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EXHIBIT 8.1
[Letterhead of GnazzoThill, A Professional Corporation]
December __, 2000
Specialty Mortgage Trust, Inc.
6160 Plumas Street
Reno, Nevada 89509
Re: Specialty Mortgage Trust, Inc.
Collateralized Investment Notes
Registration Statement on Form S-11, No. 333-44860
Ladies and Gentlemen:
We have acted as special tax counsel to Specialty Mortgage Trust, Inc.
(the "Company") in connection with the preparation and filing of the
registration statement on Form S-11 (the "Registration Statement") filed on the
date hereof with the Securities and Exchange Commission pursuant to the
Securities Act of 1933, as amended (the "Act"), in respect of its Collateralized
Investment Notes (the "Notes"). In that capacity, we have been asked to render
an opinion regarding certain descriptions of federal income tax consequences
contained in the prospectus that forms a part of such Registration Statement
(the "Prospectus"). Capitalized terms used but not defined herein shall have the
same meaning as in the Prospectus.
In rendering our opinion, we have reviewed (i) the Registration
Statement, (ii) the forms of the Indenture, the Notes and such other transaction
documents as we have deemed necessary, (iii) a form of the supplement to be used
in connection with each issuance of Notes, (iv) the Articles of Incorporation
filed with the Registration Statement and certain other organizational documents
of the Company, as amended and supplemented to date and (v) such resolutions,
certificates, records, and other documents provided by the Company as we have
deemed necessary or appropriate as a basis for the opinions set forth below. In
addition, the Company has provided us with a certificate (the "Officer's
Certificates"), executed by a duly appointed and knowledgeable officer of the
Company, upon which we have relied, setting forth certain representations
relating to various factual matters including the prior, current and future
methods of operation of the Company.
In rendering our opinion, we have assumed (i) the legal capacity of all
natural persons, 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 copies, and the authenticity of the originals
of such copies, (ii) that the transactions described in or contemplated by the
foregoing documents have been and will be consummated in accordance with the
terms of such documents and that such documents accurately reflect the material
facts of such transactions, and (iii) that a final version of the Registration
Statement will become the effective Registration Statement in respect of the
Notes without material change in the facts stated. The opinion set forth herein
is expressly based upon such assumptions and representations and upon the
accuracy of those facts so assumed or represented. It should be noted that the
representations as to the Company's methods of operation are highly factual in
nature and reflect an intention with respect to the future conduct and
performance of its business that may not be achievable if there are future
changes in the circumstances.
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Any material change that is made after the date hereof in any of the foregoing
assumptions could adversely affect our conclusions.
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 those stated in our opinion.
Based on the foregoing, we are of the opinion that, as of the date
hereof:
1. The Company was organized in conformity with the requirements
for qualification as a "real estate investment trust" under
the Code, commencing with its taxable year ending December 31,
1998, and the Company's actual and proposed methods of
operation, as described in the Prospectus and as represented
by the Company, should enable it to continue to so qualify;
2. The Notes, once duly authorized and issued, will be treated as
indebtedness, and not as an ownership interest in the
Pledged Assets or as equity in the Company for United States
federal income tax purposes;
3. The pool of assets comprising the Pledged Assets will not be
classified as a "taxable mortgage pool" within the meaning
of Section 7701(i) of the Code; and
4. Although the discussion in the Prospectus under the heading
"Federal Income Tax Consequences" does not purport to discuss
all possible United States federal income tax consequences of
the purchase, ownership and disposition of the Notes, in our
opinion, such discussion taken as whole constitutes in all
material respects, a fair and accurate summary of the United
States federal income tax consequences of the purchase,
ownership and disposition of the Notes under existing law.
Other than as expressly stated above, we express no opinion on any
issue relating to the Company, the Notes, or to any series or class of
securities issued by the Company, or under any law other than the federal income
tax laws.
We are furnishing this opinion to you solely in connection with the
filing of the Registration Statement and it is not to be relied upon, used,
circulated, quoted or otherwise referred to for any other purpose without our
express written permission.
We hereby consent to the filing of this letter as an Exhibit to the
Registration Statement and to the references to this firm in the Prospectus
under the headings "Certain Federal Income Tax Considerations" and "Legal
Matters." In giving our consent, we do not hereby admit that we come within the
category of persons whose consent is required under Section 7 of the Act or the
rules and regulations promulgated thereunder.
Very truly yours,
/s/
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GNAZZOTHILL,
A PROFESSIONAL CORPORATION
