EXHIBIT 8.1
December 27, 2001
The Addressees Listed on Annex A:
Re: RAFC Asset-Backed Securities, Series 2001-1
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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 RAFC
Asset-Backed Securities, Series 2001-1, Class A-1, Class A-2, Class A-3, Class
M-1, Class M-2, Class B-1, Class B-2, Class X and Class R Certificates
(collectively, the "Certificates") pursuant to a Pooling and Servicing
Agreement, dated as of November 30, 2001 (the "Pooling and Servicing Agreement")
among the Depositor, First Union National Bank as custodian (the "Custodian")
and certificate administrator (the "Certificate Administrator"), RAFC
Asset-Backed Trust 2001-1, as transferor (the "Transferor"), HomEq Servicing
Corporation, as servicer, Citibank, N.A., 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 October 29, 2001 and a
Prospectus Supplement dated December 19, 2001 (together the "Prospectus"), (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").
To the Addressees Listed
on Annex A
December 27, 2001
Page 2
Based on the foregoing, and such investigations as we have
deemed appropriate, we are of the opinion that for federal income tax purposes:
1. Assuming that (a) each of the Lower Tier REMIC and the
Upper Tier REMIC created under the Pooling and Servicing Agreement
elects, 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 REMIC will be
treated as a REMIC.
2. Subject to the above, each of the Class A-1, Class
A-3, Class M-1, Class M-2, Class B-1, Class B-2 and Class X
Certificates will be treated as a "regular interest" in the Upper Tier
REMIC. Holders of Class A-2 Certificates and the related rights to
receive Supplemental Interest Amounts will be treated for federal tax
purposes as holding two separate investments: (i) a regular interest in
the Upper Tier REMIC, and (ii) the right to receive Supplemental
Interest Amounts. The UT-R Interest will be treated as the "residual
interest" in the Upper Tier REMIC. The Lower Tier REMIC Regular
Interests will be treated as the "regular interests," and the LT-R
Interest will be treated as the "residual interest" in the Lower Tier
REMIC.
3. The Class A-2 Certificateholders' rights to receive
Supplemental Interest Amounts will not constitute (i) "real estate
assets" within the meaning of Section 856(c)(5)(B) of the Code if held
by a real estate investment trust; (ii) "qualified mortgages" within
the meaning of Section 860G(a)(3) of the Code or "permitted
investments" within the meaning of Section 860G(a)(5) of the Code if
held by a REMIC; or (iii) assets described in Section
7701(a)(19)(C)(xi) of the Code if held by a thrift. Instead, while the
proper federal income tax treatment of the right to receive
Supplemental Interest Amounts is not clear, special tax counsel
believes that the right to receive Supplemental Interest Amounts should
be treated as a notional principal contract under Section 446 of the
Code.
4. The statements under the captions "Material Federal
Income Tax Consequences" in the Prospectus and "Certain Federal Income
Tax Considerations" 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.
To the Addressees Listed
on Annex A
December 27, 2001
Page 3
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. Citibank, N.A.
301 South College Street, TW-06 111 Wall Street, 14th Floor
Charlotte, North Carolina 28288-0610 New York, New York 10005
HomEq Servicing Corporation First Union National Bank
4837 Watt Avenue One First Union Center, DC-8
North Highlands, CA 95660 Charlotte, NC 28288-0600
RAFC Transferor Trust Moody's Investors Service, Inc.
c/o Wilmington Trust Company 99 Church Street
Rodney Square North New York, New York 10007
1100 North Market Street
Wilmington, Delaware 19890-001
Fitch Standard & Poor's Ratings Services
One State Street Plaza 55 Water Street
New York, New York New York, New York 10041