Real Estate Mortgage Investment Conduit | Mortgage Securitization

What is a REMIC? In the US, a Real Estate Mortgage Investment Conduit is: a form of mortgage-backed security that allows the income to be taxed only when received by the bond holder and not by the entity that holds the right to the mortgages. Under the provisions of the Tax Reform Act of 1986, any corporation, partnership, trust company or similar organization may elect for Real Estate Mortgage Investment (REMIC) status. In order to maintain this status, the real estate mortgage investment … [Read more...]

Collateralized Mortgage Obligation (CMO) A Defined Explanation

A Collateralized Mortgage Obligation (CMO) is a form of securitization. Collateralized Mortgage Obligation Securitization is the packaging of a number of asset-backed loans or mortgages into tradeable securities. The conversion of a pool of investments or a number of loans into the right to a bond or security that is partially or wholly dependent on the income from the underlying investments or loans. The process of transferring certain receivables, such as consumer loans, mortgage loans, … [Read more...]