The Senate has passed and cleared the way for the president to sign a $140 billion corporate tax bill that repeals the FASIT statute but opens the door to the securitization of reverse mortgages.One provision in the 600-plus-page bill (H.R. 4520) allows issuers to place reverse mortgages into real estate mortgage investment conduits if they can get an investment-grade ranking from a national rating agency, such as Standard & Poor's, Moody's, or Fitch Ratings. At the same time, the bill repeals a 1996 statute that was supposed to create a flexible vehicle -- a financial asset securitization investment trust -- for securitizing home equity loans, credit card receivables, and construction loans. But it never lived up to its billing and became associated with abusive transactions employed by Enron. In agreeing to a House-Senate conference report, the tax writers stripped provisions contained in the Senate tax bill that would have allowed deductions for mortgage insurance premiums and blocked the Labor Department from enforcing new overtime rules. Banking groups are very pleased with the final bill because it contains Subchapter S reform that will benefit community banks and small businesses.

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