UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
|X| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the fiscal year ended: December 31, 1997
OR
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES ACT OF
1934
For the transition period from __________ to _________.
Commission File Number: 333-16679-1
Headlands Mortgage Securities Inc. (as Sponsor under a Pooling and Servicing
Agreement dated as of February 1, 1997 providing for the issuance of the
Mortgage Pass-Through Certificates, Series 1997-1)
HEADLANDS MORTGAGE SECURITIES INC.
(Exact Name of registrant as specified in its charter)
Delaware 68-0397342
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
1100 Larkspur Landing Circle, Suite 101,
Larkspur, California 94939
(Address of principal executive offices) (Zip code)
(415) 461-6790
(Registrant's telephone number, including area code)
Securities registered pursuant Securities registered pursuant
to Section 12(b) of the Act: to Section 12(g) of the Act:
None None
(Title of class) (Title of class)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes |X| No |_|
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. |X|
State the aggregate market value of the voting stock held by non-affiliates of
Registrant. The aggregate market value shall be computed by reference to the
price at which the stock was sold, or the average bid and asked prices of such
stock, as of specified date within 60 days prior to the date of filing:
Not Applicable
Documents incorporated by reference:
Not Applicable
HEADLANDS MORTGAGE SECURITIES INC.
MORTGAGE PASS-THROUGH CERTIFICATES SERIES 1997-1
INDEX
Page
----
PART I .................................................................... 3
ITEM 1 - BUSINESS................................................. 3
ITEM 2 - PROPERTIES............................................... 3
ITEM 3 - LEGAL PROCEEDINGS........................................ 3
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF
SECURITY HOLDERS......................................... 3
PART II .................................................................... 3
ITEM 5 - MARKET FOR REGISTRANT'S COMMON STOCK AND
RELATED STOCKHOLDER MATTERS.............................. 3
ITEM 6 - SELECTED FINANCIAL DATA.................................. 3
ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS............ 3
ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.............. 3
ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE................... 3
PART III .................................................................... 4
ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF
THE REGISTRANT........................................... 4
ITEM 11 - EXECUTIVE COMPENSATION................................... 4
ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT.................................... 4
ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS........... 8
PART IV .................................................................... 8
ITEM 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND
REPORTS ON FORM 8-K...................................... 8
SIGNATURES ................................................................. 9
INDEX TO EXHIBITS............................................................ 10
2
PART I
ITEM 1 - BUSINESS
Not Applicable.
ITEM 2 - PROPERTIES
Headlands Mortgage Securities Inc. (the "Sponsor") will furnish
information regarding the Mortgaged Properties by reference to the Annual
Compliance Certificates to be filed herein under Item 14.
ITEM 3 - LEGAL PROCEEDINGS
The Sponsor is not aware of any material pending legal proceedings
involving either the Mortgage Pass-Through Certificates Series 1997-1 (the
"Trust"), established pursuant to the Pooling and Servicing Agreement (the
"Agreement") dated February 1, 1997 among The Bank of New York, as trustee (the
"Trustee"), Headlands Mortgage Securities Inc., as Sponsor and Headlands
Mortgage Company, as servicer (the "Servicer"); the Trustee; the Sponsor; or the
Servicer which relates to the Trust.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matter has been submitted to a vote of the holders of beneficial
interests in the Trust through the solicitation of proxies or otherwise.
PART II
ITEM 5 - MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS
To the best knowledge of the Sponsor, there is no established public trading
market for the Certificates.
All of the Class A-I Certificates, Class A-II Certificates, Class B
Certificates, Class X Certificates and Class PO Certificates issued by the Trust
are held by the Depository Trust Company ("DTC") which in turn maintains records
of holders of beneficial interests in such Certificates. Based on information
obtained by the Trust from DTC, as of December 31, 1997, there were 22 holders
of the Class A-I Certificates, 4 holders of the Class A-II Certificates, 6
holders of the Class B Certificates, 1 holder of the Class PO Certificates and 5
holders of the Class X Certificates.
ITEM 6 - SELECTED FINANCIAL DATA
Not Applicable.
ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Not Applicable.
ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION
Not Applicable.
ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
There were no changes of accountants or disagreements on accounting
or financial disclosures between the Sponsor and its accountants.
3
PART III
ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Not Applicable.
ITEM 11 - EXECUTIVE COMPENSATION
Not Applicable.
ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth (i) the name and address of each
entity owning more than 5% of the outstanding principal amount of each Class of
Certificates of the Trust; (ii) the principal amount of the Class of
Certificates owned by each and (iii) the percent that the principal amount of
the Class of Certificates owned by such entity represents of the outstanding
principal amount of such Class of Certificates. The information set forth in the
table for the Certificates is based upon information obtained by the Trust from
DTC and represents ownership of beneficial interest in the Certificates held by
DTC. The Sponsor is not aware of any Schedules 13D or 13G filed with the
Securities and Exchange Commission in respect of the Certificates.
Class A-I-1
Name and Address Principal Amount % of Class
Chase Manhattan Bank/Chemical $28,141,000 100%
4 New York Plaza
Proxy Department, 13th Floor
New York, NY 10004
Class A-I-2
Name and Address Principal Amount % of Class
Morgan Stanley & Co. Inc. $50,000,000 65.8%
One Pierreport Plaza, 7th Floor
Brooklyn, NY 11201
Bank of New York $26,031,000 34.2%
925 Patterson Plank Road
Secaucus, NJ 07094
Class A-I-3
Name and Address Principal Amount % of Class
Bankers Trust Company $76,031,000 100%
648 Gressmere Park Drive
Nashville, TN 37211
Class A-I-4
Name and Address Principal Amount % of Class
Chase Manhattan Bank/Chemical $22,732,010 100%
4 New York Plaza
Proxy Department, 13th Floor
New York, NY 10004
4
Class A-I-5
Name and Address Principal Amount % of Class
Central Fidelity Bank $17,570,000 100%
P.O. Box 27602
5th Floor Vault
Richmond, VA 23261
Class A-I-6
Name and Address Principal Amount % of Class
SSB - Custodian $18,906,000 100%
Joseph J. Callahan
Global Corp. Action Dept. JAB5W
P.P. Box 1631
Boston, MA 02105-1631
Class A-I-7
Name and Address Principal Amount % of Class
The Bank of New York/Barclays $13,568,000 70.6%
One Wall Street, 4th Floor
New York, NY 10286
Investors Bank & Trust/M.F. Custody $5,500,000 28.6%
200 Clarendon Street
15th Floor, Hancock Tower
Boston, MA 02116
Class A-I-8
Name and Address Principal Amount % of Class
Chase Manhattan Bank $14,006,000 100%
4 New York Plaza
13th Floor
New York, NY 10004
Class A-I-9
Name and Address Principal Amount % of Class
Chase Manhattan Bank/Chemical $4,120,000 80.5%
4 New York Plaza
Proxy Department, 13th Floor
New York, NY 10004
Bank Boston
150 Royal Street
Canton, MA 02021 $1,000,000 19.5%
5
Class A-I-10
Bank of New York $1,822,000 60.3%
925 Patterson Plank Road
Secaucus, NJ 07094
McDonald & Company Securities, Inc. $942,000 31.2%
800 Superior Avenue
Cleveland, OH 44114
Bear, Stearns Securities Corp. $200,000 6.6%
One Metrotech Center North
4th Floor
Brooklyn, NY 11201-3862
Class A-I-11
Name and Address Principal Amount % of Class
LBJ-Lehman Government Securities, $22,500,503 41.0%
Inc. (LBJ)
200 Vesey Street
New York, NY 10285
Bank of New York $15,000,000 27.3%
925 Patterson Plank Road
Secaucus, NJ 07094
Morgan Stanley & Co. Inc. $10,000,000 18.2%
One Pierreport Plaza, 7th Floor
Brooklyn, NY 11201
Bankers Trust Company $7,500,00 14.0%
c/o BT Services Tennessee Inc.
648 Gressmere Park Drive
Nashville, TN 37211
Class A-II
Name and Address Principal Amount % of Class
Chase Manhattan Bank $12,380,510 42.7%
4 New York Plaza
13th Floor
New York, NY 10004
Boston Safe Deposit & Trust Company $10,600,000 36.6%
c/o Mellon Bank N.A.
Three Mellon Bank Center, Room
153-3015
Pittsburgh, PA 15259
6
Bank of New York $3,400,000 11.8%
925 Patterson Plank Road
Secaucus, NJ 07094
Northern Trust Company $2,600,000 8.9%
801 S. Canal, C-IN
Chicago, IL 60607
Class B-I
Name and Address Principal Amount % of Class
Bear, Stearns Securities Corp. $5,000,000 58.5%
One Metrotech Center North
4th Floor
Brooklyn, NY 11201-3862
Boston Safe Deposit & Trust Company $3,551,000 41.5%
c/o Mellon Bank N.A.
Three Mellon Bank Center, Room
153-3015
Pittsburgh, PA 15259
Class B-2
Name and Address Principal Amount % of Class
Boston Safe Deposit & Trust Company $5,442,000 100%
c/o Mellon Bank N.A.
Three Mellon Bank Center, Room
153-3015
Pittsburgh, PA 15259
Class B-3
Name and Address Principal Amount % of Class
Boston Safe Deposit & Trust Company $3,500,000 90.0%
c/o Mellon Bank N.A.
Three Mellon Bank Center, Room
153-3015
Pittsburgh, PA 15259
Bankers Trust Company $200,000 5.1%
c/o BT Services Tennessee Inc.
648 Gressmere Park Drive
Nashville, TN 37211
7
Class X-1
Name and Address Principal Amount % of Class
SSB Custodian $141,814,380 71.6%
Global Corp. Action Dept. JAB5W
P.P. Box 1631
Boston, MA 02105-1631
Chase Manhattan Bank $34,963,552 17.6%
4 New York Plaza
13th Floor
New York, NY 10004
Bankers Trust Company $17,276,823 8.7%
c/o BT Services Tennessee Inc.
648 Gressmere Park Drive
Nashville, TN 37211
Class X-2
Name and Address Principal Amount % of Class
Chase Manhattan Bank/Broker & Dealer $51,498,893 100%
Clearance Dept.
4 New York Plaza, 21st Floor
New York, NY 10015
ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None.
PART IV
ITEM 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) The following documents are filed as part of this report:
1. Financial Statements:
Not applicable.
2. Financial Statement Schedules:
Not applicable.
3. Exhibits:
Exhibit No. Description
----------- -----------
99.1. Statement of Compliance of the Master
Servicer.
99.2 Annual Report of Independent Accountant
with respect to the Master Servicer's
overall servicing operations.
8
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Sponsor has duly caused this Report to be
signed on its behalf by the undersigned, thereunto duly authorized.
By: HEADLANDS MORTGAGE SECURITIES INC.,
As Sponsor
By: /s/ Gilbert J. MacQuarrie
---------------------------------------------
Name: Gilbert J. MacQuarrie
Title: Vice President, Treasurer and Secretary
Date: March 26, 1998.
Pursuant to the requirements of the Securities Exchange Act of 1934,
this Report has been signed below by the following persons on behalf of the
Sponsor and in the capacities and on the dates indicated:
Signature Position Date
--------- -------- ----
/s/ Peter T. Paul President and Director March 26, 1998
- ----------------------------- (Principal Executive Officer)
Peter T. Paul
/s/ Becky S. Poisson Vice President and Director March 26, 1998
- -----------------------------
Becky S. Poisson
/s/ Gilbert J. MacQuarrie Vice President, Treasurer, March 26, 1998
- ----------------------------- Secretary and Director
Gilbert J. MacQuarrie (Principal Financial Officer and
Principal Accounting Officer)
/s/ Steven M. Abreu Vice President and Director March 26, 1998
- -----------------------------
Steven M. Abreu
- ----------------------------- Director March __, 1998
Kenneth Siprelle
- ----------------------------- Director March __, 1998
John Edmonds
/s/ Kristen Decker Vice President March 26, 1998
- -----------------------------
Kristen Decker
9
INDEX TO EXHIBITS
Item 14(C)
Exhibit No. Description
- ----------- -----------
99.1 Statement of Compliance of the Master Servicer.
99.2 Annual Report of Independent Accountant with respect to
the Master Servicer's overall servicing operations.
10