expiration of the three month period (usually defined as the “Cut-Off Date”) is a “prohibited transaction” and result in a tax being imposed upon the REMIC that is equal to 100 percent of the net income derived from the prohibited transaction.
The Pooling and Servicing Agreement (“PSA”).
The rules for the operation of a REMIC are contained in a voluminous document called a Pooling and Servicing Agreement, or “PSA.” The PSA addresses many issues, but some of the most important provisions define the duties and responsibilities of the major participants. You can find the PSA for JPMAC2006-NC1 on the SEC website. SEC = Securities and Exchange Commission.
THE BIG PROBLEM:
Many of the mortgages were not properly transferred into the REMIC trust by the cutoff date of the trust and as such are considered a ‘prohibited transaction.’ The IRS can tax you at 100% of the net income derived from the prohibited transaction plus possible penalties.
SEE THE ATTACHED ASSIGNMENT:
Here is a classic example…..this mortgage loan is in JPMAC2006-NC1 (supposedly) but look at the Assignment which is executed in May of 2007!! The closing date of the JPMAC2006-NC1 is in April of 2006. This means there was a half-hearted attempt to move the note and deed into the securities trust JPMAC2006-NC1 well over a year after that REMIC trust’s cutoff date. To compound matters, the assignment is not even assigned to the correct entity. It should not be assigned to U.S. Bank, N.A.---but it should be assigned to U.S. Bank N.A. as Trustee for JPMAC2006-NC1. IT ONLY TAKES A
BAD ASSIGNMENT TO CAUSE A ‘PROHIBITED TRANSACTION AND CAUSE THE 100% TAXATION OF INVESTORS.
HERE IS WHAT YOU NEED TO DO ASAP:
CONTACT THE CEO OF CHASE, JAMIE DIMON AT
JPMorgan Chase & Co.
270 Park Avenue New York, NY 10017 Phone: 212-270-6000 Fax: 212-270-1648 TELL HIM TO IMMEDIATELY CANCEL THE
RECORDED ASSIGNMENT WHICH IS ATTACHED
WHICH ARE LATE ASSIGNED TO THE REMIC TRUST. TELL HIM YOU DO NOT WANT TO BE TAXED AT 100% PLUS POSSIBLE PENALTIES DUE TO FRAUDULENT AND NEGLIGENT PAPER PROCESSING FOR THESE