Saturday, July 28, 2012

What is Real Estate Mortgage Investment Conduit

What is a REMIC? Real Estate Mortgage Investment Conduit (Mortgage Securitization)

In the US, a Real Estate Mortgage Investment Conduit is: Real Estate Mortgage Investment Conduit

a form of mortgage-backed security that allows the income to become taxed solely when gained by the bond holder and not by the entity that holds the right to the mortgages. Using the provisions of the Tax Reform Act of 1986, any firm, joint venture, trust company or similar company may choose for Real Estate Mortgage Investment (REMIC) status.

For you to preserve this status, the real estate mortgage investment conduit, in any form, must submit to strict rules. It may invest only in 'qualifying mortgages' (usually only first mortgages) and granted investments (generally short-term interest-bearing investments). It must pass the income from the mortgages through to the owners of the securities (26 USCA, Internal Revenue Code,

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