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1 -----BEGIN PRIVACY-ENHANCED MESSAGE-----
2 Proc-Type: 2001,MIC-CLEAR
3 Originator-Name: webmaster@www.sec.gov
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11 0000950117-05-004798.txt : 20051219
12 0000950117-05-004798.hdr.sgml : 20051219
13 20051219171242
14 ACCESSION NUMBER: 0000950117-05-004798
15 CONFORMED SUBMISSION TYPE: 424B5
16 PUBLIC DOCUMENT COUNT: 1
17 FILED AS OF DATE: 20051219
18 DATE AS OF CHANGE: 20051219
19
20 FILER:21
22 COMPANY DATA:
23 COMPANY CONFORMED NAME: WaMu Asset Acceptance Corp.
24 CENTRAL INDEX KEY: 0001317069
25 STANDARD INDUSTRIAL CLASSIFICATION: ASSET-BACKED SECURITIES [6189]
26 IRS NUMBER: 202258610
27 STATE OF INCORPORATION: DE
28 FISCAL YEAR END: 1231
29
30 FILING VALUES:
31 FORM TYPE: 424B5
32 SEC ACT: 1933 Act
33 SEC FILE NUMBER: 333-123034
34 FILM NUMBER: 051273376
35
36 BUSINESS ADDRESS:
37 STREET 1: 1201 THIRD AVENUE, 17TH FLOOR
38 CITY: SEATTLE
39 STATE: WA
40 ZIP: 98101
41 BUSINESS PHONE: 206-461-2000
42
43 MAIL ADDRESS:
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44 STREET 1: 1201 THIRD AVENUE, 17TH FLOOR
45 CITY: SEATTLE
46 STATE: WA
47 ZIP: 98101
48
49 SERIAL COMPANY:
50
51 COMPANY DATA:
52 COMPANY CONFORMED NAME: WaMu Mortgage Pass-Through Certificates, Series 2005-AR17
53 CENTRAL INDEX KEY: 0001347345
54 STANDARD INDUSTRIAL CLASSIFICATION: ASSET-BACKED SECURITIES [6189]
55 STATE OF INCORPORATION: DE
56 FISCAL YEAR END: 1231
57
58 FILING VALUES:
59 FORM TYPE: 424B5
60 SEC ACT: 1933 Act
61 SEC FILE NUMBER: 333-123034-07
62 FILM NUMBER: 05127337763
64 BUSINESS ADDRESS:
65 STREET 1: 1201 THIRD AVENUE, 17TH FLOOR
66 CITY: SEATTLE
67 STATE: WA
68 ZIP: 98101
69 BUSINESS PHONE: 206-461-2000
70
71 MAIL ADDRESS:
72 STREET 1: 1201 THIRD AVENUE, 17TH FLOOR
73 CITY: SEATTLE
74 STATE: WA
75 ZIP: 98101
76
77
78 424B5
79 1
80 a41001.txt
81 WASHINGTON MUTUAL 2005-AR17
82
83
84
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128 principal balance of approximately $39,778,690.
129
130 CONSIDER CAREFULLY THE RISK FACTORS
131 BEGINNING ON PAGE S-16 IN THIS
132 PROSPECTUS SUPPLEMENT AND PAGE 5 IN
133 THE ACCOMPANYING PROSPECTUS.
134
135 The certificates will represent
136 interests only in the WaMu Mortgage137 Pass-Through Certificates Series
138 2005-AR17 Trust and will not
139 represent interests in or obligations
140 of Washington Mutual Bank, WaMu Asset
141 Acceptance Corp., Washington Mutual,
142 Inc. or any of their affiliates.
143
144 NEITHER THESE CERTIFICATES NOR THE
145 UNDERLYING MORTGAGE LOANS ARE
146 GUARANTEED BY ANY AGENCY OR
147 INSTRUMENTALITY OF THE UNITED STATES.148
149 This prospectus supplement may be
150 used to offer and sell the offered
151 certificates only if accompanied by
152 the prospectus.
153
154 WaMu Capital Corp. and Greenwich Capital Markets, Inc., as underwriters, will
155 purchase the offered certificates from WaMu Asset Acceptance Corp. in the
156 amounts described in 'Method of Distribution' on page S-73 of this prospectus
157 supplement. The underwriters will offer the offered certificates at varying
158 prices to be determined at the time of sale. The proceeds to WaMu Asset159 Acceptance Corp. from the sale of the offered certificates will be approximately
160 101.88% of the principal balance of the offered certificates plus accrued
161 interest, before deducting expenses. Each underwriter's commission will be the
162 difference between the price it pays to WaMu Asset Acceptance Corp. for the
163 offered certificates and the amount it receives from the sale of the offered
164 certificates to the public.
165
166 NEITHER THE SEC NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED
167 OF THE OFFERED CERTIFICATES OR DETERMINED THAT THIS PROSPECTUS SUPPLEMENT OR THE
168 PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
169 CRIMINAL OFFENSE.
170
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171 Underwriters
172 WAMU CAPITAL CORP.
173 RBS GREENWICH CAPITAL
174
175 December 16, 2005
176
177
178
179
180
181
182 IMPORTANT NOTICE ABOUT INFORMATION PRESENTED IN THIS
183 PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS
184
185 We provide information to you about the offered certificates in two separate
186 documents that progressively provide more detail: (a) the accompanying
187 prospectus, which provides general information, some of which may not apply to
188 your series of certificates, and (b) this prospectus supplement, which describes
189 the specific terms of your series of certificates.
190
191 IF THE TERMS OF YOUR CERTIFICATES VARY BETWEEN THIS PROSPECTUS SUPPLEMENT
192 AND THE ACCOMPANYING PROSPECTUS, YOU SHOULD RELY ON THE INFORMATION IN THIS
193 PROSPECTUS SUPPLEMENT.
194
195 We include cross-references in this prospectus supplement and the
196 accompanying prospectus to captions in these materials where you can find
197 further related discussions. The following table of contents and the table of
198 contents included in the accompanying prospectus provide the pages on which
199 these captions are located.
200
201 You can find a listing of the pages where some of the capitalized terms used202 in this prospectus supplement and the accompanying prospectus are defined under
203 the caption 'Index of Terms' on page S-88 in this prospectus supplement and
204 under the caption 'Glossary' beginning on page 125 in the accompanying
205 prospectus. Capitalized terms used in this prospectus supplement and not
206 otherwise defined in this prospectus supplement have the meanings assigned in
207 the accompanying prospectus.
208
209 S-2
210
211
212
213
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214
215
216 TABLE OF CONTENTS
217
218
219
220 PAGE
221 ----222
223 SUMMARY INFORMATION................... S-4
224 What You Own...................... S-4
225 Information About the Mortgage
226 Pool........................ S-4
227 The Offered Certificates.......... S-4
228 Initial Principal Balance of
229 the Certificates............ S-9
230 Distributions on the
231 Certificates.................... S-10
232 Monthly Distributions......... S-10233 Distributions of Interest..... S-10
234 Compensating Interest and
235 Interest Shortfalls......... S-11
236 Distributions of Principal.... S-12
237 Credit Enhancements............... S-13
238 Yield Maintenance Agreement....... S-13
239 Allocation of Losses.............. S-13
240 Yield Considerations.............. S-14
241 Book-Entry Registration........... S-14
242 Denominations..................... S-14
243 European Economic Area............ S-14244 Legal Investment.................. S-15
245 ERISA Considerations.............. S-15
246 Federal Income Tax Consequences... S-15
247 Ratings........................... S-15
248 RISK FACTORS.......................... S-16
249 THE TRUST............................. S-28
250 DESCRIPTION OF THE MORTGAGE POOL...... S-29
251 The Index......................... S-31
252
Additional Information............ S-32
253 Representations and Warranties254 Regarding the Mortgage Loans.... S-33
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255 DESCRIPTION OF THE CERTIFICATES....... S-34
256 General........................... S-34
257 Book-Entry Registration........... S-35
258 Definitive Certificates........... S-36
259 Priority of Distributions......... S-36
260 Distributions of Interest......... S-38
261 Calculation of LIBOR.............. S-41
262 Distributions of Principal........ S-44
263 General....................... S-44264 Senior Principal Distribution
265 Amount...................... S-45
266 Subordinate Principal
267 Distribution Amount......... S-46
268 Principal Prepayments............. S-46
269 Subordination and Allocation of
270 Losses.......................... S-47
271 The Class R Certificates.......... S-49
272 Advances.......................... S-50
273 Available Distribution Amount..... S-50
274 Last Scheduled Distribution275 Date............................ S-51
276 Optional Termination of the
277 Trust........................... S-51
278 Servicing Compensation and Payment
279 of Expenses..................... S-52
280 Special Servicing Agreements...... S-52
281 Reports to Certificateholders..... S-52
282 DELINQUENCY, LOSS AND FORECLOSURE
283 EXPERIENCE.......................... S-53
284 YIELD AND PREPAYMENT CONSIDERATIONS... S-54
285 General........................... S-54286 Principal Prepayments and
287 Compensating Interest........... S-55
288 LIBOR Certificates................ S-55
289 Rate of Payments.................. S-55
290 Prepayment Assumptions............ S-56
291 Lack of Historical Prepayment
292 Data............................ S-59
293 Yield Considerations with Respect
294 to the Class X Certificates..... S-60
295 Yield Considerations with Respect
296 to the Senior Subordinate
297 Certificates.................... S-61
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298 Additional Yield Considerations
299 Applicable Solely to the Class R
300 Certificates.................... S-64
301 Additional Information............ S-65
302 CREDIT ENHANCEMENTS................... S-65
303 Subordination..................... S-65
304 Shifting of Interests............. S-66
305 YIELD MAINTENANCE AGREEMENT........... S-66
306 MATERIAL FEDERAL INCOME TAX307 CONSEQUENCES........................ S-66
308 Special Tax Considerations
309 Applicable to the Class A and
310 Class B Certificates............ S-67
311 Taxation of the Cap Agreement
312 Portion of the Class X
313 Certificates.................... S-68
314 Special Tax Considerations
315 Applicable to the Residual
316 Certificates.................... S-70
317 CERTAIN LEGAL INVESTMENT ASPECTS...... S-71318 ERISA CONSIDERATIONS.................. S-72
319 METHOD OF DISTRIBUTION................ S-73
320 LEGAL MATTERS......................... S-74
321 CERTIFICATE RATINGS................... S-74
322 APPENDIX A: DECREMENT TABLES.......... S-76
323 APPENDIX B: MORTGAGE LOAN TABLES...... S-78
324 SCHEDULE 1: YIELD MAINTENANCE NOTIONAL
325 BALANCES AND STRIKE RATES........... S-86
326 INDEX OF TERMS........................ S-88
327
328
329 S-3
330
331
332
333
334
335
336 SUMMARY INFORMATION
337
338 THE FOLLOWING SUMMARY HIGHLIGHTS SELECTED INFORMATION FROM THIS PROSPECTUS
339 SUPPLEMENT. IT DOES NOT CONTAIN ALL OF THE INFORMATION THAT YOU NEED TO CONSIDER
340
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IN MAKING YOUR INVESTMENT DECISION. TO UNDERSTAND THE TERMS OF THE OFFERED
341 CERTIFICATES, READ CAREFULLY THIS ENTIRE PROSPECTUS SUPPLEMENT AND THE
342 ACCOMPANYING PROSPECTUS.
343
344 THIS SUMMARY PROVIDES AN OVERVIEW OF CERTAIN CALCULATIONS, CASH FLOWS AND OTHER
345 INFORMATION TO AID YOUR UNDERSTANDING. THIS SUMMARY IS QUALIFIED BY THE FULL
346 DESCRIPTION OF THESE CALCULATIONS, CASH FLOWS AND OTHER INFORMATION IN THIS
347 PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS.
348
349 WHAT YOU OWN
350
351 YOUR CERTIFICATES REPRESENT INTERESTS ONLY IN THE ASSETS OF THE TRUST. ALL
352 PAYMENTS TO YOU WILL COME ONLY FROM THE AMOUNTS RECEIVED IN CONNECTION WITH
353 THOSE ASSETS.
354
355 The Trust owns a pool of mortgage loans and other assets, as described under
356 'The Trust' in this prospectus supplement.
357
358 INFORMATION ABOUT THE MORTGAGE POOL
359
360 The mortgage pool consists of 2,547 mortgage loans with an aggregate principal
361 balance as of December 1, 2005 of approximately $1,591,015,790. All of the
362 mortgage loans are secured by residential properties (or shares of cooperative
363 apartments) and each has an original term to maturity of not more than 40 years.
364 The mortgage loans sold to the WaMu Mortgage Pass-Through Certificates Series
365 2005-AR17 Trust were purchased by WaMu Asset Acceptance Corp., referred to in
366 this prospectus supplement as the depositor, directly from Washington Mutual
367 Bank, the mortgage loan seller and an affiliate of the depositor.
368
369 After an initial fixed-rate period for some of the mortgage loans of one, two,
370 three or twelve months, the interest rate on each mortgage loan will adjust371 monthly to equal the sum of an index and a margin. As of December 1, 2005, none
372 of the mortgage loans were still in their initial fixed-rate period. The
373 interest rates on the mortgage loans are subject to overall maximum and minimum
374 interest rate limits.
375
376 The index for the mortgage loans will be One-Year MTA, the 12-month moving
377 average yield on United States Treasury Securities adjusted to a constant
378 maturity of one year.
379
380 While the interest rate on each mortgage loan will adjust monthly (after the
381 initial fixed-rate period), the minimum monthly payment on each mortgage loan382 generally will adjust only annually. On each annual payment adjustment date, the
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383 minimum monthly payment generally will not increase or decrease by more than
384 7.5%. As a result, the interest due with respect to a mortgage loan for any
385 given month may, under certain circumstances, exceed the monthly payment for
386 that month. In that case, payment of the excess of interest due over the monthly
387 payment will be deferred and that excess will be added to the principal balance
388 of that mortgage loan in the form of 'negative amortization.' See 'Description
389 of the Mortgage Pool' in this prospectus supplement.
390
391 In the event of a material breach of the representations and warranties made by
392 the mortgage loan seller or the depositor with respect to the mortgage loans, or
393 in the event that a required loan document is not included in the mortgage files
394 for the mortgage loans, the breaching party will, unless it has cured the breach
395 in all material respects, be required to repurchase the affected mortgage loan
396 or substitute a new mortgage loan for the affected mortgage loan. See
397 'Description of the Mortgage Pool -- Representations and Warranties Regarding
398 the Mortgage Loans' in this prospectus supplement.
399
400 For a further description of the mortgage loans, see 'Description of the
401 Mortgage Pool' and Appendix B in this prospectus supplement.
402
403 THE OFFERED CERTIFICATES
404
405 The depositor will sell the mortgage loans to the Trust. The Trust is being
406 created for the purpose of issuing the WaMu Mortgage Pass-Through Certificates,
407 Series 2005-AR17. The approximate initial class principal balance, annual
408 certificate
409
410 S-4
411
412
413
414
415
416 interest rate and type of each class of the offered certificates will be as
417 follows:
418
419
420
421 APPROXIMATE ANNUAL
422 INITIAL CLASS CERTIFICATE
423
CLASS PRINCIPAL BALANCE INTEREST RATE TYPE424 425
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- ----------------------------------------------------------------
426
427 A-1A1 $617,784,000 Variable(1) Senior/LIBOR
428 A-1A2 325,000,000 Variable(2) Senior/LIBOR
429 A-1B1 93,433,000 Variable(3) Senior/LIBOR/Mezzanine
430 A-1B2 47,495,000 Variable(4) Senior/LIBOR/Mezzanine
431 A-1B3 65,000,000 Variable(5) Senior/LIBOR/Mezzanine
432 A-1C1 84,450,000 Variable(6) Senior/LIBOR/Mezzanine
433 A-1C2 56,234,000 Variable(7) Senior/LIBOR/Mezzanine434 A-1C3 71,495,000 Variable(8) Senior/LIBOR/Mezzanine
435 A-1C4 75,000,000 Variable(9) Senior/LIBOR/Mezzanine
436 X (10) Variable(11) Senior/IO/PO
437 B-1 35,798,000 Variable(12) Subordinate/LIBOR
438 B-2 27,047,000 Variable(13) Subordinate/LIBOR
439 B-3 8,750,000 Variable(14) Subordinate/LIBOR
440 B-4 11,932,000 Variable(15) Subordinate/LIBOR
441 B-5 7,955,000 Variable(15) Subordinate/LIBOR
442 B-6 6,364,000 Variable(15) Subordinate/LIBOR
443 B-7 5,568,000 Variable(15) Subordinate/LIBOR
444 B-8 5,568,000 Variable(15) Subordinate/LIBOR445 B-9 6,364,000 Variable(15) Subordinate/LIBOR
446 R 100 5.407% Senior/Residual
447
448
449 - ---------
450
451 (1) For each distribution date on or before the date (the 'CLEAN-UP CALL OPTION
452 DATE') on which the aggregate principal balance of the mortgage loans owned
453 by the Trust has been reduced to less than 10% of that balance as of
454 December 1, 2005, the annual certificate interest rate on the Class A-1A1
455 Certificates will equal the least of (x) the product of (i) the weighted
456 average of the mortgage interest rates on the mortgage loans (as of the
457 second preceding due date after giving effect to the payments due on the
458 mortgage loans on that due date) less the per annum rate at which the
459 servicing fee is calculated and (ii) a fraction, the numerator of which is
460 30 and the denominator of which is the actual number of days in the related
461 certificate accrual period (the 'ADJUSTED WEIGHTED AVERAGE PASS-THROUGH
462 RATE'), (y) LIBOR (the London Interbank Offered Rate for one-month U.S.
463 dollar deposits, as described in this prospectus supplement) plus 0.27% and
464 (z) 10.50%. For each distribution date after the Clean-Up Call Option Date,
465 the annual certificate interest rate on the Class A-1A1 Certificates will
466 equal the least of (x) the Adjusted Weighted Average Pass-Through Rate,
467 (y) LIBOR plus 0.54% and (z) 10.50%. For the initial distribution date, the
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468 annual certificate interest rate on these certificates will equal LIBOR as
469 of December 19, 2005 plus 0.27%. In addition, if on any distribution date
470 the certificate interest rate on the Class A-1A1 Certificates is equal to
471 the Adjusted Weighted Average Pass-Through Rate, the Class A-1A1
472 Certificates may be entitled to receive, as interest, carryover shortfall
473 amounts from amounts, if any, paid under a yield maintenance agreement and
474 from amounts, if any, otherwise payable to the Class X Certificates, as
475 described in this prospectus supplement. See 'Description of the
476 Certificates -- Distributions of Interest' in this prospectus supplement.
477
478 (2) For each distribution date on or before the Clean-Up Call Option Date, the
479 annual certificate interest rate on the Class A-1A2 Certificates will equal
480 the least of (x) the Adjusted Weighted Average Pass-Through Rate, (y) LIBOR
481 plus 0.29% and (z) 10.50%. For each distribution date after the Clean-Up
482 Call Option Date, the annual certificate interest rate on the Class A-1A2
483 Certificates will equal the least of (x) the Adjusted Weighted Average
484 Pass-Through Rate, (y) LIBOR plus 0.58% and (z) 10.50%. For the initial
485 distribution date, the annual certificate interest rate on these
486 certificates will equal LIBOR as of December 19, 2005 plus 0.29%. In
487 addition, if on any distribution date the certificate interest rate on the
488 Class A-1A2 Certificates is equal to the Adjusted Weighted Average
489 Pass-Through Rate, the Class A-1A2 Certificates may be entitled to receive,
490 as interest, carryover shortfall amounts from amounts, if any, paid under a
491 yield maintenance agreement and from amounts, if any, otherwise payable to
492 the Class X Certificates, as described in this prospectus supplement. See
493 'Description of the Certificates -- Distributions of Interest' in this
494 prospectus supplement.
495
496 (3) For each distribution date on or before the Clean-Up Call Option Date, the
497 annual certificate interest rate on the Class A-1B1 Certificates will equal
498 the least of (x) the Adjusted Weighted Average Pass-Through Rate, (y) LIBOR
499 plus 0.25% and (z) 10.50%. For each distribution date after the Clean-Up
500 Call Option Date, the annual certificate interest rate on the Class A-1B1
501 Certificates will equal the least of (x) the Adjusted Weighted Average
502 Pass-Through Rate, (y) LIBOR plus 0.50% and (z) 10.50%. For
503
504 S-5
505
506
507
508
509
510
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the initial distribution date, the annual certificate interest rate on these
511 certificates will equal LIBOR as of December 19, 2005 plus 0.25%. In
512
addition, if on any distribution date the certificate interest rate on the
513 Class A-1B1 Certificates is equal to the Adjusted Weighted Average
514 Pass-Through Rate, the Class A-1B1 Certificates may be entitled to receive,
515 as interest, carryover shortfall amounts from amounts, if any, paid under a
516 yield maintenance agreement and from amounts, if any, otherwise payable to
517 the Class X Certificates, as described in this prospectus supplement. See
518 'Description of the Certificates -- Distributions of Interest' in this
519 prospectus supplement.
520
521 (4) For each distribution date on or before the Clean-Up Call Option Date, the
522 annual certificate interest rate on the Class A-1B2 Certificates will equal
523 the least of (x) the Adjusted Weighted Average Pass-Through Rate, (y) LIBOR
524 plus 0.41% and (z) 10.50%. For each distribution date after the Clean-Up
525 Call Option Date, the annual certificate interest rate on the Class A-1B2
526 Certificates will equal the least of (x) the Adjusted Weighted Average
527 Pass-Through Rate, (y) LIBOR plus 0.82% and (z) 10.50%. For the initial
528
distribution date, the annual certificate interest rate on these529 certificates will equal LIBOR as of December 19, 2005 plus 0.41%. In
530 addition, if on any distribution date the certificate interest rate on the
531 Class A-1B2 Certificates is equal to the Adjusted Weighted Average
532 Pass-Through Rate, the Class A-1B2 Certificates may be entitled to receive,
533 as interest, carryover shortfall amounts from amounts, if any, paid under a
534 yield maintenance agreement and from amounts, if any, otherwise payable to
535 the Class X Certificates, as described in this prospectus supplement. See
536 'Description of the Certificates -- Distributions of Interest' in this
537 prospectus supplement
538
539 (5) For each distribution date on or before the Clean-Up Call Option Date, the540 annual certificate interest rate on the Class A-1B3 Certificates will equal
541 the least of (x) the Adjusted Weighted Average Pass-Through Rate, (y) LIBOR
542 plus 0.35% and (z) 10.50%. For each distribution date after the Clean-Up
543 Call Option Date, the annual certificate interest rate on the Class A-1B3
544 Certificates will equal the least of (x) the Adjusted Weighted Average
545 Pass-Through Rate, (y) LIBOR plus 0.70% and (z) 10.50%. For the initial
546 distribution date, the annual certificate interest rate on these
547 certificates will equal LIBOR as of December 19, 2005 plus 0.35%. In
548 addition, if on any distribution date the certificate interest rate on the
549 Class A-1B3 Certificates is equal to the Adjusted Weighted Average
550 Pass-Through Rate, the Class A-1B3 Certificates may be entitled to receive,551 as interest, carryover shortfall amounts from amounts, if any, paid under a
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552 yield maintenance agreement and from amounts, if any, otherwise payable to
553 the Class X Certificates, as described in this prospectus supplement. See
554 'Description of the Certificates -- Distributions of Interest' in this
555 prospectus supplement.
556
557 (6) For each distribution date on or before the Clean-Up Call Option Date, the
558 annual certificate interest rate on the Class A-1C1 Certificates will equal
559 the least of (x) the Adjusted Weighted Average Pass-Through Rate, (y) LIBOR
560 plus 0.19% and (z) 10.50%. For each distribution date after the Clean-Up561 Call Option Date, the annual certificate interest rate on the Class A-1C1
562 Certificates will equal the least of (x) the Adjusted Weighted Average
563 Pass-Through Rate, (y) LIBOR plus 0.38% and (z) 10.50%. For the initial
564 distribution date, the annual certificate interest rate on these
565 certificates will equal LIBOR as of December 19, 2005 plus 0.19%. In
566 addition, if on any distribution date the certificate interest rate on the
567 Class A-1C1 Certificates is equal to the Adjusted Weighted Average
568 Pass-Through Rate, the Class A-1C1 Certificates may be entitled to receive,
569 as interest, carryover shortfall amounts from amounts, if any, paid under a
570 yield maintenance agreement and from amounts, if any, otherwise payable to
571 the Class X Certificates, as described in this prospectus supplement. See572 'Description of the Certificates -- Distributions of Interest' in this
573 prospectus supplement.
574
575 (7) For each distribution date on or before the Clean-Up Call Option Date, the
576 annual certificate interest rate on the Class A-1C2 Certificates will equal
577 the least of (x) the
578
579 S-6
580
581
582
583
584
585 Adjusted Weighted Average Pass-Through Rate, (y) LIBOR plus 0.38% and
586 (z) 10.50%. For each distribution date after the Clean-Up Call Option Date,
587 the annual certificate interest rate on the Class A-1C2 Certificates will
588 equal the least of (x) the Adjusted Weighted Average Pass-Through Rate,
589 (y) LIBOR plus 0.76% and (z) 10.50%. For the initial distribution date, the
590 annual certificate interest rate on these certificates will equal LIBOR as
591 of December 19, 2005 plus 0.38%. In addition, if on any distribution date
592 the certificate interest rate on the Class A-1C2 Certificates is equal to
593 the Adjusted Weighted Average Pass-Through Rate, the Class A-1C2
594 Certificates may be entitled to receive, as interest, carryover shortfall
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595 amounts from amounts, if any, paid under a yield maintenance agreement and
596 from amounts, if any, otherwise payable to the Class X Certificates, as
597 described in this prospectus supplement. See 'Description of the
598 Certificates -- Distributions of Interest' in this prospectus supplement.
599
600 (8) For each distribution date on or before the Clean-Up Call Option Date, the
601 annual certificate interest rate on the Class A-1C3 Certificates will equal
602 the least of (x) the Adjusted Weighted Average Pass-Through Rate, (y) LIBOR
603 plus 0.48% and (z) 10.50%. For each distribution date after the Clean-Up604 Call Option Date, the annual certificate interest rate on the Class A-1C3
605 Certificates will equal the least of (x) the Adjusted Weighted Average
606 Pass-Through Rate, (y) LIBOR plus 0.96% and (z) 10.50%. For the initial
607 distribution date, the annual certificate interest rate on these
608 certificates will equal LIBOR as of December 19, 2005 plus 0.48%. In
609 addition, if on any distribution date the certificate interest rate on the
610 Class A-1C3 Certificates is equal to the Adjusted Weighted Average
611 Pass-Through Rate, the Class A-1C3 Certificates may be entitled to receive,
612 as interest, carryover shortfall amounts from amounts, if any, paid under a
613 yield maintenance agreement and from amounts, if any, otherwise payable to
614 the Class X Certificates, as described in this prospectus supplement. See
615 'Description of the Certificates -- Distributions of Interest' in this
616 prospectus supplement.
617
618 (9) For each distribution date on or before the Clean-Up Call Option Date, the
619 annual certificate interest rate on the Class A-1C4 Certificates will equal
620 the least of (x) the Adjusted Weighted Average Pass-Through Rate, (y) LIBOR
621 plus 0.40% and (z) 10.50%. For each distribution date after the Clean-Up
622 Call Option Date, the annual certificate interest rate on the Class A-1C4
623 Certificates will equal the least of (x) the Adjusted Weighted Average
624 Pass-Through Rate, (y) LIBOR plus 0.80% and (z) 10.50%. For the initial
625 distribution date, the annual certificate interest rate on these
626 certificates will equal LIBOR as of December 19, 2005 plus 0.40%. In
627 addition, if on any distribution date the certificate interest rate on the
628 Class A-1C4 Certificates is equal to the Adjusted Weighted Average
629 Pass-Through Rate, the Class A-1C4 Certificates may be entitled to receive,
630 as interest, carryover shortfall amounts from amounts, if any, paid under a
631 yield maintenance agreement and from amounts, if any, otherwise payable to
632 the Class X Certificates, as described in this prospectus supplement. See
633 'Description of the Certificates -- Distributions of Interest' in this
634 prospectus supplement.
635
636 (10) Solely for purposes of calculating distributions of principal and interest
637
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and the allocation of losses realized on the mortgage loans, the Class X
638 Certificates will be deemed to be comprised of an interest-only component
639 and a principal-only component. The Class X interest-only component will
640 have a notional amount (as described below). Interest, if any, will accrue
641 on the notional amount. The Class X interest-only component will not have a
642 principal balance and principal will not be payable with respect to the
643 notional amount. The Class X principal-only component will have a principal
644 balance, which will be referred to as the Class X principal balance, and
645 which initially will equal zero. Interest will not accrue on the Class X
646 principal balance. In the event that interest otherwise payable with
647 respect to the Class X interest-only component is reduced as a result of
648 the allocation of net negative amortization (as described in 'Description
649 of the Certificates -- Distributions of Interest' in this prospectus
650
651 S-7
652
653
654
655
656
657 supplement), the amount of such reduction will be added as principal to the
658 Class X principal balance.
659
660 (11) For each distribution date, the Class X Certificates will accrue interest
661 on the Class X notional amount, which will equal the aggregate principal
662 balance of the mortgage loans as of the second preceding due date. The
663 initial Class X notional amount will be approximately $1,591,015,790. For
664 each distribution date, the annual certificate interest rate on the
665 Class X Certificates will equal the excess, if any, of (x) the weighted
666
average of the mortgage interest rates on the mortgage loans (as of the667 second preceding due date after giving effect to the payments due on the
668 mortgage loans on that due date) less the per annum rate at which the
669 servicing fee is calculated (the 'WEIGHTED AVERAGE PASS-THROUGH RATE') over
670 (y) a rate equal to a fraction, the numerator of which is the product of
671 (i) the interest accrued on the certificates (other than the Class X
672 Certificates) for such Distribution Date and (ii) 12, and the denominator
673 of which is equal to the aggregate principal balance of the mortgage loans
674 as of the second preceding due date. Notwithstanding the foregoing, amounts
675 to be distributed to the Class X Certificates in respect of interest
676 accrued on their notional amount on any distribution date may instead be
677 distributed as carryover shortfall amounts that are not covered by amounts678 payable pursuant to the yield maintenance agreement. See 'Description of
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679 the Certificates -- Distributions of Interest' in this prospectus
680 supplement.
681
682 (12) For each distribution date on or before the Clean-Up Call Option Date, the
683 annual certificate interest rate on the Class B-1 Certificates will equal
684 the least of (x) the Adjusted Weighted Average Pass-Through Rate,
685 (y) LIBOR plus 0.69% and (z) 10.50%. For each distribution date after the
686 Clean-Up Call Option Date, the annual certificate interest rate on the
687
Class B-1 Certificates will equal the least of (x) the Adjusted Weighted688 Average Pass-Through Rate, (y) LIBOR plus 1.035% and (z) 10.50%. For the
689 initial distribution date, the annual certificate interest rate on these
690 certificates will equal LIBOR as of December 19, 2005 plus 0.69%. In
691 addition, if on any distribution date the certificate interest rate on the
692 Class B-1 Certificates is equal to the Adjusted Weighted Average
693 Pass-Through Rate, the Class B-1 Certificates may be entitled to receive,
694 as interest, carryover shortfall amounts from amounts, if any, otherwise
695 payable to the Class X Certificates, as described in this prospectus
696 supplement. See 'Description of the Certificates -- Distributions of
697 Interest' in this prospectus supplement.
698
699 (13) For each distribution date on or before the Clean-Up Call Option Date, the
700 annual certificate interest rate on the Class B-2 Certificates will equal
701 the least of (x) the Adjusted Weighted Average Pass-Through Rate,
702 (y) LIBOR plus 0.72% and (z) 10.50%. For each distribution date after the
703 Clean-Up Call Option Date, the annual certificate interest rate on the
704 Class B-2 Certificates will equal the least of (x) the Adjusted Weighted
705 Average Pass-Through Rate, (y) LIBOR plus 1.08% and (z) 10.50%. For the
706 initial distribution date, the annual certificate interest rate on these
707 certificates will equal LIBOR as of December 19, 2005 plus 0.72%. In
708 addition, if on any distribution date the certificate interest rate on the
709 Class B-2 Certificates is equal to the Adjusted Weighted Average710 Pass-Through Rate, the Class B-2 Certificates may be entitled to receive,
711 as interest, carryover shortfall amounts from amounts, if any, otherwise
712 payable to the Class X Certificates, as described in this prospectus
713 supplement. See 'Description of the Certificates -- Distributions of
714 Interest' in this prospectus supplement.
715
716 (14) For each distribution date on or before the Clean-Up Call Option Date, the
717 annual certificate interest rate on the Class B-3 Certificates will equal
718 the least of (x) the Adjusted Weighted Average Pass-Through Rate,
719 (y) LIBOR plus 0.79% and (z) 10.50%. For each distribution date after the
720 Clean-Up Call Option Date, the annual certificate interest rate on the721 Class B-3 Certificates will equal the least of (x) the Adjusted Weighted
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722 Average Pass-Through Rate, (y) LIBOR plus 1.185% and
723
724 S-8
725
726
727
728
729
730 (z) 10.50%. For the initial distribution date, the annual certificate731 interest rate on these certificates will equal LIBOR as of December 19,
732 2005 plus 0.79%. In addition, if on any distribution date the certificate
733 interest rate on the Class B-3 Certificates is equal to the Adjusted
734 Weighted Average Pass-Through Rate, the Class B-3 Certificates may be
735 entitled to receive, as interest, carryover shortfall amounts from amounts,
736 if any, otherwise payable to the Class X Certificates, as described in this
737 prospectus supplement. See 'Description of the
738 Certificates -- Distributions of Interest' in this prospectus supplement.
739
740 (15) For each distribution date on or before the Clean-Up Call Option Date, the
741 annual certificate interest rate on the Class B-4, Class B-5, Class B-6,742 Class B-7, Class B-8 and Class B-9 Certificates will equal the least of (x)
743 the Adjusted Weighted Average Pass-Through Rate, (y) LIBOR plus 1.20% and
744 (z) 10.50%. For each distribution date after the Clean-Up Call Option Date,
745 the annual certificate interest rate on the Class B-4, Class B-5,
746 Class B-6, Class B-7, Class B-8 and Class B-9 Certificates will equal the
747 least of (x) the Adjusted Weighted Average Pass-Through Rate, (y) LIBOR
748 plus 1.80% and (z) 10.50%. For the initial distribution date, the annual
749 certificate interest rate on these certificates will equal LIBOR as of
750 December 19, 2005 plus 1.20%. In addition, if on any distribution date the
751 certificate interest rate on the Class B-4, Class B-5, Class B-6,
752 Class B-7, Class B-8 and Class B-9 Certificates is equal to the Adjusted
753 Weighted Average Pass-Through Rate, the Class B-4, Class B-5, Class B-6,
754 Class B-7, Class B-8 and Class B-9 Certificates may be entitled to receive,
755 as interest, carryover shortfall amounts from amounts, if any, otherwise
756 payable to the Class X Certificates, as described in this prospectus
757 supplement. See 'Description of the Certificates -- Distributions of
758 Interest' in this prospectus supplement.
759
760 The Trust will also issue the Class B-10, Class B-11, Class B-12, Class B-13,
761 Class B-14 and Class PPP Certificates, which are not being offered by this
762 prospectus supplement. The Class PPP Certificates will not have a principal
763 balance and will not accrue interest. The Class PPP Certificates will be
764 entitled to receive prepayment penalties paid by borrowers upon voluntary full
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765 prepayment of approximately 81.95% (by aggregate principal balance as of
766 December 1, 2005) of the mortgage loans if such mortgage loans are prepaid
767 during certain periods. Accordingly, these amounts will not be available for
768 distribution to other classes of certificates. The Class B-10, Class B-11,
769 Class B-12, Class B-13 and Class B-14 Certificates are subordinated to the
770 offered certificates and provide credit enhancement for the offered
771 certificates. For each distribution date on or before the Clean-Up Call Option
772 Date, the annual certificate interest rate on the Class B-10, Class B-11,
773 Class B-12, Class B-13 and Class B-14 Certificates will equal the least of
774 (x) the Adjusted Weighted Average Pass-Through Rate, (y) LIBOR plus 1.20% and
775 (z) 10.50%. For each distribution date after the Clean-Up Call Option Date, the
776 annual certificate interest rate on the Class B-10, Class B-11, Class B-12,
777 Class B-13 and Class B-14 Certificates will equal the least of (x) the Adjusted
778 Weighted Average Pass-Through Rate, (y) LIBOR plus 1.80% and (z) 10.50%. For the
779 initial distribution date, the annual certificate interest rate on these
780 certificates will equal LIBOR as of December 19, 2005 plus 1.20%. In addition,
781 if on any distribution date the certificate interest rate on the Class B-10,
782 Class B-11, Class B-12, Class B-13 and Class B-14 Certificates is equal to the
783 Adjusted Weighted Average Pass-Through Rate, the Class B-10, Class B-11,
784 Class B-12, Class B-13 and Class B-14 Certificates may be entitled to receive,
785 as interest, carryover shortfall amounts from amounts, if any, otherwise payable
786 to the Class X Certificates, as described in this prospectus supplement. See
787 'Description of the Certificates -- Subordination and Allocation of Losses' in
788 this prospectus supplement.
789
790 INITIAL PRINCIPAL BALANCE OF THE CERTIFICATES
791
792 The initial aggregate principal balance of the certificates issued by the Trust
793 is approximately $1,591,015,790, subject to an upward or downward variance of no
794 more than 5%.
795
796 The initial aggregate principal balance of the certificates has the following
797 composition:
798
799 S-9
800
801
802
803
804
805
the senior certificates comprise approximately 90.25% of the principal balance806 of the mortgage loans;
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807
808 the Class B-1 through Class B-9 Certificates comprise approximately 7.25% of
809 the principal balance of the mortgage loans; and
810
811 the privately offered Class B-10, Class B-11, Class B-12, Class B-13 and
812 Class B-14 Certificates comprise approximately 2.50% of the principal balance
813 of the mortgage loans.
814
815DISTRIBUTIONS ON THE CERTIFICATES
816
817 MONTHLY DISTRIBUTIONS
818
819 Each month, the trustee, LaSalle Bank National Association, will make
820 distributions of interest and/or principal to the holders of the certificates.
821 Distributions will be made on the 25th day of each month, or if the 25th day is
822 not a business day, on the next business day. The first distribution date will
823 be January 25, 2006.
824
825 Source of Payments. The mortgagors pay their interest and principal during the826 month to Washington Mutual Bank, as servicer. Each month, the servicer subtracts
827 its servicing fee and sends the remainder to the trustee. On the distribution
828 date for that month, the trustee distributes that remaining amount to the
829 holders of the certificates in the order described in 'Description of the
830 Certificates -- Priority of Distributions' in this prospectus supplement.
831
832 Advances. For any month, if the servicer receives a payment on a mortgage loan
833 that is less than the minimum monthly payment due or if no payment is received
834 at all, the servicer will advance its own funds or funds collected by the
835 servicer on the mortgage loans but not required to be distributed to the
836 certificateholders on the current distribution date, to cover the difference837 between the minimum monthly payment due and the amount actually received by the
838 servicer. However, the servicer will not be required to make advances if it
839 determines that those advances will not be recoverable from future payments or
840 collections on that mortgage loan. See 'Description of the
841 Certificates -- Advances' in this prospectus supplement.
842
843 DISTRIBUTIONS OF INTEREST
844
845 Each class of offered certificates will accrue interest on its class principal
846 balance or notional amount, as applicable. On each distribution date interest
847 will be distributed to these classes in the order described in 'Description of848 the Certificates -- Priority of Distributions' in this prospectus supplement.
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849
850 Solely for purposes of calculating distributions of principal and interest and
851 the allocation of losses realized on the mortgage loans, the Class X
852 Certificates will be deemed to be comprised of an interest-only component and a
853 principal-only component. The Class X interest-only component will have a
854 notional amount (as described below). Interest, if any, will accrue on the
855 notional amount. The Class X interest-only component will not have a principal
856 balance and principal will not be payable with respect to the notional amount.
857
The Class X principal-only component will have a principal balance, which will858 be referred to as the Class X principal balance, and which initially will equal
859 zero. Interest will not accrue on the Class X principal balance.
860
861 Interest to be distributed on the certificates (or added to the principal
862 balance of the certificates in the form of 'net negative amortization,' as
863 described below) on any distribution date will consist of accrued and unpaid
864 interest as of previous distribution dates and interest accrued during the
865 period beginning on the 25th day of the preceding calendar month (or, in the
866 case of the first distribution date, December 21, 2005) and ending on the 24th
867 day of the month of that distribution date, except for the Class X Certificates,
868 which accrue interest on their notional amount during the preceding calendar869 month. Interest on the Class A and Class B Certificates will be calculated based
870 on the actual number of days in the certificate accrual period and assuming a
871 360 day year. Interest on the Class X Certificates will be calculated based on a
872 year consisting of twelve thirty-day months.
873
874 In the event that an increase in the index causes interest to accrue on a
875 mortgage loan for a given month in excess of the monthly payment for that
876 mortgage loan, the excess interest will be added to the outstanding principal
877 balance of that mortgage loan in the form of 'negative amortization.' For any
878 distribution date, the excess, if any, of (i) the aggregate amount of negative
879 amortization with respect to all mortgage loans for the calendar month prior to880 that distribution date, over (ii) the aggregate amount of prepayments in full
881 and partial prepayments
882
883 S-10
884
885
886
887
888
889 received with respect to all mortgage loans during the related prepayment period
890 (the 'NET NEGATIVE AMORTIZATION'), will be deducted from interest payable to the
891 certificates as described in 'Description of the Certificates -- Distributions
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892 of Interest' in this prospectus supplement. The amount deducted from the
893 interest payable to each class of certificates will be added to the principal
894 balance of that class.
895
896 It is possible that, on any given distribution date, there will be insufficient
897 payments from the mortgage loans to make the interest distributions (net of any
898 Net Negative Amortization deducted from interest payable) described in this
899 prospectus supplement. If the servicer does not advance its own funds, because
900
it determines that the advance would be nonrecoverable, some certificates, most901 likely the subordinate certificates, may not receive the full amount of accrued
902 interest to which they are entitled. If this happens, those certificates will be
903 entitled to receive any shortfall in interest distributions on future
904 distribution dates in the same priority as their distribution of current
905 interest. However, there will be no extra interest paid on that shortfall.
906
907 The amount of interest each class of Class A and Class B Certificates accrues
908 during each certificate accrual period will equal a ratio, the numerator of
909 which is the actual number of days in that accrual period and the denominator of
910 which is 360, multiplied by the annual certificate interest rate in effect for
911 that accrual period for that class and multiplied by the related class principal
912 balance. The amount of interest the Class X Certificates accrue during each
913 certificate accrual period will equal 1/12th of the annual certificate interest
914 rate in effect for that accrual period for that class multiplied by their
915 notional amount. The principal balance used for this calculation for the
916 Class A and Class B Certificates on the first distribution date will be the
917 applicable principal balance as of December 21, 2005, which is the closing date.
918 The principal balance used for this calculation on each distribution date
919 thereafter will be the applicable principal balance immediately after the
920 preceding distribution date. For a description of how the Class X notional
921 amount is determined, see 'Description of the Certificates -- Distributions of
922 Interest' in this prospectus supplement. The annual certificate interest rate
923 for each class of offered certificates is described on pages S-5 to S-9 of this
924 prospectus supplement.
925
926 No interest will accrue on the Class X principal-only component or on the
927 Class PPP Certificates.
928
929 LIBOR Certificates. The certificate interest rates for the Class A and Class B
930 Certificates adjust monthly based on the average of quotations of the London
931 Interbank Offered Rate for one-month U.S. dollar deposits, or LIBOR, as
932
described in 'Description of the Certificates -- Calculation of LIBOR' in this933 prospectus supplement. The formulas for the calculation of the certificate934
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interest rates for these LIBOR Certificates appear in the notes to the table on
935 page S-5 of this prospectus supplement. However, the certificate interest rate
936 for the Class A-1A1, Class A-1A2, Class A-1B1, Class A-1B2, Class A-1B3,
937 Class A-1C1, Class A-1C2, Class A-1C3, Class A-1C4, Class B-1, Class B-2,
938 Class B-3, Class B-4, Class B-5, Class B-6, Class B-7, Class B-8 and Class B-9
939 Certificates may not exceed the lesser of (a) the Adjusted Weighted Average
940 Pass-Through Rate and (b) 10.50%.
941
942
The Class A and Class B Certificates may receive as interest, in addition to943 interest accrued at their certificate interest rates, carryover shortfall
944 amounts, as described in 'Description of the Certificates -- Distributions of
945
Interest -- Carryover Shortfall Amount' in this prospectus supplement.
946
947 Amounts to be distributed to the Class X Certificates in respect of accrued
948 interest on their notional amount on any distribution date may be reduced by
949 carryover shortfall amounts payable to (i) the Class A Certificates for such
950 distribution date not covered by amounts payable pursuant to the yield
951 maintenance agreement and (ii) the Class B Certificates, as described in
952
'Description of the Certificates -- Distributions of Interest -- Carryover953 Shortfall Amount' in this prospectus supplement.
954
955 COMPENSATING INTEREST AND INTEREST SHORTFALLS
956
957 Prepayments in Full. When mortgagors make prepayments in full, they need not pay
958 a full month's interest. Instead, they are required to pay interest only to the
959 date of their prepayment. To compensate certificateholders for the shortfall in
960 interest this causes, the servicer may pay compensating interest to the
961 certificateholders out of the servicing fee it collects, as well as from certain
962 other sources. For a description of how compensating interest is allocated among
963 the certificates as well as important limitations on the964
965 S-11
966
967
968
969
970
971 amount of compensating interest that will be allocated among the certificates,
972 see 'Description of the Certificates -- Distributions of Interest --
973 Compensating Interest' and 'Yield and Prepayment Considerations' in this
974 prospectus supplement.975
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976 Partial Prepayments. When mortgagors make partial prepayments, they do not pay
977 interest on the amount of that prepayment. Certificateholders will receive no
978 compensating interest to compensate them for the shortfall in interest this
979 causes.
980
981 DISTRIBUTIONS OF PRINCIPAL
982
983 General. As the mortgagors pay principal on the mortgage loans, that principal
984
is passed on to the holders of the certificates, as applicable.985
986 The Class A Certificates and (in the event Net Negative Amortization has been
987 allocated to the Class X Certificates) the Class X Certificates, in the
988 aggregate, generally will receive their pro rata share of scheduled principal
989 payments received on the mortgage loans on each distribution date. In addition,
990 unless credit enhancement to the Class A and Class X Certificates has reached a
991 specified level and the delinquencies and losses on the mortgage loans do not
992 exceed specified limits, the Class A and Class X Certificates, in the aggregate,
993 generally will receive 100% of all principal prepayments received on the
994 mortgage loans, net of any portion thereof applied to reduce negative
995 amortization, until the tenth anniversary of the first distribution date, after996 which they will receive a disproportionately large, but decreasing, share of
997 principal prepayments.
998
999 On each distribution date, a portion of the principal received or advanced on
1000 the mortgage loans will be distributed, first, to the Class A Certificates and,
1001 second, to the Class X Certificates, as described in 'Description of the
1002 Certificates -- Distributions of Principal -- Senior Principal Distribution
1003 Amount' in this prospectus supplement. HOWEVER, NOT ALL OF THESE CERTIFICATES
1004 WILL RECEIVE PRINCIPAL ON EACH DISTRIBUTION DATE. SEE APPENDIX A FOR A TABLE
1005 SHOWING, FOR EACH CLASS OF CERTIFICATES (OTHER THAN THE CLASS X CERTIFICATES),
1006 THE RATE OF RETURN OF PRINCIPAL THAT WOULD RESULT FROM DIFFERENT RATES OF1007 PREPAYMENTS ON THE MORTGAGE LOANS. However, if the subordinate certificates are
1008 no longer outstanding, then the Class A and Class X Certificates will not
1009 receive principal in the order of priority described in 'Description of the
1010 Certificates -- Distributions of Principal -- Senior Principal Distribution
1011 Amount' in this prospectus supplement. Instead, each of these classes of
1012 certificates will generally receive principal pro rata according to its class
1013 principal balance. IF THE SUBORDINATE CERTIFICATES ARE OUTSTANDING, THE CLASS X
1014 CERTIFICATES WILL NOT RECEIVE ANY DISTRIBUTIONS OF PRINCIPAL UNTIL THE PRINCIPAL
1015 BALANCES OF THE CLASS A CERTIFICATES HAVE EACH BEEN REDUCED TO ZERO.
1016
1017 Class B Certificates. On each distribution date, the Class B-1, Class B-2,
1018 Class B-3, Class B-4, Class B-5, Class B-6, Class B-7, Class B-8, Class B-9,
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1019 Class B-10, Class B-11, Class B-12, Class B-13 and Class B-14 Certificates will
1020 be entitled to receive a portion of the scheduled principal received or advanced
1021 on the mortgage loans, pro rata, according to their respective class principal
1022 balances. Unless credit enhancement to the senior certificates has reached a
1023 specified level and the delinquencies and losses on the mortgage loans do not
1024 exceed specified limits, the Class B Certificates generally will receive a
1025 portion of the principal prepayments on the mortgage loans only on and after the
1026 tenth anniversary of the first distribution date. However, under certain
1027
conditions described in this prospectus supplement under 'Description of the1028 Certificates -- Priority of Distributions,' the amount of principal prepayments
1029 otherwise distributable to some classes of Class B Certificates will instead be
1030 paid to other classes of these certificates with a higher priority.
1031
1032 Priority of Principal Distributions. Each class of certificates, receives its
1033 principal entitlements in the order described in 'Description of the
1034 Certificates -- Priority of Distributions' in this prospectus supplement. It is
1035 possible that, on any given distribution date, there will be insufficient
1036 payments from the mortgage loans to make the principal distributions described
1037 in this prospectus supplement. As a result, some certificates, most likely the
1038 subordinate certificates, may not receive the full amount of principal
1039 distributions to which they are entitled.
1040
1041 The Class X Certificates will not receive any distributions of principal in
1042 respect of their notional amount.
1043
1044 S-12
1045
1046
1047
1048
1049
1050 The Class PPP Certificates will not have a principal balance and will not
1051 receive any distributions of principal.
1052
1053 For a more detailed description of how distributions of principal will be
1054 allocated among the various classes of certificates, see 'Description of the
1055 Certificates -- Distributions of Principal' in this prospectus supplement.
1056
1057 CREDIT ENHANCEMENTS
1058
1059 Subordination. The senior certificates will receive distributions of interest
1060 and principal to which they are entitled before the subordinate certificates are1061
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entitled to receive distributions of interest or principal. This provides credit
1062 enhancement to the senior certificates. In a similar fashion, each class of
1063 subordinate certificates will provide credit enhancement to all other
1064 subordinate certificates with lower numerical class designations.
1065
1066 Shifting of Interests. The senior certificates generally will receive their pro
1067 rata share of scheduled principal payments on each distribution date. In
1068 addition, unless credit enhancement to the senior certificates has reached a
1069 specified level and the delinquencies and losses on the mortgage loans do not
1070 exceed specified limits, the senior certificates in the aggregate will receive
1071 100% of all principal prepayments received on the mortgage loans, net of any
1072 portion thereof applied to reduce negative amortization, until the tenth
1073 anniversary of the first distribution date. During the next four years the
1074 senior certificates in the aggregate will generally receive a disproportionately
1075
large, but decreasing, share of principal prepayments. This will result in a
1076 quicker return of principal to the senior certificates and increases the
1077 likelihood that holders of the senior certificates will be paid the full amount
1078 of principal to which they are entitled. For a more detailed description of how
1079 principal prepayments are allocated among the senior certificates and the
1080 subordinate certificates, see 'Description of the Certificates -- Principal
1081 Prepayments' in this prospectus supplement.
1082
1083 YIELD MAINTENANCE AGREEMENT
1084
1085 The holders of the Class A Certificates will have the benefit of payments, if
1086 any, from The Royal Bank of Scotland plc pursuant to a yield maintenance
1087 agreement. The yield maintenance agreement is intended to partially mitigate the
1088 risk to the Class A Certificates that the lesser of (i) LIBOR plus the related
1089 margin and (ii) 10.50% will exceed the Adjusted Weighted Average Pass-Through
1090
Rate. Payments, if any, made pursuant to the yield maintenance agreement will1091 start on the distribution date in February 2006 and will terminate after the
1092 distribution date in August 2014. The holders of the Class X, Class R, Class PPP
1093 and Class B Certificates will not have the benefit of payments made pursuant to
1094 the yield maintenance agreement. See 'Description of the
1095 Certificates -- Carryover Shortfall Amounts' in this prospectus supplement.
1096
1097 ALLOCATION OF LOSSES
1098
1099 Realized Losses. A loss is realized on a mortgage loan when the servicer
1100 determines that it has received all amounts it expects to recover for that
1101 mortgage loan and the amounts are less than the outstanding principal balance of1102 the mortgage loan and its accrued and unpaid interest. LOSSES WILL BE ALLOCATED
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1103 TO THE CERTIFICATES BY DEDUCTING THE LOSSES FROM THE PRINCIPAL BALANCE OF THE
1104 CERTIFICATES WITHOUT MAKING ANY PAYMENTS TO THE CERTIFICATEHOLDERS. The amount
1105 of losses will be allocated to the most junior class of subordinate certificates
1106 then outstanding. Losses will be allocated to the senior certificates other than
1107 the Class R Certificates only after the principal balances of all of the
1108 subordinate certificates have been reduced to zero. After the principal balances
1109 of all of the subordinate certificates have been reduced to zero, any loss with
1110 respect to a mortgage loan will be allocated to the Class A and Class X
1111 Certificates, pro rata, until their respective class principal balances have
1112 been reduced to zero; provided, however, that losses that would otherwise be
1113 allocated to the Class A-1A1 Certificates will be allocated (i) first, to the
1114 Class A-1C1, Class A-1C2, Class A-1C3 and Class A-1C4 Certificates, pro rata,
1115 until their respective class principal balances have each been reduced to zero
1116 and (ii) second, to the Class A-1B1, Class A-1B2 and Class A-1B3 Certificates,
1117 pro rata, until their respective class principal balances have each been reduced
1118 to zero; provided, further, that losses that would otherwise be allocated to the
1119 Class A-1A2 Certificates will be allocated to the Class A-1C1, Class A-1C2,
1120 Class A-1C3 and Class A-1C4 Certificates, pro rata, until their respective class
1121 principal balances have each been reduced to zero; and provided,
1122
1123 S-13
1124
1125
1126
1127
1128
1129 further, that losses that would otherwise be allocated to the Class A-1B1,
1130 Class A-1B2 and Class A-1B3 Certificates will be allocated to the Class A-1C1,
1131 Class A-1C2, Class A-1C3 and Class A-1C4 Certificates, pro rata, until their
1132 respective class principal balances have each been reduced to zero.
1133
1134 YIELD CONSIDERATIONS
1135
1136 The yield to maturity on each class of certificates will depend upon, among
1137 other things:
1138
1139 the price at which the certificates are purchased;
1140
1141 the amount payable to that class as interest, as applicable;
1142
1143 the rate of prepayments (including liquidations) on the mortgage loans; and
1144
1145 whether the optional termination of the Trust occurs.
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1146
1147 The Class X Certificates, which generally receive only distributions of interest
1148 (except for amounts added to their class principal balance as a result of the
1149 allocation of Net Negative Amortization, which is then distributed to the
1150 Class X Certificates as principal), will be especially sensitive to the rate of
1151 prepayments. For a discussion of special yield considerations applicable to
1152 these certificates, see 'Risk Factors' and 'Yield and Prepayment
1153 Considerations -- Yield Considerations with Respect to the Class X Certificates'
1154 in this prospectus supplement.
1155
1156 See 'Yield and Prepayment Considerations' in this prospectus supplement.
1157
1158 BOOK-ENTRY REGISTRATION
1159
1160 In general, the offered certificates, other than the Class R Certificates, will
1161 be available only in book-entry form through the facilities of The Depository
1162 Trust Company, Euroclear and Clearstream. See 'Description of the Securities --
1163 Form of Securities' in the accompanying prospectus.
1164
1165 DENOMINATIONS1166
1167 The offered certificates, other than the Class X and Class R Certificates, are
1168 offered in minimum denominations of $25,000 each and multiples of $1 in excess
1169 of $25,000.
1170
1171 The Class X Certificates are offered in minimum denominations of $100,000
1172 initial class notional amount each and multiples of $1 in excess of $100,000.
1173
1174 The Class R Certificates will have an initial class principal balance of $100
1175 and will be offered in a single certificate that represents a 99.99% interest in
1176 its class.
1177
1178 EUROPEAN ECONOMIC AREA
1179
1180 In relation to each Member State of the European Economic Area which has
1181 implemented the Prospectus Directive (each, a 'Relevant Member State'), each
1182 underwriter has represented and agreed that with effect from and including the
1183 date on which the Prospectus Directive is implemented in that Relevant Member
1184 State (the 'Relevant Implementation Date') it has not made and will not make an
1185 offer of certificates to the public in that Relevant Member State prior to the
1186 publication of a prospectus in relation to the certificates which has been
1187 approved by the competent authority in that Relevant Member State or, where1188
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appropriate, approved in another Relevant Member State and notified to the
1189 competent authority in that Relevant Member State, all in accordance with the
1190 Prospectus Directive, except that it may, with effect from and including the
1191 Relevant Implementation Date, make an offer of certificates to the public in
1192 that Relevant Member State at any time:
1193
1194 (a) to legal entities which are authorized or regulated to operate in the
1195 financial markets or, if not so authorized or regulated, whose corporate
1196 purpose is solely to invest in securities;
1197
1198 (b) to any legal entity which has two or more of (1) an average of at least 250
1199 employees during the last financial year; (2) a total balance sheet of more
1200 than 'E'43,000,000 and (3) an annual net turnover of more than
1201 'E'50,000,000, as shown in its last annual or consolidated accounts; or
1202
1203 (c) in any other circumstances which do not require the publication by the
1204 issuer of a prospectus pursuant to Article 3 of the Prospectus Directive.
1205
1206 For the purposes of this provision, the expression an 'offer of certificates to
1207 the public' in relation to any certificates in any Relevant Member State means
1208 the communication in any form and by any means of sufficient information on the
1209 terms of the offer and the certificates to be offered so as
1210
1211 S-14
1212
1213
1214
1215
1216
1217 to enable an investor to decide to purchase or subscribe the certificates, as
1218 the same may be varied in that Member State by any measure implementing the
1219 Prospectus Directive in that Member State and the expression 'Prospectus
1220 Directive' means Directive 2003/71/EC and includes any relevant implementing
1221 measure in each Relevant Member State.
1222
1223 LEGAL INVESTMENT
1224
1225 As of the date of their issuance, all of the offered certificates, other than
1226 the Class B-4, Class B-5, Class B-6, Class B-7, Class B-8 and Class B-9
1227 Certificates, will be 'mortgage related securities' for purposes of the
1228
Secondary Mortgage Market Enhancement Act of 1984. See 'Certain Legal Investment1229 Aspects' in this prospectus supplement for important information concerning
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1230 possible restrictions on ownership of the offered certificates by regulated
1231 institutions. You should consult your own legal advisors in determining whether
1232 and to what extent the offered certificates constitute legal investments for
1233 you.
1234
1235 ERISA CONSIDERATIONS
1236
1237 Subject to important considerations described under 'ERISA Considerations' in
1238 this prospectus supplement and in the accompanying prospectus, the offered
1239 certificates, other than the Class R Certificates, will be eligible for purchase
1240 by persons investing assets of employee benefit plans or individual retirement
1241 accounts. See 'ERISA Considerations' in this prospectus supplement and in the
1242 accompanying prospectus.
1243
1244 FEDERAL INCOME TAX CONSEQUENCES
1245
1246 For federal income tax purposes, the servicer will cause two REMIC elections to
1247 be made with respect to the Trust (exclusive of the yield maintenance
1248 agreement). The certificates, other than the Class R and Class PPP Certificates,
1249
will represent ownership of REMIC regular interests, coupled with, in the case1250 of the Class A Certificates, an interest in a yield maintenance agreement, and
1251 will generally be treated as representing ownership of debt for federal income
1252 tax purposes. You will be required to include in income all interest and
1253 original issue discount on these certificates in accordance with the accrual
1254 method of accounting regardless of your usual methods of accounting. For federal
1255 income tax purposes, the Class R Certificates will represent ownership of the
1256 REMIC residual interest. The Class PPP Certificates will not represent an
1257 interest in any REMIC.
1258
1259 For further information regarding the federal income tax consequences of
1260 investing in the offered certificates, including important information regarding1261 the tax treatment of the Class R Certificates, see 'Material Federal Income Tax
1262 Consequences' in this prospectus supplement and in the accompanying prospectus.
1263
1264 RATINGS
1265
1266 The offered certificates are required to receive the ratings from Standard &
1267 Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc., and
1268 Moody's Investors Service, Inc. indicated under 'Certificate Ratings' in this
1269 prospectus supplement. The ratings on the offered certificates address the
1270 likelihood of the receipt by holders of the offered certificates of all
1271 distributions on the underlying mortgage loans to which they are entitled. They1272 do not address the likely actual rate of prepayments. The rate of prepayments,
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1273 if different than originally anticipated, could adversely affect the yield
1274 realized by holders of the offered certificates or cause the holders of the
1275 Class X Certificates to fail to recover their initial investment.
1276
1277 S-15
1278
1279
1280
1281
1282
1283
1284 RISK FACTORS
1285
1286 THE OFFERED CERTIFICATES ARE NOT SUITABLE INVESTMENTS FOR ALL INVESTORS. IN
1287 PARTICULAR, YOU SHOULD NOT PURCHASE ANY CLASS OF OFFERED CERTIFICATES UNLESS YOU
1288 UNDERSTAND AND ARE ABLE TO BEAR THE PREPAYMENT, CREDIT, LIQUIDITY AND MARKET
1289 RISKS ASSOCIATED WITH THAT CLASS.
1290
1291 THE OFFERED CERTIFICATES ARE COMPLEX SECURITIES AND IT IS IMPORTANT THAT YOU
1292
POSSESS, EITHER ALONE OR TOGETHER WITH AN INVESTMENT ADVISOR, THE EXPERTISE1293 NECESSARY TO EVALUATE THE INFORMATION CONTAINED IN THIS PROSPECTUS SUPPLEMENT
1294 AND THE ACCOMPANYING PROSPECTUS IN THE CONTEXT OF YOUR FINANCIAL SITUATION.
1295
1296
1297
1298 THERE IS NO GUARANTEE THAT YOU WILL RECEIVE As the mortgagors make payments of interest and
1299 PRINCIPAL PAYMENTS ON YOUR CERTIFICATES AT ANY principal on their mortgage loans, you will receive
1300 SPECIFIC RATE OR ON ANY SPECIFIC DATES payments. Because the mortgagors are free to make
1301 those payments faster than scheduled, you may
1302 receive distributions faster than you expected.
1303 There is no guarantee that you will receive1304 principal payments on your certificates at any
1305 specific rate or on any specific dates.
1306
1307 THE YIELD ON YOUR CERTIFICATES IS DIRECTLY The yield to maturity on your certificates is
1308 RELATED TO THE PREPAYMENT RATE ON THE MORTGAGE directly related to the rate at which the
1309 LOANS mortgagors pay principal on the mortgage loans.
1310 Principal payments on the mortgage loans may be in
1311 the following forms:
1312
1313 scheduled principal payments; and
1314
1315
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principal prepayments, which consist of:
1316
1317 prepayments in full on a mortgage loan;
1318
1319 partial prepayments on a mortgage loan; and
1320
1321 liquidation principal, which is the principal
1322 recovered after foreclosing on or otherwise
1323 liquidating a defaulted mortgage loan.
1324
1325 Each mortgage loan owned by the Trust is an
1326 adjustable-rate mortgage loan with an initial
1327 fixed-rate period. In general, during the initial
1328 fixed-rate period of one, two, three or twelve
1329 months, if prevailing mortgage interest rates
1330 decline significantly below the mortgage interest
1331 rates on the mortgage loans, the prepayment rate
1332 may increase. Penalties for early prepayment may
1333 also affect the prepayment rate, as they may
1334
discourage mortgagors from prepaying their mortgage1335 loans during the period such prepayment penalties
1336 are in effect, even in a declining interest rate
1337 environment. See 'Description of the Mortgage Pool'
1338 in this prospectus supplement for a description of
1339 prepayment penalties imposed on the mortgage loans.
1340 General economic conditions and homeowner mobility
1341 will also affect the prepayment rate. See 'Yield
1342 and Prepayment Considerations' in this prospectus
1343 supplement and 'Yield and Maturity Considerations'
1344 in the accompanying prospectus. The prepayment rate
1345 may affect the yield on all of the offered1346 certificates. However, if you have purchased a
1347 Class X Certificate, the prepayment rate will be
1348 especially important to you.
1349
1350 Washington Mutual Mortgage Securities Corp., an
1351 affiliate of the depositor, filed with the
1352 Securities and Exchange Commission on October 31,
1353 2005 limited historical
1354
1355
1356 S-161357
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1358
1359
1360
1361
1362
1363
1364 information concerning principal prepayment
1365 experience of adjustable rate negative amortization
1366 mortgage loans. However, this historical
1367 information may not be comparable to prepayments
1368 expected to be experienced by the mortgage pool.
1369 See 'Yield and Prepayment Considerations -- Lack of
1370 Historical Prepayment Data' in this prospectus
1371 supplement. If prevailing mortgage interest rates
1372 fall significantly, adjustable-rate mortgage loans
1373 could be subject to higher prepayment rates than if
1374 prevailing mortgage interest rates remain constant
1375 because the availability of fixed-rate mortgage
1376 loans at competitive interest rates may encourage
1377
mortgagors to refinance their mortgage loans to1378 'lock in' lower fixed interest rates. The features
1379 of adjustable-rate mortgage loan programs during
1380 the past years have varied significantly in
1381 response to market conditions including the
1382 interest-rate environment, consumer demand,
1383 regulatory restrictions and other factors. The lack
1384 of uniformity of the terms and provisions of those
1385 adjustable-rate mortgage loan programs have made it
1386 impracticable to compile meaningful comparative
1387 data on prepayment rates and, accordingly, we
1388 cannot assure you as to the rate of prepayments on1389 the mortgage loans in stable or changing interest
1390 rate environments.
1391
1392 From time to time, the servicer may implement
1393 programs to solicit mortgagors of qualifying
1394 mortgage loans that it services for refinance,
1395 including mortgage loans underlying the
1396 certificates. While those programs will not
1397 specifically target the mortgage loans underlying
1398 the certificates for refinance, they may have the
1399 effect of accelerating the prepayment rate of those
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1400 mortgage loans, which would adversely affect the
1401 yield on all classes of certificates purchased at a
1402 premium, particularly the Class X Certificates.
1403
1404 THE YIELD ON YOUR CERTIFICATES MAY BE LIMITED BY Each mortgage loan has a maximum mortgage interest
1405 MAXIMUM MORTGAGE INTEREST RATES rate, which may prevent the mortgage interest rate
1406 on a mortgage loan from increasing, despite
1407 prevailing market interest rates. As a result, the
1408 yield on your certificates may be adversely
1409 affected.
1410
1411 AN OPTIONAL TERMINATION OF THE TRUST MAY When the aggregate principal balance of the
1412 ADVERSELY AFFECT THE OFFERED CERTIFICATES mortgage loans owned by the Trust has been reduced
1413 to less than 10% of that balance as of December 1,
1414 2005, the servicer may purchase all of the mortgage
1415 loans owned by the Trust, which will terminate the
1416
Trust. See 'Description of the
1417 Certificates -- Optional Termination of the Trust'
1418 in this prospectus supplement. If this happens, the
1419 purchase price paid by the servicer will be passed
1420 through to the certificateholders. This would have
1421 the same effect as if all of the remaining
1422 mortgagors made prepayments in full on the last day
1423 of the month. Since the Class X Certificates
1424 generally receive only distributions of interest
1425 (except for interest added to their class principal
1426 balance as a result of the allocation of any Net
1427 Negative Amortization, which is then distributed to
1428 the Class X Certificates as principal), an optional
1429
termination of the Trust would adversely affect1430
1431
1432 S-17
1433
1434
1435
1436
1437
1438
1439
1440 holders of those certificates. In addition, any1441 other class of certificates purchased at a premium
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1442 could be adversely affected by an optional
1443 termination of the Trust.
1444
1445 EVEN IF THE INDEX REMAINS CONSTANT, THE MINIMUM Although none of the mortgage loans were in their
1446 MONTHLY PAYMENT ON THE MORTGAGE LOANS MAY BE fixed-rate period as of the Cut-Off Date, the
1447 LESS THAN THE ACTUAL INTEREST DUE FOR THE FIRST minimum monthly payment for the entire first year
1448 FIVE YEARS, INCREASING THE LIKELIHOOD OF following origination of the mortgage loan reflects
1449 NEGATIVE AMORTIZATION DURING THE EARLY YEARS OF the fixed rate in effect during that initial
1450
THE MORTGAGE LOANS fixed-rate period, which will generally be lower1451 than the fully indexed rate in effect at any time
1452 during the first year. Therefore, even if the index
1453 does not increase, the minimum monthly payment
1454 during the first five years of the mortgage loan
1455 may not be enough to pay the amount of interest due
1456 on the mortgage loan at the fully indexed rate,
1457 which is calculated based on the sum of the index
1458 and the margin.
1459
1460 If the mortgagor chooses to pay the minimum monthly
1461 payment rather than the other higher payment1462 options, this will lead to an increase in the
1463 outstanding principal balance of the mortgage loan
1464 in the form of negative amortization. Even after
1465 the first year, when the minimum monthly payment
1466 may increase by 7.5%, this adjustment may not be
1467 enough to raise the minimum monthly payment to the
1468 amount necessary to pay the interest due on the
1469 mortgage loan based on the sum of the index and the
1470 margin in effect during the following year. If the
1471 new minimum monthly payment is still less than the
1472 fully indexed rate during the following year, there
1473 will continue to be negative amortization if the
1474 mortgagor chooses to pay the minimum monthly
1475 payment.
1476
1477 Therefore the effect of the initial fixed rate at
1478 the beginning of the life of the mortgage loan may
1479 continue to cause the minimum monthly payment to be
1480 less than the monthly interest due on the mortgage
1481 loan until the fifth anniversary of the first due
1482
date when the minimum monthly payment will be reset1483 to a fully-amortizing payment regardless of the
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1484 7.5% limit.
1485
1486 NEGATIVE AMORTIZATION MAY INCREASE LOSSES When interest due on a mortgage loan is added to
1487 APPLIED TO YOUR CERTIFICATES the principal balance of the mortgage loan through
1488 negative amortization, the mortgaged property
1489 provides proportionally less security for the
1490 repayment of the mortgage loan. Therefore, if the
1491 mortgagor defaults on the mortgage loan there is a
1492 greater likelihood that a loss will be incurred
1493 upon the liquidation of the mortgaged property.
1494 Furthermore, the loss will be larger than would
1495 otherwise have been recognized in the absence of
1496 negative amortization. Certificateholders will bear
1497 these losses as described in 'Description of the
1498 Certificates -- Subordination and Allocation of
1499 Losses' in this prospectus supplement.
1500
1501 ALLOCATIONS OF NET NEGATIVE AMORTIZATION MAY For any given month in which interest due on
1502 AFFECT YOUR YIELD mortgage loans is added to the principal balance of
1503 those mortgage loans through negative amortization,
1504 the reduction in interest distributions resulting
1505 from such negative
1506
1507
1508 S-18
1509
1510
1511
1512
1513
1514
1515
1516 amortization may be offset, in part, by applying
1517 certain principal prepayments received on the
1518 mortgage loans to interest distributions on the
1519 certificates. For any distribution date, the
1520 excess, if any, of negative amortization on the
1521 mortgage loans over the principal prepayments
1522 received on the mortgage loans, or Net Negative
1523 Amortization, will be deducted from the interest
1524 payable to the certificates as described in
1525 'Description of the Certificates -- Distributions1526 of Interest' in this prospectus supplement. The Net
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1527 Negative Amortization, for any distribution date,
1528 will be allocated first to the Class X Certificates
1529 until the interest otherwise payable to the
1530 Class X Certificates is reduced to zero, and then
1531 to the other classes of certificates in the manner
1532 described in 'Description of the Certificates --
1533 Distributions of Interest' in this prospectus
1534 supplement. The amount of the reduction of accrued
1535 interest distributable to each class of
1536 certificates attributable to Net Negative
1537 Amortization will be added t
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