Wow, you're so on-the-ball that it only took you five years to start raising hell beyond when multiple people, myself included, began to howl about exactly this point?

Investors in mortgage-backed securities, built on the shoulders of the tax-advantaged Real Estate Mortgage Investment Conduit (“REMIC”), may be facing extraordinary tax losses because of how bankers and lawyers structured these securities.  This calamity is compounded by the fact that those professional advisers should have known that the REMICs they created were flawed from the start.  If these losses are realized, those professionals will face suits for damages so large that they could put them out of business.  That is, unless the Wall Street Rule is applied.

No kidding?

From 2010-10-03 on The Ticker, which re-hashed a theme I've been pounding on since 2007:

See, there's this little problem.  A REMIC (Real Estate Mortgage Investment Conduit, or "MBS") is a special thing under IRS rules.  Normally a business would have to operate at a profit or loss, pay taxes, and then pay dividends.  This results in double-taxation.

A REMIC has a special status under the IRS code which avoids this; the interest flows through to the investor without being separately taxed at the business-level of the REMIC itself. 

But in exchange for this, there are constraints.  One of them is that a REMIC cannot acquire "distressed" assets - that is, notes that have defaulted.  It cannot, in other words, engage (intentionally, up front) in what would be considered "recovery operations" if you will.

The reason for this is that if it could, every "distressed asset" acquirer would set up such a structure and avoid monstrous amounts of tax.  So, as to avoid this problem, a REMIC can acquire only loans that are current.

And of course if there are no notes that are transferred this explains many things.

Like robosigned documents.

Like "lost document" affidavits (it explains notes being intentionally lost, since they can't be transferred to their correct place late, as the time window has long expired to meet legal requirements.)

Like allonges that magically appear on a document years later (and which are barred under the UCC because otherwise fraud becomes trivial to commit.)

Because REMICs did not file the correct returns and may have committed fraud, the statute of limitations for earlier years will remain open indefinitely, giving the IRS adequate time to pursue REMIC litigation after it obtains the information it needs.If the IRS does not take action at the appropriate time, however, it will be a serious failure and will result in the loss of billions of dollars of tax revenue for the federal government.

More troubling still is the IRS’s failure to address the wide-scale abuse and problems that existed during the years leading up to the financial meltdown.  The IRS’s failure to adequately police REMICs is one more reason that the mortgage industry was able to overly inflate the housing market.  And that, inexorably, led to the crash and our tepid recovery from it.

More generally, by overlooking the serious defects in the transactions, courts and governmental agencies encourage the type of behavior that led to the financial crisis.  Lawmakers, law enforcement agencies and the judiciary cede their governing functions to private industry if they allow players to disregard the law and stride to create law through their own practices.

And until We The People demand through political process that this crap stop and if necessary form a new political party to do so, trampling the existing parties who refuse, you will continue to get screwed and both you and your children will be serially robbed and financially abused by these latter-day robber barons.