What is a Remic loan?

A real estate mortgage investment conduit (REMIC) is “an entity that holds a fixed pool of mortgages and issues multiple classes of interests in itself to investors” under U.S. Federal income tax law and is “treated like a partnership for Federal income tax purposes with its income passed through to its interest …

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Moreover, how does a Remic work?

Under the REMIC rules, in order for a securitization vehicle to qualify as a REMIC, among other requirements, its assets must consist of “qualified mortgages” and “permitted investments” (which include certain cash flow investments, qualified reserve assets and foreclosure property) (collectively, “qualifying assets”), …

Simply so, what is a primary advantage of a Remic? What is a primary advantage of a REMIC? They are especially useful when a housing bubble bursts. They provide capital gains sheltering the investor. They offer stability with the variety of mortgages they contain. They gain in value over time as the mortgages in the pool are being paid down.

In respect to this, what is a Fannie Mae Remic?

Megas. Fannie Mae Megas are single-class, pass-through, non-TBA-eligible securities in which the underlying collateral are groups of existing Fannie Mae non-TBA MBS and/or Fannie Mae Megas. The securities that back a Megas are issued and guaranteed by Fannie Mae.

What does Remic stand for?

real estate mortgage investment conduit

What is difference between MBS and CMO?

A collateralized mortgage obligation, or CMO, is a type of MBS in which mortgages are bundled together and sold as one investment, ordered by maturity and level of risk. A mortgage-backed security, or an MBS, is a kind of asset-backed security that represents the amount of interest in a pool of mortgage loans.

What is a Remic opinion?

REMIC Opinion means an opinion of outside tax counsel reasonably acceptable to Lender or the Rating Agencies to whom such opinion is addressed that a contemplated action will neither cause any trust formed as a REMIC pursuant to a Securitization to fail to qualify as a “real estate mortgage investment conduit” within …

What is the difference between CDO and CMO?

while CDOs are private labeled. … The CMO is a little easier to understand as the cash flow it provides is from a specific pool of mortgages while the CDO cash flows can be backed by automobile loans, credit card loans, commercial loans and even some tranches from a CMO.

What is a Remic residual interest?

A REMIC is a structured mortgage product that may pool either residential or commercial mortgages in a special purpose vehicle for investors. … Thus some REMIC investors may receive residual interest payments after all the required regular interest has been paid to investors within higher priority tranches.

What are MBS products?

Mortgage-backed securities, called MBS, are bonds secured by home and other real estate loans. They are created when a number of these loans, usually with similar characteristics, are pooled together. For instance, a bank offering home mortgages might round up $10 million worth of such mortgages.

What is a 1099 Remic?

Included with your 2020 Consolidated Forms 1099 Statement is information on your REMICs (real estate mortgage investment conduits) and certain CMOs (collateralized mortgage obligations) as required by IRS regulations. … It is important to note that REMICs and CMOs are not subject to cost basis reporting requirements.

How does a warehouse line of credit work?

A warehouse line of credit is provided to mortgage lenders by financial institutions. The lenders are dependent on the eventual sale of mortgage loans to repay the financial institution and to make a profit. … A warehouse line of credit allows a bank to finance a loan without using its own capital.

What does Fannie Mae GeMS stand for?

Fannie Mae Guaranteed Multifamily Structures™ (GeMS™) REMICs, built upon Fannie Mae’s successful DUS MBS program, are structured multifamily securities created from multifamily MBS collateral selected by Fannie Mae Multifamily Capital Markets.

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