minimis  market discount) under the OID  rules based on the expected payments on these Securities at the prepayment assumption described below. The Class Z, ZA, ZC and ZT Securities are Accrual Securities. Holders of Accrual Securities are  required  to  accrue  all  income  from  their  Securities  (other  than  income  attributable  to market discount or de minimis market discount) under the OID rules based on the expected payments on the Accrual Securities at the prepayment assumption described below. In addition to the Regular Securities described in the preceding three 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 LIBOR value described below, Classes MT, TB, TH, TM and TN are 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 295% PSA in the case of the Group 1 and Group  3 Securities, 350% PSA in the case of the Group 2 and Group 6 Securities, 349% PSA in the case of the Group 4 and Group 5 Securities, 237% PSA in the case of the Group 7 Securities, and 203% PSA in  the  case  of  the  Group  8  Securities  (as  described  in  "Yield,  Maturity  and  Prepayment Considerations" 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 5.13% in the case of the Group 1 and Group 3 Securities, 5.12% in the case of the Group 2 Securities, 5.12375% in the case of the Group 4 and Group 5 Securities, 4.9975% in the case of the Group 6 Securities, and 5.06% in the case of the Group 7 Securities. No representation is made, however, about the rate at which prepayments on the Mortgage Loans underlying any Group of 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 REITs,  as  described  in  "Certain  Federal  Income  Tax  Consequences"  in  the  Base  Offering Circular, but will not be treated as debt for federal income tax purposes. Instead, the Holders of the Residual Securities will be required to report, and will be taxed on, their pro rata shares of the taxable income or loss of the Trust REMICs, and these requirements will continue until there are no Securities of any Class outstanding, even though the Holders previously may have received full payment of their stated interest and principal. Thus, Residual Holders will have taxable  income  attributable  to  the  Residual  Securities  even  though  they  will  not  receive principal or interest distributions with respect to the Residual Securities, which could result in a negative after-tax return for the Residual Holders. Prospective investors are urged to consult S-42