Gee, What Took You So Long? (REMICs w/o Notes)

The Market Ticker – Gee, What Took You So Long? (REMICs w/o Notes)

Wow, you’re so on-the-ball that it only took you five years to start raising hell beyond when multiple people, myself included, began to howl about exactly this point?

Investors in mortgage-backed securities, built on the shoulders of the tax-advantaged Real Estate Mortgage Investment Conduit (“REMIC”), may be facing extraordinary tax losses because of how bankers and lawyers structured these securities.  This calamity is compounded by the fact that those professional advisers should have known that the REMICs they created were flawed from the start.  If these losses are realized, those professionals will face suits for damages so large that they could put them out of business.  That is, unless the Wall Street Rule is applied.

No kidding?

From 2010-10-03 on The Ticker, which re-hashed a theme I’ve been pounding on since 2007:

See, there’s this little problem.  A REMIC (Real Estate Mortgage Investment Conduit, or “MBS”) is a special thing under IRS rules.  Normally a business would have to operate at a profit or loss, pay taxes, and then pay dividends.  This results in double-taxation.

A REMIC has a special status under the IRS code which avoids this; the interest flows through to the investor without being separately taxed at the business-level of the REMIC itself.

But in exchange for this, there are constraints.  One of them is that a REMIC cannot acquire “distressed” assets – that is, notes that have defaulted.  It cannot, in other words, engage (intentionally, up front) in what would be considered “recovery operations” if you will.

The reason for this is that if it could, every “distressed asset” acquirer would set up such a structure and avoid monstrous amounts of tax.  So, as to avoid this problem, a REMIC can acquire only loans that are current.

And of course if there are no notes that are transferred this explains many things.

Like robosigned documents.

Like “lost document” affidavits (it explains notes being intentionally lost, since they can’t be transferred to their correct place late, as the time window has long expired to meet legal requirements.)

Like allonges that magically appear on a document years later (and which are barred under the UCC because otherwise fraud becomes trivial to commit.)

Because REMICs did not file the correct returns and may have committed fraud, the statute of limitations for earlier years will remain open indefinitely, giving the IRS adequate time to pursue REMIC litigation after it obtains the information it needs.If the IRS does not take action at the appropriate time, however, it will be a serious failure and will result in the loss of billions of dollars of tax revenue for the federal government.

More troubling still is the IRS’s failure to address the wide-scale abuse and problems that existed during the years leading up to the financial meltdown.  The IRS’s failure to adequately police REMICs is one more reason that the mortgage industry was able to overly inflate the housing market.  And that, inexorably, led to the crash and our tepid recovery from it.

More generally, by overlooking the serious defects in the transactions, courts and governmental agencies encourage the type of behavior that led to the financial crisis.  Lawmakers, law enforcement agencies and the judiciary cede their governing functions to private industry if they allow players to disregard the law and stride to create law through their own practices.

And until We The People demand through political process that this crap stop and if necessary form a new political party to do so, trampling the existing parties who refuse, you will continue to get screwed and both you and your children will be serially robbed and financially abused by these latter-day robber barons.

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4closureFraud.org

Comments
4 Responses to “Gee, What Took You So Long? (REMICs w/o Notes)”
  1. stripes says:

    The problem is they are not following the Rule of Law…U.S., State, Federal or Common Law. The judges are operating on a legal theory based on freedom of contract that is a qualified right and not an absolute right. Even under Admirality Jurisdiction, there is no such thing as an invalid contract that can be enforced for anything of value or equity. Comity is not rule of law, and is in fact, an infringement upon all of the Legal and Constitutional rights of the Defendant’s to Liberty and Property as Natural Born U.S. Citizens. The Civil Courts are ruled under State, Federal, U.S. and Common Law, not by Legal theories such as Corpus Juris Secundum, which based on legal theory and not Legal fact. A State Statute is only valid until proven otherwise.

  2. charley rice says:

    It’s time to for the people to throw out ALL of their prima facie man made laws to steal ALL THE PEOPLE PROPERTY based on this FRAUD, they tried to sweep under the rug.

    WE THE PEOPLE DON’T NEED the conspirators, nor their courts, government, banks, county recorders, police, sheriffs, robo signers, 3rd party bailout banks and etc.

    THE PEOPLE HAVE A RIGHT TO COME TOGETHER CAN and RECLAIM their HOMES.

    NOT TO BE PUNKED by ALL the fraud they committed upon the PEOPLE.

    IT’s time for this SLAVERY SYSTEM TO BE TORN DOWN, and RESTRUCTURED FOR THE FREE PEOPLE OF THE WORLD, and not FOR CORPORATE GOVERNMENT.

    LET CORPORATE GOVERNMENT PAY OFF THEIR OWN DEBT and stop CONING the AMERICAN PEOPLE…

    ALL DEBTS WERE PAID BY under HJR 192

    This system of debt was created to brainwash the people from the TRUTH.

  3. stripes says:

    How about this law..18 U.S.C. 513 Securities of the States and private entities…..(a.) Whoever makes, utters or possesses a counterfeited security of an organization, or whoever makes, utters or possesses a forged security of an organization, with intent to deceive another person, organization, or government shall be fined under this title or imprisoned for not more than 10 years or both. “The intent to damage or defraud will be presumed when the forged instrument is entered.” (People v Adams, 1921 132 N.E. 765, 300 Ill)

  4. These things have been going on a lot longer than 2007 close as I can tell and became invloved in was 1997.Not alot of people involved then because nobody believed anything you told them back then but it was happening anyway.Wake up people this has been taking place for a long time .Shut the government down and the banks let the chips fall where they may or may not and start over again.Not a popular outlook but needs to be done at all costs.The good of many outweigh the good of a few.Let’s take back our once great nation and make it great once again for all of us.Present and past regimes have benefited none of us.

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