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 NEW YORK, Sept. 24 /PRNewswire/ -- EMC Trust 2, series 1993-L2, $104.1 million class 1 floating-rate bonds are rated "AAA" by Fitch. The $9.3 million class 2 bonds are rated "A". The series represents the first publicly rated residential mortgage-backed transaction to be secured by subperforming and nonperforming mortgage loans, including REO properties.
 The "AAA" rating reflects the loss protection provided by the 6.37 percent class 2, 8.05 percent class 3, 4.51 percent class 4 bonds and approximately 10 percent in overcollateralization. The "A" rating reflects the loss protection provided by the class 3 and 4 bonds, as well the 10 percent overcollateralization. The ratings also reflect an interest guaranty issued by Bear Stearns Mortgage Capital Corp. (BSMCC), equal to two years at the maximum interest rate payable on the bonds ($25.3 million). BSMCC's guaranty is fully backed by a letter of credit issued by Republic National Bank of New York (RNB). In addition, a $12.4 million lost notes letter of credit issued by RNB is available to cover losses incurred due to the servicer's inability to enforce or foreclose on a mortgage loan due to a missing note; and a $20.6 million RNB title letter of credit is available in the event EMC is unable to purchase an REO property that cannot be liquidated or otherwise sold at issuance due to lack of good title. The ratings also demonstrate the integrity of the financial and legal structures, as well as the master servicing capabilities of EMC Mortgage Corp. (EMC).
 The mortgage loans consist of adjustable and fixed rate, fully amortizing and balloon payment, conventional and Federal Housing Association (FHA)/Veterans Administration (VA) mortgage loans secured by first liens on primarily one- to four-family properties. However, the pool also contains a small percentage of other property types including commercial, multifamily, condominiums and co-op properties, first liens on undeveloped land and junior liens on single-family properties as well as real estate acquired upon foreclosure or otherwise as a result of default.
 A quick sale broker's price opinion (BPO) has been obtained on each secured property within the last 12 months, except with respect to mortgage properties located in California that have BPO's generally prepared on or after Jan. 1, 1993. Fitch determined the amount of "AAA" and "A" rated bonds by applying stress tests to the BPO's at the "AAA" and "A" levels, respectively. The difference between the aggregated BPOs' less liquidation expenses plus mortgage insurance, if any, (the anticipated net proceeds) and the amount of bonds issued equals the equity piece or overcollateralization, which acts as credit enhancement.
 The mortgage loans were acquired primarily from the Resolution Trust Corp. (RTC) and the Federal Deposit Insurance Corp. (FDIC). EMC is master servicer for the mortgage loans and will also repurchase any loan that becomes current and remains so for one year. This obligation is supported by EMC's parent, The Bear Stearns Cos. Inc.
 The depositor, EMC Funding Corp. Two, a wholly owned subsidiary of EMC Mortgage Corp. (a subsidiary of The Bear Stearns Cos. Inc.) deposited the mortgage loans and REO property into the trust, EMC Trust 2. The trust, a limited-purpose Delaware business trust, issued the bonds. The bonds will be treated as debt obligations of the issuer for federal income tax purposes. No election will be made to treat the issuer as a real estate mortgage investment conduit.
 -0- 9/24/93
 /CONTACT: Jill M. Guido, 212-908-0682, or Justin Ventura, 212-908-0675, both of Fitch/

CO: EMC Mortgage Corp. ST: IN: FIN SU: RTG

TS -- NY036 -- 5364 09/24/93 11:02 EDT
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Publication:PR Newswire
Date:Sep 24, 1993

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