On October 1, 2001, after a period of negotiations, the National Structured Settlement Trade Association (NSSTA) and the National Association of Settlement Purchasers (NASP) sent a letter along with a package to Hon. Bill Archer , then Chairman of the House Ways and Means Committee and Hon.William V Roth, Jr , then Chairman of the Senate Finance Commitee entled "RE: Agreement between the National Structured Settlements Trade Association and the National Association of Settlement Purchasers on Proposed Legislation Covering Transfers of Structured Settlement Payments ". The end result formed part of the Victims of Terrorism Tax Relief Act of 2001 (signed December 20,2001) which ultimately gave birth to the now often cited Internal Revenue Code Section 5891.
On that letter sent to Messrs. Archer and Roth appeared the following "The undersigned settlement purchasers, although not members of NASP, hereby confirm that they concur in and agree to comply with and support the undertakings made by NASP in the foregoing letter:
Metropolitan Mortgage and Securities Co. Inc."
Less than three years later, in January 2004, the company filed for bankruptcy. Click here to read the Spokeman Review's excellent digest of articles about the accounting scandal that brought down the $2.3 billion empire of Metropolitan Mortgage and Securities Co. Inc."
Factoring companies that purchase structured settlement payment rights from tort victims often repackage the rights into securities that are then sold to investors.
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