Business and Personal Finance Dictionary

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• REAL ESTATE MORTGAGE INVESTMENT CONDUIT (REMIC)
  
  The name of a type of mortgage-backed pass-through security. REMICs can take many forms. REMICs are typically multiclass securities. Unlike simple, non-REMIC CMOs, REMICs can separate mortgage pools into different risk classes as well as different maturity classes. Some of the most common forms of REMICs are sequential pay CMOs, planned amortization class (PAC) tranches, targeted amortization class (TAC) tranches, and companion tranches. REMICs may also have interest-only tranches, principal-only tranches, and residual tranches. Today almost all CMOs are issued in REMIC form to take advantage of provisions in the Tax Reform Act of 1986. However, even though REMICs are overwhelmingly dominant in the CMO market, the term "REMIC" is used far less often than the term "CMO." CMO is used to refer to all forms of MBSs other than simple pass-through MBS pools.
  
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