‘HOW CAN A REMIC TRUST BE BUYING PROPERTY AT FORECLOSURE

SALES?’ BY A.CARR
JANUARY 16, 2011

TO ALL CALIFORNIANS AND OTHERS IN NON-JUDICIAL FORECLOSURE STATES

THERE ARE SEVERAL THINGS YOU SHOULD CONSIDER PURSUING AFTER YOUR HOME HAS BEEN ‘SOLD’ AT A
FORECOSURE SALE (AUCTION).

1. GET CERTIFIED COPY OF THE ‘TRUSTEE’S DEED UPON SALE’ FROM YOUR COUNTY RECORDER’S OFFICE
2. CHECK TO SEE IF A REMIC TRUST ‘BOUGHT’ YOU HOME AT THE TRUSTEE’S SALE (THE DOCUMENT ITSELF
MAY NOT SPELL OUT THE WORD REMIC, BUT YOU CAN DETERMINE THAT IF YOU GO TO THE SEC WEBSITE
AND SEARCH THE DOCUMENTS LISTED FOR THE TRUST AND SEARCH FOR THE ‘FWP’ OR FOR THE PSA
(POOLING AND SERVICING AGREEMENT). THOSE DOCUMENTS WILL ALSO TELL YOU THAT IT IS A REMIC
TRUST AND MOST CREATED FOR MORTGAGE POOLING WERE REMIC TRUSTS.
3. YOU MAY THEN BE SERVED WITH A UD (UNLAWFUL DETAINER OTHERWISE KNOWN AS EVICTION)
COMPLAINT
4. CHECK TO SEE IF THE PLAINTIFF ON THE UD IS THE REMIC SECURITIES TRUSTEE
5. FIND OUT IF THE REMIC TRUST STILL EXISTS AND IF NOT, WHEN WAS IT DISSOLVED (IF DISSOLVED OR
DEFUNCT YEARS AGO…THEN THINK?? WHAT ARE IMPLICATIONS NOW AS TO ‘HOW CAN A DEFUNCT
REMIC TRUST BE BUYING PROPERTY AT FORECLOSURE SALE AND THEN TRY TO EVICT ME?’)
6. CONTACT THE IRS TO COMPLAIN THAT A REMIC TRUST HAS ‘BOUGHT MY PROPERTY AT FORECLOSURE
SALE’ AND YOU ARE REQUESTING AN INVESTIGATION INTO THIS POTENTIALLY ILLEGAL ACT. IRS LAWS
GOVERN REMIC TRUST.

Victor S.O. Song

Chief, Criminal Investigation
IRS
1111 Constitution Ave NW
Room 2501
Washington DC 20224

7. IF YOU ARE ABLE RETAIN GOOD COUNSEL AND DISCUSS WITH HIM OR HER.
8. TAKE NOTE, DURING THE SECURITIZATION PROCESS OF POOLS OF MORTGAGE LOANS, SPECIAL TAX
TREATMENT WAS OBTAINED BY CREATING REMIC TRUSTS. THERE ARE SERIOUS TAX CONSEQUENCES TO
THE BANKS & INVESTMENT FIRMS IF THERE ARE REMIC VIOLATIONS.
9. OUR FEDERAL DEFICIT WOULD BE SIGNIFICANTLY REDUCED IF THERE WERE INVESTIGATIONS INTO THIS
MASSIVE TAX EVASION SCHEME, AND THAT IS MY OPINION. THUS OUR PRESIDENT SHOULD BE KEENLY
INTERESTED IN SUPPORTING FEDERAL INVESTIGATIONS INTO THIS.
10. AGAIN-HOW CAN A REMIC TRUST BUY PROPERTY AT A FORECLOSURE AUCTION AND THEN ALSO FILE A
LAWSUIT (A UD ACTION) IN A NON-JUDICIAL FORECLOSURE STATE, ESPESCIALLY IF THE TRUST IS
DEFUNCT. (CHECK ON THE SEC WEBSITE FOR ANY FORM 15s –also called termination of registration-this
form is usually filed when the entity is dissolved) CAUTION—SOME REMIC TRUSTS ARE RE-REMICd.
11. ALSO KEY IS TO FIGURE OUT IF THERE IS A CLEAR CHAIN OF TITLE…THERE MUST BE A CLEAR CHAIN OF
TITLE BEFORE A FORECLOSURE CAN OCCUR.

©CARRA JAN 2011

Northeastern University LAW JOURNAL Vol. 2, no. 1 spring 2010 Editors’ introduction notes

Here is link to this law journal:   http://www.scribd.com/doc/30405854/Northeastern-Law-Journal-Spring-2010

note: law journals can carry a lot of weight in court!

REMICs are a type of Real Estate Investment Trust (“REIT”) and the REMIC rules sometimes adopt the REIT
definitions. For example, the REMIC rules adopt the REIT definition of “foreclosure property” found in 26 C.F.R.
§  1.856-6 (2009). Regaining the Wonderful Life of Homeownership Post-Foreclosure 21 REMIC within three months
of the startup date.92 If the mortgage is contributed to the REMIC after the three month window, it may be
contributed properly if it is a “qualified replacement mortgage.”93 A qualified replacement mortgage is an
obligation that would have been qualified if transferred in the proper time, but is received outside the three month
window in exchange for a defective obligation.94 The REMIC can only engage in qualified replacement mortgage
transactions for up to two years following the startup date.95 A mortgage may also be properly contributed to the
trust after the three-month window if the mortgage qualifies as “foreclosure property,” a permitted investment for
REMICs.96 Foreclosure property is property acquired at a foreclosure sale or by agreement after there has been a
default.97 The mortgage is not eligible for foreclosure property treatment if the trustee knew or had reason to
know that default would occur.98 This information is termed “improper knowledge.”99 If the REMIC trust cannot
show either that the purchase of the mortgage was part of the qualified replacement mortgage, or that the
mortgage qualifies as foreclosure property, the trust violated the REMIC rules by executing a prohibited
transaction. The IRS imposes a 100% tax on net income derived from prohibited transactions.100 If a mortgage is
transferred to the trust as part of a prohibited transaction, a private right of action does not arise automatically
under the REMIC rules.  Additionally, solely violating the REMIC rules does not show a defect in ownership of the
mortgage.102 The violation may, however, increase the bargaining power of the borrower or may augment an
argument that the REMIC trust is not the proper owner of the mortgage,

DISCLAIMER: COMMENTOR IS NOT AN ATTORNEY AND NOT OFFERING LEGAL SERVICES OR ADVICE. ALWAYS CONSULT A COMPETENT
ATTORNEY

©CARRA JAN 2011