REMIC Tax Concerns Surrounding Foreclosures

Law360, New York (March 22, 2012, 4:58 PM EDT) -- A Real Estate Mortgage Investment Conduit (REMIC) is an entity employed to securitize loans secured by real property and that has been granted tax-favored status. In the current economic environment, due to the fact that they hold primarily commercial or residential mortgages, REMICs are commonly faced with workouts of troubled loans.

The tax rules[1] that apply to REMICs place restrictions on the activities of a REMIC and the assets a REMIC can hold without risking its tax-favored status. These rules apply to performing and nonperforming loans...
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