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 decrement 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, regardless of whether the assets
consist of Trust MBS or Underlying Certificates will evidence, directly or indirectly, Ginnie Mae
Certificates.
The Trust MBS (Group 1)
The Group 1 Trust Assets are either:
1. Ginnie Mae II MBS Certificates guaranteed by Ginnie Mae, or
2. Ginnie Mae Platinum Certificates backed by Ginnie Mae II MBS Certificates and
guaranteed by Ginnie Mae.
Each Mortgage Loan underlying a Ginnie Mae II MBS Certificate issued prior to July 1, 2003
bears interest at a Mortgage Rate 0.50% to 1.50% per annum greater than the related Certificate
Rate. Each Mortgage Loan underlying a Ginnie Mae II MBS Certificate issued on or after July 1,
2003 bears interest at a Mortgage Rate 0.25% to 0.75% per annum greater than the related
Certificate Rate. Ginnie Mae receives a fee (the "Ginnie Mae Certificate Guaranty Fee") for its
guaranty of each Ginnie Mae II MBS Certificate of 0.06% per annum of the outstanding
principal balance of each related Mortgage Loan. The difference between (a) the Mortgage
Rate and (b) the sum of the Certificate Rate and the Ginnie Mae Certificate Guaranty Fee is
used to pay the related servicers of the Mortgage Loans a monthly servicing fee.
The Underlying Certificates (Group 2)
The Group 2 Trust Assets are Underlying Certificates that represent beneficial ownership
interests in separate trusts, the assets of which evidence direct or indirect beneficial ownership
interests in certain Ginnie Mae Certificates. Each Underlying Certificate constitutes all or a
portion of a class of a separate Series of certificates described in the related Underlying
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