FRANK SEAMANS

CARL CHERIN

CLOYD R.MELLOIT

GREGG KERR

RODERICK NORRIS

JOHN MORGAN

CARL BARGER

EDWARD GREENE

DONALD WINSON

ROBERT MCCARTNEY

WILLIAM MALLIN

BARTON Z.COWAN

EDWIN L.KLETT

THOMAS WRIGHT

ARTHUR WILSON JR C.KENT MAY

EDWARD OCONNOR ALFRED VADNAIS

WM ALVAH STEWART

DALE E.WILLIAMS

DALE HERSIIEY

ROBERT DOTY

GARY KOSINSKI

JOHN KENRICK

ROBERT WILLIAMS

WILLIS SIEGFRIED JR

DAVID E.TUNGATE

ROBERT M.BROWN

MICHAEL R.STABILEJR

RICHARD GLADSTONE RICHARD GOLD

RAY C.STONER

MONTGOMERY WILLIAM NUERNBERG PETER BAGGERMAN MARK A.WILLARD

JOHN UBINGERJR RICHARD FUNK

THOMAS SNYDER

HOWARD D.SCHWARTZ

ROBERT L.ALLMANll

STEVEN McGRATH

BRYAN ROSENBERGER

DENNIS L.VERALDI

MICHAEL BORASKY

DENNIS LEWIS

WILLIAM H.SCHORLING

JAMES ROBERTS

K.DOYLE GEORGE

HERBERT BOATNER JR JOHN SCHMIDT

RICHARD HALPERN

JOHN MYERS

JOHN ARTZ

WILLIAM WATSON SMITH

1871-1964

WU.LIAM ECKERT

1900-1981

ANDREW M.ROMAN

ROBERT L.BYER

JANICE BOWERS

DENNIS OBRIEN

JONATHAN HERGERT

MARGARET P.JOY GEORGE MEDVED

STUART WILLIAMS

FRED GEORGE

GEORGE E.YOKITIS

CLIFFORD PASTEL

ELLEN MERCER SCHINDLER

CARLA GREENFIELO

WILLIAM E.KELLEHERJR ANN MCCLURE

LINDA McCLELLAN

RICHARD WIEDMAN

MARK C.COULSON

RICHARD RINALDO

RICHARD DAN DREA

JOHN FORD

FREDERICK CASPAR

SARA MERCER

PATRICIA DODGE

SAMUEL M.BROCKm BLAINE LUCAS

LOUIS MORAYTIS

BRIAN LUCAS

EDWARD FLYNN

RICHARD McGONIGLE

LARRY K.ELLIOTT

CHRISTOPHER OPALINSKI

GARY R.WALKER

R.NARK SOLANO

ANN ANNASE PETER PROSS

LAURA J.WILLIAMS

McDOWELL SHARPE

STEVEN LYNCH

GARY L.KARL

MARK SCOTT

NANCY HAITLAND

JEFFREY JOHNSTON

JAMES NORRIS

JO ANN HALLER

JOSEPH A.NAPOLI

GEORGE CORNELIUS

MARK MURPHY

MARK SULLIVAN

PAUL YENERALL

MICHAEL A.MARTIN

KATHLEEN WECIITER

JAMES BOLLENBACHER

MARCIA L.GRIMES

Gentlemen

Re Nottingham Realty Securities Inc

Reference No 83210CC

By letter dated June 27 1983 request was made

that the Division take noaction position with respect

to the status of Nottingham Realty Securities Inc

Nottingham as an investment company By letter dated

July 28 1983 the Division advised that it would not

recommend that the Commission take any enforcement action

against Nottingham under the Investment Company Act of

1940 as amended the Act on the grounds that Nottingham

was excepted under Section 3c of the Act from the

definition of investment company copy of each of the

aforementioned letters is enclosed

Nottingham proposes to issue 2000000 shares of

adjustable rate cumulative preferred stock through public

offering as described in registration statement on Form

Sll Registration No 289512 filed with the Commission

on February 17 1984

EcKERT SEAMANs CHERN MELL0TT

ATTORNEYS AT LAW

600 GRANT STREET FORTY-SECOND FLOOR

PITTSBURGH PA 15219

412 566-6000

TELEx-e66172

TEL ECO PIERS

412 566-6099

412 566-5952

SPECIAL COUNSEL

SIDNEY RUFFIN

ROBERT HAZLETT

OF COUNSEL

MILTON LAMPROPLOS

LEON HICKMAN

March 1984

t..

Of

Securities

ce of Chief

and Exchange

Counsel

Ma

Comu

ement c_

Judiciary Plaza ub1i

450 Fifth Street N.W 7///c b. Washington DC 20549
Securities and Exchange Commission

Page Two

March 1984

The facts and circumstances relating to Nottinghams

operations which were described in the aforementioned letters

remain substantially unchanged at this time One modifica

tion to the method of operation has been implemented as

described below and another is proposed and forms the

basis for our further request that the Division advise us

that it will not recommend that the Commission take any

enforcement action against Nottingham if it proceeds in the

manner described herein without registering under the Act

The modifications to the facts described in the

abovereferenced letters are

First whereas it previously was expected that

Nottingham would hold whole mortgages as permissible form

of investment upon analysis it was determined that the

mechanics of obtaining suitable information with respect to

such mortgages in order to be able properly to rate the

preferred stock to be issued by Nottingham would be so

complicated and potentially costly that the concept of

holding whole mortgages was abandoned Second it previously

was expected that if Nottingham held mortgagebacked certi

ficates guaranteed by Government National Mortgage Association

GNMA Certificates Nottingham would hold only GNMA Certi

ficates constituting the entire issue of GNMA Certificates

with respect to particular pools of mortgages It now

appears that the prospects for Nottinghams future operations

and potential profitability would be enhanced if Nottingham

were permitted to invest in GNMA Certificates without regard

to the percentage of pool of mortgages represented thereby

In July 1983 the Staff stated that it would not

recommend action against an issuer which agreed to maintain

at least 65% of its assets in GNMA Certificates representing

100% of the certificates backed by particular pools of

mortgages wholepool GNMA Certificates Investors GNMA

Trust Inc July 22 1983 In Salomon Mortgage Securities

Inc November 1983 the Staff took similar noaction

position where the representation was made that the issuer

would maintain at least 55% of its assets in wholepool

GNMA Certificates

Recently in acting upon an application pursuant

to Section 6c of the Act the Commission on January 31

1984 entered an Order In the Matter of Guaranteed Mortgage

Corporation II Release No 13744 which Order in substance
Securities and Exchange Commission

Page Three

March 1984

provided that Guaranteed Mortgage Corporation II would be

free to issue its debt instruments secured directly or

indirectly by any GNMA Certificates without regard to the

percentage of the pool of mortgages represented thereby

That is to say the distinction between wholepool GNMA

Certificates and those GNMA Certificates representing less

than 100% of pool partialpool GNMA Certificates

should not be material in determining whether registration

was required under the Act.

More particularly it is our opinion that both

whole-pool GNMA Certificates and partial-pool GNMA Certi

ficates represent interests in real estate Each GNMA

Certificate represents an undivided beneficial interest in

the underlying mortgages partialpool GNMA Certificate

is for all intents and purposes tenancy in common in

the underlying mortgages with the holders of other certi

ficates backed by the pool

If at least 55% of Nottinghams assets consists

of partialpool GNMA Certificates it is our view that

Nottingham would be primarily engaged in acquiring interests

in real estate

Under the circumstances described above in our

opinion Nottingham will be person engaged primarily in

the business of purchasing or otherwise acquiring mortgages

and other liens on and interests in real estate and

accordingly since it will not issue redeemable securities

face amount certificates of the installment type or periodic

payment plan certificates Nottingham will not be an invest

ment company as defined in the 1940 Act

Based upon the foregoing we respectfully request

that the Division take noaction position with respect

to Nottinghams status as an investment company We request

an expedited response to this letter and to that end we

will be pleased to discuss this matter with the Staff at

its convenience either in person or by telephone and to

provide additional information promptly Please do not

hesitate to call me or my associate Ellen Schindler

4o

CKMml

Very truly yours

-- -rS
MAR20 1984

Our Ref No 8475CC

Nottingham Realty

RESPONSE OF ThE OFFICE OF CHIEF CJNSEL Securities Inc

DIVISION OF INVESIMENT MANAGv1ENT File No 132-3

We are unable to advise you that we would recommend noaction

to the Commission if Nottingham Realty Securities Inc proceeded to

invest in GI4A securities in the manner proposed without registering

under the Investment Company Act of 1940 or being exempted from the

provisions of that act by rule or order Arlington Investment Company

pub avail August 31 1974 But cf American Home Finance

Corporation pub avail May 11 1981 treating whole pool G4Ps as

1TKrtgages and other liens on and interests in real estate

Deputy Chief Counsel