What is a REMIC (Real Estate Mortgage Investment Conduit)?
A Real Estate Mortgage Investment Conduit, or REMIC, is an entity which is utilized to pool loans and issue mortgage backed securities (MBS), or commercial mortgage backed securities (CMBS). First authorized by the Tax Reform Act of 1986, REMICs can be organized in several different ways, including corporations, trusts, or partnerships.
What is a Master Servicer?
Since CMBS loans are pooled together, packaged into commercial mortgage backed securities, and sold to investors, they are not generally serviced by the lender that originated the loan. Instead, conduit loans are typically serviced by a third-party servicer, referred to as a master servicer.
What is a CMBX Index?
CMBX indexes track the market for CMBS (commercial mortgage backed securities), securities that themselves are backed by CMBS loans. CMBX indexes are an invaluable tool for investors who want to invest in CMBS, but they can also reveal important trends for commercial real estate borrowers who are considering taking out CMBS financing.
What is a Special Servicer?
CMBS loans are pooled together, securitized and sold to investors on the secondary market. Therefore, they are not generally serviced by the original lender. Instead, they are generally serviced by a master servicer, a third-party company that handles payments and communicating with borrowers. However, if a CMBS loan goes into default, servicing will generally be switched to a special servicer, which will work to determine if the borrower can once again become current on their loan.