Speaking of Securitization
The RE-REMIC phenomenon
In the current economic climate, there is a major scarcity of new primary issuance in the mortgage securitization market. In addition, government strategies to revive mortgage securitization are still under development. Yet, there has been a surge in RE-REMIC (Re-securitization of Real Estate Mortgage Investment Conduit Securities) transactions.
The recent paper by Deloitte & Touche LLP titled " Speaking of Securitization: The RE-REMIC phenomenon," summarizes the technical accounting, regulatory, and tax issues that apply to these RE-REMIC transactions. It specifically focuses on:
- The mechanics of the RE-REMIC process
- Bank regulatory capital risk weightings
- Insurance company risk-based capital factors and statutory accounting
- What are the federal income tax consequences of sponsoring a RE-REMIC?
- How is a RE-REMIC accounted for under U.S. GAAP (Generally Accepted Accounting Principles)?
- Accountants’ Agreed-Upon Procedures Reports
Read the complete article to equip yourself in navigating the complex terrain, as the industry looks forward to the day when primary issuance of new issue whole loan securitizations will overtake the pace of RE-REMIC activity.