discussions do not purport to deal with all federal tax consequences applicable to all categories of investors, some of which may be subject to special rules. U.S. Treasury Circular 230 Notice The discussion contained in this Supplement and the Base 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 tax penalties. Such discussion is written  to  support  the  promotion  or  marketing  of  the  transactions  or  matters  ad- dressed in this Supplement and the Base 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. REMIC Elections In the opinion of Kennedy Covington Lobdell & Hickman, L.L.P., the Trust will constitute a Double REMIC Series for federal income tax purposes. Separate REMIC elections will be made for the Pooling REMIC and the Issuing REMIC. Regular Securities The Regular Securities will be treated as debt instruments issued by the Issuing REMIC for federal income tax purposes. Income on the Regular Securities must be reported under an accrual method of accounting. The Class AO, CO, OL, OT and PO Securities are Principal Only Securities. Principal Only Securities are treated for federal income tax purposes as having been issued with an amount of original issue discount ("OID") equal to the difference between their principal balance and their issue price. The Class SL, SM, SN and TS Securities are "Interest Weighted Securities" as described in "Certain Federal Income Tax Consequences – Tax Treatment of Regular Securities – Interest Weighted Securities and Non-VRDI Securities" in the Base Offering Circular. Although the tax treatment  of  Interest  Weighted  Securities  is  not  entirely  certain,  Holders  of  the  Interest Weighted Securities should expect to accrue all income on these Securities (other than income attributable to market discount or de minimis market discount) under the OID rules based on the expected payments on these Securities at the prepayment assumptions described below. In addition to the Regular Securities described in the preceding two paragraphs, based on anticipated prices (including accrued interest), the assumed Mortgage Loan characteristics, the prepayment assumptions described below and, in the case of the Floating Rate  and Inverse Floating Rate  Classes, the constant LIBOR value described below,  Class TX is  expected to be issued with OID. Prospective investors in the Regular Securities should be aware, however, that the forego- ing  expectations  about  OID  could  change  because  of  differences  (1)  between  anticipated purchase prices and actual purchase prices or (2) between the assumed characteristics of the Trust Assets and the characteristics of the Trust Assets actually delivered to the Trust. The prepayment assumption that should be used in determining the rates of accrual of OID, if any, on the Regular Securities is 275 % PSA in the case of the Group 1 Securities and 180% PSA in the case of the Group 2 Securities (as described in "Yield, Maturity and Prepayment Considera- tions" in this Supplement). In the case of the Floating Rate and Inverse Floating Rate Classes, the constant value of LIBOR to be used for these determinations is 5.32%. No representation is made, however, about the rate at which prepayments on the Mortgage Loans underlying any S-25