Subprime Loan Modifications And Tax Implications

Law360, New York (January 16, 2008, 12:00 AM EST) -- The federal government took a major step in implementing its program for alleviating the subprime mortgage crisis when the Internal Revenue Service, on Dec. 26, 2007, issued Revenue Procedure 2007-72.

In its pronouncement, the IRS has said that it will not seek to disqualify a REMIC (that is, a real estate mortgage investment conduit, under Internal Revenue Code Sec. 860A et seq.) if a mortgage loan that is included in the REMIC is modified, under the conditions stated in this revenue procedure.

Also, the IRS will...
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