Proposed TARP Legislation Addresses REMIC Loan Modifications/Dispositions and New Home Mortgage Loan Relief Program

February 20, 2009
Senator Jack Reed recently introduced the Real Estate Mortgage Investment Conduit Improvement Bill of 2009 (the “REMIC Bill”), which proposes “rules for the modification or disposition of certain assets by real estate mortgage investment conduits pursuant to division A of the Emergency Economic Stabilization Act of 2008.” The rules would enable REMICs to dispose of loans under the auspices of the Troubled Asset Relief Program without endangering their REMIC status. This update reviews the proposed legislation, which would have a significant impact on existing and future commercial and residential mortgage-backed securitization transactions.