Exhibit 99.16
KPMG Peat Marwick LLP
1600 Market Street
Philadelphia, PA  19103-7212

                         Independent Accountants' Report

The Board of Directors
GE Capital Mortgage Services, Inc.

We have examined  management's  assertion  about GE Capital  Mortgage  Services,
Inc.'s  (the  Company's)   compliance  with  the  minimum  servicing   standards
identified  in the Mortgage  Bankers  Association  of America's  Uniform  Single
Attestation  Program  for  Mortgage  Bankers  (USAP) for master  serviced  loans
(including  those  serviced  by the  Company  pursuant  to various  pooling  and
servicing  agreements  relating to the Company's publicly rated  mortgage-backed
securities  program) as of and for the year ended  December 31, 1997 included in
the  accompanying  management  assertion.  In as much as the  Company  does  not
service  certain of the loans  underlying  the master  servicing  directly,  our
procedures  relative to minimum servicing  standards I.4., II.1.,  II.2., II.3.,
II.4., III.2.,  III.3., III.4., III.6., V.1., V.2., V.3., V.4. and VI.1., of the
USAP, with respect to those loans not serviced,  involved  obtaining and reading
the most  recently  available  reports from the primary  servicers'  independent
auditors. Our opinion as expressed herein, insofar as it relates to such minimum
standards performed by such primary servicers,  is based solely upon the reports
of the  respective  independent  auditors.  Management  is  responsible  for the
Company's compliance with those minimum servicing standards.  Our responsibility
is  to  express  an  opinion  on  management's  assertion  about  the  Company's
compliance based on our examination.

Our  examination  was  made in  accordance  with  standards  established  by the
American  Institute of Certified Public Accountants and,  accordingly,  included
examining,  on a test basis,  evidence about the Company's  compliance  with the
minimum  servicing   standards  and  performing  such  other  procedures  as  we
considered  necessary  in the  circumstances.  We believe  that our  examination
provides a reasonable basis for our opinion.  Our examination does not provide a
legal  determination  on the  Company's  compliance  with the minimum  servicing
standards.

In our opinion,  except for the material  noncompliance  with minimum  servicing
standard  III.5.,  and with various  minimum  servicing  standards  noted in our
reading of other independent auditors' reports as discussed above,  management's
assertion that the Company complied with the  aforementioned  minimum  servicing
standards as of and for the year ended  December 31, 1997 is fairly  stated,  in
all material respects.

As discussed in management's  assertion,  the material noncompliance occurred at
the Company and at the master servicer's primary servicers during the year ended
December 31, 1997. With respect to minimum servicing  standard III.5, for one of
10 investor reports tested,  the remittance on the Company's investor report did
not agree to the remittance  shown on the related  custodial bank statement.  In
addition,  several  reports  obtained  from the primary  servicers'  independent
auditors contained exceptions, which in their opinion, the USAP required them to
report, which we list on the attached Schedule of Findings.

These conditions were considered in determining the nature,  timing,  and extent
of  audit  tests  applied  in our  audit  of  the  1997  consolidated  financial
statements, and this report does not affect our report dated January 23, 1998 on
those consolidated financial statements.


                                                     /s/ KPMG Peat Marwick LLP

February 17, 1998


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                 Schedule of Findings - Primary Servicers' USAP

The following  summarizes  the findings  from the 135 reports  obtained from the
primary  servicers'  independent  auditors which disclosed  exceptions or errors
based on an  independent  review of the primary  servicers'  mortgage  servicing
operations in accordance with the Uniform Single Attestation  Program (USAP) for
Mortgage Bankers.

Instances of exceptions  with respect to:
     Custodial  Bank Accounts - 10 primary servicers
     Mortgage Payments - one primary servicer
     Disbursements - three primary  servicers
     Mortgagor  Loan  Accounting - three primary  servicers
     Investor  Accounting - one primary  servicer
     Delinquencies  - six primary servicers
     Insurance Policies - one primary servicer

     Where the Company is primary servicer, a separate report was issued on the
     review of the Company's  mortgage  servicing  operations in accordance with
     the Uniform Single  Attestation  Program (USAP) for Mortgage Bankers and is
     dated February 17, 1998.



<PAGE>



GE Capital Mortgage Services, Inc.
A unit of GE Capital Mortgage Corporation
Three Executive Campus
Cherry Hill, NJ  08002
(609) 661-6100, 800-257-7818


Except for non-compliance with minimum servicing standard III.5 described below,
as of and for the year ended  December 31, 1997, GE Capital  Mortgage  Services,
Inc.  (the  Company)  has  complied in all  material  respects  with the minimum
servicing  standards  for master  servicers  set forth in the  Mortgage  Bankers
Association of America's Uniform Single Attestation Program for Mortgage Bankers
(USAP). With respect to minimum servicing standards I.4, II.1, II.2, II.3, II.4,
III.2, III.3, III.4, III.6, V.1, V.2, V.3, V.4 and VI.1 of the USAP, the Company
relies on the performance of its primary servicers.  The Company had in effect a
fidelity bond and errors and omissions  policy in the amount of $120 million and
$20 million, respectively.

With  respect to  minimum  servicing  standard  III.5,  for one of ten  investor
reports tested, the remittance on the Company's investor report did not agree to
the  remittance  shown on the  related  custodial  bank  statement.  The Company
investigated  the  discrepancy  and  reconciled  its servicing  records with the
investor's  records  and  the  related  custodial  bank  account  statement.  In
addition,  in order to avoid the  reoccurrence of this finding,  the Company has
implemented  policies and procedures which will confirm,  on a monthly basis, an
investor's receipt of all required fund transfers.

With  respect to the  Schedule  of Findings  related to the  primary  servicers'
USAP's,  where the Company acts as master servicer,  the Company responds in the
following manner:

1.  Custodial  Bank  Accounts:  Of the ten primary  servicers  with bank account
reconciliation  findings,  nine  primary  servicers  have  taken  the  necessary
corrective  action within the same fiscal year and therefore should avoid future
findings.  The remaining primary servicer was responsible for servicing one loan
on behalf of the Company which has since paid off. Each of the primary servicers
provided written  verification  that the bank accounts  involved did not include
accounts maintained for the Company.

2. Mortgage  Payments:  The one primary servicer with a mortgage payment finding
is no longer servicing loans for the Company.

3.  Disbursements:  Of  the  three  primary  servicers  with  the  miscellaneous
disbursement findings, one primary servicer is no longer servicing loans for the
Company,  one primary  servicer with check safeguard  findings and the remaining
primary servicer with tax and insurance disbursement  verification findings have
taken  the  necessary  corrective  action  and  therefore  should  avoid  future
findings.  Each of the primary  servicers that continue to service loans for the
Company provided written  verification that these findings did not involve loans
serviced for the Company.

4.  Mortgage  Loan  Accounting:  Of the three  primary  servicers  with mortgage
accounting  related findings,  one primary servicer is no longer servicing loans
for the Company,  one primary  servicer with interest on escrow findings and the
remaining  primary  servicer  with  escrow  analysis  findings  have  taken  the
necessary corrective action and therefore should avoid future findings.  Each of
the primary  servicers  that continue to service loans for the Company  provided
written  verification that these findings did not involve loans serviced for the
Company.

5. Investor  Accounting:  The one primary  servicer with an investor  accounting
finding is no longer servicing loans for the Company.

6.  Delinquencies:  Of  the  six  primary  servicers  with  delinquency  related
findings,  all have taken the necessary  corrective  action and therefore should
avoid  future  findings.   Each  of  the  primary  servicers   provided  written
verification that the findings did not involve loans serviced for the Company.

<PAGE>

7.  Insurance  Policy:  The one primary  servicer  with the mortgage  impairment
policy finding has taken the necessary  corrective  action and therefore  should
avoid future findings.  Such primary servicer has provided written  verification
that the finding did not involve loans serviced for the Company.


The Company  follows the following  procedures  in  connection  with the primary
servicers who had exceptions reported in their USAP's:

1. Investigate the USAP findings and obtain written  verification that the loans
serviced  for the Company are not affected by the  findings.  In the event it is
determined that such loans are so affected, the Company would pursue ways to put
corrective action plans and procedures in place.

2. Perform  annual due  diligence  reviews to validate  such  primary  servicers
continued  compliance  with the servicing  requirements  stated in the Company's
Seller's/Servicer's Guide.

3. Perform  monthly  primary  servicer  reviews of compliance with reporting and
remittance requirements.

4. In the event of continued  non-compliance  with  corrective  action plans and
procedures, seek termination of servicing rights, with cause.




/s/ Glen Messina
----------------------------------
Glen Messina
Vice President, Treasurer and Chief Financial Officer
GE Capital Mortgage Services, Inc.