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Real Estate Mortgage Investment Conduits (REMICs) create customized structuring of mortgage pass-through securities to redistribute cash flows and cater to a variety of market demands. Mortgage-backed securities are broken into different classes called tranches, which direct principal and interest to predetermined groups of investors. Freddie Mac offers a variety of REMIC products. In addition, Freddie Mac works closely with dealers and investors to customize REMIC structures to meet the needs of investors.

Product Overview

Freddie Mac's Real Estate Mortgage Investment Conduit (REMIC) program has a strong history as an industry leader and pioneer. Driven by a commitment to satisfying evolving market demands, efficient processes and superior service through the life of an investment, Freddie Mac's REMIC program is successful because it is customer-focused. The highly experienced dealers in Freddie Mac's REMIC Dealer Group serve as quality underwriters and liquidity providers of REMIC products.

What is a REMIC?

REMICs, created by the Tax Reform Act of 1986, are multiclass, mortgage-backed securities in which cash flows from the underlying mortgage assets are allocated to individual bonds, called tranches, with different maturities, coupons and payment priorities thereby allowing greater flexibility in structuring bond classes. REMICs are sometimes referred to as CMOs, or Collateralized Mortgage Obligations.

Freddie Mac began issuing REMICs in March 1988 and issued the first REMIC backed by Gold PCs in October 1990. Gold PCs are the cornerstone product of Freddie Mac's mortgage-backed securities program. Fixed income investors in the United States and abroad place a high value on the quality and liquidity of Gold PCs. Freddie Mac's innovative structured products such as REMICs continue to increase demand for Gold PCs and enable investors to better manage their portfolios.

image of REMIC tranche formation from Pass-through PC collateral

The Market Leader

Since it issued the first REMIC in 1988, Freddie Mac has been the standard for the industry.

From simple to highly complex and innovative structures, to rapid deal turnaround and reliable payment and disclosure, Freddie Mac provides superior support for investor and dealer REMIC needs in all market environments. Dealers have the ability to use customized collateral to develop unique cash flows designed to suit investor needs. Since Freddie Mac issued the first REMIC in 1988, Freddie Mac has been the standard for the industry.

Freddie Mac's history and track record of innovation contribute to the best execution for dealers and a multitude of investment options for investors. Since the 1990s, Freddie Mac has brought the market the first retail classes, Modifiable and Combinable Strip securities (Gold MACS), Callable REMICs (CPC), Modifiable and Combinable REMICs (MACRs), Guaranteed Maturity Classes (GMC) and Reference REMICs®. Freddie Mac has delved deeper into the fixed income market by providing customers with tailored solutions to market-driven investment needs. This is done by creating new structured products that appeal to a variety of investors already involved in the REMIC market, and those that had previously been precluded from investing in REMIC bonds given the constraint of extension risk. REMIC issuance is a complex, detailed venture – Freddie Mac's efficient processes, combined with new technologies and experienced transaction and operations specialists, ensure Freddie Mac's ability to bring REMICs to market on schedule and to consistently deliver timely investor reporting. Freddie Mac continually refines its processes, providing investors and dealers with a business partner upon whom they can rely for accurate and timely information.

This product overview is not an offer to sell or solicitation of an offer to buy any Freddie Mac securities. Offers for any given security are made only through applicable offering circulars and related supplements, which incorporate Freddie Mac's Information Statement and related supplements.