding the foregoing, the Trustee shall not allow any amendment to the
related Trust Agreement that would cause the Trust not to be treated as a grantor trust for United
States federal income tax purposes.
Section 8.04. Persons Deemed Owners.
The Trustee, Ginnie Mae and the Registrar, or any agent of the Trustee, Ginnie Mae or
the Registrar, may deem and treat the Holder of the Securities (which, with respect to the BookEntry Securities, will be the Book-Entry Depository (or its nominee)), as the absolute owner of
such Securities for the purpose of receiving distributions of principal or interest and for all other
purposes, and neither the Trustee, Ginnie Mae nor the Registrar, nor any agent of the Trustee,
Ginnie Mae or the Registrar, shall be affected by any notice to the contrary. All such
distributions so made to the Holder or upon such Holder’s order shall be valid and, to the extent
of the sum or sums so distributed, effectual to satisfy and discharge the duty for monies
distributable by the Trustee upon such Securities.
The Holder of a Book-Entry Security is not the Beneficial Owner of such Security. The
rights of a Beneficial Owner of a Book-Entry Security with respect to the Trustee, Ginnie Mae
and the Registrar may be exercised only through the Holder, which is the Book-Entry Depository
or its nominee. The Trustee, Ginnie Mae and the Registrar will have no obligation to a
Beneficial Owner of a Book-Entry Security because such obligations are satisfied directly to the
Book-Entry Depository.
Section 8.05. Third-Party Beneficiary; Ginnie Mae Subrogation.
The Trustee and the Sponsor hereby acknowledge and agree that Ginnie Mae is a thirdparty beneficiary of each Trust Agreement and entitled to enforce all obligations of any party to a
Trust Agreement. Ginnie Mae shall be subrogated to all the rights, interests, remedies, powers
and privileges of the Holders in respect of any Ginnie Mae Guaranty Payments, to the extent of
such payments.
Section 8.06. Preemption.
Pursuant to Section 306(g)(3)(E)(iv) of the National Housing Act (12 U.S.C. § 1721
(g)(3)(E)(iv)), Ginnie Mae may exercise any right or power granted to it in or recognized under
the Trust Agreement irrespective of any stay arising from, any injunction or other process issued
pursuant to, and any restriction or limitation imposed by any bankruptcy, insolvency,
receivership, conservatorship or other similar law or regulation, state or federal, now or hereafter
in effect, including without limitation 11 U.S.C. §§ 105, 362 and 18 U.S.C. §§ 1821, 1823, each
as amended from time to time.
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Section 8.07. Governing Law.
THE TRUST AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE UNITED STATES OF AMERICA.
INSOFAR AS THERE MAY BE NO APPLICABLE LAW OF THE UNITED STATES,
THE INTERNAL LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING
REGARD TO CONFLICTS OF LAWS PRINCIPLES OTHER THAN SECTIONS 5-1401
AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW) SHALL BE
DEEMED REFLECTIVE OF THE LAWS OF THE UNITED STATES OF AMERICA,
INSOFAR AS TO DO SO WOULD NOT FRUSTRATE THE PURPOSES OF ANY
PROVISION OF THE TRUST AGREEMENT OR THE TRANSACTIONS GOVERNED
THEREBY.
Section 8.08. Successors.
The Trust Agreement shall be binding upon and shall inure to the benefit of any
successor to the Trustee, the Sponsor, or Ginnie Mae, including any successor by operation of
law.
Section 8.09. Headings.
The Article and Section headings are for convenience only and shall not affect the
construction of the Trust Agreement.
Section 8.10. Notice and Demand.
Any notice, demand or other communication which by any provision of a Trust
Agreement is required or permitted to be given or served to or upon any Holder may be given or
served in writing by deposit thereof, postage prepaid, in the United States mail addressed to such
Holder as such Holder’s name and address may appear in the records of the Trustee or the
Registrar. Such notice, demand or other communication to or upon a Holder shall be deemed to
have been sufficiently given or made, for all purposes, upon mailing or transmission.
RECEIPT AND ACCEPTANCE OF A SECURITY BY OR ON BEHALF OF A
HOLDER, WITHOUT ANY SIGNATURE OR FURTHER MANIFESTATION OF ASSENT,
SHALL CONSTITUTE THE UNCONDITIONAL ACCEPTANCE BY THE HOLDER AND
ALL OTHERS HAVING A BENEFICIAL INTEREST IN SUCH SECURITY OF ALL THE
TERMS AND PROVISIONS OF THE RELATED TRUST AGREEMENT.
All demands, notices, approvals and communications under the Trust Agreement shall be
in writing and shall be deemed to have been duly given if personally delivered (including
overnight receipted delivery by a recognized courier service) to or mailed by registered mail,
postage prepaid, or transmitted by any standard form of written telecommunications and
confirmed by a similar mailed writing, to the address provided in the Trust Agreement. The
address for Ginnie Mae shall be as follows:
Government National Mortgage Association
550 Twelfth Street, SW, Third Floor
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Washington, D.C. 20024
Attention: President
Telephone: (202) 708-0926
Facsimile: (202) 485-0206
With copies to:
Department of Housing and Urban Development
Office of General Counsel
Room 9254
451 Seventh Street, S.W.
Washington, D.C. 20410-9000
Attention: Assistant General Counsel Ginnie Mae/Finance
Telephone: (202) 708-3260
Facsimile: (202) 708-8776
and the Legal Advisor as of the date of the demand, notice,
approval or communication.
The addresses of all other parties are set forth in the related Sponsor Agreement.
Section 8.11. Severability of Provisions.
Any part, provision, representation or warranty of any Trust Agreement that is prohibited
or that is held to be void or unenforceable shall be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining parts, provisions, representations or
warranties of that Trust Agreement. Any part, provision, representation or warranty of a Trust
Agreement that is prohibited or unenforceable or is held to be void or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining parts, provisions, representations or
warranties of that Trust Agreement, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
To the extent permitted by applicable law, the parties to each Trust Agreement waive any
provision of law which prohibits or renders void or unenforceable any provision of that Trust
Agreement.
Section 8.12. Counterparts.
The Trust Agreement may be executed in two or more counterparts, each of which when
so executed and delivered shall be an original, and all of which together shall constitute one and
the same instrument. The Trust Agreement shall inure to the benefit of and be binding upon the
parties thereto and their respective successors and assigns.
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ARTICLE IX
TAX ADMINISTRATOR
Section 9.01. Tax Administration.
Each Holder of a Security hereby designates the Tax Administrator, as its agent, to
perform certain tax administration functions of the related Trust.
(a)
With respect to each Trust, the Tax Administrator shall pay in a timely manner:
(i)
the amount of any federal, state and local taxes imposed on the Trust out
of amounts in the Trust Accounts (except for Location-Based Taxes attributable to the
Tax Administrator, which shall be paid by the Tax Administrator out of its own funds);
provided, however, that the Tax Administrator may decide, provided it has received the
written permission of Ginnie Mae, to pay or deposit such tax but subsequently to contest
such tax, or, if permitted by law, to refrain from paying such tax pending the outcome of
the contest of such tax, and
(ii)
out of its own funds, any and all tax related expenses (not including taxes)
of the Trust, including but not limited to any professional fees or expenses related to
audits or any administrative or judicial proceedings with respect to each such Trust that
involves the Internal Revenue Service or state or local tax authorities; provided, however,
that the Tax Administrator may pay out of amounts in the Trust Accounts the reasonable
cost of contesting a tax imposed on the Trust, provided that the Tax Administrator has
received Ginnie Mae’s written permission to engage in the contest.
(b)
With respect to each Trust, the Tax Administrator shall maintain all books,
records, and supporting documents that are necessary to comply with any and all aspects of the
Tax Administrator’s duties under the Trust Agreement and other Closing Documents.
(c)
For each Trust, the related Tax Administrator shall timely prepare, sign (or, as
appropriate, submit to the Trustee for signature) and file all of the federal, state, and local tax and
information returns of the Trust. The expenses of preparing and filing such returns shall be
borne by the Tax Administrator without any right to reimbursement by the Trustee or from
amounts on deposit in the Trust Accounts.
(d)
The Tax Administrator for each Trust shall assist the Trustee in performing in a
timely manner all reporting and other tax compliance duties that are the responsibility of the
Trust under federal, state or local tax law. Upon the Tax Administrator’s request, the Trustee
shall provide the Tax Administrator with a list of Securityholders of record and any other
information reasonably necessary to the Tax Administrator in the performance of its duties.
(e)
With respect to each Trust, the Tax Administrator and the Trustee shall take any
action or cause any Trust to take any action necessary to create or maintain the status of such
Trust as a grantor trust pursuant to Section 1.06 hereof.
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(f)
With respect to each Trust, neither the Tax Administrator nor the Trustee shall
take any action or fail to take any action, or cause any Trust to take any action or fail to take any
action that, if taken or not taken, could endanger the status of any such Trust as a grantor trust
pursuant to Section 1.06 hereof.
(g)
With respect to each Trust, unless otherwise provided in the related Trust
Agreement, the fiscal year of such Trust shall run from January 1 (or from the Closing Date, in
the case of the first fiscal year) through December 31.
(h)
The Trustee shall reimburse the Trust for any Location-Based Taxes.
Section 9.02. Resignation and Removal of the Tax Administrator.
(a)
Unless otherwise provided in the Trust Agreement, the Trustee shall act as Tax
Administrator. The Trustee may subcontract with another Person acceptable to Ginnie Mae to
undertake these obligations. In addition, Ginnie Mae reserves the right to require the Trustee to
subcontract with a Person designated by Ginnie Mae to perform these duties. Execution of a
subcontract shall not relieve the Trustee, however, of any responsibility for the tax
administration of the Trust or of liability for breaches of the obligations of the Tax Administrator
under the Trust Agreement.
(b)
If the Tax Administrator for a Trust is unable for any reason to fulfill its duties as
Tax Administrator, the Tax Administrator shall immediately notify Ginnie Mae and the Trustee.
Upon notification, the Trustee may appoint another Person acceptable to Ginnie Mae to act as
Tax Administrator or Ginnie Mae may direct the Trustee to appoint another Person to act in such
capacity.
(c)
Except as provided in a Trust Agreement, Ginnie Mae has reserved the right to
remove the Tax Administrator for cause at any time. For the purposes of this Section “cause”
shall mean one of the following:
(i)
The Tax Administrator’s inability to take any actions required under a
Trust Agreement;
(ii)
Failure on the part of the Tax Administrator to observe or perform any
other of its covenants set forth in the related Trust Agreement;
(iii) A court having jurisdiction entering a decree or order for relief in respect
of the Tax Administrator in an involuntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, sequestrator (or other similar official) of the Tax
Administrator or for all or substantially all of its property, or order the winding up or
liquidation of its affairs; or
(iv)
The Tax Administrator commencing a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or consenting to
the entry of an order for relief in an involuntary case under any such law, or consenting to
the appointment of or taking of possession by a receiver, liquidator, assignee, trustee,
V-4-31
custodian, sequestrator (or other similar official) of the Tax Administrator or for any
substantial part of its property, or making any general assignment for the benefit of
creditors, or the Tax Administrator failing generally to pay its debts as they become due.
(d)
Any resignation or removal of the Tax Administrator and appointment of a
successor Tax Administrator pursuant to any of the provisions of this Section shall become
effective upon acceptance of appointment by the successor Tax Administrator as provided in
Section 9.02(e) below. Any liability of the Tax Administrator under a Trust Agreement arising
prior to such termination shall survive such termination.
(e)
The successor Tax Administrator appointed to serve as Tax Administrator of a
Trust as provided in this Section shall execute, acknowledge and deliver to Ginnie Mae and its
predecessor Tax Administrator a written acceptance of such appointment under the related Trust
Agreement, and thereupon the resignation or removal of the predecessor Tax Administrator shall
become effective and such successor Tax Administrator, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and obligations of its
predecessor under such Trust Agreement, with the same effect as if originally named as Tax
Administrator therein.
* * *
V-4-32
Exhibit 1
FORM OF CALLABLE CLASS SECURITY
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
GUARANTEED CALLABLE PASS-THROUGH SECURITY
GINNIE MAE CALLABLE TRUST 20__-C__ (THE “TRUST”)
CLASS A[ ]
THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION, PURSUANT TO
SECTION 306(g) OF THE NATIONAL HOUSING ACT, GUARANTEES THE TIMELY
PAYMENT OF PRINCIPAL AND INTEREST ON THIS SECURITY IN ACCORDANCE
WITH THE TERMS AND CONDITIONS SET FORTH HEREIN AND IN THE RELATED
TRUST AGREEMENT. THE FULL FAITH AND CREDIT OF THE UNITED STATES OF
AMERICA IS PLEDGED TO THE PAYMENT OF ALL AMOUNTS THAT MAY BE
REQUIRED TO BE PAID UNDER THIS GUARANTY.
CLASS A[ ]:
CUSIP NO.:
CLOSING DATE:
INTEREST RATE: ________ %
MONTH OF FINAL DISTRIBUTION
CLASS PRINCIPAL BALANCE OF ALL
CLASS A [ ] SECURITIES AS OF
CLOSING DATE: $______________
DATE:
DENOMINATION: $ ________________
TRUSTEE:
SPONSOR:
NO. _______
V-4-33
This Security evidences a percentage interest in the distributions allocable to the Class indicated
on the face hereof issued by the Trust, the assets of which consist primarily of the Trust Asset.
THIS CERTIFIES THAT
______________________
is the registered owner of the Percentage Interest evidenced by this Security (obtained by
dividing the denomination of this Security by the aggregate of the denominations of all Securities
of this Class) in any monthly distributions allocable to this Class of Securities. The Securities
were issued by the Trust created pursuant to a trust agreement (the “Trust Agreement”) between
the Sponsor and the Trustee. To the extent not defined herein, the capitalized terms used herein
have the meanings assigned to them in the Glossary in the Multiclass Securities Guide in effect
on the Closing Date. This Security is issued under and is subject to the terms, provisions and
conditions of the Trust Agreement, to which the Holder of this Security, by virtue of the
acceptance hereof, assents and by which such Holder is bound.
Pursuant to the terms of the Trust Agreement, a distribution will be made on the [ ] day of
each month or, if such day is not a Business Day, the first Business Day thereafter (each, a
“Distribution Date”), commencing in the month following the month of the Closing Date, to the
Person in whose name this Security is registered at the close of business on the last Business Day
of the month immediately preceding the month of such distribution (the related “Record Date”),
in an amount equal to the product of the Percentage Interest evidenced by this Security and the
distributions, if any, allocable to this Class pursuant to the Trust Agreement. Notwithstanding
the foregoing, distributions on Certificated Securities of this Class will be made on the Business
Day following the Distribution Date.
This Security is limited in right of payment to certain collections in respect of the Trust
MBS (including the Redemption Amount therefor) and the Ginnie Mae Guaranty, all as more
specifically set forth in the Trust Agreement. This Security does not represent an obligation of
the Sponsor or the Trustee or either of their affiliates.
Distributions on Book-Entry Securities shall be made on each Distribution Date by wire
transfer of immediately available funds to the Book-Entry Depository. Distributions on any
Certificated Security shall be made on the Business Day following each Distribution Date (a) by
check mailed to the Holder thereof at its address reflected in the Register as of the related Record
Date or (b) upon receipt by the Trustee from a Holder of a written request and wire instructions
at least five Business Days prior to the related Record Date, by wire transfer of immediately
available funds on the Business Day following the related Distribution Date and each subsequent
Distribution Date to the account of such Holder, if such Holder holds Securities having an initial
aggregate principal balance of at least $5,000,000. Notwithstanding the foregoing, the final
distribution in retirement of any Security will be made only upon presentation and surrender of
the certificate at the Corporate Trust Office.
Subject to the limitations set forth in the Trust Agreement, the Trust Agreement may be
amended for any purpose, without the consent of any Holder or Holders. However, the Trust
Agreement may not be amended without the consent of the affected Holders if the effect of such
V-4-34
amendment is to alter the timing or amount of any required distribution of principal or interest
(including distributions made pursuant to the Ginnie Mae Guaranty) to any Holder, or the right
of any Holder to institute suit for the enforcement of any such payment. Any such consent by
the Holder of this Security shall be conclusive and binding on such Holder and upon all future
holders of this Security and of any Security issued upon the transfer hereof or in exchange
herefor or in lieu hereof regardless of whether notation of such consent is made upon this
Security.
As provided in the Trust Agreement and subject to certain limitations therein set forth,
the Holder of this Security may register the transfer of this Security in the Register by
surrendering this Security at the Corporate Trust Office of the Trustee. The surrendered Security
must be duly endorsed by, or accompanied by an assignment in the form below or other written
instrument of transfer in form satisfactory to the Trustee and the Registrar duly executed by, the
Holder hereof or such Holder’s attorney duly authorized in writing. Upon such surrender, one or
more new Securities of like tenor of authorized denominations will be issued to the designated
transferee or transferees.
The Securities of this Class initially are issuable in the form specified on the cover hereto
and in denominations specified in the Trust Agreement. As provided in the Trust Agreement and
subject to certain limitations therein set forth (a) Beneficial Owners of Book-Entry Securities
may request Certificated Securities for a fee of $25,000 per physical certificate, (b) Holders of
Certificated Securities may, upon request, surrender their Certificated Securities and become the
Beneficial Owner of a Book-Entry Security of like tenor and denomination and (c) all Securities
are exchangeable for new Securities of like tenor of authorized denominations, as requested by
the Holder surrendering the same. There will be a service charge for any such registration of
transfer or exchange, and the Trustee may require payment of a sum sufficient to cover any tax
or other governmental charge payable in connection therewith.
The obligations created by the Trust Agreement and the Trust shall terminate upon the
payment to Holders of all amounts held by or on behalf of the Trustee and required to be paid to
them pursuant to the Trust Agreement. This Certificate is subject to redemption as provided in
the Trust Agreement on any Distribution Date occurring on or after the Initial Redemption
Month. The Trust Agreement permits, but does not require, the Trustee to purchase all assets
held by the Trust, at a price determined as provided in the Trust Agreement, when the aggregate
of the Class Principal Balances of the Securities is less than 1% of the aggregate of the Original
Class Principal Balances of the Securities. Any exercise by the Trustee of such option would
effect early retirement of the Securities.
Unless the certificate of authentication herein has been executed by the Trustee, by
manual signature, this Security shall not represent entitlement to any benefit under the Trust
Agreement or be valid for any purpose.
V-4-35
IN WITNESS WHEREOF, the Trustee has caused this Security to be duly executed
under its official seal.
[TRUSTEE], AS TRUSTEE
By:
AUTHORIZED SIGNATORY
Attest:
AUTHORIZED SIGNATORY
Dated:
CERTIFICATE OF AUTHENTICATION
This is one of the Callable Class Securities referred to in the within-mentioned Trust Agreement.
, AS TRUSTEE
By:
AUTHORIZED SIGNATORY
V-4-36
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto
(Please print or typewrite name and address including postal zip code of assignee.)
the beneficial interest evidenced by the within Security and hereby authorizes the transfer of
registration of such interest to the above named assignee on the Register of the Trust.
I (We) further direct the Trustee to issue a new Security of like denomination or
Percentage Interest and like tenor, to the above named assignee and to deliver such Security to
the following address:
Dated:
Signature by or on behalf of assignor
Signature Guaranteed
V-4-37
DISTRIBUTION INSTRUCTIONS
The assignee should complete the following for purposes of future distributions:
Distributions shall be made by wire transfer or otherwise in immediately available funds, if
permitted hereunder, to
for the account of
account number
or, if mailed by check, to
Applicable statements should be mailed to
This information is provided by
the assignee named above, or
as its agent.
V-4-38
Exhibit 2
FORM OF CALL CLASS SECURITY
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
GUARANTEED CALLABLE PASS-THROUGH SECURITY
GINNIE MAE CALLABLE TRUST 20___-C___ (THE “TRUST”)
CLASS B[ ]
THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION, PURSUANT TO
SECTION 306(g) OF THE NATIONAL HOUSING ACT, GUARANTEES THE TIMELY
PAYMENT OF PRINCIPAL AND INTEREST ON THIS SECURITY IN ACCORDANCE
WITH THE TERMS AND CONDITIONS SET FORTH HEREIN AND IN THE
RELATED TRUST AGREEMENT. THE FULL FAITH AND CREDIT OF THE
UNITED STATES OF AMERICA IS PLEDGED TO THE PAYMENT OF ALL
AMOUNTS THAT MAY BE REQUIRED TO BE PAID UNDER THIS GUARANTY.
THIS SECURITY HAS NO PRINCIPAL BALANCE, DOES NOT BEAR INTEREST
AND WILL NOT RECEIVE ANY DISTRIBUTIONS EXCEPT AS PROVIDED IN THE
TRUST AGREEMENT. THIS SECURITY MAY NOT BE TRANSFERRED IN PART.
CLASS B[ ]:
CUSIP NO.:
CLOSING DATE:
PERCENTAGE INTEREST: 100%
TRUSTEE:
SPONSOR:
NO. 1
V-4-39
This Security evidences an interest in the Trust, the assets of which consist primarily of the Trust
Asset.
THIS CERTIFIES THAT
_________________________
is the registered owner of the Percentage Interest evidenced by this Security (set forth above).
The Securities were issued by the Trust created pursuant to a trust agreement (the “Trust
Agreement”) between the Sponsor and the Trustee. To the extent not defined herein, the
capitalized terms used herein have the meanings assigned to them in the Glossary in the
Multiclass Securities Guide in effect on the Closing Date. This Security is issued under and is
subject to the terms, provisions and conditions of the Trust Agreement, to which the Holder of
this Security, by virtue of the acceptance hereof, assents and by which such Holder is bound.
No distributions shall be made on this Security, except for any distribution of the
proceeds due such Holder in a redemption and exchange transaction as set forth below upon
presentation and surrender of this Security.
The Holder of this Security shall have the right to direct the Trustee to redeem the related
Callable Class Securities, in whole but not in part, on any Distribution Date commencing with
the Initial Redemption Date. The Trustee shall redeem the related Callable Class Securities only
upon the terms set forth in the Trust Agreement and upon payment of the related Redemption
Amount and Exchange Fee and surrender of this Security. The Holder of this Security may
effect a redemption and exchange by notifying the Trustee no later than 11:00 A.M. on the third
Business Day preceding the last calendar day of the month preceding the month of the proposed
redemption. Not later than the third Business Day preceding the last calendar day of the month
preceding the month of the proposed redemption the Holder of this Security must deposit with
the Trustee the Redemption Amount and Exchange Fee and surrender this Security as set forth in
the Trust Agreement. On the first Business Day of the month of redemption, the Trustee shall
deliver to the Holder hereof the related Trust Asset and surrender this Security. On the
Distribution Date in the month of redemption, the Trustee shall remit to the Holder of this
Security the aggregate amount required to be so remitted in accordance with the Trust
Agreement.
Subject to the limitations set forth in the Trust Agreement, the Trust Agreement may be
amended for any purpose, without the consent of any Holder or Holders. However, the Trust
Agreement may not be amended without the consent of the affected Holders if the effect of such
amendment is to alter the timing or amount of any required distribution of principal or interest
(including distributions made pursuant to the Ginnie Mae Guaranty) to any Holder, or the right
of any Holder to institute suit for the enforcement of any such payment. Any such consent by
the Holder of this Security shall be conclusive and binding on such Holder and upon all future
holders of this Security and of any Security issued upon the transfer hereof or in exchange
herefor or in lieu hereof regardless of whether notation of such consent is made upon this
Security.
V-4-40
As provided in the Trust Agreement and subject to certain limitations therein set forth,
the Holder of this Security may register the transfer of this Security in the Register by
surrendering this Security at the Corporate Trust Office of the Trustee. The surrendered Security
must be duly endorsed by, or accompanied by an assignment in the form below or other written
instrument of transfer in form satisfactory to the Trustee and the Registrar duly executed by, the
Holder hereof or such Holder’s attorney duly authorized in writing. Upon such surrender, a new
Security of like tenor will be issued to the designated transferee or transferees.
Unless the certificate of authentication herein has been executed by the Trustee, by
manual signature, this Security shall not represent entitlement to any benefit under the Trust
Agreement or be valid for any purpose.
V-4-41
IN WITNESS WHEREOF, the Trustee has caused this Security to be duly executed
under its official seal.
[TRUSTEE], AS TRUSTEE
By:
AUTHORIZED SIGNATORY
Attest:
AUTHORIZED SIGNATORY
Dated:
CERTIFICATE OF AUTHENTICATION
This is the Call Class Security referred to in the within-mentioned Trust Agreement.
, AS TRUSTEE
By:
AUTHORIZED SIGNATORY
V-4-42
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto
(Please print or typewrite name and address including postal zip code of assignee.)
the beneficial interest evidenced by the within Security and hereby authorizes the transfer of
registration of such interest to the above named assignee on the Register of the Trust.
I (We) further direct the Trustee to issue a new Security of like denomination or
Percentage Interest and like tenor, to the above named assignee and to deliver such Security to
the following address:
Dated:
Signature by or on behalf of assignor
Signature Guaranteed
V-4-43
DISTRIBUTION INSTRUCTIONS
The assignee should complete the following for purposes of future distributions:
Distributions shall be made by wire transfer or otherwise in immediately available funds, if
permitted hereunder, to
for the account of
account number
or, if mailed by check, to
Applicable statements should be mailed to
This information is provided by
the assignee named above, or
as its agent.
V-4-44
Exhibit 3
FORM OF ECONOMIC REPRESENTATION LETTER OF SPONSOR
[NOTE TO SPONSOR AND TRUST COUNSEL: The following letter is required to be
executed and delivered by the Sponsor in connection with the issuance of Callable Securities.]
Government National Mortgage Association
550 Twelfth Street, S.W., Third Floor
Washington, D.C. 20024
[Sponsor]
Re:
Ginnie Mae Callable Trust 20[ ]-C[ ]
Ladies and Gentlemen:
Ginnie Mae Callable Trust 20[ ]-C[ ] (the “Trust”) will consist of Callable Class
[A1] and related Call Class [B1]. This pair will represent the entire beneficial interest in a
separate pool consisting of a previously issued Ginnie Mae certificate (the “Underlying
Certificate”) with the characteristics shown in the disclosure document for Ginnie Mae REMIC
Trust 20[ ]-[ ] (the “Underlying Certificate Offering Circular”). The Call Class will have the
terms shown in the Offering Circular.
We are the Sponsor of the Trust. In connection therewith, we have made
determinations of the current market value of the Underlying Certificate. Taking into account,
among other things, (i) the determination of the current market value of the Underlying
Certificate, and (ii) the terms of the Call Class, we believe that there are various economically
reasonable circumstances under which the right of the Call Class to call the related Underlying
Certificate would not be exercised.
V-4-45
We make this representation with the understanding that [INSERT TRUST
COUNSEL] will rely on it in rendering its opinion with respect to Ginnie Mae Callable Trust 20[
]-[ ].
Very truly yours,
[SPONSOR]
By:
Its:
By:
Its:
V-4-46
FORM OF SPONSOR AGREEMENT
FOR CALLABLE TRUSTS
V-5-0
SPONSOR AGREEMENT
GINNIE MAE CALLABLE TRUST 20__-__
THIS SPONSOR AGREEMENT is entered into as of ___________ __, 20_, by and
between the GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (“Ginnie Mae”) and
___________, a(n) ___________ corporation (the “Sponsor”) in connection with the issuance by
Ginnie Mae Callable Trust 20__-_C_ of approximately $__________ aggregate principal amount
of Securities.
SECTION 1.
Standard Sponsor Provisions.
The parties acknowledge and agree that the terms of the Standard Sponsor Provisions for
Guaranteed Callable Pass-Through Securities, as set forth in the Ginnie Mae Multiclass
Securities Guide, ________ 1, ____ Edition[, as amended through __________, 20___], are
herein incorporated by reference and constitute part of this Sponsor Agreement as if set forth
herein in full.
SECTION 2.
Dates.
The Pool Information Date shall be __________ __, 20__; the Pool Wire Date shall be
___________ __, 20__; and the Closing Date shall be ____________ __, 20__. These dates may
not be changed without the written approval of Ginnie Mae.
SECTION 3.
Fees.
Based upon the information regarding the Securities set forth in the Offering Circular, the
Ginnie Mae Guaranty Fee will be $____________ but will increase if the size of the transaction
increases. [Note to Trust Counsel: The Ginnie Mae Guaranty Fee shall be the greater of (x) the
sum of 0.02% of the first $200,000,000 of Original Class Principal Balance of the related
Callable Class (or Classes) and 0.01% of any additional amounts; and (y) $40,000.]
SECTION 4.
Sponsor:
Notices.
_________________________________
_________________________________
_________________________________
_________________________________
Attention: ________________________
Telephone: _______________________
Telecopy: ________________________
V-5-1
Trust Counsel:
_________________________________
_________________________________
_________________________________
_________________________________
Attention: ________________________
Telephone: _______________________
Telecopy: ________________________
Accountants:
_________________________________
_________________________________
_________________________________
_________________________________
Attention: ________________________
Telephone: _______________________
Telecopy: ________________________
Trustee:
_________________________________
_________________________________
_________________________________
_________________________________
Attention: ________________________
Telephone: _______________________
Telecopy: ________________________
Trustee’s Counsel:
_________________________________
_________________________________
_________________________________
_________________________________
Attention: ________________________
Telephone: _______________________
Telecopy: ________________________
SECTION 5.
[Modifications to Standard Sponsor Provisions.
The following modifications of the Standard Trust Provisions shall apply to the
Securities:]
V-5-2
IN WITNESS WHEREOF, the parties have caused this Sponsor Agreement to be
executed and delivered by their duly authorized representatives as of the day and year first above
written.
GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION
By:___________________________________
Its:___________________________________
SPONSOR:
By:___________________________________
Its:___________________________________
V-5-3
STANDARD SPONSOR PROVISIONS FOR CALLABLE TRUSTS
V-6-0
______________________________________________________________________________
STANDARD SPONSOR PROVISIONS
FOR CALLABLE TRUSTS
______________________________
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
GUARANTEED CALLABLE PASS-THROUGH SECURITIES
____________
April 1, 2008 Edition
______________________________________________________________________________
V-6-1
STANDARD SPONSOR PROVISIONS FOR CALLABLE TRUSTS
THESE STANDARD SPONSOR PROVISIONS FOR CALLABLE TRUSTS are to be
incorporated by reference in each Sponsor Agreement entered into by and between the
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION and a Sponsor in connection with
each Series of Ginnie Mae’s Guaranteed Callable Pass-Through Securities.
SECTION 1. Definitions. Capitalized terms used and not otherwise defined herein
shall have the meanings assigned to them in the glossary contained in the Ginnie Mae Multiclass
Securities Guide in effect as of the date of the related Sponsor Agreement.
Trust: With respect to a Series, a Ginnie Mae Callable Trust.
Trust Assets: As to any Trust, any Ginnie Mae Platinum Securities, Ginnie Mae MBS
Certificates or Permitted Underlying Certificates conveyed thereto by, or on behalf of, the
Sponsor on the Closing Date.
Trust Agreement: With respect to a Series, a trust agreement relating to the Ginnie Mae
Callable Trust.
Trustee Limited Purpose Account: A limited purpose account maintained at the BookEntry Depository in which the Trust Assets underlying each Ginnie Mae Callable Trust will be
held before the Closing Date.
SECTION 2. Commitment to Sell and Purchase. Subject to satisfaction of the
conditions to Sponsor’s obligations set forth in these Standard Sponsor Provisions, on the
Closing Date the Sponsor will establish a Trust by executing a Trust Agreement in form and
substance substantially similar to the form included in the Ginnie Mae Multiclass Securities
Guide, with only such changes as are necessary to reflect the Securities Structure or as are
approved by Ginnie Mae. Pursuant to the Trust Agreement, the Sponsor (or its Participating
Affiliates) will transfer all of Sponsor’s and the Participating Affiliates’ interest in identified
Trust Assets to the Trust in consideration of specified Securities, representing undivided
beneficial ownership interests in the Trust.
SECTION 3. Commitment to Issue Ginnie Mae Guaranty. Subject to satisfaction of
the conditions to Ginnie Mae’s obligations set forth in the Sponsor Agreement, including these
Standard Sponsor Provisions, Ginnie Mae will guarantee the timely payment of principal of and
interest on each Security (in accordance with its terms) issued by the Trust pursuant to the Trust
Agreement. To effect the Ginnie Mae Guaranty, on the Closing Date, Ginnie Mae will execute a
Guaranty Agreement which will authorize the Trustee to issue the related Series of Securities
entitled to the benefits of the Ginnie Mae Guaranty. Each Book-Entry Security issued by the
Trustee pursuant to the authority of the Ginnie Mae Guaranty shall be entitled to the benefits of
the Ginnie Mae Guaranty and shall be valid and obligatory for all purposes. In the case of
Certificated Securities, the Guaranty Agreement will authorize the Trustee to authenticate and
deliver certificates representing the Securities, which will contain the Ginnie Mae Guaranty.
Only those Certificated Securities that bear a certificate of authentication, in the form set forth in
the Trust Agreement, manually executed by the Trustee, shall be entitled to the benefits of the
Ginnie Mae Guaranty or be valid or obligatory for any purpose. The certificate of authentication
V-6-2
of the Trustee, when manually executed by the Trustee, shall be conclusive evidence that the
Certificated Security has been duly authenticated and delivered and that the Holder of that
Security is entitled to the benefits of the Ginnie Mae Guaranty. Ginnie Mae will have no
obligation to issue the Ginnie Mae Guaranty except upon full satisfaction of all conditions to
closing. The obligations of Ginnie Mae on any Security or pursuant to the related Guaranty
Agreement will terminate upon the retirement of that Security pursuant to the terms of the related
Trust Agreement.
SECTION 4. Representations and Warranties of the Sponsor. The Sponsor hereby
represents and warrants, as of the date of the Sponsor Agreement, as follows:
(a)
The Sponsor and its Participating Affiliates have acquired or by the
Closing Date will acquire the Trust Assets in the ordinary course of its business, in good
faith, for value and without notice of any claim against or claim to any of the Trust Assets
on the part of any person.
(b)
Neither the Sponsor nor its Participating Affiliates have any actual or
constructive knowledge or notice of any interest in the Trust Assets contrary to the
interest of the Trustee under the Trust Agreement.
(c)
The Sponsor and its Participating Affiliates, as applicable, have the full
power, authority and legal right to transfer and convey the Trust Assets to the Trustee and
have the full power, authority and legal right to execute and deliver the Sponsor
Agreement, to engage in the transactions contemplated therein and to fully perform and
observe the terms and conditions thereof.
(d)
The execution and delivery by the Sponsor of the Sponsor Agreement are
within the legal power of, and have been duly authorized by all necessary actions on the
part of, the Sponsor. Neither the execution and delivery of the Sponsor Agreement by the
Sponsor, nor the consummation by the Sponsor of the transactions contemplated in the
Sponsor Agreement, nor compliance by the Sponsor with the provisions thereof, will (i)
conflict with or result in a breach of, or constitute a default under, any of the provisions
of the certificate of incorporation or bylaws of, or any law, governmental rule or
regulation, or any judgment, decree or order binding on, the Sponsor, its Participating
Affiliates or its properties, or any of the provisions of any indenture, mortgage, deed of
trust, contract or other instrument to which it or its Participating Affiliates are a party or
by which they are bound, or (ii) result in the creation or imposition of any lien, charge or
encumbrance upon any of its or its Participating Affiliates’ properties pursuant to the
terms of any such indenture, mortgage, deed of trust, contract or other instrument.
(e)
The Sponsor Agreement has been duly executed and delivered by the
Sponsor and constitutes a legal, valid and binding agreement of the Sponsor, enforceable
in accordance with its terms subject, as to enforcement of remedies, to applicable
bankruptcy, reorganization, insolvency or other similar laws affecting creditors’ rights
and to general principles of equity.
V-6-3
(f)
No consent, approval, authorization or order of or registration or filing
with, or notice to, any governmental authority or court is required for the execution,
delivery and performance of, or compliance by the Sponsor with, the Sponsor Agreement
or the consummation by the Sponsor of any other transaction contemplated thereby.
(g)
No certificate of an officer of the Sponsor or Participating Affiliate,
statement furnished pursuant hereto in writing, or report delivered pursuant to the terms
hereof to Ginnie Mae, any Affiliate or designee of Ginnie Mae, or the Trustee by the
Sponsor contains any untrue statement of a material fact, or omits a material fact
necessary to make the certificate, statement, or report not misleading in light of the
circumstances under which such certificate, statement or report is given.
(h)
Neither the Sponsor nor any of its Participating Affiliates has dealt with
any broker, investment banker, or agent or other person that may be entitled to any
commission or compensation in connection with the sale of Trust Assets to the Trust, or
any such commission or compensation has been paid in full.
(i)
There is no litigation pending or, to the Sponsor’s knowledge, threatened
against the Sponsor or any of its Participating Affiliates that could reasonably be
expected to affect adversely the transfer of the Trust Assets, the issuance of the Securities
or the execution, delivery, performance or enforceability of the Sponsor Agreement,
including the Sponsor’s performance under any indemnification provisions.
(j)
At the time of the issuance of the Securities, the Trust Assets will be assets
of the Trust and not assets of the Sponsor or any other person.
(k)
Immediately prior to the transfer of Trust Assets to the Trust, the Sponsor
or its Participating Affiliates will be the sole owners of, and will have good and
marketable title to, the Trust Assets, subject to no prior lien, mortgage, security interest,
pledge, charge or other encumbrance or any such encumbrance will be discharged, and
on the Closing Date, all right, title and interest in the Trust Assets shall be transferred to
the Trust and the Trust Assets shall be duly and validly delivered to the Trust, together
with any other documents or certificates required by the Sponsor Agreement. Following
the transfer of Trust Assets to the Trust, the Trust will own such Trust Assets, free and
clear of any lien, mortgage, security interest, pledge, charge or other encumbrance.
(l)
The transfer, assignment and conveyance of the Trust Assets by the
Sponsor and its Participating Affiliates pursuant to the Sponsor Agreement are not
subject to bulk transfer laws or any similar statutory provisions in effect in any applicable
jurisdiction.
(m)
The Trust Assets are of the type and with the payment characteristics
identified in the Offering Circular.
(n)
The Trust Assets consist of Ginnie Mae Platinum Certificates, Ginnie Mae
MBS Certificates or Permitted Underlying Certificates.
V-6-4
(o)
The consideration received by each of the Sponsor and any of its
Participating Affiliates upon the transfer of the Trust Assets under the Trust Agreement
constitutes fair consideration and reasonably equivalent value for the Trust Assets
transferred by it.
(p)
The Sponsor is solvent, and the transfer of the Trust Assets will not cause
the Sponsor or any of its Participating Affiliates to become insolvent; the transfer of the
Trust Assets is not undertaken with the intent to hinder, delay or defraud any of the
creditors of the Sponsor or its Participating Affiliates.
(q)
The Sponsor relinquishes and will cause its Participating Affiliates to
relinquish all rights to possess, control and monitor the Trust Assets transferred to the
Trust except such rights as any may have as a Holder of the related Securities.
(r)
The description of the plan for distribution of the Securities contained
under the heading “Plan of Distribution” in the Offering Circular related to the Securities
does not contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements contained
therein, in light of the circumstances under which they are made, not misleading.
(s)
The Sponsor has delivered to Ginnie Mae financial statements (including
the notes attached thereto) of the Sponsor for its two most recently completed fiscal
years, certified by independent certified public accountants. Such financial statements
have been prepared in accordance with generally accepted accounting principles
consistently applied. These financial statements fairly reflect the financial condition of
the Sponsor and the results of its operations as of the dates and for the periods presented.
Since the dates of such statements, no materially adverse changes in the financial
condition, business or operations of the Sponsor have occurred that could reasonably be
expected to affect adversely the transfer of the Trust Assets, the issuance of the Securities
or the execution, delivery, performance or enforceability of the Sponsor Agreement,
including the Sponsor’s performance under any indemnification provisions.
(t)
Structure.
The Offering Circular includes an accurate description of the Securities
(u)
Assuming the full and timely payment of principal and interest on the
Trust Assets (as those Trust Assets are identified in the Offering Circular), payments on
those assumed Trust Assets in all possible prepayment scenarios will be adequate to
make full and timely payments of principal and interest on the Callable Class Securities
in accordance with the terms of the Securities as described in the Offering Circular and
will pay in full each Callable Class Securities by its Final Distribution Date regardless of
the rate of prepayment of the Mortgage Loans ultimately underlying those assumed Trust
Assets.
(v)
Assuming the full and timely payment of principal and interest on the
Trust Assets, payments on the Trust Assets in all possible prepayment scenarios will be
adequate to make full and timely payments of principal and interest on the Callable Class
V-6-5
Securities in accordance with the terms of the Trust Agreement and will pay in full each
Class of Callable Class Securities by its Final Distribution Date regardless of the rate of
prepayment of the Mortgage Loans ultimately underlying the Trust Assets.
(w)
The Sponsor has obtained CUSIP Numbers for each Class of Securities.
SECTION 5. Covenants of the Sponsor. Subject to the conditions set forth in Section
8, the Sponsor hereby covenants and agrees as follows:
(a)
The Sponsor shall create, no later than the Pool Information Date, the
Final Data Statement, a final version of which will be attached to the Trust Agreement.
(b)
The Sponsor shall provide, in substantially the form attached as Exhibit 2,
a list showing the Weighted Average Lives (based on the Trust Assets transferred to the
Trust) for all Callable Class Securities at each prepayment speed (other than 0% PSA or
CPR) shown in the Weighted Average Lives tables in the Terms Sheet to the Offering
Circular and comparing such Weighted Average Lives to those shown in the Offering
Circular, showing both the differences and the percentage differences at each speed. For
this purpose, the Weighted Average Lives and the percentage differences should be
rounded to the nearest two decimal places. Weighted Average Lives shall be calculated
based on the attributes of the Ginnie Mae Certificates underlying the Trust Assets.
(c)
On the Pool Wire Date, the Sponsor shall transfer (or cause to be
transferred) the Trust Assets to the Trustee Limited Purpose Account, where they will be
held on behalf of the Sponsor and its Participating Affiliates, as applicable, until closing.
The Sponsor and its Participating Affiliates, as applicable, shall release the Trust Assets
to the Trustee on the Closing Date.
(d)
On the Closing Date, the Sponsor shall transfer to a special purpose
account of the Trustee sufficient funds to pay the Ginnie Mae Guaranty Fee and the fees
and expenses of any Participant who is to be paid from the proceeds of the transaction.
(e)
The Sponsor shall use its best efforts to satisfy each of the conditions to
Ginnie Mae’s obligations under the Sponsor Agreement.
(f)
The Sponsor shall provide or cause to be provided or shall make available
in electronic form a copy of the Offering Circular to each and every Person who
purchases or otherwise acquires a Security from the Sponsor (including any underwriter
of the Securities) prior to or simultaneously with the confirmation of sale of such Security
to such Person and shall comply with the guidelines issued from time to time by The
Securities Industry and Financial Markets Association relating to the distribution by
“Government Sponsored Enterprises” of offering materials related to securities exempt
from registration under the Securities Act of 1933 (the “GSE Guidelines”) and shall
comply with any applicable federal or state laws relating to the distribution, offer or sale
of any Security. In connection with its compliance with the GSE Guidelines, the Sponsor
shall amend its master agreement with each of its dealers in a letter substantially in the
form attached as Exhibit 1.
V-6-6
(g)
No Call Class Security shall be offered, sold or otherwise transferred by
the Sponsor (or any other underwriter of any such Call Class Security) to any investor,
unless such investor is an institutional “accredited investor,” as defined in Rule 501(a)(1),
(2), (3) or (7) of Regulation D of the Securities Act of 1933, as amended (an
“Institutional Accredited Investor”), that has substantial experience in mortgage-backed
securities and is capable of understanding and is able to bear the risks associated with an
investment in a Call Class Security. In addition, the Sponsor shall inform all other
broker/dealers to whom it has agreed to sell a Call Class Security at the Closing Date that
such Call Class Security is not intended to be distributed to any investor other than an
Institutional Accredited Investor.
(h)
The information concerning the Trust Assets to be included in the Final
Data Statement, including, but not by way of limitation, the outstanding principal balance
of each Trust Asset as of the Closing Date and the Certificate Rate of each Trust Asset,
will be true and correct in all material respects as of the Closing Date.
(i)
The Sponsor shall transfer or cause to be transferred to the Trust, Trust
Assets with the characteristics identified in the Offering Circular. The Weighted Average
Lives of the Trust Assets shall be calculated based on the attributes of the Ginnie Mae
Certificates underlying such Trust Assets. If the characteristics of the Trust Assets
transferred to the Trust are such that there is a material change in the investment
characteristics of any Class (including without limitation the projected yields of a Class)
as described in the Offering Circular or if there is a 10% or greater change in the
projected Weighted Average Life of any Callable Class Security, or in the case of a shortduration Callable Class Security (a Callable Class Security having a Weighted Average
Life of two years or less) if there is a difference of three or more months in the projected
Weighted Average Life, at the pricing prepayment speed, the Sponsor shall
(1)
deliver or cause to be delivered to Ginnie Mae and the
Financial Advisor, for posting on e-Access, a Supplemental Statement, in
substantially the form attached as Exhibit 3 and with all numbers therein
rounded to the nearest two decimal places, of the Weighted Average Lives
of the applicable Callable Class Security based upon the Trust Assets
actually included in the Trust to the Weighted Average Lives for such
Callable Class Securities at each of the prepayment speeds (other than 0%
PSA or CPR) included in the Weighted Average Lives table in the Terms
Sheet to the related Offering Circular,
(2)
deliver or cause to be delivered to the Financial Advisor
promptly after the closing an electronic file of the Supplemental Statement
described in Section 5(i)(1) hereof, and
(3)
notify each person with whom the Sponsor has entered into
an agreement for the purchase of any Securities of any applicable Class (a
“Purchaser”) of the variance and confirm to Ginnie Mae, in a letter
substantially in the form attached as Exhibit 4, that either (A) the
Purchaser’s decision to purchase the Securities of an applicable Class was
V-6-7
not affected by the variance or (B) the terms of the sale to the Purchaser
were revised to the Purchaser’s satisfaction.
(j)
In connection with any sale of a Security to a customer, the Sponsor shall
have reasonable grounds for believing that the proposed investment is suitable, in
accordance with the NASD Conduct Rules, for such customer.
(k)
The Sponsor shall deliver a list showing the initial offering price to the
public at which the first substantial amount of Securities of each Class will have been
sold, assuming that preliminary indications of interest are confirmed upon delivery of the
Offering Circular and that such sales are consummated, or an estimate of the sales price
to Trust Counsel and the Tax Administrator on or before the Closing Date. Within ten
Business Days after the Closing Date, the Sponsor shall provide the Tax Administrator
with any additional information concerning the Securities that the Tax Administrator
reasonably may require.
(l)
The Sponsor shall deliver or cause to be delivered to the Information
Agent, no later than the Pool Information Date, information regarding any Permitted
Underlying Certificates that are held in the Trust as the Information Agent may
reasonably require. With respect to any Underlying Certificate with an Issue Date prior
to the Closing Date, the Sponsor shall deliver or cause to be delivered to the Information
Agent, no later than the Pool Information Date, one copy of the related Underlying
Certificate Disclosure Document.
SECTION 6. Representations and Warranties of Ginnie Mae. Ginnie Mae hereby
represents and warrants to the Sponsor as follows:
(a)
Ginnie Mae is a wholly-owned corporate instrumentality of the United
States within the Department of Housing and Urban Development.
(b)
Pursuant to Section 308 of the National Housing Act, 12 U.S.C. § 1723,
the Secretary of HUD has adopted the bylaws of Ginnie Mae. The bylaws provide that
the President, each Vice President and each Assistant Vice President of Ginnie Mae are
severally expressly empowered in the name of Ginnie Mae to sign all contracts and other
documents, instruments, and writings that are required to be executed by Ginnie Mae in
the conduct of its business and affairs.
(c)
Ginnie Mae has the power and authority to make, execute, deliver and
perform the Sponsor Agreement and all the transactions contemplated hereby, including,
but not limited to, the authority to guarantee the timely payment of principal and interest
on the Securities in accordance with the Sponsor Agreement. Ginnie Mae has taken all
necessary action to authorize its execution, delivery and performance of the Sponsor
Agreement. The Sponsor Agreement constitutes the legal, valid and binding obligation
of Ginnie Mae enforceable in accordance with its terms.
(d)
The Ginnie Mae Multiclass Securities Guide contains an opinion of the
General Counsel to HUD to the effect that Ginnie Mae has the authority to guarantee
multiclass securities and that such guaranties will represent general obligations of the
V-6-8
United States backed by the full faith and credit of the United States. The Sponsor, the
Trustee, the Trust, the Trust Counsel, the Legal Advisors and Holders of the Securities
are entitled to rely on that opinion.
(e)
The execution, delivery and performance of the Sponsor Agreement by
Ginnie Mae do not violate any provision of any existing federal law, regulation or
executive order applicable to Ginnie Mae or any order or decree of any court, or any
mortgage, indenture, contract or other agreement to which Ginnie Mae is a party or by
which it or any significant portion of its properties is bound.
(f)
All payment obligations of Ginnie Mae under the Sponsor Agreement,
including specifically the Ginnie Mae Guaranty, are obligations of the United States
backed by the full faith and credit of the United States.
SECTION 7. Conditions to Obligation of Ginnie Mae. The obligation of Ginnie Mae
hereunder to guarantee the Securities is subject to the following conditions:
(a)
All of the representations and warranties of the Sponsor under this
Sponsor Agreement shall be accurate as of the Closing Date, and the Sponsor shall have
complied with all of its covenants and obligations under this Sponsor Agreement as of the
Closing Date.
(b)
Ginnie Mae, its Legal Advisor or another authorized agent shall have
received the following documents (collectively, the “Closing Documents”) in such forms
as are agreed upon and acceptable to Ginnie Mae, duly executed and delivered by all
signatories thereto:
(1)
The Trust Agreement, substantially in the form included in
the Ginnie Mae Multiclass Guide, with only such changes to the form as
have been approved by Ginnie Mae.
(2)
An Offering Circular, in form and substance acceptable to
Ginnie Mae.
(3)
Opinions of Trust Counsel, substantially in the form
included in the Ginnie Mae Multiclass Guide, with only such changes as
have been approved by Ginnie Mae and the Sponsor.
(4)
An opinion of counsel to the Trustee, substantially in the
form included in the Ginnie Mae Multiclass Guide, with only such
changes as have been approved by Ginnie Mae and the Sponsor.
(5)
A letter from the Accountants, dated the date of the
Offering Circular, confirming the accuracy of the numerical information
related to the Trust Assets and the numerical information related to the
Securities contained in the Offering Circular, substantially in the form
included in Part V of the Ginnie Mae Multiclass Guide and otherwise in
form and substance satisfactory to Ginnie Mae and the Sponsor.
V-6-9
(6)
A letter from the Accountants, dated the Closing Date, (i)
confirming the information in the list delivered by the Sponsor pursuant to
paragraph (b) of Section 5 hereof and (ii) confirming the numerical
information in the Final Data Statement, substantially in the form included
in Part V of the Ginnie Mae Multiclass Guide and otherwise in form and
substance satisfactory to Ginnie Mae and the Sponsor.
(7)
A certificate from the Trustee, substantially in the form of
the Trustee’s Receipt and Safekeeping Agreement for Callable Trusts
included in Part V of the Ginnie Mae Multiclass Guide, acknowledging
acceptance of the Trust Assets on behalf of the Trust.
(8)
Written instructions, in the form of the Closing Flow of
Funds Letter in Part V of the Ginnie Mae Multiclass Guide, from the
Sponsor to the Trustee regarding amounts to be remitted to Ginnie Mae in
payment of the Ginnie Mae Guaranty Fee and amounts to be remitted in
payment of fees to the Financial Advisor and any Participant who is to be
paid from the proceeds of the transaction.
(c)
The transaction and transaction documents shall be in form and substance
reasonably acceptable to the Legal Advisor and the Financial Advisor, and Ginnie Mae
shall have received written advice to that effect.
(d)
There shall be no pending or threatened action, suit or proceeding before
any court or governmental agency, authority or body involving the Sponsor, the Trust,
Ginnie Mae or any other party to the transactions contemplated hereby, adversely
affecting any such transaction, or challenging the validity of or seeking to enjoin such
transaction.
(e)
Ginnie Mae shall have received the Ginnie Mae Guaranty Fee and any
Participant who is to be paid from the proceeds of the transaction shall have been paid.
(f)
The Sponsor shall have executed a certification and agreement relating to
the absence of fraud on the part of the Sponsor as requested by Ginnie Mae.
(g)
Following the execution of this Sponsor Agreement, (i) nothing shall have
occurred or first come to Ginnie Mae’s knowledge that has caused Ginnie Mae, in its sole
discretion, to determine that completion of the transaction would jeopardize the integrity
of, or otherwise materially and adversely affect, the Ginnie Mae Multiclass Securities
Program and (ii) no Participant shall have been suspended from participation in the
Ginnie Mae Multiclass Securities Program.
(h)
fulfilled.
All other terms and conditions of the Sponsor Agreement shall have been
SECTION 8. Conditions to Obligation of Sponsor. The obligation of the Sponsor to
perform its obligations under the Sponsor Agreement is subject to the following conditions:
V-6-10
(a)
Receipt by the Sponsor of the Guaranty Agreement, substantially in the
form included in the Ginnie Mae Multiclass Guide, duly executed by Ginnie Mae.
(b)
Receipt of the Closing Documents listed in paragraph (b) of Section 7,
duly executed by the parties thereto.
(c)
The satisfaction of all rule-making and notice requirements related to the
transactions contemplated hereunder that are required to be completed prior to the
Closing Date.
(d)
There shall be no pending or threatened action, suit or proceeding before
any court or governmental agency, authority or body involving the Sponsor, the Trust,
Ginnie Mae or any other party to the transactions contemplated hereby, adversely
affecting any such transaction, or challenging the validity of or seeking to enjoin such
transaction.
(e)
All of the representations and warranties of Ginnie Mae under this
Sponsor Agreement shall be accurate as of the Closing Date.
SECTION 9.
Fees and Deposits.
(a)
On the Closing Date, after receiving confirmation from the Accountants
and the applicable Legal Advisor, Trust Counsel will notify the Trustee that the
transaction may close. The Sponsor shall cause funds for payment of the Ginnie Mae
Guaranty Fee to be made available in accordance with the Closing Flow of Funds
Instruction Letter such that, upon notification by Trust Counsel that the transaction may
close and the Trustee’s wiring of the Security identified in the Closing Flow of Funds
Instruction Letter, the Ginnie Mae Guaranty Fee will be released to the Trustee and
submitted to Ginnie Mae via pay.gov.
(b)
The Sponsor shall pay (i) the fees and expenses of the Trust Counsel and
the Accountants and (ii) the expense of printing the Offering Circular for the transaction,
and neither Ginnie Mae nor the Trustee shall have any responsibility for paying any such
fee or expense.
SECTION 10. Indemnification.
(a)
In the event that Ginnie Mae must make any payment pursuant to the
Ginnie Mae Guaranty as a result of the Sponsor’s breach of any of its representations,
warranties, covenants or obligations set forth herein or in the Trust Agreement, the
Sponsor shall promptly reimburse Ginnie Mae for any payments made, together with
interest thereon for the period from the date of such Ginnie Mae Guaranty payment
through the date of reimbursement at a rate equal to the rate of interest on three-month
United States Treasury securities as of the date of that Ginnie Mae Guaranty payment.
(b)
In the event that the Sponsor breaches its representations, warranties,
covenants or obligations set forth herein or in the Trust Agreement, the Sponsor shall
indemnify and hold harmless Ginnie Mae from and against any loss, damages, penalties,
V-6-11
fines, forfeiture, legal fees and related costs, judgments, and other costs and expenses
resulting from any claim, demand, defense or assertion based on or grounded upon, or
resulting from, such breach. Promptly after receipt by Ginnie Mae of notice of the
commencement of any such action, Ginnie Mae will, if a claim in respect thereof is to be
made against the Sponsor, notify the Sponsor in writing of the commencement thereof,
but the omission to so notify the Sponsor will not relieve the Sponsor from any liability
hereunder unless such omission materially prejudices the rights of the Sponsor. In case
any such action is brought against Ginnie Mae, and Ginnie Mae notifies the Sponsor of
the commencement thereof, the Sponsor will be entitled to participate therein, and to
assume the defense thereof, with counsel satisfactory to Ginnie Mae, and after notice
from the Sponsor to Ginnie Mae of its election so to assume the defense thereof, the
Sponsor will not be liable to Ginnie Mae under this Section for any legal or other
expenses subsequently incurred by Ginnie Mae in connection with the defense thereof
other than reasonable costs of investigation.
(c)
If an indemnification payment is made by the Sponsor to Ginnie Mae as
the result of a breach by the Sponsor of its representation made in paragraph (v) of
Section 4, Ginnie Mae will reimburse the Sponsor up to the amount of the payment and
interest thereon at the applicable Certificate Rate, as and only to the extent that Ginnie
Mae is entitled to distributions from the Trust as a result of a payment on the Ginnie Mae
Guaranty occasioned by the breach of the representation included in paragraph (v) of
Section 4.
SECTION 11. Notices.
All demands, notices, approvals and communications
hereunder shall be in writing and shall be deemed to have been duly given if personally delivered
to or mailed by registered mail, postage prepaid, or transmitted by any standard form of written
telecommunications and confirmed by a similar mailed writing, as follows:
(a)
If to Ginnie Mae:
Government National Mortgage Association
550 Twelfth Street, SW, Third Floor
Washington, D.C. 20024
Attention: President
Telephone: (202) 708-0926
Facsimile: (202) 485-0206
With copies to:
Department of Housing and Urban Development
Office of General Counsel
Room 9254
550 Twelfth Street, SW, Third Floor
Washington, D.C. 20024
Attention: Assistant General Counsel Ginnie Mae/Finance
Telephone: (202) 708-3260
V-6-12
Facsimile: (202) 708-8776
and the Legal Advisor as of the date of the demand, notice,
approval or communication.
(b)
If to the Sponsor or any other Participant, to the address indicated in the
Sponsor Agreement.
Any party may alter the address to which communications or copies are to be sent by
giving notice of such change of address in conformity with the provisions of this Section for the
giving of notice.
SECTION 12. Severability of Provisions. Any part, provision, representation or
warranty of the Sponsor Agreement that is prohibited or that is held to be void or unenforceable
shall be ineffective to the extent of such prohibition or unenforceability without invalidating the
remaining parts, provisions, representations or warranties hereof. Any part, provision,
representation or warranty of the Sponsor Agreement that is prohibited or unenforceable or is
held to be void or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to
the extent of such prohibition or unenforceability without invalidating the remaining parts,
provisions, representations or warranties hereof, and any such prohibition or unenforceability in
any jurisdiction shall not invalidate or render unenforceable such provision in any other
jurisdiction. To the extent permitted by applicable law, the parties hereto waive any provision of
law that prohibits or renders void or unenforceable any provision hereof.
SECTION 13. GOVERNING LAW. THE SPONSOR AGREEMENT AND THE
RIGHTS AND OBLIGATIONS OF GINNIE MAE AND THE SPONSOR UNDER THE
SPONSOR AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE UNITED STATES OF AMERICA.
INSOFAR AS THERE MAY BE NO APPLICABLE LAW OF THE UNITED STATES,
THE INTERNAL LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING
REGARD TO CONFLICTS OF LAWS PRINCIPLES OTHER THAN SECTIONS 5-1401
AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW) SHALL BE
DEEMED REFLECTIVE OF THE LAWS OF THE UNITED STATES OF AMERICA,
INSOFAR AS TO DO SO WOULD NOT FRUSTRATE THE PURPOSES OF ANY
PROVISION OF THE SPONSOR AGREEMENT OR THE TRANSACTIONS
GOVERNED THEREBY.
SECTION 14. Survival. Each party agrees that its representations, warranties and
covenants herein, and in any certificate or other instrument delivered pursuant hereto, shall be
deemed to be relied upon by the other party, notwithstanding any investigation heretofore or
hereafter made by the other party or on the other party’s behalf, and that the representations,
warranties and covenants made herein or in any such certificate or other instrument shall survive
the Closing Date.
SECTION 15. Miscellaneous.
(a)
The Sponsor Agreement may be executed in two or more counterparts,
each of which when so executed and delivered shall be an original, and all of which
V-6-13
together shall constitute one and the same instrument. The Sponsor Agreement shall
inure to the benefit of and be binding upon the parties thereto and their respective
successors and assigns.
(b)
Any person into which the Sponsor may be merged or consolidated or any
person resulting from a merger or consolidation involving the Sponsor or any person
succeeding to the business of the Sponsor shall be considered the successor of the
Sponsor under the Sponsor Agreement, without the further act or consent of either party.
The Sponsor Agreement cannot be assigned, pledged or hypothecated by any party
without the written consent of the other party to the Sponsor Agreement.
(c)
The Sponsor Agreement supersedes all prior agreements and
understandings relating to the subject matter thereof. Neither the Sponsor Agreement nor
any term thereof may be changed, waived, discharged or terminated orally, but only by
an instrument in writing signed by the party against whom enforcement of the change,
waiver, discharge or termination is sought. The headings in the Sponsor Agreement and
these Standard Sponsor Provisions are for purposes of reference only and shall not limit
or otherwise affect the meaning thereof.
SECTION 16. Request for Opinion. The Sponsor hereby requests and authorizes the
Trust Counsel to issue such legal opinions to Ginnie Mae, the Trust, the Trustee, the Financial
Advisor or the Legal Advisor as may be required by any and all documents, certificates or
agreements executed in connection with the Sponsor Agreement.
V-6-14
Exhibit 1
[Sponsor’s Letterhead]
_________ __, 20__
[Dealer Name]
[Dealer Address]
Dear Dealer:
Our records show that your firm has previously executed a Master Agreement with us
concerning the distribution of securities issued by the Federal Home Loan Mortgage Corporation
(“Freddie Mac”) or the Federal National Mortgage Association (“Fannie Mae”). This
Agreement requires compliance with the guidelines on Delivery of Offering Materials relating to
Securities of Government-Sponsored Enterprises (“GSE Guidelines”).
[Name of Sponsor] recently has entered into agreements with the Government National
Mortgage Association (“Ginnie Mae”) to distribute their securities. As a result of certification
requested in these agreements, we would like to amend our Master Agreement with you to
include in the definition of the term “issuer” Ginnie Mae.
This letter will serve as the required amendment. By your signature below, you agree to
comply with the GSE Guidelines with respect to securities guaranteed by Ginnie Mae. Please
have an authorized person sign both copies of this letter in the spaces indicated below and return
one letter to me in the enclosed envelope. Retain the other executed letter for your files.
Thank you for your prompt attention to this matter.
Sincerely,
___________________________________
(Sponsor Name)
By:________________________________
V-6-15
Seen and Agreed:
___________________________________
(Firm Name)
By:________________________________
(Authorized Signatory)
___________________________________
(Printed Name of Signatory)
___________________________________
(Title)
V-6-16
Exhibit 2
Classes
PRICING
WAL
____% [PSA][CPR]
CLOSING ABSOLUTE
WAL
DIFF
PERCENT
DIFF
PRICING
WAL
____% [PSA][CPR]
CLOSING ABSOLUTE
WAL
DIFF
PERCENT
DIFF
Classes
PRICING
WAL
____% [PSA][CPR]
CLOSING ABSOLUTE
WAL
DIFF
PERCENT
DIFF
PRICING
WAL
____% [PSA][CPR]
CLOSING ABSOLUTE
WAL
DIFF
PERCENT
DIFF
Classes
PRICING
WAL
____% [PSA][CPR]
CLOSING ABSOLUTE
WAL
DIFF
PERCENT
DIFF
PRICING
WAL
____% [PSA][CPR]
CLOSING ABSOLUTE
WAL
DIFF
PERCENT
DIFF
V-6-17
Exhibit 3
Government National Mortgage Association
Supplemental Statement
Guaranteed Callable Pass-Through Securities,
Ginnie Mae Callable Trust 20___-__C__
Reference is made to the Offering Circular Supplement, dated _______ __, 20__, for the
Ginnie Mae Callable Trust 20__-_C_ (the “Offering Circular”). Capitalized terms used herein
and not otherwise defined herein shall have the respective meanings assigned to them in the
Offering Circular.
[NOTE TO TRUST COUNSEL: THE INFORMATION BELOW IS FOR
SUPPLEMENTAL STATEMENTS REGARDING CERTAIN WAL VARIANCES.
SUPPLEMENTAL
STATEMENTS
ARE
REQUIRED
IF
THE
ACTUAL
CHARACTERISTICS OF THE TRUST ASSETS ARE SUCH THAT THERE IS A
MATERIAL CHANGE IN THE INVESTMENT CHARACTERISTICS OF ANY CLASS
AS DESCRIBED IN THE APPLICABLE OFFERING CIRCULAR SUPPLEMENT. IF
YOUR SUPPLEMENTAL STATEMENT IS UNRELATED TO WAL VARIANCES, YOU
WILL NEED TO DRAFT DISCLOSURE BELOW RELATING TO THE INVESTMENT
CHARACTERISTICS THAT MATERIALLY CHANGED FROM WHAT IS
DESCRIBED IN THE RELATED OFFERING CIRCULAR.]
Special Disclosure — Weighted Average Lives
For the Classes listed below, the projected Weighted Average Lives, based on the actual
Trust Assets delivered on the Closing Date (the “Closing WALs”), differ as shown from the
projected Weighted Average Lives of such Classes as set forth in the Offering Circular
Supplement (the “Pricing WALs”). The only Classes listed below are [those for which the
Closing WAL differs from the Pricing WAL by 10% or more] [and] [those for which the Closing
WAL is two years or less and the Closing WAL differs from the Pricing WAL by three or more
months] at the pricing prepayment speed of ___%. All numbers have been rounded to the
nearest tenth of a decimal point.
___% [PSA] [CPR] PREPAYMENT ASSUMPTION
Class
Pricing
WAL
Closing
WAL
Difference
Percentage
Difference
%
%
V-6-18
___% [PSA] [CPR] PREPAYMENT ASSUMPTION
Class
Pricing
WAL
Closing
WAL
Difference
Percentage
Difference
%
%
___% [PSA] [CPR] PREPAYMENT ASSUMPTION
Class
Pricing
WAL
Closing
WAL
Difference
Percentage
Difference
%
%
___% [PSA] [CPR] PREPAYMENT ASSUMPTION
Class
Pricing
WAL
Closing
WAL
Difference
Percentage
Difference
%
%
___% [PSA] [CPR] PREPAYMENT ASSUMPTION
Class
Pricing
WAL
Closing
WAL
Difference
Percentage
Difference
%
%
___% [PSA] [CPR] PREPAYMENT ASSUMPTION
Class
Pricing
WAL
Closing
WAL
Difference
Percentage
Difference
%
%
Supplemental Statement dated _______ __, 20__
V-6-19
Exhibit 4
____________ __, 20__
Government National Mortgage Association
550 Twelfth Street, S.W., Third Floor
Washington, D.C. 20024
Re:
Ginnie Mae Guaranteed Callable Pass-Through
Securities, Ginnie Mae Callable Trust 20 - C_
Ladies and Gentlemen:
We confirm that we have informed the purchasers from us of the Class __ Securities that,
on the basis of the actual Trust Assets constituting the Trust at the time of pool formation, the
projected Weighted Average Lives of the Class __ Securities at ____% [PSA] [CPR] would be
_____ years rather than ____ years as set forth in the Offering Circular dated _______________
__, 20__. We also have informed such purchasers that a Supplemental Statement comparing the
projected Weighted Average Lives for such Classes at all percentages of [PSA] [CPR] shown in
the Offering Circular will be posted to e-Access.
The persons at each of the purchasers with whom we ordinarily negotiate trades have
each informed us that either (A) the purchaser’s decision to purchase the Class __ Securities has
not been affected by the projected Weighted Average Lives, based on the actual Trust Assets, as
set forth above or (B) the terms of the sale to the purchaser have been revised to the purchaser’s
satisfaction. For the initial distribution period, if we buy or sell any of the Class __ or Class __
Securities, we will be responsible for disclosing to our customers the applicable projected
Weighted Average Life of such Class or Classes, based on the actual Trust Assets, as set forth
above.
We acknowledge that you are agreeing to proceed with the closing of Ginnie Mae 20__-_
upon reliance upon the representations in this certificate.
[SPONSOR]
By: _____________________________________
[Title of Signatory]
V-6-20
FORM OF GINNIE MAE CALLABLE SECURITIES GUARANTY AGREEMENT
V-7-0
GINNIE MAE CALLABLE SECURITIES GUARANTY AGREEMENT
Pursuant to Section 306(g) of the National Housing Act, the Government National
Mortgage Association (“Ginnie Mae”) hereby guarantees the timely payment of principal and
interest on the Ginnie Mae Guaranteed Callable Pass-Through Securities in accordance with their
respective terms as established by the Callable Trust Agreement, dated as of __________ __,
20__, relating to Ginnie Mae Callable Trust 20__-C_ (the “Callable Trust Agreement”).
Capitalized terms used but not defined herein shall have the meanings assigned to them in the
Callable Trust Agreement.
Ginnie Mae hereby authorizes the Trustee under the Callable Trust Agreement to issue
the Series 20__-C_ Securities provided for issuance thereunder, each of which Security shall be
entitled to the benefits of the guaranty set forth below, and, in the case of Certificated Securities,
to authenticate and deliver certificates representing such Securities, with the form of each such
certificate to include the following guaranty:
GUARANTY: THE GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION, PURSUANT TO SECTION 306(g) OF THE
NATIONAL HOUSING ACT, GUARANTEES THE TIMELY
PAYMENT OF PRINCIPAL AND INTEREST ON THIS
SECURITY IN ACCORDANCE WITH THE TERMS AND
CONDITIONS SET FORTH HEREIN AND IN THE
CALLABLE TRUST AGREEMENT. THE FULL FAITH AND
CREDIT OF THE UNITED STATES OF AMERICA IS
PLEDGED TO THE PAYMENT OF ALL AMOUNTS THAT
MAY BE REQUIRED TO BE PAID UNDER THIS
GUARANTY.
IN WITNESS WHEREOF, Ginnie Mae has executed and delivered this Guaranty
Agreement as of the date set forth below.
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
By:________________________________________________
Dated:________________________
V-7-1
FORM OF TRANSACTION INITIATION LETTER FOR CALLABLE SECURITIES
V-8-0
[GINNIE MAE LETTERHEAD]
[Date]
Via Telecopy
[Sponsor]
[Sponsor’s Address]
Transaction Initiation Letter
Ginnie Mae Callable Trust 20[ ]-C[ ]
Ladies and Gentlemen:
In a recent telephone conversation, you indicated that __________________ (“Sponsor”)
intends to sponsor a Ginnie Mae Callable Trust offering under the terms of the Ginnie Mae
Multiclass Securities Guide (the “Guide”). Capitalized terms used in this letter have the
meanings assigned to them in the Guide currently in effect. Sponsor has provided a written
description of the preliminary Securities Structure, which is attached to this letter, and answered
the questions set forth in the Ginnie Mae Financial Advisor’s Pricing Checklist for Sponsor (the
“Checklist”), also attached to this letter.
Sponsor will notify Ginnie Mae and its Legal Advisor and Financial Advisor promptly in
writing of any changes to the Securities Structure or to answers to the questions set forth in the
Checklist and will submit a final Securities Structure no later than the date specified in the
Checklist (the “Final Structure Date”). Ginnie Mae reserves the right to approve or reject the
final Securities Structure. If Ginnie Mae does reject the final Securities Structure, Ginnie Mae
will specify the reasons for its rejection in writing.
You are reminded that Ginnie Mae may require that certain Classes be designated
Increased Minimum Denomination Classes, that such Classes must have high minimum purchase
prices (described in the Guide in “Ginnie Mae Multiclass Securities Program Conventions”) and
that you may offer or sell such Classes only to institutional investors that have substantial
experience in mortgage-backed securities and that are capable of understanding and able to bear
the risks associated with such an investment.
Based upon its preliminary evaluation of the proposed transaction and its review of the
Checklist, Ginnie Mae has assigned the following designation to the proposed Ginnie Mae
Callable Trust Securities offering: Series 20[ ]-C[ ].
After a final Securities Structure for the transaction has been established, an Offering
Circular will be printed, and the Sponsor and Ginnie Mae will sign a Sponsor Agreement at the
time of the printing, which will supersede this letter and will constitute a binding contract
between the parties, subject to the terms and conditions therein. If no Sponsor Agreement has
been executed on or before the anticipated date of the Sponsor Agreement (as specified in the
attached Checklist), neither Ginnie Mae nor the Sponsor will have any obligation to proceed with
the contemplated transaction.
V-8-1
Ginnie Mae believes that this letter (together with the attachments to this letter) fairly
describes the substance of the preliminary discussions with Sponsor. Sponsor is instructed to
confirm Sponsor’s agreement with the terms of this letter and its attachments by executing this
letter at the space provided below and is further instructed to return a fully-executed copy to
Ginnie Mae within two days of this date by telecopy to (202) 485-0221. This letter does not,
however, constitute a legally binding obligation on the part of Sponsor or Ginnie Mae.
Very truly yours,
GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION
By: _________________________________
Its: ________________________________
ACKNOWLEDGED:
[Sponsor]
By:
____________________________________
Name: ____________________________________
Title: ____________________________________
Date: ____________________________________
V-8-2
PRICING CHECKLIST FOR SPONSOR
The purpose of this checklist is to gather information from a Sponsor about its proposed Ginnie
Mae REMIC Trust in order to support Ginnie Mae’s decision to initiate a transaction. The responses to
the following questions were obtained from the Sponsor, [Insert Sponsor Name], during one or more
telephone calls with [Insert Contact Name] on [Insert Date], Year.
1.
Characteristics of the proposed Ginnie Mae Certificates to be conveyed to the Ginnie Mae
REMIC Trust:
a)
b)
c)
d)
e)
Pool Type (Ginnie Mae I or Ginnie Mae II)
Interest Rate Type (Fixed or Adjustable)
Underlying Mortgage Loan Type (SF or Other)
Aggregate Remaining Balance
Certificate Rate
2.
Anticipated key dates:
Final Structure Date
Latest Sponsor Agreement/Print Date
Pool Information Date
Pool Wire Date
Closing Date
3.
Identification of proposed Ginnie Mae–approved key Participants:
Role
Ginnie Mae–
Approved
Name
Yes
No
Co-Sponsor
Trustee
Trust Counsel
Co-Trust Counsel
Accountant
4.
5.
An announcement of the characteristics of the Trust Assets to be conveyed to the proposed
Ginnie Mae REMIC Trust will be posted to e-Access and distributed to the press shortly after
Noon Eastern Time on the second Business Day after pricing. Who are the contact persons to be
identified in the announcement?
Sponsor:
Phone:
Co-Sponsor:
Phone:
Characteristics of the proposed Underlying REMIC Certificates or Ginnie Mae Callable Class
Securities to be conveyed to the Ginnie Mae REMIC Trust:
a. Guarantor/Issuer (Ginnie, Fannie or Freddie)
b. Trust Name/Number
V-8-3
c.
d.
e.
f.
g.
h.
i.
j.
Tranche Name/Number
Principal Type
Interest Type
Certificate Rate
Remaining Principal Balance
Underlying Certificate/Security Payment Due
Proposed Ginnie Mae REMIC Security Distribution Date
Characteristics of the underlying Ginnie Mae Certificates:
i. Pool Type (Ginnie Mae I or Ginnie Mae II)
ii. Interest Rate Type (Fixed or Adjustable)
iii. Underlying Mortgage Loan Type (SF or Other)
iv. Certificate Rate
Yes
6.
No
Does the proposed Ginnie Mae REMIC Securities Structure comprise any Class:
a)
that is a "jump" Class or nonstandard, esoteric, particularly risky, new or
difficult for investors to understand, including a type of Class that has never
been issued previously in the Ginnie Mae Multiclass Securities Program?
b)
that is either:
y Class whose value will be highly sensitive to prepayments,
y Class whose value will be highly sensitive to an index (e.g., LIBOR), or
y customarily a Class type for which a yield sensitivity table is provided
If so which Class(es)? Insert class types below (i.e. PO, Inverse Floater and IO
Classes)
Class Type(s) ______________________________________________________
c)
d)
Are you aware that for each Class identified in response to question 6.b,
Ginnie Mae will require that you provide special disclosure such as yield
sensitivity tables in the Offering Circular Supplement?
Are you aware that Ginnie Mae will require that you designate each Class
identified in response to question 6.a and 6.b as an Increased Minimum
Denomination Class and issue each such Class in denominations included in
the following table:
Class Type
Interest Only Class
Inverse Floating Rate Class
Principal Only Class
Non-Sticky Jump Class
Sticky Jump Class
Special Class
Toggle Class
Jump Class
Increased Minimum Denomination
The lesser of (a) $100,000 Original Notional or
Original Principal Balance or (b) the Original
Notional or Original Principal Balance if such
balance is less than $100,000.
The minimum denomination for each jump class
in Original Notional or Original Principal
Balance is $1,000,000.
Yes
e)
No
In addition, have you informed or will you inform your sales force and other
Broker/Dealers to whom you will sell any Increased Minimum
Denomination Class on the Closing Date that no such Class is intended to be
distributed to investors who are not institutional “accredited investors,” as
defined in Rule 501(a)(1), (2), (3), or (7) of Regulation D of the Securities
V-8-4
Act of 1933, as amended and who do not have substantial experience in
mortgage-backed securities and are not capable of understanding and are
unable to bear the risks associated with such an investment?
7.
Callable Class
a)
Do you intend to use a Ginnie Mae Callable Class to back a Ginnie Mae
REMIC Trust?
b)
Are you aware that in the event a Callable Class is included in a Ginnie Mae
REMIC Trust, the Trustee Fee for the Callable Trust must also serve as the
Trustee Fee for the REMIC Trust?
c)
Are you are aware that the Ginnie Mae REMIC Trust may not issue a
Principal Only Security with an initial Class Principal Balance in excess of
10% of the class Principal Balance of the Callable Class included in such
REMIC Trust?
d) Are you aware that Ginnie Mae Platinum securities, Ginnie Mae I and
Ginnie Mae II Mortgage-Backed securities (“MBS”), and Non-Increased
Minimum Denomination Class REMIC securities will constitute “eligible
collateral” for all Callable Trusts?
8.
T
rustee Fee
a)
Has the Trustee Fee been determined?
b)
Will the Trustee Fee be structured as a strip of the Trust Assets?
c)
Are you aware that if there is more than one Trust Asset Group, you are
encouraged to allocate the Trustee Fee either pro rata between Trust Asset
Groups based on principal balance or to the Trust Asset Group(s) expected
to pay-off slower?
9. Do you anticipate any difficulty in the acquisition of the proposed Trust Assets or
sale of the proposed Ginnie Mae REMIC Securities, particularly the Classes to be
designated as Increased Minimum Denomination Classes?
10. Are there any Sponsor operational difficulties anticipated for any aspect of the
proposed Ginnie Mae REMIC Securities?
11. Are there any unique or unusual features or Classes in the proposed Ginnie Mae
REMIC Securities Structure:
a)
in addition to those discussed above, that Ginnie Mae, the Financial Advisor
or the Legal Advisor should be made aware of?
b)
that may be inconsistent with the policies and purposes of the Ginnie Mae
Multiclass Securities Program as reflected in the Ginnie Mae REMIC Guide
currently in effect?
c) that may present an increased risk of Ginnie Mae’s having to perform under
its guarantee of the proposed Ginnie Mae REMIC Securities?
d)
that might cause the Financial Advisor, Accountant or Tax Administrator
difficulty in reverse-engineering the transaction?
12. Do you anticipate any difficulty in qualifying the proposed Ginnie Mae REMIC
Securities Structure as a viable REMIC from a tax perspective and obtaining an
unqualified tax opinion?
V-8-5
13. Will you use Ginnie Mae’s standard Class naming and other conventions?
14. Are you aware that a Supplemental Statement and an investor Notification, in
substantially the forms attached as Exhibits 3 and 4 to the Standard Sponsor
Provisions, will be required if the actual characteristics of the Trust Assets are
such that there is a material change in the investment characteristics of any Class
as described in the Offering Circular Supplement or there is a 10% or greater
change in the projected Weighted Average Life of any Class at the pricing
prepayment speed as updated in the August 7, 2004 MPM 04-06?
15. HMBS
a) Do the Trust Assets include any HMBS?
b) Are Participations backing such HMBS equal to or greater than par?
c)
Will you be able to provide a Sponsor Certification and an Accountants’
Certification verifying that Participations backing any HMBS are equal to or
greater than par?
16. M JM Pools
a) Does the proposed Ginnie Mae REMIC Securities Structure comprise any
Trust Asset Group(s) that will include M JM pools as underlying collateral?
V-8-6
FORM OF ACCOUNTANTS’ AGREED-UPON PROCEDURES
REPORT CONCERNING THE OFFERING CIRCULAR FOR CALLABLE
SECURITIES
_________ __, 20__
[Sponsor]
Government National Mortgage Association
550 Twelfth Street, S.W., Third Floor
Washington, D.C. 20024
Independent Accountants’ Report on
Applying Agreed-Upon Procedures
Ginnie Mae Callable Trust 20__-C_
Ladies and Gentlemen:
We have performed the procedures enumerated below, which were agreed to by the addressees,
relating to the recomputation of certain information (which is the responsibility of the Sponsor
and is as identified below) included in the Offering Circular dated ______ __, 20__ (the
“Circular”) relating to the offering of $___________ aggregate Original Class Principal Balance
of Ginnie Mae Callable Trust 20__ - C__ Guaranteed Callable Pass-Through Securities (the
“Securities”). This agreed-upon procedures engagement was conducted in accordance with
attestation standards established by the American Institute of Certified Public Accountants. The
sufficiency of these procedures is solely the responsibility of the addressees. Consequently, we
make no representations regarding the sufficiency of the procedures described below either for
the purpose for which this report has been requested or for any other purpose. Capitalized terms
used but not defined herein have the meanings ascribed to them in the Circular.
We are independent certified public accountants with respect to Ginnie Mae Callable Trust 20__C_ within the meaning of Rule 101 of the Rules of Conduct of the Code of Professional Conduct
of the American Institute of Certified Public Accountants.
For purposes of this report, we have obtained:
1.
the Circular; and
2.
the attached listing of CUSIP Numbers for each Class of Securities provided to us by
Standard & Poor’s CUSIP Service Bureau (the “CUSIP Listing”).
Using (i) the Modeling Assumptions[, (ii) a listing of Ginnie Mae Certificates (the “File”)
underlying the Trust Asset (the “Underlying Ginnie Mae Certificates”) obtained from Ginnie
V-9-1
Mae’s Internet Web-site, (iii) Class Factors relating to each Class of the Underlying Trust
obtained from Ginnie Mae’s Internet Web-site, (iv) information relating to each of the
Underlying Ginnie Mae Certificates shown in or derived from a Ginnie Mae Factor Tape that
was made available on [
] from SECTOR Inc. (a SIAC Company (hereinafter referred to
as “SIAC”)) (the “Factor Report”) and a SIAC Ginnie Mae Weighted Average Tape (the
“Weighted Average Tape”) (using the most recent tape for which such information was
available)] and [(v)] the terms of the Securities set forth in the Circular, we have performed the
following procedures with respect to the information set forth under each of the captions below.
Front Cover - Final Distribution Date:
[Using the Final Distribution Date calculation assumptions and methodologies provided to us by
the Sponsor as described in Exhibit I hereto, we recomputed the date on which the Class
Principal Balance of [the] [each] Callable Class would be reduced to zero. We compared [each]
such date to the Final Distribution Date for the [related] Callable Class as shown in the table in
the Circular and found them to be in agreement.] [We verified that the final Distribution Date
for the Callable Class has been set equal to the final Distribution Date of the Underlying
Certificate[s].]
Front Cover - CUSIP Number:
For each Class of Securities, we compared the CUSIP Number shown in the table to the CUSIP
Number for such Class shown in the CUSIP Listing and found them to be in agreement.
Pages __ and __ - Decrement Table[s]:
We recomputed for [each] [the] Callable Class (i) the percentage of its Original Class Principal
Balance that would remain outstanding following the distributions made on each of the
Distribution Dates shown in the Circular at each of the constant percentages of [PSA] [CPR]
indicated in the Circular and (ii) its corresponding Weighted Average Life. We compared such
recomputed percentages and Weighted Average Lives to the corresponding information set forth
in the tables and found them to be in agreement.
Pages __ and __ - Weighted Average Life and Yield Table:
Using the assumed purchase price[s] set forth in the weighted average life and yield table[s], we
recomputed the pre-tax yield to maturity (corporate bond equivalent) and Weighted Average Life
of each Callable Class at each [constant percentage of PSA] [percentage of CPR] and
Redemption Date shown in the table[s]. We compared such recomputed yields and Weighted
Average Lives to the corresponding information shown in the table[s] and found them to be in
agreement.
[Exhibit A: Underlying Certificate:
Using the File, we compared the Approximate Weighted Average Coupon of Mortgage
Loans, Approximate Weighted Average Remaining Term to Maturity of Mortgage Loans and
Approximate Weighted Average Loan Age of Mortgage Loans underlying the Underlying
Certificate to the corresponding information shown in or derived from the Factor Report and the
V-9-2
Weighted Average Tape (using the most recent tape for which such information was available)
using the methodology relating to generic pools set forth in The Bond Market Association’s
Standard Formulas for the Analysis of Mortgage-Backed Securities and Other Related Securities
- Chapter SF Section C (the “Standard Formulas”), and found them to be in agreement. In
addition, we compared the Underlying Certificate Factor shown in Exhibit A to the
corresponding information obtained from Ginnie Mae’s Internet Web-site and found them to be
in agreement. We recalculated the Principal Balance in the Trust by determining the product of
the (i) Original Principal Balance of Class, (ii) Underlying Certificate Factor and (iii) Percentage
of Class in Trust and found such amount to be in agreement. Lastly, we compared the Issue
Date, CUSIP Number, Interest Rate, Interest Type, Final Distribution Date, Principal Type and
Original Principal Balance of Class to the corresponding information set forth in the Underlying
Certificate Disclosure Document and found them to be in agreement. We have not performed
any procedures relating to the Percentage of Class in Trust and make no representations with
respect thereto.]
*****
Using the Modeling Assumptions and the terms of the Securities set forth in the Circular, and
assuming the timely payment of principal and interest on the [Underlying] Ginnie Mae
Certificates, we determined that payments on the Trust [Asset[s]] [MBS] would be adequate to
(a) make full and timely payments of principal and interest on [the] [each] Callable Class[es] and
(b) reduce the Class Principal Balance of [each] [the] Callable Class to zero by its Final
Distribution Date, in each case in accordance with the terms as set forth in the Circular
regardless of the rate of prepayments of the Mortgage Loans underlying the Trust [MBS]
[Asset[s]] [MBS] [or the level of LIBOR].
It should be understood that we make no representations as to (a) questions of legal
interpretation; (b) the sufficiency for your purposes of the procedures enumerated in the
preceding paragraphs; (c) the accuracy of the information reported in [Ginnie Mae’s Internet
Web-site, the Factor Report, the Weighted Average Tapes, the Underlying Certificate Disclosure
Document or] the CUSIP Listing; or (d) whether the actual payments on the Trust Assets and the
Securities will correspond to the payments calculated in accordance with the assumptions and
methodologies set forth in the Circular. Further, we have addressed ourselves solely to the
foregoing data as set forth in the Circular, and we make no representations as to the adequacy of
disclosure or as to whether any material facts have been omitted.
We were not engaged to conduct, and did not conduct, an examination, the objective of which
would be the expression of an opinion on the above information. Accordingly, we do not
express such an opinion. Had we performed additional procedures, other matters might have
come to our attention that would have been reported to you. Furthermore, there will usually be
differences between the actual payments on the Trust [Asset[s]] [MBS] and the Securities as
compared to the payments calculated in accordance with the assumptions and methodologies set
forth in the Circular and described herein, because events and circumstances frequently do not
occur as expected, and those differences may be material. We have no responsibility to update
this report for events and circumstances occurring after the date of this report.
V-9-3
This report is solely for the information and use of the addressees and Ginnie Mae’s Financial
Advisor in connection with the offering of the securities covered by the Circular, and is not
intended to be and should not be used by anyone other than these specified parties. It is not to be
used, circulated, quoted or otherwise referred to for any other purpose, including but not limited
to the purchase or sale of the Securities, nor is it to be filed with or referred to in whole or in part
in the Circular or any other document, except that reference may be made to it in the Sponsor
Agreement or in any list of closing documents pertaining to the offering of the Securities.
Yours truly,
[Note to Accountants: The CUSIP Listing is to be attached to this report as Exhibit II.]
V-9-4
[Exhibit I
Ginnie Mae Callable Trust 20__-C__
The Sponsor has calculated the Final Distribution Date for [each] [the] Callable Class by
assuming, among other things, that each Mortgage Loan underlying the [Group __] Trust MBS,
as of _____ __, 20_, has a remaining term to maturity of ____ months, each Mortgage Loan
underlying the [Group __] Trust MBS has a Mortgage Rate of ___% and no Mortgage Loan
prepayments occur.]
V-9-5
FORM OF TRUSTEE’S RECEIPT AND SAFEKEEPING AGREEMENT FOR
CALLABLE SECURITIES
TRUSTEE’S RECEIPT AND SAFEKEEPING AGREEMENT
____________ __, 20__
Government National Mortgage Association
550 Twelfth Street, S.W., Third Floor
Washington, D.C. 20024
[Sponsor’s Name] (the “Sponsor”)
[Sponsor’s Address]
Ginnie Mae Callable Trust 20[ ]-C[ ]
Ladies and Gentlemen:
___________________________, as trustee (the “Trustee”) under a trust agreement (the
“Trust Agreement”), dated as of _______________ __, 20__, between the Trustee and
______________ (the “Sponsor”), acknowledges receipt of the Trust Assets listed on Schedule
A attached to this letter (the “Trust Assets”). Capitalized terms not otherwise defined herein
shall have the meanings assigned to them in the glossary contained in the Ginnie Mae Multiclass
Securities Guide currently in effect.
The Trustee has received the Trust Assets through the facilities of the Federal Reserve
Bank of New York (the “Trust Asset Depository”), which has credited the Trust Assets to a
limited purpose account at the Book-Entry Depository.
The Trustee is holding, and at all times prior to settlement on _____________________
__, 20__ (the “Closing Date”) will hold, the Trust Assets in one or more segregated accounts in
the name of and solely for the benefit of [the Sponsor] [the Sponsor’s Participating Affiliates].
The Trustee has made appropriate entries on its books and records to show that it is so holding
the Trust Assets, and the Trust Assets are not subject to any right, charge, security interest, lien
or claim of any kind in favor of the Trustee or any Person claiming through it.
All of the Trust Assets, described in the attached list and having an aggregate [original]
[current] face value of $________________, are held by the Trustee as the [Sponsor’s] agent and
subject to the [Sponsor’s] further instructions. In the event that there is no settlement on the
Closing Date, the Trustee will release the Trust Assets in accordance with the instructions of the
[Sponsor or its Participating Affiliates].
Upon settlement (if any) on the Closing Date, the Trustee will deliver in accordance with
the instructions of the [Sponsor] the securities representing the regular interests in the Ginnie
V-10-1
Mae Callable Trust 20__-C_ (the “Callable Securities”), and the Trustee thereupon will hold the
Trust Assets in the name of and solely on behalf of the Ginnie Mae Callable Trust 20___-C__.
* * * * *
V-10-2
Unless otherwise instructed by the Sponsor, if any distributions on the Trust Assets are
received by the Trustee prior to settlement on the Closing Date, the Trustee will remit such
distributions to the Sponsor.
Very Truly Yours,
[TRUSTEE], as Trustee
By: _______________________________
Its: _______________________________
cc:
[Accountants’ Name]
Accountants’ Address]
V-10-3
Schedule A
[LIST OF TRUST ASSETS]
V-10-4
FORM OF ISSUANCE STATEMENT FOR CALLABLE SECURITIES
ISSUANCE
STATEMENT
[TRUSTEE]
[TRUSTEE’S ADDRESS]
Ginnie Mae Callable Trust 20[ ]-C[ ]
The Sponsor hereby instructs the Trustee, on behalf of the Ginnie Mae Callable Trust, to
authorize the issuance of the Securities identified in Schedule A (the “Schedule”) in book-entry
form through the facilities of the Book-Entry Depository for the account of the Sponsor on the
Closing Date. The Securities shall be issued in the denominations specified in the Schedule
under the column designated as “Denomination (or “Par Amount” for Purposes of Fed.”)
Capitalized terms used herein and not othwerise defined shall be given the meanings assigned to
them in the Callable Trust Agreement, dated as of [ ] [ ], 20[ ], by and between [Sponsor] and
[Trustee].
The undersigned acknowledges that the Schedule[s] accurately describe[s] the Securities
to be issued in book-entry form at closing.
[Sponsor]
By:
Its:
[Note to Trust Counsel: The Issuance Statement shall be provided to the Trustee no later
than the Pool Wire Date, which is generally two Business Days prior to closing.]
V-11-1
SCHEDULE A: CALLABLE CLASSES
DENOMINATION
(OR “PAR
AMOUNT”
FOR PURPOSES
OF Fed)
CLASS
MAXIMUM
CLASS PRINCIPAL [(OR
NOTIONAL)] BALANCE
MINIMUM
DENOMINATION
CUSIP
[INTEREST
RATE]
*
†
†
________________________________
†
Notional balance.
*
[Initial Interest Rate.]
V-11-2
FORM OF TRANSACTION OPINION OF
TRUST COUNSEL FOR CALLABLE SECURITIES
Pursuant to the Sponsor Agreement, Trust Counsel must deliver an opinion substantially
in the form set forth below as a condition to closing. In general, this condition must be met by
the delivery of an opinion in the form that follows, including the materials marked with square
brackets “[].” If an opinion includes the bracketed language, it need not include the language
marked with braces “{}.”
With Ginnie Mae’s approval prior to the execution of a Sponsor Agreement, however,
this condition to closing may be met by the delivery of two separate opinions: (1) a Sponsor’s
Opinion in the form set forth in this Addendum and (2) a Trust Counsel opinion in the form as
follows, but which opinion deletes the language in square brackets and adds the language in
braces.
V-12-0
FORM OF TRANSACTION OPINION OF
TRUST COUNSEL FOR CALLABLE SECURITIES
____________ __, 20__
Government National Mortgage Association
550 Twelfth Street, S.W., Third Floor
Washington, D.C. 20024
[Trustee]
[Sponsor]
Ginnie Mae Callable Trust 20[ ]-C[ ]
Ladies and Gentlemen:
We have acted as trust counsel in connection with the issuance, by the Ginnie Mae
Callable Trust 20__-C_ (the “Trust”), established pursuant to a trust agreement (the “Trust
Agreement”), dated as of ____________ __, 20__, by and between ___________________, as
trustee of the Trust (the “Trustee”), and _____________________, a(n) ________________
corporation (the “Sponsor”), and incorporating by reference the Standard Trust Provisions for
Callable Trusts, __________ __, 20__ Edition[, as amended through _________ __, 20__] (the
“Standard Trust Provisions” and, together with the Trust Agreement, the “Trust Agreement”), of
approximately $_____________ aggregate principal amount of Guaranteed Callable PassThrough Securities (the “Securities”) guaranteed by the Government National Mortgage
Association (“Ginnie Mae”). The Securities are being sold to the Sponsor pursuant to the Trust
Agreement. Capitalized terms used but not otherwise defined herein shall have the meanings
assigned to them in the glossary (the “Glossary”) contained in the Ginnie Mae Multiclass
Securities Guide currently in effect.
The Offering Circular, dated ___________ __, 20___ (the “Offering Circular”), was
prepared in connection with the offering of the Securities.
The assets of the Trust consist primarily of [Trust MBS] [an Underlying Certificate] (the
“Trust Assets”) sold to the Trust by the Sponsor. In connection with the issuance of the
Securities, Ginnie Mae is guaranteeing the payment of the full amount of principal and interest
on each Security pursuant to the Guaranty Agreement and Section 3 of the Standard Sponsor
Provisions for Guaranteed Callable Pass-Through Securities, ____________ 1, 20____ Edition
(the “Standard Sponsor Provisions”).
In connection with the foregoing, we have examined the following documents:
(a)
A copy of the Standard Trust Provisions;
V-12-1
(b)
A signed copy of the Trust Agreement, which incorporates by reference the
Standard Trust Provisions;
(c)
A copy of the Standard Sponsor Provisions;
(d)
A signed copy of the Sponsor Agreement, dated __________ __, 20__, between
Ginnie Mae and the Sponsor (the “Sponsor Agreement”), which incorporates by reference the
Standard Sponsor Provisions;
(e)
A copy of the Glossary;
(f)
A copy of the Offering Circular;
(g)
Specimen Securities for [each] [the] Class of Call Securit[y][ies] evidencing [an]
ownership interest[s] in the Trust established under the Trust Agreement; {and}
[(h)
the Issuance Statement with respect to the Callable Class Securities; and
[(i)
the Articles of Incorporation and Bylaws (collectively, the “Constituent
Documents”) of the Sponsor, together with good standing certificates with respect to the
Sponsor; and
(j)
the resolutions of the Sponsor pertaining to the subject transactions, certified by
the Secretary or Assistant Secretary of the Sponsor.]
{(k) the opinion of counsel of the Sponsor, delivered in connection with this transaction
(the “Sponsor’s Opinion”).}
The Trust Agreement and the Sponsor Agreement are collectively referred to herein as
the “Agreements.”
For purposes of the opinions expressed below, we have assumed (a) the authenticity of all
documents submitted to us as originals, (b) the conformity to the originals of all documents
submitted as certified or photostatic copies and the authenticity of the originals of such copies,
(c) the genuineness of signatures not witnessed by us, (d) the legal capacity of natural persons
and (e) the due authorization, execution and delivery of all documents by all parties and the
validity and binding effect thereof (other than [the due authorization, execution and delivery of
documents by the Sponsor and] the validity and binding effect of documents upon the Sponsor.)
As to factual matters, we have relied upon representations included in the aforementioned
documents and in other documents delivered at the closing, upon certificates of officers of the
Sponsor and upon certificates of public officials. In addition, we have obtained from officers
and employees of the parties described above such other certificates and assurances, and we have
examined such records, other documents and questions of law, as we have considered necessary
or appropriate for purposes of rendering this opinion letter. [Whenever the phrase “to our
knowledge” is used herein, it refers to the actual knowledge of the attorneys of this firm involved
in the representation for this transaction.]
V-12-2
The enforceability of the Agreements against the parties thereto is subject to the
provisions of bankruptcy, insolvency, reorganization, or moratorium laws or laws relating to or
affecting the rights of creditors generally and to principles of equity, whether considered at law
or in equity, except that Ginnie Mae may enforce the Agreements against the parties thereto
notwithstanding any bankruptcy, insolvency, reorganization or moratorium law, or any law
relating to or affecting the rights of creditors generally, to the extent that such law is preempted
by the authorizing law for the Ginnie Mae Multiclass Securities Program set forth at 12 U.S.C. §
1721(g)(3)(E)(iv).
We do not purport to express an opinion as to the laws of any jurisdiction other than the
[State of incorporation of the Sponsor, the] State of New York and the United States of America.
I.
Based upon, and subject to, the foregoing and such other documents and information as
we have considered necessary for the purposes hereof, we are of the opinion that:
[1.
The Sponsor has been duly incorporated and is validly existing as a corporation in
good standing under the laws of the jurisdiction of its incorporation.
2.
The Sponsor has the corporate power and authority to enter into the transactions
contemplated by the Agreements.
3.
The Sponsor is duly qualified to do business as a foreign corporation and is in
good standing under the laws of each jurisdiction that requires such qualification wherein it owns
or leases material properties, except where the failure so to qualify would not have a material
adverse effect on such company’s ability to perform its obligations under the Agreements.
4.
To our knowledge, there is no action, suit, proceeding or investigation pending or
threatened against the Sponsor that reasonably could be expected to affect adversely (a) the
Sponsor’s ability to carry on its business substantially as now conducted; (b) the transfer of the
Trust Assets; (c) the issuance of the Securities or (d) the execution, delivery, performance or
enforceability of the Agreements, including the Sponsor’s performance under any
indemnification provisions.]
{1.
The Sponsor’s Opinion is satisfactory in form and scope to us, and we believe that
you may properly rely on it.}
{2}
[5.]
Assuming the due authorization, execution and delivery of the Trust Agreement
by the [Trustee] {parties thereto}, the provisions of the Trust Agreement are sufficient to
establish a trust under and pursuant to the governing laws of the Trust Agreement.
{3}
[6.]
[Each of the Agreements has been duly executed and delivered by an authorized
signatory of the Sponsor, and] {Assuming the due authorization, execution and delivery of the
Agreements by the parties thereto,} each constitutes a valid, legal and binding agreement of the
Sponsor, enforceable against the Sponsor in accordance with its respective terms.
V-12-3
{4}
[7.]
The Securities conform in all material respects to the descriptions thereof
contained in the Offering Circular. The Book-Entry Securities have been duly and validly
authorized and delivered by the Trustee in accordance with the Trust Agreement, and are duly
and validly issued and entitled to the benefits of such Trust Agreement. Assuming the due
authorization of the officer of the Trustee who executed the Call Class Securities on behalf of the
Trust, such Securities have been duly and validly authorized, executed and delivered by the Trust
and will, when authenticated as specified in the Trust Agreement, be duly and validly issued and
entitled to the benefits of the Trust Agreement.
{5}
[8.]
The Securities are exempt from the registration requirements of the Securities Act
of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder,
and the Securities constitute “exempted securities” under the Securities Exchange Act of 1934,
as amended, and the rules and regulations of the Commission promulgated thereunder.
{6}
[9.]
The Trust Agreement is not required to be qualified under the Trust Indenture Act
of 1939, as amended, and the trust fund created thereby is not required to be registered under the
Investment Company Act of 1940, as amended.
{7}
[10.] No consent, approval, authorization or order of (a) any ____________ State or
federal court or (b) any ______________ State or federal governmental agency or body is
required for the consummation by the Trust of the transactions contemplated by the Agreements;
provided, however, that we express no opinion with respect to requirements under local and state
securities laws, including but not limited to such as may be required under the state securities or
blue sky laws, of any jurisdiction in connection with the distribution of the Securities.
{8}
[11.] The statements set forth under the headings “Terms Sheet” and “Description of
the Securities” in the Offering Circular, insofar as such statements together purport to summarize
certain provisions of the Agreements, provide a fair summary of such provisions.
{9}
[12.] The statements in the Offering Circular under the headings “ERISA Matters” and
“Legal Investment Considerations,” insofar as they describe federal statutes and regulations or
constitute legal conclusions with respect thereto, have been prepared or reviewed by us, and such
statements fairly summarize such statutes and regulations.
{10} [13.] The Callable Class Securities qualify as “guaranteed governmental mortgage pool
certificates” within the meaning of 29 C.F.R. § 2510.3-101(i)(2).
II.
We have participated in various conferences with the appropriate representatives of the
Sponsor and the Accountants. At those conferences, the contents of the Offering Circular were
discussed and revised. Since the dates of those conferences, we have inquired of appropriate
representatives whether there has been any material change in the affairs of the Sponsor.
Because of the inherent limitations in the independent verification of factual matters, we
are not passing upon, and do not assume any responsibility for, and make no representation that
we have independently verified, the accuracy, completeness or fairness of the statements
contained in the Offering Circular, except as specifically set forth in paragraphs [11 and 12]
V-12-4
{8 and 9} of Part I of our opinion above. Also, we do not express any opinion or belief as to the
financial statements or other numerical, financial or statistical information contained in the
Offering Circular. However, subject to the foregoing, we advise you that nothing has come to
our attention that would lead us to believe that the Offering Circular, as of the date thereof and at
the date hereof, contained or contains any untrue statement of a material fact or omitted or omits
to state any material fact necessary in order to make the statements made therein, in the light of
the circumstances under which they were made, not misleading (except that we express no
opinion with respect to the numerical, financial and statistical data contained in the Offering
Circular).
We express no opinion as to any matter other than as expressly set forth herein, and no
other opinion is to be, or may be, inferred or implied herefrom. This opinion is given as of the
date hereof and is based on facts and conditions presently known to us and laws and regulations
currently in effect, and we do not undertake, and hereby disclaim, any obligation to advise you of
any change in any matters set forth herein.
This opinion letter is being furnished to you solely for your benefit and may not be relied
upon by, nor may copies be delivered to, any person without our prior written consent.
U.S. Treasury Circular 230 Notice
To ensure compliance by this law firm with requirements imposed by the
Internal Revenue Service, we inform you that (a) this advice was not intended or written to
be used, and cannot be used, for the purpose of avoiding United States federal tax
penalties, (b) this advice was written to support the promotion or marketing of the
transactions or matters addressed herein and (c) any taxpayer to whom such transactions
or matters are being promoted, marketed or recommended should seek advice based on its
particular circumstances from an independent tax advisor.
Very truly yours,
V-12-5
FORM OF TAX OPINION OF
TRUST COUNSEL
FOR CALLABLE SECURITIES
________ __, 20__
Government National Mortgage Association
550 Twelfth Street, S.W., Third Floor
Washington, D.C. 20024
Ginnie Mae Callable Trust 20__-C_
c/o [Trustee]
[Trustee]
[Sponsor]
Ginnie Mae Callable Trust 20[ ]-[ ]
Certain Tax Matters
Ladies and Gentlemen:
We have acted as trust counsel in connection with the formation of the Ginnie Mae
Callable Trust 20__-C_ (the “Trust”), established pursuant to a trust agreement (the “Trust
Agreement”), dated as of ____________ __, 20__, by and between___________________, as
trustee of the Trust (the “Trustee”), and __________________, a(n) ________________
corporation (the “Sponsor”), and incorporating by reference the Standard Trust Provisions for
Callable Trusts, ____________, 20__ Edition[, as amended through __________, 20__] (the
“Standard Trust Provisions”), and the issuance of approximately $_____________ aggregate
principal amount of Guaranteed Callable Pass-Through Securities (the “Securities”). The
Securities consist of Class A1 [and Class A2] Securities ([each, a] [the] “Callable Class and the
Class B1 [and Class B2] Securities ([each, a][the] “Call Class”). The Securities are being sold
pursuant to an Offering Circular dated ___________________ __, 20__ (the “Offering
Circular”). The assets of the Trust consist primarily of [certain Trust MBS] [an Underlying
Certificate] acquired from the Sponsor and certain accounts. Capitalized terms used but not
defined herein shall have the meanings assigned to them in the glossary contained in the Ginnie
Mae Multiclass Securities Guide currently in effect or in the Trust Agreement.
We have reviewed the originals or copies of: (i) the Trust Agreement, including the
Standard Trust Provisions; (ii) the Sponsor Agreement dated as of _________ __, 20__; (iii) the
Guaranty Agreement dated as of _______________ __, 20__; and (iv) the Offering Circular. We
have also relied, without independent verification, on a letter from the Sponsor, dated
_______________, 20__, stating the belief of the Sponsor that there are various economically
reasonable circumstances under which the holder of [the] [a] Call Class would not exercise its
V-13-1
Government National Mortgage Association
Ginnie Mae Callable Trust 20__-C___
[Trustee]
[Sponsor]
__________ __, 20__
right to direct the redemption of the [related] Callable Class. We also have reviewed such other
documents relating to the transaction and made such other factual and legal inquiries as we have
considered necessary for purposes of the opinions given below.
Based on the foregoing, we are of the opinion that, with respect to this transaction, the
statements and legal conclusions contained in the Offering Circular under the caption “Certain
Federal Income Tax Consequences” are correct in all material respects and the discussion
thereunder does not omit any material provision with respect to the matters covered. Also based
on the foregoing and subject to the qualifications stated herein, we are of the further opinion that,
either (i) Ginnie Mae Callable Trust 20[ ] -C[ ] will constitute a single grantor trust, within the
meaning of Sections 671 through 679 of the Code, and not a partnership or an association taxable
as a corporation[, or (ii) each related pair of Callable and Call Classes of Ginnie Mae Callable
Trust 20[ ] -C[ ] will constitute a separate grantor trust within the meaning of Sections 671
through 679 of the Code, and not a partnership or an association taxable as a corporation].
You should be aware that the above opinions and the discussion contained in the Offering
Circular under the caption “Certain Federal Income Tax Consequences” represent conclusions as
to the application of existing law to the transaction described herein. There can be no assurance
that existing law will not change or that contrary positions will not be taken by the Internal
Revenue Service.
No opinion has been sought and none has been given concerning the tax consequences of
the transaction described herein or of the acquisition, ownership, or disposition of the Securities
under the laws of any state or locality.
The opinions expressed herein are solely for the information and use of the addressees
and may not be relied upon or otherwise used for any purpose by any other person without our
express written consent.
U.S. Treasury Circular 230 Notice
To ensure compliance by this law firm with requirements imposed by the
Internal Revenue Service, we inform you that (a) this advice was not intended or written to
be used, and cannot be used, for the purpose of avoiding United States federal tax
penalties, (b) this advice was written to support the promotion or marketing of the
transactions or matters addressed herein and (c) any taxpayer to whom such transactions
or matters are being promoted, marketed or recommended should seek advice based on its
particular circumstances from an independent tax advisor.
Very truly yours,
V-13-2
FORM OF OPINION OF SPONSOR FOR CALLABLE SECURITIES
_______________, 20__
Government National Mortgage Association
550 Twelfth Street, S.W., Third Floor
Washington, D.C. 20024
[Trustee]
[Sponsor]
Re:
Guaranteed Callable Pass-Through Securities
Ginnie Mae Callable Trust 20__-C_
Ladies & Gentlemen:
I am employed as [General] Counsel by ______________________ (“Sponsor”) and, in
such capacity, have acted as counsel to Sponsor, a _________ corporation, in connection with
the issuance, by the Ginnie Mae Callable Trust 20__-C_ (the “Trust”), established pursuant to a
trust agreement (the “20__-C_ Trust Agreement”) dated as of ____________, 20__, by and
between ______________________________, as trustee of the Trust, and the Sponsor, and
incorporating by reference the Standard Trust Provisions for Callable Trusts, _________, 20__
Edition, [as amended through _______________ __, 20__,] (the “Standard Trust Provisions”
and, together with the 20__-C_ Trust Agreements, the “Trust Agreement”), of approximately
$_______________ aggregate principal amount of Guaranteed Callable Pass-Through Securities
(the “Securities”) guaranteed by the Government National Mortgage Association (“Ginnie
Mae”). The Securities are being sold to the Sponsor pursuant to the Trust Agreement.
Capitalized terms not otherwise defined herein shall have the meanings assigned to them in the
glossary contained in the Ginnie Mae Multiclass Securities Guide currently in effect.
In connection with this opinion, I or others under my supervision have examined the
Trust Agreement and a sponsor agreement (the “Sponsor Agreement” and, together with the
Trust Agreement, the “Agreements”) dated as of _______, 20__, by between Ginnie Mae and the
Sponsor and incorporating by reference the Standard Sponsor Provisions for Callable Trusts,
________ __, 20__ Edition [, as amended through ___________ __, 20__]. I or others under my
supervision have also examined and am familiar with originals or copies, certified or otherwise
identified to my satisfaction, of such documents as I have deemed necessary or appropriate as a
basis for the opinion set forth below.
V-14-1
In my examination, I have assumed the genuineness of all signatures, the legal capacity
of natural persons, the conformity to original documents of all documents submitted to me as
certified or photostatic copies, the authenticity of the originals of such copies, and the due
authorization, execution and delivery of all documents by all parties and the validity and binding
effect thereof (other than the due authorization, execution and delivery of documents by the
Sponsor as to which I express an opinion herein). As to any fact material to this opinion that I
did not independently establish or verify, I have relied upon statements and representations of
officers and other representatives of the Sponsor. Whenever the phrase “to my knowledge” is
used herein, it refers to the actual knowledge of the attorneys employed by the Sponsor who are
involved in the representation for this transaction.
I am admitted to the Bar of the State of ________, and I express no opinion as to the laws
of any jurisdiction other than the laws of the State of ______________, [the corporate laws of
the State of ________________] and, to the extent specifically referred to herein, the laws of the
United States of America. Based upon and subject to the foregoing, I am of the opinion that:
1.
The Sponsor has been duly incorporated and is validly existing as a corporation in
good standing under the laws of the jurisdiction of its incorporation.
2.
The Sponsor has the corporate power and authority to enter into the transactions
and perform the obligations contemplated by the Agreements.
3.
The Sponsor is duly qualified to do business as a foreign corporation and is in
good standing under the laws of each jurisdiction that requires such qualification
wherein it owns or leases material properties, except where the failure so to
qualify would not have a material adverse effect on the Sponsor’s ability to
perform its obligations under the Agreements.
4.
There is no action, suit, proceeding or investigation pending or, to my knowledge,
threatened against the Sponsor that reasonably could be expected to affect
adversely (a) the Sponsor’s ability to carry on its business substantially as now
conducted, (b) the transfer of the Trust Assets, (c) the transfer of the Securities or
(d) the execution, delivery, performance or enforceability of the Agreements,
including the Sponsor’s performance under any indemnification provisions.
5.
The Agreements have been duly executed and delivered by the Sponsor.
6.
No consent, approval, authorization or order of (a) any ____________ State or
federal court or (b) any ______________ State or federal governmental agency or
body is required for the consummation by the Sponsor of the transactions
contemplated by the Agreements, except for those that have been obtained by the
Sponsor and are in full force and effect; provided, however, that I express no
opinion with respect to requirements under local and state securities laws,
including but not limited to such as may be required under the state securities or
blue sky laws, of any jurisdiction in connection with the distribution of the
Securities.
V-14-2
I express no opinion as to any matter other than as expressly set forth herein, and no other
opinion is to be, or may be, inferred or implied herefrom. This opinion is given as of the date
hereof and is based on facts and conditions presently known to me and laws and regulations
currently in effect, and I do not undertake, and hereby disclaim, any obligation to advise you of
any change in any matters set forth herein.
I consent to reliance upon this opinion letter by you for the purpose of complying with
your requirements in connection with the Sponsor Agreement and by [Trust Counsel] in
connection with the delivery of its opinion related to the Sponsor Agreement and Trust
Agreement. Except as provided in the preceding sentence, this opinion letter may not be relied
upon by, nor may copies be delivered to, any person without my prior written consent.
Very truly yours,
V-14-3
FORM OF OPINION OF TRUSTEE’S COUNSEL FOR CALLABLE SECURITIES
____________ __, 20__
Government National Mortgage Association
550 Twelfth Street, S.W., Third Floor
Washington, D.C. 20024
Ginnie Mae Callable Trust 20__-C_
c/o [Trustee]
[Sponsor]
Ginnie Mae Callable Trust 20__ -C
Ladies and Gentlemen:
We have acted as special counsel to ________________________ in its capacity as
trustee (the “Trustee”) in connection with the issuance by the Ginnie Mae Callable Trust
20__-C_ (the “Trust”), established pursuant to a trust agreement (the “20__-C_ Trust
Agreement”), dated as of ____________ __, 20__, by and between the Trustee and
_____________________, a(n) ________________ corporation (the “Sponsor”), and
incorporating by reference the Standard Trust Provisions for Callable Trusts, _________, 20__
Edition [, as amended through __________, 20__] (the “Standard Trust Provisions” and, together
with the 20__-C_ Trust Agreement, the “Trust Agreement”), of [approximately]
$_____________ aggregate principal amount of Guaranteed Callable Pass-Through Securities
(the “Securities”) guaranteed by the Government National Mortgage Association (“Ginnie
Mae”). The Securities are being sold to the Sponsor pursuant to the Trust Agreement.
Capitalized terms not otherwise defined herein shall have the meanings assigned to them in the
glossary contained in the Ginnie Mae Multiclass Securities Guide currently in effect.
In connection with the foregoing, we have examined the following documents:
(a)
a copy of the Standard Trust Provisions;
(b)
a signed copy of the Trust Agreement, which incorporates by reference the
Standard Trust Provisions;
(c)
a specimen for each Class of Certificated Security, evidencing ownership interest
in the Trust established under the Trust Agreement;
(d)
the Issuance Statement;
V-15-1
(e)
the [Articles of [Incorporation] [Association] and Bylaws] of the Trustee, together
with good standing certificates with respect to the Trustee; and
(f)
the resolutions of the Trustee pertaining to the subject transactions, certified by
the Secretary or an Assistant Secretary of the Trustee.
For purposes of the opinions expressed below, we have assumed (a) the authenticity of all
documents submitted to us as originals, (b) the conformity to the originals of all documents
submitted as certified or photostatic copies and the authenticity of the originals of such copies,
(c) the genuineness of signatures not witnessed by us, (d) the legal capacity of natural persons
and (e) the due authorization, execution and delivery of all documents by all parties and the
validity and binding effect thereof (other than the due authorization, execution and delivery of
documents by the Trustee and the validity and binding effect of documents upon the Trustee as
to which we express an opinion herein).
As to factual matters, we have relied upon representations included in the aforementioned
documents and in other documents delivered at the closing, upon certificates of officers of the
Trustee and upon certificates of public officials. In addition, we have obtained from officers and
employees of the parties described above such other certificates and assurances, and we have
examined such records, other documents and questions of law, as we have considered necessary
or appropriate for purposes of rendering this opinion letter. Whenever the phrase “to our
knowledge” is used herein, it refers to the actual knowledge of the attorneys of this firm involved
in the representation of the Trustee in this transaction.
The enforceability of the Trust Agreement against the parties thereto is subject to the
provisions of bankruptcy, insolvency, reorganization, or moratorium laws or laws relating to or
affecting the rights of creditors generally and principles of equity, whether considered at law or
in equity, except that Ginnie Mae may enforce the Trust Agreement against the parties thereto
notwithstanding any bankruptcy, insolvency, reorganization or moratorium law, or any law
relating to or affecting the rights of creditors generally, to the extent that such law is preempted
by the authorizing law for the Ginnie Mae Multiclass Securities Program set forth at 12 U.S.C. §
1721(g)(3)(E)(iv).
We do not purport to express an opinion as to the laws of any jurisdiction other than the
[State of ___________________, the] State of New York and the United States of America.
Based upon, and subject to, the foregoing and such other documents and information as
we have considered necessary for the purposes hereof, we are of the opinion that:
1.
The Trustee is a(n) [______________________ corporation] [national banking
association], duly organized and validly existing in good standing under the laws of
[____________] [the United States of America], and has all requisite power and authority to
enter into the Trust Agreement and to perform its obligations thereunder.
2.
To our knowledge, there is no action, suit, proceeding or investigation pending or
threatened against the Trustee that could materially adversely affect the Trustee’s ability to
perform its obligations under the Trust Agreement.
V-15-2
3.
The Trust Agreement has been duly authorized, executed and delivered by the
Trustee, and constitutes the legal, valid and binding obligation of the Trustee, enforceable against
the Trustee in accordance with its terms, subject to the limitations noted above.
4.
The Book-Entry Securities have been duly and validly authorized and delivered
by the Trustee in accordance with the [related] Trust Agreement and are duly and validly issued
and entitled to the benefits of the [related] Trust Agreement. [The Certificated Securities have
been duly and validly authorized, executed, authenticated and delivered by the Trustee in
accordance with the Trust Agreement and are duly and validly issued and entitled to the benefits
of the Trust Agreement.]
5.
The performance by the Trustee of its duties pursuant to the Trust Agreement
does not conflict with or result in a breach or violation of any term or provision of, or constitute a
default under, any statute or regulation currently governing the Trustee.
We express no opinion as to any matter other than as expressly set forth herein, and no
other opinion is to be, or may be, inferred or implied herefrom. This opinion is given as of the
date hereof and is based on facts and conditions presently known to us and laws and regulations
currently in effect, and we do not undertake, and hereby disclaim, any obligation to advise you of
any change in any matters set forth herein.
We consent to reliance upon this opinion letter by you for the purpose of complying with
your requirements in connection with this transaction only as it relates to the specific legal issues
identified herein. Except as provided in the preceding sentence, this opinion letter may not be
relied upon by, nor may copies be delivered to, any person without our prior written consent.
Very truly yours,
V-15-3
FORM OF ACCOUNTANTS’ AGREED-UPON
PROCEDURES REPORT AS OF THE CLOSING DATE
FOR CALLABLE SECURITIES
______ __, 20__
Government National Mortgage Association
550 Twelfth Street, S.W., Third Floor
Washington, D.C. 20024
[Sponsor]
Independent Accountants’ Report on
Applying Agreed-Upon Procedures
Ginnie Mae Callable Trust 20__-C_
Ladies and Gentlemen:
We have performed the procedures enumerated below, which were agreed to by the addressees, relating to
the issuance of $ ____________ aggregate Original Class Principal Balance of Ginnie Mae Callable Trust
20__-C Guaranteed Callable Pass-Through Securities (the “Securities”) pursuant to a Trust Agreement dated
as of _______ __, 20__ (the “Trust Agreement”). This agreed-upon procedures engagement was conducted
in accordance with attestation standards established by the American Institute of Certified Public
Accountants. The sufficiency of these procedures is solely the responsibility of the addressees.
Consequently, we make no representation regarding the sufficiency of the procedures described below either
for the purpose for which this report has been requested or for any other purpose. Capitalized terms used but
not defined herein have the meanings ascribed to them in the Trust Agreement.
We are independent certified public accountants with respect to Ginnie Mae Callable Trust 20__-C within
the meaning of Rule 101 of the Rules of Conduct of the Code of Professional Conduct of the American
Institute of Certified Public Accountants.
For purposes of this report, we obtained the following:
(a)
(b)
[(c)
(d)
[(e)
[(f)
[(g)]
The 20__-C_ Offering Circular;
The Trust Agreement;
Part III of the Ginnie Mae Multiclass Securities Guide;]
An electronic listing of [Trust Assets] [Trust MBS] provided to us by, and which is the responsibility
of, the Sponsor;
An electronic listing of underlying Ginnie Mae Certificates provided to us by the Sponsor;] [and]
The attached schedule of Weighted Average Lives of [the] [each] Callable Class Security provided to
us by, and which is the responsibility of, the Sponsor (“Schedule B”);] [and]
The Underlying Certificate Disclosure Document.]
V-16-1
Based on the foregoing, we performed the following procedures:
1.
Using the aforementioned electronic lists of [Trust Assets] [Trust MBS] [and underlying Ginnie Mae
Certificates], we printed out the schedule of [Trust Assets] [Trust MBS] [and underlying Ginnie Mae
Certificates] that is attached hereto as Schedule A [and Schedule C]. In addition, we provided the
same electronic list of [Trust Assets] [Trust MBS] to the Information Agent, the Financial Advisor
and the Trustee through Ginnie Mae’s Internet Web-site.
2.
For [each] [the] [Trust MBS] [Group [ ]] [Trust Asset] shown on Schedule A, we compared the
CUSIP number, [[Trust MBS] [Trust Asset] pool number, [Trust MBS] [Trust Asset] pool type,
[Trust MBS] [Trust Asset] pool suffix,] Issue Date[, Certificate Rate] and Maturity Date[, current
Weighted Average Remaining Term to Maturity (the “WARM”) and current Weighted Average Loan
Age (the “WALA”)] shown on Schedule A to the corresponding information [obtained from the
SIAC Ginnie Mae Daily Pool Tapes for ____________ __, 20__ (together with SIAC Ginnie Mae
Daily Pool Tapes for ___________, 20__, the “New Pool Tapes”)] [shown for that Trust Asset in the
Underlying Certificate Disclosure Document] and found them to be in agreement.
3.
For [each underlying Ginnie Mae Certificate] [the Group [ ] Trust Asset[s]] [Trust MBS] shown on
Schedule [C][A] [as having an Issue Date prior to _________ __, 20__,] we compared the CUSIP
number, [Trust MBS] [Trust Asset] pool number, [Trust MBS] [Trust Asset] pool type, [Trust MBS]
[Trust Asset] pool suffix, Issue Date, Certificate Rate and Maturity Date shown on Schedule [C] [A]
to the corresponding information shown for that [Trust MBS] [Trust Asset] in the Ginnie Mae Factor
Tape that was made available on __________ __, 20__ from SECTOR Inc. (a SIAC Company
hereinafter referred to as “SIAC”) (the “Factor Report”) and found them to be in agreement.]
4.
[For the Group [ ] Trust Asset shown on Schedule A, we compared the Certificate Rate shown on
Schedule A to the corresponding information shown for such Trust Asset on Ginnie Mae’s Internet
Web-site and found them to be in agreement.
5.
[For the Group [ ] Trust Asset shown on Schedule A, we recomputed the current principal balance by
multiplying [a] [the ___________, 20__] factor obtained from [Ginnie Mae’s Internet Web-site] [the
Factor Report] for that [Trust MBS] [Trust Asset], by the original principal balance shown on
Schedule A, and compared such recomputed amount to the corresponding current principal balance
shown on Schedule A and found them to be in agreement.]
6.
[For each underlying Ginnie Mae Certificate shown on Schedule C as having an Issue Date of
__________ __, 20__, we compared the items of information listed in paragraph 3 above to the
corresponding information obtained from the New Pool Tapes and found them to be in agreement.]
7.
[For [each underlying Ginnie Mae Certificate shown on Schedule C as having an Issue Date prior to
_________ __, 20__,] [the Trust MBS shown on Schedule A] we recomputed the current balance by
multiplying a factor obtained from the Factor Report for that [underlying Ginnie Mae Certificate]
[Trust MBS] by the original principal balance shown on Schedule [C] [A], and compared such
recomputed amount to the current balance shown on Schedule [C] [A]and found them to be in
agreement.]
8.
For each [Trust MBS] [Group [ ]] [Trust Asset] [and] [underlying Ginnie Mae Certificate shown on
Schedule A] [and Schedule C, respectively,] [as having an Issue Date of __________ ___, 20___,]
V-16-2
we determined that the current principal balance shown on Schedule A [or Schedule C] is equal to the
original principal balance shown on Schedule A [or Schedule C, as applicable].
9.
For [each underlying Ginnie Mae Certificate shown on Schedule C] [as having an Issue Date prior to
___________*,] [the Group [ ] Trust Asset] [Trust MBS] [shown on Schedule A] we compared the
current Weighted Average Coupon (the “WAC”), the current WARM and the current WALA shown
on Schedule [C] [A] to the corresponding information for that [underlying Ginnie Mae Certificate]
[Trust Asset] derived from the SIAC Ginnie Mae Daily Pool Tapes [for _________, 20__ [(the “New
Pool Tapes”)] [(using the most recent tape for which such information was available)] using the
methodology relating to generic pools set forth in The Securities Industry and Financial Markets
Association’s Standard Formulas for the Analysis of Mortgage-Backed Securities and Other Related
Securities - Chapter SF Section C (the “Standard Formulas”), and found them to be in agreement.
10.
[For each underlying Ginnie Mae Certificate shown on Schedule C as having an Issue Date on or
after ____________***/, we compared the current WAC, WARM and WALA shown on Schedule C
to the corresponding information for that Ginnie Mae Certificate derived from the New Pool Tapes
using the methodology relating to generic pools set forth in the Standard Formulas and found them to
be in agreement.]
11.
We recomputed the sum of the current balances of the [underlying Ginnie Mae Certificates] [Trust
Assets] [Trust MBS] [in each group] [of underlying Ginnie Mae Certificates] shown on Schedule [C]
[A] ([each an] [the] “Aggregate Balance”) and found [each] such amount to be in agreement with the
corresponding amount shown on Schedule [C] [A]. [We determined that [(a)] the Aggregate Balance
[of the underlying Ginnie Mae Certificates] [(less the principal portion of the Non-Cash Fee (as
defined in Part III of the Ginnie Mae Multiclass Securities Guide) of _________ of the current
principal balance of each underlying Ginnie Mae Certificate)] [in Trust Asset Group [ ]] [is not less
than the aggregate Principal Balance of the Trust MBS.] [In addition, we determined that the current
balance] [of the Trust MBS] is not less than the aggregate Original Class Principal Balances of the
Securities.
12.
We compared the CUSIP Number, [Trust MBS] [Trust Asset] pool type, [Trust MBS] [Trust Asset]
pool number, [Trust MBS] [Trust Asset] pool suffix, Certificate Rate, Issue Date, Maturity Date and
original principal balance of each [Trust MBS] [Trust Asset] shown on Schedule A to the
corresponding information included in the Trustee’s Receipt and Safekeeping Agreement provided to
us by the Trustee and found them to be in agreement.
13.
[For each underlying Ginnie Mae Certificate shown on Schedule C, we compared the underlying
Ginnie Mae Certificate pool number and original principal balance shown on Schedule C to the
corresponding information shown on Ginnie Mae’s Internet Web-site for the Trust MBS shown on
Schedule A and found them to be in agreement.]
14.
[We calculated the percentage of (i) the aggregate original principal balance (as shown in the
Offering Circular Supplement for that Trust MBS on Ginnie Mae’s Internet Web-site) of the Ginnie
*
The first date of the calendar month of the Quarterly Weighted Average Tape.
**
For Ginnie Mae I Certificates.
V-16-3
Mae Platinum Certificate with the CUSIP number shown on Schedule A plus $5,000 (which
represents the Non-Cash Fee, as defined in Part III of the Ginnie Mae Multiclass Securities Guide),
represented by (ii) the original principal balance of the Trust MBS as shown in Schedule A. For each
underlying Ginnie Mae Certificate shown on Schedule C, we compared the underlying Ginnie Mae
Certificate pool number and original balance shown on Schedule C (adjusted for the percentage
calculated in the preceding sentence) to the corresponding information shown on Ginnie Mae’s
Internet Web-site for the Ginnie Mae Platinum Certificate with the CUSIP number shown on
Schedule A and found them to be in agreement.]
15.
[Based upon the assumption that each Mortgage Loan underlying [the Trust MBS] [each underlying
Ginnie Mae Certificate] has a remaining term to maturity equal to the current WARM, a loan age
equal to the current WALA and an interest rate equal to its current WAC, using the [underlying
Ginnie Mae Certificates] [Trust MBS] shown on Schedule [C][A], the terms of the Securities set
forth in the Trust Agreement, and the applicable definitions and methodologies set forth in the 20__
C Offering Circular under the caption “Yield, Maturity and Prepayment Considerations,” and also
assuming that (i) the underlying Mortgage Loans prepay at each of the constant rates of [PSA] [CPR]
shown on Schedule B, (ii) payments on the [underlying Ginnie Mae Certificates] [Trust MBS] and
the Securities are received on the [16th] [20th] of the month, (iii) no redemption occurs, (iv) [the
Non-Cash Fee is equal to ____ of the principal and interest payments on each underlying Ginnie Mae
Certificate and (v)] no optional termination is exercised, we recomputed (a) the Weighted Average
Life of [each] [the] Callable Class and (b) the absolute and percentage differences between [each]
such Weighted Average Life and the Weighted Average Life for [each] such Class set forth in the
20__-C Offering Circular at the corresponding constant rate of [PSA] [CPR]. We compared such
recomputed Weighted Average Lives, absolute differences and percentage differences (expressed as a
percentage of the Weighted Average Life set forth in the 20__-C_ Offering Circular) to the
corresponding information shown on Schedule B and found them to be in agreement. [We compared
such recomputed Weighted Average Lives, absolute differences and percentage differences expressed
as a percentage of the Weighted Average Life set forth in the 20__-C_ Offering Circular shown on
Schedule C to the corresponding information shown on Schedule B and found them to be in
agreement.]]
Using the [Trust MBS] [Trust Assets] on Schedule A and the terms of the Securities set forth in the Trust
Agreement, and assuming (i) the timely payment of principal and interest on the [Trust MBS] [Trust Assets]
and (ii) that no expenses are incurred (other than the Trustee Fee), we determined that payments on the
[Trust MBS] [Trust Assets] would be adequate to make full and timely payments of principal and interest on
the Securities and to reduce the Class Principal Balance of each Class of Securities to zero by its Final
Distribution Date, in each case, in accordance with the terms as set forth in the Trust Agreement regardless
of the rate of prepayments on the Mortgage Loans underlying the [Trust MBS] [Trust Assets].
It should be understood that we make no representations as to (a) questions of legal interpretation; (b) the
sufficiency of these procedures for your purposes; (c) the accuracy of any information reported in the [Factor
Report,] [or] the New Pool Tapes [or Ginnie Mae’s Internet Web-site] [or Bloomberg or orally obtained from
the Information Agent]; (d) the accuracy of the original principal balances set forth on the Trustee’s Receipt,
(e) the reasonableness of any of the assumptions used above[; or (f) whether the Weighted Average Lives of
the Securities will correspond to those on Schedule B [or Schedule C]].
V-16-4
We were not engaged to conduct, and did not conduct, an examination, the objective of which is the
expression of an opinion on the above information. Accordingly, we do not express such an opinion. Had
we performed additional procedures, other matters might have come to our attention that would have been
reported to you, but such procedures would not necessarily reveal any material misstatement of the
information referred to above. Furthermore, there will usually be differences between the actual payments
on the [Trust MBS] [Trust Assets] and the Securities as compared to the payments calculated in accordance
with the assumptions and methodology set forth in the Supplement and described herein, because events and
circumstances frequently do not occur as expected, and those differences may be material. We have no
responsibility to update this report for events and circumstances occurring after the date of this report.
This letter is solely for the information of the addressees and Ginnie Mae’s Financial Advisor in connection
with the issuance of the Securities covered by the Trust Agreement and should not be used by those who
have not agreed to the procedures and taken responsibility for the sufficiency of the procedures for their
purposes. It is not to be used, circulated, quoted or otherwise referred to for any other purpose, including but
not limited to, the purchase or sale of the Securities, nor is it to be filed with or referred to in whole or in part
in the Trust Agreement or the Offering Circular or any other document, except that reference may be made to
it in the Sponsor Agreement or in any list of closing documents pertaining to the issuance of the Securities.
Yours truly,
V-16-5
Schedule A
TRUST ASSETS
CUSIP
No.
Pool
Number/
Pool Suffix
Pool
Type
Issue
Date
Certificate
Rate
Maturity
Date
Original
Principal
Balance
Current
Principal
Balance
Current
WAC
Current
WALA
Current
WARM
Group
ID
Depository
Institution
V-16-6
FORM OF CLOSING FLOW OF FUNDS INSTRUCTION LETTER
FOR CALLABLE SECURITIES
V-17-0
CLOSING FLOW OF FUNDS INSTRUCTION LETTER
REGARDING THE TRANSFER OF FUNDS
BY THE SPONSOR TO THE TRUSTEE
AND THE SUBSEQUENT DISBURSEMENT OF FUNDS
BY THE TRUSTEE TO GINNIE MAE
_______________ __, 20___
[Trustee]
Ginnie Mae Callable Trust 20___-C__
Ladies and Gentlemen:
Reference is hereby made to the above-referenced transaction which is scheduled to close on
________________ __, 20__ (the “Closing Date”). On the Closing Date, using a delivery versus payment
function, simultaneously upon transfer to us (or our designee) of the Class __ Certificate of the abovereferenced trust, we shall transfer to you $____________, which shall be disbursed to Ginnie Mae to cover
the fees and expenses of those persons who are to be paid from the proceeds of the transaction. We hereby
instruct you to disburse such amount to Ginnie Mae via pay.gov.
*
*
*
*
*
*
*
V-17-1
If any questions, please call Ginnie Mae’s Treasurer’s Division at (202) 708-2257.
Very truly yours,
[Sponsor]
By:_______________________________
Its:_______________________________
cc:
G
innie Mae
Treasurer’s Division
(202) 485-8857 (Fax)
V-17-2
FORM OF CLOSING CHECKLIST AND TABLE OF CONTENTS
FOR CALLABLE SECURITIES
V-18-0
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
GUARANTEED CALLABLE PASS-THROUGH SECURITIES
GINNIE MAE CALLABLE TRUST 20__-C_
$___________ Aggregate Principal Amount
________ __, 20__
—————————————
PARTIES TO THE TRANSACTION
“Ginnie Mae”
Government National Mortgage Association
“Financial Advisor” or “FA”
Ernst & Young LLP
“Legal Advisor” or “LA”
[Hunton & Williams LLP] [Thacher Proffitt &
Wood LLP]
“Sponsor” or “S”
__________________________
“Trust Counsel” or “TC”
__________________________
“Accountant” or “A”
__________________________
“Trustee” or “T”
__________________________
“Trustee’s Counsel” or “TeeC”
__________________________
“Information Agent”
The Bank of New York
“Book-Entry Depository”
The Federal Reserve Bank of New York
“Printer”
__________________________
V-18-1
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
GUARANTEED CALLABLE PASS-THROUGH SECURITIES
AND CALLABLE SECURITIES
GINNIE MAE CALLABLE TRUST 20__-C_
$___________ Aggregate Principal Amount
________ __, 20__
—————————————
TABLE OF CONTENTS
(Incorporating by Reference the _________ 1, ____ Edition of the Guide
[, as amended through _______________, 20 ])
Responsible
Party
Signatures Tab
Document
I.
II.
III.
TRANSACTION INITIATION AND SPONSOR AGREEMENT
A.
Transaction Initiation Letter ........... .............. ............. .............
GNMA
GNMA, S
1
B.
Sponsor Agreement .......... ............. .............. ............. .............
TC
GNMA, S
2
C.
Standard Sponsor Provisions .......... .............. ............. .............
LA
N/A
3
OFFERING DOCUMENTS
A.
Offering Circular ............. ............. .............. ............. .............
TC
N/A
4
B.
Accountants’ Agreed-Upon Procedures Report concerning the
Offering Circular ............. ............. .............. ............. .............
A
A
5
TC
T
6
Trust Agreement, dated as of Closing Date, between the Trustee
and the Sponsor ............. ............. .............. ............. ............. TC
S, T
7
C.
Standard Trust Provisions. ............. .............. ............. .............
LA
N/A
8
D.
GNMA Guaranty Agreement ......... .............. ............. .............
LA
GNMA
9
E.
OID Pricing Letter............ ............. .............. ............. .............
S
S
10
F.
Issuance Statement ........... ............. .............. ............. .............
TC
S
12
ESTABLISHMENT OF THE TRUST AND ISSUANCE OF THE
SECURITIES
A.
B.
Trustee’s Receipt and Safekeeping Agreement (with Exhibit
provided by Trustee)......... ............. .............. ............. .............
V-18-2
Responsible
Party
Signatures Tab
Document
IV.
OPINIONS OF COUNSEL AND ACCOUNTANTS’ AGREED-UPON
PROCEDURES REPORT
A.
Opinions of Trust Counsel ............. .............. ............. .............
TC
TC
1.
Transaction Opinion ......... ............. .............. ............. .............
TC
TC
12
2.
Tax Opinion
TC
TC
13
B.
Opinion of Sponsor........... ............. .............. ............. .............
S
S
14
C.
Opinion of Trustee’s Counsel......... .............. ............. .............
TeeC
TeeC
15
D.
Opinion of HUD General Counsel . .............. ............. .............
LA
[Already
Signed]
16
E.
Accountants’ Agreed-Upon Procedures Report as of the
Closing Date ....... ............. ............. .............. ............. .............
A
A
17
Economic Representation Letter .... .............. ............. .............
S
S
18
F.
V.
............. ............. .............. ............. .............
MISCELLANEOUS
A.
Closing Flow of Funds Instruction Letter...... ............. .............
TC
S
19
B.
Glossary.............. ............. ............. .............. ............. .............
LA
N/A
20
C.
W
orking Group List ......... ............. .............. ............. .............
TC
N/A
21
V-18-3
| File Type | application/pdf |
| File Title | Microsoft Word - 794692_14.DOC |
| Author | 09314 |
| File Modified | 2008-12-05 |
| File Created | 2008-11-09 |