On August 17th, the IRS published Revenue Procedure 2010-30, which responds to various requests for relief made by CMBS market participants in response to final regulations issued by the IRS on September 16, 2009. The final regulations introduced a new "principally secured" requirement for the REMIC rules relating to lien releases. Under the new revenue procedure, if a release of a lien on an interest in real property that secures a mortgage loan held by a REMIC satisfies certain requirements, then the IRS will not challenge the mortgage loan's status as a "qualified mortgage" on the grounds that it fails to be principally secured by an interest in real property. A lien release effected by a "grandfathered transaction" or by a "qualified pay-down transaction" generally will qualify for the benefits of the revenue procedure. Revenue Procedure 2010-30.
See our Financial Industry Week in Review of September 18, 2009 for additional background regarding the September 16, 2009, final regulations.