EXHIBIT 99.2
[Letterhead of GnazzoThill, A Professional Corporation]
July 30, 2002
TO THE PARTIES LISTED
ON SCHEDULE A HERETO
Re: Sequoia Mortgage Trust 8
Ladies and Gentlemen:
You have requested our opinion in connection with certain federal income
tax matters related to Sequoia Mortgage Trust 8 (the "Trust Fund") and the
$642,998,100 Sequoia Mortgage Trust 8 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 July 1, 2002 (the "Pooling and Servicing
Agreement"), among the Depositor, Wells Fargo Bank Minnesota, National
Association, as Master Servicer and securities Administrator and HSBC Bank USA,
as Trustee. 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. 333-90772),
including a prospectus (the "Prospectus"), filed with the Securities and
Exchange Commission under the Securities Act of 1933 on July 26, 2002, along
with the Prospectus Supplement, dated July 26, 2002 (the "Prospectus
Supplement"). 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 final Prospectus and Prospectus Supplement,
(ii) the final Pooling and Servicing Agreement and the forms of Certificates
distributed as exhibits thereto, (iii) the Mortgage Loan Purchase and Sale
Agreements, (iv) the Acknowledgments, dated as of July 30, 2002, assigning
rights under the Purchase Agreements and the Servicing Agreements, (v) 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 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.
TO THE PARTIES LISTED
ON SCHEDULE A HERETO
July 30, 2002
Page 2
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 an Upper
Tier REMIC and a Lower Tier REMIC, each comprised of the assets and interests
specified in the Pooling and Servicing Agreement and (ii) compliance with the
provisions of the Pooling and Servicing Agreement, the Mortgage Loan Purchase
and Sale Agreements, the Acknowledgments and the Servicing Agreements, for
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 Federal income tax matters, are
correct in all material respects;
2. the Trust Estate will consist of two segregated asset pools, the
Lower Tier REMIC and the Upper Tier REMIC, each of which will
qualify as a REMIC within the meaning of Section 860D of the Code;
3. the Class 1A-1, Class 1A-2, Class 2A, Class 3A, Class X-1, Class
X-2A, Class X-2B, Class X-B, Class B-1, Class B-2, Class B-3, Class
B-4, Class B-5 and Class B-6 Certificates will represent "regular
interests" in the Upper Tier REMIC, the Class A-R Certificate will
represent the sole "residual interest" in the Upper-Tier REMIC and
the Class LTR Certificate will represent the sole "residual
interest" in the Lower Tier REMIC, each within the meaning of
Section 860G of the Code as in effect on the date hereof;
4. the Basis Risk Reserve Fund is an "outside reserve fund" that is
beneficially owned by the Class X-1, Class X-2A, Class X-2B and
Class X-B Certificate Owners;
5. the rights of the Class 1A-1, Class 2-A and Class B-1 Certificate
Owners with respect to the Basis Risk Reserve Fund represent, for
federal income tax purposes, contractual rights that are separate
from their regular interests within the meaning of Treasury
Regulations Section 1.860G-2(i); and
6. the rights of the Class 1A-1 and Class 1A-2 Certificate Owners to
receive payments under the Swap Agreement represent, for federal
income tax purposes, contractual rights that are separate from their
regular interests within the meaning of Treasury Regulation Section
1.860G-2(i).
TO THE PARTIES LISTED
ON SCHEDULE A HERETO
July 30, 2002
Page 3
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 the federal income tax laws.
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, used,
circulated, quoted or otherwise referred to for any other purpose without our
express written permission.
Very truly yours,
/s/ GnazzoThill, A Professional Corporation
SCHEDULE A
Redwood Trust, Inc.
591 Redwood Highway
Suite 3100
Mill Valley, CA 94941
Sequoia Residential Funding Corporation
591 Redwood Highway
Suite 3160
Mill Valley, CA 94941
Greenwich Capital Markets, Inc.
600 Steamboat Road
Greenwich, CT 06830
Morgan Stanley & Co. Incorporated
1585 Broadway
New York, NY 10036
Banc of America Securities LLC
100 North Tryon Street, 11th Floor
NC1-007-11-07
Charlotte, NC 28255
Bear, Stearns & Co. Inc.
383 Madison Avenue
New York, NY 10179
Wells Fargo Bank Minnesota,
National Association
6th and Marquette
Minneapolis, MN 55479
HSBC Bank USA
452 Fifth Avenue
New York NY 10018