Abstract

http://ssrn.com/abstract=2209863
 
 

Footnotes (1)



 


 



Dirt Lawyers, Dirty REMICs


Bradley T. Borden


Brooklyn Law School

David J. Reiss


Brooklyn Law School

January 31, 2013

Probate & Property May/June 2013, Forthcoming
Brooklyn Law School, Legal Studies Paper No. 322

Abstract:     
It is appropriate that the day-to-day practice of real estate law did not touch on the intricacies of the securitization of mortgages, let alone the tax laws that apply to mortgage-backed securities. Securitization professionals did not, however, account for the day-to-day practices of real estate lawyers as they relate to the transfer and assignment of mortgage notes and mortgages when structuring mortgage-backed securities. The consequences of this may turn out to be severe for investors, underwriters, and securitization professionals.

One of the consequences of the sale of a negotiable note not done in accordance with the requirements of the holder in due course doctrine is that the purchaser of the note may not be free of the personal defenses that the note maker (borrower) would have had against the original lender. Another consequence of the sale of a note that is not done properly is that the beneficial owner (as opposed to the legal owner) may not be able to collect on the debt if the borrower is in default. And a third – and until recently hidden -- consequence of an improper sale of a note to a secondary market participant is that the purchaser may fail to comply with requirements necessary to obtain favorable tax treatment as a Real Estate Mortgage Investment Conduit, a REMIC.

Number of Pages in PDF File: 11

Keywords: mortgage-backed securities, MBS, Real Estate Mortgage Investment Conduit, REMIC, dirt lawyers

Accepted Paper Series





Download This Paper

Date posted: February 1, 2013  

Suggested Citation

Borden, Bradley T. and Reiss, David J., Dirt Lawyers, Dirty REMICs (January 31, 2013). Probate & Property May/June 2013, Forthcoming; Brooklyn Law School, Legal Studies Paper No. 322. Available at SSRN: http://ssrn.com/abstract=2209863

Contact Information

Bradley T. Borden
Brooklyn Law School ( email )
250 Joralemon Street
Brooklyn, NY 11201
United States

David J. Reiss (Contact Author)
Brooklyn Law School ( email )
250 Joralemon Street
Brooklyn, NY 11201
United States

Feedback to SSRN


Paper statistics
Abstract Views: 1,139
Downloads: 344
Download Rank: 49,986
Footnotes:  1

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo5 in 0.375 seconds