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Financial Terms | |
REMIC (real estate mortgage investment conduit) |
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Definition of REMIC (real estate mortgage investment conduit)REMIC (real estate mortgage investment conduit)A pass-through tax entity that can hold mortgages
Related Terms:After-tax real rate of returnMoney after-tax rate of return minus the inflation rate. Alternative mortgage instrumentsVariations of mortgage instruments such as adjustable-rate and variablerate approximated net realizable value at split-off allocationa method of allocating joint cost to joint products using a Business Expansion InvestmentThe use of capital to create more money through the addition of fixed assets or through income producing vehicles. capital investment analysisRefers to various techniques and procedures Capital InvestmentsMoney used to purchase fixed assets for a business, such as land, buildings, or machinery. Also, money invested in a business on the understanding that it will be used to purchase permanent assets rather than to cover day-to-day operating expenses. Closed-end mortgagemortgage against which no additional debt may be issued. ![]() Collateralized mortgage obligation (CMO)A security backed by a pool of pass-throughs , structured so that Commercial MortgageA loan made on real estate collateral, other than a residential property, in which a mortgage is given to secure payment of principal and interest. Conventional mortgageA loan based on the credit of the borrower and on the collateral for the mortgage. Dividend reinvestment plan (DRP)Automatic reinvestment of shareholder dividends in more shares of a Equity investmentThrough equity investment, investors gain part ownership of the corporation. The primary type of equity investment is corporate stock. Estate PlanningAn insurance program designed to provide funds for insured's dependents upon death of the insured, and to also conserve, as much as possible, the personal assets that the insured wants to bequeath to heirs. Exchange Rate, RealThe nominal exchange rate corrected for price level differences. Expected return on investmentThe return one can expect to earn on an investment. See: capital asset Foreign direct investment (FDI)The acquisition abroad of physical assets such as plant and equipment, with ![]() Freddie Mac (Federal Home Loan Mortgage Corporation)A Congressionally chartered corporation that Future investment opportunitiesThe options to identify additional, more valuable investment opportunities GEMs (growing-equity mortgages)mortgages in which annual increases in monthly payments are used to GMCs (guaranteed mortgage certificates)First issued by Freddie Mac in 1975, GMCs, like PCs, represent Government National Mortgage Association (Ginnie Mae)A wholly owned U.S. government corporation Graduated-payment mortgages (GPMs)A type of stepped-payment loan in which the borrower's payments guaranteed investment certificate (GIC)A GIC is an investment that gives you a guaranteed rate of return over a fixed period of time, usually between 30 days and 5 years. GICs are available from banks, trust companies, and other financial institutions. Guaranteed investment contract (GIC)A pure investment product in which a life company agrees, for a Insured MortgageAn insured mortgage protects only the mortgage lender in case you do not make your mortgage payments. This coverage is provided by CMHC [Canada mortgage and Housing Corporation] and is required if a person has a high-ratio mortgage. [A mortgage is high-ratio if the amount borrowed is more than 75% of the purchase price or appraised value, whichever is less.] Interest Rate, RealNominal interest rate less expected inflation. IntestateThis means dying without a will, in which case the provincial laws of the province in which the death occurred apply to the manner in which assets will be distributed. In other words, if you don't write your own will, the government will do it for you after your death and it may not be as you would have wished. InvestmentThe commitment of funds (capital) in anticipation of an increased Investment analystsRelated: financial analysts Investment bankFinancial intermediaries who perform a variety of services, including aiding in the sale of Investment BankerMiddleman between a corporation issuing new securities and the public. The middleman buys the securities issue outright and then resells it to customers. Also called an underwriter. investment centera responsibility center in which the manager Investment centreA division or unit of an organization that is responsible for achieving an adequate return on investment decisiona judgment about which assets will be Investment decisionsDecisions concerning the asset side of a firm's balance sheet, such as the decision to investment gradeBonds rated Baa or above by Moody’s or BBB or above by Standard & Poor’s. Investment grade bondsA bond that is assigned a rating in the top four categories by commercial credit Investment incomeThe revenue from a portfolio of invested assets. Investment managerAlso called a portfolio manager and money manager, the individual who manages a Investment product line (IPML)The line of required returns for investment projects as a function of beta Investment SpendingExpenditures on capital goods including new housing. Financial ''investments" and sales of existing assets are not included. Investment tax creditProportion of new capital investment that can be used to reduce a company's tax bill Investment Tax CreditA reduction in taxes offered to firms to induce them to increase investment spending. Investment trustA closed-end fund regulated by the investment Company Act of 1940. These funds have a Investment valueRelated:straight value. InvestmentsAs a discipline, the study of financial securities, such as stocks and bonds, from the investor's Legal investmentsinvestments that a regulated entity is permitted to make under the rules and regulations MortgageA loan secured by the collateral of some specified real estate property which obliges the borrower MortgageDebt instrument by which the borrower (mortgagor) gives the lender (mortgagee) a lien on property as security for the repayment of a loan. Mortgage-backed securitiesSecurities backed by a pool of mortgage loans. Mortgage-Backed Securities Clearing CorporationA wholly owned subsidiary of the Midwest Stock Mortgage bondA bond in which the issuer has granted the bondholders a lien against the pledged assets. Mortgage (Credit Insurance)An agreement between a creditor and a borrower, where the creditor has loaned an amount to the borrower for purposes of purchasing a loan secured by a home. Mortgage durationA modification of standard duration to account for the impact on duration of MBSs of Mortgage InsuranceCommonly sold in the form of reducing term life insurance by lending institutions, this is life insurance with a death benefit reducing to zero over a specific period of time, usually 20 to 25 years. In most instances, the cost of coverage remains level, while the death benefit continues to decline. Re-stated, the cost of this kind of insurance is actually increasing since less death benefit is paid as the outstanding mortgage balance decreases while the cost remains the same. Lending institutions are the most popular sources for this kind of coverage because it is usually sold during the purchase of a new mortgage. The untrained institution mortgage sales person often gives the impression that this is the only place mortgage insurance can be purchased but it is more efficiently purchased at a lower cost and with more flexibility, directly from traditional life insurance companies. No matter where it is purchased, the reducing term insurance death benefit reduces over a set period of years. Most consumers are up-sizing their residences, not down-sizing, so it is likely that more coverage is required as years pass, rather than less coverage. Mortgage Life insurance (Credit Insurance)Decreasing term life insurance that provides a death benefit amount corresponding to the decreasing amount owed on a mortgage. Mortgage pass-through securityAlso called a passthrough, a security created when one or more mortgage Mortgage pipelineThe period from the taking of applications from prospective mortgage borrowers to the Mortgage-pipeline riskThe risk associated with taking applications from prospective mortgage borrowers Mortgage rateThe interest rate on a mortgage loan. MortgageeThe lender of a loan secured by property. MortgagerThe borrower of a loan secured by property. Mutually exclusive investment decisionsinvestment decisions in which the acceptance of a project Net investmentGross, or total, investment minus depreciation. Net Investmentinvestment spending minus depreciation. Net present value of future investmentsThe present value of the total sum of NPVs expected to result from Net Realizable ValueSelling price of an asset less expenses of bringing the asset into a saleable state and expenses of the sale. net realizable value approacha method of accounting for by-products or scrap that requires that the net realizable value of these products be treated as a reduction in the cost of the primary products; primary product cost may be reduced by decreasing either net realizable value at split-off allocationa method of allocating joint cost to joint products that uses, as the proration base, sales value at split-off minus all costs necessary Net realizeable valueThe expected revenue to be gained from the sale of an item or Open-end mortgagemortgage against which additional debts may be issued. Related: closed-end mortgage. Passive investment managementBuying a well-diversified portfolio to represent a broad-based market Passive investment strategySee: passive management. postinvestment auditthe process of gathering information qualified investments (Canada)Qualified investments is the term used for investments that can be held in an RSP. These investments generally include: RAMs (Reverse-annuity mortgages)mortgages in which the bank makes a loan for an amount equal to a RealMeasured in base year, or constant, dollars. Contrast with nominal. Real Actions (Earnings) ManagementInvolves operational steps and not simply acceleration Real assetsIdentifiable assets, such as buildings, equipment, patents, and trademarks, as distinguished from a real assetsAssets used to produce goods and services. Real Business Cycle TheoryBelief that business cycles arise from real shocks to the economy, such as technology advances and natural resource discoveries, and have little to do with monetary policy. Real capitalWealth that can be represented in financial terms, such as savings account balances, financial Real cash flowA cash flow is expressed in real terms if the current, or date 0, purchasing power of the cash Real Exchange RateExchange rate adjusted for relative price levels. Real exchange ratesExchange rates that have been adjusted for the inflation differential between two countries. Real GDPGDP expressed in base-year dollars, calculated by dividing nominal GDP by a price index. Real IncomeIncome expressed in base-year dollars, calculated by dividing nominal income by a price index. Real interest rateThe rate of interest excluding the effect of inflation; that is, the rate that is earned in terms Real Interest RateThe rate of interest paid on an investment adjusted for inflation real interest rateRate at which the purchasing power of an investment increases. Real marketThe bid and offer prices at which a dealer could do "size." Quotes in the brokers market may real microprofit centera center whose output has a market value Real Money SupplyMoney supply expressed in base-year dollars, calculated by dividing the money supply by a price index. real optionsOptions embedded in real assets. Real Rate of InterestSee interest rate, real. Real timeA real time stock or bond quote is one that states a security's most recent offer to sell or bid (buy). real value of $1Purchasing power–adjusted value of a dollar. Real WageWage expressed in base-year dollars, calculated by dividing the money wage by a price index. Realizable Revenue A revenue transaction where assets received in exchange for goods andservices are readily convertible into known amounts of cash or claims to cash. Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |