RISK FACTORS You should purchase securities only if you understand and are able to bear the associated risks. The risks applicable to your investment depend on the principal and interest type of your securities. This section highlights certain of these risks. The rate of principal payments on the un- derlying  mortgage  loans  will  affect  the
rate of principal payments on your securi- ties. The rate at which you will receive prin-
cipal  payments  will  depend  largely  on  the rate of principal payments, including prepay- ments, on the mortgage loans underlying the related  trust  assets.  We  expect  the  rate  of
principal payments on the underlying mort- gage loans to vary. Borrowers generally may prepay their mortgage loans at any time with- out penalty. Rates  of  principal  payments  can  reduce your  yield.  The  yield  on  your  securities probably will be lower than you expect if:
•  you bought your securities at a premium (interest only securities, for example) and principal payments are faster than you ex- pected, or •  you  bought  your  securities  at  a  discount (principal  only  securities,  for  example) and  principal  payments  are  slower  than you expected. In  addition,  if  your  securities  are  interest only  securities  or  securities  purchased  at  a significant premium, you could lose money
on your investment if prepayments occur at a rapid rate. Under  certain  circumstances,  a  Ginnie Mae issuer has the right to repurchase a defaulted mortgage loan from the related pool of mortgage loans underlying a par- ticular  Ginnie  Mae  MBS  Certificate,  the effect of which would be comparable to a prepayment of such mortgage loan. At its option and without Ginnie Mae's prior con- sent, a Ginnie Mae issuer may repurchase any mortgage loan at an amount equal to par less any  amounts  previously  advanced  by  such issuer in connection with its responsibilities as  servicer  of  such  mortgage  loan  to  the extent that (i) in the case of a mortgage loan included in a pool of mortgage loans under- lying a Ginnie Mae MBS Certificate issued on or before December 1, 2002, such mortgage loan has been delinquent for four consecu- tive months, and at least one delinquent pay- ment remains uncured or (ii) in the case of a mortgage loan included in a pool of mort- gage  loans  underlying  a  Ginnie  Mae  MBS Certificate issued on or after January 1, 2003, no  payment  has  been  made  on  such  mort- gage loan for three consecutive months. Any such repurchase will result in prepayment of the  principal  balance  or  reduction  in  the notional balance of the securities ultimately backed  by  such  mortgage  loan.  No  assur- ances can be given as to the timing or fre- quency of any such repurchases. The level of LIBOR will affect the yields on floating rate and inverse floating rate se- curities. If LIBOR performs differently from what you expect, the yield on your securities may be lower than you expect. Lower levels of LIBOR will generally reduce the yield on floating  rate  securities;  higher  levels  of  LI- BOR will generally reduce the yield on in- verse  floating  rate  securities.  You  should bear in mind that the timing of changes in the  level  of  LIBOR  may  affect  your  yield: generally,  the  earlier  a  change,  the  greater the effect on your yield. It is doubtful that LIBOR will remain constant. An investment in the securities is subject to significant  reinvestment  risk.  The  rate  of principal payments on your securities is un- certain. You may be unable to reinvest the payments on your securities at the same re- turns provided by the securities. Lower pre- vailing   interest   rates   may   result   in   an unexpected return of principal. In that inter- est rate climate, higher yielding reinvestment opportunities  may  be  limited.  Conversely, higher prevailing interest rates may result in slower returns of principal and you may not be able to take advantage of higher yielding investment opportunities. The final payment S-11