Background: A REMIC that forecloses on real property might appear to have an advantage over other real estate owners when operating, leasing, and ultimately disposing of that property (referred to as “REO property” once acquired by the REMIC). Unlike a typical developer, a REMIC generally pays no federal income tax on many types of income the REMIC earns from those activities. See Tom Biafore, “REMIC Qualification— Why Do We Care?” and “Fear Of The Unknown — The Danger Of Holding Unqualified Assets” in this Guide for a discussion of the significance of REMIC status. Much of the REMIC’S perceived advantage is eliminated, however, by technical rules that restrict the REMIC’s operation and disposition of REO property.