Base Offering Circular - Multifamily 482090 47 could have a number of consequences for Holders.  If, as the result of REMIC disqualification, the Trust were treated as an association taxable as a corporation, distributions on the Securities could be recharacterized in part as dividends from a non-includible corporation and in part as returns of capital.  Alternatively, distributions on a Regular Security could continue to be treated as comprised of interest and principal notwithstanding REMIC disqualification, in which case a cash-basis Holder might not be required to continue to recognize interest and market discount with respect to the Security on the accrual basis.  Under the first alternative, a loss of REMIC status would, and under the second alternative, a loss of REMIC status could cause the Securities and the associated distributions not to be qualified assets and income for the various purposes of DB&Ls, FASITs, and REITs described in the last paragraph under “Certain Federal Income Tax Consequences—General” above, although such a loss would not affect the status of the Securities as “government securities” for REITs.  The Securities should continue to qualify as “government securities” for RICs, regardless of whether REMIC status is lost. Tax Treatment of MX Securities General In the event that a Series provides for the issuance of one or more Classes of MX Securities, the arrangement pursuant to which the MX Classes are created, sold and administered (an “MX Pool”) will be classified as a grantor trust under subpart E, part I of subchapter J of the Code.  The interests in the Regular Classes that have been exchanged with Ginnie Mae for MX Classes (including any exchanges effective on the Closing Date) will be the assets of the MX Pool and the MX Classes will represent beneficial ownership of these interests in the Regular Classes.  The REMIC Securities related to the MX Securities will be contributed to such trust on the Closing Date and such trust will issue the Modifiable Securities. Tax Status The MX Classes should be considered to represent “real estate assets” within the meaning of section 856(c)(4)(A) of the Code and assets described in section 7701(a)(19)(C) of the Code. Original issue discount and interest accruing on the MX Classes should be considered to represent “interest on obligations secured by mortgages on real property” within the meaning of section 856(c)(3)(B) of the Code.  MX Classes will be “qualified mortgages” under section 860G(a)(3) of the Code for a REMIC. Tax Accounting for MX Securities An MX Class will represent beneficial ownership of an interest in one or more related Regular Classes.  If it represents an interest in more than one Regular Class, a purchaser must allocate its basis in an MX Class among the interests in the Regular Classes in accordance with their relative fair market values as of the time of acquisition.  Similarly, on the sale of such an MX Class, the Holder must allocate the amount received on the sale among the interests in the Regular Classes in accordance with their relative fair market values as of the time of sale.