This was before we found Rehypothecation in the securities scheme. Add that to the mix and the banks’ intent to permanently destroy homeownership becomes crystal clear. As long as we allow Congress to get away with ignoring the necessity of regulation – we are acknowledging and accepting the destruction of an integral part of the American life and human rights.
It’s about time somebody recognized it. David Reiss and Brad Bordon posted a dynamic review of the most recent ‘slap down the banks’ cases of Saldivar and Erobobo and the potential impact on the [failed] REMIC tax shelters in REFinBlog.
David Reiss writes: “Brad Borden and I have warned that an unanticipated tax consequence of the sloppy mortgage origination practices that characterized the boom is that MBS pools may fail to qualify as REMICs. This would have massively negative tax consequences for MBS investors and should trigger lawsuits against the professionals who structured these transactions. Courts deciding upstream and downstream cases have not focused on this issue because it is typically not relevant to the dispute between the parties.
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