2012-10-19huffingtonpost.com

``Many of the trusts that hold mortgage notes are called real estate mortgage investment conduits or, more affectionately, "REMICs." REMICs receive preferential tax treatment, which encourages investors to purchase interests in the trusts and helps support the real estate market and general economy. The special tax treatment REMICs receive is conditioned upon the mortgage notes meeting three fundamental requirements. First, the trusts must actually own mortgage notes. Second, the mortgage notes must be properly secured by real property (generally the borrower's home). Third, the property value must be at least 80 percent of the amount of the loan. ''


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