REMIC Elections In the opinion of Milbank, Tweed, Hadley & McCloy, 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 PO and MO 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  IM, SG, JI and SJ 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 assumption described below. Other than the Regular Securities described in the preceding two paragraphs, based on anticipated prices (including accrued interest), the assumed Mortgage Loan characteristics, the prepayment assumption described below and, in the case of the Floating Rate and Inverse Floating  Rate  Classes,  the  constant  value  of  LIBOR  described  below,  no  Class  of  Regular Securities 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 297% PSA in the case of the Group 1 Securities, 247% PSA in the case of the Group 2 Securities and 225% PSA in the case of the Group 3 Securities. 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% for the Group 1 Classes, 5.5375% for the Group 2 Classes and 5.61125% for the Group 3 Classes. No representation is made, however, about the rate at which prepayments on Mortgage Loans underlying any of the Trust Assets actually will occur or the level of LIBOR at any time after the date of this Supplement. See "Certain Federal Income Tax Consequences" in the Base Offering Circular. The  Regular  Securities  generally  will  be  treated  as  "regular  interests"  in  a  REMIC  for domestic building and loan associations and "real estate assets" for real estate investment trusts ("REITs") as described in "Certain Federal Income Tax Consequences" in the Base Offering Circular. Similarly, interest on the Regular Securities will be considered "interest on obliga- tions secured by mortgages on real property" for REITs. Residual Securities The Class RR Securities will represent the beneficial ownership of the Residual Interest in the Pooling REMIC and the beneficial ownership of the Residual Interest in the Issuing REMIC. The Residual Securities, i.e., the Class RR  Securities, generally will be treated as "residual interests" in a REMIC for domestic building and loan associations and as "real estate assets" for S-27