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REIMIS eliminate many of the inefficiencies in secured mortgage bonds (CMO) and provide issuers with more options and flexibility.  REMICs do not have minimum capital requirements, so REIMAs can sell all of their assets instead of keeping a few to meet hedging requirements. Because ordinary interest is automatically classified as debt, REMICs also avoid the unpleasant reinvestment risk borne by CMO issuers to post debts. REMICs can also make monthly distributions to investors from whom CMOs make quarterly payments. ReMIC`s residual units have more cash than owners` trusts that limit personal liability interests and transfers. REMIS offer more flexibility than CMOs, as issuers can choose any legal entity and any type of securities. REMIC`s multi-class features also allow issuers to offer different service priorities, as well as different maturity dates, reduce the risk of default and reduce credit enhancement requirements.  REMICs are also fairly easy to use, as the choice of CIMR is not difficult and the extensive code and regulations guidelines “provide a high level of security for tax treatment that may not be available for other types of MBS.”  REMICs are investment vehicles that hold commercial and residential mortgages in fiduciary and issuance documents that constitute a reliable indiscised interest in these mortgages. A REMIC groups mortgages into pools and issues pass certificates through, multi-class bonds that are akin to a secured mortgage bond (guaranteed mortgage obligation” (guaranteed mortgage commitment) or other securities to investors in the secondary mortgage market.
Mortgage-backed securities issued through a REMIC may be loans from the issuer or an asset sale. The legal form is not relevant to REICCs: trusts, companies and partnerships can all opt for DEMIC status, and even asset pools that are not legal entities can be considered REMICs.  The Tax Reform Act eliminated double taxation of income, the issuer at the corporate level and dividends paid to custodians, allowing a REMIC to structure an offer of mortgage-backed securities as an asset sale, effectively eliminating credits from the original lender`s balance sheet, not secured debt financing in which loans remain balance sheet assets (as is the case). A REMIC itself is exempt from federal tax while businesses are fully taxable. Because REMICs are generally tax-exempt at the corporate level, they can only invest in approved mortgages and investments, including individual or multi-family mortgages, commercial mortgages, secondary mortgages, mortgage holdings and federal agency passing documents. Non-recovery assets, such as credit card receivables, leases and auto loans, are ineligible investments. The Tax Reform Act has facilitated the maintenance of mortgage securities as eligible portfolio assets for savings banks and real estate trusts. For example, a savings institution may include mortgage-backed securities issued by REMIC as eligible assets to meet federal salary and lending requirements. RE-ERCs are subject to federal income tax at the highest corporate tax rate on performance income and must submit invoices via Form 1066 Returns.  Taxable income from enforcement is the same as in the case of a real estate investment trust fund (REIT) and may include rents related to increased profits, rents paid by a related party,