Brooklyn Law School Paper | Once a Failed REMIC, Never a REMIC

Once a Failed REMIC, Never a REMIC

Abstract:

This article analyses how courts may reach results that undercut arguments that REMICs were the owners of the mortgage notes and mortgages for tax purposes. And even if the majority of states rule in favor of REMICs, the few that do not can destroy the REMIC classification of many mortgage-back securities that were structured to be — and promoted to investors as — REMICs. This is because rating agencies require that REMICs be geographically diversified in order to spread the risk of defaults caused by local economic conditions, REMICs hold notes and mortgages from multiple jurisdictions. Most, if not all, REMICs own mortgages notes and mortgages from states governed by laws that the courts determine do not support REMIC eligibility for the mortgages from those jurisdictions. This diversification requirement makes it very likely that REMICs will have more than a de minimis amount of mortgages notes that do not come within the definition of qualified mortgage under the REMIC regulations. Professionals who helped structure these securitizations may face liability if the IRS were to find that a purported REMIC was just purported and not a REMIC.

Full paper below…

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4closureFraud.org

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Once a Failed REMIC, Never a REMIC

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Comments
3 Responses to “Brooklyn Law School Paper | Once a Failed REMIC, Never a REMIC”
  1. David Charles says:

    Aint that the truth.Its a wacky world we are living in,when will we all wake from this sick nightmare?

  2. Danelle Hills says:

    Which makes NO sense to me – why would the IRS NOT be pursuing those big bucks?

  3. allisun says:

    Except for the reality that the IRS knows full well the REMICS were never “vested” into the trusts, and that billions are owed in taxes and penalties…and guess what? The IRS has as much interest in pursuing the banks for this money as your Congress has in halting fraudclosure!

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