ment in any class will enable you to realize a
desired yield on that investment.
You will bear the market risks of your invest-
ment. The market values of the classes are
likely to fluctuate. These fluctuations may be
significant and could result in significant
losses to you.
The secondary markets for mortgage-related
securities have experienced periods of illi-
quidity and can be expected to do so in the
future. Illiquidity can have a severely adverse
effect on the prices of classes that are espe-
cially sensitive to prepayment or interest rate
risk or that have been structured to meet the
investment requirements of limited catego-
ries of investors.
The residual securities may experience sig-
nificant adverse tax timing consequences. Ac-
cordingly, you are urged to consult tax
advisors and to consider the after-tax effect of
ownership of a residual security and the suit-
ability of the residual securities to your in-
vestment objectives. See "Certain Federal
Income Tax Consequences" in this supple-
ment and in the base offering circular.
You are encouraged to consult advisors re-
garding 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 and
market risks associated with that class.
The actual characteristics of the underly-
ing mortgage loans will affect the weighted
average lives and yields of your securities.
The yield and prepayment tables in this sup-
plement are based on assumed characteris-
tics 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.
It is highly unlikely that the underlying mort-
gage loans will prepay at any of the prepay-
ment rates assumed in this supplement, or at
any constant prepayment rate.
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 will evidence, directly or indirectly,
Ginnie Mae Certificates.
The Trust MBS
The Trust MBS 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 guaran-
teed 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.
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