Internal Revenue Service Issues New REMIC Rules Regarding Mortgage Loan Modifications

September 23, 2009
The changes to the REMIC Rules addressing CMBS loan modifications issued by the IRS last week have garnered significant attention and commentary from CMBS industry participants and spectators, sparking a conversation among borrowers, lenders, servicers, investors, and industry groups about the practical effect these changes will have on their business. While it seems clear that the Revenue Procedure and Regulations relax certain constraints on modifying mortgage loans held in REMICs, it is not clear how significant an impact these changes will have in practice. In a follow-up to our initial Dechert OnPoint on this topic, this article poses and answers questions regarding the practical effect of the Revenue Procedure and the Regulations on CMBS industry participants, with a focus on Master Servicers and Special Servicers.