Internal Revenue Service Publication 938 – REMICs Reporting Information
By Daniel Edstrom
DTC Systems, Inc.
Publication 938 contains a directory listing of REMICs and CDOs. It contains newly created REMICs and CDOs as well as amended listings to existing REMICs and CDOs. Interestingly the IRS did not publish this publication for 2008. Why is this interesting? It is the peak of the meltdown with the failure of Bear Stearns and Lehman Brothers. Why is the IRS keeping this information a secret? I have heard many interesting conspiracy theories, but my guess is “they” feel “we” can’t handle the truth. From my review of these documents, I only have more questions. Why are some REMICs not listed? If Wells Fargo claims that World Savings Bank loans were held in house and not securitized, why are so many World Savings REMICs reported to the IRS? Why is the REMIC claiming to hold my loan not listed in any of these documents? Is it a law that all REMICs have to report themselves to the IRS for publication?
The Introduction to Publication 938 for 1996 states:
This publication contains directories relating to real estate mortgage investment conduits (REMICs) and collaterized debt obligations (CDO’s). The directory for each calendar quarter is based on information submitted to the Internal Revenue Service during that quarter. This publication is only available on the IRS electronic bulletin board and the Internet.
For each quarter, there is:
• A directory of new REMICs and CDOs,
• A section containing amended listings.
You can use the directory to find the representative of the REMIC or the issuer of the CDO from whom you can request tax information. The amended listing section shows changes to previously listed REMICs and CDOs.
The directory for each calendar quarter will be added to this publication approximately six weeks after the end of the quarter. Continue reading “Internal Revenue Service Publication 938 – REMICs Reporting Information”
The Internal Revenue Service is investigating the Tax-Exempt Status of REMICs
By Daniel Edstrom
DTC Systems, Inc.
Reuters has announced that “The Internal Revenue Service has launched a review of the tax-exempt status of a widely-held form of mortgage-backed securities called REMICs.” This comes after many years of homeowners, lawyers and securitization experts having discussed the shenanigans of Wall Street. The standard industry practice is that loans were never perfected into these REMICs, which required the loans as “qualified mortgages” to be in the REMIC within 90 days of the “startup day”, which corresponds with the trust “closing date”. However, in nearly every case we have seen, the REMIC servicers are doing an assignment of the security instrument into the trust after the loan is in foreclosure in order that whoever is foreclosing has the right to foreclose. Unfortunately once a loan is in default it is no longer a “qualified mortgage” under REMIC laws, not to mention that it is years past the REMIC “startup day”. Nor as Judge Arthur Schack puts it in New York, why is the trustee accepting the conveyance of a non-performing loan into the trust?
Specifically the article says “These banks’ transgressions, confirmed in court decisions and through recent action by federal bank regulators, include the failure to formally transfer ownership of mortgages to the trusts that invested in them and the subsequent creation of fraudulent mortgage assignments and other false documents.” Cease and Desist Consent Orders were just issued against Bank of America, Citibank, HSBC, JP Morgan Chase, US Bank, Wells Fargo, Aurora Bank, EverBank, EverBank Financial Corporation, IMB HoldCo LLC, OneWest, Sovereign Bank, DocX, LPS Default and MERS. Just wait until the Securities and Exchange Commission decides to investigate Sarbanes-Oxley legislation against the statements these entities have made under oath with what the bank regulators found actually happened with them. Continue reading “The Internal Revenue Service is Investigating the Tax-Exempt Status of REMICs”