EXHIBIT 99.2
[Letterhead of Chapman and Cutler LLP]
April 29, 2004
TO THE PARTIES LISTED
ON SCHEDULE A HERETO
Re: Sequoia Mortgage Trust 2004-4
Ladies and Gentlemen:
You have requested our opinion in connection with certain federal income
tax matters related to Sequoia Mortgage Trust 2004-4 (the "Trust Fund") and the
$835,003,083 Sequoia Mortgage Trust 2004-4 Mortgage Pass-Through Certificates
issued with respect thereto (the "Certificates"). The Trust Fund was established
by Sequoia Residential Funding, Inc. (the "Depositor") pursuant to the Pooling
and Servicing Agreement, dated as of April 1, 2004 (the "Pooling and Servicing
Agreement"), among the Depositor, HSBC Bank USA, as Trustee, and Wells Fargo
Bank, National Association, as Master Servicer and Securities Administrator. The
Certificates are being issued pursuant to the Pooling and Servicing Agreement.
Reference is hereby made to the Depositor's Universal Shelf Registration
Statement on Form S-3 (Registration Statement No. 333-112334) filed with the
Securities and Exchange Commission under the Securities Act of 1933 on January
30, 2004 and declared effective on or about February 12, 2004, and to the
Prospectus, dated February 12, 2004 (the "Prospectus") and the Prospectus
Supplement, dated April 14, 2004 (the "Prospectus Supplement"), included in such
Registration Statement. Each capitalized term used but not defined herein has
the meaning assigned thereto in the Pooling and Servicing Agreement.
We have acted as special tax counsel to the Depositor in connection with
the above transaction and have assisted in the preparation of the federal income
tax summaries set forth in the Prospectus and the Prospectus Supplement used in
connection with the issuance of the Certificates. In formulating our opinions,
we have reviewed copies of (i) the Prospectus and Prospectus Supplement, (ii)
the Pooling and Servicing Agreement and the forms of Certificates issued
pursuant thereto, (iii) the Mortgage Loan Purchase and Sale Agreement, (iv) the
Purchase Agreements and the Servicing Agreements, (v) the Acknowledgments, dated
as of April 29, 2004, assigning rights under the Purchase Agreements and the
Servicing Agreements, and (vi) such resolutions, certificates, records, and
other documents provided by the Depositor as we have deemed necessary or
appropriate as a basis for the opinions set forth below.
In our examination, we have assumed the legal capacity of all natural
persons, the genuineness of all signatures, the authenticity of all documents
submitted to us as originals or
TO THE PARTIES LISTED
ON SCHEDULE A HERETO
April 29, 2004
Page 2
finals, the conformity to original documents of all documents submitted to us as
certified, conformed or other copies, and the authenticity of the originals of
such copies. In rendering our opinions, we have assumed that the transactions
described in or contemplated by the foregoing documents have been and will be
consummated in accordance with the terms of such operative documents, and that
such documents accurately reflect the material facts of such transactions.
Our opinion is also based on the Internal Revenue Code of 1986, as
amended, administrative rulings, judicial decisions, Treasury regulations and
other applicable authorities. The statutory provisions, regulations, and
interpretations on which our opinion is based are subject to change, possibly
retroactively. In addition, there can be no complete assurance that the Internal
Revenue Service will not take positions contrary to the conclusions stated in
our opinion.
Based on the foregoing, we are of the opinion that, assuming (i) the
making of a timely election to treat the Trust Fund as consisting of multiple,
tiered REMICs, each comprised of the assets and interests specified in the
Pooling and Servicing Agreement (and, in particular, excluding from the assets
of each such REMIC the Reserve Fund and the Additional Collateral) and (ii)
compliance with the provisions of the Pooling and Servicing Agreement, the
Mortgage Loan Purchase and Sale Agreement, the Purchase Agreements, the
Servicing Agreements and the Acknowledgments, for United States federal income
tax purposes:
1. the statements in the Prospectus under the heading "Federal Income
Tax Consequences," as supplemented or modified by the statements in
the Prospectus Supplement under the heading "Federal Income Tax
Consequences," to the extent that they constitute matters of law or
legal conclusions with respect to United States federal income tax
matters, are correct in all material respects;
2. each segregated asset pool for which the Pooling and Servicing
Agreement directs the Trustee to make a REMIC election will qualify
as a REMIC within the meaning of Section 860D of the Code;
3. the Reserve Fund is an "outside reserve fund" that is beneficially
owned by the Class X Certificate Owners; and
4. the rights of the Certificate Owners with respect to the Reserve
Fund represent, for United States federal income tax purposes,
contractual rights that are separate from their regular interests
within the meaning of Treasury Regulations Section 1.860G-2(i).
Other than as expressly stated above, we express no opinion on any issue
relating to the Depositor, the Trust Fund, or to any other securities issued by
them, or under any law other than United States federal income tax laws.
TO THE PARTIES LISTED
ON SCHEDULE A HERETO
April 29, 2004
Page 3
We are furnishing this opinion to you solely in connection with the
initial sale of the Certificates and it is not to be relied upon by any other
person or for any other purpose without our express written permission.
Very truly yours,
/s/ Chapman and Cutler LLP
SCHEDULE A
Redwood Trust, Inc.
One Belvedere Place
Suite 300
Mill Valley, CA 94941
Sequoia Residential Funding, Inc.
One Belvedere Place
Suite 330
Mill Valley, CA 94941
Morgan Stanley & Co. Incorporated
1585 Broadway
New York, NY 10036
Banc of America Securities LLC
214 North Tryon Street
NC1-027-21-04
Charlotte, NC 28255
Greenwich Capital Markets, Inc.
600 Steamboat Road
Greenwich, CT 06830
Merrill Lynch, Pierce,
Fenner & Smith Incorporated
4 World Financial Center, 10/F
New York, NY 10080
Wells Fargo Bank,
National Association
9062 Old Annapolis Road
Columbia, MD 21045
HSBC Bank USA
452 Fifth Avenue
New York, NY 10018