EXHIBIT 5.2
OPINION REGARDING TAX MATTERS
June 4, 1999
First Union Capital Markets Corp.
301 South College Street
Charlotte, North Carolina 28288
Prudential Securities Incorporated
One New York Plaza
New York, New York 10292-2015
MBIA Insurance Corporation
113 King Street
Armonk, New York 10504
Re: Mortgage Lenders Network Home Equity Loan Trust 1999-1
Asset Backed Notes, Series 1999-1, Class A-1and Class A-2
Ladies and Gentlemen:
We have acted as special tax counsel in connection with the
issuance and delivery of certain notes denominated as Mortgage Lenders Network
Home Equity Loan Trust 1999-1, Series 1999-1 Notes, Class A-1 and Class A-2 (the
"Notes") pursuant to the terms of the Indenture (the "Indenture"), dated as of
June 1, 1999, between the Mortgage Lenders Network Home Equity Loan Trust 1999-1
(the "Issuer") and Norwest Bank Minnesota, National Association, as indenture
trustee (the "Indenture Trustee"). Capitalized terms used herein but not defined
herein shall have the meanings ascribed to them in the Indenture.
As special tax counsel, we have examined such documents as
deemed appropriate for the purposes of rendering the opinions set forth below,
including the following: (a) an executed copy of the Indenture and the exhibits
attached thereto and (b) certain representations and warranties made by Mortgage
Lenders Network USA, Inc. and the Issuer.
We do not purport to express an opinion on any laws other than
the federal income tax law of the United States of America. No opinion has been
sought and none has been given concerning the tax treatment of the issuance and
sale of the Notes under the laws of any state.
In our examination we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as originals, the
conformity to original documents of all documents submitted to us as certified
or photostatic copies and the authenticity of the originals of such latter
documents.
We have examined the question of whether the Notes will be
treated as indebtedness for federal income tax purposes. Our analysis is based
on the provisions of the Internal Revenue Code of 1986, as amended, and the
Treasury Regulations promulgated thereunder as in effect on the date hereof and
on existing judicial and administrative interpretations thereof. These
authorities are subject to change and to differing interpretations, which could
apply retroactively. The opinion of special tax counsel is not binding on the
courts or the Internal Revenue Service (the "IRS").
In general, whether a transaction constitutes the issuance of
indebtedness for federal income tax purposes is a question of fact, the
resolution of which is based primarily upon the economic substance of the
instruments and the transaction pursuant to which they are issued rather than
the form of the transaction or the manner in which the instruments are labeled.
The IRS and the courts have set forth various factors to be taken into account
in determining whether or not a transaction constitutes the issuance of
indebtedness for federal income tax purposes, which we have reviewed as they
apply to this transaction.
Based on the foregoing, and such legal and factual
investigations as we have deemed appropriate, while no transaction closely
comparable to that contemplated in the Basic Documents has been the subject of
any Treasury regulation, revenue ruling or judicial decision, and therefore the
matter is subject to interpretation, we are of the opinion that for federal
income tax purposes:
(1) The Notes will properly be treated as indebtedness for
federal income tax purposes;
(2) Neither the Issuer nor the Mortgage Pool will be
characterized as an association (or a publicly traded partnership)
taxable as a corporation or a taxable mortgage pool.
We express no opinion on any matter not discussed in this
letter. This opinion is rendered as of the Closing Date, for the sole benefit of
the addressees hereof and it may not be relied on by any other party or quoted
without our express consent in writing.
We consent to reliance on this opinion letter by you and by
Richards, Layton & Finger, for the purpose of issuing their opinion with respect
to the tax treatment of the Trust under Delaware law. Except as provided in the
proceeding sentence, this opinion letter may not be relied upon by, nor may
copies be delivered to, any person without our prior written consent. We do not
undertake to advise you of any changes in the opinions expressed herein from
matters that might hereafter arise or be brought to our attention.
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Very truly yours,
/s/ Dewey Ballantine LLP
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Dewey Ballantine LLP
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