REMIC

REMIC
REM·IC /'re-mik/ n [r eal e state m ortgage i nvestment c onduit]: an entity (as a corporation, partnership, or trust) that functions as a vehicle for investment in mortgage obligations and esp. collateralized mortgage obligations and receives favorable tax treatment by restricting its own investment to the maintenance of cash flow and reserves and to investment in properties acquired from foreclosure on the underlying mortgages – called also real estate mortgage investment conduit; compare pass-through security at security; real estate investment trust at trust

Merriam-Webster’s Dictionary of Law. . 1996.

REMIC
USA
A special purpose vehicle for pooling mortgage loans and issuing mortgage-backed securities. Mortgages are held in trust and securities are issued that represent interests in them. Mortgage-backed securities can be issued as sales of assets that remove loans from the lender's balance sheet. They can also be issued as debt financings that keep the loans as balance sheet assets. An investor's REMIC income is taxable, but the REMIC itself is largely exempt from federal tax. REMIC status is available to corporations, partnerships, trusts and asset pools that have no legal designation. REMICs may engage only in permitted investments, which include foreclosure property, qualified reserve assets and cash flow investments.

Practical Law Dictionary. Glossary of UK, US and international legal terms. . 2010.

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