REMIC (real estate mortgage investment conduit)

Similar financial terms

REIT (real estate investment trust)
Real estate investment trust, which is similar to a closed-end mutual fund. REITs invest in real estate or loans secured by real estate and issue shares in such investments.

Mortgage sector
Securities backed by mortgage loans. These are loans obtained by borrowers in order to purchase residential property or and entity to purchase commercial property.

Federal National Mortgage Association (FNMA)
The FNMA is a US government-backed corporation which purchases mortgages from lenders and resells them to investors. It is financed by the issue of debt securities. Equity shares, known as Fannie Maes, are traded on the New York Stock Exchange.

Alternative mortgage instruments
Variations of mortgage instruments such as adjustable-rate and variablerate mortgages, graduated-payment mortgages, reverse-annuity mortgages, and several seldom-used variations.

Wholesale mortgage banking
The purchasing of loans originated by others, with the servicing rights released to the purchaser.

Stripped mortgage-backed securities (SMBSs)
Securities that redistribute the cash flows from the underlying generic MBS collateral into the principal and interest components of the MBS to enhance their use in meeting special needs of investors.

RAMs (Reverse-annuity mortgages)
Mortgages in which the bank makes a loan for an amount equal to a percentage of the appraisal value of the home. The loan is then paid to the homeowner in the form of an annuity.

Open-end mortgage
Mortgage against which additional debts may be issued.

Mortgager
The borrower of a loan secured by property.

Mortgagee
The lender of a loan secured by property.

Mortgage-backed securities (MBS)
Securities backed by a pool of mortgage loans.

Mortgage-Backed Securities Clearing Corporation
A wholly owned subsidiary of the Midwest Stock Exchange that operates a clearing service for the comparison, netting, and margining of agency-guaranteed MBSs transacted for forward delivery.

Mortgage rate
The interest rate on a mortgage loan.

Mortgage-pipeline risk
The risk associated with taking applications from prospective mortgage borrowers who may opt to decline to accept a quoted mortgage rate within a certain grace period.

Mortgage pipeline
The period from the taking of applications from prospective mortgage borrowers to the marketing of the loans.

Mortgage pass-through security
Also called a passthrough, a security created when one or more mortgage holders form a collection (pool) of mortgages sells shares or participation certificates in the pool. The cash flow from the collateral pool is "passed through" to the security holder as monthly payments of principal, interest, and prepayments. This is the predominant type of MBS traded in the secondary market.

Mortgage duration
A modification of standard duration to account for the impact on duration of MBSs of changes in prepayment speed resulting from changes in interest rates. Two factors are employed: one that reflects the impact of changes in prepayment speed or price.

Mortgage bond
A bond in which the issuer has granted the bondholders a lien against the pledged assets. Collateral trust bonds

Mortgage
A loan secured by the collateral of some specified real estate property which obliges the borrower to make a predetermined series of payments.

Closed-end mortgage
Mortgage against which no additional debt may be issued.

Collateralized mortgage obligation (CMO)
A security backed by a pool of pass-throughs , structured so that there are several classes of bondholders with varying maturities, called tranches. The principal payments from the underlying pool of pass-through securities are used to retire the bonds on a priority basis as specified in the prospectus.

Conventional mortgage
A loan based on the credit of the borrower and on the collateral for the mortgage.

Growing-equity mortgage (GEM)
A fixed-rate mortgage that provides scheduled payment increases over an established period of time, with the increased amount of the monthly payment applied directly toward reducing the remaining balance of the mortgage.

Reinvestment risk on bonds
Usually, when the yield of a bond is calculated, you assume that the coupons received before maturity are reinvested. The additional income from such reinvestment is sometimes referred to as interest-on-interest which depends on the prevailing interest-rate levels at the time of reinvestment. Volatility in the reinvestment rate of a given strategy because of changes in market interest rates is called reinvestment risk. This risk is that the interest rate at which interim cash flows can be reinve ...

Investment Club
A group of equal-minded individuals (friends, colleagues or acquaintances) who gather together for the purpose of investing in the stock exchange.

Zero-investment portfolio
A zero-investment portfolio consists of zero net value because of a balanced establishment between long and short position, usually in the context of an arbitrage strategy.

Dept investments
Investments that involve making capital available to others in exchange for intrest, through savings accounts, loans, or bonds.

Equity investments
Investments that involve ownership of shares or units, through purchase of stock or mutual fund shares.

Underinvestment problem
The mirror image of the asset substitution problem, wherein stockholders refuse to invest in low-risk assets to avoid shifting wealth from themselves to the debtholders.

Short-term investment services
Services that assist firms in making short-term investments.

Return on investment (ROI)
Generally, book income as a proportion of net book value.

Reinvestment risk
The risk that proceeds received in the future will have to be reinvested at a lower potential interest rate.

Reinvestment rate
The rate at which an investor assumes interest payments made on a debt security can be reinvested over the life of that security.

Passive investment management
Buying a well-diversified portfolio to represent a broad-based market index without attempting to search out mispriced securities.

Net present value of future investments
The present value of the total sum of NPVs expected to result from all of the firm's future investments.

Net investment
Gross, or total, investment minus depreciation.

Mutually exclusive investment decisions
Investment decisions in which the acceptance of a project precludes the acceptance of one or more alternative projects.

Legal investments
Investments that a regulated entity is permitted to make under the rules and regulations that govern its investing.