Brad and I posted REMIC Tax Enforcement as Financial-Market Regulator to SSRN (as well as to BePress). The article is forthcoming in the University of Pennsylvania Journal of Law and Business and it provides our extended analysis of how the organizers of purported Real Estate Mortgage Investment Conduits (REMICs) failed to abide by the requirements… Read more »
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Brad and I have posted, Dirty REMICs, Revisited (also on BePress). The abstract reads: We review the differences between two visions for the residential mortgage markets, one driven by the goal of efficiency and the other driven by the goals of efficiency and consumer protection. Both visions advocate for structural reform, but one advocates for… Read more »
Brad Borden and I have warned that an unanticipated tax consequence of the sloppy mortgage origination practices that characterized the boom is that MBS pools may fail to qualify as REMICs. This would have massively negative tax consequences for MBS investors and should trigger lawsuits against the professionals who structured these transactions. Courts deciding upstream… Read more »
Our latest, Dirt Lawyers and Dirty REMICs, is on SSRN and BEPress.
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… Read more »
In Why a Tax Crackdown Is Not Needed on Mortgage-Backed Securities, Professor Vic Fleisher argues that IRS enforcement of tax laws governing REMICs will merely complicate efforts to properly fix blame and allocate the costs of the financial crisis. Professor Fleisher relies upon poorly-defined policy reasons for his position. Nonetheless, the severity of disregard for… Read more »
In Did the IRS Cuase the Financial Crisis, Professor Brad Borden explains that competent IRS audits of REMICs would have uncovered many of the problems that led to the financial crisis. Competent audits and tax enforcement of REMICs would therefore have helped prevent the crisis.