GMAC COMMERCIAL
MORTGAGE CORPORATION
REPORT ON COMPLIANCE WITH MINIMUM
SERVICING STANDARDS
DECEMBER 31, 2003
[PRICEWATERHOUSECOOPERS LOGO]
PRICEWATERHOUSECOOPERS LLP
1177 Avenue of the Americas
New York NY 10036
Telephone (646) 471 4000
Facsimile (646) 471 4100
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholder of
GMAC Commercial Mortgage Corporation:
We have examined management's assertion, dated February 23, 2004, about GMAC
Commercial Mortgage Corporation's (the "Company's") compliance with its
established minimum servicing policy ("Servicing Policy"), which management
derived from the Mortgage Bankers Association of America's Uniform Single
Attestation Program for Mortgage Bankers ("USAP"), as of and for the year ended
December 31, 2003 included in the accompanying management assertion (see Exhibit
I). Management is responsible for the Company's compliance with the Servicing
Policy. Our responsibility is to express an opinion on management's assertion
about the Company's compliance based on our examination.
Our examination was made in accordance with attestation standards established by
the American Institute of Certified Public Accountants and, accordingly,
included examining, on a test basis, evidence about the Company's compliance
with the Servicing Policy and performing such other procedures as we considered
necessary in the circumstances. We believe that our examination provides a
reasonable basis for our opinion. Our examination does not provide a legal
determination on the Company's compliance with its Servicing Policy.
In our opinion, management's assertion that, except for instances of
noncompliance, the Company complied with the aforementioned Servicing Policy as
of and for the year ended December 31, 2003, is fairly stated, in all material
respects.
/S/ PRICEWATERHOUSECOOPERS LLP
February 23, 2004
EXHIBIT I
GMAC Commercial Mortgage
200 Witmer Road
Horsham, PA 19044
TEL. 215-328-4622
Fax 215-328-1316
MANAGEMENT'S ASSERTION CONCERNING COMPLIANCE WITH COMPANY
SERVICING POLICY
February 23, 2004
As of and for the year ended December 31, 2003, GMAC Commercial Mortgage
Corporation (fee "Company") has complied in all material respects with the
minimum servicing standards set forth in the Company's Servicing Policy
(attached in Exhibit II), which were derived by management from the Mortgage
Bankers Association of America's Uniform Single Attestation Program for Mortgage
Bankers, except that with respect to the requirement to maintain borrower funds
in appropriate custodial accounts in trust for investors in accordance with
applicable servicing agreement requirements, the Company did not in 2003 timely
transfer reserve account balances for 550 Company originated loans. Such reserve
account balances, which totaled $85 million at September 30, 2003, were recorded
and reconciled at a loan-level. In the fourth quarter of 2003, the reserve funds
were transferred to appropriate custodial bank accounts and existing mitigating
and detective controls were enhanced so that, consistent with Company policy,
upon loan sale all escrow funds, including reserve funds, are timely transferred
to appropriate custodial bank accounts as required in applicable servicing
agreements.
As of December 31, 2003, the Company was covered by various General Motors
Corporation insurance policies providing for $125 million of fidelity bond
insurance and $100 million of errors and omissions insurance.
/s/ Robert D. Feller
- -----------------------------------------
Robert D. Feller
Chief Executive Officer
/s/ Michael I. Lipson
- -----------------------------------------
Michael I. Lipson
Executive Vice President Global Servicing
/s/ Wayne D. Hoch
- -----------------------------------------
Wayne D. Hoch
Executive Vice President and Chief Financial Officer
EXHIBIT II
GMAC COMMERCIAL MORTGAGE CORPORATION MINIMUM SERVICING POLICY
I. CUSTODIAL BANK ACCOUNTS
1. Reconciliations shall be prepared on a monthly basis for all
custodial bank accounts and related bank clearing accounts. These
reconciliations shall:
- be mathematically accurate;
- be prepared within forty-five (45) calendar days after the
cutoff date;
- be reviewed and approved by someone other than the person who
prepared the reconciliation; and
- document explanations for reconciling items. These reconciling
items shall be resolved within ninety (90) calendar days of
identification.
2. Funds of the servicing entity shall be advanced as specified in the
servicing agreement in cases where there is an overdraft in an
investor's or a mortgagor's account and an advance is specified in
the Investor's Servicing Agreement.
3. All cash for each custodial account shall be maintained at a
federally insured depository institution in trust for the applicable
investor or in an investment account in accordance with the
applicable servicing agreement requirements.
4. Escrow funds held in trust for a mortgagor shall be returned to the
mortgagor within thirty (30) calendar days of payoff of the mortgage
loan.
II. MORTGAGE PAYMENTS
1. Mortgage payments which are properly identified with the Company's
account number and which agree to the total amount of the scheduled
payment due shall be deposited into the clearing bank accounts and
related custodial bank accounts within two business days of receipt.
Any mortgage payments which do not meet these parameters will be
researched and deposited into the appropriate bank accounts within
five business days of receipt.
EXHIBIT II
2. Mortgage payments made in accordance with the mortgagor's loan
documents shall be posted to the applicable mortgagor records within
two business days of receipt.
3. Mortgage payments shall be allocated to principal, interest,
insurance, taxes or other escrow items in accordance with the
mortgagor's loan documents.
4. Mortgage payments identified as loan payoffs shall be allocated in
accordance with the mortgagor's loan documents.
III. DISBURSEMENTS
1. Disbursements made via wire transfer on behalf of a mortgagor or
investor shall be made only by authorized personnel.
2. Disbursements made on behalf of a mortgagor or investor shall be
posted within two business days to the mortgagor's or investor's
records maintained by the servicing entity.
3. Tax and insurance payments for those loans that are escrowed shall
be made on or before the penalty or insurance policy expirations
date, as indicated on tax bills and insurance premium notices,
respectively, provided that such support has been received by the
servicing entity at least thirty (30) calendar days prior to these
dates, and the mortgagor has agreed with the amounts due.
4. Any late payment penalties paid in conjunction with the payment of
any tax bill or insurance premium notice shall be paid from the
servicing entity's funds and not charged to the mortgagor, unless
the late payment was due to the mortgagor's error or omission.
5. Amounts remitted to investors per the servicer's investor reports
shall agree with cancelled checks, or other form of payment, or
custodial bank statements.
6. Unissued checks shall be safeguarded so as to prevent unauthorized
access.
IV. INVESTOR ACCOUNTING AND REPORTING
1. Monthly investor reports shall be sent on a monthly basis listing
the total unpaid principal balance and number of loans serviced.
EXHIBIT II
V. MORTGAGOR LOAN ACCOUNTING
1. The servicing entity's mortgage loans shall agree with, or reconcile
to, the records of mortgagors with respect to the unpaid principal
balance on a monthly basis.
2. Adjustments on ARM loans shall be computed based on the related
mortgage note and any ARM rider.
3. Escrow accounts shall be analyzed, in accordance with the
mortgagor's loan documents, on at least an annual basis.
4. Interest on escrow accounts, if required by the mortgage documents,
shall be paid, or credited, to mortgagors in accordance with the
borrower agreements.
VI. DELINQUENCIES
1. Records documenting collection efforts shall be maintained during
the period a loan is in default and shall be updated at least
monthly. Such records shall describe the entity's activities in
monitoring delinquent loans including, for example, phone calls,
letters and mortgage payment rescheduling plans in cases where the
delinquency is deemed temporary.
VII. INSURANCE POLICIES
1. A fidelity bond and errors and omissions policy shall be in effect
on the servicing entity in the amount of coverage represented to
investors in management's assertion.