EXHIBIT 8.1
September 17, 2001
The Addressees Listed
on Annex A
Re: C-Bass Mortgage Loan Asset-Backed Certificates,
Series 2001-CB3
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Ladies and Gentlemen:
We have acted as special tax counsel to Residential Asset
Funding Corporation (the "Depositor") as to certain matters in connection with
the issuance and delivery of certain asset-backed certificates denominated
C-Bass Mortgage Loan Asset-Backed Certificates, Series 2001-CB3, Class A-IO,
Class A-1A, Class M-1, Class M-2, Class B-1, Class B-2, Class N, Class X, Class
R and Class R-4 Certificates (collectively, the "Certificates") pursuant to a
Pooling and Servicing Agreement, dated as of August 1, 2001 (the "Pooling and
Servicing Agreement") among the Depositor, Credit-Based Asset Servicing and
Securitization LLC, as seller, Litton Loan Servicing LP, as servicer, and The
Chase Manhattan Bank, as trustee (the "Trustee").
As special tax counsel, we have examined such documents as we
have deemed appropriate for the purposes of rendering the opinions set forth
below including the following: (a) a Prospectus dated September 9, 1999 and a
Prospectus Supplement dated September 6, 2001 (together the "Prospectus") with
respect to the Class A-IO, Class A-1A, Class M-1, Class M-2 and Class B-1
Certificates, (b) an executed copy of the Pooling and Servicing Agreement and
the exhibits attached thereto and (c) other documents and matters of fact and
law as we deem necessary for the purposes of the opinions expressed below. Terms
capitalized herein and not otherwise defined herein shall have their respective
meanings as set forth in the Pooling and Servicing Agreement.
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.
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 the special tax counsel is not binding on the courts or the Internal Revenue
Service (the "IRS").
Based on the foregoing, and such investigations as we have
deemed appropriate, we are of the opinion that for federal income tax purposes:
To the Addressees Listed
on Annex A
September 17, 2001
Page 2
1. Assuming that (a) each of REMIC 1, REMIC 2, REMIC 3, and
REMIC 4 created under the Pooling and Servicing Agreement elect, as it has
covenanted to do in the Pooling and Servicing Agreement, to be treated as a
"real estate mortgage investment conduit" ("REMIC"), as such term is defined in
the Internal Revenue Code of 1986, as amended (the "Code") and (b) the parties
to the Pooling and Servicing Agreement comply with the terms thereof, each of
REMIC 1, REMIC 2, REMIC 3 and REMIC 4 will be treated as a REMIC.
2. Subject to the above, (a) the Class A-IO Certificates, (b)
the Class A-1A Certificates, without the right to receive the LIBOR Carryover
Amount, (c) the Class M-1 Certificates, (d) the Class M-2 Certificates, (e) the
Class B-1 Certificates, (f) the Class B-2 Certificates and (g) the Class T3-X/N
Interest will be treated as "regular interests" in REMIC 3. The Class R-3
Interest will be treated as the "residual interest" in REMIC 3. The REMIC 2
Regular Interests will be treated as the "regular interests" and the Class R-2
Interest will be treated as the "residual interest" in REMIC 2. The REMIC 1
Regular Interests will be treated as the "regular interests" and the Class R-1
Interest will be treated as the "residual interest" in REMIC 1.
3. Subject to the above, the Class X/N Interest will be
treated as the "regular interest" in REMIC 4. The Class R-4 Interest will be
treated as the "residual interest" in REMIC 4.
4. While the proper federal income tax treatment of the right
to receive Rate Payments is not clear, special tax counsel believes that the
right to receive Rate Payments should be treated as a notional principal
contract.
5. The portion of the Trust Fund that holds the Excess Reserve
Fund Account will not be an asset of REMIC 1, REMIC 2, REMIC 3 or REMIC 4, but
will be treated as owned by the beneficial owner of the Class X Certificate.
6. The statements under the caption "Material Federal Income
Tax Consequences" in the Prospectus Supplement are accurate and complete in all
material respects.
Our opinions contained herein are rendered only as of the date
hereof, and we undertake no obligation to update this letter or the opinions
contained herein after the date hereof.
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
each addressee, and no other person or entity is entitled to rely hereon without
our prior written consent. Copies of this opinion letter may not be furnished to
any other person or entity, nor may any
portion of this opinion letter be
quoted, circulated or referred to in any other document, without our prior
written consent.
Very truly yours,
/s/ Dewey Ballantine LLP
ANNEX A
First Union Securities, Inc. The Chase Manhattan Bank
301 South College Street, TW-06 450 West 33rd St.
Charlotte, North Carolina 28288-0610 14th Floor
New York, New York 10001
Credit-Based Asset Servicing and Securitization LLC Moody's Investors Service, Inc.
335 Madison Avenue, 19th Floor 99 Church Street
New York, New York 10017 New York, New York 10007
Salomon Smith Barney Inc. Standard & Poor's Ratings Services
390 Greenwich Avenue 55 Water Street
New York, New York 10013 New York, New York 10041