-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SclD6PuLfysazZQ27IXjCRaDghCj9IgyvWe/US4SkeEfuEapEq7q84za2RYQPZ1k Xshfig50HtOoc2QDwomvSA== 0001014108-99-000079.txt : 19990414 0001014108-99-000079.hdr.sgml : 19990414 ACCESSION NUMBER: 0001014108-99-000079 CONFORMED SUBMISSION TYPE: 10-K405 PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19981231 FILED AS OF DATE: 19990331 DATE AS OF CHANGE: 19990413 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BLOCK MORTGAGE FINANCE INC ASSET BACKED CERT SERIES 1998 2 CENTRAL INDEX KEY: 0001066643 STANDARD INDUSTRIAL CLASSIFICATION: 6189 IRS NUMBER: 431758633 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K405 SEC ACT: SEC FILE NUMBER: 333-14041-04 FILM NUMBER: 99584141 BUSINESS ADDRESS: STREET 1: ONE FIRST NATIONAL PLAZA SUITE 0126 CITY: CHICAGO STATE: IL ZIP: 60670-0126 BUSINESS PHONE: 8164355000 MAIL ADDRESS: STREET 1: ONE FIRST NATIONAL PLAZA STE 0126 STREET 2: 16TH FLOOR CITY: CHICAGO STATE: IL ZIP: 60670-0126 10-K405 1 FORM 10-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) of THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 1998 Commission File Number 333-14041-04 TRUST CREATED BY BLOCK MORTGAGE FINANCE, INC. (under a Pooling and Servicing Agreement dated as of July 1, 1998, which Trust is the issuer of Block Mortgage Finance Asset Backed Certificates, Series 1998-2) ---------------------- (Exact name of Registrant as specified in its Charter) New York 36-4238147 - - ------------------------------ -------------------- State or other jurisdiction of (I.R.S. Employer of incorporation or organization Identification No.) The First National Bank of Chicago One First National Plaza Chicago, Illinois Attention: Corporate Trust Administration Block Mortgage Finance Asset Backed Certificates, Series 1998-2 60670-0126 - - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (312) 407-0192 Securities registered pursuant to Section 12(b) of the Act: Not applicable. Securities registered pursuant to Section 12(q) of the Act: Not applicable. Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No __ Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (section 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X] Aggregate market value of the voting stock held by non-affiliates of the registrant as of December 31, 1998: Not applicable. Number of shares of common stock as of December 31, 1998: Not applicable. DOCUMENTS INCORPORATED BY REFERENCE None PART I ITEM 1. BUSINESS. The Registrant issued Asset Backed Certificates, Series 1998-2 (the "Securities") pursuant to a Pooling and Servicing Agreement dated as of July 1, 1998 (the "Cut-off Date") among Block Mortgage Finance, Inc., as Depositor, Block Financial Corporation, as Master Servicer, Companion Mortgage Corporation, as Seller, and The First National Bank of Chicago, as Trustee. The assets of the Trust consist primarily of a pool of fixed rate and adjustable rate mortgage loans (the "Mortgage Loans") having an aggregate principal balance as of the Cut-off Date of approximately $252,650,565.18. The Mortgage Loans are secured by one- to four-family residential properties (each, a "Mortgaged Property"). Certificateholders receive monthly Statements to Certificateholders regarding distributions. Further information with respect to the performance of the Trust is summarized in the monthly Statements to Certificateholders, which are filed on Form 8-K. ITEM 2. PROPERTIES. Information regarding the Mortgaged Properties securing the Mortgage Loans is set forth in the Prospectus Supplement and the monthly Statements to Certificateholders, which are filed on Form 8-K. The Trust will acquire title to real estate only upon default of the mortgagors under the Mortgage Loans. All real estate acquired and held by the Trust as of February 26, 1999 is improved with single family dwellings. The following table describes real estate acquired and held by the Trust as of February 26, 1999: FIXED RATE MORTGAGE LOANS - - -------------------------------------------------------------------------------- PRINCIPAL BALANCE $465,190.00 PERCENTAGE OF POOL BALANCE 0.2588% ------------------------------------------------------------------------------ NUMBER OF LOANS 9 PERCENTAGE OF LOANS IN POOL 0.2921% ------------------------------------------------------------------------------ ADJUSTABLE RATE MORTGAGE LOANS - - -------------------------------------------------------------------------------- PRINCIPAL BALANCE $0 PERCENTAGE OF POOL BALANCE 0% ------------------------------------------------------------------------------ NUMBER OF LOANS 0 PERCENTAGE OF LOANS IN POOL 0% ------------------------------------------------------------------------------ ITEM 3. LEGAL PROCEEDINGS. There are no material pending legal proceedings involving the Trust or, with respect to the Trust or the Mortgage Loans, the Trustee, the Master Servicer or the Depositor, other than ordinary routine litigation incidental to the Trustee's, the Master Servicer's or the Depositor's duties under the Pooling and Servicing Agreement. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. No matters were submitted to a vote of Certificateholders during the fiscal year covered by this report. PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS. The Registrant's Asset Backed Certificates, Series 1998-2 represent non-recourse obligations of the Trust, such Trust having assets which consist of the Mortgage Loans. Strictly speaking, Registrant has no "common equity," but for purposes of this Item only, Registrant's Asset Backed Certificates, Series 1998-2 are treated as "common equity." (a) Market Information. There is no established public trading market for Registrant's Securities. (b) Certificateholders. The approximate number of registered holders of each class of Certificates as of December 31, 1998 is set forth below: Class Certificateholders ----- ------------------ A-1 3 A-2 3 A-3 2 A-4 3 A-5 1 A-6 1 A-7 4 A-8 1 R 2 (c) Dividends. Not applicable. The information regarding dividends required by sub-paragraph (c) of Item 201 of Regulation S-K is inapplicable because the Trust does not pay dividends. However, information as to distributions to Certificateholders is provided in the monthly Statements to Certificateholders for each month of the fiscal year in which a distribution to Certificateholders was made. ITEM 6. SELECTED FINANCIAL DATA. Not Applicable. Because of the limited activities of the Trust, information with respect to the performance of the Trust is summarized in the monthly Statements to Certificateholders, which are filed on a monthly basis on Form 8-K. However, certain selected aggregate information with respect to the Trust for 1998 is filed as an exhibit to this report. ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. Not Applicable. The information required by Item 303 of Regulation S-K is not meaningful in light of the nature of the Trust. Information concerning the Mortgage Loans and distributions to the Certificateholders is contained in the monthly Statements to Certificateholders which are filed on Form 8-K. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK. Not applicable. The Trust does not engage in the types of transactions required to be disclosed under this Item. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. Not Applicable. Information with respect to the Trust is contained in the monthly Statements to Certificateholders filed on a monthly basis on Form 8-K. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. None. PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT. Not Applicable. The Trust does not have officers or directors. ITEM 11. EXECUTIVE COMPENSATION. Not Applicable. The Trust does not have officers or directors to whom compensation needs to be paid. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT. (a) Security ownership of certain beneficial owners. Not Applicable. Under the Pooling and Servicing Agreement governing the Trust, the holders of the Certificates generally do not have the right to vote and are prohibited from taking part in management of the Trust. (b) Security ownership of management. Not Applicable. The Trust does not have any officers or directors. (c) Changes in control. Not Applicable. Because Certificateholders do not possess, directly or indirectly, the power to direct or cause the direction of the management and policies of the Trust, other than with respect to certain required consents to amendments to the Pooling and Servicing Agreement and the ability to act as a group in the event of the occurrence of certain events which if continuing would constitute events of default under the Pooling and Servicing Agreement, the information requested with respect to Item 403(c) of Regulation S-K is inapplicable. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. Not Applicable. The Trust does not have officers or directors and under the Pooling and Servicing Agreement governing the Trust. In addition, the Registrant does not have knowledge of any transaction required to be disclosed by Items 404(a)(3) or (a)(4) of Regulation S-K. PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K. (a) The following is a list of documents filed as part of this report: EXHIBITS 4.1 Pooling and Servicing Agreement dated as of July 1, 1998 (hereby incorporated herein by reference as Exhibit 4 to Depositor's Current Report on Form 8-K dated July 21, 1998). 99.1 Master Servicer Annual Officer's Certificate dated March 30, 1999. 99.2 Report of Independent Accountants pertaining to Companion Servicing Company, L.L.C., dated March 31, 1999. 99.3 Aggregate Information from Statements to Certificateholders Relating to 1998 Distributions to Holders of Block Mortgage Finance Asset Backed Certificates, Series 1998-2. 99.4 Consolidated financial statements of MBIA Insurance Corporation and its subsidiaries as of December 31, 1998 and 1997 and for the three years ended December 31, 1998 (hereby incorporated herein by reference to the Annual Report on Form 10-K of MBIA Inc. for the year ended December 31, 1998 under Commission file number 001-09583). (b) Reports on Form 8-K Current Report on Form 8-K dated October 26, 1998 (filing monthly Statements to Certificateholders) Current Report on Form 8-K dated November 25, 1998 (filing monthly Statements to Certificateholders) Current Report on Form 8-K dated December 28, 1998 (filing monthly Statements to Certificateholders) (c) The exhibits required to be filed by Registrant pursuant to Item 601 of Regulation S-K are listed above and in the Exhibit Index that immediately follows the signature page hereof. (d) Not Applicable. The Trust does not have any subsidiaries or affiliates. Therefore, no financial statements are filed with respect to subsidiaries or affiliates. SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO SECTION 15(D) BY REGISTRANTS WHICH HAVE NOT REGISTERED SECURITIES PURSUANT TO SECTION 12 OF THE ACT No Annual report, proxy statement, form of proxy or other soliciting material has been sent to Security Holders, and the Registrant does not contemplate sending any such materials subsequent to the filing of this report. SIGNATURE Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Block Financial Corporation, not in its individual capacity but solely as a duly authorized agent of the Registrant pursuant to Section 8.17 of the Pooling and Servicing Agreement dated as of July 1, 1998. By: /s/ Bret G. Wilson Name: Bret G. Wilson Title: Vice President Date: March 31, 1999 EXHIBIT INDEX EXHIBIT DOCUMENT 4.1 Pooling and Servicing Agreement dated as of July 1, 1998 (hereby incorporated herein by reference as Exhibit 4 to Depositor's Current Report on Form 8-K dated July 21, 1998). 99.1 Master Servicer Annual Officer's Certificate dated March 30, 1999. 99.2 Report of Independent Accountants pertaining to Companion Servicing Company, L.L.C., dated March 31, 1999. 99.3 Aggregate Information from Statements to Certificate-holders Relating to 1998 Distributions to Holders of Block Mortgage Finance Asset Backed Certificates, Series 1998-2. 99.4 Consolidated financial statements of MBIA Insurance Corporation and its subsidiaries as of December 31, 1998 and 1997 and for the three years ended December 31, 1998 (hereby incorporated herein by reference to the Annual Report on Form 10-K of MBIA Inc. for the year ended December 31, 1998 under Commission file number 001-09583). EX-99.1 2 MASTER SERVICER ANNUAL OFFICER'S CERTIFICATE BLOCK MORTGAGE FINANCE, INC. ASSET BACKED CERTIFICATES, SERIES 1998-2 MASTER SERVICER ANNUAL OFFICER'S CERTIFICATE March 30, 1999 Pursuant to the provisions of Section 8.16 of the Pooling and Servicing Agreement dated as of July 1, 1998, by and between BLOCK MORTGAGE FINANCE, INC., as Depositor, COMPANION MORTGAGE CORPORATION, as Seller, BLOCK FINANCIAL CORPORATION, as Master Servicer, and THE FIRST NATIONAL BANK OF CHICAGO, N.A., as Trustee (the "PSA"), I, Bret G. Wilson, Vice President of the Master Servicer, hereby certify as follows: (i) a review of the activities of the Master Servicer during the preceding calendar year and of performance under the PSA has been made under my supervision; (ii) to the best of my individual knowledge based on such review, the Master Servicer has fulfilled all of its obligations under the PSA for such year; and (iii) the Master Servicer's short-term commercial paper is rated is A1 by Standard & Poor's and P-1 by Moody's. Capitalized terms used herein and not otherwise defined shall have the meanings set forth in the PSA. BLOCK FINANCIAL CORPORATION By: /s/ Bret G. Wilson ------------------------------------ Bret G. Wilson, Vice President EX-99.2 3 REPORT OF INDEPENDENT ACCOUNTANTS Deloitte & Touche LLP Independent Accountant's Report Companion Servicing Company, L.L.C.: We have examined management's assertion about Companion Servicing Company's (the Company's) compliance with the minimum servicing standards identified in the Mortgage Bankers Association of America's Uniform Single Attestation Program for Mortgage Bankers (USAP) as of and for the year ended December 31, 1998, included in the accompanying management assertion. Management is responsible for the Company's compliance with those minimum servicing standards. Our responsibility is to express an opinion on management's assertion about the entity's compliance based on our examination. Our examination was made in accordance with standards established by the American Institute of Certified Public Accountants and, accordingly, included examining, on a test basis, evidence about the Company's compliance with the minimum servicing standards and performing such other procedures as we considered necessary in the circumstances. We believe that our examination provides a reasonable basis for our opinion. Our examination does not provide a legal determination on the Company's compliance with the minimum servicing standards. In our opinion, management's assertion that the Company complied with the aforementioned minimum servicing standards as of and for the year ended December 31, 1998 is fairly stated, in all material respects. /s/ Deloitte & Touche LLP March 26, 1999 Companion Servicing Company, L.L.C. As of and for the year ended December 31, 1998, Companion Servicing Company, L.L.C. has complied in all material respects with the minimum servicing standards set forth in the Mortgage Bankers Association of America's Uniform Single Attestation Program for Mortgage Bankers. As of and for this same period, Companion Servicing Company, L.L.C. had in effect a fidelity bond errors and omissions policy in the amount of $1,500,000.00. /s/ Dan Starowicz ------------------------------------------- Dan Starowicz Vice President 3-26-99 ------------------------------------------ Date: March 26, 1999 /s/ Randy McCurry ------------------------------------------ Randy McCurry V.P. Chief Financial Officer 3-26-99 ------------------------------------------ Date: March 26, 1999 EX-99.3 4 AGGREGATE INFORMATION 1998-2 Block Mortgage Finance, Inc. Asset Backed Certificates Series 1998-2 Statement to Certificatesholders Aggregate Information for 1998
- - -------------------------------------------------------------------------------------------------------------------- CLASS ORIGINAL FACE VALUE PRINC DISTRI INT. DISTR TOTAL DISTR. ENDING CERT. BAL - - -------------------------------------------------------------------------------------------------------------------- A-1 $50,000,000.00 $14,583,440.40 $1,466,870.58 $16,050,310.97 $35,416,559.60 A-2 20,000,000.00 0.00 624,000.00 624,000.00 20,000,000.00 A-3 18,000,000.00 0.00 569,700.00 569,700.00 18,000,000.00 A-4 22,000,000.00 0.00 831,600.00 831,600.00 22,000,000.00 A-5 11,464,000.00 0.00 389,202.78 389,202.78 11,464,000.00 A-6 13,496,000.00 0.00 430,522.38 430,522.38 13,496,000.00 A-7 87,384,000.00 10,925,227.60 2,445,745.12 13,370,972.71 76,458,772.40 A-8 29,128,000.00 0.00 907,337.22 907,337.22 29,128,000.00 TOTALS $251,472,000.00 $25,508,668.00 $7,664,978.08 $33,173,646.06 $225,963,332.00 Group I Group II Sec 7.09 (a) (i) Scheduled Principal $741,808.62 $265,261.73 Principal Prepayments $11,168,244.58 $8,499,630.64 Net Liquidation Proceeds 0 $103,436.49 Paid Principal Carry Forward Amount 0 0 Remaining Unpaid Prin. Carry Forward Amt 0 0 Sec. 7.09 (a) (ii) Compensating Interest $0 $113.91 Paid Interest Carry Forward Amount 0 0 Remaining Unpaid Interest Carry Forward Amt 0 0 A-7 Basis Risk Carryover Amount Paid 0 0 A-7 Basis Risk Carryover Amount Remaining 0 0 Group I Group II Total Sec 7.09 (a) (iv) Aggregate Group Loan Balance $123,050,548.21 $108,797,316.48 $231,847,864.69 Sec 7.09 (a) (v) Servicing Fees $613,101.17 Insurance Premium Amount $174,622.00 Trustee Fee $17,166.83 Sec 7.09 (a) (vii) Current Delinquency Advances $6,376,755.01 Current Servicing Advances 0 Total Unreimbursed Delinq. Adv 0 Total Unreimbursed Servicing Adv 0 Sec 7.09 (a) (viii) (A) (B) - - ------------------------------------------------------------------------------------------------------------------------------------ Not in Foreclosure In foreclosure - - ------------------------------------------------------------------------------------------------------------------------------------ Period Number Princ. Bal Number Prin. Balance - - ------------------------------------------------------------------------------------------------------------------------------------ Fixed Group 1-29 days 1012 $51,408,043.44 9 $383,746.29 30-59 Days 438 $23,513,841.88 5 $210,500.16 60-89 days 98 $5,283,064.05 1 $26,950.10 90+ Days 59 $3,016,440.64 60 $3,420,952.99 - - ------------------------------------------------------------------------------------------------------------------------------------ 1-29 days 498 $49,686,990.75 2 $110,984.53 Adj Group 30-59 Days 237 $22,050,393.25 2 $208,853.61 60-89 days 56 $5,910,330.72 2 $187,485.65 90+ Days 30 $2,783,702.26 31 $3,322,726.27 - - ------------------------------------------------------------------------------------------------------------------------------------ Sec. 7.09 (a) (xi) Insured Payment 0 Class A-1 Allocation 0 Class A-2 Allocation 0 Class A-3 Allocation 0 Class A-4 Allocation 0 Class A-5 Allocation 0 Class A-6 Allocation 0 Class A-7 Allocation 0 Class A-8 Allocation 0 Group I Group II Sec. 7.09 (a) (xii) Subordinated Amount $9,538,948.25 $ 14,103,945.42 Subordination Deficit 0 0 Specified Subordinated Amount $48,585,816.48 $49,429,784.76 Sec. 7.09 (a) (xiii) Substitution Adjustments 0 0 Loan Purchase Price Amounts 0 0 Sec. 7.09 (a) (xv) Weighted Average Coupon 11.1159% 10.1519% Weighted Average Remaining Term to Maturity 221 months 269 months Sec. 7.09 (a) (xvi) Largest Loan Balance Outstanding $481,434.01 $447,309.59 Sec. 7.09 (a) (xvii) Available Funds $3,194,378.58 $1,934,540.25 Total Available Funds $3,161,525.72 $2,295,631.95
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