Other than the Regular Securities described in the preceding two paragraphs, based on anticipated prices (including accrued interest), the assumed Mortgage Loan characteristics and the prepayment assumptions 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 323% PSA in the case of the Group 1 Securities, 224% PSA in the case  of  the  Group  2  Securities,  and  313%  PSA  in  the  case  of  the  Group  3  Securities  (as described  in  "Yield,  Maturity  and  Prepayment  Considerations"  in  this  Supplement).  No representation is made, however, about the rate at which prepayments on the Mortgage Loans underlying any Group of Trust Assets actually will occur. See "Certain Federal Income Tax Consequences" in the Base Offering Circular. Code Section 1272(a)(6), however, authorizes regulations  regarding  the  "Pricing  Prepayment  Assumption"  to  be  used  in  making  these determinations. If these regulations are issued, they may require that a beneficial owner of a Group 2 Security take into account, in making these determinations, the possibility of the retirement  of  the  Group  2  Securities  concurrently  with  the  redemption  of  the  Underlying Callable Securities. 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 each 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 outstanding regular interests in the respective Trust REMICs. 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. Even though the Holders of the Class RR Securities are not entitled to any stated principal or interest payments on the Class RR Securities, the Trust REMICs may have substantial taxable income in certain periods, and offsetting tax losses may not occur until much later periods. Accordingly, a Holder of the Class RR Securities may experience substantial adverse tax timing consequences. Prospective investors are urged to consult their own tax advisors and consider the after-tax effect of ownership of the Residual Securities and the suitability of the Residual Securities to their investment objectives. Prospective Holders of Residual Securities should be aware that, at issuance, based on the expected  prices  of  the  Regular  and  Residual  Securities  and  the  prepayment  assumption described above, the residual interests represented by the Residual Securities will be treated as "noneconomic residual interests" as that term is defined in Treasury regulations. S-26