ITEM 1 - BUSINESS
The ADVANTA Mortgage Loan Trust 1998-2, (the "Trust" or "Issuer") is a New York common law trust established as of June 1, 1998, pursuant to a Pooling and Servicing Agreement (the "Pooling and Servicing Agreement") between ADVANTA Mortgage Conduit Services, Inc. as sponsors (the "Sponsor") and ADVANTA Mortgage Corp. USA as Master Servicer (the "Master Servicer") (together, the "Companies") and Bankers Trust Company, acting thereunder not in its individual capacity but solely as trustee (the "Trustee"). The Issuer's only purpose is the issuance of $925,000,000.00 principal amount of ADVANTA Mortgage Loan Asset-Backed Certificates, Series 1998-2, Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class A-6, Class A-7, Class A-8, Class A-9, Class A-10, Class A-11, Class A-12, Class A-13, Class A-14, Class A-15, Class A-16, Class A-17, Class A-18, Class A-19, Class F-IO and Class A-IO (the "Certificates") and the subordinated residual certificates pursuant to the Pooling and Servicing Agreement. On June 22, 1998, the Sponsor sold $925,000,000.00 aggregate principal amount of mortgage loans (the "Mort- gage Loans"), to the Issuer in exchange for the Certificates, and sold the Certificates pursuant to a public offering, the underwriting of which was co-managed by Morgan Stanley Dean Witter, Lehamn Brothers and Prudential Securities Incorporated. The Mortgage Loans and the distributions thereon, along with certain insurance proceeds, certain proceeds obtained on foreclosure and any investment income earned thereon, are the only significant assets of the Issuer. The Certificates represent obligations solely of the Issuer. The Certificates were registered under a Registration Statement (file no. 333-37107) on Form S-3 declared effective on October 30, 1997.
ITEM 2
ITEM 2 - PROPERTIES
The Issuer neither owns nor leases any physical properties.
ITEM 3
ITEM 3 - LEGAL PROCEEDINGS
The Master Servicer is not aware of any material pending legal proceedings involving either the Issuer, the Trustee, the Sponsor or the Master Servicer with respect to the Certificates or the Issuer's property.
ITEM 4
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 Issuer through the solicitation of proxies or otherwise.
PART II
ITEM 5
ITEM 5 - MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED STOCK- HOLDER MATTERS
The Trust is not an issuer of common stock in a corporation, although the Certificates represent equity interest that has voting rights. The equity of the Trust consists of the beneficial or ownership interest therein for which, to the best knowledge of the Master Servicer, there is no established public trading market.
As of March 4, 1999, there were approximately 7 holders of the Class A-1 Certificates, 1 holder of the Class A-2 Certificates, 13 holders of the Class A-3 Certificates, 3 holders of the Class A-4 Certificates, 2 holders of the Class A-5 Certificates, 5 holders of the Class A-6 Certificates, 5 holders of the Class A-7 Certificates, 1 holder of the Class A-8 Certificates, 1 holder of the Class A-9 Certificates, 1 holder of the Class A-10 Certificates, 1 holder of the Class A-11 Certificates, 1 holder of the A-12 Certificates, 1 holder of the Class A-13 Certificates, 1 holder of the Class A-14 Certificates, 1 holder of the Class A-15 Certificates, 6 holders of the Class A-16 Certificates, 9 holders of the Class A-17 Certificates, 4 holders of the Class A-18 Certificates, 3 holders of the Class A-19 Certificates, 4 holders of the Class F-IO Certificates, and 1 holder of the Class A-IO Certificates. The number of holders includes individual participants in security position listings. As of December 26, 1998, 6 monthly distributions had been made to the holders of the Certificates.
ITEM 6
ITEM 6 - SELECTED FINANCIAL DATA
Not applicable.
ITEM 7
ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATION
On June 22, 1998, the Issuer issued $73,000,000.00 aggregate principal amount of Class A-1 Certificates having a pass-thru rate of 6.44%, $41,000,000.00 aggregate principal amount of Class A-2 Certificates having a pass-thru rate of 6.12% per annum, $34,000,000 aggregate principal amount of Class A-3 Certificates having a pass-thu rate of 6.19% per annum, $17,000,000 aggregate principal amount of Class A-4 Certificates having a pass-thru rate of 6.31% per annum, $24,000,000 aggregate principal amount of Class A-5 Certificates having a pass-thru rate of 6.33% per annum, $27,000,000 aggregate principal amount of Class A-6 Certificates having a pass-thru rate of 6.63% per annum, $15,000,000 aggregate principal amount of Class A-7 Certificates having a pass-thru rate of 6.15%, $9,000,000 aggregate principal amount of Class A-8 Certificates having a pass-thru rate of 6.36% per annum, $88,000,000 aggregate principal amount of Class A-9 Certificates having a pass-thru rate of 6.44%, $61,000,000 aggregate principal amount of Class A-10 Certificates having a pass-thru rate of 6.12%, $38,000,000 aggregate principal amount of Class A-11 Certificates having a pass-thru rate of 6.21% per annum, $28,000,000 aggregate principal amount of Class A-12 Certificates having a pass-thru rate of 6.33%, $28,000,000 aggregate principal amount of Class A-13 Certificates having a pass-thru rate of 6.36%, $36,000,000 aggregate principal amount of Class A-14 Certificates having a pass-thru rate of 6.65%, $31,000,000 aggregate principal amount of Class A-15 Certificates having a pass-thru rate of 6.25%, $180,000,000 aggregate principal amount of Class A-16 Certificates having a floating rate, $60,000,000 aggregate principle amount of Class A-17 having a pass-thru rate of 6.05%, $101,250,000 aggregate principle amount of Class A-18 having a floating rate, $33,750,000 aggregate principle amount of Class A-19 having a pass-thru rate of 6.05%, which are collateralized by Mortgage Loans. The sale of the Mortgage Loans to the Issuer, the issuance of the Certificates and the simultaneous delivery of the Certificates to the Companies for sale pursuant to a public offering, the underwriting of which was co-managed by Morgan Stanley Dean Wittier Lehman Brothers, Prudential Securities Incorporated has been accounted for as a sale of the Certificates. The value of the Certificates issued by the Issuer equaled the value of the Mortgage Loans conveyed to the Issuer by the Companies, plus funds held in the Prefunding Account (if any) and subsequently used to acquire additional mortgage loans. Accordingly, there was no income, expense, gain or loss resulting from the aforementioned transaction.
CAPITAL RESOURCES AND LIQUIDITY
The Issuer's primary sources of funds with respect to the Certificates will be receipts of interest on and principal of the Mortgage Loans, along with certain insurance proceeds, certain proceeds obtained on foreclosure and any investment income earned thereon. The respective management's of the Companies believe that the Issuer will have sufficient liquidity and capital resources to pay all amounts on the Certificates as they become due and all other anticipated expenses of the Issuer. The Issuer does not have, nor will it have in the future, any significant source of capital for payment of the Certificates and its operating expenses other than the receipt of interest on and principal of the mortgage loans, certain insurance proceeds and certain proceeds obtained on foreclosure and any payments made by the Certificate Insurer. The Issuer is a limited purpose trust. The Certificates represent obligations solely of the Issuer.
ITEM 8
ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Not applicable.
ITEM 9
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 Issuer and its accountants.
PART III
ITEM 10
ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The Issuer does not have any directors or officers.
ITEM 11
ITEM 11 - EXECUTIVE COMPENSATION
Not applicable.See "Item 10 - Directors and Executive Officers of the Registrant".
ITEM 12
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 the ADVANTA Mortgage Loan Certificates, Series 1998-2, Class A-1 ("Class A-1 Certificates"), Class A-2 ("Class A-2 Certificates"), Class A-3 ("Class A-3 Certificates"), Class A-4 ("Class A-4 Certificates"), Class A-5 ("Class A-5 Certificates"), Class A-6 ("Class A-6 Certificates"), Class A-7 ("Class A-7 Certificates"), Class A-8 ("Class A-8 Certificates"), Class A-9 ("Class A-9 Certificates"), Class A-10 ("Class A-10 Certificates"),Class A-11 ("Class A-11 Certificates"), Class A-12 ("Class A-12 Certificates"),Class A-13 ("Class A-13 Certificates"), Class A-14 ("Class A-14 Certificates"),Class A-15 ("Class A-15 Certificates"), Class A-16 ("Class A-16 Certificates"),Class A-17 ("Class A-17 Certificates"), Class A-18 ("Class A-18 Certificates"),Class A-19 ("Class A-19 Certificates"), Class F-IO ("Class F-IO Certificates"),Class A-IO ("Class A-IO Certificates"), (ii) the principal amount of the Class A-1 Certificates, Class A-2 Certificates, Class A-3 Certificates, Class A-4 Certificates, Class A-5 Certificates, Class A-6 Certificates, Class A-7 Certificates, Class A-8 Certificates, Class A-9 Certificates, Class A-10 Certificates, Class A-11 Certificates, Class A-12 Certificates, Class A-13 Certificates, Class A-14 Certificates, Class A-15 Certificates, Class A-16 Certificates, Class A-17 Certificates, Class A-18 Certificates, Class A-19 Certificates, Class F-IO Certificates, or Class A-IO Certificates and (iii) the percent that the principal amount of Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class A-6, Class A-7, Class A-8, Class A-9, Class A-10, Class A-11, Class A-12, Class A-13, Class A-14, Class A-15, Class A-16, Class A-17, Class A-18, Class A-19, Class F-IO or Class A-IO Certificates owned represents of the outstanding principal amount of the Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class A-6, Class A-7, Class A-8, Class A-9, Class A-10, Class A-11, Class A-12, Class A-13, Class A-14, Class A-15, Class A-16, Class A-17, Class A-18, Class A-19, Class F-IO, or Class A-IO Certificates, respectively. The information set forth in the table is based upon information obtained by the Issuer from Depository Trust Company. The Master Servicer is not aware of any Schedules 13D or 13G filed with the Securities and Exchange Commission in respect of the Certificates.
Amount Owned (All Dollar Amounts are in Thousands) Name and Address Principal Percent
Class A-1 Certificates Brown Brothers Harriman & Co. Robert Davide 63 Wall Street, 8th Floor New York, NY 10005 16.44%
Chase Manhattan Bank Orma Trim, Supervisor 4 New York Plaza, 13th Floor New York, NY 10004 58.90%
Investors Bank & Trust/MF Custody Joanne Lowe, 15th Floor 200 Clarendon Street Boston, MA 02116 8.22%
Merrill Lynch, Pierce Fenner & Smith V. O'Neill, Corp Park 287 4 Corporate Place Piscataway, NJ 08855 5.48%
State Street Bank & Trust Global Corp Action Dept JAB5W PP Box 1631 Boston, MA 02105-1631 8.22%
Class A-2 Certificates Chase Manhattan Bank Orma Trim, Supervisor 4 New York Plaza, 13th Floor New York, NY 10004 100.00%
Class A-3 Certificates Bank of America Personal Trust R. DeLaTorre, Prxy Unit # 38432 555 S. Flower Street, Level C Los Angeles, CA 90071 5.88%
Chase Manhattan Bank Orma Trim, Supervisor 4 New York Plaza, 13th Floor New York, NY 10004 9.13%
Merrill Lynch, Pierce Fenner & Smith V. O'Neill, Corp Park 287 4 Corporate Place Piscataway, NJ 08855 52.94%
State Street Bank & Trust Global Corp Action Dept JAB5W PP Box 1631 Boston, MA 02105-1631 11.16%
Class A-4 Certificates Chase Manhattan Bank Orma Trim, Supervisor 4 New York Plaza, 13th Floor New York, NY 10004 64.71%
Keybank National Association Karen Bednarski 4900 Tiedeman Road Brooklyn, OH 44144 5.88%
State Street Bank & Trust Global Corp Action Dept JAB5W PP Box 1631 Boston, MA 02105-1631 29.41%
Class A-5 Certificates Bankers Trust Company J. Lasher c/o BT Services, Tennessee 648 Grassmere Park Drive Nashville, TN 37211 58.33%
Chase Manhattan Bank Orma Trim, Supervisor 4 New York Plaza, 13th Floor New York, NY 10004 41.67%
Class A-6 Certificates Bank of New York Diana Karenbauer 925 Patterson Plank Rd Secaucus, NJ 07094 11.11%
Chase Manhattan Bank Orma Trim, Supervisor 4 New York Plaza, 13th Floor New York, NY 10004 7.41%
Citibank, NA Marta Hoosain PO Box 30576 Tampa, FL 33630-3576 51.85%
Fleet Bank of Massachusetts, NA Ms. J. Rath, Fleet Services Corp 2nd Floor NYROTO2B Rochester, NY 14638 7.41%
US Bank National Association R. Williams, MPFP 1603 Proxy Unit 601 Second Avenue South Minneapolis, MN 55402 22.22%
Class A-7 Certificates Bankers Trust Company J. Lasher c/o BT Services, Tennessee 648 Grassmere Park Drive Nashville, TN 37211 8.83%
Boston Safe Deposit & Trust C. Holloway, c/o Mellon Bank NA Three Mellon Bank Center, Rm 153-3015 Pittsburgh, PA 15259 27.83%
Northern Trust Company Jarvis A. McKee 801 S. Canal C-IN Chicago, IL 60607 59.17%
Class A-8 Certificates Bankers Trust Company J. Lasher c/o BT Services, Tennessee 648 Grassmere Park Drive Nashville, TN 37211 100.00%
Class A-9 Certificates Bankers Trust Company J. Lasher c/o BT Services, Tennessee 648 Grassmere Park Drive Nashville, TN 37211 100.00%
Class A-10 Certificates Bank of New York Diana Karenbauer 925 Patterson Plank Rd Secaucus, NJ 07094 100.00%
Class A-11 Certificates Bank of New York Diana Karenbauer 925 Patterson Plank Rd Secaucus, NJ 07094 100.00%
Class A-12 Certificates Bank of New York Diana Karenbauer 925 Patterson Plank Rd Secaucus, NJ 07094 100.00%
Class A-13 Certificates Bank of New York Diana Karenbauer 925 Patterson Plank Rd Secaucus, NJ 07094 100.00%
Class A-14 Certificates Citibank, NA Marta Hoosain PO Box 30576 Tampa, FL 33630-3576 100.00%
Class A-15 Certificates Bank of New York Diana Karenbauer 925 Patterson Plank Rd Secaucus, NJ 07094 100.00%
Class A-16 Certificates Bank of New York Diana Karenbauer 925 Patterson Plank Rd Secaucus, NJ 07094 25.00%
Boston Safe Deposit & Trust C. Holloway, c/o Mellon Bank NA Three Mellon Bank Center, Rm 153-3015 Pittsburgh, PA 15259 9.44%
Chase Manhattan Bank Orma Trim, Supervisor 4 New York Plaza, 13th Floor New York, NY 10004 19.44%
Norwest Bank Minnesota, NA John Kemper 733 Marquette Avenue Minneapolis, MN 55479-0056 27.50%
Prudential Securities, Inc Issuer Services, c/o ADP Proxy 51 Mercedes Way Edgewood, NY 11717 7.22%
Republic National Bank of NY Investment Co Anthony Pla' One Hanson Place, Lower Level Brooklyn, NY 11243 11.40%
Class A-17 Certificates Bank of New York Diana Karenbauer 925 Patterson Plank Rd Secaucus, NJ 07094 34.50%
Bankers Trust Company J. Lasher, c/o BT Services Tennessee 648 Grassmere Park Drive Nashville, TN 37211 9.17%
Bank One Trust Company, NA-State Scott Hammond 30 West Spring Street Columbus, OH 43266-0581 16.67%
Boston Safe Deposit & Trust Co C. Holloway, c/o Mellon Bank NA Three Mellon Bank Ctr, Rm 153-3015 Pittsburgh, PA 15259 10.00%
State Street Bank & Trust Co J. Callahan, Global Action Dept JAB5W PP Box 1631 Boston, MA 02105-1631 16.33%
Class A-18 Certificates Bankers Trust Company J. Lasher, c/o BT Services Tennessee 648 Grassmere Park Drive Nashville, TN 37211 24.69%
Chase Manhattan Bank Orma Trim, Supervisor 4 New York Plaza, 13th Floor New York, NY 10004 60.49%
Marine/Treasury Investments Linda Ng 140 Broadway - Level A New York, NY 10015 9.88%
Prudential Securities, Inc Issuer Services, c/o ADP Proxy 51 Mercedes Way Edgewood, NY 11717 4.94%
Class A-19 Certificates Bank of New York Diana Karenbauer 925 Patterson Plank Rd Secaucus, NJ 07094 29.63%
Chase Manhattan Bank Orma Trim, Supervisor 4 New York Plaza, 13th Floor New York, NY 10004 8.89%
Northern Trust Company Jarvis A. McKee 801 S. Canal C-IN Chicago, IL 60607 61.48%
Class F-IO Certificates Bank of New York Diana Karenbauer 925 Patterson Plank Rd Secaucus, NJ 07094 15.36%
Bankers Trust Company J. Lasher, c/o BT Services Tennessee 648 Grassmere Park Drive Nashville, TN 37211 51.32%
State Street Bank & Trust Co J. Callahan, Global Action Dept JAB5W PP Box 1631 Boston, MA 02105-1631 32.73%
Class A-IO Certificates Firstar Trust Company Ferdinand Caldwell 777 E. Wisconsin Avenue Milwaukee, WI 53202 100.00%
ITEM 13
ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None
PART IV
ITEM 14
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: As the Issuer was established as of June 1, 1998, the Master Servicer was obligated to prepare an Annual Statement to Certificateholders as to Compliance for the year ended December 31, 1998, and mail such statement to the Certificateholders on or before the last day of March, 1999 and Independent Certified Public Accountants were required to prepare an annual report pertaining to the compliance of the Master Servicer with its servicing obligations pursuant to the Pooling and Servicing Agreement on or before the last day of March, 1999. The Annual Statement to Certificate- holders as to Compliance is included herewith as Exhibit 28.1 and the Annual Independent Certified Public Accountants' Report is included herewith as Exhibit 28.2. The Statement to Certificateholders on December 26, 1998, is included herewith as Exhibit 28.3.
Exhibit No. Description
*3.1 Certificates of Incorporation of the Companies
*3.2 By-laws of the Companies
*4 Pooling and Servicing Agreement
28.1 Annual Statement to Certificateholders as to Compliance for the year ended December 31, 1998.
28.2 Annual Independent Certified Public Accountants' Report.
28.3 Report of Management on Compliance with Minimum Servicing Standards.
28.4 Statement to Certificateholders on December 26, 1998.
* Incorporated by reference to the Exhibit of the same designation filed with the Issuer's Form S-3 registration statement declared effective October 30, 1997.
(b) Reports on Form 8-K. Six reports on Form 8-K have been filed by the Issuer during the period covered by this report.
Items Reported/Financial Date of Reports on Form 8-K Statements Filed
July 27, 1998 Monthly Report for the June 1998 Monthly Period relating to the ADVANTA Mortgage Loan Asset- Backed Certificates 1998-2, Class A-1 Class A-2, Class A-3, Class A-4, Class A-5, Class A-6, Class A-7, Class A-8, Class A-9, Class A-10, Class A-11, Class A-12, Class A-13, Class A-14, Class A-15, Class A-16, Class A-17 Class A-18, Class A-19, Class F-IO and Class A-IO issued by the ADVANTA Mortgage Loan Trust 1998-2.
August 25, 1998 Monthly Report for the July 1998 Monthly Period relating to the ADVANTA Mortgage Loan Asset- Backed Certificates 1998-2, Class A-1 Class A-2, Class A-3, Class A-4, Class A-5, Class A-6, Class A-7, Class A-8, Class A-9, Class A-10, Class A-11, Class A-12, Class A-13, Class A-14, Class A-15, Class A-16, Class A-17 Class A-18, Class A-19, Class F-IO and Class A-IO issued by the ADVANTA Mortgage Loan Trust 1998-2.
September 25, 19Monthly Report for the August 1998 Monthly Period relating to the ADVANTA Mortgage Loan Asset- Backed Certificates 1998-2, Class A-1 Class A-2, Class A-3, Class A-4, Class A-5, Class A-6, Class A-7, Class A-8, Class A-9, Class A-10, Class A-11, Class A-12, Class A-13, Class A-14, Class A-15, Class A-16, Class A-17 Class A-18, Class A-19, Class F-IO and Class A-IO issued by the ADVANTA Mortgage Loan Trust 1998-2.
October 25, 1998Monthly Report for the September 1998 Monthly Period relating to the ADVANTA Mortgage Loan Asset- Backed Certificates 1998-2, Class A-1 Class A-2, Class A-3, Class A-4, Class A-5, Class A-6, Class A-7, Class A-8, Class A-9, Class A-10, Class A-11, Class A-12, Class A-13, Class A-14, Class A-15, Class A-16, Class A-17 Class A-18, Class A-19, Class F-IO and Class A-IO issued by the ADVANTA Mortgage Loan Trust 1998-2.
November 25, 199Monthly Report for the October 1998 Monthly Period relating to the ADVANTA Mortgage Loan Asset- Backed Certificates 1998-2, Class A-1 Class A-2, Class A-3, Class A-4, Class A-5, Class A-6, Class A-7, Class A-8, Class A-9, Class A-10, Class A-11, Class A-12, Class A-13, Class A-14, Class A-15, Class A-16, Class A-17 Class A-18, Class A-19, Class F-IO and Class A-IO issued by the ADVANTA Mortgage Loan Trust 1998-2.
December 28, 199Monthly Report for the November 1998 Monthly Period relating to the ADVANTA Mortgage Loan Asset- Backed Certificates 1998-2, Class A-1 Class A-2, Class A-3, Class A-4, Class A-5, Class A-6, Class A-7, Class A-8, Class A-9, Class A-10, Class A-11, Class A-12, Class A-13, Class A-14, Class A-15, Class A-16, Class A-17 Class A-18, Class A-19, Class F-IO and Class A-IO issued by the ADVANTA Mortgage Loan Trust 1998-2.
(c) See "Item 14(a) (3)-Exhibits". (d) Not applicable.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.
ADVANTA Mortgage Corp., USA, as Master Servicer and on behalf of
ADVANTA Mortgage Loan Trust 1998-2 Registrant
BY; /s/ William P. Garland William P. Garland Senior Vice President Loan Service Administration
March 31, 1999
INDEX TO EXHIBITS (Item 14(c))
Exhibit # Description
*3.1 Certificates of Incorporation of the Companies
*3.2 By-laws of the Companies.
*4 Pooling and Servicing Agreement
28.1 Annual Statement to Certificateholders as to Compliance for the year ended December 31, 1998.
28.2 Annual Independent Certified Public Account- ants' Report.
28.3 Report of Management on Compliance with Minimum Servicing Standards.
28.4 Statement to Certificateholders on December 28, 1998.
* Incorporated by reference to the Exhibit of the same designation filed with the Issuer's Form S-3 registration statement declared effective October 30, 1997.