IRS comes up with easy rules to refinance mortgage

In order to lower the number of loan defaults, the IRS has issued new rules to refinance some of the commercial real estate loans. The commercial loans which are a part of Real Estate Mortgage Investment Conduits (REMICs) would be refinanced without triggering tax penalties for investors. Real Estate Mortgage Investment Conduits were designed to encourage mortgage-backed securities by offering tax benefits which were not available for other investment vehicles. Under the old rules, the investors could have lost those benefits if loans were restructured.

The new regulations were designed as Wall Street braces for a new wave of defaults on commercial real estate loans. Around 90 U.S. banks have already failed this year. It is expected that more banks would fail in the next few years largely because of commercial real estate loans going sour.