8-K 1 a081_form-8k.txt SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ------------------------------------------- FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended Date of Report: November 12, 2003 ---------------------------------- (date of earliest event reported) WACHOVIA ASSET SECURITIZATION ISSUANCE, LLC ------------------------------------------- (Exact name of Registrant as Specified in Charter) North Carolina 333-109298 56-1967773 -------------- ---------- ---------- (State or Other (Commission (I.R.S. Employer Jurisdiction of Incorporation) File Number) Identification Number) One Wachovia Center ------------------- 301 South College Street, Suite D --------------------------------- Charlotte, North Carolina 28288 ------------------------------- (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: (704) 374-4868 -------------- Wachovia Asset Securitization, Inc. ----------------------------------- (Former Name or Former Address, if Changed Since Last Report) Items 1 through 4, Item 6, Item 8 and Item 9 are not included because they are not applicable. Item 5. Other Events --------------------- Filing of Computational Materials In connection with the proposed offering of the Wachovia Asset Securitization Issuance, LLC Asset-Backed Notes, Series 2003-HE3 (the "Notes"), Wachovia Capital Markets, as underwriter (the "Underwriter"), have prepared certain materials (the "Computational Materials") for distribution to potential investors. Although Wachovia Asset Securitization Issuance, LLC (the "Company") provided the Underwriter with certain information regarding the characteristics of the mortgage loans (the "Mortgage Loans") in the related portfolio, the Company did not participate in the preparation of the Computational Materials. For purposes of this Form 8-K, "Computational Materials" shall mean computer generated tables and/or charts displaying, with respect to the Notes, any of the following: yield; average life; duration, expected maturity; interest rate sensitivity; loss sensitivity; cash flow characteristics; background information regarding the Mortgage Loans; the proposed structure; decrement tables; or similar information (tabular or otherwise) of a statistical, mathematical, tabular or computational nature. The Computational Materials listed as Exhibits 99.1 and 99.2 hereto are filed herewith. -2- Item 7. Financial Statements, Pro Forma Financial Information and Exhibits --------------------------------------------------------------------------- (a) Not applicable. (b) Not applicable. (c) Exhibits: 99.1 Computational Materials. 99.2 Computational Materials. -3- SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. WACHOVIA ASSET SECURITIZATION ISSUANCE, LLC By: /s/ Robert Perret -------------------------- Name: Robert Perret Title: Vice President Date: November 12, 2003 EXHIBIT INDEX Exhibit No. Description of Exhibit ----------- ---------------------- 99.1 Computational Materials. 99.2 Computational Materials. Subject to Revision ------------------- Series Term Sheet Dated October 27, 2003 [GRAPHIC OMITTED][GRAPHIC OMITTED] Wachovia Asset Securitization, Inc. 2003-HE3 Trust $500,000,000 (Approximate) Wachovia Asset Securitization, Inc. Depositor [GRAPHIC OMITTED][GRAPHIC OMITTED] MBIA Insurance Corporation Credit Enhancer Wachovia Bank, National Association Seller and Servicer Wachovia Asset Securitization, Inc. Asset-Backed Notes, Series 2003-HE3 DISCLAIMER ---------- Attached is a preliminary Series Term Sheet describing the structure, collateral pool and certain aspects of the Wachovia Asset Securitization, Inc. (WASI) 2003-HE3 Trust. The Series Term Sheet has been prepared by Wachovia Capital Markets, LLC. based on collateral information provided by Wachovia Bank, National Association for informational purposes only and is subject to modification or change. The information and assumptions contained herein are preliminary and will be superseded by a prospectus supplement and by any other additional information subsequently filed with the Securities and Exchange Commission or incorporated by reference in the Registration Statement. A Registration Statement (including a base prospectus) relating to the Asset-Backed Notes has been filed with the Securities and Exchange Commission. The final Prospectus Supplement relating to the securities will be filed after the securities have been priced and all of the terms and information are finalized. This communication is not an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state. Interested persons are referred to the final Prospectus and Prospectus Supplement to which the securities relate. Any investment decision should be based only upon the information in the final Prospectus and Prospectus Supplement as of their publication dates. [GRAPHIC OMITTED][GRAPHIC OMITTED]

SUMMARY OF TERMS Title of Securities: Wachovia Asset Securitization, Inc. Asset-Backed Notes, Series 2003-HE3 Depositor: Wachovia Asset Securitization, Inc. (or a successor entity) Seller: Wachovia Bank, National Association Servicer: Wachovia Bank, National Association Credit Enhancer: MBIA Insurance Corporation ("MBIA") Lead Manager: Wachovia Capital Markets, LLC ("Wachovia Securities") Co-Manager: Credit Suisse First Boston ("CSFB") Yield Maintenance Agreement Provider: To be determined. Paying Agent: Wachovia Bank, National Association Owner Trustee: Wilmington Trust Company Indenture Trustee: U.S. Bank National Association Servicing Fee: With respect to each Payment Date, the Servicer will be entitled to a Servicing Fee equal to 1/12 of 0.50% of the aggregate principal balance of the Mortgage Loans (as defined herein), plus any reimbursable amounts. Offered Notes: The Class A Notes The Trust: The depositor will establish the Wachovia Asset Securitization, Inc. 2003-HE3 Trust (the "Trust" or the "Issuer"), a Delaware statutory trust, to issue the Offered Notes. The assets of the Trust will include the Mortgage Loans and collections on the Mortgage Loans. The Trust will also include a financial guaranty insurance policy provided by the Credit Enhancer, which will guarantee certain payments on the Offered Notes. Federal Tax Status: It is anticipated that the Offered Notes will be treated as debt instruments for federal income tax purposes. ERISA Eligibility: The Offered Notes are expected to be ERISA eligible. Prospective investors should review the Prospectus and Prospectus Supplement and consult with their professional advisors for a more detailed description of these matters prior to investing in the Offered Notes. SMMEA Treatment: The Offered Notes will not constitute "mortgage related securities" for purposes of SMMEA. Minimum Denominations: $25,000 and integral multiples of $1,000 in excess of that amount for the Class A Notes. Registration: The Offered Notes will be available in book-entry form through DTC, Clearstream, Luxembourg and the Euroclear System. Expected Pricing Date: On or about October 29, 2003. Expected Settlement Date: On or about November 19, 2003. Statistical Cut-Off Date: October 1, 2003 (the cut-off date for the final collateral pool will be November 1, 2003) Payment Date: The 25th day of each month (or if such day is not a business day, the next succeeding business day) commencing in December 2003. Scheduled Legal Final Payment Date: The Payment Date in October 2024. Collection Period: With respect to any Payment Date, the calendar month preceding the month of that Payment Date. Interest Period: The "Interest Period" with respect to the Offered Notes for a given Payment Date will be the period beginning with the previous Payment Date (or, in the case of the first Payment Date, the Settlement Date) and ending on the day prior to such Payment Date (on an actual/360 basis). Credit Enhancement: Excess interest, overcollateralization and the financial guaranty insurance policy (the "Policy"). Optional Redemption: A principal payment may be made to redeem the Offered Notes upon the exercise by the Servicer of its option to purchase the Mortgage Loans together with the assets of the Trust after the aggregate balance of the Offered Notes has been reduced to an amount less than or equal to 10% of their initial aggregate principal balance. Initial Mortgage Loans: The Mortgage Loans to be sold to the Trust will consist of adjustable rate home equity revolving lines of credit evidenced by the related credit line agreements and secured by the related mortgages or deeds of trust on residential properties. See the attached collateral descriptions for additional information on the Initial Mortgage Loans as of the Statistical Cut-Off Date. As of the Statistical Cut-Off Date, the aggregate principal balance of the mortgage loans is approximately $500,000,931.70 (the "Initial Mortgage Loans"). Amounts collected in respect of the Mortgage Loans will primarily be used to make payments on the Class A Notes. Subsequent Mortgage Loans: During the Revolving Period, the Issuer may acquire "Subsequent Mortgage Loans" (together with the Initial Mortgage Loans, the "Mortgage Loans") with funds on deposit in the Funding Account. Accordingly, the characteristics of the entire pool of Mortgage Loans upon the acquisition of the Subsequent Mortgage Loans may vary somewhat from the characteristics of the Initial Mortgage Loans as of the Statistical Cut-Off Date as presented in this Series Term Sheet. Each Subsequent Mortgage Loan will have been underwritten substantially in accordance with the underwriting criteria set forth in the Prospectus Supplement and meet other criteria described in the Prospectus Supplement, including approval by the Credit Enhancer. Additional Balances: An "Additional Balance" represents additional principal of a Mortgage Loan created by a draw on the related home equity revolving line of credit. Additional Balance Increase Amount: On any given Payment Date, equals (a) the excess, if any, of (i) the aggregate principal amount of Additional Balances from the related Collection Period and prior Collections Periods conveyed to the Trust, over (ii) principal collections and excess interest from the Funding Account and/or the custodial account applied to purchase those Additional Balances minus (b) amounts paid on prior Payment Dates to the holders of the Certificates in respect of any Additional Balance Increase Amount. Loan Rate: The Loan Rate of each Mortgage Loan is the per annum interest rate required to be paid by the mortgagor under the terms of the related credit line agreement. Each Mortgage Loan has a Loan Rate that is subject to adjustment, as specified in the related credit line agreement, to equal the sum of the index and a gross margin, provided that the Loan Rate on each Mortgage Loan does not exceed a maximum loan rate. The index for each Mortgage Loan is the "Prime Rate," regularly published in the Eastern edition of The Wall Street Journal. Net Loan Rate: The Net Loan Rate means, with respect to any Payment Date and any Mortgage Loan, the Loan Rate of that Mortgage Loan as of the first day of the calendar month in which the related Interest Period begins, net of the Servicing Fee rate. Yield Maintenance Agreement: The trust will include a Yield Maintenance Agreement between the Yield Maintenance Agreement Provider and the Indenture Trustee on behalf of the holders of the Offered Notes. On each Payment Date through and including the Payment Date in August 2008, to the extent available, funds will be distributed to the Offered Notes to cover any interest shortfall that was not covered by excess interest and to cover certain amounts owed to the Offered Notes from the current Payment Date as well as prior Payment Dates as a result of limitations on the Note Rate. Net WAC Rate: The Net WAC Rate means for each Payment Date, a fraction expressed as a per annum rate, the numerator of which is the sum of (i) the interest due on the Mortgage Loans, less the sum of (a) the servicing fee rate on the Mortgage Loans, (b) the premium rate on the Policy (as adjusted on the basis of the actual number of days in the related Interest Period and a 360-day year) and (c) the pro rata portion of interest attributable to Additional Balances represented by any Additional Balance Increase Amount and (ii) payments required to be made under the Yield Maintenance Agreement, if any, and the denominator of which is the aggregate outstanding balance of the Offered Notes (as adjusted on the basis of the actual number of days in the related Interest Period and a 360-day year). Class A Margin: The Class A Margin will be determined on the Pricing Date. Class A Note Rate: With respect to each Interest Period, the lesser of (a) One Month LIBOR plus the Class A Margin and (b) the Net WAC Rate. Servicer Advances: The Servicer, at its option and in its sole discretion, may make advances by depositing into the custodial account amounts representing installments of principal and/or interest on any Mortgage Loan that is delinquent as of the end of the related Collection Period if the Servicer believes that the advances will be recoverable from payments on, or other proceeds of, that Mortgage Loan. If the Servicer makes any optional advances of delinquent principal or interest, the Servicer shall be entitled to reimburse itself from collections on the related Mortgage Loans or, if those amounts are not sufficient, by withdrawing those amounts from the custodial account prior to any distribution of amounts on deposit therein to the Offered Notes. Funding Account: On the Settlement Date, a Funding Account will be established for the benefit of the holders of the Offered Notes (the "Funding Account"). The Servicer will deposit Principal Collections from the Mortgage Loans (on the business day prior to each Payment Date during the Revolving Period, to the extent not used to purchase Additional Balances and/or Subsequent Mortgage Loans, or to pay amounts in respect of any Additional Balance Increase Amount) and excess spread (beginning on the Payment Date in March 2004 and continuing on each Payment Date thereafter during the Revolving Period, to the extent not used to reimburse the Credit Enhancer, up to the amount necessary to increase the Overcollateralization Amount to the Overcollateralization Target Amount) into the Funding Account, and will apply those amounts to purchase Additional Balances arising under the Mortgage Loans already included in the Trust on future Payment Dates and/or to purchase Subsequent Mortgage Loans, to the extent available. On the Payment Date immediately succeeding the date on which the Revolving Period ends, in the event that any amounts remain on deposit in the Funding Account after giving effect to the purchase by the Issuer of Additional Balances and/or Subsequent Mortgage Loans, including any purchased on the date on which the Revolving Period ends, and payments to the holders of the Certificates in respect of any Additional Balance Increase Amount, those amounts will be paid to the holders of the Offered Notes as principal. Interest Collections: Interest Collections means, with respect to any Payment Date, an amount equal to the sum of (a) the amounts collected with respect to the Mortgage Loans during the related Collection Period, including the interest portion of Net Liquidation Proceeds, applied to interest pursuant to the terms of the related credit line agreements, exclusive of the Interest Collections allocable to the Excluded Amount, reduced by the Servicing Fees for that Collection Period, plus amounts in respect of any optional advance made by the Servicer pursuant to the terms of the servicing agreement and (b) the interest portion of (i) the repurchase price for any deleted Mortgage Loans; and (ii) the cash purchase price paid in connection with any optional purchase of the Mortgage Loans by the Servicer. Principal Collections: Principal Collections means, with respect to any Payment Date, an amount equal to the sum of: (a) the amount collected during the Collection Period relative to any Mortgage Loans, including the principal portion of net liquidation proceeds, applied to principal pursuant to the terms of the related credit line agreements, exclusive of the Principal Collections allocable to the Excluded Amount; and (b) the principal portion of (i) the repurchase price for any deleted Mortgage Loans, (ii) any amounts required to be deposited in the custodial account by the Seller pursuant to the purchase agreement and (iii) the cash purchase price paid in connection with any optional purchase of the Mortgage Loans by the Servicer. Net Principal Collections: With respect to any Payment Date, the excess, if any, of Principal Collections for that Payment Date over the aggregate amount of Additional Balances created during the related Collection Period and Subsequent Mortgage Loans purchased during the related Collection Period, if any, and conveyed to the Issuer and paid for with amounts on deposit in the Custodial Account. Excluded Amount: Any draws made by an obligor under any Mortgage Loan during the Rapid Amortization Period ("Excluded Draws") shall not be transferred to the Issuer. With respect to any Payment Date during the Rapid Amortization Period, the "Excluded Amount" shall equal (i) the portion of the Principal Collections for each Collection Period allocated to such Excluded Draw (Principal Collections are to be applied first to the total balance conveyed to the Trust with respect to such Mortgage Loan and then to the Additional Balances on such Mortgage Loan retained by the Seller) and (ii) the pro rata portion (based on the relative principal amounts held by the Trust and by the Seller) of Interest Collections allocable to such Excluded Draw, provided that the Excluded Amount with respect to any Liquidation Loss Amount shall be the pro rata portion (based on the relative principal amounts held by the Trust and by the Seller) of losses on the related Mortgage Loans during the related Collection Period attributable to Additional Balances not conveyed to the Trust; provided further that, to the extent the related credit line agreement or applicable law provides for a different allocation, such other allocation shall control. Principal Distribution Amount: With respect to any Payment Date (a) during the Managed Amortization Period, Net Principal Collections less (i) amounts paid to the holders of the Certificates with respect to any Additional Balance Increase Amount and (ii) any Overcollateralization Release Amounts and (b) during the Rapid Amortization Period, Principal Collections. Stepdown Date: The later of (a) the thirty-first (31st) Payment Date or (b) the Payment Date on which the current aggregate note balance of the Offered Notes is less than or equal to 50% of the note balance of the Offered Notes as of the Settlement Date. Overcollateralization Amount: With respect to any Payment Date, the amount, if any, by which the sum of (a) the outstanding aggregate principal balance of the Mortgage Loans (exclusive of the portion relating to any Excluded Amount) and (b) the amount in the Funding Account, in each case as of the close of business on the last day of the related Collection Period, exceeds the balance of the Offered Notes. Overcollateralization Release Amount: With respect to any Distribution Date on or after the Stepdown Date provided that (a) the Stepdown Delinquency Test and (b) the Stepdown Cumulative Loss Test have been met, the lesser of (x) the Net Principal Collections for such Distribution Date and (y) the excess, if any, of (i) the Overcollateralization Amount for such Distribution Date, assuming that 100% of the Net Principal Collections is applied as a principal payment on the Offered Notes on such Distribution Date, over (ii) the Overcollateralization Target Amount for such Distribution Date. With respect to any Distribution Date on which (a) the Stepdown Delinquency Test and (b) the Stepdown Cumulative Loss Test have not been met, the Overcollateralization Release Amount will be zero. Overcollateralization Target Amount: With respect to any Payment Date on or after the March 2004 Payment Date and prior to the Stepdown Date, an amount equal to the sum of (i) 1.00% of the note balance of the Offered Notes as of the Settlement Date; and (ii) 100% of the principal balances of all the Mortgage Loans that are 180 days or more contractually delinquent as of the last day of the related Collection Period (including Mortgage Loans that are in foreclosure or are REO loans). With respect to any Payment Date on or after the Stepdown Date, provided that (a) the Stepdown Delinquency Test and (b) the Stepdown Cumulative Loss Test have each been met, the Overcollateralization Target Amount shall equal the sum of 2.00% of the note balance of the Offered Notes on such Payment Date. On or after the Stepdown Date, provided that (a) the Stepdown Delinquency Test or (b) the Stepdown Cumulative Loss Test have not been met, the Overcollateralization Target Amount shall be equal to the Overcollateralization Target Amount on the prior Payment Date and will remain equal to that Overcollateralization Target Amount until (a) the Stepdown Delinquency Test and (b) the Stepdown Cumulative Loss Test have each been met; provided, however, that in no event shall the Overcollateralization Target Amount be less than the greater of (i) 0.50% of the note balance of the Offered Notes as of the Closing Date and (ii) the sum of the three largest outstanding Mortgage Loans (by principal balance as of such Payment Date). Stepdown Delinquency Test: With respect to any date of determination, a test that is met if the six-month rolling average sixty-day delinquency rate (including foreclosures and REO properties) on the Mortgage Loans (exclusive of the pro rata portion relating to any Excluded Amount) as of such date of determination is less than 3.50%. Stepdown Cumulative Loss Test: With respect to any date of determination, a test that is met if the percentage of the cumulative losses on the Mortgage Loans (exclusive of the pro rata portion thereof relating to any Excluded Amount) as of such date of determination is less than the applicable percentage listed in the chart below of the principal balances of the Mortgage Loans as of the Settlement Date: Months Percentage ------ ---------- 31 - 48 1.50% 49 - 60 2.00% 61+ 2.50% Revolving Period: The Revolving Period will be the period beginning on the Settlement Date and ending on the earlier of (a) the end of business on November 30, 2004, (b) the Payment Date on which the Funding Account balance exceeds $20,000,000 (which is approximately four times the Overcollateralization Target Amount) or (c) the occurrence of a rapid amortization event as specified in the Indenture. Managed Amortization Period: The Managed Amortization Period will be the period beginning on the first day following the end of the Revolving Period, unless a rapid amortization event has occurred as specified in the Indenture. The Managed Amortization Period will end on the earlier of (a) November 30, 2006 and (b) the occurrence of a rapid amortization event as specified in the Indenture. Rapid Amortization Period: The Rapid Amortization Period will be the period beginning on the first day following the end of the Managed Amortization Period, unless a rapid amortization event has occurred as specified in the Indenture. Priority of Distributions: On each Payment Date, from amounts withdrawn from the custodial account with respect to the Mortgage Loans (including any draw on the Policy and any amounts required to be paid under the Yield Maintenance Agreement), the following payments will be made in the following order of priority: During the Revolving Period: o first, from Interest Collections (exclusive of the pro rata portion of interest attributable to Additional Balances represented by any Additional Balance Increase Amount), the amount of the premium for the Policy to the Credit Enhancer, and any unpaid premium with interest thereon, as provided in the Insurance Agreement; o second, from any remaining Interest Collections (exclusive of the pro rata portion of interest attributable to Additional Balances represented by any Additional Balance Increase Amount) and payments received under the Yield Maintenance Agreement, to the Note Payment Account, for payment to the holders of the Offered Notes, interest for the related Interest Period at the Note Rate on the balance of the Offered Notes immediately prior to that Payment Date, other than any interest shortfalls and reduced by any Relief Act Shortfalls during the related Collection Period, and from that pro rata portion of interest attributable to Additional Balances represented by any Additional Balance Increase Amount, to pay to the holders of the Certificates, interest on the Additional Balance Increase Amount; o third, from Net Principal Collections, to the Distribution Account, for distribution to the holders of the Certificates, an amount equal to the Additional Balance Increase Amount; o fourth, remaining Net Principal Collections to the Funding Account; o fifth, from any remaining amounts, to the Credit Enhancer, to reimburse it for prior draws made on the Policy, with interest thereon, as provided in the Insurance Agreement; o sixth, on and after the Payment Date in March 2004, from excess spread, to the Funding Account, the amount necessary so that the Overcollateralization Amount is not less than the Overcollateralization Target Amount; o seventh, from any remaining excess spread, to the Distribution Account, for distribution to the holders of the Certificates, an amount equal to the Additional Balance Increase Amount; o eighth, from any remaining amounts, to the Credit Enhancer, any other amounts owed the Credit Enhancer pursuant to the Insurance Agreement; o ninth, from any remaining excess spread, to the Note Payment Account, for payment to the holders of the Offered Notes, any interest shortfalls on the Offered Notes for such Payment Date and for any Payment Date not previously paid, together with interest thereon at the Note Rate; o tenth, from any remaining amounts, to the Indenture Trustee, any Trustee's additional expenses and any other amounts owing to the Indenture Trustee, in each case to the extent remaining unpaid; and o eleventh, any remaining amounts, to the distribution account, for distribution to the holders of the Certificates. During the Managed Amortization Period: o first, from Interest Collections (exclusive of the pro rata portion of interest attributable to Additional Balances represented by any Additional Balance Increase Amount), the amount of the premium for the Policy to the Credit Enhancer, and any unpaid premium with interest thereon, as provided in the Insurance Agreement; o second, from any remaining Interest Collections (exclusive of the pro rata portion of interest attributable to Additional Balances represented by any Additional Balance Increase Amount) and payments received under the Yield Maintenance Agreement, to the Note Payment Account, for payment to the holders of the Offered Notes, interest for the related Interest Period at the Note Rate on the balance of the Offered Notes immediately prior to that Payment Date, other than any interest shortfalls and reduced by any Relief Act Shortfalls during the related Collection Period, and from that pro rata portion of interest attributable to Additional Balances represented by any Additional Balance Increase Amount, to pay to the holders of the Certificates, interest on the Additional Balance Increase Amount; o third, from Net Principal Collections, to the Distribution Account, for distribution to the holders of the Certificates, an amount equal to the Additional Balance Increase Amount; o fourth, from any remaining amounts, to the Note Payment Account, the Principal Distribution Amount for payment to the holders of the Class A Notes, until the note balance thereof has been reduced to zero; o fifth, from any remaining amounts, to the Credit Enhancer, to reimburse it for prior draws made on the Policy, with interest thereon, as provided in the Insurance Agreement; o sixth, on or after the payment date in March 2004, from excess spread, to the Note Payment Account, the amount necessary to be applied on that Payment Date for payment as principal to the holders of the Offered Notes, so that the Overcollateralization Amount is not less than the Overcollateralization Target Amount; o seventh, from any remaining excess spread, to the Distribution Account, for distribution to the holders of the Certificates, an amount equal to the Additional Balance Increase Amount; o eighth, from any remaining amounts, to the Credit Enhancer, any other amounts owed the Credit Enhancer pursuant to the Insurance Agreement; o ninth, from any remaining excess spread, to the Note Payment Account, for payment to the holders of the Offered Notes, any interest shortfalls on the Offered Notes for such Payment Date and for any Payment Date not previously paid, together with interest thereon at the Note Rate; o tenth, from any remaining amounts, to the Indenture Trustee, any Trustee's additional expenses and any other amounts owing to the Indenture Trustee, in each case to the extent remaining unpaid; and o eleventh, any remaining amounts, to the Distribution Account, for distribution to the holders of the Certificates. During the Rapid Amortization Period: o first, from Interest Collections (exclusive of the pro rata portion of interest attributable to Additional Balances represented by any Additional Balance Increase Amount), the amount of the premium for the Policy to the Credit Enhancer, and any unpaid premium with interest thereon, as provided in the Insurance Agreement; o second, from any remaining Interest Collections (exclusive of the pro rata portion of interest attributable to Additional Balances represented by any related Additional Balance Increase Amount) and payments received under the Yield Maintenance Agreement, to the Note Payment Account, for payment to the holders of the Offered Notes, interest for the related Interest Period at the Note Rate on the balance of the Offered Notes immediately prior to that Payment Date, other than any interest shortfalls and reduced by any Relief Act Shortfalls during the related Collection Period, and from that pro rata portion of interest attributable to Additional Balances represented by any Additional Balance Increase Amount, to pay to the holders of the Certificates, interest on the Additional Balance Increase Amount; o third, from any remaining amounts, to the Note Payment Account, the Principal Distribution Amount for payment to the holders of the Class A Notes, until the note balance of the Class A Notes has been reduced to zero; o fourth, from Principal Collections, to the Distribution Account, for distribution to the holders of the Certificates, an amount equal to the Additional Balance Increase Amount; o fifth, from any remaining amounts, to the Credit Enhancer, to reimburse it for prior draws made on the Policy, with interest thereon, as provided in the Insurance Agreement; o sixth, on or after the payment date in March 2004, from excess spread, to the Note Payment Account, the amount necessary to be applied on that Payment Date for payment as principal to the holders of the Offered Notes, so that the Overcollateralization Amount is not less than the Overcollateralization Target Amount; o seventh, from any remaining excess spread, to the Distribution Account, for distribution to the holders of the Certificates, an amount equal to the Additional Balance Increase Amount; o eighth, from any remaining amounts, to the Credit Enhancer, any other amounts owed the Credit Enhancer pursuant to the Insurance Agreement; o ninth, from any remaining excess spread, to the Note Payment Account, for payment to the holders of the Offered Notes, any interest shortfalls on the Offered Notes for such Payment Date and for any Payment Date not previously paid, together with interest thereon at the Note Rate; o tenth, from any remaining amounts, to the Indenture Trustee, any Trustee's additional expenses and any other amounts owing to the Indenture Trustee, in each case to the extent remaining unpaid; and o eleventh, any remaining amounts, to the Distribution Account, for distribution to the holders of the Certificates. DESCRIPTION OF THE INITIAL MORTGAGE LOANS As of the Statistical Cut-Off Date

WASI Deals CPR and Draw Rates per the Servicer Reports

WASI 2003-HE3 WAL Table with 10% and 20 Draw Rate

WACHOVIA ASSET SECURITIZATION IISSUANCE LLC 8-K